Chester board hears that audits will show no deficits, reservoir dam recommendations

By Shawn Cunningham
© 2026 Telegraph Publishing LLC

At last Wednesday’s meeting, the Chester Select Board got a bit of good news when Town Manager Julie Hance announced that there was no negative fund balance or deficit for 2024 or 2025.

Back in January, Hance said that although the town received a clean audit for FY2024, she learned that the auditors also stated a $303,000 deficit for that year. She also noted that due to reduced state income and unforeseen expenses, a deficit was possible for 2025.  Hance said she thought there were errors in the 2024 audit and that the auditors would look into that when working on the 2025 numbers. At that time she said that income from end of 2025 billing would reduce or eliminate any underage.

After a recent meeting with the auditors, Hance said they confirmed there was no deficit in 2024 or 2025. She said the apparent 2024 deficit had to do with how payments of education taxes collected by the town were disbursed to the school system.

Hance expects to receive the the 2025 audit and the “restated 2024” audit later this month and that Ron Smith of auditing firm RHR Smith will be meeting with the board at 5 p.m. on Wednesday, June 17, to go over the audits and answer questions. Those will include why the auditors did not specifically report what they thought was a deficit in their audit letter.

“If there’s a negative in the audit I want to know,” said Hance, “If it’s a $20 deficit I want to know.”

At the June 17 meeting Smith will also provide some education on reading the financial statements contained in the audit. That will be a public meeting with a Zoom link for remote participation.

Reservoir Dam study deems hazard potential significant 

Hance also told the board that she has received the draft study of Chester Reservoir Dam, which the state required following flood damage in July 2023, which caused the dam to receive an “unsatisfactory” rating.

That study, conducted by Fuss & O’Neill of White River Junction, now will  have to be reviewed by the state Department of Environmental Conservation for what next steps will be required and allowed. The upshot of the study is that the “hazard potential classification” is “significant.” There are three classifications according to the report: High, Significant and Low. A high hazard level has a potential of loss of life while a significant level may involve economic and environmental damage.

Fuss & O’Neill says there are three options for the dam, which was built between 1910 and 1915. The firm also estimated the costs of each option.They are:

• Removal of the dam, which would drain the reservoir and turn it into a stream. Estimated cost is $500,000.
• Lower and widen the spillway to increase the capacity for discharge during storms. Estimated cost is $450,000. This option is recommended.
• Add an inlet pipe to help the reservoir discharge water when the level goes up. Estimated cost is $630,000.

The engineers note that removing the dam eliminates the hazard altogether and has the greatest chance of finding funding for the work. The inlet pipe adds complexity and maintenance issues to the dam while lowering and widening the spillway (to 25 feet), increases the rate that water can be discharged in a storm and keeps the reservoir at a level required for its significant hazard status.

Funding for anything but the removal may not be available, but Hance said she is checking with FEMA to see if there is any funding possible since the problem is associated with the July 2023 storm. She also noted that there will be amendments to the analysis from the Dam Safety Project.

After some discussion, board members agreed that the decision on the dam’s future needs to be made with the involvement of the public since the reservoir, which is no longer part of the town’s water system, has been used for recreation for quite a while.

Rather than a full dam removal, board member Peter Hudkins suggested that the dam could be breached in such a way that it could drain slowly until it becomes a stream. That would leave the concrete structure in place.

“Then somebody like me walks through in a hundred years and says ‘wow there was a mill here,’ ” said Hudkins.

Trustees of Public Funds to offer grants to town 501(c)3s

Trustee of Public Funds Cortlandt Pennell told the board that the Trustees were embarking on a new way of spending the funds in their trust. He said that historically those funds have been donated to the town to support the welfare, education and cemetery needs of its residents. The Trustees are a three person board of elected volunteers who manage the donations given to the town over the years.

Pennell said an argument could be made that the funds donated as far back as 1832 have been expended and that now the trustees are managing the interest on those funds. With that in mind, the trustees are embarking on a grant program open to organizations that have a tax exempt 501(c)(3) status and are in good standing with the IRS. There will be two grant cycles each year for grants of up to $5,000 that benefit the residents of Chester.

“We’ll see how this goes,” said Pennell. “We’ve never done this before.”

Board chair Lee Gustafson asked if the Trustees could administer the funds that go to social and health services organizations that are voted from the floor at Town Meeting. Gustafson suggested that the town could give the Trustees something like $40,000 to manage those donations. The “voted articles”  approved at Town Meeting Day this year totaled a little over $46,000.

“You guys read my mind. That makes a lot of sense to me,” said Pennell, noting that voting on articles for those organizations at Town Meeting seemed “kind of odd.”

You can find the Trustees of Town Funds grant request application here.

Board adopts fee schedule and ethics measures

The board adopted a consolidated fee schedule, an updated Conflict of Interest Policy and a state mandated Code of Ethics Investigation and Enforcement Ordinance.

The fee schedule combines the fees charged by town departments into one document. According to Hance, some have been increased but remain below the average of neighboring towns. Hudkins said he thought the fee for a deck or porch addition was too high at $200 plus 15 cents per square foot charge. The board agreed lowering it to a flat $25.

The Conflict of Interest Policy has been updated to align with state statutes. The Code of Ethics ordinance however is new and arises from a recently enacted statute.

By law, the public has a right to petition a vote to disapprove the ordinance. The details for such a petition are here.