City Council
Report
City Council Meeting: September 26, 2023
Agenda Item: 5.A
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To: Mayor and City Council
From: Gigi Decavalles-Hughes, Director, Finance Department, Revenue Subject: Approval of Second Modification to Agreement No. 9756 (CCS) with HdL Software, LLC for business license software
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines.
2. Authorize the City Manager to negotiate and execute a second modification to agreement #9756 (CCS) with HdL Software, LLC to extend the term three additional years and increase the contract amount by $90,797 for business license software services and software development services for the Finance Department. This will result in a 13-year amended agreement with a new total amount not to exceed $469,072, with future year funding contingent on Council budget approval.
Summary
Currently, HdL Software (HdL) provides business license software services to administer the billing and collection of business license taxes as well as certain assessments, fees, and regulatory permits. The City is in the process of conducting a comprehensive review of the City’s Business License Tax program. Staff plans to bring an updated ordinance to City voters in 2024. A second modification to the agreement would ensure continued software maintenance that is used to support the administration of business licensing, including billing and payment processing requirements. Staff recommends a second modification to agreement #9756 to increase the contract amount by an additional $90,797 with a total not to exceed $469,072 and extend the term for an additional three years for a total term of 13 years. 2 of 4
Discussion
The City’s Municipal Code allows the Finance Department to levy and collect business license tax. The business license tax program supports the overall well-being of Santa Monica by funding essential services, such as public safety, community recreation and economic development. The management of the business license tax collections requires specialized software.
The City has been utilizing HdL’s business license software since 1998. The City oversees approximately 23,000 business license accounts and collects approximately $34.5 million in tax, assessment, and fee revenue annually. Staff is currently conducting a strategic, comprehensive review and modernization of the City’s Business License Tax program to align with the Council’s FY 2023-25 priority to Cultivate Economic Recovery & Expand Community & Cultural Offerings. The results of this study would likely result in a restructuring of the current Business License Tax code, which would require voter approval. Staff will complete an analysis and determine whether it will recommend that the Council bring the updated ordinance to City voters in November 2024. The outcome could have a significant impact on the City's requirements for a business license system. While staff analyzes and works on strategies to modernize the Business License Tax program, ensuring that there is no interruption in the existing business license system services is critical. Since the results of this effort would likely impact technology needs, staff believes that it is best to delay the procurement process for a new Business License Tax software until after the election when the Business License Tax Modernization measures, if approved, would be implemented. The City’s current agreement for business license software with HdL expires November 12, 2023.
Therefore, the extension of the current contract until after the election is the most prudent course of action. In addition, staff would proceed with the issuance of an RFP for these services during the extension period and return to Council to request approval of award for a new agreement.
Environmental Review
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The award agreement is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The award agreement is covered by the common sense exemption which states that CEQA does not apply, “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 modification will allow the City to continue to utilize its business license software. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Past Council Actions
Financial Impacts and Budget Actions
Staff seeks authority to approve available funding from the General Fund to increase the amount of agreement #9756 with HdL to provide business license software services and software development services.
Agreement Modification Request
Agreement
#
Current
Authorize
Amount
FY 2023-24
Modified Request
Amount
Future Year
Modified Request
Amount
Department
Account #
Total Contract
Amount
9756 $378,275 $16,689 $74,108 01300005.529230 $469,072
Future year funding is contingent on Council budget approval.
Meeting Date Description
6/25/2013
(Attachment A)
Authorize agreement with HdL for business license
software maintenance and support services.
10/23/2018
(Attachment B)
Approval of First Modification to Agreement No. 9756
(CCS) for Business License Software Maintenance and
Support Services and Software Development Services.
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Prepared By: David Carr, Assistant City Treasurer
Approved Forwarded to Council
Attachments:
A. Attachment A - HdL Prime Software Agg #9756 CCS
B. Attachment B - HdL Modification to Contract 9756_fully executed C. Executed HdL Renewal Letter for Business
D. HdL Software OAKS FY 23-24