CREST Public Safety Building (Report)

Questions & Answers

1. Why does CREST need a new building?
   Currently, CREST operations, infrastructure and master site are located in separate locations, and only the master site is in a post-seismic structure. The primary focus of the new building is to mitigate the risk to critical spare equipment, specialized tools, and safety of key technical personnel.

2. Will this project end up costing user agencies more money on their yearly levies?
   Overall, our debt will have increased, but it will be amortized over a longer period with annual levy increases averaging 2.9% to provide predictable budgeting forecasts for our user agencies. Our total debt will decrease below the current level by 2025.

3. Does CREST have the financial capacity to manage this investment – what is the financial plan?
   Based on our high-level financial analysis the project can be accommodated within the existing mandate of a 2.9% annual operational budget increase.

   • CREST currently has $18M in debt. Over the next 5 years CREST will pay off $15M of its current debt funded by levies per the current 5-year plan.
   • An increase of $15M for a new post-seismic building would still be substantially less than the maximum overall historical debt of $27.5M (2016).
   • The recent network upgrade was financed through loans from MFA. The repayment for the network investment was amortized over 10 years.

4. What does the building schedule look like?
   If the Shareholders approve of the project in the first half of 2022, we could start building in early 2023. The construction period would be approximately 18 months.

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POST DISASTER BUILDING BRIEFING NOTE

To: CREST Directors & Shareholders
Prepared by: Gord Horth, General Manager
Preparation date: January 7, 2022

SUBJECT

POST DISASTER BUILDING BRIEFING NOTE

RECOMMENDATION

THAT the City of Langford supports the post disaster building project and authorizes the CREST Director from Langford, or his/her proxy designate, to endorse the project and associated borrowing at the next Shareholder meeting (May 18, 2022 AGM).

EXECUTIVE SUMMARY

The CREST Board is seeking support from its Shareholders to build a post disaster building that will preserve and safeguard critical emergency communications infrastructure and resources for first responders in the region. The project is estimated to cost $16M of which $15M would be borrowed through MFA (Municipal Finance Authority).

The 2020 Strategic Planning confirmed the highest risk to CREST was the lack of a post disaster building to preserve and safeguard critical infrastructure and resources (both equipment and personnel). Since the direction to move forward on a new building, the Board appointed a Site Selection Task Force in 2021 to guide and recommend a site for a post disaster building. The proposed facility would be approximately 1,400 m2.

Acting on a recommendation from the Task Force the Board authorized the purchase of a preferred site in July 2021 and to refine the estimates on building the facility on the now identified parcel. That cost estimate was done in the fall of 2021.

FINANCIALS

Based on our financial analysis the project could be accommodated within the existing mandate of a 2.9% annual operational budget increase as laid out in the five-year financial plan. CREST has both the capacity and ability to service borrowing to finance a post seismic operations/administration building.

This item would be placed on the May 18, 2022 AGM and would need the support of 2/3 of the Shareholders as per section 2.4 of the Members Agreement.

RISKS

At the 2020 strategic planning session, it was determined that securing a post disaster building would eliminate CREST’s highest risk to the corporation based on the following underlying reasons:

• The insured value of our unique equipment and tools at our office/warehouse and master site is $4.75M, however it is the timeline to order and receive these specialized items, that come from all over the world, that require due diligence to ensure we have access to usable items when critical and time sensitive repairs and maintenance are needed. Specialized personnel is of critical importance for ongoing functionality.

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Equipment, Staff resources, Tools

• Equipment: CREST maintains a wide range of spare critical equipment. Most equipment is manufactured overseas and takes long lead time to acquire. Many pieces are configured specifically for CREST from a single source supplier.
• Staff resources: In 2006 we made the strategic decision to be self-supporting: our staff are trained to maintain and repair our network and infrastructure. This decision has saved CREST over $3M. We realized that in the event of a problem, locally based trained staff could respond to our unique & isolated location far better than relying on Motorola (based in Chicago).
• Tools: We have an inventory of specialized tools unique to telecommunications enterprises that would be difficult or impossible to replace quickly if they were destroyed or damaged.

Unlike fire agencies that have mutual aid agreements that can be called upon for apparatus and manpower should the need arise, CREST must be prepared to be more self-reliant given the specialized nature of the service. While E-Comm may offer resources, if they are not occupied with their own challenges, Islanders understand the requirement to be somewhat stand alone.

As we have seen over the last few years, as a result of climate change, windstorms and wildfires and atypical events such as floods, tornados and earthquakes are on the rise. The world is becoming increasingly hazardous and there is more reliance than ever on the first responders that serve their communities. It’s critical that our region’s public safety technology and infrastructure remains intact and operational every day – and especially in times of greatest need. It simply makes sense to protect our investment, and to give confidence to our first responders and the public that CREST is prepared and will be there in the event of a natural disaster.

NEXT STEPS

• Should 2/3 of the Shareholders endorse the budget for the project, further design work would be completed followed by construction documentation and permitting. Timelines estimated at six months.
• Tendering would be an estimated three-month timeline.
• Construction and Commissioning is estimated at eighteen months.

CONCLUSION AND RECOMMENDATION

THAT the City of Langford supports the post disaster building project and authorizes the CREST Director from Langford, or his/her proxy designate, to endorse the project and associated borrowing at the next Shareholder meeting (May 18, 2022 AGM).

Appendix: News Release (November 12, 2021)

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News Release (November 12, 2021)

CREST BOARD OF DIRECTORS RECOMMEND MOVING AHEAD WITH NEW POST-DISASTER PUBLIC SAFETY BUILDING TO CONSOLIDATE THE REGION’S CRITICAL PUBLIC SAFETY INFRASTRUCTURE

FOR IMMEDIATE RELEASE, VICTORIA B.C.
FRIDAY, NOVEMBER 12, 2021, VICTORIA, B.C………The Board of Directors of CREST (Capital Region Emergency Service Telecommunications Inc.) announced today that they have given approval for the not-for-profit corporation to enter into an agreement to purchase a parcel of land in Langford, and to commence planning for a purpose-built, post-disaster building in which to house and secure the region’s critical public safety technology and infrastructure. In 2020, CREST completed a region-wide, 4-year, $24.5M upgrade to a digital P25 network that is considered a world standard in public safety telecommunications. The decision taken today addresses the number one risk identified by the CREST Board in their five-year Strategic Plan - the existing vulnerability of the organization’s infrastructure and technology in the event of a major disaster. Currently, CREST operations, infrastructure and master site are located in separate locations, and only the master site is in a post-seismic structure.

Following several months of research exploring options and available properties, a .94-acre parcel at City Gates was selected due its central location to regional CREST infrastructure and its proximity to main transportation arterials. CREST’s purchase agreement with property owner, Seacliff Properties, is for $1.8M. The proposed new CREST public safety building will meet the current and future needs for an essential service agency that supports the region’s emergency responders and public service agencies.

CREST’s 20-member Board of Directors, who are nominated by CREST Shareholders, is recommending to the Shareholders that CREST moves ahead with the new public safety building to ensure that the region’s critical public safety communications network is located in a purpose-built, secure structure that can withstand a natural disaster, and to ensure, as a consequence, that first responders can continue to operate safely and effectively to protect the public without interruption.

More than 50 emergency response and public service agencies rely upon the CREST network 24/7 to do their jobs safely and reliably. The CREST network handled more than 6 million calls from over 3000 users last year.

Preliminary costs for the new building are anticipated to be approximately $16M. The project would be financed by borrowing funds from the Municipal Finance Authority (MFA). CREST can currently borrow from the MFA at historic low interest rates. Current financial forecasting for the project suggests that this building can be achieved within the Board-approved financial plan without increases to user agency levies. This project requires the support of 2/3 of the CREST Shareholders as specified in the CREST Members Agreement, and each CREST Shareholder representative on the Board will be discussing this public safety investment with their respective Shareholder in the coming months. A meeting to discuss and ratify a decision to proceed will be held in the new year.

Quotes:

• Tim Morrison, CREST Board Chairperson:
  “As we have seen over the last few years, as a result of climate change, windstorms and wildfires and a-typical events such as floods, tornados and earthquakes are on the rise. The world is becoming increasingly hazardous and there is more reliance than ever on the first responders that serve their communities. It’s critical that our region’s public safety technology and infrastructure remains intact and operational every day – and especially in times of greatest need. With the new P25 network in place, it simply makes sense to protect our investment, and to give confidence to our first responders and the public that CREST is prepared and will be there in the event of a natural disaster.”

• Michael Burgess – Fire Chief, Saanich Fire Department:
  “Protecting the regions public safety assets is essential to ensuring our first responder agencies and personnel can deliver critical life safety services during a major emergency or disaster event. To that end, the CREST system is the foundation to our success. Having our telecommunications infrastructure located in a purpose-built, post-disaster building is simply an emergency management best practice. This project is a strategic investment and will benefit the region and its residents for many years to come.”

• Del Manak – Police Chief, Victoria Police Department:
  “The region made a smart investment in recently updating and modernizing the CREST emergency communications platform. For first responder agencies, like the Victoria Police Department, protecting that investment is vital.”

• Brett Mikkelsen, Fire Chief, Sidney Fire Department:
  “The hazards, risks, and vulnerabilities unique to our region require that emergency services, and emergency support services be housed in post disaster rated buildings. CREST is the communications equipment and infrastructure provider for South Island emergency services and an integral partner in service delivery. The Town of Sidney Fire Department supports the construction of a new post disaster rated facility for our regional emergency service telecommunications provider”.

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For more information please contact:
Gord Horth, General Manager, CREST
Cell: 250.516.5202

About CREST: www.crest.ca

A 20-member Board of Directors, nominated by CREST Shareholders, is responsible for strategic direction, finances, governance and operating results.

CREST is funded through user fees paid by the agencies using the system. Their fees are based on the geographic size of the area they serve, its population, the number of radios required, and radio traffic. In addition, the Capital Regional District contracts with CREST to provide an emergency communications system for the region.

This collaborative shareholder model ensures that each shareholder has an equitable voice in public safety decision making. The creation of CREST considers our unique island circumstances strengthening the Capital Region’s ability to be self-reliant in the event of a natural disaster.

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CREST 101

• CREST provides radio communications for 50 emergency response agencies in the Capital Region.
• CREST supplies, supports, and maintains dispatch equipment for 5 police agencies at the South Island Communications Centre as well as for the 2 regional fire and 2 ambulance dispatch centres throughout the Capital Region.
• Prior to creating CREST, public safety organizations used over 30 different radio systems for communicating – none of them integrated.
• CREST was formed in 2001 & a SmartZone network launched in 2003.
• In 2020 CREST completed a 4-year $24.5 M system-wide network and technology upgrade transitioning to a new digital P25 network for the region.
• P25 is considered a world-standard in public safety telecommunications.

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PERFORMANCE BY THE NUMBERS

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Protecting Critical Infrastructure & Technology

• Our recent Strategic Plan review identified the existing vulnerability of the organization’s infrastructure and technology in the event of a major disaster.
• Currently CREST operations, infrastructure and master site are located in separate locations, and only the master site is in a post-seismic structure.
• A new CREST public safety building will meet the current and future needs for an essential service agency that supports the region’s emergency responders and public service agencies.

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Importance of Self-Reliance

• Strong evidence that the South Island is vulnerable to numerous and reoccurring events and supply chain disruptions:
  • Flooding, wildfires, windstorms, health pandemics
  • Malahat closures, ferry cancellations/breakdowns
• The unpredictable nature, severity and frequency of these occurrences requires that CREST’s infrastructure and technology is protected and secure to ensure uninterrupted support for first responders.

Responsible Fiscal Management

• Over the last 4 years we successfully transitioned from our original system (2001) to the new P25 network.
• That project also included supplying & programming over 3500 new radios across the region.
• Cost estimate in 2016 - $24.5M, & achieved the forecast on completion.

Fiscal & Security Prudent

• Current financial forecasting for the project suggests that this building can be achieved without increases to user levies.
• The Board is moving ahead to ensure that the region’s critical public safety communications network is located in a purpose-built, secure structure that can withstand a natural disaster so that those on the front line can continue to operate safely and effectively to protect the public without interruption.

User Agency Support

Quote: Michael Burgess – Fire Chief, Saanich Fire Department
“Protecting the regions public safety assets is essential to ensuring our first responder agencies and personnel can deliver critical life safety services during a major emergency or disaster event. To that end, the CREST system is the foundation to our success. Having our telecommunications infrastructure located in a purpose-built, post-disaster building is simply an emergency management best practice. This project is a strategic investment and will benefit the region and its residents for many years to come.”

Quote: Del Manak – Police Chief, Victoria Police Department
“The region made a smart investment in recently updating and modernizing the CREST emergency communications platform. For first responder agencies, like the Victoria Police Department, protecting that investment is vital.”