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HomeMy WebLinkAbout06.24.2020.telecommunications minutesTELECOMMUNICATIONS UTILITY BOARD OF TRUSTEES June 24, 2020 4:00 p.m. Harold E. Getty Council Chambers Members present: Batemon, Kajtazovic, Kurtenbach, Pilkington, Van Fleet, and Council Liaison Sharon Juon. Moved by Pilkington seconded by Kurtenbach that the Agenda, as proposed, be approved. Voice - vote Ayes: Five. Motion carried. Moved by Pilkington seconded by Kurtenbach that the minutes of May 27, 2020, as proposed, be approved. Voice -vote Ayes: Five. Motion carried. Update on broadband study progress. Mr. Van Fleet explained that Magellan Advisors met with several city leaders to discuss broadband and assembled a preliminary plan. The plan includes the map of where fiber would go in the city, a preliminary roll out plan, revenue potential, and profit potential. The take rates affect the revenue potential and they use three different take rates to create modeling. The draft plan is not finalized but when it is, they will present the draft to the board. They have also been looking at models for organizational structure of the utility and potentially collaborating with the Waterloo Water Works for billing or customer service. Mrs. Juon commented that she has been impressed with Magellan Advisors to date. Mr. Van Fleet explained that the board would receive a copy of the draft ahead of when the draft would be reviewed by the board with Magellan Advisors, to allow the board time to digest the study. Mr. Pilkington added that Magellan Advisors did a good job of comparing their study with current market providers, as well as what is happening in neighboring communities so that utility could be competitive. He encouraged board members to write down questions as the study is very comprehensive and Magellan Advisors will answer any question. Mr. Van Fleet commented that Magellan Advisors would provide very detailed answers to questions. As an example, he asked them what onboarding a general manager could like. He added that they could help provide grant writing services if the board is interested as well. Mr. Pilkington questioned if, through the contract, if we need additional work, if it is included in the scope of the current contract or if the board would need to enter into a new contract. Mr. Van Fleet commented that he would pose the question to Magellan Advisors. Ms. Kajtazovic questioned what the model would be. If it would be private/public, completely private, etc. Mr. Van Fleet commented that it would be a public entity. Mr. Batemon questioned if grants are out there currently and if Magellan Advisors would be helping us get a head start. Mr. Van Fleet commented that grants are available to a few different sources; Magellan Advisors is aware of those sources and that the sooner we can move through the study they can help get started with the grant writing process. He added that this goes back to Mr. Kurtenbach's comments at a prior meeting of where does funding for the project come from. He added that Magellan Advisors would likely charge a fee for writing grants. He questioned if the Chief Financial Officer had any comments to add on funding. Page 2 Michelle Weidner, Chief Financial Officer, explained that she is unsure if the grant sources are dedicated yet. Talks of funding coming is occurring at the federal level. Mrs. Juon commented that INRCOG would be a good source to confer with and added that Mr. Pilkington may know of other sources as well. Mr. Pilkington stated that the board should start sooner rather than later with INRCOG, as they are the contact for EDA's regional office in Denver. He added that the board should reach out to Kevin Banchan with INRCOG to get the ball rolling. Mr. Kurtenbach questioned if the utility needs to do bonding, what is the timeline for taking it to the voters. Michelle Weidner commented that they would have more answers to that question when the draft study is ready to review. She explained that a list of questions is being developed and several are not yet resolved. Bonding is one of the funding sources but that all options will be explored going forward. Discuss broadband study timeline and a date for Magellan Advisors to make a presentation to the board. Mr. Van Fleet explained that the goal is to review the draft study in July. Discuss types of funding for implementing the broadband study. Mr. Van Fleet commented that there are two parts. One is the total project and the other is design. Design is 4% of the total budget and it has to be designed prior to moving forward with bonding for the rest of the project. Discuss next steps at city level to enable a successful project. Mr. Van Fleet commented that he wanted to get this group's thoughts on including the city council at the meeting or if the board feels it more appropriate to have the board review the draft then engage city council later. Mrs. Juon questioned if Magellan Advisors would be willing to have a later meeting with council. Mr. Van Fleet confirmed. Mrs. Juon commented that she believes it would be best to have a separate discussion with council. Mr. Pilkington agreed with Mrs. Juon as well. Mr. Kurtenbach questioned if a meeting could be held in a larger location for social distancing. Michelle Weidner commented that if the meeting were moved to a different location for social distancing the board would lose the ability to have some recording capabilities. Mr. Van Fleet commented that the board does not have the ability to issue general obligation bonds. He asked Chris Wendland, attorney for the board, to provide an overview of why. Chris Wendland commented that the law prohibits the board from issuing general obligation bonds but it does permit the board to issue revenue bonds. However, the board first needs to have a revenue stream. General obligation bonds would have to be issued through the city with the potential of having a referendum. Michelle Weidner commented that, with the amounts we are talking about, we would have to do a referendum in order to issue general obligation bonds. Even if the city issues the debt, the city cannot subsidize the operation of the utility. Mrs. Juon questioned if the timeline the CFO is preparing will include a referendum. Page 3 Michelle Weidner commented that there will be in the future but it is still being worked on. She added that as we talk through the draft study with Magellan Advisors, the next steps with the city would become clearer. Discuss next steps with the broadband study for the board. Mr. Van Fleet explained his next steps include reaching out to Courtney Violette at Magellan Advisors and asking about grants and additional costs. He added that he would ask for the study a week in advance of the meeting of the board with Magellan Advisors and that he hoped the meeting would occur in July via Zoom. He will reach out to Kevin Blanchan with INRCOG as well. The board discussed possible dates in July to meet with Magellan Advisors. With no further business before the board, it was moved by Kurtenbach seconded by Kajtazovic that the meeting be adjourned at 4:30 p.m. Voice -vote Ayes: Five. Motion carried. xeCCey 'FeCchfe Kelley Felchle City Clerk