My interest in Green Infrastructure (GI) sparked several years ago, when I worked as a college intern with the City of Greensboro, NC Stormwater Department. Back then, no one really talked about “green infrastructure”, but the city was invested in managing its stormwater.  As part of that experience, I was given my first look at stormwater management in practice as I tagged along with city staff to inspect Greensboro’s Stormwater Best Management Practices (BMPs) – features like constructed wetlands, forested stream buffers, and rain gardens, that are designed to remove pollutants from urban runoff.

This week I was reminded just how much things have changed since that first internship experience. For one, “green infrastructure” has emerged as the preferred term for these kinds of features, and has also grown as an accepted stormwater management practice among communities across the country. Even at the federal level, acceptance of GI is very clear. For example, the 2014 amendments to the Clean Water Act now include section 603(c)(5): “for measures to manage, reduce, treat, or recapture stormwater or subsurface drainage water;” language which the EPA interprets as including “green roofs, rain gardens, roadside plantings, porous pavement, and rainwater harvesting.” EPA’s recent Community Summit on Green Infrastructure in Cleveland, Ohio highlighted this shift and offered an unparalleled opportunity to capture conversations from those on the ground about lessons learned and emerging implementation issues.

Here at the Environmental Finance Center (EFC) at UNC Chapel Hill, one underlying research question permeates all of our work: how do you pay for it? Although the commitment to GI is there from both the perspective of the communities in attendance at the Summit and the EPA, paying for GI, as with many environmental programs, continues to be a challenge for many. As such, it is not surprising that the conversation at the Summit turned very quickly to finance. The variety of finance mechanisms discussed was just as diverse as the communities in attendance. Through stormwater fees, incentive programs, public-private partnerships, grants, and loans, cities and towns across the country are making green infrastructure happen.

Creative Financing in Action

There was no shortage of examples of creative financing from Summit participants. For example, the City of Santa Monica, CA raises revenue for its green infrastructure programs with a combination of fees and taxes, including a Stormwater Utility Parcel Fee and a Clean Beaches and Ocean Parcel Tax. The Town of Forest Heights, MD is a much smaller town with a smaller budget, but they have been able to build green roofs and develop a zero runoff system by thinking outside the box, developing strategic partnerships, and procuring grant funding from a variety of sources. The City of Buffalo, NY has no stormwater fee and instead mentioned substantial savings through energy cost reductions as a key component of their GI finance strategy. The City of Los Angeles, CA stressed leveraging resources, pooling of funding for multi-benefit projects, and creative partnerships with organizations like the LA Zoo and the airport.

There was a clear shift in focus away from quantifying the benefits of green infrastructure and an acceptance that even though how we run the numbers may not always come out in favor of green over gray infrastructure, the co-benefits in terms of the environmental, public health, economic, and social value, make GI worth the investment. But many communities are still struggling to determine what the right balance between grants, fees, incentives, and regulation is to both get green infrastructure projects off the ground and to ensure long-term operation and maintenance.

Strategies for Financing Green Infrastructure

As part of a cooperative agreement with EPA, the EFC has been working to promote innovative financing approaches for green infrastructure. While the perfect balance of finance strategies will certainly differ from community to community, our research has revealed a diverse menu of options for both capital and revenue sources for green infrastructure:

Sources of Capital:

  • Cash on hand
  • Local government revolving funds/loan programs
  • Clean Water State Revolving Fund (CWSRF) Loan
  • Stormwater Utility Grant
  • Foundation Grants
  • Stormwater fee backed revenue bonds
  • Bonds, including stormwater fee backed revenue bonds, water utility fee backed bonds, assessment backed bonds, social impact bonds, and general obligation bonds
  • Public partnerships

Sources of Revenue:

  • Stormwater fees
  • Existing property taxes
  • Sales taxes
  • Business Improvement District (BID) tax
  • Watershed Improvement District tax
  • Special Services District Tax
  • Watershed protection utility fee
  • Property assessments
  • Private property owner direct payments
  • Impact fees
  • Crowd source payments/donations

Our Innovative Strategies for Stormwater and Green Infrastructure Project offers more details on each of these options and a variety of additional resources on budgeting for green infrastructure, case studies, a catalog of publications describing the established benefits of GI, opportunities to use the CWSRF, and approaches for incentivizing public-private partnerships.

In the wake of this exciting work and the Green Infrastructure Summit in Cleveland, we’d love to hear from you! What innovative strategies is your community using to pay for green infrastructure?

 More on Financing Green Infrastructure:

Lexi Kay is the Outreach Coordinator at the Environmental Finance Center at UNC Chapel Hill.