Financing Wildfire Resilience in Colorado
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Financing Wildfire Resilience in Colorado
- Water Provider Financing Decision Tool
- Wildfire Resilience Interventions
- How to Value Co-Benefits
- Build Partnerships
- Financing Pathways
- Why Consider Debt for Watershed Projects?
- Can a Utility Use Municipal Bond Proceeds to Pay for Nature-Based Solutions?
- Can Water Pollution Control Revolving Fund Loans Finance Nature-Based Solutions?
- Can Drinking Water Revolving Fund Loans Finance Nature-Based Solutions?
- Navigating “Gift Prohibition” & Accounting Questions Associated with Financing Watershed Projects
Navigating “Gift Prohibition” & Accounting Questions Associated with Financing Watershed Projects
The nature of watershed health and wildfire projects—decentralized, distributed across lands not owned by utilities—raises a set of issues around whether and how public funds can be used for these investments, and how to properly account for them.
The sections below provide guidance on two accounting options that comply with Governmental Accounting Standards Board (GASB) rules, and how investments in nature-based interventions meet Colorado’s “gift prohibition” exemption, paving the way for public investments on property owned and under the management of federal and/or state agencies, as well as private property. We have also provided guidance on how water managers can effectively engage with their bond counsel and finance staff on these issues.
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GASB 4: Obtaining Ownership Interest or Control through Easements or Contracts
Nearly every state has some form of a constitutional prohibition against “gifts” of public funds for private purposes.
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GASB2 62: Booking Debt in the Absence of Ownership or Control
Nearly every state has some form of a constitutional prohibition against “gifts” of public funds for private purposes.
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How to Meet Colorado’s “Gift Prohibition” Exemption
Nearly every state has some form of a constitutional prohibition against “gifts” of public funds for private purposes.
These provisions are distinct from the rules regarding the use of public debt, but can give rise to negative perceptions or concerns about the use of public funds for projects and technologies deployed on private property. Constitutional gift prohibitions are generally not a barrier to investment in nature-based watershed health interventions. (In addition, since most Colorado watershed health and wildfire resilience projects will likely take place on state or federal lands, the State’s gift prohibition would have limited application in any event.)
Gift prohibitions are distinct from the rules regarding the use of public debt, but can give rise to negative perceptions or concerns about the use of public funds for projects and technologies deployed on private property.
As with most states, Colorado allows expenditures that incidentally benefit private interests, as long as they primarily serve and fulfill a public purpose. Article 5, Section 34 of the Colorado Constitution authorizes the expenditure of public funds that incidentally benefit private parties where the public purpose outweighs those incidental private interests.
Accordingly, it appears that Colorado’s gift prohibition does not bar local water providers from using bond proceeds, or other public financing, to pay for watershed health interventions on private property.
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Engaging with Bond Counsel & Finance Staff
Nearly every state has some form of a constitutional prohibition against “gifts” of public funds for private purposes.
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Can Drinking Water Revolving Fund Loans Finance Nature-Based Solutions?
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Wildfire Resilience Interventions
