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HomeMy WebLinkAbout2010/09/14 Item 4 CITY COUNCIL AGENDA STATEMENT . ;~,';6;1''',: ',' {h:::;~ ~\~ CllY OF ~ CHULA VISTA SEPTEMBER 14, 2010, Item~ ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE EXAMINATION OF SALES, USE AND TRANSACTIONS TAX RECORDS BY HINDERLITER DE LLAMAS AND ASSOCIATES SUBMITTED BY: DIRECTOR OF FINANCE/TREASURE~~ CfTY MANAGER M- ASSISTANT ClT~/G:NAGER '77 REVIEWED BY: 4/5THS VOTE: YES D NO I X I SUMMARY On August 17, 2010, City Council approved all agreement between the City and Hinderliter de Llamas and Associates (HdL) for sales and use tax services. Included in these services is the auditing of State Board of Equalization sales, use and transactions tax records. Section 7056 of the California Revenue and Taxation Code requires a resolution authorizing HdL to perform such audits. ENVIRONMENTAL REVIEW The EnvirOlilllental Review Coordinator has reviewed the proposed actIVIty for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 (b) (4) of the State CEQA Guidelines; therefore, pursuant to Section 15060( c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION Council adopts the resolution. 4-1 SEPTEMBER 14,2010, ltemL Page BOARDS/COMMISSION RECOMMENDA nON Not Applicable. DrSCUSSJON Until recently, the City's sales tax consultant was MuniServices, LLC. In addition to perfonning sales tax analysis, the company also audited State Board of Equalization sales tax records for the City. Occasionally, businesses within Chula Vista repOli and pay their sales tax receipts to another jurisdiction in en'or, and once the State Board of Equalization is made aware of the error, a correction would be made and the City would receive the back payments that were due. The consultant's fee was 25% of the amount they would recover for the City. On August 17, 2010, City Council approved an agreement with a new consultant, HdL, to perform similar services. The State Board of Equalization requires a resolution adopted by City Council giving HdL the authority to examine and verify sales, use and transaction records in order to perform these audits on the City's behalf. HdL's fee is 15% of the amount they recover for the City. In order to allow HdL access to the Board's records on the City's behalf, the Council must adopt a resolution in compliance with Califomia Revenue & taxation Code Section 7056. The attached resolution meets this requirement. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section I 8704.2(a)(1 ) is not applicable to this decision. CURRENT YEAR FISCAL IMPACT There is no current fiscal impact as the costs for the auditing program are offset by the revenues recovered. ONGOING FISCAL IMPACT There is no ongoing fiscal impact as the costs for the auditing program are offset by the revenues recovered. Prepared by Nadine A/andery, Treaswy lHanager. Finance 4-2 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING EXAMINATION OF SALES, USE AND TRANSACTIONS TAX RECORDS BY HINDERLITER DE LLAMAS AND ASSOCIATES WHEREAS, pursuant to Ordinance 3 I 23, the City of Chula Vista entered into a contract with the State Board of Equalization to perform all functions incident to the administration and collection of local sales, use and transactions taxes; and WHEREAS, the City Council of the City ofChula Vista deems it desirable and necessary for authorized representatives of the City to examine confidential sales, use and transactions tax records of the State Board of Equalization pertaining to sales, use and transactions taxes collected by the Board for the City pursuant to that contract; and WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Board of Equalization records, and establishes criminal penalties for the unlawful disclosure of information contained in, or derived trom. the sales, use and transactions tax records of the Board. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA HEREBY RESOLVES AS FOLLOWS: Section 1. That the City Manager, or other ot11cer or employee of the City designated in writing by the City Manager to the State Board of Equalization (hereafter referred to as Board), is hereby appointed to represent the City of Chula Vista with authority to examine sales, use and transactions tax records of the Board pertaining to sales, use and transactions taxes collected for the City by the Board pursuant to the contract between the City and the Board. The information obtained by examination of Board records shall be used only for purposes related to the collection of City sales, use and transactions taxes by the Board pursuant to that contract. 4-3 Resolution No. Page 2 Section 2. That the City Manager, or other officer or employee of the City designated in writing by the City Manager to the Board, is hereby appointed to represent the City with authority to examine those sales, use and transactions tax records of the Board, for purposes related to the following governmental functions of the City: (a) City administration (b) Revenue management and budgeting (c) Community and economic development (d) Business license tax administration The information obtained by examination of Board records shall be used only for those governmental functions of the City listed above. Section 3. That Hinderliter, de Llamas & Associates is hereby designated to examine the sales, use and transactions tax records of the Board pertaining to sales, use and transactions taxes collected for the City by the Board. The person or entity designated by this section meets all of the following conditions: (a) records; has an existing contract with the City to examine those sales, usc and transactions tax (b) is required by that contract to disclose information contained in, or derived from, those sales, use and transactions tax records only to the otllcer or employee authorized under Sections I or 2 of this resolution to examine the information. (c) is prohibited by that contract from performing consulting servIces for a retailer during the term of that contract; and (d) is prohibited by that contract from retaining the information contained in, or dcrived trom those sales, use and transactions tax records, after that contract has expired. The information obtained by examination of Board records shall be used only for purposes related to the collection of City sales, use and transactions taxes by the Board pursuant to the contract between the City and the Board and for purposes relating to the governmental functions of the City listed in section 2 of this resolution. 4-4 i_ Resolution No. Page 3 Presented by Maria Kachadoorian Director of Finance Approved as to form by '\_/ 4-5