Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
When President Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act (also known as the Bipartisan Infrastructure Law) last November, he pledged a much-needed influx of federal money for clean water projects over the next five years.
The law will invest more than $50 billion to upgrade America’s aging water infrastructure, address lead in drinking water, and deal with PFAS contamination, all the while ensuring that funding is directed to disadvantaged communities.
Most of the water infrastructure dollars will flow through existing State Revolving Funds (SRF), which have provided low-cost financing for such local projects for decades. The U.S. Environmental Protection Agency reports that states have successfully stewarded more than $190 billion in SRF funds since 1988.
These state revolving funds receive EPA money in the form of annual capitalization grants, supplemented by state matching money and loan repayments to local governments. These are considered revolving funds, since local governments give loans, receive the repayments, then loan the money out again.
The Massachusetts Clean Water Trust administers two SRF programs in the state: The Clean Water SRF and the Drinking Water SRF. The trust manages the flow of funds to borrowers, while the Department of Environmental Protection handles project development and oversight.
The federal infrastructure law provides supplemental funding to Massachusetts clean water and drinking water SRFs, which already have annual capitalization grants of $55 million and $25 million, respectively.
While the EPA is still working on specific guidance, the new infrastructure law directs 49% of federal funds to communities as grants or principal forgiveness loans and makes the remaining 51% of funds available to communities for low-interest loans.
Nationwide, the drinking water and clean water SRFs will receive $23.43 billion, while $15 billion will be dedicated to replacing lead service lines and another $10 billion will address PFAS and emerging contaminants.
Massachusetts will receive about $188 million as a first-year allotment in 2022. Over the next five years, the state is projected to receive $375 million for the Clean Water SRF and $257 million for the Drinking Water SRF, according to the most recent calculations by the MassDEP. In addition, $328 million will be dedicated to removing lead from drinking water, $32 million will address PFAS contaminants in clean water, and another $87 million will deal with PFAS in drinking water over the next five years, estimates show.
Funding will also be given to 12 federally recognized geographic programs, including $15 million to the Southeast New England Coastal Watershed Restoration Program.
While the infrastructure law is significant, it needs to be put in perspective. The EPA claims the law is “the single largest federal investment in water ever made.” But for close to 80 years, Congress provided federal funds to municipalities to address local water quality challenges. The water construction grant programs of the 1970s and ’80s paid for the bulk of today’s infrastructure.
A decade ago, however, the EPA estimated that an investment of more than $655 billion was needed for drinking water and wastewater infrastructure over the next 20 years. The Massachusetts Water Infrastructure Finance Commission estimated in a 2012 study that there was a $20.4 billion gap in water infrastructure funding. These figures, generated before PFAS became a contaminant of concern, are now outdated and most certainly an underestimate. Though the influx of more than $50 billion nationwide for water programs — and more than $1 billion to Massachusetts — is significant, the water funding gap identified a decade ago remains.
For most communities, water and wastewater infrastructure is long past its expected lifespan and in need of urgent repair, replacement and upgrade. Local ratepayers will continue to be largely responsible for the cost of clean and safe water, and rates will need to increase to make necessary investments.
Most local governments also face complex affordability challenges, with some communities addressing shrinking rate bases, while others, with growing populations, face increasing segments of their rate base unable to afford the rising costs of clean water.
The success of building a stronger infrastructure with these new federal funds will depend on the ability of local clean water utilities to put the dollars to work. While MassDEP staff can assist, communities will need to understand the process and take advantage of these expanded opportunities.
Written by Robert D. Cox Jr., an environmental attorney at Bowditch & Dewey LLP