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APPROVE A MOTION AUTHORIZING HYLAND ONBASE HOSTED SOLUTION AGREEMENT WITH NAVIANT, LLC.
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Authorize the City Manager to execute an extension of the Hyland OnBase Online Hosted Solution Amendment Agreement with Naviant, LLC, extending the term through December 31, 2026, with two (2) optional one-year renewals in the amount of $96,954, for the extension, with a total contract amount of $1,110,166.14, effective April 1, 2026, through December 31, 2028. (Attachment A)
2. Approve findings for an exception to the competitive bidding process; and
3. Authorize the City Manager, or designee, to take necessary and appropriate actions to carry out the purpose and intent of this motion.
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Summary
Six departments use OnBase for electronic document storage and retrieval (City Clerk, Administrative Services, Public Works, Economic Development, Municipal Utilities and Community Development). The OnBase software stores digital copies of invoice payments, checks, procurement requisitions, contracts, permits, drawings, plans, etc. The City invested in a more comprehensive and strategic approach to electronic document management, utilizing the new Tyler Munis ERP document management system for financial documents. However, the need persists for storing historical records or ongoing usage for documents such as permits, drawings, plans, and other non-financial records.
Staff recommends continuing with Naviant, LLC as the single source for the OnBase solution through December 31, 2026, with two (2) optional one-year extensions, at a total contract amount of $1,110,166.14, effective April 1, 2026, through December 31, 2028, with $96,954 for the extension. Also recommended is the implementation of a new pricing structure effective April 1, 2026, reducing the monthly cost for hosted imaging services and administration from $16,886.87 to $10,772.66.
DISCUSSION
Background
Six departments (City Clerk, Administrative Services, Public Works, Economic Development, Municipal Utilities, and Community Development) use OnBase to image, store, and retrieve documents and historical records. This software solution is purchased through Naviant LLC, a reseller of Hyland OnBase Online.
An agreement with NEKO Industries to provide imaging and hosting solutions was first approved in 2006 under Resolution 06-0409 and extended by Resolutions 07-0420, 08-0240, 09-0179, 09-0369, and 10-0365, and later Motions 2014-04-01-1201, 2015-03-24-1203, 2017-06-20-1104, and 2020-06-09-1106. The hosting contract with NEKO was extended in 2015, 2017, 2020, and 2021 to maintain critical business functions and continue examining other document management systems and collaborative software as a long-term solution. In June 2021, the City brought a new five-year contract to Council for approval, which marked the start of the current agreement, through Motion 2021-06-22-1207. The current agreement with Naviant, LLC, expires on June 30, 2026.
Naviant, Inc. acquired NEKO Industries effective October 1, 2021, and subsequently changed its name from Naviant, Inc. to Naviant, LLC on December 11, 2024.
The City has implemented a new ERP system that will reduce the storage requirements and investment needed for a document management system such as OnBase, but it does not eliminate the need for storing historical records or ongoing usage for storing permits, drawings, plans, and other non-financial records.
Present Situation
The most recent agreement with Naviant expires on June 30, 2026. Staff is recommending that Council adopt findings to support an exception to the competitive bidding requirements for a sole-source purchase agreement with Naviant, LLC., effective April 1, 2026, through December 31, 2028. This amendment provides a new payment term and cost structure, reducing the monthly cost from $16,886.87 to $10,772.66 for hosted imaging services and fixed-cost storage fees. This results in estimated savings of approximately $55,000 for Year 1 and potential total cost savings of $176,000 through December 31, 2028, if the City exercises the two (2) optional one-year renewals.
Approval of the agreement with Naviant, LLC will ensure the City’s current hosted document management system is licensed and maintained.
Findings:
Stockton Municipal Code section 3.68.070.A.4 provides an exception to the competitive bidding process for sole-source vendors in cases where the City Council has approved findings that support and justify the exception. The findings are as follows:
1. The city has a continued need for an electronic document management system for a wide variety of documents that include financial and non-financial documents.
2. An agreement with Naviant, LLC (formally NEKO Industries) to provide imaging and hosting solutions was first approved in 2006, purchased under a cooperative purchasing agreement through the State of California’s Master Services Agreement (Resolution Numbers 06-0409, 07-0420, 08-0240, 09-0179, 09-0369, and 10-0365) and later through the County of Sonoma (Motion Numbers 2014-04-01-1201, 2015-03-24-1203, 2017-06-20-1104, and 2020-06-09-1106). Lastly, with Motion 2021-06-22-1207 as a sole source.
3. Naviant is the only authorized distributor in Northern California for the Hyland OnBase software system. Naviant is the only vendor that offers maintenance, service, and support for the Hyland OnBase solution.
4. The purchase of Hyland OnBase Online Hosted Solution is required for business continuity of six City departments (City Clerk, Administrative Services, Public Works, Economic Development, Municipal Utilities, and Community Development) that currently use OnBase to image and retrieve documents.
5. The solution is cost-effective compared to other solutions, and due to its extensive integration with existing City systems, it is cost-prohibitive to switch to a different solution.
FINANCIAL SUMMARY
The amendment increases the Not to Exceed amount to $1,110,166.14, which includes an additional $96,953.94 for the extension through December 31, 2026. Monthly services will be billed at $10,772.66 effective April 1, 2026.
If the City exercised the two (2) optional one-year extensions, the contract amount would increase by $284,298.04, bringing the total potential contract amount to $1,394,464.18, effective April 1, 2026, through December 31, 2028 (see Table 1 for pricing by year).
Table 1: Pricing for Services from April 1, 2026, through December 31, 2028
|
|
FY 2025-26 |
FY 2026-27 Optional |
FY 2027-28 Optional |
Total |
|
Hyland OnBase Hosted Solution |
$96,953.94 |
$137,674.59 |
$146,623.45 |
$381,251.98 |
There is sufficient FY 2025-26 budget in the Technology Internal Service Fund account 3020-000-630006-510-511. Future annual costs will be included in the annual budget development approval process.
Attachment A - Naviant Multiple Year Renewal Agreement