Wednesday, June 2, 2004
INDEPENDENCE -- Independence officials took another step in the quest to begin the ambitious second-phase of MINET.
The city council unanimously approved May 25 its half of an intergovernmental agreement that would allow Independence and Monmouth to form a separate legal entity to manage the proposed residential broadband utility.
"This was a big step toward our goal of trying to increase the livability for people in the Monmouth and Independence communities," City Manager Greg Ellis said.
Independence's authorization of the agreement is only one of several steps needed before the MINET expansion -- running fiber optic line past every home in the two cities, and acting as an Internet, telephone and cable TV provider -- can begin.
The Monmouth City Council still needs to vote on its end of the agreement, which could happen later this month. Both cities would then need to hold public hearings and vote whether or not to issue the revenue bonds needed to expand the network.
"We finished the first phase of MINET, now we need to move on to the next," Councilor Jim Kirkendall said.
"It's something both cities need," he said. "I think a lot of people aren't happy with their current providers."
As outlined in the agreement, allowable under Oregon statute, MINET would technically operate independent of both cities, and would be governed by its own board of directors.
That group would include the city manager, a council member and a citizen from each town.
Duties of the board would range from establishing subscription rates for telephone, cable and Internet services to hiring personnel, and acquiring and disposing of property.
"It's basically an extension of the governing bodies of both cities that will have an authority of its own," Ellis said.
The agreement also specifies some of the financial aspects of operating the system.
MINET would pay each city, based on gross revenue and customer location, a franchise fee of 7 percent for telephone service and 5 percent for cable or Internet.
Half of any revenue surplus will be paid to Monmouth and Independence based on the amount of revenue received per city during the fiscal year. The remainder will go toward incurred debt for expanding MINET.
One change officials made to the agreement from earlier planning is the strategy for acquiring the $8 million to $10 million in revenue bonds from the Oregon Bond Bank to do the fiber-to-home build, which will ultimately be paid off with subscriber fees.
Monmouth City Manager Jeff Hecksel said he recently learned that the cities could pursue funding for MINET separately. According to the agreement, each city's requirement would be based on its respective population.
The original plan called for Monmouth to secure the bonds; Independence would have been indebted for its portion to Monmouth.
"It makes more sense for each city to obligate itself to the state, rather than one to the state and the other to the other city," Hecksel said.