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HomeMy WebLinkAboutStaff Report 2310-21299.Approval of a License Agreement with Equinix, LLC for a Three-Year Term in an Amount Not-to-Exceed $536,528, and Authorization of a Contingency Amount Not-To-Exceed $106,900 for Related, Additional but Unforeseen Services Which may Develop During the Project; CEQA Status - Not a Project Public Comment 3 3 2 5 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: IT Department Meeting Date: November 27, 2023 Staff Report:2310-2129 TITLE Approval of a License Agreement with Equinix, LLC for a Three-Year Term in an Amount Not-to- Exceed $536,528, and Authorization of a Contingency Amount Not-To-Exceed $106,900 for Related, Additional but Unforeseen Services Which may Develop During the Project; CEQA Status - Not a Project RECOMMENDATION Staff recommends that Council: 1)Approve and authorize the City Manager or designee to execute the license of a Private Cage agreement, included here as Attachment A, with Equinix, LLC (“Equinix”) for a Term Not-to-Exceed Three Years and a Total Not-to-Exceed Amount of $536,528 for the City of Palo Alto Fiber Optic Utility to lease a fiber optic private cage with kVa power access and termination services at the Palo Alto Internet Exchange (“PAIX”). 2)Authorize the City Manager or designee to approve and execute any amendments to the agreement for additional services that might develop during the license period, the total value of which shall not exceed $106,900. BACKGROUND The City Council provided direction to staff to proceed with Phase 1 of the fiber to the premises (FTTP) expansion project on Dec. 19, 2022, CMR 148001. In Phase 1, FTTP would be built out in selected areas of the city, and expanded gradually. On November 7, 20232, staff presented an update on plans related to advancing a FTTP pilot program and construction alignment with Electric Grid Modernization to the Council’s Finance Committee. Upgrading overhead lines in 90% of Palo Alto neighborhoods through electric grid modernization and piloting the build out of Palo Alto Fiber to the home supports a reliable, sustainable and connected community. 1 City Council, December 19, 2022; SR# 14800, https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82067 2 Finance Committee, November 7, 2023; SR# 2309-2082, https://cityofpaloalto.primegov.com/Portal/viewer?id=0&type=7&uid=5be5ee8c-815c-45be-baec-140d7780fb0c 3 3 2 5 As discussed in the development of an FTTP service, “fiber huts” will be necessary to build out the network and provide connectivity both through the dark fiber backbone through FTTP. Originally constructed by the Digital Equipment Corporation in 1996 as one of the first internet exchange points (IXPs) in the world, the Equinix data center (SV8) is a neutral data center independent of any one Internet Service Provider (ISP) or telecommunications carrier. This center serves as an internet exchange point (IXP) providing the physical infrastructure through which over 70 ISPs and content delivery networks (CDNs) exchange internet traffic between their networks. It was (and still locally) called the “Palo Alto Internet Exchange (PAIX),” and the city has been leasing fiber optic access and termination services at PAIX since the inception of the City’s fiber network. There is a highly competitive Palo Alto commercial fiber optic marketplace served by multiple telecommunication companies and Internet Service Providers (ISPs). Many of these entities control independently owned overhead and/or underground fiber optic systems. These systems are also accessed by third-party ISP-service resellers using leased capacity on the fiber optic networks. ANALYSIS To support FTTP Phase 1 in 2024, a data center is required to provide internet services. Equinix is the best option to serve as the Data Center and one of two Fiber Huts for the Fiber Project. City Hall was a potential option, but PAIX provides a superior alternative due to timing, cost, construction, and future flexibility considerations. A private cage will provide a secure space for the infrastructure required to operate the fiber and ISP for the FTTP, and the Equinix data center (SV8) has a private cage available that meets the requirements to host the data center and fiber hut for the FTTP project. This contract will secure the space from November 2023 through November 2026, at the rate of $14,848 per month. The SV8 data center, as discussed above, is a built facility that multiple companies secure space at for their data center needs. Space comes available as companies depart or move services to alternative options such as the cloud and is only available until another customer secures a contract for use. At this time, the space the city needs to support the FTTP project is available and if the city does not secure this space now, there is no guarantee another space will be available in the future. The impact of not securing this space could further delay the FTTP project in providing internet access to the community and businesses. Benefits of a private cage with racks vs racks in an open or shared space: •Dedicated space to support the infrastructure for FTTP and Backbone •Privacy/Security – Only people that are approved by the city will be allowed access. •Reliability – Reduced likelihood of damage to infrastructure by third parties. •Operational efficiency – Full control of cross connects and cable management between racks. 3 3 2 5 Due to negotiating for the private cage, the per rack cost is approximately $100.00 – $200.00 less a month than the shared cages. This agreement does not have a termination clause for the initial term of 36 months. Staff anticipate needing that time for the build out of the FTTP project, however, should the services no longer be needed during this term, the City would likely be responsible for these costs. FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Account Name : CITY OF PALO ALTO Account Number : 110002 Currency : USD PREPARED BY:PREPARED FOR: Order Number : 1-228942723689 Order Valid Until : 30-Nov-2023 Reza Fazlollahi Darren Numoto Version #: 4 rfazlollahi@equinix.com darren.numoto@cityofpaloalto.co m Agreement #: 00036759.0 Initial Term (Months): 36 (650) 329-2571 Renewal Period (Months): 12 6506173142 Non-renewal notice (Days): 90 IBX: SV8 Address: 529 Bryant Street, Palo Alto, CA, 94301, United States Unit Pricing Total Charges Effective DateProduct Code Product Description Qty UoM NRC MRC NRC MRC SPC00002 Private Cage With kVA Based Power 1 Each --0.00 13,248.00 01-Dec-2023 CAG00001 Cage - 6 Cabinets - 14.4 kVA 14.4 kVA -460.00 -6,624.00 01-Dec-2023 CAG00001 Cage - Installation Fee 1 Each --0.00 -01-Dec-2023 POW00001 1.2 AC Power 14.4 kVA -460.00 -6,624.00 POW00003 AC Circuit - 208v - 30-amp - Single Phase - Primary 3 Each -0.00 -0.00 01-Dec-2023 POW00003 AC Circuit - Installation Fee - 208v - 30-amp - Single Phase - Primary 3 Each 0.00 -0.00 -01-Dec-2023 POW00003 AC Circuit - 208v - 30-amp - Single Phase - Redundant 3 Each -0.00 -0.00 01-Dec-2023 POW00003 AC Circuit - Installation Fee - 208v - 30-amp - Single Phase - Redundant 3 Each 0.00 -0.00 -01-Dec-2023 CC00004 Demarcation Point 1 Each ---0.00 01-Dec-2023 CC00001 Cross Connect 2 Each -- 1,000.00 750.00 01-Dec-2023 CC00001 Cross Connect - Installation Fee - Single-Mode Fiber 2 Each 500.00 -1,000.00 -01-Dec-2023 CC00001 Network Cable Connection - Single-Mode Fiber 2 Each -375.00 -750.00 01-Dec-2023 ECX00001 Equinix Fabric Metro Port 1 Each -350.00 0.00 350.00 01-Dec-2023 ECX00001 Equinix Fabric - Port Installation Fee - 10G 1 Each 0.00 -0.00 -01-Dec-2023 ECX00001 Equinix Fabric Port - 10G 1 Each ---0.00 01-Dec-2023 CC00001 Network Cable Connection 1 Each ---0.00 01-Dec-2023 MC00001 Metro Connect Port - 10G 1 Each ---0.00 01-Dec-2023 IX00008 Equinix Internet Exchange - Port 1 Each -500.00 1,000.00 500.00 01-Dec-2023 IX00008 Equinix Internet Exchange - Port - Installation Fee - 10G 1 Each 1,000.00 -1,000.00 -01-Dec-2023 IX00001 Internet Exchange Port - 10G 1 Each ---0.00 01-Dec-2023 CC00001 Network Cable Connection 1 Each ---0.00 01-Dec-2023 Section Total 2,000.00 14,848.00 Grand Total Monthly recurring charge:$14,848.00 i9"-)1k EQUINIX ORDER Equinix Order Number:1-228942723689(V4)Page 1 of 4 Grand Total Non-recurring charge:$2,000.00 NOTES TO CUSTOMER ªIn a Private Cage, Customer may order power circuits with an aggregate capacity of up to twice the Draw Cap (as defined below), provided Customer does not draw power that exceeds the Draw Cap at any time.º Ramp Schedules 1.2 AC Power Ramp Stage Period (Months)Stage Start Date Ramp % Draw Cap MRC Max Allowed Ramp 1 5 01-Dec-2023 25 1,656.00 3.60 2 31 01-May-2024 100 6,624.00 14.40 Notwithstanding anything to the contrary, in the event Customer's actual power usage exceeds the Max Allowed Ramp kVA or kW amount listed above, before the next Start Date, Equinix will increase the power capacity to the next Max Allowed Ramp kVA or kW and increase the Monthly Recurring Charges accordingly. TERMS AND CONDITIONS 1. INTRODUCTION This Order is governed by and incorporated by reference into the applicable Master Country Agreement or other similar agreement between the Parties (ªAgreementº). Capitalized words used but not defined in this Order shall have the meaning ascribed to them in the Agreement or shall refer to the values listed at the top of this Order. 2. DEFINITIONS `Products' as used in this Order may also be referred to as Licensed Space and/or Services. PRODUCT TERMS Additional terms and conditions applicable to the Products listed above can be found at the following URL: http://www.equinix.com/resources/product-documents and which are incorporated by reference into this Order. 3. REQUESTED DELIVERY DATE & TERM Customer may provide Equinix with a Requested Delivery Date. The Requested Delivery Date is a target date for Equinix to provision the Licensed Space and Services. Equinix will, acting reasonably, i9"-)1k EQUINIX ORDER Equinix Order Number:1-228942723689(V4)Page 2 of 4 consider Customer's Requested Delivery Date when provisioning the Licensed Space and Services. Following signature of this Order, Equinix will inform Customer of the installation schedule by which Equinix anticipates that the Licensed Space and Services will be provisioned provided that Customer must promptly provide to Equinix any additional scope or information which is necessary in order to complete the provisioning of the Licensed Space and/or Services. The Initial Term will commence on the date that Equinix informs Customer that the Licensed Space and/or the Services have been provisioned, without any delays caused by Customer. Should such delays extend beyond thirty (30) days, Equinix reserves the right to commence billing or exercise its rights under the Agreement. After the Initial Term, the term will automatically renew for the Renewal Period unless either Party terminates the Order by providing written Non-renewal notice prior to the end of the then-current term to the other Party in which event this Order will terminate at the end of the then-current term. 4. POWER LIMITATIONS The maximum amount of electrical power that Customer may draw is stated above as Draw Cap or Qty/UoM in kVA or kW ("Draw Cap"). Customer may not draw more power than the Draw Cap. If Customer exceeds the Draw Cap, Equinix will notify Customer and Customer must reduce power draw to be equal to or less than the Draw Cap within 72 hours (or as otherwise agreed) or Equinix may, in its sole discretion, either charge Customer for the power overage at a maximum of twice the MRC/kVA rate for Licensed Space and power Services above, or suspend Customer©s power Services to return to Draw Cap compliance. 5. PRICE & PRICE INCREASE The Fees for all Products ordered hereunder will automatically increase during the Initial Term and any applicable Renewal Term by the ªPrice Increase %º set forth in the table below. Notwithstanding the foregoing, if Equinix's direct electrical supply costs increases by an amount that exceeds the Price Increase %, then Equinix may increase the Fees for power Services by such increased cost on a pass-through basis. The first price increase will commence on the ªFirst Price Increase,º as set forth below, and will automatically increase every twelve (12) months thereafter. Price Increase Terms First Price Increase Applicable After 12 months All Products Price Increase %5% Renewal Price Increase Terms All Products Price Increase %5% i9"-)1k EQUINIX ORDER Equinix Order Number:1-228942723689(V4)Page 3 of 4 CITY OF PALO ALTO Equinix LLC, on behalf of itself and its U.S. Affiliates Signature: Name: Title: Date: Billing Contact Name: Billing Address: PO BOX 10250 PALO ALTO CA United States 75011 Phone Number: Email Address: Equinix Local Entity Address: One Lagoon Drive, 4th Floor Redwood City CA United States 94065 Signature: Name: Alex Para Title: Commercial Finance Senior Director Date: 28-Sep-2023 i9"-)1k EQUINIX ORDER Equinix Order Number:1-228942723689(V4)Page 4 of 4 From:herb To:Council, City; Clerk, City Subject:November 27, 2023 Council Meeting, Item #9: License Agreement With Equinix, LLC Date:Wednesday, November 22, 2023 3:52:41 PM CAUTION: This email originated from outside of the organization. Be cautiousof opening attachments and clicking on links. NOVEMBER 27, 2023 CITY COUNCIL MEETING, AGENDA ITEM #9 LICENSE AGREEMENT WITH EQUINIX, LLC I urge you to remove this item from your agenda because theproposed action is a segment of a project subject to theCalifornia Environmental Quality Act (CEQA), CEQA requires youto evaluate the whole project including this segment as asingle project, and segmenting the project's environmentalanalysis is a violation of CEQA and a prejudicial abuse ofdiscretion. Agenda item #2 at the November 7, 2023 Finance Committeemeeting "Discussion and Update of the Palo Alto Fiber ExpansionPlan and Construction Alignment with Electric GridModernization" under the heading "Pre-construction" estimatedthat CEQA Approval of the whole project would occur in April2024; and under the heading "Fiber Hut Sites" said "City Hallis anticipated to have vacated space after the PoliceDepartment moves to the new Public Safety Building. City Hallwould be an ideal location for a secondary hut. Due to thecentralized location and potential square footage, this sitemay also be considered for a future data center, furthersecuring the future of the City‘s data infrastructure." The November 27, 2023 staff report to the City Council and theNovember 7, 2023 staff report to the Council's FinanceCommittee were approved by two different department heads, butthe Palo Alto Charter provides that it is the City Manager,Assistant City Manager, or City Manager Pro Tem appointed bythe Council who reports to the Council, while the departmentheads report to the City Manager, and that "an office to whichthe manager makes the appointment shall not be combined withone to which the appointment is made by the council." (See PaloAlto Charter, Article III, Section 20, and Article IV, Section9.) If the City Manager had approved the two reports with theadvice of the City Attorney, I believe he would not have placedthis item on your agenda due to it being a segment of a largerCEQA project and violation of CEQA. Herb Borock