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Town Council awards broadband contract

Awarding a sole source contract to USA Communications last week, the Pagosa Springs Town Council took a step towards finally securing badly-needed broadband Internet infrastructure for the area.

The award of that contract, amounting to just over $85,000 may have raised some eyebrows at first, given that the town’s Municipal Code mandates that contracts for services or purchases exceeding $25,000 are subject to a formal bidding process.

However, citing two exceptions in the code, Pagosa Springs Town Manager David Mitchem presented council with rationale for awarding USA Communications with the contract.

Section 2.5.7 of the Municipal Code states, “Town Council is authorized to approve contracts for any amount, without an Informal or Formal Bidding Process, for goods or services that, in the opinion of the Town Council, are best obtained from a single or sole source due to one (1) or more factors including, but not limited to, specialized skills, special knowledge and/or experience, unique and relevant experience, knowledge of the Town and geographic region, or exceptional qualifications or reputation in the field. When authorizing such contracts, Council shall by motion, resolution or ordinance describe the factors that cause it to approve such contract without a competitive bidding process.”

In his presentation, Mitchem referred to, “the company’s specialized skills, special knowledge and/or experience, unique or relevant experience regarding fiber optics,” as reason for proposing a sole source contract for USA Communications.

In order to close his case for a single source vendor, Mitchem drew on the intergovernmental nature of the project and another portion of the code that suited the cause.

The town began pursuing the expansion of broadband Internet several years ago, taking a rather circuitous route in order to hard wire various local government facilities with fiber optic cable. That process began when both the town and Archuleta County partnered with other government agencies in the Four Corners area.

In early 2009, both town and county decided to join SWCCOG (Southwest Colorado Council of Governments) to provide an additional funding mechanism. Composed of counties and municipalities from the Four Corners area, the SWCCOG was formed to gain access to state and federal funding, especially for projects that include multiple jurisdictions.

As described by Region 9 Economic Development District Assistant Director Laura Lewis-Marchino during a joint meeting between the town and county, more and more federal and state funding opportunities are being awarded to COGs rather than individual municipalities.

Having agreed to participate in the SWCCOG, the town and county signed on with other participants to apply for a Regional Telecommunications Infrastructure grant through the Department of Local Affairs (DOLA) in the summer of 2009, offered almost $4 million in funds through the American Recovery and Reinvestment Act for the purpose of expanding broadband in rural areas.

In early 2010, then-Colorado Gov. Bill Ritter announced the award of the grant, a portion of a $17 million pot allocated to “energy impacted areas” and funded from federal oil and gas lease revenues. Amounting to $3 million to the SWCCOG — slightly less than the $3,220,375 originally requested — with the town and county’s cut at $648,805 for broadband expansion.

With an additional $216,268 in local matching funds (necessary for securing the town and county’s participation in the grant), $865,073 was ultimately made available for total project funding.

With DOLA charged with administrating those funds, it took well over a year for the grant award to finally make its way into local coffers so that cable could be laid in the ground.

That catholic nature of the project’s partners provided Mitchem another tool for pushing for a sole source contract. Section 2.5.6.(1) of the municipal code states, “The following types of contracts, equipment, supplies and services may be awarded or purchased without benefit of a Formal or Informal Bidding Process:

(1) Intergovernmental agreements.”

With two portions of the municipal code supporting Mitchem’s proposal for approving the award of a sole source contract, the town manager added in one more benefit: The agreement would save almost $90,000 in project costs — less than half the expense originally estimated.

Town and county contributions would amount to $21,262 to pay for the portion of the overall project constructed by USA Communications. Two other vendors — SCAN (Southwest Colorado Access Network) and EAGLE-Net — will build out the remaining portions of the network.

That bargain was the result of cost-sharing with USA Communications for fiber optic line construction. Essentially, with grant funds specified for the development of broadband infrastructure, the town agreed to help pay for a USA Communications expansion of their fiber optic network.

That assistance comes in the form of a 60/40 share of construction costs (with the town and county shouldering the lesser amount), an agreement that includes a multi-year non-compete clause as well as providing town and county government ownership of 12 strands of fiber.

Although the town is on board with a sole source contract with USA Communications, that deal awaits approval from the Archuleta County Board of County Commissioners.

Mitchem stated that he saw no indication that the BoCC would object to the contract and would ultimately vote to support the town’s decision.

When asked by trustee Don Volger what would happen if the BoCC voted against a sole source contract, Mitchem responded, “We’ll have to come back and revisit it.”

In the meantime, USA Communications has proceeded with laying fiber cable through town, work that can be seen along U.S.160 this summer. Whether that work will be partially funded by the town and county, resulting in partial ownership of the fiber optic cables in the ground, rests with the BoCC next month.

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