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Aurora, Ill., to Apply for New $100M Broadband Grant

The City Council this week approved an application for a middle-mile infrastructure grant that was part of the bipartisan Infrastructure Investment and Jobs Act passed by Congress and supported by President Joe Biden.

Aurora, Ill._shutterstock_1116463199
(TNS) — The city of Aurora will apply for a $100 million federal grant to help pay for broadband internet for the entire city.

The City Council this week approved an application for a "Middle Mile Infrastructure" grant that was part of the bipartisan Infrastructure Investment and Jobs Act passed by Congress and supported by President Joe Biden.

Overseen by the National Telecommunications and Information Administration, the goal of the program is to reduce the cost of connecting areas that are unserved or underserved by internet access, officials explained.

"The internet is no longer a luxury, it's a necessity," said Michael Pegues, Aurora's chief information officer. "This will help us close the digital divide. We actually view this as a fourth utility."

The city has been working on and off for a while on the connectivity program, at one time calling it a Smart City initiative. But Pegues said this week that because the city views connecting all Aurorans to the internet as being no different than gas, electric or water needs, the program now is referred to as "Broadband as a utility."

If received, the grant would defer the overall cost of building broadband for the estimated 66,000 residences and businesses in the city during a five-year period beginning next year through 2028, Pegues said.

The City Council's Infrastructure and Technology Committee earlier this week recommended the application for the grant and moved it immediately to Tuesday's City Council meeting, where aldermen approved it. The reason for the rush is that the grant application has to be into the government by Friday.

John Russell, who works as a grant writing consultant for the city, told aldermen at the council meeting this week that it is the most involved and largest grant he has seen in the nine years he has worked for Aurora. He spoke through an internet hookup from his home in Los Angeles.

"This project is going to bring internet to every one — every business, every home in Aurora," he said. "It will greatly improve the city."

The overall cost of the program is unknown, since the project would have to be bid. But at this week's Infrastructure and Technology meeting, Chris Minick, the city's finance director, said the cost is considered a sharing program, with the federal government paying about 70% and the city about 30%.

He said if the city gets the full $100 million, the city would look at financing between $42 million and $43 million. If the city gets only $50 million, then the city would only finance about $20 million.

Minick said the city would look to issue revenue bonds for its share, and pay them back with money the customers — residences and businesses — pay to get the broadband service. One of the grant requirements is that a jurisdiction, such as the city, would have to have a low-cost pay plan for subscribers.

Minick said revenue bonds are often used instead of general obligation bonds when there is a specific revenue stream tied to their payback. They are the preferred use for any kind of utility expansion.

"So there is no way the money would come from general taxation," he said.

While the broadband service would be extended to the entire city, the priority in the buildout would be unserved and underserved areas, Pegues said.

The Middle Mile Infrastructure program is funded with $1 billion and is a competitive grant program. The money comes from the overall $65 billion appropriated by Congress for the investment in broadband.

© 2022 The Beacon-News (Aurora, Ill.). Distributed by Tribune Content Agency, LLC.