CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 9 Section Name: CONSENT CALENDAR Account Number: 10-2121 File ID: 26-10963 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Information Technology Department
MEETING DATE: March 16, 2026
SUBJECT:
Microsoft Enterprise Agreement Subscription Increase — Approval RECOMMENDATION:
Approve a subscription increase to the City’s Enterprise Agreement (EA) with Microsoft for Office software, Windows desktop operating systems, and server products for Year 3 of the existing three-year agreement in the amount of $28,604.24, for a new total of $794,341.24; and authorize the Director of Information Technology to execute the subscription increase in substantially the form presented.
BACKGROUND:
The City established its Enterprise Agreement (EA) relationship with Microsoft in March of 2007 and last renewed it in January 2024, when the Council authorized an expenditure of $765,737. The EA includes desktop operating systems, software, and Microsoft cloud services like Teams, Outlook, and SharePoint. As part of the current EA, the City must report annually on Microsoft licensing and usage from the prior year including increases to licensing to support new users, in order to evaluate whether a higher annual subscription fee is needed. In accordance with the EA, the subscription for each year may be adjusted based on that reported usage. Given increases in user licensing to support additional headcount, the agreement will cost $28,604.24 more than originally agreed upon, for a new total payment in Year 3 of $271,965. To support this increase in licensing, City staff recommends approving the Year 3 Quote Confirmation (Attachment 1) for a total agreement amount of $794,341.24.
BUDGET IMPACT:
The agreed subscription fees for each year for the Microsoft EA were $255,245.92, and equivalent funds were included in the Information Technology Department's operating budget. For fiscal year 2024, the amount paid was $255,245.92. For fiscal year 2025, the amount paid was $267,130.24. This left a remainder of $243,360.84 in authorized expenditure from the $765,737 originally approved in 2024. The subscription fee for Year 3 is $271,965, resulting in a shortfall in Year 3 (FY 25-26) of $28,604.24. Given budget savings in other areas, the Information Technology Department can absorb the additional cost of $28,604.24 for the subscription fee for FY 25-26 within the Department's existing operating budget.
ENVIRONMENTAL DETERMINATION:
This subscription fee is not a project subject to CEQA, because it can be seen with certainty that it will not cause a physical change in the environment. (Public Resources Code Section 21065.)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Quote Confirmation
CITY OF SAN MATEO
STAFF CONTACT
Pete Owen, Director, Information Technology
[email protected]
(650) 522-7074