September 11, 2002

1:30 p.m.

Commissioners’ Conference Room

APPROVED 12/4/02


Commissioner Bill Dwyer presided with Commissioners Bobby Green, Sr., Anna Morrison, Peter Sorenson and Cindy Weeldreyer present.  Acting County Administrator Dave Garnick, County Counsel Teresa Wilson and Recording Secretary Melissa Zimmer were also present.




Ken Miller, P. O. Box 480 Mapleton, Port of Siuslaw Commissioner.  He represented the City of Florence Telecommunications Task Force.  He noted they supported the measure on telecommunication infrastructure improvements.  He asked the Board to support this matter and the City of Florence.


Tom Grimes, 33 Spyglass, Florence, stated the Telecommunications Task Force in Florence had a package to be presented to the Board.  He said they had identified their needs for service and determined customer base.  He added they designed an available network architecture.  He said they established the need for the service but it hadn’t gone to the ring stage.  He added none of the fiber was in the ground.


Dwyer asked what would happen if this matter didn’t pass.


Grimes responded that Florence was looking at all possibilities.  He said the City had seen enough interest with education and from the business and health care sectors to provide high speed access to the network.


Bob Langunshutz, 4886 Oceana Dr., Florence, stated he is the Finance Manager for the City of Reedsport and is a citizen representative on the Florence Telecommunications Task Force.   He addressed the distance learning needs and how they relate to the approval of this matter.  He read a statement into the record from Bob Purscell.  He said they scoped this project out at a high level with other individuals who provided them with a costing figure for the City of Florence.  He said, based on the requirements they put forth, the City of Florence has $500,000 to have everything installed.


Roger Bennett, City Manager, City of Florence, described Florence’s interest for telecommunications as a community resource.  He said their mission with the task force was to look at the institutional needs of the agencies that already operate in Florence and how they could compete in today’s business environment.  He noted the City Council of Florence looks at telecommunications as a significant resource.  He said the task force had been studying concepts and they view the proposals as a resource that Florence could plug into.


Mike Dean, Mayor, Coburg, stated that the City of Coburg strongly supported the proposal from an economic development point of view.  He thought that economic development was not only the attraction of business in Coburg, but the maintenance of current business.  He said in order to maintain its character and business as a strong independent community, Coburg had to attract the kind of economic activity that it currently has.  He noted that any step they could take to lighting the fiber would be good. He added that the City of Coburg’s intention is to lay conduit when they do their sewer project.  He said that economic development at this time requires broadband web access and this is a significant step in that direction.


Warren Weathers, Mayor, Lowell, noted that in 1994 Lane County invested close to $200,000 in the industrial park in Lowell.  He said in the past year in Lowell, they received grants for $20,000 and a local employer put in another $3,000 to get fiber extended to the industrial park.  He stated that lighting the fiber would make a difference.  He thought if they lit the fiber that Lowell would be able to double employment within the next five years.


Linda James, City of Creswell, stated the City of Creswell had been a member of the Fiber South Consortium.  She believed that in the future this would be a key to their economic health and development.  She said in reviewing the recommendation from the Economic Development Standing Committee, she supported giving the money to the Fiber South Consortium.  She added they also supported Van Vactor’s suggestion of doing a model or project for either Veneta or Lowell at a cost of $90,000.


Jay Bennett, City of Oakridge, entered into the record letters asking for the Board’s support.


Scott Bartlett, 1445 E. 21st, Eugene, stated that a certain group of people had elected to cleanse body organs that constitute a public health hazard in the Wayne Morris Free Speech area.  He asked the Board to focus on this from a public and mental health perspective instead of free speech.




a.  ORDER 02-9-11-8/In the Matter of Appropriating $353,650 of Economic Development Strategic Investment Reserve Funds for Telecommunications Infrastructure Improvements.


Peter Thurston, Economic Development, handed out attachments to the packet. (Copy in file).  He stated the Economic Standing Committee to the Board of Commissioners took an action during the course of reviewing projects to refer this specific project for the Board to consider funding out of reserve funds.  He noted it was a large project and the only infrastructure project.  He said the committee ranked the project high, but didn’t recommend it for funding because the amount was much more than the other projects.


Thurston noted the funds had accumulated over several years for the purpose of strategic economic investment.  He said using the funds in whole that remain in the reserve is an issue.  He said the proposal buys local equipment that would light the fiber.


Milo Mecham, LCOG, explained the proposal is before the Board because it is an economic development proposal.  He noted that telecommunication services is a type of infrastructure that businesses depend on.  He added it had become a major foundation of Eugene’s economy.  He said if rural communities do have telecommunication services, they end up paying more for the service and they are behind other communities with services.


Mecham stated issues had been raised as to whether or not less money could be spent.  He commented the project could be viable if less money were spent.  He noted the proposal was addressed to the Economic Development Standing committee, recognizing that it was outside of the boundary of their usual consideration.  He said they asked that this be treated differently and not put into competition with the other proposals.


Mecham noted questions were raised on whether this was a risky investment.  He responded it wasn’t a risky investment in that the County’s investment would not be put into something where there would be no return for the investment.  He said this investment needed to be made to set up for those developments to happen and without this, Lowell Industrial Park would continue to lag.  He said the kind of investment that is made for economic development purposes brings good things into the community.


Thurston read a letter into the record from Jan Wellman, City Administrator of Veneta.


Dwyer asked what would happen with Lowell if they didn’t receive this funding.


Mecham responded that the consortium and PCI NW and all of the communities would continue to look for other sources of money to build a system.  He noted the problem PCI NW had encountered was a lack of capital.  He said they were trying to get the capital from the places they had identified.  He said they have applications in and would continue to work on more applications for federal and state funding.


Weeldreyer noted at the time they put out the RFP, that PCI NW was awarded the contract and the entire economy was different than what they are facing currently.


Mecham said Lane County and PCI NW were pursuing every option in order to make it work.  He said they need the fiber for the connection between Eugene and Veneta in place.  He added the equipment in Eugene is needed to get the signal from Veneta and they need to connect the equipment in Veneta to the people of Veneta.  He said they were trying to build this up and Lane County’s contribution was an important part.


Sorenson asked which community was better demonstrated for the fiber.


Mecham responded the smallest investment would be Lowell because they had succeeded in getting the fiber to connect the backbone to the industrial park.  He added given the sizes of the two communities, there is more of a long term advantage in Veneta because it is a larger community, but it would cost more.  He noted it would be better to connect all four communities than to connect any one of them.  He said that Lowell had the best advantage because they had already made more investments than the others but all of the other communities are just as needy.


Anette Spickard, Budget Analyst, stated she wanted to recommend a slow going approach because telecommunications is a slightly risky investment and they wanted to see the availability of the fiber project to succeed, but on a more gradual basis.


Sorenson asked if the cities were helping by putting up some of the money.


Spickard responded the way they are talking about using this money in the long run is to bring private businesses on line, not just to support other government agencies.  She said they would look at the revenue sharing arrangement that PCI NW and Fiber South have once they start getting business subscribers on the service.  She said that, based on the information she has, Veneta would be the best community as they demonstrated they had partners who wanted to participate.


Weeldreyer stated she asked Mecham to work with PCI NW to develop a proposal that would give Lane County an opportunity to step into the role of the private investor to be able to start this project and to keep it on task.  She said because the deadline of the RFP was running out, they decided to treat this separately because it was so large.


Mecham noted there was a question as to whether PCI NW was in breach of the contract and if so, to clarify if Lane County was being asked in part to cover equipment which PCI NW was required to provide as part of the agreement.  He said the only reason PCI NW was not in breach of the contract is because the consortium hadn’t decided to initiate a breach of contract action.  He said they had not performed the contract as originally laid out due to a lack of capital.  He said the next step would declare PCI NW in default.


Mecham noted there was a question about Lane County being asked to invest in Reedsport and Klamath Falls.  He stated the intent of the proposal was that the investments in Douglas and Klamath Counties would come from multi-region monies that the consortium had been awarded.  He said the intent was to spend Lane County money in Lane County.  He stated the proposal would work if the Board made it a requirement.  He suggested the Board pick a maximum amount that the County would be willing to invest in this and then require matching contributions from the communities where the investments are going to be made.


Morrison asked who would be putting up money for the Veneta project.


Mecham said there are three parts.  He said they need the equipment in Eugene that is connected to the world, the connection between  Eugene and Veneta and they need the equipment and fiber in Veneta in order to get the signals from Veneta to send them out.  He said a lot of the money includes the connection between Eugene and Veneta and that is the fiber that the consortium already has.  He said when discussing the value of the investment, that has to be counted.  He added the consortium got that at either a free or reduced rate and it had an accounting value.  He noted some of the gap is the asset that the consortium continues to bring to the program and they have the fiber and are making it available.  He said new funding to light Veneta, (including a connection in Eugene) would be in the area of $125,000 and some of the investment put in Eugene would benefit the others.


Morrison asked if any of the funding didn’t materialize what would happen with the proposal.


Mecham responded the proposal is designed so that if Lane County gives the consortium $353,000, the equipment would be installed and there is some money for that connection.  He noted there is fiber that would get light into those four communities.  He stated if the multi-region money does not come through, there won’t be any signals into the Drain or Klamath Falls area unless they get other money.  He said the money they are asking for from Lane County would bring signals to the communities they had listed.  He said it would bring fiber to the city hall and the industrial park if it is within the distance. 


Rick Rose, PCI NW, stated they were in support of the proposal for the lottery funds to be used with the Fiber South Consortium.


Sorenson asked where Lane County was in comparison with other communities with the evolution of fiber.


Mecham responded there is a variation.  He said that Lane County is positioned to jump ahead.  He noted at the present time Lane County is in the same position as 90% of the state.  He said the communities that are further ahead are that way because there had been a public investment.  He said the City of Ashland had made an investment of public monies and Monmouth is starting to do that.  He noted the only places where there is private activity is La Grande, where they used public investment to help finance the construction of equipment turned over to a private company.  He reported they saw significant economic development benefits. 


Rose stated the problem with most of the State of Oregon is that there are two major points of presence: Eugene and Portland.  He said an internet provider on the Coast would have to run the circuit to Eugene.  He said with the consortium, they were not going to offer new products, they were going to offer products at a lower price so the Coast could reach Eugene at a reasonable cost to be competitive.


MOTION: to approve ORDER 02-9-11-8.


Weeldreyer MOVED, Sorenson SECONDED.


Garnick noted the amount that is now available is $343,186 as the amount was amended in the morning meeting.


Trina Laidlaw, Assistant County Counsel, said when she questioned Reedsport and Klamath Falls, the total that was requested to be approved was $353,650.  She said on the budget narrative, Klamath Falls and Reedsport had $55,000 added in to make up a total of the $353,650.  She said by her calculations and what Mecham said, it was a mistake and by subtracting the $55,000 from the $353,650, the amount is $298,650.  She asked if that was part of the motion.


Sorenson asked if the administered funds would be going to Klamath Falls and Reedsport.


Mecham responded that was correct.


Weeldreyer concurred.


Sorenson asked what the amount would be if they observed the five percent prudent reserve.


Spickard noted it would be $21,000 that would be dropped off of the remaining amount.


Sorenson suggested observing the five percent prudent reserve.


Dwyer was against the proposal as it fails in six major areas.  He said it had not been worked out mechanically.  He added the technology is changing that might make the fiber obsolete.  He also indicated there were legal questions that were not answered.  For all those reasons he was “no” on this issue.


Green suggested scaling this matter down to the City of Lowell.  He was against supporting the whole matter.  He wanted to give other communities a chance if they could come up with funds.


Morrison asked about number 6 under the File Note, if PCI NW wasn’t able to fund the money to purchase the equipment, if they had the money to lease it back to the consortium.  She asked about the revenue sharing arrangements.


Mecham responded from the consortium’s perspective, they don’t have a sharing revenue arrangement because they are just leasing the fiber.  He said they could do the same with this equipment.  He said they would have to negotiate a new agreement.  He noted a model they could do with the new situation is that the payments to the consortium could generate the money.  He said it would be a percentage of revenue.  He said they would put the equipment in place, lease it from Lane County and promise to pay a percentage of the revenue.  They would sell a service to a customer that generates revenue and pay Lane County a percentage.  He said that way they would not have the capital shortage problem as they would be able to get revenue out of the sale of the services.  He said if the Board approves the proposal, he would regard the consortium as being obligated to follow the proposal.  He noted the proposal is that Lane County would purchase and oversee the installment of the equipment and then turn it over to a private enterprise to run it with the intent of generating revenue from that to reinvest in more of the same type of investment.  He said this was an appropriate way of spending economic development money.


Weeldreyer stated she had been working on this for the past three years.  She said they had done award winning work, receiving a national award for this type of collaboration across counties.  She urged the Board to pass this order.


Sorenson asked Weeldreyer about scaling the project down by providing a smaller investment of $90,000 to get the project started.


Weeldreyer said that any support the Board could give to moving the project forward would be appreciated.  She wanted Lane County to invest its strategic reserves to benefit the most number of communities in the shortest possible time.  She agreed to a smaller project.


With regard to the revenue sharing, Laidlaw noted that part of the revenue sharing would go to Fiber South.  She noted that under the agreement with PCI NW, that company was supposed to also get part of the revenue sharing.  She said if there was going to be a renegotiation of the contract, PCI NW should not continue to get their full piece of the revenue sharing if they are not coming up with the investment.  She thought Fiber South could keep some of the revenue but that the company should not keep the entire amount.


Sorenson asked if Weeldreyer would accept an amendment to direct that Thurston and Laidlaw come back with the suggested contract changes as well as the allocation of $90,000 to a community in Lane County.


Weeldreyer responded that she wanted to leave the motion as it was.  She said if it failed, she encouraged someone else to make a comparable motion.  She wanted the motion to stand in the record so she could vote on it.


VOTE: 2-3 (Motion Fails)


MOTION: to direct Thurston and Laidlaw to come back with the contract change that Laidlaw suggested and the allocation of the money as stated in the file note.


Sorenson MOVED,


Morrison asked if they were choosing a city.


Sorenson responded they weren’t choosing a city, he requested bringing it back.




Green asked at what point did Laidlaw become involved in this process.


Weeldreyer noted that County Counsel had been involved in this project from the first day.


Laidlaw stated she became involved in the process when she was reviewing contracts relating to consortiums in Lane County.  She didn’t recall seeing the PCI NW agreement with Fiber South.  She said that Lane County was not a party to that agreement.


Dwyer recalled the motion is to have Laidlaw and Thurston do a scoping and to come back with a more modest proposal, not to exceed $90,000 that won’t name any specific entity but to find a project that would demonstrate that the investment would work and that there would be a benefit to a community as a result of this investment.


VOTE 5-0.




Green raised concerns about the homeless camps.  He said he serves on the Human Services Commission and on the Housing Policy Board and things had been done on homelessness.  He said when someone makes a comment that Lane County is not doing anything, that is not correct--they are doing quite a bit.  He added there is a task force that is staffed by the City of Eugene and they look at different strategies to deal with homelessness.  He noted from the Housing Policy side, when they talk about affordable housing, their mission is to move people from homelessness to more sustainable housing.  He added they find some people are not willing to go through those requirements.


Green noted that at lunchtime, one Lane County employee was harassed and it bordered on vulgarity.  He hoped that the Sheriff’s Department would remind these people about their conduct.  He said if stronger action was needed, he encouraged the Sheriff’s Department to do what was necessary.


Dwyer stated there is a public health threat and they have to ask Rob Rockstroh to investigate as the result of the misuse of the plaza.  He also noted there were pieces of the plaza that are disappearing off of the wall.  He said there could be a liability question for the County.  He recommended David Suchart, Management Services, review the liability question and to fence off the areas that might pose a threat to the public.


There being no further business, Commissioner Dwyer adjourned the meeting at 3:45 p.m.



Melissa Zimmer

Recording Secretary