Financing Commercial and Industrial Sewer Infrastructure

Transcription

1 Financing Commercial and Industrial Sewer Infrastructure Prepared For: Town Of Hooksett New Hampshire Prepared By: ADG - Arnett Development Group, LLC Concord, New Hampshire

2 Table of Contents Acknowledgements Executive Summary Introduction and Purpose... 1 Findings... 2 Conclusion... 4 Appendix Financing Commercial and Industrial Sewer Infrastructure (May 2nd PowerPoint Presentation) Proposed TIF District (Excel Worksheet) Proposed TIF District Options (Options 1-5) Weston & Samson Memorandum (March 7, 2016)

3 Acknowledgements Hooksett Planning Board: Richard Marshall, Chair Donald Winterton, Town Council Rep Hooksett Sewer Commission Bruce Kudrick, Superintendent Commissioners : Chairman Sidney Baines Commissioner Frank Kotowski Commissioner Roger Bergeron Town Staff: Dean E. Shankle, Jr, Ph.D., Town Administrator James J. Donison, P.E., Assistant Public Works Director/Town Engineer Jo Ann Duffy, Town Planner Engineering content Weston & Sampson Engineering, Portsmouth, NH:

4 Hooksett Sewer Line Feasibility and TIF Financing Report Executive Summary Introduction and Purpose The following report with attachments is in response to the Town issued Request for Proposal of November 2015 RFP-#15-10 Development of an Application for a Tax Increment Financing District (TIF). The RFP was issued with a delivery date of February 8, 2016 in time for action at the spring 2016 Town Meeting. The work was started in December of 2015 by Arnett Development Group LLC (ADG). There have been two deviations from the original proposed scope of work: 1. In responding to the RFP, ADG noted that the Town s existing plans and engineering information did not seem sufficient to base a warrant-ready Article, and offered to sub-contract with a qualified and acceptable engineering firm to obtain needed information to plan for a possible TIF District. This was agreed upon, and the Hooksett Sewer Commission commissioned an additional contract to ADG so that the engineering firm of Sampson & Weston could conduct a sub-contracted conceptual report with options, possible lay-outs and cost estimates. This report has been previously shared with both the Town and the Commission, and is attached to this Report. The boundaries used by the engineers for the options are repeated in our attached spreadsheet that shows properties-per-area. 2. Soon after commencing with the work, the Town notified ADG that it would not take the TIF question to the 2016 Town meeting, as the information would not be sufficient for voter action. It was agreed that the contract would be extended until the remaining planning issues were adequately addressed so the Town could make decisions about how to proceed. It was also the intention that this report- and any subsequent recommendations be completed and presented in time so that action could be taken at the 2017 Town Meeting. This report now is not about just a possible TIF District Plan, but it is a more comprehensive, pre-district fact-finding report with recommendations and possible options. The viewpoint of the report is to provide information and assessments that will help the community leadership: Build its economic base Minimize any tax or risk liability, and Plan for the better land-use development of the 3A commercial corridor The Report looks at several planning issues including: o o o o o Public infrastructure that is most needed along Route 3A The possible locations, phases and designs of that future infrastructure The effect of a possible TIF District on the public financing of infrastructure, as well as other ways to equitably finance infrastructure The capacity of the existing sewer system for both carrying and treatment of effluents The existing land-use regulations and Master Plan 1

5 o Economic and concept-level assessments of land-use changes that could result with the availability of a municipal sewer line, including changes in traffic, development density, tax base, town services, neighborhood disruption, and regional competitiveness. The Report consists of this Executive Summary, as well as an earlier presentation to the Planning Board, the engineer s options report, and a detailed listing and mapping of the parcels by option, with the existing values and possible valuation increases per each option area (spreadsheet format). For ease of reading, we have elected not to re-explain the attachments in this Executive Summary, and trust that the reader will review each attachment to understand better our Findings and Recommendations. Findings: A. Infrastructure that was considered: The Report considered only the 3A corridor for its design and cost research. After looking at the Route 3 area, it was determined that its infrastructure needs were not related to those of 3A, and could possibly be addressed by a separate TIF if needed later. Adding the lands around Route 3 also made the District very large and unwieldy. Residential sewer connections are not needed or recommended for the new line to succeed. Should neighborhoods along the pipelines route wish to connect, they can seek permission from the Town per adopted procedures, and the new system should be designed to be adequate. Other possible Town infrastructure needs water, traffic signals and intersections, recreational trails, and sidewalks were considered but are not included in the Report, as again their situation is distinctly different from the 3A opportunity. B. Existing and New Capacity: Route 3A could be serviced by a municipal sewer line, and the new effluent volume could be handled pending successful resolution of a Sewer Commission contract dispute. A final determination on capacity is a remaining unknown that would need to be answered before any build decision is made. If built, the connection should be made to the existing Hooksett Sewer Treatment facility. The option of connecting to the existing City of Manchester treatment facility is considered in the attached design option report from the engineers. However, an additional fee of $3m would be required for this connection (to buy future treatment capacity). This makes the option much less favorable. A connection to the existing town-owned facility also assures that the town s treatment facility receives the new revenues from the new connections. C. Funding: 1. Establishing a 3A TIF District now and authorizing further design and cost-sharing agreements - makes sense if the sewer is to be built in the foreseeable future. The District provides a valuable assurance to possible developers, allows for a more-rapid construction and future connections, and reduces total costs to the taxpayer by accelerating the debt pay-down, thereby reducing total interest costs. 2

6 2. The District should encompass the entire Exit 10 to Exit 11 area, as it is one area-solution, even if it is built in phases (see attached maps). A new sewer line could open significant lands to development, and provide a better solution for existing commercial ground treatment users. Existing parcels would be more valuable. The attached spreadsheet shows three (3) scenarios whereby either 5%, 10% or 20% (low, medium, and high) new value is added to parcels just by the presence of the pipeline. However, these new assessments alone will not generate enough new revenue to guarantee coverage of new design and construction costs. 3. To minimize property-taxpayer risks, financing sources should also include: a. Private landowners via connection fee revenues b. Private landowners who could advance design and construction payments and be reimbursed by future private connections, as guaranteed by a Memorandum of Agreement between the Town, the Sewer Commission and the private entity c. Future new development once the sewer line makes that more attractive and for higher density uses along the corridor d. Sewer Commission participation credited against their future, higher operating revenues from new connections e. Delaying or deferring actual construction costs and required funding by: i. Phasing construction to meet higher-impact demand 1. Example: do Exit 10 and then Exit 11 ii. Delaying phases until the actual or potential revenues from permitted existing and new developments are equal to the new costs iii. Negotiating with future developers a cost-sharing agreement that can become the standard for future development along the corridor. D. Going Forward Recommendations: There isn t a consensus yet from official Town entities that 3A should be sewered. At a minimum, both the Sewer Commission and the Town Council would need to be in full agreement. Better would be a five-way agreement that would also include the Planning Board, the Town staff that are effected, and the private landowners that are most effected to cost-share in an equitable manner. 1. The Planning Board, the affected town departments, the Economic Development Advisory Committee, the Sewer Commission and the Town Council should appoint 1 or 2 member representatives to convene in a working group to: a. Determine the Town s policy as to 3A sewer line, and b. Adopt an equitable way of cost-sharing between the Town, the Sewer Commission, existing and future users, and private developers. This Agreement will then be the basis of the TIF District Financing Plan in 2017 c. Designate an internal Project Manager, and external resources as needed d. Set aside planning funds for additional engineering, planning and fact-finding needed to produce the cost-sharing agreement and TIF Development Plan for Report back to the respective entities after 90 days if this concept is advancing, or not. a. From the sewer line s design to final construction is a 36 month project. This long duration makes coordinating the timing of the new capacity and the hook-up with either existing or 3

7 new users critically important for both the Town and the new user. Once a new development is built before either the District is in place or it builds their own treatment capacity before the sewer line is available, the potential tax-base revenue is lost for the TIF s capture, and on-going revenue for the sewer commission is lost. b. To obtain answers, get public inputs, assure legalities, and build community support for possible funding in 2017, acting soon is important. The above working group should begin meeting in July and report out before October. If installing a sewer line along Route 3A now or in the future is adopted as a desired goal of the various town official entities, then 3. A TIF District and Plan for sewer line construction in phases should be established by a Town Council vote before April 1 st, 2017, and preferably before any related warrant or budget requests need to be legally placed on the Town Meeting agenda. a. It should include the non-residentially zoned area along 3A from Exit 10 to Exit 11, with a small amount of land on the east side of the river along existing municipal sewer rights-ofways (ROWs). The Report attachments show specific boundaries and lots of the possible TIF District. b. Design work should commence in so that construction can begin in time to capture future developments. Conclusion To implement a successful sewer line installation along the 3A corridor in time to encourage better development, quality land-use and minimized environmental effects will not be easy. There are many reasons to say no, or not now. But the opportunity to potentially have a stronger local economy, build the tax-base, encourage better land-use and remove potential pollutants from the Merrimack River is an opportunity that will not wait forever. In the past several months our work and your active participation and inputs have provided needed information and options for community leaders. Now we are recommending that the community s leadership find a way to work together to determine how the costs of this opportunity can be equitable shared, and get it designed and constructed. If after 90 days, that unity is not possible, then this effort can end without significant public investment. However, if you are successful in coming to agreements within town government and among private site-owners and the infrastructure is finally built, the community will be more competitive, more attractive and more in control of its destiny. We encourage your further efforts, thank you for your considerable assistance in helping us prepare this Report, and look forward to Hooksett s better future. ADG Arnett Development Group LLC Concord, New Hampshire June 20,

8 Appendix

9 Financing Commercial and Industrial Sewer Infrastructure Presented to the Town of Hooksett Planning Board May 2, 2016 By Stuart Arnett ADG-Arnett Development Group LLC Presentation to Hooksett Planning Board - May by ADG LLC 1 Financing Commercial and Industrial Sewer Infrastructure to Exits 10 and 11 and the Tax Increment Financing (TIF) District Option Tax: Local Property Taxes: Town, School, County, State Education Increment: The Total local taxes received above what is now received Financing: A tool to accelerate debt pay-down and lower debt-service costs to taxpayers District: A temporary designation by Council of a desired growth area, that does not impact any other uses Presentation to Hooksett Planning Board - May by ADG LLC 2

10 ATIF District: Is not does not: Change anyone s tax rate, tax assessment, obligations, form or timing of tax-payment to Town Reduce or effect bond rating or capacity Require any public spending, ever Effect zoning, allowable uses, or other Town-designated districts Last forever, or get too large Change capital budgeting procedures Expand or amend easily Apply to private property Is does: Instrument of the Town and controlled by Council and Town Administrator Allow up to 100% capture of new, incremental property-tax revenue for paying debt, vs 20% +/- Town portion. Saves Interest costs for taxpayers Terminates when all IOUs are paid Invisible to tax-payer if in or out of the District Strictly limits uses of financing and revenues For town-owned infrastructure only Presentation to Hooksett Planning Board - May by ADG LLC 3 Planning Policy Questions Is it a good idea to provide municipal sewer services to: Exit 10 area Exit 11 area The section of Route 3a that connects both? If yes or maybe : Where? When? For Who? How much? What are capital and operating costs? What are operating and potential new property tax revenues? What is the best way to finance the public infrastructure? Private funding Public funding: debt, fees, TIF increment saving Presentation to Hooksett Planning Board - May by ADG LLC 4

11 Exits 10 and 11 and 3a Sewer Extensions Possible Why not : Cost to tax-payers Growth happening anyway See Exit 10 to-date Too much growth already Negative impacts Existing ground based systems are working, don t duplicate Lowers sewer treatment capacity for elsewhere It is seen as a business subsidy Wait: see what happens Reasons to Invest: Tax incremental revenues are greater than all costs during debt-period No loss of existing revenues 100% gain to tax-payer once paid-off Encourages better growth by higher density Growth along 3a corridor a Master Plan goal Existing septic at Exit 10 inadequate Property-value added to Ex 10, 11 and 3a lands, and Town-owned parcel Sewer treatment capacity is adequate Generates positive operating cash flow Jobs for residents, help local business Waiting may be a lost opportunity, lose significant Increments forever Local business and investors go elsewhere Presentation to Hooksett Planning Board - May by ADG LLC 5 The TIF Development Plan Questions and Answers: Where? Along 3a Not along Route 3 Commercial and non-residential zones When? Design and Engineering Construction For Who? Commercial and Industrial zones New and existing business Residential may hook-up, not required How much? What are capital and operating costs? What are operating and potential new property tax revenues? What is the best way to finance the Infrastructure? Private funding Wal-Mart Escrow Connection Fees Public funding State loan funds and grants Sewer Commission escrows Public bonding via TIF TIF Escrow- save and invest later Presentation to Hooksett Planning Board - May by ADG LLC 6

12 Possible Actions and Key Considerations Key Considerations: Costs and Revenue Projections New development potential Timing: Town Meeting deadlines and Warrant language 2 years to design and build Opportunities lost if delayed or rejected Borrowing costs Other bonding requests Voter education and concerns Sewer Commission operating issues Good idea? Now or later? Determine participation of: Sewer Commission Private Investment Funds Wal-Mart, new exit 11 proposals Strategy to get adoption Submit a TIF Development Plan to Town Council and adopt, or reject Presentation to Hooksett Planning Board - May by ADG LLC 7 Next Steps and Decisions Adopt a TIF District to either: 1. Start building up the Increment just in case 2. Fund additional planning and design 3. Fund full engineering drawings 4. Authorize bond - or save- then: RFP for build Escrow private contributions Escrow any new TIF revenues Establish the required Advisory- Oversight Committee via Council Monitor compliance Votes: Determine boundaries Amend current District Boundaries, or New District Allowable uses proscribed Prohibited uses listed Costs: Not to exceed Revenue forecasts over time Differences over time Decide excess TIF revenue to debt versus General Fund (ex: 50/50) Set Conditions required for vote Presentation to Hooksett Planning Board - May by ADG LLC 8

13 Questions? Presented to the Town of Hooksett Planning Board May 2, 2016 By Stuart Arnett ADG-Arnett Development Group Presentation to Hooksett Planning Board - May by ADG LLC 9

14 DRAFT FOR FINAL REVIEW Map Block Lot AV PID Owner Parcel Type (color keyed to map) Land (ownership) Sewer Flow Design Option (1) Sewer Flow Design Option (2) Sewer Flow Design Option (3) Sewer Flow Design Option (4) Sewer Flow Design Option (5) Location Zoning Improvements Value Minimum Lot Current Developable Land Value Total Assessed Value Subdividable Wetlands Slope Size (acres) Acreage R.O.W. (incumbered) Net Developable Acreage High Development Potential (1.2) Median Development Potential (1.1) Low Development Potential (1.05) BOSTON & MAINE RAILROAD R 4 5 MAIN STREET MUD#3 - MDR $0.00 $450, $450, N 2 units/2acres $541, $495, $473, CHANDONNET, FRANCES Undeveloped P WEST RIVER ROAD C $0.00 $10, $10, N $12, $11, $10, CHANDONENET FAMILY REV TRUST P WEST RIVER ROAD C $89, $83, $173, P $208, $191, $182, KEYLAND PROPERTIES LLC P WEST RIVER ROAD C $259, $112, $371, P $445, $408, $390, KEYLAND PROPERTIES LLC Undeveloped P WEST RIVER ROAD C $0.00 $17, $17, N $21, $19, $18, KORZYNIOWSKI, STEPHEN W. P WEST RIVER ROAD C $108, $155, $263, P $316, $289, $276, FRASCH, ZOLTAN Underdeveloped P WEST RIVER ROAD C $180, $133, $314, N $376, $345, $329, PALAZZI CORPORATION P HACKETT HILL ROAD C $1,108, $799, $1,908, P $2,289, $2,098, $2,003, LARRABEE, JEFFREY S. Underdeveloped P HACKETT HILL ROAD C $4, $85, $89, P $107, $98, $94, LARRABEE, JEFFREY S. Undeveloped P HACKETT HILL ROAD C $0.00 $64, $64, N $77, $70, $67, LARRABEE, JEFFREY S. Undeveloped P 4 5 HACKETT HILL ROAD C $0.00 $766, $766, Y $920, $843, $805, LARRABEE, JEFFREY S. Undeveloped P HACKETT HILL ROAD C $0.00 $163, $163, Y $196, $179, $171, PIKE INDUSTRIES, INC. Underdeveloped P CATE ROAD C $80, $71, $151, N $182, $167, $159, PIKE INDUSTRIES, INC. Undeveloped P HACKETT HILL ROAD C $0.00 $35, $35, N $42, $39, $37, LM HEAVY CIVIL CONSTRUCTION LLC P CATE ROAD C $794, $423, $1,218, P $1,461, $1,340, $1,279, CATE, HOLLIS J. P HACKETT HILL ROAD C $142, $96, $238, P $286, $262, $250, LARRABEE, JEFFREY S. Undeveloped P 4 5 HACKETT HILL ROAD C $0.00 $766, $766, Y $920, $843, $805, NELSON,DOYLE& MARILYN R P HACKETT HILL ROAD C $144, $82, $226, P $271, $248, $237, SJB PROPERTIES LLC P WEST RIVER ROAD C $272, $181, $454, P $545, $499, $477, JARNUTOWSKI,JOSEPH P Underdeveloped P WEST RIVER ROAD C $57, $106, $164, N $197, $180, $172, JARNUTOWSKI, JOSEPH P. Underdeveloped P WEST RIVER ROAD C $75, $101, $177, N $212, $195, $186, COTE, THOMAS F P WEST RIVER ROAD C $170, $77, $248, P $298, $273, $260, DOYON JOINT LIVING TRUST Undeveloped P CROSS ROAD C $0.00 $286, $286, Y $343, $314, $300, GROULX, EDWARD P CROSS ROAD C $96, $76, $173, N $207, $190, $181, ALL OR NOTHING LLC P WEST RIVER ROAD C $640, $186, $826, P $991, $908, $867, FIVE CROSS ROAD LLC P CROSS ROAD C $64, $212, $277, P $332, $305, $291, JARNUTOWSKI, JOSEPH P. P WEST RIVER ROAD C $10, $154, $165, P $198, $181, $173, TRI-TOWN ICE ARENA LIMITED P WEST RIVER ROAD C $2,854, $660, $3,514, Y $4,217, $3,865, $3,690, CROSS ROAD LLC P CROSS ROAD C $1,173, $283, $1,457, Y $1,748, $1,602, $1,529, VINMAR ENTERPRISES LLC Underdeveloped P WEST RIVER ROAD C $ 170, $ 165, $336, P $403, $369, $353, BUTLER, BRIAN F. Underdeveloped P WEST RIVER ROAD C $ 152, $ 142, $294, N $353, $324, $309, COLBY BROOKSIDE REALTY LLC P BROOKSIDE WEST ROAD C $ 677, $ 234, $905, N $1,086, $995, $950, HYMAN 1994 TRUST, SUZANNE P BROOKSIDE WEST ROAD C $ 2,195, $ 775, $2,970, P $3,564, $3,267, $3,119, CUSTOMER PERSPECTIVES LLC Underdeveloped P WEST RIVER ROAD C $ 167, $ 178, $346, N $415, $380, $363, CKS REALTY TRUST P SCOTT AVENUE C $ 424, $ 125, $549, Y $659, $604, $576, DUFORD, DAVID Underdeveloped P WEST RIVER ROAD C $ 186, $ 202, $389, Y $466, $427, $408, MANCHESTER WATER WORKS M 3 5 OFF INDUSTRIAL PARK DR C $ 7, $7, P $9, $8, $7, BOSTON & MAINE RAILROAD R 3 5 OFF LEHOUX DRIVE IND $ 366, $366, N $439, $403, $384, DOBROWSKI REVOC TRUST, HENRY J. Underdeveloped P WEST RIVER ROAD C $ 50, $ 167, $194, P $233, $214, $204, NERR LLC P WEST RIVER ROAD C $ 2,489, $ 764, $3,253, P $3,904, $3,578, $3,416, Town of Hooksett Town Owned T WEST RIVER ROAD MDR $ 1,265, $ 589, $1,854, Y $2,225, $2,040, $1,947, SJB DEVELOPMENT LLC P WEST RIVER ROAD C $ 671, $ 188, $859, Y $1,031, $945, $902, BRIEN REALTY TRUST P WEST RIVER ROAD C $ 366, $ 153, $519, N $623, $571, $545, A Koffer/GID LLC revised record P QUALITY DR MUD#3 $9,496, $2,595, B Natick NH Hooksett revised record P QUALITY DR MUD#3 $6,375, $1,968, NORTHEAST RECORD RETENTION LLC Underdeveloped P WEST RIVER ROAD MUD#3 $95, $176, $271, P $326, $298, $285, NORTHEAST RECORD RETENTION LLC P WEST RIVER ROAD MUD#3 $1,709, $790, $2,500, P $3,000, $2,750, $2,625, NORTHEAST RECORD RETENTION LLC Undeveloped P WEST RIVER ROAD MUD#3 $0.00 $35, $35, N $42, $38, $37, WESTRIVER REALTY LLC P WEST RIVER ROAD MUD#3 $559, $590, $1,149, P $1,379, $1,264, $1,207, COBALT PROPERTIES NH CORP P WEST RIVER ROAD MUD#3 $983, $443, $1,427, P $1,712, $1,569, $1,498, SHARON & BETH DEVELOPMENT LLC Undeveloped P TECHNOLOGY DRIVE MUD#3 $0.00 $347, $347, P $417, $382, $364, INVERNESS CORP. P TECHNOLOGY DRIVE MUD#3 $2,385, $757, $3,143, P $3,771, $3,457, $3,300, READCO HOOKSETT LLC P TECHNOLOGY DRIVE MUD#3 $2,732, $833, $3,566, P $4,279, $3,922, $3,744, NEW HAMPSHIRE CENTER FOR CANCER MEDICINE P TECHNOLOGY DRIVE MUD#3 $1,176, $231, $1,407, Y $1,689, $1,548, $1,477, KOSLOWSKY REV TRUST, BETTY P QUALITY DRIVE MUD#3 $3,760, $943, $4,650, P $5,580, $5,115, $4,882, CITY OF MANCHESTER M QUALITY DRIVE MUD#3 $0.00 $370, $370, P $444, $407, $388, WEST RIVER ROAD LLC Undeveloped P QUALITY DRIVE MUD#3 $0.00 $239, $239, N $286, $262, $250, TARGET CORPORATION T-1520 P QUALITY DRIVE MUD#3 $12,983, $2,839, $15,822, P $18,987, $17,405, $16,614, NEW HAMPSHIRE HOCKEY 2000 LLC P QUALITY DRIVE MUD#3 $1,619, $450, $2,069, P $2,483, $2,276, $2,172, GETTY NH LEASING INC. P WEST RIVER ROAD MUD#3 $937, $863, $1,800, Y $2,161, $1,980, $1,890, LSREF4 DUAL LLC P CENTRAL PARK DRIVE MUD#3 $9,921, $2,142, $12,063, P $14,476, $13,269, $12,666, MAGALLOWAY REALTY LLC Undeveloped P CENTRAL PARK DRIVE MUD#3 $0.00 $801, $ P $ $ $ TOMBS 2004 TRUST, NICOLE Y. P WEST RIVER ROAD MUD#3 $281, $247, $528, Y $633, $580, $554, PINARD WASTE SYSTEMS INC. P WEST RIVER ROAD MUD#3 $310, $220, $530, N $636, $583, $556, AOUDE INC P WEST RIVER ROAD MUD#3 $405, $438, $844, N $1,013, $929, $886, TOMBS 2004 TRUST, NICOLE Y. P WEST RIVER ROAD MUD#3 $615, $269, $885, N $1,062, $973, $929, MANCHESTER WATER WORKS M KIMBALL DRIVE MUD#3 $0.00 $226, $226, P $272, $249, $238, MANCHESTER WATER WORKS M KIMBALL DRIVE MUD#3 $0.00 $9, $9, $11, $10, $9, HOOKSETT RIVERSIDE PARK LLC P KIMBALL DRIVE MUD#3 $1,187, $634, $1,821, Y $2,185, $2,003, $1,912, ONE BEMIS ROAD REALTY LLC P COMMERCE DRIVE MUD#3 $7,828,100 $3,118,700 $10,946, Y $13,136, $12,041, $11,494, BEMIS SAVOIE ROAD II LLC P BEMIS ROAD MUD#3 $1,165,000 $292,100 $1,457, P $1,748, $1,602, $1,529, DSM MB 1 LLC P MARKET DRIVE MUD#3 $6,071,300 $2,545,700 $8,617, Y $10,340, $9,478, $9,047, A WINTERHILL REALTY II LLC P QUALITY DRIVE $5,760, $2,276, $8,036, $9,644, $8,840, $8,438, WINTERHILL REALTY II LLC (No Link) revised record P kimball dr MUD# $16, $15, $14, B WINTERHILL REALTY II LLC (No Link) revised record P kimball dr MUD# $273, $250, $238, $133,269, $159,923, $146,596, $139,932, Original Value $133,269, $133,269, $133,269, Enhanced Value $26,653, $13,326, $6,663, Total Assed Value (per design option) $39,731, $48,010, $118,293, $14,975, $133,269,202.00

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21 100 International Drive, Suite 152 Portsmouth, NH tel: fax: TO: CC: FROM: Sidney Baines, Chairman, Hooksett Sewer District Commission Bruce Kudrick, Wastewater Superintendent Jim Donison, Assistant Public Works Director/Town Engineer Stuart Arnett, Arnett Development Group Chris Perkins, PE Michael Roether, PE Eric Doe, EIT DATE: March 7, 2016 SUBJECT: Route 3A TIF District Conceptual Sewer Planning Study This memorandum has been updated following the discussion between Jim Donison, Bruce Kudrick and Weston & Sampson on February 17 th in Portsmouth, and also the discussion between Stuart Arnett and Weston & Sampson on February 29 th in Portsmouth. Changes within this memorandum address the feedback from Jim, Bruce and Stuart. The first four (4) sewer routing options were developed during the meeting with Jim and Bruce. The fifth sewer routing option was developed during the meeting with Stuart. The purpose of this memorandum is to summarize the conceptual sewer planning within the proposed tax increment financing (TIF) district along the Route 3A corridor in Hooksett, New Hampshire. The TIF district was established by the town, working in close coordination with their consultant, Arnett Development Group. The purpose of the sewer planning is to generate projected flows from this corridor and identify potential sewer routes and planning-level costs to construct this system and deliver these flows to existing infrastructure. Weston & Sampson was retained in late January 2016 to provide this scope of work to the Commission. The proposed TIF District consists of the industrial and commercial zoned areas surrounding and between Exits 10 and 11 of I-93, and between the Merrimack River and I-93. Future sewer flows from outside of the project area were not considered in this study. The TIF district is divided in two phases of construction. The priority is to provide sewer service to the I-93 Exit 10 commercial/industrial area. The secondary concern is to provide sewer service to the Exit 11 commercial/industrial area. Following Weston & Sampsons first submittal of a conceptual sewer design, Hooksetts Jim Donison and Bruce Kudrick met with Weston & Sampson to revise the conceptual design. During this meeting, Hooksett and Weston & Sampson identified four (4) separate potential sewer routing plans, or construction options. Three (3) of the options address providing sewer infrastructure to the Exit 10 area, while the fourth option

22 Conceptual Sewer Planning Study March 7, 2016 Page 2 of 9 sewers the Exit 11 area. This memo also provides a planning level construction cost estimate along with figures to illustrate each design option. Looking to review and add more feedback to the conceptual designs, during the meeting with Stuart a fifth construction option was developed. Wastewater Flow Development To determine the proposed sewer pipe sizes throughout the study area, existing water usage data and assumed flows were utilized. The Town of Hooksett supplied Weston & Sampson with the water usage rates of 25 separate parcels at the Exit 10 area of I-93. It is assumed that the water usage is generally equal to sewer flows. These 2015 annual water usages were used to determine average daily sewer flowrates for these parcels. For other residential, commercial and industrial parcels (existing and future), Weston & Sampson used the guidelines established by the New Hampshire Department of Environmental Services (NHDES) and the Hooksett Sewer Use Ordinance to estimate wastewater flows. When these estimates vary for the same source, common engineering estimates and engineering experience were used to determine wastewater flows. To determine future sewer flow estimates for the project area for residential parcels less than 6 acres in size, a value of 225 gpd was applied to each parcel. For undeveloped residential parcels of 6 acres or greater, a value of 500 gpd/acre was applied. This large projected flowrate is appropriate for these parcels, in the event a developer constructs a large, multiple unit condominium or apartment complex, or if a commercial or industrial user were to be connected to the sewer. To determine appropriate flow estimates for existing commercial and industrial buildings without access to water use records, such as restaurants, dog day care, salons, and shopping centers, the Hooksett Sewer Use Ordinance was utilized. Estimated sewer piping dimensions and quantities are presented in the attached Appendix 1. The total estimated flow (not peaked) at full build out throughout the TIF district is approximately 352,000 gpd. This amount includes residential flows and infiltration and inflow (I/I).

23 Conceptual Sewer Planning Study March 7, 2016 Page 3 of 9 Estimated Total Additional Sewer Flow by Design Option Option Estimated Total Additional Flows (gpd) Option 1 142,500 Option 2 158,200 Option 3 269,300 Option 4 81,000 Option 5 351,000 Note: Flows are representative of full buildout conditions within the sewer reaches identified. Pipe Sizing To determine the correct pipe size to accommodate the sewer flows, a peaking factor and infiltration/inflow (I/I) allowances are added to the actual flows. Peaking factors used for the pipeline design were determined based upon projected flows from the service areas and peaking rate curves from New England Interstate Water Pollution Control Commissions Technical Report #16, Guides for the Design of Wastewater Treatment Works (TR-16). Peaking factors reflect the variability of wastewater flows as a function of the overall amount of flow within the collection system and daily and seasonal variabilities. In general, lower flows tend to be more variable than larger flows. Peak future flow values were used to calculate the size of individual pipe segments. Streets with wastewater flows from other tributary areas were not peaked until the cumulative average wastewater flow was calculated for that street. The future flows were then peaked using the TR-16 peaking curve. Peak future flows govern pump station sizing and collection pipe sizes. In general, peaking factors were 4.5 to 6 times the average daily flow. I/I allowances were also added to the residential flow to obtain the total projected, peaked flow. An I/I value of 250 gallons per day per inch-mile (gpdim) was used, based on accepted engineering values. Weston & Sampson has assumed a sewer construction material for gravity pipe of PVC, which is commonly accepted in the industry as the most appropriate pipe material for this application and range of diameters. The minimum pipe diameter is 8 inches (NHDES). PVC sewer diameters were selected based on anticipated future flow carried in pipes with minimum design slopes. These slopes ensure a cleaning velocity greater than two feet per second when the sewer is flowing at least half full to prevent settling of solids in the pipeline. The minimum gravity pipe diameter and design slopes are based on the requirements from TR-16 and NHDES regulations.

24 Conceptual Sewer Planning Study March 7, 2016 Page 4 of 9 Routing Descriptions Routing of the sewer lines was completed using minimum pipe slopes and the 10 foot contour intervals, which were provided by the Towns GIS department. Weston & Sampson attempted to locate smaller contour intervals from New Hampshire GRANIT database, but none were available. Due to the large contour interval utilized, results may vary greatly, as actual ground or aerial survey is completed and more accurate survey data is utilized to design the sewer extensions. The immediate priority (Options 1, 2 and 3) is to provide sewer service to the I-93 Exit 10 commercial/industrial area. Providing sewer to the Exit 11 area is viewed as a secondary priority at this time. Each TIF sewer routing design option was developed to maximize the installation of gravity sewer and to limit the number of pump stations required. However, due to the general slopes of the existing terrain and lack of long continuous slopes, each option utilizes one or two pump stations. In general, the pump station locations were selected at the low point in each sewer service reach. Refer to the table below for a summary of the collection system components for each option. All of these conceptual routing and pump station location assumptions will be verified and modified as appropriate during the preliminary design phase. Preliminary design services will also include a check of all flow projections and pipe sizing based on actual field conditions and design grades. The subsurface geology was investigated in the area of the horizontal drill under the river. Based on data available, there is nothing to suggest that the directional drill is not feasible without additional complications. To estimate the nature of the overburden soils and depth to bedrock, a Weston & Sampson geologist reviewed information from NH GRANIT and New Hampshires Statewide GIS Clearinghouse. The data layers reviewed included infrastructure data such as political boundaries, roads, hydrography, as well as geologic data such as aquifer transmissivity, saturated thickness, and a state well database. The data reviewed suggests that the depth to bedrock beneath the Merrimack River in the vicinity of the Martins Ferry pump station area and Meadowcrest Road is greater than 100 feet and the material is made up of medium to coarse grained stratified drift sands. The state well database also shows a bedrock well (Well ID: ) located on Meadowcrest Road with a depth to bedrock of 120 ft corroborating the overburden soil thickness. Based on this information, costs associated with the directional drilsl are estimated to be approximately $275 per linear foot including pipe. The directional drills are estimated at 700 linear feet, which includes 500 feet crossing the river and 100 feet on each river bank. The cost estimate for this item includes the installation of dual forcemains for redundancy.

25 Conceptual Sewer Planning Study March 7, 2016 Page 5 of 9 TIF Sewer Collection System Summary Phase Gravity Pipe (linear feet) Forcemain Pipe (linear feet) Pump Stations Option 1 8,900 4,500 1 Option 2 17,990 12,000 1 Option 3 28,440 4,500 2 Option 4 16,350 3,100 2 Option 5 41,940 5,500 2 Notes: 1. In general, sewer manholes for gravity pipe shall be installed: Every of 300 linear feet (maximum) At change in pipe slope or direction Intersection with other sewer pipe 2. Forcemain manholes shall be installed: Low points (forcemain cleanouts/drains) High points (air release valves) Option 1 Sewer Routing The design of Option 1 calls for the smallest amount of new gravity sewer pipe, and a single pump station. Flows from Central Park Drive and Market Drive would utilize existing sewer pipe and be conveyed to Route 3A. Commerce Drive and Technology Drive have existing sewer pipe installed, but additional sewer piping would be required on both Commerce Drive and Technology Drive to complete the availability of sewer service on these roadways. Flows would then be conveyed to Route 3A. Route 3A would be sewered from the border with Manchester north to Dunkin Donuts and would serve as the sewer main for each of the side streets to be sewered in this design. Flows are conveyed via gravity sewer to a low point in front of Market Basket, where a pump station would be placed. A forcemain pumps the flows south along Route 3A across the municipal boundary between Hooksett and Manchester, to the intersection of Hackett Hill Road and Front Street in Manchester. Manchester sewer officials have been informed of the possibility of Option 1 and are open to the discussion of accepting new sewer flows from Hooksett. The creation of an Inter-Municipal Agreement (IMA) for the purpose of accepting these new sewer flows would require all member communities of the Manchester sewer system to sign off on the approval for an IMA also. These member communities include Derry, Londonderry, and Goffstown.

26 Conceptual Sewer Planning Study March 7, 2016 Page 6 of 9 Preliminary discussions with Manchester sewer officials reveal that the existing sewer pipe in place, intended to accept the additional Option 1 flows within Manchester, currently flows at approximately 50% of its capacity. A complete examination of the existing Manchester sewer pipe for its remaining hydraulic capacity would be required should the Option 1 design proceed to a preliminary design. Additionally, Manchester would require the installation of a metering and value pit at the town boundary for flow measurement and sampling purposes. This structure would be larger than a typical sewer manhole, would require electrical power, and would house a flow meter. It may also need radio communication equipment, an automatic sampler, and a dedicated aboveground electrical panel to run and maintain this equipment. A line item in the Option 1 cost estimate has been included for a preliminary assessment of a meter pit with these specifications. Option 2 Sewer Routing Option 2 sewers Commerce Drive, Central Park Drive, Market Drive and Technology Drive in the exact same fashion as in Option 1, with new sewer as required on Commerce Drive and Technology Drive, and with flows conveyed with gravity sewer to Route 3A. Route 3A is sewered from Commerce Drive to where the existing connection to Technology Drive is constructed, with all these collected flows conveyed towards Kimball Drive. Option 2 then adds the installation of sewer along Kimball Drive and Quality Drive, where flows meet by gravity at a low point on Kimball Drive. A pump station would be placed on the parcel currently owned by Walmart on Kimball Drive which would collect all flows and utilize a forcemain to cross the Merrimack River and bring flows to the existing pump station on Martins Ferry Road. This existing pump station moves flows through an 8 forcemain, north to the wastewater treatment facility (WWTF) on Egawes Drive. A detailed investigation into the capacity of this existing pump station and the existing forcemain would be necessary. It may be possible that the Martins Ferry pump station could move the new sewer flows to the treatment facility, but in discussions with Jim Donison and Bruce Kudrick, the belief was that the new forcemain that crosses the Merrimack would continue alongside the existing forcemain to the WWTF. In the cost estimate for Option 2, it is assumed that an upgrade to the pump station and a new forcemain are required to reach the WWTF. Option 3 Sewer Routing Option 3 in similar to Option 2, with the exception that the proposed pump station on Kimball Drive would not pump across the Merrimack, but rather back up along Quality Drive and back up onto Route 3A. Option 3 then includes the installation of gravity sewer north on Route 3A from Quality Drive to Meadowcrest Road. Flows then travel down Meadowcrest Road to the northern cul-de-sac to a proposed pump station on a

27 Conceptual Sewer Planning Study March 7, 2016 Page 7 of 9 currently vacant parcel. This proposed pump station would then pump flows under the Merrimack River to the WWTF. Option 4 Sewer Routing Option 4 serves only the Exit 11 area within the TIF study boundary. Hackett Hill Road is served and conveyed via gravity sewer to Route 3A. These flows travel south to a pump station at a low point on a parcel owned by NHDOT where they are pumped uphill to the south to a high point on Route 3A. The pumped flows then travel south along Route 3A to Meadowcrest Road. Flows from Cross Road are also picked up at this location. Likewise to Option 3, a proposed pump station would be placed on the vacant parcel abutting the northern cul-de-sac and pump the collected flows under the Merrimack via a forcemain to the WWTF. Option 5 Sewer Routing Option 5 combines the sewer routing of Option 3 with Option 4 to provide sewer service to both the Exit 10 and Exit 11 service areas. Options 3 and 4 are stand-alone options and provide cost for several identical sewer components including; the gravity sewer along Meadowcrest Road, the pump station at the cul-de-sac, and the river crossing to the WWTF. Option 5 presents sewer coverage of the entire TIF Study Area. Planning-Level Cost Estimates One of the critical components in the evaluation of the above routing alternatives is the capital cost associated with the proposed sewer. Accordingly, Weston & Sampson has prepared a planning-level cost estimate for the proposed design using a database of construction costs. The project cost estimates carry unit costs for the installation of sewer on each street in the study area. The unit costs are a composite meant to include all aspects of each unit cost. For example, the cost for installing gravity sewer includes multiple components such as the sewer main, service connections, manholes, excavation, normal ledge removal or dewatering, and paving. Also, pipeline costs are based on depth of construction. Costs for relocating existing utilities other than resolving minor utility conflicts that occasionally arise during normal sewer construction were not included in this construction cost estimate but these are expected to be minimal for this project. Major items, like proposed pump stations, have been included with a lump sum cost to account for the anticipated scale of the item. Other considerations which would drive the actual construction costs higher include the cost of land acquisitions in order to establish easements, the cost to extend 3-phase power lines, the cost to extend natural gas pipeline, or the costs of aboveground pump station buildings. The costs shown in Appendix B are based on March 2016 estimates. Based on the recent economy market, construction costs are generally escalating at 2.6% annually.

28 Conceptual Sewer Planning Study March 7, 2016 Page 8 of 9 The final major component of the estimate is an engineering and contingency allowance. This has been set at 25 percent. At this stage of conceptual considerations, this allowance can range between 25 and 40 percent. The contingency will account for items that have not been revealed by the study including, for example, the need for additional pump stations and associated forcemains, the need for specialty dewatering techniques, or complex environmental permitting. It is important to note that costs associated with plant upgrades were not included in the planning level cost estimates. It is assumed that the WWTF has the capacity to treat the additional flows from the project areas. Using this basic methodology, we have prepared the following cost estimate summary. Please note that the prices are March 2016 dollars, projected using the Boston 60- Month Engineering News-Record (ENR) Index to update pricing to reflect the prices when the project would be ready for bid and construction. Weston & Sampson has provided a summary of the estimated planning level project costs below. More detailed costs, broken down by street, are provided in the attached cost estimates in Appendix B TIF Sewer Collection System Cost Summary Item Option 1 Option 2 Option 3 Option 4 Option 5 Construction $3,023,400 $7,696,900 $9,929,500 $6,211,000 $14,140,300 Contingency & Engineering $755,800 $1,924,200 $2,482,400 $1,552,800 $3,535, Total Cost $3,779,200 $9,621,100 $12,411,900 $7,763,800 $17,675,400 Future TIF Sewer Collection System Cost Escalation Item Option 1 Option 2 Option 3 Option 4 Option %/yr $3,876,800 $9,869,700 $12,732,500 $7,964,300 $18,132, %/yr $3,969,500 $10,105,700 $13,036,900 $8,154,800 $18,565,600 Future costs calculated from the previous table, 2016 TIF Sewer Collection System Cost Summary