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HomeMy WebLinkAbout2005-09-15 AFN Options Committee Minutes10/23/24, 10:36 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 View Agenda Attachments j Thursday, September 15, 2005 AFN Options Committee Meeting Minutes September 15, 2005, 7:30am Siskiyou room, CDES Building, 51 Winburn Way CALL TO ORDER Michael Donovan called the AFN Options Committee meeting to order at 7:35 am on September 15, 2005 in the Siskiyou Room of the CDES Building, 51 Winburn Way Ashland, Oregon. ROLL CALL Committee members Barth, Collins, Donovan, Mace, Mackin, and Shultz were present. Councilor Russ Silbiger was present. STAFF PRESENT: GINO GRIMALDI, CITY ADMINISTRATOR LEE TUNEBERG, ADMINISTRATIVE SERVICES AND FINANCE DIRECTOR RICHARD HOLBO, TELECOMMUNICATIONS ENGINEER https://old.ashland.or.us/Agendas.asp?AMID=2334&Display=Minutes 1/7 10/23/24, 10:36 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon C I N DY HANKS, PROJECT MANAGER BRYN MORRISON, ADMINISTRATIVE ASSISTANT REVIEW COMMITTEE MINUTES Approval of minutes dated September 8, 2005 The Committee will approve the minutes at the meeting on September 26, 2005. COMMITTEE DISCUSSION The Committee discussed the options presented by Council and what their plan should be to address them. They also discussed the options that Councilor Hartzell presented. The Committee voiced that they see the option of pulling the plug as a last resort even though some of the Budget Committee supported that option. Don Mackin, Committee member stated that he would like the Committee to consider a role of AFN being a common carrier and a conduit and possibly leasing the facility to an operator. He sees this as a way to have cash flow to address the debt. Councilor Russ Silbiger stated that Council does not see how AFN is run currently as a viable option for the future and something needs to change. The Committee asked staff how much money it would require to keep up with technology demands. Richard Holbo, Telecommunications Engineer responded roughly $100,000 per year. The Committee asked how much was budgeted in this fiscal year for it. Lee Tuneberg, Administrative Services and Finance Director responded it has been budgeted for $120,000- 160,000 per year. Mr. Holbo added that AFN is encouraged not to spend it though. The Committee discussed the possibility of Wi-Fi service. They asked if it would extend serviceable areas. Mr. Holbo responded that it could and would cost for real wireless $150- 200 per subscriber and $1,000 for the antenna. The Committee discussed the possibility of running AFN as a utility and operating it as an enterprise. They added that if it is run as a utility, they would need to restructure what is charged for services and increase services. The Committee discussed how the management relationship would change if it was run as a utility and the possible separation of services. Rick Barth, Committee member added another option to pay down the debt could be a potential service charge to every piece of property. The Committee discussed that a rate commission would be needed to approve those fees. https://old.ashland.or.us/Agendas.asp?AMID=2334&Display=Minutes 2/7 10/23/24, 10:36 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon The Committee asked for the annual debt service requirement. Mr. Tuneberg responded that this fiscal year it is $1.2 million, next year $900,000 and will eventually increase and stabilize at $1.4 million. The Committee asked what it would require to move the operation from the current facility. Mr. Holbo responded that it would basically be to move the head end and it would be very difficult and costly. Paul Mace, Committee member responded that if the City found a buyer they would actually buy a long term lease because it would not be feasible to move the operation. The Committee added that if someone were to buy it, they would actually be buying the conduit to send their single through. Mr. Holbo responded that Charter would not; they would just buy to make AFN go away. They would not be able to buy the public right of way; they would have to rent it. The equipment would have to be sold separately and would be worth 10- 15%. The Committee discussed that the building that AFN is in also houses other departments; however they are not burden to that specific building. Those departments would require a large facility if moved. The Committee discussed how the market will become more competitive over the next five years. They added that the competitors will be able to buy goods and services at better margins than the City would be able to. They discussed if selling off pieces of AFN is an option and the effects that would have on the community. Mr. Holbo explained that it would be difficult to separate out. Cable TV and internet work together and high speed data could stand alone. The Committee asked what high speed generated in revenue. Mr. Holbo responded $15,000 per month. The Committee discussed the impact on small businesses and the economic benefit of offering AFN. Gino Grimaldi, City Administrator responded that the City Council will address Economic Development and Social issues and the Committee didn't need to discuss them at this time. The Committee discussed if there had been any interest from other cities in the valley to connect to AFN. Mr. Grimaldi responded that Central Point and Talent have expressed an interest in the past and the issue is the investment needed to get the line to each home. Mr. Holbo added that the Medford City Hall uses AFN. The Committee discussed the need to establish a valuation of the components of AFN. Mr. Grimaldi suggested that the City look at using a broker to establish a value. Kevin Shultz, Committee member offered his service and background. The Committee determined that Don Mackin would also help to establish valuation. https://old.ashland.or.us/Agendas.asp?AMID=2334&Display=Minutes 3/7 10/23/24, 10:36 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon The Committee spoke of the benefits of speaking with other entities regarding their operation. Rick Barth and Paul Mace will work together to speak to organizations including Mt. Ashland, Oregon Shakespeare Festival and Ashland Community Hospital. The Committee discussed how they will deliver their recommendation to Council. Councilor Silbiger stated that he would like to see a spreadsheet presented with quantifiable data on expenses, revenues, and debt load pertaining to the four options. Mr. Grimaldi added that a written report to support the matrix would be beneficial. The Committee decided that Paul Collins will work with Councilor Silbiger to create a proposed matrix for the next meeting. The matrix will help the Committee determine the needs of the outcome. The Committee discussed looking at the other cities that have been successful in telecommunications and that Ashland may need to become more like them. Mr. Mace suggested putting these cities into the matrix to compare what they have done to what Ashland needs to do. Mr. Holbo stated that one difference with these cities is that the money was invested upfront and did not need to be borrowed. The Committee discussed what the investor's expectations were and if the people of Ashland would possibly see the debt as the initial investment required. The Committee added that starting and funding AFN was never voted on by the citizens. The Committee discussed the need to look at the management structure and what the Council's role is and the possibility of separating the business from the effects of political change. The Committee asked who they would need to talk to about those issues. Mr. Grimaldi recommended that they bring a recommendation to Council and staff could support with resources if needed. The Committee discussed inviting the ISP's and Hunter Communication to the next meeting. They discussed that they would like their input on the options that have been presented by Council and the possibility of AFN providing ISP directly. They also spoke about a time limit for the discussion. It was determined that the ISP's and Hunter would be invited to come to the meeting at 7:30, would be able to discuss issues for about an hour and it would be determined from that point if a longer discussion would be required. They will also be informed that they can submit written material to the Committee. Paul Mace asked to speak with Lee Tuneberg regarding materials that were requested at a previous meeting. Mr. Mace and Mr. Tuneberg will meet to discuss the items and services that represent internal resources and external purchases that make up the debt and will present back to the Committee. https://old.ashland.or.us/Agendas.asp?AMID=2334&Display=Minutes 4/7 10/23/24, 10:36 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon Mr. Tuneberg addressed the Committee and said that they are not creating subcommittees to work to address issues or make decisions; they are only asking members to work together on assignments. The Committee asked staff to clarify the figures presented in the Cable TV Franchise report. Staff will present at a future meeting. The Committee asked that the draft minutes and draft agenda be sent electronically to the Committee as soon as they are available for review. The Committee discussed that at the end of the next meeting, they will discuss inviting the Programming Committee. NEXT MEETING(§) The next meeting is scheduled for September 26, 2005 and the following for October 3, 2005 at 7:30 am in the Siskiyou Room of the CDES building. PUBLIC INPUT Beryl Jacobson, 1330 Iowa St. - Mr. Jacobson congratulated the City, public, and private businesses for having the passion to take this leap into business. He encouraged them to keep this in mind, that it was a passionate and informed leap. He added that they cannot predict the future of competition and to think that it will become more difficult in the future is a fearful view. He feels that AFN was built with foresight and they need to continue to upgrade. He feels that the management of AFN needs to be assured that another Committee will not change the work of this Committee or Council. The City Council needs to give the management team a timeframe that crosses boundaries of their placement and that lasts over their terms in office. He feels that they are still within the timeframe of making a profit and the option of selling looks premature. He feels that cost separation of debt is crucial. He suggested that the ISP's may not want to talk to them and they would have come already if they did. He feels that OSF should be invited because they pushed AFN in the beginning and have not used it. ADJOURNMENT The meeting was adjourned at 9:35 am. Respectfully Submitted, Bryn Morrison https://old.ashland.or.us/Agendas.asp?AMID=2334&Display=Minutes 5/7 10/23/24, 10:36 AM AFN Options Committee Meeting - AFN Options Committee - City of Ashland, Oregon Administrative Assistant Administrative Services Department Online City Services Email Updates Sign up to receive local important News & Events. 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