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SR-05-12-2015-3C- City nil Report sent nan�i��• City Council Regular Meeting: May 12, 2015 Agenda Item: To: Mayor and City Council From: Jory Wolf, Chief Information Officer Subject: Third Modification of Agreement for Software Maintenance and Support of the City's Payroll and Financial System Recommended Action Staff recommends that City Council authorize the City Manager to negotiate and execute a third modification to Master Services Agreement #9635 (CCS), in the amount of $148,670 with Rimini Street Inc., a Nevada -based company for maintenance and support services of the City's payroll and financial systems. This will result in a five -year amended agreement with a new total amount not to exceed $413,670, with future year funding contingent on Council budget approval. Executive Summary The City operates J.D. Edwards One World (J.D. Edwards) and PeopleSoft Human Resources Management Systems (PeopleSoft) to manage the entire City's payroll and financial operations. Rimini Street, Inc. currently provides software support and maintenance for both systems. The current agreement with Rimini Street expires on August 31, 2015. A modification to the agreement is required to extend the term for an additional two years to continue software support and maintenance, including timely implementation of regulatory tax updates and employee benefits changes. This third modification would increase the contract by $148,670 resulting in a five -year amended agreement in the amount not to exceed $413,670 for services through September 30, 2017. Background In November 1995 (attachment A), Council authorized the purchase of a new human resource and payroll system from PeopleSoft. Later, in March 1998 (attachment B), 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. In August 2009 (attachment C), Council authorized a sole source 1 of 4 purchase order with Oracle extending support and system maintenance for PeopleSoft through June 30, 2013. In April 2011 (attachment D), Council also authorized a four- year purchase order to extend support and system maintenance for J.D. Edwards through June 30, 2013. Under the support terms with Oracle, the City was required to upgrade its J.D. Edwards system after the term expired in 2013 or lose its maintenance support. The City decided not to upgrade J.D. Edwards because this required licensing a new technology foundation and user license agreement which was very expensive. Therefore, staff decided to research the market for third -party vendors that could provide support services for J.D. Edwards and PeopleSoft. Rimini Street was the only vendor that could provide the support and the system maintenance required to maintain both systems, including supporting all existing customizations and enhancements and providing a dedicated technical specialist. In August 2012 (attachment E), Council authorized a contract with Rimini Street Inc. in an amount not to exceed $265,000, including 15% contingency, for a period of three years, through August 31, 2015. Rimini Street, Inc. has been providing ongoing support during this period. Discussion The City's Software Support and Maintenance agreement #9635 (CCS) with Rimini Street, Inc. will expire on August 31, 2015. The City is in the process of procuring a new financial and payroll system which is expected to take two years for implementation. The City will need to maintain support on the existing systems until the new system is fully functional. An extension to the agreement with Rimini Street, Inc. is needed to continue this support. Rimini Street, Inc. has continuously provided excellent support with no downtime and has successfully completed required regulatory tax updates and benefit changes, such as the Affordable Care Act. Vendor /Consultant 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, the City of Overland Park selected 2 of 4 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, 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, where a competitive process has already been utilized by another City, staff recommended contracting with Rimini Street to provide maintenance and support for the City's J.D. Edwards and PeopleSoft systems. 3 of 4 Financial Impacts and Budget Actions The modification to be awarded to Rimini Street, Inc. for a two -year term is $148,670, including a 5% contingency, for an amended contract total not to exceed $413,670. Funds are included in the FY 2015 -17 Proposed Biennial Budget in the Finance Department and the FY 2014 -16 CIP budget. The modification will be charged as follows: FY 2015 -16 $37,373 01222.533580 FY 2015 -16 $72,055 C018009.589000 FY 2016 -17 $39,242 01222.533580 $148,670 Future funding is contingent upon Council approval. Prepared By: Sreekanth Maddali, Lead Systems Analyst — ERP Approved Jory Wolf, Chief Information Off G628 /2015 Attachments: A. November 28, 1995 Staff Report B. March 24, 1998 Staff Report C. August 11, 2009 Staff Report D. April 26, 2011 Staff Report E. August 28, 2012 Staff Report Forwarded to Council � � t Elaine M Polachek, Interim City MfiWO005 .. it Reference: Modified Agreement No. 9635 (CCS)