Article 7 of the Warrant seems innocent but the $8.6 million is additional future property taxes to subsidize Longmeadow Fiber. Interest on the debt for twenty years approximates $4.6 million, making the property tax subsidy $13.2 million.
Surprised? The Fiber Task Force in 2024 said projected revenue would cover debt service. The Select Board did not mention a property tax subsidy at the November 2024 Town Meeting when the last fiber Article was passed.
The Finance Committee (“FC”) voted on April 6, to not recommend Article #7 by 6-1 due to major concerns and unanswered questions. The FC is six financial professionals with a fiduciary and fiscal role for the town.
Vote was after over an hour with the Select Board (“SB”) and town management and an additional two hours with the Finance Manager.
Most significant FC findings – page #20 of the Warrant:
It was unclear who will bear the risk of the debt, the taxpayer, or some other entity.
The town will be voluntarily violating its debt policy without sufficient or emergency justification which may impact future borrowing.
At the time of the finance committee vote the financial model had not been fully vetted and finalized, this should have been a requirement for moving the warrant forward.
Bonds will be issued carrying the statutory backing of property taxes to cover shortfalls in revenue to service the additional $17.9 million of bonds to be issued.
In its Sept. 5, 2025, debt rating Standard & Poor’s expressed concern that Longmeadow’s projected debt metrics will fall well below those of comparably rated peers and could become increasingly so.
S&P did not consider the $17.9 million of fiber debt that is completely dependent on subscribers and riskier than property taxes or water and sewer revenues of the town.
The financial model and its assumptions are the basis of the fiber project and have significantly changed three times in the past twelve weeks which has raised concerns with the Finance Committee.
Initial model, $30 million of debt in December. SB was told the financing was against Mass State Laws and verified by the Finance Manager on March 23.
Two additional models, $27 million and $8.6 million supported by property taxes for the initial phase.
- Remove the property tax subsidy, make fiber supported by subscribers as originally planned and other communities are doing.
- Assess the impact of $27 million of fiber debt on debt ratings, a potential downgrade and increased interest expenses for all future borrowings.
- Consider debt capacity and ability for citizens to afford $27 million of fiber debt, $96 million of school debt and a $225 million four-year capital budget.
Citizens are stressed financially given current economic conditions, especially the 35% of residents that are 65 and over, many living on fixed incomes.
Vote no on Article 7 – the town cannot afford additional debt, financial risk and burden on taxpayers.
The Finance Committee has significant concerns and issues.
Tom Shea
Longmeadow
