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Home My WebLink About#08 - Enterprise Resource Planning System STAFF REPORT DATE: October 3, 2017 REGULAR MOTION TO: City Council FROM: Brian A. Swanson – Finance Director AGENDA ITEM: Enterprise Resource Planning System (ERP) Update and Next Steps REVIEWED BY: Kristina Handt – City Administrator BACKGROUND: At the July 13 Finance Committee meeting, discussion occurred regarding budgeted expenditures for a new software package for finance and other city related business. Based upon this, staff prepared a Request for Proposals (RFP) for an Enterprise Resource Planning (ERP) System, which the Finance Committee discussed on July 27, 2017, and recommended approval for the City Council to consider. The City Council considered and approved the RFP on August 1, 2017 at the Regular City Council meeting. The RFP went out on August 2, 2017, with a due date of September 1, 2017. Staff reviewed the proposals, contacted its current provider, Accela for a proposal, and at the September 21, 2017 Finance Committee meeting asked the Committee to consider a resolution authorizing staff to conduct a demonstration with Accela. The Committee authorized this demonstration, which took place on September 25, 2017, and as such, staff is recommending moving forward with Accela for contract negotiation, and upon agreement, implementation. QUESTIONS BEFORE THE CITY COUNCIL: 1) Does the City Council have any questions regarding the process and staff recommendation? 2) Is the City Council comfortable rejecting the other four proposals and moving ahead with Accela for contract negotiation, and upon agreement, implementation? DISCUSSION: The City received four proposals by the September 1, 2017 due date. These firms are associated with the software package, listed in parentheses, where applicable: 1) BS&A Software 2) Civic Systems, LLC – (Caselle) 3) Professional Computer Systems, Co. – (Utilit-e) 4) Tyler Technologies, Inc. – (Incode) Staff analyzed each proposal based on many different criteria such as: 1) Ability to create efficiencies, which are currently limited by the software version in use. 2) Electronic payment capabilities and integration with other electronic payment solutions. 3) Functionality as it pertains to City business for necessary modules. 4) Overall cost based on software, annual maintenance, conversion and setup costs. 5) Comparable client base and sectors served. Therefore, staff determined that Proposers from Civic Systems, LLC and Professional Computer Systems, Co. would not meet the needs of the City. BS&A Software and Tyler Technologies, Inc. had very robust, comprehensive ERP solutions, but from a cost perspective, were significantly above the City’s budgeted estimate. As such, staff reached out to the City’s current software provider, Accela, to get a proposal on their cloud-based solution. As stated in the previous report, the City was many versions behind Accela’s newest cloud based version. Upon review of the list of capabilities and contacting another City who uses the software, the version appears to have many of the same functionalities of BS&A Software and Tyler Technologies, Inc., but at a better overall price point. For comparison purposes, analyzing the relevant modules for the City, annual maintenance, conversion and setup costs for a vendor or cloud-based solution, the following are the approximate costs in alphabetical order: 1) Accela: $51,691 2) BS&A Software: 94,636 3) Civic Systems, LLC – (Caselle): 90,565 4) Professional Computer Systems, Co. – (Utilit-e): 50,358 5) Tyler Technologies, Inc. – (Incode): 84,533 As shown, Accela is not the low cost option, but with Professional Computer Systems, Co. who was the lowest cost option, staff determined this would not meet its business needs. This is system based on providing ERP solutions for utilities, not for governments as a whole, which utilize different fund types and activities. In addition, client references were all utilities and co-ops, with no local presence. It is key to note that Proposers 2-5 above all offered a static proposal, while Accela offered a variable proposal. This means that for data conversion, integration/interfaces, project management and training, Proposers 2-5 offered flat fees, while Accela was based on the actual hours incurred. Further, in staff conversation with Accela, they provided an upper end figure, stating that with the level of staff involvement and amount of data the City wants converted, these costs could be less. Finally, staff analyzed the cost per year after the ERP system is implemented, which is the annual maintenance cost. The following is the average cost per year for years two through five: 1) Accela: $ 9,800 2) BS&A Software: 5,500 3) Civic Systems, LLC – (Caselle): 18,400 4) Professional Computer Systems, Co. – (Utilit-e): 13,700 5) Tyler Technologies, Inc. – (Incode): 21,600 With the costs shown, BS&A is the lowest Proposer for annual maintenance costs, but factoring in the price difference between BS&A and Accela for implementation of the EFP solution, it would take nearly 10 years to realize the savings from the annual maintenance costs to justify the higher implementation costs. Based upon all these factors, staff informed BS&A Software, Civic Systems, LLC, Professional Computer Systems, Co. and Tyler Technologies, Inc. that the City would be exploring options with a different vendor. Therefore, staff reached out to Accela for a demonstration, which took place on September 25, 2017. This demonstration outlined many of the key features that are important to City business and staff efficiencies, as such, staff is recommending the City Council approve moving forward with Accela. It is the goal of a go-live date in the first quarter of 2018 for implementation and training of staff based upon the timing of the contract negotiation. FISCAL IMPACT: The City put in a tentative budget amount of $40,000 for the upgrade costs. There also was approximately $6,000 in the existing operating budget for annual maintenance costs for the current system. Based on timing of the implementation, approximately $10,000 would be required upon signing of the contract in 2017, plus any monthly invoices to be paid as implementation occurs in 2017. Therefore, the $40,000 budgeted in 2018 is sufficient to cover the implementation in the fiscal year, with any costs incurred in 2017 being paid from fund balance. RECOMMENDATION: 1) “Motion to Adopt Resolution No. 2017-101 approving formal rejection of BS&A Software, Civic Systems, LLC, Professional Computer Systems, Co. and Tyler Technologies, Inc., and enter into contract negotiations with Accela, which upon acceptable terms, to begin implementation of an Enterprise Resource Planning (ERP) System solution for the City of Lake Elmo.” ATTACHMENTS: 1) Resolution No. 2017-101 – Approve Negotiation with Accela for ERP System and Implementation CITY OF LAKE ELMO WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. 2017-101 RESOLUTION APPROVING FORMAL REJECTION OF BS&A SOFTWARE, CIVIC SYSTEMS, LLC, PROFESSIONAL COMPUTER SYSTEMS, CO. AND TYLER TECHNOLOGIES, INC., AND TO ENTER INTO CONTRACT NEGOTIATIONS WITH ACCELA, WHICH UPON ACCEPTABLE TERMS, TO BEGIN IMPLEMENTATION OF AN ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM SOLUTION FOR THE CITY OF LAKE ELMO. WHEREAS, The City of Lake Elmo is formally rejecting proposals from the following firms: 1) BS&A Software 2) Civic Systems, LLC – (Caselle) 3) Professional Computer Systems, Co. – (Utilit-e) 4) Tyler Technologies, Inc. – (Incode) WHEREAS, the City of Lake Elmo is entering into contract negotiations with Accela, which upon acceptable terms, to begin implementation of an Enterprise Resource Planning (ERP) System solution. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Lake Elmo, that it will formally reject the four firms listed above and enter into contract negotiations with Accela. ADOPTED, by the Lake Elmo City Council on the 3rd day of October, 2017. ______________________________ Mike Pearson Mayor ATTEST: __________________________________ Julie Johnson City Clerk