TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:August 26, 2025
SUBJECT: Additional Microsoft Licenses
RECOMMENDATION:
1. Approve increase to the not-to-exceed amount for Microsoft licensing purchases with Dell Technologies in the amount of $97,100 for a new total not to exceed $867,100 for additional licenses purchased.
2. Authorize expenditure in the amount of $97,100 from A/C #001-3410-612-6210 (General Fund, Computer Software Licenses) to pay for additional licenses.
3. Authorize City Manager, or designee, to execute purchases from Dell Technologies within the established not-to-exceed limit.
4. Find that this action is not a project as defined under the California Environmental Quality Act.
LEVINE ACT ITEM: Yes
FINANCIAL IMPACT:
No Additional Funding Requested. Minimal staff time required to prepare the report is included in the Adopted FY 2025-26 General Fund Budget. $97,100 is included in the Adopted FY 2025-26 General Fund Budget for computer software licenses.
BACKGROUND:
The City’s Information Technology Department is responsible for licensing the City’s computer software and maintaining software maintenance contracts for the City’s major applications. On May 9, 2023, City Council approved a piggy-back onto County of Riverside’s agreement #8084445 for renewal of annual Microsoft licensing maintenance with Dell Technologies (Dell) for the period of June 1, 2023, to May 31, 2026, in a not-to-exceed amount of $770,000 for the term of the agreement. The City is within the 3-year licensing maintenance agreement with
Additional Microsoft Licenses
August 26, 2025
Dell, and therefore is obligated to purchase any additional Microsoft licenses from Dell until May 31, 2026.
DISCUSSION/ANALYSIS:
City Council adopted the Information Technology Strategic Plan (ITSP) on January 28, 2025. Two of the ITSP’s Strategic goals include:
•Innovative and Adaptable Technology Investments to modernize our digital infrastructure and foster innovation across all areas of the organization.
•IT Governance, Cybersecurity, and Continuity to ensure the secure and efficient use of technology.
Initiative 5.2.A of the ITSP is the transition to Microsoft 365 Defender 5. This upgrade allows the City to take advantage of enhanced security and compliance features, advanced identity and access management, and cutting-edge data protection capabilities, ensuring our environment remains resilient in the face of evolving cyber threats. Migration from Cylance protection to Microsoft Defender for Endpoint will occur across the City’s server infrastructure and will provide comprehensive, integrated protection that aligns with the City’s evolving threat landscape and operational needs.
The City is also upgrading its phone system to a modern Unified Communications as a Service (UCaaS) solution, replacing the outdated Mitel system. This upgrade is part of Initiative 1.1.B in the ITSP, which focuses on implementing a Voice over Internet Protocol (VoIP) phone system. The new UCaaS solution will enhance communication by providing greater flexibility, scalability, and reliability. It will also improve the user experience, allowing for seamless collaboration across different locations and devices.
As part of Initiative 1.3.A of the ITSP, which focuses on Artificial Intelligence (AI) Policy and Implementation, the City introduced Microsoft 365 Copilot to staff. This powerful AI tool integrates directly into popular applications such as Word, Excel, Outlook, and Teams. Copilot helps teams streamline workflows, automate routine tasks, and boost creativity and efficiency in daily work. The cost of the additional licenses for Copilot and the above-described upgrades is shown in the table below.
Dell Technologies Agreement Summary
Description Projected Amount
M365 G3 Upgrade to G5 Licensing $97,680.00
Microsoft Defender for Servers $16,500.00
M365 Copilot Licenses $9,858.00
Remaining Balance ($27,000.00)
Total Increase for Agreement $97,038.00
Additional Microsoft Licenses
August 26, 2025
The upgrade and additional licenses were not part of the original cost estimate used to calculate the not-to-exceed amount in the Dell agreement. However, during the FY 2025-27 budget process, staff proactively planned for these additional upgrade licenses as part of the implementation plan for ITSP initiatives.
As a result, no additional budget appropriations are needed to cover the cost of the upgrade and licenses.
Approval of the increased not-to-exceed amount for the agreement and the expenditure authority will allow the City to pay for the additional costs in the third year and continue the implementation of three ITSP initiatives. Staff also recommends that City Council authorize the City Manager, or designee, to execute purchases from Dell within the established not-to-exceed limit.
LEVINE ACT (California Government Code § 84308):
This item is subject to the Levine Act (Attachment #1). City Councilmembers who have received a campaign contribution of more than $500 (aggregated) within the preceding 12 months from a party or their agent/representative, or a financially- interested participant involved in this proceeding may do either of the following: (1) disclose the contribution on the record and recuse themselves from this proceeding; or if applicable (2) return the portion of the contribution that exceeds $500 within 30 days from the time the official knew or should have known about the contribution, and participate in the proceeding.
All parties and their agents/representatives must disclose on the record of this proceeding any aggregated contribution of more than $500 made to any Councilmember within the preceding 12 months. Councilmembers are prohibited from accepting, soliciting, or directing a campaign contribution of more than $500 (aggregated) from a party, their agent/representative, or a financially-interested participant during a proceeding and for 12 months following the date a final decision is made. In addition, a party, their agent/representative, or a financially- interested participant is prohibited from contributing more than $500 (aggregated) to a Councilmember during a proceeding and for 12 months following the date a final decision is made.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
PREPARED BY: Jason Kwong, IT Analyst II
Attachment:
Attachment #1 – Levine Act Form
FIN:190-10H:\COMMON\Council\2025\Information Technology\082625 Microsoft Licensing Renewal staff report.docx