Monday, March 10, 2014
Covering Dallas, Monmouth, Independence, Falls City and surrounding areas since 1868
December 11, 2012
MONMOUTH/INDEPENDENCE -- The cities of Monmouth and Independence will loan a collective $642,000 to their jointly-owned cable utility to cover a portion of a semiannual debt payment.
In June, Monmouth-Independence Network (MINET) officials predicted they could afford a year-end $1.28 million payment due on a bond for start-up and operating investments.
Ross Schultz, MINET interim general manager, said the original plan was to use available revenue and borrow on capital fund reserves.
"On the advice of our bond counsel, our board of directors chose not to do that," Schultz said.
The cities pledged "full faith and credit" as part of a MINET refinance of outstanding debt in 2010. As such, Monmouth leaders agreed to contribute $353,000 and Independence $289,000 to make the payment in recent weeks.
MINET has approximately $26 million in debt remaining. The utility had been making its own debt payments until this month.
Schultz said MINET will likely ask both cities for assistance again for its June payment.
"It would be roughly $95,000 total that we need," Schultz said.
"Past debt service is something we know we have to fix," he continued. "But we're looking at two to two and a half years where we'll be in better shape and have opportunities to refinance and get it under control."
Outside of debt payments, the utility is generating enough monthly revenue to cover its regular operations. Net revenue for the month of June was $290,000. In November, MINET earned $326,000.
The utility currently has 6,650 subscribers, up about 300 from June. It has also started a business phone service for cities and other agencies. One current customer is the Strategic Economic Development Corporation (SEDCOR) in Salem.
"Our business accounts are up roughly 50 percent in the last six months," Schultz said. "That's largely due to local marketing."
Monmouth Mayor John Oberst said there was some "wheel spinning" when it came to cost-versus-profit predictions a few years ago.
"We probably should have started a marketing effort sooner than we did," Oberst said. "But MINET is on a nice course now.
"The take rate and revenue continue to increase," he noted. "Eventually, it will be able to cover all of its operating cost and completely service its debt."