HomeMy WebLinkAboutTR-3-99
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Meeting:
Date:
Report #:
Subject:
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THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
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File # j 1~. P,t:::
Res.# GPA -::29-99
By-Law# 99- / /
MONDAY, JANUARY 18,1998
TR-3-99 File #:
REPLACEMENT OF EXISTING TELEPHONE AND VOICE MAIL SYSTEMS
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee
recommend to Council the following:
1. THAT Report TR-3-99 be received;
2. THAT a contract to lease for a three (3) year term from Bell Canada, the Mitel EL
Telephone System with Mitel Mail and new digital sets for a total approximate
monthly amount of $1,679.95, plus G.ST (Lease Agreement, Option 4) be
approved;
3. THAT the Municipality of Clarington authorize Bell Canada to switch the telephone
lines at the Municipal Administrative Centre and other applicable off site locations,
to Centrex lines;
4. THAT the required funds be provided for in the respective current years
Unclassified Administration Leases, Account #7007-00000-0520;
5. THAT Purchasing By-law #94-129, Paragraph 6, Item 6.01, be waived for this
transaction; and
6. THAT the attached By-law (Schedule "A') authorizing the Mayor and Clerk to
execute the agreement be approved, FORTHWITH.
BACKGROUND AND COMMENT:
The current Mitel telephone system was acquired in 1986, with a partial upgrade, which
included voicemail,taking place in January 1995. This represents an approximate total
investment of $119,000.00. This acquisition was through a pre-paid lease contract at
the single payment option. Consequently, we do not own the equipment. Upon expiry of
the agreement, which is August, 2001, we have the option to exercise the buy-out option
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at 15% of the original purchase price. A current buy-out price has been provided by Bell
Canada in the amount $13,030.65, plus taxes.
Should we choose not to buy-out the equipment, we can continue under the present
agreement paying maintenance charges only. However, at that point, Bell Canada will
no longer guarantee availability of parts.
The existing telephone system is no longer able to adequately handle the
telecommunication needs of the Municipality. The telephone handsets are obsolete,
making it difficult to obtain parts and to add sets when necessary. In addition, the
handsets are not user friendly, thereby making it difficult and inefficient for staff to
redirect calls, call forward, etc. It is also operating at near capacity making it difficult to
add additional lines. It is therefore recommended by the Purchasing Manager and Bell
Canada that the option to purchase the existing system not be exercised (Option 1).
Bell Canada have advised that, because of our recent upgrade, the existing telephone
equipment is year 2000 compliant. However, our voice mail system is not. While the
voice mail system is not utilized within all Departments, some exceptions have been
made where by it is used in cases where there may not always be staff available to take
telephone calls, I.e.: Animal Control. In addition, the voice mail provides the public with
an automated greeting after business hours, which gives them details about office hours,
emergency telephone numbers etc. There has also been a general mailbox established
which allows the public to leave messages after business hours.
For the information of Council, in order to immediately address a concern with respect to
the main switchboard being busy and telephone calls not being immediately answered,
the existing voice mail autoattendantwillbere-programmed.This adjustment will
provide callers with an automated greeting if their call is not answered within four (4)
rings and provide them with the opportunity to leave a message.
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Should Council wish to continue under the existing pre-paid lease agreement for the
telephone system until expiry in August 2001, and replace the voice mail system only,
this can be done at a cost of $17,800.00, plus taxes and installation (Option 2).
The price quoted by Bell Canada to replace the existing system, with a new and more
efficient system, including voice mail and approximately 100 hand sets, is approximately
$60,670.00 (outright purchase), plus G.S.T. Note, the price quoted is stated as
approximate as it will be dependent upon the specific model of handset required for each
individual user. The quotation includes free installation of the voice mail, a two year free
warranty, 30% discount on new equipment, and leasing at prime rate, if accepted by the
end of January (Option 3). The outright purchase is beneficial in that interest charges
are avoided, therefore the total cost shown over the three year term is less. Note, a pre-
paid lease agreement (single payment option) is no longer available.
In conjunction with the Purchasing Manager, Bell Canada representatives have spent a
great deal of time meeting with staff and Department Heads to discuss their
telecommunication needs. It is mutually agreed that the system proposed will
adequately meets all needs.
Alternatively, Council may wish to lease the equipment on a monthly basis, however, this
will increase the total cost from approximately $60,670.00 to $66,526.00 (Option 4).
Based on the attractive low interest rate offered, it would be in the Municipality's best
financial interest to lease the equipment, rather than purChase outright. This option also .
provides the flexibility of not exercising the buy-out option and returning or upgrading the.
equipment at the end of the lease.
With respect to the actual telephone lines, Bell Canada have proposed that the
Municipality switch from the regular Business Lines to Centrex Lines. Centrex lines
have only recently become affordable for our application. Centrex lines provide such
features as call transfer between offices and other Municipal buildings, and call line
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identification etc., which will provide greater functionality to users and decrease the
existing monthly line and off premise extension charges.
For the information of Council, the existing business lines have become very costly with
respect to the number of off premise extensions currently in place and/or required for the
future. The off premise extension allows users to call, and transfer a call to an outside
facility by simply dialing an extension, rather than asking the caller to hang up and call
another number.
The current cost of our business lines is $3,770.00 per month, plus an additional
$1,690.00 per month for off premise extensions. The cost of an off premise extension is
based on the mileage to the location from the main PBX located at 40 Temperance
Street.
The monthly cost to convert our existing lines to Centrex lines, based on a five (5) year
contract is $3,470.00 per month, which equates to a monthly savings of $300.00 per
month or $3,600.00 per year. Note, there is no service charge or installation charge to
convert the lines. In realistic terms, the existing number of off premise extensions is not
adequate, specifically with respect to the Courtice Community Complex. Therefore, if
the cost of adding two (2) additional lines is included in the equation the annual savings
increases to $18,000.00 per year.
The attached table, marked schedule "B" summarizes the options and savings available.
Although there are other firms that may be able to provide similar telephone equipment
to the Municipality, it is recommended that the Purchasing By-Law #94-129, Paragraph
6, Item 6.01, be waived for this particular transaction. It is staff's opinion that Bell
Canada is in the best position to offer both equipment and services to the Municipality.
This arrangement avoids any potential conflict with respect to equipment failure in
dealing with two separate vendors for equipment and line service. In addition, Bell
Canada are most familiar with the operation and needs of the Municipality.
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Based on the pricing submitted, it is recommended that the existing telephone system,
voice mail (Option 4) and business lines be replaced as identified in this report.
submitted,
Reviewed by,
e arano, H.BSc.,AMCT.,
Treasurer
d,~-1.0tc-
Franklin Wu, M.C.I.P., RP.P.
Chief Administrative Officer
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SCHEDULE "A"
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
BY-LAW #99-
Being a By-law to authorize a contract between the
Corporation of the Municipality of Clarington and Bell Canada.
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY ENACTS
AS FOllOWS:
2. THAT the Mayor and Clerk are hereby authorized to execute, on behalf of the
Corporation of the Municipality of Clarington with the Corporation Seal, a contract
between Bell Canada and said Corporation with respect to the lease of the Mitel
El Telephone System with Mitel Mail.
2. THAT this agreement attached hereto as Schedule "A" form part of this By-law.
By-law read a first and second time this day of January, 1999.
By-law read a third time and finally passed this day of January, 1999.
Mayor
Clerk
/
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SCHEDULE 'B' - OPTION SUMMARY
Year 1 Year 2 Year 3 Total 3 year
Budget Budget Budget Budget
Imoact I f11E8ct Imoact Imoact
Option 1
Buy-out Existing Mitel 5X200 telephone system $13,030.65
Purchase New Mitel Voice Mail $17,800.00
(existing not Year 2000 compliant)
Not
TOTAl COST $30,830.65 Recommended
less potential first year savings for Centrex Lines $16,000.00
TOTAL BUDGET IMPACT $14,830.65
Installation, GST Extra
Option 2
Continue under current Plan for existing Mitel SX200
telephone system - do not buyout or purchase new
phone system until contract expiry -August 2001.
Purchase New Mitet Voice Mail Not
(existing not Year 2000 compliant) Recommended
TOTAL COST $17,800.00
Less potential first year savings for Cintrex Line $16,000.00
TOTAL BUDGET IMPACT $ 1,800.00
Installation, GST Extra
Opt/on 3 - Outright Purchase - do not own
Two years free warranty
Purchase new Mitel- El Telephone System cIw Mitel
Voice Mail and new Digital Sets - Single Payment
Plan TOTAL COST $60,670.00 Nil Nil
less potential first year savings for Centrex Line $16,000.00 $16,000.00 $16,000.00
TOTAL BUDGET IMPACT $44,670.00 {$16,000.00) {$16,000.00) $12,670.00
GST Extra
Option 4 Three year lease
Monthly lease new Mitel EL Telephone System c/w
Mitel Voice Mail and new Digital Sets
$1,679.95/month x 36 months $60,476.20
10% buy--out $ 6,047.80
TOTAL COST $66,526.00
1999 BUDGET IMPACT
1st year lease $1 ,679.95/month x 12 months $20,159.40 $20,159.40 $20,159.40
less potential first year savings for Centrex Lines $16,000.00 $16,000.00 $16,000.00
BUY -OUT $ 6,047.80
TOTAL BUDGET IMPACT $ 4, 159.40 $4,159.40 $10,207.20 $16,526.00
GST Extra
Note: Maintenance charges for both Option 2 and 3 will commence in Year 3 in the amount of
$3,896.64/year.
Option 4 Buy-out of $6,047.80 would be applied at end of Year 3.
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