The City of Sturgeon Bay has agreed to front the cost to provide high-speed internet to 16 heavily wooded, privately owned properties on Canal Lane, half of which are currently improved. Property owners would then reimburse the city for the costs.
The property owners approached the city in the fall asking for assistance in obtaining high-speed wired internet service. Satellite and cellular services are available but are unreliable or inadequate in the heavily wooded area.
There was no discussion Feb. 2 when the council decided to proceed by approving the agreements that would need to be signed by each property owner. The item was on the city’s consent agenda, where numerous items are approved with one motion at the beginning of the meeting.
“Given the importance of reliable high-speed internet for education, business, community growth and development, it is reasonable that the city finance the project for the property owners, and also reasonable that the city be reimbursed for the full cost of the project,” said Josh VanLieshout, Sturgeon Bay city administrator, in a memo to the council.
VanLieshout said Monday that Charter has estimated the project will cost $25,800. The property owners would repay the city over a period of six years at an interest rate of 1 percent over the prime rate as published in the Wall Street Journal each Jan. 1. The unimproved properties could defer payment for six years.
Adding administrative fees and legal costs to draft the agreements, VanLieshout said the homeowners would likely be charged $2,000 per lot, or $350 annually over the course of six years.
The money to finance the project would come from the Charter cable-television franchise fees paid by cable users that fund the city’s public-access television programming.
“Over the years, we’ve accumulated some excess funding that we’re going to use to provide the financing for this project,” VanLieshout said.
The use of public funds for private benefit – such as for roads and utility improvements – are usually paid in part by benefiting property owners in the form of special assessments. In this case, special assessments are not an option because the internet service would not be considered a public improvement, VanLieshout said.
The agreements, then, must be signed by every property owner in order for the project to proceed. VanLieshout said the city is anticipating unanimous agreement.
Once the private agreements are obtained, the city would enter into an agreement with Charter to install, own, operate and maintain the necessary infrastructure and bill the city for the improvements.
“The next thing that would come and be approved [by the council] would be the actual invoice for the cable,” VanLieshout said. “Then it’s off to the races.”
The model works for the city, VanLieshout said, because it has the funds available and the neighborhood is in agreement.
“If there were a couple property owners who were dug in, it would be a lot more difficult to make this happen,” he said.