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HomeMy WebLinkAboutAgenda Statement 1985/03/19 Item 16 COUNCIL AGENDA STATEMENT Item 16 Meeting Date 3/19/85 ITEM TITLE: Resolution //f‘e2 Awarding contract and appropriating funds for purchase of NEAX 2400 telecommunications system SUBMITTED BY: Sid Morris, Principal Administrative Analyst T,re/ r° REVIEWED BY: City Manager, (4/5ths Vote: Yes x No ) At its December 18, 1984, meeting, the City Council authorized staff to enter into final negotiations with Telecom Plus of California regarding final system configuration and purchase price for a NEAX 2400 Telephone Switch and associated equipment options. All negotiations with Telecom Plus have been completed. The following report summarizes the proposed final sales and maintenance contracts agreed to by City staff and Telecom Plus of California. (A complete copy of each agreement is attached). Telecom Plus representative, Mr. Joe Sharkey, Director of Major Systems Engineering, is available to respond to Council questions. RECOMMENDATION: That Council : 1 . Appropriate funds and award contract to Telecom Plus of California for the purchase of a NEAX 2400 Telecommunications System in the principal amount of approximately $279,000 including tax, freight, options, Pacific Bell Telephone reconnect charges and 4% contingency factor (contingency = $10,220) . 2. Appropriate funds and authorize staff to enter into a contractual agreement with Account-A-Call Corporation (a telephone service bureau) for the purchase of station message detail recording services for the management of the telephone system. Contract amount for one year including database setup, equipment purchase, tax, and equipment installation is approximately $6,110. 3. Appropriate funds and authorize staff to install , either through the use of the vendor, City forces, or selection of a private contractor through an informal bid process, conduit for telephone cable between the Police Department (i .e. , telephone switch location) and the Library. The vendor has estimated installation for two 4-inch conduits and additional wiring at approximately $13,300. 4. Authorize staff to pursue financing through the California Cities Financing Corporation. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. Page 2, Item 16 Meeting Date 3/19/85 DISCUSSION: In January 1985, City staff; the City's telephone consultant, Victory and Associates; and representatives of the vendor, Telecom Plus of California began negotiations for final agreements for the purchase and maintenance of the NEAX 2400 Telecommunications System. The attached agreements represent the results of this process. The following highlights major components of the sales/maintenance agreements as well as provides detail and justification supporting the purchase of various options in conjunction with the telecommunications system. SALES AGREEMENT Delivery and Installation: Estimated delivery and installation is 90 days after approval by City Council or approximately June 22, 1985. Warranty: The NEAX 2400 is guaranteed against defective parts and workmanship for a period of one year from the date of installation. After the first year the City has the option of maintaining the system in-house or through contract maintenance. Software changes: Chula Vista shall receive, free of charge, all software changes made to the NEAX 2400 within 30 days after system cutover. Documentation: Telecom Plus will provide the City with reproducible plans and other appropriate documentation showing system wiring throughout the City as well as indicating the class of service provided each working station line. Acceptance Testing: Upon installation, the phone system must pass a performance test to demonstrate that all components will function as advertised by the vendor. If the equipment fails to pass the performance test within 48 hours of installation, the City may demand the equipment be replaced at no additional charge. Additional long-term testing requirements have also been included in the sales agreement. Performance Bond: Telecom Plus shall furnish bonds covering faithful performance of the contract in the full amount of the sales price. Payment Schedule: The following schedule outlines receipt of payment by Telecom Plus at various stages of the telephone system installation. 1 . Approval of contract 10% of contract amount 2. Equipment delivery 25% of contract amount 3. Successful system cutover 40% of contract amount 4. System acceptance by the City Balance of contract amount (after all testing is completed) MAINTENANCE AGREEMENT First Year Maintenance: All maintenance for the first year of system operation shall be provided at no charge to the City. Page 3, Item 16 Meeting Date 3/19/85 Extended Maintenance: At the City's option, it may enter into 10 additional one year maintenance agreements with Telecom Plus of California. Maintenance costs for the first option year shall be $1 ,098 per month. Each subsequent option year shall be adjusted by the Consumer Price Index for the San Diego Standard Metropolitan Statistical Area not to exceed 6% per year. Service Response: Emergencies as defined in the contract shall be responded to within a maximum of two hours. Non-emergency response shall occur within 24 hours. Service Facility: Services facilities are to be located within the County of San Diego. Telecom Plus of California has agreed to comply with this requirement and is currently negotiating for maintenance facilities in San Diego County. Overall , staff is pleased with the final sales/maintenance agreements proposed for approval by the City Council . These agreements have been reviewed and are recommended by Victory & Associates and the City Attorney. SUMMARY OF SYSTEM AND OPTION COSTS The basic telephone system is comprised of the telephone switch, telephone instruments, and the various software station features and system features as described in previous agenda statements. In addition to the basic system, the following additional features have been reviewed and are recommended for purchase. BASIC SYSTEM COST - $241 ,525 Maintenance Administration Terminal (MAT): The MAT provides access to, and management of, system diagnostic and database software included in the telephone system and enables City staff to easily implement station/trunk changes, additions, or reassignments without necessitating an onsite visit by the vendor. This will become an important feature in the future if the City absorbs maintenance of the telephone system with in-house staff. MAT OPTION COST - $6,765 Battery Backup: Protects the system from outside power failure through utilization of a two-hour battery system. This is in addition to the generator that will also be used to provide power redundancy for the switch. The battery backup is recommended because the potential lag time between the beginning of a power failure and activation of the emergency generator could cause short-term failure of the telephone system. Telephone communications are restored only after system software is reloaded into the switch. Although this power redundancy is not critical for most City departments and in most instances software can be reloaded in a timely fashion, it is recommended by staff and the consultant to ensure ongoing internal communications for public safety operations. (Emergency 911 will continue to be provided by AT&T and thus, will not be affected by failure of power to this system) . Page 4, Item 16 Meeting Date 3/19/85 As additional information, it should be noted that existing basic system features will protect the telephone system from power surges, from the Generator or SDG&E, which can also cause power failure. BATTERY BACKUP OPTION COST: $6,785 Music on Hold: This option provides music to callers when they are placed on hold through installation of a commercial grade tuner. MUSIC OPTION COST: $495 TOTAL BASIC SYSTEM AND OPTIONS COST: $255,570 The above options have been reviewed and are recommended by staff and Victory and Associates. RELATED ISSUES As Council was informed at its December 18, 1984 meeting, when it authorized staff to enter into contract negotiations with Telecom Plus of California, staff would return with recommendations regarding unresolved issues related to telephone system management, off premise extensions and system financing. The following outlines the issues, and includes staff recommendations, with regard to these items. STATION MESSAGE RECORDING DETAIL (SMDR) In their Phase II report to the City Council , Victory and Associates indicated that "SMDR is an increasingly necessary feature for the management of a telecommunications system." The Phase II report further outlined the following options for City consideration in the purchase of a telecommunications system. Account-A-Call Remote Polling: This is a software service bureau, located in Huntington Beach and San Francisco that will remotely poll the City's telephone system through utilization of a software based pollable memory system that collects call data and transmits it to a mainframe computer for processing. Reports are processed on a monthly basis and contain the following information: 1 . Actual users names, cost center names, cost center numbers and extension numbers. Reports may also carry at the user's option: equipment inventory, job titles, mail stops, and location codes. 2. City and state of called numbers are identified as well as digits called. 3. Actual call length derived from total off-hook time and may be adjusted for accuracy of call pricing. 4. Time of day analysis expressed as total calls, dollars, trunk, or trunk groups. Presentations are alpha-numeric as well as graphical . Page 5, Item 16 Meeting Date 3/19/85 5. All calls including watts, foreign exchange lines, etc. are accurately priced according to actual tariffs (including mileage and time of day) allowing for extensive analysis, network management, and off hours circuit cost comparisons. 6. Eight exceptions reports are provided for the City's selected limits and parameters in order to highlight such things as abuse and/or misuse of the system. 7. Non-local calls placed on special circuits are priced and noted by exception. The only manipulation of reports required by City staff before distribution to the proper departments would be to separate the computer sheets provided by Account-A-Call. City staff has investigated the possibility of purchasing the "polling" software for use with the City's Burroughs mainframe but this request was denied by Account-A-Call . ACCOUNT-A-CALL INITIAL COST: $6,110 Teleprinter/Event Recorder: This SMDR system enables a teleprinter to be connected directly to the RS232 port on the City switch. The printer will record call details such as extension number, placing call , time of day and call duration, however, call cost would not be provided. TELEPRINTER ESTIMATED COST: $3,000 Stand Alone SMDR: The stand alone SMDR would be located in close proximity to the new telecommunications switch and is, in essence, a micro computer with a CRT, keyboard, and printer. Installation and initial setup would be provided by the vendor, Telecom Plus of California, and monthly reports similar to the Account-A-Call system reports would be generated by City employees assigned to this task. STAND ALONE ESTIMATED COST: $23,000 Staff agrees with Victory & Associates that proper management of the City's telephone system requires the acquisition of an SMDR system. The SMDR reports will not only guard against system abuse but will also provide necessary data analysis indicating when the addition of foreign exchange (long distance service) lines is cost effective in conjunction with the system's least cost routing network. Both of these data features should provide long term savings to the City. Of the three options, only Account-A-Call and the stand alone SMDR were considered viable alternatives. Probably the top and considered one of the few reliable, stand alone systems on the market today is the Astra 230 offered by Telecom Plus, the City's current vendor. On the market approximately 18 months, the Astra 230 provides basically the same data analysis and reports as Account-A-Call but is more labor intensive requiring City staff to request/run necessary reports, input data changes Page 6, Item 16 Meeting Date 3/19/85 regarding system configuration and obtain and input tariff/tax changes on a periodic basis. In comparison, Account-A-Call provides staff with a "hands free" management system requiring only distribution of reports to respective City departments. Cost of the stand alone SMDR is approximately $23,000 plus the cost of equipment maintenance, approximately $1 ,800/year, staff time and tariff update charges. In comparison Account-A-Call has initial start-up costs of approximately $6,110 and ongoing cost of approximately $4,000-$6,000 per year depending on the type and number of reports requested by the City. When looking at the two options from strictly a financial standpoint, there was no clear decision. Although, the stand alone would be approximately $2,000 more expensive assuming initial purchase, 100 staff hours per year and maintenance for a 10-year period. In further investigation of these two options, staff has found that stand alones are still evolving from an "infancy" development stage, as compared with the 14 year marketing of Account-A-Call , and are not yet considered cost effective in terms of required staff time and data input. This is critical when considering the recent volatile nature of telephone services and the need to change reports and output data regularly to reflect current market conditions, rate schedules, etc. Account-A-Call is staffed and has the software sophistication necessary to meet the changing data requirements of the telephone marketplace. In addition, it provides staff with the long-range versatility to convert to a stand alone system if they become more cost effective in the future. It is recommended that Council authorize staff to enter into a contractual arrangement with Account-A-Call for SMDR services. Both the City's consultant and the Management Services/Data Processing staff concur with this recommendation. OFF PREMISE EXTENSIONS The City Library has approximately 42 extensions proposed with the new phone system. Because these extensions are not wired directly through the system's switch, they are considered "off premise" extensions by Pacific Bell Telephone and thus, are subject to a higher rate schedule. An initial installation charge of approximately $2,700 will be charged by Pacific Bell for these extensions as well an ongoing charge of $18 per month per extension ($760 per month or $9,120 per year) . The alternative to absorbing the above ongoing cost is to install conduit between the Police Department (i .e. , telephone switch location) and the City Library. One 4-inch conduit can be installed as estimated by the vendor, for $7,000 (the vendor has quoted a price of $9,000 for two 4-inch conduits). In addition to the conduit cost, the City will be required to absorb approximately $4,300 in additional costs to wire the off premise extensions directly through the switch and thus avoid the cost of the ongoing Pacific Bell charges. These represent one time costs to the City in lieu of the on-going charges and potential rate increases from Pacific Bell . 0,\a Page 7, Item 16 Meeting Date 3/19/85 Cost Analysis of Library Off Premise Extensions Off-Premise Cost for Cost for Extension Cost Installation Installation of Price Category from PacBell of 4" Conduit two 4" Conduits Installation Cost $ 2,770 $11 ,300 $13,300 Yearly Cost After Installation 9,120 0 0 10 Year Cost Including Installation 93,970* 11 ,300** 13,300** *Potential future rate increases not included in this figure. **Includes $4,300 for wiring to the Library As the analysis indicates, installation of conduit to the Library can provide substantial long-term savings to the City as well as amortize the initial investment within approximately 12 to 18 months. Therefore, it is recommended that Council authorize staff to install two 4-inch conduits to the Library. Recommendation of two conduits is made based on sound management in anticipation of future cable television and data processing growth and the avoidance of retrenching City streets to lay additional conduit to meet this growth. Staff is investigating whether the conduit can be bored beneath the City street, thus eliminating the need for trenching as well as investigating whether conduit installation is more cost effective through the use of City crews, a private contractor or bid award to Telecom Plus. If a private contractor is considered more cost effective, it is recommended the Council authorize staff to use an informal bid process for the selection of the contractor. Award of contract to Telecom Plus may be more cost effective in the long term and avoid the problem of "pointing fingers" if there is a problem with the cable installation in the future. SYSTEM FINANCING The following information, provided by the Director of Finance, outlines how funding will be accomplished for the new telephone system. Funding for the acquisition of the phone system is proposed through the California Cities Financing Corporation (CCFC) Pool Financing Program. The CCFC exists to facilitate credit pooling among cities needing to finance relatively small projects. By pooling their financing needs, participating agencies will reduce costs by sharing fixed overhead such as bond counsel , underwriting, printing, and by taking advantage of "big project" interest rates in the municipal securities market. Each financing of the CCFC will include some type of credit enhancement such as insurance or letters of credit to guarantee against default by the corporation. This will assure the highest available credit rating which will in turn guarantee the lowest possible interest rate. Page 8, Item 16 Meeting Date 3/19/85 The initial financing by CCFC is in progress with approximately $10 million of certificates of participation to be issued in late April . The proceeds of the issue will be distributed to the participating cities sometime in early May. At this time, the City of Chula Vista is tentatively included in the CCFC financing in the amount of $300,000. It is recommended that the City Council appropriate funds for the total cost of the phone system. Depending on the speed with which the system is installed, the City may make up to three payments before it receives proceeds from the CCFC financing. These payments will be made from the General Fund Reserve and be reimbursed when the City receives financing proceeds. It is anticipated that the General Fund would be making only a short term advance of these funds. CONCLUSION In summary, it is staff's recommendation that Council : 1 . Appropriate funds and award contract for a new telecommunications system to Telecom Plus of California and appropriate necessary funds including option costs, reconnect charges, and 4% contingency. 2. Appropriate funds and authorize staff to enter into a contractual arrangement with Account-A-Call Corporation for SMDR services. 3. Appropriate funds and authorize installation of two 4-inch conduits including wiring costs between the Police Department and City Library 4. Authorize staff to pursue financing through the California Cities Financing Corporation and direct staff to return at a future date with the appropriate financing agreements including lease and trustee agreements. FISCAL IMPACT: Acceptance of this report by the City Council requires appropriation of $298,410 from the unappropriated balance of the City's General Fund Reserve. WPC 0718D �♦y �YUrwrr.wwr.9nazaa.+arx<n.w+aew .. ,.