Agenda Packet_2024-07-16 (Revised)

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DocuSign Envelope ID:9822D5D4-600B-4A67-B07F-02E780760E1B provided all requested documents and has provided HdL with remote access to the POS system for purposes of running sales reports. This timing will allow HdL's auditors to familiarize themselves with the business' POS system and general sales figures so as to develop a list of specific issues,questions or concerns to be investigated during the site visit. 3.4 Prior to the site visit, HdL shall provide the operator with a questionnaire regarding the business' reporting, internal controls and inventory tracking. The questionnaire shall be developed in coordination with the City to ensure that any specific topics desired by the City are included. Reponses to the questionnaire shall be verified during the site visit. If HdL identifies any issues of fiscal non-compliance during the site visit, the information shall be recorded and incorporated into the audit. Depending upon the nature of the issue, HdL may also advise the business of recommended best practices for improved compliance. 3.5 The cost for this service includes all of the following: a. Scheduling and coordination of the site visit with the permittee and City staff. b. Fiscal compliance site visit to ensure that each business complies with all City reporting and remitting requirements and related regulatory protocols for all of the following: • Point of Sale(POS)inventory control • Accurate books and records maintained for a minimum of 5 years • A complete set of books,invoices,sales records,bills,bank statements and all other necessary records • Any other items as may be requested by the City c. Preparation of a supplemental report to be incorporated into the cannabis business license tax audit under Task 2. The report shall detail any findings of the site visit and provide recommendations for changes or improvements to the business' reporting, record-keeping and inventory tracking practices where needed. d. All travel costs associated with the inspection. e. All phone,email and other communications involved in preparing for, scheduling and coordinating the inspections and providing the report. f. The cost for this service assumes that all site visits would be scheduled consecutively to minimize travel time and expense. This cost does not include any follow-up site visits,re-inspection or review of any supplemental documents provided to address or contest any findings of fiscal non-compliance,nor does it include any assistance with the appeal of any enforcement action by the City. Any costs associated with such additional services would be billed at HdL's hourly rate. 4. TECHNICAL ASSISTANCE AND SUBJECT MATTER EXPERTISE(OPTIONAL) 4.1 HdL may provide additional hours of general consulting to be utilized on an as-needed basis at the City's request. Such assistance may include technical assistance, subject matter expertise, education, participation in conference calls,responding to staff inquires via phone and email, reviewing staff reports to the City Council,assisting with responses to inquiries from the public, or other issues as may be requested by the City. SECTION 11: FEES &CHARGES 1. BIANNUAL MARKET ANALYSIS AND REVENUE ESTIMATES 1.1 Assumes 2 biannual reports per year at $12,000 each, with an estimated cost of$24,000 per year. City Council 23 —24 7/16/2024