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Willmar council authorizes fiber‑use agreement with Hometown Fiber; engineering spending tabled pending cost details
Summary
After extensive Q&A on financing, ISP participation and contract safeguards, Willmar authorized a fiber‑use agreement with Hometown Fiber for an open‑access city network and directed staff to pursue ISP sign-ups and outreach; the council tabled a separate $403,000 not‑to‑exceed engineering authorization for Bolton & Menk pending a detailed cost breakdown.
The Willmar City Council voted Aug. 5 to authorize a fiber‑use agreement with Hometown Fiber to pursue an open‑access, city‑owned fiber network, a project staff and consultants described as Connect Willmar.
City staff and the manager’s representatives outlined a phased project structure, financing approach and key contract terms. Staff presented a total project estimate of about $25 million, with a phase‑one construction estimate in the neighborhood of $9 million. The city proposes financing through general‑obligation tax‑abatement bonds and intends to repay bond debt primarily from subscriber revenue; staff said the city would not call for bonding or start construction without further feasibility analysis.
Contract highlights and safeguards included: • City ownership of the physical network while a manager operates it on the city’s behalf under a contract; • Operational date set as the earlier of the first activated user or Jan. 1, 2029; • A feasibility threshold requiring at least 100 potential users to opt in by March 31, 2025 for the city to be obligated to begin payments to the manager; • Manager compensation set in the packet at $20,787 per month plus a $5 per‑end‑user monthly fee; and • Reserved city rights to perform emergency repairs and an explicit dispute‑resolution process.
Council members asked detailed questions about who would bill end users (staff said ISPs would bill customers and the manager would oversee collections from ISPs), whether the city or customers would be liable if revenues fall short, how emergency repair approvals would work and whether elected officials had conflict‑of‑interest restrictions in the agreement. Staff said the agreement contains a conflict‑of‑interest clause preventing city officials and employees from holding an interest in the contract during their tenure and for one year thereafter.
Several council members sought assurance that the project would not rely on taxpayer dollars in the near term. Staff said the debt‑service plan assumes subscriber revenue but acknowledged the city would be obligated to bond payments if revenues fell short. To limit risk, staff recommended phased construction and included contract language allowing the city to terminate the manager contract before the operational date if financing or feasibility are not met.
After extended discussion about outreach, ISP recruitment and emergency repair authority, a council member moved to authorize the fiber‑use agreement with Hometown Fiber; the motion passed on roll call with the council recording six ayes and one no. Later in the meeting the council considered a separate professional‑services agreement with Bolton & Menk for civil engineering for phase 1, described in the packet as a not‑to‑exceed $403,000 authorization. Several council members objected to approving the full not‑to‑exceed amount without a clearer breakdown of costs and outstanding invoices; the council voted to table the full authorization and asked staff to return at the next meeting with the amount incurred to date and a phase‑1 cost schedule.
Staff said next steps include continued ISP recruitment, targeted community outreach and additional financial modeling before the council is asked to call for bonding or authorize construction contracts.
