Urban BMP Incentive Study (HJR 107) And Other Interesting Legislative Items Delegate David Bulova August 10, 2007

The Urban Challenge Virginia’s Tributary Strategy lays out an aggressive plan that calls for the installation and maintenance of BMPs on 74% of available urban lands. More than 80% of Northern Virginia was built prior to water quality controls.

HJR 107 Could a program similar to Virginia’s agricultural BMP program be effective for promoting urban retrofit? What are other states doing in this area? What are the potential costs and benefits of such an approach? Are there other options that could more effectively achieve the same goal?

Technical Advisory Committee DCR formed TAC in January, which included representatives from: –Virginia Soil and Water Conservation Districts –Department of Taxation –Department of Forestry –DCR-CBLA –HRPDC –Local governments –HBVA –Private engineering consultants Have met three times to-date.

Challenges – No Shortage of Them Urban BMPs are less cost-efficient: –Phosphorus reduction is 25 times more expensive per pound than agricultural phosphorus reduction. Incentive programs aimed at residential property are very resource intensive. –On average, one farm is equivalent to 476 average single family properties – an administrative nightmare.

Challenges Incentive programs aimed at large- scale commercial property are more administratively efficient. –However, the estimated cost of retrofitting a 50-acre commercial tract ranges from approximately $168,000 to $636,000. An easy conclusion is that cost-share and tax credits would need to be very large to be economically attractive.

And yet… Chesapeake Bay restoration goals are not achievable without addressing the urban component – no matter how expensive, inefficient, etc.

Neighboring Programs Kentucky provides low interest loans through the Revolving Loan Fund. Maryland provides up to 75% of the cost through three cost-share programs. They also utilize the Revolving Loan Fund. North Carolina has a Water Management Trust Fund that provides competitive grants. Pennsylvania has Growing Greener, which is funded through bond initiatives and waste disposal fees. Tennessee and West Virginia don’t have specific urban programs.

Discussion Points A multi-tiered funding approach to urban stormwater is being discussed. –Competitive grants awarded directly to localities with flexibility to apply to high- efficiency targets of opportunity. –Other states have had success with using low-interest capital loans. –Access to the Virginia Clean Water Revolving Loan Fund could be used to help “jump start” local watershed plans.

Discussion Points Regardless of approach, an adequate, predictable, and stable source of funding is needed. –In 2007, the WQIF had $3.5 million available for its competitive grants program. –73 proposals, totaling $8 million, were submitted. –As a result, Virginia left more than $12 million in potential cost-share unutilized.

Discussion Points Stable funding would also provide incentives for local capacity building. –With secure funding, localities may be more willing to invest in staff and capacity. –Multi-year grants would allow more flexibility and encourage innovation. Local government buy-in is considered critical. –A dedicated funding source is seen an integral to better participation.

Recommendations One more meeting of the TAC is anticipated. The final report will be available by November 2007.

The 2007 Session – A Wild Ride 129 bills were introduced in House AC&NR in The Session was literally a rollercoaster for water resources issues: –HB3113 proposed to consolidate waste, water, and air boards. –CSOs nearly succeeded in gobbling up non- point source BMP cost-share funding (SB1301). –The Governor’s open space conservation initiative was cut in half. –$250 million was approved to upgrade waste- water treatment facilities.

The 2007 Session – A Wild Ride Many bills never saw the light of day: –44 bills never made it out. –HB2663 would have increased penalties to reduce commercial fertilizer runoff in urban areas.

Expect More in 2008 Weakening budget forecast will mean that WQIF will not get automatic revenue from surpluses. –10% of the budget surplus is the WQIF’s only dedicated revenue source. –Competition for General Fund will be fierce.

Concluding Remarks