The Chanute City Commission unanimously voted to issue $19 million in revenue bonds to finance its Fiber to The Home project in its meeting on Monday night, after listening to several city residents voice vigorous objections to the plan. These opponents of the project asked pointed questions about its funding and requested that the fiber plan be put up to a public vote.
Several local supporters of the fiber plan were also present, expressing how having high-speed internet fiber would help their businesses.
Last week, Chanute’s controversial fiber plan was given official approval by the Kansas Corporation Commission, which freed up the Commission to issue these bonds for the long-proposed project.
Mayor Greg Woodyard said that the plan was a way to keep both money and vibrant young professional people in the community, and to create jobs by giving companies an incentive to move and stay in Chanute. He pointed out that the population of Chanute has been gradually declining, and pointed to fiber as a way to reverse that trend.
Commissioner Kevin Berthot pointed out that the city has been planning a fiber project since 1984, and the city has been growing its use of fiber throughout the last 30 years.
“This isn’t something that’s suddenly getting shoved down citizens’ throats,” Berthot said.
Commissioner Tim Egner compared the public outcry about the fiber plan to similar objections that were initially raised about electric power when it was first proposed to the community.
Both critics and supporters of the plan expressed their views during the public comment portion of the meeting.
Chanute resident Bernie Neyer started his remarks by arguing with Commissioner Jim Chappell about the ownership of baseball fields in Derby, before accusing the Commission of not having respect for the population. Neyer said that people in the community want a vote on the fiber plan.
“We voted on the school, we voted on the pool,” Neyer said. “We should have the chance to vote on this as well.”
Neyer closed his initial remarks by submitting a petition to join the growing field of candidates in the upcoming election for City Commission.
Other speakers echoed this call to let the public directly vote on the merits of this plan, including Scott McKinney and Thayer resident Andrew Roberts.
Woodyard resisted these calls to put this plan before a direct public vote, explaining that the scare tactics engaged in by critics of fiber would prevent many local voters from understanding it.
“It will never get to this community, unless it is brought in as a utility like we’re doing,” Woodyard said.
Woodyard also explained that commissioners are elected to make decisions that are in the best interest of local citizens, especially as far as economic development is concerned.
After making the unchallenged observation in this meeting that “Sometimes two plus two doesn’t always equal four,” former City Commissioner Tim Fairchild also endorsed the idea that commissioners should be engaging in a thorough dialogue with the public before making this decision. Fairchild, who is running for one of the three open Commission seats in the next election, charged that the debt incurred in the early stages of the fiber plan would end up being added to the electric debt already owed by the city.
Fairchild criticized Commissioners for not knowing how much it would cost to extend the fiber two blocks from where it currently serves.
“No one seems to know how much this is going to cost,” Fairchild said.
Woodyard replied to this by saying that if the city maintains a 40 percent take-rate for this service, it will pay for itself in 12 years. He said these 20-year bonds will provide the city with a cushion to make sure this project does pay for itself.
Eventually, according to Woodyard, the resulting utility funds would be used to operate Chanute, making the city’s collection of mill levies unnecessary.
Fairchild said he belonged to a significant portion of the community that had concerns about the fiber plan. He then told commissioners that if they engaged voters and convinced them to support the project, Chanute could be energized around the project.
Fairchild predicted that, for now, the city wouldn’t be able to sell enough bonds, because of the risk factors and unknowns involved.
Phil Chaney, another former commissioner who is running in the next election, charged that all Chanute residents will end up paying for fiber through additional meter charges.
Mikel Kline, the project manager of the Sega Group that is overseeing this fiber project, answered that all utility meters in the city are eventually going to have to be replaced by smart meters whether or not the city goes through with its fiber plan.
Chaney also made pointed remarks about how much debt the city’s electric utility is currently in, as it is currently losing $400,000 a year. He wondered about the effect that adding $19 million to that to pay for internet fiber was going to have. He then asked a series of questions about the true costs of fiber, the feasibility of delivering it for $40 a month, how much money work on it and maintenance would require, and how fast it would really be if a good portion of the community was using it. Chaney said he was not used to city services and commercial enterprises having fiber, but said that the city’s model doesn’t work when it comes to providing it to homes for $40 a month.
“People my age aren’t going to move back to this area just because of fiber,” Chaney said. “People should ask if we are really looking at the true numbers for this project, and this issue should be put to a vote.”
Chaney also made reference to recent statements made by Woodyard about how the city’s current debt is caused by decisions made by past commissions.
“If you’re worried about past commissions sending us into debt, with $19 million, some future commission is going to have to pay that off. too,” Chaney said.
Chanute native Clete Hudson was among those vocally supportive of the fiber plan, as he outlined the various ways it would help his Kansas Communication Service business. He told the commissioners that he was impressed with what they have accomplished in this area.
“What you’re doing is putting Chanute on the map,” Hudson said.
Lori Vandervoort was one of the beta-testers who received this high-speed internet at her home to help with her Strategic Support Systems business. She read aloud a letter she wrote to the city about how much the Internet has helped her in this capacity, stating that she has received “impressively fast service” with virtually no interruption. The service was so good that Vandervoort opted to do away with landline phones, which will allow her to employ more people with technical expertise in the future.
David Orr gave some history of the early attempts to install electricity into Chanute, and talked about how fiber would allow him to keep his Magnatech company here in this community.
Karen Jarrett, the IT director for Monarch, has been a major proponent of this type of program. She answered claims made by some of this plan’s critics that this technology will quickly be outdated by pointing out that some schools are still reliably using fiber that was installed 18 years ago.
Chanute resident Steve Kubler said he has to be available online in his work. Even though he wishes to stay here in Chanute, where he’s lived since 1969, Kubler said he may soon have to leave and go to a place where he can better conduct webinars. However, the fiber plan would give him the ability to live where he wants.
Kline said the city would soon be applying for funds from the FCC Connect America program, which was set up to bring internet connectivity to underserved rural areas. The city has been asked by the FCC to submit additional documentation to this program, which wouldn’t pay upfront cash for this project. However, Kline said these funds would provide ongoing cost support for the fiber project. The initial decision to approve these funds could be made as early as March of 2015, and the funds would be awarded mid-summer of next year.
The commission also voted 4-0 at this meeting to pay $2,500 for a structural engineer to do a second study of the western wall of both Mel’s Southside Tavern and the Total Image photo studio in downtown Chanute. Woodyard abstained on voting on the issue.
This will be the second engineering study done on this wall, after the first engineering study found that the wall was damaged and will ultimately find down at some point. The price of either repairing the wall or doing a demolition of the buildings has been found to cost more money than either of these properties are ultimately worth.
Still, Chappell has expressed his desire to see these buildings saved. Main Street Chanute Director Ruthann Boatright also made a statement at this meeting, saying that unique structures such as this are part of what makes communities prosper. She endorsed repairing this wall.
These issues will be among the topics of conversation discussed at the next Coffee with the Commissioners, which will be held on Saturday, January 3 at 9 a.m. at the Fire Escape Coffeehouse.
In other action in Monday’s meeting, the commissioners:
• Passed a budget amendment 5-0, with no public objections.
• Voted 5-0 to declare the area along 35th Street across from the high school as a Commercial Improvement District. It was emphasized that this vote did not obligate the city to pay for utilities and roads going out to this area; it is only part of the effort to attract a hotel and other commercial properties to this area.
• Unanimously approved the repair of a High Service River Intake Pump.
• Declared properties at 219 S. Wilson and 511 N. Central to be in violation of Chanute Municipal Code with a 5-0 vote.
• Approved a consent agenda 5-0, that included a request to extend the closing hour of the Central Park Pavilion for New Year’s Eve dance and breakfast.