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r� __ D GT 10 1994 TO: FROM: The Honorable Members of DATE. September 10, the Board of County Commissioners Bcor 58 F9UT 61 1984 FILE: THRU: Michael Wright SUBJECT:Purchase of Existing County Administrator Telephone System H. T. "Sonny" De General Services i ector REFERENCES: Lynn Williams Building and Grounds Superintendent DESCRIPTION AND CONDITIONS The staff of the General Services Division recently contacted AT&T Information Systems for pricing and inventory information concerning the possible purchase of our existing telephone system. The need to consolidate existing leases or execute a purchase option has become increasingly more apparent with the deregulation of the telephone industry. The existing telephone equipment serving the Administration Complex and a large portion of the Courthouse and Annex is provided by AT&T through several long term leases and monthly rental charges. Monthly charges for equipment only are presently in the neighborhood of $4,200 or $50,400 annually, which includes a recent rate increase of $103.63 monthly. ALTERNATIVES AND ANALYSIS The major components of the existing system (main computer, software, switchboard), are all covered by lease agreements ranging in remaining term from 19 to 42 months. All minor components (telephone sets, key telephone, jacks), are covered by monthly rental with AT&T and are subject to rate increases at any time. Southern Bell provides central office service trunks which are billed independently of equipment charges. The initial discussion with AT&T revealed that executing a purchase option could save the County an average of $16,700 annually over the next five years. The first year would be a $22,860.04 savings alone. MAINTENANCE Presently all payments made to AT&T -IS are either rental or lease payments and include maintenance and repair. Purchase of the existing equipment will include maintenance and repair (Warranty) for 90 days, with a monthly recurring charge for this service, based on equipment in place, following the warranty period. The projection for monthly maintenance following the warranty period, for all in-place equipment is $842.75. However staff feels there are several types of equipment which do not require frequent maintenance or repair and could be excluded from a maintenance agreement. This equipment (i.e.: single line telephone sets, line status indicators) could either be repaired in-house, repaired by private enterprise, or discarded depending on the severity of the defect and the original cost of the equipment. Exclusion of this type equipment could reduce monthly maintenance by $230.50. .M _I