SUPPORTS ITEM NO. 2
CS&B COMMITTEE AGENDA
MARCH 14, 1996
ADMINISTRATIVE REPORT
Date: March 6, 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 $2,691,800 from the Capital Financing Fund (Solid
Waste Capital Reserve), on terms 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 to Andersen Consulting at a cost
not to exceed $2,256,400 including all applicable taxes; 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 & Licenses 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 organiza-tion.
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 Anderson 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 and
Licenses (65 workstations) is $2,691,800. 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 4% increase in Trade Permit Fees beyond the normal
infla-tionary 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 March, 1996 and be operational with 65
workstations in November, 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 and 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 Anderson 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 $2,256,400
The recommended system has the capability
to support up to 300 workstations.
2. Transition Team cost 159,000
3. Technical Training
(pre-requisite to implementation) 35,500
4. Renovation, furniture and equipment 100,500
TOTAL CAPITAL COST $2,551,400
5. Design Support Cost 38,900
Implementation Support Cost
(net of $200,000 revenue
from permit fee increase) 101,500
TOTAL COST TO BE FINANCED $2,691,800
1. Consultant Cost $2,256,400
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 additional 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.
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 it
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 five year life.
It is recommended that the City finance the $2.6 million cost with a
loan from the Capital Financing Fund (Solid Waste Capital Reserve).
This reserve holds surpluses from the City s commercial solid waste
activities and has the resources to provide this loan. The loan would
be for a five 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 Build-ing
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 work-stations
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.
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 improve-ments 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
ON-GOING 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
Time Frame Required Staff Total # FTE
of Staff
Current - Microfiche 10.0 existing staff 10
YEAR 1- 1996 10.0 FTE existing staff 14.4
1.0 FTE system
Design/ administrator (on-
Implementation going)
Parallel Systems 0.7 FTE project manager
(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
Imaging/ administer (on-going)
Backfile Conversion 1.25 FTE IS system
support (on-going)
YEAR 3 - 1998 6.0 FTE existing staff 8.25
1.0 FTE system
Imaging administer (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
$100,500
* * * * *
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)