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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Evaluation Report
EPA Needs to Better Report
Chesapeake Bay Challenges
A Summary Report
Report No. 08-P-0199
July 14, 2008

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Report Contributors:	Rick Beusse
Hilda Canes Garduno
Bao Chuong
Dan Engelberg
Linda Fuller
Julie Hamann
James Hatfield
Bill Nelson
Abbreviations
CBPO	Chesapeake Bay Program Office
EPA	U.S. Environmental Protection Agency
NO2	nitrogen dioxide
NOx	nitrogen oxide
NPDES	National Pollutant Discharge Elimination System
OIG	Office of Inspector General
TMDL	Total Maximum Daily Load
USDA	U.S. Department of Agriculture
Cover photos: Clockwise, from top: Sailboats near Annapolis, Maryland (courtesy National
Oceanic and Atmospheric Administration); cows grazing near a stream within
the Chesapeake Bay watershed (courtesy Chesapeake Bay Program); a view of
the Baltimore Inner Harbor (EPA photo); and a blue crab caught in Maryland
(courtesy National Oceanic and Atmospheric Administration).

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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
08-P-0199
July 14, 2008
Why We Did This Review
This review summarizes
several evaluations conducted
by the Office of Inspector
General in response to a
congressional request.
We evaluated how well the
U.S. Environmental Protection
Agency (EPA) is working
with its Chesapeake Bay
partners in cleaning up the
Bay.
Background
The Chesapeake Bay is North
America's largest and most
biologically diverse estuary
and provides the region
economic and recreational
benefits. Nutrient and
sediment overloading is the
primary cause of water quality
degradation. EPA's
Chesapeake Bay Program
Office is charged with
coordinating federal, State,
and local partners to plan and
implement strategies to meet
the restoration goals of the
Bay.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click o the following link:
www.epa.aov/oia/reports/2008/
20080714-08-P-0199.pdf
Catalyst for Improving the Environment
EPA Needs to Better Report Chesapeake Bay
Challenges - A Summary Report
What We Found
Despite many noteworthy accomplishments by the Chesapeake Bay partners, the
Bay remains degraded. This has resulted in continuing threats to aquatic life and
human health, and citizens being deprived of the Bay's full economic and
recreational benefits. Through its reporting responsibilities, EPA could better
advise Congress and the Chesapeake Bay community that (a) the Bay program is
significantly short of its goals and (b) partners need to make major changes if
goals are to be met. Current efforts will not enable partners to meet their goal of
restoring the Bay by 2010. Further, new challenges are emerging. Bay partners
need to address:
•	uncontrolled land development
•	limited implementation of agricultural conservation practices
•	limited control over air emissions affecting Bay water quality
EPA does not have the resources, tools, or authorities to fully address all of these
challenges. Farm policies, local land development decisions, and individual life
styles have huge impacts on the amount of pollution being discharged to the Bay.
EPA needs to further engage local governments and watershed organizations in
efforts to clean up the Bay.
What We Recommend
In four prior reports, we made recommendations to the Region 3 Regional
Administrator to address individual sector needs (agricultural, developing lands,
air deposition, and wastewater). In this summary report, we are making
additional recommendations on overall issues to the EPA Administrator.
We recommend that the EPA Administrator improve reporting to Congress and
the public on the actual state of the Chesapeake Bay and actions necessary to
improve its health. We also recommend that the Administrator develop a strategy
to further engage local governments and watershed organizations to capitalize on
their resources, tools, authorities, and information to advance the mission of the
Chesapeake Bay, and provide the Chesapeake Bay Program Office with the
opportunity to comment on proposed rulemaking related to pertinent air issues.
EPA concurred with all of the recommendations in this report.

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I A %	UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
|	WASHINGTON, D.C. 20460
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OFFICE OF
INSPECTOR GENERAL
July 14, 2008
MEMORANDUM
SUBJECT: EPA Needs to Better Report Chesapeake Bay Challenges -
A Summary Report
Report No. 08-P-01 QQ ,
FROM: Wade T. Najjum	" -ff
Assistant Inspector General, Office-ofProgram Evaluation
TO:	Stephen L. Johnson
Administrator
This is our report on the subject evaluation conducted by the Office of Inspector General (OIG)
of the U.S. Environmental Protection Agency (EPA). This report contains findings that describe
the problems the OIG has identified and corrective actions the OIG recommends. This report
represents the opinion of the OIG and does not necessarily represent the final EPA position.
Final determinations on matters in this report will be made by EPA managers in accordance with
established resolution procedures.
The estimated cost of this report - calculated by multiplying the project's staff days by the
applicable daily full cost billing rates in effect at the time - is $253,615.
Action Required
In accordance with EPA Manual 2750, you are required to provide a written response to this
report within 90 calendar days. You should include a corrective actions plan for agreed upon
actions, including milestone dates. We have no objections to the further release of this report to
the public. This report will be available at http://www.epa.gov/oig.
If you or your staff have any questions regarding this report, please contact me at 202-566-0827
or naiium.wade@epa.gov; Dan Engelberg, Director, at 202-566-0830 or engelberg.dan@epa.gov;
or Linda Fuller, Project Manager, at 617-918-1485 or fuller.linda@epa.gov.

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EPA Needs to Better Report Chesapeake Bay
Challenges - A Summary Report
08-P-0199
Table of C
What We Looked at and Why		1
Why Cleaning Up the Bay Matters		3
Who Is Cleaning Up the Bay?		5
Noteworthy Achievements		6
EPA Can Do More to Assist Bay Partners
and Report to Congress on Progress 		8
More Progress Needed 		8
Significant Challenges Remain 		9
EPA Needs to Better Use Its Reporting Powers to
Inform Congress and Bay Citizens of Program Challenges		13
Recommendations 		16
Agency Response and OIG Comments 		16
Status of Recommendations and Potential Monetary Benefits		17
Appendices
A	Scope and Methodology	 18
B	Prior Reports 	 19
C	Summaries of Prior EPA OIG Reports	 20
D	Status of Recommendations for Prior EPA OIG Reports 	 23
E	Nutrient and Sediment Contributions to Bay Water Quality Degradation 	 30
F	Opportunities to Further Reduce Mobile Source Emissions 	 32
G	Agency Response	 34
H	Distribution	 35

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08-P-0199
What We Looked at and Why
In 2000, Maryland, Pennsylvania, Virginia, and the District of Columbia renewed
their agreement to reduce nutrient and sediment loads in the Chesapeake Bay.
This was done to improve water quality and remove the Bay from the U.S.
Environmental Protection Agency's (EPA's) impaired waters list by 2010.
Improving water quality is the most critical element in the overall protection and
restoration of the Bay and its tributaries, according to the Chesapeake 2000
agreement. Nutrient and sediment overloading was identified as the primary
cause of water quality degradation within the Bay.
Bay stakeholders questioned whether the needed load reductions will be met. In
2005, U.S. Senator Barbara A. Mikulski of Maryland requested the EPA Office of
Inspector General (OIG) to evaluate the Chesapeake Bay Program's progress in
meeting its nutrient and sediment reduction goals. We evaluated the Chesapeake
Bay Program's efforts in reducing excess nutrients (nitrogen and phosphorous)
and sediments from four key sources:
•	Agriculture
•	Air deposition
•	Developing land
•	Wastewater treatment facilities
The diagram in Figure 1 shows
how excess nutrients from all
four sources end up in the Bay.
We issued separate reports for
each topic. Details on our scope
and methodology are in
Appendix A. In addition to the
four areas noted above, in the
past few years we issued reports
on how EPA grants supported
restoring the Chesapeake Bay,
and how well federal facilities in
the Bay watershed were
complying with water permits.
A listing of prior reports on the
Chesapeake Bay is in
Appendix B. Appendix C
provide summaries on each of
the prior EPA OIG reports,
Source: U.S. Geological Survey
M 1L
Precipitation
Figure 1: Conceptual Diagram of Nutrient and Sediment Sources
and Pathways in the Chesapeake Bay Watershed
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08-P-0199
while Appendix D summarizes the status of recommendations from those prior
reports as reported by the Agency.
In 2006, after we had started our reviews, EPA acknowledged that the nutrient
goals will not be met by 2010, but did not set a new date. Restoring the Bay's
water quality is still far from being accomplished. We integrated the results of all
our prior Chesapeake Bay reports to provide this overall assessment of challenges
to restoring the Bay. Success is critical not only to the Chesapeake Bay but to
other watersheds that use the Chesapeake Bay Program as a model.
Sailing arid fishing are popular recreational activities in the
Chesapeake Bay (photo courtesy Chesapeake Bay Program).
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08-P-0199
Why Cleaning Up the Bay Matters
The Chesapeake Bay is North America's largest and most biologically diverse
estuary and provides the region economic and recreational benefits. The
Chesapeake Bay watershed covers 64,000 square miles and includes parts of six
States - Delaware, Maryland, New York, Pennsylvania, Virginia, and West
Virginia - and all of the District of Columbia. A watershed refers to a geographic
area in which water drains to a common outlet. As of 2005, about 16 million
people lived within the Chesapeake Bay watershed.
However, most of the Bay's
waters are degraded. Algal
blooms fed by nutrient
pollution block sunlight from
reaching underwater bay
grasses and can lead to low
oxygen levels in the water
and fish kills. Sediment from
urban development,
agricultural lands, and natural
sources is carried into the
Bay and clouds its waters.
Nutrient and sediment runoff
have harmed bay grasses and
bottom habitat, while
disproportionate algae growth
has pushed the Bay food web
out of balance. Bay habitats
and lower food web are at
about one-third desired
levels. Many of the Bay's
fish and shellfish populations
are below historic levels. The blue crab population has been below management
targets for the past 10 years. Fish and shellfish are at about two-fifths of desired
levels.1 Details on nutrient and sediment contributions to Bay water quality
degradation are in Appendix E.
The Bay provides significant economic and recreational benefits to the
watershed's population. According to a 1989 economic study by Maryland, the
Chesapeake Bay provides economic and recreational opportunities estimated to
1 Chesapeake Bay 2006 Health Assessment - http://www.chesapeakebay.net/assess/2006_health.htm).
3
New York
Pennsylvania
Maryland
Delaware
West Virginia J
Virginia
j Chesapeake Bay Watershed
Figure 2: Chesapeake Bay Watershed Map
Source: Chesapeake Bay Program Office

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08-P-0199
exceed $33 billion annually. Poor water quality results in waters that do not
support fishing, crabbing, or recreational activities.
Finding solutions to cleaning up the Chesapeake Bay will be useful to
stakeholders in other bays and estuaries nationwide because they face similar
challenges. According to 2006 National Water Quality Assessment data, States
reported excessive nutrients and sediment as leading causes of impaired water.
States identified wastewater treatment facilities, urban/stormwater runoff,
atmospheric deposition, and agricultural practices as the sources of the reported
impairments. The Chesapeake Bay partners have pioneered some approaches and
can offer valuable lessons learned to other impaired estuaries.
Storrnwater carries trash and other pollutants into receiving waters
(photo courtesy Chesapeake Bay Program).
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08-P-0199
Who Is Cleaning Up the Bay?
In an effort to protect and restore the Chesapeake Bay's ecosystem, federal and
State agencies, academic institutions, and non-government organizations formed a
The State governments, District of Columbia, and
EPA signed various agreements in 1983, 1987, and
2000. The latest agreement, Chesapeake 2000,
was signed by Maryland, Pennsylvania, and
Virginia (the "signatory States"); the District of
Columbia; the Chesapeake Bay Commission (a tri-
state legislative advisory body); and EPA.
The Clean Water Act provides EPA's Chesapeake
Bay Program Office (CBPO) with the
responsibility for coordinating clean-up efforts
with its partners in cleaning up the Bay - other
federal agencies and State and local governments.
EPA is also tasked with assessing and reporting to
Congress on the effectiveness of management
strategies every 5 years. CBPO, headquartered in
Annapolis, Maryland, is part of EPA's Region 3. Part of the CBPO's charge is
coordinating the actions of EPA with its partners in developing strategi es to:
•	improve the water quality and living resources in the Chesapeake Bay
ecosystem, and
•	obtain the support of the appropriate officials of the agencies and
authorities in achieving the objectives of the Chesapeake Bay Agreement.
The Chesapeake Executive Council meets at least annually and provides the
program with leadership and is accountable to the public for progress made under
agreements. Membership i ncludes the governors of Maryland, Pennsylvania, and
Virginia; the EPA Administrator; the Mayor of the District of Columbia; and the
Chair of the Chesapeake Bay Commission.
In Chesapeake 2000, the Bay partners agreed to improve water quality in the Bay
and its tributaries so that these waters would be removed from EPA's impaired
waters list by 2010 and avoid the development of a Total Maximum Daily Load
(TMDL)/ The non-signatory Bay watershed States of Delaware, New York, and
West Virginia also agreed to these water quality goals by signing a six-State
Memorandum of Understanding with EPA.
2 A TMDL is a calculation of the maximum amount of a pollutant a waterbody can receive and still meet water
quality standards, and an allocation (wasteload allocation) of thai amount to the pollutant's sources.
regional partnership in 1983.
Part of the oyster fleet in Annapolis, Maryland
(photo courtesy National Oceanic and
Atmospheric Administration).
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08-P-0199
Noteworthy Achievements
EPA and its Bay partners have completed many noteworthy activities in their
efforts to clean up the Bay. Bay partners have reduced nutrients and sediment
even as the Bay's population grows. The following is a summary of just some of
the most recent accomplishments as partners or individually.
•	Maryland created the Bay Restoration
Fund of 2004 that established fees to
support enhanced nutrient removal
upgrades at wastewater treatment
facilities, septic system upgrades, and
planting of cover crops.
•	Maryland enacted the Clean Cars Act
of 2007 requiring the Department of the
Environment and the Motor Vehicle
Administration to adopt regulations to
establish a low emissions vehicle
program; vehicle emissions can harm
the Bay through air deposition.
•	In 2004, Pennsylvania developed the Agriculture, Communities and Rural
Environment initiative that required an additional 5,000 farmers to prepare
nutrient management plans for nitrogen and phosphorus, with mandatory
buffers from streams, increasi ng the number of highly regulated farms by
about 600 percent.
•	In July 2007, Pennsylvania enacted the Resource Enhancement and Protection
Act, which provides tax credits to farmers and businesses to implement
conservation practices that reduce pollution.
•	Virginia enacted its Water Quality Improvement Act of 1997 establishing the
Water Quality Improvement Fund to provide 50 percent of the capital costs to
install nutrient removal facilities.
•	Pennsylvania and Virginia created nutrient trading programs for their
wastewater treatment facilities and, in Pennsylvania, agricultural producers.
EPA has assisted the States in developing these programs.
•	EPA assisted the States in revising their water quality standards by issuing its
April 2003 Ambient Water Quality Criteria for Dissolved Oxygen, Water
Clarity, and Chlorophyll a for the Chesapeake Bay and Its Tidal Tributaries,
Cover crops absorb excess nutrients in
the soil and help prevent soil erosion,
protecting water quality and aquatic
health (photo courtesy Chesapeake Bay
Program).
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08-P-0199
and its October 2003 Technical Support Document for Identification of
Chesapeake Bay Designated Uses and Attainability.
•	In 2003, the Chesapeake Executive Council endorsed the water quality criteria
and allocations of nutrient and sediment reductions, which served as the basis
for expanded tributary strategies in each jurisdiction.
•	The Bay States and the District of Columbia have developed tributary
strategi es that outline how they will develop and implement a series of "best
management practices" to minimize pollution.
•	In December 2004, EPA Regions 2 and 3 and the Chesapeake Bay
jurisdictional partners developed and agreed to the NPDESPermitting
Approach for Discharges of Nutrients in the Chesapeake Bay Watershed for
municipal and industrial wastewater NPDES (National Pollutant Discharge
Elimination System) discharge sources. With this approach, EPA and State
NPDES permitting authorities agreed to place annual total nitrogen and
phosphorus load limits (consistent with the individual State tributary
strategies) and monitoring requirements (consistent with Chesapeake Bay
nutrient goals) in the permits of all significant dischargers in the Chesapeake
Bay watershed. This is particularly noteworthy considering some dischargers
are hundreds of miles upstream and may not directly benefit from Bay
improvements.
•	In September 2006, the EPA OIG found that EPA awarded grants that
contributed toward meeting Clean Water Act and Chesapeake 2000 agreement
goals.
With the help of an EPA grant, a bank installed a "green roof"
on one of its buildings in Richmond, Virginia. Among its many
benefits, the green roof reduces polluted stormwater runoff.
(EPA OIG photo).
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08-P-0199
EPA Can Do More to Assist Bay Partners
and Report to Congress on Progress
Despite many noteworthy accomplishments by the Chesapeake Bay partners, the
Bay remains degraded. This has resulted in continuing threats to aquatic life and
human health, and citizens being deprived of the Bay's full economic and
recreational benefits. Through its reporting responsibilities, EPA could better
advise Congress and the Chesapeake Bay community that (a) the Bay program is
significantly short of its goals and (b) partners now need to make major changes if
water quality goals are to be achieved and maintained. Current efforts will not
enable the partners to meet their goal of restoring the Bay by 2010, and new
challenges are emerging. Bay partners need to address:
•	uncontrolled land development
•	limited implementation of agricultural conservation practices
•	limited control over air emissions affecting Bay water quality
EPA does not have the resources, tools, or authorities to fully address all of these
remaining challenges. National farm policy, local land development decisions,
and individual life styles have huge impacts on the amount of pollution being
discharged to the Bay. EPA needs to further engage local governments and
watershed organizations in efforts to clean up the Bay.
More Progress Needed
Even though the area's population has been growing, the Bay Partners have made
progress in reducing nutrients and sediments discharged to the Bay. However, at
the current rate of reductions, it will take decades to meet the 2010 goals. Based
on the 2007 health and restoration assessment in A Report to the Citizens of The
Bay Region issued by the Chesapeake Bay Program partnership, the Bay partners
have achieved 47, 62, and 64 percent of the nitrogen, phosphorus, and sediment
loading goals,3 respectively. These decreases are primarily the result of
reductions from upgraded wastewater treatment facilities, successful phosphate
detergent bans, and use of agricultural best management practices. Based on
monitoring data, the U.S. Geological Survey determined that nitrogen and
phosphorus concentrations have decreased but not at a rate that would sufficiently
reduce nutrient loads to meet the Bay's water quality standards by 2010. In 2007,
the Bay partners reported that they were only 21 percent of the way toward
meeting the water quality goals, a drop from 23 percent in 2006.
3 Baywide progress may not always reflect individual jurisdiction progress because of differences in programs.
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EPA used its expertise and regulatory authority to
coordinate a major effort by the Bay partners to
revi se water quality standards and upgrade
wastewater treatment facilities. The Bay partners
have set a foundation for achieving the nutrient
reductions needed from the wastewater sector if
implemented as planned. In our January 2008 report,
Despite Progress, EPA Needs to Improve Oversight
of Wastewater Upgrades in the Chesapeake Bay
Watershed, we noted that EPA needs to better
monitor progress in upgrading wastewater treatment
plans to ensure that it is done timely and that
reductions are achieved and maintained
Significant Challenges Remain
The Bay partners need to address current and emerging challenges involving
(a) uncontrolled land development, (b) limited implementation of agricultural
conservation practices, and (c) limited control over air emissions. In some cases,
there are no clear regulatory programs to control the major sources of pollution.
Other practices are controversi al because they place restrictions on the lives of the
residents of the Bay watershed (such as being able to build additions to existing
houses or develop vacant land). It will be difficult to address these challenges.
Even where cost effective practices exist, implementation may only be voluntary
and thus limited.
Also, consistent and sustained funding sources have not been identified to meet
all the Bay's needs. The Bay clean-up is expensive, and the key funding source is
the public through increased taxes and fees. In October 2004, CBPO estimated
the remaining capital costs for implementing tributary strategies to be $28 billion.
The public may resist incurring these costs. For example, some municipalities are
suing the Pennsylvania Department of Environmental Protection over stricter
wastewater treatment facility discharge limits. To reach these limits, most
facilities will need to install nutrient removal technology funded by increased user
fees. Therefore, through reports and other forms of outreach, Bay partners need
to help the Bay citizens appreciate the importance of their investment for
achieving water quality standards in local waters as well as the Bay.
EPA Can Better Assist Local Communities in Managing Growth
New development is increasing nutrient and sediment loads at rates faster than
restoration efforts are reducing them. Further, while developed lands contribute
less than one-third of the Bay loads, they are expected to require about two-thirds
of the overall estimated restoration costs. We discuss these issues in our report
Development Growth Outpacing Progress in Watershed Efforts to Restore the
Chesapeake Bay, issued September 10, 2007.
The Blue Plains Wastewater Treatment Plant
serves the Washington, DC, metropolitan area and
is the largest wastewater treatment facility in the
Chesapeake Bay watershed (EPA OIG photo).
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08-P-0199
The key decision-makers in how the Chesapeake Bay watershed develops will be
the local governments and citizens, not EPA. However, "smart growth"
techniques can be a cost-effective way for communities to manage new
development, and EPA should
encourage such growth.
Communities could incorporate
smart growth practices into local
codes and regulations.
While smart growth practices can
lessen development impact, they
do not eliminate it. EPA needs to
engage the States and local
governments to agree to a strategy
on how communities in the Bay
watershed will develop and
improve water quality. Such a
strategy should identify actions
needed, responsible action
officials, and funding. In our
September 2007 report, we recommended that EPA develop such a strategy and
include local governments in planning. EPA concurred with the
recommendations. EPA can also impact local decision making by establishing a
strong stormwater permit program, and sharing knowledge on smart growth best
management practices. In its annual reporting, EPA should identify the economic
and social challenges that the partners and local governments are facing in
managing development so that citizens and political leaders will be able to make
informed decisions about meeting the challenges.
Agricultural Producers Need to Significantly Increase
Conservation Practices Protecting Water Quality
The Federal Government needs to establish a coherent national policy that helps
agricultural producers be protective of water quality while remaining profitable.
The agricultural sector is the single largest contributor of the pollutants harming
the Bay. Based on 2007 data, 65 per cent of nitrogen, 60 percent of phosphorus,
and 86 percent of sediment reductions needed to meet reduction goals are
expected to come from agriculture. The U.S. Department of Agriculture (USDA),
a Bay partner, provides leadership on agricultural and conservation practices. In
our report on agricultural practices, Saving the Chesapeake Bay Watershed
Requires Better Coordination of Environmental and Agricultural Resources,
issued jointly on November 20, 2006, with the USDA OIG, we reported that few
of the agricultural practices were reported to have been implemented, based on
2004 data. According to the 2007 estimates calculated by the Chesapeake Bay
Program's watershed model, less pollution is coming from the agricultural sector
but the reduction is not enough to meet the water quality goal.
Suburban growth encroaching on farmlands is a key
issue in the Chesapeake Bay watershed that requires
"smart growth" techniques (photo courtesy
Chesapeake Bay Program).
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Agricultural pollution can be controlled through regulation or incentives.
However, EPA's regulatory authority and financial aid for agriculture is limited.
EPA is only allowed to regulate concentrated animal feeding operations that
discharge into the Nation's waters, but EPA was
unable to provide us with information on how
many farms or how much pollution is under
EPA regulatory control in the Chesapeake Bay
watershed. Nationwide, EPA estimates that
only about 5 percent of animal feeding
operations are regulated; the balance operate
under voluntary programs.
EPA provides a small amount of incentive
funding to agricultural producers, usually just
for one-time demonstration projects. USD A
provides substantially more financial funding
plus technical assistance. For example, from
2003 to 2005, EPA awarded approximately
$11 million from its nonpoint source program
for agricultural projects statewide in Maryland, Pennsylvania, and Virginia. For
the same period and scope, USDA provided over $250 million for conservation
practices. Regardless, current budgets cannot fill the demand for assistance
programs, making it difficult to expand incentives for agricultural producers.
Even though USDA has been encouraging science-based conservation practices in
the region for years, it has not significantly adapted its strategies to meet the
specific needs of the Chesapeake Bay. Many agricultural conservation practices
must be implemented on a consistent basis to improve water quality, and
substantial, long-term financial commitments will be needed.
Some in the agricultural community believe they have been unfairly stigmatized
as the "villain" in contributing to the Bay's pollution. USDA staff questioned the
accuracy of the Chesapeake Bay Program's Phase 4.3 watershed model estimates
of how much pollution is coming from the agricultural sector. Obtaining
sufficient data on the actual extent and success of agricultural conservation
estimates has been limited. The Bay partners need to work with USDA and the
agricultural community to develop a better reporting and measurement system.
Bay partners have recently identified the emerging biofuel industry as another
challenge to reducing nutrients from the agricultural sector. To lessen
dependence on imported oil and reduce green-house gases, the Nation is exploring
homegrown renewable fuels. With its proximity to oil refineries and rising corn
prices, agricultural producers in the Chesapeake Bay region may decide to expand
their acreage devoted to corn - the primary source for grain-based ethanol. The
Chesapeake Bay Commission estimated that Bay area agricultural producers
Wastewater and rainwater from an area where dairy
cows are housed flow to the drain (center of photo),
which is directed to a storage tank (EPA OIG photo).
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08-P-0199
growing corn to support the emerging ethanol industry could introduce as much as
an additional 5 million pounds of nitrogen per year to the Bay.
Further Reductions in Air Emissions Can Help Restore the Bay
Although EPA has several actions underway to reduce nitrogen oxide (NOx)
emissions under the Clean Air Act, atmospheric deposition continues to be a
significant contributor to the Bay's overall nitrogen loads. Air deposition
accounts for about a quarter to a third of the nitrogen loads to the Bay. CBPO is
relying on anticipated nitrogen deposition reductions from Clean Air Act
regulations already issued by EPA, combined with anticipated reductions from
other non-air sources, to meet water quality goals for the Bay watershed. Details
are in our prior report, EPA Relying on Clean Air Act Regulations to Reduce
Atmospheric Deposition to the Chesapeake Bay and its Watershed, issued
February 28, 2007.
Cargo ships contribute to air deposition (photo
courtesy Chesapeake Bay Program).
Emerging Challenge of Increasing
NOx Emissions from Shipping
Shipping traffic on the East Coast has continued
to become increasingly heavy since 2004, and
wili become more so after expansion of the
Panama Canal is completed (scheduled for
2014). The Virginia Port Authority forecasts that
the Port of Hampton Roads (which includes
Norfolk International Terminal, Newport News
Marine Terminal, Portsmouth Marine Terminal,
and the Craney Island Terminal) will grow
approximately 400 percent from 2005 to 2040.
The increase in traffic is projected to result in an
estimated 14,100 tons of additional NOx air
emissions annually by 2040. This amounts to
about 14 percent of the nitrogen that EPA had
projected to be emitted from all sources within
the entire airshed in 2010.
The NOx emissions that contribute nitrogen
deposition to the Bay and its watershed come
from States both inside and outside the
watershed. This geographical area is referred
to as the airshed 4 Because non-air sectors
have not reduced their nitrogen loads as
planned, additional reductions in air emissions
and its resulting atmospheric deposition may
be needed. Two Clean Air Act-related actions
could have an impact. EPA recently lowered
its 8-hour ozone standard, which could require
nonattainment areas to make additional
reductions in NOx emissions. Also, EPA is
reviewing its secondary standard for nitrogen
dioxide (NO2); if EPA tightens this standard,
States may need to further reduce NOx
emissions. Absent these two actions, any
additional NOx reductions would likely have
to be State-initiated.
We identified several opportunities for
reducing mobile source emissions, the
predominant source of atmospheric deposition
to the Bay, which would not require additional
Clean Air Act regulations or revisions. Some
of these actions are voluntary initiatives while
others would require State regulatory action.
These initiatives can be controversial
4 EPA defines the Bay airshed as the area where nitrogen emission sources are estimated to cumulatively contribute
75 percent of the total nitrogen deposition to the Bay and its surrounding watershed.
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08-P-0199
(e.g., adopting Low Emitting Vehicle standards) or difficult to implement (e.g.,
voluntary programs). Consequently, States may be reluctant to take such
initiatives, particularly those outside the Bay watershed. These actions are
discussed further in Appendix F.
Under the Clean Air Act, EPA has set
primary and secondary air quality
standards for six pollutants, including
ozone and N02. Because NOx is a critical
ingredient to the formation of ozone," EPA
and Bay partner States have undertaken
numerous efforts to reduce NOx emissions,
including emissions standards for motor
vehicles (e.g., the Tier 2 program and
Clean Air Nonroad Diesel Rule),
emissions standards for electric utilities,
and the NOx Transport Rule. CBPO is
relying on these anticipated nitrogen
deposition reductions to meet Bay goals.
Further reductions in NOx emissions may be required depending upon the result
of the EPA Office of Air and Radiation's review of the current secondary
National Ambient Air Quality Standards for NO2.6 The secondary standards are
to protect the public welfare from any known or anticipated adverse effects from
pollutants in ambient air, including to the Bay. Accordingly, this review plans to
consider the impact of these emissions on the Chesapeake Bay. As part of its
review of the N02 secondary standard, EPA may consider the impact of other
reactive forms of nitrogen, such as ammonia. Our prior report on air deposition in
the Bay reported that ammonia emissions from animal feeding operations
represent a potentially significant uncontrolled contributor of nitrogen loads to the
Bay. The impact of ammonia emissions on algal blooms is more significant than
NOx because ammonia/ammonium is the preferred form of nitrogen. A more
stringent secondary standard for N02 could result in additional controls to reduce
NOx emissions that would help reduce nitrogen deposition in the Bay. CBPO
should have the opportunity to review and comment on any proposed rulemaking
resulting from EPA's revi ew because of the potential impact that revisi on of the
secondary standard for N02 could have on the Bay.
EPA Needs to Better Use Its Reporting Powers to Inform Congress
and Bay Citizens of Program Challenges
Congress and Bay citizens need to be provided with a realistic picture of what it
will take to clean the Bay and when the water quality goals will be achieved.
1 Nitrogen oxides react with volatile organic compounds in the presence of sunlight to form ground-level ozone.
6 N02 represents the specific air quality indicator that the standard measures. However, EPA considers the impact
of oxides of nitrogen in setting the standard.
Automobile exhaust can contribute
significant amounts of nitrogen to the
Chesapeake Bay through air deposition
(photo courtesy Chesapeake Bay Program),
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Such information is needed so that informed decisions on funding and policy can
be made. However, neither EPA's report to Congress nor the Bay partners'
annual report provide complete information on Bay activities and challenges. The
reporting process provides for disclosing progress, impediments, and
recommendations for achieving desired outcomes. CBPO should work with its
partners to determine appropriate mechanisms for reporting. This should include
funding gaps, the status of wastewater treatment facility construction, local
regulatory issues, and other impediments to cleaning up the Bay. By improving
the information it shares with Congress and the public and further leveraging
partner resources, EPA can go a long way in bringing about the changes needed to
achieve the goals desired by the Chesapeake Bay watershed stakeholders.
The Clean Water Act requires the EPA Administrator to report to Congress every
5 years on the state of the Bay and to make recommendations for improvement.
EPA's CBPO did not effectively use its first Chesapeake Bay 5-year report,
issued in 2003, to make recommendations for improved management strategies.
CBPO missed the opportunity to inform Congress of higher-level challenges,
delaying the success of the program. Although CBPO was drafting a 2008 report
during our review, it did not make that report available to us to review.
Congress' requirement for the 5-year report also directs that the information be
presented in such a format as to be readily transferable to and useable by other
watersheds. Congress provides CBPO with the highest level of funding among all
the great waters programs. CBPO needs to ensure that other estuary programs can
benefit from the Chesapeake Bay. For example, CBPO and its Bay partners have
created an NPDES strategy, providing a scientific and regulatory structure for the
wastewater treatment sector, which other watersheds may wish to follow.
Nutrient overloading from wastewater treatment facilities is a common problem
experienced by other watersheds across the Nation.
The Chesapeake Bay partners also issue an annual Bay Health and Restoration
report. While this report provides progress in meeting the water quality goals, it
does not provide a complete picture of progress made. It does not indicate what
steps are needed for each sector to achieve its targets. As a result, readers do not
know the likelihood of these sectors achieving the remainder of their goals or how
this affects achieving overall water quality goals. For example, the Bay partners
reported in 2006 that, since 1985, the agriculture sector is at the half-way mark for
meeting its nutrient reduction goals and two-fifths toward meeting its sediment
goal, and notes significant funding and technical assistance will be needed.
However, the report did not identify how the funding or assistance would be
obtained, or what the impact would be if the funding and assistance were not
obtained. Bay experts have stated that the "easy fixes" have been done, leaving
more difficult challenges to be addressed.
The Chesapeake Bay Program has been under much scrutiny by the EPA OIG and
other organizations to determine if reported progress was accurately portrayed. In
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2005, the Government Accountability Office recommended that CBPO
(1) complete its efforts to develop and implement an integrated assessment
approach; (2) revi se its reporting approach to improve the effectiveness and
credibility of its reports; and (3) develop a comprehensive, coordinated
implementation strategy that takes into account available resources. The Senate
and House Appropriations Committee withheld $5 million in administrative funds
until EPA implements these recommendations. CBPO was further directed by
Congress to develop a Chesapeake Bay action plan for the remaining years of the
Chesapeake 2000 agreement. The Bay partners have drafted the Chesapeake
Action Plan, which is described as integrating all of the Bay program's
partnership activities into a realistic plan that targets resources to ensure that the
most effective and realistic work plans are developed and implemented. The draft
plan includes actions for other federal and State agencies and some watershed
organizations. This plan, which CBPO had planned to submit to Congress by
June 20, 2008, was not available for our review during our evaluation.
EPA's regulatory authority is limited by statute, but it can address some of its
limitations by capitalizing on the resources, tools, and authorities of its partners.
EPA has developed a relationship with the "signatory" States. However, EPA
needs to do more to assure that local governments and watershed organizations
are also active partners. EPA should work with local governments and watershed
organizations to identify effective and realistic practices for these partners to
implement. Successful key actions could be embodied in the Chesapeake Action
Plan.
The sun setting over St. Mary's River in Maryland (photo
courtesy National Oceanic and Atmospheric Administration).
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Recommendations
In prior reports, the EPA OIG made recommendations to the Region 3 Regional
Administrator to address individual sector needs (agricultural, developing lands,
air deposition, and wastewater). Appendix D provides specifics. We are
addressing this summary report to the EPA Administrator because EPA's
implementation of all the previously issued recommendations alone cannot ensure
that the Bay partners will achieve their water quality goals. Other federal
agencies and State and local governments have responsibilities to clean up the
Bay, and without their active involvement restoration cannot succeed. Also, the
success of the Chesapeake Bay restoration is critical for estuaries across the
country experiencing similar issues.
Specifically, we recommend that the EPA Administrator:
1.	Improve reporting to Congress and the public on the actual state of the
Chesapeake Bay and actions necessary to improve its health by
including the following information in an appropriate report:
•	Activities and resources necessary to accomplish the Chesapeake
2000 agreement goals;
•	Activities that are not supported with funding or a commitment
from the responsible federal, State, or local government;
•	Challenges significantly hindering the Bay partners in adequately
reducing nutrients and sediment;
•	Milestones for generating funding and accomplishing activities;
and
•	Impact on the health of the Bay if milestones are not accomplished.
2.	Develop a strategy to further engage local governments and watershed
organizations to capitalize on their resources, tools, authorities, and
information to advance the mission of the Chesapeake Bay and include
key actions as developed into the Chesapeake Action Plan.
3.	Provide CBPO with the opportunity to review and comment on any
proposed rulemakings resulting from the Office of Air and Radiation's
review of the secondary standard for NO2.
Agency Response and OIG Comments
The Agency concurred with the recommendations in this report. A complete copy
of the Agency's response is in Appendix G. These recommendations will remain
open until the Agency has completed the agreed-upon actions.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)





Planned


Rec.
Page



Completion
Claimed
Agreed To
No.
No.
Subject
Status1
Action Official
Date
Amount
Amount
16 Improve reporting to Congress and the public on
the actual state of the Chesapeake Bay and
actions necessary to improve its health by including
the following information in an appropriate report:
•	Activities and resources necessary to
accomplish the Chesapeake 2000 agreement
goals;
•	Activities that are not supported with funding
or a commitment from the responsible
federal, State, or local government;
•	Challenges significantly hindering the Bay
partners in adequately reducing nutrients and
sediment;
•	Milestones for generating funding and
accomplishing activities; and
•	Impact on the health of the Bay if milestones
are not accomplished.
16 Develop a strategy to further engage local
governments and watershed organizations to
capitalize on their resources, tools, authorities, and
information to advance the mission of the
Chesapeake Bay and include key actions as
developed into the Chesapeake Action Plan.
16 Provide CBPO with the opportunity to review and
comment on any proposed rulemakings resulting
from the Office of Air and Radiation's review of the
secondary standard for NO2.
EPA Administrator
EPA Administrator
EPA Administrator
1 0 = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is undecided with resolution efforts in progress
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Appendix A
Scope and Methodology
We performed this review in accordance with generally accepted government auditing standards
issued by the Comptroller General of the United States. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objectives.
We conducted our field work from May 2005 through February 2008 for all our assignments.
We conducted our work at EPA Region 3's headquarters office in Philadelphia, Pennsylvania,
and its CBPO office in Annapolis, Maryland. We also did work at EPA's National Exposure
Research Laboratory in Research Triangle Park, North Carolina. Further, we did work with
USD A, signatory State offices, selected municipalities, and selected agricultural operations. We
interviewed staff at these locations. We also interviewed experts from academia and other fields
involved in the Chesapeake Bay restoration. We limited our evaluation to efforts by the
signatory jurisdictions of the District of Columbia, Maryland, Pennsylvania, and Virginia.
We reviewed the activities the Bay partners had taken since signing the Chesapeake 2000
agreement through 2007. We reviewed the Chesapeake 2000 agreement, State tributary
strategies, available implementation plans, data from the Chesapeake Bay Program watershed
model v.4.3 and point source data base, and other related documents. We reviewed the progress
the Chesapeake Bay Program partners had been making in achieving water quality standards by
reducing nutrients and sediments from 1985 to 2007 using the following:
•	estimated loading data from 1985 to 2007 from the Bay's watershed model v. 4.3,
•	reported data from the CBPO Point Source Data Base,
•	2006 and 2007 Chesapeake Bay Health and Restoration Assessment issued by Bay
partners,
•	Synthesis of U.S. Geological Survey Science for the Chesapeake Bay Ecosystem and
Implications for Environmental Management.
We determined that the CBPO had established data quality standards for its v.4.3 watershed
model; we did not assess the accuracy of the data input into the model. The only point sources
reviewed were the wastewater treatment facilities and municipal separate storm sewer systems;
we did not conduct a review of concentrated animal feeding operation point sources.
We obtained an understanding of the controls EPA has in place to report on the progress the Bay
partners are making in reducing nutrients and sediments by sector. The Bay partners are relying
on federal, State, and local government regulations and voluntary actions.
Details on prior audit coverage are in Appendices B through D.
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Prior Reports
08-P-0199
Appendix B
Four Prior EPA OIG Reports Issued in Response to Request
Title
Report No.
Date
Saving the Chesapeake Bay Watershed Requires Better
Coordination of Environmental and Agricultural Resources
(issued jointly with USDA OIG)
2007-P-00004
November 20, 2006
EPA Relying on Existing Clean Air Act Regulations to
Reduce Atmospheric Deposition to the Chesapeake Bay
and its Watershed
2007-P-00009
February 28, 2007
Development Growth Outpacing Progress in Watershed
Efforts to Restore the Chesapeake Bay
2007-P-00031
September 10, 2007
Despite Progress, EPA Needs to Improve Oversight of
Wastewater Upgrades in the Chesapeake Bay Watershed
08-P-0049
January 8, 2008

Additional EPA OIG Reports on Chesapeake Bay
Title
Report No.
Date
EPA Grants Supported Restoring the Chesapeake Bay
2006-P-00032
September 6, 2006
Federal Facilities in Chesapeake Bay Watershed
Generally Comply with Major Clean Water Act Permits
2007-P-00032
September 5, 2007

Other Notable Chesapeake Bay Reports (Not by EPA OIG)
Title
Report No.
Date
Government Accountability Office Report, Chesapeake Bay
Program: Improved Strategies Are Needed to Better Assess,
Report, and Manage Restoration Progress
GAO-06-96
October 2005
National Academy of Public Administration Report:
Taking Environmental Protection to the Next Level:
An Assessment of the U.S. Environmental Delivery System
Academy
Project No:
2048
April 2007
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Appendix C
Summaries of Prior EPA OIG Reports
Summaries of Four Prior Reports Issued in Response to Request
Below are summaries on the four reports we have already published in response to the
congressional request by Senator Mikulski. Appendix D lists all of the recommendations and the
status on each.
Saving the Chesapeake Bay Watershed Requires Better
Coordination of Environmental and Agricultural Resources
2007-P-00004
November 20, 2006
State-level partners have committed the agricultural community to making nutrient
reductions, but numerous practices abound and are generally performed on a voluntary
basis. Few of the agricultural practices in the tributary strategies have been implemented
because the agricultural community considers many of these practices as either being
unprofitable or requiring significant changes in farming techniques. Although the State-
level partners have provided substantial funding to implement these practices, one of the
key State partners acknowledged substantial additional funding is still needed. At the
federal level, applications for USDA's technical and financial assistance programs went
unfunded, making it difficult to expand incentives for Bay area agricultural producers.
EPA must improve its coordination and collaboration with its Bay partners and the
agricultural community to better reduce nutrients and sediment entering the Chesapeake
Bay watershed. However, members of the agricultural community have been reluctant to
participate with EPA because of EPA's regulatory enforcement role. USD A, a Bay
partner at the federal level, could significantly assist EPA in implementing the needed
conservation practices within the agricultural community, given its many conservation
programs, extensive field organization, and long experience working with the agricultural
community. However, USDA has not coordinated a Department-wide strategy or policy
to address its commitment as a Bay partner.
EPA Relying on Clean Air Act Regulations to
Reduce Atmospheric Deposition to the Chesapeake Bay
and Its Watershed
2007-P-00009
February 28, 2007
CBPO is relying on anticipated nitrogen deposition reductions from Clean Air Act
regulations already issued by EPA, combined with anticipated reductions from other
non-air sources, to meet water quality goals for the Bay watershed. EPA believes these
activities will provide sufficient nitrogen deposition reduction to enable the Bay to meet
its overall nitrogen cap load, assuming non-air activities achieve planned reductions.
EPA estimates that Clean Air Act regulations already issued will reduce nitrogen that
falls directly into the Bay, as well as nitrogen deposited to the Bay watershed, by
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19.6 million pounds annually by 2010. Even greater reductions should occur as States
undertake additional measures in the next few years to meet the ozone and fine
particulate matter standards. State and EPA strategies do not include additional air
reduction activities specifically designed to clean up the Bay, although many State
activities should have the co-benefit of reducing nitrogen deposition in the Bay.
If additional reductions in air emissions are needed to clean up the Bay, one potentially
significant source of deposition not currently controlled is ammonia emissions from
animal feeding operations. The magnitude of these emissions to nitrogen deposition in
the Bay is uncertain. Ammonia emissions monitoring of animal feeding operations,
expected to begin in the spring or early summer of 2008, should provide data to help EPA
better determine the amount of such emissions from farming operations.
Development Growth Outpacing Progress in Watershed
Efforts to Restore the Chesapeake Bay
2007-P-00031
September 10, 2007
EPA and its Chesapeake Bay watershed partners will not meet load reduction goals for
developed lands by 2010 as established in the Chesapeake 2000 agreement. In fact, new
development is increasing nutrient and sediment loads at rates faster than restoration
efforts are reducing them. Developed lands contribute less than one-third of the Bay
loads but would require about two-thirds of the overall estimated restoration costs.
Consequently, EPA and its Bay partners focused on more cost-effective approaches, such
as upgrading wastewater facilities and implementing agricultural best practices.
Additional challenges impeding progress include:
•	Lack of community-level loading caps.
•	Shortage of up-to-date information on development patterns.
•	Ineffective use of regulatory programs to achieve reductions.
•	Limited information and guidance on planning and applying environmentally
sensitive development practices.
•	Limited funding available for costly practices.
A cost-effective start to reversing the trend of increasing loads from developed land is for
communities to concentrate on new development. Opportunities abound for EPA to
show greater leadership in identifying practices that result in no-net increases in nutrient
and sediment loads from new development and assisting communities in implementing
these practices. If communities do not sufficiently address runoff from new
development, loads from developed lands will continue to increase rather than diminish.
Despite Progress, EPA Needs to Improve Oversight of
Wastewater Upgrades in the Chesapeake Bay Watershed
08-P-0049
January 8, 2008
Chesapeake Bay wastewater treatment facilities risk not meeting the 2010 deadline for
nutrient reductions if key facilities are not upgraded in time. In the 7 years since signing
the Chesapeake 2000 agreement, EPA and its State partners have taken a number of steps
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to lay the foundation for achieving the 2010 wastewater nutrient reduction goals. Water
quality standards have been set, nutrient loadings have been allocated, and nutrient limits
are beginning to be incorporated into permits. However, States need to finish adding
nutrient limits to the permits, and the facilities will need to make significant reductions
by 2010. Crucially, these reductions will need to be maintained once achieved.
Significant challenges include generating sufficient funding and addressing continuing
population growth. EPA needs to better monitor progress to ensure needed upgrades
occur on time and loading reductions are achieved and maintained. Otherwise, Bay
waters will continue to be impaired.
Summaries of Two Additional Reports Involving Chesapeake Bay
EPA Grants Supported Restoring the Chesapeake Bay
2006-P-00032
September 6, 2006
EPA awarded assistance agreements (grants) that contributed toward meeting the goals of
the Clean Water Act and the Chesapeake 2000 agreement. These grants funded activities
designed primarily to: reduce the nutrients and sediment entering the Bay and its
tributaries, monitor ongoing efforts to restore Bay water quality, and model (estimate) the
results of Bay implementation strategies. In Fiscal Years 2003, 2004, and 2005, Congress
appropriated $23 million each year for EPA's Chesapeake Bay Program. In each of those
years, EPA awarded about $8 million for State implementation grants and $7 million for
technical and other grants for specific projects. EPA used the remaining $8 million to fund
EPA personnel and office management, interagency agreements, and congressional
earmarks. The efforts contributed to EPA's overall Bay restoration program. This report
did not contain recommendations.
Federal Facilities in Chesapeake Bay Watershed
Generally Comply with Major Clean Water Act Permits
2007-P-00032
September 5, 2007
Overall, EPA and the States are doing well managing how major federal facilities comply
with their NPDES permits. In EPA's last reporting period (2004), major federal facilities
in the Chesapeake Bay watershed had a lower rate of Significant Noncompliance than
other federal and non-federal major-permit facilities nationwide. EPA and States have a
variety of formal and informal tools available to enforce federal facility compliance with
NPDES permits. These tools included: multimedia, voluntary agreement, and media
press release approaches; Notices of Violation; an administrative order; and a Federal
Facility Compliance Agreement. Also, EPA developed the Wastewater Integrated
Strategy, which seeks to eliminate federal facility Significant Noncompliance with
NPDES permit limits. EPA also worked with the Department of Defense to make
NPDES permit compliance a higher priority at military installations (eight of the nine
federal facilities with major NPDES permits are at military installations). We made no
recommendations in this report.
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Appendix D
Status of Recommendations for
Prior EPA OIG Reports
Saving the Chesapeake Bay Watershed Requires Better
Coordination of Environmental and Agricultural Resources
2007-P-00004
November 20, 2006
The OIG has accepted EPA's corrective action plan for all recommendations.
Recommendation 1: We recommend that the EPA Administrator propose executing a
Memorandum of Agreement with the USDA to assist the Bay partners in meeting their nutrient
reduction goals by:
a.	Identifying conservation practices USDA will promote with either technical assistance or
cost-share programs.
b.	Developing procedures for promoting and fast-tracking alternative practices for cost-share
programs and technical assistance.
c.	Establishing a task force to identify how USDA cost-share programs can better assist the
States in carrying out their tributary strategies.
d.	Establishing demonstration projects to emphasize producer benefits, not just
environmental benefits of best management practices in tributary strategies.
e.	Conducting research to quantify accurately the nutrient load reductions from alternative
best management practice strategies to ensure these practices are the best for removing
nutrients and to improve the models.
f.	Developing a tracking system to determine a more accurate picture of the agricultural
community's commitment to implementing the tributary strategies.
Status: Completed. On May 9, 2007, EPA and USDA agreed to a Memorandum of
Understanding to carry out activities to help Chesapeake Bay Program partners meet
their nutrient reduction goals.
Recommendation 2: We recommend that the EPA Region 3 Regional Administrator instruct
EPA/CBPO to work with USDA, the States, local governments, land grant universities, and
agricultural organizations to revisit State tributary strategies to ensure that the mix of best
management practices chosen are those most suitable to the area, have the greatest potential for
implementation, and can effectively reduce nutrient and sediment loss.
Status: Task ongoing. As of March 9, 2007, EPA plans to actively participate in
USDA priority-setting activities and program guidance forums to advance the Bay
Program nutrient reduction priorities. The Nutrient Subcommittee and its
Agricultural Nutrient Reduction Workgroup is critically evaluating cost-effective
practices and developing a plan for how to accelerate implementation of these
practices. EPA is working to finalize the Chesapeake Bay Watershed Model (Phase
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5.0). EPA has funded the Cooperative State Research, Education, and Extension
Service Mid-Atlantic Regional Water Program to improve the description of pollutant
removal efficiencies of agricultural best management practices. Several Bay States
are using nutrient trading as a tool to help meet Chesapeake Bay water quality goals.
Recommendation 3: We recommend that the EPA Region 3 Regional Administrator instruct
EPA/CBPO to include development of implementation plans as a special condition in Chesapeake
Bay Program grant agreements for States that have not submitted an implementation plan.
Status: Completed. In the 2007 Grant Guidance, EPA requires that any signatory
jurisdiction or headwater State that does not have an approved Tributary Strategy
implementation plan work directly with its Project Officer to assure that any missing
elements of Tributary Strategy implementation plans are incorporated into its Work
Plan.
NOTE: The four following recommendations were made to USDA for which the USDA OIG is
conducting the audit follow-up.
USDA OIG has accepted USDA's corrective action plan for all recommendations.
Recommendation 4: We recommended that the USDA Secretary or Deputy Secretary assign a
senior level Departmental official to coordinate USDA goals and programs with EPA and the
Chesapeake Bay Program. Delegate to that official authority to direct and coordinate goals and
programs across USDA mission areas and agencies and to monitor USDA actions to meet the
Chesapeake Bay Program goals.
Status: Completed. On February 18, 2007, USDA Secretary Mike Johanns
designated the Under Secretary, Natural Resources and Environment (NRE), as the
USDA official responsible for coordinating USDA program activities and initiatives
with the Environmental Protection Agency, its Chesapeake Bay Program Office, and
others that have an interest in restoring the Chesapeake Bay. This designated official
will also provide the leadership necessary to monitor USDA actions and results in
meeting mutual goals and objectives of the Bay, as well as provide periodic briefings
regarding USDA's coordinated efforts.
Recommendation 5: We recommended that the USDA Secretary or Deputy Secretary review
the feasibility of targeting or redirecting USDA funds (or allocating USDA funds) on a regional
and/or geographical basis to coordinate with the environmental restoration of the Chesapeake
Bay, including the possibility of linking the availability of financial and technical assistance to
proximity to the Chesapeake Bay watershed.
Status: Completed. On March 11, 2008, NRCS, as the lead agency for NRE,
achieved final action when it provided evidence that USDA had reviewed the
feasibility of targeting or redirecting USDA funds (or allocating USDA funds) on a
regional and/or geographical basis to coordinate with the environmental restoration of
the Chesapeake Bay, including the possibility of linking the availability of financial
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and technical assistance to proximity to the Chesapeake Bay. An independent third
party contactor, selected competitively to examine the efficacy of its program
allocation formula, concluded that NRCS needs to (1) develop better outcome based
performance information and integrate the information into its allocation formulas;
(2) improve the analytical soundness of the allocation models, factors, weights and
data particularly through the elimination of redundant factors; and (3) improve the
transparency of the budget allocation formula. The contractor's report also
recommended that NRCS minimize the use of factors which are not related to
performance. The prime example of this is the use of base factors which attempt to
define the landmass being addressed by the program, (i.e., NRCS should avoid
targeting or redirecting funds on a regional and/or geographical basis.)
Recommendation 6: We recommended that the USDA Secretary or Deputy Secretary direct
USD A agencies to expedite the development and implementation of outcome-based performance
measurements for evaluating the effectiveness of their conservation efforts and programs.
Status: Task ongoing. In its October 12, 2006 response, NRCS, as lead agency for
NRE, stated it has directed USDA agencies to expedite the development and
implementation of outcome-based performance measurements through the
Conservation Effects Assessment Project (CEAP), a significant multi-agency effort
designed to quantify the benefits of conservation practices implemented by private
landowners participating in selected USDA conservation programs. The agencies
expect that CEAP will provide much needed data, methods, and information to
improve measurement of program performance, and will also assist in development of
improved measures that better reflect desired environmental outcomes. NRCS'
leadership is scheduled to meet again by June 2008 to assess the direction needed to
accomplish the recommendation.
Recommendation 7: We recommended that the USDA NRCS Chief develop a tracking system
for maintaining a list of technical assistance and financial assistance requests from landowners
and agricultural producers that cannot be completed due to limited funding.
Status: Task ongoing. In its October 12, 2006 response, NRCS agreed to develop a
tracking system for technical assistance requests. In January 2008, NRCS advised it
no longer intends to develop a tracking system for technical assistance requests.
Instead, NRCS will seek a change in management decision (a new corrective action
plan) and request final action. NRCS stated it is developing of a new agency-wide
tracking system for all its program activity. The creation of an interim process to
track unfunded technical and financial assistance requests is no longer a prudent use
of limited resources. NRCS leadership is scheduled to meet again by June 2008 to
assess the direction needed to accomplish the recommendation.
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EPA Relying on Clean Air Act Regulations to
Reduce Atmospheric Deposition to the Chesapeake Bay
and Its Watershed
08-P-0199
2007-P-00009
February 28, 2007
The OIG has accepted EPA's corrective action plan for the recommendation.
Recommendation 1: We recommend that the EPA Region 3 Regional Administrator instruct
CBPO to use the results of the animal feeding operations emissions monitoring studies to
determine what actions and strategies are warranted to address animal feeding operations'
nitrogen deposition to the Chesapeake Bay.
Status: Task ongoing. CBPO and its partners continue to use the results of the
Community Multiscale Air Quality Model to factor in the estimated water quality
benefits of Clean Air Act regulations within the development of the Chesapeake Bay
watershed TMDL currently underway. The Mid-Atlantic Water Quality Program has
completed development of best management practices and efficiencies for application
to animal feeding operations that will yield reductions in ammonia emissions. These
BMPs and efficiencies are currently undergoing review through the Chesapeake Bay
Program's Nutrient Subcommittee and technical workgroup prior to submission to the
Program's Water Quality Steering Committee for final approval for application by the
watershed partners.
Development Growth Outpacing Progress in Watershed
Efforts to Restore the Chesapeake Bay
2007-P-00031
September 10, 2007
The OIG has accepted EPA's corrective action plan for all recommendations.
Recommendation 2-1: We recommend that the EPA Region 3 Regional Administrator charge
the CBPO Director to prepare and implement a strategy that demonstrates leadership in reversing
the trend of increasing nutrient and sediment loads from developed and developing lands. Such a
strategy should include steps to:
•	develop a set of Environmentally Sensitive Development practices that result in no-net
increase in nutrient and sediment loads and flows in new developments and may be
applicable to existing development and redevelopment;
•	work with State and local partners, developers, federal agencies, and other stakeholders
to implement these practices through regulatory, voluntary, and incentive approaches;
•	educate municipal officials on these practices and other aspects of Environmentally
Sensitive Development;
•	target technical assistance to local governments interested in pursuing tools and strategies
for reducing runoff from development;
•	identify progressive local governments and leaders in the housing and commercial
development fields and create forums for sharing information;
•	report on progress through the existing annual reporting structure; and
•	evaluate the effectiveness of the strategy.
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Status: Task ongoing. CBPO has agreed to formulate a strategy for developed and
developing lands by September 10, 2008. Also, CBPO, will issue an annual report on
progress toward reducing nutrient and sediment loads from developed and developing
lands, starting in September 2009.
Recommendation 2-2: We recommend that the EPA Region 3 Regional Administrator charge
the CBPO Director to work with the Chesapeake Bay partners to set realistic, community-level
goals for reducing nutrient and sediment loads from developed and developing lands.
Status: Task ongoing. By March 2009, EPA and State partners will begin to reach
agreement on needed changes to Bay-wide caps and allocate those caps by tributary.
By July 2010, EPA will confirm that the individual jurisdictional allocation and
implementation strategies that States will develop will result in achievement of
Chesapeake Bay water quality standards. These allocations will be reflected in the
draft watershed TMDL expected to be published in 2011.
Recommendation 2-3: We recommend that the EPA Region 3 Regional Administrator charge
the Water Protection Division Director to establish, with the delegated States, a documented
permitting approach that achieves greater nutrient and sediment reductions in municipal separate
storm sewer system permits across the watershed by:
•	incorporating measurable outcomes in line with waste load allocations, when established
for local waters and the Chesapeake Bay, through the TMDL regulatory program;
•	including retrofitting of developed areas where these actions would benefit local waters
as well as the Bay; and
•	disallowing increases in loads and flows.
Status: Task ongoing. EPA has agreed to develop a technical support document to
establish common expectations with respect to the municipal separate storm sewer
system program for permit writers and the regulated community by April 2008.
EPA will establish a permitting approach with States by October 2008.
Despite Progress, EPA Needs to Improve Oversight of
Wastewater Upgrades in the Chesapeake Bay Watershed
08-P-0049
January 8, 2008
The OIG has accepted EPA's corrective action plan for recommendations 2-1 thru 2-5. The
OIG's acceptance of Recommendation 3-1 is pending EPA's submission of dates when proposed
actions will be completed.
Recommendation 2-1: We recommend that the EPA Region 3 Regional Administrator instruct
staff to review and comment on State-drafted NPDES permits for significant facilities to ensure
that interim construction milestones are included in compliance schedules longer than 1 year to
meet the Chesapeake Bay allocations. The milestones should include:
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08-P-0199
•	design construction
•	construction start
•	construction completion
•	compliance with permit limits
Status: Task ongoing. EPA will continue to review and comment on State-drafted
NPDES permits for significant facilities. EPA will assure that milestones are in place
if the compliance schedule to achieve the permit limit exceeds 1 year. EPA will seek
to include the following milestones, as appropriate in the permits: design completion,
construction start, construction completion, and compliance with permit limits.
Recommendation 2-2: We recommend that the EPA Region 3 Regional Administrator instruct
staff to obtain from NPDES-authorized States information on progress in achieving the
milestones above the "select priority facilities." Such priority facilities include those that are
identified as needing the largest nutrient reductions and are identified by the States as missing
the interim milestones noted in Recommendation 2-1. If milestones are missed, EPA will work
with the States to take appropriate follow-up action to ensure compliance with the milestones.
Status: Task ongoing. By October 1, 2008, EPA will:
•	Initiate milestone tracking for 10 designated priority facilities. These priority
facilities are estimated to achieve about 75 percent of the total nitrogen reductions
and about 50 percent of the phosphorus reductions planned for significant
facilities.
•	Identify interim milestones for each design completion, construction start,
construction completion, and compliance with permit limits.
After October 1, 2008, EPA will commit to:
•	Identify those facilities that have not met their interim or final milestones.
•	Within 60 days of identifying such a facility, will initiate a corrective action
dialogue with the State.
Recommendation 2-3: We recommend that the EPA Region 3 Regional Administrator instruct
staff to collect information and report on the amount and source of funding for the
aforementioned "select priority facilities" as part of the CBPO's annual reporting process.
Status: Task ongoing. Starting on January 1, 2009, and every year thereafter until
the priority facilities have completed their upgrades, EPA will track the amount and
source of funding allocated for undertaking the required treatment upgrades for each
of the priority facilities identified by EPA. This information will be included in the
Chesapeake Action Plan's operation data base, which will be updated at least
annually and distributed to the Bay partners.
Recommendation 2-4: We recommend that the EPA Region 3 Regional Administrator instruct
staff to promote awareness of and use of the "Financing Alternatives Comparison Tool" and
other financial analysis tools within the Chesapeake Bay community.
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08-P-0199
Status: Task ongoing. To promote greater awareness and use of the "Financing
Alternatives Comparison Tool," EPA will: continue to develop and implement
webcasts on the tool for States and grantees; streamline the tool to make it easier to
use for local governments; and expand the existing user guide and release it by
October 1, 2008.
Recommendation 2-5: We recommend that the EPA Region 3 Regional Administrator instruct
staff to continue to assist States in their development of effective trading programs by ensuring
that: (a) States establish a common nutrient trading currency, and (b) lessons learned are
captured and disseminated. In addition, if an interstate trading protocol program is developed,
EPA should develop a formal mechanism to track water quality trading across State lines.
Status: Task ongoing. EPA is providing assistance to States in developing effective
trading programs by: (a) establishing the "delivered load" as a common currency
using the Chesapeake Bay watershed model, and (b) sharing lessons learned through
a standing EPA-State nutrient trading workgroups. EPA will also document the
lessons learned on the Chesapeake Bay trading programs to share with other
watersheds. EPA will develop a process for tracking interstate trades if they occur
that will transparently track trades across State lines and assure that such trades use
the same trading "currency."
Recommendation 3-1: We recommend that the EPA Region 3 Regional Administrator work
with NPDES-delegated States to complete current efforts, related to industrial discharges, to:
(a) characterize current nutrient discharge levels; (b) refine nutrient cap loads, where appropriate;
and (c) issue permits reflecting modified cap load.
Status: Task ongoing, (a) EPA has already worked with key States to obtain the
necessary data to properly characterize the nutrient loadings from industrial
dischargers. These point sources are being required through their permits to conduct
the appropriate monitoring. By May 2011, EPA will work with the States to: (b)
develop facility specific nutrient loading targets for those facilities and (c) place these
loading targets, where appropriate, into the NPDES permits for these facilities as
permit limits.
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08-P-0199
Appendix E
Nutrient and Sediment Contributions to
Bay Water Quality Degradation
Nutrient overload has been identified as the primary cause of water quality degradation within
the Chesapeake Bay. Nitrogen and phosphorus, also known as nutrients, are the basic building
blocks for vegetation. However, in an aquatic environment, excess nutrients fuel large algal
blooms that block sunlight and deplete oxygen as the algae decompose. Without sunlight,
underwater bay grasses cannot grow, and without sufficient oxygen blue crabs and fish cannot
live. Nutrients come from many sources, such as lawn fertilizer, wastewater treatment plants,
septic systems, cropland, livestock, and the air. The pie charts in Figure E-l below illustrate the
contributions of nitrogen, phosphorus, and sediment from various sectors.
Figure E-1: Contributions of Nitrogen, Phosphorus, and Sediment
Sources of Nitrogen to Bay (2007)

Non-Tidal

Vteter
Forest
16%
Deposition
^1%
Septic I
Agriculture
5% I
\ 40%
Mixed Open I
7% /
Urban

11%

Wastewater

20%
Sources of Phosphorus (2007)
Non-Tidal
Forest Water
Mixed Open 2% Deposition
13% 2	 1%
Urban
Agriculture
Wastewater
21%
Sources of Sediments (2007)
Forest
Mixed Open
Agriculture
Urban
Source: CBPO, Chesapeake Bay Watershed Model, v.4.3.
Note: Air deposition has been included in each category.
The Chesapeake Bay partners estimate the delivery of nutrients and sediment to the Bay using
the Chesapeake Bay watershed model. Models use mathematical representations of the real
world to estimate the effects of complex and varying environmental events and conditions.7
The amount of a particular pollutant discharged to a water body is described as "loading." The
following tables report the estimated loadings of nitrogen, phosphorus, and sediment to the Bay
from 1985 to 2007.
Chesapeake Bay Website: http://www.chesapeakebay.net/modeling.aspx7menuiteiiFl9303
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08-P-0199
2007 Loadings Data Tables
Table E-1: Total Nitrogen

1985
2007
Tributary
Additional

Loadings
Loadings
Strategy
Reductions
Source
Data
Data
Goals
Needed
Agriculture
149,380,071
102,805,884
52,390,555
50,415,328
Wastewater
87,720,651
53,435,365
43,817,101
9,618,264
Urban
30,550,094
29,856,931
20,418,701
9,438,230
Mixed Open
17,582,281
18,790,680
14,484,056
4,306,624
Septic
10,107,534
12,502,557
9,353,899
3,148,658
Forest
38,713,421
41,022,309
41,020,670
1,640
Non-Tidal Water




Deposition
3,485,098
3,528,180
2,947,122
581,059
All Sources
337,539,149
261,941,906
184,432,104
77,509,802
Source: Estimates from Chesapeake Bay watershed model, v.
4.3

Table E-2: Total Phosphorus




1985
2007
Tributary
Additional

Loadings
Loadings
Strategy
Reductions
Source
Data
Data
Goals
Needed
Agriculture
11,566,380
8,274,491
5,088,317
3,186,174
Wastewater
9,172,764
3,810,682
3,521,573
289,109
Urban
3,732,946
3,156,303
1,944,339
1,211,965
Mixed Open
2,122,897
2,425,843
1,818,111
607,732
Septic 0
0

0
0
Forest
382,089
404,672
397,407
7,265
Non-Tidal Water




Deposition
156,327
164,538
176,796
-12,258
All Sources
27,133,402
18,236,529
12,946,543
5,289,986
Source: Estimates from Chesapeake Bay watershed model, v.
4.3

Table E-3: Total Sediment




1985
2007
Tributary
Additional

Loadings
Loadings
Strategy
Reductions
Source
Data
Data
Goals
Needed
Agriculture
4,073,853
2,861,397
1,521,416
1,339,981
Wastewater
0
0
0
0
Urban
413,341
475,847
256,724
219,123
Mixed Open
377,130
427,946
381,892
46,054
Septic
0
0
0
0
Forest
969,216
993,950
1,042,725
-48,775
Non-Tidal Water




Deposition
0
0
0
0
All Sources
5,833,540
4,759,140
3,202,757
1,556,383
Source: Estimates from Chesapeake Bay watershed model, v. 4.3
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08-P-0199
Appendix F
Opportunities to Further Reduce
Mobile Source Emissions
The single largest source of nitrogen deposition into the air comes from mobile sources.
Figure F-l shows the type and relative percent contribution of NOx air emissions sources that
deposit in the Bay. Utilities and mobile on-road sources, such as cars and trucks, account for
nearly two-thirds of all air pollution sources of nitrogen in the Chesapeake Bay airshed.
Figure F-1: Sources of Atmospheric Nitrogen Deposition to Chesapeake Bay
Types and Relative % Contribution of NOx Emission Sources from States* in the
Chesapeake Bay Airshed
(2001, projected from EPA's 1999 National Emissions Inventory)
Mobile non-road
Utilities
. 27%
Mobile on-roai
39%
Industries
12%
* 14 States: MD, VA, PA, NY, WV, NJ, OH, KY, NC, SC, TN, IN, Ml, and DE
Source: EPA and National Oceanic and Atmospheric Administration
We identified five opportunities for achieving additional emission reductions from mobile
sources:
1.	Continue to encourage use of alternative forms of transportation. Each driver
mile forgone takes a gram of nitrogen out of the Bay's burden. For every 500 miles
that a person goes without driving, nearly a pound of nitrogen is kept out of the
atmosphere.
2.	Adopt stricter vehicle emissions standards. Under the federal Clean Air Act, States
have the option of adopting the California low emissions vehicle standards, which are
more stringent than the national standards. Two Bay program members, Maryland
and Pennsylvania, have adopted the California low emissions vehicle regulations.
3.	Promote low emissions vehicles. Bay partners can champion the roll-out and use of
zero emission vehicles, such as battery/electric and hydrogen fuel cell vehicles, or
low emission vehicles, via clean State and local on-road fleets.
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08-P-0199
4.	Develop control strategies to reduce emissions from heavy-duty diesel vehicles.
Heavy-duty diesel vehicles are substantial contributors to airborne NOx. Bay
program members could consider control strategies such as heavy-duty diesel
vehicles retrofits, and special fuel formulations to reduce emissions.
5.	Enforce prohibitions on idling and encourage truck stop electrification.
Maryland, Pennsylvania, Virginia, and the District of Columbia have each issued
motor vehicle idling regulations and should ensure that idling regulations are
enforced. Bay partners could consider increasing truck stop electrification
infrastructure, which allows drivers to "plug in" their trucks to electrical outlets when
parked instead of idling to run the electrical systems.
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08-P-0199
Appendix G
Agency Response
W
h->. ,ry
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460

JUL -9 2008
THE ADMINISTRATOR
MEMORANDUM
SUBJECT: Official Draft Evaluation Report: EPA Needs lo Better Report Chesapeake Bay
Deputy Inspector General
Thank you for the opportunity to comment on the Official Draft Evaluation Report:
EPA Needs to Better Report Chesapeake Bay Challenges. The recommendations of the draft
report are appropriately focused on EPA improving reporting to Congress and the public and
further engaging local governments and watershed organizations. Therefore, EPA concurs with
all of the recommendations in the official draft report. As is customary, the Agency will prepare
and submit a corrective action plan within 90 days of receipt of the final report. This action plan
will lay out the Agency's action, already initiated or planned, to address your recommendations.
If you or your staff has any questions related to our response to the draft report, please
contact Jeffrey Lape at (410" *"""	" * 	"'>7-5731.
cc: Benjamin Grumbles, Assistant Administrator, Office of Water
Donald Welsh, Regional Administrator, Region III
Jeffrey Lape, Director, Chesapeake Bay Program Office, Region III
Jon Capacasa, Director, Water Protection Division, Region III
Richard Batiuk, Associate Director for Science, Chesapeake Bay Program Office
Bob Koroncai, Associate Director, Water Protection Division, Region III
Lorraine Fleury, Audit Coordinator, Region III
Michael Mason, Office of Water
Wade Najjum, Assistant Inspector General, Office of Program Evaluation, Office of the
Inspector General
Dan Engelberg, Director of Water and Enforcement Issues, Office of the Inspector General
Challenges
TO:
Bill Roderick
Stephen L.
Internet Address (URL.) • http://www.epa.gov
Recycled/Recyclable * Printed with Vegetable Oil Based Inks on Recycled Paper (Minimum 30% Poslcorsumer)
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08-P-0199
Distribution
Office of the Administrator
Regional Administrator, Region 3
Assistant Administrator, Office of Water
Director, Chesapeake Bay Program Office
Office of General Counsel
Agency Follow-up Official (the CFO)
Agency Follow-up Coordinator
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Audit Follow-up Coordinator, Office of the Administrator
Audit Follow-up Coordinator, Office of Water
Audit Follow-up Coordinator, Office of Air and Radiation
Audit Follow-up Coordinator, Region 3
Deputy Inspector General
Appendix H
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