Staff recommends that the Information Technology Department proposed budget for FY21 be approved by the Council as part of the overall FY21 budget approval process for the City.

The Information Technology Department is focused on bringing people and technology together to meet the needs of the organization and the citizens of Billings. In pursuit of its goal, ITD provides technology-related strategic planning, project management, integration, technology procurement, E-mail, networking, communications, application development, GIS, mapping, overall hardware and software support, vendor relations, and training services.
 
The Information Technology Budget is $ 2,702,706 which is $ 30,415 or 1.1% more than last year’s budget.  The FY21 budget is impacted by security related network and software enhancements required by the Montana Department of Justice and the Federal Government. 
 
In FY21, the IT budget has an increase of $ 55,392 in Personnel costs which includes the approved COLA and step increases.  Operating expenses have increased by $ 127,893 caused by an increase in the Parking ($ 4,581), Cost Allocation charges ($9,304), Property Insurance ($2,544), and New Requests ($ 124,076 – see details below).  Capital expenses for FY21 are $ 0 which is $ 153,500 less than last year.
 
Information Technology is an internal support function with revenues of $ 2,610,274 generated primarily by charges for service to internal City Departments.  In addition, IT provides application hosting services and support to the Yellowstone County (YC) Sheriff’s Dept for Public Safety Software used by their officers, support staff, and YC Jail.  FY21 charges to YC Sheriff’s Dept are $ 131,181 and are included in our overall revenues.
 
FY21 Total Revenues for IT are below Expenses by approx $ 93,000.  Due to the unknown financial impact that COVID-19 will have on future revenue for City Departments, IT proposes to use $63,000 in reserves to purchase Montana Dept of Justice required security upgrades and an additional $ 30,000 to lower our overall departmental charges for the upcoming budget year.
 
The Central Telephone Budget is $501,543 which is $296,926 less than last year’s budget.  The FY20 budget included a one-time large capital expense of $400,000 which inflated the annual expenses.
 
In FY21, the budget has an increase of $35,107 in Personnel costs which includes the approved COLA.  A majority of the increased Personnel costs are the result of an adjustment in the existing salary cost sharing between the IT Budget and the Central Telephone Budget for the IT Director, IT Administrative Support, and the IT Security Engineer positions.  These adjustments are made periodically to align budgets with changes in work loads and responsibilities. Operating expenses are $2,033 less and Capital expenses are $330,000 less in FY21.
 
Under the direction of the Information Technology Director, the Telecommunications Manager and the IT Administrative Secretary provide telephone, voice mail, auto attendants, call accounting, communications related procurement, cell phone, infrastructure support, and related financial accounting services for 12 remote sites, 538 landline phones, 57 Centrex phone lines, and 353 Smartphones/cell phones/Push-to-Talk radio/phones.
 
The Central Telephone Service (fund 6060) is an internal support function with revenues of $439,952 derived predominately from phone services.  Revenues for FY21 are $439,952 which represents a 0.3% increase ($1,271) over FY20.  Revenues are lower than Expenses in FY21 due to the allocation of reserve funds to install a fiber backbone from City Hall to the Billings Logan International Airport.
 
The Central Telephone Budget includes a request for a $70,000 capital budget amount to fund the installation of a fiber backbone from City Hall to the Billings Logan International Airport.  The funding for this project will come from reserves and be repaid by the Airport in increased annual charge for services.  The fiber will be installed along 27^th Street in fiber conduit available through a Memorandum of Agreement signed in November of 2019 with the Montana Department of Transportation.
 
Staffing:  There are no staffing level changes requested in the IT or Central Telephone FY21 budget.
 
Challenges:  Our biggest challenge has easily become Cyber Security.  Maintaining our Security Roadmap, implementing new security related policies and solutions, and ensuring we comply with all Montana Dept of Justice security requirements consumes a great deal of our time and resources.

Please see the attached Budget Narratives for more detail.

No specific action will be required at this time.

Addressed in Budget Narratives and during the presentation.