By Emily Ford
eford@salisburypost.com
SALISBURY — City Council members said they want more information about the city’s finances, including revenue and subscriber projections for Fibrant.
Although the city’s new high-speed Internet service has been operational for six months, the city does not have current revenue or subscriber projections or an updated business plan for Fibrant.
“I think, quite frankly, that we need some more information,” Councilman Paul Woodson said at Tuesday’s City Council meeting.
Mayor Pro Tem Maggie Blackwell last month suggested council members should receive regular financial reports, similar to town aldermen. On Tuesday, the council agreed to request financial reports on a quarterly basis, including information about Fibrant.
Blackwell said many residents ask her questions about the new broadband utility, which competes with private companies to provide Internet, cable TV and phone service.
“I have not felt informed to answer them,” Blackwell said.
The public wants to know if the city is on track with projected revenue and subscribers, she said.
Although the city in 2008 and 2009 made detailed projections about Fibrant’s future, those numbers are obsolete because the utility launched later than expected, John Sofley, the city’s finance director, has told the Post.
Sofley, who soon will be promoted to assistant city manager, said Tuesday he has been working on updated figures and should have them ready for the council in a week or two. He said Fibrant will be cash-flow positive by the end of 2014, the fourth year of operation.
The city issued $35.86 million in bonds in 2008, including $33.56 million for Fibrant. Including interest, the city will pay $60.6 million over 20 years to finance the construction and start-up of Fibrant.
With four reimbursements in the payment schedule, the city’s net debt service is $54 million.
Not a projection
In a column in Sunday’s Post, Mayor Susan Kluttz wrote, “With the current pace of sign-ups, we will be at 6,800 subscribers by the end of year four. Our current plan required 4,500 subscribers by year four to be successful.”
That was not a projection, Kluttz said Wednesday. She didn’t mean Fibrant would have 6,800 subscribers by 2014, she said, and “merely used (the number) to show how successful we have been so far with our new Fibrant customers.”
In six months, more than 850 people have subscribed to Fibrant.
“If we keep up that pace, it would result in 6,800 subscribers in four years,” Kluttz said. “That was the point I was trying to make.”
Kluttz said she used the calculation, which she discussed with city staffers, to show that Fibrant is ahead of schedule.
The city needs a current business plan for Fibrant, like any other business, Kluttz said. She said she expects staff to update it periodically. Asked if she was concerned that Fibrant has operated for six months without a current business plan, Kluttz said no.
“Our staff have been on top of Fibrant daily,” she said. “I have full confidence in everyone involved.”
No more $2.7 million surprises
Council members asked for other financial information from the city, which Sofley said he would provide.
As a banker, Councilman Brian Miller said he’s accustomed to seeing more information than has been provided to the council. He requested figures comparing the city’s budget to actual revenues and expenditures.
Miller said the council doesn’t want to micromanage city employees, whom he praised. But too many council decisions “are made without the proper context,” he said, using a new firetruck purchase as an example.
Woodson said he relies on monthly financial reports to run his small business and would like to see similar information from the city. The reports would help the council track trends, such as sales tax revenue, and stay abreast of important financial changes, he said.
Council members were taken by surprise in February when they learned at their annual retreat that the city would face a $2.7 million budget shortfall next year, Woodson said.
“A lot of citizens said, ‘Why didn’t you all know that was coming?’ ” he said.
Blackwell nodded in agreement.
Councilman William “Pete” Kennedy also said quarterly financial reports would be helpful.
Pendulum swing
Kluttz, who didn’t attend Tuesday’s meeting because she was in Raleigh advocating for Salisbury in the battle over city-owned broadband, said she feels staff already provide adequate information to the council. Whenever council members request more details, city employees are quick to respond, she said.
But Kluttz said she understands and respects Blackwell’s request.
In the past, City Manager David Treme and other staff provided so much information, council members actually asked for less, Kluttz said. With meetings running long and multiple reports presented every month, she said council members decided to streamline the agenda and ask for more information when they needed it.
Salisbury has an excellent financial staff with a finance director, budget manager and team of experienced accountants who monitor the city’s finances daily, Kluttz said. Past budgets and audits have received awards.
“Council members are not elected to be financial experts; we are elected as average citizens,” she said. “It’s our responsibility to set policy and direction, not to be micromanagers.”
However, if council members want more written information, it’s appropriate for staff to provide it, Kluttz said. Contact reporter Emily Ford at 704-797-4264.