January 18, 2006

City gives AFN $1M

Transfers from other departments are on top of previous $500,000

By Vickie Aldous
Ashland Daily Tidings

The debt-ridden Ashland Fiber Network will get an infusion of cash from the city’s sewage and electric department reserves.

The Ashland City Council voted Tuesday night to transfer $540,000 from the wastewater fund and $460,000 from the electric fund — for a total of $1 million — into a contingency fund to help AFN in the coming year.

The move came on top of a decision in December to use $500,000 in electric department funds to help AFN make a payment on its $15.5 million debt.

“Is this a million on top of the $500,000?” Councilor Russ Silbiger asked Ashland Finance Director Lee Tuneberg.

“Yes,” Tuneberg said.

“Taking money from various departments was what we were trying to avoid,” Silbiger said. “I’m not going to support this.”

After several years of borrowing money from other city departments to cover AFN’s shortfalls, the city took out $15.5 million in bonds. But AFN has not generated enough revenue to make the payments on the debt.

In 2005, the council adopted a $7.50 monthly fee on all electricity customers to help close the shortfall, but then rescinded the decision shortly after it took effect, after hearing concerns about the fee’s impact on low-income residents.

Tuneberg developed a long list of options to meet AFN’s debt payments, from using excess reserves from other city departments to selling off property.

The city is exploring options to sell AFN or spin it off as a nonprofit. The Jefferson Public Radio Foundation, Charter and Qwest have expressed interest in AFN.

Silbiger voted against using the money from other departments for AFN, while Councilors Alex Amarotico, David Chapman, Cate Hartzell, Kate Jackson and Jack Hardesty voted for the transfer. Mayor John Morrison votes only to break a tie.

Among other agenda items Tuesday night, the council confirmed Pam Marsh to the Ashland Planning Commission, heard resident Ambuja Rosen ask for a city ordinance banning the tethering of dogs and approved a new contract with the city’s electrical workers.

Staff writer Vickie Aldous can be reached at 479-8199 or vlaldous@yahoo.com.