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Agency of Digital Services says storage demand and billing timing are driving SLA increases
Summary
At a Jan. 24 Senate Appropriations Committee hearing, Agency of Digital Services officials told lawmakers that rising SharePoint storage demand — including body-camera video — and the timing of SLA billing are driving increases in internal service fund charges to state agencies and may be behind recent budget adjustment requests.
The Vermont Senate Appropriations Committee on Jan. 24 heard from the Agency of Digital Services (ADS) about rising costs billed through ADS service-level agreements (SLAs) and the challenges the agency faces aligning those bills with agencies' budget calendars.
ADS Chief Financial Officer Kate Slocum told the committee that ADS recovers most of its costs through internal service funds and a demand-side SLA that bills executive-branch agencies — and in some cases the legislative and judicial branches — for enterprise services such as hosting, document management and identity software. "That rate structure has not changed since the creation of our agency ... those rates were developed in 2017, and it is 2024," Slocum said, describing pressure on ADS finances from unchanged hourly recovery rates.
The nut of the committee's discussion was that recent budget adjustment act (BAA) requests from several agencies appear to reflect higher SLA charges. ADS identified one prominent driver as higher-than-expected SharePoint storage consumption by some offices — specifically citing state's attorneys and sheriffs — driven in part by large files such as body-camera video. ADS said it has purchased additional SharePoint capacity to meet that immediate need and is piloting alternate storage approaches with the Department of Public Safety.
Slocum outlined ADS's recovery methods: an allocation charged on a per-employee basis to cover core backbone services; hourly rates for professional IT state services (two rates in current use: $84 and $88 per hour, depending on classification); telephony charges; bespoke purchases passed through at cost; and the SLA for enterprise licenses and hosting. She said the two hourly rates have been unchanged since 2017 and that ADS has achieved "a few million dollars annually in savings" for the executive branch through centralized purchasing.
Committee members pressed ADS on timing and transparency. Slocum explained that typical SLA billing is annual and reflects the prior fiscal year's costs and consumption; ADS takes a snapshot of utilization (around May) and issues bills later that year based on prior-year expenditures and consumption. She said that timing sometimes leaves agencies without finalized SLA figures during their budget builds. For one recent, high-impact SharePoint case, ADS said it moved to monthly billing so agencies would not be overbilled if consumption fell.
Slocum also told the committee ADS is in the early design phase of a new enterprise resource planning (ERP) system that ADS and finance officials expect will provide more timely and granular data to support dynamic projections and reduce mismatches between billed costs and agency budgets.
A senator on the committee said members would request a detailed accounting from Commissioner Gresham to reconcile the BAA requests with ADS billing. Slocum and ADS Deputy Secretary Andrea (introduced only by first name in the hearing) offered to supply more detailed invoices and said they are working with agencies, including the attorney general's office, to identify better storage solutions and to improve communication.
No formal committee vote occurred during the ADS presentation. The exchange ended with ADS offering to provide supporting documentation and the committee indicating it would follow up with agencies that submitted BAA requests to reconcile the requested adjustments with recent SLA bills.
