v>EPA
United States    • " ' * Office Of
Environmental Protection    Water
Agency     .     (4204-M)
EPA-832-R-01-003
March 2001
        Development Selection and
        Pilot Demonstration of
        Preliminary Environmental
        Clean Water State
        Revolving Loan Program
       Volume 1: Task Force Report

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CWSRF:
Rich Deringer
Kong Chiu

EPA Headquarters:
Needs Survey:
Lisa Christ
Environmental Indicator Task Force Membership
                 November 2, 1999

                            States:

                            Ohio:
                            Greg Smith
                            Bob Monsarrat
                            Theresa Gordon
Office of Planning. Analysis, and
Accountability:
Anita Street
Arden Calvert (alternate)

Index of Watershed Indicators:
Karen Klima
Susan Holdsworth (alternate)
Margarete Heber (alternate)

Office of Wetlands. Oceans, and Watersheds:
Chuck Spooner
Otto Gutenson

AA/Water. Policy and Resource Management
Office
Anne Treash

Office of Science and Technology
Mahesh Podar

Office of Sustainable Ecosystems. Policy
Coordination Division
Michael Mason

Office of Wastewater Management. Permits
Division
KelleyVolak
EPA Region
                            California:
                            Bryan Brock

                            Texas:

                            Mark Hall
                            George Green
                            Clyde Bohmfalk

                            New Jersey:
                            Theresa Fenton
                            Karen Schaffer
                            Scott Shymon

                            Michigan:
                            Chip Heckathorn

                            Utah:
                            Walter Baker
                            Bryan Atwood
Brian Friel
EPA Region IX:
Juanita Licata

EPA Region V:
LulaSpruill

EPA Region IV:
Betty Barton

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Table of Contents

Volume I

Executive Summary	i

Chapter 1. Introduction	1-1
Background  	I'l
The Clean Water State Revolving Loan Fund (CWSRF) Program	1-2
Funding Summary	1-2
CWSRF Indicator Development and Implementation	1-6

Chapter 2. Identification of Environmental Indicators for Pilot Testing	2-1

Chapter 3. State Pilot Projects to Test the CWSRF Environmental Indicators	3-1
Selection of States	.. 3-1
Analysis Type	• •	3-1
State Pilot Project Summaries	•	3-2
Other States  	• • 3~5

Chapter 4. Evolution of Environmental Indicators  	4-1

Chapter 5. Observations and Recommendations  	4-1
Observations Related to Data	4-1
Observations Related to Programmatic Issues	4-2
Recommendations Related to Data	4-3
Recommendations Related to Programmatic Issues  	-.	4-4

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 List of Tables

 Table 2-1.  Evolution of CWSRF Indicators from Draft 1998 Report to Pilot Testing 	2-1
 Table 3-1.  Partial Summary of State Pilot Projects 	3-1
 Table 3-2.  Partial Summary of California Analysis	,..	3-2
 Table 3-3.  Partial Summary of Ohio Analysis	3-3
 Table 3-4.  Partial Summary of Texas Analysis	3-3
 Table 3-5.  Partial Summary of New Jersey Analysis	3-4
 Table 3-6.  Partial Summary of Utah Analysis 	3-5
 Table 3-7.  Partial Summary, of Maryland Analysis 	.3-6
 Table 4-1.  Evolution of CWSRF Indicators from Draft 1998 Report Through Pilot Testing
           Process and Final Proposed Indicators	4-1

 List of Figures

 Figure 1. Percent of $26.1 Billion Total CWSRF Assistance (1988-1999) by Category	1-4
 Figure 2. Percent of Yearly Total CWSRF Funding for Eight Categories of Wastewater
         Treatment	1-5
 Figure 3. Percent of Yearly Total CWSRF Assistance Funding for Collection and Treatment
         Projects  	1-5
Volume II

Introduction
Appendix A.
Appendix B.
Appendix C.
Appendix D.
Appendix E.
Appendix F.
Appendix G.
Appendix H.
Force Membership
Generic Scope of Work for Pilot Project
Pilot Project Data Entry Questionnaire
Pilot Project Data Summary
State Reports on Pilot Project Experience
Ohio Pilot Project Specific Examples
Ohio EPA Biological Indicators
Ohio EPA Sampling Fact Sheet

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                                 Executive Summary
Environmental indicators have been under development at the U.S. Environmental Protection
Agency (EPA) for more than a decade. Government-wide programs such as the Government
Performance Review Act and National Environmental Performance Partnerships, as well as the
environmental goals and milestones of EPA's Strategic Plan, establish the need for outcome-
based measures like environmental indicators.  EPA conducted a feasibility analysis, developed a
methodology, and identified available resources for developing environmental indicators and
applying them to the Clean Water State Revolving Fund (CWSRF) program in 1998.  EPA's
Office of Wastewater Management established a federal-state Task Force to propose and oversee
the pilot feasibility testing of a series of environmental indicators specific to the CWSRF
program. Participating states cooperated in testing a range of environmental indicators to
determine the feasibility of the indicators and their applicability to their respective state CWSRF
programs.

This report presents the findings of the Task Force, which evaluated a preliminary set of
environmental indicators developed for the CWSRF.  Pilot testing was used as an approach to
evaluate whether data exist to support the selected indicators, and how easy or difficult it is to
apply the data to the environmental indicators.  Based on the findings of this pilot testing,
recommendations are presented on how to proceed with the development and application of
environmental indicators to the CWSRF (i.e., to continue with or eliminate one or more of the
pilot indicators). California, Ohio, and Texas were selected to conduct environmental indicator
pilot projects.  Michigan, New Jersey, and Utah also agreed to participate as pilot states. Each
state reviewed a subset of its projects funded through  the use of the CWSRF and applied
environmental indicators to ascertain whether it could measure or otherwise reflect
environmental improvement as a result of the implementation of the proj ects.

Following initial conference calls, the Task Force members revised, developed, and discussed six
indicators.  The states then conducted pilot projects to test as many of the proposed indicators as
they could apply to CWSRF projects in each of their respective states. Next, states modified the
indicators resulting in the following suite of final indicators:

(1) Actions funded by CWSRF programs.  The Task Force recommends using this indicator as
an indirect measure of the contribution state CWSRF  programs make to achieving Clean Water
Act objectives because this indicator would be useful  in situations where there is an absence of
any other information regarding CWSRF-financed projects;

(2) Number of pounds of pollutants removed from the environment through CWSRF-funded
projects (Point source oriented).  This indicator is suitable for projects with influent and effluent
data available.  The indicator may also be used where pollutant loading levels in the receiving
stream are quantified and are expected to decrease as a result of the CWSRF-funded project.  It
has remained consistent in focus throughout the indicator development stages;

(3) Number of pounds of pollutants prevented from entering the environment through CWSRF-
funded projects. This indicator is proposed as a prevention measure.  It is suitable for projects

March 2001                                                                              i

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 that aim to reduce loading "to" or within a treatment facility, expand plants to handle increased
 population, and address nonpoint sources of pollution;

 (4) Physical changes to the terrestrial, riparian, or aquatic habitat and hydrology as a result of
 CWSRF-funded projects. This indicator is proposed for the category of CWSRF-funded projects
 that cannot be measured by load reduction or projected load prevention. Habitat destruction and
 hydromodification are major causes of aquatic life impairment, surpassing organic enrichment
 and dissolved oxygen impacts in some states.  This indicator measures changes in land use (such
 as a change in agricultural tillage practices or restoration of a riparian stream corridor) and other
 attributes of the physical environment that could affect the aquatic community;

 (5) Waterbodies, expressed as river and riparian miles, lake acres, estuary square miles, and
 wetland acres, previously impaired, now improved or meeting designated uses, as a result of
 CWSRF-funded projects. This indicator proposes to measure water quality conditions in terms
 of designated uses for a distinct subset of waterbodies, impairment is quantified and reported as
 not meeting water quality standards and designated uses.

 (6) Waterbodies, expressed as river and riparian miles, lake acres, estuary square miles, and
 wetland awes, protected as a result of CWSRF-funded projects. This indicator has a clear focus
 on protection of unimpaired resources; and

 (7) Reduced health risks and/or increased recreational use attributable to CWSRF-funded
 projects. The indicator is important because it monitors a Clean Water Act objective. The data
 used for this indicator should be collected by a regulatory agency or collected hi a manner that is
 subject to quality assurance and quality control procedures to ensure their accuracy. Problems in
 using this indicator occur when sampling is lacking or inadequate to draw conclusions. Ideally,
 bacteriological samples should be taken during low seasonal flows and at strategic locations, and
 the sampling should be done before and after project completion.

 The Task Force report covers both data and programmatic observations and recommendations. It
 was observed that some states have suffered budget cutbacks hi the area of environmental
 monitoring, including ambient monitoring. A lack of environmental baseline data undermines a
 state's ability to directly measure environmental improvements that could be evident as a result
 of implementing environmental programs  and improvements such as the CWSRF. Without
 ambient monitoring data, states that conduct only limited water quality monitoring would be
 hardpressed to demonstrate actual environmental improvements as a result of environmental
 infrastructure improvements through CWSRF funding. In order to document environmental
 improvement, the Task Force believes that more data are needed to support environmental
 indicators for nonpoint source (NPS) projects.  A broader scope of data types beyond traditional
 water quality parameters would be appropriate to better demonstrate environmental improvement
 from CWSRF-funded projects.

 Under programmatic issues it was observed that environmental data  at the project level are not
 reported or tracked by most states, and none of the information is reported to EPA. States do not
 have procedures in place to collect information on environmental outcomes related to CWSRF
projects, or on whether they were the result of the combined efforts of many programs. There are

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 a wide variety of approaches at the state level that could be used to report on environmental
 improvements associated with CWSRF-funded projects.

 The environmental indicators identified in this report represent the start of an evolutionary
 process. As the states gain experience in trying to measure environmental progress by using
 those indicators, additional or revised indicators are likely to surface, and use of geographic
 information systems to detect progress is expected to be expanded. Additionally, determination
 of total maximum daily loads and other monitoring efforts are likely to increase the amount of
 information that is available. Because of the diversity among the states, the environmental
 indicators are presented as a "suite" of indicators to be used at each state's discretion according
 to its individual needs.
March 2001
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Chapter 1. Introduction

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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	

 Chapter 1. Introduction

 Background

 Environmental indicators have been under development at the U.S. Environmental Protection
 Agency (EPA) for more than a decade. Environmental indicators have been defined in many
 ways: as biological, chemical, or toxicological constituents of the environment that define risk
 levels; as trend measurements that describe improving or degrading conditions; and as
 mechanisms to demonstrate the effectiveness of environmental projects and programs. Initially,
 EPA environmental indicators were an outgrowth of the need for comprehensive and up-to-date
 environmental assessment information used for internal planning and budgeting. More recently,
 indicators have been recognized as an important tool for measuring and communicating
 environmental progress and for demonstrating progress and accountability. Government-wide
 programs such as the Government Performance Review Act and National Environmental
 Performance Partnerships, as well as the environmental goals and milestones of EPA's Strategic
 Plan, establish the need for outcome-based measures like environmental indicators.

 In 1998 EPA conducted a feasibility analysis, developed a methodology, arid identified available
 resources for developing environmental indicators and applying them to the State Revolving
 Fund (CWSRF) program.  This resulted in publication of a draft report, Environmental
 Indicators for the Clean Water State Revolving Fund (EPA 832-D-98-002). One of the
 recommendations of the report was that EPA should establish a workgroup with significant state
 and regional participation to continue the development and implementation of indicators.
 Another recommendation was to adopt a process to shape the development of indicators in a
 stepwise manner that would clearly articulate EPA's desire for states to shift CWSRF funding
 toward NFS, estuary, and wetland projects.  The report also made the observation that traditional
 CWSRF projects may employ a set of environmental indicators different from those that pertain
 to NFS and wetland projects.

 In response to these recommendations, EPA's Office of Wastewater Management established a
 federal-state Task Force to propose and oversee the pilot feasibility testing of a series of
 environmental indicators specific to the CWSRF program.  The Task Force, which consists of
 representatives from six CWSRF programs, four EPA regions, and eight EPA water program
 offices, has participated hi monthly conference calls since January 1999.  In addition to
 participating in conference calls, participating states cooperated in testing a range of
 environmental indicators to determine the feasibility of the indicators and their applicability to
 their respective state CWSRF programs.

 The purpose of this report is to present the findings of the Task Force, which evaluated a
 preliminary set of environmental indicators it developed for the CWSRF. Pilot testing is being
 used as an approach to evaluate whether data exist to support the selected indicators, and how
 easy or difficult it is to apply the data to the environmental indicators. Based on the findings of
 this pilot testing, recommendations are presented on how to proceed with the development and
 application of environmental indicators to the CWSRF (i.e., to continue with or eliminate one or
 more of the pilot indicators).
March 2001
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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	

 This chapter provides background information on the CWSRF pilot indicator project, discusses
 the CWSRF program, and summarizes funding.  CWSRF indicator development, Task Force
 membership, and steps for applying the pilot environmental indicators to the projects also are
 outlined in the chapter.  Chapter 2 explains the proposed pilot environmental indicators.  Chapter
 3 discusses how states were selected to conduct pilot projects and summarizes state approaches.
 Also included in Chapter 3 are segments written by individual states, detailing their experience
 and their successes and failures while conducting pilot indicator projects. Finally, Chapter 4
 presents succinct findings and recommendations from the states as a result of their work on the
 CWSRF pilot environmental indicators.

 The State Revolving Loan Fund (CWSRF) Program

 The Nation has invested billions of dollars on wastewater infrastructure. In 1972 Congress
 established the Construction Grants Program to provide  grants to assist local governments in
 constructing wastewater treatment facilities.  The federal grants constituted a large percentage of
 the funding for these projects.  In  1987 the grant program began a phaseout with a transition to a
 state revolving loan program.  States now receive CWSRF capitalization grants, which are
 matched at a rate of one state dollar for every five federal dollars. Loans are then made by the
 states for eligible projects and activities.  Repayments on the initial loans are reloaned, thus
 establishing the "revolving" nature of the CWSRF program.

 The states have considerable flexibility to develop and operate CWSRF programs that meet their
 particular needs. Two types of federal requirements are  imposed on state CWSRF programs:
 "cross-cutting" authorities, which  are the environmental, economic, and social policy
 requirements that apply to all federal grant programs (e.g., equal employment opportunity,
 participation by minority-owned businesses) and CWA Title II requirements (which include
 federal wage rate requirements, value engineering, cost-effectiveness requirements, and so forth).
 Title II requirements apply to only those projects wholly or partially financed before fiscal year
 1995  with funds directly made available by federal capitalization grants.

 Despite outstanding progress since 1972 in reducing water pollution and restoring our rivers,
 lakes, and coastal water, serious water pollution problems persist. About 40 percent of the
 nation's waterways assessed by states are still unsafe for fishing and swimming. A continued
 federal financial commitment will be necessary to meet the promise of clean, safe water for all
 Americans. This is particularly true as states continue to expand use of the CWSRF to address
 estuary, storm water, and NPS pollution management projects to preserve past water quality
 gains and strengthen our future efforts.

 Funding Summary

 The EPA Office of Wastewater Management tracks the financial performance of projects funded
through the CWSRF. During the period 1988 to 1999, the CWSRF program provided
approximately $26.1 billion in assistance to a variety of projects throughout the nation. Of this
total, approximately 95 percent of the CWSRF funding was used to support wastewater
treatment-related projects for publicly owned treatment works (POTWs), about 4 percent of the
funding was directed to nonpoint source projects, and less than 1 percent went to estuary  projects
(Figure 1).  Although the latter two categories of projects represented 20 percent of the number

1-2                                                                           March 2001

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              Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators
                                                   Nonpoint Source
                                                       3.9%
                                      Storm Sewers
                                          0.2%
                       Combined Sewer Overflow
                             Connection
                               6.4%
                    New Interceptor Sewers
                           12.5%
                  New Collector Sewers
                         7.0%
           Rehabilitation of Sewer Systems
                     5.7%
                 Infiltration/Inflow Correction
                          3.2%
Estuaries
  1.1%
                                                                                       Secondary Treatment
                                                                                            45.1%
                                   Advanced Treatment
                                         14.9%
       Figure 1. Percent of $26.1 Billion Total CWSRF Assistance (1988-1999) by Category.
March 2001
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	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators  	

of projects funded by the CWSRF program, the projects tended to be of much smaller scale than
the wastewater treatment-related projects. For example, the average wastewater treatment
project used $3.71 million of CWSRF funds, whereas the average nonpoint source project
received $1.06 million and the average estuary project only $550,000. It also should be noted
that five states—Delaware, Minnesota, Ohio, New Jersey, and Wyoming—accounted for almost
84 percent of all of the nonpoint source projects. Only Washington State used CWSRF funding
for estuary projects.

Wastewater treatment-related projects accounted for over half of the CWSRF funding. These
monies were allocated among the following eight categories of projects: secondary treatment,
advanced treatment, infiltration/inflow correction, rehabilitation of sewer systems, new collector
sewers, new interceptor sewers, combined sewer overflow correction, and storm water/storm
sewers. Secondary treatment projects accounted for over one-half of the total funding ($11.79
billion), followed by advanced treatment ($3.9 billion) and new interceptor sewers ($3.28
billion).  Storm sewer projects accounted for only $46.4 million of the funding compared to
approximately $1.5 billion each for combined sewer overflow, new collector sewers, and
rehabilitation of sewers. Finally, funding for infiltration/inflow correction totaled approximately
$846 million.

Figure 2 presents the change in percentage of total 1988 to 1999 CWSRF funding dollars by
year.  Figure 3 compares the percentage of CWSRF assistance allocated between treatment
(advanced and secondary) and collection (new interceptor sewers and new collector sewers)
projects.
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March 2001

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               Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators
         0.70
                                                                            4  Secondary Treatment
                                                                          -•-Advanced Treatment
                                                                          -A— Mteation/MowGcKiection
                                                                          -*- Rehabilitation of Sewer Systems
                                                                          -*- New Collector Sewers
                                                                          -O->few Interceptor Sewers
                                                                          —I— Combined Sewer Overflow Correction
                                                                          -ff-StomiSeweis
       .  0.00
              1968  1989  1990 1991 1992 1993 1994 1995  1996  1997  1996  1999
  Figure 2. Percent of Yearly Total CWSRF Funding for Eight Categories of Wastewater Treatment.
      0.90
                                                                                         - Collection (New Collector
                                                                                          and New Interceptor Sewers)
                                                                                         -Treatment (Advancedand
                                                                                          Secondary)
     0.00
           1988  1989  1990  1991  1992  1993  1994  1995  1996  1997  1998  1999
Figure 3. Percent of Yearly Total CWSRF Assistance Funding for Collection and Treatment Projects.
 March 2001
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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	

 Most CWSRF agreements have focused on areas where the population served is less than 10,000,
 although these projects represent only 21 percent of the total CWSRF funds provided. Projects
 in large population centers (areas with population greater than 100,000), on the other hand,
 represent only 12 percent of the agreements but received 44 percent of the funding.

 Although the CWSRF is a loan program, not a grant program, it provides a substantial subsidy to
 communities through discounted interest rates on the assistance provided.  The loan principal
 repayments and interest payments are made available for future projects and represent
 approximately 14 percent of the total funds available.

 CWSRF Indicator Development and Implementation

 A Task Force (subgroup of the State/EPA Clean Water State Revolving Fund Work Group) was
 created to investigate the development of environmental indicators for potential use in the
 CWSRF program. The Task Force includes 15 to 20 participants (listed in Appendix A) who
 have worked on this assignment one or two days per month since January 1999. Members were
 drawn from states, EPA regions, and EPA headquarters. Their objective was to develop a set of
 indicators mostly drawn from a preliminary list developed by Tetra Tech, Inc., and as contained
 in Environmental Indicators for the Clean Water State Revolving Fund, and to pilot test a set of
 environmental indicators for the CWSRF program.

 California., Ohio, and Texas were selected to conduct environmental indicator pilot projects.
 Michigan, New Jersey, and Utah also agreed to participate as pilot states. Each state reviewed a
 subset of its projects funded through the use of CWSRF and applied environmental indicators to
 measure environmental improvement as a result of the implementation of the projects.
 Information also is included from an effort to gather data from several other states for use in
 testing the feasibility of the indicators. This effort met with only limited success.  The
 environmental indicators for the CWSRF program selected to be pilot tested are presented below.
 Note that these environmental indicators are not ranked, and their presentation in this order does
 not reflect relative priorities.

 •   Number of pounds of pollutants removed from the environment through CWSRF-funded
    projects.
 •   Number of pounds of pollutants prevented from  entering the environment through CWSRF-
    funded projects.
 •   Increase in biophysical benefits or reduction in biophysical stressors by changing land use
    practices and resource harvesting and extraction  practices through CWSRF-funded projects.
 •   Waterbodies, expressed as river and riparian miles, lake acres, estuary square miles, and
    wetland acres, previously impaired, now meeting designated uses as a result of CWSRF-
    funded projects.
 •   Waterbodies, expressed as river and riparian miles, lake acres, estuary square miles, and
   wetland acres, protected or improved as a result of CWSRF-funded projects.
 •  Benefits  of reduced health risks and/or increased recreational use attributable to CWSRF-
   funded projects.
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March 2001

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  	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

  The Task Force used the first four meetings (conference calls) to review, revise, and comment on
  the environmental indicators as they could be applied to the CWSRF program. An informal
  rating and evaluation format was produced and applied by each Task Force member to the six
  proposed environmental indicators to do this preliminary evaluation. Ultimately, however, it was
  agreed that further refinements to this language should await the states' experience during the
  actual pilot testing phase. Chapter 2 provides a more detailed discussion of each proposed
  environmental indicator.

  The objective of this pilot phase was to examine more closely the feasibility of measuring
  environmental outcomes and making linkages back to the CWSRF program activity with the
  proposed environmental indicators.  The pilot states investigated and reported on the availability
  of data and the mechanisms (systems) to provide those data.  States received a generic scope of
  work (Appendix B), which was intended to help establish consistency among the pilot projects
  and allow the results to be compared more consistently.

  The steps of the generic scope of work included the following:

  1. Identification of Type and Scope of Projects to Evaluate
  States determined the type and number of CWSRF projects to be evaluated.  Each state used a
  consistent methodology to identify its own projects, although this methodology differed between
  states.

 2. Data Collection
 States searched electronic and paper  databases and project files  to collect baseline data on each
 CWSRF project. The purpose of this task was not only to collect the necessary data to apply
 each indicator, but also to document  the ease or difficulty of collecting the data. Data collected
 for each selected project would encompass project-specific information as well as the
 environmental data related to the project. Water quality conditions before and after project
 implementation are critical environmental data sets.

 The states were asked to document data collected using data source criteria, including

 •  Availability/accessibility of data (ease of acquiring information; were data out there?)
 •  Temporal coverage (period of time the data covered?)
 •  Spatial coverage (latitude/longitude, watershed, stream length)
 •  Technical credibility (quantity, diversity, robustness; comfort level with the data)

 One tool used for managing collected project data was a questionnaire, which was available to
 states online and in hard copy (Appendix C). The web-based questionnaire was presented hi
 three successive pages entitled Project Information, Indicator Information, and Data Information.
 A respondent could enter information for one project at a time, continuing through the three
 pages for each project. Upon entry of the last input screen, the data were stored in a database.

 3. Data Synthesis and Analysis
 All data collected were synthesized in tabular or other format for display and analysis. Types of
 CWSRF-funded projects were tallied  along with water quality and environmental condition data.
March 2.002
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          Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators  	

The analyses of the results are presented in brief written descriptions from New Jersey,
Michigan, California, Ohio, Utah, and Texas, with discussions on validity/accuracy, data
comparability, and scope/applicability. Finally, results of assessing the data from the states that
Tetra Tech evaluated (Delaware, Maryland, and Washington) also are presented.

4. Indicator Evaluation
The environmental indicators applied in each state were evaluated. A brief narrative is presented
about the application of the environmental indicator against the following evaluation criteria:

    Data sources
    Data quality/quantity
    Data availability (how available;, how long did it take to evaluate and compile the data?)
    Data accessibility
    Representativeness
    Comparability
    Cost-effectiveness
    Ease of implementation

5. Reports
Each state prepared and submitted a written report on its findings.  Recommendations about how
to best incorporate data requirements and identification of any barriers to using or accessing data
were included in the narrative. Chapter 3 presents a summary of results of the states'
participation in the environmental indicator pilot project. Appendix D provides a more detailed
summary of states' projects and the full state reports are presented in Appendix E and F.
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Chapter 2. Environmental Indicators for the Clean Water SRF Program

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           Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators
  Chapter 2.   Environmental Indicators for the Clean Water SRF Program

  Introduction

  This chapter presents, in tabular format, the environmental indicators identified in the 1998 EPA
  Report "Environmental Indicators for the Clean Water State Revolving Fund" and describes the
  environmental indicators, based on this report, that were developed by the Task Force for pilot
  testing by the participating states. The results for each state's experience with the pilot set of
  indicators are presented in Chapter 3. The final set of environmental indicators is found in
  Chapter 4.

  Table 2-1. Evolution of CWSRP Indicators from Draft 1998 Report to Pilot Testing
bet0tH^1$&6 indicators
•rff'f'' '' N
1. Pounds of pollutants removed from the environment
through CWSRF-funded projects.
2. Pounds of pollutants prevented from entering the
environment through CWSRF-funded projects.
3. Reduction in biophysical stressors by changing land
use practices, resource harvesting practices, and
resource extraction practices through CWSRF-funded
projects.
4. Waterbodies, expressed as river and riparian miles,
lake acres, estuary square miles, and wetland acres,
previously impaired, now meeting designated uses, as
a result of CWSRF-funded projects
5. Waterbodies, expressed as river and riparian miles,
lake acres, estuary square miles, and wetland acres,
protected, improved, or restored as a result of CWSRF-
funded projects.

j^riH9*& Pilot JmiMicMtt' ' \v'* ' ""
1 . Number of pounds of pollutants removed from the
environment through CWSRF-funded projects. (Point
source oriented)
2. Number of pounds of pollutants prevented from
entering the environment through CWSRF-funded
projects. (Oriented toward NPS or no discharge)
3. Increase in biophysical benefits or reduction in
biophysical stressors by changing land use practices,
and resource harvesting and extraction practices
through CWSRF-funded projects.
4. Waterbodies, expressed as river and riparian miles,
lake acres, estuary square miles, and wetland acres,
previously impaired, now meeting designated uses, as
a result of CWSRF-funded projects.
5. Waterbodies, expressed as river and riparian miles,
lake acres, estuary square miles, and wetland acres,
protected, improved, or restored as a result of
CWSRF-funded projects.
6. Benefits of reduced health risks or increased
recreational use attributable to CWSRF-funded
projects.
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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

 Indicator Development
 1. Number of pounds of pollutants removed from the environment through CWSRF-funded
 projects.

 This indicator is suitable for projects where influent and effluent data is widely available. It may
 also apply where loading levels in a receiving stream are quantified and are expected to decrease
 as a result of the CWSRF-funded project.
 2. Number of pounds of pollutants prevented from entering the environment through
 CWSRF-funded projects.
This indicator is proposed as a prevention measure. It is suitable for projects that reduce
loadings either to or by a treatment facility, expand plants to handle increased flows, and prevent
nonpoint sources of pollution.
3. Increase in biophysical benefits or reduction in biophysical stressors by changing land
use practices, and resource harvesting and extraction practices through CWSRF-funded
projects.
In October 1998 this indicator read, "Reduction in biophysical stressors by changing land use
practices, resource harvesting practices, and resource extraction practices through CWSRF-
funded projects."  The Task Force revised the indicator in 1999 by adding the possibility of an
increase in biophysical benefits as another measure of the land use and resource extraction
practices.            .                                                       •

This indicator is proposed for the category of CWSRF-funded projects that cannot be measured
by load reduction or projected load prevention. This indicator can help quantify the wide variety
of nonpoint source, restoration, and preservation activities funded by the CWSRF.

4. Waterbodies, expressed as river and riparian miles, lake acres, estuary square miles, and
wetland acres, previously impaired, now meeting designated uses, as a result of CWSRF-
funded projects.
This indicator proposes to measure water quality conditions for a distinct subset of waterbodies
where impairment is quantified and reported as not meeting water quality standards and
designated uses.  This indicator focuses on waterbodies that were determined to be degraded to
some extent by a cause or source attributable to a problem that was remedied by a CWSRF
         I
2-2
March 2001

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  	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

  projects). The criteria that are used to determine the degradation may be the same as those used
  to establish a state's 303(d) list.  These data could include chemical, physical and/or biological
  criteria, but will vary from state to state.  Information should be available in each state's 305(b)
  water quality report as to the condition of waterbodies with respect to their designated aquatic
  life habitat uses. The problems addressed by the CWSRF project should be  clearly described in
  the  environmental assessment for that project.
  5. Waterbodies, expressed as river and riparian miles, lake acres, estuary square miles, and
  wetland acres, protected, improved, or restored as a result of CWSRF-funded projects.
  This indicator is a more comprehensive measure of ambient water quality conditions than
  Indicator 4. This indicator, as proposed, initially would be less precise by not having an
  established baseline of impairment against which to measure progress (unless the CWSRF
  project quantifies the level of impairment prior to the start of the project).

  With the current emphasis through the Total Maximum Daily Load.(TMDL) process on impaired
  waters, the group wanted to identify the importance of keeping rally attaining surface waters
  from becoming impaired. The CWSRF program should address problems that will cause
  impairments to water quality before the problems become apparent and before enforcement
  action is required. This indicator serves to focus attention on areas of attainment and the
  importance of using CWSRF resources to ensure maintenance of attainment.
 6. Benefits of reduced health risks or increased recreational use attributable to CWSRF-
 funded projects.
 The indicator is important because it monitors a Clean Water Act objective. The data used for
 this indicator should be collected by a regulatory agency or collected in a manner that is subject
 to quality assurance and quality control procedures to ensure their accuracy. Although it may be
 difficult to establish distinctions as to the degree of human health risk posed by different sources
 of pollution, the presence of indicator bacteria (e.g., E. coli, fecal coliform) associated with fecal
 matter at levels above established threshold concentrations indicates the presence of health risks
 from pathogens. If an CWSRF project addressed a source of this problem, then reduction of
 bacterial concentration subsequent to project completion would indicate that the CWSRF project
 contributed to reducing risks to human health.
March 2001
                                                                                      2-3

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Chapter 3. State Pilot Projects to Test the CWSRF Environmental Indicators

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           Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators
  Chapter 3.  State Pilot Projects to Test the CWSRF Environmental Indicators

  Selection of States

  California, Ohio, Texas, New Jersey, Michigan, and Utah participated as pilot states for the
  testing of CWSRF environmental indicators. Tetra Tech also contacted other states, including
  Delaware, Maryland, and Washington, to test the data collection process.

  Analysis Type

  Projects were selected by the pilot states on a program-wide, project-specific, or watershed/
  subwatershed-level basis. California originally proposed to evaluate a randomly selected number
  of projects (approximately 20 to 30) that were completed during the 1992 to 1993 period.  Ohio
  proposed to identify all projects funded through the CWSRF and then select for evaluation only
  those projects for which water quality and other project-specific data were available and could be
  applied to the six pilot environmental indicators.  Texas employed a subwatershed or stream
  segment approach and evaluated all projects completed within each subwatershed. Table 3-1
 gives a brief summary of state project analyses.

 Table 3-1. Partial Summary of State Pilot Projects
-.-.-. f * f vw.vs va&v*}* f '• ..
f' f»lfoi States V '
California
Ohio
Texas
Michigan
New Jersey
Utah
- - "'T^^Aaalysfe - -
program-wide
project-specific
watershed-level
program-wide
project-specific
project-specific
" N&v«f«eleva»t€WS^F^roj*cts3li^p«^ea
4
15
22
0
9
8
Other States
Delaware
Washington
Maryland
project-specific
project-specific
project-specific
0
0
4-,
March 2001
                                                                                      3-1

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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	

 State PHot Projects

 This report reflects the state evaluations of the April 1999 indicators1 and subsequent information
 collected from the states.

 See Appendix A for the state contacts and Appendix D for a detailed summary of project data for
 each state.  Appendix E contains individual state write-ups of their projects.

 California
 From a program-wide perspective, California evaluated a total of 10 to 12 projects, some of
 which were nonpoint source projects. California has collected information on four projects to
 date, all of which were related to publicly owned treatment works (POTWs) (Table 3-2).
 Different people involved in the CWSRF projects filled out questionnaires by hand to submit the
 data to Tetra Tech. Data came from the project files, health departments, regional water quality
 districts, and self-monitoring data. To date, only the self-monitoring data from POTWs are
 easily available.  These types of data satisfy Indicators 1 and 2 (loadings-related indicators). A
 cursory search for information on nonpoint source projects was not productive.

 Table 3-2. Partial Summary of California Analysis
; ^l$jja^&£^
1,2
None
5

\ •" 	 	 •:<..,
Secondary treatment
New interceptor sewers
Advanced treatment; infiltration/inflow
correction
, -ttaatartfita***'
2
1
1

Ohio
The state of Ohio has a wealth of in-stream monitoring data, including biological, physical, and
chemical data.  A total of fifteen projects were evaluated using Ohio's Water Quality Inventories,
technical and permit support documents, Water Pollution Control Loan Fund (Ohio's CWSRF)
environmental assessments and project records, water quality standards, and field notes from the
monitoring staff (Table 3-3).  These projects consisted of predominantly wastewater treatment
plant (WWTP) improvements. In general, project evaluation reflected a reduction of one or more
chemical or bacteriological pollutants to the receiving streams and a corresponding response hi
the biological communities.
       !In February 2000 two additional indicators were suggested-Indicators A and B. Ohio and New Jersey
evaluated these indicators.
3-2
March 2001

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  	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

  Table 3-3. Partial Summary of Ohio Analysis
April 1 W Iftdte*tejr t3Ml
A, 1,4,5,6
A, 1,2,4, 5,6
A, 1,4,5
A, 1,2, 4,5,6, B
A, 4, 5
I , cws»**wf*t7$i*;_ \ ;„-
WWTP improvements
WWTP improvements
Landfill; new interceptor sewers/WWTP improvements
WWTP improvements
Centralized collection system
[ ?ftti»%}r»fl»r0|*cfei-
10
i
2
1
1
  Texas
  Texas used a subwatershed or stream segment approach to identify its pilot projects. Texas
  focused on comparing the current 303(d) list to 305(b) data from 1983-1987. Texas used these
  as a before-and-after picture to identify three types of waterbodies: (1) waters previously
  impaired that are no longer impaired, (2) waters previously impaired and still impaired, and (3)
  waters previously unimpaired and currently unimpaired.

  Texas submitted data to Tetra Tech on faxed questionnaires describing waters previously
  impaired that are no longer impaired. Although the state listed the project indicator as Indicator
  1 (Number of pounds of pollutants removed from the environment through CWSRF-funded
  projects), the actual data are qualitative. For example, loadings from nutrients might have been a
  reason a stream segment was listed as impaired on the 305(b) report, and when it was listed on
 the 303(d) list as no longer impaired, it was assumed the nutrient loadings had been reduced in
 the stream segment.

 Texas later evaluated approximately 22 projects in various CWSRF project categories, ranging
 from wastewater treatment plant expansions to nonpoint source pollution projects (Table 3-4).

 Table 3-4.  Partial Summary of Texas Analysis
           1,2,4
Texas did not explicitly distinguish project type.
                                                                            22
New Jersey
New Jersey provided information on nine projects completed in 1993 and 1994, six of which
were POTWs (Table 3-5). None of the projects addressed nonpoint source pollution. New
Jersey also reviewed information on other projects that received CWSRF loans to determine if
other means to establish quantitative or qualitative information were available to support the six
pilot indicators. New Jersey also provided support for the new indicator A by evaluating state
and CWSRF funds as an indirect indicator of potential water quality improvement

Tetra Tech retrieved data from EPA's Storage and Retrieval (STORET) database system to
evaluate some of the New Jersey projects. Trends before and after projects could be identified in
March 2001
                                                                                     3-3

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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	

 only two cases for some pollutant parameters.! However, the state could not directly link the
 CWSRF as a cause of the changes, as opposed to other factors involved.

 Table 3-5. Partial Summary of New Jersey Analysis
' •> ^(yr •*>••>$• -' •• -"•-. % s A-.
%;-x-A|>^l IP$p ^Bicator^Bd^ ^
i
2
None
2
None
f €W$Jtrj>roj<*tTyj*e
Secondary treatment
Advanced treatment
Sewer replacement/rehabilitation
New collector sewers
Pump station rehabilitation/replacement
i K»)i»b0rj>l^ir«|«efs
5
1
1
1
1
Michigan
Michigan did not provide project-specific information, but did produce a detailed description of
its Priority Listing Procedure for ranking projects for which CWSRF funding has been requested.
The system relies on measures of environmental needs. Modeling is used to estimate in-stream
conditions resulting from existing discharges and those expected after project completion.  The
differences between these two simulations are used to assign funding priority to projects.

Historically, Michigan maintained an ambient monitoring network of surface water quality
sampling sites, but nearly all of these efforts have been eliminated over the past 15 years.
Discharge Monitoring Report (DMR) data are available only for permitted point source
dischargers, and no reliable sampling record of nonpermitted discharges or discharges to
groundwater is available. Hence, although the Michigan priority models simulate pre-project
conditions, they can be used for Indicators 1 and 2.

Utah
Utah originally worked with eight CWSRF projects (all point sources—treatment plants and
interceptors, as well as new systems replacing failed on-site disposal systems [septic systems])
(Table 3-6). They investigated loading reductions to support Indicators 1 and 2, but faced
challenges different from those posed to surface water discharges.  As data sources Utah relied
on DMRs (referred to as Monthly Operating Reports hi Utah), STORET data, and self-
monitoring reports from POTWs. Loadings extrapolated from septic systems were also
evaluated, but the data are less obvious than discharges to a receiving waterbody.

Utah reported on projects by using the on-line questionnaire. They provided specific loading
numbers for Indicators 1 and 2. Utah also compared a 1987 (pre-CWSRF) 303(d) list of
impaired water to the most recent list.  No information was evident to support water quality
improvement identifiable under indicators 4 and 5.
3-4
March 2001

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            Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

  Table 3-6. Partial Summary of Utah Analysis
* 4^i^i*&ttt»rtatt*
None applicable
2,4
2
2
2
2
~~~" > CW8KtP*tt!Mt1*9« '---"""
Secondary treatment (biosolids)
Advanced treatment
Secondary treatment; new collector sewers; new
interceptor sewers
Secondary treatment; new interceptor sewers
New interceptor sewers
New collector sewers; new interceptor sewers
;-- - $N*&^0f'$rQ!&!& - -
i
i
2
2
1
1
  Other States

  Delaware
  To obtain past CWSRF project information from Delaware, Terra Tech contacted the Department
  of Natural Resources and Environmental Control (DNREC). In response to questions about the
  number, type, and location of projects funded by CWSRF loans, the program manager of the
  DNREC Division of Water Resources, Financial Assistance Branch, stated that most of the
  information was related to individual homeowners and septic system replacement/repair.
  Because this is proprietary information, Tetra Tech did not pursue the information, which might
  have violated the involved parties' privacy.

 Next, Tetra Tech contacted the U.S. EPA Region 3 office in Philadelphia, Pennsylvania.  EPA
 said it did not have quantitative information on specific projects because that kind of decision is
 made only at the state level. Qualitatively, EPA  added that the CWSRF projects in Delaware
 were funded on a first-come, first-served basis, and not according to any priority system based on
 water quality needs.  EPA had access to the total amount that Delaware loaned out in its CWSRF
 program, but any information on specific projects (location, description, type) was maintained at
 the state level.

 Because Tetra Tech was able to obtain information on only one project (City of Seaford sewer
 system upgrade) and information on the majority of the projects was not available, the Delaware
 data were not particularly useful.

 Washington
 Tetra Tech developed a list of 12 specific completed CWSRF projects  in Washington State. The
 list consisted of a combination of the three types of projects (point, nonpoint, estuary) to be
 evaluated using the indicators. Target projects were chosen based on date of completion and
 project type.
March 2001
                                                                                    3-5

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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	

 The Washington Department of Ecology stated that in-depth project information was not housed
 at state headquarters and suggested that the regional office or specific project managers in the
 cities or counties where projects were completed be contacted. Contacts in the regional office of
 the Washington Department of Ecology informed terra Tech that it is likely that project
 information for completed CWSRF projects is archived off site. Access to on-site files in the
 regional office was limited due to a recent fire in the office. Attempts to contact project
 managers at the city level were largely unsuccessful.

 Maryland
 Terra Tech visited the Maryland Department of the Environment to gather information on
 CWSRF projects.  This effort was intended to test the data collection process, including the use
 of the CWSRF indicator questionnaire. Terra Tech collected  data on two POTW projects and
 two nonpoint source projects (Table 3-7). STORET data were used to evaluate ambient
 (receiving water) pollutant parameter trends for the point source projects. For one nonpoint
 source project, the Safe Drinking Water Information Database was used to represent a reduced
 potential health risk, which would be applicable to Indicator 6.

 The Maryland Department of the Environment also provided  information oh its CWSRF
 Application process, which uses an environmental information document, preliminary
 environment screening checklist, and financial loan application. The environmental information
 document requests information on the water quality/public health problems being corrected and
 the potential impacts of the project on water quality, water supply, biology, wetlands, and
 biosolids management.

 Table 3-7. Partial Summary of Maryland Analysis
•* &!&&j$fr&^&&'^ !
1,2
5
6
£W&$&yw$#ti'Ty$& '-' ' « ' -
Advanced treatment
Nonpoint source: agriculture
Secondary treatment; new collector sewers
: T&W^&yftfy^ , i
2
1
1
3-6
March 2001

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Chapter 4. Evolution of Environmental Indicators

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  	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

  Chapter 4. Evolution of Environmental Indicators

  This chapter describes the final set or suite of environmental indicators as they have evolved
  based on the states' experience in testing them on a pilot basis.
  Table 4-1. Evolution of CWSKF Indicators from Draft 1998 Report Through Pilot Testing Process
  and Final Proposed Indicators
                                                 Pilot lastfcaters'
                                      Sepiemfaer2$Q0 Final
   Administrative indicators
   •   EPA/State Actions
   •   Actions by Regulated
       Community
 February 2000 Indicator A. Actions
 funded by CWSRF programs.
 (Evaluated by Ohio only)
 1. Actions funded by CWSRF
 programs.
   1. Pounds of pollutants removedfrom
   the environment through CWSRF-
   funded projects.
 1. Number of pounds of pollutants
 removed from the environment
 through CWSRF-funded projects.
 2. Number of pounds of pollutants
 removed from the environment
 through CWSRF-funded projects.
   2. Pounds of pollutants prevented
   from entering the environment
   through CWSRF-funded projects.
 2. Number of pounds of pollutants
 prevented from entering the
 environment through CWSRF-
 funded projects.
 3. Number of pounds of pollutants
 prevented from entering the
 environment through CWSRF-
 funded projects.
   3. Reduction in biophysical
   stressors by changing land use
   practices, resource harvesting
   practices, and resource extraction
   practices through CWSRF-funded
   projects.
 3. Increase in biophysical benefits
 or reduction in biophysical stressors
 by changing land use practices, and
 resource harvesting and extraction
 practices through CWSRF-funded
 projects.
4. Physical changes to the
terrestrial, riparian, or aquatic
habitat and hydrology resulting
from CWSRF-funded projects.
                                    February 2000 Indicator B.
                                    Changes in habitat of a waterbody
                                    as a result of an CWSRF-funded
                                    project. (Changes in ambient
                                    habitat) (Evaluated by Ohio only)
  4. Waterbodies, expressed as river
  and riparian miles, lake acres,
  estuary square miles, and wetland
  acres, previously impaired, now
  meeting designated uses, as a
  result of CWSRF-funded projects.
4. Waterbodies, expressed as river
and riparian miles, lake acres,
estuary square miles, and wetland
acres, previously impaired, now
meeting designated uses, as a
result of CWSRF-funded projects.
5. Waterbodies, expressed as river
and riparian miles, lake acres,
estuary square miles, and wetland
acres, previously impaired, now
improved or meeting designated
uses, as a result of CWSRF-
funded projects.
  5. Waterbodies, expressed as river
  and riparian miles, lake acres,
  estuary square miles, and wetland
  acres, protected, improved, or
  restored as a result of CWSRF-
  funded projects.
5. Waterbodies, expressed as river
and riparian miles, lake acres,
estuary square miles, and wetland
acres, protected, improved, or
restored as a result of CWSRF-
funded projects.
6. Waterbodies, expressed as river
and riparian miles, lake acres,
estuary square miles, and wetland
acres, protected as a result of
CWSRF-funded projects.
                                   6. Benefits of reduced health risks
                                   or increased recreational use
                                   attributable to CWSRF-funded
                                   projects.
                                  7. Reduced health risks and/or
                                  increased recreational use
                                  attributable to CWSRF-funded
                                  projects.
March 2001
                                                                                                 4-1

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 	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

 Final Indicator Development
 1. Actions funded by CWSRF programs.
         I
 Although the October 1998 version of indicators included administrative indicators, they were
 dropped from the April 1999 pilot testing stage, which focused specifically on "environmental"
 indicators. Indicator 1 was re-proposed after the other pilot indicators were tested. The Task
 Force recommends using this indicator as an initial indicator of the contribution state CWSRF
 programs make to achieving Clean Water Act objectives. This indicator would be useful in
 situations where there is an absence of any other evidence regarding environmental
 improvements brought about by CWSRF-financed projects.

.The issue of measuring some CWSRF projects that did not fit under the April 1999 list of pilot
 environmental indicators arose in February 2000.  Some categories of CWSRF projects could be
 measured only by Indicator A (final Indicator 1). This indicator is the most basic measure of
 actions to improve the environment because it counts the number of funded projects. It is the
 minimal reporting indicator, and it assumes project initiations result in environmental benefits.
 The number as well as the total dollar amount funded for projects by type may also provide
 useful information for some CWSRF projects.
 2. Number of pounds of pollutants removed from the environment through CWSRF-funded
 projects.

 This indicator is suitable for projects where influent and effluent data is available. It is also
 suitable where loading levels in a receiving stream are quantified and are expected to change as a
 result of the CWSRF-funded project. Indicator 2 may also be used for projects that convert
 failing septic systems to centralized sewer systems.
3. Number of pounds of pollutants prevented from entering the environment through
CWSRF-funded projects.
This indicator is proposed as a prevention measure. It is suitable for projects that prevent
loadings either to or by a treatment facility, expand plants to handle increased flows, and prevent
NFS pollution.

•      This indicator is expected to be derived from load reductions reported by states, by using
       the Permit Compliance System database or the actual monthly Discharge Monitoring
       Reports. Load reduction projections would most likely be estimated through established
       engineering practices using modeling tools.

4-2
March 2001

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           Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators
  4. Physical changes to the terrestrial, riparian, or aquatic habitat and hydrology as a result
  of CWSRF-funded projects.
  In October 1998 this indicator read, "Reduction in biophysical stressors by changing land use
  practices, resource harvesting practices, and resource extraction practices through CWSRF-
  funded projects." The Task Force revised the indicator in 1999 by adding the possibility of an
  increase in biophysical benefits as another measure of the land use and resource extraction
  practices. In February 2000 the Task Force agreed to add Indicator B— "Changes in habitat of a
  waterbody as a result of an CWSRF-funded project. (Changes in ambient habitat)"— to
  complement the language of the previous April 1999 indicator 3.

  Indicator B was proposed in February 2000 after other pilot indicators had been reviewed.  This
  indicator would allow measurement of CWSRF project accomplishments hi terms of habitat
  improvement.  It would be particularly useful for those projects (mainly nonpoint source) whose
 main benefit is to provide habitat restoration.  The Task Force acknowledged that various types
 of physical habitat measures, such as the Qualitative Habitat Evaluation Index (QHEI) and Zig-
 Zag Pebble Count, might be useful with this indicator.

 The Task Force decided to combine Indicator B and the interim version of Indicator 4 to reach
 the June 2000 version. The final version of Indicator 4 reflects a move to categorize biophysical
 benefits or reduction in biophysical stressors as "physical changes" and move away from the
 potentially misunderstood language of "land use practices." Physical changes to terrestrial and
 in-stream habitat types now may be reported under Indicator 4.

 This indicator is proposed for the category of CWSRF-funded projects that cannot be measured
 by load reduction or projected load prevention. Habitat destruction and hydromodification are
 major causes of aquatic life impairment, surpassing organic enrichment and dissolved oxygen
 impacts in some states. This indicator measures changes in land use (such as a change in
 agricultural tillage practices or restoration of riparian stream corridor) and other attributes of the
 physical environment (such as biosolids entering the stream from a POTW) that could affect the
 aquatic community.

 •     This indicator can help quantify the wide variety of nonpoint source, restoration, and
       preservation activities funded by the CWSRFs. Coupled with Indicator 5, this indicator
       can show the effectiveness  of CWSRF-funded activities.

 •     Biological monitoring will  show effects of increased sedimentation. Macroinvertebrate
       populations decline when substrates become embedded. Absent biological data, it is
       possible to track sediment embeddedness. Used alone or hi combination with biological
       data, embeddedness can indicate the success of various types of activities/best
       management practices on aquatic habitat improvement.

March 2001                   '                                                         4.3

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          Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators
       After much discussion by the states, it was decided that this indicator is valuable because
       of the correlation between habitat quality and attainment of Clean Water Act goals.

       States are encouraged to further investigate the techniques (field surveys, Zig-Zag Pebble
       Count Method), tools (QHEI, geographic information systems), and units (acres, river
       miles, degree of embeddedness) used to measure progress under this indicator (See
       Appendix G and H).
5. Water-bodies, expressed as river and riparian miles, lake acres, estuary square miles, and
wetland acres, previously impaired, now improved or meeting designated uses, as a result of
CWSRF-funded projects.

This indicator focuses on waterbodies that were determined to be degraded to some extent by a
cause or source attributable to a problem that was remedied by a CWSRF projects).  The criteria
that were used to determine the degradation may be the same as those used to establish a state's
303(d) list. These data could include chemical, physical, and/or biological criteria, but this will
vary from state to state.  Information should be available in each state's 305(b) water quality
report as to the condition of waterbodies with respect to their designated aquatic life habitat uses.
The problems addressed by the CWSRF project should be clearly described in the  environmental
assessment for that project.

By comparing the miles impaired and degree of impairment before and after the completion of a
CWSRF project, changes in the degree of use attainment can be correlated with CWSRF-funded
projects within the range of river miles that the project influences.  In some cases,  the major
source of impairment will not be related to the CWSRF project, and so a minor improvement in
stream condition will be seen. In other cases, the problem that was addressed by the CWSRF
project may have been the only source of impairment, and so the subsequent restoration of that
waterbody segment will be entirely attributable to the CWSRF-funded activities. In still other
situations, a number of causes may have contributed to impaired water quality, all of which were
addressed, but only some of which were CWSRF-funded, and so only a portion of the improved
water quality will be attributable to CWSRF financing.

•      EPA and the states have developed an up-to-date, comprehensive  list of impaired waters
       (303(d)). Ideally, this proposed Indicator 5 could measure progress against this nationally
       established "baseline" of impaired waters. At the state and project levels, the indicator can
       be developed using state or locally generated information on water quality conditions
       without necessarily aggregating it with other states' results. Often, water data exist at the
       state or local level which might be more useful in demonstrating results.
4-4
                                                                               March 2001

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  	Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

  •      It was decided that showing improvements in the environment is important even if
        designated uses were not met. The indicator now includes measuring improved
        waterbodies that may have partially attained designated uses.

  6. Waterbodies, expressed as river and riparian miles, lake acres, estuary square miles, and
  wetland acres, protected as a result of CWSKF-funded projects.
  This indicator originally read, "Waterbodies, expressed as river and riparian miles, lake acres,
  estuary square miles, and wetland acres, protected, improved, or restored as a result of CWSRF-
  funded projects." It was determined that with the original wording there was too much overlap
  between Indicators 5 and 6. Rather than combining the two indicators into one, the group
  decided to keep improvement of unpaired waters in Indicator 5 and put protection activities in a
  different category, Indicator 6.  With the current emphasis through the TMDL process on
  impaired waters, the group wanted to identify the importance of keeping fully attaining surface
  waters from becoming impaired. The CWSRF program should address problems that will cause
  impairments to water quality before the problems become apparent and before enforcement
  action is required. This indicator  serves to focus attention on areas of attainment and the
  importance of using CWSRF resources to ensure maintenance of attainment.

  •      The Task Force felt that Indicators 5 and 6 would (1) measure key environmental
        objectives of all water protection programs, (2) help establish stronger linkages with other
        federal water programs with similar indicators and objectives, and (3)  encourage the
        development of data sets that document before-and-after conditions.

        Data from EPA's 305(b) reports, STORET, and other data systems can be used to support
        this indicator.  Project-specific information, where available, could also support the use of
        this indicator.

 •     Indicator 6 provides a means to capture some of the less traditional CWSRF activities
       that contribute to the protection and preservation of unimpacted resources, such as land
       acquisition, easement purchase, and riparian stream corridor restoration.

 The final indicator 6 removed the words "improved" and "restored." Indicator 5 will address
 improvements in waterbodies, as well as cases where waters meet designated uses.  Indicator 6
 has a clear focus on protection of unimpaired resources.
March 2001
                                                                                     4-5

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          Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators
 7. Reduced health risks and/or increased recreational use attributable to CWSRF-funded
 projects.
 The indicator is important because it monitors a Clean Water Act objective. Although it may be
 difficult to establish distinctions as to the degree of human health risk posed by different sources
 of pollution, the presence of bacteria (e.g., E. coli, fecal coliform) associated with fecal matter at
 levels above established threshold concentrations indicates the presence of health risks.  If a
 CWSRF project addressed a source of this problem, then reduction of bacteria concentration
 subsequent to project completion indicates that the CWSRF project contributed to reducing risks
 to human health.

 Sampling upstream and downstream of a POTW outfall can provide information regarding the
 plant operations with respect to bacterial contributions. If the project addressed failing septic
 systems or sewer bypasses, health department records of bacterial concentration violations in
 pools, ditches, basements, and water wells should be used if available to document the problems
 addressed.  Such locations are not considered official waterbodies, but would nonetheless pose a
 threat to human health. Frequently,  these data are not in any known database or report, but are
 often gathered on an individual project basis from local health departments. Some ambient
 stream data may be available at the state level to determine recreational use attainment.

 Problems in using this indicator occur when sampling is lacking or inadequate to allow drawing
 conclusions. Ideally, bacteriological samples should be taken during low seasonal flows and at
 strategic locations, and the sampling should be done before and after project completion.
4-6
March 2001

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Chapter 5.  Observations and Recommendations

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          Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	.,

 Chapter 5. Observations and Recommendations

 This project was conducted at the state level for the purpose of developing and testing a range of
 environmental indicators that could assist states in both setting priorities for project selection and
 demonstrating CWSRF program and project success.  Accordingly, the six environmental
 indicators identified in Chapter 2 were tested and evaluated for use by several states through the
 formation of a Task Force, which met monthly during this phase of the project. Based on the
 review, revision, and pilot testing of the environmental indicators, the Task Force submits the
 following observations and recommendations grouped broadly under the categories of "data" and
 "programmatic issues."

 Observations Related to Data

 •     Access to environmental monitoring data and other sources of information that could help
       support the use of environmental indicators is difficult and at best time-consuming when
       data are available. Many of the states discovered through this pilot project that
       identifying and accessing environmental data related to CWSRF-funded projects ranges
       from problematic to extremely difficult. Discharge Monitoring Reports submitted
       monthly by National Pollutant Discharge Elimination System permit holders.  They cover
       treatment facilities and would account for a majority of CWSRF project funds. Sources
       of monitoring data are usually collected and maintained by agencies, offices, or programs
       other than the state CWSRF lead agency, resulting in problems and time delays in
       accessing data for indicator analysis.

 •     Applying environmental indicators to CWSRF-funded projects other than wastewater
       treatment upgrades or expansions is difficult at the present time. This is due, in part, to
       the fact that many states have not funded a large number of nonpoint source (NFS)
       projects, as well as the fact that there are fewer data available for NFS pollution than for
       point sources. Lack of data to evaluate the effects of some CWSRF NFS projects may be
       a temporary problem, because as more projects are funded, one would expect the effects
       to eventually show up in water quality monitoring information.  Further, because it takes
       several years after project implementation before the benefits of NFS projects  are
       realized, there will be an additional time lag in having the benefits reflected through
       physical, chemical, and biological monitoring.

 •      Substantial modeling would be necessary to apply final Indicator 3 (Pounds of pollutants
       prevented from entering the environment from CWSRF-funded projects). This approach
       would be costly, controversial, and time-consuming to develop. In the alternative,
       nationally accepted estimation approaches might be able to establish load reductions by
       estimating reductions in loads. Estimations may be possible. The objective should be to
       get general indicators of CWSRF contributions to water quality improvement.
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           Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators

 •      Chapter 3 contains documentation on the experience from each of the state pilot projects.
        Each state presented its findings and individual recommendations. Variability between
        states was observed, with the major problem being the availability of data to support each
        environmental indicator.

 Observations Related to Programmatic Issues

 •      The CWSRF Program information tracking system traditionally has used fiscal measures
        (e.g., number of loans initiated per year) to evaluate program performance.  The current
        CWSRF information tracking system contains a significant source of information
        regarding the amount of capitalization funds provided to states and, together with states'
        matching funds, the funds available for projects.  Environmental data at the project level
        are not reported or tracked by most of the states, and none of the information is compiled
        and submitted to EPA.

 •      Within a state, decisions on funding of projects through the CWSRF are often driven by
        factors other than environmental protection or improvement. The projects on a state's
        priority list are included on the list because of the state's objective to improve or expand
        wastewater treatment or otherwise achieve water quality benefits. Projects often receive
        loans regardless of their location on a state's priority funding list, however,  because of
        their "readiness to proceed."  Although EPA has encouraged states to keep the funds
        moving and to initiate as many projects as possible, use of CWSRF indicators provides
        an opportunity to integrate environmental outcomes into the state priority ranking
        process.

 •      Measurement or collection of data to document environmental improvements directly
        related to CWSRF projects does not follow a standard operating procedure.  States do not
        have procedures in place to collect information on environmental outcomes related to
        CWSRF projects, or whether they were the result of the combined efforts of many
        programs. In defense of the states, they have not been requested or required to collect
        such data in the past.

 •       Although some states can correlate trends with CWSRF projects, currently available
        environmental monitoring data collected by many states do not necessarily help to assess
        CWSRF outcomes because the monitoring was not designed for such purposes.
       However, it may be possible to correlate water quality changes with CWSRF projects
       when states have monitoring data (biological, chemical, bacteriological, and/or physical).
       Even though the monitoring was not designed to evaluate the success of the CWSRF
       program, much of the 303(d) and 305(b) data can be used directly or indirectly for that
       purpose.
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          Development, Selection, and Pilot Demonstration of Preliminary Environmental Indicators	

       This project has demonstrated that there is a wide variety of approaches at the state level
       that could be used to report on environmental improvements associated with CWSRF-
       funded projects. Most of the pilot states agreed that loading reductions from CWSRF-
       funded treatment projects could be either directly measured or estimated. The states also
       agreed that connecting these load reductions to actual stream improvements in the
       absence of the other indicators does not necessarily provide evidence of improvement in
       the attainment of designated uses by waterbodies. The Task Force has discussed using
       the environmental indicators together as a "suite" of indicators to get a complete picture,
       when possible, of how the water quality and the aquatic organisms have responded to the
       changes brought about the CWSRF projects. Indicators 1-3 used in combination with
       indicators 4-7 give the most complete picture of environmental outcomes. For example,
       Indicator 1 in conjunction with Indicator 6 might show the relationship between load
       reduction and improvement in biological quality.

       There are many factors relating to stream water quality, and habitat conditions that might
       or might not be affected by improvements in a wastewater discharge. Load reductions
       from one POTW could have a major beneficial effect on a stream or could be lost
       completely given the many other sources of pollution or stream degradation. The states
       emphasized that the indicators should be used together.  It is important to keep in mind
       the nature of the information that each indicator provides, and not to extrapolate beyond
       the limits of each indicator. It is important to realize the limitations of individual
       indicators  in order to avoid making invalid assumptions regarding water quality and
       aquatic community condition.

       Because most of the current CWSRF funding is directed to POTW upgrades, expansions,
       or improvements to maintain operational reliability, pilot states reported difficulty in
       attributing incremental pounds of pollutant removed due to CWSRF funding.  Clear,
       specific, and uniformly applied guidance would need to be developed if all states were to
       calculate load reduction benefits. An alternative to measuring load reduction might be to
       measure reduction in concentration of pollutants. Also, the addition of the administrative
       indicator measuring project types funded helps to address the issue of measuring
       financing of improvements to existing, complying facilities. In addition, gains in
       treatment might be offset by additional influent flows when a plant is upgraded because
       of increased overall loadings if the plant also is expanded.  Some states reported that
       despite POTW projects providing treatment upgrades, such projects often concurrently
       involve expansion to provide capacity to serve 20-year needs, rendering post-project
       loads larger than pre-project loads. Discharge monitoring report data could be used to
       calculate these load variations.
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  •      Most states predict that establishing confirmed links between CWSRF funding and
         specific reduced health risks (Indicator 7) will be very challenging. In addition to POTW
         discharges, there are many potential point and nonpoint sources of disease and health
         risks in watersheds and coastal estuaries that are attributable to sources such as storm
         water, combined sewer overflows, contaminated sediment removal, wildlife, and
         livestock. However, establishing links between CWSRF funding and specific,reduced
         health risks (Indicator 7) is possible if bacteriological data are available from project
         areas during periods before and after project completion.  Although it may be very
         difficult to establish distinctions as to  the degree of human health risk posed by different
         sources of pollution, the presence of pathogenic indicator bacteria (e.g., E. coli, fecal
         coliform, etc.) with or without a water-borne disease outbreak in an area, is something
         than can be monitored. If a CWSRF project addressed a source of this problem, then the
        'lack of high levels of potentially pathogenic bacteria subsequent to the project completion
        would  indicate that the CWSRF project had contributed toward reducing human health
        risk.

 Recommendations Related to Data

 •      Many states have suffered budget cutbacks in the area of environmental monitoring,
        including ambient monitoring. This lack of environmental baseline data undermines a
        state's ability to directly measure environmental improvements mat may be evident as a
        result of implementing environmental programs and improvements such as the CWSRF.
        Without ambient monitoring data, states that conduct only limited water quality
        monitoring would be hard-pressed to demonstrate actual environmental improvements as
        a result of environmental infrastructure improvements through CWSRF funding.

 •      More data are needed to support environmental indicators for NFS projects. A broader
        scope of data types beyond traditional water quality parameters should be included for
        NFS projects, such as biological and habitat  indices (e.g., the zigzag count).
        Documenting environmental changes attributable to a NFS project funded by the CWSRF
        Program may require a longer period of time in order for the funded best management
        practices to be reflected in improvements to water quality and aquatic biota. Indicators
        such as  final Indicator 4 may need more development and refinement in order to
        accurately capture the benefits resulting from NFS activities.

 •       Several  states suggested that they will collect data during the determination of TMDLs
       and develop loading assumptions that could help support final Indicator 5 (waterbodies
       previously impaired and now meeting designated uses as a result of CWSRF projects).
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 Recommendations Related to Programmatic Issues

 •      Measuring environmental outcomes requires data. All states must report on the status of
        their water to EPA through their water quality inventories, but the criteria for assessing
        these waters vary greatly because of differing monitoring strategies, assessment
        techniques, and program budgets. Consequently, the data available to use for the
        CWSRF environmental indicators are inconsistent between the states. In many cases this
        may not be due to a lack of water quality data, but rather to a lack of a system for
        assembling and reporting the data. While some states may have biological data that
        directly measure the response of the aquatic community to environmental changes, other
        states simply have chemical data from the end of a pipe.  States should be supported in
        their efforts to monitor the environment in a manner that accurately portrays the condition
        of their aquatic resources and the changes to these resources attributable to activities such
        as the CWSRF Program. Until this is done, only a few states will have the data to
        accurately use the indicators developed by this Task Force.

 •      Implementation of environmental indicators by the states should be discretionary and
        should be viewed as an evolutionary process.

 •      The environmental indicators should be considered as a "suite" of indicators to be used at
        each state's discretion and according to each state's individual needs.

 •       The environmental indicators would need to be accompanied by appropriate guidance
        materials and concrete examples of successful application by the states prior to
        implementation.
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