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Home My WebLink AboutStaff Report 2404-2875CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, June 03, 2024 Council Chambers & Hybrid 5:30 PM Agenda Item 5.Approval of Contract Amendment No. 3 to Contract No. C15152204A with Questica to Increase Compensation by $168,635 (for a new not-to-exceed of $1,227,659) and Extend the Term for Two years for a total term of 12 years for the Budget Software System, Support and Maintenance. CEQA status – not a project. City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: IT Department Meeting Date: June 3, 2024 Report #:2404-2875 TITLE Approval of Contract Amendment No. 3 to Contract No. C15152204A with Questica to Increase Compensation by $168,635 (for a new not-to-exceed of $1,227,659) and Extend the Term for Two years for a total term of 12 years for the Budget Software System, Support and Maintenance. CEQA status – not a project. RECOMMENDATION Staff recommends that City Council approve and authorize the City Manager or their designee to execute Amendment No. 3 Contract C15152204A with Questica (Attachment A) for the provision of a budget software system, support and maintenance through June 30, 2026 in an amount not- to-exceed $168,635. This amendment results in a revised total contract not-to-exceed amount of $1,227,659 for a total contract term of 12 years. BACKGROUND The City’s use of Questica started in 2014, when the system was selected through a rigorous RFP process. On June 23, 2014, the City Council approved the contract with Questica, establishing the enterprise budgeting system (CMR 45161). Subsequently, on December 8, 2014, Council approved Amendment No. 1, increasing the total contract compensation to $659,448 for a five- year term (CMR 53502). Amendment No. 2, approved on September 23, 2019, extended the term by 5 years and increased total compensation to $1,059,024 over ten years (CMR 106183). The current request seeks a two-year extension to ensure continued access to the budgeting system. 1 June 23, 2014 Report: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2014/4516.pdf 2 December 8, 2014 Report: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2014/5350.pdf 3 September 23, 2019 Report: https://www.cityofpaloalto.org/files/assets/public/v/1/agendas-minutes- reports/reports/city-manager-reports-cmrs/year-archive/2019/id-10618.pdf?t=59683.91 ANALYSIS Questica serves as the City's primary tool for developing both operating and capital budgets, as well as for the Long-Range Financial Forecast (LRFF), labor cost modeling, and financial reporting and monitoring. This solution is integrated with the City's existing Enterprise Resource Planning (ERP) system and other essential software tools, including the City’s budget publishing software for producing the City's annual Operating, Capital Improvement, and Municipal Fee Schedule Books, and our Open Data Platform for budget document publishing. The contract amendment adds $168,635, bringing the new not-to-exceed total to $1,227,659, and extends the term by two years to May 31, 2026. The extension is necessary to facilitate the evaluation of budgeting system products including transition time should a new budgeting system be recommended. Given the impracticality of soliciting a new system within the current contract timeframe, an exemption to competitive solicitation was issued and fully executed by the City Manager per PAMC 2.30.360(b)(2). Staff recommends approval of this amendment to ensure continuity of the City’s budgeting processes while beginning next steps such as requirements gathering, RFP issuance, vendor selection, and system implementation. FISCAL/RESOURCE IMPACT Funding for this contract amendment in FY 2025 is within the proposed budgeted levels to be adopted by the City Council on June 17, 2024. No additional funding is requested. Funding for subsequent years of the contract will be subject to approval through the annual budget development process. The Information Technology Department is funded by an internal service fund. Approximately 44% of the department is General Fund funded with the remaining 56% funded by enterprise and special revenue funds. STAKEHOLDER ENGAGEMENT The services were coordinated with internal stakeholders and the service provider. ENVIRONMENTAL REVIEW Approval of the contract amendment is not a project under CEQA per CEQA Guidelines section 15061(b)(3). ATTACHMENTS Attachment A: Amendment No. 3 to Contract No. C15152204A between the City of Palo Alto and Questica APPROVED BY: Darren Numoto, Chief Information Officer Vers.: Aug. 5, 2019 Page 1 of 5 AMENDMENT NO. 3 TO CONTRACT NO. C15152204 BETWEEN THE CITY OF PALO ALTO AND QUESTICA INC. This Amendment No. 3 (this “Amendment”) to Contract No. C15152204 (the “Contract” as defined below) is entered into as of June 3, 2024, by and between the CITY OF PALO ALTO, a California chartered municipal corporation (“CITY”), and QUESTICA INC., an Ontario Corporation, located at 980 Fraser Drive, Suite 105, Burlington, Ontario, Canada (“CONSULTANT”). CITY and CONSULTANT are referred to collectively as the “Parties” in this Amendment. R E C I T A L S A. The Contract (as defined below) was entered into by and between the Parties hereto for the provision of a budget software system, support, and maintenance, as detailed therein. B. The Parties now wish to amend the Contract in order to (1) extend the term of the Contract by an additional two years, through June 30, 2026, (2) increase the not to exceed total by an additional One Hundred Sixty-Eight Thousand Six Hundred Thirty-Four Dollars and Ninety Cents ($168,634.90) to a new not to exceed amount of One Million Two Hundred Twenty-Seven Thousand Six Hundred Fifty-Eight Dollars and Three Cents ($1,227,658.03) , as detailed herein. NOW, THEREFORE, in consideration of the covenants, terms, conditions, and provisions of this Amendment, the Parties agree: SECTION 1. Definitions. The following definitions shall apply to this Amendment: a. Contract. The term “Contract” shall mean Contract No. C15152204 between CONSULTANT and CITY, dated July 1, 2014, as amended by: Amendment No.1, dated December 8, 2014 Amendment No.2, dated September 16, 2019 b. Other Terms. Capitalized terms used and not defined in this Amendment shall have the meanings assigned to such terms in the Contract. SECTION 2. Section 2 entitled “TERM” of the Contract is hereby amended to read as follows: “The term of this Agreement shall be from the date of its full execution through June 30, 2026, unless terminated earlier pursuant to Section 19 of this Agreement.” DocuSign Envelope ID: D9C19E34-479E-4AE7-9444-F8D33221402E Vers.: Aug. 5, 2019 Page 2 of 5 SECTION 3. The following exhibit(s) to the Contract is/are hereby amended or added, as indicated below, to read as set forth in the attachment(s) to this Amendment, which is/are hereby incorporated in full into this Amendment and into the Contract by this reference: a. Exhibit “C” entitled “COMPENSATION”, AMENDED, REPLACES PREVIOUS. SECTION 4. Legal Effect. Except as modified by this Amendment, all other provisions of the Contract, including any exhibits thereto, shall remain in full force and effect. SECTION 5. Incorporation of Recitals. The recitals set forth above are terms of this Amendment and are fully incorporated herein by this reference. (SIGNATURE BLOCK FOLLOWS ON THE NEXT PAGE.) DocuSign Envelope ID: D9C19E34-479E-4AE7-9444-F8D33221402E Vers.: Aug. 5, 2019 Page 3 of 5 SIGNATURES OF THE PARTIES IN WITNESS WHEREOF, the Parties have by their duly authorized representatives executed this Amendment effective as of the date first above written. CITY OF PALO ALTO City Manager APPROVED AS TO FORM: City Attorney or designee QUESTICA INC. Officer 1 By: Name: Title: Officer 2 By: Name: Title: Attachments: Exhibit “C” entitled “COMPENSATION”, AMENDED, REPLACES PREVIOUS. DocuSign Envelope ID: D9C19E34-479E-4AE7-9444-F8D33221402E SVP Sales Jas Saraw Nick Thermenos CRO Vers.: Aug. 5, 2019 Page 4 of 5 EXHIBIT C COMPENSATION, AMENDMENT NO. 3 (AMENDED, REPLACES PREVIOUS) Scope Description of Services Cost (NTE) Payment Schedule Implementation (cost of all professional services required for installation, implementation, data conversion, application development, training, and the first year’s warranty, maintenance, and support as well as any applicable license costs.) Licenses: Site License (ALL YEARS) $160,000.00 $43,000 at Contract Signing $43,000 at start of training $15,000 execution of 1st contract amdt $59,000 System Go-Live of Budget Sys. Implementation Services: planning & analysis, installation, data load & verify, accounting integration, training, project management per Exhibit A. $129,600.00 $25,920 each (x 5) as outlined below** Maintenance* and Hosting (Year 1) $10,080.00 Contract Signing (July 1, 2014) SUBTOTAL $299,680.00 -- Annual maintenance* (Year 2) Annual Maintenance ($57,500) and Hosting ($10,080) $67,580.00 One year after contract signing Annual maintenance* (Year 3) Annual Maintenance ($57,500) and Hosting ($10,080) $67,580.00 Two years after contract signing Annual maintenance* (Year 4) Annual Maintenance ($57,500) and Hosting ($10,080) $67,580.00 Three years after contract signing Annual maintenance* (Year 5) Annual Maintenance ($57,500) and Hosting ($10,080) $67,580.00 Four years after contract signing Custom Report Development 250 hours at $170 per hour $42,500.00 Upon acceptance of the report Performance Management Module Implementation and Training 100 hours at $170 per hour $17,000.00 As training is delivered SUBTOTAL - LICENSES (ALL YEARS) & SERVICES (YEARS 1- 5) $629,500.00 -- 10% Contingency (“Additional Services” per Agrt § 4) $29,968.00 30 days after an approved invoice SUBTOTAL NOT-TO-EXCEED COMPENSATION FOR LICENSES (ALL YEARS) & SERVICES (YEARS 1-5) $659,468.00 -- Annual maintenance* (Year 6) Annual Maintenance & Hosting (Year 5 amount x 1.03) $69,607.40 Five years after contract signing DocuSign Envelope ID: D9C19E34-479E-4AE7-9444-F8D33221402E Vers.: Aug. 5, 2019 Page 5 of 5 Annual maintenance* (Year 7) Annual Maintenance & Hosting (Year 6 amount x 1.03) $71,695.62 Six years after contract signing Annual maintenance* (Year 8) Annual Maintenance & Hosting (Year 7 amount x 1.03) $73,846.49 Seven years after contract signing Annual maintenance* (Year 9) Annual Maintenance & Hosting (Year 8 amount x 1.03) $76,061.88 Eight years after contract signing Annual maintenance* (Year 10) Annual Maintenance & Hosting (Year 9 amount x 1.03) $78,343.74 Nine years after contract signing On-Call Professional Services (Years 6-10) 150 hours at $200 per hour (via Task Order per Agrt § 1) $30,000.00 Upon approved Task Order & invoice SUBTOTAL NOT-TO-EXCEED COMPENSATION FOR YEARS 6-10 $399,555.13 -- Annual maintenance* (Year 11) Annual Maintenance & Hosting $82,260.93 07/01/2024 – 06/30/2025 Annual maintenance* (Year 12) Annual Maintenance & Hosting $86,373.97 07/01/2025 – 06/30/2026 TOTAL NOT-TO-EXCEED COMPENSATION OF THE AGREEMENT (ALL YEARS) $1,227,658.03 -- DocuSign Envelope ID: D9C19E34-479E-4AE7-9444-F8D33221402E