Staff recommends the City Council award a contract to Fifth Asset, Inc d/b/a DebtBook, in the amount of $15,000 annually.

The City of Billings is required to issue financial statements that are compliant with all statements issued by the Governmental Accounting Standards Board (GASB). GASB Statement 87 requires governments to change the accounting and reporting for leases. The Statement requires recognition of certain lease assets and liabilities for leases that were previously classified as operating leases and recognized as inflows of resources or outflows of resources based upon the payment provisions of the contract. Under this Statement, the lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. This is a significant change from how leases were accounted for in prior years. 

The Finance Department was aware of this upcoming change, and anticipated that a software solution would be needed to provide the necessary tracking and accounting entries needed to comply with GASB Stmt 87. The Finance staff began reviewing software solutions in 2021. Based upon the implementation assistance, positive customer references, user interface, and additional debt tracking features, DebtBook was the selected solution for the City of Billings. 

Pursuant to the City's Purchasing Procedures, a cooperative purchasing contract was identified through the National Cooperative Purchasing Alliance allowing the City to forgo a full RFP process in this instance.

City Council may:

• Approve the contract with Fifth Asset Inc, d/b/a DebtBook; or,
• Not Approve the contract. If the contract is not approved another solution will need to be identified. Other options could include a private contract with an accounting firm, another software solution, or possibly additional personnel costs.

The FY22 budget for the Finance Department included $80,000 for the anticipated cost of purchasing and implementing a software for GASB 87 compliance. The first year cost of this contract is $15,000 and will reoccur annually if the City chooses to continue utilizing this software, and remains in the same pricing tier. Unspent budgeted funds in FY22 would remain in General Fund. Because the Finance staff anticipates using this software for multiple years, the total life of the contract will exceed the signing authority of the City Administrator, and Council approval is recommended.