Maryland Bay Restoration Fund

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A slideshow about Maryland's Bay Restoration Fund, a fee to pay for wastewater treatment and septic system upgrades to clean up nutrient pollution in the Chesapeake Bay. Presented by Jag Khuman, …

A slideshow about Maryland's Bay Restoration Fund, a fee to pay for wastewater treatment and septic system upgrades to clean up nutrient pollution in the Chesapeake Bay. Presented by Jag Khuman, director of the Maryland Water Quality Financing Administration, during the Buzzards Bay Coalition's 2013 Decision Makers Workshop series. Learn more at www.savebuzzardsbay.org/DecisionMakers

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  • Frequently, presenters must deliver material of a technical nature to an audience unfamiliar with the topic or vocabulary. The material may be complex or heavy with detail. To present technical material effectively, use the following guidelines from Dale Carnegie Training®.   Consider the amount of time available and prepare to organize your material. Narrow your topic. Divide your presentation into clear segments. Follow a logical progression. Maintain your focus throughout. Close the presentation with a summary, repetition of the key steps, or a logical conclusion.   Keep your audience in mind at all times. For example, be sure data is clear and information is relevant. Keep the level of detail and vocabulary appropriate for the audience. Use visuals to support key points or steps. Keep alert to the needs of your listeners, and you will have a more receptive audience.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • Covers 64,000 sq miles.; 6 states & DC; home to 15M people; 5 Major Rivers
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • Allocations accepted by each state Note that we are relying on clear skies to provide us with an additional 8 million #/yr N reductions
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • Determine the best close for your audience and your presentation. Close with a summary; offer options; recommend a strategy; suggest a plan; set a goal. Keep your focus throughout your presentation, and you will more likely achieve your purpose.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • In your opening, establish the relevancy of the topic to the audience. Give a brief preview of the presentation and establish value for the listeners. Take into account your audience’s interest and expertise in the topic when choosing your vocabulary, examples, and illustrations. Focus on the importance of the topic to your audience, and you will have more attentive listeners.
  • Determine the best close for your audience and your presentation. Close with a summary; offer options; recommend a strategy; suggest a plan; set a goal. Keep your focus throughout your presentation, and you will more likely achieve your purpose.

Transcript

  • 1. Department of the Environment Chesapeake Bay RestorationMaryland Bay Restoration Fund Jag Khuman, Director Maryland Water Quality Financing Administration April 3, 2013
  • 2. Chesapeake Bay Restoration Presentation OverviewHistory of Chesapeake Bay Restoration EffortsFederal/State Regulatory InitiativesMaryland Bay Restoration Fund – Wastewater/Septic
  • 3. Chesapeake Bay WatershedThe nutrients causing water qualityimpairments drain into the ChesapeakeBay via rivers from the entire watershed. New York Pennsylvania Maryland West Virginia DelawareChesapeake Bay District of Watershed Columbia Boundary Virginia
  • 4. Chesapeake Bay Watershed - Stats• The Chesapeake Bay watershed includes parts of six states -Delaware, Maryland, New York, Pennsylvania, Virginia and West Virginia, and the entire District of Columbia.• Fresh water drains into the Bay from an enormous 64,000- square-mile watershed.• There are about 150 major rivers and streams in the Bay watershed• The Susquehanna River provides about 50 percent of the fresh water coming into the Bay—an average of 19 million gallons of water per minute.• The Bay watershed is home to about 17 million people and growing.
  • 5. Bay Agreements – History & Goals• 1987: Maryland, Pennsylvania, Virginia, the District of Columbia, the Chesapeake Bay Commission and the U.S. Environmental Protection Agency formally agreed to reduce (by 40% of the 1985 levels) and control point and nonpoint sources of pollution to attain the water quality conditions necessary to support the living resources of the Bay.• 1992: Reaffirmed commitment to achieve an overall 40 percent reduction of nitrogen and phosphorus entering the main-stem of the Chesapeake Bay by the year 2000. Also committed to tributary-specific reduction strategies to achieve this reduction.• 2000: Continue efforts to achieve and maintain the 40 percent nutrient reduction goal agreed to in 1987. By 2010, correct the nutrient and sediment related problems in the Chesapeake Bay and its tidal tributaries sufficiently to remove the Bay and the tidal portions of its tributaries from the list of impaired waters under the Clean Water Act.
  • 6. Tributary Strategy – Nitrogen Load by State Nitrogen Allocation (million pounds/year) PENNSYLVANIA 74 MARYLAND 39 VIRGINIA 53DISTRICT OF COLUMBIA 2 NEW YORK 8 DELAWARE 3 WEST VIRGINIA 5 SUBTOTAL 184 Atmospheric 16 BASIN-WIDE TOTAL 2021985 Baseline Load: ~370 million lbs/year
  • 7. Chesapeake Bay Foundation LawsuitJanuary 2009: The Chesapeake Bay Foundation (CBF)and its co-plaintiffs filed a lawsuit claiming that EPA hadfailed to take adequate measures to protect and restorethe Chesapeake Bay under the Clean Water Act.May 2010: EPA reached settlement agreement. EPAactions include establishing the stringent ChesapeakeBay total maximum daily load (TMDL), putting in place aneffective implementation framework, expanding its reviewof Chesapeake Bay watershed permits, and initiatingrulemaking for new regulations for concentrated animalfeeding operations and urban and suburban stormwater.The agreement also includes a commitment to establisha publicly accessible tracking and accounting system tomonitor progress in reducing pollution through the TMDLand two-year milestones.
  • 8. EPA Chesapeake Bay-Wide TMDLTMDL: Total Maximum Daily Loading• US EPA is enforcing the Federal Clean Water Act by establishing Bay-wide TMDL for Nitrogen, Phosphorus and Sediments.• River and stream segments to have maximum pollution loading limits.
  • 9. Maryland Chesapeake Bay Watershed Implementation Plan Target Loads for Maryland’s Major Basins (10/2012) (Million pounds per year)Major Basin Nitrogen Phosphorus SedimentSusquehanna 1.19 0.06 64Eastern Shore 11.82 1.02 189Western Shore 9.77 0.55 243Patuxent 3.10 0.24 123Potomac 15.29 0.94 731 Total 41.17 2.81 1,350
  • 10. Maryland Chesapeake Bay Total Maximum Nitrogen Loading Goal Total Nitrogen (TN) Loading by Sector (WIP Phase-II - 03/2012) (million lbs per year)Sector Progress Final Target % Reduction Thru 2010 Load (2025) NeededStormwater 9.48 7.55 20%Agriculture 19.95 15.22 24%Septic 3.00 1.85 38%Forest 5.29 5.31 0%Atmospheric 0.66 0.66 N/AWastewater * 14.37 10.58 26%Total 52.76 41.17 22%MD1985 Baseline Load: 76.56 million lbs/year* Maryland expects to achieve ENR upgrades at the major WWTPs by 2017, tomeet the above wastewater target.WIP: Watershed Implementation Plan
  • 11. Biological & Enhanced Nutrient Removal• BNR: Nitrogen reduction in WWTP affluent from secondary treatment level of ~18 mg/l to 8 mg/l. 1987 – Present: Maryland implemented a cost share (50/50) BNR grant program (Funding: State GO bond appropriation).• ENR: Nitrogen reduction in WWTP affluent from 8 mg/l (BNR level) to 3 mg/l. 2005+: Maryland implemented an up to 100% ENR grant program (Funding: Bay Restoration Fund).• BNR/ENR Process: Converts nitrogen compounds in wastewater to nitrogen gas (Air is ~80% nitrogen gas).
  • 12. Maryland Regulatory Initiatives Examples• Major WWTP Upgrades to ENR Level Treatment NPDES discharge permits for major WWTPs (> 0.50 MGD flow) that discharge to the Chesapeake Bay are being modified with numerical pound loading limits for Total Nitrogen. ENR capital upgrades must be completed by 2017.• Stormwater Best Management Practices (BMP) Maryland MS4 (Municipal Separate Storm Sewer Systems) permit jurisdictions must develop a dedicated Stormwater (SW) utility fee by July 1, 2013 (HB 987/2012). Local Governments will have reliable revenue source for SW infrastructure.• Septic System Upgrades for Nitrogen Reduction Required for septic systems (new and repairs) in the Chesapeake Bay watershed (effective 1/1/13). An add-on TN removing system costs ~$14K and can reduce TN by 50% (or 10 lbs/yr per household).
  • 13. Bay Restoration Fund (BRF)The BRF was enacted into law in 2004, to create adedicated source of revenue. The BRF is made up oftwo separate funds with specific uses under State law:1. Bay Restoration (WWTP) Fund: Includes deposits offees collected from users served by all wastewatertreatment plants in Maryland.2. Bay Restoration (Septic) Fund: Includes deposit offees collected from users on on-onsite sewage disposalsystems such as septic systems or holding tankslocated in Maryland.WWTP: Wastewater Treatment Plant
  • 14. Bay Restoration (WWTP) Fund BRF (WWTP) Fee Rate• Effective 7/1/12, the BRF fee on users, where the WWTP discharges into the Chesapeake or Atlantic Coastal Bays, is $5.00 per month per household or equivalent dwelling unit (EDU) - businesses pay based on water consumption converted to EDU. Fee rate was $2.50/month/EDU from FY 2005 – 2012.• $2.50 per month per household/EDU for users where the WWTP does not discharge to the Chesapeake or Atlantic Coastal Bay.• Estimated fee revenue: Approx. $100 million/year (FY 2013).• Fee reverts back to $2.50/month rate starting July 1, 2030.
  • 15. Bay Restoration (WWTP) FundPrimary Purpose (Phase-I): To upgrade by 2017, the67 major (design flow > 0.50 million gallons per day)Wastewater Treatment Plants that discharge to theChesapeake Bay watershed, with Enhanced NutrientRemoval (ENR) technologies - nitrogen reductionfrom 8 mg/l (BNR level) to 3 mg/l.Total Est. Capital Cost: = $1.26 billion (67 WWTPwith total MD design flow ~700 MGD*).The BRF provides up to 100% in State grant fundingto WWTP owners for the capital cost of ENRupgrades.BNR: Biological Nutrient Reduction* Includes MD share of flow at Blue Plains WWTP (Washington DC)
  • 16. Bay Restoration (WWTP) Fund Fee Collection• The Bay Restoration Fee is collected by the for the water/wastewater billing authority on behalf of the State of Maryland.• The local billing authority to use existing procedures for water/sewer billings to enforce the collection of the Bay Restoration Fee.• The Fees must be remitted to the State Comptroller quarterly as follows: Fees Collected Deposit to State Comptroller by Jan – March April 20 April – June July 20 July – Sept Oct 20 Oct – Dec Jan 20• The Comptroller may retain up to 0.5% of the Bay Restoration Fees deposited for its administrative expenses, and reimburse up to 5% of the fee deposited, back to the billing authorities for administrative expenses.• The remaining balance must be deposited into the Bay Restoration Fund held by the MWQFA. Annual Revenue: ~$100 million.
  • 17. Projected ENR Grant Financing Bay Restoration Fund ENR Grant Awards $350Millions $300 $250 $200 $150 $100 $50 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 FYTotal ENR Capital Funding (67 WWTP): ~$1.24 billion (March 2013 estimate)Source of Funding: BRF Cash and Revenue Bonds
  • 18. Revenue Bond Indenture Provisions• State Law permits only up to 15-year amortization – Because of the general application of this BRF fee, for debt issuance purposes, the State is restricting bond repayment to 15-years, thereby limiting it to the same constitutional limitations of a tax• Additional Bonds Test at 1.10 times coverage – Target minimum coverage of 1.20 times• Tax-exempt Bonds will be used to provide grants to local Governments for the capital cost of ENR upgrades• No Debt Service Reserve Fund – Reflective of the fact that the Bay Restoration Fee is collected statewide from users of wastewater treatment facilities at a flat rate of $60 per year for most households. The variable usage component (Per EDU usage for businesses) is estimated to account for less than 25% of the fee revenue• Balance in Program Fund Equity Account (not a pledged revenue for bonds) provides additional security for debt service, if needed
  • 19. Flow of Funds Collections of BRF Fee at Local Level Comptroller (Up to 5.5% of BRF Fee may be retained for administrative expenses, 0.5% for the Comptroller and 5.0% for each Billing Authority) MWQFA Program Fund 98.5% 1.5% Current Administration Equity Revenues ExpensesGrants Account Account Account Accounts Held by Trustee Must Fund Semi Annual Required May Fund Transfers - 100% I & 50% P Project Fund Pledged Revenue (Bond Proceeds) Fund Senior Lien Debt Service Fund Subordinate Lien Debt Service Fund
  • 20. Revenue Bond Debt Issuance Plan (Dollars in Millions)Fiscal Year Bond Issues Debt Outstanding at 6/30 Debt Service for FY Revenue (Cash) 2008 $ 50.000 $ 50.000 $ - $ 55.068 2009 $ - $ 46.825 $ 4.655 $ 53.356 2010 $ - $ 44.185 $ 4.710 $ 54.818 2011 $ - $ 41.560 $ 4.616 $ 54.598 2012 $ - $ 38.820 $ 4.614 $ 55.144 2013 $ 50.000 $ 85.995 $ 4.617 $ 99.021 Fee Inc. 2014 $ 150.000 $ 230.738 $ 9.431 $ 100.011 2015 $ 160.000 $ 378.279 $ 23.884 $ 101.011 2016 $ 100.000 $ 457.806 $ 39.297 $ 102.021 2017 $ 20.000 $ 451.726 $ 48.902 $ 103.041 2018 $ - $ 423.455 $ 50.788 $ 104.071 2019 $ - $ 393.813 $ 50.746 $ 105.112 2020 $ - $ 362.613 $ 50.858 $ 106.163 2021 $ - $ 329.858 $ 50.859 $ 107.225 2022 $ - $ 295.471 $ 50.856 $ 108.297 2023 $ - $ 259.370 $ 50.856 $ 109.380 2024 $ - $ 226.096 $ 46.244 $ 110.474 2025 $ - $ 191.158 $ 46.244 $ 111.579 2026 $ - $ 154.471 $ 46.244 $ 112.695 2027 $ - $ 115.951 $ 46.244 $ 113.822 2028 $ - $ 75.500 $ 46.244 $ 114.960 2029 $ - $ 37.841 $ 41.427 $ 116.110 2030 $ - $ 12.780 $ 26.976 $ 117.271 2031 $ - $ 1.843 $ 11.561 $ 59.222 Fee Dec. 2032 $ - $ - $ 1.927 $ 59.814
  • 21. ENR Status (Feb. 2013)Grant Awards to WWTP Owners: $704 millionGrant Payment Expenditures: $359 millionPayments are made based on work completed # of ENR WWTPENR Completed: 26Under Construction: 22Under Design/Planning: 19 Total (Phase-I) 67
  • 22. Bay Restoration (Septic) Fund BRF (Septic) Current Fee Rate• Effective 7/1/12, the BRF fee on users of OSDS/septic systems located in the Chesapeake or Atlantic Coastal Bays, is $5.00 per month per user ($60 per year).• $2.50 per month per user for OSDS/septic systems located outside the Chesapeake or Atlantic Coastal Bay. (portions of Garrett and Cecil Counties).• Estimated fee revenue: Approx. $27 million/year (FY 2013).• Fee reverts back to $2.50/month rate starting July 1, 2030.
  • 23. Bay Restoration (Septic) Fund Primary PurposeA. To upgrade individual Onsite SewageDisposal Systems/Septic Systems with BestAvailable Technology (BAT) for nitrogenreduction (60% of the BRF septic fee).The BRF program by policy provides between 25% and 100% of the BAT capitalcost as grants, based on homeowner income. Businesses are eligible for up to25% of BAT cost as grant.B. To provide funding to farmers for CoverCrops (40% of BRF septic fee).This program is managed by the Maryland Department of Agriculture (MDA). PerMDA, in FY 2012, over 600,000 acres were enrolled and MDA spent 19.8 millionon cover crops of which $5.6 million came from the BRF septic fee. In FY 2013,the BRF fee revenue for cover crops is estimated around $10.8 million.
  • 24. Bay Restoration (Septic) Fund Project Prioritization• Failing septic systems in the Chesapeake and Atlantic Coastal Bays Critical Area.• Failing septic outside the Chesapeake and Atlantic Coastal Bays Critical Area.• Other septic systems in the Chesapeake and Atlantic Coastal Bays Critical Area, including new construction.• Other septic systems outside the Chesapeake and Atlantic Coastal Bays Critical Area, including new construction.
  • 25. Bay Restoration (Septic) Fund Eligible Uses of Fundsa) The cost to upgrade an existing septic system with the bestavailable technology (BAT) for the removal of nitrogen (~$13K/unit)(b) The cost difference between an existing conventional septicsystem and a new system utilizing BAT for the removal of nitrogen(~$10K/unit)(c) The cost of replacing multiple septic systems located in thesame community with a new community sewerage system that isowned by a local government, and that meets enhanced nutrientremoval standards. Grant not exceed the sum of the costdifference between conventional septic system and new systemthat uses BAT for removal of nitrogen (~$10K/unit x #)(d) The cost to connect septic systems to an existing WWTP atENR treatment. Grant not exceed the sum of the cost of septicsystems that include BAT for removing nitrogen (~$20K/unit x #).WWTP with ENR (TN: 3 mg/l) discharges ~2.3 lbs/yr nitrogen perhousehold, while a traditional septic system discharges ~20 lbs/yr.
  • 26. Septic BAT Upgrade Status (as of 12/31/12) Grant Awards: $63 million Grant Expenditures: $50 millionSince FY 2011, grants are awarded to Counties to implement the BAT upgrades # of BAT Septic BAT Installed: 3,758 a. Critical Areas: 2,362 b. Other Areas: 1,396
  • 27. Bay Restoration (WWTP) Fund Future: FY 2018 and Beyond• Estimated $50M/year of fee revenue available (net of revenue bond debt service) for other uses.• Statute expands the uses of the BRF (WWTP) Fund to provide grants in priority order for: ENR upgrade of minor WWTP (design flow less than 0.5 million gallons per day) Transfer funds to the BRF (Septic) Fund for permitted uses (BAT upgrades; sewer extension etc.) Stormwater BMPs where the entity has established local stormwater fees
  • 28. Maryland Department of the EnvironmentMaryland Water Quality Financing Administration 1800 Washington Boulevard Baltimore, MD 21230 410-537-3119 www.mde.state.md.us/wqfa 1800 Washington Boulevard | Baltimore, MD 21230-1718 410-537-3000 | TTY Users: 1-800-735-2258 www.mde.state.md.us