NEGAUNEE - The city of Negaunee will move forward with a proposal to sell its cable TV and Internet system - but members of the Negaunee City Council want the public to be fully aware that any final agreement will include contingencies and caveats designed to protect city residents.
The council voted unanimously at its Thursday night meeting to authorize City Manager Jeff Thornton and City Attorney Bruce Houghton to pursue the sale of the city-owned system to Intechs IT Solutions LLC. Intechs is owned by Nick Visser - a Negaunee resident who until last week was a city councilman. Visser resigned from his seat March 6 after making the sale proposal to an ad hoc committee formed to consider the city's options for selling the system.
Thornton and Houghton will work with Visser and his representatives to create a final contract with terms amenable for both parties, which will then be brought back to the council at a later date for its final approval.
Visser's proposal is to buy the cable system for $1,000, but Councilman Michael Haines wanted the public to be clear that Visser is going to be making a more than $30,000 investment in the first three to six months to install free public Wi-Fi on Iron Street, high-definition cameras on Iron and overlooking Teal Lake and to overhaul the head-end infrastructure.
"We're trying to get it out to the city that we're not handing this over for $1,000 - that there's a big yearly cost involved," Haines said.
In addition Visser's initial investments, he'll provide the city with nearly $35,000 a year in subsidies - including Internet, cable and phones for the city hall and the police and fire departments, according to his proposal.
"So if your company works good and you make money, and it works well for us, and we're contracted into this type of thing, in a 10-year period of time we should see approximately $350,000 recouped into our cable system, for a system that has a negative value right now," Haines said.
"Yes," Visser said.
"I want everybody to understand that if you're successful in your business, that is also going to make us successful here," Haines said. "Things are going to work out much better than if we just pull the plug. It should be a win-win."
Thornton said that part of his and Houghton's job is risk management, and that in working with Intechs they'll be considering the sale's potential drawbacks.
One such drawback is the possibility that Intechs could fail as a business. Thornton said he wants to put a contingency plan in place so that if such a situation arises, the city can take back property - utility poles, some fiber optic cable and head-end equipment - that would be leased to Intechs.
"What he's talking about for city hall - we're putting all our eggs in one basket. And if that basket topples, then we're going to be scurrying trying to recover from it," Thornton said. "So we just need a plan if that happens. I hate to be the negative one, but that's what we've got to look out for.
"I want him to be successful, but I just want to reassure everybody - we're not just rolling over and handing - we're going to make sure this is done properly, and the citizens of Negaunee are protected."
Michael Grentz, a partner at Anderson, Tackman & Company PLC, the city's accounting firm, summarized for the council the financial situation of the cable fund. He said the fund has been losing money for more than seven years.
"In the last three years, you've actually transferred in $281,000 into the cable fund to keep it going," he said. "And what I'm seeing here is it just continually keeps getting worse over the years."
Now that the council has given the go-ahead to proceed with the sale, Visser said he hopes that Intechs and the city can reach an agreement quickly, as he plans to have the public Wi-Fi and the cameras up and running by Pioneer Days in July.