HomeMy WebLinkAboutStaff Report 299-06City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
ATTENTION:FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:JULY 18, 2006 CMR: 299:06
SUBJECT:REQUEST FOR FINANCE COMMITTEE REVIEW OF REQUEST
FOR PROPOSAL FOR ULTRA-HIGH-SPEEDBROADBAND
SYSTEM CONSTRUCTION AND MANAGEMENT
RECOMMENDATION
Staff requests that the Finance Committee review and comment on the attached draft Request for
Proposal for Ultra-High-Speed Broadband (Attachment 1). In addition, staff requests that the
Finance Committee consider the issues outlined in this report, indicating on the Committee’s
desired direction. Finally, staff asks the Finance Committee to recommend to the City Council
that it grant unanimous approval, via the consent calendar, to move forward.
BACKGROUND
At its January 17, 2006 Council meeting, Council directed staff to issue a Request for Proposal
(RFP) for the construction and operation of an ultra-high-speed bandwidth system. The primary
goals of that system would be:
¯Capability of providing minimum bandwidth of 100 megabits per second symmetric
service to the customer;
¯Provision of at least data, video, and telephony services; and
¯City ownership of the physical system.
Council went on to direct that the RFP shall request the following information from the bidders:
¯Proposed financial and other contributions required from the City
¯Assessment of financial risk to the City of Palo Alto
¯Proposed schedule to achieve the City’s primary goals
¯Proposed technologies to achieve the City’s primary goals
¯Proposed ultimate ownership of the system’s physical infrastructure
¯Whether the proposed system be an "open" system
¯Proposed roles of the City versus roles of the responder
DISCUSSION
CMR: 299:06 Page 1 of 3
Attachment A is a draft of the RFP described above. In addition to reviewing the draft and
providing comment as to whether it meets with the goals and parameters laid out on January 17,
2006, staff requests that the Finance Committee consider the following issues and clarify its
intent:
The RFP mentions that the vendor could license the City’s dark fiber. Was it Council’s
intent as described in the January 17, 2006 Colleagues Memo that the City offer dark
fiber capacity at no charge to the vendor? Was it the intent of Council to give "use and
control" (hence profit) of some/all of the dark fiber system and its customer base to the
bidder as a financial aid in lieu of cash?
Council’s direction stated that the City "wishes to own the physical structure." Staff
assumes that means owning the dark fiber itself and not necessarily the head-end, field
equipment, etc. Is that assumption correct? Staff believes, due to regulatory and other
concerns, it would be advisable to own only the dark fiber.
o "Universal Service." Does Council want to require the vendor to provide service to ALL
the homes/businesses in Palo Alto, including the foothills? If so, can there be a phased
implementation - and within what timeframe would it be acceptable for outlying areas to
receive service?
°"Net neutrality." The Colleagues Memo specifies an open network preference, but not a
requirement. Members of the public are likely to question the fairness/wisdom of
allowing even the possibility of a closed network. To what extent is Council willing to
consider a closed system in light of probable public opposition?
RESOURCE IMPACT
Resources have already been committed to completing the RFP distribution, evaluation and
selection process. Additional City resources required for implementing the high-speed system
would be proposed by the RFP respondents and discussed as part of the selection process.
POLICY IMPLICATIONS
This report and the attached RFP is consistent with Council’s policy and program direction
provided at its January 17, 2005 meeting.
ENVIRONMENTAL REVIEW
The actions requested in this report do not constitute a project for the purposes of the California
Environmental Quality Act.
CMR: 299:06 Page 2 of 3
PREPARED BY:
Senior Financial Analyst, Administrative Services
DEPARTMENT HEAD APPROVAL:
Director,Services
CITY MANAGER APPROVAL:
City Manager
ATTACHMENTS
Attachment 1 : Draft Request for Proposal for Ultra-High-Speed Broadband System
Attachment 2: CMR:I 11:06: "Request for Council Direction on Legal, Financial, Operational,
and other Issues regarding Issuance of a Fiber to the Home Request for
Proposals" including CMR:398:05 as attachment "Request for Council
Direction on Legal, Financial, Operational, and Other Issues Regarding issuance
of a Fiber to the Home Request for Proposals"
CMR: 299:06 Page 3 of 3
ATTACHMENT 1
CITY OF PALO ALTO UTILITIES
AND ADMINISTRATIVE SERVICES
DRAFT
REQUEST FOR PROPOSAL (RFP) NUMBER XXXXX
CITYWlDE ULTRA-HIGH-SPEED BROADBAND SYSTEM
PRE-BID CONFERENCE:
RFP SUBMITTAL DEADLINE:
CONTRACT MANAGER:
PROJECT MANAGER:
TIME
DAY, DATE
3:00 P.M.
TUESDAY,
NAME HERE
NAME HERE
CITY OF PALO ALTO
PURCHASING/CONTRACT ADMINISTRATION
250 HAMILTON AVENUE
PALO ALTO, CA 94301
(650) 329-2271
DRAFT REQUEST FOR PROPOSAL (RFP) NO.
TITLE: ULTRA-HIGH-SPEED BROADBAND SYSTEM
1.INTRODUCTION
The City of Palo Alto is seeking proposals for the construction and management
of a citywide Ultra-High-Speed Broadband system. The required services and
performance conditions are described in the attached Attachment C, Scope of
Work.
2.ATTACHMENTS
The attachments below are included with this Request for Proposals (RFP) for
your review and submittal (see asterisk):
Attachment A- Bidder’s Information Form*
Attachment B - Certification of Non-discrimination*
Attachment C - Project Background and Scope of Work
Attachment D - Sample Agreement for Professional Services
Attachment E - Sample Table Format, Qualifications of Firm Relative to
City’s Needs
Attachment G - Insurance Requirements*
Attachment H -Vendor Experience Checklist*
The items identified with an asterisk (*) shall be filled out, signed by the
appropriate representative of the company and returned with submittal.
3.INSTRUCTIONS TO BIDDERS
3.1 Pre-Proposal Conference
A Pre-Proposal conference will be held Tuesday, ., 2006 at 10:00
a.m. in the Conference Room, 250 Hamilton Avenue, Palo Alto,
CA. All prospective bidders are strongly encouraged to attend.
3.2 Examination of Proposal Documents
The submission of a Proposal shall be deemed a representation and certification
by the bidder that it:
3.2.1 Has carefully read and fully understands the information that is
provided by the City to serve as the basis for submission of
this proposal.
3.2.2 Has the capability to successfully undertake and complete the
responsibilities and obligations of its proposal.
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3.2.3 Represents that all information contained in the proposal is
true and correct at the time of submittal.
3.2.4 Did not, in any way, collude or conspire, directly or indirectly,
with any person, firm, corporation or other bidder in regard to
the amount, terms or conditions of its proposal.
3.2.5 Acknowledges that the City has the right to make any inquiry it
deems appropriate to substantiate or supplement information
supplied by bidder, and bidder hereby grants the City
permission to make these inquiries, and to provide any and all
related documentation in a timely manner.
No request for modification of the proposal shall be considered after its
submission on the ground that the bidder was not fully informed to any fact
or condition.
3.3 Addenda/Clarifications
Should discrepancies or omissions be found in this RFP or should there be a
need to clarify this RFP, questions or comments regarding this RFP must be put
in writing and received by the City no later than 1:00 p.m., Wednesday,
., 2006. Correspondence shall be addressed to
Contract Administrator, City of Palo Alto, 250 Hamilton Avenue, Palo Alto, CA
94301 or e-mailed to Responses from the City will
be communicated by Addendum to all recipients of this RFP. Inquiries received
after the date and time stated will not be accepted and will be returned to
senders without response. All addenda shall become a part of this RFP and
shall be acknowledged on the Bidder’s Form.
The City shall not be responsible for nor be bound by any oral instructions,
interpretations or explanations issued by the City or its representatives, including
those given at the Pre-Proposal Conference.
3.4 Submission of Proposals
All proposals shall be submitted to:
City of Palo Alto
Purchasing and Contracts Administration
250 Hamilton Avenue, Mail Stop MB
Palo Alto, CA 94301
Proposals must be delivered no later than 3:00 p.m. on Tuesday,
2006. All proposals received after that time will be returned to the bidders
unopened.
The bidder shall submit __ copies of its proposal in a sealed envelope,
addressed as noted above, bearing the bidder’s name and address clearly
marked, "RFP NO. XXXX FOR ULTRA-HIGH-SPEED BROADBAND." The use
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of double-sided paper with a minimum 30% post-consumer recycled content is
strongly encouraged.
3.5 .Rights of the City of Palo Alto
This RFP does not commit the City to enter into a contract, nor does it obligate
the City to pay for any costs incurred by any bidder in the preparation and
submission of proposals or in anticipation of a contract. The City reserves the
right to:
¯Make the selection based in its sole discretion;
¯Reject any and all proposals for any reason;
¯Re-issue the Requests for Proposals;
¯Postpone opening for its own convenience;
¯Remedy technical errors in the Request for Proposals process;
¯Approve or disapprove the use of particular subconsultants;
¯Negotiate with any, all or none of the bidders;
¯Accept other than the lowest price offer;
¯Waive informalities and irregularities in the proposals; and
¯Enter into an agreement with another bidder in the event the bidder
fails to execute an agreement with the City.
An agreement with the City shall not be binding or valid unless and until it is
approved by the City Council and executed by authorized representatives of the
City and the bidder.
3.6 Proposal Certification
Upon submittal, each proposal shall be deemed submitted for no less than 180
days and cannot be revoked or withdrawn during that period.
3.7 Proprietary Proposal Materials
The City will endeavor to treat as confidential, trade secret, etc. all proposal
materials, in accordance with applicable law. Simply labeling something as
"proprietary" does not afford protection under California law. All proposals are
available for inspection under the California Public Records Act when the award-
of-contract staff report is sent to City Council.
3.8 Availability of Drawinqs to Successful Bidder
City of Palo Alto Utilities (CPAU) staff maintains drawings and records that
describe the poles, conduits, and associated infrastructure owned by the City for
the purpose of distributing utilities throughout Palo Alto. These drawings and
records will be made available for inspection to the successful bidder. Copies can
be made for a fee, as authorized by Council.
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3.9 Errors in Proposals
Bidders are responsible for errors and omissions in their proposals. Any such
errors and omissions will not serve to diminish their obligations to the City of Palo
Alto.
3.10 Bidders’ Experience and Qualifications
The City of Palo Alto seeks proposals from companies that are financially
capable of assuming some or all of the financial risk associated with deploying
such an ultra-high-speed broadband system in Palo Alto. Bidders should have
experience with the installation and operation of telephone, high speed data,
cable television networks, and other related services. Bidders should have
experience with placement and maintenance of outside plant infrastructure.
4. PROPOSED RFP TIMELINE
The RFP Timeline is as follows:
RFP Issued
Pre-Proposal Meeting
Deadline for questions, clarifications
Proposal submittal deadline
Finalists identified
Bidder Interviews
Bidder selection and contract
preparation
Contract awarded
Work commences
5. INFORMATION TO BE SUBMITTED (to be submitted in this order only)
These instructions govern the format and content of the proposal. The intent of
the RFP is to elicit responses that can communicate the bidder’s degree of
understanding of the City’s requirements and its approach to successfully provide
the products and/or services on time and within budget. In addition to the
required Proposal content outlined in Attachment C, Scope of Services,
Section XXXX, all Proposals shall address the following informational items in the
order listed below and shall be numbered 1 through 6 in the proposal document.
5.1 Chapter 1 - Proposal Summary
This Chapter shall discuss the highlights, key features and distinguishing points
of the proposal. A separate sheet shall include a list of individuals and contacts
for this proposal and how to communicate with them. Limit this chapter to a total
of three (3) pages, single-line spacing, including the separate sheet.
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5.2 Chapter 2- Profile on the Proposing Firm(s)
This Chapter shall include a brief description of all parties involved in the
proposal, including a discussion of the relevant firms’ financial stability, capacity
and resources.
5.3 Chapter 3 - Qualifications of the Firm(s)
This chapter will be in addition to the completed
Experience Checklist.
Attachment H - Vendor
This Chapter shall include a detailed description of the bidder’s qualifications and
previous experience in designing, procuring, installing and maintaining
communication infrastructure, fiber, and broadband IP data networks. Provide in
a table format (see Sample Table, Exhibit E) descriptions of pertinent project
experience with other public municipalities and private sector that includes a
summary of the work performed, the total project cost, the percentage of work
the firm was responsible for, and the period over which the work was completed,
Give a brief statement of the firm’s adherence to the schedule and budget for the
project.
If the bidder will be offering certain elements of the project through one or more
subcontractors, sufficient information and data with respect to each subcontractor
must be provided to demonstrate that each has the requisite experience to
perform the function assigned by the bidder.
Proposals must include the following information on the bidder:
5.3.1 Background of the organization showing products, technologies,
professional strengths and abilities, total number of years in
business, years supplying telecommunications services, general
scope of services provided, and number of employees.
5.3.2 Complete information on all company principals and their experience
in these technologies.
5.3.3 A narrative description and organizational chart depicting the
management of the firm’s organization and its relationship to any
business entity or subsidiary.
5.3.4 Description of current operations, the number and scope of other
projects currently ongoing or set to begin within the next six (6) to
twelve (12) months.
5.3.5 Statement whether the bidder or any corporation or other entity which
has a direct or indirect controlling interest in or is controlled by the
bidder or any subsidiary corporation or other entity has:
Filed for bankruptcy (dissolution or reorganization) within the past
five (5) years
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5.3.6
¯Been suspended or barred from bidding on government (federal,
state or local) contracts
¯Been subjected to any federal, state, or local audits
¯Had any contracts relevant to the work requested in this RFP
terminated either voluntarily or involuntarily within the past five (5)
years
Listing of most relevant completed projects related to design,
implementation, and/or operation of telecommunications networks, in
which the bidder has been involved in the past five (5) years.
5.3.7 References for most relevant completed projects, including company
name, address, contact name and title, phone number, email
address, and description of the service provided. Each reference
shall include a descriptive project summary, financial structure, and
role of firm/principal in project.
5.3.8 Description of all completed projects related to design,
implementation, and/or operation of telecommunications networks
that are similar in type, size, scale, or complexity to the project as
outlined in this RFP.
5.3.9 For each project, the total capital and annual operating costs, time
between project milestones, marketing and sales performance,
contact references, role of Firm principals in the project, Quality of
Service characteristics, and explanation of any regulatory issues that
required resolution.
5.3.10 Description of any work involving public-private partnerships, diverse
stakeholders, and extensive public processes and participation.
5.4 Chapter 4 - Financial Qualifications
This chapter will include the following:
5.4.1 A narrative description of the firm’s financial condition and willingness
to undertake and complete the project as proposed and to furnish
services in accordance with this RFP. Include all required sources of
funding for this project.
5.4.2 Copies of operating budgets and audited financial statements for the
past three (3) years, as well as, for publicly traded companies, a copy
of the latest Forms 10-K, 10Q, and 8K filed with the Securities and
Exchange Commission. If the bidder has not been in business for the
past three (3) years, please confirm commencement date of doing
business and provide audited financial statements for the years it has
been in operation. If Forms have not been filed with the Securities
and Exchange Commission, please indicate that and include copies
of the bidder’s latest quarterly financial reports as well as a copy of
the bidder’s most recent annual report.
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5.4.3 Two (2) bank references with correspondent contact names,
addresses, phone numbers and email addresses.
5.4.4 Any other information not specifically requested above that the bidder
believes to be demonstrative of its financial capacity.
5.5 Chapter 5- Project Staffinq
Key personnel will be an important factor considered by the review
committee. Changes in key personnel may be cause for rejection of the
proposal. This Chapter shall include the following information:
5.5.1 A professional resume for each of the key personnel to be assigned to
the project and their relevant related experience;
5.5.2 Descriptions of key personnel’s proposed roles and responsibilities on
this project;
5.5.3 A proposed project manager who would be responsible for the day-to-
day management of project tasks and would be the primary point of
contact with the bidder;
5.5.4 An organizational chart of the proposed project team.
5.6 Chapter 6 -- End User License Aqreement and Privacy Protection
Bidders will be required to provide a copy of the End User License Agreement
(EULA) and any End User Privacy Protection policies they employ with the
response to the RFP.
6. CONTRACT TYPE AND METHOD OF PAYMENT
It is anticipated that the agreement resulting from this solicitation, if awarded, will
be a not-to-exceed budget per task or fixed fee form of contract. A Sample
Agreement for Professional Services is provided as Attachment D. The method
of payment to the successful bidder shall be negotiated between the bidder and
the City as being the maximum cost to perform all work. This figure shall include
direct costs and overhead, such as, but not limited to, transportation,
communications, subsistence and materials and any subcontracted items of
work.
Bidders shall be prepared to accept the City’s terms, conditions, and
requirements of the Agreement, including Insurance Requirements in Attachment
G. If there are no exceptions noted, it is assumed the bidder will accept all
conditions and requirements identified in the Attachment D -"Sample Agreement
for Professional Services." Items not excepted will no___~t be open to later
negotiation.
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If a bidder desires to take exception to the Agreement, bidder shall provide the
following information in Chapter 7 of their submittal package. Please include the
following:
¯Each proposed change to the Agreement, including all relevant
Attachments.
¯The reasons for, as well as specific recommendations, for alternative
language.
The above factors will be taken into account in evaluating Proposals. Proposals
that take substantial exceptions to the proposed Agreement may be determined
by the City, at its sole discretion, to be unacceptable and no longer considered
for award.
7. INSURANCE REQUIREMENTS
The selected bidder(s), at bidder’s sole cost and expense and for the full term of
the Agreement or any extension thereof, shall obtain and maintain, at a
minimum, all of the insurance requirements outlined in Attachment G.
All policies, endorsements, certificates and/or binders shall be subject to the
approval of the Risk Manager of the City of Palo Alto as to form and content.
These requirements are subject to amendment or waiver if so approved in writing
by the Risk Manager. The selected bidder agrees to provide the City with a copy
of said policies, certificates and/or endorsement upon award of contract.
8. ADHERENCE TO LAWS AND REGULATIONS
The selected winning bidder agrees to adhere and abide by the City of Palo
Alto’s laws and regulations, along with being subject to regulation by the
California Public Utilities Commission and the Federal Communications
Commission, the City Architectural Review Board and other City Boards and
Commissions, among others. Pursuant to the California Environmental Quality
Act, an environmental assessment will likely be required before construction may
proceed.
9. IMPLEMENTATION DEPLOYMENT STATISTICS AND REPORTING
The winning RFP team’s Project Manager is responsible to provide monthly and
quarterly reporting of the progress of the installation and performance statistics
[and budget] of the network as each phase becomes operational, and on an on-
going basis after deployment.
Services and service model usage
Detailed network performance data
o By service type
o By service model usage.
Current challenges and issues that may or are causing impact to:
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o Project schedule
o Consumers
o Physical network
o Delivery of service / service models
10. PROPOSAL REVIEW AND SELECTION PROCESS
10.1 Evaluation Criteria
City staff will evaluate the proposals provided in response to this RFP based on
the following criteria:
10.1.1 General Criteria
10.1.1.1
10.1.1.2
10.1.1.3
10.1.1.4
Quality and completeness of proposal;
Bidder’s experience, including the experience of staff to be
assigned to the project, the engagements of similar scope and
complexity;
Bidder’s compliance with applicable laws, regulations, policies
(including city council policies), guidelines and orders governing
prior or existing contracts performed by the contractor;
References from customers of bidder.
10.1.2 Technical Criteria
1
1
1
1
1
1
1
0.1.2.1
0.1.2.2
0.1.2.3
0.1.2.4
0.1.2.5
0.1.2.6
0.1.2.7
Design quality and system features of proposed network;
Use of standards for construction of the network and delivery of
ultra-high-speed broadband services;
Network capabilities and types of service offerings;
Network architecture;
Network performance/reliability/quality of service guarantees;
Network scalability;
Network management.
10.1.3 Financial Criteria
1
1
1
1
1
1
0.1.3.1 Bidder’s business structure;
0.1.3.2 Bidder’s and any subcontractors’ financial capabilities and
resources;
0.1.3.3 Estimated cost of the project to the City;
0.1.3.4 Gross forecasted revenues (10 years);
0.1.3.5 Net revenue potential to the City (10 years);
0.1.3.6 Palo Alto customer price for service, cost to connect, and
benefits.
10.1.4 Implementation/Operational Criteria
10.1.4.1
10.1.4.2
10.1.4.3
Project implementation schedule and timeline;
Bidder’s apparent ability to perform the work within the timeline;
Environmental impact of proposed plan;
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10.1.4.4
10.1.4.5
10.1.4.6
10.1.4.7
10.2
10.2.1
Bidder’s prior record of performance with City and/or other
customers;
Quality of service to Palo Alto customers likely to result from
bidder’s plan;
Bidder’s plan for providing maintenance, repairs, parts and/or
services;
Availability of a local office.
Selection Process
Evaluation Team review - An evaluation team will review
submitted proposals with respect to the criteria listed above. The
evaluation team will consist of City staff, and may include advisors
and/or experts or consultants selected by the City. The Team has
broad discretion to choose the evaluation process best suited for
the award of a contract.
10.2.2 Presentations - A small group of "short-listed" bidders may be
asked to make a presentation to City staff, detailing their
proposals and business plan.
10.2.3 Team Recommendation - Upon completion of the evaluation, the
evaluation team will present a recommendation to the Utilities
Advisory Commission, (UAC) and the City Council, including
referrals to the City Council’s two subcommittees, the Finance
Committee and the Policy and Services Committee.
10.2.4 Negotiations - The City may initiate contract negotiations with
another bidder in the event an agreement cannot be reached with
the selected bidder.
10.2.5 Notice to Proceed - Upon successful negotiation and following the
award and execution of a contract, the City will issue a Notice to
Proceed to the successful bidder following approval of the RFP
Services Contract.
11. POST-EVALUATION REQUIREMENTS
11.1 Approval of Drawinq and Documentation
Once a successful party has been selected to deploy a network, all drawing and
plans must be approved by the City. As-built drawings will be provided to the City
in a similar format. Documentation will also be provided to the City for all devices
placed in the public right-of-way.
12. COLLUSION
By submitting a proposal, each bidder represents and warrants that its proposal
is genuine and not a sham or collusive or made in the interest of or on behalf of
any person not named therein; that the bidder has not directly induced or
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solicited any other person to submit a sham proposal or any other person to
refrain from submitting a proposal; and that the bidder has not in any manner
sought collusion to secure any improper advantage over any other person
submitting a proposal.
13. DISQUALIFICATION
Factors such as, but not limited to, any of the following may be considered just
cause to disqualify a proposal without further consideration:
13.1
13.2
13.3
13.4
13.5
13.6
Evidence of collusion, directly or indirectly, among bidders in regard to
the amount, terms or conditions of this proposal;
Any attempt to improperly influence any member of the evaluation
team;
Existence of any lawsuit, unresolved contractual claim or dispute
between bidder and the City;
Evidence of incorrect information submitted as part of the proposal;
Evidence of bidder’s inability to successfully complete the
responsibilities and obligation of the proposal;
Bidder’s default under any previous agreement with the City, which
results in termination of the Agreement.
14. GRATUITIES
City employees are subject to conflict of interest requirements. Therefore, no
person shall offer, give or agree to give any City employee any gratuity, discount
or offer of employment in connection with the award of contract by the City. No
City employee shall solicit, demand, accept or agree to accept from any other
person a gratuity, discount or offer of employment in connection with a City
contract.
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BIDDER (please print):
Name:
Address:
ATTACHMENT A
Bidder’s Information Form
Telephone:
FAX:
Contact person, title, telephone and fax number:
Bidder, if selected, intends to carry on the business as (check one)
[]Individiual []
[]Partnership []
[]Corporation []
When incorporated?
In what state?
When authorized to do business in California?:
[]Other (explain):
Joint Venture
Limited Liability Partnership
Limited Liability Company
ADDENDA
To assure that all Bidders have received each addendum, check the appropriate box(es) below.
Failure to acknowledge receipt of an addendum/addenda may be considered an irregularity in
the Proposal:
Addendum number(s) received:[-]1; [] 2; [] 3; [] 4; [] 5; [] 6;
Or, []No Addendum/Addenda Was/Were Received (check and initial).
BIDDER’S SIGNATURE
No proposal shall be accepted which has not been signed in ink in the appropriate space below:
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By signing below, the submission of a proposal shall be deemed a
representation and certification by the Bidder that they have investigated all
aspects of the RFP, that they are aware of the applicable facts pertaining to
the RFP process, its procedures and requirements, and they have read and
understand the RFP. No request for modification of the proposal shall be
considered after its submission on the grounds that the Bidder was not fully
informed as to any fact or condition.
Date:
If Bidder is INDIVIDUAL, sign here
Bidder’s Signature
Bidder’s typed name and title
If Bidder is PARTNERSHIP or JOINT VENTURE, at least (2) Partners or each of
the Joint Venturers shall sign here:
Partnership or Joint Venture Name (type or print)
Date:
Date:
Member of the Partnership or Joint Venture signature
The undersigned certify that they are respectively:
and
Title
Member of the Partnership or Joint Venture signature
If Bidder is a CORPORATION, the duly authorized officer(s) shall sign as follows:
Title
Of the corporation named below; that they are designated to sign the Proposal Cost Form by
resolution (attach a certified copy, with corporate seal, if applicable, notarized as to its
authenticity or Secretary’s certificate of authorization) for and on behalf of the below named
CORPORATION, and that they are authorized to execute same for and on behalf of said
CORPORATION.
Corporation Name (type or print)
By:Date:
Title:
By:Date:
Title:
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ATTACHMENT B
Certification of Non-discrimination
As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below
certify that they do not discriminate in employment of any person because of race, skin color,
gender, age, religion, disability, national origin, ancestry, sexual orientation, housing status,
marital status, familial status, weight or height of such person; that they are in compliance with
all Federal, State and local directives and executive orders regarding nondiscrimination in
employment.
1. If Bidder is INDIVIDUAL, sign here:
Date:
Bidder’s Signature
Bidder’s typed name and title
2. If Bidder is PARTNERSHIP or JOINT VENTURE, at least (2) Partners or each of the
Joint Venturers shall sign here:
Partnership or Joint Venture Name (type or print)
Date:
Date:
Member of the Partnership or Joint Venture signature
Member of the Partnership or Joint Venture signature
3. If Bidder is a CORPORATION, the duly authorized officer(s) shall sign as follows:
The undersigned certify that they are respectively:
and
Title Title
of the corporation named below; that they are designated to sign the Proposal Cost Form by
resolution (attach a certified copy, with corporate seal, if applicable, notarized as to its
authenticity or Secretary’s certificate of authorization) for and on behalf of the below named
CORPORATION, and that they are authorized to execute same for and on behalf of said
CORPORATION.
Corporation Name (type or print)
By:
Title:
Date:
Date:By:
Title:
1 5 0503 lO
ATTACHMENT C
PROJECT BACKGROUND AND
SCOPE OF WORK
I. PROJECT OVERVIEW
The City of Palo Alto ("City") is seeking a proposal for the development, construction and
operation of a citywide ultra-high speed bandwidth system. Such a network must provide
minimum symmetrical bandwidth of 100 megabits per second per end-user connection, and
make affordable and available to the customer in Palo Alto: high speed data transport and
Internet access; and voice, data, and video services.
II. CITY OVERVIEW
Palo Alto is a thriving community of nearly 60,000 people situated adjacent to Stanford
University in the heart of Silicon Valley, approximately 25 miles south of San Francisco and 14
miles north of San Jose. Palo Alto enjoys international name recognition. Travelers from all over
the world come for purposes of education or research at Stanford University, training or business
with the high technology firms of the Stanford Research Park, or medical care at the Stanford
Medical Center.
The City General Fund budget is approximately $121 million for fiscal year 2005-2006, with
eight departments. Palo Alto also owns its own Utilities, including Electric, Gas, Refuse, Storm
Drainage, Wastewater Collection, Wastewater Treatment, and Water. Within the Electric Utility
is a Telecommunications Division which operates the dark fiber ring (see below).
Palo Alto is a residential community of above-average household incomes and above-average
educational levels. Approximately three-quarters of Palo Alto residents who are over the age of
25 have four or more years of college, half of whom have received at least one graduate degree.
Also, an estimated 95% of households have an internet connection. Other key demographic
statistics on Palo Alto include:1
¯Approximately 28,000 households
¯57% of population (in 2000) owned a home
¯Median value of owner-occupied units (2000) was $811,800
¯Median household income (1999) was $90,377
¯Land area in square miles = 25.98
III.PROJECT BACKGROUND
In 1997, CPAU constructed a fiber backbone and is currently licensing dark fiber to interested
parties such as telecommunications carriers, ISPs, and local businesses. The Backbone consists
of 33 route miles (over 4,750 fiber-miles), with 144 or more strands of singlemode fiber along
most routes. The Backbone is approximately 52% aerial and 48% underground. The Backbone
Sources included: www.intbplease.com; City of Palo Alto Certified Annual Financial Report of June 30, 2005
16 050310
passes Palo Alto’s major business parks and terminates in several buildings within the City, and
can be accessed at over 40 locations. (See http://www.cpau.com/fiberservices/for more details.)
In 2000, the Council approved a Fiber-to-the-Home trial for one year, to determine the feasibility
of providing citywide fiber-to-the-home in Palo Alto, by offering the service to 66 homes in the
Community Center neighborhood for one year. Service to trial participants began in 2001, and
was quite successful in terms of customer satisfaction.
Given the trial’s success, the Council approved the engagement of a consultant beginning May,
2002 to complete a business case study and determine whether a full-scale FTTH business would
be viable for the City. As part of that business case, trial participants and Palo Alto residents
were surveyed to determine potential market interest in the project. In September, 2002, the
business case was completed, and Council agreed both to extend the timeframe for trial
participants and to fund the development of a business plan.
In the business plan, the consultant assumed the Electric Fund would issue (tax-exempt) revenue
bonds to fund the fiber build-out, and demonstrated that a FTTH utility could be economically
viable over the 20-year bond financing period. However, in 2004, it was determined that in fact,
the Electric Utility could not fund the FTTH project with revenue bonds; therefore financing
costs would be greater than previously assumed.
In April and May, 2004, staff presented financing options to the Utilities Advisory Commission
(UAC) and to the Council that reflected the additional legal information. The only legally and
politically feasible options seemed to be finding a private investor or forming an Assessment
District. The Council asked staff to monitor other California jurisdictions pursuing FTTH. In
2005, staff recommended, based on the uneven and sometimes turbulent progress of other
California municipal efforts, ceasing work on the FTTH program, and discontinuing the trial.
Council approved the discontinuation of the trial, but requested that staff report back on the
"legal and financial issues" to lay the groundwork for issuing an RFP for a private-sector partner
to construct and operate a FTTH service. Then, in January, 2006, Council further directed staff
to proceed with issuance of an RFP for the construction and operation of a high-speed broadband
system.
IV. OBJECTIVES OF THE PROJECT
The primary goals for this system are:
1.Capability of providing to each customer a minimum bandwidth of 100 megabits per
second symmetrical service;
2. Provision of at least data, video, and telephony services; and
3. City ownership of the physical system.
A secondary goal for the system is to promote competition between multiple service providers in
order to drive down prices.
17 0503~0
V. SCOPE OF WORK
A. Requirements of the System
System requirements include:
Provision of citywide service to residences and businesses in Palo Alto.
Voice, Video and Data "triple-play". This standard broadband service offering as
outlined below is the minimum acceptable service level. The transmission medium is left
to the Bidder’s discretion, but must be able to provide the following:
o Voice: telephony (legacy analog or VoIP)
o Video: commercial full spectrum "Cable" TV including HDTV and Video on
demand.
o Data: 100 Mbps symmetrical data rate per end-user connection
¯Highly Available, with reliability comparable to other competitive systems. Bidders will
be asked to comment on the uptime characteristics of their proposed system.
¯Phased Roll-Out: The network owner and service providers in their response should
provide their strategy and plans to achieve full deployment.
Quality of System Service (QoS): Bidders need to provide QoS and packet prioritization
for various classes of service such as First Responders, and various applications such as
Voice over Internet Protocol (VoIP). Bidders must describe the quality of service
capabilities of the proposed network.
Systems Management: The network owner’s Network Operations Center, (NOC) is
responsible for the monitoring and management of the network. NOC staff should have
the tools and capability to centrally manage the network, be immediately notified in the
event of network problems, and be able to dynamically reroute traffic or dynamically
resolve capacity problems. The network owner must provide the capability to produce
performance reports based on traffic classes and area served.
Aesthetically Pleasing: All equipment and cabling for the network mounted within public
view should blend into the existing architecture and not negatively affect the appearance
of existing structures.
Adherence to City Ordinances: All equipment must adhere to the Palo Alto Municipal
Code and other City requirements and be approved by the City and its appropriate Boards
and Commissions prior to deployment.
¯Standards-Based: The System will need to be capable of delivering broadband services to
devices built on industry standards-based technologies.
B. Project Manager / Management
The bidder must provide a Master Project Manager (PM) as the central point of contact for
both the network owner installation and service provider(s) teams.
1 8 050310
The PM is responsible for the identification and management of resources and dependencies
including people, physical assets, financial or otherwise. The PM is responsible for the
management and allocation of resources for the construction, implementation and operation
of the network.
The successful Bidder must cooperate with the City on the use of Utility poles and under-
grounding, and the PM will be the chief contact for this coordination.
C. Project Work Plan and Schedule
The PM must develop and present for City approval a complete Project Work Plan, including
a full description of major tasks and subtasks, along with a proposed timeline for completing
each one. The PM will be responsible for continuously maintaining the schedule for the
complete roll-out of the project, and for providing status updates on a regular basis. The
project schedule for design, implementation, and go-live activities shall be aligned and
coordinated such that they are time- and cost-efficient. The PM is responsible for providing a
detailed plan and schedule for each logical phase. The plan for each phase must be kept up
to date, along with the roll-ups into the Master Plan.
D. Milestones
The PM is responsible for clearly identifying major milestones and their planned completion
dates for the project. On-track, on-schedule, and on-budget information and status of overall
project and next-step milestones will be included in regularly scheduled update meetings.
E. Customer Service
Bidder must, at minimum, adhere to the Quality of Service requirements of the Joint Powers
Authority cable franchise and all applicable FCC rules. (See
http://www.cityofpaloalto.or~cable/franchise-agreement.html for complete text of the
agreement.) In addition, proof of customer service performance that exceeds industry
standards is required, with the goal of meeting the high service standards of the existing City
Utilities.
Furthermore, bidders must describe how they plan to handle customer support calls, and
detail any procedures that will be implemented due to an escalation of complaints. Lastly,
bidders shall describe how they plan to handle customer trouble calls and dispatch
emergency repair crews.
F. Customer Acquisition
The bidder must have proven ability to acquire and retain customers in a highly competitive
environment that includes competition with no less than one incumbent provider.
G. Proposed technologies to achieve the City’s primary goals
The bidder may propose any technology that has a proven field success rate that fulfills the
requirements of this RFP. The bidder will specify whether the system will be an "open" or
"closed" system. If open, the criteria for other providers’ participation must be provided.
19 0503
H. Technology Description
Bidders must describe their technical approach, including as a minimum the following
information:
Technologies: Any technology that is based on. industry standards and meets the
City’s 100 Mbps symmetrical service goal may qualify. Bidders should be able to
demonstrate the capacity of the proposed technology.
Network Design: A description of the design criteria, network elements, physical
media, switching and routing architecture, interfaces, topology, protocols, system
reliability, fault tolerance, availability, and operations and maintenance. In addition,
describe the degradation of service expected under the worst case scenario.
¯Network Equipment: A description of the type of networking equipment proposed,
and reasons for its selection.
Interconnection and Interoperability: A description of interconnection,
interoperability, and conformance to published standards. A description of where,
when, and how interconnection will occur. A description of how interoperability
between networks will be achieved is also required.
¯Schematic: A schematic view of how the networking equipment will be
interconnected and integrated to create a citywide network.
Upgrade Plan: A plan for upgrading infrastructure as service requirements grow.
¯Network Security: Any network security measures that will be deployed to ensure
privacy of customer communications and prevent intrusions on customer computers
must be described in full.
Data Transport Performance Characteristics: Bidders are requested to characterize the
anticipated performance of the proposed network design for data transport. At a
minimum, the following attributes shall be described:
Throughput: Describe the anticipated peak, mean, and minimum
throughput for data transport between any two end stations on the network
(specified in Megabits per second);
Latency: Describe the anticipated mean, minimum, and maximum latency
for data transport between any two nodes on the network (specified in
microseconds).
VI.CITY OF PALO ALTO OFFERING
The City of Palo Alto owns the utility poles in Palo Alto, along with AT&T and/or Pacific Gas
and Electric Company. All construction of new plant or relocation of existing plant in Palo Alto
shall meet California General Order (GO) 95 and GO128 rules and regulations, among others.
20 050310
The City also owns conduits, and the City has the rights-of-way needed to provide distribution of
utility services within Palo Alto.
The City may consider licensing to the successful bidder spare capacity along the fiber
backbone. For a fee, CPAU may extend the fiber optic backbone more deeply into Palo Alto
neighborhoods to interconnect with a successful bidder’s nodes, hubs, or other centralized
distribution points.
Bidders are encouraged to propose other services the City could offer to help successfully deploy
the requested services.
VII. ADDITIONAL REQUIRED ELEMENTS OF THE PROPOSAL
In addition to the required attachments listed above and in Section 5 of the main body of this
RFP which need to be submitted, the bidder must include information on the following:
A. Financial Risk to the City: The City wishes to minimize its financial exposure in the
development, construction and operation of the proposed system. However, the City
recognizes the potential need to contribute financial or other assets to the project to achieve
the primary goals. The financial risks assumed by the bidder should also be detailed
regarding quantity and timing. Bidder must include specifically:
Proposed financial and other contributions required from the City;
Assessment of financial risk to the City; and
Ways of mitigating the financial risk to the City.
B. O~vnership: The City desires to own the system’s fiber infrastructure, and at a minimum,
it must maintain use and control over the dark fiber network. The City understands that the
limitations of such ownership could be partly determined by the extent of the City’s financial
contributions to the project. The bidder should clarify the "ratio of investment to ownership"
- i.e., the impact of the degree of the City’s investment upon the extent of City ownership of
the infrastructure.
C. City Roles and Responsibilities: The bidder must specify the proposed roles of the City
versus roles of the bidder vis-fi-vis the construction, implementation, and operation of the
high-speed-broadband network.
D. Description of Service Offerings: Bidders are requested to provide a detailed description
of the services to be offered to residents and businesses at project inception, and others that
will be phased in within the first 3 years of the project.
E. Services by Outside Parties: Bidders are requested to identify any services, if applicable,
that will be provided by outside parties. Any available documents related to agreements with
outside parties shall be attached.
F. Financial Model and Business Case: Bidders are expected to provide a Financial Model
and Business Case in their response. These shall include:
1. Pro-Forma Income (Profit & Loss) Statement (years 1-10)
21 050310
2. Annual cash flow projections, and a Statement of Cash Position (years 1-10)
3. Expected annual net income to the City based on the bidder’s proposed contractual
arrangement, and appropriate cash flow and breakeven analyses
4. Source of funding for Ultra-High-Speed Broadband system construction and
operation
5. Preliminary market and competitive analyses to support the pro-forma income and
cash flow statements
6. Forecasted customers by year and by service classification (years 1, 5, 10)
G. Warranty Terms: Describe all warranty terms and conditions, including price and
performance guarantees.
22 o5o3~o
ATTACHMENT D
AGREEMENT SAMPLE ONLY
CITY OF PALO ALTO CONTRACT NO.
AGREEMENT BETWEEN THE CITY OF PALO ALTO AND
FOR PROFESSIONAL SERVICES
(Project Name)
This AGREEMENT is entered into , by and
between the CITY OF PALO ALTO, a chartered city and a municipal
corporation of the State of California ("CITY"),and
,a
located at ("CONSULTANT") .
RECITALS
The following recitals are a substantive portion of
this Agreement.
A. CITY intends to (DESCRIBE WHAT CITY PLANS TO DO - E.G.
CONSTRUCT A NEW LIBRARY) ("Project") and desires to engage a
consultant to prepare (DESCRIBE SERVICES - I.E. FEASIBILITY
STUDY, DESIGN, ETC.) in connection with the Project
("Services").
B. CONSULTANT has represented that it and any subconsultants
have the necessary professional expertise, qualifications, and
capability, and all required licenses and/or certifications to
provide the Services.
C. CITY in reliance on these representations desires to engage
CONSULTANT to provide the Services as more fully described in
Exhibit "A", attached to and made a part of this Agreement.
D. CONSULTANT has agreed to perform the Services on the terms
and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the recitals,
covenants, terms, and conditions, this Agreement, the parties
agree:
AGREEMENT
Section I. SCOPE OF SERVICES. CONSULTANT shall perform the
Services described in Exhibit "A" in accordance with the terms
and conditions contained in this Agreement. The performance of
23 o5o3~o
all Services shall be to the reasonable satisfaction of CITY.
SECTION 2. TERM. The term of this Agreement shall be from the
date of its ful! execution to (INSERT DATE OR IF NO DATE
THEN ~UPON COMPLETION OF THE SERVICES IN ACCORDANCEWITH THE
SCHEDULE OF PERFORMANCE ATTACHED AS EXHIBIT ~B"),
unless terminated earlier pursuant to Section 20 of this
Agreement.
SECTION 3. SCHEDULE OF PERFORMANCE.Time is of the essence in
the performance of Services under this Agreement. CONSULTANT
shall complete the Services within the term of this Agreement
and in accordance with the schedule set forth in Exhibit "B",
attached to and made a part of this Agreement. Any Services for
which times for performance are not specified in this Agreement
shall be commenced and completed by CONSULTANT in a reasonably
prompt and timely manner based upon the circumstances and
direction communicated to the CONSULTANT. CITY’s agreement to
extend the term or the schedule for performance shall not
preclude recovery of damages for delay if the extension is
required due to the fault of CONSULTANT.
SECTION 4. NOT TO EXCEED COMPENSATION. The compensation to be
paid to CONSULTANT for performance of the Services described in
Exhibit "A", including both payment for professional services
and reimbursable expenses, shall not exceed
Dollars ($). In the event
Additiona!Services are authorized, the tota! compensation for
services and reimbursable expenses shall not exceed
Dollars ($).The
applicable rates and schedule of payment are set out in Exhibit
"C", entitled "COMPENSATION," which is attached to and made a
part of this Agreement.
Additional Services, if any, shall be authorized in accordance
with and subject to the provisions of Exhibit "C". CONSULTANT
shal! not receive any compensation for Additional Services
performed without the prior written authorization of CITY.
Additional Services shall mean any work that is determined by
CITY to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services described
in Exhibit "A".
SECTION 5. INVOICES. In order to request payment, CONSULTANT
shall submit monthly invoices to the CITY describing the
services performed and the applicable charges (including an
identification of personnel who performed the services, hours
worked, hourly rates, and reimbursable expenses), based upon the
CONSULTANT’ s billing rates (set forth in Exhibit "C") . If
applicable, the invoice shall also describe the percentage of
completion of each task. The information in CONSULTANT’s payment
24 050310
requests shall be subject to verification by CITY.
SECTION 6. QUALIFICATIONS/STANDARD OF CARE.All of the Services
shall be performed by CONSULTANT or under CONSULTANT’s
supervision. CONSULTANT represents that it possesses the
professional and technical personnel necessary to perform the
Services required by this Agreement and that the personnel have
sufficient skill and experience to perform the Services assigned
to them. CONSULTANT represents that it, its employees and
subconsultants have and shall maintain during the term of this
Agreement all licenses, permits, qualifications, insurance and
approvals of whatever nature that are legally required to
perform the Services.
All of the services to be furnished by CONSULTANT under this
agreement shall meet the professional standard and quality that
prevail among professionals in the same discipline and of
similar knowledge and skill engaged in related work throughout
California under the same or similar circumstances.
SECTION 7. COMPLIANCE WITH LAWS. CONSULTANT shall keep itself
informed of and in compliance with al! federal, state and local
laws, ordinances, regulations, and orders that may affect in any
manner the Project or the performance of the Services or those
engaged to perform Services under this Agreement. CONSULTANT
shall procure all permits and licenses, pay all charges and
fees, and give all notices required by law in the performance of
the Services.
CONSULTANT shall report immediately to the CITY’s project
manager, in writing, any discrepancy or inconsistency it
discovers in the laws, ordinances, regulations, orders, and/or
guidelines in relation to the Project of the performance of the
Services.
All documentation prepared by CONSULTANT shall provide for a
completed project that conforms to all applicable codes, rules,
regulations and guidelines that are in force at the time such
documentation is prepared.
SECTION 8. ERRORS/OMISSIONS. CONSULTANT shall correct, at no
cost to CITY, any and all errors, omissions, or ambiguities in
the work product submitted to CITY, provided CITY gives notice
to CONSULTANT.
SECTION 9. INDEPENDENT CONTRACTOR. It is understood and agreed
that in performing the Services under this Agreement CONSULTANT,
and any person employed by or contracted with CONSULTANT to
furnish labor and/or materials under this Agreement, shall act
as and be an independent contractor and not an agent or employee
of the CITY. The manner and means of conducting the Services
25 o~o3~o
are the responsibility of and under the control of CONSULTANT,
except to the extent they are limited by applicable law and the
express terms of this Agreement.
CONSULTANT will be responsible for employing or engaging all
persons necessary to perform the Services. Al! contractors and
employees of CONSULTANT are deemed to be under CONSULTANT’S
exclusive direction and control.CONSULTANT shall be
responsible for their performance.
SECTION i0. ASSIGNMENT. The parties agree that the expertise
and experience of CONSULTANT are material considerations for
this Agreement. CONSULTANT shall not assign or transfer any
interest in this Agreement nor the performance of any of
CONSULTANT’s obligations hereunder without the prior written
consent of the city manager. Consent to one assignment will not
be deemed to be consent to any subsequent assignment. Any
assignment made without the approval of the city manager will be
void.
SECTION Ii.SUBCONTRACTING.
[OPTION A: NO SUBCONSULTANTS] CONSULTANT shall not
subcontract any portion of the work to be performed under this
Agreement without the prior written authorization of the city
manager or designee.
[OPTION B: SUBCONSULTANTS AUTHORIZED] Notwithstanding Section
i0 above, CITY agrees that subconsultants may be used to
complete the Services. The subconsultants authorized by CITY to
perform work on this Project are identified in Exhibit "A".
CONSULTANT shall be responsible for directing the work of the
subconsultants and for any compensation due to subconsultants.
CITY assumes no responsibility whatsoever concerning such
compensation. CONSULTANT shall be fully responsible to CITY for
al! acts and omissions of a subconsultant. CONSULTANT shall
change or add subconsultants only with the prior approval of the
city manager or his designee.
SECTION 12. PROJECT MANAGEMENT. CONSULTANT will assign
as the project director to have
supervisory responsibility for the performance, progress, and
execution of the Services. If circumstances or conditions
subsequent to the execution of this Agreement cause the
substitution of the project director or any other key personnel
for any reason, the appointment of a substitute project director
and the assignment of any key new or replacement personne! will
be subject to the prior written approva! of the CITY’s project
manager. CONSULTANT, at CITY’s request, shall promptly remove
personnel who CITY finds do not perform the Services in an
26 o5o3~o
acceptable manner, are uncooperative, or present a threat to the
adequate or timely completion of the Project or a threat to the
safety of persons or property.
The city manager will represent CITY for all purposes under this
Agreement. is designated as the
project manager for the CITY. The project manager will be
CONSULTANT’s point of contact with respect to performance,
progress and execution of the Services. The CITY may designate
an alternate project manager from time to time.
SECTION 13. DUTIES of CITY. To assist CONSULTANT in the
performance of the Services, CITY will furnish or cause to be
furnished the specified services and/or documents described in
Exhibit "A" and such other available information as may be
reasonably requested by CONSULTANT.
SECTION 14. OWNERSHIP OF MATERIALS. All drawings, plans,
reports, specifications, calculations, documents, other
materials and copyright interests developed or discovered by
CONSULTANT or any other person engaged directly or indirectly by
CONSULTANT to perform the services required hereunder shall be
and remain the property of CITY without restriction or
limitation upon their use. Neither CONSULTANT nor its
contractors, if any, shall make any of such materials available
to any individual or organization without the prior written
approval of the city manager or designee.
SECTION 15. AUDITS. CONSULTANT will permit CITY to audit, at
any reasonable time during the term of this Agreement and for
three (3) years thereafter, CONSULTANT’s records pertaining to
matters covered by this Agreement. CONSULTANT further agrees to
maintain and retain such records for at least three (3) years
after the expiration or earlier termination of this Agreement.
SECTION 16. INDEMNITY. To the fullest extent permitted by law,
CONSULTANT shall protect, indemnify, defend and hold harmless
CITY, its Council members, officers, employees and agents (each
an "Indemnified Party") from and against any and all demands,
claims, or liability of any nature, including death or injury to
any person, property damage or any other loss, including al!
costs and expenses of whatever nature including attorneys fees,
experts fees, court costs and disbursements ("Claims") resulting
from, arising out of or in any manner related to performance or
nonperformance by CONSULTANT, its officers, employees, agents or
contractors under this Agreement, regardless of whether or not
it is caused in part by an Indemnified Party.
The acceptance of CONSULTANT’s services and duties by CITY shall
27 050310
not operate as a waiver of the right of indemnification. The
provisions of this Section 16 shall survive the expiration or
early termination of this Agreement.
SECTION 17. WAIVERS. The waiver by either party of any
breach or violation of any covenant, term, condition or
provision of this Agreement, or of the provisions of any
ordinance or law, will not be deemed to be a waiver of any other
term, covenant, condition, provisions, ordinance or law, or of
any subsequent breach or violation of the same or of any other
term, covenant, condition, provision, ordinance or law.
SECTION 18.INSURANCE.
18.1.CONSULTANT, at its sole cost and expense,
shall obtain and maintain, in ful! force and effect during the
term of this Agreement, the insurance coverage described in
Exhibit "D" CONSULTANT and its contractors, if any, shall
obtain a policy endorsement naming the City of Palo Alto as an
additional insured under any general liability or automobile
policy or policies.
18.2.All insurance coverage required hereunder
shall be provided through carriers with Best’s Key Rating Guide
ratings of A-:VII or higher which are admitted to transact
insurance business in the State of California. Any and al!
contractors of CONSULTANT retained to perform Services under
this Agreement will obtain and maintain,in full force and
effect during the term of this Agreement,identical insurance
coverage, naming CITY as an additional insured under such
policies as required above.
18.3.Certificates evidencing such insurance shall
be filed with CITY concurrently with the execution of this
Agreement. The certificates will be subject to the approval of
CITY’s Risk Manager and wil! contain an endorsement stating that
the insurance is primary coverage and will not be canceled, or
materially reduced in coverage or limits, by the insurer except
after filing with the Purchasing Manager thirty (30) days’ prior
written notice of the cancellation or modification, CONSULTANT
shall be responsible for ensuring that current certificates
evidencing the insurance are provided to CITY’s Purchasing
Manager during the entire term of this Agreement.
18.4.The procuring of such required policy or
policies of insurance will not be construed to limit
CONSULTANT’s liability hereunder nor to fulfill the
indemnification provisions of this Agreement. Notwithstanding
the policy or policies of insurance, CONSULTANT will be
obligated for the full and total amount of any damage, injury,
28 o5o3~o
or loss caused by or directly arising as a result of the
Services performed under this Agreement, including such damage,
injury, or loss arising after the Agreement is terminated or the
term has expired.
SECTION 19. WORKERS’ COMPENSATION. CONSULTANT, by executing
this Agreement, certifies that it is aware of the provisions of
the Labor Code of the State of California which require every
employer to be insured against liability for workers’
compensation or to undertake self-insurance in accordance with
the provisions of that Code, and certifies that it wil! comply
with such provisions, as applicable,before commencing and
during the performance of the Services.
SECTION 20. TERMINATION OR SUSPENSION OF AGREEMENT OR SERVICES.
20.1. The city manager may suspend the performance
of the Services, in whole or in part, or terminate this
Agreement, with or without cause, by giving ten (i0) days’ prior
written notice thereof to CONSULTANT. Upon receipt of such
notice, CONSULTANT will immediately discontinue its performance
of the Services.
20.2.CONSULTANT may terminate this Agreement or
suspend its performance of the Services by giving ten (I0) days
prior written notice thereof to CITY, but only in the event of a
substantia! failure of performance by CITY.
20.3.Upon such suspension or termination,
CONSULTANT shall deliver to the City Manager immediately any and
all copies of studies, sketches, drawings, computations, and
other data, whether or not completed, prepared by CONSULTANT or
its contractors, if any, or given to CONSULTANT or its
contractors, if any, in connection with this Agreement. Such
materials will become the property of CITY.
20.4.Upon such suspension or termination by CITY,
CONSULTANT wil! be paid for the Services rendered or materials
delivered to CITY in accordance with the scope of services on or
before the effective date (i.e., I0 days after giving notice) of
suspension or termination; provided, however, if this Agreement
is suspended or terminated on account of a default by
CONSULTANT, CITY will be obligated to compensate CONSULTANT only
for that portion of CONSULTANT’s services which are of direct
and immediate benefit to CITY as such determination may be made
by the City Manager acting in the reasonable exercise of his/her
discretion
20.5.No payment, partial payment,
29
acceptance, or
0503 ! 0
partial acceptance by CITY will operate as a waiver on the part
of CITY of any of its rights under this Agreement.
SECTION 21. NOTICES.
All notices hereunder will be given in writing and mailed,
postage prepaid, by certified mail, addressed as follows:
To CITY:Office of the City Clerk
City of Palo Alto
Post Office Box 10250
Palo Alto, CA 94303
With a copy to the Purchasing Manager.
To CONSULTANT: Attention of the project director
at the address of CONSULTANT recited
above
SECTION 22. CONFLICT OF INTEREST
22.1. In accepting this Agreement, CONSULTANT
covenants that it presently has no interest, and will not
acquire any interest, direct or indirect, financial or
otherwise, which would conflict in any manner or degree with the
performance of the Services.
22.2.CONSULTANT further covenants that, in the
performance of this Agreement, it will not employ
subconsultants,contractors or persons having such an interest.
CONSULTANT certifies that no person who has or will have any
financial interest under this Agreement is an officer or
employee of CITY; this provision will be interpreted in
accordance with the applicable provisions of the Palo Alto
Municipal Code and the Government Code of the State of
California.
22.3.If the Project Manager determines that
CONSULTANT is a "Consultant" as that term is defined by the
Regulations of the Fair Political Practices Commission,
CONSULTANT shall be required and agrees to file the appropriate
financial disclosure documents required by the Palo Alto
Municipal Code and the Political Reform Act.
SECTION 23. NONDISCRIMINATION. As set forth in Palo Alto
Municipal Code section 2.30.510, CONSULTANT agrees that in the
performance of this Agreement, it shall not discriminate in the
employment of any person because of the race, skin color,
gender, age, religion, disability, national origin, ancestry,
sexual orientation, housing status, marital status, familial
status, weight or height of such person. CONSULTANT acknowledges
30 050310
that it has read and understands the provisions of Chapter 2.28
of the Palo Alto Municipal Code relating to Nondiscrimination
Requirements and the penalties for violation thereof, and agrees
to meet all requirements of Chapter 2.28 pertaining to
nondiscrimination in employment, including completing the form
furnished by CITY and set forth in Exhibit "E".
SECTION 24.MISCELLANEOUS PROVISIONS.
24.1. This Agreement will be governed by the laws
of the State of California.
24.2. In the event that an action is brought, the
parties agree that trial of such action will be vested
exclusively in the state courts of California or in the United
States District Court for the Northern District of California in
the County of Santa Clara, State of California.
24.3. The prevailing party in any action brought
to enforce the provisions of this Agreement may recover its
reasonable costs and attorneys’ fees expended in connection with
that action.
24.4.This document represents the entire and
integrated agreement between the parties and supersedes all
prior negotiations, representations, and contracts, either
written or oral. This document may be amended only by a written
instrument, which is signed by the parties.
24.5.The covenants, terms, conditions and
provisions of this Agreement will apply to, and will bind, the
heirs, successors, executors, administrators,assignees, and
CONSULTANTs, as the case may be, of the parties.
24.6.If a court of competent jurisdiction finds
or rules that any provision of this Agreement or any amendment
thereto is void or unenforceable, the unaffected provisions of
this Agreement and any amendments thereto will remain in full
force and effect.
24.7.All exhibits referred to in this Agreement
and any addenda, appendices, attachments, and schedules to this
Agreement which, from time to time, may be referred to in any
duly executed amendment hereto are by such reference
incorporated in this Agreement and will be deemed to be a part
of this Agreement.
24.8.This Agreement is subject to the fiscal
provisions of the Charter of the City of Palo Alto and the Palo
Alto Municipal Code. This Agreement will terminate without any
31 o5o3~o
penalty (a) at the end of any fiscal year in the event that
funds are not appropriated for the following fiscal year, or (b)
at any time within a fiscal year in the event that funds are
only appropriated for a portion of the fiscal year and funds for
this Agreement are no longer available. This Section 24.8 shall
take precedence in the event of a conflict with any other
covenant, term, condition, or provision of this Agreement.
32 050310
IN WITNESS WHEREOF, the parties hereto have by their duly
authorized representatives executed this Agreement on the date
first above written.
APPROVED AS TO FORM:CITY OF PALO ALTO
Senior Asst. City Attorney
APPROVED:
Director of Administrative
Services
Assistant City Manager
[CONSULTANT FIRM]
By:
Name:
Title:
(If corporation: President or Vice-President
By:
Name :
Title:
(If corporation: Secretary or Treasurer)
Taxpayer Identification No.
Attachments:
EXHIBIT "A":
EXHIBIT "B":
EXHIBIT "C":
EXHIBIT "D"
EXHIBIT "E":
(Compliance with Corp. Code § 313 is
required if the entity on whose behalf
this contract is signed is a corporation.
In the alternative, a certified corporate
resolution attesting to the signatory
authority of the individuals signing in
their respective capacities is
acceptable)
SCOPE OF WORK
SCHEDULE OF PERFORMANCE
COMPENSATION
INSURANCE
NONDISCRIMINATION COMPLIANCE FORM
050310
EXHIBIT "B"
SAMPLE ONLY
SCHEDULE OF PERFORMANCE
CONSULTANT shall perform the Services so as to complete each milestone within the
number of days specified below. The number of days to complete each milestone may
be increased or decreased by mutual written agreement of the project managers for
CONSULTANT and CITY [IF THERE IS A FIRM TERMINATION DATE IN SECTION 2
OF THE AGREEMENT ADD: "so long as all work is completed within the term of the
Agreement"]. CONSULTANT shall provide a detailed schedule of work consistent with
the schedule below within 10 days of receipt of the notice to proceed.
Milestones Completion
Number of Days From NTP
1.~ days
2.~ days
3.~ days
4.__ days
5.__ days
6.__ days
7.__ days
8.__ days
9.~ days
10.__ days
34 o~o3~o
(Version 1 - use for task based compensation)
S2~v~ T.~, ONT. Y
EXHIBIT "C"
COMPENSATION
The CITY agrees to compensate the CONSULTANT for professional services
performed in accordance with the terms and conditions of this Agreement, and as
set forth in the budget schedule below. Compensation shall be calculated based
on the hourly rate schedule attached as exhibit C-1, if applicable, up to the not to
exceed budget amount for each task set forth below.
The compensation to be paid to CONSULTANT under this Agreement for all
services described in Exhibit "A" ("Basic Services") and reimbursable expenses
shall not exceed $ CONSULTANT agrees to complete all Basic
Services, including reimbursable expenses, within this amount. In the event CITY
authorizes any Additional Services, the maximum compensation shall not exceed
$~ Any work performed or expenses incurred for which payment would
result in a total exceeding the maximum amount of compensation set forth herein
shall be at no cost to the CITY.
CONSULTANT shall perform the tasks and categories of work as outlined and
budgeted below. The CITY’s may approve in writing
the transfer of budget amounts between any of the tasks or categories listed
below provided the total compensation for Basic Services, including reimbursable
expenses, does not exceed $and the total compensation for Additional
Services does not exceed $
BUDGET SCHEDULE NOT TO EXCEED AMOUNT
Task 1 $
()
Task 2 $
()
Task 3 $
()
Task 4 $
()
Task 5 $
(
35 0503]0
Sub-total Basic Services
Rei m bursa ble Expenses
Total Basic Services and Reimbursable expenses $
Additional Services (Not to Exceed)
Maximum Total Compensation
$
REIMBURSABLE EXPENSES
CITY shall reimburse CONSULTANT for reimbursable expenses including,
postage, mileage and other miscellaneous costs, at cost plus 10%. All requests
for payment of expenses shall be accompanied by appropriate backup information.
Any expense anticipated to be more than $.00 shall be approved in
advance by the CITY’s project manager.
ADDITIONAL SERVICES
The CONSULTANT shall provide additional services only by advanced, written
authorization from the CITY. The CONSULTANT, at the CITY’s project
manager’s request, shall submit a detailed written proposal including a description
of the scope of services, schedule, level of effort, and CONSULTANT’s proposed
maximum compensation, including reimbursable expense, for such services
based on the rates set forth in Exhibit C-1. The additional services scope,
schedule and maximum compensation shall be negotiated and agreed to in
writing by the CITY’s and CONSULTANT prior to commencement of
the services. Payment for additional services is subject to all requirements and
restrictions in this Agreement
Work required because the following conditions are not satisfied or are exceeded
shall be considered as additional services:
[LIST CONSULTANT’S ASSUMPTIONS WHICH IF EXCEEDED WILL BE
CONSIDERED AS ADDITIONAL SERVICES- IE 10 MEETINGS, 3
SUBMITTALS ETC]
36 o5o3~o
Project Name Client
ATTACHMENT E
SAMPLE TABLE FORMAT
QUALIFICATIONS OF FIRM RELATIVE TO CITY’S NEEDS
Description of work Total Project Cost Percentage of work Period work was
performed firm as responsible completed
for
Client contact
information*
Did your firm meet the project schedule (Circle one) ¯ Yes No
Give a brief statement of the firm’s adherence to the schedule and budget for the project:
Did your firm meet the project schedule (Circle one) ¯ Yes No
Give a brief statement of the firm’s adherence to the schedule and budget for the project:
Did your firm meet the project schedule (Circle one) ¯ Yes No
Give a brief statement of the firm’s adherence to the schedule and budget for the project:
Did your firm meet the project schedule (Circle one) ¯ Yes No
Give a brief statement of the firm’s adherence to the schedule and budget for the project:
*Include name, title and phone number.
37 o5o3~o
ATTACHMENT G
INSURANCE REQUIREMENTS
CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, SHALL FOR THE TERM OF THE
CONTRACT OBTAIN AND MA1NTA1N INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW,
AFFORDED BY COMPANIES WITH A BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED TO TRANSACT
INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED, BELOW:
REQUIRED
YES
YES
YES
YES
YES
YES
TYPE OF COVERAGE
MINIMUM LIMITS
EACH
OCCURRENCE AGGREGATE
WORKER’S COMPENSATION
AUTOMOBILE LIABILITY
COMPREHENSIVE GENERAL
LIABILITY, INCLUDING PERSONAL
INJURY, BROAD FORM PROPERTY
DAMAGE BLANKET CONTRACTUAL,
AND FIRE LEGAL LIABILITY
COMPREHENSIVE AUTOMOBILE
LIABILITY, INCLUDING, OWNED,
HIRED, NON-OWNED
REQUIREMENT
STATUTORY
STATUTORY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY DAMAGE
COMBINED,
BODILY INJURY
EACH PERSON
EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY DAMAGE,
COMBINED
ALL DAMAGES
PROFESSIONAL LIABILITY,
INCLUDING, ERRORS AND
OMISSIONS, MALPRACTICE (WHEN
APPLICABLE), AND NEGLIGENT
PERFORMANCE
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,00~000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$I,000,000
$I,000,000
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: PROPOSER, AT ITS SOLE COST AND EXPENSE,
SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY RESULTANT
AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY PROPOSER AND ITS
SUBCONSULTANS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S LIABILITY
AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CITY, ITS COUNCIL MEMBERS, OFFICERS, AGENTS,
AND EMPLOYEES.
II.
INSURANCE COVERAGE MUST INCLUDE:
A.A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE OR OF
COVERAGE CANCELLATION; AND
B.A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S
AGREEMENT TO INDEMNIFY CITY - SEE SECTION 18, SAMPLE AGREEMENT FOR SERVICES.
SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS SECTION AND IV
THROUGH V, BELOW.
A.NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER):
B.NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER:
38 050310
C.POLICY NUMBER(S):
D.DEDUCTIBLE AMOUNT(S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR APPROVAL):
III.
IV.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AND PROPOSER’S SUBMITTAL
OF CERTIFICATES OF INSURANCE EVIDENCING COMPLIANCE WITH THE REQUIREMENTS SPECIFIED HEREIN.
ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO "ADDITIONAL INSURES"
A.PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS
AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY OTHER
INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSURES.
B.CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES UNDER THE POLICY SHALL
NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER, BUT THIS
ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL LIABILITY
OF THE COMPANY UNDER THIS POLICY.
C.NOTICE OF CANCELLATION
IF THE POLICY tS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE
NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY
(30) DAY WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM,
THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (I0) DAY WRITTEN NOTICE BEFORE
THE EFFECTIVE DATE OF CANCELLATION.
PROPOSER CERTIFIES THAT PROPOSER’S INSURANCE COVERAGE MEETS THE ABOVE REQUIREMENTS:
THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE SAME
SIGNATURE(S) AS APPEAR(S) ON SECTION II, ATTACHMENT A, PROPOSER’S INFORMATION FORM.
Firm:
Signature:
NalTte:
(Print or type name)
(Print or type name)
Signature:
Name:
NOTICES SHALL BE MAILED TO:
PURCHASING AND
CONTRACT ADMINISTRATION
CITY OF PALO ALTO
P.O. BOX 10250
PALO ALTO, CA 94303.
39 050310
ATTACHMENT H
VENDOR EXPERIENCE CHECK LIST
Please check offthe items with which your finn has had experience, and describe that experience.
Mark
with
below
Type of Experience
Engineering services delivery
Regulatory and legal requirement fulfillment
Procurement
Operation and Maintenance
Business Plan Development
Financing Plan Devt and Implementation
Personnel Training
Resource Planning
Customer Service
Customer Billing
Other:
Municipal govt. context?
(Mark Y/~
40 050310
ATTACHMENT 2
City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
8
DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:JANUARY 17, 2006 CMR: 111:06
SUBJECT:REQUEST FOR COUNCIL DIRECTION ON LEGAL, FINANCIAL,
OPERATIONAL, AND OTHER ISSUES REGARDINGISSUANCE OF A
FIBER TO THE HOME REQUEST FOR PROPOSALS
RECOMMENDATION
Staff requests that the Council, given its review of the discussion of the legal, financial,
operational, policy, and other issues outlined below, provide direction on:
1.Whether to proceed with a Request for Proposal (RFP) for Fiber to the Home or other
high-speed broadband services for the City of Palo Alto
2.What level of risk to the General Fund--in a range estimated to run from $0.4 millior~ to
over $16 million--would be acceptable within such a proposal
3. Whether or not Council is willing to entertain proposals using wireless technology which
is gaining increased attention by municipalities seeking universal connectivity
4. Which business model or relationship with a provider (Model 1 or 2) Council prefers
BACKGROUND
At the October 24, 2005 Council meeting, staff presented to Council a report regarding the legal,
financial, operational, and other issues involved in issuing such a Request for Proposals (RFP).
At the start of that meeting, however, four Council Members recused themselves from the
discussion due to potential conflicts of interest. The City Attorney then clarified that to approve
a contract arising from an RFP, five votes--a unanimous vote of the remaining five Council
members--would be necessary to see the RFP process to completion. Since Council members
were not certain that all five would unanimously support such a program, they did not want to
direct staff to proceed with an effort that Council could not see through to completion. Therefore,
they agreed to postpone discussion of the staff report until the new Council is seated in January,
2006.
The October 24 staff report (398:05) (Attachment A) describes the chronology of the FTTH
effort in Palo Alto; the legal, financial, and operational implications of proceeding with the RFP;
and policy issues for discussion by Council.
CMR: 111:06 Page 1 of 3
As updates to the October 24, 2005 staff report, please see the following revised sections: Legal
Issues, Wireless System Option, and Resource Impact. In addition, please refer to Attachments
B and C which summarize, respectively, the wireless efforts of cities throughout the country, and
Fiber to the Home projects of other cities in California.
Legal Issues
The City Attorney’s Office has reviewed all legal points previously presented to the City
Council. While significant legal issues remain, none constitute "showstoppers". The City may
proceed with the RFP and examine all of the legal concerns previously outlined, and we believe
that all of those legal matters can be addressed in order to allow the project to proceed. In
addition, a new review of the outside counsel and internal city attorney resources needed for the
present proposal has allowed us to reduce the potential cost estimate for legal review and
preparation of the RFP.
Wireless System Option
The October 24, 2005 staff report requests Council clarification of its intention with regard to
wireless technology with transmission speeds of le~.s than 100 Mbps (see pages 8-9). In addition
to the discussion there, staff would like to add the following:
A precedent has been set in Philadelphia and is under consideration in San Francisco in which
the vendor builds the system at no cost to the City. In addition, smaller cities such as.Mountain
View, Sunnyvale, Milpitas, Cupertino and Santa Clara have authorized citywide, low- or no-cost
WiFi service. In December 2005, Sunnyvale selected MetroFi--the vendor serving Santa Clara
and Cupertino--to establish a free, citywide, wireless service. Residents will receive free access
in exchange for accepting a half-inch advertising strip at the top of their Web browser at~all
times. Residents in Santa Clara and Cupertino currently pay $19.95/month for the service
(without ads), but following the Sunnyvale implementation, MetroFi will offer these cities the
free-with-ads service option as well. The speed on all three cities’ networks is 1 megabit per
second for downloads and 256 kilobits per second for up!oads--comparable to typical DSL
speeds. Tropos Networks implemented a 5-square-mile mesh network in Milpitas that gives
police officers, firefighters, and building inspectors, among others, access to data speeds up to
five megabytes per second. The network went live in summer 2004.
In November 2005, Mountain View approved Google’s offer to build a free WiFi network across
the city. Google claimed it would take just two months to build out the network, at no cost to the
city. According to the November 15, 2005 staff report, "The City potentially could receive an
annual payment of approximately $12,600 [adjusted annually for increases in the Consumer
Price Index (CPI)] for the placement of Google equipment on City-owned light poles. All
installation and maintenance costs will be borne by Google, and utility costs will be paid by the
City and fully reimbursed by Google, which is estimated to be $3,000 to $4,000 per year."
(Attachment B: Municipal Wireless Efforts across the United States summarizes these efforts.)
Staff recommends that Council leave open the possibility of wireless technology to provide
universal internet access and connectivity at relatively low cost. Recognizing the current
limitations of wireless versus fiber (e.g., bandwidth, security issues), it is important to note that a
wireless network build-out for the 15-18 square miles east of Highway 280 could be achieved for
$3 million. This estimate is based on the per-square mile costs of comparable projects around
CMR: 111:06 Page 2 of 3
the country, and assumes that the dark fiber infrastructure could be used as a backhaul for the
wireless network.
RESOURCE IMPACT
Resources expended on proceeding with the RFP would include staff time and outside legal
costs. Please note that any incremental legal or other non-staff outlays would require a new
appropriation in theGeneral Fund 05-06 and Enterprise Fund budget.
Staff estimates that approximately 580 hours of ASD and Utilities staff time, at an estimated cost
of $41,000, would be expended to develop and issue the RFP, review responses to the RFP, and
select the most responsible bidder. In addition, an estimated 360 hours of City Attorney staff and
outside counsel time would be expended, at an estimated cost of $75,000 to $t00,000. If the RFP
issuance spurs a legal challenge, those additional costs are estimated at $250,000 to $750,000 or
more if the challenge becomes protracted.
POLICY IMPLICATIONS
Policy implications of this report are discussed aboye.
ENVIRONMENTAL REVIEW
The actions requested in this report do not constitute a project for the purposes of the California
Environmental Quality Act.
PREPARED BY: Joe Saccio, Deputy Director, Administrative Services
Nancy Nagel, Senior Financial Analyst, Administrative Services
Blake Heitzman, Manager, Utility Telecommunications
Grant Kolling, Senior Assistant City Attorney
DEPARTMENT HEAD APPROVAL: ~-~...=._
~)~r~cR~orY, EA~J~ ~7’i*’minig~ative ~ e’rvice s
CIT "Y MANAGER APPROVAL: ~’~. ~’~ ~O~,’d-.-~J
sl an i IvS2a g er
ATTACHMENTS
Attachment A: CMR: 398:05: "Request for Council Direction on Legal, Financial, Operational,
and Other Issues Regarding issuance of a Fiber to the Home Request for
Proposals"
Attachment B: Municipal Wireless Efforts Across the United States
Attachment C: Cities in California With Optical Fiber Networks
CMR: 111:06 Page 3 of 3
ATTACHMENT A
City of PaSo Al to
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
10
DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:
SUBJECT:
OCTOBER 24, 2005 CMR: 398:05
REQUEST FOR COUNCIL DIRECTION ON LEGAL, FINANCIAL,
OPERATIONAL, AND OTHER ISSUES REGARDING ISSUANCE OF
A FIBER TO THE HOME REQUEST .FOR PROPOSALS
RECOMMENDATION
Staff requests that the Council, given its review of the discussion of the legal, financial,
operational, policy, and other issues outlined below, provide direction on:
1.Whether to proceed with a Request_for Proposal (RFP).
2.What level of risk to the General Fund--in a range estimated to run from $0.4 million
to over $16 million--would be acceptable.
3.Whether or not Council is willing to entertain proposals using wireless technology.
4.What business model or relationship with a provider (Model 1 or 2) is preferred by
Council.
BACKGROUND
At its July 25, 2005 meeting, Council passed two motions. The first motion was to terminate
the current FTTH trial. This motion passed on a 6-0 vote. The second motion, which passed
on a 5-1 vote, requested that staff report back to Council on:
"Legal and financial issues regarding the issuance of [an] RFP that solicits the
construction and operation of a minimum 100 megabit per second [Mbps] citywide
infrastructure providing access and service to all residents and businesses by one or
more service providers." Furthermore, this "ultra-high broadband" service would
provide "data, video, and telephony services with the physical infrastructure owned by
the City and limited capital risk exposure to the City."
Prior to passing this motion, Council discussed a Colleagues Memorandum (Memo) on a
"Revised Approach for Fiber to the Home" (July 21, 2005). In addition to requesting
clarification of critical FTTH issues raised in prior staff reports, the Memo requested issuing
an RFP that envisions "some type of.public/private partnership structure [that] could meet all
requirements of the City." The "requirements" are succinctly stated in Council’s motion.
CMR: 398:05 Page 1 of 11
The Memo also raised an issue that is somewhat at odds with the final motion passed by
Council. This issue, which requires discussion and resolution before an RFP can be drafted,
is presented in the Discussion section below. The Memo also alludes to the history of the
City’s FTTH effort. To provide a broader context for public input and Council discussion, a
brief history of that effort ensues.
The City first embarked upon its exploration of a Fiber to the Home (FTTH) project in 1999,
when it issued an RFP for high-speed Universal Telecommunications Services. When the RFP
period closed on January 18, 2000, five responses had been received. The responses were
then reviewed by a broad cross-departmental team, and three were rejected as non-responsive.
The remaining two bidders were interviewed: one was rejected base upon his responses to the
questions, and the final bidder withdrew his proposal before an award could be made.
Later that year, on November 13, Council approved and agreed to fund a FTTH trial for one
year. The purpose of the trial was to test the concept of a fiber business in Palo Alto by
offering the service to 66 homes in the Community Center neighborhood for one year.
Council authorized $680,000 for the build-out needed for the trial, and in May, 2001,
construction began. Service to trial participants began in October, 200!. Once the trial got
underway, the Utilities Department formed an FTTH team to advise staff and review data and
plans regarding the project.
The trial proved successful, in that participants were very happy with the service. However,
when initial investment and overhead expenditures were included in the calculation, it was not
profitable for the City.
In May, 2002, Uptown Services was hired to complete a business Case study to determine
whether a full-scale FTTH business would be viable for the City. In September, 2002, the
business case was completed, and staff recommended to the UAC and to Council that it fund
the development of a business plan and authorize the continuation of the fiber trial for one
more year. Council agreed to both recommendations.
In August, 2003, Uptown Services completed the business plan, including twenty-year pro
forma financial statements, monthly budgets, and sales, marketing, and operational plans for
building out, launching and operating the fiber business. In its business plan, Uptown
demonstrated that a FTTH utility could be economically viable over the 20-year construction
bond period, assuming the Electric Fund would issue revenue bonds to fund the fiber build-
out. In March 2004, after some discussions between the UAC, Council and staff regarding
revisions to the business plan, the final version of the business plan was presented to Council.
In the following weeks, additional legal analysis showed that in fact, the Electric Utility could
not (continue to) fund the FTTH project. Therefore, no Electric or other Enterprise utility
revenue bonds could be issued, and financing costs would be greater than those assumed in
the business plan.
In April. and May 2004, staff presented revised financing options to the UAC and to the
Council reflecting the additional legal information. Staff recommended against issuing Utility
revenue bonds, General Fund Certificates of Participation, or an Enterprise Tax backed by a
CMR: 398:05 Page 2 of 11
special tax. The only legally and politically feasible options seemed to be Assessment
Districts or finding a private investor. The fdrmer option seemed prohibitive given the slow
pace of implementation and the potential for property owners having to pay the assessment
fee even when they do not benefit from the service. The latter option seemed too expensive,
adding between $2 and $15 million in estimated interest costs over the first five years. In
addition, this opt!on yvould not provide all the capital necessary for the project build-out, since
the project could not support the debt service on the full $32 million required for the complete
build-out. Moreover, no funding source for ongoing operational costs, estimated at $8 to $10
million, had been identified.
The UAC urged staff to explore alternative financing options and to monitor progress in other
jurisdictions while continuing the fiber trial. The Council amended this recommendation and
asked staff to monitor other jurisdictions only and to continue the trial for one more year. In
July 2005, staff reported back to Council on progress in other California jurisdictions. Based
on the uneven and sometimes turbulent progress of other California municipal efforts, staff
recommended ceasing work on the FTTH program, and therefore discontinuing the trial.
On July 25, 2005 Council approved the discontinuation of the trial, but requested that staff
report back on "legal and financial issues" to lay the groundwork for issuing an RFP for a
private-sector partner to construct and operate a 100 Mbps or comparable high-speed
broadband service. The following discussion outlines the .lega!, financial, operational and
other issues and questions for Council consideration.
DISCUSSION
The City’s Risk Oversight Committee, which consists of the Assistant City Manager and ~he
Directors of the Administrative Services and Utilities Departments with advice from the City
Attorney’s Office, took the lead in responding to the issues raised in Council’s FTTH motion
of July 25, 2005. The issues must be viewed in the dynamic context of existing and proposed
laws and regulations, current and emerging techno!ogies, existing City fiber infrastructure and
business initiatives, private sector telecommunication investments and interests in the City,
and the demands from the community for a new public service. Tdward this end, staff has
outlined the central issues that must be addressed if the City is to take the first steps in making
broadband services available to the community.
Legal Issues
In deciding whether to move forward with an RFP, Council should be aware of the following
legal issues:
Federal and State regulatory uncertainties. The deployment of broadband nationwide
and statewide has spawned, among other things, legislation that potentially could
injure (or aid) local governments bent on advancing broadband services in their
communities. Collectively, they have compelled local governments to very carefully
consider the pros and cons of proceeding with plans to build high-speed broadband
systems and offer broadband services.
The large telephone companies have been actively supporting recent federal
legislation. At one end of the spectrum is S. 1504 (Ensign), which attempts to rewrite
CMR: 398:05 Page 3 of 11
the 1996 Telecommunications Act. The Ensign bill would, among other things,
eliminate local cable franchising authority and preempt existing cable franchises,
except to the extent consistent with this bill, local authorities would be prohibited from
enforcing cable customer service standards, and cities and municipal utilities would be
prohibited from offering communications services without giving the private sector a
right of first refusal to offer these services.
Other telephone company-supported legislation include the nationwide franchising
legislation [H.R. 3146 (Blackburn/Wynn) and S. 1349 (Rockefeller/Smith)], which
effectively would permit the telephone companies to provide video services over their
networks without obtaining loca! cable franchises.
H.R. 2726 (Sessions) would prohibit cities and municipal utilities from providing
telecommunications, cable and information services where the private sector is
offering substantially similar services. But, it does grandfather existing municipal
telecomm systems. In contrast, S. 1294 (Lautenberg/McCain) protects the right of
cities to provide broadband service, but .cities would be required to apply regulations
to the private sector’s broadband service in a manner that does not discriminate in
favor of the cities’ broadband service.
Qpen and Closed Provider Networks. The City authorized the construction of the dark
fiber backbone in 1996 on an "open service provider network" basis. The purpose of
the backbone was to accelerate the dep!oyment of high-speed broadband services to
the City’s residents through third party providers. So far, the City’s licensee base
consists primarily of internet service providers. The continued vitality of this business
model could be challenged in light of recent legal and regulatory developments which
characterize broadband services as "information services" free from state and local
regulation.
The future trend suggests the FCC favors "closed network" systems as a policy matter;
the large telephone companies and the cable companies ~ay provide information
services and pretty much limit who can gain access to their networks. How effectively
an °°open" system could compete head-to-head with the "closed" networks of Comcast
and SBC is not clear. The current thinking of broadband business experts is that
advertising dollars will fund the content offerings that are made available primarily on
closed networks owned and operated by the large industry participants, the cable
companies and the regional Bell Operating Companies, for example, SBC and
Verizon. Their unique offerings in video, data and voice are projected to attract more
customers, leaving a smaller customer base to the industry participants that don’t own
their own facilities but nevertheless need access to them. The facilities available to
them over the long term will be the open systems.
Cable franchise requirements. Under federal, California and local laws and the City’s
cable franchise agreement, any entity offering residents of Palo Alto multi-chalmel
video services over wire-line facilities located in the public right-of-way must obtain a
cable television franchise on terms and conditions comparable to those imposed upon
the incumbent cable franchisee, Comcast. It should be noted that Comcast has
CMR: 398:05 Page 4 of ll
publicly stated the City cannot properly act as both cable regulator and a cable
competitor under applicable laws. Comcast might test the validity of its legal position
by challenging the City’s right to embark upon the Project.
Voter approval. If the purpose of the 100 Mbps or comparable high-speed broadband
project (!~Pro~iect") is to deploy broadband communications facilities on a citywide
basis and render broadband service as indispensable as water service and electric
service, then any Project infrastructure base charge levied on all of the City’s utilities
customers could be construed as a property-related fee and thus would require voter
approval, either a majority vote of property owners affected, if the charge is
considered a special assessment, or a two-thirds vote of the electorate, if the charge is
considered a special tax.
In contrast, service and installation charges levied only on those to whom the Project’s
broadband service is made available would not present an issue for voter approval, if
those charges are levied on those requesting and using the broadband service, the
charge does not exceed the reasonable cost of providing the service, and the charge is
collected by means of a utility bill, no.t on the property tax roll.
Establishment of a Broadband Utility. The City’s dark fiber backbone and the FTTH
trial project have been funded by the Telecommunications Subfund of the Electric
Utility as incidents of electric utility operations. The continuation of this approach
might well be questioned, because the characteristics of electric service and broadband
service are separate and distinct. The propriety of using Electric Utility revenues to
defray non-electric high-speed broadband services is an issue that could be resolved
simply by establishing a new and separate Broadband Utility.
Implicit in the establishment of the Broadband Utility is an obligation to repay to the
Electric Utility the monies it loaned the Telecommunications Subfund to defray the
dark fiber backbone and the FTTH trial capital expenditures. The Electric Fund has
invested $2.5 million in the dark fiber operation. The princit~a! plus a reasonable rate
of interest should be paid upon the establishment of the Project.
Finally, it is also implicit that interfund loans and subsidies by the other Enterprise
Funds to the Broadband Utility could garner close scrutiny from those who believe
Proposition 218 would apply to such funding mechanisms. The City must stand
.ready, willing and able to fund any revenue shortfalls and excess expenses with the
General Fund.
o Amendment of City Charter. The Charter only allows the Council to appoint an
independent board for cable television matters, including matters relating to the
selection of content, but not communications matters. Federal law prohibits the
Counci!, as the franchising authority, from exercising control over cable television
content. If the Project under either a public-private partnership model (see Model 1
below) or a private operator overbuild model (see Model 2 below) would effectively
require the integration of the operational decision-making process and the selection of
CMR: 398:05 Page 5 of 11
content, then the Charter should be amended to establish an independent board or
commission to deal with communications matters.
Management of existing dark fiber a~reements. The City has embarked on an active
dark fiber backbone licensing program. There are in excess of 30 dark fiber license
agreements, and the rights of the licenses must be respected and honored if the
management and control of the backbone will be delegated to the private operator.
The City might be required to assign the license agreements if this is the arrangement
with the private operator. Alternatively, sufficient capacity to satisfy the requirements
of the City’s current dark fiber licensees would have to be excluded from the portion
of the backbone capacity over which the private operator was given management or
control.
Amendments of the Palo Alto Municipal Code. If the City establishes a Broadband
Utility or Telecommunications Utility to effectuate the Project, then appropriate
amendments to several sections of the Municipal Code will be required. The Director
of Utilities or other department level manager must be authorized by Section 2.08.200
to provide broadband service to the community. To the extent authority to charge
assessments against real property for the construction of the Project will be sought,
Section 13.12.040 must be amended to provide that a broadband [fiber optic network]
facility is an improvement that may be constructed and for which assessments may be
charged. Finally, if these assessments are used to secure revenue bonds used to pay
for the Project’s construction costs, then Section 12.28.010(b) must be amended to
authorize the City to construct and operate a broadband [fiber optic network] uti!.ity
system as an "enterprise."
City biddin~ laws. If the City will own any part of the Project to be constructed under
Model 1 or Model 2, then the successful bidder must be required to comply with the
City’s bidding requirements for a public works project. This means that, at a
minimum, the successful bidder must competitively select the construction contractor
for the Project.
10.California labor laws. If the City will delegate to the successful bidder the effective
management and control of the City’s dark fiber backbone operations, then the City
must first comply with the °~meetoand-confer" requirements of State law if such
delegation would result in a change in terms of employment.
11.Regulatory permits and authorizations. If traditional telephone service will be offered
as part of the Project services, then all appropriate regulatory approvals must be
obtained. The California Public Utilities Commission regulates telephone
corporations in the provision of POTS [plain old telephone service], and a certificate
of public convenience and necessity must be obtained. It is more 1.ikely that the
Project will facilitate the provision of voice over internet protocol (VoIP), and
consequently neither federal nor state regulatory approvals would be required. A
system providing VoIP would, however, be subject to federal and state law
requirements relating to 911 and E911 capability, and to the federal Communications
Assistance for Law Enforcement Act, which would require the system to be designed
CMR: 398:05 Page 6 of 11
to be capable of eavesdropping and tapping on request of federal, state or local law
enforcement authorities.
Financial and Operational Issues
As Council considers whether to direct staff to proceed with issuing an RFP for the build-out
and operation of a broadband service to Palo Alto residents, it should consider a number of
financial and opdrational issues.
Financial Risk. Moving forward with an FTTH project will increase financial risk to
the General Fund. The premise of legal issue number 5 is that the Electric and other
Enterprise funds are separate entities that cannot fund a future telecommunications
effort. Any and all financial support and risk on the City’s part would therefore
default to the General Fund. The City faces real and potential legal costs in moving
forward with the project. These include outside counsel fees of between $75,000 to
$150,000 for advisory work as well as legal challenges by Comcast, SBC or a
disappointed bidder that could cost the City an estimated $250,000 to $750,000. A
protracted legal battle would cost signifi.eantly more.
It is likely that in a public-private partnership (see Model 1 below), the City will be
asked to pledge an asset or share in the capital improvement costs. Based upon
estimated capital improvement costs of $32 million for a fiber optic Project.build-out,
a partner may request additional City investment. What share of the capital
improvement costs is the City willing to bea~- and what sources of funding will the
City utilize? A 5 to 50 percent share of capital improvement costs ranges from $1.6 to
$16 million. These amounts represent 7.6 and 75.8 percent, respectively, of the City’s
projected General Fund Budget Stabilization Reserve for FY 2005-06. It is important
to note that this discussion assumes that the partner will bear the costs of operating and
maintaining an FTTH system.
The costs of an FTTH program should be weighed in the context of other General
Fund revenue and expense challenges as outlined in the City;s Long Range Financial
Plan. These include, for example: existing infrastructure requirements, major new
facility needs, rising employee benefit costs and retiree medical liabilities. Moreover,
the City faces a variety of challenges on the revenue side with key sales tax sources
threatening to leave, stiff competition in the retail and hotel sectors, and a changing
regulatory and technological environment that may endanger existing revenue sources
such as franchise fees and the telephone utility users tax.
o Staffin~ Priorities and Costs. Issuing an FTTH RFP will require a substantial
reallocation of current staff efforts and priorities by the City Manager’s and Attorney’s
offices as well as the Administrative Services and Utilities departments. Major
initiatives underway include, foi" example, Golf Course realignment, building a new
police building, locating an auto row at the MSC and relocating City utility and public
works functions, airport discussions with the county, economic development activities,
and efforts to find new sources of revenue such as a Business License Tax. One or
more of these assignments would need to be delayed, and staff would look to Counci!
for reprioritization.
CMR: 398:05 Page 7 of 11
Another "cost" of conducting an FTTH RFP process would come from the redirected
efforts of Telecommunications staff who are currently working on generating
additional business from the dark fiber ring. Staff estimates, based on current
initiatives, that it could procure an additional $0.54 million in revenue (See Resource
Impact Sectio.n for a more complete discussion). Work on a new RFP would place
these effo~s at risk.
Depending upon the eventual relationship with a provider, the City may need
additional staff for customer service, construction monitoring, maintenance and other
functions resulting from the broadband project. Based on the ~level playing field"
conc.ept addressed in the Legal Issues section number 3, the City may need to hire an
additional staff person to administer miscellaneous contracts and franchise agreements
with the incumbent franchisee as well as with a new cable provider. As mentioned,
these costs would be borne by the General Fund. Specific cost estimates of the
required staffing may be found in the table in the "Two Models" section below.
Operational Risk. The Utilities Department must maintain control over the dark fiber
ring. Critical system relaying functions for the electric system, such as remote system
controls for all the utilities and the City’s LAN, use the current dark fiber ring.
Utilities staff does not recommend allowing third parties access to key splice points
for the connection and management of the fiber system. Therefore, a potential bidder
may need to overbuild the system or lease lines from from the City as represented by
the Department of Utilities. In addition, if the private partner opted to place facilities
in the Electric Utility’s pole space, utilities staff would have to monitor and insp~ct
completed construction to ensure compliance with General Order 95 adopted by the
California Public Utilities Commission. A third-party operator would have to retain
qualified line personnel to work in close proximity to energized electric conductors
and equipment.
Wireless System Option
In comparing the Colleague Memorandum of July 21 to Council’s final motions, one issue
arises that necessarily will require the Council’s clarification. The Memorandum states:
The City "...would welcome proposals using one or more various technologies,
including but not limited to optical fiber, copper, wire, wireless, or AC power lines."
The approved Council motion and the Memorandum both appeared to set a minimum
bandwidth requirement of 100 Mbps. Current mainstream wireless standards (IEEE standards
802.1 la/802.1 lg), however, establish a 54 Mbps bandwidth. This is well below the minimum
cited in the Council’s motion. Is the Council willing to consider a citywide wireless system
(WiFi and!or WiMax) proposal that is currently unable to offer at least 100 Mbps service but
nevertheless meets the current industry standard for wireless transmission service? If so, it
will have to clarify its second motion accordingly.
Staff would like to note that dozens of cities around the country, most recently Philadelphia,
Sacramento, and San Francisco, have moved towards establishing full-scale, citywide wireless
CMR: 398:05 Page 8 of 11
systems. A precedent has been set in Philadelphia and is under consideration in San Francisco
in which the vendor builds the system at no cost to the City. In light of these developments,
wireless technology and the universal internet access it would provide at relatively low cost
do seem worthy of consideration.
Two Models
There are, undoubtedly; a variety of possible business models or relationships for the
broadband project, but given the issues outlined above, staff suggests the following two
models as the most viable for structuring the RFP and the ensuing project:
Model #1 - Project.is a public-private partnership between the City and a private
operator. The City retains ownership of the dark fiber ring, but the operator licenses
the City’s dark fiber ring, building out and owning any additional required
infrastructure. Product offerings may include high-speed data and video services. If
video services are offered, they would be offered by the operator. Otherwise, a new
board selected but not directly overseen by the Council, must be formed. In either
case, the private partner must obtain from the City a cable franchise on terms and
conditions that are comparable to those in Comcast’s franchise.
Model #2 - The Project is entirely built and owned by the operator. If the operator
chooses to offer video services, it needs to apply for and receive a franchise from the
City on terms and conditions that are comparable to those in Comcast’s franchise.
The following table summarizes the implications of each model:
Issue:
What would the City
contribute to the project?
What would City own?
Does project require
voter approval?
Additional staffing
required?
Other costs to City
Model #1
Discounted Dark Fiber
licensing fees, right-of-way to
Utility poles. Possible other
expenditures required by
private partner
Dark Fiber Ring
Approval not necessarily
required, but advisable
YES. Utilities staff would
have to inspect completed
construction; additional
customer service staff may be
required. These costs are
estimated at $50,000 to
$200,000 per year, depending
on the system design.
Additional dark fiber
maintenance and repair costs
Model #2
Accelerated approval
processes across City
departments. Possible
other expenditures required
by privat~ partner
Dark Fiber Ring, but no
part of broadband-to-the-
home infrastructure
Approval not necessarily
required, but advisable
YES. Additional staff time
would be needed to oversee
and regulate 2 cable
franchisees rather than one.
These costs are estimated at
$100,000 .per year,
including staff costs and
outside legal and technical
expertise.
Unspecified
CMR: 398:05 Page 9 of 11
In conclusion, staff requests that Council discuss and provide direction on all of the issues
identified in this discussion and the relationship it envisions with a private provider.
RESOURCE IMPACT
Resources expended on proceeding with the RFP would include staff time, outside legal costs,
and foregone revenues for an enhanced Dark Fiber business initiative. Please note that any
incremental legal or other non-staff outlays would require a new appropriation in the General
Fund 05-06 budget.
Staff Time and Outside Legal Costs
Staff estimates that approximately 1,170 of staff and outside legal counsel hours, at a cost of
$159,000-$234,000, would be expended to develop and issue the RFP, review responses to
the RFP, and select the most responsible bidder. The estimated staff time breaks out as
follows:
Utilities: $39,000
Attorney’s Office (including outside counsel
$180,000
ASD: $15,000
but not litigation costs): $105,000-
If the RFP issuance spurs a legal challenge, those costs are estimated at $250,000 to $750,000,
or more if the challenge becomes protracted.
Lost Revenues
The Telecomm Division is currently in the midst of overhauling the dark fiber business,
including a new rates proposal, revising the standard contract, meeting an increasing customer
project demand (therefore increasing sales), getting ready for a Phase 2 Business Plan which
will target the best areas for business development, training a new staff person, and setting up
an infrastructure database. If staff were asked to proceed with an RF.P, these activities would
be delayed or would not receive adequate attention, possibly resulting in a decline in revenue.
Staff estimates that the permanent revenue loss would be in the neighborhood of $540,000.
POLICY IMPLICATIONS
Policy implications of this report are discussed above.
ENVIRONMENTAL REVIEW
The actions requested in this report
California Environmental Quality Act.
do not constitute a project for the purposes of the
PREPARED BY: Grant Kolling, Sr. Assistant Attorney, City Attorney’s Office
Joe Saccio, Deputy Director, Administrative Services
Nancy Nagel, Senior Financial Analyst, Administrative Services
Blake Heitzman, Manager, Utility Telecommunications
CMR: 398:05 Page 10 of 11
Director, AdJninistrative Services
"~’~IL Y-’-~-ARRI S’0N
Assistant City Manager
CM-R: 398:05 Page 11 of 11
Attachment B
MUNICIPAL WIRELESS EFFORTS ACROSS THE UNITED STATES
City
Anaheim, CA
Atlanta. GA
Austin, TX
Cerritos, CA
Cleveland, OH
Corpus Christi, TX
Cupertino
Half Moon Bay
Hermosa Beach, CA
Houston, TX
Las Vegas, NV
Milpitas
Vendor
Earthlink
Biltmore
Communications
No single vendor
Aiirnet Wireless
OneCleveland, a
nonprofit
corporation
Tropos
MetroFi
Coastside Net
LA. Unplugged
Unknown yet
MeshNetworks
and Cheetah
Wireless Tech
Tropos Networks
Status
Selected Earthlink for a 20-year franchise agreement to build out
citywide Wi-Fi network in October 2005. Will construct 2-sq-mi tria
area, then complete city by Q4/06
In April/04, City approved plans to build citywide network within
three years. Day passes and monthly subscriptions will be
available.
Austin ranked 3rd in nation in Intel poll, released in June, for
greatest amt of wireless I nternet accessibility in the country. 100
~laces offer free wireless Internet, compared to just more than 50 in
Houston, Seattle, and SF. Austin Wireless City Project claims
people using free Internet pumped $500K into businesses
participating in the project.
As of April, 2004, wireless networking available throughout city’s 8
sq mi and to all 52,000 residents, for $30/month. Vendor paid for
and owns network.
Citywide wireless network will be free of charge to users.
iOneCleveland, the nonprofit coordinating the effort, has also used
underground fiber-optic cable to build its own broadband network
for government offices and nonprofits. Citywide progress has beer
stalled pending the November ’05 mayoral election.
Initial deployment of 18.5 sq mi for use by city-owned wate~ and
gas utilities, public works depts and public safety agencies is
complete. Build-out to entire city’s 147 sq mi was expected by
March 2005.
Wi-Fi available to 75% of households. $20/month for 1 Mbps
including wireless modem, built-in security. Vendor spent $5
million on engineering, software, architecture - all useable in other
cities. Implemented in May 2005.
Since 2003, WiFi has blanketed 5 blks of downtown’s Main Street.
Fee ranges from $3 per 15 mins. To $15 for 3 hours. Coastside
uses FHP Wireless, a WiFi insfrastructure co. in San Mateo to hell:
build it. Network uses Coastside’s wired’backbone for backhaul.
In August, 2004, Phase 1 was launched, covering 35 percent of the
City, centered around the Downtown, City Hall, and adjacent
!neighborhoods. Full deployment was expected in spring of 2005.
City paying for installation, and planned to run its own ISP,
collecting the advertising revenue to offset expenditures. Resident~
will receive the service for free.
City was looking for a company to build and pay for a wireless
network. Expected cost: $100 million for entire 620-sq-mi Houstor
area ($1 million for downtown only).
Initial deployment planned for downtown area for traffic and public
safety agencies, with speeds from 512 kb to 1.5 mbps. Once
testing complete, plan as of August, 2004 was to expand to entire
metro area. (Henderson, a suburb of Las Vegas with a pop. of
250,000, began a wireless project in Oct!05 expected to take 2
years to bring service to all residents.)
Starting in summer, 2004, network connected police cars and fire
trucks to the internet. Covers 5 sq miles
Page 1 of 2
Attachment B
City Vendor
Earthlink or US
InternetMinneapolis, MN
Mountain View, CA
New Orleans
Philadelphia
Portland, OR
Rio Rancho, NM
Sacramento
Google
Earthlink
3 finalists
Ottawa Wireless
MobilePro
5 finalists:
San Francisco Ea[thlink, Google,
HP, MetroFi and
Skytel/MCO.
San Jose
San Mateo Tropos Networks
Santa Clara MetroFi
Spokane Vivato
Sunnyvale MetroFi
WirelessTemecula, CA Facilities, Inc.
Status
As of December, City was deciding between two vendors.
Residents within the 50-sq-mi area would pay $16/month. No cost
to taxpayers.
In November ’05, the City signed a 5-year lease with Google.
Google will build a free WiFi network across the city at no cost to
residents. (City is 12 sq mi, 72,000 residents.) Speed will be 300
kbps. Completion is expected in January or February 2006.
Starting in November ’05, free service offered in central business
district and French quarter. Will provide speeds of 512 kbps till the
state of emergency has passed, then go to 128 kbps. Svc will
remain free for residents and businesses.
$15 - $18 million installation contract, all to be paid by the vendor.
Completion estimated at end of 2006. Speed will be 1 Mbps
upload and download. Low income residents will be charged
$10/month; other residents $20/month.
Finalists are Earthlink, MetroFi and VeriLAN, to provide wireless
acess to city parking meters, emergency svc and outlying govt
offices, and !5’r0vide inexpensive ($20/mo) internet acess to
residents and businesses. Estimated cost is $15-$30 million, to be
paid by vendor. Completion estimated in December 2005.
Service offered as of December, 2004. Residents pay $20/month
for 256k speeds, more for faster speeds. Network extends.103 sq
mi, to all of 63,000 population. Vendor pays to city 3% of gross
revenues exceeding $100,000 per month; increasing to 7% of
revenues over $500,000 per month
City signed contract in November 2005. Vendor will invest $7 - $11 "
million in setup costs and equipment for 2-year buildout to cover
city’s 60 sq mi. Residents will pay $20-$50/mo, depending on
speed. ($20/mo for 1 Mbps upload and 128k download) Cost to
city: $5,000/month to subsidize 2 free hours of public access per
day at 56k upload and download. Vendor will get free access to th(
!city’s fiber-optic network and physical property where transmitting
equipment will be located.
Each vendor’s proposal includes different configuration. Google is
proposing to absorb all costs of building network. Residents will b~
charged a monthly fee.
Plan is to have free wireless access in outdoor areas downtown as
well as inside libraries and community centers by spring of 2006.
City will invest $100,000 up-front plus $60K annually.
Mesh network was implemented in late 2003 for law enforcement.
As of April 2004, internet access offered at $20/month, but will be
free (w/ads) once Sunnyvale gets launched
Downtown is a massive hot spot (100 city blocks)
Free, ad-supported wireless to all 130,000 residents was
announced in December 2005.
Network is to be deployed in Old Town area of the city in the first
quarter of 2006. Also, city workers, fire and police department
vehicles will be connected. Vendor will use Tropos Network
architecture.
Page 2 of 2
Attachment C
CITIES IN CALIFORNIA WITH OPTICAL FIBER NETWORKS
(IN PLACE OR IN PROGRESS)
City
Alameda
Beaumont
Elk Grove
Fontana
Huntington Beach
Lincoln
Loma Linda
Lompoc
Malibu
Murrieta
Ontario
Roseville
Sacramento
(Greater)
Sun City
Population
72,260
21,000
60,000
134,000
190,000
11 300
20,000
42,000
28,000
44,300
158,000
102,200
38,310
Truckee-Donner
NOTES:
13,900
Vendor
Alameda Power
and Telecom
Vendor
Type* !Comments
City Utility
Verizon (FiOS)~ RBOC
SureWest CLEC
Verizon (FiOS)~ RBOC
SureWest CLEC
City of Loma
Linda City
City of Lompoc City
Verizon (FiOS)~ RBOC
Verizon (FiOS)~ RBOC
City of Ontario City
SureWest ILEC
SureWest CLEC
Verizon (FiOS)~ RBOC
Truckee-Donner
PUD City Utility
They’re in business, but it’s hybrid fiber coax.
Now available for majority of customers. Prices range from $35/month for 5
Mbps upload and 2 Mbps dowload to $45/month for 15 Mbps upload/2 Mbps
download to $200/month for 30 Mbps upload/5 Mbps download.
Price: 10 Mbps (symmetrical) for $80/month for just phone and internet to
15180/month depending on exact service package
Granted contract to SAIC of San Diego to do a detailed business plan. As of
April, 2005, undecided.
I Now available for majority of customers. Prices range from $35/month for 5
Mbps upload and 2 Mbps download to $45/month for 15 Mbps upload/2
Mbps download to $200/month for 30 Mbps upload/5 Mbps download.
3,000 residences were expected to receive service by end of 2004; rest in
2005. Price: 10 Mbps (symmetrical) for $80/month for just phone and
internet to $180/month depending on exact service package
City passed ordinance requiring builders to install broadband cabling in all
new homes’. City originally planned to provide retail services, and is now an
ISP, but planning to move to a wholesale model. Plan is to pay-as-they-go.
Residents/customers will pay for the connection to their houses, with option
to borrow the funds and repay over 30 years. Price points are: 5 Mbps
(symmetrical) for $30/month; 10 Mbps for $50/month; 15 Mbps for
$100/month.
Council approved broadband plan in January 2004, which was to deploy Wi-
Fi in the commercial district, with a three-year citywide rollout of FTTH.
Wireless service is now available for $20/month. This cost the City $1.5
million, funded by loan from city’s enterprise reserves. FTTH rollout
!expected to cost $26 million, funding to be determined.
Now available for majority of customers. Prices range from $35/month for 5
Mbps upload/2 Mbps download to $45/month for 15 Mbps upload/2 Mbps
download to $200/month for 30 Mbps upload/5 Mbps download
Now available for majority of customers. Prices range from $35/month for 5
Mbps upload/2 Mbps download to $45/month for 15 Mbps upload/2 Mbps
download to $200/month for 30 Mbps upload/5 Mbps download
IA common fiber optic, advanced telecommunications network is being
:developed as part of the basic infrastructure to provide approximately
31,000 homes and several thousand businesses with state-of-the-art video,
digital telephone and high-speed data capabilities in newly annexed land
called "New Model Colony." (New construction only)
Price: 10 Mbps (symmetrical) for $80/month for just phone and internet to
$180/month depending on exact service package
Price: 10 Mbps (symmetrical) for $80/month for just phone and internet to
$180/month depending on exact service package
Now available for majority of customers. Prices range from $35/month for 5
Mbps upload/2 Mbps download to $45/month for 15 Mbps upload/2 Mbps
download to $200/month for 30 Mbps upload/5 Mbps download
Project would cost $24 million, to be funded by COPs. Approved by LAFCo
and PUD Board of Directors in late 2004, but held up by lawsuit by
incumbent cable provider until Decembe’r, 2005. Judge’s ruling was solidly
in PUD’s favor. They need to now move ahead, assuming no appeal by
Cebridge.
1 Source: F~i-H Council: US Optical Fiber Communities, May 10, 2005 23 individual developments also have fiber optic networks, in addition to the cities above.
2 According to Fiber-to-the-Home Council, 200 communilies in 37 states, have or soon will have, successfully deployed
fiber networks, and only 40 cities actually offer these services directly to residents (as opposed to through a third party).
3.Verizon’s FiOS service is currently being offered in the cities indicated above. In addition, Verizon is deploying fiber in Adelanto, Apple Valley, Bermuda Dunes,
Camarillo, Chino, Deserl Hot Springs, Hermosa Bch, lndio, La Quinta, Chino Hills, Ontario, Palm Spgs. Perris, Lake EIsinore, Temecula, Redondo Bch, & Victorville
4. Comparative Speeds:"Vendor Type Key:
Dial-up * 56 kbps RBOC = Regional Bell Operating Company
DSL - 1,5 Mbps ILEC = Incumbent Local Exchange Carrier
Cable - 3 Mbps CLEC = Competitive Local Exchange Carrier