PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.:
5C
ACTION ITEM
Date of Meeting:
March 1, 2011
DATE:
February 22, 2011
TO:
Tay Yoshitani, Chief Executive Officer
FROM:
Joe McWilliams, Managing Director Real Estate Division
James Schone, Director Aviation Business Development
Krista Sadler, Manager ICT Program Office
SUBJECT:
PROPworks Upgrade – CIP #C800328
Amount of This Request:
$450,000
Source of Funds:
State and Local Taxes Paid:
$0
Total Project Cost:
$450,000
ACTION REQUESTED:
Request authorization for the Chief Executive Officer to approve all work and contracts
including executing and amending any and all necessary contracts and service directives for the
PROPworks Upgrade Project in an amount not to exceed $450,000.
SYNOPSIS:
PROPworks is a property management system used by the Aviation, Seaport and Real Estate
divisions to manage approximately 800 leases across all three divisions. $387 million in revenue
is calculated by PROPworks and sent to PeopleSoft for invoicing each year. This system, last
updated in 2005, has several components no longer supported by the vendor and is not Payment
Credit Industry (PCI) compliant. In 2010, the State Auditor’s Office (SOA) Performance Audit
confirmed that the current Propworks implementation for Real Estate and Seaport does not
support the effective management of Port of Seattle properties.
This project includes the software upgrade to the current PROPworks version and the technical
infrastructure upgrade that will ensure reliability and compatibility with PCI requirements. A
competition waiver will be submitted for implementation services from AirIT, the product
vendor. Project costs are estimated to be $450,000. This project was included in the 2011 capital
budget and plan of finance as a business plan prospective project within CIP #C800328,
PROPworks Upgrade.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
February 22, 2010
Page 2 of 5
BACKGROUND:
PROPworks is a property management system used by the Aviation, Seaport and Real Estate
divisions to manage approximately 800 leases across all three divisions. The PROPworks system
provides tools for lease management, space management and billing of rent and utilities for both
tenants and concessioners. $387 million in revenue is calculated by PROPworks and sent to
PeopleSoft for invoicing each year. Real Estate anticipates a significant increase in leases to
accommodate the Eastside Rail Corridor acquisition.
In the 2010 SOA Audit on Real Estate performance, the auditor documented the following
observations relating to the property management system.
The existing property management system used by Real Estate does not support effective
property management practices and should be revamped or replaced
Poor system configuration requires manual work-arounds and customized reporting, and
doesn’t support common operational practices
All aspects of lease management cannot be effectively tracked
PROPworks was implemented in 2002 and last updated in 2005. Due to software limitations the
underlying technology was not upgraded at that time and now security patches required for PCI
compliance are not available. This must be remedied to avoid banking sanctions. The latest
software version includes new business functionality as well as the opportunity to upgrade the
infrastructure to our hardware environment standards.
PROJECT JUSTIFICATION:
There are two critical issues with the current system.
The underlying technology is no longer vendor supported and does not conform to PCI
requirements, exposing the Port to security risks, fines, additional maintenance costs, and
potentially a restriction on the Port’s ability to process credit card payments
The current configuration does not meet the business needs of the Real Estate and
Seaport Divisions to effectively manage properties
PROJECT STATEMENT AND OBJECTIVES:
Project Statement:
Upgrade PROPworks to the latest version, migrate from an Oracle to Microsoft platform and
configure new and unused functionality to better leverage the product.
Project Objectives:
Ensure system reliability and PCI compliance
Utilize the same system across all Port Divisions allowing for cross-training, resource
flexibility, and consistent practices
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
February 22, 2010
Page 3 of 5
Leverage new application features such as risk management tools, automatic reminders
and Consumer Price Index adjustments
Improve productivity with a system configured to support operations and best practices
Manage vacant properties with the implementation of the PROPworks Space
Management module for Real Estate and Seaport
PROJECT SCOPE OF WORK AND SCHEDULE:
Scope of Work:
Upgrade the PROPworks software from 5.3 to 7.0
Migrate the Oracle database to Microsoft SQL Server
Configure to leverage new functionality for Aviation and Real Estate/Seaport
Implement the Space Planning Module for Real Estate and Seaport
Re-implement Real Estate and Seaport business rules to better fit business process
Deploy in the ICT standard, virtual infrastructure
Replace Cold Fusion reports with PROPworks ad-hoc reporting tool and Microsoft
Reporting Services
Schedule:
Commission Approval
March 2011
Aviation Complete
October 2011
Real Estate/Seaport Complete
June 2012
Project Completion
July 2012
FINANCIAL IMPLICATIONS:
Budget/Authorization Summary:
Original Budget
$450,000
Budget Increase
-
Revised Budget
-
Previous Authorizations this CIP
$0
Current request for authorization
$450,000
Total Authorizations, including this request
$450,000
Remaining budget to be authorized
$0
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
February 22, 2010
Page 4 of 5
Project Cost Breakdown:
Hardware and Software Licenses
$0
Vendor Implementation Services
$165,000
Port of Seattle Labor and Contractors
$227,000
Sales Tax
$0
Contingency ~ 15%
$58,000
Total
$450,000
Budget Status and Source of Funds:
Project costs are estimated to be $450,000. This project was included in the 2010 capital budget
and plan of finance as a business plan prospective project within CIP #C800328, PROPworks
Upgrade. The source of funds is 64% Airport Development Fund and 36% General Fund.
Financial Analysis and Summary:
CIP Category
Renewal/Enhancement
Project Type
Technology
Risk adjusted Discount rate
7.0%
Key risk factors
NA
Project cost for analysis
$450,000
Business Unit (BU)
Real Estate, Seaport, Aviation
Effect on business performance
NA
IRR/NPV
NA
CPE Impact
NA
Lifecycle Cost and Savings:
This project is required to ensure availability of effective property management software. There
are no significant savings from the completion of this project and annual maintenance costs are
not expected to change.
ECONOMIC IMPACTS AND BUSINESS PLAN OBJECTIVES:
Proceeding with this project ensures that our property management system continues to operate
reliably and the Port avoids costly banking sanctions for PCI non-compliance that may include
fines and a restriction on credit card transactions.
STRATEGIC OBJECTIVES:
This project supports the Port’s strategic objective of being a “high performance organization”
by ensuring the availability of a critical system to effectively support the property management
functions of Aviation, Real Estate, and Seaport.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
February 22, 2010
Page 5 of 5
ALTERNATIVES CONSIDERED AND THEIR IMPLICATIONS:
1. Upgrade PROPworks System: The upgrade of the PROPworks System will ensure the
continued system availability for Aviation, Real Estate, and Seaport; resolve issues with
PCI requirements; and better support Real Estate and Seaport operations. This is the
recommended alternative.
2. Procure a different property management system for Real Estate and Seaport: The
estimated cost to replace PROPworks for Real Estate and Seaport while at the same time
upgrading PROPworks for Aviation was significantly greater than the cost of continuing
with PROPworks for all divisions. Additionally, there are benefits to having a common
property management system utilized across the Port. This is not the recommended
alternative.
3. Do Nothing at this time: The reliability and security risks of doing nothing are significant
and because of the PCI deficiencies, this alternative would impact our ability to process
credit card transactions through other systems at the Port. Real Estate and Seaport would
continue to operate with a system that does not support their business needs. This is not
the recommended alternative.
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:
None
PREVIOUS COMMISSION ACTION OR BRIEFING:
No previous Commission actions or briefings for CIP #C800328, PROPworks Upgrade.