State awards $1.3 billion in loans and grants to fund wastewater and drinking water projects / iBerkshires.com
BOSTON — The Baker-Polito Administration announced that 183 projects across the Commonwealth are eligible to receive approximately $1.3 billion in soft loans and grants to fund construction, planning and asset management projects aimed at: improve water quality, improve or replace aging drinking water and wastewater infrastructure, and reduce wastewater treatment plant energy use and costs.
These offerings include nearly $189 million in additional funding that Massachusetts is expected to receive this year from the federal bipartisan infrastructure bill (BIL) and $100 million from American Rescue Plan Act (ARPA) funding.
“Sewage and drinking water facilities play a critical role in protecting our environment and public health, and this funding supports our cities and communities’ efforts to improve and modernize this vital water infrastructure,” said Governor Charlie Baker. “The Baker-Polito administration has made it a priority to invest in our critical infrastructure, including the proposed two rounds of ARPA funding to fund key projects. These projects will increase the availability of safe, clean and reliable water resources across the Commonwealth for many years to come.”
Funding for the State Revolving Fund (SRF) is administered by the Massachusetts Clean Water Trust and funds projects undertaken by cities and towns, regional water supply and wastewater treatment districts, and the Massachusetts Water Resources Authority (MWRA). The projects include 88 clean water projects (see Table 1) with a total value of approximately US$963 million and 61 clean water projects (see Table 1) with a total value of approximately US$363 million. An additional $3.7 million is offered by the Trust in grants for 34 Asset Management Planning projects. Communities offered SRF funding in this round must elect to proceed with the project and secure local funding authority by June 30, 2022.
“Our communities deserve sanitation and drinking water infrastructure that fully meets their needs, protects their residents from harm, and preserves our natural resources,” said Lieutenant Governor Karyn Polito. “Additionally, this funding from the State Revolving Fund will help boost the local economy by building new treatment plants and replacing aging water lines.”
According to the Clean Energy Results Program, led by MassDEP, 17 of the water infrastructure projects that receive funding are renewable energy, energy efficiency, or green infrastructure initiatives. Energy use in wastewater and drinking water treatment plants is a significant contributor to total energy use in many cities and communities, with communities across the state spending approximately $150 million per year on electricity to treat 662 billion gallons of wastewater and drinking water. About 30 percent of municipal energy consumption comes from water treatment.
“I am proud to work with the Baker Polito Administration to announce this important investment in water infrastructure for our cities and communities. These projects are critical to the health and well-being of everyone here in Massachusetts,” said State Treasurer Deborah B. Goldberg, Chair of the Clean Water Trust. “This increase in federal grants plus soft loans through the Trust allows communities to fund low-cost water infrastructure projects.”
This year, 90 of the new projects are eligible to receive principal default. Principal forgiveness is awarded to renewable energy projects and to projects in communities that meet affordability criteria set by the Clean Water Trust. The affordability criteria take into account per capita income, the unemployment rate and demographic trends.
The Commonwealth has also offered to lower the SRF lending rate from 2 percent to 1.5 percent for communities that support the Housing Choice Initiative. Twenty-eight applicants have the Housing Choice designation: Acton, Amherst, Andover, Barnstable, Belchertown, Billerica, Boston, Brockton, Burlington, Fall River, Franklin, Framingham, Haverhill, Lawrence, Littleton, Lowell, Lynn, Medfield, Medway, Nantucket, Northampton , Orleans, Quincy, Plymouth, Swampscott, Taunton, Tewksbury and Tyngsborough.
The SRF consists of two programs that have committed more than $8 billion to projects in Massachusetts: the Clean Water Fund, which was first capitalized in 1989; and the Drinking Water Fund, which began operations in 1999. Further information on the two SRF programs can be found here.
This year, the Clean Water SRF is providing $963 million in funding for clean water projects across the Commonwealth. Approximately $898 million will fund 67 new construction projects, $41 million will be allocated to fund four previously approved multi-year projects, $3 million has been allocated to the Emergency Account, $5 million will go to Community Septic Management Program directed to remediate failed septic systems in participating communities, and $15 million will fund 17 proposed design projects.
This year, the Drinking Water SRF is providing $363 million to fund drinking water projects across the Commonwealth. Approximately $319 million will be allocated to fund 43 new construction projects, approximately $29 million will be allocated to fund six previously approved multi-year projects, $5 million will be allocated to fund an emergency account and nearly $10 million US dollars will be provided to fund 12 engineering projects.
An additional $3.7 million will be offered by the Trust in grants for 34 Asset Management Planning projects, with 27 communities qualifying for Clean Water projects and seven communities qualifying for Clean Water projects.
Massachusetts provides subsidized infrastructure financing under the SRF, which is administered by the Trust – a joint effort by MassDEP, the Executive Office of Administration and Finance, and the State Treasurer’s Office.
To be eligible for SRF loans for clean water or potable water, municipalities, sanitation districts and water utilities submitted applications to MassDEP last year demonstrating that the proposed projects provide significant public health or water quality benefits, via a local Have financing approval and demonstrate that there is an obligation on the part of the borrower to submit a loan application in a timely manner. Projects on the 2022 SRF list must now apply for credit and receive MassDEP approval to receive funding.
The next call for SRF projects to be considered for the intended exploitation plan 2023 will be opened by MassDEP no later than July 1, 2022.