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6.A. - Page 2 of 7 As part of the ERP replacement project, the business license tax and TOT software was included in the competitive bidding process. Of the two bidders, HdL and Tyler, the City elected to enter into a one-year trial agreement with HdL based on staff recommendations and the system's ability to meet the City's needs. On March 3, 2019, the City executed a one-year trial agreement with HdL for Business License Tax and TOT software and services, including compliance tracking and online payment processing and notification. On June 10, 2019, City Council authorized the City Manager to amend the original agreement to purchase three additional licenses, at an amount not to exceed $5,700. Amendment number 1 was executed on May 31, 2019 to purchase two of the three approved licenses. Amendment number 2 was executed on August 14, 2019 to purchase the third and last approved license. ANALYSIS HdL, a California company, has been providing business license tax services to California government agencies for more than 35 years, maintaining a greater than 99% customer retention rate. They also have extensive experience integrating their Prime software with enterprise ERP solutions. The HdL Prime pilot project proved successful after the first Business License Tax renewal process, performed in June 2019. During the first week of go -live, about 50% of the new business applications were submitted online, and 60% of businesses remitted their renewal payment online. The convenient online portal for businesses significantly reduced staff time in manually processing the mailed -in renewal payments and reduced foot traffic to City Hall. Revenue Services staff can now send out business license renewal notices electronically and businesses can pay their business license tax online. HdL Prime's ability to streamline, automate, and process everything electronically became even more convenient and practical through the pandemic closure. During this year's business license renewal period (May — August 2020), about 95% of the new business applications were submitted online, and 54% of businesses remitted their renewal payment online. An amendment to the agreement extending the terms is recommended to maintain the level of support and operations through the pandemic and in efforts to keeping up with the modern age of online support and bill payment. FISCAL IMPACT The three-year extension cost of the HdL Prime software is $34,167, which is included in the FY 2020-21 Capital Improvement Project (CIP) Fund budget. The cost of the two optional additional one-year extensions are to be increased each year based on the local consumer price index increase, at an amount not to exceed 3% each year, which is $24,520.73 for both additional years, and will be included in the FY 2023-24 CIP Fund Budget. Page 2 of 3 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcitV.org 11