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Home My WebLink AboutAgenda Report - January 4, 1984 (20)A. LEME PLIIRCliASE Council was apprised that the City has been informed by oux OF IBM SYSIM IBM representative that an IBM System 36 Computer is 36 APPROVED available to the City of Lodi. In anticipation of our needs he placed a non-binding tentative order for this new system. His rationale was based on his knowledge of the City of Lodi's present system and future requirements. Our present \ I1-364 System 34 is rapidly reaching the point that it cannot lie further effectively expanded. Our computer study is in the final stages and Council should be made aware that Ernst 6 Whinney is going to recommend the City obtain an IBM System 36. While we are under no obligation to accept this equipment now, it may be advantages to do so for the following reasons: The system available falls under an existing oontract with the State of California that allows for a 309 discount. There is no guarantee this satre agreement will be available next fiscal year. The City would not ce able to obtain a piece of equipment until after June of 1984 and we do not know t M pride. The City has a current offer from a eoWite3r broker to purchase the City owned system 34 for $16,845.00. If we wait until July of 1984 to sell the system it would be expecxA tine price will drop 159 to 20%. The system hardwar-i and software anticipated will cost $61,754.00 ineli)ding tax. The sale of our pre.1jent system will reduce the net cost to $44,909.00. Following discussion, cn motion of council Member Ma phy, Reid second, Council approved the lease/purchase of an IBM System 36. Further, on motion of Council Member Raid, Miuphy second, Courx:il declared the City's System 34 as "surplus property". U'" UNCIL C+011 MUNICATIOi TO THE CITY COUNCIL i ROM: THE CITY MANAGERI OFFICE SUBJECT: Lease/purchase of IAM System 36 Aec ctnnendat ion : DATE( NO• December 29, 1933 The Citv Council authorize the City Manager to enter into a lease purchase agreement with IBM for a System 36 Computer and related hardware and software cenponents. Back ground: We have been informed by our IBM representative that an IBM System 36 Computer is available to the City of Lodi. In anticipation of our needs he placed a non-binding tenuitiv►e order for this new system. His rationale was based on his knowledge of the City of Lodi's present system and future requirements. Our present IBM System 34 is rapidly reaching the point that it cannot be further effectively expanded. Our cerputer study is in the final stages and Council should be made aware that Ernst 6 Whinney is going to rec mnand the City cbtain an IBM System 36. While we are under no obligation to accept this equipment now, it may be advantages to do so for the following reasons: The system available falls under an existing cor:tract with the State of California that allows for a 308 discount. There is no guarantee this same agreement will be available next fiscal year. We would not be able to obtain a piece of equipment until after June of 1984 and we do not know the price. The City has a current offer frau a c rU uter broker to purchase tM City owned system 34 for $16,845.00. If we wait until J -'Ay of 1.984 to sell the system it would be expected the price will drop 158 to 208. The system hardware and software anticipated will cost $61,754.00 including tax. The sale of our present system will reduce the net cost to $44,909.00. Council is strongly urged to give this proposal favorable consideration and to authorize the City nanager to enter into a 5 year lease purchase agreement for the purchase of this equipment. � n Ae ry L. Glenn sistant City Manager r CITY COUNCIL ` IV[ l Y M Ot SON Ma.Vor IOHN R (Randvl SNIDER Mavor Pro Tempore R0Hf'R1 C .MURPHY IAMtS W PINKIRION Ir IRED �1 RE ID 0 4 CITY OF LODI CITY HALL. 221 WEST PINE STREET POST OT'FICE BOX 120 LODI. CALIFORNIA 95241 (209) 334-Sbl4 MEMO HE NRY A CL AYES. Ir ,0tv Manager ALICE M RE iMCHE Cit-, Clerk RONAI D M STEIN 01v AtKxne% December 23, 1983 C� �( MEM0.18fter CITY OF LODI City Hal • 221 West Pine Street • Lodi,iUiiQmiJJ5244 r, i (209) 334-56311 AL1 --E i,'. i,;7- Henry A. Glaves, Jr. Date DEC. 27, 1983 City Manager Subject Council Agenda Item (attached) Hank: I'm sorry that 1 couldn't meet With you last Friday or today to discuss the attached. I will be on vacation Wednesday and 'Thursday (12/28 & 12/29), but I will be back on Friday. I have met with Jerry on the problem. I would like to have this scheduled for the January 4th Council meeting if it meets with your approval. If we can't make the Jan. 4th meeting then I don't believe we can complete the arrangements with IBM. If you have any questions we can go over them Friday morning, or you can call me at homer 368-1339. CITY COUNCIL E VE LYN M OLSON. Mayor JOHN R (Randy) SNIDER Mayor Pro Tempore ROBERT G MURPHY JAMS W PINKIRTON. It FREDM REID CITY OF LODI CITY HALL. 221 WEST PINE STREET POST OFFICE BOX .:20 LODI. CALIFORNIA 95241 (209) 334-5634 IY'.EMO TO: Henry A. Glaves Jr., City Manager FROM: Robert H. Holm, Finance Director HENRY A GLAVES. It City Manager ALICE M REIMCHE City Clerk RONALD M STEIN City Attorney December 23, 1983 In May of 1983 IBM announced the introduction of the System 36 to the busineRs world and,,our department placed a non binding, tentative order for this new system pending: 1.. Recommendation by the consultants that the City has a neer to move up to the next size computer. 2. City Council authorization of the purchase. One of the recommendations of the forthcoming Ernst and Whinney computer study is that the City move up to the next larger size milli -computer which Mould be an IBM System 36. This move is recommended for several reasons some of which are: 1. The City already has a fairly large investment in IBM's System 34 hardware and software (program applications) and it is considered prudent to minimize ongoing da -t& processing support costs by staying with that line of mini -computers. 2. There are several high priority information systems that are needed to be computerized such as; a work order accounting system, Personnel system, Police Dept. crime analysis and Case Management system, Police Evidence inventory system, Stolen Property Tracking system and Community Development Document Indexing system. Our present system 34 would not be able to support all of this increased activity. During the course of the computer study our consultants and City staff found it necessary to discuss with IBM Marketing Representative the configurations and costs of the System 36 and its capabilities to meet the City's needs over the next 5 years. In trying to anticipate the City's needs and to schedule delivery sometime at the close of the consultants' study the IBM Marketing Representative, without City permission, placed an order for a System 36 to be delivered. This equipment has arrived and is in a warehouse in Brisbane; IBM would like us to take delivery. Mr! Glaves 0 Dec. 23, 1983 Page 2 The City is legally under no obligation to accept delivery of this equip— ment, however, it may be advantageous to the City to do so for the following reasons: 1. This particular System 36 falls under an existing rontract that IBM has with the State of California Government Procrument Office that allow for a 307, discourt. This contract will expire in June and there is no guaranee that the State and IBM will enter into another agreement with similar discounts. 2. The next delivery schedule for a System 36 to the City is estimated to be after June 1984. Acceptance now would allow us time to make the conversion from the System 34 and also allow us to proceed with those high priority system applications much earlier than anticipated. 3. The City has a current offer from a computer broker to purchase the City owned System34 for $16,845.00. This offer is only good for a short time and if the City were to wait until after June 1984 to sell this system it is estimated the price would drop anywhere from 15% to 207. Cost of purchase of the IBM System 36 is as follows: Nate: HARDWARE S136 Central Processing Unit $ 44,600.00 Additional 256K memory 2,500.00 Workstation Expansion 2,000.00 Communications 8,122.00 TOTAL hARDWARE $ 57,222.00 307. Discount (171167.00) NET $ 40,055.00 #5225 400 LPM Printer $ 13,94.5.00 15% Discount2 ,0( , 29,00) NET $ 11,853.00 SOFTWARE System support programs $ 4,700.00 RPG II 6 Utility package 1,400.00 34 - 36 Migration aid 250.00 TOTAL $ 6,350.00 Total Hardware and Software $ 58,258.00 Sales Tax 3,496.00 GRAND TOTAL 61,754.00 City to sell its System 34 on its own for $ 16,845.00. Net cost to City is $ 44,909.00. The City has two methods of financing available if we wish to accept delivery of this equipment. 1. Direct purchase - a lump= sum payment of $ 61,754.00 to IBM using Capital Outlay Fund money and put back into this fund the $ 16,845 we receive from the sale of the System 34 leaving a net expenditure of $ 44,909.00. • Mr1 Claves Dec. 23, 1983 Page 3 2. Lump sum payment of software $ 6,350.00, and sales tax of $ 3,496-00 or total of $ 9,846.00 and a 5 year tease/purchase plan whereby we would pay IBM $ 1,102.89 per month for 60 months. This includes a 10% per annum financing charge. I would recommend the City accept delivery of the IBM System 36 that is available and that the City use the 5 year lease/purchase plan. rresently, as City Treasurer, I am able to get a better return on City money than 107. per annum. RHH: mm Robert H. Holm, FlAance Director CITY OF WD I