Will my taxes go up to pay for this fiber-optic network?
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Sharon sells $12.5 million of 40-year bonds at 2.5% interest rate, amortizing the debt over 40 years. No increase in $89/month household subscription fee for 40 years. No growth in the Grand List for 40 years. Operating expenses flat in years 1-5 and then rise at 1% each year for years 6-40. Percentage of homes subscribing (“take rate”) assumed: 0% - year one; 10% - year two (midway through construction); 20% - year three (construction ends at the end of this period); 22% - year four; 25% - year five; 28% - year six; 30% - year seven; 33% - year eight; 35% - year nine; 38% - year 10; 40% - year 11; 43% - year 12; 45% - year 13; stays level at 45% for remainder of 40-year period.
The chart to the left is a financial model that shows what might happen to the property tax rate in Sharon (calculated in “mills,” or $1 for every $1,000 of property) if the full cost of financing the network construction were added to Sharon’s annual budget. Of course, the Board of Finance may choose to reduce other expenses or delay a separate capital project to offset this expense and the tax rate might not increase at all. There is also the possibility that federal or state grants might cover some of the costs. But, if all the network’s capital costs were added to Sharon’s annual budget, the model projects an increase in the mill rate of between .3 and .7 of a mill in various years. That means, if you own property assessed at, say, $200,000, instead of paying $2,900 in taxes at the current mill rate of 14.5, your tax bill could rise by as much as $140 for an annual total of $3,040.
How would the money be spent to construct the network?
Click on the image to open the spreadsheet.
You can review Sertex Broadband Solutions’ financial overview by clicking on the image to the left. The first page summarizes the major costs and scale of the project. Note that there are several spreadsheets nested in this workbook. For even more granular details, click on each thumbnail image in the panel below. These cost projections are not yet fixed and could change depending on design decisions that would be made if the network is actually constructed.
Additional Financial Information
Global Connectivity: Sharon's network connects to the global internet via a "middle mile" to Boston and NYC.
Network Equipment: Electronic components and access subscriptions that run the whole Sharon system.
Subscriber Equipment: Components that connect each home to the Sharon network.
Network Operator: Annual charges to operate the internet service and maintain the network.
Service Options: We are only planning to offer one service, but we could offer speed tiers.