HomeMy WebLinkAboutAgenda Report - September 18, 2002 E-06AGENDA TITLE: Authorize purchase of replacement of AS400 Mid-range computer from Logical
Design, Inc. (Rancho Cordova, CA) ($120,817.78) (ISD)
MEETING DATE: September 18, 2002
PREPARED BY: Information Systems Manager
RECOMMENDED ACTION: Adopt resolution approving replacement of an AS400 computer from Logical
Design, Inc. (Rancho Cordova, CA.) (ISD).
BACKGROUND INFORMATION: The IBM AS400 mid-range system is the City's "workhorse" computer, hosting
major applications, including the JD Edwards enterprise resource planning
system and the Orcom billing program, among others.
The current A8400 was purchased in 1997 for $236,460, however, the City has out -grown the system and it is now
unable to keep up with the demands placed upon it. For example, it is not uncommon for Finance customers to be
kept waiting in line because the computer system is too slow. These occasions are becoming more frequent as
processing loads increase, and customers are complaining about the constant wait. Customer wait periods are not the
only inefficiencies being experienced. Batch processes, which need to be run during business hours, compete with
online user activities for central processing unit (CPU) resources. This competition results in a marked slowdown for
everyone trying to use the JD Edwards system and batch processes taking hours to complete.
Support Discontinuance
In addition, IBM is expected to announce that it will discontinue support for this older model computer. As a result,
service contracts and part supplies will become increasingly unavailable. It is unadvisable to rely upon a computer
system for which there are no parts or support available.
Limited time offer
IBM has announced a limited -time offer where new units may be purchased at a 50 percent discount. This
means the City may purchase a new AS400 for half the list price, a savings of about $100,000 (including various
upgrades). Sale pricing is effective through September 30, 2002.
Financing
The current AS400, which was financed over 5 years, has been paid off. The budget has included an annual
allocation of about $50,000 to meet this obligation. This proposed purchase will be financed over a 24 month period,
with two annual payments of approximately $54,158. Accordingly, the City's budget will not increase as a result of
this purchase. A favorable interest rate of about 6 percent will be applied by the lender, for a grand total of $108,000,
including interest.
Support and licensing
APPROVED:
H. Ekxon Flynn — Ci y; anager
kF
CITY OF LODI COUNCIL COMMUNICATIONx
Annual support for the new computer will be paid separately under a designated line item, as has been the case with
the current unit. The annual support cost is approximately $10,644. The new unit comes with a 90 factory warranty.
The current licensing will be transferred to the new system, at no additional cost.
System implementation and migration
It is anticipated that migration of the City's current systems will be smooth and seamless since there will not be a
change in operating systems or software platforms. It should be pointed out that the Orcom billing system will only
operate on an AS400 computer. Until such time as the Orcom system is replaced the City will have no choice but to
keep an AS400. The current AS400 does not support newer versions of the IBM operating system, which
effectively limits the upgradeability of the City software packages. The City will now be able to purchase newer
versions of the software packages being utilized.
In summary, it is recommended that the Council approve the purchase of a replacement AS400 computer for the
following reasons:
• The current AS400 is under -powered for the demands being made of it today;
• IBM will cease support of the current AS400 model in 2 years;
• By buying the new box while "on sale" the City will save about $100,000;
• Financing has been secured that will allow the City to make two annual payments of $50,000, allowing the City
have the new box paid off within two years;
• The present AS400 has been paid off. This allows us to pay for the new box out of the same line item, with the
same annual budget allocation of $50,000, thus the purchase will not increase the budget;
• There will be an immediate, dramatic performance improvement for users of JD Edwards and Orcom. Batch
processes currently taking as long as two hours to run will take only about 10 minutes. Also, online users (such
as Finance customer service representatives) will not be competing with batch processes for CPU resources.
The upshot is that speed and performance will greatly increase;
• Migrating systems from one box to another will be smooth because the system platforms will be the same;
• Disk capacity will be greatly expanded, eliminating concerns that our data storage is nearing capacity.
FUNDING: Information Systems 100411.7322
Down payment of $12,501.78 and two payments of $54,158 each to be made; one in 12 months
after purchase and the last one in 24 months.
Vicky McAthie,'Finance Director
Steve Mann, Inf mation stems Manager
APPROVED:
H. ixon Flynn — City Manager
�l
September 11, 2002
Mr. Steve Mann
City of Lodi
212 West Pine Street
Lodi, CA 95242
Dear Steve,
LOGICAL DESIGN, INC.
Here is the final proposal for the new iSeries model 820 to replace your
current model 510
IBM iSeries model 820
2436 processor
1522 interactive feature
1024MB main storage
10-35GB disk drives
2 -RAID disk controllers
CD-ROM
DVD -Ram
8 twinax ports
3-100/ TOMB ethernet adapters, 1 on xSeries server
PCI expansion tower
Integrated xSeries server
1 GB server memory
2 communication lines, 1 with built-in modem
2 Magnetic media controllers
IBM 3581 Magstar tape subsystem
IBM FAX software (5798 -FAX)
IBM 7852-400 modem (used)
Utilizing the IBM Greenstreak promotion, the price to you for this system
is $112,501.78, which includes taxes and normal shipping.
P.O. Box 3128 • Rancho Cordova, CA 95741 • (916) 638-2322 Fax (916) 638-0422
With a down payment of $12,501.78, North American Funding will
finance the remaining $100,000.00 of the purchase with two annual
payments of $54,158.00.
Feel free to call me with any additional questions or changes.
Sincerely,
Ron Coy
P.O. Box 3128 • Rancho Cordova, CA 95741 • (916) 638-2322 Fax (916) 638-0422
iSeries - Operation GreenStreak
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RESOLUTION NO. 2002-195
A RESOLUTION OF THE LODI CITY COUNCIL
APPROVING PURCHASE OF AN AS400 COMPUTER
WHEREAS, Lodi Municipal Code §3.20.070 authorizes dispensing with bids for
purchases of supplies, services, or equipment when it is in the best interest of the City to do
so; and
WHEREAS, in 1997 the City Council approved the purchase of an AS400 Mainframe
Computer at a cost of $236,460.00, which runs all the major software applications for the
City, such as the JD Edwards enterprise resource planning system and the Orcom billing
program among others; and
WHEREAS, the current AS400 has become underpowered for the demands being
made of it today, and IBM will cease support of the current AS400 model in two years; and
WHEREAS, IBM is offering a limited -time offer for the purchase of a new AS400 at a
50% discount, thus saving the City approximately $100,000.00; and
WHEREAS, staff recommends purchasing the new AS400 from Logical Design, Inc.,
of Rancho Cordova, California, in the approximate amount of $100,000.00.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
approve the replacement purchase of an. AS400 computer from Logical Design, Inc., of
Rancho Cordova, California, in the amount of $120,818.00, which includes finance costs.
Dated: September 18, 2002
I hereby certify that Resolution No. 2002-195 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held September 18, 2002, by the following
vote:
AYES: COUNCIL MEMBERS — Hitchcock, Howard, Land, Nakanishi, and
Mayor Pennino
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS — None
ABSTAIN: COUNCIL MEMBERS — None
SUSAN J. BLACKSTON
City Clerk
2002-195