Navigating Green Infrastructure Maintenance with Capitalized Establishment Costs

Paying for maintenance is often a barrier for municipalities that want to implement green infrastructure (GI) projects. This maintenance barrier is one reason that GI projects represent a small percentage of projects funded by the Clean Water State Revolving Fund (CWSRF)–the largest federal program for financing water infrastructure. 

Water managers are rightfully concerned with making large-scale capital investments in GI without sufficient maintenance funding in hand. While the CWSRF cannot pay for long-term maintenance, it can fund the establishment period of GI–a period preceding long-term maintenance when vegetation establishes its roots in the ground. This period is crucial to proper construction of GI and ensures that GI will function as intended. Because the activities during the establishment period are similar to long-term maintenance, e.g., irrigation, weeding, etc., those less familiar with GI may view the establishment period as a maintenance cost. 

However, the establishment period is a one-time capital cost that can be financed along with other construction costs such as the GI vegetation. For example, in Hoboken, New Jersey, and for the Milwaukee Metropolitan Sewerage District, Wisconsin, GI establishment period costs are capital costs that are included in project financing. 

Environmental Policy Innovation Center and WaterNow Alliance's report asserts that by appropriately treating establishment period costs as capital costs, water managers can leverage the CWSRF to invest in GI while reducing the impact of those investments on annual O&M budgets and giving more time for training project owners about long-term maintenance. Demystifying the nuances of GI capital versus annual O&M costs will ensure financing for GI projects covers all appropriate costs and paves the way for capturing the multiple benefits of GI over the long term.