Oxnard committee recommends $64,155 appropriation, addendum for sales-tax audit contract

The Oxnard Finance and Governance Committee on Feb. 25 voted 3-0 to recommend that the City Council approve an addendum to agreement No. 7748-17-FN and a budget appropriation of $64,155 from General Fund 101 to pay sales tax audit services.

Finance staff told the committee the payment covers consultant work that began before the consultant's contract expired and resulted in sales-tax reallocations and recoveries that were finalized after the contract ended. Under the original contract terms (Exhibit B), consultants are entitled to a fee on recovered revenues from back-quarter reallocations and monies received in the first eight consecutive reporting quarters following completion of an allocation audit. Staff said the $64,155 appropriation represents the consultant's final payment under those terms.

A Finance Department representative explained that sales-tax audit firms are authorized by the city to access California Department of Tax and Fee Administration (CDTFA) data under a council resolution. Consultants review statewide reporting, identify misallocations or inconsistencies in how transactions are reported to the state, and submit correction requests or claims to the CDTFA on the city's behalf. When those requests succeed and the state reallocates funds to Oxnard, the consultant and the city share the recovery according to contract terms.

Committee members asked for clarity about the process and timing. Finance staff said the reviews and appeals to the CDTFA can take months; in this case the consultant began work while the contract was active and recoveries were received after the contract expired. The contract language permits payment for recoveries realized in the first eight reporting quarters following completion of the audit activity referenced in the agreement. Staff also told the committee the city has since retained a different firm for ongoing sales-tax audit services.

A staff member noted the council previously adopted a resolution authorizing consultants to access taxpayer data for this purpose; the access and the contracts are regulated and require council authorization. The committee voted to forward the addendum and appropriation to the City Council for consideration.

The staff report lists the agreement number (7748-17-FN). The vendor name in the committee agenda text appears as written in the report; the committee discussed an earlier HDL contract in the record and that a different firm is now performing the services. The staff report and contract attachment (Exhibit B) define the compensation terms discussed in the meeting.