CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 30, 2026 CONSENT CALENDAR
SUBJECT: APPROVE AMENDMENT NO. 2 TO CONTRACT SERVICE AGREEMENT NO. A9084 WITH NEUMO TAX AND LICENSING, LLC FOR SHORT
TERM RENTAL ADMINISTRATION AND COMPLIANCE SOFTWARE
FROM: Scott C. Stiles, City Manager
BY: Special Program Compliance
SUMMARY:
This action will approve Amendment No. 2 (Amendment) to Contract Services Agreement No. A9084 with Neumo Tax and Licensing, LLC (Neumo), to extend the term of the agreement for one year, ending September 30, 2027, for an additional amount of $108,481 and a revised contract amount not to exceed $516,181 to provide ongoing short term rental administration and compliance software services.
RECOMMENDATION:
1) Approve Amendment No. 2 (Attachment A) to Contract Services Agreement No.
A9084 with Neumo Tax and Licensing, LLC to provide ongoing short term rental administration and compliance services extending the term through September 31, 2027 for an additional amount of $108,481, and for a revised contract amount not to exceed $516,181;
2) Authorize the City Manager or designee to execute all necessary documents subject to such changes/revisions agreeable to the City Manager and City Attorney.
BUSINESS PRINCIPAL DISCLOSURE:
Neumo Tax & Licensing, LLC public integrity disclosure form is included as Attachment B.
BACKGROUND:
As a result of RFP 07-22, on March 31, 2022, the City of Palm Springs (“City”) entered into an agreement with GovOS, Inc. (“GovOS”), titled Short-Term Rental Compliance Services with GovOS, Inc., for the provision of short-term rental compliance services. The
City Council Staff Report
September 30, 2026 -- Page 2
Amendment to Agreement No. 9084 with Neumo Tax and Licensing LLC Agreement provided for an initial term of three years and six months, with an annual compensation amount not to exceed $90,000.
On October 1, 2025, the Agreement was amended to extend the term for one year, through September 30, 2026, and increase the annual compensation to $92,700 for a revised contract amount not to exceed $407,700.
On May 5, 2026, the City, GovOS, and Neumo Tax & Licensing, LLC (“Neumo”) entered into an Assignment, Assumption and Consent Agreement. Under the agreement, GovOS assigned its rights and obligations under the Short-Term Rental Compliance Contract Services Agreement to Neumo, and Neumo assumed GovOS’s obligations under the Agreement. As a result of the assignment, Neumo currently provides the City’s short term rental compliance services under the terms of the Agreement, as amended.
STAFF ANALYSIS:
Neumo Tax & Licensing, LLC (“Neumo”) provides the City of Palm Springs with a cloud- based software platform that supports tax administration, licensing, and regulatory compliance functions, primarily for the City’s Vacation Rental Program. Services currently provided through the platform include:
Short-term vacation rental detection, monitoring, and compliance services; Complaint hotline services;
Automated online licensing, registration, and payment processing; Integrated notification and delinquency management;
Automated online Transient Occupancy Tax (TOT) remittance and reporting; Vacation rental Contract Summary submission, processing, and database management; and
Online reporting and administrative tools for City staff.
The platform provides permit holders and taxpayers with 24-hour access to online self- service functions while providing City staff with automated workflows, centralized records, and reporting capabilities designed to reduce manual processing and improve administrative efficiency.
Since implementation, the Department of Special Program Compliance has transitioned its Vacation Rental Program from a primarily paper-based application process to a fully electronic workflow. Vacation rental permit holders can now submit applications, supporting documentation, and payments online rather than mailing or delivering paper applications and payments to City offices. The platform has also improved the administration of TOT by transitioning filings from paper submissions to electronic reporting, including the electronic filing of zero-dollar tax returns. These improvements have reduced manual processing and provided a more streamlined process for both customers and City staff.
City Council Staff Report
September 30, 2026 -- Page 3
Amendment to Agreement No. 9084 with Neumo Tax and Licensing LLC The Neumo platform has become an important component of the Department’s efforts to improve operational efficiency, customer service, tax administration, and regulatory compliance. Continuation of the existing services for an additional year will provide operational continuity while also allowing Neumo to develop and implement the necessary reporting functionality for collection of the recently approved PSTID assessment.
Beginning in fall 2026 and continuing into calendar year 2027, the Department of Special Program Compliance intends to work with the Procurement & Contracting Department to conduct a Request for Proposals (RFP) for tax, licensing, and compliance software services. The competitive solicitation will provide the City an opportunity to evaluate available technologies, service capabilities, costs, system integrations, and the evolving operational needs of the Department before entering into a new long-term agreement.
The proposed one-year extension will provide sufficient time to complete the competitive solicitation, evaluate proposals, select a vendor, obtain any necessary approvals, and, if applicable, allow for an orderly system transition and implementation without interruption to the City’s vacation rental, TOT, and related compliance operations.
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve contracts for the above-mentioned services, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
This item aligns with the following City Council Strategic Plan Broad Goal: Infrastructure and Facilities.
FISCAL IMPACT:
Sufficient funds are budgeted in Fiscal Year 2026-2027 in the Department of Special Program Compliance Contractual Service 1001045-40105 and Finance account 1001035-40105.
REVIEWED BY:
Department Director: Patrick Clifford (Acting)
Assistant City Manager: Teresa Gallavan
City Manager: Scott Stiles
City Council Staff Report
September 30, 2026 -- Page 4
Amendment to Agreement No. 9084 with Neumo Tax and Licensing LLC ATTACHMENTS:
A. Amendment 2 to Contract Services Agreement A9084.
B. Business Disclosure.
C. Contract Services Agreement Contract A9084.
D. Amendment 1 to Contract Services Agreement Contract A9084.
E. Assignment Assumption and Consent Agreement to Contract Services Agreement Contract A9084.