HomeMy WebLinkAbout8 District Fiber Asset Agenda Item # 8
TRUCKEE DONNER
Pubhc Utility District
WORKSHOP
To: Board of Directors
From: Stephen Hollabaugh
Date: November 16, 2011
Subject: Update on District Fiber Asset
1. WHY THIS MATTER IS BEFORE THE BOARD
The purpose of this memorandum is to provide the Board with an update on the District's
broadband assets and on the status of efforts to lease out existing broadband
infrastructure.
2. HISTORY
• 1999 - 2008: The TDPUD Board of Directors and staff have been working on what has
been coined the "Broadband Initiative" for some time in order to provide the Truckee
community with superior broadband services, including high speed data, IP video and
competitive telephone services.
• 1999 - 2004: The District has drafted numerous iterations of a financial business plan,
of which was approved by the TDPUD Board of Directors and Nevada County LAFCo
in 2004.
• July 16, 2003: District entered into a Dark Fiber IRU Agreement with Sierra Pacific
Communications (SPC) and acquired two strands of dark fiber from Reno to
Sacramento and SPC acquired 16.5 miles of conduit from the District (Conduit
Purchase and Sale Agreement).
• 2000 - 2007: Following Nevada County LAFCo's certification of the Truckee Donner
Public Utility District to provide broadband services, Cebridge Connections filed a
lawsuit in opposition to the certification which effectively stalled the broadband initiative
for 18 months. Following the defeat of this legal challenge, Cebridge Connections
appealed the action to the State Appellate Court of California. In June of 2007, the
Court ruled in favor of Nevada County LAFCo, upholding the initial ruling. With the
filing of the initial lawsuit, and subsequent appeal, the District found it necessary to put
the Broadband initiative on hold due to lack of funding opportunities.
• 2008: District approved a contract with Uptown Services LLC to provide consulting
services consisting of performing an asset inventory, asset valuation and asset leasing
support.
• 2009: The District found that it no longer needed this asset and instructed Uptown to
evaluate a sale to interested parties.
• 2009: Uptown Services prepared an RPF for Leasing of Telecom Infrastructure that
was released on January 12, 2009. The District has received three proposals from
interested parties and is continuing to work with them to fully evaluate their proposals.
• 2009: Response to the Leasing of Telecom Infrastructure RFP was extended to
the first of April 2009. Three response were received.
2009 - Present: Uptown Services helped staff evaluate the RFP's and has started
the due diligence phase with one of the proposers and has continued to work with
that proposer since then.
• 2009 - Present: AT&T became the successor-in-interest to SPC with respect to
the Dark Fiber IRU Agreement, the Maintenance Agreement and the Conduit
Purchase and Sales Agreement.
3. NEW INFORMATION
AT&T and the District Dispute:
A dispute arose between AT&T and the District over the Agreements arising out of the
proper location of the end-points of the dark fiber in Reno and Sacramento and both
parties made numerous claims and arguments related to this dispute.
• AT&T and the District (the Parties) agreed to mediate the Dispute with the
assistance of Honorable Judge James R. Trembath (retired).
• The District and AT&T have negotiated a settlement to the Dispute where the
basic details are:
AT&T and the District Settlement Agreement:
• AT&T consented to the District's assignment of all of its rights, privileges and
obligations to Electric Lightwave, LLC (ELI);
• AT&T assured to provision the fiber strands to ELI at certain specified
locations in Reno, NV and Sacramento, CA;
• ELI has agreed to accept the assignment of District and assume all rights,
privileges and obligations under the AT&T/District Agreements; and
• ELI agrees to comply with all of AT&T's requirements for collocation and
equipment usage necessary to provision the fibers at the specific location for
ELI;
Assignment and Assumption Agreement between the District and ELI:
• District agrees to transfer all interest in the long haul dark fiber (fiber) to ELI for
a sum of one million one hundred thousand dollars ($11100,000)
• ELI desires to assume the Dark Fiber IRU Agreement between AT&T and the
District
• ELI shall assume annual payment obligations to AT&T of $13,333.33 annually
from 2012 through 2022 for a present value (PV) of$123,368.
r
4. FISCAL IMPACT
The total value of this transaction to the District is $1,223,368
• $11100,000 lump sum payment
• Present value of the avoided cost to AT&T is $123,368
5. RECOMMENDATION
Review and receive this report.
Ilk-
Stephen Hollabaugh Michael D. Holley
Assistant General Manager General Manager