SR-100907-1F~~
City Council Report
Gity of
Santa Monica°
City Council Meeting: October 9, 2007
Agenda Item:
To: Mayor and City Council
From: Carol Swindell, Director of Finance
Andy Agle, Director of Housing and Economic Development
Subject: Property Tax and Documentary Transfer Tax Auditing, Fiscal Consultant
Reports, Tax Information Reporting Services and other Related Services
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate a three-
year professional services contract with two one-year options with HdL Coren & Cone in
an amount not to exceed $465,000.
Executive Summary
The Finance and Housing and Economic Development departments require property
and documentary transfer tax auditing services to monitor and forecast property tax and
tax increment revenues. In addition to property tax auditing services, the City and
Agency require auditing of documentary transfer taxes, calculating of pass through
payments to taxing entities, preparation of fiscal consultant reports, property tax reports,
and other consulting services as needed. HdL Coren & Cone is the best firm to provide
these services to the City and the Agency. The cost will be split generally two-thirds to
the Agency and one-third to the City, funds are available in each respective budget.
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Background
The City has contracted for property and documentary transfer tax. auditing services,
fiscal consultant reports associated with Agency tax allocation bonds, and tax
information related services since 1992. In 1997, these services were expanded to
include assisting the Redevelopment Agency with auditing and monitoring property tax
assessments for the Earthquake Recovery, Downtown, and Ocean Park project areas.
Property tax audits are critical to the City and Agency to uncover and correct errors in
the distribution of property tax revenues, and to ensure that resulting taxes are
accurately allocated to the City and the Agency's project areas.
Discussion
In August 2007, staff issued a Request for Qualifications (RFQ) for property tax auditing
and other .related services. Two firms responded to the RFQ. A selection committee
comprised of Finance and Housing and Economic Development staff evaluated the
proposals and conducted interviews with MuniServices and HdL Coren and Cone. HdL
Coren & Cone was found to be the firm that could best provide a broad range of
services with experienced staff at a competitive cost to the City and Agency. As part of
their property tax service, HdL Coren and Cone will prepare a preliminary and final
property tax report for all City tax districts and the four redevelopment project areas and
present the data to the City and Agency. They will assist the City and Agency in
forecasting property tax and tax increment revenues; calculating statutory property tax
increment pass-through payments to taxing entities, preparing fiscal consultant reports,
updating bond disclosure schedules and bond reports for the Agency.
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HdL Coren and Cone has provided a broad range of services to the City and the
Agency for the last ten years. They will continue to provide services that will involve
preparing: Property Tax Audit Reports (by performing an analysis of the Assessor Rolls
to identify all parcels on both the secured and unsecured tax rolls and verify that parcel
valuations and the resulting taxes are correctly allocated to the City and the Agency's
four project areas); assessment appeals reports; reconciliation of the Annual Auditor-
Controller Assessed Valuations Report with the tax rolls; and related services.
Moreover, HdL Coren & Cone will update the City's existing database for all City parcels
on a quarterly basis and update and maintain the existing program for statutory property
tax increment pass-through payments to other taxing entities.
Budget/Financial Impact
The terms of the proposed contract with HdL Coren and Cone will provide for an initial
three-year term with the City having the option of renewing the contract for two
additional one-year periods. The amount of the contract over the three year period is
not to exceed $465,000. Annual property tax information services costs are $20,150 to
be charged one-third to the Finance Department ($6,511) at account number
01221.555060 and two-thirds to the Agency ($13,639) at account number
01263.555060.
The remaining costs ($404,550) associated with property tax and documentary tax
audits, fiscal consultant and other services will be charged to the appropriate Agency
and City account number as services are provided. The Audit recovery work on
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documentary transfer tax audits will be charged to the City while fiscal consultant
reports and bond related services will be charged to the Agency.
Prepared by: Janet Shelton, Budget Manager
Tina Rodriguez, Redevelopment Administrator
Approved: Forwarded to
Carol Swindell; Director (~ ~F~. Xamont EN
Finance ty Manager
Andy Agle, Director
Housing and Econo
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Reference Contract
No. 8833 (CCS)