Lacking clean, reliable water is a third world problem, right? Think again. New Hampshire could be facing significant water challenges if communities don’t start investing in aging infrastructure. New Hampshire communities will need to inject almost $3 billion during the next decade to modernize and maintain water, sewer and storm water infrastructure, according to findings by the NH Commission to Study Water Infrastructure Sustainability Funding.
While this infrastructure is often buried deep underground, the problems are starting to bubble to the surface. This winter, water main breaks temporarily shut off water in several communities, including Berlin, Boscawen, Auburn and Hopkinton. Hopkinton’s water main break occurred when a pipe installed in the 1980s shifted over time and rubbed against a rocky ledge. When all the bills come in, Steve Clough, Contoocook Village precinct superintendent of public works, estimates the repair will total about $25,000. Last November, a 1923 cast iron water main broke in Manchester, opening a giant sinkhole on Goffe Street that forced evacuations, cost the city $50,000 and drained 650,000 gallons of water.
Besides aging infrastructure and wear and tear, Seacoast communities face additional pressure due to mandates from the U.S. Environmental Protection Agency aimed at reducing the flow of nitrogen and other nutrients into the Great Bay estuary. In Exeter, for example, new regulations require the town to replace its wastewater treatment plant, a project that could cost $50 million.
So why is this infrastructure often neglected until its breaking point? “It’s our invisible infrastructure,” says Tim Fortier, communications and member services coordinator at the NH Municipal Association in Concord. While potholes prompt public complaints to fix roads, water and sewer lines are buried assets—out of sight and out of mind. A myriad of factors—aging pipes, pumps and plants; new federal requirements; climate change and a lack of funds to help municipalities upgrade infrastructure— are putting NH’s clean water at risk and reducing opportunities for economic development in the state. “It’s all about economic development. It’s all about our natural resources. It’s all about our quality of life,” Fortier says of the need to address the aging infrastructure issue.
Development Flows from Water
The ability to absorb demands for new sewer and water hook-ups can play a critical role in economic development. In the past, capacity limits forced towns like Conway and Allenstown to turn away new construction until those needs were addressed. “You don’t see much business activity if it’s not a sewered community. It needs this infrastructure,” notes Bill Brown, chairman of Wright-Pierce
in Portsmouth.
In Bow, taxpayers approved $12 million for a new water system several years ago on Route 3A, and have since benefitted by attracting major businesses, according to Town Manager David Stack. This includes Exel’s liquor distribution warehouse and a newly approved plan for Coastal Forest Products near River Road. The Exel project alone added almost $20 million to the tax base. The cost of Bow’s new water system was born by its taxpayers though water users also pay for their water use. Voters agreed to pay largely because of the economic development benefits it would bring, Stack says.
But Who Will Pay?
Where needs have been deferred, the cost of modernizing and expanding systems can seem prohibitive, especially when elected leaders don’t want to hit users or taxpayers with major increases. Jim O’Brien deals with both the concerns of local taxpayers as a Hopkinton selectman and broader environmental protection issues as the NH Nature Conservancy’s director of external affairs.
“Water is the one thing that binds everyone together. That’s something we all understand,” he says. Protecting wellheads and supporting sewer and storm water plans will be essential to protecting clean water sources for wildlife, tourism and economic development, he says.
But after decades of providing clean drinking water at little cost to users, it’s a challenge for both municipalities and the state to get users to pay more for maintenance. And asking tax payers to fund repairs and upgrades is a contentious question in a state where many people have private wells and septic systems.
In Exeter, which has 14,000 residents, 3,600 users pay water and sewer fees. Exeter’s traditional lagoon-style sewer treatment plant dates back to the 60s. Although upgraded in 1988, it would be inefficient to try to adapt it to remove nitrogen so a new treatment system is being considered. In addition, Exeter faces new requirements to manage storm water, which carry pollutants from septic systems, lawns and roadways into waters that ultimately flow into the Great Bay. If these expenses were distributed only among the roughly 3,600 users in Exeter, sewer fees would double, says John Gilbert, a former environmental engineer who serves on Exeter’s Water/Sewer Advisory Committee as well as having led the 2011-2012 NH Water Sustainability Commission that looked at needs statewide.
Communities vary in terms of what costs are born on the tax base and what costs are born by users. Many argue the state benefits from clean water and should contribute more to these expenses. “Access to capital is the fundamental issue,” says Gilbert. “Regional solutions are probably where things are going to go because of these capital costs.”
Seacoast communities have already been talking about a regional solution in an effort to spread the costs—but every potential solution comes with pluses and minuses, including issues involving pumping and piping wastewater from one community to a treatment plant in another. The one thing all the proposals have in common? They all cost tens if not hundreds of millions of dollars. And they come at a time when federal and state funding to help municipalities is hard to come by. Federal grants often depend on demographics. Towns may not qualify for federal dollars or they might receive grants for 20 to 30 percent of the total cost if they’re eligible for rural development funds. With residents paying the bulk, many projects face a tough sell at town meetings.
That’s a far cry from the funding environment in the 1970s when the federal government made grants available as part of that era’s Clean Water Act, which is why most current water and sewer treatment plants date back to the 1970s. At that time, communities were able to tap state and federal funding for 90 cents of every dollar they spent for these projects, according to Brown of Wright-Pierce.
In many communities, it’s been easy to defer investments until a problem arises because the water keeps flowing. For several reasons, including new environmental regulations, that’s not going to be possible for much longer. “We’re at a tipping point,” says Gilbert. Aging infrastructure, new regulations, the increased severity of storms, and population growth that adds roofs, parking lots and other impervious surfaces that overwhelm existing drainage systems are making it impossible for the existing infrastructure to keep up with the needs.
Brown says the key problem is that communities failed to build depreciation costs into the bills for their sewer and water users, deferring maintenance and allowing needs to grow without an adequate plan. The bulk of the projected water infrastructure costs facing the state in the next 10 years—about $1.7 billion—are related to wastewater.
“The community is the ultimate steward of these assets,” Brown says. It’s critical for them to ask questions and to get town leaders to conduct an assessment, set priorities and develop a long-term plan, he says. These issues are also an economic driver of his firm. Wright-Pierce has worked with over 50 municipalities on water and wastewater issues in NH. During the past 12 years, Brown says the firm has grown an average of 10 percent annually and now generates about $35 million in revenue a year.
Lack of State Investment
In her recent budget proposal, Gov. Maggie Hassan did not include money for new sewer or water projects, though the plan does cover state aid grants approved prior to a moratorium in 2008. The moratorium prevents new projects from receiving state aid grants. Prior to 2008, the state paid 20 to 30 percent of the cost for community water and sewer projects.
This affects communities like Conway, where in 2006 voters approved a $12 million project to pipe sewage from the village to a state-of-the-art plant in North Conway. However, the work will not be completed until later this year and the loans will come due—loans voters expected the state to help pay. But the project is being treated as new construction and no state money was budgeted. “They [Conway voters] never would have agreed to incur the debt if they thought the state was going to renege,” says Conway state Rep. Tom Buco.
On the Seacoast, a bill sponsored by Portsmouth Sen. Martha Fuller Clark this year would provide $400,000 in state funding to help develop a plan to meet the new EPA guidelines. That bill was tabled by the NH Senate on Feb. 12 but could be acted on at a later date. Another proposal for state funding came from a legislative study commission (on which Buco and Fuller-Clark served) that recommended the state set up a Water Trust Fund. Revenue would come from a charge on beverage containers but no legislation is currently before lawmakers.
Some federal funding sources still exist, including rural development funds and a state revolving loan fund that draws from federal allocations. Smaller Community Development Block Grants are available if at least 50 percent of the project’s benefit goes to low- to moderate-income residents. But these resources often fall short.
Staying Ahead of the Curve
Some communities are in a better position than others. Brown points to Manchester as an example of a city that was behind the eight ball but is catching up. The city plans to invest $270 million over 20 years to deal with aging systems and regulatory compliance. This includes $78 million in upgrades for the wastewater treatment plant, says Chief Engineer Fred McNeill as well as over $150 million more for projects including sewer expansion to protect Lake Massabesic, and sewer/storm water separation projects.
Between 2006 and 2010, the city “actually doubled our rates” because they were “non-sustaining” he says. The average family in Manchester pays $400 per year for sewer, McNeill notes, about $100 less than the state average, while water fees average about $190 annually. Raising rates and better planning have led to a better system, one that includes regular inspections and allows the city to accommodate new businesses, he says.
New Hampshire has 20 private water companies and five private sewer companies, including Manchester Water Works and Pennichuck Corporation, which are regulated by the state Public Utilities Commission and are less subject to local politics. “What we’ve tried to do is keep politics out of the business—that doesn’t happen in a lot of communities,” says Pennichuck Corporation CEO John Patenaude. The company, now owned by the city of Nashua after a decade of contentious negotiations and court proceedings, has provided water to the Nashua/Amherst area since 1860. It invests annually in infrastructure and is currently upgrading systems in Pittsfield and other southeastern communities it serves.
While the severity of challenges varies, it is clear addressing aging infrastructure, deferred maintenance, new regulations and pressures from population growth and climate change will mean getting clean water on demand will cost more than it used to. In general, Brown says most communities are undercharging because adequate asset depreciation has not been built into rates. The EPA estimat
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