City Council Study Session November 8, 2017
Item 4. UPDATE ON THE DOWNTOWN EXPANDED FIBER PILOT PROJECT AND FURTHER DEPLOYMENT
Joint Study Session FTTP Capital Recovery Models November 8, 2017
Downtown Expanded Pilot Construction is underway right now Signing up customers to 3-year commitment under approved rate structure Drops are being constructed for those that sign up While this has limited capital exposure with a highly probable successful outcome, use of this model beyond the downtown has a high amount of risk associated with it FTTP Capital Recovery Models
Downtown Expanded Pilot 79 Applications (50 Internet, 22 Enhanced Internet, 7 Multi-Dwelling) 11 already activated (original pilot customers) 63% of minimum desired take-rate (126 customers) 74% of original revenue projection 12 year Internal Rate of Return = 4.8% (calculated with current applications) FTTP Capital Recovery Models
Cumulative Cost/Revenue Curve $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Year 1 Year 3 Year 5 Year 7 Year Year 9 11 Revenue Cost Cumulative Cost / Revenue Curve August 2, 2017
Current Recovery Models Section 4.3 of the approved fiber rate book Net revenue test Cost of extension of service is compared with present value of 4 years of net revenue Net revenue = Incremental revenue from the new customer incremental cash operating expense to serve If PV of 4 years of net revenue => extension cost, then no contribution is needed from the customer in support of the extension Else customer contributes the difference up front FTTP Capital Recovery Models
Current Recovery Models Net revenue test - Continued Works well for a new single customer with a dedicated connection (Active Ethernet service) Will not work well in shared gigabit service extensions where multiple customers are needed to justify the extension Downtown extended pilot took on risk for the construction cost Different models are needed to achieve acceptable risk for growth FTTP Capital Recovery Models
Shared Gigabit Rate Structure Internet - $85 Enhanced Internet - $220 Multi-Dwelling Unit - $25 per tenant 100 Mbps Transit - $40 1000 Mbps Transit - $60 1000 Mbps Enhanced Transit - $140 FTTP Capital Recovery Models
Service Layers of Open Access FTTP Capital Recovery Models
Potential New Recovery Models Up front contribution in aid of construction (group of customers) Group forms a customer representing legal entity: Association, LLC, or other HBPW signs agreement with entity and receives up front payment for extension of service Entity dedicates asset to HBPW, which maintains the system through rates Contract with entity could have special provisions such as restricting service to a geographic area FTTP Capital Recovery Models
Potential New Recovery Models Partial upfront contribution in aid of construction with credit assurance instrument HBPW installs extension to area supported by partial payment from a legal entity, usually would be a developer Entity provides a credit assurance instrument in amount equal to the value of the remaining cost After some defined period, say 5 years, of net revenue, the HBPW is able to draw upon credit instrument for remaining shortfall FTTP Capital Recovery Models
Potential New Recovery Models Net revenue evaluation with a group of customers (Demand aggregation) BPW identifies take rate commitment requirement by geographic area Demand aggregation occurs through marketing and neighbor to neighbor interaction Once interest levels are sufficient, three year commitments are obtained from those customers BPW then builds out to that area FTTP Capital Recovery Models
Potential New Recovery Models Example: Natural Demand Aggregation HBPW identifies geographic zones and number of committed customers needed by zone Once expressions of interest reach a certain threshold, 3-year commitments are obtained to provide enough capital recovery assurance to build out that area This amount could be all or some part of the capital cost FTTP Capital Recovery Models
Current Expressions of Interest FTTP Capital Recovery Models
Potential New Recovery Models Binding commitment from single entity to pay for construction over extended timeframe Taxing/Special Assessment authority commits to repay construction over a period of time Authority dedicates assets to HBPW ownership and HBPW maintains through rates Required construction costs are calculated based on the area Could be done within the City of Holland footprint FTTP Capital Recovery Models
Potential New Recovery Models Example: Same as water extensions HBPW identifies zones of potential fiber development Residents and business owners in zones circulate petitions to drive to a sufficient interest for the Assessing Authority to read in an assessment Assessment provides the HBPW assurance of capital cost recovery As with water service, the assessment could be two parts, pass and drop Everyone in the zone would be assessed the pass Those hooking up would be assessed the drop Potentially the four-year revenue test could absorb the drop cost FTTP Capital Recovery Models
Legislative Risks House Bill 5099 recently introduced prohibiting the use of local funds for providing broadband Internet service We provide an open access network that encourages competition We do not use any tax dollars We have already proven to be successful Likely to be seen again in a different form FTTP Capital Recovery Models
Recommended Next Steps Continue learning from experiences of rolling out a new service downtown Capitalize on broadband development opportunities throughout existing larger fiber footprint Maximize the node for downtown by hooking up other customers in the adjacent areas Reach consensus on the way forward for expanding Shared Gigabit beyond downtown FTTP Capital Recovery Models
Specific Questions Is there consensus on utilizing all proposed capital recovery models where they make sense? For the Shared Gigabit Service inside the city limits, is there a preference between using special assessments or demand aggregation? Is there alignment that we should be maximizing the current assets and being opportunistic regardless of location? FTTP Capital Recovery Models
Staff Recommendation Inside the City Carve city into geographic nodes Pick one area and calculate cost for construction Evaluate demand aggregation and assessment models for cost recovery Present options for feedback Outside the City Take advantage of opportunities that present themselves and use a model that fits This will continue to grow revenue to support overall development of the broadband utility FTTP Capital Recovery Models
High Level Node Layout FTTP Capital Recovery Models
Current Expressions of Interest - potential next project footprint FTTP Capital Recovery Models
Item 5. DEFERRED ACTION FOR CHILDHOOD ARRIVALS (DACA)
The Impact of Ending DACA in Michigan Holland City Council Meeting November 8, 2017 HILLARY SCHOLTEN, STAFF ATTORNEY MICHIGAN IMMIGRANT RIGHTS CENTER (MIRC) WWW.MICHIGANIMMIGRANT.ORG
What was DACA? Executive action announced on June 15, 2012. Allowed certain people who came to the United States as children and meet several guidelines to request consideration of deferred action for a period of two years, subject to renewal. Eligible for work authorization. Deferred action was a form of prosecutorial discretion to defer removal action against an individual for a certain period of time. Deferred action did not provide lawful status.
DACA ELIGIBILITY You were eligible to request DACA if you: Under 31 on June 15, 2012, but at least 15 (some additional qualifications if in removal proceedings) Were under the age of 31 as of June 15, 2012; Came to the United States before reaching your 16th birthday; Have continuously resided in the United States since June 15, 2007, up to the present time; Were physically present in the United States on June 15, 2012, and at the time of making your request for consideration of deferred action with USCIS; Had no lawful status on June 15, 2012; Are currently in school, have graduated or obtained a certificate of completion from high school, have obtained a general education development (GED) certificate, or are an honorably discharged veteran of the Coast Guard or Armed Forces of the United States; and Have not been convicted of a felony, significant misdemeanor, or three or more other misdemeanors, and do not otherwise pose a threat to national security or public safety.
DACA RESCISSION On September 5, 2017 the Trump administration announced the rescission of the DACA 2012 memo. What does that mean for individuals who are eligible for DACA? Individuals who do not have DACA today will not be able to obtain it in the future, unless their applications are currently pending with USCIS.
DACA RESCISSION: Employment Anyone currently working with a DACA Employment Authorization Document (EAD) should be allowed to continue working until the document expires. Unexpired DACA EADs are valid for new employment, too. Terminating someone or refusing to hire them because their EAD will expire in the future is illegal discrimination. Employers or workers with questions about the law should contact the U.S. Department of Justice Immigrant and Employee Rights Section.
DACA RESCISSION: Driving In Michigan, driver's licenses are issued to be valid for the same period of time that a person's proof of legal status is valid. So, when a person's DACA expires in the future, his or her driver's license will also expire. Unless he or she has obtained a different form of "legal presence" under Michigan law, the license will not be renewed.
DACA RESCISSION: Education High school students will still be allowed to attend public high schools after their DACA expires based on the U.S. Supreme Court's decision in Plyler v. Doe. No one can be required to provide proof of legal status for K- 12 education. In Michigan, most public colleges and universities admit undocumented students and many allow undocumented students to pay in-state tuition, but there is no uniform policy.
DACA RESCISSION: Michigan In Michigan, there have been 6,430 initial grants of DACA since the program s inception. As of 2016, 72 percent of DACA-eligible immigrants in Michigan, or 7,339 people, had applied for DACA. An additional 3,000 residents of the state satisfied all but the educational requirements for DACA, and another 2,000 would be eligible as they grew older.
Immigration Impact: Michigan http://www.mlive.com/news/index.ssf/2017/03/economic_impact_of_immigration.html
Immigration Impact: Michigan As consumers, immigrants add billions of dollars to Michigan s economy. Michigan residents in immigrant-led households had $14.2 billion in spending power (after-tax income) in 2014. Immigrant entrepreneurs in Michigan generate over a half-billion dollars in annual business revenue. 37,299 immigrant business owners accounted for 8.7 percent of all selfemployed Michigan residents in 2015 and generated $683.8 million in business income. In 2015, immigrants accounted for 20.3 percent of business owners in the Detroit/Warren/Livonia metropolitan area and 17.3 percent in the Grand Rapids/Wyoming metro area. https://www.americanimmigrationcouncil.org/research/immigrants-in-michigan
Immigration Impact: Michigan Immigrants in Michigan have contributed billions of dollars in taxes. Immigrant-led households in the state paid $3.8 billion in federal taxes and $1.5 billion in state and local taxes in 2014. Undocumented immigrants in Michigan paid an estimated $86.7 million in state and local taxes in 2014. Their contribution would rise to $113.9 million if they could receive legal status. DACA recipients in Michigan paid an estimated $15.9 million in state and local taxes in 2016.
Legislative Solutions: The DREAM Act The Dream Act of 2017 would make the following changes to current law: Grant current DACA beneficiaries permanent resident status on a conditional basis, and allow TPS beneficiaries, people without lawful immigration status, and people with final orders of removal the opportunity to apply for this same immigration status. Permit conditional permanent residents to obtain lawful permanent resident (LPR) status (sometimes referred to as getting a green card ) if they go to college, have worked for a certain amount of time, or served in the U.S. military. They also would have to meet other requirements.
Cont. Legislative Solutions: The DREAM Act Provide a pathway to U.S. citizenship. A person would have to be in conditional permanent resident (CPR) status for 8 years before they could become eligible to apply for LPR status, and after a certain period as an LPR (probably five years), they could apply for U.S. citizenship. Stay (stop) the removal proceedings of anyone who meets the Dream Act requirements and young people over 5 years of age who are enrolled in elementary or secondary school. Improve college affordability for undocumented youth and other immigrants by changing rules that limit their access to in-state tuition and college loans.
QUESTIONS? HILLARY SCHOLTEN, STAFF ATTORNEY MICHIGAN IMMIGRANT RIGHTS CENTER (MIRC) HSCHOLTEN@MICHIGANIMMIGRANT.ORG WWW.MICHIGANIMMIGRANT.ORG
Deferred Action for Childhood Arrivals (DACA)
Granted DACA in the U.S. 800,000 Excludes persons who applied for an initial grant of DACA and were not approved. Initial DACA requestors that were approved at first, but later had their initial request terminated, or denied.
As of September 4, DACA Recipients, continued 40,000 DACA recipients have adjusted to lawful permanent status resident status. 70,000 granted DACA failed to renew at the end of their 2-year validity period, or denied approval. 690,000 active
Active DACA Recipients Country of Origin Mexico 548,000 El Salvador 25,000 Guatemala 17,700 Honduras 16,100 Peru 7,420 Granted as of 9/4/2017 All information can be found in the United States Citizenship and Immigration Services (USCIS) is a component of the United States Department of Homeland Security (USDHS).
Where are DACA residents living? 1. California 197,900 2. Texas 113,000 3. Illinois 35,000 26. Michigan 5,400 As of September 4, 2017.
Leading Core Base Statistical Areas Detroit-Warren-Dearborn, MI (2,400) - 46th Grand Rapids Wyoming (1,600) 67th Other Areas (1,400)
Gender Age as of 9/2017 Demographics of DACA recipients Sex Number Percent Female 362,700 52.6 Male 326,900 47.4 Age Number Percent Under 16 2,000 0.3 16-20 196,500 28.5 21-25 253,100 36.7 26-30 163,400 23.7 31-36 74,900 10.9 About half of the active DACA recipients are 20 to 27 years old (interquartile range is the range between 25 th and 75 th percentile).
References Population Data: https://www.uscis.gov/sites/default/files/uscis/resources/reports%20a nd%20studies/immigration%20forms%20data/all%20form%20types/d ACA/daca_population_data.pdf Other Data: https://www.uscis.gov/sites/default/files/uscis/resources/reports%20a nd%20studies/immigration%20forms%20data/all%20form%20types/d ACA/daca_renewaldata.pdf
Item 6. DISCUSSION ON THE STATUS OF THE CURRENT AND FUTURE CITY GREENHOUSE
Memorandum of Understanding a) Heart of Holland Group donates $500,000 to City. i. $460,000 to offset assessments and capital costs. ii. $40,000 for purchase of greenhouse. iii. This $500,000 is donated to the City regardless of whether the greenhouse is ultimately transferred to Evergreen Commons. b) City to transfer ownership by quit-claim deed immediately after 2 nd payment. c) Transfer of greenhouse will be as-is and where-is in its then current condition. d) No mention of de-listing in agreement.
Memorandum of Understanding e) Historic Landmark designation noted numerous times in appraisal. f) Agreement does not obligate the City to de-list or attempt to de-list. g) The agreement does not require the transfer of property to be contingent on de-listing. h) No deadline in agreement.
Process for De-Listing a)council must appoint a study committee composed of persons with a clearly demonstrated interest in or knowledge of historic preservation and include representation from the local Historic District Commission. (December 2017) b)the Committee will assess the historic significance and integrity of the City Greenhouse and determine whether it i. Has lost its physical characteristics that enabled establishment of the historic status. ii. Was not significant in the way it was originally defined. iii. Was established pursuant to defective procedures.
Process for De-Listing c) Committee prepares a report on its investigation. (Dec 17 - Feb 18) d) Report submitted to MI Historical Commission, State Historic Preservation Review Board, and the City Planning Commission. (Feb 18) e) Committee holds a public hearing. (March 18) f) Committee makes a final report and recommendation to Council. (May 18) g) Council then decides on the de-listing. (May 18) h) De-listing must be done by ordinance. (May July 18)
Other Options: a) Demolish greenhouse. Notice to Proceed must be approved by HDC. Then de-list. b) Evergreen Commons pursues a Certificate of Appropriateness (COA) for keeping a portion of greenhouse. c) City moves most significant portion of greenhouse and de-list property. COA from HDC required. d) City retains greenhouse, renovates it and adds-on.
Condition of Greenhouse
Proposal for New Growhouse a) Location: 24 th Street b) Cost: $500,000 budgeted c) Timing: Was to be bid in summer 2017 and constructed in fall/winter
Status Report on the Civic Center Construction and the Launching of the New Board
Civic Center Place Board First Meeting tentatively scheduled be November 20 th at 5pm. First order of business will be to review a draft RFP for the Management, Marketing and Sales of the Center. Once the Management Contract is in place, the Board will begin to recommend various policies for adoption by City Council. The DDA, PSD, Farmers Market, Civic Center and Windmill Island are in the process of being brought under the City Managers office with completion in early December.