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Audit finds $1.8M in additional hotel‑occupancy tax assessments; committee endorses continued collections
Summary
Internal audit identified about $1.8 million in additional hotel‑occupancy tax (HOT) assessments since 2016 and reported $1.1 million past due as of February 2025; the committee accepted the audit and management said it will continue collection efforts including outside counsel when necessary.
The Financial Oversight and Audit Committee accepted an audit of hotel occupancy tax (HOT) accounts receivable that found nearly $1.8 million in additional HOT identified since April 2016 and reported $1.1 million in past‑due HOT as of February 2025.
Liz Nieman, internal auditor, explained the review covered FY 2024 and FY 2025 activity and assessed whether HOT receivables are monitored, invoiced and collected appropriately. Nieman told the committee that 10 hotels owed about $1.1 million in past due HOT, including penalties and interest, and that nine of those hotels had been referred to outside counsel as of February 2025.
Robert Cortinas discussed collection practices and recent recoveries. "We currently utilize an outside collection agency for delinquent accounts and refer hotels for legal action when necessary," Cortinas said, and staff recounted a recent litigation outcome in which the city recovered about $157,000 from a multi‑year arrearage after engaging outside counsel. Cortinas also said the city collects about $14 million in HOT annually.
Committee members asked about the age and distribution of delinquencies. Staff said delinquencies vary, are spread across the city and in most cases are not extremely old; typical delinquency timelines run months to a year, though the audit identified some older balances. Staff committed to provide the committee a breakdown of the $1.1 million showing penalties, interest and the age of each receivable.
Motion and outcome: A committee member moved to accept the audit results; the motion carried unanimously.
Ending: Management said it will continue active collection efforts, work with outside counsel where appropriate and provide the requested breakdown of outstanding balances to the committee.
