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HomeMy WebLinkAboutCOM 0206.001 1998-2000Stephen K. Yamashiro i"" -`- Mayor r r' 1 DEPARTMENT OF FINANCE—l`REAL PROPERTY TAX 865 Piilani Strmt • Hilo, Hawaii 96720.4679 • Fut (608) 961-8415 February 5, 1999 Appraisers (908) 961.8354 - Cleriml (808) %1-8201 • Collctiom BOB) 961.8282 To: S. Kalani Schutte, Deputy Finance Director From: Mike McCall, Valuation Analyst/ Re: Estimated Computer Costs Harry A. Takahashi Director S.K. Schutte DVUty Currently the Real Property Tax Division pays the City and County of Honolulu approximately $2;- OOMeach year for the computer services used in the assessment and billing for all parcels in Th' County. This amount is due to increase for two reasons. First the City and County's appraisal section is planning to convert to a new appraisal system within the next year, and most likely convert the assessment system within two years. I do not know if they will be converting the billing and collection system in the near future. Secondly, the counties of Maui and Kauai are also looking at leaving the current system with the City and County. With either or both of these occurring, the annual costs to the County will increase as our share of the Data System's costs increase. My best estimate is that we can be looking at an increase of-$50000.to:$1r50;000'.�vithin �2-years.. We also pay licensing and maintenance fees of 30;0000TI year to Cole -Layer Trumble (CLT) for the appraisal software. The City & County pays about $160,000, and the other counties about $30,000 total. With the City & County changing, we can expect our cost to increase to at least $60,000 a year, and even higher if everyone else changed. We have already received an estimate to set up our own PC-based system. This estimate was an unsolicited act of CLT. Their estimate totaled''76¢ 0001ver the 2 year conversion period. We would also have to purchase additional computer hardware, and up -grade some of our existing hardware and software. The total cost of these enhancements should not exceed` -$240 000 So my estimate is that for $1,;000;0.0.0he County would be able to completely break -away from the City & County within a 2 yeare period. Since my estimate of our cost per year will increase to about $370,000 per year in two years, we can expect to break-even within approximately 3 years. This calculation is based on the assumption that we started now. Below shows the estimated cost per year. 1999/2000 $ 280,000 2000/2001 310,000 2001/2002 370,000 Total $ 960,000 2002/2003 370,000 (if needed) Total $ 1,330,000 Comm No. 2— Oro. 00( File No. FNP7M7 Ref. To: FC Ref. Date MAR 2 3 l Basis for Computer Cost Estimates: These assumptions are based on only the City & County of Honolulu changing their appraisal system at the current time. If they change their assessment administration and collection systems, the added costs to the other counties will be extremely high. 1999/2000: $30,000 increase due to normal increases and the start of the City & County's (C&C) conversion to a new appraisal system. The conversion to start near the end of the fiscal year. 2000/2001: $60,000 increase due to the 1999/2000 increase plus an additional $30,000 we must pay to Cole-Layer-Tnrmble (CLT) as the C&C converts their appraisal system. I estimate that they will pay $100,000 and the remaining $60,000 allocated to the other counties on the same 50%, 25%, & 25% currently in use. 2001/2002: $120,000 increase due to the 1999/2000 increase plus an additional $90,000 from our share of the amount payable to CLT. This is assuming that the C&C will still be paying $40,000 of the total of $220,000, or the total is reduced to $180,000 when the C&C pulls out. 2002/2003: No change from 2001/2002 2003/2004: Add an additional $25,000 as normal cost increases.