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FiberNet Advisory Board Minutes 06-12-2012MINUTES FIBERNET MONTICELLO ADVISORY BOARD MEETING Tuesday, June 12, 2012 — 6 p.m. 2 °d Floor Conference Room, Prairie Center Building Present: Clint Herbst, Glen Posusta, Jon Morphew, Dennis Sullivan Absent: Wayne Mayer Others: Jeff O'Neill, Brett Demarais, Paul Ruffin, Mark Pultusker (Gigabit Squared), Lynn Dahl Fleming, Justin Miller 1. Call to Order Chair Clint Herbst called the meeting to order at 6 p.m. 2. Additions to Agenda • None 3. Consideration of Approval of Meeting Minutes — April 10, 2012 GLEN POSUSTA MOVED TO ACCEPT THE APRIL 10, 2012 MEETING MINUTES AS PRESENTED. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED 4 -0. 4. Review of City Council Action adopting an Agreement between the City of Monticello and Gigabit Squared to provide Professional Services for consulting to the City on Management and Operations of FiberNet Monticello Jeff O'Neill summarized to FiberNet Advisory Board members the events that have transpired recently. Recently, HBC tendered their resignation of the management contract effective after 90 days. Meanwhile, the City had been in discussions with Gigabit Squared about possible opportunities for FiberNet to increase revenue. With the resignation of HBC, the City investigated the potential for using Gigabit Squared to study our system and look for ways to improve the system. After some negotiation with Gigabit Squared, an agreement was reached to provide consulting services to the City and Council approved the agreement at their June 11, 2012 meeting. The next 30 days will involve a study of the system to identify issues and ideas for solutions. The information will be provided to the City and the bondholders and will include financial review of revenues, expenditures, capital assets and bonding. Mark Pultusker from Gigabit Squared spoke to the FiberNet Advisory Board and advised them of a variety of recommendations to improve FiberNet operations. Mark suggested that residential internet service offerings to current customers could be adjusted in speed. The system has more than adequate capacity to make this offering and would make FiberNet more competitive with other local providers. This would be a revenue - neutral change that provides the City a good marketing strategy. FiberNet Advisory Board Minutes —June 12, 2012 DENNIS SULLIVAN MOVED TO RECOMMEND THAT COUNCIL APPROVE THE CHANGE IN SERVICE LEVELS FOR CURRENT RESIDENTIAL INTERNET CUSTSOMERS. JON MORPHEW SECONDED THE MOTION. MOTION CARRIED 4 -0. Jon Morphew asked what controls will be in place to ensure that the City has a better handle on the management of operations. Jeff O'Neill explained that the bond investment house is requiring a third party to analyze and oversee the financial status of the system. This company is selected by the investors and they will be involved with oversight of FiberNet and Gigabit Squared until the City is no longer facing financial default. Jon Morphew expressed his concern with not maximizing the potential of the system. Mark Pultusker said that Gigabit Squared is prepared to adapt and come in to do a hybrid analysis of the system in addition to looking for ways to increase revenues and decrease expenses. Jon Morphew stated that he prefers to focus on major improvements and not a bunch of micro fixes. Mark Pultusker assured the Board that his company has the technical expertise and will be concentrating on notable improvements to the system as well as day to day management adjustments. He mentioned some equipment that they plan to bring in to help with system testing, which should greatly improve the return on investment for customers and the City. Mark Pultusker noted that they will also be analyzing areas where they can save money and where they may need to utilize better technology. Dennis Sullivan asked Mark Pultusker about the three components that utilize internet: phone, internet and TV. Phone service was supposed to be the biggest revenue source but that has not turned out to be the case. Mark Pultusker noted that Gigabit Squared was originally brought in to look at opportunities to market broadband services offered by FiberNet. They will continue to focus on this as it should be able to be a good revenue generator. Gigabit Squared will be analyzing and surveying customers as to why they chose FiberNet and the services they have. They want to determine the value of offering video to customers and the cost - benefit ratio of providing that service. Dennis Sullivan said that he would be willing to help look at costs and programming for TV in hopes of finding some cost savings. Mark Pultusker noted one of the difficulties with video is trying to find the best resources as each entity has to reach their own agreements with the TV networks. Gigabit Squared will definitely be looking at the TV costs and line -ups that FNM offers. One other area that Gigabit Squared will be looking at is branding and marketing, which needs to be addressed. 5. Other • No added items 6. Next Meeting • July 10 — 6 p.m. FiberNet Advisory Board Minutes —June 12, 2012 7. Adjourn DENNIS SULLIVAN MOVED TO ADJOURN THE MEETING AT 7:18 P.M. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED 4 -0. Recorder: Catherine M. Shuman Approved: July 10, 2012 Attest: C' inistrator FiberNet Advisory Board Minutes —June 12, 2012