Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Sandie Arnott, Treasurer - Tax Collector
Subject: Amendment to Agreement with Hinderliter de Llamas and Associates
RECOMMENDATION:
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Adopt a resolution waiving the competitive solicitation process and authorizing an amendment to agreement with Hinderliter de Llamas and Associates to provide Transient Occupancy Tax and Vehicle Rental Business License Tax administrative and audit services extending the term through June 30, 2026, and increasing the amount by $215,000 to an amount not to exceed $410,000.
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BACKGROUND:
On July 1, 2022, the San Mateo County Treasurer-Tax Collector’s Office entered into an agreement with Hinderliter de Llamas and Associates (HDL) to provide Transient Occupancy Tax (TOT) and Vehicle Rental Business License Tax (VRBLT) administrative and audit services for the term July 1, 2022, through June 30, 2024 with an amount not to exceed $195,000.
HDL offers the most comprehensive services for TOT and VRBLT collections, which no other vendor can provide. HDL has been providing audit services for the County since July 2020, to ensure compliance with local taxation regulations as defined in the County Ordinance.
DISCUSSION:
HDL has unique experience of working with tax departments across multiple jurisdictions. The use of their advance filing system has allowed lodging and car rental operators to file and process payments on tax returns and receive extensive customer service support, while providing accurate account activity and filing trends to the County for auditing purposes and insight into anticipated revenues for budgeting purposes.
The emergence of Short-Term Rentals (STR) has increased at a rapid rate in recent years and has given individuals in unincorporated areas of San Mateo County the opportunity to engage in STR operations. Through their collection and discovery services, HDL has been able to identify out of compliance STR operators who may be brought into compliance through education efforts. By taking this approach, HDL ensures that operators are properly registered and accurately reporting. HDL will also advise and consult the Treasurer-Tax Collector Office of legislative changes to revenue codes which impact how TOT is to be calculated as additional streams of revenue are identified.
The Treasurer-Tax Collector Office is requesting that this Board waive the competitive solicitation process so that HDL can continue to ensure lodging and vehicle rental operators subject to taxation are properly identified, registered, and accurately reporting. The Treasurer-Tax Collector’s Office is requesting this Board to approve an extension of the current HDL agreement for an additional two years through June 30, 2026, with an associated increase to the agreement’s not to exceed amount of up to $215,000 to continue providing tax administrative and auditing services.
County Procurement has approved a waiver request to extend the contract.
The resolution and amendment have been reviewed and approved by County Attorney as to form.
This Board is being asked to authorize the Treasurer-Tax Collector to execute subsequent amendments which do not exceed an aggregate amount of $25,000.
PERFORMANCE MEASURE:
|
Measure |
FY 2021-22 Actual |
FY 2022-23 Actual |
FY 2023-24 Projected |
|
Total TOT Collections |
$4,659,650 |
$5,694,775 |
$5,901,258 |
|
Total VRBLT Collections |
$10,370,958 |
$12,842,898 |
$13,253,949 |
FISCAL IMPACT:
The term of the amended agreement is July 1, 2022, through June 30, 2026. This amendment increases the contract amount by $215,000 to an amount not to exceed $410,000. Funding for this agreement has been included in the Treasurer - Tax Collector’s FY 2024-25 Recommended Budget. Similar arrangements will be made for future budget years.