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HomeMy WebLinkAbout2005-09-08 AFN Options Committee Minutes10/23/24, 10:12 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon Learn about the City's plan to construct and move the water treatment plant -Clean drinking water is an essential right Agendas and Minutes City of Ashland V AFN Options Committee (vieWAll) AFN Options Committee Meeting Agenda Thursday, September 08, 2005 Minutes View Agenda Attachments j AFN Options Committee Meeth September 8, 2005, 7:30am Siskiyou Room, CDES Building, 51 Winburn Way CALL TO ORDER Michael Donovan called the AFN Options Committee meeting to order at 7:33 am on September 8, 2005 in the Siskiyou Room of the CDES Building, 51 Winburn Way Ashland, Oregon. Committee members Barth, Collins, Donovan, Mace, Mackin, and Shultz were present. Councilor Russ Silbiger was present. STAFF PRESENT: GINO GRIMALDI, CITY ADMINISTRATOR https://old.ashland.or.us/Agendas.asp?AMID=2311 &Display=Minutes 1/8 10/23/24, 10:12 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon LEE TUNEBERG, ADMINISTRATIVE SERVICES AND FINANCE DIRECTOR DICK WANDERSCHEID, ELECTRIC DIRECTOR MICHAEL AINSWORTH, CABLE TV MANAGER RICHARD HOLBO, TELECOMMUNICATIONS ENGINEER C I N DY HANKS, PROJECT MANAGER BRYN MORRISON, ADMINISTRATIVE ASSISTANT REVIEW COMMITTEE MINUTES Approval of minutes dated August 15, 2005 Richard Barth, Committee member would like staff to provide a copy of Art Bullock's written testimony from the August 15, 2005 meeting. Staff will provide. Mr. Barth also would like to clarify that he believed Mike Franell meant on page 2 paragraph 4, that the word limited meant it would be forbidden and they could not discuss the possible sale of AFN at an executive session. Councilor Russ Silbiger would like included on page 3, second paragraph from bottom, that the advisory committee recommended the 25-30% increase. Mr. Barth corrected page 3 second paragraph that the Forest Service owns the land that Mt. Ashland Ski area is on. Mackin/Barth approved the minutes as amended. All Ayes DISCUSSION Mr. Barth stated he would like to include to the agenda a list of items that the Committee did not accomplish in the previous meeting. Review of AFN financials, the possibility of meeting with the ISP's and Programming Committee, and other documents that were distributed. He added he would like to hear an update on Council action, an update on the IT Director recruitment, and a well defined goal of committee. Paul Mace, Committee member agreed and stated that he would like to have a theme for the meetings. The Committee discussed future meetings and set a meeting on 9/15 and 9/26 at 7:30 am in the Siskiyou Room. https://old.ashland.or.us/Agendas.asp?AMID=2311 &Display=Minutes 2/8 10/23/24, 10:12 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon The Committee discussed that they would like hard copies of all future packets and are able to come to the City to pick them up. They would also like be able to insert comments into the electronic pdf versions that are sent. Gino Grimaldi, City Administrator spoke to the recruitment of the Information Technology Director. He is in the process of speaking to 6 candidates on the phone and would like to wrap up this week. Councilor Silbiger spoke to the action taken at the Council study session on September 7, 2005 and that Council approved a $7.50 surcharge to be placed on all electric bills effective 30 days from September 7t" and there will be a rate increase on cable tv on January 1, 2006. The Committee asked if the rates that were presented in the email that Councilor Silbiger sent. Councilor Silbiger responded that they were. He added that waiting until January will have a number of advantages including the work that will be done by the Options Committee. The Committee asked what the projection of revenue was. Lee Tuneberg, Administrative Services and Finance Director responded that the $7.50 surcharge would be $600,000 this year and the rate increase would generate $100,000 per month. The Committee discussed the financial rate model. They asked staff to explain on page 8 of model, the Internal Charges. Mr. Tuneberg explained what made up the Central Service charges. It pays for accounting, legal, Council, personnel, other administrative tasks. He explained that all departments pay Central Service charges that are not located within the Central Service fund. The Committee asked how the number is generated. Mr. Tuneberg responded that it is based upon cost allocation plans. For example number of connections, employees, and costs for buildings. The Committee asked if staff could tie those figures back in time to what AFN used. Mr. Tuneberg explained that it is a percentage based allocation. Mr. Grimaldi stated that was a valid issue and suggested the Committee evaluate that when they look at the option of spinning off AFN. The Committee asked if AFN revenues were to increase if Central Service Charges would. Mr. Tuneberg responded that they would to accommodate for more bills that would be generated for example. The Committee clarified that if AFN was no longer part of the City, all costs would not be eliminated. Mr. Tuneberg responded that was correct. The Committee asked how much Central Service fees had been charged to AFN since the inception. Staff will report back. The Committee discussed that they need to address the question: is a spin off viable, does it truly cost the City that much more to provide service? Mr. Grimaldi suggested staff do an estimate for the Committee to review. The Committee discussed that Don Mackin, Committee member will work with staff to compile estimate of how much the cost would be for overhead if AFN was spun off. https://old.ashland.or.us/Agendas.asp?AMID=2311 &Display=Minutes 3/8 10/23/24, 10:12 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon The Committee asked the City to justify the $15.5 million bond. Mr. Tuneberg responded that at the end of 2004, there was $7 million in internal and $7 million in external borrowings along with the cost of issuance and an additional amount for the first interest payment. He added that the external borrowing was for the construction costs. He explained in August of 1999, the City borrowed $5.9 million and in 2002 the construction costs exceeded the amount borrowed and then the City borrowed $2.5 million more. He added the first loan was tax exempt, second taxable, and the final was taxable. Mr. Tuneberg explained that the $7 million in internal borrowing was from other funds and was borrowed only as needed. The Committee asked if they borrowed against operations and not capital. Mr. Tuneberg responded that was correct. The Committee asked what of this money represented checks to entities outside the City and how much represented internal billing. They would like to see what portion was done by the City and what the City had to pay others to do that they could not do themselves. The Committee discussed what other projects were not completed or were put off because the City begun AFN instead. The Committee asked to see the staffing changes since the inception of AFN. The Committee discussed the burden that was placed on the City by starting AFN and where costs were assigned. Staff will report back. The Committee asked for an estimate of profit and loss by service. They would like to see the costs of each service. Staff will provide further detail. Councilor Silbiger added that one option that has been discussed is eliminating the TV side and a good idea may be to change the rate model to show that as well. Staff clarified acronyms within the rate model. PS is Personal Services, MS is Materials and Services, CO is Capital Outlay, CM is Cable Modem. The Committee asked what the dates were that the projected and amended numbers were taken from. Mr. Tuneberg responded he believed it was as of June 30, but will report back. Dick Wanderscheid, Electric Director gave historical information on AFN to the Committee. He spoke to the quarterly report and how when the debt service is removed, the figures are close to what is needed for AFN. He pointed to when AFN began, the estimate for the overall cost was based on figures that were not accurate. The City did not anticipate having to pay the prevailing wage to employees. He added that they renegotiated prices with Hunter for work to be done and even tried to take over the work internally but could not accomplish in a timely https://old.ashland.or.us/Agendas.asp?AMID=2311 &Display=Minutes 4/8 10/23/24, 10:12 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon matter what Hunter could so they were rehired. He added that AFN did pay the full cost of the use of the Electric department and now the Electric department is scrambling to catch up on work that they were not able to accomplish while they were assisting in AFN. Mr. Wanderscheid stated three mistakes that the City made when they started AFN: it took more money than was anticipated, took longer than was anticipated, and they did not accurately assess the competitions response. Mr. Wanderscheid spoke to the staffing of AFN. He was the Administrative Services Director when AFN started and then became the Electric and Telecommunications Director. Michael Ainsworth was the first cable TV employee and Richard Holbo was hired to build the system. Mr. Wanderscheid explained that with the change in the budget this year, he has been changed to the Electric Director and for the interim; Lee Tuneberg is the AFN Director until an Information Technology Director is hired. The Committee discussed the available AFN service to the community and those that cannot receive AFN. Mr. Wanderscheid and Mr. Holbo added that costs effectiveness is considered when areas are serviced. The Committee discussed the possibility of the City becoming an ISP. Staff explained that when CDS was going bankrupted and after they went bankrupted, the City set up a system to take their customers but the legal opinion was that the City could not and it was illegal to intercede without direction from Council. Staff discussed that it was a policy decision on whether or not to become an ISP that Council would have to make. Mr. Wanderscheid explained the difference in requirements for a municipality and what would take place in a private company. The Committee questioned why they were not preapproved by Council to be an ISP when it was suggested in the Navigant report. Staff responded that the consensus was that in the beginning of AFN it was not an option for the City to be its own ISP. Mr. Wanderscheid added that at the conclusion of the Navigant study, that suggestion was removed. The Committee discussed that they would work together to address future agenda items in between meetings. Art Bullock, 791 Glendower - Mr. Bullock spoke to the option of the City owning AFN with a private company managing it. He wants the Committee to build in safeguards for the public's right to know. He wants to make sure that they use plain talk, with clearly labeled costs and subsidies so taxpayers know in their language what is going on. Written testimony was submitted into public record. https://old.ashland.or.us/Agendas.asp?AMID=2311 &Display=Minutes 5/8 10/23/24, 10:12 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon Scott Spalding, 1360 Apple Way- Mr. Spalding stated that he is a supporter of AFN and does all he can to promote AFN. He places the channel line up in several businesses throughout Ashland and speaks favorably to citizens regarding the benefits of AFN. He presented the Committee with written testimony that was submitted into public record. Thomas Gaffey, 680 Oak St- Mr. Gaffey stated that he would like to receive a copy of a current revenue status report and staff will provide. He stated that the efficiencies of AFN have never been discussed and an analysis needs to be done on potential income streams. He feels it took too long to build out, cost too much to complete, and pricing was unrealistic. He added that he feels it could work if the bureaucracy was removed. Charles Carreon, 1131 Barrington Circle- Mr. Carreon stated that AFN is great and provides much better service than Charter. He would like to see a report on what of the Central Service charges could be outsourced. He questioned if someone could be held accountable for not informing the City that they would have to pay prevailing wage. He added that it may be worth looking into a PUC complaint again Charter for under pricing. ADJOURNMENT The meeting was adjourned at 9:33 am Respectively Submitted, Bryn Morrison Administrative Assistant Administrative Services Department https://old.ashland.or.us/Agendas.asp?AMID=2311 &Display=Minutes 6/8 10/23/24, 10:12 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon Online City Services Email Updates Sign up to receive local important News & Events. 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