A water bank is a system of accounting and paying for measures that offset or mitigate water losses due to water withdrawals, sewering, and/or increased impervious areas that prevent aquifer recharge.  The purpose of a water bank is to provide a water supplier with the resources necessary to mitigate the demands of new development through conservation, leak detection, education, or infrastructure improvements.  For example, a water banking program might require that new connections or increased demands be mitigated through payment into a fund, proportional to the amount of water requested (commonly in a 2:1 ratio for drinking water, or up to a 6:1 ratio for wastewater).  The cost is based on a capital plan with an average cost per gallon of improvement.

Water banks can be highly effective in accommodating new development while simultaneously driving down aggregate water use. Weymouth’s water banking program, whereby developers pay for conservation measures elsewhere in town, reduced the town’s water use from about 4.8 MGD down to about 4.2 MGD, a highly significant reduction in view of the 4.5 MGD sustainable yield of their reservoir. Unfortunately, water banking is illegal in Massachusetts without a DEP Administrative Consent Order.

Key organizing principles for water banks include: a dedicated banking mechanism (such as an enterprise fund); a rational relationship between the assessed fee and the cost of cost of implementing the offset and the program’s administrative costs; a ratio for the offset versus new demand (at least a 2:1 ratio in medium and high stressed basins); and a mechanism for verification of improvements provided by the proponent.  

Local water bank programs are already in place in Metro Boston municipalities.  This model might also be scaled up to the watershed level, with water suppliers seeking to increase their supply required to mitigate increased withdrawals elsewhere in the watershed.

31.a    The state should pass legislation specifically legalizing water banking

31.b    MAPC, state agencies, and watershed organizations should develop a technical assistance program for municipalities interested in local water banking

31.c    DEP should commission a task force to evaluate the potential application of watershed-level water banks.

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