PREPARED BY: ARTURO CASTILLO DATE OF MEETING: 03/16/2026
SUBJECT:
TITLE
CONSIDER ADOPTING A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO AUTHORIZING THE CITY MANAGER TO EXECUTE A MASTER SERVICES AGREEMENT WITH HINDERLITER DE LLAMAS AND ASSOCIATES (HDL) FOR SALES AND USE TAX AUDITING, ALLOCATION AND AUDIT RECOVERY, ECONOMIC ANALYSIS, FORECASTING, REPORTING, AND RELATED CONSULTING SERVICES
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
BODY
COMPLIANCE STATEMENTS
FY 2025-2027 Council Priority Workplan Compliance Statements:
Continue Best Management Practices, Fiscal Excellence, and Fiscal Transparency is a major policy goal contained in the adopted Fiscal Year 2025-2027 City Council Priority Workplan, effective April 7, 2025.
BACKGROUND
Since 2009, the City of San Pablo has contracted with Hinderliter de Llamas and Associates (HdL) and the related entity HdL Coren & Cone for sales and use tax auditing, property tax auditing, and related consulting services. HdL provides specialized expertise in monitoring and management of local tax revenues administered by the California Department of Tax and Fee Administration (CDTFA), helping ensure that the City receives all revenues to which it is entitled.
HdL has consolidated its related service lines under a new Master Services Agreement. Staff recommends that the City enter into this agreement, effective March 1, 2026, to reestablish and continue HdL’s services. The agreement provides the City with sales and uses tax economic analysis, forecasting, and quarterly reporting; allocation and audit recovery services to identify and correct distribution errors with the CDTFA; and as-needed consulting on technical revenue matters.
Under the agreement, the two primary fee components are: (1) a monthly fee of $617 per measure for economic analysis and forecasting services, adjusted annually by the Consumer Price Index (CPI-U), invoiced quarterly in arrears; and (2) an audit recovery fee of 18% of all new, increased, and recovered sales and use tax revenue received by the City as a result of HdL’s audit and recovery work. Hourly consulting services are also available on an as-needed basis at rates ranging from $195 to $325 depending on staff level. The initial term is five years, with automatic twelve-month renewals unless terminated by either party with 120 days’ written notice.
Under the prior agreements, HdL has performed competently in ensuring that the City’s tax revenues were accurately credited through periodic reviews of records and identification of errors for correction.
FISCAL IMPACT
The cost of this agreement will be charged to the Finance Department professional services budget line item (100-1420-43600). Sufficient funds are available in the current fiscal year budget for this purpose; therefore, no new appropriations are needed at this time.
ATTACHMENTS:
Att A - Proposed Resolution
Exh 1 - Master Services Agreement with Hinderliter de Llamas and Associates