THE REGIONAL MUNICIPALITY OF YORK
POLICE SERVICES BOARD
REPORT OF THE CHIEF OF POLICE
25 APRIL 2007
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Re: Volunteer of the Year Award
__________________________________________
RECOMMENDATIONS:
- That the Police Services Board approve the transition to a purchase option to acquire further computer and network equipment; and
- That leasing proposals for I.T. Equipment be considered when and if a business case analysis indicates that leasing is clearly more beneficial than purchasing for a particular situation; and,
- That the Police Services Board forward a request to Regional Council to draw from Regional reserves totalling $2,886,000 in 2007, 2008 and 2009 and that repayment shall be made from future lease financing savings and Police Operating surpluses (if applicable).
SYNOPSIS:
During its 2007 budget deliberations, the Board adopted the 2007 Capital Budget including a transition from lease financing to acquisition for I.T. Equipment. The transition requires Regional Council approval to draw from reserve during the period when existing leases are discontinued 2007 to 2009. Financial analysis shows that in addition to the reserve repayment the estimated cash flow residual is $271,000. by 2016.
FINANCIAL IMPLICATIONS:
The ten-year impact of the purchase of I.T. Equipment and repayment of the reserve draw is anticipated to be a cash flow residual of $271,000. These savings are primarily the result of extending the useful life of printers, servers and other network equipment from three to five years and interest savings.
Transitioning from lease financing to purchasing will require a draw from regional reserves in 2007, 2008 and 2009 totalling $2,886,000. The reserve draw will be repaid from:
- Lease payments discontinue after 2009 with the funds redirected to pay back the reserve draw; and,
- Operating budget surpluses, if applicable.
BACKGROUND:
At its February 2, 2006 meeting, the Finance and Administration Committee adopted a report titled "Acquisition of Computer and Network Communications Equipment" for the Regional Information Technology department (attached Appendix I). The Regional report considers several factors including:
- the changing nature of software and technology
- leasing benefits and drawbacks
- practices of other Municipalities
- operational and financial impacts
York Regional Police Information Technology staff have been in discussions with Regional staff regarding the benefits and efficiencies of their acquisition experience including issues pertinent to York Regional Police, as follows:
- Life cycle estimates of equipment are often beyond standard 3-year lease terms
The acquisition of I.T. Equipment will allow a change from three year to five year replacement cycles for printers, servers and other I.T. Equipment. Existing replacement will continue at three years for laptops, mobile workstations, desktop computers and monitors.
- Operational and administrative considerations
Region I.T. staff have found the following benefits and efficiencies of their acquisition experience:
- Equipment return issues
- Inflexibility on ending dates - lease terms include penalties for modifying or extending lease end dates. An acquisition process will allow planning for workload considerations during equipment replacement;
- Lease terms include minor penalties for returning equipment not in working order or missing minor peripherals (i.e. mice or keyboards);
- Component loss - Replaced, worn or upgraded components are currently returned to the lessor. These newer parts will be salvageable under an acquisition methodology;
- Administrative costs - keeping lease schedules and processing accounts payable invoices will be eased through purchasing; and,
- Pre-qualified I.T. Vendor - I.T. Equipment procurement at the Region is through a pre-qualified vendor (currently Compugen Inc.). A pre-qualified vendor eliminates the administrative and timing issues related to the purchasing process.
A key topic in I.T. Equipment leasing is Justice Denise E. Bellamy's September 12, 2005 report on Toronto's Computer Leasing Inquiry. Her report outlined 241 recommendations in areas of: ethics; governance; lobbying; procurement and other recommendations. With respect to leasing, the report recommends that leasing should remain a viable financing alternative. Future leasing proposals will be considered when and if a business case analysis indicates that leasing is clearly more beneficial than purchasing for a particular situation
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