City Council
Report
City Council Meeting: October 8, 2024
Agenda Item: 5.D
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To: Mayor and City Council
From: Oscar Santiago, Director, Finance Department
Subject: Approval of First Modification to Tyler Technologies Agreement for the Enterprise Resource Planning (ERP) System
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Section 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) guidelines; and
2. Authorize the City Manager to negotiate and execute a first modification to agreement #10062 (CCS) in the amount of $1,851,000 (including a $10,000 contingency) with Tyler Technologies, Inc. (Tyler Tech.), to provide maintenance and support for Tyler’s Enterprise Resource Planning (ERP) software system for the Finance Department. This will result in a 5-year amended agreement with a new total amount not to exceed $6,211,000, with future year funding contingent on Council budget approval.
Summary
The City of Santa Monica currently uses Tyler Technology’s Enterprise Resource Planning (ERP) software system to perform critical citywide financial management, human resources, and payroll functions. The ERP is an essential system and the most utilized system in the City. To ensure continuity of services, staff seeks approval to increase the approved contract amount to cover the cost of an additional five years of subscription licensing, including maintenance and support services, in the amount of $1,851,000, for a new total not to exceed $6,211,000. Additionally, with this modification staff would revise the scope of services by replacing underutilized ERP modules with essential Application Programming Interfaces (API) to enhance reporting and data sharing across other third-party systems currently utilized by the City, as an 2 of 4
exception to competitive bidding per Santa Monica Municipal Code (SMMC) Sections
2.24.250(b).
Discussion
On May 12, 2015 (Attachment A) Council authorized the purchase of the Financial Management, Human Resources and Payroll system, Tyler Munis, which Tyler Technologies, Inc. later rebranded to Enterprise ERP. Significant staff and financial resources have been dedicated to customizing, integrating, and configuring the ERP to support compliance and various City functions such as Financial Reporting, Contracts Management, Procurement, General Billing, Human Resources, Payroll, Accounts Payable, and Grants Management. The system enables the City to manage all the City’s financial functions, while maintaining internal controls and preventing unauthorized use of City funds. Tyler Technologies Enterprise ERP continues to meet the City’s needs, and the manufacturer continuously improves, updates and evolves the system to maintain compliance with generally accepted tax and accounting principles and internal policies.
The modification to the maintenance and support agreement will ensure continuity of services by extending subscription services for an additional five years, enabling staff to continue to use the ERP, as well as to leverage all current and future API toolkits available by Tyler Technologies, Inc. The API tools will be utilized to establish integrations to share data between Tyler and non-Tyler applications. With access to the APIs the City can automate and streamline various financial and operational workflows, enhancing overall efficiency and data accuracy across citywide systems.
Vendor Selection
Exception to Competitive Bidding
Tyler Technologies is our current ERP system provider. The current system was selected from a competitive process in 2015 and meets the needs of the City for financial and human capital management. Due to the complexity of implementing an ERP system and the rigorous efforts to replace it, the standard lifecycle of an ERP 3 of 4
system ranges from fifteen to twenty-five years. With the new requirement for the API Toolkit, and the relative infancy of our ERP system, it is not practical to seek a new ERP system that includes an API Toolkit, but rather add on a toolkit. Because the API Toolkit was not originally needed, it was not included in the original solicitation. Since the new dollar value for the API Toolkit requires a competitive solicitation, staff is requesting an exception to competitive bidding for the reason above. Furthermore, soliciting new bids for an API Toolkit would be a lengthy disruption to the City’s operations due to the implementation of new software or services and increase the risk of errors and disruptions, resulting in hard and soft cost losses. Staff recommends that Tyler Technologies, Inc. be retained to provide proprietary API Toolkit as an exception to competitive bidding per SMMC Sections 2.24.250(b).
b. Good or service is only available from one license holder, including, proprietary goods.
Past Council Actions
Meeting Date Description
5/12/15 (Attachment A) Enterprise Resource Planning System Purchase Environmental Review
The contract modification is categorically exempt from CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines. The award contract is covered by the common sense exemption which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The modification will allow the City to continue to utilize its financial management, human resources, and payroll modules. Therefore, it can be seen with certainty that the agreement would not result in adverse physical impacts on the environment, and as such, is categorically exempt from CEQA.
Financial Impacts and Budget Actions
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Staff seeks authority to approve available funding from the General Fund to increase the amount of the agreement with Tyler Technologies, Inc. for an additional five years for maintenance and support services.
Agreement
#
Current
Authorized
Amount
FY 2024-25
Budget Modified
Request Amount
Future Years
Total Modified
Request Amount
Dept / CIP
Account #
Total Revised
Agreement
Amount
10062 $1,160,000 $316,091 $1,431,209 01300001.529230 $2,907,300 10062 $3,200,000 $103,700 $0 C0106320.689000 $3,303,700 Total $4,360,000 $419,791 $1,431,209 $6,211,000
Future year funding is contingent on Council budget approval.
Prepared By: Steve Gomez, Financial Operations Manager
Approved Forwarded to Council
Attachments:
A. May 12, 2015 Staff Report
B. Tyler Technologies ERP System (10062) - Original Contract (2015) C. Tyler Technologies - Living Wage Form FY24-25
D. Tyler Technologies - Oaks Initiative Form (2024)
E. Tyler Technologies - Levine Act Disclosure Form (2024)