FY 2023 ICN ANNUAL REPORT

ICN Annual Report FY 2023

Annual Report FY2023

Iowa Communications Network
Providing High Speed Internet, Voice, Security & Consulting Services

Table of Contents

This annual report highlights agency information between July 1, 2022 - June 30, 2023.

  • Welcome, Celebrating 30 Years
  • Letter to the Governor
  • Our Mission
  • General Updates
  • Service Updates
  • Customer Initiatives
  • Looking Ahead to Fiscal Year 2024
  • Financial Charts
  • Financial Reports
    • Fiscal Year 2023 Budget
    • Statement of Net Assets
    • Statement of Changes in Net Position
       

Welcome to Our Annual Report

This was a milestone year for the Iowa Communications Network, as we celebrated 30 years of the Network. I want to thank the people that had the vision years ago to establish a one of kind statewide Network. Those first years were spent finalizing fiber installations and establishing our county points of presence to allow us to take the next step of connecting K-12 schools and other customers to the Network.

I also wanted to thank Governor Kim Reynolds for issuing a signed proclamation celebrating our 30 Years of Service. The proclamation explained our critical communications and how the network meets the always changing needs of our customers now and into the future.

As a telecommunications provider, we need to ensure broadband connectivity is available far beyond the base service level requirements defined by State and Federal guidance. Today, our focus is listening to our customers and hearing their needs. We continue to hear about bandwidth demands, cloud connections, and security concerns. As we have in the past, we will always strive to meet those needs. We’re proud of our first 30 years and we look forward to our future.

Randy Goddard Executive Director Iowa Communications Network

Iowa Telecommunications and Technology Commission 
Steve Olson, Chair | Robert Holz | Brett Mason | Denise Sturm | Carmine Boal 
Rob Sand, ex officio, State of Iowa Auditor | Dr. Matt Behrens, ex officio, Chief Information Officer

ICN Executive Team 
Randy Goddard, Executive Director | Mark Johnson, Chief Administrative Officer | Scott Pappan, Chief Technology Officer
 

Letter to the Governor

November 16, 2023
The Honorable Kim Reynolds
Governor, State of Iowa
State Capitol Des Moines, Iowa 50319

Dear Governor Reynolds:

On behalf of the Iowa Telecommunications and Technology Commission, I am submitting to you the Fiscal Year 2023 Annual Report for the Iowa Communications Network (ICN).

Fiscal Year 2023 was a milestone year for the Network, when we celebrated the 30th anniversary. We were honored to receive a proclamation for the ‘30 Years of Service with the Iowa Communications Network’, which described the efforts and enhancements of the Network.

The ICN takes great pride in being a crucial telecommunications and broadband asset to support our users in the sectors of education, healthcare, government, and public safety. Of note, we continue to support more than 220 healthcare facilities located in more than 80 counties, as well as providing the primary backbone connectivity to all of Iowa’s Public Safety Answering Points (PSAPs) in partnership with the Iowa Department of Homeland Security and Emergency Management (HSEMD). As seen by the information in this report, the ICN continues to serve a critical role in safeguarding the welfare, health, and safety of all Iowans. A few projects highlighted in the report include:

  • The design and installation of a FirstNet failover solution for PSAPs throughout Iowa in partnership with Iowa’s HSEMD. ICN provides the primary network for the state's 911 system with a failover network operated by FirstNet/AT&T. The FirstNet failover solution provides a redundant connection that is completely separate from the ICN's network that will allow the PSAPs to continue their operations in the event the primary traffic route fails. More than 75 PSAPs currently have this failover solution.
  • The beginning of a three-year project to redesign and upgrade our 10Gb aggregation network facilities. The design improvements and equipment upgrades will result in a more efficient network with greater capacity. It provides a more redundant and resilient network infrastructure that serves our users statewide.
  • ICN's coordination of the 800 tip line used state-wide for the Safe+Sound Iowa app.
  • Providing affordable Managed Voice Services to a number of K-12 schools with limited funding.


Please take a look at our Fiscal Year 2023 report. The Commission and ICN staff will continue to provide a statewide, dependable, and secure network, as well as technical solutions that support improved broadband, government accessibility, and economic growth for Iowans.

On behalf of the Commission and all ICN employees, we appreciate the opportunity to be of service. Sincerely,

Steve Olson Chair, Iowa Telecommunications and Technology Commission
 

Our Mission

Providing a statewide, innovative, secure, reliable network, and technology solutions for education, healthcare, public safety, and government.
 

Who We Are

We are a State government agency operating a state-of-the-art fiber optic network providing broadband and telecommunications services to authorized users in all 99 counties.

Our business offices are located on the and our primary hub and Network Operations Center are located at the Iowa State Capitol Complex in Des Moines, National Guard Joint Forces Headquarters (JFHQ) in Johnston.
 

Authorized Users

The ICN is statutorily limited, by the Code of Iowa, Chapter 8D, in who is permitted to utilize the Network.

  • Education
    • K-12 Public and Private Schools
    • Libraries
    • Higher Education
    • Regent Universities
  • Healthcare
    • Hospitals
    • Medical Clinics
  • Public Safety
    • Homeland Security
    • Department of Public Safety
    • National Guard
  • Government
    • State Government
    • Federal Government
    • Judicial Branch

Services

  • Security
    • Palo Alto Firewall
    • Fortinet Firewall
    • DDoS Mitigation
  • Data
    • Internet
    • Ethernet
    • Cloud Connection
  • Communications
    • Managed Voice
    • Long Distance & Toll
    • Voice Conferencing
  • Professional Services
    • Consultation
    • Colocation
    • Structured Cabling
       

General Updates

Legislative Session Recap

Commission Member Updates: Governor Reynolds appointed three individuals to serve as new members on the Iowa Telecommunications and Technology Commission (ITTC), the governing body of the ICN. In addition, she appointed Steve Olson as Chair of the Commission. All of the appointments received Senate confirmation on April 17, 2023.
 
New Commissioners:

  • Brett Mason
  • Denise Sturm
  • Carmine Boal
  • Steve Olson, Chair
     

Lucas Building Switch Room HVAC, Rebuild Iowa Infrastructure Fund Appropriation: The Lucas Building Switch Room is the primary demarcation point for telecommunications services on the Capitol Complex in Des Moines, IA. The existing HVAC started failing during the summer of 2022. The Department of Administrative Services (DAS), who is the contractor, also recommended replacement. The total of this appropriation is $578,412.

Contracts Exceeding $1 Million, Code of Iowa Reference ICN contracts entered into during FY 2023 exceeding $1 million, as required by the Code of Iowa, Section 8D.3(3)(f ).

  • None

Public/Private Partnerships In Fiscal Year 2023, ICN reinvested a total of $23M back into the private sector with $9.1M of that going to private telecommunications providers.
 

Service Updates

Internet

Internet Purchased by Sector.

Education 232.830 Gb

  • Higher Education - 82.915 Gb
  • K-12 - 127.895 Gb
  • AEA - 17.800 Gb
  • Libraries - 4.130 GB

Healthcare - 7.540 Gb

Government - 39.511 Gb

Public Safety - 10.340 Gb

Total Internet Purchased: 290.221 Gb


 

Voice

Our VoIP platform is hosted in a cloud environment. To date, there are 160 active customer groups*, with 6,197 employee seats activated. The service provides relocation benefits during disaster recovery situations, free long distance, 800 calling, and call encryption.

*One building can incorporate multiple customer groups.

Voice Migrations During FY2023:

  • A provider change was initiated for our voice conferencing service. Customers migrated to LoopUp voice conferencing. Larger users include the Judicial Branch and the Department of Human Services.
     

Security

Internet Purchased by Sector.

Our DDoS Mitigation service continues to grow as we provide the security protection to all Executive Branch agencies with Internet service.

During the Last 12 Months:

  • Detected 40,570 DDoS attacks on the State’s Network.
  • Longest DDoS attack was 11 hrs., 59 mins.
  • Largest DDoS attack was 1.74TB (Terabyte)
     

Customer Initiatives

Connecting Classrooms

Many Iowa schools are turning to the ICN for Voice services to connect classrooms throughout their buildings.

Educators are able to customize settings using any web enabled device to set up voicemail, set call forwarding, and manage contacts.

Service Highlights:

  • During the summer of 2022, ICN installed a wireless phone for AGWSR (Ackley Geneva Wellsburg Steamboat Rock) to restore service for the school secretary after a lightning strike.
  • In the months prior to school beginning in 2023, ICN converted 90+ phones for Grundy Center CSD. We used the school’s current fiber connections to the elementary, middle, and high school buildings. In addition, an existing wireless connection was implemented for the Administration building to connect to the VoIP platform.

Preparing for State Government Restructuring

In April 2023, Gov. Kim Reynolds signed an agency reorganization plan in law, reducing Iowa’s 37 executive-level cabinet agencies down to 16. The restructuring was enacted July 1.

In the weeks preceding July 1, our ICN team has worked to ensure that state government functions smoothly for Iowans during the agency restructuring.

This project required:

  • Processing orders for cabling, data, and voice services.
  • Installing or removing cabling for office relocations, as agencies consolidate and merge.
  • Office workstation reconfigurations and infrastructure upgrades to handle voice and data requirements for new employees. The ICN continues to be available to assist agencies as they modify their telecommunication services.

Safe + Sound Iowa

The ICN worked on this important resource for Iowa’s education community and local law enforcement. We coordinated the 800 tip line used for reporting safety concerns. To help identify students in crisis, the Governor’s School Safety Bureau established the Safe+Sound Iowa app available to students, school personnel, parents, and concerned community members. Reports of safety concerns can be made securely and anonymously in one of three ways:

  • Downloading and using the free Safe+Sound Iowa app.
  • Going to SafeandSoundIowa.gov.
  • Calling the Safe+Sound Iowa tip line at 800-224-6018.



Assisting ISU Research with Wireless Technology

An advanced wireless research project is being managed and deployed on the campus of Iowa State University (ISU). This smart agriculture and rural broadband project spans the counties of Story, Boone and Marshall, and includes surrounding research and producer farms, along with rural communities in central Iowa.

We are providing wavelengths across the ICN fiber to ISU in support of this project and connections. The primary physical connections are between the Agronomy Farm and the Black Engineering Building, and Boone High School and an ICN core point-of-presence (PoP). Those physical locations then connect to a number of towers, enabling the establishment of a wireless network providing coverage across the three project counties.

The project will support rural-focused research, education, and innovation. The technology for the agriculture community will focus on precision agriculture in both crop and livestock farms.

Examples of technology used include:

  • Livestock tracking and plant/weed identification with artificial intelligence (AI).
  • Agriculture vehicle automation in tractors and drones.
  • Connectivity between high-resolution cameras and edge/cloud computing for real-time data analytics.

Our Public Safety Dedication

Throughout the year, our structured cabling team has been installing FirstNet backup service for Public Safety Answering Points (PSAPs) throughout Iowa. The FirstNet failover solution provides a redundant connection that is completely separate from the ICN’s Network that will allow the PSAPs to continue their operations in the event the primary traffic route fails.

By the end of June 2023, the team installed the CradlePoint back-up equipment at over 75 locations.

For PSAPs in Iowa, ICN provides the primary network for the state’s 911 system with a failover network operated by FirstNet/AT&T.

FirstNet Authority News

January 5, 2023
By John Hunt, Senior Public Safety Advisor,
First Responder Network Authority (FirstNet Authority)

No Single Point of Failure

The Iowa Communications Network is a publicly owned fiber network that has served as Iowa’s ESInet since 2010. It provides the backbone connectivity for PSAPs to remotely access the centralized call-handling equipment. [Blake] DeRouchey recognized that they needed a secondary connection that was totally separate from the Iowa Communications Network.

“Enter FirstNet—a great solution for us. It ensured that there was not going to be a single point of failure,” he said.

“Before shared services, there was just one connection into the PSAP, and now we have an environment where 70 PSAPs have a backup. Plus we are saving money through a technological consolidation,” said DeRouchey. “So it’s multiple reasons for the value add.”

Relocating Back-up Power During the Summer Months

Generators and propane tanks are pieces of equipment that are tested regularly to help ensure back-up power starts, if needed, to power ICN’s FOTS rooms (fiber-optic transmission system) located at numerous sites throughout the State. In August 2022, our team wrapped up a major relocation that required planning and coordination both internally, with our customers, and with outside vendors.

Ames High School, Ames

The installation of a generator and a propane tank was needed to stand up a new FOTS room for network equipment at the new Ames High School, which opened in August 2022. This collaborative effort was completed on time.

SYBAC Update and Parent Feedback

Students that make up ICN’s Statewide Youth Broadband Advisory Council (SYBAC) completed Fortinet’s Network Security Expert Level 1 certificate. This certification provides an understanding of the ever-increasing threat landscape and common concepts.

During the school year, the SYBAC students also learned about a variety of topics, such as:

  • Technology in healthcare
  • FirstNet and how it relates to the Iowa HSEMD and 9-1-1 initiatives.
  • The importance of cybersecurity, protecting Iowa schools.
  • ICN’s robust and statewide infrastructure.

 


Looking Ahead to the Fiscal Year 2024

Aggregation Equipment Upgrade

This three-year project is to redesign and upgrade our 10Gb aggregation network facilities. The design improvements and equipment upgrades will result in a more efficient network with greater capacity. It provides a more redundant and resilient network infrastructure that serves our users statewide. This project will increase interoperability between core and aggregation equipment and provide additional security for our customers. This helps reduce network complexity and costs by simplifying management, increasing flexibility, and improving performance.

SIP Migration (Session Initiation Protocol)

The ICN recognizes the need to migrate from the legacy Public Switched Telephone Network (PSTN) infrastructure to a SIP trunking architecture. This allows the ability to plan and design new services that provide our customers access to additional unified communications (UC) applications. This is the pathway forward for voice services, which would allow the ability to retire the legacy platform.

Security Enhancements

Firewall Decentralization: Implementing the second phase of the Firewall decentralization, which includes taking the government agencies and providing their own individualized security solution. Firewall customers will have added security enhancements like intrusion prevention, content filtering, anti-malware, while also receiving enhanced reporting.

Distributed Denial of Service (DDoS) Mitigation Platform: Redesigning our mitigation platform to offer the ability to process and mitigate additional malicious traffic. The enhanced platform will also allow for greater flexibility to perform updates without taking the DDoS mitigation system offline. ICN will have more redundancy and efficient traffic flows across the State when mitigating attacks for our customers that subscribe to the service.

Peer to Career

The Ottumwa Job Corps Center reached out to the ICN, resulting in a partnership with ICN that connects future network cabling technicians with Iowa’s telecommunications industry. This new program will provide student trainees exclusive exposure to a variety of Iowa telecommunications companies. Students will hear from representatives explaining outside plant work, fiber optic cabling, network troubleshooting, facilities, and more.
 

Financial Charts

The “Operating and Capital Asset Revenues” graph shows ICN generated over $32M in revenues from billed services to authorized users.

 

The “Payments by Vendor Type” graph shows how the revenue generated is used in supporting the network. The largest ICN expenses in FY23 were the network maintenance and payments to vendor telecommunication companies supplying voice, data transport, and Internet services. Payment for the cost of the “last-mile” connections that are leased from telecommunications companies is directed back to Iowa’s private sector providers.

Expenses to outside vendors only. Excludes payroll and employee reimbursements.

Footnote: ICN’s financial statements are shown using Generally Accepted Accounting Principles (GAAP). As a government entity in a fee-for-service environment, ICN uses accrual accounting with a measurement focus emphasizing the matching of revenues with costs of services including depreciation of assets such as network equipment and fiber. Most other State of Iowa agencies use the modified accrual accounting method with a measurement focus emphasizing control and accountability over the raising and spending of public monies.

Fiscal Year 2023 Financial Information

Operating Budget Proposal for Fiscal Year Ending June 30, 2024. Revised 5-13-2023.

REVENUE FY 2023 through March 31,2023
12 Month Projected Actuals
FY 2023 Budget FY24
Budget
Proposal
Voice Revenue 7,717,639 8,472,975 7,464,963
Data Revenue 14,269,957 14,154,913 13,875,009
Internet Revenue 6,251,159 6,396,022 6,575,673
Security Revenue 418,864 531,267 468,660
Colocation Revenue 249,180 228,780 249,180
Outside Plant Build Out/Maintenance Revenue 2,470,320 2,435,718 2,983,654
Network Professional Services Revenue 37,129 23,000 35,000
Structured Cabling Revenue 3,300 50,000 36,650
Interest Revenue 121,993 11,796 101,913
Other Revenue 72,478 21,568 9,577
GROSS REVENUES 31,612,019 32,326,039 31,800,279
DIRECT EXPENSES      
Voice Direct Expense 5,123,279 5,388,928 4,376,791
Data Expenses 5,040,952 4,937,823 4,387,595
Internet Expenses 624,312 700,528 664,243
Security Expenses 90,956 89,126 78,368
Colocation Expenses 3,000 - 6,881
Outside Plant Build Out Expenses 254,246 601,762 303,073
Network Professional Services Expenses 16,051 12,350 15,250
Structured Cabling Expense 2,287 28,400 18,600
TOTAL DIRECT EXPENSES 11,155,083 11,758,917 9,850,801
GROSS MARGIN 20,456,936 20,567,122 21,949,478
OPERATING EXPENSES      
System Maintenance and Technical Support 6 ,549,007 6,887,456 6,506,553
Outside Plant Maintenance Expenses 2,597,541 2,551,772 2,979,963
Operating Professional Fees 127,607 94,095 124,095
Other Operating Expenses 573,979 674,515 567,553
TOTAL OPERATING EXPENSES 9,848,134 10,207,838 10,178,164
NET MARGIN 10,608,802 10,359,284 11,771,314
GENERAL AND ADMINISTRATIVE      
Personnel Services 9,168,897 9,025,562 9,379,605
Travel 31,986 33,196 45,098
Other General & Administrative Expenses 651,966 700,810 690,472
Professional Fees 168,778 85,000 169,312
TOTAL G, S, and A EXPENSES 10,021,627 9,844,568 10,284,487
NET CASH (DEFICIT) from OPERATIONS (587,175) (514,716) (1,486,827)
CAPITAL BUDGET      
Capital Expenditures 465,278 514,716 1,356,587
NET EQUIPMENT PURCHASES 465,278 514,716 1,356,587
NET CASH (DEFICIT)  (121,897) (-) 130,240

Balance Sheet (Statement of Net Assets) For the Thirteen Months Ending June 30, 2023

ASSETS Fiscal Year 2023 Fiscal Year 2022 Amount %
Cash and Cash Equivalents 6,791,203.45 6,239,218.25 551,985.20 8.85%
Accounts Receivable 3,552,916.14 3,461,029.69 91,886.45 2.65%
Due From Other Agencies 46,503.99 0.00 (46,503.99) (0.00%)
Interest Receivable 45,043.69 9,584.49 35,459.20 369.96%
Inventory 891,631.78 1,090,401.82 (198,770.04) (18.23%)
Prepaid Expenses 1,219,727.76 1,264,840.41 (45,112.65) (3.57%)
Total Current Assets 12,547,026.81 12,065,074.66 481,952.15 3.99%
Fixed Assets (Net) 4,937,139.02 6,738,504.97 (1,801,365.95) (26.73%)
Lease Assets (Net) 4,202,980.78 4,866,096.58 (663,115.80) (13.63%)
Total Deferred Outflows of Resources 1,055,498.09 1,126,645.54 (71,147.45) (6.31%)
TOTAL ASSETS $22,742,644.70 $24,796,321.75 ($2,053,677.05) (8.28%)
LIABILITIES        
Accounts Payable and Accruals 2,087,842.44 2,705,865.72 (618,023.28) (22.84%)
Sick Leave Incentive Program - Retirees 29,031.00 38,976.00 (9,945.00) (25.52%)
Current Portion, Lease Liability 620,253.09 613,583.41 6,669.68 1.09%
Unearned Revenue 980,557.04 1,241,913.15 (261,356.11) (21.04%)
Short-Term Compensated Absences 659,254.39 732,222.04 (72,967.65) (9.97%)
Sick Leave Incentive Program - Employees 64,237.45 59,856.49 4,380.96 7.32%
Other Post-Employment Benefits 47,613.85 49,384.05 (1,770.20) (3.58%)
Total Current Liabilities 4,488,789.26 5,441,800.86 (953,011.60) (17.51%)
LT Sick Leave Incentive Program - Retirees 14,318.00 54,428.00 (40,110.00) (73.69%)
Long-Term Lease Liability 3,632,296.07 4,252,513.20 (620,217.13) (14.58%)
Long-Term Compensated Absences 285,219.74 227,257.68 57,962.06 25.50%
LT Sick Leave Incentive Program - Employees 658,560.73 609,772.99 48,787.74 8.00%
Accrued Sick Leave 69,075.31 69,434.20 (358.89) (0.52%)
Other Post-Employment Benefits 793,370.15 882,259.95 (88,889.80) (10.08%)
Net Pension Liabilities 3,231,366.00 117,158.00 3,114,208.00 2658.13%
Total Deferred Inflows of Resources 1,325,745.01 5,278,489.00 (3,952,743.99) (74.88%)
Total Long-Term Liabilities 10,009,951.01 11,491,313.02 (1,481,362.01) (12.89%)
TOTAL LIABILITIES $14,498,740.27 $16,933,113.88 ($2,434,373.61) (14.38%)
FUND EQUITY        
Retained Earnings 8,243,904.43 7,863,207.87 380,696.56 4.84%
TOTAL FUND EQUITY 8,243,904.43 7,863,207.87 380,696.56 4.84%
TOTAL LIABILITIES & FUND EQUITY $22,742,644.70 $24,796,321.75 ($2,053,677.05) (8.28%)

Statement of Changes in Net Position For the Thirteen Months Ending June 30, 2023

ASSETS Fiscal Year 2023 Fiscal Year 2022 Increase(Decrease) Amount Increase(Decrease) Percent
Cash and Equivalents $5,349,173 $5,540,248 ($191,076) 3.45%
Accounts Receivable 3,552,916 3,461,030 91,886 2.65%
Due From Other Agencies 46,504 0.00 46,504 0.00%
Interest Receivable 45,044 9,584 35,459 369.96%
Inventory 891,632 1,090,402 (198,770) -18.23%
Prepaid Expenses 1,219,728 1,264,840 (45,113) -3.57%
Total Current Assets 11,104,996 11,366,105 (261,109) -2.30%
Unexpended Appropriations 1,442,031 0.00 1,442,031 0.00%
Fixed Assets (Net) 4,937,139 6,738,505 (1,801,366) -26.73%
Lease Assets (Net) 4,202,981 4,866,097 (663,116) -13.63%
TOTAL ASSETS $21,687,147 $22,970,706 ($1,283,560) -5.59%
DEFERRED OUTFLOWS OF RESOURCES        
Total Deferred outflows of resources 1,055,498 1,126,646 (71,147) -6.31%
Total Assets And Deferred Outflows 22,742,645 24,097,352 (1,354,707) -5.62%
LIABILITIES        
Accounts Payable and Accruals 2,087,842 2,705,866 (618,023) -22.84%
Sick Leave Incentive Program - Retirees 29,031 38,976 (9,945) -25.52%
Current Portion, Lease Liability 620,253 613,583 6,670 1.09%
Unearned Revenue 980,557 1,241,913 (261,356) -21.04%
Short-Term Compensated Absences 659,254 732,222 (72,968) -9.97%
Sick Leave Incentive Program - Employees 64,237 59,856 4,381 7.32%
Other Post-Employment Benefits 47,614 449,384 (1,770) -3.58%
Total Current Liabilities 4,488,789 5,441,801 (953,012) -17.51%
Non Current Liabilities        
LT Sick Leave Incentive Program - Retirees 14,318 54,428 (40,110) -73.69%
Long-Term Lease Liability 3,632,296 4,252,513 (620,217) -14.58%
Long-Term Compensated Absences 285,220 227,258 57,962 25.50%
LT Sick Leave Incentive Program - Employees 658,561 609,773 48,788 8.00%
Accrued Sick Leave 69,075 69,434 (359) -0.52%
Other Post-Employment Benefits 793,370 882,260 (88,890) -10.08%
Net Pension Liabilities 3,231,366 117,158 3,114,208 2658.13%
Total Long-Term Liabilities 8,684,206 6,212,824 2,471,382 39.78%
TOTAL LIABILITIES 13,172,995 11,654,625 1,518,370 13.03%
DEFERRED INFLOWS OF RESOURCES        
Total deferred inflows of resources 1,325,745 5,278,489 (3,952,744) -74.88%
NET POSITION        
Unrestricted 8,243,904 7,863,208 380,697 4.84%
Total Net Position 8,243,904 7,863,208 380,697 4.84%

Annual Report FY 2023 Back Page

Iowa Communications Network
Grimes State Office Building
400 East 14th Street
Des Moines, Iowa 50319
icn.iowa.gov