Fiber network still suffering growing pains
County steps in to cover $1 million in annual debt payments
David Corrado hopes the fiber broadband communications network owned by the Medina County Port Authority will soon become profitable. File photo
MEDINA – The customer base for the Medina County fiber optic communications network is growing but is still short of generating enough in user fees to pay back the loan to construct it.
David Corrado, chief operating officer, said the network has seen a big increase in customers in the past few months, but most of the fees generated by those customers has been reinvested in new equipment and engineering services to attract more customers.
The net result is that the system owned by the Medina County Port Authority did not contribute much to the network’s annual debt payments of $1.2 million in the past year. That responsibility fell mainly to county commissioners, who maintain a bond reserve fund to guarantee repayment of the $14.4 million borrowed to construct the network.
Corrado said the network has seen a 40 percent growth in customers over the last five months and now has about 140 customers connected to the network. The network has also been adding carriers and has eight companies such as AT&T providing services through the network.
“We’re growing rapidly now, but like many new companies, we’re reinvesting the profits into the company to encourage additional growth,” Corrado said.
County Administrator Scott Miller said county government is facing some daunting financial challenges, but accepts the Port Authority decision to reinvest income from the fiber network into expanded capability.
“It’s a tough call,” Miller said. “We’d like to have the money now, but if they (the Port Authority) don’t expand and increase their customer base, they won’t increase their revenue.”
Debt payments of about $600,000 are due twice a year on the bonds issued in 2010 to build the network. Unable to generate enough in revenue to make those payments, the Port Authority first began tapping a $1.2 million bond reserve fund established by Medina County commissioners to cover the obligation in 2014.
Maintaining the balance in the bond reserve fund is mainly the responsibility of county commissioners but the cities of Brunswick, Medina and Wadsworth along with the villages of Seville, Lodi and Westfield Center entered temporary participation agreements with the county to help maintain the bond reserve fund.
The participation agreements with Brunswick, Medina and Wadsworth expired last year and they no longer contribute to the bond reserve fund. Miller said Seville, Lodi and Westfield Center will contribute about $100,000 to the fund this year, but will no longer be obligated to maintain the fund next year.
Corrado said the network is in the fourth year of a five-year plan to make the network self-sufficient. He said that plan is on track and the network should be able to generate enough in user fees to cover the debt payments next year.
Created and publicly owned by the Medina County Port Authority, the Medina County fiber network forms a 151-mile loop around the county. It has been operating since 2012 to provide high-speed broadband transport to businesses, governments and institutional customers.
The Fiber Network partners with telecommunications companies which offer services such as internet, voice, video, offsite file storage and hosting, network management and data center services.
David Corrado, chief operating officer, said the network has seen a big increase in customers in the past few months, but most of the fees generated by those customers has been reinvested in new equipment and engineering services to attract more customers.
The net result is that the system owned by the Medina County Port Authority did not contribute much to the network’s annual debt payments of $1.2 million in the past year. That responsibility fell mainly to county commissioners, who maintain a bond reserve fund to guarantee repayment of the $14.4 million borrowed to construct the network.
Corrado said the network has seen a 40 percent growth in customers over the last five months and now has about 140 customers connected to the network. The network has also been adding carriers and has eight companies such as AT&T providing services through the network.
“We’re growing rapidly now, but like many new companies, we’re reinvesting the profits into the company to encourage additional growth,” Corrado said.
County Administrator Scott Miller said county government is facing some daunting financial challenges, but accepts the Port Authority decision to reinvest income from the fiber network into expanded capability.
“It’s a tough call,” Miller said. “We’d like to have the money now, but if they (the Port Authority) don’t expand and increase their customer base, they won’t increase their revenue.”
Debt payments of about $600,000 are due twice a year on the bonds issued in 2010 to build the network. Unable to generate enough in revenue to make those payments, the Port Authority first began tapping a $1.2 million bond reserve fund established by Medina County commissioners to cover the obligation in 2014.
Maintaining the balance in the bond reserve fund is mainly the responsibility of county commissioners but the cities of Brunswick, Medina and Wadsworth along with the villages of Seville, Lodi and Westfield Center entered temporary participation agreements with the county to help maintain the bond reserve fund.
The participation agreements with Brunswick, Medina and Wadsworth expired last year and they no longer contribute to the bond reserve fund. Miller said Seville, Lodi and Westfield Center will contribute about $100,000 to the fund this year, but will no longer be obligated to maintain the fund next year.
Corrado said the network is in the fourth year of a five-year plan to make the network self-sufficient. He said that plan is on track and the network should be able to generate enough in user fees to cover the debt payments next year.
Created and publicly owned by the Medina County Port Authority, the Medina County fiber network forms a 151-mile loop around the county. It has been operating since 2012 to provide high-speed broadband transport to businesses, governments and institutional customers.
The Fiber Network partners with telecommunications companies which offer services such as internet, voice, video, offsite file storage and hosting, network management and data center services.