Asking for exemption

County officials are taking a closer look at a prospective broadband project.

Jay County Council and Jay County Commissioner Chad Aker learned more Wednesday about Mainstream Fiber Networks’ proposal to establish an infrastructure development zone along with its 395-mile broadband internet project in Jay County.

Mainstream Fiber Networks proposed outfitting the county with fiberoptic internet earlier this year. County officials committed $3.9 million toward the nearly $20 million project, which is in the midst of seeking additional grant funding. (Approximately $6 million is covered by a partnership between Mainstream Fiber Networks and private equity company Searchlight Capital, with the other $9.5 million to be targeted via grants.)

Along with the project, Mainstream Fiber Networks has requested the county create an infrastructure development zone. Such zones can be created in areas that are determined to not have adequate infrastructure available and allow for tax exemptions to be granted in order to increase the availability of broadband service.

That would include Mainstream Fiber Networks’ proposed infrastructure and any improvements made to it in the future.

County attorney Wes Schemenaur asked Jason Semler of financial consulting firm Baker Tilly to look into the impact an infrastructure development zone would have on Jay County’s taxes.

“That obviously is going to have a financial impact to the county,” said Schemenaur. “Before we say yes, I think it would be a good idea to know what we might be giving up if we were to agree to pass an ordinance like that.”

Semler explained investments into the county, such as fiberoptic internet infrastructure, add assessed value to the tax base and subsequently reduce tax rates.

“That’s really where the benefit comes in,” he said.

Semler said he’s aware of infrastructure development zones but said he’s not sure he’s seen them utilized.

“Because it is, you know, a pretty generous incentive,” he said. “You have to evaluate whether, is that incentive that you need to provide for them to make that investment here?”

Semler suggested as an alternative, the county could propose creating a tax increment financing (TIF) area for the places where the fiberoptic equipment is installed.

Schemenaur noted the decision on whether to establish the zone lies with commissioners but felt as though council should also be aware of the legislation because of its financial impact.

Aker noted Mainstream Fiber Networks had cited similar fiber projects completed in other Indiana counties. He wondered if those counties had been proposed the same tax exemption.

Council member Faron Parr and Aker both noted they didn’t believe it would be a good idea to establish the zone and thereby grant the tax exemption. Aker noted he would like to get other council members’ input on the decision as well. 

Schemenaur noted the quick turnaround with the grant process — Mainstream Fiber Networks is applying to Indiana Next Level Connections Broadband Grant Program and the Broadband Equity, Access and Deployment program — and said the company has asked for a decision by the end of April.

Also Wednesday, Semler explained the county could create another TIF district encompassing three proposed solar farms in Richland Township. If the county would like to take that step, he advised creating a district before the companies begin construction.

Parr, who has served on Jay County Redevelopment Commission for years, noted the value in establishing a TIF district. 

“It’s a nice problem to have when you’re trying to decide what the spend the money on, but it’s not a very good problem to have when you need to spend the money that you don’t have,” he said. “The TIFs, what we’ve had so far … have been a nice benefit to fill in those gaps.”