The Town will be asking for a loan from the State to fund a watershed study for Pawtuckaway Lake but the loan principal will be forgiven when the watershed study is finished so the Town will not owe any money. All the interest that accrues during the term of the loan will be paid for by the PLIA.
Read the following paragraphs for additional information.
What Does it Mean?
The Warrant Article, if passed, allows the Town to apply for a Clean Water State Revolving Fund loan. The funds will ultimately be used to pay for an updated watershed plan for Pawtuckaway Lake. Even though the loan, if granted, will have the principal ultimately forgiven, state law requires that the Town must have the authority and ability to repay as if the loan were not going to be repaid. That is the reason why the Warrant Article mentions that the Town would be authorized to issue bonds to repay the principal of the loan even though it would not be needed in this case. The Warrant Article also states that the PLIA will pay any and all interest on the loan. It is estimated that the total interest would be around $1500-$2000. It also mentions, in addition to doing the watershed plan, the possibility of doing some mitigation actions. If done, these would be quite small activities, more in the nature of feasibility studies than the relatively major mitigation activities that might be specified in the watershed plan.
What is it For?
The PLIA would like to update our watershed plan which was last updated in 2008. While a watershed plan has many parts, in essence its purpose is to determine the factors which affect the health of a water body and recommend mitigation actions to improve it. While we have several reasons for wanting this update, the primary reason is to determine the factors which are leading to an increasing level of phosphrous in our lake. While any excess nutrients in the lake are a problem, phosphorous in particular, can lead to bigger and more frequent cyanobacteria blooms. We had two such blooms last summer leading to recommendations to stay out of the lake for periods of time since they can cause serious illness and possibly even death. With an updated plan we can understand the most effective mitigation actions and actually get a start on the major mitigation work.
Why a Loan?
Developing watershed plans is a complex activity and requires hiring experts to do the work in conjunction with information from local residents. The cost to update our plan is estimated to be between 65K and 100K. We hope to get the necessary funding from a federal program, the Clean Water State Revolving Fund (CWSRF), which is administered separately by each state. In NH these loans have to be given to a town rather than a lake association or other non-governmental body.
How Does it Work?
As stated above, the way NH administers the program is to provide the loan to towns. These loans are like lines of credit in that interest accrues only as the money is requested by the town. When the purpose for the loan, namely an updated watershed plan, is complete, the Town informs the State that the loan should be closed. Having fulfilled the loan purpose, the State then forgives the principal. The net result is that the only thing that is owed to the State is the interest on the loan.
Summary
The Town will be asking for the money directly but the PLIA in consultation with the Town will engage a consultant to actually perform the work. The key here is that the Town is required by the terms of the loan program to be the middle man but the Town incurs no financial obligation other than a tiny amount of administrative work. Of course, none of this is a guarantee that we will qualify for the loan even if approved by the town voters. If the Warrant Article is approved, we will work with the Town to provide a pre-application to the State by May 31st. After a vetting process to determine loan candidates, the actual loan applications are due in the fall.
