Transcript Slide 0

CONFIDENTIAL
Downriver Community Conference
(On Behalf of Downriver Mutual Aid)
Confidential Financing Document
October 2012
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CONFIDENTIAL
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CONFIDENTIAL
Confidential Financing Document
This Confidential Information Package (the “Package”) has been prepared by Plante Moran, PLLC
(“P&M ) from material supplied by the Downriver Mutual Aid 911 District (“DMA”), solely for
informational purposes. It is being furnished solely for use by prospective lenders to assist in the
evaluation of this transaction.
The information contained herein has been prepared to assist interested parties in making their own
evaluation of DMA and does not purport to contain all of the information that an interested party may
desire. In all cases, interested parties should conduct their own investigations and analysis of DMA
and the data set forth in this Package. Neither DMA nor P&M makes any representation or warranty
as to the accuracy or completeness of the information contained in this Package or made available
in connection with any further investigation of DMA,, including any estimates or projections, and
shall have no liability for any representations (expressed or implied) contained in, or for any
omissions from this Package or any other written or oral communication transmitted to the recipient
in the course of its evaluation of DMA. The only information that will have any legal effect will be
that specifically represented in the loan documents.
The recipient acknowledges and agrees that neither DMA nor P&M will be subject to any liability
based on the information contained in the Package, errors therein, or omissions there from, whether
DMA or P&M knew or should have known of any such errors or omissions, or was responsible for or
participated in its inclusion in or omission from this Package.
DMA reserves the right to negotiate with one or more prospective lenders at any time and to enter
into a definitive agreement for the financing of the project without prior written notice to you or other
prospective lenders. Also, DMA reserves the right to terminate, at any time, further participation in
the investigation and proposal process by any party and to modify data, documentation and other
procedures without assigning any reason therefore.
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CONFIDENTIAL
Confidential Financing Document
The recipient agrees not to contact any officers, employees, or affiliates of DMA, either directly or
indirectly, without the prior written consent of DMA or P&M. All communications, inquiries and
requests for information relating to this Package or to a possible transaction involving DMA must be
addressed to:
Kim Donahey, MBA
Chief Financial Director
Michigan Works! Southgate Service Center
Downriver Community Conference
15100 Northline Rd.
Southgate, MI 48195
Email: [email protected]
Direct: 734-362-7005
Fax: 734-283-0568
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Table of Contents
CONFIDENTIAL
Pages
•
Executive Summary
5–8
•
Financial Information
9 – 12
•
Financing Needs
13
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Executive Summary
CONFIDENTIAL
DCC Overview

The Downriver Community Conference (DCC) was formed as a regional partnership and a
common voice for Downriver communities. The DCC is comprised of 20 communities including
Huron Township, Romulus, Dearborn, Dearborn Heights, and the 16 communities included in the
DMA 911 district outlined below.

Today the DCC develops programs and provides leadership in various areas such as economic
and community development, employment and training, weatherization and transportation
services.

The Downriver Mutual Aid (DMA) consortium was founded to coordinate public safety activities
during emergencies. The DMA is an operating unit within the DCC, and is comprised of 18
communities including Huron Township, Romulus, and the 16 communities included in the DMA
911 district outlined below.

The DMA formalizes a number of sophisticated services that no single department or city could
offer, such as creating a regional SWAT Team, a Crisis Negotiation Team, an Underwater Search &
Recovery Team, the Downriver Area Narcotics Organization (DRANO), the Downriver Auto Theft
Team (DRATT) and a Uniformed Police Task Force.

The DMA 911 District is a consortium of sixteen communities in lower Wayne County that share
resources for the primary purpose of economic development. The 16 communities include the
following:
 Allen Park
 Gibraltar
 River Rouge
 Taylor
DMA Overview
 Brownstown
 Ecorse
 Flat Rock

 Grosse Ile
 Lincoln Park
 Melvindale
 Riverview
 Rockwood
 Southgate
 Trenton
 Woodhaven
 Wyandotte
These communities provide autonomous public safety and public works operations. Each
community acts as a primary Public Safety Answering Point (PSAP) for its residents providing
police, fire, and rescue services.
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Executive Summary
CONFIDENTIAL
DMA 911 Radio
System

The Downriver Mutual Aid (DMA) radio system has been in existence for over 12-years and
covers the members’ police and fire departments.

The current radio system is a 16 channel Motorola Smartnet II 800 MHz simulcast trunked
system. It is a dual mode system with both analog and digital trunked talkgroups. There are
four tower sites and one main communications room. The tower sites are located in Flat Rock,
Riverview, Ecorse and Taylor. All towers except for Taylor are free of rent and are either owned
by DMA or have long-term leases.

The type and model number of the subscriber radios are as follows:
 Portables are Motorola XTS3000 Model H09UCF9PW7BN
 Mobiles are Motorola Astro Spectra Plus D04UJH9SW3AN, W4 and W5s
 Consolettes are Motorola Astro Spectra Model L04UJH9PW7AN

The current subscriber radio inventory consists of 1,624 units allocated as follows:




Previous
Financing
Control Stations – 37
Fire Portables – 364
Fire mobiles – 171
Police Portables – 715



Police Mobiles – 315
City Portables – 9
City Mobiles – 13

The current 800 MHz system, procured in 1998, was financed through a $12 million dollar bond
issue and ultimately paid for with funds captured by the State of Michigan E-911 telephone
surcharge.

The telephone charge can capture up to 80-cents per monthly bill on land-line and cellular
telephone bills. The current rate is 42-cents per monthly land-line and cellular telephone bill.
This surcharge allowed the DCC to finance the radio system which covered four tower sites,
radio dispatch consoles for all community PSAP’s, and mobile/portable radios for police and
fire departments.
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Executive Summary
CONFIDENTIAL
Current Project
and Financing
Objectives
Infrastructure
Equipment to
be Purchased

The Downriver Mutual Aid has solicited bids to replace its
Communications System with a Cassidian solution, called COR
radio infrastructure system consists of a simulcast system with
Ecorse, Flat Rock and Riverview); a main communications room;
20 dispatch consoles distributed to over 14 locations.

The new system, connected by fiberlink and microwave technologies, allows public safety
officers the ability to communicate both through voice and data. The backbone infrastructure to
the current system is being completely replaced with the newest technology and allows
interoperability with the Michigan State Police, and other local, county, and federal agencies.
 COR p25 Equipment:
 Central Controllers
 Software Package
 5 Channel Gateway Power Supplies
 ISSI Connections
 Spare Parts
 Network Timing Equipment:
 GPS Antenna’s and Servers
 Network Management System:
 Workstations
 Laser Printers
 Solarwinds Network Monitor
 Manager Server
 Console Operator Positions:
 Console Package
 Headset/Handset
 Touchscreen Monitor
 Software Licenses
 UPS Power Supply
800 MHz Trunked Radio
p25 network. This turnkey
4 radio tower sites (Taylor,
16 frequency channels; and
 Console Gateway:
 Redundant VPgate Software Licenses
 Endpoint Licenses
 Computers
 Display Units
 Radio Controllers
 Rack Mount Shelves
 SIP Telephony Gateway
 Professional services
 System Design
 Equipment Installation
 Staging
 Console Installation
 Acceptance Testing
 Routers and Switches
 Control Stations
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Executive Summary
CONFIDENTIAL
Radios to be
Purchased

In addition to the infrastructure, the DMA is also replacing the subscriber units (mobile and
portable radios, control stations and consolettes) for each community in the DMA 911 District.

The DMA competitively bid the subscriber units and selected Motorola as the vendor. The
subscriber units currently operate using the 800 MHz system as described above. The DMA
will be replacing over 1,000 mobile and portable radios; 14 control stations and 25 consolettes
as well as the related templates. The selected Motorola products are as follows:
 Portable radios – Motorola APX 6000
 Mobile radios – Motorola APX 6500 2.5
 Control Stations
 Consolettes
Total Equipment to be Purchased (Estimated)
Estimated
Financing
Needs
Infrastructure
Radios
Total
Less: Grant Monies Available (Applied)
DCC Payments Applied
Financing Needed

$ 4,898,000
5,244,997
$ 10,142,997
(948,264)
(2,281,646)
$ 6,913,087
The City of Southgate has received a FEMA AFG grant in the amount of $784,900 (included
above). In addition, one of the DMA communities has applied for a regional grant totaling
$760,000, to help offset the cost of the subscriber units (which is not included in the summary
above).
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Historical Financial Information
CONFIDENTIAL
DMA 911 Fund
Historical
Balance Sheets
Assets
Current Assets
Cash and Investments
Due from Other Governmental Units
Restricted Assets
Capitalized Assets
Total Assets
As of September 30,
2010
2011
2009
2012
$
137,472
203,724
1,212,093
-
$
315,233
597,438
1,135,615
-
$
2,329,968
794,698
-
$
2,483,328
518,264
1,325,392 [A]
$
1,553,289
$
2,048,286
$
3,124,666
$
4,326,984
Liabilities
Liabilities and Fund Balances (Deficit)
Liabilities
Accrued and Other Liabilities
Deferred Revenue
As of September 30,
2010
2011
2009
$
Total Current Liabilities
3,226
394,765
$
2,105
1,017,949
397,991
1,020,054
Fund Balances (Deficit)
Reserved for 911 Expenditures
Unreserved Special Revenue Funds
1,212,093
(56,795)
Total Fund Balance (Deficit)
1,155,298
Total Liabilities and Fund Balance (Deficit)
$
1,553,289
$
$
12,449
358,297
2012
$
17,356
118,000
370,746
135,356
1,135,615
(107,383)
2,753,920
-
4,191,628
-
1,028,232
2,753,920
4,191,628
2,048,286
$
3,124,666
$
4,326,984
[A] Represents deposits paid by DMA 911 for infrastructure equipment to replace the current system.
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Historical Financial Information
CONFIDENTIAL
DMA 911 Fund
Historical
Income
Statements
For the Years Ended September 30,
2009
2010
2011
2012
Resources (Inflows)
911 User Charge (Land Line)
$
1,087,357
911 User Charge (Cell Phone)
Interest
Total Resources (Inflows)
$
$
742,526
$
2,332,219
441,171
584,922
320,786
6,880
1,758
1,582
1,535,408
$
1,329,206
$
2,654,587
$
1,575,238 [A]
471,383 [A]
4,455
$
2,051,076
Charges to Appropriations (Outflows)
Salaries
Fringe Benefits
Professional Services
Subscriptions
1,901
2,838
10,782
431
876
2,948
7,920
4,503
95,923
40,109 [C]
194,675
183,359 [D]
182,689
190,188
Travel
-
4,613
25
Office Supplies
-
211
-
2,330
578
1,127
197,829
208,519
298,053
Communication Costs
Maintenance
Rent
27,885 [B]
5,489
2,748
683
225
294,719 [E]
-
-
326
1,139
Utilities
18,557
5,109
20,957
22,727
Insurance
52,608
52,175
31,778
33,371 [F]
30
512
2,180
3,928
853
-
989,721
989,721
273,759
-
1,466,002
1,456,272
928,899
Miscellaneous
Capital Outlay
-
Debt Service
Total Charges to Appropriations (Outflows)
Resources Greater Than (Less Than) Charges to Appropriations
$
Beginning Fund Balance
Ending Fund Balance
69,406
$
1,085,892
$
1,155,298
(127,066)
$
1,155,298
$
1,028,232
1,725,688
915
613,368
$
1,028,232
$
2,753,920
1,437,708
2,753,920
$
4,191,628
[A] Revenue recognition under GASB #33 represents user charges collected within 90 days of year-end
[B] DMA System Administrator hired in 2012
[C] Primarily related to legal fees and consulting work for RFP and IT Services
[D] Based upon contractual agreement with Comcast Fiberlink Services
[E] Based upon contractual agreement with Cassadian and Solar Winds
[F] Changed insurance provider in 2011
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Projected Financial Information
CONFIDENTIAL
Projected
Income
Statements
For the Years Ended September 30,
2013
2014
2015
2016
2017
2018
Resources (Inflows)
911 User Charge (Land Line)
$
911 User Charge (Cell Phone)
Interest
Total Resources (Inflows)
$
1,551,216
$
1,628,777
$
1,710,216
$
1,795,726
$
1,885,513
$
1,979,788
471,176
494,735
519,472
545,445
572,717
601,353
5,000
5,250
5,513
5,788
6,078
6,381
2,027,392
$
2,128,762
$
2,235,200
$
2,346,960
$
2,464,308
$
2,587,523
Charges to Appropriations (Outflows)
Salaries
[A]
36,722
38,558
40,486
42,510
44,636
Fringe Benefits
[A]
7,592
7,972
8,370
8,789
9,228
9,690
Professional Services
[B]
50,000
30,000
31,000
32,000
33,000
35,000
Maintenance Contract on Firewall/Servers
[A]
30,000
31,500
33,075
34,729
36,465
38,288
Maintenance - Recabling/Tower Sites
[C]
110,000
-
-
-
-
-
Motorola Service Agreement
[D]
86,000
-
-
-
-
Subscriptions
[E]
189,000
189,000
189,000
189,000
189,000
189,000
Travel
[A]
5,000
5,250
5,513
5,788
6,078
6,381
Office Supplies
[A]
1,500
1,575
1,654
1,736
1,823
1,914
Communication Costs
[A]
3,600
3,780
3,969
4,167
4,376
4,595
Maintenance
[F]
226,000
272,000
272,000
272,000
272,000
272,000
Rent
[A]
1,500
1,575
1,654
1,736
1,823
1,914
Utilities
[A]
27,750
29,138
30,594
32,124
33,730
35,417
Insurance
[A]
50,000
52,500
55,125
57,881
60,775
63,814
Miscellaneous
[A]
1,000
1,050
1,103
1,158
1,216
1,276
Equipment
[C]
835,305
-
-
-
-
-
Computer Related Fees
[A]
35,000
36,750
38,588
40,517
42,543
44,670
Training
[G]
135,000
10,000
10,000
10,000
10,000
10,000
1,830,969
710,647
722,130
734,136
746,693
760,827
Total Charges to Appropriations (Outflows)
Resources in Excess of Appropriations
$
196,423
$
1,418,114
$
1,513,070
$
1,612,824
$
1,717,615
46,868
-
$
1,826,696
(Before Debt Service)
Add Back: Non-Operating Expenses
Resources Available for Debt Service
[C]
945,305
1,141,728
1,418,114
1,513,070
1,612,824
1,717,615
1,826,696
[A] - [G] See page 12 for footnote explanation
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Projected Financial Information
CONFIDENTIAL
Notes to
Projected
Income
Statements
[A] Assumed growth of 5% a year for the projected period.
[B] Professional Services estimated by management to decline after 2013 to approximately $30,000 to $35,000 per year.
[C] Non-Operating Expenses related to equipment acquisitions, towers, or recabling that will be paid for from the organization' s
fund balance resources as of September 2012.
[D] Management has indicated this is a one time expense.
[E] Management has indicated that subscriptions will remain constant throughout the projected period due to contractual obligations.
[F] Maintenance expense is $272,000 in year 2014 and beyond consistent with maintenance contract.
[G] Management has estimated training costs to be $10,000 in year 2014 and beyond.
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Estimated Financing Needs
CONFIDENTIAL
Financing
Needs
Summary

Below is a summary of the financing needed for this project:
Infrastructure - Equipment - Estimated Costs
Less: Payments already made as of 9/30/2012
Payment #1 911 fees
Payment #2 911 fees
Payment #2 COPS VI/VII
$ 4,898,000
(494,182)
(988,364)
(163,364)
Subtotal - Infrastructure
$ 3,252,090
Subscriber Units - Estimated Costs
$ 5,244,997
Less: Payments made or comitted as of 9/30/2012
AFG Grant - Southgate
Cash match for grant
Initial deposit 10% - cash
(784,900)
(199,100)
(600,000)
Subtotal - Subscriber Units
$ 3,660,997
Total Estimated Financing Needed
$ 6,913,087
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