This update on the Old Lyme Shores Beach Association’s infrastructure project, which encompasses sewers, storm drainage, water, and roadway construction, provides a brief recap of the history prior to this past year, a summary of events over the past year, and a statement on our immediate priorities of execution and affordability.
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A Recap of Our History
Long ago, in 2010, Old Lyme Shores Beach Association (OLSBA) began to seriously engage with the State of Connecticut’s Department of Energy and Environmental Protection (DEEP) to address their concerns that our community wastewater systems contributed to polluting Long Island Sound, the state’s most valuable economic asset.
By 2012, OLSBA entered a bilateral Consent Order (CO-WR-MU-12-002) with the State of Connecticut. This 2012 CT DEEP Consent Order required OLSBA to resolve widespread septic failures and community pollution by abandoning on-site systems and connecting to the regional sewer system serving Old Lyme and New London. Due to dense development, shallow bedrock, and rapid-draining soils, DEEP deemed on-site wastewater treatment as infeasible. DEEP ordered OLSBA to retain engineers, obtain approvals, design/construct sanitary sewers, and complete remediation by June 30, 2016 (later extended to December 31, 2018 via 2016 letter). The order required quarterly progress reports and stated that non-compliance may trigger penalties.
In compliance with the order, OLSBA held a Special Meeting of the Association on 11 August 2012 to vote on the 2012 Bond Resolution to fund the project. The value of the resolution was set at $9.7M and it passed with 84% of the association’s 192 homes supporting it. The value of the resolution represents the top-line nominal price tag to the association of the project, before deducting the various subsidies paid by the State of Connecticut on our behalf. Think of it as the envelope in which the costs must fit – but the envelope need not be 100% filled. At about the same time, both Miami Beach Association (MBA) and Old Colony Beach Association (OCBA) also entered equivalent Consent Orders with the State of Connecticut.
With a shared common obligation, the Three Beaches (MBA, OCBA, & OLSBA) developed and entered into a 2016 Cost Sharing Agreement (CSA) for the common portions of the project, that include the Trunk Sewer, Force Main, and Pump Station. Advancing the project necessitated entering waste transfer agreements with East Lyme (2018) and New London (2018). These discussions also led to a new, 2018 Unified Consent Order that brought together the Three Beaches in a single agreement with DEEP.
By 2015, the State and the Town of Old Lyme entered the 2015 Administrative Order, which had equivalent terms. The Town’s Soundview and Area B homes would also need to utilize the shared portion of the wastewater project, so we amended the Cost Sharing Agreement (2020) to include the Town of Old Lyme as a contributing party. This then drove additional amendments to include the Town of Old Lyme, such as the New London Amendment (2021) and the East Lyme Amendment (2022). Eventually, the New London Agreement termed out and was renegotiated as the New London Agreement (2024).
The Pandemic Period, running from late 2019 through 2022, represents a mixed bag of activities that provided something of an inflection point in the project’s history. SJW Group, a publicly traded water utility holding company based in San Jose, California that was founded in 1866, acquired the Connecticut Water Company in October 2019. In 2020, they replaced around 9,000 feet of the over 90-year-old water mains aimed at upgrading the association from seasonal to year-round service, improving water quality, fire flow, and system resilience. Financially, this initiative relieved Old Lyme Shores of the cost burden of including this $1M dollar project, since SJW Group absorbed the cost with the assistance of various government funding sources.
During what we now refer to as “the pandemic period”, we finally went out to bid on the project in 2021. Unfortunately, those bids came in higher at ~$18M, nearly double the available bond capacity of $9.7M. The shock of the cost increases over prior estimates sent us back to the drawing board to regroup and reassess.
2025: A Busy Year for OLSBA
In December 2024, the DEEP Commissioner set a tone for action by sending a strongly worded letter to all parties, including a reminder to OLSBA of the serious impacts, including the threat of a $25,000/day fines, for further delaying full engagement with the remediation efforts. The year 2025 proved pivotal for OLSBA’s wastewater project, marked by technical progress and significant internal discussions on how best to proceed. On May 13th, Connecticut DEEP presented directly to the association, outlining the project timeline, reminding us of the technical rationale for sewers as the only viable solution, and estimating internal system cost estimates of approximately $11.4 million.
The pivotal moment came in May 2025, when OLSBA members convened for the supplemental bond resolution vote. The measure passed decisively with a 105-53 margin (66% favorable), reflecting strong community support for the investment after considering the context of the decision and the relative risks and benefits. This approval unlocked access to low-interest loans (2% for 20 years) and enabled OLSBA to proceed with bidding, demonstrating the association’s commitment to modernize its infrastructure and avoid enforcement actions by the State.
On September 4, DEEP approved Old Lyme Shores’ plans and specifications prepared by Fuss & O’Neill, allowing the project to move forward to bidding. OLS opened our bids on October 8. The internal sewer costs came in close to the DEEP estimates just below $12M and the storm drainage bids ranged from $2-3.5M. DEEP also stated that they would increase the storm drain cost eligibility for subsidy from 20% to 45%, resulting in additional real cost savings to OLSBA.
For the shared project—encompassing connections to town-managed pump stations and treatment facilities—bids first opened in February 2025 faced rolling extensions to accommodate revisions and ensure alignment across stakeholders, as reported at the November 17th WPCA Meeting. Contractor Baltazar extended the bid opening twice—first on October 10 to November 17, then again on November 17 to December 15. The extensions reflected the contractor’s willingness to accommodate the complexities of dealing with political resolution inside the four project entities. On October 24, DEEP communicated the intent to move the project forward with three beaches in the expectation that the Town would resolve their issues before proceeding to Permanent Loan Obligations (PLO). On October 27, DEEP approved two addenda addressing bid questions, pre-bid meeting details, and revised instructions and schedules.
On December 3, DEEP sent a critical letter setting a firm January 30, 2026 deadline for all entities to submit their authorization request to award construction contracts and complete Clean Water Fund applications. The letter emphasized that missing this deadline would result in loss of the $15 million supplemental loan forgiveness and potential enforcement actions. Just two days later, on December 5, Old Lyme Shores’ legal counsel Norbert Church provided guidance on the procedural requirements, confirming that the association’s vote to send a Notice of Award to DEEP was appropriate and legal, and that this step would allow DEEP time to respond with information about whether the bid met requirements. His letter noted that the December 3 DEEP letter indicated the association had taken necessary steps by authorizing transmission of the Notice of Award, fitting perfectly within DEEP’s timeline for allowing votes through January 30, 2026. On December 8th, OLS transmitted letters of authorization to DEEP for the two shared project contracts (pump station and trunk line). Then on December 18th, OLS transmitted the letter of authorization to DEEP for the internal project components.
2026: An Even Busier Start
With the Town of Old Lyme voters rejecting their supplemental bond resolution in December and Miami Beach missing the bid extension deadline, OCB once again led the effort to convince the contractors to extend their bids to correspond with a January 31, 2026 deadline set by the State for authorization to award contracts. Again, DEEP reinforced their intent to press the project forward in a December 19 letter stating that the Town was not released from their obligations and they were expected to rejoin the shared project, at a minimum.
Meeting this January 2026 deadline held paramount importance for OLSBA. It not only placed containment around costs, but also preserved eligibility for $15 million in loan forgiveness from EPA funds allocated to the state through the Clean Water Fund program. These funds needed to be allocated in early 2026 or be lost to the State. Given the clean water challenges faced in the North End of Hartford, Waterbury, and Bridgeport, we faced strong competition for these funds – especially considering the political optics. This forgiveness, tied to timely project advancement, represented a substantial subsidy, valued at up to $24,000 per household (EDU) to reduce our members’ cost burdens by offsetting principal on infrastructure loans. Failure to meet the deadline risked forfeiting these funds, not only for our own association, but for Old Colony and Miami Beach residents as well.
The final days of January 2026 brought both crisis and resolution to the Old Lyme wastewater project. On January 22, Connecticut DEEP issued a strongly-worded letter expressing deep disappointment with Old Lyme Shores Beach Association after learning that a previously undisclosed bond resolution issue threatened the entire multi-association project. The problem stemmed from non-standard contingency language in Old Lyme Shores’ earlier bond resolution that made project implementation dependent on all four parties’ participation, including the Town of Old Lyme. Bond counsel had previously identified this legal deficiency, but DEEP felt that Old Lyme Shores leadership had not failed to disclose it to DEEP during a January 12 meeting specifically convened to discuss project status. When Old Lyme Shores proposed scheduling the corrective vote for January 31—the exact day the contractor bids expired—DEEP warned this timing would prevent the department from conducting its legally required review and could destroy the viability of the shared project for all participating associations. The letter emphasized that after over ten years of collaborative work and a unique $15 million state investment, DEEP strongly advised holding the vote no later than January 27 to preserve the project and avoid consent order violations that could trigger enforcement penalties of up to $25,000 per day.
The crisis de-escalated following a productive meeting on January 23, during which Old Lyme Shores leadership explained that the January 31 date was specifically chosen to comply with their association bylaws. DEEP acknowledged this consideration and, recognizing the association’s commitment to submit all outstanding documentation in advance of the vote, agreed to position itself to issue authorization letters on January 31 contingent upon a favorable referendum result. This represented a significant shift from DEEP’s January 22 position and reflected both the department’s recognition of the association’s good-faith efforts and the practical reality that the bylaw requirements served a legitimate purpose in building membership support. The understanding reached at this meeting established a clear pathway forward: Old Lyme Shores would complete all required submissions early in the week, DEEP would conduct its reviews in advance, and final authorization would be issued on Saturday January 31, immediately upon confirmation of the vote outcome.
On January 31, 2026, Old Lyme Shores membership voted favorably (57-43) on the revised bond resolution, enabling DEEP to issue Final Construction Authorization to Award letters that same day. DEEP also issued Notices of Award for Old Lyme Shores’ internal sewers and association improvements to Baltazar Contractors for $11,436,115; the shared infrastructure shoreline sewer to Baltazar for $16,778,780 (base bid plus change order for force main and bioxide station work); the shared infrastructure pump station to JL Raymaakers & Sons for $4,817,700; Old Colony Beach’s internal project to Genovesi Construction for $6,482,695; and Miami Beach’s internal project to Baltazar Contractors for $15,543,450.
The authorizations made clear that the combined bond resolution capacity of all three associations was now adequate to cover total project costs, and that execution of Clean Water Fund construction agreements and Interim Funding Obligations would proceed.
After more than a decade of planning, multiple bid extensions, a town withdrawal, and a last-minute bond resolution crisis, the three beach associations successfully secured final State approval to proceed with construction of their mandated solution to the community’s documented pollution problem.
Looking Forward to What Comes Next
As we move forward into 2026, we have a real project to manage. Our beach association leadership teams will be focused on execution and affordability. Efficient execution of the project minimizes delays that will result in cost escalations and disruptions to our enjoyment of the beach during the summer seasons. With a projected elapsed time for construction of 14-18 months, getting “shovels in the ground” this Spring would go a long way to minimizing disruptions to the summer of 2027.
For those who have objected to the project based on affordability, please know that everyone involved has worked and will continue to work hard to minimize the real cost, maximize the return on investment, and maximize the subsidies from various government agencies. Throughout the process, time and delay have been the most significant factors driving cost escalations. By focusing our energy on execution, we contain our costs and combat future escalation and uncertainty.
We intend to immediately pursue two significant avenues to further reduce net real costs for our homeowners:
- Town Participation: We are aggressively pursuing the Town to voluntarily honor their contractual commitment to shoulder 30% of the shared portion of the project (2020 Cost Sharing Agreement). Immediate participation allows the Town to share in the $15M loan forgiveness, reducing their net cost to an estimated $2M or less. If they fail to participate, the three beaches will proportionately allocate the $15M among themselves and obtain full ownership of the shared infrastructure. As stated in the referenced letters from DEEP, the Town has not been relieved of their obligation to join the project. Should they delay such action, their buy-in cost would be subject to negotiation with us and likely cost them over $8M, proceeds benefiting the three beaches. Rejoining in the near term is therefore in the Town’s best interest.
- Loan Forgiveness Application: We remain in dialogue with DEEP and Treasury considering the issue of how to apply the loan forgiveness. Since the $15M in EPA loan forgiveness funding is a first-of-a-kind (FOAK) challenge, the order of application with the Clean Water Fund’s (CWF) 25% grant/75% loan split is a disputed issue that requires further discussion. Applying the CWF grant first (our preferred method, which received initial concurrence from some DEEP/Treasury staff) would result in an estimated $3.75M residual loan balance on a $25M project. Conversely, applying the $15M forgiveness first (DEEP’s latest model) would result in a $7.5M residual loan. This difference is substantial, causing a 2X difference in the outcome and an estimated $750k increase for OLS (~$200/EDU per year) in a four-party agreement. The common sense of this lies in the name – “loan forgiveness” – the loan does not exist until after the grant has been carved out of the nominal cost. We will work with the State to drive this point to a favorable outcome.
In terms of project planning and process, we will be meeting with our engineers, attorneys, contractors, and state agencies in the coming weeks to lay out a more detailed road map with activities, deliverables, and deadlines to share. Please watch for future updates. If you have questions, please ask them here.
John Cunningham
OLSBA President
10 February 2026