TO: City Council DATE: March 11, 2025 DEPARTMENT: Economic Development Department
PREPARED BY: Sarah McCormick, Economic Development Manager PRESENTER: Sarah McCormick, Economic Development Manager AGENDA TITLE: Receive Report and Consider Adoption of City Council Resolution Authorizing City Manager to Execute Joint Build Agreement with California Department of Technology with City Attorney Approval as to Form
RECOMMENDATION
Adopt City Council Resolution Authorizing City Manager to Execute Joint Build Agreement with California Department of Technology with City Attorney Approval as to Form
BACKGROUND
The California Middle Mile Broadband Initiative (MMBI) is designed to provide high-speed broadband service to unserved and underserved communities. It is the physical fiber optic infrastructure that enables internet connectivity and is made up of high-capacity fiber lines that carry large amounts of data at high speeds over long distances.
The California Department of Technology (CDT) and the Office of Broadband and Digital Literacy has been tasked to oversee the acquisition and management of contracts for the development, construction, maintenance and operation of MMBI network, retain a third-party administrator to construct and establish the network (Caltrans), and to create a nine-member Middle Mile Advisory Committee to monitor the development and construction.
The City of Fort Bragg has been actively participating in the rollout of this extraordinary investment administered by the California Public Utilities Commission (CPUC). For example, the CPUC awarded the City $479,000 of Local Agency Technical Assistance (LATA) grant program funds to advance our desktop design and cost estimates to a project level detail. The CPUC also awarded the City $10.3 million in Federal Funding Account (FFA) grant program funds to construct a last-mile network that will function as a municipal broadband utility.
DISCUSSION AND ANALYSIS
In May 2024, Governor Newsom proposed significant cuts to broadband expansion programs in an effort to address a budget shortfall. The proposed cuts would have removed several segments of the MMBI network – including the portion serving the City of Fort Bragg. In response, the City offered to partner with the State to ensure our community would not miss out on this historical investment.
City staff has been meeting on a regular basis with staff from California Department of Technology (CDT) to implement a joint build. CDT is identified as the lead for the project, with Caltrans overseeing construction activities, and the City acting as a partner. Construction costs are estimated to be $1,292,500, with the City obligated to pay our pro rata share of the actual build cost. The terms of the payment schedule have been aligned with FFA reimbursement milestones, as shown in the table below.
Invoice Event
Amount Owing*
Completion of 10 % of the Project
10% [$129,150]
Completion of 35% of the Project
25% [$322,875]
Completion of 60% of Project
25% [$322,875]
Completion of 85% of Project
25% [$322,875]
Acceptance of a Completion Notice
with respect to the Joint Build
15% [$193,725]
Total
$1,291,500
Maintenance Fee payment amounts for each contract year:
Contract Year
Maintenance Fee
1 $1,435.00
2 $1,478.05
3 $1,522.39
4 $1,568.06
5 $ 1,615.11
6 $1,663.56
7 $1,713.47
8 $1,764.87
9 $1,817.82
10 $1,872.35
11 $1,928.52
12 $1,986.38
13 $2,045.97
14 $2,107.35
15 $2,170.57
16 $2,235.68
17 $2,302.75
18 $2,371.84
19 $2,442.99
20 $2,516.28
Total:
$38,558.99
Anticipated construction schedule:
Construction Forecast Plan for the Fort Bragg Area
April 2025
Begin at north end
Mid-July 2025
Finish at south end
End of August 2025
Begin all site restoration
Mid-October 2025
Finish all site restoration
October/November 2025
Begin bridge crossings
January/February 2026
Finish bridge crossings
FISCAL IMPACT/FUNDING SOURCE
The City of Fort Bragg received $10.3 million of Federal Funding Account Program grant funds, and Congressman Huffman approved $1 million of Community Project Funding to construct this project. Council has directed staff to utilize debt financing and unidentified grant program awards to finance the remaining $3.3 million needed for this capital improvement project estimated at $14.7 million.
Staff is currently working on due diligence activities to acquire Mendocino Community Network, as well as potential debt financing strategies to close the funding gap. In addition, staff is currently preparing to apply for California Broadband Equity, Access, and Deployment (BEAD) program grant funds. The grant application window opens in March 25 and ends April 23, 2025. Nationally, the BEAD Program will provide $42.25 billion. California has been allocated approximately $1.86 billion, which is based on California’s share of unserved locations.
In addition, California was awarded a $70.2 million Digital Equity Capacity Grant by the National Telecommunications and Information Administration (NTIA) to support the California Digital Equity Plan. Staff is tracking digital literacy grant programs in order to implement digital inclusion activities, training programs, and to make equipment available to community members.
ENVIRONMENTAL ANALYSIS:
California Department of Technology is the lead for this project, and responsible for all permitting, environmental review and construction.
STRATEGIC PLAN/COUNCIL PRIORITIES/GENERAL PLAN CONSISTENCY GOAL 1: Invigorate Economic Opportunity and Community Vibrancy 1D. Develop and maintain affordable and reliable high-speed fiber-optics infrastructure to support and attract diverse businesses, online education, and remote employment that will connect Fort Bragg to the world.
Construct, manage, and maintain a municipal broadband utility that provides citywide access to underground networks with industry-leading speeds to provide secondary communication during emergencies and support businesses.
ATTACHMENTS:
Resolution XXXX-2025
NOTIFICATION:
“Notify Me’ subscriber lists: Economic Development Planning; Fort Bragg Downtown Businesses; and Blue Economy
AGENDA ITEM NO. 3A
CITY COUNCIL STAFF REPORT