Fiber at net loss until 2011
PUD still waiting to hear on federal loan
The Grant County PUD would see an average net loss of $9.6 million per year for the fiber system until 2011, even if it receives a $60 million federal loan for rural broadband access.
This calculation comes from the financial forecast the PUD included with its application for a federal Department of Agriculture Rural Utilities Services (RUS) loan.
Rich Callahan, an irrigator from Royal Slope, was at the PUD's commissioners meeting Tuesday afternoon to voice his concerns about the financial picture the PUD will be facing if the district receives and accepts the RUS loan.
Callahan, who has been critical of PUD spending on the fiber program in the past, questioned Assistant General Manager Laura Lyon on the numbers included in the business submitted by the PUD for the loan.
Included in the noncash expenses for the fiber system is an advance from the electrical system, which would average an advance of about $5.7 million per year from 2004 to 2011.
"Nobody can pay the bill except the rate payers on the electrical side," Callahan said.
Callahan then asked Commissioner Mike Conley, a former banker, if he would approve a loan to the fiber system with numbers like this.
Conley answered that he would, but only because fiber has the weight of the electrical system guaranteeing its payment.
Lyon said the forecast does not yet show when the telecommunications system would be able to pay back the electrical system completely for its investments in fiber.
The Department of Agriculture has received the application from the PUD, but it is unknown when it will decide whether to approve the loan, which is worth up to $60 million.
If the loan is approved, PUD commissioners will then vote on whether to accept the loan. Commissioners also approved an additional $75,000 for a contract with Rapidigm, Inc. for computer software. The commission had approved a similar contract last week after the company had consolidated all of its contracts, though its contract extension ended in March.
The dollars will provide training for PUD personnel to receive training on the complex computer systems, according to PUD spokesman Gary Garnant.
The commission voted 4-1 to approve the contract, with Commissioner Bill Bjork the lone dissenter.
Bjork said he has seen too many contracts and changes of contracts from the company, and the PUD should use its own employees more often.
The commission also approved an interlocal agreement with the town of Mattawa, which will establish a pay station for PUD bills at the Mattawa Town Hall.