Revenue Bonds are backed by the revenue generated by the project for which the bond is issued. The
infrastructure projects these municipal bonds pay for, must generate revenue that
then goes to pay back the interest and principal to the investors.
A number of communities (Columbia, SC, Burlington, VT) use the stormwater fees as
the “revenue” for issuance of revenue bonds.
Revenue Bonds are higher risk bonds for the investors, because they are paid solely
from revenue received from the project. These bonds are not beholden to the municipality’s
general fund or the tax payers.
Revenue bonds for healthy watershed projects will only be successful if the project
has revenue potential. Typically, revenue bond projects are: hospitals, airports,
toll roads, housing projects, convention centers, bridges, etc. Even though healthy
watershed projects do not usually generate income, any revenue bond project can include
healthy watershed practices. Any project can include healthy watershed, flood risk
reduction practices.
Some types of bonds require voter approval, some do not. Consult your municipal attorney
prior to moving forward with any type of bond opportunity.
Project Examples
Burlington, VT $30M for Stormwater and Wastewater Utility Projects 2018
In 2018, the City of Burlington issued a revenue bond for nearly $30M, payable from
the net revenues of the stormwater and wastewater system. Stormwater projects included:
collection system improvements, improvements to the combined sewer runoff and overflower
mitigation, treatment and runoff reduction, programmatic improvements and implementation
of pollution control asset management system. The bond passed with 92% voter approval.
Columbia, SC Revenue Bonds for CIP projects
In Columbia, SC the Stormwater Utility issues revenue bonds for stormwater projects
that align with the Capital Improvement Plan. Revenue bonds are repaid by revenues
from the stormwater utility charges on monthly bills. Columbia uses a dual approach
to financing stormwater projects. 1) The utility assesses a stormwater development
charge on new construction. Monies from the development charges address the effects
of new development and the increased stormwater runoff. 2) Monthly stormwater charges
provide income for long-range planning, construction and maintenance.
Contact Info
Consult your municipal attorney prior to moving forward with any type of bond opportunity.
Consult your community’s attorney and financial advisors prior to moving forward with
any of these funding options. Any reference in this website to any person, or organization,
or activities, products, or services related to such person or organization, or any
linkages from this website to the website of another party, do not constitute or imply
the endorsement, recommendation, or favoring of companies or organizations.
