June 4, 2014
RStreet.Com reported last week that, “LUS Fiber, the municipal broadband system in Lafayette, La., last month received another warning from city auditors …”
In their latest annual report, auditors noted LUS Fiber in its initial feasibility study was projected to earn $36.7 million in its sixth year of operation (2013). Its actual revenues, however, totaled just $23 million, 35 percent below the figure forecast in the feasibility study. LUS Fiber lost $2.5 million in fiscal year 2013 even though, in that feasibility study, it was projected the system would earn $902,000 last year.
According to R Street, “The most staggering number, however, is LUS Fiber’s deficit, which stood at $47 million at the end of October, up from $37.1 million the year before.”
Taxpayers are on the hook for that debt, which increased a staggering 27 percent from 2012 to 2013.
To push back on the poor report, LUS executives noted the system now is now taking in more every day than it spends (and, indeed, that news is an improvement from last year), but unfortunately, as R Street says, it “does not factor in its enormous long-term debt liability.”
As a result of the poor showing, auditors recommended “management should carefully monitor the financial results of operations of the communications system” and LUS should “continue to enhance its market strategy in order to increase its revenue base.”
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