A New Funding Strategy from the Clean Water Partnership P3

Source: Greg Cannito, Water Utility Infrastructure Management, April 20, 2016

Signed in March 2015, the Clean Water Partnership is a long-term public-private partnership between Prince George’s County, Maryland, and Corvias Solutions, to retrofit up to 4,000 acres of impervious surfaces using green infrastructure and low-impact development practices in the first three years and operate and maintain over the remaining life of the 30-year partnership. Corvias intends to deliver compliant, sustainable stormwater infrastructure with accelerated timelines and reduced costs, in accordance with Maryland Department of the Environment (MDE) and U.S. EPA standards. … MDE’s Water Quality Revolving Loan Fund (also known as the State Revolving Fund) provides below-market rate loans to encourage capital investments in water projects, in accordance with the Federal Clean Water Act and the Federal Safe Drinking Water Act. Up until now, State Revolving Funds have primarily been used to fund construction of wastewater treatment plants. However, exploratory conversations with MDE revealed the historical barriers to utilizing State Revolving Funds for stormwater management. State Revolving Funds offer a lower interest rates to regulated communities and even lower interest rates to Disadvantaged Communities equal to 25 percent of the market rate, for an all-in rate of 1.20 percent (compared to the standard rate of 50 percent of the Market Rate, 2.00 percent). This saves over $9 million compared to typical municipal debt financing. … While many types of P3 structures exist, the private partner in the relationship has traditionally not sought out state financing for the public partner. However, Prince George’s County and Corvias could not let this opportunity slip by. While MDE’s financing program had not been invested in a significant amount of stormwater work previously due to the piecemealed nature of stormwater project delivery, the aggregated nature of the Clean Water Partnerships delivery structure and their ability to execute larger scopes in a shorter period of time enabled the $48 million loan application—and the combination of cost of capital, flexible terms, and its unique characteristics made it the optimal source of financing available to fund the large volume of stormwater projects.

Related:

A New P3 Model for Building Green Infrastructure
Source: Daniel C. Vock, Governing, May 27, 2015

One Maryland county is testing a unique public-private partnership that would not only save money but also help the environment and local economy. Leaders in Maryland’s Prince George’s County face an enormous task in complying with a federal “pollution diet” to clean up the Chesapeake Bay. Over the next decade, the county must convert 15,000 acres of watertight surfaces — almost 5 percent of the county’s total area — into surfaces that will either soak up or treat rainwater. To meet that deadline, Prince George’s will have to add some 46,000 stormwater devices, said Adam Ortiz, the director of the county’s environment department. “This isn’t like building one high school or a bridge. We’re building tens of thousands of little ecosystems in some of our most disadvantaged areas. We need a new approach.” So Prince George’s, which borders Washington, D.C., is turning to a public-private partnership to help install the rain gardens, cisterns, permeable pavements, and other devices for filtering and absorbing stormwater. Slowing the rapid runoff from roads and rooftops could reduce pollution that flows into sewers and, eventually, into the Chesapeake Bay. Using a public-private partnership to build green infrastructure on such a large scale is novel in itself. But the county is especially excited about the potential economic boost and other societal benefits the deal could bring to the region. Its partnership with Corvias Solutions includes incentives for all of those goals. …. Prince George’s County, for its part, will test whether Corvias can deliver on its promises. Initially, the company will be charged with converting 2,000 acres by 2017. But if it performs well, that amount could double. Meanwhile, a team of county workers will be “racing” Corvias to build stormwater improvements. The county team will also have 2,000 acres to work on so that officials can compare the two approaches. That information will help the county decide whether to expand the public-private partnership. It will also help other jurisdictions decide whether they also want to try something similar. …..

Water Infrastructure and Resiliency Finance Center
Source: U.S. Environmental Protection Agency, 2015

…EPA’s Water Infrastructure and Resiliency Finance Center will serve as a resource for communities, municipal utilities, and private entities as they seek to address water infrastructure needs with limited budgets. The Center will support communities and explore creative and innovative financing practices, including public-private partnerships. It will build on the highly successful State Revolving Fund and other EPA programs and those of its federal partners and explore ways to leverage these programs to increase investment in the water sector. The Center will build partnerships and support work that brings together investors and interested communities. It will be an avenue to expand technical assistance, peer-to-peer learning opportunities, workshops, case studies and toolkits for financing alternatives.

The Water Infrastructure and Resiliency Finance Center will:
– Explore innovative financial tools, public-private partnership opportunities and non-traditional finance concepts to better leverage existing federal funding programs. An example of a recent public-private partnership in the water sector is the EPA, Maryland Department of Environment and Prince George’s County Public-Private Partnership Model to Accelerate Green Stormwater Controls and Support Local Job Creation.
– Explore ways to increase financing climate-resilient water infrastructure projects through integration of water efficiency, energy efficiency, water reuse and green infrastructure.
– Support communities to develop sustainable sources of funding for water infrastructure, particularly through stormwater utilities and green infrastructure projects.
– Collaborate with the U.S. Department of Agriculture’s Rural Utility Services and other federal agencies to maximize its support for small community drinking water and wastewater systems and increase small systems’ technical, managerial and financial capacities….

….For more information about water infrastructure needs for your state, see the table: Clean Water and Drinking Water Infrastructure Needs by State