To: Rimer.Lindab@EPAMAIL.EPA.GOV @ EPA,
Washburn.Peter@EPAMAIL.EPA.GOV @ EPA, Douglas Tsao/DC/USEPA/US@EPA, David
Gardiner/DC/USEPA/US@EPA, Maryann Froehlich/DC/USEPA/US@EPA, Glenn Eugster/DC/USEPA/US@EPA, Harriett Tregoning/DC/USEPA/US@EPA, Mark
Badalamente/DC/USEPA/US@EPA
cc:
Subject: Green Infrastructure Bonds
Here is a (hopefully final) draft on the green bonds idea. Thanks to everyone who submitted comments and additions. They helped make it a stronger product. I have attached a word and word perfect versions of the text for those who want it in that form. If anyone has additional comments, please let me know.
Environmental Improvement/Green Infrastructure Bonds
Background:
The use of bonds to fund environmental policy objectives is not new. States and municipalities frequently use bonds to fund large scale capital projects, including drinking water treatment facilities, sewage treatment plants, and parks - all of which relate to protecting and restoring environmental health.
In recent years, some states have become more creative in deriving environmental benefits for the revenues raised by selling bonds. New York state voters passed a referendum in 1996, approving sale of $1.5 billion in new bonds to be used for a wide variety of environmental concerns,including clean water, air quality, safe drinking water, solid waste, and
brownfields redevelopment. The wide range of activities sponsored by the new bonds helped win the initiative broad support, including business groups and municipalities who saw the financial benefits to communities that could come from such things as state support of brownfield cleanup
projects. A federal program, aimed at reducing the costs of environmental improvement bonds to support projects
that are necessary to help cities create liveable communities, should similarly include a diversity of
potential uses and derive a wide range of environmental, economic and quality of life benefits to local communities.
Proposal:
Municipalities typically fund new environmental infrastructure through tax-exempt bonds that currently carry interest rates of about six percent. The new initiative would provide an interest subsidy of as much as 50 percent. That would mean, for example, instead of paying an interest rate of six percent, an interest rate would be effectively reduced to three percent over the life of the project. And if a sliding scale could be applied so that communities most in need would be eligible for the full 50 percent interest rate subsidy, while communities with a
smaller need or less needy would get somewhat smaller subsidies.
Municipalities and other local governments would continue to take responsibility for developing the projects and for providing most of the financing for the projects. To be eligible for this support, in other words, the local community would have to raise the bulk of the financing. Federal support should make it easier for state and local governments to
do the right thing because we would be helping to cut the cost of the financing of the project. This partnership typifies the shared responsibility among the state, federal and local governments.
A portion of the credit subsidies would be allocated and administered by the states among their local communities. The states would have to have plans to ensure that funding is allocated by the relevant state authorities according to need and also according to evidence that the interest rate subsidy is being used to support environmental improvement
projects including those aimed at creating jobs, restoring environmental quality and providing an attractive and functionally useful setting for urban revitalization. This support for incremental “green infrastructure” investment should also result in communities taking actions that otherwise
would not have occurred.
The 100 largest cities, in partnership with appropriate stakeholder interests, governments and organizations, would apply directly to the Environmental Protection Agency for their credit subsidy. We believe that this approach will ensure that these large cities, particularly with many
environmentally impaired neighborhoods, will receive adequate attention and appropriate treatment in the process of allocating the funds. The funds will be distributed among participating states and municipalities on a population-based formula.
Green infrastructure projects will require a certain amount of time to design, coordinate with other local and federal and state assistance efforts, and carry-out. It is important for this program run for a minimum of ten years so projects can be properly planned and developed before bonds are issued. Ten years of funding leveraged with other environmental resources should significantly improve currently deteriorated green infrastructure.
These bonds would encourage actions which recognize the relationship between land conservation and development. Anticipated green infrastructure projects in urban neighborhoods is a way for creating environmental amenities which encourage long-term economic investment.
This assistance could be used for a wide range of projects including --conservation and restoration of large contiguous parcels of open space and corridors (for storm water drainage, storage and treatment; air quality improvement; wildlife habitat); creation of bicycle and pedestrian pathways; energy efficiency retrofits; brownfields cleanup and redevelopment; landscaping (of open spaces within development parcels and
public areas); cleanup and revitalization of, and access to, land at our waters edge; preventing pollution and reducing environmental risk (in homes, communities, and work places); green and transit-oriented development, and the purchase of a fleet of clean-air vehicles.
The Green Infrastructure Bond Program will be coordinated with existing environmental programs such as: Clean Water Action Plan, Sustainable Development Challenge Grants, American Heritage Rivers Program, Project XL Communities, Small Watershed Grants, Brownfields Initiative, TEA-2,
Community Empowerment as well as others. The goal is use the bond to leverage these and other federal and non-federal programs and provide funding resources for ideas and programs that cannot be funded through existing mechanisms. The goal is to provide flexible support for local initiative.
The benefits of these investments include the creation of new jobs, an increase in local tax revenues, and a generally more vibrant local economy. In a report on the potential economic benefits of redeveloping brownfields, the United States Conference of Mayors reports that cities have estimated that $200 - $500 million in new tax revenues and 236,000
new jobs could result if they could return their brownfields to productive use. Brownfields redevelopment: funds could be made available to local jurisdictions to allow faster cleanup of contaminated sites earmarked for redevelopment. A brownfields promotion fund could generally be made available for a variety of activities that local authorities would take in
seeking to redirect growth to these valuable sites.
There are numerous programs which could benefit local communities that could be financed through this proposal. All of them would have a positive impact on the issues of livability that the Vice President has emphasized
recently. For example, in Florida lawmakers have used this approach and funded the acquisition of close to 1 million acres of land through sale of bonds under the State Preservation 2000 Program. Other green infrastructure projects would support local initiatives aimed at smart growth, such as projects to clean up brownfields, encourage in-fill development, restore pedestrian pathways, or to increase development
around transit.
Additional green infrastructure activities, aimed at urban revitalization and improving the quality of life for city dwellers, could include:.
Harbor and waterfront cleanup/rehabilitation. Funds could be used for water pollution control projects as well as municipal projects to open up decayed or dangerous waterfront properties for recreational, commercial, and/or residential use.
For areas with old or unsafe landfills, funds could be used to close or modernize these facilities, especially where they are located in urban areas.
Promotion of recycling centers and programs. This could be for cities or counties that want to explore the revenue generating and job creation possibilities of the recycling industry. Other possibilities include programs to encourage businesses with large facilities to start their own recycling efforts.
Various initiatives to combat the urban heat island effect. A short list of simple things that cities and counties can do to counter localized temperature effects includes: surfacing roads in lighter colored material, painting roofs light colors, using more energy efficient street lighting, tree planting, etc. These efforts can have substantial benefits in terms of global warming, improving health of local citizens (reduced asthma,
heat stroke, etc.), reducing cooling bills in the summer, cutting back on the formation of smog (which is exacerbated in hotter weather), etc.
Planning for and purchasing land for urban forests and agriculture; corridors to enhance storm water management; air and aesthetic quality improvements; wildlife and pedestrian movement; water’s edge access; and “civic spaces”.
- Greenbonds word - Grnbnd.wp
With that said, my comments only reflect my small window on budget management within the city. I’ve lived in the city for over 21 years and have served on the board of two homeowners associations, the Open Space Steering Committee, and the Northern VA Conservation Trust. Although my background is fairly broad-based my focus for many years has been parks, open space, outdoor recreation, fundraising and revenue generation. It is in these areas that I will offer some suggestions that might help you as you prepare and approve our budget.
First, everyone needs to know that governments like ours never have enough money. Although taxes, grants, fees, and other sources of money are considerable there is never enough money to do everything that needs to be done, when it needs to be done. By virtue of these limits some things are more important than others. I hope that you will continue to support the basic health and safety services the city provides. I also hope that you will refrain from funding new initiatives but rather put money toward protecting and maintaining things that we have now.
Second, perhaps as much as you need to cut services to meet your budget you also need to improve the management of your existing departments. Wasting money is probably worse than not having all the funds we need to do what needs to be done.
Over the last two years I’ve been encouraged by your managers to carry park, open space, health and safety problems to each of you. Over and over again city employees are reluctant to work with community interests on anything other than what they want to do. They often use a lack of time and, or money, as their rationale for saying no, dismissing ideas shared with them, or steering citizens toward you to solve problems. Unfortunately I have found that some of the city’s agendas do not reflect community needs and interests, and these ideas have not been vetted publicly. A good number of these ideas are frankly wrong-headed and without concern for the public that these individuals are paid to serve.
Many of these bad decisions have resulted in projects and work that needs to be redone, and sometimes redone again, because of a lack of permits, poor or no planning, or a disregard for the interest of the public. On some occasions past Recreation Department directors have almost bragged about how more than 120 of the city’s parks don’t have plans and that in order to do a plan they needs lots of money. Such a perspective makes it hard for me to understand how current and future funds for these areas can ever be invested wisely.
For example, the lack of up-to-date master plan for Fort Ward Park has cost the city funds that could have been better used protecting important historic resources and providing important recreation services. Park solid waste transfer stations and maintenance yards have been developed without permits and public input only to be relocated when these uses conflict with neighbors, graves, laws, and common-sense. Drainage swales and ravines have been filled with soil, mulch, and debris without regard to the consequences of altering drainage areas and the cost of restoring these areas given they were filled without permits.
As we struggle to figure out how we can protect, maintain and provide services at parks like Fort Ward I see money given annually and non-competitively to non-profit organizations to promote the protection and acquisition of more city park land. Surely the goal of open space planning is one I support but is paying a consultant from outside the city to supplement city staff an effective way to achieve this goal?
I observe other efforts, such as the promotion of very large “special events” in parks under the guise of revenue generation. Although public agencies should look at ways to save money as well as generate revenue some of the city’s revenue generation strategies, such as the ones at Fort Ward Park, have cost the city money rather than bring in new revenues. More often than not many public servants will try to pursue revenue generation without the knowledge, skills and expertise to successfully do so.
I’ve observed problems with maintenance in our parks, such as Chinquapin Park. I’ve observed that the city has been unable to maintain these areas due to budget cuts, but we have given a non-profit group a grant/ contract to sponsor invasive plant removal projects in that same area only to have the plants they have pulled remain in a pile at the entrance to the park trail for what is now six months.
Finally, the city managers, as well as some of you at times, seem to treat citizen interest and involvement in our park areas with a certain amount of resistance and on occasion contempt. Given that many of us know the demands that are placed on you and city staff we often try to give all of you some slack as you do your jobs. However, the tension that is created between some of your antagonistic city staff and the community they serve costs them and us time and money.
By driving away, or at least keeping the citizens at arms-length also costs the city funds in other ways. For example, I have repeatedly made offers to members of your Recreation Department to share my skills and experience in the areas of fundraising and revenue generation without a hint of interest or even willingness to listen. Whether it is disdain or a dismissive nature this behavior undermines a relationship that could help the city help itself to get things accomplished and save money.
In closing, please be sure that I appreciate what you do and I wish you success with the resolution of the budget. Please look to ways to eliminate wasteful spending, tap the unrealized potential of the citizenry, and bring substantive revenue sharing expertise into city government to help meet the financial challenges you face. Please do not, under any circumstances, raise our taxes to meet needs and perpetuate the waste which goes on now.
Thanks again for the chance to comment.
Glenn
Glenn Eugster
4022 Ellicott Street
Alexandria, VA 22304