TO:
Honorable Mayor and Members of the City Council
THROUGH:
Talyn Mirzakhanian, City Manager
FROM:
Miguel Guardado, Information Technology Director
Libby Bretthauer, Finance Director
Michael Codron, Interim Community Development Director
Tatyana Roujenova-Peltekova, Senior Management Analyst
SUBJECT:Title
Consideration of a Resolution Approving Amendment No. 8 for a One-Year Term Extension of the Enterprise Resource Planning and Tyler Systems Management Agreements with Tyler Technologies for $235,796; and Consideration of a Resolution Approving Amendment No. 3 for a One-Year Term Extension of the Enterprise Permitting and Licensing Agreement for $66,700 (Budgeted) (Information Technology Director Guardado).
ADOPT RESOLUTIONS NOS. 25-0090 AND 25-0091
Body
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RECOMMENDATION:
Staff recommends that the City Council:
a) Adopt Resolution No. 25-0090 approving Amendment No. 8 for a one-year term extension of the Enterprise Resource Planning (ERP) and Tyler Systems Management (TSM) agreements with Tyler Technologies for $235,796; and
b) Adopt Resolution No. 25-0091 approving Amendment No. 3 for a one-year term extension of the Enterprise Permitting and Licensing (EPL) agreement with Tyler Technologies for $66,700.
FISCAL IMPLICATIONS:
Sufficient funds are budgeted in Fiscal Year 2025-2026 in the Information Technology and Community Development Departments for Amendment No. 8 and Amendment No. 3, respectively.
BACKGROUND:
The five-year agreements for the purchase of the Enterprise Resource Planning and Enterprise Permitting and Licensing systems were approved by the City Council on July 17, 2018. The new ERP application was replacing the legacy ERP system and included modules related to financials, cashiering, human resources, and payroll. The EPL replaced the obsolete permitting system and supported activities related to planning, permitting, inspection, and code enforcement.
Per the City Council’s request, staff provided regular updates on the implementation status of both enterprise systems. On July 5, 2023, the City Council received a status update on both systems and approved two amendments extending the term by two years for the ERP maintenance, EPL maintenance, and TSM services agreements. With Amendment No. 7 (ERP and TSM) and Amendment No. 2 (EPL) expiring on July 23, 2025, new amendments extending the term of the existing agreements are needed.
DISCUSSION:
After the acquisition of the two systems, staff worked diligently on implementing the applications, streamlining business processes, and expanding the online stack of City services. After a significant staff effort, the first phase - permitting - of the Enterprise Permitting and Licensing platform was launched in January 2020. Six months later, the next phase, the electronic plan review and online payment system, went live. The new EPL platform is entirely digital and provides electronic permitting submissions, plan reviews, and inspections. Post EPL system implementation, City staff continue to explore further process automations and efficiencies.
City staff also worked on setting up the acquired Enterprise Resource Planning system and commenced using the financials module in January 2021. By March 2023, the inventory, payroll, timekeeping, and utility billing modules went live, allowing for digitized workflows, eliminating manual processes, and enhancing productivity. Earlier this year, the Open Finance online portal was officially launched, providing the public with access to the City's financial data, including various analysis tools to understand how public funds are allocated. At present, the only remaining ERP module to implement is Enterprise Asset Management, which has been placed on hold due to limited staff resources.
The original ERP purchase also included the business license module, which was to be utilized for the City's business licensing and animal licensing operations. However, the implementation of the business licensing (BL) was not completed due to resource unavailability (the provider lost the project manager and later the project implementation consultant before the implementation began) or project constraints related to the specific implementation schedule start time. These BL drawbacks led to implementation realignment and the completion of the other remaining modules in the meantime.
In the interim, more business licensing and animal licensing systems became available on the market, so staff decided to revisit the solutions, ensuring the best customer experience and optimized operational efficiency and productivity. After comparing several leading platforms, including the BL module offered by Tyler’s ERP system, the staff selected Hindeliter de Llamas & Associates' (HDL) business licensing software as the most suitable solution for the City’s business licensing operations. On November 19, 2024, the City Council approved a three-year agreement with HDL for business licensing and related services. As for animal licensing, staff recently selected DocuPet and is in the process of implementing the new online system.
During the November 19, 2024, meeting, the City Council requested staff to explore credit prospects with Tyler resulting from the non-implemented business licensing module. The following represents all the related business licensing module financial data:
• Business Licensing Module License Cost - $0 - Waived by Tyler since it was part of the legacy ERP system ($20,000 value)
• Business Licensing Yearly Maintenance
o After the purchase of the new ERP, the BL maintenance was billed through the new ERP system. Since the City was implementing a new ERP system, the legacy ERP system was to be supported and maintained as part of the new ERP software maintenance. Thus, the City stopped paying maintenance for the legacy ERP, including business licensing, even though the City continued to utilize the BL module in the legacy system.
o The breakdown below compares the BL maintenance costs between the legacy ERP software (City would have had to pay if there had been no new ERP system) and the new ERP system (City actually paid after the acquisition of the new ERP system). The City paid about $16,433 less for business licensing during the listed periods since the module maintenance is about 40% less expensive when provided through the new ERP system.
Fiscal Year Legacy ERP (not paid by the City) New ERP (paid by the City)
FY2019-2020 $6,222.36 $3,780.00
FY2020-2021 $6,533.48 $3,969.00
FY2021-2022 $6,860.16 $4,167.45
FY2022-2023 $7,203.16 $4,375.82
FY2023-2024 $7,563.32 $4,682.13
FY2024-2025 $7,941.49 $4,916.24
Total 2019 - Present: $42,323.97 $25,890.64
Difference to City Advantage: $16,433.33
• Business Licensing Spent Implementation Time
o Implementation consultant performed services - two and a half days or $2,000, which are to be credited to the City.
In summary, the City received BL licensing for no cost and paid approximately 40% less for the module’s maintenance as part of the new ERP system. The City will receive $2,000 credit for the two and a half days used by Tyler’s business licensing implementation consultant.
Agreements Term Extensions
The proposed Amendment No. 8 extends the term for the Enterprise Resource Planning and Tyler System Management services agreements by one year for $235,796. The extension includes maintenance for the on-premises financials, human capital management, cashiering, and content manager; disaster recovery for the new and legacy ERP systems; and the system management services required for the server, database, and administration of the ERP, cashiering, content manager, and all other ancillary products. The amendment also includes five days of PACE services for staff training and system evaluation.
Amendment No. 3 offers a one-year term extension for the Enterprise Permitting and Licensing agreement for $66,700. The services include the maintenance and disaster recovery of the on-premises EPL system.
The extended ERP and EPL services secure the latest software releases and updates to ensure the applications remain functional, secure, and relevant over time. The software maintenance not only corrects issues related to software bugs, application performance, and security vulnerabilities but also provides new features and functionalities, adapting to the user’s needs. Additionally, the amendments include disaster recovery services for ERP (new and legacy platforms) and EPL systems to ensure emergency response and business continuity in the event of a catastrophe.
In conclusion, staff recommends that the City Council: a) adopt Resolution No. 25-0090 approving Amendment No. 8 for a one-year term extension of the Enterprise Resource Planning (ERP) and Tyler Systems Management (TSM) agreements with Tyler Technologies for $235,796; and b) adopt Resolution No. 25-0091 approving Amendment No. 3 for a one-year term extension of the Enterprise Permitting and Licensing (EPL) agreement with Tyler Technologies for $66,700. If approved, the amendments will extend the term of the ERP, TSM, and EPL agreements from July 24, 2025 through July 23, 2026.
PUBLIC OUTREACH:
After analysis, staff determined that public outreach was not required for this issue.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that there is no possibility that the activity may have a significant effect on the environment; therefore, pursuant to Section 15061(b)(3) of the State CEQA Guidelines the activity is not subject to CEQA; thus no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has approved the agreement as to form.
ATTACHMENTS:
1. Resolution No. 25-0090
2. Amendment No. 8 - Tyler Technologies
3. Resolution No. 25-0091
4. Amendment No. 3 - Tyler Technologies