ENVIRONMENTAL PROTECTION AGENCY
       ENVIRONMENTAL FINANCIAL ADVISORY BOARD
                     STRATEGIC ACTION AGENDA
                            Fiscal Years 2004-2005
BACKGROUND

The nation has made huge investments in, and significant progress toward, controlling pollution
discharges and restoring environmental quality. Much of the credit for this success is due to EPA's
use of regulatory and enforcement tools, and to the transfer of significant resources from the federal
government to state and local governments to help construct environmental infrastructure.

Two trends challenge our ability to maintain and improve our standard of environmental quality.
First, needs and expectations for environmental protection continue to grow.  Second,  federal
deficits, tax reduction initiatives,  and growing overall demands on state resources constrain
traditional public sources of environmental funding. The result is an increasing tension between the
costs of environmental protection and the resources available to meet those costs.

To address these environmental and resource  challenges in a sustainable manner, EPA will need to
consider the full  range of finance-related alternatives available. This effort will include traditional
regulatory and enforcement tools and federal assistance programs.  It will also require innovative
projects and technologies, improved efficiencies, creative financing techniques,  and leveraged
public-private partnerships.

The Environmental Financial Advisory Board (EFAB) and Environmental Finance Center (EFC)
Network look to be an integral part of this  EPA effort.  EFAB is chartered under the Federal
Advisory Committee Act to advise EPA on environmental finance issues, options,  proposals, and
trends.  EFAB seeks practical ways of lowering costs and increasing investments in public purpose
environmental facilities and services. The EFC Network consists of nine university-based programs
that deliver traditional and innovative financial outreach services to the regulated communities.

EFAB is supported by EPA's Office of the Chief Financial Officer, headed by  Linda Combs.
EFAB's Chair is the Honorable Lyons Gray of North Carolina.  Its Executive Director and
Designated Federal Official is A. Stanley Meiburg, Deputy Regional Administrator, Region 4. At
the beginning  of each fiscal year, EFAB updates its Strategic Action Agenda. EFAB's plans and
operations are aligned with the major environmental goals presented in EPA's strategic plan.

EPA GOALS AND EFAB ISSUES

EFAB's work for Fiscal Years 2004-2005 is organized in support of the five major thematic  goals
laid out in EPA's Strategic Plan 2003-2008:

1.      Clean  Air and Global Climate Change Protect and improve the air  so it is healthy to

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       breathe and risks to human health and the environment are reduced. Reduce green house gas
       intensity by enhancing partnerships with businesses and other sectors.

2.      Clean and Safe Water  Ensure drinking water is  safe.  Restore and maintain oceans,
       watersheds, and their aquatic systems to protect human health, support economic and
       recreational activities, and provide healthy habitat for fish, plants, and wildlife.

3.      Land Preservation and Restoration Preserve and restore the land by using innovative
       waste management practices and cleaning up contaminated properties to reduce risks posed
       by releases of harmful substances.

4.      Healthy Communities and Ecosystems Protect, sustain, or restore the health of people,
       communities, and ecosystems using  integrated and comprehensive  approaches  and
       partnerships.

5.      Compliance and Environmental Stewardship  Improve environmental performance
       through compliance with environmental requirements, preventing pollution, and promoting
       environmental stewardship. Protect human health and the  environment by encouraging
       innovation and  providing  incentives for governments, businesses, and  the public that
       promote environmental stewardship

In its own strategic planning process, EFAB annually applies these thematic EPA goals  in the
context of the requirement in its charter to provide advice and recommendations on the following
issues:

•      Reducing the cost of financing environmental facilities and discouraging polluting behavior;

•      Creating incentives to increase private investment in the provision of environmental services
       and  removing  or  reducing constraints on  private  involvement  imposed  by current
       regulations;

•      Developing new and innovative environmental financing approaches and supporting and
       encouraging the use of effective existing approaches;

•      Identifying approaches specifically targeted to small community financing;

•      Assessing government strategies for implementing public-private partnerships, including
       privatization, operations  and maintenance  issues,  and  other alternative financing
       mechanisms;

•      Improving governmental principles of accounting and disclosure standards and how they
       affect environmental programs;

•      Increasing the  capacity of state and local  governments to  carry  out their respective

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      environmental programs under current Federal tax laws;

•     Increasing  the  total  investment in environmental protection of public  and private
      environmental resources to help ease the environmental financing challenge facing our
      nation; and

•     Removing  barriers and increasing  opportunities for  the  U.S.  financial services and
      environmental goods and services industries in other nations.

Based on these goals and objectives and input from the Agency, EFAB develops its Strategic Action
Agenda describing the workgroup structure and listing completed, ongoing, and new projects. Each
citation gives the project title, lead workgroup, the Agency's strategic plan goal, and the primary
customer to be served. Given the number, scope, and nature of the issues, six workgroups are taking
the lead in developing projects for consideration and approval by the Full Board.

CURRENT EFAB PROJECTS

      *     Joint Operations of the State Revolving Fund Programs:  Chaired by  Sonia
             Toledo, Lehman Brothers, New York, NY

      *     Partnership and Collaboration of Non-Point Source Financing: Chaired by
             Langdon Marsh, National Policy Consensus Center, Portland  State University,
             Portland, OR

      *     Affordability Issues:    Co-chaired by  John McCarthy, Northeastern  Rural
             Community Assistance Program Solutions, Winchendon, MA  and Dr.  Andrew
             Sawyers, Maryland Department of the Environment, Baltimore, MD

      *     Innovative Financing Tools: Chaired by Michael Curley, The International Center
             for Environmental Finance, Lutherville, MD

      *     Preventing Future Non-Funded Abandoned Sites: Co-chaired by  A. James
             Barnes,  Indiana University,  Bloomington,  IN and Mary Francoeur, Financial
             Guaranty Insurance Co., New York, NY

      *     Useful Life of Financing Water Facilities: Chaired by George Butcher, Goldman
             Sachs & Co., New York, NY
STATUS OF EFAB PROJECTS (FY 2003-2004)

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                          Completed Projects FY 2003

5.     Financial Checklist for Consent Decrees. Consultation, February 2003

            EPA Strategic Goal:  Compliance and Environmental Stewardship
            Primary Customer: Office of Enforcement, Compliance and Assurance

2.     Protecting America's Land Legacy: Stewardship Policies, Tools, and Incentives. Report,
      February 2003

            EPA Strategic Goal:   Compliance  and Environmental Stewardship,  Land
            Preservation and Restoration
            Primary Customer: Agency

3.     Government Accounting Standards Board (GASB) Statement 34. Letter Report, July 2003

            EPA Strategic Goal:  Clean and Safe Water, Land Preservation and Restoration,
            Primary Customer: Office of Water

4.     Environmental Management Systems.  Letter Report, July 2003

            EPA Strategic Goal:  Various
            Primary Customer: Office of Water

5.     Coordination of EPA and VSDA Water and Sewer Loan Assistance. Report, August 2003

            EPA Strategic Goal:  Clean and Safe Water
            Primary Customer: Office of Water

                           Ongoing Projects FY 2004

1.     Joint Operations of the SRF Programs

            EPA Strategic Goal:  Clean and Safe Water
            Primary Customer: Office of Water

2.     Partnership and Collaboration of Non-Point Source Financing

            EPA Strategic Goal:  Clean and Safe Water, Healthy Communities and
            Ecosystems
            Primary Customer: Office of Water
                             New Projects FY 2004
1.     Affordability Issues

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             EPA Strategic Goal: Clean and Safe Water, Compliance and Environmental
             Stewardship
             Primary Customer: Office of Water

2.      Transportation Financing Tools

             EPA Strategic Goal: Clean and Safe Water
             Primary Customer: Office of Water

3.      Preventing Future Non-Funded Abandoned Sites

             EPA Strategic Goal: Land Preservation and Restoration, Compliance and
             Environmental Stewardship
             Primary Customer: Office of Solid Waste and Emergency Response

4.      Useful Life of Financing Water Facilities

             EPA Strategic Goal: Clean and Safe Water
	Primary Customer: Office of Water	

•      This strategic action agenda is a flexible planning tool and it will be revised and updated
       during the fiscal year as needed. Any revisions will be shown on the Board's home page at:
       http ://www. epa. gov/efmpage/efab .htm

•      The next meeting of the Full Board is scheduled for March 9-10, 2004 in Washington, DC.
       The primary purpose of this meeting is to report on the progress of the various Board
       projects  and to hear the views of, and interact with, senior-level Agency mangers.

•      The next summer meeting of the Full Board is  scheduled for August 16-17, 2004 in San
       Francisco, CA.   The primary purpose  of this meeting is to discuss progress with work
       products under EFAB's current strategic action agenda and to develop an action agenda to
       direct the Board's ongoing and new activities.

•      EF AB members also contribute their time to assisting other EPA initiatives, most notably the
       Environmental  Finance  Center (EFC)  Network.  The EFC Directors serve as expert
       witnesses to the Board and provide key  assistance to EFAB. The home page for the EFC
       Network is: www.epa.gov/efmpage/efc.htm

•      Your comments are important and welcome.   Please call or  e-mail Vanessa Bowie,
       Environmental    Finance   Program    Team    Leader   at   (202)   564-5186   or
       bowie.vanessa@epa.gov.

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