4B Sales Tax Corporation Minutes - 05/28/2004Present:
RECEIVED IN
CITY CLERK'S OFFICE
Date 10 aS- 04
By Ae-, Time
MINUTES OF THE 413 SALES TAX CORPORATION
May 28, 2004
Rick Boone, President
Ray Gonzalez, Vice President
Arthur Bea Williams
Bill Altman
Tommy McCulloch
Jim Berzina, City Manager
Matt Benoit, Assistant City Manager
Jim Dockery, Director of Finance
Ken Coughlin, Chief of Police, WFPD
Major Gerald Todd, WFPD
John Vasquez, WFPD
Harold Lindsey, Chief, WFFD
Assistant Chief Earl Foster, WFFD
Linda Merrill, Recording Secretary
Absent:
Benay Ayers, Secretary Treasurer
Leon Mallonee
I. Call To Order
§ Corporation Board Members
§ City Staff
§ Corporation Board Members
President Rick Boone called the meeting to order at 8:01 a.m.
II. Approval Of Minutes (October 7, 2003)
Tommy McCulloch moved to approve the minutes of October 7, 2003. His
motion was seconded by Ray Gonzales and Arthur Bea Williams, and unanimously
approved.
III. Review of Two -Way Radio Project
Matt Benoit referenced the handout of the executive summary of the contract, to
be provided to Council for review on June 1. He noted a needed correction on page 2:
$6,205,957 should read $6,228,735.
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4B Minutes — May 28, 2004 2
Tommy McCulloch requested information regarding the maintenance contract.
Mr. Benoit called it a "first response" system. He noted the new system will require more
oversight than does the current one. For instance, if an officer is assigned to a new
shift, the officer's assigned radio will need to be reprogrammed. Consequently, there is
a need for someone to oversee a good portion of the system. The vendor suggests the
City have an employee serve as a first responder in times of malfunction. That person
would perform a series of checks of the system, talking with the vendor via telephone. If
the first responder was unable to fix the problem, there are response times outlined in
the contract, depending upon the nature of the emergency. Dailey Wells will also
perform monthly and quarterly preventive maintenance tasks.
Mr. McCulloch asked if the request of the Board was to fund one year of the
$127,000 maintenance. Mr. Benoit stated the request is for the funding of two years.
Mr. McCulloch then asked how much is currently budgeted for maintenance.
Mr. Benoit stated it is approximately $60,000470,000, but there are a number of time
and material charges added on to that figure, increasing that figure to around $110,000.
Arthur Bea Williams asked if there would be a first responder for each shift.
Mr. Benoit stated no, there would just be one first responder, available for emergencies.
Jim Dockery added that this individual would serve on an on -call basis.
Mr. Boone asked the Police Chief and Fire Chief what would they like to see
included in this system that is missing. Chief Coughlin said that for the radio system
proper, it is fine, but in the future he would like to see mobile data terminals in the
vehicles. Chief Lindsey said it is far and above what the fire department has learned to
live with over the years. Major Gerald Todd added that an automated vehicle locator
system (GPS) for police vehicles would be a desired feature.
IV. Review of the 4B Financial Forecast
Mr. Benoit then discussed the financial report prepared on the Board's behalf.
Item one appears in June 2004. The beginning encumbrance of $1.1 million has
increased to $3.2 million, due to the cash obligation for the radio project.
Item two concerns the encumbrance total that is $2.9 million in July 2004, but
jumps to $4.2 million in August 2004. The jump represents approximately $1.5 million
for the cash obligation for the CAD and RMS. It is important not to have debt proceeds
in the bank drawing interest; rather, those monies should be spent to avoid the
arbitrage process.
Jim Dockery said, essentially, when bonds are issued, two years are allowed to
spend the proceeds. If after two years, the money is still in hand, calculations, normally
by an outside organization, have to be done. If the calculations show the money is
earning more than was borrowed, there is an IRS obligation to refund that money.
4B Minutes — May 28, 2004 3
Item three is the debt service payment. It is the first payment; future payments
can be divided in two.
Item four are the two payments for the radio project; $1.5 million in March 2005,
followed by a $625,000 payment in May of that year. The radio project is paid for at that
time, and the one -year warranty period begins.
Item five reflects the request of the Board to take on a portion of the radio
maintenance payments. The annual payment of $127,000 is the cost of the
maintenance when the warranty expires. The sum of $113,000 is the cost for software
maintenance for the CAD and RMS. The report shows the effect of the Board taking on
these expenses.
Mr. Benoit continued, stating the radio cost is less than the last time he prepared
a financial forecast for the Board. The CAD system is down $175,000 - $200,000. He
hopes more will be cut, as well.
He also noted that the ending encumbrance shown for October 2004 Is $4
million, while the ending balance is $6.6 million. The project capability is the difference
of the two, or $2.6 million. This is about as low as the Board gets in the forecast.
The Board expressed appreciation to Mr. Benoit for providing notes on the
financial forecast, for the ease it gives them in understanding the numbers now and,
and at some future date.
V. Consider Paying for and Revising the Two -Way Radio Project Budget
to Include Certain Maintenance and Operation Costs
This project was authorized in September of last year at a cost of $6.6 million
dollars. The total purchase price is approximately $6.205 million. Three years of
maintenance could be paid from the authorized project price at this point.
The first tier of maintenance is the three years after the warranty expiration. Tier
2, which is what the Board is being requested to pay, are years four and five (after the
warranty expiration), at $127,000 a year. This would cover the radio project through
year 2011.
President Boone questioned why this maintenance cost is not a line item in the
City's budget.
Mr. Benoit stated this is a large, complex system. It would certainly help the City
were the Board to take on this obligation, but acknowledged the Board needed to
decide if it was something they wanted to take on.
4B Minutes — May 28, 2004 4
Mayor Altman stated the maintenance fees could have been included in the
entire package cost, but he preferred being straightforward with the Board and keeping
it as a separate item. He also felt that since the City is incurring the cost of $50,000 for
the first responder position, it could come to the Board to request this additional
maintenance assistance.
President Boone stated it had been his concern that the City would buy this
product, and not be able to afford to maintain it.
Mayor Altman replied it would give the City time to plan for this cost in its budget.
The next two years of budgeting are going to be extremely difficult due to health plan
increases. In addition, the City will have to fund the first responder position.
Mr. McCulloch said the request sounded reasonable, and moved to approve the
sum of $127,000 for two years for maintenance of the radio project. Ms. Williams
seconded the motion, and it was unanimously approved.
VI. Consider a Presentation on a Proposed Fire Truck Purchase
Harold Lindsey stated the City wants to replace a 1969 model fire truck. It does
not have a ladder, and is not good for rescue purposes. It is 35 years old, and has
outlived its service life.
President Boone asked how often does the City have to perform a rescue. Chief
Lindsey replied approximately 3 -5 times per year. Jim Berzina stated the City also gets
above a fire to fight it.
Mayor Altman questioned the boom capacity on the truck. Chief Lindsey stated it
has a giant scissor boom. It operates on hydraulics, and is very slow. The replacement
truck has a ladder on which 4 -5 firefighters could go up and rescue several people.
The current truck is obsolete as far as getting replacement parts. The Fire
Department has two front -line trucks, 1985 and 1987 models. They are in the shop
about 1/3 of the time, so this unit is in front -line service a third of the time.
He would like to replace the truck with one that has a 100' reach (the old truck
has an 80' reach). Chief Foster added that the old truck has the capacity to spray 750
million gallons per minute, while the replacement truck sprays 1,500 to 2,000 million
gallons.
The cost of the new truck would be around $800,000 to $850,000, depending
upon variables.
Mr. Dockery noted the City has $300,000 set aside for the purchase of the truck,
which would help offset some of the cost. He noted the HGAC and other state
4B Minutes — May 28, 2004 5
cooperative pricing agencies have costs frozen until August. He anticipates that if it is
not purchased by August, the cost would increase $80,000 to $100,000, because the
price of steel has gone up 150% in the last eight months.
Mr. McCulloch asked the delivery timeline. Chief Lindsey said it would take about
a year, as it is a custom -built unit.
VII. Consider an Amendment to the Board's Fiscal Year 2003 -2004 Budget
for a Fire Truck
Mr. McCulloch moved, seconded by Mr. Gonzalez, to approve the expenditure of
$550,000, to be added to the City's earmarked funds of $300,000, for the purchase of a
new fire truck. The motion carried. Mr. Boone asked if Mr. McCulloch's motion was to
pay for the truck with cash, and Mr. McCulloch replied affirmatively.
VIII. Update on Computer Aided Dispatch and Records Management
System
Mr. Benoit stated that City staff has been in negotiations with Intergraph Public
Safety. They met early this year, and were far from agreement on critical issues. Since
that time, they have worked through many issues, such as liquidated damages, project
scope clarification, and the schedule for planning and implementation. He feels two
more sessions of negotiations will move the project along, and staff may be able to
bring it to the Board in August.
President Boone asked the cost for this project. Mr. Benoit stated it is a turnkey
operation, including costs for software maintenance, capital costs and hardware
(computers, servers, networking), estimated at $3.2 million.
Mayor Altman noted he was surprised when the initial proposal came in that it
was not a competitive price. He is concerned about the software maintenance costs per
year. Mr. Benoit stated not much time has been spent negotiating costs at this point.
The vendor has made some concessions on software maintenance based on an
agreement to lengthen the scope of maintenance.
Mr. Dockery stated the City is paying around $57,000 a year for Tiburon, at a
pace of a 5% increase each year for the next 5 -6 years. With this system, the staff was
able to negotiate a locked -in price for six years.
Mr. McCulloch stated the City is probably paying for that fixed price, as the
annual payment (were it not for the locked -in price) should be significantly less.
Mr. Dockery stated they had a higher rate, but came down when the City agreed to lock
in for six years. Mr. Benoit added that the vendor cut the annual escalation.
4B Minutes — May 28, 2004
IX. Consider an Amendment to the Board's Fiscal Year 2003 -2004 Budget
for Debt Service Payments
Mr. Benoit stated the amendment to the budget is nothing more than a
housekeeping item. He stated the debt was issued in October, but the current fiscal
year budget has not been amended to reflect that obligation. He recommends
amending the Fiscal Year 2003 -2004 budget to pay the debt service in an amount of
$933,776. Mr. McCulloch so moved, seconded by Mr. Gonzalez. The motion carried.
X. Other Business
The Board discussed nominations. Mr. McCulloch agrees to serve another term.
Ray Gonzalez and Benay Ayers are also up for reappointment, if they so desire. The
Board determined it is comfortable with two Councilors serving on the Board. There are
now three (Mayor Altman, Councilor Williams, and Councilor Gonzalez). Mayor Altman
stated he is agreeable to resigning from the Board, if new Councilor Gonzalez wishes to
continue to serve. He will discuss that issue with him.
XI. Adjourn.
The meeting adjourned at 9:03 a.m.
Linda Merrill
Recording Secretary
Rick none
President