Thursday, March 16, 2006

More on how the City of Austin exaggerated its Open Government Online cost estimate

I've written earlier how the city legal department's grandiose assumptions about the scope of the Open Government Online amendment caused the City of Austin's IT department to overstate its cost estimate. Then a city staffer revealed on his private blog how the choice of software for the job might save millions in licensing fees from the City's estimate, even with their cadillac assumptions. Now has posted a document pointing our additional places where the City's cost estimate is overstated. Here's the complete text:
Why the City of Austin Cost Estimate for the Proposed Open Government Online Charter Amendment is Inflated

Fearing public scrutiny of excessive lobby influence, Austin city officials have issued an estimate of $36 million for implementing the Austin Open Government Online charter amendment. The city's figure dramatically overstates the real costs. The City’s estimate has little to do with how the amendment would actually be implemented. Instead, the city merely multiplied out current costs and assumed the most cumbersome possible methods of implementation in order to come up with the highest cost possible.

In reality, the shift to a paperless system and dramatic economies of scale would mean the costs will likely be much lower than the city has stated. All over the globe companies are investing in paperless systems to SAVE money – only in Austin city government, we’re asked to believe, are such savings impossible to achieve. Here are the main reasons the City’s costs are overstated:

* The City's estimate assumes City business will still largely be done by paper, and thus a large part of the cost estimate consists of hiring a bunch of people to scan and organize documents. This is absurd – it’s the technological equivalent of estimating costs for photocopying by calculating how much it would cost for monks to transcribe every document by hand. The shift to paperless information systems is already in process because it saves large sums of money.

* The City’s estimate incorporates large expenditures to create functionality not required in the amendment – for example, staff and systems for vetting and placing online email correspondence for council members, city managers and department heads in “real time.” While that would be expensive, it’s simply not required by the amendment.

* The City admits its estimate completely excludes expected savings from more efficient operations and eliminating the need for the staff and copying costs required for responding to public information requests.

* The City calculates $7 million in costs for its EDIMS document management system by taking costs for scanning technology and software licenses it currently uses, then assuming virtually every city computer would require a copy. Current licensing arrangements require every computer to have a separate license, but other web-browser-based systems would allow many City employees to access the system without each desktop computer having a separate license. Rather than estimate costs based on these cheaper systems, the City assumed it would only use the technology it currently employs, generating this astronomical figure.

* The City admits that its staffing figures – estimated at $6 million per year, recurring – are the “softest” figures in the estimate. Staffing costs are inflated because of false, highly politicized assumptions that govern what that IT department was asked to cost out. Thus, even though the amendment does not require real-time publishing of email online (it leaves all such decisions to the city council to decide when they implement the charter amendment through ordinances), the cost estimate includes hiring many new staff to vet hundreds of thousands of email each month to put online in real time. Since the city’s estimate takes into account no possible savings, it ignores the possibility that changing protocols to use paperless systems would decrease, not increase, staffing needs, e.g., if the city had to respond to fewer open records requests.

* The city misreads the amendment to require immediate transition to online disclosure of all public information. This leads to millions in consulting costs for immediate implementation. The truth is that only a few areas of city business must be posted online within one year of passage; the remainder must be done as “expeditiously as possible” and "to the greatest extent practical." This “practical” basis means implementing public disclosure of city information on the internet as soon as it becomes possible, on a timeline that makes sense, in a practical manner that would SAVE taxpayer money, not cost them more.

* The City estimates it will need more than 1,500 new desktop computers to implement the system, but most of these are replacements they’d have to purchase anyway. Plus, if the city used a browser-based document management system instead of the specialty software it currently uses, most of those hardware purchases would be unnecessary.

* The City estimates more than $10 million would be required in consultants’ fees, but its estimate contains almost no detail about what those consultants would do or how the number was arrived at. While some consulting costs might be necessary, this number appears to have been plucked out of thin air.

* The City estimates roughly $1 million to give the public access to information they already intended to give to developers, city vendors and candidates for tax giveaways. This is likely dramatically overstated since they already planned to give people outside city government access to most of this information. Giving the public direct and timely access is only a minor change to the city’s system. With greater public scrutiny citizens can help eliminate wasteful spending and needless tax giveaways.


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