Montpelier negotiating wireless takeover
Toolbox
By SARAH HINCKLEY Staff Writer - Published: June 1, 2008
MONTPELIER – In an attempt to recoup the costs of the floundering Internet cooperative MontpelierNet, City Council members could as early as this week begin to negotiate a takeover of the co-op's assets and create a city utility.
In 2004, Montpelier co-signed a loan to help launch MontpelierNet, a cooperative company that provides wireless Internet service. For approximately the last year the city has been making the payment on that loan, while the cooperative collects from its eight customers to pay its other expenses.
"We're certainly behind as far as the payments on the loan," said Jack Hoffman, one of the founders of MontpelierNet. "With the exception of the loan payment, we're currently paying our bills."
Hoffman estimates the cooperative's monthly expenses at approximately $3,000. The city is one of MontpelierNet's eight customers, which also include the Kellogg-Hubbard Library and the Statehouse.
During its meeting last week, the City Council approved a motion to allow City Manager William Fraser and council members Tom Golonka and Andrew Hooper to negotiate a transfer of assets with Summit Communications, the technical support company, and MontpelierNet officials. The goal would be to keep the local wireless company going until another project – this one with telecommunications network E.C. Fiber – is operational in Montpelier, Golonka explained.
Through the state's telecommunications law passed in 2007, cities and towns are allowed to maintain their own communica-tions network. By taking over MontpelierNet's assets, the city would then maintain the communications network.
"It would not be a cooperative, it would be a city utility," Fraser said on Friday, explaining the proposed negotiation, which includes setting up a separate city account for the project.
City officials would be negotiating the establishment of an escrow account that would allow the city to collect from members of the cooperative to pay operating costs and slowly pay off MontpelierNet's debt. The goal is to separate the financial activity of the utility company from the city's general fund and taxpayer monies.
"The plan, basically, is to create a revolving account," said Fraser. "Anything we get now is better than what we're getting … Customers are paying the ongoing operating cost. The city is paying a note on the capital equipment costs."
Council member Jim Sheridan asked how much Montpelier would be out if it walked away from the agreement. Golonka said the city would be out $53,000.
"We're paying them back to pay ourselves back," Golonka told the council. "We're putting our own money into an account that we control, and we get the equipment."
Fraser estimates about $16,000 is owed to Summit Communications and an undetermined amount is owed to Hoffman. The equipment includes wireless transmitters located on separate ends of the city.
Initial negotiations are scheduled to take place at the beginning of this week, according to Fraser.
Contact Sarah Hinckley at sarah.hinckley@timesargus.com.
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