Title
Subject: SBC Centrex Telephone Services
From: Office of Information Technology
Recommendation: Adopt a Resolution authorizing the City Manager to execute a State of California CalNet contract for SBC Centrex telephone services and to authorize the City Manager to negotiate and execute telecommunications contracts for local toll and long distance services for all of City of Oakland offices for a period not to exceed five (2) years (TITLE CHANGE)
Body
CITY OF OAKLAND OFFICE CF'T" Z L'
COUNCIL AGENDA REPORT PE
(',;-'y CLERX
TO: Office of the City Manager 203 JUy 1 P14 6:
ATTN: Robert C. Bobb
FROM Office of Information Technology
DATE: June 24, 2003
RE: REQUEST FOR AUTHORIZATION FOR THE CITY MANAGER TO
EXECUTE A STATE OF CALIFORNIA CALNET CONTRACT FOR SBC
CENTREX TELEPHONE SERVICES AND TO AUTHORIZE THE CITY
MANAGER TO NEGOTIATE AND EXECUTE TELECOMMUNICATIONS
CONTRACTS FOR LOCAL TOLL AND LONG DISTANCE SERVICES FOR
ALL CITY OF OAKLAND OFFICES, FOR A PERIOD NOT TO EXCEED
FIVE (5) YEARS.
SUMMARY
The following report summarizes the Office of Information 'Technology's (017) request for the
City Council to authorize the City Manager to execute a State of California CALNET agreement
for Centrex Services from SBC, and to negotiate and execute local toll and long distance services
contracts in order to obtain cost savings.
FISCAL IMPACT
The implementation of the CALNET contract results in a reduction in cost of SO.05 (five cents)
per line, per month for each standard telephone line configuration we presently have under the
SBC contract. Based on the current estimated amount of telephone lines of more than 5000, and
with a $1,800,000 per year expenditure under the existing SBC Centrex contract, this would
represent an annual savings of approximately $ 3,000.00. This estimated $3,000.00 annual
savings is based solely on the current telephone lines, and does not include cost savings from
lines eliminated as a result of exercising the City's option to reduce the number of lines as
allowed in the CALNET contract.
BACKGROUND
In 1999 the City began using an existing CALNET contract to obtain its SBC data circuits,
Internet services, and long distance through MCI. Through this long history, the City has
recognized that using the CALNET contract option is a proven cost savings option.
OIT recommends that the City not exercise the option to extend the current contract and instead
that it obtains new service through the State of California negotiated contract (CALNET). In
executing a contract under CALNET, the City is afforded greater flexibility and cost savings
when providing telephone service.
'The recommended CALNET contract allows the City to obtain service on a month-to-month
basis and includes giving the City the option of reducing the number of telephone lines, by not
imposing a line minimum, thereby reducing overall City telephone service cost.
After reviewing the City of Oakland's current contracts for telecommunications services, and in
anticipation of implementing a significant cost savings measure in this area, OTT is also
recommending that the City Manager ' - :ibility to negotiate andZqcute
Item to .25 W Item 4
oRATc-ouncil inance -.;<ornmittee
-e
m1tte
July 15, 2003 %W000 2003
Office of Information Technology
CALNET Contract Page 2
contracts for local toll and long distance services. Through these negotiations, the City can take
advantage of "Best Call Routing" principles, which allow for the least expensive carriers to be
selected as service providers, and thus obtain the greatest savings.
KEY ISSUES AND IMPACTS
By repositioning our existing Centrex service to the CALNET contract, the City will be able to
provide greater flexibility in its Telecommunications services, while realizing overall cost
savings. Further, the City Manager's ability to negotiate and execute local toll and long distance
services contracts will allow for additional savings to the City.
SUSTAINABLE OPPORTUNITIES
Economici There are no economic opportunities at this time.
Environmental7 There are no environmental opportunities at this time.
I
Social Equity- There are no social equity benefits at this time.
RECOMMENDATION(S) AND RATIONALE
Staff recommends that Council approve the request authorizing the City Manager to execute a
CALNET contract for SBC Centrex Services, thereby allowing the continuation of our existing
services and allow the flexibility of changes in technology or the reduction of unnecessary
Centrex lines. Additionally, staff recommends that Council authorize the City Manager to
negotiate and execute local toll and long distance services contracts in order to provide cost
savings to the City. This authorization will be for a period not to exceed five (5) years.
ACTION REQUESTED OF THE CITY COUNCIL
Staff requests that City Council approve this recommendation.
Respectfully submitted,
Robert H. Glaze
Interim Director
APPROVED AND FORWARDED TO THE
FINANCE & MANAGEMENT COMMITTEE:
OFFICE OF THE CITY MANAGER
Item Aa. -26c4?1
ORA/Council
JuJY 15, 2003
REVISED
OAKLAND CITY COUNCIL Approved as to Fo
7 a
-A@ r,17 @ -LERRESOLUTION No. C. M. S.
OFFICE
PM I). 56
REQUEST FOR AUTHORIZATION FOR THE CITY MANAGER TO
EXECUTE A STATE OF CALIFORNIA CALNET CONTRACT FOR SBC
CENTREX TELEPHONE SERVICES AND TO AUTHORIZE THE CITY
MANAGER TO NEGOTIATE AND EXECUTE TELECOMMUNICATIONS
CONTRACTS FOR LOCAL TOLL AND LONG DISTANCE SERVICES FOR
ALL CITY OF OAKLAND OFFICES, FOR A PERIOD NOT TO EXCEED 2
YEARS.
Whereas, effective May 15, 1990, the City of Oakland has been provided with SBC Centrex services
through a contract which expires August 13, 2003; and
Whereas, the contract includes a provision allowing for an extension for an additional two years; and
upon extending the contract, the City is required to maintain a minimum number of telephone lines,
resulting in expenditures for telephone lines that may no longer be required; and
Whereas, it is in the best interest of the City that the cur-rent contract's extension option not be
exercised, and instead new service be obtained through the State of California negotiated contract
(CALNET); and
Whereas, the CALNET contract allows the City to obtain service on a month-to-month basis and
includes giving the City the option of reducing the number of telephone lines, by not imposing a line
minimum, thereby reducing overall City telephone service cost; and
Whereas, the implementation of the CALNET contract results in a reduction in cost of $0.05 (five
cents) per line/per month, for each standard telephone line configuration we presently have under the
SBC contract; and
Whereas, based on the current estimated amount of telephone lines of more than 5000, and with a
S 1,800,000.00 per year expenditures under the existing SBC Centrex contract, this would represent an
annual savings of approximately S 3,000.00; and
Whereas, the estimated $3,000.00 annual savings is based solely on the current telephone lines, and
does not include cost savings from lines eliminated as a result of exercising the City's option to reduce
the number of lines as allowed in the CALNET contract; and
Whereas, by repositioning our existing Centrex service contract to the CALNET contract, the City will
be able to provide greater flexibility in its Telecommunications services, while realizing overall cost
savings; and
Whereas, through the negotiation and execution of local toll and long distance services contracts, the
City can take advantage of "Best Call Routing" principles, which allow for the least expensive carriers
to be selected as service provider, and thus obtain the greatest savings; and 10.,:QEec
OR IL
Ju WE
Whereas, after reviewing the City of Oakland's current contracts for telecommunications services, and
in anticipation of implementing a significant cost savings measure in this area; and
Whereas, the regulartelephone services the City Manager wishes to purchase in relationto the existing
CAINET State of California contract are exempt from the City's formal advertising and bidding
requirements pursuant to OMC 2.04.080; and therefore be it
Resolved: That, pursuant to OMC 2.04.050,1, 5, the City Council hereby finds and determines that it is
in the best interests of the City to waive formal advertising and bidding requirements and to authorize
the City Manager to negotiate for local toll and long distance services for the period of August 2003 to
August 2005; and, be it
Further Resolved: that the City Manager is authorized to negotiate and execute local toll and long
distance services contracts in order to provide cost savings to the City; and be it
Further Resolved: that the authorization to negotiate and execute local toll and long distance services
contracts will be for a period not to exceed 2 years; and be it
Further Resolved: that the contracts will be approved as to form and legality by the City Attorney, and
copies placed on file with the Office of the City Clerk.
IN COUNCIL, OAKLAND, CALIFORNIA, 20_
PASSED BY THE FOLLOWING VOTE:
AYES- BROOKS, BRUNNER, CHANG, NADEL, REID, QUAN, WAN and PRESIDENT DE LA FUENTE
NOES-
ABSENT-
ABSTENTION-
ATTEST:
CEDA FLOYD
City Clerk and Clerk of the Council
of the City of Oakland, California
16,@5CC
ORAICOUNCIL
JUL I 5 20M