Workshop on State and EPA Tools and Strategies for Implementing Performance-based Programs

1. Workshop on State and EPA Tools and Strategies for Implementing Performance-based Programs “Using Performance Partnership Agreements and Grants to Institutionalize and Fund State Leadership Programs” Jack Bowles, EPA January 23, 2006

2. Indicators Initiative Report on the Environment Performance Measures Effective Oversight Information Exchange Network The Environmental Delivery System: Partnering for Results with States, Tribes, and Local Governments Regional Plans EPA Strategic Plan Performance Partnership Grants & State Grants Better Protected Land Cleaner Air, Purer Water Performance Partnership Agreements State & Local Innovation

3. The National Environmental Performance Partnership System Vision Achieve environmental results through performance-based partnerships that focus on agreed-upon priorities and take best advantage of the unique capacities of each partner The Principles • Maintain core level of environmental protection • Make continuous environmental improvements • Plan together based on mutual environmental goals • Allocate resources to highest priorities while ensuring fiscal and programmatic accountability (PPGs) • Use mix of environmental indicators and program measures • Facilitate public understanding • Tailor oversight based on state performance

4. PPG History and Highlights • Four pilots in 1995 to create administrative savings give states flexibility to achieve greater environmental results. • Appropriations authority and Agency guidance in 1996. Codified in EPA’s grant rules in 2001. • States and tribes can combine up to 19 categorical grants into one multimedia grant. • PPGs and categorical grants are subject to the same administrative requirements • Now EPA’s largest state program grant. In FY 05: • About 30% ($346 million) of state program grant funds were awarded in PPGs. • Around 70 PPGs have been awarded in 50 States and territories, mainly to environmental and agriculture agencies. • PPGs and Performance Partnership Agreements (PPAs) are two key tools for driving results in state grant agreements. • States have used flexibility at the margin – demonstrated benefits have been anecdotal and mostly qualitative. • The major issue facing PPGs is same as for all state grants – demonstrating results and linking clearly to EPA’s strategic plan.

5. Flexibility to Address Priorities Performance Partnership Grants (PPGs) Partnership principles are built into the EPA’s grant rule governing all state and Tribal environmental program grants; the rule provides for a range of flexibility • All State/Tribal Program Grants • Link program activities to program outcomes and environmental goals • Provide some flexibility to direct resources to state/tribal priorities within a program • Performance Partnership Grants (PPGs) • Allow states/tribes to combine up to 19 categorical program grants into a single • multi-program grant • Provide flexibility to achieve maximum environmental results. • All PPGs provideadministrative flexibility and reduced costs • Streamlined paperwork and accounting procedures • Composite match requirements rather than by individual program • Easier funding of cross-cutting and multi-media projects • In the most flexible use of a PPG, a state/tribe can increase efforts in some program • areas and decrease them in others based on need; or fund innovative programs • to maximize environmental results.

6. Trends in Performance Partnerships1997-2004 Performance Partnership Grants Performance Partnership Agreements State Environmental Agencies State Agriculture Agencies

7. Distribution of State and Tribal Assistant Grant FundsFY 2004 $3,877 Million Total 5% 8% 35% 30% 22% • In FY 04, About 30% ($326 million) of • categorical grant funds were awarded in PPGs.

8. the average # of grants combined in environmental agency PPGs has remained stable at 6-7 Grants Included in Performance Partnership GrantsState Environmental & Agriculture AgenciesFY 2004 Total # of PPGs = 68

9. Use of Flexibility in Performance Partnership GrantsState Environmental Agencies FY 2004 MS – used funds from CAA 105, CWA 106, RCRA enforcement to conduct multi-media inspections in high priority watersheds NH- tapped water grants to fund increasing wetlands work, and the lakes program, which had lost funding Total PPGs = 39 NE - used excess state air & water funds to meet state match for RCRA, which had insufficient state funds CO – used funds from multiple programs to supplement PWSS program to provide emergency support to water systems impacted by forest fires/drought

10. PPAs, State Grants, and Innovation • It makes a difference whether one includes innovation language in the strategic section of a PPA or the body of a state grant workplan. • Non-workplan PPAs (or the non-workplan sections) do not usually have binding commitments. • PPG and categorical workplans usually commit the state (and sometimes Region) to certain outputs or outcomes. • For states and regions that are developing innovation programs, inclusion in just the PPA or other joint priorities document could be a useful approach. • For more mature efforts, developing grant outputs and outcomes may be appropriate, and could provide the innovation with access to core program funding. • Innovation commitments could be stand-alone, or integrated into core program workplan commitments.

11. Likelihood that Integration Workgroup Recommendations on PT and Performance Leadership Programs Will Be Implemented Based on Type and Characteristics of Grant Agreements Lower Chance of Success Higher Chance of Success Individual Media Individual Media Program PPA/PPG with less PPA/PPG with high flexibility, Program Grants Grants/ Some type of an up-front flexibility multimedia focus (R8, CO) agreement with the RA Characteristics Characteristics Mostly output measures Greater number of outcome ! ! measures Single Media, Stovepipe ! PT/PB Programs are often given ! Only commitments with STAG ! higher priority for funding $ have a chance States can more easily negotiate w/ ! PT/PB programs last in line to ! EPA to fund PB programs get $ States work out their own turf issues ! Media turf issues greater at ! Federal level Range of Flexibility in State Grants

12. PPGs and State Grants: Institutionalizing Innovation • The need to demonstrate results and show links to EPA’s strategic goals is changing state grants – common templates, core performance measures and workplan components. • These changes can provide an opportunity to better institutionalize and fund innovation programs in PPAs, PPGs, and categorical program grants. • For Innovation programs to be included successfully in grant workplans, they likely will have to demonstrate results comparable or even superior to core or base program activities. • We need the common currency (measures) or the conversions (functional equivalence) that will enable success. . .