In the Main - A technical assistance newsletter for Public Water Suppliers
August 2009

By Jennifer Wood

The Central Regional Office (CERO) of MassDEP recognizes that there are significant financial burdens for very small public water systems (PWS) associated with complying with the Massachusetts Drinking Water regulations, whether meeting a water quality standard, correcting system deficiencies, or newly registering an existing noncompliant public water system.  In an attempt to assist some of these systems, CERO has encouraged system owners to apply for low interest loans through MassDEP's State Revolving Fund (SRF) loan program. Several very small public water system owners have submitted SRF applications over the past few years and received funding to either hook up to a nearby compliant public water system or extend compliant public water to a community comprised of several individual private wells and non-compliant PWS.

Case Studies

Woodvale Condominium Trust in Acton was a PWS that serviced a population of approximately 170 residents residing in six buildings.  The system's water source had levels of naturally occurring uranium that exceeded the state standards. Additionally, Woodvale did not meet the regulatory requirements for source redundancy or two days of water storage, and the protective zone around the water supply well did not meet the land use activity requirements to assure safety of the water supply source. Woodvale entered into an Administrative Consent Order (ACO) with MassDEP in 2006 and agreed to connect to the Acton Water District to resolve the regulatory violations. 

The Woodvale Condominium Trust applied for and was awarded a 2% SRF loan for $215,000 through the MassDEP SRF Program in 2007. The project included the construction of a water line to connect the 71-unit condominium complex to the Acton Water District's public water system, adding fire protection with a hydrant to the complex, and decommissioning the water system's existing well. The project received financing in June of 2007 and was completed within the following few months.

Assabet Water Company in Stow services approximately 200 homes from two groundwater wells. Well # 1 was taken offline in 2001 due to a determination that it was under the direct influence of surface water and therefore subject to the Surface Water Treatment Rule.  Additional deficiencies were also noted in a previous sanitary survey of the facility.   In 2006, Assabet Water and MassDEP entered into an ACO in which Assabet agreed to construct a water filtration plant to treat the sources, construct a new storage tank, and take additional corrective actions to rectify the deficiencies identified in the sanitary survey.

Assabet Water Company applied for and was awarded a 2% SRF loan for $1.7 million in 2007. The funding was used for the construction of the water filtration plant that meets the Surface Water Treatment Rule, a new water storage tank, and meter replacements.  The water quality and quantity of this PWS significantly improved with this project. The project assured an adequate potable water supply for the customers of the company and eliminated identified public health threats. Construction of the treatment plant using the Pall treatment system (See photo on page 1) and storage tank was completed and the PWS was issued a return to compliance notice in 2008.

Through a separate SRF anticipated project, the Assabet Water Company is proposing to expand its service area to the Lower Village of Stow.  This project would correct several drinking water regulation violations where noncompliant PWSs are located.  In addition to addressing a public health issue, it would also allow several businesses to remain and potentially expand in their current locations.  At press time, the required engineering study is being completed.

CERO has worked with very small water system owners to finance improvements with SRF financing dating back to the beginning of the SRF program. Cool Sandy Beach Community Water System in Rutland, a small community system, replaced the distribution system, added a tank, and installed arsenic treatment in 2000 with an SRF 0% interest rate loan in the amount of $165,000. Windbrook Acres Coop Corporation, a mobile home park in Auburn, installed a new distribution system and connected to the Auburn Water District in 2000 with an SRF 0% interest rate loan in the amount of $475,000.

Lessons Learned

SRF financing is not applicable for all situations. A project proposed by Somerset Hills L.P. in Acton (a small apartment complex being converted to condominium units) was placed on the Intended Use Plan List for SRF financing in 2008.  As required by a Notice of Noncompliance (NON) dated November 22, 2006, this project plan would have connected the condominium to the Acton Water District municipal water supply. However, the applicant already had financing in place for the entire project and felt that the SRF loan subsidy of 2% wasn't justified given the relatively minor cost of the project process.  Somerset Hills L.P. withdrew their application.

The SRF program is a good financing option for condominium trusts due to the difficulty for these trusts to borrow in the private capital market and being required to secure the loans with the property.  The problem arises as the condominium property is in each owner's name. 

Very small water purveyors generally do not have knowledge of the SRF program as a financing option.  It is important for regulatory folks to identify this financing option when it is appropriate.

It is important to note that privately owned PWSs are eligible recipients of the drinking water SRF program; however, privately owned wastewater utilities are not eligible for loans from the clean water SRF program. 

The SRF program is a viable financing program for very small water systems and in many instances may be the only available financing source.

If you are interested in making use of the SRF loan program, contact one of the appropriate MassDEP contacts for your region:

Western Region (Springfield): Deirdre Cabral, 413-755-2148
Central Region (Worcester): Stella Tamul, 508-767-2763
Northeast Region (Wilmington): Kevin Brander, 978-694-3236
Southeast Region (Lakeville): Pamela Truesdale, 508-946-2881
Boston: Jennifer Wood, 617-654-6536

or see the following website for more information: http://www.mass.gov/dep/water/wastewater/wastewat.htm#loans. 

In The Main index

Maintaining Consistency & Credibility

Is SRF Financing for You?

In Brief: Drinking Water Operator Licenses Expire; Preparation Materials for Exams; Massachusetts Receives State Fluoridation Quality Award; Staff Spotlight: Melissa Privetera

Self Assess Your Emergency Response

Ground Water Rule Questions & Answers

Financial Assistance for Local Water Conservation

MWWA Meeting & Education Seminars

Consultant's Chemical Checklist

Patrick Administration Honors 25 Public Water Systems

Changes to the Total Coliform Rule