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HomeMy WebLinkAbout07 11 2011 EDA meeting minutes 4646 Dakota Street SE Prior Lake, MN 55372 Economic Development Authority Meeting Minutes Ju ly 11 , 2011 1. CALL TO ORDER Vice President Morris called the meeting to order at 4 :04 p.m. Present were Choudek, Morris and Myser , Building and Transportation Services Director Kansier , Public Works and Natu ral Resources Director Gehler and Executive Director Boyles. Also present w ere Matt S chmit of Scott County , Steve Mercil of Rain S ource Capital, Dan Pecar i- na , Gary Evans and Milda Hedblom of Hiawatha Broadband Communications. President Hedberg and Commi s- sioner Hitchcock were a b sent. 2. APPROVAL OF AGENDA MOTION BY MYSER, SECOND BY CHOUDEK TO APPROVE THE AGENDA AS PRESENTED . VOTE: Ayes by Choudek, Morris and Myser . The motion carried. 3. APPROVAL OF MEETING MINUTES MOTION BY MYSER, SECOND BY CHOUDEK TO APP ROVE THE MINUTES OF THE JUNE 13 , 2011 MEETING AS PRESENTED. VOTE: Ayes by Choudek, Morris and Myser . The motion carried. 4. P UBLIC HEARING No public hearing was scheduled. 5. OLD BUSINESS A. Adoption of EDAC Bylaws and Referral to City Council MOTION BY MORRI S, SECOND BY CHOUDEK TO APPROVE THE EDAC BYLAWS REVISIONS AS PR O- POSED FOR SUBMISSION TO THE CITY COUNCIL . VOTE: Ayes by Choudek, Morris and Myser . The motion carried. 6. NEW BUSINESS A. Hiawatha Bro adband Communications – Gary Eva ns, Dan Pecarina and Milda Hedblom – 4:15 p.m. President Gary Evans introduced himself, Dan Pecarina and Milda Hedblom. He spoke about HBC, what is i m- po r tant to consider and potential obstacles. Stated the most important question to consider i s to know why you want to build fi ber . Described various fiber to the home projects they have completed. Provided examples of other communities: Wabasha’s economic development district participated with HBC to buy equipment; Monticello had the highest telephone rates in the n a tion and felt that it was impacting their economic development; Monticello is building the business first and will complete residential fiber at the end because economic development is the pr i- mary reason for the system . The approach of HBC has been to build in concentr ic circles. Evans urged setting obje c tives, creating a plan and knowing what it should look like in the end. All of the cities have grown. Reversed six decades of population declines in some places. Each community has seen a rise in telecommuter usage. Business erosion has stopped in the communities. Prices for telecommuter se r vices have declined. $23 million in savings over the cities served. Dan Pecarina described the various types of fiber optic networks:  PON – passive optical networks (fiber goe s from head to home . Phone 952.447. 9800 / Fax 952.44 7 . 4245 / www.cityofpriorlake.com  GPON – gigabyte PON. Most cost effective. Fiber to distribution point and then to home. Can keep cost down  GEPON – gigabyte Ethernet PON  WDMPON – wave division shrinks fiber needs. Multiple use of each fiber for distributing si g nal . Cities and EDAs need assistance. Some things to remember are:  H ere is where they can die. Can over engineer.  Engineering – there are very good contractors. There are middle men. Don’t use the middle men.  Co n struction Costs – meet with contractor s, then bid and rebid. (HBC designates contractors).  Dollars per household $900 per pass to construct (cost per household). Cost of conn ecting extra $700. T hose who actually hook up are about 50% of houses passed even though had vendors already in place .  Assumes underground although slightly less expensive to construct aerial – but higher maintenance. Community Network Elements include the following:  Network Operation – AC, multiple sources of electricity. Multiple 511 connectors.  Routes to Internet  Access to fiber transport – to other businesses – we get to be the middle person.  Network Support – school districts moving over their network. Laptops to all from school district. Network Support Elements – all provided by HBC  Network operations  Regulat ion  Safest marketing (??)  Customer Service  Broadband support (connecting software / hardware together to get the most from it)  Field Operations  Accounting / Finance Milda Hedblom Overall Planning process should include at least the following consideratio ns: 1. Vision and goal setting 2. Project timeline – affected by who gets what when 3. Project involvement decisions 4. Explore partnerships 5. Identify initial network plan and services – feasibility study  Public involvement – pros and cons of protagonists being from c ity or from business or from residents  When and how broader involvement with the community. Why an appropriate goal for the city.  Who is involved? Who does what. Figure out why you need the partner and what you want from it. Espec ially if city is not g oing to be operator. 6. Funding options – bonds, public approvals necessary? Capital leasing relationship – lease money. Other cities get private investments. 7. Ownership and management options – financed, owned and operated, finance and own ed with someone e lse operating, creating new non - profit center separate from city, or operating as a cooperative. 8. Market survey – tells about the likelihood of costs being paid through system. 9. Business plan. Legal / Regulatory 1. State obstacles  Video – no real obstacle – ca n get franchise from self 2 07 11 11 EDA meeting minutes  Broadband – no real obstacle – can get franchise from self  Video voice – this is where problem can occur. Statute says must be approval of referendum by 65% of populace to engage in voice, etc. Can prevent project from moving f orward (Cook County – bond r e- ferendum approved. Did not reach 65% . )  Some communities are doing multiple referendums.  Some communities are using VOiP to side step 65%. 2. Legal Challenge – are seeing regular challenges 3. Regulatory network operation  Programme r agreements  Tariffs  911 compliance  CALEA  Privacy Have done plans and specs . LMC – Ann Higgins – joint effort with other cities B. Rain Source Funding – Steve Mercil – 5:30 p.m. Started in Crookston – had private investors. Led to path of capital equity funding . Rain Source funds for inves t- ment . Ownership transitions . Focus talent in back yard . Empowers infrastructure in community . EDA could sponsor a meeting and get investors involved in meeting. Offer to wri te down costs upfront. Typica l ly $30,00 0 in total costs with a $10,000 design phase make or break point. Legal relationship phase is $15,000. Second and third phase can save money. Getting leadership group together – only three instances where failure took place . Choudek c larified the leade rship group risk financially and otherwise. Key is to get one or two leaders. Myser and Morris believe we should do Rain Source financing. 7. OTHER BUSINESS A. Draft August 8, 2011 Agenda ADJOURNMENT A motion was made by Myser, and seconded by Choudek to ad journ the meeting. With all in favor, the meeting adjourned at 6:20 p.m. ___________________________ Frank Boyles, Executive Director 3 07 11 11 EDA meeting minutes