The Fort Dodge City Council is scheduled to meet this coming Monday for their regularly scheduled meeting. Laid out in the Consent Agenda is a resolution to set a public hearing for a Telecommunications Revenue Loan Agreement. If moved, the public hearing will be May 12th.
The proposed notice sets a principal amount not to exceed $3,5000,000 “for the purpose of paying the cost, to that extent, of establishing, improving, and equipping the City’s Municipal Telecommunications Utility”.
A memo from City Manager David Fierke to Mayor Bemrich and City Council, outlined a plan to only borrow up to $2,800,000. The money would be used to pay for the remaining equipment to build the network to completion. The loan is described in the memo as “a temporary internal loan”.
With all other fiber borrowing that has occurred, this loan would also be paid back only using fiber revenue.
The memo goes on to say the fiber utility is in solid financial health, and connections remain strong. The purpose of the loan is to allow the utility to make a large principal payment in June of 2025 that was scheduled before the initial utility construction encountered additional costs and delay. The Council will consider this new loan in lieu delaying continued construction and using revenues to make the upcoming payment.
In September of 2024, the City borrowed $3,265,000 from the sewer fund to supplement fiber construction. Three months later, sewer rates were increased ‘to offset inflationary increases’. It is unclear where the funding for this new internal loan will come from.
