Conversations
Reporting on two conversations from the past week:
Skate Park
A successful Orem businessman, explaining to me why he is considering a move to American Fork, described our skate park in glowing terms. No, the landscaping is not yet complete, and there's still the wrought-iron fencing to be installed, and yes, we did promise road improvements which we have not yet delivered. But on the plus side, this gentleman agrees with his teenage son that American Fork's course is unquestionably the most challenging and therefore the most fun of any of the skate parks around. But the icing on the cake, he says, is the kids. If you frequent the Orem skate park, he says, you're going to catch an earful of grime. But these American Fork kids -- they're as good as they get.
Broadband
Another businessman, this week, tried to persuade me that our City broadband need not operate on a business model. By this he meant that it is permissible for the City to operate in a perpetual loss position. Why? Because there's a benefit to the residents. City government, by this logic, justifies the annual loss of more than $1 million because there is a benefit to the residents.
It is true that the City operates several money-consuming assets which are wholly subsidized by the taxpayer. The library, City streets, and parks come to mind. That's our job, this gentleman says. We provide services that benefit residents.
True, I say, but there's a twist. Our real job is to manage the taxpayer's money.
City government is not the father who earns and doles out money to his children as he sees fit. City government is more the co-op of residents who pool their money to provide services of their own choosing. The City Council is elected to collect and manage the taxpayer's money prudently and according to the taxpayer's wishes.
Prudent money management dictates that enterprise funds -- funds such as water, sewer, and broadband, which have revenue streams attached -- recover their costs through their revenues.
Much as I love my high-speed connection to the AFCnet-- in my part of town, it's reliable -- I can't look the taxpayer in the eye and tell him we're leaving roads unfinished because we want to go $1 million in the red on municipal broadband.
This would be a different question if American Fork were located somewhere in rural Utah, where Internet service is not widely available. In that scenario, the City might well be justified in providing broadband at a loss. But we live on the Wasatch Front, where Comcast and Qwest and many others will gladly provide the service to our residents at no cost to the City. (The cost will still be paid by the consumer -- but whether he pays his fee to the City or to a private provider will make no material difference to his pocketbook.)
Thus, the RFP (request for proposals) on the in-City network remains in force, and the City is considering offers from qualified buyers.
In terms of financial health, this is the only viable option for American Fork City. My grip on civic reality teaches me that, in the absence of financial health, there can be no other kind of health.
Skate Park
A successful Orem businessman, explaining to me why he is considering a move to American Fork, described our skate park in glowing terms. No, the landscaping is not yet complete, and there's still the wrought-iron fencing to be installed, and yes, we did promise road improvements which we have not yet delivered. But on the plus side, this gentleman agrees with his teenage son that American Fork's course is unquestionably the most challenging and therefore the most fun of any of the skate parks around. But the icing on the cake, he says, is the kids. If you frequent the Orem skate park, he says, you're going to catch an earful of grime. But these American Fork kids -- they're as good as they get.
Broadband
Another businessman, this week, tried to persuade me that our City broadband need not operate on a business model. By this he meant that it is permissible for the City to operate in a perpetual loss position. Why? Because there's a benefit to the residents. City government, by this logic, justifies the annual loss of more than $1 million because there is a benefit to the residents.
It is true that the City operates several money-consuming assets which are wholly subsidized by the taxpayer. The library, City streets, and parks come to mind. That's our job, this gentleman says. We provide services that benefit residents.
True, I say, but there's a twist. Our real job is to manage the taxpayer's money.
City government is not the father who earns and doles out money to his children as he sees fit. City government is more the co-op of residents who pool their money to provide services of their own choosing. The City Council is elected to collect and manage the taxpayer's money prudently and according to the taxpayer's wishes.
Prudent money management dictates that enterprise funds -- funds such as water, sewer, and broadband, which have revenue streams attached -- recover their costs through their revenues.
Much as I love my high-speed connection to the AFCnet-- in my part of town, it's reliable -- I can't look the taxpayer in the eye and tell him we're leaving roads unfinished because we want to go $1 million in the red on municipal broadband.
This would be a different question if American Fork were located somewhere in rural Utah, where Internet service is not widely available. In that scenario, the City might well be justified in providing broadband at a loss. But we live on the Wasatch Front, where Comcast and Qwest and many others will gladly provide the service to our residents at no cost to the City. (The cost will still be paid by the consumer -- but whether he pays his fee to the City or to a private provider will make no material difference to his pocketbook.)
Thus, the RFP (request for proposals) on the in-City network remains in force, and the City is considering offers from qualified buyers.
In terms of financial health, this is the only viable option for American Fork City. My grip on civic reality teaches me that, in the absence of financial health, there can be no other kind of health.
posted by Heidi Rodeback at 1:13 PM
2 Comments:
After spending some time talking with DynamicCity about how the network was built, I'm not surprised that AFCNet is ailing. Forgoing the pooled risk of UTOPIA to build an un-expandable copper network was not a very sound decision on the part of the city. There's some hope, though: UTOPIA can accept new members starting July 1st of this year and if you install fiber while trenching for that new pressure irrigation system (the trenching is the bulk of the deployment cost), you can potentially save the network without having to find a buyer.
The big problem is that, philosophically, the city has no vision of the project which is why it has been floundering. Being a wholesaler while secretly wishing you were a retailer is no way to operate. In the meantime, there's no desire to spend any more money, making the current network of very low value. It's like buying $100 work of network cable but not being willing to spring $25 on ends and a set of crimpers to make it useful.
I don't envy your position as a decision maker concerning this predicament. Hopefully I've provided some food for thought.
Thanks for the comment. We haven't met, but already I consider you a friend for being the first non-family member to leave a comment on my blog.
UTOPIA has in fact received consideration by the City, and is a likely Plan B if Plan A (divestiture) fails.
But friend, you hit the nail on the head when you said the City has no vision of the project. This is correct. On the Council, only Shirl LeBaron and myself have championed municipal broadband, but the fiscal and managerial realities of the City have dampened our enthusiasm. With the Council unable to fund the millions of dollars in capital the build-out would require, and with the upper City management providing lackluster support, the challenges our City broadband faces are insurmountable.
The best we can do at this point is to cut our losses, and I expect that is the way the City Council will vote tonight.
I had a dream . . .
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