Council OKs LUS borrowing
Director: Fiber-optic service on way to being self-supporting
LAFAYETTE — The City-Parish Council on Tuesday voted to allow LUS Fiber to borrow another $14.5 million to support the city-owned telecommunications business.
The fiber-optic Internet, television and telephone service launched in 2009 and has yet to see strong enough revenues to support itself, though LUS Director Terry Huval said he is confident the service will be self-sustaining within two years.
Lafayette voters in 2005 approved a bond measure that allowed LUS Fiber to borrow up to $125 million for the fiber-optic system.
LUS Fiber borrowed $110 million at the start of the project, and the council’s vote on Tuesday allows the service to tap the balance of the $125 million in voter-approved debt.
The council voted unanimously on Tuesday to allow LUS Fiber to sell bonds for the money, despite reservations expressed before the meeting by one councilman.
Councilman William Theriot had said he worried that LUS Fiber is not meeting growth projections and could be “trying to borrow their way to prosperity or profitability.”
Theriot did not raise those concerns at Tuesday’s meeting, and the council voted unanimously to approve the LUS Fiber request with no discussion.
The majority of the nine-member council has generally been supportive of LUS Fiber, which is now making enough to pay operating expenses but not enough to make debt payments.
Councilman Jay Castille said in an interview last week that he views LUS Fiber as any other start-up business and would not expect finances to stabilize until about five years after the 2009 launch date.
Huval has said the additional $14.5 million will be used mainly for expenses linked to adding new customers and that the service would have had to limit new connections if the council had not approved the money.