ITEM 4.9
CITY MANAGER' S REPORT
MAY 16, 2022 CITY COUNCIL SPECIAL MEETING
ITEM: APPROVE EXPANSION OF DATA BACKUP SYSTEM
AND SOFTWARE LICENSES
RECOMMENDATION: Adopt a Resolution Approving a Lease Purchase Agreement with Hewlett Packard Financial Services
for an Additional Data Backup Appliance for City Hall
and Lathrop Police Building Provided by Solid
Networks, Inc.
SUMMARY:
The City has been utilizing a disaster recovery site to minimize downtime for redundancy purposes in the event that City Hall is not available due to a security breach or system failure. A disaster recovery site is an essential business process for proper operations in today' s information systems climate. The City relies on a functioning network of backup systems to prevent the loss of the City' s critical data during disaster recovery. Data backup systems are used to create a copy of data that can be recovered during a catastrophic event. These services are crucial for protecting the City' s business continuity.
As the City continues to grow, more data is being produced. The current data backup system is near its maximum storage capacity. It is necessary for the City to acquire additional data backup hardware to prevent the loss of crucial data. The proposed data backup appliance meets the City' s system requirements and functionality required in a data backup solution. Staff requested quotes from authorized vendors for an additional backup appliance for the City' s disaster recovery site. The City received the following three ( 3) proposals:
Vendor
w
uote
w....,.., x... ,. T. w.,. m ......, ,,,,, v., . ,...,.... , '..... ........, vv. 1 Solid Networks, Inc. 138 869
2 ePlus Technology, Inc. 143, 451
3 ' General Datatech, L. P. 156, 265 '
Solid Networks presented the lowest cost proposals for $ 138, 869 including sales tax.
The cost provides the necessary hardware and software licenses to expand the current data backup system. In order to purchase from Solid Networks, Inc., the City would enter into a lease purchase agreement with Hewlett Packard Financial Services Attachment B"). The lease would allow the City to pay monthly installments at 0% interest rate, instead of paying the full cost upfront. The sales tax would be paid upfront as a one- time payment. The monthly lease payment would be $ 3, 547. 08 for 36 months and at the end of the term, the City will purchase the equipment for $ 1.
Tonight, staff is requesting Council adopt a resolution approving a lease purchase agreement with Hewlett Packard Financial Services for Solid Networks, Inc. to provide the necessary hardware and software licenses to expand the City' s current data backup system.
CITY MANAGER' S REPORT PAGE 3
MAY 16, 2022 CITY COUNCIL SPECIAL MEETING
LEASE PURCHASE AGREEMENT WITH HEWLETT PACKARD FINANCIAL
SERVICES
APPROVALS:
L I 4 - - o --
To ernandes Date
irector of Information Systems
a -
Cari Ja es Date
Director o f Fi ance
4 21 1,t 2Z
Salvador Navarrete Date
City Attorney
yc.? q•?L
Ste en Salvatore Date
City Manager
RESOLUTION NO. 22-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROP
APPROVING A LEASE PURCHASE AGREEMENT WITH HEWLETT PACKARD
FINANCIAL SERVICES FOR AN ADDITIONAL DATA BACKUP APPLIANCE FOR
CITY HALL AND LATHROP POLICE BUILDING PROVIDED BY SOLID NETWORKS, INC.
WHEREAS, the City has been a utilizing disaster recovery site to minimize downtime for redundancy purposes in the event that City Hall is not available due to security breaches or system failure; and
WHEREAS, disaster recovery sites are an essential business process for the proper operations in today' s information systems climate; and WHEREAS, the City relies on a functioning network of backup systems to prevent the loss of the City' s critical data during disaster recovery; and WHEREAS, the current data backup system is near its maximum storage capacity; and
WHEREAS, the lowest cost proposal was provided by Solid Networks, Inc for a sum of $ 138, 869 for all the necessary hardware and software licenses to expand the storage capacity of the current data backup system ; and WHEREAS, in order to purchase from Solid Network, Inc., the City would enter into a lease purchase agreement with Hewlett Packard Financial Services to allow the City to pay monthly installments at 0% interest rate, instead of paying the full cost upfront. The sales tax would be paid upfront as a one- time payment.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lathrop does hereby authorized the City Manager to execute all necessary documents and lease purchase agreement with Hewlett Packard Financial Services for an additional data backup appliance for City Hall and Lathrop Police Building provided by Solid Networks, Inc. at a cost of $3, 547. 08 per month for 36 months at 0% interest rate.
Attachment " A"
The foregoing resolution was passed and adopted this 16th day of May, 2022, by the following vote of the City Council, to wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
Sonny Dhaliwal, Mayor
ATTEST: APPROVED AS TO FORM:
Teresa Vargas, City Clerk Salvador Navarrete, City Attorney Page2of2
Attachment ° A"
ATTACHMENT .._._
HP integrated Financial Services
Financial Services Proposal
Prepared for: City of Lathrop, CA.
Submitted: March 29, 2022
Create financial vitality. Any tech. Anytime. Anywhere.
Do more with your budget. Accelerate your migration. With technology changing every day, leasing provides you with the flexibility you need to meet your ongoing business needs, as well as being a cost effective way to use operating capital and preserve bank credit lines. The following payment alternatives are available from HP Financial Services.
Tax Exempt Installment Sale ($1 Buyout)
In a Tax- exempt Installment Sale structure, payments consist of both principal and interest, with the interest being excludable from the Lessor' s gross income for Federal income tax purposes.
During the term of the Lease the Concluding Payment— primarily consisting of unpaid principal would decline as each Lease Payment was made and applied. Under this structure Title typically passes to the Lessee at the Lease Acceptance and the Lessor would file a security interest in the equipment. Once the original base Lease Payments are made the Lessee owns the equipment free and clear.
Product cost 127, 695. 00
Purchase Option TEIS
Lease Term 36 months
Payments: 3, 547. 08— monthly arrears payments
Rate: 0%
With approved credit. Pricing is valid only if product is delivered and accepted by May 27, 2022. TEIS pricing is only valid for 100% public accounts only.
We appreciate the opportunity to provide you with this proposal. Please call me if you have any questions, or if I can be of further help.
Sincerely,
Ezra Shepard
HPE Financial Services
Public Sector Sales
Desk: 970-898-4052
Cel I: 505- 235- 4772
Fax: 866- 251- 2418
ezra. shepard( a hpe. com
Attachment " B"
Confidentiality: This letter is delivered to you with the understanding that neither this letter nor its substance shall be disclosed by Lessee to any third party.
Basis of Proposal: This letter is a proposal for discussion purposes only and does not represent either an offer or a commitment of any kind on the part of HPEFS. It does not purport to be inclusive of all terms and conditions that will apply to a leasing transaction between us. Neither party to the proposed transaction shall be under any legal obligation whatsoever until, among other things, HPEFS has obtained all required internal approvals( including credit approvals) and both parties have agreed upon all essential terms of the proposed transaction and executed mutually acceptable definitive written documentation. This proposai can be modified or withdrawn by HPEFS at any time.
Either party may terminate discussions and negotiations regarding a possible transaction at any time, without cause and without any liability whatsoever.