Unbelievably, the $14.8 million “Enterprise Resource Planning” software just got uglier for Montgomery County taxpayers

Unbelievably, the $14.8 million “Enterprise Resource Planning” software just got uglier for Montgomery County taxpayers

Image: The Blobfish, Psychrolutes marcidus, often considered one of the ugliest animals on Earth, aptly symbolizes the Montgomery County government’s Enterprise Resource Planning (ERP) software, because, like the $15 million (and rising) ERP implementation project, the Blobfish’s flesh is primarily a gelatinous mass.

Conroe, October 10 – The rude awakening of the Montgomery County Commissioners Court to the unlimited cost of the gelatinous mass of the $14.8 million Enterprise Resource Planning (ERP) software, which they blindly approved on August 28, 2018, on a 3 to 2 vote, began at the Tuesday, October 9, 2018, Montgomery County Commissioners Court meeting. When the Commissioners Court approved the massive expenditure, all of which was completely unnecessary because a $200,000 per year accounting system license would have been sufficient instead, they failed to review the proposed contract or even have the contract in front of them. The four County Commissioners Court and County Judge, lame duck Craig Doyal, didn’t even know the identity of the vendor but instead took the proposal on blind faith in disgraced County Treasurer Stephanne Davenport, who is leaving office on December 31, and in fired County Auditor Phyllis Martin, who is leaving office on December 31.

On August 28, Montgomery County Purchasing Director Gilbert Jalomo assured the Commissioners Court on August 28 that the price was fixed at $14.8 million.

On October 9, 2018, only 42 days later, Jalomo informed the Commissioners Court that they’d need to approve an additional purchase of $195,000 for a separate module for the Environmental Health and Permitting Department. When Jalomo made the request yesterday, Precinct 2 County Commissioner Charlie Riley appeared befuddled, “Did we expect this?” In other words, Riley voted for a proposal six weeks earlier about which he didn’t know and had almost no understanding whatsoever.

Doyal tried to convince the members of the Commissioners Court that the situation wasn’t so bad, because the cost of the additional module was not as expensive as he had imagined. County Auditor Phyllis Martin, however, burst that theory when she quickly responded, “It’s not cheaper than what we thought.”

Precinct 3 County Commissioner James Noack was the only member of the Commissioners Court who voted “NO” to the proposed $195,000 expenditure. He had also voted against the entire ERP software project, rapidly known as the “Blobfish Project” for the gelatinous nature of the spending and the unknown benefit, if any, from it.

Corrupt is is corrupt does: Montgomery County Commissioners Court votes for most expensive spending project in County government history ($14.9 million) without seeing contract terms or assurance of any benefits to County or taxpayers
Don Martin obviously had three members of the Montgomery County Commissioners Court in mind when he drew “The Fool.”

On a three (3) to two (2) vote, on August 28, the Commissioners Court voted to spend $14,827,000 on the ERP software of which $8,550,000 of expenditures will come during the next two years without:

  • Seeing the contract;
  • Reviewing the bids for the contract;
  • Hearing one attempt by any of the proponents of the ERP software to explain what benefit the County would receive from purchasing it;
  • Reviewing any information about the proposed vendor Infor than knowing that they’ve mired in substantial litigation over other ERP software packages they’ve sold other entities;
  • Knowing how much money the vendor requires in up-front fees as opposed to annual maintenance payments, because Purchasing Director Gilbert Jalomo, County Auditor Phyllis Martin, County Treasurer Stephanne Davenport, Information Technology Director Marshall Shirley, and Human Resources Director Dodi Shaw had no idea about any of the details of the proposed expenditure which they endorsed before the Commissioners Court;
  • Knowing when the software implementation would be complete, since the vendor has only provided a general “estimate” of “24 to 36 months”
  • Allowing incoming County Judge Mark Keough (or even democrat Jay Stittleburg) to review or have any input in the decision;
  • Allowing incoming County Treasurer Melanie Pryor Bush to have any input in the decision;
  • Knowing whether County Auditor Phyllis Martin will even receive a contract renewal for her job from the Board of District Judges, after an independent accounting firm gave Martin a performance rating that only stated Martin “partially” performed her job duties and functions.

The Golden Hammer, Montgomery County’s leading daily newspaper confirmed the foregoing facts with open records requests and interviews of the foregoing individuals as well as witnessing their conduct in open court.

The ERP expenditure is the largest spending package – outside of road funding or the capital purchase of an office building – in the history of the Montgomery County government.

The ERP revealed the utter corruption of Davenport, Martin, and Doyal. There was no advocacy for the ERP software, because they’ve failed to find one rationale to spend the money. Martin, who, as Auditor, shouldn’t be involved in policy decisions and whom the Board of District Judges has terminated as County Auditor as of December 31, Davenport, whom the voters soundly rejected for doing a terrible job as County Treasurer, and Doyal who has done a terrible job as County Judge and has poorly reflected the principles and values of Montgomery County citizens during his tenure, pushed the ERP software funding to a contract solely because they could.

Precinct 3 County Commissioner James Noack led the opposition to the ERP, while Precinct 4 County Commissioner Jim Clark joined him in voting against it. Noack noted that “54 to 76 percent of ERP implementations end up costing more than 25% over the initial estimated price.”

Amazingly, County Judge Craig Doyal, Precinct 2 County Commissioner Charlie Riley, and Precinct 1 County Commissioner Mike Meador had no idea how much the ERP contract price would even be before they declared their support for the crazed expenditure. It was very apparent that none of Doyal, Riley, Meador, Jalomo, Martin, Davenport, or Shirley even knew what an ERP software system is or what it’s purpose is.

When the Commissioners Court deferred purchase of the gigantically-expensive software at the recommendation of Purchasing Director Gilbert Jalomo on August 14, both Jalomo and County Judge Craig Doyal caught mighty Hades from Davenport and Martin in a secret meeting in Doyal’s office immediately after the Commissioners Court meeting on August 14. Davenport and Martin expressed their fury towards Jalomo and Precinct 3 County Commissioner James Noack, who had expressed concerns about the cost and necessity of the ERP software as opposed merely to purchasing a less expensive accounting software, such as the most advanced version of Quickbooks.

Montgomery County Tax Assessor-Collector Tammy McRae utilizes six (6) annual licenses of the most advanced version of Quickbooks designed for major companies and large governmental entities. McRae pays $2,500 total in annual license fees for the six licenses. The Golden Hammer has confirmed that the County government could purchase 500 licenses for Quickbooks to cover the 80 County departments for $200,000 per year with little to no phase-in other than a possible data migration, which would likely cost County taxpayers another $200,000 to $300,000.

Davenport and Martin have already cost County taxpayers over $200,000 in consultant and construction fees for their efforts to get the County government to waste money on this ERP software. While it’s clear the County needs a new finance and accounting system, such as Quickbooks, the ERP software goes far beyond those capabilities to give the County government the ability to engage in financial and capital planning at a level that most major oil companies would require in their planning departments as opposed to a governmental entity that should be looking, instead, for ways to save tax dollars.

Davenport and Martin have remained extremely secretive about the actual cost of the ERP software, although it does appear they’ve shared that information with the lady who is the convicted felon who acts as the new spokesperson for the Davenport Ring. The August 28, 2018, Commissioners Court agenda includes the following cryptic line under Purchasing: “Take all appropriate action to approve the award for Project 2016-0038 RFP-ERP Software and Implementation Services for Various Departments.” There is no contract or pricing attached to the agenda. The Golden Hammer has confirmed that the Davenport Ring has not provided any proposed pricing or contract to the Commissioners Court as of the date of publication of this article.

At this point in time, the people who are pushing for the ERP purchase will not or may not even be in office at all after December 31, 2018:

  • County Treasurer Stephanne Davenport has lost re-election and will not be the County Treasurer after December 31, 2018. Republican Nominee for County Treasurer Melanie Pryor Bush will likely be the next County Treasurer. Davenport has not consulted with Bush, who has a strong finance and accounting background (as opposed to Davenport), about the EPR software.
  • County Auditor Phyllis Martin’s will no longer be the County Auditor as of December 31, 2018, since the Board of District Judges terminated her. The Board of District Judges has raised serious questions about Martin’s job performance. The Board hired the independent accounting firm of Postlethwaite and Netterville to perform an External Assessment of Martin’s job performance. The External Assessment was not very complimentary of Martin’s work. Martin is not a Certified Public Accountant, meaning that Montgomery County is the largest County government in Texas without a CPA as the County Auditor. Martin’s poor job performance and the inappropriate nature of her involvement in policy matters reflect Martin’s refusal to abide by Generally Accepted Auditing Standards.
  • County Judge Craig Doyal will leave office on December 31, 2018. Doyal has not consulted with likely incoming County Judge Mark Keough about the ERP.
  • Two other members of the Commissioners Court – Jim Clark and Mike Meador – will be leaving the Commissioners Court by the end of 2020 (Clark by the end of 2018). Therefore, the opposition of Noack is a matter the entire Commissioners Court should take seriously, since Noack and Precinct 2 County Commissioner Charlie Riley will be the two remaining Court members who will have to deal with the ERP, if the County Commissioners were to saddle the taxpayers, Noack, and Riley with that expenditure.

During a Thursday, January 18, 2018, candidate forum, which the Montgomery County Eagle Forum sponsored, the Publisher of The Golden Hammer asked, “To both candidates [Davenport and her challenger in the Republican Primary Election, Melanie Pryor Bush], how much do you anticipate the Enterprise Resource Planning system will cost and what will be the financial benefit in dollars that you anticipate for the County’s taxpayers?”

Davenport responded with an attempt to shroud the massive expenditure in secrecy, “I can’t give a lot of detail. By statute, we can’t discuss vendor negotiations until a contract is awarded. We fall short in technolgoy. My department has implemented processes to shorten the time to do the payroll. We do an annual payroll workshop. It’s constantly looking at ways to innovate.” Sadly, Davenport didn’t even come close to answering the question and instead tried to blame the law for her secrecy. (Her legal excuse was total bunk.)

Davenport’s opponent, Melanie Pryor Bush, is not a part of the Montgomery County government yet, so she is a victim of Davenport’s secrecy as are all citizens of this community. Nevertheless, Bush answered, “I’ve heard. We won’t know the cost until they tell us. They’re in the process to build out space next to the County Attorney’s Office to house the implementation team. They’re estimating 26 months to implement the system, when in other counties the implementation takes longer than that. They haven’t factored in the staff time for implementation into costs.”

Obviously, neither Davenport nor Bush anwered the question. With an expenditure as massive as the proposed ERP, citizens ought to expect that Davenport would know an estimate cost and the precisefinancial benefit to the purchase of the system to the taxpayers.

At the May 9, 2017, Commissioners Court meeting, County Auditor Phyllis Martin and a consultant who received over $149,000 for a completely worthless collection of euphemisms which Martin and the consultant called a “report,” provided an “update” about the Enterprise Resource Planning system they and Doyal propose for the Montgomery County government.

ERPs are often utilized in business enterprises – ones seeking “profits” unlike the government which just spends – to bring together different financial functions, such as payroll, contracting, purchasing, and insurance, so that the various users of such information are able to communicate with each other online easily.

The Golden Hammer spoke with Mark Ward, a renowned business and technical consultant from the Tampa, Florida, area, who reviewed the ERP presentation of the County as well as its operations and budget and provided this newspaper with two major conclusions. First, Ward noted that a governmental entity should only implement an ERP “if it can reduce employee staffing needs by 10% or more.” Second, Ward estimated that the high end of an ERP’s annual cost for use by an approximately 2300 employee County government should be in the range of $90,000 per year for licensing fees with no up-front costs other than ensuring network compatibility (such as implementing a Windows or other appropriate operating system).

Unfortunately, with the out of touch bureaucrats – Davenport and County Auditor Martin – studying the County’s proposed ERP and with Plante Moran, a consulting firm greatly profiting from making the process of purchasing an ERP as complex as possible to gin more consulting fees, the cost estimates which Martin provided the Commissioners Court were through the stratosphere. There are no estimates whatsoever of any financial benefits to the taxpayers.

Despite all of that money Doyal, Riley, and Martin want the County to shell out, Martin admitted that there would be no savings whatsoever in the number of employee salaries necessary in the County government. Therefore, Ward’s first goal for an ERP will fail. Second, the cost of this ERP system will be approximately 8 times the annual cost it should be as well as an infinite times the startup cost (which should be 0). Finally, as crazy as this proposal seems, it’s even worse. Martin told the Commissioners Court that it will take over 2 years to implement the system!

Bush has made clear that the 2-year estimate for implementation of the software behemoth is far too aggressive.

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