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With 2009 expected to be another banner year for Bruce Telecom,
Kincardine council had no hesitation in supporting the company's request
to set up a $750,000 line of credit and overdraft protection.
In committee-of-the-whole Dec. 17, chief executive officer Mike Andrews
explained that 2009 will be a transition year with the addition of four
new lines of products, including cellular phone, IPTV, improved local
lines, and fibre to the home (Southampton). "2008 was a robust year," he
said, noting that expenses were higher than normal to provide additional
services to the community "Revenues and expenses went up this year."
Referring to the budget for 2009, Andrews said the capital costs will be
significantly lower, while operating revenues and expenditures will be
about the same.
The budget is projecting revenue of $16 million and expenses of $14.5
million, leaving a surplus of $1.5 million. Of that, the company expects
to present a dividend of just over $1 million to the Municipality of
Kincardine. Capital costs for 2009 are set at $2.1 million. The budget
has been approved by the Bruce Telecom board of management which
continues to strive for a reasonable stable dividend to the
municipality. (next column)
13/01/2009 04:14 PM
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(continued)
Councillor Guy Anderson noted that Bruce Telecom dipped
heavily into its reserves in 2008. Chief financial officer Bill Sipprell
said the company is building those reserves back up, putting $600,000
back into reserves in 2009.
Andrews then made the request for a $750,000 line of
credit and overdraft protection in order to grow Bruce Telecom's cash
reserves to a reasonable operating level.
"Why do you want the bank's money?" asked councillor Mike Leggett.
"Our balance sheet is as strong as ever," said Andrews. "We had a hefty
capital year in 2008 and used up reserves. It's important to maintain a
good relationship with our suppliers, regarding 30-day and 60-day
payables. This (line of credit) is a reasonable request for a company
this size."
Council agreed and approved a motion to that effect in open session
later in the meeting.
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