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Oneida County committee reviews financial exposure tied to Bug Tussel broadband loan
Summary
An executive committee briefing outlined Oneida County’s potential financial obligations tied to a $24 million 2023 bond financing for Bug Tussel/Hilbert Communications and flagged the possibility of reserve replenishment or levy impact if project revenues fall short.
The Oneida County Executive Committee received a briefing May 20 from public finance adviser Ehlers on the county’s exposure from a 2023 bond financing tied to Bug Tussel/Hilbert Communications.
Sean Lentz of Ehlers told the committee that Oneida County’s portion of the 2023 financing project is $24 million and that the bonds are structured with interest‑only payments scheduled through 2029 followed by a 30‑year amortization. Lentz reported that, to date, interest payments have been made from bond proceeds rather than from Bug Tussel’s own funds, and that the bond structure includes a Debt Service Reserve with roughly one year of payments (Ehlers cited one year of payments and interest as $1,975,498). Lentz said there is a potential shortfall of about $250,000 if project revenues prove insufficient.
Finance Director Tina Smigielski told the committee that the county is monitoring the project and that the county has committed to replenishing the Debt Service Reserve if it is used. "We are covered through 2026," Smigielski said, but she added that if the County must use the Capitalized Interest Account it would need to be repaid and that any replenishment could be reflected in the 2027 levy.
Committee members discussed a previously established procedure requiring staff to present draws when the project fund balance falls below $1.25 million. The committee was presented with Bug Tussel Draw #2023‑168 in the amount of $204,541.32; the meeting record provided does not show a formal committee vote on that draw. Lentz also reported that Bug Tussel has made an informal request to the county for a second, larger tranche of financing; Smigielski said a formal feasibility study would be required if Bug Tussel submits a formal request and called the situation "wait and see."
Ehlers advised the county that, if any shortfalls occur that require county action, the first budget year likely to feel an effect would be 2028. County staff said they will continue to monitor operations and project revenues in coordination with IT and county administration.
Next steps: staff will await any formal request and feasibility study from Bug Tussel and continue monitoring the project’s revenue performance; the committee did not record any formal approval of an additional financing tranche at this meeting.
