CITY OF POMONA
COUNCIL REPORT
July 18, 2022
To: Honorable Mayor and Members of the City Council
From: James Makshanoff, City Manager
Submitted By: Andrew Mowbray, Finance Director / City Treasurer SUBJECT: AWARD OF CONTRACT TO HDL COMPANIES FOR SHORT TERM RENTAL ADMINISTRATION AND REPORTING SOFTWARE PORTAL RECOMMENDATION:
It is recommended that the City Council take the following action:
Approve an award of a three-year agreement with two one-year renewal options with HdL Companies (HdL) to provide Short Term Rental Administration and Reporting Software Portal.
Authorize the City Manager to execute the agreement and any documents/amendments, upon the review of the City Attorney.
EXECUTIVE SUMMARY:
The services provided by HdL for short term rental administration will be similar to the business license Discovery and Audit Services. HdL will identify, register, and collect taxes due from short term rentals. HdL will not be completing compliance or enforcement actions for short-term rentals.
FISCAL IMPACT:
There is sufficient funding in the contract services budget (Acct # 101-0101-52274) to cover the per rental monthly expense ($15) for Fiscal Year 2022-23, estimated total not to exceed $15,000 annually. Future contract costs will be budgeted for in the appropriate fiscal year. The revenue captured through the discovery and audit process will offset the costs. Revenues received from this contract will not be realized until the middle of the first year due to contract / software set up and initial discovery and outreach. Once revenues are realized an adjustment to the Transient Occupancy Tax revenues, estimated to be about $500k annually, may be required during the Fiscal Year 2022-23 mid-year budget process.
PUBLIC NOTICING REQUIREMENTS:
Noticing requirements set forth in Section 2-993.1 of the City’s Purchasing Ordinance requires that a notice requesting proposal be published at least 10 days before the date of the opening have been met. The request for proposals was published March 23, 2022 with a bid due date of April 20, 2022.
DISCUSSION:
While the City could continue to administrate the discovery and transient occupancy tax collections involved with Short Term Rentals, there is the potential to capture additional revenue through a professional services agreement with HdL to administer these services.
On March 23, 2022, a Request for Proposal was released using the City of Pomona’s electronic bidding platform. The bid was sent to 223 potential bidders, 18 potential bidders downloaded the bid, resulting in the city receiving three (3) bids. All proposals were reviewed by a team of three. The team was composed of three Finance Department staff members. The proposals were evaluated in the areas of overall project approach, firm qualifications, experience, qualifications, and technical skills. Final scores were tabulated based upon the proposal review and cost. The final rankings were determined based on the ranked scores and are indicated below in Table 1.
Table 1
Ranking
Firm
Final Score
1 HdL
199
2 Granicus
190
3 LTAS
135
The Short-Term Rental (STR) Program provided by HdL takes a unique approach in ensuring compliance and educating lodging providers, including short term rental hosts (STR Hosts), in transient occupancy tax regulations and filing procedures and business licensing. HdL’s program involves a modular, customer service centric approach, that reduces City administrative costs and provides the City with assurances of future compliance and reporting practices from the City’s short-term rental lodging industry. With input from the City, HdL will customize a website and domain for taxpayers to submit forms, returns, and payments along with other customer support related items. City staff will have access to a portal to export standard and customizable reports in real time.
In order to increase efficiency and capture the potential additional revenues, staff recommends that City Council authorize the City Manager to enter into an agreement with HdL for Short Term Rental Administration and Reporting Software Portal.
Prepared by:
Shar Perez
Revenue Operations Manager
Award of Contract for Short Term Rental Administration