SOLON, Ohio — Feasibility studies have had a rough go of it lately in the city.
Back in December, City Council tabled a $37,000 engineering and design study for the proposed Solon-to-Chagrin Falls trail, after a $2.9 million line item was removed from the proposed 2019 budget.
Talks continue between the city and neighbors concerned about their proximity of the proposed trail, which has already qualified for $800,000 in state grants.
Then last month, a $45,280 feasibility study to look at the city becoming a municipal internet service provider (ISP) did not make it out of council’s Finance Committee.
A Request For Proposals was issued in September and six responses were received, ranging from about $37,000 to more than $194,000.
After a Feb. 19 discussion with city Information Technologies Director Jim Gibbs, the Finance Committee voted 3-0 against the acceptance of the RFP, removing from the ensuing City Council agenda.
Most of the concern centered on the initial ballpark figure of $15 million to get the fiber optics network up and running.
“I don’t even know if I’m there to do the study,” Councilman Jeremy Zelwin said, citing the need remain “fiscally responsible to our residents and not increase taxes.”
Gibbs provided background seven success stories, the closest being Fairlawn in Summit County, with 7,500 residents and a system that is “operationally cash positive after three years.”
Gibbs said that FairlawnGig is viewed as a “quality of life” amenity, an approach that he argued Solon should also take. He also noted that the Municipal ISP Research Team was recommending firm that worked initially with Fairlawn to do the Solon feasibility study.
“The idea is that we don’t have to compete based on a bottom line profit, which frees us to provide service in a different way,” Gibbs said. “We can benefit and we don’t have to be beholden to our stock price.”
Pelunis questioned whether Solon would be starting out from a “flawed analysis,” then wind up with “not enough revenue to support breaking even on it.”
Gibbs acknowledged that Solon’s industrial stalwarts such as Nestle and Swagelok would likely “stick with the bigger world players” as their internet providers, with the city serving more as a backup system.
As for competing with private enterprise, the city is “still the backstop on those bonds” that might be needed for startup costs, Pelunis said.
That’s one big reason why a feasibility study is needed, Gibbs said, comparing the overall investment to a mortgage and a 30-year commitment.
“I’m not asking you to render judgment on the entire network at this time,” Gibbs said. “But at least give us a chance to get another data point so we can make that final decision in the coming months.”
Councilwoman Nancy Meany, who chairs the Finance Committee, questioned why the close and comparable City of Hudson was not included in Gibbs’ Feb. 19 presentation.
Gibbs said it was not a case of “avoidance.” In fact, Hudson and its high-speed fiber “Velocity Broadband” system were visited by Solon’s ISP research team.
“The City of Hudson shared very openly and honestly what aspects of their network implementation went right and what items could have gone better,” Gibbs wrote.
Gibbs noted that Hudson worked with another finalist for the Solon feasibility study contract.
“Overall they were pleased with feasibility study (the other company) did, however, they also felt that Hudson quickly outgrew the guidance offered and needed to seek other sources of input from other outside agencies for continued growth of their network,” Gibbs wrote.
Hudson officials could not be reached for comment late Tuesday, but an announcement posted on their website stated that City Council passed legislation on March 5 that places Velocity Broadband in an enterprise fund.
“In governmental accounting, an enterprise fund is a fund that provides goods or services for a fee that makes the goods or services self-supporting,” the Hudson website explained. “This also provides additional transparency as it separates the financial results of Velocity Broadband from other city operations.”
Gibbs reasoned that Hudson set out to provide for a handful of businesses in the early going, then moved into the residential market.
“If you under-capitalize these projects, they fail,” Gibbs told the Finance Committee. “If you dip your toe into these projects, they fail.’
Meany said she had “concerns right away” last August when the RFP was introduced to council, and they have only intensified since then.
“I look at this as a potential disaster,” Meany said. “I think it’s a huge mistake for the city to undertake something like this. There are way, way too many alarm bells for me.”
Meany believes that broadband, at least in Solon’s case, should remain in the private sector, rather than some “pie-in-the-sky” public initiative.
Zelwin asked if there had been any interest in competing cable and internet providers coming in to give Spectrum and AT&T a run for their money.
Gibbs said that Wide Open West — “WOW!” — had approached the city about building out its network into the Solon market, but that interest cooled upon learning that the city might launch is own ISP.
“They did not want to split the pie four ways,” Gibbs said.