- Associated Press - Saturday, September 26, 2015

CONCORD, N.H. (AP) - New Hampshire relies heavily on a federal loan program to make improvements to an aging drinking water system but hundreds of millions more is needed.

A Joint Legislative Study Commission reported in 2013 that it would cost $857 million over a decade to address all the state’s drinking water priorities.

New Hampshire is not alone.

The U.S. Environmental Protection Agency projects it will cost $384 billion over 20 years just to maintain the nation’s existing drinking water infrastructure. Replacing pipes, treatment plants and other infrastructure, as well as expanding drinking water systems to handle population growth, could cost as much as $1 trillion.

Despite the need, the largest federal aid program for drinking water improvements, the Drinking Water State Revolving Fund, has more than $1 billion sitting unspent in government accounts, according to a review of data by The Associated Press. That is largely the result of project delays, poor management by some states and structural problems.

In New Hampshire, $16 million - 9 percent - remains unspent from the $177.9 million the state has received from the fund since its inception in 1996. Sarah Pillsbury, administrator of the state’s Drinking Water and Groundwater Bureau at the Department of Environmental Services, said that there’s almost always a lag in spending but that the money gets spent within two loan cycles.

“Inevitably, some of those projects take much longer than they intended to,” Pillsbury said. “Obviously, we like to have projects that are shovel-ready.”

New Hampshire has put $134 million in revolving fund money toward capital projects. The balance, $43.1 million - or 24 percent - went to “set-asides” to pay for things such as data management, reporting requirements, engineers to examine systems, grant programs and staff. The law allows states to set aside up to 31 percent.

On its 2015 priority list, the state’s Department of Environmental Services requested $48.3 million for 42 projects, ranging from $24,750 for arsenic treatment at the Johnson Creek Water System in Durham to $9.1 million for improvements to the city of Dover’s water facilities.

“What’s driving it now is just sheer age,” Pillsbury said. “You see it on a very routine basis. You see sink holes, you see huge water main breaks around the state.”

Robert Barry is commissioner of the New Hampton Village Precinct water system, a tiny provider that serves 600 people. The precinct has used the fund in the past and is approved for a $400,000 loan to build a pipeline but will seek private financing instead. Because water from Mountain Pond comes overland to the reservoir, it contains loads of particles that turn the water into “tea” during spring, summer and fall.

Barry said the precinct has used the fund in the past, getting a 30 percent break on paying back a $500,000 loan for a well project in 2008. But after the 2010 census indicated the average household income was higher than the state average, the precinct won’t get a discount and would have to pay back the full loan and adhere to federal rules including bidding out the job and paying prevailing federal labor wages. He thinks private financing would ultimately be cheaper.

“I think the loan fund is great, but I think the basic constrictions they put on it gives no latitude for smaller precincts that really don’t have the economic wherewithal to continually take advantage of it,” Barry said.

The 2013 report also noted that the American Society of Civil Engineers, in quadrennial report cards since 1998, give New Hampshire’s water infrastructure an average of “D” grades because the state isn’t investing enough.

“There is no state funding per se for our drinking water program,” Pillsbury said. That makes the revolving loan fund critical.

“It’s hugely important to meet the infrastructure needs, and it’s always hugely important to keep the drinking water program run out of the state,” Pillsbury said.

Most people in the state get their drinking water from a small system, not a major municipal system, and Pillsbury said the fund allows those small systems access to capital for improvements.

“If it wasn’t for the State Revolving Fund, they wouldn’t have anybody who could loan them the money,” she said.

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