City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: IT Department
Meeting Date: October 19, 2026
Report #:2608-6679
TITLE
Approve Two Purchase Orders with Packet Fusion, Utilizing One NASPO Cooperative and One CMAS Cooperative Agreement, to Procure Zoom Government Unified Communications Solutions for a Five-Year Term for a Total Not-To-Exceed Amount of $1,206,456; CEQA Status – exempt under section 15061(b)(3).
RECOMMENDATION
Staff recommend that the City Council:
1. Authorize the City Manager or their designee to execute Purchase Order C27198767 for Quote Number 65869455-COPA-ZM with Packet Fusion, utilizing the NASPO Contract Number AR2472 and State of California Participating Addendum 7-17-70-40-051, to procure Zoom for Government Unified Communications Solution for a five-year term (September 1, 2027 through August 31, 2032) with an annual amount of $231,688 and a total not-to-exceed amount of $1,158,441 (Attachment A); and
2. Authorize the City Manager or designee to execute Purchase Order C27198463 for implementation support with Packet Fusion, utilizing State of California Multiple Award Schedule (CMAS) Agreement Number 3-24-04-1026 for a one-year term (November 1, 2026 through October 31, 2027) and a total amount not-to-exceed $48,015 (Attachment B).
BACKGROUND
In June 2012, following a competitive request for proposals that received eight responses, the City Council approved Contract No. C12144216 with VOX Network Solutions for an Avaya Voice over Internet Protocol unified communications system, implementation services, and five years of maintenance and support2. The replacement was necessary because the prior telephone and 1 NASPO Cooperative Agreement: https://static.carahsoft.com/concrete/files/1817/5327/1627/Amendments_1- 5_to_Participating_Addendum.pdf
2 June 6, 2012 City Council Staff Report: https://www.cityofpaloalto.org/files/assets/public/v/1/fromarchive/agendas-minutes-reports/reports/city-manager-reports-cmrs/2012/cmr-2760.pdf voicemail systems were more than 20 years old, degraded, no longer supported by the manufacturer, and had experienced service interruptions.
The Avaya system was fully implemented in October 2013. On June 19, 2023, the City Council approved Contract No. C23187554 with VOX Network Solutions for an upgrade to a supported Avaya release and a three-year support term, using NCPA cooperative agreement5. The upgrade addressed end-of-life hardware, licensing limitations, security, reliability, compatibility, and specialized City integrations.
On April 20, 2026, the City Council approved Amendment No. 1 to Contract No. C23187554, extending the term through June 30, 20276. This extension maintained service continuity while staff evaluated long-term modernization alternatives and addressed additional licensing and support needs.
ANALYSIS
The Information Technology Department (ITD) used a two-step decision process resulting in the selection of Zoom for Government platform via Packet Fusion to replace the telephone system.
First, staff evaluated whether to further upgrade and retain the City’s on-premises Avaya system or transition to a cloud-based Unified Communications as a Service (UCaaS) platform.
After determining that a cloud-based replacement was the preferred long-term approach, staff evaluated available products and implementation providers.
With the assistance of Communication Strategies, a professional services provider known for its telecommunications expertise and familiarity with the City’s existing environment, an independent assessment of the City’s current voice infrastructure, stakeholder needs, technical readiness, alternatives, and long-term cost considerations was completed. The City’s onpremises Avaya Communications Manager system is aging, increasingly difficult to support, and no longer the preferred long-term platform for the City’s operational needs. The City is currently using Avaya version 10.1, which reached manufacturer end of support in early 2026.
Retaining the platform would require an estimated $130,000 upgrade to version 10.2, continued investment in on-premises hardware, and continued exposure to hardware procurement, patching, scalability, and service-continuity risks while minimal to no change adapting to the modern work business needs.
Alternatively, the City’s network is well-positioned to transition to and support cloud voice services. A cloud-based UCaaS platform would reduce reliance on City-owned voice infrastructure, provide improved resiliency and disaster-recovery capabilities, support employees working in field, remote, and hybrid settings, and provide modern call-center capabilities.
5 June 19, 2023 City Council Staff Report:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82463&dbid=0&repo=PaloAlto&cr=1 6 April 20, 2026 City Council Staff Report:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87753&dbid=0&repo=PaloAlto Therefore, staff recommend Zoom for Government (as the product) and Packet Fusion (as the integration service provider), both of which leverage cooperative purchasing agreements to transition phone services to a UCaaS platform. This selection process involved engaging with other Bay Area and California cities with similar size and needs, as well as viewing demonstrations and reviewing pricing for the top product candidates.
The proposed Zoom for Government platform will replace the City’s aging Avaya telephone system with a cloud-based communications service for City employees and shared facilities. The service will provide core telephone and voicemail functions through City desk phones, computers, and authorized mobile devices, reducing reliance on City-owned voice infrastructure and the associated maintenance requirements. The platform will support the City’s emergency-calling configuration and location-management requirements.
New functionality from Zoom for Government will better support remote, field, and hybrid work - employees will be able to use their City phone number through a softphone or authorized mobile device and will have access to features such as visual voicemail and transcription. Platform integrations improve with the City’s Microsoft environment and provides improved call-queue and contact center capabilities for departments that manage high volumes of public calls.
Staff evaluated Zoom for Government and RingCentral as the primary cloud-based alternatives.
Both platforms met the City’s core requirements for telephone service, mobility, call queues, and contact center functionality. Zoom for Government was selected because it offers the best overall value based on functional fit, Microsoft integration, implementation approach, cooperative-contract pricing, and a five-year total cost of ownership approximately $73,965 (6%) lower than RingCentral.
Features involving call recordings, transcripts, text messages, or AI-generated summaries will be configured and governed before deployment in accordance with City security, privacy, recordsretention, and applicable notice requirements.
Packet Fusion is recommended as the Zoom implementation integrator based on its demonstrated expertise with Zoom’s communications platform, experience supporting publicsector organizations, and ability to provide end-to-end implementation support. Their services can help reduce project risk by addressing solution design, number porting, configuration, testing, training, and post-go-live stabilization through a coordinated delivery approach.
Selecting Packet Fusion provides the City with a qualified partner to support a smooth transition from the existing phone environment while maintaining continuity for City operations and customer-facing services.
Procurement via Cooperative Purchasing Agreement
The City will purchase licensing through NASPO Master Contract No. AR2472 and State of California Participating Addendum No. 7-17-70-40-05. This cooperative purchasing agreement provides competitively established terms and pricing. Staff negotiated pricing below the contract’s listed rates, with no annual price increase over the five-year term and secured ten months of service at no cost. Packet Fusion will provide Zoom licenses at no charge from November 1, 2026, through August 31, 2027, to support configuration, testing, training, and phased migration. The paid subscription term begins September 1, 2027.
FISCAL/RESOURCE IMPACT
The implementation costs with Packet Fusion will occur in FY 2027, and the annual $232,000 subscription costs will begin in FY 2028, after implementation. Funding for the subscription cost will be included in the annual budget development process, subject to City Council approval.
Funding for Zoom for Government UCaaS solution is expected to be offset through discontinuation of the City’s current annual costs of $329,000 to $389,999 for legacy telecommunications, Avaya, VOX, and third-party E911 costs. These figures are subject to final AT&T usage and service-transition requirements.
ITD is supported through an internal service fund model. Approximately 49% of ITD’s costs are funded by the General Fund, with the remaining 51% supported by enterprise and other funds.
STAKEHOLDER ENGAGEMENT
Staff conducted a citywide user survey in January 2026 and interviewed leaders of the City’s three primary call-center operations: Planning and Development Services, Utilities Customer Service, and Information Technology. Stakeholders identified reliable call routing, mobile access, continuity during remote operations, customer-service call handling, and ease of use as key requirements. These findings informed the functional requirements and implementation priorities for the proposed solution.
ENVIRONMENTAL REVIEW
The approval of this contract is exempt from review under the California Environmental Quality Act (CEQA) under CEQA Guidelines section 15061(b)(3).
ATTACHMENTS
Attachment A: Packet Fusion Quote number 65869455-COPA-ZM Attachment B: Packet Fusion Implementation Support Proposal APPROVED BY: Darren Numoto, Chief Information Officer; Lisa Bolger, Assistant Director Information Technology/CTO