The data presented in the article provides compelling evidence that the answer is yes -- i.e., the migration's recurring savings exceed its upfront costs:
* The city no longer has to pay for license upgrades, thereby eliminating a major recurring cost forever -- savings of nearly 3 million pounds every three to four years, according to the article. That's huge.
* The city no longer has to upgrade desktop software or hardware as frequently, reducing another recurring cost forever -- also huge.
* Most surprisingly, the city claims its IT department is fielding considerably fewer user complaints with Linux than with Windows, reducing another major cost forever. Labor-intensive IT support is always the costliest component of operating a corporate desktop, so that's also huge.
If the recurring cost savings claimed by the city of Munich are accurate, every budget-strapped city in the planet should be seriously considering this kind of migration to desktop Linux. It makes a lot of sense purely from a financial standpoint.
[UPDATE: I toned down the language and corrected key figures, which were off by an order of magnitude due to an incorrect reading of the article. I also materially changed the bullet point regarding support costs, as the article itself was slightly misleading on the matter. THANK YOU Xylakant and luser001 for pointing out my errors!]