EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: September 20, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Greg Henry, Senior Management Analyst
Greg Henry, Senior Management Analyst
SUBJECT: Convenience Fee for Online Payments of Business License Tax and Penalties Recommendation
Adopt a resolution authorizing the City Manager to set a convenience fee minimum for the use of credit cards and e-check transactions for online payments of Business License Tax and Penalties.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 2: Enhance Economic Vitality
Priority No. 3: Increase Organizational Effectiveness and Efficiency Background
On June 7, 2022 the City Council approved a three-year agreement with Hinderliter De Llamas & Associates (HdL) to provide Business License Tax Administration Service. As a reminder, the services will provide a turnkey approach for the City. HdL has a team of experts that can manage all the business tax operations conducted by the City. When combined with the Compliance Management services, the City will receive the benefit of increased revenues and superior customer service, while reducing internal costs and gaining efficiencies, a “trifecta” of increasing city revenues and support to the business community while simultaneously reducing costs.
HdL has provided a brochure of their products here:
https://www2.hdlcompanies.com/misc/HdL%20Services%20Brochure.pdf HdL’s online portal was determined to be the best offered solution with the greatest ease of use and the highest level of sophistication for the City’s businesses. The City’s website will be the starting point for all web-based activities. HdL’s City specific site will look and feel like the City’s own web pages, which ensures a level of continuity between the business community, the City and HdL.
HdL’s website offers a variety of online functions to service the business community. While most of the website is a self-service platform for the business community, HdL staff reviews each account processed online for accuracy and compliance with City guidelines and procedures. Besides filing and paying for taxes, businesses can:
· Submit a closure request
· Pay a balance due
· Update account information
· Print Certificates
· Make public record inquiries
HdL has notified the City of anticipated operational transfer date of October 24, 2022.
Analysis
HdL’s payment acceptance process accepts the following payment types:
· Check / Money Order /Cashier’s Check
· E-Check
· Debit Cards
· Credit Cards (Visa, Mastercard, Discover, and American Express) · Check by Phone
However, when businesses make payments via credit card or e-check there is an additional charge by the payment processors (not HdL) for using their services. As a result, it is appropriate for the City to pass that additional cost on to the businesses utilizing this new service on order to protect the City’s revenue.
Fiscal Impact
Business paying their annual Business License Tax and Penalties will be charged a convenience fee for each online payment transaction. They will have the option to mail in a check, money order or cashier’s check for no additional fee. Currently, the convenience fee is
2.9% or $2.00 minimum for credit cards and $1.25 for each e-check. If the payment processors increase their fees, the increases will be passed on to those utilizing credit cards or echecks.
Public Notice
The public was provided notice by making the agenda and report available on the City’s website and on a bulletin board located at City Hall: 2415 University Avenue, East Palo Alto.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Attachments
A. Resolution Convenience Fee for Online Payments of Business License Tax and Penalties