Paperless trail costs Minnesota taxpayers dearly
 

[June 29, 2015]  By Tom Steward | Watchdog Minnesota Bureau
 
 On paper, going paperless in government makes sense. Staff armed with iPads can significantly reduce the time spent entering duplicative data for participants in government programs and increase efficiency in providing services, theoretically saving taxpayers.

Yet Winona County is paying dearly for being on the cutting edge of implementing an electronic data management system. What started out as a promised profit center based on selling EDMS software and services to other counties turned into a money pit that may never break even.

“We’re into it for multiple millions, and it was supposed to not be a burden on our taxpayers. It was supposed to be a blessing to our taxpayers,” said Steve Jacob, Winona County Board chair. “It’s never going to be a blessing. It’s how much we can ease the burden of the program.”

The EDMS program was pitched by Winona County information technology director Mark Anderson and then county administrator Duane Hebert as a way to manage a skyrocketing human services workload and shrinking staff. It followed years of meetings between several southeastern Minnesota counties focused on streamlining costs and services.

The initial project approved by commissioners was expected to cost about $350,000 and pay for itself within 20 months, board documents show. To date, Winona County has spent some $2.3 million on the digital document system since the project’s inception. Revenue from other counties totals about $710,000, covering about one third of the system’s cost to date, leaving Winona County taxpayers to subsidize the remainder.
 

Anderson was out of the office and unavailable for comment. Hebert insists the board approved the first phase —financial services — of a project that was always expected to run over $1 million.

“We either had to hire more staff or find a way to be more efficient,” Hebert said. “…My guess is that number of $350,000 paying off within 20 months takes into account not having to hire or spend $50,000 per employee. At one point, I believe the request was for three or four employees to be hired.”

Yet one commissioner who voted to approve EDMS in October 2011 says everyone involved can take some responsibility for not being more hands-on.

“We approved a concept. We didn’t have contracts, we didn’t have exact costs, we didn’t have a frame work of how it was going to be managed. All those things,” said Winona County Commissioner Marcia Ward.

“I think anyone who said they weren’t aware of it on the county board, probably isn’t being really upfront,” Hebert said. “All that information was provided to the county board when they made their decision.”

The confusion was compounded with revelations a year ago that officials had taken paperless to a new level, inadvertently failing to execute contracts — on paper or electronically — with five counties signed up to help pay for the project.

The bad news surfaced when Fillmore, Freeborn, Goodhue, Houston and Wabasha counties complained about sticker shock on a combined bill for almost $400,000. But there was no way to know for sure how much the counties actually owed for EDMS services. The paperless trail and lack of documentation led the counties to withhold payment and renegotiate the deal.

“That’s when we questioned it, whoa, what’s this $100,000 for? And not just us. All of the counties were questioning, ‘where’s this coming from?’” said Bobbie Vickerman, Fillmore County coordinator. “We all paid the upfront fees, and so we were just trying to verify what the actual cost was.”

Winona County ultimately backed down and cut the counties’ combined bill by about 40 percent. Fillmore County’s bill shrank by more than 50 percent, declining from $102,700 to $48,800 in “E-Doc Services,” according to two Winona County Finance Department invoices.

Despite the rate reduction, Fillmore and Wabasha counties continue to hold off paying their adjusted bills, until negotiations under way lead to a contract.

“There are no contracts with any of the counties at this point. We all are working on that. So we actually went over and met with them and it’s not just us,” Vickerman said. “None of the counties have signed agreements that I’m aware of. We’re actually talking about if we should go into more of a regional agreement.”

At an April county board meeting, Anderson estimated it may take seven and a half years for the program to break even. He extended that payback period to 14 years in an interview with the Winona Post — unless commissioners take Anderson’s recommendation to double down and market EDMS to more counties. That’s a tough sell to the county board chair.

“Every time we open one door, there’s three more doors behind that door,” said Jacob. “My goal is to make sure we’ve got absolutely everything squared away and have a good grip on the finances of the contracts, who’s getting how much for what they’re paying and what they’re expecting to pay in the future, before we even think about expanding it.”

Meanwhile, participating counties agree the transition to digital documents and records saves on time, staff and space. The efficiencies may not show up on a spreadsheet, but counties say they’re holding the line on new hires, despite a spike in what used to be paperwork.

“We definitely have already seen benefits of automating many of our processes and going paperless. It’s been one of the key ingredients, when it comes to making sure we can handle that type of workload,” said Nina Arneson, Goodhue County health and human services director.