A consultant will be brought in sometime next month to help guide the City of Ashland on the direction of the financially troubled Ashland Fiber Network.
The city plans to have the consultant come to Ashland to thoroughly analyze and give insight on AFN for 12 to 15 weeks, it was announced at Thursday night’s city budget committee meeting.
The hope is to have a completed budget containing suggestions by the consultant presented to the budget committee in March, City Manager Gino Grimaldi said.
“It’s a starting point in how we can improve AFN,” Grimaldi said after the meeting.
Ashland Electric Department Director Dick Wanderscheid said the consultant will give an honest appraisal on the direction and future of AFN.
“It’s time to bring someone in with industry experience to overlook and see what we’re doing,” he said. “It’s a reality check on our assumptions to see if they’re reasonable.”
The consultant will look carefully at the AFN budget and make suggestions, including how to market and manage AFN more efficiently. New networking services will also be looked at, Wanderscheid said. Possibilities include telephone service, or video on demand for cable customers.
Since the city decided to move ahead with AFN in fiscal year 1998, AFN has not fulfilled early predictions of profitability and has been mired in increasing debt.
The debt – from interfund and capital loans – is forecasted to grow to about $14 million by next summer.
The city sent inquires to 35 consulting firms in early August, Wanderscheid said. Four consultants have shown interest. The city hopes to have a consultant here in 2 to 4 weeks.
The consultant’s fee has not been determined, but is estimated to be in the $25,000 to $50,000 range, Wanderscheid said.
Ashland mayor and budget committee member Alan DeBoer said after the meeting it’s important to have an consultant come in to insure the fiber network is a success.
“AFN is here to stay,” he said. “The city has a huge investment and we need it to succeed. It’s a great service.”
Committee member John Morrison said he liked the idea of hiring a consultant.
“Get an consultant. Get an extra mind,” he said at the meeting. “Get someone in here to give us the guidance we need.”
At the meeting, city staff gave committee members possible future figures for the cost to customers of AFN Internet and cable access.
This included a projection of the cost of Internet residential direct connections increasing substantially each year. The figures start at $21.35 a month for fiscal year 2003-2004, and rise steadily, reaching $34.97 a month for fiscal year 2007-2008.
Some committee members voiced concerns about the high rates.
“It sound like a lot to me,” Committee member Dave Williams said. “Are we going to charge that much of an increase?”
City staff explained the figures were just an “best guess” of what could happen with cost for services.
“It’s not a prediction, but shows one possible future that could happen,” Wanderscheid said.
City staff also presented to committee members what AFN has done in terms of marketing and other revenue enhancement activities since the beginning of the fiscal year to improve the bottom line.
o starting a new AFN campaign based around the use of personal testimonials;
o adding an additional outside sales person;
o and adding a temporary AFN installer to help with the return of Southern Oregon University students.