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County radio tower project faces delays and potential arbitrage repayments after missed spending benchmarks
Summary
Construction at multiple radio tower sites is underway but contractual and weather delays — including slow responses from UScellular and its leasing partner Pyramid — caused the county to miss spending benchmarks tied to tax-exempt borrowing; staff said arbitrage calculations are pending and the county made a $500,000 payment this week to reduce exposure.
County staff updated the committee on progress and financial risks related to the multi-site radio tower project. Contractors have completed access roads at some sites and construction is starting at others, but ongoing contract delays with UScellular and third-party lessors have prevented the project from meeting pre-set spending benchmarks required under the tax-exempt borrowing terms.
Staff explained that the financing included an 18-month spending window tied to low-interest, tax-exempt borrowing; because specific spending thresholds (including an early $600,000 benchmark) were missed, the county now faces an "arbitrage" calculation that could require returning excess interest earnings to the lender. County officials said the arbitrage calculation will quantify any amount the county must return and that such outcomes are not uncommon for multiyear construction projects.
Officials said weather and terrain complicated construction timing and that the county has been working to push payments as projects reach completion; staff confirmed a $500,000 payment was processed this week to reduce exposure. Committee members asked for continued tracking and documentation of milestones, and staff said they are coordinating with the lender and project managers to minimize further exposure.
The committee discussed ongoing contractual friction with UScellular and the leasing company Pyramid, which adds administrative steps and has slowed approvals. Staff said they will continue to press vendors for delivery and will bring further updates once arbitrage calculations are complete.
