Members Present: Carol Merrill, Mona McCready, Jennifer Morin, Gabby Daneault, Dan Howe, Brian Duchesne, William Barnett, Thomas Gilligan, Larry Anderson, David Eaton and Peter Viar

Excused Absent: Robin Pelletier, Robin McAfee, and Tom Irzyk

Others Present: David Jodoin, Jim Rodger, Dana Clement, and Mike Trainque of HTA Associates

Jennifer called the meeting to order 7:00 p.m.

Robin Pelletier will be on a leave of absence for a while. Her classes were once a month on Thursday and they are now on every Thursday.

Jennifer thanked Dave for doing the minutes of the December 2 meeting because there was no recorder for the meeting.

Larry made a motion to accept the minutes of the December 2 meeting, Carol seconded. Jennifer stated that she wanted to make one change, Bill Barnett had e-mailed that he would not be able to make the meeting and she did not see the e-mail prior to the meeting, so he should have been an excused absence.

Tom G. wanted to make sure that the 10-year bond was going to be the least expensive as stated on page 3 of the minutes. Dave stated that the estimates were for 10, 15 and 20 years.

The motion passed with one no vote (Tom G) and one abstaining vote (Bill).

Jennifer stated that the Committee had already discussed the Highway budget, but that they were just waiting for the tonnage amount. Jennifer stated that they amount for the tonnage was $140,090.

Tom G. asked what the total budget was for the Highway Department. Jennifer stated that it was $487,555.

Peter made a motion to accept the Highway Department bottom line of $487,555, Gabby seconded.

Larry stated that the paperwork that the Committee received from the Sewer last week, this amount was $115,000 why is it now $140,090. Jennifer stated that this is for the trash pickup. Peter stated that this is for the Highway Department not the Sewer Department.

David J. stated that the $115,000 is for the sludge disposal, the $140,090 is for the trash disposal.

The motion passed unanimously.

David J. stated that January 11 is the last day to post a notice for a bond over $100,000 and January 18 is the last day to hold a public hearing on the bond.

The School department is holding their public hearing on January 11, 2005 the Town public hearing can be held on Saturday, January 15, 2005 at 10 a.m. The School Deliberative session will be held on Thursday, February 10, 2005. The Town Deliberative session will be held on Saturday, February 5, 2005 at 10 a.m. at AES. Peter stated that we need to make sure that the heat is on before the meeting, then they will have to shut off the blower so people will be able to hear. Jennifer will speak with Tom I. regarding this matter.

Jim Rodger explained that the first page of the budget only contains operating costs for just Allenstown. It has nothing to do with the plant.

He explained the Engineering line. Jim explained that this is engineering costs that have to do with a plan for separating, currently there is sewer crossing the river and commingling with Pembroke sewer, then comes back across the trestles further down the Suncook River. What the Department would like to do is to have a small pump station near Suncook Pond Apartments; the sewer would then be pumped down to Main Street.

Tom G. asked if this $48,000 was only for the project to redirect the sewer, did it have anything to do with plant expansion? Jim stated no, this money has nothing to do with plant expansion. Tom G. asked if this cost is solely incurred by Allenstown and is not shared with Pembroke. That is correct.

Tom G. asked if Jim could break down this amount in man-hours, etc. Dana stated that there are three things that this amount is associated with, 1) we constructed a new line to divert the flow from the Main Street Bridge to Canal Street. As part of that project, in the manhole that was placed at the corner of Canal and Main Street, there was an 8" stub that will be going up Main Street. Approximately $15,000 of that amount is for construction administration during the project that the State is going to do. We have an agreement with the State and they will be installing that line from that corner to the corner of East Webster Street. The balance of that amount is for design of where this line leaves off all the way to the corner of Library Street near the Town Hall as well as construction administration for that portion.

Peter asked if this is strictly generated on to the Town by the bridge construction. Dana stated that the only other reason is to eliminate the liability of the river crossing. Peter asked if this had been an issue before? Dana stated that the line is getting to be 30 years old and there is concern about it starting to leak.

Tom G. stated there are three parts, $15,000 is matching funds for the State force agreement for the main from Canal Street up Main Street, correct? Dana stated that they are not matching funds, they are strictly funds from Allenstown.

Second was to remove the river crossing? Dana stated that second was a continuation of the force main from where the State contract stops at the corner of Main and East Webster Street up East Webster to Library Street all the way up for design and construction administration.

Dan asked if this line would go all the way to the new pumping station. Dana stated not quite, we will still have to go cross-country, but we wanted to get the portion on Library Street done because the Town wants to redo Library Street. It is a lot cheaper for us to do the pipes and then have them repave it then it is for us to do the whole project.

Jim stated that it may be several years before the project is totally complete, so we are doing it in sections. We are trying to stay ahead of the State because once they pave that road, the Sewer Department cannot touch it for at least five years. Jim stated that the State will be paying for some of this work, Dana stated that they are eligible for the 20% grant program, however, we will not see that until the Pump station goes on line and the line is used.

Dana explained again that the second part is strictly for the design, everything has to be engineered before it is built. The third part is for the construction administration for the actual instillation. Jim stated that the engineering cost is for watching the job being done to make sure it is done correctly.

Jennifer asked about the Legal Costs. Jim explained that this figure is a guess at this point. The Sewer Department is having legal action from Holiday Acres, the complaint was that the Department had a base unit charge of $30 for commercial property and $16 for residential property. Their complaint is that since all those homes are residential and there is nothing commercial or industrial there, therefore it is not costing the Sewer Department any extra to clean that water. So the Department brought up the residential fee and brought down the commercial fee so everyone has one basic unit charge. The Department thought that this would fix the problem, but they are insisting on back changing us for the last 9 or 10 years. Dana stated that they also do not want to pay the unit charge, they want to pay only for usage.

Tom G. asked if the $10,000 is the estimate to fight this battle. Jim stated correct. Dana stated that in addition to this legal battle it includes legal charges to finalize a Municipal Agreement with Pembroke.

Peter asked if they were charging Holiday Acres plus every resident of Holiday Acres this unit charge? Jim stated no, they are just charging Holiday Acres. Dana stated that it is 312 units charged to Holiday Acres. Peter asked why the Sewer Department would deem them different then residential? Jim stated that it has always been commercial and they have been charged a commercial rate. Peter asked how they charge apartments, Jim stated that they have the commercial rate.

Dana stated that every community in the State is not charging a flat rate. A three family pays for three units. Peter asked why this would not be at a residential rate instead of a commercial rate. Dana stated that they have always charged by the classification of the property. If it were listed as commercial property, then they would be charged the commercial rate.

Jennifer asked if it was just the residential fees in Holiday Acres that went up or the whole Town? Jim stated that every single customer pays the same basic unit rate.

Dan stated that he understood the argument, because Holiday Acres is run as a commercial business.

Peter asked what the residential rate is now? Jim stated that it is $23.68. Jim stated that it was an average increase to the residence of $30 per year.

Jennifer asked about the Equipment Repair line of $1,500. Dana stated that this amount is a contingency for any breakdowns they may have at the pumping station on River Road. Dana stated that there is a seal that needs to be repaired and it will cost $1,200 to repair it. So the $1,500 is a conservative figure also.

Larry asked about the $10,000 increase in the Sewers Maintenance and Repair line. Dana stated that last year the Department spent $25,000 and it is basically a seven year program where sections of the sewer system would be flushed out and then TV it. We are going into our fifth year now and we are trying to go back and find all the problems that were found previously and repair them. However, due to backups, this past year was just for flushing and running the camera in the line because there were some backup and problems that needed to be repaired.

Tom G. asked if the payroll amount was the 2.5% increase? Jennifer stated that there is a whole breakdown on another page.

Jennifer asked what the increase was on this page? Jim stated it is $54,000 from the year-end estimate.

Dana stated that page 2 was to show the Committee where the capital reserve money would be going. Page 3 shows historical flows from the two Towns to show how they come up with the percentages for the breakdown for the Plant budget. Page 4 and 5 is basically the Plant budget, 44.9% of the Plant budget belongs to Allenstown and 55.1% belongs to Pembroke.

Peter asked why the flow fluctuates so much. Dana stated that most of the problem is with inflow and infiltration. During March, April and May, which are the wettest months of the year, we exceeded 80% of our capacity. Pembroke has more of an inflow problem and Allenstown has more of an infiltration problem. So if there is a lot of rain really quick, Pembroke’s flow goes way up and Allenstown’s flow just creeps up slowly. However, if there is a long sustained rain, Pembroke’s flow never jumps up and Allenstown’s flow keeps creeping up.

Jennifer asked if the heating oil increase was due to the higher prices, yes. Why has the price of water gone up? Dana stated that there are some substantial increases in a number of things, such as electricity, water usage, sludge disposal these increases are due to the Sewer Commissions decision to start processing septage at the treatment plant. Approximately $185,000 of this budget will be paid for through septage fees. This is sewer that is pumped from septic tanks that are delivered to a Wastewater Treatment facility for processing. It has been tried before without much success, but Dana thought that with the upcoming Plant Expansion that if he could raise any money for the Town, it would be helpful. As of Monday, we will be charging .07 cents a gallon for processing, it is probably costing us 3.5 cents a gallon. So the 3.5 cents will go toward offsetting the budget and the other 3.5 cents can go into a capital reserve account to be used for the Plant expansion. So in order to do this, there is about a $185,000 increase in the budget, because it will cost money, we will have to hire a new employee, we will be paying more water, electricity, chemicals and processing time. However, the fees that we will receive from the septage haulers more than cover the total cost.

Peter asked that since we are almost at maximum plant capacity, how are we going to be able to accept this additional amount. Dana stated that they can only can take up to the plant capacity. So in the spring, if there are very high flows, we will not be able to process any septage, however, in the summer, fall and winter, we average about 550,000 gallons per day. We could then process another 500,000 gallons a day. We are just trying to utilize the unused capacity of the treatment plant during the times that it is available.

Dan asked if they were trying to use the plant to capacity all the time? Dana stated that they will try to, but there will not be enough delivery to get to that point now.

Jennifer stated that the haulers are already bringing the sewage somewhere else, why would they start bringing it here. Dana stated it would be convenience because they now have to go to either Concord or Manchester. So with all the customers in Allenstown, Pembroke, Deerfield, Epsom and possible Candia, it would probably be in their interest to come here rather than Manchester or Concord.

Dave asked how this rate is compared to others. Dana stated that Manchester is .07 cents, Concord is 6.5 cents if you are within their district and 7.5 cents if you are outside their district so it is pretty competitive.

Jim stated that all the customers who are seeking to do this will be by appointment. So that the biggest priority will be servicing the two Towns. Dana stated that they have to call first to schedule a capacity reservation. If in the spring we cannot process any sewage, if they show up without calling, they will be turned away.

Tom G. asked what type of discussion has been held with the Sewer Commissioners from Pembroke on this. Jim stated that they had met with Pembroke and there were no objections. Dana stated that whatever amount of money they can raise, neither Town has to come up with. Dana stated that the projected profit for the first year is approximately $150,000 to $200,000 depending on how much they can solicit people coming to the plant and if they can get the processing abilities to be process enough and this will only be able to increase over time.

Tom G. asked if they had anything in writing from the Pembroke Commissioners that they agree with this decision. Jim stated that it is not affecting any of the plants and they are not looking for anything in writing. Tom G. stated that given the historic relationship that they could turn around and use this as ammunition in some way. Jim stated that as it stands right now, according to the last court decision, Allenstown has the responsibility of the day-to-day operation of the plant and we hold the permit from the State. We went to Pembroke and discussed this because we wanted some input from them, but the decision was Allenstown’s only. It all depends on how the plant is being run and what we have for flow, it is all according to whether or not we can accept the business certain times of the year. The times of the year that we can accept it and we are not infringing on our current customers, which are Pembroke and Allenstown, then we will take the extra business. If it starts to cause a problem, then we will have to hold off a little bit on this business.

Peter asked if this was discussed at a joint meeting, Jim stated yes, then it is in the minutes, yes. Peter stated that it is in writing.

Michael Trainque stated that the Department of Environmental Services has taken the position that anyone who operates a wastewater treatment facility is required to look at the option of including septic receiving and treatment as part of the upgrading and is almost obligated to include this if it is technically feasible to do so.

Dan stated that right now Allenstown owns the plant, it is in Pembroke, they are responsible for basically 55% of the usage, we are responsible for 45%, once we start taking in septic and collecting money for it, our usage goes up and theirs doesn’t, so are they still going to be responsible for 55%. Dana stated that it is not Allenstown’s usage, it is the plant’s usage. As long as it does not infringe on their allocated capacity, then they have nothing to say about it.

Jim stated that the profit the plant is making will be put into a totally separate account, just for the plant, it will not be commingled with any of the business in Allenstown or in Pembroke. It is just for the plan, so both Town’s are benefiting.

Jennifer asked about the engineering line. Jim stated that the $250,000 includes all the engineering cost associated with designing the plant as well as an environmental study. Mike Trainque referred the Committee to the top part of the chart shows the maximum daily flow recorded at the plant. The middle group is the average daily flow and the bottom line is the minimum daily flow. The heavy black line going across represented 1,000,050 gallons per day, which is the capacity of the plant as it exists today. The maximum flows are quite in excess of capacity. Even the average daily flow, particularly in the Spring months, like March and April it exceeds capacity.

Jim asked Mike if there were further explanation that he could offer on the $250,000. Mike stated that this cost is for designing the facility, including the cost of the environmental assessment that is required. We have been working on an evaluation of the plant to try to figure out what needs to be done to upgrade the facility.

Jim stated that they had also met with Pembroke regarding the engineering costs. Each Town already has this money set aside in the Capital Improvement fund, so we asked Pembroke if we could pay that out of the Capital Improvement fund and show it that way. Since the last court decision, it was explained that all the operating costs needed to be on the budget. We asked them if they we could take this amount from the Capital improvement and not show it on the budget. They did not agree with this. Jim stated that they would have preferred to take it from the Capital Improvement account.

Jennifer asked if we had to raise the $250,000 when it is in an account already? Jim stated that Allenstown does not have to raise our share on this, because by the time we will be using these funds, we will have it in the Capital Improvement fund. Dana stated that it is a Capital Reserve fund called Construction and Improvements. Jim stated that this will have no bearing on the sewer rates.

Tom G. asked which account was the capital improvement fund. Dana stated that it was SWTF Construction and Improvement Fund which as $90,398 as of 11/30/04. Tom G. stated that there is a shortcoming of $160,000 and how are we getting the additional funds? Dana stated that 45% of the $250,000 has to come from Allenstown, and the remainder comes from Pembroke. Tom G. asked if Pembroke is showing this amount on their budget, Jim stated yes.

Jim stated that once they start paying the engineers, all it will be is another cost of operating the plant. As the design phase kicks in and we start getting bills from Hoyle, Tanner we will submit the bill to Pembroke and they will pay their flow rate on it. Dana stated that if they would sign the Municipal Agreement, they would be locked in to 45% for Allenstown and 55% for Pembroke, but they have not signed it yet. Therefore, operating expenses get billed out to them on a monthly basis based on that month’s flow rate.

If they are billed in them in May, we could get 65% from Pembroke. Tom G. stated that if you bill them in July, they could only have to pay 50% and the rest would have to come from Allenstown. Dana stated that this would be the case only if they do not sign the agreement prior to work.

Tom G. asked if all the funds in the capital reserve accounts generated from the rates that are collected, yes.

Tom G. asked if Jim would highlight the other big-ticket items between year-end expense vs 2005 budget. The other big item would be sludge disposal, Jim stated that this is due to the new project. Jim stated that the budget is not that much more than the proposed budget from last year. We did end up staying within the default budget, but the proposed budget from last year, the new budget is only about $500 more. Jim stated that if you subtract the engineering cost of $250,000 and the extra that the septage project will cost, the different is about $2,000.

Carol asked why there was an increase in Uniforms. Dana stated that the uniforms are rented from a uniform company. Jim stated that they supply the blue jeans, shirts and jackets.

Peter asked once the budget is approved, how do they set the rates. Dana stated that you start with $1.1 and subtract the septic processing costs for a total of $850,937, then we subtract the estimated fees that will be coming from Pembroke, which gives the minimum amount of revenue that needs to be raised through user fees to meet the budget which is $382,149. Then you subtract the unit fee that will be received, this is a set amount every quarter so this tells us that we will have to raise through user fees $25,003.72. The minimum rates based on the number of billing units, to meet that budget is $3.36 per thousand gallons. At the current rate of $3.30 we would have net loss of $4,832.48 per year.

The Sewer commission looks at this amount to determine the minimum rate is and then tries to put a cushion in because this is all estimated, because we don’t know if we will have the same amount of usage as last year is may be more. So the rate would be $3.42 and this would provide a surplus of $4,155.56. The very last section shows the annual impact to each user of $6.54 on the sewer rate. The difference in rate from last year to this year is .12 cents.

Tom G. asked where the increase in the sludge disposal from $110,000 to $162,000 a difference of $52,000, is this removed from the rate calculation? Dana stated that the entire estimated septage cost is subtracted from the budget, that is why is starts at $850,937.64.

Tom G. stated that the $850,937.34 is the bottom line of $1,035,717.64 minus line item 860PLT. No, Peter stated that there are all many different lines within the operating budget that are affected by the new collection program. Such as Electricity line that went from $54,000 to $72,000; the heating that went from $6,993 to $10,000; the water line that went from $8,400 to $20,000, all of those additional cost plus the employee costs. All the costs that is related to receiving this additional septage, added together are deducted from the operating budget of $1,035,717. If you add all of those additional number together, they represent the difference of $1,035,000 and the operation budget of $850,937.64. The estimated is about $184,407.80.

Peter asked what the annual flow rate per household. Dana stated that there are 828 residential and 546 commercial units, if you add those together and divide it by 74,900, the average annual gallons per unit is 54,513. So if you take the amount and multiple it by .12 you get the $6.54 increase.

Bill asked why they were charging the same for commercial and residential customers. Jim stated that it is all an issue with Holiday Acres. Jennifer stated that she is really wondering if it should be the same. Dana stated that his understanding is that they have within your ordinance the ability to surcharge people for extra strength waste. If someone is sending you residential waste, there is really no basis to surcharge them in additional to anyone else who is sending residential waste. Therefore, unless there are special circumstances it is in the best interest of the Town to have a universal rate for a universal flow.

Jennifer stated that if you look at it from the other standpoint, someone who is not using the chemicals is going to be charged the same as someone who is. Dana stated no, the ordinance gives you the ability to surcharge people who are discharging special waste. Jennifer asked where that charge was on the sheets, Jim stated it had not been developed yet.

Jim stated that at this point, they averaged both unit charges. We did that because right now, we can’t substantiate a difference in the increase. The sewer from Allenstown, we don’t have a lot of industry, or a lot of things that will cost a lot of money for processing.

Tom G. asked what about the truly commercial properties that do not have residences on them, have no variances and by nature are generating truly commercial waste or mixed waste. Jim stated that there is nothing right now that really stands out to us. Dana stated that the Town has the ability to set that rate within the ordinance.

Dan stated that if someone comes in and opens a business with that type of waste, then the rate would be set.

Jim stated that most companies know that there will be an excessive load on the system. Mike stated that in Londonderry there is a Coca-Cola bottling plant, once they make the soda, they rinse out the batch tanks and there is a lot of sugar and syrup. The discharge facility is very high in biological waste. They had two options, they could either pre-treat it before they discharge to the municipal services or they could pay a surcharge to the Town. Their choice until now has been to pay the surcharge because they don’t want to have a treatment facility sitting in their front yard.

Peter asked when they went up to the $23.68 figure. Jim stated it was a couple of months ago. Peter asked where the additional revenue went since the residential rate went up $7.68. The commercial rate went down $6.32. Dana stated that we took 828 x 16 then took 546 x 30, took the total and divided it by the total number of units and came up with the same amount of revenue.

Peter stated that the increase to the resident went up more than the decrease to the commercial and there are more residence. It should have generated additional revenue somewhere. Dana stated that it is a total income of $16,380, so if you take 1,374 x 23.68 should come out pretty close to the money that was generated before. Peter stated that it had to have generated more money.

Dana stated that they had refunded about $12,000 to Holiday Acres. Jim stated that they also factored in an amount of money that they compromised. Jim stated that they will rework the numbers and figure out how they come up with the rate.

Tom G. asked if the money they refunded was on advice of council, was there a public hearing. Jim stated that it was between attorneys. Peter stated that if they have to make a settlement at Town level, they will not seek the approval of the taxpayer. Tom G. stated that if this amount is part of their tax rate and there is a bond on the issue, the taxpayer would have to approve it.

Jim stated that there may have been some compromises in anticipation of an extended lawsuit. This is putting a lot of stress on the Town, they are still holding funds back on sewer commission.

Peter stated that his point was that they went from raising $16,000 to raising $30,000 with this fee. Carol stated that she does not understand why the residences have to be punished for something like that. Why we have to pay all these extra dollars because of the businesses. Jim stated that he can’t go into all types of detail right now because it is still in the courts.

Dana stated that page 6 is basically a breakdown of the 875PLT Plant Projects. Gabby asked if all the windows had been changed. Dana stated not all of them but in 2004 we contracted $37,312 to change all the rest of the windows at the plant.

Jennifer stated that she needed a lot of help on page 7. Dana stated that basically all the employees are listed on the left, what position and the first block is where they were salary wise at the beginning of 2004, the next block is where they were after their July salary adjustment and the 2004 projected is where they will be at the end of the year.

Then 2005, the Commission recommended a 1.5%, on an annual basis, increase. Jennifer stated that last year it was 6.2, 5.7, and 4.5, yes. Dana stated that the bottom says new employee, there is nothing there for 2004 but is in the 2005 budget. Dana stated that bottom section is just the stipends for the Commissioners.

Tom G. asked if Dana could go over each line and inform the Committee of the net increases.

Ernest Beauchesne, 2004 income, $27,456; projected 2005 $35,625.20. Keep in mind that Mr. Beauchesne does not work full time, he is on semi-disability. We have to plan on him working 40 hours because he may come back to full time at any time. Tom G. stated that this is roughly $8,000, yes. Jennifer asked if this increase was only the 1.5% salary adjustment. Peter stated that is because the $35,625 is based on him working full time, the $27,456 is only working part-time. Everyone else is receiving a 1.5% increase.

Tom G. asked if 1.5% is the average for all employees, yes. Dana stated that the salaries are based on a 40-hour week for everyone. Tom G. stated that the 1.5% means that the sum total of all employees hourly rates based on what they would have been getting last year if they had been working a 40-hour week is 1.5%. Correct. Dana stated that he also included a $10,000 contingency for overtime due to the increased processing time for septage.

Dana stated that page 8 is just a worksheet for the insurance calculation on payroll. Jennifer asked if the Sewer Department had offered health insurance before. Dana stated that they would have to look at the line item in the Plant budget.

Page 9 is a combined Plant and Town budget, this shows a total budget of $1,151,000.

Page 10 – in 2004 the only project was for the installation of the sewer main going down Canal Street for $215,574, there is approximately $13,000 remaining to pay on this project. In 2005 there is $3,000 in the budget for a sewer system asset management system. Part of the CMON regulations is that the entire sewer system must be inventoried. This is just for GIS to locate all the obstructions in the system. The Main Street Force Main is the extension of the force main from Canal Street up to East Webster, and $50,000 for the installation of the force main from East Webster to the corner of Library. This is not in the budget, this is totally from capital reserves.

Page 12 is the revenue, the only line items that are included in the revenue is the actual revenue items. We do not include interest or refunds, because we have to use revenue to calculate the rates. Sewer fees projected at $386,000, sewer fees from Pembroke of $468,000 and Septage fees of $301,000 for total revenue of $1,156,093. Jennifer asked why the 2004 year to date was part of the default budget. Dana stated they submitted a default budget last year so the line for the 2004 budget are the default numbers. Jennifer asked why they would have a default number on revenue. Dana stated that he did not submit a default revenue, he just labeled that column on each page.

Tom G. stated that the year-end estimates are almost $100,000 more than year to date. What is that based on? Dana stated that they have not done the last quarter billing yet, so it is an estimate.

Tom G. stated that the sewer fees Pembroke, year to date is $198,709, year-end estimate is $347,587, so this is less than Allenstown. Dana stated that the revenue is based on their percentage of the plant budget. Allenstown has to raise more revenue because they have to raise the revenue for their budget in addition.

Jim stated that the Pembroke line is what they pay to have their water processed. The one above that is Allenstown and they pay for the infrastructure as well. Jim stated that Pembroke has to pay this amount plus what they have to maintain in Pembroke.

Tom G. stated that at the bottom of the page the 2005 budget, it looks like we are budgeting for roughly $80,000 more to come from Pembroke than Allenstown. Why is that? Dana stated that it is due to the increase in the plant budget.

Tom G. asked for a breakdown of the $301,000 revenue from septage fees. Dana stated that it is approximately 10,000 gallons per day for 6 months and approximately 20,000 gallons per day for 6 months, five days a week at 10 cents a gallon.

Gabby asked what would happen if they did not get this much septage. Dana stated that if they do not get the revenue, then they do not incur the expense. If we get more septage, then it will cost more.

Page 13 is basically a P&L statement and the bottom section shows the distribution of any surplus. The $4,600 surplus is based on the rate. It is at the Sewer Commission’s discretion as to what account they want to put it in.

Peter asked about the 2005 Pembroke revenue is higher because of increased operating costs? Dana stated that it is from increased Plant budget. Why would those numbers not be consistent with 2004 year end? How can the percentage shift? Dana stated that the $386,304 is based on the revenue that you are going to raise at the proposed rate. You can’t raise any more revenue unless you change the rate. The $486,000 is a percent of the plant budget based on historical flow.

Peter stated that if they were 55% and we were 45%, how can they pay less than Allenstown this year. Dana stated that this has no bearing on expenses, this is an estimated amount of revenue on the rate, this has nothing to do with the plant budget. Peter asked why they would raise that much more, Dana stated that the budget went up. $347,000 is about 55% of the budget we had this year, $468,000 is 55% of the $855,000 budget.

Dana stated that the revenue in Allenstown is not changing much, because it is based on the money you are to raise, it has nothing to do with the expenses. The Pembroke portion has a lot to do with the Plant budget. The Plant budget went up, so instead of $347,000 we will get $468,000 from them.

Jennifer stated that the Allenstown rate is not from the Plant, yes. Dana stated that if you take out the $301,000 it would look the way you want it to look.

Dana stated that the difference between the $21 that they come up with and the $23 they came up with was to make up the difference from the first quarter because they had already billed this out at $16 and $30 instead of $23.68 and it was figured on an annual basis.

Peter stated that they collected in the first quarter based on the $30 and $16 rate, $29,000 in quarters 2, 3 and 4 you raised $32,536. It is $3,000+ more per quarter and on an annual basis it is $13,000. There is no making up for the first quarter, because you got what you wanted, $16 from the residents and $30 from the commercial. There is really no balancing anything out, because you then went to a flat rate of $23.68 the net result of one versus the other is that you went from $29,628 to $32,536. If you had left the rates alone, you would have collected $13,000 less.

Jennifer stated that she would like to see something more broken out regarding the rates in more plain English before the Committee votes on this.

Tom G. stated that this is a very difficult budget if you don’t work it day to day to understand and he wanted to commend them for putting it together because it probably took six months to put together.

Jennifer asked if they could come back next Thursday with answers to the questions, yes.

Peter would like to see the difference between conventional sequencing and membrane on the engineering costs. Mike stated that the plant that is there now is a version that activates sludge. What we have now is basically, is a screening and removal of heavier solids and then it goes to tanks. The sludge gets settled out, then it gets disinfected and then goes to the river. Option 1 was to convert this to a conventional process, which means you have to add primary clarifier, and there is an additional step.

Sequencing Batch Reactors is a whole different process. It is highly computerized and has more flexibility. There are certain limitations to the conventional activated sludge in terms of the degree of things you can achieve. This offers some advantages in that regard. The sequencing batch for active process is also highly computerized. Peter asked if this gives us a better discharge with the oxygen issue in the river, yes.

Tom G. stated that option 2 is a better option. Mike stated that they are trying to figure that out. These are preliminary costs. Peter asked if all three of the plans provided additional capacity, yes.

Option 3 – Membrane – essentially this is a biological step, but there are porous membranes in it and it is filtered through the membranes. It provides a much higher level and it is at a much higher cost.

The other thing that we have looked at the projected operational maintenance cost for the various options. Because you then get the complete picture of the capital expense plus your operating cost.

Tom G. asked what the average life expectancy on the membranes and how many are in a plant that you visualize to present to the Town. Mike that it is about 24 membranes and the average life expectancy is about 20 years. Tom G. stated that where membranes are biological, they need to be replaced when they become contaminated, yes that is correct.

Dan asked what if the State Environmental Agency decides they will up their specs, will all three of these plants be ready to coordinate. Mike referred everyone to the Estimated Cost of Upgrade Alternative sheet, along the bottom is the risk, and this is the ability to meet the treatment requirements. Unfortunately, that is an unknown. But there is a current limitation to the total pounds per day that can be discharged into the river. Based on the meeting that was held with DES, we know that the mass loading is not going to increase, it could decrease, but it will not increase.

The low risk alternative is the membrane system, but it is also the most expensive. The Sequencing Batch Reactor is looking pretty good, because there is a lot of flexibility in the system.

Jim stated that the biggest reason there were three options is because right now, we are not really sure what the State will come up with. We have to have better quality.

Peter asked Mike if his firm actively participates in the grant writing? Mike stated yes, and this is why he has included the information regarding the plant upgrade in Rollinsford, NH. The project cost about $2 million and that included planning, rezoning and construction. During the planning phase, we were able to help the district get a $25,000 grant from the NH Coastal Program. And in the interim construction financing was provided through the NH DES Revolving Loan Program. We also submitted an application to the Rural Development, which is a very good deal because they will give you the loan money but along with that they will include matching grant money up to 45% to certain communities, Allenstown is one of those communities.

In Rollinsford case, the DES program paid 30%; Allenstown is eligible for 20%. The reason they got 30% is because their sewer usage charges are more than 20% higher than the NH Statewide average. We will submit these applications, but Allenstown is guaranteed 20% from DES. The other grants are not a guarantee. The EPA Special Grants comes from a program that is called State and Fibral Assistant Grant. This originated through one of the federal congressional offices, in Rollinsford’s case that application was originated with Senator Gregg’s office in Portsmouth. This has to go to Washington and then put into an appropriation bill then needs to be approved. The first time Rollinsford applied for this grant, it did not pass, the second time it went through the House and Senate at the same time and it had a better chance of surviving a conference committee. We put in an application for $1 million but got $300,000.

The problem with all of this stuff is that the funding is getting so competitive, they have to give out the same pie and the awards are getting smaller.

The other sheet was a plant upgrade in Epping, NH. This was a $5,000,000 million and we were able to help them get two grants. The State and Fibral Assistant Grants, they were two separate grants; one for $1.9 million and the other was for $2 million. The DES grant was the 20%. So Epping’s share was approximately $100,000 or 2% of the project.

The last page of this handout is included to give the Committee a sense of HTA’s history of estimating project costs. Mike stated that there would probably be some information flyers going out and probably a couple of public hearings to explain the information to the Town. Mike stated that they work closely with the EPA and with DES also. Mike stated that they will work closely with Dana and the Sewer Commissioner to get help with the costs.

Tom G. stated that the next agenda item was to discuss any school budget questions because we wanted to give Tom I. and the School Board areas in their budget where they needed to focus on for our discussion next Thursday. Jennifer would like to have any comments to be e-mailed to her and/or the budget committee by Monday, December 13.

Carol stated she had concerns about the 8^th grade laptops that is a lot of money. If they want to try for a new building, they have to cut back somewhere. That is the biggest problem in this Town is the school, it is not all their fault, but you have to conserve somewhere.

Tom G. stated he had a concern about the Computer Technician, which was a total impact to the Town of about $48,000 including benefits.

Peter stated that there are over 700 users of the computers in the School, and he is adamant that the package for a computer technician is far less money than if we have to bring a contractor in here to start analyzing, which has been done before, is significantly more money because of the fact that everything is piecemeal. You have 12 different operating systems, PCs that go back to 386 versions, up to the new one. I know that they can get spoiled with the current technology, but quite frankly, if we aren’t going to run current technology, we might as well through the program away. When they get to High School, all they are going to see is current technology and if they get there with computer skills and all they have learned on is 386, 486 type of machines, then we will waste a lot of money on the front end of this. If you want to thank someone, we can thank the Governor for bringing new laptops and then not providing us any way to grow that program throughout the school.

Carol stated that you can’t have everything, we need a new police station too. Peter stated that he knows that, but when you see the warrants, you will recognize that we have done a lot to take things off the warrant.

Peter stated that if you go to the school and spend any time taking with the 7^th graders, they eat, sleep and breathe with those laptops. To go from that 7^th grade program to a 8^th grade program with literally nothing. Carol stated that they bought some last year. Carol stated that we had this argument with them last year, that we didn’t want them to buy them, they came out and they bought some because they got a good deal and they could not resist them.

Carol stated that the kids had to pay $100 in order to bring the laptops home. Peter stated that this had to do with the Governor’s laptops. Peter stated that last year there was about 40 items on the warrants and this year there is about eight.

Peter updated everyone on the Building Committee. The Board of Selectmen voted to approve the warrant for the Police Station for $725,000. The project was approximately $698,000, which included the purchase price, all the modifications and the things that need to be done to make inhabitable to eliminate all the liability issues and have a completely functioning facility. We made a decision to put $25,000 above that number as a contingency. There is still the $125,000 warrant to come from surplus, so we would bond about $600,000. There is a good chance that we will not use the bond bank we will probably go to Bank of New Hampshire. They have offered us the same rate as the bond bank and the bond bank will charge us $6,000 to process the bond and about another $1,800 in fees, the Bank will not charge us any of these fees. The Bank will give us the money almost immediately because of our bond rating, whereas the bond bank cannot fund until July and the person at the Tractor place does not want to wait that long.

Mona stated that the people who were not on the Committee last year need to be aware that although they may say they are taking x number out of the budget, it does not matter because the School Board decides what they want to take out. So if we say take out $100,000 they will take it out anywhere, they will not take it out of our suggested areas.

Tom G. stated that this is a good point, because although we can recommend how much to cut, they can appropriate or reappropriate the cuts to any line item. Last year during the discussion, specifically about the laptops, what happened was that because it was such a good deal, they cut the dollar amount out of the budget but kept that line item and appropriated accordingly.

The next meeting will be December 16 and we will review the Personnel budget, the warrants, the Sewer then the School. We will meet at 6:30 p.m. instead of 7 and we will meet at Town Hall.

Dan made a motion to recess, Mona seconded. The motion passed unanimously at 9:30 p.m.