LITTLETON — Littleton Water and Light, providing water and electric utilities to most areas of town, has responded to the legal action filed against it and its three commissioners by the town, which wants to see LWL’s budget and financials.
More recently, on Feb. 22, the New Hampshire Department of Revenue Administration requested to be an intervenor in the case, arguing that LWL is not complying with the state’s Municipal Budget Act and is leaving the town in a position where it cannot prepare a complete and accurate budget without the LWL financial information.
The town’s petition for declaratory judgment and permanent injunction, filed at Grafton Superior in December, requests that the court require LWL to comply with three legal obligations by turning over year-end financials to the town for consideration and approval at the annual town meeting, produce any excess funds to the town for review, and provide monthly profit-and-loss statements to selectmen.
None have been done, argue selectmen, who are being represented by town attorney Walter Mitchell.
In the town’s complaint, Mitchell said LWL has not presented its budget to town meeting voters in nearly 30 years and LWL’s lack of compliance would result in negative financial consequences for the town and its operating budget.
The town’s petition asks the court for a judgment declaring that the commissioners are acting illegally by refusing to participate in the town’s annual budgeting process and in refusing to pay the town excess funds and provide the profit-and-loss statements.
The Feb. 8 response from LWL commissioners, Schuyler Sweet, Peter Cook and Ralph Ross, who are represented by attorney Matthew Delude, is brief and states that the town has failed to state a claim for its requested legal relief and has no jurisdiction and LWL reserves the right to add or amend its affirmative defenses through the discovery process.
LWL, which was established in 1903 when the town was authorized to acquire a water and electric plant through special legislation, maintains that it is an independent entity under its 1903 charter.
The DRA argues that state laws revised decades later remove any of the commissioners’ existing authority from the 1903 enabling legislation and the 1903 legislation clearly established LWL as a town department.
In September, the LWL Commission voted to not comply with DRA’s demand regarding the Municipal Budget Act and instead conduct more legal research to fully answer the DRA.
In October, the DRA met with selectmen, who appoint LWL commissioners, and following that meeting sent a demand letter to LWL.
Along with its Feb. 22 motion to intervene, the DRA also filed its own complaint against LWL that asks the court to declare that LWL is a municipal utility department subject to financial reporting requirements under New Hampshire law.
The DRA, which is being represented by the New Hampshire attorney general’s office, argues that the state has a legal right to receive, through the town, certain LWL financial statements.
Refusal to comply, argues the DRA, directly and adversely impacts the operations of the state, and because the town cannot prepare a complete and accurate budget under state law, the town is unable to submit that budget to the DRA commissioner.
“A declaratory judgment by this court that LWL must provide the legally mandated financial statements will conclusively resolve this dispute and enable the state to establish a tax rate based upon the activities of all the town’s departments, to the benefit of the state, the town, and the town’s residents,” Deputy Attorney General Jane Young wrote in the DRA complaint.
During the Feb. 4 deliberative session, voters approved for the March 9 town meeting warrant an article asking to see if the town will appropriate a $10.173 million LWL budget. The default LWL budget is $9.586 million.
During the session, Sweet said he cannot comment on the litigation because it is a legal matter.
The budget of LWL, which offers some of the lowest rates in New Hampshire and New England, has been a net-zero budget, meaning expenses meet revenues.
If LWL is ultimately determined to be a town department, the town would have control over its net revenue.
Town officials said they want LWL to comply with state budget law so it can continue operating successfully and provide low rates to its customers.