Finance and Management Services
www.santa-ana.org/finance
Item # 9
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
May 6, 2025
TOPIC: Business License Tax and Fee Software Services
AGENDA TITLE
Agreement with Hinderliter, de Llamas and Associates (“HdL”) for Business License Tax and Fee Software Services (Specification No. 23-165) (General Fund & Non-General Fund)
RECOMMENDED ACTION
Authorize the City Manager to execute an agreement with Hinderliter, de Llamas and Associates (“HdL”) to provide business license tax and fee software services in an amount not to exceed $1,557,525, for a five-year term beginning April 15, 2025 and expiring April 14, 2030, with provisions for one 2-year extension, followed by two 1-year extensions (Agreement No. A-2025-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The Treasury & Customer Services Division (“TCS”) of the Finance and Management Services Agency (“FMSA”) is responsible for the administration, collection, and review of the City’s various business license taxes and fees. TCS currently oversees the following tax categories, which collectively account for approximately 17% of the City’s General Fund revenue:
• Non-Regulatory Business License Tax
• Business License Tax For Cannabis Business
• Hotel Visitors Tax
• Utility Users Tax For Electric, Gas & Telecommunications Services • Tourism Marketing Districts
All of the data and records associated to the above taxes (and related fees), in addition to the Proactive Rental Enforcement Program (“PREP”), are stored in the City’s in-house legacy Business Tax System (“BTS”). This system began operating in 2007 and has supported TCS operations for many years. As technology advanced, it became necessary to update the system. City staff determined a full enhancement to the in-house system would be more costly and time-consuming than switching to an external sytem. As such, staff concluded that a search for an outside system would be the best path forward.
Business License Tax and Fee Software Services
May 6, 2025
4 9
4 9
The City issued Request for Proposals (RFP) No. 23-165 on November 6, 2023, on the City’s online bid management and publication system. A summary of vendor participation and results is as follows:
638 Vendors Notified
0 Santa Ana Vendors Notified
34 Vendors Downloaded the RFP Packet
4 Responsive Proposal Received
0 Proposals Received from Santa Ana Vendors
The City solicited proposals, opened submittals on January 31, 2024, and subsequently evaluated the packets. Four (4) proposals were submitted by the RFP deadline, were determined to be responsive to the specifications, and met the City’s requirements. An evaluation committee reviewed the responsive proposals and rated them according to the criteria listed in the RFP.
Staff recommends awarding an agreement to the highest-ranked firm, Hinderliter, de Llamas and Associates (“HdL”) (Exhibit 1). The proposal submitted by HdL was found to be the most responsive to the City’s needs, offers the best value, and is appropriate for the services requested. HdL possesses strong qualifications, experience, and solid client references, along with a well-structured work plan that ensures a flexible and cost- effective taxation program. Furthermore, the City already secured an agreement with HdL for tax audit, analysis, forecasting, and reporting services. Integrating these services with the new business tax system will enhance the City’s taxation efforts, streamline collections, and help secure all revenues owed to the City. Staff also recommends awarding the contract for a term of up to nine years to allow sufficient time for system implementation, user acceptance testing, and operational familiarity. This duration will help ensure the system fully meets the City’s needs without compromising revenue collection efforts. The initial five-year term will focus on integrating the system with other programs, resolving technical issues, and identifying opportunities for process improvement. The optional extension period will support continued refinement and help establish stable, efficient workflows within the division's operations.
Local Outreach Efforts
The Purchasing Division advertised this project on the City’s online bid management and publication system, which directly notified zero Santa Ana vendors. Zero vendors downloaded the RFP and submitted a bid for consideration.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Funding is available in the FY 24-25 budget, including one-time funding for implementation services for the new software. Funding for subsequent fiscal years will be Business License Tax and Fee Software Services
May 6, 2025
4 9
4 9
included in the proposed budgets for City Council consideration. The annual contract cost is expected to be offset by revenues as the integration of these services with the new business tax system enhances the City’s taxation efforts and streamlines collections, which will increase collections due to improved efficiency and enhanced compliance.
Fiscal
Year
Accounting Unit –
Acct #
Fund
Description
Accounting Unit,
Acct Description Amount
2024-25 01110130-62300 General Fund Contract Services
Professional $300,000
2025-26 01110130-62300 General Fund Contact Services
Professional $256,450
2026-27 01110130-62300 General Fund Contract Services
Professional $138,575
2027-28 01110130-62300 General Fund Contract Services
Professional $138,575
2028-29 01110130-62300 General Fund Contract Services
Professional $138,575
2029-30* 01110130-62300 General Fund Contract Services
Professional $144,325
2030-31* 01110130-62300 General Fund Contact Services
Professional $144,325
2031-32* 01110130-62300 General Fund Contract Services
Professional $146,625
2032-33* 01110130-62300 General Fund Contract Services
Professional $150,075
Grand Total: $1,557,525
*Denotes an extension year, not part of initial term
EXHIBIT(S)
1. Consultant Agreement for HdL
2. RFP 23-165
Submitted By: Alexander Trinidad, Acting Executive Director, Finance and Management Services Agency
Approved By: Alvaro Nuñez, City Manager