Charlemont Municipal Fiber Network, Selectboard Status Report, May 9, 2020
Summary
Make-ready is in progress with National Grid. We selected the contractor for construction of our distribution network and received the next grant milestone payment of $185,500 from EOHED.
Verizon extended their estimated make-ready completion date for the town and we are now anticipating starting construction of the distribution network in April, 2021. We plan to complete four “path preparation” projects this summer. Three underground conduit projects are out to bid (Hawk Hill Road, Heath Stage Terrace, Warner Hill Road). We believe we finally have a resolution for the railroad crossing near Long Bridge via a public-way crossing at Route 8A. This will incur additional make-ready costs, but we believe they will be reimbursed by the state. Construction of the network equipment room in the basement of the town hall has resumed. So far, the project remains on budget and we are planning for town borrowing in FY21.
Schedule
National Grid’s make-ready work is in progress. Verizon has revised its estimated completion date to December 31, 2020. WG+E is now recommending that we plan for 60-90 days of inspection and mitigation of any unfinished make-ready work and thus the construction of the distribution network is estimated to start around April 1, 2021.
Based on this, we might be able to have some customers connected to our first fiber service area (FSA) by June 2021. Our distribution network will likely be built in five phases, each taking 2 to 3 months with some overlap. We still hope to wrap up construction by the end of 2021, but it is now looking likely that some parts of the town will not be done until early 2022.
Utility make-ready work
Make-ready work by National Grid is underway in Charlemont. This work is all done by the utilities, often using sub-contractors. Although there have been some hiccups along the way, we believe they are on schedule to complete all of their make-ready work by June.
Budget
The town received an initial advance of $438,000 from the last-mile contingency fund to cover a portion of our make-ready “overage”. We expect the state to reimburse the town for additional make-ready costs out of this fund, including much of the cost of the extra path-preparation construction projects (Hawk Hill Road, Heath Stage Terrace, West end of Tower Road, Warner Hill Road and additional costs incurred at the railroad crossing near Long Bridge). Based on this, the overall project remains on budget.
An expense tracking report is available here: https://drive.google.com/open?id=1CDAVNizxYPhPKaQ2ZqgssM6E4SMzi12N
Financing
Our current financing plan is to delay town borrowing until FY 2021. We anticipate that the bulk of the network distribution construction will occur in FY 2021. We received an anticipated grant disbursement of $185,000 from the EOHED based on completing the procurement for our distribution network contractor.
We anticipate we will begin significant town borrowing in Fiscal 2021 to finance the path-preparation projects and the beginning of the construction of the distribution network and construction of drops to some homes and businesses. We are engaged with Unibank to evaluate different financing strategies. We may do a smaller borrowing in summer, 2021 to cover the path preparation projects and other anticipated expenses prior to kickoff of the distribution network construction and borrow the remainder when construction of the distribution network is imminent.
We are closely monitoring the balance in our construction account to ensure that we maintain a positive balance at the end of the fiscal year so as to not affect the town’s tax recap. If necessary, we will do a small amount of short-term borrowing (under $10,000) to ensure the construction account closes the year with a positive balance.
A spreadsheet showing our current cash flow projections for FY21 is available here: https://drive.google.com/open?id=1OjnEwRtsgU3LwPHGlcRRBjYVf3WnEqE3
Distribution Network
We completed procurement for the construction of the distribution network and selected TriWire as the distribution network contractor. The bid was within 4% of our projected cost and within our contingency range. Construction on the distribution network will begin as soon as the make-ready is completed.
Path Preparation Projects
Most of the preparation for the distribution network consists of make-ready work by the utilities. There are several places in town, however, where we need to do path-preparation construction projects to be ready to install the distribution network. We plan to complete the following path-preparation projects this summer. The first three (the underground conduit projects) are currently out to bid, with bids due on May 22.
- Hawk Hill Road / Deer Run Lane
A half-mile section of Hawk Hill Road currently has underground utilities. Procurement is in progress for construction of underground distribution conduit.
2. Heath Stage Terrace
Heath Stage Terrace has underground utilities. Procurement is in progress for construction of underground distribution conduit.
3. Warner Hill Road
We are planning to install underground conduit on a half-mile section of Warner Hill Road to connect the utilities on the lower part of the road to the utility poles at the top of the hill. This project is out for procurement.
4. Tower Road (west)
We are planning to install 8 town-owned utility poles along the west end of Tower Road to connect existing utility lines and avoid an expensive railroad crossing. All designs and permitting are complete. We are planning to do this work through the inter-governmental agreement with WG+E.
5. Long Bridge RR Crossing
After investigating other options, we had decided to go with a non-public way crossing and pay lease fees of $1700 per year. We subsequently learned, however, that additional insurance requirements would raise the cost to well over $10,000 per year.
In consultation with EOHED, we determined that it would be more cost effective to pay an additional $40,000 to $50,000 in estimated make-ready costs to the utilities to achieve a crossing at the public way at Route 8A south of Long Bridge. We engaged Osmose (an engineering firm) to help develop a plan which has now been approved by National Grid and add to our make-ready work requests. We believe this additional make-ready work will be reimbursed by the state out of the last-mile contingency fund. There will be no ongoing annual costs for the railroad crossing at the public way, other than the normal utility pole lease fees.
Other Ongoing Projects
- Town Hall Exterior
Danek Excavating completed the exterior conduit and vault installation last fall. They will complete remaining site restoration work this spring, including repair of potholes in the driveway where the conduit crosses, repairing the asphalt on the walk in front of the town hall and reseeding and regrading the lawn around the vault.
2. Town Hall Interior
Construction on the network equipment room in the basement of the town hall is in progress. There have been delays due to COVID-19, but the contractor has recently been able to start work again on installation of the air conditioning system.
3. West Hawley Road
There is one house on West Hawley Road where the utilities reach the house via a non-public-way railroad crossing. We are currently evaluating alternative solutions for this house, including a potential wireless extension of the distribution network.
4. Neighboring town agreement with Rowe
We have reached verbal consensus with Rowe to provide access to cabling in Rowe to reach the upper end of Maxwell Road from Legate Hill Road via Tatro Road in Rowe. In exchange, Rowe is requesting access to cabling in Charlemont from the border on Zoar Road to the Charlemont town hall to be used by Rowe for redundant backhaul. Our town attorney is working on a draft agreement for both towns to sign.
5. Ledge Lane
National Grid installed the new conduit along a 400′ span off of Ledge Lane. As agreed at the pole hearing, we procured materials for fiber conduit and National Grid installed this conduit alongside theirs as part of the project at no cost to the town.
Network Drop Policy
The broadband committee has released a draft policy document describing the process and costs for homes and businesses to connect to the network and the subsidies to be provided by the town to encourage a high connection rate. This has been forwarded to the select board and we are also soliciting feedback from other individuals in town. We will also be preparing simplified summaries of the full policy.
The state announced that there will also be additional state funding provided to towns in the EOHED municipal network program to subsidize network drops. The state will offer towns additional funding of $500 per premises connected during network construction for up to 70% of the premises in each town. This could provide additional state funding of up to $240,000 for Charlemont, depending on our take rate.
We have received an updated Premise Planning Report (PPR) from WG+E with the new Triwire pricing. We have not had a chance to study it in detail, but the pricing changes overall appear to be small and we believe they will not impact the overall project budget.
Operational Accounting
We will hopefully be commencing operations in late FY21. After much due diligence, we are recommending that the town adopt Enterprise Fund accounting for the fiber network. The recommendation report is available here: https://drive.google.com/open?id=1zVAgDUzr7weYUAJgb4F5Kmr-A9ukEqHd
If we proceed with Enterprise Fund accounting, we will want a warrant article on the annual town meeting warrant to create the enterprise fund and a projected budget for FY21. We are finalizing drafts of both of these.
Charlemont Connect website
We continue to communicate project status from our web site www.charlemontconnect.org, dedicated to the fiber network project. We are posting to this website regularly to communicate status and engage with residents. There is also a mailing list signup for email notifications.
Glossary
Aerial License Agreement. The master contracts between the town and the utilities (separate contracts for National Grid and Verizon) covering the terms for leasing space on the utility poles.
Customer Connections / Drops. Cabling from the nearest distribution network tap (MST) to a network interface box on the outside of the house or building, then inside to another small unit (ONT) which is connected to a wireless (or optionally non-wireless) router that provides internet service. A “cold drop” includes just the cabling to the outside of the house without any inside wiring.
Distribution Network. The main fiber optic lines running from the network equipment room in the basement of the town hall and along most of the roads in town. The distribution network terminates at “taps” (called MSTs) located on utility poles near each serviceable house or structure.
ISP / Internet Service Provider. A company that provides internet service on a network and performs functions like billing and customer support. The town will contract with a third-party internet service provider to provide service to residents using the town network.
Make-Ready Work. This is work to prepare a “path” for the distribution network to run throughout the town. Most of this work is done by the utilities (National Grid and Verizon) to make space on existing utility poles. In some cases, the town may perform make-ready work by installing new underground conduit (e.g. near the town hall or on Hawk Hill Road) or new utility poles (e.g. on the west end of Tower Road) to create a cost-effective path for the distribution network.
MLP / Municipal Lighting Plant. A legal entity created by the town to allow the town to supply internet service to residents. It is called a lighting plant because the applicable state laws were originally written to allow towns to create local electric utilities. The MLP functions much like a town department.
Utility Pole Lease. The town will lease 12 inches of space on most of the utility poles in town to allow us to run the fiber network throughout the town. We will pay an annual lease fee per pole.