CA Review AZ
Meeting Date: Sept. 1, 2026
To: Mayor and City Council
From: Geoff Patnoe, City Manager
Staff Contact: Doug Kappel, Information Technology Manager [email protected], 442-339-2791
Rachel Muller, Senior Project Manager
[email protected], 442-339-5746
Subject: Approval of Amendment No. 2 to the Agreement with Avaap U.S.A. LLC for Workday Implementation Services – Core Modernization Project Districts: All
Recommended Action
Adopt a resolution authorizing the City Manager to execute Amendment No. 2 to the agreement with Avaap U.S.A. LLC for Workday implementation services in an amount not to exceed $907,500 over the extended term of the agreement, for a new not to exceed agreement total of $5,198,931.
Executive Summary
As part of long-term plan to replace several outdated systems with modern, integrated solutions, the City Council approved five agreements with five vendors on April 29, 2025. The vendors provide applications and/or support implementation. This included an agreement with Avaap USA, LLC for the implementation of Workday, which will support functions such as finance, human resources and timekeeping.
In June 2026, Amendment No. 1 was executed to add support to various work plans within the implementation at an amount of $179,631. This resolution would approve Amendment No. 2 to the agreement, which will add $907,500 to the cost. It will also extend the project schedule and add implementation support that is not part of the original agreement’s scope of work. The cost of the amendment is within the approved budget of the project.
The initial fundi ng for this project was approved in the Strategic Digital Transformation Improvement Program in fiscal year 2022-23 and included scheduled annual increases through fiscal year 2026-27 for a total of $12 million for the project.
The City Council’s approval is required under Chapter 3.28.060 of the Carlsbad Municipal Code because the City Council is the awarding authority for the procurement of services and professional services that will cost the city more than $250,000 per agreement year.
Sept. 1, 2026
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Workday is the central component of the Core Systems Modernization Project that will replace outdated systems with ones that are modern, easy to use, more secure and mobile-friendly.
Workday is an enterprise cloud platform for financial management, human capital management and analytics that is used by some of the world’s largest companies, educational institutions and government agencies. Workday will replace four of the city’s current systems, including those used by Human Resources and Finance, as well as for part-time scheduling, tracking staff time and attendance.
The city is working with Avaap for assistance with the implementation of Workday and to provide overall project coordination between all the proposed solutions. Avaap is a Workday- certified partner and management consulting firm that specializes in working with government agencies in implementing enterprise resource planning solutions.
In June 2026, the City Manager executed Amendment No. 1 with Avaap for $179,631. The agreement added scope to the original agreement to support open enrollment, incorporate additional integrations, complete a security role review, provide additional data validation and provide additional training/knowledge of transfer documentation.
The Core Systems Modernization Project started in May 2025 with an original launch date of September 2026. The project team is recommending an extension to the project schedule with a new system launch date in December 2026. The schedule extension will provide more time for city staff to work with Avaap consultants to test and refine the system configuration to best meet city needs.
In addition to extending the project schedule, staff identified areas that require additional implementation support that are not part of the original agreement’s scope of work.
Amendment No. 2 provides the following additional services:
• Ten additional weeks of testing
• Four additional weeks of launch readiness support
• Additional upload of time-off requests required at launch • Thirty additional custom reports
The cost of the additional services with Avaap USA, LLC for Workday implementation services is $907,500.
Fiscal Analysis
The City Council approved funding for this project beginning in fiscal year 2021-22 and to date $12 million has been appropriated as part of the Strategic Digital Transformation Improvement Program with funding from the Technology Capital Investment Fund. Amendment No. 2 will cost $907,500 and is within the approved budget of the project.
Sept. 1, 2026
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Description Amount
Original Agreement $ 4,111,800
Amendment No. 1 $ 179,631
Amendment No. 2 $ 907,500
Agreement Total with Amendments $ 5,198,931
Next Steps
With the City Council’s approval, the City Manager will execute Amendment No. 2 with Avaap U.S.A. LLC.
Environmental Evaluation
The proposed action is not a “project” as defined by California Environmental Quality Act, or CEQA, Section 21065 and CEQA Guidelines Section 15378(a) and does not require environmental review under CEQA Guidelines Section 15060(c)(2) because the action is limited to the execution of an amendment to an agreement for implementation services of an information technology application. The action has no potential to cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
Exhibit
1. City Council resolution
Sept. 1, 2026
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RESOLUTION NO. 2026-164
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE
AMENDMENT NO. 2 TO THE AGREEMENT WITH AVAAP U.S.A. LLC FOR
WORKDAY IMPLEMENTATION SERVICES IN AN AMOUNT NOT TO EXCEED $907,500 OVER THE EXTENDED TERM OF THE AGREEMENT, FOR A NEW NOT TO EXCEED AGREEMENT TOTAL OF $5,198,931
WHEREAS, the City Council of the City of Carlsbad, California has determined that it is in the best interest of the city to replace its core suite of applications used for human resources, finance, cashiering, and utility billing (“Core Systems Modernization”); and WHEREAS, the existing human capital management, finance, cashiering, and utility billing systems have reached the end of their typical lifespans and are in need of replacement; and WHEREAS, the Information Technology Department solicited proposals from firms interested in and qualified to design, implement and support human capital management, financial, cashiering, and utility billing systems; and
WHEREAS, staff selected Avaap U.S.A. LLC as the vendor for Workday implementation services following formal bidding procedures; and
WHEREAS, on April 29, 2025, the City Council approved an agreement with Avaap U.S.A. LLC for implementation services for the Workday Human Capital Management and Financials System for an amount not to exceed $4,111,800 over a three-year period (“Agreement”) (Resolution 2025-093); and
WHEREAS, Amendment No. 1 to the Agreement was executed by the City Manager on June 23, 2026, in the amount of $179,631 for additional support services; and WHEREAS, Amendment No. 2 to the Agreement in the amount of $907,500 for a term extension and additional implementation support requires City Council approval; and WHEREAS, the Carlsbad Municipal Code 3.28. 060 – Procurement of Professional Services and Services requires the City Council’s approval for the procurement of professional services or services that cost more than $250,000 per agreement year; and
WHEREAS, a Strategic Digital Transformation Investment Program (SDTIP) project was approved in fiscal year 2022-23 and budget is available for Amendment No. 2 costs; and Sept. 1, 2026
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th Avaap U.S.A. LLC to extend the project schedule and add implementation support in an amount not to exceed $907,500 for a new Agreement total not to exceed $5,198,931.
NOW, T
HEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows:
1. That t
he above recitations are true and correct.
2. The proposed action is not a “project” as defined by California Environmental Quality Act, or CEQA, Section 21065 and CEQA Guidelines Section 15378(a) and does not require environmental review under CEQA Guidelines Section 15060(c)(2) because the action is limited to the execution of an amendment to an agreement for implementation services of an information technology application. The action has no potential to cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment.
3. That Amendment No. 2 is hereby authorized for a term extension and additional implementation support with Avaap U.S.A. LLC in the amount of $907,500 with a new Agreement total not to exceed $5,198,931 (Attachment A).
4. That the City Manager is authorized to execute all required documents on behalf of the City.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 1st day of September, 2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Burkholder, Shin.
NAYS:
ABSTAIN:
ABSENT:
None.
Acosta.
None.
_____________
_________________________
KEITH BLACKBURN, Mayor
____________________ __________________
SHERRY FREISINGER, City Clerk
(SEAL)
Sept. 1, 2026
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City Attorney Approved 5/30/2025
1 AMENDMENT NO. 2 TO MASTER SERVICES AGREEMENT
FOR WORKDAY DEPLOYMENT SERVICES
AVAAP U.S.A., LLC
This Amendment No. 2 is entered into and effective as of the ______ day of _________
_____________________, 2026, amending the master services agreement dated April 29, 2025 (“Agreement”) by and between the City of Carlsbad, California, a municipal corporation, ("City"), and AVAAP U.S.A. LLC, a Dela ware limited liability company (“Contractor") (collectively, the “Parties”) for Workday Deployment Services.
RECITALS
A. On June 23, 2026, the Parties executed Amendment No. 1 to the Agreement to inc
orporate additional integrations, complete a security role review, provide additional data validation, and provide additional training/knowledge transfer documentation; and B. The Parties desire to amend the Agreement’s scope of work to extend the project i
mplementation schedule; and
C. The Parties have negotiated and agreed to a project change order, which is attached to and incorporated by this reference as Exhibit "A", Project Change Order.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained her
ein, City and Contractor agree as follows:
1. In addition to those Services contained in the Agreement, as may have been amended from time to time, Contractor will provide those services described in Exhibit "A".
2. City will pay Contractor for all work associated with those services described in Exhibit “A” on a time and materials basis not-to-exceed nine hundred seven thousand five hundred dollars ($907,500.00) invoiced according to the amended milestone schedule outlined in Exhibit “A”.
3. With this Amendment, the total Agreement amount shall not exceed five million one hundred ninety-eight thou sand nine hundred th irty-one dollars ($5,198,931.00).
4. Contractor will complete all work described in Exhibit “A” by June 30, 2027.
5. All other provisions of the Agreement, as may have been amended from time to time, will remain in full force and effect.
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Attachment A
Sept. 1, 2026
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September
City Attorney Approved 5/30/2025
2 6. All requisite insurance policies to be maintained by Contractor pursuant to the Agreement, as may have been amended from time to time, will include coverage for this Amendment.
7. The individuals executing this Amendment and the instruments referenced in it on behalf of Contractor each represent and warrant that they have the legal power, right and actual authority to bind Contractor to the terms and conditions of this Amendment.
CONTRACTOR CITY OF CARLSBAD, a municipal
corporation of the State of California AVAAP U.S.A. LLC, a Delaware limited liability company
B
y: By:
(sign here) City Manager
(print name/title)
ATTEST:
By: SHERRY FREISINGER, City Clerk
(sign here) By
Morgen Fry, Assistant City Clerk
(print name/title)
If required by City, proper notarial acknowledgment of execution by Contractor must be attached.
If a corporation, Agreement must be signed by one corporate officer from each of the following two groups:
Group A Group B
Chairman,
President, or
Vice-President
Secretary,
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation.
APPROVED AS TO FORM:
CINDIE K. McMAHON, City Attorney
BY: _____________________________
Deputy City Attorney
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Sept. 1, 2026
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Exhibit “A”
Project Change
This Project Change Order amends the Statement of Work (SOW) referenced below and incorporates the terms of the Agreement (defined below). In the event of a conflict in terms between this Change Order and the Agreement, the terms of this Change Order shall prevail.
Client: City of Carlsbad (CoC)
Project Change Order Date: 8/5/26
SOW #, Project Name: 001, City of Carlsbad – ERP System Project Project Change Order #, Name: CO2 - City of Carlsbad Contract Amendment 2 Prepared By: Melissa Axelson
Internal Business Drivers and Reason for Change:
Extend go live date to December 21, 2026 with c ontinued support through February 12, 2026.
Business drivers and reasons for this change:
x Allow additional time to fully review configuration requirements x Provide an additional End-to-End test time
x Extend the effective duration for Go-Live Readiness activities CoC resources x Provide additional time for integration design, development, and testing x Provide additional time for custom report design, development, and testing x Extend the amount of time for the required two cycles of payroll parallel testing
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Sept. 1, 2026
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x Eight weeks of additional End-to-End testing
x Two additional weeks of Parallel Testing
x Four additional weeks of Go-Live Readiness support
x Additional upload of time off requests required at time of go-live. x Remove the following integrations from scope:
o INT080 Questica Accounting Journals Outbound API
o INT081 Questica Budget Amendments Outbound API
o INT082 Questica Employees EIB Outbound
o INT083 Questica Position EIB Outbound
o INT084 Questica Position Allocations EIB Outbound
x Add an additional 30 Reports to Scope
Timeline for Change
See Appendix A for the revised timeline.
Assumptions
x All Assumptions from the original SOW remain in place. x All Reporting Repository requirements should be finalized by Carlsbad no later than September 15th, 2026 in order to deliver the additional reports by go-live. x The Project Change Order estimate is valid for 30 calendar days from submission to Client for approval, unless otherwise agreed to by both parties.
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Sept. 1, 2026
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Docusign Envelope ID: C2AB38A3-AE6D-8F95-824F-48C9AC767E57 Docusign Envelope ID: 6F567E29-F49C-8681-80E0-44C23C1EB793 Estimated Change Order Implementation Fees
Avaap recognizes the Fixed Fee basis of the SOW and associated Milestone Payment Schedule.
Avaap shall perform and complete all Services described in this change order for an aggregate fee, exclusive of applicable tax and out-of-pocket expenses, equal to USD $907,500 (the “Fees”).
The Payment Schedule is revised as follows:
Original Payment Schedules (Contract Amendment 1):
Invoice Invoice Amount Invoice Date [or Milestone] Milestone Completion Documentation
1 5/5/25 $ 390,000.00 Mobilization Fee
2 5/30/25 $ 350,000.00 Phase 0 Pre-Plan
3 9/1/25 $ 675,000.00 Phase 1 Plan
4 11/15/26 $ 775,000.00 Phase 2 – A&C Part1
5 3/3/26 $ 775,000.00 Phase 2 – A&C Part 2
6 7/28/26 $ 525,000.00 Phase 3 – Test
6a 7/28/26 $ 103,881.00
Contract Amendment No.
1 (Line items 1, 2, 4, & 5)
7 10/1/26 $ 250,000.00 Phase 4 – Deploy
7a 10/1/26 $ 75,750.00
Contract Amendment No. 1
(Line item 3)
8 11/25/26 $ 123,400.00 Phase 5 – Post-Prod
9 Monthly $ 98,400.00 Ongoing Support (Billed as Time and Material)
10 Monthly $ 150,000.00 Travel Expenses (Billed as Time and Material)
Original Total $ 4,111,800.00
Amendment Total $ 179,631.00
Amended Total $ 4,291,431.00
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Sept. 1, 2026
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Docusign Envelope ID: C2AB38A3-AE6D-8F95-824F-48C9AC767E57 Docusign Envelope ID: 6F567E29-F49C-8681-80E0-44C23C1EB793 Revised Payment Schedules:
Invoice Invoice Amount Invoice Date [or Milestone] Milestone Completion Documentation
1 5/5/25 $ 390,000.00 Mobilization Fee
2 5/30/25 $ 350,000.00 Phase 0 Pre-Plan
3 9/1/25 $ 675,000.00 Phase 1 Plan
4 11/15/26 $ 775,000.00 Phase 2 – A&C Part1
5 3/3/26 $ 775,000.00 Phase 2 – A&C Part 2
6 7/28/26 $ 525,000.00 Phase 3 – Test Part 1
6a 7/28/26
$ 103,881.00
Contract Amendment
No. 1 (Line items 1, 2, 4,
& 5)
6b 9/15/26
$ 420,000.00 Phase 3 – Test Part 2
Contract Amendment
No. 2
6c 11/1/26
$ 420,000.00 Phase 3 – Test Part 3
Contract Amendment
No. 2
7 1/1/26 $ 250,000.00 Phase 4 – Deploy
7a 1/1/27 $ 75,750.00
Contract Amendment No. 1
(Line item 3)
7b 1/1/27
$ 67,500.00
Reporting Development
& Testing -Contract
Amendment No 2
8 2/26/2027 $ 123,400.00 Phase 5 – Post-Prod
9 Monthly $ 98,400.00 Ongoing Support (Billed
as Time and Material)
10 Monthly $ 150,000.00 Travel Expenses (Billed
as Time and Material)
Previous Total $ 4,291,431.00
Amendment Total $ 907,500.00
Amended Total $ 5,198,931.00
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Sept. 1, 2026
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Sept. 1, 2026
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Docusign Envelope ID: C2AB38A3-AE6D-8F95-824F-48C9AC767E57 Docusign Envelope ID: 6F567E29-F49C-8681-80E0-44C23C1EB793 Zach Korach, Deputy City Manager Administrative Services Doug Kappel, Information Technology Manager
September 1, 2026
Approval of Amendment No. 2
to Agreement with AVAAP
USA, LLC
RECOMMENDED ACTION
Adopt resolution authorizing the City
Manager to execute amendment no. 2
with AVAAP for Workday
Implementation Services
ITEM 2: Amendment No. 2 with AVAAP
2 CSM OVERVIEW
• As outlined during informational report presented
at the April 22, 2025, City Council Meeting and
approved by Council during the April 29, 2025, City
Council meeting:
• Centralized platform system for Finance, Human
Resources, Timekeeping and staff scheduling into modern solution
• Budget management system designed for city
governments with a public facing portal
• New utility billing and cashiering systems
3 ITEM 2: Amendment No. 2 with AVAAP
CSM BENEFITS
• Efficiency, accuracy and streamlined processes
• Enhanced public facing services
• Enhanced transparency into city finances
• Improved cybersecurity
4 ITEM 2: Amendment No. 2 with AVAAP
WORKDAY
• Central component of CSM
• Enterprise cloud platform for:
• Human capital management
• Financial management
• Analytics
• Replaces existing systems for
• HR
• Finance
• Part-time scheduling
• Time and attendance
• AVAAP
• Consulting firm assisting city with Workday implementation 5 ITEM 2: Amendment No. 2 with AVAAP
EXTENDED PROJECT SCHEDULE
• Original go-live was scheduled for October 1, if
approved, will shift to Jan 1
• Provides additional time for full testing of:
• Payroll
• Integrations with third-party systems
• Utility billing solution, both internal and public
facing components
• Additional validation of data migrated from
legacy systems
6 ITEM 2: Amendment No. 2 with AVAAP
BUDGET OVERVIEW
Original Agreement: $4,111,800
Amendment No. 1: $ 179,631
Amendment No. 2: $ 907,500
Agreement Total: $5,198,931
Within existing approved project budget as part of
Strategic Digital Transformation Investment Program
with funding from the Technology Capital
Investment Fund
7 ITEM 2: Amendment No. 2 with AVAAP
RECOMMENDED ACTION
Adopt resolution authorizing the City
Manager to execute amendment no. 2 with
AVAAP for Workday Implementation Services
8 ITEM 2: Amendment No. 2 with AVAAP