Agenda Packet_2024-07-16 (Revised)

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DocuSign Envelope ID:9822D5D4-600B-4A67-B07F-02E780760E1B in a professional and courteous manner. 2.3 Prepare and submit to the CDTFA information for the purpose of correcting any identified allocation errors, and follow-up with individual businesses and the CDTFA to promote recovery by the City of back or prospective quarterly payments that may be owing. 2.4 If,during the course of its audit,HdL finds businesses located in the City's jurisdiction that are properly reporting sales and use tax but have the potential for modifying their operation to provide an even greater share to City, HdL may so advise City and collaborate with those businesses and City to encourage such changes. 3. TRANSACTIONS TAX ECONOMIC ANALYSIS/FORECASTING SERVICES/REPORTS 3.1 HdL shall establish a database containing all applicable Department of Tax and Fee Administration (CDTFA)registration data for each business within the Measure "X" District boundaries holding a seller's permit account. Said database shall also identify the quarterly transactions and use tax allocations under each account for the most current and previous quarters where available. 3.2 HdL shall provide updated reports each quarter identifying changes in allocation totals by individual businesses, business groups and by categories. Quarterly aberrations due to State audits, fund transfers, and receivables, along with late or double payments, will also be identified.Quarterly reconciliation worksheets to assist finance officer with budget forecasting will be included. 3.3 HdL shall advise and work with City staff on planning and economic questions related to maximizing revenues, preparation of revenue projections and general information on transactions and use tax questions. 3.4 HdL shall make available to City the HdL proprietary software program and Measure "X" database containing all applicable registration and quarterly allocation information for City business outlets registered with the Department of Tax and Fee Administration. The database will be updated quarterly. 4. DEFICIENCY/ALLOCATION REVIEWS AND RECOVERY 4.1 HdL shall conduct on-going reviews to identify and correct unreported transactions and tax payments and distribution errors thereby generating previously unrealized revenue for the City. Reviews shall include: a. Comparison of county-wide local tax allocations to transactions tax for brick and mortar stores and other cash register-based businesses, where clearly all transactions are conducted on-site within the Measure "X" City boundaries, and therefore subject to transactions tax. b. Review of any significant one-time use tax allocations to ensure that there is corresponding transaction tax payments for taxpayers with nexus within the City boundaries. c. Review of state-wide transactions tax allocations and patterns to identify any obvious errors and omissions. d. Identification and follow-up with any potentially large purchasers of supplies and equipment (e.g. hospitals, universities, manufacturing plants, agricultural operations, refineries) to ensure that their major vendors are properly reporting corresponding transactions tax payments to the Measure"X"Transactions Tax District. 4.2 HdL will initiate, where the probability of an error exists, contacts with the appropriate taxpayer management and accounting officials to verify whether current tax receipts accurately reflect the local sales activity. Such contacts will be conducted in a professional and courteous manner so as to enhance City's relations with the business community. 4.3 HdL shall prepare and submit to the Department of Tax and Fee Administration all information necessary to correct any allocation errors and deficiencies that are identified and shall follow- City Council 23 — 15 7/16/2024