Approve the attached Service Agreement with Paetec Communications for phone and Internet data services to the City.

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1 MEMORANDUM CITY OF RANCHO PALOS VERDES TO: FROM: DATE: SUBJECT: REVIEWED: Project Manager: RECOMMENDATION HONORABLE MAYOR & CITY COUNCIL MEMBERS DENNIS McLEAN, DIRECTOR OF FINANCE & INFORMATION TECHNOLOGY DECEMBER 16, 2008 SERVICE AGREEMENT WITH PAETEC - PHONE AND INTERNET SERVICE PROVIDER CAROLYN LEHR, CITY MANAGER ~ Robert Arthur, Senior Information Technician Approve the attached Service Agreement with Paetec Communications for phone and Internet data services to the City. BACKGROUND AND DISCUSSION: PVNET began providing the City with day-to-day IT services in accordance with a Professional Services Agreement dated September 2, 1998, after selection by the City' Council pursuant to a formal bid process. Soon after the Agreement was approved, PVNET began sharing its own T-1 access to the Internet with the City. The City previously used a DSL connection to the Internet. Organizational Assessment Conducted By Management Partners At a meeting on September 18, 2008, the City Council decided to retain Management Partners to conduct an Organizational Assessment, including a "focused" IT review. Management Partners issued their Organizational Assessment in February IT Staff has evaluated the recommendations made by Management Partners and generallyagrees with all of them. IT Staff expects to present several proposals to the City Council during early 2009, including an amendment to the PVNET agreement, obtaining a dedicated domain registration to the Internet, bids for IT services and the proposed separation ofthe PVNET network from the City's network. The approval ofthis Service Agreementwith Paetec is the necessary first step towards the separation; Phase 1 of the network separation plan. 7-1

2 SERVICE AGREEMENT WITH PAETEC - PHONE AND INTERNET SERVICE PROVIDER December 16, 2008 Page 2 of 3 Management Partners' Recommentlation #17: To Obtain and Maintain A Dedicated Internet Service Provider ("ISP'~ Staff agrees with Management Partners' recommendation #17: to obtain and maintain a dedicated Internet Service Provider ("ISP") so that all"... telecommunications services [are] under City control". Additionally, Staff recommends establishing a dedicated, 3 MB ISP to: D D Provide more bandwidth to improve the speed of file transfer over the Internet for Staff users and visitors to the City's website; and Provide sufficient bandwidth to allow for growth, especially to enable connection of Staff users at Hesse Park and Ladera Linda to the City Hall network. Analysis ofadditional Cost for Dedicated 3 MB ISP - Paetec Service Agreement TeleProvider's, Inc., the City's telecom consultant, conducted an informal bid process for both voice and Internet services. Verizon, Paetec and Cogent participated. Staff strongly recommends the continued relationship with Paetec for three years based upon the following: 1) Paetec currently provides phone services to the City; 2) Paetec currently provides the dedicated T1 Primary Rate Interface ("PRI") that connects the City's existing Cisco Voice Over IP ("VOIP") system to the public telephone company system; 3) The measured local, zone and long distance rates quoted by Paetec were competitive and were the lowest of the bidders overall; and ) Paetec has demonstrated outstanding customer service and support for the past 2 years. If approved and implemented, the estimated additional annual cost is expected to be about $7,00 based upon the following table: Currently As Proposed Estimated Annual Cost of Voice Services $9,000 $9,000 Estimated Annual Cost of ISP Services - Paetec 0 1,000 Estimated Annual Cost of ISP Services - PVNET 6,600 0 Total: $15,600 $23,

3 ) SERVICE AGREEMENT WITH PAETEC - PHONE AND INTERNET SERVICE PROVIDER December 16, 2008 Page 3 of 3 FISCAL IMPACT The budget for the IT Program for FY08-09 is sufficient to absorb the additional cost of the dedicated ISP to be provided by Paetec. No budget adjustment is required. Attachments: Paetec Service Agreement 7-3

4 PAETEC Communications, Inc. Profit Assistant- Agreement 9/15/2008 PAETEC One PAETEC Plaza 600 Willowbrook Office Park Fairport, NY 150 SERVICE AGREEMENT This sets forth the terms of the Service Agreement ("Agreement") made this 15th day of September, 2008, (the "Effective Date") by and between PAETEC Communications, Inc. and US LEC Corp., on behalf of itself and its operating subsidiaries' ("PAETEC"), and City of Rancho Palos Verdes, a California Corporation ("Customer"). The term of this Agreement is. for 36 months ("Term"). Customer agrees to a Minimum Monthly Fee of $1, All services provided are subject to the terms and conditions below and on the attached Rate Schedule(s). i ' SERVICES BEING PROVIDED BY PAETEC TO CUSTOMER INFORMAnON CUSTOMER CUSTOMER NAME: City ofrancho Palos Verdes Local SERVICE ADDRESS: 3090 Hawthorne Blvd SwitchedLD Dedicated LD Rancho Palos Verdes, CA Toll Free (8XX) CONTACT NAME: Internet CONTACT PHONE: Calling Cards CONTACT FAX: Conference Calling BILLING ADDRESS: 3090 Hawthorne Blvd Equipment Rental Program Managed Router Support Rancho Palos Verdes, CA FEDERAL J.D. OR S.S. TAX EXEMPT (Attach fonus): None By signing this Agreement, the Customer hereby authorizes PAETEC to provide the Services listed herein and on any/all attachments. Each month Customer shall purchase at least the Minimum Mon thly Fee amount set forth above, calculated prior to application of any taxes or surcharges. t Customer has not elected to receive Managed Fraud Protection service from PAETEC. Please note, by not subscribing to PAETEC's Managed Fraud Protection service the Customer will be liable for unauthorized or fraudulent use of Voice Services as more fully set forth in Section 9 of the Standard Terms and Conditions located at This Agreement is subject to and controlled by PAETEC's federal and state tariffs as applicable, and/or by PAETEC's Standard Terms and Conditions of service and the service specific terms and conditions as located at such tariffs and terms may be modified from time to time and all of which are hereby expressly incorporated by reference. Information regarding Customer's rights and options pertaining to Customer Proprietary Network Information ("CPNI") is available at < The individual signing the Agreement on behalf of Customer is duly authorized to do so. Accepted by Customer: Authorized by PAETEC Communications, Inc.: ThiS offer IS VOidable by PAETEC Ifnot signed and returned to PAETEC by the 1th day ofdecember, 2008 US LEC COMMUNICATIONS INC d/b/a PAETEC Business Services.; US LEC OF ALABAMA INC d/b/apaetec Business Services.; US LEC OF FLORIDA INC. d/b/a PAETEC Business Services; US LEC OF GEORGIA INC. d/b/a PAETEC Business Services; US LEC OF MARYLAND INC. d/b/a PAETEC Business Services; US LEC OF NORTH CAROLINA INC. d/b/a PAETEC Business Services; US LEC OF PENNSYLVANIA INC. d/b/a PAETEC Business Services; US LEC OF SOUTH CAROLINA INC. d/b/a PAETEC Business Services; US LEC OF TENNESSEE INC. d/b/a PAETEC Business Services; and, US LEC OF VIRGINIA L.L.C. d/b/a PAETEC Business Services. QA-P F1 Version 8.3 (/1/2008) Page 1 of 10 7-

5 PAETEC Communications, Inc. Sales Agent Name Sales ID Teleproviders, Inc. Customer Naml Service Locatio) 'E', -* Item Oty Rate Total PRI FSLC (Network Charge) Direct Tnmk Overflow DID Station Numbers Managed Fraud Protection t NfA NfA NfA Profit Assista~ - Agreement Rate Schedule City ofrancho Palos VerdI 3090 Hawthorne Blvd, Rancho Palos Verdes, C Sales Agent Phone <Blank> Account Manager Tina Krause 1 Item Oty Rate Total 3.0 Mb Internet Local Loop Managed Router I NETVANTA /15/2008 Total Monthly Recurring Telecom $ Usa!!'e Fees'it* Local Local, Zones 1 & 2 Local, Zone 3 Directory Assistance LMS fmin l fmin l Lon!! Distance Switched Dedicated IntraLATA (Regional LD) fmin 2 IntraState fmin 2 InterState fmin 2 TollFree Inbound IntraState fmin 3 TollFree Inbound InterState' fmin' Canada $0.050 $0.03 fmin 3 Canada Inbound $0.070 $0.039 fmin' Intemational Plan' Gold Gold Operator Services Plan N/A N/A Conference Calling Plan Standard Standard Directory Assistance $1.250 $1.250 Calling Card $ per min I Billing Increments I 1 min 2 6 sec, 6 sec, 30 sec minimum per specified rate plan 'Rates are subject to change on 30 days notice via a bill message on customer's invoice. " Additional charges apply for all local, long distance and 8XX features, network access charge, router maintenance, CPE maintenance and directory listings. For the current features pricing, go to < Total Monthly Recurring Data Services $ 1, i Non Recul'rio!!iFI :es Item illy Rate Total TI Installation I Waived Service Order Charge Waived Managed Router Product Install I Data Accessories 232 Kit Total Non Recurring $ Accepterl hy ( ustomer Authonzerl hy PAKI'H ommudlcations, Inc QA-P F1 Version 8.3 (f1/2008) Page 2 of