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HomeMy WebLinkAboutCOD-014-09 ClN:-/!}glon Staff Report 113 REPORT CORPORATE SERVICES DEPARTMENT Meeting: Date: COUNCIL kC?60! LLf/o-r,:rlC - D 710 - 09 Monday, February 9,2009 Report #: COD-014-09 File#_ By-law # Subject: BROADBAND EXPANSION OPPORTUNITY - PROVINCIAL PROGRAM Recommendations: It is respectfully recommended to Council the following: 1. THAT Report COD-014-09 be received; 2. THAT the Municipality of Clarington make an application to the Ministry of Agriculture Food and Rural Affairs for funding from the Rural Connections Broadband Program for the provision of high speed internet service for the public and private sectors within the Municipality of Clarington on the basis of no cost to the municipality, other than possible in kind contribution and consulting cost identified herein; 3. That the Director of Corporate Services be authorized to sign the application and any resulting agreements associated with the program; 4. That the Manager of Purchasing be authorized to proceed with the evaluation of the submissions and select the Internet Service Providers and establish the terms of an agreement for the supply, installation and operation of broadband distribution network within the municipality; 5. That funding in the amount of approximately $15,000.00 for the provision of consulting services be provided from account # 100-16-163-00000-7160 with costs to be included in the grant application for funding to the extent possible and from the Region and the grant; 6. THAT staff work with the Regional Municipality of Durham to develop an in kind cost sharing arrangement for the municipal contribution to the project; and 7. THAT staff report to Council on the results of the application to the province and the negotiations and sele 'on of a service provider. Submitted by: Reviewed by: ~~~ Franklin Wu, Chief Administrative Officer CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T(905)623-3379 F (905)623-4169 REPORT COD-014-o9 PAGE 2 OF 4 1. BACKGROUND 1.1. At their meeting held October 27, 2008, Council approved a report authorizing staff to proceed with a Request for Expressions of Interest (EOI) from Internet Service Providers. The purpose being to determine the interest in providing infrastructure and services required for the expansion of broadband coverage in the Municipality of Clarington with the focus on the rural and under served areas. A copy of Report # COD-062-08 is attached as Schedule A. 1.2. The EOI was also intended to provide sufficient information for the completion of the application for funding under the Rural Connections Broadband Program offered through the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA). Under this program the province will fund up to one third (1/3) the cost of the infrastructure with the balance of the funding coming from the private sector partner and the municipality. The program does not preclude the possibility of the private sector partner contributing two thirds of the cost. 2. COMMENTS 2.1. A request for expressions of interest was issued and publicly advertised inviting interested internet service providers to download the document, explore the opportunity and submit their expression of interest in becoming the service provider. A total of thirteen (13) firms downloaded the document and a total of four submissions were received. Due to the proposed discussions that will have to take place with the service providers during the selection process it is recommended that the names of interested parties and the cost e~timates be kept confidential. Accordingly, a tabulation of the submissions received is provided as a confidential attachment; see Schedule "B". 2.2. As noted, the provincial program contemplates funding from three sources, the ISP, the municipality and the province. This is the manner in which the EOI was drafted and the manner in which the proponents responded. Since the issuance of the document the municipal bUdget has been reviewed and passed and significant discussion took place concerning the increase in operating costs and the concern for the budget increase. It is also noted that the budget made no provision for the broadband expansion project. Based on conversations with staff at the Region of Durham we understand that their budget will not make provision for broadband expansion. The expectation going in to this project was that both the Municipality and the Region would contribute to the one third municipal share of the project. REPORT COD-014-09 PAGE 3 OF 4 2.3. In view of the budget constraints the interested proponents that had submitted on the basis of a 1/3, 1/3, 1/3 split were contacted to determine if they would consider a 2/3 vendor, 1/3 provincial grant split. In each case the response was positive with some qualifications that the bidder might seek some in kind input from the municipality. The in kind contribution would include staff time and consideration of the use of municipal sites for placement of towers or antennas. 2.4. Notwithstanding the foregoing, it is recommended that we acquire the services of a consultant familiar with the roll out of broadband infrastructure. The estimated cost for this service is approximately $15,000.00 and in the interest oftime and continuity staff is recommending the services of the consultant utilized by the Region during their broadband project. Should the grant be successful, one third of these funds will be reimbursed. With respect to these costs, the municipality and the Region have agreed to a cost sharing arrangement with the municipality's share coming from consulting accou nt #1 00-16-163-00000-7160. 2.5. With the submission of the proposals there is sufficient information to prepare the grant application. Since the provincial selection process will take some time to complete staff will use the time to evaluate the EOI submissions leading to the selection of a service provider with contract award being subject to our receiving the provincial grant. The objective being an agreement leading to broadband service in Clarington offering the best overall benefits to the municipal residents and businesses. 2.6. In the initial report we indicated as follows: "If the response is favourable and funding is feasible an RFP can then be issued to select the service providers, or in the event only one service provider expresses an interest it may be more productive to enter into direct negotiations". After reviewing the submissions and discussing them with the participating staff of the Region staff feel that there is sufficient information in the Expressions of Interest that will allow for productive discussion with the service providers and the selection of a preferred ISP. In short, it is recommended that staff forego the proposed RFP and initiate discussions and an evaluation process leading to the selection of a service provider in the event we are successful in obtaining the required funding. REPORT COD-014-09 PAGE 4 OF 4 3. CONCLUSION 3.1. With the success of the EOI process staff have sufficient information to move forward with the completion of the OMAFRA grant application and the selection of the service provider. 3.2. Based on the information provided in the EOI it would appear that a very high percentage of households in the municipality would have access to the internet at a competitive cost thereby achieving the following objectives set out in the Rural Broadband Partnership Program; · Reducing broadband access gaps in rural southern Ontario; · Enabling small and medium size business to fully participate in the digital economy; . Enabling municipalities to use broadband infrastructure for enhanced computer applications and providing innovative services to citizens; . Improving public access to e-govemment services and information; and · Supporting businesses and citizens to effectively utilize broadband for economic and social development. 3.3. In view of the foregoing it is recommended that staff be authorized to proceed as follows: · Complete the grant application; . The Director of Corporate Services be authorized to sign the application; · Staff be authorized to continue discussions with service providers and complete the selection process; · That.staff be authorized to proceed with an agreement for consulting services with the selected consultant at a cost of approximately $15,000.00; . Provide a follow up report to Council on the outcome of the selection process and the results of the grant application. SCHEDULE "A" REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE (.<e:;o\ v.b~~P A-1978-C8 Date: Monday, October20, 2008 Report #: COD-062-08 File#_ By-law # Subject: BROADBAND EXPANSION OPPORTUNITY - PROVINCIAL PROGRAM Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. THAT Report COD-Q62-D8 be received; 2. THAT the Municipality of Clarington undertake an Expression of Interest (EOI) process to determine the interest of service providers in the expansion of broadband coverage in the Municipality 3. THAT, staff report to Council on the results of the EOI for information with respect to private sector interest, projected cost and funding alternatives; 4. THAT pending a satisfactory response to the EOI, the Municipality coordinate with the Regional Municipality of Durham on the submission of a grant application to the Province of Ontario for funding of up to one third (1/3) of the of the project cost; 5. THAT staff investigate cost sharing arrangements with private sector service providers as part of the EOI process; and 6. THAT staff wor!< with the Regional Municipality of Durham to develop a cost sharing arrangement for the balance of costs not covered by the Provincial Grant and/or private sector service providers. Submitted by: Reviewed by: ranklin Wu, Chief Administrative Officer CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1C 3A6 T(905)623-3379 F (905)623-4169 REPORT COD-062-08 PAGE20F4 Schedule "A" 1. BACKGROUND 1.1. In March 2008, the Government of Ontario announced a $30 million, four-year (2007 to 2012) initiative designed to reduce broadband infrastructure gaps in underserved rural regions in southern Ontario. Rural Connections will have a positive impact on families in rural Ontario by leveraging broadband infrastructure investment from private-sector businesses and public partners to enhance economic development and improve access to public services such as e-Iearning, e-health and e-government. ii 'I " 1 "~ 'oj :J 'I :1 'j I I I 1.2. Broadband is defined as a high-capacity link between end user and access network suppliers at a minimum download speed of 1.5 megabits per second. , :~ 1 ; ~ , "I ~ i 1.3. The Ontario Municipal Rural Broadband Partnership Program was designed to address barriers to economic growth, and ensure that Ontario's small town and rural communities remain viable, healthy and vibrant places in which to live, work and invest. The provincial initiative dedicates funds to capital infrastructure as well as economic development outreach for small, medium enterprises and entrepreneurs. I " , 1.4. The province has established the program with two key submission dates per year until the funding allocation is committed. The current opportunity to make application for funding under the program expires February 12, 2009. ,j I I ,,\ '1 1 , j :1 1.5. The Ontario government will invest up to 1/3 of the total eligible costs for the project. The municipality is responsible for securing the remaining share. This can be achieved through cooperation between upper and lower tier municipalities and the private sector. 2. COMMENTS ,j 2.1. The Municipality of Clarington encompasses 220 square miles comprised largely of rural areas accommodating small villages, hamlets and farming communities with some minor industrial development. These areas lack the traditional services such as sewer, water and broadband capability enjoyed by the larger towns along the 401 corridor. :1 I 2.2. Bringing broadband capacity, that will meet the needs of the business and agricultural community, is key to increasing the competitive advantage of our rural areas. Lack of the traditional services of water and sewer creates a significant barrier to economic growth. The absence of these services is also felt by the residential popUlace as well. The province has recognized the limited capacity of rural Ontario and is providing this one- time funding opportunity to "jump-start" rural economic development. REPORT COD-062-oa PAGE 3 OF 4 Schedule "A" 2.3. The Region of Durham's Community Strategic Plan, since its inception, has identified a Strategic Plan Action (E3) to advocate for improved telecommunications and broadband services throughout the Region. The Region has included this action as an integral part of their work plan for many years. More recently it has been identified in the Rural Economic Development Strategy. " ,I .,~ :1 ~ :1 i~ 'I 2.4. The Regional Municipality of Durham was successful in receiving funding for the implementation of a broadband development project designed to enhance broadband access to the Uxville Industrial Park located in the Township of Uxbridge; Scugog Industrial Park; and throughout the Township of Brock. jH ,~ ;\ 2.5. Durham Region is participating in the project in partnership with the provincial government, local municipalities, telecommunication service providers Compton Communications and OmniGlobe Networks, and other private partners. The Region has assisted in the grant application in the northern municipalities and contributed up to half of the municipality's one third contribution. 1 :l ri 2.6. The Region of Durham is pursuing the expansion of broadband services in other areas of the Region and as noted they are in the process of engaging a consultant to provide outreach and awareness on broadband capabilities. Under the circumstances it would be appropriate to coordinate with the Region to develop the requirements for an EOI to address the Clarington requirements. For clarification, with the Provincial program the grants will be allotted based on the best proposals received. In short, it is a competitive process between southern Ontario communities. If a submission is made by Clarington and we are successful the grant amount can be as high as $1,000,000.00 toward broadband expansion. The balance of 2/3's funding will have to come from the private sector, the Municipality and the Region. ~ .. ,1 . I I ~ , ;~ I 2.7. In order to determine the interest of the private sector in exploring the provision of broadband service to the rural areas of Clarington it is proposed that a Request for Expressions of Interest (EOI) be issued, If the response is favourable and funding is feasible an RFP can then be issued to select the service providers, or in the event only one service provider expresses an interest it may be more productive to enter into direct negotiations. 3. CONCLUSION I 3.1. With the introduction of the Ontario Municipal Rural Broadband Partnership Program an opportunity exists for the expansion of broadband coverage to the rural areas of ~ REPORT COD-062-08 PAGE40F4 Schedule "A" Clarington. This is seen as an important opportunity to reduce or remove one deterrent to rural economic development. 3.2. In order to make this expansion viable a public - private cost sharing arrangement is proposed in order for the expansion initiative to proceed as envisioned by the Province, I ,I 'l ';i !I. ,II 'I '!i " , ~ 3.3. In order to determine the interest of the private sector in the opportunity to expand broadband coverage, and by association, their market, it is proposed that a Request for Expressions of Interest be issued to determine the interest of the broadband carriers. ,j ;1 :! ~ jl 3A This EOI process would, of necessity, be coordinated with the Region of Durham to ensure their input at all stages of the process. Should the EOI process produce positive results and broadband providers are interested in moving ahead (including provision of partial funding), coordination with the Region with respect to additional funding will continue. i I "I I 3.5. Reports will be provided at the various milestones in order to update Council on the results of the EOI, results of the grant application and funding requirements as well as the results of the RFP as Council approves progression to each stage. -