MMA urges Municipalities and Regional Government Committee to support water banking bill

The Honorable John Cronin, Senate Chair
The Honorable Paul Tucker, House Vice Chair
Joint Committee on Municipalities and Regional Government
State House, Boston

(Delivered electronically)

Dear Chair Cronin, Vice Chair Tucker, and Members of the Committee,

The Massachusetts Municipal Association is pleased to offer testimony in support of S. 2869, An Act Providing for the Establishment of Sustainable Water Resource Funds, on behalf of the cities and towns of the Commonwealth.

This local-option legislation would allow cities, towns, water districts, stormwater utilities, and authorities to collect fees for the exclusive purpose of remedying and offsetting the financial impacts of water systems investments. This is a measure the MMA has supported for several years, and we thank the Legislature for its continued research and advocacy on this issue. S. 2869 has garnered broad support across the state, and we welcome the opportunity to discuss the value of water banking for Massachusetts municipalities.

Permitting water banking would allow cities and towns to establish fees distinctly for the purpose of protecting water and wastewater infrastructure. For most municipalities across the Commonwealth and across the nation, key components of municipal water infrastructure are long past their expected lifespans. Urgent repairs, replacements and upgrades are needed, and for many municipalities and regions the costs far exceed available resources, due to the complexity of the projects, compounded by construction inflation. Cities and towns need supplemental funding options in order to protect municipal water supplies, meet federal requirements, and address environmental concerns. Due to the lack of express authority in state statute, this enabling legislation is needed to avoid the expensive and burdensome litigation that delays communities from utilizing this important tool.

The gap in water infrastructure financing needs is ever-present, and S. 2869, would address those concerns by allowing local authorities the option to establish a fee to finance a Sustainable Water Resource Fund.

Communities deeply appreciate the current revenue support from various state and federal sources to assist in water management, infrastructure updates and repairs. Recent funding through the American Rescue Plan Act (ARPA) and the Bipartisan Infrastructure Law (BIL) is significant indeed, yet in spite of this ongoing and one-time support, there is still a huge funding gap, given the magnitude of need. All of the ARPA funds (and much of BIL funding) is temporary and will not match the long-term need across the state. Other competitive programs such as the State Revolving Loan Fund require projects to meet a high threshold to obtain funding, leaving many lower-scoring projects without a path forward.

This legislation would establish an equitable option to make sure that communities facing water infrastructure funding gaps are not forced to rely on regressive property tax increases or cuts in other vital municipal services to move forward.

Water banking is an innovative financing tool that will enable cities and towns to raise funds for sustainable long-term water infrastructure needs, while continuing to accommodate short-term initiatives with municipal, state, and federal funding. High-quality water, wastewater and stormwater infrastructure is essential to the environment, local economies and our day-to-day lives.

We thank you for your consideration and attention to this timely issue for the Commonwealth. If you have any questions or require additional information, please do not hesitate to have your office contact me or MMA Legislative Analyst Josie Ahlberg at 617-426-7272, ext. 161, or jahlberg@mma.org.

We greatly appreciate your continued work to protect and update the infrastructure that keeps our Commonwealth clean, healthy and safe.

Sincerely,

Geoffrey C. Beckwith
MMA Executive Director & CEO