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OPPORTUNISTIC BUILDS Magellan Advisors has provided a series of network diagrams demonstrating potential network build "phases" that are designed to become the fiber core of San Leandro's network over time. From this core, all other access technologies can be incorporated including Wi-Fi, cellular access and Smart City applications of the future. We call this opportunistic network building. All cities incorporate opportunistic building options into the broadband network, but the City does need to be prepared, both financially and internally, to respond when these opportunities present themselves. Opportunistic builds can be a great savings facilitator for the City. However, opportunistic does not mean ad hoc. The City will need to have a detailed network plan/design that demonstrates the long-term view of the desired network. Potential opportunities will only be considered when they fall on the proposed network routes. Fiber need not be built or installed if it does not connect to any strategic location. These builds also require some capital. A fund should be created and maintained in anticipation of capitalizing on opportunistic builds. A balance of $250,000 in a capital project account is recommended for a city the size and scope of San Leandro. If these funds are not available at the time of joint trench opportunities, a loan from other public works projects in the public right-of-way should be used and paid back at the next capital improvement project budgeting cycle. FUNDING SAN LEANDRO'S NETWORK Funding of a network is generally bucketed into two parts: first, initial construction, and then, ongoing maintenance. Many cities realize revenue in the form of broadband services offered to end users (business or residential, retail or wholesale) and from savings by not having to lease commercial services for their work internal needs. This revenue varies from city to city and from network to network. Magellan Advisors' financial model demonstrates a potential cost model for building and maintaining a broadband network. This model, we suggest, should be viewed as only one option available to the City and assumes a total finance scenario (i.e., the City takes out a loan covering the full cost of construction) rather than incorporating cost savings from opportunistic builds or grant funding options. However, the City of San Leandro can assume that, in actuality, some of this network could be paid for by grant funds and/or the cost of building the network very well may be reduced by joint trenching, use of existing assets, and opportunistic builds as they present themselves. When reviewing the financials, one should not conclude Magellan Advisors is recommending issuing a bond or securing all loans to build this network. Similar networks have been built and subsidized or financed through alternative means using incremental 114