1. GIS Expense (727.401). City of Lee's Summit GIS Expenses are allocated via a formula designed to assign the bulk of GIS operational costs (personnel, hardware, and software) to those departments receiving the most direct benefit. This includes full or part time GIS staff providing department map layer maintenance and distribution of software maintenance fees based upon departmental installations.
Additionally, when the City originally invested in the GIS system, it was decided that every department should have a minor portion of the expense as well, regardless of the direct use of the system. This is in recognition of the indirect benefits the GIS provides to the long term operation of the city, the value of accurate GIS map data and the variety of internal/external projects enhanced through the availability of GIS information originating from within the City of Lee's Summit.
No significant changes have been made to the GIS allocation formula for the FY10-11 budget year.2. Toner Expense (765.400). Department Toner cost estimates are based simply on each department's purchase of toner for the first half of the current fiscal year. In a recent message to departments, Dana Sheppard (Manager, ITS Operations) explained why a department may want to consider adjusting this budgetary number for a variety of reasons. A department may realize the toner estimate is not accurately represented due to factors such as the timing of toner purchases, planned expansion or reduction in printers, expected increases in printer usage, etc. ITS has minimal insight into individual department printing patterns, which tend to be random, and cannot provide specific estimates as a result. Please consider your specific issues when preparing your toner budget.
ITS purchases all toner on behalf of the City to take advantage of bulk purchase opportunities, provide a central toner supply and to simplify the order of toner by departments. Each department's request for new toner cartridges is tracked by ITS. ITS requests a reimbursement of the actual costs on a quarterly basis. The Finance department does this transfer from your department toner expense account. All purchases are reimbursed to ITS regardless of how much was actually budgeted. ITS provides a mid-year report to remind departments of toner usage and departments are encouraged to monitor these expenses on an ongoing basis.
No significant changes have been made to the Toner expense process for the FY10-11 budget year.3. MERP (731.200) - The Managed Equipment Replacement Fund is described in detail within the City Budget Manual. The MERP program allows departments to make payments into an account to prepare for the end of life replacement of department hardware (printers, computers and monitors). City policy requires that all permanent IT hardware be maintained in the MERP fund to avoid a future short fall of replacement funds and to spread the replacement costs over the life of the equipment.
Every department was recently provided a current copy of their inventory and returned any discrepancies to ITS . This annual "˜MERP reconciliation', completed prior to the ITS budget each year, is important for two reasons:
a. It is used to verify our MERP payment calculation for our department.
b. It is a component of the ITS Overhead calculation, defined below.
The cost of printers has fluctuated greatly in the past two years and ITS has adjusted the future replacement amount for several models as a result. This has a minor relative impact in most budgets and is necessary to ensure adequate replacement funds in your account. In FY10, several existing pieces of department hardware were added to MERP that had not been previously included. No additional changes have been made to the MERP for FY10-11.
ITS is currently evaluating the fiscal and operational impact of changing the replacement life on desktop computers from 3 to 4 years. Any recommendation in this regard will be made to the IT steering committee and management team for further consideration.4. IT Maintenance (727.200). Departments and the City network require a large variety of hardware and software products to operate. These products regularly require ongoing support and maintenance from the manufacturer/vendor. Commercial software vendors typically require a software maintenance contract to allow you to obtain new versions of software and to gain immediate access to technical support. When a contract is not maintained by a customer, vendors will require that you re-purchase the software to get newer versions and pay hourly fees to obtain technical assistance. Many vendors will not offer support unless you maintain an ongoing support contract.
ITS negotiates and manages these vendor contracts on behalf of all departments. The cost of the support and maintenance contracts are budgeted based upon who benefits from the product. There are two general methods used by the City to budget these expenses.
A. If the product is something which benefits all or a majority of City departments, the cost of the maintenance is included in the ITS overhead budget and allocated via the ITS overhead allocation formula. Examples of shared maintenance expenses include the city's network hardware from Cisco, which provides network communications for all employees.
B. If the product only benefits a specific department(s), those who benefit are required to budget for the cost of the maintenance contract. These "˜department specific' maintenance expenses are provided by ITS to departments during the budget process, after ITS has evaluated the contract and discussed the terms with the vendor. Examples include the Police Dispatching software or the billing system used by Water Utilities.
A copy of the FY10-11 department specific and shared maintenance expenses has been attached for your review.
For FY11, ITS negotiated significant savings in a variety of maintenance agreements. The majority of these savings are offset by new or expanded agreements recently added. These include the Municipal permitting system (partial year), a new on-line pet licensing renewal system at animal control, the addition of the Pen link crime intelligence system at Police and the FY11 updates to the GIS aerial maps (done on a bi-annual basis).5. Department phone expenses (736.500).
The city phone system is owned by the city and managed by ITS. The majority of expenses for operating the phone system are included in the ITS overhead calculation, which includes all of the phone system hardware, trunk lines and ongoing support.
In addition to the primary phone system, many departments also require additional phone circuits for items such as fax lines, modems and department equipment. For example, the Fleet department has phone lines which are used to allow the fuel pumps to report usage information back to the fleet.
ITS coordinates the installation and troubleshooting of many of these lines, but does not manage the ongoing use of them or the related services; such as long distance fees.
As a result, departments must determine how much to budget for ancillary telephone use/expense in the phone account. We recommend you evaluate your current and historical fiscal year and adjust for any known changes in your need for related phone services.
ITS informs Accounts Payable when a new phone circuit (external) is installed on behalf of a department. When the phone bill is received, A/P will charge the department for the related expenses, including installation and ongoing fees from the phone company, for the new circuit. A similar process is used for allocation of the any long distance charges and cellular phones.
This cost item was originally provided by ITS when the new phone system was acquired and the significant expenses were migrating from being a 3rd party phone company cost to being an ITS overhead expense. Going forward, this item will be removed from the ISMT budget spreadsheet and departments will need to ensure they budget these expenses annually as appropriate. ITS can provide copies of our records regarding phone circuit locations, numbers and installation dates as needed.6. ITS Projects (901.043)
IT projects are funded through the capital expansion request process, although a specific approach is required for IT related expansion projects. All projects must be submitted to the IT Steering Committee for prioritization and consideration (earlier on in the budget process). Final approval for projects is required by the Management Team, the Council Finance and Personnel Committee and the City Council.
Expansion projects are evaluated by the City Council late in the budget cycle to ensure adequate information is available regarding current year city revenues, trends, etc. As a result, ITS cannot provide a forecast of the projects which will be approved for funding.
Once a final decision on expansion project funds has been made, ITS will work with the Finance Department to ensure the associated budget entries are made in the appropriate departments.
Due to lack of one time fiscal year funds, only critical expansion projects will be funded in FY11. A separate communication will provide further details. Departments must identify cost savings or alternative funding sources for any projects which they wish to be re-considered for FY117. ITS Overhead (727.201)
The final component of department budget expenses related to IT costs is the ITS overhead account. This account basically covers everything that was not specifically addressed previously. The largest component of the overhead budget within ITS is for personnel and benefits. Other significant expenses may include 3rd party professional fees, city-wide IT maintenance expenses (discussed earlier) and city-wide phone system expenses. Another important expense in the ITS overhead is the city-wide MERP. Like the MERP, this fund provides a replacement account for all shared IT infrastructure to ensure it can be replaced at the end of life. The annual replacement payment is a shared cost allocated to all departments.
ITS overhead expenses are allocated to departments using a formula which attempts to assign expenses based upon an overall percentage of the use of shared IT Services.
The formula has 4 elements:
a. Equipment Points.(25%)
b. Network ID's. (25%)
c. AS/400 ID's (25%)
d. Telephone. (25%)
Equipment points are a count of how many pieces of equipment each department has which are supported by ITS. Each individual item counts as one point (laptop, PC, printer, monitor, projector, digital camera, etc). Accessories are not included (keyboard, mouse). It is important to note that equipment points include all equipment currently being used by the department, regardless of whether it is being funded as part of MERP. This is because all equipment may require troubleshooting and support needs to share in using the network to allow it to function and has a cost to operate.
User IDs represent all network accounts by employees (or systems) within a department. Each ID counts as one point. ID's for 3rd party software are not included.
AS/400 ID's. The AS/400 system represents a unique expense which has a various degree of benefit to different users and has specific costs for the hardware, software and personnel to support it. Therefore, a count of how many AS/400 ID's each department utilizes is weighted in to the overhead allocation.
Telephone. Similar to the AS/400, the phone system has a specific set of equipment and expertise necessary to operate it. One point is assigned for each phone extension, circuit and physical phone owned by the department. This makes the process fair for those who may have one phone number connected to multiple phones (a fire station for example) as well as those who may need 3 phone lines on a single phone (a receptionist phone for example).
No significant changes have been made to the ITS overhead allocation formula in FY11. Your assistance is always appreciated in helping to ensure we have accurate records of the components listed above. Timely notification of changes to employees and equipment are very valuable in ensuring our records and the associated allocation is correct.