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SR-01-22-2013-3DID /1 R City of City Council Report Santa Monica City Council Meeting: January 22, 2013 Agenda Item: 3`D To: Mayor and City Council From: Gigi Decavalles- Hughes, Director of Finance Subject: Property Tax and Audit Services Recommended Action Staff recommends that the City Council authorize the City Manager to negotiate and execute a five -year professional services contract with HdL Coren and Cone, a California -based company, in an amount not to exceed $228,500 for property tax an audit services. Executive Summary Staff requires property tax information and audit services, including audits to ensure the City is receiving all property tax revenues due; property tax revenue trend reports to forecast City property tax revenues; bond disclosure report updates; and other consulting services as needed. Staff recommends HdL Coren and Cone as the best firm to provide these services to the City. Background Since 1992, the City has contracted for property tax auditing services, fiscal consultant reports associated with tax allocation bonds issued by the former Redevelopment Agency, and property tax services. In 1997, these services were expanded to include audits of secured and unsecured property tax rolls. The audits resulted in the discovery of misallocated property taxes primarily affecting the Earthquake Recovery Redevelopment Project Area. These financial services are critical to uncover and correct errors in the distribution of property tax payments to the City. Discussion On September 28, 2012, staff issued a Request for Qualifications (RFQ) for property tax auditing and other related services and posted it on the City's online bidding system and the Successor Agency Website. The RFQ was also e- mailed to the following three firms on September 28, 2012: HdL Coren and Cone, MuniServices, and Keyser Marston 1 Associates. A subsequent addendum to the RFQ was issued on October 3, 2012 providing additional clarification on services being requested by the Successor Agency and the City. This addendum was posted on Planet Bids and the Successor Agency Website on October 3, 2010 and was e- mailed to each of the aforementioned firms. The deadline to respond to the RFQ was October 8, 2012, HdL Coren and Cone and Keyser Marston Associates responded to the RFQ. In compliance with SMMC 2.24.070, a selection committee comprised of Finance and Housing and Economic Development staff evaluated the proposals based on various criteria including but not limited to the applicability of the proponent's experience as it relates to the RFQ's scope of work, capacity and feasibility of the respondent to accomplish all elements of the scope of services, and available resources of the respondent to accomplish all elements of the scope of services. Based on proposals and interviews with Keyser Marston Associates and HdL Coren and Cone conducted by staff on October 22, 2012, HdL Coren & Cone was found to be the firm that could best provide the broad range of required services with experienced staff at a competitive cost to the City In particular, HdL Coren and Cone met the RFQ criteria through their experience, extensive staff capacity, and available resources. HdL has been successfully providing the scope of services requested by the City and the former Redevelopment Agency for 16 years and providing staff with access to a property tax data base that is updated on a quarterly basis and contains 20 years' worth of property tax data, allowing staff to easily retrieve information as needed. As part of their property tax service, HdL Coren and Cone would prepare a preliminary and final property tax report for all City tax districts and the former redevelopment project areas and present the data to the City and Agency. They would assist the City 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 bond reports. 2 Financial Impacts & Budget Actions The contract to be awarded to HdL Coren and Cone is for an amount not to exceed $228,500 for a five -year term. Funds in the amount of $24,375 are available in the FY 2012 -13 budget in division 01224. The contract will be charged to account 01224.555060. Budget authority for subsequent years will be requested in each budget cycle for Council approval. Future funding is contingent upon Council approval. Prepared by: Elsa Trujillo, Senior Development Analyst Approved: 1 f Gigi Decavalles- Hughes Director of Finance 3 Forwarded to Council: r Rod Gould City Manager Reference Contract No. 9686 (CCS).