Financing prepared for Fort Dodge broadband utility
About $37M secured
The city of Fort Dodge has secured about $37 million in financing to pay for the construction of the new municipal broadband utility.
Construction of the new fiber optic system is expected to begin in the summer of 2022.
A loan of up to $33.355 million has been secured from a group of area banks, according to Ryan Maehl, assistant to the city manager.
That group of financial institutions is led by Bank Iowa in Humboldt. It includes 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.
That money will be used for purchasing equipment and constructing the system.
An additional $3.48 million is being borrowed from Peoples Credit Union, of Fort Dodge, to pay for initial operating costs.
All that debt will be paid off with revenue generated by the broadband system. No property tax money will be used.
”The support of seven local participating lenders, including both lead institutions, demonstrates the strong institutional support of the city’s planned project and an indication of the city staff and council’s detailed business planning efforts to date,” Maehl said in a written statement.
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 studies followed that vote.
On July 12, the City Council took the first steps toward actually building a broadband system. It passed a resolution to start the process of borrowing the roughly $37 million.
It also hired Howard R. Green Co., of Cedar Rapids, to prepare the final detailed plans for the system at a cost of $1,717,243.
Lastly, the council set the prices that customers will pay for broadband services. The pricing plan includes different levels for residential and business customers, depending on the type of service they sign up for.
Residential customers who want upload and download speeds of up to 100 megabits per second would pay $75 a month.
Residents who want upload and download speeds of up to 1,000 megabits per second would pay $95 a month.
Residential phone service would be available for $20 per month per phone line.
Business customers that want upload and download speeds of up to 100 megabits per second would pay $100 a month.
Businesses that want upload and download speeds of up to 250 megabits per second would pay $250 a month.
Businesses that want upload and download speeds of up to 1,000 megabits per second would pay $500 per month.
Telephone service for businesses would be $75 per month for each phone line.