has technology systems. the department of technology represents somewhere between a quarter of 30% of the total investment we have in the city. in parallel to the department of technology to better manage services and the network, we have been leading a parallel effort to look at data centers citywide have. what has happened is many of the larger departments and medium- sized apartments have tried to create their own data centers which creates a redundancy to house and equipment for the air- conditioning units, for the generator units. we're looking to consolidate data centers citywide. we have analyzed all of the city-owned facilities through

the internal process whereby the members had input into this process, we have decided to consolidate where servers are house around the city. one location would be at the airport. we are just kicking off a new space which could be shared by the city. this is about half of the capacity that we need. the other is where we establish additional space to start to relocate to other servers that are currently underutilized or expensive space around the city and moved them to a consolidated space. in this lease is consistent and in line with expectations from long-term savings and how to

consolidate and bring these systems and operations to the locations. but as my final slide. or will welcome any questions. >> thank you. why don't go to the budget analyst and the report there? >> i point out on the report is that the proposed legislation, the department of technology has issued a request for qualifications and that is in the computer store and that is to contain project management services for this specific relocation. incidently, supervisors, as you

know the department has been leasing space at one market losses since 1993. on top of page 6 of our report, we point out that the resulting agreement between the department of technology was not subject to the board of supervisors approval. this agreement was considered to be a service agreement as opposed to a licensed release of the facility. in other words, this is the contractor who placed the department technology from one market plaza to 200 paul street.

it was a service agreement not a lease although it resulted in this license of the facilities at 200 paul street. although the board of supervisors did not specifically approved the agreement, the budget and finance committee was involved in the decision to relocate a city datacenter because on march 18th of 2009, the budget and finance committee approved the release of the reserve to allow the department of serology to purchase new networking equipment which was to be incorporated into the move. you should know that the move has essentially taken place.

the department is in the new facility. due to the nature of relocating the city's equipment, there has been a delay. it was initially anticipated that it would be completed by january 31st but it is now taking another month or through the month of february. on page 10 of our report, under the fiscal impact section, we stated that the department of technology is paying $91,000 to lease the facility. .

if you look at the table on page 11, we state under that table the total monthly cost would increase by $70,380 per month or 7.1%. the total annual increase cost is $844,696. however, a direct comparison of the cost does not reflect the fact that this is a superior data facility to one market

plaza. it has upgraded capacities. the cost of at least close to a million $900,000 would be needed to upgraded into a facility and to continue the datacenter and the department of technology has stated that seismic and power capacity upgrades would be cost prohibitive although no data was provided to us and that connection. as i indicated, the department technology completed the anticipation on january 21st, so you have a situation where they're paying both the $90,000 for one market plaza plus an

additional -- we cannot verify the need for additional capacity. this was going from the wire connections to the 24 wired connections we have been looking at. would point out that the cost differential is not significant. there is only about $1,100 per month. our recommendations are on the bottom of page 12 and on the top of page 13. we say because of this significant increase, 77.1%. the budget analyst considers this to be a matter for the board. we also say this is a policy because of the wired connections

but i would minimize that point and the standpoint of the cross increases which is not significant. due to the high cost increase and the potential for cost reductions over time and the consolidated locations such as the airport, which is a facility that is currently being prepared. we recommend that you amend the proposed legislation to require that the department of technology provides reports every six months on progress made towards consolidation to these facilities and equipment and staff. let me mentione that legislation was presented for the

consolidation of the computer operations. this particular legislation before you is not consolidation this is an increase in rent for the stated purpose that they need this new better facility at 200 paul street and i would be happy to respond to any questions. >> i do have a number of questions. one of the things that was mentioned was that the change was not a very significant change and we talk about the redundancy which would be crated for moving to market plaza. can you explain about the difference that we would truly be getting. there was not any mention about what the seismic capacity would

be. >> to compare the two facilities, the one market plaza facility was built from a structural standpoint which is one of the thing to take into consideration. it was built around 1974. this is in a liquefaction sound -- zone. this is considered a high-risk zone. this is considered a high-risk zone. the 200 paul facility was pressure fitted in 1997. it happened between 1974 and 1977 to make it closer for the

earthquake safety standards. it would not be considered it tier one. this would be a teacher and zero facility. -- this would be a tier zero. there was the rankings to judge the impact to the operations. these are up to as much as 80 hours of downtime in the year

and eighth tier 1 or less facility. in a tier 2 facility, it would be less. tier 2 is only 20 hours a year. we feel like the 200 call facility in terms of risks as a down time due to this facility failures such as generator failures, things like that. we would like to and not expose the city and -- to the risks of down time. >> thank you for the explanation. it sounds like this is one of the components that is not captured and this is really the seismic issue and you have explained that. with regards to a facility,

maybe the comptroller's office can speak to this. another was that was done previously that considered and contemplated whether it was better for the city to go and purchase a building that we could locate in long-term verses potentially renting out a facility like this. can you or the comptroller's office provide a background on that finding and what would be considered when the recommendations were put forward? >> in 2009 there had been when the pardon was coming before the budget and finance committee to get the release of the reserve for the relocation of the datacenter from one market to 200 paul, the initial plan at the time was to rent the site

for an interim time while the city secured and renovated the city-owned site for a data center. there was some concerns that we had because of the costs associated and the inability for us to finance such a construction project. the office of public financing and the comptroller's office did do an analysis to try to compare the renovation potential to petite paul street site towards the future: site. we estimated that the cost for one market was in excess of $17 million. the policy -- the paul site was estimated at $1 million. the future on side was estimated to be 11.8 million. this took into account the tenant improvements and the mechanical, electrical, computer

equipment, insulation moving costs. it was clear to us as we amortized the costs that it was more cost-effective for the city to actually luis the site and in fact consolidate many of the other servers that might be located throughout the city and so with that recommendation, the staff did a study in a survey of all of the equipment in the city and there was a policy decision made that has been confirmed and number of times in the past that the city should begin consolidating their infrastructure. this is that one of two sites, either the paul street site or the airport site. >> thank you. i think there is a follow up question.

>> i understand that it was $1 million but this is over the course of one year. what is the cost over the long term? >> what we look at was a 20-year horizon for the analysis and for the one market plaza, that is also a leased facility. the cost or estimated at $52 million. for the paul street site, the estimated costs was $43.7 million. obviously, the future-owned site, the assumption there was that over time that would be the least expensive, the $28 million. we would have needed to invest in the infrastructure and

construction. >> that was roughly 11 million come like that was $28.1 million. this is assuming that financing would have been $28.1 million. >> thank you. >> just a follow question, the alternatives that you evaluated was that if we stayed at our one market plaza location, in order to receive the safety level as well as the improvements that we were talking about, they would have had to invest about $70 million to make that site comparable to the limited improvements which would be included at 200 paul street? >> i don't think it was an option for the city. the landlord had one of the city out there for a lot of years.

when the recession hit a couple of years ago, some of the pressure was removed. i recall back seven or 8 years ago going with the department to look at the facilities and what the potential costs might be to the data center so that this has really been on the planning for many many years to move out of the plaza because of inadequate space and keeping the city as a tenant. >> if we were to abstain, hypothetically, even if the landlord had agreed, it would be a $17 million investment into a private facility. >> that's correct. >> getting at of the lease after

three years, i think it's ideal for the city, should there be movement in the future, but why is it that we cannot go down the path now in terms of getting a facility that is city owned. could this have been made? what was some of the thinking there? >> in the yearlong study we have done, that work group that we work with did steady 11 different city-owned facilities in terms of evaluating them for retrofit potential. that compared this to the initial investment they would take in any other city-owned facility to locating things in

200 paul and still this came up as the best solution because it could not find another site. in evaluating the other cities, we could not find a site that was better suited. even if we have found the money, we would still be talking about if it makes sense. to go back to the conversation about going with a dual data center approach, i can highlight where the discussion is going. it is really is a long-term goal of the city to continue to reduce the need for space. there is technology that is

evolving. the lease that we are putting in place has two ingredients. one is that we're able to exit police. we are not signing a 5-10, 20 year lease. the reason we're building the facility is that over time we will have a good site and we do have a strategy over time to move city equipment into a city- owned equipment. >> i have a number of questions.

let's talk about the airports. when are we looking at that being completed. >> it that is 18-24 months. >> why are we not considering consolidating all of our servers at the airport? >> we are considering it. we are looking to shrink our equipment footprint and we might be able to fit into that space but at least initially the space needed will require some additional space in addition to what the airport has constructed and the strategy has another component that has been discussed a lot of people see

the benefits to this. the weakness to the historic design has been there is no lack of center. in the case of a localized of said like a building collapse or a fire, and a sense, all of our eggs are in one basket. the design is that there are always two sides in the city, a primary and secondary. as we bring people together, they might be bringing out of the main data center. there is a second that we can switch over to in emergencies. we are trying to avoid problems

by putting all of our eggs in one basket. >> is there a consolidation of time once -- time lines? >> the two-year plan for consolidation has been endorsed and that would be initiated this january. we will be meeting tomorrow to discuss the updates. >> how concrete is this? >> this is as concrete as we can make it but it does depend on and level of funding. >> it is my understanding that say that they can do this consolidation in one year. >> we have looked for every way to speed up this time line. we have been asking vendors to help us. if we can speed up the time

line, we are happy to do so. >> there are vendors to say they can do this in one year, right? >> yes. >> you will have to excuse me. for me coming in, a process did not make a lot of sense. back in 2008, why did we only get seven days? is that protocol? it seems unreasonable. it seems like that is why we only got two bids. >> actually, the request for qualifications, this goes through the computer store which has four vendors. what we do is that we usually put it out for whatever time

period. we ask the vendors if they wished to bid on this and four extensions. it is not unusual for this to go by for a week or a month. in this case, we only put it out if my memory serves me, two vendors felt like they wanted to bid. we did not feel the need to extend. >> he said it at seven days. >> this was the initial time line. we thought that they could respond. >> this was close to start on january 31st. now i understand that this is being pushed back a month. it seems strange that we are

only being asked to support this now. what happens. what happens if we don't support of this? >> when a bid goes to the computer store, that does not typically come to the board. that is what we are looking at. the project is going into a real estate type of deal where it is a direct agreement between the city and a landlord in this case.

all real estate deals to come to the board for approval so that is why your seeing this now. >> it does not make common sense. this will come to us and the move is coming in two weeks. even if you did not have to come to us before, what if this move was made already? >> with respect to the process, we would not bring to the board for consideration a lease if it is not agreed upon. we have some extensive negotiations, which is good. this