STATE OF NORTH CAROLINA STOKES COUNTY DANBURY, NORTH CAROLINA SPECIAL SESSION APRIL 10, 2015 The Stokes County Board of Education met in a special session on Friday, April 10, 2015, at 4:30 p.m., at the Administrative Office in Danbury, North Carolina. Board Members Present: Mrs. Sonya Cox, Chairperson; Mrs. Pat Messick, Vice-Chairperson; Ms. Becky Boles, member; and Mr. Jamie Yontz, member. Mr. Bill Hart, member, was absent. Administration Present: Mr. Tony George, Assistant Superintendent; Mrs. Ann Robertson, Administrative Assistant; Ms. Lanette Moore, Executive Director of Finance; and Mrs. Sarah Wood, Director of Media and Technology. Mr. Ronnie Mendenhall, Superintendent, was absent. Others Present: Mr. Fred Johnson, School Board Attorney; and Mr. Rick Morris, County Manager. The following team from Wilkes Communications/RiverStreet Networks were present: Eric Cramer, Brett Yates, Jody Call, and Jody Souther. Chairman Cox welcomed everyone, led the pledge and called the meeting to order. Public Comments: There were no public comments. Approval of the Agenda: Mrs. Messick made a motion to approve the agenda as presented. Ms. Boles seconded the motion and it was approved 4-0, Hart absent. Presentation: Assistant Superintendent Tony George welcomed Wilkes Communication/RiverStreet Networks and turned the meeting over to County Manager Rick Morris. Mr. Morris expressed his appreciation for the opportunity to meet with the Board of Education. He reminded board members that he had talked to them at their last meeting concerning doing a one year versus a three year extension on the school system s broadband contract. The purpose is so Stokes County did not limit opportunities for another broadband provider to come into the county and potentially improve a lot of things in that area. At that meeting board members requested Wilkes Communication come and brief them and that s why they are here today. Mr. Morris reminded board members that at the last meeting Jamie Yontz had a question about the $60,000.00 price differential with the one-year versus the three-year contract with Time Warner. The commissioners consensus was that Mr. Morris do a special appropriation for that money that will set it aside from normal budget discussions and whatever we agree to on current and capital expense will have this added back to it. The county will cover that difference in price from the one year versus the three year. The Stokes County Commissioners have received a similar briefing to what the Stokes County Board of Education will get during today s meeting. They are totally on board with this effort to give an opportunity to improve broadband connectivity in the county.
Page 2 April 10, 2015 Mr. Morris introduced Eric Cramer, CEO of Wilkes Communications/RiverStreet Networks, to board members. Eric Cramer, Chief Executive Officer: Mr. Cramer thanked board members for the opportunity to present a solution he felt would be beneficial for everyone. He stated he had been with Wilkes Communications for ten years and had been in the industry for eighteen years. Mr. Cramer explained that Wilkes Communications is their brand in Wilkes and RiverStreet Networks is their brand for everything they have expanded outside of Wilkes County. They were incorporated in 1951 as Wilkes Telephone Membership Corporation. They are a co-op and so are owned by their members. Wilkes Communications was started by a group of Wilkes County citizens in 1949 looking to have telephone service in rural areas in Wilkes County. There are large companies like Windstream, Time Warner and CenturyLink that only go where the people are. That s why the co-op was created. Wilkes Communications severs over 10,000 households and businesses. Mr. Cramer reported the management team consists of Amanda Perry, Customer Service and PR Manager; Brett Yates, Sales and Marketing Manager; Jody Call, Network Operations Manager; Josh Sheets, Network Services Manager; Kimberley Johnson, Accounting Manager; George Roark, Network Engineering Manager; Greg Anderson, Construction Supervisor; and Jody Souther, Network Engineering Supervisor. He added this team has extensive experience and all have managed a build just like this. Mr. Cramer stated he was contacted by Senator Shirley Randleman about a problem in Stokes County. The problem was there is a whole bunch of underserved people that don t have access to broadband. Mrs. Randleman got him in touch with Commissioner Booth and County Manager Rick Morris. Brett Yates, Sales and Marketing Manager: Mr. Yates stated the sales and marketing department typically deal with enterprise customers and business class customers. He stated they were on the front lines and dealt face-to-face with counterparts to help them through their day-to-day routine that involves communications. Both Jody s department and sales and marketing work really well together to try and provide the best service Wilkes Communications can to our existing local school system. Mr. Yates discussed communications services that Wilkes Communications provides. He felt they have one of the best networks in the country and that one of their most solid products is their commercial and residential broadband. They also provide commercial voice services and commercial security. Mr. Yates said these services are delivered on a state-of-the-art fiber optic network. One of the huge benefits about Wilkes Communications service is that it is provided via a dedicated fiber from the serving office directly to each customer s house. That means a customer will not experience a slowdown in service when everyone gets on the internet, because you have your own connection. It correlates to a higher quality, dependable and higher speed experience compared to DSL or cable.
Page 3 April 10, 2015 Jody Call, Network Operations Manager: Mr. Call stated Wilkes Communications has commercial broadband and enterprise class services which is a step up from residential. They provide services to K-12 education, a community college, daycares, healthcare and any size business and government agencies all the way to the federal level. Wilkes Communications also provides services to about fifty different cell tower locations in Wilkes County. They have simple internet connectivity and can go as far as connecting two campuses together as if they were in the same building. Mr. Call said we are committed to extending our services and availability for education. For example work for the Wilkes County School System was completed more than sixty days ahead of schedule. It was a seamless cutover for the school system and that was due to Wilkes Communications dedicated technical staff and the availability of our technicians that live in the same community. Wilkes County s demographic, as far as the schools, are very similar to Stokes County. There are thirteen elementary schools, four middle schools, five high schools, bus garage, maintenance and the Board of Education. Mr. Call added the Stokes County Board of Education already knows you re getting a fast and reliable service. What we can bring is the ability to get direct and immediate fifteen minute response times. We have not had any outages due to our equipment issues the whole time the school system has been on our network. Anything that has happened has been the result of something downstream in their own network, but whenever that happens we re the first ones they call. It is our responsibility to prove that it is not us and we always jump in and help them. We try to give them three days notice of maintenance that is done from midnight until five in the morning. We will bring that same experience here. Jody Souther, Network Engineering Supervisor: Mr. Souther shared that he had been with Wilkes for twenty years. When he started at Wilkes they had a very good and reliable copper network. In 2006 Wilkes Communications decided that was not the way the future was going and decided to start doing fiber to the home. Basically eight years later we have over built the entire Wilkes County. In the rural part of Wilkes County we have built 1500 miles of fiber to the home. Mr. Souther stated what we are proposing to do in Stokes is something we ve already done in Wilkes County. In comparison Wilkes County Schools and Stokes County Schools is very much the same. The Wilkes project was 186 miles of fiber construction that was completed in less than ten months. The Stokes project would be 103 miles of fiber construction with an estimated completion date of ten months. During the build out in Wilkes we did over four hundred miles in one year. We are very experienced. We ve been there and we know what it takes. Mr. Souther said the action plan for Stokes County mirrors what was done in Wilkes. Three remote locations would be built. The first would be in Danbury, then King and then Walnut Cove. Wilkes would connect those buildings with fiber backbone and then build out to every school location from that.
Page 4 April 10, 2015 Construction Overview and What to Expect Mr. Souther explained there will be three phases to the proposed build out. Phase 1 consists of building the backbone and that will connect all of the equipment and create a launch point from which Wilkes will build future infrastructure. The future infrastructure is residential, businesses and the underserved areas in the county. During the Phase 1 construction Wilkes will build to all of the schools. The proposed build out will begin in Danbury. A location for a multi-purpose building will be nailed down and that will be a retail store, a central office for equipment and a place for Wilkes technicians to work out of. After the land is acquired we will start a field design and people will see us out on the road with hard hats driving stakes. As soon as that is done, we ll be able to order materials. Mr. Souther anticipated the engineering and design will start mid-may until the first of June, 2015. He proposed backbone construction will begin July 1, 2015 and it will be completed by May 31, 2016. The objective is to have it done before then so there s plenty of time to get the equipment in and tested. All schools will be built to during construction and this includes all service drops. We ll have to work with somebody like the Maintenance Supervisor to allow us access to all the schools. In Wilkes County we never disrupted school time and they never really knew we were there. Our objective is to have all schools ready for service by May 31, 2016. Eric Cramer, Chief Executive Officer: Mr. Cramer touched on the billing relationship. He stated Wilkes Communications has extensive experience with billing WAN and LAN services either for a school system or other entities. He added that they have experience dealing with USAC and understand the application of reimbursements as well as the application of taxes. Jody Call, Network Operations Manager Mr. Call stated the equipment they choose to use is also used by Google on their campuses. That was a big selling point, when the equipment was chosen. How Wilkes Communications differentiates themselves is immediate access to a local technical, sales or support staff; twenty-four/seven on call; and abundant capacity for growth on the backbone. In addition Wilkes can provide customized reports. Mr. Call stated if Wilkes Communications/RiverStreet Networks has this opportunity they would like to turn the keys over on May 31. Mr. Call stated that did not mean they would have to wait for everything. Wilkes plan is to build the fiber first in Danbury and get the main office hooked up. When the first school s construction is built, Wilkes can install their equipment and do a burning test to qualify it. Wilkes can stair step these. It doesn t all have to happen at the same time. Mr. Call stated this project is a three phase approach. The first phase includes all the school system properties.
Page 5 April 10, 2015 Eric Cramer, Chief Executive Officer: Mr. Cramer closed by saying Wilkes Communications/RiverStreet Networks reason for being here was to serve the rural portions of Stokes County. The school system is a big part in enabling Wilkes to do that. Just like the hospital, the county government, the businesses and all the other entities will pay for Wilkes building out. This is a long term project for us, a long term commitment and a huge financial commitment. We are committed to making this work. We bring experience to serving rural America. We are a local presence and we have local people. We plan to have a local presence here in Stokes County. We will be part of the community. Questions: 1. Mr. Yontz asked if there were fees from the service drops to the locations to our schools. Multiple responses from Wilkes Communication s was no. 2. Mr. Yontz asked once the main loop was in how they were going to dictate whether they go into a community. Will it be percentage based on how many potential residences want your service in that community? Mr. Cramer answered they were committing to go to customers that only have dial up. Where people don t have access, we re going to go there. In other areas where the speeds are slow or there is one provider we are going to pass into them. The take rate Wilkes looks for is 30% along a specified route. 3. Ms. Boles asked how they were going to advertise and get the word out. Mr. Cramer responded they were working with the county to let people know who they are. They also have marketing campaigns on the radio in addition to print and mail. Wilkes best advertisement is word of mouth. 4. Mrs. Messick asked how many service people would be left in Stokes County to service the schools. Mr. Cramer replied that their initial plans were to have at least three technicians in the county to start. It will be based on how many subscribers Wilkes has, but there will be enough to support the school system and the anchor institutions like the hospital and county government. There will also be support staff in Wilkes and Brett s team (sales and marketing) travel all over. The people working here will be living here. 5. Mrs. Messick asked if the people servicing the schools would also be servicing the hospital. Mr. Cramer responded yes. The same technicians service everybody. Right now there are eleven technicians in Wilkes that do both business and residential. In Stokes County we initially think there will be four technicians out in the field to start, and two to start in Jody s field. Mrs. Cox interjected that what Wilkes Communications does is the same thing that Time Warner does for us. We would still have South Data to come out and address problems. Mrs. Sarah Wood, Director of Media and Technology, stated a Time Warner technician had been called three times in the last two or three years. 6. Mrs. Cox stated today we are here to decide if we re going to do a one-year or a three-year contract with Time Warner to give Wilkes Communication an opportunity to bid next year. If we give Wilkes the opportunity to bid next year, are you going to go ahead and build all of this out? Mr. Cramer responded yes, that winning this bid would give them the opportunity to edge out
Page 6 April 10, 2015 into the communities a whole lot faster and a whole lot farther. Wilkes understands it is a competitive process and they have to win that bid. 7. Mr. Yontz questioned receiving a bid from Wilkes and accepting the bid and then Wilkes runs into a snag and we get to this point next year and it looks like the project is not going to be built out in time. Wilkes Communication stated that will not happen. During their largest phase of build out Wilkes had in excess of twenty-five crews. Wilkes has dealt with five primary contractors who have access to subcontractors. We see and gauge the project weekly on how many miles of cable they place. We can pull additional resources at any time. 8. Mr. Yontz repeated one thing he had learned in commercial construction was to never say it wouldn t happen. If we accept Wilkes bid and have to run back to Time Warner to provide service, he did not think they would be very generous to us. Wilkes Communication responded that it has to be bid out every one to three years and he did not think Time Warner would burn any bridges. Wilkes had no issue with a penalty clause in the contract. 9. Mrs. Cox asked if there were other counties Wilkes Communications is working in right now. She knew they had just purchased some other companies. Mr. Cramer stated there were some other rural counties that do not encompass the entire county like this one would do. Wilkes Communications is currently looking at six or seven other counties. They want to still be in Wilkes and focus on one (Stokes) and then move on to the next project, when the time comes. Wilkes goal is to keep growing and growing rural North Carolina. 10. Mrs. Messick asked if Wilkes Communication had a SPIN number so the school system could still get a discount. Their response was yes. 11. Ms. Boles asked if Sarah Wood had any questions. She replied no, they can offer us the same service that Time Warner is offering us now. Mrs. Wood did ask Wilkes Communications to talk about how they could serve all of the schools in our district. In every location. Mr. Cramer responded that Wilkes Communication is a co-op and will partner with Surry Telephone to serve part of Stokes County they currently serve. The two schools that Surry Telephone will serve are Francisco and Nancy Reynolds. Wilkes will be a provider and will lease facilities or use them to provide network access. We don t cross each other s boundaries so we will not be building into where Surry already serves. 12. Mrs. Messick asked if Francisco Elementary and Nancy Reynolds Elementary would receive the same broad band as everybody else. Mr. Cramer responded yes. 13. Mrs. Messick asked if Wilkes had a penalty if someone was not satisfied with service and withdraws from their service. Wilkes response was that typically they do free installation and it costs a substantial amount of money to get that started. If they just want to leave in six months and they signed an agreement, yes, we have a penalty. If they can prove that they have just cause, and they re having problems and it s something Wilkes has not resolved, we would definitely let them out. That s very very rare. 14. Ms. Boles stated being school board members they had a responsibility to the school system. Being an elected official we also have a responsibility to the public. She asked for a copy of
Page 7 April 10, 2015 Wilkes Communication pricing. Wilkes response was to go to www.wilkes.net and click on residential. All of the pricing is there. Ms. Boles responded by saying the reason they were here is because not everybody has access to the Internet. She asked for a hard copy. Mr. Cramer responded that in the first presentation board members had been provided there was information on all of their pricing. They would not be charging any more in Stokes than they do in their own county. They will be providing the same types of services. 15. Mr. Yontz stated he had been contacted by residents of the county and their belief is we re going to have Internet service. I think it s great to have competition in the market place. The key to this is Wilkes says if they get 30% on the people on a particular street you re going to run it. Stokes is very similar to Wilkes in that some people live three quarters of a mile down a road and they re the lone resident on that road. We as elected officials including our commissioners are advertising this as everyone is going to have service. What do you do in that instance? Wilkes response is that if there is one person on the street that wants it, we ll build to it. How we make our money back is by keeping that customer. Wilkes builds infrastructure down a main highway and then plow service drops off of that road. A normal drop is 400 feet, but we go out to 2,000. If someone is 3,000 feet off of the main road, we would plow 2,000 feet at no charge and charge a dollar a foot after that. Private roads would be considered on a case by case basis. 16. Ms. Lanette Moore, Executive Director of Finance, questioned the three buildings. She stated she did not know if they were looking at purchasing land or possibly paying rent. If it is a rent agreement, has Wilkes considered or is it something you would be asking this board if one or two of those sites could be on our site so that could be income for the school system. Wilkes Communication responded that what they have done in Wilkes is approach property owners and do a ninety-nine year lease for a 50x50 piece of property. It is $2,500.00 for a one-time thing. What the property owner realizes is that they are bettering the community. 17. Mrs. Messick stated Time Warner cable offers free complementary cable tv to the school system and county government buildings and law enforcement. Wilkes Communication stated they had not talked about that. It would require them to put a box in every single classroom and office where it was wanted and that would probably be cost prohibited for Wilkes. 18. Mrs. Cox asked if Wilkes Communications planned to do a tv studio in Stokes County. Their response was yes. They have all of the equipment so they can go out and set up in the field. If it was a large project someone would need to go down to our studio to be filmed there. Approval of Wide-Area Network Bid: Action Agenda Mrs. Cox stated the network bid was in the board s packet for their review. She reminded board members that Mr. Morris had talked to board members about the county s willingness to work with them to cover the difference. She asked for a motion to approve either a one-year or three-year contract with Time Warner for next year. Ms. Boles made a motion to approve a one-year contract with Time Warner. Mr. Yontz seconded the motion and it was approved 4-0, Hart absent.
Page 8 April 10, 2015 Information and Announcements Mr. George, Assistant Superintendent, presented board members with an updated list of events for the school system. Upcoming Board Meetings: The Board of Education scheduled the following meetings: Monday, April 20, 2015 6:00 PM Regular Session Nancy Reynolds Elementary Friday, April 24, 2015 8:30 AM Board Retreat YMCA Camp Hanes, King Thursday, June 11, 2015 10:00 AM Joint Session with Ronald Regan Building, BOCC Danbury At 6:00 p.m., Mrs. Messick made a motion to adjourn. Motion was seconded by Ms. Boles and approved 4-0, Hart absent. Secretary Chairman