REPORT TO COUNCIL
SUBJECT
Title
Action on Agreements for Sales, Use, Tax Audit and Recovery Services; Property Tax Audit and Management Services; and Transient Occupancy Tax Audit Services
Report
COUNCIL PILLAR
Manage Strategically Our Workforce Capacity and Resources
BACKGROUND
The City receives revenues from (a) sales, use, and transactions tax, (b) property tax, and (c) transient occupancy tax (TOT). The two largest revenue sources for the City's General Fund are property tax and sales tax with revenues expected to total approximately $67 million and $56 million in FY 2020/21, respectively. The City is projected to receive TOT revenues of approximately $3.6 million in FY 2020/21. This TOT amount, however, is well below the pre-COVID-19 levels of over $20 million, and this revenue source is expected to recover over the next few years.
To ensure that the City is receiving all the revenues from the County of Santa Clara and the State of California, the Finance Department uses third-party consultants to audit tax records and recover misallocated revenues. The current agreements for tax audit and recovery services are expiring on June 30, 2021.
DISCUSSION
In October 2020, the City released a Request for Proposals (RFP) seeking proposals from qualified firms to provide sales, use, and transactions, property, and transient occupancy tax audit and recovery services. Firms were allowed to submit a proposal on any or all of the service elements. The RFP was published on BidSync, the City's e-procurement system. A total of 54 firms viewed the RFP, and three proposals were received as follows:
1. HdL Companies - Submitted a proposal for both Sales, Use and Transactions Tax Audit and Recovery Services and Transient Occupancy Tax Audit Services
2. HdL Coren & Cone (HdLCC) - Submitted a proposal for Property Tax Audit and Management Services only
3. MuniServices, LLC, doing business as Avenu MuniServices LLC (MuniServices) - Submitted a proposal for all services ...
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