Council secures broadband financing
Revenue from new utility will pay off debt
The money needed to build a municipal broadband system was borrowed by the Fort Dodge City Council Monday.
Construction of the system, which will be capable of bringing fiber optic cable to every address in the city, is expected to start next summer.
The City Council on Monday voted to borrow $33,355,000 from a group of financial institutions led by Bank Iowa in Humboldt. That money will pay for the materials and construction of the system.
The other financial institutions involved are United Bank of Iowa, Fort Dodge; Green State Credit Union, Fort Dodge; First State Bank, Fort Dodge; Great Western Bank, Fort Dodge; Security Savings Bank, Gowrie; and Cedar Rapids Bank & Trust.
Interest rates on the loan range from 2.75 percent to 5.25 percent.
An additional $3,480,000 is being borrowed from Peoples Credit Union, of Fort Dodge, to pay for the initial operating costs of the system.
Interest rates on that loan range from 3.5 percent to 5.25 percent.
Both loans will be paid off with revenue from the broadband system.
”The loan agreement will be payable solely and only from the net revenues of the municipal telecommunication utility of the city,” Ryan Maehl, the assistant to the city manager, wrote in a report to the council.
Councilman Andy Fritz was absent from the otherwise unanimous vote on the loans.
The drive to create a municipal broadband utility began in November 2019 with a referendum on giving the local government the authority to establish one. That referendum measure was approved, with 71.6 percent voting yes.
More than a year of meetings and planning followed that vote.
In July the council moved from planning to implementing.
That month it approved the procedural steps needed to launch the process that resulted in Monday’s borrowing.
In July the council also hired Howard R. Green Co., of Cedar Rapids, to prepare the final plans for the system at a cost of $1,717,243.
The council also set these prices for service:
• $75 a month for residential service with upload and download speeds of up to 100 megabits per second.
• $95 a month for residential service with upload and download speeds of up to 1,000 megabits per second
• $20 per phone line per month for residential phone service
• $100 a month for business service with upload and download speeds of up to 100 megabits per second
• $250 a month for business service with upload and download speeds of up to 250 megabits per second
• $500 a month for business service with upload and download speeds of up to 1,000 megabits per second
• $75 per month per phone line for business phone service.