New Fibrant Interim Honcho into Crisp Execution of a Failed Business Plan

Posted on November 23, 2016

Todd Paris, Staff Writer and Salisbury Attorney

♦ City Council and staff met last week for a workshop for to determine a new capital improvement plan (CIP). What does this mean? A CIP is a plan for future large city expenditures, and how to fund those expenditures. The problem? Fibrant is holding everything back.

During the meeting city council members began to make this clear for the first time. Because of the $3M plus annual subsidy from the General Fund to Fibrant it is now clear the city can’t spend money on other projects for the community like the Downtown Incentive Program, Dixonville Cemetery, Newsome Road extension and Fire Stations 3 and 6.”until the Fibrant debacle improves which appears impossible.   Otherwise Salisbury risks another large tax increase to pay for those projects. Management is under pressure to reduce the $3M plus per year Fibrant losses so the money saved can go to pay for these projects. If this does not occur, the city council has to choose between raising taxes to fund the projects or doing no projects at all.

While this discussion is a step forward, (thanks to Attorney and CPA, Council-member David Post) it is disturbing that after all this time they cannot openly state that Fibrant is a financial failure that should have been sold back in 2014. Instead they decided to spend more money on an outside company to tell them what they already know. Why would they do this? To distance themselves from that eventuality, so they have someone to blame (the outside company) when Susan Kluttz, Mark Lewis, Bill Burgin, and David Treme start calling upset about this finally being revealed.

Back in 2014, Salisbury had a willing suitor for Fibrant. North State Communications wanted to make an offer.  A workable concept was simple. North State could lease Fibrant and the city would use those lease payments to make the city’s own debt payments until the note was paid off. When that occured, ownership of Fibrant would have been transferred to North State Communications. If this had occurred in 2014, it would have saved taxpayers over $6M in ongoing loses over the last two years that could have went toward projects on the CIP list. Instead, Mayor Paul Woodson walked out of the meeting with North State Communications and ended this opportunity.

Since Fibrant was not taken over by a company who knows what they are doing, we still have a city run utility. In addition to the additional $6M in loses since 2014, the city is now locked in litigation with Atlantic Engineering who has stated the city directed them to install the system out of compliance with the National Electric Safety Code. The cost to fix this will just add to the ongoing loses.  Picture a mountain doubling it size.

Earlier this year, Kent Winrich (Director) and Adam Shepherd (Sales Manager) were replaced by Evans Ballard, Fibrant’s interim director, who is a “bean counter” with very little management experience. His focus to date is “crisp execution.” This shows his inability to lead Fibrant, because “crisp execution” of a failed business plan is not exactly a Harvard Business School best practice.

The most alarming insight at the meeting was city staff trying to get the City Council to agree to a decade worth of additional annual losses. What corporate board of directors in their right mind would do that?

It gets better. Fibrant’s staff announced they don’t have the money to replace key equipment and city council members squealed like they had no idea.  After all how could a business that was losing so much money each year be able to put back money for future equipment replacement? That’s like your husband not having the money each month to make the car payment on time, then you acting surprised when he hasn’t put money back to replace the transmission. Surely the city council is not that far detached from reality?

Salisbury is a mess and most of the City Council is clueless. The city lacks the money to bolster police and pay for capital projects due to Fibrant. Rather than making a decision and cutting the cord, certain elected officials are putting pressure on staff to do what everyone knows is impossible. Their backup plan is to rely on an outside company scapegoat to deliver the bad news so they don’t get hit when that grenade goes off.

What is clear is that it was a mistake in 2014 to walk away from North State Communications. We have been paying for that mistake every since.

Learn More about the Fibrant Debacle:

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