CITY COUNCIL
Kevin McCarty, Mayor
Lisa Kaplan, District 1
Roger Dickinson, District 2
KarinaTalamantes, Vice Mayor, District 3
Phil Pluckebaum, District 4
CaityMaple, District 5
Eric Guerra, Mayor Pro Tem,District 6
RickJennings, II, District 7
MaiVang, District 8
CHARTER OFFICERS
Mindy Cuppy, City Clerk
Susana Alcala Wood, City Attorney
Farishta Ahrary, City Auditor
Leyne Milstein, Interim City Manager
John Colville, City Treasurer
City Council
FinancingAuthority
Housing Authority
Public Financing Authority
Redevelopment Agency Successor Agency
City Hall Complex
915 I Street, Sacramento, CA 95814
Published by the Office of theCity Clerk
(916) 808-7200
SUPPLEMENTAL MATERIAL
Description: Attached is supplemental material received after publishing the agenda, the addition of Attachment 3-PPP Agreement. The attached staff report replaces the original staff report in its entirety.
For the Meeting of: Tuesday, January 14, 2025 at 2:00 p.m.
Agenda Item: Consent Item 20
20. Enter into a Private Public Partnership with Consolidated Communications Enterprise Services, Inc., for the Last Mile Connectivity Grant File ID: 2024-01926
Location: Citywide
Recommendation: Adopt a Resolution authorizing the City Manager or City Manager’s designee to: 1) enter into a Private Public Partnership with Consolidated Communications Enterprise Services, Inc. to expand internet access for unserved communities in Sacramento for the Sacramento Last Mile Connectivity Grant; and 2) add the CIP Federal Grant Fund (Fund 3703) to the Last Mile Connectivity Grant (G07000200).
Contact: Darin Arcolino, Chief Information Officer, (916) 808-0403, [email protected]; Manuel Martinez, IT Manager, (916) 808-8785, [email protected]; Ignacio Estevez, IT Manager, (916) 808-7349, [email protected]; Information Technology Department City of Sacramento Page 1
City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01926 1/14/2025 Consent Item 20.
Enter into a Private Public Partnership with Consolidated Communications Enterprise Services, Inc., for the Last Mile Connectivity Grant
File ID: 2024-01926
Location: Citywide
Recommendation: Adopt a Resolution authorizing the City Manager or City Manager’s designee to:
1) enter into a Private Public Partnership with Consolidated Communications Enterprise Services, Inc. to expand internet access for unserved communities in Sacramento for the Sacramento Last Mile Connectivity Grant; and 2) add the CIP Federal Grant Fund (Fund 3703) to the Last Mile Connectivity Grant (G07000200).
Contact: Darin Arcolino, Chief Information Officer, (916) 808-0403, [email protected]; Manuel Martinez, IT Manager, (916) 808-8785, [email protected]; Ignacio Estevez, IT Manager, (916) 808-7349, [email protected]; Information Technology Department.
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution
3-PPP Agreement (TBD)
Description/Analysis
Issue Detail: The American Rescue Plan Act of 2021 (ARPA) appropriated funds for states to deploy last-mile broadband internet networks. Communities across California face many barriers to deploying resilient and accessible broadband networks. Broadband internet access and service in urban communities varies by neighborhood. Rural areas of the state often lack the infrastructure for sufficient wireline and wireless broadband internet access service. The COVID-19 pandemic highlighted the extent to which broadband access is essential for public safety, public health and welfare, education, and economic resilience, adding greater urgency to developing new strategies and expanding on existing successful measures to deploy reliable networks with affordable service.
The California Public Utilities Commission (CPUC) established a Local Agency Technical Assistance
File ID: 2024-01926 1/14/2025 Consent Item 20.
(LATA) grant program, funded with ARPA monies administered by the United States Treasury. The LATA program provided grants for eligible pre-construction work which facilitates the construction of broadband network projects. The City applied for funding and was awarded a $210,300 grant on October 6, 2022, for the City of Sacramento Digital Expansion Project. The project included the development of an all-inclusive Broadband Strategic Plan to help improve access and affordability of high-speed internet service for community members, businesses, and efficient delivery of City services. The scope of the strategic plan included an asset inventory of both public and private broadband infrastructure; a market analysis that evaluated the incumbent Internet Service Providers (ISPs) and their rates, service tiers and speeds; and a needs assessment that analyzed data sets and indicators of broadband need, including conducting a community survey and hosting focus groups of both City departments and community stakeholders. Additionally, the plan included a conceptual network design that maximized connectivity and reach into residential neighborhoods and business corridors, created a phased implementation approach, and evaluated the capital costs and grant opportunities for feasibility. The strategic plan and corresponding network design highlighted that the City is in a favorable position to leverage our expanded broadband network infrastructure with a private partner who is willing to construct all or a portion of the conceptual network in exchange for rights to sell affordable high-speed internet services utilizing City fiber. This work gave Sacramento an advantage in pursuit of the designated $38 million in broadband construction grant funding available for Sacramento County through the SB 156 Last Mile Federal Funding Account (FFA).
On July 21, 2023, staff issued a Request for Proposals (RFP) for Fiber Optic Network Public-Private Partnership (PPP), inviting firms to submit proposals to partner with the City to finance the project, and comply with any requirements, conditions, or service offerings as required by any grant sponsors. This includes, but is not limited to, any affordable connectivity programs or connecting under-served or disadvantaged areas, extending its own communications network of any newly installed fiber to provide retail high-speed broadband internet and data services to residents and businesses. As part of this engagement, the selected respondent(s) shall negotiate and commit to privately finance and construct additional fiber optic backbone infrastructure, if necessary, consistent with then applicable ordinances, regulations, policies, and standards, including but not limited to, grant funded-city owned conduit and fiber optic laterals and service drops to expand high-speed broadband service offerings within the City, with a particular focus on affordability and access for underserved, disadvantaged, vulnerable, or low-income areas. The City received seven proposals. A team of City staff evaluated the proposals, concluding that the proposal from Consolidated Communications Enterprise Services, Inc. (CCI) best met the City’s requirements.
On September 13, 2024, the City received an award letter for $38,696,843 after the CPUC voted and approved the grant award in Resolution T-17835. The unserved locations were selected based on criteria established by the CPUC's FFA program while overlaying the City network with the FFA Public Map, which identifies areas at the census block level lacking reliable broadband service of at least 25 Mbps downstream and 3 Mbps upstream. The award is also predicated on the City’s agreement to
File ID: 2024-01926 1/14/2025 Consent Item 20.
construct its project as detailed in its application and compliance with the Federal Funding Account Last Mile programs rules. In addition, the City must also agree to comply with all federal and state statutes, rules, and regulations covering broadband services and state contractual rules and regulations in accordance with Decision (D.) 22-04-055, Appendix A: FFA Program Rules and Guidelines.
On Oct 15, 2024, the City adopted Resolution 2024-0309 accepting the CPUC Last Mile FFA Grant in the amount of $38,696,843 to implement the "Sacramento Last Mile Connectivity Project" to connect unserved communities to affordable broadband infrastructure. The Resolution also approved the creation of the CPUC Last Mile Grant Program G07000200. Upon further discussion with grantor, it came to light that federal grant money would be primarily utilized necessitating adding Fund 3703.
This resolution is to seek authority to add Fund 3703 to the G07000200 project.
Policy Considerations: This initiative aligns with the Information Technology Department’s Digital Strategy Update 2024-2025 document that includes expanded broadband to underserved communities as a key initiative goal. Investment in infrastructure will strategically position the City for the next economy. The City stands to receive significant short- and long-term economic gains from this PPP.
Economic Impacts: The City will utilize CPUC grant funds to expand City infrastructure and implement the Sacramento Last Mile Connectivity Project, which will connect unserved communities to affordable broadband services.
Environmental Considerations: The project is consistent with the 2040 General Plan and certified Master EIR (Resolution No. 2024-0065), and is categorically exempt. The future infrastructure installation project(s) that would be funded by the fiscal activities authorized herein would involve the conversion of existing small structures and minor alterations to land, including minor trenching and backfilling where the surface is restored as described in sections 15301, 15303, and 15304 (f) of the CEQA Guidelines (14 C.C.R. §§ 15000, et seq.).
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The Sacramento Last Mile Connectivity Project proposes to serve an estimated 4,620 unserved locations and an estimated unserved population of 21,681. An estimated total population of 43,341 will benefit from these investments in the City. The last-mile fiber project will provide up to ten gigabits per second of symmetrical internet service to consumers. The project will benefit disadvantaged or Environmental and Social Justice communities; 93 percent of
File ID: 2024-01926 1/14/2025 Consent Item 20.
the unserved locations are low-income. Exhibit A lists the communities/neighborhoods that will be serviced under this project.
Financial Considerations: No City funding will be required. Fund 3703 (CIP Federal Grant Fund) will be added to the CPUC Last Mile Grant Program (G07000200).
Local Business Enterprise (LBE): Not applicable.
Background: On March 11, 2021, President Biden signed into law the ARPA of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, which appropriated funds for states to deploy last-mile broadband Internet networks. This law requires funds to be expended by the end of 2024 and projects to be completed by the end of 2026. On July 20, 2021, Governor Newsom signed SB 156 into law, creating the FFA, with CPUC being responsible for implementing the new grant program. The CPUC initiated the Broadband for All proceeding to set the strategic direction and changes necessary to expeditiously deploy reliable, fast, affordable broadband Internet access services connecting all Californians. The State of California issued Executive Order N-73-20 on August 14, 2020, directing state agencies to accomplish 15 specific actions to help bridge the digital divide, including ordering state agencies to pursue a minimum broadband speed goal of 100 Mbps download to guide infrastructure investments and program implementation to benefit all Californians.
On September 10, 2020, CPUC opened its doors and made the necessary changes to expeditiously deploy reliable, fast, affordable broadband Internet access services that connect all Californians.
RESOLUTION NO. ________
Adopted by the Sacramento City Council
Date: _______________
Enter into a Public Private Partnership with
Consolidated Communications Enterprise Services, Inc. for the Last Mile Connectivity Grant
BACKGROUND
A. On July 21, 2023, staff issued a Request for Proposals (RFP) for Fiber Optic Network Public-Private Partnership (PPP), inviting firms to submit proposals to partner with the City to finance the Sacramento Last Mile Connectivity Project, and comply with any requirements, conditions, or service offerings as required by any grant sponsors. Seven organizations submitted proposals for the project. Staff evaluated the proposals and determined Consolidated Communications Enterprise Services, Inc. (CCI) proposal best met the City’s requirements.
B. On September 13, 2024, the City of Sacramento received an award letter notification that the CPUC voted and approved a $38,696,843 grant award under CPUC’s Resolution T-17835. The award is predicated on City of Sacramento’s agreement to construct its project as detailed in its application and compliance with the Federal Funding Account Last Mile program rules.
C. On Oct 15, 2024, the City executed the CPUC Consent Form after City Council accepted and approved the CPUC Last Mile FFA Grant to implement our "Sacramento Last Mile Connectivity Project" to connect unserved communities to affordable broadband infrastructure. In addition, Council passed Resolution 2024-0309 to allow the creation of the CPUC Last Mile Grant Program. Upon further discussion with grantor staff requests adding Fund 3703 (CIP Federal Grant Fund) to the G07000200 project to properly track federal expenses while grantor determines ratio of federal to state grant money of award.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. The City Manager or the City Manager’s designee is authorized to execute the PPP agreement with CCI.
Section 2. The City Manager or the City Manager’s designee is authorized to add Fund 3703 (CIP Federal Grant Fund) to G07000200 (Last Mile Connectivity Grant).