WILLMAR — The Willmar City Council marked an important milestone in the plan to build an open-access fiber broadband network in Willmar. The fiber use agreement between the city, which will own the network, and Hometown Fiber, which will manage it, was approved on a vote of 6-1 at the Aug. 5 council meeting.
"We're not asking the council to approve a project tonight, we're not asking you to call for bonding, we're not asking you to request bids," said City Operations Manager Kyle Box. "We are simply marking a major milestone, making the next step that we need to do to make this project feasible, and that is what this contract is." The only no vote was from Councilor Rick Fagerlie.
Councilor Tom Butterfield was absent. Both in the past have shared concerns about what overall is estimated to be a $25 million project. The approved agreement between the two parties lays out the use and management of the network, which will be built and owned by Willmar.
Hometown Fiber will manage the system, which includes signing on internet service providers that will operate on the network and provide customers high-speed fiber internet. "High-speed internet access can attract businesses, improve property values and stimulate local growth over time," Box said. "These benefits can generate substantial returns on the initial investment, potentially offsetting the upfront expenditure.
" Box led the City Council through an in-depth presentation of the agreement. The document of more than 30 pages covers the ownership and use of the network; operations and management including the responsibilities of each party; how contracted internet service providers will work on the system; and financial provisions. The agreement also includes a termination clause if the City Council ends up deciding the fiber network project is not feasible.
The agreement does not go into effect until the first portion of the network is constructed and operational. "This (termination clause) is the worst-case scenario. We would obviously like to see this project move forward, but we need to make that determination, to make sure it's feasible," Box said.
According to the City Council meeting agenda packet, the approved agreement was reviewed by city staff, Hometown Fiber, legal counsel, bond counsel and municipal financial advisers. "We took a long time to get this contract done, and almost everything that we asked is covered," said Councilor Mike O'Brien, who also serves on the broadband committee. The Connect Willmar network project has been in the creation and planning stages since last year.
The project started as an idea to provide a fiber network for the Willmar Industrial Park as a way to entice new businesses to move into the area. The project transformed into an open-access fiber network that could provide high-speed internet to all residents and businesses in the city. "This broadband project often targets underserved areas.
Private providers have been reluctant to invest," Box said. "By providing high-speed internet to those areas, the city can help bridge the digital divide, ensuring that all residents have access to essential online resources and services." The project, if approved by the council, would start with the construction of the network in the Industrial Park, downtown area and residential neighborhoods located south of U.
S. Highway 12, west of First Street South and north of 19th Avenue Southwest, called Phase 1. The estimated cost of that portion of the project is around $9 million.
The citywide network is currently estimated to cost around $25 million. The plan is to build the network phase by phase. Construction on a future phase will only take place if it is feasible to do so.
"This is our attempt to mitigate risk," Box said. The city plans to pay for the construction of the project with bonding and pay off the debt from the revenue raised by the in-use network. However, if revenue falls short, the city would have to find alternative ways of paying off the debt, including using tax funds.
"In the event revenue falls short, the City Council would be obligated to make those general obligation payments by other means, i.e. raising the levy," Box said.
Another essential part of the project is finding internet service providers willing to sign on to offer services. The lease fee paid by internet service providers to operate on the network will be 35% of whatever they are charging the customer for service. For example, if someone’s bill is $100, the city would get $35 of it.
Large providers such as Charter and Spectrum will most likely not participate, opening the door to smaller, local businesses to step up. The city and Hometown Fiber want at least one ISP contracted to the project prior to starting construction on the network. "There is one absolutely ready to go as a local Minnesota business," said Hometown Fiber President Kyle Moorhead, adding that with the approved agreement, Hometown will be able to actively begin recruiting other ISPs.
The next steps for the project will include ISP contract agreements, network design, construction documents and financing. Any time during these processes the city council can decide to stop the project from moving forward. Another important part of the next several months will be community outreach to explain to the public what the project is, how it will work and, it it hoped, motivate residents to sign up.
"This is to be a community project, community support will be one of many important factors," Box said. One member of the community did speak about the Connect Willmar project, and he wasn't in favor of it. Joe Ridler spoke during the open forum portion of the council meeting and said people are tired of the county's excess spending and felt this business, like many government-owned businesses, will fail and the taxpayers would end up shouldering the burden.
"It sounds like snake oil," Ridler said. Box, on the other hand, said that some of what is being shared in the community by people against the project is misrepresenting and oversimplifying the project. While there is a risk attached to the Connect Willmar initiative and concerns about the cost are valid, Box said, the benefits of the project could outweigh the costs.
"In today's world, fast, reliable and affordable internet is no longer a luxury; it is a necessity," Box said. "It touches every part of our lives, from our work, to how we learn, how we connect, how we prosper. Without it, we risk being left behind and losing the legacy our community has built.
".
