Lansing upgrades its tax processing system

Last year, Lansing, Mich., changed its tax processing computer system from a 25-year-old data entry system to a client/server system. The new system has enabled the city to process refund checks more quickly, work more efficiently and save money.

The city had several reasons to update its tax processing system: the system was not Y2K compliant; maintenance costs were rising; maintenance help on such an old system was increasingly difficult to find; the system was at full capacity and could no longer meet the tax department’s needs; and it was prone to crashes and required frequent archiving and clean-up, which affected the productivity of the tax department staff.

According to Eric Tumbarella, manager of computer and communication services for Lansing, the department needed to move to a system that would provide robust data entry capabilities yet be flexible enough to accommodate the diverse needs of an expanding city. The city currently processes approximately 100,000 two-page personal income tax returns a year, and that number is increasing by 5 percent a year. Production schedules peak between February and June when weekly averages of forms received can range from 2,000 to 5,000.

After evaluating different systems, the Office of Computer and Communication Services decided to purchase new software and hardware from San Diego-based Captiva Software. For an initial investment of $150,000, the city replaced its outdated equipment with three Pentium PCs and a server. The cost also included four software modules and training, which was needed as the staff moved from the old text-based system to the new client/server system.

With the new system, workflow has improved tremendously, Tumbarella says. Batches of tax forms that are entered into the system using one software module are seamlessly moved along to another software module to be verified. After data is verified, another module automatically writes a flat text file, which the system administrator uploads to the mainframe. Then, the administrator backs up the server and runs a clean-up to eliminate files marked for removal from the system.

The time it takes for data entry, verification and storage has been cut in half, and the department has reduced the size of its staff by one full-time employee, who was assigned elsewhere in the city. Additionally, the data entry staff has been able to complete extra clerical tasks to further increase the department’s productivity. “The staff is firmly committed to the new system, particularly as it allows each individual operator to stop and re-start in the middle of a batch – under the old system, the entire batch had to be completed,” Tumbarella says.

In the future, the department plans to scan the tax forms so the data entry staff will not have to refer to paper forms, and eventually, the city would like to offer its taxpayers the ability to submit their returns via the Internet. “We foresee the new system meeting our needs for the next five years, which is as far ahead as we forecast,” Tumbarella says.