ADMINISTRATIVE COMMITTEE
5.	CONSIDER EXPENDITURE OF BUDGETED FUNDS TO ENTER INTO AGREEMENT WITH TYLER TECHNOLOGIES FOR PURCHASE AND IMPLEMNTATION OF INCODE FINANCIAL SOFTWARE
Meeting Date:		October 8, 2012	Budgeted:	Yes
From:		David J. Stoldt,	Program/	Fixed Assets
		General Manager	Line Item No.	9160 Computer Equip & Programs
Prepared By:		Suresh Prasad	Cost Estimate:	$66,430 plus direct costs
General Counsel Review: Yes
Committee Recommendation: The Administrative Committee reviewed this item on October 8, 2012 and recommended _________________________.
CEQA Compliance: N/A

SUMMARY: Since 1997, the District has been utilizing Creative Solutions Accounting (CSA) as its financial software. In its current form, CSA does not meet the District's needs and cannot be upgraded. Basic financial reports are not available on time, while many useful reports are not available at all. The lack of real time reportable data has led to several internal deficiencies in the past such as inability to accurately determine reserve balances at time of budget preparation, lack of year-to-date tracking of expenditures and revenues relative to budget, and difficulty in matching invoices to purchase orders, among other examples. Further, many of the data entries must either be manually posted or maintained outside the CSA software creating redundant data entries by staff. All of these routine transactions take an inordinate amount of time due to the inadequacies of the CSA software.

In recognition of the fact that the CSA software is not suitable for the District's needs, staff budgeted $60,000 in fiscal year 2012-13 to fund the purchase of new financial software. No budget adjustments are required since the first year maintenance fee will be significantly lower than the budgeted amount. Staff has evaluated three different products that will meet the District’s needs and recommends that the Board enter into an agreement with Tyler Technologies for purchase and implementation of Incode financial software. The justification for selecting Tyler Technologies is provided in the background section of this report.

RECOMMENDATION: District staff recommends authorizing the General Manager to enter into an agreement with Tyler Technologies to provide financial software (Incode) and implementation services for an amount not to exceed $66,430 plus direct reimbursement costs. The Agreement would be subject to final negotiation of terms by the District Counsel.

BACKGROUND: Since 1997, the District has been using CSA as its financial software. In its current form, several deficiencies have been identified that will need to be addressed. These shortcomings cannot be addressed by upgrading the current CSA software.

For example, currently the Human Resources department tracks most personnel data on a manual index card system. This procedure requires much staff time and inhibits the department from generating any reporting capability off of that data.

The Purchase Orders (PO) are maintained in an Excel system which makes it hard to track the outstanding PO’s or match them against the actual invoices. This procedure requires significant staff time and the inability of generating reports against PO’s.

The current system does not allow multiple accounting periods to be open at the same time. This creates a burden of not being able to produce financial reports in a timely manner. For example, without closing the fiscal year end period, a new fiscal year cannot be created. As such, the financial statement cannot be issued for new fiscal year until 4-5 months after close of a prior period.

Some of the other inadequacies are as follows:

· Inability to extract real-time data for crucial financial performance.

· Inability to go back more than two years of data, preventing analysis of long-term trends or performance.

· Dependency on multiple applications, which creates burden on staff for redundant data entries and creates data inefficiencies.

· Information not easily extracted due to inefficiencies of the system.

· Business processes are manual, which makes it hard to extract information.

· Lack of decentralized process, significant time spent responding to employee, vendor of citizens for request of information

District staff has examined three possible financial software vendors. The first of these vendors is Black Mountain software. The second vendor examined by staff is Springbrook Software. The third vendor considered by staff is Tyler Technology. All three software’s are specific to government entities but Tyler Technologies and Springbrook offer many of the same features. The quoted prices from the three vendors are as follows:

One-time Cost Annual Fee*

Tyler Technologies $ 50,421 $16,009

Black Mountain $ 33,475 $ 5,070

Springbrook $122,200 $11,575

*Part of the annual fee will be reimbursed by CAWD/PBCSD Reclamation Project

District staff was given a demonstration by all three vendors. Based on the functionalities and local references, staff recommends Tyler Technologies as the preferred software vendor.

Staff does not recommend Black Mountain software for the following reasons:

· Black Mountain software is created on FoxPro database platform. This does not meet with the District’s standards, which is running databases on Microsoft SQL platform.

· Black Mountain software does not have the capability of importing rebate information into the Accounts Payable module.

· During the demonstration, it was noted that the Black Mountain software is not as user-friendly when compared to the other two products.

· They have other deficiencies when compared to the other two products.

· There are no local references available for Black Mountain software.

Staff feels that Springbrook software is compatible with the District’s needs, however, it will be cost prohibitive to implement Springbrook software.

Staff recommends Tyler Technology Incode software for the following reasons:

· Tyler Technology financial software has been in use by the City of Seaside for more than 10 years and staff is highly satisfied with it.

· Salinas Valley Waste Authority converted to the Incode Financial software seven years ago and staff feels the conversion went well and would definitely recommend the Incode software as the product is easy to use and is able to meet the Agency's needs.

· The City of Hollister the product since 2002. City of Hollister staff is satisfied with the financial software and are particularly pleased with Tyler Technology's support.

· A demonstration of the Incode financial software to District staff indicated that the software would meet the District's needs in terms of general ledger reports and transactions, budget development, payroll processing, accounts payable, fixed assets and project/grant accounting. The system is user friendly and efficient than the District's current financial software.

· The Incode software will allow staff to process the rebate checks without the need of redundant data entry, thus saving staff time.

· The Incode financial software will allow for the District to process payroll and the payroll transactions will automatically be posted to the general ledger, as opposed to being manually posted as is the current procedure, saving staff time and eliminating the possibility of errors.

· Tyler Technologies does not charge for major version upgrades to their product. The upgrades are included in their annual maintenance fee.

· The Incode software is out of the box software used by many municipalities, including the three local municipalities listed above. There will not be the need to develop proprietary software for the District. Tyler Technology states that it has never failed a conversion.

· The fact that other local municipalities are currently using Tyler Technologies will allow District staff the opportunity to have local resources for help and questions.

EXHIBIT

5-A Draft Agreement

U:\staff\Board_Committees\Admin\2012\20121008\05\item5.docx