City Council Agenda Packet 04-14-2008 SpecialAGENDA
SPECIAL MEETING - MONTICELLO CITY COUNCIL
Monday April 14, 2008 - 5 p.m.
Mayor: Clint Herbst
Council Members: Wayne Mayer, Tom Perrault, Brian Stumpf and Susie Wojchouski
1. Call to Order
2. Fiber Optics Engineering and Project Update
Consideration of Resolution calling for the Sale of Telecommunications Revenue Bands,
Series C.
4. Consideration of approval of the Governance Ordinance for FiberNet Monticello.
Adjourn
Council Agenda - 4/14/08
2. Fiber Outics Engineering and Proiect Update. (B.W., C.S.)
A. REFERENCE AND BACKGROUND:
The Monticello Fiber Optic Task Force is pleased to update City Council on the current
status and upcoming schedule for the city fiber optics project related to engineering and
construction. Please refer to the attachment fram Bruce Westby for more information.
Bruce Westby, Jahn Simola and Jeff O'Neill will lead the discussion and answer
questions.
B. ALTERNATIVE ACTIONS:
None needed
C. RECOMMENDATION:
None
D. SUPPORTING DATA:
• Bruce Westby update
Council Workshop: 4/14/08
Engineering update for Fiber Optics project. (B.W.)
Outside Plant (OSP) design -
Spectrum Engineering Corporation (SEC) retained the services of U-reka Broadband
Ventures from Stillwater, MN to complete the field walkout to identify the preferred design
for the fiber optics infrastructure. This walkout began on March 17th and was completed on
April 4th. The walkout process itself went relatively smooth and only a couple of
complaints were received from residents. The complaints, which primarily focused on
providing better identification of the walkout staff, were addressed quickly to avoid similar
issues during the remainder of the walkout.
The data gathered during the walkout exercise is being used to prepare construction plans
and specifications for the OSP design. Currently, all of the trunk fiber has been designed
and all production processes have been established. The project will be designed and bid in
multiple phases, with the last of the phases being fully designed and bid by early August.
The construction plans will likely need to be modified slightly in the field to account far
unforeseen circumstances once existing utilities are marked in the field. Ideally, existing
utilities would be marked during the design phase of the project but private utilities are not
willing to mark utilities for design purposes. However, based on past experience it is
anticipated that the number of field changes will be minimal.
In order to avoid costly project delays a Change Order approval process should be
established and approved by the City Council prior to the start of canstruction. Such an
approval process would typically consist of the Council authorizing a preset dollar amount
that if not exceeded would allow staff to approve changes in the field without first seeking
Council consent. On the other hand, if the preset dollar amount would be exceeded the
Council would need to authorize the changes prior to work commencing. Staff plans on
bringing this item before Council for approval at the first meeting in May.
Scott Bowles from SEC will be in Monticello this Wednesday to validate the walkout data
gathered. Staff will then meet with Scott to review the design drawings and specifications
completed to date, to review the contractor prequalification responders list, to receive and
sign off on the completed permit applications, and to discuss the project schedule.
Contractor prequalification -
An ad was run in the Monticello Times and the Construction Bulletin for the last few weeks
instructing interested companies how to prequalify for the fiber optic project. To date well
over a dozen companies have requested the Statement of Frequalification document, which
must be submitted by April 18th. After that time all responses received will be graded in
order to determine which companies will receive the bid documents. Any company scoring
at least 800 out of 1,000 possible points will receive the project bid documents, which will
be sent out on May 25th
Council Agenda - 4/14/08
3. Consideration of Resolution calling for the sale of Telecommunications
Revenue Bonds, Series 2008C. (JO, TK, CS)
A. REFERENCE AND BACKGROUND:
The Monticello Fiber Optic Task Force is requesting consideration of approval of a
resolution to call for the sale of Telecommunications Revenue Bonds. This will permit
our band company, Oppenheimer, to proceed with determining pricing and market
conditions for the sale of the bonds. It is intended to bring the approval of the actual
bond sale to Council in May.
Representatives from Oppenheimer and Springsted, Inc will be present to explain their
recommendations and schedule related to the pricing and sale of the bonds.
B. ALTERNATIVE ACTIONS:
1. Approve the resolution calling for the sale of Telecommunications Revenue Bands,
Series C.
2. Do not approve the resolution at this time.
C. RECOMMENDATION:
It is the recommendation of the City Administrator and Finance Director to approve the
resolution calling for the sale of the Telecommunications Revenue Bonds, Series C. The
market conditions appear quite favorable at this time to proceed with the pricing for the
bonds. The scheduling of the outside plant construction has been timed to coincide with
the sale of the bonds prior to June of 2008. Approval by Council allows the fiber optics
project to continue on schedule. We will be continuing to evaluate the business model
and bond market in the coming weeks in terms of business viability.
D. SUPPORTING DATA:
• Resolution calling for the sale of Telecommunications Revenue Bonds, Series C
• Letter, recommendations, and terms and conditions related to bond sale - Springsted,
Inc
• Projected sources and uses related to bond sale
• Schedule of bond sale
• Copy of IDC resolution in support of the sale of Telecommunicatians Revenue
Bonds, Series C
April 10, 2008
Mr. Jeff O'Neill, City Administrator
Mr. Tom Kelly, Finance Director
City of Monticello
505 Walnut Street, Suite #1
Monticello, MN 55362
~~~ Springsted
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101-2887
Tel; 651-223-3000
Fax: 651-223-3002
wwwspnngsted.com
Re: Recommendations for the Issuance of Telecommunication Revenue Bonds, Series 2008C
Dear Mr. O'Neill and Mr. Kelly:
Included with this letter is Springsted's recommendations for the above-captioned issue. These recommendations
may be distributed to the City Council, and City staff prior to your council meeting on Monday, April 14, 2008.
If you should have any questions pertaining to the recommendations or if you would like additional copies, please
contact us.
Sincerely,
L?~vuatiate ~ `~o yam
Christine M. Hogan
Project Manager
smc
Enclosures
cc; Mr, Ralph McGinley, Oppenheimer & Co., Inc,
Mr, Bryan Nelson, Oppenheimer & Co., Inc.
Mr, Steve Rosholt, Faegre and Benson, LLP
Public Sector Advisors
Recommendations
For
City of Monticello, Minnesota
Telecommunications Revenue Bonds, Series 2008C
Presented to:
Honorable Clint Herbst, Mayor
Members, City Council
Mr. Jeffrey O'Neill, City Administrator
Mr. Tom Kelly, Director of Finance
City of Monticello
505 Walnut Street, Suite #1
Monticello, MN 55362
Study No.: 000575K20
SPRINGSTED Incorporated S P I" I tl g S~ ~' d
April 10, 200$
RECOMMENDATIONS
Re; Recommendations for the Issuance of Telecommunication Revenue Bonds, Series 2008C
(the "Bonds" or "Issue")
We respectfully request your consideration of our Recommendations for the above-named Issue.
The proceeds of the Bonds will be used (i) to pay the cost of acquiring, installing, developing and constructing a "fiber-
to-the-premises" broadband communications network within the service territory of the City of Monticello which will to
be used for government and community connectivity for educational and other governmental services, along with
providing certain other broadband communication services to business and residential customers such as cable
television services, Internet access, and voice services (the "Project"), (ii) to pay capitalized interest on the Bonds
during the construction of the Project, (iii) to fund the reserve requirement, (iv) to fund an operating reserve fund, and
(v) to pay the costs of issuance of the Bonds, The Project has been named FiberNet Monticello.
The Bonds are being issued pursuant to Minnesota Statutes, Chapter 475, a Trust Indenture between the City and
Wells Fargo Bank, N.A. as the Trustee, a voter referendum of the City held on September 18, 2007, and the
resolution (the "Resolution") for the Bonds.
The Bonds will be special, limited obligations of the City payable solely from net revenues derived from the Project
after payment of operation and maintenance costs. The Bonds do not constitute a debt of the City or obligate the City
to levy taxes or use any other source of revenue for payment of the Bonds.
The Bonds are expected to be repaid over a term of 23 years, with a final maturity in 2031. Capitalized interest
included in the par amount of the Bonds will be used to pay the interest on the Bonds for a period of three years.
Principal repayment is expected to begin November 1, 2013 or at which time the revenues of the Project are
projected to be sufficient to pay the principal and interest payments on the Bonds,
A preliminary sources and uses of funds is shown on page 5 and has been prepared based on the estimated
construction cost and working capital needs provided in most recent update of the business model prepared by CCG.
The estimated principal amount of the Bonds shown in the sources and uses summary is $22,445,000. The principal
amount will be subject to change to reflect any further refinement in project costs between now and the day of sale
and the final interest rates.
Under the Trust Indenture, the City agrees to deposit all net revenues of the system to the Trustee to be held in
various funds and accounts. These funds and accounts include the Debt Service Fund, a Capital Improvement Fund
and a Surplus Fund, The Trust Indenture will require the City to adhere to certain provisions for the benefit of the
bondholders, Some of the provisions relate to (i) the operation and maintenance of the facilities, (ii) the issuance of
additional debt to fund the project or that will be payable from the revenue derived from the Project, and (iii)
establishing certain funds including a debt service reserve fund. A brief description of these provisions are listed
below:
Operation and Maintenance
The City will be required to establish and collect rates, fees and charges far the use or sale of the services of the
Project which shall be sufficient to produce adjusted net revenues for each fiscal year that will be equal to at least
1.25 times the principal and interest due on the Bonds and any additional bonds. Based on the business plan
City of Monticello, Minnesota
April 10, 2008
provided by CCG and the current debt service estimate the minimum coverage is projected to be an estimated
minimum of 1.75 times principal and interest.
Additional Bonds
The City may issue Additional Bonds that will be payable and secured equally and on a parity with the Bonds. Such
Additional Bonds may be issued to finance the completion of the Project, to finance a related project, or to refund the
Bonds. The Trust Indenture provides the requirements under which the City can issue Additional Bonds. A summary
of which is described below:
(a) A certificate of a Consulting Engineer provides an estimated completion date for the project financed with
the Additional Bonds, a report of a Broadband Consultant showing estimated adjusted net revenues for the
remainder of the then current fiscal year and each fiscal year thereafter for five years which will show that
based on projected adjusted net revenues of the project will be at least 1.25 times the debt service; or
(b) A certificate signed by authorized officer of the City stating that adjusted net revenues for the previous two
fiscal years were equal to at least 1,25 times the debt service for that period, assuming the average annual
debt service on the Additional Bonds was payable during each of those two fiscal years.
Reserve Fund Requirement
For further security on the Bonds the Gity is required to establish a debt service reserve fund. The debt service
reserve fund requirement will be funded with proceeds of the Bonds and as per the Trust Indenture will be funded at
the least of (i) the maximum principal and interest an the Bonds in the current and any future year, (ii) 1.25% of the
average annual principal and interest payable on the Bonds during the current and any future year, or (iii) 10% of the
proceeds of the Bonds.
Pricing Process
The sale of the Bonds will be through a negotiated sale process. The City Administrator, or a designee, and
Springsted will negotiate the interest rates and terms on the Bonds with the underwriter, Oppenheimer & Co, Inc,
The anticipated calendar of events is attached. The negotiation and final pricing of the Bonds is expected to take
place on May 15, 2007, The results of the negotiations will be reported to the City Council on May 19, 2008, at which
time the City Council will be asked to adopt the resolutions awarding the sale of the Bonds to Oppenheimer & Go.
Inc„ subject to the recommendations of City staff and Springsted.
We are pleased to be of service to the City of Monticello.
Respectfully Submitted,
~ ,~'~
' , ~ e
~,
SPRINGSTED Incorporated
CMH
smc
Page 2
City of Monticello, Minnesota
Telecommunication Revenue Bands, Series 2008C
TERMS AND CONDITIONS
Dated Date: The dated date of the Bonds will be the settlement date which is estimated to be the first
week of June 2008.
Interest Due: Semi-annually each May 1 and November 1, projected to commence on
November 1, 2008.
Principal Due: Principal will be due annually each November 1. The Bonds will be repayable aver a term
of 23 years; principal repayment is expected to begin in 2013,
Redemption of Bonds: The Bonds will be subject to optional redemption after approximately ten years, with the
final optional redemption date determined on the day of sale.
In addition to optional redemption, the Bonds will also be subject to mandatory redemption
and extraordinary redemption if at any time the Project is damaged or partially destroyed
and the City does not choose to repair or replace the damage but chooses to redeem and
prepay the Bonds.
Rating: The City does not anticipate obtaining a credit rating for the Bonds.
Legal Opinion: To be provided by bond counsel; Faegre & Benson, LLP
Underwriter: Oppenheimer & Co. Inc.
Pricing and Award: The pricing of the Bonds is anticipated to occur May, 15, 2008. The City Council will
consider a resolution to award the Bonds on May 19, 2008,
Authority and Purpose: The Bonds are being issued pursuant to Minnesota Statutes, Chapter 475, at Trust
Indenture between the City and Wells Fargo Bank N.A., a voter referendum of the City held
on September 18, 2007 and the Resolution for the Bonds.
Settlement: Expected to be the first week of June 2008.
Security: The Bonds will be special, limited obligations of the City payable solely from net revenues
derived from the Project after payment of operation and maintenance costs, The Bonds
are not a general obligation pledge of the City.
The Bonds will be further secured by the establishment of a debt service reserve fund.
Bank Qualification; Since the par amount of the Bonds exceeds $10 million, the Bonds will not be designated
as bank qualified tax exempt obligations pursuant to Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended. The Bonds will not be subject to the alternative
minimum tax for individuals.
Page 3
Continuing Disclosure; The Issue is subject to the SEC's continuing disclosure requirements. The SEC rules
require the underwriter of the Bonds to undertake an annual update of its Official Statement
information and report any material events to the national repositories.
Arbitrage Compliance; All tax-exempt issues are subject to the federal arbitrage and rebate requirements that
require all excess earnings created by the financing be rebated to the U.S. Treasury. The
requirements generally cover two categories: bond proceeds and debt service funds.
There are exemptions from rebate that may apply in both of these categories.
A. Rebate
The proceeds of the Bonds are being used to finance construction expenditures which
could qualify for the 6 month, or 1$ month spending exception to rebate, The
18 month exception requires a certain percentage of the Bond proceeds be spent
within 6 month intervals. If the proceeds are spent in accordance with one of the
spending exceptions, the project fund will be exempt from rebate.
The spending exemptions ultimately rely on actual expenditures; therefore, if proceeds
are spent slower than anticipated, the City may not be eligible for the construction fund
rebate exemption.
Further, the debt service reserve fund will be subject to rebate for the life of the Bonds,
B. Yield Restriction
The City must maintain a bona fide debt service fund for the Bonds or be subject to
yield restriction. Yield restriction requires restricting the investment return in the debt
service fund to the yield on the Bonds. A bona fide debt service fund is a fund for
which there is an equal matching of revenue to debt service expense, with the fund
spent down each year to a carry over permitted equal to the greater of the investment
earnings in the fund during the prior year or 1 /12 the debt service of the prior year.
Additionally, all original proceeds of the Bonds and interest earnings on those
proceeds must be expended within three years, or the remaining proceeds will be
subject to yield restriction.
The City should monitor the project fund, the debt service fund and the debt service
reserve fund to insure yield restriction provisions of the federal arbitrage rules are met.
Official Statement: The Final Official Statement will be completed and available no more than seven business
days after the date of award of the Bonds.
Page 4
City of Monticello, Minnesota
Telecommunication Revenue Bonds
Monticello FiberNet Project
Series 2008C
SOURCES & USES
Dated 06/01 /2008 Delivered 06/01 /2008
SOURCES OF FUNDS
Par Amount of Bonds ........................................................................................ $22,445,000.00
Interest Earnings on Project Construction Fund ............................................ 138,564.60
TOTAL 50LTRCES .............................................................................................. $22,583,564.60
USES OF FUNDS
Deposit to Froject Construction Fund ............................................................. 14,058,490.00
Deposit to Capitalized Interest (CIF) Fund ..................................................... 3,964,074.35
Deposit to Debt Service Reserve Fund (DSRF) ................................................ 2,244,500.00
Working Capital ............................................................................................... 1,175,000.00
Capital Equipment ............................................................................................ 600,000.00
Total Underwriter's Discount (I,425%) ........................................................ 319,841.25
Costs of Issuance ............................................................................................... 220,000.00
Rounding Amount ............................................................................................ 1,659.00
TOTAL ITSES ...................................................................................................... $22,583,564.60
Oppenheimer & Co, loc. File = MONTICELLO - 4-9-OS.SF Monticello FiberNet - 4-9-08- SINGLh'P(lRPC7.5E'
Municipal Capital Markets Group 4/ 9/2008 LZI PM
`The par amount of the Bonds is subject to change prior to the day of sale hosed on final project costs and interest rtes.
Page 5
City of Monticello, Minnesota
Telecommunications Revenue Bonds, Series 2008C
Recommended Email Subject Line: Monticello MN
~~
S M T W Th F S
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
27 21 71 Zi ~1 25 Z6
27 ~ 29 3D
Nmi%woa
S M T W Th F S
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 2D 21 71 23 ~
25 26 27 ~ 29 30 31
-J ~ne~00 ~ ~Y
S M T W Th F S S M T W Th F S
1 2 3 4 5 6~ 7 ~~~ ~~ T 1 2 3 4 5
8 9 10 11 12 13 14 6 7 8 9 10 11 12
15 16 17 18 19 20 21 13 14 15 16 17 18 19
22 23 24 25 26 27 28 20 21 22 23 24 25 28
LL
29 30 27 28 29 30 31
Schedule of Events
Date Event and Descri tion Res onsible Pa
April 9, 2008 Update to feasibility model. CCG Consulting
April 9, 2008
.....
_ Fiber Optic Committee meeting. CCG Consulting
Springsted
Dain International
City Staff
.__.
_..__W..._._m.
April 10, 2008
. ...... -_
City Council Resolution authorizing the pricing of the Bond
Recommendations delivered to City. s and _
Faegre & Benson
Springsted
April 14, 2008 City Council will consider resolution authorizing the pricing of the
Bonds, City Staff
Oppenheimer
Springsted
April 25, 2008 Finalize and print Preliminary Official Statement. Best & Flanagan
Weeks of Pre-marketing of the Bonds, Oppenheimer will make calls to targeted Oppenheimer
April 25, 2008 and investors to determine interest in purchasing the Bands and feedback
May 5, 2008 on pricing and rates.
_
May 13, 2008 .
Pre-pricing of the Bonds. ~ ~__ City Staff
Oppenheimer
Conference call with Oppenheimer, City, and Springsted to discuss Springsted
the market conditions, proposed final pricing and interest rates on the
Bonds.
May 15, 2008 Pricing of the Bonds. Final pricing of the Bonds with final coupon City Staff
rates and reoffering yields. Oppenheimer
Springsted
May 19, 2008 City Council considers resolution awarding the sale of the Bonds to City Council
Oppenheimer and agrees to the final terms and conditions.
First Week of Settlement of the Bonds; City receipt of Bond proceeds. All Parties
June 2008
MONTICELLO INDUSTRIAL DEVELOPMENT COMMITTEE
Resolution No. 20-01
RESOLUTYON OF SUPPORT FOR FIBERNET MONTICELLO AND SUPPORT
FOR ISSUANCE OF TELECOMMUNICATIONS REVENUE BONDS, SERIES
2008C.
WHEREAS the City Council adopted Resolution No. 200$-16 on February 11, 2008, recognizing
the Monticello Industrial Development Committee; and
WHEREAS, the City of Monticello completed a Monticello Fiber Optics Feasibility Study and
Business Plan in September 18, 2006; and
WHEREAS, the City of Monticello conducted a community survey resulting in 66.3% of those
surveyed supported the City of Monticello providing telephone, Internet and cable TV services at a cost
savings of approximately 15% off existing prices; and
WHEREAS, the City of Monticello held a referendum on September 18, 2007, resulting in a 74%
approval by the residents for acity-wide awned and operated telephone exchange as part of the fiber
optics network; and
WHEREAS, the City of Monticello authorized and completed a RF Frequency Survey on the site
proposed for construction of the Head-In Building; and
WHEREAS, the City of Monticello hired Spectrum Engineering for design and engineering of the
fiber optic network; and
WHEREAS, the City Council members of the City of Monticello will consider appraval of the
Governance Ordinance at the April 14, 2008 Council meeting; and
WHEREAS, the City Council members of the City of Monticello will consider adoption of a
resolution calling far the Telecommunications Revenue Bonds, Series 2pp$C at the April 14, 2008
Council meeting.
NOW, THEREFORE, BE 1T RESOLVED that the Monticello Industrial Development Committee
supports FiberNet Monticello and supports the issuance of Telecommunication Revenue Bonds, Series
2008C.
Given the projected savings, increased Internet speed, and improved service of acity-wide
owned and operated fiber optics network.
2. Given the no home left behind philosophy of FiberNet Monticello.
3. Given consistent favorable results of the fiber optics surveys and telephone exchange
referendum.
4. Given the consistent assessment and conformity to the Fiber Optics Feasibility Study and
Business Flan.
5. Given the economic benefits of a city-wide fiber optics system in Monticello.
Adopted this 1 S` day of April, 2008, by the Members of the Monticello Industrial Development
Committee.
Mik Benedetto,lDC Chair
\ ch u
Ollie Koropchak,lDC Se tary
2
CITY OF MONTICELLO
RESOLUTION N0.2008-34
RESOLUTION CALLING FOR THE SALE OF
TELECOMMUNICATION REVENUE BONDS,
SERIES 2008C
BE IT RESOLVED, by the City Cauncil of the City of Monticello, Minnesota as
follows:
1. This Council deems it necessary and expedient that the City issue up to
$27,000,000 (27 million) in Telecommunications Revenue Bonds, Series 2008 (the "Bonds") to
provide financing for the City's broadband communications network. Springsted Incorporated,
the City's financial consultant, has advised that drafts of the fallowing documents have been
prepared: (a) Indenture of Trust between the City and Wells Fargo Sank, N.A., as Trustee,
setting forth the proposed terms of the Bonds; (b) Freliminary Official Statement pursuant to
which the Bonds maybe offered for sale; and (c) Bond Purchase Agreement between the City
and Oppenheimer & Co., Inc. (the "Underwriter") setting forth the terms and conditions under
which the Underwriter would be purchased.
2. Upon completion of the Preliminary Official Statement and its approval by the
City Administrator as being in near final form, the Underwriter, in cooperation with Springsted
Incorporated, is authorized to commence an offering of the Bonds and establish a proposed
pricing of the sale. This Cauncil shall meet on May 12, 200$ at 5 or 7 o'clock p.m. for the
purpose of considering the proposed terms of the sale and considering approval of the Bond
Furchase Agreement, the Indenture and other documents relating to the issuance and sale of the
Bonds.
3. The officers of the City and Springsted Incorporated are authorized to take such
actions and prepare such documents as maybe necessary and expedient for the bond sale, subject
to the final approval by this Council.
Adapted by the Monticello City Council this 14th day ofApri12008.
ATTEST:
Clint Herbst, Mayor
Jeff O'Neill, City Administrator
Council Agenda - 4/14/08
4. Consideration of ado tion of a overnance ordinance establishin a Telecommunications
Public Service Enterprise, FiberNet Monticello and associated Creation of an Avisorv
Board. (J.O., C.S.)
A. REFERENCE AND BACKGROUND:
The Monticello Fiber Optic Task Force is requesting that City Council adapt the proposed
governance ordinance establishing a Telecommunications Public Service Enterprise to be
known as FiberNet Monticello. This ordinance also establishes an Advisory Board to the
FiberNet Monticello entity. Adoption of the proposed ordinances establishes the membership
of the board, officers, pavers and duties. The establishment of a Telecommunications Public
Service Enterprise and its Advisory Board has been recommended by Oppenheimer, bond
underwriters; Springsted, project Financial Advisor; and Steven Rasholt, bond counsel.
In summarizing the role of the Advisory Board, it is being established to provide general
oversight and strategic management of the FiberNet Monticello enterprise. Through this
ordinance the Board will be allowed to operate within a budget set by Council. The Board will
focus an assisting the enterprise through input in development of policy and budget. The role
the Board will play relating to day to day operations is intended to be very limited.
Under this ordinance, the City Council remains responsible for major decision making with
input from the Advisory Board. The City Council reserves significant rights and powers to set
direction through adoption of the annual budget, approval of capital improvements,
establishment of rates and fees etc. Through this ordinance, the Board is given the authority to
operate within a budget set by the City Council.
Jeff O'Neill, Milda Hedblom from Dain International Services and City Attorney Jael Jamnick
will be present to explain the proposed ordinance and answer any questions.
B. ALTERNATIVE ACTIONS:
1. Approve the governance ordinance to establish a Telecommunications Public Service
Enterprise to be known as FiberNet Monticello.
2. Do not approve the ordinance at this time.
C. RECOMMENDATION:
Staff recommends approval of the ordinance establishing the FiberNetMonticello and
associated Advisory Board.
D. SUPPORTING DATA:
Governance Ordinance to establish a Telecommunications Public Service Enterprise to be
known as FiberNet Monticello
ORDINANCE NO.
CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
AN ORDINANCE ESTABLISHING A TELECOMMUNICATIONS
PUBLIC SERVICE ENTERPRISETO BE KNOWN AS FiberNet Monticello
THE CITY COUNCIL OF THE CITY OF MONTICELLO, MINNESOTA,
ORDAINS:
SECTION 1. Title 2 of the City Code of the City of Monticello is amended by adding
the following chapter.
CHAPTER 9
SECTION:
2-9-1. Findings and Purpose
2-9-2. Creation, Advisory Board Established
2-9-3. Officers and Meetings
2-9-4. Functions, Powers and Duties
2-9-5: General Manager
2-9-6. Reservation of Power
2-9-1: FINDINGS AND FURPOSE
Minnesota Statutes § 237.19 authorizes the City to own and operate a telephone
exchange and to provide municipal telecommunications services following a
referendum within the City. The City conducted the required referendum and
more than the statutorily prescribed 65 percent of those voting thereon voted in
favor of proceeding, Based on all information to date, the City Council hereby
finds that the establishment of FiberNet Monticello is in the best interests of the
City. The City Council further finds that it is in the best interests of the City to
create an advisory board to guide the management of FiberNet Monticello.
2-9-2. CREATION, ADVISORY BOARD ESTABLISHED:
(A) A municipal telecommunications services enterprise to be known
as FiberNet Monticello is hereby created and established. FiberNet
Monticello shall have an Advisory Board composed of five (S)
voting members to be appointed by the Mayor and the City
Council.
136893v05 1
(B) Two of the voting members shall be members of the City Council
(one of which could be the Mayor). The terms of appointment
shall coincide with their elected terms of office and appointments
to replace any member whose term is expiring or otherwise vacant
may be made from any member of the Council.
(C) The remaining three (3) voting members shall be appointed and
shall serve staggered terms. Those initially appointed shall serve
for two years, three years and four years respectively. Thereafter,
all members shall be appointed for five year terms, except for any
person appointed to fill a vacancy occurring prior to the expiration
of the term to which his/her predecessor had been appointed shall
be appointed only for the remainder of such term.
(D) All voting members shall serve at the pleasure of the City Council.
Vacancies shall be filled by appointment by the Mayor and the
City Council. Upon the expiration of his/her term of office, the
member shall continue to serve until his/her successor is appointed
and qualified.
(E) The City Administrator of the City of Monticello and the General
Manager of FiberNet Monticello shall be non-voting members of
the Advisory Board.
2-9-3: OFFICERS AND MEETINGS
(A) The Advisory Board shall have the offices of President and Vice
President. The President shall be the Mayor, or if the Mayor is not
serving, the President shall be a member of the City Council and
designated by appointment of the Mayor and the City Council.
The Vice President shall be elected by the members from the
remaining members.
(B) The Advisory Board shall adopt bylaws with rules and procedures
not inconsistent with the provisions of this ordinance as maybe
necessary for the proper execution and conduct of its business.
(C) The Advisory Board shall meet at least monthly. Special meetings
maybe called by the President as needed.
2-9-4: FUNCTIONS, POWERS AND DUTIES
(A) The Advisory Board shall have the powers granted to it by the City
Council under this Ordinance and as otherwise delegated by action
of the City Council.
L36893v05 2
(B) The Advisory Board shall have the authority to provide general
oversight and strategic management far the FiberNet Monticello
Enterprise Fund (the Fund). The Advisory Board shall insure that
the Fund meets City requirements and Minnesota Statutory
requirements for financial management and reporting.
(C) The Advisory Board shall have the authority to govern FiberNet
Monticello within the boundaries established in the annual budget
as approved by the City Council. The Advisory Board shall make
an annual budget recommendation to the City Council.
(D) The City Council shall make available to the Advisory Board such
appropriations as it deems fit for salaries, fees, and expenses
necessary in the conduct of its work. The Advisory Board shall
have the authority to approve and direct the expenditure of all
budgeted sums as appropriated and consistent with. state law, in
particular M.S. Section 412.271, Subd. 8.
2-9-5: GENERAL MANAGER
(A) The City Council shall appoint a General Manager for FiberNet
Monticello, and hire or assign such staff or consultants or
contractors as it deems necessary for the efficient operations of
FiberNet Monticello and the City.
(B) The General Manager shall be responsible for the administration
and management of FiberNet Monticello.
(C) The General Manager shall provide reports to the Advisory Board
at its regular meetings and an annual report to the City Council
accurately describing the activities and financial condition of
FiberNet Monticello.
(D) The General Manager shall maintain contact with the City
Administrator as necessary to coordinate activities.
2-9-6: RESERVATION OF POWERS
(A) Except as delegated by this Ordinance, and subject to amendment
of this Ordinance, the City Council reserves its rights and powers
regarding FiberNet Monticello, including but not limited to the
power to (1) adopt the annual budget, (2) approve capital
improvements, (3) review rates and fees, (4) approve potential
expansions of the service area of FiberNet Monticello, and (5)
ratify hiring and firing.
136893v05
SECTION 2. EFFECTIVE DATE. This ordinance shall be effective upon its passage
and publication.
ADOPTED by the Monticello City Council this _ day of , 2008.
CITY OF MONTICELLO
By:
Clint Herbst, Mayor
ATTEST:
Jeff O'Neill, City Administrator
136893v05 4