SR 05-06-2002 - Laserfiche WebLink

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MEMORANDUM Item ~ 5 TO: Mayor and City Council FROM: Stephen Rohlf, Building and Zoning Administrator DATE: May 6, 2002 SUBJECT: Gravel Audit At last year's joint City Council/Sherburne County Board meeting, both bodies asked staff to consider how to conduct an audit of the various gravel companies mining within the city limits. The purpose of the audit is to check that the appropriate amount of gravel tax is being paid. The County Auditor, County Surveyor and myself pondered how to conduct such an audit for quit a while before agreeing on what we think is the only feasible scheme. We propose developing two sets of contour maps of the seven most active pits in Elk River, which includes at least one pit from ev~'ry current operator. One contour map will show the elevation of each of the seven pits in 1997 and the second will show their elevations in 2000. From these two sets of contour maps the volume of what has been removed during those years can be estimated. These estimated volumes can then be compared to the volumes the gravel companies reported for tax purposes during those same years. A proposal by Howard R. Green Company to conduct this work is attached. The cost projections in the proposal include purchasing the aerial photos needed to develop the maps. The city and county agreed to share the cost of the audit in an amount proportional to the percent of the tax each receives from gravel. The total estimated cost of the project is $30,460. The city's portion will be $9,138. If the Council agrees to go ahead with this project they need to identify a funding source. The most logical source of funds is Council Contingency. Even though staff believes the proposal as outlined above is the best way of checking reported volumes versus actual volume, there are some inherent problems. One problem is that exact volumes cannot be accomplished using just contour maps. A margin of error will have to be factored in, which will probably be at least 10%. In other words, the gravel companies will have had to under report their volumes by a lot before we can confidently call them on it.