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Page 3 of 4 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />The Tulip & Oak proposal, while the lowest bid, was determined to be non-responsive due to their lack of <br />experience providing the services outlined in the RFP. The firm has extensive experience working with <br />individual cannabis operators, not administering programs on behalf of a public agency. After performing <br />a bid evaluation of the next lowest bidder, staff recommends awarding the agreement to HDL. <br />Key Elements of Agreement with HDL <br />Table 2 below provides a summary of the key terms for the proposed agreement with HDL. <br />Table 2 – Key Terms of Proposed Agreement with HDL <br />Term One year <br />Extension Provisions Two one-year extensions at the sole discretion of the City Manager <br />Annual Cost Year 1: $119,400 <br />Once under contract, prices shall be honored for the first full year, with <br />successive years subject to an annual increase based upon the Consumer <br />Price Index for the Los Angeles-Long Beach-Anaheim region. <br />Annual Amount Not to <br />Exceed: <br />Year 1: $119,400 <br />Amendment 1 (Year 2): $125,400 <br />Amendment 2 (Year 3): $131,700 <br />Total: $376,500 <br />Key Services Provided Conducting annual financial (tax) audits. <br />Conducting on-site compliance inspections. <br />Conducting background checks and producing photo ID badges for <br />cannabis store owners and employees. <br />Evaluating annual permit renewal applications. <br />Providing technical assistance and subject matter expertise. <br />FISCAL IMPACT <br />There is no impact to the General Fund. The total amount of the agreement for services is $119,000 in the <br />first year, with the possibility of two one-year extensions and a total not-to-exceed amount of $376,500 <br />over three years. Cannabis retailers will pay the cost of this agreement via their annual permit renewal <br />fee. A mid-year budget amendment to record the expected revenue offset and expenditures will be <br />completed later this year. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA <br />Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />6.F. - Page 3 of 21 <br />47