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Note: The City of Rock Hill, South Carolina, received an honorable mention in the GFOA's 2010 Awards for Excellence in Government Finance for its municipal Wi-Fi program.
For years, the City of Rock Hill, South Carolina, watched other organizations install automated meter reading stems to control meter reading costs, improve billing accuracy, and reduce employee injuries. City officials saw the benefits and wanted to take advantage of the opportunity. The city could easily justify the project, but the staff wanted more. As a result, a much more expansive vision was developed, a plan that would provide for a city-owned communications system that moved beyond the customary automated meter reading approach to an advanced metering infrastructure (AMI) system. This system produced many innovations in the way city services are provided.
Staff proposed first installing a municipally owned wireless fidelity (Wi-Fi) infrastructure, which would become the communication system for an AMI system. Rock Hill's system was unique because the long-term financial strategy assumed a communication system that would be used only by government employees. The primary financial considerations in developing and implementing the Wi-Fi project were budgetary analysis, revenue forecasts, expenditure reductions, and projected debt capacity. While other municipalities developed Wi-Fi as fiscally dependant on advertisements and Internet user fees, Rock Hill produced a financial strategy that made citywide Wi-Fi a realistic goal.
FRAMING THE PROJECT
To begin the process, the city held brain storming sessions involving multiple departments, asking employees, "If you had access to City Hall computers through the Internet from anywhere across the city, how would it change they way you do your job?" Staff got excited about the project and developed lists of possible applications.
Numerous customer service efficiencies were identified, but none of them was likely to be offset by a reduction in personnel expenditures. It was also difficult to quantify items such as reduced response times, delaying the need for personnel additions, etc. Automated meter reading, however, was clearly an area where the city could eliminate positions, trucks, fuel, insurance, etc., and easily quantify those cost savings. The AMI system was critical in realizing the financial savings needed to fund the estimated $3.5 million Wi-Fi infrastructure investment.
Since drive-by automated meter reading systems were commonly used in municipalities nationwide, the cost-benefit analysis on the AMI application was fairly straightforward. The finance department, through forecasting and cost benefit analysis, made the case that if the city funded the Wi-Fi as a communications backbone, the financial benefits gained from an AMI application would cover the costs. In addition, other ideas generated from the brain-storming sessions would bring city operations to a new level of efficiency. The City of Rock Hill was to be the first of its kind to link a Wi-Fi network designed for employee use with numerous applications.
The Wi-Fi system had to be designed and built first, and then the city could develop the remaining applications that would run on the Wi-Fi communications system. The finance department was given the responsibility of finding a way to fund the first several years of this major Wi-Fi infrastructure project, while developing an AMI application that would provide enough savings to fund the debt service on both the Wi-Fi and the AMI systems. The financing mechanisms ultimately achieved were two 10-year private placement equipment lease purchase agreements.
THE FINANCE DEPARTMENT'S ROLE
The strategy presented to the city council recommended building a state-of-the-art Wi-Fi communication system that would be capable of handling large amounts of communication traffic. Building a large enough system would allow the city to consider future revenue-producing applications such as advertising, becoming an Internet service provider, or reading meters on behalf of other utility providers. The financial analysis and forecasting components were critical to the approval process for the backbone of the strategy--the state-of-the-art Wi-Fi system--since full implementation plans were not yet in place for the AMI application that would ultimately fund the debt service on the system. The council supported the Wi-Fi plan and approved moving ahead with preparing a request for proposal (RFP).
The city's finance department was engaged in the entire process, and the city's public services administrator/chief information officer was instrumental in planning and implementing the network. Finance staff acted as the Wi-Fi project manager, managed the RFP process, scheduled site visits, coordinated bids, assisted with contract development, coordinated lease purchase financing, and managed the public and customer communications while the project was being implemented. The bid process identified the project cost for covering the city limits with a state-of the art system at approximately $3.1 million. An additional $400,000 was requested to cover the utility service area outside the city boundary, for a total project budget of $3.5 million. Preliminary pricing was obtained on an AMI system, and debt service projections were prepared.
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Next, research was conducted on the additional revenues the city could anticipate and the staff reductions that could be reasonably achieved from an AMI system. Increases in revenues and decreases in expenses were conservatively projected to cover the debt service on both the Wi-Fi communications system and the AMI system.
HOW THE SYSTEM WORKS
In December 2006, once the cost-benefit analysis was completed and presented to the council, the city developed and approved a contract for the installation of a Wi-Fi communication system. The base system was completed in December 2008, and Rock Hill's system has now grown into the largest municipally owned wireless network in the Southeast. It is a wireless network that uses high-frequency radio waves to transmit data between multiple computers linked on a local area network or across the Internet. The system includes 1,000 routers and covers an area larger than the city limits. Mobile routers are also installed in city fire, police, and utility vehicles.
The number of applications and system services makes the City of Rock Hill's system unique. While the daily cost savings and increased customer service levels are difficult to quantify, most city departments are currently using the system for dozens of applications.
Police and Fire. The police department uses the system to access files on the network and to file reports remotely. The city is developing the capacity to download video from police cars to a centralized monitoring center when responding or investigating an incident. Police are able to pull up live camera systems in apartment complexes, stores, and the state's Department of Motor Vehicle interstate traffic cameras to access real-time information in crisis situations. Wi-Fi access in the vehicle gives each officer the ability to be on the road an additional two hours every shift. The fire department uses the network to look up building plans to identify entrances, exits, and locations of electricity connections and hazardous materials on the way to the scene. Response time is reduced because visual dispatch directions are available in the truck, and along with hydrant locations. Also, in a disaster situation, the Wi-Fi system could be used as another means of communication, if cellular service or landlines were down. The routers installed in the police vehicles and fire trucks enable them to communicate even if routers installed on electric poles are not functioning, creating an ad-hoc network.
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Public Works and Utilities. The public works department implemented a Wi-Fi application that allows staff to download and create work orders in the field, then dispatch and prioritize work crews based on their GIS location. Employees are able to identify pot holes, burnt out street lights, white goods left on the curb, etc., through a GIS-linked work order program in the vehicle, which optimizes manpower and fuel usage. Utilities crews use the Wi-Fi network to access maps of city infrastructure and facilities, and respond to e-mail and work orders in the field. Utilities has also installed approximately 20 percent of the AMI system of electric and water meters, eliminating the need for manual meter readings and providing centralized remote connections and disconnections, immediate notification of power outages, water leaks, and utility theft. Response times have been reduced, and engineers can use data on usage patterns to more accurately identify when plant expansions and other capital improvements will be needed.
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Parks, Recreation, and Tourism. Rock Hill uses the Wi-Fi network to attract sports tourism to the area. Free Wi-Fi services are broadcast at each of the city's parks, allowing parents to work and check e-mail while their children play and attend practices. The city has hosted national and international events at its softball complex, tennis center, and soccer complex. Tourists enjoy having Internet access and the ability to upload team scores and view tournament results near real-time. The Wi-Fi service gives Rock Hill an advantage in recruiting national events, bringing tourism dollars to the community. In addition, there are several Wi-Fi security cameras throughout the city, providing online live access for employees to monitor playgrounds and other critical city facilities, reducing the possibility for vandalism.
Many Other Uses. Building inspectors are using the network to issue on-site inspection reports and certificates of occupancy, to update reports, and to verify building permits while in the field. This allows builders and contractors to get an up-to-the minute status of an inspection via the Internet. Wi-Fi cameras have been installed at major city construction sites, enabling the city manager and authorized staff to view real-time construction progress online. Anal department heads have Wi-Fi access in their homes, allowing them to access computer files as if they were in their offices at City Hall.
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CONCLUSIONS
The City of Rock Hill incorporated the creation of a citywide Wi-Fi network as part of its strategic plan several years ago, and the system is now used by all city departments and facilities. It has resulted in resource conservation, greater internal efficiencies, and improved customer service capabilities, according to Rock Hill's city manager. The efficiencies to be gained from owning a municipal Wi-Fi system are limitless, but a solid anal conservative multiyear financial management plan is necessary in order to clear the significant initial investment. In Rock Hill, the benefits realized have far exceeded the city's expectations. Employees are requesting new applications faster than the city can implement them, anal there is no question that the municipal Wi-Fi system was a wise investment for Rock Hill.
ANNE POAG BUNTON, CPA, is customer service director with the City of Rock Hill, South Carolina. She is also a member of the GFOA's Committee on Accounting, Auditing, and Financial Reporting. DAVID B. VEHAUN is assistant city manager with the City of Rock Hill. He is a member of GFOA's Executive Board.
