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Home My WebLink About09 PAC BELL CENTREX 02-01-99DATE: February 1, 1999 NO. 9 2'1-99 TO: FROM: SUBJECT: William A. Huston, City Manager Ronald A. Nault, Finance Director PACIFIC BELL, CENTREX SERVICE AGREEMENT CONTINUATION SUMMARY: The City's current Centrex Service Agreement with Pacific Bell will expire on February 6, 1999. Staff has reviewed alternative providers but has not had the time to complete a detailed analysis for comparative purposes and may not be able to complete a proper analysis within the next 18 to 24 months. The three year proposal from PacBell to continue our Centrex Service offers us a 36% savings from full tariff rates. The recommendation to continue the Centrex Service Agreement for an additional three years will provide a significant savings from full tariff rates, fix our phone costs over the next three years, and will not require the City to purchase 284 new phone instruments. RECOMMENDATION: . Authorize staff to sign agreements with Pacific Bell for a three year term for prepaid Centrex Service with features, Voice Mail Series 100, and Maintenance Service for 284 instruments. , Authorize the City Manager to borrow the total prepayment amount of approximately $230,000 from the City's Equipment Replacement Fund, to be repaid from the appropriate funds during the term of the agreement. DISCUSSION: The City of Tustin entered into its first Centrex Service Agreement with Pacific Bell (PacBell) in August of 1992 when the Police Department moved into their remodeled facility. By taking advantage of the prepayment credits afforded under the agreement, th, e line charges incurred by the Police Department were reduced by 30%. When the balance of City Hall moved into the new facilities, we extended the Centrex Agreement for approximately five years and included all the City facilities in the agreement. The agreement with PacBell will terminate on February 6, 1999. Staff has been researching alternatives to the Centrex Agreement for several months but due to the complexity of installing the City-wide computer network, and the Finance software selection process, we have not had the time required to do a complete analysis of a project as complex as choosing an alternative phone provider. We find that our preliminary analysis is inconclusive and that due to staff's current involvement with the installation of time consuming systems such as the financial software conversion and the 800 Megahertz Communication System conversion, we are not able to provide a more thorough evaluation for a minimum of eighteen to twenty-four months. Staff feels that continuing with the Centrex Service Agreement, at the revised rates proposed by PacBell, will give the City a known level of service at a reasonable price. During the final twelve months of the agreement we will be able to dedicate more resources to completing a thorough examination of viable alternatives for phone service. Additional advantages to the City include fixing the cost of our basic phone service for the next three years, we will save 34% from the full tariff rates if we were to choose a month to month agreement with PacBell, and we will postpone the need to replace our existing phone inventory at a cost of approximately $30,000. The proposal we have received from PacBell is only 11% higher than the rate we agreed to in 1993. Their pricing has basically kept pace with inflation at approximatley 2% per year since 1993. By prepaying on the agreement we will save $64,053 on all three agreements. The recommendation is to borrow the prepayment cost of $230,000 from the Equipment Replacement Fund. This will not impact the cash flow needs of the Equipment Fund during the three years proposed and it will allow the General Fund to spread the actual cost over the next three years. This will avoid a significant'spike in expenses every three years and more accurately reflect our annual cost for basic phone service. Staff will be available to answer any questions at the City Council meeting. Ronald A. Nault Finance Director RAN:ts Attachment RAN:PacificBellAgreement1999.Agenda.doc CITY OF TUSTIN CONTRACT MINIMUM QUANTITY* OXmntit3' USOC I DDT 298 AAF 295 AAFTX 284 3 RX$++ 11 SDNA+ 11 BAPKG 306 ESA 12 E3N 150 E3P I E6CCS 150 E6G~ 1 E6N++ 160 E9G: 15 EAB 1 EAT 161 EMW 264 ESMCS '151# CAL1D Description DID - DOD Transfer - per System Access Facility - each Station Tnmking Charge - Primary Station Line Primary Station Line Interior Station Line Centrex IS - ISDN Primary Station Line Centrex IS - ISDN Feature Package Call Transfer/3 Way/Consultation Call Pickup - each Group Call Pickup - each Station Call Waiting Incoming - each Station Call Forward Busy - each Station Call Waiting Intragroup - each Station Call Forward Don't Answer - each Station Call Hold - each Station Call Forward Variable Limited - each Station Message Waiting Lamp - each Station Call Forward Variable Unlimited - each Station Caller ID- each Station *The "Minimum Quantifies" of lines and associated features listed abOve on this page are included in the Contract "Monthly Price" or "Prepayment Price" (3 or 5 year tern) reflected on the cover page of thi.~ proposal #Caller ID is only included in the proposal price where identified on the cover page of this proposaL CITY OF TUSTIN CENTREX CONTRACT GROWTH PRICING GROWTH LINE*(Price for any line added over the minimum of 298 Centrex Lines) Growth Line Consists of: RXR++ or RX5++ or SDNA+ AAF AAYrX ESA ESMCS Primary Station Line or Interior Line or Centrex ISDN Line Access Facility - each Station Tnmking Charge - Primary Station Line Call Transfer/3 Way/Consultation Call Forward Variable Unlimited - each Station Three (3) Year Tern $14.50 per line* Five (5) Year Term $14.00 per line* Tariff Equivalent Price: $16.9 7per line (Contract Growth Price & Tariff Equivalent Price includes End User Common Line Charge - EUCL, which is currently $6.15) For any feature added above the "Contract Minimum Quantity", the following is the "Contract Grox~th Price" for each additional feature: USOC Description Contract Tariff' Monthly* Equivalent* BAPKG Centrex IS - ISDN Primary Station Line $ 20.00 $ 23.50 E3N Call Pickup - each Group $ 10.00 $ 19.25 E3P Call Pickup - each Station $ 0.25 $ 0.50 E6CCS Call Waiting Incoming- each Station $ 0.70 $ '1.00 E6G.~ ~ Call Forward Busy- each Station $ 0.25 $ 0.50 E6N Call Waiting- Intragroup - each Station $ 0.70 $ 1.00 E9G~ ~ Call Forward Don't Answer- each Station $ 0.25 $ 0.50 EAB Call Hold - each station $ 0.25 . · $ 0.50 EAT Call Forward Variable Limited - each sra. $ 0.25 $ 0.50 EMW UCD Message Waiting Indicator- each Sta.$ 0.25 $ 0.50 CAI, ID Caller ID - each Station $ 4.50 $ 7.50 7Y3eAG Sectional Billing Agency Account $ 1.10 $ 1.90 * The above Contract monthly growth pricing does not include nonrecurring/in~allation charg~es. The Nonrecurrin~installation charge for the new line and or feature would be at the prevailing Tariff price at the time the new line and or feature is installed- The City of Tustin may add any new location(s) within 13,512 feet from any Pacific Bell Central Office. However, no more than 5% of the total number of lines may be beyond 13,512 feet from any Pacific Bell CITY OF TUSTIN CONTRACT PRICING ! VOICE MAIL SERIES 100' TOTAL MONTHLY CHARGE FOR 155 MAILBOXES One (1) Year Term Monthly Charges $1,759.25 ( $11.3 5 per mailbox) Three (3) Year Term Monthly Charges $1,619.75 ( $10.45 per mailbox) Five (5) Year Term Monthly Charges $1,480.25 ($9.55 per mailbox) TOTAL PR. EPA YMENT CHARGE FOR 155 MAILBOXES One (1) Year Term Tern Charges $20,332.00 ($10.93 per mailbox) Three (3) Year Term __Term $52,458.00 ($9.40 per mailbox) Five (5) Year Tern Term Charges $74,756.00 ($8.04 per mailbox) *Price based on mailbox quantity between 100 -199