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City, Windstream hammer out purchase deal for utility poles

August 30, 2018

The city of Hastings and Windstream Nebraska came to an agreement for the purchase of the 1,839 utility poles Windstream Nebraska owns in Hastings.

Members of the Hastings City Council voted 8-0 during their regular meeting Monday to approve the $1.1 million purchase by the city of the Windstream poles.

Hastings began negotiating with Windstream in May 2016. The following December, the council authorized the acquisition of utility poles owned by Windstream in the city through eminent domain, which was the first step in the eminent domain process.

Within the city, another 2,900 or so poles are owned by Hastings Utilities and have Windstream equipment attached.

The city can use eminent domain only for a public purpose. In this case, that is to secure the means of distributing electricity to the citizens of Hastings without having to rely on another party to repair or replace a pole when necessary.

Windstream petitioned the court for an injunction, asking the court to declare the city lacks the necessary authority and public purpose to condemn Windstream’s property through the use of eminent domain.

Ptak had filed condemnation action against Windstream.

In November 2017, the council received a presentation from Brad Hedrick, state operations president for Windstream, who countered a previous offer of $974,000 from the city to acquire Windstream’s 1,839 utility poles. Windstream’s offer was $1.5 million, with all of the proceeds to be reinvested in Hastings with a fiber overbuild that will enable 1-gigabit internet access speeds and Windstream’s Kinetic TV product.

The amount eventually agreed upon between the two parties is $1.1 million.

“I’m always glad when we can reach a settlement where we have differences of opinions or thoughts, and so this is a good thing both for Windstream and for the city,” City Attorney Dave Ptak said Monday afternoon before the council meeting. “I’m pleased we were able to find common ground.”

The sticking point during negotiations between the two parties was the timing of transfer of control.

The city’s argument was if it is paying Windstream it wants control of the poles as soon as it pays Windstream.

Windstream wanted to preserve its rights of ownership until Jan. 1, 2019, to continue its fiber build.

“We’re fine with the payment and the transfer of control being co-terminus at Jan. 1,” Hedrick said in an interview before the meeting. “That will give us the opportunity to finish up construction activity we do have left, and then the city will have control of the poles and they can do with them what they want at that point.”

Hedrick said nearly 8,000 homes in Hastings have the capability to get 1-gig speeds in Hastings and has promotional offers.

“Our response from the citizens of Hastings has been incredible,” he said. “In fact we’re in the process of hiring five more technicians that are in addition to the six that I’ve already hired for Hastings since the start of the year. That is a real good indication of how popular our services are and we want to continue to deploy those because that’s really the business we’re in. We’re in the business of providing broadband internet.”

Ptak and Hedrick both described the negotiations between the two parties as cordial.

“Certainly there were some points we disagreed on, but I don’t think there was any kind of contention at all,” Hedrick said. “Both sides were very open to exchange of information and working together to get to a solution.”

Funds for the purchase were in the city’s 2017-18 budget and carried over to the 2018-19 fiscal year that begins Oct. 1.

It is a non-exclusive franchise.

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