Shortly after he was appointed, McFarland began shaking up the IS department. In his two-year tenure, he says, he has turned over 66 per cent of the staff. He assembled a new team of direct reports, recruiting Jones and others from the private sector. "Working for a city government is usually a very secure environment to work in," Jones says. "It's job security. Now all of a sudden since Dan came on board, it's just the opposite. We're doing massive amounts of change, bringing on new skills sets . . . " Next, McFarland prepared a strategic plan by analysing the findings from several assessments of the city's technology written by consultancies. His recommendation? Tear it down and start from scratch. He ultimately decided on a voice-over-IP package proposed by Southwestern Bell (SBC). Voice over IP blends conventional Internet and phone communications (voice and data) into one network and will allow city employees to use a variety of new communications applications. For example, employees can combine voice mail, e-mail and faxes into a single message.

A year ago, McFarland persuaded the City Council to approve a five-year, $US33 million contract with South-western Bell. (He won over city councillors by arguing that voice over IP could be implemented within a two-year period and within his existing budget through savings achieved by eliminating ongoing maintenance contracts, circuit costs and other equipment purchases.) Now in its early stages, the project will entail replacing the existing city government computer and phone networks with one integrated voice-and-data pipeline. The entire city government complex will be rewired with approximately 1.2 million metres of new cable. The network will serve 8000 city employees at 281 city-wide sites linked through core sites including city hall, the main police department, the library, the convention centre and the city's communications complex.

Voice-over-IP technology is still in the early stages of development, and widespread adoption has been slow because of latency and reliability hurdles. To date, it has not been implemented in a project of this size and scale. But McFarland believes the technology is rapidly improving. Besides, he argues, the risk to the city is minimal because it has so little to lose. "Our foundation is failing, our voice network is totally inadequate, and our data networks are not meeting our needs. So, what is our risk? The risks of not doing it are far greater."

In addition to the voice-over-IP infrastructure, McFarland's master plan includes:

Open-system servers and commercial software.

6000 new standardised PCs for all city employees.

A city-wide employee intranet.

E-government functionality on the city's Web site for transactions such as parking tickets and building permits.

A new $US4.8 million 911 and 311 system and a $US9 million customer-request management system for 311.

Implementing a $US10 million, three-year initiative to install new mobile data terminals in law enforcement and emergency vehicles.

A new $US11 million automated human resources payroll system.

All this is slated to roll out, in phases, in the next six to 24 months. To accomplish this plan, McFarland will have to make creative use of his annual budget. His fiscal year 2001-2002 budget comprises approximately $US46 million for operating expenses, $US25 million for vendor contracts and $US24 million for capital projects. Also on McFarland's wish list is a new 800MHz radio system, which would cost $US30 million to $US50 million and would probably have to be funded through a special bond proposal.