Proposal for LD 1001:
Wastewater Infrastructure Bond
Background
If Maine bonds for the SRF loans now, the state is almost guaranteed a lower interest rate than in the upcoming year, and the federal money cannot be rescinded. So, the state could lock in a 5 percent interest rate on the $1 million, and get $5.3 million interest-free. If the state waits until next year, the interest rates will likely be higher and the federal budget for SRF may shrink even more – the budget this year cut $199 million from the SRF. And in the meantime, towns and cities in Maine could secure loans for important infrastructure projects at 2 percent interest, saving money for local ratepayers and safeguarding the environment.
Grant projects have not been funded for 3 years, and the backlog of maintenance at smaller town treatment plants is growing. The DEP estimates the amount of repairs and upgrades to be over $350 million over the next ten years.
Loan projects
Many towns and cities statewide with enough system users to absorb any rate increase can apply to the get SRF loans. Many towns and cities are in desperate need for low-interest loans as it is difficult to beat the 2 percent interest on SRF loans, and the expansions and improvements of wastewater infrastructure have to be made.
Grant projects
Limestone/Loring Development Authority $2.5 million
-Eliminate two discharges into small streams by piping to new facility.
Machias $1.5 million
-Make major improvements to plant, reopen 700 acres of shellfish beds.
Passamaquody Indian Township $1 million
-Pump a failing septic system to functioning spray irrigation and lagoon on Pleasant Point.
Economic driver
UMO Associate Professor Jonathan Rubin’s analysis of the economic impact associated with bond funds showed that last year’s environmental bond was as nearly effective as the economic development bond in job creation. The economic development bond would spend $19,473 for every job it created, where the environment bond would spend just slightly more at $20,808 per job created. Similarly the environment bond creates as much income as the economic development bond, where each economic development bond dollar generates $1.55 in total income and the environment bond $1.51. . This analysis indicates investment in infrastructure is a valuable tool in job and income creation along with moderating cost of wastewater services. Plus, commercial and real estate development cannot take place in most towns and cities unless there is adequate wastewater infrastructure.
