Overcoming Barriers to Paying for Distributed Infrastructure

Using public dollars for distributed water infrastructure on private property for public purposes can raise various legal issues. Key questions to ask:   

• Does my city/utility have the legal authority to use ratepayer dollars in connection with water system benefits on private property? 

• Does my city/utility have legal authority to debt-finance water system benefits located on private property?  

• Are there existing debt constraints for financing distributed strategies? 

• Does my state’s “gift prohibition” preclude the use of public dollars to pay for improvements on private property or benefits to individuals or businesses? 

In most, but not all, cases perceived legal impediments are not a barrier to using rate revenue or public debt to pay for distributed water infrastructure on private property. The sub-sections below provide an easy reference guide to these issues.