TO: Honorable Mayor and Members of the City Council
FROM: Paul Young, Finance Director
SUBJECT:
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A Resolution Authorizing Examination of Transactions & Use Tax Records, & Agreement with Hinderliter, De Llamas, & Associates (HdL)
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RECOMMENDED COUNCIL ACTION:
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1. Adopt Resolution No. 17-2026 authorizing HdL to examine transactions and use tax records, and
2. Authorize the City Manager to sign the agreement for transactions tax audits & information services with HdL.
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SUMMARY:
As a result of the passage of Measure S, HdL needs a new agreement to provide transactions and use tax updates and audit services, relating to the new one-cent sales tax. The attached resolution and agreement allow HdL to provide these services.
PREVIOUS COUNCIL ACTION:
On August 19, 2003, the Council approved Resolution 45-2003, Authorizing HdL to examine sales and use tax records for the one-cent sales tax collected for the City.
On January 06, 2015, the Council approved Resolution 2-2015, Authorizing HdL to examine sales and use tax records for the quarter-cent sales tax collected for the City.
DISCUSSION:
As part of the required documents for implementation of the new sales tax, the California Department of Tax and Fee Administration will need an updated Resolution for Examination of Confidential Records. An update to our contract with HdL will also be required to complete this request.
As stated in the attached agreement, HdL charges the City an increase of $300.00 per month for adding the new street sales tax to their quarterly updates to the City. Additionally, HdL will charge 25% of audit recovery amounts for the new sales tax.
CITY FISCAL IMPACT:
Click or tap here to enter fiscal impact summary.
ATTACHMENTS:
1. Agreement for transactions, tax audit & information services
CITY COUNCIL RESOLUTION NO. 17-2026
A RESOLUTION OF THE CITY OF RED BLUFF
AUTHORIZING EXAMINATION OF TRANSACTIONS AND USE TAX RECORDS
WHEREAS, on June 02, 2026, of the electorate of the City of Red Bluff passed Measure S, a one-cent transactions and use tax (TUT) (1%); and
WHEREAS, pursuant to Ordinance Number 1030 and Street Safety, Maintenance, and Road Tax Citizen Initiative (Measure S) of the City of Red Bluff (City), and Revenue and Taxation Code section 7270, the District entered into a contract with the California Department of Tax and Fee Administration (Department) to perform all functions incident to the administration and collection of sales or transactions and use taxes; and
WHEREAS, the City Council of the City of City of Red Bluff deems it desirable and necessary for authorized officers, employees and representatives of the City to examine confidential sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected by the Department for the City pursuant to that contract; and
WHEREAS, Section 7056 of the California Revenue and Taxation Code sets forth certain requirements and conditions for the disclosure of Department records, and Section 7056.5 of the California Revenue and Taxation Code establishes criminal penalties for the unlawful disclosure of information contained in, or derived from, the sales or transactions and use tax records of the Department;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RED BLUFF HEREBY RESOLVES AS FOLLOWS:
Section 1. That the City Manager, Finance Director, Assistant Finance Director, and Community Development Director or other officer or employee of the City designated in writing by the City Manager to the California Department of Tax and Fee Administration is hereby appointed to represent the City with authority to examine sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department pursuant to the contract between the City and the Department.
Section 2.
The information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use tax by the Department pursuant to that contract, and for purposes related to the following governmental functions of the City:
(a) City Administration
(b) Revenue Management and Budgeting
(c) Community and Economic Development
The information obtained by examination of Department records shall be used only for those governmental functions of the City listed above.
Section 3. That Hinderliter, de Llamas & Associates is hereby designated to examine the sales or transactions and use tax records of the Department pertaining to sales or transactions and use taxes collected for the City by the Department. The person or entity designated by this section meets all of the following conditions, which are also included in the contract between the City and Hiderliter, de Llamas & Associates:
a) has an existing contract with the City to examine those sales or transactions and use tax records;
b) is required by that contract to disclose information contained in, or derived from, those sales or transactions and use tax records only to the officer or employee authorized under Section 1 of this resolution to examine the information.
c) is prohibited by that contract from performing consulting services for a retailer during the term of that contract;
d) is prohibited by that contract from retaining the information contained in or derived from those sales or transactions and use tax records, after that contract has expired.
BE IT FURTHER RESOLVED that the information obtained by examination of Department records shall be used only for purposes related to the collection of City sales or transactions and use taxes by the Department pursuant to the contract between the City and the Department and for those purposes relating to the governmental functions of the City listed in section 2 of this resolution.
Section 4. That this resolution supersedes all prior resolutions of the City Council of the City of Red Bluff adopted pursuant to subdivision (b) of Revenue and Taxation Code section 7056.
Introduced, approved and adopted this _________day of___________________ 20___.
ATTEST: (s) ___________________________ (s) ____________________________
Deputy City Clerk Mayor's Signature
I, ____________________, City Clerk of the City of _______________________, California, DO HEREBY CERTIFY that the foregoing resolution was duly introduced, approved and adopted by the City Council of the City of _______________________, at a regular meeting of said Council held on the ________ day of ________________, 20___, by the following roll call vote:
Ayes: (Names of Councilmembers)
Noes: (Names of Councilmembers)
Absent: (Names of Councilmembers)
(s) _______________________________
Deputy City Clerk