City Council Meeting - FINAL

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Meeting Date: 09/15/2020  
From: Wayne Anderson, IT Manager - Applications

Consideration and Approval of Contract:  Central Square software proprietary purchase contract for continued service and maintenance for a three (3) year term, with automatic 1-year renewals unless sooner terminated.
  1. Approve the purchase agreement with Superion/CentralSquare to renew and extend services and maintenance
  2. Authorize the City Manager to execute all necessary documents.
Executive Summary:
At the 8/18/2020 meeting Council requested that we take the proposed contract back to Central Square to request a reduction in year over year percent increase of costs.  The former contract was set to increase by 5% year over year.  We were successful in negotiating a reduced annual increase from 5% to 3% on the newly proposed contract.
In addition, Council requested more information on the large first year increase.  The main reason for this perceived percentage increase was the purchase of a new functionality “time and attendance interface”. (A software to automate Fire Department payroll data to flow into the payroll system). Below are the details of the first year 11% increase. 
The total Central Square application fees paid in FY 2019-20 were $87,597. Of this amount, $3,922.77 applies to portions of FY 2020-21 due to the timing and implementation of the time and attendance interface and Click2Gov3 Core.  In order to get all application fees on a fiscal year basis, the $3,922.77 will be applied against our new FY 2020-21 contract amount. The FY 2020-21 total Central Square contract is $70,572.67, less the previously payment for FY 2020-21 of $3,922.77, with a balance due of $66,649.90.  This being a 19% decrease. 
The initial reason for this contract change was to reduce pricing by removing the annual software maintenance responsibility for items that the City were no longer utilizing, hence the reduction in price.
Below is the original Staff summary note
Staff is requesting the approval of the Central Square software and hardware system contract.  This contract is to provide professional service for system maintenance.  Allowing functionality for both the City’s Payroll and Fleet areas, resulting in employee time entry, paychecks, direct deposits, etc. and Fleet providing such services as vehicle and asset inventory, repair workorders, and warranty. 

In 2018 the City modified the terms of service to have Central Square host its server in their “cloud” and carry more responsibility for supporting the software, hardware, disaster recovery, etc.

This current contract change has been adjusted in two areas.  First, discontinuation of the service maintenance agreement for four modules that are no longer utilized. This reduces the annual maintenance costs.  Second, clarified terms where the contract from 2018 had ambiguity. These items have been organized to align expectations between the City and Central Square.  Central Square has honored these items and executed these new changes effective July 1st, 2020.
Financial Impact:
The renegotiated contract modifies the 5% increase down to now a 3% increase. Below are the numbers to compare.
Year 1 (7/1/20-6/30/21) $66,649.90
Year 2 (7/1/21-6/30/22) $72,689.84     
Year 3 (7/1/22-6/30/23) $74,870.54
Year 1 (7/1/20-6/30/21) $66,649.90
Year 2 (7/1/21-6/30/22) $74,101.30
Year 3 (7/1/22-6/30/23) $77,806.36
Below is the original financial impact statement.
These contract changes produce a cost savings of almost $15,000 for FY 2020-2021.
Previous FY 2020-2021 Cost: $81,116.39
Proposed FY 20202-2021 Cost: $66,649.90

This contract is budgeted in FY2020-2021 in account number 001-01-014-0041-1-4231.

Prices increase by 11% for FY 2021-2022 (due to prorating of items) and thereafter 5% each year.  This equates to the following:
Year 1:  $66,649.90; Year 2:  $74,101.30; and Year 3:  $77,806.36.  Prices in renewal years thereafter would need to be mutually agreed upon. 
Policy Impact:
Connection to PBB Key Community Priorities/Objectives & Regional Plan:
Key Community Priority: High Performing Governance
This money-saving contract change will support the Council's Key Community Priority of High Performing Governance and further the associated Objectives of: 
  • Serving the public by providing high quality internal and external customer service
  • Enhancing the organization's fiscal stability and increasing efficiency and effectiveness
Has There Been Previous Council Decision on This:
This contract has been in front of Council many times over the 25 years (plus) the City has been using this system.
Options and Alternatives:

Option 1: Approve contract as submitted. Recommended by IT and Management Services divisions due to the exposure of risk of a failure of payroll, Fleet services and/or other business-critical support; or

Option 2: Provide direction on amending the contract; or

Option 3: Not approve the contract.

In 2018 the City contracted with Superion, LLC to upgrade critical payroll, human resources, and other software, as well as provide support for the software that performs the City's payroll and other business critical solutions.
Key Considerations:

Keeping this system under support is critical to reduce exposure to risk. Without continued service and maintenance of this system, there would be a very high risk of missing a payroll, which will affect ASRS, PSPRS, Voya, garnishments, federal and state taxes and more. The amount of work to recreate a missed payroll is difficult to quantify but is known to be enormous. The City may also face possible fees and legal liabilities.

Expanded Financial Considerations:
Community Benefits and Considerations:

The ability to pay staff in a timely manner is important to the community. Having a reliable software helps assure the City can meet its financial and work order commitments.

Expanded Options and Alternatives:
Former Central Square Contract
Proprietary Justification form
New 3% version of proposed contract


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