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Item 5BCity of Southlake, Texas MEMORANDUM July 28, 2003, TO: Billy Campbell, City Manager FROM: Sharen Elam, Director of Finance, ext. 1713 SUBJECT: Approval of the Tarrant County Tax Collection Contract Action Requested: Approval of the contract with Tarrant County for assessment and collection services for ad valorem taxes levied by the City of Southlake. Background Information: Since 1982, the Tarrant County Tax Assessor /Collector has collected property taxes for the City of Southlake. The renewal contract has been presented to the City for collection of the 2004 taxes for the fiscal year beginning October 1, 2004. Tarrant County charges $.50 per account. The number of accounts will be based on the October billing roll certified to the assessor /collector by the Tarrant Appraisal District. New accounts added by Tarrant Appraisal District will be billed to the city quarterly. The fee is a very reasonable charge for the service provided. Southlake would spend far in excess of the $5,725 budgeted for this service in personnel costs alone if the tax collection was done by the city. The working relationship over the years with the Tarrant County tax office has been excellent. The contract provides for disbursements to be made to the City when daily collections exceed $100, or at the close of the month. Also included in the contract is a listing of the reports provided to the City. The contract provides that the County may invest the collected tax funds in a manner that complies with the Public Funds Investment Act. There are provisions that allow the City to perform an audit of the County's collection process if we choose to do so. Financial Considerations: If the contract is not approved the City would have to make provisions to collect taxes for ourselves. This would cost significantly more than the cost for Tarrant County to collect the City's taxes. Citizen Input/ Board Review: There is no requirement for citizen or board review of the contract with Tarrant County for tax collection. Legal Review: The contract has been reviewed by the City Attorney. Alternatives: The City could assess and collect taxes for ourselves at a significantly higher cost than what is proposed by Tarrant County. Supporting Documents: Contract for Tax Collection with Tarrant County Staff Recommendation: Approval of the contract with Tarrant County for assessment and collection services for ad valorem taxes levied by the City of Southlake. § Agreement For The Collection Of Taxes COUNTY OF TARR,4NT § Agreement made this day of , 2004, by and between the Tarrant County Tax Assessor /Collector, hereinafter referred to as ASSESSOR/COLLECTOR, and Tarrant County, hereinafter referred to as the COUNTY, both of whom are addressed at 100 E. Weatherford Street, Fort Worth, Texas 76196 -0301, and the City of Southlake, hereinafter referred to as City, whose address is 1400 Main St, Southlake, TX 76091 PURPOSE OFAGREEMENT The purpose of this Agreement is to state the terms and conditions under which the ASSESSOR/COLL.ECTOR will provide assessment and collection services of Ad Valorem taxes levied by the City NOW THEREFORE, in consideration of the mutual promises herein contained, the patties hereto agree as follows: I SERVICES TO BE PERFORMED The ASSESSOR/COLLECTOR agrees to collect the taxes due and owing on taxable property upon which the City has imposed said taxes. The ASSESSOR/COLLECTOR shall perform the said services in the same manner and fashion as Tarrant County collects its own taxes due and owing on taxable property situated within its boundaries. The services performed are as follows: receiving information from die Tarrant Appraisal District for purposes of the Certified Appraisal Roll, and monthly changes thereto; providing mortgage companies, property owners and tax representatives, tax roll and payment data; providing all necessary assessments of taxes and Truth in Taxation calculations as required; the transmittal of tax statements via the U - Mail or electronic transfer of data; and rapid deposit payment processing All City disbursements, made by check or by electronic transfer (wire), for collected tax accounts will be made to the City on the day die COUNTY Depository Bank 'indicates the mandatory assigned "float" period has elapsed and the funds are posted to the collected balance. If any daily collection total is less than one Hundred dollars ($I00.00), the disbursement will be withheld until the cumulative total of taxes collected for the City equals at least one hundred dollars ($100.00), or at the close of the month. The ASSESSOR/COLLECTOR will provide the City the General Ledger Revenue & Expense Report monthly as required by Sec .31 10 of the Texas Property Tax Code. H. REPORTS The ASSESSOR/COLLECTOR will provide the City the following reports, if requested: Daily: General Ledger Distribution Report Weekly: Detail Collection Report (Summary) Annual: Paid Tax Roll Delinquent Tax Roll Current Tax Roll Monthly: Tax Roll Summary (Totals Only) Year -to -Date Summary Report Detail Collection Report (Summary) Delinquent Tax Attorney Tape The ASSESSOR/COLLECTOR will provide the City the General Ledger Revenue & Expense Report monthly as required by Sec .31 10 of the Texas Property Tax Code. III. COMPENSATION In consideration of the services to be performed by the ASSESSOR/COLLECTOR, compensation for the services rendered is a rate of fifty cents (S.50) per account. The number of accounts will be based on the October billing roll certified to file ASSESSOR/COL.L.ECTOR by The Tarrant Appraisal District New accounts added by The Tarrant Appraisal District will be billed to the entity quarterly. The ASSESSOR/COLLECTOR will collect for these services from each entity's collections quarterly. IV. AUDITS Tire ASSESSOR/COLLECTOR will provide to the City auditor necessary explanations of all reports and access to ASSESSOR/COLLECTOR in -house tax system computer terminals to assist the City auditor in verifying audit samples of the financial data previously provided by the ASSESSOR/COLLECTOR during the past audit period. If the City elects to have its auditors conduct a "computer' system assurance review audit" requiring assistance from ASSESSOR/COL.LECTOR system's progrannners and accountants, the fee is $660.00 per day, which will be deducted from the City's current collections at the end of the month V TAXRATE REQUIREMENT The City will provide the ASSESSOR/COLLECTOR, in writing, the City's newly adopted tax rate and exemption schedule to be applied for assessing purposes no later' than 2:00 p. m., Friday, September 17, 2004, Under authority of Section 31,01 (h) of the Property Tax Code, any additional cost of printing and mailing tax statements because of late reporting of the tax rate or the exemption schedule will be charged to and must be paid by the City. If the City wishes its collection reports to be itemized as to maintenance and operation fund and interest and sinking fund, then the notice advising of the new tax rate must set out the separate rates, as well as the total rate. The tax rate and the exemption schedule for each of the last five (5) years in which an ad valorem tax was levied, or all prior years where there remains delinquent tax, must be furnished in writing to the ASSESSOR/COLLECTOR at the time of the initial contract VI. COMPLIANCE WITHAPPLICABLE STATUTES, ORDINANCES, AND REGULATIONS In performing the services required under this Agreement, fire ASSESSOR/COLLECTOR shall comply with all applicable federal and state statutes, £anal Court orders and Comptroller regulations, If such compliance is impossible for reasons beyond its control, the ASSESSOR/COLLECTOR shall immediately notify the City of that fact and the reasons therefore. VIZ. DEPOSIT OF FUNDS All funds collected by the ASSESSOR/COLLECTOR in the performance of the services stated herein for the City shall be promptly transferred to the account of the City at the City's depository bank, Electronically transferred fwrds incur an additional fee, which will be charged back to the City and deducted from those collected funds. The wire fee charged will be the same fee charged to the County by its bank depository. If the City desires its tax disbursements to be made by electronic transfer of funds (whe) the ASSESSOR/COLLECTOR has no liability for the funds after initiation of the electronic transfer' of the City's funds from the COUNTY Depository to the City's designated depository. VIII. INVESTMENT OF FUNDS The City hereby agrees that the COUNTY, acting through the COUNTY Auditor, may invest collected ad valorem tax funds of the City during the period between collection and payment, The COUNTY agrees that it will invest such funds in compliance with the Public Funds Investment Act. The COUNTY further agrees that it will pay to the City all interest or other earnings attributable to taxes owed to the City The ASSESSOWCOL.LECTOR agrees to deliver to the COUNTY Auditor all ad valorem taxes collected on behalf of the City for investment on a timely basis. All parties agree that thus Agreement will not be construed to lengthen the time period during which the COUNTY or the ASSESSOR/COLLECTOR may hold such funds before payment to the City. IX REFUNDS Refunds will be made by the ASSESSOR/COLLECTOR except as set forth herein. The ASSESSOR/COLLECTOR will advise the City of changes in the tax roll which were mandated by the Tarrant Appraisal District. The ASSESSOR/COLLECTOR will not make refunds on prior year paid accounts unless the prior year paid accounts for the past five (5) years are provided to the ASSESSOR/COL LECTOR. All refunds of overpayments or erroneous payments due, but not requested, and as described in Section 31.11 of the Texas Propert Tax Code, will after fluee years from the date of payment, be proportionately disbursed to those entities contracting with the ASSESSOR/COL.LECTOR. The contract must have been in force, actual assessment and collection functions begun and the tax account was at the time of the over or erroneous payment within the City's jurisdiction The proportional share is based upon the City's percent of the tax account's total levy assessed at the time of receipt of the over or erroneous payment. X. DELINQUENT COLLECTIONS The ASSESSOR/COLLECTOR will assess and collect the collection fee pursuant to Sections 33.07, 33,08 and 33.48 of the Property Tax Code, when allowed. The ASSESSOR/COLLECTOR will collect attorney fees that are specified by the City through written agreement with a delinquent collection Attorney The ASSESSOR/COLLECTOR will disburse the amount directly to the City for compensation to a Firm under contract to the City. If the delinquent collection Attorney contracted by the City requires attendance of ASSESSOR/COLLECTOR personnel at a court other than the District Courts in downtown Fort Worth, and the COUNTY is not a party, the employee's expenses and proportionate salary will be the responsibility of the City and will be added to the collection expenses and charged to the City. The ASSESSOR/COLLECTOR will not be responsible for the collection of prior year delinquent accounts unless all delinquent accounts information is provided to the ASSESSOR/COLLECTOR. XI TERM OFAGREEMENT This Agreement shall become effective as of the date hereinabove set out, and shall continue in effect during the 2004 tax year, unless sooner terminated by providing sixty (60) day written notice, as outlined in paragraph XII. XIL NOTICES Any notices to be given hereunder by either party to the other may be effected, in writing, either by personal delivery or by mail, registered or certified, postage prepaid with return receipt requested, Mailed notices shall be addressed to the address of the parties as they appear in the introductory paragraph of this Agreement, but each party may change this address by written notice in accordance with thus paragraph XUL MISCELLANEOUS PROVISIONS This instrument hereto contains the entire Agreement between the parties relating to the rights herein granted and obligations herein assumed. Any oral representations or modifications concerning this instrument shall be of no force or effect. This Agreement shall be construed under and in accordance with the laws of die State of Texas, and all obligations of the parties created hereunder are performable in Tarrant County, Texas This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives and successors, In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or enforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained. This Agreement and the attachments hereto constitutes the sole and only agreement of the parties hereto and supersedes any prior understandings or written or oral agreements between Hre parties respecting the within subject matter. Executed on the day and year first above written, Tarrant County, Texas BETSY PRICE DATE TAX ASSESSORICOLI.ECTOR TARRANT COUNTY FOR THE CITY OF SOUTHLAKE: BY. TITLE: FOR TARRANT COUNTY.' BY.• TOM VANDERGRIFF DATE TARRANT COUNTYJUDGE APPROVED AS TO FORM *AND CONTENT DISTRICT ATTORNEY'S OFFICE DATE -By law, the District Attorney's Office may only advise or approve contracts or legal documents on behalf of its clients, it may not advise or approve a contract or legal document on behalf of other parties. our review of this document was conducted solely from the legal perspective of our client. Our approval of this document was offered solely for the benefit of our client Other parties should not rely on this approval, and should seek review and approval by their own respective attorney(s).