PUD officials debate accepting loan funds
Dept. of Ag has received application, but opinions differ on whether to take debt
Grant County PUD officials have received notice that the application for a $60 million federal loan for fiber optics is complete.
Now, two questions remain: whether Grant PUD will be chosen to receive money, and whether commissioners will then give the okay to accept the debt.
The PUD filed the original paperwork for the U.S. Department of Agriculture Rural Utilities Services (RUS) loan in July 2003 with the goal of using the funds to continue the Zipp fiber-optics project.
Commission President Tom Flint, who has been a strong proponent of fiber buildout, said at Monday's PUD business meeting that he believes the people who elected him support moving forward on the fiber program.
"The folks have pretty much made the decision for the county to move forward with fiber," Flint said.
The aforementioned "folks," Flint added, include those who attended a recent fiber focus meeting in Ephrata, where the majority of the 75 people in attendance supported continued buildout.
Commissioner Bill Bjork, who has pushed for greater accountability in fiber spending, said at the meeting that the PUD needs to have a better business plan before accepting additional debt to build out the system.
"Until we do, I don't think we should be doing anything," Bjork said.
Bjork added that the PUD spent about $4.2 million in overhead costs on fiber, while the system has collected about $800,000 for 2003. While Bjork said he does not dislike fiber itself, he added that he thinks it should pay for itself.
Bjork's concern was echoed by Kathy Hanford-Wiley, a Soap Lake woman who has spoken up about budgetary issues at commission meetings in the past.
Hanford-Wiley said she too feared taking out too much debt on the system without a solid business plan. She also expressed concern as to whether the public would have a chance to comment before commissioners vote on whether to accept any funds that may be offered.
While it seems unlikely the commission will hold a public hearing, people will have the opportunity to comment during the PUD's regular business meeting, Commissioner Vera Claussen said.
Department of Agriculture officials gave no indication as to when the agency would make its decision as to where the money goes.
According to Larry Jones, PUD director of telecommunications, the agriculture department has accepted eight applications total for RUS funds.
"This is a milestone for Grant PUD and the Zipp Network," Jones said in a news release.
"We continue to hear from people in the community that want access to services on the network. This notification brings us one step closer in our efforts to find financing that will allow us to deploy broadband service to all parts of the county," Jones added in the release.
If the PUD does receive loan money, it must follow guidelines set forth by the Department of Agriculture.
Kenneth Kuchno, program manager of the RUS broadband telecommunications program, wrote in a letter to PUD General Manager Tim Culbertson that the PUD's loan application will continue to be reviewed.
Focus of the review will include financial feasibility, the intercompany relationship between electric and telecommunications systems, loan security and the technical design of the program, Kuchno wrote.
Kuchno also included a list of eight criteria the PUD must follow if it receives RUS dollars, including engineering, construction and purchasing guidelines.
After charging forward on their goal to bring fiber to all of Grant County, PUD officials have pulled back on the fiber program this year. Only two hubs have been completed in 2004 (compared to 25 in 2001) because the commission has sequestered telecommunications funds following reports of misspending released in 2003.