Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Diane Stoddard, Assistant City Manager
DATE:	August 19, 2014
CC:	Casey Toomay, Assistant City Manager
RE:	Wicked Fiber Economic Development Request

Please place this item on the September 9, 2014 City Commission agenda for consideration.

Background:

In 2013, Wicked Fiber made a request for economic development assistance from the City of Lawrence.  On January 21, 2014, the Public Incentive Review Committee (PIRC) met regarding the request.  The following materials were prepared for that meeting:

· 11/05/13 Staff Memo & Attachments

· Letter from AT&T

· Letter from WOW

· Wicked Broadband response to CTC Report

· Wicked Broadband response to AT&T letter

· Wicked Broadband response to WOW letter

· Wicked Broadband letter to Mayor Dever

· CWC Tax Lien Release

· Correspondence

· WOW Letter

· KU Small Business Development Center Report of 01/21/14

· KU Small Business Development Center Supplemental Materials

The PIRC did not make a recommendation at the January meeting.  The PIRC suggested seeking an RFI (Request for Information) from vendors in order to gain an idea of cost related to leasing the City’s fiber and to gain information about what possible vendor interest may exist. 

City of Lawrence RFI:

The City of Lawrence did issue an RFI from vendors interested in partnership opportunities for fiber to the home.  Four responses to the RFI were received.  The RFI and the RFI responses are posted at:  http://www.lawrenceks.org/private-fiber-request-information. An RFI review committee was established to review the RFI and make recommendations to the City Commission.   Attached is a memo updating the City Commission on the recommendations of the RFI review committee. The committee made several broad recommendations for the City Commission to consider and a majority recommended favorable consideration of the Wicked Fiber request. 

Revised Request from Wicked Fiber:

In March 2014, the City of Lawrence received an updated request from Wicked Fiber, which set forth various alternative options, including restructuring the grant to a loan guarantee and other options. 

May 21, 2014 PIRC Meeting/Recommendation:

The PIRC met on May 21, 2014 to continue discussions on the Wicked Fiber request.  Attached are the minutes from the meeting. After discussion, the PIRC approved a motion recommending Wicked Fiber’s “option B” proposal, outlined in their updated request, which includes the following: 

· A $1 million loan guarantee from the City for phase 1, the build-out of the network to one neighborhood named by Wicked Fiber.

· Waiver of first $20,000 in franchise fees each year for the next 5 years retroactive to Q3 2012

· Permission to co-locate splice cases in City of Lawrence hand holes at locations where Wicked Broadband currently leases City of Lawrence fiber, or connects to existing City of Lawrence fiber. 

· Permission to splice fiber leased from the City using in-house resources. As with the City’s current contractor, this activity would be done under the supervision of City of Lawrence staff.

· A 30 year lease of one buffer tube (12 count) of single mode fiber (SMF) in the fiber-optic cable connecting City Hall with the Law Enforcement Center at $10.

· A 30 year lease of two buffer tubes (24 count) of SMF on each new fiber-optic cable installed by the City of Lawrence in the next 120 months at $10.

PIRC also requested that a draft agreement be prepared with Wicked Fiber prior to City Commission consideration.  The motion was approved 3-2, with Gaughan, Highberger and Farmer in favor and Amyx and Jalenak voting against.

Next Steps:

It was requested that Wicked Fiber prepare a draft agreement for consideration.  A draft agreement was not received by Wicked Fiber, but Wicked Fiber did submit an e-mail with “draft ordinances”.    

There is an additional technical note that staff wishes to add- regarding Wicked’s request for a 30 year lease of one buffer tube of the fiber optic cable connecting City Hall with the Lawrence Enforcement Center.  The fiber is actually owned by Douglas County.  The City uses that fiber in cooperation with Douglas County.  If the City Commission wishes to allow use of that fiber run, it would be recommended that Wicked Fiber seek Douglas County’s authorization for use of that particular fiber and the City Commission pass along its recommendation to Douglas County regarding that matter.