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Charles City broadband project construction bids likely this summer

By Bob Steenson,

Trustees of the Charles City Telecommunications Utility got their first look at a proposed business plan, user rates and finances for a community broadband internet system at a board meeting Tuesday.

The information was revealed by the utility’s consultants during a portion of the meeting closed to the public and the press, closed under sections of the Iowa Open Meetings Law “to review proprietary information” and to “discuss records which are authorized by state law to be kept confidential.”

Charles City Administrator Steve Diers, who has been involved in the effort to establish a fiber-to-the-home system for years, said after the meeting, “As far as I’m concerned it’s in line with what we were thinking. Overall it was a good report, a good plan.”

Diers said the information provided “a way forward.”

“I personally didn’t see any reason to not continue the process,” he said.

As part of the meeting, the trustees talked about some of the bills that have been paid so far and some of the bills still to come.

Eric Lampland, president of Lookout Point Communications, which is doing much of the network design work, said creating the document to solicit bids from companies to build the system will cost $34,345, and will produce a packet of paper “about a foot, foot-and-a-half” thick.

“It’s really quite detailed and quite extensive and takes about 30 days, roughly” to produce, he said.

Because of the detail required, it will take about 45 days after the bid documents are available for interested companies to put together their bids, Lampland said.

Other costs still coming are $183,340 for the engineering and design for the Charles City to Mason City linkage of the fiber optic system and $57,437 for the linkage from Charles City to the Chickasaw County line, where it would continue to New Hampton. New Hampton will pay for the Chickasaw County part of the project.

Because the board of trustees hasn’t officially taken over those cost obligations from the city, it will do that at its next meeting, scheduled for 4 p.m. Tuesday, April 7.

If bid document preparation begins then, they could be ready in early May, and the bid deadline could be set near the end of June.

The broadband system to make internet, television and telephone services optionally available to every address within the Charles City city limits is expected to pay for itself through user fees.

Revenue bonds would be issued to finance most of the construction and startup costs for the roughly $15 million project, then paid back through revenue received.

The utility board of trustees is operating in the interim for planning, design, engineering and other startup costs with a $1 million loan from the city of Charles City.

The five members of the utility board of trustees took a number of steps at the meeting Tuesday to move the project along.

They approved a resolution accepting a deed for property at 813 N. Main Street, the former City Tap location, to be used as the headquarters for the broadband utility to house network components and operational staff.

Charles City city attorney Brad Sloter said at the Tuesday meeting that the closing on the sale would be Wednesday, April 1.

The $190,000 purchase price of the property will initially be paid through the start-up cost loan from the city.

The board also approved a resolution adopting the board policy, including rules on what the board will do and how it will operate.

The policy says the purpose of the utility board of trustees includes:

• Overseeing management and control of the Charles City Telecommunications Utility with a commitment to financial stability.
• Providing quality broadband access at a fair, reasonable cost for residents of Charles City.
• Promoting an image to the public which demonstrates ability and eagerness to provide service.
• Generating sufficient revenue to repay long-term debt and to meet operating and capital expenditures.

The board also approved a resolution setting costs to reimburse the city for services provided by city employees, particularly for time spent on the project by Diers and by City Clerk Trudy O’Donnell, who has been providing secretarial services for the board.

The agreement originally called for a set price of $75 an hour, which Diers said was a combination of the hourly cost of his salary and O’Donnell’s salary, weighted more toward his because he has put in more time on the project.

He said the cost is retroactive to the creation of the board of trustees in December 2019.

Trustee Chairwoman Cheryl Erb asked why they wouldn’t want separate prices for each city employee who will be providing services to the board.

“I guess I look at it and think, wow, $75 for a secretary? I think that could really cause some issues of concern out in the public,” Erb said. “I think we need to show an allocation for the different jobs.”

The board passed the resolution subject to breaking out individual fees, to likely be approved at the next meeting.

Mayor Dean Andrews, who was also participating in the teleconference meeting, said, “Once you get a general manager, you’ll still be using the services of a secretary, but you won’t be using the services of Steve anymore, so your rate will probably change at that time.”

On the topic of a general manager, the meeting was running long because it took about 15 minutes to set up the Zoom teleconference and make sure everyone could participate, so a discussion on selecting a general manager was not acted on and will be taken up at the next meeting.

Diers said that he had heard from one man who had recently moved to the area and who said he was interested in the position, “so I will return his phone call and see what his questions are, but just to let you know that the word is out and there is some potential interest out there.”