Title
Audit Team 2024 Progress Update
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Receive an update regarding the progress of the Tax Audit Team.
Report
Issue:
Whether to receive an update on the progress of the Tax Audit Team.
Staff Contact:
Aaron BeMiller, Finance Director, 360.753.8465
Presenter(s):
Brandie Andrews, Tax and License Analyst and Audit Team Lead, City of Olympia
Background and Analysis:
In April 2024, the City Council approved the creation of a tax audit team and authorized the Finance Department to stand up the program.
Businesses operating in Olympia are required to obtain an endorsement on their state business license and file Olympia tax returns. In the past five years, Olympia’s business taxpayer base has grown by 30% while tax filings have only increased 2%. New businesses may be unfamiliar with municipal tax and license rules. Covid also reset existing business’ knowledge about municipal licensing and taxation responsibilities. These and other factors have led to heightened levels of voluntary non-compliance.
The exploration to create a tax team began in earnest in mid-2023 and since that time, Finance team members have met with several cities who have a similar program to learn their processes. Additionally, the Finance department has continued to investigate an online B&O tax payment solution. Staff have looked at various solutions but all that that have been tested have had limitations that ultimately would make online filing more difficult than the current method of filing. However, a solution created by another Washington city is being explored, which is proving to be a very positive process to date.
The City Council formally authorized the additional 3.0 FTE and requisite budgetary expenditure necessary to fully fund the program as part of a 2024 budget adjustment Ordinance.
This update provides the Finance Committee with details of the progress to date and what to expect during the rest of 2024 and early 2025.
Climate Analysis:
This agenda item is expected to result in no impact to greenhouse gas emissions.
Equity Analysis:
One of the goals of the new audit team is to help ensure more equal access and response to Olympia’s existing business tax regulations. This agenda item may provide information about progress to date or in future.
Neighborhood/Community Interests (if known):
Members of the community may have an interest in this agenda item as it deals with City finances and fiscal governance.
Financial Impact:
Current estimates on the cost of the tax team are roughly $560,000 annually for three positions and necessary supplies. It is anticipated that this team will bring in additional resources at an amount to at least to cover the costs of the program.
Options:
1. Receive the presentation.
2. Do not receive the presentation.
3. Reschedule the presentation to a future meeting.
Attachments:
None