City Council Agenda Report
May 28, 2024
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Jana Stuard, Director of Finance/Treasurer
Jennifer Hernandez, Senior Management Analyst
SUBJECT: SOFTWARE AGREEMENT FOR ACCOUNTING STANDARDS BOARD
COMPLIANCE
Background:
In May of 2020, the Government Accounting Standards Board (“GASB”) released Statement No. 96 which provides guidance on the accounting and financial reporting requirements for government end-users of subscription-based information technology arrangements (“SBITAs”) which consists of all software licenses and subscriptions. GASB 96 serves as an extension of existing reporting requirements under GASB 87, which requires public entities to report on all leases. GASB 96 went into effect, June 15, 2022, which required the City to monitor, record and report on all software purchases as part of the Annual Comprehensive Financial Report for Fiscal Year 2022-2023.
To ensure compliance with existing, new and any forthcoming GASB requirements, in early 2023 City staff conducted a search for technology-based solutions available in the market that specialize in government entity financial reporting requirements. Following thorough reviews, demonstrations and negotiations with various firms, the City determined that the DebtBook system best met the current and foreseeable needs of the City.
Following the first year of implementation and use, the City has successfully completed necessary reporting and continued monitoring over its leases, software and debt; all of which have now been consolidated into one easy-to-use platform resulting in streamlined reporting and accessibility of necessary documents, reports and records.
Analysis:
The City entered into an annual software agreement with Debtbook that is set to expire May 30, 2024. The City has two options to renew the software subscription to avoid disruption in monitoring:
City Council May 28, 2024
Approval of Software Agreement Page No. 2
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8 Option 1:
•Enter into a three-year agreement with DebtBook, that provides a discounted annual subscription fee, for a total contract value of $66,300 over the term of the agreement and fixed pricing as follows:
Year Period Subscription Fee
Year 1 June 1, 2024, through May 30, 2025 $21,000
Year 2 June 1, 2025, through May 30, 2026 $22,100
Year 3 June 1, 2026, through May 30, 2027 $23,200
TOTAL $66,300
Option 2:
•Enter into another one-year agreement in the amount of $23,000, that is within the City Manager’s signing authority to continue services.
DebtBook utilizes a tiered fee schedule that is dictated by the number of records stored in the system annually. As such, the total annual subscription cost of the system can vary as the City continues to purchase software and subscriptions and enters into new leases.
By entering into a three-year agreement with DebtBook, the City has an annual fixed subscription for three years that will not be adjusted based on the number of records. Additionally, by entering into a three-year agreement, rather than a one-year agreement, the City receives discounted annual rates that would not otherwise be offered by simply renewing the subscription on a year- to-year basis.
To take advantage of discounted pricing, and fixed subscription fees, staff recommends renewing through Option 1 by entering into a three-year agreement with DebtBook which will result in long-term savings for the City to continue its required monitoring and reporting for GASB compliance.
Fiscal Impact:
The cost of the DebtBook software subscription is currently budgeted in the current fiscal year.
Years two and three costs will be included as part of the City’s regular budget process.
Citizens Advised:
N/A
Strategic Plan 2023 Implementation:
The recommended action is consistent with the City’s 2023-2025 Strategic Plan Goal 3 of Creating and Sustaining a Resilient Economically Prosperous City.
City Council May 28, 2024
Approval of Software Agreement Page No. 3
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8 Recommended Action:
Staff recommends City Council approve a software agreement with DebtBook to provide GASB compliance and monitoring for a term of three years in the amount of $66,300; and authorize the City Manager to execute the agreement and any amendments thereof, provided there is funding in the budget and it is within the City Manager’s signing authority, on behalf of the City, in a form approved by the City Attorney.
Attachments:
N/A