Laconia water department presents balanced budget, proposes drawing $368,000 from reserves

Ben Crawford, superintendent of the water department, told the Laconia City Council on May 20 that the department’s proposed fiscal 2026 budget would rely on water revenues and reserves and would need a $368,000 transfer from savings to balance operations.

Crawford said the department is an enterprise fund and runs entirely on water billing and related fees; water billing accounts for roughly two-thirds of projected income, about $2.8 million of a roughly $4.0 million budget. He described revenues as up about 7.8% from the prior year, in part because the city added about 120 customer units, while consumption per unit has not risen substantially.

Crawford outlined expense pressures that drove the request: an 11% increase in salaries tied to closing staffing vacancies, a roughly 23% rise in distribution and main‑maintenance costs after an unusually high number of main breaks last winter, and a roughly 15% increase in medical insurance costs tied to changes in retiree coverage and HealthTrust’s winding down. He told council the department is evaluating joining the city’s Harvard Pilgrim/SchoolCare plan and expects the change could add about $100,000 to the water department’s costs if adopted.

On reserves and cash-on-hand, Crawford said the water department is holding about $1.8 million in its checking account (roughly six months of operating expenses) and about $500,000 in savings; capital reserves sit near $400,000. He warned that routine capital projects can deplete reserves quickly, citing a recent Weirs Boulevard pipe project that cost about $400,000. Councilors asked staff to provide benchmarking for “months of operating cash” best practices for an enterprise fund so the commission and council can evaluate whether current reserves are appropriate or whether some funds could be redeployed.

Crawford summarized the department’s capital requests: a capital budget around $747,000 (as drafted at the commission level), including items such as pressure‑reducing valve replacements, a Weirs station generator (about $80,000), chlorine analyzers, Knox boxes for station access, a proposed fiber run to join the city server (~$46,000) and a $50,000 program to buy meters eligible for automated reading as part of a multi‑year meter‑upgrade plan. He said one meter trial (cellular reads) is underway for a small development and that a broader citywide rollout would mean substantial upfront costs but would allow more precise leak detection and reduce manual reading costs over time.

On cybersecurity and SCADA, Crawford said the department took systems offline during the COVID period and has maintained an “air gap” architecture for SCADA, with three upgraded, redundant SCADA computers paid for by a cybersecurity grant (project cost about $43,000, with about $33,000 from the state). He said the system now can be made remote if IT hardens firewalls and other protections, but the department currently requires on‑site control for system start/stop.

Crawford and councilors discussed rate timing: the water commission is considering a rate review and potential increase and would follow the board and council’s public‑hearing timetable if a change is proposed; the commission discussed voting on a rate action in July for a January 1 implementation, which Crawford said was the prior cycle’s timing.

Crawford closed by noting two upcoming retirements on the department payroll (a foreman and the controller), a planned job posting for a financial analyst and continued efforts to align benefits and IT with the city to reduce duplicated costs.

Ending: Councilors asked staff for follow‑up data (best‑practice cash‑on‑hand benchmarks, implications for a rate review, and the exact composition of reserves) before final approval; Crawford said the commission will present the final proposal and any rate recommendations to the council in future hearings.