HomeMy WebLinkAbout03. Increase funding for Oracle contract re ERP System Replacement, DP 8250 Page 1 of 3
Item 3.
CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: NOVEMBER 19, 2020
SUBJECT: AUTHORIZE THE GENERAL MANAGER TO: 1)AMEND AN EXISTING
PROFESSIONAL CONSULTING SERVICES AGREEMENT WITH ORACLE
CONSULTING SERVICES LLC I N AN AMOUNT NOT TO EXCEED $175,000,
INCREASING THE COST CEILING TO $525,000; AND 2) EXECUTE A FIVE-
YEAR CONTRACT IN THE AMOUNT NOT TO EXCEED $280,000 FOR
LONG-TERM SUPPORT FOR THE THE ENTERPRISE RESOURCE
PLANNING (ERP) SYSTEM REPLACEMENT, DISTRICT PROJECT 8250
SUBMITTED BY: INITIATING DEPARTMENT:
JOHN HUI E, INFORMATION TECHNOLOGY ADMINISTRATION DEPARTMENT- IT
MANAGER
PHILIP LEIBER, DIRECTOR OF FINANCE AND
ADMINISTRATION
Roger S. Bailey
General Manager
ISSUE
Change orders related to implementation of Oracle Permitting & Community Development system are
necessary to complete data conversion efforts and to implement additional permit types related to
Environmental Compliance. In addition, a long-term support contract with Oracle Consulting Services
LLC is requested to help ensure a successful transition to and use of the system over the next five years.
BACKGROUND
The Board approved capital budget for the entire Enterprise Resource Planning (ERP) Replacement (DP
8250) is $5,205,000 as approved on June 20, 2019, includes $350,000 for Oracle Consulting Services.
Oracle is responsible for the implementation of the Permitting/Community Development module, which is
used by the Permit Counter for customer-related transactions.
Board Policy No. BP 037 - Delegation of Authority to General Manager allows for changes of up to
$200,000 for professional services contracts greater than $2,000,000. Change orders for Emtec totaling
$350,000 are proposed in a separate position paper.
November 19, 2020 Regular Board Meeting Agenda Packet- Page 27 of 152
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Authorization for known and potential future change orders with Oracle totaling $175,000 is requested, for
a new contract amount not to exceed $525,000. The change orders are shown below:
Known Change Orders
CR-001 Conversion Cost $ 50,000
CR-002 Environmental Permits 50,000
Subtotal Completed / Known $100,000
Potential Future Change Orders
Other future change orders 75,000
Total Contract Amendment Authority Requested $175,000
The funding source for the increase is a reallocation of funds from within the approved capital project
budget of$5,205,000.
The existing contingency for the ERP Replacement Project is $527,000.After subtracting $350,000
requested in the related Emtec position paper, and $175,000 requested in this position paper, the project
contingency will be $2,000.
Other remaining but unfunded work related to the ERP includes a developing solution for the billing
functionality that currently exists in the HTE system, but which does not exist in the Oracle Fusion Cloud
ERP or the Permitting/Community Development module. Staff is reviewing alternatives related to this
need and expects to settle on a solution during the first half of 2021, prior to the July 2021 transmission of
billing data to the County for inclusion on the tax roll.
In addition to the above, contract approval is requested in an amount not to exceed $280,000 in
Operations and Maintenance (O&M)funding to provide long-term Oracle support. This amount locks in the
cost for up to five years. The annual cost is $56,000 and is paid yearly. In future years beyond the first, this
amount may be reduced or eliminated as Central San staff takes on more of this function with internal staff.
The contract may be cancelled or reduced in scope at any time if the services are no longer needed. It
should be noted that the ongoing support for the Permitting/Community Development module to be
provided by Oracle is separate from the support to be provided by Emtec to the remainder of the ERP
modules, as it was Oracle (not Emtec)that implemented the Permitting/Community Development module.
ALTERNATIVES/CONSIDERATIONS
The first change order relates to data conversion, which is necessary due to unexpected complexities
related to migration of data from the legacy SunGard System. The alternative would be for staff to assist
more heavily in this work, but this is not considered viable due to their normal responsibilities and the
additional work they are facing in setting up the system.
The second change order relates to implementing a number of Environmental Compliance permit types
that were not originally planned but which upon further review are viewed as a good use of the system, and
which will improve efficiency and accuracy. An alternative would be to have staff implement these new
permit types. This is possible, but would add significant delays due to the workload and time that it would
take to learn the development environment.
November 19, 2020 Regular Board Meeting Agenda Packet- Page 28 of 152
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FINANCIAL IMPACTS
No changes to Central San's overall budgets are proposed. The funding for the requested change is
available within the dedicated project contingency for DP 8250. Funding for the ongoing support will be
addressed within the O&M budgets. Funding for this was not included in the Fiscal Year 2020-21 adopted
budget, but the amount will be funded from savings elsewhere in the budget.
COMMITTEE RECOMMENDATION
The Administration Committee reviewed this matter at its meeting on November 3, 2020 and
recommended Board approval.
RECOMMENDED BOARD ACTION
Authorize the General Manager to: 1) amend an existing professional consulting services agreement with
Oracle Consulting Services in an amount not to exceed $175,000, increasing the cost ceiling to $525,000;
and 2) execute a five-year contract in the amount not to exceed $280,000 for long-term support for the the
ERP System Replacement, District Project 8250
Strategic Plan Tie-In
GOAL ONE: Customer and Community
Strategy 1—Deliver high-quality customer service
GOAL FOUR: Workforce Development
Strategy 2—Foster relationships across all levels of Central San
GOAL SIX: Innovation and Optimization
Strategy 2—Improve and modernize operations through technology and efficiency measures
November 19, 2020 Regular Board Meeting Agenda Packet- Page 29 of 152