City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-01099 9/19/2023 Consent Item 4.
Supplemental Agreement: Revenue Audit and Recovery Services File ID: 2023-01099
Location: Citywide
Recommendation: Pass a Motion to (1) authorize the City Manager or the City Manager’s designee to execute Supplemental Agreement No. 1 to City Agreement No. PRC000378 with MuniServices, LLC for revenue audit and recovery services to increase the not-to-exceed amount of the contract by $275,000, for a new contract sum of $1.9 million with no change in the contract term of 7/1/19 - 6/30/24, and (2) authorize the City Manager or the City Manager’s designee to execute an additional Supplemental Agreement as necessary to increase the not-to-exceed amount of the contract by and additional $200,000 for a new contract sum of $2.1 million.
Contact: Julie Coffeen, Program Manager, (916) 808-1259, [email protected], Finance Department
Presenter: None
Attachments:
1-Description/Analysis
2-Supplemental Agreement 1 to PRC000378
Description/Analysis
Issue Detail: The City of Sacramento has an ongoing need for tax audit and recovery services to ensure the City is fully and accurately collecting tax revenues owed to the City. In April 2019, the City released Request for Proposal P19061211002 to procure these services. On July 23, 2019 (Item 11), Council approved a 5-year agreement in an amount not to exceed $1.625 million with MuniServices LLC (dba Avenu Insights & Analytics) to provide audit, recovery, and forecast services for major tax revenue sources including Sales & Use Tax (SUT), Utilities Users Tax (UUT), Transient Occupancy Tax (TOT), and Cannabis Business Operations Taxes (CBOT).
The Sales & Use tax audit component of the contract is reimbursed on a contingency basis with the contractor receiving payment based on the net increase in revenues received by the City due to the contractor finding Sales & Use Tax revenue that was owed to the City but was remitted in error to a different jurisdiction by the State of California Department of Tax and Fee Administration. Due
File ID: 2023-01099 9/19/2023 Consent Item 4.
primarily to higher than anticipated SUT recoveries for the City by the contractor, staff is requesting this increase to continue these audit and recovery services.
Under this contract, over $9 million dollars in misallocated sales and use tax were discovered and appropriately allocated to the City of Sacramento. There have also been 41 cannabis businesses, 36 hotels, and 4 utility providers audited to ensure compliance with the City’s CBOT, TOT, and UUT ordinances.
Policy Considerations: The recommendations in this report are consistent with the provisions of City Code Chapter 3.64 regarding contracts for professional services.
Economic Impacts: None.
Environmental Considerations: This action is not a project that is subject to California Environmental Quality Act (CEQA) because it is an administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines §15378(b)(5).) Sustainability: None.
Commission/Committee Action: None.
Rationale for Recommendation: An increase to the not-to-exceed amount of the contract will allow the contractor to continue to discover misallocated SUT and to conduct compliance audits of taxpayers through June 30, 2024, the end of the current contract.
Financial Considerations: Sufficient funding is available in the fiscal year 2023/24 operating budget for the departments utilizing this service. These services are critical to ensure full and accurate collection of tax revenues due to the City.
Local Business Enterprise (LBE): MuniServices, LLC (dba Avenu Insights & Analytics) is an LBE.
1 CONTRACT #: PRC000378 - 1CONTRACT EFFECTIVE DATE: July 1, 2023CONTRACT NAME: Revenue Audit and Recovery ServicesDEPARTMENT: FinanceDIVISION: RevenueThe City of Sacramento ("City") and MuniServices, LLC ("Contractor"), as parties to that certain Contract awarded for the above Event and designated as City Contract Number PRC000378, including any prior Contract Amendments modifying the Contract (the Contract and Contract Amendments are hereafter collectively referred to as the "Contract"), hereby amend and modify the Contract as follows:1 SCOPEThe Services specified in the Scope of Services Exhibit of the Contract are not changed.2 TIME OF PERFORMANCEThe Time of Performance for the Contract is not changed.3 CONTRACT AMOUNTIn consideration of the Contract Amendment(s) described above, the maximum not-to-exceed amount that is specified in the Contract is INCREASED by $275,000, and the Contract's maximum not-to-exceed amount is amended as follows:The original Contract sum was: $1,625,000The net change by previous Contract Amendment was: $0The Contract sum prior to this Contract Amendment was: $1,625,000The Contract sum will be INCREASED by this Contract Amendment: $275,000The new Contract sum including all Contract Amendments: $1,900,0004 FULL COMPENSATION 2 Contractor agrees that the amount of increase or decrease in the not-to-exceed amount specified in section, above, shall constitute full compensation for the additional and/or revised Services specified in section, above, and shall fully compensate Contractor for any and all direct and indirect costs that may be incurred by Contractor in connection with such additional and/or revised Services, including costs associated with any changes and/or delays in work schedules or in the performance of other Services or work by Contractor.5 AUTHORIZED SIGNATUREContractor warrants and represents that the person or persons executing this amendment on behalf of Contractor has or have been duly authorized by the Contractor to sign this amendment and bind Contractor to the terms hereof.6 FULL FORCE AND EFFECTExcept as specifically revised herein, all terms and conditions of the Contract shall remain in full force and effect, and Contractor shall perform all of the services, duties, obligations, and conditions required under the Contract, as supplemented and modified by this amendment to the original agreement.