City Council Draft Agenda

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Meeting Date: 04/18/2017  
From: Sandy Corder, Interim Revenue Director

Consideration and Approval of Contract:  Intergovernmental Agreement Between the City of Flagstaff and the City of Phoenix (related to Business Intelligence System)
Approve Intergovernmental Agreement with the City of Phoenix effective May 1, 2017 for the use of the Business Intelligence System.


Executive Summary:
Beginning in July 2016 the Arizona Department of Revenue (ADOR) enabled our local taxpayers to file transaction privilege taxes (also referred to as local sales taxes) through the state portal. This proposed Intergovernmental Agreement (IGA) will provide City of Phoenix developed software to the City of Flagstaff (City), improving the ability to evaluate tax data timely and accurately.
Financial Impact:
The cost of this IGA is an initial cost of $8,000 and annual cost of $1,450.  The budget for this contract is $15,000 in account number 001-02-033-0120-1-4231.
Policy Impact:
Connection to Council Goal, Regional Plan and/or TeamFlagstaff Strategic Plan:
Team Flagstaff Goal -

Strategic priority #3: Foster a resilient and economically prosperous city

1. Enhance the organization’s fiscal stability and resourcefulness.

Has There Been Previous Council Decision on This:
Options and Alternatives:
  1. Approve the IGA; 
  2. Do not approve the IGA, relying upon reports provided by Arizona Department of Revenue for the tracking of receipt of revenues due to the City of Flagstaff.
In 2013, the Arizona Legislature adopted a law requiring the Arizona Department of Revenue (ADOR) to administer and collect all local transaction privilege, use and licensing taxes, in addition to all state taxes (a single point of return). Starting January 1, 2017 ADOR is administering all local taxes. All businesses now must file both state and local tax returns with ADOR.
The City of Phoenix has developed a Business Intelligence System (System) to improve tracking of municipal tax data furnished by ADOR since July 2016.  This proposed IGA allows Flagstaff access to the System, whereby staff will be able to compile statistical reports and compile fiscal analysis of funds disbursed to the City from ADOR collections.  These reports are able to be compiled by disbursement periods, North American Industry Classification System (NAICS) codes, and align with current revenue practices.
Key Considerations:
The proposed IGA clarifies the responsibilities of the City of Phoenix and the City of Flagstaff related to the Business Intelligence System.  This partnership allows for timely and accurate tracking of receipt and disbursements of transaction privilege taxes.  City of Phoenix requires the form of IGA as submitted.
Expanded Financial Considerations:
Community Benefits and Considerations:
This will improve the efficiency of revenue reporting as it pertains to transaction privilege taxes collected by ADOR.
Community Involvement:
Expanded Options and Alternatives:
Phoenix BIS IGA


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