Broadband Enterprise Fund
Mid-Year Budget Review — Fiscal Year 2026
Fund 510 — Broadband Utility
OVERVIEW
The Big Picture
Jul 2025
MCN acquired & integrated
OVERVIEW
The Big Picture
Jul 2025
MCN acquired & integrated
Sep 2025
Broadband Director appointed
OVERVIEW
The Big Picture
Jul 2025
MCN acquired & integrated
Sep 2025
Broadband Director appointed
Summer '26
Anticipated fiber launch
STRATEGY
Strategic Alignment
This initiative supports the City Council's long-term vision and Strategic Plan.
Expand access to high-speed, reliable internet across Fort Bragg Foster business growth and strengthen economic competitiveness Enable remote work opportunities for residents
Build critical infrastructure owned and operated by the City
FIRST HALF HIGHLIGHTS
Q1–Q2 Wins
Stabilized MCN operations — no service disruptions
Secured Elm Street lease for new broadband office
Advanced rebranding efforts & marketing strategy
Delivering steady revenue without fiber even being live yet
REVENUE
So… How's Fiber Revenue?
Fiber service lines budgeted for FY26:
Internet Services (1–10 Gbps)
$635,340
Voice Services
$10,397
Low Income Offer (500 Mbps)
$38,316
Total Budgeted
$684,053
$0
collected — fiber network construction is still underway, with service launch anticipated Summer 2026 But hold that thought…
REVENUE
The Legacy Products Stepped Up
The customers we already have are generating more revenue than projected.
Adopted
Projected
Variance
Legacy Fusion (Blended View)
$851,844
$1,185,507
+$333,663 (+39%)
Legacy Digital Voice
$194,827
$305,498
+$110,671 (+57%)
Legacy Open Air
$287,532
$391,836
+$104,304 (+36%)
REVENUE
Revenue Scoreboard
-$684,053
Fiber not yet live — zero revenue from new service lines +$548,638
Legacy product overperformance (Fusion, Voice, Open Air) +$83,728
Other growth — Email Hosting, WebHost Domain, Miscellaneous -$61,038
Net revenue variance — just -2.63% off adopted budget
We nearly closed a $684K gap with zero fiber customers.
REVENUE CONTEXT
Why a Short-Term Dip Is Expected
City Limits Only
As a City-operated utility, the Broadband Enterprise can only serve customers within city limits. We are deliberately declining new service requests outside city boundaries — a short-term revenue reduction that aligns operations with our legal authority.
New Customer ROI
New Open Air customers require upfront equipment and installation costs. By not onboarding customers we’ll soon transition to fiber, we avoid that initial expense — a small revenue dip now that pays for itself by eliminating costs that would never be recouped.
These are deliberate, strategic decisions — accepting a short-term dip to position the Enterprise for long-term sustainability.
REVENUE & EXPENSE LINK
The Other Side of the Coin
Those legacy customers keeping revenue strong? They're served through Sonic resale.
Resale Services (Sonic)
$714,000
$1,076,552
+$362,552 (+51%)
Why the Increase?
Fiber construction is still underway, so customers remain on legacy services through Sonic resale. More customers on legacy = more revenue and more resale cost.
The Fiber Transition Fix
Once the City-owned fiber network launches, legacy customers migrate off Sonic resale. Resale costs drop significantly — and those savings help pay for the bonds funding the network build.
REVENUE
YTD Revenue Check-In
$1,333,405
Collected through Q2
57.5%
of adopted budget collected at the halfway mark
$0
$2,317,605 adopted
On pace to meet or exceed revised projections of $2,256,567.
EXPENSES
Expense Overview: The Good News
Personnel costs are projected to come in under budget.
Adopted
Projected
Savings
Salaries
$672,290
$628,984
-$43,306 (-6.4%)
Benefits
$316,373
$243,873
-$72,500 (-22.9%)
~$115,800
Combined personnel savings
OFFSETS
Savings That Help Offset
Personnel (Salaries + Benefits)
-$115,800
Utilities
-$104,540
Dues & Memberships
-$61,139
Books & Subscriptions
-$52,009
Significant cost-saving opportunities identified across the budget help offset the resale services increase.
EXPENSES
Other Notable Variances
Elm Street Lease (New Office)
+$34,661
Equipment Leases & Postage
+$25,750
Bank / CC Fees
+$9,087
Equipment Repair & Maintenance
+$6,400
Training / Travel
+$4,315
ACTION ITEM
Budget Amendment Request
+$362,552
Resale Services — Utilities (Account 510-5001-0385)
Original budget: $714,000 assumed phased fiber transition Reality: 100% of customers remain on resale through at least Summer 2026 Revised projection: $1,076,552 to maintain existing service levels
PERSONNEL
Personnel Request
☺
Convert Part-Time Position to Full-Time
Support ongoing operations and prepare for fiber service launch and customer acquisition.
Fits within projected personnel savings
Maintains service quality during transition period
Positions the Enterprise for Summer 2026 fiber launch
Absorbed by existing budget savings — no additional cost
LOOKING AHEAD
The Road Ahead — Q3 & Q4
Complete fiber-optic network construction
Launch fiber service — Summer 2026
Execute customer transition strategy — migrate from legacy services Onboard full-time staff position
Launch marketing push to drive customer acquisition
LONG-TERM VALUE
The Payoff
A transformative investment in Fort Bragg's infrastructure.
Local Control
City-owned infrastructure with direct oversight and accountability to residents.
LONG-TERM VALUE
The Payoff
A transformative investment in Fort Bragg's infrastructure.
Local Control
City-owned infrastructure with direct oversight and accountability to residents.
Competitive Pricing
Affordable, transparent pricing for residents and businesses.
LONG-TERM VALUE
The Payoff
A transformative investment in Fort Bragg's infrastructure.
Local Control
City-owned infrastructure with direct oversight and accountability to residents.
Competitive Pricing
Affordable, transparent pricing for residents and businesses.
Improved Reliability
Modern fiber-optic network delivering consistent, high-speed connectivity.
LONG-TERM VALUE
The Payoff
A transformative investment in Fort Bragg's infrastructure.
Local Control
City-owned infrastructure with direct oversight and accountability to residents.
Competitive Pricing
Affordable, transparent pricing for residents and businesses.
Improved Reliability
Modern fiber-optic network delivering consistent, high-speed connectivity.
Economic Development
Attracting business, enabling remote work, and strengthening the local economy.
Questions?
City of Fort Bragg — Broadband Enterprise Fund
Mid-Year Budget Review — FY 2026