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<br /> 116 <br />Model C assumes a combined Phase 1 and Phase 2 costs and deployment assuming <br />one entity (City, Lit San Leandro or other) were to build and maintain the network. <br /> <br />Model C – Combined Network Models <br /> <br /> <br /> <br /> <br />Financial Model Conclusions <br /> <br />The included pro formas (found in Appendix E) demonstrate that even with these <br />conservative assumptions, the City could be cash flow positive in a few years if it elects <br />to provide businesses with broadband services while enjoying the off-balance sheet <br />benefits of a city owned network, which are more difficult to quantify. <br /> <br />• Each phase can be profitable, including Lit San Leandro (Phase 1) <br />• Model does not consider any savings from opportunistic builds <br />• Model is only one potential model for the City <br />• Model does not show any cost savings the City would have by not leasing from <br />existing <br />• Revenue will be from businesses within 500 feet of the fiber run and from leasing <br />of vertical assets and fiber to wireless providers <br />• No Smart City costs were included in the model <br /> <br />The City of San Leandro can build and maintain a profitable broadband network <br />throughout the City through careful planning and execution. The City will have to assess <br />its own risk tolerance and tactical abilities to make this network successful. Magellan <br />Advisors has provided guidance on possible options. <br /> <br /> <br /> <br />FUNDING <br />REQUIRED <br /> <br />$30,785,000 <br /> <br />NORMAL PAYBACK <br />PERIOD 20 Years <br /> PAYBACK PERIOD USING <br />FREE CASH FLOW <br /> <br />14 YEARS <br /> <br />CUMULATIVE FREE CASH <br />FLOW <br /> <br />$20,926,000 <br /> <br /> <br />Figure 71. Model C Financial Snapshot