By Myles Murphy Ashland Daily Tidings
The Ashland Citizens Budget Committee has given initial approval of the proposed Ashland Fiber Network 2003-04 budget, but not without misgivings.
Committee members and residents came down hard on AFN numbers Saturday at the full committee’s third meeting on the proposed $87.3 million Ashland city budget.
AFN critic and Ashland resident Jack Blackburn suggested the city get off the AFN bandwagon before its interfund and capital loans – expected to hit about $14 million by June 2004 – overwhelm the city.
Blackburn said he believes technological changes will make the system out of date before it’s even finished, saddling the city with huge debt payments without offsetting revenue.
“Even a rat has the sense to jump off a sinking ship,” Blackburn said during the committee’s public comment time Saturday.
Ashland Electric Department Director Dick Wanderscheid defended AFN’s outlook, adding that the fiber network is nearly hitting expectations in the current plan.
“I’m not that concerned about technological changes making AFN obsolete,” Wanderscheid said. “If we had the customers we lost because they left town or went out of business, we’d be pretty much in line with (the latest) business plan. The economy is eventually going to turn around, and that’s going to help.”
Wanderscheid also pointed to ancillary benefits already realized by Ashland residents since AFN came on line. Competition for Internet services has lowered the charges from all companies in Ashland for such services, and similar Web access in Medford costs twice as much as in Ashland, he said.
“Money has stayed in the community,” Wanderscheid said, “Unfortunately, that’s really hard to reflect in a business plan.”
“It’s still not a great picture,” Wanderscheid conceded.
Committee member Jim Moore pointed out that it is the committee’s responsibility to question the viability of AFN, along with the rest of the city budget.
“When we see things that don’t look good, we’ve got to ask about ’em,” Moore said.
Committee member Dave Williams noted the repeated changes in the AFN business plan, which have consistently dropped revenue expectations, increased borrowing and moved out the break-even point for the publicly funded venture. He called for a new plan to more quickly bring AFN to a point where it delivers more money than it bleeds out, adding that the current plan “makes it difficult to responsibly support AFN.”
“AFN needs to do whatever it can to make that happen,” Williams said.
Working off hypothetical numbers he came up with himself, Williams estimated that a $15 million AFN debt would cost Ashland taxpayers $200 a year for 10 years to pay off.
Early AFN plans had predicted the network would start making a profit by the 2003-2004 fiscal year, but a series of missed projections capsized those expectations. A follow-up plan then projected a positive income by 2006-2007. Budget committee members and city staff had expressed faith at the time that the lower expectations would easily be met.
“When we look for targets to shoot for, I don’t want to shoot for the conservative plan,” Ashland Finance Director Lee Tuneberg said in an October 2001 meeting. At the same meeting, committee chair Martin Levine was hopeful the plan would play out.
“What if we had come up with a conservative plan and it never showed a profit?” he said two years ago. “We’d be idiots to go forward.”
Committee member and consistent AFN critic Russ Silbiger on Saturday chastised what he believes is a history of misleading AFN business plans, pointing at incomplete information given to the public on the venture from its inception and the continual downward revisions of AFN business plans.
“This is almost a replay of two years ago,” Silbiger said, highlighting the lack of high-speed data customers – meat and potatoes for AFN’s projected revenue. “There is really an abysmal failure on high-speed data.”
Ashland City Councilor and committee member Don Laws ceded AFN’s inability to hit projections in the past, noting overly optimistic projections.
“AFN started on bad footing and erroneous assumptions,” Laws said.
Laws added that a new, more exact business plan is scheduled to come out in the next few months. He advised committee budget members to approve the proposed budget and give AFN another year to see how it works out, or delete the budget completely and start looking at selling the venture to ameliorate the cost to Ashland residents.
“Fish or cut bait,” Laws said.
Committee members also criticized direction from the Ashland City Council to AFN staff not to market the service outside the city.
“That’s history,” budget committee member and Ashland Councilor Cate Hartzell said. “We really can’t afford that. Let’s go out and let’s market (AFN).”
Levine suggested the committee approve the proposed budget – with all its unknowns – and reconvene when the new AFN business plan comes out to look at a revised budget.
The committee decided in favor of that idea, with Silbiger the lone dissenter. The new plan will likely be complete by August, at which time the committee will gather to consider an AFN budget update.
The committee on Saturday also heard budget presentations from the remaining city department heads, and will discuss the overall budget in another committee session scheduled for 7 p.m. Thursday, when members will likely consider the budget document’s approval.
The committee meets at the Ashland Civic Center council chambers, 1175 E. Main St. The meeting will be carried live on Rogue Valley Community Television Channel 9.