HomeMy WebLinkAboutKIN 84 4597 Agre-Mun.Affair/Hse
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THE CORPORATION OF THE TOWN OF KINCARDINE
BY-LAW NO. 4597
A BY-LAW TO AUTHORIZE THE EXECUTION OF AN AGREEMENT WITH THE
MINISTER OF MUNICIPAL AFFAIRS AND HOUSING FOR THE PROVINCE OF
ONTARIO AND THE TOWN OF KINCARDINE.
THEREFORE the Council of the Town of Kincardine ENACTS as follows:
1. THAT the Head of Council and the Clerk be and they are
hereby authorized to execute an Agreement on behalf of
the Corporation of the Town of Kincardine with the Minister
of Municipal Affairs and Housing for the Province of Ontario
upon the terms substantially the same as are contained in
the Agreement forming Schedule "A" to this By-law, and to
affix the seal of the Corporation to such Agreement.
READ a FIRST and SECOND time this 5th day of April
, 1984.
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READ a THIRD time and FINALLY PASSED this 5th day of April
, 1984.
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THE CORPORATION OF THE
TOWN OF KINCARDINE
IN-HOUSE COMPUTER FINANCIAL MANAGEMENT SYSTEM
MUNICIPAL ACTION '85
NOVEMBER 1983
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CORPORATION OF THE TOWN OF KINCARDINE
MANAGEMENT SYSTEMS GRANT
MUNICIPAL ACTION 85 PROGRAM
IN-HOUSE COMPUTER FINANCIAL MANAGEMENT SYSTEM
PROJECT DESCRIPTION
The Corporation of the Town of Kincardine is making formal
application under the Municipal Action '85 Program for a Management
System Grant in order to purchase computer software (and related
costs) from Management Solution Inc. This proposal contains a
full detailed breakdown of the project and includes a cost benefit
analysis.
The goal of the project will be to provide a more sophisticated
management information system for use by Council and management of
the Corporation of the Town of Kincardine.
The objectives of the project are to:
a) To provide better financial information to Council and
management;
To provide this information more inexpensively in real terms;
To provide this information faster;
To provide this information more accurately;
To institute improved control of expended funds;
To provide cost savings in staff time;
To reduce tax arrears and increase cash flow,
b)
c)
d)
e)
f)
g)
,
The Town of Kincardine has confidence in the computer hardware
and software to be supplied by Management Solutions Inc. who have a
large number of successful municipal installations to their credit.
The Town has received numerous positive recommendations from
municipalities with MSI systems installed and has yet to receive
a negative reference.
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PROJECT REQUIREMENTS/PROJECT PLANS
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The installation of a computerized financial management system
in the Town of ~incardine is not a simple matter of replacing an
existing manual system with a computerized one. Instead, the
proposed computerized system will provide some very important
improvements. The Town will have an accounts payable system for
the first time. We will have the ability to send out regular
notices of overdue current taxes and balance the collector's roll
monthly. We will also be able to expand the number of general
ledger accounts and thereby provide more information for management
purposes.
Therefore, there are two issues involved.
comparing a superior accounting system against
as well as comparing a comput~r system against
It is a matter of
an inferior system
a manual system.
Description of the Current System
The accounting system in the Town of Kincardine is basically
manual. The general ledger, cash receipts, cash disbursements,
accounts receivable, tax collection, and balancing the various
support ledgers are all done manually.
The only automated systems are payroll which is done through
CADP and tax billing through Business Computer Systems in London.
There is no accounts payable system and current taxes receivables
are not balanced throughout the year.
Basically, the system is not adequate for the management needs
of the Municipality because the information generated is too general
to be of use, slow and not accurate enough. To bring about these
improvements manually would require extra staff and was considered
expensive.
System Users
The current system is currently used by two members of the
administration and to a small extent by Council. The new system
will be designed for use by Council, all department heads and all
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employees, committees and commissions, responsible for revenue and
expenditure control.
There has been growing concern among the management and the
various Boards and Commissions that the information on the monthly
statements were not accurate enough and too general to be useful.
Town council has responded to this new sense of responsibility for
revenue and expenditure control by investigating the costs and
alternatives in upgrading the system. Computerization was
considered the most appropriate course of action.
System Functions:
In order to upgrade the accounting system, it will be required
to perform certain functions. This will be accomplished through
the purchase of software programs from M.S.I. We have no programmer
on staff, nor do we expect to hire one. Therefore, purchasing
these programs was the only sensible alternative.
The Town will purchase programs for chart of accounts and
general ledger initially. When these are in place and functional,
an accounts payable program will be added. Later in the year,
Payroll, Tax billing, Maintenance Management, Word Processing
and Budget will be added. The Word Processing program will enable
the Town to realize a number of advantages outside the financial
area including By-laws, Minutes, Form Letters, Police Accident
Reports, etc.
The software is fully integrated. Therefore, one transaction
need only be entered once into the system.
Operating Characteristics
The In-House Computer System will operate with basic business
language and will be used for primary input and will be located
in a separate room we have just renovated. The other terminal
will be located at the counter and be used to look up tax
information and pòst daily cash receipts. Information can be
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retreived visually through either terminal or printed by the printer
as hard copy.
Input into the computer will be done individually as a normal
part of the accounting system. The system is designed to be very
user-friendly and has a fast response time. The system can be
easily expanded in order to accomodate more growth in the Town and
more uses can be added to the system in the future.
System Input
Data to be put into the system will include normal municipal
financial information including general cash receipts, tax receipts,
accounts payable, cash disbursements, accounts receivable, payroll
and journal entries. Each of these elements are necessary to the
efficient and integrated operation of the system.
Non accounting data will be put into the system and will include
data for police reports, insurance reports, building inspector
reports and by-law indexes.
The expected accounting input will be as follows:
Tax Billing
Number of tax accounts
Number of tax payments per week
- peak
- minimum
Number of supplementary tax bills
Properties with local improvement charges
Payroll
Number of T-4's
Number of Groups
Frequency of payroll
Number of vehicles re: Maint., Mgmt.
Accounts Pay~ble
Number of cheques per month
3,000
l,OOO
15
75
2,250
200
2
weekly
ls
100
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Number of O/S cheques
Number of vendors
Number of ~nvoices per year
Average number of distributions
General Ledger
General Ledger accounts
Number of JE per month
20
150
5,000
3
.
2,000
20
System Outputs
Outputs of the system will include all normal reports
required for internal and external reports including monthly
financial statements and accounts for Council and Departmental
approval.
The system will aslo produce the year end financial report,
the financial information return, revenue and expenditure reports,
a by-law index, monthly statistical reports from the Fire Chief,
Building Inspector, Police chief and Small Animal Control Officer.
Future Extensions
This submission addresses the major and immediate concerns
of the Town of Kincardine. The computer hardware is very expandable
and will be easily upgradable in order to integrate future software
programs, such as elections, in the future.
The Town, however, has discussed the possibility of permitting
the Kincardine Public Utilities Commission to hook into our central
processing unit. They would, of course, have their own video
display terminal and printer.
The P.U.C. is
electricity to the
own system.
a separately elected
Town of Kincardine.
body
They
which
would
supplies water and
have to buy their
This area is currently under study at this time and no
decision has been'made. It is, however, a distincc possibility and
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would be a unique arrangement in this area.
COST ESTIMATES/~OST BENEFIT EVALUATION
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There is no question that the purchase of this computer system
would involve a cost to the Municipality. However, we hope to
demonstrate that the benefits exceed the costs as well as providing
a superior financial management system to the Town.
The study which led to this recommendation was completed by
the Municipal Treasurer. The Treasurer attended several demonstrations
by various suppliers, talked to other Municipalities, Ministry
Officials, and looked at data processing services. Dennis Steen
was particularly helpful in this study and we are very grateful
to Mr. Steen for this.
M.S.I. was chosen primarily because it was a proven, fully-
integrated,flexible and expandable system at a reasonable cost. We
believe M.S.I. will provide the best system with consideration to
our needs. The study took three months to complete and proved to
be a very complicated exercise.
Cost Estimates
HARDWARE:
One Rexon Model RXlOO Computer System
c/w - l6 bit INTEL 8086-2 processor
128 K Memory
15 million character disc storage
2 video display terminals
1 lsO c.p.s. Infoscribe printer
Business basic programming language
4 tapes
SOFTWARE:
Includes - General Ledger
- Accounts payable
- Payroll
- Tax billing - Misc. A/R
- Chart of Accounts
Additional - Maintenance management
. Word Processing
- Budget
- Discount
2l,072.
20,lOO.
2,200.
3,500.
2,440.
2,000.
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Development - Installation
- Suppliers' travel costs
- training 5 days @ $400
- Assessment tape transmittal
- data input - additional staff -
500 hours @ $8.42/hr.
Total Software Costs
Total Installation Cost
Annual Costs
Annual maintenance contract
Benefits: Quantifiable Annual Savin&!
General Ledger
McBee supplies no longer req'd.
Opportunity cost of manual expansion of G:LL.
from 200 for 2,000 accounts: 420 hrs. @ $ll.46
Accounts Payable
Opportunity cost of providing manual accounts
payable system: 210 hrs. @ $ll.46
Payroll
we do not expect any time savings in this
area as we are presently on a bank payroll
system. However,we will save the entire
bank processing fee.
Tax Billing - Misc. A/R
Our 1983 billing cost
Labour saving re: billing lOO hrs. @ $8.6l
Labour Savings re: collection 40 hrs. @ $8.6l
Labour Savings re: adding interest and balancing
arrears: 208 hrs @ $8.61
Opportunity cost of sending out month by current
tax notices 126 hrs @ $8.6l
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Audit Fees
Expected savings
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266.
500.
2,000.
600.
1,263.
34,869.
55,941.
l,s96.
750.
2,346.
250.
5,040.
2,520.
3,111.
2,907.
861.
344.
l,791.
1,085.
2,000.
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Word Processing
Labour savings: 100 hrs @ $7.90
Budgets
Labour Savings
790.
2,150.
22,849.
20,503.
Total Annual Savings
Net Annual Savings
Return on Investment
2.7 years
We believe a return on investment of 2.7 years is very good
for the Town of Kincardine.
Significantly, there are some benefits which are not reflected
in the above figures because they were difficult to quantify. The
new computer system would reduce tax arrears and make some money
available for investments and daily cash requirements. There would
also be a better service provided to the public, notibly in regard
to current tax notices. Property owners who miss a tax installment
in a current year, are not notified of this until the next year. In
the meantime they have incurred penalty charges and some people
get very angry. The new system would permit us to notify them
much sooner. There would also be better, faster and more accurate
financial information available for Council and Management which
would result in better management of the Municipality.
IMPLEMENTATION PLAN
Factors affecting Implementation
The Council of the Town of Kincardine has passed a resolution
accepting the proposal for the installation of computer hardware
.and software from Management Solutions Incorporated.
Implementation Procedures
The new computer system will be put into operation by existing
staff. Three off~ce staff will be working on the system from
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either terminal. The Treasurer will be responsible for the management
of the system installation and operation. The Senior Accounting
Clerk will do the primary work on the system. As she learns the
operation, certain tasks will be delegated to other staff. For
example, the Receptionist Clerk will input cash receipts and the
Clerk-Typist will post tax receipts. We will b~ing in a part-time
Junior Accounting Clerk to input required data at set-up time.
~ect Control
The project will be phased over a period of one year in order
to allow staff to adapt to the system and in order to ensure that
one program is underway and operational before advancing to another.
In this way, we can review the progress of each system, one at a
time, in order to ensure thesmoot~stand trouble-free transition
as possible to a computerized financial management system. The
following is our anticipated schedule.
December 15, 1983
January 1, 1984
- delivery of system
- chart of accounts
- general ledger
- accounts payable
- word processing
- payroll
- maintenance management
- tax billing, miscellaneous accounts
receivable
March 1, 1984
May 1, 1984
July 1, 1984
August 1, 1984
November l, 1984
The Treasurer is responsible for reporting to the Finance
Committee on a monthly basis concerning the progress of the
installation and conversion.
Acceptance Criteria
The Town of Kincardine has done an in-depth study of the
computer system and is confident it will succeed in meeting the
goals and objecti~es established for the project. The system has
proven itself in other municipalities. All equipment and programs
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will be carefully examined and tested to ensure that they perform
as expected.
We plan to'operate our manual system for the first three
months until we are confident in the new system. After that
time, the manual system will be available as a back-up system.
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Staff Training
All staff training will be done by the software suppliers.
Deliverables
All equipment delivered to the municipal offices will be
checked out and the programs checked to ensure that they operate
properly before final payment ,is made.
POST EVALUATION CONSIDERATIONS
On-Going Maintenance
The Town of Kincardine will enter into an agreement with
TRW in order to ensure that proper and adequate maintenance of
the equipment is performed at all times. The Town will deal with
M.S.I. concerning software maintenance in order to ensure that
the programs meet the Town's ongoing requirements.
Future Extentions
The major future extension to the computer system adopted
by the Town is to include the Public Utilities Commission. This
has been discussed above and remains a distinct possibility.
CONCLUSION
The Town of Kincardine feels it qualifies for this management
systems grant. A great deal of work has gone into this study
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and the following factors have been identified as distinct
advantages of adopting a computerized financial management
system.
(a) There is a return on investment of 2.5 years.
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(b) The system is the first in this area of the province.
(c) There is considerable interest by other municipalities in
our proposed system, and therefore we believe the concept
is easily portable to other municipalities.
(d) The system provides some very important improvements to
our accounting capabilities.
(e) The system will promote better management of the municipality.
(f) The system is expandable as future needs develop.
(g) The system has the full and unanimous support of Council.
Other municipalities in this area are very interested in
what we are doing and following our progress with a great deal
of interest. If our installation is successful and meets its
objectives, other municipalities in this area could very well
implement a similar system.
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Pile No. 41402-303-047
MINISTRJl' œ MUNICIPAL AFFAIæ AND IDJSING
MUNICIPAL ACTIOO '85 AGREE!1l'N1'
THIS AGREDIENl' male in triplicate this 19 day of April
, 1984.
BE'1WEEN&
HIffi MI'JESTY 'lHE CUEEN, in right of
the PrOl1ince of cntario as
represented by the Minister of
Municipal Affairs and Housin;¡,
hereinafter referred to as the
"ProI7 incen ,
œ 'ffiE FIRST PART,
AND:
'Ibwn of Kincardine, hereinafter
referred to as the "Municipality",
OF 'lHE SFXXN> PARr.
WI'mESSES THAT
WHEREAS the Province wishes to assist cntario municipalities under
its ~O}ran nHunicipal Action '85" by fundin;¡ irrlividual municipal
initiatives airne:l at increasin;¡ productivity, improvin;¡ ClOst
effectiveness, and refinin;¡ staff expertise,
AND WflEREAS the Municipality wishes to participate in the progrsm.
AND WHEREAS the aJnicipality by by-law I'b. 4599 passed en the 19th
day of April
the Clerk
, 1984.- has authorized the Mayor
and
of the said Municipality to execute this
h;Jreenent en behalf of the Municipality,
NΠ'ffiEREFORE in oonsideration of the mutual covenants herein
oontained the parties agree as follows:
1. 1be Municipality shall urrlertaJœ or have undertaken the Project,
hereinafter referred to as the "Project" to implement a
<:anputerized Financial Management System, in accordance with
SChedule "A" attached hereto and fm:min;¡ part of this Agreeuent.
2. 'lhe Project shall be CXItIpleted onjor before the 1st day of May,
1985, hereinafter referred to as "the cx:mpletien date", unless
exterrled, up to a maximum period of six lTOI1thS, by mutual oonsent
of both parties. A penalty of 10% reimbursement of furXIs to the
PrOll'ince may be imposed by the PrOvince, if this oondition is not
met.
3. (a) 'lhe PrOll'ince a;¡rees to contribute to the actual cost of the
Project, the SWI of Seventeen Thousan:l, /!bUr Hundred and
'lhirty Five Dollars ($17,435.00).
(b) The PrOvince may make a payment of Seventeen Thousand, Four
Hundred and '1tIirty Five DOllars ($17,435.00) to the
Municipality as socn as may oonveniently be done after the
signirr;J of this Agreement.
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(c) In the ell'ent that the Project is rot lDiertaken, the
Municipality ¡¡grees to return all monies a3vanced by the
Province, in accordance with this section.
(d) In the further event that the Project altholçh lDiertaken,
terminates prematurely for any reason, includirç temination
by the Province in accordance with section 9, the Province,
taldrç into accotmt all the étwLopr1ate cirCIJIIStances, may
determine, in its absolute discretion, that a portion of its
pa~ to the ~icipality shall be returned by the
Municipality to the Province. 'D1e lú1icipality ¡¡grees to
forthwith maJœ such repa}ml!nt to the Province.
4. '!be Municipality shall provide the Province with a statement
certifie:l by the Treasurer, settirç out in such detail am in such
form as the Province may direct, the Project oosts incurre:l or paid
by the lú1icipality in œrryirç out the Project. '!be ltJnicipality
shall also provide to the Province i/M)ices amreœipts regar:àirç
such oosts, 1£ so requested by the Province.
5. 'Ihe Province or its ¡¡gents may attem any meetirç related to the
Project am to that purp.:>se the Municipality shall a3vise the
Province of the time am place of all meetin;¡s in sufficient time
to facilitate atten:'Jance.
6. '!be Mmicipality shall at all times permit all staff oa:: ¡¡gents of
the Province to inspect any ~lent of the Project. 'D1e
Municipality shall also subnit to the Province progress reports at
such intervals as the Province may require.
7. All data, 1oOrkin;¡ papers and other doc.unents prepared for or by the
Municipality in oonnection with this Project, includirç the
doc.unentation, manuals or reports provided for in Schedule -A-,
shall be am remain the sole property of the Municipality.
However, the Province shall at all times, after the a;mp1etion of
the Project am in consultation with the Municipality, have the
right to p¡blish or otherwise disseminate any such docI.Iuentation,
manuals am reports, except; for docunentation, manuals or reports
which the ltJnicipality is prohibited by any ilJreement to ..tIich it
is a party, £ran plblishirç or otherwise d issaninatin;¡ .
8. '!be Municipality shall irXIemnify am save harmless the Province
£ran and ¡¡gainst all claims, actions, losses anj expenses, oosts or
dllllages of ell'ery nature am kin:) whatsoever whid1 may be occasioned
as a result of the negligence of the ltJnicipality or any consultant
or ¡¡gent retained by the I\t.micipality in connection with the
Project.
9. 'ltIe Province may at any time, by written ootice of at least BeYen
days to the Municipality, susperXI Πotherwise terminate this
Þqresment.
10. MY ootice herein provided for or given hereurx1er if given by the
Province to the Municipality shall be sufficiently given if mailed
to the ltJnicipality by ~paid registered ¡;x>st <Ddressed to it at:
Town of KincaJ:dine
P.o. B::Jx 329
KINCARDINE, Cbtario
NOO 2GO
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11. Arr¡ notice herein ¡xovided foe oe given hereunder if given by the
Municipality to the PrcNinœ shall be sufficiently given if mailed
to the Province by prepaid registered post addressed to:
Directcr or Acting Director
Mlmicipal Management Policy Branch
Ministry of Municipal Affairs and lkIusing
11th Floor, 777 Bay street
'l\Xonto, cntario
M5G 2E5
12. Any notice shall be deemed to have been given on the date of
mailing. Either the PrcNince oe the Municipality may at any time
give l'Dtice in wdting to the other of any mange of address of the
party givin;¡ such notice and after the giving of such notice the
ikXIress therein specified shall be deemed to be the address of such
party fee the giviRJ of such notice thereafter.
IN wrmESS æEREŒ' Mr. Alec Trafford, Director, Pomicipal
Management Policy Branch, has, on behalf of the Minister of lotmicipal
Affairs and lkIusing on behalf of the PrcNince of cntario hereunto set
his hand, and Charles W. Mann and C. R. Merritt on
behalf of the Municipality, have hereunder set their I1aMs.
witness
SIGNED, SFALID Am IELIVERED )
IN 'lHE PRESENCE rEI )p)
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