Citizen Harry: Questions and answers regarding Edmonds’ fiber optic system

Harry Gatjens

The Citizens’ Technology Advisory Committee (CTAC) met again on Tuesday, Aug. 10, to review questions and refine the presentation that the committee will make to the City Council on Aug. 24. This was my second CTAC meeting, and it drew a smaller crowd than the previous one, with a few committee members absent and not too many in the audience.

We reviewed a marvelous white paper that committee member Darrol Haug had prepared in order to fine tune the points that we would present to the City Council. Darrol’s paper covers the history of the project from its inception to now, and also touches on the studies that have been undertaken by the committee and their results. It addresses key questions that Edmonds residents are asking, as well as other topics about which we should all know. And it includes financial results and projections for the near future.

The final paper will be presented in full at the Aug. 24 meeting, and a copy will be available on My Edmonds News. I will include a few questions and answers to give readers a preview of what to expect:

A question that has been asked is whether it against the State Constitution to operate this fiber as a utility and make a profit? Are utilities only allowed to cover their costs?

The City won a summary judgment in court that allows it to sell fiber services to other entities. This sale of services need not be a utility but could also be configured as an Enterprise Operation that can indeed sell services at a profit, thus allowing the surplus collected to contribute to the general fund and reducing the potential for tax increase for citizens.

Has all the money spent to date been on legal fees?

To date, $492,00 has been spent. Of this, $94,000 has been spent on legal fees: $62,000 on the initial ruling and the remainder on an appeal. Also, the City of Seattle is sharing on the appeal costs and is already paying $20,245 of those costs.

The remainder of the money has been spent on equipment, consultants and ongoing fiber-optic usage and maintenance.

The City has already gained savings and revenue totaling $107,595 making the net investment $385,000 to date.  Continued savings (after covering continuing costs) are about $97,000 annually. So, even if the project is never further developed than it is now, the investment will turn positive by mid-2014.

What can the City’s fiber optic system do to spur economic development in the City?

The use of an open-access broadband fiber-optic system with significant capacity has the ability to attract a diverse range of customers and enhance the effectiveness of existing businesses. An example is the medical community, which is increasingly using broadband to transmit images/data and communicate between departments, hospitals, patients, etc.

Smaller high-tech companies may also be attracted to locate in Edmonds due to the availability of fiber-optic capacity. The Port of Edmonds may find it easier to attract more tenants/user groups to its future Harbor Square development. Serving the existing commercial nodes and corridors within the City with a fiber-optic system will add to the attractiveness of each area and potentially help to diversify the City’s business community and tax base.

In other words, when business interests are shopping for a location, Edmonds has the potential to become more competitive than other cities in the area, because our advanced fiber-optic network could support important business needs.

Much like water, sewer and transportation facilities, high-capacity access has become a base requirement for many businesses and other users.

There is much more in the presentation. This excerpt is just to whet your appetite and encourage you to give your attention to the full presentation on August 24 so that afterward, you’ll feel fully informed.

The next meeting of the Citizens Technology Advisory Committee is scheduled for Thursday, Sept. 9, at 8:30 a.m. in Edmonds City Hall. All citizens are welcome to attend.

“Citizen Harry” is Harry Gatjens, My Edmonds News’ own citizen reporter who writes about important issues facing Edmonds residents. Read his report on the first CTAC meeting here and also his recap of involvement with the 2010 Citizens Levy Committee here.

  1. Thanks for attending the CTAC meetings Harry. CTAC is working hard to get each and every fact out to the public. There is nothing to hide. The fiber project is a good example of citizen involvement to help the City. If you look at the project like one would look at any business project this is what you find. We borrowed $600,000 to launch the project.(This is the budget approved by the City Council to date) We have spent less than $500,000. (Nice to see a City project under running its budget) We have paid back more than $100,000.(Pretty good dividend in today’s market. That makes the current investment in the fiber project around $400,000.) And using standard accounting principles for a regular business we are making a profit in 2010. As you reported, the current savings and revenues are about $100,000 per year even if we do nothing more to enhance the savings and revenues. So in round numbers we are making $100,000 per year on what remains as a $400,000 investment. That’s a return of 25%. Not bad.(Now that’s a $GREEN$ return for a city that want to be the Greenest in the state.) When we are all on the same page about the fiber project the next questions I hear are what can be done to increase the savings and revenues from our investment in fiber?

    As the Levy Committee works on the issues of raising more revenue for the general fund, the fiber project is already making a contribution to reduced the future taxes. Let’s figure out some ways to do more and reduce the pressures on a tax increase. Hopefully now that the public is fully informed they will urge the Council to move forward.

    The Economic Development Commission is charged with an number of issues to enhance economic development in Edmonds. At their urging the Council Pass Resolution 1224 in mid March to advance 7 key issues in town. The fiber project is one of the issues the Council has endorsed. Since March the EDC has worked had to pave the way for even more success with the fiber project. They have generated a marketing strategy that has been review and approved by all impacted staff functions and the Mayors office. Finance, Public Works, and Community Services have all concurred on the approach suggested by the EDC. Now with the support of the public and the Council the fiber project can work to make Edmonds $Green$.
    Darrol Haug

  2. Linda, our goal as citizen volunteers has for the past 5 years to understand the complex and exciting opportunity Edmonds has with its fiber network. The full white paper showing a complete accounting of the history, costs, savings, and future will be posted on the City web site later this week when the council packets are prepared. Just go to the city site, Council, Agenda and you will see the topic listed and you can review the complete account for this project. The attempt is to write the paper in a way that all folk will understand.

  3. Great Report Harry! Any one who would like to see the white paper and all the other docs prepared for the council can go to the city web site. Just navigate to City Government, City Council and under Council select Agenda. Then select Aug 24. There you will find all the docs prepared for the council including the resolution that both the CTAC group and the Economic Development Committee have jointly prepared. Moving this project along will help offset the size of any future levy we may need to fill the budget gaps.

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