Eagle Town Council tables vote on $10M loan to launch next phase of broadband
Members split on what mayor calls ‘the biggest decision we will ever make’
Eagle Town Council members tabled a vote to take out a $10 million bond to launch the next phase of bringing broadband to town, stressing the need to think things through before taking on such an immense amount of debt.
It has been two and a half years since the town voted to bring fiber-optic cable to Eagle through Project THOR, a “middle mile” broadband project coordinated by the Northwest Colorado Council of Governments.
Eagle’s internet options look different now, and even back then, the Town Council was split on the issue, joining THOR by a vote of four to three.
“It’s a big financial risk for the town, and I think that’s sort of what it comes down to — is it worth the risk of a $10 million bond to create a third provider for our citizens and our businesses?” Mayor Scott Turnipseed said. “I think this is the biggest decision we will ever make as a council member no matter how long you’re on this council.”
The Town Council heard a project update Tuesday evening from Uptown Services, a telecommunications consulting firm hired to help secure financing to build out a larger fiber-optic network to serve the whole community.
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A Comcast representative also attended the meeting Tuesday to speak about the company’s downvalley expansion into Eagle and Gypsum, which has led some council members to question the need for a third provider.
The need to build out a municipal broadband network was more clear when the project started, before Comcast came to town. Back then, it was about bringing “equitable access to broadband,” Town Council member Ellen Bodenhemier said. Now, there is more to think about.
They also have no way of knowing whether new technology will emerge in the next five or 10 years that could make the process of building out broadband cheaper or more effective, Turnipseed said.
“Elon Musk isn’t putting fiber in the ground; he’s putting satellites in the sky,” Turnipseed said.
There is no reason to rush, and many factors to flesh out, including whether town staff even has the capacity to oversee a project and a loan of this magnitude, council member David Gaboury said.
Town Council member Geoff Grimmer, on the other hand, said accelerating momentum towards a “Zoom economy” makes this the right time for a “dynamic opportunity” like the one proposed by Uptown.
“This will be the most significant thing we do for economic development…” Grimmer said. “I think it’s a big win across the board.”
The project will be a major help to local business owners, many of whom have been inhibited in growing their business online or have had online sales impacted by a sudden loss of service, he said.
Faster, more reliable internet and better customer service also has the potential to improve residents’ quality of life, Grimmer said.
Uptown representatives gave updates on their progress in establishing a “pro forma” — projections used to calculate potential financial results for a project. They have finally found the ideal lender in Alpine Bank — a community bank perfect for a “community project,” one representative said.
The $10 million loan relies on the town using its wastewater fund as a “secondary source of security,” the representative explained.
The town would need to put up another significant asset in its repertoire to secure the loan because loans for broadband are not prioritized, as it is not deemed to be an “essential service,” he said.
Also, banks have become more conservative in taking financial risks since the start of the COVID-19 pandemic sowed doubt and insecurity in many facets of the economy. Putting up something like a municipal wastewater fund as a secondary security is effective because it is a very stable, reliable asset.
In the Town Council’s questioning of the representative, the representative clarified that this does not mean that wastewater users — town residents — would incur any extra fee in accessing the service.
The Uptown representative said he feels confident that the financing plan the council has set up is strong, and the broadband project will generate enough revenue to be self-sustaining in no time.
Why this? Why now?
After a few more updates on various aspects of the project, Grimmer asked a question that many residents — if they tuned in — might have been asking themselves amid all the financial jargon and technical details: What are the main advantages of doing this, in this way, at this time?
With the project’s current timeline, Eagle will have the benefit of following Glenwood Springs, whose broadband project is now in full swing and will serve as a strong model for Eagle to learn from.
Internet traffic is growing, a trend that was accelerated by COVID-19, increasing the burden on preexisting infrastructure in Eagle and across the country, representatives said.
Having a complete, publicly-funded broadband network gives the town an infrastructural “runway” for future expansion, Neil Shaw, a principal with Uptown Services, said. It would also give residents the robust level of customer service that was at the top of Glenwood Springs residents’ wish list when surveyed about their internet-related needs.
Comcast can’t provide the level of customer service and personalized care that municipal broadband can, representatives said.
Andy Davis, director of regulatory and government affairs for Comcast, spoke next, countering some of the points made by the presenters from Uptown.
Comcast has been building up its service offerings in Eagle, he said. When the expansion is finished next year, it will be able to service most of the town with the exception of The Highlands at Eagle Ranch and a few other low-density areas.
The Highlands does not meet the minimum housing density requirements Comcast adheres to in deciding whether to move into an area, Davis explained. Upon further questioning, he said he would speak with the company’s finance team to see if they can make an exception.
Beyond this, Comcast is on the cutting edge of internet providers with significant buy-in from Eagle residents already, he said.
“One of the challenges for all of you is taking on an enormous amount of debt to do a project when you’ve got us building it for free,” Davis said. “… We’ve got, I would say, a more broad and more robust set of capabilities.”
Ultimately, the Town Council voted unanimously to table the motion until its next meeting Nov. 9.
Email Kelli Duncan at email@example.com