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Council tables decision on new finance software after contract and fee concerns
Summary
The Lake Elmo City Council on Feb. 18 tabled a proposal to buy new financial software from BS&A after council members and legal staff requested changes to the vendor contract and clearer terms on annual fee escalation.
Lake Elmo’s proposed purchase of new finance software was tabled by the City Council on Feb. 18 after council members and staff identified contract and cost issues that need resolution before final approval.
City staff presented options from three vendors and recommended BS&A for its functionality and modules, including special-assessment workflows the city lacks today. Staff estimated one-time implementation costs around $123,000–$124,000 and noted recurring annual licensing and support fees that would be higher than the city’s current costs. Staff said the investment would replace several standalone systems and spreadsheets, reduce duplicate data entry and provide improved integration for utilities, payroll, HR and records retention.
Council members raised several concerns during the presentation and discussion: indemnification language in the proposed vendor contract, the governing-law clause, and the software’s annual fee escalation provision. One council member pointed to a clause that tied future price increases to the greater of 5% or the change in the Consumer Price Index and urged staff to review that escalation language and compare it to other municipal experiences such as Roseville’s recent conversion.
The council also asked staff to ensure contract revisions and the city attorney’s recommended language were incorporated before execution. The city attorney (who spoke during the meeting) said he had reviewed comments made by Chris Smith and agreed the indemnification language needed to be revised.
With those concerns unresolved, a councilmember moved—and the council seconded—a motion to table the item until a fully agreed-upon contract is available. The council voted to table the purchase; staff said they will work with the vendor to obtain contract redlines addressing the city attorney’s comments and will return with a revised agreement and pricing details.
Staff emphasized reasons for replacement, including audit recommendations to reduce system fragmentation and improve financial controls; council members said they supported the project conceptually but wanted contractual protections and greater clarity on long-term costs before committing.
