Siloam Springs cable vote down to the wire

by The City Wire staff ([email protected]) 202 views 

Parties on both sides of a controversial proposal to add a high-powered broadband system to Siloam Springs’ utility services say they want to get out the vote next week.

For them, that’s also meant ‘get out the pocketbook.’

As of Tuesday, records show opponents of the proposal have outspent the city almost 3 to 1 trying to get out their message. The opposition group, called Arkansans for Limited Government, spent all of its advertising money with the group leader’s firm.

Siloam Springs city officials propose to invest $8.3 million to run fiber optic cable directly to homes and businesses and add cable, Internet and phone services to its city-owned utilities. If passed, the city could provide more bandwidth and faster service than currently offered by private providers, officials say, while providing new revenue for the city and an enticement for new industries. The project would be funded by reserve monies and be paid off in 12 years and have a positive cash flow after three years, if projections are accurate.

The city already owns the electric and water departments.

If the measure is approved, Siloam Springs will join Conway and Paragould as the only Arkansas cities to offer city-owned broadband services. Nationwide about 150 municipalities offer broadband services, including nearby Sallisaw, Okla.

The city’s board of directors studied the issue for 18 months before deciding to put it to a referendum.

Residents opposed to the measure, and broadband providers Cox Communications and CenturyLink, contend the proposal is too risky, would cost more than projected, and is a case of government overstepping its bounds.

But it costs money to get those differing points of view to the voters.

Judy Toler, adminstrator’s assistant for Siloam Springs, said the city spent $6,847.32 on informational materials and costs for three town hall meetings this spring. The city brought in Dave Stockton, principal of Uptown Services Inc, the company which researched the project for the city, in addition to a representative from different cities with city-owned broadband, for each meeting.

According to a pre-election financial report filed Tuesday (May 15) with the Arkansas Ethics Commission, as well as a report filed with the commission last month, Arkansans for Limited Government spent $18,459 to get its message out. All of that money was paid to Impact Management Group, the Little Rock public relations firm in which Clint Reed is a partner. Reed of Little Rock is listed as the incorporator for Arkansans for Limited Government, according to registration papers filed in November with the Secretary of State’s Office.

“Typical campaign stuff,” Reed said of the coalition’s expenses.

The records show that Arkansans for Limited Government paid Impact Management $4,284.74 for advertising, $4,275.97 for a direct mail campaign, $1,815.80 for survey/voter identification calls, $487.50 for other phone calls, $7,500 for survey research, and $95 for a Freedom of Information Act request.

A chunk of the direct mail and advertising monies — $3,100 — was spent Monday (May 14).

The reports also show Cox Communications was the coalition’s largest contributor, giving it $9,500. The only other financial contributions listed were from the Arkansas Cable Telecommunications Association for $3,000, and Impact Management Group for $6,500.

“We made sure people know the other side of the issue. The mayor used his bully pulpit, but we’ve got our side out,” Reed said. “Those were his town halls. He had the opportunity to take an hour and 15 minutes to explain his side and not give the other side a chance to respond.”

Some members of the coalition did speak up during the public meetings, Reed said, but the group didn’t want to be confrontational. Reed said he doesn’t plan to release a list of members and that the group was planned to include anyone from Tea Partiers to concerned citizens to people with backgrounds in conservative politics.

“We’re not going to put everyone’s names on a list. Our desire was to be loose knit. And that’s what we’ve done,” Reed said.

Although CenturyLink is not listed as a contributor, Reed said, “CenturyLink played an active role as part of the coalition.”

Len Pitcock, director of government affairs for Cox and former head of the Arkansas Cable Association, said that while Cox supports the coalition’s efforts and agrees with some of its points, the coalition does not speak for Cox.

“I just want to make it clear that the coalition is comprised of several entities and does not solely represent the position, or interest, of Cox Communications,” Pitcock said.

To break down the city’s campaign expenses: the city spent $567.75 to cover printing costs of handouts for meetings and inserts that were mailed in customer’s electric bills, $290 for a large banner advertising the three town hall meetings, $5,916.57 for travel, lodging and meals for guest speakers at the meetings, and $75 to provide refreshments for the three meetings.

A survey and a feasibility study by Uptown Services Inc., which cost $50,000, was part of the city’s investigation into the feasibility of services and completed before the board of directors decided to let voters decide the issue.

City electric director Art Farine, a 32-year city employee, said the city doesn’t have a big budget for advertising but he feels comfortable that the city has provided opportunities for citizens to learn about the proposal.

“It’s not ethical for a city to promote a ‘yes’ or ‘no’ vote. Our job is to present the facts and let the citizens make their own decisions,” Farine said. “It’s a fine line. We try to encourage people to vote. Our job is to lay out the facts. I think the project is a good project and doable for the city. As an informed department head, I need to present those facts as well.”

Farine said that although the most outspoken citizens at the town hall meetings trended against the proposal, most of the personal feedback he’s gotten has been very positive.

“I’ve been trying to encourage people to learn about the issue so they can cast an informed vote,” Farine said.

The feasibility study is on the city’s website.

Farine wouldn’t comment on the coalition’s mailers and advertising, which included sending residents a recorded telephone message from Arkansas Lt. Gov. Mark Darr.

“That’s their prerogative, to advertise their points of view,” Farine said.

In the telephone message, Darr urges city residents to vote against the proposal, saying it will “jeopardize existing private-sector jobs and deter businesses from locating in Siloam Springs for fear they, too, would have to compete against the government.”

Darr also sent a letter to city hall last fall.

“If we can get our system set up, everyone will benefit from it, even if they don’t use it,” Farine said. “And if you have more competition in the game, more residents are going to win, either way.”

Brian Skelton, a city administrator for Tullahoma, Tenn., spoke at the last public forum on May 3. His city of 19,000 added broadband services in January 2009 and has been a success, he said. They don’t offer “gimmick” rates and are able to provide cable, Internet and telephone services for $106 a month.

Speaking about Lt. Gov. Darr’s involvement, Skelton said he wondered how Darr and other state leaders would feel if federal officials inserted themselves into state affairs.
Pitcock said Cox hasn’t heard much from its customers but it did educate staff members on the issue in anticipation of possible calls. He said he was disappointed that none of the existing providers were invited to take part in the public meetings.

“There were a number of statements made in the meetings we disagreed with, but were not given a chance to address,” Pitcock said.

Pitcock said it’s inaccurate for city officials to say there is “no fiber” in town.

“This simply is incorrect. We have fiber all over town, as does CenturyLink,” he said.

Pitcock said Cox provides fiber-to-the-premises to many business customers in Siloam Springs, but not to residences.

Jeff Jones, manager of market development for CenturyLink, said the company supplies seven subdivisions with fiber optic lines to their homes and may plan to do more later based on “what makes sense in terms of serving the customers.”

Approximately 92% of the Siloam Springs exchange, which extends beyond city limits, has access to high-speed Internet connections, Jones said.

Pitcock also said the city can’t guarantee there won’t be rate increases.

“The city’s own study admits there will likely be rate increases,” he said.

“We’ve had a partnership with the people of Siloam Springs for years. Our focus in all of this is taking care of our customers,” Jones said. “Business as usual.”

Jones spoke last week at a quarterly meeting of the Small Business Alliance, where he reiterated what he’s said previously: “We believe government shouldn’t be in the business of providing services that private business can and does provide well.”

Jones said he’s received calls from several customers who say they think there are other things the city should be doing right now, among them working on parks and roads.

“This is a mature marketplace. There are lots of competitors already. It’s going to be a risky venture. I hope people show up and vote,” Jones said.

Reed said, “At the end of the day, this is a pretty definitive choice for the taxpayers of Siloam Springs. They have the choice to put $8.3 million at risk and go forward with this endeavor or not spend it and go back to the drawing board.”

Stockton, the consultant, at the May 3 meeting said the study plans are current and realistic and done from a conservative perspective. Stockton previously presented information on three other towns his company worked for and said that the actual figures being produced by those towns are very close to the projections Uptown provided in the studies.

“You need something to differentiate you from others to bring people here,” Skelton said. “You’re like us (Tullahoma) – off the beaten path.”

But Reed doesn’t think voters will agree.

“In northwest Arkansas, especially Benton County, voters are conservative. I think it will be defeated,” Reed said.