MMA letter to Environment Committee supporting water infrastructure finance bill

The Honorable Anne M. Gobi, House Chair
The Honorable Marc R. Pacheco, Senate Chair
Joint Committee on the Environment, Natural Resources and Agriculture
State House, Boston

Dear Representative Gobi, Senator Pacheco and Members of the Committee:

On behalf of the cities and towns of Massachusetts, the MMA is writing to express our strong support for S. 1880, “An Act Improving Drinking Water and Wastewater Infrastructure,” filed by Senate President Therese Murray and Senator Jamie Eldridge.

We appreciate the leadership and commitment of President Murray, Senator Eldridge and the Legislature to work with municipal officials to find innovative and cost-effective mechanisms to fund the construction of environmental projects. Aging infrastructure and costly regulations are posing extraordinary challenges for local governments. Now more than ever, cities and towns need strong and effective tools to protect public health and the environment and to promote economic growth.

In 2009, the Legislature created a special Water Infrastructure Finance Commission and charged that panel with developing a comprehensive plan to ensure that the Commonwealth and cities and towns can adequately maintain and upgrade their water systems. We want to thank the Commission for its great work in documenting that the Commonwealth’s municipalities face a $10.2 billion gap in the resources needed to adequately maintain drinking water systems and an $11.2 billion shortfall for resources needed to maintain wastewater systems.

S. 1880 is a good start to providing additional resources to close a portion of the massive water infrastructure financing gap. The legislation would provide an increase of $50 million in debt capacity for the Water Pollution Abatement Trust (WPAT) by raising the spending cap for the WPAT from $88 million a year to $138 million and directing the WPAT to provide matching grants, principal forgiveness, and zero-interest loans to help cities and towns meet their drinking water and wastewater infrastructure needs.

In addition, the measure would give communities more tools to raise own-source revenues through water banking. A water bank is a forward-looking approach that enables cities and towns to better manage their drinking water, wastewater and stormwater needs by allowing communities to charge developers a reasonable fee, at local option, to cover a portion of the cost of supplying and treating water to the new businesses or residents. Communities such as Weymouth and Danvers report excellent results with the water banks that they have implemented, and these measures have also benefited the local economy.

The legislation also would make it much easier for cities and towns to join the Massachusetts Water Resources Authority by providing matching grants to communities to cover half of the $5 million entrance fee.

One aspect of the legislation that we are still reviewing is the language that would require enterprise funds in every community that accesses the WPAT. Our concern is that this provision may not be a match for every locality and district.

Our cities and towns are also facing huge upcoming investments to deal with stormwater infrastructure, conservatively estimated by the Water Infrastructure Finance Commission to cost approximately $18 billion over the next 20 years, which is why we appreciate the provisions in the bill to provide incentives for communities to invest in green infrastructure such as dam removal, land preservation and stormwater recharge.

Water infrastructure has long been a priority for municipal officials. Last month, the MMA and local leaders testified before the Committee in support of the Environmental Bond Bill, which would provide $57 million for the Water Pollution Abatement Trust, and provided strong support for H. 690, which would authorize $2 billion in borrowing over the next 10 years for water infrastructure. Together with these bills, S. 1880 would provide significant resources to cities and towns to repair decaying water systems.

Local officials know the importance of asset management for water systems. Water and wastewater utilities are among the most capital-intensive of all utility services. Cities and towns across the Commonwealth have made enormous investments in water, wastewater and drainage infrastructure, and they know that these investments are essential. Yet, we all know that other public assets such as schools, roads and recreational facilities are easier for the public to appreciate and fund because they are so visible. In terms of financial need, the water and wastewater assets in many parts of the state require far greater capital investment. The reliability and performance of these systems are essential to our everyday quality of life and economic future.

Thank you very much.

Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA