We’ve been told that the purpose of the Sustainability Worksheet is for towns to be aware of the cost of operating a network once it’s built and consider whether it is sustainable. We’ve put in numbers, some based on Leverett’s model and some MBI recommendations. WiredWest is working on numbers for operating a regional network which should be much more favorable. There is a back and forth process with your MBI program manager. We found our PM to be working constructively with us to get us through the process. Town’s will not be held to the numbers put on the worksheet. MBI just wants to know that towns have done due diligence.
Double check your town data. We found we had to make several corrections for number of premises, number of units (if there are multiple units in some premises), number of road miles, etc.
A big cost is the depreciation. Due to MBI’s requirement that each town individually own it’s network, each town will be responsible for both it’s debt service and depreciation reserve payments. The sustainability worksheet as of the time Rowe received it was misleading in that it came preloaded with percentages to depreciate the fiber over 20 years and equipment over 8 years. First, a fiber network lasts much longer than that. There are 50 year old networks still working. Equipment probably also will last longer than 8 years. But in fact, the real cost here is the 3% of the value of replaceable assets that DPU requires to be paid into a capital fund. Towns can appeal to DPU to put different amounts in, more or less. Since loans would be paid off in 20 years, if the network had to be rebuilt, towns could borrow money again. Charlemont has the idea of asking to put no money into a capital fund and instead, put money into a contingency reserve that could be used for unexpected major repairs. Rowe was able to put 0% here because we plan to include depreciation in our Capital Stabilization Plan paid for out of taxes.
Keep in mind, you’re just trying to show that you’ve got a reasonable plan. WiredWest will be coming out with numbers soon reflecting the operating costs for a regional network that will be much better than what individual towns can do. Although towns do have to cover their debt service and perhaps depreciation reserve payments themselves, the WiredWest plan has an option for towns to add a surcharge to WiredWest’s subscription fee that towns can use toward those costs if they don’t want taxpayers to bear that burden.
Here is a sample Sustainability Worksheet from Rowe.