SmartTranscript of House Energy and Digital Infrastructure 2025-02-19 9:00 am

[Jack Locker]: Alright. And we are live. [Chair Kathleen James]: Great. Welcome, everybody. It's Wednesday, February ninth, and you are here with the House Energy and Digital Infrastructure Committee. And we are talking today about our draft committee bill twenty five dash o eight nine six. And we are here with, the leaders of the agency of digital services. So I'm representative, Kathleen James from Bennington four district. [Vice Chair R. Scott Campbell]: Scott Campbell from County Essex, Saint Johnsbury. Richard Bailey, Memorial two. Chris Morrow, Wyndham, Windsor, Benny. Patrick Gallagher, Bradworth, Talladeham, get to. Patrick Howard, Rutland four. Graham Kleppner, Chittenden thirteen, Burlington. Morris Bailey, Wyndham. [Jack Locker]: Jack Locker, committee assistant. [Chair Kathleen James]: Great. And folks joining us in the room, please? Lisa Gaughnan, IT consultant. [Stacy Gibson]: Evan Curran. I'm an in Curran with the Newcrossing Group. Stacy Gibson, Grahamfield, director of the enterprise project management office for the Agency of Digital Services. Jackie Frazier. [Denise Ramm Hughes]: I work with Mora Strategies and represent EatonWell. [Vice Chair R. Scott Campbell]: I'm Joe Kelly with AESGIGSTAD. [Chair Kathleen James]: Great. Alright. For the record. [Assistant Kate Slocum]: Okay. Hello. I'm Kate Slocum. [Speaker 6 ]: I'm the chief financial officer for the agency [Assistant Kate Slocum]: in digital services. And for the record, I'm Denise Ramm Hughes, the secretary for digital services and the chief information officer for the state. [Chair Kathleen James]: Great. So we are here today to get your thoughts and feedback on our draft committee bill. So we will turn it over to you. [Assistant Kate Slocum]: Thank you very much. So we we have Benjy Phil, and we have gone through around kind of translating and understanding the intent behind the bill and what the committee believes is meaningful or would be meaningful. And so I'm hoping that over the next forty five minutes that we can have some active discussion about that too. But I wanted to first go through how projects are managed and how they're handled. And, Kate, you might want to let this Yeah. I think I should let you Unless you would like to be the director of that loan. No. I do not. [Chair Kathleen James]: Yeah. And [Stacy Gibson]: Excuse me. [Assistant Kate Slocum]: And I think from there, if madam chair, if that's okay with you and the committee, then we can go through the language in the bill and the addition to the language and making sure that based on the information that we're sharing that it actually aligns to what you intend the outcomes to be. Okay. And as a brief history, we are specifically, good morning, talking about the dashboard. And that is a site and it's a tool that the agency of digital services put in place in the prior CIO as visibility. But this is the first opportunity that we've actually had to have feedback from a legislative audience. So just wanna make sure as we have an opportunity to make legislative change that we make change that we're actually looking for outcomes on. So and in the Zoom I don't know if I have actually shared in Zoom before. I'm gonna share. Jack can help you with imagine that. Yeah. I've been using Teams so long. I'm just gonna do a flash share to get the share. The whole screen. [Vice Chair R. Scott Campbell]: Oh, yeah. So [Assistant Kate Slocum]: I am going to show you that this is the EPLO landing page of the agency digital services. If you go to the digital services site, you'll see that the enterprise project management office has its own landing page. There's a lot of information in here, and there's actually some information that has yet to go live that the, the division I was working on that we can talk about if it warrants it in the conversation here. And this gives all agencies and departments in state government who are looking to engage with Aetna a real comprehensive overview on what they can expect to experience from starting a project, understanding what it is that we do, what the project life cycle is. It goes to the dashboard. There's an FAQ that likely needs to be updated. We point to some statutes and and metrics here. And so if I go into the project life cycle, the reason why I'm sharing this with you is that it goes to explain what our project management methodologies are. And so we use, the Project Management Institute's models, PMI. Oh, I'm sorry. I thought There's no question. [Chair Kathleen James]: Is to be okay. And [Assistant Kate Slocum]: Paniti, who is certified and has many members of her division certified as well in PM work and engagements can explain in more detail, but we have five phases that we take a project through. And so when you're looking at dates or costs or estimates, we initiate that in the exploration phase. So one of the reasons that we do that is if there are internal costs incurred, so they have come here before and explained that we're basically one hundred percent charged back internal service agency. And so if somebody from Stacy's team is engaged on a project that we anticipate to be over a certain dollar value, we start billing for their time. And so if it's a federally funded project, we have to start accounting for that time as well. And so usually, you'll see that estimated start date or estimated close date is gonna be based on the very early stages when someone says, hey. I have something I wanna do. There's no contract. There's no nothing. We still haven't gone through the RFP process. We still have done a discovery. And so in order for her team to manage that from a back end billing, back end invoicing, and a federal validation standpoint, they'll put those dates in that exploration phase. Initiation is the phase that you go through where now you start doing some of the early planning. Mhmm. And you work through what are the resources, what are the business requirements, what are the things that need to have happened. The IT ABC form now starts getting filled out. Planning becomes issuing the RFPs. And so you can imagine from the beginning of phase one to the end of phase three in some projects, I mean, everybody likes to talk about ERP. That was years. That was twenty twenty one to twenty twenty five, four years before we actually got to a project. [Representative Bram Kleppner]: Good question. You were mentioning federal initiation or the federal validations. Are all these projects federally funded to some degree or another? So what what does that mean? And if it's just state money, why why are we what does that mean? [Assistant Kate Slocum]: It it's a standard process that will apply to all, but there's a high number of projects that do have some federal funding associated with them. So any one of the AHS projects, ninety nine percent of them have some level of federal funding for them. [Vice Chair R. Scott Campbell]: And may [Representative Bram Kleppner]: impose certain [Speaker 6 ]: standards. Certain standards are required in order [Assistant Kate Slocum]: to right. In order to for an organization of this size to be able to run through projects efficiently and consistently, you you then apply the same same modeling. Right or wrong in the audience visualization, it it ends up being why, you know, in in some respects, it's also how we have to get around some of the limitations with vision and being able to account for timesheet hours and billing hours. So what we've done over the last two years is really dig deep into why do we do what we do, how do we make it better. And now that we have an audience of of legislators and a committee that we can work more closely with around providing that information, I think it's important that you know some of the the processes that we're going through. So everything in green then becomes phase four, which is execution. The dashboard requests in the bill really are just aligned to that phase four. They're not aligned to the prior three phases. And in the closing phase, that's usually when we opt for the EPMO organization, and we start bringing in maybe internal resources or business resources or even contractors to just manage the system itself. But that's when the business agencies start taking on delivering the new service. So I thought that that was important to share with the committee so that you knew. And if I'm missing something, please let me know. Mhmm. Representative Flask. [Vice Chair R. Scott Campbell]: Go ahead. I I [Stacy Gibson]: was just gonna add. In the execution in phase four, we also do what's called monitoring and controlling, which is where we do a lot of performance measurements on how the project is meeting its expectations. So we don't put the full rigor of performance monitoring on a project until we'll kind of start it in planning because procurement processes take a long time and sometimes it's important to tell that story, but we really start measuring the performance of a project in phase four. That's when we baseline our schedules, we baseline our budgets. We know what our resources are. We know what the vendors are going to charge us for the new system. And so that's when we actively start to really monitor and report out on how we're performing. [Assistant Kate Slocum]: Oh, sorry. Go ahead. [Vice Chair R. Scott Campbell]: Yeah. Well, so what I'm guessing is, in the in the graphs, Bill, on page two, line six, we're talking about the scheduling or the reporting information and the schedule report. By original, maybe what we mean is original contract as opposed to the the when the contract or which contract gets adjusted based on changing circumstances or whatever Mhmm. Then the estimated execution date may quite shift, but we don't know Correct. Yet. So Right. So Maybe if we say original contract date versus as as another data point versus Yeah. Just the the current estimate. [Stacy Gibson]: Terminology and definition is really important, and it is something that that I think over the years, we've all kind of gone back and forth on what is the true baseline start date of a project. Right. Using ERP as an example, it took us two and a half years to negotiate a contract. In that two and a half years, we weren't just doing contracting. We were gathering business requirements. Right. So we were we had resources assigned to do that work. We had agreements with the agency of administration to allow us to bill for those services. But we didn't really get a fine point on the overall budgetary needs for the project until after we completed that RFP process and done the independent review. And at that point, we were able to to legitimately say, we're gonna start as soon as these contracts are executed, which became January third of twenty twenty five. And our completion date estimate is now, I think, twenty twenty eight, for implementation. That's the actual schedule that that we really wanna monitor and track progress against. Right. Because if you're gonna have, cost or schedule impacts, it's gonna be during that execution phase. So what can happen during execution is, to your point, changes will occur. And part of our methodology is to allow for an agile, execution phase where we can iterate. What that means is we can plan out sprint releases. So, for example, we're gonna do HCM before we're gonna do financials. It's not a big bang deployment of all three modules at once. We're gonna do the HCM module first. But as we're going through that, we'll even have little releases within that module that we will learn from. And we may have to go back and adjust the requirement because we may have thought the business and and ADS may have thought, well, this is what we think we want that requirement to do. And then when you actually see it in development and configuration, you may actually say, I wanna I wanna just adjust that a little bit, or I wanna change that requirement because it's not really what I expected the result to be. So agile allows us to make those changes without impacting the overall schedule. Right? There are times, though, where if a new scope requirement comes in that nobody anticipated, right, we had no idea that some new policy was gonna come down from the Department of Human Resources or finance and management or even the federal government with their GASB standards and stuff. There may be new reporting requirements or some new requirement that we have to configure in the system that will take time to understand. We'd have to gather those requirements, do a design, configure it, test it, and then implement it. And that doesn't happen in a day. That can take days, weeks, depending on how big it is, months. And so those types of changes can impact the overall schedule. Yeah. But we have a change control process in place to allow for that, and I'll pause so you can ask your question and get into that if that helps. [Vice Chair R. Scott Campbell]: Finish up with that thought. So I certainly understand all that. Mhmm. I I guess what we're what we're wondering is, obviously, we don't we can't we're not gonna micromanage your your work. Right. We just have wanna have some idea of how things are going and when when things are going off of it. Absolutely. So an idea about the original contracting and the and and the right now, the estimated completion is based on what? On the planning phase or the [Assistant Kate Slocum]: It it depends on what Depends [Vice Chair R. Scott Campbell]: on what. Okay. So depends [Assistant Kate Slocum]: on what phase that we're in. [Vice Chair R. Scott Campbell]: So that's that's that's what we're trying to get ahead of, I think. Well, in here And it also might just one other thought, it might also be useful in the in this post, you know, in the detail about each project to have a sense of maybe when initial planning starts. So maybe initiation Mhmm. Date or something like that. Yeah. And then and then all these these other dates. So, anyway, I think that's I think that's what we're trying to get at. [Assistant Kate Slocum]: And that's very helpful. Representative Klotnick? [Representative Laura Sibilia]: I think this also speaks to our earlier conversation about the fact that it's valuable to know why when a date moves because Right. As you say Yeah. A new legislative requirement is very different from vendor failure to perform. [Vice Chair R. Scott Campbell]: Correct. Yeah. Can't interpret [Representative Laura Sibilia]: a delay unless you know why. [Assistant Kate Slocum]: We've been we've been spending a lot of time talking about this [Stacy Gibson]: Mhmm. [Denise Ramm Hughes]: All the [Assistant Kate Slocum]: way around. And there are some things that we have an opportunity to do now where I would like I would recommend that the committee ask, you know, we'll help we'll hope they'll be asked, but ask us to do this now so that we can go through a couple iterations of if this is what you're looking for rather than jumping right into changing statute and then not giving you what we want. And then now we're managing to a micro component, and nobody's happy. And so that's why I wanna share some of this with you is that there's some things that I think that we can do now. One is we've never had an opportunity to talk about the dashboard on what can we do, what do we have technical capabilities to do today, and what can't we do because we don't have we don't have some of the enterprise tools. And I do anticipate in the next year that we will be asking for funds that we will have to, ask our care fund to jump in that fund where we will say this is why we need those funds. And I think without having that, discovery phase and the planning phase that we're doing right now, that it's throwing good money after bad rather than making some really sound collaborative decisions on this is actually what we have to do. We know we don't have an enterprise grade. That's not a tool, project management tool. We know that our dashboard is coming from a system that doesn't report at an executive dashboard level. It reports at the project level. And so with each of the recommendations made by the auditor in their audit two years ago, we were actually in progress on each of those recommendations in some way. But now I think we're going through some of the refinement of that discovery gathering and data gathering to make sure that is this really what we need to do? So one of the things that we talked about was we submit an annual report, and I hope you've all had a chance to read this. It's long. As projects come off the list, it will get shorter. But we would like to recommend that we issue the one annual that's in statute, but then issue quarterly committee reporting so that you can start seeing some of that iterative change. And I don't think that that not sure that change in language now will get you what you want, but if we can try that for a couple of quarters and then come back to say, is this is this actually meeting your needs or is it not meeting your needs? I think that would net probably a better outcome all the way around. With the quarterly reporting, it's snapshot based. So let's say I love it. I'm using the ERP project because everybody knows about it, well, for the most part. If we take a snapshot at the end of March, the report issues by April first, and let's say an activity happens on April second, you won't actually see that change, described in the report until the the the June the end of June report July report. But I think if we do calendar quarters for right now, you will see three more reports before our next annual report comes out. And we have an opportunity to actually modify some of those sections too to provide a little bit more content or a little bit more targeted information. One of the things that we would like to do over time with the right toolset is be able to have an automated drill down so that you can actually choose by agency Mhmm. Or choose by department or even choose by face. And we just don't have we don't have the technology yet to do. The technology is just out there, but we you know, it's not we don't have it. And if the committee was agreeable to that, I I think that that would be something that we can issue immediately and start doing now. When it comes to the dashboard and I think I have this pulled up, but it's not. The dashboard, this is one of my least favorite dashboards. It's so busy. And, visually, it doesn't actually tell a good story unless you are in it all the time and look at it all the time. This is manually updated. We pull it from our project management system. We just moved over to this new system. We issued an RFP a year and a half ago. The cost coming out of that from the vendors was extensively high. It was in the millions, and that wasn't something that for an internal service agency that doesn't actually have an internal budget, something that we could just charge the agencies for on our behalf. And so we opted for something that was very low cost and Seventy thousand annually. Zero low functionality. Right? Zero zero it it doesn't have the enterprise functionality that that we're talking about here. So one of the actions that we took as a recommendation of the auditor was pull together this this breakout here. And one of the things I practice things that was instead of just saying green, yellow, red, can we actually put those visual indicators that are up on the project dashboard? And so if you were to see a quarterly report and you wanted to know just what the red projects are, You'd be able to pull that up, and then you can look at your report to say, why? How's that changed? But the why can't be told in the dashboard. The what and the when can be. The how and the why ends up going in the in the narrative report. [Chair Kathleen James]: And I wanna make sure you have time to to get through everything you wanted to say to us. So I did have some questions on the dashboard, but maybe are we gonna you guys wanna move ahead and then [Assistant Kate Slocum]: I would love to have questions. [Chair Kathleen James]: Okay. So in in looking at the dashboard, and we had hope nothing's ever simple. Of course, I I think we had hoped that this could be a a simple fix. But if you were to could you add a column that said contract signed or could would it be easy enough to add a column that gives us that gives the public an indicator of when [Stacy Gibson]: the project started? And if so, what date would you pick? So that isn't as simple as it sounds. I can I can do some analysis of the tool and see if that field even exists as contract start date? We do have start dates, and we have dates that things happen based on change orders. But I I'll have to double check on a contract start date. The other thing I just wanted to add is it's not an apple to apple transformation or upload from the project management tool to the dashboard. So the dashboard is built using a tool called Power BI. It's an Excel database, basically, that helps us take data and then create visuals visualizations out of it. The tool that we use, the data model that is proprietary to the vendor, we can't make adjustments to, and it does not play well with Power BI. So there are formulas that we have to build. We actually have to bring in a data analyst to work with us to to basically translate the data field from the tool into Power BI in order to create this dashboard. So our ability to make a lot of changes depends on whether or not he can he can make that transformation work. But I I will take that back and ask the question. But that's that's one of the limitations the secretary is talking about. The tool that we use, you know, it's its own tool. It's not an enterprise tool, and it doesn't give us a lot of flexibility with how we portray the data. The annual report even, we have to export all of the data out of the tool into Excel, build spreadsheets and formulas, and then merge it into Word. It take took me, I think, forty eight hours of time in December just to just to get the Word document to work Wow. With all the formatting and stuff. So there's there's an effort behind it. And that's and that's the disappointing part for me because I would like more than ever to be able to give you all the data that you want in a meaningful way. It's just we're limited by that. And so one of the things that I am gonna be working on with the team is, like, we've been building a template for schedule variance, which will give you kind of what you're looking for. The problem is it can't get out to the dashboard. It's a project by project metric, basically. It's in beta type right now. So we're we're testing it to make sure that it's representing things. But it's a nice snapshot at the project level. So, like, for ERP, for example, you would get a one page dashboard that would show you the percent complete and how much time has elapsed. And then there's a table below it that lists all the change orders that would inform why that happened. And based on what I've heard today, I would even add a little more content to it, like a narrative for each change order. What did we change? Why did we change? You know, what was the impact of that change? So I can give that to you at a project level. The problem is I can't get it out to the dashboard. Power BI just won't won't do it. Representative Cleggin? [Representative Laura Sibilia]: To the secretary's point that the dashboard doesn't tell a story, that you need that second piece to tell the story, and the dashboard only tells a story if you're in there regularly. I think it's unlikely that either we or a member of the public will be in there regularly enough to be able to infer the story from the changes to the dashboards. The question becomes sort of how do we make those accessible together to to us and and to the public so that they can have both halves. Yeah. That feels easier to me than trying to do the technologically impossible of Yeah. It it putting them together into one. [Assistant Kate Slocum]: It aligns it aligns to our strategic plan. It aligns to where we're where we're trying to go. We just have to meet a couple of those activities before we can get there. One of the things, and I think this points to the business outcomes, measuring business outcomes. As we start talking about toolset availability, trend analysis would actually be a really great way to show some of the story for you, especially as it comes to the performance of ADS versus the performance of a project. We want a tool, and I'll be the first one to say stop solutioning that. There's not a tool for that. Like, let's map out the process first and make sure that we're actually following the right process. And so we've spent the last two years doing that. We brought in our first change manager, and you have a business process optimization organization that you're actually in the process of building. And so what that's doing is taking existing roles within Aetna and EDS and revoxifying them in some cases, but recreating or creating roles that have never existed before. And so we have a chief performance office who helps the agencies measure key performance indicators around their services, their outcomes, how they are measured. But now when we can take that model and apply it to a particular project, we really need those change managers in the Admiral organization to be able to do that. We don't have those. So we have one, and we actually have her assigned specifically to the ERP project because it is so vast and touches everybody. So as we're maturing, that's why I'm trying to share these things with you is that, I think if we were to put something change something right now, you'll be very disappointed with the outcome. And I think we would be too because it wouldn't match where we really need to be going for the state and where we need to go in collaboration and partnership with legislature and and our partner agencies. And and it won't actually I don't think it'll fix it. I don't think it will give you the opportunity for oversight that you will need. And this isn't I don't wanna say no, but I think if we were to start issuing those quarterly reports and if the committee, while you're still in session, decides in March that, listen, I actually want them every other month. We don't wanna wait quarterly or we want them monthly while in session and then once during the fall. Those are things that we can do today as a commitment to the committee and then also share some of those progress areas that we're making that can that can actually start giving us a chance to possibly put forward a a change in the bill. [Vice Chair R. Scott Campbell]: Yeah. That's a question. I have another one. I do have another one. Great. [Representative Laura Sibilia]: Do you have it? [Chair Kathleen James]: Yeah. Yes. [Vice Chair R. Scott Campbell]: So all these projects here, do you have it's interesting to to know that to hear what you're saying, Stacy, about you have to download this stuff in the spreadsheet and then export it as word and basically correct it by hand. But do you do you want to have a person or or or a group that manages each of these project each of these projects or each set of projects or something like that. Right? So they must keep track of things, how how things are going and and and, you know, what's what came up that changed the schedule or changed the price or whatever it is. Do you have a template that you use that you have your project managing to use for that? [Stacy Gibson]: Yes. [Vice Chair R. Scott Campbell]: And is is that something that could you use to provide this information on a on a on a particular thing or or could be or could be linked to your to your dashboard. That would actually maybe have too much information, and and it could be could be simplified if there's a link to this what's behind the test. [Stacy Gibson]: Yeah. So yes. And I will say I would wanna take a look at some of the status reporting to make sure that there isn't any confidential information that we would want to expose publicly. Right. [Vice Chair R. Scott Campbell]: Right. Maybe you wouldn't wanna put that whole thing out. I mean, [Stacy Gibson]: that's too much But I would be more than willing to give you access to it as the legislative body. Right? [Vice Chair R. Scott Campbell]: Well, it might even be I'm sorry. It might be it might even be too much information, but it might be the basis for nothing Right. That is that would that Yeah. Would give us this. [Stacy Gibson]: So one thing that we do do now is for Lisa, we have a a SharePoint site called direct appropriations project site. So all of the projects on this dashboard that have a direct appropriation from the state, whether it be the ten percent for human services projects or the full state general fund funding support, where we do deploy project artifacts, schedules, status reports, project charters, a bunch of different content. Lisa has access to that. I can open up access to the committee so that you can go out to that chair book site, and you can look at those projects if you want. [Chair Kathleen James]: I don't think that's a great idea. Okay. [Assistant Kate Slocum]: I don't think so either. [Chair Kathleen James]: Thank you for your I'm trying to be, like Thank you for your transparency. Yeah. I see a lot [Assistant Kate Slocum]: of red flags there. Yeah. We accomplished that with our partnership with Lisa. Yeah. Yeah. [Stacy Gibson]: So she can she [Chair Kathleen James]: can direct your awareness. She can directly access I know [Stacy Gibson]: you're very busy. You don't have time to read through all those. But if you were on a if you were looking for a specific thing, you could go out onto that SharePoint site or Lisa could could grab whatever information you need. So the other thing I will just say is yes, I have a team of portfolio managers, program managers and project managers. And we do weekly status reports. Those status reports get uploaded to the project SharePoint sites on this direct appropriations site. They also update the data every week in our project management tool. The dashboard is supposed to refresh every Friday at six. The dashboard you're seeing today actually, needs to be corrected. It didn't complete its load on Friday night, and we didn't discover the error until yesterday. So I'm waiting for the data team to fix that and reupload the dashboard. So there is a little discrepancy there. And that's one of the challenges with the dashboard is it's a manual refresh. It takes several hours for it to load. Stacy, so if we were to [Assistant Kate Slocum]: have an identification of what it would take to put the phase or start date, which is the contract start date, [Chair Kathleen James]: Is that the start in green? Mhmm. [Assistant Kate Slocum]: Yes. As a as an entry in here, when could when could your team find out by? But before the end of next week? [Stacy Gibson]: Yeah. Maybe even sooner. But, yeah, end of next week at the latest. I'm I wanna say the end of this week, but I don't know. Today, Wednesday? Maybe not by the end of this week, but certainly by the end of next week at the latest. I could I'll probably know before that. [Chair Kathleen James]: So secretary Riley Hughes I'm sorry. The question was whether contract start date could [Assistant Kate Slocum]: be added to the dashboard? Yes. [Stacy Gibson]: Yeah. So I'll have to go back and ask. But there's two things I need to validate. If there's a a custom field in the project management tool that collects contract start date, if there is, then it's just a matter of working with the data analyst to add it to the dashboard and make sure the load works. If it isn't, then we have to create that data field in the tool and then do that. So it just depends on [Assistant Kate Slocum]: But we should know within a few days if it's possible. [Chair Kathleen James]: If it's possible. Yeah. Yeah. I think, Lisa, if you all don't mind, for the record [Denise Ramm Hughes]: for the record, Lisa Gavan, IT consultant with JFO. I'm testifying later this morning, and part of what I was thinking about is just the general questions that people are trying to get at. Yeah. And so I think a lot of what we're talking about, we might not need to go down to that level of detail if we focus on what the broader questions are. And around the contract date, I think, because you could have multiple contracts, maybe if we develop a nomenclature and think about execution date. When that when the execution start date starts and that that's the date. Yeah. And maybe we just sort of work through these and tick the thought before we try and even think of what that solution might be because I'm hearing from the committee that some of the information questions like you were saying, Denise, what are we trying to actually get to, the information that you need for oversight, then maybe we can come up with the the most simple solution possible. [Chair Kathleen James]: Yeah. Simple solution possible. Right. Simple [Speaker 9 ]: solution possible. That. [Assistant Kate Slocum]: And that's and I we're we're aligned. That's that's what I'm describing here. And on time, on budget, it's high life. That's what we're trying [Vice Chair R. Scott Campbell]: to do. [Assistant Kate Slocum]: That's all right. [Speaker 6 ]: It's all [Assistant Kate Slocum]: we're And I'm not sure how it's written here won't accomplish that. [Vice Chair R. Scott Campbell]: And you have in here sorry to interrupt. No. Representative Campbell. A time being a last metric here, which is based on some things. Mhmm. There's some side it has start date there. It's [Stacy Gibson]: phase one. Unfortunately, [Assistant Kate Slocum]: it's based on phase one. [Vice Chair R. Scott Campbell]: Okay. [Assistant Kate Slocum]: So what it'll show is how long it's taken us to even get to an execution date, don't have the execution date on here. [Stacy Gibson]: Yeah. So, like, the ANR project, that's, like, a hundred and one percent time elapsed that's going all the way back to that [Speaker 9 ]: exploration activity. [Vice Chair R. Scott Campbell]: So it it would be useful to, I think, it's they said that it's good. Yep. But let's identify Yeah. Really what we're trying to do. [Assistant Kate Slocum]: Yeah. And with the with the toolset that we're in now, we went live on that in July. So this is brand new to us. Right. We've not had this before. Yeah. [Stacy Gibson]: And we're still going through growing pains with the [Assistant Kate Slocum]: new tool. So So I I figured it was important to show why you're seeing some things in here, but also give an opportunity to have as you have seen the report that I'm sure that there's aspects of it that look nice and aspects of it that made your eyes cross. Yeah. But that's another thing too that as we go through it, what we're what we can put in there, I wanna make sure that we capture. [Vice Chair R. Scott Campbell]: It's in the annual report. Yeah. Right. [Assistant Kate Slocum]: And even if even if the committee is not asking for it, I've already asked Stacy to issue a report in by the end of March. [Stacy Gibson]: Yeah. So I would just add that if there's any changes you want made to that annual report or even the first quarterly report that you get, just let me know or let secretary know and she'll let me know. Because we're we're eager to make things better. And and as she said at the beginning, nobody's ever given us any feedback on the annual report. We've been doing it [Assistant Kate Slocum]: for eight years. I know. Eight years. I've got [Stacy Gibson]: eight years of this reporting. So I'm I'm really actually very happy that people are paying attention and reading it. So [Chair Kathleen James]: You're you're talking about this report or the other rep this one? The other ones. That one. This one. Yeah. [Representative Bram Kleppner]: Oh, not this one? [Assistant Kate Slocum]: Well, it's in there. Yeah. But it is the ATMO portion of that. Mhmm. [Vice Chair R. Scott Campbell]: Yep. K. [Stacy Gibson]: So one [Assistant Kate Slocum]: of the things that we're working on too is defining what is an IT project. So that's going to be included on here, and Stacy's been working with a lot of other states too that do very similar things, central IT with an enterprise project management office. She's also in the process of, getting our certified under the PMI standards. And so this is this is something that really shows that Vermont is committed, but also experts in this space, and not every organization can say that. [Chair Kathleen James]: Brook, Marl? [Representative Bram Kleppner]: So I I think it's obvious. It's in the field, but I just wanna make sure we're talking a lot about dates, but this also applies to the the dollar amounts as well. So as those change, which makes that explicit. Do you do you wanna take go into this? I have some questions about the report and understanding the money and the technology fund. And do we wanna wait on that? Or [Chair Kathleen James]: So let's see. We have about five minutes left before we need to shift topics. The broader topic of how how the state of Vermont kind of funds and plans for its IT projects is not for today. We've got we're gonna want to talk to you guys about that, and then JFO and ledge council are working on a memo, like a briefing memo for us so that we can all learn. Yes. So if if that's okay, rep, Mara, then we'll hold that for Yep. Future. I what I think is gonna be an ongoing conversation back to the whole funding. [Assistant Kate Slocum]: Yeah. And I think we we may touch on aspects of that in the the second forty five minutes. [Chair Kathleen James]: Okay. Representative Kleffner, sorry. I feel like I kept [Representative Laura Sibilia]: There's no overlooking. You know, it's government. I'm used to being on hold. [Assistant Kate Slocum]: We we haven't even seen anything for that. [Stacy Gibson]: Better than it's gonna be. [Representative Laura Sibilia]: You know, presumably, an agency comes to you and says, hey. We wanna do this. DMV says, we want customers to be able to do these six things online without a human interaction, and we'd also like to do retinal scans to get that as part of the record. And then you go back to them and say, you know, the six things you want are easy. The retinal scans, we can't do. And at some point, you and they agree on these are the things we're gonna accomplish with this project. These are the goals, the functionality we want. What point in the process does that agreement happen, and where does it get memorialized? And is there, at some point at the end, a check back to say, this is what we said we were gonna do. Did we actually do it? [Assistant Kate Slocum]: I'm gonna answer the first part, and I'm gonna let you answer the second because you're working on that. So this is our fabulous, modern, interactive IT ABC form, and all [Stacy Gibson]: of those words are false. [Assistant Kate Slocum]: And so this is a Acrobat, Adobe Acrobat form that over the years, and I'm saying years, it's been in place for a long time, it has been morphed and adapt adapted and changed and modified. And basically, what it is, it's a piece of paper in digital form. And once you put something on a piece of paper where it gets memorialized is on the very last page when everybody signs on it, including the business agency who is responsible for the project on their end. If a change happens, when a change happens, so we actually go through sometimes two of these before we actually get to phase four on the execution. If you see this and there's round numbers, those are always going to be estimates. We never we can't estimate to the penny. And so we spend a lot of time we call this section ten at the bottom here, and this is all accessible on the website. I'm gonna put a an email together that gives a guide on where you can find all of these to look back after. Sure. No. You're good. We put we put a lot of content intent. So it almost becomes a narrative, and sometimes it'll be a look back at a prior version of the ITAVC that will say this changed. These numbers changed. But this will ask all of those things. Is there funding? Is there planning? And you'll find based on current statute, all of the things that are required end up being captured in here, is not a great system. It but it's what we have. Sorry. I know that the team puts a lot of time and effort into it, but we're at a point now where it has been changed so many times that we can't actually change it again unless we replace it. And so we've been working on very similar to that there is a project life cycle that EPMO has a step that has in place, and it's actually built on it's called PMBOK, but it's it's it's a it's an adopted well known model in the project management space. But we're now looking at what opportunity life cycle looks like because not everything turns into a project and not everything is Aetmo managed. So what you're seeing in the dashboard is everything that Stacy's team has hands in. If her hands are not in it, it is not on the dashboard. And sometimes it's things that are flying under the radar or it's things that, well, we didn't have the money for a PM or we didn't have the money for a VA and not necessarily should be an option in most cases. There should be somebody in that space, but it's it's where we've kind of identified some of the areas of risk that need to be addressed. And so if you go through this, it'll ask what all of the resource costs are, what are the technology costs are, where there is some [Denise Ramm Hughes]: level of operating costs. And then we went through a [Assistant Kate Slocum]: great exercise through EPMO because it touches every department agency, but specifically under contract, it's replacing systems in two departments in AOA. AOA, but but three systems, a system in Vidal and a system in the Agency of Transportation. And so operating costs end up being all of these various business offices too, and they can project what they believe that their future operating costs are gonna be, but it's a guess. It's there's no there's no formula or reality behind that other than what they know today. And so from a technical standpoint, formula that we use is based on the number of resources that are in place today, based on whether or not it's a platform based technology that we have existing resources for or if we have to bring in that skill set either through a partner or through internal staff, We have a methodology on this, the the ADS side that we can estimate that, which is I think why we've seen a lot more of that represented in this form than previously. But going forward, we are working much closer with the agencies in getting their costs represented in section ten, which is the narrative section, because we can't make changes to the form today. And I think once we go into a more enterprise system, we will see much more of that represented. The other piece is once we go into the Workday ERP system, we'll have greater visibility into costs, cost modeling, and cost, burn down outside of the ADS business office, which is right now the only one that we have access to. [Chair Kathleen James]: So I wanna I wanna switch gears if that's okay. But before we do so a a comment and a question for you guys. So, you know, I don't wanna let crossover deadline push policy. So push is not all good policy. So I'm just gonna say that. So my question for you is, do you think, in my mind, there are three paths we could take. You could agree with the bill as written, which I don't think is where you're coming from. You could say this bill could be really helpful for us, and we would provide this, this, and that suggested language. Or you could say we really oppose this bill. [Denise Ramm Hughes]: We don't think you need a [Chair Kathleen James]: bill, and we're committed to do x, y, and z. And I I see those three options with pass the bill exactly as it's written as perfect being unlikely to be a response. So the two options being, you know what? This is a decent bill. We've got some suggested language. We think it could be helpful. Here's how we would change it. Or we are opposed to this bill. We don't think you should pass it, but we commit to doing x, y, and z. It'd be I'd be curious to get your feedback on those two paths because we're gonna have to decide what [Assistant Kate Slocum]: we're doing with this bill. Madam chair, could I respectfully issue a fourth option? [Chair Kathleen James]: Yeah. [Assistant Kate Slocum]: Sure. There's an option [Chair Kathleen James]: I didn't think of. Sure. [Assistant Kate Slocum]: I think given that we are hitting our eight year mark as an agency and eight years since this was written, I think that being able to have changes to the statute and the a bill is important. I think we've had just a little bit of time to work together as a committee and as an agency. And my ask would be if the committee would consider holding the bill and working through this with us as we offer more information and issue it next session. [Chair Kathleen James]: So it actually raises a question in my mind I had about whether we had because we haven't, as a committee, even looked at the EDS statute. So there could be things in there, housekeeping type stuff that you would like to change or fix or update or modernize. So it's not so much next session as our response to option four could be, okay. Forget crossover. We don't have time to do self work by our house deadline. We could pass it out sometime before we adjourn in May, and we will have done our work, and it would then go to the senate for next year. So then the senate would take it up next year. In other words, so it's not like, you know, when we adjourn in May, it's not like the biennium ends. We could work on it if the committee decides to. We could work on it this year and get our work done in a way that we're satisfied with. And then the senate would hopefully obviously, we would be trying to convince the senate to then take it up next year. So that's a thought too. Okay. Lots of thoughts. Sounds like option four would be your preferred bet. [Assistant Kate Slocum]: I think that you may have possibly just described a path to option four that I just didn't know was an option, but I think that matches what I was suggesting. Okay. [Chair Kathleen James]: Great. Alrighty. So let's [Assistant Kate Slocum]: talk [Chair Kathleen James]: about your budget request. And we have representative Harrison here from a which is great. Gotcha. I will have a committee discussion about the bill at some point. We have a committee discussion on this bill's schedule for tomorrow at Thursday, tomorrow at one o'clock. Just [Assistant Kate Slocum]: FYI. Perfect. So Thank you. [Chair Kathleen James]: That's like our formal live on YouTube. Now we're gonna talk about everything we've heard. [Assistant Kate Slocum]: I would like to join if possible. Not not in the seat, but maybe over there. [Chair Kathleen James]: Right. It's it's on our agenda tomorrow at one o'clock. It's called committee discussion and markup. [Vice Chair R. Scott Campbell]: Perfect. Great. [Chair Kathleen James]: Alright. The budget. Now the budget, we have to do something on. So just so you understand our role here, so we're the policy committee that has jurisdictional scope over ADS. And so when when you have an important budget request, appropriations is the committee that actually makes the decision, but they do want to hear from us on our thoughts. So we need to understand what you're requesting, and we'll we'll write a letter on committee letterhead, the whole nine yards, and we will vote on it. And we'll send it to a Probes as our official recommendation. So we need to inform ourselves so that we can make a thoughtful recommendation to our colleagues on Probes. So that's the that's the purpose. Okay. [Assistant Kate Slocum]: I am listening for just a visual for you to see. So our you can speak to the recovery methods, but I think that we we say often that ADS is a chargeback agency. So everything that we are doing minus eight percent of the activities coming through our business office are chargeback. And so we have two top level recovery models, methods, categories, methodologies. Sorry. [Chair Kathleen James]: You said eight percent. Sorry. It's just a [Assistant Kate Slocum]: little high. Two percent of the work that we do is charged back to the agency's departments. [Representative Laura Sibilia]: And eight percent is a standard overhead rate something? [Speaker 6 ]: No. Actually, eight percent represents some general fund and special fund that we've received that's specific for our GIS team. Something. Mhmm. That's not it's spread. That's correct. [Stacy Gibson]: Thank you. So [Assistant Kate Slocum]: I wanted to show a visual so that you could at least see as we if we come into the ask. I might need you to send that to me. Actually, I can pull up. Very sorry. I had everything set up before, and then I closed my computer down to come over here. The so the two category categories are allocation or allocation and the other one is demand. We spend most of our time talking about demand. So allocation has been consistently roughly around eleven million dollars since FY seventeen. [Speaker 6 ]: FY twenty. I think FY twenty. [Assistant Kate Slocum]: And it doesn't cover anything specifically. I'm sorry. Are you sure you Not me. No. Oh, okay. I don't wanna see you watching me navigate through Okay. Things. [Chair Kathleen James]: Sounds good. I just wanna make sure. Alright. So allocation [Representative Bram Kleppner]: define those two terms. One [Speaker 6 ]: Yeah. So the ADS allocation, in the past has supported things things that everyone in state government utilizes. So that can be items like the network, more cybersecurity, procurement activities in the IT space. There's a long list that we have. But they basically are services that are critical to, carrying out an IT organization. The other side of our budget, which secretary Riley used to refer to as demand, is, the needs of specific agencies. So the consumption of licensing or, the consumption of project managers. We have a variety of chargebacks under the demand. One is the SLA, and that's [Representative Bram Kleppner]: Which stands for? [Speaker 6 ]: Service level agreement. Service level agreement. But I'll just be honest. It doesn't really it's a it's a poor name. What it really is is our recovery methodology for the enterprise tools that access sorts of things like Microsoft, the Microsoft product, the case management product that we utilize, Adobe Acrobat. All of that falls into, the SLA and we charge it back based on consumption. Then we have our timesheet rate, which is for IT services. Could be project manager, could be a business analyst, could be an enterprise architect. It's basically a resource that we apply to a specific project if need or a customer. Then we have telephony, which is exactly what you expect it to be, it's telephone services. And the final one is bespoke. And so that's where agents that comes forward to us and says that they need a specific product, something that's not enterprise. One that comes to mind is Dragon Naturally Speaking, which is a tool that's that assists staff with visualization of [Assistant Kate Slocum]: or it's an application that's exclusive to that department and that agency. Yeah. So the case management system, if it was not IT modernization from from this for AG's office, it would go under Balspider. Right. And so this is the visual here. So the theory is that allocation should support the foundations. When you actually start digging into the details, it does not. It is a color peanut butter. So it just kinda spreads a nice thin layer over everything and drives the SLA cost down slightly for everybody. And there could be the same service, same products, same everything that we charge back to one agency under SLA and one agency under Time Sheet Billing. And so when I came here, it's taken Kate almost two years to have me really dig in with her on why do we do it this way. This doesn't make any sense. We've had a lot of feedback that our modeling doesn't make sense, and you have hear a lot of, frustrations from our partner agencies to say, I didn't even know that it was gonna cost us. Why am I being charged this? So the important thing here is SLA specifically is a credit card, which is why you're seeing the credit card represented. It is a credit card that does not actually have a managed limit. That's a bad model for government. So we would like to actually start the fifteen million dollar transfer is basically a buy down of SLA because that is also as you get your credit card bills, it is for all your purchases in arrears and you have to pay it within thirty days in advance. And so SLA is a year in arrears. So Okay. Everything that the agencies and departments are consuming in foundational IT services this fiscal year, we will charge them for next fiscal year along with everything else. And so it is a model where we're always playing catch up and it's driving us into a deficit. What we've come up with is truly using allocation for IT foundations. What as a department and agency, you and a user, you can expect to come in the door and have access to without any nonnegotiables. Right? You expect a certain level of security. You expect to have an email address. You expect to have identity. You expect to go into any business any building in state government and be able to access the state network. We've been challenged in rolling out certain technologies because of limitations in our chargeback model. We haven't done things because of the chargeback model. What we would like to do is we'd like to pull all of the foundations of IT services out of a negotiation and move it into a standard set model and set rate under what what what would essentially replace allocation. And so if I can just give you a visual. Yep. [Speaker 9 ]: So I wanted to go back to the model driving you towards deficit spending. Is that the current where we are? [Assistant Kate Slocum]: Yeah. That and time sheet billing, our hourly rates are eighty eight and eighty four dollars an hour. And if you look on average based on the classification positions or the classified positions that would have a rate charged to them, they realistically can't bill more than sixty percent of their time. There's no such thing as a hundred percent bill back time. And so now you calculate salary plus benefits in that rate. I would have to pay folks on my staff under sixty thousand dollars a year to do the work that they're doing to in order to do a full recovery. So the time sheet model is also driving us in. So SLA and timesheet are really the two big ones. So we're gonna tackle SLA this year Mhmm. And we're gonna tackle timesheet billing next year. But there's a way that we can actually reduce that impact of time sheet billing in what we're asking for on the fifteen million, and I'll talk through that. [Speaker 9 ]: So I have a bit of a civics question here, which is, you know, how are you empowered to deficit spend? And so and what happens if what happens if those funds are not included in the administration's budget next year? And I don't know if that's a question for you or budget. This one. So [Assistant Kate Slocum]: This play you [Speaker 6 ]: this play you right here. So we're allowed to deficit fund spend because we are we operate under an internal service fund. So, basically, when we're granted spending authority, it is just spending authority. There is not a dollar that supports that spending authority like you would see with general fund dollars or with permit fees. It is an allowance to spend up to a certain amount. And then it's our job to repay that allowance. But because our rates are not where they need to be, we will never catch up in the model we're in. [Speaker 9 ]: What is the amount that you're allowed [Stacy Gibson]: to spend with with that? [Speaker 6 ]: It it fluctuates year to year. It's it so with this year, we're asking for a hundred and thirty eight million dollars in internal service funds allowance. [Stacy Gibson]: And who you would ask for that and who [Speaker 6 ]: We go to the pro house appropriations. And you [Speaker 9 ]: ask them for under thirty nine internal service funds. So the ability Okay. Yeah. [Assistant Kate Slocum]: And what you're just what you're describing, it's not it is not an issue with appropriations. It's not an issue with the ask. What it is, it's it's the issue with how we apply the recovery model, and we need to fix that. We need to start applying a recovery model to actuals and to actuals and to services that are foundational to IT support and then start looking at the demand after we are releveled under the right model, the right foundations. [Speaker 9 ]: So if I might Mhmm. Is it okay? I I wanna just make sure I understand. So the hundred and thirty eight million in turn so you're asking appropriations for that Mhmm. For next year [Assistant Kate Slocum]: Mhmm. Yes. [Speaker 9 ]: Which is the charge which is the costs that are being incurred this year. [Assistant Kate Slocum]: Some of it. So It's max. If you look at the blue, the hundred and twenty four is demand. The thirteen is allocation. So we just crossed over the threshold into thirteen million per allocation. Wait. And the hundred and twenty four thousand is the demand portion. The allocation, which is that eight percent, it was previously been eight percent. That is the allocation piece. We're requesting a switch, and the fifteen million dollar transfer is gonna do that. So as you can see, that demand spend oh, I think that you're looking at it this way, is out of control. It's going up and up and up and up and there's no guardrails behind it. We want to put some guardrails in place. We would actually like to start driving down the demand spend and start building some parameters around no, And we just don't have that today because of the way that the funding model is built. And so what we're proposing is this fifteen million dollars allows us to launch into core enterprise services. So as I was talking about those nonnegotiable services out of the gate, we've modeled this based on, the roles that we have within ADF. So we're not asking for more roles. We are not asking to reduce the roles either, but we're asking to change how those roles are funded, how we recover for them, and the work that they're doing so that we can actually start driving to consistent delivery. So this is network, The base productivity tools that everybody has when they come in the door, the same tools that you as legislators have when you come in the door, that should be it is across the board, but the recovery model varies by agency or department, and it shouldn't. It should be the same. And so if we move it under foundational services, core and direct services, we can do that. Same with secure identity. [Chair Kathleen James]: We're capable and then we're to [Assistant Kate Slocum]: be able [Vice Chair R. Scott Campbell]: I just wanna get in line. I don't wanna interrupt you. So can can we just call here, please? [Assistant Kate Slocum]: I mean, I can I can read through it, but it it basically, we have been able to pull all prior expenditures over the last few fiscal years to try to pull the actual data and numbers behind the spend where the variances are, limit it to what we would consider foundational services? [Vice Chair R. Scott Campbell]: Yep. [Assistant Kate Slocum]: And then anything above that is what would end up getting still charged back in SLA. So let's say the our our security operation center. So nonnegotiable, everybody is in there no matter what. Well, some departments and agencies are paying for it and some aren't. We have to fix that. We need to level the playing field for everybody so that we can have some digital equity across the board. The same would be for there's actually a component of utmost support built in. So that problem that we were just describing where we have to incur cost in the discovery phase of a project or the I think I want to do something, we charge an agency. We've actually baked something in here so that we can have a conversation without having to charge an hourly rate to them Yeah. Which Okay. Which makes it equitable for everybody. [Vice Chair R. Scott Campbell]: So let let let me see if I can put this really in layperson's terms. The hundred and thirty eight million dollars include, I forget the number, thirteen million dollars appropriation. Correct. And the balance of that, the hundred and twenty four, is just a number that appears in in the big bill. This maybe is also it would be involves representing Harrison's thoughts, but it's not it's not it's not an appropriation. It's not it's not money that is is being closed, not necessarily allocated for anything. It's just the number. Right? [Speaker 6 ]: It's yeah. If I mean, I would refer to [Assistant Kate Slocum]: it limit what you use it for. [Speaker 6 ]: Yeah. I would refer to it as it's spending authority for Spending authority. Specific services. Yes. Okay. [Assistant Kate Slocum]: But it's not covering the full cost of those services. [Vice Chair R. Scott Campbell]: And and and it's not going to pull up to the services, and it it it appears in the appropriation for all the other agencies to go and work for it. Right. So it's just it's kind of an estimated number, it sounds like. You're proposing to to shift to a to a a a a different model that would actually have an appropriation to cover these basic services for all executive departments, that then would not appear in the department's budgets. It would instead appear on TDF budget. Is that correct? [Speaker 6 ]: It would still because we're we are internal service funded. It still appear in the agency's budgets, but it'd be uniform across the board. Correct. Okay. Meaning that these services that we've shown here will cost the same and be recovered the same at AHS as they are as they would be at Vidal or AR. [Vice Chair R. Scott Campbell]: So how does how does the how does the legislature have any I don't know. I guess it's maybe too strong over, but any any input into into what those costs are. [Speaker 6 ]: The life cycle would still have input into it because we have to come forward and request that amount of money annually. It's what we do under our allocation that what color was it? Was it sorry. The green? Green. Yeah. It we still are requesting that amount of money in our budget, and we would do the same in future years to come forward and say, we need thirty million in this line item, and it's going to cover the war essentials. And we could have a conversation as to what, you know [Vice Chair R. Scott Campbell]: Would that be an appropriation then? Mhmm. That would be an appropriation. Yeah. So that would cover the basic services for the other departments that then would not appear in their budget. [Speaker 6 ]: Well, it's it's it's an internal service fund. So it's it's an appropriation to us, but it's an appropriation as a spending authority. It's not an actual, like, general fund appropriation. [Vice Chair R. Scott Campbell]: K. Now I I told her [Assistant Kate Slocum]: This is why I bring the CFO because she uses language that I I'm still Yeah. Working through. What what what is the [Vice Chair R. Scott Campbell]: that'd be different than that was come up here in the [Assistant Kate Slocum]: So it will, but this is why I do a projection. So this is f y twenty five. [Vice Chair R. Scott Campbell]: Yep. So [Assistant Kate Slocum]: what we're in now, what we're asking for in twenty six, and what we expect to be coming to talk to you about in twenty seven. So now everything in yellow, I can actually now tell you exactly what services are covered under that, who gets them, and what the cost of each top level service cost would be from a operations and licensing standpoint and a technology. So I can't do that today. [Vice Chair R. Scott Campbell]: This is sort of another category that I mean, it's it's it might appear in the [Assistant Kate Slocum]: It is maturing the allocation model to be to be what it should be around foundational IT services. [Vice Chair R. Scott Campbell]: Yeah. Okay. So it would appear in the other parts budgets, but maybe it's separated out from specific projects that they want you to do, like Correct. Revamp their entire It would be [Assistant Kate Slocum]: Yeah. They're anything that they want plus Yeah. Anything above quarter price services, that's in the blue still. So now that that also gives us a window to really start looking in detail around the blue Yes. And start driving the spending down in that. Because if they're already paying for it in core services that are outlined and have a a service level agreement to it that has a particular performance, it has a supportability to it for everybody, then now we have an opportunity to say, no. We don't think that you should spend that. But right now, it becomes a high transaction based model that we're in today that we've gotta pull the reins in on and stop transacting and start actually servicing. Okay. Yeah. [Vice Chair R. Scott Campbell]: That that's that's sounds good. I do try to understand. Thank you. [Chair Kathleen James]: So I'm sorry. We have a line. So Right. We have representative Southworth, representative Sebelia, representative Morrow, and representative Tory. So who's first here? Are you following up on Yeah. My This? Okay. So rep Sebelia then Southworth. [Speaker 9 ]: It's leaving my head now. Sorry. The it yes. So because we are we're backward spending, basically. In in in a big portion of the pandemic. Yeah. Let's say that there was some event or series of events that happened that, you know, for instance, like, maybe, like, a lot of federal funding, like, was no longer coming to the state for a bunch of different agencies and departments. So how does that how does that work? [Assistant Kate Slocum]: So are you saying if we were to no longer have that and we would have to be able to if we no longer have the federal funding available? [Speaker 9 ]: No. Like all so if all of the budget of all of the agencies are, you know, scrambling because they've lost, you know, some poor funding or or many of the agencies And we are backwards spending, and we need to continue to provide. It's like, where's the money coming from to make sure that you all are [Speaker 6 ]: It would put us in a very, very challenging phase. Well, I [Speaker 9 ]: think that would be the collective us. [Assistant Kate Slocum]: Yeah. I know. Yeah. I thought the collective part of why we're trying to build this model because it's long overdue, because that now allows us to focus on what would be the future demand, which from a core services standpoint so now you know why my hair is gray now and it wasn't what, two years ago. Core spending from a core services, we can know exactly how many users we have, what the service is, if we would need to downgrade a service or not downgrade a service, what that would look like. We can build that into our contracting model today, which we don't have the ability to do if everybody's doing something different. But then on the blue side, that would be where we would target for, then we need to turn off spending there. And right now, if everything's blue, it's like throwing darts at the wall. Well, what do you stop doing? Because what you stop doing is you stop doing the things that one agency can't pay for anymore, but one agency can. So that agency that does have the money that can spend it gets all the services, and the ones that don't have that service, their services stop operating. We we can't operate in that model. We need to be able to have some equity around those foundational services. And these aren't like we're not overreaching to say, you know, we think that you should have this up here. We actually are really trying to create a conservative base on. [Speaker 9 ]: But but but what if that happens? What's gonna happen? We what what is gonna happen? So in today's model For you all. Like, so say the the federal government, you know, pulls back bunch of funding or stops funding this year. So how what will we do? [Speaker 6 ]: So what that would look like for our receivables, they would remain pending, and we'd be coming to you in BAA to say, we aren't solvent. We've spent millions of dollars for these products that agencies can't pay for because federal funds have dried up, and we need general funds to cover a bill. [Speaker 9 ]: So it would seem to me that, [Assistant Kate Slocum]: wow. This is Wow. This is why we're trying to [Speaker 9 ]: It would seem to me that we should have reserves for ADS. [Assistant Kate Slocum]: I think we have to cut the credit card up first or maybe at least put a limit on the credit card because it doesn't have [Speaker 9 ]: a limit on it today. And so, secretary Riley Hughes, what is the administration's, current thinking around, this potential situation occurring this year? And have you just outlined it in saying that you'll come to us and say your installment? Are you making any contingency plans? [Assistant Kate Slocum]: No. We're I'm we're working very close with my peers at cabinet, and we're tracking everything. As of now, there have been no changes made. They are tracking, tracing every change. From a technical standpoint, what we're doing is we're identifying where we are sending, receiving, spending, and funding in the technology space in those areas so that we can at least get an inventory of what what is in place today so that we if we need to shift, we would have the ability to do so together. But it also gives us the chance to to turn it off if needed. Mhmm. So we're we're putting a lot of time out right now on that. So this is also Okay. We wanna be careful not to react. Yes. We wanna be able to just And so service for honors. [Speaker 9 ]: What is your plan for keeping the Appropriations Committee and this committee apprised of your planning? [Assistant Kate Slocum]: Every change that we are committed to, you will know from me first how I've I'll reach out to the chair and request a meeting. Thank you, [Vice Chair R. Scott Campbell]: miss Chen. [Chair Kathleen James]: Yep. I do know I I mean, I do know as well that both the governor and treasurer PeeCheck have active testing Mhmm. Or SAI that are monitoring the possible change and loss of federal funds. So eyes on I know there are a lot of eyes on. Yeah. So okay. We're gonna go representative Southworth, and then I take Tory and then Morrow. I think that was the order I I saw. [Vice Chair R. Scott Campbell]: Will the budget spending proposal that you're putting forth, will that do away with the deficit spending and bring you to a current use billing model? [Assistant Kate Slocum]: That is what the plan is. And it is a multifiscally year plan, but, yes, we want to move out of desk deficit spending, especially around core services. So there [Vice Chair R. Scott Campbell]: won't be any more deficit spending. [Speaker 6 ]: That and what we can move forward with core enterprise services, [Vice Chair R. Scott Campbell]: we will avoid going into a capstone. [Assistant Kate Slocum]: We've been working very close with commissioner Gresham and deputy commissioner Harvey Merrill on this. So they're they're they're with us each step along the way. And after we leave here, we're actually gonna go meet with the joint fiscal office to go through more of the technical details around the dollars. [Vice Chair R. Scott Campbell]: Thank you. [Assistant Kate Slocum]: Representative Kory, can I help you? So I'm just thinking back to the VAA, and there were a lot of really big changes. Is this work going to make that type of thing less likely? Yes. That is that's the anticipation. [Vice Chair R. Scott Campbell]: Okay. [Assistant Kate Slocum]: This this model brings a lot more clarity to foundational services. It also brings a lot more opportunity for discussion and detail into Beyond Foundation Services, which we don't have today because we're treating it all the same. [Chair Kathleen James]: Representative Murrow? [Representative Bram Kleppner]: Two questions. One, what was driving the big demand increases? Is that just catch up with state budget, state IT. [Speaker 6 ]: So if we go back [Assistant Kate Slocum]: I don't have the contract slide. So with the [Speaker 6 ]: Go back to here. Right. So the jump that you see in twenty two to twenty three, a lot of that had to do with the the, IT projects that were coming on board. There were a number of items that were funded through ARPA dollars. And so for those resources, we had to [Vice Chair R. Scott Campbell]: we [Speaker 6 ]: had to bear the cost and then recoup the cost to the agencies. So that's why you saw that jump from eighty four million to a hundred and seventeen. And then from seventeen to from one seventeen to one hundred and thirty nine million was the addition of the IT mod projects, IT modernization projects. So those were the the big growth areas in our budget, and the demand side was really around projects. Not to say that there wasn't more demand, truth and spoke, but not to [Assistant Kate Slocum]: the magnitude. That's There was another increase as well. So in twenty twenty, twenty, there were still it it doesn't come through our business office, Keith Bain, chief financial officer. If it's not coming through our business office, we don't have visibility to it. And so with contracts, if an agency had entered into a contract in twenty fifteen and it didn't actually expire until twenty twenty three, we would not be able to see that in our budget request or in any of the the the work that we're doing. As we start seeing those contracts expire, we're now having greater visibility into those because now we're taking them on in our business office. And so that's also another reason for that trajectory. But what we didn't do is those contracts all of a sudden come up and you have a fifteen day decision to say, do I sign it or not? Well, we're using it. And if we're using it, what does it take to unplug it? So we have given a couple of these a one renewal window to say you have a year to move off of this, and that should also decrease the spending. But the visibility into the actual tech spend that's happening outside of ADS, they're pulling the reins in on. [Representative Bram Kleppner]: Well, that's a good segue into my second question, which is in the budget. I saw the tax department had an IT fund for several million dollars. Do you touch how does what's the relationship between the IT fund and the tax fund and the services they're under? [Assistant Kate Slocum]: Those are a those are very similar to the IT mod fund. It's another internal service fund, and that is something that's been in place for a while. So that is paying for the eTax system that is supported by our staff. So what what we will see is the the invoicing for staff time to support that system, but the contract for the technology and the support that the technology vendor provides all goes through the tax business office. So that's a good example of what I just described. [Representative Bram Kleppner]: And I guess we'll get into this later in the week. But, theoretically, having one IT fund, does that make sense or at least okay. Let's delay that conversation. That's a whole [Chair Kathleen James]: another thing. Coming up. That's a whole another thing. Yeah. And it's a big thing. [Vice Chair R. Scott Campbell]: So I just have one comment on the other chart that you have with the yellow. It it's it strikes me that really what we what we need is another row here, I guess, that that's in yellow that shows the four services that you're providing to the other departments. Because the green is still important because that's the appropriation part. Right? [Assistant Kate Slocum]: So the green becomes the yellow, and the yellow can be broken down the after yeah. After by twenty seven, so you'll know what those services are. [Vice Chair R. Scott Campbell]: But part of that is is an actual appropriation, and part of it is in a trouble service fund? [Assistant Kate Slocum]: They would be broken out, though. They would be broken out the same. [Vice Chair R. Scott Campbell]: Yeah. So, anyway, just for clarification, I think that's what we're talking about. Right? [Assistant Kate Slocum]: Right. And and so for core services, instead of us showing a, I don't know what you see showing your crosswalk, but, it would be called out specifically on the budget request. So we would know exactly what those core services are, but we'd also be able to track what the increase are. So if there is an industry, we're seeing some industry inflation rates anywhere from five percent to fifteen percent year over year. We've got to start pulling those back a little bit to decide, is it really worth sticking with this? Correct. And so that's where but but looking at a growing number like that in the blue, we don't have the means to be able to drive management around that today. Yep. And so the number just keeps on growing and growing, and this this is an opportunity to actually put a stop to it. [Vice Chair R. Scott Campbell]: Totally agree. Love it. Mhmm. Carry on. I I do. I just think that, you know, making it clear about what's the deprecation, which is the chart package. You know? Yeah. And stuff. Just thank you. [Chair Kathleen James]: Representative Harrison. [Jack Locker]: Representative Jim Harrison from the galley. Hillary, just to it it would be helpful if you could share why fifteen million. What's the breakdown of that? And what happens if it's ten million, or what happens if it's twenty million? If you could help I mean, I look at the the chart and the increase in the yellow and understand what you're trying to do, But that's not fifteen million either. That's almost thirty million or twenty nine million, and that's one year. So if you could help us understand that, that would be Yes. [Vice Chair R. Scott Campbell]: But I'm [Assistant Kate Slocum]: gonna take a stab at it because she's gonna go into finance talk, and then I'm gonna get lost. So the reason being is we expect that it's actually more, but we want to be conservative with it because those services should already be asked for as part of the agency's budget in twenty six. What the fifteen does is it re levels it so that they're not getting two invoices at the same time, that we're not invoicing them for their SLA that they incur in twenty five. They don't put their bill in twenty six for that and their bill in twenty six for the new model. We don't want to do that. So the fifteen million is a buy down of SLA, which is current fiscal year consumption of services that they would anticipate seeing in their bill in twenty seven. So it's basically blocking the deficit spending. And within twenty seven, what we expect to do is before the agencies start planning for their budget, we will re level them all so that they're not asking for time sheet billing amounts in their spend, that they aren't asking for SLA amounts in their spend if they're tied to core services. And so we anticipate that it will level in twenty seven with that second phase of the cut over into this model. I know it's taken us eighteen months to work through the details of these numbers. And while it's not an exact science, we've had quite a bit of visibility into what the other business offices are doing and asking for that we just don't have previously. And so you probably have a more technical finance explanation for that, but I anticipate that it could be around seventeen. It could be it it could be different. The reason why we only wanna ask for fifteen right now is because a good example is agency a. We are charging them timesheet billing for the same thing that we're charging agency b for SLA. And so we gotta start leveling the playing field and charging everybody the same way for the same thing, and so that fifteen does a SLA buy down. [Jack Locker]: Pat, could you also share what the deficit is in the fund that you're drawing on, which you charge to the various departments? [Speaker 6 ]: So for this year, our deficit has grown to twelve million dollars. [Jack Locker]: And does any of the fifteen million go towards came down that month? [Speaker 6 ]: No. This fifteen million will be used to prevent further deficit growth. [Assistant Kate Slocum]: And correct me if I'm wrong, that that is because we don't have a recovery model to charge for the expenditures that were incurred [Speaker 6 ]: Correct. [Assistant Kate Slocum]: In the prior fiscal year. Right. [Vice Chair R. Scott Campbell]: So if I have attended that, the fifteen million dollars is is being used to provide our core services for FY Party six because agencies have already made their budgets for FY twenty six. Thanks. And then in FY twenty seven, they look as you said, they will be getting instructions to what you're doing for for for core service. What separating out core services from Correct. From Correct. I guess demand. Yeah. You know, particular projects particular to that to that as a departure. Yes. So that's what the fifty million dollars does. Yeah. And, Rose, for my yeah. I I know what we've talked about. Just be reminded where that fifty million dollars is coming from again. [Speaker 6 ]: The fifty two million? Yeah. [Vice Chair R. Scott Campbell]: The transfer. [Speaker 6 ]: It's a transfer of general fund. [Vice Chair R. Scott Campbell]: It's a transfer of general fund. Okay. Cool. Does that make sense? I'm listening to it a couple more times. [Assistant Kate Slocum]: And and the hope the hope is that this again, I I hear it often that, one, it's confusing. We don't know what we're paying for. The numbers keep going up. There's a lot of friction and frustration. This is supposed to bring further clarity. Yep. It has very specific guidelines around what it's supposed to be covering, and it's at a service level and supportability level that everybody's getting. Yep. Okay. It's a good call. [Vice Chair R. Scott Campbell]: I won't say that I understand that just this takes between SLA, but, like, in time sheet failure. I don't think I have to. So [Assistant Kate Slocum]: Right. Be friendly. You'd like to reduce it, if not. That's really the big takeaway. Yep. [Chair Kathleen James]: Excuse us. I'm sorry. We had a side conversation. I'm sorry about that. So I'm just looking at the our schedule. We have okay. So so we do have a real deadline, which is that our committee memo is due to a probate by the twenty sixth. [Assistant Kate Slocum]: Okay. [Chair Kathleen James]: And that is confirmed, And we'd like to get in a little bit early, and I think representative Sebelius still has some questions. So I'm wondering. We had today's Wednesday. Right? Okay. So we have a committee discussion scheduled this afternoon at two o'clock on the governor's budget, probably for about forty five minutes. I had optimistically hoped that then then we'd write our memo, but I I think that's optimistic. So, I'm wondering if you would be able to rejoin us if we move our agenda around a little bit and maybe find a time when you could come back and join our committee discussion on the budget memo? [Assistant Kate Slocum]: What would you I think that Jack would write to you. Okay. [Chair Kathleen James]: And we could find a time. But [Assistant Kate Slocum]: I wasn't sure if I needed to clear my afternoon. [Chair Kathleen James]: Oh, I mean, if you're free. We are gonna be talking about it at two o'clock. If I Okay. I realize that's probably not doable. [Assistant Kate Slocum]: I will make it work. Yeah. We can make it work. This is important to us. [Chair Kathleen James]: Thoughts on that? [Speaker 9 ]: Just for committee members who are new Yes. Thank you. The memo that we send to appropriations from this committee, [Denise Ramm Hughes]: it may it will include our [Speaker 9 ]: thoughts about the governor's proposed budget, but it also could be it is a place for us to say, hey. We wanna highlight something for you here to think about, that we think that we're worried about or not, [Stacy Gibson]: or it could be, you [Speaker 9 ]: know, hey. Let's go. You know, whatever. But it's a place for us to also Comment. Comment. [Chair Kathleen James]: And it's also nonbinding. I guess it's important for all of us to know that. Yes. It's our opinion. Mhmm. They will go to a props, and they will consider our opinion. So [Jack Locker]: But we value your [Chair Kathleen James]: Our opinion is valued. So there are two two things we could do, and I know we have our next witnesses here. We could invite you back at two o'clock. We will be discussing this at two o'clock. You're welcome to join us unless that's terribly disruptive. We could also we could do some rescheduling on our end. For example, tomorrow at one o'clock, we're talking about your bill. We could move that, or we could have you come back on Friday. [Assistant Kate Slocum]: I would like to join the committee at [Chair Kathleen James]: two o'clock today. Great. Thank you. Well, we you know where to find us. That's So, great. So let's we could take a five minute break. Let's go off live, Jack. Thank you so much, all of you.

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