10/25/2011

July 20, 2011 Minutes

Commonwealth of Massachusetts
Water Infrastructure Finance Commission Meeting
Approved Minutes July 20, 2011

In a meeting duly posted, the Massachusetts Water Infrastructure Finance Commission convened at ten thirty am in the second floor conference room at the Saltonstall Building, 100 Cambridge Street, Boston MA.

Members Attending:

Senator Jamie Eldridge, Representative Carolyn Dykema,  Thomas Walsh, David Terry (DEP Commissioner’s designee), Martin Pillsbury; Mike Martin, Thomas Tilas; Philip Jassett; Robert Zimmerman; Paul Neidzweiki; Peter Shelley; Enrique Zuniga (Treasurer’s designee)

Paul Schwartz (sitting in for Becky Smith);

Guests:

Nate Keenan (WPAT); Ann Rhinelander; Bruce Maki; Linda Maki; Ana Alakija Waddey (Who Decides); Jennifer Pederson; Leah Robins,  Sally Schnitzer; Marianne Connolly (MWRA), John Clarkeson (EOEEA);  Valerie Nelson, Lise Marx (MWRA); Stephen Estes-Smergiessi (MWRA); David Cole; Matt (intern);  April (intern)

Senator Eldridge called the meeting to order at 10:42 am.

The Senator made several announcements:

  • Please keep conversations, including cell phones, quiet in the hallways as there are numerous meetings and hearings taking place on this floor
  • Representatives from “Who Decides” will be taking some photos at the beginning of the meeting.
  • There is a handout from “Who Decides”
  • Location of bathrooms on this floor

The Senator introduced the newest member of the Commission, Mr. Enrique Zuniga, who is the new Executive Director of the Water Pollution Abatement Trust.  He is the Treasurer’s appointment.

Mr. Tilas noted that he believed that the Commission has listened to many individuals but that today’s meeting is intended as a work session for Commissioners, and that the discussion should be kept to members.  The Senator noted that the Commission is subject to the Open Meeting Law.

The minutes from the June 28, 2011 meeting were approved with one change on the last page.  The comments from Who Decides were made by Ms. Fronteira, not Ms. Maki.

The Commissioners introduced themselves around the table.

The Senator asked the Commissioners to begin work on the central “mission” of the meeting – namely to review and edit the draft recommendations compiled by his staff.

Mr. Shelley stated that the flow of the recommendations was difficult to follow.  For him, story line starts with the Gap, but whatever the number, it is very large.  Then, to close the Gap, we need to think differently about how we manage our water resources – and fundamentally rethink how we do business.  We need to optimize the Triple Bottom line – good environmental impact; economic feasibility; socially acceptable.  The recommendations should be restructured to make that the overall theme.  If we continue to use our same thinking, we will continue the silos, the balkanized approaches, and the Gap will continue.

Senator Eldridge acknowledged his remarks, and refocused the attention on the draft recommendations.   Ms. Schnitzer noted that the document is arranged with general principles first, followed by more detailed recommendations.

The Commission worked its way through the document making edits, additions, and other changes — with a break for lunch from 12:30 to 1:15.  Leah Robins made “live” edits of the document as the conversation progressed.

Some of the major points of debate included:

  • Statement that any funding set aside for water infrastructure have “dedicated” funds, rather than be deposited in the General Fund subject to further appropriation.
  • Debate on the use of the term “innovation” in the draft.  Mr. Jasset is still concerned that the draft and the recommendations imply a lack of innovation during the past forty years when clearly much innovation was involved in cleaning up the Commonwealth’s waters after passage of the Clean Water Act and the Drinking Water Act in the 1970’s.  He also feels that the draft implies that we will abandon centralized treatment.  Mr. Schwartz commented that innovation can make a big difference for nutrient recovery, reduction of phosphates, and the use of systems like no-water toilets. Mr. Zimmerman commented on aspects of centralized treatment that he believed were detrimental, and which need new “innovative” solutions. Mr. Terry commented that both of these points of view were important and “right”.  We need to get across that we have made remarkable progress but new ideas are always needed.  Innovation has happened, and continues to happen, under current regulations and programs.
  • Importance of fully addressing stormwater issues.  This is a huge unknown cost right now, but has the potential to swamp towns with the magnitude of the need. Moreover, the sentiment is that getting stormwater “right” may lead to cost-effective reductions in treatment and mitigation which may ultimately help reduce the Gap.
  • Getting the recommendations right on affordability.  Towns vary widely in rates and rate structures.  Communities also vary in terms of median household income.  Is the 1.5% a valid industry standard?  Mr. Martin suggested implementation of a lifeline rate to prevent pricing customers out of the market.
  • Definitions – some terms, such a full cost pricing, need better definitions.
  • Add more on the roles of regional planning agencies in technical assistance programs
  • Look for ways to pay for rate structure studies in small towns
  • The need for federal action on research and development.  Grants?  Tax credits?
  • Mr. Pillsbury asked that the topic of new revenue be moved higher up in the draft.  This is a central recommendation and needs to “pop” out more for the reader.
  • Mr. Pillsbury said that the recommendation on new revenues needs to identify an avenue for towns that do not currently have a utility and rate structure.  This is probably something like a property tax surcharge that would provide locally based revenue.
  • Creative new ideas, such as putting ads on water towers to raise funds for  water-related educational priorities
  • Debate on the preferred source of new revenues:  the Senator argued that the Commission should put forward its recommendation for how to raise the revenue (for example, the “mil” on water usage and certain specific taxes) and not a “laundry list” of ideas.
  • Rates:  Consider the idea of “benchmarks” for rates
  • Tax credits and accelerated depreciation benefits (as used in solar and wind power applications) might encourage progress in addressing stormwater issues and resulting nutrient pollution.
  • Risk:  there was a debate about how to deal with the risks related to innovation.  Who is responsible when there is failure?  Is it right to insure against failure?  Who should bear that cost?
  • State and federal funds sections should be broadened to include more requests, not just the SRF.  Think about research and development, tax credits to encourage innovation.
  • Massachusetts as a hub of water innovation:  Several people mentioned that the Administration is pursuing this idea, as well, particularly after the Governor’s recent trip to Israel.
  • Primacy:  there is still debate on whether this is an important element of our recommendations or not.  Questions include:  how much it would cost; where the revenues would come from to pay for increased staff levels; and how this might impact the investment decisions made.

The Commission identified the following areas where additional data/reports need to be looked at:

  1. Estimate of how much revenue you would get from a tax on pesticides or fertilizers
  2. Cadmus report on primacy written in the late 1990s
  3. Attempt to identify watersheds where intermunicipal efforts should be encouraged
  4. Ask WPAT for a cost analysis of reducing SRF interest rates from 2% to 0%.

The Commission would like Working Groups to further refine the following sections:

  1. Additional recommendations in the federal section, including possible grants or tax credits for research and development  (WG#4)
  2. Additional specificity on regionalization and watershed management  (WG#3)
  3. Recommendations on Public Private Partnerships  (WG#2)
  4. Recommendations on Project Delivery (WG#2)

The Commission adjourned at 3:48 pm.

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