United States
                   Environmental Protection
    Office of Water
  February 1996
 vvEPA     Why Watersheds?
   Increasingly, State and Tribal water resource
   professionals are turning to watershed man-
   agement as a means for achieving greater
results from their programs. Why? Because
managing water resource programs on a water-
shed basis makes good sense  environmentally,
financially, and socially.

Better Environmental Results
  Because watersheds are defined by natural
hydrology, they represent the most logical basis
for managing water resources. The resource
becomes the focal point, and managers are able to
gain a more complete understanding of overall
conditions in an area and the stressors which
affect those conditions.

Traditionally, water quality improvements have
focused on specific sources of pollution, such as
sewage discharges, or specific water resources,
such as a river segment or wetland. While this
approach may be successful in addressing spe-
cific problems, it often fails to address the more
subtle and chronic problems that contribute to a
watershed's decline. For example, pollution from
a sewage treatment plant might be reduced
significantly after a new technology is installed,
and yet the local river may still suffer if other

   North Carolina was able to monitor
   nearly  40 percent more waters with the
   same level of effort after monitoring
   was conducted on a more coordinated
   watershed basis.

factors in the watershed, such as habitat destruc-
tion or polluted runoff, go unaddressed. Water-
shed management can offer a stronger foundation
for uncovering the many stressors that affect a
watershed. The result is management better
equipped to determine what actions are needed to
protect or restore the resource.

Saving Time and Money
 Besides the environmental pay-off, watershed
approaches can have the added benefit of saving
time and money.  Whether the task is monitoring,
modelling, issuing permits, or reporting, a water-
             shed framework offers many
             opportunities to simplify and
             streamline the workload. For
             example, synchronizing monitor-
             ing schedules so that all monitor-
             ing within a given area (i.e., a
             watershed) occurs within the
             same time frame can eliminate
             duplicative trips and greatly
             reduce travel costs. North Caro-
             lina was able to monitor nearly 40
             percent more waters with the
             same level of effort after monitor-
             ing was conducted on a more
             coordinated watershed basis.

         Improving Environmental
       Management on Idaho Dairies
     The job of assuring environmental safeguards
     on 1,400 dairy farms has become much more
  efficient and effective in the State of Idaho as a"
  result of a new working relationship between
  EPA, the State Departments of Environmental
  Quality (IDEQ) and Agriculture (ISDA), and the
  Idaho Dairy Association. Historically, EPA has
  only managed to inspect about 5 percent of
  dairies with its limited enforcement resources.
  However, under the new arrangement, ISDA
  inspections of milk quality will be expanded to ,
  include waste management practices. In addition,
  inspectors will work to educate farmers about
  water quality and how to best achieve protection.
  Because all dairies are visited annually, the
  opportunity for identifying and addressing waste
  management problems will be significantly
  greater. This arrangement maintains EPA
  enforcement authority to intervene, as necessary,'
  in cases where public health or environmental
  quality are at risk.
Efficiency is also increased once all agencies with
natural resource responsibilities begin to work
together to improve conditions in a watershed. In
its truest sense, watershed protection engages all
partners within a watershed, including Federal,
State, Tribal and local agencies. By coordinating
their efforts, these agencies can complement and
reinforce each others' activities,
avoid duplication, and leverage
resources to achieve greater results.

Data collection is one activity that is
particularly ripe for greater coopera-
tion and coordination. For example,
a State can reduce its own monitor-
ing costs by factoring in the moni-
toring activities of the U.S. Environ-
mental Protection Agency (EPA),
the U.S. Geological Survey, the
National Oceanic and Atmospheric
Administration, and the National
Resource Conservation Service. In
addition, permittees and other
stakeholders that generate ambient
monitoring data can form basin monitoring
consortiums to pool resources and provide the
State with greater consistency in collecting and
reporting data.

Greater Public Support
  Watershed protection can also lead to greater
awareness and support from the public. Once
individuals become aware of and interested in
their watershed, they often become more involved
in decision-making as well as hands-on protec-
tion and restoration efforts. Through such in-
volvement, watershed approaches build a sense of
community, help reduce conflicts, increase com-
mitment to the actions necessary to meet environ-
mental goals, and ultimately, improve the likeli-
hood of success for environmental programs.

  As the primary Federal agency with responsi-
bility for protecting and restoring the nation's
waters, EPA has opportunities to advance water-
shed protection.  In recent years, considerable
effort has been invested in streamUning program
administoitive requirements that hinder watershed
approaches and in developing useful watershed
tools and services.  This publication highlights
EPA's actions for the benefit of water resource
managers interested in adopting watershed
approache s more broadly.


Reducing Reporting Requirements
  EPA and the States are transitioning to a five-
year, watershed-based monitoring and reporting
cycle to replace the two-year Clean Water Act
(CWA) Section 305(b) cycle now in effect. Under
this scheme, States identify their waterbodies and
assess water quality conditions in all watersheds
over a five-year period. Each year, core informa-
tion would be electronically reported for those
watersheds assessed according to the State's
schedule; a report characterizing conditions in the
entire State would be produced every five years
and aggregated into a national report.

EPA anticipates that this change will give States
greater freedom to concentrate on monitoring and
assessing watershed conditions and will reduce
the time spent on reporting, resulting in a more
comprehensive assessment of national water
quality conditions.

The first five-year cycle will begin in 1996, and
the resulting National 305(b) report will be
released in 2002. In the interim, States will
provide annual water quality updates to EPA via
the modernized STORET data base.

Simplifying Wetlands Permitting
  States can use watershed planning to help
simplify the CWA Section 404 wetlands regula-
tory program in several ways. First, Advanced
Identifications or similar watershed planning tools
can identify areas within the watershed as either
suitable or unsuitable for development, improving
the predicitability of permitting decisions. Sec-
ond, watershed plans can lead to greater use of
general permitting. General permits substantially
decrease the time necessary for individual permit
review. The CWA allows use of general permits
to authorize activities that have only minor indi-
vidual or cummulative environmental impacts.
Impacts can be evaluated best when a complete
understanding of all resources and conditions
within the watershed is available.
Third, watershed plans can facilitate collective
wetlands permitting procedures among govern-
ment agencies. Such collective permitting allows
local, State, regional, and federal permitting to be
processed in tandem to avoid duplicative require-
ments and unnecessary delays.


EPA is administering CWA grant programs in
ways that encourage watershed protection.

Nonpoint Source Grants
  EPA has changed the nonpoint source grants
program (CWA Section 319) to provide more
flexibility to States to focus on high priorities
within watersheds.  Under new guidance cur-
rently being developed by EPA hi close coopera-
tion with the States, each State would identify
waters and their watersheds that are impaired by
nonpoint source pollution and identify important
unimpaired waters that are threatened or other-
wise at risk because of nonpoint sources. Each
State would establish a process to progressively
address these identified waters by developing
more detailed watershed assessments and water-
shed implementation plans and then begin imple-
menting the plans. States can use Section 319
funds to support these activities.

State Revolving Fund Loans
  EPA is working with the States to determine
how the State Revolving Loan Fund (SRF) (CWA
Section 604(b)(3)) can be used to better support
watershed protection activities. Traditionally the
SRF has been used to finance municipal sewage
treatment plant projects. However, in recent
years, States have been using the SRF to fund a
variety of other water quality projects including
nonpoint source, estuary, habitat restoration, and
stormwater projects.

EPA and the States are currently negotiating a
framework to improve planning and priority

setting and clarify eligibilities under the SRF
program. The framework, if adopted, would
make it possible for States to expand their flex-
ibility even further in making SRF funding deci-
sions while ensuring that critical State water
quality objectives continue to be addressed.

Watershed Planning Grants
   States may use funds from their CWA Section
604(b) planning grants to develop a state water-
shed planning framework and individual water-
shed plans and to conduct assessments of envi-
ronmental conditions that are essential to effective
watershed planning.

National Estuary Program Grants
  EPA, under CWA Section 320, provides
substantial financial and technical resources
through the National Estuary Program (NEP) to
help protect and restore valuable estuarine water-
sheds. Once selected,  these areas receive Federal
funding for three to five years to support a con-
sensus-based management process that includes
representatives of major stakeholders.  The
process includes technical and management
characterizations of the estuary and its watershed;
identification of pollutant sources, impacts, and
trends; and then the establishment of priorities for
actions to correct those problems identified.
NEPs also receive support to demonstrate imple-
mentation of these actions. The NEP is often
regarded as a model for how to implement a
watershed management approach, and areas
developing or implementing watershed plans have
an advantage when competing for designation in
the program.

Increased Grant Flexibility
  In FY 1996, if authorized by Congress, EPA
will begin to offer Performance Partnership
Grants (PPGs) to eligible States and Tribes. A
PPG is a multi-program grant made to a State or
Tribal agency from funds otherwise available for
categorical grant programs. PPGs are intended to
provide States and Tribes with greater flexibility
to address their highest environmental priorities,
improve environmental performance, achieve
administrative savings, and strengthen partner-
ships between EPA and the States or Tribes.

A State or Tribe can combine funds from two or
                 more of sixteen categorical,
                 environmental grant pro-
      _-   -    ,  grams into one or more
                 PPGs.  PPGs can fund any
                 activity that is within the
                 cumulative eligibilities of the
                 16 categorical grant pro-

                 Through PPGs, States can
                 combine funding from eli-
                 gible grants to target high
                 priority problems and address
                 multi-media problems within
                 the States' watersheds. States
                 that combine categorical
                 grants into PPGs must con-
                 tinue to address the core

program requirements which those grants are
meant to support. A final approved PPG will be
the result of negotiations between the State and its
EPA Regional Office.

Allowances for NPDES Permit Backlogs
  EPA is allowing States that are reorienting
programs on a watershed basis to have short-term
backlogs on NPDES permit review -- without
penalty. This flexibility gives States time to
synchronize the reissuance of major and minor
permits within a watershed. By managing
NPDES permits on a watershed basis, all the
permits for discharges to the waterbody can be
coordinated and the most efficient and equitable
allocation of pollution control responsibility can
be made.

Longer Cycles for NPDES Permits
  EPA suppports legislative changes to the CWA
that would allow States who are implementing
watershed management plans to issue NPDES
permits for up to 10 years in place of the current
5-year cycle. This longer cycle would reduce the
resource burden of reissuing permits known to be
adequately protective of human health and the

Longer Cycles for Issuing Water
Quality Standards
  Similarly, EPA supports legislative changes to
the CWA that would allow States to review and
issue water quality standards over a five-year
timeframe in place of the current three-year cycle.
This cycle would allow States to synchronize
standard review and, if appropriate, revision with
overall watershed plans that include five-year
cycles for monitoring and reporting. The longer
cycle would free the States to spend more time
and resources on higher priority activities.

Facilitating Changes in Agency Waste
and Pesticide Programs
  EPA is providing greater management flexibil-
ity to States in administering various media
programs if States have Comprehensive State
Ground Water Protection Programs (CSGWPPs).
CSGWPPs, which reflect the same principles as a
watershed approach for surface waters, call for

States to define ground water uses, values, and
vulnerabilities. Rather than developing separate
plans under various environmental statutes, EPA
is allowing the CSGWPPs to be used for priority
setting and management purposes in other media
efforts. For example, CSGWPPs can be used as a
basis for selecting appropriate ground water
clean-up remedies
under Superfund and
for setting priorities for
site assessments under
Superfund and RCRA.
The Underground
Over 100 large cities and smaller towns
have already taken advantage of this
flexibility [in the Surface Water Treat-
ment Rule] to avoid the expenses of
filtration, while implementing compre-
hensive watershed protection programs.
Storage Tank Program
is using CSGWPPs in
making decisions about inspections and enforce-
ment priorities and actions.

Avoiding Filtration of Drinking
Water Supplies
  The Surface Water Treatment Rule requires
public water systems to filter their water supplies   Mitigation Banks
of filtration, while implementing comprehensive
watershed protection programs.

Less Monitoring Under Safe Drinking
Water Act
  EPA has modified drinking water monitoring
                   and reporting requirements
                   to allow States to grant
                   waivers from those require-
                   ments if an assessment of
                   risks in the watershed
                   demonstrates that contami-
                   nation by certain pollutants
                   is unlikely. Communities
that receive waivers can reduce their monitoring
and reporting costs by 50-90 percent.  State
agencies also realize savings because their
oversight costs are reduced.

Facilitating Use of Wetlands
to remove pathogenic microbiological contami-
nants. However, if a water supply meets certain
source water quality criteria and the community
has a watershed program in place that sufficiently
protects against these contaminants, EPA allows
exemptions from the filtration requirements.
Public water suppliers that qualify for these
exemptions can avoid the expense of constructing
and operating filtration plants. Over 100 large
cities and smaller towns have already taken
advantage of this flexibility to avoid the expenses
                          EPA, in conjunction with other Federal agen-
                        cies, has published guidance on how to establish
                        and operate mitigation banks for wetlands. When
                        established within the context of a watershed
                        management plan, these banks can help commu-
                        nities balance the need for development with the
                        need for effective wetlands protection. By
                        establishing an overall watershed plan, communi-
                        ties can expect greater success with compensa-
                        tory mitigation projects and a faster, simpler
                        permitting process.
                           West Eugene, Oregon Mitigation Bank
    A  s part of their comprehensive wetlands
  XXmanagement plan, the City of Eugene, Oregon,
  will utilize mitigation banking as me primary means
  of compensating for impacts to wetlands resulting
  from necessary development activities. Under this
  approach, the most suitable sites are identified,
  acquired, and wetlands restored in advance of the
  wetlands impacts. To satisfy mitigation require-
  ments, developers who operate in compliance with
  the wetland management plan can simply purchase
                       ' credits froiri the mitigation bank, Jhus eliminating v -
                        the uncertainty associated with case by case
                        permitting and saving valuable time and resources.
                        Because the bank is planned and develpped as a   -
                        whole, restored v^etlands can be incorporated into a
                       ^comprehensive plan that will enhance existing
                        wildfife habitat, more effectively manage storm ,'
                        water runoff, and provide additional open space
                        and a^ecreational opportunities.

Facilitating Use of
Effluent Trading
  EPA has endorsed effluent trading
and is developing a handbook to
assist those communities that would
like to implement trading programs
more aggressively. By allowing
dischargers to take advantage of
various economies of scale and
treatment efficiencies, effluent
trading can lead to a more cost-
effective achievement of water
quality goals. Estimated cost sav-
ings for the regulated community
range from the hundreds of millions
to the billions of dollars. EPA
recognizes that watershed manage-
ment plans are an essential step in developing and  and a watershed management plan is the most
implementing effluent trading programs.           logical means for generating this type of informa-
                                              tion. EPA issued its trading policy in January
Effluent trading requires a complete understand-    1996 and expects to release a draft handbook later
ing of all pollution sources affecting a watershed,   in the year.


30S(b) Report
Assessment and Watershed Protection Division
U.S. EPA (4503F)
401 M Street, SW
Washington, DC 20460
(202) 260-7040
(202) 260-1977 (FAX)

Wetlands Permitting and Mitigation Banking
Wetlands Division
U.S. EPA (4502F)
401M Street, SW
Washington, DC 20460
(202) 260-7791
(202) 260-2356 (FAX)

General Wetlands Issues
Wetlands Information Hotline
(800) 832-7828

Nonpoint Source Grants
Assessment and Watershed Protection Division
U.S. EPA (4503F)
401 M Street, SW
Washington, DC 20460
(202) 260-7040
(202) 260-7024 (FAX)

State Revolving Fund and 604(b) Grants
Municipal Support Division
U.S. EPA (4204)
401 M Street, SW
Washington, DC 20460
(202) 260-7359
(202) 260-1827 (FAX)

National Estuary Program
Oceans and Coastal Protection Division
U.S. EPA (4504F)
401 M Street, SW
Washington, DC 20460
(202) 260-1952
(202) 260-9960 (FAX)
Performance Partnership Grants
Office of Water
U.S. EPA (4101)
401 M Street, SW
Washington, DC 20460
(202) 260-5700
(202) 260-5711 (FAX)

NPDES Permits
Permits Division
U.S. EPA (4203)
401 M Street, SW
Washington, DC 20460
(202) 260-9545
(202) 260-1460 (FAX)

Water Quality Standards
Standards and Applied Science Division
U.S. EPA (4305)
401 M Street, SW
Washington, DC 20460
(202) 260-7301
(202) 260-9830 (FAX)

CSGWPP and Source Water Protection
Ground Water Protection Division
U.S. EPA (4602)
401 M Street, SW
Washington, DC 20460
(202) 260-0732 (FAX)

Safe Drinking Water Act Monitoring
Drinking Water Implementation Divsion
U.S. EPA (4604)
401 M Street, SW
Washington, DC 20460
(202) 260-3874
(202) 260-3464 (FAX)

Effluent Trading
Assessment and Watershed Protection Division
U.S. EPA (4503F)
401 M Street, SW
Washington, DC 20460
(202) 260-7040
(202) 260-7024 (FAX)