HomeMy WebLinkAbout09-09-19 City Commission Packet Materials - C3. Economic Development Administration Grant Application for EDA Programs
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Director of Economic Development
SUBJECT: Authorize the City Manager to sign an Economic Development
Administration (EDA) General [Grant] Application for EDA Programs (ED-
900) and other associated documents necessary to facilitate the EDA
grant application and authorize the City Manager to submit the
application on behalf of the City of Bozeman.
MEETING DATE: September 9, 2019
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Authorize the City Manager to sign an Economic Development
Administration (EDA) General [Grant] Application for EDA Programs (ED-900) and other
associated documents necessary to facilitate the EDA grant application and authorize
the City Manager to submit the application on behalf of the City of Bozeman.
BACKGROUND:
On April 15, 2019, the City Commission unanimously adopted Resolution 5031,
declaring broadband as essential infrastructure in the City of Bozeman. (Attachments 1
and 2)
Resolution 5031 accomplishes two goals. First, it is a message to the community
that the City values as essential, the benefits that 21st century broadband connectivity
brings to Bozeman. As such, the Commission resolution encourages both public and
private sector organizations to consider the value that the installation of fiber optic
conduit can bring to a residential, commercial or institutional construction projects.
Second, the Bozeman City Commission is committing to giving consideration, at the
appropriate time and through the appropriate process, to the following; 1) create and
implement a conduit utility master plan and begin the transition for operating the
conduit system as its own enterprise fund; 2) include a conduit design and construction
standard as part of the City’s approved engineering standards; 3) maintain updated
record drawings and GIS mapping of the City-owned conduit network; 4) consider the
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expansion of the existing City-owned fiber optic conduit network infrastructure when
appropriate and when funding is available; 5) utilize conduit lease revenue for the
purchase of additional public conduit; and 6) align conduit network expansion decisions
with the City Budget and Capital Improvement Plans and planning processes.
To date, the City has invested approximately $1.08 million dollars into public
fiber optic conduit deployment in the Downtown and Midtown URDs and contracts with
Bozeman Fiber for management and maintenance of the publicly owned conduit. The
public conduit system, which uses a seven-duct future-path, has two lessees and returns
revenue in the amount of approximately $50,000 per year.
We continue to add lengths of conduit to our public system on an ad-hoc basis,
growing the de-facto utility asset but using an under-managed and under-resourced
strategy. Best practices would include a more direct management of the utility, design
and inspection standards, detailed record drawings of the public network, GIS mapping
of the conduit network and hand holes, consideration of conduit network expansion
during the yearly budgeting and CIP process and increase the lease revenue to invest in
the expansion of the public conduit network. A fiber conduit master plan will provide
answers and direction on these and other questions such as costs, planning, funding,
operations and maintenance and other details.
This project, if funded in part by the EDA, is targeted directly at carrying out the
action, or actions, enumerated above. The creation and adoption of a conduit utility
master plan enables a smooth and thoughtful transition into owning, managing and
growing the City’s public conduit system which, in turn, enables fiber optic deployment
to businesses and residences in the City of Bozeman. (Attachments 3 – 7)
Project staff anticipate additional letters of support. We have reached out to the
Montana congressional delegation, as well as others, for letters of support for the
application. (Attachment 8)
UNRESOLVED ISSUES: None
ALTERNATIVES: As proposed by the City Commission
FISCAL EFFECTS:
The City Commission approved $50,000, of the $100,000 requested, toward a
fiber conduit masterplan in the FY20 Economic Development budget. Staff estimates
that the cost of a fiber conduit master plan is approximately $100,000. The total budget
for the project is $104,000, which includes the $4,000 cost of managing and servicing
the grant. This amount will be paid to the Northern Rocky Mountain Economic
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Development District for these services. The City’s Finance Department will also have a
role to play in the grant management and eventual audit of the project expenditures.
ATTACHMENTS:
1) April 15, 2019 City Commission Packet material – Resolution 5031 declaring
broadband as essential infrastructure in the City of Bozeman;
2) Finalized Minutes from the April 15, 2019 City Commission Packet material –
Resolution 5031 declaring broadband as essential infrastructure in the City of
Bozeman;
3) Form ED-900 – General Application for EDA Programs;
4) Bozeman Broadband Economic Impact Report;
5) Form SF 424A 2019 - Project Budget Sheet;
6) Form CD-511 Certification Regarding Lobbying;
7) Montana Secretary of State Certificate of Existence and Good Standing for the
Northern Rocky Mountain Economic Development District; and
8) Letter of Support from the Northern Rocky Mountain Economic Development
District.
Report compiled on: 08-30-19
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1
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Economic Development Director
SUBJECT: Resolution 5031 Declaring Broadband as Essential Infrastructure
in the City of Bozeman
MEETING DATE: April 15, 2019
AGENDA ITEM TYPE: Action
RECOMMENDATION: Adopt Resolution 5031 Declaring Broadband as Essential
Infrastructure in the City of Bozeman
STRATEGIC PLAN ELEMENTS SUPPORTED BY RESOLUTION 5031:
1. An Engaged Community
1.1 Outreach
1.2 Community Engagement
2. An Innovative Economy
2.1 Business Growth
2.2 Infrastructure Investments
2.3 Workforce Development
3. A Safe Welcoming Community
3.1 Public Safety
4. A well Planned City
4.3 Strategic Infrastructure
Choices
4.4 Vibrant Downtown, Districts
& Centers
5. A Creative Learning Culture
5.3 Partnerships for Education
and Learning
6. A Sustainable Environment
We cultivate a strong
environmental ethic; protect our
clean air, water, open spaces
and climate; and promote
environmentally sustainable
businesses and lifestyles.
7. A High Performance Organization
7.3 Best Practices, Creativity &
Foresight
7.4 Performance Metrics
BACKGROUND:
Since May, 2013 the City of Bozeman has worked diligently to bring high quality,
high-speed, high-capacity, redundant and affordable broadband to Bozeman, Montana.
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First, we created a steering committee of knowledgeable professionals and community
stakeholders to assess the state of affairs. It was found that demand existed, especially
in the growing high-tech business community, for better, more cost effective solutions
for achieving gigabit services in Bozeman. Next, the Bozeman Fiber Master Plan and
Feasibility Study was adopted by the City Commission in January, 2015. Finally, in May,
2015, Bozeman Fiber, the 501(c)4 community benefit non-profit, was created by the City
to fund, construct and operate an initial $3.85M, 23 mile high quality, high-speed, high-
capacity, redundant and affordable fiber-optic network. The network currently
connects the City of Bozeman, Gallatin County and BSD7 school facilities on leased dark
fiber. Additionally, Bozeman Fiber serves 113 businesses around Bozeman and will
eventually consider residential fiber throughout the community. Bozeman Fiber is
currently under contract to manage the City’s 5+ miles of existing fiber-optic conduit in
the Downtown, Midtown and now Northeast Urban Renewal District.
Cities around the United States and countries around the world recognize the
value of connected communities and countries. As the number, capacity and utility of
devices grow, so does the need for advanced infrastructure to accommodate increases
in speed, quality and capacity. Broadband and high capacity telecommunications
networks are essential for many 21st century, global technology businesses like those
growing in Bozeman. In 2018, the top five countries in the world with the fastest
internet includes; 1) Singapore, 2) Sweden, 3) Denmark, 4) Norway and 5) Romania. The
United States ranks 20th in the world; clearly we have some work to do. In 2018, the
City of Bangor, Maine declared fiber as essential infrastructure and prioritized the
deployment of this infrastructure to support social, economic and knowledge
development in their community. In 2016, Canada declared high speed broadband as
“essential for quality of life.” Broadband is essential 21st century infrastructure.
Resolution 5031 declares broadband as essential infrastructure in the City of
Bozeman, Montana. Reliable, high speed, affordable access to the Internet is imperative
for Bozeman residents, businesses, governmental agencies, non-profit organizations,
and visitors. The Internet is changing how humans interact with each other and with the
world at large, as well as being a driving force for the current and future economy. The
Internet creates opportunity for increased innovation for consumers, businesses, and
government. Countries, states, counties and cities that prioritize and provide access to
advanced Internet infrastructure such as broadband are surpassing those that do not in
terms of social, economic, and knowledge development. The City of Bozeman should
prioritize this infrastructure as an essential, elevating the importance of broadband with
that of water, sewer, stormwater and electricity.
Resolution 5031 encourages two primary actions, first, the declaration of
broadband as essential infrastructure elevates the importance of planning for and
funding this piece of critical infrastructure. It also encourages the public and private
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sector to consider deploying fiber conduit in construction projects to future-proof them
in the present thus lowering the cost of retrofitting this piece of infrastructure when it
becomes necessary in the future. Next, Resolution 5031 enumerates several actions
and decision points, i.e. budget, CIP etc., where City staff and the Commission can
determine the funding amounts and sources for furthering this Commission priority.
UNRESOLVED ISSUES:
None at this time.
FISCAL EFFECTS:
There are no direct fiscal effects from the adoption of Resolution 5031 however,
there may be fiscal impacts from subsequent decisions made during budget discussions
and perhaps in the planning for the next Capital Improvement Plan update. The
resolution sets out to accomplish two goals. First, Resolution 5031 is a message to the
community that the City values as essential, the benefits that 21st century broadband
connectivity brings to Bozeman. As such, the Commission encourages both public and
private sector organizations to consider the value that the installation of fiber optic
conduit can bring to a residential, commercial or institutional construction project.
Second, the Bozeman City Commission is committing to giving consideration, at the
appropriate time and through the appropriate process, to the following; 1) create and
implement a conduit utility master plan and begin the transition for operating the
conduit system as its own enterprise fund; 2) include a conduit design and construction
standard as part of the City’s approved engineering standards; 3) maintain updated
record drawings and GIS mapping of the City-owned conduit network; 4) consider the
expansion of the existing City-owned fiber optic conduit network infrastructure when
appropriate and when funding is available; 5) utilize conduit lease revenue for the
purchase of additional public conduit; and 6) align conduit network expansion decisions
with the City Budget and Capital Improvement Plans and planning processes. If
decisions are made to move forward with any or all of the proposed actions, there may
be additional fiscal impacts commensurate with the decisions made at that time.
Updated fiscal effects will be provided at each future decision point where Commission
action is required.
To date, the City has invested approximately $1.08 million dollars into public
fiber optic conduit deployment in the Downtown and Midtown and contracts with
Bozeman Fiber for management and maintenance. The City-owned conduit system,
which uses a seven-duct conduit, has two lessees and returns revenue in the amount of
approximately $50,000 per year.
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ATTACHMENTS AND HYPERLINKS:
1. Resolution 5031 Declaring Broadband as Essential Infrastructure in the City of
Bozeman;
2. Downtown and Midtown Conduit Network Map as of March, 29, 2017;
3. City’s GIS Map of the Bozeman Fiber Network;
4. Link to the January 26, 2015 Commission Memo and Resolution 4576 adopting
the Bozeman Fiber Masterplan and Feasibility Study;
5. Link to Connecting America: The National Broadband Plan; and
6. Links to topical articles and information:
a. Broadband: 21st Century Infrastructure, Government Technology, June
10, 2016.
b. What is Broadband?, Broadband Matters, Accessed: April 3,
2019. Source: Information from Wisconsin’s Broadband Reference Guide
produced by: WI Public Service Commission, UW-Extension Madison, and
the Center for Community Technology Solutions, January, 2014.
c. Ten Reasons Why Broadband Infrastructure Should Be a Municipal Utility,
Entry Point Networks, July 25, 2018.
Report compiled on: April 5, 2019
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RESOLUTION NO. 5031
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA, DECLARING BROADBAND ESSENTIAL INFRASTRUCTURE IN THE
CITY OF BOZEMAN, MONTANA.
WHEREAS, the term “broadband” commonly refers to high-speed Internet access that is
always on and significantly faster than traditional dial-up access1.
WHEREAS, the Federal Communications Commission defines “broadband” as having a
minimum of 25 Mbps download, and 3 Mbps upload speeds2.
WHEREAS, “essential infrastructure” is a term used by federal, state and
local governments and includes assets, systems, and networks, whether physical or virtual, so vital
that their incapacitation or destruction would have a debilitating effect on security, national
economic security, public health or safety, or any combination thereof. Key Resources are publicly
or privately controlled resources essential to the minimal operations of the economy and
government; also referred to as “critical infrastructure”3.
1 “Types of Broadband Connections.” Federal Communications Commission, Updated: Monday, June 23, 2014. https://www.fcc.gov/general/types-broadband-connections.
2 “FCC Broadband Definition Has Changed Before and Will Change Again.” Broadband Now, Updated: February 10, 2018. https://broadbandnow.com/report/fcc-broadband-definition/. 3 “Critical Infrastructure and Key Resources.” Federal Emergency Management Administration,
Accessed: April 3, 2019. https://emilms.fema.gov/IS520/PAN0101400text.htm.
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Resolution 5031, Declaring Broadband as Essential City Infrastructure
Page 2 of 5
WHEREAS, the Federal Communications Commission has identified universal
availability of affordable broadband access for all citizens as a national priority4; and
WHEREAS, community broadband networks are essential for education, healthcare,
market competition, consumer choice, economic development, and universal, affordable Internet
access nationwide; and
WHEREAS, the economic health of municipalities depends on public and private
investment to connect their communities; and
WHEREAS, many municipal governments consider broadband to be a critical form of
infrastructure, and more than 750 communities have therefore made significant investments in
publicly-owned broadband infrastructure; and
WHEREAS, in the vast majority of community broadband networks built to date, the
private sector has been involved in helping design, build, and operate the network – creating new
business opportunities and jobs in the process; and
WHEREAS, to compete successfully in an increasingly global environment, the Bozeman
community should take advantage of all of the technological solutions that high-speed broadband
access and community fiber optic networks offer; and
WHEREAS, sufficient broadband infrastructure has become increasingly necessary to
support many forms of federal, state and local governmental infrastructure around the world, from
smart-meter electrical grids, to connected traffic management networks, to sensor-enabled water
and sewer systems and Bozeman is part of this global trend; and
WHEREAS, robust broadband is needed to support the deployment of advances in smart
city technologies, as well as autonomous and unmanned vehicles and systems; and
4 “National Broadband Plan”. Federal Communication Commission, Accessed: April 3, 2019.
https://www.fcc.gov/general/national-broadband-plan.
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Resolution 5031, Declaring Broadband as Essential City Infrastructure
Page 3 of 5
WHEREAS, in-home broadband access has been shown to increase home values by 3%,
and up to 7.1% at higher speeds5, and to boost economic and entrepreneurial activity within
communities who gain access to widely available broadband; and
WHEREAS, the Internet is changing how humans interact with each other and with the
world at large, as well as providing innovation for the current and future economy; and
WHEREAS, the Internet creates opportunity for increased innovation for consumers,
businesses, and government; and
WHEREAS, countries, states, and cities that prioritize and provide access to advanced
Internet infrastructure such as broadband are surpassing those that do not in terms of social,
economic, and knowledge development; and
WHEREAS, broadband infrastructure has become an economic necessity for Bozeman,
driving education, healthcare, public safety, economic growth, and governmental operating
efficiency in a 21st century economy; and
WHEREAS, in 2013 pursuant to Commission Resolution 4434, the City of Bozeman
supported the Broadband Steering Committee in their efforts to bring fast, reliable and affordable
broadband Internet services to the region in furtherance of the City’s economic development goals;
and
WHEREAS, in 2015 pursuant to Commission Resolution 4576, the City of Bozeman
adopted the Bozeman Fiber Master Plan and Feasibility Study and provided policy direction to
staff to incorporate elements of the Bozeman Fiber Master Plan and Feasibility Study into the
Downtown and Midtown Urban Renewal District plans; and
5 Knutson, Ryan. “How Fast Internet Affects Home Prices.” Wall Street Journal, June 30, 2015.
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Resolution 5031, Declaring Broadband as Essential City Infrastructure
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WHEREAS, in 2015, the Bozeman City Commission adopted priorities which included
implementation of the Bozeman Fiber Master Plan and Feasibility Study; and
WHEREAS, in 2015 pursuant to Commission Resolution 4596 the City Manager filed
articles of incorporation with the Montana Secretary of State creating the entity, Bozeman Fiber
as a 501(c)4 community benefit non-profit corporation.
WHEREAS, in 2016 Bozeman Fiber constructed a twenty-three (23) mile high-speed,
high-capacity, redundant, middle-mile fiber optic network in Bozeman; and
WHEREAS, to date, the City of Bozeman and its urban renewal districts have invested
$1.08 million dollars in public conduit; and
WHEREAS, reliable, high-speed, redundant, affordable access to the Internet is
imperative for Bozeman residents, businesses, non-profit organizations, and visitors; and
WHEREAS, broadband is considered essential infrastructure that contributes to the social
and economic health of Bozeman and as essential, as water, sewer, stormwater, streets and
electricity infrastructure.
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana, that broadband is designated as essential infrastructure in the City of
Bozeman; and
NOW, THEREFORE, BE IT FURTHER RESOLVED that the City of Bozeman
encourages both the public and private sector to consider the installation of fiber optic conduit
where appropriate, including public facilities and private residential and commercial construction,
to facilitate fiber optic deployment, network expansion and increased community connectivity;
and
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Resolution 5031, Declaring Broadband as Essential City Infrastructure
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NOW, THEREFORE, BE IT FURTHER RESOLVED that the City of Bozeman will;
1) create and implement a conduit utility master plan and begin the transition for operating the
conduit system as its own enterprise fund; 2) include a conduit design and construction standard
as part of the City’s approved engineering standards; 3) maintain updated record drawings and
GIS mapping of the City-owned conduit network; 4) consider the expansion of the existing City-
owned fiber optic conduit network infrastructure when appropriate and when funding is available;
5) utilize conduit lease revenue for the purchase of additional public conduit; and 6) align conduit
network expansion decisions with the City Budget and Capital Improvement Plans and planning
processes.
PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 15th day of April, 2019.
CYNTHIA L. ANDRUS
Mayor
ATTEST:
ROBIN CROUGH
City Clerk
APPROVED AS TO FORM:
GREG SULLIVAN
City Attorney
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Bozeman Fiber Network (including conduit in the Midtown and Downtown leased from the City of Bozeman)
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This is a placeholder document for the report "Attachment 3 EDA Form 900 Final (3)". There was an
error in the publishing process and it could not be converted to PDF.
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AN ECONOMIC IMPACT ANALYSIS OF BROADBAND-INDUCED
GROWTH AND NEW CONNECTIONS IN THE BOZEMAN AREA
2019
Prepared by: Rob Gilmore, Executive Director
The Northern Rocky Mountain EDD
August 2019
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Table of Contents
General Project Description ...........................................................................................................2
Definitions and Methods ................................................................................................................ 3
Background and Methodology ....................................................................................................... 4
About the Northern Rocky Mountain Economic Development District ...................................... 6
Summary of Economic Impacts ..................................................................................................... 7
How To Read This Analysis ........................................................................................................... 8
Economic Impact Analysis –Bozeman Broadband Initiative 2019 .............................................. 9
Gross Economic Output ................................................................................................................. 9
Gross County Product .................................................................................................................... 9
Total Labor Income....................................................................................................................... 10
Total Employment ........................................................................................................................ 10
Capital Income .............................................................................................................................. 11
Indirect Business Tax.................................................................................................................... 11
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General Project Description
This study seeks to value the economic benefit of adding new broadband capacity to the City of
Bozeman. The City of Bozeman created a steering committee of knowledgeable professionals and
community stakeholders to assess the state of affairs. It was found that demand for broadband existed,
especially in the growing high-tech business community, for better, more cost effective solutions for
achieving gigabit services in Bozeman.
The Bozeman Fiber Master Plan and Feasibility Study was adopted by the City Commission in
January, 2015 and in May, 2015, Bozeman Fiber, the 501(c)4 community benefit non-profit, was
created by the City to fund, construct and operate an initial $3.85M, 23 mile high quality, high-speed,
high-capacity, redundant and affordable fiber-optic network.
The network currently connects the City of Bozeman, Gallatin County and BSD7 school facilities on
leased dark fiber. Additionally, Bozeman Fiber serves 113 businesses around Bozeman and will
eventually consider residential fiber throughout the community. Bozeman Fiber is
currently under contract to manage the City’s 5+ miles of existing fiber-optic conduit in
the Downtown, Midtown and now Northeast Urban Renewal District.
Cities around the United States and countries around the world recognize the value of connected
communities and countries. As the number, capacity and utility of devices grow, so does the need for
advanced infrastructure to accommodate increases in speed, quality and capacity. Broadband and high
capacity telecommunications networks are essential for many 21st century, global technology
businesses like those growing in Bozeman. In 2018, the top five countries in the world with the fastest
internet includes; 1) Singapore, 2) Sweden, 3) Denmark, 4) Norway and 5) Romania.
The United States ranks 20th in the world; clearly work remains. In 2018, the City of Bangor, Maine
declared fiber as essential infrastructure and prioritized the deployment of this infrastructure to
support social, economic and knowledge development in their community. In 2016, Canada declared
high speed broadband as “essential for quality of life.” Broadband is essential 21st century
infrastructure.
The City’s Resolution 5031 declares broadband as essential infrastructure in the City of Bozeman,
Montana. Reliable, high speed, affordable access to the Internet is imperative for Bozeman residents,
businesses, governmental agencies, non-profit organizations, and visitors. The Internet is changing how
humans interact with each other and with the world at large, as well as being a driving force for the
current and future economy.
The Internet creates opportunity for increased innovation for consumers, businesses, and government.
Countries, states, counties and cities that prioritize and provide access to advanced Internet
infrastructure such as broadband are surpassing those that do not in terms of social, economic, and
knowledge development. The City of Bozeman should prioritize this infrastructure as an essential,
elevating the importance of broadband with that of water, sewer, storm water and electricity.
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Definitions and Methods
The Gross Economic Output is the total economic benefit including all direct and indirect benefits. The
total includes benefits that occur within and without the state or county project area. The Gross State
Product represents the amount of benefit that is retained in the County. The remaining reports; Total
Labor Income, Capital Income and Indirect Business Taxes are subsets of the Gross State Product.
When added together, labor income, capital income and indirect taxes roughly equal the amount of
Gross State Product. The Total Employment report is not a numerical subset of the Gross State
Product.
The Project’s analysis reports on the following six categories:
1. Gross Economic Output: The aggregated market value of goods and services produced by
businesses and government enterprises in the economy. It is essentially equal to the revenue
collected by businesses (including indirect taxes) within the County or impact area.
2. Gross County Product: The total of value added created by the production of goods and services
in the economy. It represents the sum of labor compensation, capital type income and indirect
business taxes. Gross County Product is best described as new money added as a result of the
combined activities of this project.
3. Total Labor Income: The compensation to employees and self-employed proprietors including
both wages and indirect payments such as retirement benefits, health insurance and other
similar fringe benefits.
4. Total Employment: The number of jobs generated within the impact area including full-time
and part-time positions, salaried workers and sole proprietors.
5. Capital Income: The sum of income such as business profits, interest and rental income.
Capital Income is best described as non-labor benefits.
6. Indirect Business Tax: Taxes and fees not based in the businesses’ income. It may represent
sales taxes (if any) levied by the state and county and property taxes levied against businesses as
well as federal, state and local fees.
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Background and Methodology
The analysis seeks to measure both direct and social benefits the local economy receives from the
expanded broadband service. A recent study completed by the National Rural Electric Cooperative
Association (NRECA)1 estimates that the economic impact of broad band exceeds $68.2 billion annually
in its member areas. It also values that the average benefit to each household that receives broadband
service at $1,950. This study shows the economic impacts for each 500 homes connected in the
Bozeman area.
NRECA noted that the study didn’t look at the impact of missed opportunities such as expanded jobs,
education and economic growth. Factoring that impact in would cause the economic impact of lack of
broadband to be even higher, the association said.
“Closing the digital divide is imperative for rural communities and will help improve the economic
outlook for the entire country,” NRECA CEO Jim Matheson said in a press release about the study.
“Millions of Americans are locked out of the new digital economy simply by virtue of their zip code.
Electric co-ops recognize the importance of expanded broadband access and are working to be part of
the solution.”
Much of the economic impacts are projected and will not be realized until the project is completed. As
an example of how broadband impacts the area and is found in a report2 prepared by Dr. Raul Katz,
Director, Business Strategy Research, at the Columbia Institute for Tele-Information (CITI) at
Columbia University, pointed to positive impacts that include
• New and innovative applications and services, such as telemedicine, internet search, e-
commerce, online education and social networking.
• New forms of commerce and financial intermediation
• Mass customization of products
• Reduction of excess inventories and optimization of supply chains
• Business revenue growth
• Growth in service industries
1 NRECA 9/12/18 Carl Weinschenk
2 Impact of Broadband on the Economy, Dr. Raul Katz, Columbia Institute for Tele-Information at Columbia Univ.
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The study pointed to research across 48 states that shows for every 1% point increase in broadband
penetration in a state, employment is projected to increase by 0.2 to 0.3% per year “assuming the
economy is not already at 'full employment'”
The study also pointed to research that shows an increase in 10% of broadband penetration is
associated with at 3.6% increase in efficiency. This study measures the value of each $5 million in
increased efficiency.
The economic impact analysis that follows represents a community-wide view of economic impacts and
is more comprehensive than measuring direct expenditures and employment. For example, the
analysis measures the economic “footprint” as dollars multiply inside and outside of the market area
and includes both direct and indirect impacts. Once the gross economic output is computed the
analysis then seeks to quantify the economic benefits to the local project area.
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About the Northern Rocky Mountain Economic Development District
The Northern Rocky Mountain Economic Development District has prepared economic impact reports
for state agencies, cities, counties, economic development districts and private corporations. Each
report is based on datasets that are specific to the project’s location and unique industry sectors.
Rob Gilmore, the report’s author has more than 15 years’ experience analyzing projects and is
recognized for his work in creating solutions that monetize social impacts.
Rob is the recipient of the Ford Foundation’s Award for Innovations in American Government and the
Council of State Government’s Award for Innovation.
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Summary of Economic Impacts
The Economic Impact Report that follows shows that the total economic impact of $5 million
in broadband-induced growth, plus 500 new broadband connections exceeds $8.9 million.
Of the total $8.9 million in economic benefits, the majority of $5.9 million are retained in the
local market. The activities listed in this study support a total of 197 local jobs.
Capital income, or non-payroll-related benefits, total $3.9 million. When totaled, broadband-
induced growth and new connections create an estimated $1 million in indirect tax benefits.
The attached Economic Impact Report details the direct and indirect economic impacts. The
study categories are described in the “Definitions and Methods” section.
Benefit summary:
• $8.9 million in Gross Economic Output
• $5.9 million in Gross County Product.
• $3.9 million in Total Labor Income
• 197 total jobs (full and part-time).
• $1.0 million in Capital Income.
• $987,977 in Indirect Business Taxes and Fees.
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How To Read This Analysis
The report has several headings, including direct impact, indirect and induced impact and total impact.
Definitions for these headings are posted in Wikipedia at http://en.wikipedia.org/wiki/MIG,_Inc. A
summary of the website follows:
The Multiplier Model is derived mathematically using the input-output model and Social Accounting
formats. The Social Accounting System provides the framework for the predictive Multiplier Model
used in economic impact studies. Purchases for final use drive the model. Industries that produce goods
and services for consumer consumption must purchase products, raw materials, and services from
other companies to create their product. These vendors must also procure goods and services. This cycle
continues until all the money is leaked from the region’s economy.
There are three types of effects measured with a multiplier: the direct, the indirect, and the induced
effects. The direct effect is the known or predicted change in the local economy that is to be studied. The
indirect effect is the business to business transactions required to satisfy the direct effect. Finally, the
induced effect is derived from local spending on goods and services by people working to satisfy the
direct and indirect effects.
1. Direct effects take place only in the industry immediately affected: if DEMCO (example name
for this hypothetical company) adds 39 employees, the manufacturing industry gains 39
employees.
2. Indirect effects concern inter-industry transactions: because DEMCO is expanding, they have
an increased demand for locally produced materials needed to produce their product. This will
affect all of their suppliers, possibly resulting in a few more jobs. Supplier employment gain
would be the Indirect effects.
3. Induced effects measure the effects of the changes in household income: employees hired by
DEMCO and suppliers may add expenditures in restaurants and shops. These changes affect the
related industries.[1]
4. Impacts the total changes to the original economy as the result of a defined event. i.e. Direct
effects + Indirect effects + Induced effects = Impacts
5. Frequency (not included in the Wikipedia definition) identifies whether the event provides a
one-time benefit or if the benefit is annually reoccurring. Events are reported in this analysis as
either ‘one-time’ or ‘on-going’.
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Economic Impact Analysis –Bozeman Broadband Initiative 2019
Prepared by the Northern Rocky Mountain EDD
Gross Economic Output
The aggregated market value of goods and services produced by firms and government enterprises in the County's economy. It is essentially equal to the revenue collected by businesses (including
indirect taxes) within the County.
Implan Industry Frequency Direct Impact Indirect and Induced Impact
Total Impact
City of Bozeman, Broadband Induced Impacts for each $5 million in
increased business efficiency
On Going $5,000,000 $2,483,326 $7,483,326
City of Bozeman, Broadband Induced Impacts for each 500 connected
households
On Going $975,000 $484,249 $1,459,249
Totals: $5,975,000 $2,967,574 $8,942,574
Gross County Product
The total value added created by the production of goods and services in the local economy. It is analogous to the concept of Gross Domestic Product at the national level. It represents the sum of
labor compensation, capital type income (profits, interests and rents), and indirect business taxes (which are mainly sales taxes, but also include property taxes and government mandated fees).
Implan Industry Frequency Initial Purchase Total Impact
City of Bozeman, Broadband Induced Impacts for
each $5 million in increased business efficiency On Going $5,000,000 $5,011,849
City of Bozeman, Broadband Induced Impacts for
each 500 connected households On Going $975,000 $977,311
Totals: $5,975,000 $5,989,160
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Total Labor Income
The compensation to employees and self-employed proprietors including both wages and indirect
payments such as retirement benefits, health insurance and other similar fringe benefits.
Implan Industry Frequency Initial Purchase Total Impact
City of Bozeman, Broadband Induced Impacts for
each $5 million in increased business efficiency On Going $5,000,000 $3,315,471
City of Bozeman, Broadband Induced Impacts for each 500 connected households On Going $975,000 $646,517
Totals: $5,975,000 $3,961,988
Total Employment
The number of jobs generated within the County, and includes: * full-time and part-time positions * salary workers *sole proprietors.
Implan Industry Frequency Initial Purchase Total Impact
City of Bozeman, Broadband Induced Impacts for
each $5 million in increased business efficiency On Going $5,000,000 165
City of Bozeman, Broadband Induced Impacts for each 500 connected households On Going $975,000 32
Totals: $5,975,000 197
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Capital Income
The sum of all property type income (such as business profits, interest income and rental income)
generated within the County.
Implan Industry Frequency Initial Purchase Total Impact
City of Bozeman, Broadband Induced Impacts for
each $5 million in increased business efficiency On Going $5,000,000 $869,619
City of Bozeman, Broadband Induced Impacts for
each 500 connected households On Going $975,000 $169,576
Totals: $5,975,000 $1,039,195
Indirect Business Tax
Are taxes and fees that are not based in the businesses' income. For the most part they represent
sales taxes levied by the State and the county, but also include property taxes levied against businesses as well as fees imposed by federal, state and local governments.
Implan Industry Frequency Initial Purchase Total Impact
City of Bozeman, Broadband Induced Impacts for each $5 million in increased business efficiency On Going $5,000,000 $826,759
City of Bozeman, Broadband Induced Impacts for
each 500 connected households On Going $975,000 $161,218
Totals: $5,975,000 $987,977
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032020180729
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
Great Seal of the State of Montana, at Helena, the Capital, this 20th day
of March, 2018.
COREY STAPLETON
Montana Secretary of State
Certificate Number: 032020180729
The Secretary of State cannot certify that tax and penalties owed to this state
on record with the Department of Revenue are current. Please contact the Department of Revenue at (406)
444-6900 to obtain information on tax status.
No articles of dissolution have been placed on record in this office by said corporation and the
records indicate the corporation is in good standing under the laws of the State of Montana.
The most recent annual report has been filed with this office.
Payment is reflected in the records of the Secretary of State for all fees owed to the Secretary of
State.
duly filed its Articles Of Incorporation for the domestic entity in this office on November 24, 2006, and
on that date was authorized to transact business in this state for a term of Perpetual duration.
NORTHERN ROCKY MOUNTAIN ECONOMIC DEVELOPMENT DISTRICT
I, COREY STAPLETON,Secretary of State for the State of Montana, do
hereby certify that:
CERTIFICATE OF EXISTENCE
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