Massachusetts Bill Advances to Allow Local Fees on New Developments for Water Infrastructure Funding

BY ALISON KUZNITZ

Cities and towns could gain a new funding stream to cover water infrastructure costs under legislation that’s quietly gaining traction in the Legislature.

The House on Monday gave initial approval to a bill sponsored by Rep. Ted Philips (H 2324) that would allow municipalities, water or wastewater districts, and stormwater utilities to collect a “reasonable fee” to offset costs from increased water withdrawals and other environmental impacts caused by new developments.

A companion bill from Sen. Jamie Eldridge (S 1443) is before the Senate Ways and Means Committee, after getting a favorable report July 31 from the Municipalities and Regional Government Committee.

If adopted by local governing bodies, the fees would flow into “Sustainable Water Resource Funds” that could be used to resolve environmental issues stemming from wastewater or stormwater discharges, and “to sustain the quantity, quality and ecological health, of waters of the commonwealth,” according to the legislation.

Eldridge told the News Service he’s filed the bill for at least 10 years. The measure could help communities grapple with the environmental impacts of new housing or commercial developments, in which property taxes may not capture the costs of contaminated water seeping into rivers or streams, the Acton Democrat said, noting the impacts of runoff from impervious surfaces that accompany new development.

“Your typical DPW, conservation commission, planning board often don’t have the sufficient revenue to address these additional impacts from development,” Eldridge said. “It’s up to the town or city to do this, and of course any proposal at all like this would go through a whole public hearing process, whether by a select board, or city council, or town meeting or other governing body.”

Philips said the bill faces no “formalized opposition” and suggested that it has previously encountered “bandwidth” and timing issues on Beacon Hill, where thousands of bills are vying for attention. 

“For me, water infrastructure is something that we really need to start thinking about like we do other forms of infrastructure, like our roads and bridges,” Philips said. “We know that we have aging pipes and aging systems that are going to need to be repaired, and the sort of the longer we put it off, we know the more expensive these repairs are going to be.”

He added, “I don’t expect every city and town to immediately choose this option, but we just wanted to make sure that the option was provided to them.”

The legislation embraces a water banking approach, which the state Water Resources Commission defines as communities collecting “a fee from new developments for each unit of new water demand.” A bill summary from Eldridge’s office says water banking “at the local level has proven to be an effective tool for mitigating the impacts of water withdrawals on both the natural environment and local and regional water infrastructure systems.”

The legislation is backed by the Massachusetts Municipal Association and the Massachusetts Rivers Alliance. It stalled last session after securing initial House approval. Philips said he also worked on the bill with the Massachusetts Water Works Association, which represents drinking water professionals. 

In written testimony to the chairs of the Joint Committee on Municipalities and Regional Government, which had a hearing on the bills in June, MMA Executive Director Adam Chapdelaine said the proposals offer greater funding flexibility to cities and towns.

“Municipalities across Massachusetts have faced increased costs to provide drinking water and manage stormwater and wastewater over the past several years,” Chapdelaine wrote. “As one example, efforts to address per- and polyfluoroalkyl substances, or PFAS, can cost any city or town millions of dollars in upfront, capital costs and hundreds of thousands of dollars in ongoing, operational costs. It is essential work, and represents just one reason why municipalities and water districts should be enabled to use all the tools in the toolbox to save up for these expenditures.”

Chapdelaine said the water banking outlined in the proposed bills “would enable those funds to be used for a wider range of eligible projects than cities and towns are able to currently, particularly toward new development and new capital projects.”

In his written testimony to the committee, Eldridge said municipalities are facing a roughly $13 billion funding gap to tackle clean water and drinking water.

“Stormwater infrastructure is also in dire need, with municipalities requiring $18 billion for maintenance and updates. This stress is compounded by the need for stormwater systems to make expensive repairs in order to comply with National Pollutant Discharge Elimination System permits under the federal Clean Water Act and Combined Sewer overflows,” Eldridge wrote. “Further, water usage, drainage, and treatment are all complicated by the increased rain, rising sea levels, and extreme weather events caused by climate change, as well as contaminants such as PFAS.”

Eldridge said he is “optimistic” the legislation could pass as a standalone policy this session, or become embedded in Gov. Maura Healey’s environmental bond bill (S 2542). The governor’s proposal allocates $385 million for drinking and wastewater system upgrades, and $120 million for PFAS remediation.