New Hampshire’s Water Assets Under Pressure: Municipal Dams
This is the fourth of a four-part series focusing on the State’s water infrastructure: public drinking water, wastewater, storm water and dams. Each article has spotlighted a municipal system; addressed critical needs of that infrastructure system; and outlined funding sources available to municipalities today that may be used to maintain and sustain these critically important infrastructure systems.
Our water infrastructure systems are essential to public health and safety, economic growth, and quality of life in New Hampshire. We have basic water infrastructure systems that go generally unnoticed by us—the consumers. We pour tap water into our glass and drink reassured that it is safe to drink. We flush our toilets and the waste simply vanishes. When it rains, contaminants are washed off rooftops, parking lots and streets, and this runoff is channeled through a series of catch basins, drains and underground pipes to places unknown. New Hampshire municipalities own nearly 400 dams statewide that provide recreational lakes, fire ponds, flood control and water supply storage. Yet the public pays very little attention to these basic water systems; that is, until a pipe bursts, the toilet clogs, the streets flood, or, more tragically, a dam fails.
We hope by highlighting these important water assets, ordinary citizens and policymakers alike will better understand the value these assets provide for the protection of public health and safety and in supporting economic growth and development in all of our 234 communities.
We also want to highlight the many challenges facing municipalities in maintaining the quality of these basic water infrastructure systems. Whatever infrastructure a municipality owns, the challenges are generally the same: (1) aging infrastructure systems that have not been consistently maintained due to funding shortfalls; (2) a continually evolving regulatory environment; and (3) declining state and federal funds that municipalities have historically depended upon to finance these capital improvements. A growing population and increasing demand has also put mounting stress on these water systems.
The fourth article in our series focuses on municipal dams.
Background: Municipal Dams
In 1975, the Legislature enabled the formation of village districts for the purpose of impounding water. RSA 52 allows lake shore owners to form village districts which can raise money by taxation and appropriate the funds needed to operate, maintain and repair a dam. Since enactment of that law, thirteen Village Districts have been formed for the purpose of impounding water. Take, for example, Sunrise Lake, located in the town of Middleton, which is nestled between the towns of New Durham and Milton. Sunrise Lake is approximately 300 acres and about one mile long by a half-mile wide. In 1980, the Sunrise Lake Village District (SLVD), the first of its kind in New Hampshire, was established specifically as a vehicle to own, repair and maintain the Sunrise Lake Dam. Property owners continue to support the SVLD today through the yearly tax rate; in 2012, it was 44 cents per $1,000 valuation.
“The value the dam represents to the town includes first and foremost an improved quality of life, through the recreational opportunities, scenic values, and wildlife habitat,” said Jack Savage, moderator for the village district. “Given that most of the land adjacent to the lake has been developed, it also represents a substantial amount in property valuation, especially for waterfront homes. To the extent that seasonal homeowners require fewer town services, the lake properties help lower the tax rate across the board,” added Savage.
Most people associate dams with flood control and little else. The average citizen is unaware that the beautiful lakes on which he or she resides or recreates are only there because of man-made dams. Dams are responsible for the largest and most important recreational lakes in our state, including Winnipesaukee, Squam, Winnisquam, Newfound, Sunapee and Ossipee. Because many of New Hampshire’s surface waters are impounded by dams, the maintenance and repair of these dams is critical to maintain the significant economic benefits they provide the state. A 2007 study suggests that waterfront property owners pay nearly a quarter billion dollars in property taxes.
Municipal dams have other purposes beyond recreation, including water supply storage, hydropower generation, flood control, fire protection ponds, conservation/agricultural ponds, and in some cases, storm water detention or septage lagoons. (See Chart 1, Municipal Dams by Use.)
Dams are man-made or artificial barriers constructed to impound water. State law defines a dam as any artificial barrier which impounds or diverts water which has a height of 6 feet or more or is located at the outlet of a great pond. (See Diagram of a Typical Dam.)
New Hampshire is home to 2,623 active dams. Most of these dams are privately-held (75 percent), but 358 dams, or nearly 14 percent, are municipally-owned. The federal government owns 34 (1 percent) and the State of New Hampshire owns 250 (9 percent) that are 6 feet or higher. (See Chart 2, New Hampshire Dam Ownership.) This article will focus solely on the 358 dams owned or otherwise managed by New Hampshire’s cities and towns.
New Hampshire’s Aging Infrastructure
According to the Department of Environmental Services’ (DES) Jim Gallagher, Chief Engineer and Administrator for the state’s Dam Bureau, the average age of New Hampshire’s municipally-owned dams is approximately 90 years and the median age of these dams is approximately 80 years. “Some of the dams owned by New Hampshire’s municipalities were constructed as far back as the 1800s,” said Gallagher. “Because of their age, these dams require constant attention to maintain them in a safe condition. The forces of water and ice that continuously act on these dams cause their granite blocks to move, their concrete to crack, their iron and steel to rust, their soil to erode and their wood to rot,” Gallagher added.
In many cases, the original purpose of the dam no longer exists, and in some cases, it is more cost effective and/or environmentally desirable to remove old dams that no longer serve their original purpose. Where the cost to maintain the dam is beyond the financial capability of the municipality or beyond the value of the benefits of the dam, the dam should be evaluated for removal. However, dam removal is not an easy proposition and the process can be fairly onerous and costly. Ideally this process should be made easier. The option of breaching, but not completely removing a dam, is yet another option that may require fewer environmental studies than required for full removal.
“Dam maintenance and renewal can be costly and most municipalities lack a dedicated funding mechanism,” said Bill Brown, CEO and President of Wright Pierce. “Ideally the funding would come from the beneficiaries of the dam.”
Yet this issue can become complicated when the beneficiaries of the dam may be in a different town than where the dam is located. The Pickpocket Dam on the Exeter River is an example of this. The dam is situated between the towns of Exeter and Brentwood whereas the town boundaries are located right down the center of the river. To address this “beneficiary” issue, for instance, the state of Maine enacted a law in 2009 requiring apportionment of costs between the municipality that owns the dam and all municipalities that abut the body of water contained by the dam. Apportionment is based on respective linear feet of shoreline on the water impounded by the dam within each municipality.
Given the number of dams municipalities own and the normal design life of 50 years of these structures, municipalities should be performing major repairs or reconstruction on an average of seven dams per year.
“Dams serve many valuable purposes but also pose many challenges to the dam owner,” explained Brown. “As most dams in New Hampshire are over 80 years old, many need costly repairs or improvements to meet current dam regulatory requirements.”
New Hampshire’s Regulatory Environment and Dam Liability
Municipal dams in New Hampshire are regulated and inspected by DES unless the dam is associated with hydropower productions. In these instances, the dam is governed by the Federal Energy Regulatory Commission (FERC), but DES assists FERC in their inspections. There are eight municipalities, including the cities of Claremont, Dover and Nashua, and the towns of Rollinsford, Sunapee, Hopkinton, Hillsborough and Jackson, with dams that have associated hydropower facilities holding either a FERC license or a license exemption.
The determination of hazard classifications of dams is based on the potential threat to life and extent of property damage downstream if the dam were to fail, but interestingly, these hazard classifications have nothing to do with the actual “condition” of the dam. Of the 358 municipally-owned dams, 33 are rated High Hazard, 68 are rated as Significant Hazard and 112 are rated as Low Hazard. The remaining 145 dams are classified as Non-Menace. (See Chart 3, Municipal Dams by Hazard Class, Outstanding Violations, and DES Inspection Requirements.)
The total number of High Hazard dams is increasing, but this is primarily due to expanding development downstream and more encroachment on areas that would be inundated should a dam fail. Municipalities should be aware of how a changing landscape associated with development can put additional pressure on upstream dams. This issue of encroachment facing dam owners is known as “hazard creep,” said Gallagher. “This term refers to a dam originally constructed and operated as Low or Significant Hazard that is now reclassified as High Hazard due to new downstream development. Such dams often do not meet design and maintenance requirements for High Hazard Dams, and must be improved or removed at a municipality’s expense,” added Gallagher.
DES inspects all potentially hazardous dams every six years for Low Hazard dams, every four years for Significant Hazard dams, and every two years for High Hazard dams. If as a result of the inspection deficiencies are found, DES notifies the dam owner with a Letter of Deficiency (LOD) outlining noncompliant issues and specifying the remedial work and timetable that must be accomplished for compliance. Deficiencies may include seepage through the dam; inadequate spillway discharge capacity which would cause water to spill over the top of a dam (overtopping) during floods and erode the dam; structural failure of materials used in dam construction; cracking caused by movements such as the natural setting of a dam; trees/brush that must be removed to minimize threat of blow downs; out-of-date or untested Emergency Action Plan; and inadequate maintenance and upkeep. Many of the dams with outstanding LODs require major structural reconstruction with an estimated per project cost of $1,000,000. DES estimates there are about 30 municipal dams that are in need of significant repair at a total estimated cost of approximately $30 million.
Currently more than one-third (124) of municipally-owned dams have LODs issued to them by DES. “Dam ownership carries with it significant liability. Liability increases when these municipal owners have issued against them a Letter of Deficiency from DES,” said Richard Dwyer, Risk Pool Information Analyst with the Local Government Center Property-Liability Trust (PLT). “Municipalities need to put in place a plan to pay for and fix the problems identified by DES. PLT will provide coverage for dams but only if these structures are individually listed and accepted by PLT, otherwise there would be no coverage under the basic Membership Agreement,” explained Dwyer.
Municipalities with High Hazard and Significant Hazard dams are required by state law to have an Emergency Action Plan (EAP) in place. The EAP identifies the areas downstream that would be inundated if the dam were to fail, and in addition, requires development of notification and response plans. Based on inundation maps submitted for the High and Significant Hazard dams in the state, DES has determined that there are more than 26,000 homes, 560 state road crossings, and more than 2,500 town road crossings that would be destroyed or damaged if these dams were to fail. Many communities in the state have experienced growth in the very areas that would be inundated if dams were to fail. Downstream hazard potential has thus increased significantly, although it has not necessarily been fully documented as such.
“Due to the many competing needs for limited municipal funds, and because these dams ‘have been there forever,’ many municipal owners look at dam maintenance and repairs as a lower priority as they hope that these dams will continue to be able to withstand the test of time,” said Brown. “Unfortunately, dam failures do happen, and can be devastating. As such, more attention, including pursuit of funding options, is needed to address the needs of these dams before such incidents take place,” added Brown.
Lack of State and Federal Funding Support
There is no single source of adequate funding or funding assistance for dam maintenance or repairs. Neither the state nor federal government has a pot of money available to assist municipalities. In 2009, the State Legislature established a Dam Maintenance Revolving Loan Fund to address the financial assistance needs of private dam owners. The fund, which has little money, about $33,000, is surprisingly not available to municipal dam owners.
For cities and towns, there appears to be no good source of funding, other than direct appropriations, for the repair of municipally-owned dams in New Hampshire. Yet financial constraints are frequently cited by municipal officials as the reason that prevents them from making needed repairs or performing routine maintenance—the result being a continued risk to public safety and public/private property.
“There are some good grant programs for removal of a dam, but few sources of funding for dam repair and maintenance,” Brown said. “But clearly, there is a need for more money for these projects.”
Attempts to secure a long-term funding source for the repair and maintenance of state-owned dams have failed in the Legislature. Funding proposals have included gas taxes and a shoreland assessment fee, but there appears to be little legislative support for finding a funding source for this significant public safety problem. In an effort to specifically address the needs of municipalities, however, there was a bill (HB 364) before the Legislature in 2009 that would have allowed municipalities’ authority to contract with DES for dam maintenance. DES had concerns that the bill could result in a significant increase in workload without additional staff and result in a delay to much-needed work on state-owned dams. The bill was eventually voted down because the Legislature felt it was inappropriate for DES to enter into competition with the private sector for providing municipal services and for liability reasons.
Some municipally-owned dams are associated with water districts. Historically, dams impounded ponds and lakes to become a municipality’s primary source of water supply. Many dams are still being maintained by water districts today because they serve as a secondary source of water supply. For these dams, the repairs may be paid using water district revenue (i.e., water fees). There are 54 municipal dams used for the purpose of water supply today.
The repair of municipally-owned dams is almost always funded by municipal revenues. However, this situation is not sustainable. The State Legislature and state environment officials, in cooperation with municipal officials, need to investigate a long-term funding plan and implement the use of revolving loan funds and grants, as is done in other states, to better service the capital improvement needs of municipally-owned dams.
In 2011, the New Hampshire chapter of the American Society of Civil Engineers (ASCE) gave New Hampshire’s dams a C- grade, better than the national grade of D, but still less than desired. In issuing its report card, the ASCE commented that “although inspection programs have improved, there needs to be a long term plan and funding to assist repair on privately and municipally-owned dams.”
With municipal budgets so tight, there is a struggle and great frustration for municipalities to fully attend to dams. Clearly, municipal funding is limited and competes with many other compelling local needs. However, as these dams age and as new development grows in the floodplains, the structural integrity of this public infrastructure will become a public safety issue. Municipal dams have many age-related deficiencies that need to be corrected in order to maintain current levels of safety. If neglected, these dams hold the potential to cause loss of life and significant economic loss and disruption. This public safety problem demands greater attention by local officials and state legislative leaders.
Tim Fortier is Government Affairs Advocate for the New Hampshire Municipal Association. Contact Tim at 800.852.3358, ext. 3408, or email firstname.lastname@example.org.
Sources and Author Acknowledgements
Special credit and recognition to New Hampshire Department of Environmental Services (DES) Administrator, Dam Bureau, James Gallagher, who provided his time and much information for this article. Wright-Pierce CEO and President, Bill Brown, devoted staff resources and professional expertise on the subject matter and, in addition, peer-reviewed this article.
Valuable input and contributions also from: Jack Savage, Moderator, Sunrise Lake Village District; Jim O’Brien, Selectman, Town of Hopkinton; Barbara Reid, Government Finance Advisor, New Hampshire Municipal Association and Local Government Center (LGC), and Richard Dwyer, Risk Pool Information Analyst, LGC.
This article cites extensively the New Hampshire Water Resources Primer, prepared by DES, December 2008; Final Report on HB 648 (Comprehensive Flood Management Study Commission), dated September 2008; and the Sunrise Lake Village District website. Additional information for this article also gleaned from the DES website, including fact sheets and other informational materials on the topic.
Visit www.nhlgc.org/nhma/ongoingtopics.asp for links to additonal resources.
System Spotlight: Flood Control Communities
The Merrimack River Basin is the fourth largest river basin in New England and extends from the White Mountains region to the northeastern Massachusetts coast. In the mid to late 1930s, when the Merrimack River overflowed its banks and swept away roads, bridges and buildings from central New Hampshire to the Massachusetts coast, the U.S. Army Corps of Engineers (ACOE) took action, and over many years built five multipurpose flood control dams—the Blackwater, Franklin Falls, Edward MacDowell, Hopkinton and Everett dams—seizing thousands of acres of private property in 18 New Hampshire municipalities. In doing so, they created the Merrimack River Flood Control Compact. The primary goal of these Merrimack River Valley dams and reservoirs is to protect downstream communities, including the cities of Concord, Manchester and Nashua and the cities of Lowell, Lawrence and Haverhill, Massachusetts.
Under the 1957 Merrimack River Flood Control Compact, towns with flood control dams were to be compensated annually for the loss of the land from the tax rolls of these local governments, a total of 18,473 acres, by the State of New Hampshire. These reimbursements are simply the real estate tax the towns would have collected if in fact the land had not been flooded. New Hampshire is then responsible for seeking reimbursement from the Commonwealth of Massachusetts for 70 percent of these payments. Historically, the State of New Hampshire has made full payments to these communities whether or not reimbursement was received from Massachusetts. State officials estimate Massachusetts owes New Hampshire more than $4 million, although this figure is currently being recalculated based on historical valuations. The State of New Hampshire is also contemplating a lawsuit to recover these monies owed by Massachusetts.
Due to a change in HB 2 (Chapter Law 224, 2011 Session), the flood control communities received only the New Hampshire share—30 percent—of the amount due as a payment in lieu of taxes. The fiscal impact on these municipalities is hard felt by many today. Take, for example, the town of Hopkinton, which is home to a large ACOE dam along the Contoocook River. The West Hopkinton Dam and associated flood control occupies more than 4,000 acres of land in Hopkinton, with an assessed value of about $10 million. For Hopkinton, the lack of reimbursements represented nearly a $140,000 hole in its recent budget because of lost payments. “This unexpected change in revenue fell on the backs of local taxpayers,” said Hopkinton Selectman Jim O’Brien. “This means that the state is now ‘taking’ land from the tax base in Hopkinton without just compensation. Hopkinton taxpayers should not be asked to forfeit land with high value without just compensation,” said O’Brien. And Hopkinton is not alone in this situation. Seventeen other towns are owed nearly $841,000 in flood control reimbursements based on the 2010 tax rate for fiscal years 2012-2013. The town of Surry, for instance, estimated the impact on its 2011 tax rate was an increase of approximately 20 percent. And, according to Surry Selectman Russell Fiorey, “There is no benefit to Surry having this flood control project in town, only a loss of valuable taxable property.”
Currently there is a bill before the Legislature that will reverse the downshifting in HB 2 and repeal RSA 122:4, II. SB 326, sponsored by Senator Andy Sanborn, was introduced to return the reimbursement payment process back to how it has been done in the past with the State of New Hampshire fully compensating these communities and then seeking reimbursement from Massachusetts per the terms of the compact.
Barbara Reid, New Hampshire Municipal Association’s Government Finance Advisor, testified in support of SB 326. Reid has served as a commissioner on the Merrimack Flood Control Commission for six years. “The original compact was enacted in the 1950s and I would equate that with a prenuptual agreement. At the time, everyone was supportive and enthusiastic about this relationship and all the benefits that would come from these dams. It was a blissful period for a couple of decades. Now, 50 years later, the honeymoon is long over and the benefits of this interstate partnership are not necessarily evident nor a priority for the Commonwealth or its riverside communities south of our border.”