REPORT TO COUNCIL
SUBJECT
Title
Action to Authorize the City Manager to Negotiate and Execute Agreements with Hinderliter, De Llamas, & Associates dba HdL Companies and HdL Coren and Cone for Sales, Use, Tax Audit and Recovery Services; Property Tax Audit and Management Services; Transient Occupancy Tax Audit Services; and Santa Clara Tourism Improvement District Assessment Audit and Compliance Services
Report
BACKGROUND
The City receives revenues from (a) sales, use, and transactions tax, (b) property tax, (c) transient occupancy tax (TOT), and (d) Community Facilities District and Santa Clara Tourism Improvement District special assessment fees. The two largest revenue sources for the City's General Fund are property tax and sales tax with revenues expected to total approximately $108 million and $76 million in FY 2026/27, respectively. The City is also projected to receive TOT revenues of approximately $31 million in FY 2026/27.
To ensure that the City is receiving all the revenues from the County of Santa Clara and the State of California, the Finance Department uses third-party consultants to audit tax records and recover misallocated revenues. The current agreements for tax audit and recovery services expire on June 30, 2026.
DISCUSSION
Pursuant to City Code Section 2.105.140(c), a formal Request for Proposals (RFP) was conducted, with the award recommendation based on "best value."
On January 6, 2026, the City released an RFP seeking proposals from qualified firms to provide the following services: (1) Sales, Use and Transaction Tax Audit and Recovery Services; (2) Property Tax Audit and Management Services; (3) Transient Occupancy Tax Audit and Compliance Services; and (4) Santa Clara Tourism Improvement District Assessment Audit and Compliance Services. Firms were allowed to submit proposals for any or all of the service categories. The RFP was published on the City's e-procurement system. Four proposals were received as follows:
* HdL Companies
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