HomeMy WebLinkAbout4.5 Business License Reg Software PurchaseCITY CLERK
File # 11F31&a49Zfl
AGENDA STATEMENT >(
CITY COUNCIL MEETING DATE: (January 6, 1998)
SUBJECT:
EXHIBITS ATTACHED:
Business License Registration Software Purchase
(Report Prepared By: Paul Rankin, Assistant City Manager)
1. Financial Comparison of Proposals Received
2. Excerpt from HDL Proposal
3. Resolution Approving Contract for Purchase of Business
License Software
RECOMMENDATION: Adopt the report and the attached resolution
FINANCIAL STATEMENT: The total cost for Fiscal Year 1997-98 is not expected to exceed
$11,000. This cost is included as part of the Central Data Processing System Upgrade project in the
Fiscal Year 1997-98 Capital Project Budget.
DESCRIPTION: Staff recently issued a Request for Proposals for Business License Registration
software to five companies providing Windows based software, as authorized by the City Council at the
September 16, 1997 Council meeting. This Request for Proposals was necessitated by the fact that the
City's current business license system will not be able to handle dates into the year 2000 and beyond. In
addition, the City is migrating various programs from the IBM Minicomputer to a PC Network Server.
Two companies responded to the City's Request for Proposals. These companies were HDL Companies
(HDL) and Micro Arizala Systems, Inc. (MAS).
Staff has reviewed the proposals, as well as had each vendor conduct product demonstrations. Each of the
proposed products was evaluated in terms or first year cost; on -going cost; ease of use/functional
operations and references.
Financial Comparison of Programs -First Year Costs
Detailed in Exhibit 1 is a comparison of the first year costs for the two programs, as provided in the two
vendor proposals received by the City. The Fiscal Year 1997/98 budget includes $14,000 for this phase of
the Central Data Processing Project. The total cost for the HDL Package is estimated at $10,935, and the
cost associated with implementing MAS is estimated at $14,844.
As part of the conversion process for both software packages, Staff has made an arrangement with
Business Records Corporation (BRC), the current business license vendor, to convert the data on the
City's current business license system at an additional cost of $750. This is a requirement of both vendors
prior to incorporating the data for use on their business license registration systems. The current vendor
(BRC) does not offer a business license system which will run on a PC Network. The conversion process
should minimize the cost and time associated with entering all current data into the new system.
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COPIES TO: Nancy Hicks, HDL Companies
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ITEM NO.
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The base system price for HDL has been increased to provide custom moaifications to the system. This
includes: (1) the ability to restrict access to confidential alarm information that will be entered as part of
the registration process; (2) to allow additional information to be entered and printed as part of the mailing
address for a business license; and (3) programming to streamline the entry of street addresses by allowing
the user to enter shortcuts for major business streets in the City (for example, db for Dublin Boulevard).
The costs provided by MAS for implementing the current data base and traveUairfare costs are estimates
only. The City will be billed on a time and materials basis for the conversion project and on actual costs
incurred by the vendor for travel and airfare.
As shown, the initial first year cost for the HDL system is approximately $3,909 less than the MAS
system. The MAS product is a new version of the business license system for Micro Arizala Systems.
Therefore, some of the costs needed to be estimated. In addition, the City of Dublin currently has a mix
of PC workstations which will access the Business License programs. Some of the workstations are 486
machines, using a Windows 3.11 operating system, and others are Pentium workstations with Windows
95 operating systems. The HDL product can operate on all of the City standard workstations. The MAS
product requires a Windows 95 operating system. This results in the need to upgrade approximately eight
workstations if MAS was the selected vendor. The cost associated with these hardware upgrades is
estimated at approximately $3,200. Based upon the initial first year cost, the HDL system is the preferred
solution.
Subsequent Years Support Costs
Annual support costs in subsequent years varied for the packages noted above; $879 for MAS and $3,300
for HDL. The pricing is based upon two users with full access to the system. The price for HDL is
adjusted on an annual basis for the change in the Consumer Price index. Both include annual software
updates and toll free customer phone support.
There is a difference in the methods used by the two companies for on -going support. HDL charges an
annual license fee based upon the number of users which have full access. Two workstations will need
this level of access (one primary and one back-up). There is not any additional charge by HDL for the
ability to have an unlimited number of workstations to look at the data, run reports, and query the system.
HDL also includes the following as part of their annual support: a.) twelve hours of annual on site
support, including training and assistance with the redesign of the City's business license application,
renewal and certificate forms as necessary; and b.) Additional support hours are available outside of
normal business hours. Neither of these options were available from MAS.
Staff will conduct an evaluation in the future of the need to continue to pay for support on an annual basis,
or just for training on an as needed basis. However, it will be important to maintain this support for at
least the next few years as the program has been in the marketplace for less than two years, and significant
enhancements will continue to be made to the program that the City will want to continue to receive as
part of its annual support contract.
Functional Operation
As part of the review process a committee was formed with representatives from several departments
involved in the approval process, including Planning, Building, Public Works, Police Services and
Administrative Services. In reviewing the two software packages the committee considered the functional
needs of all of the City's departments, as well as how the software could be used to provide enhanced
customer service. The review c r included an on -site visit to Pleasant whose staff uses the business
license registration software from HDL.
Both systems are able to handle dates into the year 2000 and beyond. The Finance Department staff has
checked the references for both corporations (including the cities of Pleasanton and Livermore for HDL).
Favorable references were received from cities in California that are currently using the HDL business
is program.
The City was unable to conduct an on site visit or reference contact for the software from MAS, as no
City in California is currently using its business license registration software (it is a brand new product
that will be released by the company in the near future). However, cities which use other MAS Financial
Software indicated they had favorable experience with the company.
Both products offered similar levels of basic functionality, but there were several notable features
exclusively offered in the HOL software package, including the following:
1. The ability to easily create user defined reports that can be downloaded into a Microsoft Word or
Excel file. MAS currently can download data into a text file, but it is not in a format that can
easily be loaded into a spreadsheet or word processor document.
2. The ability to easily create the annual report of active business license records as required by the
Franchise Tax Board (this is a feature that MAS indicated would be offered in a future release).
The State requires the City to file this report in an electronic format on an annual basis.
3. As part of their first year costs, HDL will set up the following items for the City:
a. Assist the City with the redesign of their business license application, renewal and
certificate forms for use with their business license software package.
b. Create tables for Business Types, Standard Industry Classification Codes (SIC codes) and
Department Approvals for use with the program all of which would have to be created
from scratch by Staff on the MAS software).
c. Modify the software to track specific information needed by the City for the approval of a
license and for property management.
4. The business license program will access non -confidential sales tax and property tax information
for a business when using the business license program. The City is currently a HDL client and
has both a Property Tax and Sales Tax database produced by the firm. Linking similar
information between these databases can expedite data entry as well as serve as a cross reference.
5. There are sixteen users in California of the HDL business license system, including Pleasanton and
Livermore. In contrast the system offered by MAS is still in a testing /pre release version and is
not currently in use by any City in California.
Overall, Staff preferred the features offered and ease of use of HDL's business license program over the
one offered by MAS. Staff also indicated that although the annual support costs for HDL were somewhat
higher than MAS, that this was offset by the higher first year costs of MAS and the additional staff time
that would be spent implementing the MAS software. Also, being one of the first installations of the
MAS' software has the possib' y- that programming errors may ocr r which may have not been
previously detected.
Proposed Agreement
Attached to Exhibit 3 (Resolution) is the Agreement for HDL's business license program and related
services as discussed in this report. This includes the obligations of HDL in performing the agreed upon
services, a timeline for the implementation of the new software (Staff anticipates it will be completed by
April 1998) and information regarding annual support costs.
Review of the City's Business License Procedures
Staff will be reviewing existing fees for report formats under the new system, which may require an
amendment to the City's fee schedule. For example HDL can produce reports which can be saved to a
floppy disk. Staff will also consider this as well as other recommendations which would provide for a
more efficient administration of the City's business license program. These will be presented for City
Council consideration at a future meeting.
Recommendation
Based upon the review and evaluation of the products available, Staff recommends that the City Council
adopt the Resolution (Exhibit 3) awarding the purchase of the Business License System to HDL.
FINANCIA y OMPARISON OF PROPOSALS T 'y EIVED
Base Software Price Included in Proposal
Plus Adjustments Detailed Below:
Incorporation of up to 4,000 records from
BRC System to new business license system
Conversion of existing customer database to PC
readable format (to be provided by BRC)
Modification to allow for limited access to
confidential alarm information used by Police
Modification to add a third mailing address line
Modification to streamline the entry of
street names
Reportwriter to create user defined reports on
business license data.
HARDWARE COSTS
Costs to upgrade eight workstations to run on
Windows 95
TRANSPORTATION
Travel and airfare costs
Total Proposed Price
HDL
MAN
$9,000 $6,394
Included in ea
base bid price
$750 $750
$135 Not available in
software
$550 Included in
base bid price
$500 estimate Included in
base bid price
Included in
base bid price $1,500
Not Required - $3,200 estimate
Runs on
Windows 3.1
Included in
base bid price
$1,000 estimate
EXHIBIT 1
1 1 \1y
Revenue Management for Local Government
Hinderliter, de Llamas & Associates
HdL Coren & Cone
HdL Software, LLC
NOW October 20, 1997
City of Dublin
Attention: Fred Marsh, Finance Manager
100 Civic Plaza - Finance Dept. - Second Floor
Dublin, California 94568
Dear Fred:
In response to your solicitation. due October 23, 1997, enclosed are one original and four
copies of our firm's proposal to provide business license services for the City of Dublin.
.'! This proposal is valid through April 30,.1998.
HdL can provide the City with a business license system that will allow the City to
Nprocess all licensing and related activities, print renewals and licenses. The system will
provide the tools to aid in license enforcement and auditing which should increase license
revenues. It will also provide management information about the business community.
IThis Windows system is integrated with HdL's sales tax and property tax software and
runs standalone or in a network configuration. It provides a link between businesses
;.'. generating taxable sales, property values and the business community, including
employment numbers.
Goo
:�j The. combined. experience of the HdL team members serving the City of Dublin
represents decades of experience in every aspect of city government, finance,
management, auditing, economic development and legislative consulting. Each staff
''; member has experience with both the pri
.:vate and public sectors.
I will be the City of Dublin's contact person regarding questions related to this submittal.
Our address and phone number are shown on this letter. We would appreciate the
opportunity toreview our service with you in more detail and demonstrate our capacity to
:.j provide the scope of service that you are requesting. The City of Dublin is currently
=� contracting with The HdL Companies for sales tax and property tax services and we look
forward to the opportunity to provide this additional service.
Sincerely,
0•a
0 ON•!
Nan Hicks
HDL PROPOSAL EXCERPT EXHIBIT 2
PIP
Proposal for Business �..,ense System i
City of Dublin
PIP
SUMMARY OF SERVICES
The HdL Companies were founded in 1983 by Bob Hinderliter and have grown into a
total revenue management firm currently serving over 208 clients with a wide range of
services. The HdL Companies bring an experienced team that represents decades of
..,
experience in every as of city government: finance, management, auditing, economic
development and legislative advocacy. Our staff is trained in tax law, tax administration
and auditing techniques. Our proprietary computer programs are the most advanced in
the state and enhance our reporting and auditing capabilities as well as those of our
:a clients.
., HdL proposes to provide the City with a fully functional business license system that will
I allow the City to manage its business license operation, including the processing of new
and renewing licenses, the enforcement of license ordinances and the assurance that
businesses are located with the proper zone. HdL's system provides electronic audits of
other data bases to assist the City in monitoring business licenses to identify unlicensed
businesses, under -licensed businesses and under -reporting businesses. The system
generates licenses, reports, renewals and the information required by the Franchise Tax
Board. HdL also provides ongoing analysis and management support. The business
VIP
moo license tax data set can be accessed directly through the business license system and is
linked to HdL's sales tax and property tax data sets as well as a telephone directory. If
the -City becomes a client for HdL's new mapping system, the business license system
will also be linked to the maps.
The HdL Companies 3
Proposal for Business �. }ense System
City of Dublin
A. BUSINESS LICENSE SYSTEM
1. Description of HdL's Business License Software.
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;,•1 HdL's business license tax software program for auditing and managing
business licenses was developed by using five cities as beta sites. The
cities are Azusa, Baldwin Park, Livermore, Pleasanton and Taft.
a..This program will be integrated with HdL's sales tax and property tax data
sets; the City of Dublin is currently a client for those services. It is
designed to run in a stand-alone or network environment. Business license
data can also be accessed through HdL's mapping and revenue interface
software if the City becomes a client for those services.
•1
After installation on the City's computer, either stand-alone or on a
network, the program is ready for the City to use in the processing and
tracking of business licenses. The objectives of the program are as
".' followsall
a. Audit and enforcement
The business license software will allow the City of Dublin to
all enforce its business license ordinance, providing the tool to assist
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the City in making sure that every person/organization doing
business in the City is licensed. It will also provide a system that
will assist the City in assuring that businesses are operating within
proper zones and that they have received the appropriate approvals
and permits to operate. Approvals are frequently required from
fire, police and health departments and in certain instance from
- state agencies.
all
The NdL Companies 4
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Proposal for Business �.�ense System
-.�
City of Dublin
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On an ongoing basis, the program will assist the City in identifying
I
unlicensed businesses, including home occupations, non-profit
companies that own "for profit" businesses and businesses within a
`�:� business.
b. Maintenance and processing
The software will allow the City to maintain and track all types of
licensing functions, including annual licenses and those which may
�:i be issued on a daily, monthly, quarterly or semi-annual basis. It
• � allows the pro -ration of new licenses and calculates the penalties
:::� for delinquent license fees. It .will process licenses for businesses
�•�' based on any number of factors including gross receipts, number of
`:��
employees, number of coin -operated devices, and number of
vehicles. Because it is a "table driven" system, it can
��;��i accommodate the unique rate structures of individual cities. The
': I
City of Dublin charges a flat license fee of $50.00 per year, but will
be able to use the system to gather information about the
businesses including but not limited to the number of employees,
vehicles and units (such as hotel rooms).
.�i
The software will allow easy data entry of the information
contained in business license applications. Based on business type
�' and rate tables, it will calculate fees and print licenses. The
program will track unrenewed licenses and print renewal notices at
the end of the license period which contain computer generated fee
calculation instructions based on business type. Delinquent notices
. , will be generated, including the calculation of late fees and
penalties. The program will create a journal entry for entering
payments into the City's accounting records.
_i
The HdL Companies 5
Proposal for Business'L. Lense System
City of Dublin
: The program will maintain business license history for active and
closed businesses. The amount of history to be stored will be
:O determined by the City and is dependent on the available free space
on the City's computer. It contains data fields for other needed
i
::,I business information such as emergency contact, name of alarm
.:-i company or security service used by the business, SIC codes, and
;1 number of rooms or building capacity.
City users will be able to query the data set in a variety of ways: by
license number, business name, owner name, address, telephone
number, vehicle license number and key word. Ad hoc queries are
friendly and easy to use. The City will be able to track licenses by
business types and by City determined geographic areas.
N�
The program provides for user defined levels of security and
confidentiality.
• A variety of reports are available, in standard format and on an ad
hoc basis, including reports by business name, address, and type,
and mailing labels.
c. Management Information
The business license system will provide a wealth of information to
the City including such items as the daytime population of the
City, the location of hazardous materials, and the current business
mix which can assist many departments of the City with economic
development, traffic circulation and crime analysis. The same geo
INN The HdL Companies 6
Proposal for Business �_%ense System
City of Dublin
codes used for sales tax and property tax can be used for business
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licenses.
d. Compliance with mandated Franchise Tax reporting requirements
�] Cities are required by Section 19556 of the Revenue and Taxation
;.Do r.I Code to furnish specific information about businesses to the
,� Franchise Tax Board on an annual basis. HdL's business license
-: program will allow the City to comply with this state mandate.
HdL's software will generate the business information in the
format needed to comply with the reporting requirements of the
Franchise Tax Board,
2. Scope of Services.
Discussion of the software Programs
The software program has as its primary objectives:
• Audit and enforcement
• Maintenance and processing of applications and licenses
• Management information
Food
• Compliance with mandated Franchise Tax Board reporting
requirements
Discussion of the task.
The City of Dublin has approximately 2,075 active business licenses
currently with approximately 4,400 total businesses in its data base. The
City processes about 500 new licenses each year and expects this number
to increase in future years as the commercial growth occurs in the eastern
part of the City. It is very important from both a financial point of view
all
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The HdL Companies 7
'::I
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Proposal for Business L.Anse System y
City of Dublin
and an economic development point of view to monitor the business
licensing activities in the City. HdL's business license software will allow
City staff to be effective in the tracking of licenses to generate economic
development information and to audit, enforce and collect the business
license revenues due to the City.
HdL has the technology, methodology and trained staff needed to assist the
City with the business license function. The company proposes to provide
the necessary software and services for the City to manage its license
function and to identify unlicensed businesses or incorrectly licensed
businesses. HdUs services include using its proprietary data sets to cross
check Dublin's business license data and the installation of a business
license data set on the City's network under Windows
Cities are required by Section 19556 of the Revenue and Taxation Code to
furnish specific information about businesses to the Franchise Tax Board
on an annual basis. HdL's business license software will allow the City to
compIy with this state mandate.
Work elan.
The methodology that HdL intends to follow includes:
Task I Establishment of City Data Set
Task II Installation of Data Set on City. Computers)
Task III Identification of Unlicensed or Incorrectly Licensed Businesses
Task IV Software maintenance and customer support
:.� The HdL Companies 8
Proposal for Business � _y nse System 1
City of Dublin
Task I - Establishment of City Data Set
HdL will convert the City's existing business license data to the HdL
business license program files. A series of tables will be constructed in the
program including business types, rate tables and SIC codes. If the City
files contain historical data, they will also be inserted into the data set.
Geographical codes will be assigned, consistent with those used in the
.-, sales tax and property tax systems.
. -a
Task II -Installation of Data Set in City
The data set will be delivered to the City with the software and up-to-date
business license data for installation on the City's network. Training in
the use of the system will be provided, as will manuals.
Task III - Identification of Unlicensed or Incorrectly Licensed
Businesses
The business license data set will be verified by the City, using HdL
:.; proprietary programs, such as the sales tax and property tax programs, plus
a variety of cross -directories including telephone directories. This
computer analysis will identify unlicensed or incorrectly licensed
businesses and will provide exception lists for the City.
Task IV - Software Maintenance and Customer Support
HdL will provide ongoing software upgrades and updated data from HdL's
proprietary data sets and cross -directories to assist the City in its audit
work. HdL's standard maintenance and customer support includes
telephone support as needed by the City and up to twelve hours of onsite
support annually.
The HdL Companies 9
Proposal for Business � ,tense System
City of Dublin
Timeline.
Timeline for implementation of the business license software system is
approximately four months from the date of approval of the contract.
3. Compensation.
First year fee. HdL proposes an initial first year software license fee of
$9,000. This fee will include the conversion of the City's existing
business license files if the current business license data information can
be provided in standard delimited format on magnetic tape or diskette. If
this is not possible, there may be an additional charge for manually
converting the data. Manual conversion will be done on a time and
material basis. This fee is based on the conversion of 4,400 licenses. If
the City decides to convert current licenses only (2,075 licenses) HdL will
discount the fee by $2,000, making the first year license fee $7,000.
Annual maintenance and customer support fee. There is no charge for
the first year maintenance and customer support. The annual maintenance
fee shall begin at the second year and shall be as follows.
Standalone installation
Network installation
Plus
$ 2,500 One user
$ 2,500 For the first user
$ 800 Each additional user
Maximum $101000
Users are defined as those who can add, edit, or print. There is •no
additional user fee for "inquiry only" users. Annual maintenance fees
will be increased each year in an amount equal to the increase in the most
.., The HdL Companies 10
'.i
i
Proposal for Business L. _ense System
City of Dublin
recently published Consumer Price Index for the surrounding statistical
de
: metropolitan area all urban customers.
eelCustomizing services. The business license software is a "table driven"
{ system and has been developed to meet almost all of the needs of a City
`.:� with regard to the management, processing and reporting of business
licenses. However, should the need occur, HdL is available to provide
0 customer enhancements to the business license software on a pre-
;-'91 determined time and materials basis.
'�:� SB 90 reimbursement. Certain costs associated with the Business License
Software may be eligible for reimbursement under the provisions of SB
90. HdL will assist the City and/or its consultant in the preparation of the
SB 90 claim. However, the funding provided for this mandate in the State
=::� budget for fiscal year 1997-98 is minimal.
`' 4. Hardware Requirements.
The business license software is a Windows application requiring
Microsoft Windows 3.1 or higher.
a) Workstations should be PC compatible 486 Dx2 or Pentium with 8
MB of memory and VGA monitor.
b) File server must have a 486 or Pentium processor. Pentium is
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If
recommended.
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c) Recommended printer is HP laser 4 or 5.
d) Network software can be Windows NT or Novell Netware.
e) The size of the data set and program will range from 35 MB to 50 MB
- - including history.
..:_-� The HdL Companies 11
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