2011supplemental report e911 board...christopher j. campbell, chair charles c. freeman, vice chair...

PRESENTED TO:Honorable Governor Rick Scott

Honorable President Mike HaridopolosHonorable Speaker Dean Cannon

E911 BOARD MEMBERSChristopher J. Campbell, ChairCharles C. Freeman, Vice Chair

L. Carolyn Dill-CollierStan L. Greer

Benjamin S. GuthrieMarilyn M. Haroutunian

Sandra A. KhazraeeIra U. Pyles

Wireless Prepaid E911 Fee Revenue Reduction Impact

25% - 38% Reduc�on20% - 25% Reduc�on15% - 20% Reduc�on10% - 15% Reduc�on

5% -10% Reduc�onLess than 5%

Reduc�on Covered byRural County Program

Legend

E911 BOARD AUGUST 31, 2012

2011SUPPLEMENTAL REPORT S T A T E O F F L O R I D A

Wakulla

E911 Board Members: Christopher J. Campbell • L. Carolyn Dill-Collier • Charles C. Freeman • Benjamin S. Guthrie

Stan L. Greer • Marilyn M. Haroutunian • Sandra A. Khazraee • Ira U. Pyles

September 14, 2012 The Honorable Rick Scott The Honorable Mike Haridopolos, President Governor of Florida The Florida Senate PL05, The Capitol 409, The Capitol Tallahassee, FL 32399-0001 404 South Monroe Street

Tallahassee, FL 32399-1100 The Honorable Dean Cannon, Speaker The Florida House of Representatives 420, The Capitol 402 South Monroe Street Tallahassee, FL 32399-1300 Dear Governor Scott, President Haridopolos, and Speaker Cannon: The State of Florida E911 Board respectfully submits this Supplemental Report to its 2011 Annual Legislative Report. This supplement is provided to present and explain modifications required to the annual report financial projections caused by the suspension of E911 fees on prepaid wireless service. The reduction in the remittance of E911 fees significantly affects the reported financial information, but, more importantly, introduces possible adverse effects on Florida’s E911 System. In April 2012, the Board was notified by several service providers of a significant decrease in wireless E911 fee revenues. Approximately $14.2 million per year, which had been remitted in previous years, now has been determined by the service providers to be exempt from collection, under the prepaid suspension provision in subsection 365.172(8), Florida Statutes. One service provider involved did notify the E911 Board that they will begin collecting and remitting the E911 fee again in July 2013 based on the statute provisions. The E911 Board’s mission and primary goal is to provide the residents and visitors of the State of Florida with the most technologically efficient and cost effective E911 services within available funding allowances. The 2011 annual report’s financial projections and information are updated along with information on how the E911 Board is assisting the counties with E911 funding during this period of reduced E911 fee revenues to avoid E911 system problems.

E911 Board 2011 Annual Report - Prepaid Supplement

i

Table of Contents A. INTRODUCTION ................................................................................................................................. 1 B. EXECUTIVE SUMMARY .................................................................................................................... 2

1. SIGNIFICANT IMPACT ........................................................................................................................... 3 2. FINANCIAL .......................................................................................................................................... 3 3. LEGISLATIVE RECOMMENDATIONS ....................................................................................................... 3

C. E911 BOARD ...................................................................................................................................... 4 D. RESULTS OF E911 DATA EVALUATION ......................................................................................... 4

1. WIRELESS SERVICE PROVIDER PROJECTION ANALYSIS ........................................................................ 4 2. COUNTY PROJECTION ANALYSIS ......................................................................................................... 7 3. RURAL COUNTIES PROJECTION ANALYSIS ........................................................................................... 9 4. WIRELESS SERVICE PROVIDER COST RECOVERY ANALYSIS ............................................................... 10 5. TOTAL COST (EXPENDITURE) AND FEE (REVENUE) ANALYSIS ............................................................. 11 6. SPENDING AUTHORITY ANALYSIS ...................................................................................................... 13 7. E911 TRUST FUND BALANCE ANALYSIS ............................................................................................ 13

E. CONCLUSIONS ................................................................................................................................ 16 1. LEGISLATIVE RECOMMENDATIONS ..................................................................................................... 16 2. E911 BOARD ADMINISTRATION OF PERCENTAGE ALLOCATION ........................................................... 16 3. SPECIAL DISBURSEMENT TO COUNTIES FOR E911 ............................................................................. 16

F. ACKNOWLEDGEMENT ................................................................................................................... 16 Appendix 1 County Funding Data - Wireless Prepaid E911 Fee Revenue Reduction Impact Appendix 2 Prepaid Legislative History Appendix 3 Historical Data, Calculation and Projections

E911 Board 2011 Annual Report Supplement Page 1 of 16 8/31/2012

E911 Board 2011 Annual Report – Prepaid Supplement A. INTRODUCTION The E911 Board provides this supplement to the E911 Board 2011 Annual Report1 to present and explain modifications required to its annual report to the Governor and Legislature. This update is required because of the significant financial impact caused by the recent suspension by some carriers of E911 fee collections on prepaid wireless service. These carriers had previously collected and remitted E911 fees. This is adversely affecting the Emergency Communications Number E911 System Fund (E911 Trust Fund) and County E911 funding throughout Florida. This supplemental information:

• Provides calculations, projections, and updated information from the 2011 Annual Report;

• Examines future concerns and direction related to providing E911 services; and • Appraises reasons for making or not making an adjustment to the fee.

1 as required by section 365.172(6)(c), Florida Statutes.


E911 Board 2011 Annual Report – Prepaid Supplement B. EXECUTIVE SUMMARY The effect of the suspension of the Enhanced (E911) fee on prepaid wireless services has reached a critical level in the necessary funding of the E911 system. The collection of E911 fees was suspended in 2007, to study prepaid wireless service and determine an E911 fee collection methodology. That suspension continues until July 2013. The status of E911 fee revenue is of paramount importance to the E911 Board and Florida’s counties. This loss of E911 fee revenue has impacted the counties most directly with the escalating costs of E911 and the additional costs for 911 public safety telecommunicator certification and training. As reported in the 2011 Annual Report, the E911 fee revenues continued to decrease in 2011; however, the rate of decrease was projected to be less than the previous two years. The decrease was primarily attributed to a consumer trend to switch to new telecommunication devices and services, such as prepaid wireless service, that do not collect and remit E911 fee revenues but still advertise availability and provide access to public safety 911 services. In April 2012, the E911 Board was notified that the E911 fee revenue from wireless service providers will decrease by approximately 18 percent2 in total wireless fee remittances. This correlates to an approximate $14.2 million decrease this year in funding for the E911 system in Florida, which has a direct impact on public safety for our citizens and visitors. The prepaid E911 fee remittance suspension impact over the last five years has been mitigated by the E911 Board Grant Programs and special E911 trust fund disbursements. With the reduction in the trust fund balance, the latest decrease in prepaid E911 fee remittance has the potential to cause county funding issues that can adversely affect the E911 systems. The E911 Trust Fund can no longer provide the funding necessary to offset the reductions being experienced because of the prepaid fee suspension. With the cost of a major technology migration and the current economic and funding issues, funding is required to manage the transition to Internet Protocol (IP) network-based Next Generation 911 (NG-911) systems. Prepaid fee remittance suspension has shifted all of the cost of the E911 emergency system to the postpaid contract subscribers. The legislative intent of having a competitively and technologically neutral3 telecommunication service cannot be obtained, especially when one section of the market is exempted from E911 fee collections while having access to E911 services. The financial implications to the statewide 911 system of this prepaid fee reduction from two providers helps quantify the fee revenue reduction of the E911 Fee collection suspension on prepaid wireless service and explain the reduction in needed E911 fee revenue experienced during the last five years. The Legislature recognized in the statute4 that the fee may not necessarily provide the total funding required for the E911 service; however, because of the prepaid suspension, the E911 fee revenue disbursed to counties only accounts for 52 percent5 of the actual counties’ costs of allowable E911 fee expenditures. An additional five percent of the allowable county costs were covered with the additional funding from the E911 Trust Fund revenues for E911 Board Grants and Special Disbursements. 2 Forecasted projection based on historical trends of E911 Board Wireless Fee Remittance Data and the average monthly disbursements for the last four months. 3 Section 365.172(2)(d), Florida Statutes. 4 Section 365.173, Florida Statutes. 5 Based on actual county and E911 Board data -See 2011 Annual Report Appendix 2 (Percent E911 Fee & Board Assistance of Total Expense.)


1. Significant Impact • In April 2012, the Board was notified that two wireless service providers, currently

remitting E911 fees, reported they have been remitting the Florida E911 wireless fee in error on their prepaid wireless services. Effective with the January 2012 remittance, the companies no longer remit E911 wireless fees on the sales of prepaid wireless services until collections are authorized on July 1, 2013.

2. Financial

• The E911 Board is projecting a decrease in collected revenue of approximately $14.2 million, a decrease of 18 percent6 in wireless E911 fee revenue in calendar year 2012, which directly reduces support for E911 in Florida.

• In 2012, individual county wireless revenue disbursements are projected to decrease dependent on the coverage area of the providers. The largest impact is expected in Miami-Dade with approximately $3.1 million in Fiscal Year 2012-13, a decrease of 37 percent7 of the county’s wireless E911 fee revenue. The projected effect for each county is provided in Appendix 1.

• It is projected that the Rural County Program funding will decrease by $427,000 per year, an 18 percent8 drop in revenue. This will have an adverse effect on the Rural County Grant Program, which provides additional funding assistance to rural counties throughout Florida.

• In recognition of the potential financial implications to the Florida E911 system, one of the prepaid service providers, who stopped collecting and remitting fees, voluntarily discontinued invoicing the Board for E911 cost recovery to reduce the financial impact on Florida’s E911 system.

• The spending authority amounts will not match current projections as there will be a temporary reduction in revenues and expenditures until prepaid collections resume as anticipated on July 1, 2013.

3. Legislative Recommendations Suspension of collection and remittance of the E911 fee on prepaid service is to expire in July of 2013. If the moratorium is extended the decline in E911 funding will continue resulting in a decline in E911 service unless another funding source is identified. The E911 Board has already established a subcommittee to review prepaid legislative issues for potential 2013 legislative action. The subcommittee meetings are being held in conjunction with the 2012 E911 Board meetings and include the telecommunications industry, retail federation, and counties (through their county 911 coordinators). The critical issue being suggested for inclusion in future legislation:

• Removal of the suspension on prepaid wireless service and authorization of the

resumption of the collection of E911 prepaid wireless fee at the point of sale.

6 Forecasted projection based on historical trends of E911 Board wireless fee remittance data and the average monthly disbursements for the last four months. 7 Forecasted projection based on the actual fee revenue disbursements of the actual first six month disbursements of FY 2011-12 compared to the average monthly disbursements for the last four months- See Appendix 1. 8 Based on sub-section 365.173(2)(g), Florida Statutes and the current allocation percentage (3%) of the estimated E911 wireless fee yearly decrease.


C. E911 BOARD The E911 Board, established by the Florida Legislature in 2007, and modified in 2011, is comprised of 11 members. The DMS secretary designates the chair of the E911 Board. The Governor appoints five members who are county 911 coordinators and five members from the telecommunications industry. Currently, there are three open positions. The E911 Board and DMS provide unified leadership for all E911 issues through planning and coordination. The duties and responsibilities of the E911 Board include administering the E911 fee revenue in a fair and consistent manner. D. RESULTS OF E911 DATA EVALUATION

1. Wireless Service Provider Projection Analysis

a. Wireless Revenue Minimal growth was anticipated in the number of wireless subscribers and fees for 2012; however, the additional prepaid wireless service revenue loss became apparent with the notification in April 2012 that the two prepaid carriers had ceased collecting and remitting. That change significantly reduces the wireless E911 fee collections. This is graphed below and is based on the trending and continued exemption on prepaid wireless E911 fee remittances.

Source: Based on E911 Board data

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

Reve

nue

Total Wireless Revenue Reported by Month from April 2010 through April 2012

Wireless Net

Trendline

Actual Remitances

Trend


The E911 wireless fee projection for calendar year 2012 is a decrease in collected revenue of approximately $14.2 million, a decrease of 18 percent9 in wireless E911 fee revenue. The following graph shows the historical wireless E911 fee yearly trending and impact of the continued exemption on prepaid wireless E911 fee remittances.

Source: Based on E911 Board data and projections

9 Forecasted projection based on historical trends of E911 Board wireless fee remittance data and last four months reduced wireless fee remittance data.

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Subs

crib

ers

Actual & Projected E911 Wireless Fee Revenue

Total Wireless Fee Revenue

Original Projection Wireless Fee Revenue

Revised Projection (Projected Decrease

in Wireless Revenue)

2011 Annual Report Projection Actual Remitances


b. Prepaid Wireless Revenue

Prepaid Wireless has been an issue before the Board since 2005; additional information is provided in the Appendix 2 under Wireless Service Provider Prepaid Service – E911 Fee Remittance History. The basis of this year’s reduction is that some service providers have reconsidered the applicability of the E911 fee on their services given the definition of prepaid wireless.

E911 Prepaid Wireless Timeline (Lines indicate start of State Fiscal Year;

E911 Board Fiscal Year)

1999 2013

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

LegislationWireless emergency telephone number

"E911" Established

LegislationPrepaid wireless

telephone service Defined

Legislation Prepaid wireless service E911 fee Suspended until

7/1/2009

E911 BoardPrepaid Wireless Service Report

submitted 12/1/2008

Prepaid wireless service E911 fee Begin Collection

7/1/2009

LegislationPrepaid wireless service E911 fee Suspended until

7/1/2013


7/1/2013

E911 BoardRule

Development Workshops

Attorney General Opinion onE911 fee

remittance12/12/2005


Since 2006, the wireless industry survey10 reported a national growth in subscribers; the percentage varies depending on the year from five to 13 percent each year. One trend line shows the actual historical total of wireless subscribers reported in Florida11. Another trend line is based on the projected subscriber trend since 2005 utilizing the national trend of wireless subscribers12. The difference is related to the subscribers that are not recorded because of the suspension of prepaid wireless fee collections and state and local government wireless subscriber usage13. The stagnant growth rate in Florida’s historical wireless subscriber’s numbers is primarily attributed to wireless subscribers utilizing wireless prepaid services since only postpaid wireless subscribers are recorded. The following graph reported in the 2011 Annual Report has been updated. An additional trend line provides information on the reduction caused by the recent reclassification of post paid to prepaid subscribers by two companies. It has been included in the report to show the decrease in the total of wireless subscribers.

Source: Based on E911 Board data and CTIA survey information.

2. County Projection Analysis

The analysis of the 2011 Annual Report data indicates that the wireless and non-wireless fees which counties received do not cover their actual costs. On average, wireless and non-

10 CTIA-The Wireless Association – 2010 Semi-Annual Wireless Industry Survey Results. 11 Based on the actual subscribers actually remitting E911 fees, E911 Board Historical Data. 12 Based on the calculated percentage decreases total subscribers connections in the CTIA-The Wireless Association – 2010 Semi-Annual Wireless Industry Survey Results. 13 Exact information is not available on the amount of prepaid subscribers and the trend line based on national trend information of wireless subscribers includes State & Local Governments which are exempted in sub-section 365.172(8)(c), Florida Statutes; For purposes of this section, the state and local governments are not subscribers.

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

22,000,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Subs

crib

ers

Projected vs Actual Wireless Subscribers

Projected Wireless Subscribers

Historical Wireless Fee Subscribers

Projected Wireless Subscriber Decrease

Projected Subscribers not remitting fees based

on National Trend


wireless fee revenues covered 52 percent14 of the actual Florida counties’ costs, in the counties’ fiscal year October 2010 through September 2011. The following map provides a representation of the projected percentage decrease in county E911 wireless fee revenues15. Calculations for the estimated average monthly decrease and projections of the yearly decreases for each county including the estimated total $10.3 million yearly decrease in disbursements are provided in Appendix 1. It should be noted that the decrease in revenue information noticed this year is attributable to two wireless service providers and does not show the effect of the total decrease in revenue caused by prepaid suspension. These providers had limited business development in the north-northwest portions of Florida.

14 Based on actual county and E911 Board data - See 2011 Annual Report - Appendix 2 (Percent E911 Fee of Total Expense). 15 Based on the average month disbursements of the actual first six month disbursements of FY 2011-12 compared to the average monthly disbursements for the last four months- See Appendix 1.


The resulting decrease in revenue will reduce the percentage covered by the E911 fee resulting in additional burden on the county’s general revenues. Projecting the impact is dependent on the county budgets and their ability to provide additional funding for the E911 expenditures. The concern exists on what necessary 911 service and needed modifications will not be procured because of the reduction in funding and the negative impact on the Florida’s E911 system. The E911 Board approved a disbursement of more than $6.1 million of trust fund revenues16 to Florida counties in a special disbursement in February 2012. The special disbursement reconciled an overpayment to some counties by a service provider, and it provided additional funding to the counties. This will keep the majority of the counties at their projected funding level for Fiscal Year 2011-12 to help assure funding for E911 expenditures. 3. Rural Counties Projection Analysis The Rural county financial assistance program is required to assure continuation of Enhanced Phase II service in many rural counties. The E911 Board rural county financial assistance program consists of two parts, the Rural County Grant Program and the E911 Board Supplemental Disbursement Program. It is projected that the rural county financial assistance will decrease by $427,00017. This will have an adverse affect on the Rural County Grant Program, which provides needed additional funding assistance to the rural counties for maintenance and equipment for their E911 systems. The E911 Board Supplemental Disbursement Program assists rural counties with low subscriber counts by funding access line and trunking costs, in addition to other associated E911 expenses. Needs are especially apparent on equipment maintenance and circuit costs for rural counties. This program assures that all counties receive a minimum of $7,000 per month. The program costs will increase as a result of the decrease in subscriber E911 fee revenue received by some rural counties. This will result in the need for additional wireless trust fund revenue to maintain the minimum of $7,000 per month. The increased costs to the rural county program are estimated at approximately $40,00018 per year, which will further reduce the amount available for rural county grants. The five-year forecast for funds required to maintain Phase II wireless19 is shown below with the projected decrease in available rural county grant funding. The costs are based on estimated system maintenance, replacement equipment, and additional associated E911 equipment.

16 E911 Board action February 15, 2012. 17 Based on sub-section 365.173(2)(g), Florida Statutes and the current allocation percentage (3%) of the estimated E911 wireless fee revenue yearly decrease. 18 Based on the average month supplemental disbursements of the actual first six month disbursements of FY 2011-12 compared to the average monthly disbursements for the last four months- See Appendix 1. 19 Provided from the 2011 Annual Report.


Source: Based on E911 Board data and projections The E911 State Grant program, while primarily developed for medium and large counties, is needed to assist in the funding availability for the rural counties’ equipment needs. This was witnessed in 2011 and will continue in the future.

4. Wireless Service Provider Cost Recovery Analysis In order to provide the caller location information, the E911 Board approves reimbursement of wireless service provider costs for equipment and circuits20. A letter from one wireless service provider included notification of voluntary discontinuance of cost recovery invoicing for the remainder of Fiscal Year 2011-2012 and all of Fiscal Year 2012-13. The carrier does plan to submit a cost recovery proposal for Fiscal Year 2013-2014 in anticipation that the prepaid E911 fee moratorium will expire on June 30, 2013.

20 Based on sub-section 365.173(2)(d), Florida Statutes.

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2010 2011 2012 2013 2014 2015

Projected Rural County Supplemental Funding and Grants

State Grant Program Assistance

Equipment - Rural County Grants

Maintenance - Rural County Grants

Supplemental Disbursements

Additional Rural County Funding Provided in the State E911 Grant Program

Projected Decrease in Allocated Rural County Grant Revenues

Allocated Rural County Grant

Program Revenues Level


Detailed individual wireless service provider information is confidential and available in accordance with section 365.174, Florida Statutes. Releasable statistical information collected by the E911 Board includes the total wireless service provider costs for 2004 through 2011, total fiscal year data, cost-recovery analysis of actual wireless service provider projections, and actual costs from program inception. The graph below has been updated to reflect the new wireless service provider cost recovery projections.

Source: E911 Board historical data

In 2012, the E911 Board anticipates paying 17 percent21 of the wireless fee to wireless service providers for Phase II implementation and maintenance costs based on their revised cost recovery proposals.

5. Total Cost (Expenditure) and Fee (Revenue) Analysis

This updated analysis summarizes the actual revenues received by Florida counties for wireless and non-wireless E911 fees and counties’ costs to operate and maintain their E911 systems. It includes an updated forecast of these expenditures and revenues based on the systems currently available.

21 Based on decreased projection of E911 wireless fee revenues and modified wireless service provider Cost Recovery Proposals.

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Historical Wireless Service Provider Cost Recovery Data

Actual Payments

Estimated CRP

Includes voluntarily discontinuance of cost recovery invoicing


Fiscal Year 2008-09 2009-10 2010-11 2011-12 2012-13County E911 Expenditures 184,793,977$ 191,220,954$ 192,329,766$ 200,022,956$ 208,023,875$ WSP E911 Cost Recovery 14,639,355$ 13,681,513$ 11,364,158$ 12,431,728$ 11,076,662$

Administration Costs 1,076,199$ 995,211$ 840,071$ 1,000,000$ 1,000,000$

Total E911 Expenditures 200,509,531$ 205,897,678$ 204,533,995$ 213,454,684$ 220,100,537$

Fiscal Year 2008-09 2009-10 2010-11 2011-12 2012-13Wireless E911 Fee 76,692,995$ 77,004,396$ 77,231,842$ 70,928,189$ 64,624,536$

Nonw ireless E911 Fee 51,119,855$ 48,197,585$ 46,100,682$ 44,256,655$ 42,486,389$

Total E911 Fees 127,812,850$ 125,201,981$ 123,332,524$ 115,184,844$ 107,110,925$

State of Florida E911 Expenditures

State of Florida E911 Fee Revenue

Actual Amounts Based on E911 Board and County Documentation Amount Projected Forecasts based on County and Industry Trends

This forecast is based on the projected reduction in revenues based on the wireless provider’s prepaid fee revenue reductions. It is projected that there will be a projected four percent22 decrease in the non-wireless E911 fee revenue and four percent23 increase in county E911 system and operation costs.

Source: E911 Board historical data and projections

22 Forecasted projection based on historical trends of E911 Board data and on County 911 cost data. 23 Forecasted projection based on County E911 cost data.

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

E911 Expenditure and Fee Revenue Forecast

Total E911 Expenditures

Total E911 Fee Revenue

Projected Decrease in E911 Fee Revenue


6. Spending Authority Analysis The reduction in revenue this year significantly affects the reported financial information and the funding requested for spending authority for wireless fee revenue distributions to the counties. The wireless fee revenue disbursed directly to counties based on the current allocation percentage will decrease by approximately $10.3 million per year. It is recommended that the spending authority remain at the current level to provide the E911 Board the opportunity to utilize some of the E911 Trust Fund to offset losses to the counties during the prepaid wireless fee suspension. Also, since the fee revenue suspension is anticipated to be time-limited, until July 1, 2013, a reduction this year would result in a request to increase spending authority next year. 7. E911 Trust Fund Balance Analysis

The E911 Board’s original and updated estimated revenue funds available, based on the reduction in E911 wireless fee revenue, and the funds necessary to implement and maintain E911 service in Florida for this calendar year are presented below.

Anticipated Funds

2012 2012 (Revised)Beginning balance January 1 $ 32,757,068 $ 32,757,068 Receipts Wireless $ 78,845,265 $ 64,624,536 Receipts Nonwireless $ 43,511,046 $ 43,511,046 Interest Earnings $ 1,000,000 $ 1,000,000

Subtotal: $ 156,113,379 $ 141,892,650

Anticipated Disbursements**24

2012 2012 (Revised)Wireless Fee Revenue to Counties $ 55,980,138 $ 45,883,421 Nonwireless Fee Revenue to Counties $ 42,205,715 $ 42,205,715 Rural County Assistance $ 2,160,579 $ 1,665,544 RC Supplemental $ 1,075,000 $ 1,143,413 Service Provider Reimbursement $ 14,258,000 $ 11,081,534 Board Operations/Administration $ 1,000,000 $ 1,000,000 Special Disbursement $ 6,117,098 $ 6,117,098 ENHANCE 911 Act Grant Match $ 270,000 $ 270,000 Interest Disbursement $ 675,000 $ 577,956 E911 State Grants** $ - $ - Subtotal: $ 123,741,530 $ 109,944,681

Projected Ending Balance: $ 32,371,849 $ 31,947,970

It is emphasized that this analysis is cash basis25 and does not reflect the current available balance within the E911 Trust Fund on account of the current Liabilities (Payables to Counties).

24 ** These figures are based on projected disbursements and are contingent on legislative budget authority.


The E911 Board’s original and updated estimates for calendar year 2013 are presented below.

Anticipated Funds

2013 2013 RevisedBeginning balance January 1 $ 32,371,849 $ 31,947,970 Receipts Wireless $ 80,422,170 $ 64,624,536 Receipts Nonwireless $ 41,837,544 $ 41,837,544 Interest Earnings $ 1,000,000 $ 1,000,000

Subtotal: $ 155,631,563 $ 139,410,050

Anticipated Disbursements**26

2013 2013 (Revised)Wireless Fee Revenue to Counties $ 57,099,741 $ 45,883,421 Nonwireless Fee Revenue to Counties $ 40,582,418 $ 40,582,418 Rural County Assistance $ 2,349,416 $ 1,665,544 RC Supplemental $ 900,000 $ 1,143,413 Service Provider Reimbursement $ 13,895,000 $ 12,310,318 Board Operations/Administration $ 1,000,000 $ 1,000,000 Special DisbursementENHANCE 911 Act Grant Match $ 90,000 $ - Interest Disbursement $ 675,000 $ 510,868 E911 State Grants**** $ 8,000,000 $ 8,000,000 Subtotal: $ 124,591,575 $ 111,095,982

Projected Ending Balance: $ 31,039,989 $ 28,314,068

It is emphasized that this analysis is cash basis27 and does not reflect the current available balance within the E911 Trust Fund on account of the current Liabilities (Payables to Counties). **** Anticipated Disbursements E911 State Grants – The amount of funding for the E911 State Grant program is currently being reviewed by the E911 Board for possible utilization of some of these funds for a Special Disbursement to counties to help offset the decrease in county wireless fee revenue.

25 See Financial Report in 2011 Annual Report - Appendix 1. County Reserves in the Financial Balance Sheet Report as of the end of calendar year 2011, included $15,773,830 in fee revenue collections pending Board disbursement approval. 26 ** These figures are based on projected disbursements and are contingent on legislative budget authority. 27 See Financial Report in 2011 Annual Report - Appendix 1. County Reserves in the Financial Balance Sheet Report as of the end of calendar year 2011, included $15,773,830 in fee revenue collections pending Board disbursement approval.


The following graphs depict the E911 Trust Fund and projected decrease of the E911 Trust Fund.



$-

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$30,000,000

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$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

E911 TRUST FUND BALANCE (Cash Basis)

Calendar Year Basis

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

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$80,000,000

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

E911 TRUST FUND BALANCE (Compiled Basis)

Fiscal Year Basis


E. CONCLUSIONS

1. Legislative Recommendations

• The E911 fee should be applied equitably on all communication services.

• Legislation needs to be developed to eliminate the suspension of prepaid service E911 fee collection and to accommodate the prepaid service models.

• The legislation should include definitions of all prepaid calling arrangements and

postpaid mobile service.

2. E911 Board Administration of Percentage Allocation

In accordance with the legislation established in 2007, the E911 Board will be reviewing the amount of the fee to determine if the percentage allocation should be changed.

3. Special Disbursement to Counties for E911

The E911 Board is reviewing the trust fund revenues to determine funding levels for grant programs and to determine if a special disbursement could be authorized from trust fund revenues to Florida counties in January 2013. A special disbursement could provide additional funding to the counties which may reduce the impact of this year’s revenue decreases to the majority of the counties. It is not projected that the funding level for Fiscal Year 2012-13 will be able to be maintained at the previous funding level; however it is being reviewed to help assure funding for E911 expenditures for critical systems for the continued safety of Florida’s citizens and visitors.

F. Acknowledgement

The E911 Board would like to express their sincere appreciation of the Governor and Legislature for their support with Florida’s Statewide Enhanced 911 System.

E911 Board

2011 Annual Report

Prepaid Supplement

Appendix 1.

County Funding Data

Wireless Prepaid E911 Fee Revenue Reduction Impact

Appendix 1Wireless Prepaid E911 Fee Revenue Reduction Impact

2011 E911 Board Supplemental Report Page 1 of 2 8-31-2013

WIRELESS 911 REVENUE DISBURSEMENT SUMMARY

County Name


Disbursement 1st 6 mths 2011-2012

Avg 1 Mth Fee Revenue based

on 6 mths

Avg Mthly Rural County Supplemental Disbursement

based on 6 mths


Disbursement 1st 4 mths

2012

Avg 1 Mth Fee Revenue based on 4

mths


based on 4 mths

Projected County Monthly Fee Revenue Loss

2012-13

Projected County Yearly Fee

Revenue Loss 2012-13

Actual Actual Actual Actual Actual Actual Estimated Estimated EstimatedCounty TOTAL YTD AVG Revenue Supplemental C TOTAL YTD3 AVG Revenue4 Supplemental5 C Difference Yearly Difference % Dif

Miami-Dade $4,180,525.71 $696,754.29 $1,747,838.47 $436,959.62 -$259,794.67 -$3,117,536.01 -37%Broward $2,967,300.09 $494,550.02 $1,452,956.51 $363,239.13 -$131,310.89 -$1,575,730.65 -27%St. Lucie $369,724.77 $61,620.80 $186,381.68 $46,595.42 -$15,025.38 -$180,304.50 -24%Osceola $400,058.26 $66,676.38 $206,611.80 $51,652.95 -$15,023.43 -$180,281.12 -23%Hendry $35,490.50 $5,915.08 $1,084.92 $18,546.28 $4,636.57 $2,363.43 -$1,278.51 -$15,342.16 -22%

Palm Beach $2,046,070.96 $341,011.83 $1,073,722.66 $268,430.67 -$72,581.16 -$870,973.94 -21%Lee $862,392.64 $143,732.11 $453,090.71 $113,272.68 -$30,459.43 -$365,513.15 -21%Polk $763,225.13 $127,204.19 $404,858.13 $101,214.53 -$25,989.66 -$311,875.87 -20%

Monroe $140,125.90 $23,354.32 $74,976.53 $18,744.13 -$4,610.18 -$55,322.21 -20%Hillsborough $2,017,322.02 $336,220.34 $1,080,394.48 $270,098.62 -$66,121.72 -$793,460.60 -20%

Collier $457,613.29 $76,268.88 $250,132.90 $62,533.23 -$13,735.66 -$164,827.88 -18%Pinellas $1,397,520.48 $232,920.08 $783,145.80 $195,786.45 -$37,133.63 -$445,603.56 -16%Martin $215,442.74 $35,907.12 $121,378.93 $30,344.73 -$5,562.39 -$66,748.69 -15%

Manatee $426,903.52 $71,150.59 $241,007.48 $60,251.87 -$10,898.72 -$130,784.60 -15%Orange $1,809,883.82 $301,647.30 $1,024,888.18 $256,222.05 -$45,425.26 -$545,103.10 -15%Duval $1,356,224.39 $226,037.40 $779,967.98 $194,992.00 -$31,045.40 -$372,544.84 -14%

Hernando $209,910.49 $34,985.08 $121,619.18 $30,404.80 -$4,580.29 -$54,963.44 -13%Pasco $623,879.74 $103,979.96 $363,020.73 $90,755.18 -$13,224.77 -$158,697.29 -13%

Brevard $799,812.94 $133,302.16 $465,963.56 $116,490.89 -$16,811.27 -$201,735.20 -13%Indian River $181,287.97 $30,214.66 $106,085.88 $26,521.47 -$3,693.19 -$44,318.30 -12%

Charlotte $196,230.98 $32,705.16 $116,567.56 $29,141.89 -$3,563.27 -$42,759.28 -11%Volusia $672,007.28 $112,001.21 $400,726.39 $100,181.60 -$11,819.62 -$141,835.39 -11%

Sarasota $519,741.11 $86,623.52 $310,580.19 $77,645.05 -$8,978.47 -$107,741.65 -10%Glades $7,499.84 $1,249.97 $5,750.03 $4,523.47 $1,130.87 $5,869.13 -$119.11 -$1,429.27 -10%

Seminole $685,539.78 $114,256.63 $417,137.72 $104,284.43 -$9,972.20 -$119,666.40 -9%Okeechobee $33,182.00 $5,530.33 $1,469.67 $20,239.29 $5,059.82 $1,940.18 -$470.51 -$5,646.13 -9%

Marion $391,448.38 $65,241.40 $238,772.24 $59,693.06 -$5,548.34 -$66,580.04 -9%Clay $278,831.79 $46,471.97 $170,490.85 $42,622.71 -$3,849.25 -$46,191.03 -8%

Flagler $119,296.40 $19,882.73 $73,347.58 $18,336.90 -$1,545.84 -$18,550.06 -8%Alachua $317,732.42 $52,955.40 $196,354.71 $49,088.68 -$3,866.73 -$46,400.71 -7%

Highlands $96,998.64 $16,166.44 $60,163.27 $15,040.82 -$1,125.62 -$13,507.47 -7%Lake $376,781.33 $62,796.89 $235,044.47 $58,761.12 -$4,035.77 -$48,429.25 -6%

Nassau $101,007.33 $16,834.56 $63,237.16 $15,809.29 -$1,025.27 -$12,303.18 -6%Bradford $23,990.01 $3,998.34 $3,001.67 $15,127.09 $3,781.77 $3,218.23 -$216.56 -$2,598.75 -5%Hardee $22,277.65 $3,712.94 $3,287.06 $14,072.04 $3,518.01 $3,481.99 -$194.93 -$2,339.18 -5%Desoto $24,127.91 $4,021.32 $2,978.68 $15,264.88 $3,816.22 $3,183.78 -$205.10 -$2,461.18 -5%Citrus $149,911.57 $24,985.26 $95,652.74 $23,913.19 -$1,072.08 -$12,864.92 -4%Taylor $18,390.64 $3,065.11 $3,934.89 $11,938.37 $2,984.59 $4,015.41 -$80.51 -$966.17 -3%

Holmes $13,841.07 $2,306.85 $4,693.16 $8,994.63 $2,248.66 $4,751.34 -$58.19 -$698.25 -3%Franklin $9,888.04 $1,648.01 $5,351.99 $6,447.68 $1,611.92 $5,388.08 -$36.09 -$433.04 -2%

Levy $40,929.37 $6,821.56 $246.95 $26,704.20 $6,676.05 $416.34 -$145.51 -$1,746.14 -2%Dixie $10,362.44 $1,727.07 $5,272.93 $6,771.03 $1,692.76 $5,307.24 -$34.32 -$411.79 -2%

Appendix 1Wireless Prepaid E911 Fee Revenue Reduction Impact

2011 E911 Board Supplemental Report Page 2 of 2 8-31-2013

WIRELESS 911 REVENUE DISBURSEMENT SUMMARY

County Name


Disbursement 1st 6 mths 2011-2012

Avg 1 Mth Fee Revenue based

on 6 mths


based on 6 mths


Disbursement 1st 4 mths

2012

Avg 1 Mth Fee Revenue based on 4

mths


based on 4 mths

Projected County Monthly Fee Revenue Loss

2012-13

Projected County Yearly Fee

Revenue Loss 2012-13

Actual Actual Actual Actual Actual Actual Estimated Estimated EstimatedCounty TOTAL YTD AVG Revenue Supplemental C TOTAL YTD3 AVG Revenue4 Supplemental5 C Difference Yearly Difference % Dif

Gadsden $42,602.11 $7,100.35 $75.30 $27,839.87 $6,959.97 $167.12 -$140.38 -$1,684.61 -2%St. Johns $277,217.28 $46,202.88 $181,175.57 $45,293.89 -$908.99 -$10,907.85 -2%

Gulf $14,146.80 $2,357.80 $4,642.20 $9,252.11 $2,313.03 $4,686.97 -$44.77 -$537.27 -2%Gilchrist $16,608.88 $2,768.15 $4,231.85 $10,880.52 $2,720.13 $4,279.87 -$48.02 -$576.20 -2%

Baker $23,814.88 $3,969.15 $3,030.85 $15,614.21 $3,903.55 $3,096.45 -$65.59 -$787.13 -2%Washington $19,703.09 $3,283.85 $3,716.15 $12,937.97 $3,234.49 $3,765.51 -$49.36 -$592.27 -2%

Lafayette $5,689.94 $948.32 $6,051.68 $3,738.71 $934.68 $6,065.32 -$13.65 -$163.75 -1%Hamilton $10,115.79 $1,685.97 $5,314.04 $6,653.33 $1,663.33 $5,336.67 -$22.63 -$271.59 -1%Calhoun $10,953.90 $1,825.65 $5,174.35 $7,216.29 $1,804.07 $5,195.93 -$21.58 -$258.93 -1%Liberty $6,298.25 $1,049.71 $5,950.29 $4,155.55 $1,038.89 $5,961.11 -$10.82 -$129.85 -1%Union $10,262.25 $1,710.38 $5,289.63 $6,789.66 $1,697.42 $5,302.59 -$12.96 -$155.52 -1%

Jefferson $14,615.37 $2,435.90 $4,564.11 $9,672.20 $2,418.05 $4,581.95 -$17.84 -$214.14 -1%Wakulla $32,087.06 $5,347.84 $1,652.16 $21,256.07 $5,314.02 $1,685.98 -$33.83 -$405.91 -1%

Suwannee $38,435.52 $6,405.92 $594.08 $25,464.67 $6,366.17 $633.83 -$39.75 -$477.03 -1%Bay $209,051.46 $34,841.91 $138,622.60 $34,655.65 -$186.26 -$2,235.12 -1%

Putnam $66,210.22 $11,035.04 $43,950.86 $10,987.72 -$47.32 -$567.86 0%Leon $341,885.53 $56,980.92 $227,361.02 $56,840.26 -$140.67 -$1,688.00 0%

Santa Rosa $206,201.37 $34,366.90 $137,441.35 $34,360.34 -$6.56 -$78.69 0%Madison $14,865.31 $2,477.55 $4,522.45 $9,910.91 $2,477.73 $4,522.27 $0.18 $2.11 0%Columbia $64,618.68 $10,769.78 $43,152.35 $10,788.09 $18.31 $219.69 0%Jackson $42,854.50 $7,142.42 $43.99 $28,643.05 $7,160.76 $67.67 $18.35 $220.15 0%

Escambia $385,235.88 $64,205.98 $257,782.29 $64,445.57 $239.59 $2,875.11 0%Okaloosa $286,773.87 $47,795.65 $192,307.16 $48,076.79 $281.14 $3,373.74 1%Sumter $91,775.42 $15,295.90 $61,550.11 $15,387.53 $91.62 $1,099.49 1%Walton $69,223.81 $11,537.30 $46,465.50 $11,616.38 $79.07 $948.88 1%

TOTAL BY MONTH $27,671,978.51 $4,611,996.42 $91,925.04 $14,994,579.36 $3,748,644.84 $95,284.39 -$863,351.58 -$10,360,218.94

E911 Board

2011 Annual Report

Prepaid Supplement

Appendix 2.

Prepaid Legislative Data

Wireless Service Provider Prepaid Service – E911 Fee Remittance History

A wireless E911 surcharge was established in 1999, which mandates that issues of E911 planning and implementation be updated to reflect the status of the E911 program. E911 legislation was passed that addressed the rapidly expanding wireless industry and its affect on 911 systems. This legislation established a statewide fee of 50 cents per month for each wireless telephone billed within Florida, to be administered by a State Wireless 911 Board appointed by the Governor.

The State of Florida Wireless 911 Board and now the E911 Board have been trying to determine the methods to collect a fair and equitable E911 fee on prepaid mobile service. Based on the belief that all devices with access to E911 services should pay the fee to support the service, the Florida Wireless 911 Board submitted an opinion request to the Office of the Attorney General concerning certain prepaid issues on August 31, 2005. The Office of the Attorney General provided a response to the Florida Wireless 911 Board on December 12, 2005, stating:

In the absence of any statutory language authorizing the Florida Wireless 911 Board to waive the fee assessed by the Legislature and in light of the affirmative duty imposed by the Legislature on wireless E911 providers to calculate and remit a surcharge, the Office of the Attorney General opines that providers are not relieved of their obligation to remit the E911 wireless fee even when they purport not to have the technology to determine whether a wireless service customer has a sufficient positive balance as of the last day of each month.

The Florida Wireless 911 Board continued to implement the prepaid wireless provisions as incorporated within Chapter 2003-182, Laws of Florida, and clarified by Attorney General Opinion 2005-66 and to work with the prepaid wireless service providers on methods to calculate and remit the fees. At the August 2006 Wireless 911 Board meeting an agreement was reached with a major prepaid provider resolving the dispute in past collections and receipts. The current remittance was based on the following model. The prepaid provider divided the total earned revenue received by the prepaid provider within the monthly 911 reporting period by fifty dollars and multiplied the quotient by the monthly service fee of 50 cents. As part of the proposed 2007 combination of the wireline and wireless E911 legislation, changes in the prepaid language were recommended to clarify the collection methods.

In the 2007 legislative session, the legislature suspended the collections of E911 Fee on prepaid wireless service until July 1, 2009. As mandated in the 2007 legislative language of section 365.172, Florida Statutes, the E911 Board developed and completed a study of prepaid wireless collection methods and determined that a fee should be collected from the sale of prepaid wireless service. The study included an evaluation of methods by which E911 fees may be collected from end users and purchasers of prepaid wireless service on an equitable, efficient, competitively neutral, and nondiscriminatory basis and considered whether the collection of fees on prepaid wireless service would constitute an efficient use of public funds

given the technological and practical considerations of collecting the fee based on the varying methodologies prepaid wireless service providers and their agents use in marketing prepaid wireless service.

The E911 Board completed the Prepaid Study required by the 2007 legislation and recommended collections on prepaid wireless. At workshops during the rule making process the E911 Board determined that legislative changes were required to enable collection of the prepaid wireless fee. The E911 Board Task Force worked with representatives of the parties involved to develop potential legislation to address this issue. The E911 Board recommended delaying the date to start collecting prepaid wireless fees to no later than January 1, 2010.

During the 2010 legislative session, the legislature extended the suspension for collections of prepaid calling card arrangements until July 1, 2013. The legislation also suspended collections of all wireless prepaid service.

With the continued consumer trends from wireless contract services to prepaid arrangements, legislative changes are necessary for collection of the exempted E911 fee revenue. There are a variety of prepaid methods and service plans. Each service offering provides a unique set of fee collection issues. Further action is required to assist in the development of statutory language for the collection of this E911 fee revenue. The E911 fee should be competitively neutral among wireless providers and retailers, applied uniformly, and imposed throughout the state. The development of these proposed legislative changes needs to be completed in 2012. Any changes need to be submitted to the legislature for consideration in the 2013 legislative session in preparation of the expiring suspension provision on July 1, 2013, for collection of the prepaid E911 fee.

E911 Prepaid Wireless Timeline (Lines indicate start of State Fiscal Year;

E911 Board Fiscal Year)

1999 2013

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

LegislationWireless emergency telephone number

"E911" Established

LegislationPrepaid wireless

telephone service Defined

Legislation Prepaid wireless service E911 fee Suspended until

7/1/2009

E911 BoardPrepaid Wireless Service Report

submitted 12/1/2008


7/1/2009

LegislationPrepaid wireless service E911 fee Suspended until

7/1/2013


7/1/2013

E911 BoardRule

Development Workshops

Attorney General Opinion onE911 fee

remittance12/12/2005

E911 Board

2011 Annual Report

Prepaid Supplement

Appendix 3.

Historical Data, Calculation and Projections

E911 Board Appendix 3

EMERGENCY COMMUNICATIONS NUMBER E911 SYSTEM FUND(E911 TRUST FUND)

WIRELESS SERVICE PROVIDER COST RECOVERY HISTORICAL ANALYSIS

2011 Supplemental Report

Cost Recovery Charts Annual Report 8-7-12.xlsx Exhibit 1 8/31/2012

Calendar Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Actual Payments 33,472,070$ 28,224,226$ 16,364,407$ 21,663,297$ 16,030,627$ 15,421,755$ 12,488,905$ 11,023,176$ -$ -$ Estimated CRP 77,040,579$ 49,343,888$ 24,365,120$ 21,039,944$ 26,861,316$ 16,780,574$ 16,535,460$ 15,184,897$ 11,081,534$ 12,310,318$

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Historical Wireless Service Provider Cost Recovery Data

Actual Payments

Estimated CRP


E911 EXPENDITURE AND FEE REVENUE FORCAST


Copy of E911 Expenditure and Fee Revenue Forecast 8-10-12.xls Exhibit 2 8/31/2012

Fiscal Year 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13Total E911 Expenditures 189,985,083$ 200,509,531$ 205,897,678$ 204,533,995$ 213,454,684$ 220,100,537$

Total E911 Fee Revenue 129,374,583$ 127,812,850$ 125,201,981$ 123,332,524$ 115,184,844$ 107,110,925$

State of Florida E911 Expenditures

State of Florida E911 Fee Revenue

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

E911 Expenditure and Fee Revenue Forecast

Total E911 Expenditures



E911 Trust Fund Balance Projections


$‐

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

E911 TRUST FUND BALANCE (Cash Basis)

Calendar Year Basis

2000 2001 2002 2003 2004 2005 200624,467,376$ 42,713,986$ 63,658,248$ 55,106,232$ 60,630,932$ 59,031,739$ 79,876,876$

2007 2008 2009 2010 2011 2012 201386,615,681$ $ 52,739,498 $ 37,905,971 $ 40,481,217 $ 32,757,068 $ 31,947,970 $ 28,314,068

$2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

E911 Trust Fund-chart w FY 8-29-12.xls Exhibit 3 8/31/2012


E911 Trust Fund Balance Projections


E911 Trust Fund-chart w FY 8-29-12.xls Exhibit 4 8/31/2012

2001-2002 2002-03 2003-04 2004-05 2005-06 2006-0755,520,432$ 52,799,485$ 47,258,613$ 57,466,785$ 60,022,397$ 70,054,201$

2007-08 2008-09 2009-10 2010-11 2011-12 2012-1338,162,750$ 17,702,605$ 19,988,994$ 16,734,706$ 13,183,935$ 11,411,558$

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

E911 TRUST FUND BALANCE (Compiled Basis)

Fiscal Year Basis

2011supplemental report e911 board...christopher j. campbell, chair charles c. freeman, vice chair...

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