City of Culver City, California
Agenda Item Report
Meeting Date: 05/13/13 Item Number: A-2
CITY COUNCIL AGENDA ITEM: Approval of a Professional Services Agreement
with CTC Technology & Energy (Kensington, MD) for a Fiber Network Feasibility
Study in an Amount Not-to-Exceed $71,500.
Contact Person/Dept.: Michele Williams/IT
Phone Numbers: (310) 253-5950
Fiscal Impact: Yes [] No [X] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [X] Attachments: [X]
Commission Action Required: Yes [] No [X] Date: N/A
Public Notification: Agendas and Meetings – City Council (05/07/13) and Joanne Hovis,
President of CTC Technology & Energy Consulting (05/08/13).
Department Approval:
Michele Williams (05/01/13)
City Attorney Approval:
Carol Schwab (by H. Baker) (05/07/13)
Chief Financial Officer Approval:
Jeff Muir (by M. Noller) (05/07/13)
City Manager Approval:
John M. Nachbar (05/07/13)
RECOMMENDATION:
Staff recommends the City Council approve a professional services agreement with
CTC Technology & Energy (an engineering and business consulting firm) in
Kensington, MD for a fiber network feasibility study in an amount not-to-exceed
$71,500.
BACKGROUND:
The term “broadband” is used to describe high speed and high quality Internet
access which unlike “dial-up” modem access is always available and delivers
speeds exceeding 4 Mbps (megabits per second). This is the minimum speed for
defining broadband as set by the Federal Communications Commission (FCC) in
2010. Broadband access can be delivered via various media but fiber optic cable
(fiber) is considered the fastest infrastructure for broadband access because it has
the ability to transmit data across long distances at high transfer rates.
For the most part, private companies have traditionally been responsible for
deploying the infrastructure required to provide Internet access to communities.
However, they have not invested in the infrastructure to deliver high speed
broadband (speeds greater than 100 Mbps) via a fiber network. Experts agree that
these companies have not invested in the infrastructure because there is no
significant profit to be gained from upgrading service for an existing customer base.
Providing a faster or even a more reliable connection does not necessarily result in
additional revenue. In an effort to satisfy this unserviced need, local governments
are analyzing the benefit of investing in broadband/fiber infrastructures. City of Culver City, California
Agenda Item Report
There is common consensus that a community’s economic development has a direct
connection to its public infrastructure. The following is an excerpt from the National
Broadband Plan which was sponsored and authored by the FCC:
“Like electricity a century ago, broadband is a foundation for economic growth,
job creation, global competitiveness and a better way of life. It is enabling entire
new industries and unlocking vast new possibilities for existing ones. It is
changing how we educate children, deliver health care, manage energy, ensure
public safety, engage government, and access, organize and disseminate
knowledge.”
One of the benefits of investing in a broadband infrastructure is economic
development stimulus by supplying high speed Internet access to businesses who
have that requirement. This typically includes businesses in the entertainment,
video gaming and social media industries. Communities offering high speed
broadband have been viewed as holding a competitive edge by providing a service
that is not typically available in neighboring areas. Businesses that require
extensive bandwidths for conducting business are able to capitalize on the
community’s infrastructure investment.
In exploring benefits, the risks and deterring factors must also be evaluated.
Providing a sustainable network infrastructure for commercial use will demand a
significant capital investment and analysis should be performed to calculate potential
tangible and non-tangible returns.
DISCUSSION:
In discussions with current and potential Culver City businesses, questions related to
availability of high speed broadband routinely arise. During such a discussion, the
City Manager was made aware of a successful broadband project in the City of
Santa Monica. The City Manager engaged the Directors from Community
Development and Information Technology to initiate discussion and additional
research. Santa Monica made a capital investment to run city-owned fiber
throughout the City. This has turned into an ongoing source of revenue by leasing
dark fiber and providing lit services to city businesses. Staff from Culver City and
Santa Monica are exploring partnership possibilities which could result in Culver City
businesses benefiting from a fiber infrastructure as well.
Staff recommends that before initiating a project of this magnitude, thorough
analysis should be performed to identify its feasibility and to analyze if there is a
potential business model that would result in positive returns for the City. This type
of analysis will be beneficial even if the City pursued a partnership with Santa
Monica or decided to implement a different business model.
City of Culver City, California
Agenda Item Report
Staff identified CTC Technology & Energy (CTC) as a reputable consultant in this
field. The firm was established in 1983 and primarily works with government
entities. One of their core missions is to assist agencies with analyzing feasibility
and determining economic projections for deploying a fiber network. Their
employees have expertise with the entire process including the technical design of
the network, business model development and implementation of the resulting plans.
CTC has worked with the cities of Los Angeles (Department of Water & Power), Palo
Alto, Portland (Oregon), the City and County of San Francisco, Seattle, and
Washington, DC. They have also provided consulting services to the State of New
Mexico, State of Maryland, and the University of Illinois.
Staff contacted client references from the City and County of San Francisco, the
State of Maryland and the State of New Mexico. These agencies conveyed very
positive experiences regarding the respective work performed by CTC. While each
project was unique, it was apparent that the vendor is experienced in the area of
fiber network infrastructure planning and has a thorough knowledge of the various
business model alternatives that are suitable for public entities.
As a matter of policy, CTC maintains a non-biased/neutral position. They are not
associated with any private vendor within the telecommunications industry nor do
they sell any equipment nor bid on any construction contracts.
Staff recommends contracting with CTC to perform a Fiber Network Feasibility
Study. The proposal (attachment 1) provided by CTC details the following high-level
contractual deliverables:
1. Onsite Strategy Sessions
2. High Level Design for Network Infrastructure to Meet the City’s Goals
3. Business Model and Strategies to Support Potential Network Development
4. Financial Model that will identify Opportunities and Risks
5. Finalized Project Report that summarizes Findings and Recommendations
Exclusion from Bidding Requirements
This procurement is excepted from the bidding requirements per Culver City
Municipal Code Section § 3.07.085 as the proposed contract is for professional or
personal services.
FISCAL ANALYSIS:
Contracting with CTC Technology & Energy would result in an expenditure of
$65,000. Staff also recommends a 10% contingency for change orders to the
contract which would be approved by the City Manager.
City of Culver City, California
Agenda Item Report
There is sufficient funding budgeted in the Capital Improvement Fund – Information
Technology Improvements and Acquisitions (42080000.619800.PZ388) for a total
amount not to exceed $71,500.
This expenditure is intended as an investment that will ultimately be offset by
potential future revenues, in addition to the economic potential and advantages
gained.
MOTION:
That the City Council
1. Approve a professional services agreement with CTC Technology & Energy
for a Fiber Network Feasibility Study in the amount of $65,000; and,
2. Authorize the City Manager to approve contract change orders for additional
services in an amount not-to-exceed ten percent (10%) of the contract if
deemed appropriate ($6,500 for a total not-to-exceed amount of $71,500);
and,
3. Authorize the City Attorney to prepare/review the necessary documents; and,
4. Authorize the City Manager to execute such documents on behalf of the City.