IS THIS GOING TO RAISE OUR TAXES?

This referendum is NOT a request to raise your property taxes. It is to determine if the citizens of these communities want to install an affordable very high capacity connection to each residence and business in our cities.

The cities do not intend a municipal broadband system to impact taxes. Similar to electric and water utilities, this broadband utility would be self-supporting. If Geneva, St. Charles and Batavia all decide to move forward with the project, link the three infrastructures and share some of the costs, the project will cost approximately a total of $62 million for all three communities. The cost will be shared proportionately according to the size of the community. An independent feasibility study, which was also independently audited, concluded that the General Obligation Bonds issued to fund this project would be retired by user fees, without having to raise taxes.

What this means is that only the people who use these services will pay for these services.

If the program fails and people do not subscribe to these services in enough volume to pay back the bonds, some of the cost may be added to our taxes. However, the independent feasibility study projects that the program will NOT fail, and of the over 500 other communities in the country that have created a similar program, NONE HAVE FAILED. One of the key factors in the success of the other communities is that the cities already have their own municipal electric utility, as we do.

The cities have indicated that if, despite all of their research and the findings of two consulting companies, the revenues from Tri-City Broadband would not be enough to pay off the bonds, raising property taxes would be their LAST remedy.

As in all business ventures, there is an element of risk, and it would be irresponsible not to remind voters of this. But it's like going to the hospital for a minor procedure... before they put you under, they have to tell you that there's a chance you won't wake up.

How many people have to use the new service in order for it to pay for itself?

A Citizen Survey conducted in June 2001 asked:
"If it was available, would you be interested in a broadband/combined service?"

In Batavia, 71% answered YES
In Geneva, 73.4% answered YES
In St. Charles, 74.2% answered YES

Here's the estimated market share that the Feasibility Study said we should be able to obtain (not by Day 1):

As you can see, the study was based on a very low percentage of users who would subscribe to these services. Citizen surveys indicate a MUCH higher level of interest and willingness to use the new services.

Here's the market share we need to break even (again, not by Day 1)