The Boothbay Harbor Sewer District supports a “yes” vote for Question 3 on this year’s Nov. 4 ballot. Question 3 provides for state funding and captures matching federal funding on a 5:1 basis for clean water projects.
That means for every state dollar allocated, the federal government will match $5 in grant funds administered through the Clean Water State Revolving Loan Fund (SRF) via the Dept. of Environmental Protection and the Maine Municipal Bond Bank. Below are supporting facts from the Maine Wastewater Control Association:
The clean water (wastewater) SRF program was created in 1988 to ultimately become a self-sustaining wastewater infrastructure fund. Historically, the State match has been raised through bond financing rather than a general fund appropriation. The best way to maximize Maine’s benefit of the Clean Water SRF Program is to align the State funding on an annual basis to leverage the 5:1 federal dollar match.
The ultimate goal is to secure enough funding to stabilize and grow a self-sustaining revolving loan program that will survive the termination of annual federal capitalization grant funding.
Loans are issued for clean water; namely, wastewater projects. Projects from Madawaska to York can range anywhere from replacing wastewater pump stations to significant treatment plant expansions.
While perhaps one of the best matching fund programs in the federal government, Maine’s ongoing need for clean water project funding still outweighs available money, even with the 5:1 matching SRF federal program. In addition, federal funding is set to expire in 2011 for wastewater projects and the program is a moving political target in Washington D.C. As such, time is running out to maximize Maine’s benefit.
Some Quick Facts:
Maine’s Clean Water SRF has issued $452,000,000 in loans since 1988. Since 1988 Maine has invested $40.5 million to leverage $200.9 million in federal funds. Interest is at 2 percent below market rate. To date 99 communities have benefited, 92 percent of available funds are loaned out within one year
On average, SRF loans provide a 17-21 percent subsidy on total cost of project due to low-interest loan. The low rate of interest on SRF loans will save our communities close to $100 million over the life of the loans thus saving ratepayers across the state huge amounts of money.
In the next five years, 71 communities have projects totaling approximately $294,000,000. In the next 15 years, there is approximately $422,000,000 in need.
Time is running out – Federal SRF capitalization grants have declined by 50 percent since 2004. Wastewater funding to end in 2011.
Bonding Maine’s infrastructure needs was recommended by the Brookings Institute and GrowSmart Maine as critical to our economic future. Many Maine wastewater facilities were originally built with Clean Water Act funding (75 percent federal, 15 percent state and 10 percent local) but these funds no longer exist for ongoing maintenance, repair and expansion.
SRF funds also leverage other funding sources such as Community Development Block Grant (CDBG), Rural Development and State Tribal Assistance Grant (STAG).
Consequences of waiting and then ‘backfunding’ next year include the loss of $300,000 in interest, loss of construction season, 10-12 percent annual inflation costs, and the loss of the maximum potential size of fund.
The Clean Water SRF program is a critical funding mechanism for public health and environmental protection. Clean water resources are vital to the public health and safety and Maine’s economic future.
Legislation Action Requested: fund the state share of $1.7 million through an Environmental Bond Issuance to obtain the federal 5:1 match and avoid the consequences of financial loss by skipping a single year’s match.
The Boothbay Harbor Sewer District has taken advantage of the low cost funds available through the SRF. In 2002, the District refinanced its entire debt. The refinancing saved District ratepayers over $8 million in interest payments over the term of the bond. Additionally, the District reduced the term of the debt from 40 years to 20.
The District has some major future projects on the horizon that will require financing. The proposed centrifuge installation (if approved by ratepayers) will be financed through the SRF. Without SRF financing, the district will have to go to the open market and pay four to five percent more for money. Sewer line rehabilitation on the east side of town will be another major project facing ratepayers. Without SRF funds, District user fees will have to increase further in order to fund these necessary projects.
Please join with me and many other environmental professionals in supporting Question 3. Your “yes” vote is critical in sustaining the quality of life that we have grown to expect.
Chris Higgins, Supt., Boothbay Harbor Sewer District