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APPROVE FIBER LICENSING AGREEMENT WITH AT&T
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Authorize the City Manager to Execute a Fiber Licensing Agreement between the City of Stockton and Pacific Bell Telephone Company d/b/a AT&T California; and
2. Authorize the City Manager to execute all documents, including, but not limited to, modifications and amendments to the Fiber Licensing Agreement; and
3. Approve findings to support and justify an exception to the competitive bidding process consistent with Stockton Municipal Code 3.68.070.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of the motion.
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Summary
On September 11, 1995, Council adopted Resolution No. 95-0450 authorizing the execution of an agreement with AT&T (formerly Pacific Bell and SBC Communications) for the installation of the first phase of a Citywide fiber optic network to link City Hall, approximately 250 traffic signals, and three remote sites for Caltrans District 10, San Joaquin County, and the Municipal Utilities Department. Council subsequently approved six contract amendments (Council Resolution Nos. 01-0244, 02-0449, 03-0708, 05-0198, 06-0008, and 08-0408) to the original agreement to expand the fiber network. The original agreement provided for installation of the fiber network and for City use of the network at a nominal maintenance-only cost for a term of 15 years. The agreement term began in March 2003 and expired in March 2018. This communications network is owned by AT&T and used extensively by the Police Department for its camera/video system, and by the Public Works Department for its traffic management system. Continuation of this communications capability is vital. AT&T extended service until July 1, 2018, to allow for negotiation of a new contract extension.
AT&T and the City have negotiated a five-year fiber license agreement with two optional one-year extensions at a monthly service rate of $42,450, including normal maintenance and repair. The license agreement will allow the City to continue to use the existing AT&T dedicated fiber optic cabling, known as dark fiber. Staff assessed alternative technologies and market rates for dedicated fiber, and determined that extending the agreement as negotiated is the best option and the price is reasonable. Staff recommends Council authorize the City Manager to execute the five-year Fiber Licensing Agreement (the Agreement) with AT&T.
DISCUSSION
Background
In November 1994, the Citywide Traffic Signal System Upgrade Master Plan was approved by Council. The major goal of this master plan was to create a Traffic Management System for Stockton (STMS) wherein all traffic signals in the City could be controlled and monitored through a central traffic control system. The STMS would be comprised of the City’s traffic signals, a central traffic control computer and communication software, traffic monitoring and security cameras, and a fiber optic network serving as the communication backbone for the system. The fiber optic network would provide communication links to traffic signals and related equipment, transmit full motion real time video for use by the Police Department for surveillance, and enable the Information Technology Department to provide internet and communications to the Municipal Utilities Department, Public Works Municipal Service Center (Corporation Yard), City Hall, Main Police Department, and Fire Station No. 2.
On September 11, 1995, Council adopted Resolution No. 95-0450 authorizing the execution of an agreement with AT&T (formerly Pacific Bell and SBC Communications) in the amount of $2,820,000 for the installation of the first phase of a Citywide fiber optic network to link City Hall, approximately 250 traffic signals, and three remote sites at Caltrans District 10, San Joaquin County, and the Municipal Utilities Department (Caltrans and San Joaquin County were included as part of a reciprocal agreement for traffic management purposes). AT&T received a one-time payment to provide dedicated fiber optic network services to the City for 15 years. On May 15, 2001, by Resolution No. 01-0244, Council authorized the first contract amendment authorizing a project to expand the fiber network into developing areas. To date, Council has approved six contract amendments (Council Resolution Nos. 01-0244, 02-0449, 03-0708, 05-0198, 06-0008, and 08-0408) in which AT&T completed a total of seven phases of fiber extension work totaling $4,178,849.
Present Situation
AT&T completed the installation of the fiber backbone network under the original September 11, 1995, agreement and subsequent amendments. The City funded the installation of the fiber network largely through a variety of grant funded sources. The original agreement resulted in a fiber network that improved the City’s traffic management system through enhanced centralized management of signal timing and coordination. The original agreement provided for installation of the fiber network and for City use of the network at a cost of maintenance-only for a term of 15 years, which began in March 2003 and expired in March 2018. The agreement specified that upon expiration, the City could renegotiate another term and/or agreement for maintenance and service.
In July 2017, AT&T and the City commenced discussions concerning the pending March 12, 2018 expiration. Because the system had been in place for over 15 years, AT&T had to review and define the system architecture, structure, and functionality as part of contract negotiations. In addition, because AT&T no longer offers this type of fiber network product, AT&T needed to confirm that the existing service could continue as part of a new extended contract. AT&T extended service under the existing agreement until July 1, 2018, to allow for negotiation of a contract extension.
This communications network is used extensively by the Police Department for its camera/video system, by the Public Works Department for its traffic management system, and by the Municipal Utilities Department for its high speed connection to the Navy Drive plant to access the City computer network. Continuation of this communications capability is vital. AT&T and the City have negotiated a five-year fiber license agreement with two optional one-year contract extensions. The important terms of the agreement are as follows:
• The monthly recurring charge rate for City use of the dedicated (dark) fiber network will be $42,450.
• AT&T will be responsible for all normal maintenance and repair costs.
• The City may be responsible for repair or restoration costs associated with service interruptions beyond the control of AT&T.
• The monthly recurring charges will be billed to the City starting July 1, 2018.
• Additional fiber network locations could be added on an individual case basis.
This contract extension with AT&T will allow the continuation of existing fiber network service. The existing service is provided via direct buried fiber optic cabling throughout the City. Staff believes this is the best option for at least the next five years, and the cost is reasonable. Beyond this five-year window, wireless technology options, while currently not adequate to meet the City’s needs, may improve sufficiently to support City communication needs. Staff recommends that Council authorize the City Manager to execute the five-year Fiber Licensing Agreement with AT&T.
FINDINGS
Council may award contracts without competitive bidding in cases where it makes findings that support and justify an exception to the competitive bidding process. It is recommended that Council approve the findings below as part of the motion regarding the Agreement.
1. On September 11, 1995, Council adopted Resolution No. 95-0450 authorizing the execution of an agreement with AT&T (formerly Pacific Bell and SBC Communications) for the installation of a Citywide fiber optic network to link City Hall, approximately 250 traffic signals, and three remote sites for Caltrans District 10, San Joaquin County, and the Municipal Utilities Department.
2. AT&T received a one-time payment to provide dedicated fiber optic network services to the City for 15 years.
3. AT&T owns the fiber optic network.
4. Staff assessed alternative technologies and market rates for dedicated fiber, and determined that extending the agreement as negotiated is the best option and the price is reasonable.
5. The Fiber Licensing Agreement between the City of Stockton and Pacific Bell Telephone Company d/b/a AT&T California, which is the sole source vendor for this fiber optic network.
6. Council approves the Fiber Licensing Agreement consistent with the requirements of Stockton Municipal Code 3.68.070(A)(4).
FINANCIAL SUMMARY
The annual cost of this agreement is $509,400. The contracted costs will be split between the Public Works Department, the Police Department, and the Municipal Utilities Department as these departments are the primary users of the fiber optic networks. The Public Works Department has reciprocal agreements with the County and Caltrans to allow access to traffic monitoring systems, and their use of the network is minimal. The following cost allocations are based on current use of the network and the cost to provide service via other means, and are subject to change. Sufficient funding is available in the FY 2018-19 Adopted Budget for this contract as follows:
Department Funding Source Amount
Public Works Department Gas Tax Fund 030-3020-540 $175,000
Police Department General Fund Police 010-2470-530 $289,400
Municipal Utilities Dept. Wastewater Utility 431-4331-574 $ 45,000
Total $509,400
Future year funding for the contract will be allocated during the annual budget process.
Attachment A - Fiber Licensing Agreement with AT&T