Phil Lawrence: Municipal Internet Business Not In The Best Interest of All Residents 

During the August 6th City Council Meeting, Phil Lawrence shared his thoughts on the Magellan Feasibility study, and creating a municipal run internet business.

His conclusion: 

“With that being said, personally, I do not support the current broadband proposal based on careful consideration of facts both pro and con to this venture to be in the best interest of all residents of the city, ALL residents of the city.

Nor do I feel this city should put in even more so.

Nor do I feel that this city should put itself in a position by gambling with the tax dollars of each resident on a new business venture, which we have absolutely no experience in, and at best, honestly has based on whose information you read, has less than a 50% chance of success.

And for the record, over 50% of all new businesses fail. But I guess we can say that the broadband business venture will never fail because the city has an endless pool of your tax dollars to keep throwing and to keep it afloat. No matter what, right?”

Here is the video of Phil’s comments. https://youtu.be/0oDMowf_jrM?t=6849

Full Transcript of his speech: 

So, you know I had, I’ve got a lot of stuff written down here, I narrowed it down, I whittled it down from where we started.
I’ve been working on this for about two days of work but every day, I see more and more emails, I get phone calls from people, I’ve talked to people in the neighborhood about this thing. So it’s a very, very fluid issue, for me. It’s a moving target, so to speak.

One thing that I want to kind of touch on before I go into this is that one of the gentlemen who had spoken a little while ago, made the reference that to not to put this on the ballot, because we didn’t want to put it on the ballot, for whatever reason was not the right thing to do.

And to that, what I’d like to say is that personally, I think between the Congress and the Senate of the United States that one of the reasons that they really can’t get anything done is because one side or the other will not put something up for a vote for personal reasons. Not because it’s not a good idea. Not because it’s not something that’s viable for the state, or whatever area they’re representing, it’s because they just personally don’t want to put it on there.

So I think that’s a very, very valid observation that that gentleman had, and I just wanted to touch on that for a second.

There’s been a ton of innuendos. misspeaks, half truth, he said/she said, and all of that, as far as conversations, written editorials regarding adventure, over the past couple of weeks, to the mayor’s point [and] to the point of almost divisiveness amongst some council members.

So before I start, I just want everyone to be crystal clear on a couple of things from my perspective so we’re all on the same page.

First of all, and I’m not speaking about anyone in particular, I’m just using generalizations, everyone okay? So let’s be clear on that. I mean, take your feelings off your sleeve, if that’s what you’re wearing. I’m just being general here, right?

I’m not up for reelection. So there’s no incentive for me to even think about leaning one way or the other for the result of such nor do I work for the city in any capacity in which I could be promoted, etc. to work in this venture should it succeed.

Nor, am I a resident who has expressed any interest in running and are working for this venture should be placed on the ballot and approved by the voters in the city.

The best part of me for this is my current tax rate is frozen. So no matter which way this goes, you could vote to borrow $500 million, and everyone’s taxes go up $500 a month, and I wouldn’t have to pay an extra cent. A lot of other folks in the city are in the same position. So there’s no incentive as far as tax increase concerns for me to lean one way or the other.

This is all about the residents for me. Nothing more, nothing less. Exactly what you’re elected me to do. So let me be clear with this, I have no dog in this fight. Other than ensuring each and every resident in the city has a full and totally unbiased picture of all of the facts, pros and cons as they relate to this business venture the city is proposing.

It is always important to know who has a dog in the fight as well as how big of a dog that is when listening to someone trying to separate you from your hard earned money whether it’s a city venture is something as simple as purchasing a car right?

Let me start out with this. You go to buy a car. You go do your research at home, compare car prices, different cars, different dealers before starting shopping, so you know what you’re doing when you go to the dealership you’re informed you’re educated about the vehicle and you know pretty much you just want to go to the test drive and make sure you like the way the car goes.

You go to the dealership knowing that the salesperson’s bottom line job, their real reason for being there on that spot on planet Earth at that exact day and time, is to sell your car by any means necessary. Why?

Because they get paid a commission based on the number of cars they sell each month or they are electec salesperson plus the commission right?

Or do you go into the dealership lot, no research whatsoever and believe everything the salesperson tells you, pay the price listed on the windshield without asking some hard questions about the car purchase price and upkeep costs because the salesperson sounded like they were telling you the truth or because you just really wanted a new car any cost. Sort of that we were worried about how to pay to note when the payment coupons arrive.

I asked you this because you’re not only being asked about car November, but you’re being asked to buy a Ferrari and you’re also asking all of your neighbors throughout the city to be a co-borrower on the loan documents and be responsible along with you for making the payments.

So I found it to be only prudent to research all the information of pros and cons about that type of car before making the purchase. After all, what good is spending all of your money buying that Ferrari when it needs a tune up and tires and you can’t afford to have that done, or the engine fails because it was only designed to last three years before needing rebuilding because you failed to ask those “Cost of Ownership” questions prior to making the purchase.

With that being said, and without beating a dead horse, let’s look at a couple of what I consider consideration points in this venture that is being proposed.

Number one, there should be some hard conversations about establishing a special assessment district, they’ll be carved out to just the areas that currently do not have fiber access, whereby only those homeowners who are impacted when taxes are increased. This needs to be fully investigated and vetted from an overall feasibility standpoint.

Like one resident who sent me an email said my tax (piece?) around $100 a month based on a 13 cent per hundred dollar property value. This means that a resident’s internet cost per month would be $215 dollars. $100 for taxes and $115 for serves if they decide to even take the service. Now I could be wrong. I doubt anyone in the city or majority people in the city are currently paying $215 a month for internet, which only very much could be the case for over half the entire city, 55 plus percent, not just the hotspots if everybody doesn’t sign up to pay $115 a month for the city venture. This is not a doom and gloom forecast rather is a very real world could happen snapshot of what could happen if the rosy “Best Picture” ceases to exist at any point in time.

Number two, we are currently in talks with an existing provider to provide services to the residents here in Lucas, which is a much better option in my opinion for the city of residence. As such, I have to wonder, what is the problem with completing this process prior to voting for an election as there will still be more than enough time to call a special meeting and having a vote for the November ballot if the talk did not bear fruit.

Whenever there’s too much of a rush or something I always ask myself, what’s in it for them? 

And in this case, is someone hoping that the talks don’t bear fruit for some reason? Dog in the fight? Right? Sorry. It’s just my 30 year plus investigator career that’s [?] right. To me it would be a critical flaw as well as an error in the process to not allow any city and carrier partnerships meetings to be completed prior to rushing to a vote on something that will not be impacted one way or another from a time perspective, by short delay.

Also, we’re going to spend almost $30 million on this venture overall by the time it’s all said and done. So I feel like using those funds to assist with the GE GCC talks, and going to them will mean more than just going to them with our hats in our hands as was stated earlier in the evening tonight.

There was a document prepared by Magellan posted on the city website a few days ago prior to being vetted by city council for accuracy. I have to ask “are we assuming everything he says gospel just because we paid them?” If so I have a problem with that is they have a big dog in the fight at this utility moves forward. Not to mention we’ve already paid them over $56,000.

Keep in mind, Magellan was retained to do a feasibility study only for the city.

But at times the information being provided by them transcends from feasibility study and starts to feel like they’re trying to force feed sell me a very expensive timeshare. Remember that dog in the fight that I touched on a second ago? To the residence always ask yourself when being presented information “what’s in this for the person providing this information”?

If you can honestly answer that question with nothing then consider the information totally unbiased. But if there is any advantage to the information provider by providing the information, then you must view the information as biased.

Remember the car salesperson right? And therefore such information must be considered with that reservation taken into account. I’m talking to everyone involved in the process from original concept through fruition.

I’ve received emails and social media conversations where a resident was talking about allowing smaller lot sizes and higher density housing to force carriers to provide Internet to homes and Lucas. I can promise you that this is a rabbit hole no one wants to go down. We have fought long and hard to keep Lucas as Lucas with good schools and high property values. Were higher density to be approved, you can say “Here comes sewer. Goodbye Good Old Lucas lifestyle” and the last city with top schools. And I’m proud to say it has top schools and high property values between here and everything due north, “keeping it country” would be gone.

Next, let me ask you this. If your investment banker can view the business proposal and said “Hey, Mr. Mrs. Lucas, I have this great deal. Don’t worry, it won’t really cost you anything. It’s a free lunch, because we’re going to use some of that money you have in your rainy day savings account that you have, which you haven’t been using anyways right? So it’s free money. So we move $20 million from your rainy day savings account and we return it to you with a profit of about $2 million. And oh, let’s say 12 years. I know it seems like a long time but it’ll pass before you know it. Obstacles [now]? But if there are any obstacles in 12 year period, your guesstimate a profit [advantage?] and your original $20 million investment might need to be increased. Just the cost of doing business, Mr. Mrs. Lu, stay afloat. You don’t want to default right?”

What would you say to that deal from the banker always just fire the person on the spot for even proposing that sort of adventure.

Like a lot of residents have told me they have no problem at all with paying for any service that they’re are using like water permits, etc. They do overwhelmingly have a concern with the possibility of having to pay for service via tax that they will never use. As a matter of fact, this person was asking me recently, “what other city charges and places a tax on its residents to pay for a service that that resident does not want or use?” This could be the case if sustainability numbers ever fell below records and totals, which is very possible.

In closing, with everything being said, respectfully, I feel it would be impossible to not to mention irresponsibly, on my part, when taking into consideration every single resident in the city on either side of this measure not to support the wants of the majority who have voiced their opinions up to this point.

With that being said, personally, I do not support the current broadband proposal based on careful consideration of facts both pro and con to this venture to be in the best interest of all residents of the city, ALL residents of the city.

Nor do I feel this city should put in even more so.

Nor do I feel that this city should put itself in a position by gambling with the tax dollars of each resident on a new business venture, which we have absolutely no experience in, and at best, honestly has based on whose information you read, has less than a 50% chance of success.

And for the record, over 50% of all new businesses fail. But I guess we can say that the broadband business venture will never fail because the city has an endless pool of your tax dollars to keep throwing and to keep it afloat. No matter what, right?

So what I like the big bank credit card company bailout a few years ago, too big to fail.

Personally, I also feel that if the increase in taxes needed to support this venture due to many short call overruns, misspeaks lack of honest and truthful disclosure and miscalculations on anyone’s part whatsoever, that the residents should hold all of those who provided them with that information about the success of the venture responsible, however, by  whatever by whatever means necessary.

Don’t be sold a rosy picture of a new business venture, that you want to be a free lunch for everyone without verifying and knowing all the facts. So hold everyone accountable for that free lunch.

If you’re one of the very few who do not care about paying extra taxes and having someone in the city do so Also, please share that also in your discussions on the subject.

I don’t read next door every day, but I get enough emails or snap shots of eat of next door messages come to me through emails and different things. So I see a lot of what’s going on. Right? 

Full disclosure and transparency. Let everybody know how you feel right?

With that being said, and I want to say this. 

This is the last thing I have to say. I’ve heard a lot of people over the last few days tell me you know, one side of the other, the pro, the con, “we shouldn’t do this whatever, whatever”, [I’ve] had a lot of people calling “Oh, no, no, we don’t need no, no, no, no, no”.

Listen, folks. I guess we’re somewhere around 9, 10 [or] 12 people, right, that we heard tonight. Tonight. That spoke tonight. That were in support of this thing, right? That were in support. I didn’t hear a single person that was not in support.

If you do not support something, you have to come out and express your lack of support for that particular subject, item topic, whatever venture, whatever it is. If you do not do that, if you do not do that the city, the state, the federal government, whatever elected officials out there can only respond to the needs and requests of those that do.

That’s why we have 5-10 million people in a city and [only] 2000 or 3000 people come out to vote or less. And decisions are made by those 2000 or 3000 people and the other four point whatever million are torked. Don’t be torked. Don’t be torked. If you do not want something come out and express your opinion, express your thoughts and why you don’t want it.

With that being said, I’d like to wish this business venture, if decided to be in the best interest of everyone in the city by the majority of voters much success and a Godspeed and with that based on the majority of email responses that I’ve received to this point in support of placing this item on the ballot, I will abide by the wishes of that current majority and vote in favor of placing this item on the November ballot so that the entire city decide. Thank you very much, Mr. Mayor.

Link (https://youtu.be/0oDMowf_jrM?t=6849)