Proposed Stormwater Management Plan Poised to Create Economic Development Opportunities

Over the past year, the City of Pittsburgh has worked with Pittsburgh Water and Sewer Authority (PWSA) to develop a scalable and adaptive green infrastructure plan to address wet weather sewage overflows, basement back-ups, and localized flooding. The proposed plan includes job creation and economic development opportunities in city neighborhoods.

On September 26, 2016, Mayor William Peduto, his administration, and representatives of PWSA presented City Council with a preliminary plan to address stormwater and water quality issues throughout the city. It fits perfectly with the mission of our program, Enviro Social Capital.  ESC has spent the past year performing necessary due diligence and feasibility studies on ways to finance the city’s large-scale green infrastructure plan using a Pay-for-Success (PFS) model.  Such an instrument has investors provide the upfront risk capital to begin green infrastructure implementation.  Desired outcomes, which are specifically defined and agreed upon between the investor and public sector (PWSA), include wet weather sewage overflows, basement back-ups, and localized flooding. PWSA would pay back the investor if and only if the previously determined outcomes are successfully met.  This financial model allows the public sector to try an innovative, sustainable approach without the risk of wasting money on an ineffective solution.

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Excerpt from PWSA’s citywide Stormwater Assessment Plan

Since the Pay-for-Success model utilizes outcome-based funding, ESC is examining the multiple secondary social and environmental benefits that green infrastructure brings to a community.  If it can achieve numerous positive outcomes, there can be multiple “payers” (see our model on ESC webpage linked above) on one project.  Since these secondary benefits are usually not monetized, however, they are typically not ascribed their deserved value or greatly considered.  As part of our feasibility assessment, we have been researching how to change that and better value advantages such as workforce development and new green jobs, increased land values, improved air quality, and increases in green spaces and recreational opportunities.

As the City begins to examine how to pay for  infrastructure plans, we hope it considers utilizing the Pay-for-Success model for its green infrastructure implementation.  If it would, even if desired outcomes are not achieved, money would not be wasted; and, conversely, if the model proves successful, the City can continue to build green infrastructure to help it meet the Environmental Protection Agency’s Consent Decree, while simultaneously reaping multiple secondary social and environmental benefits.

ALCOSAN has been amending the current decree with the federal government regarding sewage overflows and, as this process is being finalized, a stormwater management plan will be submitted to the EPA by year’s end. A copy of the preliminary plan can be found here.

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