MI-Connection: Looking forward

Recent comments here have raised some key points and questions in the ongoing MI-Connection saga.

We can always look behind us and chastise our elected officials for their decision to purchase the system, despite the public outcry. But that’s a score that can be settled in the voting booth. Even then, we’re left with a cable system. As one commenter (Aug. 31 at 6:41 p.m.) very plainly stated it: “Let's suppose we vote everyone out? Great! Your mission will be accomplished. Then what? Anybody have a buyer just waiting to bail us out? If so, let's bring them forward and talk to MI-C or whomever. The fact of the matter is right now we are stuck with this system until we can sell it….”

Another comment (Aug. 30 at 8 p.m.) added: “Regardless of what anyone thinks of this deal and whether or not it should have been approved, the fact of the matter is, we own the system … What's done is done and you can use the election to voice any of your displeasure with the people who voted for the deal.”

That commenter goes on to rally folks to support MI-Connection, lest our taxes are raised to pay for the system.

While town officials from both Mooresville and Davidson are assuring us that raising taxes isn’t in their “plan,” they’re also pointing out that the success of the system depends on us, the residents and prospective MI-Connection customers. In a Sept. 1 DavidsonNews.net article, David Boraks quoted Davidson Mayor John Woods, saying: “To those negative voices in the world, I say the future is in your hands. Use the system and it will be successful.”

But some of you aren’t buying that. “So to be clear Mr. Mayor,” one person wrote (Sept. 1, 8:22 p.m.): “Whether or not you raise our taxes depends on if we ‘embrace’ the system. So our ‘embracing’ of the system is not unlike paying the mob protection money. Pay up, and no one gets hurt.”

I think it’s smart for us to be wary of Woods’ argument. Why? Because we’re also being told that for MI-Connection to be profitable, residential subscribers aren’t going to be enough – instead, the system must be upgraded to be able to serve more lucrative commercial accounts. Last year, we were told that $12.5 million would be sufficient for that. A year later, however, we’re being told that the $12.5 million was, oh, maybe $19 million short.

As one recent post (Aug. 31 at 1:22 p.m.) stated: “All the upgrades have been for RESIDENTS who didn't want this thing in the first place. Now they need BUSINESSES to MAYBE make it profitable. But oops they ran out of money before they made it possible to service the businesses.”

Added another post (Aug. 31 at 2:29 p.m.): “There is a misconception that we just need a little more business so this thing will break even. Wrong! Even if the top line were to double, MI-C would still lose money (just check out their budget and do the math). There aren't enough households in Mooresville and Davidson to make this thing profitable.”

So, which is it? Will the system be successful if, as Woods stated, we simply use it? Or are we actually being asked not only to subscribe to the system, but also to support another multi-million-dollar infusion into its capital budget (guaranteeing it with, yes, our tax dollars) to make MI-Connection profitable?

That’s the $19 million question raised by a comment at 7:47 a.m. this morning:

“I have been (supporting MI-Connection) and in case you haven't noticed, we have had our rates increased at least twice since they have taken over. How many more increases are there going to be? And if they still go under...how much more (are) we going to pay? Seems we will be paying two fold for supporting them when we didn't even want them.”

One problem is that we might not ever see the full picture. Town officials are scrambling to figure out ways to keep confidential information about MI-Connection that could be competitively damaging. But they have a dilemma, because in doing so, they would also be keeping from the public a lot of information about a system that we own. That’s a legal no-no. And as any honest government official in Mooresville (no jokes here, please - ha) would tell you with certainty, that hasn’t traditionally sat well with Mooresville citizens.

Is it a sticky predicament for the government? You bet. And we could all shake our fingers and say “we told you so.” But, again, we’ll still own the cable system.

I am not suggesting that our government will hear our suggestions or solutions. But an open, constructive debate has never hurt anyone.

Here are some questions that'll hopefully get one started:

Do you subscribe to MI-Connection? What do you think of the service and price? If you do not use MI-Connection, which service do you use? Did you switch to a different service provider after the towns purchased and launched MI-Connection? Why?

If you do not subscribe to MI-Connection, are you considering switching in an effort to financially support the system? Do you buy into the notion that residential support of MI-Connection will be enough to keep the system afloat or, better yet, make it profitable? Do you believe that, without extra money from the towns, MI-Connection will go belly-up?

For those of you who do not subscribe to MI-Connection out of principle (because you disagree with government involving itself in private business, or you disagree with the government controlling media): What’s worse – compromising your principles, or paying higher taxes for a system with which you never agreed?

Should we just call it quits with the system and sell it, even in a bad market? Would you support that option even if the system sold for half the price we paid for it, and then tax increases would have to make up the difference? Should we invest additional millions for capital improvements then sell the system? What are the risks, and do you consider them worth it?

Should we simply trust the government and throw our support behind the system? Or, do you have a hard time supporting a system with ever-changing projections that have already cost millions … and are “projected” to cost millions more?

One commenter (Aug. 31 at 11:06 a.m.) listed several stipulations that s/he would have before switching to MI-Connection. Among them: the Town of Davidson passes an ordinance “prohibiting it from ever again borrowing more than $2 million without a vote of the citizens.” Thoughts?

Do you believe we should seek investors for a public-private ownership arrangement of the cable system? What are the pros and cons?

DavidsonNews.net: "A loss for 2009, but signs of growth at MI-Connection"

Thanks to a neighboring news website to our south, DavidsonNews.net, we have a first glimpse into yesterday's MI-Connection meetings. Be sure to check out David Boraks' article. It's linked in MI-Connection News Around Town (above), and also here:

http://davidsonnews.net/2009/09/01/a-loss-for-2009-but-signs-of-growth-at-mi-connection/

Of particular interest to me, at least, were the last few paragraphs of the article. I'll reprint them here for your convenience:

AUDIT AND HURDLES AHEAD

The figures released Monday are still preliminary; an audit won’t begin
until Sept. 14.

Meanwhile, hurdles remain. System officials say they likely will need more
money in the future to continue growing.

“Based on what we know today and based on the obligations of MI-Connection
and our indebtedness, and based on a model that we think we can achieve … it is
a potential that the towns might need to invest more in the future,” Ms. Bright
said.

“It might be 19 (million dollars), it could be 7 (million) it could be 10
million,” she said. If growth picks up, the number would be higher.

The system expects to cover a shortfall this year (2009-10) with reserves,
but it’s unclear what happens a year from now in the 2010-11 fiscal year. That’s
when the towns will have to begin making principal payments on their initial $80
million bond issue, which paid for the system and initial work on the
upgrade.

“That’s really when there comes issues of the maybe the towns’ needing to
step up and help with capital, and that capital might be only the capital needed
to extend infrastructure to an enterprise customers or hook up more residential
customers,” Ms. Bright said.

TAXPAYER CONCERNS
Some critics of the system worry future capital infusions could come out of
taxpayers’ pockets. But officials from both Davidson and Mooresville said Monday
they don’t envision paying for growth or making up shortfalls with property
taxes.

“It’s not in our plan,” said Maia Setzer, Mooresville’s director of
administration and finance.

Added Davidson Town Manager Leamon Brice: “I don’t see it in our plan. That
really is speculation. … Now that we have the best system available, we
anticipate being able make (our) numbers. We now have a very good system that we
need to market and people need to support.”

Davidson Mayor John Woods also said a cable-related tax increase is
unlikely, and he said citizens can help make sure that doesn’t happen.

“It has never been our intent to support this system with taxpayer funds.
The 2010 budget has been approved and there is no need for taxpayer assistance.
The future depends on our citizens and businesses embracing the system, taking
advantage of its offerings,” Mayor Woods said.

“I hope we can celebrate a locally-owned effort that contributes to this
community. To those negative voices in the world, I say the future is in your
hands. Use the system and it will be successful,” the mayor said.

Press Release: MI-Connection launches search for new general manager, enters new customer growth phase

(Click on the documents to enlarge:)