Board authorizes release of half of IT reserves after months‑long data‑center consolidation debate

The Budget and Finance subcommittee on April 1 authorized the partial release of approximately $6.39 million in IT reserves to fund a multi‑year effort to consolidate and virtualize San Francisco’s data centers, while holding the remaining funds until departments return with concrete savings plans.

John Walton, acting chief information officer at the Department of Technology, described a city plan that combines virtualization, consolidation into shared facilities (including a site at the airport and space at 200 Paul Street), and pooled departmental staffing. Walton said the approach aims to improve disaster readiness and reduce energy use while generating savings over several years after initial capital investments.

The budget analyst reported COIT projects net savings of about $308,739 in fiscal 2011–12 and larger savings in subsequent years but warned short‑term savings are uncertain. The controller and the mayor’s budget office agreed that some gains will be “avoided costs” and that staffing and equipment savings will need to be managed through department budgets during the normal budget process.

Supervisors pressed for clearer, near‑term metrics. Supervisor Jane Kim said she was reluctant to release the full amount without firmer evidence of achievable savings; President Carmen Chu said the reserves were intended to motivate consolidation but acknowledged the pace had been slower than hoped. Several supervisors asked for a written status report and more detailed cost‑savings plans tied to the upcoming budget cycle.

After extended debate, Supervisor Mercarimi moved to release half of the IT reserves immediately and hold the remainder pending follow‑up reporting; the committee approved the motion in roll call (Mercarimi: aye; Kim: aye; Chu: no). The budget analyst had recommended six‑month status reports, with the first due 2011‑06‑01, and the committee required departments to return with more specific IT reduction proposals and a COIT status update.

The committee’s action allows departments to use part of the reserve to maintain operations and proceed with consolidation steps while preserving leverage to demand clearer savings plans and timelines. The committee also directed that future reports break out project costs, the timeline for the airport facility, transfers of equipment and positions, and any unachieved savings with explanations.

The subcommittee recorded that not releasing the full reserve could compel departments to seek rapid savings or make cuts in other areas; members asked DT and the mayor’s budget office to identify short‑term savings opportunities (master lease contracts, telecom consolidation, and procurement) and to return with concrete proposals as part of the budget submittal.