TITLE
Recommendation to authorize City Manager to execute a lease-purchase agreement and related financing documents with Banc of America Leasing & Capital LLC (BofA) for the financing of personal computers and computer-related equipment, and to finance a mainframe replacement in an amount not to exceed $2,326,000, including interest, payable over a four-year period; and authorize City Manager to execute a Master Purchase Agreement with Mainline Information Systems, Inc.
(Citywide)
DISCUSSION
In 2003, the City implemented a program to extend the replacement cycle for personal
computers (PCs) from three to four years as a budget reduction strategy. The program
was successful in reducing costs. Annual lease payments for PCs and servers have
declined from $2.2 million in FY 02 to $935,000 in FY 05, a reduction of $1.265 million.
Currently, there are 1,100 City PCs over four years old. In FY 05, the plan calls for
1,185 PCs, laptops and servers to be replaced at an estimated cost of $1,775,800. The
equipment will continue to be acquired from Dell Marketing L.P., utilizing Dell Master
Purchase Agreement No. 28280.
In addition, the City’s five-year-old mainframe, which runs key applications including
financial systems, payroll and utility billing, must be upgraded in order to run software
needed for critical applications. The City used lease financing to acquire the existing
mainframe. The mainframe replacement cost is approximately $543,000, but will result
in savings of $50,000 annually in software and communications equipment costs, and
will increase processing speeds by approximately 40 percent. Price quotes were
solicited from three major mainframe providers. Mainline Information Systems, Inc.
(Mainline) offered the most favorable overall price including a software discount of
$187,000 over three years, plus a $40,000 trade-in allowance on the existing mainframe
(current market value is $10,000 - $15,000). Staff recommends setting up a Master
Purchase Agreement ...
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