TITLE
Recommendation to authorize City Manager to execute a lease-purchase agreement and related financing documents with Banc of America Public Capital Corp for the financing of personal computers, computer related equipment, and servers in an amount not to exceed $1,446,000 including interest, payable over a four-year period; and authorize City Manager to execute a Master Purchase Agreement with GTSI, Inc. (Citywide)
DISCUSSION
In 1997, the Technology Services Department (TSD) implemented a plan to replace all City-owned personal computers (PCs) after three years of use. The three-year replacement cycle was designed to refresh the technology to take advantage of innovations and to reduce the ongoing support costs associated with the maintenance of older equipment and software. Lease financing of the replacement program allows the City to maintain level annual expenditures and departments are able to spread the acquisition cost over the term of the financing, rather than budgeting large one-time capital outlay expenditures.
In an effort to reduce PC related expenditures, the City implemented a program to extend the replacement cycle for PCs from three to four years as part of the City's Financial Strategic Plan. This strategy was successful and substantially reduced the number of personal computers purchased and associated costs. The City expects to install approximately 1,100 replacement and new computers and servers. The estimated cost to replace these computers and servers is $1,288,000. The equipment will continue to be acquired from Dell Marketing L.P., utilizing Dell Master Purchase Agreement No. 28280, which was previously approved by the City Council in April 2003.
To ensure that the City is receiving the best pricing possible, TSD researched other procurement opportunities, such as consolidated purchase programs with other governmental institutions. Through these efforts, the City was able to negotiate a better deal with Dell effectively reducing the personal computer price per unit by almost 18 percent, or $150, totaling close to $150,000 annually. It should also be noted that all current purchases from Dell are EnergyStar compliant and have received the EPEA T Gold certification, which is an EPA-sponsored environmental assessment of technology equipment. Next year, as part of the annual computer and server purchase, the City will issue an RFP to once again ensure that the City is realizing the lowest possible price for these essential assets.
In addition to TSD's annual personal computer and server financing, the Department of Health and Human Services, Animal Care Services Bureau (Bureau), is requesting approval for the financing of twelve (12) Panasonic Toughbooks laptop computers with docking stations and related equipment to be installed in the Bureau's mobile units and kennels at an estimated cost of $70,000. This equipment will support the automation of administrative tasks associated with dispatch, investigations, animal care, kennel management, licensing and emergency field services, through the newly acquired Chameleon Software.
Working with TSD, representatives from the Bureau selected the Panasonic Toughbooks product for its time-tested performance in the field of public safety and animal control services. The product was field-tested in January and February by Bureau staff to ensure operational capabilities and compatibility to its operations. Currently, animal care and control agencies in Orange County, and public safety agencies in the City of Long Beach (Police and Fire Departments), utilize Panasonic Toughbooks for field operations. The company GTSI, Inc. was selected because the City currently receives special pricing as a result of their contract for Police and Fire Department computers.
The Department of Financial Management conducted a bid process to secure the most favorable financing terms for this acquisition. Requests for bids were solicited from 181 firms, of which 21 downloaded the RFP and three firms responded. Of the 21 firms, five were Women-owned Business Enterprises (WBEs), three were Minority-owned Business Enterprises (MBEs), and one was classified as a Small Business Enterprise (SBE). After an evaluation of the proposals, Banc of America Public Capital Corp, of Los Angeles, offered the best terms with a rate of 3.09 percent and is, therefore, recommended to provide the required financing.
This matter was reviewed by Chief Assistant City Attorney Heather Mahood on July 24, 2009 and by Budget and Performance Management Bureau Manager David Wodynski on July 27,2009.
TIMING CONSIDERATIONS
City Council action is requested on August 11, 2009 to ensure timely replacement of personal computers and servers.
FISCAL IMPACT
The total amount to be financed (principal amount) under the Banc of America Public Capital Corp agreement will not exceed $1,358,000, and will be financed over a four-year period with an interest rate of 3.09 percent. The total debt service (principal and interest) for the agreement will not exceed $1,446,000. Of that amount, $1,372,000 is dedicated to TSD's annual purchase of personal computers and servers. The remaining $74,000 is for the purchase of mobile computers for Health and Human Services' Animal Care Services Bureau. FY 09 debt service costs will be approximately $30,000, of which $29,000 will be borne by Technology Services. FY 10 debt service costs will total approximately $361,000, of which $343,000 will be borne by Technology Services, and the remaining
SUGGESTED ACTION
Approve recommendation.
Respectfully Submitted,
CURTIS TANI
DIRECTOR OF TECHNOLOGY SERVICES
LORI ANN FARRELL
DIRECTOR OF FINANCIAL MANAGEMENT/CFO
RONALD R. ARIAS
DIRECTOR HEALTH AND HUMAN SERVICES
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APPROVED: |
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PATRICK H. WEST |
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CITY MANAGER |