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P a g e 1 I 4 I would like to express my gratitude for your willingness to come out this evening and participate in this discussion. I realize I have only been involved with this issue at the city level for approximately five months, but in talking with a good number of people during that time, as well as many of them on the panel with me this evening who have been involved in City Government for many years, all of us feel this may be the single most important decision that will face Murray in the foreseeable future. It will involve tens of millions of dollars over the next three decades, and in one way or another will affect every one of our citizens. This evening we would like to present to you a very brief history of what brought us to this point, an explanation of where we are presently with regards to fiber optics in our city, and the possible options for the future. A little over 10 years ago, in cooperation with 10 other cities, we entered into an interlocal agreement to provide a fiber-optic backbone and service to each of our cities. This would potentially provide state of the art fiber optics technology to each and every home and business in our communities. Even to this day, some 12 years later, there is no technology which can provide faster connectivity in the form of Internet, phone, and television transmission. And in the future, nothing is presently predicted to have a greater application and a faster method of transporting data, than the speed of the light that the fiber optics provides. These cities combined to secure a bond to build the necessary infrastructure for the initial amount of $185 million. A number of years later it was deemed necessary to form another agency referred to as Utah Infrastructure Agency (UIA), with an additional $60 million bond. These bond obligations are absolute and cannot be abrogated. Unfortunately the business model of build out and implementation was not as successful as initially envisioned. Even at the present time, there have not been enough subscribers to the UTOPIA Network to keep it financially viable or sustainable in the future. System wide there are approximately 11,000 subscribers within a network footprint of over 160,000 potential customers. Murray City currently has ---PAGE BREAK--- P a g e 2 I 4 2066 residential and business customers. We are keenly aware that the vast majority of those who utilize the UTOPIA network for their Internet requirements, appreciate very much, the system and the speed that it delivers. It is not our intent this evening to devote any time to how the past decisions were made or who made them. The most positive and productive use of our time tonight, would be to concentrate on where we are today, and the best decisions we can make for our future. It is our intent to explain the options available to us in the most fair and unbiased way possible. We are not here to persuade anyone’s opinion to align with a preconceived notion, but because we value the judgment and input of the citizens of Murray, we seek your counsel and insight this evening. In addition to this town hall meeting, we have previously held three individual focus groups consisting of residents, City employees, and representatives from our business community. These focus groups, along with our UTOPIA Committee, consisting of elected officials, department heads, and senior staff, have helped to form the survey we have available tonight, and which has been on our city website for over a week. It is our hope that you will take the time to fill out that survey, and to inform your neighbors and friends who are Murray residents, to help in this effort as well. During the past election campaign, it became apparent to me, that there existed a wide diversity of understanding with regards to UTOPIA. Some thought it no longer existed, some knew it was still available but were unaware of the cost incurred to our General Fund Budget, and there were many who held a very strong position either in favor of, or against, the fiber optic model as it presently existed. This issue has the potential of having a polarizing effect on our residents, which is uncharacteristic for our city. Murray is very well-known, and even envied, for its independence and its unique sense of community. When I was running for the office of Mayor, I refused to take a position either for or against Utopia. Instead, like those who were also in the election last November, we decided to take a solution-based approach to this problem. The five solutions that I put forth, and promised to study in detail were: ---PAGE BREAK--- P a g e 3 I 4 A go-dark scenario Sell the network to someone else Market it better, to point of sustainability A City operated utility model Stay the course for now, and look for other options. During the course of studying these possible solutions in detail, another proposal was presented in the form of a private public partnership with a company known as Macquarie Capital. Macquarie Capital Group Limited is a global provider of banking, financial, advisory, investment and fund management services. It is based in Australia with more than 70 offices and services throughout the world. It has a staff of more than 14,000 employees and total assets in excess of 150 billion Australian dollars. On December 9, 2013 a Pre-Development Agreement was signed by Macquarie Capital and UTOPIA and UIA. That PDA legally bound t h e A g e n c y , m a d e u p o f U T O P I A a n d U I A to proceed through the first of four milestones, each having different elements and objectives. At the present date, all of the investigative data has been completed for milestone one. Each city now has until June 27 to study and evaluate this information before its representative to the UTOPIA and UIA Boards vote to proceed to the deliverables in milestone two, which is the finalization of the business model. The basic elements of milestone one are: A complete build out of all 11 cities; approximately 160,000 homes and businesses within a 30-month period. A connection from the curb to each address at no cost. A mandatory utility fee of $18-$20 imposed on each residential units, $10 for every apartment, and $40 for each business, whether the services are used or not. This utility fee is to be collected by each city, each month, and paid to Macquarie for a period of 30 years. A yearly increase of this utility fee, based on a determiner such as the Consumer Price Index, with a historical yearly increase of 2 to will be imposed. ---PAGE BREAK--- P a g e 4 I 4 The cities would have the liability to cover the cost of each rooftop where payment isn’t made. Basic service to each address will be 3 Mbps of upload and download speed, with a 20 GB data cap each month. Other levels of increased service would be provided at an additional cost up to one GB of upload and download capabilities. The cities are to receive a yet to be determined amount of upgrade fee. Macquarie has agreed to update the current system along with an ongoing refresh of the overall infrastructure. At the end of the 30-year agreement, the ownership of the system would return to the cities. As you can see this is a very complicated issue and decision. It is made even more challenging by the diversity of each city involved. Present build out varies from nearly 100% in some communities to less than 20% and others. Many of us have different forms of government, various demographics and population. The one thing we have in common is the desire to serve our citizens in the most representative way. For this reason, we have come to you tonight to answer your questions, seek your opinion, and assume the responsibility of difficult decisions that you have entrusted to us to make on your behalf. If, at the conclusion of this meeting, you feel that you still have some unanswered questions, or if you know of those that were unable to attend this evening and would appreciate this same opportunity to express their opinions or get further information, I will be available from 8 a.m., until noon tomorrow at City Hall. Please feel free to come in, there will be signs directing you to the room set up for this purpose. Once again, I want to thank you very much for the time and effort regarding this issue. I hope you find the rest of the evening informative and beneficial.