Tax increment financing pushes fiber plan for Jasper
Better internet infrastructure is required for the continued expansion of business in Jasper.
Mayor Terry Seitz, addressing the Jasper Redevelopment Commission this morning, added to their discussion regarding tax increment financing (TIF) districts with information about the continued potential build-out of fiber optic lines through the city.
A project to install fiber optic in Huntingburg and Jasper, and along U.S. 231, through Evansville-based internet service provider Metronet was placed on hold last June. The company informed the city they would be concentrating on a larger market and stated the potential Dubois County project was third or fourth on a list of installations. Jasper, as part of an interlocal agreement with Huntingburg and the county, had been given the go-ahead to be the lead agency in creating a TIF district for the line to help pay for the installation.
Seitz stated today that the city was in talks with Metronet and other internet service providers to upgrade the internet connections and telecommunications between the city’s buildings. Seitz said the city wants the internet service provider to build out fiber optic to the residents and businesses — called fiber to the premise — as well as the city offices. “We want to leverage with these vendors in saying ‘you want to serve us, you serve the whole city,'” he explained.
He said of the internet service providers contacted, only one had shown interest in expanding the fiber to the whole city; Metronet.
Metronet requested the city create a TIF on the fiber opticlines. Metronet would install the fiber and use the tax increment finances to pay a portion of the bond on the project.
According to Seitz, the city feels that it will have to step up to attract the private investment to create the internet infrastructure. Businesses in Jasper have paid to install fiber to their company but the internet connections are not being added for residents.
“I have an employer in the area that says fiber to the premise will change their business,” Seitz explained. “They are looking at a business model that allows more working from home, telecommuting. They can’t do it with the current systems. Fiber can do that.”
This Friday, the city will submit an amended request for proposal to four internet service providers to create the fiber optic network. Responses to the request are expected by the end of the month.
“It could be our first ever TIF, and it is not a typical TIF,” Seitz said.
According to Seitz, the cost is to install fiber to the premise in the city is estimated to be at least $15 million.
Can the $15 million be clarified? What exactly does $15 million get the city of Jasper? Is it fiber between city buildings, city buildings and business, or something else? Where exactly is the $15 million going to come from and is the city writing checks to Metronet from tax revenue?
It is estimated that the project to bring “fiber to the premise” throughout the city (residents, businesses and government buildings) will be $15 million. This is the cost for Metronet to install the infrastructure. The TIF funds created by the tax assessed value of the fiber would be used by Metronet to pay for some of the investment.
thanks!
In Metronet’s case, the Jasper Economic Redevelopment Commission would recommend a tax increment finance district be established on the new fiber optic line. The Jasper Common Council would then have to approve the TIF district. Metronet will know how much they will have to pay in taxes for that new infrastructure they install. Metronet can then request an economic development bond based on a percentage of the increment created; in this case 100 percent of the increment will be new so it can all be used towards the bond. The redevelopment commission would decide how much of that new increment can be allotted to the economic development bond. Metronet would then receive a bond on the front end of the project based on that increment.