County broadband left hanging

Talk about it

The proposed broadband project in Lake County is on hold while it waits to hear back from the Rural Utilities Service on funding.

“We don’t know what our chances are,” said Gary Fields of National Public Broadband, which is under contract with Lake County to get a system in place. He expects to hear by early August since federal funds need to be given out by September.

With that wait, other ideas have popped up if they don’t get the RUS help.

One option would be tagging along with the Google fiber project in Duluth, which is deemed as a longshot at best.

Fields, who worked on Duluth’s Google application thinks there’s a chance Lake County could latch on to the project.

“If Duluth is selected, there will be an opportunity for Lake County,” he said. “They may be an option before you hear from RUS.”

Fields said Duluth should hear from Google by early June.

Another option is municipal financing through revenue bonds.

According to a letter Fields sent to the county, municipal financing was not an option when the project began because the municipal bond markets were staggering from the market downturn in 2008. Now the municipal markets have rebounded and financing is an option, Fields said.

Interest rate changes in the future could have an impact on this type of financing, but it is unlikely the financial distress that happened in 2008 will recur, Fields wrote. Most of the costs of municipal financing would be paid out of a bond issue but there could be between $25,000 and $75,000 in finance charges.

The county broadband project is expected to cost $70 million and would bring service to every home in Lake and parts of St. Louis County that are reachable by existing utility poles.

The “last-mile” project, meaning service to homes from a central system, is what much of the federal money is tied to.

Service would include internet service and also high-speed wiring for televisions and phones. The fiber optics network is expected to be paid off by the operational revenue it generates. No long-term debt is expected for taxpayers.

The county board has suspended its contract with National Public Broadband until the funding is secured to stave off any payments during a lull in the application process. The group is working on becoming a tax-exempt organization as well. If NPB were approved, it could possibly provide municipal services at a lower cost than expected.

Radio update

The County Board discussed working with Cook County on the upcoming Allied Radio Matrix for Emergency Response radio dispatch system to save money. The system could cost the county about $2.5 million over 10 years. There are hopes that it will not be completely funded by the county. Cities and other agencies reliant on radio communication are being looked at for funding as well.

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