(April 25, 2014) With final budget discussions slated for this coming Tuesday, and the first reading of a passage ordinance scheduled for May 5, the Town of Ocean City is still roughly three weeks out from finalizing its 2014-2015 fiscal plan.
But while city leaders are looking to cut at least part of extra penny the city is proposing to tack onto to the tax rate, a number of unfunded but arguably necessary expenditures are still out in the wind.
In particular, City Engineer Terry McGean recently described the town’s Information Technology budget as a “tread water” proposition.
Simply by the nature of the beast, large-scale IT operations are like The Blob – they have to expand in order to survive.
“This year was really tough, we were already $126,000 over where we were last year, so we only put the critical things in,” McGean said. “Next year, there will be another batch of high priorities and we’ll have to go through this again.”
The city IT budget is currently projected at $1,996,239, a 6.8 percent increase over last year. But this is likely far below the rate of growth necessary to sustain the operation.
As McGean explained, the accepted industry standard is that a new piece of technology will cost 15 percent of its purchase price each year after that in upgrades and support. Thus, the purchase of new technology will reduce the availability of funds to purchase more technology in the future, assuming the budget is fixed.
To illustrate, McGean presented City Council with a pie chart of the department’s expenditures. A blue section represented new purchases that were not really new, but updates and upgrades to existing equipment in order to keep it functional.
“The green slice of the pie pulled out is the amount in our budget that I would actually call ‘new stuff,’” McGean said, noting that the green slice is only about nine percent of the budget.
“Every time we purchase a piece of new software, the blue slice gets bigger and it makes the green slice smaller…unless the pie grows.”
In fact, the “blue slice” is probably smaller than it should be, given that the city is straining to catch up on upgrades. The budget includes replacement of 50 Windows software packages next year – but this will still leave the city with 226 PCs running Windows XP, which Microsoft has declared obsolete and no longer supports.
The most important, and pricey, part of McGean’s list of unfunded projects was implementing an external, third-party backup system for the city’s servers.
The town stores all financial, budget, and property tax data on an AS/400, a specialized server created by IBM, which comes with offsite back-up. However, the city’s main servers – i.e., those which store everything not related to accounting and taxation – are located at the Public Safety Building on 65th Street and are backed up internally by the city’s own network software.
“That backup process takes longer and longer and it uses up more and more of the capacity of the virtual servers,” McGean said.
What would be less of a burden on the city’s network would be to have a third party pull data from the city and back it up using software outside the city’s own network, reducing the clog. This would cost $43,000 annually, plus an additional $30,000 one-time setup cost.
Even more secure, McGean said, would be for this third-party to replicate the city’s network on their own servers, located elsewhere. That way, if a catastrophic malfunction were to occur at the Public Safety Building, all would not be lost. This would cost another $46,000 per year, but would guarantee the town to be fully restored within 48 hours of system failure.
The impact of these costs are being felt by municipalities across the state and nation, which is why Maryland is currently looking at setting up a state-run backup system.
“They are looking to become that third party,” McGean said. “We are hoping we’ll be able to work with them to do this cheaper.”
However, the state has no timeline as to when such a service will be available.
“We tend to get things done a lot quicker at this level,” said Council Secretary Mary Knight.
McGean also said the city was due for a risk assessment of its network – which, while more esoteric than buying a hard piece of new technology, was no less important.
“I suspect a risk assessment is just going to tell us we should have offsite recovery,” said Councilman Dennis Dare.
On the other hand, Dare said, the city could not hurt itself by having some type of outside security review, given the number of high-profile data breaches occurring around the country.
“Target probably cut that out of their budget, too,” Dare said, referencing the incident late last year in which hackers released 40 million credit and debit card profiles of the chain store’s customers.