by Katie Orlando

DAVIDSON – Davidson won’t have to dip into its fund balance for the next fiscal year since a new agreement with Mooresville will reduce its contributions to MI-Connection, the broadband cable company the towns own.

Mooresville and Davidson town boards approved a new inter-local agreement Monday and Tuesday, May 21 and 22, setting Davidson’s share of the company at 30 percent and Mooresville’s at 70.

The original agreement had ownership shares fluctuate annually depending on the share of customers in each town, so the more customers one town had translated to responsibility for a greater share of debt service.

Davidson Town Manager Leamon Brice said that system discouraged each town from growing its MI-Connection customer base and could have encouraged residents to cancel their cable service to reduce their town’s share of the debt burden.

Davidson’s share of the customer base had grown close to 35 percent, Brice said.

The new agreement caps Davidson’s annual contribution to the cable company at $1 million a year. Mooresville will pay the balance of operating shortfalls and debt service. Eventually, MI-Connection should need less than $1 million from each town. Then Davidson will repay Mooresville for subsidies Mooresville has paid above 70 percent ownership.

“We must continue to grow (MI-Connection) here in Davidson,” Mayor John Woods said. “We’ve got to encourage Mooresville to achieve the same level of support and commitment.”

Brice and Finance Director Cindy Jones’ original proposed budget for the fiscal year beginning July 1 included $2.087 million contributed to MI-Connection. That budget included drawing $325,000 from the town’s fund balance, which is ideally reserved as working capitol and for long-term projects and unexpected costs.

Now that Davidson only needs to pay $1 million to MI-Connection, with other budget adjustments, the town had close to $750,000 it can put back into the fund balance.

Commissioner Laurie Venzon was grateful for Mooresville’s cooperation in stabilizing the ownership shares.

“This does relieve our having to keep taking money out of the fund balance,” Venzon said. “Because that really was not sustainable. And I think they (Mooresville officials) understood that.”

The board had been cautious about counting on MI-Connection operations improving enough to reduce town contributions any time in the near future after so many failed predictions of stability. Now that Davidson’s payment is fixed, Jones can budget accordingly.

The board agreed to direct that savings into the fund balance. It will discuss capital improvement projects over the first half of the fiscal year and decide how to use that money in early 2013.

Some of that money will likely go to implementing the town’s economic development strategic plan. The final stage of the plan will be presented to the board at its June meeting.

The plan will include changing the town’s development process, developing strategies to maximize infill development, leveraging assets like Davidson’s highly educated population and encouraging tourism and a buy-local campaign.