The deadline was Friday for eligible customers to register for the service being developed by Consolidated Telecommunications Company of Brainerd. The company needs 810 signups to start construction of the fiber line. As of late Friday afternoon, the project was 18 customers short of the goal. Progress is being watched closely by Kandiyohi County officials, who partnered almost a year ago with CTC to bring much-needed high-speed internet to unserved and underserved neighborhoods in rural Kandiyohi County.
County officials see the $10 million project–which includes local matching funds in the form of $5 million in revenue bonds issued by the county–as the first step forward in improving the availability of broadband countywide and increasing access to technology ranging from precision agriculture to telemedicine. Surveys indicate strong support for rural broadband, Connie Schmoll told the County Board earlier this week.
“People in Kandiyohi County want this project,” said Schmoll, business development specialist with the Kandiyohi County and City of Willmar Economic Development Commission. But by late June, the slow pace of customer signups had put the project in jeopardy.
Failure to reach the goal means the project will likely be scrapped, forfeiting a $4.9 million grant awarded earlier this year through the border-to-border program of the Minnesota Department of Employment and Economic Development. County officials fear that if this happens, the county may lose any future chance of receiving another broadband grant from the state. Larry Kleindl, county administrator, said he and the staff will find out Monday or Tuesday whether the final signup goal was reached. The weekend will allow enough time for last-minute registrations and deposit payments mailed Friday to arrive at CTC’s offices, he said.
It’s not clear what might happen if the effort falls short of the goal by just a few customers, he said. “If we’re close, there’ll be more discussions.”
Success would clear the way for construction of the fiber line to start this season.
About 1,500 households and about 150 businesses and community institutions lie within the project boundaries and are eligible to become customers.
About 100 more people need to sign up in the next week and a half, and pay a $25 commitment fee. Those who have already signed up — but not yet paid up — need to submit their $25 commitment fees by July 21, too. It those things don’t happen, the project won’t happen, county officials said Tuesday. Consolidated Telecommunications Co. will most likely not install a fiber-optic line to bring high-speed internet service to the area if residents do not show enough interest.
At stake is a $4.9 million state grant, which will go to another community on the waiting list for broadband service if Kandiyohi County does not use it. The county also will not go ahead with selling $5 million in revenue bonds for the project.
“The value in this project is free installation,” Kandiyohi County Commissioner Rollie Nissen said Tuesday. “All they have to buy is the internet service.”
People might be able to hook up to the broadband at a later date, but extending the line to their property could cost thousands, he said. Access to broadband internet service is estimated to add about 3 percent to the value of a property, Nissen said.
“It is very urgent that people sign up at this time,” said Connie Schmoll, business development specialist with the Kandiyohi County and city of Willmar Economic Development Commission. “The company is still saying they will only do it if they have enough people subscribe to the service.”
The $25 commitment fee will be applied to the first month’s bill, and it will be refunded if the project does not go forward. Customers make a commitment to pay $50 a month for the service for two years. Seasonal properties make a commitment to pay for service for six months a year for four years. The company cannot move forward without the state grant because installation is so expensive, Schmoll said. The expense of installation is a good reason for people to sign up now, she added.
“Those who have shown interest want it really bad,” Schmoll said. They cite many needs, for businesses, working from home and their children’s education.
“As the county commissioner for the largest portion of this buildout area, I have a great degree of interest in the success of this project,” Nissen said. His concern is not only for people in the area but also for those living nearby who might benefit from another project.
“If this project were to fail, it would be very difficult to attract another grant,” Nissen added.
The project is one of three dozen to receive state grant money this year. The funds help fill gaps, mainly in rural Minnesota, where it’s not cost-effective for a private company to install broadband. The program has a waiting list, and Kandiyohi County’s grant will likely go to the next community on the list. The project will serve a rural area bounded by Willmar to the south, Spicer to the east and Sunburg and New London to the north. The project area includes about 1,400 households and 150 businesses, as well as community gathering places.
A public meeting on the project is planned for 4 to 6 p.m. Monday at the American Legion in New London. People can ask questions, sign up and make their commitment payments, Schmoll said.
Commitment payments may also be sent to the EDC at Box 1783, Willmar MN 56201. For questions, call the EDC at 320-235-7370 or Consolidated Telecommunications at 800-753-9104. Sign up by going to Join.connect.ctc.com.
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.
The company was among 42 recipients this year of grant money awarded through the Minnesota Office of Broadband Technology to bring services to unserved and underserved rural neighborhoods. It’s a long-awaited improvement for rural residents who lack adequate access to high-speed internet, said Connie Schmoll, business development specialist with the Kandiyohi County and City of Willmar Economic Development Commission. Broadband availability has become “an expected utility,” she said. “We’re behind here in Kandiyohi County.”
Under an agreement hammered out between Kandiyohi County and Consolidated Telecommunications, the county will loan the proceeds of the bond sale to the company to help finance construction. Consolidated Telecommunications will in turn repay the county in installments.
The county’s debt service on the bonds will be paid from tax abatement revenues and property taxes which will be reduced or canceled by the loan payments from Consolidated Telecommunications.
“We’ve looked at any number of financing options,” Eldridge said. Tax abatement bonds were seen as “the most cost-effective,” she said. The bond sale is scheduled for April 17, with County Board action the following day. To meet all the requirements, 201 parcels in an area west of Spicer and within the broadband project boundaries have been earmarked for property tax abatement.
There’s no expectation, however, that any of the abatements will go onto the tax rolls, Eldridge said.
“Taxes will remain the same for everybody as they normally would be, given all other circumstances,” she said. No one showed up to speak for or against the measure at a public hearing that preceded the County Board’s vote. The County Commissioners are urging residents and businesses within the project’s target area to indicate their interest soon in signing up for services. Consolidated Telecommunications Co. needs a commitment of at least 50 percent before construction can start.
That message was repeated Tuesday by the board and by county officials.
“They have an opportunity that no one else in the county has,” said Larry Kleindl, county administrator. Roger Imdieke, chairman of the board, urged reaching out to seasonal residents who may not be aware yet of the broadband project.
The target area includes about 1,400 households, 149 businesses and four community institutions. Consolidated Telecommunications is planning 1,592 drops for service. The company will own the fiber line and be the service provider.