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HomeMy WebLinkAbout07.05.2023 telecommunications minutesTELECOMMUNICATIONS UTILITY BOARD OF TRUSTEES Harold E. Getty Council Chambers July 5, 2023 4:00 p.m. Members present: Van Fleet, Young, Batemon and Kurtenbach. Absent: Wienands Council Liaison Rob Nichols. Approval of Agenda. Moved by Kurtenbach seconded by Young that the Agenda, as amended, striking the words, "approving the contract, bonds, and certificate of insurance", and "authorizing the Board Chair and Board Secretary to execute said documents", be approved. Voice -vote Ayes: Four. Motion carried. Kelley Felchle, Board Secretary, explained the amendment to the agenda. Approval of Minutes. Moved by Kurtenbach seconded by Young that the minutes of June 21, 2023, as amended, by editing the depth of the fiber from 40-inches to 42-inches, be approved. Voice -vote Ayes: Four. Motion carried. Resolution approving award of bid to ITG Communications, LLC of Hendersonville, TN in the amount of $77,864,565.10, in conjunction with the FY 2023 Fiber -to -Premise Feeder/Distribution and Backbone Network Project, Contract No. 1088. Moved by Young seconded by Kurtenbach. Roll Call -vote Ayes: Four. Motion carried. Resolution No. 2023-014. Mr. Van Fleet acknowledged the efforts of everyone involved in making this a reality, as this is a significant moment in Waterloo's history. He requested the individual perspectives from Steve Nadel and Maggie Burger on this item and the process moving forward. Steve Nadel, Ahlers & Cooney, provided an overview of the stage of where the board is at with the bid letting process. He further provided comments regarding the next steps in the process going forward. Maggie Burger, Speer Financial, provided a fiber to the home funding model for the construction project. She further provided an overview of the different funding sources for the city and utility. Mr. Van Fleet questioned the prices of the fiber drops and if the drops could be outsourced, what the price might be. Maggie Burger deferred this question to Courtney Violette. Mr. Van Fleet requested clarification on whether the utility would have full lender commitment by 2024. Maggie Burger explained they will be asking for lender commitments. The minimum commitments will need to meet the debt issued in 2024, noting that lenders are going to look to see who is signing up and how quickly. Mr. Kurtenbach questioned if there are more grant dollars available to the utility. Maggie Burger commented that there may be more dollars available and will be looking to the state for those funds. Mr. Young questioned if ARPA funds are used first, would it be possible to not use MCU Revenue Bonds in 2023. Maggie Burger confirmed that it is likely. Mr. Young questioned the deadline to use ARPA funds. Page 2 Maggie Burger confirmed that the funds must be contracted by December 31, 2024 and the dollars must be spent by December 31, 2026. Courtney Violette, Magellan Advisors, provided an overview of the changes to the bid specifications that ended up helping to reduce the cost of the project. He explained that city council did award a portion of this last week and an initial meeting with ITG took place today. Mr. Van Fleet clarified if Magellan is waiting on an answer from the contractor regarding their ability to work during the winter months. Courtney Violette stated there are no concerns at this point, as the contractor does work all over the U.S. and has experience working in colder environments, such as Minnesota. Mr. Van Fleet asked Mr. Violette to explain the outsourcing and related costs of fiber drops. Courtney Violette clarified that the fiber drop portion is not part of the award you will be awarding this evening. The current bid is to build a fiber path in the public right-of-way to every home and business within the city. Once a subscriber signs up for the service, you then extend the network to the home via the drop fiber. There is a portion of the budget within the financials that include the drop budget. Mr. Van Fleet questioned if the other bidders included the drop connections as part of their bids. Courtney Violette explained that we did not request that as part of this bid, but it is one of ITG's qualifications and something they do well. He further explained that this is something that would be outsourced for the first few years after which the process would be brought in-house. An RFP and scope of work should be ready by the end of summer or early fall. It will be a much simpler contract than what we have just gone through. Mr. Van Fleet requested a high-level overview of take rates as it relates to this project. Courtney Violette explained that everything they have been working is culminating now. Previous modeling of take rates have not changed and are still in the same range. Uptake targets are for a 3-5 year period. If connections can go ahead of what is projected that will put the utility in a better financial position. Mr. Kurtenbach questioned if they can expect answers soon to the questions submitted earlier in the week. Courtney Violette confirmed that he received a few answers back just as this meeting got started but has not had a chance to review them. He will get these out to the board by the end of the week. Mr. Van Fleet questioned the mobilization of the team after the award. Courtney Violette explained that they would like to be in the market and producing within 30-days of the signing of the contract. There are no concerns for labor or materials. Motion approving an amendment to the conflict waiver with Ahlers and Cooney, P.C., for a cooperation agreement for the Waterloo Telecommunications Utility Board and the City of Waterloo for the FTTP and City backbone project, and authorizing the Board Chair and Board Secretary to execute said document. Moved by Young seconded by Kurtenbach. Voice -vote Ayes: Four. Motion carried. Steve Nadel, Ahlers and Cooney, provided an overview of the item. Motion approving award of the 2023 Equipment and Services RFP to ePlus Technology, Inc., of Herndon, Virginia, and authorizing the Board Chair and Board Secretary to execute necessary documents. Moved by Young seconded by Batemon. Voice -vote Ayes: Four. Motion carried. Courtney Violette, Magellan Advisors, provided an overview of the RFP. Page 3 Mr. Kurtenbach questioned if this also includes the buildings to house the equipment. Courtney Violette explained that it would be a separate bid. Mr. Van Fleet questioned if Magellan Advisors would be managing the project. Courtney Violette confirmed. Motion approving appointment of Eric Lage to the position of General Manager of Telecommunications, effective July 24, 2023, subj ct to the approval of an employment agreement. Moved by Kurtenbach seconded by Young. Voice -vote Ayes: Four. Motion carried. General update from consultants, city staff, and board member comments. Maggie Burger, Speer Financial, shared that there is communication from Mr. Nadel on how to go about setting rates. She explained that rates have to be set in order to go out and borrow money as any commitment is based on working capital. Keep in mind, that the rates you set, could be changed or adjusted prior to signing on your first customer. The goal would be to have the rates on your July 19 agenda. This will give us the ability to bring you a term sheet which we would want your approval of, and would make up the first lender packet that goes out. We would then potentially be able to award capital bonds at the August 2 meeting, which in turn provides fund availability at the end of August and correlates with the anticipated payroll date for your new hire. Mr. Van Fleet commented that it would be good to have an opportunity to look at what hours have been accruing with city staff to give a perspective on what amounts we are looking at. Kelley Felchle explained that a line has been created in payroll where city staff is recording telecom related matters, that will allow for billing. She stated that a report has not yet been run to show the numbers, but will bring that to the next meeting. Courtney Violette, Magellan Advisors, commented they are looking forward to digging in and wrapping up the contract, he will be working on the questions submitted and is looking forward to working with Eric. He stated he would be leaving the country on vacation on the 16th and will try to touch base with Eric before then. Steve Nadel commented that the first round of financing will be for taxable communication utility revenue, which means the board can expect to see a lot of paper coming their way. He is also looking forward to working with Eric and everyone is here to help answer any questions. Kelley Felchle commented that she continues to work on getting the employment agreement squared away with a meeting scheduled for this Friday. She plans to have that on the July 19 agenda. Randy Bennett commented that they are continuing to work on the various agreements and once Eric is on board there will be more discussions in that regard. With no further business before the board, it was moved by moved by Kurtenbach seconded by Young that the meeting be adjourned at 4:57 p.m. Voice -vote Ayes: Four. Motion carried. 7(ef1 y FeCcfCe Kelley Felchle Board Secretary