Westfield Gas & Electric staff discussed the East Longmeadow fiber project with the Town Council at its meeting on Aug. 11.
Photo credit: ELCAT01028
EAST LONGMEADOW — East Longmeadow is making its final moves before the build out of a townwide fiber network with the Town Council’s unanimous approval of a $43.5 million appropriation to cover the project.
The Town Council heard project updates from members of Westfield Gas & Electric, the town’s fiber partner, before the appropriation vote at its meeting on Aug. 11.
The town’s website estimates a monthly fee of $80-$90 for residents interested in the town-owned network. Residents are not required to switch to fiber.
Charter Communications operates Spectrum — the broadband, cable and phone provider in East Longmeadow. Massachusetts Charter Communications Director of Government Affairs Nancy Clark said during public comment that she has a “direct interest” in the council’s discussion and vote because Spectrum is a competitor of the proposed network.
“I’m not asking the council to reject the project,” Clark said. “I’m asking the council to slow down on the $43.5 million appropriation, specifically for reasons that would apply regardless to who is raising them.”
Clark said no competing proposals were evaluated outside of the contract with Westfield Gas & Electric, and that she hasn’t seen financial reviews, a third-party feasibility study or an outside audit of take rate assumptions. She questioned if voters were aware of this information as well.
She said, “if subscriber revenues don’t meet projections, the council and your constituents should understand exactly where the additional money would come from and whether taxpayers, the town’s general fund, future borrowing or municipal broadband customers could ultimately be affected.”
Clark also compared the project to Longmeadow’s proposed fiber network project, stating that voters rejected it in large part because they felt the financial model hadn’t been fully vetted.
She recommended that the council refer the estimated $43.5 million to the Capital Planning Committee and the Financial Oversight Committee to get their input before taking a final vote to get the town familiar with the proposal.
Westfield Gas & Electric Key Account Sales Manager Andrew Short said the company is looking at project start dates for January 2027 and that payments would be staggered through construction.
Town Accountant Kimberly Collins said the $43.5 million is made up of estimated borrowing interest, $4 million in free cash and $31 million for the project as a whole. She said the town decided the “best way to borrow” is over a 10-year span and that the costs from years one to three would not affect taxpayers.
“If we borrow it in tranches over a three year period, we can borrow a third of it, a third of it, a third of it,” Collins said. “We can roll those [bond anticipation notes] every year for 10 years, and then pay the interest and the principal pay down from, in the first year you’re paying it from free cash and the second year, you’re paying it from the interest that you’ve capitalized through borrowing and the third year, you start to use revenue. From years 4-10, you’re using revenue paid down all of those bans, over the entire project.”
Councilor Jim Leydon asked if there were any benefits to the project that weren’t being talked about.
Westfield Gas & Electric General Manager Tom Flaherty said that fiber has successful take-rates that help pay off the project in other communities, and that East Longmeadow would be able to provide a positive service to the community.
“If you look at much of the negativity that National Grid or Eversource is getting, both on the natural gas side or the electric side with extremely high costs, that’s not what’s happening here,” Flaherty said. “You’re gonna come in with a competitive price, you’re gonna have a much better product that has a high upside and high downside of speeds … We’re starting off as a 1-gigabit system, but you have the capability to build off of that to have a greater product as the years go on.”
The equipment’s lifespan is roughly 25 years, but Telecom Superintendent Jamie Cincotta said Westfield’s fiber network, built in 1996, has “no issues at all.”
Council President Ralph Page said he wanted to be assured that what gets built is thought ahead and usable in 40 years since 10 years of borrowing for 15 years of use “is not a heck of a lot of time.” Town Manager Tom Christensen said that will be the future of the plan and is optimistic everything will work out well.
“We will have to, just like water, sewer and stormwater, we’ll have to have some sort of asset management plan that luckily will have a revenue stream that can do that,” Christensen said. “After that 10 years when we’re all paid up, that $3.5 million, assuming the take rate, goes into the MLP … We’ll be able to keep up with the maintenance of it just in the MLP and not touch the general fund.”
Leydon added that the network would be owned by East Longmeadow and the town can make its own decisions on investments. Christensen said that resident payments for their internet would be going right back into the town.
The council also unanimously approved to enter an intergovernmental agreement with Westfield Gas & Electric for a contract term exceeding three years.
Information and updates on East Longmeadow fiber can be found at eastlongmeadowma.gov/1055/Municipal-Light-Plant.
