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HomeMy WebLinkAboutMUNICIPAL RESOURCE CONSULTANTSt� cf,;, -_. )11 r AGREEMENT TO PROVIDE REVENUE ENHANCEMENT & INFORMATION SERVICES TO THE CITY OF SANTA ANA by MUNICIPAL RESOURCE CONSULTANTS November 16, 1992 TABLE OF CONTENTS TRANSMITTAL LETTER CONSULTANT SERVICES AGREEMENT EXHIBIT A - CONSULTANT SERVICES 1.0 REVENUE ENHANCEMENT AUDITS................................................................. 4 1.1 Background....................................................................................................... 4 1.2 Objective............................................................................................................ 4 1.3 Scope.................................................................................................................. 4 1.4 Procedures......................................................................................................... 5 1.5 Quarterly Progress Reports............................................................................. 6 2.0 GRIP SERVICE.......................................................................................................... 7 2.1 Terminology...................................................................................................... 7 2.2 Physical Presence, Fiscal Impact & Revenue Productivity ........................... 8 2.3 Objectives........................................................................................................10 2.4 Scope................................................................................................................11 2.5 Procedures.......................................................................................................13 2.6 City Support....................................................................................................16 2.7 Timing, Deliverables & Meetings.................................................................17 2.71 Strategies Worksessions & Other Meetings..............................................17 2.72 GRIP Report.................................................................................................18 2.73 GRIP Query System.....................................................................................19 3.0 SALES TAX INFORMATION & CONSULTING ................................................. 20 3.1 Sales Tax Inquiry System............................................................................... 20 3.2 STARS (Sales Tax Analysis & Reporting System) Reports ......................... 20 3.3 Support Services............................................................................................. 20 3.4 Timing............................................................................................................. 21 4.0 QUALIFICATIONS & STAFFING......................................................................... 22 4.1 MRC Qualifications........................................................................................ 22 4.2 Project Team.................................................................................................... 23 5.0 COMPENSATION.................................................................................................. 29 5.1 Revenue Enhancement Audit Service.......................................................... 29 5.11 Sales/Use Tax.............................................................................................. 29 5.12 Other Revenue Sources............................................................................... 29 5.30 GRIP Service................................................................................................. 30 5.31 Composition.................................................................................................30 5.33 Additional Services and Charges............................................................... 32 6.0 CERTIFICATION OF CONFIDENTIALITY......................................................... 33 CONSULTANT SERVICES AGREEMENT THIS AGREEMENT is made at Santa Ana California, as of 199, by and between the City of Santa Ana, a municipal corporation (hereafter referred to as "City"), and Municipal Resource Consultants (hereafter referred to as "Consultant" or "MRO), who agree as follows: 1. Services. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to City the services described in Exhibit "A". Consultant shall provide said services at the time, place, and in the manner specified in Exhibit "A". Consultant shall not be compensated for services outside the scope of Exhibit "A". 2. Payment. City shall pay Consultant for services rendered pursuant to this Agreement at the times and in the manner set forth in Exhibit "A". The payments specified in Exhibit "A" shall be the only payments to be made to Consultant for services rendered pursuant to this Agreement, unless the City approves additional compensation for additional service. Consultant shall submit all billings for services rendered pursuant to this Agreement to City in the manner specified in Exhibit "A". 3. Facilities and Equipment. Consultant shall, at its sole cost and expense, furnish all facilities and equipment which may be required for furnishing services pursuant to this Agreement. 4. General Provisions. The general provisions set forth in Exhibit "B" are part of this Agreement. In the event of any inconsistency between said general provisions and any other terms or conditions of this Agreement, the other term or condition shall control insofar as it is inconsistent with the general provisions. 5. Exhibits. All Exhibits referred to herein are attached hereto and are by this reference incorporated herein. EXECUTED as of the day and year first above stated. A M i al Corporation By: Title: Daniel 1-1. _Xaunc�,�Ia o Date: MUNICIPAL RESOURCE CONSULTANTS PARTNVER:\IOHN T. AUSTIN, IN a John T. Austin November 16,1992 ATTEST: A,nprovl'Al a CITYCLERK' ATTEST TO FORM: CITY ATTORNEY EXHIBIT A CONSULTANT SERVICES Municipal Resource Consultants (MRC) shall provide revenue enhancement and information services to the City of Santa Ana (City). The objectives, scope, procedures, deliverables, timing, compensation and staffing are set forth as follows: 1.0 REVENUE ENHANCEMENT AUDITS 1.1 BACKGROUND Many California cities are not realizing all of the revenue to which they are entitled due to administrative errors and omissions by revenue -generating businesses and third party intermediaries (such as the State, counties and utility companies) who are responsible for collecting the tax revenue and remitting it to the cities. Because there are time limitations on the City's ability to recover revenue it has been deprived of, it behooves Santa Ana to have revenue enhancement audits conducted as thoroughly and rapidly as possible. 1.2 OBJECTIVE The objective of MRC's revenue enhancement audits is to assist the City in recovering all of the revenue to which it is entitled from the City's major sources of general fund revenue (see Scope below). MRC's revenue enhancement audits result in the detection, documentation and correction of errors and omissions causing deficiencies and thereby produce new revenue that would not otherwise have been realized by the City. 1.3 SCOPE MRC's revenue enhancement audit service includes the following tax revenue sources: N Business License Tax ■ Documentary Transfer Tax ■ Franchise Fees X Property Tax (including RDA Tax Increment) ■ Sales/Use Tax 0 Transient Occupancy Taxl ■ Utility Users Tax x MRC will not proceed with the auditing of Transient Occupancy Tax until specifically directed to do so by the City 4 1.4 PROCEDURES MRC's revenue enhancement audit procedures are summarized as follows: ■ Meet with City's designated staff to review service objectives and scope, MRC workplan schedule, public relations and logistical matters; MRC will also establish an appropriate liaison with the City's coordinator and define logical checkpoints for reviewing progress ■ Review applicable provisions of the City's municipal code and ordinances adopted by the City ■ Physically canvass and evaluate the revenue generating elements of the City's economic base, such as the land parcels, major buildings, commercial, industrial, institutional and governmental users ■ Represent the City for the purpose of examining records pertaining to business license tax, documentary transfer tax, franchise fees, property tax (to include tax increment for the RDA) sales/use tax, transient occupancy tax and utility users tax in order to identify and confirm errors/omissions that are resulting in deficient payment to the City ■ For each error/omission identified and confirmed, prepare documentation to substantiate and facilitate recovery of revenue due from prior periods (plus applicable interest and penalties) and prevent recurring deficiencies in current and future years ■ Prepare and forward to the appropriate parties "date of knowledge" requests for corrective action and revenue recovery ■ Meet with designated City official(s) as necessary to review and discuss our findings and recommendations ■ Provide additional assistance as necessary to support the City in recovering and preventing tax deficiencies 5 1.5 QUARTERLY PROGRESS REPORTS On a quarterly basis, MRC shall provide the City with audit progress reports to include, but not be limited to, the following: ■ Status of audit work in progress, including copies of reports provided to taxpayers/intermediaries addressing each reporting error/omission individually, including where applicable the business name, address, telephone number, account identification number, individuals contacted, date(s) of contact, nature of business, reason for error,/omission and recommended corrective procedure ■ Actual revenue produced for the City by MRC's audit service on a quarterly and cumulative basis ■ Projected revenue forthcoming to the City as a result of MRC's audit service, delineated according to source, timing and one-time versus ongoing ■ Alphabetical listing of all errors/omissions detected for the City by MRC including, for each, the account number, correction status, payment amount received by the City, period to which payment is related and payment type (e.g., reallocation, deficiency assessment, etc.) 6 2.0 GRIP SERVICE 2.1 TERMINOLOGY GRIP is a leading edge analytical and management tool. Accordingly, MRC defines and uses concepts and terminology that may be unfamiliar or used somewhat unconventionally. A partial glossary is provided below. ■ CORE REVENUE GENERATORS City's most significant entities in terms of actual or potential revenue generation ■ DISCRETIONARY TAX REVENUE SOURCES Revenue sources which the City has the discretionary authority to directly control (such as business license tax, transient occupancy tax and utility users tax) ■ ECONOMIC BASE Land, buildings and users thereof located in the City ■ FISCALLY SELF-RELIANT CITY City which relies on the revenue generated from its own economic base to fund the municipal services it provides ■ GRIP Acronym for MRC's Geobased Revenue Information Program ■ NON-RESIDENTIAL REVENUE GENERATOR Revenue Generators other than single family residential (such as condominiums and homes); includes all commercial, industrial, institutional, and governmental entities ■ REVENUE GENERATOR Any entity that has a physical presence within the City; a single Revenue Generator may do business under several different legal names and/or addresses ■ SWOTs Acronym for Strengths, Weaknesses, Opportunities and Threats, in terms of revenue generation o TAX STRUCTURE City's discretionary and non -discretionary tax revenue sources 7 2.2 PHYSICAL PRESENCE, FISCAL IMPACT & REVENUE PRODUCTIVITY The typical business community expects the city in which it is located to provide public safety, infrastructure and other vital services to support and protect their business operations, customers, suppliers and employees. In return, the city can expect its business community to fund the services provided. When a business* located in a self-reliant city generates insufficient revenue to fund its relative share of these services - due to non-compliance, an inequitable ordinance, State preemption, or some other reason - either the city's residents or other businesses must fund the difference. Inequitable and unfair sharing of the local tax burden becomes less tolerable and more apparent as each city becomes increasingly dependent on its own economic base to meet its service funding needs. In pursuing fiscal self-reliance strategies that provide for fairness and equity, it is important to ascertain "Who benefits from the City's services?", "Who generates revenue to the City?" and "How much?" To determine for each business in a city whether the revenue it generates is sufficient to cover its proportionate share of municipal services, an ideal fiscal impact analysis would: ■ Include all factors that have significant cost or revenue consequences for the city IN Be more comprehensive than the projected infrastructure or capital improvement costs precipitated by a development to finance or recover those costs by charging development impact fees ■ Be more comprehensive than a user service analysis that seeks to recover the allocated costs for city services from the actual users of those services ■ Encompass social, legal, environmental, ecological, opportunity, and other costs as well as the above -mentioned capital improvement and service costs ■ Be comparable for different types and sizes of land uses, developments and defined geographic areas ■ Be reliably measurable * Commercial, industrial, residential, institutional, governmental 3 Any analysis that attempts to directly measure social, legal environmental, ecological, opportunity and other costs would be highly subjective instead of reliably measurable. It would not be capable of being used to make meaningful comparisons or to being applied in an equitable manner. What is needed is a meaningful fiscal impact analysis tool that is measurable. MRC defines "fiscal impact' as the financial and/or economic consequences to the city that result from an entity's physical presence within the city. Physical presence may take the form of a land use, development, or user (commercial, industrial, residential, institutional, governmental). MRC's definition is based on the premise that there is a strong correlation between physical presence and fiscal impact. If there is no physical presence, there is no fiscal impact. A meaningful measure of fiscal impact is one that relates physical presence to revenue generation. It is obtained by dividing an entity's total revenue contribution to the city by the same entity's measurable manifestations of physical presence within the city. This provides a valid, size -adjusted equivalent unit of measurement for analyzing relative fiscal impact and revenue productivity based on physical presence. In other words, the cost of police, fire and other city services - plus the social, legal, environmental, ecological opportunity, and other costs imposed upon a community by a commercial, industrial, institutional or government entity - are directly related to the physical presence that can be measured in terms of land area/building space occupied, number of employees, etc. or a composite factor. To evaluate a city's tax structure and economic base - in terms of fairness, equity and fiscal self-reliance - it is necessary to make comparisons without distortions caused by the different sizes of different entities. Also, different business classifications attract different numbers of customers and suppliers per square foot of space occupied and persons employed. The City's cost of providing public safety and infrastructure therefore differs by the type of business. By capturing and relating elements of physical presence to revenue contribution, in size -adjusted equivalent units of measurement, GRIP enables MRC to analyze a city's tax structure and economic base in terms of relative fiscal impact and revenue productivity. Tice need for this information becomes increasingly critical as each city moves towards fiscal self-reliance and dependence on its own tax structure and economic base to fund the city's service costs. 9 2.3 OBJECTIVES MRC's GRIP service will enable the City to actively improve fairness, equity and fiscal self-reliance by developing and implementing revenue enhancement strategies that capitalize on strengths and opportunities and minimize or eliminate weaknesses and threats through applications such as: ■ Economic Development o Business Retention o Business Expansion o Business Cooperation o Business Attraction ■ Land Use Planning ■ Tax Structuring By relating Santa Ana's economic base to its tax sources, in terms of revenue generation, GRIP provides the City with an informed basis for strategic decision -making based on: ■ Economic Base Analysis ■ Fiscal Impact Analysis ■ SWOT* Analysis ■ Tax Code Effectiveness Analysis Through Revenue Strategies Worksessions, MRC's GRIP service facilitates: ■ City Goal Setting ■ Understanding Interrelatedness of Taxes & Economic Base ■ Identification & Analyses of City's SWOTs* ■ Exploration, Development and Prioritization of Strategies ■ Consensus Building ■ Action Plan Implementation Consistent with the objectives listed above, MRC's GRIP service will be particularly valuable in assisting the City with its planned bond issuance and development/implementation of a strategic plan for economic development. * Strengths, Weaknesses, Opportunities, Threats 10 2.4 SCOPE The GRIP database shall encompass: r The land parcels, major buildings, and users (commercial, industrial, institutional, governmental, residential) located within City of Santa Ana's borders; and. ■ The City's major sources of general fund revenue including, but not limited to, the following: Business License Tax - Franchise Fees - Property Tax (to include secured real and personal property plus unsecured personal property) - Sales/Use Tax - Transient Occupancy Tax - Utility Users Tax The GRIP database has at least one record for each actual/potential revenue generator. MRC defines a revenue generator as any entity that has a physical presence within the City. Such an entity may either partially or completely occupy or own a parcel within the City, or be conducting some business that generates revenue to the City. On average, California cities experience changes in their business mix at the rate of 20% per year due to business openings, closings, expansions, consolidations, relocations, mergers, acquisitions, and other events. For this reason, MRCS analysis includes a current, comprehensive, and valid inventory of all the City's businesses, including address, parcel number(s) and type of business activity. By computerizing this data, MRC creates a cross-indexed, address -based and parcel -based geographic database for all the businesses located in the City. The GRIP database is relational, so it will be able to extract any type of desired input data by merely structuring queries. Because the GRIP database is geo-coded, it is possible to extract information by specifying either address ranges or the map coordinates of any encircling polygon as defined by the City's GIS (Geographic Information System). MRC can link to the City's GIS system through parcel numbers. If this is not possible, MRC can digitize the City's parcels and include the geo-data in our proposed GRIP database for an additional fee. Table 2-1 below shows the data elements to be collected and accessible to those personnel authorized by the City TABLE 2-1 UwQj - .. p, by -,-1 06 Database Elements pq P4 a �Z p4 pt Owner Name & Address X X Business Name and Address X Revenue Conh tctions by Source Business License Tax X X Franchise Fees X Property Taxes (Secured, Unsecured, & Personal) X X X Sales/Use Tax X Transient Occupancy Tax X Utility Users' Tax X X X State Subventions X X Other Individually -Assignable Taxes Paid X X X Manifestations of PhyskW Presence (For Core Revenue Generators) Number of Employees ( Full & Part Time) X X Square Feet of Building Occupied X X X Acres of Land Owned & Used, if any X X X Number of Rental Units X X Business Activity Data (For Core Revenue Generators) Gross Revenues (if available) X X SIC Code (Standard Industrial Classification) X X Yellow Pages Listing Group X X Tax Rate Area Location & Rates X X X i t invited Expense Allocation Fields X X X 12 2.5 PROCEDURES MRC's GRIP service process is illustrated below in Figure 2-2. The procedures are summarized as follows: ■ Meet with City's designated staff to review service objectives and scope, MRC workplan schedule, public relations and logistical matters; MRC will also establish an appropriate liaison with the City's coordinator and define logical checkpoints for reviewing progress ■ Study City -provided data such as current year's budget, financial statements, general plan, maps, special reports and studies (economic, market, feasibility, etc.) that provide relevant background or insight ■ Evaluate regulatory provisions for each of the City's discretionary tax revenue sources based on criteria and considerations such as enforceability, coverage, fairness, equity, competitiveness and motivation ■ Develop an inventory of the land parcels, major buildings, commercial, industrial, institutional, governmental and residential (other than single family) revenue generators located within the City's borders ■ Aggregate and snatch revenue payments from each of the City's Core Revenue Generators to determine the total contribution from each ■ Capture available. elements of physical presence for each of the City's Core Revenue Generators (e.g. land, buildings, employees) ■ Convert all data into a common electronic medium ■ For each Non -Residential Core Revenue Generator, ascertain name, address, primary activity, assessor parcel number, parcel size, land use (building space occupied and number of employees to be included where available), revenue source and City's portion of revenue generated 13 ■ Determine and compare the size -adjusted contribution of revenue from each Core Revenue Generator on both an individual and aggregate basis according to revenue source and primary activity ■ Analyze the City's SWOTS` in terms of revenue generation ■ Prepare GRIP management report, comprehensive data listing, and declassified summary ■ Prepare and install GRIP Query System for on -site access by City ■ Meet with designated City official(s) to present and discuss report findings, principally focusing on the SWOT analysis ■ Participate in revenue strategies worksessions to facilitate: o City goal setting o Understanding interrelatedness of taxes & economic base o Identification & analysis of City's SWOTS* o Exploration, development & prioritization of strategies o Consensus building o Action plan implementation * Strengths, Weaknesses, Opportunities, Threats 14 0 CL H A C,) cc c m 06 ■ CE oZS ,D E (n N z US O aI °d N q� .(b Z z U 4 w JL �g�o J 2.6 CITY SUPPORT The City agrees to support MRC by providing the following: ■ Letters of Introduction (as required) ■ Codes/ordinances covering each tax imposed by City ■ Engineering and zoning maps of City (100' or 200' per inch scale) ■ Current year's budget and revenue history since 1978-79, preferably in current year's budget format ■ Special reports and studies such as general plan (and proposed amendments), economic, market, feasibility, etc. that would provide additional background or insight ■ List of agencies - including address, telephone and contact name - with actual/potential impact on City (Caltrans, Transit District, AQMD, LAFCO, etc.) ■ Background on relevant factors the City is aware of that should be addressed in the study ■ Cooperation in MRC's verification/collection of physical presence data by mailing applicable forms on City Lettterhead (at the City's request, MRC will assume responsibility for such mailings and only charge for actual out-of-pocket reimbursement) ■ Staff reports and submittal documentation for significant developments that have been proposed, approved, under construction or completed within the last two years 16 2.7 TIMING, DELIVERABLES & MEETINGS MRC is prepared to commence the GRIP service within 10 days following authorization with the objective of completing it within 180 working days thereafter. The preliminary workplan schedule at the back of this Section presents MRC's time frames for accomplishment of the prescribed tasks. Meetings and deliverables are further described as follows: 2.71 STRATEGIES WORKSESSIONS & OTHER MEETINGS Upon commencement of the service, MRC shall facilitate a city goal -setting worksession to review and discuss the revenue enhancement audit and GRIP service objectives, scope, procedures and delivery schedule. Within 60 working days following the city goal -setting worksession, MRC will facilitate the first of five planned monthly revenue strategies worksessions custom-tailored to address Santa Ana's unique circumstances, needs and requirements. In addition to presenting and discussing interim GRIP report findings, the revenue strategies worksessions are designed to facilitate: ■ Exploration, development, and prioritization of strategies that capitalize on strengths and opportunities and minimize or eliminate weaknesses and threats (in terms of revenue generation) ■ Consensus building for a strategic action plan ■ Implementation of adopted strategies to proactively enhance, maintain and manage the City's revenues Two or more MRC consultants participate in each worksession. Additional revenue strategies worksession will be provided should the City so desire. In addition to facilitating revenue strategy worksessions, MRC is available to assist the City on an as -needed basis to participate in presentations, public hearings or other types of meetings with members of City staff or Council, the Chamber of Commerce, media, citizen advisory groups, committees, etc. 17 2.72 GRIP REPORT Within 150 to 180 working days following authorization, MRC shall provide the City with three complete copies of the initial GRIP Report, to include: ■ Management Report o Assessment of City's revenue picture (past, present, future) o Identification of City's fiscal objectives o Description of service scope and procedures employed in preparing the GRIP Report o Nature and profile of City in general terms of land use and economic base o Evaluation of City's tax structure and economic base o Assessment of City's SWOTS, in terms of revenue generation ■ Comprehensive Data Listing Comprehensive listings and presentation (in graphs, charts and tables) of data that capture and relate available elements of physical presence to revenue contributions for the Core Revenue Generators; Core Revenue Generators ranked according to aggregate and size - adjusted revenue contributions. ■ Declassified Summary A summary of report's key findings, excluding confidential information ■ Interim Reports Development of the GRIP Report is accomplished through an iterative process of data collection, analysis, presentation and discussion. At each of the Revenue Strategies Worksessions, the City will receive an interim report that presents the most recent information, its meaning, implications and significance to the City. The fifth works ession will include a review of all previous worksessions as well as the presentation and discussion of the GRIP Report. 18 2.73 GRIP QUERY SYSTEM The GRIP database will be installed at the City on an MRC-provided workstation to allow on -site, password -protected access by designated City staff. The GRIP Query System includes data for each of the City's major sources of general fund revenue. All revenue information is integrated according to revenue generator name and geographic location. Revenue contributions for individual and aggregate sources of revenue are displayed for each revenue generator. The system also presents combined revenue information for multiple revenue generators in a user -defined geographic area. Depending on availability of existing records, relevant data elements for the Core Revenue Generators include land and building square footage, number of employees, business classifications, owner names, start dates, close dates, occupancy factors, business activity, etc. The information on locations and specific occupants of those locations can also be further aggregated into other geo-areas such as redevelopment project areas, downtown, business districts, etc. 19 Rm 0 0 0 L 0 tO 0 s c � .a L a L +.r 0 w.. c H 0 L 0 0 - o co o m U C o v a? U CD 2 > a) c w p N p as cc: � m c Z3 U] L j cz 'o U .05 cz x FT as o o c m co ctt c c �_ u! > � iL ca 0 a) CD C a) C 0 L a) > N O O v era i A7 CL o >, U m LU m L p CLL o can CL 'C w p o` c� c' F o m m v ~ F o a: a CNt as L U -� o -c Ua) ] ~ ❑ L o CL a U co en C t N o w O } m o y ca 5 c o cz -� as d _ °� U m c '� o o CD CD a) ca U w a) .0 C C CIS U C) m cc C M as CD? C ccL v .__I cl) co � c�u i ai L o c (cc a) .� CD cz CD CL o G O m m m c "�' c a`s m w f 1 r t f 1 ama t'1•• r� r aa)i .�i rrt r� P-% m Im m `n .L — — � 3.0 SALES TAX INFORMATION & CONSULTING MRC shall continue providing to the City a Sales Tax Inquiry System, STARS reports and support services, further described as follows: 3.1 SALES TAX INQUIRY SYSTEM MRC shall continue to install and update quarterly the City's sales tax registration and allocation data and train as necessary authorized City staff in the use of the Inquiry System and an easy -to -follow user manual, also furnished by MRC. Because the Sales Tax Inquiry System contains confidential information, access is limited to authorized personnel by making the System password - protected. 3.2 STARS (SALES TAX ANALYSIS & REPORTING SYSTEM) REPORTS MRC shall continue providing the City with a quarterly updated set of bound STARS reports. 3.3 SUPPORT SERVICES In conjunction with the Sales Tax Inquiry System and STARS reports described above, MRC shall provide support services to include: ■ Providing City staff with sales tax orientation: o Conducting technical seminar on California's local sales tax distribution process; and o Training staff in the fundamentals of sales/use tax allocation auditing should the City desire to assume responsibility for future maintenance of retail accounts internally. ■ Preparing and analyzing a list of the City's major sales/use tax generators to assist the City in developing a public relations program to prevent the loss of these important businesses. ■ Profiling for Economic Development/Community Redevelopment personnel the most economically desirable/undesirable types of developments/business uses and the reasons why. ■ Assisting in defining specific geographic areas for which the City would have an interest in knowing the sales/use tax produced (e.g., within Redevelopment Agency project areas). 20 ■ Serving as a resource to assist the City on an "as -needed" basis by providing legal and technical support on sales/use tax issues and questions regarding proposed legislation, estimated revenue on proposed projects, revenue -sharing negotiations, retail sales leakage, budget projections, etc. 3.4 TIMING MRC shall continue delivering the quarterly updated Sales Tax Inquiry System and STARS reports to the City within 30 working days following receipt of the Quarterly Distribution Reports from the SBE. MRC shall continue providing support services to the City on an as -needed basis at times to be mutually agreed upon between City and MRC. 21 4.0 QUALIFICATIONS & STAFFING 4.1 MRC QUALIFICATIONS Based on a unique blend of multi -discipline expertise from the fields of State & Local Tax, Geographic Information Systems and Economic Development, Municipal Resource Consultants (MRC) specializes in providing innovative revenue enhancement services to California municipalities, principally in the areas of business license tax, documentary transfer tax, property tax, sales tax, use tax, transient occupancy tax, utility users tax and franchise fees. MRC's multi -revenue enhancement services are complemented by geobased management information programs and consulting in areas such as revenue structuring, strategic planning, economic development and redevelopment. MRC pioneered the concept of revenue enhancement consulting with sales tax services for California cities in 1978. Since then, MRC has established a track record of consistently impressive results by providing ongoing revenue enhancement, information and consulting services to more than 120 California cities. MRC has a staff of 55 consultants serving California cities from five in -state locations. MRC's quarterly -updated database contains geobased revenue information on more than 65 % of the businesses in California. On behalf of the cities served, MRC's findings and recommendations have been validated and accepted by third party intermediaries (including the State Board. of Equalization, county assessors and major utility companies) throughout California, in addition to thousands of corporate tax departments throughout the United States. 22 4.2 PROJECT TEAM MRC's project team for the revenue enhancement audits, GRIP service and sales tax information services consists of 28 personnel listed in the organizational chart Figure 4-1 on the following page. Biographical profiles for the project team leaders are listed below according to their specialized areas of responsibility. JOHN AUSTIN & ALLEN CHARKOW - PROJECT CO -DIRECTORS As project co -directors, John and Allen are responsible for the overall quality control and timeliness of the project. They are also responsible for making MRC's resources available to the project and assisting in the technical direction, management and liaison activities. Both will be personally involved with the audits and economic development strategy services. John is responsible for the overall design and provision of MRC's business license services, GRIP service, revenue enhancement audits, contract negotiations and client relations. Allen has overall responsibility for the development and implementation of MRC's data processing and geographic information systems for auditing, monitoring and analyzing tax revenue sources. DOUG KITCHEN - TECHNICAL COORDINATOR As technical coordinator, Doug is responsible for the overall technical direction and coordination of the project, including the methodology and procedures utilized and development of the logic and rationale to support MRC's analyses and recommendations. In this capacity, his duties include coordinating, monitoring and supporting the activities of other project team members. Doug developed much of the GRIP theory and analytical model and is actively involved in the design and provision of MRC's revenue enhancement audits in the areas of business license tax, documentary transfer tax, transient occupancy tax, utility users tax and franchise fees. Prior to joining MRC, Doug was Chief Operating Officer and general contractor with a NYSE listed developer -builder. Doug completed his undergraduate work at California Luthern University where he majored in Math and physics. 23 cz Ia- ° z � S:4 O m LLLO a U W ~` 'w V J z H H+ =� � � v U x y �n C13 o a N Q � °' H H JOHN O'SULLIVAN - LIAISON & STRATEGIES FACILITATION As administrative liaison, John has primary responsibility for interfacing between the City and MRC project team personnel, public relations, logistical matters, coordinating and participating in meetings, and keeping the City apprised of MRCs progress through written and oral communications. He is also responsible for MRC's Strategic Planning Practice in Southern California. In this capacity, he assists cities restructure their existing resources and implement change through economic and organizational development. John has extensive experience and expertise in facilitating interactive worksessions focused on the development and implementation of fiscal strategies. He has over 20 years' experience in California city and county government as a city manager, finance director and community development manager. John has a BA Degree from California State University Long Beach and has served on numerous committees for the League of California Cities and national organizations for Municipal Finance Officers and the International City Managers Association. TED GAEBLER - STRATEGIES FACILITATION Ted is Managing Director of MRC's Strategic Planning Group which specializes in assisting state and local government agencies restructure existing resources and implement change through economic and organizational development. Ted has extensive experience and expertise in facilitating worksessions focused on the development of practical strategies for cities' fiscal needs. He is a nationally recognized authority in the field of public entrepreneurial management. Ted received a BA Degree in Public Administration from Miami University and Master of Governmental Administration from Wharton Graduate School of Business Administration, University of Pennsylvania. Ted's public service includes 10 years as a City Manager and 10 years as an Assistant City Manager. He is a member of the International City Management Association, American Society of Public Administration and Western Governmental Research Association. Ted is a co-author of the best selling book Reinventing Government. He is also a frequent speaker to state and local government groups nationwide. 24 JACK TOMASIK - STRATEGIES FACILITATION Jack is the founder of Economics Strategies Group (ESG). ESG provides specialized services to state and local governments in the following six areas: ■ Economic & Community Development Strategies ■ Economic Development Implementation ■ Growth Management & Financial Strategies ■ Economic & Fiscal Impact Assessment ■ Market Studies, Economic Research & Modeling ■ Public Sector Asset Management Jack will assist in strategic planning and building consensus through stakeholder facilitation. Jack is an economist with fifteen years' experience in state and local government problem -solving. His specialty is regional/urban economics and strategic planning. An experienced economic planner, he has developed more than 20 economic development strategies for areas in the West, including 15 California communities. Jack has a Master's in City and Regional Planning from Ohio State University and, since 1979, has been a consulting economist in the West with Mountain West Research and Coopers & Lybrand. FERRY SHARP - GRIP SERVICE Jerry is responsible for creation and implementation of the detailed workplan for the GRIP service, including the scheduling, coordinating and monitoring of the other analysts' activities. Prior to joining MRC, he had 10 years' experience with a Fortune 200 company where he was responsible for the design and integration of multi-user computer systems for GIS applications. Jerry received his BS Degree from Athens College, Alabama. 25 JOHN TENFELDER - GRIP SERVICE John is responsible for development of the economic, tax and financial analyses for MRC's business license and GRIP Services. Prior to joining MRC, John was a Senior Consultant and Vice President with an international consulting firm where he specialized in economic, tax and financial issues in connection with corporate mergers and acquisitions. John has served as an expert witness in major tax cases, is a registered professional engineer, and Chartered Financial Analyst. He received two engineering degrees from the University of Missouri and an MBA from UCLA. HUNTER AUSTIN - SALESIUSE TAX Hunter manages MRC's operations for the ongoing detection, documentation and correction of sales/use tax misallocations for 120 California cities. Hunter has a working knowledge of sales/use tax law, State Board of Equalization administrative procedures and taxpreparer reporting procedures. Prior to joining MRC, Hunter had 13 years' experience as a commercial -industrial leasing broker and public relations agent. GARY JONES - PROPERTY TAX Gary has overall responsibility for MRC's property tax consulting practice. Gary has been analyzing property tax assessments and tax allocations for public agencies throughout California for more than 20 years. Prior to his association with MRC, he was a Principal with the firm of Katz Hollis, in charge of fiscal and administrative management consulting services to redevelopment and other public agencies throughout California and other western states. Gary received his BA Degree from California State University Fresno and completed graduate courses at University of California Los Angeles. C PARTHO MANDAL - PROPERTY TAX Partho is a Senior Consultant in MRC's property tax consulting practice. In this capacity, Partho analyzed property tax assessments and tax allocations for public agencies throughout California. Prior to his association with MRC, Partho was a Senior Analyst and Associate with the firm of Katz Hollis for four years. Before joining Katz Hollis, Partho was an Associate with Gunn Russell Copenhaver & Co., where he provided advisory services to resolve financial requirements of redevelopment agencies. He received his BA Degree with Honors from the University of Delhi, India where he majored in Economics. He also earned an MBA in Economics from the Delhi School of Economics, New Delhi, India and an MBA in Finance from State University of New York, Albany. NICK OWARE - BUSINESS LICENSE TAX Nick has overall responsibility for MRC's business license tax compliance practice. Prior to joining MRC, Nick had eight years' experience in business development and public relations with a major financial institution and four years' experience as a commercial real estate broker. Nick received his BA Degree from the University of Colorado where he majored in Business Administration. JIM THOMPSON - FRANCHISE FEES, UUT & TOT Jim is responsible for MRC's franchise fees/utility users tax and transient occupancy tax compliance practices. Since joining MRC, Jim has personally overseen and participated in compliance auditis of 300+ businesses for utility users' tax and 160+ hotels for transient occupancy tax. Prior to joining MRC, Jim had 30 years' experience in the telecommunications industry, including 10 years as a primary expert witness for GTE in providing testimony before the California Public Utilities Commission and the California Legislature that led to his being a guest speaker at many seminars including the League of Cities annual meetings. He is a graduate of California State University Northridge. 27 DON MAYNOR & JOE VINATIERI - LEGAL ANALYSIS Don Maynor provides his specialized legal expertise to assist MRC in evaluating franchise fee agreements and utility users tax ordinances and gaining access to necessary information (which the utility companies resist providing) as well as the discovery and recovery of payment deficiencies. Don is a recognized authority in the franchise fee and utility users tax field, representing cities in numerous legal areas. He is frequently called upon to testify as an expert witness before the California Public Utility Commission regarding utility issues and other related matters. He received a B.A. from the University of Arizona and a law degree from Case Western Reserve University School of Law. Don is a member of the California Bar Association. Joe Vinatieri is a partner in the Whittier law firm of Bewley, Lassleben & Miller where he specializes in matters of California state and local taxation. Joe provides legal counsel to MRC and MRC's clients when questions or issues arise related to sales/use and property tax law. He is former deputy to Honorable Ernest J. Dronenburg, Jr., member of the California State Board of Equalization, where Joe was responsible for preparation of franchise/income tax, property tax and sales and use tax cases to be heard by Judge Dronenburg, He was also responsible for legislative, administrative and political liaisons. Joe received his BA degree, cum laude, from Westminster College and his JD degree from the University of San Diego. He is Chairman of the State and Local Subcommittee of the Tax Section of the Los Angeles County Bar Association and a member of the Tax Section of the California State Bar. He is also a member of the Institute of Property Tax for which he has spoken nationally. 28 5.0 COMPENSATION 5.1 REVENUE ENHANCEMENT AUDIT SERVICE 5.11 SALES/USE TAX MRC's compensation for continuing to conduct the sales/use tax enhancement audits is 20% of the new sales/use tax revenue realized by the City as a result of MRC detecting, documenting and correcting the related point -of -sale/ use distribution error. Said 20 % applies to each correction for fund transfers (i.e., retroactive adjustments for eligible amounts improperly distributed in prior quarters) and the first four consecutive reporting quarters following completion of the audit by MRC and confirmation of corrections by the State Board of Equalization. Sales/use tax audit invoices are submitted quarterly after the City has received the revenue from the correction and quarterly distribution report verifying it. Each invoice is to include the business name, permit number, local allocation amount received by the City and amount due MRC. Invoices are due and payable upon receipt. 5.12 OTHER REVENUE SOURCES MRC's compensation for conducting enhancement audits for revenue sources other than sales/use tax (business license tax, documentary transfer tax, franchise fees, property tax - including RDA tax increment - transient occupancy tax, utility users tax, etc.) shall be entirely predicated and contingent upon the results achieved. Under this arrangement, the City/Redevelopment Agency (Agency) agree(s) to pay MRC an amount equal to 25% of the deficiency recoveries from eligible prior periods (plus associated charges for penalties and interest). When MRC's audits result in the detection and correction of errors/omissions that the City/Agency and MRC mutually agree will produce ongoing (rather than one-time) benefits to the City/Agency, MRC's compensation shall be 25% of the incremental revenue realized by the City/Agency during the first 12 consecutive quarters following correction. Under this arrangement, the City/Agency agrees to: ■ Invoice the responsible party for tax deficiencies (plus associated charges for penalties and interest) identified and confirmed by MRC within 30 days following receipt of MRC's report; and ■ Notify MRC within 10 days following receipt by the City/Agency of payments resulting from MRC's audit service. Upon being notified of receipt of payment(s), MRC will then invoice the City/Agency. Earned compensation is due and payable upon receipt of invoices. 29 5.20 SALES TAX INFORMATION SERVICES MRC shall continue providing the Sales Tax Inquiry System and STARS reports for $3,000 per quarter. 5.30 GRIP SERVICE 5.31 COMPOSITION MRC's compensation for providing the GRIP Service is $240,000, which includes the following. GRIP Database Development: Capturing and relating elements of physical presence to revenue contribution and providing Query System modules for on -site access by City $130,000 GRIP Report: Preparing management report, including SWOT analysis, comprehensive data listing, declassified summary and Interim GRIP reports 301000 Revenue Strategies Worksessions: Two or more MRC consultants preparing for, participating in, and following up on meetings with City to facilitate City goal -setting worksession and five revenue strategies worksessions to: • Explore, develop, and prioritize strategies that capitalize on strengths and opportunities and minimize or eliminate weaknesses and threats • Build consensus for a strategic action plan +► Implement adopted strategies to proactively enhance, maintain and manage the City's revenues 30,000 Expenses: Includes expenses such as computer processing, clerical, communications (e.g. telephone, mail, express, etc.), _ photocopying, overhead, and out -of -pockets for travel (airfare, auto, meals, lodging, etc.), data lists, consumable supplies and research materials such as maps, directories, etc. 50,000 Total: $ 240,000 30 5.32 SELF -FUNDING PROVISIONS MRC's compensation for providing the GRIP Service is $240,000 payable in accordance with the schedule presented below only if the City/Agency has received sufficient funds from the City's/Agency's share of new revenue produced from MRC's enhancement audits for sales tax and/or other revenue services. Stated another way, payment is deferred until there is adequate audit revenue to cover it. Audit revenue to be included in the self -funding computation must be received by the City/Agency after the date this expanded service is authorized. Based on MRC's enhancement of Santa Ana's revenue, as set forth above, MRC's compensation for providing the GRIP Service is payable as follows: Five monthly progress payments of 10% ($24,000) each; $24,000 to commence 60 working days after MRC's facilitation X 5 of the initial City goal -setting worksession $120,000 Remaining balance due thirty (30) days after delivery of complete GRIP Report and GRIP Query System 1201000 Total: 240 000 The following computation illustrates a hypothetical self -funding example: New revenue produced for City/Agency from MRC's sales tax enhancement audit service $400,000 Less MRC compensation for sales tax enhancement audit service @ 20% 80 000 $320,000 New revenue produced for City/Agency from MRC's audit service for revenue sources other than sales/use tax $300,000 Less MRC compensation for enhancement audit service for revenue sources other than sales/use tax @25% (75,000) 225,000 City's/Agency's share of new revenue: $545,000 Less compensation for GRIP Service (240,000) Net new revenue to City/Agency after compensating MRC for enhancement audit service and GRIP Service 05 000 Should MRC's audit service fail to generate sufficient new tax revenue for the City to cover the above GRIP Service charge, then MRC shall defer the shortfall amount. 31 5.33 ADDITIONAL SERVICES AND CHARGES As indicated, MRC's compensation for the GRIP service includes one City goal -setting worksession, and five revenue strategies worksessions. If the City desires additional meetings, telephone conferences, or assistance in developing and implementing strategies, these will be billed at the prevailing rate per consultant, plus reimbursement for expenses. Similarly, if the City requires additional copies of the entire report or any section thereof, MRC shall invoice the City for reproduction charges at the rate of ten cents per page. Should the City decide to have MRC assume responsibility for the verification/collection of physical presence data by preparing and mailing survey questionnaires on City letterhead, and inputting the response data on magnetic media, MRC will only charge the City for actual out-of-pocket expense reimbursement. The data elements required for the GRIP service are typically provided in a computer accessible format. Should we encounter a situation where this is not the case and the City decides to have MRC assume responsibility for conversion of data into a computer accessible format, MRC will only charge the City for actual out-of-pocket expense reimbursement. In the event the City requires these or other additional services that require an additional charge, MRC shall provide the City with a not -to -exceed budget figure in advance. 32 6.0 CERTIFICATION OF CONFIDENTIALITY The Sales Tax Inquiry System, STARS reports, GRIP report and GRIP Query System all contain information that is deemed confidential by taxpayers and regulatory agencies. Accordingly, access is limited to authorized City personnel and MRC as the City's authorized representative. MRC hereby certifies that the confidential information gathered to prepare the Sales Tax Information, STARS reports, GRIP report and GRIP Query System shall only be used by MRC for those purposes authorized by the City of Santa Ana. Section 7056 of the State of California Revenue and Taxation Code specifically limits the disclosure of confidential taxpayer information contained in the records of the State Board of Equalization. This section specifies the conditions under which a City may authorize persons other than City officers and employees to examine State Sales and Use Tax records. ■ MRC is authorized by this Agreement to examine sales and use tax records of the State Board of Equalization provided to City pursuant to contract under the Bradley -Burns Uniform Sales and Use Tax Law. ■ MRC is required to disclose information contained in, or derived from, those sales and use tax records only to an officer or employee of the City who is authorized by resolution to examine the information. ■ MRC is prohibited from performing consulting services for a retailer during the term of this Agreement. ■ MRC is prohibited from retaining the information contained in, or derived from, those sales and use tax records, after this Agreement has expired. Information obtained by examination of State Board of Equalization records shall be used only for purposes related to collection of local sales and use tax or for other governmental functions of the City as set forth by resolution adopted pursuant to Section 7056(b) of the Revenue and Taxation Code. MRC hereby certifies that any and all information utilized in the conduct of work performed is to be utilized only for those purposes authorized by the City and by the Bradley -Burns Uniform Local Sales and Use Tax Law. 33 EXHIBIT B GENERAL PROVISIONS 1. Independent Contractor. At all times during the term of this Contract, Municipal Resource Consultants (Consultant) shall be an Independent Contractor and shall not be an employee of the City of Santa Ana (City). City shall have the right to control Consultant only insofar as the results of Consultant's services rendered pursuant to this Agreement; however, City shall not have the right to control the means by which Consultant accomplishes services rendered pursuant to this Agreement. 2. Liabili . City shall not be called upon to assume any liability for direct payment of any salaries, wages, or other compensation to any Consultant personnel or subcontractor performing services hereunder for City, or any liability other than provided for in this Agreement. City shall not be liable for compensation or indemnity to any Consultant employee or subcontractor for injury or sickness arising out of his/her employment, or for any negligent actions of the Consultant or its employees. All persons employed in the performance of such services and functions shall be employees of Consultant, and as such shall not, for any purposes, be considered employees of City and therefore shall have no right to any City service, civil service, or other City status. 3. Subcontracts. Any subcontracts entered into by Consultant for services to be rendered towards the completion of Consultant's portion of this Agreement shall be for Consultant's benefit alone, and as such shall be its responsibility with no liability resting on the City. Consultant agrees to provide a list of all subcontractors to be used in connection with services to be rendered toward the completion of its portion of this Agreement to the City within ten (10) working days of execution of this Agreement. 4. Licenses, Permits, Etc. Consultant represents and warrants to City that he/she has all licenses, permits, qualifications and approvals of whatsoever nature which are legally required for Consultant to practice his profession. Consultant represents and warrants to City that Consultant shall, at his/her sole cost and expense, keep in effect or obtain at all times during the term of this Agreement any licenses, permits, and approvals which are legally required for Consultant to practice his/her profession. 34 GENERAL PROVISIONS PAGE 2 5. Time. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary for satisfactory performance of Consultant's obligations pursuant to this Agreement. Neither party shall be considered in default of this Agreement to the extent performance is prevented or delayed by any cause, present or future, which is beyond the reasonable control of the party. 6. Insurance. (a) Public Liability. During the term of this Agreement, Consultant shall maintain in full force and effect a policy of public liability insurance with minimum coverages as follows: $1,000,000 for injury to one person in any one occurrence; $1,000,000 aggregate; and, $50,000 for property damage. Consultant shall cause the City, its officials and employees to be named on all liability policies described above as insured as respects: (1) activities performed for the City by or on behalf of the named insured, (2) products and completed operations of the Named Insured, and (3) premises owned, leased or used by the Named Insured. (b) 'Worker's Compensation. During the term of this Agreement, Consultant shall fully comply with the terms of the law of California concerning worker's compensation. Said compliance shall include, but not be limited to, maintaining in full force and effect one or more policies of insurance insuring against any liability Consultant may have for worker's compensation. 7. Consultant Not Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied to act on behalf of City of any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever. 8. Assignment Prohibited. No party to this Agreement may assign any right or obligation pursuant to this agreement. Any attempt of purported assignment of any right or obligation pursuant to this Agreement shall be void and of no effect. GENERAL PROVISIONS PAGE 3 9. Personnel. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, desires the removal of any person or persons assigned by Consultant to perform services pursuant to this Agreement, Consultant shall remove any such person immediately upon receiving notice from City of the desire of City for the removal of such person or persons. 10. Standard of Performance. Consultant shall perform all services required pursuant to this Agreement in the manner and according to the standards observed by a competent practitioner of the profession in which Consultant is engaged in the geographical area in which Consultant practices his profession. All products of whatsoever nature which Consultant delivers to City pursuant to this Agreement shall be prepared in a substantial, first class and workmanlike manner and conform to the standards of quality normally observed by a person practicing in Consultant's profession. 11. CityRepresentative. The City Manager or his designee is the representative of the City and will administer this Agreement for the City. 12. Termination. This Agreement may terminate on ten (10) days written notice by either party, or within such time as both parties may find necessary to conclude the work currently under way and to summarize Consultant's findings for City. 13. Indemnity and Hold Harmless. Consultant shall assume the defense of, and indemnify and save harmless, the City, its officers, employees, and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, the performance of the work, provided that such action, damage, claims, loss, or expense is attributable to bodily injury, sickness, disease or death, or to injury to, or destruction of property, whether upon or off the work, including the loss of use thereof, and is caused in whole or in part by any negligent act or omission of the Consultant, and subcontractor, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, whether or not it is caused in part by a party indemnified hereunder. GENERAL PROVISIONS PAGE 4 14. Equal Employment Opportunity: During the performance of this Agreement, Consultant, for itself, its assignees and successors in interest, agrees as follows: a. Compliance With Regulations: Consultant shall comply with the Executive Order 11246 entitled "Equal Employment Opportunity,: as labor regulations (41 C.F.R. Part 64), hereinafter referred to as the "Regulations." b. Nondiscrimination: Consultant, with regard to the work performed by it after award and prior to completion of the work pursuant to this Agreement, shall not discriminate on the ground of race, color, religion, sex or national origin in the selection and retention of subcontractors, including procurements of materials and leases of equipment. c. Solicitation for Subcontractor Including Procurements of Materials and Equipment: In all solicitations either by competitive bidding or negotiations made by Consultant for work to be performed under any subcontract, including procurements of materials or equipment, such potential subcontractor or supplier shall be notified by Consultant of Consultant's obligation under this Agreement and the Regulations relative to nondiscrimination on the ground of race, color, religion, sex or national origins. d. Information and Reports: Consultant shall provide all information and reports required by the Regulations, or orders and instructions issued pursuant thereto, and will permit access to its books, records, accounts, other sources of information and its facilities as may be determined by the City to be pertinent to ascertain compliance with such Regulations, orders and instructions. Where any information required of Consultant is in the exclusive possession of another who fails or refuses to furnish this information, Consultant shall so certify to the City and shall set forth what efforts it has made to obtain the information. e. Sanctions for Noncompliance: In the event of noncompliance by Consultant with the nondiscrimination provisions of this Agreement, the City shall impose such contract sanctions as it may determine to be appropriate, including, but not limited to: (1) Withholding of payments to Consultant under the contract until Consultant complies; (2) Cancellation, termination, or suspension of the Agreement, in whole or in part. GENERAL PROVISIONS PAGE 5 f. Incorporation of Provisions: Consultant shall include the provisions of paragraphs a through e in every subcontract, including Regulations, order, or instructions issued pursuant thereto. Consultant shall take such action with respect to any Regulations, order or instructions issued pursuant thereto. Consultant shall take such action with respect to any subcontract or procurement as the City may direct as a means of enforcing such provisions, including sanctions for noncompliance; provided, however, that in the event Consultant becomes involved in, or is threatened with, litigation with a subcontractor or supplier as a result of such direction, Consultant may request City to enter such litigation to protect the interests of the City. 15. Notices. Any notice to be given from one party to the other pursuant to this Agreement shall be deposited with the United States Postal Service postage prepaid and addressed as follows: To City: City Administrator City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 To Consultant: John Austin MUNICIPAL RESOURCE CONSULTANTS 32107 W. Lindero Canyon Road Suite 233 Westlake Village, CA 91361 Nothing in this paragraph shall be construed to prevent the giving of notice by personal service G:\data\ does\lettex\ sa\ 1292prop.doc