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HomeMy WebLinkAboutResolutions - 1996.10.17 - 248954.3805 Mills .2439 Mill .2236 Mill a,' -lilt - MISCELLANEOUS RESOLUTION 196225 BY: FINANCE & PERSONNEL COMMITTEE, SUE ANN DOUGLAS, CHAIRPERSON IN RE: 1996 COUNTY GENERAL FUND PROPERTY TAX AND PARKS & RECREATION TAX RATES TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Chairperson, Ladies and Gentlemen: WHEREAS the County has a fixed millage rate of 5.26 mills and a voted .25 mill for Parks & Recreation; and WHEREAS the Huron-Clinton Metro Parks Authority has requested the County to apportion a .25 mill property tax rate; and WHEREAS Michigan Law (MCL 211.34d(16) permanently reduced the County's Maximum Allowable Tax Rate to the 1994 "Headlee" rollback ( Article 9, Section 31 of the Michigan Constitution) tax rate of 4.4805 mills, a Parks & Recreation maximum allowable tax rate of .2439 mill and a Huron-Clinton Authority maximum allowable tax rate of .2236 mill; and WHEREAS Public Act 5 of 1982, "Truth in Taxation" Act, requires the County Board of Commissioners to hold a public hearing if the recommended property tax rate exceeds the adjusted Base Tax Rate of 4,3023 mills; and WHEREAS the County Executive recommends that the County tax rate be set at 4.3805 mills, 1/10th (.1) mill less than the Maximum Allowable Tax Levy as constrained by State law, equivalent to a total tax reduction of $3.4 million; and WHEREAS the Finance Committee recommends that the 1997 County General Fund Property Tax rate be set at 4.3805 mills, 1/10th (.1) mill below the maximum allowable tax rate; the Oakland County Parks & Recreation Tax rate be set at .2439 mill, the maximum allowable tax rate; and the Huron-Clinton Metro Park Authority Tax rate be set at .2236 mill, the maximum allowable tax rate; and WHEREAS $150,221,153 is the estimated amount of the 1997 County General Fund Budget to be raised by taxation based on the 1996 Taxable Value of all property located in Oakland County ($34,293,152,087) at the recommended rate of 4.3805 mills, together with the voted .2439 mill for Parks & Recreation of $8,364,100 and the .2236 mill for the Huron-Clinton Authority of $7,667,949. NOW THEREFORE BE IT RESOLVED that each Supervisor of the various townships and Assessing Officers of the several cities of Oakland County are authorized and directed to spread on their respective township or city tax rolls for the year 1996 the following tax rates to be applied to the 1996 Taxable Value of all property located within their respective jurisdictions: 1996 County Voted for Huron-Clinton General Property Tax Levy parks & Rtmorpai-inn Park Anthnrity Mr. Chairperson, on behalf of the Finance & Personnel Committee, I move adoption of the foregoing resolution. FINANCE &PERSONNEL COMMITTEE /- 1.41 Resolution #96225 October 10, 1996 Action taken at October 10, 1996 Board meeting Moved by Douglas supported by Garfield the resolution be adopted. Moved by Kingzett supported by Holbert the resolution be amended by changing the 1996 County General Property Tax Levy rate to be the same as the truth in taxation rate - 4.3023 mills. Discussion followed. Vote on amendment: AYES: Devine, Holbert, Jacobs, Kaczmar, Kingzett, Law, McPherson, Moffitt, Obrecht, Pernick, Powers, Quarles, Wolf. (13) NAYS: Dingeldey, Douglas, Garfield, Huntoon, Jensen, Johnson, McCulloch, Palmer, Schmid, Taub, Amos, Crake. (12) A sufficient majority having voted therefor, the amendment carried. Discussion followed. Commissioner Palmer questioned whether the vote required a super majority. Chairperson McCulloch stated that the amendment to lower the millage rate carried. Taking funds from the Millage Reduction Stabilization Fund to support the tax cut requires a two-thirds (2/3) vote, 28 day notice. Discussion followed. Kingzett called for the question. Vote on resolution, as amended: AYES: Douglas, Garfield, Holbert, Jacobs, Jensen, Johnson, Kaczmar, Kingzett, Law, McCulloch, McPherson, Moffitt, Obrecht, Palmer, Pernick, Powers, Quarles, Schmid, Taub, Wolf, Devine. (21) NAYS: Dingeldey, Huntoon, Amos, Crake. (4) A sufficient majority having voted therefor, the resolution, as amended, was adopted. Resolution #96225 October 17, 1996 Action taken at the October 17, 1996 Board meeting Moved by Palmer supported by Schmid Miscellaneous Resolution #96225, 1996 COUNTY GENERAL FUND PROPERTY TAX AND PARKS AND RECREATION TAX RATES be amended by striking the 4.3023 mills taxation rate in the NOW THEREFORE BE IT RESOLVED paragraph, voted upon at the October 10, 1996 Board meeting, and inserting 4.3805 mills. Commissioner Pernick questioned Commissioner Palmer's motion to "amend" Resolution #96225, rather than a motion to "reconsider" the resolution. Chairperson McCulloch asked for Corporation Counsel's opinion on the motion. Gerald Poisson, Corporation Counsel quoted from Roberts Rules, Section #34, which allows amendment of a previously adopted resolution. Chairperson McCulloch upheld the decision to amend Miscellaneous Resolution #96225. Moved by Pernick supported by McPherson to appeal the Chairperson's decision to "amend" rather than "reconsider" Miscellaneous Resolution #96225. Chairperson McCulloch stated a "YES" vote will sustain the rule of the chair; a "NO" will not. Vote on appeal: AYES: Amos, Crake, Devine, Dingeldey, Douglas, Garfield, Huntoon, Jensen, Johnson, Kingzett, McCulloch, Obrecht, Palmer, Powers, Schmid, Taub, Wolf. (17) NAYS: Holbert, Jacobs, Kaczmar, Law, McPherson, Pernick, Quarles. (7) A sufficient majority not having voted therefor, the appeal failed and the rule of the chair upheld. Commissioner Kingzett questioned whether the amendment would require a two- thirds (2/3) vote. Chairperson McCulloch requested a response to the matter from Corporation Counsel. Gerald Poisson, Corporation Counsel quoted Roberts Rules, Section #34, in response to Commissioner Kingzett's question. County Executive, L. Brooks Patterson addressed the Board in regards to the recommended property tax reduction and issues facing the County. Moved by Palmer supported by Schmid to move the previous question. Discussion followed. Chairperson McCulloch called the question, stating a "YES" vote will bring the question before the Board; a "NO" will not. I HEREBYPffigt(lE THE FOREGOING RESOLUTIOts Date L. Brooks Patterson. County Executive Resolution #96225 October 17, 1996 Discussion followed. Vote to call question: AYES: Crake, Devine, Dingeldey, Douglas, Garfield, Huntoon, Jensen, Johnson, McCulloch, Palmer, Powers, Schmid, Taub, Wolf, Amos. (15) NAYS: Holbert, Jacobs, Kaczmar, Kingzett, Law, McPherson, Obrecht, Pernick, Quarles. (9) A sufficient majority having voted therefor, the motion to call the question before the Board carried. Discussion followed. Moved by Law supported by Obrecht to amend Commissioner Palmer's amendment by reducing the tax rate to 4.3023 mills with seven-tenths (7/10ths) of 1 mill to come from the Millage Reduction Fund for 1996 only and to further set the 1997 tax rate at 4.4805 mills. Chairperson McCulloch ruled Commissioner Law's amendment out of order. Discussion followed. Chairperson McCulloch stated a "YES" vote would adjust the 1996 COUNTY GENERAL FUND PROPERTY TAX AND PARKS AND RECREATION TAX RATE to 4.3805 mills; a "NO" vote would keep the tax rate at 4.3023 mills, as previously adopted at the October 10, 1996 Board meeting. Vote on amendment: AYES: Devine, Dingeldey, Douglas, Garfield, Huntoon, Jensen, Johnson, McCulloch, Palmer, Powers, Schmid, Taub, Wolf, Amos, Crake. (15) NAYS: Holbert, Jacobs, Kaczmar, Kingzett, Law, McPherson, Obrecht, Pernick, Quarles. (9) A sufficient majority having voted therefor, the motion to amend Miscellaneous Resolution #96225 carried. STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on October 17, 1996 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this 17th day of Octokiar_1996. 43 /1Ve, D. Allen, County Clerk RECOMMENDED PROPERTY TAX REDUCTION AND ISSUES FACING THE COUNTY OAKLAND COUNTY, MICHIGAN October 17, 1996 OVERVIEW OF RECOMMENDATION AND ISSUES October 17, 1996 COUNTY EXECUTIVE RECOMMENDATION * TAX REDUCTION OF .1 MILL FROM 4.4805 TO 4.3805 RESULTING IN A $3.5 MILLION REDUCTION IN REVENUES OVER THE PREVIOUS YEAR OVER VIEW OF ISSUES * EQUITY: ** STATE SCHOOL LAWSUIT: *** $500 MILLION CURRENTLY *** $3.5 BILLION ON-GOING ** WELFARE REFORM / BLOCK GRANTS - IMPACT UNKNOWN ** CMH OPERATING CONCERNS: *** $10 MILLION REDUCED ANNUALLY STARTING 10/1/96 *** $5.3 MILLION UNRESOLVED 1997 BUDGET SHORTFALL * COMPUTER PROJECTS - $35.8 MILLION TO $60.1 MILLION * FACILITY PROJECTS - $241.9 MILLION * STRATEGIC PLANNING COMMITTEE - LONG RANGE PLANNING * 12 TOWN DRAINS * FURTHER MILLAGE REDUCTION = SERVICE LEVEL REDUCTIONS NEW INFORMATION SINCE OCTOBER 10, 1996 October 17, 1996 * SCHOOL LAWSUIT LOST BY STATE - STATE DEBATING HOW TO FUND: ** IMMEDIATE STATE COST OF $500 MILLION ** ON-GOING STATE COST OF $3.5 BILLION BURDEN FOR FUNDING THIS LAWSUIT EXPOSES COUNTY TO FURTHER STATE FUNDING REDUCTIONS * CMH BUDGET SHORTFALL OF $5.3 MILLION * COMPUTER PROJECTS: ** FINANCIAL / PAYROLL / HUMAN RESOURCE - $7.0 TO $8.0 MILLION ** FRIEND OF THE COURT / CSES - $2.5 TO $4.0 MILLION ** CLEMIS REPLACEMENT - $4.2 TO $4.9 MILLION * FACILITY PROJECTS - $241 MILLION PROPERTY TAX RECOMMENDATION AND ISSUES FACING THE COUNTY OAKLAND COUNTY, MICHIGAN October 17, 1996 COUNTY EXECUTIVE RECOMMENDATION FOR PROPERTY TAX REDUCTION 1. County Executive's property tax millage rate resulted in a reduction of $3.5 million in taxes when the rate was reduced from 4.4805 mils (fiscal year 1996 property tax rate) versus the recommended rate of 4.3805 for fiscal year 1997. 2. The property tax reduction was both prudent and measured. The reduction was funded out of current operations without impacting the County's services to the public. ISSUES FACING THE COUNTY Note: The issues reflected in bold type represent information not available at the time of the property tax vote was taken by the Board of Commissioners on October 10, 1996. 3. equity - issues surrounding the devolution of program responsibility without the consummate funding from the federal or State governments: a. School lawsuit: i. Approximately two weeks ago, the Supreme Court ruled that the State had failed to honor its funding commitment under Headlee for mandated services to roughly 40 schools (many of which are located in Oakland County). Loss to the State applicable to the lawsuit is estimated at $500 million. Should all schools be included, the State has indicated a loss of $3.5 billion. iii. Although the Supreme Court had ruled previously, the State may appeal. However, plans are underway to reduce services in order to fund this lawsuit. iv. In all likelihood, contributions for programs (such as the County's $19+ million in revenue sharing) are in serious jeopardy. b. Welfare Reform Act and federal / State block granting - the impact of the Welfare Reform Act passed in the summer of 1996 on the County's operations cannot presently be determined. Further, the likelihood of federal and State block grants (such as the one offered in the juvenile delinquent / abuse and neglected children program) will continue to plague the County over the next several years. 4 c. Community Mental Health - in the last six months, the Department of Community Health has reduced its funding otherwise available to expand County services to the public by over $10 million annually in the following formulas / allocations: i. Funding formula - instituted effective October 1, 1996 (reduces allocations from State). Managed care - exposes County to potential losses above the cap. Fairlawn rate structure - instituted effective April 1, 1996 (virtually eliminates trade-off). iv. Clinton Valley Center rate structure - similar to Fairlawn rate issue, effective October 1, 1996). v. MORC residential rates - State eliminated the provision (only to provide halfback) of allowing County's to forego their local match when institutions, such as MORC, are privatized. These actions by the State have left the CMH program with a $5.3 million budgetary shortfall for the fiscal year that started October 1, 1996. At present, CMH program reductions have yet to be determined. Each month that the program reductions are delayed effectively increases the operating reductions otherwise required to ensure that the County's General Fund is not exposed to funding these State imposed reductions. 4. Computer needs - as noted in Exhibit A, the County's needs for Information Technology are estimated to cost between $35.8 million to $60.1 million. While a small portion of the projects are currently funded, the majority of the costs must be incurred between now and January 1, 2000. The principal cause of the needs involves the conversion from existing, customer-driven (Cobol based) software programs that are not year 2000 compliant to a vendor supported software package. The most critical aspect to the concerns raised in the memorandum is not the staggering cost, but the ability to gamer the necessary human resources to implement this much change in the County in a three year time frame. A summary of the projects, cost estimates of which where determined during the week of the vote by the Board of Commissioners, follow (all involve the year 2000 compliance problem): * Financial / payroll / human resource system - $7.0 to $8.0 million (contract negotiated to conclusion on October 8, 1996; on October 16 and 17, 1996 Strategic Planning and Finance / Personnel Committees for consideration). * Friend of the Court / CSES - $2.5 to $4.0 million (federal mandate; meeting held on this on October 9, 1996). * CLEMIS replacement - $4.2 to $4.9 million (results from CLEMIS strategic 2 plan performed by Plante & Moran; meeting held directly after October 10, 1996 Board meeting). 5. Facility program - as noted in Exhibit B, Facilities Management has assembled the estimated cost of facility needs over the next 5 years. The facility needs approximates $241 million (including the construction of a new jail, courthouse expansion, south- Oakland office building, Troy and Rochester District Court, and Medical Examiner facility) was discussed at the Planning and Building Committee on October 15, 1996. 6. Strategic Planning Committee - over the past several months, the Committee's roles and responsibilities in the development of a County-wide strategic plan have been defined. Shortly, the County will launch longer-term, departmentally-formulated plans prepared in a methodical manner. The property tax reduction negates much of the Committee's ability to function in a proactive (rather than reactive), deliberative mode. During the summer of 1996, the Strategic Planning Committee set a .1 mill property tax reduction as a goal to be achieved through the assistance of outside consultants starting in 1997. The 1997 property tax reduction recommendation by the County Executive endorses this Committee goal for 1997. 7. Twelve Town Drains - over the past year, the County has been negotiating the permitting of the Twelve Town Drains by the State of Michigan. Federal and State regulations, laws and mandates may require the investment of up to $100 million over the next several years. 8. Millage Reduction and Stabilization Fund (Fund) - as of September 30, 1996, the Fund has approximately $4.4 million in reserves. The County Executive recommended a property tax millage rate of 4.38, a reduction of $3.5 million in property tax revenue below the millage rate in effect in the prior year of approximately 4.48 mills. The reduction in millage from 4.48 to 4.38 was funded in a prudent and measured manner out of current operations. Departmental service levels were maintained and expanded where clearly necessary. The Fund's equity was not used to balance the proposed 1997 budget as a super-majority of the Board of Commissioners would be required to remove any amounts from the Fund. The additional, property tax reduction from 4.38 to 4.30 would result in an additional $2.6 million in revenue reductions that have not been funded. Departmental service levels will be adversely impacted in 1997 through position reductions in the unlikely event that the Board cannot obtain the necessary super-majority vote to remove an amount from the Fund. Further, the 1998 operating millage contemplated in the County's two year budget is tentatively set at 4.48 mills. Two alternatives already exist in this budget to retain the 3 property tax millage rate of 4.38 recommended by the County Executive: further reductions in service level (or a methodical implementation of plans developed through the Strategic Planning Committee and departments) or accessing the Fund's reserves, or a combination of both. Assuming that the entire $3.5 million balance to retain a 4.38 millage level was extracted from the Fund, this would leave approximately $1 million to go towards property tax relief in the 1999 fiscal year. Essentially, retaining the Fund's current integrity, rather than using it to address the present situation, is prudent and measured. 4 EXHIBIT A INFORMATION TECHNOLOGY NEEDS / ISSUES OAKLAND COUNTY, MICHIGAN October 17, 1996 COUNTY MICHIGAN DEPARTMENT OF MANAGEMENT AND BUDGET Robert J. Daddow, Director L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE TO: FROM: SUBJECT: DATE: L. Brooks Patterson John McCulloch Ken Rogers Doug Williams John Mahoney Jerry Poisson Vince Luzi Jeff Pardee Bob Daddow Information Technology Projects - Projected Costs October 12, 1996 Over the past six months, the nature, size and financial responsibilities associated with the major projects contemplated or underway at the Department of Information Technology has been identified - both as to the project and financial obligations. Many projects currently underway may not involve expenditures for quite some time. Many expenditures must be made today to avoid higher levels of expenditures later. Two major issues are reflected in the financial assessment of the projects attached: Year 2000 compliance problem. This problem is facing virtually every computer shop in this nation, and for that matter - world. * Customer-driven software. The County has invested in customized software approaches over the past 20 years in an effort to move technology to the manner in which the County performs its official business. Over the past 6 to 8 years, packaged software solutions have become more prevalent and must be considered going forward. This memorandum is a first cut at trying to clearly explain the size and financial commitments that this County is facing. While some of the projects cited herein are discretionary, the year 2000 problem will create a situation that REQUIRES the County to convert customer-driven software packages. Failure to do otherwise could expose the County to actions by County management based on information created by programs that have coding that cannot correctly account for time-based information. 1 EXECUTIVE OFFICE BUILDING • 1200 N TELEGRAPH RD DEPT 409 • PONTIAC MI 48341-0409 • (810) 858-0490 • FAX (810) 452-9215 The year 2000 problem is fairly simplistic, but critical to the proper operations of the computer. Cobol written programs, such as many of those in the County, are particularly susceptible to the problem. Basically, to reduce storage requirements, programs were written over the past 20 years to use two calendar year positions positions in place of four. The computer programming logic was programmed to understand that a "19" would be placed in front of the two year digits. While seemingly mundane, this situation will result in incorrect answers involving the financial system, jail tracking (days of stay in the jail), eligibility tests and many, many other uses of government information. The long and short is either we replace the offending software packages or go line by line of code to make sure that there is no problem shortly after midnight, December 31, 1999. Neither is a particularly satisfactory answer. Data files must also be reviewed for conversion to four digit years. In addition to the normal maintenance of programs and many smaller projects, the attached Exhibit represents major initiatives underway (expressed in millions of dollars). These estimates are very tentative and would require much more effort than is presently possible in this memorandum - should be used as a general target or understanding of aggregate funding needs over the next several years. The projects reflected on this Exhibit must be quantified so that this administration can begin to formulate a plan to address them. However, this listing excludes all new and maintenance projects less than $300,000. Presently, there are over 600 open work orders with a two year or more backlog of projects that have been accepted by Information Technology. Essentially, existing staff will not be able to provide any significant direction to address these major initiatives. Generally, there are two basic solution alternatives: replace the problem custom software with a package (and at the same time challenge the business practices performed by County departments) or go line by line changing the program code. The later alternative does not provide any significant benefit than providing the ability to operate beyond the 1999 calendar year. For example, assuming that all of the projects were currently underway and would be implemented before the year 2000. There are only 780 business days left between January 1, 1997 and January 1, 2000. Assume further than the $35.8 million to $60.1 million project total is correct, half attributed to hardware / software and the remaining costs associated with personnel and related implementation costs.. Effective January 1, 1997, the County would have to begin to spend (incur costs in a controlled manner using outside vendors) at a pace of between $46,000 to $77,000 per day. Since programming / implementation efforts can be purchased at $50 per hour (today, but expected to rise shortly), this would equate to obtaining between 59 to 100 or so individuals (assuming half of the costs noted above relate to labor) - either full time or via contractual employees starting January 1, 1997 for the next three years. Essentially, this clearly demonstrates that the County is in an untenable situation involving these projects. In short, we have a major problem - much of the future focus for Information Technology must be directed at this critical problem. 2 The remaining portion of the memorandum will discuss the individual projects, concerns and / or funding relating to the project, and its likelihood of moving forward. FINANCIAL SYSTEM ($7.0 to $8.0 million) The financial system includes: general ledger, receipting, billing, disbursements, payables, purchasing, budgeting, inventory management, cost accounting and similar functions. This portion of the system was installed in 1970 and modified ever since. There is little or no formal documentation on the coding of this system in its entirety. The system results in added labor in the Fiscal Services Division and throughout the County due to redundant processing efforts. The system is not year 2000 compliant. In addition, the County is actively pursuing the replacement of the payroll / personnel system (largely fringe benefits). Installed in 1990 or so, the system has been substantially modified to conform to the County's business practices. Upgrades for new system versions, if possible at this time, would require substantial effort. Many features that would enable a financial system to be fully functional are not present, or are labor intensive, including: labor distribution, time and attendance reporting, position control, fringe benefit tracking, and other features. The County is currently pursuing the replacement of the financial system and payroll / personnel system. The total cost of the project (excluding internal costs and related disruptions) would approach $7.0 to $8.0 million, including some provisions for project scope creep. Internal costs of time commitments are not yet calculated. The implementation of the financial system would include reductions of manual processes as outlined in a Plante & Moran study. This portion of the investment could be recouped in 3 to 5 years through staff reductions. The benefits of the payroll / personnel system are currently under review. COURTS ($3.0 million to $3.7 million) The County is presently reviewing several potential directions relating to the replacement of the County's three court packages - Probate, Circuit and 52nd District Court. In many instances, similar functions were programmed as separate applications within each of the three courts. The court packages are generally not year 2000 compliant, but may not have as many issues related to the year 2000 problem as a financial system does. The State is actively pursuing the consolidation of the courts into anyone of several potential alternatives. No one really knows how this will ultimately impact the court operations. However, regardless of what happens, the consolidation of the three courts will be a problem for the computer systems presently in place. 3 Over the past two months, the County has been actively pursuing the replacement of the courts' systems. The review was hampered by the resignation of the former chief judge of the District Court in July 1996. However, there are several demonstrations of standard court software systems coming up over the next several months. The first such demonstration would have resulted in a high-level projected cost of roughly $2.5 to $3.0 million - thus, the projection for the replacement of all three systems. Benefits would result from a series of labor reductions in many areas. Ticket processing could be streamlined as just one example in this process. Case tracking and passing of data from one standard system to another as a case proceeds from the lower courts to higher courts is another. DISASTER RECOVERY ($.3 million to $.7 million) Peat Marwick cited the County for failing to have a functional disaster recovery plan in place. The County has sought requests for proposal in March 1996 and received the proposals to serve in July 1996. Presently, Information Technology is reviewing the proposals to serve. Likely, the final result will be closer to the $.3 million cost, but it is really too early to tell. CLEMIS ($4.2 million to $4.9 million) The CLEMIS strategic plan, which was initiated during the negotiations with the police chiefs in June 1996, may result in replacing a significant component of that system. The records management system may be able to be replaced and improved over the County's system. The final Plante & Moran report is still pending. Over the past 60 days, the City of Novi entered into an agreement with a vendor to install a $600,000 records management system for its police department. Southfield is considering a similar system for roughly $800,000. The principal issues expressed in a survey to the police chiefs prepared and controlled by Plante & Moran involved the following: * Control over the CLEMIS destiny by the law enforcement community. The need to continue to maintain a County-wide database for use by the County Sheriff's Department and cities, villages and townships' police departments. Complaints by the police chiefs existed as a result of the high cost of maintaining CLEMIS data on the County's mainframe. * The need to provide a user-friendly approach to ad-hoc reporting of law enforcement data. Presently, the police chiefs believe that the data is input, but they cannot easily extract data from the CLEMIS system for information requested by their administrations. This was cited as one of the most important reasons by Novi and Southfield for moving 4 away from CLEMIS. In fact, it is our understanding that they are actively recruiting other CVTs to participate in their system as a means of mitigating some of the costs of these projects. Assuming that the County would replace its system, the funding of the project would have to be determined as to the County and police department portions. The current negotiations with the police chiefs have been placed on hold pending the release of the CLEMIS Strategic Planning report. JAIL MANAGEMENT SYSTEM ($2.0 million to $4.0 million) The jail management system is very labor intensive and many years old. It is not year 2000 compliant. Constant complaints have been expressed by Community Corrections as the data relating to this system does not readily permit an assessment of the crimes for which the individual is being held. REMOTE ACCESS / TELECOMMUTING ($3 million to $.5 million) The remote access project, which is currently underway, has provided the Board of Commissioners the ability to access the email system. This pilot project should be completed in late October 1996 or early November and would be the basis for serious discussions involving telecommuting. Previously, the equipment was not in place (nor was the appropriate security measures to prevent hacking) to enable the County to take advantage of this approach. The likely departmental candidates for this effort would include: public health nurses, sanitarians, CMH clinicians, and assessors. MISC. HARDWARE ($2.0 million to $5.0 million) Over the past three years, the County has acquired a substantial number of personal computers and related equipment. As programs continue to become more sophisticated, additional operational and storage capacity is needed - in short, the computers acquired in late 1993 or early 1994 may have to be scrapped or retrofitted. Some retrofitting of the laptops acquired just two years ago at a substantial cost (roughly $300 per laptop at 300+ laptops) was required simply to accommodate the memory needed to run WordPerfect 6.1. The hardware estimates do not include the necessary upgrades involving training efforts of an extraordinary nature arising from significant shifts in technology. One such example was the upgrade from WordPerfect 5.2 to 6.1. However, the computer industry is changing rapidly. Suites of products are now required. The County has acquired in the summer of 1996 sufficient separate software packages of County standard products to delay the inevitable suite problem. A decision as to Microsoft or NT is still upcoming - neither will markedly improve the operations of the County's computers, but will be required to run many of the more sophisticated programs coming on the market today. PROJECT MANAGEMENT ($.2 million to $.3 million) The reason why the project management (ABT, Inc.'s package called "Project Workbench") was included on the list involved the nature of the project. The funding has been sought and obtained. The project is underway, but will not be completed until the first quarter of 1997 (maybe second quarter). However, because the project involves ALL of the upper level systems analysts and programmers, the ability to supervise County projects and address many of the higher level issues noted in this memorandum will be diminished greatly until the system has been installed, understood via training, and then used for some time. Yet, failing to address this significant need will continue to result in departments not obtaining periodic reports, failing to understand the implications of "crisis" requests, etc. ASSESSING / EQUALIZATION (S.5 million to $1.0 million) To a large extent, this effort will continue to be performed internally. Year 2000 compliance is being addressed in this effort. However, because of Proposition A, the County is facing significant State mandated programming projects to keep up with the legislative and administrative changes to enable Proposition A. This will continue over the next several years. In addition to the above, the assessing and equalization systems provide cities, villages and townships significant billing data for use in their tax levies. This system is also year 2000 deficient. FRIEND OF THE COURT - CSES ($2.0 million to $3.5 million) The Maximus report, which evaluates the CSES project, is fairly critical and was issued several weeks ago. The Auditor General's report was also issued a week ago and it is very critical of the project's management and status. The Maximus report suggests that the County and surrounding counties (Wayne, Macomb, Genesee and Washtenaw) should begin to move to a regional system or potentially obtain a waiver of their own individual systems. While this approach would certainly be preferable over the implementation of the CSES in Oakland County (if at all feasible), substantial efforts will be required to make the County's 15 year old system federally compliant as well as year 2000 compliant. Last week, the Family Independence Agency (FIA) held a briefing of the Maximus report with county representatives from southeastern Michigan. It appears that the Maximus recommendation would be acceptable from the State's perspective. Three alternatives exist: * Resist any changes. Resisting any changes in the program implemented by the County would result in a lawsuit with the State. Also, the County's funding for the Friend of the Court would be in jeopardy. This is the least preferable solution. The County would still be faced with a need to bring the County's system into compliance with the year 2000. 6 * CSES / other system. The County can take a passive role and allow the State to impose either CSES (or a similar program from a surrounding state) onto the County and its regional "partners" of Wayne, Genesee, and Macomb. None of their systems are in a condition that would enable the County to use them and still improve operations; in fact, the County would lose functionality if their systems would be used. This alternative has been quantified and reflected in the attached list as being between $2.5 to $4.0 million, much of which would be funded by the State. The upgrades would be required to address year 2000 and the need for federal certification. Regional system. Development of a regional system, which may be based on the County's existing system, would be the most preferable solution to all other solutions. In doing so, the County would be able to use its existing system, upgrade it for federal certification issues, and the year 2000 issues. However, because the County's system was not designed to address the 400,000 cases (only 77,000 on the County's system), there may be scalability issues. Also, there would be a significant effort required to address system and business practice issues in the surrounding counties. The cost may be between $5 to $8 million, or much more. The ability to quantify this alternative is almost impossible at this time. YEAR 2000 ($.5 million to $1.0 million) While the individual major systems in place at Information Technology are being discussed, there are many, many more that are not included in this memorandum. The County must be prepared to analyze these individually, review hundreds of thousands of lines of code and correct the deficiencies when found. File evaluation and conversion would also be required. The task size is presently unknown and actions to date have been minimal (except in some very specific instances - payroll system for example). Information Technology is in the process of assembling a listing of applications that would have to be reviewed and a request for proposal to do so from an outside vendor. TAX SYSTEM - TREASURER ($.3 million to $.5 million) This system is presently being programmed by outside contractors. The project was started in 1995. It is a custom system and will require maintenance when complete. It is being funded via the Delinquent Tax Revolving Fund. GIS ($3.0 million to $5.0 million) The GIS project, which is underway, would include: acquisition of hardware and software, conversion costs, remontunentation costs, and similar efforts. The project is significant. While 7 much of the cost is outside Information Technology, many of the upper level personnel will have to continue to be active throughout this project. Presently, there is roughly 2+ full time equivalents out of 40 or so programmers who are working on this project. NETWORK UPGRADES - ACORN ($2.8 million to $4.0 million) The ACORN II upgrade is underway and should be completed by the end of the 1996 calendar year. The project was funded out of the equity of the Information Technology Fund and will have to be replenished over the next several years. The ACORN II project arose because of the network failures and capacity arising in the spring of 1996. The ACORN III project will be required in roughly two years. By the end of 1997 or mid 1998, the system will again begin to drag as more computers are added, additional traffic occurs and most importantly, the imaging projects require the transmission of data over the network. In addition, the GIS project will require the passing of significant data over the infrastructure as well. Bandwidth needs will continue to rise geometrically. Rates will be adjusted over the next several years to build a kitty for the funding of this project as well. DATA WAREHOUSING ($.5 million to $1.0 million) The data warehousing effort (pilot project for $75,000) has been approved by the Board of Commissioners. The data warehousing effort should enable the County administration access to data presently not able to be retrieved from the mainframe computer. While the data resides in the mainframe, it is not readily accessible due to different programs, operating systems and other barriers to its access. The data warehousing project, which would also involve cleansing of data maintained more than once, would enable the County departments improved information. One key system that would be able to use the data would be the GIS project. GIS is the comparison of spatial data to non-spatial data. Presently, even if the County had a GIS and a base map that was full converted, the non-spatial data may not be able to accessed for use in the GIS - rendering this effort to be marginally useful. While the data warehousing project was approved and started in March 1995, it was stopped almost immediately. IMAGING - COUNTYWIDE ($1.0 million to $3.0 million) The County-wide imaging effort, which is being analyzed currently, was started in February 1996. Proposals to serve have been returned from vendors. No funding has been sought and a formal cost / benefit report has to be prepared before launching. However, the current state of the imaging components attached to the Friend of the Court system is failing and will have to be replaced regardless of whether the County continues on a County-wide effort or not in the next year or so. 8 CMH MANAGED CARE ($2.0 million to $4.0 million) The State has been intending on moving to a managed care system for quite some time. If the County continues to maintain the responsibilities of the CMH program, then the software presently on-site at the CMH facilities will not support the billing requirements under a managed care arrangement. The system is fairly costly and probably would not replace any labor - in fact, it may be more costly to operate than the present system. Should the County's Task Force support an authority and that position is ratified by the Board, the County may not have to fund these system needs. MAINFRAME ($.8 million to $1.0 million) The County processes its transactions on many different hardware platforms. However, the County has two mainframe computers that are over 7 years old. While both are functional, they are not anywhere near the state of the art and are approaching maximum capacity. Also, they require two operating systems, licensing agreements and linking between the two mainframes. Use of one mainframe computer in place of the two probably could be cost justified. However, strong consideration should be given to replacing these computers with one mainframe in 1997. CHAMPS - HEALTH DIVISION ($.5 million to $2.0 million) The Health Division's CHAMPS system, which is used to track statistical and financial data, is not year 2000 compliant.PAAM / PACC ($.3 million to $.5 million) The Prosecutor's office has requested (for quite some time) a case management system. The PAAM / PACC system, which has been designed by the Prosecutor's association, will not cost the County for the actual software (other than annual licensing fees). However, PAAM does not fund the acquisition of equipment (preliminarily identified in the spring at roughly $150,000) and will not assist in the implementation / linking to other systems. As such, we have increased the list by between $.3 million to $.5 million. STRATEGIC PLANNING ($.3 million to $.5 million) Each of the individual departments will be preparing strategic plans in accordance with a discussion held between the County Executive's staff and leadership of the Board. This agreement plows the way to begin the County's departmental strategic planning initiatives. Each departmental plan will require input from the Information Technology Department in order to be meaningful. In addition, once the departmental plans are well understood, they need to be coordinated into a single Information Technology strategic plan - a plan that has not been completed since the early 1990s. 9 CLERK / REGISTER OF DEEDS ($2.8 million to $3.5 million) The Clerk / Register of Deeds is considering a land records management system for their present manual system. While the funding for this system will arise from the increasing of fees to pay for the system, the information maintained on this system would be helpful for the GIS. In addition, the information on this system will not reside in a vacuum - it will have to be linked with the County's other systems in order to be used. The County's Information Technology Department will have to be actively involved in this effort. OTHER Other systems and efforts not quantified: * Internet home pages - the County continues to develop (using internal staff resources) various internet home pages. Targeted departments include: Board of Commissioners, Clerk / Register of Deeds, Parks and Recreation, and Human Services. Enhanced access - the legislation on this project is still being debated in Lansing. Absent the legislative changes, no action will be taken to address this particular need. However, many of the separate projects underway (GIS, remote access, Internet, data warehousing and Clerk / Register), would enable the County to be in a position to distribute its data to the public. Once committed to this project, bandwidth and infrastructure issues may force the County into accelerating the ACORN III project presently contemplated to start in two years. * Maintenance - as noted previously, the substantial portion of the systems' programmers and analysts duties today involve maintaining the current software programs. Hardware and software efforts have become increasingly complex. Nominal changes in state statutes, departmental needs, and software / hardware version which appear to be nominal can become a very difficult problem to resolve. * MVS / VSE - while the County has periodically debated the use of these two operating systems over the past several decades, no projections have been identified relating to this direction. Changes from the County's VSE mainframe operating system to MVS would require hardware, software and training that could approach $5 to $10 million alone. An estimate cannot be accurately provided, but would be significant! Over the past several years, however, the two different operating systems have been moving towards one another mitigating the prior problems in this area. 10 * Welfare Reform Act - in the summer of 1996, the federal government passed the Welfare Reform Act. The impact on the County's operations, if any, cannot presently be determined. However, to the extent that the Act impacts operations, it most certainly will impact computer programs. Suites - the computer industry has moved to packages of software called "suites." The County's standard software packages are not located on one standard suite. Also, the industry is quickly moving to a position that will require the County to select one of two primary vendors for the suites - Correll or Microsoft. When selected, the packages may be cheap to acquire, but training County employees is expensive. The cost of this problem has not been identified. FUNDING CONSIDERATIONS The following are the initial funding recommendations: * Financial / human resources - funds have been included in the County's General Fund to cover most of the costs of this project. * Courts - the County has been setting aside P.A. 189 funds to cover the future replacement of this computer system (or enhancements in the County's court operations). At September 30, 1996, the County should have roughly $3 million in this Fund. * CLEMIS - a portion of the cost of this could be allocated from the local governmental units benefiting from the use of this County-wide system. * Assessing / equalization - a portion of the cost of this could be allocated from the local governmental units benefiting from the use of this County-wide system. * FOC / CSES - despite an outstanding request since August 1995, the State has not provided the County direction as to what costs the State intends on funding and the expectations of County funding for the replacement of the County's FOC system. Funding would, at least in part, by covered by the State. Tax system - covered by the Delinquent Tax Revolving Fund as administrative expenses. CMH managed care - the County would expect that 90% of the costs of this project would be borne by the Community Mental Health operations. However, the CMH program has been plagued by State cutbacks and direct consumer services would be impacted in the development of this system. 11 * CHAMPS (Health) - potentially a small portion of this effort could be covered by the CPBC program covering the County-wide administrative costs of the public health programs. * Clerk / Register of Deeds - the Clerk / Register intends on increasing fees to the users of the system to cover a portion or all of the costs of the system. All other projects noted on the attached list would generally be funded by the County's General Fund. One other issue arises in the replacement of various systems presently operating on the County's mainframes. When the County moves various programs from the mainframe to servers (or moves the entire function out of the County operations altogether), the County's allocation of costs (most of which are fixed) of mainframe operations must be spread over a smaller and smaller base. Eventually, the fixed costs will be applied to a base so small as to become too costly to operate. This situation is similar to the trade-off dollars relating to CMH. The County has yet to resolve what will happen when the County continues to down-size its mainframe computer operations. During the 1980s and into the early 1990s, the County's strategic direction involved heavy reliance on the mainframe computer via customer-driven programs. The County's present direction is to actively divest itself of these programs and begin to rely upon software vendors to support their own products. Many of these products have the "best business practices" programmed into the software packages providing the County the benefits of many commercial and governmental organizations operating practices. In short, the County may have to cover fixed costs of Information Technology at some time in the future as the base of allocation declines. One method of doing so would be to expand the base - for example, combining the Oakland Schools, Road Commission, and County Information Technology would so just that. Very preliminary discussions have been held at a minimal level concerning certain operations that could be performed cooperatively with Oakland Schools. This issue, however, is highly dependent upon how many systems are taken off the County's computer. More to follow on this issue. CONCLUSION In short, the County has a major problem on its hands. While we cannot idly stand by and allow technology to pass the County by, the County cannot realistically afford all of the projects noted in this memorandum. No resolution to this issue can be determined at this point. It has been shared with the above individuals with the hope that a business problem identified can be addressed. 12 While the size of the funding is staggering, the most critical two factors that will impact the County's ability to resolve these matters are time and external resources. While internal resources, both financial and personnel, are somewhat controllable, the County is competing with all other governmental and commercial entities against a limited set of programmers in the nation to address one problem (most entities have not even realized they have a problem or have delayed the resolution): year 2000. I would strongly encourage a meeting to discuss the County's Information Technology strategic direction. It should be soon - the year 2000 clock is ticking. 13 MAJOR COMPUTER PROJECTS - EXHIBIT A (in millions) OAKLAND COUNTY, MICHIGAN October 12, 1996 Range Yr. 2000 Low High Compliance? * Financial system / Payroll / H.R. $ 7.0 $ 8.0 No (payroll - yes) * Court 3.0 3.7 No * Disaster recovery .3 .7 N/A * CLEMIS 4.2 4.9 No * Jail management system 2.0 4.0 No * Remote access / telecommuting .3 .5 N/A * Misc hardware / replacements. 2.0 5.0 N/A * Project management ._ .2 .3 N/A * Assessing / equalization (includes billing) 1.5 2.0 No * Friend of the Court / CSES 2.5 4.0 No * Year 2000 .5 1.0 No * Tax system - Treasurer .3 .5 No * GIS 3.0 5.0 N/A * Network upgrade - ACORN II 1.3 1.5 N/A * Network upgrade - ACORN III 1.5 2.5 N/A * Data warehousing .5 2.0 N/A * Imaging - countywide 1.0 3.0 N/A * CMH managed care 2.0 4.0 No * Mainframe .8 1.0 No * CHAMPS - Health .5 2.0 No * PAAM / PAC .3 .5 N/A * Strategic planning assistance .3 .5 N/A * Clerk / Register - land records 2.8 3.5 N/A $35.8 $60.1 Note: The above projects are described in a memorandum dated October 12, 1996 as to the commitments required, status of the project, benefits and other matters of significance, The projects reflected above do not include the roughly 600 open work orders (involving new and maintenance projects) valued at less than $300,000. These work orders represent two years of backlog based on existing staff levels. 14 The column involving the year 2000 compliance indicates which system is compliant (yes - compliant; no - not compliant) or N/A because the project is underway or contemplated (and therefore future vendor packages or programming efforts would anticipate compliance). The above projects do not consider the following because they cannot be quantified (even at a high level): enhanced access; Welfare Reform Act; MVS / VSE; Internet; and suites / training. 15 EXHIBIT B FACILITY MANAGEMENT ISSUES / NEEDS OAKLAND COUNTY, MICHIGAN October 17, 1996 Project Total $925,000 7,150,000 * 10,200,000 4,700,000 150,000 7,860,000 6,400,000 • 1,050,000 77,000,000 * 200,000 7,700,000 1,000,000 80,000,000 • 7,000,000 * 900,000 • 1,000,000 11,000,000 1,700,000 2,500,000 • 400,000 400,000 400,000 • 400,000 130,000 4,500,000 350,000 67,300 136,000 850,000 300,000 $236,368,300 2,159,000 75,000 180,000 • 950,000 75,000 150,000 95,000 75,000 200,000 125,000 175,000 1,225,000 $5,484,000 1$91 FY1997 $625,000 5,000,000 • 4,500,000 3,000,000 150,000 300,000 550,000 * 210,000 107,000 300,000 • 200,000 200,000 200,000 67,300 136,000 850,000 300,000 $1,563,300 $15,132,000 300,000 75,000 180,000 • 1,225,000 $1,225,000 $555,000 _ sumioo A15.687.000 FY1597419118 300,000 2,150,000 " 5,700,000 1,700,000 4,500,000 4,650,000 • 200,000 25,200,000 • 5,000,000 200,000 750,000 • 2,000,000 • 400,000 • 200,000 11,000,000 100,000 50,000 130,000 Future 199811999 200012001 200112002 Years 900,000 700,000 200,000 • 2,300,000 * 350,000 400,000 400,000 • 400,000 300,000 3,000,000 1,200,000 350,000 2,500,000 200,000 200,000 12,000,000 • 25,000,000 • 5,000,000 • 500,000 • 200,000 200,000 400,000 Ongoing 200,000 Ongoing 25,000,000 • 17,250,000 3,060,000 1,200,000 • 200,000 240,000 51,500,000 • 93,000 Ongoing 200,000 125,000 175,000 $1,525,000 $750,000 $204,000 $1,225,000 $0 Astpscgoo _$82,760,000 _$30,044,000 426,918,000 517,600,000 10/09/96 $64,630,000 180,000 950,000 75,000 150,000 95,000 75,000 $62,010,000 250,000 $29,840,000 $25,693,000 $17,600,000 1,225,000 204,000 CAPITAL IMPROVEMENT PROGRAM 1997 through 2001 4, Priorities BUILDING PROJE_CIS Pita C.E. Project 1 Probate Court Renovations 2 South Oakland Office Building 3 Medical Examiner Facility 4 New Troy District Courthouse 5 Courthouse Master Plan Update 6 New Work Release Facility 7 CMH Crisis Center 8 Roof Replacement Program 9 Medium Security Jail Addition 10 Renovation of former State Police Post 11 New Rochester District Courthouse 12 Miscellaneous Remodeling Future Courthouse Addition & Renovations Courthouse Parking Deck CMH Building HVAC System Improvements Electrical Upgrades Purchase of CVC Jail Observation Cell and Kitchen lmporovements Former Work Release Facility Renovation Renovation of former Medical Examiner Area Public Works Buidling Air Conditioning Replacement CMH Building Air Conditioning Replacement Jail Air Conditioning Replacement Courthouse Receiving Area Security Gate Children's Village "J" Building Addition Sheriff Department Outdoor Gun Range Proiedri-APPLOpriated In 1996: Medical Examiner Facility - Pm-planning Children's Village Administrative Annex II Renovations Courthouse Heating COST OF BUILDING PROJECTS ROADS_AND PARKING LOLPROJECTS 1 Service Center Road Maintenance Program - Children's Village 2 Children's Village "A" Building Parking Expansion 3 Repaving Central Garage Parking Lot Courthouse Road Relocation Expand Medical Care Facility Parking Lot Repave Executive Office Bldg. North Parking Lot Public Works Parking Lot Expansion Repave Material Management Parking Lot Repave Annex ll Parking Lot Repave Children's Village School Parking Lot Health Center Parking Lot Repaving and Improvements Projects_Appropriateil Service Center Road Maintenance Program COST OF UTILITY PROJECTS TOTAL COST OF CAPITAL IMPROVEMENT PROJECTS _4241,852,300 • The recommendation is to consider financing these projects through the sale of bonds or alternative sources. FUNDING Project Total 2,150,000 • 25,200,000 2,000,000 750,000 550,000 • 4,650,000 400,000 • 180,000 • 51,500,000 * 5,000,000 • 12,000,000 • 25,000,000 • 25,000,000 " 17,250,000 1,200,000 • 500,000 • 10,954 5,000,000 • 300,000 18,820 (16,737,980) (26,747,980) (27,141,980) (26,909,980) 1,000,000 1,000,000 1,000,000 1,000,000 1.000,000 1,000,000 1,000,000 1,000,000 1,000,000 150,000 150,000 150,000 150,000 1,622,620 1,000,000 200,000 1,900,000 3,991,200 762,000 200,000 1,200,000 11,348,200 600,000 CAPITAL IMPROVEMENT PROGRAM 1997 through 2001 Future 1916 FY1997 Et199111193 199811999 200012001 2001/2002 Years Carry Forward From Combined Fund From Previous Year Plus Transfer From FM&O Fund Operations Plus Transfer From FM&O Fund Balance Plus Transfer From Telephone Communications Fund Plus Transfer from General Fund (Includes future space requirements) Income from sale of Royal Oak Market & Fourth Street & Troy Street Income from Fund close out of Royal Oak Market Reimbursement From Bonds / Alternative Funding Sources Refund of Closed Work Projects 10,954 South Oakland Office Building 7,150,000 " Medium Security Jail Addition 77,000,000 * Courthouse Parking Deck 7,000,000 * Future Courthouse Addition 80,000,000 * CMH Crisis Center 6,400,000 " CMH Building 1-'IVAC System Improvements 900,000 * Repaving Central Garage Parking Lot 180,000 CMH Building Air Conditioning Replacement 400,000 • Former Work Release Facility Renovation 2,500,000 * Total Reimbursement from Bonds / Alternative Sources $181,530,000 TOTAL AVAILABLE FOR CURRENT YEAR MINUS Current Years Projects CARRY FORWARD AVAILABLE FOR NEXT YEAR 1,533,340 1,000,000 1,136,000 580,626 150,000 400,000 * 2,500,000 * $0 $6,030,000 $35,150,000 ;70,600,000 $27,500,000 $25,000,000 $17,250,000 4,410,920 15,705,820 49,317,020 56,012,020 2,902,020 8,020 (7,509,980) 2,788,300 15,687,000 66,055,000 82,760,000 30,044,000 26,918,000 17,600,000 $1,622,020 ;18,820 4$15.737.980) 1$26,74T,980) ($27,141,980) ($26,909,980) 1$25,100,980)