Answers for Questions in Sibley's Fiber-to-the-Farm Potential Network

Wednesday February 16, 2011

As decision time approaches, the discussions in Sibley County (and Fairfax in Renville) are winding down. The county and local governments have to decide whether to commit to the Joint Powers Board. Mark Erickson, the coordinator of the project currently, recently responded to a good set of questions about the project and gave me permission to reprint them here. Questions from a Sibley County Commissioner:

Regarding parity of costs to build the fiber network into the townships (rural area) compared to cities. It’s nearly twice as expensive to build out the rural areas and some cities feel they are subsidizing cost of putting fiber in country.
How was the initial money spent for the feasibility study? No one has seen the breakdown as to what that money went for. We would like to see an itemized list of how the county's contribution and the Blandin dollars were spent. How much of that money is left?
There are concerns about how the budget of $150,000 was arrived at for the next phase. Who established the budget and how was it decided how much money to spend for the different categories? We haven't seen any details of this either, only general categories.
Who is making the decisions on how money is spent and for what?
Some people feel decisions are being made without elected officials - boards or council members - being part of the decision making process.

Response from Mark Erickson: Parity of costs between City/County Last summer when the county requested the rural area be included in the feasibility study, the issue of parity came up because of the higher cost of construction in the rural area. The topic was discussed at all of the public meetings and the following are the reasons for blending the construction costs:

This is a one time 100-year investment in the entire county (and Fairfax and Renville County) and since the city folks rely on the rural folks and visa versa it is viewed as an opportunity for everyone to invest in one another. The fiber network will benefit city and rural businesses, schools, city and county government, townships, ag producers, senior citizens, etc. If everyone benefits equally then everyone should be treated equally.
When the electrical distribution system was constructed, those on the edge of the network (farthest out) didn’t have to pay more to have lines brought to their homes/farms. Everyone was treated equally. And the customer who live at the edge of the network doesn’t pay a higher per kilowatt rate. Everyone is treated equally. With a comprehensive one-time investment in infrastructure like this we should treat everyone equally.
It’s a little disingenuous for the city folks to bring up parity because if it wasn’t for the farms there wouldn’t be any cities. And while the grain elevators located in our communities are an important source of property tax revenue for both the county and cities, no one in the city has a crop and actually uses the elevator. The farmers are the reason the elevator exists yet the cities benefit. On a personal note I hope we can get beyond the perception that one group benefits more than another. The important point is everyone benefits together.

How was the initial money spent for the feasibility study?

Blandin provided a $40,000 matching grant. (Check received)
Sibley County provided a $40,000 match. (Check not received)
The Fairfax EDA put in $3,094. (Check received)
Renville County put in $1,190 (Check received)
In December the Blandin Foundation awarded another $1,000 to help with expenses as part of a federal technology grant they received.
The City of Winthrop, via the Blandin Grant, is the grant administrator. Winthrop has been tracking expenses and paying the bills.

Total Received	$45, 284
Paid to Date:
CCG Consulting	$64,000.00 ($2,000 remaining on contract)
Printing and advertising:	$4.558.96
Web page creation/updates/:	$1,000.00
Legal:	$3,113.24
Mileage, meals, incidentals:	$1,298.57
TOTAL SPENT:	$73,970.00
WINTHROP HAS PAID	$28,686.00
DUE FROM SIBLEY CO:	$40,000.00
AMOUNT REMAINING TO BE SPENT:	$11,314.00

We should have a little less than $10,000 remaining when all is said and done. What remains will be transferred to the Joint Powers Board. If the JPB is not created, remaining funds will be returned to Sibley County, Renville County and the City of Fairfax. The Blandin Foundation has indicated they do not want any unspent money returned to them. Disposition of those funds should be decided by the Winthrop City Council as grant administrator. Our annual city audit begins in a few weeks and all of the funds received and disbursed to date for this project will be audited and accounted for. This is the first time we have been asked to produce information on the grant. We knew someone would ask and we’re happy to provide an accounting. The City of Winthrop was required to sign a contract with the Blandin Foundation to receive the grant money and we take our fiduciary responsibilities seriously. Budget for next Phase? The budget for the Joint Powers Board came from our consultant Doug Dawson. He came up with the categories and the amounts. Remember, the budget is only an estimate at this point. We don’t know for sure what each category will cost. Engineering fees could be less and the legal fees could be more. Doug feels that $150,000 is more than enough to get us through to bonding. When the Joint Powers Board is formed the process will have formal structure, complete with chairman, vice chair, secretary and treasurer. All monies spent will need to be approved by the board and a monthly financial accounting will be provided. The JPB books will audited annually. Who is making the decisions to date? The city administrators involved in the project (plus Denny Schultz from Arlington as Matt Jaunich chose not to be involved) have met as a group several times and held several conference calls to discuss the project in general and in detail. Decisions to spend the larger amounts of grant dollars (consultant, printing, mailing) were discussed and agreed upon by the group. The process was informal. It is important to note that Winthrop applied for the grant and was named the grant administrator so Winthrop actually has the authority to spend grant dollars. We discussed our plans openly with the various councils and with anyone who would listen I have been the unofficial project director to date. Because of my background in the telecommunications industry prior to coming to Winthrop, I have the necessary contacts and knowledge to move the project forward. I have worked hard to include as many people as I can in the decision making process. I have been completely open with our plans and have welcomed new ideas. BTW, the idea of bringing the rural parts of the counties into study (your idea) is the best idea to date. Going county-wide makes this a very compelling and comprehensive project. Involvement of Elected Officials: From my perspective, elected officials have been involved as much as they have wanted to be involved. I have met more than once with the councils from Fairfax, Gibbon, Winthrop, Gaylord, New Auburn, Green Isle and Henderson. This project has been a standing agenda item at SEDCO meetings since last summer. The councils have asked a lot of questions and were given full answers. The City of Arlington is probably not as informed as the rest of the towns because (again from my perspective) they have chosen not to be as involved as the rest of the towns. There’s nothing wrong with that. My assumption was they were up to date on what was happening and in basic agreement with the process. Apparently they have concerns and that’s fine. I’m happy to address their concerns because it’s an important and necessary part of the process. This is not an easy project for people to get their arms around because of the technology involved. The feeling of council members I have talked to from Fairfax, Gibbon, Winthrop, Green Isle and New Auburn is that the questions and concerns recently brought up by the City of Arlington (Letter dated January 24th) should be taken up by the Joint Powers Board. I guess I agree with that. What I hope does not happen as we move forward is our attention is diverted from looking for ways to make the project work and we get mired down on side issues about past process and who’s making the decisions. As far as Sibley County’s participation is concerned I hope that will be answered at the commission meeting Feb. 22nd. There is a lot of support for this project in the rural parts of the county. The two most common points I hear from rural folks with regard to whether Sibley County should participate are: 1) Why would they take the first step (feasibility study) and be unwilling to take the second step (Joint Powers Board) if the study shows the project was feasible; and 2) The people of Sibley County should be given the chance to decide if they will support the project. If I was asked today to vote to build a fiber to the home/farm/business network as proposed, I would vote no because I don’t have enough information. But if I was asked to vote today to take the next step to get the information would answer vote yes. If we don’t take the next step, all of the money, time and effort spent to date will have been wasted.