As of Wednesday, December 17, 2014
MONMOUTH — Both Monmouth and Independence have paid the December debt payment for MINET, totaling $773,014.
The debt is the result of the two cities building a fiberoptic network. Each city has a loan from the Oregon Business Development Department, and another loan from Key Bank.
Debt payments are due in both June and December, and equal roughly $2 million each year.
Most of the debt was incurred to build the system, said Monmouth City Manager and MINET board member Scott McClure.
How much of that MINET — Monmouth Independence Networks — will pay from its own coffers is undetermined yet, said McClure.
“The finance committee will make a recommendation to the board, and the board will go from there,” he said.
Part of what will be considered is how much cash on hand MINET has, and how much cash is needed for routine capital operations. Whatever MINET does not allocate toward the December debt payment, the two cities will cover — Independence from the water fund and Monmouth from the power and light fund.
MINET General Manager Don Patten said the company that provides Internet, telephone and cable televison services was able to pay as much as $618,000 of that debt, and still have $175,000 to operate with.
“I personally would feel more comfortable with $250,000 (on hand), especially for emergency expenses,” Patten said, adding that it isn’t up to him, but up to the board of directors.
One such emergency expense is repairing damage to fiber lines in the area behind Roth’s Market in Independence. The lines were damaged by the wind storm on Thursday. Repairs could cost $20,000 or more, Patten said.
The company is not where the cities had hoped, McClure said.
“The intent, when it was all started, was it (MINET) would cover all its expenses, including debt,” he said. “It hasn’t. We were hoping to get the debt down to not much of anything. Don (Patten) definitely took a slice. It’s better than last year.”
The average debt obligation for MINET each year is $2 million, Patten said. If the available $618,000 from MINET is used toward the debt payment, the company will have paid $1.378 million toward the total.
Patten said the company will not be stable by his definition until it can cover all of its costs, including the debt payments, adding that he would never have subjected a company of MINET’s size to a debt of this size — approximately $26 million.
MINET board chairman and Independence City Manager David Clyne said the data company is in a more stable position one year after hiring Patten.
“I think I felt that we’d be in a little better place than we are,” Clyne said. “We’ve done a good job of trimming (operational expenses), but (there are) unfulfilled promises of a bigger market share … the net customer growth. I’m not sure those (numbers) are real.”
Clyne said Monmouth and Independence residents have not taken ownership of MINET like they should have.
“It’s our service. We own it,” he said.