NH Water Infrastructure Sustainability Funding Commission Findings/Recommendations* 2014 NH Municipal Association's 73rd Annual Conference Presented by William Brown, PE, Wright-Pierce ACEC Representative to SB60 Commission *SB60, Chapter 245:1, Laws of 2009, November 2013 Final Report

Why Was SB60 Formed? Water infrastructure is important to economic prosperity and quality of life …. Dams Wastewater Drinking water Stormwater … this infrastructure is in decline and utility owners are facing financial challenges

Reason for Infrastructure in Decline Under funding asset renewal Setting rates below the true cost Giving current users a bargain Transferring current day cost to future generations Failing to educate the public of the value of the infrastructure service Financial and educational challenges ahead!

SB 60 History and Scope Formed in 2009, extended twice Senator Martha Fuller Clark was original and final Chair Met 31 times Brought in many experts Researched other state infrastructure strategies Focused on funding needs and the State’s role related to the funding of our water infrastructure

2013 SB60 Commission Members Martha Fuller Clark, Senator Pamela Hubbard, Representative Thomas Buco, Representative Adam Schroadter, Representative Harry Stewart, Department of Environmental Services Rachel Roulliard, Piscataqua Region Estuaries Partnership Keith Robinson, United States Geological Survey John Boisvert, NH Water Works Association David Bernier, Granite State Rural Water Peter Rice, NH Water Pollution Control Association Kurt Blomquist, NH Public Works Association John Webster, Granite State Hydro power Association, Inc. David Danielson, NH Association of Regional Planning Commissions William Brown, American Council of Engineering Companies Peter Kulbaki, NH Rivers Association Tom O’Brien, NH Lakes Association Stephen Hickey, NH Business and Industry Association

Key Questions Tackled by the Commission Is investment in water infrastructure that serves New Hampshire’s communities important? How does water infrastructure investment benefit the state? What amount of investment is needed in the next decade? Should the state of New Hampshire continue its historical role of providing aid for local water infrastructure investment? What are the most appropriate mechanisms for state assistance? What revenue sources for state assistance programs have a good nexus to the water services water infrastructure provides? What conditions for state funding would be appropriate to ensure sustainable local investment in water infrastructure to minimize the future need for state investment?

Others have gone before us

Findings and Recommendations 1.Water infrastructure is critical and beneficial to New Hampshire’s economy and quality of life. 2.Substantial investment ($2.9B/decade) is needed to maintain or make necessary improvements to municipal wastewater and stormwater systems, public drinking water systems, and municipal and state- owned dams. 3.In addition to ratepayers, the state of New Hampshire benefits directly and indirectly from reliable water infrastructure and the state should create a Water Trust Fund to ensure adequate annual investment in water infrastructure 4.A new revenue source must be found to create the Water Trust Fund and the Commission finds that a charge on beverage containers is the best available alternative. 5.State funding for water infrastructure must be contingent on implementation of measures by water infrastructure system owners that will ensure proper and adequate future operation and asset management. 6.Ongoing education and outreach will be necessary to ensure New Hampshire’s leaders and citizenry understand the critical importance of water infrastructure investment.

Safe drinking water Fire protection Public health Healthy ecosystems Flood protection Clean recreational waters Tourism Increased local tax revenues Creates jobs Why water infrastructure is critical to NH’s economy and quality of life

Big Investment Needs!

Infrastructure Dependent State Revenue $1.2+ Billion per Year $561 million 25% $364 million 16% $251 million 11%

A NH Water Trust Fund is needed to spur adequate annual investment Assist with with local debt service (similar to the historic 20-30% state aid grant programs) on water infrastructure projects to: – provide incentive for local borrowing – keep rates reasonably affordable Provide state match required to receive federal loan fund dollars Fund state-owned dam asset renewal Estimated $40,000,000 needed annually

A new revenue source must be found to create the Water Trust Fund Many revenue sources considered – Flush or water products tax – Water use fee – Shorefront assessments – Rooms and meals, etc. Existing revenue sources with nexus to water are fully committed

Charge on beverage containers favored because: – Most beverage manufacturers rely on water infrastructure – Surrounding states have larger bottle redemption fees, thus keeps a competitive NH advantage – People are used to paying such a fee elsewhere – Raises sufficient revenue ($40 Million at 4 cents/container) Not a redemption fee, one time charge at first sale in state envisioned. A revenue source was identified to create the Water Trust Fund

Even with Water Trust Fund… the lion’s share of the burden still falls on the local rate payers Infrastructure owners still need to raise $2.3 billion locally over next decade Rates will have to increase

The heart of the infrastructure challenge $ Affordability

Affordability Strategies Least cost solution planning Develop/fine tune user charge systems Pursue grants Optimize operations Consider demand management opportunities Consider regionalization Extended regulatory compliance schedules Optimize other community expenditures Manage level of service expectations

Leadership needed to get out of the hole we find ourselves in Infrastructure Master Plans Asset Mgmt Plans Public Education Full cost pricing Political courage Long term view Community Leaders are the ultimate stewards of these important assets

State funding/investment must promote sustainable operation and management Require fund recipients to: – Adopt sustainable asset management practices – Demonstrate institutional capacity – Adopt responsible financial management practices Will fund asset renewal and regulatory driven projects Will not fund growth driven projects

Water infrastructure is as important to NH as is transportation infrastructure… reliable water infrastructure is essential for a robust economy, good public health and a healthy environment statstudcomm/details.aspx?id= 1997&rbl=1&txtbillnumber=sb60 SB60 Report Conclusion

We Need to Elevate Water! Roads and bridges have the “gasoline tax”. Our schools had “building aid” Our water Infrastructure needs the Water Trust Fund supported by beverage container fee

What can you do? Educate your constituents Ask your legislators to support the: Water Trust Fund supported by beverage container fee EDUCATE

Questions?

Further Information William Brown, PE Chairman Wright-Pierce 230 Commerce Way Portsmouth, NH