LCTC seeks $3 million loan from Nobles County
WORTHINGTON -- Representatives from Lismore Cooperative Telephone Co. appeared before Nobles County commissioners during a work session Tuesday with a request to help finance $2.5 to $3 million of the Nobles County Broadband project.
WORTHINGTON - Representatives from Lismore Cooperative Telephone Co. appeared before Nobles County commissioners during a work session Tuesday with a request to help finance $2.5 to $3 million of the Nobles County Broadband project.
LCTC was awarded a nearly $3 million grant from the Minnesota Department of Employment and Economic Development in January to deliver fiber to unserved areas in Nobles County. That’s combined with another $3 million LCTC has available to invest in the project.
Secretary-Treasurer Mark Loosbrock said the company had anticipated getting a $1 million, zero-interest loan through Nobles Cooperative Electric to fund the project. LCTC has since learned its project doesn’t qualify.
The overall project cost to bring fiber to every home in Nobles County is estimated at $19 million, or $6.9 million for wireless service. LCTC plans to construct a hybrid model, including a combination of fiber and wireless, at a cost of $8.9 million.
Construction on the first phase of the project is slated to begin in July, with a broadband ring built out from Adrian to Leota and Wilmont and then east to Nobles Cooperative Electric this year. LCTC General Manager Bill Loonan said the project must be completed by July 2018 as a requirement of the DEED grant.
Loosbrock said the cooperative looked at traditional financing for the remainder of the funds needed, but with interest rates of 5 percent to 6 percent and amortization over 12 years, it would severely impact the project.
“We are turning to you, the county, for support on the project,” Loosbrock said, noting that other counties, including neighboring Rock County, did a tax abatement bond to help finance its broadband project.
In Rock County, a 10-year, $1 million tax abatement bond was secured.
“They are not requiring any repayment from the investment,” Loosbrock noted. “They are supporting this with their wind production credits - it’s quite a statement of what they feel is important to the county.”
In another instance - in Renville and Kandiyohi counties - Loosbrock said the counties provided the funds and will absorb the interest, with the provider making payments on the principle.
Loosbrock said $3 million will provide the cash flow to allow LCTC to get the speeds necessary to Nobles County residents.
“This is the direction we want to go and we think this is the direction the county needs to go,” he added. “We need cash flow to do that.”
Commissioner Matt Widboom asked if any other grant opportunities exist.
“No,” Loosbrock replied. “We’re trying. Finley Engineering has been trying to locate funding.”
“We talk economic development everywhere,” said Commissioner Don Linssen. “I think this is an economic development issue. To say we’re going to use wind money, I think that’s an option we’re going to have to look at. I would support doing something. I think the county has to have some skin in this also.”
Commissioner Gene Metz said using county bonding to finance the remainder of the broadband project would cut the interest rate for financing in half.
“It accelerates the rate of return that we can use to build out other areas of the county,” Metz said.
Nobles County Administrator Tom Johnson was directed to gather information from bond counsel on a potential tax abatement bond project.
In other business, commissioners met with Nobles Soil and Water Conservation District staff John Shea and Austin DeWitte, along with Nobles County Environmental Services Director Wayne Smith, regarding the public comment period on the draft policy and administrative penalty order plan addressing Minnesota’s new buffer law.
Shea reported the comment period ends May 8, and the goal is to have final modifications to the plans completed by the end of May. The state recently released a list of alternative practices that will be allowed in place of the 50-foot buffers, and farmers will need to make the decision that’s best for them.
“My board is of the influence that if you want to do an alternative practice, that’s great, but it’s not going to be under our plan,” Shea said. “We’ll give as much guidance as we can, but we don’t have time to build everyone’s alternative practice.”
Of the 1,684 letters mailed by the SWCD to landowners regarding the buffer requirements, DeWitte reported that 847 landowners are in compliance and another 386 sites have been addressed. They have yet to hear from 451 landowners.
Shea said they want to know landowner plans for the buffers by the end of August.