0

Minet Finances Appear Shaky For Next Two Years

MONMOUTH/INDEPENDENCE -- The reasons Phil Garrett is no longer the general manager of Monmouth-Independence Network (MINET) were not revealed last week following the MINET board's announcement that he

MONMOUTH/INDEPENDENCE -- The reasons Phil Garrett is no longer the general manager of Monmouth-Independence Network (MINET) were not revealed last week following the MINET board's announcement that he would be leaving the public utility.

Neither did board members comment on the reasons it felt it needed an operational review in February, the subject of the review, or its findings.

David Clyne, MINET's board president, said the silence is the product of the separation agreement MINET made with its former general manager. The agreement, which is also confidential, limited what can be said about Garrett's departure and what led to it.

"I can't talk about that, as much as I would like to," Clyne said.

Garrett, whose annual salary was $119,558 at the time of his departure from MINET, will be paid through June. He had been on administrative leave since

February.

MINET's 2012-13 budget, introduced last week, did reveal that the public utility will need more financial support to make it through the year -- and perhaps the next.

At the end of 2011, MINET was claiming the success of a new marketing campaign and expansion of its services. The marketing campaign still is attracting new customers at a healthy clip.

However, in the short term at least, the success of the campaign appears to be too little, too late.

MINET is facing a revenue shortfall of between $380,000 to $500,000 in fiscal year 2012-13, and might be in the same position the following fiscal year.

Interim General Manager Ross Schultz said MINET has two debt service payments on loans each fiscal year in December and June. He said it is the second payment that's in question.

Ross Schultz

"The budget as presented was $380,000 in the hole," he said. "However, the budget committee reviewed it and said that my estimates were likely too rosy."

He said the committee felt more comfortable with estimating a shortfall between $400,000 and $500,000.

Schultz said there are options for acquiring funding, but it most likely would come in the form of a loan. A transfer from the cities of Independence and Monmouth is included in the budget.

Clyne, who is also the city manager of Independence, said he remains cautiously optimistic about MINET despite the projected shortfall.

"I'm currently concerned, and have been, about our financial strength," Clyne said. "I know we are going to have a gap to fill next year, and maybe the year after, but we are definitely on the right course."

Clyne and Schultz said that new course is based mostly on putting more focus on competing in the local market. MINET has hired an account executive to focus on local marketing.

Clyne is so assured that the future looks brighter that Independence isn't budgeting a transfer to MINET.

"I'm confident that they won't be calling on us for those funds," he said.

Monmouth, on the other hand, has set aside funds for MINET -- to the tune of $1 million.

Scott McClure, Monmouth's city manager and MINET board vice president, said the money comes from reserves from the city's Power & Light fund.

"We had the money benchmarked for MINET," McClure said. "We hope to God that we don't have to use that much."

McClure said there was no one issue contributing to the need for another loan after MINET's debt was refinanced in 2010.

"The economy still is poor," he said. "People are dropping services or declining to add services and people are leaving the area."

However, it seems one of the bigger factors was a lack of planning for growth.

"We've never had a marketing campaign," McClure said. "We are addressing that now."

McClure was quick to point out that if MINET had to borrow money, it would have to it pay back.

"If we did do a payment, it would be considered a loan," McClure said. "That's our Power & Light money. It isn't like anybody is happy."

Comments

Use the comment form below to begin a discussion about this content.

Sign in to comment

CLOSE X

Information from the Itemizer-Observer and our advertisers (Want to add your business to this to this feed?)