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East Bay Regional Communications System Authority 2 September 20, 2010 The current estimated cost to complete the new system is $69,952,910. EBRCSA has secured approximately $39 million in funds from the Bay Area Super Urban Area Security Initiative, Urban Area Security Initiative, State Homeland Security, and COPS grant programs. To date, • funds have been used to develop the system and purchase equipment. The West Contra Costa County Cell is now complete and will be available for use once the testing is complete. The East Alameda County Cell is 80% complete and expected to be operational by the end of the year. The full system is targeted to be up and available to all system users prior to January 1, 2013. DISCUSSION EBRCSA has been working with Alameda and Contra Costa Counties on a financing strategy that incorporates a combination of grants and debt financing to fund the retraining $30,987,000 needed to complete the system. An additional $13,987,000 in grants is anticipated to be received over the next four years, leaving a total of $17,000,000 to be financed. Both•Alameda and Contra Costa counties are currently preparing to issue new debt to fund projects unrelated to EBRCSA. In doing so, both counties are taking advantage of American Recovery and Reinvestment Act bonds, which will require the transactions to be completed prior to the end of 2010. In lieu of EBRCSA independently undertaking a $17,000,000 financing, both counties have agreed to increase the size of their issuance to include the needed EBRCSA funds. Based on the • distribution of system users, Alameda will increase their issuance by $10,200,000 and Contra Costa will increase their issuance by $6,800,000. EBRCSA will then issue bonds to the counties. The opportunity to partner with the two counties on the financing offers significant advantages to EBRCSA. The size of the issuance and creditworthiness of the counties will result in a much lower interest rate, avoid the need to go through a rating process, reduce issuance costs, and lower costs for all participants. Cost to each member agency will be allocated based upon the total subscriber units (radios). Monthly per radio charges (user fees) will be determined upon a total annual debt service payment of $2,066,000, plus total system operations and maintenance costs of $3,850,000, divided by the total number of radios operating on the system. Monthly user fees are estimated to fall within a range of $40.00 to $45.00 per radio. Debt service payment will commence in 2013 -14, once the entire system is operational, and run through 2028. As more users join during the intervening two years (prior to the first debt service payment) the rate will be adjusted to match the total user count. The initial payment will be set reflecting the additional users. For agencies that are able to use the system prior to commencement of debt service payments, the monthly per radio user fees are expected to range from $26.00 to $29.00 to cover maintenance and operations. Once the debt service begins, monthly costs will be $40.00 to $45.00 per radio. The new user fees will replace currently monthly user fees being paid by member agencies. Agencies may also choose to fund their share of the system costs up front in lieu of participating in the financing. This would reduce their monthly user fees by approximately one - third.