Salisbury in Negotiations for Fibrant Lease Agreement

  • Fibrant
  • Hotwire Communications
SALESBURY, NC — The Salisbury City Council has adopted a resolution authorizing submission of a Fibrant lease proposal to Salisbury voters for a vote in May.

The city of Salisbury, North Carolina, is in negotiations to enter into a lease agreement with Hotwire Communications, a privately-owned fiber optics telecommunications provider, to provide services over the city’s fiber network. If negotiations are successfully completed, an interim management agreement would be effective in late winter. The lease of the Fibrant system would be required to be submitted to a referendum of Salisbury voters simultaneously with the May primary election and would be subject to satisfaction of other conditions.

Improving Fibrant’s Financial Performance
In November 2016, the city engaged CTC Technology & Energy, a consulting firm with experience in providing financial, strategic, and technical guidance for public sector communications networks, to assist in an analysis of improving Fibrant’s financial performance. Working with CTC, the city issued a request for proposals (RFP) for a Fibrant povider arrangement on Tuesday, Jan. 24, 2017.

The RFP stated the city’s interest in a third-party provider arrangement that would enhance Fibrant’s service to the community, and indicated the city’s flexibility to consider various types of proposals. Those proposals included a possible sale of Fibrant, a lease of Fibrant’s assets, a management contract and a public-private partnership involving the Fibrant assets.

The city received 14 responses to the RFP, and after reviewing and discussing the proposals with a local group of Salisbury business leaders and CTC, entered into preliminary negotiations with Hotwire in spring 2017. Hotwire proposes to lease the Fibrant system on a long-term basis. Negotiations continue toward a final management agreement and lease.

“Fibrant and its operation have been delicate subjects in our community for a number of years, understandably so,” said W. Lane Bailey, city manager. ”Improving the fiscal success of Fibrant is important to the financial well-being of the city, and we believe entering into this lease agreement would be a step in the right direction. We are optimistic that a long-term lease agreement between the city and Hotwire will move forward after the referendum votes are tallied, freeing funds to complete other city projects.”

A lease of the Fibrant system would require the city’s existing tax-exempt financing to be converted, at least in part, to a taxable financing. The city has notified the state treasurer’s office regarding the potential change.

If the resolution is passed by city council and lease negotiations successfully completed, Salisbury residents would vote on the long-term lease agreement during the May primary election on Tuesday, May 8. If the referendum passes and the bond arrangements completed and other conditions satisfied, the arrangement would be effective beginning Sunday, July 1.


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