HomeMy WebLinkAbout08 - Amendment to PSA for Sales and Use Tax Consulting ServicesQ �EwPpRT
CITY OF
s NEWPORT BEACH
`q44:09 City Council Staff Report
March 10, 2026
Agenda Item No. 8
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Jason AI -Imam, Adminstrative Services Director/Treasurer - 949-
644-3126, jalimam@newportbeachca.gov
PREPARED BY: Trevor Power, Accounting Manager - 949-644-3125,
tpower@newportbeachca.gov
TITLE: Amendment No. One to Professional Services Agreement with
Hinderliter, De Llamas & Associates for Sales and Use Tax
Consulting Services
ABSTRACT:
On February 1, 2021, the City of Newport Beach entered into a professional services
agreement (PSA) with Hinderliter, De Llamas & Associates (HdL) for sales and use tax
consulting services. The services and reports provided by HdL have proven to be robust
and valuable in supporting the City's sales tax forecasting and revenue monitoring efforts.
Staff recommends City Council approval to extend the agreement for one additional year
through December 31, 2026, to ensure continuity of services and to allow time to conduct
a formal procurement process or to piggyback off another agency's competitive
procurement process.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
and
b) Approve Amendment No. One to the Professional Services Agreement with
Hinderliter, De Llamas & Associates for Sales and Use Tax Consulting Services to
extend the term of the agreement to December 31, 2026, revise the schedule of billing
rates, and authorize the Mayor and City Clerk to execute the amendment.
DISCUSSION:
On February 1, 2021, the City entered into a PSA with HdL to provide sales and use tax
consulting services. Staff is seeking City Council approval to extend the term of the
agreement through December 31, 2026, to ensure continuity of services and allow time
to conduct a formal procurement process or to piggyback off another agency's
competitive procurement process.
Throughout the term of the agreement, HdL's performance has been thorough,
responsive and valuable in protecting and enhancing the City's sales and use tax revenue
Amendment No. One to Professional Services Agreement with Hinderliter, De Llamas &
Associates for Sales and Use Tax Consulting Services
March 10, 2026
Page 2
base. HdL provides detailed sales tax revenue analysis, identifies reporting
discrepancies, reviews taxpayer allocations, supports audit recovery efforts, and
prepares quarterly reports to assist with revenue forecasting and budget development.
These services support the City's ability to monitor and maximize legally allocable sales
and use tax revenues.
The proposed amendment extends the agreement through December 31, 2026, ensuring
uninterrupted services while staff evaluates the long-term needs and completes a
competitive procurement process. The amendment also updates the consultant's monthly
fee from $850 per month ($10,200 annually), as established under the original agreement,
to $900 per month ($10,800 annually) for calendar year 2026. The modest adjustment
reflects updated service costs and continued comprehensive sales and use tax consulting
support.
FISCAL IMPACT:
The annual cost will increase $600, from $10,200 to $10,800 for calendar year 2026. The
Administrative Services Department's operating budget can absorb this increase, and no
increase to the original contract amount or appropriation is needed.
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Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Amendment No. One with Hinderliter, De Llamas & Associates for Sales
and Use Tax Consulting Services
ATTACHMENT A
AMENDMENT NO. ONE TO
PROFESSIONAL SERVICES AGREEMENT
WITH HINDERLITER, DE LLAMAS & ASSOCIATES FOR
SALES AND USE TAX CONSULTING SERVICES
THIS AMENDMENT NO. ONE TO PROFESSIONAL SERVICES AGREEMENT
("Amendment No. One") is made and entered into as of this 10th day of March, 2026
("Effective Date"), by and between the CITY OF NEWPORT BEACH, a California
municipal corporation and charter city ("City"), and HINDERLITER, DE LLAMAS &
ASSOCIATES, a California corporation ("Consultant"), whose address is 120 South State
College Boulevard, Suite 200, Brea, CA 92821, and is made with reference to the
following:
RECITALS
A. On February 1, 2021, City and Consultant entered into a Professional Services
Agreement (Contract No. C-8658-1) ("Agreement") to provide sales and use tax
consulting services ("Project").
B. The parties desire to enter into this Amendment No. One to extend the term of the
Agreement to December 31, 2026, update the Administration section, update
City's contact for legal notices, revise the schedule of billing rates, and revise the
insurance requirements.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
Section 1 of the Agreement is amended in its entirety and replaced with the
following: "The term of this Agreement shall commence on the Effective Date, and shall
terminate on December 31, 2026, unless terminated earlier as set forth herein."
2. ADMINISTRATION
Section 6 of the Agreement is amended in its entirety and replaced with the
following: "This Agreement will be administered by the Administrative Services
Department. City's Administrative Services Director or designee shall be the Project
Administrator and shall have the authority to act for City under this Agreement. The
Project Administrator shall represent City in all matters pertaining to the Services to be
rendered pursuant to this Agreement."
3. NOTICES
Section 25.2 of the Agreement is amended in its entirety and replaced with the
following: "All notices, demands, requests or approvals from Consultant to City shall be
addressed to City at:
Hinderliter, De Llamas & Associates Page 1
Attn: Administrative Services Director
Administrative Services Department
100 Civic Center Drive
Newport Beach, CA 92660"
4. COMPENSATION TO CONSULTANT
Exhibit B to the Agreement shall be supplemented to include the Schedule of
Billing Rates, attached hereto as Exhibit B and incorporated herein by reference. Exhibit
B to the Agreement and Exhibit B to Amendment No. shall collectively be known as
"Exhibit B."
5. INSURANCE
As of the Effective Date of this Amendment No. One, Exhibit C of the Agreement
shall be deleted in its entirety and replaced with Exhibit C, attached hereto and
incorporated herein by reference. Any reference to Exhibit C in the Agreement and
Amendment No. One shall hereafter refer to "Exhibit C" attached hereto.
6. INTEGRATED CONTRACT
Except as expressly modified herein, all other provisions, terms, and covenants
set forth in the Agreement shall remain unchanged and shall be in full force and effect
7. RETROACTIVE APPLICATION; REVIVAL
This Amendment shall be retroactive to the date of expiration of the Agreement,
such that the Agreement is revived, reinstated and restored to full force and effect as if it
had not expired. All of the provisions of the Agreement shall continue in full force and
effect as modified by this Amendment.
[SIGNATURES ON NEXT PAGE]
Hinderliter, De Llamas & Associates Page 2
IN WITNESS WHEREOF, the parties have caused this Amendment No. One to be
executed on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
By:
A r n C. Harp
Ciry Attorney
ATTEST:
Date:
In
Lena Shumway
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date:
By:
Lauren Kleiman
Mayor
CONSULTANT: HINDERLITER, DE
LLAMAS & ASSOCIATES, a California
corporation
Date:
By:
Robert Andrew Nickerson
President and Chief Executive Officer
Date:
Bv:
Richard Park
Chief Financial Officer
[END OF SIGNATURES]
Attachments: Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
Hinderliter, De Llamas & Associates Page 3
EXHIBIT B
SCHEDULE OF BILLING RATES
Hinderliter, De Llamas & Associates Page B-1
CITY OF NEWPORT BEACH
FIRST AMENDMENT TO
AGREEMENT FOR SALES AND USE TAX SERVICES
Section 2 of Exhibit B "Schedule of Bill Rates" in the Agreement is amended and replaced by the
following:
662. Sales, Use Tax Management Services (Quarterly Delivery Meetings)
This service includes access to the City's sales tax database through our web -based software
and quarterly meetings with one of our principals. In preparation for each meeting, a principal
of the firm analyzes the City's data in detail and meets with appropriate City officials to
review trends, point out businesses that should be contacted as part of the City's business
retention program and discuss and make recommendations regarding the economic and
budget implications of the quarter's data. Also included is a non -confidential newsletter that
can be shared with your council and the public. The price for this is $900 per month."
Remaining Provisions of Exhibit B. Except as otherwise specifically set forth in this First
Amendment, the remaining provisions of Exhibit B of the Agreement shall remain in full force and
effect.
EXHIBIT C
INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, Consultant shall obtain, provide and maintain at
its own expense during the term of this Agreement, policies of insurance of the
type and amounts described below and in a form satisfactory to City. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than two million dollars ($2,000,000) per
occurrence, four million dollars ($4,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. Automobile Liability Insurance. Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01
covering bodily injury and property damage for all activities of Consultant
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non -owned or rented
Hinderliter, De Llamas & Associates Page C-1
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
D. Professional Liability (Errors & Omissions) Insurance. Consultant shall
maintain professional liability insurance that covers the Services to be
performed in connection with this Agreement, in the minimum amount of
two million dollars ($2,000,000) per claim and four million dollars
($4,000,000) in the aggregate. Any policy inception date, continuity date,
or retroactive date must be before the Effective Date of this Agreement and
Consultant agrees to maintain continuous coverage through a period no
less than three years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers
and employees or shall specifically allow Consultant or others providing
insurance evidence in compliance with these requirements to waive their
right of recovery prior to a loss. Consultant hereby waives its own right of
recovery against City, and shall require similar written express waivers from
each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers
and employees shall be included as insureds under such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30) calendar
days' notice of cancellation (except for nonpayment for which ten (10)
calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence of Insurance. Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a
waiver of subrogation endorsement for workers' compensation and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement must be approved by City's Risk Manager prior to
commencement of performance. Current certification of insurance shall be
Hinderliter, De Llamas & Associates Page C-2
kept on file with City at all times during the term of this Agreement. The
certificates and endorsements for each insurance policy shall be signed by
a person authorized by that insurer to bind coverage on its behalf. At least
fifteen (15) days prior to the expiration of any such policy, evidence of
insurance showing that such insurance coverage has been renewed or
extended shall be filed with the City. If such coverage is cancelled or
reduced, Consultant shall, within ten (10) days after receipt of written notice
of such cancellation or reduction of coverage, file with the City evidence of
insurance showing that the required insurance has been reinstated or has
been provided through another insurance company or companies. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Right to Review Subcontracts. Consultant agrees that upon request, all
agreements with subcontractors or others with whom Consultant enters into
contracts with on behalf of City will be submitted to City for review. Failure
of City to request copies of such agreements will not impose any liability on
City, or its employees. Consultant shall require and verify that all
subcontractors maintain insurance meeting all the requirements stated
herein, and Consultant shall ensure that City is an additional insured on
insurance required from subcontractors. For CGL coverage, subcontractors
shall provide coverage with a format at least as broad as CG 20 38 04 13.
D. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
E. Requirements not Limiting. Requirements of specific coverage features or
limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided
by any insurance. Specific reference to a given coverage feature is for
purposes of clarification only as it pertains to a given issue and is not
intended by any party or insured to be all inclusive, or to the exclusion of
other coverage, or a waiver of any type. If the Consultant maintains higher
limits than the minimums shown above, the City requires and shall be
entitled to coverage for higher limits maintained by the Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City.
F. Self -insured Retentions. Any self -insured retentions must be declared to
and approved by City. City reserves the right to require that self -insured
Hinderliter, De Llamas & Associates Page C-3
retentions be eliminated, lowered, or replaced by a deductible. Self-
insurance will not be considered to comply with these requirements unless
approved by City.
G. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
H. Timely Notice of Claims. Consultant shall give City prompt and timely notice
of claims made or suits instituted that arise out of or result from Consultant's
performance under this Agreement, and that involve or may involve
coverage under any of the required liability policies. City assumes no
obligation or liability by such notice, but has the right (but not the duty) to
monitor the handling of any such claim or claims if they are likely to involve
City.
Consultant's Insurance. Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own
judgment may be necessary for its proper protection and prosecution of the
Work.
Hinderliter, De Llamas & Associates Page C-4