HomeMy WebLinkAboutIR 9815 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9815
To the Mayor and Members of the City Council November 3, 2015
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The Texas Comptroller's Office recently notified the City of Fort Worth of the results of a sales tax
audit performed on a City of Fort Worth business in earlier this year. The audit reviewed the
remittances this specific business made for sales tax collections from February 2010 to July
2013. The taxpayer is not named in this report, as sales tax information is made confidential by
Section 151.027 of the Tax Code; however, the Texas Comptroller's Office was able to share
some of the details of the audit findings, which are discussed within this Informal Report.
During the audit, the Comptroller's Office discovered an overpayment in local sales and use taxes
to the City in the amount of $4,221 ,611 , of which $2,822,728 is attributable to the General Fund
and $1,398,883 is attributable to the Crime Control and Prevention District (CCPD). The
overpayment was the result of a business that reported their local sales tax based on the location
that the products were distributed (Fort Worth warehouse) from versus the locations where the
sales were made. The taxpayer has four sales offices located in other cities within Texas. Since
this amount was originally all credited to the City of Fort Worth, it must now be repaid to the State
to be reallocated to the correct jurisdictions.
Budget:
The following table shows the FY2015 amended budget for sales tax, the year-end forecast, the
variance, and the overpayment for the General Fund and the CCPD. Final sales tax receipts for
FY2015 will be reported in December 2015.
Amended Year-End
Budget* Forecast Variance Overpayment
General Fund $ 126,711,466 $ 129,114,065 $2,402,599 $2,822,728
CCPD 58,227,401 60,042,232 1,814,831 1,398,883
-As amended by ordinances
The General Fund is forecasted to receive $129,114,065 by fiscal year end, which exceeds
amended FY2015 budget by 1.9%. The CCPD is forecasted to receive $60,042,232 by fiscal
year end, which exceeds FY2015 adopted budget by 3.1%.
Preliminary forecasts for FY2015 indicate a contribution to fund balance around $7 million for the
General Fund and in excess of$3 million for the CCPD.
Payback:
The City has two options to pay the $4,221,611 overpayment to the State, including:
• Submitting a one-time payment for the total amount owed, less a 2% discount; or
• Entering into a 42 month payment plan.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9815
To the Mayor and Members of the City Council November 3, 2015
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Considering the favorable budget performance for FY2015 in both funds, the City plans to take
advantage of the $84,432 discount provided through the one-time payment option. The amounts
paid back will be taken from revenues received during fiscal year 2015 and will be paid to the
State by the end of November 2015.
The City is currently in a payback arrangement for the General Fund due to a previous
overpayment with an outstanding balance of $7,406,598 as of September 2015 and is paying
$38,778 per month until August 2031. This does not include the additional $2,822,728 mentioned
above. The CCPD Fund is currently in the same payback arrangement with an outstanding
balance of $2,877,797 as of September 2015 and is paying $15,067 per month through August
2031. This does not include the $1,398,883 mentioned above.
If you have any questions, please call Aaron Bovos, Chief Financial Officer, at 817-392-8517
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS