Title
RESOLUTION AUTHORIZING PROPER CITY OFFICIALS TO CREATE A DEDICATED BROADBAND INTERNET ENTERPRISE FUND AND AUTHORIZE THE TRANSFER OF $1,000,000 OF CITY’S AMERICAN RESCUE PLAN ACT FUNDS INTO SAID BROADBAND INTERNET FUND.
Body
CITY PROPOSAL:
WHEREAS, the Duluth city council approved the city of Duluth’s Digital Access Master
Plan on July 18, 2022 via resolution 22-0575R; and
WHEREAS, the Duluth city council authorized an application to the State of Minnesota
Department of Employment and Economic Development (DEED) Office of Broadband Development for a Broadband Development Grant in support of the Duluth Pilot Project in the Lincoln Park neighborhood on July 18, 2022 via resolution 22-0577R; and
WHEREAS, the Duluth city council approved the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds and Identifying Eligible Priorities Plan for the City of Duluth on July 19, 2021 via resolution 21-0515R; and
RESOLVED, that the proper city officials are hereby authorized to and shall create a dedicated broadband internet enterprise fund no. 537; and
RESOLVED FURTHER, that the proper city officials are hereby authorized to and shall transfer $1,000,000 dollars of the city’s ARPA funds from city fund no. 226-125-5009-6901-5700 into city broadband internet enterprise fund no. 537.
Statement of Purpose
STATEMENT OF PURPOSE: The City of Duluth’s Digital Access Master Plan includes the recommendation to implement an internet “Fiber To The Premise” (FTTP) pilot project in the Lincoln Park Neighborhood (defined largely by the boundary of Census Tract #156). The Lincoln Park Pilot Project will establish a City-owned fiber network that designed to serve city facilities (thereby resulting in efficiencies to internal City of Duluth operations) as well as provide an open access platform to improve market competition for internet service providers (ISP’s) that choose to provide internet broadband services to our residents.
The Lincoln Park Pilot Project will leverage our strategic partnership with Northeast Service Cooperative (NESC), an existing fiber infrastructure backbone and middle-mile bulk service fiber provider. The City-owned public infrastructure will provide a FTTP solution for multi-family housing residents, single family home owners, commercial businesses, as well as community non-profit organizations. The goal is to construct, operate and maintain approximately 960 fiber access points that can serve up to 1,900 customers.
The Governmental Accounting Standards Board (GASB) describes enterprise funds in its Codification of Governmental Accounting and Financial Reporting Standards. It states that enterprise funds may be used “[t]o report any activity for which a fee is charged to external
users for goods or services.”
Enterprise funds are established with the general goal that fees and service charges should cover the costs of an enterprise fund activity, including capital costs (such as depreciation or debt service), rather than with taxes or similar revenues.
The broadband enterprise fund is needed now to support the ongoing development and refinement of the pilot project’s operating and capital costs as well as providing community education and outreach to gauge the potential subscriber interest. We anticipate seeking Council approval to proceed with the pilot project in early 2023.