Deliberation about a potential plan to connect every Sun Prairie home and business with fiberoptic cable continued this week with city officials agreeing public information sessions and hearings will be needed.
Mayor John Murray went as far Tuesday evening as to gauge whether Committee of the Whole members were open to a referendum on the nearly $27 million proposed telecommunications project with Sun Prairie Utilities.
“We've put things to referendum on the full-time mayor and we tried to put a fire department [to a vote],” Murray said. “I would argue if there ever was a decision that this Committee needs to weigh and be a referendum, boy, this certainly looks like one.”
Ald. Hariah Hutkowki called Murray's suggestion “intriguing,” but City Clerk Diane Herman-Brown said the earliest the issue could land on a local ballot is August because April's election deadline has come and gone.
“This certainly looks like a situation where we educate the public and we seek their advice on it and we ask them to weigh in,” said Murray. “This is almost a $30 million project that you're essentially asking the city taxpayers and the rate-payers to chip in.”
Last week, consultants and a financial advisor appeared before the Committee of the Whole for initial talks about the possibility of running fiber throughout Sun Prairie. The service is capable of providing connection speeds upwards of 50 times faster than traditional broadband.
Ald. Jon Freund last Tuesday touted fiber as a way for Sun Prairie to differentiate itself from other communities by providing superior voice, video and internet service for its residents. He also said fiber installation would boost property values and help lure new businesses, expanding the city's tax base.
This fiber optic project would also result in improved outage monitoring and better control of system demand by both the utility and its customers.
“The intent of structuring the project this way is to ensure everyone wins,” Freund said.
Sun Prairie would become the second Wisconsin municipality to complete a fiber optic overlay of its city if the project moves forward. The first was Reedsburg, whose network has been operational for a decade.
A SPU survey conducted last year through found that 88 percent of respondents (over 700 in all) were open to fiber capabilities. And a feasibility study by The Motive Group showed it would take nearly $27 million to make fiber optic service available to Sun Prairie’s nearly 13,550 residences and businesses.
In order to make the project go the city will be expected to partner with SPU. Freund said over the first 20 years of the project, the city stands to collect up to $17 million in PILOT (payment in lieu of tax) payments “of which a portion would be used to service the debt and a portion would be directed to the general tax revenues of the city.”
Freund explained that the total boils down to roughly $10 million in debt repayment to the city, $2 million in interest payments, and up to $5 million in unspoken new revenue for the city.
(Managing editor’s note: The Star incorrectly reported a week ago that the project's debt service could cost each SPU customer approximately $5 per month.)
“Ultimately this would actually benefit the city taxpayers as well,” Freund told the committee Tuesday.
Murray last week expressed a desire to see those involved to reach out to incumbent service providers such as Charter and Frontier and find if either has interest in partnering on a fiber project.
The mayor reiterated that stance Tuesday.
“The worst they can say is ‘No’ and we say ‘Thank you for your time‘ and we come back to this body and say we've ruled that out,” Murray remarked.
Freund said he and others spoke Tuesday with Frontier representatives and the provider expressed little interest.
“It was a good conversation and certainly as we looked at partners they would be the most likely partner in the community, but it was pretty clear that they weren't interested in taking this project on themselves and providing us this service at no cost to the city,” Freund said.
No talks had been held with Charter as of mid-week.
Freund and Ald. Mary Polenske both said there are plans to possibly hold an information session about the project on March 4.
City officials in the meantime expect to continue discussing the project and promoting its details.
“My hope is that we continue to put additional information out over the next month to continue to educate the public,” Freund said.
Budget amendment approved for New Perspective
Committee members approved a budget amendment worth $118,265 as part of an annual incentive payment to New Perspective (Lighthouse of Sun Prairie).
According to Neil Stechschulte, director of economic development for the city, the payment stems from a development agreement that any valuation over $60,000 per unit would be provided back to the developer.
The $13.42 million assessment divided by 144 units, Stechschulte said, “results in a ratio of $93,229 per unit, or a difference of $33,929 per unit.”
Stechschulte said the payment will have “no negative cash impact to the city,” and will be paid once the developer has paid his total property tax bill in full.
The item was also approved during the Jan. 21 council meeting without discussion.