Huntington Beach shelter improperly charged sales tax on pet adoptions, audit finds

Huntington Beach shelter improperly charged sales tax on pet adoptions, audit finds
The Orange County Humane Society animal shelter in Huntington Beach lost its contract with the city of Newport Beach after an audit found poor conditions at the shelter and unnecessary sales taxes on pet adoptions. (Daily Pilot)

People who adopted a pet from the Orange County Humane Society in the last several years may have overpaid, according to an audit by the city of Newport Beach.

The audit, conducted by city staff and released in late December, highlights several findings — some of which allege unsanitary and inhumane conditions at the Huntington Beach shelter — that ultimately led the city to terminate its animal care agreement with the facility. The audit explores shelter activities from July 2012 to September 2015.


Even before the audit was published, the Newport Beach City Council decided in November to end its agreement with the nonprofit Humane Society shelter and move to Home Free Animal Sanctuary in the Santa Ana Heights area of Newport.

Among the audit's allegations is that the Huntington Beach shelter had been unnecessarily charging 8% sales tax on adoptions. The State Board of Equalization tax law states that nonprofit animal-welfare organizations, such as the Orange County Humane Society, are exempt from sales tax in California.

It is unclear how much the shelter has charged in sales taxes on pet adoptions. But the shelter typically charges $130 to adopt an adult dog, $150 for a puppy, $110 for a kitten, $90 for an adult cat and $25 for a rabbit, according to its website.

"It's hard for us to determine how many adoptions that may have been happening with," Newport Beach Assistant City Manager Carol Jacobs said, citing a lack of adoption records turned over by the shelter to the city auditor.

The audit recommends the shelter stop charging sales tax on adoptions and either return the money to pet owners who were overcharged or provide the city with proof that the money was given to the Board of Equalization.

Orange County Humane Society management did not respond to a request for comment Thursday.

In April 2011, Newport Beach entered a five-year contract for the nonprofit to provide shelter and care to dogs and cats picked up by the city's animal control officers. The city paid $7,800 a month for the services.

However, in the last few months of 2015, city staff grew increasingly concerned about the level of care provided by the shelter and some of the conditions there, City Manager Dave Kiff said in November.

A city staff report at the time indicated that Newport Beach had had issues with the shelter for the last few years, but they had become more pressing in the fall. The contract with the shelter was set to expire in May this year.

The audit states that animal control officers frequently found dogs and cats soaked because the animals were not removed while the kennels were being hosed down. The officers brought the issue to the attention of Orange County Humane Society staff but continued to find wet dogs in the kennels, according to the audit.

Officers also reported that 33 of the 64 dog kennels were missing grates over drainage channels, which could result in an animal spraining or breaking a leg, according to the audit.

"The uncovered drainage channels also create an unsanitary condition for the dogs when solid waste is trapped in the gap," the audit states.


The audit says the shelter was vaccinating and treating animals for parasites after they had been adopted instead of giving them the necessary vaccines when they first arrived to help combat the spread of diseases.

Animal control officers also reported that some animals were being housed in a building with no ventilation or sunlight, cat cages were not scrubbed regularly, there was no quarantine area for sick cats, and food and water bowls were not cleaned regularly, according to the staff report.

Residents complained that the facility was not clean and that the shelter's voice mail is often full, preventing them from leaving messages, according to city documents.

The Orange County Humane Society also serves Costa Mesa, which has had a deal with the facility since 2009. The latest contract, approved in January 2015, is for $231,817 for services through January 2018.

Costa Mesa spokesman Tony Dodero said the city is looking into the issues addressed in Newport Beach's audit.

"Our animal control officers go to the shelter every day and did not have the same experience as the Newport Beach officers," Dodero said. "That doesn't mean the issues aren't there, but we need to investigate this ourselves."

Twitter: @HannahFryTCN

Fry writes for Times Community News.