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<br /> 114 <br /> <br />Funding Summary <br /> <br />Funding for broadband networks can come from many sources. These sources include: <br /> <br />• Dig Once Opportunities <br />• Opportunistic Options <br />• Grants such as traffic signaling funding, E-Rate for schools and libraries <br />• Like/kind exchanges with other carriers or providers (BART, CalTrans, fiber and <br />wireless carriers) <br />• Existing funds including Plan of Record (POR) allowances <br /> <br />Ongoing maintenance funds will be offset by offering wholesale broadband <br />access/services to businesses and anchor institutions. These funding sources have not <br />been reflected in the financial model. <br /> <br />Financial Model <br /> <br />The included financial model (found in Appendix E) makes assumptions about network <br />costs, network maintenance costs, revenue and funding sources. This model uses <br />conservative estimates for end user take rate and revenue opportunities and was built to <br />reflect the “worst” case scenario for network costs and associated funding requirements. <br />The model does not take into consideration any of the potential funding or grant sources <br />available to help augment the cost of the network, nor does it include any potential <br />network lease savings by using the City’s own network assets instead of leasing services <br />from outside providers. <br /> <br />Many of the benefits of having a broadband network owned and operated by the City are <br />difficult to capture in monetary terms, such as having broadband available for the <br />disadvantaged population, Smart City initiatives, aging in place, or increased security and <br />services from the EMS groups. Monetary economic development advantages that come <br />from having a robust broadband network should also be considered. <br /> <br />Magellan Advisors does not recommend rushing out and issuing a bond or financing the <br />project in total; however, as the model indicates, such a paradigm would be financially <br />viable if all the assumptions are met. <br /> <br />These models demonstrate the two phases of the City network: Lit San Leandro and the <br />proposed expansion to the City network. In general, each phase calls for building a core <br />network, then providing businesses within five hundred (500) feet75 of the core with <br /> <br />75 Five hundred feet was chosen as an average distance that is within the generally accepted cost to have an <br />acceptable return-on-investment. At distances further than 500, the cost to construct the “drop” from the core to <br />the business increases and makes it more difficult to get a return-on-investment (ROI). However, the City should <br />take each request on a case-by-case basis as each drop cost may differ slightly depending on how many potential <br />subscribers are being connected