HomeMy WebLinkAbout2025-04-22; City Council; 06; Update on the status of the Information Technology Core Systems ModernizationCA Review AZ
Meeting Date: April 22, 2025
To: Mayor and City Council
From: Geoff Patnoe, City Manager
Staff Contact: Doug Kappel, Information Technology Manager
doug.kappel@carlsbadca.gov, 442-339-2791
Rachel Muller, Senior Project Manager
rachel.muller@carlsbadca.gov, 442-339-5746
Subject: Update on the status of the Information Technology Core Systems
Modernization
Districts: All
Recommended Action
Receive an informational report on the modernization of Information Technology’s core systems.
Executive Summary
In January 2020, the City Council approved a long-term plan to modernize how Carlsbad uses
technology—making internal operations more efficient and public services more accessible.
This plan marked a significant shift in how the city prioritizes and funds technology investments,
recognizing that digital infrastructure is just as essential as physical infrastructure for the city’s
high-quality services. Technology projects are now prioritized based on need and funded through
a dedicated technology capital investment fund.
The Core Systems Modernization Project – which was included in the City Council’s 5-Year
Strategic Plan and in recent city budgets as core systems consolidation – is the next major step in
this transformation to create a one-stop-shop for the city’s core business functions.
Like many organizations, Carlsbad has relied on a patchwork of digital tools to manage such key
operations as accounting, human resources and utility billing. Many of these systems, developed
by niche vendors, do not integrate well, preventing seamless data exchange and automation of
routine processes. Additionally, these vendors often fall short in maintaining their products to
meet the city's evolving standards for quality, security and efficiency.
For these reasons, 12 of the 18 cities in San Diego County have moved or are in the process of
moving to a single platform that can perform these core business functions. Consolidating these
systems improves efficiency, enhances security and creates a more user-friendly experience for
both staff and residents.
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Funding has been set aside for this project, and staff have selected vendors that meet the city’s
needs at the best value to taxpayers. The vendor contracts are being finalized and are to be
presented to the City Council for consideration later this spring.
Because this project requires a significant investment in staff time and other resources, staff have
prepared this report to provide an opportunity for the City Council to learn more about what is
proposed and its benefits.
Explanation & Analysis
As technology advances, the world has become more online, mobile and interconnected. While
technology increases our ability to be more connected and efficient, it also increases the risk of
interruptions from technical issues and cybersecurity threats. In this new technology driven
environment, the need for cities to be strategic about implementing secure digital tools and
services has become more important than ever.
The City of Carlsbad has adopted many digital solutions to shift manual or analog processes to
digital applications. Digital solutions improve efficiency, support robust internal controls, reduce
errors and provide for enhanced customer service. In the past, the city selected and adopted these
solutions based upon the business needs of individual departments rather than from a citywide
enterprise perspective. The outcome of this siloed approach is a combination of applications that
are not designed to work together and are based on outdated technology that do not meet the
city’s business needs.
Carlsbad recognized the need to take a more strategic approach to its technology portfolio over 10
years ago and began transforming its approach by:
Consolidating technology positions in city departments into a centralized Information
Technology Department.
Establishing best practices for how the city manages and prioritizes technology
investments, through the establishment of the Strategic Digital Transformation Investment
Program (SDTIP).
Hiring a cybersecurity specialist, establishing protocols for cybersecurity testing,
developing a disaster recovery plan and conducting regular cybersecurity training for all
city employees.
Developing a strategic technology improvement plan that guides long-term investments in
the city’s digital infrastructure, like how the city plans for major physical infrastructure
needs.
Investing in technology improvement through the establishment of the Technology Capital
Investment Fund.
Keeping existing core systems functioning while working toward an integrated citywide
technology platform.
The city currently has seven separate and standalone systems that are used to support our
business functions for administrative operations. These systems were implemented between
1997-2010. Although they have received numerous upgrades over the years, these applications
still lack essential functionality and require extensive manual workarounds to meet the city’s
operational needs. The systems also require significant ongoing maintenance and troubleshooting
by city staff, and the software vendors are frequently unable to provide a timely resolution for
system issues.
April 22, 2025 Item #6 Page 2 of 7
The city hired a consultant in 2016 to analyze the state of the city’s core business processes and
technology and provide a needs assessment report. That report recommended consolidating
existing systems into a citywide centralized platform, commonly referred to as an enterprise
resource planning solution. Since then, the city has been making significant investments in
technology and planning for the best IT solutions.
The enterprise resource planning solution staff are proposing would significantly modernize and
improve the efficiency of many of the city’s business processes. One example is the annual
development, approval and publishing of the city’s budget, which is currently managed and
published with manually managed spreadsheets, text documents, GIS maps, and data extracted
from our legacy Finance system.
Snapshot of the current budget process:
All departments citywide submit proposed budget requests using Microsoft Excel
spreadsheets, which are uploaded into our Finance system
Finance team exports the budget data from our Finance system into Microsoft
Excel spreadsheets to analyze and forecast budget projections, identify potential
gaps and various scenarios, and reallocate funds to create a balanced budget
proposal
Finance, Public Works, and Information Technology departments use a
combination of data exported from the Finance system and a web-based
spreadsheet program to plan for and propose Capital Improvement Project (CIP)
expenses
After a balanced budget is approved by the City Council, Finance uploads the
budget data from spreadsheets into our Finance system and works with
Communications to create and publish the budget book in Microsoft Word,
which is then presented to the public
Information Technology works with Public Works and Communications to
develop a public-facing map of approved Capital Investment Program projects
and budgets
April 22, 2025 Item #6 Page 3 of 7
Neither the Human Resources nor Finance systems have the ability to complete the complex
calculations related to personnel budgeting. As a result, information from both systems must be
exported, processed through a series of scripts developed by city IT staff, which is then exported
to Excel for analysis.
The solution proposed by city staff will eliminate the need to repeatedly export and import data
between our Finance system, Human Resources system and Microsoft Excel spreadsheets and
instead leverage a budget management application designed to manage city budgets.
April 22, 2025 Item #6 Page 4 of 7
While saving significant staff time and resources, this project also benefits the community, with:
A significantly improved utility billing portal, which is more secure, easier to navigate, and
provides enhanced transparency around water usage over time including water leak
notifications
A public interface that provides additional visibility and transparency into the city's
finances
Other cities and special districts in the region that have also recognized the need for such a
centralized platform and have been successful in implementing one include the cities of Chula
Vista, Coronado, El Cajon, Encinitas, National City, Oceanside, Poway, San Diego, San Marcos,
Solana Beach, Vista and Escondido, as well as the County of San Diego, the San Diego Association
of Governments, the Encina Wastewater Authority and the Helix and Otay water districts. The City
of Del Mar requested proposals for an enterprise resource solution in September 2024.
City of Carlsbad’s approach
In January 2020, the City Council approved Connected Carlsbad: An Inclusive Smart Community
Roadmap. One of the goals identified on the roadmap was to “Modernize and Strengthen IT
Infrastructure,” which included an initiative to evaluate the transition to an Enterprise Resource
Planning (ERP) system. This was followed up with a report that was presented to the City Council
in January 2020 that outlined a strategic approach to digital transformation. This report, and the
associated Application Portfolio Strategic Plan, further outlined the need to implement an
integrated citywide technology platform.
In 2022, the City Council released its five-year Strategic Plan for 2023-2027 and included the
consolidation of core systems as a priority project to support Goal 5: Organizational Excellence
and Fiscal Health.
April 22, 2025 Item #6 Page 5 of 7
To date, the City Council has approved an appropriation of $5.4 million from the
Technology Capital Investment Fund as part of a Strategic Digital Transformation
Investment Program project to consolidate and replace core systems.
This budget was requested and appropriated to prepare for and allocate funding for this
priority project.
An additional $4.6 million was outlined as a future technology fund request with $3 million
to be part of the FY 2025-26 Strategic Digital Transformation Investment Program budget
and $1.6 million to be part of the program’s FY 2026-27 budget.
To meet the strategic plan goal,
City staff formed a selection committee that included representatives from Finance,
Human Resources, Utilities and Information Technology.
The selection committee worked with a consultant to complete an in-depth process to
document business needs and requirements in 2022.
Staff used these requirements to develop a request for proposals that was released in
2023.
The selection committee evaluated 12 responses and selected four finalists for multi-day
product demonstrations and met with twelve agencies for comprehensive reference
discussions.
In 2024, the selection committee unanimously selected the solutions that will be brought
to the City Council for approval later this spring.
The city is now ready to make the next major step on its digital transformation journey by
implementing a modern enterprise resource planning platform that will streamline the
administrative functions the city depends on for its day-to-day work.
Staff are finalizing the contracts and will be returning later this spring to request the City Council’s
approval of the project budget and authorization to execute contracts with the selected vendors.
and, if it is approved in early spring 2025, staff are projected to complete the project by the end of
2026.
Strategic planning
The project to implement the new centralized platform will be funded with the money previously
set aside in the Technology Capital Investment Fund, as has been the case with past technology
projects. One of the earliest examples of this is the Carlsbad Digital Information Network, a project
approved by the City Council in late 2019 that enabled quick and reliable network and internet
access for staff as well as high speed internet at city libraries and other facilities for community
members. Although completing that project required a significant investment of funds, the money
had been set aside, and no money was taken from the General Fund.
Fiscal Analysis
The $10,000,000 overall cost of the project includes:
$5,395,679 for professional services
$1,984,914 for the first two-years of subscription costs
April 22, 2025 Item #6 Page 6 of 7
$1,919,407 for temporary staffing to assist with the project’s workload.
A $700,000 contingency fund
Of the total, $5,400,000 has already been appropriated by the City Council in the Technology
Capital Investment Fund as part of the Strategic Digital Transformation Investment Program
budget process.
Staff are not requesting additional funds for the project at this time. The additional $4.6 million for
the project has already been planned for and sufficient funds are available in the Technology
Capital Investment Fund. Staff will ask the City Council to appropriate the funds for this project
during the annual Strategic Digital Transformation Investment Program budget process over the
next two fiscal years as part of the annual budgeting process.
Next Steps
Staff will return to the City Council as soon as possible to request approval of the associated
agreements and for the additional technology fund appropriations through the annual budget
process.
Environmental Evaluation
The proposed action is not a “project” as defined by CEQA Section 21065 and CEQA Guidelines
Section 15378(b)(5) and does not require environment review under CEQA Guidelines Section
15060(c)(3) and 15061(b)(3), because the proposed action to report on the status of Consolidating
City Administrative Software Systems into a Centralized Citywide Enterprise Resource Planning
(ERP) System is an organizational or administrative government activity that does not involve any
commitment to any specific project which may result in a potentially significant physical impact on
the environment. Any subsequent action or direction stemming from the proposed action may
require preparation of an environmental document in accordance with CEQA or CEQA Guidelines.
Exhibits
None.
April 22, 2025 Item #6 Page 7 of 7