DATE:
February 7, 2023
TO:
Mayor and City Council Members
FROM:
Nils Bentsen, City Manager
BY:
Casey Brooksher, Director of Administrative Services
SUBJECT:
Amendment to Agreement for Sales Tax Analysis and Audit Services
RECOMMENDED ACTION
It is recommended that the City Council approve an amendment to the existing Professional Services Agreement with Hinderliter, de Llamas & Associates (HdL) in the amount of $15,500, for a total not-to-exceed amount of $65,500, for additional sales tax audit services through June 30, 2023.
BACKGROUND
HdL provides sales tax analysis services to the City, with the resulting data utilized in the preparation of the City’s budget, as well as for quarterly budget reviews. Due to the expertise of the firm, HdL also audits the City’s sales tax revenue for possible issues with reporting and allocation errors. If allocation errors are discovered, HdL works with the California Department of Tax and Fee Administration (CDTFA) to recover revenue that should have been remitted to the City. Through the current agreement, which began on July 1, 2020, HdL has recovered approximately $190,000 in sales tax revenue for the City.
It should be noted that HdL also provides cannabis audit services for the City, but the cannabis services contract is separate from the sales tax analysis and audit services referenced above.
ISSUES/ANALYSIS
Sales tax audit costs are incurred when reporting errors are identified and the resulting revenue is recovered for the City. In order to continue sales tax audit services through the remainder of Fiscal Year (FY) 2022-23, an amendment to the existing agreement in the amount of $15,500 is requested. As errors are identified through these audits, the cost of the audit services is recovered through the additional revenue remitted to the City by the CDTFA.
FISCAL IMPACT
The availability of budgetary savings within the General Fund will be reviewed at the conclusion of FY 2022-23. If budget savings are not available, a budget amendment will be requested during the fourth quarter budget review. It should be noted that the additional revenue recovered as a result of the audits will more than offset the cost of the audit services.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
None
City of Hesperia STAFF REPORT City of Hesperia STAFF REPORT City of Hesperia
STAFF REPORT
City of Hesperia
STAFF REPORT
Staff Report to the City Council
Receive and File the Local Agency Special Tax and Bond Accountability Act Report (SB 165) for the Fiscal Year Ended June 30, 2022 December 20, 2022