Advancing Ordinances and the Public Water Utility

Recently, there has been an exciting expansion in the definition of “assets” for the public water utility that could encourage more ‘green’ infrastructure to be funded. This is being encouraged by the GASB 62 rule. This rule has been on the books for years, but clarifying the rule is giving it new life to the public water utility. This update was carried out by the Government Accounting Standards Board (GASB), which is a private-sector organization that establishes accounting and financial reporting standards within the United States. The clarified rule is relevant to public water utilities because assets must be utility-owned infrastructure to be supported by bonds. These assets previously had a narrow definition that usually just covered pipes, pumps, and other “hard” infrastructure. The definition of assets has been expanded to accommodate new types of infrastructure and, thus, be funded by utility bonds. Examples of new items important to public water utilities previously not considered important to water utilities include distribution leak detection and gray water re-use. The GASB has named these items ‘business type activities’ for public bodies [1].

Examples of Public Water Utility Green Activities
Leak Detection
Rainwater Capture
Gray water Re-use
Green Roofs
Constructed Wetlands
Permeated Pavement
Smart Irrigation
High Efficiency Toilets

By allowing bonds to fund these ‘business type activities’, it provides utilities the opportunity to participate in sustainability projects and to strategically plan and raise money for more “green” projects in their service areaThese ‘green activities’, when conducted by the utility, capitalize on existing outreach and experience with customer-targeted programs and campaigns. Additionally, the citizens that would participate or qualify for these additional programs are also utility customers, and involving customers in improved conservation methods would help in conserving water by better utilizing water resources. The Pacific Institute, a global water think tank, notes that the California urban sector alone could save 3.1-6.4 billion cubic meters (~819 billion-1.7 trillion gallons) of water with green infrastructure, which could provide water for 5.8-10.4 million families over a year’s time [1]. More than saving water, ‘green’ improvements also have the added benefits related to community health and increase property value that centralized infrastructure would not be able to provide.

The EPA recognizes the positive impact green infrastructure has on in community health in three key areas – economy, environment, and equity. For the economy, green infrastructure is an investment in communities that creates job opportunity, encourages physical activity, and lowers healthcare cost. Environmentally, green infrastructure helps to clean the air and lowers the effects of urban heat islands. Additionally, by incorporating green infrastructure across the service area of the utility, these structures also help to enfranchise traditionally marginalized communities with improved conditions [4]. All these benefits of green infrastructure also lead to increased property values due to the increased overall community health.

Additionally, by including ‘green’ infrastructure in the assets of the utility through GASB 62, it allows utilities to get more creative and gives another tool in the toolkit for operations and management due to their ability to be considered utility assets. For instance, if an area is having issues with flooding, consideration could be given to increasing permeable surface areas and installing natural storm-water reduction through rain gardens and swales. For this to apply to the water utility, there are two conditions that need to be met. The public utility must have a governing body that can approve rate changes and the new rate must be able to recover the cost of service with no changes to demand or competition [2].

Locally, the City of Raleigh, NC has recently implemented a new initiative to encourage new infrastructure with “green” considerations through Ordinance No. 2017 – 740 TC 398 [3]. This ordinance is focused on easing the permitting process for infrastructures with ‘green’ accommodations, particularly related to storm water. Within the Unified Development Ordinance, beyond storm water, there is advocacy for more green spaces and low impact development that also limits the effects of urban heat islands. Actions like this have been occurring in the area due to a 2030 comprehensive plan for City improvements.

Increasingly, municipalities are finding creative applications and ways to support green infrastructure development. Now that public water utilities can invest in these initiatives in conjunction with Advanced Metering Infrastructure (AMI), such as leak detection and smart irrigation system parameters, be on the look-out for more ‘green’ infrastructure throughout your communities.