Presented to the Telephone Advisory Committee at the 1/26/96 Meeting
Assumptions for the Estimates
- The expenses listed in the spreadsheets are estimates and should be used
only for the relative comparison between options. Actual expenses are expected
to vary from these estimates as a result of competitive procurement of the
replacement telephone system.
- All prices for switching systems or services are today's costs. These
costs could vary considerably if the procurement occurs several years in the
future.
- The replacement of the existing GTD4600 would occur in the third quarter of
1997, after the capital costs for equipment associated with the current
telephone system are fully amortized.
- The costs for the Monolithic Telephone System were provided in writing by
(company name deleted). The acquisition cost of the system was amortized over
10 years. The annual maintenance cost was estimated at 80% of the Distributed
System cost because (company name deleted) did not provide a maintenance quote.
- The costs for the Distributed Telephone System were provided verbally by
(company name deleted), including a specific quote for annual maintenance. The
acquisition cost of the system was amortized over 10 years.
- Both the replacement PBX systems were sized at 5,600 lines in order to
provide initial growth capacity for 3 years.
- The costs for Centrex were provided in writing by GTE, and are based upon a
minimum quantity of 100 lines for three (3) years.
- Because the PBX price quotations did not separately list the cost of labor
and materials, the sales tax has been estimated as applicable to 70% of the
installed purchase price.
- The cost of a new switch room (for the Monolithic System) was estimated at
$1,500,000 and financed for 10 years at 7.75% APR. Both the principal and
interest loan repayment costs are the average annual expense over the 10 year
life of the loan.
- The cost of remote switch room preparation and outside plant cable
rearrangements (for the Distributed System) was estimated at $1,500,000 and
financed for 10 years at 7.75% APR. Both the principal and interest loan
repayment costs are the average annual expense over the 10 year life of the
loan.
- For the Distributed System, 2.0 FTE switch room personnel were estimated
because of the requirement to perform work at 10 remote sites instead of one
main site.
- For the Centrex system, 0.5 FTE was retained because of the continuing
requirement to extend new GTE service into the campus, and to perform moves and
changes on existing telephone lines.
Cost Estimates
GTD-4600 Monolithic Distributed GTE
(current) System System Centrex
Estimated purchase cost of
replacement telephone system $0 $2,588,816 $2,937,221 $0
Estimated one-time charges
for installation $0 $1,500,000 $1,500,000 $144,385
Annual Expenses
Personnel salaries & benefits $44,605 $44,605 $89,209 $22,302
Average annual principal for
switch purchase loan $722,099 $258,882 $293,722 $0
GTE Basic Services
(PBX trunks & DID numbers) $213,480 $213,480 $213,480 $1,169,974
Vendor Maintenance $321,702 $403,737 $457,898 $187,094
Average annual interest for
switch purchase loan $85,955 $122,589 $139,087 $0
Annual finance charges for
one-time charges $0 $221,030 $221,030 $55,774
Total Annual Expenses $1,387,841 $1,264,323 $1,414,427 $1,435,144
Average monthly total expense $115,653 $105,360 $117,869 $119,595
Average number of phone lines
installed in 1995/96 4,402 4,402 4,402 4,402
Average expense/line/month $26.27 $23.93 $26.78 $27.17
Estimated change from
current system $0.00 ($2.34) $0.50 $0.90
Percent change from
current system 0.00% -8.90% 1.92% 3.41%
PTV
