HomeMy WebLinkAbout1997-11-18; Municipal Water District; 396; Participation in Regional Communications SystemCARLSE-‘D MUNICIPAL WATER DIST ---,
APPROVE PARTfClPATlCN INTHE REWNAL
CCIMMUNKXTfONSSYSTEMANDAPPROPR#llCNOF FUVDS FOR
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RECOMMENDED ACTION:
Adopt Resolution No. j 002. approving participation in the 800 Mhz Regional Communications
System and appropriatmhe purchase of radio equipment and payment of maintenance
charges.
ITEM EXPLANATION:
The City of Carlsbad is a participating agency in the San Diego County Regional Communications System.
The system was designed to replace existing conventional radio frequencies with a trunked 800 Mhz
system. The purpose for the system is to develop regional communications capabilities to cope with
potential disaster and major events, to improve inter-agency and intra-agency communications and to
provide the needed technology for all participants to meet their communications needs in the future.
Because of the advantages a common communications system provides during emergencies as well as
day to day operations, staff recommends the Board approve the attached Resolution allowing the District
to participate in the Regional Communications System.
On March 21, 1995, the City of Carlsbad adopted Resolution No. 95-69 approving the City of Carlsbad’s
budget for CSA 135 and requesting the levy of benefit charges for CSA 135 - Zone A for the inclusion of
the City of Carlsbad in the Regional Communications System. On May 14, 1996, the City of Carlsbad
adopted Resolution No. 96-170 approving the 1996/97 fiscal budget for CSA 135 - Zone A. The CSA
135 - Zone A was established to fund all local costs associated with the Regional Communications
System.
The passage of Proposition 218, “Voter Approval for Local Government Taxes, Limitations on Fees,
Assessments and Charges” brought the validity of the CSA charge into question, and the matter was
reviewed by City Attorneys and County Counsel. Following this review, a decision was made by the
County not to levy a charge against property until it is approved by the voters. The earliest that the County
could place this matter on the ballot is for the April,l998,Special election. However, money collected prior
to the passage of the new law has been collected legally and may continue to be spent on RCS related
costs. For the past two years, agencies have assessed charges for the RCS backbone and local zone
costs, and have legally spent some of the funds on RCS related expenses.
The Carlsbad portion of the Regional Communications System consists of local equipment which will be
connected to the regional backbone. The installation of local equipment will be conducted in three
phases. The first phase, which consists of the installation of dispatch center and microwave equipment,
was approved by Council on November 12, 1996, and has been completed. Phase II is the installation of
base station, portable and mobile radios. Phase Ill will be the installation of mobile data and automated
vehicle location systems.
Phase II will be completed in two parts. The first part, which is addressed by this agenda bill, will provide
radios to the police and fire departments, the Carlsbad Municipal Water District and other enterprise
operations. The second pan of Phase II will provide radios to the remaining city departments sometime
during the third quarter of 1998 with Phase III to be completed the first quarter of 1999.
ENVIRONMENTAL IMPACT:
The City Council approved Carlsbad’s participation in the Regional Communication System on March 21,
1995. The County Board of Supervisors approved the Negative Declaration for the Regional
Communications System on March 5, 1996. Participants in the System contemplated a series of
subsequent actions to render the System fully functional. This item is one of those subsequent actions.
The Planning Director has determined this subsequent action is in compliance with prior environmental
documentation.
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FISCAL IMPACT:
The funding mechanism recommended by staff would use remaining CSA funds and enterprise fund
reserves to fund the annual debt service for the lease-purchase agreement for equipment and backbone
maintenance charges. When CSA funds are no longer available, and if no other funding sources are
available, the City would fund its remaining share of the costs from General fund balance with an
appropriate share coming from the water and sanitation funds. The Water District’s share is based upon
the number of radios they intend to operate on the system compared to the total number operated by the
city.
The City of Carl&ad has an existing Master Lease-Purchase Agreement with Motorola. Therefore, a new
Schedule A-l, Equipment List, and B-l, Payment Schedule, will be added to the master lease. The city’s
total cost of the equipment for Part 1 of Phase II including estimated installation costs is $1,091,628,
financed over fifteen years at approximately $106,222 annually (the exact figure will be based upon 95%
of the1 5 year Treasury Bill rate at the time of Council approval) .
The following table identifies the costs associated with each phase of the project as well as the projected
annual debt service.
1 Source of Funds (Note 1)
Funded Enterprise
Annual By Existing Funds
Debt CSA Funds Appropriation
Service costs Note 2 Requested
System
Capital
Previously Approved by Council
costs
Backbone Costs I 1,590,132 174,260j 149,864 24,396
Dispatch Center/Microwave 764,986 79,265 68.168 11,097
Total Obligated 2,355,118 253,525 218,032 35,494
Current Request Equipment
Phase II : Part 1 Equipment
Public Safety
Water
Total Requested Equipment
Annual Backbone Maint. Costs (*1998 estimate)
861,119 87,878 87,878 0
179,759 18,344 0 18,344
1,040,878 106,222 87,878 18,344
71,500 58,750 12,750
Sub Total Prior Approval and
Current Request
3,395,996 431,247 364,660 66,588
Future System Improvements
Phase II: Part 2 Equipment
General Services
Annual Backbone Maintenance Phase III
DatalAVL
329,142 35,501 35.501 0
24,900 24,900
1,274,098 137,423 118,184 19,239
Total All Costs at Build-Out I 4,999,236 633,671, 546,454 87,217
Note 1 - The Water and Sewer Enterprise funds will be responsible for equally funding a proportional
share of the total costs for the system. The requested appropriation of $33,989 funds all water enterprise fund
costs for Phase I and Phase II and backbone maintenance charges,
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Note 2 - The City has access to approximately $1 million in CSA funds collected prior to 1997-98 to pay for
costs related to the 800 MHz system. These funds may be used to pay debt service costs and/or
to purchase equipment as necessary. The current plan is to use these funds to pay debt service costs
for the public safety and general services equipment portions of the system until this balance has been exhausted
Note 3 - The annual maintenance costs for calendar year 1998 will be billed retrospectively in December 1998,
based upon the number of radios on the system and their respective lengths of time on the ssytem.
The following table projects the depletion of the CSA 135 Backbone and Zone A fund balances.
YEAR ANNUAL DEBT ENTERPRISE CSA FUND
SERVICE FUND SHARE BALANCE
Current 253,525 35,494 906,173
1998 431,247 66,588 541,514
1998 491,648 66,588 116,454
1999 629,071 85,827 -426,790
2000 629,071 85,827 -543-244
As the table depicts, in 1999, the General Fund will have to pick up the debt service payments unless a
renewable funding source is developed.
EXHIBITS:
1 . Resolution No. I,00 3 approving participation and appropriating funds.
2. Memorandum “800 Mhz RCS. Funding Issues”
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RESOLUTION NO. 1,002
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD MUNICIPAL WATER DISTRICT, CARLSBAD. CALIFORNIA, APPROVING PARTICIPATION IN THE 800 MHZ REGIONAL COMMUNICATION SYSTEM AND APPROPRIATING FUNDS FOR THE PURCHASE OF RADIO EQUIPMENT AND PAYMENT OF MAINTENANCE CHARGES
WHEREAS, the Board of Directors of the Carlsbad Municipal Water
District of Carlsbad, California has determined it necessary and in the
public interest to be a participating agency in the 800 Mhz Regional
Communications System: and
WHEREAS, each participating agency must purchase radio
equipment which is compatible with said system and pay its contractural
fair share for the maintenance of said system: and
WHEREAS, participating agencies are responsible for determining
the appropriate mechanism to fund their participation in said system: and
WHEREAS, funding participation in said system is an appropriate
use of the Water Enterprise Fund: and
WHEREAS, the purchase of this equipment and maintenance
charges will require the appropriation of additional funds from the
water enterprise fund in the amount of $33,989.
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors
of the Carlsbad Municipal Water District of Carlsbad, California as
follows:
1. That the above recitations are true and correct
2. Approves participation in the 800Mhz Regional Communications
System.
3. Appropriates funds in the amounts of $33,989 from the
water enterprise fund balance to the general fund.
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PASSED, APPROVED AND ADOPTED at a special meeting of the
Board of Directors of the Carlsbad Municipal Water District of Carlsbad,
California, held on the 18th day of November ,
1997, by the following vote to wit:
AYES: Board Members Lewis, Finnila, Nygaard, Kulchin and Hall
NOES: None
ABSENT: None
ATTEST:
ALETHA L. RAUTeN&ANZ, City Clerk (SEAL)
‘5
MEMORANDUM
Office of the Fire Chief
Date: August 7, 1997
To: Ray Patchett, City Manager
From: Fire Chief
Financial Management Director
Subject: 800 Mhz REGIONAL COMMUNICATION SYSTEM (RCS)
FUNDING ISSUES
Backaround.
In 1994, determined to find a better solution to poor wireless communications, public
safety and public service agencies in San Diego County and Imperial County
completed a three year collaborative effort to form the Regional Communications
System (RCS). The RCS vision of over 50 agencies sharing fiscal and radio
frequency resources to provide and administer cost effective, wireless communication
solutions will soon be a reality. Now under construction, the RCS will enable public
safety personnel in this two County area to communicate seamlessly across
jurisdictional boundaries on a unit-to-unit level, regardless of their affiliation. The RCS
will be satisfying a wide range of wireless voice and data needs for a variety of public
safety and public service agencies near the California - Mexican border.
San Diego and Imperial County jurisdictions are leading an emerging nationwide
trend toward shared public safety radio networks. Participants sharing administration
of the RCS include state, county and local jurisdictions and agencies. Combining
resources has resulted in a robust system supporting over 12,000 radios, controlling
more than 150 frequencies, and utilizing 50 microwave repeater sites. The 10,000
square mile coverage proves that through sharing, the whole can be greater than the
sum of its parts. The system is under construction and will be an operational reality by
mid- 1998.
Over the next three years, the County and several other participating agencies are
planning to install a new radio communications system for all public safety and some
community services operations. The purpose for the system is to develop regional
communications capabilities to cope with potential disasters and major events, to
improve inter-agency and intra-agency communications and to provide the needed
technology for all participants to meet their communications needs in the future.
This Regional Communications System (RCS) is made up of several interrelated
project components, which are designed to achieve the goal of replacing the existing
system in the most efficient manner for the RCS members and the residents of San
Diego County. This system includes a variety of capabilities including voice and data,
the ability to communicate between agencies, computer aided dispatch upgrades,
Automatic Vehicle Locator (AVL), and mobile data terminals.
The system is exp.ected to cost a total of $83.4 million, with the county providing the
majority of the funding. Each agency’s share is based on its proportional demand
placed on the system. Carlsbad’s share is roughly $5 million. $1.6 million represents.
the City’s share of the basic backbone system and microwave towers, and $3.4 million
is the direct cost to Carlsbad for its share of the public safety dispatch center upgrade,
mobile and portable equipment, and additional data backbone/microwave costs tied to
the AVL system. In addition, Carlsbad will share in the annual maintenance of the
1,000 per year. backbone system. This maintenance cost is expected to be $10
The City of Carlsbad intended to fund its share of the costs from
the County Services Area (CSA) assessment against property
assessment averaged about $23 per single family dwelling.
800 Mhz ImDlementation Schedule
revenue received from
within the City. This
The current development schedule calls for the backbone system to be completed by
August 1997 with the system activation occurring during the first half of 1998. The
end-user voice system is expected to be functional by mid 1998, with the sheriff
converting to the 800 Mhz system by the end of 1998. The Emergency
Communications system upgrades will be completed by early 1998. The AVL system
is slated for completion by the mid-1998.
The $764,086 upgrade to the Carlsbad Dispatch Center was completed on June 17,
1997. The upgraded dispatch center will be able to continue operating the old radio
system until the mobile units are converted to the 800 Mhz system. Carlsbad’s mobile
and portable radios are planned to be received in 1998. Council previously approved
entering into a lease purchase agreement for this equipment.
Proposition 2 18
On November 5, 1996, the voters approved Proposition 218. This proposition, titled
“Voter Approval for Local Government Taxes, Limitations on Fees, Assessments and
Charges”, establishes new rules for the creation of property related taxes and charges.
It’s significant provisions include:
l Requires voter approval for tax levies
l Requires approval by a majority of property owners for all assessments
l Requires majority property owner approval or two-thirds electorate approval for
property related fees and charges
* Authorizes the use of the initiative process to repeal or reduce local taxes, fees,
charges, and assessments
The court system has not had an opportunity to hear arguments related to any
Proposition 218 issues nor has the legislature adopted any implementing guidelines
which might assist cities or counties in sorting out the complex issues. There is
pending legislation which would clarify some of the language of Prop 218, however,
the most controversial provisions have not yet been addressed. This means that cities
and counties are required to comply with Proposition 218 to the best of their abilities
until clarification can be provided by the legislature and courts.
2
The passage of Proposition 218 brought the validity of the CSA charge into question,
and the matter was reviewed by City Attorneys and County Counsel. Following this
review, a decision was made by the County not to levy a charge against property until
it is approved by the voters. The earliest that the County could place this matter on a
ballot is for the June 1998 election. This means that no assessments will be collected
for the 1997-98 fiscal year.
Also, the RCS Board of Directors and the County still need to decide whether or not to
take the issue to the voters at all. In either case, the ability to fund the RCS from CSA
funds will remain in doubt until after the June 1998 election.
This uncertainty poses a threat to the General Fund. If the CSA is not confirmed by the
voters and Carlsbad proceeds with the installation of the 800 Mhz radio system, it is
likely that the General fund will bear most of the burden of paying the costs of the
system. Carlsbad’s share of the total system cost is $5 million. The CSA has a
balance of approximately $1 ,OOO,OOO collected over the past two years. Thus, if
Carlsbad’s City Council chooses to go forward with the system and the assessment is
not ratified by the voters, the remaining burden for payment of the system’s cost Of $4
million may need to be paid by the General fund and a portion from the Water
department fund reserves (Approximately $376,317 plus $14,400 a year for backbone
maintenance cost).
Fiscal Imt2act
The total cost of the system is estimated at $5 million. This amount is to be financed
through a lease purchase agreement with Motorola and the County over a 15 year
period. Annual debt service payments will total approximately $600,000 per year once
the entire system is purchased. Under the original plans, the annual revenue from the
CSA was to fund the lease payments for user equipment to Motorola and the
payments to the County for the voice and data backbone costs. When the system was
paid off, the CSA assessment would end. In addition, the City will be expected to fund
its share of the annual maintenance cost of the backbone system, estimated to be
about $101,000 per year upon system completion.
The City has already committed itself to the purchase and installation of the
Dispatch/Microwave portion of the project and to its share of the backbone system.
These two items total $2,354,100. Using the lease purchase agreement already in
place, the annual debt service totals approximately $250,000.
The City currently has access to approximately $1 ,OOO,OOO in existing CSA funds.
This is the total amount of CSA 135, Zone-A money collected in the Carlsbad area by
the County over the two year period prior to the passage of prop. 218. If these funds
are used to pay the lease payments on only the portions for which we are already
committed, they would be sufficient to cover approximately fours years worth of debt
service payments.
If the CSA is not confirmed by the voters, then the City Council will need to make some
key decisions. The following are some possible options which the Council may want to
consider in the future.
possible Options
1. Proceed with the installation of the system and fund all hard
costs from existing CSA funds, General Fund balances and other
revenue sources, if available:
Under this plan, the City would commit to the completion of the 800 Mhz radio
system. Any remaining funds in the CSA account would be used first to pay for
equipment as it is needed. When CSA funds are no longer available, the City
would fund its remaining share of the costs from General fund balance with
some portion coming from the water and sanitation funds.
Annual Costs
System (See Note 1)
costs
Previously Obligated Costs
Backbone Costs 1590,132 171,511
Dispatch CenterlMicrowave 764,986 79,265
Total Obligated 2,355,118 250,776
Remaining Equipment Costs:
User Equipment:
Public Safety
Water
General Services
Data/AVL
857,603
162,943
376,049
1.274.098
Total Remaining Equipment 2.670.693
Total All Equipment Costs 5,025,811
Annual Maintenance Costs
for Backbone System
Total Annual Costs
101,000
351.776
Source of Funds:
Existing CSA Fund Balance
(Zone A - estimated balance)
Water District Funds (See Note 21
1 ,ooo,ooo
86.323
Note 1 - The annual costs include lease purchase payments on equipment already
installed under an existing agreement with Motorola
Note 2 - The Water District will be responsible for funding a share of the total costs for
the system based on the proportional share of the system used by District radios
Using the option above, the General fund would pay the total equipment cost of
$2,670,693, and fund the debt service of the backbone, dispatch center and
annual backbone maintenance from the CSA reserves for approximately three
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years. At the end of three years, the balance of the financed portion would be
paid off using General fund and Water fund reserves (The Water District would
pay approximately $86,323 per year for annual debt service for the backbone
and dispatch center, their equipment, and their share of the data backbone
backbone maintenance).
The RCS members are exploring other funding sources but none have yet been
identified. Staff expects the General fund balance to total about $16 to $17
million by the end of 1996-97.
If completing this project on schedule is a high priority, staff recommends that
Council adopt this option as a fall back position. If the CSA is not ratified by the
voters, or if interest rates rise substantially, the Council may want to revisit this
option. This funding plan will put a minimum demand on the day-to-day
General fund revenues, and will obligate the General fund balance as
purchases are made.
2. Proceed with the installation of the system, fund all hard costs
through lease purchase agreements, and pay annual lease
purchase costs from General fund balance (and other fund
balances, as appropriate):
This option is similar to the one above, with one exception. Instead of paying
cash for the system as it is installed, the City would continue to draw on its lease
purchase agreement with Motorola as the system is installed. This agreement
will allow the City to finance the equipment over its useful life (up to 15 years).
The annual lease purchase payments could be made from day-to-day General
fund revenues or from General fund balances. As with the previous option, a
small portion may be paid from the water and sanitation funds as well.
Backbone Costs
Dispatch Center/Microwave
Total Base System Costs
User Equipment:
Public Safety
Water
General Services
DatdAVL
Total User Equipment Costs
Total System Costs
System Costs Debt Service
1,590,132 171,511
764,986 79,265
2.355.118 250.776
857,603 92,501
162,943 17,575
376.049 40,560
1,274,098 137,423
2,670.693 288,059
5,025,811 538,835
Annual Backbone Maintenance Costs 101,000
Total Annual Debt Service and Maint Costs 639,835
Less - Existing Source of Funds:
CSA 135, Zone-A Balance
Net Unfunded Equipment Costs
1 ,ooo,ooo 107,859
4.025,811 531,976
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If balances are used, there would be less conflict between the 800 Mhz system
and other operating programs. Staff is able to recommend the use of balances
for this expenditure because of its limited life. Staff does not recommend that
the Council use the general fund balance to fund ongoing expenses.
There is an alternate plan to phase in the various departments over a three year
time span - the first year completing public safety and the Water department and
second and third year general services with Data and AVL implemented early in
1999. As illustrated below, in the year 2000, the CSA funds will be gone and
the General fund will then be used.
Base System Costs
Backbone Costs
Dispatch CenterIMicrowave
Total Base System Costs
User Equipment:
Public Safety
Water
General Services
DatalAVL
Total User Equipment Cost
Purchase Annual Costs
Price 1997 1998 1999 2000
1,590,132 171,511 171,511 171,511
764,986 79,265 79,265 79,265 79,265
2,355,118 79,265 250,776 250,776 250,776
857,603 92,501 92,501 92,501
162,943 17,575 17,575 17,575
376,049 40,560
1,274,098 137,423 137,423
2,670,693 110,076 247,499 288,059
11,097 67,084 86,323 86,323
68,168 369,968 488,152 73,712
- 479,800
Total System Cost 5,025,811 79,265 360,852 498,275 538,835
Annual Backbone Maintenance $76,200 $76,200 $101,000
Total Annual Debt Service and 79,265 437,052 574,475 639,835
Maint Costs
Sources of Funds
Water District ( See Note)
CSA13-ZoneA
General Fund or other Sources
Total Source of Funds
Fund Balance - CSA 135 - Zone A
Beginning
Balance 1997 1998 1999 2000
1 ,OOO,OOO 931,832 561,864 73,712
Note: The Water District’s proportionate annual debt service share of the backbone
and dispatch center is $35,109; User equipment is $17,575; Data/AVL is $19,239;
and, backbone maintenance is $14,400, for an annual total of $86,323.
The interest rate on the lease purchase agreement is set at 95% of the 15 year
US Treasury Bill (currently yielding about 7%). If rates remained unchanged
over the life of the lease, based on the present value of the expected cash flows,
it would be slightly more costly to finance the purchase than to pay cash as the
equipment is installed. However, the Council would have a larger General fund
balance available for emergencies over the term of the lease if this financing
option is chosen.
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Staff recommends that Council adopt one of these two options if completion Of
the system is a high priority, and the Council wishes to maintain as much fiscal
flexibility as possible. These options have the advantage of stretching out the
cash flow demands over the useful life of the equipment.
3. Put the 800 Mhz system installation on hold until a source of
funds can be identified:
It was the Council’s original intent to fund the 800 Mhz radio system from
revenue generated by the CSA. If those funds become unavailable, the Council
may wish to reconsider its commitment to the project. Although the City is
committed to the first phases of the project, it does not have to complete the
purchase of the remaining pieces. Of course, without the radios and equipment
to use the new system, the City would not be able to take advantage of the
benefits of the 800 Mhz frequency while at the same time making annual debt
service payments of $250,776 per year for the next fifteen years.
Backbone Costs
Dispatch Center/Microwave
Obligated Costs Debt Service
$1,590,132 $171,511
$764,986 $79,265
$2,355,118 $250,776
An additional factor to consider in this option is that the Federal
Communications Commission (FCC) is considering changing to frequency
technology which will make our current radios obsolete and unlicensable. In
fact, the National Telecommunications and Information Administration (NTIA)
has mandated that federal systems make the changes by 2005. The FCC plan
is to move all users to 12.5 Khz (Kilohertz) channel spacing. Our radios
currently use 25 Khz spacing. In narrowing the band width by half, the FCC
doubles the number of frequencies they can license and thereby increasing the
number they can sell. These different band widths are incompatible with our
current radio systems and user equipment, thereby dictating that most of our
equipment must be replaced.
Council should consider this alternative if competing priorities for funding are
substantial, and Council is concerned about dedicating considerable resources
to this project without having fully evaluated other projects.
Summarv
Council.does not need to make any decisions on this issue at this time. The upgrades
to Carlsbad’s dispatch center are complete and the installation of the backbone
system is underway and scheduled for completion by the end of August 1998. The
City has a commitment to complete and fund their portion of system and funds are
available to make the lease payments for the next several years. Staff is continuing to
meet with the County and the other participating agencies to explore alternative
methods for funding the system and to determine the best way to proceed. Council will
continue to be updated on the status of these efforts as work proceeds.
7
The members of the RCS and the County will need to make a decision within the next
few months as to whether they are going to place the CSA on the ballot in June 1998.
Once that is determined, Council will need to consider the available options and
decide whether to proceed with the system implementation and, if so, how it will be
funded.
DENNIS J. VAN DER MAATEN JAMES ELLIOTT
*,-.. ..,
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