- Davidson Police Chief Jeanne Miller and Public Information Officer Cristina Shaul gave an update on pedestrian safety, enforcement, and education. We encourage all motorists to drive defensively, pedestrians to walk defensively, and cyclists to bike defensively.
- Fire Chief Bo Fitzgerald and Asst. Town Manager Dawn Blobaum gave an update on Fire Station #2 which will be constructed on Davidson-Concord Road next to Historic Beaver Dam to improve response times in the eastern part of our jurisdiction. They have selected a construction company and the board of commissioners will be asked to approve the contract at their October 11 meeting. Construction is scheduled to commence in mid-October.
I gave an update on the status of MI-Connection, the communications company owned by the Towns of Mooresville and Davidson that serves residential and commercial customers in Mooresville, Davidson, and Cornelius. CEO David Auger will retire at the end of the fiscal year (June 30, 2017), so the MI-Connection board of directors are in the process of searching for his replacement.
Here’s a brief synopsis of our ownership and financing:
In 2007, the Towns of Mooresville and Davidson purchased the local network of the bankrupt Adelphia cable system to be able to better serve our citizens with telephone, cable, and internet service.
The original loans to purchase this company taken out by Mooresville totaled $92.55M:
• An $80 million Certificate of Participation (CoPS) loan issued in 2007
• A $12.5 million loan to be paid via installment financing (2008/09)
In 2012, we revised our interlocal agreement with Mooresville so that Mooresville owns 70% of the company and Davidson owns 30%. The new interlocal agreement also revised the debt payment provisions so Davidson pays $1 million annually toward the debt service, as long as a deficit of revenues versus expenses exists. The $1 million amounts to approximately 10% of Davidson’s annual budget.
Over the years, the year 2017 has been mentioned as the date when the towns would not incur certain additional penalties for selling the company. This is not the case.
In 2015, the Town of Mooresville re-negotiated the debt to benefit both of the towns – they achieved a significant reduction in debt service for both CoPs and installment financing, and also negotiated an Extraordinary Optional Pre-Payment in Whole.
Under this Extraordinary Optional Pre-Payment in Whole clause, the new parameters allow us, if we were to receive an offer to buy MI-Connection, the ability to sell without full pre-payment penalty associated with the bonds. There is a sliding scale depending on the year that outlines the costs to retire the debt early. There is no longer a limiting factor on the potential sale of MI-Connection. The refinancing erased the 2017 call date. We don’t think the current value of the company exceeds the current debt at this time, but it is trending in the right direction to be able to sell, if that is an option that we choose to pursue.
The analysis of MI-Connection is an action item in the Davidson Game Plan. MI-Connection is steadily growing the commercial side of their business and has many products and services to offer residential customers. We are focusing on the financial health of MI-Connection.
Regardless of whether you believe we should own this business or not, we need to keep making this a viable company – we need to operate it well and support it with our business, so that MI-Connection will ultimately make a profit and become a more productive asset to give us the opportunity to better determine its future.