Meeting Minutes of the Budget Hearing, and Bond Hearing and Public Benefit Hearing on the Broadband Improvement Project; Minutes of the Select Board’s Regular Meeting

 Location:  Town offices Date:  February 13, 2020
 Opened:    6:00 pm Adjourned:  9:08 pm

Select Board Members: Jay Jacobs, Kathy Scott, Andrea Hodson

Broadband Committee Representatives: Andrew Maneval and Doug Norman

From Consolidated Communications: Rob Koester, Mike Cannon and Jeff McIver

Members of the public: Mary Day Mordecai, Jacqueline Lyon, Ned Hulbert, Beth Healy, Barbara Watkins, Patrick Putnam, Richard Lavatori, Amy Roberts, Kelly Byam, Don Scott, Lisa Anderson, Scott Neary, Erik Anderson.

Bond Hearing / Public Benefit Hearing on Broadband
Broadband Committee members Andrew Maneval and Doug Norman led the Bond Hearing and Public Benefit Hearingregarding the Broadband Improvement project. This was the first of two such hearings to explain the proposed Bond issue, appearing as Article #3 on the Town Warrant for 2020 Town Meeting. Attendees received copies of the draft 2020 Warrant RevisedDraft Warrant Articles 2020 Town Meeting. They were informed that representatives from Consolidated Communications (CCI) were on hand to describe technological aspects of the project and to answer questions, and that Broadband Committee representatives would review the legal requirements related to bond issuance and review the proposed contract between the town and Consolidated. Questions were encouraged.

The Broadband Committee was clear that any contract negotiated between the parties is subject to approval of the Select Board as well as to approval by a two-thirds majority ballot vote at Town Meeting on March 10th. CCI also is negotiating with other towns, including Dublin, Walpole, Rindge and Westmoreland. Additional towns are close behind.

Using slides presented on the meeting room screen Bond Hearing – v0.1, Doug Norman described the proposed public-private partnership, under which Consolidated would build out a fiber optic network to which all town residents could be connected.  The town would own the infrastructure; the bond is the means of paying for it.  The bond amount of $896,375 as required by SB 170, would go toward providing fiber optic infrastructure to the unserved and underserved areas of town. CCI would cover the cost of building out the served areas. Served, unserved and underserved areas are FCC-related terms to define levels of internet speed to which customers have access. The calculated levels and mapping of the served, unserved and underserved areas of Harrisville derive from responses to the town’s RFI (Request for Information) from providers.

The purpose of the broadband project, and a requirement of the contract, is to offer Fiber-to-the-home (FTTH) to every residence and business that wants it. The technology offers vastly improved levels and service, up to 1 Gigabyte per second for both upload and download speeds. In response to a question about currently available speed levels, Mr. Norman, Mr. Maneval and CCI explained that the maximum attainable speed at this time (e.g., 25 Mbps or 100Mbps, or megabits per second), is not necessarily the speed experienced by the customer but the speed quoted by providers.

The total project cost is approximately $1.5 million. A 20-year Bond, in the amount of $896,375, would be backed by the town but paid off, entirely, by CCI, who is responsible for the bond principal and interest. The additional roughly $700,000 in infrastructure and related costs would come from CCI. Under the terms of the agreement, there will be no impact tax impact to residents or, again, cost to the town. The business model for this is the Chesterfield broadband project, implemented this past year following approval by its voters at their 2019 Town Meeting. As in Chesterfield, Harrisville’s subscribers to broadband service will pay a roughly $10 surcharge on their monthly bills, which CCI will use toward the principal and interest on the bond. Customers happy with their current service can keep it. There is no requirement or obligation to subscribe and the $10 surcharge would only be for customers subscribing to the new fiber network.

Depending on the distance beyond 150 feet of a particular home to the “splice point”, an additional installment fee could potentially apply; however, Consolidated noted it would do what it could to minimize any additional installment fee for homes very distant from the road, within limits imposed by regulatory tariffs.  A chart of sample rate plans showed prices ranging from $37.99 to $99.95, depending on the desired speeds.

Addressing the Public Benefit question and the statutory requirements (Public Benefit Public Hearing – draft 0.1), Mr. Maneval explained that, under SB170, in order for the bond to be issued, the municipality must establish that the public benefit of doing so is greater for the municipal interest than for the private entity; in this case, Consolidated. Toward that end, the Broadband Committee compiled a number of statistics, including the aggregate property value increase attributable to the installation of high speed internet in town. This, Mr. Maneval explained, was also the calculation and model used in Chesterfield, which came to fruition.  Mr. Norman showed the correlating slides to demonstrate the change in home values as a result of the change in available internet speeds. The committee also pointed out the value of town ownership of the fiber infrastructure, as well as the value of free service from Consolidated to town facilities. The aggregate property value increase of $3,945,786, the committee ascertains, shows that the gain is far more to the town and to property owners than to the revenue Consolidated will generate from the implementation of the project under the bond.

Asked about the advantage of having the town own the infrastructure, Mr. Maneval explained that if anything goes south with the partnership, if the town owns the fiber, the town can manage the consequences, options or opportunities. It was confirmed that the bond will be taxable as opposed to non-taxable, the difference being the interest rates charged, the ways in which it’s issued and the tax benefits or burdens that go along with it. The anticipated interest rate is 3%. Over the course of the buildout, the bond will be paid to CCI in 3 installments. The committee again noted there would be no financial burden on the town or taxpayers for 20 years, or the life of the bond, as a result of the project. The terms of the contract require bond payments in advance to the town from Consolidated. The committee also emphasized that this bond would not preclude the town from a bond for another purpose.

Asked the impact if CCI goes belly up, Mr. Maneval noted that, as a regulated company, CCI would have certain responsibilities. Also, given that the town would own the infrastructure, the town would be in a position, possibly with another provider, to complete the buildout and offer services. If nothing got built, the money would still be available from the bond. Consolidated emphasized the number of competitors in the industry who would be interested; Mr. Maneval added that the town received six proposals in response to the RFP. In addition, the legal agreement between CCI and the town provides for protections.

Consolidated representative Rob Koester then described the company’s business mission and their experience building rural broadband networks. He emphasized their focus on the customer experience and their awareness of customers’ concerns. He then explained the difference between copper and fiber, noting fiber is less susceptible to weather and is far more reliable, and easier to maintain and repair. Because they maintain a central office in town, they can lay fiber over their existing poles here, and buildout will be expedient, expecting to take roughly 12 months and beginning immediately upon approval. Mr. Koester explained the network design and which elements they would own and which the town would own. Regarding the final connection to the home, CCI noted that if the existing wire is underground without a conduit, this could involve an installation surcharge.  CCI assured attendees it has the necessary manpower and resources for implementation, even if all area towns approve a similar project. The company is encouraging early sign up to secure the best rates and fastest connection to the fiber network. The information shared by Consolidated will be available to the public prior to Town Meeting.

The broadband committee and Consolidated welcomed any additional questions from residents, and offered to remain available following the hearing and in the coming weeks. The Bond and Public Benefit Hearing then closed.

Select Board Regular Meeting
Broadband Committee representatives convened with the Select Board to further discuss the Public Benefit question. The board asked for time to consider all the available information, as well as to hear about additional quantifiable benefits, other than those related to increased property values relative to available internet speeds, prior to making a motion on the matter. The board is still prepared to bring the Broadband Warrant Article.

Mr. Maneval noted that, in addition to the property value benefits, at the completion of the project, for which the town will have paid no money, the town will own infrastructure worth at least $1.5 million. Mr. Maneval also pointed to the opportunity cost for property owners, such as HHI, who are challenged renting space without this service. The board thanked Mr. Maneval and Mr. Norman and the Broadband Committee for its continued effort on the project and noted it expected to confirm position on the Public Benefit question in the coming week.

Purchase of gravel pit
The SB next addressed proposed Warrant Article #4. The town has an opportunity to purchase the existing gravel operation on Jaquith Road, adjacent to the town-owned gravel pit, to access material for road maintenance in town, at substantial cost savings to the town. Neighborhood residents Lisa and Erik Anderson expressed grave concern about the noise level of such an operation and the proximity of residences in addition to theirs. They stated their concerns have been expressed for years and they don’t feel they’ve been heard. They emphasized that, at the time the Jaquith Road operation was established, residents were told 19,000 cubic feet would be all that would be excavated. The Andersons emphasized they don’t feel it’s appropriate for a residential neighborhood or that residents are being factored into the board’s decision.

Select Board members stated their goal is to establish a Capital Reserve Fund at this Town Meeting for management and reclamation plans for the site, so that funds can be set aside.  They emphasized they are considering the needs of the entire town, and the need to serve the greater good. The board also is considering future use for property. They emphasized that entrance and egress would be from Hancock Road and that the town and highway department would be committed to that except in the event of an emergency, when this isn’t possible.

Discussion ensued relative to a reclamation plan and options for noise mitigation through a berm or vegetative barriers. Ms. Anderson worries that any commitment this board makes could be neglected by future boards. She noted the lack of oversight for municipal versus private operations and that reclamation hasn’t happened on the existing, town-owned site. The board acknowledged these concerns and committed to having citizens be part of reclamation discussions. Following Ms. Anderson’s request that the SB modify the Warrant Article, Jay Jacobs noted that the town does not own the parcel yet. Attendee Ned Hulbert suggested making explicit that, if the article passes, the SB would deal with neighbors on the noise issue. The SB will consider the comments and suggestions.

Transportation Committee
Committee members revisited the Complete Streets resolution with the board and the goal of staying in touch on related issues, such as road maintenance plans. Barbara Watkins expressed concern, with regard to Mason Road rebuilding, that widening the current paved portion in any way will encourage faster driving speeds, as the existing width makes for safer pedestrian use. The SB will continue the dialogue with the Transportation Committee and Road Agent at a later date.

The board reviewed the remaining proposed Warrant Articles (see attached), revising language in the Conservation Commission. Separately, the board will confirm with the DRA whether the proposed appropriation for the highway grader needs to be non-lapsing.

As a final matter, the board confirmed that the proposed 2020 Operating Budget is $1,256,470, compared to the 2019 budget of $1,297,502.