This document discusses the history and challenges of the R/S Fiber Project, a joint effort between 11 cities and 2 counties in Minnesota to build a fiber-to-the-farm network from 2010 to 2014. It initially started as a joint powers board but had to change to a cooperative ownership structure due to financial challenges. It now involves 17 townships and 10 cities issuing bonds to fund a loan to the private cooperative. The document outlines lessons learned around setting clear expectations between partners and having outdated telecommunications laws in Minnesota. It also recommends legislative changes to clarify authority around government-run fiber networks and allow more government support of bonds.

1. Making Public Private
Partnerships Work
November 19, 2014
Shannon Sweeney, Associate
David Drown Associates, Inc.

2. History – R/S Fiber Project….
2010 11 Cities and 2 Counties formed a joint powers
board to explore the feasibility of constructing a
fiber-to-the-farm network.
2011 Joint Powers used funding from members and
Blandin to explore project feasibility.
2012 Joint Powers worked in earnest to assemble and
finance a project. Engineering, Legal, Finance
2013 Gave up on original structure due to changes in
financial market conditions.

3. History….
2013 Identified alternative structure that took
advantage of the grass roots nature of the
project. Cooperative ownership.
2013 - 2014
Discussed feasibility of the units of government
providing an economic development loan.
2014 Now have 17 townships and 10 cities as members
of a joint powers board proposing to issue G.O.
Tax Abatement Bonds to fund a loan to the
private cooperative.

4. Key points
If multiple jurisdictions/partners are
attempting to work together, make sure
that the expectations and goals are
similar. It is extremely expensive, time
consuming, and frustrating when a
project partner leaves.
Minnesota laws regarding
telecommunications and governmental
finance of fiber have not kept up with
technology.

5. Key points
Tax abatement bond law currently
provides a useful tool for local
governments to assist private or
governmental service providers.
Assisting the expansion of an existing
service provider is a far easier task than
starting from scratch.
A reliable source for working capital
should be identified early on.

6. Suggested Legislative Changes:
Remove ambiguity about the authority for
cities and counties to own and operate fiber
networks, without referendum.
Allow cities and counties, without
referendum, to pledge their full faith and
credit to the payment of up to 30 percent of
the annual debt service on bonds issued to
finance a fiber network.

7. Suggested Legislative Changes:
Allow the State to provide credit-enhancement
for the portion of bonds issued
by a city or county that is secured by the
issuer’s full faith and credit.