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BUSINESS LICENSE, TRANSIENT OCCUPANCY
TAX, SHORT-TERM RENTAL, AND UTILITY USER
TAX SERVICES CONTRACT
City Council
October 24, 2023
Finance Department
RiversideCA.gov
2 BACKGROUND
• November 2020 – HdL partnership initiated to:
– Address high staff turnover & vacancies
– Provide operational stability
– Expand services (TOT audits, Discovery Program, etc.) • Current volume and % of total FY 2022/23 General Fund revenue:
26,000 / 2.7%
Active Business Licenses
25 Hotels / 2.4%
Transient Occupancy Tax
280 Businesses / 9.8%
Utility Users Tax
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3 REVENUE TRENDS
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2018 2019 2020 2021 2022 2023
Fiscal Year Revenue Trends
Transient Occupancy Tax Business License Tax
RiversideCA.gov
4 CITY/HDL PARTNERSHIP
HdL ResponsibilitiesCity Staff Responsibilities
Provide and support business tax software for the
management of business tax functions, online
applications, and payment processing.
Provide in-person customer service at the
City's One Stop Shop at City Hall.
Process business tax renewals.Process new business license applications.
Manage payment processing through HdL
software.
Identify non-compliant businesses (Discovery).
Provide customer service via the business support
number, email and fax.
Monitor, manage, and follow up on
delinquent business accounts (up to 180 days
past due).
Provide collection services for delinquent
accounts greater than 180 days past due.
Support HdL customer service as needed,
including phone support via 311 calls.
Identify Short Term rentals subject to business
license tax (Discovery).
Prepare Business Improvement District
Resolution of Intention & mail notifications.
Process TOT payments and perform TOT audits.
Process UUT payments, provide business support.
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5 OTHER HDL SERVICES
• Business Tax Discovery Program – November 2022
– $448,000 new revenue from property rentals to date
– Paused March 2023 to perform ordinance review, ongoing • Ordinance Review
– Review of RMC 5.04 governing business license tax
– Compare to industry standards, recommendations to update RMC and/or internal practices
• TOT Audits
– 3-year rotation for the City’s 25 hotels
– 10 hotels audited to date; potential revenue unknown – focus is on compliance going forward.
– Audit of next set of 10 hotels began September 2023
RiversideCA.gov
6 Strategic Priority 5: High Performing Government
Goal 5.4: Achieve and maintain financial health by
addressing gaps between revenues and expenditures and
aligning resources with strategic priorities to yield the greatest impact.
Cross-Cutting Threads
STRATEGIC PLAN ALIGNMENT
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7 That City Council:
1. Approve an Agreement for Business License, Transient Occupancy Tax, Short-Term Rental, and Utility User Tax Services with Hinderliter, de Llamas and Associates (HdL), for a one-year term with an option to extend one year, for a not-to-exceed amount of $340,000; and
2. Authorize the City Manager, or his designee, to execute the Agreement, issue a notice of termination when applicable, execute extensions if necessary and subject to the availability of budgeted funds, and to make any other required non-substantive changes.
RECOMMENDATIONS
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