New Jersey Stormwater Law May Spur Resiliency Bonds
A New Jersey law enabling municipalities to create utilities to manage stormwater runoff may spur increased borrowing for resiliency projects throughout the state, according to analysts.
The Clean Stormwater and Flood Reduction Act signed by Gov. Phil Murphy last week was created to tackle flooding risks facing much of the state. Moody’s analyst Douglas Goldmacher noted in report that while the legislation does not alter the credit conditions of any locality, the measure may create new strategies for creating dedicating revenue streams dedicated to stormwater capital projects.
Resilience expert Alan Rubin, a partner with Blank Rome LLP, expects the New Jersey law to prompt increasing borrowing for some of the stormwater projects, including green bonds, and expects other states to follow suit with similar legislation in the near future. Rubin said fees alone are typically not enough to fully support bonds for stormwater projects, but stressed that supporters of socially conscious investing will drive plenty of financial support.
“Everybody takes a haircut because of the resilience factor,” said Rubin. “The fees are de minimis, but they are typically made up for by volume.”
"New Jersey Stormwater Law May Spur Resiliency Bonds," by Andrew Coen was published in The Bond Buyer on March 27, 2019.