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State aid for municipal projects reinstated through 2015

Four dozen towns and cities across New Hampshire will begin receiving state aid next year for drinking water, sewage and landfill closure projects for which they had been approved but had yet to be paid because of budget constraints.

The funding, which was suspended in late 2008, has been reinstated in the new state budget. It offsets 20 percent of eligible project costs and is administered through loan reimbursement, meaning the state compensates 20 percent of a municipality’s annual payment on loans used for each completed project. If a town or city paid cash, the state reimburses them either outright or over five years, depending on the grant amount – anything under $50,000 is paid in one lump sum.

The grant program has been in place for decades but was suspended in the midst of the recession. The freeze applied only to new applications; any project approved for funding before November 2008 continued to receive yearly payments from the state.

Since then more than 127 grant requests have been accepted and placed on a waiting list by the Department of Environmental Services, which administers the funding. They represent 103 wastewater projects, 16 drinking water projects and eight landfill projects, and range in value from a few thousand dollars to a couple million dollars.

Local officials have been lobbying for years for the money to be reinstated, arguing that it is unfair for towns to have to shoulder the projects’ full costs, said Paul Heirtzler, an administrator with the DES.

“What’s happened is, without the grants, communities are footing 100 percent of costs. . . . and ratepayers are paying more, which has led to some real sticker shock,” Heirtzler said. “It’s been quietly building that the communities were not very happy.”

Some have delayed starting new projects because of the lack of aid.

“That 20 percent can make or break a project,” said Dana Clement, superintendent of the Allenstown sewer department.

Clement said Friday he knew a handful of projects in Allenstown had been placed on the waiting list, but he hadn’t yet learned of the decision to reinstate the funding. The largest of the requests, about $45,000, is for a sewer project he said they completed about a decade ago.

“It’s been a long time coming,” he said of the aid.

Concord has five projects on the list, including one that involved modifications to the Penacook Wastewater Treatment Facility and was completed about five years ago. Philip Bilodeau, the city’s deputy director of the general services department, said the city has been paying off the loan for that project and others for several years now. He welcomed the decision to reinstate funding and said he hoped to see the state “meet its obligation” beyond just the next two years.

In her proposed budget, Gov. Maggie Hassan allocated about $3 million to begin funding waiting-list projects, according to the New Hampshire Fiscal Policy Institute. The House added $1.9 million to that and the Senate tacked on an additional $4.5 million.

There’s no guarantee the program will be funded past 2015, Heirtzler said, but there’s a strong likelihood that it will be given that the economy appears to be on the mend. If it does continue, the state will make annual payments through the life of the loans and any additional years to compensate for those missed during the suspension.

The budget funds are to be used for the projects on the waiting list, though others submitted shortly after Dec. 31 of last year will be considered if there is extra cash. Heirtzler noted that DES is not allowed to approve new projects or start a new waiting list through the end of this biennium, which started July 1, but it can accept applications and factor them into its next budget request.

(Jeremy Blackman can be reached at 369-3319, or on Twitter @JBlackmanCM.)

Legacy Comments1

""arguing that it is unfair for towns to have to shoulder the projects’ full costs"" - But it is fair if people from other towns pay for these towns. I would say it is even more unfair to the person that already pays for their own septic system and private well be forced to pay higher taxes just so these towns that have town sewage and water pay less. If those towns want the service then pay for it or don't do it.

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