The Modesto City Council approved $7.4 million in contracts Tuesday evening for a major computer system upgrade at City Hall.
Officials said the system will replace antiquated computers in the finance and human resources departments. The older computers are unable to communicate with each other and could hamstring city operations if they crash, staff said.
The only concern was how to pay for the system given the city's tight budget.
Councilwoman Kristin Olsen wanted assurance the money wasn't coming from the water fund and other utility funds, which are restricted for specific purposes.
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"I am not comfortable voting on this until we see the other sources of funding," said Olsen, who dissented in the 6-1 vote approving the contracts.
Finance Director Gloriette Beck said money would not be borrowed from the utility funds. The city will borrow as much as $3 million from an employee benefits fund and repay the loan from the general fund over seven years.
In addition, money will be taken from other city funds that can be used to help pay for the system, Beck said.
Discount offer expiring soon
The council was under pressure to make the decision Tuesday to take advantage of discounts offered by Oracle Corp. on software and database licensing fees. The discounts, ranging from 60 percent to 75 percent, are set to expire Monday.
Mayor Jim Ridenour said the purchase will bring the city's computer technology out of the "dark ages."
The city can use the new integrated system for budgeting, general ledger, payroll, accounts payable and receivable, purchasing and other functions. Some of those functions are now divided among the various computers.
"This system is something we should have had many years ago," Ridenour said.
The council approved an $893,110 contract with Oracle for an Enterprise Resource Planning System. The city will finance the purchase through Oracle over seven years, with interest ranging from 2.5 percent to 3.9 percent.
It will cost the city an additional $196,485 a year to amend a licensing agreement with Oracle.
Under a $4.65 million contract, Applications Software Technology of Illinois will implement the software system and provide technical support. The council also approved $1.65 million to pay for additional expenses.
Management contract OK'd
In another item, the council approved a $1.2 million contract with Oakland-based VSCE Inc. to oversee construction of a bus maintenance yard for Modesto, because city staff is stretched too thin to manage construction, officials said.
The city hopes to start construction in the summer to replace the 92-year-old maintenance facility at Eighth and Washington streets.
The project, with a total estimated cost of $17.6 million, should be completed in October 2011. The funding comes from federal transit dollars accumulated over the years, staff said.
Bee staff writer Ken Carlson can be reached at firstname.lastname@example.org or 578-2321.