Agenda Item No: K.6
AGENDA REPORT
DATE: March 3, 2026
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2026-32 IT Microsoft Renewal with SHI International Corporation
Approving Renewal of Microsoft Enterprise License Agreement Through SHI International Corporation, Reseller of the California Department of Technology Microsoft Agreement
Funding Source: $2,611,188; 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 Statewide Microsoft Enterprise License Agreement Program with the California Department of Technology, via reseller SHI International Corp. The City's current enrollment, authorized by Resolution 2022- 258 expires on March 31, 2026.
DISCUSSION
The City’s Microsoft licensing program consists of two primary components:
1. On-Premises Licensing – server operating systems, SQL databases, Project, Visio, and Remote Desktop licensing.
2. Microsoft 365 Cloud Licensing – workstation operating systems, Microsoft cloud tenant, cloud storage, and licensing for M365 apps.
The current item before council authorizes renewal of the City’s Microsoft Enterprise Agreement (EA) for cloud -based Microsoft services and software licensing, purchased through SHI International Corporation. This EA provides five years of licensing for key Microsoft products required for City communication, collaboration, and delivery of essential services.
The City participates in a cooperative purchasing agreement established by the California Department of Technology (CDT). The EA allows new licenses and products to be added during the term of the agreement and these newly added products become part of the ongoing agreement renewed annually. There is an annual true-up 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 added M365 cloud licenses or storage.
FINANCIAL IMPACT
The proposed renewal costs for Microsoft 365 Cloud Licensing and support are detailed below:
Fiscal Year
(FY)
Microsoft
License Cost
Estimated
CDT Fees
Annual Totals Term
2026 $439,830 $28,095 $467,925 4/1/2026 - 3/31/2027
2027 $439,830 $28,095 $467,925 4/1/2027 - 3/31/2028
2028 $450,540 $28,779 $479,319 4/1/2028 - 3/31/2029
2029 $450,540 $28,779 $479,319 4/1/2029 - 3/31/2030
2030 $450,540 $28,779 $479,319 4/1/2030 - 3/31/2031
Subtotals $2,231,280 $142,527 $2,373,807
Contingency $237,381
Total $2,611,188
There are sufficient funds budgeted for this purchase under the Computer Fund’s Microsoft Enterprise Licensing Project (OITMSELCOP).
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 licensing compliance for the use of Microsoft software, 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
Nick Giaccio, IT Manager
(707) 428-7760
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: Proposed Quote
Attachment 4: CDT Service Catalog General Terms and Conditions