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Home My WebLink About1999-05-10 City Council (11)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 12 FROM: ¯CITY MANAGER DEPARTMENT: UTILITIES DATE:May 10, 1999 CMR:228:99 SUBJECT:REQUEST FOR APPROVAL OF A BUDGET AMENDMENT ORDINANCE IN THE AMOUNT OF $380,000 TO CREATE CAPITAL IMPROVEMENT PROJECT #9916 THE FIBER TO THE HOME TRIAL PROJECT RECOMMENDATION Staff recommends that Council adopt the attached Budget Amendment Ordinance (BAO) in the amount of $380,000 for the Fiber to the Home (FTTH) trial project and create Capital Improvement Program Project (CIP-9916). BACKGROUND On April 5, 1999 the City Council reviewed an information report outlining the alternatives for providing high speed, advanced telecommunications connectivity for all Palo Alto residents and businesses (CMR: 162:99). In response to the report, the Council directed staff to proceed with a Universal Telecommunication Services Request for Proposal (UTS-RFP) and a medium-sized FTTH trial project in the Community Center neighborhood on a parallel track. Council’s direction was to return to Council with a BAO to establish funding for the trial. Staff was also directed to return at the end of the trial with an evaluation addressing market assessment, legal issues, technical feasibility, cost of construction and operation staffing, contracting, and payback time. Staff has estimated the cost of the FTTH trial project within the proposed boundries (Attachment C) to be $380,000. The proposed project will design and construct an ethernet. network providing data services at 10 megabits per second(Mbps) for 56 homes and 100 Mbps for 13 homes. The proposed network design Will include: 25,000 linear feet of overhead multimode fiber optic cable with a pair of glass fibers extending from the Newell CMR:228:99 Page 1 of 3 Avenue switch site to each home, and a gigabit ethemet link to the Compaq Intemet Exchange using the City’s single mode fiber network. In addition to the construction of the fiber optic network, the funding will also be used for the preparation of bid specifications and the evaluation of Internet access providers for the selection of the network operator. To complete the UTS-RFP and the FTTH trial project,, necessary additional staffing and funding will be required. These resources include: a consultant to assist with the evaluation of the UTS-RFP and design of the FTTH ($40,000), a Senior Power Engineer with fiber optics experience to manage operations and construction of the FTTH Project ($121,000), a vehicle and office equipment for the Senior Power Engineer position ($25,000). The resources listed above will be requested as an Amendment to the City Manager’s Proposed 1999-01 Budget. Staff was directed to investigate the availability of transportation grants for projects related to telecommuting to help fund the FTTH trial project. Two possible sources of grants were found, Transportation Fund for Clean Air (TFCA) and Congestion Mitigation and Air Quality (CMQA) Funds. The TFCA grant can not be obtained in time to fund the project since the next application period is in February, 2000. CMQA funds would not apply to FTTH trial because they cannot be used for capital work. RESOURCE IMPACT The $380,000 requested will be taken from the Electric Distribution Rate Stabilization Reserve and the Electric Fund, Capital Improvement Program Project-FTTH Trial Project, (CIP-9916) will be created. This project is expected to be 100 percent reimbursable over a five year period, as directed by Council. No revenues are anticipated for the current fiscal year. However, revenues from one-time service connection fees ($1,200) are estimated to be approximately $84,000 in fiscal year 1999-00. Budget cost for future years will come from revenues of approximately $62,000 per year from the $75 monthly service fee. PXII~CY IMPLICATIONS This report does not represent any change to existing City policies. ZIMELINE The following is the proposed schedule for this project. Council Approve Funding Request FTTH Trial Cost Presentation to UAC Complete Engineering Specification FTTH Trial Cost Recommendation to Council Issue Requests for Bids Award Contracts Start Construction Start Operation May 1999 Aug 1999 Aug 1999 Sep 1999 Sep 1999 Dec 1999 Jan 2000 Jun 2000 CMR:228:99 Page 2 of 3 Evaluate Network Performance Preparation of Trial Results Trial Results to UAC and Council Dec 2000 Jan 2001 Feb 2001 ENVIRONMENTAL REVIEW A mitigated negative declaration for the City’s Fiber. Optic infrastructure project was approved by the Director of Planning and Community Environment on November 25, 1996. Any project that may be undertaken as a result of the RFP or FTTH trial will be required to adopt the mitigation measures identified in the negative declaration. ATTACHMENTS Attachment A: Budget Amendment Ordinance Attachment B: FTTH Trial Project CIP Project Description Attachement C: FTTH Trial Project Boundry PREPARED BY: Tomm Marshall, Engineering Manager DEPARTMENT HEAD: Director of Utilities CITY MANAGER APPROVAL: 2ity CMR:228:99 Page 3 of 3 ORDINANCE NO. ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE BUDGET FOR THE FISCAL YEAR 1998-99 TO PROVIDE AN ADDITIONAL APPROPRIATION OF $380,000 AND TO ESTABLISH CAPITAL IMPROVEMENT PROJECT (CIP) NUMBER 9916, FIBER TO THE HOME (FTTH) TRIAL WHEREAS, pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Council on June 22, 1998 did adopt a budget for fiscal year 1998-99; and WHEREAS, the City Council authorized staff to solicit proposals from entities interested in accelerating the provision of advanced telecommunitcations services to every Palo Alto address through the expanded use of the City’s existing assets, including the fiber optic backbone; and WHEREAS, on April 5, 1999, the City Council directed staff to proceed with a Universal Telecommunication Services Request for Proposal and the deployment of a FTTH network on a trial basis; and WHEREAS, a "medium trial area" will be established in the Community Center area and a new CIP No. 9916 will be created with $380,000 in funding to complete the installations; and WHEREAS, City Council authorization is needed to amend the 1998-99 budget as hereinafter set forth. NOW, THEREFORE, the Council of the City of Palo Alto does ORDAIN as follows: SECTION i. established. CIP No. 9916, Fiber To The Home Trial, is hereby SECTION 2. Thesum of Three Hundred and Eighty Thousand Dollars ($380,000) is hereby appropriated to CIP Number No. 9916, and the Electric Distribution Rate Stabilization Reserve is correspondingly reduced. SECTION 3. This transaction will reduce .the Electric Distribution Rate Stabilization Reserve from $6,774,000 to $6,394,000. SECTION 4. As specified in Section 2.28.080(a) of the Palo Alto Municipal Code, a two-thirds vote of the City Council is required to adopt this ordinance. SECTION 5. A mitigated negative declaration for the City’s Fiber Optic infrastructure project was approved by the Director of Planning and Community Environment on November 25, 1996. Any project that may be undertaken as a result of the RFP or FTTH trial will be required to adopt the mitigation measures identified in the negative declaration. SECTION 6. As provided in Section 2.04.350 of the Palo Alto Municipal Code, this ordinance shall become effective upon adoption. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT: ATTEST:APPROVED: City Clerk Mayor APPROVED AS TO FORM:City Manager Senior Asst. City Attorney Director of Services Administrative Director of Utilities PROJECT DESCRIPTION This Capital Improvement Program funds a trial project which cormec~ approximately 69 homes in the Community Center Neighborhood to a fiber optic network providing data communications services. The trial project will use fiber optic cables and switched ethernet technology to move data from individual residences to vendors providing access to the Internet. JUSTIFICATION The Community Center Neighborhood was selected by City Council for a trial fiber optic to the home project on April 5, 1999. The purpose of this project is to demonstrate the feasibility and costs of deploying an ethernet network in a residential environment using fiber optic cable. The knowledge gained from the trial project would then be used to determine the best alternative for providing high speed data services to the entire community. FUTURE FINANCIAL REQUIREMENTS FISCAL YEAR PY Budget 1999-00 2000-01 2001-02 2002-03 2003-04 AMOUNT $380,000 $ $ $ $ $ COMPONENTS construct facilities Sources of Funding: Electric Fund with reimbursement by the trial area customers over a 5 year period. IMPACT AND SUPPORT ANALYSIS Environmental:This project has been determined to be categorically exempt under Section 15301B of CEQA. Screening of padmounted equipment will be included in the design. CIP Design Con- sultant will be consulted when new padmounted equipment is located. Additional infrastructure will require additional operations and maintenance funding for operations, maintenance, and engineering services. None Design Elements: Operating: Telecommunications: ’ COMPREHENSIVE PLAN This project furthers Policy L-81 of the Comprehensive Plan. FOR TRACKING PURPOSES ONLY: Requesting Department: Utilities 6SII lSll