Consideration and Approval of:  1) Contract for Professional Services with JC Cullen, Inc. (Niles Radio Communications); 2) Cooperative Purchase Contract with JC Cullen, Inc.(Niles Radio Communications); 3) Authorize expenditure for a microwave radio network project in an amount not to exceed $650,000; and authorize the Mayor to execute the required documents. (Microwave network design and build to replace current fiber network)

This microwave network will replace the current fiber network in place which is leased from Suddenlink.  Once built, the City will own the microwave network along with the private microwave frequency licensed from the Federal Communication Commission (FCC).

The funding of this project will result in an annual savings of $54,000.00.  This project is budgeted in FY 2016 for $650,000 in account 001-01-014-0044-1-4410.  

COUNCIL GOALS:
3) Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics
 

No
 

 

Option 1:
Fund the microwave network purchase and build.

Option 2:
Renew the fiber lease with Suddenlink for a 5 year term at an increased cost.

In 2007, the City entered into a 10 year contract with NPG Cable for a fiber network. NPG Cable was subsequently purchased by Suddenlink Communications.  The contract with Suddenlink is approaching its termination in early 2017. This microwave network will replace the fiber network currently leased from Suddenlink. There will be a one-time expense for the design and build plus a small increase in the annual rental of space on Niles' Mount Elden radio tower on which the microwave dishes will be mounted. Depending on the final cost, the return on investment is approximately 7.5 years, possibly less.

Once built, the City will own the microwave network along with the privately licensed microwave frequency obtained from the FCC. Niles Radio will maintain the microwave network up to the point where it connects into a City facility, which parallels the maintenance Suddenlink has provided on the leased fiber network.

Microwave technology has been in existence for quite a while and has proven to be a very reliable source for network communication.  We have had a microwave link to the landfill for approximately three years without an issue.  Additionally, the City's Lake Mary Water Treatment Plant and the Wildcat facility are already connected to City Hall via microwave, all via Niles'  radio towers.  The network, once built, can be easily expanded as needed (for example, when the new public works yard and new courthouse are built) and can be a viable city-owned network for the foreseeable future. The design will include redundant rings to allow for failover should a link fail.

The City is not obligated to proceed with purchase of equipment (the primary cost) until final design is completed. A proposed telecommunications tower on McMillan Mesa is a key link for the microwave network.  Final design is contingent upon zoning approval and the height approved (which may be less than the 100' proposed).  If final design is not satisfactory to the City, the project may be halted or new design could be explored. 

The City currently expends $60,000.00 annually to lease fiber to 20 remote City sites and including two separate redundant links into City Hall.  The proposal from Suddenlink to renew the City's contract with them increased that amount to $86,400.00 annually plus a one-time expense of $7,200.00 in equipment replacement costs.  It included a reduction in throughput from the current 100mbs to 20mbs.  If the microwave network build costs the maximum amount of $650,000.00, and that's divided by the $86,400.00 annual cost of the proposed Suddenlink lease, the result is approximately a 7.5 year cost recovery after which the city begins to realize an ongoing savings of $54,000.00 (at the current rate) or $80,400.00 (at the renewal rate) after accounting for the $6,000.00 increase in tower rental fees for the microwave system.

Niles Radio has a cooperative purchase contract with the State of Arizona for microwave equipment and related services.  This is a competitively bid contract with discounted rates on manufacturer's equipment. 

Nlles Radio was selected to provide professional services (microwave design, acquisition of FCC licenses) because of its experience and qualifications, and ownership of connecting link sites.  The contract for professional services describes overall project and budget, and includes Exhibits A, B, and C (attachments below).   City Staff views the project as a cost efficient  "sole source" procurement for the reasons explained in the attached document. 

The Contract for Professional Services includes a conceptual design for the microwave network.  During the first phase, "Phase PZ", Niles Radio wlll be applying for a conditional use permit to replace the current City-owned 62' telecommunications tower on McMillan Mesa with a proposed 100' tower.  This will go through the standard review process and allows public comment. 

Zoning approvals will be required for other network sites, but nominal changes (such as adding a dish to an existing tower) will not involve public comment as part of the approval process.

Option 1: Fund the microwave network purchase and build.

• The advantages are:
  • The use of one-time funds resulting in a viable network connecting the city's remote sites for the foreseeable future and reducing the annual expenditure of on-going funds.
  • Easily expanded to new city sites where there may not be a Suddenlink presence.
• The disadvantage is the one-time cost not to exceed $650,000.00.

Option 2: Renew the fiber lease with Suddenlink for a 5 year term.

• The advantage is that the fiber network is already in place and will require very little change, only the replacement of some older equipment for $7,200.00.
• The disadvantage:
  • The continuing and increasing expenditure of on-going funds to lease the fiber connections from Suddenlink.
  • Potential higher cost of connecting new sites if fiber runs need to be added. or if the installation of fiber is cost prohibitive, a microwave link needs to be installed as was done with the landfill.