HomeMy WebLinkAboutAgenda Report - February 5, 1997 (64)1
CITY OF LODI COUNCIL COMMUNICATION
L
AGENDA TITLE: Request for Proposal to Investigate Various Communication Business Opportunities
MEETING DATE: February 5, 1997
SUBMITTED BY: Electric Utility Director
RECOMMENDED ACTION: That the City Council approve the request for proposal (RFP) for services to
investigate various communication business opportunities.
BACKGROUND: Due to the rising interest in communications, as well as future City and
community communications needs, the Lodi City Council has directed the
Electric Utility Department (EUD) to prepare a report addressing the
opportunities, costs and benefits of the communications market in Lodi. This
RFP has been prepared to select a firm to assist the EUD in meeting this request.
Upon Council approval, the EUD will request proposals from qualified consultants, organizations, and
individuals with expertise in broadband communication systems to perform strategic research and develop a
business plan.
This RFP is intended to be used to select a firm to prepare baseline information to assist the City in preparing
improvements to its communication system as well as evaluating the possibilities for added revenue. The work
will encompass preparation of a series of reports addressing options with regard to the City's level of
involvement in the development of a communication system, market evaluations, and identification of revenues,
costs, benefits, risks and opportunities associated with entering into the communication business. This study
will prepare the City in strategic decision-making with regards to entering the communication market with a clear
understanding of the associated risks and opportunities.
Alan N. Vallow
Electric Utility Director
FUNDING: The funding will be allocated from the City's Contingency Fund.
Prepared by Mel Grandi, Manager, Electric Services
ANVJMG/pn
cc: City Attorney
'PROVED
H. Dixon Flynn
C1TT Mu AG R
January 29, 1997
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
Technical Specifications
TS.1 PURPOSE
The City of Lodi, Electric Utility Department (EUD) is requesting proposals from qualified
consultants, organizations, or individuals with expertise in broadband communication
systems to perform strategic research and develop a business plan to address the
options, benefits, risks and cost estimates for various roles the EUD could play in the
development of a City -owned communication infrastructure to serve the citizens of Lodi.
This study should prepare the City in strategic decision-making with regards to entering
the communication market with a clear understanding of the associated risks and
opportunities.
This RFP is intended to be used to select a firm to prepare baseline information to assist
the City in preparing improvements to its communication system as well as evaluating
the possibilities for added revenue. The work will encompass the preparation of a series
of reports addressing options with regard to the City's level of involvement in the
development of a communication system, market evaluations, identifying revenues,
costs, benefits, risks and opportunities associated with entering into the communication
business. The work will include a discussion of the various options that the City may
consider to prepare itself for future communication services that may benefit the citizens
of Lodi.
TS.2 BACKGROUND
Due to the rising interest in communications, as well as future City and community
communications needs, the Lodi City Council has directed the Electric Utility Department
(EUD) to prepare a report addressing the opportunities, costs and benefits of the
communications market in Lodi. This RFP has been prepared to select a firm to assist
the EUD in meeting this request.
TS.3 EXISTING FACILITIES
Electric Facilities - The City owns and operates an electric system, which under the
jurisdiction of the Lodi City Council, provides electrical service to 22,500 customers
throughout its ± ten square miles of service territory. The service territory includes
approximately 12 miles of (60 kV) transmission lines, 134 miles of overhead and 117
miles of underground distribution lines. Transmission line and street right-of-ways (ROW)
may provide routing for long-haul needs of alternate access carriers, complementing the
City's own future communication requirements. The overhead electrical distribution
system holds the potential for fiber-optic routing throughout the service area to the City's
remaining industrial, commercial and residential customers. The areas served by
underground electrical distribution may also provide the basis for a complementary fiber -
based communication system.
City Facilities - Various City -owned and operated facilities and systems, such as water
wells, wastewater liftstations and treatment facilities, storm pumps, parks, police and fire
stations, traffic signals, library and government buildings, all have or need various forms
of communication facilities.
In the course of normal business, the City is a large user of telecommunications in the
normal conduct of business such as mobile radio, cellular radio, substation protection,
Supervisory Control and Data Acquisition (SCADA), business telephone and data
transfer. New and emerging needs of utility and public safety telecommunications
Revised - 01/29/97
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
include mobile data, distribution automation (DA), demand side management (DSM),
automated meter reading (AMR), control or monitoring of generation, load monitoring
and video transmission.
Other Public and Private Facilities - Lodi Unified School District operates various
school sites plus their educational support and district offices within the City limits. In
addition, a number of commercial and industrial businesses operate multiple facilities
within the City limits.
TS.4 CITY VISION
The telephone and cable television companies are rebuilding their infrastructures to
provide broadband telecommunications. Cellular and Personal Communications Service
(PCS) providers are building new wireless voice and data transmission systems.
Competitive Access Providers (CAPS) are building fiber-optic broadband systems to
consolidate high-volume telephone, data and video services for the benefit of some
businesses.
The City is interested in using the proposed communications facilities and services to
enhance utility and City government operations. This might include the capability for
interactive, two-way connections for delivering government information, government and
education services and the possibility of establishing a public network that would connect
schools, the hospital, various governmental agencies and other public institutions into a
public enterprise network.
The City envisions several telecommunication business opportunities in which Electric
Utility could participate. These would include:
Remote utility meter reading (AMR), turn on and off and automated bill paying
Energy management services (customer load control, time -of -use metering).
• Local dial tone (telephone services).
Video and other home entertainment services (cable TV, video -on -demand,
interactive games, etc.).
Home monitoring/security services.
Information services (Internet access, etc.).
Multi -media applications such as personal video, teleconferencing,
telecommuting, remote classrooms, etc.
• Emergency broadcast iinformation.
• Local public information.
• Citizen -to -citizen data communications.
"Virtual" library, museums and universities.
• PCS, cellular and paging links.
Revised - 01/29/9'7
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
The City's goal is to maximize utilization of its facilities, reduce operating costs and
stimulate the creation of competitive, state-of-the-art communication network.
The City envisions many different ways in which these goals can be obtained, some of
which are:
• Leasing vaults, conduits or other infrastructure (minimal involvement).
• Leasing dark fiber or bandwidth (backbone level),
• Joint venture and sharing of costs through joint agreements (mid-level
involvement).
• Providing specific services: e.g., local exchange services including long distance
access, video, dialtone, electronic bulletin boards, electronic mail, video -
teleconferencing, etc, to the City or to the residents and businesses (upper mid-
level involvement).
• Developing state-of-the-art, City -owned communication system with services to
existing and new customers (upper level involvement).
Ultimately, the City envisions that two-way voice, data and video communication
capabilities will be available to all residents, businesses and institutions, with open
access to all service providers and users. The City's Request for Proposal (RFP) is
intended to explore the range of possibilities and opportunities to achieve these goals.
The City is interested in determining the level of its future commitment to providing
communication systems services. The firm selected will be required to prepare a clear
and concise evaluation of the rapidly evolving communications marketplace, an
evaluation of existing systems, a description of at least five options for City commitment
to communication service, and detailed background information and projections to assist
the City to decide on implementing one of the options in Lodi.
TS.5 GUIDING PRINCIPLES
The City, through its Electric Utility Department (EUD), has adopted the following
principles to guide the development and expansion of communication services within the
City. The guiding principles are designed to maximize benefits and minimize
undesirable consequences. The City seeks a communications infrastructure that will:
• Minimize disruption to public property and ensure efficient use of the City's
streets.
• Ensure reliable communications services at the lowest cost to the City, its
residents and businesses.
• Ensure universal access and interconnectivity.
• Ensure maximum number and variety of communications services.
• Enhance the City's economic development programs.
• Receive fair compensation for the use of public property and for City
participation.
Revised - 01/29/97
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
TS.6 SCHEDULE
Work specified under this request for proposal shall begin after a contract has been
signed by the selected consultant and a notice to proceed has been issued by the Project
Manager.
TS.7 GENERAL QUALIFICATIONS
Proposals submitted shall provide sufficient information to enable the City to evaluate
the qualifications of the respondent. The City requires information that demonstrates the
technical capabilities and experience of proposers to undertake this project, including:
experience of the firm(s) as well as the principals of the firm(s) and key staff member
who will do the work; experience with other projects of similar size and complexity;
experience in areas such as fiber-optic and/or coaxial cable distribution systems,
wireless communications systems, home intelligence systems, cable television,
switching technology, remote alarm systems, any other related technologies; and
experience in managing networks. If the respondent is a partnership or joint venture,
then the experience of all parties involved is relevant. In order to be considered,
proposals shall provide the following information:
7.1 Brief statement describing the firm's background.
7.2 Executive summary demonstrating grasp of RFP and summarizing the proposal.
7.3 Description of services to be performed, including an overall understanding of
the nature of the project.
7.4 Detailed description of the proposed approach for each task.
7.5 List of similar analyses and specific experience in the planning and evaluation of
communication systems with an emphasis on the use of fiber -optics for
communication purposes. For each listed project, provide a customer contact
name and phone number.
7.6 List of outstanding proposals for communication system activities describing the
proposal status and the project involved. For each listed project, provide a
customer contact name and phone number.
7.7 Corporate organization chart to the level of key personnel proposed for the work.
This is to include names of specific individuals of both consultant and
subconsultants proposed for this project.
7.8 Resumes of each key person to be used for this study, including all
subcontracted personnel. The resume shall cover, as a minimum: education,
work history/experience, and describe the person's expertise.
7.9 List of the portion of the work to be subcontracted and relative experience of any
subcontractors.
7.10 Five references including contact name, address and telephone number.
7.11 Estimate of person hours, dollar costs and approximate schedule for completing
the work. The proposals shall include a detailed breakdown of costs by phase
and hourly rate of the consultant and any subconsultant. (Respondents are
hereby requested to use the City's proposal form.)
Revised - 01/29/97
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
TS.8 SCOPE OF SERVICES
8.1 Upon direction by the Project Manager, the selected consultant will be expected
to provide the City with all services required to determine the best level of
involvement for the City in the communication services market and to prepare
the City to perform that role. By the end of the project, the City expects to have
a clear understanding of the risks and opportunities associated with this
enterprise.
An overview of the services to be provided by the selected consultant is
presented in the following table. The tasks involved in this project are staged in
multiple phases that will be completed sequentially. As shown in the following
table, key decision points separate selected phases. After each phase with a
decision point, the City will decide whether or not the consultant will move on to
subsequent phases. A more detailed description of the required tasks follows the
table.
OVERVIEW
OF CONSULTANT SERVICES TO
BE PROVIDED
PHASE
TASK
DELIVERABLE
DECISION
POINT
1 -Situation
A - Evaluate Current System
Report, Map(s)
Analysis
B - Assess Others' Experiences
Report
No
C - Technology Assessment
Report
2 - Market
A - Market Segmentation
Report, Map(s)
Analysis
B - Identify Service Needs
Report, Map(s)
Yes
C - Analysis of Competition
Report
3 - Assess
A - Define Alternatives
Memo
Alternative
B - City Review/Consultant Refinement
Report
Yes
Levels of City
of Alternatives
Involvement
C - Characterize Alternatives
Report
4 - Comparative
A - Define Analytical Approach/
Memo
Analysis of
Evaluation Criteria
Alternatives
B - City Review/Consultant Refinement
Memo
of Analytical Approach
C - Analyze Alternatives
Yes
D - City Review/Consultant Refinement
Memo
of Analysis
Draft Report
E - Prepare Summary Report/City
Selects Best Alternative
Final Report
5 - Business
Write Business Plan
Report
Project
Plan
I
Complete
Revised - 01/29/97
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
8.2 PHASE 1 - SITUATION ANALYSIS
Evaluate the current position of the City in the market to provide communication
services and assess similar communication experiences of other cities.
TASK A: EVALUATION OF EXISTING SYSTEMS
Prepare a report with supplementary map(s) that address the following:
1. Analysis of the suitability of the City's existing power system facilities, such as
overhead poles and underground ducts, to accommodate the installation of a
communication system. This effort is intended to identify opportunities and
constraints associated with installing fiber-optic systems on overhead and/or
underground facilities.
2. Evaluation of the local cable provider's existing cable system and the local
telephone provider's existing system. The consultant will determine how these
systems could be used to meet the City's communication system goals. As a part of
this process, the consultant will map the locations of these systems. The consultant
will also assess the City's legal rights regarding access to the local cable and phone
provider's systems.
3. Evaluation of the compatibility of a new fiber-optic system with existing
communication systems. In performing this phase of the study, the consultant will
coordinate with the City in reviewing existing standard designs, right-of-way,
overhead and underground circuits, terminal points and so on.
TASK B: COMMUNICATION SYSTEM EXPERIENCES AND PLANS IN OTHER
CITIES
Provide a report on what other cities (within California) are doing in this area.
1. Include plans and current activities of municipal utilities with regard to
communication services.
2. Include trends with regard to development of communication services by
municipalities.
3. Survey latest information regarding legal and regulatory issues related to the
development and implementation of such communication systems and identify how
they may effect the City's potential activities in this area.
TASK C: TECHNOLOGY ASSESSMENT
Provide a report summarizing the state-of-the-art in communications technologies that
may be appropriate for a communication system in Lodi.
1. Review current communication technologies and trends in their development.
Consider the means for integrating different technologies (i.e., coaxial cable, fiber -
optics and wireless technologies) into a single network.
2. Identify risks of changes in technologies and technology standards.
Rcvised - 01/29/97
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
8.3 PHASE 2: MARKET ANALYSIS
Conduct a preliminary analysis of the communication services market in Lodi. Prepare a
report with supplementary map(s) to communicate the results of the analysis.
TASK A: SEGMENTATION ANALYSIS
Identify key segmentation variables and define market segments to which the proposed
communication services are to be targeted. Markets may be segmented by customer
type (i.e., City Utilities, other City facilities, industrial, commercial, residential,
institutional, etc.) and/or customer size (i.e., small, medium, large). The segments
should be selected in a manner that will best facilitate this analysis.
TASK B: IDENTIFY SERVICE REQUIREMENTS
For each market segment, estimate the size of the markets for telecommunications
services that are currently provided, and for those that are likely to be demanded in the
future. Services may include computer data transmission, cable television, telephone
and video conferencing services, among others. Growth rates and the intensity of
competition within each segment shall be analyzed. Key success factors for each of the
segments will also be described.
TASK C: ANALYSIS OF COMPETITION
Identify the likely competitors for communication services in each market segment.
Where services are already being provided, the consultant will describe the services
provided, the costs of the service, and the amount of market share they have captured.
The consultant will also provide an evaluation of their plans.
8.4 PHASE 3: ASSESS ALTERNATIVE LEVELS OF CITY INVOLVMENT
Upon direction by the Project Manager, the consultant will work with the City to define
potential roles the City could play in providing communication services to the businesses
and citizens of Lodi.
TASK A: DEFINE LEVELS OF CITY COMMUNICATION SERVICES
Evaluate a minimum of five (5) communication system options for the City's use in
preparing plans for future communication services. The City has outlined five (5) basic
options for purposes of this RFP; however, the consultant may create additional option
or make minor modifications to the existing options as deemed appropriate by the
consultant. The options defined by the City are:
1. Minimal Level: This option involves only leasing space to outside parties on the
City's existing overhead and/or underground electric distribution facilities.
2. Backbone Level: This level of service involves the installation of fiber-optic
transmission facilities along existing power system rights-of-way which would, in
turn, be leased to users to transmit data from one point to another within the City's
service territory.
3. Mid -Level Involvement: This option would involve possible joint ventures and
sharing of costs between utilities.
Revised - 01/29/97
CITY OF LOD1, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
4. Upper Mid -Level: This option would include providing high capacity communications
services to City -facilities and major industrial and commercial customers. The study
would address the specific fiber-optic circuits between end points.
5. Upper Level: This option represents the development of a City -owned, state-of-the-
art communication system with services to existing and new customers. Such
services may include, but are not limited to, computer data transmission, cable
television, telephone and/or video conferencing services.
TASK 8: CITY REVIEW/CONSULTANT REFINEMENT OF ALTERNATIVES
The City will review the alternatives defined by the consultant. The consultant will work
with City officials and refine the alternatives as needed.
TASK C: CHARACTERIZE ALTERNATIVES
Prepare a report addressing costs, benefits, constraints, risks, market penetration,
projections, cash flows and opportunities for the City associated with each market
segment under each alternative. This report should identify the market(s) targeted by
each alternative.
8.5 PHASE 4: COMPARATIVE ANLAYSIS OF ALTERNATIVES
Upon direction by the Project Manager, the consultant will conduct a comparative
analysis of all the alternatives defined in Phase 3.
TASK A: DEFINE ANALYTICAL APPROACH AND EVALUATION CRITERIA
Lay out a proposed approach for analyzing the alternatives. This approach will define the
evaluation criteria that will be used to determine which alternative is best.
TASK B: CITY REVIEW/CONSULTANT REFINEMENT OF ANALYTICAL
APPROACH
The City will review the analytical approach defined by the consultant. The consultant
will work with the City officials and refine the approach as needed.
TASK C: ANALYZE ALTERNATIVES
Provide City staff with evaluations and support to assist in recommending a course of
action with regard to a level of communication system involvement. These services shall
include, but not be limited to, the following:
1. Preparation of cost/benefit reports for the options developed in Phase 3.
2. Evaluation of the marketability of communications services to the market segments
defined in Phase 2.
3. Evaluation of the compatibility of existing communication systems.
Revised - 01/29/97
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
4. Evaluation of potential opportunities to coordinate system improvements with the
presently operating publicly owned cable television and phone networks.
5. Assessment of impacts with regard to maintaining and/or expanding existing
information systems, including a new Internet node and the City's library, hospital
and educational systems.
6. Identification of the potential competitors and an evaluation of the plans of other
communication providers in the area, including cable television companies, local
telephone companies and private fiber-optic companies.
7. Identification of potential opportunities to partner with other organizations, including
potential competitors.
TASK D: CITY REVIEW/CONSULTANT REFINEMENT OF ANALYSIS
The City will review the analysis. The consultant will work with the City officials to refine
the analysis as necessary.
TASK E: PREPARE SUMMARY REPORT/CITY SELECTS BEST ALTERNATIVE
Provide a final report summarizing the risks, opportunities, constraints, costs and
benefits associated with each level of City involvement in providing communication
services to the businesses and citizens of Lodi. This effort shall include, but not
necessarily be limited to, the following:
1. Preparation of a final summary report to tie together all previous reports.
2. Summary analysis of various options and levels to. support conclusions.
3. Recommended level of involvement by the City.
Using the consultant's summary report as a guide, the City will then determine the level
of involvement it will pursue.
8.6 PHASE 5: BUSINESS PLAN
Upon direction by the Project Manager, the consultant will prepare a business plan that
outlines the steps necessary for the City to carry out its selected role in the provision of
communication services in Lodi.
TS.9 RFP RESPONSE REQUIREMENTS
9.1 A response to this RFP shall address three specific areas:
A. General Qualifications (as listed in TS.7).
B. Tasks to be Performed, including:
(i) major milestones
(ii) durations
(iii) deliverables.
Revised - 01/29/97
CITY OF LODI, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
C. Cost Proposal by Phase and Task, including:
(i) schedule of hourly rates
(ii) distinct estimates of direct salary costs and other reimbursable
expenses not included in hourly fees
(iii) a "not to exceed" estimate of man-hours by task required to
implement the effort, with a "not to exceed" cost for each task and a
total "not to exceed" project.
9.2 The proposal shall be bound in a single volume and preferably will be no more
than 30 pages. Supplementary information, brochures and so on, may be
submitted if desired, but should be provided in a separate package.
9.3 The City will interview the most qualified respondents at the City's offices at a
date and time to be determined later.
TS.10 EVALUATION CRITERIA
The City will consider the following criteria when evaluating each company's proposal:
10.1 Ability of consultant to perform the specific tasks outlined in the request for
proposals.
10.2 The specific method and techniques to be employed by the consultant on the
project. Special attention will be paid to additional communication system
options and market segmentation schemes included in the proposal.
10.3 Qualifications of the specific individuals who will be assigned to this project.
10.4 The quality of, and the amount of time spent by, key personnel who will be
working on their respective portions of the project.
10.5 Demonstrated record of success performed previously by the consultant on
similar work.
10.6 Reasonableness of the overall cost and the cost of each phase requested to
complete this work within the approved schedule.
10.7 Willingness and ability to comply with all of the insurance requirements.
TS.11 CITY PARTICIPATION
The City will:
• furnish Auto CAD files of City streets, parcels, utilities (City owned) and major
facilities for the consultant's use.
• existing communications facilities and associated invoices.
The proposal shall clearly indicate any other data the consultant expects the City to
provide.
R) Revised - 01/29/97
H
Z
aW
CD h
z�
Oa
N 0
U
LL
ao
x
UJ
a
c
J
d
o
O
O
6.R
a
=
a
LL
O U
d
❑
H �
U U
W
J
W
CD h
N 0
U
x
UJ
m
m
is
6.R
o
ZL
a
cc
cc
C
a
a fo.*
CDN
CD o
�U
U Y
X N
W �
o F -
00 0
Z
0
0
'o U
a�
is Y
y
E ca
rn —
W�
o
M
fn O
c=
0
U
'
75
c
0
U
N
N
N
T
_
C
O
Vcc
c0
N
O
Z
_ C
L
N fn
t -Y/1
cu
y Q
Q
O
N
O o
Q
O
d
m>
io C E C
CD
O N
y
Vl
O
d
E Y
h
' n (D
T O-
C
-
0 cc
cu
C
R 3 T C
N
.CC
U
O) —
cu
N
N EO
w
"
cu y
LU U)
Q
a)
F-
0
U)
Z
Q o
o
.`T.
U
U Q
Q
m
U
Q
m
U
Q
[�
U
y
T
T
Ln
N
Q
' E
- O
cu
L
O
N
T
y W 0
>
Q.
CO
Y
O `
(nCU O
fnQ
ca
QQJ
04
M
CITY OF LOD1, CALIFORNIA
ELECTRIC UTILITY DEPARTMENT
Phase
Task
Consultant
Consultant
Estimated
Not -to -Exceed
Not -to -Exceed
Hours
Total Task Cost
Total Task Cost
Project Cost
4 - Comparative
A - Define Analytical
Analysis of
Approach/
Alternatives
Evaluation Criteria
B - City/Review
Consultant
Refinement of
Analytical
Approach
C - Analyze
Alternatives
D - City/Review
Consultant
Refinement of
Analysis
E - Prepare Summary
Phase Total:
Report/City
Selects Best
$
Alternative
5 - Business Plan
Write Business Plan
12 Revised - 01/29/97