City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-00661 May 10, 2022 Consent Item 18
Title: Agreement: Department of Utilities Inventory Implementation Project
Location: Citywide
Recommendation: Adopt a Resolution authorizing the City Manager or City Manager’s designee to: 1) transfer expenditure budgets from the Information Technology Multi-Year Operating Program (MYOP) (I14040100) to the DOU Information Technology Capital Improvement Program (CIP) (Z14170100) in the amount of $1,439,910 ($892,744 (Water Fund 6005), $287,982 (Wastewater Fund 6006), and $259,184 (Storm Drainage Fund 6011)); and 2) execute a professional services agreement with CherryRoad Technologies, Inc. (CherryRoad) to implement a PeopleSoft Supply Chain Management Inventory Module for the Department of Utilities (DOU) for an amount not to exceed $554,800.
Contact: Rong Liu, IT Manager, (916) 808-1979, [email protected] , Maria
MacGunigal, Chief Information Officer, (916) 808-7998, [email protected], Information Technology, Ryan Pham, Business Services Manager, (916) 808-8995, [email protected], Department of Utilities.
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution
3-Agreement
Description/Analysis
Issue Detail: The DOU operates two centralized warehouse locations with over two million dollars of on-premises inventoried assets such as tools, parts, supplies, and consumables; all necessary for the ongoing operations and maintenance of the City’s water, wastewater and storm drainage facilities, and vast underground infrastructure systems.
For many years, the current inventory management and warehousing process has existed as-is. Though there have been several improvements in integration with work management systems, the overall process needs to be updated, improved, and automated. A recent City audit emphasized this, specifically pointing out:
• There is a lack of a comprehensive toolset specifically designed to manage inventory. • Two different work order systems have been adapted to track inventory, one for each warehouse location.
• There is no access to real-time inventory counts and internal controls. • Inventory processes vary by warehouse location.
• Excess staff time is necessary to manually reconcile and report inventory counts. • There is no direct interface with the City’s Enterprise Resource Planning system (electronic Citywide Accounting and Personnel System (eCAPS)). • Customers have no visibility of the status of their orders. • Challenges exist with implementing new practices as the current process will not support change easily.
The City already owns a license for a technical solution which would address these issues. The Oracle PeopleSoft Supply Chain Management Inventory Module was purchased at the time of the City-wide implementation of eCAPS but was never implemented.
Approval of this agreement will allow the implementation of this module.
Policy Considerations: The requested action in conformance with the City Code Chapter
3.64 and in accordance with the goals, objectives, initiatives, and operating principles of the City’s Digital Strategy.
Economic Impacts: None
Environmental Considerations: This action is in keeping with the City’s sustainability goals in that it enhances the DOU’s ability to provide water, wastewater and storm drainage services to its customers in a sustainable manner.
Sustainability: Not applicable
Commission/Committee Action: Not applicable
Rationale for Recommendation: In July 2021, City staff issued a Request for Proposal (RFP) for technical services to assist in integrating, configuring, and implementing the inventory module in eCAPS. A total of two proposals were received. The proposals were reviewed and evaluated by a team consisting of staff from the Information Technology (IT) Department and the DOU. The evaluation team determined that CherryRoad best met the City’s needs and provided the best value to the City. In addition, CherryRoad was the original implementor and is familiar with the City’s eCAPS system.
This solution is aligned with the Citywide Digital Strategy and the DOU IT Master Plan, and since the City already owns the license for Supply Chain Management Inventory, costs are kept to a minimum. Implementation of this system will address the City Auditor’s concerns and achieve the following:
• Adoption of industry best practices,
• Integration with eCAPS financial modules for accurate and timely cost accounting, • Access to real-time inventory counts, avoiding costly overstocking and shortages, • Streamline the process of fulfilling customer requests, improving service delivery; and • Reduce the risk of fraud, waste and abuse.
Financial Considerations: The total project costs include the professional services agreement with CherryRoad Technologies for an amount not to exceed $554,800 and staff time for project management and implementation of $885,110 for a total not to exceed $1,439,910. To provide sufficient funding for this project, staff recommends the following budget transfers from the Information Technology MYOP (I14040100).
Project Project Description Fund Amount
I14040100 Information Technology MYOP 6005 ($892,744) I14040100 Information Technology MYOP 6006 ($287,982) I14040100 Information Technology MYOP 6011 ($259,184) Z14170100 DOU IT Program 6005 $892,744
Z14170100 DOU IT Program 6006 $287,982
Z14170100 DOU IT Program 6011 $259,184
There are no General Funds planned or allocated for this project.
Local Business Enterprise (LBE): CherryRoad is not an LBE. The minimum LBE participation requirement was waived by the Director of Technology as the staff has determined the waiver is in the City’s best interest.
RESOLUTION NO. 2022- _____________
Adopted by the Sacramento City Council
May 10, 2022
PROFESSIONAL SERVICES AGREEMENT WITH CHERRY ROAD TECHNOLOGIES
EXECUTION FOR THE IMPLEMENTATION OF THE DEPARTMENT OF UTILITIES INVENTORY PROJECT (Z14170100) AND RELATED BUDGET TRANSFERS
BACKGROUND
The Department of Utilities (DOU) operates two centralized warehouse locations with over two million dollars of on-premises inventoried assets such as tools, parts, supplies, and consumables − all necessary for the ongoing operations and maintenance of the City’s water, wastewater and storm drainage facilities, and vast underground infrastructure systems.
A. The current inventory management and warehousing process have existed as-is for many years. Though there have been several improvements in integration with work management systems, the overall process needs to be updated, improved, and automated.
B. The City already owns a license for a technical solution which would address these issues. The Oracle PeopleSoft Supply Chain Management Inventory Module was purchased at the time of the City-wide implementation of eCAPS but was never implemented.
C. The professional services agreement is for professional technological implementation services that are necessary to proceed with the implementation of the inventory module with Cherry Road Technologies for an amount not to exceed $554,800.
D. A budget transfer in the amount of $1,439,910 is required to provide sufficient funds to complete the project from the Information Technology Multi-Year Operating Program (MYOP) (I14040100) to the DOU Information Technology Capital Program (CIP) (Z14170100).
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1 The following budget transfers are approved:
Project Project Description Fund Amount
I14040100 Information Technology MYOP 6005 ($892,744) I14040100 Information Technology MYOP 6006 ($287,952) I14040100 Information Technology MYOP 6011 ($259,184) Z14170100 DOU IT Program 6005 $892,744
Z14170100 DOU IT Program 6006 $287,982
Z14170100 DOU IT Program 6011 $259,184
Section 2. The City Manager or the City Manager’s designee is authorized to execute a Professional Services Agreement with Cherry Road Technologies for an amount not to exceed $547,800.
Adopted by the City of Sacramento City Council on May 10, 2022, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Attest:
The presence of an electronic signature certifies that the foregoing is a true and correct copy as approved by the Sacramento City Council.