High-speed internet talks continue with SEMO Electric

Tuesday, June 15, 2021

BLOOMFIELD — The Stoddard County Commission asked SEMO Electric Cooperative about the cost for bringing high-speed internet to Puxico and rural areas of western Stoddard County during Monday’s meeting.

Loyd Rice, manager of fiber services for SEMO Electric Cooperative, requested the commission use its American Rescue Plan funds to bring fiber optic internet service to Puxico during last week’s commission meeting.

Presiding Commissioner Danny Talkington asked Rice to bring figures concerning the cost of installing a fiber network not only to the city of Puxico but to the Puxico R-8 School District.

Rice reported those figures to the commissioners Monday, and made them aware of a grant program offered through the Community Development Block Grant program.

Rice explained that rural portions of the county would still be considered underserved after the Puxico project was completed. Areas around Aid and south toward Dexter and Dudley wouldn’t have access to high-speed internet, he said.

While they wouldn’t pay for a fiber network in those areas, funds from a Federal Communications Commission program could benefit the southwestern portion of the county.

Rice said the FCC program to bring rural internet access to Missouri awarded funds to SEMO Electric for a sliver of the county running from Acorn Ridge north toward state route PP near Leora.

“We won funding in that area so we are going to build that, but it’s a real odd shaped census block,” Rice said. “It basically follows that county road north, but it’s already funded, so we would be able to divert everything kind of south.”

Talkington asked Rice to work up some numbers to add in the area south of Aid and south of Dudley, as well as the remainder of the county serviced by Ozark Border Electric Cooperative. He said the money from the American Rescue Plan is meant to be used for infrastructure projects like these.

“Let’s do the rest of the county,” Talkington said, “and get them taken care of because I know you’re already doing (this in the) east side of the county. But when you start getting over into the Ozark Border area, let’s look at it all and see what’s it gonna take.”

Rice said Ozark Border has shown no resistance to using their infrastructure to bring fiber into western Stoddard County.

Costs for Puxico project

Rice determined the cost for building a mainline fiber network in Puxico would be about $280,000. In addition, about $120,000 worth of electronics and construction at the substation near Dollar General would be needed.

The substation is shared by Ozark Border and M&A Electric.

After getting blessings from Ozark Border and M&A — which Rice believes will happen — the cost for the build in Puxico would be $400,000.

The rest of the Puxico School District, the county rotating south toward Fisk, north toward Advance and over to area around Acorn Ridge gets a little more expensive, Rice said.

“That’s 144 miles of fiber, and that’s about $23,000 per mile. So that number is $3.35 million,” Rice said. “Some of that would change and evolve in the design.”

Rice said the total number of residences in the school district is 1,156.

“If $500,000 were available for town, I think you get it completely built out and on some of those gravel roads that actually leave the town, and just kind of head toward the refuge on the west side,” Rice said.

Rice said the best estimate for the entire project would be $4 million.

“I would put that on paper as deployment,” Rice said. “And that’s everything from marketing, to setting up an office in Puxico to advertising.”

SEMO Electric would pick up costs from here.

“At that point, the system is built and you start hooking up the homes,” Rice said. “Those come at a dollar amount of about $1,400. On average, in town, they’re cheaper because they’re closer. The electronics are the same but the drop is closer. Then out in the country, the yards are bigger, longer driveways and it just takes a little more money for those folks.”

CDBG program

Bradley Clark, grant administrator for Bootheel Regional Planning Commission, learned of a new CDBG program last week that would benefit this project.

“(CDBG) recently allocated about $43 million to the state of Missouri for this program,” Clark said. “So HUD passes money along down to CDBG. They disperse the money into different sub categories. There’s about $12.9 million for general infrastructure that they divided up. So, broadband infrastructure development actually was included on this.”

Clark said these grants are limited to families and individuals with low-to-moderate income. He said, on paper, the county does not meet these guidelines.

“So we have to survey those areas that don’t meet the low-to-moderate income standard,” said Clark, who added that in previous grants, the county has met low-to-moderate-income qualifications.

Entities may apply for up to $2 million on this program, and larger cities like St. Louis, Kansas City and Springfield are not eligible because this program is for rural broadband development only.

Clark said the county can use American Rescue Plan money to help pay for the cost in addition to the grant money.

“It’s a rolling application that is first-come, first-serve,” Clark said. “So, when we heard about it Friday … we really started rolling with it. … I’m 22 years old and I haven’t been in the game very long, but from what I’ve heard from people who have been in it for years, this kind of money does not come along very often, especially for broadband to only rural areas.”

Clark said 80% to 100% of the underserved areas needs to surveyed. He said reaching that many people would demonstrate the county is doing its due diligence.

Clark said BRPC has talked to the city of Puxico about how to get the survey done quickly.

“They talked about maybe some high school students going out door to door, some part-timers of various organizations involved going out and getting those surveys done, but we’ll have to get a plan of action on that to show where exactly that you’d be building out because that’s exactly (where) we’re going to have to go and survey,” Clark said.

“Good thing about where we’re doing it is that it’s a lot of underserved and a lot of unserved. There are a lot of people who are going to be putting applications in for this pot of money that are underserved, which is partially served with some kind of internet service provider, but in a lot of Puxico or rural Puxico and the school district, there are no providers.”

Associate commissioner Steve Jordan asked if having so many people who are unserved would increase the county’s chances of obtaining the grant.

“It will play a huge factor,” Clark said. “We’re in a very unique situation where we have a pretty big industry in our town. … There’s quite a bit of area that we cover with our school district. We ran it by the field rep at the (Department of Economic Development) and she said it seemed like a really good idea.”

Associate commissioner Jarrell asked Rice if he is asking the county to commit $1 million.

“That’s the only way that you can force competitiveness on the grant,” Clark said. “There’s not a lot of points involved with cash match but obviously if you’re asking for $2 million, the cap, and you put in $1 million, I mean, there’s no option but for them to say hey, they’re putting in 50% of the money, so it’d be very very very competitive.”

While there is no cash match in the grant, Clark said the county would need to spend its money first, “because they like to see your skin in the game, and when you follow through, then they start paying.”

Jarrell asked if the city of Puxico would use some of its American Rescue Plan money, of which Puxico has been promised $155,822.

“We haven’t committed yet. I think we get $75,000 then another $75,ooo,” Puxico mayor Rick McLain said. “I would say (the board) would go along with that $75,000 right off the bat. I don’t know anything we could do that would make it any better for Puxico than to get high-speed internet.”

Clark and Rice advised that the city wouldn’t need to use all of its first payment on the internet project.

Rice said if Puxico puts “$50,000 toward it, that thing’s gonna fly through” for a $500,000 grant.

Clark said he expects a three- to five-month turnaround for approval from the DED. Rice estimated about a year to complete the project in the school district.

Discussing profits

Jarrell asked how many months or years does the co-op expect for a return on its investment.

“If we commit a $1 million, we’re gonna have every internet service in here. We’re gonna have (Sparklight) wanting the same money,” Jarrell said. “We’re gonna have BPS or whatever. We’re going to have them coming in here wanting money.”

Rice said “the co-ops are a little bit different than every other company because it is not-for-profit. I guess the fiber side of the business is somewhat for profit, but it feeds any profits back to the co-op, and we just lower our electric rates.”

Mark Crisel, of the Puxico Improvement Corporation, said no matter who brings high-speed internet to Puxico they would not make much of a profit, if any.

“I ran the numbers and looked at the feasibility analysis from a business standpoint,” Crisel said. “This will never be a profitable endeavor for a private company. … We’re looking at 400, 500 or 600 households at $100 a month, which would be more than what they’re charging right now. On paper, it never makes sense.

“The only way that this moves forward for our community is from a co-op, or a publicly funded type situation. Just like when we got electric in our area or like when we had phone services in our area, it’s never profitable for Ozark Border or AT&T on copper lines and electricity. So really the only path forward for any kind of connectivity is a nonprofit or a publicly assisted type situation or a combination.”

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