HomeMy WebLinkAboutUnbudgeted Expenditure - Additional Appropriation for SalesCI) *(OF HUNTINGTON BEACH % v
MEETING DATE: SEPTEMBER 2, 2003 DEPARTMENT ID NUMBER: AS-03-037
Council/Agency Meeting Held: 3
Deferred/Continued to:
C�Approved I1(Conditionally Approved ❑ Denied City Clerk's Signatufe
Council Meeting Date: SEPTEMBER 2, 2003 Department ID Number: AS-03-037
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P.,WOF& 4W""d- ��REQUEST FOR ACTION
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SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCILl MEMBERS
SUBMITTED BY: RAY SILVER, CITY ADMINISTRATOR t�AV7��
PREPARED BY:. CLAY MARTIN, DIRECTOR OF ADMINISTRATIVE SERVICES
SUBJECT: APPROVAL OF ADDITIONAL APPROPRIATION FOR SALES TAX
AUDITING SERVICES
Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s)
Statement of Issue:
Should the Council approve an additional appropriation for Sales Tax Auditing Services?
Funding Source:
General Fund Unreserved Fund Balance in the amount of $31,000.
Recommended Action:
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Approve appropriation of $31,000 in additional revenue for sales tax auditing serviLe
Alternative Action(s): pc
Do not approve reallocation of revenue.
Analysis:
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The City's sales tax auditing consultant, the HdL Companies, recently completed the
calendar year 2003 first quarter sales tax audit and was able to recapture $205,057.11 in
sales tax revenue for the City. A majority of the revenue $183,867.81 was collected from
Beach Lincoln Mercury. Beach Lincoln Mercury sales tax revenue was being reported to the
City of Costa Mesa. The reason for this error was that same company that owns Beach
H:\RCA's\Sales Tax Audit 2003.dot 8/14/2003 9:46 AM
REQUEST FOR ACTION
MEETING DATE: SEPTEMBER 2, 2003 DEPARTMENT ID NUMBER: AS-03-037
Lincoln Mercury dealership also owns another dealership in Costa Mesa. HdL was able to
determine the sales that occurred at Beach Lincoln Mercury in Huntington Beach and have
the Franchise Tax Board reverse the prior three quarters of sales tax revenue ($205,057.11)
back to the City of Huntington Beach.
Per the City's contract with the HdL Companies they receive 15% of any recovered revenue.
The Administrative Services department has only budgeted $20,000 to cover the annual
contract with the HdL Companies. The current budget will not cover the amount due
regarding the 15% of recovered sales tax revenue from Beach Lincoln Mercury. The HdL
Companies are due $27,580.17 of the $205,057.11 recovered. The total HdL invoice for the
first quarter is $30,758.57. There will be no negative effect on the unreserved general fund
balance, but the budget will increase.
Council Policy Regarding Requests for an Appropriation of Funds:
As adopted by the City Council in March 1998, all requests for appropriation of funds must
meet one of the following criteria: 1) The request is an unanticipated emergency, 2) The
request is required to implement labor negotiations, or 3) The request will be offset by related
new revenues.
The new appropriation being requested is offset by the additional revenue generated by the
sales tax audit.
Attachment(s):
RCA Author: William McReynolds
H:\RCA's\Sales Tax Audit 2003.dot -6- 8/20/2003 9:58 AM
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ATTACHMENT #1
CITY OF HUNTINGTON BEACH
INTERDEPARTMENTAL COMMUNICA TION
To: Ray Silver, City Administrator
From- Clay Martin, Director Of Administrative Services
Subject: FIS 2003-32 Approval of Additional Appropriation for Sales
Tax Auditing Services
Date: August 14, 2003
As required by Resolution 4832, this Fiscal Impact Statement has
been prepared for "Approval of Additional Appropriation for Sales Tax
Auditing Services."
If the City Council approves this request (total appropriation $31,000),
the estimated unappropriated, undesignated General Fund Balance
at September 30, 2002 will be reduced to $2,129,000.
Clay M
Directs
- 3
RCA ROUTING SHEET
INITIATING DEPARTMENT:
ADMINISTRATIVE SERVICES
SUBJECT:
APPROVAL OF ADDITIONAL APPROPRIATION FOR
SALES TAX AUDITING SERVICES
COUNCIL MEETING DATE:
September 2, 2003
RCA ATTACHMENTS
...-.STATUS
Ordinance (w/exhibits & legislative draft if applicable)
Not Applicable
Resolution (w/exhibits & legislative draft if applicable)
Not Applicable
Tract Map, Location Map and/or other Exhibits
Not Applicable
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attorney)
Not Applicable
Subleases, Third Party Agreements, etc.
(Approved as to form by City Attorney)
Not Applicable
Certificates of Insurance (Approved by the City Attorney)
Not Applicable
Financial Impact Statement (Unbudget, over $5,000)
Attached
Bonds (If applicable)
Not Applicable
Staff Report (If applicable)
Not Applicable
Commission, Board or Committee Report (If applicable)
Not Applicable
Findings/Conditions for Approval and/or Denial
Not Applicable
EXPLANATION FOR MISSING ATTACHMENTS
REVIEWED.
RETURNED
FORWARDED
Administrative Staff
r )
Assistant City Administrator (Initial)
( )
)
City Administrator (initial)
( )
)
City Clerk
( )
EXPLANATIO:Nr FOR.,RETURN OF ITEM:
RCA Author: William McReynolds