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CC - CONSENT ITEM: (1) Adoption of a Resolution Authorizing Execution of Agreements with the California Department of Tax and Fee Administration to Administer and Collect the Local Transactions and Use Tax; (2) Adoption of a Resolution Authorizing Examination of Transactions and Use Tax Records; and (3) Approval of an Amendment to the Professional Services Agreement with Hinderliter, De Llamas for Transactions Tax Audit and Information Services.
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Meeting Date: September 29, 2025
Contact Person/Dept: Elizabeth Shavelson/Finance
Phone Number: (310) 253-5865
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Attachments: Yes [X] No []
Public Notification: (E-Mail) Meetings and Agendas - City Council (09/24/2025)
Department Approval: Lisa Soghor, Chief Financial Officer (09/22/2025)
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RECOMMENDATION
Staff recommends the City Council (1) adopt a Resolution authorizing the City Manager to execute a “Preparatory Agreement” and an “Administration Agreement” with the California Department of Tax and Fee Administration (CDTFA) to administer and collect the transactions and use tax for the City; (2) adopt a Resolution authorizing examination of transactions and use tax records; and (3) approve an amendment to the professional services agreement with Hinderliter, de Llamas and Associates for transactions tax audit and information services.
BACKGROUND
On April 14, 2025, the City Council approved a ballot measure amending the Culver City Municipal Code and providing for a local transactions and use tax of one quarter-cent (0.25%). This measure was submitted to the County of Los Angeles and included on the August 26, 2025 all-mail ballot special election designated as Measure CL. Measure CL was approved by over 67% of the voters. The CDTFA will administer and perform the services necessary to set up the transactions and use tax.
DISCUSSION
In order to implement the Measure CL, the City must execute the CDTFA agreement package and other related forms. CDTF requires the approval of two resolutions. The first resolution authorizing the City Manager to execute an “Administration Agreement” and “Preparatory Agreement” with CDTFA for the preparation and administration of Measure CL is provided as Attachment 1. The second resolution authorizing the City Manager, and other employees designated by the City Manager, and the City’s sales tax consultant, Hinderliter, de Llamas and Associates (should Council approve the proposed amendment), access to confidential tax data is provided as Attachment 2.
The City currently contracts with HdL for sales and transaction tax consultant services related to the City’s Bradley Burns sales tax, Measure C and Measure CC. Staff is satisfied with the quality of services HdL provides. In order for HdL to provide the same services for Measure CL, the City must amend its existing professional services agreement HdL. Culver City Municipal Code Section 3.07.065.A exempts professional services from formal bid procedures, provided competitive quotes are obtained whenever practical, as determined by the City Manager. Soliciting additional quotes at this time will likely delay the implementation of Measure CL. Given HdL’s history of providing the City with expert transactions and use tax services, and knowledge of the City’s other transaction taxes, staff recommends that the City amend its current agreement with HdL without soliciting competitive quotes.
Executed copies of the proposed Resolutions and agreements will be provided to the CDTFA, with the aim that CDTFA may begin the process to implement the tax effective January 1, 2026.
Additional forms required by CDTFA such as the contract information forms and media release forms will be prepared administratively by staff for transmittal to CDTFA.
FISCAL ANALYSIS
The City must reimburse CDTFA for the cost of preparatory services for the implementation of Measure CL. The exact costs are not known at this time but shall not exceed $175,000 per California Revenue and Taxation Code Section 7272. These costs will not be incurred for some time, and will be reflected in a future budget amendment for Measure CL. Ongoing administration costs will be deducted from the taxes collected by the CDTFA, as prescribed by law.
The base cost for the transaction and use tax services to be provided by HdL is anticipated to be $300 per month for the quarterly district transactions tax reports, which will increase annually based on the consumer price index, and a flat 25% of any initial recoveries received through their audit services.
ATTACHMENTS
1. 2025_9_29 ATT1 - Resolution Authorizing CDTFA Agreements to Implement Transactions and Use Tax (including Exhibit A - Preparatory Agreement, and Exhibit B - Administration Agreement)
2. 2025_9_29 ATT2 - Resolution Authorizing Examination of Tax Records
MOTION
That the City Council:
1. Adopt a Resolution authorizing the City Manager to execute a “Preparatory Agreement” and an “Administration Agreement” with the California Department of Tax and Fee Administration to administer and collect the transactions and use tax for the City;
2. Adopt a Resolution authorizing examination of transactions and use tax records;
3. Approve an amendment to the existing professional services agreement with Hinderliter, de Llamas and Associates for transactions tax audit and information services;
4. Authorize the City Attorney to review/prepare the necessary documents; and
5. Authorize the City Manager to execute such documents on behalf of the City.