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. <br /> MANAGEMENT SERVICES DEPARTMENT <br /> MIS DIVISION <br /> Memorandum No. 2007-06 <br /> May 15, 2007 <br /> MEMO TO: Honorable Mayor Osborne and City Council <br /> FROM: Steve Garm City Manager � <br /> Gerard J. u r, Assistant City Manager � <br /> David S. John ton, Manager, MIS Division� <br /> SUBJECT: City Offices Lon�Distance Service <br /> SUMMARY RECOMMENDATION: Staff recommends that Council approve the <br /> resolution at Enclosure 1, authorizing the Mayor to accept the proposal of AT&T and <br /> execute the contracts shown at Enclosures 2 through 4 for reduced rate long distance <br /> telephone calling service. <br /> BACKGROUND: With the impending upgrade to the city-owned telephone equipment <br /> al the Civic Center, staff has begun reviewing all aspects of city business network <br /> services, with a view to streamlining, consolidation, and cost reduction. Long distance <br /> telephone service beyond the Central Illinois calling area for land line telephones is one <br /> si�niticant cost element, averaging $1200 per month. This service is currently provided <br /> by McLeod Communications, under an open-ended (non-contractual) arrangement. With <br /> the intent of lowering costs, staff requested competitive proposals from McLeod and <br /> from AT&T for contracted long distance services for a fixed term. Current long distance <br /> service averages 11 cents per minute; McLeod's proposal offered a reduction in rate to <br /> �.5 cents per minute for both intra- and inter-state calling. AT&T proposes a two-tiered <br /> rate structure: 2.16 cents per minute for intra-state calls and 3.84 cents for inter-state <br /> calls. Analysis of past bills indicates that 75-80% of minutes billed are intra-state. 1'hus, <br /> for comparison purposes, the effective rate AT&T rate proposed is 2.54 cents per minute. <br /> Staff recommends accepting the AT&T proposal. To secure this rate, A`I,&T requires <br /> execution of three agreements: the AT&"T Business Network Service Agreement shown <br /> at Enclosure 2, the CompleteLink2.0 agreement shown at enclosure 3, and the ABN <br /> Loyalty Program Agreement shown at Enclosure 4. Together, these three agreements <br /> secure rates under existing tariffs, and guarantee two successive levels of discounts which <br /> secure the final discounted rates shown at Enclosure 5. <br /> POTENTIAL OBJECTION: None anticipated. <br /> INPIJT FROM OTHER SOURCES: None. <br /> 1 <br />