MONTICELLO, Minn. (AP) — The bondholders who put up money for the city of Monticello to build a broadband network will be taking a hit.
After defaulting on the debt a year ago, Minnesota Public Radio reports (http://bit.ly/14uq7Pl ), the city is offering to repay a fraction of the $26 million it borrowed.
Monticello’s tale kindles the debate over whether local governments should build their own broadband networks or whether the projects are best left to private companies.
The city’s settlement offer is for 22 cents on the dollar. City Administrator Jeff O’Neill says it’s unclear whether the network could ever generate enough business to give bondholders a better return.
At least 90 percent of bondholders must accept the settlement. If they don’t, they might get an even smaller return than what the city is offering.
Information from: Minnesota Public Radio News, http://www.mpr.org