SALISBURY — Fibrant, which broke even for the first time in September, continues to make a small profit, according to the city.
Now three years old, the high-speed broadband network generated $2,223,678 during the first six months of this fiscal year, from July through December, Assistant City Manager John Sofley told Salisbury City Council on Tuesday. During the same period, Fibrant’s expenses were $2,162,085, for a profit of about $61,600.
Fibrant lost $4.1 million during the previous fiscal year and has borrowed more than $7 million from the city’s water and sewer capital reserve fund since 2011, which Fibrant is paying back at 1 percent interest. The city expects the utility to break even this year without another internal loan.
Fibrant is the city’s largest ever one-time capital expense. The city borrowed $33 million over 20 years to build to fiber-to-the-home network that competes with private companies to sell Internet, phone and cable TV services to people who live within Salisbury city limits.
Fibrant added only 11 customers in November, going from 2,684 subscribers to 2,693 in December. But Sofley said the city expected the slowdown during the holidays and sign-ups have picked up again, with 31 new customers in January for a total of 2,724.
During the first half of the fiscal year, Fibrant added 245 customers, up from 2,479 customers in July.
Fibrant has a market share of about 21 percent, Sofley said.
He said Fibrant’s average revenue per user — an industry measure for the income Internet, phone and TV companies receive from each customer — continues to be higher than some competitors, meaning Fibrant customers take more services.
On average, Fibrant customers spend $129 a month, compared to $121 a month with Time Warner Cable and $110 with Verizon, Sofley said.
Growth in average revenue per user is likely to be more profitable than increasing the number of customers, according to Reuters. Selling additional services to existing customers costs less than wiring new subscribers.
Fibrant, which had been plagued with outages, continues to come close to the “five nines” reliability goal set by City Council, Sofley said, which means the network would be working 99.999 percent of the time.
Overall, Sofley said he was pleased with the city’s finances so far.
“It was a good quarter, and we’re pretty much exactly where we anticipated,” he said.
The mid-year financial report, which includes the first six months of the current fiscal year, will be posted on the city’s website at www.salisburync.gov, Sofley said.
Other highlights include:
• Because Rowan County commissioners had the airport removed from the Salisbury city limits, the city’s property tax values are down slightly from what was anticipated, Sofley said.
The city budgeted $2.79 million in property tax value but billed $2.66 million, he said.
• Sales tax revenue continues to grow slowly, Sofley said, “not fast or strong, but consistently moving forward.”
Each month, sales tax receipts have slightly exceeded expectations, he said. Mid-year, sales tax revenue totaled $1.34 million, compared to $1.31 million during the first six months of the previous fiscal year.
• Halfway through the fiscal year, general fund revenue has reached 57 percent of the $37.93 million budget. So far, the city has spent 47 percent of the general fund expenditures.
• Water and sewer revenues are on budget, with 53 percent of revenue received mid-year and 37 percent of expenses paid.
• The city’s public transit fund has received 38 percent of the $118,104 revenues budgeted, which Sofley said was on target. Transit fund expenses were 41 percent.
• The city’s new stormwater utility has billed 50 percent of the budgeted $1.18 million revenue. Stormwater has spent 40 percent of budgeted expenditures, and the current collection percentage is 93 percent.