I.T. for local city governments

Jul 3, 2012 · Comments
FailServersUncategorized

I recently took part in an historic vote to form a new city called Peachtree Corners in Georgia where I live. The city was sold to us as a “city-lite” that would only perform 3 services, which was the minimum allowed by Georgia law. In fact, the new city would only concentrate on zoning, trash pickup, and code enforcement.

I don’t know much about many of the challenges that our newly elected officials will face, but I do know something about the I.T. budget that they are proposing and I was shocked at how much money was allocated to I.T. capital expenditures. Here is what they propose:

Prof Svcs-Call Center	$100,000
Professional Svcs- Start-up Assistance	$75,000
Prof Svcs- Comprehensive Plan	$100,000
Prof Svcs- Communications	$70,000
IT Equipment & Licenses	$100,000
Prof Svcs- IT Services	$30,000
Prop/Liab Insurance	$7,650
Working Capital Repayment – TAN	$500,000
Office Equipment	$35,000
TOTAL EXPENDITURES	$1,017,650

Please keep in mind that this is just a portion of a budget proposed to provide I.T. services for 2 full time employees, 6 volunteer city council members, and a part-time mayor. This means that if we look at a cost per user, in this budget we are looking at a total I.T. expenditure in the first year of $165,000 (Equipment + Services + Office Equipment).

I.T. as CapEX = BAD

If we assume that this equipment is amortized over three years, like is often done in business, and the $30,000 service expense happens every year, we are looking at a yearly I.T. expense of $75,000.

So for 9 users, this equates to an I.T. expense of $8,333 per user, per year. This is outrageously expensive.

$8,333/user/year = REALLY BAD

In an era where enterprise grade group-ware can be had for $50-70 per user, per year, there is no excuse for this sort of capital expenditure and is a sign of “behind the times” thinking. I suspect that this plan originated with consultants hired by the mayor and the council members. I suspect the consultant simply regurgitated the plan that they used five or ten years ago. Today, though, it is no longer good enough.

I.T. Services are always the latest version!

With the opportunity to start from a clean slate, our new city could be a model of efficiency and set the tone for other forward thinking local governments. Imagine with me if the plan looked more modern. Maybe something like this with the capital expenses amortized over three years and broken down into monthly costs to make it easier to compare to the services:

	Service	Cost per Month
	Google Apps w/ Advanced Security	$90
	13” MacBook Air w/ AppleCare 3yr	$42
	Office Equipment (router + MFC)	$17.5
	iPhone 4	$25
	Talk and Data (4000m + 5gb)	$1800
	Business Class Internet + Phone + TV	$100
	Total Per Month	$2074.5
	-per user	$230.5
	Total Per Year	$24894
	-per user	$2766

This gets us down from $8,333 per user, per year, to $2766 per user, per year. I think this is much more reasonable, and not the best case scenario. I have allocated for an extremely generous amount of voice and data usage on the mobile phones. I think in reality the mobile voice and data usage will be much less and they can be significantly reduced from the projected amounts. The voice minutes and the data megabytes are pooled together and once we have an idea of what usage will be, the plans can be adjusted down.

I.T. as Services (OpEX) = GOOD

Consider the point that this illustrates. The new paradigm in IT is Services rather than the old paradigm of Infrastructure. Services are flexible and adjustable on a moments notice. Infrastructure is inflexible and rigid. Services would allow the city to change vendors if the service was sub-par. If the city hosts its own email server, and the money has already been spent, we are all just going to have to live with it.

I.T. Services are Flexible

This shift in thinking can be applied to other areas of the budget also. The other most striking example of over-spending is in the amount budgeted for the call center. Let’s examine what $100k could buy the city in 24/7/365 call center operations. First let’s assume that the city selects one of the most expensive pay-per-minute call centers in the nation, and that the rate is $3/min. That would buy the city 33,333 minutes of calls into the center. That’s 555 hours of a caller talking to a call center operator or 10.5 hours per week.

If the call center took and average 5 minutes per call to greet the caller and either answer the caller’s question from the FAQ or direct them to the city manager or assistant. This would give the call center the budget to handle 128 calls per week and 512 calls per month. For a non-technical call center, it’s more likely that a rate of $1/min could be found. This would triple the calls per week to 384 and calls per month 1,500+.

Now lets assume that the call center does not operate 24/7/365. Let’s assume that it operates from 8am to 5pm, like all other government call centers. We don’t take calls on weekends or holidays. There are 540 call minutes in an 8-5 workday. We have a budget for 76.8 calls per day, that’s 384 call minutes or 6.4 hours per day. Is this realistic?

Do we really need 6.4 HOURS of operator time every day?

When talking about costs like this it is critical to engage a call center company that provides this as a service. I think it is seriously unlikely that the city that only provides, zoning, code enforcement, and garbage collection will take this volume of calls. I say this considering that the garbage collection will account for the largest volume of calls because it affects everyone. However, the trash collection company handles the customer service inquiries for their own services, relieving the city of that responsibility.

I don’t wan’t the new city to start its life with an already aging I.T. infrastructure that locks us all into radically high payments for years to come.