HomeMy WebLinkAboutNB 2 UPGD HP3000 10-06-86 NEW BUSINESS
NO. 2
1~-6-86
Inter- Com
DATE: SEPTEMBER 29,198
TO:
FROM:
SUBJECT:
WILLIAM A. HUSTO~CITY MANAGER
FINANCE DEPAR'[MEN~
AUTHORIZATION TO UPGRADE CURRENT HP3000 THROUGH
LEASE PURCHASE AGREEMENT
RECOFHENDATION
Authorize the Finance Director to enter into a lease purchase agreement with
Hewlett-Packard to upgrade the existing Series 33 taking advantage of Hewlett-
Packard's trade-in upgrade program.
DISCUSSION
We've been up and running on virtually all the new system software for almost
four months, and we've been experiencing a degradation of productivity,
especially in water utility: For example we are currently losing 10-15 hours
a week of production time just to back up the system. We've had significant
problems with the length of time for system merges, system failures and during
the day the system virtually crawls because it can not process the information
as fast as staff can input it. Like the freeways we experience grid lock
every day during peak hours. We've had to increase our overtime, especially
in water, from approximately five hours every other week to almost eight hours
a week.
We have taken several steps to mitigate the situation. For example we've
reorganized within the department so that we can assign a single person as
system manager. We've spent a considerable amount on training and it has paid
off in our ability to somewhat reduce our down time and we now use system
diagnostics to identify potential problems before they occur. We have
installed a CRT at 235 E. Main so that during heavy billing periods we have an
extra pair of hands posting payments. We have also established a relationship
with Turbo Data Systems, formerly PADS~ that expedites system changes and some
maintenance items. I feel that we have done all that we can with modest
success. We are at a point where the staff is losing faith in the new systems
and the stress and tension level has risen significantly.
Based on analysis by Infocomp Systems personnel, Hewlett-Packard technical
people and independent analysis, we've come to the conclusion that we have a
situation of the system software operating at a level beyond our current
central processing units capabilities. This is somewhat akin to driving a
Ferrari between Orange County and Los Angeles during peak traffic hours. Not
only can you not utilize the cars potential but you're creating on going
maintenance problems.
William A. Huston
Sept. 29, 1986
Page 2
In the long run, it is in the best interest of the City if we upgrade the
current HP 3000 Series 33 to a Series 48 utilizing Hewlett-Packard's upgrade
trade-in program. The cost of this upgrade will be approximately $50,000.
While this is not an insignificant amount I should point out that six years
ago we purchased our existing system for $118,000. Not only has hardware cost
come down but we will be getting a system at least four times as fast as our
present system and capable of expanding to twice that speed at significantaly
less cost.
Additional considerations that support the upgrade include our inability to
add enhancenments to the system that will aide our productivity and minimize
an increase in personnel as the City expands in to the East Tustin Area. We
should also consider the needs of other departments such as Public Works,
Community Development and Police as they look for a geo-based system-that will
contribute to their department operations.
By reallocating currently available appropriations in both Finance and Water
Service Billing I would like to enter into a 36 month lease purchase agreement
with HP. If we can place an order before 10-31-86 we will receive an
additional discount of 15%, $10,000, above the 24% government discount we are
entitled. (The additional discount has already been factored into the $50,000
previously referenced). The proposed financing rate is 7.25%, which is
reasonable. The monthly lease would be $1,500 per month. Part of the monthly
lease rate, 40% or $600, will be recovered from reduced hardware maintenance
costs. (Because our current system is on the HP obsolete list we pay a
significantly higher monthly maintenance cost than we would on newer systems).
The following summarizes the benefits to be gained by upgrading at this time:
Increased productivity within the department.
Less computer down time, system aborts and "grid lock".
3. Reduced overtime.
4. Ability to add new systems and to add to processing capabilities of the
CPU at considerable cost savings over future system upgrades.
5. Availability of current resources, thus avoiding additional
appropriations.
6. Favorable financing rate from the vendor that makes the lease
purchase option advantageous from a present value analysis.
William A. Huston
Sept. 29, 1986
Page 3
7. Reduced hardware monthly maintenance costs.
There are several reasons why I'm recommending a trade-in versus
a sale of surplus equipment: The primary reason is the fact that there is
very little market for the Series 33. Aanother consideration is we don't have
a lot of spare time to monitor a resale and the longer it take us to sell it
the less value it has. We also don't have the space to store it. If we could
find the room, we would have to pay a computer moving firm to relocate the
equipment for us. We also would lose an additional two days of computer time
moving the old equipmnet out with one vendor and moving the new equipment in
with another. All things considered trading in the 33 is to our advantage.
RAN:skr