23-0919_HDL COMPANIES_Agenda Report_E7City of San Juan Capistrano
Agenda Report
TO: Honorable Mayor and Members of the City Council
FROM: Benjamin Siegel, City Manager
SUBMITTED BY: Ken Al-Imam, Chief Financial Officer
DATE: September 19, 2023
SUBJECT: Amendment to the Agreement with HdL Companies for Sales Tax
Consulting Services
RECOMMENDATION:
Approve and authorize the City Manager to sign Amendment No. 1 to the Agreement with
HdL Companies for sales tax consulting services.
DISCUSSION/ANALYSIS:
In 2020 the City entered into a five-year agreement with HdL Companies (HdL) to provide
sales tax consulting services. Under that agreement, the City pays HdL $700 per month
for basic sales tax consulting services. In addition to this basic fee, the City pays HdL for
a period not exceeding two years a fifteen percent recovery fee for any sales tax
adjustments that are identified by HdL’s sales tax audits that result in additional revenue
for the City. Over the past three years, HdL’s sales tax audit and recovery team identified
$206,797 of revenue that were reassigned to the City as a result of HdL’s sales tax audits.
Due to the magnitude of these sales tax recoveries and the resultant payment of the fifteen
percent recovery fee, the City is expected to exceed the $45,000 maximum compensation
that was set forth in the City’s original five-year agreement with HdL.
To address this issue, staff recommends that the agreement be retroactively amended to
exclude sales tax audit and recovery fees from the compensation maximum set forth in the
agreement. Staff further recommends that the term of the agreement be extended five
additional years in recognition of HdL’s excellent service to the City. Accordingly, the
proposed amendment reflects a $45,000 increase in the maximum compensation set forth
in the agreement to reflect the proposed five-year extension of the term of the agreement.
9/19/2023
E7
City Council Agenda Report
September 19, 2023
Page 2 of 2
FISCAL IMPACT:
This amendment would extend the City’s agreement with HdL Companies for an
additional five years without changing the amount that is paid each year for sales tax
consulting services or sales tax audit and recovery services.
ENVIRONMENTAL IMPACT:
Not applicable.
PRIOR CITY COUNCIL REVIEW:
Not applicable.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
This item does not go through the Commission/Committee review process.
NOTIFICATION:
• Andy Nickerson, President, HdL Companies
ATTACHMENTS:
Attachment 1 – Amendment No. 1 to the Agreement with HdL Companies
Attachment 2 – Agreement with HdL Companies
Page 1 of 3
AMENDMENT NO. 1
TO THE PROFESSIONAL SERVICES AGREEMENT
BETWEEN
THE CITY OF SAN JUAN CAPISTRANO
AND
HDL COMPANIES
1.Parties and Date.
This Amendment No. 1 to the Professional Services Agreement (“Amendment No.
1”) is made and entered into as of this 19th day of September, 2023, (“Effective Date”) by and
between the City of San Juan Capistrano, a municipal organization organized under the laws of the
State of California with its principal place of business at 32400 Paseo Adelanto, San Juan
Capistrano, California 92675 (“City”) and HdL Companies, a Corporation, with its principal place of
business at 120 S. State College Blvd., Ste 200, Brea, CA 92821 (hereinafter referred to as
“Consultant”). City and Consultant are sometimes individually referred to as “Party” and collectively
as “Parties” in this Amendment.”
2. Recitals.
2.1 Consultant. The City and Consultant have entered into an agreement entitled
“Professional Services Agreement” dated July 1, 2020, (“Agreement”) for the purpose of retaining
Consultant to provide sales tax consulting services.
2.2 Amendment Purpose. The City and Consultant desire to amend the Agreement to
exclude the cost of sales tax audit and recovery services from the maximum compensation set forth
in the Agreement and to extend the term for an additional five years ending on June 30, 2030. All
other terms and conditions will remain the same as noted in the original agreement.
3. Terms.
3.1 Amendment. Sections 2 and Section 5 of the Agreement are hereby amended in
their entirety to read as set forth below. The amended terms of Section 2 (Compensation) will be
applied retroactively to the inception of the Agreement.
2. Compensation.
a.Subject to paragraph 2(b) below, the City shall pay for such services
in accordance with the Schedule of Charges set forth in Exhibit “B.”
ATTACHMENT 1
Page 2 of 3
b. In no event shall the total amount paid for services rendered by
Consultant under this Agreement, excluding all amounts paid since the inception of the
Agreement for audit and recovery services, exceed the sum of $ 90,000.00. This amount
includes any printing and related costs, and the City will not pay any additional fees for
printing expenses. Periodic payments to Consultant shall be made within 30 days of
receipt of an invoice, which shall include a detailed description of the work performed by
Consultant.
5. Term
The term of this Agreement shall be from July 1, 2020 to June 30, 2030, unless
earlier terminated as provided herein. Consultant shall perform its services in a prompt
and timely manner within the term of this Agreement.
3.2 Continuing Effect of Agreement. Except as amended by this Amendment No. 1, all
other provisions of the Agreement shall remain in full force and effect and shall govern the actions
of the Parties under this Amendment No. 1. From and after the Effective Date of this Amendment
No. 1, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as
amended by this Amendment No. 1.
3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that
they have each received adequate and independent consideration for the performance of the
obligations they have undertaken pursuant to this Amendment No. 1.
3.4 Severability. If any portion of this Amendment No. 1 is declared invalid, illegal, or
otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall
continue in full force and effect.
3.5 Counterparts. This Amendment No. 1 may be executed in one or more counterparts.
Each counterpart shall be deemed an original, and all counterparts shall be deemed the same
instrument with the same effect as if all Parties hereto had signed the same signature page.
[Signatures on Next Page]
ATTACHMENT 1
Page 3 of 3
SIGNATURE PAGE FOR AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN JUAN CAPISTRANO
AND HDL COMPANIES
CITY OF SAN JUAN CAPISTRANO
Approved By:
Benjamin Siegel
City Manager
Date
Attested By:
Maria Morris, City Clerk
Approved As To Form:
City Attorney
HDL COMPANIES
Approved By:
Signature
Name
Title
Date
September 8, 2023
ATTACHMENT 1
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2
ATTACHMENT 2