TOPEKA — Information technology staff in the Kansas Department of Revenue warned their boss in a private meeting that promises by agency officials to unveil in early January the long-delayed computer system for issuing driver's licenses were ludicrous and certain to result in public humiliation.

A covert recording of that November closed-door meeting between Secretary Sam Williams and dozens of IT employees in a downtown Topeka office building, obtained by The Topeka Capital-Journal, drifted far beyond perils of lurching ahead with a dysfunctional licensing system for 2 million Kansans. It touched on raw political, financial and technological controversy percolating through the revenue department.

The confidential discussion with department staff facing loss of their jobs through outsourcing was significant given the reluctance of many to speak out because of fear of retribution by their supervisors.

"I had a very lively conversation back and forth with several of the individuals there," Williams said in an interview.

Still, the Cabinet secretary chose to ignore skeptics on his IT staff and stuck by the Jan. 3 launch target for KanLicense, the rebranded name of a bedeviled project originally scheduled for completion six years ago.

Ahead of the planned kickoff, Williams permitted agency employees to proclaim all was well. But that deadline passed without activation of the online system. The months of February, March, April and May slipped away without a breakthrough for the troubled project.

Millions of dollars have been spent, but the new license program is still on the shelf. The Kansas Legislature's auditors again sounded alarms last week about integrity of the system under development. Revenue officials confirmed there was no deadline for implementation, but Williams vowed the rollout wouldn't mirror implementation of the agency's revamped vehicle title and registration system in 2012. County offices were crippled by computer delays. Lines of customers streamed out the doors. It was a public relations nightmare for the state.

"It was a disaster. Counties shut down," Williams said.

Williams' wrangling with the new licensing system, fear of layoffs and controversy about plans for widespread outsourcing at the revenue department prompted disclosure of the secretary's private communication with employees. In that conversation, Williams talked about potential problems with software endorsed by Gov. Jeff Colyer and allegations the Republican administration of Gov. Sam Brownback wasted millions of tax dollars on a computer network.

He shared during that closed meeting, and in a subsequent interview, perspectives on years of starvation budgeting at the revenue department, responsibility for development of an online portal for delinquent taxpayers and willingness to make deals transferring state government work to overseas contractors.

It was legal for participants in the revenue department staff meeting to record their interaction with Williams because Kansas is a "one-party consent state," said Max Kautsch, a Lawrence attorney affiliated with the Kansas Press Association.

 

The PayIt gamble

In March, Williams joined other Colyer administration officials in placing an optimistic spin on introduction of an online system for renewing vehicle registrations in Kansas. At a Statehouse news conference, the governor said it was the first phase of a technology revolution that would streamline government by placing routine transactions in easy reach of anyone with a computer, cellphone or tablet. The renewal system developed by PayIt promised convenient transactions.

"We live in a time when technology is involved in almost every single aspect of our life," Williams said. "This is just the beginning."

However, the secretary embraced concerns of revenue department IT staff at the meeting in November that privacy could be compromised if people installed PayIt or comparable software on their phones. An unidentified revenue department employee told Williams during the meeting that he wouldn't install anything on his phone connected to the agency.

"You raise good points. The privacy issues — they're all going to be dealt with," Williams told his staff. "I agree with you 100 percent. I don't want the state of Kansas to know where I am every minute."

Williams, a former finance officer at a Wichita advertising firm who was appointed the agency's secretary by Brownback less than two years ago, said during a wide-ranging interview with reporters in May that he had only heard "legends" about the state racking up huge expenditures during 2013 in an aborted attempt to create an in-house IT infrastructure system called GovCloud.

An estimated $17 million was expended before the project was put on ice. At least $10 million in computer equipment bought by the state for this purpose, but not used, was stashed in the Docking State Office Building.

In that private meeting with revenue department IT employees, Williams said the GovCloud project during the Brownback administration reeked of incompetence.

"That sucks. That's stupid," Williams said. "I have no idea why that happened, but I didn't have anything to do with that."

 

'All about money'

In response to questioning by a revenue department IT staff member at the closed gathering, Williams said the agency wouldn't be getting rid of employees when it modernized the process of processing paper tax returns under a contract with US Bank. It is possible, he said, for those workers to transfer to vacancies within state government.

One of the unidentified employees at the meeting said the processing could be performed internally for a fraction of the cost of hiring an outside company, but Williams rejected that theory.

"The numbers you gave at — they're not right," Williams said. "We're not replacing people here. What we're doing is automating the process."

A memo produced by the Department of Revenue, released last week, said "KDOR will make every effort to place the 30-35 full-time employees in comparable jobs in other areas of the agency" as the US Bank arrangement takes hold. It is presumed about 30 seasonal tax form processing jobs will be deleted.

Williams emphasized in the interview and staff meeting the damage caused by lack of state resources for upgrading technology in the revenue department. In part, he said, it was a consequence of decisions during the Brownback administration to slash income taxes, which contributed to massive budget shortfalls. The lone option at this late stage, Williams said, was to make deals with private businesses capable of delivering basic services the agency wouldn't be able to afford to develop on its own.

"We are under-invested in every area that are core competencies," Williams told employees at the closed meeting. "I'm not going to apologize for what we're doing."

Williams later told reporters that outsourcing duties handled by state employees would free up cash to offer more competitive salaries to remaining staff.

"We have a wonderful opportunity to improve our ability to compete for talent. It's one of our bigger challenges," the secretary said.

In the private conversation with revenue staff, Williams put it more bluntly: "So, is this all about money? Hell, everything today in the world is about money."

 

CGI's track record

Williams said he was comfortable with CGI Technologies, the contractor taking on software development duties from about 50 revenue department employees in August. In response to a question, Willaims said a portion of work outsourced to CGI has been completed in India.

"Are we supposed to allow work to be done outside the U.S.?" a revenue department IT employee asked Williams during that meeting. "We'd like to talk about it, but are concerned about being labeled as troublemakers."

"You can trust me," Williams said. "I wouldn't treat anybody that way."

"We've seen people escorted out," a staff member replied.

Potential reduction of the revenue department's IT staff wasn't disclosed by the agency until conclusion of the 2018 legislative session. Lawmakers raised questions about whether the announcement was delayed until the Legislature couldn't be in Topeka to intervene.

"If I were them, I would be making comments like that too," Williams told reporters. "I'm not surprised by the comments."

A point of contention during Williams' private session with staff was CGI's performance in developing the revenue department's secure portal allowing Kansas businesses or individuals to make arrangements online to pay back taxes. Williams said in an interview that collaboration by CGI and revenue department employees produced an "incredibly successful" portal. It generated $15 million in new revenue in 10 months of operation, a spokeswoman said.

"We're the ones that got the portal working," a revenue department employee insisted during the private meeting with Williams. "That was not the contractor."

In that same gathering, Williams vowed not to let CGI fail in Kansas. Under two contracts the department signed with CGI in 2017 and 2018, Kansas agreed to pay the company as much as $100 million during the next decade. Williams didn't express anxiety about CGI's botched rollout of the federal health care website in 2013 nor instances when other states terminated the company's contracts because of profound problems.

"We aren't going to have that happen," the secretary told employees. "That won't happen in Kansas."

 

The change agent

Williams said he wasn't concerned about broad reaction of Kansans to his modernization initiatives at the agency. The bottom line, he said, was making personnel and contracting decisions capable of pleasing one person at a time — Brownback, in the past, and Colyer now.

"The decisions I make — the negotiation whether that was a good decision or a bad decision — is going to be between me and my boss. Not between me and the public, because I wasn't elected. I was appointed," Williams said.

He confided that he was warned the job of revenue secretary wouldn't be easy.

"I'm a change agent. Always have been," Williams said. "I was told when I came here that I had a big job to do. There were issues. This was the opportunity and it needed to be done so the taxpayers of Kansas are getting the greatest value for the resources that are being applied."