TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Diego Chavez, Administrative Services Director
PREPARED BY: John Borger, IT Manager
SUBJECT:
title
Microsoft Software Licensing Agreement
end
RECOMMENDATION
recommendation
Authorize the City Manager to enter into a five (5) year Microsoft Enterprise Volume Licensing Agreement through the Statewide Enterprise Licensing Agreement administered by the California Department of Technology (CDT) and authorize SHI, LLC to administer the agreement, including the CDT service fee;
Approve a separate three-year Microsoft Select Plus Agreement with the County of Riverside, also administered by SHI, LLC;
Approve both agreements for a combined not-to-exceed amount of $1,501,495.41, which includes the five (5) year CDT service fee of $88,247.78;
Authorize the City Manager to execute all necessary and related documents for the term of the agreements; and
Amend the FY 2025/26 Operating budget to establish an additional appropriation of $17,622.09 in the Information Technology Operating Fund.
body
PRIOR ACTION/VOTE
On May 5, 2020, the City Council adopted Resolution No. 20-4234, entering into the Microsoft Enterprise Enrollment Agreement, authorizing SoftwareOne to administer the agreement, and authorizing the City Manager to execute the agreement and all necessary and related documents for any subsequent software licenses for the term of the agreement.
On April 18, 2023, the City Council authorized entering into the Microsoft Enterprise Enrollment Agreement, authorizing the use of Contract 9-19-70-0012A with the California Department of General Services, authorized Crayon Software Experts, LLC to administer the agreements, and authorized the City Manager to execute the agreements and all necessary and related documents for any subsequent software licenses for the term of the agreements (Vote 4-0-1).
CITY COUNCIL GOAL
Provide a high level of innovative public safety.
DISCUSSION
In April 2023, the City Council authorized the City to enter into a Microsoft Enterprise Enrollment Agreement for a three (3) year term to provide essential software that is used by employees across all City departments. This agreement includes widely used applications such as Word, Excel, Outlook, and Teams, along with secure cloud-based services for email, file storage, collaboration, and cybersecurity protection.
The current agreement expires on March 31, 2026, and must be renewed to ensure continued access to these productivity programs and systems. The proposed renewal includes updated licensing to account for additional staff positions authorized by the City Council and provides enhanced security features to meet current cybersecurity standards.
Staff recommends approving the following two agreements:
1. A five (5) year Microsoft Enterprise Agreement (Attachment 1) secured through the Statewide Enterprise Licensing Agreement, which provides standardized pricing and statewide negotiated terms. This agreement also includes a California Department of Technology (CDT) service fee of $88,247.78 for administration and support over the life of the contract.
2. A three (3) year Microsoft Select Plus Agreement (Attachment 2) through the County of Riverside for specific Microsoft products not included in the Enterprise Agreement.
Based on best value and established cooperative purchasing programs, the Information Technology Division recommends utilizing SHI, LLC as the City’s authorized value-added reseller. Pricing is available through master agreements negotiated by the CDT and the County of Riverside, providing favorable public-sector pricing.
These agreements ensure continuity of these software services from April 1, 2026, through March 31, 2031. They allow the City to maintain strong cybersecurity protections offered only to Microsoft government clients and provide predictable long-term costs for these essential programs.
PUBLIC NOTICING
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
CEQA AND REGULATORY OVERVIEW
This action is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because this action will not result in a physical change to the environment, directly or indirectly.
FISCAL IMPACT
The total cost of both agreements is $1,501,254.58, as detailed below, which includes the five (5) year CDT service fee of $88,247.78.
Microsoft Enterprise Agreement (five (5) years):
4/1/2026 - 3/31/2027: $271,006.92
4/1/2027 - 3/31/2028: $271,006.92
4/1/2028 - 3/31/2029: $279,841.20
4/1/2029 - 3/31/2030: $279,841.20
4/1/2030 - 3/31/2031: $279,841.20
Total: $1,381,537.44 (Attachment 3)
CDT Service Fee (five (5) years): $88,247.78
Microsoft Select Plus Agreement (three (3) years):
4/1/2026 - 3/31/2029: $31,469.63 (Attachment 4)
The Fiscal Year 2025/26 cost for both agreements is $320,126.11, consisting of:
• $271,006.92 for the first year of the Microsoft Enterprise Agreement;
• $31,469.63 for the Microsoft Select Plus Agreement; and
• $17,649.56 for one-fifth of the CDT service fee.
The Fiscal Year 2025/26 Information Technology Operating Budget includes $302,504.02 for these agreements. Staff recommends an amendment to the FY 2025/26 Operating budget to establish an additional appropriation of $17,622.09 in the Information Technology Operating Fund account 7268340-62160 to fully fund Fiscal Year 2026 costs.
Future year costs will be incorporated into the City’s biennial budget process.
ATTACHMENTS
ATT 1 - Statewide Enterprise Licensing Agreement
ATT 2 - Microsoft Select Plus Agreement - County of Riverside
ATT 3 - Software Licensing Quote - Select Plus
ATT 4 - Software Licensing Quote - Enterprise Agreement