MEMORANDUM

TO: Gary Superman, Assembly President

Members of the Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Borough Mayor

Mark Fowler, Purchasing Officer

Scott Holt, Finance Director

FROM: Troy Tankersley, Sales Tax Division Manager

DATE: August 25, 2005

SUBJECT: Resolution 2005-080, Authorizing Award of Contract for the "Automated, Web Enabled, Digital Imaging, Fully Integrated Sales Tax System"

For the past three years, the Finance Department has been extensively researching the possibility of upgrading or replacing its current sales tax system with one that would provide technological and informational enhancements to the Borough.

In April 2005, the Kenai Peninsula Borough solicited proposals for an "Automated, Web Enabled, Digital Imaging, Fully Integrated Sales Tax System."

The objective of the solicitation was to acquire a Sales Tax System that provides its users with web filing capabilities and digital imaging (to reduce paper flow), and empowers its users with enhanced analytical tools and report writing capabilities.

The Borough received one proposal from Tata Infotech, Ltd. After a thorough review of the proposal, Tata Infotech, Ltd. was invited to provide an on-site demonstration of its product (Tax Mantra). It has been determined that Tata Infotech, Ltd. meets the needs of the Borough.

The Borough's current Sales Tax System is more than 20 years old and well beyond its expected useful and productive life cycle. The current sales tax system is not capable of supporting the ever-challenging pace of technological upgrades or the increased need for information.

The maturity of third-party software solutions is at a point where software vendors can offer cost-effective and functionality flexible solutions to the marketplace, allowing the Borough to move away from the highly proprietary Unisys hardware and software platforms and into the new industry standard "vanilla" or COTS (Commercial Off The Shelf) hardware and software solutions. The purchase of the Tata Infotech, Ltd. "Tax Mantra" integrated solution will allow the Borough to comply with the administrative directive of migrating away from the mainframe, and replacing one of our in-house developed and maintained applications with a single third-party integrated software solution.

Therefore, it is the recommendation of the Finance Department to enter into a contract with TaTa Infotech, LTD, for the purchase of software and implementation services in the not-to-exceed amount of $825,000.

Sufficient funds have been budgeted and are available in account numbers 705.18420 and 407.19015.05STX.