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Subcommittee releases $900,000 reserve to move city data center to colocation facility
Summary
The Department of Technology won committee approval to release $900,000 in reserve funds to support relocating the city’s data center to a colocation site at 200 Paul Street. Staff said the move avoids $11M–$16.8M in retrofit or build costs and improves business continuity; ongoing colocation costs are projected at about $1.7M annually.
The Department of Technology requested release of $900,000 in reserve funds to support a rapid relocation of the city’s data center to a colocation facility at 200 Paul Street. Department representatives said a move to a colocation model avoids large capital investments required to retrofit the existing 1 Market Plaza facility (estimated at about $16.8 million) or to build a city‑owned data center (estimated about $11 million).
DT staff said the colocation option provides immediate business continuity and expanded backup and storage capabilities for mission‑critical systems — including the city’s financial mainframe, payroll and public safety case systems — and allows the city to scale capacity up or down as needed. Department staff estimated annual operating costs at approximately $1.7 million for the colocation model versus roughly $1.1 million in current in‑house costs, but stressed the capital avoidance was the key driver.
Supervisors questioned cost avoidance numbers and the original reserve purpose; DT said the $1.188M original reserve was meant as a down payment on equipment for a long‑term city facility and the $900,000 release before the move would support the colocation transition while other reserve funds remain available as contingency. After public comment and discussion, a motion to release the reserve funds passed over objection.
The subcommittee noted the risk and complexity of moving mission‑critical systems and left remaining contingency funding in reserve until the migration is complete.
