Agenda - 10-20-2009 - 6e - Laserfiche WebLink

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2 the business structure to utilize extensive Internet search capabilities and some field canvassing to locate and discover unlisted businesses. Increased manpower means more responsiveness to the needs and issues of taxpayers, better communication and increased educational efforts as well as the availability of greater taxation knowledge and legal expertise. Business personal property staff will also be freed up to concentrate on the discovery, education, and taxation of unlisted businesses. Tax Office staff has worked with Financial Services Department staff to determine a cost analysis and recommendation for pursuance of this course of action. By entering into a contract with Tax Management Associates, the County could freeze the existing Business Personal Property Appraiser position. On a twelve-month basis, the freeze would equate to a salary and benefits savings of $80,000, some of which would fund the pilot program. The outsourcing effort will cost, per the attached contract, $13-$15 per business listing. The cost for the pilot period of one year is projected to be $60,000. The cost of promoting a staff member to oversee coordination efforts between the County and TMA is projected to be $10,000, for a total cost of $70,000. (The cost of maintaining the system that currently exists by hiring an experienced business personal property appraiser plus using a second employee, with half of that position's time allotted to business would have a cost of approximately $85,000 annually.) This equates to an initial County cost savings of $15,000, but is expected to be only the beginning of the potential County benefits. For example, between the end of Fiscal Year 2004-2005 and the end of Fiscal Year 2008-2009, the statistical report shows the personal property tax base has increased significantly. Much of this increase is likely due to annually recurring business personal property discoveries made through the enhanced auditing program. Using the current County tax rate, this growth represents a significant increase in tax revenues annually. Since discovered business personal property is annually recurring, there is an additive effect that is enhanced with each additional discovery and with every new tax year. This growth is projected to expand with the implementation of the outsourcing project. The bottom line is that with every business personal property program enhancement there is the excellent potential for increased listings, discoveries, and educational opportunities that will generate significant and annually growing monetary returns to the County. It is therefore the recommendation that this program should be pursued on a pilot basis for one year since the program has the potential to result in streamlined business personal property taxation processes with many revenue related benefits. More importantly staff believes this should be pursued since it also enhances educational opportunities and services to the public. This pilot program with Tax Management Associates will allow staff to thoroughly evaluate the benefits to the County of outsourcing while also cutting County budgetary expenditures, initially in the short term (immediate budget) and potentially long term. FINANCIAL IMPACT: Cost savings to be realized from the reorganization and reallocation of job duties as it relates directly to business personal property listing should equate to no less than $15,000 for this fiscal year. There is also the great potential for increasing and additive annual returns in County revenues.