City of Corona
Staff Report
400 S. Vicentia Ave.
Corona, CA 92882
File #: 22-0571
REQUEST FOR CITY COUNCIL ACTION
DATE: 07/06/2022
TO: Honorable Mayor and City Council Members
FROM: Finance Department
SUBJECT:
Approval of the Fifth Amendment to the Professional Services Agreement with HDL Software, LLC for business license program services.
EXECUTIVE SUMMARY:
City Council consideration of a Fifth Amendment to the Professional Services Agreement with HDL Software, LLC in the amount of $250,000. HDL Software, LLC, administers the day-to-day operations of the City’s business license program. The day-to-day operations of the business license program include processing new businesses, annual renewals, payment processing, and customer support.
RECOMMENDED ACTION:
That the City Council:
a. Approve the Fifth Amendment to the Agreement with HDL Software LLC to extend the contract terms through June 30, 2023, for business license program services. b. Authorize the Purchasing Agent to issue a purchase order for Fiscal Year 2023 to HDL Software LLC for $250,000.
BACKGROUND & HISTORY:
The day-to-day operations of the business license program include processing new businesses, annual renewals, payment processing, and customer support. The City Council approved outsourcing the administration of the business license program to HDL Software LLC in October 2016. The change was effective in March 2017. The most recent contract expired June 30, 2022, and Staff recommends a contract extension through June 2023.
ANALYSIS:
HDL Software LLC (Consultant) was selected in 2016 to administer the day-to-day operations of the City of Corona Page 1 of 3 Printed on 6/30/2022
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File #: 22-0571
HDL Software LLC (Consultant) was selected in 2016 to administer the day-to-day operations of the City’s business license program. To Staff’s knowledge, HDL was the only vendor at the time that was providing a full-service administrative option. The Consultant was selected through a competitive bidding process by piggy-backing on an existing agreement between the Consultant and the City of Pacific Grove. The City received similar cost and contract terms. The Consultant was selected based on their expertise in the business license field, including 34 years (as of 2016) of providing software applications and professional services to local governments. Its audit and consulting services include streamlining processes, reducing costs, increasing revenues, and providing greater efficiency and productivity for municipalities similar to the City of Corona.
The original agreement in 2016 was for a five-year period, through October 2021. On July 7, 2021, the contract was extended to June 30, 2022. With the agreement term expired, Staff requests another extension through June 30, 2023. The cost for HDL to operate the program is $15.15 per business license. Some additional costs for audit and recovery services are calculated as one-time compensation at 35% of the business license fees for any non-reporting business that is brought into compliance. The total estimated cost for HDL to provide the service is $250,000 per year. That estimate includes the administrative service costs and the software to manage the business license information. The annual costs will fluctuate based on the number of business licenses processed in a given year (new or renewal). The contract value is $250,000 to accommodate for fluctuations in the volume of business licenses as well as the audit and recovery fees. The Consultant processes approximately 9,000 to 12,000 City of Corona business licenses per year.
The current recommendation is to extend the agreement through June 30, 2023. HDL is meeting its contractual obligations and is administering the program in a satisfactory manner. To Staff’s knowledge, HDL is still the only company currently offering the full day-to-day administrative services of the business license program. However, Staff will conduct a Request for Proposals during Fiscal Year 2023 to evaluate options for future operations of the program.
COMMITTEE ACTION:
At the March 24, 2021 Study Session, there was a discussion on the business license program administration. A presentation provided an overview of the program and a cost comparison of inhouse staffing vs. outsourcing. During the March Study Session meeting, Council gave direction to continue outsourcing this function.
FINANCIAL IMPACT:
There is no additional financial impact for approval of the recommended actions. The contract value is currently up to $250,000. The actual amount varies each year, based on the number of business licenses processed by the Consultant. The contract value is included in the Finance Department’s FY 2023 Adopted Budget.
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (CEQA), which states that a project is exempt from CEQA if the activity is City of Corona Page 2 of 3 Printed on 6/30/2022
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File #: 22-0571
Environmental Quality Act (CEQA), which states that a project is exempt from CEQA if the activity is covered by the general rule that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This action is to approve a contract extension and there is no possibility that approval will have a significant effect on the environment. Therefore, no environmental analysis is required.
PREPARED BY: JULIE KENNICUTT, BUDGET MANAGER
REVIEWED BY: KIM SITTON, FINANCE DIRECTOR
Attachments:
1. Exhibit 1 - Fifth Amendment to Professional Services Agreement with HDL Software LLC City of Corona Page 3 of 3 Printed on 6/30/2022
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