Colonial Heights weighs $7M for radio system
By Blake Belden, staff writer
Aug 15, 2014, 09:28
COLONIAL HEIGHTS — With an emergency radio system on the last legs of its life span, and a service vendor who won’t repair or service the system after 2018, Colonial Heights must find a way to fund a $7 million dollar interoperable radio system upgrade.
The city has been discussing the need for a new radio system for years, and has previously settled on a plan to upgrade to a Project 25 standard interoperable digital radio communications system with the surrounding localities of Richmond, Chesterfield, Henrico and Hanover.
Fire chief A.G. Moore said that the current radio system has not been inefficient or flawed, but that simply the current vendor, Motorola, has said they will not service or continue to manufacture relevant parts for the system past 2018, therefore necessitating a need for a new system.
However, with a 2015 timeline for choosing a bidder and appropriating funds swiftly approaching, Colonial Heights is beginning to run low on time to figure out how to create enough revenue to fund the project.
“I assume it should be obvious that we don’t have an extra $7 million in reserves to pay cash, nor can we absorb this kind of capital expense in our budget,” said city manager Thomas Mattis during a city council meeting on Tuesday. “One way or another we’re going to have to make a pretty definitive decision in the next six months” on how to finance the project.
One of the primary finance options presented to the council on Tuesday was to increase the city’s primary revenue stream, the real estate tax, to help cover the necessary costs.
During a presentation, Bill Johnson, the director of finance, demonstrated that under the current memorandum of understanding between the city and the school board that splits revenues earned from real estate tax, an increase of eight cents would be necessary to adequately cover the total bond payments over the course of 15 years. A period of 15 years for the bond payments is based on the average life span of the radio communications system.
Even if the city were to use some alternate funds to supplement the overall total project funding, and only pay $5 million of the total cost through real estate revenue, a real estate tax increase of 5.7 cents would still be necessary.
The idea of drastically spiking the real estate tax to compensate for necessary revenues was not well received by council members, and although Mayor C. Scott Davis understood that the real estate tax is the most viable source for increasing revenue, he said that raising the tax would be contradictory to what the city has been trying to achieve over the past few years.
“The problem is we’re talking about an eight cent increase in real estate tax. On the other hand, we’re talking about trying to do economic development that’s going to eventually turn around our housing stock. That’s a very difficult balance if you can even call it a balance. I think we ... obviously need other options,” Davis said.
Colonial Heights has already incorporated a 20-year bond issue into the budget for capital improvements including drainage on Bruce Avenue, the widening of Hamilton Avenue and water and sewer relocation on Dupuy Avenue.
Johnson said the city could look into trying to get this bond issuance to match up with the timeline for the radio systems bond issuance, thus eliminating the extra costs of having two separate bond issuances.
Johnson also mentioned the possibility of combining Colonial Heights’s funding with that of Chesterfield, where the city would pay a prorated share of Chesterfield’s bond issue.
However, he said this was “not a likely option” because Chesterfield had not previously anticipated such a request, and they already voted on a $49 million referendum to pay for the radio system which does not factor in any of Colonial Heights’s costs.
Despite being an expensive project, Moore said that it will be extremely helpful in the long run, and more costly if Colonial Heights tries to implement the system individually rather than in connection with the capital region.
“I do believe the benefits far outweigh any other challenges we would get by having this system...The footprint that we get by being part of this regional system, we could not afford to do this on our own. No question,” Moore said.
The radio project timeline shows that after the next phases of issuing a regional request for proposal and appropriating funds by the second quarter of next year, individual contracts for vendors will be executed for each locality in 2016 and the new system will be fully operational by the end of 2018.
Moore said that the need for interoperability between localities is emphasized by two primary incidents in the last couple of decades, including a fatal F4 tornado in 1993 and a police pursuit that led to a fatal shooting in Richmond in 1998, situations that could be handled more efficiently through better communications between neighboring localities.
Colonial Heights will not have to add any additional towers in the city to accommodate the upgraded radio system.
Petersburg has already upgraded to this very radio system and currently operates with it in the city.
City council will continue to discuss this matter further in the next coming months in hopes of finding an appropriate resolution for funding the project.