Projects can receive reduced borrowing rates for participating in Housing Choice Initiative and principal forgiveness for financing renewable energy projects or by meeting affordability criteria
BOSTON – The Healey-Driscoll Administration today announced that 185 projects across the Commonwealth are eligible to receive approximately $1.3 billion in low-interest-rate loans and grants to fund construction, planning and asset management projects designed to improve water quality, upgrade or replace aging drinking water and wastewater infrastructure and cut treatment plant energy use and costs. These offerings include nearly $173 million in additional funding from the federal Bipartisan Infrastructure Law (BIL).
“Our residents deserve wastewater and drinking water infrastructure that fully meets their needs at an affordable cost,” said Governor Maura Healey. “This year’s unprecedented investments will go a long way toward improving the quality of life and implementing environmental safeguards that will last generations.”
“State Revolving Fund assistance is vital to helping communities construct and modernize critical water infrastructure and address the problems presented by emerging contaminants and lead,” said Lieutenant Governor Kim Driscoll. “Our administration is committed to protecting public health, and this funding is a difference-maker for local communities and the people they serve.”
“This is an important investment in water infrastructure for our cities and towns. These projects are critical to the health and well-being of everyone here in Massachusetts,” said State Treasurer Deborah B. Goldberg, Chair of the Clean Water Trust. “This increase in grant funding plus low-interest rate loans through the Trust allows communities to finance cost-effective projects.”
The State Revolving Fund (SRF) financing is administered by the Massachusetts Clean Water Trust and finances projects implemented by cities and towns, regional water supply and wastewater treatment districts, and the Massachusetts Water Resources Authority (MWRA). The projects include 61 clean water construction projects (see Table 1) totaling approximately $880 million and 50 drinking water construction projects (see Table 1) totaling approximately $381 million. An additional $4 million will be offered by the Trust as grants for 39 Asset Management Planning projects. Communities offered SRF financing in this round must decide to move forward with the project by June 30, 2023, and secure local funding authority.
“The State Revolving Fund loan program helps water utilities to not only update their infrastructure but also invest in innovative technologies that result in reduced energy consumption, resource conservation, production of renewable energy and climate resiliency,” said Energy and Environmental Affairs Secretary Rebecca Tepper. “As the climate crisis puts a strain on our water supply, it’s critical that we replace old, inefficient treatment works with green, energy-efficient infrastructure.”
In accordance with the Clean Energy Results Program under the direction of the Massachusetts Department of Environmental Protection (MassDEP), 35 of the water infrastructure projects receiving financing are for renewable energy, energy efficiency or green infrastructure initiatives. Energy use at wastewater and drinking water treatment facilities is a major contributor to overall energy consumption for many cities and towns, with communities statewide spending approximately $150 million per year on electricity to treat 662 billion gallons of wastewater and drinking water. About 30 percent of municipal energy use derives from water treatment.
“Clean water remains a core priority of MassDEP’s mission. There is so much work to be done to maintain and upgrade critical water infrastructure around the Commonwealth,” said MassDEP Commissioner Bonnie Heiple. “We are putting these federal dollars to work to advance our priorities of PFAS mitigation and support to Environmental Justice communities on an expedited timeline.”
Sixty-four of the new projects are eligible to receive principal forgiveness. Principal forgiveness is awarded to renewable energy projects and for projects in communities that meet the affordability criteria established by the Massachusetts Clean Water Trust. The affordability criteria factors in per capita income, unemployment rate and population trends.
The Commonwealth has also offered to reduce the SRF borrowing rate from 2 percent to 1.5 percent for communities that support the Housing Choice Initiative. Twenty applicants have the Housing Choice designation: Acton, Andover, Barnstable, Billerica, Brockton, Everett, Franklin, Lawrence, Littleton, Lowell, Melrose, Nantucket, Plymouth, Quincy, Somerville, Stoughton, Sudbury, Taunton, Tyngsborough, and Worcester,
The SRF is composed of two programs that have provided more than $8 billion to Massachusetts projects: the Clean Water Fund, first capitalized in 1989; and the Drinking Water Fund, which began operation in 1999. More information on the two SRF programs can be found here.
This year, the Clean Water SRF provides $903 million in financing for clean water projects across the Commonwealth. Approximately $878 million will finance 59 new construction projects, $2 million will be allocated towards financing two previously approved multi-year projects, $3 million has been allocated to the emergency set-aside account, $5 million will be directed to the Community Septic Management Program to remediate failed septic systems in participating communities, and $15 million has been set aside to finance planning and PFAS design projects.
The Drinking Water SRF provides $431 million in financing for drinking water projects across the Commonwealth. Approximately $311 million will finance 39 new construction projects, approximately $69 million will be allocated towards financing 11 previously approved multi-year projects, $5 million will fund an emergency set-aside account, $10 million has been set aside to finance planning and PFAS design projects, and $35 million has been set aside to finance lead service line replacement projects.
An additional $4 million will be offered by the Trust as grants for 39 Asset Management Planning projects, with 27 communities qualifying with Clean Water projects and 12 communities qualifying with Drinking Water projects.
Massachusetts awards subsidized infrastructure financing under the SRF, which is administered by the Trust – a joint effort of MassDEP, the Executive Office of Administration and Finance, and the State Treasurer’s Office.
To be eligible for Clean Water or Drinking Water SRF loans, municipalities, wastewater districts, and water suppliers filed applications with MassDEP last year demonstrating that proposed projects offer significant public health or water quality benefits, have local funding authorization, and demonstrate that there is a commitment on the borrower’s part to file a timely loan application. The projects on the 2023 SRF list must now file loan applications and receive MassDEP approval to obtain funding.
The next SRF project solicitation for proposals to be considered for the 2023 intended use plan will open by MassDEP no later than June 5, 2023.
Statements of Support
“Providing local governments with the tools to manage their natural resources is of paramount importance,” said Senate President Karen Spilka (D-Ashland). “Towns like Medway, faced with droughts and other growing impacts of climate change, need the support of our Commonwealth to be able to deliver clean water to residents. I am proud of the Legislature's work to address this issue and thankful to the administration and Massachusetts Department of Environmental Protection for their partnership in bringing critical support to cities and towns.”
“Ensuring that municipalities across the Commonwealth, including Quincy and Holbrook, can continue to advance their water quality improvement projects through the State Revolving Fund is absolutely critical,” said Speaker of the House Ronald J. Mariano (D-Quincy). “Each of the projects receiving financing due to this program will help to protect our water resources while providing a healthy environment and a better quality of life for our residents.”
“Building and maintaining the infrastructure to provide drinking water and collect, manage, and treat wastewater in environmentally sound ways are essential and costly tasks for cities and towns, the costs of which can be difficult to afford without destabilizing municipal budgets,” said Senate Minority Leader Bruce Tarr (R-Gloucester). “That is why the partnership of the State Revolving Fund is critical to supporting the infrastructure that our municipalities need to deliver for residents. Two examples of this are the grant for Newburyport to assess stormwater management, and the financing North Reading needs to undertake a major wastewater project that will not only protect the environment, and also has the potential to catalyze economic development and job growth in a planned manner.”
“The funding announced today represents a significant financial investment by the Commonwealth to help municipalities address critical needs related to water quality, drinking water safety, PFAS remediation, and other local environmental priorities,” said House Minority Leader Bradley H. Jones, Jr. (R-North Reading). “I am grateful to the Healey-Driscoll Administration for recognizing the work that is being done in communities across the state to improve their water infrastructure and protect our precious natural resources for current and future generations.”