Title
Resolution to Approve a Purchase Order with Microsoft Corporation via Dell Marketing L.P. And Appropriate Funding ($145,487.28) (8 Votes Required)
Memorandum
Attached for your review and approval is a resolution authorizing payment to Dell Marketing L.P. and appropriation in the amount of $145,487.28 from the Information Technology fund balance to cover the FY2025 "true-up" costs associated with the City’s Microsoft Enterprise Agreement.
On September 3, 2024, City Council approved a three-year Enterprise Agreement with Microsoft Corporation (Resolution R-24-353), totaling $1,650,000.00 over three fiscal years (FY2025-FY2027). The original estimate of $530,000.00 for FY2025 represented our best projection at the time, based on known license counts and anticipated growth.
As part of Microsoft’s standard enterprise licensing process, an annual “true-up” was conducted to account for additional licenses deployed after the initial agreement was signed. After staff reviewed several options to find the least costly solution, this year’s "true-up" resulted in an additional cost of $145,487.28, reflecting growth in licensed servers beyond the original estimate.
Budget/Fiscal Impact: This expense was not planned for in the FY26 Information Technology Services Budget. It is being requested that the full cost of $145,487.28 be appropriated from the fund balance of the Information Technology Fund.
Staff
Prepared by: Jennifer Grimes, Infrastructure and Cybersecurity Manager
Reviewed by: Joshua Baron, Director, Information Technology Services Unit
Kim Hoenerhoff, Financial Analyst
Approved by: Milton Dohoney, Jr., City Administrator
Body
Whereas On September 3, 2024, City Council approved a three-year Enterprise Agreement with Microsoft Corporation (Resolution R-24-353), totaling $1,650,000.00 over three fiscal years (FY2025-FY2027);
Whereas, The original FY2025 cost projection was based on the best available estimate at the time of license counts and anticipated growth;
Whereas, Microsoft has conducted its annual licensing “true-up”, resulting in additional license costs of $145,487.28 for FY2025;
Whereas, This cost is in accordance with the terms of the original agreement and reflects license use beyond the original estimate; and
Whereas, Sufficient funds are available in the Information Technology Fund Balance to cover this expenditure;
RESOLVED, That City Council approve a purchase order with Dell Marketing L.P. in the amount of $145,487.28 for additional licensing costs discovered during the Microsoft Enterprise Agreement "true-up" process;
RESOLVED, That City Council appropriate $145,487.00 from the fund balance of the Information Technology Fund to the FY 2026 Information Technology Fund expenditure budget to cover these costs; and
RESOLVED, That the City Administrator be authorized to take all necessary actions to implement this resolution, including payment of the additional licensing fees, after approval as to form by the City Attorney.