SUPPORTS ITEM NO. 5
CS&B COMMITTEE AGENDA
MARCH 28, 1996
ADMINISTRATIVE REPORT
Date: March 18, 1996
Dept. File: 96IMAGE
TO: Standing Committee on City Services and Budgets
FROM: General Manager of Community Services, in
consultation with the Corporate Management Team
and the Imaging Steering Committee
SUBJECT: Acquisition of a Document Imaging/
Management System
RECOMMENDATION
A. THAT Council approve the acquisition of a Document
Imaging/Management System with financing by way of
a loan of up to $2,820,600 from the Capital
Financing Fund (Solid Waste Capital Reserve), on
terms and conditions as determined by the Director
of Finance.
B. THAT Council award the contract for design, supply
and implementation of the first stage of a Document
Imaging/Management System at a cost not to exceed
$2,307,900 including all applicable taxes; and a
one-time software and hardware maintenance contract
for 1996 at a cost of $68,857 including all
applicable taxes, to Andersen Consulting; and
FURTHER THAT Council instruct the Director of Legal
Services to execute a contract with Andersen
Consulting on terms and conditions to the
satisfaction of the General Manager of Community
Services.
C. THAT Council approve funding for renovations,
furniture and equipment at an estimated one-time
cost of $100,500.
D. THAT Council approve one-time funding for staff
technical training at an estimated cost of $35,500.
E. THAT Council approve the establishment of a
Transition Team consisting of 3.40 F.T.E. of
temporary full-time positions for up to 1 year,
subject to job evaluation by the General Manager of
Human Resource Services, for the design and
implementation of the system, at an estimated one-
time cost of $159,000.
F. THAT Council approve the establishment of a regular
full-time system administration position in Permits
& Licenses and 1.25 F.T.E. of support positions in
Information Services, subject to job evaluation by
the General Manager of Human Resource Services, to
provide on-going support and maintenance of the
system, at a 1996 estimated cost of $38,900 and an
estimated annual cost of $124,000.
G. THAT Council approve the methods for repayment of
the Document Imaging/Management System Loan as
follows:
i) $500,000 of savings from the existing
Community Services Business Group operating
budgets beginning in 1999. The General Manager
of Community Services will report back before
December 31, 1998, on the specific source of
these savings; and
ii) Increases in Trade Permit fees of 2% beyond
the normal inflationary increases recommended
annually by the Directors of Permits &
Licences and Finance in each of 1997 and 1998.
These increases will generate an additional
$200,000 of revenue in 1997 and a further
$200,000 in 1998, for a total on-going
increase of $400,000 from the 1996 level.
GENERAL MANAGER'S COMMENTS
The General Manager of Community Services notes that
there are some risks involved in the financing plan
proposed for the Document Imaging System in that specific
cost savings cannot be identified at this time. However,
given the urgent need to replace the paper-based filing
system, the significant customer service improvements the
system will bring, the potential for savings as a result
of the process redesign beyond the $500,000 identified in
this report, and the potential for additional project
funding through expansion of the system beyond Permits &
Licences, the risk is worth taking. The General Manager
therefore RECOMMENDS approval of A through G.
COUNCIL POLICY
On June 7, 1994, Council established information as one of the
City's corporate priorities.
On February 3, 1994, Council resolved:
THAT, during the term of the 1994-1996 Budget
Management Program, any proposed increases in
program and/or service levels be offset by
corresponding spending reductions elsewhere in the
City's operating budget or by increases in non-
taxation revenues, subject to Council discretion.
SUMMARY
The private and government sectors are quickly discovering the
advantages of converting their cumbersome paper-based document
handling and filing systems to imaging technology. The City
of Vancouver faces these same challenges throughout the
organization. The introduction of a Document
Imaging/Management System will dramatically change the way
work is done, embrace quality service and allow staff to take
on a stronger customer focus. Imaging will promote the
climate and momentum for change across the City. It will meet
the objectives of the Better City Government program to review
and redesign our processes, use technology effectively and
make the best use of the people who work for the City.
On May 23, 1995, Council approved the recommendation of the
Director of Community Services that a Request for Proposal
(RFP) be issued for a Document Imaging/Management System.
That process has determined that Andersen Consulting is the
low bidder and has the experience, methodology and approach
needed to make this project a success.
The cost of implementing the first phase of this system in
Permits & Licenses (65 workstations) is $2,820,600. It is
recommended that the purchase be financed by a loan from the
Capital Financing Fund (Solid Waste Capital Reserve) to be
repaid from two sources: operating savings of $500,000
annually from the Community Services operating budgets and
from a 2% increase in Trade Permit Fees in 1997 and an
additional 2% increase in 1998 beyond the normal inflationary
increases. It should be noted that additional savings beyond
the $500,000 identified are anticipated as a result of the
process redesign which will accelerate the loan repayment or
allow forestalling of fee increases.
The recommended system has the capability for expansion to
handle a maximum of 300 workstations. Future users will share
the system development costs and their contributions will be
used to accelerate the repayment of the loan.
Subject to Council approval, the project in the Community
Services Business Group will begin in April, 1996, and be
operational with 65 workstations in December, 1996.
BACKGROUND
On December 8, 1994, Council approved a number of resolutions
authorising the Better City Government program, including the
endorsation of a program to reorganise around the City's major
processes and implementation of an Information Systems
Strategy.
The complex review of the overall process of managing
development is currently underway. However, prior to this
review, staff had identified an urgent need to replace the
microfiche and paper based records management system in the
Data Resource Centre of Permits & Licenses. Together with
staff from Information Services and external consultants, it
was determined that the implementation of a Document Imaging/
Management System would not only provide an efficient filing
system but would also facilitate the Development and Building
Regulation review process.
On May 23, 1995, Council approved the issuance of a Request
for Proposal (RFP) for a Document Imaging/Management System,
subject to the General Manager of Community Services reporting
back to Council on the results of the RFP and on a financing
plan for implementation of the system.
In the fall of 1995, a Corporate Steering Committee was formed
to advise on the project. The Steering Committee is composed
of staff from Information Services, City Clerk, Police,
Engineering, Planning and Permits & Licenses.
On October 10, 1995, the City issued the RFP to three short-
listed vendors. On November 20, 1995, proposals were received
from Andersen Consulting and Coopers & Lybrand. In addition
to the written responses, each vendor presented their proposal
to the evaluation team and to other City staff involved in
document management.
A formal evaluation of the written submissions and the
presented material was conducted by staff from Permits &
Licenses and Information Services. The final assessment
concluded that Andersen Consulting was the low bidder and had
the experience, methodology and approach needed to bring the
project to a successful conclusion.
DISCUSSION
Benefits of Imaging
The City currently "runs on paper" which is labour and space
intensive and inhibits our ability to provide timely customer
service. Imaging technology will significantly reduce the
amount of paper necessary for the City to perform its
functions, will reduce the effort necessary to manage paper
flow and will improve our ability to respond to customer
needs. The proposed imaging system will not only provide a
more efficient and reliable information filing system, but
will also allow redefinition of the cumbersome work processes
in the City. The Administrative Report considered by Council
in November 1995, outlined these principal benefits:
- greatly improved customer service
- significant savings in staff resources
- disaster protection
- staff productivity
- improved security
- improved file management through consolidation
of
information into one reliable medium
- potential for expansion to other City departments
One of the major issues with our customers has been the length
of time it takes to respond to an inquiry or to initiate an
action with the City. One of the contributing factors to this
delay is the unreliability and inaccessibility of our records.
For example, Permits & Licenses maintains paper and microfiche
records on 132,000 properties in the City. Studies during the
review of the current file system have revealed that the cost
of staff's non-productive time spent accessing these files
exceeds $400,000 annually. In addition, there is considerable
staff time required in the Data Resource Centre to manage
these files.
In conjunction with the changes resulting from the Development
and Building Permit review process, the implementation of a
Document Imaging System in Permits & Licenses will
dramatically reduce the time required for staff to retrieve
and provide information. Telephone inquiries may be responded
to instantly instead of staff having to return calls. Hours
of Plan Checker time spent retrieving and reviewing files can
be redirected to plan review resulting in quicker turn around
time on permit issuance.
A Document Imaging/Management System also has the potential to
allow controlled public access to the files through the use of
a "touch screen" application. Although not part of this
initial project, the software provides a base on which the
City's long term goals for improved communication and public
service can be achieved.
System Costs
Introduction of the Document Imaging System from Andersen
Consulting that is recommended in this report will have one
time and ongoing costs. The total costs to be financed are:
1. Consultant cost for design, implementation
of 65 workstations, change management
services, hardware and software plus taxes $2,307,900
The recommended system has the capability
to support up to 300 workstations.
2. One-time maintenance contract 68,857
3. Transition Team cost 159,000
4. Technical Training
(pre-requisite to implementation) 35,500
5. Renovation, furniture and equipment 100,500
TOTAL CAPITAL COST $2,671,757
6. Design Support Cost $8,900
Implementation Support Cost
(net of $200,000 revenue
from permit fee increase) 109,959
TOTAL COST TO BE FINANCED $2,820,616
1. Consultant Cost $2,307,900
The contract with Andersen Consulting will provide for
the design and implementation of 65 workstations in the
Community Services Business Group. Change Management
services, cost of hardware and software are all included.
This is the first stage in the implementation of the
Corporate Document Imaging/ Management System.
The software has the built-in capability to support up to 300
workstations. Other City departments have been involved in
the process and will be added to the system in the future.
Each expansion will be justified on a business case basis, and
will share part of the capital cost of the project. Staff
will report back to Council when the plan for expansion is
finalized.
2. Transition Team Cost $159,000
As part of the implementation plan and to minimize the
disruption to current services to the public, the
existing microfiche and paper file system will be
operated in parallel with the new Document
Imaging/Management System during the design and
implementation stage. Additional temporary staff is
required for up to one year to implement the system in
Permits & Licenses (see Schedule A). The team will
consist of a part- time project manager, a part-time
change co-ordinator, and four half-time scan/index
operators. The staff at the Data Resource Centre will
provide support and relief whenever it is possible.
3. Training $35,500
In addition to the training program provided by the
consultant as part of the contract, there is a need for
additional training for the staff to ensure that they
have the sufficient skills and knowledge to manage this
new technology for the City.
4. Renovation, Furniture and Equipment $100,500
In consultation with the Facilities Development Division
of Corporate Services, it has been determined that the
vacated Occupational Health area on the East Wing main
floor will be utilised for the design and implementation
stage and possibly as a permanent location after
implementation.
Renovations are being kept to a minimum because of the
concurrent Development/Building Permit and License Process
Reviews. The technology requirements have been planned to
allow for flexibility to complement the results of these
process reviews. Please refer to details on Schedule C.
5. One-time Hardware and Software
Maintenance Contract $68,857
The current microfilm/paper system will be running in parallel
with the new Document Imaging/Management System and there is
need for a one-time hardware and software maintenance contract
for the Document Imaging/Management System in 1996.
The on-going maintenance of the hardware and software of the
system will be assumed by the City after the implementation in
1997, and can be funded from the existing departmental budget
allocations.
BACKFILE CONVERSION (1997)
Upon completion of the design and implementation stage,
existing staff will commence conversion of the 300,000 paper
documents to imaging format.
ON-GOING SYSTEM ADMINISTRATION AND SUPPORT
When the project begins in 1996, a regular full-time system
administrator position will be required to work with the
consultant and the City's Transition Team. This involvement
will allow the City to gain an understanding of the system's
capabilities and the need of the various users; and, to
perform administrative tasks for the ongoing operation of the
Imaging System. In the long run, this in-house knowledge will
reduce the necessity to hire outside consultants to modify,
maintain and/or expand the system.
Commencing in 1997, 1.25 F.T.E. of regular full-time system
support will be required in Information Services. The
incumbents in these positions will work with the system
administrator position in the ongoing operation and
maintenance of the Imaging System.
FINANCIAL IMPLICATIONS
As the City begins to upgrade its information systems, it will
be increasingly important to build business cases which will
see the systems sustainable in the long term. That means that
system financing plans must be developed that will ensure
support and replacement costs can be accommodated over the
lifetime of the technology being purchased. If this approach
is not taken, in the future the City will find itself with
outdated systems for which replacement funds will be
difficult to identify. The financial plan proposed in this
report is based on this principle and uses a combination of
ongoing operating cost savings and increased revenues to
ensure that the Imaging System is fully paid for over its
anticipated seven year life.
It is recommended that the City finance the $2.8 million cost
with a loan from the Capital Financing Fund (Solid Waste
Capital Reserve). This reserve holds surpluses from the
Cityœs commercial solid waste activities and has the resources
to provide this loan. The loan would be for a seven year term
at market rates as determined by the Director of Finance.
Three funding sources have been identified to provide for
ongoing system support costs and for the repayment of the
loan:
i) General Operating Savings $500,000
When the advantages of the imaging technology are
combined with the results of the concurrent Development
and Building Regulation review, the General Manager of
Community Services and the Imaging Project team are
confident that substantial operating savings can be
achieved within two years of system implementation. The
financing plan proposes these reductions be applied to
the capital cost. Specifics of these savings will be
reported to Council before December 31, 1998 for
implementation in 1999.
It should be noted that any staff savings will be
achieved through the normal attrition process.
ii) Increase in the Trade Permit Fees $400,000
It is anticipated that with the introduction of the
Document Imaging/Managing System, there will be
significant improvement to the level of customer service
in Permits & Licenses. For example, staff will be able
to answer telephone inquiries immediately instead of the
current delay resulting from having to retrieve files
from the Data Resource Centre. It will also reduce the
hours of time spent by plan checkers and clerical staff
retrieving and reviewing files, resulting in quicker turn
around times on permit issuance.
The financing plan proposes that the cost of this direct
improvement to customer service be shared with the users
by imposing increases beyond the normal inflationary
increases allowed for in the annual trade permit fees.
These additional increases would be 2% in 1997 with a
further 2% in 1998. This will generate additional
revenue of $400,000 annually and will be applied towards
the repayment of the loan.
These two sources are sufficient in themselves to ensure that
the system capital costs and the first-year operating costs
are repaid within five years. This financing plan is detailed
in Schedule D.
There is also the opportunity to speed the repayment of the
loan as follows:
iii) Expansion of the Document Imaging/Management System
As noted above, the recommended system has the capacity
to support up to 300 workstations; however, only 65
workstations will be installed in the first stage of the
project. The potential to expand the system by a further
235 workstations will allow other departments to take
advantage of imaging technology on a business case basis.
Future users are expected to share part of the system
development costs, estimated to be $1.1 million, as well
as provide funds for workstation installation. The
capital contribution from other users will be applied
against the repayment of the loan.
iv) Additional savings achieving through subsequent
process redesign and potential staff adjustments
CUPE Local 15 has been provided with a copy of this report.
CONCLUSION
Implementation of a Corporate Document Imaging/Management
System is the first major step towards achieving the goals set
out in the Better City Government program with respect to
effective use of technology to improve communication,
processes and ultimately, customer service. Approval of the
purchase and the proposed financing plan will satisfy an
urgent need in Permits & Licenses, will result in significant
service improvements to our customers and will reduce
operating costs and space requirements for document storage.
* * * * *
SCHEDULE A
STAFFING
ONE-TIME COST - Transitional Team
Project manager (0.70 FTE) $55,000
Change co-ordinator (0.70 FTE) 44,000
Scanner/indexer (4 x 0.50 FTE) 60,000
$159,000
ONGOING COST
System Administrator position (1.00 FTE) $61,000
in Permits & Licenses
System Support positions (1.25 FTE) 63,000
in Information Services
$124,000
* * * * *
SCHEDULE B
STAFFING PLAN
_____________________________________________________________
Total # FTE
Time Frame Required Staff of Staff
_____________________________________________________________
Current - Microfiche 10.0 existing staff 10.0
_____________________________________________________________
YEAR 1 - 1996 10.0 FTE existing staff 14.4
1.0 FTE system adminis-
Design/ trator (on-going)
Implementation 0.7 FTE project manager
Parallel Systems (temporary)
0.7 FTE change co-ordinator
(temporary)
2.0 scan/index operators
(temporary - 4 @ 6 mos.
ea.)
_____________________________________________________________
YEAR 2 - 1997 10.0 FTE existing staff 12.25
1.0 FTE system adminis-
Imaging/ trator (on-going)
Backfile Conversion 1.25 FTE IS system support
(on-going)
_____________________________________________________________
YEAR 3 - 1997 6.0 FTE existing staff 8.25
1.0 FTE system adminis-
Imaging trator (on going)
1.25 FTE IS system support
(on-going)
_____________________________________________________________
* * * * *
SCHEDULE C
Document Imaging/Management System
ESTIMATES OF RENOVATION COST
Phase 1 Estimate
Renovations $1,800
Electrical/Data/Phone Conduits 3,500
Security System 6,700
Phone Servicing 7,300
Data Servicing 4,600
Office Equipment 8,500
Supplemental Cooling system 6,900
Management & Disbursements 1,600 $40,900
Phase 2
Data Servicing 4,200
Management & Disbursements 200 4,400
Phase 3
ii) Data Servicing 22,000
v) Management & Disbursements 800 22,800
Reserve
i) All Work 7,200
ii) Management & Disbursements 200 7,400
_______
$75,500
Furniture and Equipment 25,000
_______
One-time Cost/Maintenance $68,857
$169,357
vvvvvvvv
* * * * *
SCHEDULE D
Document Imaging/Management System
CASH FLOW ANALYSIS
FOR FIRST STAGE OF IMPLEMENTATION IN PERMITS & LICENSES
ON FILE IN THE CITY CLERK'S OFFICE.