Herriman City is exploring installing and implementing a citywide fiber-optic broadband network in a public-private partnership. The dual-purpose project would allow all residents to have multiple options for high-speed internet access and connect all City facilities for more efficient and effective services. The City Council feels that quality, high-speed internet access is vital to serve the community’s needs in our modern era.
Financial models and a high-level design were presented on November 8th in the City Council work meeting. The project's cost, expected bond interest rates, and a required subscription rate to make the network viable are higher than previous estimates. This webpage will be updated as the project progresses.
The method that is being pursued will allow multiple internet service providers to use one public utility-owned fiber-optic network, increasing competition for customers, provide citywide coverage, and with no risk to taxpayers. No tax money will be used to construct or operate the network.
***Please note that ongoing fiber installation by All West Communications (or other internet service providers) is approved by the City but is not the same as this citywide, publicly-owned network.***
The City has been working with Strata Networks in a public-private partnership in developing the financial models and a high-level system design. The business/financial model and initial design were presented on November 8, 2023. You can view the City Council discussion here.
Right now, the City is exploring the best way to finance the system without any use of tax funds or risk to taxpayers. This may be accomplished by setting up a utility (similar to water service) or a new entity separated financially from the City. Under the method currently being studied, residents would be able to opt out of service and not be charged any fees.
Additionally, the latest financial estimates show a significantly higher interest rate, cost, and required subscription rate than earlier projections showed. As the City looks into the best financing mechanism, it will continually study the market's interest rates and update cost projections. In its most recent discussion on November 8th, the City Council felt uncomfortable with the network's financial projections as they are currently estimated.
The City formed a Broadband Task Force in 2021 to explore any possible options to provide broadband access to the entire community. In March 2022, the Broadband Task Force reported to the City Council (linked lower in this webpage). After a resident survey showed high interest in a citywide network, the City formed a public-private partnership with Strata Networks to work toward developing a citywide municipal broadband network. The project scope and initial financial models were presented in August 2023. The latest design and updated financial projections were presented in November 2023.
See the Timeline section below for more details.
A monthly utility fee estimated at about $15 will come with a basic level of internet access for no additional cost. Speeds at this basic level will be about 10 megabits per second (Mbps), or generally enough speed for basic internet browsing and email.
Users may upgrade to enhanced high-speed broadband (for example, 1 gigabit per second) through a private Internet Service Provider company (ISP). While prices for upgrade plans aren't yet known, projections show that even with the $15 utility fee, high-speed prices will meet or beat current market prices. The citywide network will be open for multiple ISPs to provide services to residents. For example, if you currently pay for high-speed internet access at $75 per month, it's expected that with the citywide municipal fiber network, the $15 utility fee combined with the price for a new high-speed internet access plan would cost about the same amount that you're currently paying.
No. Tax money will not be used for the construction or operation of the network. Financing the project will occur through a bond issued by an entity that is separate from the City. Therefore, City finances (taxpayer funds) will not be used to repay the bond. While the financial projections are still being finalized, the City Council will not proceed with the project if any tax money would have to be used in the business model.
The project will stand on its own and the bond will be repaid strictly by revenue generated from the utility fees and infrastructure buy-in from internet service provider companies. There is no difference in risk to taxpayers for this network versus traditional private networks built and operated by private companies.
Furthermore, residents may choose to opt out of the network entirely and no one will be forced to participate. However, those who opt out and later wish to opt in must pay the full cost for connection (likely a few thousand dollars).
No. While the City believes this project would greatly benefit our entire community, residents may choose to opt out of the network entirely and no one will be forced to participate. However, if you change your mind later and want to connect your home to the network, you will need to cover the full cost of connection—likely a few thousand dollars. Residents and businesses will be opted in by default, but anyone may opt out.
While exact prices from private companies are not yet known, projections show that even with the utility fee, prices for high-speed internet access will meet or even beat current market prices.
It is important to note this system would be financially self-supported and no tax money will be used to fund the construction of the network. The network will be financed through a public utility that is not tied to the City's taxpayer funds.
While it is true that a privately owned and operated fiber network (such as Google Fiber) would eliminate up-front costs by a public utility, subscribers to any private company cover both the costs of the company’s own installed network and the costs of providing internet access as part of their monthly subscription fee. A publicly-owned network’s monthly user fees would do the same, but would come with other advantages as well, including ensuring 100% of homes and businesses have access, allowing multiple companies to compete for customers, and improving City services.
Financial models for the network were presented in November 2023. Projections show that paying for one citywide network and opening access for multiple internet provider companies will result in a monthly user cost that is competitive with current market prices. However, updated project costs and bond interest rates are significantly higher than earlier estimates showed.
The City will not move forward on the project if the users’ monthly fee is not competitive with current market prices. An citywide open-access network, as proposed, allows multiple internet service provider companies to serve end users. This will increase competition and allow residents more choices on which company to purchase internet service from. Current projections show that high-speed internet prices will meet or even beat current market prices. However, the latest estimates show that the total project cost, interest rates, and required subscription rates to make the network viable are significantly higher than earlier projections showed.
Right now, Herriman City and Strata Networks are working on a scope, high-level design, and business and financial models. Those items were presented to the City Council in November 2023. Project costs, bond interest rates, and required subscriptions to make the project viable are significantly higher than previous estimates showed. The City Council is not comfortable with the financial projects as they currently stand. The City will continue to evaluate the project and study the economy to ensure that it will not be approved unless the project is financially viable.
If the City approves the project, construction would begin within the next 12 calendar months and be completed within in phases in about three years.
The exact business model is still being worked on, and the exact financial method will depend on what the City Council chooses. The infrastructure cost is expected to be between 60 to 75 million dollars. Funding will likely include a bond that is paid back by monthly utility connection fees and private internet service provider company buy-in fees. The bond will be through a public utility that is separate from the City and its finances. Tax money will not be used to pay back the debt as the network will be self-sustaining.
Residents and businesses will pay a utility fee of about $15 that comes with basic internet access of up to 10 Mbps (megabits per second). However, those wishing to select increased speeds such as 1 Gbps (gigabit per second) may choose to do so for a monthly fee. Projected models show that the rates for increased speeds will be competitive and the service will be equal to or better than any currently offered in the city. However, overall project cost projections exceed previous estimates. The City will continue to evaluate the economy and viability of the project.
No. Herriman City is hiring Strata Networks to design (and build if it's approved) the network, but the City or public utility will own the system. The City or public utility will then allow Internet Service Provider (ISP) companies who meet qualifications to use the network and compete to provide internet service to residents. So, even though one company is building the network and the City or public utility owns it, it is still a free market for residents to choose the best option for them.
Broadband Task Force formed, consisting of two City Councilmembers, five City staff members, and an industry professional. Assigned to explore options of bringing high-speed internet via a fiber-optic broadband network to all of Herriman.
Herriman City surveys residents and businesses to statistically measure the community’s internet needs and its interest in a city-owned network that can serve each home and business.
Invitation to Negotiate published; multiple companies submit bids for a fiber-optic network. After reviewing bids, Broadband Task Force recommends Strata Networks.
City Council directs staff to work with Strata Networks to prepare a scope, schedule, and fee for preliminary design work.
City Council approves Statement of Work and Master Services Agreement contracts with Strata Networks. Strata Networks begins creating full project scope, business and financial models, and a high-level project design.
High-level design and financial analysis complete, presented to the City Council. Overall project costs, bond interest rates, and required subscription rates exceed previous estimates. The project will be re-evaluated while other details about financing are prepared.
City Council decides whether to move forward with the full plan.
If the Council votes to approve the project, financial structure setup, final design, construction plans, begin construction.
24-36 months estimated until full completion once construction begins.