consultants are sandburs

Monday, January 20, 2014

RAMSEY - The thought of a data center at the former city hall site, Nowthen Blvd. by Alpine, near the grade school, other side of the street.

While the put-in-a-data-center possibility is being explored with a community group composed primarily of neighbors of the site, two things seem determinative, market-wise. The operating costs would be debt service and taxes, relatively fixed costs for any data center operator who might think to site there; and a key variable or pair of variables that, absent a long term lock in situation, would be of critical importance. Cost of power, and that's Connexus distributing to homeowner rate payers, and to commercial enterprise, at what they set their rates to be and how they opt to contract; and cost of access to the data pipeline, the fiberoptic service to the site.

At a guess, before any serious consideration of the option of siting a data center, a server farm, there the City would need to be secure in the belief Connexus policy and operations are favorable.

So far, I have seen nothing either way indicating any such assurance. It would be folly to move forward with any such retooling plan unless there is a sound exit strategy in case either the fiber service or the power service is subject to uncertainty. A hope would be that the citizen panel would be seeking such assurances, on behalf of all of us who are both city taxpayers and Connexus customers. I think it incumbent on Connexus and the city to have an understanding, and it has to be one made subject to full and complete public scrutiny. Transparancy is good, sunshine being the best disinfectant standing as a 1914 observation that continues true to today.

BOTTOM LINE: Is there an understanding, and what are its terms? What role has Connexus played so far in promoting the concept? What assurance is there that the rug will not be pulled out from under anyone's feet?

Absent knowing that, how in the world can a citizens' panel be expected to function cogently and to be anything other than window dressing to things behind closed doors? An empty white elephant already exists there, per sunk city capital costs. Would there be any wisdom to sinking more, for a larger bigger white elephant? Seems not.

ADDED NOTE: This is not a "don't do it" post, but a "be careful" one. City of Ramsey criteria should be first, to assure neighborhood worry is given due concern, an aim already being met via use of the citizens' panel.

Second, be alert, and like good Boy Scouts, be prepared. Know the costs and other options foregone if a data center idea is to be, and not via simple back-of-the-envelope guesswork, but ideally by more sound numbers backed up by sound promises, on paper with default avenues of redress spelled out and backed up by a pocket deep enough to be able, if needed, to collect a judgment and not some shell LLC or such - and in general to plan as carefully as feasible, as needed to be assured of not holding an empty bag after spending yet more city cash chasing unfulfilled promises.

The sobering experience of paving Puma Street and putting in a traffic light to accommodate an unkept promise and in the course of doing that, (and having that very Christian school stay cozy as-is in Andover after Ramsey blew a ton of MSA money on believing them), is recent history. That lax belief in a promise caused an MSA fund expenditure that now sees the city having to consider franchise fees for assuring the well-being of the taxpayers' road grid - yes, dumb folly and done by that last decisively voted out council - but voters most likely were hoping for a learning curve, new folks vs last ones, being an improvement.

So check out the deal, have an exit strategy, and minimize the amount of up-front spent cash chasing yet another dream/promise. Learn from history or be doomed to repeat it. And with the power provider key to success/failure of any data center dreams/schemes, pin Connexus down where they have zero wiggle room, or risk later wishing you had.

__________FURTHER UPDATE__________
While not Connexus nor Ramsey specific, this item offers some insight into how some, in control of a public utility, may think, (or how at least one regulator viewed it).

No comments: