Kandiyohi County works on bond sale for Border to Border broadband network

Last month, I wrote about progress on the Kandiyohi-CTC Border to Border funded fiber upgrades. CTC was holding meetings to talk about the upgrades in the impacted and nearby areas. This week the community took another big step in their project.

According to the West Central Tribune

One more step was completed Tuesday as Kandiyohi County prepares to sell $5 million in tax abatement bonds to help fund the development of rural broadband.

The County Board of Commissioners approved a resolution Tuesday for property tax abatements totaling $5 million over 20 years. The move will have no impact on actual property taxes paid but is a requirement for the county to use tax abatement bonds as a financing mechanism.

Shelly Eldridge, senior municipal adviser with Ehlers, said it’s “the backup that supports the general obligation.”

This is the first time Kandiyohi County has sought this type of financing for an infrastructure project. Proceeds from the sale of the bonds will supply the local share of a $10 million broadband expansion in north central Kandiyohi County by Consolidated Telecommunications Co. of Brainerd.

Border to Border Broadband meeting in Spicer

According to the West Central Tribune there’s a meeting in Spicer to discuss the recent Border to Border broadband grant (next meeting April 4)…

The second in a series of meetings on broadband expansion in northern Kandiyohi County will be at 5 p.m. [yesterday] today at the Dethlefs Center in Spicer.

Representatives of Consolidated Telecommunications Co. will be on hand to explain the project and answer questions. Those who live or do business within the proposed project zone also will have an opportunity to sign up for future services.

Consolidated Telecommunications was awarded a grant earlier this year through the Minnesota Office of Broadband Technology to bring high-speed internet to unserved rural neighborhoods in north central Kandiyohi County.

They were talking what they need to happen to help the project succeed…

Connie Schmoll, business development specialist for the Kandiyohi County and City of Willmar Economic Development Commission, said 53 people attended the first meeting, which was held Monday evening.

Consolidated Telecommunications Co. needs at least half of the potential customer base within the target area to become subscribers in order to make the project financially feasible. Because of the state grant funds, those who sign up during the project deployment will not be charged installation fees, Schmoll said.

Monthly fees are competitive with services offered by other local carriers. Bundles that include landline telephone service and TV also will be offered if there’s enough interest.

A final informational meeting with CTC will be held at 5 p.m. April 4 at the Dethlefs Center in Spicer.

MN House Job Growth Budget – $7 million for broadband grants for one year only

Earlier today I posted the Senate budget for broadband ($10 million a year for 2 years). Now I have the House Job Growth and Energy Affordability Policy and Finance Committee posted proposed budget today.

Here’s what they have for broadband: Broadband (HF1618 Baker/HF841 Sandstede) (Border to Border Grants)

  • FY 2018 – $7 million
  • FY 2019 – 0
  • FY 2020 – 0
  • 2021– 0

They budget $250,000/year for the Office of Broadband Development from 2018-2021.

Both the Senate and the House are far from the $50 million a year proposed by the MN Broadband Task Force and the $30 million a year proposed by the Governor.

MN Senate Jobs Omnibus Budget Spreadsheet – Broadband Grant funding through FY 2018-19

I try to follow what’s going on at the State in terms of funding for broadband. Yesterday I ran across the Senate Jobs Omnibus Budget Spreadsheet. There are a couple of interesting items related to broadband.

  • The Governor’s proposed appropriation for Border to Border grant for 2018-19 is $60 Million ($30 million per year) with $500,000 ($250,000 per year) for the Office of Broadband Development
  • The Senate’s proposed appropriation for Border to Border grant for 2018-19 is $20 Million ($10 million per year) with $500,000 ($250,000 per year) for the Office of Broadband Development
  • Neither have proposed funding for the grants for FY2 20-21
  • Both have proposed funding of $500,000) ($250,000 per year) for the Office of Broadband Development for 2020-21

Kandiyohi County & CTC get started on their Border to Border project

The West Central Tribune reports on a fantastic way to start a Border to Border Project…

A series of “meet and greets” will be held over the next three weeks for residents and businesses within the proposed service zone of a broadband project by Consolidated Telecommunications Co.

The meetings are scheduled for this coming Monday; Thursday, March 23; and April 4. All three will be held from 5 to 6:30 p.m. at the Dethlefs Senior Center in Spicer.

The sessions will be an opportunity for residents to meet representatives of Consolidated Telecommunications Co., ask questions and sign up for future broadband services.

Those who aren’t sure whether their home or business is within the proposed project area may go to the company’s website at www.connectctc.comand enter their street address and zip code.

Kandiyohi County residents who live or own a business outside the project zone are also encouraged to attend. Their input will help Consolidated Telecommunications gauge local interest in future broadband expansion projects.

So smart to get the community involved at the onset. AND I want to highlight the door that has opened because of the grant. They are inviting others to come to help decide where to go next.

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.

More on Mantorville Border to Border grant (Dodge & Olmsted Counties)

According to the Steele County Times

 KMTelecom has received a 2016 matching state grant of just more than $764,000 to serve 195 unserved households, nine unserved businesses, the Mantorville Township building, and a small section of west-central Olmsted County.  

It is part of the Border-to-Border Broadband Development Grant Program, which funds the expansion of high-speed broadband Internet service to unserved or underserved areas in Minnesota.

KMTelecom, in a funding partnership with the State of Minnesota, will exceeding the 2026 state goal by offering speeds up to 1 Gigabyte. 

Broadband access will be available to the Kasson-Mantorville school system, Minnesota’s higher education system, and healthcare systems, and will help the region compete in the business development arena, according to information at www.mn.gov.

“It’s great for our rural customers,” KMTelecom president Mary Ehmke said. “Without grant money, we can’t afford to ‘build out’ the rural. It just doesn’t make sense, because of the subscriber density. But we do it because we’re customer service –oriented, and it’s ‘future-proofing’ our network. But out in the rural areas, where you’ve got two or three subscribers per square mile, you can’t justify the cost it takes to put fiber in without some grant money from the state. We might be doing little portions at a time, but we wouldn’t be able to do a project like rural Mantorville without this grant money.”

Ehmke said fiber optic cables will replace copper cable in ground, providing unlimited Internet speed and data. She hopes to have subscribers on the high-speed network by early 2018.