03/07/2011

WG1: December 14th Minutes

Water Infrastructure Finance Commission

Working Group 1: Current Water Infrastructure Needs and Long Term Challenges
Tuesday, December 14, 2010, noon
State House, Room 348

Approved Meeting Minutes

In a meeting duly posted, Working Group One (Current Water Infrastructure Needs and Long Term Challenges) convened at 12:10 in Room 348 of the State House.

Members attending: Rep. Carolyn Dykema, Chair; Bob Zimmerman, Becky Smith, Bill Callahan, Phil Jasset, and David Riedell.

Also attending: Leah Robins

Representative Dykema, Chair brought the meeting to order over cookies and holiday treats. 

The Minutes of the Working Group One meetings on October 20, 2010 and November 30, 2010 were approved without change.

Rep Dykema moved to skip to item 3 on the agenda, “In what respects are currently available needs assessments (EPA, SRF) incomplete, and how do we want to quantify/describe undocumented needs?  Discussion of Pennsylvania Commission’s Report.”  This question is the bulk of our charge as a working group.  There are a variety of needs studies that have been done from a variety of sources but there are concerns that these do not representative the entire scope of need.  Pennsylvania conducted a study, similar to what we are engaged in now, look to their experiences for learning values. 

There was a discussion on what studies do exist: EPA Needs Assessments for Drinking Water (website; 2007, 2011) and EPA Needs Assessments for Clean Water (2008, 2012)

  • Compiled every 4 years, with the 2011 Drinking Water assessment process set to begin this January. 
  • For the Drinking Water Assessment, a selection of communities are chosen by EPA as types and their data, collected by engineers who DEP hires to work with towns, are extrapolated across Massachusetts to give our need.  No member can recall a major system ever declining to participate and thereby decrease MA’s reporting conditions. 
  • Covers Capitol costs only, does not reflect operation and maintenance costs expect if it leads to capitol costs like new pipe expenditures

There was discussion of the Pennsylvania Report, led by Bill Callahan who has spoken to Chair of Gap Study and Pennsylvania DEP counterpart.

  • Legislation package has been submitted with the report, but no action has yet been taken, looking for sponsor

Pennsylvania Gap Analysis

  • Cost was calculated to be capital investment, operation and maintenance costs, repair, dept repayment
  • Funding was calculated to include state and federal funds and a user charge calculated at 1.5% median income for water and 1.5% median income for waste water (percentages coming out of a 1988 EPA report)
  • User charge is assumed to cover much of the gap—increased value of water is argued for in the report
    • Question: where do MA user fees stand in comparison to % of median income benchmark?  How close are we to the 1.5% for water and 1.5% for waste water?
  • The formula was seen to be understandable and defensible.
  • At the same time also focused on host of initiatives that can reduce costs (like regionalization of staff and then increasing over time to be a full regionalization)

Rep Dykema then moved the discussion to how Pennsylvania calculated their needs estimates.

Bill Callahan summarized that operators were trained to take the data from towns using a 6 page questionnaire for waste water and 1 page questionnaire for water.  Mr. Murphy of Pennsylvania would be willing to share those resources with us should we be interested in going that route.  Their needs estimate did not include storm water. 

This study showed that the largest need was in small towns under 3,000 and cities over 50,000 people and that drinking water was more costly than waste water. 

Concerns were raised about the cost and ability to complete such a comprehensive study within the time frame of the Commission on one hand or even the time frame to perhaps include questionnaire in the surveys DEP engineers, on behalf of EPA will begin making on January 1 for the upcoming EPA Drinking Water Assessment.  On the other hand, there was a shared concern among all members that whatever system is used to calculate our needs will have to be based in science so that it can be defensible. 

Next step: Rep Dykema will coordinate with Bill Callahan, Dave Terry and whoever else he recommends from DEP be part of the conversation, to discuss the best possibilities for getting a grip on MA needs using the Pennsylvania example as a guide.

Rep Dykema then moves the discussion to agenda item #4 “How do we want to quantify/describe financial need for stormwater?” with the acknowledgement that this is a difficult issue to quantify.

There was a discussion of looking for a model program of estimating the need, similar to how the Pennsylvania report is functioning for the rest of the needs, but there was a general consensus that Portland Oregon’s program was the furthest along, and even then there are widely varying costs per square mile, particularly depending on what options are allowed for in the regulations. 

What we do know regarding storm water are the RDI costs for Milford, Bellingham and Franklin and perhaps those costs could be extrapolated for a very squishy number. 

 Rather than focus on the question of “how much will it cost,” perhaps the emphasis should instead be on ideas for curbing costs so that whenever regulations are implemented regarding storm water, the Commonwealth is able to do so with ideas for cost effective implementation.  Those ideas discussed were:

  • Decrease cost to property owners through low % loans through municipalities, similar to PACE legislation for energy use, that would allow property owners and municipalities to comply in efficient and cost effective way
  • Education/certification program to push information out to the broadest group possible.  Pilot program with local schools perhaps in the RDI communities.  This would certify contractors, installers, for things like rain swell construction creating good jobs.  Will incentivize the next generation of engineers and contractors to look at this issue.
  • Engage EPA so that we can help influence the conversation.

A suggestion is made for the Working Group chairs to meet to find out what directions the conversations are going to ensure that nothing is being left out or over-covered.

Rep Dykema departs early at 1pm and leaves the working group to continue the discussion.

Conversation continues with a discussion of point 2 on the agenda: “What time horizon shall we use for assessing need?”  The EPA Needs analyses project out 20 years and it is widely agreed that going beyond that need, our numbers will be become increasingly unreliable.  The general consensus is that while our charge in statute is to look at 25 years, 20 years will be the most reliable.

Conversation moves then to point 5 of the agenda: “What are the factors contributing to total need, and to what extent can we influence these factors (eg, regulation, energy)?” 

  • Much of this is dependent upon the technology used and overlaps closely with Group 3’s charge. 
  • In the Pennsylvania report there was a separate section on how to reduce costs over time, with headings such as regionalization, asset management and increasing operation efficiency.   
  • The Five Pillars of the EPA (http://www.epa.gov/lean/thinking/fives.htm) were mentioned as another model.
  • Concerns were raised about the inclusion of regionalization as an idea, perhaps regionally managed local systems would be preferable or educating practitioners 

Next meeting set for January 11th at 10am pending information about any upcoming meetings of the full commission. 

Meeting adjourned at 1:15pm.

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