HomeMy WebLinkAboutFIN 28-13 Resolution #150/13
City 4 „A Dated December 9, 2013 Report to
Executive Committee
Report Number: .FIN 28-13
Date: December 2, 2013
From: Paul Bigioni
Director, Corporate Services & City Solicitor
Subject: Awarding of Contract for Property Tax Software Implementation
Recommendation:
1. That Report FIN 28-13 of the Director, Corporate Services & City Solicitor
regarding the awarding of a contract for property tax software implementation be
received;
2. That, pursuant to Purchasing Policy Sections 09.09 and 09.10, Council award the
contract for the City's new Property Tax Software, including licence and
implementation, to the Corporation of the City of Mississauga, on terms
satisfactory to the Treasurer and to the Director, Corporate Services & City
Solicitor;
3. That the total gross Property Tax Software project cost of$299,450 (HST
included) and $269,664 (net of HST rebate) be approved;
4. That the Mayor and the City Clerk be authorized to execute the said contract;
and,
5. That the appropriate officials be authorized to take the necessary actions to give
effect thereto.
Executive Summary: A key component of financial management is to ensure that
the City provides the necessary tools and resources for staff. The need and the
rationale for a new financial system was supported as a Corporate Priority during the
2011 and 2012 budget process. Council supported senior management's request by
providing funding and approval for a new property tax system in the 2012 Capital
budget.
The current taxation system generates 30,000 property tax bills per billing cycle for a
total billed amount of$195 million. The City's current property tax billing system is
approximately 16 years old and is plagued by technical and support issues. The current
software requires IT support on an ongoing basis to modify reports and to make minor
programming changes. Many processes are manual and require extensive staff time.
With Seaton development starting in approximately two years, the goal is to have the
new taxation system up and running by 2015 to meet the City's current and future
needs, including the additional volume of transactions that will result from Seaton. The
Report FIN 28-13 December 2, 2013
Subject: Awarding of Contract for Property Tax Software Implementation Page 2
City's Purchasing Policy, Item 09.09 states: "A single source purchase exceeding
$125,000 is subject to Council approval." In addition, Purchasing Policy, Item 09.10
states "The Manager and appropriate Director or designate is authorized to enter into
negotiations without competitive bids and enter into a contract if deemed
advantageous."
The City's Purchasing Policy requires Council approval before the property tax
implementation contract can be awarded to the City of Mississauga. The City of
Mississauga has developed its own property tax software and will licence the City of
Pickering to use its software. As with any new financial software, there is a cost
associated with installing the new system, building interfaces and converting the old
data. Recommendation three includes the cost associated with those tasks.
Financial Implications:
1. Software Conversion Costs
Property Tax Conversion Costs $236,720
Miscellaneous Contingency 28,280
Sub-Total Costs $265,000
HST (13%) 34,450
Total Gross Amount $299,450
HST Rebate (11.24%) (29,786)
Total Net Project Costs $269,664
2. Source of Funds
Taxation Billing System Upgrade
Account Code Budget Required
5203.1201.6174 $275,000 $269,664
Project Cost under (over) approved funds by $5,336
The Division Head, Finance & Treasurer has reviewed the financing of the expenditures
contained in this report and confirms that it is appropriate.
The 2014 Current Budget will include a provision of$65,000 for a temporary staff
person to backfill in the tax section while the Supervisor, Taxation is seconded to the
property tax software implementation project. The hiring of temporary staff to backfill
for seconded staff is a common software implementation strategy. In addition, the
2014 capital budget will include $90,000 for an operating system software upgrade to
run on the City's file servers for the TXM software. This system software upgrade will
Report FIN 28-13 December 2, 2013
Subject: Awarding of Contract for Property Tax Software Implementation Page 3
also accommodate a planned update to the City's Amanda land management system
and will save an operating system software upgrading cost of$23,000 originally
expected for the Amanda system.
Discussion: Five key corporate priorities provide long term direction for the City.
Sound financial management is one of those priorities. Financial management, in its
simplest terms, ensures that funds are available for Council-approved projects, that
funds are properly spent as per Council policy, and that all transactions are recorded to
meet external reporting requirements. Without good financial management,
achievement of the City's other corporate priorities is put at risk. It is said that "an army
marches on its stomach," meaning that soldiers function effectively if they are well fed.
Similarly, a municipal government functions effectively if it has sound financial
management.
Financial staff, beginning in 2011 and continuing in 2012, outlined to Council the need
for the City to replace its existing financial information systems. The taxation module
was selected first as it will be directly impacted by Seaton. It is advantageous to
replace the property tax system before development in Seaton increases the volume of
tax-related transactions.
The Mississauga property tax system (TXM) includes the following functions: billings,
property tax account changes due to successful appeals, Section 357 adjustments,
rebate programs, collections, and reporting. In addition, the software vendor has to be
able to quickly interpret and understand the frequent legislative changes (Municipal Act
and Assessment Act) in order to keep the software relevant and functional.
The City of Mississauga developed the Tax Manager (TXM) tax system in-house with
the co-operation of staff of its municipal clients, Markham, Brampton and Richmond Hill.
TXM has been operating in the four municipalities as their tax system since 1998 and
has been updated to reflect various legislative changes. TXM has the capability and
functionality required for the City of Pickering today and for the future. It is highly
flexible, modular, easy to maintain and simple to use, with a focus on customer service
excellence. In addition, the City of Mississauga has a dedicated in-house legal staff that
specialize in municipal legislation. Any Provincial legislative changes, as they relate to
property taxation and/or assessment, are reviewed by this experienced legal team and
then incorporated into the next version of TXM.
The software industry is a very competitive environment in which companies may only
exist for a few years. When software companies disappear, the user is left scrambling to
find an alternative system or solution. By adopting software developed and used by a
large municipality, the likelihood of default or non-support is kept to a minimum.
Report FIN 28-13 December 2, 2013
Subject: Awarding of Contract for Property Tax Software Implementation Page 4
Analysis
The City's Supervisor, Taxation was directed to review and evaluate available property
tax systems. Prior to joining the City, the Supervisor, Taxation also worked on two other
property tax systems. She did a thorough review and analysis of several property tax
systems based on the following methodology:
• Software survey initiated through the Tax Collectors' professional membership
Ontario Municipal Tax and Revenue Association (OMTRA)
• Phone surveys
• On-site demonstrations
• Reviewed testimonials from both current and past users of software packages for
an unbiased review of the software. Users were surveyed for comments on
software support, functionality and performance
• Reviewed software investigations of other municipalities
• Interviewed software support staff and developers
• Reviewed online company websites and blogs
Tax software investigations included Open Tax (AMANDA), Diamond GP (Great Plains),
Assyst (USTI), Vadim, Mississauga Tax (TXM), and Vailtech. After a thorough
evaluation, several tax systems were eliminated due to inadequate functionality, limited
capacity, or poor technical support. The Supervisor, Taxation tentatively concluded that
TXM would be the best product for the City to purchase, due its superior functionality,
support, capacity, and cost. The next step in the process was to compare the City's
current property tax system with TXM.
Process/Feature TXM - Mississauga Current Tax System
Capping Calculations Calculated within system OPTA calculates capping
and it is imported to system.
Recalculation of Recalculated within system after Capping not recalculated
capping adjustments each change event for each year. following event. Must wait
due to adjustments for OPTA to verify change
and then enter to system.
Apportionments Fully automated including owner Manually calculated on
notifications and recalculations of spreadsheet and entered
capping adjustments and into system.
subsequent years taxes.
Vacancy rebate Requirements validated and Calculation done within
calculations calculated in system. Notifications system. Manual notifications
generated for MPAC and owner. and allocation of rebates.
Full allocation of rebates
including education.
Rebate calculations Rebates automatically Manual recalculations after
due to change events recalculated following change change event.
event.
Report FIN 28-13 December 2, 2013
Subject: Awarding of Contract for Property Tax Software Implementation Page 5
Process/Feature TXM - Mississauga Current Tax System
Tax & assessment Fully automated, including Calculates appeal, but does
appeals notifications. Recalculates not recalculate capping,
capping, tax adjustments and taxes or penalty after
penalty for all years following change event. Notifications
change event. Generates tax bill produced manually in Word.
for tax changes. Tracks No tracking abilities.
applications and generates
reminders.
Tax Billing Interim taxes calculated in System must be
accordance with legislation at manipulated to comply with
50% of previous year. Duplicate legislation for interim
bills can be reprinted as original billings. Can reprint original
or amended. bill only.
Supplementary Capping adjustments Capping is manually
billings automatically recalculated on recalculated as an
supplementary billings adjustment post billing.
Collections & Tax Automated process for notices No tax sale process or
Sales and calculation of special forms.
payment arrangements.
Alerts/Warnings Several activity alerts on main Very few alerts.
screen.
Penalty Recalculation Automatically recalculated after Adjusted as of date of entry,
change event from effective date. not effective date of event.
Manual recalculation of
penalty to reflect past
events.
Notices for Tax statements and notifications Notifications generated
adjustments automatically generated based on upon request. No tax
event. statements.
Archiving & recall Available. Not available.
Local Improvement Commute amount tracked and Manually calculated and
charges calculated on system. entered into system.
Property information Database is manually updated for Database is stand-alone
updates changes and data is then and manually updated.
updated to multiple databases.
Year End Year roll over only, as system is Full year-end process
balanced daily. required.
Education tax ratios Fully apportioned by system. Calculated offline.
Reports Over 100 fully customizable Customization required by
reports. Notice of Hearing, Notice vendor. No appeal notices
of Decision, and Council Report or reports. No rent reduction
Summaries for tax appeals and notice report.
apportionments automatically
generated. Rent reduction notice
reports generated.
Report FIN 28-13 December 2, 2013
Subject: Awarding of Contract for Property Tax Software Implementation Page 6
Process/Feature TXM - Mississauga Current Tax System
Assessment tools Creates file for building permits & New development
occupancy information & information done by other
transfers electronically to MPAC. means.
Navigation Menu driven from main screen. Must use multiple tabs to
access information. Access
is inconsistent.
Support Ongoing upgrading, minimum two Infrequent upgrades (five
upgrades per year. Legislative years). `Fixes' provided
compliance and technical inconsistently to users (on
currency. Five programmers and request). Support calls
developers on staff, one full time outstanding for several
tester. Two hours turnaround time months.
for system emergencies.
Selection Committee
The analysis and recommendation of the Supervisor, Taxation were then presented to a
working committee of City staff for review and discussion. The committee members
included the Manager, IT, Manager, Accounting Services, Supervisor, Taxation,
Treasurer and Director, Corporate Services & City Solicitor. The unanimous decision of
the committee was to proceed with the TXM software. Although the formal RFP
process was not used, the steps undertaken as outlined above was thorough and
complete and strongly parallel on the RFP process. Under the Purchasing Policy,
sections 09.09 and 09.10, Council can award the property tax implementation contract
to the City of Mississauga without using the traditional RFP purchasing process.
2014 Current & Capital Budget Requests
Implementation of any new major software system creates hardware and software
costs. Staffing in the Taxation Section has remained fixed for the last eleven years
however, the property tax (customer) base has increased during this time. As a result,
there is very limited staffing resources available to assist and undertake the
implementation of a new system. An additional staff resource will be required on a
temporary basis to backfill for a current employee while the current employee is
seconded to implement the new tax system. The additional employee cost is estimated
to be $65,000 and will be funded through the financial systems reserve. By using
reserve funding, there is no direct impact on the property tax levy. Whenever a new
computer system is implemented, there is an opportunity to review current business
practices from the perspective of increasing operational efficiency and taking advantage
of new system features. The additional staffing resource will allow the City the
opportunity to pursue operational efficiencies by having an experienced and
knowledgeable staff person blend current business practices and staffing resources to
the new system. In other words, the City will be able to leverage its new property tax
system investment to generate operational efficiencies. Implementation of any new
1
Report FIN 28-13 December 2, 2013
Subject: Awarding of Contract for Property Tax Software Implementation Page 7
majorsoftware system creates hardware and software costs. At the current time, the
draft 2014 capital budget will include $90,000 for operating system software upgrade to
run on the City's file servers for the TXM system. This system software purchase will
also accommodate the planned update to the Amanda land management system and
avoid an operating system software upgrade cost of$23,000 for the Amanda system.
Staff are still exploring alternative information solutions to either reduce or eliminate this
cost. It is anticipated that this issue will be resolved when the 2014 draft capital budget
is presented to Council.
•
Timing/Approval Process
As the objective is to have the new system in place and operating for January 1, 2015,
approval is needed now in order to commence implementation.
Attachments: None
Pre ared By:
lo I Approved/Endorsed By:
Donna DeLong S .n Karwowski
Supervisor, Taxation Divisio ead, Finance & Treasurer
, t
Paul Bi. o •
Director, C. po :te Services & City Solicitor
Recommended for the consideration
of Pickering City Council
'd i /141)7 t g, 243
Tony Prevedel, P.Eng.
Chief Administrative Officer
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e SCRIBE eSCRiBE r Workflow Status: eSCRIBE Approval Workflow
MEETINGS,EVOLVED
Workflow Information
Initiator: Webster,Valerie Document: FIN 28-13 Awarding of Contract for Property Tax Software
Started: 11/15/2013 3:04 PM Status: Approved
Last run: 11/19/2013 8:32 AM
I Tasks v_
The following tasks have been assigned to the participants in this workflow.Click a task to edit it.-you can also view these tasks in the list Tasks.
Q Assigned To Title Due Date Status Related Content Outcome
Bigioni,Paul FIN 28-13 Awarding of Contract for Property Tax Software.docx Review 11/17/2013 Completed FIN 28-13 Awarding of Contract for Property Tax Software Approved
Prevedel,Tony FIN 28-13 Awarding of Contract for Property-Tax Software.docx Review 11/19/2013 Completed FIN 28-13 Awarding of Contract for Property Tax Software Approved
Workflow History
The following events have occurred in this workflow. - -
a Date Occurred Event Type _�User ID Description Outcome
11/15/2013 3:04 PM Workflow Initiated Webster,Valerie eScribe Approval Started
11/15/2013 3:04 PM Task Created Blgionl,Paul Approval Task Assigned
11/15/2013 3:17 PM Task Completed Bigioni,Paul Document Approved
11/15/2013 3:17 PM Task Created Prevedel,Tony Approval Task Assigned
11/17/2013 3:18 PM Comment System Account Task Overdue Reminder Sent Task Overdue
11/19/2013 8:31 AM Task Modified Donaldson,Margaret Task Changed Task Assignments Changed
Task assigned to Prevedel,Tony had a delegate added Donaldson,Margaret
11/19/2013 8:31 AM Task Completed Donaldson,Margaret Document Approved Approved By Delegate:Donaldson,Margaret
11/19/2013 6:32 AM Workflow Completed System Account Document was Approved
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