From: Jim Wilk
To: Farrell, Lori Ann; Wagner, Scott
Cc: Stapp, Mark; City Clerk; Nutt, Jason; Christian Fea Subject: [EXTERNAL] Subject: Modernizing Santa Rosa"s Cannabis Tax, UUT, and Business License Collections — A Revenue-Protection Conversation
Date: Monday, May 4, 2026 11:09:13 AM
Good Monday morning Lori Ann and Scott,
Jim Wilk of Monarch Technologies here. Welcome to Santa Rosa. I've been following the FY 2025-26 budget process closely — the $551.3M adopted budget, the $19.3M starting deficit reduced to $6.7M after the $13.4M in cuts, and the five- year outlook projecting $46.6M in cumulative shortfall if structural pressures hold.
Coming in mid-cycle on top of that picture, with 76% of the General Fund locked in salaries and benefits, is not a small inheritance.
I'm writing because I think Monarch Technologies can help Santa Rosa close a meaningful piece of that gap — without rate increases, additional service cuts, or new ballot measures beyond the two voters already approved last November. Three of the City's revenue streams — the cannabis business tax, the 5% Utility Users Tax, and the modernizing business license tax — are areas where modern automation routinely recovers 5–15% of revenue that quietly leaks out of legacy self-reporting systems.
Before I get to the pitch, one piece of context: I know Santa Rosa's relationship with HdL Companies runs deep. HdL has administered the City's Business Tax program since October 26, 2018, hosts the Cannabis Business Tax portal infrastructure, and runs the TOT support function under the [email protected] line. That's
substantial work and this letter isn't a pitch to displace it. What I'm proposing is the technology layer that sits underneath HdL's existing administration — turning the data already flowing through their portals into continuous verification, not periodic findings.
Cannabis Tax — METRC and POS Integration
Santa Rosa's cannabis program — anchored in Sonoma County's cultivation ecosystem and the City's retail framework — depends on operator self-reporting through the HdL-hosted Cannabis Business Tax portal. The portal does its job competently. But by design, it accepts what operators report. It doesn't independently verify what they actually transacted. Our Monarch Tax Authority (MTA) platform integrates directly with METRC, California's state-mandated seed- to-sale tracking system, and operator point-of-sale systems. Instead of accepting what operators report, MTA cross-checks what they reported against what the data shows actually happened — continuously, not quarterly. The HdL portal continues collecting filings exactly as it does today; MTA verifies underneath that what flows in matches what crossed the counter or moved out of the cultivation site.
We've delivered this for Lancaster and Desert Hot Springs — two Southern California cities where HdL was also active — and in both cases MTA identified material recovery that the existing audit cycle had not surfaced. Both are now extremely satisfied with the platform's accuracy and the visibility it gives leadership over the cannabis revenue stream.
Utility Users Tax — Closing the "Black Box"
Santa Rosa's 5% UUT — applied to electric, gas, telephone, and cable TV under Measure N (2014) and Title 3 Chapter 3.32 — is a critical General Fund revenue, and unlike business tax and cannabis tax, this stream is administered directly by the City rather than through an HdL portal. UUT operates as a "black box" that depends on utility providers correctly interpreting Santa Rosa's local ordinance and remitting accurately. Our TRAC.tax UUT platform turns that trust into verifiable certainty:
1. Automated nexus & boundary mapping — eliminates address-level errors that misallocate utility tax between the City and unincorporated Sonoma County, particularly along the Roseland and southwest corridor boundaries.
2. Real-time remittance tracking — replaces the monthly paper-and-check cycle with a digital provider portal that flags under-reporting or late payments (and the associated 10–15% penalties) the moment they occur.
3. Audit "look-back" — verifies that providers are correctly applying the 5% rate across electric, gas, telephone (landline), and cable TV, including VoIP and bundled digital services that consistently slip through legacy systems.
4. $1,000-per-utility cap enforcement — automates the per-location annual cap calculation, eliminating the manual reconciliation work that creates errors at the highest-usage commercial accounts.
Because UUT sits outside the HdL administrative footprint at Santa Rosa, the UUT pilot is fully independent — no displacement, no operational disruption to anything HdL currently runs.
Business License Tax — Discovery and Compliance
Voters approved business license tax modernization in November 2024, and the City is projecting $3M from that measure (paired with the hotel tax increase). HdL's portal handles the renewal and remittance side of that program well. What HdL's tooling is not built to do — and what Monarch specifically does — is the discovery layer underneath: identifying businesses that should be registered but aren't:
1. Discovery & compliance — cross-references Secretary of State filings, sales tax registrations (which HdL is already pulling for you), fictitious business name records, online business activity, gig-economy operator records, and short-term rental platform data to identify operators not currently registered with the City. This is where the 5–15% recovery typically appears first, and where the new modernized rate structure pays off the most.
2. Renewal compliance flagging — flags registered businesses that have stopped filing or whose remittance pattern suggests structural under-reporting, complementing HdL's existing renewal workflow.
3. Cannabis-business-license integration — links cannabis annual licensing directly with general business tax registration, eliminating the dual-tracking that creates leakage between the two.
4. Unified Finance dashboard — single view across cannabis, UUT, business license, and TOT, with full audit trail that complements HdL's reporting rather than duplicating it.
Coexisting with HdL
To be concrete about how this fits alongside Santa Rosa's existing arrangements:
HdL Companies continues to administer business tax, cannabis business tax, and TOT through its existing portals. Monarch handles real-time cannabis verification, UUT automation, and business license discovery through MTA and TRAC.tax. The scopes don't overlap, and our platform delivers data to Finance in formats your existing reporting workflows can ingest. If at some point Santa Rosa wanted to consolidate revenue administration under a single vendor, that's a separate conversation — but it's not what I'm proposing today.
Monarch recently entered into a partnership with Gold Coast Partners, combining technology and infrastructure expertise in a delivery model that keeps the City — not the consultant — in control of the revenue stream and the data.
Lori Ann — given your finance background and the realities of stepping into Santa Rosa mid-deficit-cycle, I suspect you'd want to know if real-time data was surfacing recovery opportunities the current administration cycle isn't catching. I'd welcome a 20-minute conversation with you and Scott— no pitch deck, just a direct look at what MTA sees in a comparable program and what a low-risk pilot scope on one revenue stream (cannabis or UUT is the most natural starting point) would look like for the FY 2026-27 budget cycle. We're not asking the City to displace existing systems or commit to a long-term contract — the goal is measurable recovery on a defined scope, then expand if the numbers justify it.
Please call me directly or schedule a time at the link below.
Looking forward,
Jim Wilk
Chief Experience Officer (CXO)
Monarch Technologies Inc.
NMLS #1906316
[email protected]
www.monarch.is
818-321-3200
Schedule a call
From: Chris Guenther
To: City Council Public Comments
Subject: [EXTERNAL] City Council 5/5 & 5/6 – Item 3.1
Date: Monday, May 4, 2026 2:52:32 PM
Attachments: Study Session Comments 5_4_26.pdf
Please see attached comment for the upcoming City Council study session.
Thanks,
Chris G.
415-265-9378
May 4, 2026 Santa Rosa City Council 100 Santa Rosa Ave, Room 10 Santa Rosa, CA 95404 Re: 5/5/26 & 5/6/26, Item 3.1: REVIEW OF FISCAL YEAR 2026-27 OPERATIONS AND MAINTENANCE BUDGET
AND
CAPITAL
IMPROVEMENT
PROGRAM
BUDGET
Dear Mayor Stapp and Councilmembers, Happy National Bike Month! As you hear reports this week on the state of our city’s budget, the Bikeable Santa Rosa campaign encourages
you
to
continue
your
“fix
it
first”
approach
to
transportation
infrastructure
and
capital
improvement
investments.
Because walking and biking do so much less damage to city roads and infrastructure as compared to
cars
and
trucks,
ensuring
active
transportation
users
are
supported
with
safe
routes
to
their
destinations
is
an
effective
means
of
ensuring
our
streets
stay
smooth
for
longer.
In
addition,
as
more
citizens
shift
to
active
options,
our
city’s
air
will
become
less
polluted,
there
will
be
less
traffic
(and
with
less
traffic,
less
traffic
violence
and
noise
pollution),
and
our
climate
emissions
will
be
reduced.
For all these reasons, Santa Rosa should not spend precious transportation dollars on projects that widen
roads
or
expand
infrastructure
for
cars
and
trucks,
and
should
use
the
money
instead
to
fix
our
existing
roads
while
simultaneously
building
out
our
much-needed
active
transportation
network.
We
believe
this
is
the
approach
the
City
has
currently
been
taking
and
we
strongly
support
it.
We also recommend that the City continue to encourage, by whatever mechanisms available, medium-
and
high-density
housing
developments
close
to
downtown
and
to
active
and
public
transportation
routes
(versus
low-density
developments
on
the
edges
of
town).
High-density
developments
are
more
fiscally
responsible
–
it
is
less
costly
for
the
city
to
provide
high-quality
services
to
high-density
developments
close
to
existing
infrastructure
than
to
low-density
developments
on
the
periphery.
With
increased
revenue
and
decreased
cost
per
resident,
the
City
bikeablesantarosa.org • [email protected]
will have more resources to support the Active Transportation Plan, as well as other amenities like parks
and
other
essential
services
like
maintenance
and
public
safety.
Thank you for your continued efforts to help build a thriving Santa Rosa for us all. Sincerely, Alexa Forrester Chris Guenther Co-Lead, Bikeable Santa Rosa Co-Lead, Bikeable Santa Rosa
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