Passage of this bill will establish the Utah Communications Agency Network as an independent state agency. Previous independent studies indicated that initital estimates to replace the current mobile radio system in the five counties on the Wasatch Front range from $20 million to $28 million. Statewide cost estimates range from $136 million to $165 million depending on local participation. Although the majority of the operating and capital costs will come from cost recovery billings to the user agencies and local governments, General Funds and Revenue Bonding will be required for initial capitalization. One-time General Funds of $185,000 will be required in FY 1998 for administrative start-up costs. In addition, a $7,130,000 revenue bond would be issued in FY 1998 for equipment and infrastructure development with another $7,130,000 bond estimated to be issued in FY 2002. Based on an estimated cost of $30 per unit per month, there will be an annual increase funding requirement of $1,438,400 for state agencies that are using the network. However, only a partial implementation will take place in FY 1999, requiring agency increases of $402,700 from all funding sources. Also, local governments are estimated to pay user fees of $232,000 in FY 1999, but it is noted that local government participation is optional. Although all expenditures for the network in FY 1999 will be dedicated credits, the Analyst has allocated funding based on the source of those dedicated credits. The FY 1999 appropriation includes operating costs as well as partial year debt service on the bond. Future debt service requirements will be $809,300 annually with annual administrative and operating costs estimated at $350,000. Operating costs will increase commensurate with the number of users that are added each year. However, economies of scale will be achieved as more users come onto the network.

Office of the Legislative Fiscal Analyst

2/12/97 8:52:11 AM

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