HomeMy WebLinkAbout07 18 2019 CM Study SessionCITY OF CHUBBUCK
BROADBAND/FIBER Comm NTTY FORUM
MINUTES
JULY 18, 2019 — 6:OOPM
LOCATED AT
CHUBBUCK CITY HALL
5160 YELLOWSTONE AVE.
CALL TO ORDER: Mayor England
COUNCIL PRESENT: Roger Hernandez, and Annette Baumeister.
STAFF MEMBERS PRESENT: Mayor Kevin England, Public Works Director Rodney Burch,
Planning and Development Director Devin Hillam, Police Chief Bill Guiberson, City Clerk
Joey Bowers, and Chubbuck Development Authority (CDA) Chairman Daniel Heiner
The City of Chubbuck hosted a community forum for discussion among the vital players in
the broadband marketplace; providers, vendors, industry experts, consultants, and local
government officials. To share their perspective and help establish a framework for bringing
Broadband/Fiber services to all of East Idaho.
GENERAL BUSINESS:
1- Presentation by the City of Chubbuck
Mayor England stated that 80% of Idaho cities are under 5,000 population, and 60%
of those cities are under 1,000 population. Mayor England excused himself from the
meeting at 6:30.
Planning and Development Director Devin Hillam gave a background for this
meeting, and presented the results from a community survey about broadband/fiber.
2- Presentation by the City of Amnon
Technology Director Bruce Patterson represented the City of Ammon. Mr. Patterson
stated that broadband is essential for cities to function; as such the City of Ammon
decided to run fiber infrastructure as a municipal utility. The City of Ammon uses Local
Improvement Districts (LID) to pay for the infrastructure to be built in the requested
neighborhoods, which included the purchase of equipment and to hire personal. Through
the use of these LID's the City has seen $4 million invested into fiber infrastructure, with
no municipal debt, and only those residents that participate pay for the LID. Through this
investment property owners have seen an increase in property value and a decrease in
monthly expenses. Mr. Patterson stated that the City's fiber network is designed first to
take care of the City's needs, second to take care of education and the School District
needs, and third to meet the needs of individual property owners.
Councilmember Baumeister asked how the residents are charged for their potion of
the LID. Mr. Patterson stated that the State sets it as an annual bill that is sent directly to
the property owner and is separate from their regular property tax bill.
3- Presentation by EntryPoint
Robert Peterson represented EntryPoint Networks and gave a background on his
experience. Mr. Peterson stated that EntryPoint provided the portal that the City of
Ammon uses, and is currently using that model to sell across the country. Mr. Peterson
felt like cities should own and control broadband infrastructure and should look at it as a
utility that the city offers. Mr. Peterson also went over the cost savings that the residents
of Ammon will have compared to other cities with private fiber infrastructure; and the
affect that private infrastructure has on city right of ways and easements. Current service
providers charge to bring their services to property owners as a non-recurring cost and
then they charge a monthly recurring cost. Mr. Peterson stated that a LID is not a tax; it is
a one-time fee that the consumer pays for over 20 years.
4- Presentation by FyberCom
Jared Stowell represented FyberCom. FyberCom is a provider that got its start on
Ammon fiber. Mr. Stowell stated that the City of Ammon's portal allows for less
overhead on their company, which in turn allowed them to lower service costs to the
residents. FyberCom only has to worry about bandwidth costs. Mr. Stowell felt like the
Amnon model makes it possible for new companies to be able to compete and have a
competitive product.
Councilmember Baumeister asked what makes people choose one provider from
another, now that everyone is using the same infrastructure. Mr. Stowell stated that it
now puts pressure on companies to offer their best price and customer service.
5- Presentation by Direct Communications/TruFiber
Nathan Brian represented Direct Communications and Brad McSpadden represented
TruFiber. Direct Communications was the first company to provide fiber to homes in
southeast Idaho, and high-speed intemet to rural areas of Idaho. Direct Communications
built the fiber system that now connects all the City of Chubbuck properties. The
investment that the City of Chubbuck has made is already paying off for its residents and
businesses. Mr. Brian stated that Direct Communications had entered into a partnership
with TruFiber to provide fiber connectivity to more homes in Chubbuck at a lower
monthly cost. Their goal is to have fiber available to all Chubbuck residents in three
years. Mr. Brian stated that with private infrastructure the capital costs are on the private
company to hire employees, and to maintain/upgrade the network. There is no need for
the City to hire more employees, to build the fiber, install services, and run the network.
Mr. Brian also stated that eventually the LID's will end and the City will have to bare
those cost with taxpayers dollars.
Councilmember Hernandez asked who owns the network and who has access to this
network. Mr. Brian stated that private networks are owned by the company that installed
the network, and other companies would be responsible to install their own lines for
equal competition.
Councilmember Baumeister liked the simplicity of having one line versus multiple
lines clogging up the City's right of way, the constant disruption to the residents during
installation, and the impact on the City's infrastructure. But was also concerned if this
was the City's responsibility to provide as a utility.
6- Presentation by Century Link
Arleigh Smith represented Century link. Mr. Smith stated that Century link's current
business plan is to focus on new/bare ground development and not existing
neighborhoods to provide fiber services. Century link will only build where they can see
a return on investment over a certain time period. The Ammon model is not a network
that works for Century Link. Century Link has invested millions of dollars into the City
of Chubbuck and will continue to do so. Century Link is the back bone that connects the
local internet companies and their bandwidth to the rest of the world.
Councilmember Hernandez wondered if the City should just let the market take care
of its self, and only step in if a monopoly comes about.
Councilmember Baumeister opened the meeting for public comment.
Brett Hiltbrand asked how fast the City of Ammon could build their network, and if
there was a kickback to those residents that signed up at the beginning when others
choose to connect. Mr. Hiltbrand stated that one line controlled by the City makes true
competition. Mr. Patterson stated that due to the state statutes that govern an LID, there is
no kickback but those property owners that decide to sign up later pay the same LID
amount as everyone else in that LID. It's best to get as many property owners signed up
at the beginning to keep the LID amount as low as possible. The City of Ammon
currently can pass about 300-500 homes a year during a building cycle.
Ryan Misner felt like the cost of services the residents of Ammon pay and the LID
cost are still a savings for the property owners compared to what the residents of
Chubbuck pay. Mr. Misner also asked the Council if they had a time line for a decision.
Councilmember Baumeister stated that the Council is still in the planning stages of the
process.
Jamie Fames stated that accountability and quality of service is more important than
price. Mr. Fames was in favor of the Ammon model but would like cities to look at how
to keep these companies accountable and not just focus on price.
Jason Mendenhall stated that the upfront financial costs would not make sense. With
all the current fiber that has been built and is currently being built; the City would be way
behind to implement a network like Ammon. Mr. Mendenhall would not participate in an
LID in his neighborhood. Mr. Patterson stated that the City of Arm -non currently has a
60% take rate in areas that have other fiber providers.
Geri Hernandez asked about the disruption of private property during installation. Ms.
Hernandez also stated that when she was a kid she remembered a city that had placed an
LID on areas of that city to upgrade a sewer line. But when the city couldn't get enough
residents to sign up the city went through and enforced the LID on the residents. Ms.
Hernandez was concerned about this happening to maintain and develop fiber throughout
the City of Chubbuck. Mr. Brian stated that Direct Communications follows the utility
easements when installing fiber with as little disruption to the property owners as
possible.
Robert Peterson from EntryPoint recommend for the Council to look at the capital
costs, management/operational costs, the cost for service, and how many fiber providers
can the community support. Mr. Peterson stated that fiber is a 100 year infrastructure.
Bruce Patterson from the City of Ammon stated that if all a city wants to do is drop
the cost of internet for their residents, there is a lot of options. But if a city wants to
prepare for the future and create a smart city it needs to have complete control of the
infrastructure.
AD.rouRN: Councilmember Annette Baumeister adjourned at 8:36.
1 y ers-City Clerk
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Kevin England -Mayor