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Renville County puts fiber optic decision on hold

OLIVIA -- The Renville County Board of Commissioners postponed a decision on whether to authorize up to $77 million in bonds for the Renville-Sibley County Fiber Optics project.

In discussions on Tuesday, the commissioners agreed to delay a decision for two weeks as issues raised over bonding for the project are vetted. The Sibley County Board of Commissioners likewise delayed action, according to information provided the Renville County Board of Commissioners.

Renville County Board chairman Bob Fox recommended that the Renville County and Sibley County boards meet jointly to hear information on the bonding before they act.

Attorney Shannon Sweeney, bond counsel for the joint powers group, told the commissioners via a conference call that Sibley County's bond counsel, the Dorsey and Whitney law firm, had provided a memo outlining concerns it had about the bond sale.

While the details were not discussed, the commissioners noted that the concerns focus on the requirement that the counties fund a debt service account to assure that bond payments are made if there are revenue shortfalls.

Each participant would be responsible for any shortfall based on the percentage of their participation in the project. If other participants drop out, no party could be responsible for more than 150 percent of their maximum financial exposure going in, according to information presented at the meeting on Tuesday.

Renville County will be responsible for 4.4 percent of the project. In a worst case scenario -- if the project completely fails and others withdraw -- Renville County's maximum exposure would be 6 to 7 percent of costs.

In contrast, Sibley County has a 40 percent stake in the project and in a worst-case scenario could be responsible for $2 million to $5 million.

The scenarios are based on the unlikely situation that all subscribers would leave the system, Mark Erickson, project coordinator and Winthrop city administrator, told the commissioners.

"If you really think it is going to tank in three years, you need to vote no,'' he told the commissioners.

He said nine of the 11 communities involved have approved going forward with bonding.

The commissioners heard concerns about county involvement from Randy Kramer, an Osceola Township farmer who is running unopposed for the county commissioner seat currently held by Ralph Novotny.

Kramer expressed concerns about the county's financial liability and obligations. He also noted that it appeared to be a Cadillac system in terms of the capacity it would offer subscribers. "It is just can we afford it?'' he said of his concerns.

If built, the system would be available to residents in the communities of Fairfax and Buffalo Lake; all of Wellington and Cairo townships; and the eastern side of both Bandon and Camp townships, all in the county's southeast corner.

Tom Cherveny

Tom Cherveny is a regional and outdoor reporter with the West Central Tribune in Willmar, MN.

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