TO:
VIA:
FROM:
DATE:
CITY COUNCIL
CITY ADMINISTRATOR
DIRECTOR OF FINANCE
JUNE 18, 2024
Placentia Cit Council
AGENDA REPORT
SUBJECT: AWARD OF PROFESSIONAL SERVICES MASTER AGREEMENT WITH
ORACLE AMERICA INC FOR ORACLE NETSUITE FOR GOVERNMENT
FISCAL
IMPACT: Expense: FY 2024-25 $ 67,542 Annual Costs
$169,154 One-time Implementation Cost
$236,696 Total Cost
Budgeted: FY 2024-25 $300,000
SUMMARY:
The City is currently utilizing Finance Enterprise 20.2, a Central Square, Inc. product, as its financial enterprise resource planning (ERP) system. The City has been using various versions of this product since 2006, upgrading to new versions when necessary, with the last upgrade completed in Fiscal Year (FY) 2021-22. Central Square has informed the City that it will no longer support our current version, and we will need to upgrade again in December 2024.
Due to the current needs of the City not supported by our existing ERP system, increasing cost of the software and lack of technical support and customer service from Central Square, Staff researched alternative products that would best meet the City's needs. After reviewing other products on the market, Staff is recommending Oracle NetSuite for Government, an ERP platform designed by Oracle specifically for small to mid-size government agencies. Staff is recommending utilizing the National Association of State Procurement Officials (NASPO) cooperative agreement in accordance with the City's purchasing policy for this purchase.
RECOMMENDATION:
It is recommended that the City Council take the following actions:
1. Approve an initial five (5) year Professional Services Master Agreement with Oracle America, Inc. for NetSuite for Government for an approximate cost of $236,696 for year one (1), and an annual subscription cost of $67,542 for years two (2) to five (5); and
2. Authorize the City Administrator and/or his designee to execute all necessary documents, in a form approved by the City Attorney.
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City Council Agenda
June 18, 2024
DISCUSSION:
In order to meet the needs of the City and in our continuous pursuit of enhancing operational efficiency and service delivery, we are proposing to enter into a new professional service agreement with Oracle America for NetSuite for Government. Oracle NetSuite for Government is a comprehensive cloud -based ERP solution tailored specifically for small to midsize government organizations that are asked to do more with less. Its unified platform provides modules such as financial management, budgeting, procurement, grant management, and more. Oracle NetSuite for Government's goal is to help agencies streamline operations, enhance transparency, and improve efficiency. It offers real-time data insights, empowering decision -makers with accurate information to make informed decisions and drive strategic initiatives.
Specific functionalities desired in the new system include:
1. Paperless routing and workflow of invoices, purchase requisitions and purchase orders.
This will greatly increase efficiency in the accounts payable and purchasing process as well as improve budget management as purchase orders will be budget verified and encumbered in the system immediately compared to the current paper-based process which takes several days.
2. Cloud -based system accessible from any computer without the need to remote into a dedicated server which is what the City currently utilizes. This will enhance the ability for staff whom work outside of City Hall to work more efficiently and in real time.
3. Enhanced ability to manage project accounting. Our current system does not have capability for easily tracking projects from one fiscal year to the next, however Oracle's ERP includes project management module to more easily manage projects in their totality, as they often span two or more fiscal years.
4. Digital signatures/approvals with complete audit trail for all transactions.
5. Ability to upload backup documentation including multiple quotes, invoice copies, staff reports, etc. into the system for historical record.
6. Seamless integration with the City's new electronic timekeeping and payroll system, UKG.
FISCAL IMPACT
Our current contract with Central Square has an annual increase of five percent (5%), however we've been notified that they will no longer support our current version after 12/31/2024 without an upgrade. We have not yet received a cost estimate for this upgrade. Oracle is offering the City a static five (5) year price commitment for NetSuite for Government. Based on the 5 -year projection below,
Central Square Oracle NetSuite Cost Savings
FY 24/25 104,835 236,696 131,861
FY 25/26 110,077 67,542 (42,535)
FY 26/27 115,581 67,542 (48,039)
FY 27/28 121,360 67,542 (53,818)
FY 28/29 127,428 67,542 (59,886)
Total 579,281 506,864 (72,417)
City Council Agenda
June 18, 2024
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the City will save $72,417 over five (5) years when compared to maintaining the current finance system, not inclusive of the unknown cost for the required upgrade. Funding for the new system is included in the Adopted FY 2024/25 Capital Improvement Program (CIP) budget.
Prepared by:
Gavin Houn
Senior Financial Analyst
Reviewed and approved:
Jennifer La`mpman
Director of Finance
Reviewed and approved:
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Damien R. Arrula
City Administrator
Attachments:
1. Professional Services Ordering Document (Implementation)
2. Oracle Ordering Document (Subscription)
3. NASPO Value Point Participating Addendum
4. DGS Authorization Document