Some city residents will be able to unwrap a Christmas gift of fiber-optic broadband when Sun Prairie Utilities (SPU) launches its pilot project this December.
The SPU $624,000 plan -- which includes Smith’s Crossing, the Main Street Corridor and the city-owned Tax Increment Finance (TIF) District 9 that includes the St. Mary’s Sun Prairie Emergency Center, is on an aggressive timetable to be completed by Dec. 1.
The city council and committee of the whole approved the move July 21 as a test for a $27 million citywide fiber optics proposal. Advocates say it will bring better service and economic development to the area but cable competitors and concerned taxpayers say it’s too high a risk for the municipality to take on.
Mayor Paul Esser has pushed for the city council to make a decision to either go forward or abandon the project.
“Moving ahead with the pilot project in Smith’s Crossing is the right way to go,” Esser said. “ I believe that as an early adopter of this technology we will have an economic development advantage which will attract companies that require this broad bandwidth.”
It will be the first major foray by SPU in laying out fiber optics to single family homes and businesses after bringing the service to several apartment complexes and the Sun Prairie Area School District for the last 16 years.
Although the plan was unanimously approved, alders added a condition that requires SPU to conduct an independent market analysis of the pilot project two months before the citywide expansion project is up for a vote. Alders expect to make a decision one year after the new service goes online.
With the approval, SPU will now look for financing. SPU manager Rick Wicklund said because the amount isn’t enough to issue a city bond, a bank loan is the best option.
“I am not sure on the finance stream,” Wicklund told alders. “ We are talking to a couple of different sources.”
SPU plans to borrow $624,000 to cover installation costs—$550,000 for Smith’s Crossing, $68,000 to the Main Street corridor and $40,000 to the TIF 9/St. Mary’s development area. The city will pay half the cost from TIF 11 for the Main Street installation and the full cost of TIF 9 project costs upon sales of parcels in the district.
Wicklund estimated with 30 percent of customers taking the service, the utilities should see a positive cash flow on the test project in three years in Smith’s Crossing.
He said estimated rates will be $50 for 60 Mbps and $70 for 200 Mbps symmetrical, and at some point 1 Gbps symmetrical will be offered.
The city council has been debating the project during the last couple of months, hearing from supporters, detractors, and cable company competitors who opposed it.
At the July 21 meeting, several alders said they have come around to the idea of the test project to gauge whether citywide service is viable.
“I am supportive of it but I will watch is like a hawk, and if it is not supporting itself, I will shoot it down,” District 4 Alder Al Guyant said.
District 1 Alder Russ Fassbender said he was confident SPU has put together a very conservative financial proposal and that there wasn’t any risk involved to ratepayers and taxpayers.
District 3 Alder George Frank, who voted for the project at both the Committee of the Whole and City Council meetings, was still unsure if it would be a good thing for all residents.
“I want to look at the whole city and see where we are at, not just Smith’s Crossing where everyone wants it. We have to see if the whole community wants this and not just a few vocal people,” Frank said.
District 2 Alder Bill Connors said one of the threats to the citywide project could be the city council itself; if political will changes and cuts it short.
“The single biggest risk is that it would take a long time to pay off (the citywide project) and that elected officials couldn’t keep their hands off it and that future councils will screw this up,” Connors said.