Agenda Report
Fullerton City Council
MEETING DATE: APRIL 7, 2026
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: EDDIE MANFRO, CITY MANAGER
PREPARED BY: KIM CHAUDHRY, SENIOR ADMINISTRATIVE ANALYST SUBJECT: ADDITIONAL MICROSOFT RENEWAL LICENSES EMERGENCY PURCHASE RATIFICATION
SUMMARY
Staff requests City Council ratify an adjustment to previously approved Microsoft license and subscription renewals to ensure essential City systems continuity. Staff identified additional costs to maintain uninterrupted access to critical infrastructure following server licensing requirements reconciliation under the Microsoft Enterprise Agreement.
PROPOSED MOTION
Ratify emergency purchase for Microsoft reflecting a $39,737.69 additional cost for license and subscription services.
Authorize City Manager, or designee, to execute and administer related documents, in a form approved by the City Attorney.
ALTERNATIVE OPTIONS
Approve the Proposed Motion
Do not ratify emergency purchases
Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
None
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Infrastructure and City Assets.
FISCAL IMPACT
City Council approved Microsoft license and subscription renewals on March 17, 2026 totaling $534,608.45. Staff reconciled the number of server licensing requirements and found the City needs an additional $39,737.69, resulting in a $574,346.14 revised total. The Information Technology Internal Service Fund (Fund 68) has funding available for this adjustment in the Fiscal Year 2025–26 Adopted Budget.
BACKGROUND AND DISCUSSION
City Council approved the Microsoft license and subscription services renewal on March 17, 2026 to ensure essential systems continuity before the City agreements expire on March 31, 2026. These licenses support critical City operations, including server infrastructure, cybersecurity protections and enterprise software utilized across all departments.
Staff completed a final licensing requirement reconciliation across both user-based and server-based systems. Staff identified additional Microsoft Defender for Endpoint licenses needed to accommodate the number of Microsoft 365 users and maintain appropriate cybersecurity coverage. This resulted in an additional $22,621.44 cost.
Microsoft licensing requires certain licenses purchased at full cost upon initial deployment and subsequent renewals billed at a lower rate. Staff found the City had not previously licensed a portion of the required server licenses at full cost during the reconciliation process and therefore requires a one-time true-up. This resulted in an additional $17,116.25 cost.
The City agreement with Microsoft expired on March 31, 2026. Staff proceeded with the necessary licensing adjustments to ensure uninterrupted access to critical systems and avoid disruption to City operations. Staff now presents this item to City Council to ratify the adjusted licensing cost.
Staff recognizes the importance of ensuring licensing quantities and has fully reconciled cost structures. Staff will implement additional review and coordination with the incoming IT vendor to ensure the City thoroughly validates and aligns licensing requirements prior to future approvals.
Attachments:
Attachment 1 – Previously Approved Microsoft End-User Products Quote (SHI) Attachment 2 – Updated Microsoft End-User Products Quote cc: City Manager Eddie Manfro
Microsoft License Renewal Emergency Purchases
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