RESOLUTION NO. 2012-92 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARINA APPROVING PURCHASE OF RADIO COMMUNICATIONS EQUIPMENT IN THE AMOUNT OF $372,785.96 FOR THE POLICE DEPARTMENT AND COMMUNITY DEVELOPMENT DEPARTMENT FROM HARRIS CORPORATION, OF GLENDALE, ARIZONA, AND APPROVE LEASE-TO-OWN FINANCING AGREEMENT IN THE AMOUNT OF $285,594.76, FOR PURCHASE OF RADIO EQUIPMENT, AUTHORIZE FINANCE DEPARTMENT TO MAKE NECESSARY ACCOUNTING AND BUDGETARY ENTRIES AND AUTHORIZE INTERIM CITY MANAGER TO EXECUTE THE PURCHASE AND FINANCING AGREEMENTS ON BEHALF OF THE CITY SUBJECT TO FINAL REVIEW AND APPROVAL BY THE CITY ATTORNEY WHEREAS, in December 2004 the Federal Communications Commission (FCC) adopted requirements that all radio systems operating in the VHF/UHF band under 512 MHz to re-equip to a narrow banding mode of operation by January 1, 2013, and; WHEREAS, the FCC mandate will require a radio technology change within Monterey County and agencies that do not meet the deadline face the loss of communication capabilities and systems that are not listed as compliant following the January 1, 2013 deadline will be illegal and subject to fines that start at $1,000 per day per license. WHEREAS, in June of 2007, in response to an RFP established by the Emergency Communication Users Advisory Council (ECUAC) and the NGEN Task Force, the firm of DELTAWRX was awarded a contract to provide engineering consulting services to develop a functional design for a system that would comply with FCC regulations by January 1, 2013, and; WHEREAS, DELTAWRX worked with Monterey County stake holders in developing an RFP for communication infrastructure improvements and end user radios and in a competitive bid process the Harris Corporation received the award to do both, and; WHEREAS, purchasing radio communications equipment from Harris Corporation will meet the standards as set forth by the Federal Communications Commission for narrow banding, and; WHEREAS, compete funding of the project requires a third party financing vendor and First Capitol Leasing Corporation of East Sandwich, Massachusetts, has been identified as a qualified vendor able to meet the financing needs of the project, and; WHEREAS, City Council approves purchase of radio communications equipment from Harris Corporation for the Police Department and Community Development Department to meet narrow banding requirements as mandated by the Federal Communications Commission and financing through First Capital Equipment Leasing Corporation is needed in order to fund the project.
Resolution No. 2012-92 Page Two NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Marina does hereby: 1. Purchasing radio communications equipment and associated services in the amount of $372,785.96 for the Police Department and Community Development Department from Harris Corporation of Glendale, Arizona; 2. Approve lease-to-own financing agreement in the amount of $285,594.76, for purchase of above said radio equipment from First Capital Equipment Leasing Corporation of East Sandwich, Massachusetts, and; 1. Authorize Finance Director to make necessary accounting and budgetary entries, and; 2. Authorize Interim City Manager to execute purchase and finance agreements on behalf of City subject to final review by the City Attorney. PASSED AND ADOPTED by the City Council of the City of Marina at a regular meeting duly held on the 19 th day of June 2012, by the following vote: AYES: COUNCIL MEMBERS: Amadeo, Brown, Ford, O Connell, Delgado NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None ABSTAIN: COUNCIL MEMBERS: None ATTEST: Bruce C. Delgado, Mayor Anita Sharp, Deputy City Clerk
EXHIBIT A
EXHIBIT B
June 13, 2012 Item No: 11a Honorable Mayor and Members City Council Meeting of the Marina City Council of June 19, 2012 CITY COUNCIL CONSIDER ADOPTING RESOLUTION NO. 2012-, APPROVING PURCHASE OF RADIO COMMUNICATIONS EQUIPMENT IN THE AMOUNT OF $372,785.96 FOR THE POLICE DEPARTMENT AND COMMUNITY DEVELOPMENT DEPARTMENT FROM HARRIS CORPORATION OF GLENDALE, ARIZONA, AND APPROVE LEASE-TO- OWN FINANCING AGREEMENT IN THE AMOUNT OF $285,594.76, FOR PURCHASE OF RADIO EQUIPMENT FROM FIRST CAPITAL EQUIPMENT LEASING CORPORATION OF EAST SANDWICH, MASSACHUSETTS, AUTHORIZING FINANCE DIRECTOR TO MAKE NECESSARY ACCOUNTING AND BUDGETARY ENTRIES AND AUTHORIZING INTERIM CITY MANAGER TO EXECUTE PURCHASE AND FINANCING AGREEMENTS ON BEHALF OF CITY SUBJECT TO FINAL REVIEW AND APPROVAL BY THE CITY ATTORNEY REQUEST: It is requested that the City Council consider: 1. Purchasing radio communications equipment and associated services in the amount of $372,785.96 for the Police Department and Community Development Department from Harris Corporation of Glendale, Arizona; 2. Approve lease-to-own financing agreement in the amount of $285,594.76, for purchase of radio equipment from First Capital Equipment Leasing Corporation of East Sandwich, Massachusetts; 3. Authorize the Finance Director to make necessary accounting and budgetary entries, and; 4. Authorize the Interim City Manager to execute purchase and finance agreements on behalf of the City subject to final review and approval by the City Attorney. BACKGROUND In December 2004 the Federal Communications Commission (FCC) adopted requirements that all radio systems operating in the VHF/UHF band under 512 MHz to re-equip to a narrow banding mode of operation by January 1, 2013. The FCC mandate will require a radio technology change within Monterey County and agencies that do not meet the deadline face the loss of communication capabilities. Systems that are not listed as compliant following the January 1, 2013 deadline will be illegal and subject to fines that start at $1,000 per day per license. This FCC edict includes the radio systems currently utilized by the Police Department and the Community Development Department. The City of Marina, as well as a vast majority of Monterey County cities that supply police, fire, emergency medical services and public works services, are provided consolidated dispatch and other radio services by the Monterey County Emergency Communications Center. In order to satisfy the FCC directive a new radio communication infrastructure and new radio equipment must be purchased by and for each jurisdiction.
In 2005, in order to meet the FCC directive, government agencies in Monterey County established the Next Generation Radio System (NGEN) Task Force. The NGEN Task Force was formed as a sub-committee of the Emergency Communication Users Advisory Council (ECUAC) and is comprised of a balance of representatives of the Sheriff s Department, police, fire, emergency medical services (EMS), city and Monterey County administrators, County Communications, County IT, including the City of Marina. In June of 2007, in response to an RFP established by the ECUAC and the NGEN Task Force, the management consulting firm DELTAWRX was awarded a contract to provide engineering consulting services to develop a functional design for a system that would comply with FCC regulations by January 1, 2013. DELTAWRX worked with Monterey County stake holders in developing an RFP for communication infrastructure improvements and end user radios. In a competitive bid process the Harris Corporation received the award to do both. The acquisition of the requested radio equipment and associated services is not an option in the eyes of the FCC, it is a requirement. Failure to comply would result in the City s complete loss of radio interoperability with all other jurisdictions and entities and leave the City with no radio communications for emergency and public works services. And, could be subject the City to fines. ANALYSIS: Staff has been actively involved in the Emergency Communication Users Advisory Council (ECUAC) and the NGEN Task Force and has closely monitored the activity surrounding the creation of the narrow banding project in Monterey County. As ECUAC and NGEN Task Force members have to purchase narrow banding equipment, a group discount was established by the Harris Corporation for ECUAC and NGEN members based on the amount of radio communications equipment being purchased. To receive all discounts ECUAC and NGEN members must submit an order no later than June 30, 2012. The discounts are reflected in Harris Corporation s quote for the City ( EXHIBIT A ). The total cost of the project to render the Police Department and the Community Development Department compliant with FCC requirements is $445,594.76. Equipment purchased from Harris Corporation would total $372,785.96 and another $72,808.80 would be needed for purchase of equipment, equipment upgrades and installation costs not supplied by the Harris Corporation. The City set aside $160,000 in the FY 2012-2013 Budget, Account 62.111.67010, NGEN Cost, Capitalized Equipment, to assist in funding the project. Of the $160,000, $87,191.20 will be used to pay a portion of the Harris Corporation purchase. The remaining $72,808.80 will be used for purchase of equipment, equipment upgrades, installation and contingency costs not provided by Harris Corporation, as stated above. In order to fund the balance, $285,594.76, staff researched financing options. First Capital Equipment Leasing Corporation was identified as providing the most economical finance rates. Their cost and those of two other providers are listed below for comparison.
Financing Proposal For the Acquisition of the NGEN Radios. Finance Company Term Interest Quote good thru Rate 1st Capital Equipment Leasing Corp. 48 months 2.708% 30-Jun-12 PNC Equipment Financing 36 months 2.95% 12-Dec Rabobank 36 months 2.90% 30-Jun-12 48 months 3.10% 60 months 3.35% First Capital Equipment Leasing Corporation s financing is a tax-exempt municipal lease-to-own quote for the Harris Corporation radio purchase. First Capital has locked in pricing based on the lease being funded no later than June 25, 2012, after which rates will float with the market until executed lease documents have been received by First Capital. Annual payments under the lease agreement will cost the City approximately $75,577 annually over the 4-year term of the agreement. Under the proposed quotation, the City s first quarterly lease-to-own payment is due September 25, 2012 ( EXHIBIT B ). As a member of the Emergency Communication Users Advisory Council (ECUAC), the City participated in the RFP process in which Harris Corporation was chosen as the communication infrastructure developer and radio hardware vendor. As such, purchase of the radio communication system equipment from Harris Corporation by the City adheres to the RFP that was developed by ECUAC. As stated in the background section above, the FCC mandate leaves no option for noncompliance. If the City fails to abide by the FCC deadline and requirements it faces the loss of emergency communication capabilities. Non-compliant communications systems after the January 1, 2013 deadline will be illegal and subject to fines that start at $1,000 per day, per license. FISCAL IMPACT: Should Council approve this project the total cost is $445,594.76. Funding for the project is twofold: 3. Partial funding of $160,000 was set side in the FY 2011-2012 Budget, Account No. 62.111.67010, NGEN Costs, Capitalized Equipment, and; 4. Financing $285,594.76 through First Capital Equipment Leasing Corporation for a period of 4 years. CONCLUSION: This request is submitted for City Council consideration and possible action. Respectfully submitted, Richard J. Janicki Management Analyst Marina Police Department City of Marina
REVIEWED/CONCUR: Christine di Iorio, AICP Community Development Director City of Marina Edmundo Rodriguez Chief of Police City of Marina Doug Yount Interim City Manager City of Marina