New Hampshire’s Water Assets Under Pressure: Municipal Wastewater Systems
This is the third of a four-part series focusing on the State’s water infrastructure: public drinking water, wastewater, storm water and dams. Each article will spotlight a municipal system; address critical needs of that infrastructure system; and outline 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 also has put mounting stress on these water systems.
The third article in our series will focus on municipal wastewater systems.
Background: Municipal Wastewater Systems
In New Hampshire, roughly 65 percent of all homes are served by individual wastewater treatment systems, typically consisting of an on-site septic tank and an absorption or leach field. Another one-third of the state’s homes are served by larger, community or regional, facilities that collect, transport, and treat much larger quantities of wastewater. These community wastewater facilities collect wastewater from homes and businesses through an underground network of pipes and pump stations, and transport it to a wastewater treatment facility (WWTF) where it is treated and disinfected before discharging the treated liquid portion of the sewage (also known as effluent) back into rivers, streams, or other surface waters, and, in some cases, groundwater. (See Wastewater System diagram.)
Since many residents rely on private, on-site septic systems, the disposal of residuals, also known as septage, must be done locally or at regional WWTFs. New Hampshire currently does not have enough capacity to treat all the septage, nearly 95 million gallons in 2011, generated within the state. Of this total, nearly 18 million gallons, or 19 percent, of septage was disposed at out-of-state WWTFs. More than 63 million gallons, or 66 percent, of the state’s septage was disposed at in-state WWTFs, while 3 percent went to septage lagoons, 7 percent to land application, and another 5 percent to innovative or alternative “septage only” facilities. (See Chart 1, Septage Disposal Practices for 2011.)
Treatment plants produce a residual material or solid wastes, called wastewater sludge or biosolids, that must be disposed of or reused. Municipalities basically have three management options for biosolids disposal: (1) application on land as fertilizer or soil amendment; (2) disposal in landfills; or (3) incineration. In 2010, 114,500 wet tons of biosolids were generated in New Hampshire, which was disposed of in the following ways: land application (class A and B biosolids), 37 percent; landfilling, 34 percent; incineration (City of Manchester only), 21 percent; out-of-state disposal, 8 percent. (See Chart 2, Sludge Disposal Practices for 2010.)
“Biosolids are basically municipal sewage sludges that have been treated and tested and meet or exceed state and federal standards for use as fertilizers and soil amendments,” said Shelagh Connelly, president of Resource Management, Inc. (an organic waste, residuals management, and recycling company based in Holderness) and selectperson in the Town of Holderness. “This means we are creating a beneficial use of these wastewater residuals, which means less waste goes into landfills, more recycled product goes to farmers, and this creates significant cost savings to cities and towns.”
“The costs of managing these residuals are a significant part of the operating expenses of WWTFs,” said Paul Heirtzler, Administrator with the Department of Environmental Services (DES) Wastewater Engineering Bureau. “But more importantly, the proper land application of biosolids is a very environmentally friendly program that protects the water quality of our lakes, rivers, and coastal areas.”
There are essentially three driving factors impacting New Hampshire’s WWTF plant needs today: an aging infrastructure, a continually evolving regulatory environment, and declining state and federal support.
New Hampshire’s Aging Infrastructure
New Hampshire is home to 148 wastewater treatment facilities, of which 73 are municipal or publicly-owned treatment facilities and 75 are private facilities. Much of New Hampshire’s wastewater treatment infrastructure was constructed between 1972 and the mid-1980s, and the majority of these facilities are near or beyond the end of their design life expectancy of 20-30 years.
Sewer lines and pump stations conveying sewage to treatment facilities vary in age, but many of the pipes in the ground also are reaching the end of their service and will need to be replaced or upgraded. Because sewer lines run underground, they rarely receive any public attention unless a sewage leak or pipe failure becomes obvious. Aging sewer lines also carry less obvious risks, such as unwanted releases of sewage to the environment or the entry of clean water that can overload treatment plants. In many cases, this clean water leaking into the sewer system, called infiltration and inflow, can account for as much as 50 percent of the treated flows, which tie up much of the system capacity and can significantly increase the cost of treatment plant operations.
Like other states, New Hampshire’s WWTFs were built subsequent to the passage of the Clean Water Act of 1972, and were heavily subsidized by the Federal Construction Grants program, a program which was significantly curtailed in 1987. At the time, WWTFs were designed and constructed to meet the estimated needs of the population they served, with treatment capacities ranging from 3,000 to 34 million gallons per day. Currently 25 percent of the municipally-owned WWTFs are operating at or above 80 percent of their design capacity and they may need to plan for future capacity expansion. Even if capacity is not an issue, increasingly stringent limits imposed by discharge permits are forcing many municipalities’ need for wastewater treatment upgrades.
“As a result of the aging wastewater infrastructure, communities are facing significant asset renewal costs to maintain the reliability of their wastewater systems, or are facing capacity expansion issues,” said Bill Brown, CEO and President of Wright Pierce. “Many communities do not fully understand the magnitude of the asset renewal costs that they will be facing as these assets reach their life expectancy and they do not have a financial plan in place to maintain reliability for the future,” said Brown.
Continually Evolving Regulatory Environment
Wastewater treatment varies significantly from municipality to municipality, and how sewerage is treated and the degree to which it is treated is driven by DES and Environmental Protection Agency (EPA) regulations. Most treatment facilities have had to achieve secondary standards (85 percent removal of solids and organic material) for the past several decades. The EPA has been setting increasingly more stringent discharge limits for many WWTFs where the receiving water quality is not achieving minimum standards. This is resulting in the imposition of advanced treatment standards for nutrients and a variety of other chemical parameters for many WWTFs.
Today’s domestic wastewater can contain a number of pollutants that can harm the environment and place public health and safety at risk. In addition to human pathogens, wastewater also contains high levels of nutrients such as nitrogen and phosphorus that can trigger surface water algal blooms and low dissolved oxygen; these conditions may lead to death of many forms of life in rivers, streams, lakes, and estuaries. Phosphorous is typically the nutrient of concern in fresh water; nitrogen is typically the nutrient of concern in marine waters.
The EPA is already moving toward including strict nitrogen and phosphorus limits for many New Hampshire discharge permits when they renew over the next five year cycle. It is likely that many WWTFs will have to address these limits within the next five to 10 years.
Due to water quality concerns and nitrogen levels in the Great Bay estuary, the EPA has begun issuing draft National Pollutant Discharge Elimination System permits to two Seacoast communities, Exeter and Newmarket, requiring a nitrogen limit of 3 milligrams per liter into Great Bay. Currently about 30 percent of the nitrogen loading into Great Bay comes from WWTFs and about 70 percent comes from non-point sources, such as private septic systems, fertilizers/agriculture, air pollution, and stormwater. In response to the State’s and EPA’s actions, Portsmouth, Exeter, Newmarket, Dover, and Rochester have filed suit against DES regarding these regulatory requirements, arguing, among other issues, that an adaptive management approach has a greater chance of success than a single criterion metric and that a broader solution to address these non-point sources is needed. (See System Spotlight: Town of Exeter below.)
To compound this regulatory pressure on municipalities, the EPA is also focusing on more recently recognized contaminants in wastewater, including pharmaceuticals and personal care products, as well as certain metals such as lead, copper, and aluminum. This increasing federal concern about water quality and the need to deal with nitrogen, phosphorous, and metals will lead to the need for further development of advanced treatment systems throughout the state. It is not clear how that need will be met, since the federal grants that helped build the existing wastewater infrastructure are no longer available. Unfortunately, these continually evolving regulatory requirements force many communities to spend their limited resources to address new mandates instead of investing in maintaining or replacing their aging wastewater infrastructure.
Declining State and Federal Funding Support
According to the final report of the HB 1491 Commission, the capital costs to properly manage wastewater in New Hampshire over the next 10 years is estimated to be more than $1.2 billion. This translates into an annual investment of $105 million for WWTF upgrades. And these costs do not include the estimated $300 million that will be required to address the nitrogen issue on New Hampshire’s Seacoast.
In order to meet federally-mandated secondary treatment standards, the majority of New Hampshire’s wastewater infrastructure was built during the 1970s and 1980s under the Federal Construction Grants program. At that time, the federal government provided 75 percent of the funding, the state provided 20 percent, and the local municipality provided the remaining 5 percent of the funds. By 1987, this program was essentially replaced with the low-interest loan programs known today as State Revolving Funds (SRFs).
The Clean Water State Revolving Fund is a federally-established, state-operated program overseen by EPA. Federal capitalization and a 20 percent state match allows states like New Hampshire to provide below-market or low-interest rate loans to municipalities for wastewater infrastructure. Federal and state grant and loan programs aimed at New Hampshire municipalities have leveled off at nearly $26 million per year. See the State/Federal Funds for Wastewater Projects chart, which represents the federal “seed” money funding levels (which include the 20 percent state match) and monies appropriated by the State Legislature (State Aid Grants), which provide low-interest loans to communities for the design and construction of eligible wastewater projects.
New Hampshire has historically supported municipal wastewater infrastructure projects through the State Aid Grant (SAG) program, which provides financial assistance in the form of grants for 20 percent of eligible costs relating to planning, design, and construction of certain sewage disposal facilities by municipalities. Since 2001, the State has appropriated more than $12 million annually for these qualified wastewater projects; however, in 2008, the Legislature discontinued all appropriations for new wastewater projects. Subsequently, the Legislature has appropriated limited funds only for those wastewater projects approved prior to October 2008. Since 2008, 87 wastewater projects have been submitted by municipalities seeking over $36 million in SAG commitments. Clearly, this demand demonstrates the need for the Legislature to immediately resume fulfilling its budgetary state funding obligations to these municipalities. (Visit www.nhlgc.org to view the Delayed and Deferred List.)
Today’s approach of using federally-backed SRF funds, state aid grants, and sewer/user fees is not a viable or sustainable model at the current funding levels of approximately $26 million per year. This suggests that wastewater infrastructure needs will never be met in New Hampshire unless current funding methodologies are significantly increased or changed.
As federal and state aid continue to decline, the burden for these costs will undoubtedly downshift to cities and towns and to citizens through increased local sewer/user fees. Yet local fees can only go so far in meeting the significant current and future costs of our wastewater infrastructure needs. When user fees become too exorbitant, there is a real risk they will serve only as a barrier to local economic growth. Moreover, municipal officials are likely to defer these wastewater improvements as pressure for other priorities, such as schools, road maintenance, and public safety, also continue to stress local tax rates.
DES estimates the average sewer use charge in 2010 at $575.36. This is a 35 percent increase since 2005, when the average sewer use charge was $426.51. Yet this average charge does not reflect the true cost of providing this essential service to the public. Most often the municipal user charge systems ignore system depreciation costs. As a result, municipal utilities have not collected enough revenue for the inevitable asset renewal. While sewer fees are often perceived as expensive by the public, the truth is, the fees paid have been a real bargain. In fact, the fees are much less than what is typically spent yearly by households for cable television or Internet services. User fees, such as sewer use charges, are often regarded as another form of tax collected by municipalities, which leads some local officials to defer plant maintenance and upgrades until large investments can no longer be delayed. Unfortunately, this “delay and defer” approach is often more costly to the local taxpayer in the long term.
The EPA has long encouraged communities not already charging the full cost of service to increase water and wastewater rates up to the full cost of service, including the depreciation costs. The EPA believes that 3 percent of the community’s median household income (MHI) is an appropriate affordability threshold for the combined water and wastewater rates. In 2010, New Hampshire’s MHI was $60,917. Using an affordability threshold of 1.5 percent each for water and wastewater service would equate to charges of $914 per year each for water and wastewater, for a total of $1,828 per year. Many New Hampshire residents are paying far less than the full value for these water services today. It is expected that the investment need will be so great in some communities that this affordability threshold would be exceeded if all the revenue needed had to come from the rate payer. In these cases, creative strategies will be required to get on a sustainable and affordable path forward.
“Municipal wastewater user charge systems and asset management strategies could use some fine-tuning,” said Bill Brown. “Most communities have sewer rates that are below full cost of providing the service and are not adequate to position the community for long-term sustainability. By not funding system depreciation over the past 40 years, communities have shifted a disproportionate share of the inevitable asset renewal costs to the present and future generations,” said Brown.
In 2011, the New Hampshire chapter of the American Society of Civil Engineers (ASCE) gave New Hampshire’s wastewater infrastructure a C- grade, better than the national grade of D-, but still less than desired. In issuing its report card, the ASCE commented that the lack of a national funding source and the state’s aging infrastructure continues to lower the grade.
Unlike the 1970s and 1980s, there are no federal subsidies available to fund the design and construction of the next generation of wastewater facilities or the improvements necessitated by age and evolving regulatory drivers. The combined federal and state funding of approximately $26 million per year falls far short of the existing demand for treatment upgrades.
Unfortunately, solutions to New Hampshire’s wastewater infrastructure needs cannot be solved overnight or by a one-size-fits-all approach. For many reasons, including technological, political, and economic, WWTF upgrades must be solved on a town-by-town basis due to site-specific influent wastewater characteristics, and treatment and discharge requirements based upon the receiving water body, whether it is a stream, river, or estuary. Solutions to these challenges will require a mix of public education, public policy considerations, greater stakeholder involvement, and, most importantly, the political courage at the local level to set water and sewer rates that reflect the true cost of providing these essential services to the public.
Tim Fortier is the Government Affairs Advocate for the New Hampshire Municipal Association. Contact Tim at 800.852.3358, ext. 384, or email@example.com.
Sources and Author Acknowledgements
Special credit and recognition to New Hampshire Department of Environmental Services Administrator, Wastewater Engineering Bureau, Paul Heirtzler, who provided much time and information for this article. Wright-Pierce’s CEO and President, Bill Brown, also devoted much time to provide expertise on the subject matter and conducted an extensive peer review of this article.
Valuable input and contributions also from: Jennifer Perry, Public Works Director for the Town of Exeter; and Shelagh Connolly, President of Resource Management Inc. and selectperson in the Town of Holderness.
This article cites extensively from the New Hampshire Water Resources Primer, prepared by DES, published December 2008; Final Report on HB 1491 (Commission to Study the Publicly Owned Treatment Plants), dated November 2007; Final Report on HB 699 (Commission to Study Methods and Costs of Sewage, Sludge and Septage Disposal), dated November 2008.
Additional information for this article was also gleaned from the DES website, www.des.nh.gov, including fact sheets and other informational materials on the topic.
Find links to these and other resources online at www.nhlgc.org/nhma/ongoingtopics.asp.
- New Hampshire Water Resources Primer
- Delayed and Deferred Wastewater State Aid Grants
- 2011 ASCE Report Card
- Final Report on HB 699
- Final Report on HB 1491
- Average Sewer Use Charges
System Spotlight: Town of Exeter
The Town of Exeter’s wastewater infrastructure has 25 miles of pipe, 10 pump stations, and 3,400 connections, of which 95 percent are residential and 5 percent are commercial. Nearly 80 percent of Exeter’s residents out of a population of over 14,000 are connected to the town’s sewer systems. To fund Exeter’s future wastewater program needs, a ten-year capital costs study estimated an average annual cost of $8 million per year, or a total of $80 million over 10 years.
“Currently Exeter’s wastewater treatment infrastructure is comprised of aerated lagoons which were installed before nutrients in wastewater were a concern,” said Jennifer Perry, Director of Public Works with the Town of Exeter. “We have other challenges, too, including combined sewer overflows, an EPA order, a long-term control plan, and a requirement to reduce clean stormwater inflow and groundwater infiltration into the sewer system.”
Based on these new requirements, Exeter will be investing in a new wastewater treatment plant with enhanced nutrient removal at a cost of up to $50 million. Exeter will also incur $20 million in inflow/infiltration costs and another $10 million in new sewer mains over the next 10 years. Of the total cost, $70 million is federally mandated.
Voters in Exeter understand the need for making these improvements and recently approved five bond articles related to water and sewer projects totaling $10.6 million in infrastructure improvements. One article requested $375,000 for the purpose of creating a wastewater facilities plan to begin design on a new wastewater treatment facility as mandated by the EPA. The town’s current lagoon system will not meet the new standards for nitrogen loading as issued in EPA’s new discharge permit. The costs of these improvements will be paid back by users through increased sewer fees. As a result, sewer rates are likely to increase from the current rate of $4.44 per 1,000 gallons per quarter to $20.72 per 1,000 gallons per quarter, representing an anticipated 365 percent increase in sewer rates, unless state or federal grants are made available.
In 2009, DES found the Great Bay estuary did not meet the criteria for nitrogen concentration. Subsequently, the EPA has issued three draft National Pollutant Discharge Elimination System permits (Exeter, Newmarket and Dover) to require nitrogen removal to 3 milligrams per liter. Currently Durham and Rochester are waiting for their draft EPA NPDES permits to be issued. The cost to upgrade or build these new wastewater treatment plants surrounding the Great Bay estuary is well over $300 million dollars.
One idea advanced in the State Legislature this year was introduced by Rep. Adam Schroadter of Newmarket. As introduced, HB 1501 sought a voluntary contribution of $25 per toilet from property owners for a fund to upgrade wastewater treatment plants and failing septic systems. Although the bill was deemed to be “unworkable,” the Legislature sent the bill to interim study for further review and consideration. DES estimates that up to $33 million could be raised by HB 1501 depending on the level of voluntary contribution.
“I hoped to open up a conversation at the Legislature about issues along Great Bay,” said Rep. Schroadter. “Several communities face multi-million dollar wastewater treatment plant upgrades to meet the new nitrogen discharge limits. I am trying to pull all the pieces together to try to achieve something positive. Not only clean water in Great Bay, but also some relief for our communities and the property tax burden they may be facing.”