Yes.
My buddy at /\/\ told me he's responsible for starting the roll-out of a P25 system in the city that will be built around the new IP7X infrastructure (the consoles, controlers, & repeaters will be linked via IP networking instead of lease-lines or microwave).
He's not sure what the PD admin has come up with about encryption on their TGID's, but he pretty darn sure that the FD will remain in the clear...