LAFAYETTE — Lafayette’s city-owned Internet, television and telephone fiber-optic service is projected to be fully self-supporting by 2016, LUS Fiber officials said Thursday.
The service launched in 2009 and is now covering most expenses.
By 2015, revenue is expected to climb to the point that the telecommunications division will begin paying money into the general fund to support other areas of government, according to projections from the City-Parish Department of Finance and Management.
Similar payments have long been made into the general fund by the city’s utility system.
“We are going to meet all of our financial targets,” LUS Fiber Director Terry Huval told City-Parish Council members Thursday during a budget briefing. “ ... All indications are that we are going to get there.”
LUS Fiber’s anticipated revenue for next year is $35,362,000, compared with projected revenue this year of $29,721,038, according to budget figures.
The city borrowed $125 million to cover the cost of building the fiber-optic system.
LUS is now making enough to cover debt payments and is expected to bring in enough money next year to begin setting aside cash to re-invest in the fiber-optic system as it ages, according to projections from the City-Parish Department of Finance and Management.
By 2015, LUS Fiber is projected to make its first payment into city’s general fund of $1.5 million, followed by a $2 million payment in 2016 and a $2.5 million payment in 2017, according to the budget projections.
Huval said the telecommunication’s service seems to be stabilizing.
“In those early years, it was tight and it was tough,” he said.
LUS Fiber has not released specific figures about its customer base, citing Louisiana laws that allow it to keep secret commercially sensitive information that competitors might want.
But Huval released general figures in May showing the service had more than 14,000 subscribers — about a third of the potential customers in the city.
Council members reviewed the LUS Fiber budget Thursday as part of ongoing hearings this month on next year’s budget, which is set for final adoption in September.
There are no major new expenditures or initiatives when compared with last year’s budget, with the exception of an across-the-board pay raise of 2.5 percent for city-parish government’s 2,265 employees.
The pay raise would add about $2.8 million a year to city-parish government’s personnel expenses.