Oxnard Will Hire Auditor in Effort to Raise City Revenues : Finances: The council calls for an investigation to determine if the city is getting shortchanged in the distribution of tax subsidies.

Struggling to increase city revenue, the Oxnard City Council voted unanimously Tuesday to hire auditors to investigate whether the city is getting its fair share of tax revenue from state and local agencies.

The auditors, who will be chosen through a bid process, will determine if Oxnard is losing some subsidies from sales and franchise taxes and revenue from taxes that are based on population and land area.

The goal of the audits, which are estimated to cost between $45,000 and $75,000, is to identify and correct any tax allocation errors that have led to the misappropriation of revenues normally meant for the city.

On an average, cities that have conducted such audits have generated about a 1% increase in tax revenues after auditors identified and corrected errors, said Rudy Muravez, city director of finance and management services.

For Oxnard, that would mean an annual increase of $100,000, he said.

But Muravez warned the council that “if they are looking for errors in your favor, they can just as easily find errors to your detriment.”

City Atty. Gary L. Gillig said the city would be obligated to notify state and local tax officials if auditors identify errors that, if corrected, would reduce the city’s tax revenue.

Increasing the city’s revenue is a high priority in Oxnard, where property taxes last year fell short of projections by $1.2 million and sales tax revenues were short by $700,000 to $800,000.

Last September, the Revenue Enhancement Task Force, a committee of city officials charged with finding ways to increase revenues, included such audits in a list of revenue-enhancement options.

In February, City Manager David Mora reported that revenues were almost $350,000 less than expected for the midpoint of the 1989-90 fiscal year.

The state Board of Equalization collects sales tax from businesses in all cities and distributes them based on where the businesses are located. If businesses use an incorrect code to identify their locations, for example, the city’s money could be diverted to another city or the county.

The franchise tax is money that gas, cable and electric companies pay the city for their use of city streets and services.

The city’s allotment of other revenue, such as the gas tax, is based on various calculations of the city’s population or acreage. An audit would determine whether city annexations and de-annexations were being properly accounted for in the formulas.