The URL can be used to link to this page

Home My WebLink About111-93 RESOLUTION• • • • • RESOLUTION NO. 111-93 A RESOLUTION APPROVING A BUDGET ADJUSTMENT IN THE AMOUNT OF $4,015,237 TO PAY THE COURT ORDERED REFUNDING OF SALES TAX MONIES, PAYING THE EXPENSES ASSOCIATED WITH THE REFUNDING PROCESS, AND PAYING THE ATTORNEY FEES IN HASHA, ET AL. V. CITY OF FAYETTEVILLE, E91-1052. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: S fol. That the Council hereby approves a budget adjustment in the amount of $4,015,237 decreasing Acct. No. 1010 0001 4999 99, Use of Fund Balance increasing Acct. No 1010 6600 5314 99, Sales Tax Refunding, to pay the court ordered refunding of sales tax monies, paying the expenses associated with the refunding lam, and paying the attorney fees in Hasha, et al. V. City of Fayetteville, E91-1052. A copy of the budget adjustment is attached hereto marked Exhlbit 'A' and made a part hereof. PASSED AND APPROVED this Ath_ day of , 1993. ATTEST - BY: APPROVED: BY: City Clot 7/Zee/1ilGt440to Hanna, Mayor .;s • FAYETTEVILLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE To: Fred Hanna, Mayor Thru: Ben Mayes, Administrative Services Director, From: Budget and Research,,,z, Re: Budget Adjustment - Sales Tax Date: October 11, 1993 On October 7, 1993 Judge Lawrence Dawson accepted the report of the Special Master, Judge Richard Mobley, Ret., concerning the sales tax refund operation and determined the legal fees to be paid to plaintiff's attorney, John Lisle. A budget adjustment is requested to provide the funding to pay the cost of the Court awarded fees and the expenses of the refunding office as summarized in the major expenditure components listed below: • Attorney's Fees - John Lisle • Attorney Costs - John Lisle • Sales Tax Refunds • Special Master Cost - Judge Richard Mobley • Refund Office Expense TOTAL $2,687,836 7,563 1,289,552 28,364 14,672 $4 027.987 For additional information concemmg the cost elements associated with the sales tax refunding operation, please refer to the attached schedules The City Council approved a budget adjustment recognizing the transfer of residual sales tax funds from the Capital Improvement Fund and the Sales Tax Construction Fund to General Fund on August 17, 1993. This previous budget adjustment resulted m the recording of all remaining cash and investments from the previous City sales tax being placed in the Undesignated Fund Balance of the General Fund. The requested budget adjustment will establish the necessary expenditure account to recognize expenses for the items listed above. As a result of this activity, the remaining resources, after payment of all expenses relating the previous City sales tax, net remaining resources will be $754,425.57. These monies will currently remain in the General Fund's Undesignated Fund Balance. City of Fayetteville, Arkansas Schedule of Resources and Expenditures - Sales Tax Refunding October 11, 1993 Resources: Transfer from Sales Tax Bond Fund Transfer from Capital Improvement Fund Transfer from Sales Tax Construction Fund Investment Earnings on Transfer Amounts - Projected thru 10/21/93 Total Resources Available Expenditures: Attorney Fees - John Lisle Attorney Costs - John Lisle Sales Tax Refund Special Master - Judge Richard Mobley, Ret. Refund Office Expenses* 2,687,836.00 7,562.92 1,289,551.79 28,364.34 14,671.75 Total Expenditures - Sales Tax Legal Expense and Refunding Net Remaining Resources Budget Total Expenditures - Sales Tax Legal Expense and Refunding Less: Current Budget - Refund Office Expenses Additional Budget Required $ $ $ 3,414,247.55 5,059.32 1,302,438.19 60,667.31 4,782,412.37 4,027,986.80 754,425.57 4,027,987 12,750 4,015,237 * Does not includes $ 24,332.77 in City employee labor cost absorbed by operating budgets. A:\FINALRE.WK3 City of Fayetteville, Arkansas Sales Tax Refund — Total Costs Advertising - Preliminary Hearings: N.W.A. Times Moming News Arkansas Democrat/Gazette Advertising - Refund Notice: Rent N.W.A. Times Moming News 623.47 1,736.28 4,261.51 656.54 1.118.34 G.C.M. Company 2,400.00 Office Supplies/Equipment Misc. Office Supplies 124.55 Paint/Room Supplies 50.00 Telephone 371.13 Computer Software/Supplies 600.81 Mailing Checks: Printing: Postage Envelopes Notice Mailers (19,400) Claim Forms (9,750) In—house Coping 1,13400 74.55 178.76 1,334.82 81.54 Labor Special Master Richard Mobley 28,364.34 Employee Labor * 24,332.77 6,621.26 1,774.88 2,400.00 1,146.49 1,208.55 1,595.12 52,697.11 Total Costs 67,443.41 * Employee labor is an indirect cost since the refunding office work was incorporated into present work schedule. E%SYETTEVI I.LE THE CITY OF FAYETTEVILLE. ARKANSAS DEPARTMENTAL CORRESPONDENCE TO: Fred B. Hanna, Mayor THRU: Ben R. Mayes, Administrative Services Director FROM: Budget & ReseaxFh DATE: October 11, 1993 RE: Sales Tax Refunding Cost As you are aware, the City was presented two options for refunding the previous City sales tax, prior to the commencement of the sales tax refund process. Both options involved the appointment of a special master. The first option was to utilize the services of retired Chancery Court Judge Richard Mobley of Russellville with a refund office staffed by City employees. The alternative option was to employ an accounting firm from Little Rock that would be staffed by their selected temporary workers. After careful consideration and preliminary cost comparisons, Judge Mobley was selected and agreed to by the plaintiffs and the Court. Now that the refund period is completed and the Court has awarded the Special Master his fee, it is possible to calculate the cost of the operation. Based on the records maintained throughout the process, the total cost for operating the sales tax refund office is calculated to be $67,443.41. Of the total cost, $24,332.77 is for City employee labor. It should be noted that the City employee labor is not a direct expense in that it is being absorbed into the various City operating budgets. In other words, no reimbursement from the previous City sales tax is being credited to the various City operating programs that were involved in staffing the refund office. The total cost includes the charges for the following: • Special Master • Office Rent • City Employee Labor • Office Supplies and Equipment • Advertising • Mailing Expenses • Punting Costs For comparison purposes, it is estimated that the refund effort would have cost approximately $178,000 had the City chosen to proceed with the alternative Special Master. The estimated cost is based on a proposed rate schedule submitted by Little Rock accounting firm. The above information reflects an estimated minimum savings to the City of approximately $111,000 as a result of utilizing Judge Mobley as the Special Master and City employees to staff the office. • City of Fayetteville, Arkansas Sales Tax Refund — Estimated Costs if Contracted Advertising - Preliminary Hearings: N.W.A. Times Morning News Arkansas Democrat/Gazette Advertising - Refund Notice: Rent: N.W.A. Times Morning News 623.47 1,736.28 4,261.51 656.54 1,118.34 G.C.M. Company 2,400.00 Office Supplies/Equipment: Misc. Office Supplies 124.55 Paint/Room Supplies 50.00 Telephone 371.13 Computer Software/Supplies 600.81 Mailing Checks: Printing: Software Development: Labor: Total Costs Indirect/Direct In- house Costs Net Savings Postage Envelopes Notice Mailers (19,400) Claim Forms (9,750) In-house Coping 1,134.00 74.55 178.76 1,334.82 81.54 Computer Software: 20,000.00 Special Master (200 hrs. Q $150/hr.) 30,000.00 Travel 6,300.00 Technical Consult/Clerks (2,152.50 hrs. ei $50/hr.) 107,625.00 6,621.26 1,774.88 2,400.00 1,146.49 1,208.55 1,595.12 20,000.00 14%925.00 178,671.30 67,443.41 111.227.89 • 0 3 0 0, c iA 0 m 0 O 1 Administrative c 8888N� f0 C w O (di: T T T r 01 88 8 t80t8ptO8crj8 `4 /`2888N8 fr2.,2N000�jNN8 Vo ois.^T^b'4(OSacoNONl,^VCV G V 01 N T r i0 �f t`Ov LO 10 roo 6 44 88 go CO 8 8 N 8 8 8$8 N r N 10 N N. n r T t*0 0 LO N (7 T r N r T r Lm 9...c a<E<m 40 06 «2mfpa 0) q 03 CC O) 0) q -a ¢ O c 0 06 c c- t �8c c c C o m o 0 its 030000 - 808 7 0 «m« mm 888 to a t0 N (0 T 8 88n8 8 N t0 N 8 h 84� °< c la I0si 10 0 f: 0 80111) co I- N 1;8 N • cv 0 0 l<m0 Ste m 2 052 0 Op m<mm< An 37 q � p ¢ C a- oe tTo 0 o m < 8 10 01 l0 ID cNi l0 Nv 1 8 3 • • • City of Fayetteville, Arkansas Budget Adjustment Form Budget Year t`;93 Departmeru (,caaa4 4asest a -4 - Division: µ c seek. -•-t ti s Program: 1-`.1 scat C Date Requested Adjustment N Proj.xt or Item Requested: Co as IS ea 9cksc4c4 it cogclt Cos IP 06 kciu . fat, &a t -. Po4..;41 KK ecet4 o...4 gFi(tce 44440cc &CCot.t,aitc.1 wt +be Cowl oA.die-J 4a144 rs-a t,y�404 no) Project or Item Deleted: Jus:oft: um of this Increase: F. f/e-..r..o' 44 Atkaaos.t4 ciccasen1 ..J 114swi, 4..l, vs ci 4 a r,,r44w4, ci .t.. � e. t....7 c d o � I A• (i. Ise ari. to •-•-af Jowled . 4 44 Amy ie9.fomes, c�ia V dam. Justification of this Decrease c...>ek d. Pati cesl we.. Lori 6ta4c, F�.:1 �...••• Said rct 6•ati%n 4 cAp/Le.o° �1...eautw•A-cadstock l rydu Saw floc Caartte.,arte..t F.nad • $« ,,arLLra 3 6" JLL40.i '4'4 Account Name Amount Saari* a totari, Inness. Account Number Project Number 4,bt.<0.31 1010 .400 .S3!•C"� 39_ Account Name Amount USt.6 F.041ots,zi1 Doman Account Number slat art it_ Project Number Approval Signatures Requested IBLy Budgetrd for Department Director Ad 16-I/-73 Budget Office Un Only C D 'type: A B Date of Approval Posted to General Ledger Entered in Categoryl.og EXHIBIT A Budget Mice Copy