03/07/2011

WG1: January 11 Minutes

Commonwealth of Massachusetts
Water Infrastructure Finance Commission

Working Group One
Current Water Infrastructure Needs and Long Term Challenges
Approved minutes: January 11, 2011 at 10 am Room 109 State House

In a meeting duly posted, Working Group One (Current Water Infrastructure Needs and Long Term Challenges) convened at ten am in Room 109 of the State House.

Members Attending: Rep. Carolyn Dykema, Chair; Phil Jasset, Dave Terry, Bill Callahan, Dave Riedell, Becky Smith, Peter Shelley

Also attending:  Sally Schnitzer, Leah Robins, Brendan Jarboe, John Clarkson, Assistant Director of Water Policy EEA, Ben Pearlman, Heather Friedmann (both from the Joint Committee on Environment, Natural Resources, and Agriculture).

The group approved the meeting minutes from December 14th.

The group reviewed questions raised in the December 14th meeting, as follows:

 1. In what respects are currently available needs assessments (EPA, SRF) incomplete, and how do we want to quantify/describe undocumented needs?  (Including some discussion of the Pennsylvania Commission Report).

Dave Terry, Rep. Dykema and Bill Callahan reported back to the group on their conversations with individuals involved in the Pennsylvania study. Bill Callahan spoke with Lee Murphy, an EPA employee that worked on the Pennsylvania report through the DEP, who sent additional information on drinking water and the gap analysis. Cadmus, the consulting agency that conducted the Pennsylvania gap analysis and conducts the EPA needs assessments has offered to come and meet with the commission. The methodology that Cadmus employs is widely utilized and the group agreed that the commission should meet with them. The group agreed that inviting Lee Murphy who worked with the Pennsylvania commission as well would be beneficial.

The State of New Hampshire is in the midst of conducting its own water sustainability study and has produced an interim report in which the commission has asked for more time. The interim conclusions are similar to the conclusions of the Pennsylvania study: focus on fair pricing of water for revenue.

Would it be helpful to have MMA do a survey of some sort?  MWWA has already done a survey, and hopes to have results available to the Commission by February.

Note that the last Drinking Water survey conducted by EPA underrepresented Massachusetts need in part because Massachusetts towns did not use the correct  ‘jargon’ and EPA struck a lot from the list.

The group continued to discuss the Pennsylvania report. Pennsylvania has filed a placeholder bill but does not have enough signees. Bill Callahan agreed to analyze the content of this bill and where the commission’s recommendations stand in the legislation at the next meeting.

How do we want to quantify /describe the financial need for stormwater?

The city of Philadelphia was raised as an example of alternatives to traditional stormwater approaches and has been applying for waivers from the EPA. The speakers from Cadmus and the Pennsylvania study should also speak on stormwater specifically if they have information on that subject.

The group returned to the question of how to quantify need and if the commission should find a number or range. The group discussed the reality that financial need will depend on the approach and future potential regulations could also impact the costs. The number is likely large and uncertain. There was discussion of calculating a range and focusing on the implications of the range.  There was also discussion about the commission’s role and charge of quantifying a range and whether this can be done in the allotted time.

When will the Franklin area study be over?  When will we learn things from their experience?

RDA information may be available after the January deadline.

Kurt Spaulding is the Region 1 EPA administrator and is in charge of enforcing the EPA’s stormwater program. Kurt could also talk to the commission about the EPA’s RDA program. Phil Jasset will contact him and ask him about coming to speak to the commission.

What are the factors contributing to total need, and to what extent can we influence these?

The group discussed the opportunities for energy efficiency and retrofitting of existing facilities to lower energy costs. There are examples of these projects, such as a DEP Pilot of 14 water and wastewater plants that utilized stimulus money, and a windmill in Falmouth.

The group talked about the role of regulations.  Regulation can be a big driver for rising infrastructure costs, and should therefore be based on sound science, and be cost effective.  The big question is how to find the most efficient way to meet the objective.  There is a need for flexible regulation and the use of incentives in order to encourage efficiency.  

New regulations may cause resources to be diverted from planned maintenance projects by water providers.

There are opportunities for more efficient management of water systems through regionalization or regional management, improved assets analysis and day-to-day operational management.  The largest factor driving cost is repair and replacement costs. A solid management plan is one that is looking for ways to improve operations and better understand the system including its assets via an asset management plan. The money needed for plans such as these may be a problem for smaller systems. The Pennsylvania report recognized this issue and put out a help guide for the smaller systems, while recommending capital improvement plans become mandatory.

Two major factors influencing need are energy and operations. Asset management plans can assist with operations and may include SCATA systems that allow facilities to monitor operations, GIS analysis of infrastructure, regionalization etc.   The Pennsylvania report recommended requiring asset management in order to apply for capital assistance.

The Commission needs to build the case that asset management and capital planning must be done and must be included in the cost of water.  Engineering firms are already thinking this way.   Small towns may need financial assistance and DEP will be cut, so how can this be accomplished. 

Possible Findings:

We haven’t yet priced water at its value. 

Education will be important. 

Water will cost more

We need to wring more out of every dollar – technical assistance is a way to do this.

The group agreed that in order to create need numbers, the group will have to use the facts as they stand today and not read into the future.

 What are the current sources of funding, how have they trended, and what is the expectation for the future of each funding source?

The group discussed the agenda question on current sources of funding and the downward trend of federal funding (increased because of stimulus funds but unlikely to continue at stimulus levels) and the increasing costs paid by municipalities. There was discussion on potential overlap with group 4 and it was agreed that the outline, due at the end of January, was a way to identify gaps and overlaps. Dave Riedell has data on history federal SRF grants and will send to the group.

The group moved on to the last agenda question: How can we describe/quantify how choice of solution/technology (decentralized/centralized; green/innovative) may impact financial need.

Needs should be based on existing technology with recognition of cost mitigation potential with newer technologies. Capital plans should include alternatives analysis. The Pennsylvania study defined the gap and highlighted multiple ways to close it through increasing rates, becoming more efficient and put things in terms of cost reductions. The report did not factor in unknowns such as uncertainty about future EPA regulations. Doing capital plans every five years is one way to factor in new demands, costs and regulations.

Before adjouring, the group discussed the next deliverable due at the end of January (an outline of the group’s recommendations so far) and reviewed the tasks agreed upon at today’s meeting:

  • Rep. Dykema’s office will get out the first draft of the outline for review by the committee.
  • Dave Terry and Rep. Dykema will try to schedule Cadmus and Lee Murphy for a group meeting for the morning of the 26th, the afternoon on January 31st, sometime on February 1st or the afternoon of February 3rd. Members are encouraged to take a look at the Pennsylvania report before that meeting.
  • Phil Jasset will talk to Kurt Spaulding about a separate meeting on stormwater and RDA process. A full commission meeting with him, followed by a separate group one meeting was discussed.
  • Dave Riedell will get the charts on federal and SRF funding since the start of SRF.

The meeting adjourned around noon.

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