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Title:
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Approval of a Professional Services Agreement with Mayer Hoffman McCann P.C. for Transient Occupancy Tax Audit Services.
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City of Culver City, California
Agenda Item Report
Meeting Date: 07/27/09 Item Number: C-4
CITY COUNCIL AGENDA ITEM: Approval of a Professional Services Agreement
with Mayer Hoffman McCann P.C. for Transient Occupancy Tax Audit Services
Contact Person/Dept.: Nagam Rao,
Finance Department
Phone Number: (310) 253-5889
Fiscal Impact: Yes [x] No [] General Fund: Yes [x] No []
Public Hearing: [] Action Item: [] Attachments: []
Commission Action Required: Yes [] No [X] Date: _______________
Public Notification: (E-Mail) Meetings and Agendas - City Council (07/22/09); (USPS)
Jefferson Wells (07/22/09); (USPS) Lance Soll & Lunghard, LLP (07/22/09); (USPS)
Mayer Hoffman McCann P.C. (07/22/09); (USPS) MuniServices, LLC (07/22/09);
(USPS) Sotomayor & Associates, LLP (07/22/09); (USPS) ValuPoint (07/22/09).
Department Approval:
Jeff Muir (07/15/09)
City Attorney Approval:
Carol Schwab (by H. Baker) (07/21/09)
Chief Financial Officer Approval:
Jeff Muir (07/15/09)
City Manager Approval:
Mark Scott (07/22/09)
RECOMMENDATION:
Staff recommends the City Council approve a professional services agreement with
Mayer Hoffman McCann P.C. for Transient Occupancy Tax (TOT) Audit Services.
BACKGROUND:
The last TOT audit was completed in 2006 by the firm Jefferson Wells International.
Their audit included all hotels in Culver City. With the exception of one hotel that
had gone through a recent management change, the previous audit found that most
of the hotels had improved their record keeping procedures and were doing a better
job at substantiating TOT remittances to the City.
When undertaking a TOT audit, the City is legally able to review remittances and
records for the past three years. Since it has been three years since the last audit,
an RFP for TOT audit services was released in the late spring for audit services to
audit fiscal years 2006/07, 2007/08 and 2008/09.
DISCUSSION:
Five known firms that provide these services were contacted, and the RFP was
posted on the California Society of Municipal Finance Officers website. The
following were the responses:
City of Culver City, California
Agenda Item Report
FIRM FEE PROPOSAL
Jefferson Wells $35,000
Lance Soll & Lunghard, LLP $32,400
Mayer Hoffman McCann P.C. $28,800
MuniServices, LLC $28,800
Sotomayor & Associates, LLP $75,000
ValuPoint $39,500
A panel of three staff members from the Finance Department reviewed the written
proposals submitted by each firm separately from the pricing. The proposal of
Mayer Hoffman McCann P.C. was ranked first, slightly ahead of the MuniServices
proposal. Given Mayer Hoffman McCann P.C. was ranked first in the written
proposal and tied for the lowest cost, it is recommended that they be awarded the
contract.
Mayer Hoffman McCann P.C. is a well qualified auditing firm that has performed
many similar TOT audits. They are also the City’s outside audit firm for its financial
statements.
FISCAL ANALYSIS:
These audit services are necessary to ensure that the hotels and motels in Culver
City are properly calculating and remitting TOT. During the past two TOT audits, the
findings and penalties have been in excess of the cost of the audit. However, there
is no guarantee on any particular audit that this will be the case. The cost of this
audit is necessary to ensure compliance and equitable treatment of all TOT
taxpayers.
There are sufficient funds included in the Fiscal Year 2009/10 budget for this
contract.
ATTACHMENTS:
None
MOTION:
That the City Council:
City of Culver City, California
Agenda Item Report
1. Approve a professional services agreement with Mayer Hoffman McCann
P.C. in a not to exceed amount of $28,800; and,
2. Authorize the City Attorney to review/prepare the necessary documents; and,
3. Authorize the City Manager to execute such documents on behalf of the City.