Wednesday, May 6, 2009

Unleashing Waves of Innovation: Transforming Washington Rivers & Estuaries for the Future

Arguments abound on saving Washington Rivers. There are those who believe that the greatest pollution threat to our rivers stems from urban sprawl and overdevelopments, arguing that as new houses are put in place and commercial development proceeds, millions of gallons of contaminant storm water are emptied into the rivers and bays, polluting sources of drinking water for many Washingtonians. One recently in a documentary on Frontline, describes Seattle’s Elliot Bay as a brown, noxious soup of nastiness that is unbelievable. That is hardly a complement to residents adjacent to the Bay.

Washington Legislatures may have offered an avenue to unleash possible waves of innovation in the cleaning up of Washington Rivers though, through the advancement of Senate Bill (SB) 5334. You wonder what does this bill has for cleaning Washington Rivers and Estuaries. The simple answer is that for the first time, we see the concept of borrowing (investment in environmental protection priority through credit) by state and municipal government in addressing environmental and natural resources protection, including river cleanup, water conservation, storm water and sewage treatment, and restoration of natural habit. The pillaring argument for this proposal comes from the understanding that environmental protection problems transcend municipal and state boundaries and if we are going to achieve rapid results, there must be a quantifiable measure of result associated with weighted costs. Raising loans, bonds and capital to transform the environment falls into this category of effort. My environmental protection colleagues termed this idea the ‘greening of Washington State using market forces not the dole’.

In SB 5334, legislatures find that the task to clean the environment, including rivers that run across municipal boundaries, must be a shared jurisdictional responsibility where all members in the region do not perceive the task as a burden, thereby delaying the undertaking or offering suboptimal financial expenditures and/or natural resource capital to resolve the problem. The previous challenge faced by municipalities has been the perception that there is an inequitable financial responsibility born by governments across which a river runs, and because of this there is a disincentive to participate in the process of say, cleaning up of the river. The perceived disparity of burdens and benefits to be shared by municipalities regarding the Puget Sound cleanup therefore, may have actually hampered the resolution of the problem and the availability of natural resources capital to effectively do the job.

As presented by Senator Jacobsen, Senate Bill 5334 introduces the concept of interjurisdictional financing, public financing, to address the lack of connection between financing burden and expenditure benefits to municipalities regarding the resolution or correction of an environmental pollution problem. This hopefully will help bypass current institutional barriers to financing integrated environmental clean up projects like the cleaning up of the Duwamish River, the Puget Sound and/or other polluted Washington Rivers? Unlike the traditional municipal bond finance model in which the repayment of bonds is anticipated solely from increased utility or tax revenues of the bond issuer, interjurisdictional bonds would be repaid by allocated shared responsibility, without diminution of the issuing entity's obligations to bondholders. The jurisdictional benefit from such expenditure, including increased revenue to municipalities based on project cost or tax saving or increased utility revenue is considerably tempered. The process however takes into consideration the life cycle of the project based on assessment protocols associated with the project. It is anticipated that this new method of financing will help garnish support for many environmentally responsive initiative or project(s).

It will also afford for greater innovation in project management initiative with respect to cleaning up of Washington State Rivers and Estuaries for years to come. And there lies the hope for transforming our rivers and estuaries, ideas driven by science, policy fashioned out from dynamic financial applications, resolution considered in light of prior experience and recommendations provided to actualize public desires.
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