On Tuesday, the Town of Davidson sent out a release on the municipally owned cable company providing the latest numbers and projections for next year's budget. In FY2018 Mooresville and Davidson will have to pony up $2,931,038 to subsidize the company.
Under the current agreement with Mooresville, Davidson pays a maximum of $1,000,000 per year in subsidy and anything over that based on the Town's 30% ownership percentage accrues with Mooresville. If there is good news in the current numbers it's that the Davidson's share for just the current year is below the $1,000,000 mark. 30% of $2,931,038 equals $879,311. However, Davidson will still pay a $1,000,000 subsidy this year due to past accruals on its Mooresville credit card.
Even though it doesn't help Davidson's actual budget this year, that annual amount under $1,000,000 is the lowest since Mi-Connection first went into the red back in FY2010 when Davidson owed just $181,000. After that year the deficits and subsidies exploded. All told, including the upcoming FY2018 budget, Davidson will have subsidized Mi-Connection a total of over $11.5 million over the years.
That's the good news.
The bad news is that the a annual drop in overall subsidy appears to have stalled going into FY2018. aShortChronicle delved into its email archives for these annual budget announcements from the Town to compile the below chart.
Notice, the projected drop in overall subsidy of just $118,636. That's a significantly smaller drop than in recent years. The announcement from the Town did not offer a reason for this slowdown going into FY2018. aShortChronicle also noticed that previous announcements included the previous year numbers as well to highlight the significant year over year drops. The announcement for FY2018 did not, a possible sign this much smaller drop was not lost on the Town either.
If the pace of improvement had continued at the previous rate, Davidson was in for a bit of a "windfall" in coming years as the annual subsidies would have dropped well below the $1 million mark and the Mooresville credit card was paid off. That would start freeing up money for tax relief or other needs.
Now, it looks like that date is put off at least another year.
The imminent departure of MI-Connection's CEO, Dave Auger, may have been triggered when he saw the handwriting on the wall last year (at which time he announced his 2017 departure). The traditional cable industry is increasingly under competitive assault and I believe MI-Connection can only buck the national trends for so long. All of this makes me wonder if the increasingly accelerated push to increase residential and commercial development by the Davidson Town Board is being driven, in part, by a need to add customers to MI-Connection in a desperate attempt to stave off what has always been inevitable, huge losses as far as the eye can see.
ReplyDeleteThat's an interesting point of view. I was vehemently against the MI-CONnection deal when Thunberg and his cronies exposed the town so they can play TV mogul. Now it's looking to be even worse than expected for taxpayers!
DeleteI've been thinking the same. Wonder if any back room deals were made.
DeleteSo let's keep letting Thunberg advise Woods & commissioners via LNTC how best to plan roads..... they were yes bobbleheads for NCDOT toll debacle that's going to lose so much it's going to make the TV losses look like pocket change.
ReplyDeleteThis is what happens when you pay a consultant a whopping $1,000,000 to recommend the purchase of an orphaned asset from a company going thru bankruptcy, partly because of fraudulent accounting, at the staggering price of approximately $100 million; when in reality it was only worth approximately $35 million as soon as the ink dried. A debacle of monumental proportion yet all we've gotten since the purchase is positive spin coming from our taxpayer funded Town Hall PR department.
ReplyDeleteYou do all know that the original plan was for the huge profits from Mi-Connection to pay for the commuter rail line, right? The Town has never admitted it but it's one of their worst kept secrets.
ReplyDeleteRemember when one of the local papers were very critical of the Mi-Connection purchase until the cable company purchased large ads.
ReplyDeleteFunny how that works.