Three smiling women in colored tops standing before UC Davis program backdrop, photograph

Bridging the Gap within Stormwater Infrastructure Funding

  • by Stephanie Nava Angeles, Eloise Dresser, Lexi Yokomizo, Eric Kregel

When it Rains, it Pours, and Stormwater Infrastructure Breaks

Most of us don’t think about stormwater infrastructure - infrastructure that diverts, stores, and/or filters water, until it breaks. During an intense storm, pipes can break, and storm drains can clog. Poorly maintained stormwater infrastructure leads to chronic flooding and pollution, posing direct threats to human and environmental health.

Flooded parking lot with reflections of trees and a partially submerged silver car
 Street in Davis, CA, after a storm, demonstrating the failure of stormwater infrastructure Photo credit: Paul Ronevich 

Funding - the Problem

Despite the vital role stormwater infrastructure plays in our cities' day-to-day, stormwater infrastructure across the United States is literally crumbling. The American Society of Civil Engineers rated the current state of stormwater infrastructure as a D (a failing grade). Cities that do not have adequate stormwater infrastructure are increasingly experiencing these water crises due to more frequent and severe precipitation events. Funding for improvement projects is often difficult to obtain via traditional pathways, such as government loans and grants, as they are often highly competitive and oversubscribed. 

Funding - the Solution

American Rivers’ Associate Director of Policy and Government Relations, Jaime Sigaran, proposed an interesting research question: how can we utilize innovative approaches to combat the stormwater infrastructure funding gap? Through our research we identified four innovative financing mechanisms that can be used to bridge the current funding gap: stormwater credit trading, tax credits, environmental bonds, and trust funds. 

  • Mechanism 1: Stormwater Credit Trading

    • Stormwater credit trading: A market-based solution that allows alternatives for property owners to meet stormwater management regulations. Credits can be generated by off-site compliance to encourage and incentivize the installation and maintenance of green stormwater infrastructure across public and private sectors.

  • Mechanism 2: Tax Credits

    • Tax Credits (or fee reductions) incentivize property owners to install green stormwater infrastructure on their property. Property owners are responsive to financial incentives, and when combined with technical assistance, can expand participation. 

  • Mechanism 3: Environmental Bonds

    • Environmental impact bonds: Within this bond type, investor returns are proportional to project outcomes. This structure can lead to more innovative and “riskier” projects, as there is less liability on the bond issuer if a project were to underperform
    • Green bonds: Green bonds follow a traditional bond structure, but have positive environmental goals (such as improved stormwater infrastructure).

  • Mechanism 4: Trust Funds

    • Water infrastructure trust funds organized by state governments can distribute grants and/or loans to water infrastructure projects in their respective state. These offerings can include financial relief measures that can ease the financial burdens of the organizations receiving these funds. Funding for water infrastructure trust funds comes from either pre-existing or newly-created revenue streams.

Advocacy in Washington D.C.

As part of the efforts to share our findings, we traveled to Washington, D.C., for “Water Week” - a week dedicated to water policy advocacy on Capitol Hill. The trip included meetings with congressional staffers, where we presented an overview of our research and tied it back to legislative asks - primarily to reauthorize and increase the federal-state revolving fund program for stormwater infrastructure projects. 

Five people in business attire standing on U.S. Capitol steps under blue sky
Students stand in front of the US Capitol building, left to right: Eloise Dresser, Alexandra (Lexi) Yokomizo, Stephanie Nava-Angeles, Eric Kregel

Sharing our research with policy makers in Washington, D.C. was just the start! The white paper’s findings were presented during the Environmental and Energy Study Institute (EESI), as well as a briefing hosted by American Rivers about America’s most pressing water infrastructure challenges and solutions. Gary Belan, the Senior Director of the Clean Water Supply Program at American Rivers, presented the research, and the briefing was shown on C-SPAN. Click here to view. 

Additionally, we hosted a brown bag webinar with American Rivers, where we presented an overview of our research and our trip to Washington, D.C., internally to interested members of American Rivers’ staff.

Rocky stream photograph with webinar title and participant video thumbnails
Stephanie Nava-Angeles, Alexandra Yokomizo, Eloise Dresser, and Eric Kregel, alongside American Rivers staff, present their white paper findings during a briefing for interested staff. 

Next Steps

The next step for our group is to wrap up our deliverables so that they can be utilized as a resource for stormwater management professionals and decision makers. Our white paper, Financing our Waterways: Innovative Financing Mechanisms for Stormwater Infrastructure, will soon be accessible through the American Rivers website: https://www.americanrivers.org/. Stay tuned for our white paper and an interactive ArcGIS Storymap showcasing our case studies!

 

Primary Category

Policy Clinic