HomeMy WebLinkAbout2008-01-08 - AGENDA REPORTS - TAX AUDITING SERVICES (2)CONSENT CALENDAR
DATE:
SUBJECT:
DEPARTMENT:
Agenda Item: q
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval:
Item to be presented by: Darren Herndndez
January 8, 2008
SALES TAX AND PROPERTY TAX AUDITING SERVICES
Administrative Services
RECOMMENDED ACTION
City Council award a four-year contract,to Hinderliter, de Llamas and Associates (HdL)
Companies for sales tax and property tax analysis in -a total amount of $31,200 and $78,000
respectively, and authorize the City Manager or designee to execute all contract documents, or
modify the award in the event that issues of impossibility of performance arise, subject to City
Attorney approval..
City Council approve and adopt a resolution authorizing Hinderliter, de Llamas and Associates
(HdL) Companies and designated City officers and employees access to Sales and Use Tax
records pursuant to Section 7056 of the State of California Revenue and Taxation Code and
repeal Resolution 04-44.
BACKGROUND
Pursuant to Section 7056 of the State of California Revenue and Taxation Code, the City Council
must request by resolution for the State Board of Equalization to permit any duly authorized
officer or employee of the City, or other person designated by that resolution, to examine all of
the sales or transactions and use tax records of the Board. Section 7056 further requires this
resolution shall certify that any person designated by the resolution, other than an officer or
employee, meets certain legal requirements and conditions.
The City receives sales and use tax revenues based on transactions that occur within the City
limits. A consultant is retained to audit sales and use tax records to ensure sales and use tax
revenues generated within the City are being correctly allocated back to the City. As a result, the
City benefits from previously unrealized sales, use, and transactions tax revenue.
The City also retains consultants to audit and analyze property tax records. Property taxes in
California have evolved into an extremely complex system that requires experience and expertise
to fully monitor. The revenues generated by the property tax system are distributed to a myriad
of taxing entities. The consultant has the technology, methodology, and expertise to ainalyze all
parcels within the City and identify costly errors that have resulted in an inaccurate distribution
of property taxes to other entities, when in fact,, the revenues should have been allocated to the
City.
Under the current and previous contract with MBIA MuniServices, the City received a total of
$21,982,931 in additional sales and use tax revenue that would not otherwise have been realized
In the previous year, the City has collected an additional $1,142,241 in revenue as a result of
these services.
Resolution 04-44 was adopted by City Council on April 27, 2004 authorizing consultant MBIA
Muni Services Company access to the City's Sales and Use Tax records. Prior to MBIA, the City
used HdL. As is the City's practice, every few years staff will explore the marketplace in order
to evaluate the abilities of various private sector firms that provide these types of professional
services.
After thorough evaluation at this time staff recommends that the City return to using HdL for:,
these services.
ALTERNATIVE ACTIONS
Other action as determined by the City Council.
FISCAL IMPACT
Funds for this expenditure, in the amount of $31,200 for sales tax auditing and $78,000 property
tax auditing, have been budgeted in Account 12100-5161.001. The City Council's authorization
to award this contract and to expend $109,200 for these services will cover the entire four-year
term with HdL.
ATTACHMENTS
Resolution
RESOLUTION NO. 08-
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA CLARITA, CALIFORNIA,
DESIGNATING HdL COMPANOES
AS THE AUTHORIZED CITY REPRESENTATIVE
TO EXAMINE SALES AND USE TAX RECORDS
WHEREAS, pursuant to California Revenue and Taxation Code Section 7200, et.seq., the
City of Santa Clarita has adopted a sales and use tax ordinance which imposes a tax and provides
a measure therefore that can be administered and collected by the State Board of Equalization
along the same and existing statutory and administrative procedures followed by the State Board
of Equalization in administering and collecting the California State Sales and Use Taxes; and
WHEREAS, pursuant to California Revenue and Taxation Code Section 7056, the City of
Santa Clarita, by resolution, may designate any officer, employee, or any other person to examine
all of the sales and use tax records of the Board pertaining to sales and use taxes collected for the
City of Santa Clarita; and
WHEREAS, the City of Santa Clarita has entered into an agreement for sales tax audit.and
information services with the firm of HdL 'Companies, to designate HdL Companies as the
authorized Consultant to examine such sales tax records maintained by the Board on behalf of
the City of Santa Clarita; and
WHEREAS, all legal prerequisites prior to the adoption of the Resolution have occurred.
NOW, THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as
follows:
SECTION 1. In all respects as set forth above, the City Council of the City of Santa Clarita
hereby certifies to the State Board of Equalization that HdL Companiesis the designated
representative of the City of Santa Clarita to examine all of the sales and use tax records of the
Board pertaining to sales and use taxes collected by the Board on behalf of the City of Santa
Clarita.
SECTION 2. Pursuant to California Revenue and Taxation Section 7056(b), the City
Council of the City of Santa Clarita certifies that HdL Companies (hereinafter referred to as
"Consultant") meets all of the following conditions:
a. Consultant has an existing contract with the City to examine sales tax records;
b. Consultant is required by that contract to disclose information contained in, or derived
from, those sales tax records only to an officer or employee of the City of Santa Clarita
who is authorized by resolution to examine the information;
c. Consultant is prohibited by the contract from performing consulting services for a
retailer during the term of the contract; and
d. Consultant is prohibited from retaining the information contained in, or derived from,
those sales tax records after the contract has expired.
.SECTION 3. The City Clerk shall certify to the adoption of the Resolution and certify this
record to be a full, true, and correct copy of the action taken.
PASSED, APPROVED AND ADOPTED this day of , 2008.
ATTEST:
CITY CLERK
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ILVARIV •;
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF SANTA CLARITA )
I, Sharon L. Dawson, CMC, City Clerk of the City of Santa Clarita, do hereby certify
that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at
a regular meeting thereof, held on the day of January 2008, by the following vote of the
City Council:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
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CITY CLERK
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STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL RESOLUTION
I, Sharon L. Dawson, City Clerk of the City of Santa Clarita, do hereby certify that this is a true
and correct copy of the original Resolution No. 08-_, adopted by the City Council of the City
of Santa Clarita, California on 2008, which is now on file in my office.
Witness my hand and seal of the City of Santa Clarita, California, this day of
, 2008.
Sharon L. Dawson, CMC
City Clerk
By
Susan Caputo
Deputy City Clerk
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