Salem Fiber covered operating costs in 2025 but relied on a $300,000 transfer; the 2027 budget has none

Salem's city-owned fiber internet utility took in slightly more than it spent on operations in fiscal 2025, the year that ended June 30, 2025, according to the city's audit. Interest on its bond and a $300,000 transfer from the city's capital improvement fund also shaped its results. ^[1]

The city's fiscal 2027 budget plans no such transfer. ^[2]

Fiscal 2025 results

The fiber fund reported $1,625,151 in operating revenue and $1,599,234 in operating expenses, including $90,600 in administrative services, for operating income of $25,917. ^[1]

With $747 in interest revenue and $127,821 in interest expense, the fund recorded a loss of $101,157 before contributions and transfers. A $300,000 transfer in brought its change in net position to $198,843, and it ended the year with total net position of $199,226. ^[1]

The city's budget report records the $300,000 on a revenue line titled "FIBER INFRASTRUCTURE-CI FUND." ^[2]

Cash

The fund generated $381,292 in net cash from operations in fiscal 2025. It spent $390,245 on capital assets, $249,543 on debt principal and $148,686 on interest. Its cash and cash equivalents fell $106,435 to $666,814, of which $261 was restricted. ^[1]

At June 30, 2025, the fund owed $5,055,000 on a 2020 fiber revenue bond, with $240,000 due within a year. ^[1]

The fiscal 2027 plan

The fiscal 2027 budget balances the fiber fund's revenue and expenditures at $2,331,245 each, including $2,236,575 in residential internet sales. The capital-fund transfer line shows no amount for fiscal 2026 or fiscal 2027. ^[2]

Planned spending includes $254,233 for new infrastructure, $283,977 for administrative services, $250,000 in principal and $131,913 in interest on the 2020 fiber bond, and $22,000 for an equipment lease or loan. The budget lists no depreciation for fiscal 2027, compared with $332,158 in fiscal 2025. ^[2]

In his June 3, 2026 budget presentation, Finance Director Jeff Nielson's slides listed "No more Bond Money – Using Rates to finish building" and a 2020 fiber bond payment of $381,913, according to the minutes, which say fiber operations continue infrastructure expansion "with no rate increases currently." ^[3]

The council voted 5-0 that night to approve the Salem Fiber starter tier speed increase, which doubles download speed to 500 Mbps at the existing $60 monthly price. ^[3]

At the April 15, 2026 council meeting, fiber director John Bowcut reported 2,497 fiber customers. ^[4]