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2003-25110 Reso RESOLUTION NO. 2003-25110 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA AUTHORIZING THE ADMINISTRATION TO ISSUE A REQUEST FOR PROPOSALS FOR THE PROVISION OF AUDITING RESORT TAXES FOR A ONE-YEAR PERIOD WITH TWO ONE-YEAR EXTENSIONS, AND TO EXTEND THE EXISTING CONTRACTS WITH BEVERLY YOUNG AND THE BOOKKEEPERS, ON A MONTH-TO-MONTH BASIS UNTIL A NEW CONTRACT IS EXECUTED. WHEREAS, In an effort to expand audit coverage for The City's resort and telecommunication taxes, the Commission adopted a resolution on January 12, 2000 accepting the ranking of responses received from a Request for Proposals (RFP) and authorized the Administration to negotiate and enter into agreements for auditing these taxes; and WHEREAS, On March 1, 2000, the City entered into agreements with Beverly Young and The Bookkeepers for professional service covering a one-year period with two one-year renewals; and WHEREAS, the Agreements will expire on February 28,2003; and WHEREAS, the Administration has drafted a RFP for providing the said services; and WHEREAS, in the interim, pending the completion of the RFP process and selection of a successful proposer, the Administration would recommend that the Agreements be extended on a month-to-month basis as necessary. NOW, THEREFORE, BE IT DULY RESOLVED BY TIlE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby authorize the Administration to issue a Request for Proposals for the provision of auditing resort taxes, for a one year period with two one-year extensions; and further extend the existing Agreements with Beverly Young and The Bookkeepers, respectively, on a month-to-month basis, until a new contract is executed. ~p~ CITY CLERK JJSlsa F:\BUDG\$AUDIDOC02-03AUDCO APPROVED AS TO FORM & LANGUAG & FOR EXECUTION PASSED and ADOPTED this ~ day of -"'~....,"'.. f- 1,1- 03 Date CITY OF MIAMI BEACH COMMISSION ITEM SUMMARY m Condensed Title: A Resolution of the Mayor and the City Commission authorizing the Administration to issue a Request for Proposals for the provision of auditing resort taxes for a one-year period with two one-year extensions, and to extend the existing contacts with Beverly Young and the Bookkeepers on a month to-month basis until a new contract is executed, Issue: Should the City issue a Request for Proposals (RFP) for Resort Tax auditing services and extend the existing contracts with Beverly Young and the Bookkeepers on a month-to-month basis until the a new contract is executed. Item Summary/Recommendation: The Administration recommends that the City Commission adopt the resolution, Advisory Board Recommendation: On January 15, 2003, the City Finance and Citywide Projects Committee recommended the issuance of the RFP, Financial Information: Source of Amoont ACCOllnt ApprOved Funds: " 1 $150,000 Resort Tax Fund .--.. ~ 2 J/ 3 Finance Total $1 50,000 DeDt. CI Clerk's Office Le Islatlve Trackin James Sutter, Internal Audit Si n-Oft's: Department Director City Manager ~v.P.~ AGENDA ITEM DATE 1:...7/3 ~-S -03 CITY OF MIAMI BEACH CITY HALL 1700 CONVENTION CENTER DRIVE MIAMI BEACH, FLORIDA 33139 www.ci.miami-beach.fl.us COMMISSION MEMORANDUM From: Mayor David Dermer and Members of the City Commission Jorge M, Gonzalez '< ~ City Manager a v Date: February 5, 2003 To: Subject: A RESOLUTION OF THE MAYOR AND THE CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA AUTHORIZING THE ADMINISTRATION TO ISSUE A REQUEST FOR PROPOSALS FOR THE PROVISION OF AUDITING RESORT TAXES FOR A ONE-YEAR PERIOD WITH TWO ONE- YEAR EXTENSIONS, AND TO EXTEND THE EXISTING CONTRACTS WITH BEVERLY YOUNG AND THE BOOKKEEPERS ON A MONTH.TO- MONTH BASIS UNTIL A NEW CONTRACT IS EXECUTED. ADMINISTRATION RECOMMENDATION Adopt the Resolution. ANALYSIS The City of Miami Beach charges a resort tax of three percent on revenues generated by the sale of rooms and two percent of revenues from food and beverage earned within the City. Businesses are required to register with the City to collect and remit taxes. It is projected that $23 million in resort taxes will be collected in fiscal year 2003. As of October 1, 2002, there were 1,918 businesses registered to collect resort taxes. Of the total registered businesses, 663 are reporting taxes to the City on a monthly basis and 6 are reporting taxes on a quarterly basis. These businesses consist of hotels, restaurants, nightclubs, and bars. The balance of registered businesses (1 ,249) represents apartments required to report on an annual basis to the City. The City employs field agents to audit these businesses. In an effort to expand audit coverage, the City entered into agreements with three independent contractors in October of 1994 to audit the records of these businesses. On September 14, 1999 the Commission adopted a resolution authorizing the issuance of a Request for Proposal for the provision of auditing services for resort and telecommunication taxes. On January 12, 2000, the Commission adopted a resolution accepting the ranking of responses received and authorized the administration to negotiate and enter into contracts for these services. Two firms were awarded contracts for one year with two one-year renewals. Currently, the City has four field agents and professional service agreements with two contractors, which expire February 28, 2003. February 5,2003 Commission Memorandum RFP - Audit of Resort Taxes Page 2 Of 2 Previously, the City collected a telecommunication tax from hotel operators who provided telecommunications services to their customers. Auditing for compliance of this tax was performed by the City's field agents and its auditing contractors. Effective October 1 , 2001 , the State of Florida collects this tax and remits a portion of the tax to the City. The State now has the auditing responsibility for this telecommunication tax. As a result, the City's auditing of those taxes reported prior to September 30, 2001 will be phased out and not included in this proposal. The Internal Audit objective for the current fiscal year is to audit 28 percent ofthe monthly and 12 percent of the annual active resort tax accounts for a total of 350 accounts. The Internal Audit Department will assign these audits to the City's field agents and independent contractors. The contract term would be for a period of one year with the option of two one-year renewals. Funds are available from the resort tax fund. The proposed budget for the current fiscal year 02/03 has been reduced from $175,000 to $150,000 for these professional services. Expenditures for fiscal year 01/02 amounted to $115,692. At the meeting of the City Finance and Citywide Projects Committee held on January 15, 2003, the continuation of using contractors to supplement the audit coverage of resort taxes was discussed and recommended the issuance of a Request for Proposals (RFP). Included in the attached document are the following: a. Scope of Services b. Evaluation Criteria c. Minimum experience requirements CONCLUSION The issuance of an RFP will allow the City to move forward with the selection of independent contractors to audit resort taxes at the current level of coverage. JMG:MDB:JJSf T:\agenda\2003\CMemo_RFPResortTax.doc Attachment to Commission Memorandum dated February 2, 2003 RFP - Audit of Resort Taxes A. SCOPE OF SERVICES Audits are to be performed on businesses registered with the City for collecting resort taxes. The scope of the work consists of examining the taxpayer's accounting records, such as general ledgers, cash receipts journals, sales journals, and 0 ther records as m ay b e maintained by the taxpayer; comparison of reported taxable sales with other reports such as Florida sales tax reports, and the preparation of schedules and analyses of work to determine compliance with the City Code relating to the collection and payment. All taxpayers' records which are subject to, determined to be, or administered by the Resort Tax codes are examined, Detailed testing is performed on a sampling basis, Contractor is to follow the City's Internal Audit programs for auditing resort tax businesses. City forms and programs will be provided in PC computer format. This includes initial contact with business, performing audit which results in an issuance of a resolution letter stating the results of the audit. Each audit is completed by the submission of workpapers with a resolution letter to the Internal Auditor for final review and acceptance, The Internal Audit Department will assign these audits. It is anticipated that the total number of audits assigned to the contractors would be about 140 to 160 audits per year. B. EVALUATION CRITERIA The Evaluation Committee shall base its recommendations on the following factors: a. b. c. d. C. 1. .Experience and qualification of the proposer. (25%) Experience and qualification of individuals assigned to audits (25%) Proposed fees per audit. (40%) Quality of references (10%) MINIMUM REQUIREMENTS I QUALIFICATIONS: Must have at least three years experience in auditing operations of hotel, restaurants, bars, and apartment businesses. Experience should include reviewing internal controls surrounding revenue control equipment, knowledge of operations, auditing establishments' financial records to substantiate revenue amounts reported to the City. 2. Must own a personal computer with common spreadsheet and word processing software. The City will provide audit programs, forms and letters in either Word formats. Must have working knowledge in the use of this software. 3. Contractor must have an office located in Miami-Dade County for the past three years.