City Council Agenda Report
Meeting Date: April 21, 2026
From: Brian Saeki, City Administrator
Department: City Administration
Submitted by: Lilia Hernandez, Assistant to the City Administrator Subject
Report on Contract Approved by the City Administrator for a Business Tax Contribution Study Recommendation
Receive and file the report on the Services Agreement with Kosmont & Associates, Inc. for real estate advisory services related to the analysis of municipal fees and taxes, as approved by the City Administrator pursuant to Vernon Municipal Code Section 3.32.110(B)(2).
Background
The City’s Utility Users Tax (UUT) generates approximately $14 million each year, which represents more than 15% of the City’s total revenues, making it the City’s second largest revenue source. The UUT (Measure R) was passed by voters in 2018 and is scheduled to sunset in 2028 unless renewed by the voters. In anticipation of the expiration of the UUT, on October 21, 2025, the City Council received a presentation on the potential of placing a measure to extend the UUT on the ballot for the April 2026 General Municipal Election. Subsequently, a presentation was also made to the Vernon Business and Industry Commission (BIC) and discussed at a Business Breakfast event in late 2025. The business community expressed concerns regarding the parity, or lack thereof, in the tax contributions paid by different business sectors within the City. It was suggested that the City consider a study to evaluate whether different business types contribute their fair share in taxes for their use of City infrastructure and services.
Accordingly, on February 12, 2026, the City Administrator engaged the services of Kosmont & Associates, Inc. (Kosmont) to conduct a business tax contribution study. Kosmont was tasked with conducting an analysis of municipal fees and taxes paid by the various types of businesses located in the City and making recommendations for any necessary adjustments to ensure parity across business sectors. Kosmont was selected based on their expertise in conducting the research and type of analysis needed, previous work completed to the City’s satisfaction, and existing familiarity with the City’s financial structure. Based on the contract amount of $35,000, the agreement with Kosmont would normally be subject to informal selection requirements.
However, given the time-sensitive nature of the study, the City Administrator determined it was in the best interest of the City to award a contract to Kosmont, without a competitive selection process, as Kosmont’s existing familiarity with the City enabled the firm to begin work immediately. Expediency in completing the study is essential to properly budget for Fiscal Year 2026-27 in anticipation of any potential ballot measures that may need to be explored for the April 2027 General Municipal Election. A report regarding the contract award is provided to City Council as required by Section 3.32.110(B)(3) of the Vernon Municipal Code.
Fiscal Impact
The fiscal impact is not-to-exceed $35,000. Sufficient funds are available in General Fund, City Administration Department, Professional Services Account No. 011-010-105-529215 for the current fiscal year.
Attachments
None.