City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
That the City Council approves the purchase of 101 Personal Computers (PCs) from
Dell for $115,939.52 from the Computer Replacement Fund 30724100.
BACKGROUND:
Personal Computers (PCs) are a component of almost all office jobs in the City.
Even field workers (inspectors, engineers, firemen, policemen, etc.) often use PCs
after returning from the field to input data, write reports, and communicate with
peers, supervisors, and the public. In addition, PCs are often attached to critical
systems that run devices and services in the background. Examples include
building monitoring, video streaming, specialized printers, and many others.
In 1997 the City began a major replacement and expansion. More than half of our
current PCs were purchased between 1998 and 2001. They were purchased in
phases over a period of approximately 4 years, and were all similarly configured.
Warranty support for this inventory is over and the City maintains them on a parts
and staff labor basis.
2005 marks four to seven years of service for these PCs. Along the way they have
received some upgrades such as hard disks, memory, and other components to
extend their useful lives.
Over the past three years many of these machines have begun to experience
intermittent failures, which have impacted the production of the staff using them.
During June 2004 lack of hard disk space stopped efforts to update the antivirus
Meeting Date: 10/24/05 Item Number: C-4
AGENDA ITEM:
Purchase of Replacement Personal Computers from Dell, Inc.
Contact Person/Dept.: David Leuck Phone Number: (310) 253-5961
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: [X]
Public Notification:
Master Notification List (xx/xx/05), Dell (Derek Shade & Chris Herry 9/29/05)
Department Approval:
John Richo 10/12/05
CAO Approval:
Jerry Fulwood 10/19/05
City Controller Approval:
Marlee Chang 10/18/05City of Culver City, California
City Council Agenda Item Report
software and add security patches on systems during a virus outbreak until the disks
could be replaced on more than 25 PCs in the Police Department.
DISCUSSION:
In private industry PCs have an expected life of three years, and are purchased with
three year warranties. After three years the individual components (hard disk,
memory, power supply, motherboard) of a PC are at a high risk of failure requiring
replacement. In the ROI, (return on investment) utilized in the private sector it is
more cost effective to replace the PC. Another key factor influencing replacement is
the fact that over time, software vendors release new software, or upgrades to
existing software that require PCs with more speed, processing power, or memory in
order to function adequately.
Due to budget constraints, cities and governments have extended the life cycle of
PCs to approximately 4 years. The attached survey (Attachment 1) was taken by
MISAC (Municipal Information System Association of California). It includes
responses from 18 agencies covering the life cycle, and funding source for the
replacement of their PCs.
Of the PCs presently in City service (excluding the Police Department) the age
breakdown is:
Year Purchased Number
1998-99 45
2000-01 156
2002-05 202
The breakdown at the Police Department is:
Year Purchased Number
1998 44
1999 8
2000 6
2001 4
2002 5
2003 4
2004 39
The City’s software maintenance agreement with Microsoft automatically licenses
the latest version of Windows, Office, and several other tools as they are released.
The next major Microsoft operating system and Office upgrade is due in 2006. It is City of Culver City, California
City Council Agenda Item Report
our understanding that many of our older PCs will not effectively run the next
generation of software.
In the 2005-2006 Capital Budget $47,000 was requested by the Police Department
and $77,000 requested by IT. These funds were deleted from the Capital
Improvement plan 42000388 and a Computer Replacement fund (30724100)
created and approved by the CAO and Council. IT is recommending the
replacement of approximately one third of the PCs purchased prior to 2002 that are
in normal use by city departments. We will also replace all of the PCs purchased by
the Police Department in 1998. Most of the Police PCs will be retained for a special
project.
Vendor Selection
For some time the City has standardized on Dell business class computers. Dell
provides a number of advantages as the City’s vendor. These include:
Industry compatibility. As the largest PC maker in the world Dell drives
standards in quality and compatibility.
Free shipping. Purchased under the California Multiple Award Schedule
(CMAS), municipalities pay no shipping costs on systems.
Automatic increase to 3 year warranty on all PCs. Next business day on
parts and labor.
Call in support for hardware on a 24x7 basis.
Longer product support life cycle. Dell is able to provide parts for their own
systems from a worldwide support system. Custom built clone systems can
only be supported as long as the local manufacturer can secure parts.
The city has been standardized on Dell PCs for some years. From a
maintenance and support perspective it is far more efficient to support a
standardized inventory.
FISCAL ANALYSIS:
Replacement funding for technology is an ongoing issue with California local
governments. Attachment 1 contains a summary of how 18 California communities
and special districts handle the issue by policy, in practice, and contains comments
on funding. Most of these agencies have established, and funded, technology
replacement funds. In recent years, due to financial constraints, we have not been
able to replenish our Technology Equipment Replacement Fund. The department
also considered leasing. Attachment 3 contains responses from local agencies on
their buy/lease practices. We have also discussed this issue with the City Controller,
and she agrees with the buy option. City of Culver City, California
City Council Agenda Item Report
For this purchase, IT will fund the acquisition through Replacement account
30724100 (Computer Replacement Fund). One Hundred One (101) PCs will cost
$115,939.52 including tax and free shipping. See Attachment 2 for Dell’s quote.
The purchase will be made from the State of California’s CMAS program directly
from Dell. This program gives the City preferential pricing using the buying power of
the State of California. The CMAS contract is overseen by the Department of
General Services. Public Contract Code (PCC) Sections 10290 et seq. and 12101.5
include approval for local government agencies to use CMAS for acquisition of
information technology and non-information technology products and services. AB
2866 and AB 1684 authorize local government agencies and school districts to use
CMAS and other Department of General Services agreements without competitive
bidding.
ATTACHMENTS:
Attachment 1: Computer Replacement Policies by City
Attachment 2: Dell quotations 247212944
Attachment 3: Buy/Lease Survey Comments.
MOTION:
That the City Council:
1. Approve the purchase of 101 Personal Computers (PCs) from Dell for
$115,939.52 from the Computer Replacement Fund 30724100.
MEETING DATE 10/24/05
AGENDA ITEM Purchase of Replacement Personal Computers from Dell
ATTACHMENTS
Pages|109| Computer Replacement Policies by City 1-3|109| Dell quotation 247212944 4-5|109| Buy/Lease Survey Comments 6-8Personal Computer Replacement Policies by City
City
PC Policy
Life
PC Usual
Life Source Comments from MISAC Members
City of Davis 4 4
We have a 4 year replacement cycle for desktops laptops and servers and collect yearly from
each department $ for a replacement fund ($500/year/pc)
San Carlos
3 PCs /4
Laptops Identical to SAWPA
Santa Ana Watershed Project Authority
3 PCs / 4
Laptops
SAWPA has an (as yet unwritten) policy to replace desktop every 3 years laptops every 4 years
and servers every 4 years unless conditions require otherwise Like many others this is a soft
, number some machines are more than 4 years old By using a flowdown replacement process
Power Users (GIS CAD other high end computing users) actually have their machines replaced
more often because they have a need for more capability their 18 month old machine is more
than enough for folks that do nothing but Word Processing and check email and even though its
an older machine they feel like they are getting a new machine This process requires more
labor than doing a direct replacement of an obsolete machine for a brand new one but it seems to
help the users better (in my humble opinion) Anybody else have thoughts on this process'?
Anaheim
3 PCs / 2
Laptops
In Anaheim we lease our 1600 PCs and Laptops The PC refresh is 3 years and the laptops are 2
years The users like the Idea because they know they are going to get the equipment refreshed
plus they know how much to budget each year for their lease payments Our servers are replaced
as needed I pay for the enterprise servers The users pay for their own specific use servers up
front and then I pay for the ongoing maintenance and support for the life of the server
Mountain View 4 3 to 5
The City of Mountain View has an equipment replacement plan for (computers vehicles and radio
equipment) In the plan PC have a four year life and are budgeted at $1 425 each Therefore the
each fund that has PC put is 1/4 of the replacement amount each year and in the 4th year their is
enough money to replace the machine When it comes to the replacement some PC are replaced
sooner (3 yrs but very few) and several go 5 or 6 years depending on need We are now being
asked to make more of the PC last 5 years Laptops are also 4 years NT servers 4 years and
UNIX servers 7 years
Redding 3
We plan on a 3 year replacement however some departments will go longer Its entirely up to
them they budget monies for the replacements and we order/migrate/install Most of the server
replacements I T will budget for however if it is a department specific server then again they
must provide the dollars If the PC s get too old to do the job they want we inform the department
that they must replace the unit With the current budget environment I can see departments using
equipment longer than we/they really want
4.--.."
Useful = Kept as long as the device will run the application the OS can be run on it until it can t be repaired or it suffers 3 4 software failures in on month
Policy Life and Usual Life are in years of servicePersonal Computer Replacement Policies by City
Torrance
4 PCs / 3
Laptops
'The City of Torrance has a replacement fund for PCs (4 years) Laptops (3 years) servers (3
years) We charge the departments each year for replacement costs equipment cost / useful
life Once equipment is fully funded in the replacement fund we do not start charging them again
unless they actually replace the equipment
Lodi Useful
We at the City of Lodi created a PC Replacement Fund that covers computer replacements for all
departments except enterprise fund departments We have no written policy but handle
replacement requests on a case by case basis We will not replace a PC simply because its 3
years old or the wrong color We retire computers when its clear that the system has reached the
end of its useful life This arrangement has worked well so far but there may come a day when a
written document is in order
Redondo Beach 3|1010|Workstations and laptops are on a 3 year replacement cycle (lease with Dell) We generally push
servers out to 4 years We just seeded a replacement fund this year and will start using it FY03
04 for all IT equipment not on lease
Inland Empire Utilities Agency 4 PCs
The Inland Empire Utilities Agency replaces workstations every four years Laptops (we only have
a few) and servers are not on a set schedule The IS Department budgets for whatever the
appropriate number turns out to be in our capital budget each year As I stated in an earlier e
mail we replace our PC s every 4 years We try to minimize the trickle down effect because as
you state it is very labor intensive However in most cases it would be impractical for us to
directly replace the oldest machines with new ones So we try to limit trickle downs to one level
(i e a power user gets the new machine and his/her replaced machine goes to the person with
the obsolete machine to be taken out of service)
Costa Mesa 4 5
For Costa Mesa PC s are supposed to be replaced every 4 years the reality is closer to 5 NT
servers and large Data Base HP 9000 systems are sized to last 5 years with the reality being
closer to 6 Every year I renew my battle for a replacement fund Every year I hear the same story
there isn t enough money to put aside any for this type of program With the current budget
issues I probably won t even bring it up this year
Watsonville 4 to 5
In Watsonville we don t have a fixed timetable for replacement IS looks at the support issues with
a given platform and establishes minimum configurations about two times a year Because we re
starting our budget cycle now we ve distributed this to all departments so they can begin planning
for next year As a fact we probably get 4 5 years from a PC workstation sometimes longer
Amazingly we are still using the original Novell server we installed 8 or 9 years ago (it doesn t do
very much anymore but it works) Each department is responsible for budgeting their own
workstations There is a centralized Capital Improvement budget set up to take care of centralized
servers networking infrastructure and the like IS manages this funding
Moreno Valley 3
At Moreno Valley PCs are replaced every three years We try to replace servers in that time frame
also but sometimes that doesn t happen No more that 4 years
eisz=e„Ni
yu
Useful = Kept as long as the device will run the application the OS can be run on it until it can t be repaired or it suffers 3 4 software failures in on month
Policy Life and Usual Life are in years of service
',.........-1Personal Computer Replacement Policies by City
Simi Valley 4
Simi Valley has created a replacement program for different types of computer and network
equipment including desktop PCs The program is documented through our annual budget policy
items as well as our five year IT Strategic Plan (INSIGHT 2007 in final revision) Not all
equipment we want to be added gets approved Last year we tried to get our mainframes and
laptops added to the contribution process but no go Perhaps this year We review/update our
strategic plan annually and then get buy in from the City Manager/City Council In theory we
establish the replacement amount and life span le PC/Desktop = $2 400/4 yrs Since we have
approx 400 desktop PCs 25% (100) can get replaced each year During the annual budget
appropriation phase we add $600 each year for each PC in the inventory to our Computer
Replacement Fund During the annual budget process we identify what needs to be replaced
and hopefully we get the approval to spend the money For the current FY02 03 we got approval
to replace 100 obsolete PCs but only ordered 60 Next year will involve around 130+ obsolete P
Lodi 3 to 4
The City of Lodi has a PC Replacement fund that is administered by the IS division The criterion
for replacement has mostly to do with serving the needs of the user rather than age of the
machine or any other arbitrary factor We have no written policy at this time because we ve
elected to consider requests on an as-needed case by case basis The policy has worked well
so far We have some PCs that have been replaced after three years but we have a number of 4
year-old boxes still in service Servers are replaced when they can no longer provide suitable
performance for the demands made upon it As you can see we have no absolute recipe for box
replacement we try to squeeze the last drop of use from each machine until it is impractical to
keep them
Pinole 3 to 4
In Pinole we are currently on a 3 year rotation for PCs per directive of the City Manager however
with the recent budget problems we will be proposing a 4 year cycle We have about 125 PCs in
all offices so there would be a decent savings Laptops are on the same rotation schedule as the
PCs and servers are on a 4-5 year cycle depending on increased requirements placed on them
IS budgets all computer peripheral and software related costs with the annual budget
Santa Barbara 4 4
In Santa Barbara our replacement policy is all PCs Servers and Laptops are eligible after four
years IT budgets for all General Fund replacements and Enterprise Funds budget for their own
Eastern Municipal Water District Useful Useful
At Eastern Municipal Water District we replace computers when one of the following conditions
exist 1 It breaks down and can t be fixed 2 It blue screens 3 or 4 times in a month 3 It won t
run the application needed 4 It can t run the standard operating system We are standardized on
100% (almost) NT workstations We have a very few W 2000 We plan to upgrade to XP this
year and next We have some computers that have been in place for 6 years and are working fine
We try to extract every bit of value out of them we can
Lk) Useful = Kept as long as the device will run the application the OS can be run on it until it can t be repaired or it suffers 3-4 software failures in on month
Policy Life and Usual Life are in years of service
lo......."DELL
QUOTE #
Customer #
Contract #
CustomerAgreement #
QUOTATION
247212944
39723471
N39913654
NASPOIWSCA # A63307
Quote Date 9/29/05
Date 9129/05 9 36 47 PM
Customer Name CITY OF CULVER CITY
TOTAL QUOTE AMOUNT:
Product Subtotal
Tax
State Environmental Fee
Shipping & Handling
Shipping Method
$106,357 04
$8,774 48
$808 00
$000
Ground Total Number of System Groups 1
GROUP:|1010|QUANTITY: 101 SYSTEM PRICE: $$09.87
GROUP TOTAL: 91,796.87
OptiPlex GX620 Minitoviei Pentium - 4 650/3 4GHz 2M 800FSBHyperThreading - (221
8365)
NTFS File System Factory install (420 3699)
1 OGB Non ECC 533MHz DDFt2 2x512 Opt'Plex GX620 ori20 (311 5024
USB Enhanced Multimedia Keyboard English OptiPlex (310-6611)
No Monitor Selected OptiPlex (320 3704)
Integrated Video GMA950 Dell OptiPlex GX620 (320-4269)
80GB SATA II 7200 RPM Hard Drive with Data Burst Cache OphPlex GX620 or
GX520 (341 2247)
3 5 inch 1 44MB Floppy DnveOptiPlex GX620 or GX520 (341 2266)
Windows XP Home Service Pack 2with Media Dell OptiPlex English Factory Install
(420-4849)
Dell USB 2 Button Opticaf-Mouse with SO-roll Dill OptiPlex (310 6609)
RoHS Compliant Lead Free Chassis and Motherboard Dell OptiPlex (341 2663)
48X32 CDRW/DVD Combo with Cyberlink Power DVD Dell OptiPlex GX620 or
GX520 Desktop or Minitower (313 3337)
integrated AC97 Audio OptiPlex (313 8170)
Internal Chassis Speaker Option Dell OptiPlex GX620 or GX520 Minitower (313
3350)
Type 3 Contract Next Business Day Parts and Labor On-Site Response Initial
Year (900 6630)
Type 3 Contract Next Business Day Parts and Labor On Site Response 2Yk
Extended (960 2402)
Gold Technical Support ServiceOptiplex 3 Years 1 866 876 3355 (DELL) (960 2692)
Standard On Site Installation Declined (900 9987)
Execute Disable Bit for Microsoft Windows XPSP2 set toOFF Dell OptiPlex (463
7780)
—
Base Unit
Processor
Memory
Keyboard
Monitor
Video Card
Hard Drive
Floppy Disk Drive
Operating System
Mouse
TBU
— —
CD ROM or DVD ROM Drive
Sound Card
Speakers
Service
Service
Du*line
Installation
Misc
(H)SOFTWARE & ACCESSORIES
Quantity
Unit
Price
Product Total
Dell E173FP 17 Inch Flat Pane117 0 Inch Viewable Image Size OptiPlez and
Precision Customer Install (320 3997)
101 $24317 $24 560 17
State EnvironmentalFee for display 15 inches less than 35 inches (600:0002) 101 $800 $806 001
Number of S & A Items: 2
S&A Total Amount:
$25,368.17
COMMENTS
CONTRACT PRICE 1335 19|109| 106357 - 04
TAKE ALL AT ONCE
CHRIS HERRY
SALES REP Derek Shade 7AM 5PM CT Mon Fri PHONE 1 800 879-3355
Email Address Derek_Shade@Dell corn ( Dell Quote ) Phone Ext 72 80421
For shipments of certain products to California, a State Environmental Fee of up to $10 per
item has been added to your quote
For your convenience, your sales representative, quote number and customer number
have been
included to provide you with faster service when you are ready to place your order You
may also
place your order online at www dell corn/quote
This quote is subject to the terms of the agreement signed by you and Dell, or absent such
agreement,
is subject to the applicable Dell terms and conditions agreement
Prices and tax rates are valid in the U S only and are subject to change
**Sales/use tax is a destination charge i e based on the ship to address on your
purchase order
Please indicate your taxability status on your PO If exempt, please fax exemption
certificate to
Dell Tax Department at 512 283 9276 referencing your customer number
If you have any questions regarding tax please call 800 433 9019 **
All product and pricing information is based on latest information available Subject to
change without
notice or obligationBuy/Lease Survey Comments
Hesperia
One time purchases seem to be easier for City Council's to swallow as opposed
to a lease that may span several budget years
Santa Ana
In Santa Ana, we buy PCs Without the tax consequences of the private sector
leasing just doesn t pencil out for us
Ventura
In the past I have leased servers but I have always bought desktop systems It
may be worth doing a cost analysis on buying versus leasing but at today s
prices buying is probably the better way to go Besides how would Public Safety
pick our pockets if we leased everything'?
Covina
I agree with the fact leasing is not cost effective also, a $0 value PCs can still be
use in many ways Leasing doesn't give you flexibility in modification of the unit
Most of the time when the lease term is up the vendor may hesitate to pickup the
$0 value PC, leaving the disposing work for the City anyway i e other use for
old/obsolete PCs spare parts for troubleshooting/testing? training computers'?
terminal emulation'? monitoring machines'? or just simply donate them to local
schools etc,
Monrovia
The last time I checked leasing was not cost effective Leasing shines when you
have a residual value or you don't use all of the 'useful life' On PC's, our
previous messages on the list-server have shown that most departments are
replacing the systems every three years After a three year lease the residual
value is zero The lease basically becomes a time pay We buy PC's for cash
The total lease payment assuming no residual after three years is basically a
loan I believe that it was around $300 more than purchasing the unit outright
Leasing could make sense if your procedures for disposing of assets is
cumbersome At the end of the lease you just have them pick it up — No auction
no paperwork etc We donate the systems to the boys and girls club, the school
district or another local organization Then comes the question of " does the
computer need to be capitalized'?" In our case we are writing off the system as
this years expense The dollar value of a system is getting below the threshold
that we want to track
( 6)
Page 1 of 3Buy/Lease Survey Comments
San Bernardino
We buy Vendors haven t made it cost effective to lease yet When they do
we II consider leasing
National City
BUY National City used to lease equipment and contract out network services
Last year, the City s IT infrastructure was revamped, the IS Dept was created,
and we have gone ahead to purchase all of our equipment
Westminster
Buy---but I have also been asked to look into leasing—so let me know what you
find out
Beverly Hills
We buy everything John I have looked at this issue but the cost of money is
such that it is better for us to use our own internal funds for the purchases and
with deprecation just bank the replacement fees for the future Everyone has
different conditions to deal with but for us at this time it is better to just purchase
the equipment
Bakersfield
MIS buys and leases to departments (equipment replacement fund)
Anaheim
In July we went out and leased desktops and laptops from Gateway for all of the
General Fund departments Some of the non General Fund departments chose
to buy I hope this helps
Pasadena
We do not lease PC s Our past studies have shown that it is not cost effective
for us For additional information, you might contact our purchasing administrator
(who did a lot of the cost studies)
Hermosa Beach
We buy' However, I personally would rather lease especially big ticket items in
order justify more frequent upgrades
Camanllo
We looked into leasing and decided to buy We are continuing that practice
( 7 )
Page 2 of 3Buy/Lease Survey Comments
Downey
We have started leasing our computers from Tangent
Glendale
Buy But are considering Lease
Irvine
Buy - and I would like a copy of the statistics if I could get them when you are
done My council is asking the same question!
(g)
Page 3 of 3