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  • Writer's pictureAIM Team

Bill addresses municipal and private services

This week, the Senate Committee on Jobs, Economic Development and Local Government held a hearing on SB 266 sponsored by Sen. Schaefer (R-Boone). Under this act, beginning August, 28, 2015, no municipality may begin to provide a service that is being provided by at least one private business within the boundaries of the municipality without a vote of the people.

This act does not apply to services that are recreational in nature, situations in which the private business has no physical business presence or assets in the municipality, or services that have an annual fiscal impact of less than $100,000.

In order to pose the question to voters of whether to authorize the municipality to provide a service otherwise prohibited under this act, the municipality must publicly release a study of the feasibility of offering the service and the financial implications at least 90 days before the election and determine the total estimated cost of the project for the next five years.

If the question fails to receive a majority vote, it cannot be resubmitted to voters for two years.

If the service is provided by the municipality, this act prohibits financial subsidization of the service from revenue collected from other services offered by the municipality and municipal funds being used to support the service unless the voters approve a specific revenue stream for it.

During testimony, the sponsor of the bill stated that the line is getting blurred as to what areas of business that cities and counties should or should not be involved. He went on to say that cities were gaining an easement through eminent domain or through compensating the property owner for something other than fiber optic but,  then proceeds to install fiber optic in that right of way. Associated Industries of Missouri and CenturyLink also testified in support. The example of Provo, Utah was also used as an example, where the city spent millions of dollars building a broadband network only to sell it to Google for $1 after realizing they could not afford to maintain it.

In opposition was the Missouri Municipal League whcih stated that cities are already barred from entering into non-municipal services. Main services provided by municipalities revolve around public safety, nuisance, recreation and jobs, but the represenatiave state that MML is willing to work with the sponsor on this bill.

Carthage Water and Electric was next in opposition to the bill and stated that when they built their power system they envisioned that it would serve the community for forty years. While they were laying power cables they also laid fiber optic lines so that all of their substations could communicate with each other. Soon after, businesses and the public asked for access to the fiber optic because the local carrier was unreliable.

Missouri Association of Municipal Utilities also testified in opposition stating that 17 cities currently offer broadband and these cities are in rural Missouri. Rural areas can attract businesses by offering high-speed internet. By sending this to a vote of the people politicizes the issue.

City Utilities of Springfield testified that they have been in the Internet business for 15 years and that there is competition for services. Carl Junction, Missouri and a group containing Google, Netflix, American Public Power Association and others submitted written testimony.

No one testified for informational purposes and the committee took no further action.



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