By GARRY RAYNO, Distant Dome
A question that needs to be asked is “Who is in charge of state construction projects and state finances?”
The agenda for the Joint Legislative Fiscal Committee last week included two items related to major construction projects that were intended to change how the state treats people in its care, those who did not commit a crime but are too dangerous to be housed in New Hampshire Hospital, the state psychiatric hospital, because they may harm themselves or others.
After years of hand-wringing and unfulfilled promises, the state finally agreed to build a new Secure Psychiatric Unit Forensic Hospital on the New Hampshire Hospital grounds and move those currently incarcerated in the Secure Psychiatric Unit in the Men’s Prison in Concord.
The money to build the $43 million facility comes from the federal government through the American Rescue Plan Act post COVID-19 pandemic.
The project funded by federal taxpayers was approved by the New Hampshire Legislature in 2022 and construction began in August 2023 with a completion date this year, but work came to a standstill on a major section of the new facility about nine months ago when a design flaw was discovered that the foundation pilings were designed for insufficient load-bearing capacity for the two-story structure holding 24 beds in two units.
The state through the Attorney General’s Office claimed the designer SMRT Inc. of Portland, Maine was negligent in its structural system design and needed to redesign the project to correct the load-bearing issue.
The company submitted new plans in April and two revisions, the last on May 21, and the construction contractor PC Construction submitted its projected costs for doing the new design work, as well as costs due to the delay and damages.
The end result was a $9.9 million settlement with SMRT to be paid by the company’s insurance carriers with no party admitting liability.
Charlie Arlinghaus, Department of Administrative Services Commissioner, told the Fiscal Committee last week the new estimate for project completion is fall 2027.
The folks in the Secure Psychiatric Unit in the Men’s Prison will wait two years before they will be able to move into a new facility designed to meet their mental health needs as opposed to a prison setting.
It does not appear from the documents filed with the Fiscal Committee there is any settlement agreement with the folks in the SPU.
While the wait for a proper setting for those civilly committed due to their mental health issues has gone on for decades, troubled youth at the Youth Detention Center at the Sununu Youth Services Center have had a modern facility for the past two decades, but most of it is empty as treatment methods have changed and decentralized.
The facility built to house 144 young people has over the last few years had about one to three dozen juveniles incarcerated at any given time.
Like the new Secure Psychiatric Unit Forensic Hospital, the Sununu Youth Services Center was built with federal money and some strings are attached in terms of its use.
That makes it difficult for the state to repurpose the facility for another state function outside of treating and incarcerating at-risk juveniles.
It also sits on a prime piece of land in Manchester’s North End and along the Merrimack River which likely has many developers drooling over the possibilities.
But in order to close the YDC, another yet more up-to-date facility designed to meet present day needs and treatment methods has to be built and completed so the at-risk young people have a place to go.
Lawmakers have long sought to close the large and costly-to-operate Manchester facility by cutting funding and setting deadlines that had to be changed along with finding supplemental funding to make it safe for all concerned, which was not always the case as the nearly 2,000 former residents filed claims alleging sexual and physical abuse at the hands of state workers.
In 2023 the legislature finally approved $21.6 million to build a new facility on the Hampstead Hospital site which now serves as the state’s mental health hospital for juveniles.
But Department of Health and Human Services state construction officials found the $21.6 million appropriated for the project was woefully inadequate if the state were to build a modern up-to-date residential treatment center as well as meet federal requirements because to date the project has been entirely funded with yes, American Rescue Plan Act COVID recovery money.
Because of the initial funding deficit, the DHHS decided to do a base construction contract and seek other money for other “add alternates” as money became available.
To date the project has secured $37.8 million for the new YDC using money that was allocated for other projects funded under the ARPA, but not used.
Last week, the Fiscal Committee added $603,380 in ARPA funds bringing the total to $38.4 million for the project which has undergone a number of changes due to the number of youths held at the YDC today from gangs who require greater security, according to DHHS officials.
The project is expected to be completed by next summer or early fall.
Arlinghaus told the Fiscal Committee his department is about to issue a request for proposals for a broker to begin the process of selling the Manchester property, but warned it will be very complicated and unpredictable.
The money from the sale of the property is to go into the YDC Settlement Fund for abuse claims by former residents.
He said the sale process will proceed as the new facility is nearing completion, but the closing will not occur until the residents move into the new facility.
Neither of the two projects will have any impact on the state’s general fund which supports much of state government, but another item on the agenda will.
When lawmakers crafted the current biennial budget, budget writers decided to use money in the state’s rainy day fund to help balance .
The figure in the approved budget for tapping the rainy day fund is $47.5 million, but the agenda item for last week’s meeting would allow up to $88.7 million to be withdrawn from the state’s savings account. Budget writers expect to return the money to the rainy day fund by the end of the biennium June 30, 2027.
According to information provided by Arlinghaus to the committee, “The draft ACFR is continually updated throughout the next several months based on additional review and calculations performed by Accounting Services, potential adjustments and corrections proposed as a result of the official audit conducted by KPMG, in addition to final audited financial statements submitted by the State’s Enterprise Funds, including the Liquor Commission, all of which have the potential to change the final general fund operating budget deficit by a significant amount. As of this submission, it is anticipated that the September 30, 2025 draft calculation of the rainy day fund transfer could change by a material amount.”
To date, state revenues are $29.4 million below estimates, which projects to a more than $100 million revenue deficit for the 2026 fiscal year.
And the Education Freedom Account program is projected to cost $51.6 million this year, which is over budget by $12.3 million.
Using the high end of the draw on the rainy day fund of $44 million more than anticipated, which is probably more likely or they would not be asking for that much money, along with the $100 million and $12.3 million from the EFA program, that is $156.3 million potential deficit in this fiscal year’s budget.
And that does not include potential shortfalls in federal funding for many social service programs because New Hampshire budget writers crafted their plan before the GOP reconciliation bill or the “one big beautiful bill” passed Congress and was signed by President Donald Trump.
From load bearing deficiency to over budget EFA grants, those watching the state’s finances have to be feeling a little more uneasy with every passing day.
Garry Rayno may be reached at garry.rayno@yahoo.com.