HomeMy WebLinkAboutResolutions - 2013.04.17 - 20772MISCELLANEOUS RESOLUTION # 13077 April 17, 2013 BY: FINANCE COMMITTEE, THOMAS MIDDLETON, CHAIRPERSON
IN RE: ESTABLISHMENT OF OAKLAND COUNTY 9-1-1 CHARGE RATE (FORMERLY TELEPHONE
OPERATING SURCHARGE) FOR THE PERIOD JULY 1, 2013 TO JUNE 30, 2014
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
WHEREAS the County has created and operated an interoperable public safety radio
communications system for over a decade for the benefit of the local law enforcement, fire, emergency
medical services, hospitals, homeland security and other operating purposes; and
WHEREAS the County constructed this radio communications system through a 9-1-1 charge on
wireless and wireline telephones as defined by Michigan statutes (such billing approach on telephones
has now been expanded to 'devices' that can be used in the 9-1-1 calling for emergencies, as defined);
and
WHEREAS the Michigan statutes requires that county boards of commissioners annually approve
the 9-1-1 charge rate for the fiscal year period from July 1 through June 30 each year (including the
period under consideration of July 1. 2013 through June 30, 2014 relating to this resolution); and
WHEREAS the State requires that a certified copy of the board of commissioners resolution be
submitted to the Michigan Public Services Commission no later than mid-May of each year covering the
ensuing July 1 through June 30 fiscal year; and
WHEREAS the County's 9-1-1 charge rate is $.20 per month per device as defined by Michigan
statutes and is well below the authorized limit; and
WHEREAS an attached memorandum dated April 1, 2013 from the County Administration
covering the financial, programmatic, and capital status and needs of the Radio Communications Fund for
the funding period July 1, 2013 through June 30, 2014 has been prepared; and
WHEREAS the attached memorandum has recommended a continuation of the 9-1-1 charge rate
of $.20 per month per device as defined by Michigan statutes; and
WHEREAS the operating budgets adopted by the Board of Commissioners in September 2012
for the FY-2013, FY-2014 and FY-2015 operating periods contemplated the use of a 9-1-1 charge rate of
$.20 per month per device as defined by Michigan statutes; and
WHEREAS the Radio Communications Oversight Committee reviewed the attached
memorandum, unanimously approved and recommended the continuation of the 9-1-1 charge rate of
$.20 per month per device as defined by Michigan statutes to the County's Board of Commissioners
through an electronic vote during the week of March 25, 2013.
NOW THEREFORE BE IT RESOLVED that the County's Board of Commissioners hereby
approves the 9-1-1 charge of $.20 per month device as defined by Michigan statutes for the period July 1.
2013 through June 30, 2014.
BE IT FURTHER RESOLVED that the forthcoming operating budgets for the period from July 1,
2014 to September 30, 2016 be based on the $.20 per month per device as defined by Michigan statutes
(to be reviewed and adjusted as considered appropriate by the Board of Commissioners annually as
required by Michigan statutes in periods beyond June 30, 2014); such use of a $.20 per month per
device, as defined, requires no adjustment to the operating periods through September 30, 2015.
Chairperson, on behalf of the Finance Committee, I move the adoption of the foregoing
resolution.
FINANCE COMMITTEE
FINANCE COMMITTEE VOTE:
Motion carried unanimously on a roll call vote with Quarles absent.
COUNTY MICHIGAN
L. BROOKS PATTERSON, OAKLAND COUNTY EX UTIVE
FROM: Bob DadOlow
TO: Finance Committee
Radio Oversight Committee
Mike McCabe
Phil Bertolini
Laurie VanPelt
Jamie Hess
Jeff Werner
Pat Coates
Holly Conforti
Shawn Phelps
Robert J. Daddow
Special Projects Deputy County Executive
SUBJECT: Radio Project Status and Cash Flow / Equity at December 31, 2012 —
Proposal for 9-1-1 Charge (e.g. Telephone Operating Surcharge) Rates
For July 1,2013 to June 30, 2014
DATE: April 1,2013
The State statutes associated with the "9-1-1 charge" (e.g. telephone operating surcharge)
require that County Board of Commissioners approve the fee on an annual basis for each
fiscal year ending June 30 — in this case, for the period from July 1, 2013 through June
30, 2014. The funding provides capital and operating support for the County's public
safety radio communications system operated on behalf of the County's Sheriff's Office,
local units of government's police, fire and emergency medical services, 'hospitals and
other related parties. The resolution approving the telephone operating surcharge by the
Board must be submitted to the State no later than mid-May.
Oakland County has a S.20 per wireline / wireless device as defined charged to Ity users for the period July 1, 2012 through June 30, 2013. in addition, the Radio
Communications Fund receives funding from a State distribution, towerfees and a few
other miscellaneous revenues. The principal locally controllable revenue source is the 9-
1-1 charge (fee) approved annually by the Board of Commissioners.
On a quarterly basis, the County administration issues a letter of transmittal covering the
quarterly operating results, financial statements and explanatory comments for the Radio
Communications Fund. No current, significant capital expenditures are being made, but
several are contemplated in the near future as discussed herein. The report for the quarter
ended December 31, 2012 is attached as Exhibit A. The report was previously sent to the
D<ECUTIVF OFFICE BUILDING 41 WEST • 2100 PONTIAC LAKE RD DEPT 4(6 * WATERFORD MI 44332B-0409 (248) 858-1650 FAX (248) 452-9215
EMAIL: deddowr@ oakgov.com
Finance Committee and Radio Oversight Committee along with quarterly financial
statements of other CLEMIS operations.
This memorandum covers the financial status of the Radio Communications Fund and its
capital and operating needs into the next several years relating to the needs associated
with the 9-1-1 charge (fee), as \veil as issues not known at the time the attached financial
statements as of December 31, 2012 were prepared. it will be the basis for the
recommendation of the 9-1-1 charge (fee) for the period July 1, 2013 through June 30,
2014.
RADIO COVERAGE PROJECTS
The County's radio communication system has been fully operational for several years
with the last public safety agencies becoming operational in the fall of 2010. Since that
time, the County has enhanced the radio communication coverage by constructing or
acquiring lease space on a dozen tower sites. Most of the radio coverage projects are
now completed. It is presently anticipated that no significant funding will be required on
completing the improvements necessary in the radio communications coverage.
At present, the radio communication system has 51 towers (County owned, locally owned
by governmental units within the County or leased space from private vendors), 1,987
mobile radios and 4,149 portable radios on use. Radio consoles are located in 23 public
safety dispatch centers (PSAPs) throughout Oakland County. There are 14 hospital
emergency rooms tied to the County's radio communication system and a number of
private ambulance companies as well.
NG-911 Project Needs
The County acquired new call-taking equipment (NG-911 Project) on behalf of most
local public safety dispatch centers. Several dispatch centers chose not to avail
themselves of the opportunity to upgrade their aging equipment. Presently, only Lake
Orion and Oxford have the outdated equipment in use. The last time the County acquired
call-taking equipment on behalf of the local dispatch centers, the useful life was
approximately 10 years before parts were unavailable for repair. The dispatch centers not
moving to the NG-911 equipment have been operating for approximately 13 years using
the older equipment. No service contract exists relating to this old equipment.
Based on the County's funding arrangement with the local units of government, th e County set aside restricted equity for the funding of the remaining dispatch centers
should they decide to upgrade this equipment; such amount is $30,000 arising from a
current review of the remaining local units who have yet to convert to the newer
equipment.
Radio Consoles
Because the County distributed the radio consoles located in the dispatch centers first
(circa 2003 through roughly 2006), this equipment is aging rapidly. Replacement will
need to occur in the next year or two. While the County has yet to assemble an estimated
cost of the replacement of this equipment based upon a formal study, the cost could
approach 54 million to $6 million, depending upon the number of dispatch centers
remaining in Oakland County at the time of replacement. The original deployment of
consoles cost roughly $5,9 million for 31 dispatch centers. There are now 23 dispatch
centers. Presently, there are no active discussions in the consolidation of dispatch centers
in the County.
The difficulty in calculating the amounts needed to be set aside for a console repiacemeri program involves several factors:
The recently-adopted State policy on encouraging local units of government to
consolidate services brings into question just how many dispatch centers will need
to be outfitted with new consoles at the time of replacement. Prior attempts by
the Legislature have been made to force local units to combine dispatch functions.
There are no known local movements towards dispatch consolidation at this time.
Technology costs generally decline over time. The original consoles were
deployed from 2003 through 2006 — meaning they have been in use for 7 to 10 years.
Some of the original costs were likely one-time installation and start-up costs not requiring replacement. The one-time costs would have included the Counry's
issues with a radio vendor involving installations and parts that failed, as well as
other matters. These costs would likely not recur in a future installation. There is
no way of assessing how much of the $5.9 million may have been related to these
one-time installation costs.
The Sheriffs Office is reaching its facility capacity without moving the dispatch
operations to another site. While certainly a few smaller dispatch center
operations could be consolidated into the Sheriff's operations, any sizable
dispatch operations may be too large to consolidate absent a change of venue.
There is no current plan to secure additional space in the Sheriffs Office dispatch
to accommodate a larger dispatch center,
At December 31, 2012, the equity in Exhibit A reflects $3.5 million set aside to address
this equipment replacement in the next 18 months or so. Additional reserves will be
necessary in the coming quarters as well to build up the assets necessary to replace these
consoles without seeking the issuance of debt instruments.
It is the intention of the County administration to move the first $500,000 of unrestricted
equity each quarter until such time as the amount reaches $5.0 million or a better estimate
can be determined.
Mobile / Portable Radios
Recently, County administration was notified that the radio communications vendor will
no longer support the mobile and portable radios at the end of calendar 2017. The
County's radio communications system is the life-blood of public safety
communications. Having portable and mobile units not supported by the underlying
vendor could be problematic (of course, an assessment of this matter would have to be
made circa 2016 / 2017 to determine if the hardware truly needs replacement).
At this time and assuming that a future assessment would require replacement, the
aggregate original cost of the mobile and portable radios as of December 31, 2012 was
$17.36 million. The County has restricted equity relating to depreciation in the amount
of $10.8 million as of December 31, 2012, but needs to continue to set aside funds over
the next 4 to 5 years to ensure that there is sufficient available resources to replace the
mobile and portable radios in 2017 so as to avoid significant increases in the operating
surcharge at that time or issuing debt.
Because the County has been informed that the portable and mobile radios will not be at
the end-of-life at the end of calendar 2017, the depreciation schedules will be adjusted to
reflect that all of this equipment would be fully depreciated no later than December 31,
2017. Purchases of future portable and mobile radios will be measured against the
knowledge that they may have to be replaced in roughly 5 years.
Computer-Aided Dispatch Protect
The County's computer-aided dispatch center equipment software for CLEMIS is being
re-written as the vendor-acquired software is no longer easily maintained and th e software licensing to maintain this equipment is very costly. The County has recently
started this project. The estimated cost of this project is $3.5 million and will be funded
out of the Radio Communications Fund with $3,353,000 remaining to be expended in
restricted equity. The original projected funding need will be evaluated over the next
several quarters as the project evolves. Presently, the amounts set aside are considered
adequate to complete the project.
Garage Facility
The County administration requested and the Board of Commissioners recently approved
the expansion of the garage facility for additional needs for vehicle repairs to be funded
by the Motor Pool Fund and the Radio Communication Fund ($630,000 as the Radio
Communication Fund's snare) based on usage of the anticipated square footage of the
expansion. The funding for the radio communications facility addition arises from tower
revenue since 2010 for those towers other than the ones built with 9-1-1 charge (e.g.
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telephone operating surcharge) revenues. As such, the amounts are to be expended in the
FY-2014 County fiscal year with completion likely through mid-calendar 2014.
SUMMARY OF EQUITY AND PROJECTS' RESERVES
The ending equity has been classified as 'unrestricted' in Exhibit A as of December 31,
2012. The components of the Radio Communications Fund equity follow (as adjusted in
the attached letter of transmittal):
Designated for 911 IP - remaining communities: $30,000.
Funding of depreciation: $10,830,342 in accumulated depreciation (equal to the
accumulated depreciation).
PSAP software implementation: $3,500,000, less costs incurred during the quarter
of$146,343 for a net remaining amount of $3,353,657.
Console replacement - $3,500,000. Roughly $500,000 quarterly is being set aside
for this need until the amount reaches -$5.0 million or a better estimate is obtained.
Total designated equity of $17,758,999 as of December 31, 2012 as adjusted by
reference in the attached Exhibit A and herein.
Undesignated as adjusted of $359,816 as of December 31., 2012 before
considering the need for the funding of the facility expansion (such additional
costs will likely have to come from other presently designated equity to be
analyzed when the March 31, 2013 quarterly close occurs).
Total equity for the Radio Communications Fund is $18,153,815.
REVENUE / OPERATING ANALYSIS
The County operations are largely funded from two sources: 9-1-1 charges (e.g. fees and
formerly called 'telephone operating surcharge') imposed on County residents and
businesses at $.20 per communication device per month, as defined. In addition, there is
a companion State-wide fee charged to all State residents and allocated back to the
counties on a set funding formula. Only the County-imposed 9-1-1 charges (fees) can be
adjusted by the Board of Commissioners for the fiscal year ended June 30, 2014.
The annual amount of the surcharge revenue for the year ended September 30, 2012 was
$6,367,035, of which $6,298,837 applied to the State and County 9-1-1 charges (fees).
The two components are: State 9-1-1 charges (fees) of $2,246,772 and County 9-1-1
charges (fees) of $4,052,065. At $.23 per device per months for the first nine months of
FY-2012 and 5,20 per device per month for the last three months, the calculated annual
dollar benefit of a penny on the fees is $182,782.
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The quarter ended December 31, 2012 reflected surcharge revenues of $1,192,773 against
an operating budget for the quarter of S1,492,035 - for an unfavorable variance of
$299,262. The unfavorable variance is considerably larger than anticipated. Potentially,
it relates to further erosion of the IP telephone services and / or telephone customers
using prepaid telephone services that exclude the State's surcharge fees. The cause of
this unfavorable variance cannot be determined nor can the County administration
determine if the revenue will continue to remain at a lower level than budget, or if this is a one-quarter anomaly.
Over the last several years, the County's radio shop relied heavily (and to a lesser extent
in recent years) on outside consultants to assist in maintaining the County's radio
equipment. During the past several years, the County invested heavily in County-
employee training such that the reliance on outside consultants and repair shops could be
avoided. In late FY-20I2, the radio shop now is responsible for maintenance; such
reliance on in-house efforts should help in controlling this operating cost.
The County's Radio Communications Fund has financially assisted local units when
dispatch centers were consolidated. The assistance involves the acquisition of equipm ent and software, technical consulting support, networking, movement of equipment and
similar costs eligible under State statutes to be charged against the operating surcharge
revenues. The County's return on this consolidation will be to avoid future equipment
replacement and a reduced overall maintenance cost through fewer dispatch locations. At
present, there are no known consolidations under consideration.
In December 201.2, the State imposed new minimum qualifications on dispatch personnel
that may be difficult for the smaller dispatch centers to honor, particularly when
temporary duty police officers are used as dispatchers. While there would be no
immediate need to consolidate as the local units grapple with these new standards, it is
highly likely that the smaller dispatch centers, facing sanctions from the State, may
choose to consolidate dispatch centers with surrounding communities or the Sheriffs
Office.
The FY-2012 operating statements indicate an operating loss is being incurred for the
FY-2012 of $1.5 million; however, much of this loss was created by the non-cash
depreciation expense of $4.4 million (essentially the difference between these two
amounts would largely be related to the funding of depreciation set aside in a reserve
within equity as noted above). The depreciation expenses are non-cash transactions
based on the capital costs of equipment acquired in prior years. No outstanding debt has
been issued against these assets. Essentially, the funding of a portion of the deprecation
should assist in future capital needs of the Radio Communications Fund.
The quarter ended December 31, 2012 had an operating loss of $591,000; however,
depreciation charged for the quarter was $976,000. The amount of positive cash flow
arising from the funding of depreciation (estimated at $385,000 for the quarter - $976K,
less $591K) is being adversely affected by the unfavorable variance of the surcharge
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funds cited previously. The 'positive' cash flow may have declined but it is still
providing resources to be set aside for future capital needs.
OPERATING SURCHARGE FOR JULY 1, 2013 TO JUNE 30, 2014
The County's Framework report has cited that a 20% equity level would be needed in
most funds. While a decent benchmark for most County funds, it does not work well for
the Radio Communications Fund given the sizable and periodic capital needs.
For example, in approximately 18 months the County will be required to replace radio
consoles at a cost of between $4.0 million and $6.0 million. The County is currently
setting aside reserved equity arising from the funding of the depreciation up until that
time so that the equipment can be replaced. Once the consoles are replaced, the equity
will fall precipitously and the funding of the depreciation on the new equipment will
commence. Equity positions will be impacted even more so with the replacement of the
mobile and portable radios circa 2017.
On-going operations and maintenance costs relating to this Fund are relatively constant.
Other than the capital needs as discussed in this memorandum, no amounts need to be set
aside that cannot be addressed out of the operations and maintenance component of the
Fund. As such and because of the substantial periodic capital needs in the coming years,
the 20% equity target is not germane for this Fund. Rather the adequacy of cash should
drive the operations and setting of the 9-1-1 charge (fee) rate.
The operating budgets for the Radio Communications Fund are based on the $20 per
device per month, as defined, as the principal revenue source for the FY-2013 through
FY-2015 budgets adopted by the Board of Commissioners. The operating budgets reflect
a 'planned use of equity' of $3.93 million annually for each of the three years, but the
actual operations for first quarter of FY-2013 would suggest that the Fund's operations
are much more favorable than the adopted budgets even with the sizable unfavorable
variance of the surcharges as noted previously.
Projecting the quarterly operating loss out for the rest of the year on a straight-line basis,
the operating loss would be $2.36 million. The difference between the FY-2013
depreciation charged to operations and the operating loss would generate a positive cash
flow of approximately $1.57 million; such amount is considered adequate for future set
asides in equity in order to have sufficient cash when capital is replaced.
SUMMARY
Given the above assumptions and concerns and the financial status of the Radio
Communications Fund as of December 31, 2012, the 9-1-1 charge (fee) rate of $.20 is
adequate to address future operating and capital needs over the period July 1,2013
through June 30, 2014. In addition, the $.20 rate should be used for the revenue base of
the Radio Communications Fund for the FY-2013 through FY-20l6 operating budgets
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based on current projections (such projections would be analyzed annually in connection
with the Board's responsibility for setting the 9-1-1 charges rate each spring).
Note — during the week of March 25, 2013 an electronic vote was taken of the Radio
Oversight Committee members. The Radio Oversight Committee voted unanimously
(12-0) to approve the $.20 per month per device, as defined, and recommend the 9-1-1
Charge (Fee) to the County's Board of Commissioners. With sufficient votes having
been received, this memorandum is now finalized and has been incorporated into the
Board resolution being sent to the Finance Committee on April 11, 2013.
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FINANCIAL STATEMENTS
RADIO CO UNICATIONS FUND OAKLAND COUNTY, MICHIGAN
Quarter Ended December 31, 2012
EXHIBIT A
L. BROOKS PATTERSON, OAKLAND COUNTY EXECUTIVE
COUNTY b,IICHICAN
Robert J. Daddcw
Special Projects Deputy County Executive
TO:
DATE:
Radio Oversight Committee
Jamie Hess
Jeff Werner
Pat Coates
Steve Murphy
Holly Conforti
Shawn Phelps
Bob Daddow
Radio Communication Fund — Financial Statements and Schedules
For The Quarter Ended December 31, 2012
February 20, 2013
FROM:
SUBJECT:
This letter of transmittal covers the financial staternents-as of and for the quarter ended
December 3 -1, 201 -2 for the Radio Communications Fund. Attached are the following
schedules described as:
0 Statement of Net Assets (Exhibit A). This statement provides the assets,
liabilities and net assets (e.g., equity) of the Radio Communications Fund.
Statement of Revenues, Expenses, and Changes in Net Assets (Exhibit A- ), This
statement compares the adopted budget to actual operating results.
Operating Transfers in and Out (Exhibit A-2) - the operating transfer in and out to
the General, CLEMIS Operating, and Information Technology Funds represent a.
cost reimbursement for the administrative and other support of the radio
communications project and operations as herein explained and the Fund's cost
reimbursements for services acquired from other fund operations.
0 Brief Explanations (Exhibit A-3) --represents a set of explanations of operating
budget to actual variances included in the financial statements and schedules
above.
Comments on some recent events surrounding the Radio Communications Fund:
• The radio communications system is Idly operational with 5,500 portable and
mobile radios on-lint, as well as PSAP dispatch stations.
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The County has evaluated radio coverage and is working on resolving the
additional investments (e.g. 'holes') discovered. Many radio coverage 'holes'
have been filled in with additional efforts underway for a few more 'holes.' The
County is working closely with the local units of government in identifying radio
coverage needs and enhancing the radio communications system.
in the next several months, the County will be working on improving coverage
inside the County jail through microwave technology (e.g. 'line of sight') from
the tower located at Oakland 196 to the County Court House and onto the County
jail. While the County used 'line of sight' technologies in the old radio system, it
required towers ranging in the 250 to 400 foot range; such towers were
unacceptable to the communities. This approach will test current technologies in
certain limited situations and help to resolve a perceived issue within the County
jail. Because of FCC approvals on the microwave technology, the time frame for
completion of this project cannot presently be determined.
The County was notified in February 2009 that the re-banding effort should be
completed no later than June 30, 2009. Substantial discussions have occurred
over the past several years on this matter with the FCC providing a notice to the
County that it needs to proceed on the re-banding efforts. The County is in
compliance with the FCC requirements.
The County is presently in the final stages of the re-banding efforts, The contract
with the technical advisor (required under the FCC rules) has now been signed.
Presently, radio systems surrounding the County must first proceed in moving
their frequencies before the County can finalize its project. This County is
expecting that the re-banding effort will be completed by the summer or fall of
calendar 2013.
Recently, the County was notified that the current radio mobile and portable radio
equipment will not be supported after December 31, 2017— the end of life time
frame. As such, the County must begin the process of setting funds aside for the
eventual replacement of this equipment in FY-2017 or shortly thereafter. At
roughly 54,000 per radio unit with 5,500 units in the field, the cost of this
replacement could be in the range of 522.0 million. By the time that the end of
life occurs, the equipment will be fully depreciated with the respective funding
contained in the Radio Communication Fund equity.
Comments concerning the financial information follow:
The Fund has approximately 517.5 million in cash, investments, and receivables,
net of liabilities and excluding prepaid expenses / inventories at December 31,
2012.
The ending equity has been classified as 'unrestricted' in Exhibit A. However,
the components of the equity follow (rounded):
o Designated for 911 IP — remaining communities: $75,000.
o Funding of depreciation: $10,830,342 in accumulated depreciation (equal
to the accumulated depreciation on the radio system taken to date).
o PSAP software implementation: $3,500,000, less costs incurred during the
quarter of $146,343 for a net remaining amount of $3,353,657.
o Console replacement - $1,500,000. The County is still gathering the cost
of replacing the consoles. Consolidation of PSAPs, should they occur,
would mitigate this cost. Likely, the replacement will occur in FY-2014
and could approach $6.0 million should consolidations not occur.
The amount presently recorded in the designation represents $1.5 million;
such amount was adjusted:in the final quarter of FY-2012 to $3.0 million,
but not reflected in the amounts contained in Exhibit A. For this quarter,
another 5.5 million has been set aside bringing the adjusted designation
relating to this project to $3.5 million as of December 31, 2012.
o Total designated as presented of $15,758,999, plus theadjustments of
$2,000,000 relating to the console replacement bringiog theDecember 31,
2012 adjusted balance to 17,758,999.. .
o Undesignated as reflected on Exhibit A -is $2,314816, less adjustments
noted above for a net amount of $314,816 as of December 31, 2012.
o Total equity unrestricted = $18,153,815.
As referenced in Exhibit A, professional services and software purchases were
incurred and charged to operations during the interim fiscal year, providing an
unfavorable variance in both expenditure line items for the computer-aided
dispatch project. At year end, the County will review the amounts incurred and
charged to operations for the CAD project that should be capitalized onto the
balance sheet, thus eliminating the unfavorable variance from operations, The
County is targeting the launch of a pilot site for the CAD re-write no later than the fall of 2013.
Based on the closed and now adjusted Radio Communications Fund operations as of
December 31, 2012, the County can begin the process of developing the telephone
operating surcharge (fee) for the period July 1,2013 through June 30, 2014 as required
under State statutes. No later than mid-May 2013, the Board of Commissioners will be
required to set the fee for the next fiscal year. The analysis will be prepared in March
2013 for consideration by the Radio Oversight Committee and the Board of
Commissioners thereafter.
Recently, the County developed a tentative 9-1-1 radio communications plan that
modified the previous plan (last plan was passed in the late 1990s). The County will
brought the tentative plan to the Radio Oversight Committee in mid-September 2012;
such Committee approved the tentative plan. At that time, the Radio Oversight
Committee indicated that the process with the Board of Commissioners and local units of
government approval should start in the first quarter of calendar 2013. The plan will be
considered by the Finance Committee on February 28, 2013.
The County received a letter, along with instructions, to perform an audit of the 9-1-1
operations in accordance with State statutes. This is the first such time a request was
made by the State. Unfortunately and based on my prior experience and discussions with
the County's outside auditor (Plante & Moran) the instructions — at best — are confusing,
conflicting and not close to complying with the professional standards that must be
followed by auditors in order to retain their CPA license, In short, the State's instructions
cannot be followed by respectable auditors adhering to professional standards.
The State has set an arbitrary deadline of mid-May 2013 to be completed with the audit.
Unfortunately, they have suggested that it entail a financial audit, compliance audit and /
or agreed-upon procedures report - all of which involve different, specific sets of
procedures. In short, there is no way to conduct an audit without proper instructions by the State.
Accordingly, a memorandum was sent to the Michigan State Police in November 2012.
A meeting was held in January 2013 and the IvISP representatives concurred. with the
.issues raised by Oakland County. The audit requirement has been postponed pending a
comprehensive review that corriplis with State statutes and enables external auditors to
properly report thair findings. A meeting with interested parties has been set in late
February 2013 with the hopes of resolving this issue Shortly thereafter. Regardless of
how it is resolved, there will be some new audit requirements .imposed on the County
relating to the Radio Communications Funds albeit yet to be defined.
Should there be any questions concerning the above, please contact me,
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0,585,770.20
26,315,176.36
12,83,7,71.50
County of Oakland
Radio Communications Fund
Statement of Net Assets
December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents
Accrued interest on investment
Due from other governments
Accounts receivable
inventories
Prepaid items
Total current assets
Noncurrent assets:
Tower rights
Equipment
Structures
Less accumulated depreciation
Total capital assets (net of accumulated depreciation)
Total assets
LIABILITIES
Current liabilities:
Vouchers payable
Accounts payable
Deferred revenue
'Due to other funds
Due to Municipalities.
Total current liabilities
Total liabilities
NET ASSETS
invested in capital assets, net of related debt
Unrestricted-designated for projects
Unrestricted
Total net assets
$ 16,221,406.09
89,641.98
14,778.91
1,895,157.78
507,482.63
178,552.85
18,907,020.25
223,466.0:3
126,694.81
252,451.25
10,122.50
140,469.51
753,205,01
36,905,385.83
15,758,998.98
2,394,818,26
55,059,201.07
EXHIBIT A-1 County ol Oakland
Radio Communication Fund
Statement of Revenues, Expenses, and Changes in Net Assets
For the Three Months Ended December 31, 2012
2013 Year to Date
Fasforable
Percent el ?Unfavorable;
Revenue Variance
Arnenried Percent al
Buddet Revenue ASialment
Actual Operating revenues:
0-011 surcharge - Radio system
Antenna tile management
Leased equipment
Outside agencies
Farts and acceSsories
Productive latipr
Refund prior years expenditure
Prior years adjustments
Total operating revenuos
5,06013700 00.23% 5 1,492,034,75 $ 1,172,773.52 77.18% S (297,261.20)
210,000 50 3 1877 52,580.00 114,150,42 5.44% 31,650 42
23000007 340% 57,500.00 57,016,56 347551 416 55
125,00000 1.80% 31,250,00 17,523.04 1,13% (13,720.95j
75,030,00 1.12% 10,750.0-2 30,425 34 2,47% 19,675.34
5,000.00 0.00% 1.500,00 1,479,00 010% f21 .00ff
003 0,00% 0,00 08,744,60 3 40% 08,744.60
0,00 002% 0.00 54,525.92 153% 54,525.72
6,014,139 00 1030052 1,053,534 75 1,545,738.40 100,02% 007,750.30f
operating expenses:
Salaries 025,033,00 0.48% 106,709 25 118,999.77 7.09% _ 37.008 48
Fringe benefits
Contractual serviccs!
Communications
Efectilcat service
Equipm.1 repairs one maintenance
Preget and express
Modest casts
Laundry anti marling
Maintenance cortract
Merrese.rships, dues
Personal mileage
Printing
Professional serfdom
Rebtifat services
Software rental teaSe purchase
Software sodden m5ietnt3flce
Special prefects
Tower charges
Trove= and conference
V0°4,51400,', 41110 mee01300
Total orestrattual services
Commodious:
Dry goods and ciclning
Expendable eudiemeni expense
hAele,CCI Postage
Office surpfies
Parts snu accassales
Shop nipples
Sinai toots
Total cornmodilies
403.359.00 0.10%
200,000.00 3.02%
05,090,00
250,000_00 3.705f
0,500.53
IC-6.00000 2.5
700.05 0C
300,000 CO 6 265,
1,CC0.00 G '
3.50500 0.05%
505.00 0.014/.
121000305 1,000,
50000
700,05 0,01%
0,00 0.83',.
40,000.00 0 005:
350,060.03 0.255.
15000 00 23",,,
100.00 0.021%
1,65.1.505.00 24 0034
7,022,04 047
5060000
126.5a
000 .02 02 07'
205307.00
12,071.00
7', on
2700700,
100.1330 75 77.7771.07 5.0476 22.000.05
53,032.05
23,7501}3
02,000,50
2,125 00
40,005
175.00
07,550 00
25000
873.60
125.00
30,000 50
170.00
175.00
0.00
10,000 60
07,500 .06
3,7717 CC'
tf.s0 Ufd
5: 7 700
f:
42,0:000
50 .42
76,103.6.:
0,00.
1,225,20
0.00
104,740.50
0021
1101,05104E
52,407,01
174 00
50,00., 35
b 3305
0 f7i
L. • .0
0.01%
40122',
30'1
3,30-
0.010.
0 070
0,7 '
(84,747
125 7"
016,775.461
(52,407.01)
0.57571
3 75: f•
(1,45037)
7,605.05
0,201,07
f500 000
0,077.0"
03.0'
12,5:7 36
31
50,50330
3,000,00
1,750,03
00.008.(0.
4,4
t'2,740.0
f0
30,054:,
Depreciation:
Equipment, Slrutlures 400 Sower rights 573200000 8566% 1,431.000 00 075.201,42 53.1056 450,710.50 Total eepaeciation
5,732,005 03 060551, 1,433,000.00 770,201.42 73.16% 456,71056
0.30%
0.01%
10.15%
0.00%
3,47%
0.25%
0.53%
0,13%
0.4077
23.00,7
1.t..1.93%
.54.03%
infernal services-0
Building space allocation
Convenience copier
Info Tech - CLEMIS
Info Tech -development
Into Tech - operations
Insurance fund
!Maintenance ,400011031014 charges
iaiuinrpaoi(aci charg0.5
Motor pool
Tetephond cOmmureCations
Total internal senrices
Total operating expenses
0046701,40,7 income 11000
25,420,00
435.00
1,201,000000
000
220,05700
17,475 00
35.000.03
8,60564
3%100.00
29.05521
52577,554.50
10,340,04250
0.003,543
6,35550
102,00
300,25700
0,00
57,714,25
4,373.75
5.75000
2,150,03
7,525 07
7,2E4,03
2,561,420.50
ASIA,70.7 "75
0,354,05 0.41%
3305 006%
55,61102 3.66%
5,415,07 0.35%
50,205.00 3,64%
600,77 0,04%
1,67830 0.11%
1,55034 aim
5.200,50
6.321.43 0 41%
.140.215.17
1,903.5E8.51 137.4747
)410,237,11) .27,0".,
01
75.10
24363820
(5.415,00)
1,428,25
3,713,22
7,0°1.32
5550',
2.2447 ,
rionoperating revenues (expenses).
Budgeted equity adiusimeni
InCome tlasr,) Iram irwer,0000:5
Ichal nonaparating revOnues expenses)
11,00106 (1050) before transfers
Transfer-0 is
1141101415 061
Change in net assets
111041 901 assets - beginning
3010F net 051515 - %MT:0
3,526,343..60
150000.56
4,1E6,343,00
472,50007
15200 05
0406005,07)
, 50.00
0007,,
52.5.,
0 20%
-7,35%
000%
p1,555
45,000 OD
1,02e.Ee5.75
110,20000
3,300.00
1121.500,000
50.00
0.50 (6050 0-7 ,700
164.612.77) .421'-
(24.54237)
1453.172 52)
1220000 06572 75004.0
1171.500 01)) 47.80s, 00:.
(591.472.85) -3623% 501,472.00'f 55050.675 00
:I:0.00.201,W
RADIO COMMUNICATIONS - FUND 53600
Operating Transfers Out - Fiscal Year 2
Description
Amount
EXHIBIT A-2
Budgeted Operating Transfer from Radio fund to Info Tech fund for
1st quarter FY 2013 OakNet operation costs regarding the
extension of the E911 surcharge approved on Res. 10-076
Budgeted Operating Transfer from Radio Communications fund to
EMIS fund for 1st quarter FY 2013 administrative support
Budgeted Operating Transfer from Radio Communications fund to
Info Tech fund for 1st quarter FY 2013 Help Desk suppor t
Tot
59,000.00
50,000.00
,500.00
17 500 00
-
en;
Description
Transfer from General fund, Sheriff's Dept. to Radio Communications
fund per Res. 12-265 for Sheriffs contract with Commerce Township
Transfer from General fund, Sheriff's Dept. to Radio Communications
fund per Res. 12-305 for Sheriffs contract with Highland Township
Transfer from General fund, Sheriff's Dept. to Radio Communications
fund per Res, 12-334 for Sheriff's contract with Oxford Township
Amount
3,300.00
6,600.00
?,,300.00
Total $13,200.00
EXHIBIT A-3
RADIO COMMUNICATIONS FUND 53600
Fiscal Year 2013 — 1st Quarter
Brief Explanation of "A duals"
Following are some comments regarding Radio Communications Fund's r quarter FY 2013
financial statements.
STATEMENT OF NET ASSETS
• Radio Communications Fund reports all monetary assets.as Cash. Available cash is invested
and managed by the Treasurer as a pool. Participating funds receive interest earnings based
on their percentage of the invested daily cash balance each month.
Accrued interest on investment is interest earned by the fund on its cash balance in the
Treasurer's pool of investments; interest is paid when investments mature.
• Due from other governments is the amount due from municipalities for leased equipment.
• Accounts receivable includes 51,07.7„398,00 for accrued:E-911 operational surcharge revenue
which is paid to the County quarterly, The balance is rent due from antenna site co-locators
and amounts due from non-governmental external users for leased equipment.
Inventories are parts and accessories to maintain customer equipment and the radio system,
including equipment purchased from Harris Corp. on completion of the radio system.
Prepaid items are rent paid in advance per the lease agreements for co-location of radio
system equipment and maintenance contracts paid in advance..
Effective FY 2002, the Radio Communications Fund is classified as an Enterpris:]'.
a capitalization threshold for Equipment of $5,000. The 821.1v1Hz radio system was fnlly
operational at July 1, 2010 and all related asset expenditures have been capitalized with a ten
year life.
Tower rights are the County's rights to co-locate equipment ontowers constructed by the
Radio Fund on land owned by various municipalities. Ownership of the towers was
transferred to the municipalities upon completion of construction in 2010 in exchange for
ongoing rights to place radio equipment on those towers.
Vouchers payable and Accounts payable are accrued 1st quarter expenses.
Deferred revenue is the amount billed in advance to antenna site co-locators.
Due to other funds is the amount due to the General Fund for Corporation Counsel's share of
reimbursement by Sprint/Nextel for work on frequency rcbanding.
• Due to Municipalities is the City of Novi's share of lease payments by co-locators on Novi's
antenna site.
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
Revenues:
O E-911 surcharge revenue is unfavorable due to decreased volume of users. The surcharge
rate is $0.23 per line or device effective July 1, 2010. per BOG Resolution 10-076.
Antenna site management is revenue from telecommunication companies that have placed
equipment on county owned towers. Revenue is favorable due to additional equipment
added by co-locators.
• Outside agency revenue is unfavorable due to fewer than anticipated non-public safety users
of the new system within Oakland County departments and outside agencies.
Prepared by: K. Bell — Fiscal Services
RADIO COMMUNICATIONS FUND 53600
Fiscal Year 2013 — 1st Quarter
Brief Explanation of "Actual's"
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (Cont'd)
Revenues (Con t'd):
41" Parts and .accessories revenue is favorable due to increasing orders for replacement of
damaged equipment by participating agencies.
Refund of prior years .expenditure is the amount .received from Sprint/Nextel for re-banding costs incurred by Radio Communications fund.
Prior years adjustments are rents paid in FY 2012 which should have been classified as
advance payments of FY 2013 rent,
Expenses:
a Salary -variance is favorable due to lower than anticipated overtime, on-call payroll and
unfilled positions.
Fringe benefit variance is favorable because budgeted amounts are based on average fringe
benefit cost.
Communications cost is slightly unfavorable due to increased usage
Electrical service is favorable due to dee:t.N!sed utility demand at tower sites.
Equipment r:-.pairs and maintenance to a anticipated maintenance costs of-the radio system.
Indirect cost expense is based on the County's indirect Cost allocation. It includes Human.
Resources, Payroll, Treasu:er, A cc.munting, and Budgeting and Administrative services. The
.final allocation was established after adoption of the current budget.
Maintenance contract expense is favorable due to the elimination of the Harris Corp. contract
for Open -Sky maintenance and support.
Professional services expense is unfavorable due to the CAD Upgrade project which was
initiated after adoption of the budget.
Software rental, lease purchase is primarily Arc-GIS software purchased for -the CAD
p61 aux., project.
Software support and maintenance is .unfavorable due to reclassification of E911 related costs
after adoption of the budget.
Special projects expense is favorable due to timing of projects including tower painting.
Tower charges are unfavorable due to the addition of several leased cell tower sites for
coverage enhancements.
Travel and conference expense is favorable due to timing of expenditures and cost-eutting
efforts.
Prepared by: K. Re!! -- Fiscal Serv ces
RADIO COMMUNICATIONS FUND 53600
Fiscal Year 2013 — 1st Quarter
Brief E.xplanation. of "Actitals"
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS (Cont'd)
Expenses (Con t'd):
• Expendable equipment expense is unfavorable due to the timing of purchases.
• Office supply expense is favorable due to cost-cutting efforts.
e Parts and accessories expense is favorable due to lower than anticipated parts Cost,
• Small tool expense is favorable due to decreased usage.
Shop supplies expense is unfavorable due to timing of expenditures.
-0 Depreciation is favorable due to timing of additional capitalized costs for coverage
enhancements at cell tower sites.
O Internal Service expense is favorable overall based on reduced actual usage during FY 2013.
Info Tech-CLEMIS charges are for the support of MDC, E91 1, and CAD operations.
Non-Operating Revenues and Expenses:
O Budgeted equity adjustment represents the amount that is an offset to total revenue to balance
Radio Fund's FY 2013 budget per Fiscal Services management.
Income from investment revenue is unfavorable due i -o:a decreased cash balance ;-.!1!:!' le for
investment. All of Radio Fund's available cash , iach.;.ding cash received for ui operational surcharge, is invested in a pool managed by the Treasurer's office.
Transfers in includes amounts received from the General Fund to offset the cost of Radio
equipment in support of three: Sheriff's Department contracts.
Transfers out includes the amounts budgeted for administrative and operating support
provided by CLEMIS and Information Technology Funds.
Prepared by: K, Bell — Fiscal Services
Resolution #13077 April 17, 2013
Moved by Dwyer supported by Jackson the resolutions (with fiscal notes attached) on the amended
Consent Agenda be adopted (with accompanying reports being accepted).
AYES: Dwyer, Gershenson, Gingell, Gosselin, Hoffman, Jackson, Long, Matis, McGillivray,
Middleton, Quarles, Runestad, Scott, Spisz, Taub, Weipert, Woodward, Zack, Bosnic,
Crawford. (20)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the amended
Consent Agenda were adopted (with accompanying reports being accepted).
I HEREBY APPFTOVE TI-I;S RESOLUTION
CHIEF DEPUTY COUNTY EXECUTIVE
ACTING PURSUANT TO MCL 45.559A (7)
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and
accurate copy of a resolution adopted by the Oakland County Board of Commissioners on April 17, 2013,
with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 17th day of April, 2013.
Lisa Brown, Oakland County