Small Ways Muni Investors Can Make a Big Difference

Investors increasingly want to align their financial goals with a commitment to improving their communities and the lives of others. Two recent projects showcase how municipal bond investors are making an impact to help the environment, vulnerable communities and children with special needs.

Municipal bonds issued by state and local entities fund projects across various sectors that create the foundation upon which local economies thrive. Some muni issues also have specific impact goals, like ensuring safe drinking water or helping underserved kids. The proceeds from such bonds are directly channeled to help finance specific projects or programs that can measurably benefit communities.

One example is the Essex County Improvement Authority in New Jersey, whose bonds will help replace miles of worn-out lead water pipes that risk the health of thousands of Newark residents.

Safeguarding Clean Water and Health

Clean water is a basic human right. Yet like so many American cities, Newark, New Jersey suffers from an aging infrastructure. Its old water service pipes—many over a century old—are decaying and leaching toxic lead into homes and businesses.

The immediate concern is for the 250,000 residents of Newark exposed to contaminated drinking water, the overwhelming majority of whom are people of color. Last year, more than 10% of Newark residents reported lead levels well over acceptable standards.

Lead is especially dangerous to children. Despite federal standards, according to the American Academy of Pediatrics, there is no level of lead that is considered safe for children. “Low-level lead exposure … is a causal risk factor for diminished intellectual and academic abilities, higher rates of neurobehavioral disorders such as hyperactivity and attention deficits, and lower birth weight in children.”

Standing up to fix the problem, the Authority in 2019 issued $70 million in guaranteed muni project bonds to help fund the replacement of 18,000 lead service lines across the city over three years. So far, about 11,000 have been replaced—free of charge to water customers.

By the time the Newark project is done, we believe it will have changed the course of the community’s health and well-being—especially for so many vulnerable children.1