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Home My WebLink About1998-07-14 - AGENDA REPORTS - TS FROM NEXUS INTEGRATED (2)CITY OF SANTA CLARITA AGENDA REPORT W City nager Approval Item to be presented by: Jesse Juarros CONSENT CALENDAR DATE: July 14, 1998 SUBJECT: APPROVE THE PURCHASE AND INSTALLATION OF A NEW TELEPHONE SYSTEM FROM NEXUS INTEGRATED SOLUTIONS RESOLUTION NO. 98-95, APPROVING THE FINANCING OF THE TELEPHONE SYSTEM DEPARTMENT: Administrative Services RECOMMENDED ACTION Approve the purchase and installation of a new telephone system from Nexus Integrated Solutions in an amount not to exceed $420,000. Adopt Resolution No. 98-95, authorizing a Lease Agreement with Leasing Innovations for the Purchase of a telephone system, for an amount not to exceed $420,000. Funds have been budgeted in FY.98-99 in account number 2310-9010. BACKGROUND At the budget study session on June 23, 1998, this item was discussed with Council. At that time, the benefits of this new phone system were highlighted. These benefits include enhanced customer service options. The City currently utilizes Pacific Bell's Centrex system for all of its telecommunications needs. Centrex offers features and telephone .lines for a monthly lease charge. These ongoing costs, along with the growth and size of the City's current communications needs, have prompted staff to investigate the potential advantages of purchasing its own telephone system. Purchasing a telephone system will enhance staffs communications capabilities, allowing for better service to the public. Features such as four -digit dialing between facilities, enhanced voice processing and connectivity to the City s computer systems, along with technologically advanced telephone units, will improve service delivery times and information sharing. Call accounting and least cost routing will also be utilized, improving the City's reporting and savings opportunities. Connectivity between City Hall and the Field Services facility will allow the City's telephones to function seamlessly during normal operations and allow for communications to exist between the two facilities in the event of an emergency such as an earthquake. The new system will also provide staff with greater flexibility in making moves and changes, as they will be able to be done in-house. A f 1 1' 1 .i, rAVA NEW TELEPHONE SYSTEM July 14, 1998 - Page 2 In making the decision to purchase this equipment, staff considered several key factors. Since the telephone system is a critical and integral part of the City's functionality, staff thought it was important to select a local company with on-site materials, components and repair capabilities. It was also determined that a local company could respond much more quickly in the event of a failure and/or during a natural disaster. The current Centrex system requires the City to lease 478 telephone lines from Pacific Bell. Each of these lines cost approximately $17.50 per month. In addition to the monthly telephone line charges, costs are also incurred each time a feature or telephone line is added or changed. The proposed telephone system would mitigate. many of these charges while improving the overall usability and functionality of the system. The following chart identifies the annual costs associated with the current and proposed system: Leased Lines Voicemail Debt Service Maintenance Contract Year 1 Maintenance Contract After Year 1 Total Costs Current Proposed $ 99,921 $ 41,808 $ 11,000 $ -0 - $ -0 - $ 69,073 $-0- $-0- $ =0 - 21,000 $110,921 $131,881 The costs associated with the current system will be incurred indefinitely and are likely to increase each year. The costs associated with the proposed system are $420,000 and will be paid for over a seven-year period. After seven years, the debt service costs- will be eliminated, as the City will own the system. With the debt service costs eliminated, the City will realize a $48,000 savings each year thereafter. The costs associated with new system will include, at a minimum, the following:, Two Telephone Systems, including Telephone Instruments (City Hall and Field Services) One Voice Processing System One Call Accounting Software Package Two Computers and Workstations Two Telephone Room Tenant Improvements (including air conditioning units) In consideration of the long-term savings benefit and the immediate improvement in functionality, staff elected to streamline the purchasing process by utilizing the California Multiple Awards Schedule (CHAS) for this purchase. The CMAS allows. discounted purchases to be made off of schedules previously submitted to the State of California. Use of the CMAS program has been previously approved by the City Council and satisfies all Federal, State and Local purchasing guidelines and requirements. NEW TELEPHONE SYSTEM July 14, 1998 - Page 3 Staff contacted several leasing companies in an effort to identify financing options available to purchase this equipment. Leasing Innovations provided the most cost-effective lease financing offer of $420,000 at 4.97% payable over seven years.. The attached Resolution No. 98-95 approves the financing and authorizes the City Manager to sign all documents relating to the financing. ALTERNATIVE ACTIONS 1) Maintain current phone system. 2) Other action as determined by Council. FISCAL IMPACT The term of the lease will be seven years at an annual percentage rate of 4.97 percent. Annual payments of $69;073 for this expenditure have been budgeted in the FY 98/99 budget account number 2310-9010. ATTACHMENT Resolution No. 98-95 JJ:JT:ft:hds kdu cdw.dY..98.95 RESOLUTION NO. 98-95 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA AUTHORIZING LEASE AGREEMENT FOR THE PURCHASE OF NEXUS TELEPHONE SYSTEM FOR AN AMOUNT NOT TO EXCEED $420,000 WHEREAS, City of Santa Clarita, County of Los Angeles, State of California ("City") is duly authorized and existing under the laws of said State; and WHEREAS, The City Council has authorized the acquisition of a Telephone System ("Property"). WHEREAS, Leasing Innovations ("Corporation") has offered the City a cost-effective lease purchase financing arrangement requiring periodic rental payments, including principal and interest computed at a 4.97 annual percentage rate. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA does hereby resolve as follows: SECTION 1: That the Mayor or City Manager acting alone be hereby authorized in the name and on behalf of the City enter into a binding agreement with the Corporation for the leasing the Property upon such terms as may seem advisable to said officer(s), and to execute, as agents for the City all necessary agreements including, but not limited to, a Lease to purchase Agreement, Certificate of Acceptance, Lessee Resolution and Bank Qualified Certificate. Each officer is also authorized to accept or direct delivery of the Property. SECTION 2: That this approved lease financing be designated as a qualified tax-exempt obligation for the calendar year in which the lease is issued pursuant to Section 265 (b) of the Internal Revenue Code of 1986 (as amended). SECTION 3: The City Clerk shall certify to the adoption of this resolution. PASSED, APPROVED, AND ADOPTED THIS DAY , 1998. MAYOR ATTEST: CITY CLERK RESOLUTION NO. 98-95 July 14, 1998 — Page 2 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES) ss CITY OF SANTA CLARITA) I, Sharon Dawson, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of 1998 by the following vote of the Council. AYES: COUNCILMEMBERS NOES: COUNCILMEMBERS ABSENT: COUNCILMEMBERS CITY CLERK JJ:ft:hds techsv Wcouncil \reeee96