SalemNews.com, Salem, MA

March 20, 2014

Pols seek to expand fund for water and sewer projects

By Christian M. Wade
CNHI State House Bureau

---- — BOSTON — As communities throughout the state struggle to replace crumbling water and sewer systems, lawmakers are homing in on ways to plug an ever-widening funding gap.

The sheer size of the needs facing local governments statewide — pegged by lawmakers at more than $21.4 billion in the next 20 years — is complicating those efforts, as are concerns about the state’s borrowing capacity.

The House is considering a bill to raise the spending cap for a low-interest, revolving loan program by $50 million a year to help local governments foot the bills for water, sewer and storm-water projects. The $138 million fund would be renamed the Massachusetts Clean Water Trust.

The current version of the bill is a fraction of an earlier proposal, which would have allowed $250 million in additional borrowing and spent $200 million on local projects. A Senate committee removed those provisions amid concerns about over-borrowing.

Geoff Beckwith, executive director of the Massachusetts Municipal Association, said the legislation is a “step in the right direction,” but its funding is only a drop in the pan.

In 2012, a legislative task force called it one of the biggest fiscal challenges for local governments.

“Water and sewer pipes are typically out of sight and out of mind because they are underground, but they are crumbling under our feet,” said Beckwith, whose group lobbied hard for the $450 million in increased financing.

Salem has been spending $3 million to $4 million per year on water and sewer upgrades — work funded through a mix of local funds, federal grants and low-interest municipal bonds. Officials project the city’s long-term infrastructure needs at more than $100 million, said city engineer John Knowlton.

Gloucester, which has experienced several major water main breaks in recent years, has spent more than $100 million on system repairs in the past six years, and Public Works director Mike Hale estimates the city needs another $100 million to pay for its long-term infrastructure needs.

“Our concern is that the even the short-term costs are going to break the bank,” Hale said. “The problem is that many of these water and sewer systems are more than 120 years old, and little has been done until recently to replace them.”

In Haverhill, the city faces pressure from the U.S. Environmental Protection Agency to make improvements to a combined sewer overflow system, which has cost the city more than $18.5 million to date, and is still polluting the Merrimack River.

Haverhill Mayor James Fiorentini said he appreciates that lawmakers are recognizing the need to provide more access to financing, but the federal government should be paying for projects required to comply with the federal Clean Water Act.

“The feds really need to step up to the plate,” Fiorentini said. “If they’re requiring us to do this, they should come up with funding to help pay for it.”

In 2013, Gov. Deval Patrick’s administration doled out more than $512 million to nearly 90 local water and sewer projects through the state’s revolving loan fund.

The legislation increasing the trust fund’s borrowing capacity would require at least 80 percent of the $138 million cap to be loaned to cities and towns. It would provide low-interest loans and in some cases forgive the principal.

Under the changes, the state would provide matching grants to cities and towns to join the Massachusetts Water Resources Authority, which provides water from the Quabbin and Wachusett reservoirs to 51 Eastern Massachusetts communities. The current entrance cost is a one-time fee of $5 million for 1 million gallons of water per day.

Sen. Marc Pacheco, D-Taunton, who chairs the joint Committee on Environment, Natural Resources and Agriculture that advanced the legislation, said he was disappointed that the additional $450 million authorization was taken out of the final Senate bill.

“It’s like throwing pennies at a billion-dollar problem,” he said. “These cities and towns are facing significant costs, and quite frankly, the original bill that we put forward was not adequate to addressing these needs. But it’s better than no bill at all.”