MEDINA — Members of the business community attended the county commissioners’ meeting Monday to show their support for the fiber optic network project that has been in the works for about 10 years.
They also were there to ask commissioners to show their support by voting to provide a credit enhancement for the project — in other words, a financial safety net.
The Medina County Port Authority has asked commissioners to sign an agreement in which the county will replenish a bond reserve fund for the project if it dips below a certain amount. Any money the county pays into the fund would be a loan paid back by the Port Authority with interest, authority administrator Bethany Dentler said.
The Port Authority was established in 2003 and “is relatively new. It doesn’t have the strengths to do this on its own. So it does need the county’s backing to obtain bond financing,” explained Jim Gerspacher, who chairs the Port Authority’s committee for the fiber optic network.
If commissioners agree, it could mean the Port Authority would have a better bond rating when taking on debt, making it easier to receive loans. It also could make it easier to receive lower interest rates, which would lower the cost of the project.
The $7.3 million project involves building a 151-mile, 144-strand fiber optic loop in the county that would connect with existing fiber networks in Cuyahoga and Summit counties. It would create high-bandwidth connectivity for institutional groups, such as government entities, libraries, schools, businesses and hospitals. It also would give private broadband companies a chance to pay to access the network and serve other customers, including residential ones.
Gerspacher explained the project’s bond reserve fund would need to be kept above about $1.1 million, or 10 percent of the total money expected to be borrowed for the project. He said it would be several years before the fund nears that point. He also noted the Port Authority expects the fiber optic project to be profitable, so it’s possible it would not dip below that and commissioners would not have to put in any money.
Commissioner Pat Geissman said she’s concerned about guaranteeing the project because of the county’s tight economic situation.
“Unfortunately, timing couldn’t be worse for them to ask us to guarantee something,” she said.
She said she supports constructing the loop, but fears the Port Authority could default on the loan if it doesn’t make enough profit from the loop.
“It may never happen. It probably never will happen. But you’re still putting the county at risk. We don’t know if the county is going to get better,” she said.
Commissioner Steve Hambley said the county is discussing sharing the responsibility for the fund with other governments. For example, about 16 percent of the loop passes through Brunswick. He suggested the city might have that much responsibility for any money owed to the bond reserve fund.
“If we can get more people signed in on this, obviously it makes us more comfortable as a county,” Hambley said. He said if more entities participate, it could improve the bond rating even more.
He said county officials have had preliminary meetings with Brunswick and Medina and limited discussions with some villages.
Commissioner Sharon Ray said Tuesday commissioners eventually will vote on whether to back the fund.
“But I feel positively that this would be a good move for the county. From an economic development standpoint, we have to be competitive,” she said.
Medina County businesspeople had similar comments on Monday.
“Economic development, today and tomorrow, is an extremely competitive field,” said Jim Doutt, a former director of the Medina County Economic Development Corp. and now a manager of business development at EBO Group in Sharon Township.
“What you need to do as an economic developer is set yourself apart from the competition,” he said. “That’s what this fiber ring will do.”
Bob Joyce, chairman and CEO of Westfield Group in Westfield Center, said his company has used teleconferencing to communicate inexpensively with its offices throughout the country.
“While cost is an issue, timeliness and quality of communication is much more important. The fiber ring would help us do that,” he said.
Gerspacher said the project will be paid for with low-interest, stimulus-funded Recovery Zone Bonds. So far, the Port Authority has been allocated $4.2 million in the bonds, but has a chance to receive more from the state. Gerspacher said whatever the Port Authority doesn’t receive in Recovery Zone Bonds it will take out in traditional bonds.
He said construction likely will start shortly after the bonds are issued sometime early this summer and construction will take between 12 and 18 months.
Contact Maria Kacik at (330) 721-4049 or email@example.com.
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