Vermont Legislature SmartTranscripts:

[Robin Scheu (Chair)]: Good afternoon. This is the House Appropriations Committee. It is Wednesday, 02/18/2020. It's just after 02:30, and we have with us the agency

[Kate Slocum]: for digital services.

[Robin Scheu (Chair)]: It's going to be here a couple of times, but now they're actually going to talk about their budget. And then I think we have some other questions, because after this part, then we have part two, and Adam's coming in and trying to understand all the changes that

[Martha Feltus (Vice Chair)]: are happening. So

[Robin Scheu (Chair)]: let's start with the budget. Good.

[Kate Slocum]: For the record, Kate Slocum, Chief Financial Officer for

[Martha Feltus (Vice Chair)]: the Agency of Digital Services. So

[Kate Slocum]: we did do a presentation about our budget weeks back. This is a little you see some similar slides in here, but some other slides that are really focusing on the numbers. So John, could you go to slide two, please? So this chart we talked through in the last presentation basically is an overview of what the budget has grown and shrun the gyrations of the ADS budget since fiscal year 'twenty two all the way through 'twenty seven. Just as a reminder, in 'twenty six, we had the first structural change of our budget, where we were moving away from an allocation methodology and into a foreign price services methodology. And the yellow that you see in FY 'twenty six represents the $15,000,000 that you all eventually appropriated to us by the close of session. And '27 shows that first year of true, core enterprise services, the light portion is a direct appropriation of general fund, where the remaining amount is internal service funds. You'll also see that in 'twenty seven, our demand total overall has gone down. And that's a result of our changes of core enterprise services and taking in some of those demand services and identifying them as foundational services for an IT organization, with the overall budget in the green line showing what the total is across corner by services and demand.

[Robin Scheu (Chair)]: So your budget looks like it's going down, if I'm reading this right. It does. Somehow we're putting a whole lot of general fund in here. So we'll look forward to hearing how that all makes sense. Yes.

[Kate Slocum]: Why is it going down? Is going down? We're changing the structure of our billing, yes. So in the past, we received appropriations through the Internal Service Fund referred to as CIT, the Communication and Information Technology Fund. And we would recover those expenditures through various mechanisms, whether it be through allocation or through timesheet or through telephony or through bespoke or through SLA. And really, what we've needed to do over time since the creation of our agency is to look at identifying what are true foundational costs versus what are those demand driven needs. And that's what '27 shows you. It establishes core enterprise services for what it really is, those services that are necessary to operate state government. And then it identifies those other services that are really driven by the customer's unique needs. And those could be through a variety of avenues. You do see an overall decrease because we're also changing how certain expenditures are paid for. So bespoke, which I've spoken to the committee about in the past, we received an appropriation of bespoke dollars in our budget. And we would hire vendors, or we would buy product and hardware, And then we would bill that back to the individual agencies, and they would pay the bill to us. What we're looking at doing in 'twenty seven is still going through and using our buying power to hire the vendors, buy the products. But we're actually not going to pay the bill and bill the customer back. The customer is going to pay the bill for those services and products. So you don't see a duplication of spending authority. In the past, you would see spending authority for ADS and then spending authority and direct appropriation in each of the agency's budget. We've eliminated the implication of spending authority in '27. That's why you see that drop. John, can you go to slide three? So this gives you a comparison of the 'twenty six budget versus the 'twenty seven budget. And what we tried to do here is to identify a one for one so that your eye can move across the chart to see this is what it reflected in 'twenty six versus this is what we're asking for in 'twenty seven. So you'll see the first line item is general fund, the sacred general fund dollars. In the past, we have received a very small portion of general fund dollars that supported our GIS team. In 'twenty seven, we're actually seeking an additional $9000000.9100000.0 dollars in general fund, And that is to cover services that are found within core enterprise services, so things like AI, some GIS services, IT procurement, some Ethno essential services. Those are services that we are tracking within core enterprise services. But they've been identified as certainly foundational but not necessarily allowable for unique federal or special funds. So in working with finance and management, it was decided that those categories should either be fully recovered through a general fund appropriation or at least a portion of federal funds to cover those costs.

[Robin Scheu (Chair)]: So if you charge the agencies and departments enough, that would cover it instead of using federal funds? That would be another way to go about it, right?

[Kate Slocum]: It could be another way to go about it. But then you come into the question of allowability to certain special funds or general funds or I'm sorry, not general funds special funds or federal funds that that agency has to pay the bill. What we've found in looking at how the allocation was recovered for in the past because the methodology behind the allocation in the past, if you all remember, we had a bill back that was allocated. And that was based off of headcount. When we worked with finance to identify how was that bill actually paid for by the agencies and departments, it was largely and this was kind of a surprise to us largely paid for with general fund dollars. They were not using because they did not believe federal funds. They didn't believe it was allowable to use those federal funds to pay for these costs. So in finding that out, it was almost an epiphany moment for both ADS and finance management to say, Okay, so there are certain services that are certainly foundational, but they might not be seen as federally allowable. So they can draw down the federal funds.

[Robin Scheu (Chair)]: So is this saying that instead of using general fund in the agencies and departments, we're collecting it all and doing general fund to one place? That is my understanding. We have to see what that's what Adam tells us. When you're taking general funds, something needs to be going down on the other side. That's the part I

[Kate Slocum]: haven't been able to Besides exchange, I hear what you're saying. And that's my understanding, but it would be a good point of clarification. Okay, we'll ask. So the other changes that we're seeing in this is that in the past, we recovered, as I said earlier, through one internal service fund, the CIT fund. In 'twenty seven, what we've done in working with finance and management is to identify that, based on the type of service that's being rendered, it should be tracked under a different fund, a different internal service fund. So you see the establishment of four new or sorry, three new internal service funds for ADS to recover their expenditures in. So the CIT will still live on, but that's going to be the internal service funds that supports core enterprise services. Now you will see that there is an internal service fund that's established for what we formerly called SOLA, the service level agreement, so enterprise products, things like our communication products or our case management products, things that we administer at an enterprise level and agencies consume as they need to. So maybe AHS needs 50 of one type of license or an ANR needs two. And they pay for that license through the SOAP. Then the other internal service fund that's been established is referred to as the timesheet models. And these are the professional services that we have on staff, our project managers that are dedicated to specific projects that have funding, our enterprise architects, our system developers, our system admins, those professional service individuals that we build back for time served on a certain effort for an agency or department. And then the final internal service fund that's been established is what's formerly been known as bespoke. And it's only $5,000,000 And that represents the hardware that we would need to procure on behalf of different agencies and departments. That will still live within our budget for spending authority. And part of the reason for that is that we buy product. And then as agencies and departments need it, we can deploy it to them. So we can pay for it. It usually has a thirty to sixty day cycle on our shelves. And we can deploy it as the customers need it. So overall, we're looking at, for internal service funds, about $86,200,000 Special funds, we're looking at just over $1,000,000 and general fund, dollars 9,300,000.0. Any questions on that?

[Martha Feltus (Vice Chair)]: I think what people are grappling with is that the internal service funds before were paying 136,000,000 and now they're only busy paying 86, partly because truly

[Robin Scheu (Chair)]: some

[Martha Feltus (Vice Chair)]: of that internal service fund did not come from the internal service fund? It came from G Fund, the general fund within a department?

[Kate Slocum]: So the recovery was general fund, yes. So departments would use general fund to pay back the ISF. But the real change of the $136,000,000 to $86,000,000 is around that bespoke, just taking out taking that out of our budget and ensuring that the agencies and departments will pay the vendors directly for those services. So there won't be transactions that happen by ADS and then having to bill those customers back.

[Robin Scheu (Chair)]: And the $42,000,000 get spread out, the difference gets spread out among all the agencies? Do they go up in all the agencies, the bespoke

[David Yacovone (Member)]: or whatever they're calling it?

[Kate Slocum]: I wouldn't say it goes up, because it always did live in those agencies' budgets. It's just no longer sitting in our budget as a duplication. So for example, a project like NDWAS, AHS has the funding for that. It could be a mix of it is a mix of federal fund and state fund. They have it sitting in their appropriation. Every year, they ask for funding to support that project. We would come in and say, and we know that we're going to have x amount of IT services that we're going to have to contract for the NDWIS project. So we're going to include x amount in our budget. That also sits in AHS's budget. So it's sitting in ours and AHS. In 'twenty seven, it'll still sit in AHS. It just won't sit in ours. Okay. The other change for '27 is that we have moved away from one appropriation to two appropriations. So the first appropriation is expenditures that are specific to Cornfish services. So it'll have the CIT fund in it. It'll have our general fund appropriation. It'll have our special funds appropriation and our appropriation for the vision. The other appropriation is specific to demand services, so those SLA expenditures, those timesheet staff, and the various bespoke that still resides in our budget. This allows for us to give further transparency at a very high level into exactly how monies are being spent within IT as far as how close to ADS' ledger. So that's the other important distinction in the 27 versus '26. So if we move on to slide four, this again shows you our 27 requests. It shows it a little bit differently in that appropriation one is corn to price services, and appropriation two is demand services. And the pie chart just shows the 15 questions of those. It's another way to look at the 27 requests. Slide five shows you what categories within core enterprise services are being funded with general fund dollars. So it's things like IT governance, data governance admin, domain services, Atmos Essentials, which is not all ETMO services. I want to make some clarification here. This is for the ETMO hours that are necessary to do things like exploration activities. It's where we need to bring in professional resources from the EPO team to help the business scope out their project needs. And once it becomes defined as a true project, it then will move into a timesheet recovery model. Because once it's been identified as two projects, usually there is a funding source that's been identified, and the state can start drawing against that funding source. Explain a little bit more about what enterprise project management office means. Yeah. We actually have the individual who oversees that team here with us today, Stacey Gibson Branfield. And I can ask her if she wants to just introduce herself, Good

[Stacey Gibson Granfield]: afternoon, Tom. I'm Stacey Gibson Granfield. I'm the Chief Program Officer for the Agency of Digital Services, and I'm responsible for the Enterprise Project Management Office. So the Enterprise Project Management Office is created to assist agencies across the state in managing their IT projects, which are not systems like their current systems, but new things that they need to build in order to achieve their outcomes and objectives. So we have a team of project managers and business analysts, enterprise architects, business architects, organizational change management, business process improvement managers. And that team, helps businesses define how they want to achieve their outcomes, select vendors to come in and implement systems that they need to build in order to achieve those outcomes, and then measure performance as the project is going forward. So we have been working very closely with the other agencies to develop a new intake process that will make sure that as we're moving forward with IT projects, we are focused in on meeting their needs and the needs of the Vermonter. So that is a kind of a change in how we're delivering our services today. Once we get through that and they've established an IT project, we have project managers and business analysts that will sit down with them, finalize their requirements, which are things that they deem are necessary in order for a new technology solution to function. We work with the IT vendors to ensure that they are managing what we call scope. So scope is, these are all the things I need to build this house. Make sure you don't add anything different. Like, I'm building a house, not a skyscraper, right? So I don't need 20 floors. I need two. The PM works with the IT vendor to make sure they stay within the guardrails that the state has established. We manage the schedule and work with the vendor and the business to ensure that as projects are moving forward, we are meeting our milestones as they've been defined by the team. And then at the end of it, we give basically a report that shows all the things that went really well, sometimes the things that didn't go so well, how much we ended up spending on the project, because we also will work with the business partner agencies to manage costs and make sure that we're staying within our budgets as best we can. And then we're establishing a process now where we'll go back in a few months and see how did those projects actually achieve those outcomes. So how many staff are in this office? There's a total of 57 state employees. And the APPO itself.

[Robin Scheu (Chair)]: How many people are in ADS?

[Kate Slocum]: Just under 400, three eighty nine.

[Stacey Gibson Granfield]: And then we have a mix of contracted staff that we also bring in because we don't always have enough staff to manage all the projects that we have on our dashboard.

[Wayne Laroche (Member)]: My thought was it might be helpful if you just took a Imagine a simple project and explained to people well. Because we're hearing all these acronyms, and a lot of folks might not be familiar with those. It's just take a simple project and name the elements, terms they can understand, so they can walk through it.

[Stacey Gibson Granfield]: Yeah, absolutely. So a simple project, one that I think I have close familiarity with, would be the Cannabis Control Board project, for example. So I think it was last year, the year before, we passed legislation that established the Cannabis Control Board. In order for them to do their work, they needed a system that would help them track who in the state is selling cannabis and making sure that they're adhering to all the regulations that the state and the federal government put in place. So we sat down with them. We established what are the things that you would need in a system that would allow you to track your policy and make sure that all of the things that you're doing within this new board that we've created are meeting the needs and allow you to submit report outs, right? So they have to do licensing. They have regulatory responsibilities. So we met with them and collected all of their requirements. And so when you hear acronyms, you'll hear things like the different phases of project management. So the very first phase is what we call exploration. That's when the Cannabis Control Board comes to ADS and says, so we have been created and we need a system, a case management system, if you will, that will allow us to manage our regulatory responsibilities.

[Wayne Laroche (Member)]: I call that scoping.

[Stacey Gibson Granfield]: That would be scoping. Correct. Yep. So exploration is also what we call discovery. That's where we sit down with the business partners, and we try to understand everything there is that they need. In addition, we'll even look at what are other states doing, right? Because other states may have built similar systems. We'll also look internally at existing systems that may provide a similar technology or meet a similar business outcome. So cannabis control board and Department of Liquor and Lottery are not very different, right? So why reinvent things if we don't have to, if there's ways that we can leverage and reuse existing technology? So a lot of those discussions happen in exploration and discovery. Once we've decided that we're ready to actually move forward with the project, we go into what we call the initiation phase. And that is where you will start to see things like the financial requirements to meet the need. Like, how much do we think this is going to cost? If we did a request for information, which is an RFI, what kind of data do we collect back from it that would help us inform how a project like this would roll out, what kind of time it would take, what kind of staffing it would take, and those types of things. So that would all happen in the initiation phase. And then the output of that would be an approved, what you know today is an IT ABC form or a business case that basically says, Okay, we're ready to move forward with this project. So we've moved from exploration to initiation into what we call planning. And in the planning phase, now that we've got the approval to move forward because the business has the money to pay for it, We feel we have all the staffing. It's a priority. It's aligned with the state's strategy. It meets a compliance requirement. We go into the planning phase, which is really the procurement phase, for all intents and purposes. It's where we will do project activities like develop a project charter, which is basically the governing document that we use that says these are all the people that have decision making authority. This is our high level schedule. This is basically the scope as we define it. This is what's not in scope, So going back to the cannabis control board example, we're not doing anything for liquor and lottery. It's all staying within cannabis control board. So our project charter would detail that. And then we'd also go into RFP, into the procurement process, where we would issue an RFP. We'd go through a vendor selection process with scoring with all of the ADS and business resources at the table. And then once that's done and we've selected a vendor and we negotiated a contract with them, depending on the cost, we might do an independent review, right? So the independent review would also happen in this planning phase. Once we get through all of that work and we're ready to start, we go into what we call execution. And the execution phase is really where the real work of delivering an IT project begins. We have our kickoff meeting, the vendor comes on-site usually, meets with us in the business, and we start the work of, Okay, here's all your requirements. Now let's talk about how do you design a system that meets those requirements. We go through that whole design phase. The vendor will then go and develop it. And depending on which type of methodology we're following, there's usually two to pick from in this space. Waterfall, which is you're going to come back with a design document that covers all of our requirements plus anything new that we've learned in working with you. Or an agile approach, which is, Okay, we're going to focus just on the interface for the user portal first. And then we'll come back and do some more. And maybe we change some of our requirements because what you developed didn't quite get us everything we wanted, and we want to add a few features, that's a more agile approach, where you can do things in smaller chunks, you can go back and correct, and there isn't an additional cost. Because in an agile delivery model, the vendor will work with you to estimate what that might look like. So execution is where all of that starts. And you go through your design. They go into development. They come back. We do testing. There's usually three different phases of testing. One is the testing the vendor does to make sure what they built works on their side. They then promote it into our environment. Our technology team will then do some testing to make sure all of the technical components of it work, like the integrations, making sure if it has to talk to Vision, it's talking to Vision. If it needs to talk to DocuSign for signatures, it's talking to DocuSign. We'll make sure all of those connecting points are working. And then the user will do what we call user acceptance testing. And that's where the state staff, and in some cases, Vermonters themselves, will be called in to actually sit down and test the system and make sure that it met all of the requirements. We also do something called negative testing, which is try something that's not supposed to work and make sure it doesn't, and try something that does work and try to break it. If it breaks, then it's not functioning right. So we do some of that to make sure it's not just checking boxes. It's really pushing the system. Once all of that kind of gets to its completion and we're good with the system and we feel like it's met all of our needs, we will then go into closeout, which is systems implemented. It's in production. There are no major issues. Users are using it. We're seeing good outcomes. We'll go into the closing phase, issue a closeout report, and then it transfers into maintenance and operations where the technology team on the state side and the vendor side will make sure the thing keeps running.

[Wayne Laroche (Member)]: I just asked you to explain that so that everybody knows how complicated it

[Adam Greshin]: is. Yes,

[Robin Scheu (Chair)]: appreciate that. Thank you for that very thorough explanation.

[Stacey Gibson Granfield]: You're welcome. Maybe spin a little bit.

[Robin Scheu (Chair)]: A little, but that's okay. So let's finish. From

[Martha Feltus (Vice Chair)]: a financial point of view, what we're talking about is much of what Stacy described the cost of all that is gonna be on AHS or ANR or somebody who's asked for that system. Her group is gonna do all that preparation work and guide them through, and this is what you have to do and all that kind of stuff. They're gonna stay in both, but they're not gonna spend the $10,000,000 on the piece. AMR is gonna spend the 10,000,000 Do

[Robin Scheu (Chair)]: they pay you for your consulting work? Yes.

[Kate Slocum]: So there's a portion that is covered in core enterprise services, and that was that discovery piece, the very beginning of the tail. That is covered under core enterprise services. Once the project becomes a confirmed project, there's been funding identified, then it moves into ANR, AHS, whoever is paying for those activities.

[Stacey Gibson Granfield]: Yeah. Basically that starts in the execution phase. You have the vendor on.

[Martha Feltus (Vice Chair)]: Right, you're in the development phase. Yep. Thank you. Should we talk

[Robin Scheu (Chair)]: about your budget? Sure. Think we've talked about it some. And then see we have Adam here, too. Is there anything else on

[Kate Slocum]: this page you wanted to So again, this just shows you the areas where general fund is being applied for the funding price services. So that $9,000,000 that we're receiving this year as a new and up in general fund, this identifies the areas that GF will cover. And this was because it was related to foundational things that sort

[Robin Scheu (Chair)]: of go across all agencies, so it makes sense for you to just house it and Correct. House pay it for

[Kate Slocum]: Yeah, so these are services that everybody consumes at some time, or it benefits everybody all the time. Some things like data governance, when we're looking at ensuring that the state's data is protected and used appropriately across systems, that benefits everybody. And it is ripe for being funded with general fund dollars. That's how we landed with finance and management on this. Everybody loves general fund dollars. I know, but it's a clean fund.

[David Yacovone (Member)]: If they could come up with

[Kate Slocum]: a different fund that was clean, we could talk about that. Yeah. So the next two slides is our crosswalk. And I know the committee doesn't really but I focus a lot on the crosswalk. But in a nutshell, what this shows is the creation of the two appropriations. So we're moving away from that one appropriation where everything fell into one bucket, and a lion's share of that fell into one internal service fund. This now shows the change in the establishment of two different appropriations, one that represents foreign price services and one that represents the demand services. And this chart doesn't show it as clearly, but it also does show the establishment of the new internal service funds that will fall under the demand appropriation, so those that represent the time sheet, what's formerly known as the time sheet model, the SLA model, and then the scope model. So some of these, like some of the downs that you see on the first page, are actually ups on the second page, and that's just the shift from Is that two different B numbers?

[Robin Scheu (Chair)]: Don't know how I'd find it in the budget because appropriation number one doesn't do it. Your B10 something or other?

[Kate Slocum]: That's a good question. I would have to look that up. Are they two different numbers? Yes, they are two different numbers.

[Robin Scheu (Chair)]: And that's new? Yes, that is new. So the second one is probably

[Kate Slocum]: the new number. Second one is the new number. Probably be good for us

[Robin Scheu (Chair)]: to know what those are. And maybe that Adam's going to tell us what they are.

[Kate Slocum]: Was not distinguished here on this page. That was an oversight. Oh, wait, it is. Hold on. So if you look at the second page, this is really small. I mean, it magnifies. I know. Appropriation two is 11,056, where appropriation one was 11,055. So they are two different numbers.

[Robin Scheu (Chair)]: So it's probably one hundred and five point five and one hundred five point six, Addison?

[David Yacovone (Member)]: It's 105.5. Okay.

[Kate Slocum]: 105 something. I can follow-up with that for you. That's probably in

[Martha Feltus (Vice Chair)]: the budget somewhere. Yeah, probably

[Robin Scheu (Chair)]: 105. So the second one is the new one.

[Kate Slocum]: Yes, the second one is the new one. And that represents the demand side of the ADS budget.

[Robin Scheu (Chair)]: And the demand side is what the agencies are asking of you as opposed to

[Kate Slocum]: what you're providing them. Yes, that's what they're independently consuming.

[David Yacovone (Member)]: Don't Okay. Need to make some sense. Okay.

[Kate Slocum]: Any other questions for this part? Good morning, good morning. Stacey,

[Robin Scheu (Chair)]: I'm gonna send you back. Thank you very much. And I

[David Yacovone (Member)]: think we'll have Adam come up. We'll go to part two.

[Kate Slocum]: Have any other paper or presentation info that Okay. We're just

[Robin Scheu (Chair)]: Well, maybe some of this that Kate has already showed us, we could use some of that.

[Kate Slocum]: Okay.

[David Yacovone (Member)]: Like this? Alright. That may even help. But this should be be

[Adam Greshin]: Madam chair, Adam Gresham, commissioner of finance and management, thank you for inviting me.

[Robin Scheu (Chair)]: Thank you for coming. We're we're When we had ADS in here a couple weeks ago, whenever that was, it feels like months ago, I don't know. There were a number of things where they said, well, look, how we should ask finance and management about that? And I think Kate's answered some of these questions, but the change to general fund is sort of a big surprise. Are there things going down? We're putting general fund to ADS, are there expenses that are going down at agencies?

[Adam Greshin]: So yes, if we did not direct a little over $9,000,000 to the agency digital services. It's not like those costs would disappear. Being incurred, so they would have been, as they have been in past years, allocated out to the agencies and departments. And our thought on it based on quite a bit of feedback from the various departments and agencies is a lot of that would have been paid by their general fund anyway. Not all of it. Each agency and department is different, but depending on what their funding sources are. So most of that direct appropriated general fund would have been paid for by agencies and departments as it was allocated out. And not all of it, but a lot of it would have been paid by general fund. Yes.

[Robin Scheu (Chair)]: So I guess I'm not seeing a corresponding decrease so much in the other agencies and departments. So, for example, yesterday we had the Vermont Labor Relations Board in and their change, the change in billing, they're small, I get it, but for them it was really huge, went from $2,800 to $15,000 So there was a $12,000 and change dollar increase, which is a huge percentage. It's six times as what they were being charged before. So we're just sort of struggling with understanding why those kinds of things are happening.

[Adam Greshin]: So and I you heard from the agency of natural resources that was in here the other day, and I think they had I think you spoke to them about various charges, internal service fund charges, including money. Yes. I would remind the committee that among the changes that happened here was to provide cost recovery for programs or deliverables that were not being covered. So that's in part why you see some direct general fund, but that's in part why you see some increases in allocation costs to agencies and departments. So, you know, keep in mind, there were some processes that the agency digital services were going through and delivering to Vermont agencies and departments that were not being recovered. So this Right. Reflects full cost recover our estimate anyway. You know, always a budget is an estimate. So this is our estimate of full cost recovery, which is why sometimes you don't see a corresponding down when we're giving direct general fund. But if we didn't give direct general fund, that amount would have been allocated out to agencies and departments. So in a sense, we're offsetting some of the Right. Up there.

[Robin Scheu (Chair)]: Okay. And so one of the questions we had asked before was, so if you're not getting full recovery, why don't you increase your rates? And they said, it seemed like you're the one that decides the rates, not ADS.

[Adam Greshin]: The hourly,

[Robin Scheu (Chair)]: whatever was 21, and it should be 24 or 28 to fully reflect. I don't know.

[Kate Slocum]: I can't remember all the numbers of this one.

[Martha Feltus (Vice Chair)]: But who sets the rates?

[Adam Greshin]: Actually, the secretary of administration.

[David Yacovone (Member)]: Okay. She doesn't

[Robin Scheu (Chair)]: We're passing the set the rates.

[Adam Greshin]: She doesn't set the rates, but she confirms Okay. Lewis. So that's why it sits in finance and management as her ever vigilant department to advise her. And I think it's important to note. And and this, as Kate knows, we we have an active dialogue on this. Sure. And well, because it's it's complicated. Yes. You know, as every, let's say, law firm or accounting firm knows that uses billable hours.

[Kate Slocum]: Mhmm.

[Adam Greshin]: It's two ways you can increase your revenue. First way is, as you've suggested, increasing your rates. Second way is increasing your hours. Right? And so we're trying to figure out what that balance is. But I think suffice it to say that one reason why some of these costs are not being recovered is because we're it may be that some of the employees who are generally billing back their time through timesheet may have been working on projects that perhaps weren't the cost recoverable. So by providing direct general fund, that we're hoping that that will help ameliorate or mitigate that situation. But I just wanted you to know, we've spent a lot of time on this, and and, you know, it it's a joint venture. It's not an acrimonious yelling or We're trying to figure out how to get

[David Yacovone (Member)]: it right.

[Robin Scheu (Chair)]: It feels like you're trying to get a big handle on the cost, and maybe this whole bill back for eighteen months and now that it's sort of raised the issue more to

[David Yacovone (Member)]: the forefront than it had been before with that. Yeah, so we're taking this in

[Kate Slocum]: a phased approach. And really, the establishment of core enterprise services stops some of that bleeding around unrecoverable activity. The next approach is to look into the field and really hammer down who our rates need to be, what services are being provided clearly, and move forward there. So next year, when we come back, we're going be having a conversation about that work. Okay. Yes, Wayne.

[Wayne Laroche (Member)]: So I assume that there may have been some agencies that were not paying enough, given the services being provided, and some that might have been paying extra for whatever reason, that you're trying to make some corrections here so that everybody pays the proper amount. If that's the case, then you would see some discrepancies in terms of some being higher or lower than others in terms of the dollar dollars changing from this year to last year. Is that partly what's going on there, Talith?

[Kate Slocum]: Sure. There is some accuracy to that. What we actually saw is that there was a discrepancy in how agencies paid. So now we are looking to bill for services uniformly. So in some agencies, we were recovering for like services under one recovery mechanism and for another agency under a different recovery mechanism. This makes it uniform across all customers. So for desktop services specifically, everyone pays for that desktop service under foreign price services the same way. It's not if you're agency A, you pay for it through an hourly rate. And if you're agency B, you pay for it annually or the SLA. So it brings that uniformity across those services.

[Martha Feltus (Vice Chair)]: I was just going to point out that as we have looked at each of these budgets, I have often mentioned to you, and I just now found one here from division of FPR, is that their allocated charge is 54,000, but their service level agreement is down 131. That has thousands. Thousands. There one issue,

[Robin Scheu (Chair)]: it was only $121

[Martha Feltus (Vice Chair)]: down. Right, right. But a paper went like this, were paying 50, they pay 54, but they have a minus 131 in the change of the way they've done the account. And that has happened in many of them that I've looked at. You still have the question of, are we accurate? Now you think we are accurately recovering the costs and it being divided into the right categories. Whereas before it was difficult to tell exactly what was being categorized correctly.

[Robin Scheu (Chair)]: And I guess we'd know better in a year whether how well this has worked, right? Whether we've done a good job categorizing, we

[Martha Feltus (Vice Chair)]: need some more tweaks or whatever. Yes.

[Robin Scheu (Chair)]: Then,

[Wayne Laroche (Member)]: do you have a question?

[David Yacovone (Member)]: No, okay.

[Robin Scheu (Chair)]: So on the bespoke, is this the idea where you hold the contracts and they pay the bills? Am I really simplifying that? But is that kind

[Kate Slocum]: of what it is? It's simplified. We'll still engage with the

[David Yacovone (Member)]: business

[Kate Slocum]: to go through our normal procurement process. We'll execute the contracts on behalf of the departments. We'll work with the vendors directly. But when the bill comes, it will be going to that agency or department.

[Robin Scheu (Chair)]: So you don't even see the bill?

[Kate Slocum]: Wouldn't say we're not going to see the bill. We have to work out those discrete details still. We're going to need to, at some point, see the bill in order to do proper contract management and project oversight. But we haven't exactly defined what that's going to look like yet. Yeah, because I would imagine there could be some risk to your agency if they don't pay

[David Yacovone (Member)]: the bills and you're holding confidence.

[Adam Greshin]: We have a pretty good record of paying bills, Madam Chair.

[Robin Scheu (Chair)]: We sometimes find invoices in the next fiscal year. So I'm just trying to think of any possible risks or downsides to I'm sure

[David Yacovone (Member)]: you've thought about all these things already, but Every night.

[Robin Scheu (Chair)]: And the reason for doing it this way instead of you paying the bills?

[Adam Greshin]: So, again, kind of circling back to the beginning, the idea of simplifying and taking a large pool of spending authority and breaking it up into different parts, this is very strongly in that same guise. But there's there's one more reason, and I think I mentioned this when I was here before, and that is that I mean, part of what you guys wanna know is what's the cost of delivering IT services. Right? So it's a bit like base versus one time. The base costs for delivering IT services are what you're gonna pay year in, year out, every single year. Whereas with the bespoke, that's project based. Some years it's going to soar if you launch new projects. Other years, it's going to plunge when you finish a project. So it's not if you're trying to get at what's our base costs, it's really not part of you know, it's kind of confusing base spending with IT projects that are one time in nature. There's always going to be, unfortunately or fortunately, you answer. There's always going to be IT projects. I get it. But, you know, they're gonna rise and fall, and so we're trying to separate that out. That was really, I would say, as strong a reason, if not a stronger reason than just trying to reduce the size of the whole.

[David Yacovone (Member)]: Okay. So Okay, Wayne. It'd be a lot easier if you

[Wayne Laroche (Member)]: do it. Whoever came up with the word spoke, you'd have a more

[Robin Scheu (Chair)]: transparent It's like Taylor, it's Taylor. A transparent

[David Yacovone (Member)]: name for what you're doing?

[Robin Scheu (Chair)]: That's what

[Kate Slocum]: it means.

[David Yacovone (Member)]: Might help people? Have your Taylor. Taylor's character.

[Kate Slocum]: It is an old fashioned word, that would have been helpful. Okay.

[Robin Scheu (Chair)]: How are people feeling about it? Feeling like they understand this a little bit more? Not ready to give the lecture on it, but maybe it's a little less nutty.

[Kate Slocum]: You good, Marty? This is

[Robin Scheu (Chair)]: your area? Are you feeling

[Martha Feltus (Vice Chair)]: I'm okay, because I had worked with them before. And so I understood how that other systems worked out.

[David Yacovone (Member)]: Dave? When I look at this, I get frustrated because it seems like it's growing so, but I try to remind myself, and folks will correct me if I'm wrong, staff used to be at the department level. Some of them were moved out of the department level into what I'll call the central office, at the agency level to support network development and project development. And the staff who remained at the department level were needed to run specific software, specific programs. So it wasn't that we, unless there were projects, we didn't add a lot of new staff, though every agency gets something created, but they were just a separation was made. Is that a fair way of looking at it? Some of it, it wasn't new cause, it was redeployed assets, if you will, and then put into a different cost center.

[Robin Scheu (Chair)]: And I think the idea was instead of having 17 people like Stacy, we have one that does it. It's more centralized instead And of to get standardization, whatever made sense.

[Martha Feltus (Vice Chair)]: Right. And that was the whole point of creating an agency as opposed to having been a department of agency administration before. It was difficult to get all of that in one place and try to understand not only the techniques or the technology of what you were going to use and try to be consistent with what you were doing, but to get a handle on what all those costs are.

[Wayne Laroche (Member)]: I went through it because I had my fish and wildlife when I started to have my own RT, my own server, everything there, right? So if I needed that printer fixed, it's okay, we'll fix the printer, right? Then all of sudden, consolidation came or we got all of a sudden, the branding of our website had to be in alignment with all the other branding, which

[Robin Scheu (Chair)]: You couldn't use purple and orange, you had to use

[Wayne Laroche (Member)]: blue, right? And the green. And yeah, so it caused some consternation, but I understand why it needed to be done, especially with the security issues that we have today that weren't there back then, that have grown, you've got so many more security issues now. Each agency, each department would not

[Kate Slocum]: be able to do this.

[Robin Scheu (Chair)]: Great, well any other questions? You so much for coming in and coming in again and coming in again. We really appreciate it. We're starting to understand this which we're happy to also appreciate but Marty will be on it. She's always all

[Kate Slocum]: over these things, so I'm not worried about that. Thank you very much. We're going see Hardy tomorrow.

[Adam Greshin]: We're going to see Hardy tomorrow.

[Kate Slocum]: Not you, so we'll, sorry we'll miss you,

[Robin Scheu (Chair)]: but we'll be looking forward to seeing

[Adam Greshin]: In the middle of my nap time.

[David Yacovone (Member)]: You called that Okay. So

[Robin Scheu (Chair)]: thank you. Committee, this this we're done for

[Kate Slocum]: the day here. We're gonna you can go

[Stacey Gibson Granfield]: to the floor. I'll ask for

[Robin Scheu (Chair)]: a committee conference. Lynn's introducing people. Tomorrow morning at nine is the Office of the Whole with the State of the Guard presentation, so we will go to the floor. We'll have the joint assembly, we'll be electing trustees and electing an adjutant general. And then in the afternoon, assuming

[David Yacovone (Member)]: the committee of

[Robin Scheu (Chair)]: the conference is approved by the body, we're going to meet from 01:45 to 02:15. So we're going to move Hardy to 02:30

[Kate Slocum]: tomorrow. We're also working on

[Robin Scheu (Chair)]: more things on Friday. We have ripped through this budget. Let me tell you. It may be that we're not going to work on Monday. I'm sure you won't mind if that's the case, but I'm not able to make the case for any of us to have to come here if we don't. So that's the plan at the moment.

[Kate Slocum]: I will confirm tomorrow. That's what it's looking like. I'm just

[Robin Scheu (Chair)]: trying to help out where I can't. So let's go offline.