Little-Known Accounting Policy Could Fuel Green Infrastructure Surge

Sourced from News Deeply

Most water agencies don’t think of local water projects like green roofs or efficiency rebates as assets, but now they can. And that means agencies can now access capital markets for funding, which could help dramatically grow these projects.

IN THE YEARS to come, we’re likely to see a lot more “green” and distributed infrastructure projects from water utilities, like permeable pavement, rainwater capture and efficiency rebates. That’s because coming up with the money needed to scale these projects just got a lot easier.

In the water world, most big infrastructure projects like treatment facilities and pipelines are usually financed by water agencies selling bonds, which can help them raise millions of dollars for a project that only needs to be paid off a little bit at a time over many years. That’s because these projects are owned by the agencies and are considered an asset on which they can capitalize.

But turf removal programs, green roofs and other localized water projects that can have significant impact on water consumption – often referred to as “distributed infrastructure” – weren’t typically considered an asset because they weren’t actually owned by an agency. Instead rebates for these kinds of projects were funded from operating budgets, which often isn’t enough to really scale such efforts.

But the Government Accounting Standards Board (GASB), which is an independent organization that establishes accounting and financial standards, approved a policy implementation guide on May 7. This time one of the guidelines it addressed was Statement No. 62 (also referred to in shorthand as GASB 62).

GASB 62 has actually been around for years, but it wasn’t well known. That prompted GASB this month to clarify the language around “business-type activities” of public agencies.

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