The Basics
Over the last 2 years, the Public Utilities Board and Alameda Power & Telecom staff have solicited extensive public input and discourse, evaluated and implemented operational efficiencies, and taken advantage of cost-cutting opportunities, all with the goal of increasing profitability of the telecommunications system.

A Financial Team Has Been Working on the Issues
A “balloon payment” of $33 million related to the telecommunications debt is coming due in June 2009. Last September, the Board authorized the hiring of a financial team, including a financial advisor, to examine issues related to the existing telecommunications debt and approaches to the future of the business line.

At its meeting on February 25th, the Board took the next step in addressing the future of Alameda’s telecommunications business line when it received a presentation from the financial advisor.

Three Possible Approaches Presented
Despite the efforts made over the past 2 years, it is anticipated at this time that the telecommunications business line will be significantly challenged to support itself on an ongoing basis.

While no action was requested of the Board, the presentation generally covered the implications of three approaches under investigation, including:

1. Keeping the telecommunications system as it is today
2. Expanding it, or
3. Exiting from the business

The Presentation to the Board

A Step in a Continuing Deliberate Public Process
It must be stressed that no decisions have been made and no action has been requested. Monday’s presentation is but one continuing step in an 2-year extensive, deliberate public process. As the evaluation of alternatives moves forward, Alameda Power & Telecom will keep the Public Utilities Board, City Council, and the community fully informed.

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