Council Approves $20M For YDC Settlement Fund; Ayotte Won't Exercise Option To Buy Coos County's Headwaters Tract

By PAULA TRACY, InDepth NH

MANCHESTER, NH — The Executive Council approved $20 million to go into the YDC abuse settlement fund, agreed to an extension to a contract for staffing at the Sununu Youth Services Center and rejected a $100 million conduit bond for a digital assets company, among other business Wednesday.

The Council also heard that Gov. Kelly Ayotte has decided to let the sale of the 145,400-acre Connecticut Lakes Headwaters tract in Coos County go forward, rather than exercise a state option and buy it for $67 million.

And the Council approved a number of contracts with snowmobiling and OHRV clubs to keep the trails in good shape.

The meeting was held at the Manchester Historic Association Millyard Museum in Manchester, and was the first in a summer series of "Road Shows" of the governor and council across the state.

FRIDAY IS THE DAY FOR RAIL TRAIL DISPUTE TO GO TO COURT

Attorney General John Formella said the state is going to court Friday to get rid of jersey barriers which have been laid across and blocking a one-mile section of the 59-mile Northern Rail trail in Andover by an angered abutter.

The 322-page filing in Merrimack County Superior Court to restore public access to the Northern Rail Trail is going to be reviewed by the court which will determine whether the abutter is legally justified.

Formella said he hopes the matter could be settled before the end of the summer but conceded it could be longer.

BERLIN SENIOR HOUSING GETS GRANT

A 33-year-old senior housing facility in Berlin will get a grant to improve the HVAC system. The council approved, under the Community Development Block Grant program, $500,000 on behalf of Affordable Housing, Education and Development Inc. to support the Notre Dame HVAC System Improvements project located at 411 School Street. The water deteriorated the HVAC system and there has now been a filter put on but the units now are damaged and need repair. The money for this comes from 100 percent federal funds.

This is a very unique request, said Executive Councilor Joe Kenney, R-Wakefield. It was unanimously supported.

REAL ESTATE FIRM HIRED TO SELL SUNUNU YOUTH SERVICES CENTER

The Council approved a contract with Cushman & Wakefield of New Hampshire to provide marketing, consulting and brokerage services to sell the SYSC campus at 1056 River Road over the next two years.

The state plans to move its youth facility to the campus of the former Hampstead Hospital. The commission rate is 4 percent of the contract sale price of the property up to $25 million plus 2 percent of any portion of the contract sale price that exceeds $25 million and payable out of the gross proceeds. The legislature debated putting the proceeds into the YDC settlement fund but ultimately decided to put those funds into the general fund.

$20 MILLION APPROVED FOR YDC SETTLEMENT FUND

The council approved $20 million for the settlement payments for the victims of the former Youth Development Center who were sexually and physically abused, while the joint legislative fiscal committee also approved that amount, far lower than the $55 million requested by the new fund administrator.

Gerard Boyle, a retired judge who has taken over the role, said in the past two months on the job he has met with state officials, members of the legislative fiscal committee and contractors and has reviewed similar settlement funds nationally including the Catholic Church and the organization formerly known as the Boy Scouts.

He said he looked at the funds, their average awards and is in the process of restricting the YDC staff and office. Boyle said he has made cuts in staff and will not renew two contracts because the contractors are making too much money. Much of this will occur in the fall.

He said he will hire a deputy then to make more hearings available to clients. Boyle said he reviewed four contracts and will recommend two to be renewed in the fall.

"I cannot justify the state spending $200 an hour... or $100 an hour for travel time," he said for claim investigators. "We need to watch the money that is being spent. Every dime is a dime not available to claimants in the future. We want to be good stewards of the state's money," he said.

Boyle noted hearings will resume in August with two a day and may increase. After going to the joint legislative fiscal committee and being turned down for his request for $55 million, he said they have indicated a willingness for him to come back for additional funds in the fall.

"That gives us $4 million to spend," in the next 12 months because of the administrative costs and settlements paid out are already committed. He said that is far too low, so he said he will be coming back and asking for $35 million later.

Boyle is a retired judge from the Plymouth area who was a lawyer before his judicial appointment. He succeeds John Broderick, a retired Supreme Court chief justice.

The state changed the way the position is selected from the judicial branch to the executive branch. Councilor Janet Stevens, R-Rye, noted that $6.9 million hasgone to a victim's law firm.

"How are we going to rein in those fees," she asked.

Boyle said he is looking at finding inducements for attorneys to lower their fees which are now at a maximum of 33 percent of the settlement.

Councilor Karen Liot Hill, D-Lebanon, said if the state wants to use this as an alternative to going to court it has to be something that is used and capitalized.

"What happens if the fund runs short? Will you have to cancel the hearings?" she asked.

Boyle said: "I cannot in good faith hold hearings," without money in the fund adding the legislature seems ready to pay into the fund.

Ayotte said she fully supports his request for the additional $35 million. She said she has been deeply troubled by the up front loans to victims from what she said were terms not favorable to the victims.

Boyle said there are 1,700 outstanding claimants, some of whom have taken out a "payday loan" anticipating payment based on the average settlement. He said those include extraordinarily high interest rates.

It has been an issue with the fund from the beginning, he said, and noted that some have taken the loans with the advice of the attorneys and some against the advice of their attorney.

"I don't think that is my responsibility," he said.

Structured settlements are also an issue over the past several months, Boyle said.

The Attorney General's Office does need to be involved in that, he said.

AG'S REPORT ON SYSC/STAFFING CONTRACT

A tabled contract to provide staffing for the Sununu Youth Services Center in Manchester was unanimously approved Wednesday, one day after the Attorney General issued a report saying there is a serious shortage of staff at the Sununu Youth Services Center and systemic problems there that need to be addressed.

The governor said signing the contract with Amergis Healthcare Staffing Inc. of Columbia, Maryland, is a step in the process to stabilize and get the facility in a better position for the future where all staff and youths are safe.

And Ayotte said she is ready to go out to bid on a suggestion that all youth-facing staff wear body cameras. The Amergis contract received a sole source amendment to an existing contract with the state, increasing the price limitation by $1.3 million through June 30, 2027. This brings the contract to $6.5 million.

The Attorney General did not find the abuse alleged by the Office of the Child Advocate. It included recommendations for organizational reform, as well.

Executive Councilor Liot Hill, asked Commissioner of Health and Human Services Lori Weaver how many youth counselor positions are vacant?

She said the state has 46 full-time counselors now working and a vacancy rate including those on leave of 53 percent.

Weaver said a significant portion of the staff who are out on leave have injuries suffered in the line of work.

"We just don't have enough staff," Weaver said. "Forty six is not enough."

She said the level of staffing is dangerously low.

The state police are there to support staff but not provided direct care for the youths there who are incarcerated.

Councilor Stevens said the Attorney General's report also found a significant lack of training for the staff. She said the minimum experience for the staff is too low.

However, she said she would support the contract but with more oversight.

"It is going to take the support of the legislature," to improve the situation, Stevens said and Weaver agreed.

PILLSBURY WANTS ENVIRONMENTAL REVIEW OF FIRE AT FORMER LACONIA STATE SCHOOL

Pillsbury Development, the potential buyer of the former Laconia State School has asked for an environmental assessment of the impact of a fire at the former Laconia State School in June before they finally purchase it.

Councilor Kenney said he wants to know what the impact may be to the sale.

"I don't think it will materially impact the sale," said Charlie Arlinghaus, commissioner of the Department of Administrative Services. He said the state is going to have to spend about $300,000 to remediate the site.

"We own the property, we have to take care of it," Arlinghaus said.

STATE ALLOWING DEAL WITH AURORA AND MANULIFE TO GO FORWARD ON PURCHASE OF 145,400 ACRE CONNECTICUT LAKES HEADWATERS TRACT

Adam Crepeau, acting commissioner of the state Department of Natural and Cultural Resources said that after extensive discussions with the governor and state agencies, and the buyer and seller, they are allowing the process of transferring the 145,400 acre Connecticut Lakes Headwaters tract in the state's far north country to go forward in September.

Aurora Sustainable, a carbon first company, was approached by Manulife Investment Management and agreed to sell for over $67 million, but the state had an option to buy and meet that price and a 45 day window to do so, which has now expired and is 47 days out from the signing of the purchase and sales agreement between the two companies.

He said the conservation easement, and a long-term stewardship plan for both logging and recreation protects the state and its desire to see it continue to be logged for jobs and tax revenue and allow for recreational use and habitat.

The tract was enrolled in a carbon capture program by its former owner which has about 90 years left to go. Carbon capture allows businesses to buy credits to keep trees growing instead of cutting them.

Crepeau said cost was a consideration and the fact that the legislature just passed a law which prohibits public entities from owning tracts of land enrolled in carbon capture programs, which would increase the price.

The state recently reached an agreement with Aurora to allow for cutting at least 30,000 cords of wood per year for the next five years and Ayotte said that is a requirement for not exercising the state easement which the buyer has agreed to abide by in writing.

Talking to the press after the meeting, Ayotte said she loves the property, and she will be watching closely. Crepeau said the matter is not entirely over and the state will oversee the matter going forward.

Kenney said he appreciated the governor's leadership on this issue noting at one point, the owners were not cutting enough timber and that was impacting local timber taxes as well as local loggers and mills.

"We will count the logs ourselves," Ayotte said.

HAVERHILL, MASS. WASTEWATER UPDATE

Daily water monitoring was ordered at state beaches last week following a massive wastewater release into the Merrimack River in Haverhill, Mass., said Robert Scott, commissioner of the state Department of Environmental Services.

Fortunately, New Hampshire beaches have not been adversely impacted so far, he said. The state's swimming mapper is a place people can go to stay updated. It can be found here https://www.des.nh.gov/water/healthy-swimming/healthy-swimming-mapper

CONDUIT BOND FOR DIGITAL ASSET COMPANY FAILED

New Hampshire was on the verge of becoming one of the leading states for digital asset development, but the Executive Council voted 2-3 to approve a first of its kind, $100 million conduit bond for NH CleanSpark. Voting to oppose it were a majority of the five member council.

Liot Hill, Stevens, and Councilor David Wheeler, R-Milford, opposed it.

This financial innovation involving digital assets like Bitcoin is being recognized more as a currency and this would be a get on board or get behind, said James Key-Wallace, executive director of the Business Finance Authority.

Ayotte said she liked the idea and that the state could be seen as a leader with no taxpayer money being used. But Wheeler said he was concerned about the idea and whether this is the role of the BFA to help these sorts of businesses.

"This space is becoming traditional," Key-Wallace said.

He stressed that no taxpayer money is being used. The vote came after a public hearing in which several state Representatives questioned whether the company was in the business of building data centers, which have been opposed in the state in recent months.

While CleanSpark appears online to be involved in building data centers, the governor said she would not support that here and Key-Wallace said that is not what this is about. This was about Bitcoin.

It was the recommendation of the Business Finance Authority to issue not more than $100,000,000 of its revenue bonds, as taxable bonds, the proceeds of which would be used by NH CleanSpark Borrower Trust, a New Hampshire investment trust, to finance the acquisition of digital currency in the form of Bitcoin by the parent of the Borrower, NH CleanSpark Guarantor 1, LLC, a Delaware limited liability company; and to pay certain expenses incurred in connection with the issuance of the bonds.

Ayotte said she put it on the agenda and indicated the state could be the first and benefit from leadership in digital asset development, which would in the end help public needs such as more funding for housing.

Liot Hill said it does not fit into a facility category for such a bond though Key-Wallace said it is a commercial facility.

He said it could improve the economic condition of the state. An article about this issue is here: https://bitcoinmagazine.com/news/new-hampshires-100-million-bitcoin-backed

Liot Hill said she was not opposed to Bitcoin per say, but neither she nor the public has had the chance to "digest" this information over the six days that it has been made public. She said she was in a state of ambivalence over it, though ultimately, after no one supported her bid to table it, she voted against it.

Liot Hill said whenever a state goes first there could be a downside not seen at the outset. Ayotte said this is a publicly traded company which had to go through extra scrutiny, that they are offering sufficient collateral and that they have a rating from Moody's.

DAILY RATE $6,500 A DAY FOR UNDERWATER BRIDGE INSPECTION

The Council approved a request by the Department of Transportation Bureau of Bridge Design to enter into an Agreement with SLR International Corporation, Cheshire, CT, for an amount not to exceed $650,000, to provide on-call Underwater Bridge Inspection Services.

David Rodrigue, commissioner of the Department of Transportation, said the contract calls for a daily rate of $6,500 a day to inspect a bridge. The contract is effective upon approval through Dec. 31, 2030, with the option to renew for one year and 71.34 percent comes from federal, money.

COMMENDATIONS/PRESENTATIONS

The governor and Executive Council enjoyed a musical presentation by the NH Pipes and Drums, and commended Division I state boys baseball winners from Trinity High School in Manchester.

Executive Councilor John Stephen, who invited them to be honored, noted that he once played baseball for that same team. This was the first title for them in over 30 years. He said they were true sportsmen.

Also commended were Dick Anagnost and Elliot Perry. Anagnost is a real estate developer who has worked throughout New Hampshire and has converted many vacant tracts particularly in Manchester, the governor said. He also was praised for his work to address the state's affordable housing needs.

Ayotte said Perry has exemplified perseverance, courage, has overcome significant medical issues and has advocated for children with disabilities and raised funds for such a cause. Leading the pledge of allegiance was former Executive Councilor Earl Rinker from 1987-1997.

CONFIRMATION

Robert Scott of Bow was unanimously confirmed for another four-year term as commissioner of the state Department of Environmental Services. He was lauded for his past work on getting PFAS mitigation funding and his work getting grants for the state by Executive Councilors Janet Stevens, John Stephen, and Joe Kenney.

Kenney said he is an unsung hero on contentious issues and he listens.

"We are very fortunate..." Kenney said.

NEXT MEETING

The Executive Council will continue its summer "Road Show" with Executive Councilor David Wheeler hosting a meeting July 29 at 10 a.m. at Nashua Community College.

This article first appeared on InDepthNH.org and is republished here under a Creative Commons license.