HomeMy WebLinkAbout6 Broadband Issues : 6
Agenda Item #
Staff Report
To: Board of Directors
From: Alan Harry, Director of Telecommunications Services
Date: November25, 2003
Subject: Consideration of Broadband Issues; Updated Business Case
Summary
Attached for Board review and action is the latest Proforma for the District's Broadband
Business Unit. This document was originally prepared by District staff and Aggregate
Networks, and was recently updated to include the actual cost of FTTU electronics, Video
and Data costs, Video/Data/Security and Voice revenues and the engineer's estimate for the
cost of constructing the FTTU Backbone and Distribution system.
History
The District has evaluated the opportunity to provide Broadband services to residential and
commercial users within its service territory, and based on the business plan, and thorough
due diligence, has moved into the implementation stage of the project.
We began in 1999 by embracing the idea of the smart community. With the assistance of
Navigant Consulting we prepared our first business plan based on the deployment of a high-
speed hybrid system that would serve the District's need to upgraded water and electric
SCADA systems, leasing capacity to the incumbent cable television operator, USA Media,
and including capacity for the provision of high-speed internet access and business data
services.
Efforts to partner with USA Media were unsuccessful, so we began to consider adding the
provision of video services with those previously studied, serving District SCADA needs and
providing capacity for high-speed Internet and business data services.
Following discussions with public entities that have successfully launched voice services
within their community we added capacity for voice services to be provided by a Competitive
Local Exchange Carrier, CLEC, on a contract basis.
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As the availability of next generation technology became realistic we conducted further
evaluation of the technology available, and its related costs, and concluded that the
deployment of a fiber to the home system would best serve the needs of our community
today and in the future.
Throughout this process we have performed disciplined business analysis and thus have
included in the business plan:
a) Fiber-to-the-Home infrastructure
b) Provide video services through a partnership
c) Provide high-speed Internet& data services through a partnership
d) Provide capacity for the provision of voice services by a CLEC
e) Provide SCADA services to our District
0 Position ourselves to offer other data and control services to District operations
g) Position ourselves to offer other data and control services to residential, business
and governmental customers
In April 2002 the District contracted with Aggregate Networks gain assistance in locating
financing for the construction of the District's Broadband system.
To date Aggregate Networks has assisted District staff in the research and preparation of a
revised Broadband Business Unit Proforma, Project Narrative, securing the assistance of
Barton Creek as Placement Agents for the projects COPs, and other strategic evaluations
and negotiations that have come before us.
New Information
Staff and Aggregate Networks have updated the Broadband Proforma, attached, which shall
be incorporated in the "Book" being prepared by Barton Creek for submittal to Rating
Agencies and Insurers. This Proforma provides for the District to purchase content from
Eagle Broadband for retail sale to both residential and commercial accounts, within the
District's Electric service area, over a Fiber-to-the-Home network.
This Proforma assumes that the Broadband system would begin providing services in the
2"d and 3`d quarters of 2003, with system debt totaling approximately $15 million. Further
assumptions are shown on page one of the Proforma, "Assumptions".
As you can see at the bottom of page 6, under this scenario the District would have a
positive cash flow by year three.
Recommendation
In that this is an update of the District's existing Proforma, no Board action is required.
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0 Public Utility District
R "solution No. 2003- XXX
ADOPTION OF A REFORMATTED AND AMENDED
DEFINED BENEFIT PENSION PLAN
WHEREAS the District maintains a defined benefit pension plan to provide pension benefits for
its employees; and
WHEREAS said pension plan must conform to the requirements of Federal law; and
WHEREAS from time to time Federal law is amended, thus requiring the restatement and/or
amendment of the District's pension plan documents; and
WHEREAS the District employs the services of the Wayne Richardson Company to advise us
regarding pension plan administration and the Richardson Company has advised us of the need
to adopt revised plan documents;
NOW THEREFORE BE IS RESOLVED by The Board of Directors of the Truckee Donner Public
Utility District as follows:
RESOLVED, that the form of amended Pension Plan and Trust effective January 1, 2001,
(the Defined Benefit Pension Plan) presented to this meeting is hereby approved and adopted
and that the proper officers of the Corporation are hereby authorized and directed to execute
and deliver to the Trustee of the Plan one or more counterparts of the Plan.
RESOLVED, that the Amendment No 1 to the Truckee Donner Public Utility District
Defined Benefit Pension Plan (Amendment of the Plan for EGTRRA and Revenue Ruling 2001-
62) presented to this meeting is hereby approved and adopted and that the proper officers of the
Corporation are hereby authorized and directed to execute and deliver to the Trustee of the Plan
one or more counterparts of the Plan.
RESOLVED that the Funding Policy and Method is hereby adopted.
RESOLVED, that Joseph R. Aguera, J. Ronald Hemig, James A. Maass, Patricia S.
Sutton, and Nelson Van Gundy are confirmed as Trustees of the Pension Plan and Trust.
RESOLVED, that for purposes of the limitations on contributions and benefits under the
Plan, prescribed by Section 415 of the Internal Revenue Code, the "limitation year"shall be the
Calendar Year.
RESOLVED, that the proper officers of the Corporation shall act as soon as possible to
notify the employees of the Corporation of the adoption of the Pension Plan by delivering to each
employee a copy of the summary description of the Plan in the form of the Summary Plan
Description presented to this meeting, which form is hereby approved.
f
The undersigned Clerk of Truckee Donner Public Utility District(the Corporation) hereby certifies
that the above resolution was duly adopted by the board of directors of the Corporation on
, and that the resolution has not been modified or rescinded as of the date
hereof:
The undersigned further certifies that attached hereto as Exhibits A, B and C,
respectively, are true copies of Truckee `Donner Public Utility District Defined Benefit Plan as
amended and restated, Summary Plan Description and funding Policy and Method approved and
adopted in the foregoing resolutions.
PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held within the
District on the third day of December, 2003 by the following roll call vote:
AYES:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
J. Ron Hemig, President
ATTEST:
Peter L. Holzmeister, District Clerk