REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to the Agreement with MuniServices, LLC for Sales and Use Tax Auditing Services
Report
BACKGROUND
In August 2014, the City Council authorized the City Manager to execute an agreement with MuniServices, LLC to provide sales and use tax auditing services for the City. MuniServices, LLC has been performing these services for nearly 25 years. The current term expired on June 30, 2019. Staff is seeking approval to amend the agreement by extending the term for up to two years ending on June 30, 2021.
DISCUSSION
The City engages MuniServices, LLC to audit sales and use tax records of the California State Board of Equalization pertaining to the collection and allocation of those taxes and to provide recovery services for misallocated and underreported tax revenues found during those audits. Staff is requesting approval to extend the term for up to two years to continue the services without disruption, allow for time to conduct a competitive solicitation process, award a new contract and, if necessary, transition services to the selected contractor. Because the existing contractor has been performing these services for almost 25 years, it is anticipated that an extended transition period will be required if a new contractor is selected. Staff plans on conducting a competitive solicitation in fiscal year 2019/20.
MuniServices, LLC has agreed to maintain the current compensation during the two-year Amendment term. The agreement with MuniServices, LLC includes a 15% contingency fee on sales and use tax revenues recovered; an annual fixed fee for the STARS Query System software program allowing City staff to research and analyze tax information; and time and material rates ranging from $75 to $300 per hour for additional consulting services as may be required.
The City has paid MuniServices, LLC a total amount of $1,733,985 under the agreement. The compensation paid to MuniServices, LLC has averaged $346,797 an...
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