HomeMy WebLinkAbout7 - Computer System Upgrade Res. 90-19
CENSUS '90
.
TO:
FROM:
DATE:
RE:
Mayor and City Council
David Unmacht, City Manager
March 19, 1990
Computer System Upgrade
In 1984 the City of Prior Lake began providing staff assistance
and local services through the use of computer technology. At
that time, a great deal of staff and Council's time was spent on
evaluating computer applications and efficiencies for municipal
government. An evaluation committee was formed for the purpose
of deciding whether or not the City should enter into the use of
computer technology for the provision of local services. Not
surprisingly, that decision was affirmative and an extensive
amount of time was spent in evaluating the various computer
hardware and software packages available on the market for
municipal governments. After careful analysis, the city elected
to purchase Alpha Micro computer hardware to operate the
predetermined software selection. The investment of the hardware
was spread out over a five year period, and software investment
has been ongoing and continuous since the hardware acquisition.
Careful study and analysis went into the decision on whether or
not to expand the existing system capability. On February 5,
1990, the Council approved Resolution 90-07 authorizing the
letting of bids on the computer upgrade. In continued support of
the proposed computer upgrading, staff would like to offer as
part of the overall package the following two documents:
1. The Computer UP9rade Feasibility Report Summary A
narrative descr1bing the various factors that entered
into the decision on whether or not to expand the
existing hardware system. Those factors include
capacity, speed, data storage, reliability, backup and
system operator demands.
2.
A condensed
their cost
Financial Summary Of Computer Upgrade
listing of the various factors and
allocation.
City staff has been pleased with the existing software. The new
hardware system proposed to be acquired is fully compatible and
consistent with the existing software.
Computer technolo~ is advancing almost on a daily basis. The
existing system ~s six years old and has operated exceptionally
well for the City of Prior Lake. City staff believe that the
investment and cost for the new system will continue to allow us
to provide services to the citizens of Prior Lake in an efficient
and timely manner.
4629 Dakota St. S.E., Prior Lake. Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 4474245
. Capacity
. Speed
. Data Storage
. Reliability
COMPUTER UPGRADE FEASIBILITY REPORT SUMMARY
The City of Prior Lake relies extensively upon computers in everyday admin-
istration and performance of City services. Current usage of the City's Alpha
Micro computer has reached maximum utilization. Our existing system has
39 active ports or connections to physically attach terminals, printers etc., of
which all are in use.
Consquently, any staff addition will be unable to access tbe computer. Time
share of terminals is not a practical alternative. Rather, investment in individ-
ual personnel computers at an average cost of nearly '1,000.00 per acquisi-
tion would be required. Further counter productive expenditures would
have to be made in the purchase of duplicate application software such as
word processing, spreadsheet etc. The total cost including maintenance con-
tracts would approximate $25,000.00 over a time period of five years allow-
ing for the expansion of only two terminals per year.
System (CPU) time has slowed dramatically due to the number of users,
causing inefficient use of staff time. This bottlenecking of data processing
slows public response time as well. Producing information in a timely fashion
to the citizens of the community is a high priority service this City Council
has emphasized.
The composite hourly rate of those 15 employees which regularly access the
computer consistently on an hourly basis is calculated to be in excess of
$200.oo/hr. An average time delay of only 1 bour per week extended over
a time period of a year could potentially cost upwards of SlO,OOO.OO in lost
wages. This would rise proportionately as demands upon the system escalate.
The 400 megabyte disk is divided into 13 logical areas where data is stored
permanently until recalled by the user. 70% of this disk space is currently
being occupied. When file sizes are being expanded, to accommodate addi-
tional data, an equivalent amount of disk space is necessary to temporarily
store the data while the file structure itself is being rebuilt and designated
on the disk.
This space reseroe is no longer available, therefore large data files have to
continually be transferred to another disk for expansion purposes and then
copied back. The time spent on such routines numbers several hours a
month. The downside of this maintenance procedure is that no one can
access the computer while this rebuilding occurrence is taking place. A con-
seroattve estimate delay of 3 hours a month and allowing for a 25% on-line
utility factor for those regular users would equate to a loss of U,800.00.
In any event, system expansion is mandatory to accommodate the volume of
data presently being generated. The minimum cost just for the chassis and
another hard disk drive would be in the neighborhood of'15,000.00.
The replacement factor of the system is a consideration as we near the life
expectancy of the CPU and its hardware components. Tbe cost bas been fully
amortl.zed and benefits bave been realized wit bin projections.
. Backup
. System
Operator
Demands
. Summary
At an absolute minimum, a new hard drive ('10,000.00) must be acquired.
If a system crash were to occur due to bearing failure of the disk drive, the
restoration process alone could take as long as 36 hours and account for an
expenditure of '1,000 because the system would be unavailable.
Data backup is crucial if electronic media is to be relied upon. Data integrity
is absolutely essential. Our VCR is capable of only recording 1/6th of the
files because of the length limitation of the tape. The Exabyte option provides
100% security. The cost of processing departmental transactions from the
previous day could cost as much as '500.00 to '1500.00 in data re-entry
eacb time.
Information management places greater and greater demands on support
personnel of the Finance and Police departments which have assimilated the
operating functions of the computer system along with their respective re-
sponsibilities. Unless consideration is give to streamlining and improving our
current situation the alternative may be to contract out routine system oper-
ation procedures to an outside service company or consultant. Costs vary
but a reasonable projection of 20 hours a month at '50.00 an hour would
amount to an annual expenditure of $12,000.00.
...............................................................
Staff perceives the advantages of a new system to be substantiated. The al-
ternative cost total of '76,300.00 approaches that of the cost proposal con-
tained within the RFP. This estimate represents options that are short term
in nature and which also demonstrate significant computer operation inef-
ficiencies for Prior Lake.
Given all quantified and qualified criteria, the acquisition of the new system
is cost justified.
FINANCIAL SUMMARY OF COMPUTER SYSTEM UPGRADE
The following cost analysis is broken down into six categories.
All information provided is based on conservative assumption and
minimum projections. The actual costs may vary.
Cateqory Cost
Capacity $ 25,000
Speed 10,000
Data Storage 16,800
Reliability 11,000
Backup 1,500
Operator Demands $ 12,000
76,300
AGENDA ITEM:
REQUESTED BY :
SUBJECT MATTER:
DATE:
INTRODUCTION:
BACKGROUND:
DISCUSSION:
7
RALPH TESCHNER, FINANCE DIRECTOR
CONSIDER APPROVAL & AWARD OF BID FOR COMPUTER
SYSTEM UPGRADE
MARCH 19, 1990
The City of Prior Lake advertised and
scheduled a bid opening for Monday, 4:30 P.M.,
March 12th for the uP9rade of the City's
computer system. Counc~l approval of the
lowest responsible bidder is necessary to
determine the amount to be financed by the
issuance of equipment certificates.
The Council preliminari1~ approved a computer
hardware upgrade as an ~mportant improvement
of government services during the budget
process which was concluded at year end of
1989. At the February 5, 1990 regular meeting,
the Council restated their position and
authorized staff to prepare bid specifications
in the form of an RFP (Request for Proposal).
The City Council approved the new system
configuration and Resolution 90-07 ordering
advertisement for bid proposals.
The City solicited four potential vendors to
bid on the Alpha Micro 3000/10 system. One
vendor withdrew from consideration midway
through the deadline time period. Of the
remaining interested companies, Alpha
Computers Inc. of Eden prairie was
disqualified due to inadequate conformance to
bid specifications as outlined within the
RFP.
s~ecifically, they declined to submit a firm
b~d amount for application software conversion
as stated. The~ subsequently ~rovided a cost
for the complet~on of the ap~l~cab1e software
programs the day following b~d opening which
would have qualified them as low bidder.
However, Staff rejected their request for
reconsideration so as not to jeopardize the
integrity of the bid process.
The two valid bids which were submitted were
both extremely competitive as indicated by the
following breakdown:
4629 Dakota 51. 5.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245
Component
Hardware Equip.
Software Conversion
Warranty/Maint.
Trade-in Allowance
AlphaSOFT
$79,582.00
11,900.00
8,181.00
<11,000.00>
Biq Sky
$73,000.00
14,790.00
13,926.00
<10,000.00>
Total... $88,663.00
$91,716.00
The major difference is that AlphaSOFT offered
180 day warranty under their proposal as
opposed to 90 days for Big Sk~. This
essentially represented a major ma~ntenance
cost savings which virtually accounted for the
entire difference of $3,053.00 between the two
bids.
It is interesting to note that the City
expended $59,235.00 on its initial purchase
acquisition for the hardware alone. If you
were to allow for the trade-in value, the new
system cost is equivalent to approximately
$8500 more. This factors out to a 14% greater
expenditure than that of six ~ears ago. Yet
the payback of the AM-3000/10 ~s expected to
perform at a rate of 4-6 times faster in speed
and allow for expansion of disk storage of 8
and 1/2 times that capacity of the current
AM1092.
For Council information as well is the fact
that the League of Minnesota cities has
exhibited remarkable parallels to those of
Prior Lake as to growth and expansion. They
acquired the identical Alpha Micro system
almost 6 months before the City embarked on
its automation venture. Similarly, they
upgraded recently to an AM-2000/10 twelve
months ago and are com~letely satisfied with
the performance of the~r new system.
Our City has gained somewhat of an advantage
since then as we are able to obtain a more
powerful system for $5,000 less than the
League. The League paid $84,765 for their
AM-2000 as compared to Prior Lake's $79,582
for the AM-3000. This represents the strides
the computer indust~ has accomplished in a
very short duration ~n terms of both product
development and cost reduction. In addition,
this supports the widely held contention that
the day after ~ou buy, your system begins a
rapid descent ~nto obsolescence.
Also, staff has been in contact with Ron
Haberkorn who is the owner of Norex
Corporation which brokerages in computers and
is locally based in the business community.
We have had an in-depth discussion with Mr.
Haberkorn regarding the City'S enhancement
procedures and he has reinforced our position
as being the correct one. In fact, he further
stated that even if he were able to obtain a
$25,000 savings by utilizing used equipment
RECOMMENDATION:
BUDGET IMPACT
ALTERNATIVES:
ACTION REQUIRED:
other than Alpha Micro, it would not be cost
effective due to our present investment in
training and existing software.
Staff would recommend approval of Resolution
90-19 awarding bid for the City's computer
upgrade to AlphaSOFT Inc. as the lowest
responsive bidder. If the Council concurs,
installation is scheduled to begin Friday,
April 13th (IT'S GOOD FRIDAY TOO!) and is
anticipated to be completed by the middle of
the following week. Adherence to this plan
will be the least disruptive as the system
will be unavailable during this time frame.
Staff had projected an estimated cost to be
approximately $95,000.00 for the Alpha Micro
3000/10, required system software, associated
program conversions and installation. During
the course of refining the configuration of
the system, costs were parred down to an
estimate of $85,000.
Therefore the final cost of slightly more than
$80,000, excluding maintenance, is well within
expectations. The 1990 Operating Budget has an
appropriation of $25,000 available in capital
outlay equipment funds within the Data
Processing department budget.
Equi~ment certificate financing for the
rema~ning balance shall be arranged by Steve
Mattson of Juran & Moody tentat1vely at the
meeting of April 2, 1990. The bonds are
proposed to be structured over 2 and 1/2 years
with principal payment evenly divided between
1991 and 1992.
Interest and related fiscal fees are expected
to be significantly less than incurred as a
result of the 5 year lease purchase of the
City's initial computer acquisition. The
interest rate should fall somewhere in the
range of 6.5% to 6.75% which is very favorable
compared to the previous 9 1/2% lease purchase
financing charge back in 1984. At that point
in time computer equipment was not eligible
for bonding.
Contract paYment for the system is to be based
on the terms of 50% upon delivery and 50%
within 30 days following adequate testing and
acceptance by the City.
The alternatives are as follows:
1. Approve Resolution 90-19 as submitted.
2. Table this item for a specific reason.
3. Deny Resolution 90-19
Motion to approve Resolution 90-19 as prepared
for Council consideration.
RESOLUTION 90-19
CENSUS '90
.
A RESOLUTION AWARDING BID FOR THE CITY OF
PRIOR LAKE COMPUTER SYSTEM UPGRADE
MOTION
BY:
SECONDED BY
WHEREAS, The City of Prior Lake is committed to providing such
accurate and timely information to the citizens of the
community and reco~nizes that computer technology is
essential to accompl~shing this objective; and
WHEREAS,
The City of Prior Lake has
report summary whereby the
substantiates the up~rade
system to be cost just~fied;
prepared a feasibility
cost/benefit relationship
of the present computer
and
WHEREAS, The City has appropriately outlined all system hardware
and software specifications and requirements within an
RFP (Request for Proposal) format; and
WHEREAS, The City of Prior Lake has evaluated such proposals
based upon the criteria as established within the
context of the official Request for Proposal and has
determined them to be in compliance; and
WHEREAS, The bids formally accepted represent competitive bids
and are within cost estimates;
NOW, THEREFORE BE IT RESOLVED by the Mayor and City Council that:
1. The City of Prior Lake hereby accepts the bid of AlphaSOFT
Inc. as the lowest responsible bid in the aggregate amount
of $80,482.00 for the purchase of an Alpha Micro 3000/10
system and $8,181.00 for on-site and depot maintenance
service.
Passed and adopted this 19th day of March, 1990.
YES
NO
Andren
Fitzgerald
Larson
Scott
White
Andren
Fitzgerald
Larson
Scott
White
David J. Unmacht
City Manager
City of Prior Lake
{Seal}
4629 Dakota St. S.E., Prior Lake, Minnesota 55372 / Ph. (612) 447-4230 / Fax (612) 447-4245