BOSTON – The Baker-Polito Administration announced on January 23rd that 70 projects, impacting 44 communities across the Commonwealth, are eligible to receive $580 million in 2% interest-rate loans to fund construction and planning projects designed to improve water quality, upgrade or replace aging drinking water and wastewater infrastructure and cut treatment plant energy use and costs, including an award of $5,198,000 to the city of Lawrence to fund drinking water infrastructure projects. The State Revolving Fund (SRF) awards were announced by Lieutenant Governor Karyn Polito at the New England Water Environment Association (NEWEA) Annual Conference.
“The Drinking Water SRF will provide important funding needed to improve Lawrence’s drinking water infrastructure, securing clean drinking water for the community. Thank you to MassDEP and the Baker-Polito administration – I am hopeful that we can continue to prioritize water quality in the future,” said State Senator Barbara L’Italien (D-Andover).
“The State Revolving Fund offers substantial funding at an affordable rate, which allows us to increase the availability of safe, clean drinking water and ensure the proper disposal of wastewater, while stimulating our economy through local investments,” said Governor Charlie Baker. “Water resources and infrastructure are vitally important to the Commonwealth, as shown by our recent statewide drought, and these funds help to address the needs of municipalities across the Massachusetts.”
“Funding for water infrastructure and treatment plant upgrades are critical to communities across the Commonwealth continuing to provide safe, reliable drinking water to their residents,” said Lieutenant Governor Karyn Polito. “Through these State Revolving Fund loans our administration is committed to working with our municipal partners to secure the capital needed to build the treatment plants and replace the water mains, while integrating renewable energy components into the projects.”
SRF financing is administered by the Massachusetts Clean Water Trust (MCWT) and funds projects implemented by cities and towns, regional water supply and wastewater treatment districts, and the Massachusetts Water Resources Authority (MWRA). The projects include 50 clean water initiatives (see Table 1) totaling more than $454.9 million and 20 drinking water projects (see Table 1) totaling more than $125.1 million. Communities offered SRF funding in this round must decide to move forward with the project by June 30, 2017 and secure local funding authority.
Six of the projects receiving funding are for renewable energy, energy efficiency or green infrastructure initiatives. These projects involve energy efficiency upgrades to treatment plants and the on-site installation of renewable energy technologies, such as solar cells and wind turbines. Energy use at wastewater and drinking water treatment facilities is a major contributor to overall energy consumption for many cities and towns, with communities statewide spending approximately $150 million per year on electricity to treat 662 billion gallons of wastewater and drinking water. About 30 percent of municipal energy use derives from water treatment. This year, 35 of the new projects are eligible to receive principal forgiveness. Principal forgiveness is awarded to renewable energy projects and for projects in communities that meet the affordability criteria established by the MCWT. The affordability criteria factors in per capita income, unemployment rate and population trends.
The SRF is comprised of two programs that have provided nearly $7 billion to Massachusetts projects: the Clean Water Fund, first capitalized in 1989; and the Drinking Water Fund, which began operation in 1999. More information on the two SRF programs can be found here
The Drinking Water SRF provides more than $125.1 million in financing for drinking water projects across the Commonwealth. Approximately $95 million will fund 16 new construction projects, $27 million will be allocated towards funding three previously approved multi-year projects, $2 million will fund an emergency set-aside account and $500,000 is allocated for a single planning project. Massachusetts awards infrastructure financing under the SRF, which is administered by the MCWT – a joint effort of MassDEP, the Executive Office of Administration and Finance and the State Treasurer’s Office.
To be eligible for Clean Water or Drinking Water SRF loans, municipalities, wastewater districts and water suppliers filed applications with MassDEP last year demonstrating that proposed projects offer significant public health or water quality benefits, have local funding authorization, and a commitment on the borrower’s part to file a timely loan application. The projects on the 2017 SRF list must now file loan applications and receive MassDEP approval to obtain funding.
MassDEP is responsible for ensuring clean air and water, safe management and recycling of solid and hazardous wastes, timely cleanup of hazardous waste sites and spills and the preservation of wetlands and coastal resources.