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L <br />qty , '+ CITY COUNCIL COMMUNICATION <br />Louisville AGENDA ITEM 111 <br />COLOR A PO •SIN' (: N <br />SUBJECT: <br />CONTRACT FOR FRANCHISE, SALES, AND USE TAX AUDITS <br />OF COMCAST AND PUBLIC SERVICE COMPANY <br />DATE: OCTOBER 22, 2013 <br />PRESENTED BY: KEVIN WATSON, FINANCE <br />SUMMARY: <br />Due to recent irregularities in the remittance of franchise, sales, and use tax from the <br />City's franchisees, the Finance Committee authorized the Finance Department to issue <br />a request for proposals (RFP) for audit services in relation to both Comcast and Public <br />Service Company. Finance staff recommends these audits be outsourced to an <br />experienced firm due to the lack of internal staffing resources and the time and <br />experience necessary to complete these complex audits. <br />Finance staff presented a draft of the RFP for Franchise Fees, Sales and Use Tax <br />Audits to the Finance Committee on July 15, 2013, at which time the Committee <br />recommended staff proceed with publication and issuance. The RFP requests <br />proposals on both a flat fee basis and a contingency fee basis. Staff issued the RPF on <br />August 9, 2013 and the City received five proposals on or before the September 10, <br />2013 due date. <br />The Finance Director and Tax Manager reviewed the proposals and conducted <br />telephone interviews with the top two candidates. The Tax Manager also conducted <br />reference checks on the top candidate. The top candidate proposed a fixed fee price, a <br />contingency fee percentage, and a hybrid approach. Negotiations on a final contract <br />are now underway with the top candidate. <br />Before Finance staff completes negotiations on a final contract, the Finance Committee <br />requested that the contingency fee concept be brought forward to the entire Council for <br />their review and discussion. Staff anticipates the award of bid and execution of the <br />contract will be presented to City Council at a regular meeting in November 2013. <br />FISCAL IMPACT: <br />The fiscal impact will depend on whether Council approves a fixed fee price, a <br />contingency fee percentage, or a hybrid approach, as well as the extent to which the <br />audit identifies additional taxes are due or refunds owed. <br />RECOMMENDATION: <br />Discussion <br />ATTACHMENT(S): <br />None <br />CITY COUNCIL COMMUNICATION <br />5 <br />