City Council
Report
City Council Meeting: January 24, 2023
Agenda Item: 5.C
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Revenue Subject: Award RFP No. 339 and enter into Agreement with HDL Coren & Cone to Provide Property Tax Information and Audit Services
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines;
2. Award RFP #339 to HdL Coren & Cone to provide property tax information consulting and audit services for the Finance Department; and
3. Authorize the City Manager to negotiate and execute a professional services agreement with HdL Coren & Cone, a California Corporation, in an estimated amount of $242,875 for five years, with one additional three-year renewal option on the same terms and conditions, with future year funding contingent on Council budget approval.
Summary
The City has contracted for property tax information consulting and auditing services for approximately 30 years. Since 1997, HdL Coren & Cone (HdLCC) has provided the City with property tax information consulting and audit services needed to ensure that the City receives all property tax revenues to which it is entitled, property tax revenue information reports to help forecast City property tax revenues as well as aid in economic planning and analysis, bond disclosure report updates, and other consulting services as needed. Staff recommends HdLCC to provide property tax information consulting and audit services for an estimated amount of $242,875 for five years with one additional three-year renewal option.
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Discussion
Local taxes represent approximately 73% of the projected fiscal year 2022-23 General Fund revenues, with property taxes projected to account for 19.2 % (or $77.4 million.
Property tax revenues result from a 1% levy on the assessed value of all real property in the City. The base property tax levy of 1% of property assessed valuation is collected by the Los Angeles County Tax Collector and is distributed to various public agencies located in the County including cities, school districts, and special districts. The City’s share of the 1% levy is approximately 14-17% depending on the area of the City where the property is located. Property tax information and audit services are specialized, requiring in-depth knowledge of local and state government operations and legislation.
HdLCC would work with the Finance and Community Development Departments to prepare annual tax reports and property tax audits; reconcile the Annual Auditor Controller Assessed Valuation reports; and prepare assessment appeal information. As part of its property tax service, HdLCC would prepare preliminary and final property tax reports for all City tax districts and former Redevelopment project areas and present the data to the City and Agency. HdLCC would also assist staff in forecasting property tax revenues and the City’s share of residual payments, calculating statutory pass-through payments to taxing entities, preparing fiscal consultant reports, and updating bond disclosure schedules and reports. Property tax auditing services would assist in identifying misallocated property tax revenues and enhance the revenue recovery process. Audits conducted on secured and unsecured property tax rolls would ensure that each parcel is coded to the appropriate tax entity.
HdLCC’s estimated annual cost to provide property tax information consulting services is $47,575 plus a one-time 25% contingency fee on all property tax audit recoveries.
Consultant Selection
Bidder Recommendation
Best and Only Bidder HdL Coren & Cone
Evaluation Criteria Financial stability and of firm, financial strength and risk management, experience/technical competence, value
added-breath of services, ability to meet work plan/timelines, 3 of 4
cost of services, and technology solutions for processing and reporting information, references, and value added-breath of service.
Municipal Code SMMC 2.24.190
RFP Data
Date Posted Posted On
Advertise In
(City Charter &
SMMC)
Vendors
Downloaded
Date Publicly
Opened
10/20/2022 City's Online
Bidding Site
Santa Monica
Daily Press
11 11/28/2022
Additional Vendor Outreach & Justification to Award
HdLCC is recommended as the best bidder due to their many years of experience monitoring the City’s and many other California cities’ property tax revenues, the firm’s long standing and documented success in audit recoveries, its ability to meet project work plan goals in a timely manner, and use of methodologies that will be implemented to maximize City revenues.
The firm was founded in 1992 and developed California’s first computerized property tax management program. In addition, the firm provides clients with parcel tax administration and successor agency consulting. They also provide property tax management services to over 260 California public agencies. The City’s current agreement with HdLCC was executed on March 14, 2018, and terminates on March 14, 2023.
Staff reached out to several firms for feedback on why they did not submit a proposal. Some firms that downloaded the proposal later determined that the scope of service did not fit with their firms’ business, volume of work (existing workload), or declined to comment.
Environmental Review
The award agreement is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The award agreement is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant 4 of 4
effect on the environment.” The agreement will provide the City with property tax information consulting and auditing services. Therefore, it can be seen with certainty that the proposed agreement would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from the General Fund to award an agreement with HdLCC for property tax information consulting services for an estimated annual amount of $47,575 plus approximately $1,000 for audit recovery services (based on historical averages), resulting in an estimated five-year total of approximately $242,875. Future year funding is contingent on Council budget approval.
Agreement Request
FY 2022-23
Estimated Budget
Request Amount
(prorated for 4
months)
Amount for Future Years Department Account # Total Estimated Contract Amount
$16,192 $226,683 01300005.552010 $242,875
Prepared By: David Carr, Assistant City Treasurer
Approved Forwarded to Council
Attachments:
A. Oaks Initiative Form