I wonder how these maintenance costs compare to the costs of a typical IT setup? If it's actually cheaper, then it looks like a classic case of being stuck in a local minimum.
Excellent point: typewriters do not BSOD, are entirely impervious to malware, and demand only ribbon replacement plus occasional oiling (vs. the Wintel upgrade racket.)
Police cars in many major US cities have laptops in them, along with a private wireless network, allowing them to look up vehicle licenses, outstanding arrest warrants and so forth. While I'm sure this system does not work perfectly and incurs an IT overhead in addition to the installation cost, I imagine the police officers would prefer to keep using them.
If computers are good enough for police officers to use on the road, they are definitely good enough to be used inside the station. When you get down to it, the requirements are not so very different from a specialized CRM system.
Also: Public records show that the city signed a $432,900 contract for typewriter maintenance with Afax Business Machines in 2008
For >$400k/year I think you could put together a very good IT maintenance team.