COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Information Services Department

DATE:

February 18, 2011

BOARD MEETING DATE:

March 15, 2011

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Chris Flatmoe, CIO/Director of Information Services

SUBJECT:

Amendment No. 2 to the Key Government Finance, Inc. Master Tax Exempt Lease/Purchase Agreement

RECOMMENDATION:

Adopt a Resolution authorizing the President of the Board to execute Amendment No. 2 to the master tax-exempt lease/purchase Agreement with Key Government Finance, Inc. for leasing services, extending the term end date to March 27, 2012.

BACKGROUND:

The Information Services Department (ISD) is responsible for providing all County departments with purchasing recommendations, support and maintenance for a network computing environment that provides 99.8% availability. Network computing equipment has a useful life of three to five years and needs to be replaced within its useful life to ensure vendor support. San Mateo County issued Request for Proposal (RFP) #1165 for network computing equipment leasing services in 2005.The RFP process was used to find a vendor that could best provide a lease/purchase and finance plan in support of the County’s ongoing need for network computing equipment. On March 28, 2006, the Board approved Resolution 067871 which established a master lease/purchase and finance agreement with Key Government Finance, Inc. On March 17, 2009, the Board approved Resolution 069985 extending the end date and adding $1,000,000 to the Agreement. Funding remains available in this contract.

DISCUSSION:

Because the next network refresh project is now linked with the project to converge our voice and data networks, ISD is asking that the contract date be extended for one additional year to support leasing any required network equipment over the next year. The plan moving forward is for ISD to develop a project plan and associated funding strategy to support the convergence of our voice and data networks over time. A new RFP will be conducted and a new contract with a selected vendor will be recommended once this pre work has been completed.

Since network computing equipment purchased through Key Government Finance was acquired over a period of years, that equipment requires replacement on a staggered schedule. The extension of the County’s current master lease/purchase agreement will support the staggered acquisition schedule of network computing equipment to include: network switches, routers, hubs, mass storage devices and uninterruptible power supplies. Additionally, extending the lease/purchase agreement will provide a mechanism for distributing the cost over several fiscal years.

The County’s Purchasing Agent and Key Government Finance will arrange payment to the equipment vendor through the Master Lease Agreement. ISD will manage the lease process, making annual payments from funds established by participating departments.

The Contractor has assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits. The County Manager has approved extending the contract term past three years, Risk Management has reviewed and approved Contractor’s insurance, and County Counsel has reviewed and approved the Resolution and Amendment as to form and content.

Approval of this Amendment contributes to the Shared Vision 2025 outcome of a Collaborative Community by distributing the cost of network computing equipment over multiple fiscal years, eliminating one-time spikes associated with network computing equipment purchases. In addition, County departments are able to leverage the purchasing power of the County when purchasing network computing equipment in volume and/or from the same master agreement.

Performance Measure(s):

Measure

FY 2009-10
Actual

FY 2010-11
Projected

Percent of IT devices and applications meeting availability goals: Network Devices

97%

95%

Percent of time information and technology services available

99.9%

99.8%

FISCAL IMPACT:

The new term of this Agreement is March 28, 2006, to March 27, 2012. The amended total amount financed is not to exceed $5,000,000. Funding remains available in this contract. Funds have been included in the Adopted FY2010-11 Budget. In out years, funds will be included in subsequent budgets and funded through service charges to appropriate departments.