SALISBURY, NC (WBTV) - On Tuesday night the Salisbury City Council took action that moves one step closer to taking the strain and debt of operating Fibrant off of the back and budget of the city.
During its regularly scheduled meeting, council unanimously approved the lease of Fibrant to Hotwire Communications. Now it will be up to citizens to vote on the deal.
During a discussion period prior to the vote, Mayor Pro Tem David Post mentioned hearing from City Manager Lane Bailey during the recent planning retreat that the cost to the city would drop from $3.3 million a year to $1.7 million a year under the terms of the lease.
Post pointed out that the city would likely save $20 million over a ten year period.
Current Fibrant employees would either get jobs with Hotwire, or be found employment elsewhere with the city, according to Bailey. If that doesn't work out, those workers would be offered a compensation package.
A city referendum on May 8 will allow voters to show support or opposition to the lease.
City officials expect, however, that the final lease proposal will include the following terms:
· Hotwire would lease the entire Fibrant system from the City for an initial term of 20 years, with an option to extend for an additional 20 years
· Hotwire would pay rent to the City based on a percentage of gross revenues received by Hotwire in providing cable television, internet, and other communication services
· Hotwire would be responsible for all operating expenses, including maintenance expenses and for making necessary capital improvements
· Hotwire would offer communication services for prices and on terms and conditions that are competitive in the Salisbury community
The lease proposal would also be subject to a successful refinancing of the City's current tax-exempt debt financing into a taxable debt facility and to certain other conditions, according to the city.
The city has been in negotiations with Hotwire since spring 2017, following the issuance of a Request for Proposals (RFP) with respect to the management or ownership of the Fibrant network.
The city noted in this RFP its expectation that a commercial provider would be able to continue providing communication services to residential and commercial subscribers in the Fibrant service area and, through expertise and scale economies, reduce the city's ongoing debt service costs.