Placentia City Council
AGENDA REPORT
TO: CITY COUNCIL
VIA: CITY ADMINISTRATOR
FROM: DIRECTOR OF FINANCE
DATE: MAY 2, 2023
SUBJECT: PROFESSIONAL SERVICES AGREEMENT WITH HdL, COREN & CONE FOR
PROPERTY TAX CONSULTING SERVICES
FISCAL
IMPACT: EXPENSE: $15,715 ANNUALLY PLUS HOURLY FEES FOR AS -NEEDED
CONSULTING SERVICES
BUDGETED: FUNDING INCLUDED IN FY23/24 PROPOSED BUDGET
SUMMARY:
City Staff relies upon accurate, thorough property tax collection information to estimate revenues for budget purposes, assess progress in collecting property tax revenues throughout the year, and to monitor economic trends of local real estate. Additionally, Staff must be sure that real estate parcels are recorded within the correct tax revenue area (TRA) by the County of Orange so that property tax allocation that is due to the City will not be paid to another agency in error. The specialized skills and equipment needed to undertake such analysis is beyond the scope of Staff and the cost of specialized software is prohibitively expensive. Therefore, it is more practical to hire contractors with the appropriate skills, training, and equipment to perform property tax analysis for the City.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Approve the Professional Services Agreement with HdL, Coren and Cone for Property Tax Management, Information and Audit Services for a five-year term ending June 30, 2027; and
2. Authorize the City Administrator and/or his designee to execute all the necessary documents in a form approved by the City Attorney.
STRATEGIC PLAN STATEMENT:
This item is consistent with the City Council approved 5 -Year Strategic Goal # 1 Ensure Long - Term Fiscal Sustainability under Objective #1.4, which protects and preserves existing economic development/property nodes throughout the City to maximize revenues to prevent over -reliance upon any one source.
1 .e.
May 2, 2023
City Council Agenda
May 2, 2023
DISCUSSION:
The County of Orange makes property tax collection data available to local government agencies for analysis and tracking purposes. However, additional analysis of the data is needed before meaningful reports can be created for use by Staff. Additionally, if recording errors are made by the County it can lead to allocations of property tax to the wrong agency. If the errors can be identified and brought to the attention of County staff, the allocations can be recovered and reallocated to the correct agency.
HdL, Coren and Cone (HdLCC), a California Corporation, is qualified to perform such specialized analysis. The City has utilized their services for the past twenty (20) years with exceptional results.
Many other local cities also use HdL, Coren and Cone and have experienced similar results in recovering misallocated property tax.
In addition to their audit and analysis services, HdLCC also provides a web -based software application to its clients to access the City's property tax data and is updated monthly to provide information on changes in ownership, updated appeal filings and deed recordings. This tool is essential in forecasting property tax revenue as well as economic development opportunities.
The annual cost for basic service is $15,715 per year which is based upon the number of parcels in the City of Placentia (14,282 parcels). In addition, HDL shall receive twenty-five percent (25%) of General Fund or tax increment property tax revenue owed to the City as a result, either directly or indirectly, of an audit performed by HDL. The amount of erroneously allocated property tax is hard to predict but would help offset the costs of this contract.
FISCAL IMPACT:
Fiscal Years 2023-24: $15,715 annual fixed fee plus hourly rate for additional as -needed consulting services. The base annual fee will be adjusted annually by the California Consumer Price Index (CCPI) for all items as determined by the California Department of Industrial Relations as measured February to February by the California All Urban Consumers index. The cost for this service has been included within the proposed 2023-24 fiscal year budget.
Prepared by:
Jennifer Lampman
Director of Finance
Attachment:
Professional Services Agreement
Reviewed and approved:
Dam R ala`
City Administrator