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Home My WebLink About04/21/1998, C4 - FINANCIAL MANAGEMENT SYSTEM Council j acEnba Report '="mb" CITY OF SAN LUIS OBISPO FROM: Bill Statler,Director of Finance Prepared By: Carolyn Dominguez,Accounting Manager ek) SUBJECT: FINANCIAL MANAGEMENT SYSTEM CAO RECOMMENDATION ■ Approve contract with Pentamation in the amount of $367,800 for a new financial management system, and authorize the Mayor to execute the agreement. ■ Authorize the Director of Finance to approve necessary contract amendments, as needed, up to the approved project budget. ■ Amend project cost allocation between funds(no net changes in the project cost). DISCUSSION Background Information Technology Master Plan. The Council adopted the City's information technology master plan in April of 1995. It sets forth seven "strategic initiatives" in the following priority order. ■ Desktop operating system and hardware upgrade(completed in 1996) ■ Public safety(completed in March 1998 - final system testing and acceptance underway) ■ Financial management system ■ Geographic information system(underway) ■ Radio/telecommunications(underway) ■ Records management(detailed requirements analysis underway) ■ Public access/electronic village(underway) As noted above, implementing a new financial management system is the plan's third highest priority, behind desktop and public safety system upgrades. We have completed both of these higher priority projects. 1995-97 Financial Plan. To begin implementing the master plan, the 1995-97 Financial Plan included $283,500 for a new financial management system. In November 1995, the City contracted with The Warner Group for assistance in developing a Request for Proposal (RFP) and evaluating proposals. The RFP was issued in March 1996 and eight firms responded. The proposals ranged in cost from $420,000 to $1.6 million. After extensive analysis of the written proposals by a review team composed of representatives from Finance, Personnel, Administration, GIS and department fiscal officers, the potential vendors were narrowed to two: Pentamation and Creative Computer Solutions. After finther analysis, background checks, and n/-/ Council Agenda Report—Financial Management System Contract Page 2 on-site demonstrations, Pentamation was selected as the firm offering the best overall value to the city. In August of 1996 the Council deferred the financial management project and transferred the funds to the public safety system for completion of that higher priority project because estimated costs for both the public safety and financial management systems were significantly over the budget for these two projects. 1997-99 Financial Plan. Funding for the financial management system was included in the 1997-99 Financial Plan in the amount of $460,000. In July 1997, staff began intensive site surveys and reference checks on the finalist vendor - Pentamation. Based on the results of extensive backgrounding and discussions with Pentamation, we initiated detailed contract negotiations with them in January 1998. Negotiations and Implementation Process Due to the complexity of the City's financial management system, a thorough evaluation of the Pentamation system and related contract has been in process for the past several months. The proposed agreement includes hardware, software, installation, training, warranties for year 2000 compliance and maintenance. The following summarizes implementation"milestones"for the financial management system: Contract execution May 1, 1998 Hardware installation July-August, 1998 Payroll, Accounts Payable, and General Ledger Applications: Software installation August-November 1998 Data entry conversion August-September 1998 Training finance staff August-October 1998 Sip November-1998 Training other City staff January 1999 Revenue Applications: Software installation January-May1999 Data entry conversion February-June 1999 Training finance staff March-June 1999 Sip July 1999 FISCAL IMPACT Project Implementation The 1997-99 Financial Plan includes funding In the amount of $460,000 for the financial management system. Of this amount, $15,000 has already been committed for assistance from The Warner Croup for contract negotiations, contract preparation, and project planning assistance, leaving $445,000 for project implementation As reflected by the following summary, we have sufficient funding to implement this project, including a 10%contingency: c-A z Council Agenda Report—Financial Management System Contract Page 3 Project Costs Costs Hardware 31,500 System Software 74,800 Application Software 1272700 Installation 48,200 Data conversion 48,000 Training 37,600 Total Pentamation Costs 367,800 Project management assistance -The Warner Group 15,000 Staff implementation costs(temporary staffing, overtime) 17,700 Contingencies @ 10% 442500 Total $4459000 The following summarizes application software costs: Application Sofivi C Z. Cyst %.of Total. General ledger/accounts payable $22,500 18% Human resources/payroll 30,200 24% Budgeting 6,000 5% Utility billing 41,300 32% Business tax 14,200 11% Accounts receivable 82000 6% Cash receipts 5,500 4% Total $127,700 100% The 1997-99 Financial Plan included proposed funding sources based on an allocation of preliminary estimates of hardware and software costs and their relationship to the enterprise funds. Based on a detailed analysis of system benefits to the various enterprise funds, the following summarizes revised project cost allocations: (; Council Agenda Report—Financial Management System Contract Page 4 Fnnding7Sources Original Budget Revisions Revised Total General Fund* 346,400 (104,400) 242,000 Water Fund 59,800 527400 112,200 Sewer Fund 46,000 44,400 90,400 Parldng Fund 4,600 4,4001 9,000 Transit Fund 3,200 3,2001 6,400 Total $4609000 0 $4609000 * Includes a$3,800 allocation for the golf fund. Software Maintenance and Support Once the system is fully installed we will pay $32,000 annually for operating system and application maintenance and support. However, payments will be phased as applications are brought on-line; and for the first year, application software maintenance and support costs are discounted by 50%. No software maintenance costs will be incurred in 1997-98, and full maintenance costs will not be incurred until 1999-00. ATTACHMENT Agreement with Pentamation for a new financial management system ON FILE IN COUNCIL OFFICE Detailed Pentamation contract and exhibits C- y-y AGREEMENT THIS AGREEMENT is made and entered into in the City of San Luis Obispo on this day of by and between the CITY OF SAN LUIS OBISPO, a municipal corporation, hereinafter referred to as City, and PENTAMATION ENTERPRISES,INC.,hereinafter referred to as Contractor. WITNESSETH: WHEREAS, in March 1996, City requested proposals for a financial information system per Specification No.9687. WHEREAS, pursuant to said request, Contractor submitted a proposal which was accepted by City for said products and services. NOW THEREFORE, in consideration of their mutual promises, obligations, and covenants hereinafter contained,the parties hereto agree as follows: 1. TERM. The term of this Agreement shall be from the date of this Agreement is made and entered,as fust written above,until acceptance and completion of said products and services. 2. ' INCORPORATION BY REFERENCE. City Specification No. 9687,the Contractor's proposal dated April 11, 1996, and the financial information system contract and all exhibits dated April 1998,are hereby incorporated in and made a part of this Agreement 3. CITY'S OBLIGATIONS. For providing a financial information system as specified in this Agreement, City will pay and Contractor shall receive compensation in a total sum not to exceed $367,800.00. 4. CONTRACTOR'S OBLIGATIONS. For and in consideration of the payments and agreements hereinbefore mentioned to be made and performed by City, Contractor agrees with City to do everything required by this Agreement and the said Contract incorporated into this Agreement 5. AMENDMENTS. Any amendment, modification, or variation from the terms of this Agreement shall be in writing and shall be effective only upon approval by the Director of Finance of the City. 6. COMPLETE AGREEMENT. This written Agreement, including all writings specifically incorporated herein by reference, shall constitute the complete agreement between the parties hereto. No oral agreement, understanding, or representation not reduced to writing and specifically incorporated herein shall be of any force or effect, nor shall any such oral agreement, understanding, or representation be binding upon the parties hereto. 7. NOTICE. All written notices to the parties hereto shall be sent by United States mail, postage prepaid by registered or certified mail addressed as follows: City City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo,CA 93401 Contractor Pentamation Enterprises,Inc. 225 Marketplace Bethlehem,PA 18018 8. AUTHORITY TO EXECUTE AGREEMENT. Both City and Contractor do covenant that each individual executing this agreement on behalf of each party is a person duly authorized and empowered to execute Agreements for such party. IN WITNESS WHEREOF,the parties hereto have caused this instrument to be executed the day and year fust above written. ATTEST: CITY OF SAN LUIS OBISPO, A Municipal Corporation By: City Clerk Mayor APPROVED AS TO FORM: CONTRACTOR By: tY o Y C-�-6