According to an investigation, the city of Austin’s Communication and Technology Management Department wasted $95,000 of taxpayer money renting a data center it did not use for months. On December 29, 2017, CTM signed a contract with the selected vendor. The contract was in the form of a lease agreement, and was for 63 months, beginning with a 90-day rent-free grace period. Thereafter, the City would pay a monthly charge of at least $10,150. The rent payment had also gone up to $15,350 per month starting in April 2019. Due to the delay and increased rent, the City incurred a cost of roughly $95,000 in rental payments before moving in its data and servers.
8 months of wasted rent
Chief Investigator Brian Malloy said,
“The problem here is that this is the same concern they knew about the whole time and chose not to act on it. When it was finally time to move, they decided to act on it. That led to eight months of wasted rent.”
The city has paid the company a total of $242,985 since July 2018, according to city financial records. Communication and Technology Management leaders said the lease contract and subsequent contracts were aggressively negotiated, leading to an overall savings of at least $500,000 over the lease’s lifetime.