<ul><li>Identify municipal entity (City, County, Utility District, or Regional District) ready to partner.&nbsp;<ul><li>Local government desires participating in owning the system and having a beneficial interest of the system after repayment of the financing.&nbsp;</li><li>Define broad project scope, assess market conditions</li><li>Anticipated Contributions from Municipal Partner&nbsp;<ul><li>Use agreement to sign on to use the service.</li><li>Support of existing municipal utility systems (if any)</li><li>Assistance in connecting schools, hospitals, other institutions and major local business to sign onto system.&nbsp;</li><li>Local financial support totaling appx 25-30% of project costs from:<ul><li>Local Funds contributions,</li><li>State Funds contributions,&nbsp;</li><li>Contributions of existing telecom assets (and/or rights of way) which could be utilized in the new build,&nbsp;</li><li>Utilize funds awarded to the local community from ARPA (American Rescue Plan Act) or RDOF (Rural Digital Opportunity Fund)</li><li>Private Equity Investors, and/or</li><li>Local investors willing to purchase Junior Revenue Notes which would be subordinate to the Senior Revenue Notes.&nbsp;</li></ul></li></ul></li></ul></li><li>Coordinate Development Team, including design firms, contractor, financing firm, operator, grant writers, and legal team&nbsp;<ul><li>Enter into exclusive Predevelopment Agreement with Municipality,</li><li>Engagement of Professionals, including MCM</li><li>Qualified Design and Engineering firms, as well a construction contractor able to provide construction manager at risk, or otherwise, as directed by state laws.&nbsp;</li><li>Qualified Operator on board to provide operational expertise, marketing to customers, and in certain cases provide credit support in the form of [potentially a minimum take rate]&nbsp;</li></ul></li><li>Credit Review, Project Creation, and Building ProForma<ul><li>Fine tune Initial Project scope,</li><li>Build detailed financial models,</li><li>Engineering, Design Development,&nbsp;</li><li>Project Pricing Estimates,</li><li>Interaction with Municipality on a periodic basis</li></ul></li><li>Create Financing Documents, operator agreements, design/build contracts, anchor tenant agreements, intergovernmental agreements, etc.&nbsp;<ul><li>Engagement of Bond Counsel</li><li>Interaction with Municipality on a regular basis</li></ul></li><li>Sell the financing<ul><li>Once the “solution” is fine tuned the transaction can be offered to investors interested in purchasing the resulting securities or loan (ie, Senior Revenue Notes and/or Junior Revenue Notes).&nbsp;</li><li>Upon sale of securities at market rates, the transaction would be set to close and cash deposited into a Project Account held by the Trustee.&nbsp;</li></ul></li><li>Launch Initial Pilot and Getting in Business&nbsp;<ul><li>Start PILOT Construction&nbsp;</li><li>Operations Plan Implementation</li><li>Marketing Plan&nbsp;<ul><li>Sales Force</li><li>Web interface mapping for customers to pre-subscribe for service</li></ul></li></ul></li><li>Full System - Federal/ State Grants Submittal and Approval Process<ul><li>Process and Timing – still being defined by Federal and State broadband offices</li><li>Involvement with State Broadband Offices</li><li>Involvement with State Depart of Local Affairs</li><li>Professionals will be needed to complete planning and mapping for the Federal Grant application. It is widely anticipated that likely requirements may include:<ul><li>Detailed Business Plan&nbsp;</li><li>Detailed Mapping of the service area (requirements still TBD)</li><li>Detailed Engineering</li><li>Environmental Studies</li><li>Grant Writers</li></ul></li></ul></li><li>Long Term Full System Build Out<ul><li>Grow incrementally from:&nbsp;<ul><li>grants received,</li><li>cash flows from operations, and/or&nbsp;</li><li>future revenue note financings after stabilization of the PILOT and growth of the system.&nbsp;&nbsp;</li></ul></li></ul></li><li>Other Best Practices<ul><li>Phase construction in order to not incur too much debt early on,</li><li>Don’t build line extensions until [40%] of customers to be served on that line are pre-registered for service. &nbsp; Areas with higher pre-subscriptions % will be prioritized.</li></ul></li></ul>

This checklist of key milestones will help you deploy your municipal broadband system.

Broadband Grant Expert

Chris Perlitz

Lessons

Articles

Enroll for free today