ANTOINETTE CHRISTOVALE DIRECTOR of FINANCE

July 21, 2010

CITY OF LOS ANGELE!:i CALIFORNIA

ANTONIO R. VILLARAIGOSA MAYOR

OFFICE OF FINANCE 200 N. SPRING ST.

ROOM 220 - CITY HALL LOS ANGELES. C A 900 12

(213) 978-1782

"CORRECTED COMMUNICATION" REPORTRE:

OFFICE OF FINANCE SUBMITTAL OF THE LOS ANGELES POLICE COMMISSION RECOMMENDATION TO APPROVE

The Honorable City Council Budget and Finance Committee Room 395, City Hall Los Angeles, California 90012

Honorable Members:

REQUEST FOR WAIVER OF PENALTY FILED BY BRUFFYSINC

This communication is being sent to replace our correspondence to your body dated July 14, 20 10. The Office of Finance (Finance), on behalf of the Los Angeles Police Commission, submits the attached letter fi:om the Police Commission Executive Director Mr. Richard Tefank recommending approval of the request for waiver of penalty filed by Bruffys, Inc. in the amount of $135,654.54 as set forth in this repmi.

Bruffys, Inc. is a corporation engaged in the conduct ofbusiness as an Official Police Garage and collects vehicle release fees from owners upon redemption of impounded vehicles. They are subject to tax under Section 80.77.1 LAMC 01 ehicle Release Fees). While the Office of Finance assists in the collection of the Vehicle Release Fee on behalf of the Los Angeles Police Commission, administration and enforcement of the Vehicle Release Fee ordinance is under the authority of the Los Angeles Police Conunission. Therefore, Finance does not have the authority to recommend or approve penalties imposed on such fees. Finance can attest that the principal in the amount of $571,872.00 and partial penalty in the amount of $7,313.46 (which is

non-refundable) were paid in full as of April 8, 2009.

Questions regarding the recommendation to waive the outstanding penalty should be directed to Mr. Tefank at (213) 236-1400.

Personnel Director

Attachments

cc: Richard Tefank, Executive Director, Los Angeles Police Commission Cindy Sue Serrano, Principal Tax Compliance Officer Finance Management Team

AN EQUAL EMPLOYMENT OPPORTUNITY- AFFIRMATIVE ACTION EMPLOYER

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REPOk~ '~AIIVJ FOR APPROVAL Qli' COi\T ) !\'HSE SECTION 21.15 (f)LAMC

TO:

FROM:

Budget and Finance Committee

;\ nto i11ette Christova l.c Office ofF inai·tce

NAME/ADDRESS OF CLAi lVlANT 13rufTys Inc 4 t40 G lencoc 1\ venue Marina Del Rcy, CA 902n-561 0

TYPE OF BUSINESS /DESCRlPTION

"F ile No

Date l'ih:d _ _ I,!~/22,'-"!'2=0C=J~--

!\ rnounl Requc~ t cd for Compromise $l35.(j54.54 __ ___ _

Amount Recommended for Compromise :li I :'>5 .65~c 5_4 __

L_ _ ____ __:_ ___ . _ _ _,

ACCOUNT NlJTVLBER oooo4657 n .. ooo 1-7

The taxp:tyer is 3 corporation engaged in the business as an Official Poli ce Gm·age col lecting vehicle release fees from owners upon redemption ofirnpounded veh icles, w l1ich is subject 1.0 tax under Section ll0 .77. 1 LATVLC (Vehicle Release Fees) .

SUMMARY OF TAXPAYER'S STATEMENT The taxpayer slates that cluring an Office ofFinance audit it was discovered that their accountant was embezz ling money i'rom lhe business; subsequently, th e accountan t c.ommittccl suicide. During tlle same period of time the pr incipal opcr:llor of the bus iness suffeHxl a heart atL<lck and died.

BASIS O FRECOfVd.lVIENDATION SUMIVJARY OF CITY'S CLAlM

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COOl) __?00503Q $ __ _ -_0 -_~--'$_' _ ____ -_0---l$ 16,248 .00 $ . 16,248~ _ COO') 2005,04Q"'--+-$ _ _ _ -0- $ __ _ -_0_---+...:..$ _ _ . 16,248 . 0.(~ $_. _ _ 1_6_.2_4_8_.~__:_

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coo9 200n03Q $ -O- $ -0- $ 21,732.0Q_+-=-$ _ __:2__:L~,7~J-=2 .. :...:..o-=-o---l ___ C~0(_)9_ 200701Q _

1_$-'-' _ _ __ -_0-_ -t...::.$ _ __ _ -0- $ 1 6,416.09 ___ ~~$=----=-l.::.6.,,c..:..4·~~i:9_0_

·- --· C009 --- I-- 20_0_7_03_Q,_ $ _ __ -_·0_-_ 1_$'-' _ _ _ -_Q_-:_ $ - ··~--=-31.:.,9-=-8-=--0 . ...:..0C_J +=-S- ----=132.,9:...8::...:..0:.::..0--=-0-1 . -·- C009 _ ·- __ 2_0_0_7(_)4_:Q"----

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f--- -c_oo_·9 _ _ ,_ 2ooso1Q s -O- $ -O- $ J4,7n _oo s 14,772.00 __ _ $ 135,654.54 j) _ _ 13_. 5..,!.,6_5_4_:_?_:4 --

Tlle tax payer volun tarily com plied with the City\; requirements and paid in full principal and parLia l penalty totaling $579,185.46.

RECO Ml\'lENDA'l'ION A compromise of penalty o f $135,654.54 is rec ommended as Lhe Taxpayer' s reason meets Lhe gui del i11 es for comprotll ise of pena lty as establ ished by lhc C ily Counci l: "'f' axpayer Delays (change o f persollncl/orJice reloca lion)" .

A pproved:

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By:

Reviewed

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Antoinette C hri.stovalc . Di recto r, 0 fficc of Finance

;~~;f:kA 1:]?-.t!ed~ ~~l_;;_i . .P·isLyfttion Divis ion

7/! 5 /! 0 j .. _ _ _ _

LOS i GELES POLICE C01v1MISS~ ,\J

BOARD OF

POLIC E COMMISSIONERS

JOHNW. MACK PRESIDENT

ALAN J. SKOBIN VICE PRESIDENT

RICHARD DROOYAN ROBERT M. SALTZMAN DEBRA WONG >(ANG

MARIA SILVA C.Ok.~MISS ION EXEC.UlVE A.SSISTANT f

June 15, 2010

The Honorable Claims Board Room 395, City Hall Los Angeles, California 90012

ANTONIO R. VILLARAIGOSA MAYOR

RICHARD M. TEFANK EXECUTIVE DIREcTOR

NICOLE C. BERSHON INSPECTOR GE:NEAAL

EXECUTIVE OFFICE POliCE ADI.IINISTAA TIONBUIWING

1 DO Wesr FIRST STRI'.ET, SuiTE 134 Los ANGELES, CA .90012.-4112

(213)2~1400 PHONE (213) 236-14 10 FAX (213) 236-1440 TOO

RE: BRUFFY'S, INC., OFFICIAL POLICE GARAGE FOR THE PACIFIC AREA

OF THE LOS ANGELES POLICE DEPARTMENT

Honorable Members:

Bruffy's Inc. is an Official Police Garage (OPG) for 1he City of Los Angeles and holder of Business Tax Registration Certificate #465772, Contract No. C-107145. As an OPG, Bruffy's is required to collect Vehicle Release Fees from owners upon redemption of impounded vehicles as provided for in Section 80.77.1 ofthe Los Angeles Municipal Code. These fees are held in trust for the City and remitted on a quarterly basis to the Office of Finance.

On Apr11 8, 2009, Office of Finance staff met with Mr. Kevin Brough, Vice President of I·.huffy's Auto Tow in an attempt to resolve outstanding liabilities of the company totaling $882,00.0.00. Mr. Brough paid the principal balance and interest totaling $690,512.24 and requested a waiver of penalties on the Vehicle Release Fees ($135,354.54) based on mitigating cireumstanees. -During-the me€ting-with the Office,.of£inance; Mr.·. B.roughrelated . the set of circumstances which caused the company to fall behind in its remittances to the City. Specifically, he stated that during an Office of Finance Audit, it was discovered that the accountant for Bruffy's was embezzling money from the business. The accountant subsequently committed suicide. During this same time frame Mr. Brough's father who was the principle operator of the business suffered a heart attack and died. This inforrnatlon was verified through Department records .

After consultation with the Office of Finance and the City Attorney, it was determined that the authority to waive the associated penalties lies solely with the City Council, after review by the Claims Boa.td. It was initially believed by Office of Finance staff that a waiver of the penalties could occur under the Office of Finance Tax Amnesty Program. It was later determined that the non- tax liabilities did not qual ify for amnesty and therefore the Vehicle

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The Honorable Clajms Board June 14,2010 Page2 1.0

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Release Fee penalty was reinstated pending detennination of the appropriate authority felr approval.

Based on the above circwnstances, the Los Angeles Police Commission has no objection to the granting of a waiver of penalties on the VehiCle Release Fees in the amount of $135,354.54 since Mr. Brough was unaware of the lack of payment as described above.

Should you have any questions regarding this matter please contact Detective III Benjamin Jones, Commission Investigation Division, at (213) 996-1275.

Very truly yours,

AN EQUAL EMPLOYMENT OPPORTUNITY- AFFIRMATIVE ACIIml EMPLOYER

Na~ 22 2009 a~OlAM 1 .JS78c251 p.2

Y OF LOS ANGELES CALIFORNIA

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