REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 3 to Agreement with Questica, Inc. for the Budget and Financial Planning System
Report
COUNCIL PILLAR
Enhance Community Engagement and Transparency
BACKGROUND
In August 2014, the City Council authorized the City Manager to execute a master agreement with Questica, Inc. (Questica) for new budgeting software with a five-year term through June 30, 2019, and a not to exceed cost of $521,000. Questica was originally selected through a competitive process and currently provides the City with a hosted software service that allows for the development and monitoring of the City's budget. The agreement allows for a set number of software licenses for the capital, operating, and personnel modules.
In November 2016, the City executed Amendment No. 1 to the Agreement to migrate the budget software from on-premise to cloud-based hosting. In June 2019, the City Council approved Amendment No. 2 to increase the maximum compensation by $356,038.12 (from $521,000 to $877,038.12), add an open data portal that allows the sharing of budget information on the City’s website (Open Book), and extend the term to August 25, 2024.
DISCUSSION
The Questica budgeting software has been a crucial software tool for the Budget Division of the Finance Department. It is used to prepare the biennial operating and capital budgets for the City as well as the General Fund Ten-Year Forecast. The OpenBook data portal also provides the public with access to budget information on the City’s website.
Staff is seeking City Council authorization to execute Amendment No. 3 to the agreement to extend the term through August 25, 2029. With this amendment, the City will receive additional licenses and an upgraded service to support the system, including the following:
1. Unlimited software licenses (currently, the City has 65 Operating Budget licenses, 45 Capital Budget licenses, and 40 Personnel module licenses). This will provide more flexibility on the use of the system and ensure the system is available to all potential users.
2. Care + Service Plan - this plan incorporates the following services:
• Customizations - Upgrades: updates budget system customizations implemented for the City of Santa Clara when regular system upgrades are performed (previously, the City paid to update its customizations with a system upgrade);
• Customizations - Removal: removes existing customizations that may no longer be necessary with the latest version of the software; this would include cleaning up the production system (e.g., moving data, updating reports, and configuring a new feature);
• Block of Service Hours: provides 20 hours of custom programming services annually that can be used for any service (e.g., custom reporting, consulting, customizations, and training);
• Annual Refresher Training: provides training to City staff on each major module, delivered as a Q&A or tutorial; and
• Read-only SQL Access: allows the IT team to gain direct-to-database access to a private read-only copy of the production database that is valuable in developing budget reports and providing a back-up.
3. Salary Integration/Synchronization - complete the integration of actual personnel data (employees, salary step, salary grades, benefits, payroll by position) into Questica by August 31, 2025. This will improve the efficiency of updating the personnel data each year and provide a management tool.
The current agreement with Questica has a maximum compensation of $877,038.12. The cost for maintenance and support, continuation of the open data portal (OpenBook), and the Care+ package totals $448,038.40 over the five-year period from August 26, 2024 to August 25, 2029. The amendment also includes a maximum amount of $100,000 for as-needed services that may be necessary during the term of the agreement, for a total amendment amount of $548,038,40. Under Amendment No. 3, the revised maximum compensation is $1,425,076.52.
In addition, staff is requesting authorization to further extend the term of the agreement for up to five additional years through August 25, 2034. With the integration of personnel data, it is expected that the system will be used beyond 2029. It would take an extensive amount of staff time and potential cost to switch to a different budget system that would require customization to align with the City’s accounting system and budget structure.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378 (b)(5) of Title 14 of the California Code of Regulations in that it is an amendment to an existing software license agreement; therefore, the proposed actions are administrative activities that will not result in direct or indirect physical changes in the environment.
FISCAL IMPACT
Amendment No. 3 increases the maximum compensation by $548,038.40 (from $877,038.12 to $1,425,076.52 and extends the term of the agreement by five years through August 25, 2029. This agreement is funded by the General Fund and is budgeted in the Finance Department’s Fiscal Year 2024/25 Operating Budget. The City’s funding of this Agreement is subject to annual appropriations and will be considered as part of future years’ budget development process beyond fiscal year 2024/25.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Authorize the City Manager to execute Amendment No. 3 to the Agreement with Questica, Inc. to extend the term of the agreement through August 25, 2029, and increase the maximum compensation by $548,038.40 for a revised maximum compensation of $1,425,076.52, subject to the appropriation of funds and in a final form approved by the City Attorney; and
2. Authorize the City Manager or designee to take any actions as necessary to implement and administer the Agreement with Questica, Inc. and negotiate and execute amendments to (a) add or delete services consistent with the scope of services, (b) renew the term of the agreement for up to five years through August 25, 2034, and (c) increase the maximum compensation for an additional $600,000 for a total aggregate maximum compensation not to exceed $2,025,076.52 for the extended term, subject to the appropriation of funds and the review and approval as to form by the City Attorney.
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Agreement with Questica, Inc.
2. Amendment No. 1 to the Agreement with Questica, Inc.
3. Amendment No. 2 to the Agreement with Questica, Inc.
4. Proposed Amendment No. 3 to the Agreement with Questica, Inc.