Town of Yountville "The Heart of the Napa Valley" Filed*

The most recurring items of noncompliance were the lack of acceptable records and the underreporting of gross receipts by the operators. This is likely to be the case. However, the findings do not indicate that they made this determination in the case of the Town of Yountville.

Not every local governmental agency provides adequate information to a new operator. The Town records show that all operators provided timely submittals on the Town provided forms back to the Town. The Town has had a steady number of operators. The Town held an orientation session with the staff of the new operator (prior to the Town of Yountville • 6550 Yount Street • Yountville • California • 94599 Telephone (707) 944-8851 • FAX (707) 944-9619 . . July 21, 2009 Grand Jury Report) to review the ordinance and the various TOT reporting forms. The Finance Director makes periodic contact with the operators to ensure compliance.

There is a lack of communication between the Finance Department and the licensing departments of the local governmental agencies. We believe this may be a mistake on the part of the Grand Jury to include Yountville in this reference as the Finance Department and licensing department here are one and the same. The Town does not have a separate licensing function.

Provisions in the municipal codes/ordinances for interest and penalties are not being executed. The Town respectfully disagrees. The procedures allow for flexibility on the final determination of applicable penalties and interest and the Town believes this is appropriate as there may be mitigating circumstances. If the Grand Jury is recommending that there be no discretion in the administration of penalties and interest and that full penalties and fines be levied for any violation at all that is a different finding than the statement provisions are not being executed. Most local government agencies do not have an adequate record of how many 8. rooms are available for transient occupancy. As this finding says "most", we are not sure if this is meant to include the Town. If this finding is meant to be applied to the Town of Yountville, the Town respectfully disagrees. The Town completes bi-monthly reporting which includes the total rooms and room nights on our reporting forms which are also posted on the Town's web-site at www.townofyountville.com The Town presently has 402 rooms available The information below is from our web-site. TOT Reports THIS SECTION includes regularly updated Transient Occupancy Tax (TOT) Reports. As of January 2009, the Town has 10 hotels and inns, with a combined total of 402 rooms. Our hotels and inns are (alphabetically): Bardessonon Inn & Spa - 6526 Yount Street 1. Bordeaux House - 6600 Washington Street 2. Lavender Inn - 2020 Webber Street 3. Maison Fleurie - 6529 Yount Street 4. Napa Valley Lodge - 2230 Madison Street 5. Napa Valley Railway Inn - 6503 Washington Street 6. Petit Logis - 6527 Yount Street 7. Villagio Inn & Spa - 6481 Washington Street 8. Vintage Inn - 6541 Washington Street 9.

The Town neither agrees nor disagrees with this recommendation. The Town wholeheartedly agrees with what we believe to be the Grand Jury's recommendation that TOT management should be a high priority and focus. This is the case in Yountville as TOT revenue is our most significant General Fund revenue source. The Town notes that a recent audit found an additional $12,000 owed to the Town which is less than 1% of the total amount collected by the Town (2003). The Town welcomes additional comments or recommendations on how it can improve its collection. This recommendation has been implemented. The Town Manager and Finance Director have reviewed the Grand Jury results and recommendations and will continue to proactively manage and enforce the TOT provisions. The Town is evaluating going from a bi-monthly collection to monthly collection of TOT revenue. We note that there are references to the Township of Yountville in the Grand Jury Report. We are uncertain where those are derived and would respectfully request that those be corrected to reflect the correct name of the municipality which is the Town of Yountville. . . . . . . . July 21, 2009 Please contact me if the Grand Jury has any questions or needs additional information from the Town of Yountville. Thank you for the opportunity to comment upon your report. Sincerely yours, Steven R. Rogers / Cynthia L. Saucerman Town Manager Mayor Town Council Copies: Grand Jury File . . . + + . .

Yountville Inn - 6462 Washington Street . July 21, 2009 Yountville's TOT rate is 12%, and revenues are collected throughout the fiscal year on a bi-monthly basis. Each TOT Report includes current and historical revenue, occupancy rate and average room-rate data for our hotel and inn rooms in aggregate. Additionally, each report includes historical data from fiscal year 1991-92 forward. The Town is not permitted to disclose such data for specific inns because it is proprietary business information. Current Report The following TOT Report includes the most recent reporting period for current fiscal year, as well as historical data for the preceding 17 fiscal years. Transient Occupancy Tax Report, March/April, 2009 (updated June 2009) 9. The Cities and County do not conduct audits with any degree of frequency or regularity. The Town notes that it was not included in this statement. If that is the case, the Town agrees with this finding as it pertains to the Town's auditing practices which are to conduct an audit a minimum of every three (3) years. It should be noted that the Town is allowed to go back three years and apply penalties and interest for a period of three (3) years so an annual audit is not necessary to ensure potential full cost recovery in the case of underreporting.