. United States,
Environmental Protection Office of Water
-,' Agency ' . (WH-550)
EPA 812-R-93-002
March 1993
INSTITUTIONAL SOLUTIONS
TO DRINKING WATER PROBLEM:
MAINE CASE STUDIES
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1 es
Institutional Solutions to Drinking Water Problems:
Maine Case Studies
Introduction .
Implementation of the Safe Drinking Water Act (SDWA) Amendments of
1986 has created major challenges for drinking water systems across
the. State of Maine? The capital cost of the Surface Water
Treatment Rule alone will range from $300 million to $500 million.
The Maine Rural'Water Association (MRWA) estimates that the cost of
compliance for larger systems with at least 1,000 connections will
double customers* bills. Compliance costs for smaller systems will
increase customers1 bills by 200 percent to 400 percent, depending
upon the availability.of grant funds. '
Beyond the initial capital outlay, the SDWA Amendments demand
levels of operator training, water testing, and management
.capabilities that utilities will have difficulty meeting. New
requirements have put enormous pressure upon the smaller water
systems, which .are run by volunteer boards and part-time operators.
To make matters more difficult, water systems are also, responding
to new and expensive mandates in areas such as worker safety and
financial reporting. Also, the rural communities served by these
utilities are not only facing increased drinking water costs, they
are handling other environmentally related"expenses, such as waste
treatment and solid waste facilities and landfill closings.
Most small public and private utilities will have great difficulty
complying with the amended SDWA. If rural communities want
economically viable water suppliers f they must be innovative.and
.adaptive in creating or altering institutions to provide safe
.drinking water at affordable prices. Small towns can utilize a
.number o"f institutional and management formats to .achieve goals
such, as securing state: and federal grant money, streamlining the
decision-making process, or developing new community public water
supplies. . , , . '_
Water systems are public institutions which fit into the framework
of the local political process. Special care must be given
whenever this process is altered. In general, voters make good
/choices for their community when they are given reliable
information on a range of alternatives. The timing/ the method and
the relative ease of change varies from town to town, but solutions
are found. , . ,
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This paper recounts how four Maine communities sought and found
institutional.solutions to drinking water problems. Each scenario
describes the system, outlines the problems, reviews the chronology
of events, points out the lessons learned and gives the system's
current status. The analysis includes ah example of a private
water company restructuring ,into a public water district, a
municipal water and sewer department converting into a quasi-
municipal utility district, a tiny water district cooperating with
a town to secure a grant, and a new water district formed to
provide potable drinking water to several.residents whose private
wells are contaminated. . . >
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, Case Study I
Quantabacook Water Company, Harrington, Maine
An Example of a Private Water Company
Restructuring Into a Public Water District
Background
Small, private water companies have the greatest difficulty
complying with the requirements ,of the Safe,Drinking Water Act,
Generally they were organized early this century to serve a small
number of residents in the developed or village portion of town.
There is usually no fire protection provided.
These Systems typically raised capital by selling a few shares, of
stock for' a very nominal sum. They rarely pay dividends or
compensate their .directors. Most systems are too small to .have
either a full-time operator or even a business office. Their rates
are usually fairly low (normally under $125 per year), and their
distribution systems are reaching the end of their useful lives.
Being private, these utilities cannot take advantage of the Farmers
Home Administration's (FmHA) low-interest loan or grant programs,
nor do they qualify for grants through federal or state economic
development agencies. r With low annual revenues and a basically,
weak financial structure, commercial bankers are .extremely
reluctant to provide long-term financing. Even if financing were
available, customer bills would easily.quadrupleinto the $500 to
$600 per year range.. , v. ,
The Safe Drinking Water Act Amendments have brought many of these
.utilities to a critical juncture; they simply cahnoti afford to
comply. Their options are either to go out of compliance or to
abandon service. Neither choice is attractive.
However, municipal water departments . and quasi-municipal water
districts are eligible for FmHA grants or loans. If the assets^of
a private company are transferred to a water district, the district
may apply for, and it is hoped receive, FmHA support. ^ Enough
gran;t money . and low-interest loans makes an impossible situation
.acceptable to the local community. Restructuring can make a non-
viable water utility viable. Safe drinking water becomes
affordable. -
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Maine, like many states, requires enabling legislation t;o create a
water district. The Maine Legislature has created new districts, in
Long Pond, Morrill, Columbia Falls, Harrington, Searsmont> Winter
Harbor and Rarigeley during the last three years,. All are
' communities with private water companies. Transition is complete
in Long Pond and Morrill, close to completion in Columbia .Falls and
Harrington and far from completion in Searsmoht, Winter Harbor and
Rangeley. While'the process of reorganization is fairly similar in
each instance, the order, ease, and timing vary.
Key components affecting restructuring are (1) the legislature is
in session, because only the legislature can pass enabling
legislation; (2) whether there are people in the community taking
an active role, because successful restructuring demands decision
making and action; (3) local.politics, because difficult
relationships between the company and the town and attitudes about
creating a new unit of government can take a long time to resolve;
(4) the ease of negotiating a sales price between the company and
the district, because there is not always consensus between the
parties; (5) the amount of regulatory pressure/ because government
action often serves as a catalyst; and (6) the intangibles, such as
the length of time necessary to move the paperwork through the
Public Utilities Commission or the ability to get a quorum at a
local referendum, because small details often consume great
quantities of time. As a general rule of thumb it takes between
nine months and three years to restructure a water system.
Below is an outline of the steps necessary to restructure a water
company into a water district. Although individual states vary
according to enabling legislation and the exact role of the Public
Utilities Commission, the fundamental concept of creating quasi--
municipal or municipal entities to take advantage of federal grants
holds nationally. Utilities in different states must, modify,
cpmbine or reorder these benchmarks depending on state law, rules,
and local custom. , . . "''.'; , ,'. ' ..-.'.'
The staff of Maine Rural Water Association plays an active role in
helping communities. find institutional solutions to_ drinking water
problems. This role includes equal measures of guide, councilor,
advocate, and friend. The Association does not charge for its
services because of the support it receives from the U.S.
Environmental Protection Agency, Farmers Home Administration, and
the State of Maine. The job requires an understanding of the
regulatory framework of the water industry and the legal and
institutional aspects of water systems. While rural water
associations are an important source of this type of technical
assistance, it can also be provided by trained individuals in
regional development commissions,, municipal associations,
reg^iatory agencies, and private practitioners such as attorneys
and engineers. '
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22 Steps to Restructure a Private Utility
1. Officers of the Water company meet to identify the problem
and discuss options. A Health Engineering Order or the
Surface Treatment Rule's filtration requirement usually
triggers events. Boards are often desperate for solutions.
Technical Assistance (TA) provider puts problem into
perspective and provides options to consider. Initial visit
is critical to establish trust and competency. Usually
requires two meetings. Options include- abandonment,.,
alternative methods of compliance and restructuring.
.2. Officers make a decision. Time depends .oh the degree of
regulatory pressure, cost of compliance and desire to
restructure. TA provider can .assist with research and
explanations of various scenarios.
3. Contact local legislators and draft water district enabling
legislation. TA provider is important liaison between
.legislators and legislative staff who draft bill. All work
-together to modify standard language.
4. Conduct public meeting about the water situation.. VUse the
meeting'to educate public, get support, and decide the number
of trustees and how . they are elected or .appointed. ; TA.
provider can either run the meeting or be available for
technical support. One or two meetings are necessary. Good
local media coverage is important..
5. 'Meet with locally elected public officials to educate them
about th£ water system and gain their support for enabling
legislation. In generail, officials like to hear from outside
experts but do not want to be preached to. ,
6. Testify in legislature on behalf of the bill. Legislative
1 committees often have certain requirements which the . TA
provider should be familiar with. Usually there is one
hearing and one work session on a non-controversial charter.
Controversial charters take longer.
7. Amend the bill as necessary. TA provider works with
. legislative staff to make necessary changes. ,
8. Bill passes legislature - water district is established.
9. Conduct one or two public meetings to explain drinking water
"^regulatory requirements and the role of a district. TA
provider and state agency officials are important participants
in these types of meetings to answer questions. ,
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10. Mail out" information /sheet to registered voters within
district.. TA provider can help prepare a concise one-page
- summary. , .-. .'--.'. '' ''. .' ' '"'' ' ' '' ' '"'.-
11. Conduct referendum on establishing a water district according
to municipal election laws. Municipal officials may use a,
municipal association'to solve election questions. '"Towns
handle this area very well.
12. Elect or appoint a board of directors, according to the
charter. Communities have ample experience with selecting
boards.
13. Board organizes itself. TA provider, accountant or Ipcal
attorney can help first board get organized. It takes two or
three meetings to work out some of the early questions.
14. District hires engineer to evaluate system and | recommend
improvements. , . . . . . .
15. District reviews engineering report and comments on compliance
alternatives and costs. <
16. District applies for FmHA grants and loans.
17. Company files with the PUC for permission to abandon service
and transfer the assets. Difficult to predict hovr long this
will take.
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18. District and company negotiate sales prices!. Most, but not
all negotiations are amicable. District's charter gives; it
power of eminent domain.
19. FmHA approves .grant.-and'.loan package. Baised upon financial
need^and availability of funds.
20. PUC approves transfer.^ ''. .. , /
21. District applies to PUC for new rates and approval to borrow
funds from FmHA. , .
"22. District purchases water company, finances improvements, comes
into compliance.
The .restructuring of the Quantabacook Water.Company in
Harrington, Maine is an example of the process of transforming.a
private drinking water system into a quasi-municipal water
district .
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The System'- ''.'.-.':. '':'.- ' V " ' ' /"-' " '' "' '' ' - '. ' ''...'
' ' ' - .''",- ..;''...''.. . '' \ " ' '''""''..'....."''.'''.''"''.'''
The Quantabacook Water Company has been supplying water since 1867
when a legislative charter authorized the company, "to construct; one
or more aqueducts from the Quantabacook Spring to the village of
Harrington." The town is located in Washington County, in an area
commonly known as "Downeast Maine." This and the. surrounding''towns
are economically hard pressed; much of the local income is
generated by endeavors such as blueberry, raking, wreath-making and
fishing. The median household income for Harrington in ^1980 was
$10,259, well below the poverty level.
The water company serves approximately 145 residential customers
located mostly, in the village. The source is a spring whose,
dimensions are 31 feet by 21 feet, which yields, about 100 gallons
per minute. Water comes into town by gravity feed through 4,800
feet of old unlined four-inch cast-iron pipe. The system has no
storage facility besides the spring's capacity; no fire ;
protection, no water meters, and no chlorination facilities. The
company has a three-member board of directors and 54 shares of
stock outstanding. It has rarely paid a dividend on its stock.
Revenue is around $10,000 per year and the; average annual
residential water bill ,is $75..00. The value of .total utility plant
in 1990 was $51,000. ,
The. Problem' " '.'.. ' . .'-.'''';. _N . ;. - '- ' "
'The system has been plagued by low wateV pressure,, no water in
various portions of town for extended periods, and unacceptable
Goliform tests. These problems are the result of a combination of
factors, including insufficient supply, undersized mains, growth of
water consumption, no storage, lack of a preissurized system and
leaks. The company has been on a continuous boil water order since
July .1991. ';; ' -/ . ... ' ' "'_. '..-.... ' ".' '-. .':..
The Chronology ' ' . ;
Throughout the mid-1980s, the Maine Public Utilities Commission,
which regulates the finances and service standards of all water
utilities, the Division of Health Engineering, the state agency
which enforces the drinking water regulations, and local elected
-officials received dozens ofcalls from irate customers about low
pressure or no water service. The company acknowledged the problem
and believed the source was leaks and over-consumption by a few
small businesses. The operator spent hours (largely unpaid)
searching for leaks and. had field assistance from the staff of
Maine Rural Water Association, Although the company found and
^repaired leaks, the problem and complaints persisted.
In 4she spring of 1988 the Division of Health Engineering (DBS)
conducted a sanitary survey out of concern about the low water
pressure and the potential for cross connections. As a result of
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the survey, DHS, ordered the company, to pressurize1 the;system by
June 1989 and to install proportion-to-flow disinfection . ,r.
eguipment. . ,.... i '
The executive director of MRWA began discussing7 with the board the
merits of restructuring the company into a quasi-municipal,,,water
district. The board members knew they would have
difficulty securing a normal commercial loan because of the
utility's weak financial position. They also acknowledged that
they should replace the entire distribution system and .construct
additional storage. They were .also aware of the state's proposed
wellhead protection program which would require them to conduct a
hydrogeological investigation and possibly purchase several acres
of land for protection.
While the board considered the merits of restructuring, the company
moved slowly, towards compliance with the engineering order. The
directors were very concerned about the project cost and about
depleting the $25,000 reserve fund. .They were also apprehensive
about the effect pressurizing the line would have on the aged
distribution system. ^ r
The directors agreed in the early spring of 1989 to transfer the
assets of the water company to a water district. They contacted
their state representative, .state senator, and the executive
director of MRWA. . The MRWA executive director and legislative
research staff prepared a draft of enabling legislation to create
the Quantabacook Water District Charter, A water district is a
quasi-municipal corporation authorized by the state legislature.
Its charter details the territory, powers, rights, and
responsibilities of, the district,. After the legislature approves
the charter, the municipality(ies) holds a referendum for the
registered voters living within the district. ' r /
Before the legislature approves a district charter, it requires an
endorsement from the town selectmen. The,water company directors
and MRWA sat down with the, selectmen of Harrington to ask for theirA
support. The directors reviewed the plight of the company and
explained how a water district can rebuild the system at a fraction
of the cost. The selectmen expressed concern about the town's
liability for the debt. They were assured that the town faced no
liability. ' . , :
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The selectmen endorsed the legislation and. supported holding a
water district charter referendum. The legislature unanimously
passed the water district charter and created the Quantabacook
Water District. ..<" ' \',''-
The .JCown of Harrington is fairly small. The relationship between
tKe directors of the company and the selectmen was good. The water-
district, like the company, would serve only the developed
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"village" portion of town, i.e. many people in town would still
not be on "town" water. - ' " ,
In September 1989, the company conducted an informational meeting
and sent out a mailing to voters regarding the proposed
restructuring. A town meeting arid referendum vote were scheduled
for November -3. The meeting went badly and the district was voted
down. Many people who were not on the water system had come to the
meeting to express their concern about town liability for debt.
They refused to pay for water they did not use. They were also >
concerned about whether FmHA would require fire
hydrants. The vote was 80-64 to reject the water district.
The town selectmen invited ah *attorney from the Public Utilities
Commission to a meeting in late November. The attorney answered
many of the questions posed at the November 3 referendum. Another
referendum was held in December, and the 75-20 vote endorsed the
creation of a water district. -
Meanwhile the company had still been moving slowly towards
compliance with the Division of Health Engineering's orders. It
hired a small engineering firm to design a booster station. The
engineer submitted plans .to Health Engineering and the Public
Utilities Commission in September 1989. The company began
construction soon after, did much of the work itself, and used the
reserve funds to finance the work.
. The station was located near the source of supply and went on line_
in January 1990. The aged distribution system was unable to
withstand the increased pressure and developed many new leaks. The
booster station was unable.to maintain pressure and eventually was
shut down. After repeated coliform bacteria violations, the
Division of Health Engineering ordered the company to issue a boil
water notice. , -
The district's enabling act specified the election process for the
first board of trustees. Unfortunately; the standard language did
not conform to local election laws. Therefore, in April 1990
officials sought and received from the Maine Legislature an
amendment to the original charter which permitted the municipal
- officers of Harrington to appoint the first board.
The new board has organized, hired an engineering firm to analyze
the system, negotiated a purchase price with the owners of .the
company, and applied to Farmers Home Administration for a grant and
a loan. They negotiated a purchase price, of $55,000 fairly easily;
it is approximately the net book value of the company.
The^engineering firm put together a $ 1.9 million project. The
project includes the development of. a larger and more reliable
water source, replacing 21,000 feet of undersized main,
-construction of a 300,000 gallon storage tank for fire
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protection, and - purchasing the company. An ap^licatioh for a ,
community facility loan and grant was submitted to the Farmers Home
Administration in the summer of 1992.
The FmHA determined that the district is eligible for a $1.3(5
million grant .and a loan of $536/500. The loan is at 5 percent
interest and will be amortized over 40 years. Average water bills
will go from $75.00 to approximately $261.00 per year. FmHA was
concerned about the rate increase and required a town vote to
endorse paying for fire protection. ' At a recently held town
meeting, the voters supported fire protection and the construction
of a standpipe. . . -
Current Status . -
The water district is eagerly waiting for FmHA to release funds.
Because of the enormous statewide demand for FmHA assistance,
sufficient grant monies are not now available. It is possible
money will be released from FmHA's "pool" prior to the next federal ,
fiscal year. The pool is a national reallocation of unspent grant
and loan monies. s
If financing is not'immediately available, the district will try
again in October. It may be necessary to scale back the project
and take less grant money in .order to improve the likelihood of
getting funded. i
Once the district gets financing, the company will ask for PUC
permission to abandon service and to transfer the assets to the
water'district. The PUC must approve the transfer and the purchase
price. The company will then buy back its stock and dissolve.
If the district does not receive federal assistance, the water
company is still faced with an extremely serious compliance
problem. It presents a great challenge to the town and the
ratepayers.
Lessons Learned . .
.The water system serving the Village of Harrington has reached t:he
end of its useful life and needs reconstruction. A. water district
with sufficient FmHA financial support can handle the improvements.
People can have safe drinking water, reliable service, and fire
protection at an affordable price. The water company cannot do
this project. Restructuring makes 'fundamental economic sense.
However, the decision to restructure is predicated on the
availability of federal financial assistance. If that assistance /
does^not develop, then other options must be examined. .
The other lesson learned is that the process can be time consuming.
Two pieces of legislation and three referendums were required to
get to this point. Openness, education, and trust were required ait
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each juncture. Communities work at their own speed to accomplish
these goals. Other towns.have moved through the process faster.
The regulatory -agencies have .been remarkably patient -,with the
company and the water district. There is, a realization thajb the
community is .moving forward, albeit slowly, towards coming into
.compliance.
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- Case Study II' . .
Fort Kent Water and Sewer Department - Fort Kent Utility District
An Example of a Municipal Hater and Sewer Department
Restructuring into a Quasir-Municipal Utility District
The System
The Town of Fort Kent is located on the Canadian border iri^northern
Maine's Aroostook County. . It has a diverse economic base,
consisting of light industry, services, agriculture, and forest
products. Its population is approximately 4,700 and its median
household income in 1980 was $14,442.
Municipal business, is run by five elected councilors^ and an
appointed town manager. The water and sewer department is under
the direction of a superintendent who reports directly to the town
manager and .council. He supervises a crew of six full-time
employees. } - . ,
The town purchased a privately owned water company'in December
1977. The system pumps an average of 290,000 gallons per day from
two gravel-packed wells. There is. a 750,000 gallon buried concrete
reservoir for fire protection. ; There are approximately 550
residential and 155 commercial water customers. Average water
bills for 2,000 cubic feet are $43.83 per quarter.
The sewer system has .approximately 1,100' customers.. Average
quarterly residential billing is about $56.25. The town has an
activated sludge secondary treatment process. There are a total of.
six pump stations. The facility treats about 325,000 gallons oi:
» sewage per day. ,
The Problem
The town must spend millions of dollars to implement a corrosion
control and wellhead protection, program, upgrade the sewage
treatment plant, repair a leaking oxidation ditch and find a
suitable site for sludge disposal. Since the spring of 1991 the
town council had been considering whether to keep the water and
sewelr department under municipal control or .transfer its
functions to an independent quasi-municipal utility district.
Some of the councilors felt overwhelmed by the volume of
environmental decision making required.-
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The Chronology :
The councilors invited the Maine Rural Water Association (MRWA)
executive director to. .attend a special meeting on October '15 ,.1991.
They wanted to discuss the advantages and disadvantages of
municipal versus quasi-municipal management of water and wastewat,er
systems. The councilors also wanted technical information on
restructuring utilities . The full council, town manager, and
superintendent attended.
The meeting lasted, several hours. The MRWA executive director
brought along a copy of a 1987 handbook on selecting different
organizational structures vf or running a water supply. He
stressed the following points at this first meeting:
Outside of the well-known infrastructure problems, both
systems are well staffed and managed;
Their water and sewer rates are below average;
New regulatory requirements in water and wastewater
demand more time and attention from boards;
..'. Water systems in Maine are managed by 85 quasi-municipal
districts, 34 municipal departments, and 16 joint utility
districts-; / '' "\ : .'! " - . . . '._'.' . ' ,
Although each organization ope'rates differently, no
: single type of organization is necessarily more
. efficienti. Each community can develop a system which
' . . : : , works; : ':'':"''. -> . . ' ' ''''' '-
Restructuring the water and sewer department irequires an
act of the legislature, approval by the Maine Public
Utilities Commission, and approval of the voters of 'Fort
'
A utility district is a new unit of government, separate
f rom town .government; and
Communities benefit from periodically evaluating the,
management of their infrastructure.
priority for councilors attention;" We should have a board that
onlf^concentrates on water and wastewater;" "We should keep utility
business away from town politics;." and "What's the problem/
anyway?"
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. t ...; ,. ',,f,'J;'ji;,^'"'"--,a;f ...... s» Si
;
At the end of the meeting " the town council decided to seek input
from the voters. Ori November' 15, 1991,- the following guest ion was
asked on a municipal referendum: "Shall the Town of Fort Kent
examine whether the affairs of the water and sewer department be
governed by an elected five (5) member utility district rather than
by the present town council?1' The returns were 584 in,favor, 376
opposed. .-, . ' .'..',''''''" '
After the referendum, the town manager organized a 19-member ad hoc
citizens' committee to examine the advantages and disadvantagesof
restructuring the water and sewer department into a .utility
district. The large committee was extremely broad based. It was
to make recommendations to the town council, with ; the MRWA
executive director acting as facilitator. '
,l
The first meeting was held on January 9, 1992 at the town office.
At the outset the group appointed a secretary arid decided that town
council members should not be present during discussions. The
committee would make written recommendations to the council
reflecting majority and minority opinions. : . |
The superintendent outlined the operation of the water and sewer
department. Many of the,group were unaware how these services were
provided. Next the MRWA executive director explained various
organizational, options for water and sewer systems. The group then
reviewed an MRWA worksheet on how to compare utility districts with
departments using the following criteria:.
Operating Expenses; , .
Salaries ~ .
Benefits
Rent'
Billing
Supplies
Utilities . -
Insurance
Regulatory
Transportation
Equipment ,'.."
Legal '
Decision Making; ,
Ease of Decision Making
Expense of Decision Making
Speed of Implementation
Financing;
Ease of Financing
Cost of Financing
Organizational Efficiency!
Ease of Administration
Cost of Administration
Utilization of Staff ','.
Utilization of Equipment
Responsiveness of Customer Needs
Responsiveness to Community Heeds
The town staff was to research the data sheet components arid report
back'!*" Each member of the ad hoc committee was given an opportunity
to express an opinion. The superintendent made arrangements for
the committee to visit Fort Kent's water and sewer plants on
January 18. 'Finally, the group divided into three subgroups and
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planned to visit and -interview joint utility districts in,
neighboring towns before the next, meeting. . ;
The ad hoc committee met again on February 6, 1992. Members filled
-in the comparison sheets based on the research of the town staff/
input from the MRWA executive director, arid the field interviews
conducted by -the three subgroups* Giving everyone an opportunity
to visit a functioning utility district was1 -extremely helpful. ;
Committee members worked well together and arrived smoothly at a
unanimous decision. They recommended the water and sewer
department be transferred to a joint utility district. The town
council endorsed the ad hoc committee's recommendation and asked
the MRWA executive director to draft a bill for the legislature
creating the Fort Kent Utility District. . .
The bill passed unanimously and was signed into law by the governor
on April 6, 1992. The legislation permits the Town of Fort Kent/
upon approval of its voters, to convey the water and sewer
department to a, quasi-municipal utility district. The legislation
grants certain powers and rights to the district, sets up-a method
of electing five trustees, and details a referendum procedure.
A referendum held in Fort Kent on May 6, 1992, asked: "Shall the
Fort Kent Utility District be created?" The response was 61 in
favor, 16 opposed. The first municipal utility in Maine was
restructured into a joint utility district. Voters elected its,
first Iboard of trustees on June 9>, 1992.
The new board members face great challenges. They must learn a
great deal about utility operations in a short period of time.
They are excited by their task and a little surprised at the extent
of their responsibility^
Current Status '.-,;'
The town and the district are working together on transferring the
assets from one organization to another. There is an enormous
amount of paperwork and some expense involved with transferring
-titles, insurance, easements, contracts, etc. The Public Utilities
Commission eventually must approve the transfer. All, however, is
moving forward.
Lessons Learned
This restructuring taught many positive lessons:
Towns are capable of reorganizing the management of their
infrastructure in a very positive manner.
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While politics does play a role in the process; it does
not have to predominate. '.'
, ' ' -,..,- v
Getting a large, broad-based group involved early^in the
program is a good way of building consensus.
' " i .
Reorganization can be accomplished in a fairly short time
period; in this case", less than a year. '»
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Case Study III
Waterboro Water District - Waterboro, Maine
An Example of the Formation of a Hew Water. District
to Provide Potable Water to Residents with Contaminated Wells
The System . :
Located in southern Maine, the Town of Waterboro is primarily a
bedroom community - and recreational area with a smattering of light
industry, agriculture> and services. Its population -is
approximately 5,000 and the 1980 median household income was
$15,875. '
Three sand-ahd-gravel aquifers are within the town's borders.
Until the current system went on line in the spring of 1992, there
was no community water supply, with the exception of a recreational
community, on Lake Arrowhead. Townspeople relied on private wells
for their drinking water.
The Problem ' x ,
The most densely populated area of Waterboro is the Village of
South Waterboro. It is the commercial center of town and includes
the junior and senior high schools. In 1980 hydrocarbon
contamination appeared in six domestic .wells. In 1988 the Maine
Department of Environmental, Protection (DEP) declared another
portion of the village an "Uncontrolled Hazardous Waste Site,"
because of groundwater contamination from a number of volatile
prganic compounds.
" ' ' ' . . '*'. ' "-,'..-' /.
The problems confronting the town were how to find sufficient
"funding for a water supply and create a political entity capable of
supplying potable drinking water to the residents whose water was
contaminated. -
',-..''. . , . " i , .''',''-
The Chronology
After hydrocarbons were discovered in shallow wells in 1980, the
DEP conducted extensive groundwater studies of the area to
detelrmine the source, extent, and nature of the contamination.
The Department is responsible under Maine law for providing potable
water to residents whose wells -have been contaminated by
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hydrocarbons. Initially, /DEP installed carbon:; filters on the
Dwells. As the number of affected households grew to 15, the DEP
realized* it must: develop and pay for .a- community public water
supply. . *,' ... / .' ' :/ -..': , ,.. !". . -. :
Between 1984 and 198S-, the town and DEP were unable to reach an
agreement about the location, size, and. cost of the new water
supply. The key, sticking point was that the selectmen knew of
another contaminated site (later to be declared an uncontrolled
site) and wanted a water system large enough to serve'both areas.
DEP was unwilling to supply water to the second site until the area
had been more fully studied. Another issue, of course, was money. .
In the spring of 1987, the town raised $40,000 at town meeting for
a hydrogeologist to locate potential .well sites to assist the
residents with contaminated wells. Four sites were eventually
identified. Soon after, DEP became more involved, by drilling a
test well at one of the locations* !
By this time three other communities in Maine had gone through the
entire process of establishing new public water supplies due to
groundwater contamination. Maine Rural Water Association (MRWA)
had helped, create two non-profit water associations and a municipal
water department to provide drinking water, to residents of
Readfield, South Penobscot, and Friendship. ',: :
The MRWA executive director met often with the selectmen to discuss
alternative management structures *,. The ' state legislature held a
special session in the fall bf 1988. In order £0 keep its options
open, the town had -legislation introduced to /create a water
district. The town could decide later whether it wanted a water
district or a department. Since t>nly the legislature can create a
district, the town had to act while it was; in ses'sion. The
legislation had a sunset provision ..which gave the town until,
December 1990 to hold a referendum.
The town established an 11-person Water Quality Task Force in 1988,,
Members included a town selectman, a geologist, the .town planner,
members of the, Finance, Hazardous Waste and Conservation
.Committees, and members vof the public. Their mission was. to
negotiate contracts with DEP, select engineers, choose contractors,
and make recommendations on organizational structure. The
committee met often from 1988 to 1992.
The town and DEP finally agreed .to develop a residential water
supply for the 18 residences with contaminated water. Construction
began at Christmas 1990 and was finished on February 15; 1992. DEP
has currently invested approximately $1.1 million in this water
system. ' ' . , '.'''. '.."'".;'
In November 1989 the selectmen applied for a Community Development
Block Grant. They were Very concerned about water quality problems,
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in other parts of tpwn, especially in the area that would be
declared an uncontrolled site. The selectmen also wanted to add
customers to keep rates down and to provide public fire protection.
The application was successful and the town received-a $738,000 ,
block grant to increase the size of the water lines/ run additional
distribution Alines, run new services into low-income residences,
erect an above-ground standpipe, and install an additional well
supply. To qualify for the grant, the town also put in ,$55,000 of
,its own money and borrowed an additional $100,000 from the Farmers
Home Administration. .
A, recent town meeting authorized a loan of up to $150,000 "to help
the water system pay for the costs of putting in new services.
This money will be paid back by homeowners as they hook onto the
system. . . .
1 - , ' ' " ' '' " " k
After much debate, the Water Quality Task Force finally decided
that a water district best suited Waterboro. Because the last
charter expired at the end of 1990, the legislature had to
reauthorize the water district in the spring of 1992. The town
held a referendum in May,, and although the vote supported the
formation of the district, ,there was not a quorum.
Current Status . ...' -; . .''' ::'.' .. '
The town will hold a second referendum in November 1992. Town
officials shortly will negotiate a subsidy paid by DEP which will
keep annual rates down to $112 per customer for,the next 20 years,
adjusting for inflation. The subsidy is invested and should
generate enough income to pay the difference between operating
costs plus depreciation and water revenues.
Residents with contaminated wells started receiving service in
February 1992 and appreciate the water supply. New, customers are
applying for service. Rates will go into effect once the subsidy
is in place. The district expects to have at least 100 customers
within the next five years.
Lessons Learned ~' / '
The Town of Waterboro has learned that developing a new water
supply and a new public institution is a long, difficult, and,
frustrating process. The town has also seen its persistence pay
off; a functioning water supply is now providing water in the
community. "
The town was extremely wise to appoint a water quality taslc force.
Its^make-r-up included representatives of all the local government
committees within the town and a spectrum of
interested citizens. The committee was vital in steering the
direction of the water system.
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Waterboro was extremely bold in locating additional sources of
funds from the Block Grant Program arid from Farmers Home . v.-
Administration. Not satisfied with just- an 18-user system,.the
town wanted a true community supply to take care of the residents
in the core of town. Waterboro, to its credit, was also willing to
commit town funds to, the project. The town had a.vision and
pursued it.
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\ ' * ' - .. , ,
Case Study IV .
Starks Water District - Starks, Maine
An Example of Cooperation Between a Water District and a Town
. -, .... / ;, ' .
The. System ,
Starks is a very small town in west central Maine., It is the
proverbial wide^place in the road.. Median household xncome was
only $9,612 in 1980 and the population is approximately 450.
The Starks Water District was , created in 1961. Twenty-three
-sr
Development Block Grant. . , '
. ' ' .''- -\ . . ; _'.- i . -'
The Problem .
The Division of Health Engineering put the water dis teiqt oit a ^oil
or-^T- in the sprinq of 1988. The system suffered from bacterxaJ.
no storage, and insufficient supply.
A maiority of the households were low income and could iipt
infnew debt to repair and -rebuild the system. The pr
the town was how to get enough grant money to correct
situation.
The Chrpnology , ! -
A routine sanitary survey was conducted on April 15, 1988 ^b^ the
Dilision of Health Engineering. The survey^revealed, among other
.ouno
en?eri? least one of the .steel tanks had la crack, and
there was very little water in the spring house. Health
Enaineerihg directed the district to design pneumatic storage for
SS^SSS?'.S5 provide for chlorination. Shortly thereafter^
Health7 Engineering ordered the .district ^ at
notices because of numerous coliform bacteria
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" -«
s^r 7
s:
preapplication for a water loan and grant in July 1988^
Sight ^taSS? ^StarT* With J^ officials familiar with the
the aoencV ?n J£S WJS 8V11-payiJ13 off a sma11 loan from
a"dhe executive director of HEWA met of ten with
-SlPPOrt tjle
^8iSnati°nS' the ^lectmen called another town
The town recognized the district's dilemma and voted to
lend^the district §10,000 for immediate improvements. This would '
eliminate temporarily the need for a boil "order. TO get 6f f t*t
boil order, the district would, have t.o isolate the spring and relv v
entirely on one small well .in the center of town. ?hat well was a
marginal producer, and when it went, there would be no more watlr?
MRWA continued to work with the town and the district. Thev needed
fb?^? °?\ a !?Y t° COIne UP With the Additional grant funds it
able to take advantage of the FmHA grant. They decided the town
22 ' "'' " '''''
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should apply for a-Community:Development Block Grant. Under state
rules, water districts are ineligible for this type of , grant
However, a town can. apply, and if successful, can contribute the1
facility, paid for with block grant funds, to a district. !
The Block Grant application includeda request for a new well, a
new buried concrete reservoir, replacement of a 'deteriorated
^section of water main, and new services into low-income homes.
This project piggy-backed onto the FmHA grant application, which
would be used to replace other portions of the badly deteriorated
system.
The. town was successful in its bid for grant money "and was awarded
$150,000. It then was able to provide the district with the
$37,500 loan portion of the FmHA grant/loan package, and the
district could qualify for the $112,500 grant from FmHA.
The total package of approximately $300,000 essentially rebuilt the
water system. For the first time in years the people of Starks
have a reliable water supply.
Current Status
The rebuilt system works fairly well. Annual customer rates rose
163 percent to about $220.00 to pay for increased power bills and
for the system's first part-time operator. There is now continuous
.service and adequate fire protection. .
Lessons Learned .
.---.''. ' '..'..,''.'> ...'
Units of government can work together to take advantage of a
variety of grant programs. In' this case, a small town and a
smaller district located enough grant money to continue providing
service. The town used its grant money, to install pipe and new
services, and contributed these facilities to the district.
Another lesspn is that small systems often need sizable .grant funds
to.remain viable. Here a grant was necessary because the district
"could not support new debt.
One option considered at the start of this project was/abandoning
the water system and drilling individual wells. However, because
the homes in the village were close together and many homes had
failing septic systems, the quality of the water was unknown,.
Keeping and repairing the existing system was the more
appropriate course of action. . < \
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