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HomeMy WebLinkAboutAgenda - 03-21-2006-9cORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 21, 2006 Action Agenda Item No. Q~G SUBJECT: Business Personal Property Audit Contract DEPARTMENT: Assessor/Purchasing PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Contract INFORMATION CONTACT: John Smith, 919-245-2101 Pam Jones or David Cannell, 245-2650 PURPOSE: To consider approving a contract with Evans and Associates to initiate a pilot program of auditing business personal property accounts. BACKGROUND: In the 2005-2006 budget, the BOCC appropriated $20,000 to cover the first year casts of a business personal property audit pilot program. For many years, the Assessor's office has had an in-house audit team that endeavors to audit the property listings smaller and local business personal property owners. However, staff lacks the time, expertise, and resources to travel much beyond Orange County to audit the larger, non-local businesses that may have headquarters as faraway as Texas or even California. For what may be less than the cost of plane fare, an audit company professional can: 1. travel to the corporate headquarters, 2. do extensive comparisons between what has been listed with the county and the company's depreciation/fixed asset schedule, chart of account, and general ledger, 3 sit down with and converse face to face with company representatives gaining valuable insights, 4 determine whether or not the company has accurately listed and exactly where there may be needed adjustments, 5. educate those making the returns on where and how changes should be made, 6. write up the final reports, and communicate such to the county and audited company, 7. and provide support to the county through any appeals processes. A broader audit program, such as this, that includes visiting headquarters, performing extensive reviews, and conversing face to face with the individuals in charge of making the business personal property returns will increase the prospects for property owners understanding what and how they must list and it will increase the equitable sharing of the property tax burden among all county property owners. Without a broad based audit program, the listing of business personal property, for the larger property owners, becomes a "voluntary" program where the property owner can potentially list as little or as much as desired. An audit program employing professionals can be an invaluable tool to help educate those responsible for listing, and can maximize proper listing. In late 2005, Orange County sent requests for proposals (RFPs) to the four major audit companies doing the kind of education needed and the types of audits needed. The RFP was also advertised on the County website, All four audit firms responded: • County Tax Services, Raleigh, NC • Evans & Associates, Charlotte, NC • Tax Management Associates, Charlotte, NC • Turner Business Appraisers, Charlotte, NC In early January 2006, the Business Personal Property Audit Committee (Assessor, Deputy Assessor, Business Personal Property Appraiser, and a Purchasing Department representative) interviewed all four firms and then did extensive background checks/reference checks, The result is that the committee unanimously recommended selection of Evans and Associates. FINANCIAL IMPACT: Funding to accomplish this pilot program has already been appropriated in the Assessor's 2005-06 departmental operating budget. Firms to receive audits of their personal property listings will be selected randomly, As outlined in the accompanying contract, each business personal property audit will cost $395, with a travel reimbursement allowance of a maximum of $200 for any audit requiring travel beyond 50 miles of Hillsborotagh, Staff's expectation is that the audit program provided for under this contract will generate discovery of unlisted business personal property, taxation of which will produce revenue mare than sufficient to pay for the contract. RECOMMENDATION(S): The Manager recommends that the Board approve the attached contract, subject to final review by staff and the County Attorney, and authorize the Chair to sign it. 3 DRAFT EVANS & ASSOCIATES CONSULTING GROUP INC FEE AGREEMENT AGREEMENT, dated , 20 between Orange County (hereinafter "the County") and Evans & Associates Consulting Group Ina (hereinafter "Evans & Associates" or "Independent Consultants".) Now, therefore, the parties hereto agree as follows: l SERVICE^S. The Cow~ty shall employ Evans & Associates as an hndependent Contractor, and as Independent Consultants shall serve the Cotmty upon the terms and conditions hereinafter set forth. Z. TERM AND EXTENSION. The employment of Evans & Associates herewtder shall continence on 2006. All of the terms and conditions of this Agreement applicable thereto shall continue in frill force and effect on a month-to-month basis. This Agreement is cancelable by either party upon thirty (.30) days written notice, 3. DUTIES. During the period or periods of employment hereunder, Evans & Associates shall serve the County and shall perform Business Personal Property Audits, provide instruction, and consulting services related to business per°sonal property issues required or requested in connection with the County. Within the limitations hereinabove provided, the hidependent Consultants will render such other advisory services in connection with the Tax Department of the County as maybe requested from time to time by the Tax Administrator of the Cotmty, without fin~ther compensation other than that for which provision is made in this Agreement. 4° TIME REQUIREMENTS,. Evans & Associates shall devote time, energy, and skill to the duties ofhis employment hereunder and shall periodically, or at any time upon the request of the County, submit data as to the time performed. 5. COMPENSATION. The County shall pay to Evans & Associates for their services on an average hourly basis as noted in Schedule-A. Non-local accounts have a $200 travel surcharge, Such stuns shall be paid upon satisfactory completion of each audit and are based upon an hourly fee. Non-local accomits are defined as those accounts in which t9ie audit takes place outside the state of North Carolina and beyond a 50 mile radius of the Comity. The non-local "premium" shall be used to offset additional traveling expenses. Evans & Associates shall fully assist the County in defense of all discoveries made under this agr°eement at no additional cost to the Cotmty except that the total man hours provided shall not exceed forty (40) hours on any one appeal. The appeals process includes; informal appeals, Board of Equalization and Review, and higher level appeals. The cost to the County for assistance exceeding forty hours, on any one appeal, shall be based on a rate of $55.00 per hour. Defense of discoveries shall include personal appearances at meetings with taxpayers or their representatives; providing testimony and evidence at all hear°ings at all appeal levels. It is understood and agreed that audit services constitute an examination of data and materials contained in the taxpayer''s reports or statements. The information obtained in an audit maybe used by the County Assessor in forming an opinion of value as required in his duties outlined in N C.G.S. 105-312, DRAFT 6, INDEMNIFICATION AND HOLD HARMLESS PROVISION. Evans & Associates agree hereby to indenmify and hold harniless the County from any and all claims by the Evans & Associates which may arise out of and in the course of the performance of their duties hereunder. Any and all claims for unemployment benefits and or claims for workers' compensation benefits are hereby expressly waived by the within Independent Consultants who agrees to maintain separate policies of liability, health, and accident insurance as maybe necessary or required by the County in connection with the perforniance of its duties herein,. 7 RL^LATIONSHTP BETWEEN PARTIES. Evans & Associates is employed by the County only for the purposes acrd Co the extent set forth in this Agreement, and the relation to the County shall, during the period or periods of the employment and services hereunder, be that of an independent contractor. The hrdependent Consultants shall be fi°ee Co dispose of such portion of their entire time, energy, and skill during regulaz business hours as is not obligated to devote hereunder to the County in such manner as seems fit and to such persons, firms, or corporations as deemed advisable, The Evans & Associates shall not be considered as having an employee status or as being entitled to participate in any plans, arrangements, or distributions by the County pertaining to or in comrection with any insuuance, pension, stock, bonus, profit-sharing, or similar benefits for their regular employees. 8. PROFESSIONAL RESPONSIBILITY. Nothing in this Agr°eement shall be construed to interfere with or otherwise affect the rendering of services by the Independent Consultants in accordance with his independent and professional.judgtnent. The hrdependent Consultants shall perform their services in a good and professional manner and in accordance with generally accepted business personal property auditing practices. 9. CONFIDENTIALITY,. Evans & Associates agrees to maintain and abide by confidentially requirements as required by stated laws and dictated by the nature of the services rendered.. 10 ENTII2L^ AGREEMENT. The within Agreement shall be construed in accordance with North Carolina law and shall constitute the entire Agreement between the patl ies. 11. NOTICES. Notices to be given or submitted by either party to the other, pursuant to this agreement shall be sufficiently given or made in writing and sent by certified mail, postage prepaid. 12. This instrument bas been preaudited in the manner required by the Local Government Budget and Fiscal Conhol Act. ACCEPTED: EVANS & ASSOCIATES ACCEPTED: ORANGE COUNTY AUTHORIZED AUTHORIZED SIGNATURE: SIGNATURE: NAME: NAME: TITLE: DATE: DA 5 DRAFT Schedule A Business Account Actual Investment Audit Fee $100,000-$249,999 $395 $25Q000-$499,999 $.395 $500,000-$999,999 $.395 >$1,000,000 $395 Note: The above fees are Uased upon average hourly rates and are not contingent upon the outcome of the audit. The above schedule does not include any non-local premium as noted in the affiliation agreement.