Call to Order by Secretary Schiliro at 1:00 Pm

911 Board Budget Workshop Minutes February 21, 2013

Call to order by Secretary Schiliro at 1:00 pm.

Members Present:

Secretary Schiliro, Secretary Sills, Lewis Briggs, Jamie Turner, Michael Vincent, Mark Grubb

Staff Members present:

Terry Whitham, James Cole, and Matt Laick.

Terry Whitham reviewed the current balance of the fund with updated figures having been received on the morning of February 21, 2013. He noted that the fund balance as of today is $6,690,956.10 with all bill payments being current. He noted that the fund has historically generated between $7.5 million and $8 million dollars annually. The fund has most recently seen a drop to about $7.5 to $7.6 million per year. Calendar year 2012 saw an income of $7,563,491. Pending expenses at this time are $3,297,054 leaving a carryover surplus of $3,393,902. We take in two deposits per month in the amount of $131,000 and $500,000. The Board has commitments of approximately $5 million per year allowing for about $3 million in project money for a year. Secretary Schiliro clarified that the fund can easily remain solvent if we add no new projects.

Mr. Turner asked about the cost breakdowns on the budget sheets. Mr. Vincent clarified the difference between the ongoing monthly costs for phone network and the costs of phone system upgrade. There is a portion on this cost that will go away once we go to the I-3 network. This about $1.4 million per year in costs. The sheet being discussed includes both some Capital and Operating Expenses for the telephone systems.

Discussion on the sheet that outlines the costs of the 9-1-1 equipment. The sheet breaks downs costs of “Evergreen”, “Maintenance/Help Desk” and “Hardware” costs. Terry asked what is Help Desk. Jim advised this is ongoing support from Intrado for software/operational issues. Secretary Sills asked to be walked through each year. Jim Cole noted that the total at the end of the 5 years is correct, but that the annual costs and Centers to be upgraded are not correct and we won’t have a single year where 75% of the Centers are receiving upgraded equipment. The correct years for hardware refresh should be:

Seaford2014

Dover PD2015

KentComm2015

Newark2013

Rehoboth Beach2016

Wilmington2014

New Castle2017

Sussex2016

University of Delaware2015

Mr. Turner noted that these are projected figures and not contract figures. Mr. Cole noted that there shouldn’t be a major increase in these costs given the existing contracts and this is of course based on continuing operations as they exist today and does not take into consideration I-3 migration or another model or operations. This takes us to 2017 at Status Quo with normal software and hardware upgrades. We may see some improvements to system capabilities as the hardware and software evolves. The evergreen and help desk covers both maintenance through Verizon and Intrado as the network and equipment manufacturers. It is noted that we see changes in there being “maintenance contract” costs in some years but not others, this is due to the previous signing of 3 year maintenance contracts and now we are doing 5 year maintenance contracts.

Mr. Vincent brought up two items from his budget meeting where there was discussion on the potential for savings with equipment that does not appear to be being utilized or needed. This would be the mapping enterprise server and centralized mapping. Mr. Cole and Mr. Laick noted this isn’t really being used for the mapping data, while it has been used occasionally it is more beneficial and operationally cost effective for the GIS personnel to visit the Centers for updating data. Discussion on where the data is housed and that even pushing data from the Central Server requires someone going to each Center to distribute the data. There is not push from a Centralized Server, but the same data set is being installed at all locations.

Secretary Sills asked about the difference between the cost from Intrado to Verizon and the cost from Verizon to Delaware. Jim Cole advised this is basically the Verizon “mark up” for the costs of technician time and Verizon services. The difference between yearly upgrades is based on the number of positions being installed and upgraded for the year. The cost per position is the same at each center, so the price will fluctuate with the number of positions with work being done.

Mr. Turner asked if the figures include the possibility of adding positions as population/call volumes increase. Mr. Cole reported he includes about a 5% increase when asking for figures to anticipate growth.

Secretary Sills summed up that this $9.1 million over 5 years averages $152,000 per month. The question to Terry is does the surplus and monthly income allow us to incorporate additional projects given that we need $152,000 per month to cover the upgrade costs to maintain the status quo? Mr. Vincent noted that this averages $1.9 million per year and we have estimated that we have $2.4 million above operating expenses. This would leave about $500,000 per year for other projects without touching current reserves.

Secretary Sills and Mr. Vincent noted we need to look at both cost savings and other sources of revenue for projects as we move forward.

Mr. Vincent noted that the Legislative and Budget Committee recommends the first change is to work with the legislature to end wireless cost recovery from the budget. This costs us $225,000 per year for two vendors. This is an opportune time to approach this, Mr. Cole noted that once I3 goes into effect any State that still allows Cost Recovery may be looking at an increased number of carriers and expenses being submitted for Cost Recovery as they upgrade and grow their networks.

Mr. Vincent started a discussion that also noted another potential revenue source is surcharge fees for “pre-pay” and non-contract phones. While persons who have contract service are paying $.60 per month for the services of 9-1-1 access the persons who are purchasing phones/minute cards in regular stores are not paying anything but using the network. The same applies with the persons using the “magic-jack” systems through internet connection. Terry noted we are recovering from VoIP providers in Delaware. There was also discussion on whether audits are being done on the “wireless” carriers to ensure we are receiving proper payments from the carriers.

Secretary Schiliro asked if we are benchmarking against other States. Terry noted we are one of a handful of States still paying Cost Recovery and one of a few States not collecting on the “pre-pay” phones. It was noted that Wireless and Internet are non-regulated utilities that do not fall under the Public Service Commission.

Ken Allen asked about the potential cost saving by having the “smaller” agencies operating remotely on the County Viper Systems. Mr. Cole noted this is a “moot” point at this time as the major “back room” equipment for Viper Systems has already been installed in the Centers and much of this equipment is not replaced in a hardware “refresh” and even more of the “back room” equipment will be removed under the I3/Great Migration Network path where there will be very minimal back room equipment at any location with most of the system operating from a “Centralized Cloud Service”.

Mr. Lewis asked if we have seen an increase in the amount of money coming into the phone. Terry noted we have actually seen a decrease in the money coming into the fund on an annual basis as people have dropped landline phones. This has leveled out and we have a relatively high level of landline counts compared to national but this seems to be associated with business lines within the state. Mr. Turner noted that if you look at our demographics, Sussex County has many persons using Cell Phones that are registered in other States and with the portability of VoIP services the same applies to collection of funding for persons using those services.

Discussion on Audits. Does our legislation include an audit provision? Secretary Schiliro asked if the State Auditor has the authority to audit the submissions. Jim Cole noted that he has been working with the PSC and Division Revenue on audit legalities as relay services are being implemented. This is something needs to be researched what we can do within the legislation.

Secretary Schiliro and Secretary Sills asked that Terry get us a benchmark report that compares us to other states with regards to Wireless Cost Recovery, Surcharge Amount, Pre-Pay Surcharges, and Audit authority.

Discussion on pursuing change to the Wireless Cost Recovery in the legislation. This is probably the opportune time to pursue to avoid push back from Wireless Carriers once they begin to pay for I3 costs.

Mike Vincent brought to the attention of the Board a factor that could affect the operating expenses of the Board is where the DSP space rentals are paid to the Counties from the 9-1-1 Fund. This was added to the responsibilities of the Board as part of the epilogue language when the fund was raided. The amount of the rentals is negotiated between DSP Staff and County Administration with no input from the Board. This cost can change dramatically if the costs include just space or space and call taker positions.

Secretary Sills presented a NextGen 911 Summary to the Board. He has been in ongoing discussions with Intrado and Verizon for cost information. The initial cost he received was for $30 million to $33 million. This is a cost of $500,000 per month. Going forward we will need to look at increased revenue sources to be able to move forward.

Jim Cole gave and overview Great Migration will provide us with a system where we will use an IP Network with MMS services. We will no longer need most of the backroom operating equipment. The system will be hosted and maintained by the persons who created the system with increased redundancy. We can look at a system with Verizon and Intrado. Selecting someone other than Verizon could give us a similar system but would integrate a system with multiple vendors where we would lose our single point of contact operation we enjoy now. All of the annual costs we see now would go away and would only see “up charges” when we add positions. There will be no upfront costs and instead we will have higher monthly costs. Jim Cole recommends Option 3 from the document presented. We have the option of RFI/RFP but have to be aware that we could end up with four separate vendors to work with. He noted that we have our endpoint solution in place and it doesn’t make much sense to go to an RFP when so much is already done. We need to move to an I3 network to support the needs of the public. Mr. Cole would like to contact Intrado to get pricing by going direct with them without going through Verizon. We will still have some Verizon charges for their portion of the network but going direct with Intrado he thinks this could be a savings of $8-10 million.

Mr. Turner asked how the NENA Standards development processes work. Mr. Cole advised that NENA is recognized by the Federal Government as a leader in the Standards making process for 9-1-1 Technology. Mr. Turner confirmed that is similar to the NFPA process. Mr. Cole noted that they work with the FCC who then promulgates regulations.

Mr. Turner asked the security of the Cloud Configuration. Mr. Cole advised that the Intrado System is an enhanced security environment, their security applications are already in place as the host of ANI/ALI is about 97% of the 9-1-1 Systems in the United States.

Mr. Turner asked about the State of Verizon having purchased the “Great Migration” is their contract one we can leverage as part of a Consortium Agreement. Jim Cole this is something on their list to look at.

Mr. Briggs asked about the timeline for this system. Mr. Cole would like to move forward as soon as possible with migrating one or two centers at a time. Intrado is anxious to get the system out on the street so we might be able to take advantage of some early offerings. Secretary Schiliro asked at what point not having these capabilities begins to jeopardize the public and our services. FCC will begin to mandate some deadlines for implementation at some point in the future, but the sooner we implement the sooner we provided added services to the public.

Mr. Grubb asked for clarification on what portions of the phone equipment costs that were presented will “go away” if we accept and implement the “Great Migration”. The top section of the cost grid will go away. We will have some costs from Verizon for legacy network but they should not be as high as what we are currently paying. Depending on implementation timelines we could also see some rebates on current equipment.

Mr. Grubb asked about confusion for the public if we don’t implement across the Board. Mr. Cole noted that there will a public education aspect to the application, but our current equipment is capable of processing much of the data with the correct applications on the vendor side. Mr. Grubb commented on another State he has talked to that agreed only Intrado and TCS can really provide a “single” vendor solution and would we see a benefit of an RFP for TCS to bid on as well. Mr. Cole noted that this would void the money we have currently spent on our end user equipment as TCS uses a different solution. Discussion on potential improvement of costs by an RFI/RFP. Discussion on using Single Source letter through Procurement when it is known there are similar systems on the market. Secretary Schiliro noted we can’t assess today if we can afford to move to the NextGen Network because we really don’t have a true understanding of our full costs for the NextGen Network because we have a cost figure for the implementation but this had to be weighed against the cost savings in other areas from the implementation.

Mr. Cole would like the chance to have Intrado come in and work with him to give him a true figure direct from them and what costs would no longer be incurred. Terry asked about the need to do an RFI to learn more information. Mr. Grubb noted how this keeps things above board if State Procurement requires us to go to an RFP. Secretary Sills made comments that this will be a new solution, so we need to be aware of legal mandates to release and RFI and/or RFP.

Mr. Turner asked a point of order about any votes/decisions made at this meeting since the meeting was posted as a Public Meeting workshop with no set agenda item regarding any votes to be taken. Terry noted this is a Public Meeting on the Calendar and the Agenda was left open enough to allow votes and this was discussed with Mr. Ellis before the meeting.

Question from Joe Thomas on how support for these proposed solutions be handled with respect to the PSAP Equipment. Mr. Cole advised that selected vendor would put a support team in Delaware. This is one of the benefits of seeking a single vendor solution.

Secretary Sills noted this is still a big number to address. We need to go down parallel paths with getting information on costs of NextGen (costs and savings) and revenue stream improvements.

Motion by Mr. Grubb to allow an RFI to go out for information on a NextGen Implementation subject to review of the motion by the AG. Second by Secretary Sills. Motion carried without exception.

Secretary Schiliro reiterated that we need the benchmark information that compares us to other states with regards to Wireless Cost Recovery, Surcharge Amount, Pre-Pay Surcharges, and Audit authority so that we can approach legislature when they go back into session. We also need complete information on the costs and savings as we approach the legislature for changes in funding. Mr. Turner asked about getting feedback from legislative leadership. We need strong facts and figures to take to the Governor. Comments on other upcoming legislative initiatives that will affect the Board including potential legislation requiring the acceptance of texting from schools following the Connecticut Incident and other incidents around the Country.

Kevin Sipple commented on the needs of the Centers that will also be affected by these initiatives. We have to look at overall affects with operations, personnel, recording, and EMD mandates.

Terry Whitham began discussion on the CAD RFP Project. The Board has until February 28th to make a decision or the RFP will “die”. Negotiations with the current selected vendor New World have developed three implementation options.

Option 1 – Full package at a cost of $6.3 million ($1.6 million per year) will include full CAD/RMS/Mobile (1055 police and 600 fire) with a caveat that the agencies will take responsibility for mobile costs after 4 years.

Option 2 – CAD/RMS in .NET system at a cost of $4.2 million ($1.209) million a year. Upgrade all agencies to .NET version and all agencies. Mobile will be totally funded by agencies.