At the August 6th, 2020 Lucas City Council Meeting, Council Member Steve Duke shared his concerns about the numbers Magellan Advisors baked into their feasibility study for the school district’s financial participation on the city run municipal internet service.

A summary of his points:

  1. This issue is one of Steve’s biggest concerns about Prop B and the Magellan study.
  2. The School District currently pays $26.4k per year for their internet connection plus $60k to rent dark fiber from a private company. This adds up to roughly $80k per year.
  3. The Magellan Feasibility study scheduled the School District to pay $280k per year or more than 3x what they currently pay.
  4. The roughly $200k deficit would have to be made up for by adding 145 additional homes to the subscriber list, raising the estimated “take rate” from 55% to 60% (1497 homes).
  5. This means that without 60% of homes, the city would not be financing this project in a reasonable amount of time.
  6. They looked at a 50% take rate and that worked out to take 45 years for the city to get back the money it loaned the internet company. That’s not reasonable.
  7. Reasonable would be 20 years and this plan doesn’t even do that at a 55% take rate.

City Council Member Steve Duke summed up his thoughts:
“I don’t feel comfortable telling the citizens of Lucas that this is a viable plan the way it’s presented right now.”