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Committee explores business-license audits; county offers recovery-based option
Summary
Staff reported the county would perform business-license audits for a share (half) of recovered past-due revenue but recommended limiting audits to locally based businesses and short‑term rentals; staff will seek private-firm proposals and provide revenue schedules for further budget analysis.
The committee discussed options to audit business-license compliance and generate recoveries. County staff offered to perform audits and take half of any retrospective recovery as payment; the county recommended limiting audits to businesses physically based within the city and to short‑term rentals (STRs) because auditing out‑of‑town businesses is impractical.
Staff said short‑term rental license revenues total about $145 million in reported gross receipts and business-license-reported revenue totaled over $400 million, figures invoked to show the scale and the need for revenue‑assurance analysis. The county estimated it could audit up to 10% of licenses but cautioned that auditing that volume would stretch its resources; the county typically focuses on a manageable sample (staff suggested 10% would be challenging but potentially feasible for locally based businesses and STRs).
The alternative is to solicit a private auditing firm; staff reported mixed experiences from other municipalities, with private firms sometimes recovering little net revenue. The committee asked staff to return with short‑term rental and business-license revenue schedules for Ways & Means review and to solicit proposals from private firms to compare costs and likely recoveries before committing funding (the proposed budget line for next year includes $25,000 for audits).
