Fort Collins, Larimer County, Municipal Broadband, Original Report, Sherrie Peif

Fort Collins council fails to address Connexion’s flailing finances; focuses on positive public messaging

FORT COLLINS — Fort Collins City Council members appear to have few concerns over the continuing revenue and cash flow losses of the city’s municipal broadband effort, Connexion.  Rather, city officials seem most concerned about setting a narrative to continue selling the idea to the public.

At a Tuesday city council work session to update the state of the project, Connexion officials, the city manager and the council focused heavily on how they could change a growing wave of discontent among residents for the multi-million dollar venture that has yet to show progress.

In 2015, Fort Collins voters passed an initiative that allowed city government to explore the idea of municipal broadband development. In late 2017, voters approved a $150 million bond to begin developing the infrastructure needed to deliver 1GB internet service to all Fort Collins residents. And in late 2018 construction began.

But it hasn’t been easy. Connexion has been in the red financially since it began rolling out the new service in 2019. It has yet to hit budget on its operating revenues with continual losses including a $376,000 shortfall in the first quarter, a $1.6 million shortfall in the second quarter, and nearly $3 million below budget for third quarter.

Some who initially supported the enterprise fund venture are now critical of the city and its lack of transparency about the newly developed department and its ongoing money woes.

Additionally, Fort Collins has been facing numerous complaints for damages to sewer lines, sprinkler systems and landscaping, among other things. A Colorado Open Records Request of complaints obtained by Complete Colorado through a third party, shows thousands of dollars being paid to outside contractors to replace or repair the damage.

Complete Colorado has been following issues with municipal broadband ventures across Colorado for the past two years, including in Fort Collins, Greeley, Loveland and Longmont, as well as reporting on how municipal broadband systems are failing nationwide.

Wade Troxell

At Tuesday’s meeting, however, the focus was on how to change the narrative of “certain media that continue to speculate,” according to Mayor Wade Troxell, who added that speculation was all “untrue” without offering any data or evidence to the contrary. In fact, there was little to no conversation at any time during the meeting about Connexion’s financial viability.

Connexion will need to pay back about $245 million in debt, including interest, amounting to about 30 percent of the Fort Collins residents needing to subscribe to break even. If Connexion fails — or even slows considerably so that payback cannot be made through subscriber revenue — electricity customers will be forced to pay back the debt via increased electric rates, regardless of whether they were broadband subscribers.

Connexion executive director Colman Keane spent the first 30 minutes painting a positive picture of the rollout to date, starting with a graphic that shows construction ahead of forecast with about 60 percent of the construction process “completed.” However, another slide differentiated “completed” from “in process,” leaving only 17 percent (60 areas out of 357 total areas to be developed) actually “completed.” Another 42 percent is under construction while another 41 percent awaits a start date. Keane said of the nearly 5 million feet of fiber projected to be used, to date, 1.4 million feet (or 28 percent) of fiber is in place.

However, construction timelines to finish the remainder of the project are only estimates, and if everything goes as planned, officials expect full build out to be completed by the end of 2022.

“We need to lay 6 miles per week (to reach that deadline),” Keane said. “We’ve been averaging eight, but as we hit the winter months, we may start to back off a little bit.”

Keane told city council members that from the time residents receive a door hanger from Connexion announcing its arrival, it is about 9 months before availability. Keane said anyone without a door hanger right now is safe signing a year-long contract with another provider.

Ross Cunniff

City Councilman Ross Cunniff pointed out mistakes in the numbers and tried to find an easier way to understand the charts and graphs. He said officials need to remember they are “trying to tell a story.”

“The story we’re trying to tell is how we are progressing towards (sic) our ultimate goal in chart form,” Cunniff said. “We need to continue to iterate on these begin to give citizens the confidence that we are looking towards (sic) having everything in place to be built out when we said we would be built out.”

The city continues to blame delays on construction issues beyond their control, weather, and COVID-19. They also remain mum on when they will be in what areas of town, but Cunniff offered “clues” for how people might know it’s coming soon to their neighborhoods.

“When the truck shows up in their neighborhood with conduit and the boring machine shows up, on average, it’s about nine months, maybe faster, maybe slower,” Cunniff said, adding it is very exciting, but that the city needs to continue to improve its narrative.

“I think the technical work behind this is sound,” Cunniff said, referring to Connexion’s viability. “All the numbers I’ve seen shows that we are on track and could in fact exceed it, although I am personally not willing to bet my life on it, but it feels like we’re poised for success.”

One thing that was discussed in the meeting was what the cost of Connexion’s digital divide program would be. Officials believe the program would help close the technology gap among low-income residents. That cost is currently being discussed at $19.95 per month for 1 GB service. Comcast and Century Link both have programs to meet the needs of low-income residents as well.

All the programs have different qualifying requirements.  As originally announced, residents would need to qualify for L.E.A.P. (Low-income Energy Assistance Program) to qualify for the lower broadband rate through Connexion. Officials said it is likely to not become available for 6 months to a year.

Emily Gorgol

Only one city council member, Emily Gorgol, requested additional information pertaining to budgets and financial forecasts in the future.

“I think a resident is confused when they look at that,” Gorgol said about the multiple graphs showing fiber completion. “I think people really want to know how many people are connected. … So how do we tell the story about if we’re on track? So maybe next time talking about budget and forecast and what we’re expecting might help. I think being able to tell that story might help council members as well.”

Troxell tried to reassure everyone that the enterprise is on track, but again offered no data or proof, only his own speculation from what he called “deeper conversations.” Those conversations are likely from part of a series of executive sessions the city continues to hold to discuss the financials and other important information outside the public’s view.

Cunniff argued the data being made public is better.

“We need to figure out a way to present as much data as we can that shows what it is we’re doing,” Cunniff said. “I think the public wants to have confidence. I just don’t think the public has enough information about whether they can be confident. … Maybe create something in real time so that people can see their investment in Connexion is going to pay off.”

 

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