HUDSON — Should broadband service to businesses operate from its own enterprise fund rather than the general fund?



That’s a question that City Council members discussed at a recent meeting, and now city staff is preparing a report on that issue as well as other possible courses of action regarding Velocity Broadband.



Velocity Broadband, which is owned and operated by the city of Hudson, has provided high-speed internet service to city businesses since 2015. City officials are now mulling the possibility of expanding that service to residents.



Council President Bill Wooldredge (At Large) said Velocity needed to "have its own set of books. We need to have a separate accounting [system], so we know how well it’s doing."



The city will begin 2019 with Velocity Broadband continuing to operate from the general fund; however, Wooldredge asked that city staff come up with "whatever they think is the best course of action," and report back to council.



According to communications manager Jody Roberts, Velocity is projecting $706,193 in sales and $619,480 in expenses in 2019.



City Manager Jane Howington said Council should understand the ramifications of any potential changes to the Velocity accounting system and emphasized that council can make a change at any time in 2019.



"The administration will be back to Council for a discussion, but no date has been scheduled yet, Roberts said.



"It most likely will be pushed back to February or March," she said.



Roberts said city officials project that Velocity will be "in the black" in 2019, and added, "there will be a positive cash flow, thus not impacting the general fund." She added that Velocity’s source of income is its subscription fees, "which are used to offset any operating costs."



Council’s recent discussion



Council on Nov. 27 discussed a proposal to move Velocity Broadband into the Hudson Public Power Enterprise Fund, however, members said Velocity should be in its own enterprise fund.



"I really like the idea of Velocity Broadband being put in an enterprise fund and letting it be a full-fledged business," said Council member Beth Bigham (Ward 4). "I was never thinking that it would go into Hudson Public Power. I was thinking it would be standing on its own."



Bigham said the proposal to put Velocity and HPP together seemed "very complex," and added she would prefer that the change be more "clear cut," with Velocity operating from its own enterprise fund.



Council member Dr. J. Daniel Williams (At Large) questioned whether putting the Velocity finances into the HPP fund would be any different than having Velocity listed in the general fund as it is now. Williams said he would prefer that Velocity have its own separate enterprise fund.



"Let it live and die by itself," said Williams, who said the "downside" of putting Velocity into its own fund is if the venture "makes money, we can’t get at it."



"I’m willing to take that risk," Bigham said.



If the Velocity finances were part of the HPP Enterprise, Mayor David Basil said the broadband portion should be "segregated so we can identify it separately, with its own line items and its own costs."



Council member Dennis Hanink (Ward 1) said an ad hoc committee that examined the possibility of expanding broadband service to residents listed several different models that municipalities use.



‘We haven’t discussed whether a different [model] than the one we’re doing right now would be appropriate," stated Hanink.



He added if Velocity was "cash positive," there may be a company willing to purchase the system and he said such a possibility has not been discussed by city officials.



Council member Alex Kelemen (Ward 3) said he wanted Velocity to operate in its own fund, saying that purchases and other actions should be based on their available revenues.



"I do care if they keep coming back to the general fund and asking for money to support their operation," said Kelemen. "Keeping it as its own fund lets them run it as a business."



Kelemen said he would be willing to consider having the general fund loan money to Velocity for a specific need just as the city does with Hudson Community Television. Such an approach could be done on a "case-by-case" basis, he said.



While council would still have oversight of Velocity, Kelemen wants legislators to reduce the amount of time they spend discussing the operation.



"We’ll just count on the fact that we’ve hired people to do that job and they’re doing the right job and they’re making it work," said Kelemen.



Hanink said he felt putting Velocity in its own enterprise fund is "the only sensible way to go."



"It’s got to stand on its own two feet," said Hanink. "[The city] can’t keep dipping into the general fund to underwrite losses."



Reporter Phil Keren can be reached at 330-541-9421, pkeren@recordpub.com, or on Twitter at @keren_phil.