Special Reports

City computers under fire

Tacoma's new $50.6 million computer system has "given the city a black eye," cost more than some people are willing to admit and set employees on edge, the city's finance director said.

As costs and complaints escalated, top city officials "did a very poor job of being straight with the City Council on where we were," Finance Director Steve Marcotte said Tuesday.

Those in charge have called the massive computer overhaul a success almost since it went live last fall - and the project director will receive $8,500 in performance pay for the successful conversion. But internal communications and public comments continue to show performance problems and internal dissent over the project.

Amid the questions, members of the council's government performance and finance committee plan to discuss an independent study of the new computer system when they meet Thursday.

Issues ranging from botched bank deposits to utility bill disputes to payroll problems have bedeviled the system almost since it has been online.

Marcotte thinks the system "went live" three months before it was ready. And because of his concerns for the way the Business System Improvement Project's managers accounted for a cost overrun, Marcotte refused to sign their request for an additional $651,600.

The City Council approved the expenditure last month, but there were disagreements about the actual amount of the cost overrun.

Business Systems Improvement Project director Karen Larkin disagrees the system "went live" too soon.

"We had a very specific process that was established with very specific criteria we had to meet," she said. A leadership forum reviewed those and made recommendations to City Manager Jim Walton and Utilities Director Mark Crisson, who ultimately approved the startup, Larkin said.

In addition, computer installers never expected instant perfection, she said. But the problems were manageable, particularly considering the size and complexity of the system, Larkin added.

Eventually, Larkin and others say, the integrated network that replaced 102 antiquated systems will make customer service more efficient and could save millions by reducing the number of city employees.

Recently released documents show sensitivity about the project's performance and cost.

In one case, Dave Otto, director of the city's new information technology department, cautioned retirement system director Patricia Pabst to monitor her use of a $132.50-an-hour computer consultant.

If the tab went past $50,000, the contract would automatically go to the council for approval - "which I don't think we want to do," he wrote in a Jan. 5 e-mail.

News of Otto's comment drew a sharp response from Councilwoman Julie Anderson, who has quizzed computer system directors about their budgets.

"I'll be very disappointed if I learn that more money was spent on this than the council approved."

Otto defended the memo on Tuesday, saying department directors have the authority to authorize contracts up to $50,000 without council approval.

"The council made it clear we weren't to bring back any more proposals for money," he said. But the retirement system needed the work, and "if it could be done for under $50,000 we were on our own prerogative to sign for it, I just reminded her (Pabst) of that."

Frustrated with system problems and angry over the way he believed Larkin overrode other city managers to get her way, Marcotte wrote a harshly worded memo last month as managers discussed what the city is likely to get in exchange for its $50 million expenditure.

"The obvious problem here is that our implementation could not stand up to any close scrutiny," Marcotte wrote in a Feb. 5 e-mail to Otto. "We invested a very large amount of money - much more than is admitted - and so far we have received degraded systems."

Marcotte also said he believed Larkin botched the job.

"She screwed up the go live denying everyone involved the satisfaction of a difficult project successfully completed," he wrote. "We continue to cover that fact with deceit and denial."

Other internal memos detail problems. Some examples:

•On Dec. 24, Marcotte told computer system managers the city was overdrawn at the bank for the third time in amounts as high as $4.5 million.

•City finance employees worried that payroll glitches could bring penalties and fines for not meeting legal requirements.

•One investment report detailed how all transactions were treated as positive entries, so a true balance of $12 million might show on the books as $32 million.

Walton acknowledged this week that there are problems with the system, but he said city staff members are attacking them with an action plan and he's confident they'll be solved.

Walton and Crisson recently authorized giving Larkin $8,500 in performance pay out of a possible $12,000 for meeting most of the project's goals.

Mayor Bill Baarsma is hopeful - but he's also worried.

"We've got a lot of money invested in this program. All of us are crossing our fingers to the point that they're almost turning red, hoping on hope that it's going to achieve the miracle that's been conveyed to us and that it's going to attract the kind of worldwide attention that's been promised," Baarsma said.

But he's so concerned, he added, "I'm going to go back and check my W2 form."

Kris Sherman: 253-597-8659