News analysis: Wading through the depths of Chester’s water system upgrade

By Shawn Cunningham
© 2015 Telegraph Publishing LLC

On some Tuesday in the next few months, the voters of Chester may be asked to decide whether to upgrade the municipal water system to the tune of more than $4 million. An engineering firm hired by the town says that the upgrade will solve a number of deficiencies and bring the system in line with state codes, but there are several variables wrapped up in this project, some of which may complicate the question for voters. With this article, The Telegraph will begin to look at the proposed water project and what it means for Chester.

An old water system

With cast iron water mains more than 100 years old, the Chester municipal water system dates to a period in which there was less demand and fewer technical standards. While there have been upgrades that included the Jeffrey Well and pump station and the  1 million gallon Pierce Brook water tank on Reservoir Road in the 1980s, standards continue to outpace improvements.

The Vermont’s “water supply rule,” dating from 1992, sets out the standards for constructing, maintaining and operating municipal water systems and, as Chester’s system has aged, the gap between what exists and what should be has widened.

At the March 6 fire on Elm Street, two hydrants were opened near the fire, according to Water Superintendent Jeff Holden, but it was still necessary to draw from a hydrant in another area and move the water by tankers.

Currently, the pumps at the Jeffery Well fill the Pierce Brook tank and water pressure in town is a matter of gravity flow from an elevation of about 900 feet above sea level. With groundwater supply from the well running at 400 gallons per minute and average daily usage in town of 145,000 gallons, the pump at the Jeffery Well needs to run less than half the day. High demand – during fires for example – drain the tank more quickly and prolong the refill time. Still, the engineering study says that the source of water for the town is sufficient for now and into the foreseeable future.

Fire trucks line up along Grafton Street to fill their tanks at a hydrant. Telegraph photos.

Fire trucks line up along Grafton Street to fill their tanks at a hydrant on March 6, 2015. Telegraph photos.

Distribution, on the other hand, is less satisfactory. While water pressures range from 95 to 160 pounds per square inch under normal conditions, firefighting operations reveal some of the system’s shortcomings.

The supply rule mandates that a minimum pressure of 20psi must be maintained under all conditions, but if that is done, “needed fire flow” for six out of nine test locations in town would not be available. For example, the needed fire flow for Green Mountain Union High School is 3,000 gallons per minute but if the mandated 20 psi for the balance of the town was able to be maintained, only 600 gpm would be available to fight a fire at the school. Near Town Hall, the needed fire flow is 2,250 gpm, but only half that is available at 20 psi.  Currently, minimum pressure for water users cannot be provided during all conditions.

About two-thirds of the 13-mile system is comprised of  8-inch pipes; 17 percent are 6 inches in diameter or smaller. The water supply rule mandates a minimum pipe size of 8 inches for fire hydrant lines but these can only provide water at 750 gpm.

At the March 6 fire on Elm Street, two hydrants were opened near the fire, according to Water Superintendent Jeff Holden, but it was still necessary to draw from a hydrant in another area and move the water by tankers. “This is why I have been pushing the upgrade,” said Holden. After pumping 400,000 gallons from the Pierce Brook tank, firefighters began drawing from the Williams River near the sewage treatment plant.

Another problem is that since there is only one storage tank, it cannot easily be taken off-line for maintenance. In the event of a problem with the tank, there would be no backup.  Still another problem is that a major pipeline — a 10-inch asbestos cement main on Route 103 — is fragile and nearing the end of its useful life.

The Dufresne proposal

Naomi Johnson of Dufresne Group Engineering looked at alternatives for curing the deficiencies and is recommending the the town put a half-million gallon tank on the east end of town (behind Green Mountain High School) with 12-inch pipe to the main and replacing 3,600 feet of the 10-inch main along Route 103 with 12-inch pipe. In addition, Phase 1 would replace the 4-inch pipe on Breezy Lane with 8-inch pipe.

According to Johnson, these measures would resolve all of the fire flow and minimum pressure problems. While this would help with bringing the system into compliance, Johnson also recommends a Phase 2: Replace water mains on Coach Road and Elm, Canal and High streets and upgrade service for the sewage treatment plant, town garage and Chester-Andover Elementary School.

The Town of Chester owns an acre of land behind GMUHS, which is at the proper elevation to provide water pressure from a second tank.

Costs and options for financing

The cost of Phase 1 as outlined by the Dufresne study is $4,050,000. This includes the tank and piping to the main for $1,535,000, Route 103 main and Breezy Lane construction of $1,108,000, contingencies of $790,000, legal and administrative costs of $30,000 and engineering of $510,000.

There are two sources for low-cost financing – USDA Rural Development and the Vermont Drinking Water State Revolving Fund. Each of these agencies lends money at below-market interest rates. How low the rates go depends on the economic health of the borrowing municipality. Each has its own lending guidelines including maximum loan, length of loan and interest rate. In addition, the agencies differ on how they handle what is allowed to be built, how they calculate the interest rate and what is the optimal portion of income a user should be paying for water.

A Walpole firefighter opens up a hydrant on Grafton Street during the  March 6 fire.

A Walpole firefighter opens up a hydrant on Grafton Street during the March 6 fire.

Chester’s Median Household Income — MHI — is a big part of figuring the interest rate. The USDA uses 2010 Census numbers while the state uses 2000 Census figures with a 4 percent annual raise. Because the more recent Census figures are much lower than the older figures adjusted up over 14 years, it appeared that the USDA would be a better deal until the state agreed to use the Census numbers from an overlay that eliminates most of the area outside the water district, reducing the MHI number. For these purposes, the poorer the town appears, the more favorable the loan terms and downtown Chester has a much lower MHI than the rest of the town.

Because Chester was ahead on planning the water project, monies unused by by other water projects in Vermont in 2014 were available for Chester. Eric Law of the Drinking Water Fund told The Telegraph that the money could be earmarked for Chester until June 1, and that a bond vote before that would be best. Law added that if no other ready-to-go projects come on the scene, the money would still be available for Chester. “After June 1,” said Law, “it’s not guaranteed, but it’s not no.”

Eric Law of the Drinking Water Fund said that if no other ready-to-go projects come on the scene, the money would still be available for Chester. “After June 1,” said Law, “it’s not guaranteed, but it’s not no.”

A vote scheduled for the last Tuesday in May would need about six weeks of warning, so plans would need to be finalized and warned around the second week in April. Although the users of the water district would be responsible for paying for the upgrade, the town as a whole needs to vote on the proposal because the water district is not an entity that can borrow through a municipal bond. In effect, the town is voting whether or not to co-sign for the water users.

Other issues come to the forefront

According to town manager David Pisha, Johnson had approached him in September with the idea that moving the proposed tank from the site behind GMUHS to land owned by Mike and Amy O’Neil would save the town money by reducing the length of pipe and roadway needed. Pisha confirmed in a Select Board meeting that he approached the O’Neils and asked to buy 1 or 2 acres behind the car wash on Route 103.

He said that the O’Neils refused to sell a portion, but offered the 139 acre parcel for $399,000, which is $95,700 (or 31.6 percent ) above the property’s assessed value. The Select Board discussed the proposal in a closed door meeting on Nov. 19, 2014. On Dec. 17, 2014, the Select Board discussed the proposal in an open session as if for the first time. It also talked about spending the Cyprus Minerals fund and setting up a gravel extraction operation to pay for the purchase.

While enthusiastic about a cheap supply of gravel, some board members expressed skepticism about the income and expense numbers provided by Pisha. Board member Derek Suursoo then called for a business plan that would show how the transaction would work. To date, no business plan has been offered in a public session.

In an interview on Tuesday, Pisha told The Telegraph that the O’Neils had land studies done. “Various testings, extractions, test pits have been done,” said Pisha. “Surveys have been taken that show good indications that there is a large amount of gravel there to be recovered.”

“In one 5-acre section,” said Pisha, “gravel runs to about 20 feet deep – that’s more than 150,000 cubic yards in just that small portion of the property.”

From one  study, conducted for the town by Everett Hammond and dated September 2011, it appears that the town was considering purchasing the land at that time.

Pisha noted that while the O’Neils have shared some information from studies, the town does not have copies of them. But one such study was conducted for the town by Everett Hammond and dated September 2011. The study appears to have been written the week of Sept. 4, 2011.  It appears from the study that the town was considering purchasing the land at that time. The study does not say when the test pits were done, but they appear to predate Tropical Storm Irene, after which the gravel pit was reopened and a considerable amount of gravel was extracted. You can read that study here.

According to Pisha, even after being told that the O’Neils would not sell just 1 or 2 acres to the town, the town never considered the use eminent domain, with reasonable compensation. Vermont’s eminent domain statute lists a number of projects for which private property can be taken for a public good. These include highways, utilities, public buildings, sewers and sewage treatment, flood control and water projects. Instead, the 139-acre proposal was presented to the Select Board.

But that may yet prove problematic – especially in structuring a bond issue for a vote, since according to Law, the state will only loan for land purchases at the price established by a independent appraisal. In the current real estate environment, it is conceivable that the market value of the O’Neil land could be even less than the town assessment of $303,300.

In addition, Law told The Telegraph that while the state would lend for the purchase of “needed” land, he was not certain that they would lend for 139 acres when only 1 or 2 are needed.

Another consideration is Act 250, which governs the environmental and aesthetic issues of development in Vermont. The O’Neil property was part of an Act 250 process that went on to appeal before the Vermont courts. While municipalities are not exempt from Act 250, they fall under a different process according to Julie Hance, assistant to the town manager. Pisha told a March 18 Select Board meeting that he had talked with a gravel pit owner who told him that Act 250 would take a year to a year and a half and cost $50,000 to $75,000.

Act 250 District 2 coordinator April Hensel, told The Telegraph that she had been asked to research these questions and could not yet give an answer. Hensel did confirm that the municipal process is different, but would be made more complicated by the underlying permits.

In the interview with Pisha on Tuesday in which the town manager had Johnson on the telephone, The Telegraph asked whether the concept of a water tower instead on a ground-level tank – which could place the site closer to the Route 103 main — had been considered.

Johnson, Pisha said, called a water tower “feasible” but said it had never been considered since its aesthetic impact might be objectionable for some. Eric Law noted that it did not matter whether it’s a tank or a tower: “If it’s cost-effective and and solves compliance issues, it’s no problem.”

A further complication was raised at the March 18 Select Board meeting, when board member Heather Chase questioned whether there is a conflict of interest in the recommendation of the O’Neil property by Dufresne Group’s Naomi Johnson. Johnson and Amy O’Neil are sisters.

Next steps to an upgrade

If a vote on borrowing for the upgrade is to be held before June 1, a number of things need to be made clear in the next two weeks. Issues that cloud the main question have the potential to sink the vote, so The Telegraph  will be watching to see what path the Select Board will take to structure the question or questions that go before the voters.  The water project is on the Select Board agenda for tonight Wednesday April 1.

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