CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
8/14/2023
1 SUBJECT:
Rescind the Resolution No. 04-2023 and Adopt a Resolution Authorizing Hinderliter de Llamas and Associates DBA HdL Companies to Examine Confidential Information for the City of Pacifica Transactions and Use Tax.
RECOMMENDED ACTION:
Rescind the Resolution No. 04-2023 and Adopt a New Resolution to Authorize Hinderliter de Llamas and Associates DBA HdL Companies to Examine Confidential Information Related to the City of Pacifica Transactions and Use Tax approved by Pacifica voters on November 8, 2022.
STAFF CONTACT:
Yulia Carter, Assistant City Manager
650-738-7402
[email protected]
BACKGROUND/DISCUSSION:
On November 8, 2022 a General Election was held where a majority of voters approved an Ordinance to establish a ½ Cent Transactions and Use Tax (TUT) in the City of Pacifica.
On January 9, 2023, the City Council authorized the City Manager to execute agreements with California Department of Tax and Fee Administration (CDTFA) to set up, administer and operate the TUT Ordinance. The Council also approved a resolution authorizing HdL Companies, the City’s tax consulting firm to Examine Confidential Tax records for the purposes of audit.
The ½ Cent Transactions and Use Tax went into effect on April 1, 2023, and the tax quarter that ended on June 30, 2023 should have the first allocation of the TUT tax available to review now.
On August 8, 2023, the City was informed by the HdL that CDTFA notified them that they would require a corrected resolution that would spell out HdL as Hinderliter de Llamas and Associates DBA HdL Companies.
Although, the HdL Companies is the correct legal name according to the Secretary of State Records and stated as such on their website, the CDTFA insisted that the resolution must match the contract language and include the corrected spelling for them to allow HdL to examine the sales, transactions and use tax records.
Therefore, staff recommends that the Council approves a resolution rescinding the Resolution No. 04-2023 and authorizing Hinderliter de Llamas and Associates DBA HdL Companies to examine confidential transaction and use tax records.
FISCAL IMPACT:
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There is no fiscal impact related to this action.
ORIGINATED BY:
City Manager's Office
ATTACHMENT LIST:
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RESOLUTION NO. ____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA RESCINDING THE RESOLUTION NO. 04-2023 AND AUTHORIZING EXAMINATION OF SALES OR
TRANSACTIONS AND USE TAX RECORDS
WHEREAS, the City of Pacifica (City) has previously entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of sales and use taxes; and WHEREAS, pursuant to Revenue and Taxation Code section 7270, the City entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of transactions and use taxes; and
WHEREAS, the City Council of the City of Pacifica deems it desirable and necessary for authorized officers, employees, and representatives of the City to examine confidential sales or transactions and use tax records of the Department pertaining to sales or transactions and use collected by the Department 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 Department records, and Section 7056.5 of the California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales or transactions and use tax records of the Department;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PACIFICA HEREBY RESOLVES AS FOLLOWS:
Section 1. That the City Manager, Assistant City Manager, Deputy Finance Director, Economic Development Manager, Management Analyst, or other officer or employee of the City designated in writing by the City Manager to the California Department of Tax and Fee Administration is hereby appointed to represent the City with authority to examine sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department pursuant to the contract between the City and the Department.
Section 2. The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to that contract, and for purposes related to the following governmental functions of the City:
(a) Budget Preparation, Revenue Estimates and Financial Reporting (b) Economic Development Analysis and Reporting
The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above.
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Section 3. That Hinderliter de Llamas and Associates DBA HdL Companies is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the Hinderliter de Llamas and Associates DBA HdL Companies :
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 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;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to the contract between the City and the Department and for those purposes relating to the governmental functions of the City listed in section 2 of this resolution.
Section 4. That Hinderliter de Llamas and Associates DBA HdL Companies is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to any petition or appeal for the reallocation/redistribution of sales or transactions and use taxes that was filed by Hinderliter de Llamas and Associates DBA HdL Companies on behalf of the City pursuant to the contract between the Hinderliter de Llamas and Associates DBA HdL Companies and City. The entity designated by this section meets all of the following conditions, which are also included in the contract between the City and the Hinderliter de Llamas and Associates DBA HdL Companies.
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 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;
d) is prohibited by that contract from retaining the information contained in, or derived from those sales or transactions and use tax records, after that contract has expired.
Section 5. That this resolution supersedes all prior resolutions of the City Council of the City of Pacifica adopted pursuant to subdivision (b) of Revenue and Taxation Code section 7056. • • • • •
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on August 14, 2023, by the following vote:
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AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
CITY OF PACIFICA
_________________________________
Tygarjas Twyrls Bigstyck, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ _________________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney