R2023-73 Resolution Authorizing Approval to Renew Annual License and Support Agreement from Tyler Technologies, Inc for the MUNIS Enterprise Financial Software Suite

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Information Technology DATE: 4/17/2023 MEMO: 2023-02 TO: Lisa Gregory,Mayor Pro Tem and City Council Members FROM: James Edwards,IT Director SUBJECT: Resolution Authorizing Approval to Renew Annual License and Support Agreement from Tyler Technologies,Inc. for the MUNIS Enterprise Financial Software Suite. SUMMARY RECOMMENDATION: City staff recommends that City Council approve the attached resolution authorizing the City Manager to renew the annual Support and License Agreement with Tyler Technologies,Inc. MUNIS Division for software license and maintenance services for the period May 1,2023,to April 30,2024. BACKGROUND: This is the annual licensing and support agreement between the City of Decatur and Tyler Technologies,Inc.,MUNIS Division, for licensed use of the integrated software system that supports financial accounting,purchasing,payroll,budget preparation, inventory control,fixed assets,business licensing,general billing,accounts payable,human capital,and other transactions/functions,including reporting. The attached renewal quote extends the City's software license and maintenance agreement for an additional year. The agreement further grants the City rights to receive application updates,upgrades,and technical and operational support. This software is expensive;last year I estimated that implementing a new Enterprise Resource Planning(ERP)system for the City which accommodates all of the ERP processes we currently have in place would have cost our taxpayers between 2 and 2.5 million dollars. Now,post pandemic that price tag has increased to nearly 3 million dollars. If a shift is made to another system, I estimate the ongoing maintenance on that solution to be nearly as much as we are paying now if not a bit more. Industry standard cost for initial software maintenance is between 15-20%of software capital. In my estimate above,the software cost itself(excluding implementation costs)will be between 1.4 million and 1.7 million and if we could negotiate on the lower side for software maintenance using 15%,we are talking about annual costs for ERP software maintenance to be $210,000. It is rare, however,that an ERP solution would be as low 15%;typically,software maintenance is 18%on average. Information Technology continues to work with Tyler to reduce our annual license and maintenance costs for MUNIS. Last year's renewal quote was $195,293.54 before it was discounted to$185,976. I was unable to secure a maintenance discount from Tyler this year due to our stable financial state and their out-of-control labor costs post pandemic,just like every other vendor we do business with is reporting. To put this year's renewal cost($208,530.08)into perspective,other ERP maintenance costs I have managed with other organizations over eight years ago,the maintenance cost is proportionately higher than what we are currently paying Tyler for comparable software. For example,licensing and maintenance costs at a hospital I previously worked for was just under $500,000 and was right around$350,000 for a smaller hospital I worked with in Gibson City. I don't believe our cost for this maintenance through Tyler is out of line,especially compared to the costs of a new ERP system. PRIOR COUNCIL ACTION: City has maintained an Annual License and Support Agreement with Tyler for the MUNIS ERP system since the system was originally purchased in 2003 and is necessary for daily operation of City business going forward. POTENTIAL OBJECTIONS: None Anticipated INPUT FROM OTHER SOURCES: None STAFF REFERENCE: James Edwards,IT Director,(217)450-2236 BUDGET/TIME IMPLICATIONS: