R-04-02-12-14B1 - 2/12/2004RESOLUTION NO. R-04-02-12-14131
WHEREAS, the City of Round Rock desires to retain consulting
services for a sales tax economic impact study, and
WHEREAS, The Perryman Group has submitted an engagement letter to
provide said services, and
WHEREAS, the City Council desires to enter into said engagement
letter with The Perryman Group, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City an engagement letter with The Perryman Group for
consulting services for a sales tax economic impact study, a copy of
same being attached hereto as Exhibit "A" and incorporated herein for
all purposes.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all. times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
RESOLVED this 12th day of February, 2 0 04 .
NYLt 46.xwEft, Mayo
ACity of Round Rock, Texas
T T:
CHRISTINE R. MARTINEZ, City Secreta
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7EXHIBIT
"All
February 3, 2004
Mr. John Kroll
Celero Group
815 Brazos, Suite 200
Austin, TX 78701
Mr. David Kautz
Assistant City Manager
The City of Round Rock
221 East Main Street
Round Rock, TX 78664
Dear John and David:
RED F E B Q 4 2004
NUNN�
CROUP
510 N. Valley tilills Drive, Suite 300
Waco,Texas 76710-6076
(254) 751-9595
FAX (254) 751-7855
E-mail: ray@perrymatzgroup.com
Internet: tewu.perrymangroup.com
M. Ra}, Perryman, Ph.D.
President
It was a pleasure to visit with you recently, and I look forward to working with you on
the Streamlined Sales Tax effort. As you requested, I am preparing this letter to set forth the
basic terms of our agreement to retain my firm, The Perryman Group (TPG), to work on this
engagement. I am quite content for this letter to serve as the agreement. If it is necessary to
transfer these essential terms to a more formal document, however, that should not pose a
problem.
As I understand it, the project will be funded jointly by the City of Round Rock and the
Coalition for Appropriate Sales Tax Law Enforcement (CASTLE). I assume these entities agree
among themselves regarding the desired allocation of payments. The details of this allocation are
not of great concern to me.
The nature of this project is such that the methods and scope cannot be determined with
great precision in advance. The general process is described below:
TPG will assist the sponsoring entities in refining their survey instrument to
solicit information from major taxpayers regarding sales tax patterns. (I am
assuming in this proposal and would highly recommend that the sponsors will
send out the survey, as (a) it is likely to be more cost effective and (b) the
response rate is likely to be higher. If it is desired that TPG conduct the survey,
we are fully capable and happy to do so at an additional cost.)
2. TPG will compile and analyze the survey results.
3. TPG will compile other pertinent data and research, including information from
the Comptroller of Public Accounts, any studies conducted in other areas, and
other relevant information.
4. Given the available information, TPG will define reasonable scenarios to
quantify and illustrate the key issues to be examined. Any required assumptions
will be explicitly stated and defensible.
Perryman Consultants, Inc., and Texas Economic Publishers, Inc., are divisions of The Perryman Group
5. Once the direct parameters have been defined above, the overall economic
consequences will be assessed using the appropriate geographic submodels of the
Texas Multi -Regional Impact Assessment System. This model, which was
developed and is maintained under my direction at TPG, has been used in
hundreds of analyses over the past twenty years, including virtually every major
economic policy issue confronting the State during this time span. This segment
of the analysis will provide a comprehensive quantification of losses to the local
economies (jobs, income, output, taxes, etc.) which will serve as an offset to any
anticipated benefits which may be offered.
6. TPG will prepare a detailed narrative setting forth the methods and results
associated with this investigation as well as a concise Executive Summary
suitable for widespread distribution. It will include an overview of the issues
from an economic perspective, as well as anecdotal illustrations of situations
(bond commitments, specific outlets, etc.) which explain the importance of this
matter. (I assume that many of these can be supplied by the sponsoring entities.)
In particular, the effects on the taxing authorities in the City of Round Rock will
be examined (I assume that much of the needed data is available from the
sponsors).
This analysis will be conducted for a fee of $87,400 (plus direct, out-of-pocket expenses). Any
additional work, (presentations, op-eds, editorial boards, meetings, response to other reports, etc.)
will be billed at our standard rates or be the subject of a separate agreement.
Assuming timely authorization and provision of survey data, TPG will complete this
analysis in accordance with the required time schedule. It is my understanding that a period of at
least 3 months is available. TPG will bill on a monthly basis based on appropriate percentage
complete (plus expenses), with payment due within 30 days of invoice. Assuming timely
payment of invoices, TPG will hold the sponsoring entities harmless for any debt incurred in the
completion of this project. TPG will carry appropriate insurance coverage throughout the life of
this project.
Assuming this letter is sufficient, signatures below can serve as our Authorization to
Proceed. A fax is sufficient. (We are willing to begin work based on appropriate verbal
authorizations.) Otherwise, I hope it provides a reasonable basis for a contractual arrangement.
We greatly appreciate your consideration and look forward to hearing from you soon.
Sincerely,
This authorization is made with the
M. Ray an understanding that the City of
Round Rock's maximum liability under
MRP/RW the terms of this engagement letter
shall not exceed $43,700 plus 1/2
of the direct, out of pocket expenses.
Accepted
M. Ray Perryman
For CASTLE:
I hereby Authorize The Perryman
Group to Proceed under the terms of this letter.
Signature:
Name:
Company:
Title:
Address:
Phone:
Fax:
Date:
E-mail:
For the City of Round Rock:
I hereby Authorize The Perryman Group to Proceed under the terms of this letter
Signature: Name:
Company: Title:
Address: Phone:
Fax:
Date: E-mail:
DATE: February 6, 2004
SUBJECT: City Council Meeting - February 12, 2004
ITEM: 14.B.1. Consider a resolution authorizing the Mayor to execute an
agreement with The Perryman Group for a sales tax economic
impact study.
Department: Administration
Staff Person: David Kautz, Assistant City Manager/Chief Financial Officer
Justification: The Streamline Sales Tax Project (SSTP), a coalition of states
working to simplify sales tax rules nationwide and facilitate taxation
of remote sales, requires that states adopt rules that source retail
sales for delivered merchandise to the point of destination. Texas
and its local taxing jurisdictions currently operate under rules that
source sales for merchandise to the point of origin. Staff believes
that it is important to retain a prominent economist and conduct an
economic impact study. Reasons for conducting a study include:
a. The study would provide expert analysis and presentation or
the detrimental effects on Round Rock of a sourcing rules
change.
b. The study would be used to fill in any omissions of a study
being conducted by the state comptroller that are important
to Round Rock.
The study would further support and strengthen testimony
and information Round Rock is to provide to state legislators.
Funding:
Cost: $43,700 plus direct expenses (1/2 of $87,400)
Source of funds: General Fund
Outside Resources: N/A
Background Information: A change to point -of -destination tax collection rules would
have grave financial consequences for the City of Round
Rock because its largest retailers deliver virtually all of
their merchandise to consumers who are at locations
outside of the city. More than $20 million in annual sales
tax collections by the City are at risk if the sourcing rules
are changed. Round Rock has collaborated with and
proposes to share the costs of this study with the Coalition
for Appropriate Sales Tax Law Enactment, a small group of
Texas cities who are also adversely affected by a sourcing
rules change.
Public Comment: N/A