Blandin Webinar Archive: Broadband Finance Strategies

Webinar April 2017 Broadband Finance Strategies
April 27, 2017 03:00 PM

Financing public sector investment in broadband projects can be complex, requiring both financial and political accountability. Learn from finance and local economic experts about how these deals are put together.

Speakers include:

  • Shannon Sweeney, David Drown Associates
  • Paul Donna, Robert W. Baird & Co.
  • Nancy Hoffman, Chisago County HRA-EDA
  • Mark Erickson, City of Winthrop

Broadband feasibility studies are a step toward grant applications, RFPs, getting networks built!

Last week, the MN Broadband Task Force heard from practitioners on the utility of feasibility studies. I’m on the Task Force and found the topic interesting and worth a deeper dive, especially given Blandin Foundation’s experience with and commitment to the feasibility study as a key step in moving a broadband project closer to reality.

Since 2007, Blandin Foundation had provided matching grants totaling $718,321 to 24 rural Minnesota communities to support the cost of a broadband feasibility study through its Robust Network Feasibility Fund. This grant program requires communities to produce a one-to-one cash match for awarded grants.

In 2013, Blandin Foundation published Lessons from Rural Minnesota Broadband Feasibility Studies: What can rural communities learn about broadband expansion, based on feasibility studies completed to date?” It looks at grants made between 2007 and 2012 to 11 communities to fund broadband feasibility studies, and identifies some best practices and recommendations for maximizing the effectiveness of such studies.

Five of these funded communities have gone on to deploy broadband networks; six have not.

The difference: access to capital.

Four of the five communities were able to build networks based on their completed studies due to ARRA (American Recovery and Reinvestment Act) funding. (Actually four networks were deployed, as two communities with feasibility studies became one ARRA project.) Having feasibility study results in hand played a key role in positioning the awarded communities to be competitive for federal funding.  The studies provided the communities with the data required in the application process and demonstrated that they were shovel-ready projects, which was a major requirement of projects seeking ARRA funding.

One community, Red Wing, successfully deployed a fiber optic network without ARRA funding, through partnership with Hiawatha Broadband Communications. HBC applied for ARRA funding, but was not awarded funds. Despite this setback, HBC moved ahead with the Red Wing project using their own source of funds.

State broadband funds were not available at this time, so that was not an option for communities.

In 2013, Blandin Foundation made three more broadband feasibility study grants:

As communities and counties increasingly feel the pain of being left behind, Blandin Foundation is experiencing increased demand for feasibility study grants.

In 2015-16, Blandin Foundation funded broadband feasibility studies in 10 communities.

The grant applications for this round of feasibility studies all emerged from an inclusive community engagement process.  Community members identified the need to conduct a study in order to move ahead on their technology goals and then shaped the study’s purpose, goals, and scope, and selected a consultant.

Broadband networks are now being built in six of the 10 communities that conducted feasibility studies in 2015-2016; four with state grant dollars, and two without.

Some conclusions I draw from this experience:  

  • Feasibility studies can be an effective tool in helping communities advance their broadband goals.
  • Feasibility studies inform both sides of prospective partnerships: public sector leadership and private sector providers.
  • Feasibility studies should be designed to drive decision-making throughout an interactive and iterative process defining public sector role, technology choices and partnership options.

How to build momentum for broadband-friendly legislation – public relations

Government Technology recently ran an article on proactive approaches to anti-muni broadband legislation. They are talking specifically about legislation in Missouri – but recognize the challenge to broadband legislation anywhere…

For years, incumbent telecom and cable companies trying to preserve their anti-competition fiefdoms have viewed state legislatures as the best hunting grounds. Given that few constituents know their legislators or the issues they tackle, incumbents need only influence two or three busloads of representatives in any statehouse.

But those who care about broadband — including local elected leaders, administrators, public utility managers, community stakeholders and others — are stepping up their advocacy game in response to recent legislative losses. Despite a big win for community broadband forces in Virginia, Tennessee appears to be headed to a Pyrrhic victory, North Carolina only offers a sliver hope and supporters were defeated in Alabama.

So what does Gov Tech suggest? PR…

There are several aspects to public relations, with media relations being a key element. In February, Virginia’s broadband stakeholders and advocates demonstrated effective media relations and why it’s important. …

“Media coverage of the municipal broadband issues has been fantastic,” Arbogast said. “I did lots of interviews after the bill came out. I also called and emailed state legislators, local officials, congressman, everybody I could think of to get their support.”

And a 12month PR plan…

PR is broadly defined as actions taken to influence a group of people with whom you do business. State legislatures influence cities’ ability to access money, resources and permissions. Subsequently, design a PR plan with the goal of influencing legislators’ hearts and minds regarding community broadband.

They call out Minnesota Broadband Coalition’s Day on the Hill as an example…

Minnesota jurisdictions have to pass a referendum in order to be allowed to build their own networks, which is a surmountable requirement. But to avoid the type of unpleasantness that Virginia endured, the Minnesota Broadband Coalition proactively hosted a “Minnesota Broadband on the Hill Day.” Over 80 community broadband planners and stakeholders met with 40 state legislators for a day of panels, presentations and tours in the statehouse. This type of direct engagement that’s done on a regular basis helps communities maintain their place at the table.

Shareable content on rural broadband from NTCA

The NTCA–The Rural Broadband Association has started to collect collateral to help communities promote rural broadband. They want to hear your story, to share your story and invite you to share their resources. Sign up and share your story and their send you a social media kit to get you started.

Kandiyohi County to sell bonds next month to finance broadband project

According to the West Central Tribune

Tax abatement bonds will be issued this spring to finance Kandiyohi County’s matching share of a $10 million private-sector project to bring broadband to some of the rural neighborhoods that need it most.

The County Board of Commissioners set the process in motion Tuesday with the adoption of a pair of resolutions. The first resolution sets a tax abatement hearing for 10:15 a.m. April 4. The second clears the way for the sale of $5 million in bonds.

The amount is the local match for a $4.9 million grant awarded earlier this year by the Minnesota Office of Broadband Development to Consolidated Telecommunications Company.

It’s the county’s first foray into the realm of tax abatement bonds, said Larry Kleindl, county administrator.

The article goes on to explain the tax abatement bonds…

Proceeds from the bonds will be loaned to Consolidated Telecommunications Company for the broadband project.

The debt service for the bonds will be paid from tax abatement revenues and property taxes which will be reduced or cancelled by the loan payments from Consolidated Telecommunications Company, explained Shelly Eldridge, senior municipal adviser with Ehlers.

“We believe that this is the most cost-effective way to finance this project,” she told the County Commissioners.

A fact sheet on Ehlers web site further explains that tax abatement, in practice, is a reallocation of taxes. All taxes are still paid in full, but the abated amount is redirected to a specific project rather than going to the general fund. Bonds may be issued to finance the project and repaid with proceeds of the abatement.

I think it’s helpful for other communities to see how it’s getting done. The Border to Border grants are a huge boost to rural broadband in Minnesota – but it’s only a piece of the puzzle. Generally the community and the provider hold a piece too.

Pipestone County proceeds with broadband feasibility study

We’re getting the regional study report from all angle – but I think it’s helpful to get the varied points of views. Today from the Pipestone County Star

Pipestone County will participate in a multi-county study to find out what it would take to provide broadband internet access to under-served parts of the county.

The county board during its Feb. 14 meeting voted unanimously to accept a proposal from Finley Engineering and CCG Consulting to conduct the feasibility study for Pipestone, Chippewa, Lincoln, Lyon, Murray and Yellow Medicine counties.

According to the proposal, the study will include at least three scenarios: Building a complete fiber system; building a fiber backbone and using towers to provide wireless service; and building fiber only where it’s economically feasible and using wireless everywhere else.

Chippewa, Lincoln, Lyon, Murray, Pipestone and Yellow Medicine counties still looking at regional broadband study

The Marshall Independent reports on the growing partnership between Chippewa, Lincoln, Lyon, Murray, Pipestone and Yellow Medicine counties to plan for better broadband…

Access to high-speed Internet has become a hot topic for southwest Minnesota — because it’s something many residents still don’t have, especially in rural areas.

A group of six area counties is talking about ways to change that, however. On Tuesday, Lyon County commissioners voted to join in a proposed broadband feasibility study for Chippewa, Lincoln, Lyon, Murray, Pipestone and Yellow Medicine counties.

County Board chairman Paul Graupmann said the group of counties received a proposal for the study from Finley Engineering of Slayton.

“Several of us have met and discussed it,” and would like to move forward with the study, Graupmann said.

Finley Engineering and CCG Consulting are proposing to study three different possibilities for expanding broadband Internet in the region. The first possibility would be to build fiber lines out to underserved areas of each county. A less costly option could be to build a fiber-fed wireless network. The proposed study will also examine possible public/private partnerships.

The proposal said the study will compare costs for all three situations and look at ways to fund each.