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First Charles City fiber project bid is below cost estimate

By Bob Steenson,

The lowest bid for a major part of the proposed broadband fiber utility project in Charles City came in below the engineer’s estimate for the cost, boosting the confidence of supporters that the project is financially feasible.

The bids will be discussed Tuesday, June 9, at an important meeting that will also include two public hearings – one on the proposed plans, cost and construction of the fiber optics system, and one on the proposal to issue up to $22 million in revenue bonds to pay for the project.

City Administrator Steve Diers opened the bid documents and announced the numbers Tuesday afternoon during a teleconference meeting with almost 30 people listening in, including city staff, Charles City Telecommunications Utility Board of Trustees members and consultants, and representatives of the bidders.

The bids were for construction of the main portion of the fiber optic system, with more than 66 miles of fiber optic cable over 19 distribution areas within the city limits, 19 service area cabinets and connections to a central data center.

The engineer’s estimate that was built into the business plan was about $7.1 million, Diers said.

The first bid Diers opened was for $7.9 million, and each subsequent bid coincidentally got higher, next to $8.1 million, then $10.7 million and then to $13.9 million.

The fifth bid, from ADB Utility Contractors, was for $6.36 million, more than $740,000 below the estimated price.

The sixth and final bid was for $10 million.

The apparent low bidder, ADB Utility Contractors, is a division of ADB Companies Inc., a national utility, communication and technology engineering and construction company with headquarters in Missouri.

“We’re very encouraged with that apparent low bid,” Diers told the Press Thursday, adding that the fact the project got six bids was also encouraging.

“It says a lot because this is by and large the biggest piece. This is the outside plant. This is all the fiber that goes throughout town,” he said.

The plan documents that were bid on call for all work on that portion of the project to be completed by May 31, 2021, with intermediate partial completions by year-end 2020.

The utility board’s technical consultant, NewCom Technologies, will look at the bids and make sure they comply with the specifications, Diers said.

“They are familiar with that company, ADB Utility Contractors,” Diers said. “They are a large outfit and apparently they are doing a lot of work in the Des Moines area.”

Most of the utility board meeting this week was spent in session closed to the public, first to discuss initial user rates for the three services the fiber project plans to offer – broadband internet, television and telephone – and then to discuss applicants for the position of general manager for the broadband utility.

The board took no action on either topic once it had come back into public session.

Diers said Thursday there were three applicants for the general manager position, and the board decided to do interviews with two of them. Those interviews will take place Monday, and will also be closed to the public, he said.

“From what the consultants said from the technical interviews that they conducted it sounds like we’ve got two quality candidates to choose from,” he said. “I think they have preference over one, with experience and what-not, but we certainly have two that are worth interviewing and could possibly fill that role.”

The next utility board meeting, starting at 4 p.m. June 9, includes two public hearings where people will have an opportunity to offer comments or ask questions about the project and its proposed financing.

The meeting will be held in the City Council chambers at City Hall, but will also be a Zoom meeting. The Zoom meeting ID is 277 428 640 and the password is 073973. The meeting is also available to participate in by telephone by dialing 312-626-6799.

In addition to attending the meeting in person or electronically, written comments can made prior to the meeting.

The public hearing on the funding is regarding the telecommunications board entering a loan agreement “to borrow money thereunder in a principal amount not to exceed $22,000,000 for the purpose of paying the cost, to that extent establishing, starting up, improving and equipping the utility.”

The public hearing notice says the loan “will not constitute a general obligation of the city, nor will it be payable in any manner by taxation, but … will be payable solely and only from the net revenues of the utility.”

The other public hearing next Tuesday will be to “consider the proposed plans, specifications, form of contract and estimate of cost for said project.”

The utilities board will listen to and consider any comments or objections to the plan or the cost that are made “by any interested party.”