06.c1 Staff Report - Request for Payment for the 2021 Direct Buildout Project to MidcoPage 1 of 3
City of Scandia
14727 209 th St. N. PO Box 128, Scandia, Minnesota 55073
Phone (651) 433 -2274 Fax (651) 433 -5112 http://www.ci.scandia.mn.us
MEMORANDUM
DATE: March 15, 2022
TO: Honorable Mayor and City Council
FROM: Ken Cammilleri, City Administrator
RE: Request to Payment of the 2021 Direct Project Buildout to Midco
Communications.
Background
On July 20, 2022, the City Council approved a contract directly with Midcontent
Communications (aka Midco) for the direct buildout for 62 homes for the area below.
A contract was entered with Connected Nation, a qualified 3rd party buildout verification
contractor back in October of last year to asure that the project met compliance with the
terms of the agreement.
Recommendation
Staff recommends payment of $85,000 to Midcontinent Communications for satisfaction of
the 2021 direct buildout agreement, based on the 3rd party verification confirmed in
Connected Nation’s field validation report provided to us late last month. We further
recommend payment in the amount of $4,950 for verification services to Connected Nation.
These amounts are included within this month’s payment batch within the consent agenda.
Page 2 of 3
City of Scandia
14727 209 th St. N. PO Box 128, Scandia, Minnesota 55073
Phone (651) 433 -2274 Fax (651) 433 -5112 http://www.ci.scandia.mn.us
Broadband Buildout Spending Summary
Midco’s contribution to the 2021 direct buildout project is $142,000.
Combining these costs with $160,085 paid for the 2020 Midco buildout for the 2019
Minnesota Broadband Border-to-Border Grant, and the City will have expended, as of
month end, $250,035 so far on broadband buildout.
There is also another $165,000 that is currently pending payment for the 2021 Midco
buildout for the 2020 Broadband Border-to-Border Grant. Payment of this commitment
will be presented for approval following receipt of conformation of project completion from
the Minnesota Office of Broadband Development. This would bring total broadband
expenditures to approximately $415,000, when the 2021 grant buildout is finally paid.
The following is a summary of the current capital outlay for broadband buildout for the City
of Scandia based on the buildout year. These figures are subject to change as the City
Council will consider amendments to the component of the Capital Improvement Plan this
year.
2020
Actual
2021
Est.
2022
Budget
2023
Budget
2024
Budget
$160,085 $254,950 $319,280 $281,216 TBD
Based on these figures it is estimated that the City will approximately spend $1,016,000 by
the year end of 2023. Again this is strictly a rough estimate given the possibility that budget
amendments can and will likely be made going forward.
The 2021 Buildout Area for the 2020 Midco Border-to-Border Broadband Grant
The following map depicts the areas that have been included within the grant area buildout.
The State of Minnesota’s funding rules forbid the overlap of buildout with grant funds in
areas within the Federal FCC Rural Digital Opportunity Fund (RDOF) broadband buildout
program, so some buildout areas were funded without grant funds by Midco.
The total cost for this first project is $434,144 and covers the original DEED area in the
map below of 79 homes and 11 homes on Paris Ave N. Scandia’s contribution to this
buildout, as mention previously is $165,000. The state’s grant is providing $78,824, and
Midco’s contribution is $190,320.
Page 3 of 3
City of Scandia
14727 209 th St. N. PO Box 128, Scandia, Minnesota 55073
Phone (651) 433 -2274 Fax (651) 433 -5112 http://www.ci.scandia.mn.us
2022 Tentative Buildout Plans
The City has not yet received final buildout plans for the 2022 construction season. So far,
Midco has identified 62 additional service drops to Scandia households and are considering
more.
Broadband Buildout Progress
So far, the Internet Action Committee anticipates that by year end we will have reached
potentially 1,313 households. Based on the 2020 US Census the City has approximately
1,559 households plus the 23 additional new home constructions leaves the City with
approximately 1,582 households. This would mean that we would be at approximately 83%
broadband coverage.
The remaining builds are anticipated to be more costly per service drop as the properties that
remain unserved are located within some of the least dense locations of the city.