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Agenda #4c ~ Letter Agreement for Sale Tax Reallocation <br />. MEMORANDUM <br />TO: Roger L. Stancil, Town Manager <br />FROM: Loris R. Colclough <br />SUBJECT: Letter Agreement for Sale Tax Reallocation <br />DATE: September 24, 2007 <br />PURPOSE <br />Page 1 of 1 <br />9/~/a ~ <br />AGENDA #4c ~~ <br />RECEI <br />NOV 2 R 2007 <br />BY: <br />Council consideration and approval of a Letter of Agreement with Robert S. Segal, CPA for <br />consulting services related to the examination and analysis of refunds of sales and use tax for <br />potential reallocation to the County and the Municipalities therein. This Letter of Agreement <br />represents a joint agreement between Orange County, the Towns of Chapel Hill, Carrboro, <br />and Hillsborough, and Robert S. Segal. <br />BACKGROUND AND DISCUSSION <br />The Town of Chapel Hill has entered into a previous agreement with Orange County and the <br />Towns of Carrboro and Hillsborough for services provided by Robert Segal, CPA (the <br />• "consultant") for sales tax reallocation projects resulting in additional funds discovered and <br />returned to the county as well as each municipality. Mr. Segal's firm examines and analyzes <br />sales tax refund requests submitted by the county and the municipalities, as well as refund <br />requests submitted by school systems, non-profit corporations and the University of North <br />Carolina to determine accuracy. Inaccurate refund requests often impacts the local sales tax <br />revenue received by the county and municipalities, therein. In recent years, Mr. Segal's firm <br />has helped to recover significant amounts of revenue for the county and municipalities. An <br />attached exhibit presents the detail distribution of the additional sales tax revenues recovered <br />during Fiscal Years 2006 and 2007 totaling $505,538 for the county and municipalities. The <br />amounts recorded are net of Mr. Segal's fees. <br />The consultant's fees are based on a percentage of the revenue recovery recognized as <br />outlined in the attached Letter of Agreement. The percentages quoted by the consultant for <br />this engagement are less than those paid on the previous engagement. The county and each <br />municipality pay their proportionate share of the fees. <br />RECOMMENDATION <br />That the Council approve the Letter of Agreement representing a joint agreement between <br />Orange County, the Towns of Chapel Hill, Carrboro, and Hillsborough, and Robert S. Segal, <br />CPA PA and authorizes the Town Manager to execute the document. <br />ATTACHMENTS <br />• 1. Sales Tax Reallocation for August 2004 to January 2007 (p. 4). <br />2. Sales Tax Letter of Agreement (p. 5) <br />http://townhall.townofchapelhill.org/agendas/2007/09/24/4c/ 10/25/2007 <br />