City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: January 16, 2024
FROM: Carmen Gil, City Manager
THROUGH: Carmen Gil, City Manager
SUBJECT: Termination of Current Contract with T-Mobile for Mobile Hot Spots
RECOMMENDATION
It is recommended that the City Council terminate the current contract with T-Mobile after supporting the Hot Spot Program for 3.5 years, saving the City $140,000.
BACKGROUND
The City’s Broadband Infrastructure Strategy was initially approved by the City Council in May of 2017.
At its core, the initiative’s purpose was to provide basic and reliable internet to every household in Gonzales. Through this strategy, the city was able to develop a partnership with T-Mobile where through their T-Mobile for Education initiative they were able to work with the city to guarantee a subsidized rate for Wi-Fi internet services which allowed the City to secure 2,000 Hot Spots so that every household that wanted one could have access to one. This program was monumental during the COVID-19 pandemic as it provided equitable access to every household in Gonzales.
The Hot Spots have not been the only strategy to ensure the community has broadband connectivity. In 2022, the City became a partner in the Joint Powers Agreement (“JPA”) for the South Salinas Valley Broadband Authority which aims to construct and operate open-access broadband networks within the boundaries of the Authority. This effort allows the City to work in collaboration with the other parties involved to work on constructing the infrastructure needed to bring high-speed internet to the community.
The Hot Spots program was a great way to provide access to the community, especially during the unforeseen events of the pandemic, however due to the budget impact we are currently experiencing staff is recommending that the City put a pause on the Wi-Fi Hot Spot program given all the other priorities we are being faced with which include increasing health care costs, capital projects and unforeseen expenses like the replacement of the pool heater.
AGENDA
ITEM
16 The Gonzales Unified School District has indicated they are interested in taking on aspects of the program to continue to support their students with connectivity and have the funding to do so in the next fiscal year.
REVIEW & ANALYSIS
Duties and Commitments
In order to terminate the contract, the City will have to pay the termination fee of $40,000, which will be charged in installments on a monthly basis through June, but the early termination will save us a total of $140,000.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small town charm.
Explain: The early termination of this contract will help us recover some of the funding that would be allocated to the program. This is critical at this time given we have some unforeseen expenses that are arising, and we have a tight budget to work with.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes _____No _____ NA
Explain: This decision helps the City continue to be fiscally responsible.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes No X N/A
• Housing Yes No X N/A
• Recreation Yes No X N/A
• Environment Yes No X N/A
• Education X Yes No N/A
Explain: Please see explanation above for the Vision.
ALTERNATIVES
If the Council decides not to terminate the current contract with T-Mobile we will be liable to pay the full amount of the contract which is an additional $140,000.
BUDGET IMPACT
The early termination of the contract would save us $140,000.
CONCLUSION
It is recommended that the City Council terminate the current contract with T-Mobile after supporting the Hot Spot program for 3.5 years, saving the City $140,000.