Member communities press state for local control of wastewater management

LACONIA — Operations for the Winnipesaukee River Basin Program, a state-owned sewer system serving portions of the greater Lakes Region, could soon be controlled locally. The 10-member advisory board of member communities also includes the New Hampshire Department of Administrative Services, which controls the Laconia State School property’s interest in the program. 

Basically, it’s a state agency operating a wastewater treatment system, and the total cost of operating it rests upon the shoulders of member communities Belmont, Center Harbor, Franklin, Gilford, Laconia, Meredith, Moultonborough, Northfield, Sanbornton and Tilton. There’s no true "state money" going into the budget. It’s the only state-owned regional municipal waste water treatment program in the country.

“The infrastructure is approximately 50 years old, and elements of it, parts of that plant — whether it’s the plant itself or the underground infrastructure — is getting to the point where it needs major rehabilitation,” or needs replacement, Wes Anderson, advisory board chair and project manager for Laconia’s Planning Department said Jan. 22, at a meeting at the Belknap Mill.

“We remain committed to working collaboratively with the [New Hampshire] Department of Environmental Services and the program to ensure safe and effective waste management. However, without prompt action and ongoing management deficiencies, it poses an unacceptable financial risk to the member communities,” he said.

Member communities appealed to their legislators to file bills, and drafted a letter of concern, about reducing the percentage of funds required by state law to remain in the program’s replacement fund from 5% to 2%, and to create a committee to study how best to oversee the program.

“We were one of the communities that signed on to sending it to the state, and I think it was great to see us take the lead on that, and I think it made a difference,” City Manager Kirk Beattie said during a council meeting on Jan. 26.

If nothing changes, member communities will be faced with increases to payments into the replacement fund, meant to cover emergency capital expenditures, and backfilled proportionally to an amount equal to 5% of the total replacement value of the entire system.

Ultimately, no changes would mean a significantly increased burden to ratepayers.

“The replacement fund is essentially meant to be an emergency fund, more or less,” Ted Diers, NHDES Water Division assistant director, said. “It is a fund that, over time, the way it was originally created, was to have a pot of dollars that could be available on short-order. That we can immediately access, don’t have to go back to the budget, don’t have to go through other rigamarole to be able to grab these dollars that have already been paid by the communities.”

If there’s a $1 million break in a line, for example, they’d pay for the fix with replacement fund monies and then, over 10 years, those dollars would be replaced by that community. 

“It’s essentially a 10-year, no-interest loan back to the community in which this occurred,” Diers said.  

Originally, when creating state law to fund the program, they created the replacement fund by calculating the value of the entire facility and assessing the 5% to replace the system over 10 years. Five years ago, that value was pegged at about $150 million — today, it’s about $360 million.

“Fast-forward 50 years to where we are today, we went through a valuation, and you might imagine, because of construction inflation and lots of other things going on, the value of the facility has increased dramatically,” Diers said.

Because of the value increase, and the statute directs a 5% assessment, the value of that assessment increased significantly, and proportionately.

“That then got distributed to the communities which quadrupled their replacement fund costs,” Diers said. “Never was our intent to do that, but that’s what the statue directs us to do. This bill will help to correct that, and then eventually we have to have a conversation about what is maybe a better way of actually funding that replacement fund. But for now, simply changing that percentage, which is what the legislation will be that’s proposed right now, will get it back in line, so that the communities are not paying some extraordinary amount of money, well-beyond what is needed for the actual purpose of the fund.”

The replacement fund is one of four member communities pay into for the program, but is the primary point of concern. 

The meeting at the Belknap Mill in downtown Laconia, Jan. 22, brought together those who sit on the advisory committee, professionals from area public works, and water and sewer departments, and leadership from state Environmental Services, including Commissioner Robert Scott, who signaled agreement with the advisory board. 

“The monies that go into these projects are ratepayer money, with very few exceptions, it’s not state money, it’s not appropriations, it’s ratepayer money,” Scott said. “Being the operator of the plant, we’re responsible for making sure that’s executed in a proper fashion. We’ve heard the advisory committee, and we take their comments seriously and, bluntly, we agree with their thoughts.” 

“I thought it went very well,” Beattie told the council Jan. 26. “I think they’ve identified that there’s some operational corrections that need to be made as well as, most likely, some financial contribution changes that need to be made. I think that both our advisory board, I think, did a great job presenting their concerns and [New Hampshire Department of Environmental Services] was very receptive to it.”