ADMINISTRATIVE REPORT

Date: February 3, 1998

Author/Local:LM/7333

CC File No. 1151

TO:		Vancouver City Council
FROM:		Chief Information Officer, in consultation with the Corporate Management Team
SUBJECT:		Year 2000 Conversion Project Financing

RECOMMENDATION

A.THAT Council allocate $649,000 from the Corporate Systems Replacement Financing Plan, approved in July 1996, to fund the Year 2000 Conversion project outlined in this report.

B.THAT Council approve the creation of four 15 month temporary positions at a cost of $392,000 from the project budget, to perform the necessary application conversion work, with classification subject to review by the Director of Human Resources. This staff will supplement two existing regular positions assigned to the Year 2000 Project.

COMMENTS

The Chief Information Officer and the Corporate Management Team RECOMMEND approval of A and B.

COUNCIL POLICY

There is no applicable Council policy.

SUMMARY

The use of dates within information systems is pervasive and in many cases essential to their operations. Frequently, the representation of date values does not consider the century, i.e. ‘1997' is represented as ‘97'. In just over two years, many computer systems used by the City of Vancouver will fail or malfunction if the processing and representation of dates is not corrected to consider the century. A number of revenue collection systems, including the Tax System, the Traffic Violations System, and the Utility Billing Systems will be affected. Failure of these system may have a significant impact on the collection of City revenues and the functioning of the system. To prevent this situation, application code must be converted or replaced, and hardware and software must be upgraded. Resources are required to meet the fixed deadline for the completion of the project.

While this report requests the costs currently identified, and a contingency is included, the nature of the problem makes precise estimating very difficult and as such additional funds may be requested in future. The current project to replace the financial and human resources systems (SAP Project) has resolution of the year 2000 problem as a critical success factor.

RELATED REPORTS & PROJECTS

This request is related to several other projects and reports Council has seen or will be seeing that impact on year 2000 work. They are:

Replacement of the HR and Financial systems (SAP project) - this project was approved by Council and is underway now. In addition to restructuring and improving core processes in the City it will alleviate the need for year 2000 work in financial and HR systems (that it will replace);

Mainframe replacement - the current mainframe, while targeted for downsizing, must remain in place for at least the next three years to support current systems. That machine is old and is a mix of several technologies; in addition the operating system (computer logic that runs the actual computer) is not year 2000 compliant and must be upgraded to a compliant version. Rather than upgrade the operating system alone we are investigating a replacement of all or a part of the hardware as well, which will increase reliability of the current system, reduce energy costs; this action is expected to be cost neutral over the current system but Council must consider this project due to the size of the lease; and

Costing and fleet management systems replacement - this is discussed later in this report.

BACKGROUND

What is the Year 2000 Problem?

Information systems frequently process information associated with dates. Some types of date processing relevant at the City of Vancouver involve date related calculations related to:

- expiration dates of temporary permits or licenses

- garbage pickup dates

- utility billing charges

- rental property billing charges

- improvement charges.

Up until recently, it was common practice to omit the century from most date values because the century '19' could be assumed. The century was omitted so as to reduce disk space, data transmission costs, data entry time and to fit more information on a computer screen. This made good sense when many of those systems were built since information technology was far more expensive and those systems were not expected to last so long. The date November 5, 1997, is often represented by the 6 digit number 971105. With the coming of the new millennium, the date January 30, 2000, would be represented by the 6 digit number 000130 and many information systems will interpret the date January 30, 2000 as earlier than November 5,1997, confusing it with say 1900, or possibly 1800 etc.

Without the century digits, many information systems will mis-interpret the dates and will fail or malfunction if the processing and representation of dates is not corrected to include the century. A hypothetical example might be: A person is born in 1970 and the birth year is represented as '70'. Today’s non-Year 2000 compliant computer system know this year is '98' and calculates the age as 98-70= 28 years old. If the system is not changed, come the year 2000 with the current year represented as '00', the age will be calculated as 00 -70= -70 years old. This situation is commonly referred to as the Year 2000 (Y2K) Problem or the Millennium Problem.

The problem is not limited to software applications. It also affects computer hardware including mainframes, network components and pc’s, computer software infrastructure including operating systems, compilers, database products, commercial and off the shelf software products, and systems within machinery including building security systems and traffic light systems.

What is the magnitude of the problem at the City of Vancouver?

Based on a high level assessment performed by Corporate IT and each of the departmental IT groups, numerous application systems are affected, and the majority of mainframe software infrastructure components need to be upgraded or replaced. Many applications written in the last 10 years, including the TAX System and the Permits and Licenses System were designed to be Year 2000 compliant but still require minor modifications because the tools the applications were written with are not Year 2000 compliant. The current project to replace the financial and HR systems will also address many of our problems.

An initial inventory of the applications, hardware, software and embedded systems used at the City of Vancouver was compiled. The need for each of these systems was confirmed and the Year 2000 status for each was determined. The costs to correct, replace or upgrade each was estimated.

The total costs for Year 2000 work is estimated to be $1,205,600 (primarily salaries) of which $556,600 is existing resources, and $649,000 is new resources which includes a $200,000 contingency. A contingency fund is required because of the nature of software repair and maintenance work, which is difficult to anticipate with precision, and the fixed implementation deadline required. We anticipate that the work will be completed by the end of the first quarter of 1999.

Appendix A lists the costs that have been identified to upgrade mainframe hardware and software components, and to convert application code.

Appendix B lists some of the major application areas to be converted or replaced.

Costs for applications being replaced by other projects, including the project to replace the Financial and HR systems (the S.A.P. project), are not included in this estimate because these projects are scheduled for completion prior to the Year 2000 or because these replacement projects have included a contingency for Year 2000 work. As part of the S.A.P. project, a report is expected in February detailing the modules to be implemented before the Year 2000 and a strategy for the replacement of the Costing and Fleet Management Systems. At that time, we will confirm the cost of converting the Costing and Fleet Management Systems (if required), which we anticipate will cost a minimum of $60,000, and a maximum of $120,000 (one to two person year effort).

Appendix C lists embedded systems to be investigated and confirmed. An embedded system is a specialized computer system that is part of a larger system or machine. Typically, an embedded system is housed on a single microprocessor board with the programs stored in Read Only Memory and often may not be recognized as a computer system. There may becosts associated with some of these systems in the City, but at this time, we do not expect a major investment and are expected to be handled as part of equipment life cycle replacement or product upgrades from the manufacturer.

PERSONNEL IMPLICATIONS

Approval is being sought to create the following temporary positions for a period of fifteen months:

Four Application Development Programmer/Analysts - These four programmer analyst positions will be responsible for converting the application code supported by Corporate IT. Over 1.9 million lines of COBOL code on the IBM mainframe and a number of PC based applications are to be examined, converted or rewritten, and tested. This work does not include the multitude of routines written by end users.

In addition to the above four programmer analyst positions for a fifteen month period, there is a need for another four person years of programmer analyst work to convert the code of corporately supported applications and two person month of technical support work to upgrade Network Operating Systems. This will be provided using the existing programmer analyst resources and technical support resources in Information Technology.

There is also a need for a two year commitment to project management. This is currently being provide by Information Technology and no new staffing is required.

Approval is also being sought to create the following temporary positions:

One programmer analyst for the duration of 3 months for the Community Services temporary help to convert the code of departmental applications.

One programmer analyst for the duration of 6 months for the Engineering Services temporary help to convert the code of departmental applications.

FINANCIAL IMPLICATIONS

This Report requests funds which will be allocated as follows:

$404,000 for the Corporate Services temporary help, identified above, to convert the code of corporately supported applications and for the purchase of software upgrades;

$30,000 for the Engineering Services temporary help to convert the code of departmental applications and for the purchase of software upgrades;

$15,000 for the Community Services temporary help to convert the code of departmental applications and for the purchase of software upgrades;

$200,000 for the contingency.

Prior to the end of 1998, staff will report back to Council should additional costs be identified .

CONCLUSION

The impending "Year 2000 Problem" is widely expected to cause failures and errors in computer applications and systems around the world. These failures and errors could result in financial losses, confusion, delays or reductions in the services we provide, and even serious, sustained disruption to the City’s activities. Accordingly, we need to take steps to prevent the City from being affected by significant Year 2000 problems. To prevent this situation, application code must be converted or replaced, and hardware and software must be upgraded. Resources are required to meet the fixed deadline for the completion of this project.

* * * * *

Appendix A

Cost Estimates

	Total Resources	Existing Resources	Requested Resources
Create Y2K Testing Environment Convert In-House Utilities Upgrade Novell Servers Y2K Project Management (Corporate IT) Application Conversion ( Corporate IT) Application Conversion (Comm Serv IT) Application Conversion (Engineering IT)	12,000 12,000 25,000 100,000 811,600 15,000 30,000	0 12,000 25,000 100,000 419,600	12,000 0 0 0 392,000 15,000 30,000
Estimated Costs	1,005,600	556,600	449,000
Contingency	200,000	0	200,000
Net Resource Requirement	1,205,600	556,600	649,000

Appendix B

Corporately Supported Applications to be Converted or Replaced

System Name Recommendation

Absences Statistics Sub System replace-> SAP

Agreements Index convert

Bank Reconciliation System convert

Bond Management System convert

Bylaw Fines System convert

Call and Response Tracking System replace

Capital Assets System convert

Cash Registers confirm with vendor

Cash Sub System convert

Community Stress Database convert

CS Time Tracking convert

Districtation Sub System convert

Document Database replace

Domino upgrade software

Electrical Underground System convert

Equal Opportunities System convert

Fleet Management System replace or convert

Hourly Payroll System replace-> SAP

Human Resource Competitions replace-> SAP

LGFS replace-> SAP

Library Payables Sub System replace-> SAP

Licensing System confirm with vendor

OCC/SB OCC/Fuel OCC/Time replace-> SAP

Operations convert

Operations Costing & Control replace-> SAP

PC Ordering and Inventory System replace or convert

Permits and Licenses System convert

Permits Retrieval and Inspection System convert

Personnel Management Information System replace->SAP

Planning Reports convert

Property Tax System convert

Purchase Order Tracking System replace or convert

Real Estate Management convert

Rental Properties Sub System convert

Risk Management convert

Salary Payroll System replace->SAP

Appendix B

System Name Recommendation

Scavenging Billing Sub-System convert

Sewers Information convert

Streets Inventory convert

Treasurer's Imprest Fund convert

Voters System replace

Water Meter Billing System convert

Waterworks convert

Workers Compensation Board System replace->SAP

Appendix C

The following table lists embedded systems for which the Year 2000 status is to be investigated, and the department assuming responsibility for the investigation. Many other types of embedded systems exist in the City but because they do not impact life safety, security or basic communications and operating ability they are not included in the scope of this project.

System Department Investigating

Street Lighting Engineering

Water Pumping Engineering

Fire Control Systems and Alarm Monitoring Fire

Emergency Generators Building Management

Emergency Lighting Building Management

Elevators Building Management

Heat/Ventilation Systems Building Management

Electronic Door Locks Building Management

Security Systems Building Management

Telephone Systems/PBX’s Information Technology

Voice Mail Information Technology

(c) 1997 City of Vancouver