Arrangement made to repay UI for UC2B costs

Arrangement made to repay UI for UC2B costs

CHAMPAIGN — The University of Illinois will want to be paid back by the Urbana-Champaign Big Broadband nonprofit when officials know how much the school had to cover in expenses for work left undone after a federal grant expired.

UI spokeswoman Robin Kaler on Tuesday said the university does not yet know what that number is, but right now, it continues to build the high-speed Internet network that had been paid for largely with federal money.

"It could be a small amount, and it could be fairly substantial," Kaler said.

Officials in Champaign, Urbana and at the UI have been building the fiber Internet network since 2010, when they were awarded a $22.5 million federal grant to do so. The state also chipped in a $3.5 million grant, and the local agencies contributed some of their own.

The local agencies had been paying up front and getting reimbursed by the federal government on a continual basis throughout the life of the grant. But the federal grant expired on Sept. 30, a date that had already been extended nine months, and the cost for any work completed after that fell onto the shoulders of the local agencies.

Brandon Bowersox-Johnson, who was selected Tuesday as chairman of the nonprofit board in its first meeting, said the remaining work appears to be hooking up the last few apartment buildings to the network and collecting maps and diagrams from the contractors so UC2B officials know where all the fiber is.

Bowersox-Johnson also did not know how much that final cost might be.

"Our staff felt like because all the invoices aren't in, they didn't even want to put out a possible number," Bowersox-Johnson said.

Bowersox-Johnson has been deeply involved in the project since its inception — first as a member of the Urbana City Council and then later as one of the committee members overseeing its construction and implementation.

He said the timeline had been tight the whole way, and that is why some work was unfinished when the grant expired.

"The schedule of the project had always been a race to the finish for the whole three years," Bowersox-Johnson said. "To build this many miles of fiber-optic under the ground was just a marathon."

Kaler said the UI has worked out a 10-year repayment schedule with the newly incorporated nonprofit agency that now controls the Internet network. When officials know how much the final bill is, the nonprofit will repay that amount, interest-free, between 2017 and 2026.

Kaler said the deal was arranged so the repayment would not put too much pressure on the nonprofit as it tries to establish itself in a competitive Internet market.

"The 10-year term was chosen specifically so it does not do that," Kaler said.

Bowersox-Johnson said that, with the payments starting in 2017, UC2B should have time to establish its financials.

"I don't think we'll be under any immediate financial pressure," Bowersox-Johnson said.

The arrangement was discussed at the first meeting of the nonprofit board on Tuesday. The private nonprofit was incorporated by the government agencies — the cities of Champaign and Urbana and the UI — which used to control the fiber Internet network that was built with public funds.

During its first meeting, the board accepted the assets that had previously been controlled by the government agencies, and it adopted the same version of the bylaws that the cities and the UI had approved, Bowersox-Johnson said.

The board officially named former Urbana comptroller Bill DeJarnette as its interim executive director through March. DeJarnette this summer publicly resigned from his city of Urbana job citing a "toxic" work environment, but he has been deeply involved with the UC2B project since its beginning.

The nonprofit is now responsible for providing Internet service over that network, which was built in underserved neighborhoods where 40 percent or fewer residents had Internet access. It also connects hundreds of "anchor institutions," which are private or public buildings that provide services to the community.

The nonprofit will also be responsible for building out the network to the rest of Champaign-Urbana if it chooses to do so. That has been the goal of city and university officials for years.

"It kind of has its own legs," Bowersox-Johnson said. "It's up, alive and walking on its own."

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