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SR-08-28-2012-3FCity of City Council Report Santa Monied City Council Meeting: August 28, 2012 Agenda Item: 3 To: Mayor and City Council From: Jory Wolf, Chief Information Officer Subject: Maintenance for Payroll and Financial Systems Software Recommended Action Staff recommends that City Council: 1. Authorize the City Manager to negotiate and execute a contract with Rimini Street Inc., a Nevada -based company, in the amount of $265,000 to provide maintenance and support for the City's payroll and financial systems for a period of three years. 2. Authorize the budget changes as outlined in the Financial Impacts and Budget Actions section of this report. Executive Summary The City operates J.D. Edwards One World (J.D. Edwards) and PeopleSoft Human Resources Management Systems (PeopleSoft) to manage all the City's payroll and financial operations. Historically, support and maintenance for these systems could only be provided by one vendor, Oracle USA. Under its support agreement with Oracle, the City would have to upgrade its J.D. Edwards system in 2013. Accordingly, the City began investigating vendors for this effort. In the process, staff determined that Rimini Street, Inc., a third party vendor, was qualified to provide enhanced support for the City's payroll and existing financial systems at a reduced cost to the City. A competitive bid process conducted by the City of Overland Park, Kansas in 2009 and 2010, selected Rimini Street as the company best - suited to provide support for its J.D. Edwards and PeopleSoft applications. The City of Overland Park found that Rimini Street had the capacity and skill to provide the required support services, at a substantial cost - savings. Pursuant to section 2.24.080(b) of the Santa Monica Municipal Code, Exception to competitive bidding, Staff recommends entering into an agreement with Rimini Street, Inc. to provide maintenance and support for the City's Oracle owned J.D. Edwards and PeopleSoft systems for a period of three years in an amount not to exceed $265,000. Background In November 1995, the City Council authorized the purchase of a new human resource and payroll system from PeopleSoft. Later, in March 1998, Council approved the purchase of a new financial management system from J.D. Edwards. Both systems are now owned and operated by Oracle USA. At the time, the City contracted with Oracle to provide maintenance and support for the systems because they were the only vendor that could provide support and systems maintenance. On August 2009, City Council authorized a sole source purchase order with Oracle extending support and system maintenance for PeopleSoft through June 30, 2013. In April 2011, City Council also authorized a four -year purchase order to extend support and system maintenance for J.D. Edwards through June 30, 2013. Under the current support terms with Oracle, the City is required to upgrade its J.D. Edwards system in 2013 or lose its maintenance support. Discussion In April 2012, a committee comprised of members from the Finance, Human Resources, and Information Systems departments researched the market for third -party vendors that could provide support services for J.D. Edwards and PeopleSoft. Staff found Rimini Street to be the only vendor that could provide the support and the system maintenance required to maintain both J.D. Edwards and PeopleSoft, including supporting all existing customizations and enhancements and providing a dedicated technical specialist. Vendor Selection The City of Overland Park, Kansas, issued an RFP in May of 2009 for J.D. Edwards support services and conducted a similar RFP process again in March 2010 for PeopleSoft HRMS support services. In both cases, he City of Overland Park selected Rimini Street as the company best - suited to provide support for its J.D. Edwards and PeopleSoft applications. Overland Park found -that Rimini Street had the capacity and skill to provide the required support services, and at a substantial cost - savings. Staff evaluated Rimini Street's proposal, which would significantly reduce the City's costs associated with support of its financial systems and eliminate the need for the City to upgrade its software. Staff also spoke with other government entities (City of Eugene, Eugene, OR; City of Boise, ID; and Spokane County, WA) that moved their support and maintenance from Oracle to Rimini Street. Pursuant to section 2.24.080(b) of the Santa Monica Municipal Code, Exception to competitive bidding„ staff recommends contracting with Rimini Street to provide maintenance and support for the City's J.D. Edwards and PeopleSoft systems for a period of three years in an amount not to exceed $265,000. Financial Impacts & Budget Actions The contract for maintenance and support for a three -year term is $265,000, including a 15% contingency. There are funds available in the FY 2012 -13 budget to cover the three -year term as follows: 01243.533580 $99,451 01222.533580 $71,186 C018009.589000 $94,363 TOTAL $265,000 Prepared by: Al Dave, Software Systems Division Manager Approved: 46Ys hr olf ief Information Officer 3 Forwarded to Council: Rod Gould City Manager Reference Contract No. 9633 (CCS).