HomeMy WebLinkAbout2012-07-09-Meeting Agenda
Finance Committee Meeting Commission Chamber- 7/9/2012- 12:55 PM
FINANCE
1. Motion to approve FY2013 Augusta-Richmond County
Budget Calendar.
Attachments
2. Approve motion for budget transfer from Permanent S&W-
Reg to Supplemental Pay to compensate Solicitor's Office
employees for additional duties in Accountability Court.
Attachments
3. Motion to accept a $5,000 appropriation from the State of
Georgia to increase the Child Support Court budget by $5,000.
Attachments
4. Motion to accept a $5,000 appropriation from the State of
Georgia to increase the Drug Court Budget by $5,000.
Attachments
5. Approve the removal of General Counsel Andrew MacKenzie
from the Forensic Audit Sub-Committee. (Requested by
Commissioner Lockett)
Attachments
6. Legal Session to discuss Personnel. (Requested by
Commissioner Lockett)
Attachments
7. Motion to accept a $5,000 appropriation from the State of
Georgia to increase the Mental Health Court Budget by
$5,000.
Attachments
8. Motion to approve the minutes of the Finance Committee held
on June 11, 2012.
Attachments
9. Discuss alternative approaches for discovery and collection of
unknown/under reported license revenue. (No recommendation
from Finance Committee May 29, 2012 and deferred from the
Augusta Commission meeting June 5, 2012 and June 19, 2012)
Attachments
10. Report from the sub-committee appointed to discuss inquiries Attachments
www.augustaga.gov
made by auditing firms regarding the scope of work for the
Forensic Financial Audit and the maximum dollar amount the
Commission will approve for the audit. (Referred from May
7 Finance Committee)
Finance Committee Meeting
7/9/2012 12:55 PM
2013 ARC Budget Calendar
Department:
Caption:Motion to approve FY2013 Augusta-Richmond County Budget
Calendar.
Background:The Budget Calendar establishes tentative dates for the
completion of the various stages of the 2013 budget preparation
and adoption process. The calendar is presented for approval
consistent with the legal requirements in accordance with OCGA
36-81-5. The budget calendar as planned with facilitate
developing, reviewing, and deliberations by the legislative body,
input from the citizens of Augusta-Richmond County and
adoption of FY2013 budget on a timely basis. The budget will
also be adopted prior to fiscal year 2013.
Analysis:
Financial Impact:
Alternatives:Revise dates
Recommendation:Approve Budget Calendar for FY2013.
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Cover Memo
Item # 1
Attachment number 1 \nPage 1 of 1
Item # 1
Finance Committee Meeting
7/9/2012 12:55 PM
Accountability Court Solicitor's function
Department:Solicitor General
Caption:Approve motion for budget transfer from Permanent S&W-Reg to
Supplemental Pay to compensate Solicitor's Office employees for
additional duties in Accountability Court.
Background:When the Accountability Court was created, the proposed budget
included $36,000 for DUI Court Solicitor General and Staff. The
Solicitor, Charles Evans, is requesting the funds be moved into the
Supplemental Pay line item, so that he can provide supplements to
those employees of his office that take on additional duties dealing
with accountability court issues, rather than hire another
individual.
Analysis:Approval of commission is required since the budget adjustment
involves a salary and wage line item. The proposal to supplement
existing staff members rather than hire another individual will
save the cost of additional fringe benefits.
Financial Impact:Funds are available in 204022320/5111110. No additional funds
required.
Alternatives:Do not approve.
Recommendation:Approve the transfer of funds from S&W-Reg to Supplemental
Pay.
Funds are Available
in the Following
Accounts:
204022320/5111110
REVIEWED AND APPROVED BY:
Finance.
Cover Memo
Item # 2
Law.
Administrator.
Clerk of Commission
Cover Memo
Item # 2
Attachment number 1 \nPage 1 of 1
Item # 2
Attachment number 2 \nPage 1 of 2
Item # 2
Attachment number 2 \nPage 2 of 2
Item # 2
Finance Committee Meeting
7/9/2012 12:55 PM
Child Support Court
Department:Superior Court
Caption:Motion to accept a $5,000 appropriation from the State of Georgia
to increase the Child Support Court budget by $5,000.
Background:The Child Support Court wishes to utilize State funds for general
office supplies (1,000), education and training ($2,000), and travel
($2,000). Judge Craig is requesting an increase in the budget to
accommodate the receipt and expenditure of State funds.
Analysis:Approval of Commission is required due to an increase in the
budget amount.
Financial Impact:The State funds have been deposited in account
#101000000/3411410.
Alternatives:Return State money.
Recommendation:Approve acceptance and expenditure of State funds by increasing
the budget $5,000.
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Finance.
Law.
Administrator.
Clerk of Commission
Cover Memo
Item # 3
Finance Committee Meeting
7/9/2012 12:55 PM
Drug Court
Department:Superior Court
Caption:Motion to accept a $5,000 appropriation from the State of Georgia
to increase the Drug Court Budget by $5,000.
Background:The Drug Court wishes to utilize State funds for general office
supplies ($1,000), education and training ($2,000), and travel
($2,000). Judge Blanchard is requesting an increase in the budget
to accommodate the receipt and expenditure of State funds.
Analysis:Approval of Commission is required due to an increase in the
budget amount.
Financial Impact:The State funds have been deposited in account
#205000000/3511410. No additional county funds are required.
Alternatives:Return State money.
Recommendation:Approve acceptance and expenditure of State funds by increasing
the budget $5,000.
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Finance.
Law.
Administrator.
Clerk of Commission
Cover Memo
Item # 4
Finance Committee Meeting
7/9/2012 12:55 PM
Forensic Audit Sub-Committee
Department:Clerk of Commission
Caption:Approve the removal of General Counsel Andrew MacKenzie
from the Forensic Audit Sub-Committee. (Requested by
Commissioner Lockett)
Background:
Analysis:
Financial Impact:
Alternatives:
Recommendation:
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Cover Memo
Item # 5
Attachment number 1 \nPage 1 of 1
Item # 5
Finance Committee Meeting
7/9/2012 12:55 PM
Legal Session
Department:Clerk of Commission
Caption:Legal Session to discuss Personnel. (Requested by Commissioner
Lockett)
Background:
Analysis:
Financial Impact:
Alternatives:
Recommendation:
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Cover Memo
Item # 6
Attachment number 1 \nPage 1 of 1
Item # 6
Finance Committee Meeting
7/9/2012 12:55 PM
Mental Health Court
Department:Superior Court
Caption:Motion to accept a $5,000 appropriation from the State of Georgia
to increase the Mental Health Court Budget by $5,000.
Background:The Mental Health Court wishes to utilize State funds for general
office supplies ($1,000), education and training (2,000), and travel
($2,000). Judge Blanchard is requesting an increase in the budget
to accommodate the receipt and expenditure of State funds.
Analysis:Approval of Commission is required due to an increase in the
budget amount.
Financial Impact:The State funds have been deposited in account
#101000000/3411410. No additional county funds are required.
Alternatives:Return State money.
Recommendation:Approve acceptance and expenditure of State funds by increasisng
the budget $5,000.
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Finance.
Law.
Administrator.
Clerk of Commission
Cover Memo
Item # 7
Finance Committee Meeting
7/9/2012 12:55 PM
Minutes
Department:Clerk of Commission
Caption:Motion to approve the minutes of the Finance Committee held on
June 11, 2012.
Background:
Analysis:
Financial Impact:
Alternatives:
Recommendation:
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Cover Memo
Item # 8
Attachment number 1 \nPage 1 of 3
Item # 8
Attachment number 1 \nPage 2 of 3
Item # 8
Attachment number 1 \nPage 3 of 3
Item # 8
Finance Committee Meeting
7/9/2012 12:55 PM
Project to identify and collect undiscovered revenue
Department:Planning and Development
Caption:Discuss alternative approaches for discovery and collection of
unknown/under reported license revenue. (No recommendation
from Finance Committee May 29, 2012 and deferred from the
Augusta Commission meeting June 5, 2012 and June 19, 2012)
Background:See Attachment
Analysis:See Attachment
Financial Impact:See Attachment
Alternatives:See Attachment
Recommendation:For discussion
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Cover Memo
Item # 9
EVALUATION OF A PROPOSAL TO IDENTIFY AND COLLECT UNDISCOVERED
LICENSE AND OTHER REVENUE
MAY 15, 2012
Staff has been pursuing the hiring of a “headhunter” to identify and collect undiscovered revenue
in all of the various categories which are the responsibility of the Planning and Development
Department except those related to permitting and construction since the Commission retreat on
July 13, 2011. In doing so we solicited for consultants through Procurement in a way that
encouraged prospects to suggest methodologies that had been successful in other areas, with the
restriction that all fees would have to be paid from newly discovered and collected revenue per
the action of the Commission on October 18, 2011.
Prior to and during the solicitation process we received numerous inquiries but only one
prospective consultant submitted a proposal. Their concept for the project was very detailed and
they had a number of examples of where they had successfully performed the service that we
have requested. As we did due diligence on a suggested contract with them we identified
numerous issues and potential problems, most of which we have been able to work through. In
some cases after careful examination and collaboration with our Legal and Finance Departments,
we informed the prospective consultant that certain provisions were not feasible. In some cases
we were able to make accommodations or adjustments. Attachment A is a chronology of this
initiative to date.
The process of working through issues and potential problems with the proposed contract has
been ongoing since our first meeting with the consultant on February 17, 2012. On May 4 staff
discussed the remaining issues with the Administrator, Assistant Administrator, Legal, and
Finance. It was the decision of the group that the salient information should be presented to the
Commission so that a policy decision could be made as to how to go forward with the contract
given the uncertainty and potential for unintended consequences that remain.
It is our belief that the prospective consultant has suggested a reasonable approach that could
yield significant undiscovered revenue. They have indicated that they would have to collect at
least $300,000 to make the venture profitable for them. They have explained how and where
some of this new revenue would be found and that has caused some concern. Our conversations
with the consultant and some things that have happened independently have also caused staff to
believe that we could make a successful effort to enhance revenue without their services.
The first major area of concern is that the consultant revealed that colleges, hospitals,
government institutions, and industries typically have numerous individuals, LLC’s, and other
entities which technically should have individual business licenses but are not detected by local
governments. Examples would be government employees who do independent research, 1099
support services located within the exempt or parent entities, contractors and subcontractors, and
independent professionals such as doctors and teachers who operate within the institutions. We
do not currently make an effort to seek out this potential revenue and calls to Athens and Macon
indicate that they also do not pursue them. The concern here is for the impact upon our
relationship with such entities with the consultants going into them, knocking on doors, and
Attachment number 1 \nPage 1 of 5
Item # 9
making three increasingly aggressive contacts seeking revenue – something we would not be
able to control once they are under contract.
The second major area of concern has to do with the collection of various fees and excise taxes
which are revenues collected by the License Division. One staff member is assigned to auditing
these revenue sources in addition to his other duties. Selectively auditing more of these sources
would undoubtedly discover some additional revenue. The revenue from some of these fees and
taxes is directed to outside entities by the Augusta Code, such as the excise tax for hotels and
motels which is dedicated by the code to the Coliseum Authority, Convention and Visitors
Bureau, Augusta Museum, and the Lucy Craft Laney Museum. Newly discovered and collected
revenue in this category would not enhance the general fund. In addition we do not believe that
the 40% fee for additional revenue collected by the consultant could be taken directly from the
proceeds of the discovery due to the code provisions. There are several possible solutions to this
problem, but it is also possible that the fees (which could be substantial) would have to come
from the general fund, which would violate the stipulation of the Commission’s October 18
approval that all fees would have to be taken from newly discovered and collected revenue. It is
also of concern that the details of the excise tax such as calculations, processing, due dates, etc.
are all very complicated and could easily lead to disagreement and contract disputes between the
city and the consultant.
The third area of concern relates to costs that the city would have to incur outside the contract to
support the consultant. In addition to being committed to working with the consultant to set up
their software application to match our billing and collecting business rules, which will take
hundreds, if not thousands, of man hours, the main costs that we have identified relate to
extracting our license data in a form that it can be used by the consultant and importing their data
in a form that can be used by our software application. If these IT expenditures are made, there
would likely also have to be many hours spent by IT and Planning staff auditing and correcting
data after it has been imported. There would be three types of fees to be paid to M S Govern, our
software provider, according to IT:
· Extracting data from our system – probably thousands of dollars
· Conversion programs to input the consultant’s data into our system – probably tens of
thousands of dollars; and
· Configuration assistance, also probably tens of thousands of dollars
In addition to the concerns related to unintended consequences and additional costs, our
researching of the options, development of the RFQ, and conversations with the prospective
consultant have revealed a number of opportunities for staff to enhance revenue without the
assistance of a consultant. Here are five of these opportunities:
· Increase gross revenue brackets. The occupational tax a business pays is based upon
their gross revenue and the “profitability index” of the type of business. Because the
gross revenue is lumped into only a few brackets, a large increase in revenue may mean
very little difference in the amount of this occupational tax. Increasing the number of
brackets would definitely capture additional revenue.
Attachment number 1 \nPage 2 of 5
Item # 9
· Compare data bases. The occupational tax data base could be compared to other data
bases to identify businesses that are not paying the tax. Such other data bases are
Augusta Utilities, Augusta Environmental Services, Georgia Power, and Georgia
Department of Revenue. In the past we have been unable to utilize the Georgia Power
data base, but that has recently been resolved. We are currently arguing with the GDOR
about gaining access to their list of businesses collecting sales tax in Augusta.
· Search for noncompliant businesses which operate under the umbrella of a college,
hospital, government institution or industry. As stated previously, there are probably
many doctors, teachers, researchers and subcontractors who are not technically
employees of an umbrella entity which is itself exempt from the occupational tax. There
are several noninvasive ways that we could attempt to identify them to recover this
revenue.
· An iphone/ipad application could be written by IT that would allow an inspector to stand
in any location and view on a map every business license record within any distance
selected. If businesses are present that are not shown on the map, then they may not have
a license.
· Local audit firms could be employed to perform additional audits under the supervision
of the Department’s auditor.
We have negotiated the unacceptable provisions out of the draft contract with the prospective
consultant and we could have a contract on the next committee agenda for the services that we
initially solicited. That contract would undoubtedly result in the discovery/recovery of some
unknown amount of revenue. We would pay the consultant 35–40% during the contract period
and we would receive 100% of the increased occupational taxes and fees thereafter. We believe
that there would be unintended consequences as cited previously of an unknown magnitude.
A second option would be to enter a contract with the consultant that is limited to the
occupational tax and alcohol licensing. This would eliminate their involvement in collecting the
other fees and excise taxes where we see difficulties expressed previously and where much of the
discovered revenue would not affect the general fund.
A third option would be to negotiate a contract with the consultant to serve in an advisory
capacity on the basis of an hourly rate. This has not been considered in detail but we believe that
this option would recover more revenue than the cost of the services and introduce new methods
to the staff.
The fourth option would be to not contract with the consultant, but to pursue enhanced revenue
on the basis of knowledge gained during the past nine months. The new organizational structure
has a Deputy Director of Licensing and Code Enforcement as well as a License Manager focused
on revenue collections and enforcement. They could provide a detailed proposal at the next
committee meetings.
Attachment number 1 \nPage 3 of 5
Item # 9
In conclusion, Staff will work diligently to make any of the above options a success. We want
the Administrator and the Commission to have the facts presented herein and propose whatever
level of input is desired in the making of a decision on how to proceed.
Attachment number 1 \nPage 4 of 5
Item # 9
ATTACHMENT A
REVENUE DISCOVERY/RECOVERY TIMELINE
July 13, 2011 Commission retreat, budget proposals made including hiring a
“headhunter” to identify and collect license revenue
July 14-August 31 I discussed the concept with GMA, ACCG, and three consultants who
contacted me. One of them was highly recommended by a local source,
and I asked that person to submit a draft scope of services. In the end I
wrote a scope from ideas from each potential consultant.
August 31 Sent a request to various departments asking for input. Talked to
procurement and was asked to have the concept approved by committee.
September 7 Sent the draft scope to various departments asking them to review it – no
response
September 16 Sent agenda item to Clerk of Administrative Services to approve the
concept as directed by procurement.
September 26 Item was deferred to next meeting by Administrative Services Committee.
October 10 Approved by the Administrative Services Committee
October 18 Approved by the Augusta Commission
October 21 Submitted the scope of service to Procurement, asked for a quick
turnaround.
January 13, 2012 Invitation for bids issued
February 10, 2012 Bids opened, only 1 received
February 17, 2012 First meeting with lone bidder in Augusta
Feb. 18-May 4, 2012 Due diligence regarding the proposal by the lone bidder. Numerous
potential problems were identified and investigated
May 4, 2012 Presentation to Fred, Tameka, Finance, and Legal. Decision to present
facts to the Commission ASAP
May 29, 2012 Presentation to Committee
Attachment number 1 \nPage 5 of 5
Item # 9
Attachment number 2 \nPage 1 of 2
Item # 9
Attachment number 2 \nPage 2 of 2
Item # 9
Finance Committee Meeting
7/9/2012 12:55 PM
RFP 12-117 Forensic Audit
Department:Finance
Caption:Report from the sub-committee appointed to discuss inquiries
made by auditing firms regarding the scope of work for the
Forensic Financial Audit and the maximum dollar amount the
Commission will approve for the audit. (Referred from May
7 Finance Committee)
Background:Per Commission directive on December 20, 2011. The Forensic
Financial Audit was published:
Augusta Chronicle February 2, 9, 16, 23, 2012
Metro Courier February 8, 2012
A Mandatory Pre-Proposal Conference / Teleconference will be
held on Friday, March 23, 2012 @ 3:00 p.m. in the Procurement
Department, 530 Greene Street, Augusta
Analysis:
Financial Impact:
Alternatives:
Recommendation:
Funds are Available
in the Following
Accounts:
REVIEWED AND APPROVED BY:
Cover Memo
Item # 10
Attachment number 1 \nPage 1 of 1
Item # 10
Attachment number 2 \nPage 1 of 1
Item # 10
Attachment number 3 \nPage 1 of 2
Item # 10
Attachment number 3 \nPage 2 of 2
Item # 10