Special Reports

Adding up the costs

Tacoma’s new computer system installation was billed as a $50 million project, but its true cost is far more than that.

City officials now estimate the cost of installation plus two years of operation at $67 million, said business information systems department spokeswoman Karen Jones.

A News Tribune investigation, however, calculates the cost will reach $74.3 million.

Here are two breakdowns of the costs that are known – one based on Jones’ figures and one reflecting information gleaned during a News Tribune investigation:

  City estimate News Tribune estimate
Installation $50 million $50.6 million*
Pre-project costs N/A $4 million**
2004 BIS/SAP costs $8 million $8 million***
2005: BIS/SAP costs $9 million $9 million***
2004 customer service consulting contracts N/A $753,740
Extra customer service agents in 2003/’04/’05 N/A $1.6 million
2004 work on city’s retirement systems N/A $50,000
2004 contract for training software N/A $198,302
Interest/late fees due to computer problems N/A $12,210
Total $67 million $74.3 million

*Includes $651,600 in overtime and other costs added to final project budget in January 2004.

**Money spent on consultants, site visits and other aspects of the selection process from 1999-2002. The city does not count this in the overall project cost.

***2004 and 2005 BIS/SAP costs include personnel, licensing agreements and consultants needed to operate the system.

N/A (not applicable): The city does not calculate these in the overall system cost because they were charged to noncomputer departments. The bill for customer service employees, for example, is part of that department’s cost of doing business.

Sources: City of Tacoma officials and documents

Where does the money come from?

Tacoma Public Utilities’ 150,000 ratepayers are picking up about 54 percent of the tab for Tacoma’s new computer system. The city’s public works utilities – garbage, sewer and stormwater – are paying about 26 percent. Several newsletters and announcements touted the efficiencies the system would bring and included information on ways ratepayers could easily make their payments – via the Internet, pay stations or over the phone. But they didn’t mention the new technology would add about 0.5 percent in administrative costs onto each customer’s bill. That would be 75 cents if a two-month utility bill were $150.

At City Hall, each department paid for the system according to its use. Some departments paid their costs up front from money allocated to them in their annual budgets. Others borrowed money, said budget director Diane Supler.

The City Council approved a $7 million limited tax general obligation bond to help some departments finance their share of the system. The bond is being repaid over 10 years.

Kris Sherman, The News Tribune