An Avenu Webinar Series

October 25th, 2018

Digital Government Strategies that Lower the Cost of Revenue Management

Click to edit Master title styleBrennan Middleton

Marketing Manager, Avenu

Christy CatoVice President, Avenu

Jeff DownesCity Manager, Vestavia Hills, Alabama

Today’s Guest Speakers:

Presentation Agenda

• Who is Avenu?

• A Day in the Life of Government: Operational Challenges

• Case Study: Vestavia Hills, Alabama

• Processing Revenue Doesn’t Come Free

• Revenue Administration: How Avenu Helps

• Handling Delinquency

• Maintaining Local Control

• Q&A Session

• Special Offer

Who is Avenu Insights & Analytics?

Discovery & Recovery

Reveal and claim new/untapped revenue sources

Compliance Auditing

Identify and address patterns of noncompliance

Data & Analytics

Support revenue enhancement through proprietary technology and access to multiple data sources

Administration

Process revenue using streamlined tasks and scalable human resource support

• Ongoing balanced budget requirements; $1.5 trillion spent, $1.6 trillion collected in 2015

• High expectations for government services

• Never enough resources for competing priorities

• Retirements and knowledge transfer

• Older technology and manual processes

A Day in the Life of Government

More use of cloud (67%)

More mobility (54%)

Big data (30%)

Cybersecurity (43%)

Social media (54%)

Local Government & Use of Technology in 2020

“During the hard times, we focused on maintaining what we had and put off new initiatives.”

“There have been tremendous changes in the last five to seven years and the role [technology] has come to take in people’s lives. People are only now learning the value of technology.”

*Data from American City & County article: Future Forecast: Government Technology in 2020 by Robert Barkin

The Struggles of Revenue Management

• High volume of business license taxes and fees processed in short time

• Ongoing processing for other business taxes and fees

• Sales, property, utility, gas, hotel, alcohol, tobacco, sugar-sweetened beverage, franchise fees, etc.

• Hidden costs of printing and mailing licenses

• Need for reporting and analysis

So how are municipalities combating these challenges?

Case Study:Vestavia Hills, Alabama

Case Study: Vestavia Hills, Alabama

City Snapshot

• Population: 34,500

• Government employees: 325

• General fund: $44.3M

• 1 of ~ 35 municipalities in Alabama

• 3rd largest city in Jefferson county

• Not a commercial/industrial hub

• Services and goods are supportive

of main household needs

National Trends

Rising operational costs paired with downward trends on municipal revenue puts pressure on cities.

Case Study: Vestavia Hills, Alabama

Unlike the national average, Vestavia Hills has ‘bucked’ the trend.

We re-evaluated our

administrative functions and

saw an opportunity to collect

More revenue.

More efficiently.

How?

Case Study: Vestavia Hills, Alabama

We recognized that we were static and not experiencing growth.Situation:

Challenge:

Solution:

With multiple jurisdictions, there was sales tax leakage and no strategic plan

After partnering with Avenu 5 years ago, we were able to breakdown each trade area and use that data to inform an economic development plan

Case Study: Vestavia Hills, Alabama

Results: The city was able to fund and focus on economic development more than it ever has in the last 4 years.

New development directly

resulted from Avenu’s:

Data that fed Vestavia Hill’s

economic development strategy

Administrative team’s support in

hundreds of thousands of lost

taxes

Results of Economic Development Planning and Implementation

Case Study: Vestavia Hills, Alabama

• Brought in a few $100,000 of lost sales & use tax

• $1,669,750 recovered since 2004

• 2,927 previously unregistered businesses now pay required taxes and fees

• Creation of level playing field — where all businesses pay fair share

• Credible and uniform enforcement of compliance

Case Study: Vestavia Hills, Alabama

Processing Revenue Doesn’t Come Free

On average, the IRS reports that it costs them $0.41 to collect $100 in taxes, plus overhead expenses.

The cost for a municipality to process these funds? Even more.

Another way to think about your revenue administration? Outsourcing.

• Sales and use taxes

• Business licenses

• Insurance premium taxes

• Alcohol taxes

• Tobacco taxes

• Gasoline taxes

• Sugary beverage tax

• Hotel, motel, and lodging taxes

• Rental and lease taxes

Don’t Shortcut the Process

• Collect and review data on demographics, NAICS codes, payment histories, audit trails, and activity logs

• Code and ordinance review against legislation and regulation

• Structured communication with taxpayers to verify tax liability

• Online file and pay with forms customized to taxing jurisdiction

• Taxpayer education

• Receive remittance

Data Integration Implementation Payment Processes Reporting

Harness Data for Your City

• Initial registry

• Business self-updates

• Taxpayers calls & emails

• Auditing leads

• Taxpayers lists

• Additional data resources

• Demographics

• Liabilities

• NAICS Codes

• Payment History

• Activity Log

• Audit Trail

• Taxpayer Notes

Data Integration & Maintenance Data Components

Understand the Sequence

Current Forms & Municipal Code Review

Taxpayer Data and Setup

Taxpayer Notification

Online Filing Implementation

Begin Processing

Funds

Data Integration Implementation Payment Processes Reporting

The Avenu View

Account Registration

Taxpayer Education & Support

Admin Support

Once taxpayers are registered, Avenu automatically provides forms & instructions necessary for timely calculation, filing, and payment of funds due

To promote voluntary compliance, Avenu provides taxpayers with all of the information necessary for timely and accurate filing, along with prompt and effective customer service

The administrative support team is well-trained to assist all taxpayer inquiries and is highly responsive, answering all calls and returning emails within 30 min

Data Integration ImplementationPayment

ProcessesReporting

Have Flexible Payment Processes

Paper Remittances Online Filing

• Forms mailed to businesses

• Customized

• Taxpayer education and support

• Secure, online portals for convenient and easy taxpayer filing

• Returning users log in with username and password

• FAQs and support links

The Revenue Cycle

Identify discrepancies:

• Underpaids

• Non-filers

• Review of history/trends

Mail forms to businesses from internal

database, municipal history, and lead sources

Receive, post, and reconcile filings and

payments.

Distribute funds to municipality, minus

contractual fee

Generate detailed reporting for municipality

Data Integration ImplementationPayment

ProcessesReporting

Capture the Right Details

➢ Transfer/distribution reports

➢ Daily/weekly/monthly reconciliation reports

➢ Detailed payment reports

➢ History/trends reports

➢ Exportable online reports & query tool

➢ Specialized custom reports upon request

• Mail past-due reminders, followed by courtesy telephone calls

• Offer payment plans with multiple ways to pay

• Withhold business license until paid in full

• Begin collection services, if necessary

Recommendations on Delinquency and Escalation

Maintain Local Control

• Establish central point for filing now before the state does

• Businesses want this, and in some places, have lobbied for it

• Give citizens a good experience

The right technology and process can prevent a state from inserting itself into local taxation.

Avenu processes more than $1 billion a year in taxes and fees for local governments.

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Questions?

Special Offer for Webinar Attendees:

As your partner in revenue administration & our commitment to educating taxpayers and municipalities alike,

Avenu will fund the tuition of a professional development course for a member of your staff upon a new contract signing.

Please send your inquiry to webinars@avenuinsights.com

Learn what Avenu can do for your city.webinars@avenuinsights.com