AgdaPkt 2003-06-09 - Laserfiche WebLink

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&')6-1 REPORT To the Honorable Mayor and City Council From the City Manager June 9, 2003 Subject Revocable License Agreement for Payphones Recommendation Approve and authorize the City Manager to sign the attached revocable license agreement with NSC Communication for the installation and operation of twelve (12) payphones located on City property. Background NSC Communication has owned and operated the twelve payphones located in the City facilities for the past six (6) years. The payphones are becoming obsolete mainly because of the increased use of inexpensive cell phone plans. The gross revenue from the payphones has dropped drastically over the past three (3) years forcing NSC to revise their commission schedule. The City receives approximately $180 monthly from the current commission schedule. Under the agreed upon commission schedule this will decline to $30 per month. The primary and perhaps the only reason the City is recommending retaining payphone services is for the public convenience. The payphone provider, NSC Communications, is claiming that under the current commission schedule NSC is losing money on five (5) payphones. Under the proposed NSC commission schedule, five (5) of the City payphones would cost the City $50 monthly per payphone thus eroding any revenue generated by the remaining seven (7) payphones. Information Technology has conducted an informal survey of the departments using the payphones to determine if the payphones can be removed. Many of the departments felt the payphones were necessary to their operation and if the phones were removed their internal phone cost would increase. The Information Technology negotiated a revised commission schedule which maintains the existing number of payphones with a decrease in the commission schedule. NSC Communication has accepted the revised commission schedule. Alternative Change payphone provider. The initial cost of removing and installing new payphone equipment and services is approximately $5,000 for the twelve (12) payphones. This is very expensive given the amount of revenue ($360 per year) that these payphones generate. Fiscal Impact The agreed upon commission schedule will reduce the monthly estimated commissions from $180 to $30. The City will maintain the current level of payphone services for our residents.