Just before Christmas Eve, the Office of Inspector General delivered a 73-page report (26 plus appendices) that had been requested by Mayor Michael Nutter on Oct. 26. The outgoing mayor made the formal request in a news conference the Monday after a Philadelphia Inquirer investigation into L&I’s practices found what appeared to be records falsification by department inspectors. The OIG report pins a large share of the failures of enforcement by the Department of Licenses and Inspections on its data management system, Hansen, which the report called inefficient and outdated.
Hansen, according to the report, is flawed; “Among a number of serious limitations (it) has hindered or made impossible the effective transfer of necessary data and information between L&I and other City departments, including the Philadelphia Fire Department and Law Department.”
But a review of Philadelphia’s public records from the past decade, as well as how this software is implemented elsewhere, call into question whether blaming Hansen really makes sense. This system isn’t only used in Philadelphia, and it works best when it’s updated regularly. So what is this software system, what other cities use it, and — crucially — is Philly using it correctly?
Demolition oversight is complex and time-sensitive, as the OIG notes repeatedly throughout its report. The Inspector General blamed what the Inquirer had labeled apparent fraud on cumbersome software that long outlived its usefulness and “misunderstanding and misapplication” by L&I inspectors using it.
The OIG interviewed inspectors, and found that different supervisors gave inconsistent instructions on the meanings of “passed” and “waived,” for example. The report also found that measures taken to fix failings that led to the Market Street collapse in summer 2013 were undercut by glitches from “apparent” reprogramming to fit the new inspection process.
The software, not the boy band
L&I contracted with Hansen Information Technologies, Sacramento, Calif., in 2003 to provide a $3 million system to streamline licensing and record-keeping. Philadelphia had already been using the system for records management in other departments.
Hansen is an asset-tracking program that uses a database to make a large-scale customer service operation with enforcement powers — a government — less labor-intensive, as well as less prone to human error. Users enter data, such as a record of a paid permit fee, into the database where the system tags that information and links it with other relevant data. The idea is that software automates the inventory of ongoing services, debts, and expenditures, and also catches discrepancies people would otherwise miss.
Infor, a young global data management firm that outcropped from a venture capital group in southern California, bought the company from CEO and founder Chuck Hansen for $100 million in 2007. (The URL for Hansen IT, LLC, hansen.com, now takes you to Chuck Hansen’s personal Facebook page.)
Infor still markets the Hansen product line widely — it has remained one of the most prolific such tools on the market since the acquisition, though it does not appear that Philly entered into a license agreement or ever made a payment to the new owner of the technology. The latest version of the software is Hansen 10x. Other cities use Hansen — it’s received at least fair customer satisfaction even in notoriously critical Boston, which uses Hansen 8 Citizen. Hansen 8 seems to be the most widely deployed version among municipalities, from Anchorage to Australia, to Beverly Hills, which is not known for being lax about licenses and permitting.
Lessons from Boston
There may be lessons for Philly in how Boston is using Hansen. There, city officials spent time implementing the software alongside its legacy systems through trial and error, with residents, officials, and developers working out the bugs, and making sure old systems and the new system got along. Hansen is just a component of Boston’s Lagan System for Constituent Services, a sort of experiment in unified, citizen-engaged municipal services, pioneered by former Mayor Tom Menino through his Office of New Urban Mechanics (which Nutter has tried to mimic).
In Beantown, data about permits through Hansen meets information from the police department, as well as from sources like smart phones using mobile parking applications, to create a holistic picture for officials managing city resources.
Boston and Philadelphia even use the same IBM product for asset management, Maximo, which is why it’s hard to blame this problem on the software.
It’s ironic, in a way, that the city’s Office of Inspector General derided its Hansen system for being outdated, since the city last paid for an update 9 years ago. Like many programs — imagine running decade-old software! — it’s also very limited in its capabilities if it’s not updated regularly, and Philadelphia has not reported writing a check to Hansen since 2006.
And at least one department has known Hansen to be a potential problem for its lack of compatibility with other systems, for longer than Nutter has been mayor.
The same basic bullet points from the December 2015 report were presaged in Controller Alan Butkovitz’s 2006 audit of L&I’s enforcement practices – except that Butkovitz also found that while Hansen “captured and generated information consistent with a point of sale system…management did not use this information as a basis for ascertaining the accuracy” of L&I’s financial records.
In 2009, the Controller found the situation had not improved. L&I relied on Hansen to automatically notify them of urgent issues even after it failed to do so.
The future: eCLIPSE-ing Hansen
The city plans to correct the problem by buying a new system — the POSSE Land Management and Licensing System, from a provider called Computronix — and giving it its own name: The electronic Commercial Licensing, Inspection and Permit Services Enterprise Project, or eCLIPSE.
Mayor Nutter announced eCLIPSE in January 2014, but PhillyStat, the Managing Director’s Office annual progress report, noted measures taken toward moving to eCLIPSE in 2012, 2013, and 2014, during which time the city designed the program and sought providers to suit it.
Project IT director Linda Hanscom told City Council last April: “With the implementation of eCLIPSE, we’ll have robust reporting capabilities. We’ll have all private, all public data available.”
David Perri, who will take the helm at L&I in Jim Kenney’s administration, told Billy Penn earlier this month that he was not personally familiar with Hansen, having left the department just before it was implemented, but he touts the potential benefits of eCLIPSE.
“The new system will allow us greater flexibility to program new options when we need to — because codes and requirements are updated all the time,” he said of the system, which is expected to be running by the end of 2016. “You’ll be able to pay your licenses online, get billed online, eventually be able to submit building plans online, get your approvals that way.”
Danya Henninger contributed to this report.