Fort Bragg Faces an Escalating Price Tag for New Municipal Broadband Network

Project lead reveals $3 million in cost overruns

Got fiber? (Photo by Brad Wilmot)

What began as an ambitious vision to bridge the digital divide and invigorate Fort Bragg’s economy with a municipal fiber-optic broadband network is becoming a morass of construction challenges and public scrutiny.

Sarah McCormick, the city’s economic development manager, delivered a candid account of construction management failures and poor project scoping to the Fort Bragg City Council on Monday night.

McCormick requested and received approval to shift $1.97 million to construction activities from the operations of Mendocino Community Network, an internet service provider purchased by Fort Bragg from the Mendocino Unified School District in May. She also cautioned that “the problem isn’t solved.”

“It’s looking closer to $3 million,” she said.

A cornerstone of the city council’s 2024-2028 strategic plan, the Fort Bragg Municipal Utility Broadband Project aims to provide affordable, reliable high-speed internet to all residents, connecting them with online educational and employment opportunities. By offering assured and redundant connectivity, the city also hopes to attract diverse new businesses to the coast.

The initiative has its roots in 2019, when councilmembers began discussing the idea. It gained significant momentum in 2021 when the California Public Utilities Commission (CPUC) awarded Fort Bragg $479,000 to develop a business plan, a financing strategy, and a construction bid packet. The CPUC then came through with an additional $10.3 million to support construction.

The initial cost estimate was $14.7 million. That ballooned to $17.3 last year and is now estimated at $18.9 million.

Construction began last spring — and so did the problems, as the work collided with the city’s underground infrastructure leading to sewer backups and at least one broken water main. “In July or June, it became obvious that the level of restoration in the streets was going to far exceed what we could afford,” McCormick said.

In response, the city began looking at investing in additional public works equipment and building up its own street crew.

“Another thing that happened that was a big deal was that in September I was told by the construction manager that the project was over budget in boring,” McCormick said. Boring is the most expensive part of the project. “Being over budget is a real big deal,” she added.

McCormick said the construction manager from GHD, which was awarded the $1.4 million contract to oversee the project, could not explain where the project deviated from plan. “We quickly terminated that part of the contract because that was his job — to track the project.”

McCormick said the increase appears to be related to a design change regarding the placement of “flower pots” — in-ground enclosures that provide access so that a main fiber optic trunk line can be spliced and extended to individual residences.

“When they made that change, they didn’t change the bill of materials for boring,” McCormick said. “That would have been like a real no-brainer thing to see if you were the construction manager and tracking the project.” She said the installation of conduit also exceeded design expectations.

City staff has since begun managing the project more directly. McCormick said that the simple move of replacing a GHD inspector with city personnel is saving the city an estimated $40,000 a month. The city also decreased the original scope of the project by $698,000, including $490,750 in ADA curb ramp improvements that won’t be needed.

Councilmember Tess Albin-Smith asked if any insurance exists to cover this kind of error.

McCormick said that the problem is that the city revised the design after the bid package was sent out. “It happened very quickly,” she said. “And I would say the city has just as much “at play” in how those numbers weren’t vetted.”

Councilmember Lindy Peters pressed McCormick for an additional explanation. “It just seems like a lot of money for a small town to be that far off,” he said.

“It was really just an oversight,” McCormick said. After the bid package was sent out, city staff realized that the flower pots were going to be placed on private property, and they pulled them back to the edge of the sidewalks in the public right of way, she explained. This meant fiber had to be installed under the sidewalk.

Public reaction was mixed. Residents expressed concern about the budget overruns, the quality of the current construction work, the lack of clear communication, and ongoing liability issues.

“There’s subsidence everywhere,” Jacob Patterson said. “I’ve tripped myself. … this could easily be a class action lawsuit based on how poorly this project has been managed.”

“I believe that I’m speaking for many members of our community, when I say that I’m confused, concerned, and frustrated by this issue,” David Jensen said. “I feel like we’re headed for another C.V. Starr and that’s what makes me really nervous. We had a lot of money to build it.

Went over, we covered the costs and now we’re living with a constant drain on the city budget.”

Councilmember Scott Hockett asked McCormick to begin providing regular updates on the project. “We are going to have to see this through,” he said. “But this is out of control. Let’s reel it in.”