STAFF REPORT
Meeting Date:
April 28, 2026
CONSENT
11 SUBJECT: AGREEMENTS WITH PACKET FUSION (AUTHORIZED ZOOM PHONE
RESELLER/PARTNER) FOR VOIP TELEPHONE SYSTEM REPLACEMENT RECOMMENDATION: It is recommended that the City Council:
1. Authorize the City Manager to execute a five-year agreement with Packet Fusion for the purchase, implementation, and support of a cloud-based Voice over Internet Protocol (VoIP) telephone system using Zoom Phone services through Packet Fusion as an authorized reseller/implementation partner, to replace the City’s existing telephone system, in an amount not to exceed $419,128.67;
2. Authorize the City Manager to approve change orders and additional expenditures in an amount not to exceed $55,000.00 during the initial five-year term for potential increases in service needs and unforeseen conditions identified during implementation, subject to available budget authority; and
3. Find that the action does not constitute a project under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378(b)(4) and Section 15378(b)(5).
SUMMARY OF THE MATTER
The City’s on-premises Mitel telephone system has exceeded its useful life, resulting in limited vendor support, and rising risk of telecommunication failure. These conditions increase the likelihood of a future issue becoming a high-impact service disruption affecting resident-facing phone access and internal coordination, while providing fewer options for timely vendor support. Within the past year there have been approximately one after hour failure per month and multiple during operating hours. While relatively low today, these failure rates are increasing.
Staff recommends migrating from the existing on-premises environment to Zoom Phone, a cloud-based Voice over Internet Protocol (VoIP)/Unified Communications as a Service (UCaaS) solution, implemented and supported through Packet Fusion as the City’s contracted vendor and authorized Zoom reseller/implementation partner.
Staff evaluated the following alternatives: (1) maintain the current on-premises system, (2) upgrade/replace with another on-premises phone system, or (3) migrate to a cloud UCaaS solution. Maintaining the current system is not recommended due to end-of-life conditions and increasing operational risk. Replacing with another on-premises system would reduce some short-term risk, but medium and long-term is a dated telephonic solution. A cloud solution is recommended because it modernizes City communications, reduces operational risk, and supports business continuity.
DISCUSSION
The City’s existing on-premises telephone system was originally scheduled for replacement in FY 2023– 24; however, the project was deferred for cost savings. Since then, the system has reached end-of-life status.
AGREEMENT WITH PACKET FUSION (AUTHORIZED ZOOM PHONE RESELLER/
PARTNER) FOR VOIP TELEPHONE SYSTEM REPLACEMENT
April 28, 2026
To address these risks, staff reviewed modern VoIP solutions capable of supporting day-to-day City operations, coordination with public safety partners, remote and hybrid work, and business continuity needs.
Options were evaluated based on total cost and the City’s operational requirements, including scalability, maintainability, and reduced reliance on end-of-life on-premises infrastructure.
Staff recommends proceeding with Packet Fusion to deliver a secure, cloud-based VoIP solution built on Zoom Phone. Under the proposed approach, Packet Fusion will serve as the City’s contracting vendor and implementation/support partner, with Zoom Phone as the underlying platform. This structure provides a modern, scalable communications system while maintaining a single point of coordination for implementation and ongoing service management.
Packet Fusion was selected to provide a complete, turnkey solution as the City's primary implementation partner. While the City is utilizing cooperative purchasing for this procurement, the City previously conducted a competitive bid process for similar services more than one year ago and determined that Packet Fusion's proposal was competitive with the other responses received. For the current procurement, however, the cooperative purchasing method provides better overall value to the City by offering more favorable pricing and contract terms.
Due to the range of products and services required for the project, the City is utilizing three separate competitively procured cooperative agreements to secure the best available pricing and contract structure for each component of the project. This approach enables the City to consolidate the necessary products and services under one provider while continuing to leverage contracts that were competitively awarded. In addition, Packet Fusion will also enter into the City's standard Professional Services Agreement for implementation and ongoing support services.
Highlighted Benefits
The proposed agreement with Zoom provides both immediate cost savings and long-term operational and financial benefits to the City.
First-Year Savings
As part of the agreement, the Zoom annual license fee will be waived during the first year, resulting a savings of approximately $71,000. Although one-time implementation costs, which outline are below, are necessary.
The Zoom conference license agreement will be consolidated into the Zoom annual license fee. The City currently spends approximately $45,000 annually on Zoom conferencing services. Under the proposed agreement, these services will be included within the broader Zoom platform, eliminating the need for a separate subscription. This is particularly beneficial as the City prepares to resume remote participation for City Council meetings in FY 2027, allowing the City to meet this requirement without additional cost.
FINANCIAL ANALYSIS
The total first-year cost is approximately $129,849, which includes one-time expenses for telephone hardware ($47,416), network gateway equipment ($24,609), implementation and migration services
AGREEMENT WITH PACKET FUSION (AUTHORIZED ZOOM PHONE RESELLER/
PARTNER) FOR VOIP TELEPHONE SYSTEM REPLACEMENT
April 28, 2026
($39,374), and onsite end-user training ($6,765), as well as the first year of recurring charges for cloud support ($3,500) and telephone backup lines ($8,200). These costs will be paid from the adopted FY 2025– 26 budget within the Information Technology Division. No additional appropriation is necessary.
Table 1. First Year Cost Structure
Cost Component Amount Cost Type Notes
Telephone Hardware $47,416 One Time Physical handsets and related equipment Network Gateway Equipment $24,609 One Time Required for system integration Implementation and Migration $39,374 One Time Setup, configuration, and transition Onsite End User Training $6,765 One Time Staff training for system use Cloud Support $3,500 Recurring Annual system support
Backup Telephone Lines $8,200 Recurring Redundancy and reliability Total First Year Cost $129,849 — Includes both one time and recurring costs
Pursuant to the competitive buyout offer negotiated with Packet Fusion, Zoom subscription fees will be waived during the first year of the agreement. Annual recurring costs are estimated at $82,700, consisting of the Zoom subscription ($71,000), telephone backup lines ($8,200), and cloud support and maintenance ($3,500). These ongoing costs will be budgeted and paid through each respective fiscal year over the remaining term of the agreement.
Table 2. Annual Cost Comparison Table
Cost Component Current
Annual Cost
New Annual
Cost Change Notes
Zoom Conferencing
Services $45,000 $0 ($45,000) Included in Zoom platform Annual License Fee $0 $71,000 +$71,000 Ongoing Zoom/VoIP platform cost
Cox Communication $36,000 $0 ($36,000) Eliminated; unlimited domestic calling included
Mitel System
Maintenance $20,000 $3,500 ($16,500) Reduced support costs Backup Telephone
Lines $0 $8,200 +$8,200 New redundancy cost
Total Annual Cost $101,000 $82,700 ($18,300) Net annual savings Additional expenditures not to exceed $55,000 in total over the five-year term are requested to address unforeseen implementation costs and potential increases in service needs as the City’s use of the system evolves over time. Examples of unforeseen implementation costs may include network upgrades needed to support the new system and telephone number porting fees associated with transitioning existing lines and services, though actual needs may vary.
AGREEMENT WITH PACKET FUSION (AUTHORIZED ZOOM PHONE RESELLER/
PARTNER) FOR VOIP TELEPHONE SYSTEM REPLACEMENT
April 28, 2026
ENVIRONMENTAL ANALYSIS
This action is not subject to CEQA pursuant to CEQA Guidelines Section 15378(b)(4) and (b)(5). The agreement constitutes funding and administrative activity that will not result in a direct or reasonably foreseeable indirect physical change to the environment.
ATTACHMENTS
1. Packet Fusion Cooperative Agreement Contract (Pgs. 5-81) Submitted By:
. Approved: Gavin Curran, for.
Jeremy Frimond, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Mandy Low, Project Manager Jerry Soto, IT Manager