Tuesday, September 19, 2017

Mi-Connection FY2017 numbers disappoint...subsidy needed until FY2024

Numbers were put out by the Town of Davidson in a press release last week on the municipally owned cable company's financial performance for FY2017.  That was followed up by a presentation from Town Manager Jamie Justice at the Tuesday Board meeting.

The long and the short of it boils down to these bullet points.

  • The company is still losing money and did not meet projected growth in FY2017.
  • Subsidies will still be needed for years to come with FY2024 as the new subsidy-free target date.
  • Competition is increasing with new players entering the municipally owned company's footprint making growth even more difficult.
  • Davidson has little to no leverage in determining the company's future under the current inter-local agreement with Mooresville which pegs Davidson's ownership at 30%.
  • All of the numbers are projections based on continued rapid growth in rooftops and businesses.
Here is the press release put out by the town.  Emphasis added in bold.

DAVIDSON, N.C. – On Thursday, August 23, the MI-Connection Board of Directors met to review financial results for FY 2017, which ended June 30, and compare last quarter to the same quarter a year ago. Data has been externally audited, but are preliminary and still subject to external audit.

Quarter Comparison
Revenue is even when comparing Q4 2017 to Q4 2016 and total expenses are up by 3.02% in Q4 2017 compared to Q4 2016. EBIDA (Earnings before interest, depreciation and amortization, a key metric used by cable operators to measure performance) decreased by 7.64% from Q4 FY 2016 to Q4 FY 2017. Average revenue per customer is even.

“We didn’t meet our growth projections for this year, and recognize that we have had some tough competition in the marketplace,” said MI-Connection CEO David Auger. “We are confident that the services we offer and our superior customer will make us more competitive in the future.”

FY 2017 vs. FY 2016
Financially, year-over-year, FY 2017 revenue exceeded FY 2016 by 1.79%.  EBIDA declined by 8.61% from FY 2016 to FY 2017. Average revenue per customer is up 1.88% from FY 2016 to FY 2017. The customer level stayed about the same year-over-year.

In the enterprise and small/medium business market in FY 2017, MI-Connection grew commercial customers by 10.9% and increased revenue by 10.2%.  Commercial revenue as a percentage of overall revenue increased from 12% in FY 2016 to 13.7% in FY 2017.

MI-Connection made a contribution of $2.919 million in debt payment to the Town of Mooresville for FY 2017, and projected a payment of $3.45 million in the FY 2018 budget. The amount the Towns of Mooresville and Davidson made to the debt payment for FY 2017 was $3.44 million and the projected payment for the towns in FY 2018 is $2.93 million. MI-Connection’s contribution toward the debt is projected to exceed the towns’ contributions in FY 2018.

During his comments at the meeting Tuesday night, Justice did address the stall in the drop of the annual subsidy required by the towns for 2017.  aShortChronicle pointed that out back in May.  The explanation given by Justice was that there were some new developments scheduled to come on line that were delayed.  That delayed the new revenue.  Those developments are now coming online so 2018 should see a bump.

What's left unsaid here is that Mi-Connection future growth is essentially now wholly dependent on significant growth in rooftops and or businesses within its footprint.  The operational and financial improvements over the past few years are now fully baked into the year over year performance expectations.  There are no more big chunks of cost savings that can be wrung out of the financials.

Justice mentioned that RGUs or Revenue Generating Units actually dropped very slightly year over year in 2017.  RGUs are individual services such as voice, data, and video.  A single "triple play" household would count as 3 RGUs.  If RGUs dropped and there certainly was some growth in rooftops/businesses in 2017, that logically means Mi-Connection lost some existing customers to other provider and got some new ones to nearly break-even, but the company didn't get the new ones it was expecting from the delayed developments Justice mentioned to show any growth.  As competition increases and other providers build out their networks this industry "churn" among competing providers will only increase as well.

The current predictions in Justice's presentation say subsidies are needed through FY2023 - another 5 years.  It also says, the company's debt to value trend likely makes the company saleable 2-4 years from now with another 5-6 years needed to get that ratio down to where the towns could recoup all the subsidies they had paid over the years. However, competition will only increase in coming years, and if the housing market or economy slows or stalls, then all these projections go out the window.  In a high-tech industry such as telecommunications, keeping Mi-Connection for another decade just to attempt getting towns' their money back would be a high risk maneuver.

While Justice tried valiantly to put as good a face as possible on this situation, it's still an ugly situation the towns have in front of them.

Read the whole presentation here.

Monday, September 18, 2017

Save Davidson movement subjected to campaign "silly season" attacks

The Save Davidson group has been making quite a stir and getting a LOT of attention around town recently.

The group has been working hard to spotlight a growing number of issues.  It has been organizing.  It has been researching.  It has been pushing back on Town Hall supported initiatives across the board, and the green Save Davidson signs have been popping up all across town like mushrooms after a cleansing thunderstorm.  On Thursday evening the organization proved itself on the political scene by hosting what was undeniably the best and most well organized political forum this town has seen in years, possibly ever.

All that...no doubt, makes some people nervous - people who want to keep things running business as usual.  In fact Save Davidson has gotten enough attention that standard dirty political tactics are now apparently being used against it - the anonymous editorial pen and the whisper campaign.

In last week's edition of the Lake Norman Citizen, some anonymous member of the "staff" penned a hit piece against the Save Davidson organization for raising legitimate safety concerns about placing a hotel next to an elementary school on Davidson's Griffith street - concerns the Town and developer have yet to even acknowledge.  By attacking Save Davidson in this piece, the courageously anonymous "staff" at the Lake Norman Citizen effectively mock parents concerned about their children's safety.  They minimize and deflect and say raising safety concerns about potentially serious issues is only playing politics. All the while, they are hypocritically playing the game they erroneously accuse Save Davidson of playing.

That's a pretty classless and sad move for a paper that calls itself "the only experienced, professional, legitimate news outlet in the Lake Norman Region"   (Yes, they really wrote that about themselves.)  However, while classless and sad it's not all that surprising.  In recent years, the Lake Norman Citizen has become the publication of choice for the Davidson Town Hall message.  Push back too hard on the Davidson Town Hall agenda and it's a safe bet you'll find a story emphasizing the Davidson Town Hall perspective in the next edition of the Citizen.  With election season underway and Davidson Town Hall under pressure, seeing some political water carrying by this group of "professionals" at the Citizen is just par for the course.

However, the "anonymous pen" is not the only political trick being deployed against Save Davidson.  A dirty "whisper campaign" is apparently also underway.

On two separate occasions in recent days aShortChronicle has been told of incidents around town where people are saying Save Davidson is against diversity or doesn't want diversity in town.

What's the apparent rationale for such a ludicrous claim?

The warped logic goes something like this.  Because Save Davidson has spoken out against the rampant development underway in town, a good portion of which is apartments, the group must be against diversity because apartments are more affordable.

The people spreading these divisive rumors clearly haven't seen the Save Davidson signs dotting the West Side neighborhood which has a considerable amount of  the town's affordable housing.  The historically African American neighborhood also claims a large percentage of the town's racial diversity.  The rumor mongers clearly haven't seen the numbers of West Side residents at recent public meetings sporting their Save Davidson pins.  Those spreading this misinformation clearly don't know or want to believe, that Save Davidson is naturally aligned with any and all groups who feel like they have been mistreated by Davidson Town Hall.

aShortChronicle reached out to Ms Evelyn Carr and Ms Daisy Raeford, two West Side community leaders who both happen to have Save Davidson signs in their yards to get their take on this whisper campaign.

Ms Carr is a lady full of history.  Talking with her is like getting the opportunity to go back in time and actually feel what Davidson was like over the course of decades past.  There are stories about people who helped the West Side community over the years as well as stories that are uncomfortable to hear.  When asked if she had heard the rumors directed at the Save Davidson group, Ms Carr acknowledged that she had, but when asked if she believed them, she quickly responded "No.  No, I don't."   When asked what she thought of the group she said, "They are trying to save Davidson."  She followed up by saying "I am going to stick with those people over on Delburg" giving a nod to the area just down the street from her house where Save Davidson got it's start.

Ms Raeford, another pillar of the West Side community, is also a walking history book about the town.  aShortChronicle has had the opportunity to speak with her several times over the years.  She had not heard the smear that Save Davidson was somehow against diversity or affordability, but she did have this to say about the group.  "We see what they are doing.  They're doing the right thing for everyone in Davidson."   As if to drive that point home, she added with another nod to the group's roots "These people over on Delburg are working!"

Yes, Save Davidson is working and working hard to effect positive, community oriented change.  Unfortunately, dealing with this kind of behaviour designed to keep the status quo in place is also part of that journey during the political season.

Sunday, September 17, 2017

Just in time for election season...NewsOfDavidson.org launches

Two years ago when DavidsonNews.net shut down, there was an instant void in the hyper-local news scene for this town.  While aShortChronicle believes
one of the media's primary missions is to be the watchdog on government, that often doesn't seem to really work in the reality of local news.  The relationship between media and government is often pretty cozy, too cozy.

As an example of that coziness, when DavidsonNews.net ceased operations, those closest to Davidson Town Hall jumped to its aid.  The publication said its farewells on May 29, 2015.  On June 3nd, the below piece was posted to the site prior to it going dark.


Those are some big names around Davidson including the current Mayor (John Woods), a former Mayor (Randall Kincaid), and a former Commissioner (Carrie Johnston).  Jane Campbell wasn't a household political name around town at the time, but she is now - having run an unsuccessful campaign for a seat in the legislature in 2016 and now running for Davidson Town Board this year.

aShortChronicle told readers way back in July about the upcoming launch of the NewsOfDavidson.org site and Campbell's relationship to it.  Hers is the name on the paperwork for the web address and the non-profit backing the group.  At this point there is no indication the 2015 effort is the same as the current one, but it is interesting that Campbell's name shows up in both.

Regardless, the NewsOfDavidson.org site went live Friday morning, the day after the Save Davidson Mayoral forum.


The "Founding Donor" list for the operation found here  reads like a who's who of Davidson, so there is clearly support for the endeavor.   Interestingly however, it also includes groups in the Town Hall orbit such as the Davidson Housing Coalition, Davidson Learns, and the Davidson Lands Conservancy.  That list of connections among other names on the donor list makes it challenging to believe this new news operation will really shine the spotlight on Town Hall if needed.  Only time will tell on that, but as a hint of what we may expect check out this article from the new site.  It is on the list of local political forums this election season.

The first forum was done by Save Davidson just the night before.  It was an impressive event.  The NoD article the next day doesn't mention Save Davidson at all, and for that matter doesn't mention who is conducting any of the forums over the remainder of the election season.  The picture of the Mayoral candidates from the Save Davidson event also doesn't show any Save Davidson signs or banners which were prevalent.  Why?


When a news organization has as many connections to the local government as this one does right out of the gate, that question of "why" is going to need to be asked a lot on stories about Town Hall.

Don't worry though, aShortChronicle will always ask them.

Saturday, September 16, 2017

Delay in West Branch detour

aShortChronicle previously reported about the 3-month detour as the West Branch neighborhood development rebuilds Robert Walker Drive between Davidson-Concord Rd and the Baily Springs neighborhood.

That detour was supposed to start this coming Monday, but has now been pushed back a week to September 25th.

Christina Shaul with the Town also wanted to pass along this additional information about the detour as it relates to pedestrian use.

"The developer is planning to build a temporary access point on the southern corner to allow pedestrians to get to the sidewalk they just built.  It will be built out of gravel until they complete the bypass storm pipe and road, then they can install the permanent concrete."

So, greenway users in River Run, Bradford, and elsewhere to the east get a bit of a reprieve this fall before having to use the "Big Sidewalk" along Davidson-Concord Rd.

Davidson Coffee Chat Monday...issues galore to discuss...

With so many things going on in town...Potts Street development, Beaty Street RFP, Griffith Street Hotel, Bonds and New Town Hall spending, Citizens should take every advantage of these coffee chats.


DAVIDSON, N.C. – The Town of Davidson Board of Commissioners invites all citizens to attend a Davidson Coffee Chat on Monday, September 18 from 9:00 to 10:00 a.m. at Davidson Town Hall, located at 216 South Main Street.  For the first 30 minutes, Charlotte-Mecklenburg Schools North Learning Community Superintendent Matt Hayes will discuss the proposed CMS bonds and Finance Director Pieter Swart will provide information about the Davidson general obligation bonds.  These bond referenda will be on the November 7, 2017 ballot.  The second half of the hour will be a Q&A period on all topics.

These coffee chats are informal meetings and are typically held the third Monday of the month to update citizens on issues and projects in the Town of Davidson.
Commissioners will provide citizens with coffee and tea.

We encourage all citizens to attend.  For more information, please contact Town Clerk Carmen Clemsic at cclemsic@townofdavidson.org or 704-940-9614.

Tuesday, September 12, 2017

UPDATED: Exit 30 Hotel - The players...

The Exit 30 Hyatt Place Hotel project is controversial due to its location near schools and in an already congested area as well as being adjacent to a vulnerable neighborhood.  It also includes a web of players and associated individuals that reads like a who's who of Davidson development both past and present.  The paths of these individuals cross whether it be in business, in ideology, in Town Hall, or in just being neighbors in a small town.  That is probably to be expected in a town the size of Davidson.  However, when people along every step of the process have this many interactions it can lead to a degree of group think, and that can lead to flawed decisions.

Here is the roster...

The Developer - Beacon IMG group led by Nish Patel is a hospitality development firm whose portfolio includes the Homewood Suites in Davidson.

The Land Owner - The land for the project is owned by an entity named Davidson Common East Condominium Associates LLC.  This LLC names R Martin Kerr of Davidson as manager.

The Former Land Owner - The current LLC bought the land from an Five Six Five LLC in 2008 for $1.65m.  See here and here.  Five Six Five LLC lists Ed Harris as its manager.  This LLC still owns the land on which the Community School of Davidson K-7 building sits just across Davidson Gateway Drive.

The Attorney - Local Davidson real-estate attorney Susan Irvin has been involved in multiple transactions around this property.  See here and here.  She is also representing the Hotel project team in its interactions with the town.

The Former Banker - People's Bank is the bank listed in deed related documents for this property.  People's is Mayor John Woods's former employer.  When the Woodies project went through in 2013.  Woods signed off on the sale for Peoples.  See here on page 3.

The Architect - Dave Malushizky of the RBA Group is listed as the architect on the project.  Malushizky is formerly of the Lawrence Group.  The Davidson office of Lawrence Group has closed, but that office had long-standing ties to Town Hall.  See here for that background.

The Consultant - Craig Lewis of Stantec.  Lewis was contacted for the traffic study required for the project.  Lewis is also a former Lawrence Group alum.  See here for more on that.

The Town Attorney - Town Attorney Cindy Reid wrote a legal opinion favorable for this project.  See here for that.

The Former Town Attorney - Public records show Former Town Attorney Rick Kline was at least consulted on the opinion produced by Reid.  Also, per a public records request Kline has recently been involved in a separate deal with the same land owner.

The Land Planner - While not involved in the hotel project directly, Commissioner Brian Jenest's land planning firm has been involved in earlier proposed projects to develop this land.  See here.  Commissioner Jenest's firm also worked on the Homewood Suites when it was built.  See here.   Commissioner Jenest's firm and Susan Irvin mentioned above are often seen working on the same projects around Davidson, Potts Street and Davidson Depot to name a couple.  They have also worked together on a similarly controversial hotel plan in Cornelius.  See here for that.

Monday, September 11, 2017

More impacts from West Branch development ...section of Robert Walker Drive to close for 3 months

Last week, aShortChronicle told readers about the new roads going in at the West Branch develoment and the "March of the Dump Trucks" underway.  Monday AM the Town of Davidson posted the below regarding why the particular section of road being completed is being done first.

Starting Monday, September 18 (weather-permitting), Robert Walker Drive between the intersection of Davidson-Concord Road and the greenway crossing (just before entering into the Bailey Springs neighborhood) will be closed to vehicular and pedestrian traffic for three months, as part of the WestBranch development construction process.
During this time, vehicular traffic will be routed onto WestBranch Parkway (a new road created by the developer) – please see area highlighted in yellow below.  Pedestrian traffic will be able to access the greenway using the new sidewalk along Davidson-Concord Road from the intersection of Robert Walker Drive (see area highlighted in blue below). 
“With the traffic pattern change, drivers will need to slow down for the adjustment, and be cognizant of school bus traffic and pedestrians that will be traveling in this area,” said Davidson Police Chief Penny Dunn. “We want to ensure that all of our citizens are safe during this construction period.”


aShortChronicle sent some follow-up questions to the town regarding this notice.  Here is what Christina Shaul had to say.

Q: Will the big sidewalk be completed from Robert Walker down to the new road prior to this?  A:Yes, the multiuse path will be complete from Robert Walker to the greenway, crossing over the new road, West Branch Parkway.

Q: Will any sidewalk be completed along the new road down to where it intersects with Robert Walker prior to the closing? A:Not prior to the closing of Robert Walker. There is to be sidewalk on both sides of this section of the parkway and as townhomes are constructed, the sidewalk on the development side will be completed commensurate. The sidewalk on the outer side of the parkway will likely be installed nearer to completion of this section, to ensure it isn’t damaged as construction is ongoing.

Q: When did the town first learn about this closure? A: This closing was discussed during the Master Plan process; we hoped that it would have occurred over the summer, when school was not in session. Due to a delay in the construction drawing phase, this closure got delayed as well.

Below is a drawing from the Master Plan showing a cross section of the impacted section of Robert Walker once done.


Also, if you are curious about the term "multiuse path" in the answe to the first question. Here is another picture.  As far as aShortChronicle can tell, "multiuse path" and "big sidewalk" are the exact same thing.  However, the term multiuse path does sound much cooler and more important.  So cool and more important in fact that multiuse paths are the sigle biggest category of items in this year's overall $15 million bond proposal.