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County staff flags debt risk in proposed BugTussle broadband/radio partnership; recommends caution
Summary
Staff presented limited PMA due diligence on a proposed partnership with BugTussle to provide towers, fiber and a county radio network, warned missing financials and potential county liability on long‑term bond obligations, and recommended caution and further work on towers/leases as an alternative.
County staff told the Sawyer County Public Safety Committee that a PMA limited due‑diligence review of a proposed partnership with BugTussle showed material information gaps and a potentially large financial risk to the county.
The PMA analysis did not have full 2023 financial statements for Hilbert (the project guarantor), so staff said a complete credit review could not be completed. Staff summarized key points from the analysis: BugTussle’s financial model assumes initial subscriber take rates of roughly 40% of homes passed with growth toward 60%; the model is stressed if take rates fall below about 70% of projections. Staff warned that if revenues from participating counties and service contracts fall short, counties could be responsible for portions of long‑term debt service. In one scenario staff described, the county’s potential liability could reach as much as roughly $16 million tied to a 30‑year bond if guarantors cannot cover shortfalls.
Staff noted potential operational benefits — access to towers, fiber and a public‑safety radio network without the county building towers — but said the missing financial information and concentration of debt across many counties increases risk. Staff recommended not moving forward with BugTussle under current terms and suggested the board consider alternatives such as negotiating tower leases or building a smaller, county‑owned radio system (estimated locally at about $2.75 million for two towers and associated equipment). The committee asked staff to forward the analysis and recommendation to the County Board for decision.
No formal county board approval was taken by the committee; staff will bring the matter and the PMA analysis to the County Board as part of ongoing due diligence.
