Virginia’s Tributary Strategies May 19, 2005 Citizens Advisory Committee

1. Virginia’s Tributary Strategies May 19, 2005 Citizens Advisory Committee Russ Baxter, Asst. Secretary of Natural Resources

2. Tributary Strategy: Past Actions • March 2003 – Allocations Agreed to by CBP Partners • April 2003 - Water Quality Criteria Published (EPA) • June 2003- March 2004 – VA Tributary Team activity • April 2004 Public Comment Drafts Released for Comment Period

3. Tributary Strategy: Past Actions • August 27, 2004 Point Source Revisions Announced by Secretary Murphy • James and York allocation awaiting final WQ standards • Use of Capacity with Stringent Treatment • January 2005 – Statewide document released

9. Regulatory Proposals: Point Source • Water Quality Standards • updated, site specific use categories • criteria for dissolved oxygen, water clarity/SAV & chlorophyll ADOPTED 3/15/2005 except numerical chlorophyll criteria for James River and dissolved oxygen for Mattaponi and Pamunkey Rivers • Regulation for Nutrient Dischargers • sets technology-based nutrient concentration limits for certain discharges Public Comment Period ended on April 25 • Water Quality Planning Regulation • allocates nutrient loads for significant discharges within each river basin as identified through Tributary Strategies • establishes trading and offsets program Public Comment Period ended on April 25

10. General Assembly Actions Affecting Tributary Strategies • Nutrient Credit Trading • Amendments to the Water Quality Improvement Act • House Joint Resolution 640 • Amended Biennial Budget

11. Nutrient Credit ExchangeHB 2862 SB 1275 • SWCB to develop “Watershed General Permit” that contains “WLA” for each facility • Point Source Loads Capped • Allows technology limits - Allows trading within basins for those facilities covered by the permit • Authorizes Establishment of Nutrient Credit Exchange Association

12. Trading and Other Provisions • Trading allowed between point sources in a river basin to achieve watershed WLA in accordance with General Permit • No inter-basin trading • Trading allowed to achieve annual compliance under certain circumstances • Nonpoint “offsets” for new and expanding plants

13. WQIA AmendmentsHB 2777 SB 1235 SB 810 • Updates Act (“C2K” and “tributary strategy plans”) • Statement of Policy “It shall be the be the policy of the General Assembly to provide annual its share of support ….” • Requires DEQ to sign grant agreements with significant dischargers • Requires recommendations on “sufficient and predictable” funding by November 2005

14. WQIAAmendments (con’t) • “Sliding Scale” for point source grants from 35% to 75% based on a ratio • Additional “priorities” – Agricultural Practices, Pounds of Reduction

15. WQIF Funding Distribution • Appropriation and Surplus: Appropriation goes to PS, Surplus 70/30 to NPS/PS ( 30 PS for PPEA and “state of the art”) • Surplus and no appropriation or appropriation less than 40% of surplus: Secretary makes division between PS and NPS (unless budget bill does) • Surplus and appropriation greater than 40% of surplus: Appropriation to PS and 70/30 NPS Maximum 60% of nonpoint to Bay Watershed REMEMBER: Budget Bill Trumps All

16. House Joint Resolution 640 • “study options to provide a long-term funding source to clean up Virginia's polluted waters, including the Chesapeake Bay and its tributaries.” • 8 members = 4 House, 2 Senate (including Money Committee Chairs) plus Secretaries of Natural Resources and Agriculture and Forestry

17. 2005 – 2007 NPS InitiativesDCR – Lead Agency • Accelerate agricultural BMP usage 2. Expand Nutrient Management Planning and Implementation 3. Expanded Stormwater Management Law 4. Strengthen Erosion & Sediment Control Implementation • Strengthen Chesapeake Bay Act Implementation • Enhance NPS Tracking system 7. Target Public Outreach efforts

18. WQIF Funding: How Does it Add Up? • Adopted biennial budget appropriate $15 million in each year of the biennium to the WQIF (½ Point, ½ Nonpoint) • Governor’s Budget Amendments - $32.4 from the surplus that existed on June 30, 2004 • Final Budget: $50 million for point source – adjustment to surplus ($32.4) to 70% nonpoint 30% point

19. How Does It Add Up? $15,000,000 $32,000,000 $50,000,000 $97,000,000* *in the second year of the beinnium, beginning July 1, 2005

20. Point/Nonpoint Split Point Source: $50 + $9.7 + $7.5 less reserve = $65.7 (+ $4 million for CSO) Nonpoint: $22.7 + $7.5 less reserve = $26.4

21. Key Tributary Strategy Practices All Basins • Point Source Reductions • Nonpoint Source Practices: - Nutrient Management Planning (Ag., Urban and Mixed Open) - Cover Crops - Conservation Tillage - Pasture Grazing BMPs

22. KEY TRIBUTARY STRATEGY PRACTICES(NPS reductions) • Cover Crops 10% TN • Conservation Tillage 6% TN 18%TP • Pasture Grazing BMPs 9% TN 14% TP • Nutrient Management (NM) • Ag 20% TN 13% TP • Urban 2% TN 2% TP • Mixed Open 2% TN 3% TP • Overall NM24% TN 18% TP

23. Point Source and Nonpoint Source Costs and Nutrient Reductions by Source Category NOTE: 1. Nonpoint source costs do not include technical assistance, outreach, and administration costs – amount to ~ 10% to 20% of capital cost 2. Point source figures are planning level, order-of-magnitude cost opinions, accurate from -30% to +50%

24. Tributary Strategy CostsWhy did they change? 1. Change in practices 2. Annual costs/household vs. capital costs per practice 3. Multiple installation costs 4. Operation and maintenance costs 5. Technical assistance costs

25. May 02, 2004 Another day at the ballpark late in the game

26. “Evolution” of Cost Estimates • Initial cost estimates developed for the Chesapeake Bay Program (CBP). These estimates served as the basis for the initial Virginia estimate of $3.2 billion and Blue Ribbon Panel. • Point Source Cost estimates remain the same • Nonpoint estimates used CBP as a starting point adjusted estimates using program experience and best professional judgement by DCR

27. “Evolution” of Costs Estimates (con’t) • The Blue Ribbon Panel aggregated costs prior to the completion of our analysis and used a best guess. • The numbers we have developed are the last estimates we will do. We will focus now on actual costs and budgets. • The estimates presented here willchange as program implementation continues.

28. “State Costs” vs “Other Costs” • “State Costs” are those cost that would be reasonably borne by the Commonwealth based on existing programs and past practice. • “Other Costs” include private/local share of state cost share programs, regulatory requirements, voluntary efforts, etc.

29. State $ Costs Other $ Costs* Total Agriculture $624 M $235 M $859 M Urban $290 M $7,229M $7,519 M Mixed Open $381 M $13 M $394 M Forest $0 $2.3 M $2.3 M Septic $4 M $78 M $82 M Total $1,300 M $7,557 M $8,857M Estimated NPS Costs * Includes regulatory requirements, local government and landowner costs.

30. Estimated TMDL and Ches Bay TS Costs TMDL (Bay non TS) = $4.2 billion TMDL (Non Bay) = $1 billion TS $8.8 billion x .07* = $6.2 billion TS Point Source = $1.1 billion Total $12.5 billion** * Estimated 30% cost efficiency ** Total cost, we have not yet done “state cost “ analysis for non TS components

31. Estimated Virginia State Government Tributary Strategy Cost “Bottom Line” Calculated for point and nonpoint Tributary Strategy Implementation by 2010: $1.8 BILLION

32. Tributary Strategies:What’s Next?? • Complete water quality standards adoption • Establish final allocations for York and James • Revise WQIF grant guidance • Act on current point source rulemakings following close of comment period • Promulgate Watershed General Permit • On the ground NPS activities in each basin: Tributary Teams, Building Partnerships with local governments and others.

33. See the Tributary Strategies Pageat: www.naturalresources.virginia.gov