07/20/2011

WG4: January 24, 2011 Minutes

Commonwealth of Massachusetts

Water Infrastructure Finance Commission

Working Group Four

January 24, 2011 in Room 511 State House

Approved

In a meeting duly posted, Working Group Four of the Water Infrastructure Finance Commission met at 2pm in Room 511 at the State House.

Members present:  Martin Pillsbury (Chairman), Dave Riedell, Tom Tilas, Patty Daly (for Paul Niedzwiecki)

lso present:  Bob Ciolek from Cape Cod, David Cole, from Westport MA, John Clarkson, EOEEA,  Senator Michael Rodrigues,  Brendan Sullivan (Senator Rodrigues’ aide), Jack Yunitz, Yunitz Associations

Mr Pillsbury opened the meeting and welcomed Mr. David Cole and Mr. Robert Ciolek to the Working Group.  Mr. Cole has suggested a mechanism to fund water infrastructure, using the Community Preservation Act as a model.

Mr. Cole testified at the Barnstable hearing in November.  He is head of the town estuary committee for Westport, Ma.  He believes there is a political issue to address before we can make progress on nutrient reduction in the coastal estuaries, and on other water infrastructure issues across the state.  That issue is the money part.

He has been thinking that there are certain parallels with the CPA model, and is looking at ways to adapt the model.  The key issue is to have an equitable approach.  In the old, existing model, the burden of treatment falls on the bettered properties, rather than on the whole community.  The whole community shares the benefits, why not the costs?

This bill would be a local option bill (not mandatory) and would have incentives to move communities in the right direction.

As proposed by Dr. Cole, the basic elements would include a local option vote to levy a 1% to 4% surcharge on the local property tax to be deposited into a town- established Water Preservation Fund (WPF).  There would be specified hardship exemptions.  The State would match the fund for authorized purposes.  The match would be dollar for dollar, unless a regional approach is taken, wherein the state match would increase.  The money could be used for preparing comprehensive water and waste water management plans, now required by the state; plan, design, and construction of facilities, operating expenses, connection costs, and the costs of monitoring.

Mr. Ciolek commented that this approach is responsive to the issues raised when he visited Group Four at an earlier meeting, and the approach has promise.  It is increasingly difficult  for cities and towns to get prop 2/12 overrides or debt exclusions for these types of projects… perhaps this would smooth the way.  For example, a prop 2 ½ override in Barnstable to fund its water infrastructure project was recently defeated 3:1.  This fund would make the odds much imporoved.  The idea has merit, and needs to be fleshed out for the consideration of the legislature.

Phil Jasset wondered if the money would be a loan or a grant?  Mr. Cole responded that his vision was that the SRF would continue to operate as a loan program, and this funding would supplement it, and be a grant.   The funds would be parallel, with no decline in SRF.  Mr. Jassett remarked that we do not want to hurt the SRF.

Mr. Ciolek acknowledged that 2011 is not a great time for a new grant program.  The politics are difficult.   Others observed that the CPA took years to pass, and years to get towns to sign on.

But there are a number of benefits if something like this could be accomplished.  This program puts cash on the table to incentivize towns to do the right thing.  The burden is shared.  The decisions are local.

Mr. Jassett noted that the real estate on cape cod is valued at around 90 billion dollars assessed.  A one percent property tax levy would generate $900,000 per year on the Cape alone.  Where would the state get the dollars for a match?

A general conversation ensued about various aspects of the proposal.

  • It was pointed out that there are various sources of the LOCAL funding that could be considered, besides a property tax levy (rooms tax, meals tax, general fund, water/sewer rate).
  • It would be advantageous to suggest a specific designated source for the state match.  Some ideas:  aviation tax, gas tax, “mil” tax on water and sewer, taxes on chemical fertilizers, pharmaceuticals, emerging contaminants.
  • The  fund could be limited to planning and design, leaving the construction funding to be the more traditional SRF loan approach.
  • Should the state money be separate from SRF or work through SRF?

Senator Rodrigues spoke of the water infrastructure issues facing his district and the commonwealth, and expressed his interest in working with the commission as these ideas moved forward.

Mr. Yunitz reminded the group that these projects create jobs from the design phase all the way to construction and operation.

The potential for consent decrees on Cape Cod and other areas of the state may bring this issue to a head more quickly, and may put some political pressure behind these ideas.

It was agreed that Tom Tilas, Martin Pillsbury, and Sally Schnitzer would meet to flesh out this proposal for presentation to the group at a later date.

The meeting adjourned a little before four o’clock.

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