Initial resolution for Bug Tussel bond OK’d

By Kevin O’Brien

Marathon County supervisors approved an initial resolution last week that will allow the county to start negotiating the terms of a $12 million bonding request from Bug Tussel, which says it needs the money to finish a major broadband internet expansion by the end of the year.

The 22-11 vote in favor of the resolution (with five members absent) was enough to adopt it, but the number of yes votes fell well short of the three-fourths majority that will be needed to pass a final resolution in August or September.

At meetings earlier this month, several supervisors expressed misgivings about approving a new 30-year bond for a company that has already been provided with $25 million as part of a broadband expansion proposal approved in 2021.

Supervisor Gayle Marshall said the additional $12 million represents a 48 percent increase over the original bond amount and wondered why the county was not holding Bug Tussel to its initial commitment to install 18 towers and 190 miles of fiber with the money provided in 2021.

“We’re asked to ignore that we have a debt limit ordinance,” she said. “We’re also asked to look at this as a 30-year project, and typically counties can only borrow up to 20 years. I’m sure that limit is there for a reason.”

Supervisor John Robinson, chair of the county’s broadband task force, said the $12 million is not general obligation debt, so it does not count against the county’s state-imposed borrowing limit. (The county also has a separate, self-imposed debt ceiling in its ordinances).

Under conduit borrowing, Bug Tussel and its parent company, Hilbert Communications, is responsible for making all of the debt payments. If both companies were to default, the county would be responsible for continuing the payments, but a reserve fund has been established by Bug Tussel to cover two years worth of debt obligations. The county would also take ownership of all the company’s towers and fiber as collateral.

Robinson said a default is not expected, and the county does not want to do anything that would prevent Bug Tussel from completing the project and providing high-speed internet to the county’s rural residents.

“We are financial partners with them, and we will share in their success and we will share in their failure,” he said. “I’d prefer to share in their success.”

So far, Bug Tussel has erected and activated 16 towers throughout the county that provide WiFi internet and space for cellular service. Also, according to the company’s attorney, Mitch Olson, crews have laid over 200 miles of cable, and there’s about 50 miles to go between Stratford and Mosinee to complete a countywide fiber loop.

“We have a clear line of the sight to the finish line on this project,” he said.

At the June 18 board meeting, supervisor Brent Jacobson raised concerns about investing in technology that may be obsolete well before the 30-year bond is paid off. In response to a similar question at the board’s June 13 meeting, Olson noted that the original fiber cables installed by telephone companies in the 1970s and 80s are still in use.

“The technology does change, but the infrastructure does not,” he said.

As an explanation for why Bug Tussel needs more money, company officials have said their costs have gone up because of inflationary increases for labor and materials and the expense of drilling through bedrock while laying fiber. However, Olson said the “lion’s share” of the cost overrun is due to the scope of the project growing over time.

“We did more than we originally budgeted for,” Olson said at a June 12 committee meeting.

The $12 million request includes $5 million for completing the countywide loop, $3 million for broadband expansion in the Leathercamp area in Kronenwetter and $4 million for reserve funds and capitalized interest.

Erin Andrews, the county’s broadband coordinator, told supervisors at their June 13 meeting that about 1,800 homes and businesses along Bug Tussel’s “middle-mile” route will have access to high-speed internet once the countywide project is completed. “Middle-mile” refers to the fiber connecting the towers, with the “final mile” being the branches to individual customers.

Andrews said the Wisconsin Public Service Commission has estimated that as many as 15,000 homes and businesses in Marathon County lack fast, reliable internet access, and until recently, the county had six different grant-funded broadband expansion projects in the works. However, Frontier Communications and Charter Communications have both recently backed out of projects due to cost concerns, leaving about 1,700 residents without future access.

When asked what would happen if the $12 million bond was not approved, Olson said the final section of fiber from Stratford to Mosinee would not be completed, but the county would still be obligated to complete the work in the Leathercamp area.

Bug Tussel’s recent request was initially met with a fair amount of hesitation among board members. At a June 12 meeting of the Human Resources, Finance and Personnel Committee, supervisors initially deadlocked on a 4-4 vote to postpone consideration of the initial resolution. A new motion was eventually adopted to advance the proposal to the full board.

Corporation counsel Michael Puerner told supervisors that adopting the initial resolution will allow county staff to start working on new agreements with Bug Tussel “so that we can protect the county the best we can.”

“This a question of balancing risk versus the completion of the project as presented,” he said.

Erin Andrews