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CITY OF
NEWPORTFBEACH
City Council Staff Report
Agenda Item No. 6
November 27, 2012
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Finance Department
Dan Matusiewicz, Director
949 - 644 -3126, danm @newportbeachca.gov
PREPARED BY: Evelyn Tseng, Revenue Manager
APPROVED: A
TITLE: Authority to Provide Data for Sales and Use Tax Analysis and
Recovery of Revenue
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The City has contracted with Hinderliter, de Llamas & Associates ( "HdL ") to provide
sales and use tax analysis and revenue recovery services. Staff is asking Council to
approve the attached resolution allowing HdL access to the State Board of Equalization
( "SBOE ") database in order to perform such analysis and recovery services.
RECOMMENDATION:
Adopt Resolution No. 2012- 108 authorizing Hinderliter, de Llamas & Associates HdL
access to confidential taxpayer records.
FUNDING REQUIREMENTS:
There is no fiscal impact related to this item.
DISCUSSION:
HdL is currently under contract with the City to provide sales and use tax analysis,
identify errors and omissions which may have resulted in deficient payments to the City,
detect misallocations and prepare documentation to the SBOE to recover revenue. To
accurately perform these services, HdL must have access to available sales tax data
which is considered confidential information by the Revenue and Taxation Code
( "RTC'). RTC Section 7056 authorizes the SBOE to provide access to confidential
records under specific conditions, provided the City Council has entered into a contract,
Authority to Provide Data for Sales and Use Tax Analysis and Recovery of Revenue
November 27, 2012
Page 2
meeting the requirements of RTC Section 7056(b) and adopts a resolution authorizing a
person designated by the resolution to access such records.
HcIL is compensated on a contingent fee recovery basis, not to exceed $120,000. No
additional appropriation is required.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act ( "CEQA ") pursuant to Section 15060(c)(3) (the activity is not
a project as defined in Section 15378) of the CEQA Guidelines, California Code of
Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical
change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
Submitted by:
Dan Matusiewicz
Finance Director
Attachment: Resolution — Authorize HdL Access to Tax Records and Documents
Pursuant to California Revenue and Taxation Code Section 7056(b)
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RESOLUTION NO. 2012-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT
BEACH FOR ACCESS TO TAX RECORDS AND DOCUMENTS
PURSUANT TO CALIFORNIA REVENUE & TAXATION CODE
SECTION 7056(b)
WHEREAS, the City has retained the firm of Hinderliter, de Llamas & Associates
( "HdL ") to provide sales and use tax analysis, identify errors and omissions which may
have resulted in deficient payments to the City, detect misallocations and prepare
documentation to the State Board of Equalization ( "SBOE ") to recover revenue; and
WHEREAS, HdL requires access to the City's sales tax data in order to provide
such analysis; and
WHEREAS, Section 7056(b) of the Revenue and Taxation Code ( "RTC ")
provides, in pertinent part, that "When requested by resolution of the legislative body of
any ... city ... the board [SBOE] shall permit any duly authorized ... person designated
by that resolution, to examine all of the sales or transactions and use tax records of the
board pertaining to the ascertainment of those sales or transactions and use taxes to be
collected for the ... city ... "; and
WHEREAS, City wishes to provide access to all such tax records otherwise
confidential under RTC Section 7056 to certain staff at HdL.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as
follows:
1. Pursuant to RTC Section 7056(b), the City hereby provides and requests the
SBOE to provide access to the staff working with HdL on the sales and use tax
analysis to examine and use all confidential records and data of the SBOE
pertaining to the ascertainment of the sales and use taxes collected or to be
collected by the SBOE that are the subject of the sales and use tax analysis.
2. To identify each person to whom access to records is to be provided pursuant to
RTC Section 7056(b), the Finance Director shall maintain a list of all staff
members of HdL who will be given such access pursuant to this Resolution;
3. Pursuant to RTC Section 7056(b)(1), the City hereby certifies that:
A. The City has an existing contract with HdL to examine the aforementioned
sales and use tax records to effectively advise the City;
B. The City's contract with HdL requires that HdL shall disclose confidential
taxpayer information contained in, or derived from, the aforementioned
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sales or transaction and use tax records only to officers, employees or
other duly authorized representatives of the City.
C. Under the City's contract with HdL, all staff members of HdL are prohibited
from providing California state sales and use tax consulting services to
any retailer during the term of the City's contract with HdL.
D. Under the City's contract with HdL, HdL is prohibited from retaining the
confidential taxpayer information contained in or derived from the
aforementioned sales and use tax records after that contract has
terminated.
4. The records and information to be provided to HdL shall be used solely for the
purpose of providing sales and use tax analysis, identifying errors and omissions
which may have resulted in deficient payments to the City, detecting
misallocations and preparing documentation to the SBOE, and for no other
purpose, and shall be returned to the City after the contract has terminated.
NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows:
Section 1: This Resolution shall take effect immediately upon its adoption by the City
Council and the City Clerk shall certify the vote adopting the resolution.
Adopted this day of November, 2012.
ATTEST:
Leilani I. Brown
City Clerk
Nancy Gardner
Mayor
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