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Home My WebLink AboutRESOLUTION 1991-55Suggested by= Administration c~y of Kenai llllSO~O~ ltO. 91-55 A RESOLUTION OFT HE COUNCILOF THE CITY OFKENAI, A?,ASKA TRANSFERRING $?,534.50 IN THE GENERAL FUND FOR TELEPHONE EQUIPMENT INSTAIJ~TIONAND RENTAL IN THE PUBLIC SAFETY BUILDING. WHEREAS, the current telephone system in the Public Safety Building is obsolete, and parts and maintenance service are not available, and WHEREAS, the City administration desires to rent, purchase, a telephone system. · rather than NOW, THEREFORE, BE IT RESOLVED BYTHE COUNCIL OF THE CITY OF KENAI, ALASKA, that the following budget transfers be made= General Fund From: Other - Contingency $7,534.50 TO: Police - Rental Police - Repair & Maintenance Fire - Rental Fire - Repair and Maintenance Communications - Rental Communications - Repair & Maintenance $2,618.16 998.40 1,909.08 728.00 927.26 353.60 $7.534.50 PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 4th day of September, 1991. Carol L. Freaa, City Clerk Approved by' Finance (8/30/91) kl I?BI.IBBI CITY OF KENAI ~IOFIDAI. GO KEN~,.A~ BNll TELEPHONE "'&t - 7S8S FAX g07-283-3014 TO: Rick Ross, Chief of Police ~ROl4: DATE: Charles A. Brown, Finance Director August 29, 1991 SUBJECT: Telephone System This memo documents conversations we have had regarding a new telephone system, including dispatch communications, for the public safety building. You are considering acquiring a system generally described in an attachment to this memo. My understanding is that your current system is obsolete.. Maintenance and parts are no longer available for any part of the system, including the two consoles. One console is only partially functioning ' at this time. The City has also been notified that the telephone system in City Hall is similarly obsolete. P.T.I. Communications has proposed the following options: 1) Purchase for $16,012.00 2) Lease/purchase: a) $531.92/month for 36 months b) $423.03/month for 48 months c) $358.51/month for 60 months 3) Rent for $545.45/month Purchase and lease/purchase options include installation and aone year warranty. The lease/purchase option results in ownership for $1.00 at the end of the lease; it also includes an early buy-out provision. The rental option does not include installation ($2,080), but does include maintenance. It also includes a favorable buy-out.schedule. All of the lease/purchase options include interest at approximately' 12%. Except for non-appropriation by the Council (rarely used), the Memorandum .R/ck Ross, Chief of Police August 29, 1991 Page Two lease/purchase cannot be canCelled'. The early buy-out provision requires payment of (1) 20% o£ the equiPment Cost plus (2)'future lease payments discounted to present value using the Fed discount rate. To help determine which option is the best, I'd like to compare the purchase to the lease/purchase, and the lease/purchase to rent. The. first comparison is simple: the lease/purchase charges 12% interest, and the City only earns about 6% Interest on its investments. Purchase looks better. However, if as you have indicated, there is no way to know for certain that this equipment will do the Job, it's best not to make the purchase con~ltment until we~ve tried and tested the equipment for an extended time. want to compare lease/purchase to rent two ways: a) Three-year lease/purchase and three-year rent. Lease .Rent -Installation $ - $ 2,~80 Year I 6.383 6.545 Year 2 6,383 6,545. Year 2 - Maintenance 1,560 - Year 3 -6,383 6,545 Year 3 - Naintenance 1,638 - Buy-out ..... 1 4.876 First Three Years ~ ~ b) 'same as abOVe, but exercise buy-out after two years. .Lease Rent' Installation $ . Year 1 , 6,383 Year 2 6,383 Year 2 - Maintenance 1,560 Buy-out, 20% x 16,012 3,202 Buy-out (P.V. of 12N,5.5I,$531,92) 6,197 Buy-out First Two Years 2,080 6,545 6,545 7~663 The rental option offers a favorable buy-out schedule. The buy-oUt is calculated by reducing the net purchase price (16,012 - 2080 installation = $13,932) by the sum of the following percentages: Remorandum Rick RoSs, Chief of Police August:29,.1991 Page.Three' Year ! · year 2 Year 3 Year 4 Yea]: 5 25% 20 20 20 The lease/purchase buy-out option is terr/ble. The rental plan,' at very little extra cost, offers flex/bllity and an easy method to reject the equipment if it doesn't meet your needs. The lease/purchase agreement also contains some pretty nasty clauses~ the rental agreement is s/mple and stra/ght-for~ard. I'd rent. August 22,,1991 ~?C COHMUNZCATZONS POL~CE AND FXP.~ D~PARTM.~.NT mmmmmmmm~emmmmmmmmmmmmmmmmmmmmmmmmmmmmmmemmmm~mm~mmmmmmmm~mmmmEmm~mmmmmm ....... . e_iuded.: Hodular'Cl6x40) 22 7208 C®lephones 5 7310 Celephonsm 2 7324 telephones 2 KeM Module DSS DAC 2B Digital Connector klph~ S~400 power suppX~ Additions Co Nors~ar S~scem; · - .' ~ 7208 Telephone set · '''"'".............-......$189.00 7310 TelePhone aec ' ' $24G O0 7324 Telephone t ' $295 O0 Xe~ ~odule D$$...............................$276.00 7048 DS$/BL~ Console · ''""''''...........-...SZ10.O0 Data *Uni=*'( dsm) .................... -- ' $'455 O0 ...... 'Co~ ~O ..................o..o.. · Headset theadband or ear!oop~ $150 O0 ~aok {des~ or wall) , · "'"'.....................$ 10.00 * habor is hOC included in option pricing.