Loading...
HomeMy WebLinkAboutHDL Coren & Cone 2022-07-25; 2025-05-16COU 2223-075-A1 CITY OF UKIAH AMENDMENT NO. 1 TO PROFESSIONAL SERVICES CONTRACT 2223075 BETWEEN HDL COREN & CONE and THE CITY OF UKIAH This Amendment No. 1, entered on May 16th, 2025 revises the Agreement for Professional services dated July 25th, 2022 between the City of Ukiah and HdL Coren & Cone, for professional consulting services relating to assistance with Master Tax Sharing Agreement Development. This Amendment No. 1 adds an additional scope of work and an additional $15,000, as described in Exhibit 1. This revises the total, not-to-exceed amount to $25,000. Except as expressly amended by this Amendment, all other terms remain unchanged and in full force and effect. IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AMENDMENT ON THE EFFECTIVE DATE: HDL COREN & CONE BY: DATE: PRINT NAME: CITY OF UKIAH BY: DATE: SAGE SANGIACOMO, CITY MANAGER ATTEST BY: DATE: KRISTINE LAWLER, CITY CLERK Paula J Cone May 16, 2025 05/20/2025 Kristine Lawler (May 21, 2025 07:32 PDT) Kristine Lawler 05/21/2025 May 16, 2025 Daniel Buffalo, Finance Director City of Ukiah 300 Seminary Avenue Ukiah, CA 95482 RE: Scope of Services Annexation Calculation Modeling Spreadsheet implementing the Master Tax Sharing Agreement for potential annexations into the City of Ukiah TASKS •Acquire and import parcel data for the proposed annexation area. •Build subsets of Mendocino County Data – in order to do this accurately both a parcel listing and parcel maps or a shape file of the proposed annexation area(s) need to be provided by the City of Ukiah - annexation areas North and South of the City and the portion of the Balance Area included if not inclusive as a part of the annexation. •Divide the proposed annexation area into specifically named geographic subsets as desired or necessary. •Review and analyze the Mendocino County Master Tax Sharing Agreement (MTSA). •Verify that parcels listed are included in the data purchased from the County of Mendocino and identify any discrepancies in the listing in comparison to the County data purchased. This will be done in the 2024-25 assessor’s released roll. •Identify the TRAs assigned to the parcels included in the City provided parcel listing of the annexation currently residing in the Mendocino County Unincorporated Area. •Research the 1% ATI factors assigned to each tax rate area (TRA) in the County Unincorporated Areas to quantify the revenue currently being directed to the County of Mendocino from these TRAs. Exhibit 1 • Develop a modeling tool for calculating the annual allocation of property tax revenue to the City of Ukiah from the territory proposed to be annexed pursuant to the MTSA. • Apply the data from County reports into modeling tools to determine the growth in revenue to be directed to the City of Ukiah from the annexations based on the terms in the MTSA approved by the County of Mendocino and the City of Ukiah. Historical data will be used to see how this model would have worked if the annexations occurred previously. • Create models based on scenarios of growth within the annexation(s) and the property tax revenue growth potential. Modeling can be performed to take into consideration the baseline growth of the annual 2% CPI growth and assumptions of historical growth from the area going forward to gauge the point when the City will achieve the revenue potential and receive the 15¢ share of the County’s 1% share as provided for in the MTSA based on the scenario assumptions. • Meet with staff of the City of Ukiah as necessary to discuss interim and/or the final results of research and analysis. The estimated fees for this scope of work are noted below based on the time involved and the level of staff performing the work outlined above ¤ IT time for map work and historical building of geos plus any other IT needs – 12 hours - $200/hour $2,400 ¤ Development of taxing models using county assessor and auditor data - 16 hours for year-1 work for this project - @ $225/hour $3,600 ¤ Partner/administration oversight and consultation estimated at 8 hours- review of work, meetings with staff as the models are being developed and any follow-up meetings with Ukiah 8 hours @ $250/hour $2,000 ¤ Additional meetings or review of spreadsheets for year 1 prepared by Mendocino County to verify the calculations used by the county if different from HdLCC so that the City of Ukiah has confidence in the work done on an annual basis. 15 hours @ $225/hour $3,375 • 15% Contingency – extra research, issues with county data if required $1,706 TOTAL FOR YEAR-1 WORK FOR THIS PROJECT: $13,080 or a Not To Exceed amount of $15,000. OPTIONAL WORK - FUTURE YEAR SCOPE OF WORK FOR AUDITING THE COUNTY AUDITOR’S CALCULATION BASED ON THE IMPLEMENTATION OF THE MTSA: • The goal of this project is to develop a spreadsheet where the City can check the annual property calculation(s) developed to allocate the revenue growth from potential annexations per the MTSA Agreement. This will always require that the City secure a parcel listing of the properties valued by the Assessor and taxed by the Auditor annually. This could be a parcel value report, or the change in the value of the new TRAs assigned if the TRAs assigned due to this annexation are uniquely assigned to the City Ukiah. This would mean that these annexed parcels were not added to existing TRAs where the value added annually due to the annexation will be a challenge to track due to co-mingling with existing values already assigned to those TRAs. Ideally new TRAs would be assigned to these annexed parcels so that the calculations annually could be performed at a TRA level. • In addition, the auditor files that quantify the 1% shares assigned to each taxing entity in the newly assigned tax rate areas by the SBOE after the annexation would be needed. The parcels annexed into the City will also need to be audited in the first the year after the annexation to ensure that the annexed parcels have been correctly assigned to the City of Ukiah and none are still assigned to County TRAs. • These tasks can either be handled by the City of Ukiah in conjunction with the assessor and auditor data from Mendocino County or could be handled by a third-party contractor like HdLCC who has access to this data. While HdLCC received the current year 2024-25 assessor’s data in August 2024, we are still waiting for a current 2024-25 file that identifies the 1% shares of the tax dollar assigned to each agency in each tax rate area in the County from the Auditor’s office. We were able to receive a sample of this file from the State Controller’s Office, but it is for a prior year and would not have included any changes that may have been included in the 2024-25 files used for taxation and apportionment. The County Auditor has suggested that the report we have requested does not exist. We have made a PRA of the Mendocino County Auditor and included a copy of the report the County Auditor provided to the State Controller’s Office for reference. It will be imperative that this report is available before October of the year after the annexation to verify that the new TRAs have been assigned and that the agreed upon 1% factors are either included in these files or that there is another file that will be used for the parcels involved in the annexations which will need to be provided by the County Auditor. This report is critical in the annual calculation owed to the City per the MTSA. Either way, the Auditor will need to provide these files prior to the allocation of revenue for the fiscal year after the annexation where the first allocations are made typically in December each year. If this information is not made available and we have the prior year’s factors we can perform a growth analysis estimate, but it may be subject to roll changes later when the updated file is made available. • The scope for any of the additional years will require the same IT time component to download the data set from the county assessor’s data and catalogue any parcels that were added or deleted between tax years before a data set is available for processing to be used to compare the previous and current year’s value and tax/fiscal year allocations. • Once the data is verified, and compared, the annual growth due to the maximum of 2% CPI in the former County TRAs will need to be quantified and that revenue divided 50% between the County and City, and the incremental growth above this amount in each former County TRA will need be calculated so that the City revenue due to this incremental growth can be quantified per the MTSA. The spreadsheet model prepared would automatically identify the growth in revenue above the 2% maximum in each TRA where 50% of revenue is allocated to each the County and the City of Ukiah and finally the incremental growth above this 2% maximum due to the State CPI applied that once calculated will accrue to the City of Ukiah. • If the City decides to engage HdLCC for several years after the annexation was completed to audit the parcels involved in the initial annexation, and compare the methodology used by the County to what is prepared in this project, the bid for that work product on an annual basis would be: IT processing of annual data to verify that all parcels were correctly assigned to the newly assigned TRAs and that dropped and added parcels due to subdivision or combining of parcels are included in the newly released data. IT 6 hours @ $200/ hour $1,200 Audit 6 hours @ $125/ hour $ 750 Re-populate current FY data in the revenue model for allocation per the MTSA 6 hours @ $225/ hour $1,350 Meetings – if required- preparation and review of model with staff 4 hours @ $225/ hour $ 900 Contingency if needed – extra research, issues with county data if required 4 hours @ $200/ hour $ 800 ANNUAL ON-GOING ACTUAL COSTS YEARS 2-4 IF REQUESTED- $5,000 per year Due to the unknown methodology that the County will ultimately implement to allocate revenue due to the City of Ukiah resulting from this annexation and the terms of the MTSA, there will need to be a negotiated not to exceed amount for unforeseen analyses, work product or meetings necessary to resolve any issues that may arise in this project for years 2-4. After years 1 and 2 are completed, we will have a better understanding of the County of Mendocino’s methodology, which data sources are used for updating the calculation annually and the actual calculation used for apportioning both the 50% of the 2% maximum growth and the 100% of incremental growth from the annexation year over year to the City of Ukiah. After City review and approval of the above scope of work, your signature below and the return of a copy of this letter of engagement will authorize HdL Coren & Cone to proceed with this project. If materials are required by the City to initiate this project, a checklist of those items will be provided to the City. Sincerely, Paula J. Cone President HdL Coren & Cone Authorized to Proceed______________________________ Date___________________ Staff Title: ______________________________ City of Ukiah