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<br /> 115 <br />revenue-generating services that help offset the cost and maintenance of the network. <br />The take rate shown is 30% of those within the 500-foot buffer zone. In this scenario, the <br />City would be responsible for providing the fiber lateral to the building for businesses, and <br />then an ISP would be responsible for providing all the premise equipment to the end user. <br /> <br />Model C shows a combination of Phase 1 and 2 scenarios, demonstrating that the City <br />could be profitable if it were to own and operate both phases as one network. In this <br />scenario, there are some economies of scale that can be recognized including having <br />one network team and management vs two separate models. <br /> <br />We also model each Phase as if a standalone network with Lit San Leandro following <br />Magellan Advisors business model recommendations in Phase 1, and with the City <br />managing Phase 2, also using Magellan Advisors recommended business assumptions. <br />Modeling for each phase demonstrates that both can become financially viable. <br /> <br />Model A assumes revenue and cost projects for Phase 1, using Magellan’s <br />recommended business model. <br /> <br /> <br /> <br /> <br />Model B assumes the City builds and maintains Phase 2 of the network and sells <br />wholesale services to ISP’s. <br /> <br /> <br /> <br /> <br />FUNDING <br />REQUIRED <br /> <br />$13,043,300 <br /> <br />NORMAL PAYBACK <br />PERIOD <br />16 Years <br /> PAYBACK PERIOD USING <br />FREE CASH FLOW <br /> <br />15 YEARS <br /> <br />CUMULATIVE FREE CASH <br />FLOW <br /> <br />$3,802,000 <br /> <br /> <br /> <br />FUNDING <br />REQUIRED <br /> <br />$19,852,669 <br /> <br />NORMAL PAYBACK <br />PERIOD <br />20 Years <br /> PAYBACK PERIOD USING <br />FREE CASH FLOW <br /> <br />17 YEARS <br /> <br />CUMULATIVE FREE CASH <br />FLOW <br /> <br />$4,976,000 <br /> <br /> <br />Figure 69. Model A Financial Snapshot <br />Figure 70. Model B Financial Snapshot