COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Assessor-County Clerk-Recorder

DATE:

February 13, 2004

BOARD MEETING DATE:

February 24, 2004

TO:

Honorable Board of Supervisors

FROM:

Warren Slocum, Assessor-County Clerk-Recorder

SUBJECT:

Third Amendment Agreements with Election Systems & Software, Inc. (ES&S)

RECOMMENDATION:

Adopt a resolution authorizing the President of the Board of Supervisors to execute third amendments to two agreements with Election Systems & Software, Inc.:

(1)

amending the July 28, 1992 agreement for vote tabulation system licensing and maintenance, for the period January 1, 2004 through December 31, 2009, for not to exceed $255,528 annually; and

(2)

amending the March 29, 1994 agreement for voter registration system licensing, support, and software upgrade, for the period January 1, 2004 through December 31, 2009, for not to exceed $131,800 annually.

BACKGROUND:

We lease-purchased our voting system from Business Records Corporation (BRC) (Reso. 56360) in 1992. In 1994 (Reso. 58096), we installed a BRC voter registration system. Both original contracts included licensing and support and were for six years. In 1997, BRC's Election Division was acquired by American Information Systems, Inc., from which arose the new and current entity, Election Systems & Software, Inc (ES&S).

The First Amendments (Reso. 60972, 4/22/97) extended each by two years, and adjusted fees. The Second Amendments (Reso. 63092, 9/28/99) accepted the assignments to ES&S, extended terms through December 31, 2003, adjusted fees, and confirmed our hardware ownership as of July 1, 2002. Those concurrent agreements with ES&S expired in December 2003. These Third Amendments will extend licensing and support for six years, through 2009.

Our current voting system uses an electronically scanned paper ballot that is hand-marked by the voter. Since November 1992, we have successfully conducted over 44 consolidated elections on that system. Because it yields a verifiable audit trail of election results, voter confidence has remained strong. Our current voter registration system supports all voter registration functions and it also manages precinct operations, poll worker placement, and all other election support functions, such as processing absentee ballot requests. The system has met our requirements and contributed to our overall success in election administration.

DISCUSSION:

Since our contract with ES&S was set to expire in December 2003, we began reviewing voting and voter registration system options in late 2002, initially favoring a touch-screen voting system to replace our current system. Increasing debate about the reliability of touch screen voting systems, the requirement for a voter verifiable paper trail, and vote counting irregularities and problems in other counties across America persuaded us to continue with our current voting system.

After that decision was made, we had two alternatives for continued support of our voting system. We could either extend the current support agreement with ES&S or change to Sequoia Systems, the only other qualified vendor for our system. We concluded that County's best interests would be served by remaining with ES&S, because of lower cost and track record of high quality support.

As for continued support of our voter registration system, our alternatives were either to extend with ES&S, to upgrade with ES&S, or to change vendors. After looking at systems and services available from Diebold, Sequoia, and ES&S, we decided that County's best interests would be served by remaining with ES&S and installing a system upgrade: ES&S' "national voter registration platform."

Months of negotiations with ES&S, interrupted by the October and November elections, arrived at a fair price offer from ES&S in December-much later than expected.

The recommended agreements provide for six-year terms- including a "no penalty" cancellation clause-at $387,328 per year. This fee reflects a combined net increase from previous rate of $344,844: $5,316 less for the voting system and $47,800 more for the upgraded voter registration system (mainly due to labor costs for an on-site project manager to implement the upgrade).

It is possible, but not certain that we will change to a new system within the six-year term. State standards for voting system certification are currently incomplete and in a state of flux, as is the product market. At this time, no system has been granted certification. Therefore, it is difficult to predict a specific direction for future system acquisition or modification at this time.

In any case, existing federal law requires us to provide at least one handicapped-accessible voting device in each polling place by 2006. If we choose a touch screen voting system for that purpose, ES&S could very well be our choice, to ensure full integration with existing vote counting software to reduce complexity and help ensure quality elections.

We believe it best to extend our agreements for the current systems that have proven their accuracy and reliability.

County Counsel and Information Services have reviewed and approved these agreements.

VISION ALIGNMENT:

These agreements maximize election integrity and increase public trust and satisfaction, thus serving County's commitments to "responsive, effective and collaborative government" and to "realize the potential of our diverse population [through] civic engagement."

FISCAL IMPACT:

Appropriations will be included in the FY 2004-05 budget.