SOUTH HADLEY — Voters will decide whether to support construction of a $36.5 million South Hadley Electric Lighting Department facility at the town election on April 14, but the outcome of the nonbinding referendum will ultimately not derail the project.
At a Know Your Town public forum on Thursday night, March 12, SHELD General Manager Sean Fitzgerald and Municipal Light Board Chair John Hine emphasized the risk of keeping the town’s electrical utility in a 100-year flood zone at 85 Main St., a risk that only gets more expensive as time goes on. The board is proposing constructing its new headquarters at a site on Willimansett Street near a Big Y supermarket.
Speakers at the forum appreciated SHELD’s low rates and need for a new building, but criticized the choice to propose a building while the town is in the middle of a budget crisis. On the same ballot as the nonbinding question for the SHELD building, residents will vote on a potential $9 million or $11 million Proposition 2½ override to fund town services for the next five years.
Hine acknowledges the building proposal — and the rate increase to pay for it — comes during a very precarious fiscal time in town. However, he worries that waiting on the project will only exacerbate costs at a future date. In 2012, SHELD proposed a similar building for $12 million. The construction and soft costs have increased threefold in the last 14 years.
“It’s never a good time. This is a particularly difficult time with all the things going on in town,” Hine said. “But I think it’s just pennywise, pound foolish not to try and get this done now, so we’re not avoiding significantly more costs in the future.”
Ratepayers would see the biggest impact on their costs in the first 10 years of the 30-year loan. Based on an average electricity use of 700 kWh, the Municipal Light Board estimates an increase of $13.89 in monthly bills. The total bill for 750 kWh with this increase would come to $147.21 a month, which is still below the average rate in the commonwealth at $153.16.
“I’ve lived in town for 30 years. For those last 30 years, I’ve paid very low rates,” resident Susan Newton said. “Thirty years later, it’s time for me to kick in.”
SHELD’s current building has a deteriorating roof, thermal comfort problems and a crumbling parking lot, in addition to being located in a flood zone.
“Our warehouse is where we store all of the equipment to serve you,” Fitzgerald said. “Everything we’re using to build out your distribution network in a storm is sitting there in 100-year flood zone. And if that thing gets flooded and we can’t get to it for two weeks, people die.”
Many speakers pointed out that controls on the Connecticut River have vastly improved since the last time the building flooded in 1936. However, Ira Brezinsky said the flood waters can come through the storm drains in Buttery Brook Park. Last year, Fitzgerald saw water approach within 15 feet of the building.
“Pulling SHELD out of the [South Hadley] Falls is basically the fall of the Falls,” resident Kevin Hennessey said.
The board considered three options for a new facility: renovating the old Mohawk paper building on Gaylord Street, and constructing a one- or two-story facility at the Willimansett Street site.
The Mohawk building was by far the most expensive at $42 million, and Hine said unknown environmental factors could drive the cost even higher. “We looked at that and said, it’s really not a wise direction to go in, even though we were really excited when we found out the building was on the market,” he said. “All the risks and questions associated with that property really didn’t make it (feasible).”
Of the ideas for the Willimansett site, the two-story option came in higher than the one-story building by over $1 million, costing $38 million. Ultimately, the board approved plans for the one-story building at its January meeting.
Plans for the facility call for a truck bay, a warehouse, covered storage, and administration offices for electric and broadband internet operations. Within the administration building are meeting rooms, offices and workspaces for all departments, plus space for future growth.
The need for space is ever-present, Hine said. SHELD has outgrown both the building in South Hadley Falls and a rented facility on New Ludlow Road. Fiberspring is expanding quickly, Hine said. In May, Longmeadow will vote on allocating $25 million to $27 million for a broadband build out. SHELD will head this project.
“The government and AT&T just announced billions of dollars of investment in fiber. Fiber is where the future is,” Fitzgerald said. “Municipal light plants are popping up everywhere because they’re trying to do what you have.”
SHELD receives 54% of the market share value of Fiberspring operations. The profit subsidizes the electric side of the business.
When asked whether the Municipal Light Board would consider the results of the nonbinding referendum, Hine said he was unsure of the weight the vote holds over the final decision. The board did not opt to put the referendum on the ballot, and the members have gone through a long process to make the best decision for SHELD’s reliability.
“I noticed in the meeting minutes from December that you, Mr. Hine, commented that this was a done deal,” resident Cathy Allen said. “There’s a nonbinding referendum that if people vote on it, it’s not going to matter. It’s pretty obvious that the municipal board has already made their mind up.”
Despite the vote in April, the project continues through the approval process for 2027 completion. The Municipal Light Board has submitted a notice of intent to the Conservation Commission and SHELD will appear before the Planning Board in April.