City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 16, 2022
FROM: Rene Mendez, City Manager
SUBJECT: Joint Exercise of Powers Agreement Creating the South Salinas Valley Broadband Authority
RECOMMENDATION
Consider and Approve the Joint Exercise of Powers Agreement Creating the South Salinas Valley Broadband Authority; and authorize the use of $75,000 of American Rescue Plan funds (Fund 111) to fund the City’s initial 3-year contribution to the JPA from Fiscal Year 2022-2023 thru 2024-2025.
BACKGROUND
City’s Broadband Infrastructure Strategy
On May 15, 2017, the City adopted a Broadband Infrastructure Strategy that at its core goal was to provide basic and reliable service to every household in Gonzales. The strategy clearly put forth broadband and achieving “Universal Broadband for All” as one of the cornerstones of the City’s strategy to continue to improve and serve our community. It recognized that in order to be competitive and provide the necessary tools for our community to thrive in the 21st century, this was essential. While certainly a very ambitious goal, your Council has provided steady policy direction and feedback and over the years, this strategy has brought together several existing and new elements.
1. Continue active participation in the Central Coast Broadband Consortium, which the City has been a very active member since its inception;
2. Actively participate in local, state, and national initiatives on the need for more efforts to acquire reliable, robust, and affordable broadband for the betterment of the community, and also to raise community awareness and acceptance of internet service as a needed utility for everyone;
3. Actively monitor and participate in California Public Utility Commission (CPUC) proceedings that have the potential to impact our community. For example, Gonzales:
AGENDA
ITEM
22 a) Was the only City to appear before the CPUC to support and testify on the benefits that the Sunesys LLC, Connected Central Coast Unserved and Underserved Broadband Project that connected Santa Cruz to Soledad. This important project, which was completed, built the backbone to allow providers to connect and bring services to communities without having to incur large upfront infrastructure costs; and
b) Took a very proactive and aggressive stand on Charter Communications and several other cable television companies’ proposals, to merge nationally and share systems. Unfortunately, as part of this proposal, they planned to not invest or serve the lowest 1% of the systems (which included Gonzales) because of connection problems and costs of investments, which they thought was going to be approved. However, once again Gonzales was the first and one of a couple of Cities in the state to protest this action and urge the CPUC to not allow the 1% to be underserved by the upgrades resulting from the merger.
4. Due to the formal protest, Charter initiated negotiations with City. After several negotiations, the City of Gonzales and Charter Communications agreed that in exchange for the City withdrawing its opposition to Charter’s acquisition of Time-Warner and Bright House cable systems in California, Charter would upgrade its cable system serving Gonzales to full digital capability within two years of the transaction closing. As your Council is aware, the merger was approved, and Charter did in fact upgrade its system here in Gonzales sooner than the required 2 years. So now instead of Gonzales residents being the forgotten 1% that are not worth serving, and do not deserve high-speed internet, our residents have access to a system that is available to all at a speed competitive anywhere in the world. Spectrum (Charter) systems offer 100 Mbps down and 60 Mbps upload speeds compared to the 5 Mbps download and 1 Mbps upload that existed in Gonzales before the merger.
5. Prepared and distributed a Request for Qualifications (RFQ) for broadband services to all residents in Gonzales, which resulted in all bids being rejected and staff being authorized to negotiate with providers individually.
6. Negotiated the 2-year pilot program with T-Mobile1that resulted in 2,000 hotspots for our community that where distributed at the beginning of the pandemic that I do not believe is an understatement to suggest that they have been of significant benefit for our community and an essential part of combating the impacts of the pandemic.
REVIEW AND ANALYSIS
Continuing the “Universal Broadband for All” initiative, the City is poised to take the next step to permanently end the digital divide for our communities and the rest of South County. An important part of this next step is the proposed Joint Exercise of Powers Agreement (JPA) (attached) creating the South Salinas Valley Broadband Authority2, that brings the Cities of King, Greenfield, Soledad, and Gonzales with the County to work together to generate the needed economies of scale, market opportunity and area/population to be competitive for grants and to pool resources.
The JPA is patterned after several local JPAs and reflects many typical sections and provisions, including the:
1. Recitals that detail the reasons for the JPA and identifies this as one of the initiatives of the Salinas Valley Five Cities (SVFC) which is focused on the well-being of the Salinas Valley and 1 Currently staff is working with T-Mobile on extending the pilot program, which will be brought back to the Council for consideration during the special Council meeting on May 31st. 2 The proposed JPA was legally reviewed and vetted by the City Attorney and County Council. the lives of students, families, and the Valley’s workforce which has been chaired by the City of Gonzales since its inception.
2. Purpose which sets the goal to maximize funding for the purpose of bringing broadband services as a utility available to all residents within the Authority’s jurisdiction, especially for unserved, underserved, and disadvantaged, at a low cost and broadly defines how this would be done.
Specifically, the model calls for the full build out of a Community Broadband system for South County that would be overseen and operated by the JPA;
3. Boundaries of the JPA which includes the incorporated areas of the Cities of King, Greenfield, Soledad, and Gonzales and the 3rd Supervisorial District;
4. Effective Date and Term;
5. Governing Board makeup, voting and quorum requirements, terms of office, officers, meetings, etc.;
6. Executive Director, duties, and responsibilities. It is envisioned that the JPA will either contract for these services or designate one of its members to carry out this role;
7. Additional and Interim Officers that will be needed. As it pertains to Interim Officers that is very common as JPAs begin, because there is a lot of housekeeping and administrative functions that need to be done. To get it started and since Gonzales has been the driver of the JPA working closely with Supervisor Lopez, the City of Gonzales is designated as the Interim Director and Public Works official. Monterey County Counsel has agreed to provide legal services to start.
Once the JPA starts rolling, it is envisioned that the function of the Executive Officer will be outsourced; and
8. Initial funding, which is reflected to be a $25,000 initial contribution from each of the members for a total of $125,000. It is envisioned that most of the actual implementation and project funds would derive from grants. However, like any JPA, there will be administrative and operational costs.
There is a section and Exhibit C that lists four key partners and collaborators of the JPA including the City of Salinas, Hartnell College, the Monterey County Office of Education and the Rural County Representatives of California (RCRC), Golden State Connect Authority (GSCA). It is important to include Salinas, who is a member of the SVFC, and education who has been and is a major partner and collaborator. In particular, Hartnell who staffs the SVFC and provides administrative and Executive Director services, is very supportive of this effort and a catalyst behind the broadband.
As for RCRC – GSCA, they are the key partner and collaborator and will be working closely with JPA to fund, design, develop, and construct the Community Broadband Network (CBN). While it is important and the JPA is needed to establish the governance foundation, the real power and benefit of the JPA is that it provides the framework, area, collaboration, economies of scale, and perhaps more importantly equity lenses needed to put forward a compelling and competitive application for grant funds. In addition, partnering with RCRC – GSCA, the JPA will have access to low or no cost funding source to cover initial costs before grant funds are received.
All the South County Cities and the County are supportive and plan to present it to their Council and Board respectively for approval per the following schedule:
• King City and Greenfield: May 10th
• Gonzales: May 16th
• Soledad: May 18th
• County: May 24th
If as anticipated the JPA is approved by all the respective parties, there will be a signing ceremony with the four Mayors and 3rd District Supervisor, and a press conference hosted in Gonzales on May 27th at 2pm in the Council Chambers.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: Participating in the Broadband JPA supports the City’s Vision because it will allow the City to partner with the rest of South County, to develop and implement a Community Broadband Network that will permanently provide the necessary and affordable internet and broadband needed by our community.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community.
Explain: Participating in the creation and establishment of a Broadband JPA supports the Mission because it would allow the City to maximize and repurpose existing funds that will help over time enhance the quality of life for our diverse community.
City services will be delivered in a cost-effective, respectful, and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner.
Explain: Please see Vision and Mission above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: Please see Vision and Mission above.
ALTERNATIVES
Your Council could provide alternative direction or chose not to participate in the JPA, which is not recommended. Participating in the JPA is consistent with and continues the “Universal Broadband for All” initiative. It would allow the City to work with the rest of South County to pool resources to permanently eliminate the “digital divide” for our community.
BUDGET IMPACT
Depending on the direction provided by your Council, the initial City contribution would be $25,000 annually for a total of $75,000 for the 3-year period. In order to fund this project, staff is recommending that American Rescue Plan funds be utilized for the three years.
In addition, once implemented, there will be no need to maintain the hot spot program freeing up those resources for other Council priorities.
CONCLUSION
Consider and Approve the Joint Exercise of Powers Agreement Creating the South Salinas Valley Broadband Authority; and authorize the use of $75,000 of American Rescue Plan funds (Fund 111) to fund the City’s initial 3-year contribution to the JPA from Fiscal Year 2022-2023 thru 2024-2025.
Attachments:
1. Broadband JPA