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July 8, 2025
ITEM TITLE
Agreement: Approve a Consultant Services Agreement with Hinderliter, De Llamas & Associates (“HdL”) to Provide Sales and Use Tax and Transactions and Use Tax Auditing and Information Services Report Number: 25-0151
Location: No specific geographic location
Department: Finance
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution approving a consultant services agreement for sales and use tax and transactions and use tax audit services between the City of Chula Vista and HdL for fiscal years 2025-26 through 2029-30.
SUMMARY
In October 2024, the City released a competitive solicitation through the Request for Proposals (RFP) process to identify potential providers for sales and use and transactions and use tax auditing and information services. The City requires the se services to assist in understanding the City’s economic environment and business development, and to provide revenue projections to effectively monitor general sales and use tax and Measure A and Measure P transaction and use tax revenues. Continuous monitoring, identification and correction of allocation errors , and reporting deficiencies assist in maximizing sales tax revenues owed to the City. A n effective review program can provide for more accurate budget forceasting and financial planning.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consist s of a governmental P a g e | 2
fiscal/administrative activity which does not result in a physical change in the environment . T herefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable
DISCUSSION
The Finance Department d esires the combination of data entry, report preparation, and data analysis necessary to effectively manage both its general sales and use tax and the Measure A and Measure P transactions and use tax es for recovery of revenues either unreported or erroneously allocated to other jurisdictions. HdL has the program, equipment and personnel required to deliver the sales and use and transactions and use tax related services.
In July of 2023, the City renewed its agreement with HdL to provide sales and use tax analysis, forecasting, and audit services. This agreement expired on June 30, 202 5, necessitating an RFP process in Fall 2024 to continue these services.
In order to procure these services City staff solicited proposals in accordance with Chula Vista Municipal Code Section 2.56.110 for professional services on October 11, 2024 on PlanetBids. The City received two proposals that were evaluated by the select ion committee and chose HdL as the most qualified . HdL has extensive experience in providing sales tax analysis to jurisdictions thro ughout California . HdL has consistently provided the City high-quality customer service throughout the terms of previous agreements.
This agreement allows HdL to examine State Sales, Use and Transactions Tax records as authorized by Section 7056 of the California Revenue and Taxation Code that specifies the conditions under which a city may authorize persons other than city officers and employees to examine State Sales, Use and Transactions Tax records.
The annual base fee for services is $ 14,400. The Consultant will receive a percentage based on recovered sales and use tax revenue. For general sales tax recovery the Consultant will receive 15% revenue recovered, and for Measure P and Measure A consultant will receive 15% of recovered revenue. The maximum amount to be paid to consultant for services performed under the agreement through June 30, 2028, shall not exceed $525,000. If the two (2) additional one-year extension are exercised, through June 30, 2030 the amount paid will not exceed $875,000.
Staff recommends that the City Council approve the agreem ent with HdL for a three-year period with an option to extend for two additional one-year terms (July 1, 2028 to June 30, 2029 and July 1, 2029 to June 30, 2030).
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
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CURRENT-YEAR FISCAL IMPACT
Approval of this resolution will award an agreement with HdL for providing sales and use tax and transactions and use tax audit services to the City. Suffici ent funds were budgeted in the General Fund for fiscal year 2025-26 for this expense. There is no additional fiscal impact anticipated as a result of this action.
ONGOING FISCAL IMPACT
All ongoing costs for these services will be incorporated as part of the annual budget development process in future years.
ATTACHMENTS
1. Two-Party Consultant Services Agreement with HdL
Staff Contact: Sarah Schoen, Director of Finance/Treasurer Edward Prendell, Budget & Analysis Manager