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FC CASE # <br /> <br />AUTHORIZE ENTERING INTO A CONTRACT WITH McLEOD USA <br />FOR PHONE SERVICES <br /> By: Diana Lund, Finance Officer <br /> <br />Background: <br /> <br />Two phone companies have approached the City about entering into a five-year contract with <br />their organization. One is US West Centrex and the other is McLeod USA. Our current phone <br />carrier is US West. <br /> <br />The contract would be for the period of July 1, 1998 to June 30, 2003. Each is offering an <br />extended contract, as they are able to offer the City better rates. <br /> <br />Attached is a summary showing the cost per year of each plan. Upon comparison, US West <br />Centrex looks like the better plan per dollar savings. It must be taken into consideration that any <br />additional single lines that are added, such as at the warming houses, would be at the higher US <br />West rate. US West Centrex charges a substantial penalty if the City would decide to break their <br />five-year contract and go to another carrier, McLeod USA does not have such a stipulation. With <br />McLeod USA they would let the City out of the contract at any time if we found lower rates, etc. <br />and they could not match them. <br /> <br />Another difference between the carriers is that McLeod USA offers the City a fixed rate. If this <br />rate were to go down, we would receive the lower rate, but if it were to go up, our rate would <br />remain at what we were locked in at. <br /> <br />Long distance charges are offered at a much reduced rate through McLeod USA. The City's <br />current carriers for long distance are AT&T and US West. The City could save as much as .23 <br />cents per minute by switching to McLeod USA. <br /> <br />Committee Action: <br /> <br />Motion to recommend City Council authorize the City Administrator and Finance Officer to <br />enter into a five-year contract with McLeod USA for local and long-distance phone services. <br /> <br />Reviewed By: <br /> <br />City Administrator <br />Finance Officer <br /> <br />FC: 6/23/98 <br /> <br /> <br />