TO:Andrew P. Powers, City Manager
FROM:Anthony Moore, Chief Information Officer
DATE:May 19, 2026
SUBJECT: Microsoft Licenses Renewal
RECOMMENDATION:
1. Approve a “piggyback” agreement with SHI International Corp. (SHI), Somerset, NJ, to utilize County of Riverside Agreement No. ITARC-00929, under Microsoft Enterprise Agreement No. 8084445, for renewal of the City’s Microsoft licensing and maintenance services, in the amount of $1,196,769 plus extra services of $119,677 for a total not-to-exceed amount of $1,316,446 for the period of June 1, 2026, through May 31, 2029.
2. Approve budget appropriation for FY 2025-26 in the amount of $150,000 from A/C #001-0000-311-1000 (General Fund Balance) to A/C #001-3410-612-6210 (General Fund, Computer Software Licenses) and budget appropriation in FY 2026-27 in the amount of $37,900 from A/C #001-0000-311-1000 (General Fund Balance) to A/C #001-3410-612-6210 (General Fund, Computer Software Licenses).
3. Authorize expenditure in an amount not to exceed $1,316,446 from A/C #001- 3410-612-6210 (General Fund, Computer Software Maintenance) to pay for licenses in FY 2025-26, FY 2026-27, and FY 2027-28.
4. Authorize the City Manager, or designee, to execute purchase documents with SHI within the established not-to-exceed limit, including adjustments to quantities and substitution of equivalent Microsoft products and services during the agreement term.
5. Find that this action is not a project as defined under the California Environmental Quality Act.
LEVINE ACT ITEM: Yes
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FINANCIAL IMPACT:
$150,000 increase to the Adopted FY 2025-26 and $37,900 increase to the Adopted FY 2026-27 General Fund Budgets. Additional budget appropriation necessary from General Fund Budgets for Microsoft licenses renewal. Further funds for the remaining agreement term will be requested during the upcoming biennial budget process.
BACKGROUND:
The Information Technology Department is responsible for the licensing of computer software and maintaining software maintenance contracts for the City’s major applications. The Microsoft applications that support City staff will be procured through the County of Riverside’s Microsoft Enterprise Agreement and related cooperative purchasing program, which is available to governmental agencies throughout the State of California. The County of Riverside conducted a competitive solicitation through Request for Quote No. ITARC-00532 for Microsoft Enterprise Agreement Licensed Support Providers under Master Enterprise Agreement No. 8084445. Due to Microsoft licensing requirements, Microsoft software and cloud services are acquired through authorized Licensing Solution Providers (LSPs) operating under the County of Riverside’s Master Enterprise Agreement. This cooperative agreement provides the City with access to Microsoft user licensing, software updates, and enterprise support services at standardized government prices.
The previously-approved three-year cycle of licensing fees is up for renewal and this piggyback agreement will allow maintenance of these products to continue through 2029.
DISCUSSION/ANALYSIS:
Over the term of the Enterprise Agreement, licensing quantities are reconciled through a process known as a “True Up,” which allows the City to adjust subscription counts based on operational needs. This process provides flexibility to account for staffing changes, new technology initiatives, and unplanned licensing requirements throughout the agreement term.
On January 28, 2025, City Council adopted the Information Technology Strategic Plan (ITSP), which established a long-term roadmap for modernizing the City’s technology environment and strengthening digital services. Key strategic goals within the ITSP include:
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IT Governance, Cybersecurity, and Continuity to ensure the secure and efficient use of technology.
Innovative and Adaptable Technology Investments to modernize our digital infrastructure and foster innovation across all areas of the organization.
Data Accessibility for Decision Making that enhances data transparency and provides staff and residents with tools needed to make informed decisions.
As part of the City’s adopted ITSP, the City successfully implemented Initiative
5.2.A, Microsoft 365 Defender 5, during FY 2025-26. This initiative strengthened the City’s cybersecurity posture by enhancing security and compliance capabilities, expanding identity and access management, and improving data protection tools to better safeguard the City’s digital environment against evolving cyber threats. These enhancements represent a strategic investment in strengthening the City’s overall security and resiliency framework.
The Microsoft ecosystem supports Initiative 2.1.A of the ITSP, Mobile Workforce, by improving the user experience and enabling seamless collaboration across multiple locations and devices while increasing flexibility, scalability, and operational resiliency.
As part of the City’s continued implementation of the ITSP, the organization transitioned from Microsoft G3 licensing to Microsoft G5 licensing during this fiscal year, which supported initiatives such as Microsoft 365 Defender 5 while also expanding access to additional enterprise tools and capabilities. The transition introduced tools such as Microsoft Power BI Pro. This supports Initiative 3.2.B of the ITSP by providing an introductory analytics and reporting platform to improve data accessibility, reporting, analytics, and access to information across the organization. These strategic investments contributed to a portion of the increase within this year’s licensing agreement while further positioning the City to modernize operations and support data-driven decision-making across departments.
Pursuant to Thousand Oaks Municipal Code Section 3-10.203(b), the City may piggyback onto or join an existing written purchase contract that was competitively solicited and awarded by another local, state, or federal government agency. The City proposes to piggyback on a contract competitively awarded by County of Riverside for the same or substantially similar goods and services (Attachment #1).
Piggybacking leverages the originating agency’s competitive process and pricing, avoids duplicative bidding, and typically results in more favorable pricing and terms than the City could achieve through a standalone solicitation.
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The cost of the additional licenses and the above-described upgrades is shown in the table below.
SHI Technologies Agreement Summary
Description Projected
Amount
Microsoft 365 G5 GCC Licensing $319,483.50
Microsoft 365 F3 GCC Licensing
$9,114.60
Microsoft 365 Copilot GCC Licensing
$3,639.60
Server & SQL Licensing $48,926.54
Azure Prepayment Services $14,560.20
Additional Productivity & Automation Licensing
(Visio, Planner, Power Automate, Teams Rooms) $3,198.23 Total Yearly Amount for Agreement $398,922.67
Three-Year Agreement Total: $1,196,768.01
10% Contingency: $119,677.99
Total Not-to-Exceed Amount $1,316,446.00
The updated pricing reflects changes in Microsoft licensing costs, revised product and cloud services offerings, and the City’s current operational needs over the upcoming three-year term. As a result, an additional appropriation is needed to fully fund the agreement through the proposed term.
Approval of the agreement, the requested budget appropriations, and the expenditure authority will allow the City to continue providing necessary Microsoft licenses for staff to work efficiently and provide for the implementation towards three ITSP initiatives. Staff also recommend that City Council authorize the City Manager, or designee, to execute purchases from SHI within the established not- to-exceed limit, including adjustments to quantities and substitution of equivalent Microsoft products and services, as needed to support operational and business requirements during the agreement term.
LEVINE ACT (California Government Code § 84308):
This item is subject to the Levine Act (Attachment #2). 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 Microsoft Licenses Renewal
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$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: Agustin Preciado, Deputy Chief Information Officer Attachment:
Attachment #1 – Piggyback Agreement
Attachment #2 – Levine Act Form
FIN:190-10H:\COMMON\Council\2026\Information Technology\05 19 26 Microsoft Licensing Renewal staff report.docx