July 26, 2022
Agenda Item No. 9
TO:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:
Grace K. Leung, City Manager - 949-644-3001, [email protected] PREPARED BY:
Scott Catlett, Finance Director/City Treasurer
[email protected], 949-644-3126
Avery Maglinti, IT Manager
[email protected], 949-644-3091
TITLE:
Five-year Licensing and Support Agreement with Tyler Technologies Inc. for the Tyler Munis Enterprise Resource Planning System ABSTRACT:
In 2014, the City of Newport Beach (City) entered into a five-year agreement to implement and license the Tyler Munis Enterprise Resource Planning (ERP) system. This agreement expired in December 2019 and has continued on an annual renewal basis. Staff is requesting approval to enter into a new five-year agreement with Tyler Technologies for the licensing and support of the Munis ERP system.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly; b) Authorize the Mayor and City Clerk to execute a five-year licensing and support agreement with Tyler Technologies Inc., the sole provider of the Tyler Munis ERP system, for a not-to-exceed amount of $1,230,313; and c) Retroactively approve purchase orders executed with Tyler Technologies over the prior four fiscal years.
DISCUSSION:
In 2014, the City entered into a five-year service and licensing agreement with Tyler Technologies for the implementation of the Munis Enterprise Resource Planning (ERP) system. Tyler Munis ERP was selected after an extensive and competitive selection process to replace legacy financial, utility billing, and human resource applications. The system was implemented in five phases over the course of three years and was completed in 2017. The Munis ERP system is critical to the daily operations of every City department. It has helped streamline and automate many service-related processes throughout the organization. Included within the initial five-year agreement was continuing annual software licensing and support through the term of the agreement.
As historically the City’s software maintenance contracts have been well under $120,000 per year, past practice did not include a check to ensure that a software maintenance contract did not exceed $120,000 per year. Any software maintenance contract in excess of $120,000 should have been approved by the City Council. As a result of this deficiency, once the five-year contract with Tyler Technologies expired, the renewals for the software maintenance contract for the subsequent four fiscal years were approved administratively by staff consistent with past practice. The annual renewals were in the range of $190,000 to $215,000 per year.
When this issue was brought to the attention of the IT Manager and the Finance Director in late 2021, staff contacted Tyler Technologies to negotiate a new five-year agreement for licensing and support, which is now before the City Council for approval. The Purchasing Division has also instituted new procedures to ensure that no software maintenance purchase orders are approved over $120,000 unless Council approval has been obtained and documented when the purchase requisition is submitted to the Finance Department.
Realized Benefits of the Tyler Munis System
The implementation of Tyler Munis provided the City with several efficiency opportunities to streamline operations and communication among the public, vendors and staff. Some of the key benefits realized by implementing the Munis ERP include the following:
The system has allowed staff to take advantage of best practices and has significantly improved the efficiency and effectiveness of the City’s Customer service and business processes.
Manual processes have been automated and converted to paperless recordkeeping, providing staff with real-time information to improve business processes.
The software has provided enterprise-wide workflow approval of financial and human resources transactions.
Shadow systems and processes for data entry, storage and manual processing have been eliminated.
Robust reporting options to provide better information to the public and staff.
Role based security has provided a holistic approach to data access management improving the security and integrity of enterprise data.
Modules and services included and covered in this licensing and support agreement are:
Tyler System Management & Support
Human Resources
Payroll
Central Property
Utility Billing
Maplink GIS Integration
Accounting
Budget
Accounts Payable
BMI CollectIT
Contract Management
Employee Expense Reimbursement
Fixed Assets
Warehouse Inventory
Project & Grant Accounting
Purchase Orders
Requisitions
Treasury Management
Accounts Receivable
General Billing
Tyler Cashiering
Annual Comprehensive Financial Report
Tyler Forms Processing
eProcurement
Citizen Self Service
Munis Analytics and Reporting
Tyler Content Manager Enterprise
The annual cost of this licensing and support agreement is $222,655.47 with a 5% cap on increases annually. This translates to a total anticipated cost of $1,230,313 for the fully executed five years of licensing and support contained in the agreement.
FISCAL IMPACT:
The adopted budget includes sufficient funding for this purchase. It will be expensed to the Software License Renewal account in the City Manager’s Office IT Division, 76420203-871017.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A – Software License and Maintenance Agreement 9-3
9-1
Five-year Licensing and Support Agreement with Tyler Technologies Inc. for the Tyler Munis Enterprise Resource Planning System July 26, 2022
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