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Home My WebLink About03 18 2013 EDA 7C Broadband SOW PRI ti rri 4646 Dakota Street SE Prior Take_ MN 55372 4 /INNEso l " ECONOMIC DEVELOPMENT AUTHORITY AGENDA REPORT MEETING DATE: March 18, 2013 AGENDA #: 7C PREPARED BY: Dan Rogness, Community and Economic Development Director AGENDA ITEM: BROADBAND SCOPE OF WORK WITH LOOKOUT POINT COMMUNICATIONS DISCUSSION: Introduction The purpose of this agenda item is to determine if the EDA wishes to retain Lookout Point to com- plete additional work with respect to the community -wide broadband project. History During the 2013 EDA meetings, staff updated the Commissioners on the status of the community - wide fiber optic (broadband) initiative. Two studies were done in 2012, including one by Lookout Point Communications and one by Design Nine. The first study recommended that the city get directly involved with providing triple -play broadband services, and the second study raised ques- tions about the initial study and recommended a more incremental process for fiber implementa- tion. The City Council and EDA have approved a joint powers agreement to work together on this project and prepare an RFP. This was not intended to extinguish the community wide effort.. The two studies noted above were completed at the end of December without an opportunity to engage in further discussion. Prior to the second Design Nine study, the EDA met with the local incumbent providers to discuss opportunities of working together to achieve a full fiber build -out in Prior Lake. A target broadband RFP was also initiated through a cooperative agreement between the city and Scott County related to certain municipal facilities and nearby businesses. At the January 22 EDA meeting, the Commissioners make the following motion: MOTION BY CHROMY, SECONDED BY MORRIS TO REQUEST THAT THE B.A.C. MEET AGAIN AND THAT THE EDA DELAY FURTHER ACTION TO RECOMMEND A PLAN UNTIL THE COOPERATIVE AGREEMENT R.F.P. HAS GONE THROUGH ITS PROCESS. VOTE: Ayes by Hedberg, Morris, Choudek and Chromy. The motion carried. Commissioner Morris met with consultant Eric Lampland of Lookout Point to discuss his involve- ment with this initiative in 2013. His proposal is summarized in a Scope of Work dated March 18, 2013. Current Circumstances The Prior Lake EDA needs to finalize a recommendation of a high -speed fiber build -out to the City Council in 2013. The proposal from Lookout Point identifies three primary activities to be under- taken over the next three months, including: (1) presentations /meetings, (2) investigations of ex- isting provider plans, and (3) community building. Conclusion The EDA should provide further direction as to the most appropriate process to complete the broadband evaluation process in 2013. This may or may not include entering into a contract with Lookout Point Communications. ISSUES: EDA members must consider what it wants to accomplish and how to best accomplish it for broadband in Prior Lake. If the Lookout Point Communications proposal helps achieve that goal, then a contract would be necessary. On the other hand, if the RFP process that the county is un- dertaking under the cooperative agreement with the city proves successful, the work program for the consultant may be different as the objectives may change subtly or significantly. FINANCIAL The EDA has already expended $80,000 for the Lookout Point BAC Study and $6,000 for the De- IMPACT: sign Nine Study. The EDA's 2013 budget includes $60,000 for Professional Services; however, $20,000 was moved to support the Sewer and Water Fee Deferral Program, leaving a balance of $40,000. The new proposal would utilize $27,120 of that amount. ALTERNATIVES: 1. Motion and second to authorize the EDA President and Executive Director to enter into a con- tract with Lookout Point Communications for $27,120 to provide Broadband technical assis- tance as defined in a Scope of Work dated 3/18/13. 2. Direct staff and the B.A.C. to complete a different process as defined by the EDA. 3. Defer action on this additional study until the results of the County RFP process determines if the incremental process is viable.. RECOMMENDED As directed by the EDA. MOTION: ATTACHMENTS: 1. Lookout Point Communications Scope of Work (short -term and long -term) • Scope of Work March 18, 2012 The next stage of development is divided into two parts. The first part, immediate part, deals with refreshing the EDA and new City Council with current status and recommendations from the BAC. It also begins involvement with the community and provides information back to the Council identifying local inputs, community needs and community support. Immediate Activities: Preliminary Estimate $27,120 (2 to 3 months) 1. Presentations • Prepare and present to the EDA's April meeting: — a technology tutorial (VoIP, (PTV, OTT, mobility, etc.) and plan update — review of the original plan contrasted with the Design Nine review — identify carrier /network technology trends as desired (SDN, virtualization, et al) • Conduct two or three meetings with the BAC, soliciting input and assistance for Community Marketing • Prepare and present to the City Council (2 sessions): — A specific plan to create a hybrid FTTH network for Prior Lake — Educational workshop covering community benefits as discussed in the following actions. 2. Investigate Existing Provider Plans • • Create a mini -RFI listing the goals sought by the City and requesting participation. • Continue conversations with Mediacom, CenturyLink and Integra. • Investigate and document going - forward plans or road maps for each company. • Document any intentions where providers are willing to make commitments. 3. Community Building: (3 community meetings; 10 -15 interviews) • Create a series of low - cost, informal meetings to bring vision to the community and obtain useful feedback. • Interview local stakeholders and gather inputs: City, ISD 719 (Spanish Immersion, Catholic; ?); Chamber of Commerce; Finance (13); IT (Norex); Incubator members: and others. From the Community Profile there are 714 establishments (or 564 via DEED): (2) 1000+ employees; (2) 100-249; (10) 50 -99; (44) 20 -49; (59) 10 -19. Concentrate on eleven major employers including SMSC. • Coordinate with EDA and City efforts to harmonize efforts and ensure objectives are current and in line with community thought and plan. • Review initial efforts to locate a Data Center builder and include certain reviews. Eric Lampland President Lookout Lookout Point Communications /. 880 Osceola Avenue St. Paul, MN 85105.3208 PIDin { Tel: 851.227.8122 Mobile: 651.816.3333 www.lookoutpt.com eric @lookoutpt.com Scope of Work March 18, 2012 The next stage of development is divided into two parts. The first part, immediate part, deals with refreshing the EDA and new City Council with current status and recommendations from the BAC. It also begins involvement with the community and provides information back to the Council identifying local inputs, community needs and community support. Immediate Activities: Preliminary Estimate $27,120 (2 to 3 months) 1. Presentations • Prepare and present to the EDA's April meeting: -- a technology tutorial (VoIP, IPTV, OTT, mobility, etc.) and plan update — review of the original plan contrasted with the Design Nine review — identify carrier /network technology trends as desired (SDN, virtuallzation, et al) • Conduct two or three meetings with the BAC, soliciting input and assistance for Community Marketing • Prepare and present to the City Council (2 sessions): — A specific plan to create a hybrid FTTH network for Prior Lake — Educational workshop covering community benefits as discussed in the following actions. 2. Investigate Existing Provider Plans • Create a mini -RFI listing the goals sought by the City and requesting participation. • Continue conversations with Mediacom, CenturyLink and Integra. • Investigate and document going - forward plans or road maps for each company. • Document any intentions where providers are willing to make commitments. 3. Community Building: (3 community meetings; 10 -15 interviews) • Create a series of low -cost, informal meetings to bring vision to the community and obtain useful feedback. • Interview local stakeholders and gather inputs: City, 1SD 719 (Spanish Immersion, Catholic; ?); Chamber of Commerce; Finance (13); IT (Norex); Incubator members: and others. From the Community Profile there are 714 establishments (or 564 via DEED): (2) 1000+ employees; (2) 100 -249; (10) 50 -99; (44) 20 -49; (59) 10 -19. Concentrate on eleven major employers including SMSC. • Coordinate with EDA and City efforts to harmonize efforts and ensure objectives are current and in line with community thought and plan. • Review initial efforts to locate a Data Center builder and include certain reviews. Near Term Activities: Harder to assess without more detail, perhaps $65,000 Marketing Plan Early Execution • Create a full Marketing Plan: interim City referenda if applicable; pre -sign up; rollout implementation and customer acquisition plans • Execute those portions of the Marketing Plan that occur during this phase — Develop customer service approach and structure — Focus groups for service refinement — Marketing survey informed by specifics in service offerings and price. • Set up a Web Page, Facebook Page and Twitter feed — Create a FAQ and provide for interactive commentary/response • Write a series of articles for the Prior Lake American • Conduct a survey either through existing mechanisms (utility bills with inserts, Survey Monkey) or a more formal approach and analysis (telephone survey). 1 Appendix A From Proposal dated 9 -15 -11 • Create Executable Plans — Phase Two Following Phase One, Prior Lake is ready to move from conceptual understandings to the refinements that build a platform with increasing capabilities. Businesses can have world- class redundant connectivity and affordable high -speed access. Citizens who wish can work from home and children can have the technology and educational access that enables success in the 21 Century. Government can reduce the cost of certain services while leveraging technology toward community benefits. To make those ideas real requires in- depth work. The primary purposes of this phase are to ensure that technical, marketing and organizational elements are conformant to Phase One goals and objectives and within financial parameters. At the end of this phase, Prior Lake will have contractual agreements in support of the business case and an executable architecture, with component designs, all supporting the goals and objectives developed in Phase One. In short, Prior lake will have a Business Case that can support an investment grade prospectus under which funding can be obtained. Deliverables 1. Finalized Service Offerings and phased rollout plan 2. Competed network design, short of implementation 3. Contractual bidding and selection of all vendors and contractors 4. Partnership Agreements, with monetization plans 5. Governance Documents 6. Marketing Plan 7. Investment grade Business Plan with complete Financial Pro -Forma 8. Meetings — Bi- weekly sessions with EDA sub - committee — Council Workshop(s) — Providers, partners, vendors, City and County staff as necessary Tasks Technical Design • Document design criteria and goals utilizing the outputs from Phase One • Create and issue RFPs for all equipment: — Access (fiber termination and mobility) — Transport, — Routing and switching, - Softswitch (voice), — Video solution (content acquisition, IPTV, OTT and caching), — ISP functionality (peering, email, servers, etc.) — Network Management and backend software (OSS /BSS /EMS, etc.) o Note: Open access approaches will require a more extensive review — Other services as defined during Phase One — (note: individual functionalities may be sub - contracted to specialty houses) -- Create testing protocols and specifications, included in the RFPs where appropriate 2 - Create and issue RFP for system integration (two approaches possible) o Internal: Establish job descriptions and teams to conduct integration designs /plans o External: vendor review, evaluation and recommendations Outside Plant Design • Utilizing the Phase One OSP engineering, create a final level of engineering resulting in plans, bills of materials and construction specifications • Conduct complete field engineering (often referred to as a walk -out). • Surveys and subsequent GIS mapping identify fiber routes, services drop entry points, fiber transport, feeder, distribution and service drop designs along with fiber strand assignments and splicing documents. • Optimize routing and optimum placement of all network elements and support structure • Determine exact position and depth of construction running line • Preparation and submission for all permits and easements • Create testing protocols and specifications • Digitizing all of the above information on GIS systems compatible with City and County requirements Note: please consider that the final engineering surveys, particularly underground portions, cannot be performed effectively during snow cover seasons. Contractual Bidding - Vendor review and evaluation - Equipment and Services: each specific design and integration component will be selected for best of breed and conformant to anticipated budget plans - Contractual agreements for content licensing will be estimated - Outside Plant bidding documents will be evaluated and assessed - Present recommendations and assist best- and -final agreements - Subsequent to decisions from City Staff and Council, issuance of Letters of Intent conformant to funding instrument requirements - Finalize Financial Pro -Forma Marketing Plans • Create a series of low -cost, informal meetings to bring vision to the community and obtain useful feedback • Coordinate with EDA and City efforts to harmonize efforts and ensure objectives are current and in line with community thought and plans • Create a full marketing plan: interim City referenda if applicable; pre -sign up; rollout implementation and customer acquisition • Execute those portions of the Marketing Plan that occur during this phase - Develop customer service approach and structure -- Focus groups for service refinement - Marketing survey informed by specifics in service offerings and price. Organization • Finalize governance documents, create legal entity • Create a Board or establish a City Department • Finalize, or at least obtain strong commitments, from all partnerships: services, management, or other offerings • Finalize options for network operation - Internal: define job roles, organizational structure, facilities - External: complete negotiations and agreement(s) 3 The anticipated schedule for Phase Two would be six to nine months; depending most significantly on the extent of Open Access Partnerships pursued. This might be scheduled for January through June or September 2012. Following Phase One and further consultation . with the City, work elements and costs will be refined. The current projection estimates are based on like efforts elsewhere and may not be fully comparable with the goals, requirements and aspirations of Prior Lake. That said Lookout Point has estimated certain costs, such as the Outside Plant Design and large portions of the architectural design detail, legal work specifically for Prior Lake as it is less subject to variation. For example the largest single work effort relates to OSP survey and design; estimated at $465,000. Other elements include architecture, electronics design and RFP creation $104,315, vendor review and evaluation $78,665, legal $50,000. Along with many variables this targets Phase Two in the magnitude of $700,000 to $800,000. This can be modified depending upon the informed needs of Prior Lake. It should be remembered that it is the practice of most FTTP municipal builds to include full reimbursement of all of the above costs in the issued Revenue Bonds. Phase one and two • then represent temporary and recoverable expenditures. Revenue bonds themselves are secured by the activities of the eventual FTTP build and do not generally have recourse to tax payers. Phase Two creates the Business Case for the investment community and prepares to seek funding. Critical to this phase is to harden all aspects of architecture and design; selection of vendors and contractors willing to commit pricing and schedules; detail for legal and governance issues; incorporation of public and private partners; establishment of final Financial Pro - forma; and, selection of an investment banker to solicit funding 4