Authored by: Pat Spampinato, Senior Virtual Chief Information Officer, VC3
It’s no exaggeration to say that information technology (IT) is often one of city leaders’ least favorite parts about running a municipality. Unlike the straightforward nature of providing resident services or running council meetings, IT can be overly technical, confusing, jargon-ridden, and complex. It’s no wonder that municipal administrators and staff struggle to become enthused about it.
However, if decision makers don’t understand IT well, they won’t give it the attention it needs. Particularly in smaller municipalities, yearly budgets frequently fail to accurately reflect existing IT investments. This can lead to lack of technology oversight, wasted investments, and planning gaps.
If these expenses are buried under a broader budget line, you won’t be able to determine if you’re overspending, underspending, or need to make a crucial investment to address a gap.
This article provides three municipal IT budgeting strategies that we recommend to cities and towns of all sizes.
1.Break IT into a few separate line items.
In the ‘90s or early 2000s, when IT was much simpler, it may have been permissible to have a single budget line item for “Computers” or “Technology.” However, IT encompasses far more than just computers today.
Recommendation: Break IT into a few separate line items. Don’t worry—you don’t need hundreds of budget line items, but even small municipalities can delineate the following IT components to provide full visibility and transparency.
- Hardware: Hardware is more than just computers. It can include:
- Servers
- Endpoints (such as desktop computers, laptops, tablets, etc.)
- Network Infrastructure (such as switches, routers, etc.)
- Data storage
- Printers, scanners, and other electronic office hardware
- Data centers
- Telecommunications
- Software: You may use a range of software including:
- Workstation software (that runs on individual computers)
- Server software
- System software
- Security software
- Financial system software
- Website domain hosting
- Email hosting
- Database hosting
- Personnel and Services: Includes any human-related IT expenses such as:
- Full- or part-time employees
- Service providers
- Consultants
- Training
2.Centralize IT to reduce duplication and waste
When municipal departments operate in silos and create their own IT budgets, it often leads to wasteful IT investments. Signs of IT sprawl across departments include:
- Inefficiency and duplication: It’s not uncommon to find two departments using the same software—with duplicate licensing costs. Centralizing the administration of software can save you money.
- Inconsistent technology standards: What if City Hall is using the latest and greatest software while Parks and Recreation lags behind? This leads to a varying service quality for residents, an inability to share data and information between municipal departments, and staff morale issues.
- Security risks: If departments can decide for themselves what technology they want, then security standards will be inconsistent across your municipality—an unacceptable risk as cybercriminals relentlessly threaten municipalities.
- Vendor sprawl: Using duplicate, redundant, or an excessive number of technology vendors results in unnecessary spending.
Overall, a decentralized, department-centric approach to IT leads to bloated costs, unnecessary cybersecurity risks, and reduced operational productivity.
Recommendation: Perform an IT inventory across your municipality. This inventory will allow you to analyze your IT assets and total spend across departments while identifying areas to consolidate investments. Specifically look for opportunities to centralize hardware, cloud computing services, applications, and vendors.
3.Label IT correctly
Technology can be difficult to understand on a technical level, but that doesn’t mean you should throw up your hands. In many towns and cities, we see that technology doesn’t even have its own line item. For example, we’ve seen IT fall under “office supplies” or “professional fees.”
This lack of transparency and insight into your IT investments, or even a lack of any significant investment, is concerning. When you mislabel IT, many questions arise:
- How many computers and servers do you have? How much do they cost? When will they need to be replaced?
- What software do you use? How many licenses do you own?
- What are your overall capital expenses for IT? Operational expenses?
- How much does your IT support cost? Is it a monthly retainer? Is it billed hourly or on a break-fix basis?
If these expenses are buried under a broader budget line, you won’t be able to determine if you’re overspending, underspending, or need to make a crucial investment to address a gap.
Recommendation: A municipality in this situation likely lacks insight into their technology investments. Asking the following questions would be helpful:
If these expenses are buried under a broader budget line, you won’t be able to determine if you’re overspending, underspending, or need to make a crucial investment to address a gap.
- Do I have data backup? Is my data backup tested and operational?
- What hardware do I own? Is my hardware at the end of its life?
- Have I recently evaluated our ISP or telecom provider?
- What IT support model do I use? Are my IT support costs unpredictable?
Together, these questions—along with the exercise we outlined above with the budget components in section 1—will begin to give you a picture of what you have, how much it costs, and how to categorize technology into its own line items in your municipal budget.
Municipal budgeting is already difficult, even without considering IT. However, it’s critical to understand your IT assets and clearly delineate your IT budget. By shedding light into your IT situation, you can more accurately see where you can cut costs, plug gaps, and plan for future needs.
If you’d like more guidance, VC3 has created a municipal IT budget planning guide based on our experience serving over 1,100 municipalities.
Get the Guide Here
This municipal IT budget planning guide includes 6 essential components of an IT budget, a 5-question IT budget assessment, tips on presenting IT budgets to council, and IT budgeting examples.
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