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  Paying for Water Quality: Managing Funding
Programs to Achieve the Greatest Environmental

               Report to Congress
                      United States
                 Environmental Protection Agency

                      Office of Water

                       July 2003

Table of Contents
Table of Contents
1 Introduction 1
Approach 2
Report Organization 2
2 Water Quality Funding—.r Historical Perspccti e 3
Water Quality Funding esterda ’ and Toda ’ 3
Future Water Qualit Funding Challenges 5
3 Encouraging Efficient \X 1 astc arer Management 7
Sustainable \X 1 aste ater S stems 7
Reliable Decentralized Wastewater Management 8
Watershed-Based Decision Making 8
Technology Innovation 9
4 Public Workshop Summary 11
Session I Introduction 11
Session II \Vater Quality Funding Today II
Session III Ovcrvie s of the Clean \Vater State Re Olving Fund Program 14
Session IV The Role of Other Federal \X’ater Quality Funding Programs 16
Session V Funding Decentralized Wastc sater Systems 18
Session \‘l Funding Watershed Protection and NPS Pollution Control 21
Scssion \‘II Discussion 23
Session VIII E\ploring How States Consider Environmental Outcomes and Affordability 28
Session IX I-low to Tackle Environmental Performance Tracking 32
Session X Encouraging Efficient \X’astewater Management 34
Session X l Discussion 34
5 EPA ’s Response to Questions from Congress 37
Question 1 37
Qucction 2 37
Que¼tion 3 38
Question 4 40
Question 5 41
Appendix A House Committee and Conference Language 43
Appendix B Registration List and Workshop Agenda 45

1. Introduction
Recent studies by EPA and others suggest that the
Nation’s wastcwatcr infrastructure faces significant
challenges in the coming decades At the same time,
the Nation will need to address et weather pollution
discharges, failing decentralized wastewater S\ stems,
and nonpoint sources of pollution that threaten our
Nation’s resources Because the Federal government
funds onl a portion of the Nation’ s investment in
ater quality, States have urged maximum flexibility in
their use of Federal resources, so as to direct
investments at the water quality problems of greatest
The Joint Conference Committee report on H R
2620, the 2002 appropriations bill that includes the
U S Environmental Protection Agenc ’s (EPA’s)
budget, directed the Agcncv to develop a broad
working group to review and address the basic
means by which EPA may accord fle ibilitv to States
and also assure that Federal investments in water
pollution control achieve the greatest possible
benefits (Full text from conference report included in
Appendix A)
‘1 he Committee requested that the following specific
questions be among those discussed
1 Are the SRF (State Revolving Fund) and
other Federal financial assistance programs
achieving maximum water quality protection
in terms of public health and environmental
ou tcOmes
2 Are alternatives other than wastewarer
treatment plants and collection s stems
eligible for Feclcral assistance, and, if not,
3 Do the priority ranking systems which States
use to prioritize eligible treatment works
projects properly account for environmental
outcomes, including indirect impacts from air
deposition of treatment plant effluent or
stormwater runoff from sewer construction
induced growth)
4 Are recipients of Federal assistance required
to adopt appropriate financial planning
methods, which would reduce the cost of
capital and guarantee that infrastructure
would be maintained?
5 Have sufficient performance measures and
inform ition systems been developed to
assure the Congress that future Federal
assistance will be spent wisely by the Srates
The Committee requested that the working group be
formed with representatives from a variety of
interested parties including the State/EPA SRF \Vork
Group, the Environmental Council of the States,
Environmental Finance Centers, and centralized and
decentralized wastewater and nonpoint source
stakeholder groups.
The Committee indicated in the Conference Report
and through subsequent conversations that the
workgroup, through EPA, should prepare and
submit to the Congress by July 15, 2002, a report
addressing the aforementioned questions and other
related issues it deems relevant

in response to the Committee’s direction, EPA
organized and conducted a public workshop on
March 14—15, 2002 in Washington, DC The public
workshop was designed to provide a forum to
address the questions raised by the Committee and to
provide an opportunity for public input on issues
related to but not specifically addressed in the
Committee report language
The public workshop ‘as advertised to potentially
interested parties including those requested by the
Committee on Appropriations Information about
the public workshop was widely distributed through a
Federal register notice, email messages to EPA’s SRF
and nonpoint source-related mailing lists, and through
several “listservs,” (email systems that distribute
requested topical information) Organizations such as
the Environmental Council of the States were given
an electronic version of the workshop brochure
which they then distributed to their members
Nearly 120 individuals registered (the registration list
is included in Appendix B) for the event representing
the following array of organizations
• State agencies (14 SRF program agencies, 5
environmental or other agencies)
• Private sector (19 companies—e g,
decentralized wastewater system vendors)
• Nongovernmental/nonprofit organizations
• Associations (9)
a Federal agencies (3)
• Municipalities (2)
• Congressional committees (1)
The agenda for the public workshop was designed to
address the questions posed by Congress through a
combination of expert speaker panels, question and
answer sessions, and open discussion sessions. çFhe
public workshop agenda is included in Appendix B)
The panel presentations were included to provide a
base understanding of SRF and other Federal funding
program requirements, past performance, and
perspectives on future directions State
representatives provided case studies that illustrated
program operations and innovations The question
and answer sessions and open discussion sessions
followed the presentations to ensure that ample
opportunit was provided for input from members
of the audience
The group of interested people that participated in
the public workshop did not fall under the definition
of a Federal Advisory Committee under the Federal
Advisory Committee Act As a result, the intent of
the public workshop was to hear differing
perspectives and insights without an attempt to form
a group consensus or to generate group
recommendations A notice was put in the Federal
Register stating the public had access to the draft
report for a 2 week on-line comment period EPA
provided the opportunity for any interested group or
individual to submit comments or other input
through April 15, 2002
Report Organization
The report is not an exhaustive record of all details
discussed during the public workshop nor does it
attempt to embellish or interpret niatters that were
incomplete or left unclear during the event. Instead,
the report summarizes the main themes and messages
of each session’s presentation(s) and the public input
provided during the session. A workshop summary
(section 4) was prepared to provide a more detailed
description of the public comments and responses
from panel members or other audience members.
The four major sections, following this introduction,
• \Vater quality funding—a historical perspective
• Encouraging efficient wastewater management
• Public workshop summary
• Response to congressional questions

Water Quality Funding—A Historical Perspective
2. Water Quality Funding—A Historical Perspective
Water Quality Funding: Yesterday and
Throughout the twentieth century, I( )cal governments
provided the ma oritv )t financial support for water
pollution control (see ligure 2—1). However, during
the same period, Federal fri ndi ng programs provi ned
critical support that encouraged local spending for
wastcwatcr treatment—Federal funding incentives
‘crc especially important to the implementation of
new levels of \vasiewater treatment. This section
presents a very brief historical perspective of water
quality funding that provides insight into the funding
challenges our country faces 0 idav.
The c:irlic t water quality po ects focused on
\vastcwatcr 0 )llection systems. By 1910, about 10
percent f the t ’.S. urban population was served by
collection SystemS that conveyed wastewater to
primary treatment facilities or to direct discharges.
Around the same time there were several early
experiences with “SCC( )ndarv treatment.” For
example, in 1 907 one )f the first trickling titter
facilities was constructed in the city of Gli versville,
Ne v \otk. The first activated sludge facility in the
N atioi was constructed in (ii i(ai ( fIn 1916.
Ii —
I iire 2—- 1: 1 ederal i ’s. L ca/ Ii asteii’ater Expenditures
Although many cities began to finance, build, and
connect their centralized collection systems to
secondary \vastewatcr treatment facilities, many
>1 tiers continued on only with primary treatment.
The existence of Sc0 us water pollution problems in
the United States was fitsi rec gnm> ed during the
I 9 2 s and I 93( k. Outbreaks of cholera, typhoid, and
other waterborne diseases as vell as declining fish
and shellfish populations led to the recognition that
direct discharge or primary treatment were generally
inadequate meth )(ls of \vastewatcr disposal.
1:enkr il Funding Initiated
Federal funding to subsidize the c )st of water
pollution control was initiated with the passage of
the 19-15 \\aier Pollution Control Act. This Act
provided the first authorization of funds f ft
\vastewater treatment in the t( fErn of loans. I - arlv
efforts to address water pollution control and related
funding also included:
• 1956 \Vatcr Pollution (ontrol Act I lcalth,
lducation, and \\elfare)
• 1965 \\ater Quality Act (Interior) — Set
quality standards
• 1963 Public \\orks amid Development ;\ci
Sf urcc: !edera/, Slate, i,d I ixa/ ( .wi ,wment5, ( ,in rim /cut Fiuaui e Rtpirt. 1 S Department t C ‘nimerce, t S.
Census Bureau, Governmciits 1)mvmsion
Operations & Main Icnan
• Local Cipital
‘ c
• Federal
(i . r’ “ ,i!s f.\ ‘I , ’
S. • S, • S S S •% ‘. ‘ “ • 5 ‘S • ‘. ‘S ‘S
‘. S . . ,;, ‘ S S ’ ‘
S. ‘ S \ ‘S S. 5, •

Water Quality Funding—A Historical Perspective
(Commerce)—Created the Economic
Development Administration to provide
grant money to economically distressed areas
for public works projects
The Push for Secondary Treatment
With growing recognition that water quality in many
of the Nation’s rivers and lakes were severely
impaired, Congress determined that bolder measures
were required to reverse the trend and passed the
1972 Federal Water Pollution Control Act
Amendments The Amendments mandated at least
secondary treatment and provided increased Federal
construction grant assistance The results of the
1972 Act were impressive In 1972, 2,594 (13
percent) of the Nation’s 19,355 publicly-owned
treatment works (POT\Vs) were providing less than
secondary treatment, 49 percent were providing
secondar treatment, and about two percent of the
facilities ere providing treatment levels greater than
secondary treatment By 1996, the number of
POTWs providing less than secondary treatment
dwindled to less than one percent (less than 200), 28
percent were providing greater than secondary
treatment, and another 12 percent of facilities had no
Other Federal Programs Initiate Water Quality
During the early 1 970s other Federal programs were
also initiated to provide support for water pollution
control infrastructure The 1972 Rural Development
\ct established the Rural Development insurance
Fund under the Department of Agriculture to
provide loans for wastewater and drinking water
infrastructure Also, in 1974, the Department of
Housing and Urbaii Development initiated the
Communi Development Block Grant (CDBG)
program. Each sear 10—20 percent of block grants
are used to support water and wastewater
Ei granis Continue to Evolve
During the late 1970s and early 1980s the country
adjusted the water pollution control infrastructure
funding programs first with the 1977 Clean Water Act
amendments that transferred program responsibility
to the States and then through the 1981 Construction
Grants Amendments which reduced funding levels
and increased the local share of project costs Also,
during this period Congress began to increase focus
on USDA conservation activities with the passage of
the 1985 Food Security Act. This Act established
several long-standing conservation programs
including the Sodbuster, Swampbuster, Conservation
Compliance, and Conservation Reserve Program
In 1990, the Food, Agriculture, Conservation and
Trade Act made some modifications to the
Conservation Reserve Program to emphasize water
quality considerations The Act also established the
Wetlands Reserve Program In 1996, the Federal
Agricultural Improvement and Reform Act
consolidated existing conservation cost-share
programs with the establishment of the
Environmental Qualit Incentives Program (EQIP)
To date, conservation spending for agriculture has
nearly tripled since the mid-1980s with the greatest
portion of this spending going to support land
retirement through the Conservation Reserve
Program (USDA Economic Research Service,
A ,gncu/ttira/ Outlook, September 2001).
\Vith passage of the 2002 Farm Bill, funding for
conservation activities has continued to increase, both
for newly added and preexisting USDA programs. For
example, funding authorized under the current EQIP
program can now be used for Conservation
Innovation Grants and Ground and Surface Water
Conservation funding New’ programs include the
Conservation Security Program (CSP), used to
provide payments to farmers and producers who
practice good stewardship on agricultural lands, the

Water Quality Funding—A Historical Perspective
Grassland Reserve Program (GRP), and the Great
Lakes Basin Program for Erosion and Sediment
A New Focus on Water Quality
Further details on the operation and activities of the
SRF and other Federal funding for water qualit
projects are provided in other sections of this
In the late 1980s Congress signaled a ne emphasis
on addressing water quality improvements The 1987
Clean Water Act Amendments made major changes
to water program management with the introduction
of Section 319 (Nonpoint Source Control) and
Sectior 320 (Estuary Protection) Title VI of the
Amendments replaced the construction grants
program with the Clean Water State Revolving Fund
(C\X’SRF) program and fundamentally changed the
way the Nation subsidizes \ aste ater system
construction and other water qualit projects.
Instead of direct grants to municipalities for
construction of publicly o ned treatment orks,
Congress directed EPA to provide grants to States to
capitalize low-interest loan programs and other
nongrant funding options such as purchasing local
bond insurance Congress also made the CWSRF a
State—run program with only mininial oversight by
This new focus has resulted in new projects being
funded While most C\VSRF funding has been
provided for important municipal wastewater
treatment projects, man>’ other projects have been
funded through CWSRF loans, nonpoint source
grants, and through the National Estuary Program
• Onsite system remediation
• Stormwater best management practices
• Construction best management practices
• Agriculture best management practices
• Riparian protection
• \X’etland protection
• Land Acquisition and Conservation
• Underground Storage Tank removal
• Brownfields remediation
• Source water protection
Future Water Quality Funding Challenges
To gain a better understanding of the future
challenges facing the clean water industry, EPA
conducted a study, The clei,, Waiei tindDrinkzn g lF iier
Infrast,iiclure Gap A irn/ysis, to identify whether a
funding gap will develop between projected
investment needs and projected spending EPA
released the study in October 2002
The Gap Analysis covers a 20-year period from 2000
to 2019 and includes estimates of the funding gap
for both capital and operations and maintenance
(O&I 1) For clean water, the estimates of investment
needs and spending used to calculate the gaps cover
all of the approximately 16,000 publicly owned
treatment works (POT\Vs)
Study Findings
The Gap Anal sis presents the projected funding gap
over the 20-i ear period in two ways a “no revenue
growth” scenario that compares the projected need
to current spending levels, and a “revenue growth”
scenario that assumes spending will increase by 3
percent per \ear. This annual increase represents a
real rate of growth of 3 percent over and above the
rate of inflation—a projection which is consistent
with long-term growth estimates of the economy
The “no revenue growth” scenario is useful for
understanding the extent to which spending might
need to increase relative to the status quo. This
anal sis estimates a total capital payments gap of
$122 billion, or about $6 billion per ear, for clean
water The O&I\1 gap is estimated at $148 billion, or
$7 l)lllion per >ear

Water Quality Funding—A Historical Perspective
Under the “revenue growth” scenario, the capital gap
is $21 billion, or about $1 billion per scar, for clean
water, and the O&I\1 gap is estimated at $10 billion,
or $0 5 billion per sear
• Pioiiioten,g teC/)11OIO y innovation_Creating
incentives to support research, development,
and the use of innovative technologies for
improved services at lower life-cycle costs
Principles for Closing the Infrastructure Gap
It is important to recognize that the funding gaps
would occur only if capital and O&M spending do
not increase from present levels This assumption
understates future spending and ignores other
measures that can be taken These can include, but’
are not limited to, asset management to reduce capital
and O&I ’vE costs and rate structures that better reflect
the cost of service In reality, increasing needs will
likely prompt increased spending and thus a smaller
funding gap, as is captured by the “revenue growth”
seen ario.
However, the analysis presents an indication of the
funding gap that will result if we ignore the challenges
posed by an aging infrastructure network—a
significant portion of which is beginning to reach the
end of its useful design life In response, EPA has
proposed principles to help guide efforts of Federal,
State, and local governments to address this threat to
America’s public health and environnient The
principles for closing the infrastructure gap are
• U/i/: rng the prn’ate sector and exis/zn , progranis—
Fostering greater private sector involvement and
encouraging integrated use of all local, State, and
Federal sources for infrastructure financing
• P, ’omotni,g sustainable ‘stems—E n s u ring the
technical, financial, and managerial capacity of
water and wastewater systems, and creating
incentives for service providers to avoid future
gaps by adopting best management practices
that ill improve efficiency and reduce costs,
• Enconra ,gzn,g cost-based and aft i dahie F’a/es—
Encouraging rate structures that cover costs and
more fulls reflect the cost of service, while
fostering affordable water and astewater
service for lo -income families
• Promotzn ,g smart na/er use—Encouraging States
and service providers to adopt comprehensive
strategies to manage water on a sustainable basis,
including a greater emphasis on options for
reuse and conservation, efficient nonstructural
approaches, and coordination with State,
Regional, and local planning
• Promotzn,g watershed-based decision-making-—
Encouraging States and local communities to
look at water quality problems and drinking
water source water protection on a watershed
scale and to direct funding to the highest priority
projects needed to protect public health and the
• Promotzn reliable oiIsi/e sj’steins—E ncou raging
State and local governments to improve the
reliability of onsite sewage treatment systems
and to develop strategies for Regional sewage

Encouraging Efficient Was tewater Management
3. Encouraging Efficient Wastewater Management
Studies b EPA and others suggest that the Nation’s
e\isting \ astewater infrastructure \ 7i1l require large
investments in coming decades At the same time,
water quality continues to be adversehr affected by
stormwater runoff, decentralized wastewater systems,
and nonpoint sources of pollution As a result, it is
important to recognize that local efforts to enhance
efficiency and lower costs ill be critical to meeting
this challenge.
In devising principles that will help guide Agency
efforts to address the future water quality funding
challenges, EPA identified the following as key
principles that can guide local governments as they
work to enhance local wastewater management
• Sustainable wastewater systems
• Reliable decentralized wastewater
• Watershed-based decision making
• Technology Innovation
Sustainable Wastewater Systems
Efforts to build local capacity to efficiently run
wastewater systems will be critical in the future
“Capacity” can be defined as having adequate
technical, financial and managerial skills and
experience needed run a wastewater system.
Technical capacity refers to a system’s ability to
effectivel operate and maintain the astewater
collection and treatment system Financial capacity
refers to the ability of the system to maintain an
adequate user charge system and effectively manage
the financing of capital projects and other financial
duties Managerial capacity refers to effectiveness and
efficiency of the management structure of the
s stem Should a s stem be lacking in these areas, it
may be appropriate to consider opportunities to join
with or consolidate their system with another to
achie c greater economies of scale and increase
technical skills and experience levels
Ts1an \vaste ater s stems are already e\ploring
innovative and comprehensive management
techniques to improve efficiency and reduce future
costs Several of the often mentioned techniques are
asset management and environmental management
Asset Management
Asset management has received a significant amount
of attention as a technique that ill help astewater
systems continuously and comprehensively manage
collection and treatment system assets Asset
management calls for a full accounting of a
facility’s assets, documenting the condition,
service level, useful life and expected replacement
costs. The combination of this data produces a
clear vision of how best to maintain the system,
the timing of asset replacement projects and their
costs over time There is a growing need within
the wastewater industry to develop this type of
management approach to ensure that financial
resources will be able to keep up with the growing
capital needs Proper wastewater asset
management can help to lessen the financial
burden of system repair and replacement
En ’i roomental Management Systems
Environmental Management Systems (EMS) are
another technique that enhances wastewater system
performance and helps facilities meet their
environmental goals By helping to identify the
causes of environmental problems and then
eliminating them, an EI\IS can help keep costs down
Advantages for a wastewater facility adopting an
EMS are
• Improved environmental performance
• Enhanced regulatory compliance
• Pollution prevention and/or resource
con serva ti on
• Increased efficiency
• Reduced costs

Encouraging Efficient Was tewater Management
• Lnhanced image with public, regulators,
lenders, and investors
• Employee awareness of environmental issues
and responsibilities
Currentls, EPA is working on developing an EMS
frame ork that ill detail and coordinate various
management programs and techniques available to
utility managers today EPA is \\orking with r o water
industry associations and will develop focused
recommendations regarding integration of
management programs into an overall EMS
framework The EMS framework will encourage EMS
implementation with complementary asset
management and benchmrirking programs to create a
comprehensive wastcwater management system
San Diego, California provides an example of EMS
implementation The city’s EMS program focuses on
reductions in energy consumption, chemical usage,
solid waste disposal, and potable water use Positive
results are occurring in many areas of the facility
Electrical use in one plant has been reduced by 10
percent and chemical usage by 8 and 30 percent in
two other plants. The use of the EMS has also left
the city better prepared to respond to any new or
modified wastewater standards or requirements that
occur in the future
Reliable Decentralized Wastewater
The appropriate management of septic, cluster, or
other decentralized s stems is essential to maintaining
and improving water quality EPA recognizes that
properly installed and managed decentralized
wastewater systems are a cost-effective long-term
option for meeting public health and ater qualit\
goals The Agency also sees decentralized systems as
being critical to the Nation’s long-term solution to
water pollution. Efforts to improve the capacity to
manage decentralized systems locally or RegionaH are
cnticallv important to achieving the goals of the
Clean Water Act EP\ will continue efforts to
improve local capacity to manage decentralized
\ aste ater treatment solutions. The Agency ill also
continue to provide technical support for the
development of decentralized system management
and ill continue to encourage available funding
programs, including the CWSRF program, to
properly consider decentralized s stems in project
priority 5 stems
Watershed-Based Decision Making
Traditionally, water c 1 uality programs have focused on
specific sources of pollution, such as sewage
discharges, on specific water resources, such as a river
segment or wetland While this approach may be
successful in addressing specific problems, it often
fails to address the more subtle and chronic
problems that contribute to a watershed’s decline.
For example, pollution from a se\ age treatment
plant might be reduced significantly after a new
technology is installed, and vet the local river may still
suffer if other factors exist in the ‘atershed, such as
habitat destruction or polluted runoff. \Vatershed
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
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 coniplement and reinforce
each others’ activities, avoid duplication, and leverage
resources to achieve greater results
Federal, State, and local programs should pk a
critical role in watershed-based management
Coordination of the mans’ approaches available can
he a daunting task, but is important to ensure that
available resources arc used for high priorlt\
atershed protection and restoration projcct

Encouraging Efficient Was tewater Management
For c\amplc, Ohio’s Water Resource Restoration
Sponsor Program (\VRRSP) illustrates how a CWSRF
program can be tapped to address multiple problems
within a watershed In Ohio ’ s \VRRSP municipalities
pair up with restoration partners such as a land trust
or a park district an(l access the Ohio CWSRF
program for project funding Municipalities recei e a
C\VSRF loan that ill cover the costs of a wastewater
treatment system project and a watershed restoration
project The \\ atershed restoration project is
undertaken by an e\pericnccd non-governmental
organization partner, such as a land trust To
encourage these partnerships, Ohio’s CWSRF
program lowers the interest rate on the C\VSRF loan
to the municipality so that the annual cost would be
equal to or slightly below the cost they would have
experienced with a project loan that e\cluded the
restorauon pro,ect This program reinforces the idea
that vastewater treatment and watershed restoration
have the same goal—water quality
Technology Innovation
There are man new innovative treatment
technologies and wastew ater systems currently
available or being developed These technologies
address many aspects of water pollution control
including wastewater treatment, combined sewer
overflows, stormwater controls, and decentralized
systems Moving forward, it will be important for all
interested parties to support the development of
more efficient and cost effective water pollution
control technologies Regulators’ barriers making it
difficult to use alternative or innovative technology
w ill need to be addressed and incentives may be
necessary to encourage the implementation of


Public Workshop Summary
4. Public Workshop Summary
Paying for Water Quality
Managing Funding Programs to Achieve the Greatest Environmental Benefit
Session I: Introduction
Focus: To provide a discussion of EPA’s goals for the two-day workshop
Speaker: Rich Kuhiman, US EPA
Summary: The purpose of this session was to provide an overview of workshop objectives and to present
a breakdown and explanation of the meeting agenda for all participants The public workshop was described as
a forum to discuss how to effectively manage existing Federal water quality funding programs. Agenda topics
highlighted for further discussion included a history of Federal funding, an explanation of future funding
needs, a discussion of the CWSRF program, a description of other Federal funding programs, water quality
challenges beyond centralized wastewater systems, environmental performance tracking, and local actions that
work to increase efficient wastewater management
This session also described the workshop structure It was stated that adeciuate time for discussion would follow
each individual session, however it was made clear that, as a group, the participants wou’d not fall under the
Federal Advisory Committee Act, and therefore a consensus would not be sought instead, a compilation of
comments made during this public workshop would appear in the Report to Congress Interested participants
were instructed to provide additional input before April 15, 2002, for inclusion in this final report
Session II: Water Quality Funding Today
Focus: To discuss how’ water quality protection efforts have been funded historically and how they
are funded today This session also discussed future funding challenges and EPA principles to
address those challenges
Speakers: Jordan Dorfman and Angela Anderson, US EPA
Summary: The purpose of this session was to provide an overview of historical funding sources for water
quality projects, the types of water pollution controls Funded, and the success of such overarching programs in
addition, this session ended with a focus on the future challenges to funding water qualit efforts, specifically
those outlined in “The Clean Water and Drinking Water Infrastructure Gap Analysis.”
A legislative history of funding for water qualir pro ccts provided a background understanding and a
framework to discuss the changing focus and levels of Federal authonzauons for water qualits funding As
described during this session, Federal spending for water quality projects began in the 1950s and continued to
increase dramatically through the 1970s Although Federal funding levels for water qualit PEOICCtS increased to
very high levels during the 1970s, levels began to decline following the earls’ 1980s

Public Workshop Summary
Federal Clean Water Act funding brought about environmental improvements that included a reduction in the
Biochemical O vgen Demand (BOD) loading from Publicly Operated Treatment Works POT\X’s) by twenty-
three to forty-five percent Nation ide and a statistically significant improvement in dissolved oxygen levels for
eight of the eleven major U S river basins It was stated that spending on water quality no exceeds $25 billion
dollars per sear
The second portion of this session focused on the need for the U S to increase spending on wastewater
infrastructure and nonpoint source projects “The Clean \Vater and Drinking \Vater Infrastructure Gap
Analysis,” soon to be published by EPA, illustrates a wastewater funding gap that is the difference
between current funding levels and these future funding needs. This report estimates that there will be a
clean water capital payment gap over the ne\t 20 years. It vvas highlighted that such a gap in wastewacer
funding is a direct result of increasing costs, population, Federal mandates, levels of treatment, and an historical
under-recognition of the future cost of replacement. Principles suggested for closing the infrastructure gap
included utilizing the private sector and existing programs, promoting sustainable systems, encouraging cost-
based and affordable rates, promoting technology innovation, promoting smart water use, promoting
watershed-based decision-making, and promoting reliable onsite systems and wells
(Note At the time of the meeting, the report mentioned had not yet been published by EPA The report was
issued in October 2002 It concluded that the predicted gap varies considerably depending on the combination
of assumptions used in the analysis The analysis found that a significant funding gap could develop if the
Nation’s clean water and drinking water systems maintain current spending and operations practices However,
this gap largely disappears if municipalities increase clean water and drinking water spending at a real rate of
growth that is consistent with the long-term growth estimates of the economy)
An additional challenge to future funding needs included a discussion of the costs associated with nonpoint
source projects to address such issues as hypoxia, pfisteria, and improper waste management techniques
in addition, the completion of the 2000 Clean \Vater Needs Survey was described as a means to more
accurately quantify and report nonpoint source needs.
Input: 1) Public Comment The assumptions that 1 see about funding sources is that most States will
have taxpayer based or ratepayer based funding and there will be some injection of Federal
funds froni the Federal treasury through the various agencies identified How about looking at
who uses these services and not just looking at the taxpayer or ratepayer as the basis for the
funding We have a lot of funding programs in place, not lust because of problems caused b
the individual, but by large industrial polluters Shouldn’t polluters contribute funds based on
the damage that they’re doing
Panel Response Historically most of the costs for wastewater treatment and for providing
drinking water have really come from the local level, people paying their rates, ell over half of
the cost in addition to the Federal subsidy On the State level, many States wi 1 i impose fees on
industr . It is sort of built on that “polluter pays” principle. Industries that require some type of
permit are paving the cost of that permit, although it’s probably short of the full polluter pay
concept It is an interesting point, however I don’t think it would work ith existing legislation
that e have ithin the Clean \Vater Act. But, it is something that certainly could be entertained
as we work toward the C\Vi reauthorization, or reauthorization of the SRF program.

Public Workshop Summary
2) Public Comm n There is real variability in States over the charges for NPS permits, some
charge zero, while some fees are substantial Many States do not even cover the cost of riting
the permit In 1993, Congress considered fee based legislation, and saw hat it would take to
charge some ta or fee on top dischargers (looking at the toxicity of the discharge, volume of
the discharge, and the overall ater usage) and looked at establishing a National Clean
Water Trust Fund There have also been proposals to take settlements from citizen
lawsuits and other things, which now go into the National Treasury, and instead put them
into a Clean \Vater Trust Fund Senator Robb introduced such a bill last year There is discussion
in Congress, at the Ma ell School, at Environmental Finance Centers, and others that have
considered ways to establish alternate funding sources Even though it’s not currently in either
of the bills in Congress, or SRF reauthorization, e ought to think outside the box for funding
sources Otherwise I don’t see how we can close that gap
3) Public Commenr One of the ideas we have had some enthusiasm for in the private sector was
the privatization of clean water treatment works as mentioned in a proposal issued by the
former President Bush The problems we had implementing privatization were many, but
one of them was—I don’t know if anyone is aware of this—but private firms providing
wastewater treatment are subject to different sludge disposal regulations because of the
definition of publicly owned treatment works in the Clean \Varer Act The other problem
we had was the difference between public bonds and private bonds and the rules of
arbitrage so that if you had some public financing and you issue bonds, you turn it over to
the private sector. The third problem is the treatment of wastewater treatment facilities
funded by the Federal government You have to pay back the depreciated Federal share and
the State share using an amortization schedule
iLE spor You are right There are some restrictions in the CWi\ When I speak of
private sector involvement, there are hole ranges of things short of the private company
buying out the facility from the public sector. There could be private companies coming in to
assist with the management or operation of the facility Or, other opportunities some
communities are trying.
I don’t want to say this is the magic solution that’s going to save the whole country Decisions
need to be made on a community-by-community basis. The decision needs to be made by the
community This is not something we’re going to force But rather, what are some of the
barriers there and what are some of the ways to lessen the barriers if need be to encourage the
private sector involvement Although e don’t want to get into the bills that are present in
Congress now, House bill H R 3933 did address some of the private sector activity and
arbitrage issues
4) ibitcC rnment It’s my understanding that the Metropolitan Sewerage Agencies handle the
issues of the TMDL approach I ain not entirely clear on this approach But, it seems to me
that it makes good sense to start with the decentralized system, as earlier mentioned, and use the
TMDL approach for decentralized systems Could ou comment on this
Panel I am not really an expert on the T1\EDL program, however, Romell Nandi will
cover nonpoint source issues later today

Public Workshop Summary
5) P iblic_Commeni Ho much of the SRF funding goes toward nonpoint source projects
l neL1 esponsc in the carl ’ years of the program, the SRF funding share for nonpoint
source projects was low although in recent years, it’s been ramping up toward ten percent
(Correction in 2001, CWSRI funding for iionpoiiit source projects totaled nearl $200
million for 5% of total funding Nonpoint source funding has increased over the life of the
program) Cumulative it is four percent, but it’s going up. This is the number of dollars
and not necessarily the number of projects \Vlien looking at the number of projects, it’s
much closer to rwent\-five percent, cumulative n the past few ears, the percent total
nonpoint source projects is closer to thirty and forty percent Also, nonpoint source
projects tend to be much less costly than some of the treatment works projects
6) Public Comment \Vhat is the majority of the types of projects most funded, specifically within
the nonpoint source program
Panel Response That will be addressed later this afternoon through a session specifically on
nonpoint source funding through the SRF.
Session III: Overview of the Clean \Vater State Revolving Fund Program
Focus: To provide an overview of the CWSRF Program, the largest source of water quality financing
Speaker: Mark Kellett, Northbridge Environmental Management Consultants
Summary: The purpose of this session was to provide an overview of the CWSRF program for \vorkshop
participants that needed a up-to-date understanding of the SRF program Topics discussed included a
description of the C\VSRF structure, the status of program funding, project eligibilities and priorities, and an
explanation of ways in which to determine local program affordability
Initial background information provided on the CWSRF program included a description of the initial funding
shift from direct grants to loans, the shift from Federal to State lead in working with communities, and the
change in program focus from wastewater treatment to watershed protection
Details on the structure of the CWSRF included a comparison of the program approach to that of a bank.
The C\VSRF was described as a type of environmental bank, capitalized by both the Federal government and
the State government Sources of funding included the Federal capitalization grants, the twenty percent State
match, bond issue proceeds from leveraging, repayments, and other fund earnings
In a brief update on the status of the C\VSRF program, it was stated that overall program funds available total
377 billion dollars Of this amount, 18.3 billion dollars, as of June 2001, accounted for the overall Federal share
and 3 8 billion for total State match \Vith successful programs operating in all 50 States and Puerto Rico, it was
also stated that 10,919 loans as of June 30, 2001 had been made totaling approximately 34.3 billion dollars. A
breakdown comparison of community size, by loan amount, was illustrated through various graphs and charts

Public Workshop Summary
Projcct cligibilitics discussed included those of section 212, planning, design, and construction of POT\X’s,
section 319, nonpoint source projects, and section 320, the development and implementation of management
plans for the National Estuary Program A brief discussion of C\X’SRF priorities included t pical
considerations of priority lists and a description of integrated ranking s stems
In addition, this session also discussed CWA Title VI assistance options, details such as CWSRF loan
interest rates, the idea of “grant ec 1 uivalence,” and examples of State loan repayment terms
Input: 1) Public Comment The size of loans to communities may be attributable to the amount of
special grant contributions in that year Senators are trying to get special appropriations for
large projects. Is this changing composition of C\VSRF loan portfolios impacted by special
appropriation earmarked projects that appear in the Federal Budget Of particular interest,
Mississippi has half of their funding in earmarks—the same amount in special grants as in
the capitalization grant
EPA Resp There is no doubt that special earmarks have an impact on the revolving fund
Clearly there is a connection However, if you look at the history where earmarks have gone in
the past, such as in the early years, 1992-1993, there were a few large grants made to major
municipalities. Since then, this has changed dramatically Although earmarks do have an impact
on funds, I don’t think you see that impact here While there are still many large communities
getting grants, there are also many smaller communities getting grants
2) Rublic Comment Are earmarks coming out of preexisting grant monies or are they additional
funds that are put in
EPA Response . Earmarked funds come from additional monies provided by Congress The
C\VSRF program has not been reduced in funding from those earmarks Congress either pulls
other funds out of EPA’s budget to put toward earmarks or they use additional funds from
other sources outside
3) Public Comment Our experience has been with communities of 500 or less in population
These communities are much different than communities ‘ith populations between 3,000 and
3,500 In turn, these communities are even less similar to communities greater than 5,000 or
10,000 people Are SRF statistics available on the number of projects, or percent of funds, for
these smaller communities
EPA Responsc \Ve just don’t have that information on loans to small communities States are
to provide this type of information on such communities and right now the definition of small
systems is 10,000
4) PllkiLcComment In H R 3930, the definition of small svstenis has increased to 20,000.
5) Pubhc Comment There is more emphasis and a need for the very small communities to
upgrade their wastcwater treatment systems to meet environmental regulations \Ve are
just concerned that they get their share and have access to funds

Public Workshop Summary
Session IV: The Role of Other Federal Water Quality Funding Programs
Focus: To provide an overvie of other significant Federal sources of water qualit financing
Speakers: Romell Nandi and Tim McProut , US EPA
Summary: The purpose of this session was to provide an over\ ie of the EP A Nonpoint Source Grant
Program, the National Estuary Program, and to provide a description of other relevant Federal funding
sources including those of the Rural Utilities Service and the Communit Development Block Grant Program.
The discussion on nonpoint source funding began with a description of National river-miles and total lake
acres impaired by nonpoint source polluting activities The top sources of Impairment, by percent total river-
miles and percent total lake acres, included agriculture, hydromodification, urban runoff and storm sewers.
Total appropriations to the Nonpoint Source Grant Program totaled $100 million per year between 1995 and
1997, $105 million in 1998, $200 million for 1999 and 2000, and $237 5 million for 2001 and 2002
This session also discussed the general usage and priority targeting for C\VA section 319 funds Topics covered
included the use of funds by the States, consistency of funding priorities with those in the State’s Nonpoint
Source Management Program plan, and specific EPA conditions on funding, such as the requirement of States
to use approximately half of their 319 funds to plan, develop, and implement TMDL allocations Examples of
section 319 projects included Best Management Practices (BMPs), nonpoint source education programs,
technical assistance, monitormg, and watershed planning
Also discussed was the National Estuary Program and associated grant funding A history of the NEP program
provided registrants with details on the program such as the purpose of promoting comprehensive planning,
Regional monitoring, and coordinating research for significant National estuaries threatened by pollution,
development, and overuse Further background information described the unique approach for selecting and
managing an individual NEP under this grant program
As presented, FY02 NEP grants totaled approximately $17 million, equivalent to $500 thousand for each of the
twenty-eight NEPs In the past, an average of $300 to $350 thousand was aflotted per program A discussion
of NEP planning and priority setting included a brief mention of the Comprehensive Conservation
Management Plans.
Priority problems presented included nutrient overloading, pathogen contamination, toxic chemical pollution,
alteration of natural flow regimes, habitat loss and degradation, decline in fish and wildlife populations, and
iiiiiotlticed species \‘arious examples of C\VA section 320 funded projects were provided
The second half of this session was devoted to the exploration of other significant Federal funding sources
including those of the U.S Department of Commerce, Department of Housing and Urban Development,
Department of the Interior, and the Department of Transportation
Discussion on alternate funding programs for water qualit projects began with an overview of the
Catalogue of Federal Domestic Assistance The catalogue provides information on fifteen types of assistance
tools including formula grants, direct payments, guaranteed loans, and technical assistance The publication,
with information on some 1,482 assistance programs through 63 Federal agencies, as presented as a valuable

Public Workshop Summaiy
resource When compared \ ith similar assistance in other countries, the Federal assistance in the United States
is very generous Ho cver, Federal resources are d arfed by National water quality needs
This session presented many non-EPA water quality funding programs, including the Department of
Agriculture’s Rural Utilities Service Water and \Vaste ater Disposal Program, the Department of
Commerce’s Appalachian Regional Commission, the Department of Housing and Urban Development’s
Community Block Grant Program, the Department of interior’s Infrastructure Program, the
Department of Transportation’s 21st Century Program, and the Federal Emergency Management
Agenc ’s Disaster Relief Program The discussion on various alternate programs emphasized the
difference between applying for funding through EPA and applying for funding through those programs
of other Federal agencies There is a big difference, it was stated, between applying for funding through a
program specifically designed for environmental projects where one is competing only against other
governmental agencies and applying for funding through a program outside EPA where one is competing
not only with other entities, but also with conflicting needs. in addition, it was noted that all of the
programs discussed, while promoting environmental and public service goals, are looking more toward
ecoiiornic development Such programs are much more pollution control oriented, rather than working
to limit development to prevent more environmental pollution
Also noted during this session was the new push for the cooperation between EPA programs and other
programs such as the RUS and the CDBG programs Some types of this cooperation are ongoing, but many
are looking to expand these efforts.
Input: 1) Public Comment Where would you get information on economic development grants, that
being a subdivision of the Department of Commerce 7
Pn lRep_oi In terms of using the catalog, when you type a listing, EDA for example, into
the catalog, you will get a listing of about six to eight programs. in the three to four page write-
up on that program, you will find a contact listing at the bottom for that specific program The
alternative is to simply call information and ask for the EDA Headquarters However, the
catalogue serves as a very good starting point.
2) Public Comment You mentioned people were studying the cooperation between EPA
programs and the programs of other agencies When is that study of such cooperation due for
publication and are there other examples of this type of in-depth cooperation between EPA
and other agency programs 7
Panel ResponseS In reference to the paper in question, the (Environmental Finance Advisory)
Board has already begun, and envisions completing, that report some time this year Part of
what the Board wants is to give some short case studs’ abstracts where such cooperation
worked, why it worked, what it was that they did, the best practices, and details of the
institutional frame ork that allowed such a cooperation to happen Also, the study will
include a few anonymous case study abstracts for States where cooperation is not working.
These case studies ould include information on why cooperation did not work, a
description of the contentions, and what institutionally exists in each State that prevents

Public Workshop Summary
A draft report is expected b the Board’s ne\t meeting in August In their last meeting, in
i\larch, it as decided that this project ouId receive liii! attention on one of the Board’s
3) Et kkc Coniment Ho much control for RUS does the Federal government actually
havc And, 1 am asking specifIcall in relation to the proposed paper on cooperation The
current system in some States is that if you get an RUS grant, ou have to take the loan,
even if the loan rate is higher than an SRF loan That reall does not seem to be in the best
interest of the community Is this process going to change
Panel Response That requirement is a Federal requirement that is mandated out of RUS
Headquarters The States vill not have the flexibility on their own to do what they ould like in
terms of affordability I imagine this can be rather difficult.
Such a reality also makes it difficult for the RUS to compete at this time. In my opinion, there is
currently more flexibility in terms of loan percentages for the SRF I would suggest talking to
the RUS people themselves for an official take on this topic These are only my impressions
when dealing with the program. This is a Department of Agriculture Program and I work for
the EPA
Session V: Funding Decentralized \Vastewater Systems
Focus: This session considered funding sources that support decentralized wastewater solutions.
Speakers: Joyce Hudson, US EPA, Jordan Dorfman, US EPA, and Greg Smith, Ohio Environmental
Protection Agency
Summary: Ms Hudson gave an overview of funding available and the challenges surrounding decentralized
wastewater systems. Mr Doriman then discussed the policy and how CWSRF can fund decentralized
wastewater systems Mr. Smith covered his experience in Ohio with funding decentralized vastewater systems
The purpose of this session was to demonstrate how decentralized wastewater treatment is important
Nationally because one quarter of the population is served by these systems and about a third of all new
wastewater construction is decentralized Systems have poor track records and have high pollution potentials
from mismanagement 10-25 percent of decentralized systems fail annually and over 50 percent of these
systems are greater than 30 years old and in desperate need of upgrades and repairs. The pollution threat could
affect beaches, estuaries, shellfish beds, and groundwater Panel members explained actions are being taken at
the local, State, and Federal levels to devise effective management solutions for decentralized systems Costs are
high for communities implementing management strategies They face program planning, operation and
maintenance, and rehabilitation and replacement costs. The EPA drafted a National I Ianagement
Guidelines document in October 2000 to help communities establish decentralized management
programs There are different levels and types of management for decentralized systems depending on the
control a community wants to have. Some communities have implemented utiliw districts where fees help
maintain the management district in the communit

Public Workshop Summary
The panel sho ed how the CWSRF could be used to fund decentralized s stems because the)’ are treated
as nonpoint sources of pollution Management programs can be established through the fund, system
installation, replacement, upgrades or modifications can also be funded Thirteen States have used the CWSRF
for onsite systems In Delaware, three percent or six percent loans are given for 20-year periods for onsite
impro ements \\‘ashington State has a similar program Through local entities the public can receive 0-5
percent loans for 5-20 years More than 3,000 projects have been completed and $47 million spent on onsite
systems in Washington The obstacle to funding onsite systems is that many State CWSRF programs do not
allow funding to private entities To overcome this problem many States have found solutions that include
working with intermediaries such as local governments or local banks
In Ohio, onsite systems are funded through a linked deposit program with local banks Ohio EPA works with
local agencies to establish loans Ohio’s SRF invests in a reduced interest local bank CD Banks review and
approve loans to borrowers, and the bank lends to the applicant at a rate reduced by the amount of the SRF
CD discount The banks take on the default risk of the loan for the interest they receive Borrowers prefer this
process because they deal with familiar banks and the SRF approves of this program because the administrative
burden of loan review happens at the banks
input: 1) Public Comment In the linked deposit program does Ohio provide financing for
administranon to the technical partner
Panel RcspQn .c , No we don’t We try to make sure that the partnership and the requirements
that we have with them are as close to their normal course of business as possible So, they see
these loans not being an eNtra part of their ;orkload—it may increase the workload—but it’s
not a completely different kind of work So, they are usually very willing to accommodate it as
part of their normal administrative expense
2) Public Comment Is there an additional cost to the banks for their participation
PaneJ Response No, the loan is the same loan, as they would have normall The line where it
says 8 25% says 3 25% for the loan recipient Again, the banks are equipped through their
normal fees to recoup all of their administrative expenses without any additional expenses due
to involvement from the Ohio SRF program
3) Public Comment : How do you reflect these programs in the intended use plan
Pand_&spnas.c Ohio puts such programs on the priority list of the IUP on a countywide
basis, aithough not individual protects because they do not know who the end borrower will be.
They also put the cost expected for specific county programs on the IUP
4) Public n.rnrncnri Why such a disappointing response in loans
Panel Response : We [ Ohio need to do our home ork The degree of urgency the county
health departments are putting forth about the need for these improvements might not be
enough Outreach might not be there, people will go ahead \vith improvements through
other financing mechanisms.

Public Workshop Summary
5) Public Commenr What is the duration of the investment in the loan Do ou deal ith
large Regional and National banks
l aneLR sp .nse Ohio retains the investment in the certificate until the loan is repaid If
it’s a large investment, repa nients are decreased as pa\nlents come in The program is
flexible Ohio deals with all size banks, as long as the ’ are Nationall) chartered We also
work with farm credit services that have sufficient assets to qualify, not only chartered
National banks Small National banks and Nationwide chains have participated
6) Public Commenr How much influence does Ohio interject into the management with the
county health department, because sometimes their own peculiar requirements can diminish the
effectiveness of the program
Panel Response : Local programs are given fair latitude to know what their problems are and
how to address them Ohio is hesitant to step in and say you have to do it this wa This is
possibly another reason why the program is not successfully attracting loans
7) Public Comment : How many States use the linked deposit program and what are the barriers
for States using this method How can SRF address NPS and private loans mor&
Panel Response : Addressing the lack of NPS funding is why we are here and at this meeting we
hope to come up with ideas. The EPA welcomes feedback on what could and should be clone
Hopefully many at this workshop can explain what they have done in their States Every year
EPA sees more States jumping on board and funding NPS \Ve always need pressure on States
to understand the issue and understand what needs to be done \Ve can’t force the State to do it,
but the pressure often must come from within the States. There are not many States, only three
to four doing linked deposit. Some States often have difficulty getting banks on board Many
States are also practicing linked deposit for other programs, such as for housing, not just for
water quality
8) Public Commenr Farmers are not likely to take loans when grants are available Farmers are
already financially hit and not likely to do any extras
9) Public Commenr EPA cannot make States do NPS funding. Local community groups and
nonprofits that go to the States are best at getting the States to fund NPS projects. The EPA
Onsite program promotes communities talking to States Although building constituencies is
important, it is still the States that ultimately manage their programs with Federal dollars to do
10) Public Comment - Maryland was listed as a linked deposit State, what are they doing?
EPA R spoii Their new program is modeled from Ohio’s and has only made a couple
of loans. Possibly t o loans for about $5000 are all that has been done.

Public Workshop Summary
Session VI: Funding Watershed Protection and NPS Pollution Control
Focus: This session considered funding sources for watershed protection and nonpoint source
pollution control projects
Speakers: Jim Scott, Northbridge Environmental, Paul Burns, Minnesota Department of Agriculture, and
Tom Christensen, USDA NRCS
Summary: Mr Scott provided an overview of nonpoint source pollution control projects the EPA
supports Mr Burns then explained how Minnesota uses its unique approach to nonpoint source funding and
e\plained their best management practice loan program Mr Christensen helped the audience understand the
USDA’s water quality funding programs
While wastewater treatment is crucial to water quality management, nonpoint source pollution also needs to be
addressed to consider the entire picture of water quality needs There are a variety of nonpoint source projects
supported by the CWSRF and other water quality funding programs. These include stormwater BMPs,
agriculture BMPs, riparian protection, wetland protection, Underground Storage Tank (USI) removal,
brownfield remediation, and even dam removal Since 1995 there has been a steep increase in nonpoint source
spending ($1 3 billion since 1995) Thirty States have used CWSRF funding for nonpoint source activities To
teach out to new borrowers States have established innovative partnerships with other State agencies, county
loan programs, NRCS offices, and local banks to offer loans Examples are Ohio’s C\VSRF linked deposit
program, Minnesota Department of Agriculture’s agricultural BMP loan program, and Maine State Housing
Authority’s septic loan program CWSRF programs have also encouraged partnerships with point and nonpoint
source projects, such as Ohio’s Water Resource Restoration Sponsor Program
Minnesota’s agricultural BMP loan program started in 1995 and supplies low-interest secured loans through
local governments and lenders to farmers for the implementation of comprehensive local water plans The
comprehensive water plan identifies the water resources, describes any problems, establishes priorities, and
develops an action plan. The State allocates funds to counties and distributes funds to local lenders Counties
implement the local water plan, identify and solicit projects, and hold the accounts for use within the county
The lenders then evaluate the financial feasibility and risk of the loans, request the funds from the Stare and
collect loan repayments from borrowers The local lender guarantees the loan repayment to the State SRF To
date there have been 4,500 projects and $51 million in loans This represents both first generation loans
and loans made from funds revolving alter repayment.
The USDA has many loans and grant programs for w’ater quality protection and improvement projects
Their primary conservation programs include the Conservation Technical Assistance, Environmental
Quality Incentives Program (EQIP), Wetlands Reserve Program, Conservation Reserve Program,
Conservation Reserve Enhancement Program, and the Small Watershed Program EQTP for example,
provides farmers and ranchers with technical, financial and educational assistance to help them comply
with environmental regulations and natural resource concerns Approximately $200 million per year is
spent on this program Many USDA projects are coupled with EPA funding programs such as 319 grants
The Farm Bill now in Congress will increase funding to natural resource conservation programs.
Input: 1) Public Comment . Who provides the insurance policies the NRCS talked about

Public Workshop Summary
Panel Respoiisc There is a group out of South Carolina called the Agriculture
Conscr ation lnno anon Center that is involved in sonic of those piloting programs and
also orks ith the Risk Management Agency in USDA T o aspects of the program are
to look at solutions to reduce the commercial application of nitrogen in a cropping
situation and the other is implement hat thc call “manure crediting “ Manure crediting,
in essence, describes the farming practice of applying manure to cropland When manure is
applied, a farmer, in effect, reduces his/her need for commercial fertilizers due to the
inherent nutrient content in manure The funding behind this program as initially a
grant; however, as the project has grown, and incorporates collaboration ith the Risk
Management Agency, there may also be some USDi funding behind it as well.
2) Public Commenr Have you been able to determine measurable water quality improvement as a
result of the BMPs in Minncsota
Panel Response Not as we would like, only relying on ambient and watershed based
monitoring systems in place One of the needs would be a better cause and effect system to
demonstrate and prove, that an investment of $50K resulted in “x” reduction in fecal coliform
or nitrates or phosphorous in a receiving water body Minnesota does have activity measures,
like how many acres were affected by the conservation tillage equipment they funded \Ve are
able to build estimates on numbers, but not from direct monitoring results with “x”
improvemenrs Even though water quality improvements are seen, the State cannot directly
relate projects funded because of many variables.
3) Public Comment Minnesota mentioned that good programs are run at the State level? How do
ou do this What about your priority system ranking How do you keep the reporting down
Panel Response The Minnesota Department of Agriculture helped to update the State 319
plan The group that reviews the county applications to the program is a subcommittee of the
State 319 program Counties apply each year indicating what projects they would fund under the
competitive application process Priority and funding levels are driven by how much a county’s
plan would improve water quality Counties also must indicate how they will spend their
revolving dollars and that must be related to the local water plan Loans are not approved unless
the applicant is utilizing approved practices, and by the time projects come to the Department
their credit rating has already been approved.
4) Public Comment In all programs do you have long-term management plans Training
Panel Resp Qnse The short answer is no. I’ve seen this as a concern for cost share
programs Low-interest loans must be paid back so there are built in incentives to do the
projects and maintain them. Counts inspection programs for septic systems are in place,
but not frequently utilized, except perhaps in instances of high quality lakeshore areas,
such as those monitored additionally by the self-inspection programs of lakeshore

Public Workshop Summary
5) P lic mm iit Does the USDA look at models for water qualio What kinds are
Pa_n. tRpons : Modeling is important because monitoring everything is impossible
Ti\IDL/agricultural nonpoint source models are used and de eloped b the i\gricultural
Research Service The Cooperative State Research E\tension Education Service started a 5-
year project looking at water quality tools and models A broad range of land grant universities
and other scientists are also considering tools available and how they can be improved and more
properly used in certain situations
6) Public Comment ’ Whose job is it to determine the combination of programs to use NRCS?
Local State
Pane! Response NRCS tries to encourage all levels of participation Local srormwater
conservation districts have the lead of choosing projects. NRCS distnct conservationists also
have knowledge of all the available projects More often than not, it is a combination of people
and a process that identifies the programs that match up to achieve the greatest result It varies
by State, but you need the combination to be most effective.
Session VII: Discussion
Focus: This session allowed the audience to voice their opinions on barriers to obtaining funding and
problems they face. Discussion also focused on what can be done to increase the o erall
effectiveness of existing programs
Input: 1) Public Comment In the DC area, land protection is important and the SRF has been used for
land protection in the past There is a big potential here. There is a need for more recognition
and the SRF needs to be pushed on more land conservation
2) Public Conimenr What will the Federal government role be in incentivising SRFs? Speaking as
a land conservationist, we know there has been $20 billion new dollars created at the local level
for land conservation over the last 5 years. There has been some interesting work with mixing
up the land people with the water people and trying to find out, at the watershed level, how to
make land conservation work as an NPS tool There are many innovations present at the local
level toda) such as creating incentives to link the watershed and land conservation programs
and fostering means to better understand how to measure the results and impacts of programs.
How much money is being spent on looking at the actual results of programs What are the
barriers to better modeling and monitoring? Demonstration projects need to be highlighted.
A successful incentive program is New Jersey’s Green Acres program At the State level,
this traditional land conservation program has been linked with their SRF \Vhen counties
and cities come for loans for land conservation, the application asks if there is a water

Public Workshop Summary
c 1 ua 1ir impact if so, the ’ ma be eligible for an SRF loan This is a more attractive
package for loan applicants The Brow niield program is also a good program that
highlights local level work Perhaps the SRF can model their program from the
Brow nfield program
3) Public Comment EPA needs to do a better job of tracking where the dollars are going
States have funding, but the public needs to know more about where the funding is going
It is important for die public to understand funding down to the project lc el and in different
categories This should not be that expensive of an endeavor with the technology available
toda .
Moder tor Comment EPA has realized the need to track more NPS funding and projects.
The NIMS program is currently working on tracking that better and EPA has realized this
is an issue
4) Public CommentS There are barriers to decentralized systems in small communities Alternative
onsite systems are not readily accepted at the local county levels There needs to be some type
of National effort to certify new onsite technologies—aerobic etc. Alternatives are needed that
work and are accepted There is also a need for technical assistance to help motivate
decentralized management entities Counties don’t want to do it, some rural electric utilities
might do it, but in some cases there may be a need to create an entirely new entity. in the
Midwest, there are not the same incentives for wastewater systems to develop, as have rural
water systems There are barriers because legal entities, and not homeowners, apply for funding
in many cases If counties or townships do not do it, then homeowners need to group together.
Higher levels of funding and public awareness need to occur for decentralized s stems to
5) Public Comment . Is one of the barriers for NPS projects a capacity issue at the State level in
terms of staff time for the SRF program Could there be an rncenuve for additional dollars for
the administration of the SRF, if it is a capacity issue? \Vhat makes a difference at a watershed
scale This might be a research question and might not be an issue for the SRE
State Response The \Visconsin Department of Natural Resources developed an administrative
funding for water quality model The primary mechanisms we use for funding administrative
expenses associated with water quality programs include section 106 grants, 104(b) grants, some
SRF funds, and some 319 funds According to our model, there was a $700 to 900 million dollar
annual gap in funds available for the State administration of water quality programs. Also, an
expenditure survey found that less than 30 percent of all money that supports the Clean Water
program is Federal money I want to make a point that there is a lot of Federal money
available for these programs, but there should also be Federal implementation of these
Other sources of funding include general-purpose revenues, general fees money, and
bonding. There is a very large problem with vs-hat States can do to continue water quality
efforts. The SRF is a complicated program and requires State and Federal partnership to do

Public Workshop Summaiy
all the ork It is difficult for States to administer this program and it is not getting any
easier Also, the Needs Surve shouldn’t be the onl determinate for State allocation
6) 1 ublic Conimeiit If you look at National numbers from the gap analysis and from earlier
presentations, the said 90 percent of the remaining pollution is from NPS and onl 4 to
10 percent of the SRF funding addresses NPS It appears substantially cheaper Nationally to
address the NPS pollution problem compared to point source when compared as a
percentage The Gap analysis should show much less funding required when addressing the
entire NPS problem over 20 sears, than to maintain the central s stem infrastructure So
when you combine those facts you see the country is misallocating its clean water funding
This is a glaring problem the Federal government needs to pay attention to States have the
flexibility, but also know they need to be accountable The Nation is now at a point where
all the money is thrown to a small fraction of the problem, that is the most expensive by
far to maintain. It is up to the States to be accountable for their use of the Federal resources
and to redirect those in a more efficient way States should be accountable for redirecting
money to NPS projects We should allow States to use funds for grants to NPS projects so
incentives exist for communities, farmers, and homeowners \Ve should not use a
traditional SRF loan, but have an SRF loan with some principal forgiveness This will
provide more administrative funds for States to administer their programs At this time it
is a flagrant misallocation of our country’s resources that the States are continuing to put
all the money into the central system grid and not diverting to those projects that clean up
the water bodies of this country at a substantially lower cost than the central system
approaches. Vithout using mandates, the Federal government could induce incentives in
the financial system
7) ltc mrnen Earlier in the session I talked about the TMDL approach It seems to me
that there are different approaches that may work better for the different areas of nonpoint
source pollution The one we do most of our work in is wastewater treatment If the TMDL
approach is not in complete favor for agricultural or metropolitan interests, perhaps it is a very
good basis for encouraging large-scale use of pollution control equipment in unsewered areas.
The incentive behind that could be the State revolving loan funds that are proportioned for
decentralized systems If the States do not require a secondary level of treatment or higher
where necessary for such systems, then they wouldn’t get their proportion of the State
revolving loan funds for nonpoint source pollution, in the same way they would be in violation
of their highway funds if they didn’t comply with certain requirements of the Federal
government In terms of financing those, it wouldn’t necessarily have to be through the State
Revolving Fund, which is of course is a very good regenerative fund, in many cases the
marketplace would absorb the upgrade of commercial and residential applications for both new
construction and resale of the property And, it would be simple, whatever the code is at the
time, the marketplace would absorb the cost under new construction to comply with that code.
And of course on a resale, the marketplace would absorb that cost as well. An inspection would
be done at the time of sale and if the property didn’t meet whatever code was in place at that
time, then they would have to be brought up to code before the closing of that exchange and
the sale could take place And again in the private marketplace, the transaction of the bu -sell

Public Workshop Summa,y
would absorb that cost and then the balance of those funds could be used to upgrade the
inipoverished communities here ou ha e a different approach
8) P c Commem The vast majority of our pollution comes from nonpoint sources, vet
the vast majorit of the nionc goes to point sources M suggestion is that an one v ith
any sort of po er influence should talk to the cities and the communities and let those
small and medium municipalities know this as well Because sometimes they will resist as
thc think it’s their money for a wastewater treatment plant. They don’t realize because
TMDLs can only control the point sources, it is much better for them to allow some of
this money to go to nonpoint sources to eliminate some of these problems. Educate the
communities in our States that they do want to fund nonpoint source projects
Also, I’m not sure that giving for-profit businesses principal forgiveness and more grants is
the best use of the available SRF program funds. Because money is a finite resource, and
the reason we can even have a lot of these discussions, is that it’s a revolving loan fund and
the money comes back We have to be careful when we talk about principal forgiveness,
because it decreases the amount that is available in the future for this type of work.
9) Public Commenr The Needs Survey is mostly oriented toward publicly owned treatment
works Most of those needs are for traditional wastewater needs. The point is it grossly
underestimates the needs Many older facilities need reconstruction, and we don’t have
documentation on those future needs now just to maintain the structure vve have now is very
expensive One other point is that this is a State program, and the States have their own unique
strategies It is not EPA setting directions and policies, but every State and individuals are doing
this A successful program will start from the bottom up to address any nonpoint source, or any
type of water quality problem
10) Public Comment In managing Minnesota’s agriculture BMP loan program, I have seriously
tried to avoid competing with municipal vastewater treatment needs in terms of the allocation
of SRF dollars I know the minute I try to compete, who is going to ‘in. Fortunately our State
has been granted with enough funding so far to avoid competition between point source
municipal systems and the nonpoint programs But, we would have a difficult time if we
tried to compete for those dollars Guidance will have to come from EPA, as States are not
likely to suggest their individual communities pay more. Also, if we are going to try to
address more nonpoint source needs through the SRF program, there are going to have to
be more dollars put into the system
11) Public Comment \Ve need more funding into the nonpoint source and the nonstructural
controls There are barriers at every level not allowing us to allocate resources in a way
many support. \Ve do need incentives at every level. I feel that it’s not a question of blame,
one agency over another, but of barriers. \Ve should provide financial incentives to the
entities that receive the money, as well as ways to generate public support.
12) Public Comment . \Ve would love to get into nonpoint source pollution problems, but we
don’t have people wanting nonpoint source loans As long as nonpoint source is a

Public Workshop Summary
voluntary program, and there is no enforcement for it, v e cannot get people to come in for
a loan as long as thcre are grants out there available to complete their projects We cannot
compete with available grant programs, as long as the nonpoint source program is still
13) Public Comment Say a small communit does not have a Se\\ er s stem and they also had
a water quality problem Historically that community could go to the EPA and get funding to
build a c uite e\pensivc, hut small, central sewer system, how ever, could not get money for
onsite systems or small cluster upgrades, this must be fixed One of the House Bills now does in
fact provide an incentive for small communities to do an alternate approach
There is also a growing debate about CSOs and underground storage tunnels in
comparison with distributed stormwater retention and low-impact development kinds of
techniques. If communities can get funded for underground storage tunnels, but not receive
funding for a whole array of distributed series of stormwater retention through the SRF then
again the financing system is creating a bias for one type of technology over another,
irregardless of how expensive and/or inappropriate that type of technology might be I feel it
is incumbent on the State to fix whatever barriers there are to correct for the bias over different
types of technology solutions available out there All loans should strive toward neutral funding
for all types of project solutions
Panel .RespQnse. I am struck by the fact that there are barriers at every level There are barriers
at the Federal level, the State level, and the local level Some local governments don’t want septic
tanks And, on the other hand, there are governments that don’t want centralized systems and
growth They haven’t, but should, figure out what barriers are present and how they might be
able to successfully impact these barriers Communities should see that they can and are able to
choose between centralized and decentralized systems I don’t have an answer, but m having a
reaction to the barriers Hopefully there will be some new ideas out there to address these
14) P bJic_Comrnen From a program development vantage point, maybe you don’t want to
address all the barriers but to come at this from a different angle Instead of forcing
communities to do what they don’t want to do, maybe it should be more a matter of supporting
those people already out there solving the barrier problem and using tools to solve the nonpoint
source pollution problems. Nonpoint solutions are very complicated and not easy to measure.
Let’s support those out there with an understanding of these potential solutions
\Ve should also support partnerships with nonprofit organizations They are less risk
adverse, have the opportunity for more innovative and creative solutions, antI can leverage
dollars very well
15) EtibJj Comment I agree that there are mans groups out there working to break down
these barriers Also, in response to a previous point, many communities in mans’ States
would rather take grant money, than take a low interest loan

Public Workshop Summary
I ould also likc to make a point about the specific definitions applied to a dccentralized
system This is hen ou collect the water and send it somew here else This is not the
same as a septic tank on an indi idual propert\. Cluster s stems are a group of homes on
any system, both centralized and decentralized
16) PuhlicC mment One suggestion is to require that 319 and C\VSRF work together
Combine grants and loans in one application The communit , locality, or conservation
district would fill out one apphcation and on this application is one question that asks.
“Are you willing to take a loan ” Both programs work together to determine how to fund
the projects They take into consideration the amount the community can afford to pay
That amount then vill become a loan, and the remainder of need is given as a grant (This
cooperative program is already in place for \Vashington State in combination with The
Centennial Program.)
17) Public Comment I know that partnerships and cooperation are beneficial and necessary,
but for small communities it is much simpler and less stressful if they can go to one agency
for funding If everyone is going everywhere for the funding and leveraging, responsibility
is on the backs of the same communities that are having the problems. I would suggest
putting the money in one pot. Let the communities decide what they need in terms of
18) Public Comment \Ve seem to agree nonpoint source pollution is a contributing factor and
there are many obstacles in our quest to meet water quality standards There may be a danger in
saying that water quality financing is the sole way to address this situation I think that financing
may be a part of the solution, but it is one of many. There is a large difference between
nonpoint solutions to problems and point source solutions to problems. I think we should be
very careful as to what we are trying to accomplish and how we should get to that point.
Session VIII: Exploring How States Consider Environmental Outcomes and Affordability
Focus: This session discussed how C\VSRF programs consider priority issues
Speakers: Cleora Scott, US EPA, Jay Manning, Rhode Island Department of Environmental
1\Ianagement, and Greg Smith, Ohio Environmental Protection Agency
Summary: Ms Scott first discussed the EPA’s role in priority setting and environmental review and
highlighted a few States with proven successes Mr. Manning and Mr. Smith followed with their specific
examples of how their States are running priority systems
The panel discussed how priority lists are typically considered in development of C\VSRF Intended Use
Plans POT\V projects must be ranked on a current C\VSRF priority list to be eligible for funding. Each State
develops and implements their own ranking process and consider factors such as use of the water resource,
threat, type of project, effectiveness, enfo cement activities, population, and affordability All POT\V projects
must also have an environmental review and consider impact, present and future conditions, land use
considerations, and coordination with other public works projects Some States are moving toward a more

Public Workshop Summary
comprehensive approach to making their priorm lists, which include nonpoint source activities Integrated
planning and priorit setting helps States identif their ater quaiir ’ priorities and select projects that ill best
address these problems
Rhode 1 land’s example showed the point ranking for different criteria and how their State determines the final
ranking Some of the considerations and point va’ues came from existing conditions, proposed benefits, water
quality improvement, intergovernmental needs, and readiness to proceed.
Ohio has a similar integrated priority setting system that was originally developed from ideas and
principles presented in the EPA Funding Framework Document In addition, Ohio later received grant
funding through EPA under section 104(b)(3) Under this integrated priority setting system, projects are
evaluated on their effects to human use and aquatic life uses of the water resource The first priority
considers human health The second priority is the protection of surface and ground water resources
Input: 1) Public Comment Were there political battles in Rhode Island getting the priority system
established? Did you open it to the community for comments?
Panel Response The ranking system is an in-house project \Ve had a workshop and
- public hearing to get the public involved \Ve also put ads in the local paper
2) Public Commenr How was the ranking system determined in-house How did you determine
where different projects would faIP
Panel Response The draft was given to a 319 person and an estuary person We had five
hypothetical projects to run through the system If point allocations led to a point source bias,
the system was modified to eliminate the bias.
3) Public Comment Proper allocation of resources from an economic standpoint is not
addressed with these priority systems For example, suppose you have a point source project
with a ranking of t\venty, and ten nonpoint source projects with a ranking of three each.
Suppose also the point source project with the ranking of twenty costs $20 million, and each
nonpoint project costs $500,000 each. Economists would combine all points and dollars on each
side For $5 million dollars you could achieve a total of thirty points, or for $20 million dollars
you could achieve a total of twenty points, depending on ho\v you allocate the funds 1-low
much water quality improvement can be achieved for a certain amount of money? How many
projects can a State do if you add up the all the smaller projects, you would put your money
into all the smaller projects instead of the expensive point source projects States should
consider this Why are 96 percent of dollars spent on point source projects with minor
impacts when we can shift the money and spend all the money next ‘ear on nonpoint
source projects to dramatically improve water quality across the Nation The problem
with current priority settings is they do not consider relative cost effectiveness and benefits
of the projects undertaken At the end of point source scoring, if the nonpoint source
projects add up to a higher score than the point source projects, the State should put all the
funds into the nonpoint source projects

Public Workshop Summa,y
Patici Resp ons Ignoring point sources and nor addressing them ould mask the
nonpoint source pollution additions Readiness to proceed also comes into pla . If the
project is reach’ to go, why sit on the money
4) l?uJItc_CQjinment_C n inued Some smaller projects get lo er points, but ou’rc not
taking into consideration the total benefit Economists oulcl not see the cost effectiveness
of the list Relative cost of doing projects is not considered. There are flaws in the priority
s stem
E toel Response . Ohio agrees in part, and has considered, relative cost effectiveness
Another point is point source projects require longer assistance compared to nonpoint
source projects, five years, and not more than ten If you put one dollar into a nonpoint
project, the benefit will come back in half, to a quarter, of the time for the completion of a
point source project The point source project dollar will come back in twenty years.
Nonpoint source projects are treated more neutrally in Ohio and the degree of
improvement is considered and weighcd. \Vhichever projects reach the federally
established attainment goals, whether point or nonpoint, should be viewed as better
projects. It depends on what is trying to be accomplished. Attainment is the goal and not
necessarily the volume or magnitude of the water quality improvements. There seems to
be the impression that point source projects are holding back nonpoint source projects.
This is not the case in Ohio and many States There are not enough nonpoint source
projects applying for loans Establishing nonpoint implementation institutions vilI help
see that more projects arc going to States In 12 to 14 years, not one applicant in Ohio has
ever been turned down for a nonpoint source project.
5) Public Comment If we have nonpoint projects that are interested in receiving funding, they
can come in and get the funding The problem is not one of priority, but it is a systematic
problem SRF programs are designed to fund point source projects A better vehicle to fund
noripoint source pollution, already established, is section 319. Section 319 has $220 million
allocated to it on a Nationwide basis and the SRF program has $1 35 billion allocated to it The
better program for nonpoint source is section 319 and we should not structure an SRF program
specifically to fund more nonpoint source projects
An additional point I would like to make is that much of what we try to do when running our
leveraged loan program is to also do credit worthiness. Many of the larger municipalities are
more credit worthy than other types of institutions and farmers. This is not a situation with the
SRF where can necessarily exclude a group of individuals to have a better SRF My
suggestion is to have a bigger tent, and get those municipalities into the process doing their
point source work, which is important to maintain water quality, not necessarily to
improve in some cases, but to keep it where it is right now We need these larger
municipalities to provide the credit history and the credits necessary to make the program
cost efficient and cost effective
J c p nse I have two thoughts. One, Ohio does not turn communities away or
nonpoint source projects away it is not that they have money leftover, not being used

Public Workshop Summary
\Vhen Ohio does their business plan, the decide whether or not the need to go out to the
market and leverage more funds The do this based on the number of applicants the’. see
coming in for loans So, Ohio, in essence, has an unlimited suppl\ of funds They can
always go to the market and sell more bonds
The second point I would like to make is that not all pollution is the same Different t\pes
of pollution may affect different types of problems a State may be having Just to use the
Ohio example, they identifi human health and aquatic problems States must make a
decision with their funds as to how they will prioritize Such decisions impact the types of
projects that rise up to the top of the priority list It is not easy to simply say three smaller
nonpoint source projects are going to equal the environmental benefits of a much larger
point source project The two types may be creating too entirely different types of
pollution problems. However, it also can work in reverse as to say that, yes, three smaller
nonpoint source projects may give the same type of pollution solution. However, it
may not. This is part of the decision that the State makes when they establish criteria and
rank priorities.
6) Public Comment How are priority lists coordinated with enforcement actions (e g,
CSOs and enforcement decrees)a
Panel Reap ns It is difficult because the SRF tries to fund and help enforcement areas. They
are ranked just like any other project and what the effect of the project will be is the main
consideration for funding
7) Public Comment \Vhen is the TUP created in Rhode Island and when are the projects
prioritized When is readiness to proceed taken into consideratio&
Panel Response One month after notification for project applications, the public notice and
the whole process is one year long \Ve do not turn away any projects, except major treatment
plant expansions and upgrades expected this year. The relative ranking is now becoming more
8) Public Comment The SRF and section 319 are seen as separate problems in Congress SRF
funds should be used for infrastructure and more money should be put into section 319 for
nonpoint source projects. American Rivers is working on getting more dollars into the new
1-louse and Senate bills for nonpoint source funding Phase II stormwater regulations are now
coming into play Arc you seeing more of a demand for this type of funding
Panel Response . It is a disservice if we see this problem as a point source versus a nonpoint
source problem. These are not separate problems Funding should not be at the expense of
the other Nonpoint source project funding will take place if projects apply Melding the
section 319 and the SRF programs is an interesting concept also. Stormwater regulations
have not yet caused more awareness about the affects of noripoint sources as they move
into Phase 11 This is a sleeper issue and I am not aware of what’s going to be brought about
and why it is important Stormwater can bç perceived as another utility that you need a
pipe for The regulatory initiative will push stormwater

Public Workshop Summary
9) Public Comment Minnesota has t o times the demand for funds available Local
controversies and issues have driven the a areness of nonpoint source funding Other
municipalities ill see an increased demand hen localiied problems arise Section 319 is
not the only solution for nonpoint problems A mixturc of section 319, the SRIT and
other programs can be used to address nonpoint problems Competition with municipal
point source programs and nonpoin source programs would be destructive If citizens saw
a rise in their water and se er bills that the attributed to funding going to farmers for
nonpoint programs, it would result in a bad battle
10) Public Comment What is the role of other Federal funding programs besides section 319
and the SRF What is their magnitude of impact (eg, NRCS? What is their role in State
p rog ra ms
11) Public Comment The mixture of programs work well together because they ‘work at the
local level and let landowners know which program or combination of programs work the
best for them Combined applications are available in Minnesota State grant programs,
such as the \Vastewater Infrastructure Fund, for lower income municipalities supplement
the SRF to cover additional costs so water bills are not excessive.
12) Eublic Commenr This is Deja vu of the 1960s and 1970s with construction grants The Public
Health Department then had the same arguments There are not enough dollars and the
large sewer construction projects get the most funding dollars First centralized systems
and now decentralized systems are supported We need to have education as to what is
best. \Ve need ways to deal with the systems in place today That States are funding nonpoint
projects is encouraging, and education is happening
The big guys are not letting the little guys have the funds Engineers and contractors are not
going to deal with the smaller programs because there is no money in them. Public health
engineers deal with the smaller issues. State agencies today vill have to take the role and
responsibility of dealing with nonpoint source problems
Session IX: How to Tackle Environmental Performance Tracking
Focus: This session discussed the measurement of environmental performance
Speakers: Bob l3astian, US EPA and Mary Matella, Tetra Tech
Summary: The Clean Water Needs Survey (CWNS) database is one environmental performance-
tracking tool available to the EPA The CWNS database allows stakeholders to consider the overall conditions
and stresses affecting a watershed, not just the condition of an individual water body or discharger. The
database can be used for planning and priority setting, TMDL development, modeling, environmental indicator
development, and watershed-based needs accounting C\VNS includes data on nonpoint sources, stormwater,
and wastewater data. C\VNS is attached to a GIS program, which allows exact pinpointing of potential
pollution sources, and allows more exact watershed-based analysis of problems C\VNS information can be
anal zed in combination with hvdrograph , soil and water ualit ’ data, socioeconomic and infrastructure data,
land use patterns and transportation ner orks

Public Workshop Summary
CVvNS data provides information on total needs iii mans different ways These include b State or watershed,
coastal versus inland needs, watersheds with the greatest needs, and needs per mile/acre of impaired river \Vith
the use of G1S these needs can be mapped and displa ed for use b managers and stakeholders CWNS has the
capability to provide technical data such as population ser ed by a facility, flow capacities at treatment plants,
effluent data and concentration and BMP uses in the area The information can help managers with TI IDL
cle elopment, water quality modeling, and planning and priority setting Past data can be compared with current
data to show improvements or changes in water c 1 ualitv
Input: 1) Public CommentS \Vhat is the quality of the water data like What water ciualitv data do
you accept and reject
Panel Response . The water c 1 uality data can be proven and measured The cost estimates
float around Integrating cost numbers and water quality data is like doing art and science
at the same time Historical data that goes into STORET is used
2) Pithlic Cornniern . Eliminating some sanitary sewers in some areas would cause problems
knowing what the baseline would be. \Vhat is the cost that is currently there \Vhat
loading would be reduced What loading is there currently that would need to be reduced
Panel RespQ.nse. Broader data from open and closed shellfish beds and recreational beach
closures How did we use these resources with historical events If you could control raw
releases that end up closing beaches, the communities that have experienced these closures can
give you a very distinct economic effect Rural effects are harder with only water quality data and
mixed problems Point sources are a generic lumping of point and nonpoint sources.
3) PubliCs miri n \Vhen setting economic priorities how does contingent valuation factor in
and non-quantifiable issues taken into consideration
4) P thhc Comment Reductions from nonpoint sources are hard to determine, but EPA is
working on this They are trying to work with trading systems for phosphorous in the
Panel Response POT\Vs are also having problems with determining reduction levels
depending on such conditions as flow, weather, and drought. The Needs Survey
normalizes this data and makes it easier to determine reductions.
5) Public Comment Unanticipated consequences include the increased participation with
local agencies, all working on the same goal
6) Piibiic mment The data is good for quantifying current loads to impaired water
bodies, but what about the use of this data for prevention strategies such as land
management and acquisition Is the only option modeling?
Panel Response In most cases, modeling is best to see outcomes and predict what you can
achie e. The most interesting part of this analysis was looking back to see what you get
after the fact and what you can put a quantity to

Public Workshop Summaiy
The niost interesting data ; as seen with secondary treatment Over thirty ears, the secondary
treatment olurnc sta ed the same with more advanced treatment and less ra\ se\ agc The
population served b treatment plans doubled, ho e er the mass load decreased b 2/3. The
still have a iable fishing industry Toxic loads are still a problem, but in five to ten ‘ears this
may also l)e solved Removal efficiencies must continue to increase Broad economic benefits on
a National level are ver hard to determine, but on an individual project level, improvenieiits
can be seen
Session X: Encouraging Efficient \Vastev;ater Management
Focus: This session discussed tools used for efficient management.
Speaker: Angela Anderson, US EPA
Summary: EPA discussed how efficient wastewater management started at the local level and at the local
level EPA has identified some key principals to reduce the infrastructure gap EPA suggested promotion of
sustainable systems, reliable decentralized wastewater management, watershed-based decision-making and
technology innovation The EPA stated that sustainable wastewater systems involve managing the technical and
financial aspects of the system This included cost-based and affordable rates for customers.
The EPA also suggested consolidation and restructuring and using asset management and environmental
management systems (EMS) in the wastewater industry for better management Consolidation and
restructuring would take advantage of economies of scale and public/private partnerships to make the
industry more profitable and competitive Asset management and EMS provide structure to wastewater
managers and provide a better inventory of assets and their condition, rehabilitation costs and
replacement needs, reduction of risk of noncompliance, and improvement of the overall operational control
of the plant The EPA has been working with organizations to promote EMS with their EMS Framework
Project, making available to utility managers various management programs and techniques that are available
EPA recognizes that well managed decentralized waste vater systems can be a cost-effective and long-term
option for wastewater treatment Reliability and management problems are the main concerns for smaller
Session X I: Discussion
Focus: This final session helped EPA summarize the findings of this workshop and will help the
Agency prepare a report to Congress
Input: 1) Public Comment Funding has been available for large-scale treatment plants with the
SRF. They correct water quality problems. However, the ’ also induce gro rh and storm ater
impacts that are so great the water quality problems are worse than before. Stormwater
pollution should be addressed in concurrence with, or before, treatment plant pollution

Public Workshop Summary
i\ir depositions from treatment plants that remo e nitrate from the water are causing problems
in Florida Treatment plants use so much energ to remove nitrates arid create the same amount
in exhaust gasses that rain back out into the water There is zero gain The environmental review
process might be inadejuatc The New York Times has been co ering water suppl\ arid demand
issues th the growth around New York Cit \ ‘hen sewers are built the population follows
2) 1?ublicC mment Communities in Rhode Island have comprehensive plans for growth
and development Facilit\ plans sometimes have problems and they address the issue of
mitigating growth with facility construction Secondary growth is addressed in Rhode
Island Environmental review would not help priority determinations, it is more
important to the final approval of funding and planning
3) Public Comment Additional resources for GIS and data systems are very important. New
technology should be used and funding should be spent in this area. Nationally an
integrated database with air, water, and other media should be put together. In \Visconsin a
permit system has been established to keep the backlog down and manage the permitting
system Good data decisions are important
4) Public Comment All cities have areas that would like to be annexed on the city sewer
Eventually with growth, these areas need to be added on, and other ratepayers will feel the costs
of expansion Big pipe operations are not always the answer, sometimes, small rehabilitation
projects need to be done before there is a bigger problem The most efficient way to spend the
money needs to be looked at and the most environmentally sound option explored.
5) Public Comment We need to use the programs in place and change those Principal
forgiveness in the new bill is very important Farmers run nonprofit businesses and
conduct conservation practices such as no till and stream restoration for conservational
purposes only The cost to the farmer is on average 8% more to do so
6) Public Comment Long-term farm conservation practices can make farms more money.
However, the short-term expenses are great
7) Public Comment Barriers can be addressed with new money infused into the system
Administrators, communities, and States need more funding. Like the TEA21 regulations, a little
money goes a long way. EPA could look at these transportation bills for improvements to water
quality programs


EPA’S Response to Questions from Congress
5. EPA’s Response to Questions from Congress
Congress asked EPA five questions about Federal \ ater c 1 uaIir funding programs These questions are hstcd
below, and the are followed by ans ers that EPA offers after participating in a public meeting to explore the
topics and to hear from stakeholders
Onestic,, I A ie the State Revo/t7ng Fund (‘CW.S RF ) and other Federal /i ,ia ,iczo/ assistance p1 o gianis achierii g niaximini,
mater qiiali y protection in terms of pub/ic health and emironmental outcomes?
i\nswer \X hile it is clear that very significant benefits result from water qualit protection measures
implemented across the country, it is not currently possible to determine if the financial
assistance programs are truly maximizing water quality protection in terms of public health and
environmental outcomes This is the case because there is no centralized coordinated reporting
effort that compares types of projects and outcomes under various conditions that would be
necessary for such an assessment
However, while the question of maximization of benefit is impossible to report on at this time,
it is possible to deduce that a very high level of protection is provided through the CWSRF
program due to the priority setting process used by States The Clean \Vater Act establishes the
C\VSRF program as a financial program, however, States decide which projects to fund based
on water quality and public health parameters associated with individual projects applying for
assistance Projects that \vill address the most serious problems receive priority funding over
other projects This process ensures that final projects selected address the most severe water
pollution problems. For example, a State may consider whether the project being funded will
address discharges affecting a high priority watershed or a public drinking water source. Using
this approach assures that the CWSRF is funding high priority projects and achieving a high
level of water quality protection in terms of public health and environmental outcomes
Question 2 Are alternatues other than vastewater treatment p/ants and co//ectio,, sJstems eli ,gib/e for Federal assistance, and,
if not, w/ y ,iot?
Answer The CWSRF program is available to fund a wide variety of water quality projects including all
types of nonpoint source and watershed protection or restoration projects, onsite and
decentralized treatment system projects, and traditional municipal \vastewater treatment system
projects Title VI of the CWA establishes the following as eligible for C\VSRF assistance.
1 Planning, design, and construction of Publicly-Owned Treatment \Vorks (C\VA section 212)
(a) Collection projects including Combined Sewer Overflows/Sanitary Sewer Overflows
(b) Treatment including advanced treatment
2 Implementation of nonpoint source projects (C\VA section 319)
(a) Private or public borrowing for projects allo ed
3 Development and implementation of management plans in 28 National Estuary Programs
(section 320)
(a) Private or public borrowing for projects allowed

EPA’S Response to Questions from Congress
Most CWSRF funding has been provided for important municipal astewater treatment
projects, ho e cr mans other projects have been funded through C\ ’SRF loans, nonpoint
source grants, antI through the National Estuary Program including
• Onsite s stem rcmediation
• Storni ater best management practices
• Construction best management practices
• Agriculture best management practices
• Riparian corridor protection/restoration
• \Vetland protection/restoration
• Habitat protection/restoration
• Underground storage tank removal
• Brownfields remediation
n 2000, 33 percent of all C\VSRF loan agreements were made to fund nonpoint source or
estuary protection projects Further details on the operation and activities of the SRF and
other Federal funding for water quality projects are provided in other sections of this report
Question 3 Do the przorz y rankuig ystems which States use to priorrn e eligible treatment works projects pro per/y account
for environmental oil/comes, inc/tiding indirect lnr ac/s from air deposition of treatment p/ant effluent or
storm water runoff from sewer construction-induced growth?
Answer: The priority ranking systems that are in use by States to prioritize eligible treatment works use a
variety of factors to evaluate projects and do properly account for environmental outcomes
such as reduced nutrient loadings However, priority systems do not typically directly address
impacts from air deposition of treatment plant effluent or from stormwater runoff from sewer
construction-induced growth Generally, State/Regional experience has shown that those
impacts are minor and are properly addressed through the States’ environmental review
State program priority systems typically include a mix of evaluation criteria such as:
• Public Health - What public health concerns will the project address For example, will it
address a groundwater or surface water supply contaminanon
• \Xfater Quality - Is the project addressing a discharge from a municipal facility that is out of
compliance with permit limits Which of the receiving water’s designated uses are addressed
by the proposed project drinking water, swimming, fish consumption, or shell fishing Is
the discharge affecting high quality water bodies
• Financial Distress - Is the project to be undertaken by a financially distressed communlty
• Project effectiveness - How and to what extent will the project eliminate or mitigate the
problem \Vill the project resu]t in reduced violations, restoration of designated uses, or
reduction or elimination of public health threats?

EPA’S Response to Questions from Congress
Once projects arc selected to proceed based on the established priority systems and funding
availal)ilit-v thc are required to conduct a detailed environmental rcvie to determine whether
the project could have unintended impacts on the environment. A CWSRF program
environmental review follows the requirements established by the National Environmental
Polic Act of 1969 (NEPA) En ironmental re ie compliance is achieved either through
direct application of the Federal NEPr\ standards or through application of a federall
approved State environmental reviev process
State environmental review processes include consideration of how projects could affect the
environment and require review of the project’s potential impact on air, threatened or
endangered species, open space, historical and archeological resources, and other impacts
addressed in Federal, and often State, environmental laws.
Evaluation of environmental impacts from air deposition-related pollution caused by the
projects are addressed during the environmental review process. States require that project
sponsors develop environmental review documents that address all pertinent information
Instructions for developing what States often call “environmental assessments” or
“environmental information documents” invariably require that potential impacts of air
emissions from the facility be evaluated and documented to show that the project complies
with the requirements specified in the State’s approved State Implementation Plan under the
Clean J\ir Act.
Experienced State and Federal personnel that were contacted on this question indicate that
when appropriate they request air emission calculations to be done for wastewater treatment
facilities To date, these assessments have shown very low air pollutant levels with no impact on
area air quality Because emission levels are so low, States have not found it necessary to require
measurement or modeling of air deposition pollution effects of waste vater facility emissions
State environmental review procedures also require that any and all potential water-related
impacts be evaluated, including stormwater runoff as a short-term direct impact and as
secondary impact The State of Texas’ SRF program requirements are typical Under Section
V Environmental Impacts of the Proposed Project, project sponsors are required to evaluate
and report on the impacts that can be attributed directly to the proj ct The following
requirements show how stormwater impacts from construction are addressed
“Short Term Impacts -
a De.ccnbe alterations to land forms, streams and natural drazna ge patterns [ Clean lVaterAc4 as amended]
b Describe the extent to which area watercourses imIl be affected bj’ siltation and sedimentation Spe ’ the
erosion and sediment runoff control measures to be emploj’ed” (excerpt from the State’s Instructions
for Preparing an Environmental Information Document)

EPA’S Response to Questions from Congress
Texas also requires that scconcIar impacts that ma result from projects he considered,
including storniwater runoff from sewer consrruction-induccd growth The following is an
e ccrpr from the State’s Instructions for Preparing an Environmental Information Document
“.S econda y impacts -
1 7 he impacts of future development accommodated I y the project on 1(1/id use must be assessed Desmbe a ’
changes in the rate, deiisqy 01 pe of dci e/opment mc/uiding residential commercial, industrial, recreational
and open space that niqy result. fExecuitii.’e Order 12898, Environmental Justice, Farm/and Protection
Poli y Act, coastal Bai riers Resources Act, Coastal Zone Management A ct, Executive Order 11988,
Flood Plain IV! anagement, Executive Order 11990, Protection of Wetlands
3 Relate population and land use changes to effects on water quali ’ and avazlabuh ’ ‘su face and
,groiindiva/er,,l [ Vafe Drinking lVaterAct, (Jean WaterAct, as amended]
4 Discuss the eJJect of the projected gronith on pubhc services, such as water suppf future n’asteivater treatment
needs, so/id waste dusposalfacihtzes, etc [ cafe Dn ikin g Water Act, Clean Water Act, as amended)..
6. Describe horn anticipated land use and economics related to the project conform or coq/7ict with exzshn,g
land use planning and the pe of growth desired bj’ area residents fExecutive Order 12898,
EnvironmentalJustice, Farm/and Protection Poli 9 ’ Act]
7 Develop, in detail, aiiy impacts of growth and related development encouraged or accommodated bj the
proposed project 0/i envuronmenlalfy sensitive areas, including flood plains, wetlands, threatened or endangered
species, critical habitats, and an) other environmenta/fy or culturalfy sensitive areas. Demonstrate, 1
contrasting the projected land use patter/is wi/h maps of the sensitive areas, that the proposed project nit 11 not
through its effects on the rate and! or location of future development adverse!y aJJect these e,wironmental/y
sensitive areas if such is unavoidable, describe what measures maj be taken 4y the applicant to reduce the
potential adverse secondarj impacts to acceptable levels.”
Questzon 4: Are recipients of Federal assistance required to adopt appropriate financial planning methods, ,phicl, would
reduce the cost of capital and guarantee that infrastructure would be maintained?
Answer To be awarded a CWSRF capitalization grant a State must comply with certain Federal
requirements. One of these requirements addrcsscs assistance recipient accounting and auditing
practices Under this requirement the State must agree to require recipients of SRF assistance
to maintain project accounts in accordance with generally accepted government accounting
standards as established by the Governmental Accounting Standards Board (GASB) Recently
GASB issued a new set of requirements for governmental financial reporting. The new GASB
Statement 34 on Basic Financial Statements represents the most significant change in the
history of governmental financial reporting. Under GASB Statement 34, local governments
must adequately account for and report on capital asset valuation to comply with generally
accepted government accounting standards

EPA’S Response to Questions from Congress
GASB Statement 34 specifics a particularly helpful reporting approach for those governments
that \\ ish preserve.their infrastructure assets into the future using asset management techniques
Many governments are expected to Cmplo\ asset management tcchnic 1 ues for aste ater
systems The information provided in the new reports required under GASB Statement 34 will
provide insight into a government’s care and maintenance of CWSRF funded facilities h
specif ing annual maintenance e\pcnses, preser auon c pcnscs (outlays to c\tend the useful life
of an asset) and asset additions and improvements The implication of the approach is that
communities will be better equipped to identih and make needed investments to ensure the
long-term preservation of infrastructure assets
The C\VSRF program also requires that a dedicated source of repayment for a loan be
identified and pledged for repayment prior to receiving a loan In most cases the dedicated
sources of repayment have been revenue generated from user charge systems that are designed
to cover the costs of operation and maintenance and capital investment in the facility Man)’
States require communities to develop adequate user charge systems These user charge
requirements stem in part from one of the original Federal requirements that stated that
communities constructing section 212 publicly-owned treatment works projects before fiscal
year 1995 must develop user charge systems and have the legal, institutional, managerial, and
financial capability to construct, operate, and maintain the facihty (section 204(b)(l))
The combination of the requirements helps assure that assistance recipients will adopt and
follow financial management practices that are conducive to maximizing the life-span of SRF
funded infrastructure
Question 5 Have sufficienipeiformance measures and information ystems been developed /0 assure the (‘on,gress that future
Federal assistance u i/I be ipent wiseLy bj the States?
EPA recognizes that efforts to accurately track overall performance are critical to ensure that
water quality assistance programs effectively meet their intended environmental goals Many
groups induding EPA, States, Congress, and interest groups arc interested in the cost
effectiveness of Federal funding for vastewater treatment improvements and the level of
associated benefits for National water quality
Currently, through EPA’s long-term strategic planning process, the Agency develops a suite of
performance measures and information systems to provide information to document progress
in water quality programs However, there ate efforts now underway to enhance data sources
and measures that will go beyond the current system to gauge whether Federal assistance is
spent wisely by the States First, EPA is working with the Office of Management and Budget to
develop more meaningful CWSRF program performance measures under OMB’s ongoing
Program Assessment Ratings Tool (PART) process Second, the Agency has undertaken an
effort to study the environmental benefits provided by the CWSRF program in a year long
study This study will identify data needs for evaluating CWSRF program benefits, explore what
is available through current environmental monitoring data at the State level, and chart a course
for addressing deficiencies in environmental performance data in the future. Each effort is
confronted by the fact that accurately conducting environmental performance tracking is a

EPA’S Response to Questions from Congress
challenge at the National level It is difficult to discern the overall collective effects of mans
discharges to a particular area or arershed
Using information that is available, each ‘ear EPA reports on long-term strategic goals that
identif the en ironmental results the Agenc is orking to achieve AS required under the
Government Performance and Results Act (GPRA), the Agenc develops an annual plan that
translates these long-term goals and objectives into specific actions to be taken and resources to
be used during the fiscal sear See EPA ’s Annual Report (http //w wcpa gov/ocfo/
flnstatement/200lar/200larhtrn) for additional information on strategic goals for the Agency
The Agency is also working to improve the performance information available to Congress and
others For example, in a recent EPA report titled Progress in \Vater Quality An Evaluation of
the National Investment in I’vlunicipal Wastewater Treatment, EPA c\plores how biochemical
o) )’gen demand (BOD) in POT\V effluent and dissolved oxygen (DO) levels downstream from
point sources have changed over time. Nine case studies were documented and analyzed
through this 450-page technical report Models were then created based on these highlighted
case studies to allow EPA to quantify potential water quality improvements by POTW treatment
This study helps to illustrate that modeling can be used to demonstrate the benefits of clean
water investments, successful projects, and for determining compliance outcomes on a National
basis EPA is currently working to enhance available water quality modeling capabilities A
newly modified Clean \Vatershed Needs Survey (C\VNS) and other data sources will provide
information for tracking wastewater needs and spending Also, in an effort to gain a
comprehensive understanding of overall environmental performance, EPA developed BASINS
(Better Assessment Science Integrating Point and Nonpoint Sources), a Geographic
Information System (GIS)-based water quality modeling program to track environmental
performance using data from many sources including the CWNS database
In the past, efforts to measure environmental success, including watershed-based needs
accounting, were limited by an inability to track data by geographic location. Newer GIS
models, such as BASINS, can be used to coordinate such information as nonpoint source,
storniwater, and waste\vater data through time and by location Through GIS analysis, it will be
possible to analyze water quality in combination with relevant socioeconomic indicators in an
area including population demographics, land use patterns, transportation networks, and other
infrastructure indicators. As these models are refined over time, performance tracking activities
will become easier for all interested parties including Congress, the public, and State, local, and
Federal authorities.

APPENDIX A: House Committee & Conference Language
House Committee & Conference Language
co, ference Repon’ on F! R. 2620, Depaitments of l”e/erans
‘ JJnis and Ho:isin and Urban Der’e/oprnent, (lad
Independent A geiicies Appiopnations Art, 2002 (‘House of
Rep reseiji atn ’es— 11/6/01)
“The conferees expect the Agency to develop a
broad working group to review and address the
spectrum of wasrewater Issues as outlined in the
House Report accompanying H.R 2620, request that
the Committees on Appropriations be kept apprised
of all activities of the working group, and further
request that the working group, with the assistance of
the Agency, prepare and submit to the Committees
on Appropriations by July 15, 2002 a report
addressing all matters as outlined in the House
Report as well as those additional issues determined
appropriate by the working group”
Committee Report—House Rpt 107—159—
Departments of \ 1 eterans Affairs and Housing and
Urban Development, and Independent Agencies
Appropriations Bill (7/25/01)
“Recent studies by EPA and others suggest that there
has been a substantial deterioration in the Nation’s
wastewater infrastructure, including aging wastewater
treatment plants and leaking sewer collection systems
Substantial contributions of wet weather flows and
other nonpoint sources of pollution have also been
identified In addition, the additional expenditures
needed to achieve TMDL requirements and
groundwater protection in future years are expected
to be extensive. Because the Federal government
funds only a portion of wastewater infrastructure
investments, the States have urged maximum
flexibilir in their allocation of Federal resources, so
as to direct investments at the point source and
nonpoint source areas of greatest need Hov ever,
States also recognize that the ’ must be held
accountable to the goals of the Clean Water Act, the
Safe Drinking Water Act, and other wastewarer-
related Federal statutes The Committee is aware
that septic system repair and management projects
and other nonpoint source pollution prevention and
control measures, which can produce substantial
benefits of water quality protection, are not eligible
for SRF funding in most of the States Further,
many recipients of Federal wastewater assistance
have not instituted user fees to provide for long-term
maintenance and repair of the infrastructure, and the
results of that lack of maintenance are now evident.
To help address this situation, the Committee
strongly urges EPA to, within 60 days of enactment
of this Act, establish a working group of
rep esentatl\res from the State/EPA SRF Work
Group, the Environmental Council of the States,
Environmental Finance Centers, and centralized and
decentralized wastewater and nonpoint source
stakeholder groups to address the basic means by
which EPA may accord flexibility to the States and
yet also assure that Federal investments achieve the
greatest possible benefits Specifically, the following
questions should be among those addressed by this
new working group (1) are the SRF and other
Federal financial assistance programs achieving
maximum water quality protection in terms of public
health and environmental outcomes, (2) are
alternatives other than wastewater treatment plants
and collection systems eligible for Federal assistance,
and, if not, why not, (3) do the priority ranking
systems which States use to prioritize eligible
treatment works projects properly account for
environmental outcomes, including indirect impacts
from air deposition of treatment plant effluent or
stormwater runoff from sewer construction-induced
growth, (4) are recipients of Federal assistance
required to adopt appropriate financial planning
methods, which would reduce the cost of capital and
guarantee that infrastructure would be maintained,

APPENDIX A: House Committee & Conference Language
and (5) hake sufficient performance measures and
information s\stems been de eloped to assure the
Congress that future Federal assistance ill be spent
wisely by the States
The Committee expects to be kept appraised of the
development of this ne’s working group and further
c pects that the group will prepare and submit to the
Congress by July 15, 2002, a report addressing the
aforementioned uesuons and other related issues it
deems relevant”

APPENDIX B: Registration List and Workshop Agenda
Registration List and Workshop Agenda
Paymg for Water Quality Workshop
March 14-15, 2002
Registration List
F x
Executive Director
Rural Community
Assistance Program
radams@rcap org
SRF Branch
EPA Headquarters
ames george@epa gov
Protection Specialist
EPA Headquarter8
anderson angela@epa gov
Coordinator, Office
of Environmental
Georgia Department of
Community Affaus
laskcss Jdca state ga us
Ayres Associates
barryb ayresassoct’,ics com
PA Headquarters
basiian robert@epa gov
Senior Legislative
The Trust fbr Public
stint laaira®tpl org
SVP National
The Trust for Public
kathy blaha tpl org
Direcuor of Water
Rural Utility Service
lbossman@rus usda gor
Construction Assistance
304-558-063 x326
RBRODERSEN@rnail dep state wvus
Financial Analyst
EPA Region 5
brown yvonnee@epa gov
1idwest Assistance
Program, Inc
kbmap@bevcomm net
Acting EQIP
Program Manager
edward brzosiek@usda gov
Associate Director,
Jational Cattlemen’s
Beef Association
Assistant Director
Minnesota Department
of Agriculture
Paul Burns@state mn us
Legislative Liaison
State of Wisconsm
julia chemouti govsiate Wi US
Division Director
Thomas Christensen@usda gov

APPENDIX B: Registration List and Workshop Agenda
Paying for Water Quality Workshop
March 14-15, 2002
Rcgistrauon List
Staff 1)ucctor
Ens Ironment and
Public Works
Kcn_ConnoH cpss Scrijic gus
Planning, Pro 1 eci
and Finance
Pennsvl ’ania
Department of
cci,rrocao@state pa us
Staff Engineer
Companies, Inc
ccronisc@corrpro corn
Region Ill C”X’SRF
EPA Region 3
cunnrngham magdalcne(äjcpa gov
Bcvcndge &
Diamond, PC
rdavis@bdlass corn
Clean Water
Revolving Fund
EPA Headquarters
dorfman iordan@cpa gov
Patton Uoggs LLP
rdowns pattonboggs corn
Research Manager
The Trust for
Public Land
caryn ernst@tpl org
Clean Water
Resolving Fund
EPA Headquarters
Oirbcr kia3jcpa gov
Associate Director,
Van Ness Feldman,
spft vnf corn
Gaghardijoel®hotmail com
Nonpomt Source
West Virginia
Department of
agale niaII dcp state w% us
Legislative Affairs
Association of
Sc erage Agencies
lgarrigan arnsa_cleanwater org
Hach Company
mgibson hach corn
Department of
don_hackler@ocloc stale ok us
Esecutive Director
National Onsite
thbonncr(6jhanlfin corn

Special Assist to
the Governor
State of Michigan -
Washington 081cc
hartgrnsek niichtgan gov
Manager, Water
Ltmer Cnloradu
River Authority
lhatzcnb@lcra org
Cl i rd
Department of
hcckathc@statc mi us

APPENDIX B: Registration List and Workshop Agenda
Payrng for Water Quality Workshop
March 14-15, 2002
Registration List
Clit,J, \Viicrshed
Asstssnient md
Susquehanni Risir
O.msm Conintisqion
dhciijiLr l’srhc nLI
Pres idmnt
Utility Cap.icttv
Cmmrpor non, Inc
mikehmncs@mmdmprtng con,
Utility Cap icttv
Corporation, Inc
EPA Headquarters
hogye stcphcn@ep.m go 5
Trainmg Center for
Small Communities
jhoornbeck@rnail.ncsc wru edu
Software Sales &
Support Manager
mah dhigroup corn
EPA Headquarters
hudson Joycc@cpa gov
Sewage Equipment
Sales & Service,
jllohnston@ sorldnel alt net
Director 6r Public
Hcalih Area VII
Department of
Public Health
pha7ens Jyahoo corn
Jord- mn
Potomac Riser
roherijl944@y’mhoo cons
Loan Specialist
Rural Utility
rkelly@rus usda gov
E.xecuttsc Director
Association of
Sesvcragc Agencies
kkirk@amsa-cleanwater org
Teira Tech
kncrrh@tctratech-fb corn
D.m sw s
Water &
svssemim@crols corn
Director, Municipal
Support Division
EPA Headquarters
Assistant Director,
Bureau of
Department of
Natural Resources
larsor@dnr state wi us
Associates, Inc
Pio@LombardoAssoctatcs corn
Department of
225-765-0745 caiherme_I deq state Ia us
Principal Sanitary
Rhode Island
Department of
jtnannmg dern state rius

APPENDIX B: Registration List and Workshop Agenda
Paymg for Water Quality Workshop
M .irch 14-15, 2002
Rcgistr.clion List
H, sood
Ours. so Chi iJ,
Programs M.’ico
havoood_martin@nmenvstate nm sic
Program Anal’.st
EPA Headquarters
mason michael cpa go’.
Program Manager
dave masóui@usda go’.’
National Onsite
topucat@aol corn, nowracd@aol corn
SRF Coordmaior
Department ol
mcalhsteriarry deq state orus
Program Manager
Rural Community
Assistance Corp
karenm@rcac org
Senior Policy
Advisor! EPA Desk
The Nature
jmcgoldnck@tnc org
McLel land
Capitol Water
Treatment, Inc
paulamclelland@aol corn
EPA Headquarters
mcprouty tmmothy@cpa gov
Special Protects
Texas Water
dave mitamura@iw’db state ix us
Ed’.’. in
Execuimse Director
Center for
edwinm@eastcrnnc-ced org
EPA Headquarters
romeO nandi@epa gov
Fmance Center
nees®mdsg umd edu
Coalition for
Alter native
Va!crIe5O8@aol corn
Deputy Exec
Water Environment
cnoss( )s ’ .erlorg
EPA Region 7
novak judy®epa gov
Legal and Policy
Governor Gutnn of
v1oldenb govsiate.n ’ . US
Chief; Northern CA
Ofi ce, Water
EPA Region 9
ong lOhfl@eP2 guy
VP Applied
Avres Associates
otisr®avresassoctates corn

APPENDIX B: Registration List and Workshop Agenda
Paymg for Water Quality Workshop
March 14-15, 2002
Registration List
Cornmunui Ri crs
Arnert,.in R.ners
bito amriv rs org
Stream Partners
Vest Virgmua
Department of
304-558-6649 x329
Jpauer@ni.ul dep 5taie WVUS
Principal Assistant
‘02-573-0260 x 2 30
vicki puitus@niail slate ky us
On-Site Systems,
onstir nsIndsprmg corn
On-Site Systems,
onsite mindspr eng corn
xeIon Praser
david pillcr@exeloncorp corn
Rural Utility
mplank@rus usda gov
Clean Water
Revolving Fund
EPA Headquarters
plait sheda@epa gov
Program Manager
Rural Community
Assistance Corp
9l 6 - 4 47-9832x121
rprmce@rcac org
Director of Science
& Technology
4ational Ground
Water Association
sragonc ngssa org
Section Chief
Department of
Litural Resources
ranihar@dnr stair wi us
Bio-Microbics, Inc
rrebori@biomicrobtcs corn
Research Assistant
Environment and
‘ubhc Works
lryan_Richardsen eps senate gov
General Manager
937 - 22 3-l 2 78x3221
nrobmetie@conservarlcy corn
Sciences, Inc
arogers@irnsi2000 corn
‘rogram Manager
Association of
County & City
-lealth Officials
2 O 2 - 783 - 5 550x245
kroof®naccho org,
hurquhart®naccho org
Visitmg Scientist
EPA & Btologtcsl
and Agriculrural
ngmeermg, NC
State Unrversity
and 919-515-6791”
Rubin Robere epamail epa gov
Clean Water
scher@nrdc org
Director of
Amencan Water
Works Service
Compat iv
sschmidt@amwaler corn

APPENDIX B: Registration List and Workshop Agenda
Paymg for Water Quality Workshop
March 14-15, 2002
Registration List --
Scho artz Vater Action
pschwartz@clcanuatcr org
Clean Water Revolving
EPA Headquarters
scott ckora@epa gov
Community Services
Association of
Counoes (NACo)
jshedloc nato org
Environmental Engineer
EPA Headquarters
Singh Gajmdar@epaniatl cpa gov
Senior Economic
Development Finance
Department of
jack_smid@odoc state ok us
Protection Agency
gregsmith@epa state oh us
EPA Headquarters
starks bernhta@epa gov
Director, Clean Water
.Jatural Resources
Defense Council
nstoner@nrdc org
National Small
Floss s
tsuhrer@wvu edu
Sea Grant ICnauss Fellow
EPA Headquarters
s arruood stacy@epa guy
Fmancial Analyst
EPA Region 5
tansey sstlllam@cpa guy
Environmental Engineer
Department of
tieegarden staie mi us
Water Environment
sthomas wcLorg
Clean Water Revolving
Fund Manager
EPA Region 10
mckermichel1e epagov
Bracy Tucker
Brown, Inc
tracytuckerbtb@msn corn
Regulatory Engineer
American Vater
Works Association
svta@awwa org
Von Feck
Clean Water Revolving
EPA Headquarters
Program Director,
Construction Assistance
Department of
dwwampler deq state Va US
Deputy Enecutise
Administrator, O8 ce of
Project Finance and
Construction Assistance
Te-cas Water
kevin ward@rssdb state t.s us

APPENDIX B: Registration List and Workshop Agenda
Paying for Water Quality Workshop
March 14-15, 2002
Registration List
W.i ,lcv
Research Associtti.
ENS Rccourci. ,,
bssaslev( cnsrcsourccs corn
Program Support
Department of
toni_webb deq state ens us
Office Coordmator
Ayres Associates
sseidmanp ayrcsassoceates corn
Wi11i irns
Water Environment
W i lson
The Trust for
Public Land
reid walson@tpl org
Urban Water
Natural Resources
Defence Council
jwoodccorih@nrdc org
Zakroci ski
Health Specialist
Frnance Authority
of Arizona
Jennifer Zakrowskl@wlfa state as us


APPENDIX B: Registration List and Workshop Agenda
March 14—15, 2002
EPA East Building, Room 1153
1201 Constitution Ave., NW
Washington, DC
The Environmental Protection Agen ’ will bold a pubhc workshop to discuss how
n’atcr quah ’ funding programs can be managed and enhanced to achieve the greatest
environmental benefit 7 he Committee on Appropriations, in House Report 107-
159, requested that EPA host this forum (1—louse Committee and Conference
language has been included)
This workshop will review EPA and date polio regarding use of the Clean Water
State Revolving Fund and otherfunding options for water pollution abatement 7 he
focus of the workshop is on funding programs as currenify authonr ed bj’ Congress
and will not address Federal legislative activities.
EPA has invited rep resentatives from the EPA/State SRF U ’ork Group, the
Environmental Council of the Slates, the Environmental Fmance (enters, and
cen/rah ed and decen/rali ed wasteivater and nonpomi source stakeholder gro ups The
genera/pub/ic is also encouraged to attend Participants will have the opportunz y to
open/y discuss concerns and possible solutions.

APPENDIX B: Registration List and Workshop Agenda
MARCH 14—15, 2002
March 14, 2002 TIME
i his session null discuss EPA ‘s goals for the iwo-dqy pubhc workshop
• EPA \Velcome, workshop purpose and objectives (Rich Kuhiman, USEPA)
• Agenda overview and introductions (I 1ark Kel]ett, Northbridge Environmental)
This session nut/I discuss how water qual: yprotechon efforts have been funded historzca/!y and how they are funded
todqy This session wiii a/so discuss future fundmg challenges and EPA principles to address the challenges.
• US History (Jordan Dorfman, USEPA)
— Funding levels and financing sources in the US
— Types of water pollution controls funded
— Results
• Future funding challenges \Vastewater Needs Survey and “Gap” report EPA principles
to address the “gap” (Angela Anderson, USEPA)
BREAK 1015
1 he Clean Water State Revolving Fund is the Largest source of water quah y financing assistance Manj’ workshop
registrants do not have an up-to-date understanding of the CU’/SRF program, and this session wi//provide an
• What is the CWSRF and how does it work (Stephanie VonFeck, USEPA)
— What projects are eligible under CWSRF
— What are State CWSRF programs funding
— How do they set priorities?
— How do States consider affordability
This session imliprovide an overview of other szg uJicant Federal sources of water quali financing
• Nonpoint Source and National Estuary Program Grants (Romell Nandi, USEPA)
— What is eligible
— \Vhat is being funded?
— How do they set priorities
• Other Federal vater program funding (Tim McProuty, USEPA)
— \Vhatiseligible
— What is being funded
— How do the ’ set priorities?

APPENDIX B: Registration List and Workshop Agenda
LUNCH 12 00 PM
7/n ee-four /hs of the U population are served bj centra/i ed ivastewater Irea/nient ‘s/emj, but one fourth are
ser,ed bj’ derenira/e ed sJstems 7 his session ii iii conszdei funding sources that can suppoi decent; a/i ed ii,astei, a/el
• Overview of decentralized aste ater issues arid funding challenges (Joyce Hudson,
• CWSRF policy and overview (Jordan Dorfnian, USEPA)
• CWSRF linked-deposit programs for onsite systems (Greg Smith, Ohio EPA)
lVastewater treatment is critical Jo the success of National water qua/l y effinls, but water quah inmatives are
zncreasing/y reco ,gm zng the importance of activities that mitigate other water qua/i ypro b/ems. This session
considers fundmg sources for waterthed protection and nonpozut source pollution contro/projects.
• C\VSRF policy and overview (Stephanie VonFeck, USEPA)
• C\VSRF pass-through loan program for farmers (Paul Burns, Minnesota Dept of
• Natural Resources Conservation Service project funding sources and examples Tom
Christensen, NRCS)
BREAK 3.30
VII GROUP DISCUSSION (depending on group size/preference) }45
• \Vhat are the major barriers to obtaining funding for decentralized systems or watershed
protection/NPS pollution control projects
• \Vhat can be done to increase the overall effectiveness of existing funding programs?
• \Vhat are the appropriate roles of the Federal government versus the State/local -
• What are the responsibilities of those seeking funding
• What changes should be made to the way programs operate?

APPENDIX B: Registration List and Workshop Agenda
Day Two: March 15, 2002
late Cl V S RFp o,guinis di eel Ilici, I ecow ccc to hIgb-pJ7oI7 pub/ic health and inn/er qua/I iieeds 7 las session
discusses how Cl J ’ S RE pi ogiams consider priorlO’ issues
Overview and CWSRF Perspective (Cleora Scott, USEPA)
— Overvie of pnorit ranking systems for eligible treatment orks
— Timing of environmental impact information during funding process
— C\X’SRF perspective
• Use of a watershed approach to prioritize point source and nonpoint
source projects
• EPA Funding Framework Policy
• Integrated priority setting in Rhode Island’s C\VSRF program (Jay Manning, Rhode
Island SRF)
• Integrated priority setting in Ohio’s CWSRF program (Greg Smith, Ohio EPA)
• Group Discussion State planning and priority setting challenges and solutions
BREAK 10:45
Peiformance measures and information ystcms assure stakeho/ders (such as the US Congress,.) that water qua/l y
assistance p ro ,giams use their resources wiseLy 1 his session discusses the measurement of environmental
pe formance
• Development of environmental benefit indicators (Bob Basuan, USEPA)
• How can impact be measured
Efficient management of wastewaler treatment cystems reduces environmental impacts and reduces costs. This
session discusses tools used for eJjicient management
• Sustainable systems (Rich Kuhlman, USEPA)
• Reliable decentralized wastewater management
• Watershed-based decision-making
• Session X Group Discussion
This final session will he/p EPA summaci e the jindzngs of ibis workshop as the Ageng’ prepares a report to

Office of Water
Clean Water State Revolving Fund Branch
U.S. Environmental Protection Agency
1201 Constitution Avenue, NW (Mailcode 4204M)
Washington, DC 20004
Phone: (202) 564-0752 Fax: (202) 501-2403
Internet: http //www epa gov/owm
July 2003