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SR-09-12-1978-11DCITY OF SANTA MONICA, CALIFORNIA REPORT SUMMARY SHEET Submittal: August 21, 1978 For Council Meeting: September 12,1978 Agenda Item Number: ! I E P 1 2 1978. Summary of Situation or Request The City's telephone system is over twenty years old. During the past several years, problems with the equipment have reached the point where employee produc- tivity is affected and where complaints from the public are occurring all too frequently. There is also some question as to whether further deterioration of the equipment may impair the City's ability to respond in emergency situations. This report presents information regarding the installation of new telephone equipment including cost analysis and discussion of other related factors. Background Information In April, 1976, the City engaged COM Consultants to study the existing telephone system, to analyze the City's communication needs, to prepare specifications for new equipment, and to research the marketplace for a system which would meet present and future service requirements. Having completed this work, the consultant re- commends, and staff concurs, that the City install the Stromberg- Carlson Crossreed Electronic 800 PABX switching equipment (SC -800) and new desk instruments. This equipment can be acquired in one of two ways: purchase on the open market or rental from General Telephone. Equipment rental from the utility is more economical if the new system will be replaced within six years following installation. Beyond six years, however, equipment purchase begins to generate savings. If the system remains for ten years, for example, projected savings of purchased equipment over equipment rental amount to over $140,000. In staff's opinion, once a new system is installed, it is likely to remain for ten years or longer. Policy Implication The City currently rents telephone equipment from General Telephone. To purchase equipment would be a departure from past practice. It should be pointed out, how- ever, that the City would still remain a customer of General Telephone, purchasing over $60,000 per year in service and other equipment. Recommendation Approve purchase of the telephone equipment with lease - purchase financing through a local bank. Prepared by: JEANNE L. KENNEDY Administrative Assistant STAN SCHOLL Director, General Services JLK:SS:dvl Attachment // 5 f p 1 2 WIS' Santa Monica, California August 21, 1978 TO: Mayor and City Council FROM: City Staff SUBJECT: Selection of Telephone System Introduction This report reviews results of consultant's study regarding improvements to the City's telephone system and recommends the purchase of telephone equipment from Stromberg - Carlson Communications. Background The telephone system in current use is a 300 -line manual PABX system with two separate PABX switchboard stations (Police Station and City Hall). Manufactured prior to 1949, the switchboards were installed as used items (reconditioned) during the late 1950's. The system is over twenty years old. The two most critical problems regarding continued use of the existing telephone system are frequency of repair and inadequate capacity (see Problems and Repair History, Attachment 1). Employees and the public are continuously plagued with such problems as excessive static, momentary loss of power and disconnection while dialing. This means that repair crews are often required at City Hall on a daily basis.. While repair costs are not directly charged to the City (they are included in the monthly service charge), interruption of telephone service diminishes employee productivity, reduces daily business activity, and causes citizen frustration. To: Mayor and City Council -2- August 21, 1978 Furthermore, the City's service requirements have exceeded the technical capacity of the system. At City Hall the PABX stations have been expanded and modified so that regardless of need no additional stations can be added without the installation of a second switchboard with operator. Citizens frequently complain of difficulty in reaching City personnel due to the telephone system. At the Police Station, the capacity problem is one of community access and department productivity. As the work load expands, it becomes necessary that dialing out preempt more of the available lines. Consequently, the 10 -line capacity of the present PABX is frequently reduced to six incoming community lines. Telecommunications Study In response to these problems, on April 27, 1976, the City Council approved the retention of COM Consultants to conduct a telecommunications study for the purpose of reducing operating costs and updating the system to meet current and anticipated service requirements. In the area of cost reduction, the consultant initiated a number of changes with an estimated annual savings to the City of $8,300 (see Attachment 2). By implementing these changes and other recommended controls, the telephone bill was reduced in excess of $1,000 per month during a time when both usage and telephone tariffs were increasing. With regard to updating the telephone system to meet current needs, COM Consultants conducted an in -depth survey of the existing system and service To: Mayor and City Council -3- August 21,1978 requirements, designed the optimum communication system for the City's needs, prepared specifications for a new system, and evaluated proposals from three vendors and the General Telephone Company. New System Design The telephone system proposed for the City is an improvement over the existing system in many areas. Foremost among these is the addition of more lines which will significantly improve responsiveness to the community. Second, the new system will provide increased emergency capability through the combination of City Hall, Police and Fire Departments into one universal switching system. Presently, an emergency call to the Police Department cannot be identified as such by the operator.. Should an emergency call come in -to City Hall; the party calling cannot be assured of quick transfer to the Police Department under existing capabilities.. The universal switching system will avoid this confusion and delay, improving the ability to respond to the public in emergencies. The central switchboard will be located at the Police Department and be staffed 24 -hours a day. It will have 911 capability and be connected to the police emergency power generator, The combined switching system will also permit the elimination of one telephone operator position (approximately $10,000 /year), Third, transfer of calls will be improved, saving employee time and decreasing frustration on the part of the public. All transfers must now go through the operator and the capability to transfer calls initiated by City personnel does not exist.. Witli direct transfer and touch tone pad, both incoming and TO: Mayor and City Cot it -4- August 21, 1978 outgoing calls will be transferred instantaneously rather than by using the archaic method of "flashing the operator" as now exists. Finally, communication between City Hall and the Police Department will be improved. Presently, only one line between City Hall and the Police switchboard exists. No other contacts can be made while this line is in use, including transfer of emergency calls from City Hall to the Police Department. The new system will include unlimited intercom and transfer between the City Hall, Police and Fire Department. Selection of the Best Utility and Private Systems for Comparison Proposals based upon the system specifications prepared by COM Consultants were received by private vendors Stromberg- Carlson Communications (a subsidiary of General Dynamics), International Telephone and Telegraph„ and Universal Communi- cation Systems, Inc. The General Telephone Company has offered several proposals. A Stromberg - Carlson system was proposed along with the offerings of the other vendors in September of 1976, and a ROLM System was proposed in October of 1977. In August of 1978, General Telephone proposed to slightly upgrade the existing system as a temporary measure which would enable the City to install a centrex- type system after it becomes available in 1980, if the City should decide to do so. Over the past two years, the City staff has met frequently with various General Telephone personnel to receive and discuss these proposals. In order to simplify further analysis a decision was made to select the best of the private systems to be compared with the best of those proposed by the utility, General Telephone. The primary factors in evaluating the proposals were adherence to specifications, cost, and the experience of other.cities and businesses with the equipment and the provider. TO: Mayor and City Coun'. -5- August 21, 1978 With regard to the selection of utility - provided equipment, the ROLM proposal was eliminated as it was more costly, did not meet the requirements in some areas, and provided other features not needed for the City's type of usage. The proposal to slightly upgrade the present system with the idea of installing a centrex -type system as a later date was also eliminated from consideration. The improvements would solve only a fraction of the problems which exist and this upgraded system would cost nearly as much per year as a new system. In addition, it is not clear that a centrex -type system, in which each station has its own telephone number, would be considered favorably at some future date. Thus, the Stromberg- Carlson equipment proposed by General Telephone was selected for comparison with the best private system. The proposal includes installation of the Stromberg- Carlson Crossreed Elec- tronic 800 PABX switching equipment (SC -800) and new desk instruments. With regard to selection of a private system, the Hitachi equipment proposed by Universal Communication Systems, inc., was not chosen for further consideration because it is new to the market and has not been tried by cities. The ITT proposal was eliminated from further consideration due to reports of deteriorating maintenance service and the prospect of higher post- installation repair costs association with extended travel time from the Company's maintenance facility in North Hollywood. The system proposed by Stromberg- Carlson Communications was chosen as the best private system, in part because it is identical to the equipment proposed by General Telephone and simplifies comparison between the public and private systems. Futher- more, the City's consultant is confident, and staff agrees, that the SC -800 will provide reliable service regardless of whether it is purchased directly from Strom- berg- Carlson Communications or.is installed by General Telephone. It should be noted that there are currently in excess of 2,000 Stromberg- Carlson systems in service across the United States. For example, the cities of La Habra TO: Mayor and City Cour, 1 -6- August 21, 1978 and Baldwin Park have Stromberg - Carlson equipment, as does Hollywood Presbyterian Hospital. Businesses in Los Angeles using the SC -800 are the American Reserve Corporation, Elster's Inc.„ Frank B. Hall, and International Creative Management. The Automobile Club of Southern California is currently installing Stromberg - Carlson equipment in its Santa Monica office. Cost Comparison: New Systems and Existing System A cash flow analysis has been prepared for each of the proposed systems and for the existing system over a 15 -year life cycle (see Attachment 3). Utilizing this data, the table below illustrates the projected total cash outlay for the proposed systems and the present system, at five year intervals. The cost projection for the present system includes the installation of additional trunks necessary to improve both internal and external capacity. These additions are imperative if the present equipment is to remain any longer. It should be noted that all cost figures used are for equipment only and exclude monthly charges by the utility company for trunks and telephone usage. At End of Year 5 10 15 Present System Upgraded $244,877 $514,053 $812,340 TABLE I Cash Flow Comparison of Present System with Proposed Systems Total Expenditures (Cumulative) Proposed General Telephone SC -800 (rental) $267,545 $552,904 $869,575 Proposed Stromberg - Carlson SC -800 (purchase) $324,766 $405,996 $512,395 From a strict cost savings perspective, new telephone equipment cannot be justified, at least in the short term. As Table I indicates, the cost of both proposed systems To: Mayor and City Council -7- August 21, 1978 exceeds the cost of maintaining the present system at the end of five years. Cost savings of a purchased system over the present system begin during the eighth year. The accumulated cost savings of a purchased system over the existing system total $10$057 at the end of ten years and $299,945 at the end of fifteen years. Installing the new equipment as proposed by General Telephone would be more costly than retaining the existing equipment. However, financial analysis does not account for the indirect and intangible costs of lost productivity due to system breakdowns and citizen and employee frustration. Furthermore, in the opinion of the consultant, the present equipment cannot provide long term service. Cost Comparison: Rental and Purchased Telephone Systems The graph on the following page indicates that major cost differences between rental of the SC -800 from General Telephone (GTE) and its purchase through Stromberg - Carlson Communications (SCC) occur after the sixth year. This is due to the elimination of annual lease - purchase payments at which time the City would acquire full ownership of the telephone system. (The lease - purchase option assumes financing $225,894 for 5 years at 7% interest).'- This is the essential difference between a private system and a utility -owned system such as General Telephone, since a utility customer pays for the equipment in perpetuity on a rental basis. The cash flow analysis shows that during the first five years the rental option would produce a total savings of approximately .$57,200 At the end of 1. Quotation from Santa Monica Bank, July 5, 1978. CUMULATIVE COSTS JTI SAu0 WL"") I w C C IQ tail �1 2 O r H 2 � � 02b �a � � I 0 c 2 ti E;l 1 1 a E tail �1 2 O r H 2 � � 02b �a � � I 0 c 2 ti To: Mayor and City Council -9- August 21, 1978 ten years, however, the lease - purchase option becomes more economical, generating an accumulated savings of $146,908 (average annual savings of $14,691). At fifteen years, the City would save $357,189 through purchase of its own equipment. Present worth analysis is another method of determining the cost of capital expenditures. When comparing equipment rental and purchase the present worths of the cost of each alternative for a given number of years are computed. These furnish a measure of how much money the City would theoretically have to set aside now at a given interest rate to provide for the future payments.2' Table III shows the present worth of rental and purchase at five year intervals using 8% interest. TABLE III Present Worth: 5, 10, and 15 Years At End of Rental Purchase Year GTE SCC 5 $ 215,185 $ 261,548 10 $ 369,755 $ 305,224 15 $ 486,516 $ 344,286 The present worth of savings from rental as compared to a purchased system is $46,363 during the first five years. The present worth of: purchased system savings over rental is $64,531 during years 6 -10, and an additional $77,699 during years 11 -15. Thus, the total present worth savings of a purchased system over equipment rental is V42,230 over a 15 -year period. 2. Norman N. Barish, Economic Analysis for Engineering and Managerial Decision Making, (New York - McGraw Hill, 1962), p. 139. To: Mayor and City Council -10- August 21, 1978 Rental and Purchased Utility Telephone Systems - Other Considerations In addition to the cost differential, there are other factors which require consideration: 1. Cost of moves in telephone location and other changes; 2. Relationship with the utility company should the City purchase its own telephone system; 3. Quality of maintenance of privately owned equipment; 4. Costs associated with future remodeling of City Hall; and 5. Potential obsolescence of the telephone system, including cost of termination. Moves in Location and Other Changes Once equipment is installed, there are additional charges if phones must be moved and /or changed. There are significant cost differences between private and utility systems for these moves and changes, and they have been included in the financial analysis. The estimated cost of these operations through General Telephone varies from $540 during the first year to $1,782 during the fifteenth year. The projected yearly cost through Stromberg - Carlson Communications ranges from $2,340 to $8,019 over a 15 -year period. These estimates assume: A present average cost per move /change of $15.00 for GTE and $67.50 for SCC; a 5% yearly inflation rate; and three moves /changes per month during the first three years, four per month during years four through seven, and five moves /changes per month thereafter. It is unlikely the moves and changes would exceed this amount since equipment locations and types have been carefully planned to meet City needs. To: Mayor and City Council Relationship with the Utilit -11- August 21, 1978 Should the City Purchase Its Own A potential problem in purchasing telephone equipment is the smooth transition from the utility -owned system to the private system. The ease of transition depends in part upon the cooperation and responsiveness of the utility company. Reports from other cities and businesses owning their own equipment suggest that the relationship between the utility and the purchaser of a private system is often strained initially and that the changeover is not always as smooth as might be expected. However, while delays were inconvenient, none of the organizations which were surveyed experienced significant problems. (See Attachment 4). Another potential problem area is the accountability for system failure after installation. All private telephone systems guarantee that their repair service will conduct the initial investigation of mechanical failures and contact the phone company if the failure occurs on that end of the equipment network. The cities contacted indicate that repair service problems between . the utility and private vendors have been minimal and that the initially strained relationship with the utility has become a cooperative one over time. It should also be noted that with a decision to install its own telephone switching equipment and desk instruments, the City would still remain a customer of General Telephone, purchasing over $60,000 per year in usage and other equipment. To: Mayor and City Council -12- August 21, 1978 � Quality of Maintenance of Privately Owned Equipment Stromberg - Carlson employs nineteen service technicians who work out of its service center in Marina del Rey. The facility has considerable room for expansion and no changes in location are anticipated. The company provides 24 -hour emergency service with a maximum response time of four hours. Minor repairs are made during normal business hours and these service requests are responded to within 24 hours of notification. As part of the maintenance agreement Stromberg - Carlson also provides a system inventory record, consultant services, and continued training of City personnel. (See Attachment 5). Five local organizations owning their own SC -800 equipment were contacted and with the exception of one, all were very satisfied with the quality of main- tenance service provided by Stromberg - Carlson: The company responds quickly, its service people are knowledgable about the equipment, and Stromberg - Carlson maintains positive relations with the utility company. (See Attachment 4). The one organization not satisfied with Stromberg - Carlson's maintenance performance cited a poor attitude on the part of the repairman and unsatisfactory response time. This appears to be an isolated case. Future Remodeling of City Hall Building Should the City Hall building undergo substantial office remodeling and modification in floor plans, the City as a private telephone equipment owner would incur additional expense to rewire the phone system where needed. It is likely that some remodeling and modification in floor plans will occur within T0: Mayor and City Cou— it -13- August 21; 1978 the next ten years. The total estimated cost of rewiring ranges from $5,000 to $15,000 depending on the scope of the alterations. No such expense would be incurred if the equipment were installed and owned by General Telephone, as the utility would absorb the cost of rewiring. Potential Obsolescence of Telephone System The technology of telecommunications is rapidly advancing and the installa- tion of a new system presents the possibility of that system becoming technically obsolete. The new technological developments are primarily in the area of computer- ized switching equipment. This is especially beneficial for organizations with complex line networks where least - cost routing of calls can produce substantial savings. This level of sophistication is not necessary for the simple calling patterns characteristic.of City usage where 80% of the calls are from local citizens to City departments or from City employees to citizens or to other departments. What the City requires and will con- tinue to require is a system which is simple and reliable. Staff is confident that the SC -800 can provide this type of service. It is the.consultant's opinion that at least 10 years will pass before any change would be considered and that the SC -800 could remain in service for 15 years or longer. However, should the City decide to replace a new system due to some To: Mayor and City Council -14- August 21, 1978 unforseen development, the costs are outlined below. Included is the basic termination charge imposed by the utility if its system is discontinued within the first five years of service. Also considered is a conservative estimated salvage value of the SC -800 equipment proposed under the lease - purchase option. (See Attachment 6). TABLE IV ACCUMULATED COST AT TERMINATION:1 5, 10, and 15 years At End of Year Rental Purchase (GTE) (SCC) 5 Ice 15 267,545 + 1,400 26 45 552,904 0 TSL�3, 0� Rental Termination charge Rental Termination charge 869,575 Rental 0 Termination charge 324,766 Payment - 33,884 Salvage @ 30% 90,882 405,996 Payment - 11,295 Salvage @ 10% 394,701 512,395 Payment 0 Salvage 512,395 As the table indicates, if a new system were to be installed and then retired at some point beyond five years, the cost to the City would be less with a purchased system. During the first five years the cost of terminating a purchased system would be higher. Conclusions In reachina a decision, both equipment cost factors and the other considerations must be evaluated. Other than the yearly cash outlay the most significant To: Mayor and City Council -15- August 21, 1978 impacts on overall costs are the potential for additional expenditure due to remodeling and the possibility of replacing the system as a result of improved technology. Accounting for these impacts, a comparison has been made of the estimated cost of both systems should they be replaced after 5, 10 and 15 years of service (see Attachment 7). The table below summarizes the cost savings available through the purchase of telephone equipment as compared to rental from General Telephone. TABLE V Cost Savings at Termination: Purchase Over Rental Termination Period 5 years 10 years 15 years Without remodeling $(21,937) $158,219 $357,180 With remodeling $(36,937) $143,219 $342,180 Note: Parentheses mean negative cost savings. If the new system were retired within five years, it would be less expensive to rent equipment from General Telephone than to purchase it from Stromberg - Carlson Communications. In Staff's opinion, it is likely that the system will be replaced at some time between 10 and 15 years and that during this period some remodeling may occur. With replacement at ten years, an estimated $:143,219 would be saved through the lease - purchase of telephone equipment. This is an average yearly savings of $14,322. Should replacement occur at the end of 15 years, the savings of a purchased system over equipment rental would be even greater: a total of $342,180, or an average yearly savings of $ 22,812. T0: Mayor and City Co. Til -16- August 21, 1978 Equipment Acquisition Procedure The City's consultant has researched four telephone equipment systems on an informal basis and has recommended the Stromberg- Carlson equipment as the best choice regardless of whether purchased or rented (see Attachment 8). Requesting formal bids will cause unnecessary delay and expense. Furthermore, bids would be extremely difficult to equate due to the specialized and custom nature of telephone equipment systems. After careful analysis, the consultant recommends and staff agrees that it is in the City's best interest to acquire the SC -800 through negotiation and to waive the formal bidding process. Alternatives 1. Continue to use existing telephone system. Even if temporarily upgraded, increased interruption of telephone service, inadequate emergency response and heightened citizen and employee frustration can be expected. 2. Approve rental of the SC- 800 from General Telephone. This would cost the City considerably more for identical equipment and comparable service to that which can be provided through a private vendor. 3. Approve the purchase of the SC -800 on the open market. This alternative provides the most cost effective telephone system while ensuring quality maintenance service. Recommendati It is recommended that the City Council take the following actions: 1. Adopt alternative #3 approving the purchase of the SC -800 on the open market. Necessary funds for installation and first Attachment 2 Telephone Cost Reduction Program Estimated Annual Savings 1. Elimination of all 118" lines and replacement with 119" lines to eliminate misuse of local lines. Estimated annual savings: $6, 000. 2. Elimination of garage monitor system. Estimated annual savings: $1, 200. �I 3. Reduction in number of PL lines to police alarm board. Estimated i annual savings: $600. 4. Reduction of alarm board service contract. Estimated annual savings: $500. 0 Preseat System Upgraded (PABX) Year Yearly Cumulative Attachment 3 CASH FLOW SUMMARY Proposed General Telephone SC 800 (rental) Yearly Cumulative Proposed Stromberg- Carlson SC 800 (Purchase) Yearly Cumulative Install 1,850 $ 11,000 $ 91111 1 $46,644 $ 48,494 $49,182 60,182 $59,253 68,364 2 47,604 96,098 50,182 110,364 68,541 136,905 3 48,584 144,682 51,202 161,566 65,913 202,818 4 49,586 194,268 52,452 214,018 64,251 267,069 5 50,609 244,877 53,527 267,545 57,697 324,766 6 51_,653 296,530 54,624 322,169 14,054 338,820 7 52,721 349,251 55,744 377,913 14,756 353,576 8 53,812 403,063 57,141 435,054 16,616 370,192 9 54,926 457,989 58,322 493,376 17,465 387,657 10 56,064 514,053 59,528 552,1904 18,339 405,996 11 57,228 571,281" 60,760 613,664 19,256 425,252 12 58,417 629,698 62,020 675,684 20,218 445,470 13 59,630 689,328 63,306 738,990' 21,229 466,699 14 60,872 750,200 64,621 803,611 22,290 488,989 15 62,140 812,340 65,964 869,575 23,406 512,395 Attachment 4 SURVEY OF BUSINESS AND PUBLIC AGENCIES Quality of Quality of Installation Ease of Problems in Owned Equipment Owned Equip. Utility n_.., Maintnincd by MAintenAnre Maintenance Comments A Uncy /win American Reserve SC -800 SCC works well Corporation 200 lines Yes PT &T 5/77 Unknown Seldom SCC Very good - -- with PT &T; service is prompt Elster's SC -800 ., Previous SCC; Very good Chanoed from 400 lines Yes PT &T - -- Unknown - -- now in -house with SCC - -- SCC maintenance to in -house due to volume of moves /chances. Still Uses SCC for some things Frank B. Hall SC -800 2/77 Smooth SCC Very Seldom required Good response time for SCC. 900 lines Yes PT &T Seldom good Hollywood SC -800 Previous SCC; Attitude of Presbyterian 850 lines Yes PT &T 1/74 Unknown Not appl. now in -house Poor - -- SCC repairman Hospital poor; response time not nnod. Changed to own maintenance 3 ears ago. International Creative SC -800 300 lines Yes PT &T 6/74 Smooth Seldom SCC Very good Good Very pleased Management with the equip- . ment and main- , tenance y SCC_ City of SC -800 Yes PT &T 4/78 Smooth Too early SCC Too early - -- Balwin Park to tell to tell City of ITT Yes GTE -5/78 Some Too early Too early In past Claremont Problems to tell ITT to tell has been fair Attachment R (Oont'd. ) Quality of Quality of Installation Ease of Problems in Owned Equipment Owned Equip. Utility k;., a +;i; +„ n > +o arrnnntahilifv Maintained by Maintpnanrp Maintpnanre Comments City of Glendora, ITT Yes GTE 3/76 Some Problems None ITT Poor - -- Relationship between City & Utility was Strained ini- tially but is cooperative now City of ITT Yes PT &T 11/73 Some West Covina Problems Occasionally ITT Poor - -- Private vendor has provided qc consultant services /studie as part of maic tenance contrac (Toll study)__ D' Attachment 4 SURVEY OF BUSINESS AND PUBLIC AGENCIES Quality of Quality of Installation Ease of Problems in Owned Equipment Owned Equip. Utility n,.,n., kin Il +iIi +v nA +o rhannamiar Ancnuntahility Maintained by Maintenance Maintenance Comments American Reserve SC -800 SCC works well Corporation 200 lines Yes PT &T 5/77 Unknown Seldom SCC Very good - -- with PT &T; service is prompt Elster's SC -800 Previous SCC; Very good Changed from 400 lines Yes PT &T - -- Unknown - -- now in -house with SCC - -- SCC maintenance to in -house due to volume of moves /changes. Still Uses SCC for some things Frank B. Hall SC -800 2/77 Smooth Seldom Good response 900 lines Yes PT &T Seldom SCC Very good required time for SCC_ Hollywood SC -800 Previous SCC ;' Attitude of Presbyterian 850 lines Yes PT &T 1/74 Unknown Not app1. now in -house Poor - -- SCC repairman Hospital poor; response time not good. Changed to own maintenance 3 ears ago. International Creative SC -800 300 lines Yes PT &T 6/74 Smooth Seldom SCC Very good Good Very pleased Management with the equip- ment and main- tendnce by SCC City of SC -800 Yes PT &T 4/78 Smooth Too early SCC Too early - -- Balwin Park to tell to tell City of ITT Yes GTE 5/78 Some Too early Too early In past Claremont Problems to tell ITT to tell has been fair Agency/Company Agency/Company Fq u pme nt Ownership utility Attachment 4 Installation Ease of Date Changeover (Cont'd. ) Problems in Accountability Quality of Owned Equipment Owned Equip. Maintained by Maintenance Quality of Utility Maintenance Comments City of Glendora ITT Yes GTE 3/76 Some Problems None ITT Poor - -- Relationship between City & Utility was Strained ini- tially but is cooperative now City of ITT Yes PT &T 11/73 Some West Covina Problems Occasionally 'ITT Poor - -- Private vendor has provided go consultant services /studie as part of mair tenance contrac (Toll study) I . Attachment 5 MAINTENANCE We intend to maintain the proposed equipment in a manner to meet your per- formance requirements. Because of our dedication and expertise in Telephony, it is our further intention to provide your company with an operating system that performs at a level that conforms to industry- standard telephone practices. For the first year after installation, all parts and labor are covered under the Stromberg- Carlson Communications warranty. At the end of the warranty period, you have the option of entering into an annual or multi -year service agreement with Stromberg - Carlson Communications. SCCI shall dispatch qualified technicians to the equipment location within two (2) to four (4) hours, twenty -four (24) hours a day, seven (7) days a week after receiving notification of a major interruption of service. Minor service requests will be responded to within twenty -four (24) hours of the customer's request between the hours of 8:00 A.M. and 5:00 P.M., Monday through Friday. SCCI maintains its own installation and service capabilities. Maintenance vehicles and personnel are radio - dispatched and all vehicles carry an inventory of spare parts to insure rapid and efficient service. The following are highlights of our 3- point, full - service program furnished during the first year warranty period, and is also included in our annual, or multi -year service agreements: EFFECTIVENESS Preventive Maintenance - Your telephone system is one of your company's most valuable assets. It'was designed and constructed to provide today's most economical and reliable means of business communications. But, like any other precision instrument, it requires periodic inspection and main- tenance in order to insure its continued efficiency. SCCI's Maintenance Service Program provides these essential check -ups. The program is based upon the concept that preventive maintenance corrects the majority of poten- tial problems before they can occur. Emergency Service - Should unforeseen problems occur, SCCI will dispatch technicians to your site to effect prompt repairs. Response time is usually less than two hours. However, SCCI guarantees that all service calls will be responded to within three hours following notification.. Parts Availability - SCCI guarantees consistent parts availability because we maintain an extensive inventory of spare parts within each service region. Furthermore, we guarantee that spare parts will continue to be available for as long as you continue to use your telephone system. ,r Attachment 5 (Cont'd. ) MAINTENANCE 2. Priority Service - As a holder of a SCCI Maintenance Service Agreement, your service requests and scheduled maintenance appointments will receive priority over all other service agreements. EFFICIENCY Growth Flexibility - Your SCCI telephone system is designed so that it may be expanded as your business grows. As your communication requirements in- crease or change, SCCI consultants can advise and assist you in updating your telephone system. Adding, changing or rearranging system features, functions, trunks or station lines may be easily arranged with SCCI's technical assistance. Documented Records - SCCI will provide you with a complete set of system inventory records., These documents describe your telephone system by depart- ments, the type and location of each telephone, the number assignments and feature arrangements. These records are invaluable when planning system expansions or changes. Continued Training - If you have a turnover in personnel, SCCI Customer Service Representatives can conduct a complete series of training programs ranging from telephone etiquette through telephone usage and console operation. SCCI training programs are designed to enable your personnel to maintain an excellent corporate image via your telephone communications. One -Point Contact - Whatever your telephone communication needs may be, your SCCI service consultants are prepared to help you. They are backed by years of technical experience plus the immediate availability of SCCI's outstanding Engineering Department. You need only to ask SCCI for assistance and it will be givew promptly. SCCI will act as your consultant in any coordination or interfacing arrangements required with your local telephone company. ECONOMY Cost Stability - All of the above services are available to you through a SCCI Maintenance Service Agreement. Cost stability is assured because your annual payments are fixed in advance. Your service agreement eliminates reinspection and reconditioning fees. Your valuable investment is protected along with consulting services and fixed maintenance costs.