City flushes out $51m for sewer project

NASHUA – As expected, the city will bond $51 million to pay for the biggest projects in the required combined sewer upgrade.

Some aldermen have expressed regret that the money wasn’t borrowed a few years earlier.

The $51.325 million bond resolution approved Tuesday named two specific projects: a wet weather facility adjacent to the city’s wastewater treatment plant, and a screening and disinfection facility that would be built off of Bridge Street along the Nashua River.

Mayor Donnalee Lozeau described these as the two largest projects in the upgrades to the combined sewer system, which carries and treats both sewage and rain water runoff.

However, other projects totaling $28 million also must be done between now and 2011, said Mike Gilbar, the city’s chief financial officer.

The wet weather facility is already operating, and the money would be borrowed to replenish cash in retained earnings and capital equipment reserve accounts. Those accounts were drawn down to pay for the construction of the facility, city officials said.

The bond would be used to complete the $70 million project, which federal environmental officials have required the city undertake to reduce pollution flowing into the Nashua and Merrimack rivers.

Aldermen this spring approved a 15 percent increase in sewer fees. A rate study has recommended increases of 15 and 10 percent in the next two years.

The sewer system’s operating expenses outpaced sewer fee revenues beginning in 2005, causing the city to dip into cash reserves. The deficit is partly because the Board of Public Works approved a 30 percent rate cut in 2003, when operating revenues were about $2.5 million more than expenses.

Now operating expenses exceed revenue by more than $700,000.

The shortfall happened because required financial analyses weren’t done at a time when cost of the sewer overflow project skyrocketed, city officials have said. Had that study been done, smaller rate increases would have been approved before now and the city would have had to borrow less money for the combined sewer project, Lozeau said.

At the request of Alderman-at-Large Brian McCarthy, Gilbar gave the aldermen’s budget review committee several models for borrowing the money. McCarthy had asked if the city could borrow less and pay back the depleted retained earnings and capital equipment reserve accounts gradually.

Combined sewer systems are sewers designed to collect a mix of rainwater, household sewage and industrial wastewater in the same pipe, according to the federal Environmental Protection Agency.

Most of the time, the systems transport all of the wastewater to a sewage treatment plant, where it is treated and then discharged into a body of water – in Nashua’s case, the Merrimack River. During heavy rain or periods of snowmelt, however, the volume in a combined sewer system can exceed the capacity of the treatment plant.

For this reason, combined sewer systems are designed to overflow occasionally and discharge excess wastewater directly into water bodies, according to the EPA.

However, the overflow in Nashua has exceeded the amount allowed by the EPA, causing the agency to require the city to lessen the amount of pollution entering the Merrimack and Nashua rivers. The EPA has been working with the city on a timeline for the improvements.

Patrick Meighan can be reached at 594-6518 or