The City Council voted 3-2 on Monday to change the vendor which handles business license services for the city of Ceres.

The vote came after a 45-minute discussion, mostly due to members trying to grasp the actual costs of the change and how it would affect the city budget recently adopted and already operating on $2 million in reserves.

The city and some business owners haven’t satisfied with the service of Avenu, the existing company, so the council decided to contract with Hinderliter De Llamas & Associates (HDL Companies) to administer business licenses.

According to City Manager Doug Dunford, the city has been concerned about the performance of Avenu with regard to processed new applications, payment collection and license renewals. To make matters worse, the provider has yet to issue the June 2025 quarterly business license reports.

Both business owners and city staffers have raised ongoing concerns about limited customer service and delays in receiving licenses. The Finance Department attempted to correct the deficiencies over the past 18 months, but the company’s service continues to fall short of expectations, said Sonia Ledezma, the city’s deputy finance director.

“We’ve had a lot of complaints from our taxpayers that they’re having a hard time getting a hold of the current vendor that we have,” said Ledezma.

“So this is why we seek other vendors.”

The city believes HDL will better serve the needs of local businesses and ensure a higher standard of service delivery.

Mindful of the impacts to the budget, the council appeared wary about costs which would go up under either provider.

Under the previous agreement, the city paid $10.61 per business license issued and 32.5% of identified revenue for discovery and collection services. Those rates were being increased to $16.50 per mailing for quarterly notifications or $25 for annual notifications, along with 40% of identified revenue for discovery and recovery services. With Avenu’s proposed increase, the cost would be approximately $200,000 per year for quarterly mailings, or about $75,000 annually for a single annual mailing. The city, therefore, is desirous of an annual mailing.

HDL proposes to charge the city $20 per mailing of a business license, a one-time implementation fee of $5,000, an Optional Bid Management Fee of $2,500 annually, and 40 percent of fees identified through discovery and 25 percent of collection service fees.

The city originally budgeted $18,995 for business license processing but increased the amount to $44,180. After the budget was adopted, said Dunford, Avenu announced that the city’s costs were jumping to $59,000 and were told “you don’t just have 618 businesses, you have 3,618 businesses – which was a shock to Finance and everybody else working with this.” The company said they weren’t charging the extra mailings because they were under the old contract.

Ledezma also said the city has had little cooperation from the current vendor in verifying the veracity of the 3,618 business license mailings.

Ledezma also noted that the current contractor has not been collecting from businesses which are late in quarterly payments “so we’re losing on our revenue there.” HdL will be doing collections.

HdL will be more responsive, said Julian Aguirre, the city’s Economic Developer manager.

“They are going to be more accessible, more streamlined for our taxpayers, so it’s going to be easier for the new businesses,” said Aguirre. “They’re willing to work closely with us.”

To fully fund the agreement with HdL, the council was asked to approve an additional $81,000 from General Fund reserves.

The Finance Department staff recommended two mailings during the first year – the first to inform business owners of the upcoming changes and include the remaining quarterly statements; the second will support the standard renewal period beginning April 1.

Even though costs are increasing in the first year, it is expected to generate savings in future years through reduced mailing frequency.

The council inquired about doing the business license service in-house but those costs would be more than a contractor costs, Ledezma said.

Councilwoman Rosalinda Vierra voted no on the contract switch, saying she “can’t do a blank check right now” with cost uncertainties. Vice Mayor Daniel Martinez also voted no. Supporting the switch were Mayor Javier Lopez and Councilmembers James Casey and Cerina Otero. Lopez stated he wanted the city to “go after” Avenu “if they have done any damages.”