ONGARD Modernization Project Certification: Planning: Change Request September 17th, 2014 Tim Elsbrock, Project Manager Tony Hoffman, Director of ONGARD Service Center Greg Saunders, Chief Information Office, Department of Taxation and Revenue

History of ONGARD: --ONGARD Service Center (OSC) Created by a Joint Powers Agreement in 1990 Collects and distributes 30% of the State’s Revenue, $2.2 Billion collected in fiscal year 2014 Is 20+ years old Legacy/Mainframe/COBOL system that has not changed much over the 20 years System is well past the useful functional life expectancy of an IT system --This project is the first major step in defining the replacement for ONGARD The 2012 Legislature appropriated $6 Million appropriation to stabilize and modernize the ONGARD system Stabilization was completed and ONGARD was upgraded to current DoIT standards Modernization was to define the future state of ONGARD Additional funding to redevelop ONGARD was requested in FY15 Planning cycle 2

3 Modernization Project Progress to date: --14 Digit API issue removed from project efforts Requirements work discovered/confirmed that the concept of ‘Spacing Unit’ will not be impacted by implementing the 14 digit API Decision was to save the money and move forward with the Business Process Analysis OCD will build this 14 digit capability in their systems as they own the front end of the ONGARD data flow --RFP for Business Process Analysis (BPA) completed Award tentatively made Kickoff in November Will define the functional specifications for the RFP that will ultimately replace ONGARD Will require strong effort from ONGARD customer subject matter experts Backfill requests is made to allow SLO & TRD to continue audit and collection activity 3

4 Project Next Steps: PCC approves certification change request SLO & TRD Backfill Positions to allow key employee participation in the Business Process Analysis project Conduct the BPA in preparation for the RFP that -will eventually replace the ONGARD system (start Nov 2014) Output is requirements documentation for ONGARD 2 RFP Receive funding for replacement of ONGARD C-2 request for $33 million was submitted with FY15 IT Plan Request based on function point analysis of current system Anticipate $11 million per year project burn rate Target ONGARD 2 completion in FY19 4

5 Modernization Budget (current appropriation): Comments: Description   Description FY15& Prior FY15 FY16 FYxx Staff - Internal Consulting Services $1,710,000 $2,059,000 $1,506,000 Hardware Software Total Approval of September 17, 2014 change request will reallocated some consulting services budget 5 2/24/2019

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Questions…? Appendix: Laws of 2012, Chapter 19, Section 7, Item 5 7

Section 7. DATA PROCESSING APPROPRIATIONS Section 7. DATA PROCESSING APPROPRIATIONS.--The following amounts are appropriated from the computer systems enhancement fund, or other funds as indicated, for the purposes specified. Unless otherwise indicated, the appropriation may be expended in fiscal years 2012, 2013 and 2014. Unless otherwise indicated, any unexpended balances remaining at the end of fiscal year 2014 shall revert to the computer systems enhancement fund or other funds as indicated. For executive branch agencies, the department of finance and administration shall allocate amounts from the funds for the purposes specified upon receiving certification and supporting documentation from the state chief information officer that indicates compliance with the project certification process. The judicial information systems council shall certify compliance to the department of finance and administration for judicial branch projects.   For executive branch agencies, all hardware and software purchases funded through appropriations made in Sections 4, 5, 6 and 7 of this act shall be procured using consolidated purchasing led by the state chief information officer and state purchasing division to achieve economies of scale and to provide the state with the best unit price. HAFC/H 2, 3, 4, 5 & 6, aa - Page 215 (5) TAXATION AND REVENUE DEPARTMENT 6,000.0 6,000.0 To stabilize the existing system and begin modernizing the oil and natural gas administration and revenue database, including issuing a request for proposals. Before implementation, the taxation and revenue department, the energy, minerals and natural resources department and the commissioner of public lands shall certify in writing that the oil and natural gas administration and revenue database can be migrated to the new platform, and the migration will not negatively impair their day-to-day operations or collection of revenue. The department of information technology will work with the three agencies on a detailed migration and testing plan that includes estimated costs for stabilizing the system. The plan shall be fully executed before migrating the system to the new platform. On completion of the stabilization of the existing system, the ONGARD service center, with approval of the three agencies, shall develop a five-year action plan that includes including distinct phases and estimated costs for the replacement system and shall jointly produce a request for proposals to commence the replacement of the oil and natural gas administration and revenue database. The appropriations are contingent on the ONGARD service center project manager providing timely monthly status and independent validation and verification reports to the governor, the department of finance and administration and the legislative finance committee on the platform migration and replacement system, and written verification from the three agencies that the need for the release of the appropriation exists. Two million dollars ($2,000,000) of the appropriation is from the lands maintenance fund. 8