TO: LINDA REICH, CITY MANAGER
FROM: KIM SAO, DIRECTOR OF FINANCE
SUBJECT
title
Award of Contract to HdL for Business License Software and Compliance Services.
end
RECOMMENDATION
recommendation
Award a five-year professional services agreement with Hinderliter de Llamas and Associates for the Prime Business License Software System and Business License Discovery/Compliance Services for an estimated total amount of $201,500, and authorize the City Manager to execute all necessary documents on behalf of the City.
body
FISCAL IMPACT
Sufficient funds for the first-year cost of $99,500 are budgeted in the Fiscal Year 2026-27 Proposed Budget. The total five-year agreement amount is $201,500, exclusive of CPI adjustments. Although these costs are anticipated to be offset through revenues generated from the compliance services component of the agreement, staff considers the expenses and revenues separately for budgeting purposes. Awarding this agreement is contingent upon the final budget adoption, which is scheduled for June 16, 2026.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Responsible Long-Range Planning
|
Revenue: |
Expenditure: 1003000-43515 |
|
Transfer In: |
Transfer Out: |
BACKGROUND
The City currently administers business license operations through existing software and manual processes that require modernization to improve efficiency, reporting capabilities, and customer service. Staff evaluated available business license administration solutions and determined that HdL provides a comprehensive municipal business license platform that meets the City’s operational needs.
HdL specializes in revenue management and software services for local governments throughout California. The proposed Prime Business License Software System is a cloud-hosted solution designed specifically for municipal business license administration and compliance management.
In addition to the software system, HdL will provide compliance-related services to assist the City with identifying unlicensed businesses, collecting delinquent accounts, and auditing potential under-reporting or misclassification of business license taxes and fees.
ISSUES/ANALYSIS
On an annual basis, City staff currently process over 5,300 business license applications manually. There is currently no portal for online application submission or payment. By utilizing the new software staff will be able to streamline the City’s business license administration functions by improving account management, invoicing, reporting, payment processing, and customer access.
The software will be hosted by HdL, reducing the City’s internal information technology maintenance responsibilities while providing ongoing software updates and support.
HdL will also provide business license discovery and compliance services intended to improve compliance and increase revenue collection. These services are contingency-based, meaning HdL is compensated only from revenues generated through its compliance efforts.
It is anticipated that much of the one-time and annual recurring cost of the software will be offset by the increase in revenue from the compliance program.
The City has utilized HdL for other services for several years and has experienced reliable service, quality work product, and strong customer support. Approval of the five-year contract will allow the City to better serve our community and business owners by offering a more convenient and technologically advanced product to assist in applying for and renewing business licenses. Approving the contract will also increase both compliance with the municipal code and revenue to the city by licensing previously unlicensed businesses.
The proposed agreement includes first-year costs totaling approximately $99,500, which consists of one-time implementation costs of approximately $74,000 and an annual software fee of $25,500. Years two through five include annual recurring software fees of $25,500, subject to annual CPI adjustments. The total estimated five-year contract amount is $201,500, exclusive of CPI adjustments. These costs are anticipated to be offset through revenues generated from the compliance services component of the agreement.
Based on the foregoing, staff recommends awarding a five-year professional services contract to Hinderliter de Llamas and Associates (HdL) for Business License Software and Compliance Services.
Attachment - HdL Agreement