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Home My WebLink About06/15/2010 24 City Telephone System Purchase Lease; Budget Amendment and Funds Allocation BUSINESS OF THE CITY COUNCIL • YAKIMA, WASHINGTON AGENDA STATEMENT Z Item No. For Meeting of: 06/15/10 ITEM TITLE: Legislation regarding the lease purchase of a new City telephone system: A. A Resolution approving and authorizing a new purchase lease for the City's telephone system pursuant to the Municipal Lease /Purchase Agreement with Key Government Finance Inc. B. An ordinance amending the 2010 Budget and making an appropriation in the 151 - Public Safety Communications Fund to purchase a telephone system SUBMITTED BY: Wayne Wantland, 911 Director /Communications Manager 575 -6048 Jon Lorberau, Treasury Services Officer, 575 -6024 Cindy Epperson, Deputy Director of Accounting & Budgetinge,Gp P CONTACT PERSON: Wayne Wantland, 911 Director /Communications Manager 575 -6048 SUMMARY EXPLANATION: The City's existing telephone system utilizes 1990's era equipment, which lacks modern features • and the system has become prone to periodic failure. While limited upgrades have been done, there are approximately 200 units still reliant on old technology. Cerium Technologies in conjunction with the Communications Department has put together a system upgrade that not only addresses the current system's interdepartmental incompatibility issues, but also enhances our system with the new generation of telephone features and capabilities. Installation of this system will solve the instability issues of the City's existing system, adds enhanced voice mail services and auto - attendant features, and standardizes systems among the various City departments. Continued on next page Resolution X Ordinance X Other (Contract) Municipal Lease Purchase Agreement Mail to (name and address): Key Government Finance, Inc P.O. Box 1187 Englewood, CO FUNDING SOURCE: Ca. ital - . se in Public Safe Communications Fund -151 APPROVED FOR SUBMITTAL: City Manager STAFF RECOMMENDATION: A) Adopt Resolution; B) Read Ordinance by title only at the June 15, 2010 Council Meeting. Pass Ordinance after the second reading at the July 6, 2010 Council Meeting. BOARD /COMMISSION RECOMMENDATION: The Council Public Safety Committee was briefed on the need for this equipment at their May 19th meeting, and recommended that it be brought forward for consideration by the full Council. COUNCIL ACTION: • The enclosed Resolution, if approved by Council, authorizes a lease /purchase arrangement with ink Key Government Finance, Inc for the telephone system. Financing will be provided under this agreement as per the payment schedule /teens in the attached lease agreement. This is a three -year installment; agreement to purchase equipment that has an estimated cost of $100,000 at an interest rate of 4.17%. Monthly payments will be about $2,948 for an annual amount of $35,377. Three bids from Key Bank, US Bancorp and Avaya Leasing were reviewed and Key Bank offered the best balance of rate and term, although the US Bank offer was very close. This loan, if approved by Council, will close and be completed by July 31,2010. The enclosed Ordinance to amend the 2010 budget is required to authorize the acceptance of funds from the financing lease and appropriates the full cost of the proposed telephone system. Note: This is . a housekeeping transaction to complete the financing of the telephone system. The lease payment of approximately $35,377 a year can be paid within the current telephone budget (421 accounts) while leaving some ongoing money available for continued replacement of older telephone sets. As this technically represents a financing, accounting rules require that the full cost of the equipment (approximately . $100,000) be appropriated in this year's budget even though the payments in 2010 will be approximately 1/6 of the total costs. The attached appropriation ordinance is balanced in the Public Safety Communications Fund, as the financing is considered a source of revenue, which is then being used to purchase the equipment. Appropriation for the monthly payments is already available in the current telephone budget. Page 2 of 2 '' • RESOLUTION NO. R -2010- A RESOLUTION: of the City of Yakima, Washington, approving and directing the City Manager to execute the attached Municipal Lease / Purchase Agreement with Key Government Finance, Inc for the lease on a new telephone system. WHEREAS, the City has determined that it was necessary to replace it's existing telephone system with a new telephone system; and WHEREAS, the City has determined that it is advisable to lease the Cerium Network telephone system through a lease /purchase agreement with Key Government Finance, Inc; NOW, THEREFORE, BE IT RESOLVED by the City of Yakima, Washington, as follows: Section 1. Approval of Documents. The proper officers of the City are hereby authorized to execute the attached Municipal Lease Purchase Agreement and accompanying exhibits on behalf of the City of Yakima, in substantially the form attached hereto. The above - listed agreements shall be amended only with the approval of the City. Section 2. Authorization of Documents. The City Manager is hereby authorized to execute the documents relating to financing the telephone system: The City Manager, Director of Finance and Budget, and each of the other appropriate officers, agents and representatives of the City are each hereby authorized and directed to take such steps, to do such other acts and things, and to execute such letters, certificates, agreements, papers, financing statements, assignments or instruments as in their judgment may be necessary, appropriate or desirable in order to carry out the terms and provisions of, and complete the transactions contemplated by this resolution. Section 3. Prior Acts. All acts taken pursuant to the authority of this resolution but prior to its effective date are hereby ratified and confirmed. Section 4. Effective Date. This resolution shall be in effect from and after its adoption in accordance with law. ADOPTED BY THE CITY COUNCIL of the City of Yakima, Washington at a regular meeting thereof, held this 15th day of June, 2010. Micah Cawley, Mayor ATTEST City Clerk APPROVED AS TO FORM: City Attorney Y • • 0 , June 3, 2010 Jon Lorberau City of Yakima 200 South 3rd Street Yakima, WA FINANCING The financing will be completed by Key Government Finance, Inc. Payments due under the financing will be . OPTION made directly to Key Government Finance at P.O. Box 1187, Englewood, CO . 80150-1187. LENDER: Key Government Finance, Inc. LESSEE: City of Yakima EQUIPMENT: • Technology Equipment Technology Equipment $91,627.55 Sales Tax (est) 8.7% $7,971.60 • TOTAL AMOUNT FINANCED $99,599.15 FINANCING This is a tax - exempt state and municipal government lease purchase financing with the title to the equipment STRUCTURE: passing to Borrower. This is a net financing under which Borrower pays all costs, including insurance, maintenance and taxes, for the term of the Financing. At the end of the financing term the equipment will be owned outright by the Borrower. Monthly Payment 0 Amount to be Leased Interest Rate Payments Factor( *) Pmts / Year Term Adv. / Arr. $99,599.15 4.17% $2,948.10 0.029600 12 36 months Arrears $99,599.15 4.74% $1,867.72 0.018752 12 60 months Arrears ( *) The payment factor expresses the payment as a percentage of the Equipment Cost. To calculate the periodic lease payment for _ any Equipment Cost, multiply the payment factor by the Equipment Cost. . RATE INDEX: The interest rates quoted in this proposal are based on market rates as of June 3, 2010, and shall be subject to index based on market rates until the date of closing. After the closing date the interest rate on the financing will be fixed for the term of the financing. APPROVAL: The financing contemplated by this proposal is subject to the execution and delivery of all appropriate , . documents (in form satisfactory to Lessor), including without limitation, to the extent applicable, Lease Agreement, any Schedule, financing statements, legal opinion or other documents or agreements reasonably required by Lender. This proposal, until credit approved, serves as a quotation, not a commitment by Key Government Finance to provide credit. Final acceptance of this proposal is subject to credit, collateral and • essential use review and approval by Lender. The interest rate quoted herein assumes that the interest component of the Payments is exempt from federal income tax. Lessor will provide a taxable financing proposal if it is determined that the financing will not qualify for tax - exempt interest rates. • CONTACT: Contact your financing representative with any questions - Kendall Hansen - kendall.hansen @key.com (503) 701 -8476 NOTES: Alternative financing options available on request • • • . Contact: Kendall Hansen - Account Executive Key Government Finance, Inc. • 1211 SW Fifth Ave,-Suite 400 Portland, OR 97204 Tel: (503) 790 -7624 • . - - Kendall.Hansen @key.com • Key Government Finance, Inc. Lease Application for State, Local and Education Customers .h Lessee (Full Legal Name) City of Yakima Federal Tax ID # 91- 6001293 Street Address 129 North Second Street City, State, and Zip Yakima, WA 98901 Fiscal Year Begins January 1st, 2010 • Customer Contact Jon Lorberau Invoices to be sent to: Title Treasury Services Officer Contact Wayne Wantland Phone and FAX No. 509 - 575 -6024 509 - 575 -6364 (f) Department Public Safety Communications Ad e -mail address jlorberaAci.yakima.wa.us Street Address 2202 Fruitvale Boulevard City, State, and Zip Yakima, WA 98902 Contract Signer Richard A. Zais Phone and FAX No. 509 - 575 -6048 509 - 576 -6555 (f) Title City Manager e-mail address wwantlanaci.yakima.wa.us Phone and FAX No. 509 - 575 -6040 509 - 576 -6335 (f) Special Instructions e -mail address dzaisAci.yakima.wa.us 1. Please described the equipment being financed: Cerium Network provided telephone system - see attached. 2. Please fully explain the use of the equipment, including any specific department that may be its primary user: This system provides service to all City Departments and is a major upgrade from the existing telephone system. 3. Is the equipment new, upgrade, additional or replacement? Replacement 4. If replacement, how old is the existing equipment? 15 years 5. From which fund will the lease payments be made? Public Safety /Communications 6. Will any loan or grant monies be directly used to make lease payments? No 7. Have funds been appropriated for lease pmts in the current fiscal year? Yes Submitted by: Jon Lorberau/Treasury Sevices Date: Please Fax this application along with your equipment quote, and the financing proposal to 216- 357 -6106. Please send your most recent 2 years audited financial statements to: Key Government Finance, Inc. 1211 SW 5th Ave, Suite 400 41 Portland, OR 97204 ATTN: Kendall Hansen III Cerium Networks QUOTE 1011 E 2nd Ave., Suite 10 Project # CERQ32937 Spokane, WA 99202 • Date May 27, 2010 • Cerium Ne csc 217 -0933 ceriumnetworks.com Sales Re . . SOLUTIONS FOR VOICE, DATA AND VIDEO COMMUNICATIONS p Jamie Harris Sold To Ship To: iharris(a)ceriumnetworks.com City of Yakima - HQ • City of Yakima - HQ . • • Spokane Location: Wayne Wantland Wayne Wantland 1011 E 2nd Ave, Suitel0 200 South 3rd Street 200 South 3rd Street Spokane, WA 99202 • Yakima, 98901 Yakima, 98901 - 800- 545 -3324 Ln # Qty Part # Description Purchase Price /Unit Purchase Price/Total 1, 0 185446 AVAYA COMMUNICATIONS SOLUTION $0.00 $0.00 2 ' • 1 184716 CM S8700 MULTI CONNECT MODEL UPG $0.00 $0.00 3 1 179546 SCC1 IPSI CABLES $152.50 $152.50 4 2 195313 COMPACT FLASH READER W /FLSHCRD RHS $137.25 • $274.50 • • 5 1 207943 R10+ TO CM5.0 S87XX MIG SFTW LIC $0.00 $0.00 III 1 SOFTWARE DATABASE MIGRATON Pre CM5 $3,000.00 $3,000.00 . 7 1 212337 IM ASA VAM CLIENT CM LIC ADMIN TOOLS • $0.00 $0.00 8 1 212487 CC R5 BASIC UPG RFA RELEASE INDICATOR $0.00 $0.00 9 1 224271 IPSI2 CP TN2312BP - NON GSA $4,422.50 $4,422.50 10 1 224273 VAL CP TN2501AP - NON GSA $3,660.00 $3,660.00 11 901 225204 AURA STD ED R5 101- 1000MULT1_UPG LIC $25.62 $23,083.62 12 10 226717 UCE R1.X STD/W CM5+ NEW SEAT 1 $36.60 $366.00 . 13 1 228390 UCE R1.X IP SOFTPHONE R6 LIC /E $0.00 $0.00 14 1 228744 UCE R5.2+ ONE -X MBL R1 /5.X CLIENT /E $0.00 $0.00 15 1 228745 UCE R5.2+ ONE -X COMM R5.X SFTW /E $0.00 $0.00 16 1 228746 UCE R5.2+ ONE -X PORTAL R5.X STD /E $0.00 $0.00 17 1 228747 • UCE R5.2+ AE SVCS R5.X UNFD DSKTP /E $0.00 $0.00 18 1 228932 UCE R5.2+ EC500 R8.X SM LIC /E $0.00 $0:00 19 • 1 228933 UCE R5.2+ IP SOFTPHONE R6.X LIC /E $0.00 $0.00 20 2 226872 • IP AGT R7 MULTI UPG PER AGT • $85.40 $170.80 21 2 227814 IP SOFTPHONE R6 PRE CM6 UPG ONE LIC $11.59 $23.18 22 2 228990 S8800 SERVER,CM5.2.1+ $4,575.00 $9,150.00 23 1 228991 S8800 SERVER SES (SIP ENABLING SERVER) . $4,575.00 ' $4,575.00 24 . 2 405362641 PWR CORD USA $5.49 $10.98 • 25 4 700170012 CABLE GREEN 5 METER • $15.25 $61.00 26 ' 1 700178056 CABLE GREEN 25 METER $24.40 $24.40 Page 1 Ln # Qty Part # Description Purchase Price /Unit Purchase Price /Total 27 1 700456270 ADMIN TOOLS 5.2 CD $0.00 $0.00 28 1 700463482 FACILITY TEST CP TN771 DP - NON GSA $1,198.65 $1,198.65 29 2 700464506 USB MODEM USR5637 -OEM 56K ROHS 6 $182.50 $365.00 30 4 700466014 DS1 INTF TN464HP - NON GSA $2,650.45 $10,601.80 31 2 700476344 CM5.2.1 LINUX UNITY SFTW CD NEW SYS $61.00 $122.00 32 1 700479439 PROGNOSIS VOIP MONITORING CD R2 $0.00 $0.00 33 1 PPN TO EPN CONVERSION KIT $4,000.00 $4,000.00 34 1 EPN RECONFIGURATION & INSTALLATION $660.00 $660.00 35 0 Product and Software $0.00 $0.00 36 1 195476 SOFTWARE SUPPORT COMMUNICATION MGR $0.00 $0.00 MODEL 37 901 219328 SS AURATM5 STD ED 101 -1000 PP $9.00 $8,109.00 . 38 1 PROJECT MANAGEMENT, ENGINEERING, $21,800.00 $21,800.00 IMPLEMENTATION 39 1 AVAYA AURA STANDARD REBATE 46,000.00 - $6,000.00 40 SubTotal Avaya CM5.2 Upgrade $89,830.93 41 1 KCDA 2% Service Fee (89,830.93 x .02 %) $1,796.62 - $1,796.62 Subtotal $91,627.55 Above hardware and software purchased under the KCDA Bid Number: 06 -007 Does not include applicable sales tax and shipping. Approved: Signature Print Name & Title Date • • • Page 2 ORDINANCE NO. 2010 AN ORDINANCE amending the 2010 budget for the City of Yakima; and making an appropriation of $100,000 within the 151 — Public Safety Communications Fund for expenditure during 2010 to provide for the lease purchase of a replacement telephone system. WHEREAS, the amount of $100,000 must be appropriated within the 151 — Public Safety Communications Fund for expenditure during 2010 to provide for the lease purchase of a replacement telephone system, and WHEREAS, at the time of the adoption of the 2010 budget it could not reasonably have been foreseen that the appropriation provided for by this ordinance would be required; and the City Council declares that an emergency exists of the type contemplated by RCW 35.33.091 and that it is in the best interests of the City to make the appropriation herein provided, now, therefore, BE IT ORDAINED BY THE CITY OF YAKIMA: Section 1: The amount of $100,000 is hereby appropriated from the Unappropriated Fund Balance in the 151 — Public Safety Communications Fund to the following accounts as a 2010 appropriation: Resources: • Capital Lease Financing 151- 151 - 124- 0000 - 39150 -CLF -- $100,000 Expenditures: Leased Equipment 151 - 151 - 124 - 0000 - 59428 -660 -- $100,000 Section 2: This ordinance is one making an appropriation and shall take effect immediately upon its passage, approval and publication as provided by law and by the City Charter. PASSED BY THE CITY COUNCIL, signed and approved this day of , 2010. MICAH CAWLEY, MAYOR ATTEST: CITY CLERK First Reading: Publication Date: Effective Date: Cje 6 -15 -10 Telephone Capital Lease Approp Ord 10.doc 6/7/2010