MOORESVILLE – The MI-Connection Communications System board of directors and the town boards of Davidson and Mooresville will hold a special joint public meeting Monday night, Aug. 16, to review the system’s history and current status and planned community marketing efforts.
Residents and taxpayers are invited to attend the meeting, which begins at 6 p.m. at Mooresville Town Hall, 413 N. Main St., Mooresville.
The MI-Connection board requested the meeting to provide an update to the two boards. Officials also say they want to outline their plans for boosting community involvement, which they said would help spur MI-Connection’s growth. And they will preview MI-Connection’s new website, which is expected to be online within the next few weeks.
“We hope the citizens of Davidson and Mooresville will come to this unique conference so they can learn more about their community communications system – past present and future,” MI-Connection General Manager Alan Hall said in a press release.
Davidson and Mooresville bought the bankrupt Adelphia Communications cable system in north Mecklenburg and south Iredell in 2007. Altogether, they have borrowed $92.5 million to buy and upgrade the network. In the past two years, the upgrades have provided additional channels, faster internet connections, and allowed the introduction of local phone service.
The system has added phone and internet customers quickly in the past year, though TV subscribers have declined. Overall revenue growth has not met projections, and the heavy debt load is keeping the company from turning a profit. Local officials have held public meetings in the two towns to talk with citizens and provide facts about the system.
MI-Connection has about 15,200 customers in Davidson, Mooresville, Cornelius and surrounding areas.
More information about MI-Connection is at www.mi-connection.com
Mi-Connection will be 45+ days into their new budget year when the public meeting is held. In order to offset the losses they’ve suffered to date, it will require additional profits of $500,000 per month every month in the coming year. They have been discussing this new marketing focus for months now. Where are the results?
Expense reductions are a one-time event. It’s additional revenues that are going to be required to make the business pay its own way. Time Warner Cable continues to take away their most profitable businesses – i.e., apartment complexes, where the number of subscribers per unit of cable is greatest. Each month that passes without the promised gains in subscribers will result in yet another shortfall at year’s end that will be paid on the backs of property tax payers. The reserve funds are no more!
A new marketing plan for MI Connection cannot save the company from its fate as an also-ran and continuing financial drain on the citizens of Davidson. In order to clear the air and have any chance at garnering public support for MI Connection the town needs to:
A short list of causalities the cable system has produced thus far include: Curbside trash pickup is now a separate tax ($210 a year), loose leaf pick up has been discontinued, the Davidson police department has not hired for positions that were previously approved, 20 or so town employees have been let go, and Davidson’s traditional Fourth of July fireworks celebration has been eliminated.
A new marketing plan won’t fix what ails MI Connection.
Joe Hutchens, Davidson
[EDITOR’S NOTE: Thanks for the comment Joe. There’s no question that the cable system has hurt the town’s finances and forced big changes that wouldn’t have happened otherwise. The trash collection fee is certainly at the top of a healthy list of changes, as are the layoffs.
With my editor’s hat on, let me contribute a couple of points:
Although the town did lay off at least 19 people, it simultaneously created new positions that refocused town operations. It cost some long-time and beloved employees their jobs. But in the end, only 2 full-time equivalent positions were eliminated. New hiring included several part-time firefighters needed to maintain fire protection and keep residents’ fire insurance rates low.
The town manager and elected commissioners admitted at the public hearing on the 2010-11 budget in May that the system is a big drain. With many residents in attendance, they acknowledged that this year’s budget was built around a need to come up with the $2 million subsidy for MI-Connection.
Eliminating the July 4th fireworks certainly saved money and was, as you say, part of budget cutting to make up for lost revenues, not increasing expenses. And the reasons were not entirely budget related. The idea first surfaced in early 2008 – before the cable system troubles emerged. The issue was not finances, but crowd-control. Since our town was the only one in the area offering fireworks, it became a magnet for people from through the region. As we reported at the time, rather than eliminating the fireworks that year, the town tried issuing wristbands (free to residents, $5 for non-residents) as a way to limit crowds. In early 2009, the town decided to eliminate the fireworks entirely, with a goal of returning the town July 4th event to a more community-oriented event instead of a regional extravaganza. The savings was less than $20,000.
In January, TV coverage and some bloggers reacted in horror when the town announced $276,000 in budget cuts that included not filling two police department positions (actually 1 police officer and 1 records clerk). The cuts absolutely were, as you say, the result of the $180,000 subsidy (Davidson’s portion) requested by MI-Connection. To add a little bit of perspective: No police department positions were eliminated in this spring’s Town Hall restructuring. And as mentioned above, the fire department has expanded with the town’s need. Town officials tell us that public safety remains a priority. (One of the towns I grew up in – population 20,000 – survived with just one resident state trooper. But that’s another debate.)
I agree with you, Joe, that the town is in a pickle, and this story isn’t going away anytime soon. As an editor and reporter, it seems to me that the big story is not about the specifics, it’s about differences of philosophy, and that may be an unclimbable mountain. I know people disagree with our town commissioners and mayor when they argue that the debate should not be about looking back at a mistake, but about solving a problem, and the best way to do that. But there it is.
You are not alone in believing that marketing won’t work. Those in Town Hall and on the MI-Connection board believe it is the only way to avoid massive financial problems at the system. I won’t offer an opinion one way or the other (hey, I’m a reporter who gathers info to help people understand and form their own opinions about the issue). But from where I sit, again, it seems there’s a big philosophical disconnect between those who see this as an issue requiring an apology and those who see it as big headache in need of a solution.
As for apologies, there are probably many opinions about what form an apology should take. We’ve heard our officials admit that the system is a drain. Some have also said in public meetings that the town shouldn’t have bought it and if “we knew then what we know now … ” Some say the goal now is to get the system to a point where the towns can sell it. (See Mayor Woods’s January Town Message commentary, or his comments in my March 2010 radio feature on MI-Connection for WFAE-FM.)
Even one of our town’s appointed representatives to the MI-Connection board (appointed just last fall) says he opposed the town’s involvement in private enterprise. But, he says we’re stuck with it, and now we have to figure the way out.
The towns have looked at all their options, including refinancing or event selling immediately. (Tough choice: The towns owe more than it’s worth.) See Town Manager Leamon Brice’s February 2010 commentary on the situation, which outlines the choices.
The philosophical debate here is an important one. Citizens in both Mooresville and Davidson have made it clear that they are concerned about the situation or even still downright unhappy about it. Based on my ongoing reporting, I’d say the debate is keeping our officials’ feet to the fire. Would we want it any other way?
Thanks again Joe.
One last thing: For those following the numbers, I’m working on a report of preliminary year-end numbers at MI-Connection. Stay tuned. ]
I wonder if we are looking at this all wrong. If the portion of losses for which each town is responsible (Mooresville and Davidson) is based on the number of each town’s subscribers, Davidson needs fewwer subscribers not more. Thereby increasing the portion of losses for which Mooresville is responsible. Heck, each Davidson resident that cancels their MI service would be saving the town much more than they contribute as a subscriber.
David,
Thanks for your response to my note on the long continuing MI Connection mess. I guess where we part ways is I don’t see any disagreement here as a “difference in philosophy.” I don’t know what you mean by that. What I do see is a massively poor business decision funded on the backs of the good citizens of or town without their knowledge of the scope of the potential downfall, which has now become our reality. The town heard many dissenting voices early on and still carried the taxpayers off to slaughter. Expecting the citizenry to rally behind their new marketing plan is unrealistic and Pollyannaish. In a word, the citizens are pissed! I don’t envy them trying to sell their new marketing plan into that environment.
It has not escaped my attention that that the MI board now has members who opposed the decision to purchase the system. What you failed to note is the corollary to that is some of the rats have already abandoned ship. Frankly I will not be satisfied until everyone responsible for this decision is voted out of office or fired and then held accountable for their actions. If illegalities are discovered then prosecution should follow.
The act of placing our lovely town in a 15 year financial strait jacket and making the town of Davidson a laughing stock should not be dealt with lightly.
Joe
I don’t think an apology is in order here. We’re dealing with a business decision, not a war crime or a missile that went off course and struck a wedding party. Some decisions go well; others don’t. I don’t think there was any intent on the part of those who voted for or supported MI-Connection to put Davidson into a financial straitjacket. It probably goes without saying that all of them would take back this decision if they could.
What I do think is required of our elected officials is an acknowledgment and/or embrace of MI-Connection. I’m going to try to not single out officials by name, but I do note that some are not upfront about their vote on MI-Connection, or if not their vote than their support when the issue was being debated in 2007. One commissioner who ran for reelection in 2009 sent out a campaign letter listing (fairly) the many accomplishments they had brought to Davidson over the years. But, MI-Connection was not listed, even though they were on the board that unanimously approved MI-Connection in 2007, and even though MI-Connection is by far and away the most consequential decision that has been made by the board in recent years.
The only commissioner that I have heard stand up and admit to voting for MI-Connection and saying they would do it all over again is Cary Johnston, who stepped down from the board in 2007 and is not seeking elected office.
If our elected officials are running from their prior votes/support of MI-Connection, how can they ask us to run to support it? The elected officials need to put the financial integrity of the town of Davidson ahead of their political careers. No one should feel that their service is indispensable for the future of Davidson. Getting MI-Connection figured out is.
I am still concerned about the oversight of MI-Connection. We do not seem to have a body that provides rigorous, independent oversight to MI-Connection. Last Tuesday’s “update” from MI-Connection General Manager Alan Hall is a prime example of my concern.
The update was too brief, lasting maybe 4 minutes tops. Information was scant. Most of the update dealt with channel upgrades, all of which were done at no cost to subscribers. At one point, after saying that such and such an upgrade was being provided for free, Mr. Hall joked “do you notice a trend?”
The trend we all want to see is improving financial results, not continued giveaways by a company that we are subsidizing by $2 million this year. I think a logical question to have asked at the update would have been “why are you giving stuff away when 25 percent of our budget is going to subsidize you?” Maybe there is a good reason, but since no one on the dais asked, and the citizens in attendance were not given a chance to ask questions, we’ll never know.
The financial information was mixed, and Mr. Hall chose to focus on the portions of the income statement that could be made to look good, ignoring that year over year revenue growth was only 6 percent, which is troubling given that MI-Connection’s budget for the current fiscal year presumes growth of 20 percent, and ignoring that the bottom line for 2010 was worse than in 2009. Again, a reasonable question would have been “are you concerned that growth last year was well short of your 20 percent goal, and if you only grow 6 percent this year, what are the implications to our budget? How much more money will you need?”
I have to believe that someone somewhere is asking these questions, but it is troubling that again our elected officials are largely silent in public regarding MI-Connection. Ultimately we taxpayers are footing the bill, and there needs to be more on display to the public that gives us comfort that someone is up to the task of running this store.
I would ask that at the next public update of MI-Connection more in-depth information is presented, and that the public is given an opportunity to ask questions about this very significant investment of the public’s money.
Frank Molinek possesses impeccable logic.
To Rodney and others: I think the apology is the most crucial part of the success of this new marketing program. I believe the citizens of these communities would rally behind an honest and sincere admission of the gravity of this mistake. While it seems absurd to me to have our commissioners going door-to-door to peddle this product, it may be the only way, but I’d start the sales-pitch with: “Hi, my name is X town commissioner, and we’ve really messed this one up. The impact of our decision will certainly be higher taxes, diminished property value, and further charges for customary services, unless you accept our sincere apology and help us get this right.” In the face of humility, it is much harder to say no.