Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute Amendment No. 3 with Hinderliter De Llamas & Associates (HdL) for Business License Tax and Tobacco Retail License Fees & Operations Management Services by Increasing the Contract by $594,200 for a Total Not-to-Exceed of $1,497,500 and Extend the Term through December 31, 2026
Staff report
SUMMARY
Hinderliter De Llamas & Associates (HdL) services include business license program administration, including processing new business licenses and tobacco license accounts and renewals, payment processing, on-line services, business support, and collection services. In October 2021, the City entered into an agreement with HdL for a term of three-years with two (2) one-year options to extend the agreement.
RECOMMENDATIONS
Staff recommend that the City Council approve and authorize the City Manager to execute Amendment No. 3 with HdL for business license tax administration, tobacco retail license services, and operations management services by increasing the contract by $594,200 for a total not-to-exceed $1,497,500 and extend the term through December 31, 2026.
BACKGROUND
The City implements a Business License Tax program to monitor and regulate business activities to ensure they meet public safety standards, zoning laws, and other relevant ordinances. The Business License Tax program also helps gather economic data, which aids the City in assessing planning and future development opportunities. The City collects and processes approximately 10,000 current and active business licenses and tobacco and retail licenses and generates approximately $6.5 million in annual tax revenue.
In December 2018, the City entered into a service agreement with HdL for business license tax administration, which included operations management services, compliance services, and payment processing services.
In October 2021, the City entered into a new contract with HdL for business license tax administration and added tobacco retail license services to the scope of work. In May 2024, Amendment No. 1 updated the scope of work to include HdL’s standard web API (Application Programming Interface) for business license data integration with Accela (permitting system). In October 2025, Amendment No. 2 extended the contract under the same terms through December 31, 2025.
Analysis
As part of the agreement, HdL provides customer support and a service center where the business community can obtain support during normal business hours. HdL provides local businesses with multiple options for registering, renewing, and making payments. HdL also answers general licensing inquiries on behalf of the City. The HdL operations management program offers real-time reporting and account lookup through an online portal. The online portal also offers businesses the capabilities to file license applications, update information, make payments, receive their business license certificates, correspond with tax specialists and receive assistance for their business license questions electronically, facilitating the registration and renewal process for business owners.
In October 2021, the City entered into an agreement with HdL for a term of three-years with two (2) one-year options to extend the agreement for a not-to-exceed amount of $881,000 for business license tax administration and tobacco retail license services. In May 2024, the agreement was amended to update the scope of work and increase the not-to-exceed amount to $903,300
In October 2025, the City administratively exercised the first-year option for the calendar year 2025 (through December 31, 2025). The City recommends authorizing the second-year option to extend the agreement through calendar year 2026 (December 31, 2026).
The estimated annual cost for business license administration and software license fee for tobacco retail licenses is $297,100. The two (2) one-year options to extend the agreement with HdL will increase the not-to-exceed amount from $903,300 to $1,497,500.
FISCAL IMPACT
There are sufficient funds available in the adopted FY 2026 and FY 2027 biennial budget to cover the cost related to the extension of the HdL agreement through December 31, 2026.
The estimated annual cost for business license administration and software license fee for tobacco retail licenses is $297,100. The two (2) one-year options to extend the agreement with HdL will increase the not-to-exceed amount from $903,300 to $1,497,500.
Attachments
A: Draft Resolution
B: Draft Amendment No. 3 between the City of San Leandro and HdL for Business License Tax Administration and Tobacco Retail Licensing
PREPARED BY: Felicia Silva, Assistant Finance Director
Nicole Gonzales, Finance Director