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HomeMy WebLinkAboutAgenda - 02-07-2001-9cORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT. Meeting Date: February 7, 2001 Action AgenVa Item No. 11 G SUBJECT: Contract with Robert S. Segal, CPA PA for Expense Reduction and Revenue Enhancement DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Resolution from Innovation & Efficiency Committee Draft Agreements with Robert S. Segal, CPA PA INFORMATION CONTACT: John Link, ext 2300 Pam Jones, ext 2650 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider approval of agreements with Robert S. Segal, CPA PA to conduct a review of various county practices and operations with the goals of enhancing the cost- effectiveness of service delivery activities and identifying opportunities for cost savings and revenue enhancements for Orange County. BACKGROUND: The Orange County Innovation & Efficiency (I & E) Committee has reviewed a presentation, along with other company information, from representatives of Robert S. Segal, CPA PA, an expense reduction and revenue enhancement firm from High Point, North Carolina. The Committee also received letters of recommendation and direct written comments for Robert S. Segal, CPA PA from other North Carolina county governments encouraging Orange County to consider retaining the company's services. Following its review of all information, the I & E Committee adopted the attached resolution recommending to the Orange County Board of County Commissioners that the County proceed to enter into a working relationship with Robert S. Segal, CPA PA. The attached agreements represent the opportunity to enter into this working relationship. Agreement #1 for expenses and revenues is an agreement between Orange County and Segal for a review of 1) county purchasing activities for potential cost savings and 2) revenue sources for additional funds due to the County. Agreement #2 pertains to sales tax/use tax reallocation and will potentially involve the County and, to the extent of their interest, the municipalities of Chapel Hill, Carrboro, and Hillsborough. Upon agreement approval by the County, Segal will pursue approval with the municipalities. FINANCIAL IMPACT: There is no direct financial expenditure associated with approval of the agreements retaining the services of Robert S. Segal, CPA PA. If the agreements are approved, Segal will begin its review of county operations, and at various junctures and/or upon completion, reports its findings/recommendations back to staff and/or the Finance and Operations Sub-committees of the I .& E Committee as well as the BOCC. The county can then choose to move forward with all or portions of the actions/recommendations detailed by Segal. For Agreement #1 for expenses and revenues, if the county does approve a recommendation (s) and enacts the associated change(s), Segal would be compensated at a rate equal to fifty percent (50%) of the annual financial benefit to the county arising from the improvement. This compensation to Segal would extend for two years, with the County garnering all financial benefits thereafter. For Agreement #2 pertaining to sales tax/use tax reallocation, Segal would be compensated based on a formula stated as follows and included in the agreement: FEE SCHEDULE A sliding scale based on the one percent (1 %) sales tax as follows: 25.0% for the first $200,000 of additional refunds obtained, 30.0% for the next $200,000 of additional refunds obtained, 35.0% for all additional refunds obtained. RECOMMENDATION(S): The Manager recommends that the Board approve the agreements in substantially their current form, authorize the County Manager to sign pending final review and approval by staff and the County Attomey, and authorize the County Manager to approve any accessory agreements which may be necessary during this expense/revenue/operations review process. 3 ORANGE COUNTY INNOVATION & EFFICIENCY COMMITTEE Resolution to the Orange County Board of County Commissioners Recommending that the County Proceed to Enter into Working Relationships with Robert S. Segal, CPA PA and/or Other Firms and that Staff, in Cooperation with Company Representatives, be Authorized to Develop Proposed Scope of Work Agreements for Consideration by the Board of Commissioners WHEREAS, the Orange County Innovation & Efficiency (I & E) Committee has been charged by the Orange County Board of Commissioners with the responsibility of reviewing various county practices and operations with the goal of recommending improvements for the delivery of services to recipients and enhancing the cost- effectiveness of those service delivery activities; and, WHEREAS, the Orange County Innovation & Efficiency (I & E) Committee has reviewed a presentation from representatives of Robert S. Segal, CPA PA and other company information along with letters of recommendation for Robert S. Segal, CPA PA from other North Carolina county governments; and, WHEREAS, the Orange County Innovation & Efficiency (I & E) Committee believes that a review of possible areas such as banking services, electricity, food services, sales tax allocations, franchise fee distributions, general purchasing, and other operations and activities of county government would be beneficial to identify opportunities for cost savings and revenue enhancements for Orange County; and, WHEREAS, Robert S. Segal, CPA PA possesses the professional background and demonstrates a definite expertise and history in assisting counties with operational, purchasing, and revenue enhancement reviews; and, WHEREAS, there are other similar firms who have expertise in certain specific areas that could also assist Orange County in the review of operations and purchasing activities; NOW THEREFORE BE IT RESOLVED that the Orange County Innovation & Efficiency (I & E) Committee recommends to the Orange County Board of County Commissioners that the County proceed to enter into working relationships with Robert S. Segal, CPA PA and/or other firms, and that staff, in cooperation with company representatives, be authorized to develop proposed Scope of Work Agreements for consideration by the Board of Commissioners. This the 29`" day of November, 2000. Agreement #1 LETTER OF AGREEMENT Robert S. Segal, CPA, PA (SEGAL) and Orange County (CLIENT) hereby enter into this Letter of Agreement whereby SEGAL shall serve as a consultant to CLIENT to examine and analyze the following listed expenses/revenues of CLIENT and to make recommendations to achieve savings, credits, refunds or additional revenues, hereafter referred to as funds, in these areas: ANY AND ALL EXPENSES AND REVENUES The Client agrees that none of the above listed expenses/revenues are currently being evaluated by CLIENT and all funds for each expense/revenue listed, regardless of source, will be eligible for full payment of fees to SEGAL. SEGAL will furnish CLIENT with a written report as to recommendations that may be made in the above areas. CLIENT will then determine which (if any) of these recommendations CLIENT wishes to implement. SEGAL will then assist in the implementation of these recommendations to achieve the funds. Future savings and revenues are computed on a per unit basis. CLIENT agrees to pay SEGAL on each recommendation for funds which is implemented, a fee equal to fifty cents of every dollar saved, credited, refunded or additional revenues during the 24 month period immediately following full implementation of the recommendation. This fee will be paid quarterly following the date of full implementation of the particular recommendation. SEGAL AGREES TO MAINTAIN IN STRICT CONFIDENCE ALL INFORMATION RECEIVED FROM CLIENT CONCERNING ITS EXPENSES AND METHODS OF DOING BUSINESS. FURTHERMORE, SEGAL ACTS AS A CONSULTANT ONLY AND DOES NOT RECEIVE ANY COMMISSIONS OR REMUNERATION OF ANY KIND FROM ANY VENDORS OR SERVICE PROVIDERS. The persons signing below are authorized to do so on behalf of their respective organizations. This Letter of Agreement shall be binding upon the parties hereto, their heirs, successors and assigns. This Letter of Agreement is entered into effective as of day of CLIENT: Orange County Robert S. Segal, CPA PA By: Title: By: Robert S. Segal Title: President 5 Agreement #2 LETTER OF AGREEMENT Robert S. Segal, CPA, PA ("SEGAL") and Orange County, Town of Chapel Hill and Town of Hillsborough (together referred to as "CLIENT") hereby enter into this Letter of Agreement whereby SEGAL shall serve as a consultant to CLIENT to examine and analyze the following revenue of CLIENT for the purpose of obtaining any tax refunds available in all prior years still open under the statute of limitations. North Carolina Sales/Use Tax Reallocation The Client agrees that the above listed revenue is not currently under tax refund evaluation by CLIENT and all refunds received will be eligible for full payment of fees to SEGAL at the contract rate stipulated below. SEGAL will furnish CLIENT with a written report as to sales/use tax refunds discovered. SEGAL will then prepare the respective refund claims to achieve the refunds. CLIENT agrees to pay SEGAL a fee in accordance with the following FEE SCHEDULE due to Segal's amending of refund returns upon the CLIENT'S receipt of documentation from the North Carolina Department of Revenue evidencing the additional sales/use tax revenue being transferred to the CLIENT. FEE SCHEDULE A sliding scale based on the one percent (1 %) sales tax as follows: 25.0% for the first $200,000 of additional refunds obtained, 30.0% for the next $200,000 of additional refunds obtained, 35.0% for all additional refunds obtained. CLIENT agrees that SEGAL shall invoice each entity (Orange County, Town of Chapel Hill and Town of Hillsborough) for its pro-rata share of the fee based upon its percentage of that quarter's sales and use tax distribution from the state of North Carolina. SEGAL AGREES TO MAINTAIN IN STRICT CONFIDENCE ALL INFORMATION RECEIVED FROM CLIENT CONCERNING ITS EXPENSES AND METHODS OF DOING BUSINESS. FURTHERMORE, SEGAL ACTS AS A CONSULTANT ONLY AND DOES NOT RECEIVE ANY COMMISSIONS OR REMUNERATION OF ANY KIND. FROM ANY VENDORS OR SERVICE PROVIDERS. ROBERT S. SEGAL, CPA PA has contracted with DIXON ODOM PLLC to assist with this project.