CITY OF SIMI VALLEY
MEMORANDUM
J
une 13, 2022
TO
: City Council
F
ROM: Office of the City Manager
S
UBJECT: REINSTATEMENT AND AMENDMENT TO CONTRACT BETWEEN THE
CITY OF SIMI V ALLEY AND HINDERLITER, DE LLAMAS AND
ASSOCIATES (HdL), FOR SALES AND USE TAX MANAGEMENT AND
AUDIT SERVICES
STAFF RECOMMENDATION
I
t is recommended the City Council approve the attached reinstatement and amendment of contract with HdL, extending the term and increasing the compensation by $ 9,103.95 for a total not to exceed amount of $129,103.95.
BACKGROUND AND OVERVIEW
T
he City contracted with HdL to provide sales and use tax auditing services (Services), for the period of June 1, 2018 through June 30, 2021. The City subsequently amended the contract to include an additional six -month period, extending the expiration date to December 31, 2021 and increased the not to exceed contract amount to $120,000. However, invoicing for HdL’s Services performed from October through December of 202 1 were not available for processing until after the expiration of the contract. In addition, the invoice exceeds the contract not to exceed amount by $9,103.95. Due to the nature of the invoicing process this delay could not be avoided.
Sta
ff is requesting that the City Council approve the attached reinstatement of the underlying contract for the sole purpose of making the final payment. Additionally, staff recommends increasing the contract compensation by $9,103.95 for a total not to exceed contract amount of $129,103.95. This action would allow staff to pay the final outstanding invoice for Services performed by HdL through December 2021. This action will formally closeout the prior contract with HdL.
Th
is request for reinstatement and amend ment of the above agreement does not impact the award of two new contracts in December 2021 to HdL to continue the tax management services for a three-year term beginning January 1, 2022 and ending December 31, 2024.
AGENDA ITEM NO.
Consent (8)
2 FINDINGS AND ALTERNATIVES
T
he City has contracted with HdL to provide sales and use tax management and auditing services since 2007. The services include a detailed quarterly report of the City’s sales tax, research and analysis on issues, assistance with developing sales tax projections for the upcoming Fiscal Year budget, and identification of sales tax misallocations and collections.
A
lthough the City Council awarded new contracts to HdL in December 2021 to continue tax management services for the City, these agreements are for services to be performed during 2022 through 2024. Thus, staff is not able to process payment for fourth quarter services for the contract that recently expired on December 31, 2021.
P
er the terms for the 2018 through 2021 contract , the cost of services is $ 1,950 per quarter and 15% of all new sales and use tax revenue received due to audit and recovery work. To date, the City has paid HdL $107,153.80 for services identified in the sales and use tax management and auditing contract. An available balance of $12,846.24 remains on the contract to pay the vendor. The final invoice submitted to the City is in the amount of $21,950.19 and exceeds the contract’s not to exceed amount by $9,103.95.
I
n order to make the full payment to HdL and closeout the contract, staff needs to obtain the City Council’s approval to reinstate the contract for a limited term (i.e. retroactive to January 1, 2022) and amend the contract for a limited purpose (to increase the compensation by $9,103.95), which will provide for a total not to exceed contract amount of $129,103.95. This will allow for final payment of $21,950.19 due to HdL for fourth quarter services. Sufficient funds are available in the FY 2021- 22 General Fund budget to pay for this invoice. The contract will then terminate under this Second Amendment upon payment date to HdL.
T
he following alternatives are available to the City Council:
1. R
einstate and amend the contract with HdL increasing the compensation by $9,103.95, for a total not to exceed amount of $129,103.95.
2. P
rovide staff with additional direction.
S
taff recommends Alternative No. 1.
SUGGESTED CITY COUNCIL MOTION
I m
ove to approve the reinstatement and amendment to the contract between the City of Simi Valley and HdL , effective retroactively to January 1, 2022, and increas e the compensation by $9,103.95, for a total not to exceed amount of $129,103.95. 3 SUMMARY
The City contracted with HdL to provide sales and use tax auditing services for the period of June 1, 2018 through December 31, 2021 and the contract has a not to exceed amount of $120,000. A final invoice for fourth quarter services was submitted after the contract’s expiration date in the amount of $21,950.19 and exceeds the contract’s not to exceed am
ount by $9,103.95. Staff is requesting that the City Council approve the attached reinstatement and amendm ent of the prior contract. Suc h an action would increase the contract compensation by $9,103.95 for a total not to exceed contract amount of $129,103.95 and would allow for final payment of $21,950.19 to HdL after which time the agreement terminates. ______
______________________________
Linda Swan
Assistant City Manager
INDEX Page
Rei
nstatement and Second Amendment to Contract ...................... 4 1 REINSTATEMENT AND SECOND AMENDMENT TO
CONTRACT BETWEEN THE CITY OF SIMI VALLEY AND
HINDERLITER, DE LLAMAS AND ASSOCIATES FOR SALES
AND USE TAX AUDIT SERVICES
THIS REINSTATEMENT AND SECOND AMENDMENT TO CONTRACT is
made and entered into in the City of Simi Valley on this 13th day of June, 2022 retroactively effective to January 1, 2022 (“Effective Date”), by and between the CITY OF SIMI VALLEY, a municipal corporation, hereinafter referred to as City, and HINDERLITER DE LLAMAS AND ASSOCIATES (HdL), each a “Party”, collectively, “Parties”.
I. Recitals
A. City and HdL entered into a written contract executed by the Parties on May 25th, 2018 for the performance of sales and use tax audit services (“Services”). Thereafter, the Parties entered into a first amendment to the contract (“First Amendment”) executed by the Parties on June 21, 2021. The contract and the First Amendment (collectively, the “Contract”), are incorporated herein by reference.
B. The Contract expired on December 31, 2021, and the Parties now desire to reinstate said Contract retroactively effective to January 1, 2022, as well as amend the Contract for a limited purpose and limited term; Process payment for Services performed by HdL during the months of October through December, of 2021. Such Services exceeded the not-to-exceed amount of the Contract by $9,103.95. Due to the nature of the process, these billings could not be paid prior to the expiry of the Contract.
C. The Parties now desire to reinstate the Contract for the sole purpose of increasing the not to exceed amount and paying HdL’s outstanding invoices; thereafter the agreement will terminate as set forth below.
NOW, THEREFORE, in consideration of their mutual promises, obligations and covenants hereinafter contained, the parties hereto agree as follows:
II. Amendment
1. The Recitals are true and are made part of this Contract. The Contract is hereby reinstated and retroactive to the Effective Date, for the limited purposes set forth in this Second Amendment.
2. Section 2. Term, is amended to read as follows:
“The term of this Contract shall be from the Effective Date and shall terminate on the date City issues payment to HdL for Services performed for the months of October through December 2021.”
3. Section 4. Compensation and Payment, Subsection D. is deleted in its entirety and replaced with the following language:
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“The total compensation payable to HdL by City for Services under this Contract shall not exceed the sum of $129,103.95. Outstanding/unpaid invoice (Invoice No. SIN012808) for Services as of the Effective Date, is incorporated herein. Such Services are ratified by City and may be paid. Payment shall be made no later than t hirty (30) calendar days following execution of this Contract by the Parties. The Parties agree there are no other outstanding invoices other than those attached hereto and no other sums are due and owing to HdL . The Parties also agree the re are no other Services to be p erformed under this Second Amendment.”
3. Mailing Address . The mailing address of each P arty to this Reinstatement and Second Amendment:
CITY City of Simi Valley
Department of Administrative Services
2929 Tapo Canyon Road
Simi Valley, CA 93063
Staff Contact: Linda Swan
CONSULTANT HdL
120 S. State College Blvd., Ste 200
Brea, CA 92821
Attn: Andrew Nickerson, President/CEO
4. Except as herein amended, all other terms and conditions of the Contract remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the day and year first above written.
Attest: City of Simi Valley, A Municipal Corporation
By:
Lucy Blanco, City Clerk Brian Paul Gabler, City Manager Approved as to Form: HdL
By:
David L. Caceres, City Attorney
Print Name: Andrew Nickerson
Approved as to Content: Title: President/CEO
By:
Print Name: Richard Park
Title: Chief Financial Officer
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