Agenda Item No: N.8
AGENDA REPORT
DATE: October 21, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2025-202 IT Microsoft Renewal with Crayon Software Experts, LLC
Approving Renewal of Microsoft Enterprise Agreement for On-Premises Licensing with Crayon Software Experts, LLC
Funding Source: $382,590; Computer Fund
Contact: Naveed Ashraf, (707) 428-7582
RECOMMENDED ACTION
Adopt resolution.
STATEMENT OF ISSUE
The attached resolution seeks authorization to renew the City's enrollment in the Microsoft Enterprise Agreement Program with Crayon Software Experts, LLC. The City's current enrollment, authorized by Resolution 2022-258, expires on October 31, 2025.
DISCUSSION
The City’s Microsoft licensing program consists of two primary components:
1. On-Premises Licensing – covering physical servers, data center licensing, Enterprise Structured Query Language ( SQL) servers, Visio Professional, Project Standard, Remote Desktop licensing, and Microsoft Co-Pilot.
2. All Office 365 Cloud Licensing – covering Office 365 tenant services (Outlook, One Drive, Share Point) and Azure licensing.
Historically, the I nformation Technology (IT) Department brings the two agreements for City Council consideration at the same time. H owever, due to delays in a state -negotiated contract, the renewal agreement for the Office 365 Cloud applications is not yet available. That item will return to council early next year once the State of California negotiated cooperative agreement is completed.
The current item before council authorizes renewal of the City’s Microsoft Enterprise Agreement (EA) for on -premises Microsoft services and software licensing, purchased through Crayon Software Experts, LLC. The EA provides three years of site licen sing for key Microsoft products required for City computer systems, including server operating systems and associated applications.
The City participates in a cooperative purchasing agreement established by the County of Riverside's joint volume licensin g program. Any Microsoft discount realized from the Riverside Agreement negotiations prior to October 31, 2025, will be extended to the City, as noted in the Crayon Software Experts, LLC quotes.
FINANCIAL IMPACT
Funds for the Microsoft Enterprise renewal are budgeted in the IT Department’s Computer Fund (Project OITMSELCOP). The proposed renewal costs for Microsoft on-premises licensing software and support costs for the three-year term are detailed below:
Fiscal Year (FY) On-Premise
Licensing
Co-Pilot
Licensing
Amount
2026 $114,113.05 $7,344.00 $121,457.05
2027 $114,113.05 $7,344.00 $121,457.05
2028 $114,113.05 $7,344.00 $121,457.05
Subtotal $342,339.15 $22,032.00 $364,371.15
Contingency $18,218.85
Total $382,590.00
There is an additional annual “true -up” which may be required to bridge the gap between estimated licenses needed and actual licenses used. The City must legally comply with Microsoft’s “true up” audit and pay any additional licensing fees due to additional server operating systems and database server production deployments. This may add to the licensing count but is not to exceed $382,590 for the duration of the agreement, which includes a $18,218.85 contingency.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
The council may choose not to approve the resolution, resulting in the City falling out of Microsoft licensing compliance for the use of Windows server operating sy stems and other applications, risking a $100,000 fine per infraction or requiring staff to seek alternatives to Microsoft products which would likely cause significant organizational disruption.
COORDINATED WITH
N/A
STAFF CONTACT
Nicholas Giaccio, IT Manager (Interim)
(707) 428-7760
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Proposed Agreement - County of Riverside 8084445 Attachment 4: Proposed Microsoft Enterprise Enrollment Quote 1 Attachment 5: Proposed Microsoft Enterprise Enrollment Quote 2