City reaches agreement with Hargray, CenturyLink to bury Boundary Street wires

emoody@beaufortgazette.comJune 11, 2014 

Traffic as seen at the intersection of Robert Smalls Parkway and Boundary Street in Beaufort the afternoon of June 11, 2014.

DELAYNA EARLEY — Staff photo Buy Photo

The city of Beaufort, Hargray Communications and CenturyLink say they've agreed to share the cost of burying wires along Boundary Street without charging residents or customers for the work.

Details of the agreements, which City Council approved Tuesday, were made public Wednesday in a joint news release by the companies and city officials.

The city will pay up to $300,000 of each company's costs for moving wires underground. That money comes from the construction budget for a $26.3 million project designed to revitalize Boundary Street between Robert Smalls Parkway and Ribaut Road.

The companies are expected to work together to reduce the overall cost of putting wires underground, the two agreements say.

City finance director Kathy Todd said the money is not coming out of a specific fund, and city manager Scott Dadson added that the agreements will not affect funding for other parts of the project.

Hargray and CenturyLink provide Internet, cable TV and phone services.

Hargray, which estimates it will cost $1.1 million to bury its lines, will be reimbursed for 30 percent of its costs, up to $300,000.

CenturyLink, which faces an estimated $600,000 expense, will receive $200,000, plus up to 25 percent of costs. That is capped at either $300,000 or what Hargray receives, if that number is lower, according to CenturyLink's agreement.

Both agreements include clauses prohibiting the companies from raising customer rates to recoup costs.

Stephanie Cashwell, CenturyLink market development manager, and Chris McCorkendale, Hargray vice president of operations and strategic sales, both said the money would come from their companies' capital budgets.

"We had no intention of passing these costs along to customers, and so customers will see no increase in monthly charges on their bills in relation to this project," McCorkendale said.

The city has no direct controls on those rates, but Todd said officials can ask for explanations about rate increases if there are concerns.

"I would expect that the residents would complain if they saw it on their bills," she said.

The deals follow a related agreement reached with SCE&G last week.

City Council agreed to create a citywide franchise-fee district that would allow the electric utility to charge Beaufort customers an extra 2 percent on their power bills for about seven years. The fee will allow SCE&G to recoup the $2.87 million it estimates it will spend to bury lines.

The city is paying about $3.5 million to install an underground conduit to hold the utility lines.

SCE&G rents space to the companies on its poles, although the communications companies also own some of the poles to be removed.

City officials had said Beaufort would not pay for the communications companies to move their wires, but Dadson said the SCE&G agreement set a precedent and this was a way of settling with the companies to move forward.

"I think we and they wanted to find a resolution in a quick and productive way," Todd added.

The SCE&G agreement took more than a year of negotiations, in part because of a question about right-of-way details for which the electric company could not produce documentation, according to city attorney Bill Harvey. But talks with the communications companies moved swiftly.

CenturyLink requested City Council publicly acknowledge the company has been a good partner, according to the agreement.

"Everyone (knows) that there were a lot of emotions on this issue," Cashwell said, referring to the June 3 meeting when representatives from both communications companies bristled at comments by council members and the public about being uncooperative on past projects.

"We just wanted to make sure customers knew we worked amicably," Cashwell said.

Preliminary plans call for construction on the Boundary Street Project to begin at the end of July and take about 18 months. The city's conduit is expected to take six to 12 months, and SCE&G poles are required to be removed within three months of completion, or as soon as all wires are removed.

Follow reporter Erin Moody at twitter.com/IPBG_Erin.

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