HomeMy WebLinkAbout1994-03-15; City Council; 12629; AUTHORIZE APPROPRIATION OF GENERAL FUND SAVINGS FROM FISCAL YEAR 1992-93 TOWARD CERTAIN CAPITAL EQUIPMENT ITEMS'
AUTHORIZE APPROPRIATION OF GENERAL
FUND SAVINGS FROM FISCAL YEAR 1992-93
RECOMMENDED ACTION:
Adopt Resolution No. qU--&%
capital equipment items.
ITEM EXPLANATION:
Since the recession hit California in 1990, Carlsbad's budget has been stead ly decreasi
despite an increasing population and a never-ending demand for high quality .ervices. TI
has put a severe strain on all City departments as they struggle to continue t I provide t
same level of services to our citizens but at a significantly reduced cost. In or( er to achie
the cost reductions, the City has had to almost eliminate its spending orn c ipital outl;
Over the past three years, the budget for capital outlay has been less than $' 0,000. Pri
to this time, the annual budget was typically in the $500,000 to $600,000 ran: e. The res1
has been that departments have had to make do with old and outdated equj Iment.
Some relief to this problem has been given through the Employees Capit 11 Equipme
Program which the City implemented several months ago. This program all0 vs employe
the opportunity to identify ways in which the City can save time, money o increase t
safety of its employees and citizens through the purchase of capital equipmei it. While tl
program has experienced great success, there is still a large pent-up demai id for cap?
equipment purchases at the department level.
To fill the need for capital equipment and as an added incentive to save mone r for the Ci
a suggestion was made that the departments be allowed to retain some portio 1 of whateL
their department could "save" from their budget during the year to purcha: P the need
equipment. This suggestion was discussed with all of the department ,leads at t
beginning of the 92-93 fiscal year. It was decided then that the suggest 3n would
brought before Council for consideration if the departments were able to reduce thi
budgeted expenditures and there was an overall net "savings" in the General I und as oft
end of the year.
Due to the efforts of all the departments, the City was able to end fiscal ye: c '93 with
excess of revenues over expenditures of approximately $500,000 on a budgeta 7 basis. TI
excess was calculated prior to recognizing the $1.5 million refund from PER: 1 (as this w
an unbudgeted event, it was not considered appropriate to count it as "si rings"). T
$500,000 savings was allocated among the departments based on the amount iaved by ea
department in relation to the total general fund savings. Thus, the depamt nts that we
able to save more shared in a larger portion of the savings.
After the amounts were calculated, each department was requested to submit 3 List of itei
that they would recommend for purchase. This list is included as Attach ent 1 to t
resolution. The guidelines used in developing the list were the same as tho: e used in t
Employee Capital Equipment Purchase Program; that is, the purchase of thl item shot
result in time or monetary savings or should increase the effectiveness or safety of t
employees or citizens.
appropriating $500,000 toward the pureh ise of certa
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PAGE TWO OF AGENDA BILL NO. J a, 6 2 9
In some cases, more than one department contributed to a single piece of equipment I
project. This was the case with the slide-making equipment (requested by both plannh
and engineering) , the color printer (requested by City ManageH's office, Finance, and Hum:
Resources) , the City Hall remodel (requested by Human Resources, Info Systems and U&R
and the financial information system (requested by almost every department).
The City Hall remodel was suggested as a means to provide better security to both recor
and personnel; however, the best method to accomplish this goal has not yet bec
determined. Thus, staff is suggesting that the amount of money requested for this proje
($46,000) be reserved (rather than appropriated) at this time. Staff will continue to revie
the issues and develop a plan to address them. At that time, it will be brought back
Council for review and approval prior to proceeding.
The Financial Information System is the one item which was requested by almost eve
department. As a result, $294,000 of the total $500,000 savings have been directed to tl
purchase of the system. Due to the complexities involved in this purchase, it is discussc
here more fully than the other capital requests.
Financial Information System
Our current financial information system serves every department in the City. It
approximately 10 years old which is considered ancient for computer technology. Due
its basic design and age, the system is no longer able to keep up with the increasing demai
for timely financial information which is vital to the City's management. In addition, Cj
employees are spending an inordinate amount of time duplicating data entry and furth
manipulating the data, all of which should be performed by a computer not an employec
A new financial information system would allow us to have the computer perform a mu1
larger share of the repetitive, boring tasks, thus saving our employees thousands of hou
annually. This time could be spent on other high priority tasks or allow the City
maintain or improve service levels without adding staff. The attached staff report (Exhi1
B) provides numerous specific examples of how a new system would benefit the City ai
an estimate of what those benefits mean in dollars. It also discusses hardware neet
financing options and a brief summary of the steps necessary in selecting and installing
new system.
The first step in the process is to determine what the City needs. This may sound relative
simple; however, as this system is used by every department in the City, determining tl
needs may be the most difficult and crucial step in the process. The analysis will requj
the assistance of a consultant at an estimated cost of $25,000 to $50,000. Once the nee
are determined, they would be written into a request for proposal for the software ai
hardware. Next, the proposals would be reviewed and a system selected. Installation oft
system would follow the selection and may take anywhere from four months to a year
more depending on how much customization is needed to the software and how ma
problems are encountered as the software is installed.
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PAGE THREE OF AGENDA BILL NO. 12; b a?
If Council concurs with the program described above to allocate back to the departmex
the amounts saved in fiscal year 1993; then, staff requests that the amount allocated to t
financial information system be set aside to hire a consultant to assist in the needs analy
(estimated at $25,000 to $50,000) with the remaining funds to be used towards t
purchase of whatever system is selected. Further information on the suggested methods f
financing the system are contained in the attached staff report (Exhibit B).
FISCAL IMPACT:
By adopting the attached resolution, Council would be appropriating or reserving $500,0
from the unreserved fund balance of the general fund for the capital purchases listed
Exhibit 1. The unreserved fund balance is approximately $9 million as of December :
1993. Any equipment request in excess of $25,000 will be put out to bid and brought ba
for Council approval prior to purchase in accordance with the City's ordinances.
Funding for the first step in the purchase of a Financial Information System is also provid
by adopting the attached resolution. Upon completion of the needs analysis, staff WOI
report back to Council with an estimate of the expected costs and the options available.
additional funds are required for the purchase of the system beyond those provided by tl
resolution and the amounts available in the data processing fund ($200,000), they COI
be provided from the unreserved general fund balance.
EXHIBITS:
1. Capital requests by departments.
2.
3.
Staff Report regarding the Financial Information System.
Resolution No. 9 Y -8 Z.
capital equipment items.
appropriating $500,000 toward the purchase of certz
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EXH l Bll 0
Financial
Department lnformatioi
Requests Svstem
CITY ATTORNEY
Total -0- 2,001
CITY COUNCIL
Total -0- 2,001
CITY MANAGER
Color Printer (shared cost with Finance & HR) 1,000 2,00(
CITY TREASURER
Portfolio Management System -0- 5,00(
COMMUNITY DEVELOPMENT ADMIN./BUILDING
Microfilming (Central Files) $1 0,000
Community Development Director 1,900
Postage Meter 7,500
Computer Hardware
Geographic information (200 MG HD) 2,050
Total 21,450 61,55(
ENGINEERING
In-House Slide Making Equipment (cost split with Planning)
486 Computers with Upgraded Memory (5)
LaserJet Printer & PageMaker 15 Printer (1 each)
7,200
8,200
4,600
Total 20,000 5,00(
FINANCE
Typewriter 600
Laser Printer 2,000
Color Printer (shared cost with CM & HR) 2,000
Total 4,600 6,40(
REDEVELOPMENT
Total -0- 13,00(
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CAPITAL REQUESTS BY DEPARTMENT
Page Two
Financial
Department lnformatioi
Requests Svstem
HUMAN RESOURCES
Color Printer (shared cost with Finance & CM)
Remodel of City Hall (with U&M & IS)
500
33,500
Total 34,000 -0
INFO RMATlO N SYSTEMS
Computer Upgrades (3) 6,000
Clerical Chairs (3) 1,500
Remodel of City Hall (with U&M & HR) 500
Total 8,000 -0
LIBRARY
Microfiche Cabinets (3) 1,700 < 700 :
PARKS & RECREATION
Replace Recreation Special Event Supplies Lost in Fire
(allocation could later be reimbursed via insurance) 5,000
Fax Machines (4) 5,000
Computer/Monitor Replacement/Upgrade 1,500
Flail Mower Unit 18,000
Outdoor Play Equipment for Kruger House 5,500
Total 35,000 16,001
PLANNING
In-House Slide Making Equipment (split cost with Engineering) 7,200
Exchange Current B/W Monitors for Color Monitors (1 4) 4,300
Xerox 5028 6,000
Telefax Machine 2,500
2,500
Video Camera 1,000
(plus estimated tax, freight, set-up, etc. for above)
Total 23,500 43,50(
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CAPITAL REQUESTS BY DEPARTMENT
Page Three
Financial
Department lnformatior
Requests Svstem
PURCHASING
Computer 1,500
Lateral 4-Drawer File Cabinet 800
Chair 500
Line Conditioners (4) 800
Anti-Glare, Anti-Radiation Computer Monitor Screens (2) 300
Computer Upgrades (2) 1,200
Total 5,100 10,90(
PUBLIC SAFETY
Color Printer 6,000 59,00(
RISK MANAGEMENT
Insurance Consultant 4,000 4,001
UTILITIES & MAINTENANCE
Confined Spaces Entry Equipment 15,000
Sawdust Collection Equipment 4,000
Paint Storage Cabinet 600
10 Ton Jack 2,700
Transmission Analyzer 2,000
Computerized Mitchell Manuals 5,800
Remodel of City Hall (cost split w/HR & IS) 12,000
Total 42,100 63,901
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September 23, 1993 EXHIBIT
TO: CITY MANAGER
VIA FINANCIAL MANAGEMENT DIRECTOR
FROM: Finance Director
FINANCIAL INFORMATION SYSTEM
This memo is requesting authorization to move ahead with the search for a new financial informatic
system. We have done some preliminary research and now have a plan on how we can achieve the goal
getting a new system selected, purchased and running. The following will give you some background (
why the upgrade is needed and the details of the plan for the selection and purchase.
SOFTWARE NEEDS
Accurate, timely financial information is vital to the efficient management of any organization. Howev
it is even more important when the organization's resources are dwindling rather than growing. This is t
situation here at the City and we have found that our computer systems are not being able to keep up w
the increasing demand for timely financial information. In addition, using current technology to incre;
productivity is one way in which the City may be able to downsize while maintaining or improving sem
levels. Thus, the need to update our information processing systems has come to the forefront.
Our current system (Tamas) is approximately 10 years old. This is an application software system that H
designed primarily as a batch-oriented "bookkeeping" system with certain limited on-line inquiry a
reporting features. Over the past years, the City has made numerous changes to the original softwa
While we are still able to obtain basic information from the system, it has become increasingly labc
intensive. More importantly, the basic batch design of the sohare does not allow the City's departme1
to obtain vital budget and finance information (such as job costing), particularly in an on-line mode.
As the departments have become more computer-literate and sophisticated in their use of computers, t
financial information system has not kept pace with their needs. Our network system has kept up w
current technology, but the City's financial information system has fallen far behind. Due to its fundamen
design, it is not cost-efficient to continue to patch or significantly redesign the current system. Thus, t
purchase of a new system is long overdue.
COST/BENEFITS
The cost to update our systems is considered a one-time expense as it would not need to be repeated fo
number of years (as noted earlier, it has been over 10 years since the last one was purchased). Howet
the benefits we can achieve from it are on-going, year after year, and greatly outweigh the initial cost.
very brief listing of some of the benefits of installing a new financial information system follow:
b Payroll
Our current payroll module has been revised so often that Info. Systems feels we run a real risk of IT
down if any more programming changes are necessary. The Tamas software has not been able
accommodate the constant changes in tax rules and benefit options which has forced many of thl
tasks to be done manually. This translates into higher personnel costs to perform a function tl
should be automated. For example, part time, overtime and comp time balances are not part of 1
system and must be reviewed and input separately from the other payroll input. A new system n
also allow for input by the departments, eliminating the need to ship time books back and fo
between departments.
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September 23, 1993
Page Two
In addition, the payroll system does not spread time by job. Thus, almost every department in the C
is duplicating payroll input in order to track labor distribution to job/work order/etc..
Our system also does not provide on-line access to payroll information by pay period. Thus, when tl
information is needed (court orders, etc.), it must be manually accumulated by going through ha
copy reports for each pay period.
There are numerous other problems with our payroll system which could probably fill a book. A nc
payroll system could satisfy most of the department's requirements and the City could save over 2,51
hours per year, probably more. At an average wage of $15 per hour, this equates to over $37,000 F
year in savings from just the payroll module.
b JobCosting
The Tamas system does not allow for job costing thus many departments have started their own j
cost systems which requires extensive duplication of data (labor as mentioned above as well
payables information) and many hours of staff time.
As part of the financial information software, a job cost system would eliminate many hours
duplicate input. In addition, most grant programs require specific tracking of time spent on th~
program. We have had to do this manually due to the limitations of our systems and run the risk
having some portion of the grant denied due to inadequate bookkeeping systems. A new system WOL
be able to handle the bookkeeping requirements of the grant programs. The job costing module rn
save 400 hours per year equating to $6,000 annually. In addition, this module would provide mc
information to management allowing for increased job efficiency and closer monitoring of our capii
projects expenditures. This benefit is a difficult one to cost out in dollars but is, nonetheless, vc
important.
b Purchase Orders
An integrated purchase order system would allow for less duplication in input, reduced manual lab
in tracking remaining balances and allow all departments inquiry access to the system to review t
changes and balance for any particular purchase order. An estimate of the time savings on this ite
is hard to determine as it involves almost every department; however, I'm sure it would be in excc
of 1,000 hours per year or $15,000.
b Budnet
There are many ways in which budget preparation could be enhanced through the use of an upgrad
system. For one, as departments assemble their budgets, there is presently no way for them to direc
input their budget information into the computer. Thus, they must prepare their budgets, eitk
manually or on the PC, and then send it to finance where it is again manually entered into the bud8
software application on the HP. As the budget software is not integrated into the general lede
system, the same data must be entered one more time into the general ledger application once t
budget is approved.
Integrated software would allow us to enter the information only once (at the department level). Frc
there on, the computer would transfer the data from application to application. This would not or
save time on input but also in error resolution. With only one point of data entry, rather than thrc
the possibility for errors would be greatly reduced.
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September 23, 1993
Page Three
In addition, a new system would allow us to generate summary reports, which are now assembl
using HP data and then downloaded into PC programs. Again, errors occur during this data handli
which must be resolved at each budget revision. aS much as 200 hours ($4,000) of data entry a error resolution time could be saved through the use of an integrated system.
Journal Entries
The Finance Department writes over 1,000 manual journal entries each year. About 50 per month i
standard entries. At least half of these could be eliminated through software interfaces with t
payables/payroll/receivables systems and through the use of auto-journals for recurring journal entr
(approx. 600 hrs. per year or $12,000).
Report Writer
Another feature we would be looking for in a new system is an easy to use report writer so departments could access the system and retrieve information that is vital in managing the day-to-d
activities of the City. Our current system is not user friendly and thus we rely mainly on one individi
to write and produce all management reports. This would save about 160 hours per year of c programmer's time (over $3,000) plus it would allow for more timely information to the departmen
Just these few examples add up to annual savings of over $77,000. There are numerous other areas
which the City could realize substantial time/cost savings and/or increase our collection of reveni
including business licenses, accounts receivable, utility billings, cash management and personnel. In
these areas, substantial time savings could be achieved simply by updating our technology. With the hi
cost of personnel and the greater workload being put on them due to budget cuts, it makes sense to inc
the one-time cost to improve our information systems when the City can recover that cost in increas
productivity in less than five years.
HARDWARE REQUIREMENTS
The current hardware being used for the financial information system, Permits and various other applicatic
is an HP3000 Series 70. This computer is no longer being manufactured by HP and maintenance supp
will not be available after 1995. Due to its age, the number of software packages which will run on it, a
its flexibility in running any programs, is limited.
There are three possibilities for obtaining upgraded hardware for the system. The first is to simply purchi
a new computer to run whatever software package is determined to best suit the needs of the City.
A second option entails combining the planned new computer for the Library with upgrading the financ
system hardware. A new computer is in the budget for the future library in South Carlsbad to be fund
from CFD No. 1. This new computer could be purchased and installed now and would service the currt
library as well as the new library when it is built. This would then free up the library's current compu
for all the other City applications (i.e., Finance, Personnel, Permits, etc.). The library's computer is nev
and more advanced than the current City one and thus, would provide some flexibility to us in selection
the new software.
The downside of using the library's current computer is that it greatly limits the software packages that i
available to us. Rather than letting the needs of the City determine what software and hardware we self
we would have to be happy with whatever we could find that runs on the hardware available.
The third option would be to purchase a new computer that could serve both the City and the Library. 1
old computers could be traded in and, together with the CFD funds, be used to purchase a more power
machine. The main limitation is that the new machine would have to be compatible with the current
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September 23, 1993
Page Four
version of the library's software. The upside to this option is that it may result in operating cost savin
since we would only need to maintain one computer rather than two.
These options would all be considered in finding the most cost-effective method to obtain the optimal syste
for the City.
FINANCING
Software - Based on a very preliminary analysis, the costs of the software would range from $200,000
$500,000. The costs vary according to which modules are purchased and the type of training needed. Un
we perform a needs analysis and determine what software packages best fill those needs, it is difficult
estimate the costs any closer. I anticipate that we would also need the services of a consultant to assist
the definition our needs and in the writing and evaluation of the request for proposals. The estimated cc for consultant services is expected to be in the $25,000 to $50,000 range.
Hardware - The cost of hardware varies significantly depending on the option chosen. As of the end oft
92-93 fiscal year, we have approximately $200,000 set aside in the Data processing fund for the replaceme
of the HP3000 and $69,000 set aside for the library's computer. Also, some cost should be borne by t
enterprise funds for modules that are of benefit to them (i.e. utility billing) and for some portion of the ci
wide modules. Funds may also be available from CFD No. 1 if the solution included the Library's neet
Any additional funds could be appropriated from the general fund reserves which are over $8 million as
June 30, 1993.
IMPLEMENTATION PLAN
The steps necessary to accomplish the above are briefly itemized below:
1. Develop steering committee to oversee process and to determine needs. The committee would cons
of one individual from each department and would be chaired by the Finance Department. TI
committee has been established and was instrumental in developing this report.
Hire consultant to assist in the needs evaluation process. Costs would be kept to a minimum
utilizing our existing staff to do as much of the work as possible. The consultant would act mah
as an advisor and facilitator to the process.
Prepare needs analysis and assess cosvbenefit.
Prepare and distribute RFP for software (and possibly, hardware) package.
Evaluate RFP's, review demonstrations of possible packages, and select software.
Purchase new computer (depending on option selected) and transfer data.
Purchase and install software. Train all personnel on its use.
2.
3.
4.
5.
6.
7.
The process stated above will take at least one year to complete, if everything goes very smoothly. 1
needs assessment and software selection is estimated to take four to six months with installation i
training taking at least another 6 months though training may extend beyond this point.
THE NEXT STEP
The next action step would be to go to Council for authorization to move forward with this project
requesting bids from consultants to assist us in the needs analysis and in the preparationheview of thi
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September 23, 1993
Page Five
request for proposal for the hardwarehoftware. We would then go back to Council at a later date
acceptance of the winning bid and to appropriate the money for the consultant. As this process I
probably take us into early 1994, we would be able to include the purchase of the system in the 94
budget cycle (in the Capital Improvement Program) for Council review. Upon your approval of this pl
I will prepare the initial agenda bill for Council action.
Please let me know if would like any more information. Almost every department has submitted detai
examples of how new software could increase their productivity. I would be happy to share all t
information with you at your convenience. I believe we have the unanimous support of all City departme
in our request to upgrade ow financial information system.
w7 -
,A!-, qd t
LISA HILDAEHUND
LH:emr
c: City Clerk
Software Steering Committee
Finance Department Staff
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RESOLUTION NO. 94-82
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CBRLSBAD, CALIFORNIA, APPROPRIATING $500,000 TOWARD
THE PURCHASE OF CERTAIN CAPITAL, EQUIPMENT ITEMS
WHEREAS, due to budget restrictions, purchases of capital equipment
have been curtailed dramatically since 1991; and
WHEREAS, there is a large pent-up demand for capital equipment by
the departments as a result of the budget reductions over the past few years;
and
WHEREAS, the City has ended the 1992-93 fiscal year with an excess
of revenues over expenditures on a budgetary basis of $500,000 (not
including the PERS rebate) as a result of the efforts by all City departments
to cut down operating costs; and
WHEREAS, a plan has been suggested in which the amounts "saved"
by the departments during fiscal year 1992-93 ($500,000) be utilized to
purchase capital equipment which will save time, money, or increase tht
safety of the City's employees and citizens; and 1
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WHEREAS, the list of requested items is presented in Attachment 1.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the Cit-
of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. That $454,000 is hereby appropriated from the general fun
balance in the amounts and to the capital outlay accounts of the departmen1
as specified in Attachment 1 to this Resolution.
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3. That $46,000 is reserved for the future remodel of City Hall
to increase the security of confidential records and personnel.
4. That staff is authorized to proceed with the selection of a
consultant to assist in the analysis of the City's financial information needs
and the sellection of software and hardware to fulfill those needs.
PASSED, APPROVED AND ADOPTED at a regular meeting of the
, 1994, by the following vote, City Council on the 15th day of
to wit:
MARCH
AYES: Council Members Lewis, Stanton, Kulchin, Nygaard
NOES: None
ABSENT: Council Member Finnil
ATTEST:
ALETHA L. RAUTENKRANZ, City Clerk ' (SEAL) I
* a
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ATTACHMENT
DEPARTMEN
REQUEST6
CITY MANAGER $1 ,OO(
COMMUNITY DEVELOPMENT ADMIN./BUILDING 21,45(
ENGINEERING 20,00(
FINANCE 4,60(
HUMAN RESOURCES 50(
INFORMATION SYSTEMS 7,50(
LIBRARY 1,70(
PARKS & RECREATION 35,00(
PLANNING 23,50(
PURCHASING 5,10(
PUBLIC SAFETY 6,00(
RISK MANAGEMENT 4,00(
UTILITIES & MAINTENANCE 30,l O(
FINANCIAL INFORMATION SYSTEM 293,55(
TOTAL $454,00(
F:\USERS\EROPRWPDATA\MISC\DEIJTSAV2.RN