By Angie Thompson/senior reporter
TIFTON
August 26, 2008 04:35 pm
—
The Tifton City Council has given the committee charged with selling CityNet the go-ahead to continue its negotiations with Mediacom of Valdosta.
The city mailed Requests For Proposals to 26 telecommunications companies in Georgia June 10. Mediacom of Valdosta and Plant Telecommunications of Tifton were the two companies who submitted their proposals by the July 11 deadline. Proposals from both companies called for the continued free use of fiber for the city and county governments as well as an agreement that the companies would provide service to the Tift County school system.
Members of the council met in executive session in a special called meeting for 30 minutes after the regular workshop session ended Monday night. When the group reconvened in open session, councilwoman Marianna Keesee made the motion to empower the committee to continue negotiations with Mediacom on the sale of the business as well as “all associated assets.”
City Manager Mike Vollmer, City Attorney Greg Sowell, City Finance Director Carmina Turner, CityNet Director Donovan Adkisson and City Auditor James Herring serve on the committee.
“Once we feel we have come to a final negotiation proposal, we will present it to council for review and vote,” said Sowell, who also serves on the CityNet committee.
Sowell said that after the committee presents the final negotiation proposal to council, the community will be given the opportunity for at least three weeks to ask questions and make comments to council members before the council votes on the proposal.
“We really wanted to see if we could get a local business provider to keep competition in the marketplace,” said City Manager Mike Vollmer in a meeting earlier Monday afternoon.
Vollmer said the committee considered the purchase price offered for CityNet foremost but also considered the companies’ customer service response time and evidence of their ability to operate the system.
Vollmer said Mediacom was not interested in purchasing the system’s building at Kent and New River Church roads. He also said the building had recently been appraised at $900,000.
“We’re looking into the interest the public and private entities might have in the building,” Vollmer said.
Mediacom is also not interested in CityNet’s equipment, but there is a market for it, Vollmer said.
Mediacom has agreed to provide free Internet service to Tifton and Tift County governments, according to Vollmer. Until a year ago, CityNet was also absorbing the cost as Internet service provider to the Tift County public school system. At that time, the Federal Communications Commission began funding the service through the E-Rate program.
“A lot of individuals have overlooked what the business has meant to the city,” Vollmer said.
In the late 1990s, Vollmer said, the City of Tifton created CityNet to enable businesses and citizens to take advantage of high-speed Internet and data connectivity. At that time, he said, larger cities with digital capabilities had an economic advantage over smaller rural communities that didn’t have the capabilities. He said that people should also consider that for 10 years, CityNet offered its services at no cost to the school system, which would have amounted to over $500,000 annually in additional tax funds needed to support the services. He also said that taxpayers saved over $1 million yearly because CityNet provided the city and county services at no charge.
Vollmer said the city’s hope is that Mediacom will honor special price offers already made to customers.
Since 1998, the city has borrowed $5.6 million from the Georgia Municipal Association and the city’s general, gas and water utility funds to fund CityNet. Also since that time, the city refinanced the initial bond package with a new one totaling $10.7 million. If the city’s deal with Mediacom is finalized as negotiations have indicated, the purchase price is expected to relieve all but $2 million of the city’s bond debt but not the internal loans or the Georgia Municipal Association loans.
Financial History of CityNet:
• September 1998 - $7,900,000 million in bond revenue was made available for the initial build-out of the system.
• September 1999 - $155,458 borrowed from the Georgia Municipal Association.
• September 2000 - $800,525 loaned to the system from the city’s general and gas utility funds.
• September 2001 - $1,204,450 was borrowed from the general and gas utility funds.
• September 2002 - $120,000 was borrowed from the gas utility fund and another $298,558 from the Georgia Municipal Association.
• June 2003 - $1,243,500 was borrowed from the gas utility fund and $879,994 from the Georgia Municipal Association.
• June 2004 - $608,269 was borrowed from the gas and the water utility funds.
• June 2006 - $182,469 was borrowed from the gas utility fund and from the hotel motel tax fund for economic expansion to industries and another $142,517 was borrowed from the Georgia Municipal Association.
• September 2006 - The initial bond package was refinanced with a new bond package totaling $10,720,000 to enable the system to keep current with new technology.
• June 2008 - $98,000 was borrowed from the water utility fund.
To contact senior reporter Angie Thompson, call 382-4321.
Copyright © 1999-2008 cnhi, inc.