REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
December 3, 2024
FROM
CHRIS WILHITE, Assessor-Recorder-County Clerk
SUBJECT
Title
Amendment to Agreement with Tyler Technologies, Inc., for Maintenance and Support Services, and Agreements with Tyler Technologies, Inc., Paymentech, LLC, and JPMorgan Chase Bank for Payment Processing Services
End
RECOMMENDATION(S)
Recommendation
1. Approve Amendment No. 3 to Agreement No. 20-645 with Tyler Technologies, Inc., for additional maintenance and support services of a Land and Vital Records software solution to record, file, and cache documents, increasing the agreement amount by $400,000, from $5,037,286 to $5,437,286, with no change to the term of May 7, 2018, through May 6, 2028.
2. Approve Payment Processing Agreement with Tyler Technologies, Inc., including non-standard terms, for a total term of December 3, 2024, through May 6, 2028, for credit card payment processing software and hardware services and support.
3. Approve Submitter Merchant Agreement with Paymentech, LLC and JPMorgan Chase Bank, N.A., including non-standard terms, for a total term of December 3, 2024, through May 6, 2028, for payment processing instructions and guidelines.
(Presenter: Chris Wilhite, Assessor-Recorder-County Clerk, 382-3208)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Improve County Government Operations.
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). The total not-to-exceed cost for additional maintenance and support services, including the Image Upload Project, eCertification and Vital Access applications, and Tyler Payments service is $400,000. This amount includes chargeback fees, set-up costs, equipment, security protection, and annual maintenance fees. Tyler Technologies, Inc. (Tyler) has agreed to give written notice to the Assessor-Recorder-County Clerk (ARC) of any pricing adjustments regarding merchant or equipment fees. Adequate appropriation and revenue are included in the ARC’s 2024-25 Recorder Modernization budget (3110002340) for initial setup and equipment costs and will be included in future recommended budgets for ongoing annual fees. Minimal chargebacks for card payer disputes and transaction fees will be funded from the Recorder-Clerk budget (3118001000).
Credit card service fees will be paid directly to Tyler by the card holder (customer). Based on historical data from credit card transactions and product sales, Tyler could potentially generate an estimated $350,000 in customer paid service fees in an annual period.
BACKGROUND INFORMATION
The Recorder-County Clerk Division of ARC provides a number of services to the public. The computer software solution called Eagle Recorder that the Recorder-County Clerk began using in September 2019 to record, file, and cache documents has enhanced these services with improved computer operations in the Recorder’s Office when recording documents and maps, as well as indexing, verifying and retrieving documents. In the County Clerk’s Office, the system efficiently issues marriage licenses, birth/death/marriage certificates, and fictitious business names.
On May 1, 2018 (Item No. 14), the Board of Supervisors (Board) approved the County’s participation in Sourcewell (formerly known as National Joint Powers Alliance, or NJPA) Agreement No. 110515-TTI with Tyler, resulting in the approval of Agreement No. 20-645 for the purchase of a Land and Vital Records software solution to record, file, and cache documents and their related information for the Recorder-County Clerk. The agreement amount was not to exceed $3,825,515 for the period of May 7, 2018, through May 6, 2023. The item also authorized the Purchasing Agent to execute documents necessary for participation in the Sourcewell agreement.
On August 11, 2020 (Item No.16), the Board approved Amendment No. 1 to Agreement No. 20-645, for the removal of a Fraud Guard software license and maintenance offered by Tyler in the original agreement and accepted a credit of $48,000. The Board approved for the credit to be used towards funding change orders to make corrections or adjustments to the software solution to ensure optimal operation. All other terms of the agreement remained unchanged.
On April 25, 2023 (Item No.16), the Board approved Amendment No. 2 to Agreement No. 20-645
with Tyler, for maintenance and support services of a Land and Vital Records software solution to record, file, and cache documents, increasing the agreement amount by $1,211,771, from $3,825,515 to $5,037,286, and extending the term by five years, for a total agreement term of May 7, 2018, through May 6, 2028.
When the County went live on the Tyler Eagle Recorder System in September 2019, Tyler’s standard implementation approach included converting only a portion of the existing historical data. The remainder of the data and Images from 1853 - 1957 would be ingested by the County post Tyler implementation. After implementation, the County experienced many challenges with trying to reload these remaining images and data and it was later discovered that there were years of missing, damaged, or incomplete data. US Imaging (USI) was contracted to restore as much historical data from microfiche. The Image Upload Project consists of loading the data into the Tyler Image Server to make the historical data whole.
As part of the implementation of Eagle Recorder in 2019, Tyler offered the Recorder-County Clerk Division the Bridge Pay application for credit card processing, which is facilitated by Automated Merchant Systems (AMS), more recently known as CORE Business Technologies (CORE). In Fall 2023, Tyler announced that they would be moving away from using Bridge Pay for credit card transactions and had purchased a credit card processing vendor whose application would be integrated into Eagle Recorder. The new application called Tyler Payments will replace Bridge Pay and improve credit card processing services for ARC by streamlining business processes and reconciliation through internally processing credit card payments through Eagle Recorder, delivering additional functionality, and no longer requiring the use of a third-party processor like CORE.
Vitals Access provides a user-friendly online portal for customers to request and pay electronically for copies of vital records such as birth, death, and marriage certificates. Vitals Access requests flow seamlessly into a queue for review by Recorder-County Clerk staff to verify identification documentation, print requested document(s), and receipt them. Once complete, the customer will receive an email notification indicating the documentation has been mailed. If the request cannot be fulfilled, the customer will receive an email explaining the issue and instructions for corrective action.
The implementation of the various components of the electronic payment processing software, hardware (e.g., Point of Sale (POS) Terminals), and services with Paymentech, LLC and JPMorgan Chase Bank is in accordance with all rules, regulations, and standards by the Payment Card Industry (PCI) Security Standards Council relating to privacy, data security, and the safeguarding, disclosure and handling of customer account information, including but not limited to the PCI Data Security Standards, Visa’s Cardholder Information Security Program, and MasterCard’s POS Terminal Security Program to provide appropriate security protections and measures for each credit card transaction initiated by customers in a secure, efficient, and effective manner.
E-Certify is a software tool that provides the public with secure online access to the County’s land records. This tool will increase transparency and enable constituents to securely search, download, retrieve and even purchase documents themselves. It will also process requests more quickly, provide more accessibility to constituents, and offer electronic certified copies of documents. The eCertify application will consist of the installation and configuration of a signing certificate. The configuration of Records Public Access will offer eCertify as a purchase option. eCertify will work concurrently with Tyler Payments.
The Tyler Technologies Payment Processing Agreement is its standard commercial license, which contains terms that differ from the standard County contract. The non-standard terms include the following:
1. The county is required to notify Tyler prior to any legally required disclosure and cooperate with Tyler in its efforts to seek a protective order.
• The County standard contract does not require notice.
• Potential Impact: The County will need to be aware of its obligation to notify Tyler prior to any disclosure, including in response to a Public Records Act request. Further, the County is obligated to assist Tyler in its efforts to avoid disclosure under a Public Records Act request, which could create a conflict of interest between the County's compliance obligations under the law and its contractual obligations to Tyler Technologies. In addition, County's assistance is at the County's own expense, which could exceed the contract amount.
2. The Agreement does not require Tyler to meet the County insurance standards.
• The County standard contract requires contractors to carry appropriate insurance at limits and under conditions determined by the County's Risk Management Department.
• Potential Impact: The contract does not include County standard insurance requirements. This means that the County has no assurance that Tyler will be financially responsible for claims that may arise from the County's use of the software, which could result in expenses to the County that exceed the total contract amount.
3. Liability of Tyler to the County for damages arising for the processing agreement is limited to the total fees paid to Tyler under the agreement for the six months prior to the time the liability arose.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Tyler caps its liability to the County at the fees paid to Tyler under the processing agreement for the six months prior to the time the liability arose. Claims could exceed the liability cap and the contract amount leaving the County financially liable for the excess. In addition, the County's liability under the contract is not similarly limited.
4. There is no termination for convenience clause in the Agreement.
• The County standard contract gives the County the right to terminate the Contract, for any reason, with a thirty (30) day written notice of termination without any obligation other than to pay amounts for services rendered and expenses reasonably incurred prior to the effective date of termination.
• Potential Impact: There is no clause in the agreement for termination for convenience without penalty. Upon any termination by either party regardless of cause, the County could be required to pay penalties, which could result in payment liability where no funds are available due to lack of allocation or loss of funding.
The Submitter Merchant Agreement with Paymentech, LLC and JPMorgan Chase Bank is its standard commercial license, which contains terms that differ from the standard County contract. The non-standard terms include the following:
1. The Agreement does not require JPMorgan Chase to meet the County insurance standards.
• The County standard contract requires contractors to carry appropriate insurance at limits and under conditions determined by the County's Risk Management Department.
• Potential Impact: The contract does not include County standard insurance requirements. This means that the County has no assurance that JPMorgan Chase will be financially responsible for claims that may arise from the County's use of the software, which could result in expenses to the County that exceed the total contract amount.
2. The Agreement is silent on governing law.
• The County standard contract requires California governing law.
• Potential Impact: The contract is silent on governing law. This results in uncertainty over which state's laws will govern the interpretation of the contract, and leads to ambiguity in interpretation of the contract terms. JPMorgan Chase is a corporation based in the State of New York. The contract could be interpreted under any state law depending on where the claim is brought, including New York or California. Any questions, issues or claims arising under this contract could require the County to hire outside counsel competent to advise on the applicable state law, which may result in fees that exceed the total contract amount.
3. There is no stated venue in the Agreement.
• The County standard contract requires venue for disputes in Superior Court of California, County of San Bernardino, San Bernardino District.
• Potential Impact: Contractor is located in New York. Having no express venue in the contract means that a New York venue could be applied to this contract, which may result in additional expenses that exceed the amount of the contract.
4. The Agreement does not require JPMorgan Chase to indemnify the County, including for intellectual property infringement claims.
• The standard contract provision for intellectual property indemnity is: Contractor will indemnify, defend, and hold harmless County and its officers, employees, agents and volunteers, from any and all third-party claims, costs (including without limitation reasonable attorneys' fees), and losses for infringement of any United States patent, copyright, trademark or trade secret (Intellectual Property Rights) by any goods or services. The County standard contract general indemnity provision requires the Contractor to indemnify, defend, and hold County harmless from third party claims arising out of the acts, errors or omissions of any person.
• Potential Impact: JPMorgan Chase is not required to defend, indemnify or hold the County harmless from any claims, including indemnification for claims arising from JPMorgan Chase’s negligent or intentional acts and intellectual property infringement. If the County is sued for any claim, including intellectual property infringement based on its use of JPMorgan Chase's software or services, the County may be solely liable for the costs of defense and damages, which could exceed the total contract amount. County Counsel cannot advise on whether and to what extent New York law may allow the County to require JPMorgan Chase to defend or indemnify it absent an express provision in the contract.
Approval of the Amendment and Agreements, including non-standard terms, will allow the ARC to improve County government operations and operate in a fiscally-responsible and business-like manner by implementing an Image Upload Project that will enable the County to search, access, and review all historical data; implement new eCertification and Vitals Access applications, and facilitate a new credit card processing service called Tyler Payments to streamline processes.
PROCUREMENT
Tyler was the awarded contractor for Public Sector Administrative-Related Software Solutions and Technology Service by Sourcewell following a competitive Request for Proposal (RFP) process, completed in November 2015, that was reviewed for compliance with County procedures. Sourcewell is a national public service agency offering government agencies access to competitively awarded cooperative contract purchasing solutions through industry-leading vendors. As a member of Sourcewell, the County had the opportunity to participate in this awarded contract (Agreement No. 110515-TTI).
The Purchasing Department staff recommended participation in the Sourcewell contract to save time and the expense of conducting an RFP process for the purchase of a Land and Vital Records software solution, and the Recorder-County Clerk realized a significant benefit in terms of training, expertise, and compliance by having the same recording system that a significant portion of its counterparts in other California counties also have. As a result, on May 1, 2018 (Item No. 14), the Board approved County Agreement No. 20-645.
Purchasing continues to support this non-competitive procurement based on equipment compatibility. The recommended amendment is being brought to the Board for consideration at this time because County Policy No. 11-04 requires departments to obtain Board approval of the procurement of services over $200,000 annually.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Kenneth Brown, Deputy County Counsel, 387-5455) on November 1, 2024; Purchasing (Jessica Barajas, Supervising Buyer, 387-2065) on November 6, 2024; Risk Management (Gregory Ustaszewski, Staff Analyst II, 396-9008) on November 6, 2024; Innovation and Technology (Robert Pittman, Chief Information Security Officer, 388-5510) on November 6, 2024; Finance (Penelope Chang, Administrative Analyst, 387-4886) on November 8, 2024; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Office, 387-5423) on November 15, 2024.