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4B Sales Tax Corporation Minutes - 7/19/2002MINUTES OF THE 4B SALES TAX CORPORATION July 19, 2002 Present: Rick Boone, President ti Ray Gonzalez, Vice President ti Benay Avers. Secretary Treasurer Leon Mallonee Bill Altman Arthur Bea Williams § Matt Benoit, Assistant City Manager 5 Darron Leiker, Assistant City Manager Jim Dockery, Director of Finance ti Ray Sanders, Information Systems Ken Coughlin, Chief of Police § Major Gerald Todd, WFPD § Harold Lindsey, Fire Chief S Earl Foster, Assistant Fire Chief Linda Merrill, Recording Secretary § Absent: Tommy McCulloch 5 I. Call to Order Corporation Board Members City Staff President Rick Boone called the meeting to order at 8:00 a.m. He indicated that Board member Tommy McCulloch would not be able to attend today's meeting. II. Approval of Minutes There was not a consensus as to the last meeting date of the Board. No minutes were approved. III. Election of Officers Leon Mallonee moved that the current slate of officers be re- elected to their current positions. This motion was seconded by Arthur Bea Williams, and unanimously approved. Therefore, Rick Boone will continue as President, Ray Gonzalez as Vice President, and Benay Ayers as Secretary- Treasurer. Mr. Benoit requested the Board move to Items VI and VII, and address Items IV and V at a later time in the meeting. The Board concurred. VI. Consider Presentation on Radio Communications Project Mr. Benoit gave a presentation to the Board on the problems and possible solutions to the Radio Communications Project. The City's consultant on this project. RCC, had done a similar process in 1998 and produced a report on the current system environment. The company was retained again in 2002 to review the City's current radio systems environment. outline recommendations. detail cost estimates and consider debt service scenarios. Two -Way Radios Mr. Benoit then focused on two -way radios. Problems associated with the City's current system include (1) inadequate coverage, (2) channel interference, (3) channel congestion, (4) no vehicle -to- vehicle communication abilities, (4) lack of security, (5) equipment is out -dated and bulky, and (6) no room for growth. Police Chief Ken Coughlin added that Channel 2 handles the daily traffic of communications, while warrants are transmitted on Channel 1. However, when there is an emergency situation, Channel 2 is reserved solely for such emergency, and all other communications go through Channel 1. Computer Aided Dispatch and Records Management Systems Mr. Benoit then addressed Computer Aided Dispatch and Records Management Systems Environment, in which the computer system would receive information as the dispatchers hear the same information. Again, he addressed the problems currently experienced by police personnel: the communications center is in tight, dark quarters, using outdated equipment. The software used was written in the 1970's. He continued, stating that the Computer Aided Dispatch and Records Management Systems are not tightly linked. A linking of these technologies would greatly reduce the redundancy of repetitive input of material into the system, and thus increase efficiency. He added that throuoh the Computer Aided Dispatch, the dispatchers could run a query and convey to the officer the information in the computer on a particular individual. Mobile Data Transfer Mr. Benoit stated Mobile Data Transfer are laptops placed in police vehicles that carry radio signals. At present, the department has a "sneaker -net" of 45 laptops, which basically means the officers can store information on their vehicle's laptop by way of a diskette, and then walk the diskette into the department and transfer the information from the diskette onto the department's computers. Mobile Data Transfer goes through the airwaves, and would allow the officers to do field reporting. There would also be certain programmable keys that the officers could use for certain functions without having to get on the radio system (i.e., the F4 key could 3 be used to represent "officer needs assistance "). This would reduce the traffic on the radio system, allowing the dispatchers to take more incoming calls. Solutions proposed by RCC include: • Two -site simulcast system (to combat inadequate coverage) • 800 MHz system (to combat channel interference and provide for security) a A trunked system to allow 100 radios per channel, slharing of frequencies with priority assignments during busy times (to combat channel congestion and no vehicle -to- vehicle communication). A trunked system would allow for certain groups, such as HazMat, to speak exclusively on one channel. It is also an easy way to allow for growth, as the addition of more radios is simple to accomplish. • A new system would remove the potential liability of outdated and unstable software Mr. Benoit stated that when the consultants discussed this project, the question was not who is doing this upgrade, but rather, who isn't. Wichita Falls would not be on the cutting edge of technology, even with this tremendous upgrade. Fort Worth is into its third generation of mobile data transfer. Cost Estimates The Radio System cost estimate breakdown is as follows: Infrastructure (towers, microwave systems, and dispatch console system) $4,319,710 Public Safety Radios and Installation $1,870,820 Non - Public Safety Radios and Installation $ 500.000 Total 56,690,530 The Computer Aided Dispatch and Records Management System is estimated to cost (with back -up facilities) in the approximate range of $985,000 to $2,335,000. The Mobile Data Terminals cost estimate was presented as follows: Hardware (laptops and system infrastructure) $1,670,000 Software $ 915.000 Installation and Training $ 400,000 Total $2,985,000 The total estimated cost for the Radio System, Computer Aided Dispatch and Records Management Systems, and Mobile Data Terminals is $10,660,530 to $12,010,530. During discussion, President Boone queried if RCC's proposal was the "Cadillac" model, as the funds for this project have almost doubled since their first estimate. Mr. Benoit stated the needs assessment performed by RCC in 1998 solely addressed the two -way radios. The digital element of the 800 MHz is available now and highly recommended. RCC did discuss the Computer Aided Dispatch system in 1998, but no cost estimates were provided. He did acknowledge there are certain items in this presentation that could be pared down. However, it is 4 the consultant's recommendation that the proposal remain as written. it might be surprising, to see very competitive prices bid. President Boone presumed that City staff had researched RCC. NIr. Benoit stated he had performed no research, but that lie had previously worked with the company. President Boone asked whether RCC was recommending the same system to every city for which it performs this consulting service. Jim Dockery stated that the City had gone through this process twice, and RCC has practically cornered the market in Texas in these types of projects. There is not just one system available, but rather multiple scenarios, depending upon each city's needs and current technoloiy levels. He stated the only real criticism he could make of RCC is the fact that they may be slow in responding to timelines. Their services and qualifications get good reviews. Mayor Bill Altman noted that lie, along with City Councilors Johnny Burns and Harold Hawkins, served on a Council subcommittee to review the first proposal. They investigated the system at Mesquite, and met with some of the vendors. The city of Mesquite is happy with their system, but they confirm RCC's problem with meeting certain timelines. RCC has bought out other companies. He believes it is the best company, although he is not totally satisfied with them. They will say where the towers need to be, perform the measurements and prepare the design. Once we get the bids, they will follow through from implementation to testing to make certain the system meets our criteria. President Boone questioned whether the City could afford this project, or whether, could the City afford not to do this project. Mr. Benoit stated that was his feeling, as well. VII. Consider Debt Service Scenarios for Project Funding Mr. Benoit discussed the proposed Homeland Security Funds, wherein the federal government is proposing to spend $3.5 Billion in First Responder funds. This money would be distributed among the states by population, vital infrastructure and border responsibilities. The State would retain 25 %, and the remaining 75% would be distributed to local governments. He has spoken with Senator Hutchison and Congressman Thornberry's office about these funds, and will fight to receive monies from this fund. It is unknown at this time, however. when these funds will be available. Mr. Benoit then presented three scenarios for funding these projects: (1) Cash, (2) Debt - Heavy, and (3) Debt with Project Phasing. He had prepared spreadsheets for each scenario. detailing the various encumbrances and expenditures, and how the costs for the projects discussed today figure into the equation. NIr. Benoit recommended the Board choose Scenario #3, Debt with Project Phasing. 5 He provided the following scenario under the Debt with Project Phasing plan: Assumptions: • Tax Collections are equal to 2001 actuals, interest earnings are 2% of average cash balance • Debt service project expenditures are paid equally over the life of the project • Two -way radio and CAD /RMS elements of the Radio Communications Project are completed in June 2003 to July 2004 as follows: - Series "A" - Radio Infrastructure ($2,893,310 in principal) is paid with a 15 -year G.O. bond ($276,397 of annual debt service) starting in February 2003 Series "B' - Limited Portable Radios and Limited CAD equipment ($1,872,150 in principal) is paid with a 10 -year G.O. bond ($236,600 of annual debt service) starting in February 2003 Remaining amount ($3,585,070) is paid between January 2005 and January 2006, and 20% paid in February 2006 • Public Safety Training Center and Fire Training Field Construction (Series "C ") are financed with a 20 -vear G.O. Bond ($444,181 of annual debt service), starting in November 2002 • RCC's contract excels when project is phased, conservative estimate is 20 %, 2/3 is paid equally through the life of the Radio /CAD implementation, and 1/3) is paid equally over the life of Mobile Data Terminal implementation Ms. Ayers questioned Mayor Altman on the Council's feelings on this matter. Mayor Altman replied that, while he cannot speak for how the Council feels about the actual dollar amount, the Council does recognize the need for improvements in communications. He also noted that it is very probable the costs will come in less than projected. Mr. Benoit suggested that the Board make the following decisions at today's meeting: (1) Recommend to the Council that they proceed with RCC to design an RFP to solicit proposals. He stated he will give the Council a similar presentation to the one he has given the 4b Board today. This recommendation will not authorize spending, but will allow staff to seek cost estimates. This process, and the review of the estimates, will take some time. Staff would then again approach the City Council with firm numbers, and then come back to the Board to request funding with a solid cost estimate. (2) There is going to be debt issuance involved in this process. Mr. Benoit states that staff requests authorization from the Board to meet with bond counsel for the consideration of debt issuance for public safety projects. Finance Director Jim Dockery concurred, stating that the public safety training center and drill field need to get going. It makes sense to bundle financing in one bond issue to save money. I Staff would like authorization to ask financial manager Murphy Davis to develop bond proposals for the bond market and move forward in issuing bonds. Mr. Benoit added that. if the Board desires, the bond issue for the drill field and public safety training center can still be handled separately from the one for the radio communications. But given the relationship of these projects, it would be advisable to bundle them to save money. President Boone countered that this Board initially agreed it would not borrow money that far out and bind future boards. He questioned how much more it would cost to issue bonds separately for these projects. Jim Dockery estimated a savings of approximately $100,000 to bundle the projects. President Boone asked whether money from the Homeland Security Fund could go to fund this project. Chief Coughlin stated it could possibly go to airport security. Mr. Benoit stated that is a different pot of money. Mayor Altman stated it could go to a security study of the water system, but some of the $3.5 billion is clearly marked for communications in the proposed legislation. Mr. Benoit agreed, stating this would certainly be a legitimate project as the legislation is currently written. Ms. Ayers moved. seconded by Mr. Mallonee, that the 4b Board recommend to the Council that they proceed, with assistance from RCC Consultants, to design an RFP to solicit proposals for the radio communications project. The motion was unanimously approved. Ms. Avers asked if there is a downside of bonding. Mr. Dockery stated the Board needs to be sure they are comfortable with the bonding approach. There is no problem if they ask for more than what is needed - the Board could simply pay off the bond earlier. Or, the bond proceeds could be used for another project, provided the bond is structured in such a way to provide the latitude for other projects. President Boone questioned whether the City could afford to maintain this system. Chief Coughlin stated he assumed the maintenance costs would be built into the proposal. Mr. Benoit stated this is the function of the RFP. In the proposal, the vendors will provide one year of parts and labor. It is also advisable that the vendors specify their maintenance costs after the first year. He did acknowledge there would be additional costs for maintenance, but that is simply the cost of doing business. Mr. Dockery stated that the City would lose old maintenance costs and gain new ones, although the new costs will be a bit more complicated, with the addition of the remote vehicle computers. President Boone wondered whether the system would have to be replaced about the time it is paid off. Mr. Benoit stated that the infrastructure expectancy is approximately 15 years, and the CAD is a 10 -year investment. The handheld radios would probably be replaced one to two times in 15 years. Every three to four years would require an upgrade in the software. 7 President Boone asked if the staff would come back to the 4b Board in another 15 years requesting another $12 million. Mr. Benoit stated that financing decisions at years down the road are extremely difficult to envision. However, he did not think it would be out of line if that situation did occur. Ms. Ayers stated the members knew this was part of the reason the Board was formed in the first place. Mr. Benoit stated he was looking for a motion to authorize city staff to proceed with financial advisors and bond counsel with debt issuance for public safety projects of $10.18 million. Ms. Ayers so moved, seconded by Mr. Gonzalez, and the motion was unanimously approved. IV. Receive Financial Report Mr. Benoit indicated that on the expenditure side of the financial report, the payments made to -date for Secord and Lebow for architectural services and RCC Consultants for radio system design have increased to $71,000 and $100,000 accordingly. On the revenue side, the July sales tax collections were $220,000. That amount represents a 4.4% increase from July of the last fiscal year. V. Consider Approval of FY 2002 -2003 Budget Mr. Benoit indicated that the only anticipated expense for the next fiscal year was the final debt service payment for the Library in the amount of $343,590. The revenue projection for the next fiscal year represents a .6% increase over the actual collections in the 2001 fiscal year. The projected interest earnings of $40,000 is a conservative estimate, recognizing that the debt service schedules discussed earlier in the meeting will impact the cash balance and interest earnings. This estimate is therefore very conservative. After a brief presentation by Mr. Benoit concerning the Board's budget, Ms. Williams moved that the Board receive the financial report, and approve the 2002 -03 budget. This motion was seconded by Mr. Mallonee, and was unanimously approved. VIII. Adjourn The meeting was adjourned at 9:52 a.m. Benay Ayers Secretary Treasurer Linda Merrill Recording Secretary