Rio Rancho council hears two-year, $7.4 million ERP implementation plan and discusses funding options

Director Yara told the Rio Rancho City Council that the city plans to implement a centralized enterprise resource planning system to replace its current collection of separate finance, permitting and utility systems. "ERP stands for enterprise resource planning," Director Yara said, describing the software as "a single database of information that all of those modules and functions can access in real time."

The presentation said implementation and design costs for the first two years are $7,400,000. Director Yara said $5,500,000 of that amount is already in the capital budget, leaving an approximate $1,900,000 shortfall the council must identify before the city can award a contract. "We are currently negotiating with the [vendor]," Director Yara said, and staff recommended awarding a contract only when full funding is identified so payments can be tied to implementation milestones.

Why it matters: Councilors and staff said the ERP will centralize finance, human resources, permitting, utility billing and other modules; they said it should reduce redundant data entry, improve reporting, and enhance customer-facing service over time. Staff estimated the implementation will take roughly two years for build-out, testing and go-live and emphasized ongoing licensing and vendor support will create a long-term relationship with the vendor.

Council discussion focused on how to cover the $1.9 million gap without unduly affecting utility rates or the city's reserve policy. Director Yara presented three funding options: use fund balance in the general fund and utilities fund (an 80/20 split, per staff), re-appropriate money from a strategic initiatives account, or repurpose construction funds on Unser Boulevard that staff expect to be reimbursed by a grant. Staff said taking the $1.9 million split 80%/20% would reduce the general fund reserve from 26.1% to 24.3% against a 25% policy target and reduce utility days of cash from about 86 to 81 (the utility target was described as 90 days).

Several councilors said they did not want to draw heavily from the utilities fund in a way that would drive rates higher. Councilor Tyler said he was "not comfortable taking the money from utilities or any of the current projects that are underway." Other councilors said they would accept a partial utility contribution and favored a proportional approach: "If we were going to take money from the utility, maybe not the entire 1.86, but what would the percentage of operational usage from the utility be on the ERP?" Mayor and council members discussed a blended approach and asked staff to return with a budget adjustment and any necessary policy variance so the contract could be awarded once funding is secured.

Staff also described technical and implementation choices: the vendor recommended loading two years of active data into the new system and placing older legacy records into a data lake that will remain accessible by query. Director Yara warned against heavy customization that could prevent future updates and noted typical implementation risks: high upfront costs, staff resistance to change, vendor dependence, and data-security requirements. She said staff recommended DLT Solutions as the preferred vendor after a competitive RFP and finalist presentations, and that DLT would act as the prime contractor coordinating subcontractors.

No formal council vote was recorded during the discussion. Councilors and staff agreed they need funding identified before executing and paying under contract and directed staff to return with the recommended budget adjustments and contract for formal action.