New Vision Co-op, Rock County getting USDA funds
LISMORE -- The Lismore Telephone Cooperative has been awarded a $300,000 grant and $740,000 loan from the U.S. Department of Agriculture's Rural Development program to benefit projects in Rock County.
In a Thursday morning press conference, U.S. Under Secretary for Rural Development Dallas Tonsager announced funding for 20 loan and grant projects in 12 states. Cooperatives in three Minnesota counties -- Freeborn, Traverse and Nobles -- were among the recipients. All of the funds are awarded to rural utility programs who act as a pass-through entity to borrow the funds to non-profit or cooperative entities.
The Lismore Telephone Co-op (LTC) will reissue the $740,000 loan to New Vision Cooperative to help fund the construction of its new feed mill near Magnolia. The 10-year loan will be repaid by New Vision at a rate of 1 percent interest, with LTC retaining the one percent as "a handling fee" of sorts, according to LTC board secretary-treasurer Mark Loosbrock.
"We get (the money) from the USDA at 0 percent and lend it to New Vision," Loosbrock explained. "It's very well secured. The telephone company wants to have no risk for its subscribers."
While the $7,400 in interest LTC will earn from the loan "isn't going to do much" for the cooperative, Loosbrock is more excited about the $300,000 grant that is coming. The funds will be loaned to Rock County, again at 1 percent interest over 10 years, but as Rock County repays the funds, LTC will get to keep all of the money to establish a revolving loan fund. LTC is also borrowing Rock County an additional $60,000 to be combined with the grant.
According to Rock County Administrator Kyle Oldre, the grant dollars and loan from LTC will be used to replace three road graders.
"This was a great way for us to get USDA financing for essential equipment," Oldre said. "Lismore Telephone Cooperative has been absolutely wonderful to work with."
As Rock County repays the loan, Loosbrock said the funds will be available to reinvest in businesses in surrounding communities
"We will keep those funds in a segregated account and be able to assist businesses in development of jobs," Loosbrock said.
Those funds wouldn't be available to just Lismore, but to other communities and rural businesses throughout LTC's service territory.
"The good thing is it does not have to be a nonprofit or a co-op," Loosbrock added. "It can be used by any for-profit business in the community. That's the real beauty of it."
Projects can include everything from business expansion to development.
"There are no pre-requirements for job creation, but obviously that is our goal," Loosbrock added.
That is also the goal of USDA-RD in issuing loan and grant dollars.
"We're strongly encouraging these utility companies across the country to form these kinds of investment funds, have the local involvement that it brings, seek the resources while they are available and help build up those funds that have a long-term effect on rural communities," Tonsager said.
During this latest round of funding, USDA-RD awarded nearly $13 million. It received applications that were first evaluated by state Rural Development staff.
This is the first time LTC has been awarded a grant through USDA-RD, although they have been the recipient of loans in the past. Rural Development funds helped put the telephone cooperative on the "leading edge" as the first in the area to provide its customers with private telephone lines and most recently to bring fiber optic cable to subscribers.
"We've always been very visionary as one of the best local telephone cooperatives," Loosbrock said.
Daily Globe Reporter Julie Buntjer may be reached at 376-7330.