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336-886-2100 <br />FAX 336-886-2101 <br />wwwsegalcpa.com <br />April 14, 2005 <br />Mr. Moses Carey, Jr., Chairman <br />Orange County Board of County Commissioners <br />P.O. Box 8181 . <br />Hillsborough, NC 27278 <br />Dear Mr. Carey: <br />Robert S. Segal, CPA PA is pleased to report its progress on the collaboration <br />project involving Chapel Hill-Carrboro City Schools, Orange County Schools and <br />Orange County. We have accumulated data from the three organizations and <br />have noted some interesting possibilities for collaboration. We have started <br />researching their feasibility. In the meantime, we have performed reviews of <br />various items and can report the following progress. <br />Chapel Hill-Carrboro City Schools (CHCCS) <br />Telecommunication expenses <br />VVe have reviewed the telecommunications expenses and have prepared a <br />preliminary recommendation on how CHCCS could save approximately $67,000 <br />per year net of Universal Service Fund/e-rate discounts and related costs. <br />CHCCS is currently in the middle of a major infrastructure upgrade. CHCCS is <br />working with BellSouth and the University of North Carolina (UNC) to implement <br />a plan~to connect to UNC in July 2005 for internet access at a reduced annual <br />cost. CHCCS did not initiate switching telecommunications services as we <br />recommended because they were in the middle of this upgrade. Once the <br />upgrade is complete, CHCCS is willing to review the recommendations and <br />implement any suggested cost saving strategies. <br />CHCCS IT shared that its long-range plan is to implement Voice Over Internet <br />Protocol (VOIP). They currently have implemented the Cisco VOIP solution in <br />two schools and several office locations. VOIP has a large upfront capital cost <br />that may be offset by future reduced monthly phone costs. IT did not share with <br />us a vendor's projection of costs or projected savings for VOIP. Therefore, we <br />are unable to evaluate this computation of savings. Further, we speculate that <br />the IT/vendor projection of savings is not reduced by E-rate funding. IT has not <br />needed to invest in VOIP equipment during the past year and has not needed to <br />ROBERT S. SEGAL, CPA PA <br />EXPENSE REDUCTION & REVENUE ENHANCEMENT 1912 EASTCHESTER DRIVE <br />SUITE 206 <br />HIGH POINT, NC 27265 <br />