CITY COUNCIL STAFF REPORT
DATE: AUGUST 26, 2026 CONSENT CALENDAR SUBJECT: APPROVE COOPERATIVE PURCHASE AGREEMENT NO. 26C149 WITH INSIGHT PUBLIC SECTOR, INC., FOR MICROSOFT LICENSING
AND MAINTENANCE
FROM: Scott C. Stiles, City Manager
BY: Department of Information Technology
SUMMARY:
This action will approve Cooperative Purchase Agreement No. 26C149 with Insight Public Sector, Inc. to provide Microsoft licensing and maintenance in an amount not to exceed $909,039.60, for an initial three-year term, with one optional three-year extension.
RECOMMENDATION:
1) Approve Cooperative Purchase Agreement No. 26C149 (Attachment A) with Insight Public Sector, Inc., to provide Microsoft Licensing and Maintenance for City staff, in an amount not to exceed $909,039.60, for an initial three-year term, with one optional three-year extension;
2) Delegate authority to the City Manager to enter in an amendment to exercise the optional three-year term for an additional amount not to exceed $909,039.60, with a potential total Agreement value not to exceed $1,818,079.20; 3) Authorize the City Manager or designee to execute all necessary documents.
BUSINESS PRINCIPAL DISCLOSURE:
Insight Public Sector, Inc. is a publicly traded company on the NASDAQ. A listing of all the SEC filings can be found here: https://investor.insight.com/financial-reports/sec- filings/default.aspx. A signed Public Integrity Disclosure is included as Attachment B.
City Council Staff Report
August 26, 2026 -- Page 2
Cooperative Purchase of Microsoft Licensing and Maintenance Agreement BACKGROUND:
In June 2017, the City entered into a three-year agreement with Insight Public Sector, Inc. leveraging the County of Riverside contract for Microsoft licensing. The agreement included software solutions for email, office productivity and other features. Since the initial term, successive three-year agreements were approved by Council in 2020 and 2023. During this time, staff have taken a Microsoft first approach to look for solutions that provide cost efficiencies and enhance productivity as other solutions terms expire.
Some of the key implementations have been device management, consolidating server licensing and leveraging Sharepoint and Onedrive for centralized document storage and sharing.
Since the original contract, staff have also incorporated additional security features and acquired additional licenses for almost fifty additional City staff and approximately 120 Commissioners. In addition, staff are also running pilot tests in the organization using Copilot AI Licenses which provide new insights into our data based on the staff members’ existing unique level of access while ensuring City data stays protected.
STAFF ANALYSIS:
Staff contacted our Microsoft license partner early in the year to plan for the upcoming renewal and learned that Microsoft would be imposing an approximate 10% increase in pricing. Further compounding the price increase is the City adding approximately 7.5% additional FTEs during the same time. With this information in mind, staff focused on optimizing license types and fine-tuning to minimize the impact on the budget. Based on the prior renewal period of $284,000 a year, the expected new licensing costs based on additional licenses and Microsoft increases were estimated to be $336,000 per year. Staff currently budget 3% adjustments every year for software, so the forecasted FY27 budget amount was $310,000 for Microsoft licenses.
Staff began reviewing usage requirements and identifying changes to the Microsoft licensing options in the last three years. By adjusting licenses across different job classifications, staff were able to generate considerable savings, estimated at $32,987 a year plus any open marked annual increases that would be applied.
The attached three-year quote from Insight Public Sector, Inc. for $909,039.60 ($303,013.20 per year) includes the same base functionality, new user license count requirements, and new licenses for CoPilot. Following the completion of the initial three- year term, the City has the option to extend the term an additional three-years with an estimated additional cost of $909,039.60, for a potential total Agreement value of $1,818,079.20.
ENVIRONMENTAL ASSESSMENT:
The requested City Council action is not a “Project” as defined by the California City Council Staff Report
August 26, 2026 -- Page 3
Cooperative Purchase of Microsoft Licensing and Maintenance Agreement Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. The requested action is to approve contracts for the above-mentioned services, and is exempt from CEQA pursuant to Section 15378(b), in that a “Project” does not include: (5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
ALIGNMENT WITH STRATEGIC PLANNING:
Approval of this action supports City Council’s Strategic Plan Broad Goal of Infrastructure and Facilities, and Foundation of Financial and Organizational Well-Being.
FISCAL IMPACT:
Sufficient funds are budgeted and available in the current fiscal year in Information Technology Account 1001025-50034.
REVIEWED BY:
Department Director: Larry Klingaman
Procurement & Contracting Manager: Tabitha Richards
Deputy City Manager: Jeremy Hammond
City Manager: Teresa Gallavan for Scott Stiles
ATTACHMENTS:
A. Insight – Microsoft Enterprise Agreement
B. Public Integrity Disclosure