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City Council Minutes 05-26-2016 SpecialMINUTES SPECIAL MEETING — MONTICELLO CITY COUNCIL Thursday, May 26, 2016 — 8 a.m. Boom Island Room, MCC Present: Brian Stumpf, Charlotte Gabler (left at 9 a.m.), Tom Perrault, Glen Posusta, Lloyd Hilgart Absent: None Others: Jeff O'Neill, City staff. Wayne Oberg, Rachel Leonard, City Attorney Joel Jamnik 1. Call to Order Mayor Brian Stumpf called the special meeting to order at 8 a.m. 2. FiberNet Telecommunications Contract Manager Candidate Presentations Jeff O'Neill, City Administrator, gave a brief introduction and commented on the format of the presentations. The first to present was CTC. A. Consolidated Telecommunications Company (CTC) The following individuals from CTC presented to the City Council: Joe Buttweiler, Kevin Larson, Kristi Westbrock, Andy Isackson, Ryan Rosenwald, CTC presented a review of their business plan which focused on their customer service/support and aggressive marketing components. They touched on other CTC owned companies/services and their existing and future transport routes. There was a strong interest in the data center opportunity. Following CTC's presentation there was a short break. The next presentation was given by Arvig. B. Arvig The following Individuals from Arvig presented to the City Council: Mark Birkholz, David Schornack, and Andy Klinnert. Arvig presented their proposal and the growth that they have had over the last few years. Their focus is on businesses and alternative streams of revenue. They focused on their ring of fiber and the value it would have for the City of Monti cel lo/Fib erNet. Following the presentations the City Council discussed their two options. Ms. Gabler left the meeting but communicated via phone. It was a consensus of the City Council that both options were good and viable. Brian Stumpf encouraged the City Council to look at City Council Special Meeting Minutes — May 26, 2016 Page 1 1 which company feels most comfortable. Discussion continued on the differences between the two companies. Wayne Oberg, Finance Director, highlighted that OTC's incentive fee is based on an increase in revenues while Arvig's incentive fee is based on net profit. He explained this is an important distinction because CTC's is an incentive before costs are taken into account, and Arvig's is an incentive after costs are subtracted from revenues. Rachel Leonard, Communications Coordinator, remarked the companies have two different business models. CTC's model looks at both residential and business accounts, whereas Arvig isn't focused as much on residential accounts. One isn't necessarily better than the other, but Council must decide which one it prefers. There was discussion about an apparent discrepancy of budget numbers given by both companies. Lloyd Hilgart commented that once the existing budget losses for 2016 were added to Arvig's numbers, they were very similar to CTC's. Hilgart stated if the numbers are close, the Council must decide which one is more realistic. Hilgart remarked Arvig seemed to have a better business strategy. Glen Posusta commented that, by looking at pure numbers, the City should choose Arvig. Charlotte Gabler added that she felt that CTC's numbers may be overselling. Glen Posusta moved to approve commencing negotiations with Arvig to contract for FiberNet Management Services. Lloyd Hilgart seconded the motion. Motion carried unanimously. 3. Adjournment By consensus the meeting was adjourned at 11:24 a.m. Recorder: Jennifer Schreiber Approved: Attest: Cit ministrator City Council Special Meeting Minutes — May 26, 2016 Page 2