DATE: March 24, 2025
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Diane Pitman, Administrative Services Director
Rob Lasky, IT Manager
DEPARTMENT: Administrative Services
SUBJECT: INFORMATION TECHNOLOGY INTERNAL SERVICE FUND
BUDGET FOR FY 2025-2026
RECOMMENDATION
It is recommended that the City Council review this report and its attachments, and by Minute Order, provide policy direction on the proposed Information Technology (IT) internal service expenditures budget, including the scheduled replacement purchases and Information Technology Fund charges in the Fiscal Year 2025-2026 Preliminary Budget.
BACKGROUND/ANALYSIS
Attached are the spreadsheets for the IT Equipment Replacement Fund. The City continues to use the Internal Service Fund Methodology developed in FY 2005-2006 in determining the Information Technology Replacement Fund listing for FY 2025-2026.
On an annual basis, the IT Division reviews with each department their list of assets to determine which items are no longer needed, which equipment should be replaced, or which new assets will be requested. The replacement lives and values of each asset are also reviewed by the IT Division and adjusted where necessary. Assets that are fully funded are not automatically replaced. If it is determined that it is in good working condition, the asset accrual is frozen, and no replacement charges are accrued.
Total IT internal service charges for FY 2025-2026 will be $2,795,504 which is
$276,819 (or ~ 9.9%) higher than internal service charges for FY 2024-2025 of $2,518,685. The main reason for the increase is that FY 2025-26 has more high-cost capital projects and consulting planned than in FY 2024-25.
The following table summarizes the items that had the highest impact on the changes to the IT fund:
Key Projects for FY 2025-2026 Fiscal Impact
ERP System - RFP Development and Proposal Evaluation: As identified in the IT Strategic Plan that was presented to City Council in 2024, this line item will allow staff to bring in consulting assistance to build the RFP document to replace the ERP System that runs the City’s financial and accounting, HR and payroll, and utility billing functions.
$90,000
Expansion of Cartegraph Maintenance Management Software:
As part of the 3-year agreement signed by Council in June 2024, the City is adding additional modules to Cartegraph Maintenance Management Software. In FY 2025-2026, the
City will add the ability to track maintenance to the Wastewater System and Traffic Signals.
$30,000
Police Car Computer Replacements: The computers in the
Police Department’s patrol cars are up for replacement. The computers that are currently installed were purchased in 2018. $90,000
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
Total IT internal service charges for FY 2025-2026 will be $2,795,504 which is $276,819 (or ~ 9.9%) higher than internal service charges for FY 2024-2025 of $2,518,685. The main reason for the increase is that FY 2025-26 has more high-cost capital projects and consulting planned than in FY 2024-25.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Innovation
ATTACHMENTS:
Attachment 1 – Draft FY 2025-2026 Operating Budget – Information Technology Fund Attachment 2 – Department Internal Services Charges Allocation Summary for FY 2025-2026
Attachment 3 – Information Technology Fund Comparison for FY 2025-2026 Attachment 4 – Internal Service Fund Variance Analysis
Attachment 5 – Schedule of Items to be Replaced for FY 2025-2026 Attachment 6 – Items Added to or Deleted From the Equipment Replacement FY 2025- 2026
Attachment 7 – Changes to Estimated Useful Lives for FY 2025-2026 Attachment 8 – Changes to Replacement Values for FY 2025-2026 Attachment 9 – Budget Narrative for FY 2025-2026 - Information Technology Fund