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CASSELBERRY CITY COMMISSION Minutes of August 24, 2009 - Regular Meeting Page 5 of 15 SYSTEMS, INC. FOR THE REPLACEMENT OF THE CITY'S CORE NETWORK INFRASTRUCTURE EQUIPMENT AND ASSOCIATED SUPPORT; PROVIDING FOR CONFLICTS, SEVERABILITY, AND EFFECTIVE DATE." Introduction: Resolution 09-2068 provides for a lease purchase agreement with Brocade Communications Systems, Inc. for the replacement of the City's core network infrastructure equipment and associated support agreement. Budget Impact: this project was not previously budgeted in the FY 2009 Budget or in the FY 2010 Budget. The City will budget and recognize revenue in the General Fund for the capital lease (debt) proceeds in the amount of$183,026 (001-0000-383.01-00). The purchase of the capital assets will be budgeted for $135,546 in the account for Network Equipment (001-0151-513 .67 -03). The purchase ofthe extended service contract for $47,480 will be recorded as an asset that will be amortized over five years to Repair and Maintenance. It will not have a budget impact in FY 2009 but will be recognized in Fiscal Years 2010 - 2014 at a rate of $9,496 per year. For FY 2010, the amortization of the service contract will be budgeted and recognized as Repairs and Maintenance (001-0151-513.46-00). The annual (debt service) payment on the five year capital lease will be budgeted as Rentals and Leases - Capital Leases (001-0151-513.44-01) in an amount estimated to be $39,375.91. Within the FY 2010 budget, these combined costs will total $48,868. They will substitute for two budget line items in the proposed budget for FY 2010 for capital outlay described as Network Switches on page 42 that total $50,000. The revision to the FY 2010 budget will result in a net reduction of $1,132. BA # 09-044: Explanation of Request: To authorize the capital purchase of replacement network equipment to recognize capital lease proceeds utilized to make the purchase as well as finance an extended service agreement. The excess debt proceeds will be used to purchase an extended five year service agreement that will be recorded as an intangible asset. Account Number Account Description Amount INCREASE: 001-0151-513.67-03 Network Service Equipment $135,546 INCREASE: 001-0000-383.01-00 Debt Proceeds $183,026 001-0000-389.90-00 Other Non-Operating Sources $<47,480> Recommendation: The City Manager, the Administrative Services Director and the Information Systems Manager recommended approval of Resolution 09-2068 and related Budget Amendment 09-044.