City council candidates weigh future of city’s fiber optic network

Published 12:15 am Sunday, August 30, 2015

Many of Salisbury’s 16 city council candidates say the city’s fiber optic network — Fibrant — could be key to the municipality’s growth in future years. Selling Fibrant seems to be equally popular, if the price is right.

Fibrant has a customer base of about 3,300 people in Salisbury’s city limits, according to Kent Winrich, who oversees the utility. The fiber optic network provides phone, Internet, TV, or a combination of the services. Internet packages for 50 megabit speed, faster than traditional companies, start at $45.

From its start, Fibrant was hailed as the key to Salisbury’s growth. In interviews with the Post, some Salisbury City Council candidates expressed concern about the more than $30 million spent to install Fibrant. Other concerns ranged from residents not having a voice in the process to Fibrant not living up to expectations.

Fibrant represents more than $32 million in outstanding debt owed by Salisbury, according to Salisbury’s current year budget. It’s projected to generate $6.8 million in revenue this fiscal year — July 1, 2015 to June 30, 2016. Expenses are also budgeted to be $6.8 million.

Despite financial concerns, most candidates said Fibrant will play some part in future growth.

A summary of interviews with all 16 Salisbury City Council candidates follows in alphabetical order. Questions asked concerned Fibrant’s finances, economic development possibilities associated with the utility and whether to sell it completely.

Karen Kirks Alexander (incumbent) – architect

Alexander says Fibrant is one of the most important tools Salisbury has in its economic development tool box. She is a Fibrant customer and says the service has been extremely reliable in recent years.

“It is unbelievably exciting what our broadband service has been able to achieve in only a short amount of time,” Alexander said.

Invoking the economic recession that followed 2008, Alexander said the fact that Fibrant is now reliable and still running is commendable.

She mentioned the possibility of partnering with UNC Charlotte’s College of Computing and Informatics to help lure businesses into Salisbury. The college has a business partners program that Alexander said would give Salisbury access to companies interested in Fibrant’s speeds.

Salisbury is now beginning to pay off the principal of its Fibrant debt, which Alexander said is a bright spot for the utility’s future. Transferring money out of the water and sewer capital fund was a smart decision, she said.

When asked whether she’d vote to sell Fibrant, Alexander said “you never say never.” If the purchase price was enough to pay off the entirety of the loan, Alexander said a sale may be worth considering.

Stephen Arthur – works for Food Lion and Romo’s Pizzeria

Arthur admitted he doesn’t know much about Fibrant and is researching it to learn more. He has been a Fibrant user.

He said Fibrant could help grow Salisbury’s economy if the city can increase its profitability.

Arthur proposes that Salisbury offer a promotional deal with developers to install Fibrant in buildings and housing developments. He said business and residential growth associated with Fibrant would go hand-in-hand. Only technology-focused businesses would place a significant value on Fibrant, he said. However, he also said Fibrant is one of the most important factors in Salisbury’s future economic development.

Arthur said he “doesn’t really have an opinion” on the current state of Fibrant’s finances. Arthur said he would vote to sell Fibrant if it was necessary, but would want the community to know about a potential sale.

Roy Bentley – software engineer

Bentley says Fibrant provides top-notch service to its customers, but the benefits aren’t immediately clear to outsiders and those unfamiliar with technology.

One of Bentley’s concerns is the nature of Fibrant’s marketing. The words used to describe Fibrant only make sense to those who are familiar with the terms, he said.

“Our marketing sucks,” Bentley said.

Fibrant was initially pitched as a cure for all of Salisbury’s problems, Bentley said. It hasn’t been as successful as city leaders initially claimed, he said. However, Bentley said it’s only one part of the overall economic development tool box.

Politically, he said it’s important for the city to pay back money to Salisbury’s water and sewer fund as quickly as possible. Repayment would restore trust in Salisbury city government, he said.

Bentley said he would consider selling Fibrant if revenues and its greater economic usefulness don’t make the utility worth keeping.

Maggie Blackwell (incumbent) – retired

Blackwell said Fibrant’s strategic advantage as a high-speed Internet source is quickly eroding.

Word-of-mouth advertising would help with residential expansion of Fibrant, she said. For Salisbury to lure future businesses to the area through Fibrant, Blackwell said, the city needs a national strategic marketing plan. The plan would focus on national trade journals and business journals across the nation, she said.

“What our city needs most is jobs, and I see Fibrant as a tool to attract jobs if we market it strategically,” she said. “The quality of life distinctly relies on jobs. People without jobs live in poverty and poverty sometimes leads to crime.”

When asked about the current state of Fibrant’s finances, Blackwell said the city is paying back its debt steadily.

Blackwell said she wouldn’t support selling Fibrant as it currently sits. The city wouldn’t be able to receive nearly the amount of money it needs to pay of Fibrant’s debt.

If the city could increase the customer base by adding businesses, it would provide a greater value and result in a higher sale price, she said. If Fibrant is healthy and viable, Blackwell said, she would vote to sell it.

Kenny Hardin – consultant and community activist

Hardin said Fibrant has been poorly managed and plagued by a lack of transparency.

“We can’t unwrite that check and can’t undo the loan, and that’s my biggest issue,” Hardin said. “All the secrecy and lack of transparency surrounding Fibrant needs to stop. The city needs to restore confidence about Fibrant to the voters.”

Hardin takes issue with the fact that voters weren’t able to decide whether or not Salisbury was able to invest in Fibrant. The city held a public hearing, but not a referendum.

“Moving forward, we need to do things differently and whatever we do should not be the decision of five city council members,” he said.

If Fibrant isn’t clearly a part of Salisbury’s economic development, Hardin said, the city should sell it. Hardin said it’s not too late for Salisbury to take advantage of Fibrant’s speed and low price point.

Hardin said not much can be done now about Fibrant’s current financial status, but city staff can greatly help by being more transparent about how money is spent.

Constance Partee Johnson – businesswoman

Johnson said she “love(s) that the city owns Fibrant.” She said it could be a significant part of the city’s development, but less fortunate Salisbury residents aren’t able to afford a Fibrant subscription.

“It’s a great resource that the city provides, but we also have to look at the digital divide associated with price,” Johnson said.

She said Fibrant should be offered for free to less fortunate residents through the Rowan County Department of Social Services. Giving all Salisbury residents basic Internet access would shrink achievement gaps between black and white students, she said. When prodded further, Johnson said she wasn’t proposing free residential Internet through Fibrant, but rather hotspots across Salisbury.

Johnson said she would be focused on improving residential subscriptions and small business subscriptions. She said Fibrant’s marketing efforts are going well compared to the competition.

She said examining Fibrant’s rate for services might be one way to improve the utility’s financial position.

A self-proclaimed “techie,” Johnson said council members who understand technology would be important in improving’s Fibrant’s financial standing.

Johnson said she doesn’t think selling Fibrant is a good idea, unless the city maintains a role in daily operations.

Rip Kersey – real estate agent and retired engineer

Kersey said Fibrant has turned out OK, but not nearly as successful as initially expected.

“I would have to say, and I believe most people would say, there are not many businesses that you can point to and say they are here and growing and thriving because of Fibrant,” Kersey said.

Kersey said Fibrant is mostly a tool to improve quality of life in Salisbury, not a driver of business activity. As an example, he said, Salisbury requires a water and sewer deposit for rented residential houses, but no deposit for Fibrant installation.

“It is basically an amenity to the people that live here,” he said.

Kersey said he believes Fibrant was intentionally financed in a way to prevent citizens from voting, but the utility seems to be fairly financially sound. He said Fibrant was a financial risk, but it turned out OK.

He noted that four years ago Fibrant was a significant part of discussion among city council candidates. Kersey said he hasn’t seen much discussion about the utility to date, which may suggest there aren’t as many concerns.

When asked about a potential sale, Kersey said he doesn’t know if anyone would be interested. If a situation arose, Kersey said, he wouldn’t be opposed to considering an offer.

Mark Lewis – banker

If elected, Lewis would be the only sitting council member who originally voted for Fibrant. Lewis served on the council as critical discussions were occurring about whether to create Fibrant. His time on the city council lasted from 2003 to 2009.

As a result of his legacy, Lewis said the utility would be among his top few priorities as a councilman.

Lewis said he is excited about Salisbury’s future with Fibrant. The utility is now running well, and Salisbury is part of a select few municipalities who have a fiber optic network, he said.

“One of the main reasons we got into this is that we realized large companies were going to come to a city of 32,000 people and start putting in something like Fibrant,” Lewis said. “We realized that if we wanted to compete and continue to expand our creative economy, Fibrant would have to be a part of the city’s future.”

Marketing Fibrant through RowanWorks Economic Development is an important way to grow the business community in Salisbury, Lewis said. He said Salisbury should focus on recruiting any business that requires large amounts of data.

Like most businesses, Lewis said, Fibrant shouldn’t have been expected to make money in its first year. Citing budget figures, Lewis said Fibrant is showing growth.

He said Salisbury’s transfer of money from the water and sewer capital fund is no different than a city saving up for fire trucks, police cars or a waste water treatment plant.

One of Lewis’ proposals is to create a committee of two council members to serve in a Fibrant oversight role.

Scott Maddox – retired teacher

Maddox served on Salisbury’s City Council several years before Fibrant was even a topic of discussion. He said Fibrant and other providers have broken up an Internet monopoly owned by Time Warner Cable.

But, for Fibrant to grow, Maddox said it has to be better than the competition. Reliability is another key factor.

“It has to offer things that the competition can’t offer, even if it’s a small service,” he said.

He said it may be a better option to focus on increasing Fibrant subscription rates in Salisbury instead of looking toward new businesses.

Maddox said the water and sewer fund transfer is odd, but may have been the best financial decision.

“I have to trust that they crunched the numbers and decided that was the way they needed to go,” Maddox said. “I don’t think it’s fair for anybody now to look back years later and say ‘we shouldn’t have done that.’ ”

When asked about selling Fibrant, Maddox said the city would essentially be selling the infrastructure. The customer base isn’t large enough to matter to a large company, he said.

“I’ve got a feeling we’re going to have to make it work,” he said.

Brian Miller (incumbent) – banker

Miller said Fibrant has taken time to become reliable, and the city is now ready to take marketing and recruiting efforts to the next level. He said Fibrant has mostly been focused on residential customers and it’s time to begin recruiting business.

“We’ve had to be measured about it,” Miller said. “We could be more glitzy about our marketing, but we had to find our footing before we can get to the next level. We are now ready to ramp up our efforts.”

Miller said the city doesn’t have to overcome a negative image of Fibrant’s brand when marketing it to firms outside of Salisbury. Partnering with RowanWorks Economic Development to market Fibrant would be key in attracting new business, Miller said.

When asked about finances, Miller said new, start-up companies take time to become financially and operationally sound.

“No company opens its doors on the first day and makes a profit, or, if they do, it’s extremely rare,” he said.

He said the recession following 2008 had a significant impact on Fibrant’s finances. Now, Salisbury is steadily repaying the money it borrowed, he said.

Todd Paris – attorney

Paris’ message is make it grow or make it go. A Fibrant customer, Paris touts tremendous potential for economic development related to the utility. He notes a low price point and fast speeds as positives when comparing Fibrant to other Internet providers.

“We can beat the doors off of these people and can absolutely rule this place,” Paris said. “We can beat the pants off of Charlotte. There should be a huge stampede of businesses, but it’s not happening.”

Paris said he hopes Salisbury’s downtown stores can be filled with information technology businesses. Filling the former Salisbury Mall with information technology businesses is another possibility, he said.

Marketing Fibrant on a regional and national level is a way to increase the number of businesses who know about potential speeds, Paris said.

“In Charlotte, nobody knows we exist,” he said. “Fibrant is the only thing that Rowan has that Davidson County doesn’t have.”

Paris said he questions Fibrant’s actual financial status. Some employees who work on Fibrant are placed in other departments. If all employees were in one department, Paris said, the financial pictures would look significantly different. He said the city didn’t do anything wrong by loaning Fibrant money from the water and sewer capital fund. He said the city may not have had any other choice.

If a qualified buyer could pay off all of Salisbury’s debt related to Fibrant, Paris said he would be willing to immediately sell.

William C. Peoples – retired

Peoples has a number of unanswered questions about Fibrant. Perhaps the most critical is whether Fibrant will ever make a profit.

“Fibrant is not a money-making utility and the important question is whether it will ever be,” Peoples said. “The only way I ever see Fibrant becoming a valuable utility is to outsource it to communities other than Salisbury.”

Peoples said Fibrant wouldn’t be a primary reason for businesses to move to Salisbury. For Fibrant to prosper, however, Peoples said businesses would be a needed revenue source.

Another question Peoples mentioned was whether Fibrant can be used in apartment complexes. The utility hasn’t been able to effectively wire apartments, Peoples said.

“It was only ever supposed to be for single-family homes,” he said.

He has called for an investigation into Fibrant’s finances. Peoples said he wonders whether financial wrongdoing related to Fibrant occurred under former city manager Doug Paris.

If elected, Peoples said making Fibrant clearly profitable would be one of his priorities.

David Post – attorney and entrepreneur 

One of Post’s proposals is to give free Fibrant to all residents and businesses in downtown Salisbury’s municipal service district.

Giving free access to Fibrant would help fill empty downtown storefronts and attract new businesses to town, Post said.

“We want to attract people to work downtown and live downtown,” Post said. “Well, technology and Internet have got to be an important piece of that puzzle because it’s an important piece of people’s lives.”

He said businesses don’t consider moving to any location without first considering whether water, sewer and electricity are available. Today, Internet is a piece of that equation, Post said.

Post said transparency would go a long way in easing Salisbury residents’ concerns about Fibrant’s finances. He said Salisbury now has to work with the financial hand it was dealt.

“If they have a bad year, they ought to just tell us,” he said.

Post said he didn’t have an issue with Salisbury using part of its water and sewer capital fund to help pay for Fibrant.

He said price isn’t the only consideration when deciding whether to sell Fibrant. If the Salisbury City Council is considering a sale, it’s also important to consider how it might affect customers.

Troy Russell – pastor and teacher at Livingstone College

Russell said his primary experiences with Fibrant have been through acquaintances, who say it works “wonderfully.” Russell said high-speed Internet, such as Fibrant, will need to play a significant role in Salisbury’s future economic development.

“It is something we will have to have if you want to attract businesses that will come and stay,” Russell said. “It’s a necessity.”

He said partnering with Salisbury’s four higher education institutions — Livingstone, Catawba, Rowan-Cabarrus Community College and Hood Theological Seminary — to provide high-speed Internet would boost the quality of education.

Called “cord-cutters,” an increasing number of Americans are choosing not to subscribe to a TV package, Russell said. As a result, he said, Fibrant and city officials would be better served by focusing on the future of Internet for residents. The city should also first focus on helping existing businesses already in Salisbury when considering Fibrant’s future, he said.

He said the city could do a better job of marketing Fibrant.

Russell said he doesn’t know much about Fibrant’s financial history or current state.

It would be a better option to see Fibrant grow than sell it, he said.

Tamara Sheffield – account manager for Frito Lay

Sheffield compared Fibrant to any other utility, saying it’s necessary for Salisbury to grow.

When towns began to get running water and electricity, society benefited. Fibrant is no different, she said.

“We just have to figure out the best way to do it,” Sheffield said about using Fibrant as an economic development tool.

Presently, Sheffield said Fibrant is just another piece of the puzzle to attract businesses. If Salisbury had a more educated workforce, it could be the most important part of luring businesses to Salisbury.

She cited effective marketing as an important part of Fibrant’s future growth.

Even though Salisbury may be paying back its debt, Sheffield said, the large outstanding amount worries people.

When asked whether she would vote to sell Fibrant, Sheffield questioned if anyone would even be interested.

Jeff Watkins – cigar shop manager and funeral home executive director 

Watkins said Fibrant’s focus should be on recruiting businesses rather than residents. He said the utility should promote companies once they locate to Salisbury.

He said Fibrant should have the first opportunity to provide Internet service for future developments inside of the city limits. Watkins also proposed giving companies who use Fibrant free advertising time.

“It’s Salisbury’s baby and we should market it any way we can,” he said.

Watkins said he hasn’t heard any significant negatives about Fibrant other than the amount of money spent on the initial installation. When asked about the state of Fibrant’s finances, Watkins said, “I’ll take the fifth on that one.”

Watkins said he would support the sale of Fibrant.

Contact reporter Josh Bergeron at 704-797-4246.