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Council approves $50,000 business‑license ordinance review and compliance contract with HDL; seeks four‑month status report
Summary
Council authorized a $50,000 appropriation and a contract with HDL to update Merced’s business‑license ordinance and run a compliance audit; HDL will take contingency fees on recovered revenue (50% for cases HDL originates, 30% for city‑referred cases). Council required a four‑month status report.
The City Council authorized a $50,000 supplemental appropriation to fund a review of the city’s business‑license ordinance and a service agreement with HDL for compliance work.
Scope and payment model: HDL will (1) review and propose updates to the city’s business‑license ordinance and fee structure, particularly to capture online and non‑traditional business models, and (2) perform a compliance audit to identify businesses that may be operating without a license. Under the contract HDL will retain a share of first‑year and prior‑year recoveries: 50% for cases HDL identifies and 30% for city‑referred cases. Any future renewals and ongoing collections would be city revenue after the contingency period.
Council discussion and safeguards: council members expressed concerns about vendor incentives, the need for carefully scoped outreach and an appeal process for businesses, and asked for a performance update. The motion to approve included an explicit request for a four‑month status report on implementation and initial findings; staff said the ordinance review will also examine how to treat home‑based and online sellers and to make the rules easier to enforce.
Next steps: staff will proceed under the HDL agreement, begin the ordinance review and provide a four‑month status report to council on audit findings and ordinance recommendations.
