Agenda Packet_2024-07-16 (Revised)

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DocuSign Envelope ID:9822D5D4-600B-4A67-B07F-02E780760E1 B EXHIBIT A SALES&USE TAX(BRADLEY-BURNS ALLOCATION)AND TRANSACTIONS&USE TAX (SANTA ANA MEASURE X) SECTION I: SCOPE OF SERVICES 1. SALES AND USE TAX ECONOMIC ANALYSIS/FORECASTING SERVICES/REPORTS 1.1 Identify and advise the City of legislation potentially impacting City revenue, including pending legislation. Hinderliter, de Llamas and Associates ("HdU') may be required to coordinate with the City's contracted federal and state legislative advocacy consultants. 1.2 Establish a special database identifying the name,address,and quarterly allocations of all sales tax producers within the City. This database will be utilized to generate special reports to City on major sales tax producers by rank and category (i.e.,top 100 tax payers), sales tax activity by categories, or business districts, identification of reporting aberrations, and per capita and outlet comparisons with regional and statewide sales. 1.3 Provide periodic updated reports to City identifying changes in sales by individual businesses, business groups and categories, and by geographic area. These reports may include, without limitation,quarterly aberrations due to State audits,fund transfers,and receivables,along with late or double payments, and quarterly reconciliation worksheets to assist with budget forecasting. HdL shall meet quarterly by in person or virtually with City. 1.4 Shall additionally provide following each calendar quarter a summary analysis for City to share with Council Members, Chamber of Commerce, other economic development interest groups and the public that analyze City's sales tax trends by major groups and geographic areas without disclosing confidential individual tax records. 1.5 Establish a special database with California Department of Tax and Fee Administration ("CDTFA') registration data for businesses within applicable district boundaries holding sellers' permit accounts. 1.6 Periodically license for the limited,non-exclusive,non-transferable use by City's staff certain of HdL's web-based sales, use and/or transactions tax program(s) containing sellers permit, registration, allocation and related information for business outlets within City's jurisdiction registered with the CDTFA. 1.7 Provide periodic updated reports endeavoring to identify and assist with budget forecasting(i) changes in allocation totals by individual businesses, business groups and categories, and(ii) aberrations due to State audits, fund transfers, and receivables, along with late or double payments. 2. ALLOCATION AND AUDIT RECOVERY SERVICES 2.1 Conduct (when mutually agreed with City) initial and on-going sales and use tax audits of businesses to help identify and correct distribution and allocation errors, and to proactively affect favorable registration, reporting or formula changes thereby generating previously unrealized sales and use tax income for the City and/or recovering misallocated tax from registered taxpayers. Common errors that will be monitored and corrected include but are not limited to: transposition errors resulting in misallocations;erroneous consolidation of multiple outlets; formula errors; misreporting of "point of sale" to the wrong location; delays in reporting new outlets; misallocating use tax payments to the allocation pools or wrong jurisdiction; and erroneous fund transfers and adjustments. 2.2 Initiate contacts with the CDTFA and sales management and accounting officials in companies that have businesses where a probability of error exists to endeavor to help verify whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted City Council 23 — 14 7/16/2024