Eric ean, chair “Traneportation Authority of Marin Barbara Pate, Vee Chait ‘Golden Gate ridge, Highway/Transportation District, sudy Arnold Marin County Board of Supervisors, amon Connely Marin County Board of Superwsors Debora Fudge Sonoma County Mayors! and Councimembers Association Patty Garbarino Golden Gate Bridge, Highway Transportation District, ban Hller Marin County Counel of Mayors and Councimembers Joe Navjokas ‘Sonama County Mayors’ and CCouncimembersAesoriation Gary hits Transportation Author af Marin David Rabbitt Sonoma County Board of Supervisors Chris Rogers, Sonoma County Mayors and CourcimembersAeeoition shite Zane ‘Sonoma County Boar of Supervisors Farhad Mansourian Sener Manager ‘5801 Old Redwood Highway Suite 200 Petaluma, cA 94954 Fox 707-798-3037 ‘or onomamarintrinore =SMART= February 28, 2020 cost P.O. Box 253 Kentfield, CA 94914 ‘This is in response your letter to the Chair of SMART addressed to his personal ‘email address and private residence. If you have correspondence in the future related to SMART business, including letters to the Board, the appropriate address to use is the one indicated on this letterhead. We disagree completely with your politically-based allegations and. characterizations regarding the financial ramifications of the Sonic agreement. Your entire letter claims, erroneously, that SMART has received no benefit, from this agreement and, in addition, we have somehow lost potential revenue as a result of our work. These claims are baseless and incorrect. The truth is that the partnership has significant financial benefits for SMART and we have not given up any ability to generate revenue for the District. First, we have realized and continue to achieve significant construction savings. Those savings that are being used to deliver as much service as possible despite the impacts of the Great Recession. By the time we have completed the Windsor extension, which extends the rail service to 48 miles of Marin and Sonoma Counties, we will have realized over $475,000 in construction cost savings related to the deployment of fiber necessary for operations. Second, SMART has not reduced its future ability to sell fiber; the truth is that, the opposite is true, SMART’s original construction bids included the buildout of four conduits, two for current operations and two for future use. By partnering with Sonic, at Sonic’s expense, we were able to free up three fiber conduits, a 50% increase, for future operations use or for selling through a license process. Furthermore, just because there is a value to leasing a mile of fiber somewhere else, this does not mean there is areal ability to lease the entire corridor here in Sonoma and Marin, There is no indication or evidence that there isa local market to lease expensive fiber optic easements along the entire SMART ROW. In fact, the contrary is rue: there are existing reserve fiber easements on SMART'S right of way that aren't being used - easements that telecom companies can access without using SMART’s conduits.If you have actual companies willing to pay SMART “hundreds of millions of dollars,” to lease the entire 45 (not 70) miles we have constructed, we are interested in meeting with those firms. Prior to the agreement with Sonic, we reached out informally to others in the industry and found no serious interest in a SMART lease for the length of the corridor. Fourth and most significantly, there are real, as opposed to theoretical, ongoing operational costs that SMART has been avoiding as result of our local partnership with Sonic. These include costs for emergency service restoration, emergency repairs 24 hours a day, addition of dark fiber spurs, WiFi at all stations, WiFi at SMART buildings, as well as internet, phone and voicemail, at all SMART. facilities. These services are not static and include future upgrades to service and equipment. In total, those operational savings for SMART are estimated to be over $435,000 a year. Future cost savings will be incurred each and every year so that, for example, a 10-year cost savings to SMART and taxpayers will be nearly $5 million while still preserving the ability to lease future fiber options. We at SMART are very proud that we have succeeded in the voter mandate to build alternatives to driving that have carried over 1.7 million passengers and led to a better quality of life for everyone connected to it in the North Bay. Despite our challenges we have only three more stations to build and are reaching over 80% of the people we were tasked with reaching, This success has come despite the lack of revenues that resulted from the Great Recession, despite the three years of fires ‘and floods our community has faced, and despite the continued efforts of COST to stop the progress of this community asset. Sincerely, EVE? Erin McGrath Chief Financial Officer