Vermont Legislature SmartTranscripts:

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Alright. Welcome, everybody. It is February 3. And, this is a joint meeting of the House and the Senate to hear the FY 'twenty seven budget request from the Agency of Digital Services. So I'm representative Kathleen James from Manchester. I'm chair of House Energy and Digital Infrastructure.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: Wendy Harrison, senator from the Windham District, chair of institutions.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: And Rob Plunkett, senator from Bennington District. Senator Ross Singles, senator from the Essex District. Senator John Benson from the Orange District.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Representative Bram Kleppner, sixteen thirteen, Burlington.

[Sen. Joe Major (Windsor District)]: Senator Joe Major from Windsor.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Representative Michael Southworth of Kellerman, Pennsylvania. Representative Chris Mark from Dunwood School.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Derek Murray, Washington.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Representative Christopher Howland, Rutland Ford.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Representative Richard Bailey, Lamoille II.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Representative Laura Sibilia, Windham II.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Representative Scott Campbell from St. Johnsbury, vice chair of House Energy and Digital Infrastructure.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Yeah. I wanna thank everybody for being here. We're on a faster timeline than the senate, but we still thought it'd be helpful to have a joint meeting. On the house side, we're in the process of hearing from the agencies that fall within our police jurisdiction to learn a little bit more about their FY27 budget in preparation for a recommendation letter that we need to deliver to House of Proof soon. So, that's why this is time sensitive for us, and we're really glad you guys can join us so that we can all hear the same info at the same time and ask questions at the same time. I don't know, Chittenden.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: I agree. It's very helpful to us. Even though we're not making those decisions right now, it's great for us to, both hear the same information, easier on you, and we'll understand better how you make the decisions that you make.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Great. All right. Over to you.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: So for the record, my name is Riley Hughes. I am the secretary for the Agency of Digital Services, state chief information officer as well.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: And I am Kate Slocum. I'm the chief financial officer for the Agency of Digital Services. And we

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: do appreciate that you were able to come together as joint committees because I know that we spent a lot of time educating on the process. What we're trying to do with changes, going through some of the work last session on improvements to the work that we're doing on dashboarding, and so for this request, I think that we've made

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: a lot

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: of headway with both committees around overview. Now this will be an opportunity to dig into the details, so some of the slides in our deck are repeat and so I think we're going to go to slide eight which is specific to the asks. So you can see the pretty kind of asks and then committee chairs and vice chairs have any other preference to start at a different place for open staff, but this is what we recommend.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Give me just one second. I want to pull up your testimony and quickly skim through the slides that we are not looking at. One sec. So this is post two. All

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: right.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: And I know we met just a couple weeks ago. So, the slides that we're skipping just give an overview of the who? Yep. Okay.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: It's the presentations that we had done for the joint committee and then the separately both moves as well. So they're not made in the moves.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Okay. And I remember where we left it last time. We had just started talking about your budget, and we kind of ran out of time. So we are picking up there, I guess. Okay.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So the slide that we're showing here shows the breakdown of our 'twenty seven budget FAST. The governor recommended in totality is $96,500,000 And then we have that broken into two different sections of our budget. And those represent the two appropriations that you would see in our budget for 'twenty seven. That is a new approach for the agency of digital services. In the past, it was one appropriation. This is being proposed to be split between what we're referring to as core enterprise services and move into the insurance services. So core enterprise services is a total of $49,200,000 and that's broken out across a couple of internal service funds, one being the Communication and Information Technology Fund and the other being the Vision Fund and that's the Vision Fund appropriation. The Vision Fund portion is specific to the team that we have that maintains the current ERP systems that we have, Vision, ETHR, and now Adaptive. The other funds that you see in here, there's an amount for general fund, an amount for the VCGI fund, and for the municipal and regional planning commission fund. The BCGI fund and the MRP fund support our GIS teams in part, as well as some of the general fund, But a large portion of the general fund appropriation is specific to core enterprise services. So last session, we talked about the creation of core enterprise services, and there was $15,000,000 of a set aside in the general fund, money all came to me at the end of the session, to stand up this new offering, basically. And that's foundational services for all IT need to option. Things like cybersecurity fall into this, network access falls into this, some foundational needs specific to data storage to fall into this, as well as we have a breakdown of categories. There's 35 stories in total, as well as AI services, domain services, security testing, cyber security. And so that's funded by general fund as well as the CIT fund. Stop there for a moment if there's any questions.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: So specific services are on slide 10. Is that right? Or what think

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: our is in Slide 10 is the breakdown for our services, and we can get to that.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Quickly run through a couple of those acronyms for me, BCGI and SLA? Sure.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So under the

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: And MRP.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: CES, you'll see that there is the BCGI fund and the MRP fund. BCGI is Vermont Center for Geographic Information. Correct. It's our GIS team. And the MRP fund is the Municipal and Regional Planning Commission fund. That also supports the GIS team, the BCPI team, it's the MAPS work. That funding source comes from the property transfer tax annually. So it's a portion of property transfer tax that gets put into that fund to support this work. If you look into the demand side, SLA, timesheet, bespoke, these are services that agencies are requesting specific from ADS that meet their needs and their mission and specific goals of their agencies or departments. So under the SLA funds, we're looking at enterprise licensing for enterprise tools, also private cloud consumption. They are, like I said, enterprise offerings that each agency What does SLA stand for? It stands for Service Level Agreement.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Thank you.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: It's a legacy term that has been brought over when GDS was created, we just kept it. And it has taken out its own identity, SLA just means it's the bill that I get after the year is over for anything that I used, and they get it once a year.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: Can I just add to that? Because my understanding of that was that the bill is related to the quantity of the services.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: That's Yeah,

[Sen. Wendy Harrison, Chair (Senate Institutions)]: so it's like a utility. That's the idea of it. So I think that's important to just You're gonna have to keep telling us these

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: That's perfect. One of the reasons why we started really looking at SLA specifically is because the growth of the consumption wasn't matching what the budget projections could be. There's no way to project what somebody would consume necessarily and we were charging them in arrears so they would let's say in FY 2026, we wouldn't know until the end of the fiscal year after we did a reconciliation to do a snapshot and say this is how much you used in the last year, but they've already submitted their FY twenty seven budgets to pay that bill. And so it was a backwards model that we were looking to draw out the cost of standard services across the board, which is why foreign price services is created and so we'll call that CVS, But those are the foundational services that no matter who you are, no matter what department or agency or even who you are in state government, everybody's getting that service, and now we can measure it at an enterprise level. So that's drawing down the budget and the amount for SLA. And so we're starting to see less and less of the, I need more or I'm going to consume more, and we can start having greater visibility on what is that more and who's consuming it, who's using it, who's needing it, but it's exclusive to our standard platforms that are part of our core services.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: So did I hear you say that folks are using less of it because they know the cost of it?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Would say

[Sen. Wendy Harrison, Chair (Senate Institutions)]: Maybe I extrapolated, but it sounded as if you said that Because wouldn't the goal be that if, departments know the cost, that they'll only use what they need?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: That's the goal.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: And maybe they do need

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: what they Separate our foundational services so that we can look at these are the things that no matter what, they're non negotiables, You can't not pay for security, you can't not pay for network access, but if you need something more than what we consider to be baseline, you'll see that show up in SLA.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: So, has it happened yet that departments know what things cost? Has that happened in the past or is that in the future? Both. Okay, so you should have seen some sort of change in what they want or what they

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: order you?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: I think we're going

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: to continue seeing that eventually over time. Now it gives us an opportunity when they say, wait a second, we just paid mortgage based services, why am I able to get any SLA? And now we can start talking about your overall consumption, where you're consuming, why that is. We weren't able to extract the foundational before, and now that we can do that, we can look just solely at their own portions.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: Okay, so hopefully we'll see, you'll tell us in the future when you see.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: The important part is what Secretary Ryan Lehuez was saying that in the past, it wasn't evidently clear to our customers what were the must haves in the SLA numbers versus the unique demand and need in each customer. So now this presents something that's really saying, this is what AOT needs out of these offerings that's unique to them.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: Right. And the concept is great. I'm just curious about when we're going to see changes and when to expect changes. But then I have a different question then.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: In year of transition, I think it's hard to really hone in on where the changes are because last year's budget didn't look like this. My expectation would be next year, we now have trend evidence to be able to look at year over year and do it across eight different areas as opposed to four.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: Okay, okay, good. So the MRP fund, you said that the revenue is by statute. So I would just like to see an evaluation of what is required to do the services.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: This is the one division within EDS that is public facing. So BCGI works really closely with regional planning commissions and

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: they do a lot of work

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: with them. They also work with other entities that are part of any of the work that regional planning commissions would be doing, so they work with towns and town clerks, I think that there all of the brand lists data and all of the property and property transfer data, so that's what that goes to is allowing that operation to continue and not impacting general fund or non income. Internal service costs.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: And the services are terrific, especially the GIS folks. But my question is, if the budget is just based on what the statute says to put in the budget, it's probably not exactly the right amount. So I would just like to know the right amount at some point.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So that's when, going back to when the agency was established, BCGI came into our agency from the Agency of Commerce Community Development, Michael Ellis, they came to us running short. So since then, we have always had to supplement their work through the CIT, through the communication and information technology, under what was formerly known as the allocation. So correct, that $1,000,000 does not satisfy the needs of that unit within our agency. And we can provide follow-up information as to what that real true cost is.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: That would be helpful. Thank you.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: But if it's okay, you hit on exactly why we're moving to this model because going to that list of, I thought that it was 14 categories, but maybe it is 13. 13. That under the data and governance and under there's the other one I think it's under the data and governance and under the core essentials three there are services that BCGI is doing under both of those categories that have to be outlined as services. So that's what's going to allow us to put a total cost to it. And although our recovery may be across different funds, the service itself and who they're working with has to be defined measures.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Good, thank you.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: R. Kelly?

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: The SLA fund, is that the one that was giving you problems last year?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: The credit card? Yes.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Both the deficits that we

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: were That trying

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: is one of, yes, that was one of the funds of deficit. So we drew that total number down. Think last year it was close to $30,000,000 Timesheet billing was the other one.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: And now that's under control? For

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: the SLA portion, yes for the timesheet billing portion that's what we're going to work on through '27 so you'll see that represented differently in '28 so there needs to be a rate versus creating some tighter controls around field services and that's what the time to sheet fund is for, is it to cover the cost of the resources that are part of the, I hate to say embedded teams, but the specific agency or department based field teams supporting work for them. So this year was the first time that we drew a requirement of consistency because some of those were recovered under SLA, some were recovered under timesheet, now everybody is recoverable under timesheet. What we would like to see or what I would like to see is a shift away from timesheet and into service based costs for agencies and utilize timesheet exclusively for projects. Because if you're 100% committed and dedicated to one department or one agency, but you are recovering under a timesheet model, can never 100% recover the cost of that resource. And it is because I can't charge agencies for vacation time or administrative time or training time or skills development time. I can only charge them for work that they're doing on systems that are field based systems. And that makes it really, really difficult to manage. It's not a model that matches the way that the work is actually being delivered. Services is a lot more aligned to that.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: So as we go through the slides, I want to make sure that we as a team come away with the information we need to be able to write our recommendation memo. So I don't want to interrupt you. I know we want to move through the slides. But some of the big picture things that we're going to need to understand are what, if any, substantial changes are we seeing in your budget from last year to this year? So what is substantially different in the numbers or the way they're being presented or our ability to see them? What, if any, changes to the budget might impact the way that you're delivering services or the way that you're delivering information? So our task as a team is really so much to look into every dollar and cent as to try to get a big picture sense of, this is what our budget looked like last year. This is what our budget looks like this year. This is how it might impact the services that we're giving. This is how it might impact how we work with other agencies. This is how it might impact the legislature's ability to see your spending and provide oversight. So I just want to make sure that we're operating at a translatable level. So we did a lot of work last year as a committee, we worked with these guys in the Senate to make sure that we were moving ADS's reporting in a direction that was useful and transparent. So we asked for changes to your annual report. We ask for changes to that more dashboard so that the layperson can hop in and say, here are these projects that ECMO is tracking. Here's where all the data is. And so I feel like we're moving in a direction that allows IT spending to be tracked and visible at a central level. So as we go through these slides, I just am going to ask you guys to try to translate into lay language. Here's what we did last year. Here's what we're doing this year. This is what's different. What do you think? So one slide I was looking at was number seven. I know we dove right in at eight. But that seems to track your different budget categories over time. And maybe that slide gets us to some of the questions I'm talking about. Or maybe you want to keep moving forward. But anyway, just want to make sure we don't adjourn today until we've had that conversation.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: It's a lot to unpack

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: and that's why we are creating different visuals because historical representation has been transaction based. The yellow in this slide, Preqway 26, was $15,000,000 appropriation to minimize or reduce the double cost to agencies as transition from a year in arrears billing model to an in fiscal year billing model. And so, you'll see that represented as yellow in 'twenty six, and you'll start seeing the demand draw down in '27. The reason why we share it in different visuals is that there are three different categories to demand. And so this is representing them all as a whole, so high level picture. And the light blue in '27 is the very first time you are being asked for approval for general fund to ADS. And we represent that general fund specifically in core enterprise services. Allocation, and I've been very vocal about this year over year since I've been here, the allocation number before we created core enterprise services was flat. It was anywhere from 11,000,000 to $13,000,000 since we were created an agency going on nine years, for almost a decade, and that doesn't actually pay for foundational services. What it does is minimizes the chargeback costs for everything that everybody is consuming and forces a transaction model. So, you'll see core enterprise services now is being established as a holistic number that you should start seeing controls based increase year over year for, because that is the foundational services. The demand piece is still one that we have to start, that's where some of the reporting comes in that you're talking about is in the space. We expect that people are going to need more than others, size, capacity, volume, demand, whatever they may have around spinning up new servers, storing excess amounts of data. But what this doesn't represent is the IT Mod Fund projects that doesn't come into our budget because it's appropriated separately. So that's a whole other separate piece that will only come up in our conversations when it comes to budget. Do you want to speak to budget under

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: details specifically? So, I just want to make sure I'm understanding. If I'm looking at this correctly, it looks to me like all three of your budget categories, your overall budget's less, demand is a lot less, and then quarter price is new. So I just want to make sure we understand why your overall budget is down so much and demand is down so much. One

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: of the other areas that demand includes historically was also project based costs. And so, ADS would receive spending authority, but we would include that in our bespoke recovery model so that, as you had said it's represented in a single location. As recommended by finance management, they have been working with us on a new approach that would keep that funding represented in the agency's business offices. So you'll see that in the agency budgets, but it won't be reflected in the UDSs. So there's some internal processes that would have to be planned for that I know Commissioner Rashaan would be happy to come in.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Can we I want to ask a few more questions about that, if that's Okay. Because that's a big it's a big shift, it seems to me. As I'm understanding it, expenditures that we previously would have seen in your budget so for lack of a better word, all in one place are now going to be appearing in different agency budgets. So when we go as legislators to look at IT spend, how we to find that? How are you going to deliver that reporting information to us? How is that going to work? Because it feels counterintuitive to me to the direction we've been trying to go in. So what will you have to do, I guess, when we ask you for that info? And will it be on the dashboard?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So we are still working with clients and management on what that would look like for this fiscal year. There has to be some changes to processes within not just our office, but across the executive branch. And the details of that are not clearly ironed out at this point.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Rep. Sibilia, Nimara?

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: So I don't know if this is a question for you or for Commissioner Gresham, but what is the problem that we are trying to solve by doing this? What's your understanding of the problem that we are trying to solve in doing this?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: I think that's a great question for Commissioner Rushing.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: And then I have another question on slide eight, if I might, Madam Chair. And just wanting to make sure that I understand on slide eight. Let me call that up. Who's got

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: So

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: we've got this broken down into two pieces, and I'm not sure that I'm exactly following. So core enterprise services and demand. So core enterprise services are the Foundation and demand are project based. Is that what it is?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: It can be. Yes. So that would be what's represented in the scope would be project based costs. SLA is biggie size it.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: And

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: timesheet would be the resources.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Okay. So those are not across every agency? Those are individual?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: It's not distributed evenly. No, it's based on usage

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: and resource assignments. So it really depends on what the agency is consuming. It could be project based in all three of those buckets, depending on are they bringing in professional services for a project, are they utilizing AES staff for that project, And are they looking for enterprise application licensing for that project? It's yes to all three. You will see project spending in SLA, in TypeSHeet, and in bespoke.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: And so my question is around So this is your funding request from these different funds or for these different funds. Is it from or for these different funds?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: It's appropriate to these funds.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Spending authority is put towards these funds.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Okay. And then who is making the spending, the day to day spending decisions? Is it the same entity in the CES and the demand?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Everything that comes through our business office. So AES business office, there is considered to be a wall between each of the business offices where we can only see what's happening in our own business office and is what's flowing directly through Kate's office and Kate's team when contracts that we sign at ADS, contracts that are under our three month billing relationship. I

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: would just add to that, under foreign and price services, it is ultimately the CIO's decision as to how those expenditures are incurred. When we look to the demand side, it is a bit, depending on the service being requested from ADS, it is a bit of a collaboration between the agency and ADS because it really is reactionary to what those agencies are looking for, what they're looking for bills, how have we worked out the plan to build that out. So we work really collaboratively with those agencies to provide us services.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: And then the pieces that we're no longer seeing that are in the individual budgets, those decisions are being made by spending decisions on those line items, those IT line items, are being made by that individual?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Well, the decision to actually pay the vendor was brought in. The thinking is that ADS will still hold that engagement, hold that contract with the professional service, but the agencies and departments will pay for those services once they're rendered. So invoicing will go directly to the agency or department where the project ultimately resides. So where the decision comes in to pay that, it's believed that it would be a recommendation from ADS to that department to pay the vendor, But the ultimate decision to pay would be based off of that department or agency.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: So is that a new process that will

[Sen. Wendy Harrison, Chair (Senate Institutions)]: have to be undertaken?

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: And do you know what problem that is trying to solve? Or is that the same question that I asked you before?

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: So ADS will hold the contract and make a recommendation, like YapPay, but it'll be up to the agency to decide whether to go ahead and do that. So there could be it sounds to me like there could be some confusion or cross wires in ABS and agencies on how we pay for kind of assess performance maybe and decide whether it's time to pay.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: That's something that we are actively working with finance management on. They do have access to all of that information and data. They're able to see holistically at all of the various business offices. I think where you would find like an IT mod fund that's coming from state funds where there's other projects that intake federal dollars. And so it's, I don't know if finance management can see on the back end around those federal dollars paying an internal service fund and then the internal service fund between the vendor. But there's some details that need to be worked out. And we've spent two years on moving to this model. We worked very closely with finance management over the summer and into the fall to get this aligned and outlined properly to meet all of the agency's needs. And then when it comes to kind of our operations and how we depend heavily on the funds and the spending authority, that would just, it's just going to require that we change some internal processes in order to make sure that we have all of the right information, but it's also likely looking that we've got some dependencies on finance management to provide content and data to us.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Ben Cho, may

[Sen. Wendy Harrison, Chair (Senate Institutions)]: I ask you?

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Yeah, so I have is this likely to increase efficiency and or expediency with the agencies and departments that ADS is working with?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Efficiency and expedience in which area? It's going to reduce a couple of internal steps that happened today,

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: but

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: as far as the governance and oversight, we need to make sure that everybody's doing things the same.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Yes. That

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: may be under the authority of finance and management because we don't have the authority to issue spending authority authorization under ABS so they are taking on a lot of extra work in finance management that is why we're being really methodical about how this can happen.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Not going belabor the point, but I have concerns about this. Our ability to do our job.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Can you say a little bit?

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: So there's chunks that aren't going be in the IT Mod Fund. How would this affect

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: the reporting that we spent so much time setting up last session?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Sorry, not the IT Mod Fund. I'll talk about that.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: That's inclusive. I

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: just like to

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Yeah, go Sure. So the communication and information technology fund or the mutual service fund, there's going to have to be clear direction around how agencies categorize that spend and then how we can informally report that back. And we would look to finance and management to provide that local reporting because we, even if agencies consistently track the spend, we at ADS do not have the ability currently to see that activity. We can only see through our ledger. So we would need sites and management to provide that level of data. So

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: can you talk a little bit about how this would affect your ability to rationalize IT spending across state government in terms of cost savings, cost avoidance, management of IT, the kinds of things that ABS was set up to do? Alright. Well, I'll I'll ask more specific questions. I I guess what I'm a little puzzled, first of all, why the IT modernization fund doesn't show up. It seemed even though it's a general was a general fund allocation a few years ago, it's it's it's in order to have a picture of what state government is spending on RT, it seems like an important part of it. It was, what, dollars 70,000,000 or something, right?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Yeah. So part if you don't mind, I can answer it. Because those were set up as one time appropriations and not

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: part of our

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: base budget, we do represent that a little differently. And earlier on the slide deck, I did provide a breakout slide five where we are on the high teen modernization front so that

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: you

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: can see that. When all was said and done, we had $77,000,000 that was appropriated for projects, and currently the remaining amount, and this is as of the December, there was $27,400,000 And they are dedicated to very specific projects, and you can see the activity.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Yeah. I recall that. Guess commenting that it would be useful to have that somehow. Well, it's shown here, but somehow included in the big picture, I guess, is what I'm suggesting. But the other question I have is around the demand services. It sounded like, in your response to another question, that some of the money that shows up in demand, that's gonna be demand services is I guess I'm what I wanna ask is how is it how how how are those expenses distinguished from the kinds of expenses that will then that will now show up in individual agency and department budget? So some some of it, it sounded like, was for particular projects, for example. So can you can you give me a little more idea of what distinguishes the costs that will show up in demand services as opposed to the bespoke costs that are now showing up in agency department services?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So can you go back to slide eight? So what you will see for project costs in the ADS budget is that the ledger for ADS will be any type of licensing that's necessary for a project.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: But why doesn't that

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: licensing.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: And why doesn't that show up in the project cost?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: It still shows up in the project cost. It just shows up through our ledger and the project cost, not in the agencies.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: And why is that?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: The reason for that is because they are enterprise wide products. So we are able to buy it at bulk rates for the entire state and get better pricing that way. So we will bear the costs of those products in our ledger and then seek recovery from agencies or departments for those specific licensing. So let's say for the case management systems across the state, the tool that we use, we buy all the licensing that we believe

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: we need.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Then we bill back AHS only for what they're using.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Right.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Say, hey,

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: I'm

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: thinking only what they're using. So ultimately the project reporting can show that in their costs, but we can also show that portion of the project costs.

[Sen. Joe Major (Windsor District)]: Thank you.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: I'm not sure, I fully got that.

[Sen. Joe Major (Windsor District)]: Well, guess what I'm about to say is kind of to your point, kind of to everybody's, there's a lot of unknowns. And it seems as if it isn't completely flushed out, which is fine. Because anytime we have change or anything is to ideally make better, there are going to be unknowns. Given that, do we have a mechanism to assess and then say, is this working? Isn't this working? Do we need to change? To the representative chair's point, just in one instance, have two sets of decision makers where you're going to have to It may not be a line, and so what do you do then? So my suggestion is to, and I'm all for change if it's for better, but to make sure that we have a mechanism to assess if it is. In essence an after action would be, what we did right, what we did wrong and how we can make it better.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Good point, Senator Major.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Thank you. Right. But I feel like I'm understanding that this change to how the budget's being presented was not necessarily your idea. You don't have to answer that. Just to Senator Major's point, it sounds like we should be talking to Commissioner Gresham and ask him about his idea. Okay. How will the ECMO dashboard change? Will you guys be able to you've been updating it every week. I know we were all very excited about that. So how will the annual report, I assume, will be less impacted just because I imagine that's a big deal project that you're there's lead time on, right? Like, we're going to need this, we're going to need that, we're going to need this and that. The ECMO dashboard was you guys put a lot of time into updating that last year at our working in collaboration with us so that you could update it every week. How's that going to work? Or will it be okay? Are planning

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: to provide those updates. There's a couple of data points based on what we're talking about here that I have asked my team to start tracking on, is contract ownership funding, where the funding is coming from and who is the funding owner, so that if we do add those as trial data points on the dashboard, it will provide the committees with visibility into where that originated funding source could be. We're working through the volume of reporting and keep in mind, we don't have the investment of internal systems. I think I've said this before, when Workday goes live, I would fully expect that we would have a way to have immediate access to this type of data. We just aren't in that system today. And so that is a little bit of a challenge with the reporting on the projects. I think those extra data points are going to be important and I just my hope is that we're not looking at thousands and thousands of spreadsheets for manual reconciliation because that could pose some delays in the reporting. So tracking that as a potential risk that Commissioner Brush and I anticipate would have some fixes for. Just

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: trying to make sure I'm following along here and having some challenges, but will this new appropriating concept? Is that the best way to describe this? Okay. Will it have any impact on things that you are working on, that we have been concerned about and hoping to see ongoing work on, like cyber, any security issues, privacy issues, will this impact your ability to have responsibility for that across the entire enterprise?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: That is built into court of price services. So if house appropriations moves forward with what we agreed to here, that would be covered under court of services. So there should be no impact to that.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Okay.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Cool, but security is built into foundational services and the resources, the team, the tool sets that they use, how they deliver those services across the enterprise and all the security work there. There is additive to that, which today we don't have additive. There are project based paths, which would be vulnerability testing before go live or if there were any kind of security work that would have to be done on a particular project that would be in addition to what Fortify Services is showing, But our security team is fully covered under CDS.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: And are employees moving in the scheme or are they staying where they are? So are all ADS people staying at ADS or are they moving to the units? Are the units picking up more staff?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Yes, staying with ADS. So I think we've talked about the portfolios. People were, they are aligning under portfolios but staying put, I know, it adds a layer of confusion, but we never changed the organizational structure when ADS was created back from when it was pre ADS. Have, and so now we did.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Can you say that again? You never changed the organizational structure from before it was ADS.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Correct. Is that true? Is that true?

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: I don't understand that because there was pretty significant difference in the relationship between ADS and the departments that happened as a result of ADS. It is my understanding, So especially with your

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: when ADS was established, we assumed all the IT roles across the executive branch, but those structures kind of a lift and shift in some ways.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: What structure?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: The team that supported ANR, the team that supported Fish and Wildlife, they stayed there. They came under the ADS umbrella

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: But they're sage.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: But they still supported the same user. That hasn't changed until now. Now we rolled out the portfolio vision and we're looking at how we can align services better outside of the individual agency structures and really around the needs of our customers.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Okay, now I have light bulbs going off. So now you are talking about moving, you actually are talking about moving people.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: We've just shifted the leadership team to create the leadership structure. The system administrators and the developers are still supporting exclusively those departments. And so this puts a little bit of burden on our IT managers and deputy directors because now they have to take up the work of the rest of the 50% of state government. That was the analysis that we had done is that moving into maturing the agency, less than 50% of the departments actually have dedicated field staff.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: So how many staff does ADS have today?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Three ninety eight.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: How

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: many? Three ninety eight are.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Those are all filled?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: I'm sorry,

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: three eighty

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: nine. No, we have a 4% vacancy right now.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: So you're allocated three eighty nine, you have a 4% vacancy rate. In this scheme, what is your staffing?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: We have 180 in the demand and the rest in MCPCS. What is the rest?

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Is it the same amount of staff as you have now?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Yes. We don't have any.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: So it's three eighty nine with an expected 4%.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: But if we saw that folks, let's say those same folks supporting agency of natural resource, were doing things that are outlined in core employee services, desktop support, help desk, there's no reason why they should sit in the Agency of Natural Resources support team. They should be coming up to supporting everybody in the state government.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: So are we looking for ways to find efficiency and potentially

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Standards?

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: That'd be great. Less positions, maybe? Is there a lot of duplicativeness across state, these positions?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Digging deep into the measures for each one of those services, performance, quality, and capacity, I think that's where we'll start seeing whether or not we have more people than necessary in supporting particular service sets. We are going through that analysis right now.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: So is one of the problems that's trying to be resolved here rightsizing the agency staffing with the work that needs to be done?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: I don't know if rightsizing is the right phrase for that. I would say that we are trying to do a better job to define and clarify the services that are being provided and necessary to support the executive branch with the resources we have.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: That sounds like right sizing to me with the resources that we have.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: But it also drives to the consistency and the standards, because if we have 25 different teams across a very small subset. We have 25 different ways of doing things and creating those foundations under court means that everybody's doing something the same. So if that one service that has a security incident or security issue, if we find that they weren't following standards, we now have to, this is what core enterprise services comes in as an overlay to say, you need to do that. So it's a level of oversight for us in governance management for us, but it's also doing things consistently so that every user in state government can expect their things to work properly. And we don't have a situation of the haves and have nots, which is what we're moving away from.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: We gotta make room for some other folks, go ahead and then.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Okay, just respectfully, I'm thinking about this in terms of things like CCWIS system. Your last comment. The

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: technical debt areas are a direct product siloed opinion in many cases. The model that we're moving into creates ecosystem that creates an environment where it forces the consistency and it forces us to look beyond just the individual things as CCWIS is a replacement to SSMIS. That is an environment and a system that has grown over the course of multiple decades to be something that it was never designed to be. But if now you're looking at a collective ecosystem, we may have systems that are already doing what needs to get done. So we can now repeat that consumption of service in the field like we're doing in court. Bram Kleppner?

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Is this reorg involve people physically moving from sitting in the ANR offices to sitting in the ADS offices?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: We don't really have offices, no. We actually, we work across all of the couple 100 state locations that are out there. We're flexible. But there is an expectation that I want my team to show up the way that our partners and state government need them to show up. And if that's every day in person, then that ends up being how it's aligned to their role. If it is, and we do have teams that do operate that way. And as we go through this change, too, it creates greater visibility around what those needs are with each one of the offices and departments.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: So I feel like we've dragged you pretty far from your slide deck. So did you want to revert to your slides? We have a hearing up in our room at three. I just wanted to make sure that we give you time to finish your presentation, but I don't want to cut off question.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: I think your funding asked the biggest change that you'll see in what we're doing is we have, you'll see double the number of funds, so we only had four funds that we would show in our dashboard in prior years, now see eight. For enterprise services is critical for us to move forward because what it also does is regardless of whether or not people have funds to pay for their extra stuff and their projects, more enterprise services is the foundations that become measured. If at any point in time through innovation change transformation, we decide that one of those 13 categories isn't necessary anymore, that gives us the opportunity to downscale as needed. But it also gives us an opportunity for oversight around the volume and demand that happens throughout state government that we don't have the ability to report on today in a transaction based model, as we seem to always be trying to just catch up as opposed to truly managing and operating IT services. The demand area is one that we will be scrutinizing greatly over the next year. We're already starting to do that primarily for us in the field services space is what are we doing and why are we doing it? What are the different systems out there? Are we meeting standard requirements? Do we have enough resources? And also be able to shift resources within a portfolio now instead of waiting for ANR or, I feel bad about the thinking about ANR, but pre letter acronym agency to say, we want that work done or we need work done. And that's a deficit spend model today because there is no matching recovery to the true expense of people's timesheet with a rate that's never changed. So that's not reflected in this year's budget. It will be reflected in next year. So you will see change next year coming there. And I do hear you in your bespoke piece is that I either expect that we're going to have a lot of what is the PR, what is that? Excess receipts. Excess receipts requests. So when it has to go through our business office, we're going to potentially see the expenditure and the recovery in the bespoke to be vastly different than $5,000,000 And I think I've said this before in institutions not speak and I definitely say this before is we cannot decouple those three activities from each other. And so this puts a lot of onus on us to make sure that we don't do that, but budget, expenditure and recovery must all be used in conversation when we're talking about an internal service agency. And so those are really our asks.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: I had a quick question.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: So there's a number here that is associated with general fund.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: What's it?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: 9,000,000?

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Yeah, 9,000,000. That was it. Remind me what we've done for general fund before.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: We've never had general fund.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Never had general fund. That's right.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: I'm sorry. We have had a small, small, small sliver of general fund support, but we're talking $200,000

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Okay. So what's in general fund now?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So if you go Yeah, it funds corporate services. John, can you point to slide 10? And as you're going to slide

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: 10, what general fund does, it's about a quarter of the total cost of CES and it reduces the allocation costs to the agencies. So it reduces their per user rate that they have to pay into CES.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: And it it supports sort of the central office of ADS in effect. Is that

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: It supports five different categories. One is split, so network access is split. All

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: of all of this on this slide is the $9,000,000?

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: No. The Data and Governance Administration.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Oh, I see. What's general fund? Yes. Was labeled as Yeah. General

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: did include Apple Essentials in there as well. So Stacy Gitzigrenco came in and talked about intake in the business architects and working at the front end of tasks, which is also something that we're looking at as more and more on the reporting, how we report better on that. And then the IT procurement, which is our business office and administrative staff. So that's what general fund is covering. Everything else is under an allocation cost that is distributed per active domain user. Basically, if you're a live person that logs on, that is counted towards your numbers as an agency or department.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Okay. And so that's all the base software or services that everybody uses?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Correct.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Okay. I suppose I'll understand this eventually, but it's pretty confusing.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: We've got a couple weeks open. Can do it. TikTok, yeah.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Yeah. We do trainings. This does create greater transparency and for our partners and state government, greater predictive of every week. That was the whole foundation behind this. Interestingly enough, we've been talking about it enough and having other departments and oversight organizations review it as well as our peers across other states that now we have some meetings with other states looking to see how they could adopt a model like this because it does create better predictability and it forces us to be accountable and measure the work that we're doing.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: You. Senator Harrison. Thanks. So, two questions. So, is the core enterprise services. So, those are 49,000,000, right? And then that's what's on, page, slide 10. So would that spreadsheet that we were just looking at that doesn't have numbers on it, would that be, would the total of all those be the 49,000,000? Okay. And then, in our committee, we didn't get, or at least we haven't looked at, ten and eleven, slides ten and eleven, which are just they're not the whole budget, I don't think. But, I so if if I I think it would be good to spend some time on those. So

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: these are the gyrations of the budget for us to get to the bottom. It shows how the general fund is hitting these various account categories within our budget, whether it be wages, whether it be contractual services. You can see all the line items that are in there, the breakdown between operating and personal services. The special funds represent those, the MRP and the BCTI fund, And then the internal service fund are all of those other ISFs that we called out, whether it be the CIT and the Vision Fund, which falls within Core Enterprise Services, or the three new funds that represent SOA type C and the slope. That falls into the internal service fund column that you see there. I can walk through these, and I can read them line by line, if that would be helpful.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Well, But is this supposed to add up to $96,000,000 It does.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: If you go to the next

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: slide, John, it rolls up at the

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: bottom as So it crosses over to and actually it's not in there. I'll have it got cut off. So the two pages do add up to 96.1. Yeah. So if you take the four on this, is it the letter, if you take the green line that you see there, the 49,200,000 and the second page, thank you, the 47,300,000.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Okay.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: That's the nice. And what are

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: the other I'm sorry. Just blurting out here. But what are the other rows here for FY '27 governor recommend target and then target risk recommend? Can you explain those?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So those are, if you looked at last year's budget, last year's crosswalk, and you added 3% across

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Okay. So it's based on last year's budget model, and it's a different model.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: With a 3% growth. Not making any other changes, just applying 3%. That would get you to the $141,000,000 in totality. I'm sorry. Well, on on on deck 11.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Yep well and it's zero on the next page so

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: which is zero on the next page right because we now have two appropriations instead of one appropriation last year we had one appropriation now it's sort of prosecution This is not very helpful for the conversation. I'm sorry because there are so many changes that have happened from last year to this year just construction alone. Sorry if you

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: mentioned this earlier but is there some easy way for us to see we've gone from 140 to 98. The 42,000,000 has now moved into individual agency budgets. Is there any way for us to see that so we can compare last year's total to this year's total?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: I don't have an ability to show you that. It's something that we can request to financing management. So one thing I would like to point out is that the understanding from ADS's perspective is that every year the citizen collective in the agency's budget passed as well as our budget passed. We would look forward and ask for x amount of spending across the enterprise, which included project costs. And those agencies, when they had these projects originating from, were also asking for the same amount of money.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: So that was a duplicated appropriation.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: It was a duplication of spending,

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: Right. The spend pulled out later.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Correct. Yes. So what this does is it takes out the spending authority from ADS, but it leaves the spending authority in the agency's and department's budgets. So it should be there. I don't have the ability to show that because I cannot see into other agencies' budgets.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Do you have a sense for how many different agency budgets that have that IT allocation in me?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: I would say all of them

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: do. I

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: only have one that was not.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: One thing that would be helpful for me, I think about our committee trying to write a letter, would be a I hate to ask you to do more work, but it would be really great to have a one page just a narrative that just says, because as we've also done our work with appropriations, I know there were a lot of changes this year to how agencies are being asked to present their budget information to committees and the questions that we were asked to ask. So it'd be helpful if you could help us with just a one or two page written document that says, here's how our budget is being presented differently this year.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: About Sure,

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: if I made the appropriations committee, it's going to be presented with your budget. And then all the agencies are going to come in with a new IT budget that they didn't have last year. So I think, I mean, we have a one year transition problem because in '28 and '29, we'll be able to compare the 'twenty eight agency budget, 'twenty eight ADS books. But this year, they're having to compare across two different systems. So I think collectively, it would be helpful to our friends in appropriations and to ourselves if we were to figure out some way to sum up the piece that is now put out and then scattered among the agencies.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: I'm just waiting. Okay. So

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: on this sheet, I think I'm reading that there is a $16 is it the $16.90 reduction in personnel classified employees?

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: 1.6.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Point six. Six. Vacancies?

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: No, I mean, I'm looking across at that five thousand five hundred thousand and five hundred thousand and ten line item first, underneath personnel services. I might be reading this incorrectly. That's really my question. So it looks like there's $16,000,000 less being spent there. Again Oh, yeah. So

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: part of this is I need to look into that. I'm sorry.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: It looks like the negative $20,000,000 that's the offset, is that internal service?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Right.

[Sen. Wendy Harrison, Chair (Senate Institutions)]: I think it's the way the accounting is happening.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Yes, it is hitting internal service from $20,000,000 I need to look at that number. Apologies. Good catch.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: I'm going to follow over here. This is not so I know that the budget numbers are in the adaptive system. This is just an output spreadsheet that everybody has. So that's where

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: We're not reducing salaries by $20,000,000 a year.

[Rep. Bram Kleppner, Member (House Energy and Digital Infrastructure)]: Is that the number that's moved over to appropriation number two that has underclassified employees and exempt employees? It's about 18,000,020

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: million Sorry.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: So if you're looking at page 11, you see the negative 16,000,000 in classified employees and exempt employees. Then if you look at page 12, you see it's positive 18,000,000.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Oh,

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: yes, I'm sorry. That's exactly what it is. So from last year, again, last year, So we moved from one appropriation to support the entire agency and for our expenditures to two appropriations. We have staffing that resides, staffing costs that reside now in two appropriations. So in order to show that change from the prior appropriation to the new appropriation that this will live in, that's a show of that movement.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: So we have staffing that supports core enterprise services and we have staffing that supports demand needs. And keep in mind that under one appropriation, we saw the recovery of that in SLA, in timesheet billing and in allocation. Now we're seeing them, now we're saying no, no, no, as field services, you don't get to pick your recovery model, you're only getting one. And so that shifting those staff that are truly field services under field services or are truly core enterprise services and available for support of the entire state government, that's where you're seeing that distinction, because now they live in two separate locations. Thank you for clarifying, because I don't know.

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: Yeah, I would start

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: to repeat lessons on this.

[Rep. Laura Sibilia, Ranking Member (House Energy and Digital Infrastructure)]: Imagine how we feel. Know.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: I've done anything. Although, it does look like there's 5,000,000 it's $5,000,000 less. If you take the negative on page 11 for all personnel services, $37,000,000 negative, and then plus $32,000,000 on page 12 for personnel services. And that's because why?

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: So we are looking at potential reductions under foreign price services as they go, and we are looking to do that through potential retirements that we're looking that we expect to happen this year. So we're not looking to cut any positions, but we believe that there will be positions that become vacant, and

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: we will

[Kate Slocum, Chief Financial Officer (Agency of Digital Services)]: apply savings to those vacancies.

[Rep. R. Scott Campbell, Vice Chair (House Energy and Digital Infrastructure)]: But you're not crediting positions, but you're accounting dependencies.

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: Just leaving them filled.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Correct. Does the work

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: other people pick up the work or the work

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: No, the work is becoming more streamlined. So we're not doubling the work, we're not doing the work different, we're not repeating the work, we're doing more proactive work as opposed reactive work. And our vacancy right now is the lowest it's ever been. I said 4%, we're going between 34% and we've traditionally held about 18 to a 12% vacancy and so that is it should be like statements of savings but

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: We need to give our committee time to get up to our room for 03:00 hearing. Think I see our next steps.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: It'd be

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: great if you guys could get us just something simple in writing just a one pager that says here are the differences. Here's how our budget has changed from last year to this. I think we'll probably want to hear from Commissioner Gresham about why these changes are being requested from DFN, and then maybe we'll hear from our own fiscal experts at JFO. So I feel like I have a plan. Thank you for joining us on our journey.

[Riley Hughes, Secretary and State CIO (Agency of Digital Services)]: Thank you for joining us together. And we are adjourning with you. Are you adjourning with us? We

[Rep. Kathleen James, Chair (House Energy and Digital Infrastructure)]: are. Okay. It's an adjournment journey.