Warrant Article Language & Background Information

TOWN OF JAFFREY
SPECIAL TOWN MEETING –WASTEWATER TREATMENT PLANT UPGRADE
Saturday, September 9, 2006 (9:00 a.m.)

Dear Jaffrey Resident:

As reminder, you are invited to the Ernest J. Pratt Auditorium in Jaffrey on September 9, 2006 at 9:00 AM for the sole purpose to consider and vote upon the warrant article below. For those interested, we will also be holding a public informational meeting on Thursday, September 7, 2006 at 7:00 PM at the Jaffrey Fire Station. We need you to come and learn more about this project and to vote.

The related Warrant Article reads as follows:

To see if the Town will vote to raise and appropriate the sum, not to exceed, seventeen million, four hundred sixty thousand dollars ($17,460,000.00) for the purpose of upgrading the wastewater treatment facility to meet all requirements of the US EPA and NH DES for treatment of the wastewater before it is discharged into the Contoocook, to construct any related treatment facilities for the upgrade, and any other costs related thereto. The said sum is to be raised through the issuance of bonds or notes in accordance with the Municipal Finance Act, RSA 33:1, et seq., and to authorize the Selectmen to apply for, obtain and accept federal, state or other aid, if any, which may become available for said project and to comply with all laws applicable to this project; to authorize the Selectmen to issue, negotiate, sell and deliver said bonds and notes to determine the rate of interest thereon and the maturity and other terms thereof; and any other vote relative thereto. This bond is to be paid 2/3 by the sewer users and 1/3 from the general tax base. Recommended by the Selectmen and the Budget Committee. 2/3 Ballot Vote Required.

Background

Jaffrey is located at the headwaters of the Contoocook River in Cheshire County, New Hampshire. The Town currently owns and operates an aerated lagoon wastewater treatment facility, 15 miles of sanitary sewers, and 6 wastewater pumping stations including the Hadley Road Pump Station and Headworks. The existing wastewater treatment facilities, which have been in operation since 1986, are not able to comply with the more stringent effluent limits that have been imposed by the New Hampshire Department of Environmental Services (DES) and the USEPA. The Town has been under a state-issued (and, more recently, EPA-issued) Administrative Order since 1995 due to non-compliance with discharge permit limits. The Order and subsequent amendments require that Jaffrey upgrade its wastewater treatment facility as necessary to comply with the Discharge Permit limits. The Town has been unsuccessfully attempting to comply with the Order for nearly 10 years initially focusing on retaining the existing aerated lagoons and employing operational modifications. More recently, and at the request of DES, the Town made several costly and ultimately unsuccessful attempts to eliminate the Contoocook River discharge and associated water quality issues by implementing an innovative land based effluent disposal system (rapid infiltration).

Recommended Plan

Jaffrey's consulting engineer, Wright-Pierce, has been working closely with the Town, DES, and EPA to develop an affordable solution that will also protect water quality. The recommended plan consists of constructing an advanced wastewater treatment facility that will be capable of meeting the stringent effluent limits. The facility will consist of two oxidation ditches, secondary settling tanks, filtration, disinfection and post-aeration. The facility will also include a new septage receiving station and sludge dewatering facilities. The aerated lagoons were upgraded in 2002 and 2003 (sludge removal and aeration system replacement) in order to be able to provide optimum treatment on an interim basis until the advanced wastewater treatment facility is constructed and the Hadley Road Pump Station/Headworks was upgraded in 2004-05.

Estimated Costs

The estimated cost of the recommended plan is $18,351,075. This cost includes $15,531,500 for construction, $751,575 for construction contingency, $1,968,000 for engineering, construction management, and technical services, and $100,000 for testing and equipment. Within the $15,531,500, we have included $500,000 for decommissioning the existing lagoons following project completion. We do want to point out that the only one bid was received and that bid was $15,031,500 and approximately $2,600,000 higher than the engineer’s estimate but both DES and USDA Rural Development assured us that this was a qualified bid and directed us to proceed. Wright-Pierce has been meeting with the contractor and together they have identified several cost savings measures that will not impact the integrity of the project.

Funding Sources

There are a number of Grant Funding and Loan Funding Programs that we are either eligible for or will be applying for.  We are eligible right now for a 30% grant from DES which amounts to $5,505,323 and a DES Septage grant of $300,000.  Upon project approval by the voters, we would then be eligible for a USDA RD grant of which we are hopeful for at least 25% of the project costs which would amount to $4,587,769. We are also pursuing other Federal grants including STAG and EDA grants. We are working closely with our congressional delegation with all of these Federal-funding possibilities.  We have conservatively estimated receiving $1,000,000 in STAG/EDA grants. Bottom line, what this means to the Jaffrey taxpayer and sewer user is that our share is $6,957,984 or 38% of the $18,351,075. But we do want to point out that the USDA RD, STAG and EDA grants are not guaranteed and without them, the Jaffrey share would increase to $12,545,753 or 68% of the project cost. In any case, we want to emphasize that the USDA RD, STAG and EDA grants are contingent on obtaining project approval at the Special Town Meeting.

Impact of Costs on the Taxpayer and Sewer User

Make no mistake about it…..there are considerable impacts to the property taxpayer and sewer user. 

The debt service (principal and interest) over a 30 year loan adds $139,000 per year to Jaffrey’s debt service and $278,000 in debt service to the annual sewer budget and this is assuming a “best case” scenario where the Jaffrey share is 38%. If our share was 68%, assuming a “worst case” scenario this would add $251,000 and $501,000 respectively to Jaffrey’s debt service and sewer budget debt service.

Annual operation and maintenance costs will also be substantially increased as a result of the upgraded wastewater treatment plant. That portion of the sewer operating budget for this year (2006) which covers all labor and operational costs associated with the treatment plant, pumping stations and collection system is $562,972. It is estimated that once the upgraded wastewater treatment plant is put online that this cost will increase to $1,044,133………….and this cost is in addition to the debt service discussed above.

At $768 per year (based on 100,000 gallons per year or about 275 gallons per day) Jaffrey's average annual residential sewer use charge today is approximately 50 percent higher than the state average and higher than the rates in 90 percent of New Hampshire communities, and this is before financing the majority of the project now facing the Town. It is likely that Jaffrey’s residential sewer use charge will almost double.

Conclusion

The Budget Committee voted unanimously to recommend the project and bring it forward to the Special Town Meeting.  Your Board of Selectmen strongly supports this project and urges your support at the Special Town Meeting. There is no argument that this project will be expensive to taxpayers, residents and users of the sewer system but the first step is getting approval from the voters which will enable the Town to obtain additional grants from a variety of funding sources including USDA Rural Development, EDA, STAG and possible special federal appropriations. The Selectmen have met with Senators Judd Gregg and John Sununu and Congressmen Charlie Bass and they have pledged their support in obtaining additional federal money. If this vote fails, we do face possible fines and/or sanctions from EPA but more importantly, we would actually be delaying the inevitable. Simply put, Jaffrey can not avoid building this plant. Delays will result in increased construction costs. Bottom line, although expensive we believe that Jaffrey can not afford to wait any longer.

Respectfully submitted,
Jaffrey Board of Selectmen
Frank Sterling
Clay Hollister
Rick Lambert