5.2. ERMUSR 04-08-2003 k River y
iviunicipal Utilities
322 King Avenue phone: 763.441.2020
Elk River,MN 55330 Fax:763.4418099
April 1, 2003
To: Elk River Municipal Utilities Commission
John Dietz
Jerry Takle
James Tralle
From: Bryan C. Adams
Subject: Phone System
At the last couple of Elk River Municipal Utilities Commission meetings, we have been
discussing a different phone system. The City of Elk River is also exploring a different
phone system as well. This commission has expressed a desire to utilize the same phone
system as the City to enhance internal communication. Utility staff has expressed some
concerns regarding phone security and reliability.
City staff has recommended at the March 31, 2003 City Council meeting to purchase a
traditional PBX phone system by Inter-tel instead of the more complicated Voice/IP
system initially proposed. The Inter-tel system will be purchased thru the State of
Minnesota Cooperative Purchasing Venture. The Inter-tel phone system and associated
system architecture satisfies our security and reliability concerns. Each remote site from
City Hall including our Utility will have a stand alone phone system with outside lines
coming into that site. All of the sites will be linked together through North Star Access
System for transferring calls and intemet access using City Hall as the base hub. North
Star Access fiber telephone system is also looped. If a leg fails for any reason, calls can
be routed through the other leg after manual switching is complete.
Enclosed is the schematic sketch of architecture of the proposed system. The estimated
cost to install our portion of this phone system is $19,633.90. We do not know the shared
costs to us, if any, for the City's system.
Staff recommends purchasing the Inter-tel phone system to secure the quoted pricing.
This system will not be installed until late winter of 2004.
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Item 2.
City of
Elk
River
MEMORANDUM
TO: Mayor and City Council
FROM: Lori Johnson, Finance Director
DATE: March 31, 2003
SUBJECT: Consider Award of Phone System Bids
The city recently requested telephone system bids for a voice over intemet protocol (VoIP)
system. Staff wanted to evaluate this system against a traditional PBX to determine whether
the anticipated additional cost justified the additional VoIP benefits.
The city received bids from six vendors for seven telephone systems. Bid prices ranged from
$74,905.00 to $160,198.65. However, the low bidder did not include all of the required
equipment so that bid was not considered valid. The next lowest bidder, Inter-Tel, bid a
system that is VoIP enabled meaning it can function both as a traditional PBX and a VoIP
system. Inter-Tel's bid was $94,845.59. The lowest bid for a true VoIP system was
$105,131.00 plus the cost to connect the off site locations.
After much research and thorough review of the systems proposed, IT Coordinator Bob
Pearson is recommending that the city not proceed with the VoIP system because the
benefits do not out weigh the additional cost of over $10,000. The attached memo from
Bob provides more technical information on his recommendation to reject all of the
proposals and award the telephone contract through the State of Minnesota's Cooperative
Purchasing Venture.
Inter-Tel is a contract holder under the Cooperative Purchasing Venture; therefore, the city
may purchase off the State contract without going out for bids. Inter-Tel and state
representatives have confirmed that the city may purchase a system from Inter-Tel at the
price Inter-Tel submitted under the city's request for proposals. This price is substantially
less that the State contract price. Selecting this system will allow us to choose between
traditional or VoIP as it best fits our needs for the various city departments and locations
including the fire, public works,wastewater, and recreation departments. The system has also
been designed to accommodate the needs of Elk River Municipal Utilities. Although the city
will have one telephone system, it will operate as though there were two or possibly three
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separate entities so that city hall, public safety, and utilities will each have individual systems
within the larger system.
Both Bob and I will be at the meeting to answer any additional questions you may have
about the telephone systems and staff's recommendations.
Action Requested
First, City Council is asked to reject all of the telephone bids received on March 13 because
the additional cost of a VoIP system exceeds the additional system benefits. Second, the
City Council is asked to authorize the purchase of an Inter-Tel telephone system through
Minnesota State Cooperative Purchasing Venture contract #428806 at a cost of
approximately $94,845.59.
S:\COUNCIL\Lori\phone bid award.doc