SUPPORTS ITEM NO. 2
CS&B COMMITTEE AGNDA
JUNE 13, 1996
ADMINISTRATIVE REPORT
Date: June 5, 1996
Dept. File No. EOCC
TO: Standing Committee on City Services and Budgets
FROM: City Manager, on behalf of
Emergency Management Committee
SUBJECT: Emergency Operations and Communications Centre: Wide Area
Radio and CAD Systems
RECOMMENDATION
A. THAT in order to allow tendering to proceed this fall,
Council approve the expenditure of $23.5 million for the
development of the City portion of the wide area radio
system backbone, user equipment for Vancouver Police and
Fire, and the Vancouver portion of a replacement Computer
Aided Dispatch system for Police and Fire, with the
recognition that these costs will likely be financed by a
regional authority, and City share of the debt repayment
costs being in the range of $3.75 million annually.
B. THAT, in recognition that the costs for radio replacement
might be financed outside of the 1997-99 Capital Plan, but
with the City still being responsible for debt repayment
costs, consideration be given by Council to reducing the
overall size of the Capital Plan ($175 million), and that
this consideration happen when the Staff Review Group report
back on the Plan on July 23, 1996.
C. THAT, subject to the necessary financial approvals by other
agencies and agreement by other agencies to create a
non-share capital corporation to own and manage the wide
area radio system and provide related services, Council
agree to placing the operation and management of the EOCC
and the City Fire and Police dispatch operations under the
corporation.
D. THAT implementation of recommendation C be subject to
agreement by the users on appropriate cost- sharing and
operational management of the wide area radio system.
CITY MANAGER'S COMMENTS
The City Manager RECOMMENDS approval of A to D.
PURPOSE
This report:
1. presents status information on the EOCC and wide area radio
project, largely drawn from an information report prepared for
the Regional Administrative Advisory Committee and the GVRD
Board;
2. identifies further approvals required for the project to proceed
as presently envisaged;
3. provides additional information on these projects relevant to
Vancouver; and
4. requests Council approvals necessary at this time to proceed
further with the wide area radio system and consolidation of
dispatch operations under a special purpose agency proposed to
operate the wide area radio system and provide related services.
BACKGROUND
The Emergency Operations and Communications Centre project is a
significant multi-agency, cross governmental project which has
achieved multi-agency participation. A plan for the development of a
wide area radio system for emergency response agencies throughout the
south coast region of British Columbia, as well as municipal police,
fire and public works within the GVRD has proceeded in parallel.
These two projects address significant limitations in the existing
communications and emergency response capability in the GVRD.
On September 5, 1995 the Regional Administrative Advisory Committee
made a decision to support the allocation of available radio channels,
including those reserved for the GVRD, toward a regional radio system,
to be implemented initially by the City of Vancouver and the RCMP,
with other municipal agencies joining the wide area system as their
radio systems are replaced.
The RCMP is fully committed to the replacement of its radio system in
south western British Columbia, with the GVRD as the first phase of
that project. Staff from the Ministry of Attorney General have
strongly supported this initiative. Further approvals from the
province, the federal government,
the GVRD Board and the municipalities policed by the RCMP are required
to implement the first phase of the wide area radio system. If these
approvals are not obtained, the City can replace its own system
independently.
DISCUSSION
Introduction
Emergency communications in most of the GVRD and much of the
south-western area of British Columbia are inadequate on a daily
basis, and would be wholly inadequate in a major emergency.
- Most existing emergency radio systems are old and require major
upgrading. In many instances, they do not have the capacity
required to handle existing workloads - during peak periods,
emergency calls are stacked and only the most urgent traffic can
be handled. Some systems are unreliable, with significant down
time. In a significant earthquake, most radio systems and
dispatch centres would likely not be operable. These systems
have not been designed to current earthquake standards, and in
many cases depend upon highly vulnerable facilities. Even a
routine failure of a key component could bring down the entire
system.
- Police and fire units in one jurisdiction cannot talk to units in
another area. Because of radio incompatibility specialized units
such as emergency response teams, crowd control units, and dog
squads cannot function effectively in another jurisdiction,
limiting the potential for operating economies through sharing of
these resources. Even within most jurisdictions, fire units,
police units and engineering units cannot communicate with each
other in the event of a major emergency.
- Most existing systems do not have the capabilities considered
basic requirements for emergency communications systems.
Automatic vehicle location, mobile data capa-bility, and full
function terminals in emergency vehicles are key elements in a
modern system.
- Radio spectrum in this area is limited, and the present
utilization of this critical resource is very inefficient, with
most systems using old technology that allows some channels to
remain under utilized while others are over-loaded.
Most radio systems in the region will require replacement or
significant upgrading within the next few years. For critical life
safety services, this will not be optional. The RCMP have identified
the need to develop a new system for some time, as have many
municipal police and fire agencies. If the replace-ment of these
systems is not co-ordinated, using the most current technology to
maximize the use of scarce radio spectrum, agencies will be forced
onto different radio bands, making effective inter-agency
communication and efficient operation impossible.
Further, it is unlikely for cost reasons that municipally based
systems will provide the redundancy and capability to function in an
earthquake or major emergency.
At present, there is no viable capability for immediate emergency
response coordination within the GVRD in the event of a major
earthquake. The Provincial Emergency Program will establish a field
response centre, but setting this up and providing adequate
communications will take considerable time. Municipalities have one
channel for inter-municipal communication - an inadequate and
vulnerable capability. There is no capability to coordinate municipal
operations and no facility which can immediately begin to assemble
information on the status of the emergency, the condition of key
facilities, or the allocation of emergency response forces.
Municipalities, which provide the primary initial response, would have
great difficulty in communicating and co-ordinating with key agencies
such as hospitals, utilities, and the province.
Some of these concerns will be addressed in the Emergency Operations
and Communications Centre, which is now under development. Others can
only be addressed through a major upgrade of communications systems in
the region.
Emergency Operations and Communications Centre
The Emergency Operations and Communications Centre will provide the
capability to coordinate municipal responses and maintain critical
communications links to the Provincial Emergency Program, utilities,
hospitals, and other key agencies. The purpose built centre will be
built to current earthquake standards for emergency facilities.
Redundant links will be provided to the telephone system and radio
system. Backup satellite communications systems linking the centre to
participating agencies will be provided. Internal e-mail and data
management systems and video capability will provide effective
information handling capability in critical situations.
The EOCC will house the proposed radio system computers and at a
minimum will accommodate the Vancouver Fire and Police dispatch centre
and RCMP dispatch operations for its federal policing role in the
area, the Vancouver Emergency Operations Centre, the Provincial
Emergency Program Regional Office, a small disaster recovery centre
for the Port of Vancouver and Fraser River Port, and the Regional
Emergency Coordination Centre. It is being designed to accommodate
integrated Fire and Police dispatch operations for the entire area
under consideration, offering municipalities significant economies of
scale in both capital construction and operations.
The Regional Emergency Operations and Coordination Centre component of
the EOCC has been well received by government and private agencies
within the region. All municipalities in the GVRD are participating
with the exception of the North Shore municipalities (which have yet
to make a decision) and Richmond, which has indicated it does not
intend to participate. All the utility companies are participating,
as are the hospitals (through Vancouver Hospital, the primary trauma
centre in the region), BC Transit, the railways, the Ports of
Vancouver and Fraser River, and, through PEP, the key Provincial
ministries. Participation in the centre will provide these agencies
with critical access to information, and the ability to inform the
Province and others of their issues and requirements in an emergency,
as well as the opportunity to coordinate response activity and access
key resources.
A site has been selected for the EOCC at the corner of Hastings and
Rupert in the north east corner of Vancouver. This site provides
excellent road access to most of the region, and will have the
capability for helicopter access if road access is impossible. A risk
analysis which was undertaken prior to selecting this site confirmed
that local risks to the EOCC can be managed adequately. Rezoning for
the site is in process, with the public hearing scheduled for June
28th, 1996. Subject to rezoning, construction will commence in May,
1997, with completion in May, 1998. Opening of the EOCC will
represent a quantum upgrade in the ability of participating agencies
to provide effective response in a major emergency.
The EOCC and Regional Emergency Coordination Centre are independent of
the proposed wide area radio system. Links will be provided to the
communications systems of participating agencies, and the information
handling capabilities which will be provided will not depend on the
development of the radio system. However, day to day emergency
response and disaster response will be significantly enhanced if
both the EOCC and the proposed radio system are implemented.
Wide Area Radio
As noted above, existing radio systems in the region are for the most
part simply inadequate. Most must be replaced, and will be in the
near future. The question is how they will be replaced -- with a
modern, capable system providing region wide inter-agency
communication, efficient spectrum utilization, and enhanced
reliability and operating economies, or with a series of less than
adequate independent systems.
Coverage requirements for radio systems in the GVRD overlap. The
RCMP, in its role as a federal and provincial police force, requires
coverage throughout the entire region, as well as the municipalities
that it polices directly. A repeater located at a high point in the
UBC area to serve Vancouver will also serve the University area,
policed by the RCMP, and West Vancouver, policed by a municipal force.
A repeater on the Annacis Bridge to serve Vancouver will provide
coverage to much of Delta and Richmond. These are expensive
facilities, and duplicating them in independent systems cannot be
justified. Connections to repeater sites in many of the existing
systems rely on single links. In the event of a failure,
communication is lost. In a properly designed system, these
connections will be made through a "looped" system. A single failure
on the system will simply result in the signal being sent the other
way around the loop, with little if any loss of function. Again,
these are expensive systems, which should not be duplicated.
Perhaps most important, a single system allows maximum use of very
scarce radio spectrum. At present, most agencies in the region are
using systems which make very inefficient use of this scarce resource.
Users are divided between channels, and one channel may be idle when
another is heavily overloaded. Modern systems use computer technology
to assign conversations to channels, so that all channels are fully
utilized. Without this technology, it will not be possible to meet
the needs of all users within the radio bands normally used for
emergency communications. Some users will be forced into systems
where equipment for emergency services is not readily available, and
where full intercommunication between agencies and jurisdic-tions
cannot be provided.
A single system provides the capability to integrate dispatch
operations across agencies. At the moment, many agencies require
relatively modest dispatch capability. If half a dispatcher could
meet their needs, they must still keep one on duty, seven days a week,
twenty-four hours per day. If one and a half dispatchers are
required, they must maintain two. In an integrated system, these
functions can be consolidated. A full review conducted by staff
managing the existing Vancouver Police 911 (operated on behalf of the
GVRD) and dispatch operation shows that annual operating savings in
the range of $5 to $8 million could be realized if police and fire
dispatch operations were consolidated into one centre. Much of this
saving would benefit GVRD municipalities. In addition, senior police
and fire staff could be returned to line duties.
A single system facilitates inter-municipal services. Specialized
police functions like emergency response, crowd control, and dog
squads can be provided by a few agencies for the entire region.
Mutual aid between fire departments is enhanced and automatic mutual
aid becomes achievable. Significant savings and enhanced service can
be achieved.
Modern communications systems are expensive. The backbone for a
system to cover the area from Boston Bar to Pemberton to Sechelt to
the US Border would cost in the order of $ 90 million - the GVRD
portion would be in the order of $40 million. (These estimates provide
for traffic growth to 2008.) User equipment would be an additional
cost. However, the proposed system would provide:
- significantly enhanced coverage for emergency services
- high reliability
- agency intercommunication throughout the entire region
- the capability to transmit data to units throughout the region - advanced capabilities, such as automatic vehicle location and
report entry from the field
- the capability to consolidate dispatch operations, with
significant operating savings
- higher training and service standards in call taking and dispatch
operations
- the opportunity to create a single Computer Aided dispatch system,
providing economies for participants and access to critical data.
At the moment, Industry Canada has allocated the GVRD 60 channels in
the 800 MHz band for use by municipal agencies, excluding Vancouver,
Richmond, and the RCMP. Twenty of these channels are now in use; the
remainder are unused. Twenty five additional channels in this band
have been identified, which would provide sufficient capacity for
Vancouver to develop an independent system, but not the RCMP. These
channels have also been held by Industry Canada, pending a decision on
the proposed system. It is unlikely that these channels will be held
on a continuing basis if the present proposal does not proceed, given
the pressure for spectrum for other government and commercial users.
On September 5, 1995, RAAC made a decision to support the allocation
of the GVRD channels to an integrated system. If that decision is
confirmed by the GVRD Board, and the remaining channels which are
currently being reserved are allocated to the proposed spectrum
efficient system, the consultant analysis shows that the needs of all
emergency services in the proposed area and all municipal services in
the GVRD could be met.
The problems faced in this area are not unique, nor is the solution.
Technically, there is little scope for argument about the need to
provide highly reliable, high capacity systems for emergency services
which achieve a high degree of inter- operability, and maximize the
use of radio spectrum. The issues are financial and institutional.
The investment required is significant. A sensible system must cover a
number ofjurisdictions, cutting across boundaries and levels of
government. Typically, the processes required to reach agreement are
time consuming, and the opportunity to create an integrated system is
constrained.
Many areas are only now coming to the realization that this kind of
system is required.
San Diego and Imperial Counties in California are in the process of
implementing a single radio system for emergency services, municipal
users, and some state services, using technology essentially identical
to that proposed here. The area is similar, the number of potential
users is similar, and the requirements are similar. The costs are
also similar, and in their case, they are incorporating a number of
existing modern systems. In Louisiana and Colorado, state-wide
systems are being developed.
The immediate RCMP and City of Vancouver requirements for new systems,
and the need for major improvements to other systems in the near
future provide a unique opportunity to establish a sensible and
effective system now in this area, which will accommodate growth and
increasingly sophisticated communica-tions needs.
Purchasing such a large and complex system is a significant task. For
some parts of the system, there are a number of potential bidders.
For others, there are few bidders. A Request for Information has been
issued to potential bidders to determine their interest. A Request
for Proposals will be developed, based on information obtained from
potential bidders and the system requirements, to maximize the
effectiveness of the tendering process. Once bids are received, a
system implementation strategy can be developed and firm cost figures
confirmed.
Purchasing and installing the system will be a lengthy process. Even
with the accelerated schedule proposed, the first phase of the radio
system could not be installed until the fall of 1998.
Cost-Sharing
Allocating costs to users is a complex and contentious issue. To
carry out its federal and provincial policing role, the RCMP requires
a system across the entire area. Municipal users require different
capabilities within the municipality. Costs are affected by the area
to be covered and the nature of the terrain, and the number of users
and intensity of radio traffic. Ability to pay is a consideration,
particularly for sparsely populated areas.
City of Vancouver staff have developed a sophisticated, flexible model
which recognizes these factors. The weighting attached to a given
factor can be adjusted within the model. The model and a number of
possible weightings will be presented to a committee of the Regional
Finance Advisory Committee for review. Agreement on the most
appropriate approach to cost sharing will be sought from present and
potential future participants. Obviously, a "bottom line" for each
participant will be their cost for development of an independent
system.
Following the RFAC discussion, the cost-sharing model will be
presented to RAAC for its comments and recommendations to the GVRD
Board. The RCMP will enter into discussions with those municipalities
it polices directly.
Governance
System governance is also a challenging issue. System users will come
from all levels of government and many agencies. The coverage area
includes municipalities, Police Boards and a number of regional
districts. No existing agency, except perhaps the Province, has a
mandate which could fit naturally with the system proposed.
The Vancouver Police Board, the RCMP, and the Ministry of Attorney
General believe that they must be represented on the governing Board
of the agency which sets policy for the development and operation of
the system. This cannot be achieved under any existing agency. These
agencies will bear a substantial portion of the capital and operating
costs of the proposed system, and their requirement for representation
is reasonable. Therefore, a new governance model is required.
A review of potential models suggested that a non-share corporation,
created under Part 2 of the Canada Corporations Act, could be
structured to represent the interests of all the parties and protect
the interests of GVRD municipalities in utilizing the existing radio
spectrum allocated to them. The Corporation would be created with a
core set of bylaws establishing how Board members would be appointed
and the principles on which costs would be distributed, and the Board
would then establish policy and procedures (and new bylaws as
required) for the operation of the service. The terms of reference of
the organization would be restricted to the development and operation
of the communications system, related data management systems, related
dispatch operations, and related administrative processes. It would
have the power to borrow and to employ staff. It would levy system
users to recover its costs. Provincial legislation would authorize
municipal and regional participation in the system.
The proposed governance structure has not been fully developed.
Discussions with potential members will be required before the
structure can be finalized. However, a preliminary proposal has been
developed for purposes of discussion.
Under this proposal, to protect the interests of GVRD municipalities,
two classes of member would be established: original members and new
members. Original members would include the City, GVRD
municipalities, the RCMP, and Ministry of Attorney General. They
would be guaranteed access to the system. New members could only
obtain access to the system if their needs could be met without
compromising future access for original members.
Board members would be appointed or elected by members of the
organization. Depending on the wishes of the members, their
representative could be an elected or appointed official, a staff
member, or an individual. The RCMP, Vancouver Police, City of
Vancouver, and Ministry of Attorney General would have continuing
representation on the Board, as major users and funders of the system.
Other system users -- Police Boards and municipalities -- would
elect representatives on a formula; potential users would also elect
Board members. Users would be consulted on key issues, and would
advise their member of their views, but the Board member would not be
bound by their advice. Additional Board members could be appointed by
the Board for their expertise, but could not vote on some specified
issues.
In order to ensure strong representation from users, advisory
committees representing the interests of user groups - police, fire,
and municipal services -- would be established formally. The chairs
of these committees would constitute a policy advisory group to the
manager of the service, and would advise the Board of their views when
requested or when they deem it appropriate.
While the structure of the organization would not limit its ability
to hire staff to carry out related administrative functions, it is
envisaged that services such as labour relations advice, human
resource services, and accounting and payroll would be contracted from
existing agencies or the private sector.
Such a structure has a number of advantages. It represents all the
users, both in policy setting and operational concerns. It has the
potential to participate in public-private partnerships for financing
and development of the system if appropriate. As a special purpose
agency, it will have the expertise to deliver an effective and
responsive service to its members.
The special purpose agency should provide a complete service. After
extensive discussions between RCMP and City staff, both believe that
consolidated dispatch offers operational and financial advantages, and
both are prepared to recommend that their dispatch operations be
placed under the management of the proposed agency. While the radio
system and Emergency Operations and Communications Centre are separate
projects, there are strong linkages between the two. If the special
purpose agency is created, the EOCC should be placed under its
management. Recommendations in regard to the governance of its
dispatch function and the EOCC will be submitted to Vancouver City
Council shortly.
In addition, there may be financial and operating advantages in
including the 911 function under the agency. Currently, there are
four separate 911 functions within the area proposed to be covered by
the new agency. The creation of the backbone for the communications
system may offer alternative models for handling 911 calls and
management of the 911 function which are cost effective. The
potential benefits will depend on changes in the telecommunications
industry and the proposals received for the system, and the issue
should be considered at a later date.
RAAC struck a subcommittee which has considered alternative governance
models. While the subcommittee has not considered the details of a
governance model, it has endorsed the concept of a special purpose
agency to deliver these services. This position has yet to be
submitted to RAAC for endorsation.
Key Decisions
The RCMP, Vancouver Police, and Vancouver Fire are committed to
developing a replacement for their communications systems. These
systems must be replaced in the near future. The opportunity to create
a wide area system arises directly from these initiatives.
A number of key decisions are required in the near future. These are
set out below. The pressing decisions are agreement by the GVRD Board
to assign the channels currently reserved by Industry Canada for
regional municipalities to the new system and agency, and agreement by
RCMP policed municipalities to participate in the proposed system. A
report presenting recommendations in regard to these issues will be
presented to the GVRD Board and municipal Councils receiving RCMP
services before the end of July. Other decisions can be deferred
until additional information is available.
Decisions Required
Early decisions will be required from:
GVRD Board:
- endorsation of the RAAC decision to allocate the channels
currently reserved by Industry Canada for GVRD allocation to radio
users
- endorsation of the governance model, which will effectively
transfer channel management to the new agency
Vancouver City Council
- approval of costs to replace its system
- endorsation of the governance model and a commitment to place the
management of the EOCC and its police and fire dispatch operations
under the new agency.
RCMP Policed Municipalities:
- approval of the system and costs for each municipality
- whether to participate in a common dispatch system
Provincial and Federal governments:
- approval of costs for federal and provincial police functions
- formal endorsation of the governance model
Subsequent Decisions
GVRD Board:
- the desirability of transferring 911 responsibilities to the new
corporation
Non RCMP Policed municipalities
- decisions will be required by early 1997 from municipalities
wishing to implement the new system in the first phase.
- Participating municipalities will have to make a decision on
whether to participate in a common dispatch system.
Vancouver Issues
The EOCC will provide Vancouver with the required security for its
dispatch operations and the Vancouver Emergency Operations Centre, and
the presence of PEP and other agencies in the Regional Emergency
Coordination Centre will assist in a major emergency response.
However, the Vancouver radio system suffers from most of the concerns
identified in this report:
- The radio system is old and limited in capacity. Loading on the
police radio channels exceed the recommended limits, and
additional channels are not available. Police dispatch consoles
require replacement as soon as practically possible -- replacement
components are not available, and old fire consoles have been
cannibalized for parts. Fire system capacity is better, with the
recent addition of a second tactical channel, but much of the
equipment is old and in need of replacement. Engineering
department would like to expand its use of radios to increase
operating efficiency, but channels are not available in the VHF
spectrum.
- The system does not approach proper seismic standards. The system
backbone will not resist a major earthquake and is not redundant,
making it very vulnerable to interruption.
- The City's CAD (computer aided dispatch) system was one of the
first in the country. Its software is old and extremely expensive
to maintain or update -- few people in the supplier's organization
are competent to program it. It will not handle
multi-municipality dispatch. The data terminals will only handle
character information, and are no longer made. (The City
purchased the remaining available terminals from the supplier some
years ago.)
- The capability to communicate between agencies is extremely
limited, within the City and with adjacent municipalities.
- The system cannot provide automatic vehicle location, and the
capability for secure (encrypted) communications is limited.
The radio system requires replacement and upgraded capability. While
problems and service interruptions have been very limited to date,
this cannot be expected to continue unless the systems are upgraded.
This has been under discussion for some time, but the key factor which
has forced delay is precisely the issue which the wide area radio
system proposal addresses -- ensuring compatibility and
intercommunication with other systems. The strong support for the
wide area proposal from the RCMP makes it possible to resolve this
issue for the first time. As a result of the work which has been done to date on the radio
proposal, we now know that we can replace the Vancouver system with a
system which operates in the public safety band independently of other
municipalities. In many ways, this would be the simplest approach,
since the institutional obstacles to achieving coordination across a
number of agencies are significant. However, we are recommending that
Vancouver continue to pursue a wide area solution.
From an overall perspective, a wide area system offers three benefits:
inter-operability within and across agencies; potentially
significantly reduced costs through dispatch consolidation; and
reduced capital cost for the system "backbone". Vancouver already
operates its call taking and dispatch functions at a scale which
limits benefits to the City from consolidated dispatch. However, the
City would benefit from reduced capital costs from a wide area system,
and would benefit significantly from the operational enhancements.
These benefits suggest that the City should continue to pursue a wide
area system unless it is clear that other agencies cannot (or do not
choose to) provide the necessary approvals. In this event, the City
should proceed to replace its own system.
Governance
As noted above in this report, a wide area system cuts across agencies
and levels of government and raises a question of system ownership and
governance. RCMP, Vancouver Police, City staff, and Ministry of
Attorney General staff support the creation of a new special purpose
agency to own and manage the system. City staff recommend that the
City approve placing its dispatch function under the management of the
proposed agency, subject to the necessary approvals being obtained
from other agencies and appropriate agreements for cost sharing.
Vancouver Budget and Radio Replacement Program
The conceptual design and estimates provided by our consultants and
work by City staff suggest that the City's share of a regional radio
system backbone and CAD system would cost in the order of $13.5
million, and that minimum user equipment for
Police, Fire, Engineering and Parks would cost $9.0 million. There
will be an additional $1.0 million building costs, due to program
changes. Total costs would be $23.5 million. However, these
estimates cannot be confirmed precisely until bids are received and
evaluated and cost sharing discussions are finalized. These figures
contain significant contingencies and allowances for taxes which may
be unnecessary if attractive bids are received and the new
organization is created with a tax status which appropriately reflects
its federal-provincial component. If bids are higher, we propose to
phase the system, with Fire and Police being implemented now, and
Engineering and Parks in a subsequent capital plan.
If Vancouver must proceed with an independent system, the cost of the
backbone and CAD system will increase, forcing a minimum
implementation program for Police and Fire, with further
implementation in the next capital plan for Police, Fire, Engineering,
and Parks.
Before any funds are committed, detailed reports on the system costs
and configuration will be provided to Council.
Financing the Replacement Plan
As noted, the total cost of the replacement program, if carried out as
part of the regional proposal, would be $23.5 million. If debt
financed, the annual repayment costs would be approximately $3.75
million. If this $23.5 million were to be accommodated within the
$175 million total 1997-99 Capital Plan, it would significantly
squeeze other capital works and would have detrimental impacts on the
City's infrastructure. If, on the other hand, the $23.5 million were
financed outside the Capital Plan, the debt repayment costs would have
to be provided for in the City's Operating Budget, resulting in a 1%
tax increase over and above normal inflation costs.
However, funding will have to be found for a replacement system if
capacity and operational requirements for this essential life safety
function are to be maintained at an acceptable level. Further, it is
difficult to implement such a system change piecemeal -- the new
systems are incompatible with the old systems, and phasing is only
possible on a departmental basis, and even that is undesirable.
In the end, if the governance model is approved, it is unlikely that
the City will actually borrow the money. It is likely that if
structured properly, the new agency could find private funding at
favourable rates, and the system would be charged to the City on an
annual basis. This would have the further advantage of annualizing
these significant costs, so that the system would be upgraded and
replaced at appropriate intervals.
However, the assumption of a continuing financial commitment has the
same affect on the City budget as borrowing -- it represents a
continuing financial obligation which limits other expenditures or
generates tax increases over and above the rate of inflation. We
recommend that Council approve the replacement program for radios,
recognizing the annual debt repayment costs of $3.75 million, and that
Council review the 1997-99 Capital Plan proposals to assess whether
the $175 million Plan can be reduced to offset this cost increase.
A commitment by Council is essential to allow the tendering process to
proceed. Some bidders will spend substantial sums preparing bids, and
Council's approval at this time is necessary to provide an assurance
the City's intent to proceed.
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