City Council Agenda Packet 02-09-2009 SpecialCITY COUNCIL -FIBER OPTICS WORKSHOP
February 9, 2009
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A) Legal Update -Status of Lawsuit -CLOSED SESSION
Separate agenda to be reviewed at Closed Session
B) FiberNet Project (includes Backbone/Fiber loop project) -OPEN SESSION
1) HBC Leadership/Staffing
2) Construction
a. Status of fiber backbone project (loop -data only)
Review Backbone route and service area options
Establishment and prioritization of customer list
Plan for installation of drops and and related equipment
b. Status of head end building project
Installation of ATS switch and stabilize building
Completion of construction (floors, windows, etc)
Installation of Electronics
Furnishings
Completion of mechanical, fire suppression, etc
c. Activities relating to provision of triple play services.
Carrier contract (for data):
Digital TV service:
Franchise agreement needed eventually
NCTC membership
Programming/packages/content line-up
Local (city channel); programming; expectations
Telephone service:
CLEC application in process
3) Operations
a. Staffing
General Manager & technician
-Employed by HBC -contracted to Monticello by agreement
City staff support -front desk and phones
Customer Service Representative -direct FiberNet employee - to be trained by HBC
b. Office space
GM -West Prairie room (interim basis)
Technician -head end building
c. Marketing and sales
Led by General Manager
Sales calls start appr Feb 15 (i.e. "lunch & learn")
Refine marketing plan and timeline
Establish advertising schedule
FiberNet newsletter -next issue in late Feb
d. Service levels and pricing
City will pay FiberNet for Internet service when operational
4) Finance
Business model for fiber backbone
Updated financial analysis (construction, legal, general)
2009 budget for FiberNet (interim needs until bond money released)
• c) Other items.
1) Consideration of adoption of interim management agreement - HBC/City of Monticello
2) Consideration of formal authorization to seek Government Stimulas Funding for Fiber Project
3) Start-up of Advisory Committee already established by ordinance -- Discuss
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CITY OF MONTICELLO
FIBER TO THE PREMISES PROJECT
SUMMARY REPORT
FOR
ECONOMIC STIMULUS FUNDING
February 5, 2009
Contact Person
Jeff O'Neill
City Administrator
City of Monticello MN
Direct: 763.271.3215
Cell: 612.840.3028
Email: jeff.oneill@ci.monticello.mn.us
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Monticello, MN
Fiber-to-the-Premises Project
The following document describes the Fiber to the Premise ("FTTP") system being built in
Monticello, MN. This document summarizes the effort to date for building a fiber system within
the City boundaries of Monticello as well as a second phase of building the system to nearby
homes in the Township that are also a part of the Monticello community of interest. The
Monticello fiber system is `shovel ready' and this project can be completed in 2009. Much of the
system has been engineered and the remaining engineering can be done ahead of construction
crews. The City has already built some key components of the network including a new central
office building to house the electronic equipment as well as several miles of key fiber that
connect City buildings and key business districts within the City. The City has also entered into a
public /private partnership with Hiawatha Broadband Communications, Inc. to manage and
operate the completed fiber system and business. The project will generate 151 man years of new
jobs in 2009 for construction and will additionally create 13 permanent new jobs over three
years.
The project requires $22.8 M in funds to complete Phase I of the project and $4.7 M to complete
Phase II, for a total funding of $27.5 M.
History of the FTTP Project
The original interest in fiber stemmed from acitizen/business group effort to develop ideas and
programs that would enhance the potential for quality job creation in Monticello. After an
unsuccessful attempt to get the local telecommunication providers interested in developing a
city-wide fiber optic development plan, the citizen's group eventually prompted the City Council
to formally investigate the idea. In May 2005 the City Council established a task force ("Task
Force") for further investigation into a FTTP network with the stipulation that such a project
would not be funded by a tax levy.
The Task Force consisted of city staff, community representatives, aCity Council member, and a
representative of Dain International, as lead consultant. The Task Force issued a Request for
Proposal (RFP) for a broadband feasibility study in December 2005, with responses due in
February of 2006. After interviews were completed, the Task Force selected CCG Consulting
LLC, Beltsville, Maryland ("CCG"), Dain International Services, St. Paul, Minnesota ("Dain
International"), and Springsted Incorporated, St. Paul, Minnesota ("Springsted") to perform the
broadband feasibility study, which included a resident survey, development of a business model,
an analysis of operating models, legal issues, and financing options.
The City first examined the cost of building a fiber network in the Broadband Feasibility Study,
dated September 18, 2006, prepared by CCG, along with Dain International, and Springsted.
Additionally, in 2007, the City hired CCG along with U-reka Broadband, Stillwater, Minnesota,
to perform more in-depth engineering study to better estimate the cost of constructing the
network. This second engineering study is summarized in aPre-Engineering Report dated March
31, 2007.
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Following several months of research and in depth work with the Task Force, conclusions
showed that it would feasible for the City to undertake the FTTP Project if the network were
owned and operated by the City. To further prove out the conclusions reached through the
feasibility study, the Task Force conducted a second survey by telephone. The City Council
received the feasibility study and approved moving forward with the FTTP Project at the City
Council meeting on September 25, 2006.
In May 2007, the Task Force was dissolved and a City Fiber Optics Committee began its mission
of identifying all the components needed to construct, own, and operate the FTTP Project. In
September 2007 aCity-wide referendum was held, seeking voter response to the proposal to
construct a voice switch that would provide telephone service over the City-wide fiber optic
network. Over 74% of the voters voted in favor of the referendum ballot question.
Since the referendum, the Fiber Optics Committee has developed a detailed financing plan and
business model; selected a business name (FiberNet Monticello) and logo; released an RFP for
FTTP engineering design; hired Spectrum Engineering Corporation of Auburn, Indiana
("Spectrum"), for design and inspection services and completing the initial phase of the design;
initiated some of the regulatory filings; approved the governance ordinance to establish a
telecommunications entity and create an advisory board; approved a management services
contract for operation of the business; developed a marketing plan and maintained
communication with City residents through mailings, a-mail, and a website; and selected a site
for the headend central office building to house telecommunications equipment.
As the City was in the process of selling the bonds to finance the project, without warning and
over seven months after the referendum, the City was served with a lawsuit from TDS, the
incumbent telephone provider in the City on May 21, 2008 challenging the ability of the City to
use revenue bonds to finance the fiber project. The City proceeded to close the bond issue and
the bond funds were placed into escrow awaiting the outcome of the lawsuit. On October 10,
2008 the City won the lawsuit on all issues. TDS has subsequently filed an appeal and the appeal
has yet to be heard. As part of the initial lawsuit the courts awarded the City the ability to collect
damages up to $2.SM from TDS as a result of delays caused by the suit.
The City always felt confident that it would win the lawsuit, so in the fall of 2008 the City
Council voted to proceed with construction of some of the key elements of the new fiber network
in order to shorten the time it would take to get into business at the end of the lawsuit. To that
end, the City has already constructed a central office building as well as several key miles of
fiber backbone. The City is in the process of awarding contracts for the fiber electronics and
other electronics needed to offer data services. The City plans to begin testing data services for
the City in April 2009 and to then sell data services to business customers neax to the fiber
backbone.
The FTTP Project
Phase I of the FTTP Project will consist of a FTTP network built on every street of the City. The
City has also always planned a phase II of the project to expand the fiber network to populated
portions of townships adjoining Monticello. The phase II construction would build to homes very
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near to the City that are part of Monticello in terms of the school system, shopping and local
identity. It is anticipated that the network will be nearly all buried underground except for the
possibility of a small part of the network near a few existing apartment complexes and mobile
home parks. One of the river crossings to get to nearby rural subdivisions is also aerial. The
network will consist of a backbone fiber network built to every street in the Service Area along
with fiber drops (at no charge to the user) to any homes or businesses that subscribe to services
on the network. Since the majority of the fiber for the FTTP Project will be buried it will provide
a reliable network free from weather concerns and insulated from most acts of God. To the
extent practical, the fiber drops will be placed into conduit to shield them.
The City anticipates that the installed cost of the network and associated assets to be
approximately $22.8 million, including the video headend, voice switch, fiber optic connections
to premises, and optical hardware. The City has already spent $2.6M on a head-end building, the
backbone fiber and start-up costs, leaving $20.2M in additional capital to complete the project.
Capital costs of Phase I of the FTTP Project are anticipated to be:
Still
Asset Spent to Date Needed Total
Fiber Backbone $1,020,005 $ 7,153,995 $ 8,174,000
Capitalized Drops to Premise $ 1,975,446 $ 1,975,446
Network Electronics $ 1,100,000 $ 1,100,000
Customer Premises Electronics $ 1,939;309 $ 1,939,309
Settop Boxes $ 723,667 $ 723,667
Digital TV Headend $ 2,020,000 $ 2,020,000
Building $ 869,554 $ 50,000 $ 919,554
Voice Switch $ 800,000 $ 800,000
Internet Equipment $ 426,500 $ 426,500
Inventory $ 600,000 $ 600,000
Start-up Costs $ 682,000 $ 1,320,191 $ 2,002,191
Construction Contingency $ 2,126,216 $ 2,126,216
Total $2,571,559 $20,235,324 $22,806,883
Note that the original bond borrowing for the project was for $26.4M. However, bonds included
financing costs, capitalized interest and other uses of funds that are not reflected in these
numbers.
FTTP Project Equipment Description
Fiber Backbone and Capitalized Fiber Drops
The fiber network will include installing fiber on every street within the Service Area.
Additionally, for each new communications customer, a fiber drop will be constructed from the
main fiber network at the street to the residence or business.
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Network and Customer Premise Electronics
The FTTP Project's electronics will consist of the base network electronics and the electronics at
each customer location. The base network electronics are the devices that encode packet signals
onto the fiber system and deliver high-speed data, video and voice services throughout the fiber
network. The electronics at the customer premise will consist of Optical Network Terminal
("ONT"), which converts the signal from the network to provide telephone service, cable TV
service, and high-speed Internet access.
Digital TV Electronics and Equipment
The digital TV electronics consists of numerous devices needed to receive and disseminate TV
signals. It will include the dishes required to receive signals from the satellites, a tower used to
hold the antennas to receive over-the-air channels such as local network stations, and the
electronics used to decode cable TV signals and reformat the signal to be used by the network
equipment. Digital TV equipment also will include customer set-top boxes for customers who
subscribe to digital TV service.
Buildin
A new building has been constructed to house the digital TV headend, the voice switch, the data
equipment, and the core network electronics. This building is normally referred to in the industry
as the hub or headend building.
Voice Switch
The voice switch will provide carrier-grade, traditional voice services to business and residential
customers. Services will include local dial tone, local calling features such as caller ID and call
waiting, as well as provide access to long distance services. The switch will also support state-of-
the-art Voice over Internet Protocol ("VoIP") telephone sets and services. This system will meet
`911' emergency standards.
Internet Equipment and Other Assets
Other equipment includes a hub for providing Internet and data services to customers, vehicles,
computers, tools and work equipment. The City will maintain an inventory that will include
fiber, spare parts to back up all electronics systems and customer electronics, and set-top boxes.
FTTP Project Operation and Management
The City has entered into a public / private partnership with Hiawatha Broadband
Communications, Inc. ("HBC") to operate and mange the fiber business and network. The City
has executed athree-year management agreement whereby HBC will operate and manage the
system on a day-to-day basis. The City will rely upon HBC's experience of launching and
operating a number of similar ventures elsewhere in the region. HBC will employ the general
manager for the FTTP Project and the City will hire all other staff positions which will be City
employees. HBC will also supply significant operational support for the FTTP Project in addition
to managing the system, including technical support, customer help desk, billing, and general
management support.
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The City will provide accounting services for the system as well as overall management and
policy for the system. FiberNet Monticello will be an enterprise fund of the City and thus will be
accounted for and audited annually as part of the City audit.
A governance ordinance establishing a telecommunication public service enterprise known as
FiberNet Monticello was approved by the City Council on April 14, 2008. The ordinance creates
an advisory board ("Advisory Board") and defines the roles of the Advisory Board, the general
manager, and the City Council in terms of governance of the system. The Advisory Board will
consist of five voting members: the mayor, a council member, and three community members.
The City Fiber Optics Committee is in the process of establishing the selection process for the
community representatives on the Advisory Board. The City Administrator and the general
manager of FiberNet Monticello will be non-voting members of the Advisory Board.
The general manager from HBC will be responsible for supervising all employees of FiberNet
Monticello, creating an annual budget for expenses and capital and operating within the
approved budget, creating and maintaining customer service quality standards, maintaining good
operating quality on the FTTP network, keeping the network operational and up-to-date with
technology, selling products to customers, maintaining regulatory compliance with State and
federal regulatory agencies, creating and maintaining competitively priced triple-play services,
and informing the City Council and City departments about the financial, operational, and
technical performance of the FTTP Project.
Network security will be provided by multiple methods. Integrity of the FTTP system is
maintained using complex encryption schemes making it extremely difficult to compromise the
security of the overall system. Further, as an operating ISP, the City will provide routine security
for customers by the use of establishing virtual private networks (VPNs) for each customer.
Finally, each data customer on the network will be provided the normal security tools such as
firewalls and virus checking.
Physical security will be furnished at the hub building that will house all of the electronics. This
building will be surrounded by chain-link fence and have a security key system and electronic
card readers for access. HBC will provide 24-hour monitoring of the building and the entire
network.
Customer billing will be performed by HBC.
Products and Services
The FTTP Project will be used to provide the triple play services including digital television
service, high speed Internet access, and voice service.
High Speed Internet Access. The City will offer high speed Internet access to residential and
business customers. This service will enable customers to access and use the Internet at
significantly higher speeds than those available from the incumbent providers in the City. While
specific products are still being developed, it is anticipated that the basic data service for
residences will consist of a symmetrical 10 to 100 Mbps Internet connection. The City's basic
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Internet offering will minimally have download speeds 3 to 4 times faster than the incumbents
and upload speeds 10 to 20 times faster than the incumbents. Customers will also have the option
to purchase even faster speeds. With the FTTP network these speeds can be increased up to 200
Mbps at a nominal cost.
Digital TV Service. The City has applied for membership into the National Cable Television
Cooperative ("NCTC") to buy programming content. The majority of programming will be
received from signals off of satellites from content provider through agreements negotiated with
the NCTC or directly with programmers. The headend electronics will convert that programming
into the appropriate signal and distribute it over the FTTP network throughout the Service Area.
The headend incorporates all of the necessary software needed to operate the digital system
including the programming, billing information, usage, advertising, music, channel guide, pay-
per-view, DVRs, video-on-demand and all other functions required to operate astate-of--the-art
system.
The City will also broadcast local channels from network stations in the areas. The right to
transmit local channels is guaranteed by the FCC but will require the negotiation of
retransmission agreements with each network channel. The City will also have the ability to
broadcast local school, civic and governmental events in real time or in a video-on-demand
("VOD") format.
The video services offered will include the legally required tiers of service. The final channel
lineup for each tier is not yet finalized. The basic tier will consist of approximately 20 channels.
The expanded basic tier will include the 20 basic channels plus approximately 50 more analog.
channels. The digital tier will include the 70 analog channels plus approximately 50 digital
channels, plus the right for customers to purchase movies, pay-per-view and other advanced
programming features. The City plans to carry all the normal premium movie channels such as
HBO, CineMax, Showtime, STARZ and Encore. In addition, the City will offer pay-per-view
programming as well as video-on-demand programming. Enhancements to digital service will
include the availability of personal video recorders which will enable customers to record and
save multiple programs on a hard drive without the use of videotapes. These services will be
provided by the City through the use of customer premises-based set-top boxes.
Voice Service. The City will provide a wide array of voice services using its own voice switch.
The City plans to offer a full array of features at competitive prices. The City will also offer a
plan to allow for unlimited long distance as well as sell long distance by the minute.
Market Survey
The City undertook two market surveys. In addition, the City held a referendum on acquiring
and constructing the voice switch.
The first market survey was done by CCG in August 2006 as part of the initial feasibility study.
CCG surveyed 374 residents on a random basis. With 4,289 households at the time, this survey
produced results with a 95% confidence level, plus or minus 5%. This is the same confidence
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level sought by most business and political surveys. The complete survey and results are
contained in the Broadband Feasibility Study dated September 18, 2006. The key results of this
survey are:
Residents were asked if they would choose the City as their communications provider:
84% said the City should get into the communications business.
64% said they would buy services from the City.
31% said they may buy services from the City.
The City conducted a second survey in November 2006. This survey talked to 1,375 residences
within the City limits and in the Township. Respondents were asked whether they would
consider taking services for telephone, Internet, and cable TV if the City would provide those
services at a lower price than currently offered by incumbent providers. Over 63% of households
stated they would take such services from the City, almost the same results as the first survey.
Finally, on September 18, 2007, the City conducted aCity-wide referendum. This referendum
specifically asked: "Shall the City of Monticello be authorized to construct, purchase or proceed
to acquire a telephone exchange?" Voters were asked to vote yes or no. Information to the voters
stated on the ballot noted: "The City is planning to construct acity-wide fiber optic network to
provide Internet, cable TV and telephone services. Construction, by the City, of a telephone
exchange, which would provide telephone service over the city-wide fiber optic network,
requires voter approval under Minnesota law. The proposed telephone exchange would be
financed with revenue bonds which are to be paid back by revenues generated from those taking
telephone service (as well as Internet and cable TV services) without a pledge of City taxes."
Under Minnesota law, a municipality must receive approval from voters of at least 65% in order
to own and operate a telephone exchange. 74% of the voters voted in favor of "the referendum
question. There were 5,830 registered voters and 114 new voters registered that day. A total of
1,409 votes were cast with 1,055 in the affirmative.
Phase I Job Creation
Phase I of the fiber project will create permanent new jobs as well as a significant number of jobs
during the construction period.
Permanent Jobs
The project will create an ongoing business in Monticello to sell and maintain customer
broadband services. It is projected that the business will begin with seven new employees in
2009 as the business launches, growing to eleven new employees by 2012. The average salary
for the new positions created is anticipated at over $40,000 per year.
Immediate Construction Labor
The project will also create a significant number of jobs during the construction of the network.
This work can all be accomplished in 2009. New job creation during this time is estimated as
follows:
Engineering 1.0 man years
Construction 97.2 man years
Construction Inspection 4.8 man years
Electronics Installation 1.0 man years
Total 104.0 man years
Where will the Funds be Spent?
A project of this complexity will require the City to use a wide array of vendors. In some cases
these vendors have already been chosen. In some instances, the City will need to issue a Request
for Proposal ("RFP") in order to choose the vendors, a process required by state bid laws for
municipalities. These RFPs can be done quickly and would not cause any delay in the
construction process.
Even where the City has not selected a vendor, the City knows the vendors who are likely to bid
for the various components, as follows:
Fiber Construction
The City used MP NexLevel LLC of Maple Lake, MN to construct the initial fiber backbone.
The City would issue a new RFP for new construction and would expect to get bids from:
MP NexLevel LLC of Maple Lake, MN
Grady Crawford Construction Company, Inc., Baton Rouge, LA
MasTec-Twin Cities, Hugo, MN
Michels Corporation, Brownsville, WI
North Central Service Inc., Clearbrook, MN
Spalj Construction, Deerwood, MN
The construction contracts would require that the contractor supply the material, so the fiber and
associated conduit and hardware could come from any number of different vendors depending
upon which construction vendor wins the construction bid.
Fiber En ing Bering
Awarded to Spectrum Engineering of Auburn, Indiana.
Construction Inspection
Awarded to Spectrum Engineering of Auburn, Indiana
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Overall Project Management
Awarded to CCG Consulting of Beltsville, Maryland
Digital TV Headend
Will be awarded through the RFP bid process. Likely bidders include Motorola and Scientific
Atlantic.
Digital TV Engineering and Inte rag tion
Will be awarded through the RFP bid process. Likely bidders include CCI, MegaHertz, and
Falcon Communications.
>~ital TV Satellites, Towers and Associated Equipment
Will be awarded through the RFP bid process. Likely bidders include Rohn, American Tower,
ADC, Rittal and Andrew Antennas.
Digital TV Settop Boxes
Will be awarded through the RFP bid process. Likely bidders include Motorola, Scientific
Atlantic, Thompson and ADB.
Voice Switch
Will be awarded through the RFP bid process. Likely bidders include Taqua, Metaswitch and
Nortel.
Fiber-to-the-Premise Electronics
The award for the initial fiber backbone deployment is Calix. There will an other RFP for the
larger project. Likely bidders include Calix, Alcatel Lucent, Zhone and Enablence Technologies.
Data Equipment
The selected vendor is Cisco.
Power Equipment
Selected vendors include C&D Technologies and Sageon Power Systems.
System Operation and Mana eg ment
The system will be managed by Hiawatha Broadband Communications, Inc.
Phase II -The Nearby Township
The City has always intended to build out to the nearby homes that are also part of the
Monticello community. These homes are just beyond the City boundaries and include the
neighborhoods of Tyler East, Ponderosa, Prairie Acres, Buckshot Hollow and Bridgeview. The
residences in these areas share the same school district, shop in the City and are a part of the
Monticello community. Building to the Township would bring fiber past 741 homes and would
entail 29 miles of fiber construction.
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The Phase II portion of the project can also be completed in 2009.
The construction cost of the Township area for Phase II is estimated as follows:
Asset Needed
Fiber Backbone $ 3,000,000
Capitalized Drops to Premise $ 350,000
Network Electronics $ 300,000
Customer Premises Electronics $ 300,000
Settop Boxes $ 110,000
Digital TV Headend $
Building $
Voice Switch $ 50,000
Internet Equipment $
Inventory $ 50,000
Construction Contingency $ 500,000
Total $ 4,660,000
Phase II Job Creation
The Phase II of the project will create one additional permanent job in 2009 and a second by
2012.
Phase II The project will also create a significant number of jobs during the construction of the
network. New job creation during this time is estimated as follows:
Engineering 0.5 man years
Construction 35.6 man years
Construction Inspection 2.0 man years
Electronics Installation 0.5 man years
Total 38.6 man years
Summary of Job Creation
This project will create a significant number of jobs during 2009. The following table
summarizes the new job creation:
2009 2010 2011 2012
Phase I Construction 104
Phase I Operations 7 9 10 11
Phase II Construction 39
Phase II Operations 1 1 1 2
Total 151 10 11 13
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Council Meeting
February 9, 2009
Consideration of adopting addendum to Management Services Agreement with Hiawatha
Broadband Communications Inc of Winona, Minnesota. (JO, CS)
A. Reference/Background
City Council is asked to consider adopting the attached agreement that outlines terms associated
with the management and operations of the Fiber Backbone Project associated with FiberNet
Monticello. As was noted at the workshop prior to the meeting, City Staff has been working
with Hiawatha Broadband Communications toward development of arrangements that will result
in the expertise necessary to operate the system for the Fiber Backbone at a reasonable cost.
This agreement has been negotiated by Milda Hedblom, Dain International Services, Inc., and
Doug Dawson, CCG Inc, with input from Staff.
This agreement, if approved, will be effective immediately.
B. Alternatives
1. Motion in support of adoption of the addendum to the Management Services agreement
with Hiawatha Broadband Communications.
2. Motion to deny support of adoption of the addendum to the Management Services
agreement with Hiawatha Broadband Communications
C. Recommendation
City staff recommends Alternative 1. The terms of the agreement appear acceptable and
reasonable to all involved in the negotiations. It is anticipated that expenses associated with the
agreement will initially be paid from reserves and then from revenues derived from customers
taking services.
D. Supporting Data
• Copy of addendum to the Management Services Agreement.
AN ADDENDUM TO THE MONTICELLO /HBC 2008 AGREEMENT
This document serves as an addendum to the agreement executed in 2008 by and between
Hiawatha Broadband Communications, Inc., a corporation under the laws of the State of
Minnesota, with offices at 58 Johnson Street, Winona, MN 55987 ("HBC"), and the City of
Monticello, a municipal corporation and political subdivision under the laws of Minnesota,
with offices at 505 Walnut Street, Monticello, MN 55362, acting through its
communications enterprise known as FiberNet Monticello ("FiberNet").
Recitals
A. HBC owns and operates a communications system providing video, voice
and data services to customers in Winona, Minnesota and other
communities.
B. FiberNet Monticello intends to build and operate a fiber to the premise
("FTTP") communications system capable of delivering video, voice and
data services to customers in Monticello, Minnesota (the "System").
C. FiberNet has taken the necessary steps to implement a fiber project known as
"The Fiber Backbone Project" which will serve as the backbone of the
System.
D. The Fiber Backbone Project will sell data services to customers on or near
the existing fiber backbone and the business activities of the Fiber Backbone
Project will operate as an enterprise fund of the City under the enterprise
name of FiberNet Monticello.
E. The parties have agreed that HBC will provide certain services to the Fiber
Backbone Project, as more particularly described herein and upon the terms
and subject to the conditions stated herein.
The parties therefore agree as follows;
1. The commencement date of this Addendum will be the date of its execution, and shall
remain in force until otherwise determined by mutual agreement of the parties.
2. The Interim General Manager of the Fiber Backbone Project will be provided by HBC
Communications, be an employee of HBC and based in or near the City of Monticello. Mr.
Don Patten has been identified as the Interim General Manager.
3. The services of the Interim General Manager under the terms of this Addendum will be
billed to the City at the rate of $55 per hour for necessary project activity with a minimum
commitment of 20 hours per week.
4. The Technician will be provided by HBC Communications, be an employee of HBC and
based in or near the City of Monticello.
5. The services of the Technician under the terms of this Addendum will be billed to the
City at the rate of $25.00 per hour and hours will be billed as used. HBC will use the
Technician for other projects when he is not engaged with Monticello.
6. Interim General Manager Responsibilities will include the following:
a. Operational control of the Fiber Backbone Project.
b. Direct sales and marketing including coordination with City Administrator
and Staff in support of marketing and customer service efforts.
c. Supervise the technician.
d. Responsible for first call customer service needs.
e. Coordinate with engineering staff on construction, installation and
maintenance of Fiber Backbone Project equipment and facilities.
£ Responsible for working with City Administrator to developing and
operating within budget.
7. Technician responsibilities will include the following:
a. Participate in sales meetings as needed.
b. Install new customers.
c. Respond to customer troubles /questions.
d. Operate the data equipment at the headend.
e. Provide back up to Interim General Manager to answer customer calls.
8. HBC responsibilities will include the following:
a. Bill customers.
b. Provide data help desk assistance.
c. Provide engineering and other technical backup to assist Technician as
needed.
d. Provide training for General Management and Technician.
e. Provide accounting records and invoice to City with enough detail
for City to maintain books for the Fiber Backbone Project.
9. Monticello responsibilities will include the following:
a. Keep books for the business.
b. Provide timely coordination and advice for HBC as requested.
c. Provide working space for the Interim General Manager and Technician.
d. Pay HBC bills for service according to terms of the primary agreement.
e. City will subscribe to services on Fiber Loop as if they were another
business customer.
f. Provide customer support to telephone and walk-in traffic.
g. Provide marketing plan and support.
In Witness Whereof, the parties have entered into this agreement, effective this day of
2009.
HIAWATHA BROADBAND
COMMUNICATIONS, INC.
CITY OF MONTICELLO
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