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State fails to share sewer costs

Last modified: 12/19/2011 12:00:00 AM
As the state moves into its fourth year without making good on promised grants, towns and cities are still waiting to be reimbursed for a backlog of sewer and water projects they undertook with the understanding that they would get some of their money back.

Dating to the 1970s, a state aid program has covered 20 percent of the cost of upgrades and construction for local sewer and water system projects. In November 2008, due to revenue shortfalls, the state began deferring payment on its portion.

By May of this year, there were 77 local sewer projects waiting for a combined $30.2 million in unpaid grant money from the state. About that time, a bill aimed at directing new revenue or appropriations to pay for the projects passed the Senate with bipartisan support but failed in the House.

Paul Heirtzler, an administrator in the state wastewater engineering bureau, said the state's lack of payment has led to empty assurances at town meetings in recent years. Sewer and water projects are often sold to voters by stressing that the town only raises the full cost of the project up front before the state pays for a fifth of the project upon its completion.

But until the Legislature approves new money for the grants, that isn't happening.

'Part of the salesmanship is, 'Okay, we need to raise $10 million to pay for this project but it's only going to cost us $8 million in the end,' Heirtzler said. 'We have got a lot of complaints from municipal officials.'

In Concord, city officials have gone forward with three projects on the unpaid grant list, including upgrades to the Hall Street and Penacook wastewater treatment plants. The city has yet to receive annual payments toward $1.5 million in state aid.

'That work has all been done,' said Chip Chesley, Concord's director of general services. 'Now we're in a queue.'

Due to the long-term nature of the city's project loans, the annual payments from the state are far less than the total grant amount. Still, since 2008, the lack of state aid has left Concord to pay more than $100,000 a year toward the projects that it would not have otherwise funded.

'We made the investment and, right now, having not received the reimbursement, our ratepayers are paying the full brunt of that,' Chesley said.

Chesley said communities cannot put public safety at risk by holding off on sewer and water improvements until new money is available at the state level.

'The needs are still there,' he said.

In Manchester, city officials are awaiting state grants for 23 sewer projects.

'Like most communities, we're facing ailing and failing infrastructure,' said Fred McNeill, chief engineer in Manchester's environmental protection division. 'Obviously the funding is a key component of that, but we still have to move on.'

McNeill said most of Manchester's projects have also been completed.

'The party line at (the state Department of Environmental Services) is they're hoping to get funding,' he said. 'If we get reimbursed, that's great. If not, we'll address it at that time.'

Heirtzler said state aid for local sewer projects started in the 1970s, when the federal government began reimbursing communities for about three-quarters of the cost of constructing treatment plants. The state also chipped in 20 percent as part of the program, he said.

'This was at a time when no one essentially had treatment plants, sewage was just going in the river,' he said.

The state continued to help fund improvement projects at treatment plants up until it began delaying payment in 2008, he said. Heirtzler said the state's commitment to aid cities and towns financially is based on the fact that water quality is not just a local issue.

'Any improvement in what Concord does improves the water quality in communities downstream,' he said.

The two-year budget passed by the Legislature in June did not include money to pay for the grants, and there's no indication funding will become available soon.

In his budget address in February, Gov. John Lynch said 'we will continue to pay for wastewater, water treatment and solid waste projects already enrolled in the state aid program, but we will not add additional projects.' However, Heirtzler said the state aid program has remained in statute, and there are sewer projects being completed now and that will be added to the list.

'Eligible projects are still applying for a state aid grant even knowing no money is available for it this year,' he said.

So far, Heirtzler said legislation addressing the issue has mostly been concerned with the order of the list, which starts with grant applications submitted as far back as July 2008. Towns and cities at the end of the list want any additional money that becomes available to be spread evenly across all the projects, he said, while the communities at the front of the line want the money to be divvied out on a first-come, first-served basis.

Even if the date or method of payment is unknown, at some point state lawmakers will have to pay off the grants, Heirtzler said.

'The Legislature will honor these commitments,' he said.

(Matthew Spolar can be reached at 369-3309 or mspolar@cmonitor.com.)


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