HomeMy WebLinkAbout12683RESOLUTION NO. 12683
A RESOLUTION APPROVING A STATE AND MUNICIPAL
LEASE/PURCHASE AGREEMENT BETWEEN THE CITY OF
PUEBLO, A MUNICIPAL CORPORATION, AND SUNTRUST
EQUIPMENT FINANCE & LEASING CORPORATION, AND
APPROVING AN ESCROW AGREEMENT, AUTHORIZING
EXECUTION THEREOF BY THE PRESIDENT OF THE CITY
COUNCIL, AUTHORIZING THE EXECUTION AND DELIVERY
OF ALL OTHER DOCUMENTS REQUIRED THEREWITH BY
THE CITY MANAGER, AND AUTHORIZING ALL OTHER
ACTIONS NECESSARY TO THE CONSUMMATION OF THE
TRANSACTION CONTEMPLATED BY THIS RESOLUTION
WHEREAS, the City of Pueblo, a Municipal Corporation (hereinafter “City”), is a
Colorado home rule city duly organized and existing under and by virtue of Article XX of the
Colorado Constitution, and is authorized thereby to purchase and lease personal property
for its municipal purposes for the benefit of City and its inhabitants and to enter into
contracts with respect thereto; and
WHEREAS, the City desires to purchase, acquire, and lease a certain new
Enterprise Resource Planning system including associated software, hardware, and
implementation services constituting personal property necessary for the performance of
City business operations; and
WHEREAS, in order to acquire such equipment, City proposes to enter into a Master
Lease Agreement, including Amendment No. 1 (the “Agreement”) and separate Equipment
Schedule No. 5 (collectively, the “Lease”) with SunTrust Equipment Financing and Leasing
Corp., a Virginia Corporation or a subsidiary thereof (the “Lessor”), and Escrow Agreement
with the Escrow Agent in substantially the form as attached hereto; and
WHEREAS, City Council, as the governing body of the City, deems it for the benefit
of City and for the efficient and effective administration thereof to enter into the Agreement
for the purchase, acquisition, and leasing of equipment therein described on the terms and
conditions therein provided; and
WHEREAS, the funds made available under the Agreement will be applied to the
acquisition of the equipment in accordance with the terms of such Agreement and Escrow
Agreement; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The form, terms, and provisions of the Agreement are hereby approved in
substantially the form attached hereto with such insertions, omissions and changes as shall
be approved by the President of City Council and the City Attorney, the execution of such
documents being conclusive evidence of such approval; and the President of the City
Council is hereby authorized and directed to execute the Agreement and to deliver the
Agreement, and the City Clerk is authorized and directed to attest same and affix the seal of
the City thereto.
SECTION 2.
The City Manager is authorized and directed to take all action necessary or
reasonably required by the parties to the Agreement, to carry out, give effect to and
consummate the transactions contemplated thereby and to take all action necessary in
conformity therewith, including, without limitation, the execution and delivery of any closing
and other documents required to be delivered in connection with the Agreement.
SECTION 3.
The Agreement is expressly made subject to sufficient appropriations being made
therefore in each fiscal year beginning in 2014. Nothing contained in this Resolution and the
Agreement, nor any other instrument, shall be construed with respect to the City as
incurring a pecuniary liability or charge upon the general credit of the City or against its
taxing power, nor shall the breach of any agreement contained in this Resolution and the
Agreement or any other instrument or document executed in connection therewith impose
any pecuniary liability upon the City or any charge upon its general credit or against its
taxing power, except to the extent that the rental payments payable under the Agreement
are special limited obligations of the Lessee as provided in such Agreement. Nothing in the
Agreement is intended, nor shall it be construed, to create any multiple-fiscal year direct or
indirect debt or other financial obligation whatsoever of the City.
SECTION 4.
The City Manager and Director of Finance of the City are each hereby designated to
act as authorized representatives of the City for purposes of the Agreement until such time
as the City Council shall designate any other or different authorized representative for
purposes of the Agreement.
SECTION 5.
This Resolution shall be effective immediately upon passage and approval.
INTRODUCED: May 28, 2013
BY: Eva Montoya
Background Paper for Proposed
RESOLUTION
DATE: May 28, 2013 AGENDA ITEM # Q-2
DEPARTMENT: Finance Department
Deborah Morton, Interim Director
Information Technology Department
Lori Pinz, Director
A RESOLUTION APPROVING A STATE AND MUNICIPAL LEASE/PURCHASE
AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND
SUNTRUST EQUIPMENT FINANCE & LEASING CORPORATION, AND APPROVING AN
ESCROW AGREEMENT, AUTHORIZING EXECUTION THEREOF BY THE PRESIDENT
OF THE CITY COUNCIL, AUTHORIZING THE EXECUTION AND DELIVERY OF ALL
OTHER DOCUMENTS REQUIRED THEREWITH BY THE CITY MANAGER, AND
AUTHORIZING ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE
TRANSACTION CONTEMPLATED BY THIS RESOLUTION
ISSUE
Should the City of Pueblo enter into a lease/purchase agreement for the acquisition of a
new Enterprise Resource Planning (ERP) System including the associated hardware and
software required for such a system?
RECOMMENDATION
Approval of the Resolution.
BACKGROUND
This Resolution approves a lease/purchase agreement for the acquisition of:
An ERP and Court system from Tyler Technology, Munis and Incode applications
including data conversion and implementation services
Software, interface, database, mapping, and purchasing server applications and
licenses from Insight Public Sector, Dell Computers, SunGard Public Sector,
GlobalSign, Environmental Systems Research Institute (ESRI), and Periscope
Holdings
Server, firewall, printer, inventory and cash system hardware from CDW-G LLC, Dell
Computers, and GovConnection
Implementation Services from Plante Moran
The City’s current business system software is SunGard’s HTE system which was
implemented in 1999 as the City’s Financial and Municipal Court systems. City operational
requirements have grown over the years, and this system lacks important functionality
needed by the City to effectively and efficiently manage the needs of today’s business
operations. In response to the lack of functionality, multiple disparate systems and
applications are utilized in various departments throughout the City. Most of these systems
do not interface or share data with HTE causing duplicate and triplicate data entry and
manual reconciliations to be completed.
The HTE system resides on an IBM AS400 I-Series mid-size server which has reached the
end of its life; however, to replace and maintain this server is very expensive. With the lack
of data sharing capabilities and system functionality, replacing this hardware to maintain an
obsolete system is not recommended.
Replacing HTE with an up-to-date fully robust ERP system will allow the City to gain
operational efficiencies by improving business processes with functioning workflow tools,
implement best practices, eliminate redundant processes and duplicate data entry through
the integration of data. ERP software facilitates the flow of information between all business
processes within a single unified system, eliminating the dependence and costs associated
with all of the disparate systems. Items of expected improvement include but are not limited
to:
Significant incorporation of best business practices throughout the City
Empowerment of departments to improve their business processes through the new
system
Elimination of paper-based business workflow processes and forms
Redundant “shadow systems,” data entry, storage, and paper processing are
significantly reduced
Functionality and efficiency is improved in back-office functional areas
Improvement of quality and accessibility of information for decision support
Improvement of City-wide communication though better access to information
Enhancement of E-government services, including enhanced customer service and
web self-service
Increased satisfaction for City residents during their interaction with the City both
directly and through interaction with Tyler system supported City employees
The City began evaluating replacement ERP systems in mid-2011. Various demonstrations
were conducted throughout the year with several of the Tier-2 ERP and Municipal Court
system providers. Representatives from all City departments participated in a multi-tier
demonstration process evaluating functional capabilities, current and future business
process requirements, and the ability to integrate the functionality and data from current
stand-alone systems. Department representatives completed a vendor evaluation form
rating each system demonstrated.
The systems identified as the top systems through the demonstration process were New
World Systems and Tyler Technologies Corporation. Both vendors had been competitively
bid and had master purchasing agreements through two cooperative purchasing
organizations; New World System is on WSCA (Western States Contracting Alliance
through Dell) and Tyler Technologies is on NJPA (National Joint Powers Alliance). The City
of Pueblo is a member of and can take advantage of both of these agreements, eliminating
the need and cost for the City to run its own RFP (Request for Proposal) while ensuring a
competitive process was conducted.
These two vendors were then put through additional rounds of demonstrations. Upon
completion of this step, system costs were obtained and Tyler Technologies was chosen as
the system best meeting the needs of the City by providing a cost competitive system,
better integration capabilities, and comprehensive functionality such as workflow
processing, advanced reporting, employee and citizen self-service capabilities, third party
interface capabilities, excellent customer references, and support structure.
Tyler Technologies focuses strictly on public sector entities and has installed approximately
1600 similar systems throughout the country, including converting other entities over from
HTE. The City is anticipating a multiple phase implementation taking 24 to 30 months to
complete. Modules to be implemented include, but are not limited to, core financials, payroll,
human resources, bid and contract management, work orders, code enforcement, and
Court modules.
Due to lack of staffing, the City’s Information Technology Department is unable to manage
this size of an implementation. In September 2011, a Request for Qualification (RFQ 11-
086) process was conducted for a third-party professional ERP consultant to assist the City
with the implementation of a new ERP system. Five vendors were qualified and in January
2012, these vendors were asked to provide an RFP response including pricing to the
selection team. These responses were evaluated, and the evaluation team ultimately
selected Plante Moran as the consultant that could best deliver the services and expertise
needed to implement the Tyler Technology solution.
The cost for Tyler Technology and the consultant is approximately $1.92M. It was
determined that the City needed to fund this project through a lease. In April 2013, RFP 13-
044 was distributed and four responses were received. The responses were evaluated and
SunTrust Equipment Finance and Leasing (SunTrust) provided the best financing and
interest option for the City.
Because the City’s current ERP system and hardware has been end-of-life and no longer
supports the needs of the City, it is staff’s recommendation that the City enter into this lease
agreement with SunTrust in the amount of $1,924,275.18.
This Resolution is presented for City Council consideration concurrently with a separate
Resolution for the purchase of all items required by this project contingent upon City
Council’s approval of the Lease Purchase Agreement with SunTrust.
FINANCIAL IMPACT
2,115,507.40
The new Enterprise Resource Planning package, including interest, totals $
which will be amortized over ten years. The City’s obligation under the lease agreement
shall be subject to annual appropriation by the City Council.
Payment schedule for the lease/purchase payments, including a fixed interest rate of
1.869%, or $191,232.22, is as follows:
PaymentPaymentTotalPrincipalInterestPrepayment
NumberDatePaymentComponentComponentPrice
05/28/20130 0 0 NA
1 01/31/2014211,550.74 187,374.47 24,176.27 1,736,900.71
2 01/31/2015211,550.74 178,907.72 32,643.02 1,557,993.00
3 01/31/2016211,550.74 182,270.08 29,280.66 1,375,722.92
4 01/31/2017211,550.74 185,838.48 25,712.26 1,189,884.44
5 01/31/2018211,550.74 189,188.25 22,362.49 1,000,696.19
6 01/31/2019211,550.74 192,743.82 18,806.92 807,952.36
7 01/31/2020211,550.74 196,366.22 15,184.52 611,586.15
8 01/31/2021211,550.74 200,120.19 11,430.55 411,465.95
9 01/31/2022211,550.74 203,817.72 7,733.02 207,648.23
10 01/31/2023211,550.74 207,648.23 3,902.51 0.00
=========== =========== ===========
2,115,507.40
Totals1,924,275.18191,232.22