Loading...
HomeMy WebLinkAbout2000-02-01 Agenda Packet - Board TDPUD STAFF REPORT TO: Board of Directors FROM: Alan Harry, Director of Telecommunications Services SUBJECT., Nevada County LAFCo; District Application to Provide Telecommunication Services DATE February 25, 2000 AGENDA # 4 SUMMARY/BACKGROUND: At the District's regular meeting of October 20, 1999, the Board approved the District's Application to Nevada County LAFCo to activate its latent power to provide telecommunications services, and, adopted Resolution No. 9913 initiating Proceedings To Activate A Latent Power To Provide Telecommunications Services. Soon thereafter staff submitted the Districts application, resolution, and draft Telecommunication Business Plan to Nevada County LAFCo for their review. In keeping with the Nevada LAFCo application process, staff recommends that the District submit an approved Business Plan (a.k.a. Telecommunications Business Plan for the Truckee-Donner Public Utility District), and Telecommunications Survey(a.k.a. Truckee-Donner Public Utility District Expanded Services Study)as attachments to the aforementioned Application and Resolution. The `Business Plan"was formally presented to the Board in late 1999, while the `Telecommunications Survey"was presented in summary form at the Districts last meeting, February 16, 2000. Both documents, as well as a memorandum from District Counsel Steve Gross regarding "Operation and Accounting of District Utilities"have been attached for the Board's review. As you are aware, the Board may not make the final decision as to whether or not the District will enter the telecommunications business until we receive Nevada LAFCo approval of our Application To Activate the Latent Power to Provide Telecommunications Services. As such, the District may not complete the system design, secure project financing, prepare plans and specifications, or call for bids to construct the system. However, to continue moving toward providing telecommunications services the District must provide LAFCo with the information necessary to make an educated decision. Following Nevada LAFCo's approval of the Districts application staff will return to the Board for the necessary authorization(s) to move forward. Finally, staff is in receipt of correspondence from Nevada LAFCo's Executive Officer, SR Jones, attached, advising the District that a$5,000 deposit is required for`outside counsel"to assist in the application review process. RECOMMENDATION: 1) Approve the Telecommunications Business Plan for the Truckee-Donner Public Utility District; 2) Accept and Approve the Truckee-Donner Public Utility District Expanded Services Study (Telecommunications Survey); 3) Authorize District General Manager to issue a deposit to Nevada County LAFCo in the amount of $5,000 for the review of the District's application to activate it's latent power to provide telecommunications services. 1 rY 5 G TELECOMMUNICATIONS FOR D • UTILITY DISTRICT ADDENDA Prepared For � • DISTRICT UNPUBLISHED 1'�aY+ 5 "K�tva�l'Y WoRK 0 FEBRUARY 2000 Navi • TELECOMMUNICATIONS BUSINESS PLAN FOR THE TRUCKEE-DONNER PUBLIC UTILITY DISTRICT ADDENDA Prepared For TRUCKEE-DONNER PUBLIC UTILTY DISTRICT Prepared By = Navigant' UNPUBLISHED WORK©FEBRUARY 2000 TABLE OF CONTENTS TELECOMMUNICATIONS BUSINESS PLAN FOR THE TRUCKEE- DONNER PUBLIC UTILITY DISTRICT Apyendix 1 GUIDELINES AND ASSUMPTIONS................................................................................1-1 2 CURRENT TDPUD OPERATIONS....................................................................................2-1 3 TELECOMMUNICATIONS PRODUCTS AND SERVICES TOBE OFFERED BY TPUD.................................................................................:...............3-1 4 EXAMPLES OF INITIATIVES BEING TAKEN BY OTHER CITIES.............................4-1 5 REGULATORY CONSIDERATIONS................................................................................5-1 6 SENSITIVITY ANALYSIS....................................................................................................6-1 r h 3 S 1 1 1 APPENDIX 1 GUIDELINES AND ASSUMPTIONS ACCOMMODATION OF INTERNAL REQUIREMENTS The network requirements of the TDPUD define core network capabilities. Core network costs include infrastructure costs and a (hypothetical) 24 to 48-strand fiber backbone, as a reference framework for a dedicated SCADA network. This is for the purpose of establishing incremental costs corresponding to additional services and functions, as discussed below. ➢ Possible high-speed data requirements of public, educational, and government (PEG) agencies would be accommodated on fiber rings that are separate from the TDPUD' ring. ➢ All TDPUD nodes are to be activated during the initial year of operation. ➢ All telecommunications locations are multiplexed. Electric and Water SCADA, measurement stations are aggregated at telecom nodes. ➢ Savings of $40,000 annually are attributable to reduced energy costs for water storage and pumping station operations, derived through an integrated electric/water SCADA system. ➢ Operational efficiencies and cost savings will be derived within the Electric and Water utilities through enhanced SCADA and network reliability. These benefits are estimated to be$80,000 annually or approximately one percent of revenues. ➢ Although provision is made to accommodate PEG institutions,no revenue contribution or allocation of costs is considered in the baseline TDPUD scenario. EVALUATION OF EXTERNAL MARKET OPPORTUNITIES The business case considers the following services: ➢ Dark Fiber - Lease of fiber capacity (dark fiber) to a telecommunications service provider. ➢ Bandwidth - Provisions to accommodate business customers' telecommunications needs in the form of 3 to 5 MHz (to possibly 100 MHz) bandwidth pipes in conjunction with the data network. ➢ Internet - Mass market, high-speed Internet service, provided in conjunction with a hybrid fiber/coax (HFC)network or other architectures. 1-1 GUIDELINES AND ASSUMPTIONS > CATV - Provisions necessary to make CATV services available to all TDPUD residences. It is prestuned that several municipal CATV service providers would be competing for residential subscribers. > Telephony - Provisions to accommodate telephony in conjunction with an HFC overbuild are to be limited to telephone in conjunction with Internet services (Telephone over Internet Protocol). FIBER DEPLOYMENT The backbone network is comprised of a fiber ring and linear segments as shown in Exhibit 1. The backbone is to provide access to all neighborhoods in the TDPUD serving area and selected communities beyond the current TDPUD serving area. ➢ Backbone fiber cross sections are to be sized in anticipation of long-term requirements. The relatively low incremental cost of the fiber strand (e.g., the difference in cost 1 between installation of 48 versus 96 fiber facilities, or between 96 versus 144 fiber facilities) warrants consideration of the larger cross sections, particularly in view of the uncertainties in market demand for bandwidth, the number of video service providers, = and the rapid expansion of demand for information technology and telecommunications services. { ➢ The backbone network topology is defined by connections between CATV node points, and between TDPUD facilities and Electric Utility substations. 1 ➢ The distribution network is defined by;coaxial cable runs emanating from fiber nodes to provide access to homes throughout the residential community. t ➢ Backbone sections comprise approximately 35 miles, and the distribution sections will comprise approximately 110 miles when all home are passed. 't ➢ The fiber is predominantly aerial, utilizing TDPUD right-of-way and poles. limited x underground sections are utilized in the downtown area. SCADA/PEGIBUSINESs NETWORK The following entities are to be accommodated by the TDPUD data network: > TDPUD Electric Utility ➢ TDPUD Water Utility ➢ Other Utility Districts > Education Institutions & School Districts 1-2 GUIDEL➢NES AND ASSUMPTIONS ➢ Public Institutions (e.g., Hospitals & Libraries) ➢ Municipal and County Governments ➢ Large Businesses ➢ Small Businesses (Aggregated Nodes) Locations requiring extensions are to be served by a minimum of 12 fibers, of which 6 are to be spliced initially. Dual entrance is not required. 1-3 P APPENDIX 2 CURRENT TDPUD OPERATIONS TDPUD, as a local agency with a long-term service record, furnishes electricity to 8,700 customers and water to 6,400 customers in the Truckee area. ' As reflected in its mission statement, TDPUD is committed to the well-being of the Truckee community; bringing innovation, competence and trustworthiness in the delivery of water and electric services. TDPUD, as a non-profit, publicly owned utility, is governed by officials elected by District voters. TDPUD's policies and rates are established by the Board of Directors, which conducts studies and assesses implications of new legislation and alternatives. TDPUD is a member of the Northern California Power Agency (NCPA), which provides schedule coordination, engineering, and regulatory services support. The District is a participant in the Truckee River Operating Agreement (TROA) governing the quantity of water that can be diverted and depleted from the Truckee River Basin. The District service area encompasses the following communities: Community Electric Water Downtown Truckee x X Armstrong Tracts x x Biltz Tract x x Donner Lake x Gateway x x Glenshire (portions) x Meadow Park x x Olympic Heights x x Ponderosa Palisades x x Ponderosa Ranchos x x Prosser Heights x x Prosser Lakeview x x Sierra Meadows x x Sugar Pine Estates x Tahoe Donner x x Sierra Pacific Power Company and Pacific Gas and Electric serve surrounding areas. Del Oro Water Company serves Donner Lake; Glenshire residents receive water from the Glenshire Mutual Water Company. 2-1 CURRENT TDPUD OPERATIONS Growth in the TDPUD's service territory has been consistent for the past twenty years. The population of Truckee is growing at a rate of approximately 2.5 percent, and is expected to continue for the foreseeable future. This growth will add approximately 300 new homes per year to the customer base; and commercial growth is expected to continue at a comparable pace. ELECTRIC SYSTEM TDPUD purchases its energy through bilateral contracts with entities outside the Truckee area,primarily Idaho Public Power. Power is brought to the TDPUD's four substations and one metering point over Sierra Pacific Power Company's transmission system. Power is then distributed over the TDPUD's fifteen circuit arrangements to its 8,700 electric- customers. TDPLD anticipates that it will be doing business with a different set of entities and evolve new relationships with its customers as competition replaces the traditional monopoly. structure: ➢ Customers will be responsive to lower prices, increasingly reliable service, quicker reaction to outages, more convenient business practices, and knowledgeable customer service representatives. ➢ TDPUD will need to remain price competitive for the services that it provides. WATER SYSTEM TDPUD acquires its water from deep aquifers within the Truckee groundwater basin area.. Water is transported to Truckee's high elevations through a series of pump stations and stored in strategically placed water tanks located throughout the community. The water system is designed to maintain high pressure for fighting urban fires as well as for all domestic water uses. Access to water supplies will likely become more extensively regulated in the future and be subject to quantity limits. TROA will constrain the development of future wells, and resources available throughout the Truckee River Basin. ➢ The quality of the water in the groundwater basin is critical to keeping water costs low. A groundwater management program, in conjunction with other users of the basin, may be required. ➢ Limitations on water supply will require conservation measures in the future. As such, there will be increasing pressure to implement a metered water rate. Opportunities for cost saving through efficient energy management of pumping stations have been identified;but this requires integrated electric and water SCADA operations. 2-2 APPENDIX 3 TELECOMMUNICATIONS PRODUCTS AND SERVICES TO BE OFFERED BY TPUD The TDPUD market for telecommunications service includes: ➢ Residential customers who could benefit from price competition and enhanced service quality. ➢ Large institutions and businesses desiring to establish their own alternate access arrangements,and small businesses. ➢ Intermediaries, such as long distance inter-exchange carriers (IXCs), competitive local exchange carriers (CLECs), competitive access providers (CAPS), Internet service providers (ISPs), and CATV service providers Initially four types of telecommunications services are be offered by the TDPUD: ➢ High-speed data transport ➢ Internet data transport ➢ Cable television ➢ Lease of dark fiber These services are to accommodate the growing telecommunications needs of the greater Truckee area,and are discussed, in turn, in the following sections. HIGH-SPEED DATA TRANSPORT High-speed data transport on fiber optic SONET systems are to be offered on a wholesale basis to the PEG and business community. It is anticipated that high-speed digital lines will be available from point-to-point in standard and non-standard arrangement, including DSl (1.5 MHz), 3 to 5 MHz bundles, DS3 (45 MHz), and possibly higher capacity connections — up to 100 MHz. The lines will be available on a non-discriminatory basis to local and long distance carriers, local value-added service providers, and local businesses. The availability of these lines, at an estimated cost of less than half the existing comparable high-speed copper lines, could bring choice and price competition to the greater TDPUD business community. ➢ TDPUD Applications - The needs of the electrical transmission and distribution sections of TDPUD will be addressed, with transport services to all substations. The optical fiber backbone facility will be capable of accommodate growing utility 3-1 TELECOMMUNICATIONS PRODUCTS AND SERVICES TO BE OFFERED BY TDPUD requirements for system control and data acquisition (SCADA), high speed data transport, and interconnection of the Electric Department's substations. ➢ Business Applications - Lines between offices are to be available for teleconferencing, data networking, image transfer, or telephones. New leased lines will be provided to customers within shortened intervals. Customers will have low-cost access to telephone service providers. Individual businesses will benefit from competitive prices and prompt service. Redundant fiber optic paths are be utilized to provide highly reliable transport service. ➢ Private Data Networks - Data network applications are anticipated to be the most common application on the system, meeting the performance and growth expectations driven by business computer use. The system will meet the reliability and security needs of critical business applications. Data lines will be extended directly to inter- exchange carriers allowing them to competitively reach customers without using the local exchange carrier. Long distance carriers could have the ability to offer local telephone service directly to customers by providing dial tone and switching service over the fiber SONET system. These interconnections with regional communications companies could provide more choices to customers. Access to alternate central offices and alternate points-of presence (POPs) may be available to businesses. ➢ Value Added Services-Providers of value-added service are to obtain high-speed lines and provide custom telecommunications applications. For example, value-added service providers can design, install and configure a business wide area network, composed of several local area networks linked with routers, which convert local area network signals for transmission on the SONET system. ➢ High-Speed Transport Service for Local Schools and Public Safety - The high-speed telephony and data transport network will be constructed to meet the transport needs of primary and secondary schools, junior colleges, public safety offices, other special districts, and libraries, if they so desire. These offices can use transport facilities for expanded internal communications and their services to the community. INTERNET DATA TRANSPORT Internet data transport would be offered on the hybrid fiber coax (HFC) system in partnership with Internet Service Providers (ISPs). Cable modems provide a data connection directly to the ISP, bypassing the telephone network, enabling high-speed Internet access for homes and small businesses. Subscriber could use Internet services for entertainment, education, and shopping for other products and services, with delivery of information in the form of multimedia text, images, animation,sound and video. ➢ Cable Modems vs. Standard Telephone Lines - Cable modems deliver data up to 1,000 times the speed of standard telephone lines. Customers could quickly search and retrieve information such as stock quotes, weather reports, and headline news. 3-2 TELECOMMUNICATIONS PRODUCTS AND SERVICES TO BE OFFERED BY TDPUD Providing high-speed capability removes restrictions of telephone lines on size and complexity of Internet features, and frees the telephone line and network for telephone calls. Home computers could be continuously connected to the Internet, performing work without impacting telephone use. Restoring the household telephone for traditional use could also preserve the current flat-rate local telephone billing system. ➢ Cable Modems vs. ISDN-Integrated Services Digital Network (ISDN) was invented to make digital service available in the telephone network to homes. Cable modems provide approximately 100 times the speed of an ISDN line used for data. As home services become digital, the quality and variety of services the telephone network can deliver increases. ISDN enables many new telephone services, as well as data speeds of 144 KHz, two to four times the speed of standard telephone modems. As with common telephone lines, ISDN lines are switched circuits, tying-up capacity while the line is in use. ISDN lines have the same inherent impacts that standard telephone lines have on telephone network availability when used for Internet access. ➢ The following table illustrates TDPUD's sample ISP (Internet Service Provider) offering as compared to other services currently available in the Truckee area. ISP Type Speed Cost Per Month ($) (bits per second) TDPUD Cable Modem 10,000,000 30.00 Telis Dial-up 1,200 to 28,800 19.95 Siena Net Dial-up 1,200 to 28,800 25.00 The GRID Dial-up 56,000 $19.95 AOL Dial-up 1,200 to 28,800 19.95 to 21.95 Compuserve Dial-up 1,200 to 2,8800 $21.95 ➢ One-Way Cable Systems - Competing products, which deliver high-speed data, such as Direct Broadcast Satellite or Cable Data on one-way cable systems, continue to use telephone lines for the return path. Use of such products tends to exacerbate the already overloaded telephone system. 3-3 TELECOMMUNICATIONS PRODUCTS AND SERVICES TO BE OFFERED BY TDPUD CABLE TELEVISION Offering full service cable television directly to local homes could bring price, programming, picture quality, and service-level competition to the greater Truckee area. The system that delivers Internet data transport service also provides cable television. The use of fiber optics optimizes system operation and performance. TDPUD could offer a wide range of programming, including local broadcast, news and information, sports, arts and entertainment, movies, family, as well as public access, education, and government (PEG channels). ➢ Basic Channels - The basic tier offers channels received from local commercial broadcasters (ABC, CBS, FOX, NBC, PBS, UPN & WB), community-access programs, municipal television, local educational channels, and a television guide. The approximate cost could be $10.00 per month. The incumbent provider does not currently offer a service tier of this type. ➢ Expanded Basic Channels - The total price for this package could be approximately $15.00 per month for 21 channels including the basic cable channels, 30 channels of digital music, and a converter box offering access to pay-per-view movies and events and Web surfing.The incumbent provider does not offer a service tier of this type. ➢ Super Expanded Basic Channels - Super Expanded Basic channels includes basic and expanded basic channels, for a total of 48 channels at a total price of$30.00 per month. This compares with the incumbent's offering of$38.68 for 36 channels. ➢ Premium Channels - Premium channels such as HBO, Showtime and Starzl are included would be favorably price by comparison to services currently provided. DARK FIBER The Attributes of Dark Fiber - Dark fiber is a passive material, requiring only minimal operations and administration support. The lease or sale of dark fiber capacity places primary responsibility for applications and installation of electronics in the hands of the intermediary (e.g., CAPs) or end-user. The user may choose to use fiber to transport massive amounts of bandwidth (e.g., OC-3, OC-12, and OC-48) via high-powered (and costly) electronics—in which case the cost of fiber is no object—or the fiber may be used to transport low-speed data as a highly reliable, wire-like commodity, in which case cost is a critical factor. A tradeoff between the cost of fiber and the cost of electronics comes into play—high cost fiber installation shifts attention towards more sophisticated electronics for the same basic application. The elasticity of fiber demand reflects the substitution of electronics for fiber capacity. The ability to install and utilize more fiber strands allows the use of less expensive electronic equipment. Conversely, higher prices for lease of dark fiber will result 3-4 TELECOMMUNICATIONS PRODUCTS AND SERVICES TO BE OFFERED BY TDPUD in use of more expensive electronics to reduce the required number of strands to achieve a market objective. Prices in other communities that offer dark fiber range from $200 to $40 per strand-mile per month, as shown below. Fiber Strand Price($/Fiber-Mile/Month) Municipality SRot Price Best Price Rationale Palo Alto' 222(178) 185(148) Reduce prices by 20 percent Burbank' 175 135 Scarce resource,bandwidth goal Eugene,OR 150 100 Test market initially Longmont,CO 4 37 Economic development tool Williams 125 83 CLEC experience Alameda - - Offering frozen at 4 fibers PacBell Not offered.Engineering request r Conduit Prices Based on 4 Inch Diameter Shell($/Mile/Month) PacBell 20 120 Locations dependent San Francisco 440 Williams'estimate 'The City of Palo Alto has installed a network for the sole purpose of leasing dark fiber.The spot fiber price,as cited in its marketing brochure, is $2,591 per fiber-mile per year, corresponding to $216 per fiber-mile per month. Various bulk discounts are offered, with a minimum discounted price of$86 per fiber-mile per month. Demand from CLECs and CAPS,the primary market for dark fiber,has not yet materialized. 'The City of Burbank has leased fiber at $175 per month,but only a small percentage of total capacity has been leased. 3-5 APPENDIX 4 EXAMPLES OF INITIATIVES BEING TAKEN BY OTHER CITIES Glasgow, Kentucky Glasgow has established a citywide network with broadband capabilities that would otherwise not available from either the local telephone or cable television companies. Glasgow has considered the municipal-owned broadband network as the economic engine to power the community into prosperity during the coming information age. The two elements that provided the economic justification for the project were electric energy management and. competitive cable television. Today competitive cable television and telephone are available; and a 4 MHz per second citywide computer network ties together all Glasgow homes, schools, businesses and government agencies. ➢ The citywide network connects stand-alone PC's and file servers with their associated workstations in any home or business throughout the city. ➢ The network is also connected to a T-1 circuit that allows anyone on the Glasgow network to have 1.5-megabit speed access to the Internet simply by clicking on the Netscape icon to establish the connection, without any connection to a telephone or a telephone modem. ➢ The system is used to synchronize traffic signals in town so streets carry the optimum amount of traffic, thus achieving higher efficiency in the investments the city has made in streets,roads and highways. Ashland,Oregon The City Council adopted the goal of building a fiber optic ring with an initial focus on improving electric utility efficiency with automated meter reading, load control, substation management, and outage detection. Ashland's fiber optic network now provides a telecommunications infrastructure that would not otherwise have come to the community. The network meets the municipal-owned electric utility's need with respect to positioning for electric deregulation; provides high quality telecommunications services to the public; and helps reduce utility operations costs. Cable TV services provide an additional $3.2 million in revenue for -- an additional capital cost of$1.5. 4-1 The Internet connection is the fastest available. Software companies are creating state-of- the-art products to make use of the network's capabilities. The network is long-term economic development tool by: ➢ Enabling local businesses to compete more effectively. ➢ Providing PEG institutions and large businesses significant opportunities to utilize new technology to reduce costs, improve service and implement distance learning and training concepts. ➢ Providing the City's schools with unparalleled access to high-speed data and video. ➢ Giving the local college's off-campus students and faculty high-speed data solutions. ➢ Enabling the hospital to improve its service to the community ➢ Providing residents a choice for Cable TV programming. ➢ Providing high-speed data access to the home -- significantly enhancing the community's growing numbers of home businesses. Alameda. Califomia The City, situated on a 12.4 square mile island, operates a municipal electric utility. The electric distribution system is comprised of 94 miles of overhead circuitry and 92 miles of underground circuitry. Alameda's population of 80,000 experienced significant growth. It is a wealthy community, with half the households having incomes over $50,000 and with, an average household income of$68,000. The City has adopted an aggressive approach to telecommunications market entry: ➢ Alameda is offering cable television and Internet services to residential users and providing telephony to government institutions. ➢ Internet service is being provided to public and private schools, and excess fiber capacity (dark fiber) is being leased to commercial providers. ➢ Alameda's strategy was to overbuild the existing CATV plant of TO and offer competitive CATV services. Construction of a two-way hybrid fiber/coax system began in January 1998 and is now complete, with a capital investment of approximately $8 million. A break even level of 4,500 customers was anticipated by the year 2000. A fiber optic ring was also installed in 1996 for internal use and for a lease through a competitive access provider and that already has achieved a break-even threshold. Responsibility was assigned to the Bureau of Electricity that hired marketing and operations personnel. 4-2 To this point, the City has attracted over 200 high tech companies as evidenced by a concentration of software programming networking, and peripherals manufacturing, biotech and related service opporttudties. It developed Alameda Point,what used to be the Alameda Naval Air, which is undergoing conversion to private and commercial uses,with nearly 3 million square feet being converted into commercial facilities and another 3 million square feet available for new development. } i i i i 4-3 _a APPENDIX 5 REGULATORY CONSIDERATIONS There does not appear to be any obstacle at Federal or State levels that would prohibit the District's entry into the telecommunications market, either as a provider of services, a participant in a joint venture relationship or partnership, or as a facilitator to promote telecommunications infrastructure development. ➢ Federal Guidelines - The Telecom Act of 1996 encourages new entrants—including Districts--into telecommunications to stimulate competition. Districts possess the requisite legal authority to undertake the installation, operation, and maintenance of a broadband communications network serving internal and public needs. Interconnection and unbundling of network elements has reduced barriers to entry. But municipalities and Districts must be mindful of level playing field issues. A five percent franchise fee has been incorporated in the business case analysis to ensure that the Town of Truckee would maintain its source of revenues from the CATV franchise. ➢ State Guidelines - California state statutes do not require a District or publicly,.owned utility to obtain approval or authorization from the California Public Utility Commission (CPUC) before becoming a telecom operator. Cities and other public jurisdictions (including public utility districts) are not under the jurisdiction of the CPUC and do not require a Certificate of Convenience for selling common carrier services or any advanced telecommunications services. ➢ County Guidelines-The development of a District broadband communications system requires compliance with applicable provisions of the Local Agency Formation Committee (LAFCO). ➢ TDPUD Charter - The TDPUD's charter does not impose any restrictions on the provisioning of telecommunications services. 5-1 e 3 APPENDIX 6 SENSITIVITY ANALYSIS Sensitivity analyses were undertaken to assess the impact of possible shortfalls in revenues due to lower revenue per household and lower than anticipated subscriber demand. 30 Percent Reduction in Revenues Per Subscriber In this scenario, fierce competition from Satellite Television and the incumbent carrier forces a 30 percent reduction in average revenue per subscriber to hold market share. In this case total annual revenues increase from $1.0 million in Year i (versus $1.3 million in the base case) to $3.5 million annually in Year 15 (versus $4.8 million in the base case). Operating expenses increase from $1.0 million (versus $1.1 million) to $2.1 million (versus $2.3 million) during the corresponding period. Operating margins, the difference between Revenues and Operating expenses are positive throughout the period, increasing from $ $15,000 (versus$236,000) to$1.5 million(versus $2.4 million)during this time span. Net Income,including loan origination fees and interest payments,is negative for the initial four-year period, but turns positive in the fifth year and continues to increase over the 15- year horizon. Earning approach $500,000 by the eighth year, $800,000 in the 11" year, and more than$1.1 million in the 13`"year. 75 Percent Reduction in Subscribers in First Year; 50 Percent Reduction in Subscribers in Tenth i In this scenario,due to competitive forces and lack of subscriber interest, adequate demand fails to materialize, particularly in the formative years. Only 25 percent of the estimated subscriber base are realized in the startup phase (6 percent of homes passed),reaching only half of the estimated subscriber base in the tenth year (25 percent of homes passed). In this case total annual revenues increase from $500,000 in Year 1 (versus $1.3 million) to $3.1 million annually in Year 15 (versus $4.8 million). Operating expenses increase from $800,000 (versus$1.1 million) to$1.9 million (versus $2.3 million) during the corresponding F period. Operating margins are negative for the initial four-year period, with losses decreasing from $300,000 to $100,000 during the period; but margins turns positive in the fifth year and continue to increase over the 15-year horizon, from $ $11,000 (versus ' $236,000) to$1.2 million(versus$2.4 million) during this time span. a Net Income,including loan origination fees and interest payments, is negative for the initial ' nine-year period,but turns positive in the tenth year and continues to increase over the 15- year horizon. Losses are over $900,000 in the first year, but decrease to $200,000 by the eighth year. Earnings approach $200,000 in the 11t° year, and reach more than $600,000 in the 13"year. The sensitivity analysis indicates that there is substantial latitude in achieving business success. Even revenues are slashed by 30 percent to business is viable. It would take 6-1 SENSITIVITY ANALYSIS drastic reductions in estimated subscribership to undermine the viability of the telecommunications enterprise over the long term. The staying power of the TDPUD can sustain the business during unanticipated problems encountered during the formative years,until the business matures and revenues are secured. Alternative Construction Scenarios The TDPUD network utilizes an aerial system. An alternative, underground route is also available along Donner Pass Road.' Consideration was given to utilization of this underground route as a means of cost reduction and construction avoidance. Use of underground facilities is not recommended for the following reasons: ➢ Construction cost savings would not be material. The cost of fiber would be virtually the same, whether underground or aerial infrastructure was utilized. Savings in fiber placement on the TDPUD's existing poles would be offset by the costs of pulling fiber, and installation of additional attach points(involving manholes or handholes). ➢ Use of conduit for the backbone could result in stranded capacity for long-haul telecommunications network applications. As such, the opportunity costs of tying-up conduit capacity would overshadow any short-term benefits. • The potential value of TDPUD's two two-inch conduits should be considered from a construction-avoidance perspective. • An equivalent 16-mile two-inch conduit would at a cost of approximately $30 per foot to construct,with a corresponding construction avoidance value of approximately$2.5 million for each conduit pathway. ➢ If, during the next several years, these two conduits were sold at a construction avoidance value of $5 million (or more), these revenues could be applied to retire TDPUD's Certificate of Participation obligation. If this were realized, the net cost of TDPUD telecommunications network would,in effect,would be reduced accordingly! Provision has been made for use of underground conduit in a 2,000-foot segment along Donner Pass Road where aerial facilities may not be available. 'This does not take into consideration cost savings realized by the electric utility in installation of electric conduit. 6-2 530 587 1 3 16 FEB-25-2000 11.47 PORTER SIMON 530 587 1316 P.02i07 F IDUM IDATE. February 2S, 2000 eter Holzmeister, General Manager teve Gross, General Counsel peration and Accounting of IDistriet $,Ttilaties I. Issues Presented A. May profits (income in excess of expenses) from the operation of a telecommunications utility/department be used to support the electric and water systems? B. May one of the District's utilities Iease excess capacity to another District utility? II. Conclusion A. As is discussed in greater detail below, the District's electric, water and telecommunications (assuming that such a utility is created) utilities must be self-sustaining and accurate books and records of the ownership,operation and cost of each utility must be maintained. Therefore, as a practical matter,profits from one utility should not be used to support the District's other utilities. However, the Board has the authority and discretion to determine a fair apportionment that each utility should contribute to pay for the common expenses of the District_ Additionally, the Board may appropriate funds from the operation of a utility into a reserve fund; and,when certain conditions are met,it may appropriate excess reserve funds into the general fund. The general fund may be used to pay for the salaries and expenses of the District common to all of the District's utilities. This could have the overall effect of lowering the cost of the common expenses of the District that would be chargeable to each of the utilities- B. Although the Public Utilities District Act is silent on this precise issue,it appears that one District utility may lease excess capacity to another District utility. While the District has the authority to own or operate utilities,there is no express requirement that the District own facilities or utilities that it operates. Additionally, the Public Utilities District Act suggests that the District should use its facilities,works or utilities to their fullest capacity for the benefit of the District or its inhabitants before it uses surplus facilities to provide services outside the District's boundaries. The District has historically engaged in this practice in as much as the electric utility owns several assets, 530 58? 1316 FEB-25-2000 11:48 PORTER SIMON 530 587 1316 P.03i0? PAGE 2- ................................................................................................................... such as the office building and garage, that it leases in part to the water utility and to the Town of Truckee. III. Law and Analysis A. May profits (income in excess of expenses) from the operation of a telecommunications utility/department be used to support the electric and water systems? I. Operation of the District's Utilities The Public Utility District Act, Public Utilities Code §15501, et seq., (the "Act") states that the District may acquire and operate a number of different types of utilities, including light, water, power, heat, transportation, telephone service, or other means of communication,garbage disposal,sewage disposal,firefighting,street lighting,public parks,public playgrounds, golf courses,public swimming pools,public recreation buildings,a drainage system, curbs, gutters, sidewalks, and pavement of streets. The Act considers each of these to be a separate "utility". Public Utilities Code §§ 16461, 16463. In addition, the District may do all things necessary or convenient to the full exercise of the powers granted to it. Public Utilities Code § 16461. The Actrequires that water,electric and telecommunications utilities be operated as revenue- producing utilities, on a self-sustaining basis. Public Utilities Code §16467 provides: Only revenue producing utilities shall be acquired, owned, or operated by a district. So far as possible the board shall fix such charges for commodities or service furnished by any revenue producing utility as will pay all of the expenses of the government of the district, or such portion as the board determines justly apportionable to such utility. The expenses to be paid include: (a) Salaries, office expenses, and other necessary disbursements. (b) The operating expenses of the utility_ 530 587 1316 PEB-25-2000 11:48 PORTER SIMON 530 587 1316 P.04i07 PAGE 3- ................................................................................................................... (c) The interest on any indebtedness incurred for the acquisition, construction, and completion of the utility. (d) Provisions for a sinking or other appropriate fund for the payment of the principal of such debt as it becomes due. (e) Provisions for an appropriate fund for repairs, replacements, and betterments. It is the intention of this section that a district pay all of such charges and expenditures and the interest and principal of its debt from the revenues derived by the district from the operation of its public utilities,and that each public utilitv owned and operated by a district shall be self_ sustaining. (Emphasis added.) As §16467 indicates,the Board is directed to charge for a particular commodity or service such amount as will pay for the expenses of the District or an amount "as the Board determines justly apportionable to such utility" such that "each public utility owned and operated by a district shall be self-sustaining." There is no further statutory guidance on how that determination should be made or on what factors it should be based. As long as the apportionment is fair and just it should be lawful. Public Utilities Code §16467.1 provides that some types of utilities do not have to be operated on a self-sustaining basis. These include fire departments, street lighting systems, public parks, public playgrounds, public swimming pools, public recreation buildings, building used for a public purpose and works to provide for the drainage of roads, streets and public places. I Bookkeeping and AecountinaRequirements for the District Several sections of the Public Utility District Act set forth requirements for the bookkeeping and accounting of the District's financial data. Specifically Public Utilities Code § 16601, provides that all "[R]eceipts from the operation of a public utility shall be paid daily into the treasury of the district in a special fund set aside for such [individual] public utility." Of 530 587 1316 FEB-25-2000 11:48 PORTER SIMON 570 587 1316 P.05i07 ....................... ...................... PAGE.- ................... ................................................... Particular note in this section is the Act's use of the term"special fund"rather than the term"general fund.' Additionally, Public Utilities Code § 16602 provides The board may from time to time make appropriations from individual public utility funds for the following purposes: (a) The payment of operating expenses of the public utility and all or such portion of the general salary and expense fund of the district as the board determines is justly apportionable thereto. (b) Repairs and reconstruction. (c) Payment of interest and sinking fund on the bonds or indebtedness incurred or assumed for acquisition, construction, or completion of the public utility. (d) Extensions and improvements. (e) A reserve fund. Public Utilities Code § 16603 provides: Whenever a reserve fund exceeds one-half of the payment for operating expenses in the preceding fiscal year, the board may appropriate such excess to the general fund. Public Utilities Code§ 16604,which describes the requirements for the contents ofthe books of account, provides: The books of account of the district shall show all of the following: (a) The true and complete financial results of the ownership and operation of each public utility. (b) The actual cost of each public utility. 530 587 1316 PEB-25-2000 11:49 PORTER SIMON 530 587 1316 P.06i07 PAGE 5- ................................................................................................................... (c) All costs of maintenance, extension, and improvement, and all operating expenses of every description. While the Act allows the Board to make appropriations from individual public utility funds for a reserve fund,and for the Board to appropriate such reserve funds to a general fund when such reserve fund exceeds one-half of the payment for operating expenses in the preceding fiscal year (Public Utilities Code§§ 16602, 16603),the terms"reserve fund" and"general fund"are not defined with precision in the Act. The lack of clarity in defining of these terms, together with the use of the term "special fund" creates ambiguity and difficulty in interpreting these statutes. The term "reserve fund" as used in § 16602 is not defined as either a reserve fund for the particular utility or for the District. However, since the amount of the reserve fund can be limited based on the operating expenses for the previous year, it appears that the intent of the statute is to provide for the creation of a reserve fund for the particular utility(s). Although if the Board wanted to create a general reserve fund for the District,it does not appear that it is prohibited from doing so. Similarly,the term "general fund" as used in§ 16603 is not defined as either a general fund for the particular utility or the for the District. However,the term"general salary and expense fund of the district" is referred to in § 16602(a). This suggests that the District may establish a general fund for the District as a whole. The purpose of the monies in that fund would be to pay for the salaries and expenses of the District. Each utility would contribute to that fund an amount that is fairly apportioned to it by the Board. This interpretation is strengthened because§ 16603 uses the term"general fund"rather than "special fund",as is used in§ 16601. If,the legislature had intended to authorize the Board to return excess reserve funds to the "special fund" for the particular utility from which it was originally generated,as opposed to the"general fund',then it would have used the term"special fund" and not "general fund." Thus, there appears to be an intent to allow for the creation of a general fund for the entire District. B. May one of the District's utilities lease excess capacity to another District utility? As is stated in Public Utilities Code §§ 16461 and 16463,the District may acquire, construct, own,operate, control or use works for utilities and do all things necessary or convenient 530 587 1316 FEB-25-2000 11:49 PORTER SIMON 530 587 1316 P.07/07 PAGE 6- ..................................................................................... to the full exercise of its powers. Additionally, pursuant to § 16467, the District is required, with some exceptions, to only acquire, own or operate revenue producing utilities. There is no requirement set forth in these sections,or other portions of the Public Utilities Code,that the District own all of the facilities that it is authorized to operate or control. Similarly, there is no express prohibition against the District,or a utility of the District, leasing utility works from a third party or from another utility of the District. As long as the utility is self-sustaining, the law does not dictate to the District how to structure its business or utilities. Section 16474 authorizes the District to use facilities, works or utilities to supply services beyond the boundaries of the District when those facilities, works or utilities are not used to their fullest capacity for the benefit of the District or its inhabitants. Although this section does not expressly authorize the District,or one of its utilities,to lease excess capacity,it does envision and suggest that the District should attempt to utilize its facilities, works and utilities to their fullest capacity for the benefit of the District and its inhabitants. Given the District's authority to do all things necessary or convenient to the full exercise of the powers granted to it, it is logical for one District utility to be able to lease unused facilities to another District utility. As a practical matter,the District has engaged in this practice of leasing facilities from one utility to another utility for a number of years. The electric utility owns the District's office building and garage, as well as a variety of other assets, and leases a portion of the facility and other assets to the water utility. In addition,the District/electric utility leases the excess capacity of the facility that is not used by the District to the Town of Truckee- These practices are consistent with the powers and authorities granted to the District. In the same way that the District's electric utility constructed the office building and garage and overbuilt the facility so as to be able to accommodate and lease space to the water utility, the electric and water utilities could decide to construct a fiber optic cable system to serve their needs and overbuild the facilities so that there is excess capacity to lease to the telecommunications utility. The economies of scale involved in structuring the project in this manner may make overwhelming financial sense. TOTAL P.07 1 -Item 4b- Truckee-Donner Public Utility District Expanded Services Study February 2000 Conducted by SIERRA MARKET RESEARCH 2527 SIERRA BLVD SACRAMENTO, CA (916) 486-8590 2 Table of Contents Paae Executive Summary 1 PART 1: Individual Depth Interviews: Part-Time Truckee Residents 5 PART 2: Telephone Interviews: Full-Time Truckee Residents 8 Methodology Detailed Findings 12 Q.2 Provider of Television Signal 12 Q.3a Satisfaction - Quality of Television Signal 13 Q.3b Satisfaction -Television Station Selection 14 Q.3c Satisfaction - Price Paid for Television Signal 14 Q.3d Satisfaction—Choices of Signal Provider 15 Q.4 Type Internet Service Provider (ISP) 16 Q.5a Satisfaction - Speed of Internet Service 16 Q.5b Satisfaction - Reliability of Internet Service 17 Q5c. Satisfaction - Ease of Getting Internet Service Line 18 Q.5d Satisfaction - Price Paid for Internet Service 18 Q5e. Satisfaction - Choices Available for ISP 19 Q.6a Internet"Surfing" 20 Q.6b Internet Investment Decisions Q.6c Internet Business Management Q.6d Internet Employment Matters Q.6e Internet to Play Games Q.6f Internet Product Purchasing Q.6g Use of E-Mail Q.6h. Use of Chat Rooms Q.7 Weekly Hours Internet Used 22 Q.8 Likelihood —Combined CAN and ISP Provider 23 Q.9 Likelihood —TDPUD as Combined Provider 23 Q.10 Why TDPUD Acceptable/Unacceptable as Provider 24 Appendix: Questionnaire 1 EXECUTIVE SUMMARY Background: Truckee-Donner Public Utility District (TDPUD) has conducted a financial evaluation regarding the viability of expanding services through the installation of a fiber optic backbone. This investment would allow TDPUD to offer area residents an alternative to existing cable and satellite television signal and internet service providers. There were two parts to this study. Part 1 involved 15 depth interviews among part-time residents of Truckee. Part 2 involved 401 telephone interviews among full-time residents of Truckee. Part 1 Depth Interviews— Part-Time Residents. Twelve of the 15 respondents to the depth interviews lived in the Greater San Francisco Bay Area. Two respondents lived in the Sacramento area and one lived in Reno. To qualify to be interviewed, these people had to indicate that they made at least 12 trips to Truckee each year. For these respondents, their Truckee home was primarily a weekend escape and they chose the location primarily for the recreational opportunities afforded by the area surrounding Truckee. As these were part-time residents, they indicated having little involvement with the Truckee community, but were cooperative in offering their opinions. Most of these individuals owned their own businesses or were influential employees within their organizations. General satisfaction levels with existing cable and satellite television services were low. Most of the respondents felt the quality of the signal and channel selection was weak from a price/value perspective. Respondents felt there was an opportunity for more competition in this service area, especially if the price was more reasonable. A couple of respondents indicated they were not interested in having television service at their Truckee home, under any price offering. They viewed their Truckee home as a retreat and felt a television would degrade the quiet atmosphere. 2 All of these respondents used the internet on a daily basis while in their full-time resident community. Few accessed the internet while staying in Truckee. Among the few that did access the internet while in Truckee, satisfaction with their internet provider was adequate. What usage did exist among the users, was light. When asked if better internet service would result in their spending more time in Truckee, they responded "no". The business owners felt a need to be physically present at their businesses and that the internet was not an option for more management from afar. For the individuals with more traditional employment, family and community involvement limits the amount of time they are comfortable spending in Truckee. The respondents generally had a neutral image of TDPUD. Their expectations were for reliable electric service and they felt the company met those expectations. Two respondents had poor experiences with propane heat and had installed electric heat. These 15 respondents unanimously felt that TDPUD had the right to enter the competitive landscape in the areas of CAN and ISP. Part 2 Telephone Interviews— Full-Time Residents. The 401 respondents to the telephone survey were all full-time residents of Truckee. Screening criteria eliminated households with certain characteristics from participating in the survey (16 who worked for utility or CAN companies, 14 who rented out their property and 54 who were unfamiliar and not interested in computers or the internet). Most respondents (91%) indicated that they paid for a television signal. USA Media dominated the television signal market, penetrating 72% of Truckee resident's households. Satisfaction levels with USA Media's service were lower than satisfaction levels expressed by satellite signal customers. USA Media received particularly weak grades in two areas. Combined, about one-in-five (19%) of USA Media's customers graded the company "A" or"B"with respect to satisfaction with the price paid for the service provided. A similar proportion (23%) of USA Media's customers graded satisfaction with the selection of providers for their television signal as "A" or"B". 3 Given the low satisfaction scores among customers of USA Media's service, it appears as though choice is the factor limiting movement to an alternative provider of such services. Factors that could limit choice would include the cost of equipment for satellite services, neighborhood covenants restricting satellite dishes or inadequate marketing efforts on the part of satellite television services. When compared with CATV customers, respondents with satellite TV signal reception were much more satisfied on every dimension of their services. Of particular strength was the quality of signal received, where most Dish Network (81%) and DirectTV (97%) customers assigned a grade of"A" or"B". DirectTV received modestly higher satisfaction grades when compared with Dish Network on most variables. On the satisfaction with price paid for the signal dimension, Dish Network (59%) and DirectTV (57%) customers awarded nearly identical combined "A" and "B" grades. Respondents indicated significantly higher (78%) levels of access to internet services than are found in the national population (56%). Respondents with local or regional ISPs were more satisfied with their services than were respondents with national ISPs. Less than half(44%) of the respondents graded their satisfaction with their ISPs speed an "A" or"B". On other attributes, combined "A" or"B" grades were higher. The respective "A" and "B" grade satisfaction scores were: reliability (78%), access to a line (75%), satisfaction with price (74%) and satisfaction with available choices of ISPs (59%). Respondents with internet service engaged in the typical activities associated with such services. Most utilized e-mail (96%), made purchases (89%) and "surfed the net" (80%). Many also used the internet for managing investments (64%) or business matters (62%). Fewer used the internet in issues related to employment (43%), to play games (37%) or to chat with others in chat rooms (18%). 4 Respondents generally felt that competition is a good thing and that additional providers of television signal and internet services would benefit consumers. Three-fourths (75%) of the respondents indicated that they would have no problem potentially purchasing a bundle of such services from one provider. When asked if the potential provider of such services were Truckee-Donner Public Utility District, intent to consider such purchases remained high. Of the 401 respondents, 278 (or 69%) indicated they would consider utilizing TDPUD as their CAN and ISP provider. Reasons for openness to such services from TDPUD most frequently focused on the possibility of better prices (37%), positive experiences with TDPUD in the past (27%) and the convenience of having all services paid on one monthly billing statement (18%). Of the 401 respondents, 65 (or 16%) indicated that they would not consider utilizing TDPUD as their CAN and ISP provider. The only significant group (26%) of responses as to why they would reject TDPUD was the feeling that these were inappropriate businesses for a public utility. The remaining 58 respondents (or 14%) were uncertain as to whether or not they would consider TDPUD as a provider of the subject services. Many (48%) of the uncertain group indicated that the price of the service would be their main consideration. 5 PART 1 Individual Depth Interviews Part-Time Truckee Residents METHODOLOGY A total of 15 depth interviews were conducted among Truckee property owners who used their Truckee residence as a part-time residence. Most (12) of the respondents lived in the San Francisco metro area. Two respondents lived in the Sacramento area and one respondent lived in Reno. Most of the Truckee properties were owned by individuals. A few of the properties were owned by extended families or a group of friends. One property was owned by a small business and used as an employee perq. The interviews lasted between 20 and 45 minutes. A discussion guide (appended to the rear of Part 1 of the report) was utilized to ensure that topics of interest were addressed during the interviews. FINDINGS All of the respondents who maintained a part-time residence in Truckee indicated that they had local telephone service and had not had any problems with the service. They did not associate the voice phone capability with performance problems some were encountering with their Internet Service Providers. In the area of local phone service, people perceived that they were receiving adequate service. Some of the people interviewed had CAN and some had no television service. None of the people we spoke with had satellite television service. People without cable service said that the price of the monthly service was prohibitive given their level of usage. Several respondents currently not receiving a television signal indicated that they would be interested in a monthly basic cable service priced in the $10 to $15 range. Many of the respondents, with and without current CATV service, indicated they would be interested in a metered service based on usage rather than a set monthly fee. 6 Some of the respondents indicated that their satisfaction levels with the CAN provider declined when new ownership took over. These respondents suggested that the change in ownership happened about one or two years ago. According to some of the respondents, the change in ownership resulted in the discontinuance of several channels that they had watched, that networks changed channel locations, and that they were not informed of the new station channel locations. Two of the respondents would not subscribe to CAN services at any price. They see their Truckee homes as escapes from society-at-large and enjoy the quiet, self-imposed freedom from television. Internet usage among part-time residents while in Truckee was very low, even among business owners. Most of the respondents have computers in their full-time residence and most of these people are on the net daily. Many of these people indicated having DSL types of internet providers and have high expectations of any improved service that might be offered in the Truckee area. For some, it is somewhat inconvenient having limited or no access to the net when staying in Truckee. For others, it is a relief not to have that distracting service available in their escape residence. Over half the people we interviewed were self-employed or held positions of influence within their companies. One of the Bay Area business owners indicated that his family would spend more time telecommuting from Truckee if better internet services were available in the area. However, most of the business owners felt a need to be physically present at their business on an ongoing basis and would not spend more time in Truckee simply due to better electronic or phone communications capabilities. Out-of-towners who held more traditional types of employment would not spend any more time in Truckee in response to improved internet access. These respondents had other commitments in their full-time communities that are not necessarily restricted to work issues (kids' soccer games, social/community involvement, etc.). All of the respondents felt that it would be appropriate for new service providers to open their doors in the Truckee market. Only one respondent did not endorse the right of TDPUD to enter the local phone, CATV and ISP markets. Respondents felt that 7 competition would be very good for consumers and that it would improve the services provided by companies already offering these services. TDPUD was perceived to be an adequate provider of power. Respondents indicated that they had not had any problems with the electric service they received and that was all they really expected. None of the respondents indicated having had recent contact with TDPUD. Two of the people who were interviewed had switched from propane to all-electric heating with TDPUD. These individuals had experienced poor service from propane suppliers that resulted in their homes incurring significant damage. These homeowners indicated that the propane company had failed to monitor their tanks and that pipes had frozen, and then burst, once their furnaces had run out of fuel. While not asked specifically about the demographics of these households, it was apparent that many of these individuals were high income, had substantial assets or had other means to live the good life. Some of the respondents indicated that Truckee was just one of several areas where they fled for recreation and renewal. Many of the respondents were skiers and that was the motivating reason for establishing a Truckee vacation home or condo. These respondents were articulate and interested in providing input to the project. Few people refused to be interviewed, though most confessed that they were not really involved with the Truckee community and felt that the full-time residents should be calling shots regarding whether or not TDPUD should invest in competing for the subject services. 8 PART 2: Telephone Interviews Full-Time Truckee Residents METHODOLOGY A telephone survey methodology was selected for this project because of the inherent strengths in fulfilling the objectives of the Request for Proposal. The strengths of this methodology include: 1.) Projectability of the results to the general population. 2.) Ability to analyze and statistically support statements regarding the results. 3.) Low cost per response. 4.) Fast turn around. A total of 401 telephone interviews were completed from January 29 through February 6, 2000. Calls were made from a list provided by TDPUD of Truckee residents with local statement mailing addresses. The original call list was edited by Sierra Market Research to eliminate duplicate households and to review and update area codes that had changed since first entered into the database. Listings with area codes outside of the designated service area were eliminated from the call list. Quality control. The Marketing Research Association provides member companies with resources to ensure that surveys meet industry standards. Sierra Market Research follows these guidelines, which include: Multiple contact attempts. Each household selected to be in the sample had four attempted contacts before a replacement household was selected. The times and dates of follow-up calls were staggered to ensure that people who were working or otherwise unavailable at the time of the initial contact, had a high likelihood of being contacted 9 during one of the call-backs. Bilingual (English/Spanish) interviewers were available to assist respondents who were unable to adequately respond in English. However, all respondents contacted were able to communicate in English and none of the interviews required administration in Spanish. Pretesting the questionnaire. This ensures that respondents understand the questions being asked and any categorical choices they may have regarding the response. Pretesting also provides a check on the computer assisted telephone interviewing (CATI) programming to ensure that any skip patterns are functioning properly. Interviewer training. The Field Director conducts a briefing for the interviewers. This briefing communicates the timing on the field aspects of the study and reviews the questionnaire. Interviewers then conduct practice interviews on one another. A lead interviewer conducts the first"live" interviews, while the other interviewers observe. Supervision. The Field Director was present in the phone room at all times when calls were made, answering questions, dealing with unexpected situations, coaching interviewers when needed and developing codes for the open ended question (Q.11). The Field Director was also responsible for call-back validation, where 10% of the participants were contacted a second time to verify they had been interviewed and that the responses they had given were properly captured. Generally, the sample member's name is not used when the interviewer introduces him or herself. Interviewers will use a sample member's name if, in theirjudgment, the use of the name will foster participation in the survey. Also, the sample member name is used when children answer the phone in an effort to get the adult to take the call. Call results. The quality of the call results for this study exceeded industry experience. That is, contact incidence and participation levels were greater than that realized in an average telephone survey. Contact incidence is dependent on the quality of any list that might be provided for a study. For the list utilized in this study, 5% of the numbers were found to 10 be inactive and 14% of the numbers were for businesses, rather than residences. At 81%, the proportion of active target phone numbers was very high. Participation rates in surveys may depend on passing established screening criteria, the length of survey, the number of people home at the time of the calls, and call screening efforts on the part of the sample universe (caller i.d., answering machines, etc.). Households failing to pass the preliminary screening criteria included: 16 Who indicated they worked for a utility or CATV provider 14 Who indicated their Truckee home was an investment property 60 Who indicated they were unfamiliar, and not interested in computers or the internet. The survey administration length for this questionnaire averaged 9 minutes, 5 seconds. The industry participation rate experience for a survey of this length is 55%. The participation rate for this study was higher, at 61%. Determination of Sample Size. The size of the sample is determined by the size of the population universe (Truckee residents) and the level of support desired in standing behind the results of the survey. The industry standard indicates that results should be supportable using two tests, and both of these tests relate to the null hypothesis. The null hypothesis states that there are no differences between sample members with respect to the responses that they make to questions asked in the survey. Where statistical differences surface, the null hypothesis is rejected and a statement can be made that differences do exist. The two tests utilized in supporting statements that differences exist are statistical confidence and statistical power, Statistical confidence is a test that states that the differences observed in the subject sample would be replicated if an exact follow-up survey were conducted. With the sample size utilized in this study, we have a 95% confidence level. That means that if we conducted this same survey 100 times, among different members of the same sample universe, we would have statistically identical 11 results in at least 95 of those 100 surveys. This is the test used to manage the Type 1 error of making a statement that something is statistically different, when it isn't. The complement of statistical confidence is the test for statistical power. This test manages the Type 2 error where a statement is made saying that something is not statistically different, when it is. With our sample size, we are 80% confident of avoiding a Type 2 error. Again, this level of sample power conforms to industry standards. 12 DETAILED FINDINGS Gender. The surveyed population was evenly split male (52%) and female (48%). No quota controls were needed to ensure that either gender had more of a voice in the results from the survey. Male respondents were much more likely to indicate that their household's total income exceeded $50,000 (65%) than were female respondents (44%). Male respondents were also more likely to be heavy users of the internet (65% of the heavy users were male), and to be at least 50 years of age (60% of this aged respondent group were male). 2.) Who provides your television signal? Who Provides Television Signal 1% g% 10% 8% 72% ®USA Media ■DISH Network 0 DirectTV D Other/DK ■None USA Media was the provider of the television signal to 72% of Truckee's households. Customers of USA Media were light or moderate users of the internet. The main satellite providers had similar market shares; DirectTV at 10%, DISH Network at 8%. There were no statistically significant differences between the two groups of satellite customers with respect to their demographics. 13 One-in-eleven (9%) Truckee residents did not receive a television signal. Only one factor was statistically supportable regarding how they differed from the overall population, and that was the fact that two-thirds (66%) were under 40 years of age. This group appeared to be newer residents of Truckee and to have lower incomes, but these statements do not pass the necessary statistical tests for significance against other groups of respondents due to the low number of members of this group of respondents. School grading system. Respondents were asked to use the traditional school letter grading system to rate items contained within Questions 3, 5 and 8. The following statement introduced the grading system. Using a school grade system, where "A" = very satisfied, "B" = somewhat satisfied, "C" _ neither satisfied or dissatisfied, "D" = somewhat dissatisfied and "F = not at all satisfied, please tell me how satisfied you are with: 3.a. The quality of your television signal. School Grade - Satisfaction W/Quality of TV Signal 13% 3/o° I 30% 20% 34% j®A OB oC QD EF ,' Grade Awarded (%) Provider (Base:366 wffV signal) A B C D F USA Media (290) 21 36 23 16 4 DISH Network (31) 65 16 13 3 3 DirectTV (38) 68 29 3 0 0 When compared with subscribers of CATV, satellite TV subscribers were significantly more satisfied with the quality of their TV signal. 14 3.b. The station selection available to you. School Grade - Satisfaction W/Station Selection 8% 16% 20% 30% j 26% ®A Ill OCOD ■F Grade Awarded M Provider (Base:366 WTV signal) A B C D F USA Media (290) 13 28 29 22 8 DISH Network (31) 26 45 23 3 3 DirectTV (38) 34 32 12 11 11 When compared with DirectTV, DISH Network subscribers were more satisfied with the station selection available to them. USA Media's customers were far less satisfied with their station selection when compared with either of the satellite systems. 3.c. The monthly price you pay for your signal. School Grade- Satisfaction W/Price Paid for Signal i 20% 9% 20% 25% 26% ®A I■g ❑C OD ■F 15 Grade Awarded (%) Provider (Base:366 wf V signal) A B C D F USA Media (290) 4 15 27 30 24 DISH Network (31) 32 27 27 7 7 DirectTV (38) 32 44 13 11 0 USA Media's customers were not satisfied with the price they paid for their television signal, with half(54%) rating the company "D" or"F" in this area. Satellite customers were far more satisfied in this area, with DirectTV customers more satisfied DISH Network customers. The equipment price, the inability to establish a line-of-sight with signal relay towers, or neighborhood covenants concerning satellite dishes, may explain why USA Media has a commanding market share, despite the poorest showing in the price/value area. 3.d. The choices you have for who provides your signal. School Grade - Satisfaction W/Choices for Signal Provider 300 11% 16% 25% 18% iMA MB OC OD NIF Grade Awarded (%) Provider (Base:366 w/TV signal) A B C D F USA Media (290) 8 15 18 28 31 DISH Network (31) 30 17 28 11 14 DirectTV (38) 20 30 10 20 20 About half of the Dish Network (47%) and DirectTV (50%) customers graded their satisfaction with the choices available to them regarding who provided their TV signal either"A" or"B". About one-fourth (23%) of USA Media's customers rated their choice "A" or"B". Satisfaction, with respect to choices for TV signal provider, was mediocre. 16 4.) Who provides your residence or local business with internet service? Provider of Internet Service 22% 11%— 51% I i 16%" ®Local/Regional O National OOther/DK O None About three-fourths (78%) of Truckee households indicated that they had access to the internet. Subscription levels local/regional (51%) ISPs were much higher than subscriptions to national (16%) ISPs. Among heavier users of the internet, local/regional ISPs fared better than national ISPs. Local/regional providers also had a better share of college graduates who had internet services. 5.a. The speed of your internet service. i School Grade - Satisfaction W/Internet Speed 15% 22% 20% i=P22% 21% ®A ■B OC ❑D OF Grade Awarded M) Provider (Base: 312 Net Users) A B C D F Local/Regional (206) 20 31 20 18 11 National (62) 13 24 24 22 17 Other/Don't Know (44) 33 12 10 25 20 17 Satisfaction levels with internet speed were lower than satisfaction with the other internet related attributes that were explored. Grade "A" or"B" satisfaction with speeds experienced with local/regional (51%) providers was significantly better than the same grades awarded national (37%) providers. About one-fifth (22%) of the Truckee households had no internet service available to them. National providers penetrated a limited number of households (15%). With half (51%) of the households covered by local/regional providers, this market appeared to be highly competitive. 5.b. The reliability of your internet service. School Grade - Satisfaction Wllnternet Reliability 13% 5% 4% 7/o° 3 0 41 /o eq EB OC OD OF Grade Awarded M Provider (Base: 312 Net Users) A B C D F Local/Regional (206) 38 43 12 5 2 National (62) 33 40 16 3 8 Other/Don't Know (44) 37 42 14 2 5 Regardless of class of ISP, service reliability received high grades. 18 5.c. The ease of getting a line for the service. School Grade - Satisfaction W/Getting Line to ISP 6% 3% 16% 42% ill o 33/o ®A 0B 0C 0D 0F ' Grade Awarded (%) Provider(Base: 312 Net Users) A B C D F Local/Regional (206) 47 33 13 5 2 National (62) 30 32 26 7 5 Other/Don't Know (44) 35 33 15 12 5 Local/regional (80%) ISPs received more combined "A" and "B" grades than national ISPs (62%) in the area of getting a line through the service. Satisfaction with the local/regional providers on this attribute was very strong. This finding suggests that national providers have not adequately invested in capacity in the Truckee area. 5.d. The price you pay for your internet service. School Grade - Satisfaction W/Price of ISP 7% 2% 170 t 34% 40% ®A ■B CIC ❑D OF 19 Grade Awarded M Provider (Base: 312 Net Users) A B C D F Local/Regional (206) 38 42 14 5 1 National (62) 28 37 20 13 2 Other/Don't Know (44) 20 37 30 8 5 Local/regional ISPs received better grades than the nationals with respect to satisfaction with the price paid for the service 5.e. The choices you have for internet services School Grade - Satisfaction WISP Choices I 11% 7% 26% 1"i 23% 33% LMA ■B OC OD ■F ' Grade Awarded M Provider (Base: 312 Net Users) A B C D F Local/Regional (206) 25 33 23 14 5 National (62) 30 33 28 2 7 Other/Don't Know (44) 29 33 11 15 12 Although subscribers to national ISPs generally graded the performance of their service lower than those who subscribed to local/regional ISPs, they were just as satisfied with the array of choices available to them for ISPs. 20 6.) How does your household use the internet? BASE: 312 users of internet services. Internet Activities (Percent Using) 96 89 80 64 62 43 37 ® III 18 Q J��r 0J ice 0Jy` A 01 Gra�Q a. For recreational "surfing the net". Most (80%) internet users "surfed the net". Respondents under 50 years of age (86%) were more likely to engage in this activity than respondent 50 years of age or older(65%). b. To research or make investment decisions. About two-thirds (64%) of the internet users used the net for investment purchase or information. Heavy internet users (77%) were likely to engage in this activity when compared with light internet users (58%). Higher income users were also more likely to utilize the net for investment activities. c. Managing business-related matters. More than half(62%) of the internet users managed business related matters using the net. Heavy internet users (76%) and college grads (72%) were more likely to use the net for this activity. d. Managing employment-related matters. Less than half(43%) of the internet users used the net for employment activities. Respondents 50 years of age or older (28%) were least likely to use the net for such activities. 21 e. Playing games. Game playing was utilized by about one-third of net users (37%). Respondents who had not graduated from college were most likely to play games on the internet (48%). f. Researching products or purchasing items or services. Shopping and purchasing were activities utilized by a large proportion of net users (89%). High levels of usage were observed among all segments of the sample population. g. Using e-mail to correspond with others. Of the internet activities measured, e-mail use had the highest incidence rate (96%). Only 12 of the 312 internet users did not use e-mail to correspond with others. h. Chatting with others in chat rooms. Of the internet activities explored, chat room use had the lowest incidence of use (18%). Respondents who had not graduated from college were somewhat more likely to use chat rooms (24%). There was a strong correlation between game playing and chat room usage on the internet. 22 7.) In an average week, about how many hours would you estimate that you, and members of your household, spend on the internet? The median number of hours spent on the internet each week was ten. Light users (1 to 8 hours each week) of the internet represented a large portion of the households where incomes were under$50,000 (69%). BASE: 305 respondents reporting weekly internet hours. Weekly Hours of Internet Use 27% 44% 29% e Under 10 ■10 < 20 020 or More' Households with annual incomes under$50,000 a year were more likely to use the internet between 1 and 10 hours each week. Higher income households indicated that they utilized the internet more than 10 hours each week. 23 8.) If one company were able to provide you with improved local cable television and internet services, would you be likely or unlikely to purchase those services that you use from one company? 9.) would you be likely to purchase cable television and internet services from one company if that company were Truckee-Donner Public Utility District? Switch if Service Provided by: 100% 11 15 14 16 50% 75 g 0% One Company TDPUD ®Yes ■ No O Don't Know Most respondents indicated that they would purchase improved CAN and ISP services from one provider, if available (75%). When followed up with a question regarding if they would purchase these services if the provider were TDPUD, the figure dropped 6 points (to 69%). Most of the drop in intent fled to the "Don't Know" category. Few (2%) of the respondents switched their intent from Yes to No based on the identity of the service provider being revealed as TDPUD. Households with incomes under$50K (77%) were more likely to say "Yes" to TDPUD as provider of CAN and internet services than were households with incomes of$50K or more (67%). 24 10.) Why do you say that (you would or would not purchase such services from TDPUD? PROBE Multiple responses possible. Reason or Would Purchase Would Not Purchase Don't Comment TDPUD Services TDPUD Services Know BASE: 278 65 58 If Better Price 37 104 11 7 48 28 Positive PUD Experience 27 76 0 0 0 0 One Bill Convenience 18 50 0 0 0 0 If Internet Faster 13 35 3 2 5 3 Unhappy w/Cable Service 12 34 3 2 3 2 If Package of Services 10 27 2 1 2 1 Like Local (TDPUD) Owner 9 25 0 0 4 2 Inappropriate for TDPUD 2 5 26 17 5 3 More Competition Better 7 20 0 0 3 2 Satisfied W/Current TV Svc 2 6 16 11 2 1 Other Positive TDPUD 5 15 0 0 0 0 Satisfied W/ISP Service 1 4 12 8 2 1 Other Negative TDPUD 0 0 12 8 0 0 Other General Comments 8 24 23 15 48 28 The 278 respondents indicating they would purchase expanded services from Truckee- Donner PUD, made a total of 425 comments as to why they would purchase such services. The top things that would motivate respondents to switch to Truckee-Donner PUD for a bundle of services were; lower prices, having had positive experiences with TDPUD in the past, and the convenience of receiving one bill for the combined services. Among the 65 respondents indicating they would not purchase expanded services from Truckee-Donner PUD, a total of 71 comments were received as to why they would not purchase such services from TDPUD. There were two main reasons why these respondents would not switch to Truckee- Donner PUD; the feeling that such services were inappropriate for the public utility and satisfaction with their current provider for their television signal (usually satellite). 25 Among the 58 respondents indicating they were uncertain as to purchasing expanded services from Truckee-Donner PUD, a total of 71 comments were received as to why they were uncertain regarding making such purchases from TDPUD. Lower pricing was the only thing this group would consider in switching from their current providers. 11.) Dwelling type. Most (86%) respondents indicated that they lived in single family dwellings. Among the respondents who lived in multi-family dwellings, most had been residents of the Truckee area for less than 6 years. These respondents also reported lower annual household incomes when compared with respondents living in single family dwellings. 12.) Is your Truckee residence your primary, or more of a part-time, residence? Nearly all of the respondents indicated that their Truckee residence was their primary residence (98%). There were too few respondents reporting that their Truckee residence was part-time to provide enough of a base to analyze differences between them and the full-time residents. 13.) How long have you lived in the Truckee area? Years Truckee Resident 23% 39% 21% 17% ®!®3 years 03 < 606 < 10010 + 1 About one-third (39%) of the respondents reported having lived in Truckee for 10 or more years. A similar proportion (38%) reported living in Truckee for the past 3 to 9 years. As would be expected, longer term residents tended to be older than shorter term residents. 26 14.) Age Respondent Age Mix 13% 13% 20% 25% 29% ®Under 30 030 - 39 040 -49 050 - 59 060 or Older l The median age category of the sample population was the 40—49 years of age group. This category contained the 1997 U.S. Census estimate for adults in the area (47.6 years). 15.) Which bracket best represents your total annual household income? Annual Household Income ($,000) 14% 15% 15% I 31% 25% L �j B Under 35 ■35 < 50 O 50 < 75 0 75 + ■Refused Most respondents (86%) were willing to disclose their household income. The median reported income was in the $50K to $75K range. 27 16.) And what is the highest level of education you had the opportunity to complete? Educational Attainment 17% 15% "2029% 39% ®H.S. or Less ■Some Post H.S. OCollege Grad OPost Graduate Most respondents (98%) were willing to disclose their level of education and most (56%) indicated that they had graduated from college. DISCUSSION GUIDE — 15 DEPTH INTERVIEWS TAHOE-DONNER PUBLIC UTILITY DISTRICT Conducted by SIERRA MARKET RESEARCH January 2000 Hello, my name is and I am calling from Sierra Market Research. We are seeking your input on issues related to services you receive on the property that you own in the Truckee area. We are interested in your opinions concerning new capabilities that would enhance communications in that area. We are strictly a research firm and your comments will be held in strict confidence. Are you somewhat familiar with the pricing of television, telephone and internet services you may receive in the Truckee area? IF NOT FAMILIAR, ASK TO SPEAK WITH FAMILY MEMBER MOST FAMILIAR WITH THESE SERVICES. Tell me whether your Truckee property is used primarily as a second residence for yourself, or if you rent it out on an ongoing basis such that it is primarily an investment or income property. IF INVESTMENT/INCOME, THANK &TERMINATE. How long have you owned this property? How long do you expect to keep this property? IF OWNED LESS THAN ONE YEAR OR INTEND TO KEEP LESS THAN ONE YEAR, THANK & TERMINATE. In a given 12-month period, about how many trips do you make to your property where you stay overnight at least 2 nights? And what is the longest duration of stay in a 12-month period? IF FEWER THAN 12 TRIPS OR DURATION LESS THAN 2 WEEKS, THANK & TERMINATE. How often do members of your family use the internet, either from home or from work? IF LESS THAN ONCE EACH WEEK, THANK &TERMINATE. I will need about 20 minutes of your time for this discussion. If this is not a convenient time for you, I would like to schedule a time that would better fit your schedule. If you would care to call me at a specific time, I will provide you with a number and we can proceed in that fashion. Call back time, date, phone, name THE DISCUSSION I would like you tell me a little bit about how you remain in contact with your primary residence, place of employment and the world at large when staying in your Truckee home. That is, I would like to know about your usage of such things as the telephone, internet and television services in the area. Let's talk about each of those services in the order you consider most important. PROBE: Provider of service and reputation. Length of service. Reliability and satisfaction. Perceived value. Price issues. You had mentioned being (satisfied/unsatisfied) with Service A. What could be done to make your life better with respect to that service? Briefly tell me about your experiences with the following companies in the Truckee area. ROTATE EACH TDPUD CATV (USA Media/Westar) or STV (DISH/DirectTV) operator ISP provider(local or national) Local telephone service provider (PacBell) Do you feel it would be appropriate for any of the above providers to offer expanded services in areas currently offered by the other companies? Which organization do you think would be the best provider of a broad offering of such services? Why do you say that? If TDPUD were to be the provider of these services, how would you respond? Complain? Switch to TDPUD? Thank you for helping me with your comments. You will likely be hearing more about the issues we just discussed and your input will be very valuable in helping various businesses decide how to make improvements to the services afforded you in the Truckee area. Survey #: TRUCKEE DONNER PUD EXPANDED SERVICES STUDY JANUARY 2000 Hello, my name is_from Sierra Market Research. We are contacting area residents to get their opinions concerning a new business venture being considered in Truckee. May I please speak with the person in your household who makes decisions regarding television and internet services that you use. [IF NECESSARY: is this a convenient time for you to spend 10 minutes with me to answer some questions? IF NOT SCHEDULE A CONVENIENT DAY AND TIME TO CALL BACK. S1. Are you, or is any member of your immediate household, employed by a utility company or a cable television company? 1 ❑ Yes TERMINATE 2 ❑ No CONTINUE 3 ❑ DK/Refused TERMINATE S2. Do you occupy your Truckee home or is it rented out to others and more of an investment property? 1 ❑ An investment property. TERMINATE 2 ❑ Used by respondent as a residence CONTINUE 3 ❑ DK/Refused TERMINATE S3. Are you familiar with computers and the internet, or are you interested in becoming familiar with these things in the near future? 1 ❑ No, not familiar and not interested. TERMINATE 2 ❑ Familiar with computers and the internet CONTINUE 3 ❑ Not familiar, but interested. CONTINUE 4 ❑ DK/Refused TERMINATE 1.) Record Genderl-❑ Male 2-0 Female 2.) Who provides your television signal? (READ LIST IF NECESSARY) 1-0 Cable — USA Media/Weststar Communications 2-0 Satellite — DISH Network 3-13 Satellite —DirectTV 4-0 (DO NOT READ)Other/Don't Know/Refused 5-0 (DO NOT READ)No television service SKIP TO 0.4 Using a school grade system, where "A" = very satisfied, "B" = somewhat satisfied, "C" = neither satisfied or dissatisfied, "D" = somewhat dissatisfied and "F' = not at all satisfied, please tell me how satisfied you are with: ROTATE SELECTIONS Very Not at all Satisfied Satisfied A B C D F DK 3.) a. The quality of your television signal 4 3 2 1 0 5 b. The station selection available to you 4 3 2 1 0 5 c. The monthly price you pay for your signal 4 3 2 1 0 5 d. The choices you have for who 4 3 2 1 0 5 provides your signal 4.) Who provides your residence or local business with internet service? (READ LIST IF NECESSARY) 1-0 Local/regional ( JPS Net, Great Basin, etc.) 2-11 National ( AOL, AT&T, CompuServe, etc.) 3-0 (DO NOT READ)No internet service SKIP TO Q8 4-0 (DO NOT READ)Other/Don't Know/Refused Again, using a school grade system, with "A" =very satisfied, "B" = somewhat satisfied, "C" = neither satisfied or dissatisfied, "D"= somewhat dissatisfied and "F' = not at all satisfied, please tell me how satisfied you are with: ROTATE LIST Very Not at all Satisfied Satisfied A B C D F DK 5.) a. The speed of your internet service 4 3 2 1 0 5 b. The reliability of your internet service 4 3 2 1 0 5 c. The ease of getting a line for the service 4 3 2 1 0 5 d. The price you pay for your internet service 4 3 2 1 0 5 e. The choices you have for internet services 4 3 2 1 0 5 6.) For the following statements, please answer"yes" or"no" regarding your household's or local business's use of the internet: ROTATE SELECTIONS YES NO DK a. For recreational "surfing the net". 1-11 2-0 3 b. To research or make investment decisions. 1-0 2-0 3 c. Managing business-related matters. 1-❑ 2-0 3 d. Managing employment-related matters. 1-❑ 2-0 3 e. Playing games. 1-0 2-0 3 f. Researching products or purchasing items or services. 1-0 2-11 3 g. Using e-mail to correspond with others. 1-0 2-11 3 h. Chatting with others in chat rooms. 1-0 2-0 3 7.) In an average week, about how many hours would you estimate that you, and members of your household, spend on the internet. RANGE:0-998 Number of hours using the internet each week. 999=DK/REFUSED 8.) If one company were able to provide you with improved local cable television and internet services, would you be likely or unlikely to purchase those services that you use from one company? 1-❑ Likely to purchase from one company 2-0 Unlikely to purchase from one company 3-0 Don't Know/Refused 9.) Would you be likely to purchase cable television and internet services from one company if that company were Truckee-Donner Public Utility District? 1-11 Likely to purchase from Truckee-Donner PUD 2-1:1 Unlikely to purchase from Truckee-Donner PUD 3-0 Don't Know/Refused 10.) Why do you say that? PROBE The next few questions are for classification purposes only. 11.) Is your residence a... 1-0 Single family dwelling 2-0 A complex of 2, 3 or 4 units 3-0 A complex of 5 or more units 4-0 A mobile home 5-0 Other/Refused 12.) Is your Truckee residence your primary residence or more of a part-time residence? 1-0 Primary 2-0 Part-time residence 3-0 Refused 13.) How long have you lived in the Truckee area? 1-0 Less than one year 4-0 6 < 10 years 2-0 1 < 3 years 5-0 10 or more years 3-0 3< 6 years 6-0 Don't Know/Refused 14.) And are you... 1-0 Under 30 years old 4-0 50- 59 7-0 Refused 2-0 30 - 39 5-0 60- 69 3-0 40 - 49 6-0 70 or over 15.) And which of the following brackets best represents your total annual household income? 1-0 Under$15,000 4-0 $35K < $50K 7-0 Refused 2-0 $15K < $25K 5-0 $50K< $75K 3-0 $25K < $35K 6-0 $75K or over 16.) And what is the highest level of education you had the opportunity to complete? 1-0 Less than High School Grad 3-0 Some College 5-0 College grad 2-0 High School Grad 4-0 Trade or technical school 6-0 Post grad work 7-0 Refused Thank you very much. Those are all the questions we have for you. " ,Lr�.v� — REGO ac; Nevada County Local LAFCo Agency 950 Maidu Avenue Formation Nevada City, CA 95959-8617 Phone 530 265 7180 Commission Toll Free 888 846 7180 Fax 530 265 7183 November 16, 1999 Don McCormack,Chair Cities Peter Holzmeister, General Manager Sam Dardick Truckee Donner Public Utility District County POB 309 Laura Duncan Truckee, CA 96160 Public Bill Huliender Subject: TDPUD's Proposal to Provide Telecommunications Services Cities Elizabeth Martin Dear Peter: County Patricia Sutton Thank you for bringing Alan Harry and Bob Braitman down to meet last month Special Districts to discuss the PUD's telecommunications proposal. The project is very exciting, Ron Sweet and I'm looking forward to the opportunity to review it. Special Districts It is my understanding that you were going to present your draft business plan to Bob Nix your board for their consideration. Have they approved the plan? Special Districts Alternate Judith Peterson staff As we discussed, both LAFCo and counsel have very limited expertise in PublicAliernate this area. I have located an attorney who is willing to assist us with the review. Sharon Tobiassen His name is Patrick McMahon, and he has extensive experience in the technical CatesAhernare and regulatory aspects of telecommunications service. I know that he will prove Pew van zant helpful to both our agencies in this regard. County Alternate As you'll remember, I mentioned that I would be contacting you regarding the SR Jones deposit toward fees that would be required. LAFCo's fees are based upon the Executive Officer actual time and materials required to process a proposal. The deposit should P.Scott Browne cover a reasonable estimate of the necessary fees. Since we will need the Legal Counsel services of outside counsel, I am requiring a deposit of$5000. Naturally, Katherine Hudson LAFCo will refund any unused portion of the deposit at the end of the process. Clerk to the Commission I look forward to working with the District staff on this matter, and we will begin our review as soon as we receive the deposit. Sincer ly, R Jon , Executive Officer Ne LAFCo