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Lenoir City Council authorizes supplemental revenue bonds to cover LCUB fiber costs amid concerns over overruns
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Summary
The council approved two supplemental resolutions authorizing revenue bond sales to support the LCUB fiber-optic project and pay outstanding invoices, while some members voiced concern about cost overruns and lower-than-expected subscriber uptake. Staff said remaining invoices total roughly $26–27 million.
The Lenoir City Council on March 23 approved supplemental resolutions authorizing additional electrical system revenue bond sales to provide final funding for the LCUB fiber-optic project and to pay outstanding invoices.
Leon Shields, identified in the meeting as the LCUB general manager, told council members the measures were the "last step for the original funds approved in 2022" and said roughly "$26 to $27,000,000 will be owed out of the funds" remaining to be paid. Shields said the actions would primarily pay invoices owed to contractors and help close out warehouse and installation costs tied to the project.
Council members pressed for more financial detail before approving new debt. One council member said they were "not comfortable approving any additional debt because we don't have a plan going forward," noting that subscription rates to LCUB Internet service were about 11 percent versus the 40 percent predicted in 2022 and that the project had experienced significant cost overruns.
Shields responded that staff had been negotiating contract reductions, internalizing work previously provided by third parties, and terminating underperforming contracts. He listed three remaining contractors to transition—Entrust, Cannon and Cannon, and LMA/Spriggs—and said the board expects to finish terminating or reassigning those contracts within weeks.
Why it matters: the supplemental resolutions authorize borrowing to pay completed work and to keep the broadband project moving; approving the measures commits the city and LCUB to additional financing steps while staff seeks to reduce ongoing costs and present updated projections.
Votes at a glance: - Supplemental resolution authorizing bond sale payments up to $23,080,908 (electrical system revenue bond, fiber project): motion made and seconded; council approved. (See council discussion and Shields' explanation.) - Supplemental resolution authorizing bond sale payments up to $25,000,000 (electrical system revenue bond): motion made and seconded; council approved.
What council asked for next: multiple members requested updated projections and a clearer plan for service uptake and debt repayment. Shields said staff will provide more detailed projections and continue to reduce contractual obligations where possible.
The council also handled several routine items during the meeting, including approving an employment agreement for finance director Sabrina Norris and declaring certain police department items surplus. Those votes were recorded by roll call during the meeting.
