Apr 12

From the Town Administrator's Desk - April 9, 2021

Posted on April 12, 2021 at 9:57 AM by Tiffany Marletta

40B LIP Negotiations End Without Agreement
By Gregory T. Federspiel

The LIP (Local Initiative Project) negotiations between the Board of Selectmen and SLV, the applicant for an apartment complex at Shingle Hill, have ended without an agreement.  At the Board’s public negotiation session on Tuesday, April 6, Mr. Engler of SLV concluded that it was no longer in his best interest to continue the negotiations.

The 40B project will no longer advance as a LIP.  If the developer wishes to pursue the project, he will need to seek a project eligibility letter through the state rather than as a LIP.  This conventional approach requires a separate set of procedures, including a new filing with the state and a public comment period before issuing a project eligibility letter.  Once this letter is issued the applicant applies for a Comprehensive Permit before the Zoning Board of Appeals.   

The negotiations faltered over how much autonomy the ZBA should have.  The developer proposed 157 units.  For Manchester, this is a “large project” under the rules governing 40B projects (over 6% of a town’s year-round housing units.)  Large projects by law are afforded “safe harbor” meaning that the ZBA’s decision is final with no appeal to the state’s Housing Appeals Committee.

This was a critical aspect of the Selectmen’s willingness to negotiate a LIP.  The developer was asked in the first negotiation session if he applied for a high unit count with the expectation of reducing the number.  He stated no, he was committed to the 157 units knowing that this constituted a large project.  The Selectmen started down the path of negotiations with this same understanding.

Six months later a lot has transpired.  As the developer noted, the political landscape of the community has come into much sharper focus, a nod to the considerable work of the Citizen’s Initiative for Manchester’s Affordable Housing.  The developer desired assurance that the ZBA would not exercise the safe harbor option.  But this is not an assurance the Selectmen could legally provide given the autonomy of the ZBA.

The effort by the Selectmen would have meant retaining local control; in the end the developer concluded this was not something he was willing to accept. 


Apr 05

From the Town Administrator's Desk - April 2, 2021

Posted on April 5, 2021 at 5:30 PM by Tiffany Marletta

April 2, 2021
An Overview of Town Finances
By Gregory T. Federspiel

Our Annual Town Meeting, where voters will decide on next year’s municipal budgets, has been delayed until June 21. None-the-less, we are seeing an uptick in discussions about town finances.  There are certainly many aspects of a town’s budget.  In the end it is the choices voters make that determine how much in taxes is collected and what services these dollars provide.

By many indicators, the Town is on sound financial footing.  We enjoy a Triple A rating from the bond agencies.  We have a very healthy raining day fund, and we are on track to fully fund our retiree liabilities (pensions and health insurance obligations.)  We have increased spending on capital improvements as we reinvest in our infrastructure that has suffered from years of deferred maintenance.  Grant funds, totaling over $6 million dollars in the last 6 years, has been a helpful assist in our capital improvements.  Our tax base is stable with modest new growth annually. 

Town and School services are at high level, often above that of comparable communities.  Staffing levels are stable with the exception our call fire fighter force which has shrunk precipitously.  Our multi-year projections indicate that operating costs exclusive of schools can be accommodated with annual tax increases no higher than 2.5% annually.  For the current year we got by with a 0% tax increase (mainly by scaling back capital projects in light of COVID) and the target for next year is for a tax increase of 1.5%.

The accomplishments noted above have been accompanied by relatively high tax increases over the past 15 years driven in large part by borrowing for capital projects, including two school projects, and three operating override votes (two for the School District and one for the Town.) School District operating costs are projected to grow faster than other expenses and are a challenge to accommodate within the limits of Proposition 2 ½ year over year. The cost of a third school project is likely to be before us in the not-too-distant future.  Longer term we face the need for major upgrades to town facilities and the challenges that rising seas and more damaging storms present.

Our increased capital spending, made possible by a combination of allocating more general fund dollars and utilizing annual capital exclusion votes that track the decrease in annual bond payments, tops $3 million a year.  Roads, sidewalks, drainage, replacement vehicles and new water and sewer pipes make up the bulk of these investments.  Our cash approach to capital improvements is working well for improvements that are below a few million in total costs (we sometimes set aside dollars over a few years to afford a particular project.)

However, larger capital improvement projects will require us to borrow funds.  If we want to borrow without the need for new, large debt exclusion votes that increase the tax rate, then we will need an expanded tax base.  This has been part of the rationale for exploring new zoning to allow greater options for new development in the Limited Commercial District which lies to the north of Route 128.   A focus on commercial development in this area in town could generate between $2-$3 million in new tax revenue.  Assuming $2 million becomes available for capital debt service and combining this new revenue with redirected funds once our retiree liabilities are fully funded in another 12 or so years, would mean some $4 million in annual debt service could become available.  This translates to some $70 million in funding for large capital needs.

What are these needs in the next 15 years or so?  The possible list includes major rebuilding/flood proofing of the sewer plant ($15 million), a new DPW facility ($14 million), seawall and other adaptation measures to rising seas ($15 million), a new Public Safety facility ($18 million) and Library expansion ($8 million).  A new senior center should be possible through use of our reserves and private donations. With luck we can time the new elementary school in Essex with the retirement of the Middle/High School debt.  Decisions to move forward with these projects and determining the actual costs are years away but this gives a flavor of the large capital projects we will likely need to tackle. 

The Town is in relatively good financial shape and can meet most of its operating needs with modest annual tax increases.  School operating expenses pose a bigger challenge but if the District can live within an annual increase of 3 to 3.5% then, again, we are in a pretty good position.  Capital investments aimed at maintaining what we have are also doable within our current revenues.   The biggest challenge we face is funding large capital projects in the 10 year time horizon.  Of course, there are always “wild cards” that throw off the best of plans – a major hurricane that hits us for example! Whether we want to start laying the groundwork for increasing our commercial tax base for these future needs or rely on current taxpayers to shoulder more debt is a question that will be debated in the coming months as we look at possible amendments to our zoning regulations.   

 




Mar 29

From the Town Administrator's Desk - March 26, 2021

Posted on March 29, 2021 at 9:18 AM by Tiffany Marletta

March 26, 2021
Our Water and Sewer Systems
By Gregory T. Federspiel

With all the attention development proposals and options for new zoning are receiving, there has been renewed interest in the status of the Town’s drinking water and sewer systems.  These utilities are often taken for granted but they are critical parts of our infrastructure that provide essential services to residents. 

Thanks to the foresight of community leaders decades ago, the Town has a fairly robust water system.  The Town purchased Gravely Pond and the surrounding lands that straddle the Manchester/Hamilton town line for the purpose of preserving an important watershed for the Town’s drinking water supply.  Even before this, conservation efforts began in the 1870’s to preserve Cedar Swamp and its environs which feed Sawmill Brook and the Town’s well further downstream at Lincoln Street. These two sources supply us with our drinking water.

Back in 1985 the state issued what is called a registration certificate for the Town’s water system.  Given that no detailed capacity studies were done at the time, the state issued a daily withdrawal amount as part of the registration most likely based on an average of preceding annual usage. Our daily registration number is 0.72 million gallons a day (MGD).  If water use consistently exceeds the registration number by over 0.1 MGD the state will require action be taken to seek a more formal permit with the requisite additional studies and system improvements.  Over the last 36 years our daily average consumption of water has been on either side of 0.72 MGD, typically within plus or minus 10%. The average for the last four years has been under our registration number.  Even in drought conditions and high annual consumption our water supply has always been adequate.

Obviously, there have been new homes built during this time but with more efficient fixtures and improvements to the water pipes reducing leaks, our actual usage has not materially increased.  A large percentage of total water use in town goes towards irrigation.  Summer use is some 2.5 times higher than winter use with some very large users skewing the average household consumption calculations.  Dryer seasons drive up water usage more than any other factor.  It is likely that the state, as part of their registration renewal process, will require us to reduce the amount of water going toward irrigation. (Using drinking water for irrigation is increasingly frowned upon.)  

A few years back we were losing as much as 40% of our water through leaking pipes and major breaks.  We have cut this nearly in half as we replace pipes and valves throughout the system.  We will continue to make improvements which will further reduce our annual usage.  Other improvements, including using recycled water as part of the treatment process at the sewer plant rather than fresh drinking water, and accurately tracking the water that is returned to Gravely Pond as part of the plant operations, will further reduce our water consumption. These efforts should result in over 100,000 gallons a day in lower water use. (Household water use per state Title 5 regulations is calculated at 110 gallons per bedroom per day – actual water use tends to be significantly lower.)

Meeting future water demands will require continuing our pipe replacement work, finding new efficiencies in operations, and, likely through a state mandate, reducing irrigation use.  We also have the possibility of contracting with Gloucester to serve the eastern end of town should we ever need to.  Providing adequate water supply for current and future town residents is an obligation of the Town and one we are prepared to meet.

On the wastewater side of the equation, here, too, we have seen considerable investment and improvement over the past 8 years.  Our treatment plant is permitted to process 0.67 MGD.  Back in 2013 the state issued a consent order requiring system improvements because we had reached 80% of our permitted capacity over the previous 12 months.  State requirements are that when a treatment plant reaches 80% of capacity a town must undergo an analysis of its system, remove unnecessary water getting into the system and complete a Comprehensive Wastewater Management Plan. 

The Town has completed the CWMP (though the state has asked for some updates) and has made good progress on removing infiltration and inflow.  Through this work (primarily replacing or lining sewer pipes) we have brought our flows down to a daily average of some 0.45 MGD.  Again, efforts continue to remove the unwanted infiltration and inflow which will further free up plant capacity.

The CWMP anticipates that most of our unused capacity will be for in-fill development within the existing sewer district.  We will continue to rely on on-site septic for most areas outside of the sewer district, whether individual systems or possibly small communal systems.  The benefit of this approach is that water replenishes ground water levels rather than being released into the ocean as is the case with our sewer plant.   

While municipalities can sometimes slow down growth to allow their utility infrastructure to catch up, these measures can only be temporary.  Proper zoning and staying ahead of future demands are the tools best to use to guide the future development a community desires.