U.S. ENVIRONMENTAL PROTECTION AGENCY
ENVIRONMENTAL FINANCE PROGRAM


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U.S. ENVIRONMENTAL PROTECTION AGENCY
   ENVIRONMENTAL FINANCE PROGRAM
   2005-2006  Report
    EF@N
          Prepared by:
     U.S. Environmental Protection Agency
      Office of the Chief Financial Officer
   Office of Enterprise Technology and Innovation
       Environmental Finance Program
                   9
             October 2006

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                             ACKNOWLEDGMENTS
We would like to express our appreciation to the
members and leadership of the Environmental
Financial Advisory Board (EFAB), particularly Stan
Meiburg, EFAB's Designated Federal Official (DFO),
who is also the Deputy Regional Administrator for
EPA Region 4. We are extremely fortunate that such
a highly respected individual has brought his consid-
erable knowledge and skill to this Federal Advisory
Board. In his role as DFO, Mr.  Meiburg has been
instrumental in aligning the board's projects with
Agency priorities and elevating the interactive role  of
the regional environmental finance center directors
as expert witnesses to EFAB. This has provided the
board with a unique perspective on a wide variety of
environmental and financing issues.

We also want  to acknowledge the contributions of
those EFAB members who rotated off the board after
long-term service. We especially want to recognize
George Brewster, Michael Deane, Michael Finnegan,
Evan Henry, Anne Pendergrass Hill, Mary Kelly, John
McCarthy, George Raftelis, Arthur Ray, and Mary Ellen
Whitworth. In addition,we would like to recognize
former Syracuse Environmental Finance Center (EEC)
Director Kim Farrell, who served as an expert witness
to the board before leaving the EEC. The Agency has
benefited greatly from former members' expertise and
wisdom in helping state and local governments find
resources to meet their environmental needs.

We appreciate the valuable assistance supporting the
work of the board by senior headquarters and
regional management and staff in the program
offices, such as Ben Grumbles, Cynthia Dougherty,
Diane Regas, and Jim Hanlon in the Office of Water;
and Susan Bodine, Tom Dunne, and Barry Breen in
the Office of Solid Waste and Emergency Response.
We also want to include Beth Craig, Office of Air and
Radiation; Charles Kent, Office of Policy, Economics
and Innovations; Laura Yoshii, Deputy Regional
Administrator, EPA Region 9; and Kathleen Callahan,
Deputy Regional Administrator, EPA Region 2, all of
whom  helped advance the work of the board.

We are proud of the commitment demonstrated by
the directors of the nine university-based EFCs, who
strive diligently to reach underserved communities
with environmental tools and training tailored to
their specific needs. A great many dedicated people
have helped the EFCs along the way. We particularly
want to thank the EPA regional management  and
staff who have generously provided their skills and
time in managing the cooperative agreements with
each of these centers. The EEC Network would not
exist without the regions' superb cooperation, guid-
ance, and support.

Finally, we want to recognize Joe Dillon, Director of
the Office of Enterprise Technology and Innovation,
and his staff of the Environmental Finance Program,
Vanessa Bowie, Vera Hannigan, Timothy McProuty,
Alecia Crichlow, Susan Emerson, and Sandra Keys.
Their efforts and dedication prove that resources can
be leveraged into far-reaching results.

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                                        FOREWORD
    It is my great pleasure to present the 2005—2006 Environmental Finance Program Progress Report, showcas-
    ing the latest accomplishments of the U.S. Environmental Protection Agency's (EPA) Environmental Financial
    Advisory Board (EFAB) and the Environmental Finance Center (EFC) Network, which provide some of the
most unique services to a federal agency in the nation.

EFAB, a federally chartered Advisory Committee, provides EPA with a cross-media, intergovernmental perspec-
tive on environmental finance that integrates environmental and economic goals and emphasizes public-private
partnerships. The 28 all-volunteer financial experts on EFAB advise EPA on environmental financing chal-
lenges, providing advice and recommendations to the EPA Administrator and program offices on environmen-
tal finance issues, options,  proposals, and  trends. Essentially, EFAB seeks to increase the total investment in
environmental protection by leveraging public and private environmental resources. Finally, EFAB produces
policy and technical reports on a wide range of environmental finance matters,
particularly with regard to  issues impacting small communities.

The EFC Network, made up of nine regional  centers, provides outreach services
to state and local governments and small businesses. These regional centers,
funded by EPA along with other public  and private monies, provide training,
tools, workshops, and other services to  give communities the know-how to help
them manage the cost of environmental protection. The EFC Network's services
are  based on the premise that communities want to comply with environmental
regulations but often do not know how to  pay for them. Many communities, par-
ticularly small ones, lack in-house financial expertise. The finance centers help
fill this knowledge gap—they know that finance is a critical component of sus-
tainable environmental protection.

This report provides a snapshot of the successful Environmental Finance Program, built over a decade through
the  interactions of financial experts, communities, universities, and EPA. It  documents some of the thousands of
individuals, agencies, and communities  that have benefited from the program's advice, training, workshops, tools,
and personal assistance. In  short, it shows the environmental results that a small, dedicated group with a specific
mission can achieve.
In closing, I'd like to take this opportunity to thank the many committed people who have helped the
Environmental Finance Program along the way. On behalf of a grateful Agency, I would like to acknowledge the
remarkable contributions of the members of EFAB and the EFC Network who have willingly and generously given
of their time and expertise to provide financing advice and assistance in pursuit of environmental protection.

For more information about the Environmental Finance Program, please visit .
Lyons Gray, Chief Financial Officer
U.S. Environmental Protection Agency

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                            CONTENTS
EXECUTIVE SUMMARY	i






ENVIRONMENTAL FINANCIAL ADVISORY BOARD	1






ENVIRONMENTAL FINANCE CENTER NETWORK	11




     - REGION 1 EFC at the University of Southern Maine	13




     - REGION 2 EFC at the Maxwell School at Syracuse University	23




     - REGION 3 EFC at the University of Maryland	41




     - REGION 4 EFC at the University of North Carolina at Chapel Hill	51




     - REGION 4 EFC at the University of Louisville	61




     - REGION 5 EFC at Cleveland State University	73




     - REGION 6 EFC at the New Mexico Institute of Mining and Technology...83




     - REGION 9 EFC at California State University, East Bay	95




     - REGION 10 EFC at Boise State University	107

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                             EXECUTIVE  SUMMARY
Introduction
This 2005 - 2006 Environmental Finance Program Progress Report,
compiled by the U.S. Environmental Protection Agency (EPA) Office of
the Chief Financial Officer reports  on the activities and initiatives of the
Environmental Financial Advisory Board (EFAB) and the Environmental
Finance Center (EFC) Network.

Both EFAB and the EFC Network provide unique services to the nation
in terms of helping communities find ways to pay for environmental pro-
grams and creating incentives that promote environmental stewardship.
Together, within the Environmental Finance Program, these entities seek
to lower costs, increase investment, and build capacity by creating part-
nerships with state and local governments and the private sector to fund
environmental needs.
                                                                     About This Report...

                                                                    This report contains the com-
                                                                    plete EFAB progress report
                                                                    for 2005-2006, as well as
                                                                    individual reports for each
                                                                    EFC. A summary of activities
                                                                    conducted by each  EFC is
                                                                    presented as the first  page in
                                                                    each EFC report, followed by
                                                                    details of completed,  ongo-
                                                                    ing, and future activities of
                                                                    each EFC.
                                                                 I	
EFAB is an independent advisory committee established to advise EPA
on environmental financing challenges facing the nation. Chartered in 1989 and operating under the authority of
the Federal Advisory Committee Act (FACA), it provides advice and recommendations to the EPA Administrator
and program offices on environmental finance issues, options, proposals, and trends.

The board is comprised of 28 members appointed by the Agency's Deputy Administrator, which represent federal,
state, and local government; the banking, finance, and legal communities; business and industry; academia; and non-
profit environmental organizations. It produces policy and technical reports on a wide range of environmental finance
matters of interest to EPA, focusing on environmental finance issues at all levels of government—particularly with
regard to  their impact on local governments and small communities. The board seeks to increase the total investment
in environmental protection by facilitating greater leverage of public and private environmental resources.

The EFC  Network, composed of nine centers throughout the nation, is the only university-based  organization in
the country that provides innovative solutions to communities to help manage the cost of environmental protec-
tion.  The network works with both the public and private sectors to promote a sustainable environment by
addressing the difficult issue of how to pay. The network is supported by EPAs  Environmental Finance Program
in the Agency's Office of the Chief Financial Officer, as well as by additional funding from other  federal, public,
and private entities. The centers, each affiliated with an EPA region, are  located  at the following universities:

                                        Region 1 EFC at the University of Southern Maine

                                        Region 2 EFC at the Maxwell School  at Syracuse University

                                        Region 3 EFC at the University of Maryland

                                        Region 4 EFC at the University of North Carolina at Chapel Hill

                                        Region 4 EFC at the University of Louisville

                                        Region 5 EFC at Cleveland State University

                                        Region 6 EFC at the New Mexico Institute of Mining  and Technology
                                                                             EXECUTIVE SUMMARY

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                           EXECUTIVE  SUMMARY
• Region 9 EFC at California State University, East Bay

• Region 10 EFC  at Boise State University

The input of EFAB and the EFC Network provides state-of-the-art expertise in an area
outside EPAs core competency of developing and implementing environmental pro-
grams. In addition, while the EFCs provide services and advice directly to communi-
ties on how to finance environmental protection, they also advise EFAB about what
works and what does not work from in-the-field experience. EFAB then combines the
real-life scenarios  of the EFCs with its members' professional experience and provides
valuable guidance and advice to the Agency for moving forward into the future.


Highlights- -Environmental Financial Advisory Board  (EFAB)

The Environmental Financial Advisory Board (EFAB) made a number of compelling recommendations to the
Agency, many of which were adopted. For example, EFAB prepared various  reports for the Office of Water; Office
of Solid Waste and Emergency Response; Office of Policy, Economics and Innovation;  and the Office of Radiation
to address subjects of concern. Specifically, the board evaluated or began assessing the following issues:

• Useful Life Financing of Water Facilities - How environmental goals and objectives might be more affordable
  by using debt management practices to reduce the budgetary impact of funding capital expenditures.

• Watershed/Non-Point Source Financing - Options for financing
  non-point source pollution cleanup projects using financing enti-      Timothy McProuty
  ties within the watersheds of concern.                                  .,              ,  ,_.
                                                                 E-mail: mcprouty.timothy@epa.gov
• Application of Innovative Finance Techniques in the Transportation Infrastructure & Financial Innovation Act
  of 1998 to Environmental Finance Issues - Applying a financing technique known as backloading to brown-
  fields cleanup/redevelopment and water/wastewater facilities.

• Combined Operations of the State Revolving Fund Programs - Whether to allow states to operate their Clean
  Water and Drinking Water Revolving Loan Funds as one.

• Innovations in Watershed Financing: The Bay Restoration Fund Act - Identification of the Bay Restoration
  Fund Act as an innovative tool.

• Financial Assurance in RCRA Programs - The strengths and weaknesses of the current financial test used by
  corporations to demonstrate they have the capacity to meet financial assurance obligations vis a vis contamina-
  tion cleanup upon facility closure.

• Affordability of U.S. Water and Sewer  Rates - Suggestions for helping governments, the private sector, and the
  general public pay for water and sewer services.

• Establishing a New SRF Loan Guaranty Program - Whether loan guarantees could be used by the Agency to
  help meet the funding demands for water infrastructure.

• Application of Useful Life Financing to State Revolving Funds - Making extended term financing of environ-
  mental facilities available through State Revolving Funds.

                                               ENVIRONMENTAL FINANCE PROGRAM:  2OO5-2OO6 REPORT

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                             EXECUTIVE   SUMMARY
Highlights- -Environmental Finance Center (EFC) Network
                                                                     EFC Network Coordinator
                                                                  Vera Hannigan
                                                                  Phone: (202) 564-5001
                                                                  E-mail: hannigan.vera@epa.gov
The university-based Environmental Finance Centers (EFCs) deal with
source water, drinking water, and/or wastewater issues, including
smart growth, brownfield redevelopment, green buildings, small busi-
ness, and sustainability. In addition, while each of the regional EFCs
has a slightly different focus and conducts slightly different initiatives
to meet goals, they all participate in the same type of activities, described in the following sections.

TRAINING AND EDUCATION

Many of the EFCs are in the business of providing outreach services by developing tools, training courses, deliv-
ering lecture series, or otherwise educating communities and relevant stakeholders about financial issues. The
Northeast EFC (Region 1), for example, developed an online course about conservation finance. In addition, it
presented a Next Communities Initiative workshop to community leaders and planners, addressing the effective
use and implementation of smart growth tools such as model ordinances and financial instruments training. At
the same time, the Syracuse EFC (Region 2) sponsors quarterly Technical Assistance Partnership Forums for the
purpose of exchanging information and maximizing technical assistance  resources available to other communi-
ties. The Syracuse EFC also held four separate multiple-day training events around New York State about public
finance,  capital planning and budgeting, municipal bond issuance, computer  finance models, rate-setting and
analysis, asset management, environmental  conflict management and resolution, project financing procedures and
regulations, and strategic management.

Meanwhile, the Maryland EFC (Region 3) developed the Sustainable Financing Initiative to provide communities with
the tools they need to effectively finance and implement watershed protection plans. The Maryland EFC held three
workshops, and planned one more, which focused on helping communities overcome barriers to implementing their
watershed plans. It also conducted six  other  training programs on topics such as "Local Officials' Responsibilities,"
"Budgeting from Scratch," and "Rates and Cost Recovery for Small Systems." The Louisville EFC (Region 4) com-
menced a series of interactive workshops, with 40 to 50 participants each, that provide technical assistance to
improve community participation in brownfields redevelopment. In  addition, the University of North Carolina EFC
(UNC EFC, Region 4) provided six financial planning trainings to small water utilities. The Great Lakes EFC (GLEFC,
Region 5), in collaboration with several other organizations, conducted an interactive training session for local devel-
opment professionals on financing the redevelopment of environmentally contaminated properties.

DIRECT ASSISTANCE
In addition, many of the EFCs work directly with and in communities to assist with specialized needs. For example,
the Syracuse EFC (Region 2) has received calls from municipal leaders who worked to develop much needed proj-
                                   ects but feared they might be rejected  by voters due to a lack public under-
                                   standing. The EFC worked with several specific communities to  involve the
                                   public and relay an understanding of the reasoning behind local govern-
                                   ments' decisions to consider or proceed with a particular project. In addi-
                                   tion, the Syracuse EFC worked with communities attempting to create equi-
                                   table user rates as they pursued water and wastewater system improve-
                                   ments.
                                                                             EXECUTIVE SUMMARY

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                            EXECUTIVE   SUMMARY
The Louisville EFC (Region 4) provided technical assistance to brownfield projects in three communities attempting
to use environmental insurance. In addition, the EFC developed a practice guide on best approaches for municipal
uses of this risk transfer tool. The UNC EFC (Region 4) provided direct technical assistance to several communities,
helping them, for example, improve a failing water system, expand a sewer system, develop  a draft proposal for an
innovative finance program for failing septic systems, and develop a rate study and business  plan. The New Mexico
EFC (NM EFC, Region 6) worked with Region 6 states and the New Mexico Environment Department on capacity
development assistance, sharing information regarding capacity activities in other states, discussing potential capacity
development training programs, and conducting and training staff to conduct capacity assessments. The NM EFC  also
continued its efforts to assist tribal water systems in improving public health protection. The NM EFC has been work-
ing in a partnership with a multi-program engineering and science laboratory and a consortium of universities to
assist water systems that might be impacted by the new Arsenic Standard, which limits arsenic concentrations to 10
parts per billion. At the same time, it worked with a tribal water system to evaluate a new method of arsenic removal.

EFC9 (Region 9) continued promoting, developing, and institutionalizing multimedia pollution prevention and
resource  conservation to businesses in Region 9, while ensuring consistent growth and continuity for regional
green business programs. EFC9 provided basic information and presentations on green businesses throughout the
region. The EFC also helped new and  existing green business programs identify,  establish, and  expand partner-
ships with key agencies and public, private, and nonprofit organizations. Using the software tools it developed,
the Boise EFC (Region 10) extended special technical assistance attention to five  communities facing significant
financial  challenges  in implementing improvements to their water or wastewater systems.

TOOL DEVELOPMENT

Most of the EFCs have created reports, Web sites, or other tools and outreach products to disseminate financing
information to communities and relevant stakeholders. For example, the Northeast EFC (Region 1)  developed more
than six outreach and educational tools, such as a video, case studies, and model amendments to states' land use
control legislation. The Syracuse EFC (Region 2), developed "PMFPTalk," a listserv of nearly 350 active members, pro-
viding local government leaders and technical assistance providers a way to submit  questions or distribute informa-
tion. The Louisville EFC (Region 4) published a series of practice guides such as: Brawnfields: Historic Preservation
As a Redevelopment Option; Contaminated Properties: History, Regulations, and Resources for Community Members;
and Public Involvement: How Active Participation in Environmental Issues and Decisions Makes Economic Sense and
Broadens the Knowledge Base.

The UNC EFC (Region 4) made a number of key publications available on its Web site such  as an  article called The
Painful An of Setting Water and Sewer Rates, a model stormwater ordinance for North Carolina, and a report  called
Water and Sewer Needs and Capital Finance Strategies in Appalachia. The GLEFC (Region 5)  published the second in
a series of articles about a study conducted for the National Oceanic and Atmospheric Administration (NOAA) and
several other agencies identifying the information and knowledge needs of local coastal resources decision-makers in
the Ohio Lake  Erie basin.

The Boise EFC (Region 10) developed 10 new software tools,  including a full-cost pricing model for water utilities,
Rate Checkup™, which integrates the EEC's asset refinancing model, known as CAPFinance™, in developing accu-
rate, fair,  and equitable user charges for water utilities, and a model to help water systems calculate the impact of
new development and design impact fees to recover those costs. The Boise EFC also expanded the Directory of
Watershed Resources to function as a national database, allowing other states and regions to  add their funding  infor-
mation into the directory. In addition, the Boise EFC worked with other agencies to develop  an analysis tool  that  pro-
vides cost information to landowners to assist them in identifying conservation practices on their land.

                                                 ENVIRONMENTAL FINANCE PROGRAM:  2OO5-2OO6 REPORT

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                             EXECUTIVE  SUMMARY
                                     CONFERENCES AND WORKSHOPS

                                     As part of their financial outreach efforts, most of the EFCs spend a
                                     considerable amount of time organizing or attending conferences,
                                     workshops, and other large-venue functions. The Northeast EFC
                                     (Region 1), for example, participated in 16 conferences and meetings,
                                     ranging from a  half-day training event called "Negotiation Skills for
                                     Land Conservationists,"  to a one-day workshop, "Community Problem-
                                     Solving Through Collaboration." The Syracuse EFC (Region 2) hosted
                                     more than 10 conferences and gave 17 presentations, ranging from
advice on sustainable development at a Hurricane Katrina "teach-in" to explaining the EFC's services to a large
Chinese delegation at Syracuse University, at state, university, nonprofit, and national and international  events.

Likewise, the Louisville EFC (Region 4) presented at more than nine meetings/conferences with up to 8,000 par-
ticipants at each, including "Contamination Information: Source of Stigma or Investment Stimulus?" and "Plots
Against the American Dream: Framing Responses to Smart Growth Incentives." The GLEFC (Region 5) convened
the fifth year of the BOSS (Brownfields One-Stop Shop) Forum, whose quarterly meetings brought together fed-
eral, state, and local government officials with environmental engineers, investment and commercial  bankers,
insurance executives, real estate professionals, and developers to  discuss financial and programmatic solutions to
aid Ohio's small- and medium-sized communities in their redevelopment.

The Boise EFC (Region 10) conducted 55 workshops with up to 300 attendees each, including workshops on
water utility finances for small water utilities in Idaho, water rate-setting, and asset replacement financing. The
workshops included information on planning, budgeting,  financial planning, rate-setting, and how the EFC's
financial software tools can help in these areas.

OTHER

EFCs engaged in a wide variety of other  activities as well. For example, the Maryland EFC (Region 3) participated
in a committee whose goal was to devise an implementation plan and identify and make recommendations on a
structure for developing a Chesapeake Bay Financing Authority to fund Chesapeake Bay restoration efforts. In
addition, the North Carolina Division of Water Quality retained the UNC EFC (Region 4) to help develop the
state's model stormwater ordinance. The  GLEFC (Region 5) commenced a major effort to support the city of
Cleveland's Economic Development Department  with the  development of a regionwide strategy for an industrial
and commercial land bank. In addition, the GLEFC participates as a subcommittee chair in the Greater Cleveland
Lead Advisory Council, a consortium of state, county, and municipal governments, and nonprofit organizations,
convened to reduce the incidence of lead poisoning.

As part of its drinking water capacity assistance efforts, the NM EFC (Region 6) participated in a project to identi-
fy and analyze alternatives for small drinking water systems that are not in compliance with drinking water regu-
lations. On a completely different front, EFC9 (Region 9) targeted television stations and studios and proposed to
adopt the private sector concept of "product placement" to encourage placing environmentally beneficial prod-
ucts and behaviors  on television shows. As a result of its efforts, EFC9 expects to develop a partnership with the
Disney Environmentality Division to introduce this concept to the Disney television fall shows. The Boise EFC
(Region 10) provided third-party reviews of financial and management capacity of nine applicants seeking fund-
ing from the Idaho Drinking Water State  Revolving Fund Program.
                                                                             EXECUTIVE SUMMARY

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                        EFAB
Environmental Financial Advisory Board

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The Environmental Financial Advisory Board with EPA Administrator Steven L. Johnson
                    at the annual EFAB meeting, March 2006.

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  ENVIRONMENTAL  FINANCIAL  ADVISORY BOARD
The Environmental Financial

Advisory Board

Not only is the nation facing many environmental
challenges, such as water pollution and suburban
sprawl, but it also faces the problem of paying for
environmental facilities and services to solve these
challenges, as well as creating incentives that pro-
mote environmental stewardship. Limited budgets
and changes in federal tax laws have constrained tra-
ditional sources of capital. At the same time, there
are expanding needs and expectations for environ-
mental protection and increasing demands in all
municipal service areas. All of these factors make it
increasingly difficult for state and local governments
to find the resources to meet their needs.

PURPOSE  AND GOALS

The Environmental Financial Advisory Board (EFAB)
was established to advise the U.S. Environmental
Protection Agency (EPA) on ways to address the
expanding funding gap. Initially chartered in 1989,
EFAB provides "how to pay" advice and recommen-
dations to EPA on environmental finance issues,
options, proposals, and trends. The board is an inde-
pendent advisory committee created under the
authority of the Federal Advisory Committee Act
(FACA), which provides a role for the public to par-
ticipate actively in the federal government's decision-
making process. FACA allows the government to
draw on the expertise of committee members,  pro-
viding federal officials information and advice on a
broad range of issues affecting federal policies and
programs.

EFAB's mandate  is as follows:

• Lower costs by 1) proposing ways to  remove
  financial and programmatic barriers that raise the
  price of environmental protection and 2) discour-
  aging polluting behavior.

• Increase public and private investment in environ-
  mental facilities and services by removing con-
   EPA Administrator Steven Johnson addressing the EFAB at the
   March 2006 meeting in Washington, D.C.

  straints on private involvement imposed by current
  regulations.

• Build state and local financial capacity to carry out
  their respective environmental programs under
  current federal tax laws.

EFAB's work is organized in support of EPA's five
strategic goals:

• Goal 1: Clean Air and Global Climate Change:
  Protect and improve the air so it is healthy to
  breathe and risks to human health and the envi-
  ronment are reduced. Reduce greenhouse gas
  intensity by  enhancing partnerships with business-
  es and other sectors.

• Goal 2: Clean and Safe Water: Ensure drinking
  water is safe. Restore and maintain oceans, water-
  sheds, and their aquatic systems to protect human
  health, support economic and recreational activi-
  ties, and provide healthy habitat for fish, plants,
  and wildlife.

• Goal 3: Land Preservation and Restoration:
  Preserve and restore the land by using innovative
  waste management practices and cleaning up con-
  taminated properties to reduce risks  posed by
  releases of harmful substances.

• Goal 4: Healthy Communities and Ecosystems:
  Protect, sustain, or restore the health of people,
  communities, and ecosystems using integrated and
  comprehensive approaches and partnerships.
                                                    ENVIRONMENTAL FINANCIAL ADVISORY BOARD

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ENVIRONMENTAL  FINANCIAL ADVISORY  BOARD
• Goal 5: Compliance and Environmental
  Stewardship: Improve environmental performance
  through compliance with environmental require-
  ments, preventing pollution, and promoting environ-
  mental stewardship. Protect human health and the
  environment by encouraging innovation and provid-
  ing incentives for governments, businesses, and the
  public that promote environmental stewardship.

EFAB OPERATIONS

The board is currently comprised of 28 members
who serve as representatives of non-federal interests.
They are appointed by the Agency's deputy adminis-
trator and represent federal, state, and local govern-
ment; the banking, finance, and legal communities;
business and industry; and academia and nonprofit
environmental organizations.

The full board meets at least twice a year in
Washington, D.C., for its winter session and in San
Francisco, California, for its summer session. In addi-
tion, the board hosts workshops  and roundtables
periodically to gather information for its reports and
advisories. All  meetings and workshops are open to
the public and announced in the Federal Register as
required by FACA.
 EFAB members are as follows:

 Stan Meiburg
 Designated Federal Official
 Deputy Regional Administrator
 U.S. Environmental Protection Agency, Region 4

 Terry Agriss
 Vice President of Energy Management
 Consolidated Edison

 A. James Barnes
 Professor of Public and Environmental Affairs
 Indiana University

 Julie Belaga
 Co-Chair
 Connecticut League of Conservation Voters

 John Boland
 Professor Emeritus
Johns Hopkins University

 George Butcher
 Managing Director of Municipal Finance
 Goldman Sachs & Company

 Donald Correll
 President and  CEO
 American Water
Michael Curley
Executive Director
The International Center for Environmental Finance

Rachel Deming
Associate General Counsel
Ciba Specialty Chemicals Corporation

Honorable Pete Dominici
United States Senate

Honorable Kelly Downard
Chairman
Louisville Metro City Council

Mary Francoeur
Director
Financial Guaranty Insurance Co.

Honorable Vincent Girardy
Mayor
Peapack and Gladstone, NJ

Steven Grossman
Executive Director
Ohio Water Development Authority

Jennifer Hernandez
Partner
Holland and Knight LLP
                                           ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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  ENVIRONMENTAL  FINANCIAL ADVISORY  BOARD
Keith Hinds
Merrill Lynch

Stephen Mahfood
President
Mahfood Associates LLC

Langdon Marsh
Fellow National Policy Consensus Center
Portland State University

Gregory Mason
Assistant Executive Director
Georgia Environmental Facilities Authority

Cherie Rice
Vice President of Finance and Treasurer
Waste Management, Inc.

Andrew Sawyers
Program Administrator
Maryland Department of the Environment

James Smith
Retired
Environmental Finance Consultant
          Greg Swartz
          Vice President
          PiperJaffray & Company

          Sonia Toledo
          Managing Director
          Merrill Lynch

          Helen Sahi
          Director of Environmental Services
          Bank of America

          JimTozzi
          Multinational Business Services, Inc.

          Billy Turner
          President
          Columbus Water Works

          Justin Wilson
          Waller Lansden

          John Wise
          Retired
          Environmental Finance Consultant
                           EFAB Composition
                       Legal
                        7%
Independent
Consultants
    7% \
 Financial
Community
   22%
               Business and
                  Industry
                   21%
                  Congressional
                      4%
                          State/Local
                         Government
                             21%
               Public Interest
                    7%
                                             ENVIRONMENTAL FINANCIAL ADVISORY BOARD

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ENVIRONMENTAL  FINANCIAL  ADVISORY  BOARD
EFAB's WORK PRODUCTS

The board often receives requests from EPA on specific
environmental finance challenges. Through public
meetings, working group sessions, and workshops,
EFAB develops advisories, reports, and letters to the
Agency that offer  independent and expert views on
environmental finance issues and opportunities.

During its annual summer meeting, the board
updates its Strategic Action Agenda to reflect projects
both completed and ongoing, and uses the meeting
to bring forward new projects of great interest to the
Agency. During 2005-2006, the board transmitted
eight reports to the Agency and is working on anoth-
er four projects for 2006-2007.

Although water financing has traditionally been the
majority of EFAB's work, the board is excited to
recently expand its focus to other media areas such as
solid waste, air, and crosscutting management issues.

Set forth below is a list of recent work products of the
board, including the title and summary of the project
or report and the  date issued, followed by the EFAB
member serving as project chair, the primary Agency
customer, the Web addresses of the full EFAB report,
and, where available, EPAs response.

COMPLETED PROJECTS/REPORTS
2OO5-2OO6

Useful Life Financing of Water Facilities
(January 2005)
EFAB is deeply interested in leveraging existing funding
to help address the unmet environmental needs facing
communities nationwide. This report advises how envi-
ronmental goals and objectives might be more afford-
able by using debt management practices that reduce
the current budgetary impact of funding capital expen-
ditures. Specifically, the board examined how more
closely aligning the period over which the costs of
environmental facilities are amortized with their  useful
life can lower annual debt service costs. Attention was
paid to the costs, benefits, and fairness of this approach
over the entire useful life of environmental facilities.
Project Chair: George Butcher
EPA Strategic Goal: Clean and Safe Water
Primary Customer: Office of Water
Cover letter:
EFAB Report:

EPA Response:



Watershed/Non-Point Source Financing
(January 2005)
Non-point sources of pollution are the dominant
contributors to degraded water quality in most water-
sheds. Paying for projects to correct non-point source
problems is difficult because of the complexity of the
sources and the declining availability of grant fund-
ing. Working with EPAs Office  of Wetlands, Oceans
and Watersheds, EFAB  identified options for financ-
ing needed projects using financing entities within
the watershed itself.

Project Chair: Langdon Marsh
EPA Strategic Goals:  Clean and Safe Water; Healthy
Communities  and Ecosystems
Primary Customer: Office of Water
EFAB Report:    
EPA Response:   

Application of Innovative Finance Techniques
in the Transportation Infrastructure & Financial
Innovation Act of 1998 to Environmental Finance
Issues (March 2005)
The board's charter directs it to provide advice  on new
and innovative financing approaches. In this regard,
EFAB has identified a financing technique known as
backloading in the Transportation Infrastructure and
Financial Innovation Act of 1998 and recommended
that it be adapted to financing brownfields cleanup
and redevelopment and rural water/wastewater facili-
ties. (In using backloading, the federal government
would serve as a patient investor in a project with the
                                             ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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   ENVIRONMENTAL  FINANCIAL  ADVISORY  BOARD
loan repayments it receives occurring later in the proj-
ect timeframe and/or ramping up over time.)

Project Chair: Michael Curley
EPA Strategic Goals: Clean and Safe Water; Land
Preservation and Restoration
Primary Customers:  Office of Water; Office of Solid
Waste and Emergency Response
EFAB Report:     
EPA Office of Water Response: 
EPA Office of Solid Waste Response: 

Combined Operations of the State Revolving Fund
Programs (May 2005)
In this report, the board examines whether there are
advantages—financially, administratively, or other-
wise—to allowing states the option to  operate their
Clean Water and Drinking Water Revolving Loan
Funds as one. The board issued a report to EPA
pointing out the advantages of combined  operations
of the two state revolving funds and recommending
that the Agency examine this topic in depth.

Project Chair: Sonia  Toledo
EPA Strategic Goal:  Clean and Safe Water
Primary Customer: Office of Water
Cover Letter:     
EFAB Report:     
EPA Response:    
EFAB Follow-up: 
Innovations in Watershed Financing: The Bay
Restoration Fund Act (December 2005)
In its letter to EPA, the board is referring to the Bay
Restoration Fund Act as an example of the type of
innovation that is needed at the state level to address
the growing challenge of financing water pollution
control in a watershed context. The board believes
this Act is innovative for three reasons. First, it envi-
sions future income to the "restoration fund" secured
by the  majority of Bay Restoration fees. Second, it
imposes a statewide fee on septic tanks at personal
residences. Third, it dedicates the income from the
septic tank fees to support specific non-point source
pollution programs within the state.

Project Chair: Michael Curley
EPA Strategic Goal: Clean and Safe Water; Land
Preservation and Restoration
Primary Customer: Office of Water; OSWER
EFAB Report:     

Financial Assurance in RCRA Programs
(January 2006)

Despite legislation, regulations, and policies, industri-
al and  solid waste facilities continue to be aban-
doned  with little or no resources available to deal
with contamination. EPA has sought advice from
EFAB on uses of financial assurance mechanisms to
help address this problem. Financial assurance
mechanisms such as insurance, financial tests, corpo-
rate guarantees, bonds, and trust funds seek to
ensure  that resources will be available to address the
environmental consequences of industrial and busi-
ness activities. The board hosted an information-
gathering workshop with industry and state experts
to explore these topics and determined topics for
further investigation. As a first product, the board
issued  a report to EPA on the strengths and weak-
nesses  of the current financial test used by corpora-
tions to demonstrate that they have the capacity to
meet their financial assurance  obligations.
                                                      ENVIRONMENTAL FINANCIAL ADVISORY BOARD

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 ENVIRONMENTAL  FINANCIAL ADVISORY  BOARD
Project Co-Chairs: Mary Francoeur and A. James Barnes
EPA Strategic Goals: Land Preservation and
Restoration; Compliance and Environmental
Stewardship
Primary Customer: Office of Solid Waste and
Emergency Response
EFAB Report:     
Agency Response: 

Affordability of U.S. Water and Sewer Rates
(February 2006)

EFAB explored ways to help governments, the private
sector, and the general public address the costs of
water and sewer services. The board examined issues
such as bottom line costs, uneven costs and cost
distributions, affordability criteria, the problems of low-
income households, utility losses, and consumer
concerns. EFAB hosted a workshop in August 2005,
where it heard knowledgeable speakers from the utility
industry, consumers, and local governments speak on
these  issues. Based on the workshop and later discus-
sions, the board developed a report suggesting an
approach for dealing with household affordability
problems and utility viability issues through the careful
design of utility policies involving subsidies, collections,
and financial assistance.

Project Co-Chairs: Andrew Sawyers, John McCarthy
(former member), and John Boland
EPA Strategic Goals: Clean and Safe Water;
Compliance and Environmental Stewardship
Primary Customer: Office of Water
EFAB Report: 

Establishing a New SRFLoan Guaranty Program
(June 2006)

EFAB continues to devote significant attention to
financing issues associated with the Clean Water and
Drinking Water State Revolving Fund Programs. In
this latest project, the board has been asked by EPA
to examine ways in which loan guaranties might be
used by the Agency to more efficiently meet the
funding demands for water infrastructure projects.
Specifically, the board will be studying ways in which
loan guarantees might be used as one of the tools in
a tailored environmental project funding mix which
might also include clean water and/or drinking water
state revolving loans, U.S. Department of Agriculture
Rural Utility Service grants and loans, Department of
Housing and Urban Development Community
Development Block Grants, and/or other federal and
state funding sources.

Project Chair: George Butcher
EPA Strategic Goal: Clean and Safe Water
Primary Customer: Office of Water
EFAB Report: 

Application of Useful Life Financing to State
Revolving Funds (June 2006)

In this report, EFAB supports making extended term
financing of environmental facilities available through
state revolving funds (SRFs). To the  extent that a
financing period beyond 20 years is currently author-
ized by statute, the board recommends that EPA
approve requests by  state SRFs for approval of useful
financing up to 40 years.

Project Chair: George Butcher
EPA Strategic Goal: Clean and Safe Water
Primary Customer: Office of Water
EFAB Report: 
                                             ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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  ENVIRONMENTAL  FINANCIAL  ADVISORY  BOARD
ONGOING PROJECTS/REPORTS 2OO6-2OO7  SmartWay Transportation Upgrade Kit
Financial Market Incentives and Environmental
Management Systems
EPA has recently requested EFAB's advice on identify-
ing additional organizations in the financial and busi-
ness communities having a demonstrated or potential
interest in environmental management systems, envi-
ronmental performance improvement, and financial
risks/rewards. The Agency has also asked the board to
help provide a better understanding of current finan-
cial services industry beliefs, practices, conventions,
and challenges regarding the consideration of environ-
mental performance and systems. EFAB has begun a
dialogue with the Agency and plans to meet in the
coming month to determine the project's next steps.

Project Chair: Rachel Deming
EPA Strategic Goal:  Compliance and Environmental
Stewardship
Primary Customer: Office of Policy, Economics and
Innovation

Sustainable Watershed Financing

The board held a roundtable  meeting in March 2006
to bring together experts from around the country to
explore innovative ways to use sustainable and inno-
vative financing tools to  accelerate the implementa-
tion of projects in a watershed plan. Follow-up
actions from the roundtable will contribute to
increased understanding of both  innovative financial
tools available to watershed communities and the
governance processes necessary to get them accepted
through political institutions. The board is currently
drafting a report from the information gathered.

Project Chair: Langdon Marsh
EPA Strategic Goals: Clean and Safe Water; Healthy
Communities and Ecosystems
Primary Customer: Office of Water
The SmartWay Transport Partnership is actively inves-
tigating ways to make investment in the SmartWay
Transportation Upgrade Kit more attractive to trucking
companies. EPAs Office of Air and Radiation has
requested EFAB's assistance to study way in which
innovative financing and other related arrangements
can be structured so as to increase the adoption of
the various technologies in the SmartWay
Transportation Upgrade Kit.

Project Chair: Langdon Marsh
EPA Strategic Goals: Clean Air and Global Climate
Change
Primary Customer:  Office of Air and Radiation
Sustainable Water Infrastructure

Sustainable Water Infrastructure

EFAB  is working with the Office of Water, pursuant to
a charge from EPA Administrator Johnson, to explore
ways to further leverage public and private invest-
ments in wastewater and drinking water infrastruc-
ture. This area will  be a major focus for the board in
the coming year and will involve collaboration with
the National Advisory Committee on Environmental
Policy and Technology.

Project Chair: To Be Determined
EPA Strategic Goals: Clean and Safe Water
Primary Customer:  Office of Water
                                                     ENVIRONMENTAL FINANCIAL ADVISORY BOARD

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Environmental Finance Center Network

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Directors of the Environmental Finance Center Network with EPA Administrator
        Steven L. Johnson at the annual EFAB meeting, March 2006.

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                                  EF@N
                                  environmental finance center network
Region 1 Environmental Finance Center
AT THE UNIVERSITY OF SOUTHERN MAINE
  In This Report

  Background & Summary	
  Activities & Accomplishments
  Performance Measures..
.14
.15
.21

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                                            BACKGROUND  &  SUMMARY
       The Environmental Finance Center (EFC) at the
       University of Southern Maine, located in the
       Muskie School of Public Service, serves the
six New England states of the U.S. Environmental
Protection Agency's (EPA's) Region 1 (Maine, New
Hampshire, Vermont, Massachusetts, Rhode Island,
and Connecticut). The primary focuses of the New
England EFC are land use and conservation issues.
The purpose of the EFC is to further the joint goals
of EPA and the Muskie School of advancing creative
approaches to environmental protection and man-
agement, especially with regard to the associated
"how-to-pay" questions.

In particular, the center works to promote the under-
standing and practice of smart growth throughout New
England, build local capacity to deal with related
issues, and develop and apply techniques that go
beyond basic compliance with  government regulations.

The New England EFC began  its activities in 2001
and has undertaken a broad range of initiatives in
the intervening four years. Calendar year 2005 was a
period of considerable activity in numerous areas,
including the following:

• Completed the development of an online course
  on conservation finance.

• Developed a public lecture  series on changes in
  Maine from I960 through 2010.

• Developed and delivered  a training series for com-
  munities on controlling sprawl.

• Created a video and also wrote articles, reports
  and case  studies to promote financing approaches
  and land  development issues.
                                                 REGION 1
Worked with legislative and related groups to
research options for a legislative agenda to control
land use in Maine.

Moderated conference sessions, gave presentations,
and organized workshops related to smart growth,
land management, sprawl, and watershed
management.

Analyzed issues associated with military base clos-
ings in Maine.
                                             ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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         ACTIVITIES &
   ACCOMPLISHMENTS
Completed Projects & Initiatives

CONSERVATION FINANCE COURSE
A"  ~"1he New England EFC developed an online
      course in conservation finance, now available
  JL  at .
The EFC began advertising in June, including demon-
strating the course during a webcast entitled "Protecting
Water Resources Through Land Conservation: Funding
Options for Local Governments" to encourage use of
this tool. The webcast presentation was  a collaborative
effort between the International City/County
Management Association (ICMA) and the Trust for
Public Land (TPL), in cooperation with EPA.
PUBLIC LECTURE SERIES

The EFC initiated a "Changing Maine" public lecture
series, presented by the Old Fort Western of Augusta,
Maine, based upon the book, Changing Maine, 1960-
2010 and oriented toward the historical and decision-
making communities of Maine's Kennebec Valley. The
book summary can be viewed  as publication #04-05
at .

ARTICLES AND MEDIA OUTREACH

The EFC posted the following articles on its Web site
(http://efc.muskie.usm.maine.edu/pubs.htm):

• Stormwater Utility Fees: Considerations and Options
  http://efc.muskie.usm.maine.edu/docs/
  StormwaterUtilityFeeReport.pdf.

• Analysis of Per Capita Expenditures of
  Suburbanizing Communities in Maine
  http://efc.muskie.usm.maine.edu/docs/
  PerCapitaExpenditureAnalysis.pdf.

• Standardizing Geospatial Information for New
  England Conservation Lands
  http://efc.muskie.usm.maine.edu/docs/
  StandardizingGeospatialInfomation.pdf.
                                          REGION 1  EFC AT THE UNIVERSITY OF SOUTHERN MAINE

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             ACTIVITIES  &  ACCOMPLISHMENTS
In 2005, the New England EFC...

4 Provided nine technical assistance respons-
   es to individuals or organizations request-
   ing assistance with finance issues in smart
   growth or planning of smart growth-ori-
   ented projects in New England.
4 Published three  articles on its Web site.
4 Moderated, presented, organized, hosted,
   or participated in 16 conferences and
   meetings.
4 Developed more than six outreach and
   educational tools, such as a video, case
   studies, and a lecture series.
 Ongoing Projects & Initiatives
 COLLABORATIVE ACTIVITIES
 Next Communities Initiatives
  Next Communities Initiative
 From model ordinances to financial instruments, a
 wide variety of smart growth tools are now available
 to local land use decision-makers and stakeholders.
 The piece of smart growth that the Next Communities
 Initiative (NCI) addresses is the effective use and
 implementation of these tools at the local government
 level. NCI is training motivated community leaders
 and lay planners to help them facilitate smart growth-
 oriented change in their cities and towns. The first
 step, in calendar year 2004, was to develop a three-
 day workshop series for citizen leaders to 1) teach
 that change toward more sustainable land use is both
 desirable and possible; 2) foster an understanding of
 the intricacies and subtleties of local government  and
 politics; and 3) explore obstacles to smart growth and
 how they can be overcome at the local level.
The workshop was delivered twice in 2004 and once
in 2005. The curriculum now exists as three eight-
hour, highly interactive and experiential sessions:

  Session One: Participants come to understand
  sprawl not as a technical problem, but as (in
  Maine terms) a "wicked" problem, and one that is
  ill defined. The EFC explores sprawl as a problem
  because there is a lack of consensus on its causes
  and because it lacks obvious solutions. Often pro-
  posed solutions involve challenging trade-offs,  and
  fierce, value-based opposition. Participants gain
  insights to become informed leaders in the discus-
  sion of sprawl and advocates of solutions that seek
  a wider public good without undue injury to pri-
  vate interests and concerns. Participants leave the
  session with a mindset that smart growth is an
  objective worthy of pursuit and are ready to
  explore how to navigate change  through the local
  political system.

  Session Two: This session educates individuals
  about local government processes, both formal
  and informal. It helps those interested in changing
  local land use policies understand the twists and
  turns of local government, what motivates and
  constrains it, how to mobilize and support the
  town's opinion leaders and citizens, and how to
  navigate the system to effect change.

  Session Three: Conflict and change often go hand-
  in-hand. This session teaches community leaders
  basic skills to deal constructively with conflict over
  both basic values and perceived  interests. It pre-
  pares them to handle both personal and social
  conflict in the community setting. It also includes a
  final  capstone game where the skills,  ideas, and
  information learned in the previous sessions are
  applied to a practical case.

Building on the successful delivery of the first sets of
workshops, the New England EFC aims to move the
NCI curriculum into a train-the-trainer format. By
equipping organizations with these curriculum mate-
rials and a comprehensive instructor's manual, it
should  be possible to reach  a broader audience and
                                             ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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               ACTIVITIES  &  ACCOMPLISHMENTS
make a substantial contribution to smart growth-ori-
ented local land use change.

Water Program
In 2005, the EFC continued its program in water-
related  finance and outreach activities. These activi-
ties included:
• Expanding the Directory of Watershed Resources,
  originally created by the Region 10 EFC in Boise,
  Idaho, and now updated to include more than 300
  funding sources specific to New England (posted
  at .

• Conducting additional outreach activities based on
  the watershed directory and developing a report
  documenting lessons learned and recommended
  protocols for maintaining and updating the directory.

• Releasing an updated version of the EEC's
  Stormwater Finance report, which includes a new
  financial analysis section (see Stormwater Utility
  Fees: Considerations and Options at
  .

• Organizing and moderating finance panels for two
  EPA-sponsored workshops on reducing beach clo-
  sures in New England (see
  Presentations/Conferences below).

• Presenting finance options at a Maine Beaches
  Conference (see Presentations/Conferences
  below).

• Organizing a forum on asset management attend-
  ed by three of Maine's larger public water systems.

• Co-sponsoring a train-the-trainer event on asset
  management for the Maine Rural Water Program,
  Maine Drinking Water Program, and others.

• Developing an interactive, online self-evaluation
  on water system financial capacity.
Smart Growth Video

In 2005, the EFC produced a video ("Growing
Together:  Consensus Building, Smart Growth, and
Community Change") for communities in New England
grappling with tough issues
around land development.
The video provides munici-
pal officials, developers, and
community members a step-
by-step guide on working
together to arrive at mutually
beneficial land development
plans. The video includes
examples of places like
Lawrence, Massachusetts, that
have been successful using
consensus-building tech-
niques to  achieve smart
growth. Case studies and interviews with experts
emphasize the need for community visioning
and engaging everyone  affected by a proposed
development.

The video was shown to select audiences around
New England  in late 2005 and also was a recipient
                                            REGION 1 EFC AT THE UNIVERSITY OF SOUTHERN MAINE
                                                                                               "

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           ACTIVITIES  &  ACCOMPLISHMENTS
of a bronze Telly, an international award given to
honor outstanding video and film production. In
2006, the video was made available to municipal offi-
cials, local opinion leaders, lay planners, community
activists, developers,  and others via the New England
EFC Web site at .

Implementation of Recommendations to Strengthen
Maine^s Rural Economy and the Natural Resources
Based Industries on  Which It Is Based
In 2005, the EFC provided  continuing chairmanship of
a "Steering Committee to Oversee Implementation of
Recommendations from the Elaine House Conference
on Maine's Natural Resource-Based Industries." The
November 2003 Elaine House Conference produced
75 recommendations  for action in the agriculture,
aquaculture, forestry,  fisheries, and tourism sectors that
are the foundation of Maine's rural economy and
landscape. As documented in its December 2004
report to the governor, which can be viewed at
, the Steering
Committee oversaw significant progress on implemen-
tation of 60 of these recommendations by the execu-
tive agencies directly  responsible. Implementation of
these recommendations continued in 2005.

Land Use Law Provisions
In 2004, the New England EFC published some
model amendments to Maine's (and other states')
land use control legislation in the Maine Law Review.
This document is available as publication #04-06 at
. The model
amendments originated directly from the EFC's
roundtable discussions in 2002, and are designed to
address the legal obstacles to smart growth identified
by roundtable participants. The EFC assisted (and
continued to assist in 2005) the Community
Preservation Advisory Committee of the Maine
Legislature, GrowSmart Maine, and others in
researching options for a legislative agenda based
upon these model amendments.

675" Inventory of Protected Lands Data

In 2005, the EFC completed a Geographic Markup
Tool to allow online  upgrades to conservation lands
data sets. Complementary software applications were
also incorporated into the tool, contributing to the
creation of a unified framework for capturing conser-
vation lands data in Maine and EPA Region 1 as a
whole. Discussions continued about how to incorpo-
rate all or a portion of the technology into existing
open space data management efforts in the six New
England states.

Other Efforts
At the request of the governor of Maine, the EFC con-
ducted economic impact analyses of the Department
of Defense (DoD) recommendations for military base
closures and realignment in the states of New
Hampshire and Maine. The EFC reported and present-
ed results to the Base Realignment and Closure
Commission at a public hearing in Boston, and there-
after conducted cost impact analyses of these DoD
recommendations at the request of the commission.

PRESENTATIONS/CONFERENCES

• Moderated a conference session, "The Frontiers of
  Rural Smart Growth" at the Smart Growth Network
  annual meeting in Miami, Florida.

• Moderated a conference session, "Regional Land
  Management and Sprawl" at the Legislative Policy
  Forum on Economic Development in Augusta,
  Maine.

• Delivered a presentation, "New Initiatives for
  Maine's Natural Resources-Based Industries" at the
  Maine Legislators Policy Forum on Economic
  Development in Augusta, Maine.

• Delivered a half-day workshop  in Concord, New
  Hampshire, to 100 planners and others interested  in
  smart growth. This event focused on policy innova-
  tions developed through the New England EFC.

• Delivered a half-day training event, "Negotiation
  Skills for Land Conservationists" at the Maine Coast
  Heritage Trust Annual Meeting.
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             ACTIVITIES  &  ACCOMPLISHMENTS
Co-organized a one-day workshop, "Community
Problem-Solving Through Collaboration" at an
event sponsored by the Maine Collaborative
Practices Working Group in Hallowell, Maine.

Hosted a half-day conference for the EFC-led ini-
tiative, Forum on Residential Density,  in Portland,
Maine.
                                                Provided an overview and moderated finance pan-
                                                els at two conferences on reducing beach closures,
                                                one held in Warwick, RI, and the other in
                                                Portsmouth, Rhode Island.

                                                Presented "Financing Approaches and EFC
                                                Resources" at annual Maine Beaches Conference
                                                in Wells, Maine.
Participated on a panel session, "A Web-Based
Geographic Markup Tool for Capturing
Conservation Lands Data" at the 20th Annual
Northeast Arc-Users Group Conference.

Presented "Smart Growth and Water Resources:
The High Density Dilemma," a speech at an EPA-
sponsored workshop on the Saco River Watershed
in Biddeford, Maine.

Discussed "Funding and Donation Sources for
Watershed Management" at an EPA-sponsored
workshop on the Saco River Watershed in
Biddeford, Maine.
                     CHANGING  MAINE
Spoke about "A Web-
Based Geographic
Markup Tool for
Capturing Conser-
vation Lands Data" a
sesson at the 20th
Annual Northeast
Arc-Users Group
Conference in
Portland, Maine.
Spoke about "Rural
Land Protection:
Thinking Strategically"
at the Annual Meeting
of the Western
Foothills Land Trust in Oxford, Maine.
Spoke about the book, Changing Maine,
1960-2010 to the Maine Society of Washington
D.C. at its annual meeting in Arlington, Virginia.
• Spoke about "Land Conservation in Urban Areas:
  What Is Most Strategic?" at a Greater Portland
  Neighborhoods Conference in Portland, Maine.


New Projects & Initiatives

FORUM ON RESIDENTIAL DENSITY
The escalating debate in New England between those
who advocate for smart growth and those who advo-
cate for the suburban lifestyle associated with sprawl
urgently need reference points on the question that is
central to both sides: residential density. The New
England EFC has conducted initial investigations into a
two-year expert consensus forum on residential density
as an aid to the small cities, towns, and suburbs of
New England embroiled in this debate. Efforts are
underway to fund a forum devoted exclusively to this
issue, the product of which would be an authoritative
manual on the standards of residential density that
best promote the public health, safety, and welfare.

A LIBRARY OF CASE STUDIES
One obstacle to smart growth across New England is
that so few  smart developments have been built in
the past three-quarters of a century. Here and there
on the New England landscape they are  beginning
to appear. As they do, however, it is important to
learn how and why they come to fruition. The EFC
is developing a series of case studies as the basis for
both establishing the causes and means of these
developments and as useful tools for instructing oth-
ers how they may be replicated on the landscape.
The cases are being identified in collaboration with
EPA Region 1. As they are completed they will be
                                          REGION 1  EFC AT THE UNIVERSITY OF SOUTHERN MAINE

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            ACTIVITIES  &  ACCOMPLISHMENTS
posted on the New England EFC Web site in an
accessible and interactive format.
MILITARY BASE REDEVELOPMENT
CONSULTING/INVOLVEMENT

In late 2004, the President released a new round of
military base closures for the United States, including
several in New England. Given the difficulties of
accomplishing large-scale smart growth development
in the New England context, each base closure rep-
resents an opportunity for smart growth implementa-
tion. In 2005, the EFC assisted in capitalizing on
these opportunities through economic impact analy-
sis for several installations in Maine.

                  Contacts
  Dr. Samuel B. Merrill, EFC Director
  Phone: (207) 288-8596
  E-mail: smerrill@usm.maine.edu
SMART GROWTH
IMPLEMENTATION/DEMONSTRATION

Housed within a university, the EFC is in a position to
explore opportunities for utilizing university-owned
land and facilities to develop in a smart growth man-
ner. In 2005, the EFC coordinated multi-stakeholder
input on redevelopment options being considered by
the University of Southern Maine for the Portland Hall
parcel (3.5 acres) in downtown Portland. Based on the
feedback, the EFC created a suggested approach to
redevelop the parcel for the president of the university.
                                         ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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PERFORMANCE   MEASURES
    Outcomes

      A   s a result of the activities and accomplish-
     /\  ments outlined in the previous section, out-
          comes have included the following benefits
    to communities and individuals:

    • A clearer understanding of tradeoffs involved in
     choosing various methods for financing stormwa-
     ter utilities.

    • A clearer understanding of the need for public
     investment in open space acquisition.

    • A broader understanding of the role that the cre-
     ative economy has in supporting downtown revi-
     talization efforts.

    • A broader understanding of the social, political,
     and other changes that have transpired in Maine
     during the last 40 years and how they should
     shape current policy discussions.

    • A broader understanding among land trusts and
     other conservation groups of the need for incorpo-
     rating growth-related criteria in their land acquisi-
     tion prioritization systems.

    • A broader understanding of the role that a vibrant
     natural resource-based economy plays in the pro-
     tection of the landscape, the restraint of sprawl,
     and the promotion of smart growth.

    • A greater chance that novel, comprehensive  inno-
     vations in land use law might be adopted in Maine
     and throughout New England.

    Because the work of the New England EEC focuses on
    reducing sprawl, we are asked to help identify and rec-
    ommend modifications in land use policy at the state
    level. Impacts of some of these changes might be
    observable as a decline in the number of standard sub-
    divisions in the state over a substantial period of time.
Impacts
In 2005, the New England EEC continued its mission
to helping communities identify methods for funding
environmental initiatives. Specific environmental
issues addressed through the EEC's activities and
accomplishments include:

• Land use and conservation

• Smart growth

• Watershed protection
                                               REGION 1 EFC AT THE UNIVERSITY OF SOUTHERN MAINE

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                                  EF@N
                                  environmental flnance center network
Region 2 Environmental Finance Center

AT THE MAXWELL SCHOOL AT SYRACUSE
UNIVERSITY
  In This Report

  Background & Summary	24

  Activities & Accomplishments	25

  Performance Measures	39

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                                              BACKGROUND  &  SUMMARY
       The U.S. Environmental Protection Agency's
       (EPA's) Region 2 Environmental Finance Center
       (EEC)  at Syracuse University's Maxwell School
was established in 1993 and serves New York, New
Jersey, Puerto Rico, and the Virgin Islands. Since that
time, and throughout 2005, the Syracuse EEC continued
its mission to  enhance the administrative and financial
capacities of state and local government agencies and
the nonprofit  and private sectors as they endeavor to
improve environmental quality and maintain environ-
mental infrastructure.

Throughout 2005, the  Syracuse EEC continued to
establish working collaborations with government
officials and nonprofit and private sector programs
that provide technical  assistance. One result of these
efforts has been the continued development of the
Public Management and Finance Program (PMFP).
Within the framework of the PMFP, the EFC provides
public outreach and training and facilitates partner-
ships. In fact, one of the hallmarks of the EFC's work
under the PMFP is its collaboration with its partners
to provide customized  outreach and training for  indi-
vidual communities, providing tailored approaches
rather than a  one-size-fits-all approach.  In this way,
the EFC has been successful in helping individual
communities  understand specific issues of concern.

The intent of the PMFP is  to introduce local officials
and public managers, as well as other community
leaders, to the fundamental concepts and practices of
local government  finance and strategic planning;
holistic approaches to environmental stewardship,
infrastructure improvements, and planning; and other
forms of technical assistance. It can also be described
as a "technical assistance cooperative" that forges
teams among various technical assistance providers
to assist communities.  Areas of application include
source water  protection, solid waste, water and
wastewater problem-solving, asset management,  and
other environmental improvements.
                                                   REGION 2
                                     VI
In 2005, the EFC also started developing a program
on sustainability as well. The intent of the program is
to offer process facilitation, public outreach, training,
education programs, and direct and indirect technical
assistance to support sustainability initiatives. Climate
change and renewable energy, green buildings, and
resource use and waste reduction are some of the
issues targeted under sustainability. To this  end, the
EFC has engaged in  intensive collaboration with a
number of national and local agencies and organiza-
tions and has already begun more than a dozen new
initiatives in New York and nationally.

Another major area of involvement has  been develop-
ment of a substantial partnership with the Syracuse
Center of Excellence in Environmental and Energy
Systems (CoE), created by the state of New York and
funded by the state,  EPA, the U.S. Department of
Energy (DOE), and private sector sponsors. The inten-
tion of the CoE program is to foster innovations to
improve health, productivity, security, and sustainabili-
ty in various environments. Activities include product
development and educational programs affecting built
environments and the urban and rural setting. The
EFC is engaged in several new initiatives with CoE,
two of which involve the U.S. Green Building Council.

Other services provided by the EFC in 2005 include
assistance with rate-setting and analysis, facilitation of
processes to guide environmental improvements,
training events focused on environmental issues, and
analyses of funding options.

The Syracuse EFC's goal  for the  future  is to have
three major functional areas: 1) the PMFP, 2) a sus-
tainability program,  and 3) the partnership with CoE.
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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed Projects & Initiatives

PUBLIC MANAGEMENT AND FINANCE
PROGRAM (PMFP)

Since the Region 2 EFC was established at the
Maxwell School, it has become a resource for
municipal professionals and other community
representatives through a variety of presentations,
workshops,  and interactive forums. The PMFP has
served as a means for municipal professionals and
leaders from EPA Region 2 communities to learn,
explore, and discuss public finance and other issues
relative to environmental improvements.

The U.S. Department of Agriculture (USDA) contin-
ued its support for the water- and wastewater-related
activities of the PMFP, awarding $205,300 to the
Region 2 EFC for 2004 and 2005 program activities.
The bulk of activities performed under the  USDA
grant involved specific municipal water or waste-
water projects in which there was a need to facilitate
the processes involved in the planning, financing,
and implementation  phases. These processes
involved community-specific public outreach and
education strategies related to the costs associated
with water or wastewater projects,  a critical link
needed to generate public awareness and support
and to reduce project costs.

There is little change in the primary functions of the
PMFP to facilitate partnerships among the technical
assistance community, provide public outreach and
education to facilitate environmental improvements,
and training local government officials and technical
assistance providers. These three functions, or com-
ponents, of the PMFP can be critical links to the abil-
ity of a community to successfully  develop a project.
The subsections that follow identify those links.

The focus of PMFP activities has historically been in
New York State, but  because the PMFP program can
be replicated elsewhere, EFCs located in Kentucky,
Maine, North Carolina, California, and New Mexico
collaborated in late 2004 to submit proposals to
build upon the PMFP concept in their respective
states. In addition, the Region 2 EFC started to pro-
mote the PMFP in New Jersey in 2005.

Technical Assistance Partnerships
The EFC sponsors quarterly Technical Assistance
Partnership Forums for the purpose of promoting and
sustaining collegial relationships among technical
assistance providers (TAPs). In 2005, each forum was
attended by an average of 20 TAPs representing non-
profit, public, private, and academic organizations
 In 2005, the Syracuse EFC...

 4  Invited more than 1,000 local government
    officials and TAPs to its specialized train-
    ing events.
 4  Reached 1,750 people through its newsletter.
 4  Facilitated information exchange among
    346 active members of its listserv.
 4  Gave 17 presentations at state, university,
    nonprofit, and national, and international
    events.
 4  Hosted more than 10 conferences.
 4  Attended more than 13  conferences.
 4  Facilitated process discussions at approxi-
    mately 50 meetings with local, state,  and
    federal agencies and nonprofit groups.
 4  Developed new collaborations through
    more than 25 meetings  with city, state,
    national, university, and tribal agencies as
    well as companies and nonprofit groups.
 4  Attracted 22 to 150 people to each of its
    training events.
                                                       REGION 2 EFC AT SYRACUSE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
that serve New York as well as other states. The
forums have created an environment in which an
exchange of information reduces duplication of
efforts, thereby maximizing technical assistance
resources available to other communities. These
forums also promote efforts that complement one
another, enhancing the ability of the communities the
TAPs serve to access new or additional resources.
Meeting on a regular basis allows TAPs to 1) share
information about projects without interruptions;  2)
discuss solutions to particular situations and brain-
storm relevant ideas; 3) learn about new statutes, pro-
cedures, or guidelines in their fields; and 4) receive
new or advanced training.

Communicating with one another about project plan-
ning and implementation and sharing challenges and
successes is a benefit to all communities, and these
forums provide  ample opportunity for TAPs to con-
nect with one another and facilitate communication
about community infrastructure projects and ideas.
The forums begin with each TAP representative
briefly mentioning projects or issues s/he is working
on, followed by a specific topic of discussion.
Among the topics at the 2005 forums were trends in
construction methods/costs; issues of affordability;
standardization of income surveys and project devel-
opment; updates from the Environmental Finance
Center Network (EFCN), Environmental Financial
Advisory Board (EFAB) and the Council of
Infrastructure Financing Authorities (CIFA); asset
management; USDA news, including underwriting
and other credit issues; the Syracuse Center of
Excellence as a  resource for technical assistance
providers; and comprehensive planning. The meet-
ings also include open discussions about a range of
issues, concerns, or projects with ample opportunity
for people to network and share information.

Stakeholder Outreach and Education

The EFC has developed a distinctive niche with
respect to generating public interest in environmental
infrastructure projects. Public outreach and education
activities are critical links for communities to  gener-
ate public awareness and support and reduce project
costs. Over the past several years, the EFC has
received calls from municipal leaders who worked to
develop a much-needed project but feared that it
might be rejected by voters due to a lack public
understanding. It is not uncommon for the public to
vote against a project due to misperceptions, particu-
larly related to household cost issues.

The EFC has found that public education and out-
reach strategies have been successful in relaying an
understanding about the impetus for the project, the
process of project development, and the derivation
of the household cost. The EFC approaches  each
community as a distinct entity for outreach and edu-
cation services rather than applying a "one-size-fits-
all"  model. To begin, EFC  staff meet with community
leaders to learn the historical elements of a prospec-
tive project as well as the  current conditions prompt-
ing  the planning for the project. Information con-
cerning the extent to which groups have formed in
favor or opposition to the project is obtained as well
as all information concerning estimated costs.

The EFC customizes the outreach strategy for each
community. In some communities, the EFC develops
a community-specific survey to gauge the level of
public interest and identify public perceptions.
Alternatively, or in tandem with the surveys, the EFC
might conduct a series of  focus groups to elicit input
from homogenous factions within the population and
to get insight into any concerns that might exist,
what information (accurate or inaccurate) people
have received, and what the general perceptions are.
These tools enable the EFC to create a sensible strat-
egy for the public outreach and education process.
Depending on the community, the EFC might create
                                                  A focus group meeting
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               ACTIVITIES  &  ACCOMPLISHMENTS
materials for display and/or distribution in which
information, such as the cost of wells/septic systems,
is effectively depicted using graphic and verbal
methods. Other material might include information
concerning the costs associated with getting water
from source to tap. EFC material is created to be
specific to the community and consequently enjoys
an element of responsiveness from community mem-
bers that generic material cannot provoke.

Another outreach tool is the Community Roundtable.
The EFC brings a light meal in the early evening and
creates a panel of experts at the front of the room.
The panels are typically comprised of at least one
local government official, an engineer, and a repre-
sentative from a government-sponsored funding
agency. The facilitator leads the panel through a
brief series of questions concerning the impetus for
the project, the technical feasibility of the project,
and the anticipated costs per household. The panel
provides information on how financing takes  place,
the length of time it will take for the project to be
built, and other issues the EFC believes appropriate.
The audience is then engaged in a facilitated  discus-
sion in which they are provided the opportunity to
express their concerns.

In 2005, the EEC's public outreach strategies were suc-
cessful  in involving the public and relaying, at the very
least, an understanding of the reasoning behind the
government's decision to consider or proceed with a
particular project. For example, in the town of Windsor,
New York, EFC staff developed and implemented a
survey to build upon the public outreach efforts under-
way in  the town. The EFC continued to assist the town
of Windsor in the development of this potential project.

In the town of Inlet, New York, EFC  staff helped
facilitate a discussion about the development  of a
wastewater infrastructure project. The town is locat-
ed in the Adirondack Mountains, and like most
Adirondack municipalities,  has a large seasonal com-
munity. Inlet officials have  made at least two
attempts to pursue a water project and one recent
attempt to pursue a wastewater project—all of which
failed. Inlet officials are concerned about drinking
water quality, but at this time are concentrating
efforts on the development of a wastewater system.
All properties adjacent to the Fifth Lake outlet in
Inlet are nonconforming to New York Department of
Environmental Conservation  (DEC) requirements.
Cost and public distrust are perceived as the main
impediments. The EFC conducted community sur-
veys, focus groups, and roundtables to assist Inlet
with the development of this potential wastewater
project. Efforts are ongoing.

Training

The EFC has a developed a unique role in providing
customized training. As the PMFP was being devel-
oped, the EFC sought to  ensure that its trainings com-
plemented the training provided by its partners,
including organizations such  as the Rural Water
Association, Rural Community Assistance Partnership
(RCAP), RCAP Solutions,  the New York Conference of
Mayors, and the Association of Towns. In order to
impart the greatest benefit to  communities without
duplicating existing training available, the EFC has col-
laborated with its partners to  create customized
instructional formats, focused on smaller groups and
individuals, which take place  over a multi-day period
and incorporate a multitude of subject areas. This
approach allowed the EFC to "fill the gaps" that were
believed to exist in the delivery of technical assistance
and training among smaller communities. In 2005, the
EFC invited more than 1,000  local government offi-
cials and technical assistance  providers to its special-
ized training events.  Furthermore, the EFC made itself
available to provide  content to the trainings held by
its partner organizations as needed and appropriate.
July 2005 training participants
                                                           REGION 2 EFC AT SYRACUSE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
The EFC held four separate multiple-day training
events in 2005 around New York State. The topic
areas presented at the training events were deter-
mined primarily by responses from the EFC's TAPs
and community representatives. The subjects
addressed in the 2005 trainings included public
finance, capital planning and budgeting,  municipal
bond  issuance, computer finance models, rate-setting
and analysis, asset management, environmental
conflict management  and resolution, project
financing procedures  and regulations, and strategic
management.

Source Water Protection Project
Under the initial guidance of the University of New
Mexico EFC and in cooperation with EPA Region 2,
the EFC has been working with communities in
Chenango County, New York, with common con-
cerns  for potential drinking water contamination. To
achieve an outcome that combines both  process
facilitation and direct  technical expertise, the EFC
continued a collaborative relationship with the Water
Resources Institute to carry out the activities of the
project. The project was completed in June 2004, but
the EFC has continued to work with the  Chenango
County Water Operators Council (a group of public
and private water system operators and representa-
tives from the County Health and Planning
Departments, Soil and Water Conservation District,
and the local  Environmental Education Center).
Through the council,  the EFC secured a $6,000 grant
from the Altria Group, a private foundation, to work
on a county project aimed at raising awareness of
drinking water sources and protection among private
water system users. The following activities were
completed on behalf of the Source Water Protection
Project during 2005:

• Conducted focus groups and community meetings
  and developed outreach materials to promote source
  water protection practices among homeowners.

• Facilitated meetings of the Chenango County Water
  Operator's Council.

• Created a booklet on source water protection in
  cooperation with the Chenango County Health
  Department to be distributed to citizens and
  municipalities in the county.

The Source Water Protection Project took a water-
shed management approach and is based  on the
notion that communities working proactively to pro-
tect their health and resources will prevent contami-
nation of their drinking water sources. A proactive
approach can help  a community avoid serious health
risks associated with drinking water contamination. It
can also be an economical  approach—preventing
contamination can be much less expensive than
cleaning a contaminated source.

Rate-Setting Assistance

In 2005, the EFC continued to work with communi-
ties attempting to create equitable user rates as they
pursued water and  wastewater system improvements.
The EFC learned through evaluations that training
events often resulted in "information overload," and
municipal representatives derived greater benefit from
more one-on-one methods of instruction. Providing
individual assistance requires more time  on the part of
EFC staff; however,  it results in the delivery of more
comprehensive information  to communities and
ensures their ability to develop a stronger internal
capacity to work with rate structures. In turn, this
ensures that the government's investment in the EFC
will have the longer-term impact it seeks.
Well testing
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               ACTIVITIES  &  ACCOMPLISHMENTS
Panels on Wastewater for Local Representatives      Articles
First developed and implemented in 2004, the
"Wastewater Panels" are the product of a collaborative
approach involving the New York Water Environment
Association (NYWEA), the New York Rural Water
Association (NYRWA), DEC, and the EEC. While many
think of the chief operator as the responsible party for
a municipal wastewater system, the overall success or
failure of the system largely depends upon the local
officials  and other non-technical staff. Informational
sessions were specifically designed to reach out to
local officials and other non-technical staff; the target
audience was comprised of local representatives who
contribute  to the management of their wastewater
facility, including mayors, supervisors, clerks, and
sewer board members.

A key component of each session focused on funding
sources  for wastewater infrastructure  improvements.
Representatives from the New York State
Environmental Facilities Corporation,  USDA/Rural
Development, and the New York State Energy
Research and  Development Authority talked about
potential sources of funding for wastewater projects
and provided  a wealth of information for participants.

Several factors were instrumental to the success of
this project including: free-of-charge evening ses-
sions, an interactive agenda, and conveyance of
technical information in layperson terms.
Additionally, a comprehensive marketing approach,
using printed and electronic media buttressed by
personal contact, was implemented to reach the tar-
get audience throughout New York State. A pre-ses-
sion questionnaire focused on participants' needs
and key issues, coupled with a facilitated roundtable
discussion, allowed each session to be responsive
and individualized. Participants were afforded the
opportunity to network with both funding agency
representatives and technical staff.

PUBLICATIONS AND  MEDIA OUTREACH

The EEC produced a number of printed outreach
materials, including the following:
Wrote articles for NYWEA's Clearwaters magazine
(Fall 2005 issue), the New Jersey League of
Municipalities, and for the DEC'S "Water Week."

Asset Management Information Brochure
Created brochure for the Advanced Asset
Management workshop  discussed later in this report.

Newsletter
Produced two issues of the comprehensive EEC news-
letter, Connections, and mailed it to  1,750 individuals.

Source Water Protection Brochure
In conjunction with the Chenango County Department
of Health, and as supported by the Altria Foundation,
the EEC produced a brochure to be  disseminated to
citizens and municipalities in Chenango County.

Ongoing Projects & Initiatives

The EFC's guiding principles for ongoing projects
and initiatives are as follows:

• Attend professional association meetings and pre-
  sentations about the EFC Network on relevant
  issues such as capital  planning and financing,
  water and wastewater rate-setting, collaborative
  planning, capacity building, asset management,
  and sustainable community development.

• Participate in  planning prospective projects with
  government, nonprofit, and private sector partners
  of the PMFP, including projects that can receive
  support from  funders.

• Collaborate with other technical assistance organi-
  zations to provide assistance to rural communities
  seeking to address environmental infrastructure
  improvement  projects.

• Serve as a content provider to government and
  nonprofit organizations that provide assistance and
  conduct workshops for municipal decision-makers.
                                                          REGION 2 EFC AT SYRACUSE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
• Continue to emphasize collaborating with other uni-
  versities and nonprofit organizations to develop pro-
  posals addressing environmental concerns, particu-
  larly those relating to water issues, but also includ-
  ing Brownfield redevelopment, sustainable develop-
  ment, asset management, and waste management.

• Respond to requests from communities for assis-
  tance ranging from  how to finance major water
  system repairs and how to develop capital budgets
  for environmental improvements to conducting
  focus groups to elicit public input or assess public
  awareness and support of environmental projects.

COLLABORATIVE  ACTIVITIES

Below is  a representative listing of EFC activities that
exhibit major collaborative efforts.

EFC Network
PMFP. The Public Management and Finance Program
(PMFP) was the most  significant collaborative activity
during 2005. EFCs located in Kentucky, North
Carolina,  New Mexico, Idaho, California, Maine and
Maryland were included in a proposal submitted to
the USDA in December 2004 to fund the water and
wastewater work of the PMFP.

Source Water Project. With the initial  guidance of the
New Mexico EFC and  in collaboration with four other
EFCs, the Region 2 EFC continued to collaborate on a
Source Water Project. The EPA funding for the project
officially ended in June 2004; however, the Region  2
EFC sustained the project through support from a pri-
vate foundation. Finalization of activities occurred in
2005.

Other

Center of Excellence. The EFC increased its program-
matic collaboration  with the Syracuse Center of
Excellence in Environmental and  Energy Systems
(CoE), a major initiative of the federal and New York
State governments. The CoE is a federation of 72
academic, government, and private sector partners.
The EFC  assisted the CoE with planning and carrying
out a major symposium and reviewed and edited the
production of the CoE's annual progress report. The
CoE helped sponsor an EPA Advanced Asset
Management workshop hosted by the EFC.

Community Assistance. The New York State
Environmental Facilities Corporation (NYSEFC), RCAP
Solutions, Inc. and EFC staff collaborated on two
occasions in 2005 to provide comprehensive assis-
tance to communities (the towns of Inlet and
Windsor) in need of drinking water and wastewater
systems. RCAP and NYSEFC provided assistance in
developing the applications for grants and loans
while the EFC focused  on methods to generate com-
munity support and customize  public education
efforts concerning the costs of systems and issues
surrounding the impetus for the projects.

Grant Collaboration. The  EFC collaborated on an
EPA grant proposal with New York Water
Environmental Association (NYWEA), the New York
State Department of Environmental Conservation
(DEC),  and the Maryland Center for Environmental
Training (MCET), in addition to numerous other non-
profit and state agencies within the Susquehanna
River Basin.

Interaiunicipal Cooperation. The EFC facilitated dis-
cussions with the town of Hanover and the villages
of Silver Creek and Forestville regarding inter-munici-
pal cooperation  and shared services.  The EFC
brought the New York  State Office of State
Comptroller to the table to assist with this project.

Wastewater Panels. The EFC  continued implementa-
tion of a unique series  of training events, the "Panels
on Wastewater for Local Representatives," which
were developed in collaboration with the DEC, the
New York Rural Water Association, and NYWEA. The
EFC built on this project throughout 2005 with addi-
tional funding from the DEC. The Region 2 EFC
advised the state of Rhode Island about the
Wastewater  Panels and offered  to help establish a
similar  program  in that state.
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               ACTIVITIES  &  ACCOMPLISHMENTS
Media. The EFC produced and will continue to
update several electronic media communications,
including:

Listserv. PMFPTalk is a listserv providing local gov-
ernment leaders and technical assistance providers a
means to submit questions or disseminate informa-
tion. Currently, there are 346 active members.
PMFPTalk is primarily promoted and utilized as a
tool for community members to obtain answers to
questions they have about issues of water rates,
water systems, wastewater treatment, finance pro-
grams, and technology. TAPs that have expertise in a
range of issues prepare responses. Members can also
search the archives of the listserv to get answers to
questions that might have been addressed in the
past. Additionally, PMFPTalk is a venue for posting
information about upcoming EFC events such as
conferences and training sessions. It also dissemi-
nates information about events, funding opportuni-
ties, and other important notices on a routine basis.

Web Site. The EFC updated its EFC Web site
(www.maxwell.syr.edu/efc) to  include community-
specific Web pages, relevant technical assistance links,
and more. The Web site will continue to undergo
additional changes.

PRESENTATIONS, CONFERENCES,
AND MEETINGS
Presentations

The following list shows the conference or event EFC
attended, followed by the topic of the presentation.

• New York Association of Towns conference: EFC
  and PMFP services for rural New York communi-
  ties including rate analyses, technical assistance
  coordination, public outreach methods, and meet-
  ing facilitation.

• NYWEA spring conference:  EFC services and
  Wastewater Panels—highlighting results of ses-
  sions, plans for future sessions, and integration of
  asset management principles and training.
New York Council of Mayors spring conference:
EFC services, projects, and program highlights.

Cornell University Local Government Program:
Working with consultants to develop successful
infrastructure projects.

Meetings of the Syracuse University Maxwell
School alumni from Central New York—mostly
public officials: Capabilities of the EFC.

Hurricane Katrina "teach-in" (Syracuse University):
Advice on sustainable redevelopment.
FOCUS Greater Syracuse (sus-
tainable communities non-
profit group) presentation on
the progress toward cleaning
up central New York water
and waterways: EFC  services.
Link

  Expo
Adirondack Ecology Center networking meeting
(intent was to collaborate over sustainability proj-
ects and better leverage resources for the
Adirondack region): EFC services.

Large Chinese delegation at Syracuse University: EFC
services and NYS local government perspective.

NYDEC headquarters in Albany: NYDEC-led pro-
gram for the Chinese delegation.

Onondaga County Cornell Cooperative Extension
annual meeting: Presentation on Syracuse Center
of Excellence (CoE).

Invitation-only meeting in Syracuse with U.S.
Green Building Council President Rick Fedrizzi:
EFC capabilities.

Oswego County School Boards Association:
Interest-based negotiation.

Meeting with New Jersey Department of
Environmental Protection Commissioner, New
Jersey Highlands Commission, New Jersey
                                                         REGION 2 EFC AT SYRACUSE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
  Environmental Financing Program, New Jersey
  State League of Municipalities, and mayor of
  Peapack and Gladstone: overview of EFCN and
  Region 2 EFC capacities.

• Sustainability networking meeting ("Leveraging
  Central New York's Resources to Increase the
  Movement Toward Sustainability") co-hosted and
  presented at this collaboration between Syracuse
  University and the SUNY College of Environmental
  Science and Forestry.

• Syracuse Post Standard editorial board meeting:
  EFC and CoE activities and sustainable communi-
  ties principles.

Conferences—Hosted

• Four PMFP Technical Assistance Partnership Forums
  (TAPF) at Syracuse University for local government
  officials and technical assistance providers.

• A PMFP/EFC three-day conference at Beaver
  Hollow Conference Center for local government
  representatives and technical assistance providers.
  Training was provided in rate-setting, public out-
  reach strategies, innovative financing, drinking
  water security, asset management, wastewater
  treatment operations, and project development.

• Four training events,  "Panel on Wastewater for
  Local  Representatives" (advanced and basic), in
  collaboration with the DEC, New York Rural Water
  Association, and NYWEA (two in Findley Lake and
  one each in Lake Placid and Albany).

• Highly successful two-day EPA Advanced Asset
  Management Workshop in Syracuse.

• PMFP two-day workshop in Findley Lake for local
  government representative and TAPs. Training was
  provided in strategic  management, innovative
  financing, working with consultants to gain suc-
  cessful project completion, asset management, and
  computer-based capital planning.
• Three-day Syracuse CoE conference in Syracuse on
  indoor air quality (co-hosted and helped plan).

Conferences—Attended

• EPA Advanced Asset Management seminar in
  Pennsylvania to improve the range of services
  offered by the EFC/PMFP

• Two EFAB and EFCN meetings (Washington and
  San Francisco).

• Invitation-only Asset Management Working Session
  in Washington, D.C.

• Maryland Center for Environmental Training, Asset
  Management "Train the Trainer" national confer-
  ence in San Antonio. Staff received certification.

• Invitation-only "Presidential Forum on Ethics and
  Entrepreneurship" held at Lemoyne College in
  Syracuse.

• Council of Infrastructure Financial Authorities
  (CIFA) conference in Chicago.

• Annual conference of the New Jersey State League
  of Municipalities in Atlantic City.

• U.S. Green Build Council annual convention in
  Atlanta (represented EFC and hosted major CoE
  exhibit).

• Sustainable Tompkins County symposium in
  Ithaca, New York.

• Invitation-only annual meeting of the University
  Hill Corporation (Syracuse).

• Invitation-only U.S. Green Build Council innovative
  financing summit (McGraw Hill, New York City).

• Underground Infrastructure Management confer-
  ence (Washington).
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               ACTIVITIES  &  ACCOMPLISHMENTS
Meetings—Process Facilitations

 • Seven meetings in the town of Windsor to discuss
  the results of the resident survey and the final
  engineering report, and to facilitate the public out-
  reach process.

 • Four meetings with town of Inlet representatives
  and citizens regarding a comprehensive community
  survey pertaining to the potential infrastructure
  project in the town.

 • Eight town meetings in Chenango County regard-
  ing the Altria and Source Water Project, including
  two Water Operators Council  meetings.

 • Two meetings with town of Fenton officials to
  gather data on potential wastewater project.

 • Ten meetings with Oswego County officials
  regarding the facilitation of public input into the
  process of potentially privatizing the existing pub-
  lic solid waste management system.

 • U.S. Department of Agriculture panels reviewing
  Maxwell School capstone projects on alternative
  water rates and affordability.

 • Five meetings of FOCUS Greater Syracuse (feed-
  back on presentations on the Syracuse Center of
  Excellence, Sustainable Cities, Sustainable Waste
  Management, Sustainable Development, Indoor Air
  Quality and Community Development).

 • Two meetings with the town of Hanover, one
  meeting with the village of Silver Springs, and one
  meeting with the village of Forestville, regarding
  inter-municipal cooperation and the potential of
  shared services.

 • Six meetings of the spring 2006 conference plan-
  ning meeting of FOCUS Greater Syracuse (repre-
  senting both the Syracuse CoE and the EFC). The
  topic was building a sustainable community.
 • Met with the village of Silver Creek to present a
  water rate analysis.

 • Met with the town of Cortandville Citizens for
  Aquifer Protection and the Economy (CAPE)
  regarding a local dispute over aquifer protection
  and economic development.

Meetings—Development of New Collaborations

 • Three meetings  with city of Syracuse Economic
  Development representatives regarding EEC's assis-
  tance with Brownfield development projects.

 • Meeting with a liaison to the Onondaga Indian
  Nation regarding the potential of EFC collabora-
  tion over land-claim issues.

 • Meeting with Syracuse University's Global Affairs
  Institute regarding the EFC participating in a study
  focusing  on the  effectiveness of environmental
  non-governmental organizations.

 • Meetings with three local technical assistance
  providers and NYWEA regarding co-sponsorship
  of future Asset Management Workshop.

 • Meetings with the Syracuse Center of Excellence
  in Environmental and Energy Systems (CoE), the
  Campbell Public Affairs Institute (CPAI) and the
  Center of Environmental Policy and Administration
  (CEPA), all at Syracuse University, regarding collab-
  orative programming.

 • Two meetings with representatives of EPA and
  GHD (a company that provides asset management
  training)  regarding the development of a university
  based academic and professional training program
  on Asset Management.

 • Three meetings  with representative of the Syracuse
  Program  on the  Analysis and Resolution of
  Conflicts regarding collaborative planning for an
  Environmental Dispute Resolution program.
                                                          REGION 2 EFC AT SYRACUSE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
  Meeting with Syracuse University representative
  regarding the EFC's assistance with Syracuse led post-
  Katrina sustainable rebuilding efforts, particularly at
  Tulane, Loyola, and New Orleans Universities.

  Seven meetings with the EnSPIRE program (Office
  of Environment and Society) at Syracuse
  University/SUNY College of Environmental Science
  and Forestry with the intent to collaborate over cre-
  ation of joint sustainable development programs.
Goal 2: Maintain and foster project-based partner-
ships with various agencies.

Goal 3: Collaborate and build relationships with fac-
ulty and professional staff from various institutions.

Goal 4: Collaborate with other service providers to
further develop the public management and finance
program to meet the needs of primarily rural com-
munities.
  Three meetings with a Central New York American   Goal 5: Expand service throughout EPA Region 2.
  Institute of Architects (AIA) Sustainable Design
  Assessment Team (SDAT) grant program exploratory  Goal 6: Develop and implement new, creative, and
  task force.                                      entrepreneurial approaches to achieve sustainable
                                                 environmental results.
  Meeting with representatives from New York State
  Energy Research and Development Authority's       The following new initiatives began in 2005:
  (NYSERDA) ENERGY STAR® program to discuss
  collaborations.                                   SUSTAINABILITY  PROGRAM
• Meetings with various upstate New York organiza-
  tions to build new collaborative relationships (e.g.,
  DestiNY USA, Syracuse Chamber of Commerce,
  National Grid Corp., Manufacturers Association of
  CNY, Time-Warner, Metropolitan Development
  Association, Upstate Medical University, CNY Small
  Business Technology Development Office, and the
  SUNY College of Environmental Science and
  Forestry).

New Projects &  Initiatives

The central purpose of the EFC continues to be to
enhance the  administrative and financial capacities of
state and local government officials and the nonprofit
and private sectors to respond efficiently and effec-
tively to a demanding set of federal and state envi-
ronmental regulations, mandates and challenges.
Building upon the success of prior program years,
the continuing work of the EFC is now based on
achieving the following six discrete functional goals:

Goal 1: Increase the administrative and long-term
planning capacity of local government officials.
In 2005, the EFC started developing a program on
sustainability. The intent is to offer process facilita-
tion, public outreach, engagement, training, educa-
tion programs, and direct and indirect technical assis-
tance. These activities entail more intensive collabo-
ration with Maxwell School faculty and other institu-
tions and organizations, such as:

• Syracuse Center of Excellence in Environmental
  and Energy Systems

• Maxwell School's Center for Environmental Policy
  and Administration

• Syracuse EnSPIRE  Program (Office on Environment
  and Society)

• Other Syracuse University Departments and
  Schools

• SUNY, College of Environmental Science and
  Forestry

• Environmental Finance Center (EFC) Network
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               ACTIVITIES  & ACCOMPLISHMENTS
• U.S. Green Building Council

• GreeningUSA

• National Grass Roots Recycling Network

• National Recycling Coalition

• New York State Association for Reduction, Reuse,
  and Recycling

• Local economic development agencies

• Local nonprofit organizations

The following target areas represent the EFC's foci.
These also serve as indicators of sustainable devel-
opment (as modified from EPAs National Center for
Environmental Innovation's Environmental
Innovation Portfolio, March 2005):

Promote strategic direction and priorities through:

• Strategic management and planning (e.g., training
  and consultations).

• Innovative and sustainable financing information
  transfer (e.g., "affordability," enterprise accounting,
  public/private partnerships).

• Infrastructure asset management (e.g., training,
  consultations and academic programming for
  water, wastewater, solid waste, fleet operations)

Support superior environmental performance through:
• Leadership development programs.

• Conflict  management and interest-based negotia-
  tion programs and interventions.

Facilitate environmental sustainability with a  focus on:
• Climate change and renewable energy (e.g., "local"
  options such as biofuel).
 • Energy and environmental systems in buildings (in
  cooperation with the Syracuse CoE).

 • Resource use and waste management (waste
  reduction, reuse and recycling, resource recovery
  parks, extended producer responsibility, and other
  sustainable consumption and waste management
  approaches).

 • "Design for the Environment" (e.g., "green" build-
  ings and environmental management systems).

 Promote collaborative partnerships for environmental
protection through:
 • Community-based environmental partnerships.

 • Government-industry partnerships.

 • Intergovernmental partnerships (e.g., facilitation of
  intermunicipal cooperation, network governance,
  and governmental consolidation).

 Encourage sustainable economic development
 through:

 • Targeted geographic solutions (e.g., Brownfield
  development, watershed quality).

 • Establishment of a pragmatic balance between
  economic development and  preservation (includ-
  ing assistance with job creation at the local level).

 Specific new initiatives include:

Adirondack Ecological Center

 Exploring  potential project collaborations in the sus-
 tainable development area for the Adirondack
 Mountain region of New York  State.

American Institute of Architects Sustainable
Design Assessment
 Working with an interdisciplinary group in central
 New York to design a unique program to evaluate
 sustainable indicators in the area.
                                                          REGION 2 EFC AT SYRACUSE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
Department of Energy Industrial Assessment
Program
Collaborating on the next grant application; this
program is housed at Syracuse University.

Environmental NGO Evaluation

Working with Syracuse' Global Affairs Institute
regarding the EFC's potential involvement with a
National Science Foundation project to evaluate
environmental organizations.

FOCUS Greater Syracuse

Working with this sustainable communities grassroots
nonprofit organization to build a sustainable central
New York. This includes hosting a major spring
exhibition, as well as promoting 82 goals related
to environmental stewardship, social equity, and
economic development.

Hurricane Katrina Aftermath

Offering technical assistance to the Red Cross, EPA
Region 4, EFCs in Regions 4 and 6, Habitat for
Humanity, and Syracuse University to help in efforts
to rebuild New Orleans area universities.

Institute for Sustainable Communications
Working with the founder of this organization, who
is also a faculty member at the City University of
New York, on the establishment of a collaborative
program on sustainability that would target the print-
ing and graphics industry.

Major Collaboration on Sustainability
Programming

Working with other key organizations at Syracuse
University to build a cohesive and synergistic pro-
gram on sustainability.

Oswego County Environmental Management
Council
Assisting with program structure.
Program on the Analysis and Resolution of
Conflicts (PARC)
Working with PARC to design an environmental dis-
pute program; this renowned program is housed at
the Maxwell School.

Puerto Rico
Researching environmental problems and opportuni-
ties for collaboration.

Steel Recycling Institute (SRI)
Exploring the opportunity to participate with a
Department of Energy/SRI program related to "cool
metal roofing."

Various Municipalities
Developing potential assistance programs in areas such
as water, wastewater, and inter-municipal cooperation.

SYRACUSE CENTER OF  EXCELLENCE
IN ENVIRONMENTAL AND ENERGY
SYSTEMS  (CoE) PARTNERSHIP
                SYRACUSE CENTER OF EXCELLENCE
                  III ENVIRONMENTAL and ENERGY SYSTEMS
Created in 2002 by New York Governor George E.
Pataki, the Syracuse CoE is a federation of 72 partners,
including industrial firms, businesses, research organi-
zations, local government economic development
agencies, the state and federal government, and a
number of academic institutions. Its intention is to cre-
ate innovations to improve health, productivity, securi-
ty, and sustainability in various environments. Syracuse
University sponsors the CoE, but other academic part-
ners include the SUNY College of Environmental
Science and Forestry, Alfred University, Clarkson
University, Cornell University, the Institute of
Ecosystem Studies, Rensselear Polytechnic Institute,
SUNY Upstate Medical University, SUNY at Albany,
SUNY at Buffalo, the University of Rochester, and the
Upstate Freshwater Institute.
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               ACTIVITIES  &  ACCOMPLISHMENTS
Activities within the Syracuse CoE include research,
product development, and educational programs.
The scope of the CoE has expanded beyond the ini-
tial focus on "built and urban environments." For
instance, challenges facing rural areas and local gov-
ernments are being incorporated into the activities of
the CoE. Another expansion of the original core mis-
sion of the CoE is into the area of renewable and
clean  energy sources, from wind and solar power to
geothermal and fuel cells. In addition, the CoE has
been  charged with making the biofuels industry in
New York one of the strongest in the nation. A key
vision of the CoE is to promote more sustainable
economic development by reducing  energy con-
sumption, decreasing air  and water pollution, and
improving environmental quality.

The EEC enjoys a collaborative relationship with the
CoE. The objective of the collaboration is to utilize
the EEC's and PMFP's strengths—including public
outreach, process facilitation, focus on local govern-
ment  needs, and assistance to rural communities—to
augment the CoE's mission. In addition, this relation-
ship will assist the EEC with its intent to more
aggressively promote sustainable development.

In total, nearly $190 million in private and public
funds have been invested in the CoE. This includes a
New York State commitment of $44 million from
Governor Pataki and more than $96 million in private
and foundation investments. It also includes more
than $30 million in federal resources  secured by
Congressman James Walsh. Collaboration between
the EEC and the CoE will further  maximize the
impact of the existing funds for each organization.

Specific new initiatives include:

Annual Symposiums
Assisting the CoE with design and implementation
of annual symposiums. The first was in October
2005 and focused on indoor air  quality.
Campus Sustainability
Increasingly involved in supporting Syracuse
University, which has made a major commitment to
Sustainability,  including pursuing U.S. Green Building
Council LEED (Leadership in Energy and
Environmental Design) certification for all new major
construction projects (only one of two universities to
make this commitment).

Green Buildings
Assisting the CoE in its green building endeavors and
expecting to play a major role  in the future. The CoE
is taking the lead on promoting green buildings and is
a major affiliate of the U.S. Green Building Council. A
major exhibit at the  U.S. Green Building Council annu-
al convention  in Atlanta served as the kick-off event.

PUBLIC MANAGEMENT  AND FINANCE
PROGRAM  (PMFP)

Specific new initiatives include:

Asset Management
Promoting asset management. This important  initia-
tive began with staff receiving extensive training in
this field and  culminated in a highly successful
workshop hosted by the  EEC  in Syracuse on
advanced asset management (led by EPA). The
Syracuse EEC  is now working on new initiatives in
this area, such as the development of a major univer-
sity-based academic program  on infrastructure and
asset management with the Syracuse Center of
Excellence, L. C. Smith College of Engineering at
Syracuse and  the Maxwell School. One targeted
audience for this new academic based program will
be local officials. In addition, the EEC is exploring
partnerships with other institutions, such as the City
University of New York. The EEC is also preparing a
proposal to the USDA to continue its training  for
local officials  in the field of asset management and
to complete consultations in this field with local
municipalities.
                                                          REGION 2 EFC AT SYRACUSE UNIVERSITY

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             ACTIVITIES  & ACCOMPLISHMENTS
Expansion into New Jersey
Developing activities in New Jersey. This initiative
started with the EFC's proposal for doing work with
the New Jersey Pinelands Commission on a waste
management district project. In addition, the EFC has
been corresponding with Vince Girardy, mayor of
Peapack and Gladstone, who is helping the EFC
establish contacts in the region. This effort has already
resulted in meetings with the  New Jersey State League
of Municipalities, the New Jersey Department  of
Environmental Protection, and the New Jersey
Environmental Infrastructure Financing Program. The
EFC will build on these efforts and continue to identi-
fy potential partners and projects in New Jersey.

International Programs

Helping facilitate the Maxwell  School's international
programs in terms of integrating environmental man-
agement and finance and infrastructure development
components.  The EFC participated in a large RFP to
which Maxwell responded for an Infrastructure
Management  Program with India's Institute for Public
Administration. In addition, the EFC presented to a
large contingent of Chinese municipal officials and
facilitated a meeting by the New York State Department
of Environmental Conservation with that group. The
EFC is currently designing a program on solid waste
management  for a group of Vietnamese officials.

                     Contact
   Mark Lichtenstein, EFC Director
   Phone: (315) 443-5678
   E-mail: malichte@maxwell.syr.edu
Lake Ontario Efforts
Explored potential opportunities with the Inter-
national Lake Ontario—St. Lawrence River Study
and the Lake Ontario Coastal Initiative and continu-
ing to review opportunities for collaboration.

Solid Waste Management

Working with the county of Oswego to help facilitate
public input into a year-long process of evaluating
alternative management models for its integrated
solid waste management  system. This initiative could
include moving toward a public-private partnership,
full privatization, enterprise accounting or some
other management and/or financing model.
                                             ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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PERFORMANCE  MEASURES
    Outcomes
          s a result of the activities and accomplish-
          ments outlined in the previous section, out-
          comes have included the following:
    PRESENTED AND  DISSEMINATED
    INFORMATION EFFECTIVELY TO WIDE
    AUDIENCES

    Not only has the EFC continued to give presentations
    and trainings to large and varied audiences, but the
    EFC has improved its training abilities over time.
    Over the past decade, the EFC recognized that rate-
    setting training delivered in the classroom to groups
    of practitioners does not have long-term value, partic-
    ularly in regard to changes in political administrations
    leading to changes in rate-setting decisions. In addi-
    tion, the nature of classroom training does not always
    account for differences in learning styles, and human
    nature inhibits many individuals in a group setting
    from asking specific  questions related to their circum-
    stances. By working  with communities on an individ-
    ual basis instead, the EFC is not only facilitating
   A TAP presentation

   capacity-building within a community, it is comple-
   menting the broader training provided by other TAPs,
   such as the Rural Water Association, which continues
   to deliver training using classroom methods.

   In addition, post-event evaluations from EFC training
   programs support that training designed around exist-
   ing municipal situations provides more effective learn-
ing. The EFC elicited specific information from partici-
pating communities in advance of events to integrate
"real world" situations  during training. In addition,
participants were afforded significant opportunity to
pose situation-specific  questions to the trainers, which
resulted in extensive follow up after the training.
Community representatives and technical assistance
providers alike highly rate the  PMFP training on a
consistent basis in terms of both format and content.
The training events have continued to expand the
clientele of the EFC, as many community leaders have
requested specific assistance or asked to be put in
contact with partners' technical assistance services.
The trainings are a significant accomplishment, "bridg-
ing the gaps" in terms  of having a means for TAPs
and local governments to interact in a comprehensive
manner, using a variety of methods to promote learn-
ing, networking, and the delivery of solid expertise
relative to environmental improvements. The PMFP
will continue to use highly interactive and participato-
ry methods of delivering all of its components.

ENHANCED PUBLIC UNDERSTANDING OF
CRITICAL  COMMUNITY  ISSUES

The PMFP's public outreach process has developed a
reputation for enhancing the public's understanding of
water and wastewater projects, essential in New York
communities where voter approval is necessary for
debt to be acquired. Roundtables have always resulted
in positive and highly constructive discourse focused
on each project. Public officials frequently glean
insight they previously did not have, and the public
always gets accurate information framed in terms they
can understand. These successes are exemplified by
the numerous requests the Syracuse EFC has received
from other communities to provide facilitation.

EXPANDED REACH OF PROGRAM

While the EFC's PMFP program has historically
focused on New York State, because of its success
and replicability, EFCs located in Kentucky, Maine,
North Carolina, California, and New Mexico collabo-
                                                             REGION 2 EFC AT SYRACUSE UNIVERSITY

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                        ERFORMANCE  MEASURES
rated in late 2004 and submitted proposals to build
upon the PMFP concept in their respective states. In
addition, the Syracuse EFC began to promote the
PMFP in New Jersey in  2005.

In addition, the EFC was asked to present informa-
tion about the PMFP program to a large contingent
of Chinese municipal officials, and is currently
designing a program on solid waste management for
a group of Vietnamese officials.

Finally, the  Syracuse EFC continues to received calls
and other solicitations to perform its services
throughout New York, the base of operations. For
example, municipal leaders who fear voter rejection
for municipal projects continue to call the EFC
requesting outreach and education efforts.
                            V
Impacts
In 2005, the Syracuse EFC continued its mission to
enhance the administrative and financial capacities of
state and local government agencies as well as non-
profit organizations and private entities as they
endeavor to improve environmental quality and
maintain environmental infrastructure. Specific envi-
ronmental issues addressed through the EFC's activi-
ties and accomplishments include:

• Drinking water protection and security

• Wastewater infrastructure

• Aquifer protection

• Sustainable redevelopment/sustainable
  communities

• Climate change and renewable energy

• Resource conservation

• Waste management

• Green buildings

• Indoor air quality
                                               ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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Environmental
Finance Center
rue
        srsrcv

EF@N
environmental finance center network
                Region 3 Environmental Finance Center

                AT THE UNIVERSITY OF MARYLAND

                  In This Report


                  Background & Summary	42

                  Activities & Accomplishments	43

                  Performance Measures	50

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                                           BACKGROUND  &  SUMMARY
           With support from the U.S. Environmental
           Protection Agency (EPA), the
           Environmental Finance Center (EEC) at
the University of Maryland was created to assist the
six communities of EPAs Region 3 (Pennsylvania,
Delaware, Maryland, Washington, D.C., Virginia, and
West Virginia) in identifying innovative and equitable
means of paying for environmental projects. The
center promotes ways to manage the cost of environ-
mental activities through technical assistance, training
and curriculum development, and outreach activities
such as workshops, charrettes, and conferences.

To help communities and local governments partici-
pate  in effective and responsible environmental man-
agement on a watershed scale, the Maryland EEC
works to develop and deliver useful, innovative tech-
nical assistance and training for financing environ-
mental protection and restoration. To advance this
goal  in 2005, the EEC focused on the following key
objectives:

• Delivering training and information on watershed-
  based financing.

• Investigating new and innovative uses of funding
  sources and emerging markets.
                                                 REGION 3
Assisting communities and local governments with
capacity development.

Developing efficient and effective outreach and
education tools to deliver information about inno-
vative and sustainable environmental finance
approaches.

Working with key partners, such as the
Chesapeake Bay Program and the University of
Maryland Institute for Governmental Service.
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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed and Ongoing Projects

& Initiatives

   In its ongoing work with local decision-makers
   about the benefits of sound environmental man-
   agement, the Maryland EFC continues to provide
general technical assistance to local governments,
land trusts, homeowners associations, and others
interested in finding new and innovative ways to pay
for environmental restoration and protection activi-
ties in their watersheds. In addition to responding to
needs and requests for assistance, the EFC has par-
ticipated in several watershed financing initiatives, as
follows:

THE  SUSTAINABLE FINANCING
INITIATIVE
In 2005, the EFC expanded its watershed financing
programs with the development of the Sustainable
Financing Initiative. Funded by a grant from the EPA
Sustainable Finance Team.  The  goal of this initiative
is to provide communities with the tools they need
to effectively finance  and implement watershed pro-
tection plans. The EFC held three workshops, and
planned one more, throughout  Region 3 focused on
helping communities overcome barriers to imple-
menting their watershed plans:

1. Financing Open Space Protection: Talbot
  County, Maryland - June 22, 2005
   The first workshop in the  series took the form of
   roundtable discussion with a panel of regional
   financing and resource experts and representatives
   from the Talbot County government and agricul-
   tural community. The goal of the event was to
   develop a sustainable financing strategy for financ-
   ing and implementing its Countryside Preservation
   Area Program to protect more than 11,000 acres
   around the county's four incorporated towns.

   After conducting the full-day workshop, the
   Maryland EFC prepared a follow-up report
 In 2005, the Maryland EFC...

 4 Held 12 charrettes, workshops, and trainings.
 4 Plan to conduct 26 additional trainings.
 + Drew more than 100 participants to its
    charrettes.
   (see )
   that outlines in detail the recommended financ-
   ing strategy for county officials. In this report,
   the EFC suggested that effective implementation
   of the Countryside Preservation Area Program
   would require an open dialogue with municipal
   officials from the county's four incorporated
   towns and offered to facilitate a workshop to
   engage the municipal officials while presenting
   the results from this project. The EFC is currently
   awaiting word from the Talbot County Council as
   to when to schedule this next step.

2. Sustainable Watershed Financing in
  Pennsylvania: State College, Pennsylvania -
  October 5, 2005

   The second workshop in this series was held at
   the Fifth Annual Conservation District Watershed
   Specialists Meeting in coordination with the
   Pennsylvania Department of Environmental
   Protection. The Maryland EFC conducted a full-
   day watershed financing workshop for more than
   100 state watershed specialists. Presentations
   focused on three core areas: 1) developing
   financing strategies, 2) financing stormwater man-
   agement, and 3) coordinating financing with
   watershed organizations. Guest presenters included
   the URS Corporation, the Center for Watershed
   Protection, and the Region 10 EFC at Boise State
   University. All attendees received a binder con-
   taining additional resources and reference materials,
   as well as a copy of the EFC at Boise State's
   Plan2Fund software program for use with their
   local watershed organizations.
                                                  REGION 3 EFC AT THE UNIVERSITY OF MARYLAND

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             ACTIVITIES  &  ACCOMPLISHMENTS
3. Financing Land Preservation in the Cacapon
  and Lost River Watershed: Berkeley Springs, West
  Virginia - November 2, 2005
   On June  27, 2005, the Maryland EFC held an ini-
   tial meeting with the executive director of the
   Cacapon  and Lost River Land Trust and a handful
   of land protection experts familiar with the region
   and the work of this trust. The trust has been
   successful in protecting farmland in the water-
   shed, primarily through donated easements, but is
   now faced with the challenge of developing a
   long-range  financial strategy for purchasing ease-
   ments to  protect a particularly critical section of
   land in the  watershed.  The  trust determined that
   an EFC facilitated financing charrette would be an
   effective tool  in the problem-solving process and
   ultimately served as the steering committee for
   the event, holding a series of planning meetings
   throughout  summer 2005.

   On November 2, 2005, the  EFC conducted the
   financing charrette for  the trust at Cacapon Resort
   State Park in  Berkeley  Springs, West Virginia. A
   panel of  land preservation  and financing experts
   from around  the region joined members of the
   Cacapon and Lost River Land Trust to  develop a
   sustainable financing strategy for acquiring land
   that  would  link the currently protected
   Hampshire  County Conservation Hub to the
   George Washington National Forest as well as to
   the Short Mountain Wildlife Management Area.

   The  EFC  is  presently assembling data and con-
   ducting additional research on the programs and
   suggestions discussed in the charrette. This infor-
   mation will be included in  a final report to the
   trust outlining, in detail, the recommended land
   protection financing strategy. An additional
   follow-up meeting is anticipated for the formal
   presentation to  the trust of the recommendations
   in this final report. To see the results of this and
   other charrettes, visit 
4. Financing Land Protection on Virginia's
  Northern Neck
   A final workshop is planned for Virginia's
   Northern Neck. The EFC has been coordinating
   with the newly formed Northern Neck Land
   Conservancy to conduct a workshop to develop a
   financing strategy to help the conservancy man-
   age the increasing growth that currently threatens
   the region's natural and cultural resources.

   The EFC conducted two charrette planning meet-
   ings with representatives of the  Northern Neck
   Land Conservancy's board of directors and antici-
   pates holding at least one more planning meet-
   ing prior to facilitating a full-day financing char-
   rette on preserving natural and  cultural resources
   in the region. The recommendations of the
   resource protection and financing experts in
   attendance will be compiled into a comprehen-
   sive strategy document for the Northern Neck
   Land Conservancy.

ADDITIONAL TRAINING
The EFC continues to conduct training sessions and
workshops targeting elected officials, utility opera-
tors, engineers, and others interested in the concepts
and technicalities of properly managing and sustain-
ing utility systems. During the past year, the EFC
training manager has conducted training sessions at
six locations on a variety of topics:
                                              ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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               ACTIVITIES  &  ACCOMPLISHMENTS
• At the National Environmental Services Center
  Annual Training Institute: Local Officials'
  Responsibilities, Budgeting from Scratch, and
  Financial Management Basics

• At the request of the Virginia Rural Water
  Association: Utility Rates and Cost Recovery

• At the request of the Delaware Rural Water
  Association: Capital Improvements Planning

• At the request of the Delaware Office of Drinking
  Water: Capital Improvements Planning

• At the joint request of the Delaware Office of
  Southeast Rural Community Assistance Partnership
  (RCAP) and the Delaware Rural Water Association:
  Capital Improvements Planning and Asset
  Management

• At the request of the American Water Works
  Association (AWWA) annual Distribution System
  Symposium conference planning committee: Rates
  and Cost Recovery for Small Systems and Asset
  Management for Small Systems

The EFC expects to  conduct 26 additional training
sessions across the region. These sessions will be
offered in partnership  with organizations such as:

• The Rural Water Associations of the states of
  Delaware, Maryland, Pennsylvania, West Virginia,
  and Virginia.

• The Environmental Training Centers in Delaware
  and Maryland.

• The Small Public Water Systems Technical Assistance
  Center (SPWSTAC) at Penn State-Harrisburg.

• Maryland Rural Development Corporation (MRDC).

• Southeast Rural Community Assistance Partnership
  (SERCAP serving Delaware).
• RCAP Solutions (formerly Northeastern RCAP, serv-
  ing Pennsylvania).

• Great Lakes RCAP (serving West Virginia).

• The Maryland Municipal League and the Academy
  for Excellence in Local Government.

• The National Environmental Services Center
  (NESC) at West Virginia University (WVU)

CHESAPEAKE BAY FINANCING
AUTHORITY

With support from EPA and the Maryland Sea Grant
College, the Maryland EFC played a key role in
staffing the Chesapeake Bay Watershed Blue Ribbon
Finance Panel. The EFC and the Sea Grant College
helped support the early planning and formation of
the panel, especially in gathering and synthesizing
background and analytical materials. Although the
panel concluded its work in October 2004, important
follow-up activities continued though 2005, including
distributing the report, presenting to stakeholder
audiences, and helping to plan for implementation.

The EFC continues to distribute both the final report
and a CD created by the Chesapeake Bay Program
(the EFC helped provide digitized information for the
CD) to  a broad range of stakeholders, from citizens
to graduate-level university classes. The EFC's staff
also distributed a white paper on  models for various
types of financing authorities.
                                                  REGION 3 EFC AT THE UNIVERSITY OF MARYLAND

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             ACTIVITIES  &  ACCOMPLISHMENTS
Of particular importance was the EFC's ongoing par-
ticipation in last year's planning efforts for devising an
implementation plan for a Chesapeake Bay Financing
Authority. The EFC, in partnership with the
Chesapeake Bay Program Office, staffed and managed
the committee charged with developing a framework
for this new authority. The idea for the authority was
a cornerstone of the work of the Blue Ribbon Panel,
and this new committee was charged with providing
the Chesapeake Executive Council with a proposal for
how the authority should be structured, funded, and
implemented. The goal  of the committee was to iden-
tify and make recommendations on a structure for
developing the regional financing authority to fund
Chesapeake Bay restoration efforts.

Working in partnership with the Institute for
Governmental Service, the EFC managed the  staffing
effort, including coordinating, facilitating, and imple-
menting three committee meetings. Most importantly,
the EFC provided the committee with analysis and
technical assistance on  issues related to fiscal, legal,
political, and administrative barriers to implementing
a financing authority. Finally, the EFC was responsi-
ble for writing and producing the final proposal  doc-
ument. A white paper report (see ) was delivered
to the Principals' Staff Committee on July 1, 2005.

INTER-AGENCY  TECHNICAL ASSISTANCE
COMMITTEE  FOR WASTEWATER SYSTEMS
IN MARYLAND

The EFC continued its participation and leadership
with the Inter-Agency Technical Assistance
Committee for Wastewater Systems in Maryland
(ITAC). In 2005,  ITAC embarked  on the second phase
of its duties following the submission of its first
report to the governor and legislature in December
2004. As part of its continuing work to provide spe-
cific recommendations and technical assistance to
waste water systems throughout Maryland, ITAC
formed the Financial Management Practices
Subcommittee and instructed the committee to form
recommendations for improving the Maryland
systems' management practices, as well as specific
training programs and products to enhance financial
management proficiencies. The subcommittee is
charged with formulating recommendations on how
to improve planning practices among Maryland's
small systems and how to encourage and ensure the
inclusion of small system plans and needs in the sur-
rounding county's comprehensive utility plans.

The EFC's training and education manager was
named chair of the Financial Management Practices
Subcommittee. The subcommittee identified the need
for a streamlined, statewide application review for
systems applying for financial assistance from the
various state programs and called upon the Maryland
EFC for assistance.  ITAC delivered a final report to
the Maryland Legislature in September 2005.

In addition, a memorandum of understanding has
been approved by the subcommittee outlining a
pledge by the Maryland Department of the
Environment, U.S. Department of Agriculture/Rural
Utilities Service,  and Maryland Department of
Housing and Community Development to consult
with each other  and meet at least once per year to
review applications  and direct funding to the most
needed recipients. If approved and implemented,
such a joint effort will be a first for the state. In addi-
tion, the subcommittee is considering other measures,
such as establishing a training requirement for non-
technical system personnel (managers and governing
board members) and specific training programs to
address management and finance deficiencies that
have been identified in the course of the committee's
ongoing activities.
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               ACTIVITIES  &  ACCOMPLISHMENTS
New Projects & Initiatives

STORMWATER FINANCING INITIATIVE
      Financing stormwater management is one of
      the most pressing issues facing communities
      throughout the region and the country. The
cost of meeting federal and state stormwater permit-
ting programs is an extraordinary fiscal burden on
many communities. Often complicating efforts to
finance large-scale stormwater management projects
is the lack of local financial and fiscal capacity. The
first step in financing extensive stormwater manage-
ment efforts is understanding a community's capacity
to plan, finance, manage, and implement complex
programs. The Stormwater Financing Initiative will
provide communities with a tool to gauge their
capacity to implement these projects.

The EFC's goal is to convene a team of experts to
help local officials develop a framework for financ-
ing extensive stormwater management programs as
part of the state permitting processes. As part of an
intensive two- to three-day financing charrette, the
team will work with local officials to identify key
community strengths and weaknesses related to fis-
cal, political, and institutional capacity. The team will
focus on issues such as financial management, devel-
oping local ordinances, and organizational and insti-
tutional capacity.

The following core outputs have been achieved:

• The EFC developed the basic program objectives
  and structure and began discussions with necessary
  stakeholder groups. As part of that effort, the EFC
  conducted and/or participated in three community
  outreach events to explain the new program and
  offered the service to interested participants.

• The EFC held several meetings with officials from the
  Pennsylvania Department of Environmental Protect-
  ion (DEP). The DEP is a strong supporter of the pro-
  ject and has offered technical assistance and support.
• The EFC developed a core implementation team
  that includes technical consultants and outreach
  organizations, including the Center for Watershed
  Protection.

As a result of initial meetings with the Pennsylvania
DEP, the EFC identified two pilot watersheds for this
project: the Piney Creek watershed outside Pittsburgh
and the Upper Darby watershed outside Philadelphia.

FINANCING  LAND PROTECTION  IN
VIRGINIA'S  SHENANDOAH VALLEY
The Shenandoah Resource Conservation and
Development Council invited the Maryland EFC to
participate in initial regional discussions on how to
approach land preservation, direct growth, and
improve water quality around the Shenandoah River.
Seven Virginia counties were represented at the
November 16 meeting and all were interested in the
concept of an EEC-facilitated financing charrette to
examine the range of issues as well as develop sus-
tainable, long-term financing and implementation
strategies for protecting water resources in the region.

The EFC participated in the initial meeting and a
series of additional planning meetings to determine
the most effective method of engagement.

SCHUYLKILL RIVER AND DELAWARE
RIVER FINANCING PROJECTS

The EFC was contacted by the Schuylkill Action
Network (SAN) and the Partnership for the Delaware
Estuary (PDF) to provide assistance in developing a
                                                  REGION 3 EFC AT THE UNIVERSITY OF MARYLAND

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             ACTIVITIES  &  ACCOMPLISHMENTS
feasibility study for a regional financing authority to
fund strategic projects throughout the Schuylkill and
Delaware River watersheds. The EFC has agreed to
assist SAN and PDE in developing a strategic approach
to identifying watershed protection and restoration
costs, community fiscal capacity, and strategies for pro-
tecting the two watersheds and anticipates ongoing
work on this project throughout the next fiscal year.

The EFC participated in several steering committee
meetings and submitted a proposed implementation
strategy to SAN and PDE  officials.

CHESAPEAKE NONPOINT EDUCATION
FOR MUNICIPAL OFFICIALS  (NEMO)
INITIATIVE
The EFC agreed to participate in the new Chesapeake
Bay NEMO project, which will provide technical assis-
tance and outreach support to coastal communities
throughout Maryland and Virginia. The goal of this ini-
tiative is to coordinate activities of a network of techni-
cal service organizations and agencies to protect
coastal environments and communities. The Maryland
EFC has offered to lead the efforts to provide financing
and capacity development services. The  first NEMO
meeting was held on June 24, 2005, with subsequent
meetings scheduled for the upcoming calendar year.
Targeted focus areas include Maryland and Virginia
communities along the Delmarva Peninsula.

EPA SOURCE WATER COLLABORATIVE
The Maryland EFC, in partnership with leaders from
other EFCs around the country, has  been participat-
ing in a new EPA-led effort to facilitate source water
protection efforts across the country. The work of
this coalition of organizations is focused on the
source—the lakes, streams, rivers, and aquifers
tapped for drinking water and the land needed to
protect and recharge those bodies of water. The
Source Water Collaborative brings together a broad
set of constituencies and competencies to work on a
single issue—protecting the sources of drinking
water. Working together, the collaborative has the
credibility, reach, and expertise to speak and act with
authority, an impact no single member can achieve.
The coalition will develop useful recommendations
about what is needed to protect sources of drinking
water. In addition, the coalition will share—through
regular communication and during quarterly meet-
ing—information about best practices in source
water protection and the people who make land use
decisions, both in community planning and in stew-
ardship practices.

C &  O CANAL STEWARDSHIP TASK
FORCE

The EFC director was contacted by the staff of
Maryland Congressman Chris Van Hollen, who
sought assistance for facilitating and directing a task
force dealing with forest stewardship issues along the
Chesapeake & Ohio (C&O) Canal National Historic
Park. The goal of the task force was to provide rec-
ommendations for more effective local, state, and
federal stewardship of public and private lands along
the park's boundaries. The EFC facilitated monthly
task force meetings and provided technical  assistance
for the activities of the task force.

FINANCIAL MANAGEMENT TRAINING
INITIATIVE
The EFC has become  a regional leader in developing
and implementing small system utility training pro-
grams. The EEC's work focuses on providing in-
depth training on issues related to financial and asset
management,  capacity development, and revenue
and rate-setting. Throughout the next fiscal  year, the
EFC will continue to expand its systems training and
outreach efforts.

The EFC has recently begun the Financial Management
Training Initiative in partnership with the Institute for
Governmental Service (IGS). The aim of this  initiative
is to create a comprehensive training program for sys-
tem operators  at all levels of expertise, capacity, and
experience that will utilize Web-based technologies,
training manuals, and onsite programs. The EFC train-
ing manager recently convened a steering committee
comprised of state, local, and organizational training
experts that will work with the EFC and IGS to identify
issues and resources essential to local systems.
                                             ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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               ACTIVITIES  &  ACCOMPLISHMENTS
The initiative will develop training tools on issues
essential to effectively managing wastewater and
drinking water utilities. The first product will be a
comprehensive Web-based search tool that will assist
communities in finding training tools and programs
from around the country. In addition, the Web site
will include online training programs, white papers,
and training resources. The second product will be a
comprehensive training manual that will serve as a
utility system's "textbook" for systems operators. The
textbook will  address issues such as:

• Drinking Water System Capacity—Technical,
  Managerial, and Financial

• Analyzing Financial Capacity

• Revenues and Rate Setting

• Calculating  General Overhead

• Minimum Reserve Levels

• Government Finance Officers Association recom-
  mended practices

• Budgeting and Planning

• Accounting and Bookkeeping

• Master Business Planning

• Capital Improvement Planning

• Integrated Asset Management

• Asset Management and Compliance—GASB 34

• Legal, Financial and Administrative Responsibilities

• Overview of regulations and compliance issues

The EFC's  goal is to develop an implementation
strategy and template for both the Web site and the
guidebook during the upcoming fiscal year.
COMMUNITY VISIONING

Maryland's Eastern Shore is under strong development
pressure as a result of an increasing population. The
Eastern Shore has become a popular place to live
because of its proximity to major cities and surround-
ing suburbs, recreational opportunities, low cost of
living, and low crime rate. Small municipalities on the
Eastern Shore are struggling to cope with the
onslaught of growth with limited, or sometimes non-
existent, staff. These communities typically have insuf-
ficient financial resources and often outdated zoning
ordinances. Many are looking for ways to turn this
growth into sustainable community development.

The EFC has developed a partnership with
Washington College in Chestertown, Maryland, as
part of its  community visioning initiative. As part of
this relationship, the EFC is serving on a steering
committee, which provides guidance on issues relat-
ed to implementing and financing environmental ini-
tiatives. In addition, the EFC is working with pro-
gram partners to develop implementation and fol-
low-up resources for communities that participate in
the visioning process.

The partnership began its first community pilot in
Talbot County, Maryland.  The program is focusing on
the community's agricultural industry and ways to
protect farming economies and agricultural lands in
the face of increasing development pressure.
Through a series of forums and workshops, the part-
nership is providing community officials with the
resources they need to make more informed decisions
related to the future of agriculture in the region.  This
program is building on recent work conducted by
EFC in Talbot County,  which has focused on the
county government's ability to protect and preserve
critical open space and farmland.

                     Contact
   Dan Nees, EFC Director
   Phone: (301) 403-4610 ext. 25
   Cell:  (301) 466-9964
   E-mail: dannees@earthlink.net
                                                   REGION 3 EFC AT THE UNIVERSITY OF MARYLAND

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                                              PERFORMANCE  MEASURES
Outcomes
      s a result of the activities and accomplishments
      outlined in the previous section, outcomes
      have included or will include the following:
SERVICES PROVIDE BASIS OF
MUNICIPAL STRATEGIES

The workshop/charrette process and the final recom-
mendation reports from the series of four meetings
regarding sustainable financing will serve as the foun-
dation for sustainable financing strategies to be institut-
ed by county officials, watershed specialists, and trusts.
With the continued success, this model could serve as
a national example of effective land preservation.

In addition,  as a result of the EFC's capacity develop-
ment and training program, communities across the
region have had access to training that will enhance
their knowledge and commitment to responsible and
effective utility management practices, including
planning, budgeting, and rate-setting. The result will
be better and more effective fiscal management in
small communities throughout the region.

The recommendations developed in the regional
financing charrette will provide local elected officials,
resource protection agencies, and watershed organi-
zations with a template for effective coordination for
financing natural resource protection efforts in the
Shenandoah region.

WORKSHOP EFFECT GROWS
EXPONENTIALLY

Many participants in the sustainable financing work-
shop mentioned their intention to share what they had
learned with other local officials, watershed organiza-
tions, and trusts. In addition, several watershed special-
ists from various regions of the state requested the
EFC's participation in stormwater management efforts
in their communities. The EFC is currently involved in
intense follow-up activities in these communities.
EFC PROVIDES BASIS OF  INFLUENCE
ON KEY  ISSUES
The recommendations of the C&O Canal task force
will be used to influence local, state, and federal
efforts to protect this significant regional natural
resource. Task force recommendations will play a
significant role in strengthening local land use and
forest stewardship regulations and could provide a
national example of effective inter-jurisdictional  coor-
dination of land protection efforts.

ROLE As REGIONAL TRAINING LEADER
EXPANDS
As a result of the EFC's capacity development and
training program, communities across the region will
have access to coordinated, effective training tools
that will leverage a variety of training and technical
assistance resources. This outcome should lead to
better-coordinated, more effective  training programs,
intended to produce more effective fiscal manage-
ment in small communities throughout the region.
Impacts
In 2005, the Maryland EFC continued its mission to
help communities identify innovative ways to pay for
environmental projects and promote ways to manage
the cost of environmental activities. Specific environ-
mental issues addressed through the EFC's activities
and accomplishments include:
• Watershed restoration and protection

• Source water protection

• Open space protection

• Land preservation

• Forest stewardship

• Natural and cultural resource protection

• Wastewater and stormwater management

• Chesapeake Bay restoration
                                            ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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UNC
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              Region 4 Environmental Finance Center
              AT THE UNIVERSITY OF NORTH CAROLINA AT
              CHAPEL HILL
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                In This Report

                Background & Summary	52

                Activities & Accomplishments	53

                Performance Measures..                       ...60

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                                            BACKGROUND  &  SUMMARY
       The Environmental Finance Center at the
       University of North Carolina at Chapel Hill
       (known as the UNC EFC) works with local
communities and government agencies throughout
the eight states of the U.S. Environmental Protection
Agency's (EPA's) Region 4 (Kentucky, Tennessee,
North Carolina, South Carolina, Georgia, Alabama,
Mississippi, and Florida). Its purpose is to address
environmental management challenges by develop-
ing innovative financial management and environ-
mental policy strategies  and systems. The UNC EFC
assists communities by "providing a bridge between
students and faculty in the university who work prin-
cipally on environmental financing, management,
and planning tools, and the governments and busi-
nesses whose job  it is to use those tools for the pub-
lic interest." It receives its core support from EPA and
University of North Carolina at Chapel Hill.

The UNC EFC is one of a network of university-
based centers that concentrates on problems in
financing of environmental services.  It was created in
1998 as a joint venture between the Institute of
Government and the Office of Economic
Development, both at UNC-Chapel Hill, and is one
of two EFCs in Region 4. Faculty and students work-
ing with the UNC  EFC concentrate on helping
improve the financing and delivery of environmental
goods and services by local governments.

In 2005, the UNC EFC focused its attention on pro-
viding training, workshops, presentations, and other
forms of technical assistance to groups,  such as small
water utilities, and 14 individual communities. The
EFC focused heavily on  building the capacity of
training providers  throughout the region and thus
worked collaboratively with many other organiza-
tions, particularly with the states  of Florida, Georgia,
Mississippi, and North Carolina. Its conference pre-
                                                  REGION 4
sentations focused on capital finance strategies;
wastewater, storm water, and agriculture issues;
fundraising and collaboration; easement and contract
language; and disadvantaged communities. The EFC
also spoke to various audiences on such matters as
working with local governments on source water
protection projects and how to communicate infor-
mation about rates.

In its work with the individual communities, the
UNC EFC worked towards improving a failing water
system, expanding a sewer system, selecting a new
consultant for a rate study, examining elements of
financial policies, evaluating landfill franchise issues
and landfill fees, proposing new ideas for a failing
septic system, developing a business plan, and start-
ing a regional water and sewer initiative.

The EFC also devised various other related activities
during the year, such as designing a new course on
the management and funding of local government
storm water program, carrying out a survey of water
and sewer rates in North Carolina, working to
improve water  operator retention in  North Carolina
and Georgia, printing a series of financial resource
materials, and drafting and reviewing comments on a
model stormwater ordinance for North Carolina.
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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed Projects &  Initiatives

FINANCIAL MANAGEMENT GUIDE AND
BOARD TRAININGS:
The Mississippi-based Southeast Regional Small
Public Water Systems Technical Assistance Center
(SETAC) awarded funding to the UNC EFC to provide
financial planning assistance to small water utilities.
As part of that effort, the EFC developed a detailed
water utility financial management guide that targets
individuals that sit on governing boards responsible
for drinking water service. The guide focuses on the
legal and financial obligations and expectations
assigned to these boards under U.S. and North
Carolina law (many financial management and rate-
setting responsibilities are based on state law) and
serves as the basis for statewide board trainings that
provide financial planning assistance to small water
utilities in North Carolina with funds from SETAC.
Over the year, the EFC completed three five-hour,
individualized board trainings for the following com-
munities in North Carolina:

• Gibson and Wagram, January 18, 2005

• Handy Sanitary District, February 9, 2005

• Pine Knoll Shores, February 23, 2005
• Davidson Water, Inc., March 11, 2005

• Woodfin Sanitary District, March 28, 2005

• Navassa, April 21, 2005

The UNC EFC also finalized and printed a series of
financial resource materials, including a detailed
water utility financial management guidebook,
Financial Leadership for Water Utility Boards. The
guidebook was designed for use in workshops
attended by individuals that sit on governing boards
responsible for drinking water service. To access the
guidebook and other materials, visit
.

STORMWATER ORDINANCE:

The North Carolina Division of Water Quality
retained the UNC EFC  to help develop the state's
model stormwater ordinance.  In 2005, the  UNC EFC
finished drafting and reviewing comments on the
model stormwater ordinance.  Local governments in
the state will use the final version of the model ordi-
nance to develop a post-construction program that
best fits their long-term growth and fiscal needs and
that complies with the requirements of Phase II
stormwater regulations. For more information on the
model stormwater ordinance,  visit
.
                                            REGION 4 EFC AT THE UNIVERSITY OF NORTH CAROLINA
                                                                                            -

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             ACTIVITIES  &  ACCOMPLISHMENTS
 WEB SITE AND PUBLICATIONS:

 The UNC EFC has several key publications available
 on its Web site:

 •  The Painful Art of Setting Water and Sewer Rates,
   an article by Jeff Hughes (downloaded more than
   600 times)

 •  Phase II Stormwater Model Ordinance for NC
   (downloaded more than 475 times)

 •  Water and Sewer Needs and Capital Finance
   Strategies in Appalachia (downloaded more
   than 300 times)

 Other publications available from the UNC EFC include:

 •  Comparison of Drinking Water State Revolving Fund
   (DWSRF) Programs and Other Federal Assistance to
   Disadvantaged Communities in EPA Region 4

 •  One Person's Trash is Another's Treasure: What
   Landfill Capacity Statistics Mean to Different Levels
   of Government
In 2005,  the UNC EFC...

+  Delivered 50 presentations, trainings, and
   facilitated discussions in many states.
+  Distributed about 200 hard copies of the
   Financial Management Guide and Board
   Trainings to local governments.
+  Made key documents accessible on its Web
   site that were  downloaded in excess of
   600 times.
+  Attracted 425 members  to listservs for
   local water managers and operators creat-
   ed in June 2005.
+  Provided direct technical assistance to at
   least 14 communities in the  states of
   Florida, Georgia, and North  Carolina.
• Defining Affordability: Targeting Federal Funds to
  Improve Water Quality to "Disadvantaged
  Communities" in North Carolina

• Examination of the Relationships Between Public
  Funding for Water and Sewer Infrastructure and
  Indicators of Need in the Appalachian Region

• Multi-level Financial Analysis of Residential Water
  and Wastewater Rates and Rate-Setting Practices in
  North Carolina


Ongoing Projects &  Initiatives

COLLABORATIVE ACTIVITIES

The UNC EFC focuses heavily on building the capac-
ity of training providers throughout Region 4. As a
result, most of the EEC's work is done in partnership
with other organizations, particularly in Florida,
Georgia, Mississippi, and North Carolina. In 2005, the
UNC EFC collaborated with approximately 15 other
organizations. These partner organizations are listed
throughout this report where the specific project is
described. The following two examples are 2005 col-
laboration efforts within the Environmental Finance
Center Network itself:

Maine Asset Management Course

The UNC EFC helped the New England EFC run an
asset management workshop for a group of Maine util-
ities. The workshop provided these utilities with a
forum to share asset management information, prac-
tices, and views, and served to identify the most press-
ing financial, legal, and political  obstacles to imple-
menting advanced asset management techniques.

Rate-Setting Training for Southeast Rural
Communities Assistance Partnership (SE RCAP):

The UNC EFC and the MD EFC held a rate-setting
training workshop for staff and two Florida commu-
nities in Gainesville during the  month of June.
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              ACTIVITIES  &  ACCOMPLISHMENTS
PRESENTATION, CONFERENCES AND
MEETINGS

Capital Finance Strategies for Water
and Wastewater Utilities

This course took place at the UNC School of
Government in January. It was designed to provide
approximately 30 utility practitioners with new skills
and up-to-date information on capital finance plan-
ning strategies and funding resources. Courses
included:

• New Trends and Development in Capital Finance
  and Budgeting

• Case Studies of Successful Capital Financial
  Planning

• Capital Planning  Techniques and Tools

• Update on Available Finance Sources

• Techniques for Including Capital Costs in Rates and
  Fees

Water and Wastewater Capital Planning for
Budgeting Staff
In January, the UNC EFC presented a session during a
UNC School of Government/Capital Budgeting Course
for finance directors, budget directors, and manage-
ment on water and waste water finance issues.
Water Resources for Local Government Officials

In February, the UNC EFC presented an overview
session during another UNC School of Government
course for municipal and county officials on water,
wastewater, and stormwater.

Regional Water and Sewer Initiatives Workshop

During the Annual North Carolina City and County
Managers Conference, the UNC EFC organized and
presented at a four-hour intensive workshop on
water and wastewater issues.

Basic Training for New Soil and Water Supervisors

In February, the UNC EFC assisted in  course prepara-
tion and gave an oral presentation on water and
agriculture issues as part of this conference.

Water 2030 Advisory Committee

Throughout the year, the center has served on the
general advisory committee to the Water 2030
statewide water planning effort. This committee
works to  assess water and sewer needs in the state
of North Carolina. The center also served on a spe-
cific task  force to strengthen the operation of North
Carolina water and sewer facilities and to develop a
work plan of capacity building tasks.

Stormwater Model Ordinance Stakeholders

The EFC held a discussion to solicit input on a draft
model stormwater ordinance that the  center had
prepared.

Stormwater Western Council of Governments
meeting

At a meeting in Asheville, North Carolina, the EFC
met with  stakeholders from western North Carolina
on stormwater concerns.

Mountain Land Trust Joint Fundraising

The EFC traveled to Asheville, North Carolina to facili-
tate a discussion of models for joint fundraising and
collaboration among North Carolina mountain land
trusts in January.
                                           REGION 4 EFC AT THE UNIVERSITY OF NORTH CAROLINA

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             ACTIVITIES  &  ACCOMPLISHMENTS
Conservation Reserve Enhancement Program
(CREP) Forestry Management Working Group
EFC staff advised stakeholders on easement and con-
tract language to resolve disputes centering on the
use of Clean Water Management Trust Fund money
for CREP easements.
Land Trust Assembly

The EFC made a presentation at a land trust summit
in Guilford County, North Carolina, and facilitated a
discussion for about 110 attendees on joint fundrais-
ing and other collaborative efforts of 23 North
Carolina land trusts.
Perquimans County, North Carolina Water System   North Carolina Water Operators Board
The EFC participated in detailed discussions about
options for developing a water system large enough
to accommodate a new subdivision in this county.

North Carolina Disadvantaged Community
Program

The UNC EFC met with the North Carolina State
Revolving Fund (SRF) coordinator to present informa-
tion on disadvantaged community programs in other
states in an effort to encourage the state to establish a
disadvantaged community program. UNC EFC prepared
an inventory of other programs in other Region 4 states
and a cash flow model. For more information, see
.

North Carolina Environmental Cleanup Liability
Reform Stakeholder Meeting

In January, the UNC EFC met with stakeholders to
review draft legislation, refine legislation, and pro-
duce a bill that addressed consistency issues in envi-
ronmental cleanup liability programs. For innocent
landowners and prospective purchasers, the bill
would make defenses to environmental cleanup
liability  consistent across all cleanup programs.

North Carolina Department of Environment and
Natural Resources (NCDENR) Collection System
Permit Capital Improvements Planning (CIP)
Trainings
In April, in Raleigh, North Carolina, the UNC EFC pre-
sented two CIP trainings for NC DENR. Twenty partici-
pants attended the session, each representing commu-
nities applying for collection system permits. (New
North Carolina law requires these communities to
complete a CIP in order to obtain a permit.)
Jeff Hughes, director of the UNC EFC, has been serving
on the North Carolina Water Operators Board and pro-
viding the board with guidance on water operator certi-
fication issues. The board's objective is to ensure that
North Carolina facilities have qualified water operators.

Economic Subcommittee of the Environmentally
Superior Hog Waste Technology Determination
Advisory Committee

Richard Whisnant, senior advisor to the UNC EFC,
became the chair of this committee. In this capacity,
he continued to facilitate economic feasibility advice
to the designee who had to decide what, if any, bet-
ter hog waste technology should be used in North
Carolina.

Protecting Your Drinking Water at Its Source

The EFC  co-sponsored this  drinking water workshop
in Greensboro, North Carolina. EFC Director Jeff
Hughes led a session on strategies and tips for
organizations interested in working on source water
protection projects with local governments.

North Carolina Section of the American Water
Works Association and the Water Environment
Association (AWWA/WEA) Customer Service
Seminar

The EFC delivered a presentation in Wilmington, North
Carolina,  on how to communicate information about
rates to clients at a workshop teaching utility managers
and customer service professionals new ways to
address the challenges in dealing with customers.
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               ACTIVITIES  &  ACCOMPLISHMENTS
Resource Enhancement, North Carolina Division of
Marine Fisheries
The EFC assisted the North Carolina Division of
Marine Fisheries by exploring the financial aspects of
a Senate Bill on recycling oyster shells. The EFC
delivered a memo to the division examining the cost
of recycling oyster shells from large private compa-
nies in North Carolina.

Environmental Financial Advisory Board (EFAB)
In August, the UNC EFC participated in the summer
EFAB meeting in San Francisco, California.

EPA Drinking Water Capacity Development
Workshop 2005
This workshop, held in Atlanta at the end of summer,
involved Regions 1, 2, 3, and 4. More than 70 repre-
sentatives from EPA, state agencies, and other organiza-
tions involved in assisting water systems with capacity
development attended the workshop. EFC Director
Jeff Hughes presented on the topic of "Challenges to
Applying Asset Management at the System Level" dur-
ing one of the plenary sessions.  EFC UNC staff also
led the entire group of participants in a small-group
case study exercise on "Assessing Community Capacity
Development Needs."

Joint Southeastern Stormwater Management and
Erosion and Sediment Control Conference
Staff from the new UNC EFC satellite office in Atlanta
made a presentation on financing local government
Stormwater programs.

Direct Technical Assistance
Brightwater, North Carolina. The EFC is working with
the Brightwater community in North Carolina to
improve a failing water system. Thus far, this work has
involved a series of phone calls, a cash flow analysis,
and a visit to the neighboring town of Hendersonville.
Conversations with Hendersonville are underway with
the goal of the town partnering with Brightwater on a
new water system.
Laurel Park, North Carolina. The EFC is working with
this community to expand its sewer system. Using
material from its existing water leadership notebook,
the EFC has been meeting with town and board offi-
cials of Laurel Park to lay out funding options for the
expansion.

Orange Water and Sewer Authority (OWASA),
Carrboro, North Carolina. The EFC assisted the
OWASA utility with the selection of a new consultant to
carry out an innovative rate study.

Water and Sewer Authority of Cabarrus County
(WSACC), North Carolina.  The  Water and Sewer
Authority of Cabarrus County is one of North
Carolina's largest  regional sewerage providers. Work
with the authority has been an extended project,
wherein the EFC  has had several  meetings to provide
guidance to WSACC in reexamining elements of its
governance structure and financial policies. The EFC
presented interview results and reports to the
WSACC board this quarter.

Camden County,  North Carolina. The UNC EFC has
worked with Camden County on  landfill franchise
issues. This work has involved  legal research and an
assessment of the legality of their landfill franchising
process.

Polk County, North Carolina. The EFC has been
working with Polk County on landfill availability fee
issues. The EFC produced a letter to the county attor-
ney.

Nags Head, North Carolina. In  the last quarter of the
year, the UNC EFC has been working with the town
of Nags Head to  develop a draft proposal for an
innovative finance program for failing septic  systems.

Navassa, North Carolina. In October, the UNC EFC
developed a rate  study and business plan for the
town of Navassa.

Watauga Region Governments. In November, EFC
Director Jeff Hughes facilitated a work session for
three local governments and a  state university that
want to work together on  a regional water and
sewer initiative.
                                             REGION 4 EFC AT THE UNIVERSITY OF NORTH CAROLINA

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            ACTIVITIES  &  ACCOMPLISHMENTS
OTHER PRESENTATIONS, CONFERENCES
AND  MEETINGS
• Western North Carolina Stormwater Working Group,
  January 28, 2005, Asheville, North Carolina.

• American Water Works Association National Source
  Water Protection Conference, January 25, 2005.
  Palm Beach, Florida.

• Environmental Financial Advisory Board Meeting,
  March 14-15, 2005, Washington, D.C. Participated
  in the annual EFAB winter meeting and small
  group work sessions. Washington,  D.C.

• Environmental Finance Center Network Meeting,
  March 15-16, 2005. Washington, DC

• Environmental Law for New City and County attor-
  neys, April 1, 2005, Chapel Hill,  NC. EEC presented
  a two-hour session on cleanup liability issues and
  brief overview of stormwater Phase II to 50 atten-
  dees.

• UNC School of Government, MPA Graduate
  Capstone Presentation on disadvantaged communi-
  ty programs, April 8, 2005 and on solid waste,
  April 8, 2005. The 20-minute presentations took
  place before an audience of approximately 30
  people, including officials from the North Carolina
  Department of Natural  Resources.

• Water Resources Research Institute (WRRI)
  Conference, April 15, 2005, Raleigh, North
  Carolina. The UNC EFC presented the  results of
  the Appalachian Regional Commission Water and
  Sewer Infrastructure Needs Study.

• AWWA Finance and Management Meeting, April
  15, 2005, presentation to AWWA Finance
  Committee on the EFC rate survey project.

• Georgia water resources presentation, April 27,
  2005, Athens, Georgia.  Presentation of EFC capa-
  bilities to other funding agencies and communities.
 • Urban Water Consortium, June 9, 2005,
  Wilmington, North Carolina. Presentation of North
  Carolina rates model.

 • National Air & Waste Management Association
  Annual Conference, June 21-23, 2005, Minneapolis,
  Minnesota. Presentation before 1,500 conference
  attendees. The UNC  EFC research assistant had an
  abstract published in the conference materials
  based on Appalachian Regional Commission Study
  research and thesis research.

 • Council of Governments Regional Water Planning
  Session, June 28, 2005. Meeting to discuss methods
  of providing regional planning assistance to North
  Carolina communities.


New Initiatives

The UNC EFC initiated the following new projects
during 2005:

STORMWATER MANAGEMENT  COURSE
The UNC EFC designed a new School of
Government course  on the management and funding
of local government stormwater programs. The
course, titled, "Managing and Funding Local
Government Stormwater  Enterprises," took place in
June. The course provided local North Carolina gov-
ernment managers, finance directors, planners, and
public works officials with an in-depth introduction
to planning and funding  stormwater utilities. More
information is available at .
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              ACTIVITIES  & ACCOMPLISHMENTS
STORMWATER IMPLEMENTATION GROUP
(SWIG) WORKSHOPS
This is an ongoing seminar to improve the implemen-
tation of stormwater programs in North Carolina. The
group consists of local and state government officials
and other key persons involved in stormwater imple-
mentation. There are typically 40 individuals from
approximately 20 counties at these monthly work
sessions. The work  sessions focus on topics involving
stormwater implementation and address many ques-
tions now facing North Carolina communities about
Phase II and other state stormwater programs.

NORTH CAROLINA WATER LISTSERV
AND WATER OPERATORS LISTSERV

In May, the EFC created the North Carolina Water
Listserv for Water Managers. The listserv has about
375 members and has been very active. The Water
Operators listserv was also created with 50 members
who work more specifically in the area of operations
of water facilities.

NEW SATELLITE OFFICE IN ATLANTA,
GEORGIA

The UNC EFC established a satellite  office in Atlanta,
Georgia, in June. The Atlanta EFC staff member has
been building stronger relationships with organiza-
tions and communities in Georgia, Tennessee, and
South Carolina.

STATEWIDE WATER &  SEWER RATES
SURVEY AND ANALYSIS
The UNC EFC began carrying out a comprehensive sur-
vey of water and sewer rates in North Carolina. Data
from EFC questionnaires and from databases compiled
by other agencies will be combined and used in EEC-
designed models to  project the financial impacts—at
the state, utility and  household levels—of different poli-
cy options and changes in consumption patterns.

WATER OPERATOR RETENTION
The UNC EFC was  again successful in winning a
grant from the Southeast Regional Small Public Water
Systems Technical Assistance Center (SETAC) based
in Mississippi. This year's proposal involves a project
to improve water operator retention and recognition,
particularly focusing on the states of North Carolina
and Georgia. This project will run from late 2005 to
early 2007.

The UNC EFC intends to begin work in the following
areas in 2006:

• Lend support to the Small Community Water
  Infrastructure Exchange (SCWIE) in an effort to
  enhance cooperation between state funding pro-
  grams  for utilities.

• Assist/present at the South Carolina Rural
  Communities Assistance Partnership  (RCAP)
  Economic Development and Wastewater
  Management workshop in Columbia, South
  Carolina.

• Make presentations to between 800 and 1,000
  elected officials on issues related to managing
  water resources at the North Carolina Essentials  of
  Government Program.

• Promote best practices in retaining water opera-
  tors, especially for Georgia and North Carolina.

• Prepare an Environmental Funding Matrix for the
  state of Georgia.

• Research water and sewer rate data for Georgia
  communities and municipalities.

• Address the areas of education materials, manage-
  ment, and full cost pricing as they relate to sustain-
  able infrastructure.
                   Contact
  Jeff Hughes, EFC Director
  Phone: (919) 843-4956
  E-mail: jhughes@unc.edu
                                           REGION 4 EFC AT THE UNIVERSITY OF NORTH CAROLINA

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                                              PERFORMANCE  MEASURES
Outcomes

As a result of the activities and accomplishments out-
lined in the previous section, outcomes have included
the following:

VERBAL FEEDBACK

Stormwater Management Course
Participants of the "Managing and Funding Local
Government Stormwater Enterprises" course that
took place in June provided the following remarks in
the written evaluations of the course:
   • "Very informative, enjoyed the presentations and
    meeting others in the state with similar issues,
    and those who have already implemented pro-
    grams."

   • "Good information, a lot of resources, and good
    clarification of data".

   • "Extremely good course of instruction. Excellent
    speakers all around. I will look forward to more
    of this type of education. Excellent effort."

   • "Excellent course that pulls together all the ele-
    ments. Really helped to bring focus to the issue
    of Stormwater."

One county waste department sent the following in a
note to the UNC EEC: "The specialized financial
assistance provided by the EEC has been invaluable
in our efforts to provide accurate and reliable finan-
cial information and policy advice to the Board of
County Commissioners. The EEC's expertise in gov-
ernmental financing has resulted in several recom-
mendations regarding financial assumptions and
responsible financial management practices for enter-
prise funds."

Regarding the Resource Enhancement project for the
North Carolina Division of Marine Fisheries, a state
official described the report as "helpful in providing
a non biased view of the situation."
AWARDS

• The UNC EFC was again successful in winning a
  grant from the Southeast Regional Small Public
  Water Systems Technical Assistance Center
  (SETAC).

• Recognition Award Graduate Poster—presented by
  the North Carolina Water Resources Association
  Board for the EFC poster titled, "Water and Sewer
  Needs and Capital Finance Strategies in North
  Carolina's Appalachian Region."

• Bryan Fellowship Award—for an EFC research
  assistant to conduct a project titled, "Financial
  Management Assistance for Low-Income
  Communities" in Brunswick County, North
  Carolina. The award was presented by the Carolina
  Center for Public Service.
Impacts
Specific environmental issues addressed through the
EFC's 2005 activities and accomplishments include:

• Drinking water

• Stormwater

• Source water

• Agriculture

• Environmental cleanup

• Recycling and landfills
                                            ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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                                   EF©N
                                   environmental flnance center network

Region 4 Environmental Finance Center
AT THE UNIVERSITY OF LOUISVILLE
              ™

          IS   AL    GA
          •«OS
                         FL
  In This Report

  Background & Summary	62

  Activities & Accomplishments	63

  Performance Measures..                       ...71

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                                            BACKGROUND  &  SUMMARY
       The Louisville Environmental Finance Center
       (EFC) was established in 1998 to serve the
       eight states of EPA's Region 4 (Kentucky,
Tennessee, North Carolina, South Carolina, Georgia,
Alabama, Mississippi, and Florida).

In 2005, the Louisville EFC continued to provide and
broaden its technical assistance and training services
to communities regarding contaminated land revital-
ization and is working with a number of different
cities on brownfield redevelopment. As part of that
initiative, the EFC has been planning and developing
more economically efficient and environmentally
friendly incentives and  other measures to encourage
stable and sustainable human settlements. The EFC
served as co-host, participant, or organizer to several
community forums aimed at providing technical
assistance to those interested in sustainable develop-
ment activities.

The center is also working on smart growth planning
for area development agencies, municipalities, and
states, focusing on the role environmental insurance
can play in mitigating risks and attracting investments
in reclamation. The EFC also provided input to the
efforts of the Environmental  Financial Advisory
                                                 REGION 4
Board (EFAB) in addressing issues of financial assur-
ance with regard to the Resource Conservation and
Recovery Act (RCRA) and addressed ways of provid-
ing greater certainty over firms' financial capacity to
remediate after completing ongoing operations.

The center continued to produce its Practice Guides
series of briefing papers for local officials, volunteer
boards, and citizen committee members, and also
produced a number of published articles in trade
magazines and academic journals. The Practice
Guide series is focused on aspects of land use plan-
ning and information system development for pro-
moting urban infill, brownfield redevelopment, and
other aspects of smart urban growth.
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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed Projects & Initiatives

COMPLETED PRACTICE GUIDES
These guides, along with those developed in the pre-
vious years, continue to be regularly downloaded by
users, according to the EFC's Web site tracking system:

• Practice Guide #9: Contaminated Properties:
  History, Regulations, and Resources for Community
  Members*

• Practice Guide #10: Brownfield Redevelopment:
  Make It Possible!*

• Practice Guide #11: Brownfields Program Placement
  in Local Governments*

• Practice Guide #12: Public Involvement: How
  Active Participation in Environmental Issues and
  Decisions Makes Economic Sense and Broadens the
  Knowledge Base

• Practice Guide #13: Do You Want Utilities with
  That? Avoiding the Unintended Economic Impacts
  of Poorly Planned Growth on the Provision of
  Water, Sewer, Gas, and Electric Infrastructure

TECHNICAL ASSISTANCE AND  PUBLIC
OUTREACH
• EFC staff organized an address by Julia Christensen,
  who presented "Reusing the Big Box"  on September
  27, 2005, at the Urban Design Studio in downtown
  Louisville. Ms. Christensen has traveled throughout
  the United States documenting the reuse of aban-
  doned big box stores such as Target and Wal-Mart.
  This event was organized and sponsored by the
  Center and the Planning Student Organization (PSO).
  More than 60 people attended this event and the
  diverse audience included University of Louisville
  students and faculty; students and faculty from
  Spalding University and Jefferson Community
 College; Metro Louisville government officials includ-
 ing the planning director and staff; a representative
 from inspections, permits, and licensing; economic
 development officers; planning commissioners from
 Louisville and Clarksville, Indiana; commercial and
 real estate developers, realtors, real estate analysts
 and consultants; architects, artists, and a representa-
 tive from Federal Reserve Bank; and neighborhood
 association members. The Louisville Courier-Journal
 ran a front page story in the Sunday, September 25,
 issue and the EFC also arranged for Ms. Christensen
 to be a featured speaker on 89.3/WKPL's State of
 Affairs radio program (the local NPR station).

 EFC Director Peter Meyer provided review and
 comment  on SMARTe, the new brownfields* elec-
 tronic information system being developed by the
 EPA Cincinnati lab and the Interstate Technology
 and Regulatory Council (ITRC).
In 2005, the Louisville EFC...

4 Posted six new practice guides.
4 Published articles in eight magazines and
   other venues.
4 Presented at more than nine meetings/
   conferences with up to 8,000 participants
   at each.
4 Attracted 425 members to listservs for
   local water managers and operators creat-
   ed in June of 2005.
* Conducted four interactive workshops
   attended by 40 to 50 people each.
"leveraged project, •which is not funded through core grant money.
                                                 REGION 4 EFC AT THE UNIVERSITY OF LOUISVILLE

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             ACTIVITIES  &  ACCOMPLISHMENTS
• EFC Co-Director Lauren Heberle met with the Metro-
  politan Housing Coalition to provide technical assis-
  tance regarding housing and environmental policies.

• The EFC commenced a series of interactive work-
  shops that provide technical assistance meant to
  improve community participation in brownfields
  redevelopment* with the intention of developing a
  replicable model. The first four workshops have
  been completed and attendance at each workshop
  has ranged from 40 to 50 people.  These partici-
  pants have a wide range of knowledge about
  brownfields and experience with urban redevelop-
  ment. They are a diverse set of stakeholders,
  including residents, developers, city officials (elect-
  ed and appointed), property owners, business
  owners, realtors, nonprofit organizations, social
  service providers, and environmental specialists.

TECHNICAL ASSISTANCE WITH  PUBLIC
SECTOR BROWNFIELDS INSURANCE
ACQUISITION*

As part of this support task, the EFC provided techni-
cal assistance to brownfield projects attempting to
use environmental insurance in Louisville, Kentucky;
Kansas City, Missouri; and Kenosha,  Wisconsin, in
order to develop a practice guide on best approach-
es for municipal uses of this risk transfer tool to revi-
talize brownfields. Extensive telephone consultations
were held with municipal agency officials and their
advisors in all three cities.

The Louisville, Kentucky, project's initial prospective
purchaser dropped out, but two new ones entered
the picture, reflecting a major turn-around in demand
for industrial land in the metro area, and thus for the
target site. One of these two had reached the final
negotiations stage by September, using as its envi-
ronmental counsel the same attorney with whom the
EFC has dealt when advising the development
agency about a possible public purchase. A purely
private effort is now underway to acquire and rede-
velop the site. Given the level of private  sector inter-
est, the city's industrial brownfields regeneration
efforts moved on to other sites, the EFC is support-
ing their efforts to reclaim an abandoned chemical
site that has yet to be fully remediated, but which
could anchor an area-wide revitalization.

The Kansas City, Missouri, project only began negoti-
ations in May—with the master developer selected in
late March, and, in the end, was unable to arrange a
satisfactory agreement with that party within the 180-
day negotiation period specified in the Request for
Qualification (RFQ) process. Effective September
2004,  the project restarted its efforts with the second
choice master developer. The EFC supported this
second round effort, which came to its completion
before by July 2005. In the interim, assistance to the
Kansas City Port Authority, which was dealing with
brownfield issues, has primarily involved issues asso-
ciated with liability  insurance coverage for a BRAG
closure for which the authority is acting as the Local
Redevelopment Authority (LRA).

The Kenosha, Wisconsin, project encountered a failure
on the part of its selected fixed price remediation con-
tractor to deliver a guaranteed schedule and price for
the work on which the firm bid and had to reopen
the process. In September  2004, Kenosha  officials
completed review of the final proposal from their new
remediation firm and were in the process of getting
municipal  council approval of all contractual matters
and documents. The Potentially Responsible Party
(PRP)—the property owner—continues to work close-
ly and constructively with the city, and the EFC
remains on call for assistance with that and other sites
in the city. This very specific  technical assistance activ-
ity terminated in Summer 2005.
                                                  •"Leveraged project, •which is not funded through core grant money.

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               ACTIVITIES  &  ACCOMPLISHMENTS
COMPLETED PUBLICATIONS

EFC staff continues to succeed in disseminating tech-
nical assistance and policy evaluation broadly through
trade and academic mediums. Staff and associates
have published articles in the following publications:

• Karen Cairns, with David Wicks, completed
  "Environmental Education: The Keystone for Green
  City Initiatives" for the Spring-Summer 2005 issue of
  Sustain Magazine.

• Peter Meyer, with Kris Wenstedt, Lauren Heberle,
  and Anna Alberini, completed "Public Policy to
  Attract Private Capital  to Contaminated Sites: The
  Relative Values Developers Assign to Different
  Incentives"* for K. Millar and P. Nathanail (eds)
  Proceedings of the 2005 CABERNET Conference.
  2005:  Laganside  Development Corp., Belfast, NI.

• Peter Meyer published a commentary  on the
  Atlantic Station brownfield regeneration project* in
  Atlanta in the January 2005 issue of Partners, the
  newsletter of the Community Affairs Department
  of Federal Reserve Bank of Atlanta.

• Peter Meyer with Lin Ye and Sumdha Mandpe
  published "What IS Smart Growth? - Really?"
  in the January 2005, issue of the Journal of
  Planning Literature.

• Kris Wernstedt and Peter Meyer published "What
  Do Developers Want?  Attracting Private Investment
  to Brownfields"* in Brownfield News. IX(3):12.

• Karen Cairns published "Environmental Education:
  The Keystone for Green City Initiatives" in Sustain:
  A Journal of Environmental and Sustainability
  Issues, Issue 12, Spring/Summer 2005: pp. 44-53.

COMPLETED WORKING  PAPERS

• Karen Cairns placed Environmental Education
  Unit Study: Model Community Meetings and
  Activities to Address Citizenship Skills and Public
  Participation in Environmental Decision-making
  on the center Web site, under "working papers."
COMPLETED PRESENTATIONS

EEC staff and associates presented at multiple major
national and international conferences and at several
regional venues. These public presentations serve to
disseminate technical advice, analysis, and assistance.
The audiences  consisted of public and private practi-
tioners, other academic researchers, and advocacy
agencies.

• For the April 2005 Urban Affairs Association
  Meetings (500 participants), Lauren Heberle and
  Peter Meyer presented "Public-Private Partnership
  Problems: Mismatched Public and Private Sector
  Perceptions of the Brownfield Issue and the
  Effects on Redevelopment Policy"*; Carol Norton
  presented "Brownfields Outside the Box: Offsite
  Impacts  and  the Returns to Local Remediation
  Subsidies"*; and Karen Cairns presented "The Long
  and Rocky Road: A  Case Study of Public
  Involvement  and Participatory Planning in
  Environmental Justice Policy Issues."

• Peter B.  Meyer presented "Public Policy to Attract
  Private Capital to Contaminated Sites: The Relative
  Values Developers Assign to Different Incentives"*
  for the April  2005 Conference  of CABERNET
  (Concentrated Action on Brownfields and
  Economic Regeneration NET work) in Belfast,
  Northern Ireland. (150 participants)

• Peter B.  Meyer presented "Contamination
  Information:  Source of Stigma or Investment
  Stimulus?"* at the 2005 Annual Conference of the
  Association of European Schools of Planning,
  Vienna, Austria, in July. (400 participants)
 •"Leveraged project, •which is not funded through core grant money.
                                                  REGION 4 EFC AT THE UNIVERSITY OF LOUISVILLE

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           ACTIVITIES  &  ACCOMPLISHMENTS
Presentations at Brownfields 2005* in Denver in
November that involved EFC staff included (6,000
participants):

• "Moving Brownfield Redevelopment Forward
  Through Smart Growth Initiatives in the United
  States,"* Lauren Heberle part of the "Growing
  Smarter" Panel with Adhir Kackar, EPA; Ferd
  Belz, Cherokee Denver; and Tara Penders,
  Baltimore, MD.

• "Negotiating Environmental Insurance: Pitfalls
  and Opportunities for Public Sector
  Representatives," a session involving two attor-
  neys and  two brokers as presenters, organized
  by Peter Meyer.

• A session of EPA STAR research products relat-
  ing to brownfields* included Peter Meyer, pro-
  posed by  project officer Matt Clarke, EPA, Office
  of Policy,  Economics and Innovation, National
  Center for Environmental Research.

• A session on "The Future of Brownfield
  Environmental Risk Management,"* that included
  Peter Meyer, proposed by Susan Neuman, presi-
  dent of the Environmental Insurance Agency, a
  private brokerage firm.

• Lauren C. Heberle and Diane Bates from The
  College of New Jersey presented a paper enti-
  tled "Plots against the American Dream: Framing
  Responses to Smart  Growth Incentives" at the
  American Sociological Association Meetings.
  (8,000 participants)
  • Peter B. Meyer took the lead in preparing a
    paper on "Preferences and Perceptions:
    Efficiency Losses from Public Sector Failures to
    Recognize Brownfield Developers' Valuations of
    Alternative Incentives"* that was presented at the
    Southern Economics Association Meetings. (400
    participants)

  • Peter B. Meyer participated in writing "Attracting
    Private Investment to Contaminated Properties:
    The Value of Public Interventions,"* a paper pre-
    sented to the annual meeting of the Association
    for Public Policy Analysis and Management.  (500
    participants)

  • Lauren C. Heberle presented financing strategies
    for land conservation to the Conservation Com-
    mittee of the Kentucky Sierra Club. (50 members)

  • Lauren C. Heberle reviewed and discussed poli-
    cy implications of the  Louisville Metropolitan
    Housing Coalition State of Housing report at
    their annual meeting and press  conference. (50
    in audience and  regional TV news  coverage)


Ongoing Projects & Initiatives

ONGOING  PRACTICE  GUIDES

Status of Practice Guides developed by  the EFC
include:
• Practice Guide #W: Financing Local Public
  Infrastructure: Determining an Effective Revenue
  Stream That Supports Local Projects

  Status: In process; graduate research assistant
  Allison Houlihan has now taken the lead on this
  Practice Guide and will move forward with assis-
  tance  from Dr. Sarah Coffin.

SUPPORT FOR LAND CLEANUP AND
REVITALIZATION  EFFORTS*
This expanded activity is intended to involve training
workshops for revitalization efforts involving all
 •"Leveraged project, •which is not funded through core grant money.

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               ACTIVITIES  &  ACCOMPLISHMENTS
forms of contaminated lands. This effort is not limit-
ed to the brownfields focus that the EFC has had in
the past, but includes Superfund, the Resource
Conservation Recovery Act (RCRA), Base
Realignment and Closure (BRAG), and federal facili-
ties, as appropriate and as needed by communities
in Region 4.

• The EFC remains available  for the Spartanburg
  County Community & Economic Development
  Department and the ReGenesis  organization in
  Spartanburg, South Carolina, in  support of its
  efforts associated with one of the  16 demonstra-
  tion projects of the Environmental Justice
  Interagency Work Group.

• Dr. Peter Meyer, director of the  EFC, continued
  ongoing technical assistance on area-wide
  approaches  to brownfields*, working with brown-
  fields and economic development offices in
  Louisville, Cincinnati, Indianapolis, St. Louis,
  Trenton (New Jersey), New York,  and other metro-
  politan areas that consulted with him on issues.

• Dr. Meyer expanded his support for the develop-
  ment of regional sustainable development plan-
  ning in northern Kentucky, conducting a series of
  economic forecasts for the  region.

• Dr. Meyer continues to play a formal role in facili-
  tating and participating in the consultations of the
  Environmental Financial Advisory Board's RCRA
  Financial Assurance Project, including follow-up
  reporting  on the state of the environmental insur-
  ance industry and its willingness to underwrite
  certain forms of financial assurance and bonding.
ORGANIZATIONAL DEVELOPMENT AND
EFAB  SUPPORT
This activity primarily involved EFC Director Dr.
Peter Meyer:

• Continued involvement with two Environmental
  Financial Advisory Board (EFAB) task forces, on
  (1) Innovative Environmental Financing Tools, and
  (2) Preventing Future Non-Funded Abandoned
  Sites, and in initial conference calls on the financ-
  ing tools task force.
• Represented the EFC at EFAB's summer meeting,
  during which he serves as an expert witness, and
  participated in the EFC Network's summer meet-
  ing, both in San Francisco in August.

• Continued a project with Dr. Thomas Lyons of the
  School of Urban and Public Affairs, University of
  Louisville. Collaborated with Dr. Lyons to examine
  "Entrepreneurship Opportunities and  Responses in
  the Brownfield Redevelopment Arena—Factors
  Affecting Capacity to Capitalize on Opportunities
  in an Emerging Marketplace" through research on
  developers that have pursued contaminated land
  redevelopment under state voluntary cleanup pro-
  grams in Region 4 and other states.

WEB SITE MAINTENANCE AND  TRACKING
Due to continued Web site tracking, the EFC is able
to determine that Web site usage first peaked in the
spring of 2005, and then again during the fall, when
•"Leveraged project, •which is not funded through core grant money.
                                                 REGION 4 EFC AT THE UNIVERSITY OF LOUISVILLE

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        ACTIVITIES  &  ACCOMPLISHMENTS
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 Nov 2005
934
707
286
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2847
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 Oct 2005
857
656
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 May 2005
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 Apr 2005
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2811
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17245
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 Feb 2005
630
443
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 Jan 2005
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                                     ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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               ACTIVITIES  &  ACCOMPLISHMENTS
it began a steady increase (Chart 1). This might be
attributed to the academic calendar. A detailed sum-
mary by month appears in Chart 2.

An evaluation of the 'Top 30' total URL hits per
month reveals that the EFC's Practice Guides, some
of the Working  Papers, and the International Urban
Planning and Environment Association (IUPEA) con-
ference continue to draw people to the site. The EEC
continues to work on improving the accessibility of
information on the site and will be reorganizing the
site to make it easier to update more frequently.

Several of the EEC staff's public speaking opportunities
have been the direct result of the presence of the
center Web site, and those public engagements have
led to requests for technical  assistance.


New Projects & Initiatives

Several new initiatives have been undertaken as
Dr. Lauren  Heberle, the new co-director of the EEC,
took on more responsibility  for staff hiring, grant
writing, project  development, and outreach.

NEW PRACTICE  GUIDES
Staff have been developing several new Practice
Guides during this calendar year:

• Citizen Participation and Its Contributions to
  Financial Efficiency in Environmental Planning
  (Karen Cairns and Susan Opp)

• Farmland Preservation and Conservation:
  Conservation Tools, Financing Strategies, and
  Economic Benefits (Preston Scott Lacy)

• Learning from Sustainable Military Base Practices:
  Energy and Water Conservation Systems That Can
  Save Municipalities Money (Erika Marelich)

• Attracting Investors to Brownfields: Lessons for
  Communities About What Developers Really Value*
  (Peter Meyer)
NEW TECHNICAL ASSISTANCE TO
FACILITATE  COMMUNITY PARTICIPATION
IN  BROWNFIELDS REVITALIZATION*

This new project is headed by EEC Co-Director
Lauren Heberle. In collaboration with local govern-
ment officials, community organizers, and Dr.
Thomas Lyons from University of Louisville, Dr.
Heberle headed up preparation and launch of
activities to develop a model and provide technical
assistance to  increase community participation in
brownfields redevelopment in economically dis-
tressed neighborhoods. The project will serve to
develop a nationally replicable model. The area  in
Louisville, Kentucky, selected for consideration is the
Park Hill Corridor, known for its former industrial
uses, abandoned buildings, vacant lots, physically
isolated neighborhoods, extreme poverty, and prob-
lems with known contamination. The first phase of
this project includes a series of educational, partici-
patory workshops for local stakeholders across the
entire community to begin to build knowledge of
the  brownfields redevelopment process and to break
down misperceptions about the area that are based
on race and class. This is a three-year project expect-
ed to end in  September 2008.

NEW TECHNICAL ASSISTANCE TO THE
PRIVATE SECTOR

EEC staff members Carol Norton and Karen Cairns
initiated and  continue dialogue with and  support to
the  director of development Midwest for YUM!
Brands regarding the improvement of the company's
policies on deconstruction, demolition, and handling
of demolition waste. The EEC has  also included  the
Kentucky Pollution Prevention Center in this conver-
sation. Further meetings are expected throughout
2006, when one demolition project begins. This  ini-
tiative is expected to turn into a substantial project
and potential model for best practices.
•"Leveraged project, •which is not funded through core grant money.
                                                 REGION 4 EFC AT THE UNIVERSITY OF LOUISVILLE

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            ACTIVITIES  &  ACCOMPLISHMENTS
NEW ORGANIZATIONAL
DEVELOPMENT/BUILDING CENTER
NETWORKS
• EFC Co-Director Lauren Heberle initiated a report
  that will connect the profitability of smart growth
  policies and practices for brownfield redevelop-
  ment projects.* The report will include case studies
  of brownfield redevelopment projects that have
  either benefited from smart growth policies or
  have implemented smart growth principles in the
  redevelopment plan. The work here involves
  connecting with agencies and individuals involved in
  the cases and gathering key information about what
  connections were made between smart growth and
  brownfields redevelopment in each scenario.
EFC Co-Director Lauren Heberle worked with
EPA's Environmentally Responsible Redevelopment
and Reuse Initiative (ER3) to develop a
Memorandum of Cooperation (MOC) that would
outline the Region 4 EEC's role  in participating in
an ER3 network of experts.

Ms. Heberle will serve on the U.S. Regional and
Local Land Revitalization Planning Team (part of
Phase 4 of EPA's United States and German
Bilateral Working Group on Redevelopment of
Contaminated Sites)

The center offered, and will continue to offer, its
support for the  Louisville Green City Partnership
among Metro Louisville, Jefferson County Public
Schools, and the University of Louisville. This sup-
port included developing a smart growth class for
Jefferson County School Teachers Continuing
Education program and continued technical assis-
tance to the partnership taskforce.

                 Contacts
 Peter Meyer, EFC Director
 Cell: (502) 435-3420
 E-mail: pbmeyer@louisville.edu

 Lauren Heberle, EFC Co-Director
 Phone: (502) 852-4749
 E-mail: 1 OhebeO 1 @gwise .louisville. edu
                                           ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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PERFORMANCE  MEASURES
    Outcomes
Impacts
   As a result of the activities and accomplishments out-   Specific environmental issues addressed through the
   lined in the previous section, outcomes have includ-    EFC's 2005 activities and accomplishments include:
   ed or will include the following:
     Ongoing, frequent dissemination and use of
     Practice Guides.

     Opportunities for dissemination of information
     through papers and journal and magazine articles.

     Opportunities for education and technical assistance
     ranging from presentations to training workshops.

     Active outreach and education stemming from the
     EFC Web site.

     Ongoing technical assistance opportunities for
     communities and other stakeholders.

     Influence on the ways in which a major fast food
     corporation engages in environmentally friendly
     practices.
  Brownfields*

  Sustainable development

  Smart growth planning
   •"Leveraged project, •which is not funded through core grant money.
                                                 REGION 4 EFC AT THE UNIVERSITY OF LOUISVILLE
                                                                                          71

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Great
Lakes
 Environmental
  .  *•»< • —
 Finance!

EF@N
environmental finance center network
  Cerite
               Region 5 Environmental Finance Center

               AT CLEVELAND STATE UNIVERSITY
                 In This Report


                 Background & Summary	74

                 Activities & Accomplishments	75

                 Performance Measures..                      ...81

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                                            BACKGROUND  &  SUMMARY
       The Environmental Finance Center (EFC) at
       Cleveland State University assists communities
       as well as public, private, and nonprofit sec-
tor entities in the Great Lakes (EPA Region 5) states
of Illinois, Indiana, Michigan, Minnesota, Ohio, and
Wisconsin. Specifically, this EFC (known as the Great
Lakes EFC or GLEFC) helps build innovative, cost
effective, and high-quality strategies for environmen-
tal improvement and sustainable economic
development.

The GLEFC is housed within the Maxine Goodman
Levin College of Urban Affairs  and  provides technical
assistance, training, and applied research. The  center
assists communities and other entities in solving
financial problems related to environmental facilities
and resources. Services include financial and eco-
nomic analysis and strategies, policy analysis and
planning, urban redevelopment community advisory
services, research and information services, and train-
ing seminars and conferences.  The  center utilizes
many tools to assist clients, including financial and
budget analysis, market and impact analysis, best
practice reviews, training seminars  and conferences,
focus groups and community visioning/strategic
planning processes, and environmental planning and
program evaluation.
                                                  REGION 5
In 2005, as in prior years, the GLEFC continued to
provide technical assistance, applied research, semi-
nars/training, counsel, and testimony to local, state,
federal; and nonprofit organizations and clients
throughout Region 5. The GLEFC operational portfolio
included several new projects as well, driven by
continuing partnerships with federal, state, and local
governments spanning two or more years. In addition,
the GLEFC is engaged in policy-related work with
the committees of EPAs Environmental Financial
Advisory Board (EFAB), in developing strategies for
the efficient and effective management and financing
of water and wastewater utilities.
                                              ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed Projects & Initiatives

URBAN REDEVELOPMENT
TECHNICAL ASSISTANCE
The GLEFC provided urban redevelopment technical
assistance to several communities and organizations
throughout Region 5. Participants at the GLEFC
technical assistance sessions represented the
following organizations:

• Bolinds Incorporated

• Perry County, Ohio

• David Kramer Development

• Rib Lake, Wisconsin

• Syracuse EFC

TRAINING NEEDS OF COASTAL
RESOURCES DECISION  MAKERS  IN
OHIO'S LAKE ERIE BASIN
The GLEFC published the second in a series of articles
in Coastal Management: An International Journal of
Marine Environment, Resources, Law, and Society,
Volume 33, Number 3, July-September 2005, on a
study conducted for the National Oceanic and
Atmospheric Administration (NOAA),  Old Woman
Creek National Estuarine Research Reserve, Ohio Sea
Grant Program, and the Ohio Department of Natural
Resources. The purpose of the study is to identify the
information and knowledge needs of local coastal
resources decision-makers in the Ohio Lake Erie basin.
The article determines that training providers and local
coastal resources decision-makers have differing per-
ceptions of knowledge and informational needs and
training venues. Based on these findings, the article
suggests a role for state and federal agency training
providers as coordinators and facilitators of an
enhanced learning network among decision-makers.
 In 2005, the GLEFC...

 4 Composed at least two articles for
    publication.
 4 Convened meetings and provided technical
    assistance sessions for up to 45 attendees.
 4 Attended/presented at six conferences.
 4 Participated in three international projects.
LOCAL BENEFITS FROM  STEWARDSHIP,
LAKE  ERIE COMMISSION

The GLEFC conducted a project to define the bene-
fits accruing to a local jurisdiction/broad spatial area
from efforts in environmental stewardship (externally
funded by the Lake Erie Commission). Local deci-
sion-makers are key in achieving many objectives of
the Lake Erie Protection and Restoration Plan and
other water quality initiatives because of their role in
land use and zoning decisions, infrastructure con-
struction and maintenance, storm water manage-
ment, and economic development activities. The
GLEFC  developed a comprehensive understanding of
the knowledge base and expertise  in the Lake Erie
basin regarding the beneficial economic and fiscal
impacts of coastal and watershed stewardship.

JOURNAL ARTICLES

The GLEFC staff composed an article, "The Use of
Focus Groups for Design and Implementation of
Environmental Administrative Programs: A Comparison
of Two State-Level Processes in Ohio," for publication
in an academic journal resulting from GLEFC's experi-
ence utilizing focus groups in the development and
implementation of administrative public policy pro-
grams. The article highlights the advantages that focus
groups  provide compared to other forms of data col-
lection methods in the development of public policy
programs. (Publication is pending.)
                                                REGION 5 EFC AT CLEVELAND STATE UNIVERSITY

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             ACTIVITIES  & ACCOMPLISHMENTS
The GLEFC also published an article, "Cleveland's
Industrial Land Bank" (Brownfield News, August
2005), on the creation of an industrial land bank by
the city of Cleveland as a vehicle to accumulate and
market vacant land to attract industrial businesses
back to Cleveland.


Ongoing  Projects & Initiatives

The GLEFC worked on a broad array of environmen-
tal public policy initiatives in 2005 that included
ongoing as well as collaborative activities:

BROWNFIELDS ONE-STOP SHOP FORUM
(BOSS FORUM)

The GLEFC convened the fifth year of the BOSS
Forum, in collaboration with the Ohio Brownfields
Finance Partnership. The BOSS Forum's quarterly meet-
ings brought together federal, state, and local govern-
ment officials with environmental engineers, investment
and commercial bankers, insurance executives, real
estate professionals, and developers to discuss financial
and programmatic solutions to aid Ohio's small- and
medium-sized communities in their redevelopment. The
GLEFC convened four meetings throughout 2005:

• January  13, with 40 in attendance

• April 7, with 22 in attendance

• July 7, with  24 in attendance

• October 6, with 16 in attendance

The BOSS Forum schedules several brownfield rede-
velopment project profiles to be presented at each
meeting with the intent  of having attendees, who are
brownfield professionals, provide a supportive cri-
tique of the individual projects. The critiques provide
access to information and organizational, operational,
and funding-related strategies. The early BOSS meet-
ings focused on projects that were brought forward
by larger cities. Now that brownfield redevelopment
capacity has expanded in Ohio's metropolitan areas,
the attention has shifted to the state's medium and
small cities. This was a leveraged project, not funded
with the core grant.

BEST PRACTICES IN LAND BANK
OPERATION

In early 2005, the GLEFC commenced a major effort
to support the city of Cleveland's Economic
Development Department with the development of a
region-wide strategy for an industrial  and commercial
land bank. The concept of land banking was not new
to the city; however, the typically residential practice
required a national study to model its applicability for
an industrial or commercial framework. The GLEFC
published its Best Practices report in June 2005, after
six months of study. The report is available at the
GLEFC Web site at 
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               ACTIVITIES  &  ACCOMPLISHMENTS
properties. The GLEFC staff participated in developing
the finance curriculum and conducted the financing
portion of the week-long Nuts and Bolts training pro-
gram in Chicago. The June 2005 Nuts and Bolts session
included the development and use of three real-life
case studies introducing the seminar participants to
financing strategies in different settings, as well as rede-
velopment strategies in greater Chicago, utilizing indus-
trial, commercial, and residential development as
practical examples. The case studies provided partici-
pants with practical knowledge that they could relate to
their own communities. For the past four years of the
course, the GLEFC staff has prepared and devised the
site pro forma statements and related educational cur-
riculum for this important component of the course. In
addition, the GLEFC  conducted the final capstone pre-
sentations resulting from students' work on  the pro for-
mas. The June 2005 Nuts and Bolts training seminar
attracted 45 participants. The Nuts and Bolts task is a
leveraged project, not funded with the core grant.

PREPARATION FOR 2OO6 NUTS AND
BOLTS OF  BROWNFIELD REDEVELOPMENT
FOR LOCAL COMMUNITIES TRAINING
The GLEFC, in collaboration with the EPA Region 5
Brownfields Office,  HUD, and theNortheast-Midwest
Institute, is hosting the Nuts and Bolts Brownfield
Re-development training course in Cleveland in June
2006. In Fall 2005, the GLEFC  initiated the planning
stage for the annual week-long Nuts and Bolts semi-
nars. The GLEFC will co-host,  plan, and conduct the
week-long brownfield finance training program for
2006. The Nuts and Bolts task is a leveraged project,
not funded with the  core grant.

USEFUL LIFE WHITE PAPER
The GLEFC participated as a member of the EFAB
Useful Life Subcommittee, which was charged with
exploring ways to create new sources of funding or to
leverage existing sources of funding to address the sig-
nificant unmet environmental needs that face commu-
nities across the country. The subcommittee  drafted a
white paper to underscore the linkage between capital
financing strategies and the useful life of capital assets.
EPA published the white paper in April  2005.
GREATER CLEVELAND LEAD ABATEMENT
FINANCE PROGRAM
The GLEFC, in collaboration with EPA HUD, the city
of Cleveland, and Cuyahoga County, Ohio, partici-
pates as a subcommittee chair for the Greater
Cleveland Lead Advisory Council (GCLAC), a consor-
tium of state, county, and municipal governments,
and nonprofit organizations convened to reduce the
incidence of lead poisoning through lead abatement
procedures. This $1.2 million regional effort focuses
on the ways in which local partnerships can work
together on specific topics, including infrastructure
and sustainability (financing for long-term lead elimi-
nation), advocacy and outreach, and medical and
workforce development issues. The GLEFC chairs the
infrastructure and sustainability committee; and a
major focus of the GLEFC's work is a best practices
study to identify successful financing strategies that
are adaptable for lead remediation and abatement in
northeast Ohio. This work commenced in late 2005
and will continue through 2006.

In 2005, the GLEFC convened a focus group with
members of the GCLAC to identify the parameters of
the best practices study. An additional survey was
conducted as planned with the subcommittee to bet-
ter define the scope of work for a best practices scan
for the sustainability of lead abatement practices.

In addition, the GLEFC initiated work on a review of
model  local government ordinances to assist the city
of East Cleveland in its local efforts to better define
its own lead hazard prevention capacity.

The best  practices reports will serve as a guide for
new strategy development in Cleveland and East
Cleveland.

EPA  INTERN
The GLEFC hosted Christopher Gollan, an EPA
(post-graduate) intern on outplacement rotation from
January to June 2005. Mr. Gollan assisted the GLEFC
in managing the best practices in industrial land
banks project.
                                                   REGION 5 EFC AT CLEVELAND STATE UNIVERSITY
                                                                                              77

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             ACTIVITIES &  ACCOMPLISHMENTS
CAPFlNANCE, BOISE  STATE UNIVERSITY
ENVIRONMENTAL FINANCE CENTER
The GLEFC continues to partner with the Boise State
University EFC on providing training for the
CAPFinance capital planning software program to
local government water and sewer utilities. The
CAPFinance training seminars have proved invalu-
able in addressing the growing need for new
approaches to financing  and planning for capital
improvements and asset  management to maintain a
jurisdiction's capital stock.

BROWNFIELD NEWS EDITORIAL BOARD
The GLEFC Executive Director Kevin O'Brien serves
on the editorial board of Brownfield News magazine,
as the brownfield finance editor.
PRESENTATIONS, CONFERENCES, AND
MEETINGS
Capital Asset Planning, Management, and Finance
in Greater Cleveland—Town Meeting sponsored by
Congresswoman Stephanie Tubbs-Jones and the
Northeast-Midwest Institute.  The GLEFC collaborated
with the office of Congresswoman Stephanie Tubbs-
Jones and the  Northeast-Midwest Institute in organiz-
ing a town meeting of community leaders in greater
Cleveland to discuss the  economic importance of
public sector investment in the construction and
maintenance of infrastructure. The GLEFC  executive
director gave a presentation to the 50 participants on
the economic  impact of investment in infrastructure,
and the greater Cleveland capital investment needs
and investments over the past 25 years.
Rural  Community Assistance Partnership (RCAP)
Conference, Washington, D.C. The GLEFC presented
at a workshop called "Rural  Brownfield
Redevelopment Strategies" to an audience  of 50 local
government and tribal officials. The presentation
reviewed the recent increases in capacity in brown-
field development in  rural Ohio.
"Brownfields 2005" National Conference, Denver
Colorado, sponsored  by  EPA. The GLEFC served as
a panel moderator at the national brownfields
conference. The GLEFC presented "Land Banks and
Land Trusts as a Tool for Brownfield Redevelopment"
as the moderator of a panel titled, "Marketplace of
Ideas." Approximately 30 people attended.

Council on World Affairs. The GLEFC hosted several
groups of academics and government officials from
China and Canada traveling throughout the United
States through the CWAs International Visitor
Leadership Program seeking information on main-
taining economic growth with concerns about the
environment and environmental finance and sustain-
ability. The GLEFC executive director presented the
visiting officials with profiles of projects on brown-
field finance, sustainable development, and asset
management as guiding examples on managing envi-
ronmental  finance and sustainability.

National Vacant Properties Campaign Conference,
Cleveland, Ohio. The GLEFC made a presentation on
the  Industrial Land Bank Strategy and its impact on
the  reuse of vacant land. The presentation, based on
the  data, information, and analysis of the GLEFC's
work in developing  a strategy for an industrial land
bank in Cleveland, identified that many of the vacant
properties  in Cleveland were environmentally con-
taminated and required alternative strategies.

Cleveland's Industrial Land Bank Program—Press
Conference Announcing the Release of the Industrial
Land Bank Strategy, Cleveland, Ohio.  Cleveland
Mayor Jane Campbell and the GLEFC Executive
Director  announced the release of the city's Industrial
Land Bank Strategy  and program on the site of the
first industrial property to enter the program (a
recently secured industrial property that had received
environmental remediation). The press conference
served as the kick-off to the land bank operation of
the  city of Cleveland.
                                            ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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              ACTIVITIES  &  ACCOMPLISHMENTS
New Projects & Initiatives

INDUSTRIAL LAND BANK STRATEGY
DEVELOPMENT
The GLEFC assisted the city of Cleveland in the
development of a strategy to design an industrial
land bank to accumulate and market vacant proper-
ties with the specific mission of attracting industrial
companies to the city. The GLEFC conducted a best
practices study and an implementation schedule of
activities outlining an optimum mission, operations,
and governance structure, and financing to empower
the strategy to reuse industrial land. The GLEFC will
assist the city of Cleveland in initiating the policy
and process for the land bank.

CURRICULUM DEVELOPMENT IN REAL
PROPERTY ASSET  MANAGEMENT FOR
LOCAL GOVERNMENTS IN CROATIA
The GLEFC developed a curriculum for conducting
seminars for Croatian local government officials
(funded by U.S. Agency for International
Development [USAID] through the Urban Institute
mission in Zagreb, Croatia, and with the program-
matic support of the Unger Croatia Center for Local
Government Leadership at CSU). The Urban Institute
coordinates all government training in Croatia for
USAID and collaborates with the Unger Center to
provide management and finance training through-
out Croatia. The GLEFC worked with the Urban
Institute mission in Zagreb, Croatia, in developing a
curriculum to teach local government officials on the
importance of managing the land and building assets
owned by the public sector (in the de-evolution
from the central government of former Yugoslavia).
The central thesis of the program was to facilitate
the transfer of property from public to private own-
ership when the conversion would facilitate private
economic growth.
Capital Asset Management Seminar for Local
Government Officials in Croatia

The GLEFC conducted seminars in Zagreb, Rijeka,
and Sibenik, Croatia, on capital asset management
for local government officials and academics (from
the Zagreb School of Economics and Management,
the University of Rijeka, and the College of Sibenik)
in March, October, and December 2005 (funded by
USAID, directed by the Urban Institute, and with the
programmatic support of the Unger Croatia  Center
for Local Government Leadership). The mission of
the seminars was to introduce local government offi-
cials to the best practices in financing infrastructure
in both the European Union and the United States.
Many practices and tools described  in the seminars
have not yet been introduced into practice in
Croatia. The intent of the seminar was to stimulate
dialogue and debate on the best solutions to manag-
ing and financing capital assets.

Financing of Capital Assets in Croatia

The GLEFC also conducted seminars for local gov-
ernment officials and academics on financing capital
assets in Zagreb, Rijeka, and Sibenik, Croatia, in
October and December 2005 (funded by USAID,
directed by the Urban Institute, and with the pro-
grammatic support of the Unger Croatia Center for
Local Government Leadership). The mission of the
seminars was to introduce local government officials
to the best practices in financing infrastructure in
both the European Union and the United States.

URBAN REDEVELOPMENT
METRICS PROJECT

The GLEFC initiated a study for the Ohio
Department of Development (ODOD) and the Clean
Ohio Revitalization Fund to assess the impacts of the
Clean Ohio Revitalization Fund investments  on lever-
aging local public and private investments in the
redevelopment of Ohio brownfields. In 2005, the
GLEFC identified six project sites to review data and
information. The scope of work has been approved
by ODOD. GLEFC has begun data collection as well
                                                 REGION 5 EFC AT CLEVELAND STATE UNIVERSITY

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           ACTIVITIES &  ACCOMPLISHMENTS
as the development of a preliminary template to
gather cost metrics (i.e., types of and how funds
were spent on each site). The project will develop a
needs assessment for the kind of development
finance related metrics that can be utilized in assess-
ing the cost or outcomes of urban redevelopment
proposals or projects.

                 Contact
  Kevin O'Brien, EFC Director
  Phone: (216) 687-2188
  E-mail: kobrien6@adelphia.net
                                      ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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PERFORMANCE  MEASURES
    Outcomes

    As a result of the activities and accomplishments out-
    lined in the previous section, outcomes have includ-
    ed or will include the following:

    • Reports and feedback from the 2005 events where
      the GLEFC presented, facilitated, and/or coordinat-
      ed were favorably received.

    • Regarding the GLEFC's leading role in the strategy
      and program design and implementation for the
      city of Cleveland's industrial land bank process,
      both city and county staff continue to cite the
      GLEFC as the leader in helping bring this to
      fruition.

    • During a public press conference, Cleveland's
      Mayor Jane Campbell described the GLEFC's lead-
      ership role in the development of the industrial
      land bank strategy as entrepreneurial.

    • The GLFEC was highly rated for its presentation
      and participation in EPA's Nuts and Bolts of
      Brownfield Development training event held in
      Chicago in June 2005. On a scale of 0 to 10 (10
      being the highest), the GLEFC staff was rated as 9
      across all engagements for the  week-long session.

    • The Council on World Affairs issued an apprecia-
      tive letter to the GLEFC for its continued participa-
      tion and support of CWA's International Visitor
      Leadership Program. The GLEFC's Asset
      Management, Capital Improvements Planning, and
      Capital Finance seminars in March, October, and
      December 2005, in Croatia were also highly rated
      by the 70 participants as well as the sponsor,
      Urban Institute, and the Zagreb School of
      Economics and Management.
Impacts
Specific environmental issues addressed through the
EFC's 2005 activities and accomplishments include:

• Brownfields/redevelopment

• Coastal/watershed stewardship

• Stormwater management

• Land use/zoning

• Lead abatement

The impact of the GLEFC's work is demonstrated
through policies, strategies, practices, and programs
implemented as a result of the GLEFC's involvement
and activities. Specific impacts include the following:

• The Clean  Ohio Revitalization Fund project was
  undertaken to determine the structure and pro-
  gram rules of the fund. The GLEFC's work resulted
  in design of the structure of the policy rules
  governing the program.

• Brownfields One-Stop Shop (BOSS) Forum  resulted
  in 14 federal agencies collaborating on public devel-
  opment projects for brownfield redevelopment. The
  BOSS strategy is ongoing today, with quarterly ses-
  sions delivering public opportunities for communities
  to present their brownfield redevelopment concepts
  in a conversational forum format that allows for
  direct feedback from federal agencies.
                                                      REGION 5 EFC AT CLEVELAND STATE UNIVERSITY
                                                                                                 "

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                      ERFORMANCE  MEASURES
The GLEFC's work with the Old Woman Creek
National Estuarine Research Reserve (NERR) assist-
ed the reserve in framing the structure and design
of its coastal resources management training
program.

The GLEFC's work with the National Oceanic and
Atmospheric Administration (NOAA) allowed
NOAA to develop a synthesis of program activities
and define the trends of these activities across its
reserves, and subsequently initiate strategies for
measuring outcomes and performance with regard
to coastal training activities of the NERRS.
The GLEFC's recent work with the city of
Cleveland to develop a strategy and program
design for the city's industrial  land bank program,
has provided a platform for redevelopment oppor-
tunities throughout greater Cleveland. The strategy
and design have received broad public review, by
the press, the economic development community,
and the newly elected Mayor  of Cleveland. In
addition, the concept has attracted attention on
regional and national levels.
                                             ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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HEW MEXICO
ENVIRONMENTAL
FINANCE CtNHR

EF@N
environmental flnance center network
           Region 6 Environmental Finance Center
           AT THE NEW MEXICO INSTITUTE OF MINING
           AND TECHNOLOGY
            In This Report

            Background & Summary	84

            Activities & Accomplishments	85

            Performance Measures	94

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                                            BACKGROUND  &   SUMMARY
       The U.S. Environmental Protection Agency's
       (EPA's) Region 6 Environmental Finance
       Center is located at the New Mexico Institute
of Mining and Technology (New Mexico Tech) and
serves New Mexico, Texas, Oklahoma, Arkansas, and
Louisiana. The core mission of the New Mexico
Environmental Finance Center (NM EFC) is to help
state, local, and tribal governments  meet environ-
mental infrastructure needs and regulatory compli-
ance through state and local capacity building  and
technical information transfer. Capacity building
includes enhancing technical, managerial, and finan-
cial capabilities to achieve consistent and sustainable
regulatory compliance and develop sustainable infra-
structure.

The NM EFC assists in local capacity building by:

• Examining alternative approaches to meeting regu-
  latory compliance  or environmental infrastructure
  needs.

• Empowering communities to act  as the "drivers"
  for their own projects.

• Assisting with procuring professional services.

• Presenting funding alternatives.

• Acting as a bridge among federal, state, local and
  tribal governments.

• Presenting neutral  analyses of issues or projects.

• Gathering stakeholder input.
                                                 REGION 6
The NM EFC has been extremely active during the
past year and has experienced significant growth in
its program activities. The major projects that were
active or completed in 2005 include the following,
each of which is described in more detail in this
report:

• Capacity development activities for Region 6 states

• Capacity development program for New Mexico

• Capacity development for tribal water systems

• Tribal operator certification program

• Feasibility analysis of water treatment for small
  public water systems

• Independent analysis of leak detection technology
  for Albuquerque

• Water system  collaboration project for New Mexico

• Arsenic treatment outreach efforts for New Mexico
  water systems
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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed Projects & Initiatives

CAPACITY DEVELOPMENT ACTIVITIES
FOR REGION 6 STATES

The EFC continued to assist Region 6 with implemen-
tation activities associated with capacity development
strategies, as required under the 1996 Safe Drinking
Water Act (SDWA) amendments. This work included
activities in three different categories described as
follows:

Technical Information Gathering and Transfer
The NM EFC attended workshops and conferences to
present papers, interact with states and technical ex-
perts, and gather information on techniques, approach-
es, and tools that could be used by the states. The top-
ics of workshops included new regulations under the
SDWA, asset management, capacity development,
drought management, and water conservation.

Capacity Development Implementation Assistance
to Region 6 States
The NM EFC worked with Region 6 states on capaci-
ty development assistance. Discussions with individ-
ual states included sharing information regarding
capacity activities in other states and discussing
potential capacity development training programs.
The NM EFC has continued discussions with the
New Mexico Environment Department (NMED) on
ways to improve its capacity development program,
particularly in capacity assessments, prioritization of
water systems, and potential water system assistance.
These activities continue under a separate contract
with NMED. The NM EFC also has a separate con-
tract from the Texas Commission on Environmental
Quality (TCEQ) to conduct capacity assessments for
noncompliant small water systems.

EFC Network Assistance
The NM EFC works with the other EFCs in the net-
work on projects, answering questions, providing
 In 2005, the NMEFC...

 4 Held 10 training events during for tribal
    water operators and managers.
 * Attracted 143 participants to these events,
    including representatives from water systems
    from 20 of the 21 Region 6 tribes in New
    Mexico.
 4 Completed 112 assessments of community
    water systems.
information, and other collaborative activities as need-
ed. The NM EFC also attends the Environmental
Financial Advisory Board (EFAB) meetings twice a
year as well as the EFC director's meetings.

CAPACITY  DEVELOPMENT PROGRAM
ASSISTANCE FOR  NEW MEXICO
ENVIRONMENT DEPARTMENT

The NM EFC  continued to assist NMED with revi-
sions to the capacity development program under a
contract initiated in 2004. The assistance consists of
three main tasks: 1) revising the capacity assessment
procedures and conducting  capacity assessments of
water system; 2) assisting in developing a new prior-
itization program;  and, 3) training NMED staff to
conduct capacity assessments.

The NM EFC  developed a three-tiered approach to
capacity assessment. The  systems are prioritized into
tiers based on factors such as compliance history,
                          REGION 6 EFC AT THE NEW MEXICO INSTITUTE OF MINING AND TECHNOLOGY

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             ACTIVITIES  &  ACCOMPLISHMENTS
customer complaints, requests for funding, drought
concerns, and other known problems or issues with
the systems. They are also prioritized based on the
need for information.

• Tier 1: Systems with the greatest concerns; requires
  a significant amount of information. Receives an
  in-depth assessment process that requires interviews
  and multiple days to complete.

• Tier 2: Systems with minimal concerns; consists of
  a questionnaire that takes approximately two hours
  to complete.

• Tier 3: Systems with no known concerns; consists
  of a short questionnaire that takes about 30 minutes
  on the phone to complete.

The NM EFC has completed 112  assessments of com-
munity water systems across New Mexico. Based on
the information gathered during the assessments and
discussions with NMED staff,  the assessment forms
have been revised several times.  The  assessments
have been used by the NMED to direct technical
assistance to communities of  concern and determine
sufficient capacity for Drinking Water State Revolving
Loan Fund approval.

The new prioritization process will involve gathering
data from the Safe Drinking Water Information System
(SDWIS), the capacity assessments, and other sources
to determine what systems have a need for funding
and where they should be ranked on the priority list.

The final  component of the project is to train NMED
field staff to oversee the assessment process. The
training will also involve managerial and financial
capacity in general.

STRENGTHENING PUBLIC HEALTH
PROTECTION THROUGH THE MULTIPLE
BARRIER CONCEPT
The NM EFC continued its efforts to assist tribal
water systems in improving public health protection.
The NM EFC frames the assistance in terms of maxi-
mizing the use of each of the barriers—source, treat-
ment, and distribution. Water system managers and
operators need to clearly understand each of these
barriers to prevent contamination from entering the
system or reaching users.

One of the measurements of the overall effectiveness
of the program is the compliance record of the tribal
water systems. The NM EFC and EPA Region 6 devel-
oped a graph that plots the number of Total Coliform
Rule (TCR) violations by month. The number of vio-
lations continues to decrease each year; and
although the summer months show peaks in the
number of violations, these peaks are decreasing
each year. The NM EFC plans to provide assistance
and training to the water systems to continue to
reduce the summer peaks. The graph showing com-
pliance trends for 2000 to 2005 is included in the
section on performance measures.

A summary of the various activities of the NM EFC in
assisting tribal water systems is presented as follows.
Because the tribal assistance is an ongoing, multi-
year project, the activities provided are similar from
year to year.

Compliance Monitoring and Technical Assistance

The NM EFC coordinates the sampling required
under the Safe Drinking Water Act, and also assists
with the development of Consumer Confidence
Reports, Total Coliform Rule compliance and sam-
pling plans, operation and maintenance support,
and troubleshooting.

Managerial and Financial Capacity Building

The NM EFC assists tribes with utility ordinances and
bylaws, rate-setting, and budgeting.

Public Education and Outreach
The NM EFC assists with the development of educa-
tional display boards, brochures, pamphlets, and
handouts. In addition, the NM EFC participates in
community events, such as environmental, health,
and water fairs.
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               ACTIVITIES  &  ACCOMPLISHMENTS
Information Management Activities
The NM EFC gathers information for EPA Region 6
regarding system inventories, new systems, popula-
tions, system classification, and other necessary data.

Under these broad headings, the EFC has provided a
wide array of assistance including developing utility
boards, setting utility rates, developing public educa-
tion campaigns on the need to charge for water,
assisting with sampling and analysis, sharing infor-
mation regarding potential funding sources, provid-
ing training classes, and helping with preparation of
Consumer Confidence Reports (CCRs). A particular
focus of the 2005 program was to reduce the occur-
rences of "summer hits." During the warmer summer
months, the number of total coliform hits generally
increases. The EFC is offering training  and  assistance
to try to reduce these occurrences.

The fact that the compliance situation has improved
dramatically throughout the past five years  has pro-
vided the opportunity to move  the assistance activities
to the next level. The NM EFC has now fully imple-
mented its "beyond compliance" program to  encourage
tribes to make improvements beyond simply doing
the minimum to meet compliance. These efforts are
aimed at optimizing water system operation.
Activities in this area include the following:

Multiple Barrier Evaluations and Associated Training
Multiple Barrier Evaluation training is similar to sani-
tary survey training, but is presented from an opera-
tor focus, rather than a regulatory focus. It  is intend-
ed to present the "big picture"  to operators and to
help them understand the reason why sanitary defi-
ciencies are a problem. In addition to the training,
the NM EFC performs Multiple Barrier Evaluations
(MBEs) on water systems. These MBEs are  voluntary
and identify potential health and safety concerns
with the water systems. A report is presented to the
system staff, describing the potential concerns.
Groundwater Comprehensive Performance Evaluations
Groundwater Comprehensive Performance
Evaluations (CPEs) provide a snapshot of whether a
water system is fully optimized in all three  barriers
(i.e., source, treatment, distribution)  and provides an
indication of what factors are preventing the system
from being fully optimized if it is not meeting all of
the optimization goals. The NM EFC has linked ele-
ments of the groundwater CPE program to  the MBE
activities for a more comprehensive  approach.

Performance-Based Training

For 18 months, the NM EFC worked with Process
Applications, Inc. and EPA Region 6 on Performance-
Based Training (PBT). This training was intended to
provide  water operators with the skills necessary to
conduct water system studies, troubleshoot prob-
lems, collect and analyze water quality  data, and
communicate more effectively with management. Six
pueblos participated in the program. The formal
training  activities were completed in January 2005.
The group decided to continue to meet on a quarter-
ly basis  to share information and work together
informally to solve water system concerns.  Three
quarterly meetings were held in 2005, and these
meetings are anticipated to continue through 2006.

TRIBAL OPERATOR  CERTIFICATION
PROGRAM

In January 2003, the NM  EFC gave its first Region 6
Tribal Water Operators Certification Exam. Since that
time, the EFC has been providing Operator
Certification Exams approximately every quarter (in
some cases additional exams  are given  to meet tribal
operator needs.)  In 2005, 14 operators received certi-
fication  and one operator achieved a Level  3 water
distribution certification, which is the highest distri-
bution category. This program is only open to opera-
tors of tribal drinking water systems in EPA Region 6.

In addition to the Operator Certification Exams, the
Tribal Operator Certification Program includes the
Tribal Utility Advisory Committee and Gap
                            REGION 6 EFC AT THE NEW MEXICO INSTITUTE OF MINING AND TECHNOLOGY

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             ACTIVITIES  &  ACCOMPLISHMENTS
Certification Training, which are described in more
detail as follows:

Tribal Utility Advisory Committee

As part of the initial development of the Operator
Certification Program, the NM EFC formed a Tribal
Utility Advisory Committee (TUAC). Membership was
open to all tribes and pueblos in Region 6. After the
completion and approval of the Operator Certification
Guidelines, the TUAC is now focused on review of
the training program, modifications to the guidelines,
proposals for future activities, and the annual review
of the program.

Gap  Certification Training

The NM EFC provides training opportunities for tribal
water operators to  fill voids or needs that are not
being met by other training providers. The topics for
these classes are suggested by tribal operators
through surveys, based on responses provided on
evaluation forms for other EFC trainings, suggestions
of the TUAC, or based on observed needs. During
2005, the EFC held gap trainings on the Safe
Drinking Water Act Regulations, Disinfection, Arsenic
Rule  compliance, and Multiple Barrier Evaluations
(non-regulatory sanitary surveys).

INDEPENDENT  ANALYSIS OF LEAK
DETECTION TECHNOLOGY FOR
ALBUQUERQUE BERNALILLO COUNTY
WATER UTILITY AUTHORITY

The Albuquerque Bernalillo County Water Utility
Authority received a grant from the Governor's
Innovative Fund to  investigate a proactive leak detec-
tion technology. This technology is being installed and
operated by Fluid Conservation Systems (FCS) Inc., a
manufacturing company that developed and sells the
technology. The approach involves
installing data loggers on top of
meters within the water system. The
data loggers listen for leaks in the
middle of the night to determine if
there is a potential leak in the sys-
tem.  If there is a leak, the units go
into alarm mode. A patroller is used to pick up the
alarm signals at the various units placed within the sys-
tem. A correlator can then be used to determine the
location of the leak within the pipe.

The intent is to capture information regarding leaks
of which the system operations staff might be
unaware. The  theory is that not all leaks will surface;
some leaks will remain below ground level and can
leak for a long time before detection. With a more
proactive approach to leak detection, it is hoped that
more leaks can be found and that the unaccounted
for water losses can be reduced.

The EEC's role in this project is two-fold: 1) to inves-
tigate the  economics of using the FCS technology
within the system to improve overall asset manage-
ment and water conservation in the system, and 2) to
investigate five years worth of leak data (FY 00 to FY
04) to provide a more complete picture of the cur-
rent leak situation within the system. The first por-
tion of this study is similar to work that the EFC did
for the city of Albuquerque when it was investigating
a non-destructive pipe evaluation technology. The
second portion also builds upon previous work of
the EFC when it analyzed five years worth of leak
data and provided a profile of leakage within the
city water system.

This project was initiated in 2004, continued through
2005, and is expected to be completed in late 2006.

FEASIBILITY ANALYSIS OF  WATER
SUPPLY FOR  SMALL PUBLIC  WATER
SYSTEMS

Under a subcontract with Parsons Infrastructure and
Technology Group, Inc., the NM EFC participated in
a project to  identify and analyze alternatives for small
drinking water systems that are not in compliance
with  drinking  water regulations. The NM EFC evalu-
ated the capacity of water systems to determine their
ability to implement compliance alternatives. In addi-
tion,  the NM EFC assisted in the evaluation of the
financial condition of the water systems. This project
built  upon the previous efforts during 2004 and
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               ACTIVITIES &  ACCOMPLISHMENTS
included 15 water systems. This project was complet-
ed between June and August of 2005.

WATER SYSTEM COLLABORATION
PROJECT FOR NEW MEXICO

The NM EFC received a contract from the NM
Department of Finance and Administration, with the
funding from the Office of the State Engineer (OSE),
to work with 10 groups of water systems throughout
the state to determine if these systems would agree
to any type of collaboration. This project is a follow-
on to a project completed the previous year for three
groups of water systems. The NM EFC teamed up
with Rural Community Assistance Corporation
(RCAC) and New Mexico Rural Water Association
(NMRWA) to complete this project.  In addition, sev-
eral state agencies formed a management team to
assist with direction for the project, including the
OSE-Local Government Division, NMED, and the
New Mexico Finance Authority.

The individual make-up of the participants and par-
ticipating water systems in each group varied. In one
case, two groups that were located in somewhat
close geographic proximity agreed to form one larg-
er group, leaving nine groups total. The project used
a facilitated set of meetings to lead the groups
through the following stages:

• Convening. The group will agree that the partici-
  pants reflect the people that need to take part in
  these facilitated meetings in order to develop a
  successful regional water system. If not, others will
  be invited and a second convening meeting will
  be held.

• Learning. The group will agree on ground rules,
  review the existing water delivery system(s), and
  learn about the current context that has conse-
  quences for the development of a regional water
  system. One or more presentations will be  made
  on potential management and facility design
  options. Two meetings will be allocated for
  learning.
• Planning and Choosing. The committee will deter-
  mine the options most acceptable to people once
  they have considered factors such as the history,
  context, and design options. One or two meetings
  will be allocated for planning and choosing.

• Changing. A final meeting will present the final
  option(s) preferred by the group, along with a
  visual report of the process. While all meetings
  will be open to the public, those impacted will be
  especially encouraged to attend this meeting and
  learn what the group is proposing.

Each group was assigned a team including a facilita-
tor and a technical advisor who worked together to
lead the group through the stages.

One goal of the project was to have each regional
entity develop a document that would specify the
nature of the collaboration, including the short-  and
long-term goals of the group. The intent was to have
these  documents structured as some type  of inter-
governmental  agreements so that they were some-
what binding on the groups.

By the end of the project, seven of the nine collabora-
tive groups signed agreements to work together and
had developed a plan for the short- and long-term
needs of the communities. Many of the groups are
currently seeking funding to implement these plans.

ARSENIC RULE COMPLIANCE OUTREACH
EFFORTS FOR NEW MEXICO WATER
SYSTEMS

The NM EFC has been working in a partnership with
Sandia National Laboratory, University of New Mexico,
the Waste Education Research Consortium (a partner-
ship of New Mexico State University, University of
New Mexico, New Mexico Tech, and Dine  College) to
assist water systems that might be impacted by the
new Arsenic Standard, which limits  arsenic concentra-
tions to 10 parts per billion. It is estimated  that 80 to
90 water systems in New Mexico will not meet the
new standard, as nearly half of the potentially affected
systems currently have arsenic levels between 10 and
                           REGION 6 EFC AT THE NEW MEXICO INSTITUTE OF MINING AND TECHNOLOGY

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             ACTIVITIES  &  ACCOMPLISHMENTS
15 parts per billion. Due to sampling and analytical
uncertainties at low levels of arsenic and variations
based on geologic and climatic conditions, it is
unclear how many water systems will ultimately be
required to remove arsenic or provide some other
method of compliance.

The arsenic outreach partnership is providing direct
one-on-one assistance or assistance in regional clus-
ters to water systems that might be impacted by the
arsenic standard. The assistance will include free
arsenic testing by Sandia Labs, assistance with compli-
ance options, and information regarding appropriate
funding sources. Thus far, the NM EFC has assisted
approximately eight non-tribal and 10 tribal water sys-
tems with arsenic-related concerns.

NEW MEXICO  FINANCE AUTHORITY
ENGINEERING AND ENVIRONMENTAL
ASSISTANCE

In July 2005, the NM EFC began a project with the
New Mexico Finance Authority (NMFA) to assist with
engineering and environmental reviews. Drinking
Water State Revolving Fund (DWSRF) applicants are
required to submit various documents to receive
funding, including an Environmental Information
Document (EID) and a Preliminary Engineering
Report (PER). One of the tasks of the NMFA, as the
administrator of the funds, is to ensure that these
documents meet all the funding criteria and that the
EID complies with the State's Environmental Review
Process (SERP).

One of the difficulties the NMFA has had regarding
environmental documents was related to difficulties
interpreting the SERP. To resolve this issue, the NM
EFC worked with  EPA  Region 6 and NMFA to  devel-
op a revised SERP to clarify the requirements and
streamline the review process.

The NM EFC also reviewed environmental docu-
ments from water systems and provided guidance for
water systems seeking DWSRF funds.
ARSENIC PILOT PROJECT
The NM EFC worked with a tribal water system to
evaluate a new method of arsenic removal. This system
was installed in the summer of 2005. Initial sampling
and analysis showed that the system was not effec-
tively removing arsenic from the raw water. The
equipment supplier reformulated the media, and the
test was restarted in the fall of 2005. The sampling
after this reformulation also showed disappointing
results and the pilot was concluded in December
2005. This method of arsenic removal is currently
being tested at another site in southern New Mexico.
The results of that testing will be compared to the
results of this pilot.


New  Projects & Initiatives

The new initiatives for the NM EFC are highlighted
as follows. These initiatives build upon the work
efforts of the NM EFC for the past several years.

ADVANCED ASSET MANAGEMENT -
PHASE  II
In 2005, the NM EFC embarked  on  a new initiative to
assist with the promotion and implementation of
advanced asset management for smaller water sys-
tems, as discussed previously in the section titled,
"Capacity Development for Region 6 States." This
effort is considered to be a long-term, multi-phased
program. Phase I was started in FY 06 and will con-
tinue until early FY 07. In  FY 07, the NM EFC  will
begin Phase II of this program, which includes work-
ing with a few water systems in Region 6 to develop
an Asset Management Plan and to test the Advanced
Asset Management approach developed in Phase  I.

USDA TECHNICAL ASSISTANCE AND
TRAINING GRANT
Tribal communities often do not  have established rate
schedules to require residents to pay for water and
wastewater services. In other cases, a rate structure is
established, but it is either not adequate to cover the
actual costs of operation or residents are unwilling to
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               ACTIVITIES  &  ACCOMPLISHMENTS
pay the rates, or both. This situation means that tribal
water and wastewater utilities do not function, in gen-
eral, as enterprise operations. Many tribal water and
wastewater utilities in New Mexico have expressed an
interest in setting rates that cover the cost of service
and have described frustration with their inability to
collect rates if they do enact a rate schedule. In the
past, assistance has been provided to tribal communi-
ties by several organizations to help them develop an
adequate schedule, but to  date these efforts have
been largely unsuccessful.

Some of the issues regarding why rates are not effec-
tively collected  are deeply cultural and specific to
tribal communities. The difference in tribal social
structures might explain the failure of so many dis-
tinct attempts to institute rates in tribal communities.
All of these efforts relied on proven techniques that
have worked in non-tribal communities and did not
fully consider the specific  cultural differences that
prevented success. Unless an effort is made to
understand and embrace the culture of these  com-
munities and devise a solution that would be accept-
able to the community,  a system of rates will  never
be established that can  be effectively implemented.

The NM EFC is  submitting a proposal to the U.S.
Department of Agriculture to use a process of com-
munity collaborative learning to address this issue in
a site-specific way.
REGIONALIZATION/COLLABORATION
EFFORTS IN  NEW MEXICO

The NM EFC has been working with the New Mexico
Office of the State Engineer (OSE) for the past two
years on a project to promote regional collaboration
between water and wastewater utilities. The OSE
would like to expand this effort to additional commu-
nities and additional services in the next year.

PILOT PROJECT TO PROMOTE ASSET
MANAGEMENT, WATER AUDITS, AND
FINANCIAL PLANNING
The NM EFC will be working in partnership with the
New Mexico Rural Water Association  (NMRWA) and
the Rural Community Assistance Corporation (RCAC)
to pilot three programs in small community water
systems—asset management, water auditing, and
financial planning. The pilot projects will help
demonstrate the value from these types of approach-
es in terms of system improvements. Another goal of
the pilot projects is to assess the feasibility of fund-
ing agencies using these tools to help ensure that
their investments are operated and maintained in the
best possible way. This project will be completed
under a grant from OSE.

CLEAN AIR  INVESTMENT FUND
The NM EFC worked in collaboration with the EFC
in Region 9 to complete a procedures document to
establish a Clean Air Investment Fund (CAIF) in the
El Paso/Juarez/Dona Ana County air shed. The proj-
ect determined that at the time of completion
(December 2002) there was not a need for the fund
in terms of a regulatory relief valve mechanism (i.e.,
addressing high  compliance costs). However, the
CAIF has remained in the attention of the Clean Air
Act Advisory Committee, and discussions have been
reestablished to see if the fund can be used for other
non-regulatory purposes, such as voluntary compli-
ance, voluntary supplemental environmental projects,
additional monitoring, research, and others. The NM
EFC might work on this project if interest continues.
                           REGION 6 EFC AT THE NEW MEXICO INSTITUTE OF MINING AND TECHNOLOGY

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             ACTIVITIES  &  ACCOMPLISHMENTS
EFC NETWORK COLLABORATIONS

The NM EFC has collaborated with other EFCs this
past year on a variety of projects and efforts:

• Clean Air Investment Fund, including the NM EFC
  (leader) and EFC9.

• Resource Based Source Water Protection
  Collaborative Efforts with EPA Office of Ground
  Water and Drinking Water, with the NM EFC,
  Syracuse EFC, Maryland EFC, Boise State EFC, and
  UNC EFC.

• Rate-Setting, with Syracuse EFC and Maryland EFC.

CONFERENCES

• Made presentation at workshop at the Arsenic
  Treatment Technologies for Small Water Systems,
  Indian Health Service, January 6, 2005,
  Albuquerque, New Mexico.

• Participated in workshop at the Professional
  Training Techniques, Indian Health Services,
  January 11-13, 2005, Albuquerque, New Mexico.

• Participated in workshop at the Association of
  Boards of Certification Annual  Conference, January
  25-27, 2005, New Orleans, Louisiana.

• Participated in the Sandia National Labs Arsenic
  Workshop, January 28, 2005, Jemez Pueblo, New
  Mexico.

• Participated in the Amigos Bravos Clean Water Act,
  Clean Water Workshop, January 29, 2005, Taos,
  New Mexico.

• Participated in the Environmental Financial
  Advisory Board Meeting, March 15-16, 2005,
  Washington, D.C.

• Participated in the Environmental Finance Center
  Network Directors Meeting, March 17, 2005,
  Washington, D.C.
Participated in Tribal Roundtable at the New
Mexico Rural Water Association Annual
Conference, March 21, 2005, Albuquerque,
New Mexico.

Attended EPA webcast "TCR Implementation
Issues," March 23, 2005.

Participated in National Tribal Environmental
Council "Emergency Response  Planning and
Preparedness" workshop, April 6-7, 2005,
Albuquerque, New Mexico.

Delivered presentation and participated in IHS
Annual Workshop, April 12-13, 2005, Durango,
Colorado.

Delivered presentation and participated in Regions
6 and 8 Capacity Development Workshop, April
19-21, 2005, Dallas, Texas.

Attended EPA webcast "Stage 1 Disinfectant and
Disinfection By-Products Rule," April 27, 2005.

Participated in Asset Management Workshop, May
5-6, 2005, Washington, D.C.

Participated in Area-Wide Optimization Meeting -
Region 6, May 11-12, 2005, Albuquerque, New
Mexico.

Participated in New Mexico Water and Wastewater
Association  Northern Short School workshop, May
16, 2005, Taos, New Mexico.
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              ACTIVITIES  &  ACCOMPLISHMENTS
• Attended EPA webcast "Consumer Confidence
  Reports," May 25, 2005.

• Delivered presentation and participated in Regions
  5, 7, 9, 10 Capacity Development Workshop, July
  28, 2005, Portland, Oregon.

• Participated in Environmental Financial Advisory
  Board Meeting, August 15-16, 2005, San Francisco,
  California.

• Participated in workshop of the New Mexico
  Water Research Symposium, New Mexico Water
  Resources Research Institute, August 16, 2005,
  Albuquerque, New Mexico.

• Made presentation and participated in Regions 1,
  2, 3, and 4 Capacity Development Workshop,
  August 30-31, 2005, Atlanta, Georgia.

• Participated in Rural Community Assistance
  Corporation Management Workshop, September 7,
  2005, Zia Pueblo, New Mexico.

• Made presentation and participated in workshop
  at the American Water Works Association, Rocky
  Mountain Section, Annual Conference, September
  27-28, 2005 Albuquerque, New Mexico.

• Participated in workshop at the Third Annual
  Drought Summit, October 6, 2005, Albuquerque,
  New Mexico.
Made presentation and participated in New
Mexico Infrastructure Financing Workshop,
October 25-27, 2005, Albuquerque, New Mexico.

Made presentation and participated in Association
of Drinking Water Administrators Annual Confer-
ence, October 18-20, 2005, St. Louis, Missouri.

Made presentation and participated in
State/Tribal/EPA Ground Water/Source Water
Protection  Representatives Meeting, November
1-3, 2005, Acoma Pueblo, New Mexico.

Made presentation and participated in Clean Air
Act Advisory Committee Meeting and Subcommittee
Meeting on Economic Incentives and Regulatory
Innovations, November 16-17, 2005, El Paso, Texas.

Made presentation and participated in
WERC/Sandia National Labs Arsenic Workshop,
December  8, 2005, Santa Fe, New Mexico.

Made presentation and participated in
WERC/Sandia National Labs Arsenic Workshop,
December  9, 2005, Jemez Pueblo, New Mexico.

                  Contact
 Heather Himmelberger, EEC Director
 Phone: (505) 272-7357
 E-mail: heatherh@efc.nmt.edu
  Participated in the Waste-Management Education &
  Research Consortium (WERC) Sandia National Labs
  Arsenic Workshop, October 11, 2005,
  Albuquerque, New Mexico.
                          REGION 6 EFC AT THE NEW MEXICO INSTITUTE OF MINING AND TECHNOLOGY

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                                             PERFORMANCE   MEASURES
Outcomes

As a result of the activities and accomplishments out-
lined in the previous section, outcomes have includ-
ed the following:

• Nearly every client with which the NM EFC has
  worked has come back to the NM EFC for an
  additional or follow-up project.

• Representatives from water systems from 20 of the
  21 EPA Region 6 tribes located in New Mexico
  attended training events.

• Compliance with the Total Coliform Rule, one of
  the most critical requirements of the Safe Drinking
  Water Act, has greatly increased throughout the
  years. Part of this improved compliance is a direct
  result of a major initiative on the part  of the NM
  EFC to educate tribal water system personnel on
  the requirements of the rule and to provide direct
  one-on-one assistance to water systems to ensure
  they meet the requirements.
 o
 O 4.
              New Mexico Tribal Public
           Water System Compliance Trend
               July 2001 -July 2005
                                      in ifim
                                      IIPIMIIIIIL
                                      I vllll (El'lf
                            § §
  The tribal population served by Region 6 tribal
  community drinking water systems meet all health-
  based standards. Currently, 90.4 percent of the
  population is served by compliant water systems,
  and the work of the NM EFC has contributed to
  the dramatic increase in compliance since 2001.
  Seven of nine groups of water systems signed col-
  laborative agreements. The NM EFC worked with
  the New Mexico Rural Water Association and Rural
  Community Assistance Corporation to assist
  regional collaborative groups in developing and
  signing a document formalizing the  collaborative
  working relationship.
Population Served by R6 Tribal Community DWS's Meeting
All Health Based Standards




50.00% •
40.00% •
30.00% •
20.00% •
10.00%-











FY01









FY02










FY03









FY04











FY05





















FY08
Impacts
Specific environmental issues addressed through the
EFC's 2005 activities and accomplishments include:

• Drinking water

• Drought management

• Clean air
                                            ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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                                                    EF@N
                                                    environmental finance center network
                 Region 9 Environmental Finance Center

                 AT CALIFORNIA STATE UNIVERSITY,
                 EAST BAY
                            NV
                      CA
                                 AZ
                   In This Report

                   Background & Summary	96

                   Activities & Accomplishments	97

                   Performance Measures	105
fei.T-5.*,

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                                            BACKGROUND  &  SUMMARY
       The U.S. Environmental Protection Agency's (EPA's)
       Region 9 Environmental Finance Center
       (known as EFC9) is a university-based EEC
affiliated with California State University, East Bay,
working for greener communities through cleaner
business, by promoting pollution prevention, source
reduction and energy conservation. EFC9 serves the
EPA Region 9 states of California, Nevada, Arizona,
and Hawaii, and the tribal lands and trust territories of
Guam and American Samoa, and is the  only EPA EFC
dedicated to resolving environmental issues in the pri-
vate sector.

EFC9's mission is to: 1) encourage business to under-
take source reduction, pollution prevention, and
energy conservation, 2) educate and encourage con-
sumers to  choose green business products and serv-
ices, and 3) help communities promote cleaner busi-
ness. Working with both the private and public sec-
tors, EFC9 pursues its mission through numerous
tools, including environmental facilitation and media-
tion; green business program development; innova-
tive finance program development; business incuba-
tor development; and conferences, workshops, and
roundtables.

The major focus of EFC9's work during FY 2005 was
                                                  REGION 9
           NV
     CA
                 AZ
                                         HI
to build on experience working with industry and
small businesses. For example, the EFC continued its
efforts to promote, develop, and institutionalize pollu-
tion prevention and resource conservation in regional
businesses as part of the Green Business Program.
Among its business-related projects, EFC9 continued
its efforts with the Regional Green Business Program,
the Western Regional Pollution Prevention Network,
and a new project, called ACT Environmentally, which
encourages the placement of environmentally benefi-
cial products and behaviors on television  and in
movies. EFC9 also embarked upon three new projects
that focus on the harmful chemicals used in the hair
and nail salon industry, as well as efforts to promote a
cohesive California chemicals policy, and California
environmental incubators.
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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed Projects & Initiatives

NETWORK COORDINATION AND
PARTNERSHIPS

EFC9 continues coordination and outreach activities
with other EFCs, the Environmental Financial
Advisory Board (EFAB), and EPA. The EEC Network
and EFAB have become an  extension of EFC9's capa-
bilities, contributing valuable insight into numerous
environmental and financial issues and providing
new work and investigation opportunities for EFC9.
As an  expert witness to the  EFAB, EFC9 participates
in two EFAB workgroups. The first workgroup exam-
ines the financial assurance  for the long-term envi-
ronmental health of a company and the land it occu-
pies. EFC9 is working with a number of EFAB mem-
bers as well as the Kentucky EFC on this project.
The second  workgroup examines the financial value
of developing a corporate environmental manage-
ment system (EMS). Both EFC9 and the Syracuse
EFC are participating in this workgroup.

As the current network president, the EFC9 director
maintains constant contact with all EFCs. In addition,
the EFC9 director maintains an ongoing relationship
with the other network officers, specifically the direc-
tors of the EFCs in Maine and North Carolina, which
currently hold the vice president and secretary posi-
tions. The network officers work together to develop
agendas, plan presentations, and make arrangements
for the EFC network's biannual meetings. In addition,
network officers plan presentations for the biannual
EFAB meetings and update  the EFAB on the status of
each workgroup.

ACT ENVIRONMENTALLY:
ENVIRONMENTALLY BENEFICIAL
BEHAVIOR PLACEMENT IN TELEVISION

In 2004/2005, EFC9 proposed to adopt the private
sector concept of "product placement" to encourage
placing environmentally beneficial products and
 In 2005, EFC9...
    Engaged in one progressive new project
    idea.
 + Engaged in a dozen activities supporting
    Green Business Programs.
    Attended, participated in, or presented at
    10 meetings and conferences.
behaviors on television shows. Possible examples
included having actors bring cloth bags to the gro-
cery store, recycle soda cans, use worm bins, and
consider how to properly dispose of a computer
monitor or other electronic waste.

In consultation with EPA, EFC9 gathered and evaluat-
ed information regarding the placement of environ-
mentally beneficial behavior in television shows.
Through informal  meetings with targeted groups,
EFC9 determined certain environmentally beneficial
behaviors on which to focus. EFC9 identified target
markets, including specific groups within the mar-
kets, and determined which groups would be most
receptive to  each message. Finally, EFC9 identified
target shows, television stations,  and/or studios
receptive to  the environmentally beneficial behavior
placement concept and determined which would
most effectively reach the target  markets.
                                                REGION 9 EFC AT CALIFORNIA STATE UNIVERSITY
                                                                                           97

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             ACTIVITIES  & ACCOMPLISHMENTS
In consultation with EPA, EFC9 created a list of eight
to 10 best potential environmentally beneficial
behavior messages. EFC9 also developed methods to
measure the success of environmentally beneficial
behavior message placement, including tracking
numbers of viewers for each show. An early achieve-
ment was the placement of pollution prevention
posters in the Coast Guard background scenes in the
film, "Yours, Mine and Ours."

Throughout 2005, EFC9 continued to contact and
work with shows, studios, and industry personnel on
environmentally beneficial behavior and product
placement. To date, EFC9 has succeeded in contact-
ing  every show it identified, and every producer has
been interested in the idea, which is called ACT
Environmentally.  As a result, EFC9 has become more
strategic about what and how many shows it con-
tacts because each production has its own set of
requests in response to ACT Environmentally. In
follow-up tasks to the EFC's initial efforts, EFC9
has  accomplished the following:

• In June 2005, EFC9 held an industry roundtable
  with individuals who have worked in television
  and movie production and product placement to
  solicit their feedback on EFC9's efforts and suggest
  other ways to green the industry.

• Via  e-mail, phone calls, and several in person
  meetings, EFC9 staff worked with the executive
  producer of a new HBO series, "Lucky Louie," that
  aired January 2006.

• EFC9 staff attended the Set  Decorators Society of
  America Marketplace to inform set decorators
  about this project.

• EFC9 staff met and held conference calls with
  Disney staff to explore the feasibility of introduc-
  ing the ACT Environmentally concept to the
  Disney Corporation.

• EFC9 has developed a growing portfolio of prod-
  ucts for placement.
• EFC9 provided information on green landscapers
  to "Landscape Smart," an HDTV program that
  showcases landscape redesign.

• EFC9 provided targeted suggestions on green
  products and behaviors to a new HBO series,
  "Lucky Louie" that aired January 2006.

• EFC9 developed and shared environmental behav-
  iors suitable to specific ABC shows and characters
  within those shows.

• EFC9 developed a pro bono partnership with a
  product placement expert in Los Angeles.

As a result of the EFC's work in 2005, EFC9 expects
to develop a partnership with the Disney
Environmentality Division to introduce ACT
Environmentally to the Disney television fall shows,
which run on the ABC, Disney Channel, ESPN, and
ABC Family networks. EFC9 is working with set dec-
orators from the hospital-based shows on the three
major  networks (ABC, NBC, and CBS) and will have
environmental posters and products placed in the
2006 fall season.
WESTERN REGIONAL POLLUTION
NETWORK (WRPPN) SESSION
DEVELOPMENT
EFC9 worked with the Western Regional Pollution
Network (WRPPN), headquartered in Reno, Nevada.
The WRPPN is a strategic alliance involving local,
state, federal, and tribal pollution prevention
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               ACTIVITIES  &  ACCOMPLISHMENTS
programs throughout EPA Region 9. WRPPN was
established in 1997 by EPA to improve communica-
tion and spread useful information among network
members to increase the efficiency of pollution pre-
vention implementation. As a member of the WRPPN
Steering Committee, EFC9 helps determine the net-
work's annual direction and develops and facilitates
several sessions at the annual conference. For the
September 2005 WRPPN Conference, EFC9 devel-
oped and led sessions on chemical legislation and
policy in the United States and  abroad, emerging
pollutants, and the Green Business Program's rela-
tionship to state and federal agencies.

GREEN BUSINESS  PROGRAM (GBP)
COORDINATION

Supported by EPA funding, EFC9  continued its role
as the Western Regional Green  Business  Program
Coordinator to promote, develop, and institutionalize
multimedia pollution prevention and resource con-
servation in Region  9 businesses,  while ensuring
consistent growth and continuity for  regional green
business programs. Specifically, EFC9 worked in part-
nership with San Francisco and Sacramento counties,
as well as the Bay Area Green Business Program,
CalEPA, and EPA to  achieve the following tasks:

• Facilitated development of statewide GBP network.

• Provided grant opportunities  for start-up GBPs that
  agreed to accept Bay Area Green Business stan-
  dards as a baseline.

• Assisted start-up GBPs in San Francisco and
  Sacramento to help launch their programs.

• Provided basic information and presentations on
  the GBP throughout the region, including the
  annual WRPPN conference.

• Helped new and existing GBPs identify, establish,
  and expand partnerships with key  agencies and
  organizations.

• Supplied technical assistance  to all GBPs.
 • Helped create industry-specific beyond compliance
  checklists.

 • Hosted a GBP resource Web site.

 • Sought broad support at the state and national
  level for the expansion of the GBP concept.

Promoting and Coordinating Green Business
Programs State- and Regionwide
EFC9 provided basic information and presentations
on the GBP throughout the region with presentations
at the annual  WRPPN conference. EFC9 developed a
standard presentation that promotes the GBP con-
cept generally, but also identifies Bay Area GBP stan-
dards as the guideline and baseline from which all
new GBPs will be expected to develop. In return for
accepting Bay Area GBP standards, emerging GBPs
will benefit from partnering with EFC9  and other
Region 9 GBPs. EFC9 staff have also assisted com-
munities interested in developing their  own program
by providing CDs with GBP overview, Green
Government Pledge, and checklists to more than 25
different agencies.

In addition, EFC9 facilitated GBP events at the annu-
al WRPPN conference and continued to coordinate
all GBP efforts throughout the region. EFC9 contin-
ued to maintain and update the GBP resource Web
site, including its Green Business Recognition
Program Clearinghouse, which includes program
descriptions and guidance, checklists, and links to
technical and  other resources.

Assisting New and Existing Green Business
Programs
EFC9 helped new and existing  GBPs identify, establish,
and expand partnerships with key agencies and public,
private, and nonprofit organizations. Examples of part-
ners include state and local regulatory agencies, small
business assistance programs such as the Green Team
and Greening  Southeast Asian Restaurants, appropriate
trade associations, and the Department of Toxic
Substances Control's "model shops" program.
                                                  REGION 9 EFC AT CALIFORNIA STATE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
EFC9 also supplied technical assistance to all GBPs,
when requested. When necessary, EFC9 worked with
emerging GBPs to help them identify their needs.
EFC9 has identified strong interest in developing a
GBP by Ventura County and the city of Santa Monica
and moderate interest by Fresno, Humboldt, Madera,
and San Benito counties as well as the cities of Los
Angles and Torrence.

Developing a Regional Approach to Green Business

As of October 2005, there were 11 GBPs in Region 9,
with 758 businesses and 49 government agencies
verified as green. As the number of GBPs continues
to grow, these programs need to be coordinated so
that the GBP certification will not be diluted.
Coordination is the first step toward developing a
Region 9 GBP in which all local coordinators will be
working under the same guidelines and standards,
toward the same end, and under the same logo. To
that end, EFC9 organized and facilitated two GBP
summits, a follow-up session at the annual WRPPN
conference, as well as numerous conference calls
and e-mail communications among all GBP coordi-
nators in the region to identify their needs, desires,
and concerns regarding regional coordination.

First Summit: EFC9 organized and facilitated an all-day
Green Business Program Summit in Oakland, California,
on April 25, 2005, attended by GBP coordinators
from all nine active GBPs in California. Attendees
agreed on the value of developing a statewide program
and identified and agreed on key elements common to
all GBPs. With assistance from EFC9, attendees pre-
pared a draft mission statement, which served as the
starting point for further discussion later in the year.

Other summit issues  included possible administrative
structures for the statewide organization, as well as the
decision-making process (one program, one vote was
the consensus). The summit concluded with an identi-
fication of next steps including electing how to address
relationships with regional, state, and federal agencies;
checklist development and coordination; organizational
structure; key elements shared by all programs; and
organizational purpose. Attendees signed up to
participate in subcommittees addressing each of these
issues. Following up on the summit, EFC9 organized
statewide conference calls and coordinated e-mail
communication by the subcommittee participants.

WRPPN Session: At the annual WRPPN Conference,
EFC9 facilitated a dialogue among the GBP
Coordinators in California, focusing on the most criti-
cal issues identified at the summit. Topics included
GBP relationships with federal and state agencies,
how to respond to emerging programs, and the defi-
nition and key elements of a GBP. After considerable
revisions, attendees agreed that to be a GBP, a pro-
gram must agree to the following:

Element 1: The GBP is a "beyond compliance" program.
A business cannot become a "green business" unless it
is in compliance with environmental protection laws
and regulations and has completed a minimum number
of "beyond compliance" measures toward pollution pre-
vention, waste reduction, and resource conservation.

Element 2: Verification of environmental regulatory
compliance as well as "beyond compliance" perform-
ance is required by the GBP.

Element 3: After a pre-determined number of years,
all participating businesses must undergo  a renewal
and verification process in order to continue their
green business status.

Element 4: The network is committed to measuring
the success of the program.

Element 5: The GBP is a voluntary program, free to
participating businesses. There is no cost to  become
a green business.

In addition, attendees spent considerable time devel-
oping the California Green Business Program
Network Operating Guidelines, which lay out the
organizational mission, goals, membership, and oper-
ation of the network. This document was  further
refined during e-mail communication and conference
calls following the conference.
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               ACTIVITIES  &  ACCOMPLISHMENTS
Finally, the WRPPN session concluded with identify-
ing further issues to resolve, including: developing a
logo, identifying how to work together to insure
consistent checklists, sharing communication/infor-
mation, and measuring program success.

Conference Calls: EFC9 set up and facilitated five
conference calls among the GBP coordinators to
address checklists, measurement, and communica-
tion/information-sharing.

Second Summit: EFC9 is planning a second summit
to allow GBP coordinators to meet in person and
resolve any of the critical outstanding issues in
January 2006.

Providing Funding Opportunities for Emerging
Programs

EFC9 assisted the start-up of new GBPs by providing
grant opportunities. To support and guide the order-
ly growth of new GBPs, a major portion of this grant
was committed to two emerging programs: San
Francisco and Sacramento counties.

To participate, each new GBP agreed to adopt Bay
Area Green Business Program standards and to work
with other GBP coordinators throughout the state
and region to ensure continuity and harmony.

A grant to the San Francisco Occupational  and
Environmental Health Section  (OEHS)  of the San
Francisco Department of Public Health (DPH)
allowed OEHS to expand the DPH Clean and Green
Program to a variety of industry types  and to
become the foundation for the San Francisco Green
Business Program. The San Francisco Green Business
Program partnered with available staff at the San
Francisco Department of Environment, San Francisco
Public Utilities Commission (PUC) and Pacific Gas
and Electric (PG&E) to assist businesses with onsite
audits and consultations, as well as answer questions
and provide information on the latest techniques and
alternative technologies available to that business
type. The program is focusing the automotive repair
sector, hotels, printers, marine repair, and hospitals.

The grant to the Business Environmental Resource
Center (BERG), a unit of the Sacramento County
Economic Development Department, allowed it to
establish the Sacramento Green Business Recognition
Program (SGBRP), a pilot GBP within Sacramento
County (including the incorporated cities of
Sacramento, Elk Grove, Gait, Isleton, Rancho
Cordova, and Citrus Heights) and supported a
regional Pollution Prevention Roundtable to serve
the counties of Sacramento, El Dorado, Placer, Sutler,
Solano, and Yolo. The pilot SGBRP focused first on
automotive service operations and, secondly, on
mobile contractors including carpet cleaners, land-
scapers, and power washers.

Program partners include:

• Sacramento County Environmental  Management
  Department (EMD) (the local California designated
  Certified Unified Program Agency)

• Sacramento Metropolitan Air Quality Management
  District

• Sacramento County Department of Water
  Resources

• Sacramento Regional County Sanitation District

• Sacramento County Department of Water Quality

• Sacramento County Planning and Community
  Development Department
                                                  REGION 9 EFC AT CALIFORNIA STATE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
• Sacramento County Building Inspection Division

• Sacramento Regional Solid Waste Authority

• City of Sacramento Department of Utilities - Storm
  Water Program

• Sacramento Municipal Utility District

PRESENTATIONS/CONFERENCES

EFC9 staff attended and participated in a wide vari-
ety of meetings and conferences in 2005, including
the following:

• EFC directors' meeting in Washington, D.C. (March)
  and San Francisco (August).

• Annual Western Regional Pollution Prevention
  Network (WRPPN) conference in Lake Tahoe in
  September 2005 (as steering committee member).

• Golden Gate Pollution Prevention Committee (as
  co-chair: planned, attended, and recorded minutes).

• California Resource Recovery Association's Annual
  Meeting.

• Women's Foundation of California Environmental
  Health Summit titled, "In the Shadow of Pollution."

• Planned, attended, and participated in a United
  Nations World Environment Day session entitled
  "Protecting Environmental Health for the Long-
  Term: Models for Comprehensive Change," held in
  San Francisco.
• 2005 Regional Children's Environmental Health
  Summit in Helena, Montana.

• San Francisco Green Festival, in conjunction with
  the Bay Area Green Business Program.

• Green Business Program Development in Seattle;
  presented to participants from the states of Idaho,
  Oregon, Alaska, and Washington.

• Walt Disney Corporation Environmentality
  Program; met in June 2005, to develop a partnership
  based on  the EFC9 project ACT Environmentally.

WEB  SITE UPDATE
EFC9 moved its Web site to a new URL,
, and updated material and the pres-
entation of the site to ensure that all reports and
available information are current.


New Programs & Initiatives

Toxics AND HAIR AND  NAIL SALONS

EFC9 is laying the groundwork for planning a multi-
stakeholder roundtable to address the hair and nail
salon industry.  Recent studies have found that the pres-
ence of chemicals in hair and nail products can
adversely affect human health and the environment.
For example, phthalates, which are found in many
leading beauty care products, including hair spray and
nail polish, can damage the liver, kidneys, lungs, and
reproductive system. Sodium lauryl sulfate (SLS) and
sodium laureth sulfate (SLES), widely used in hair con-
ditioner and about 90 percent of all shampoos and
products that foam, have been found to cause eye
damage and skin inflammation and can weaken the
immune system. Some studies suggest that hair relaxers
might be connected to early onset of puberty, especial-
ly in African-American children. In addition, numerous
studies have indicated that salon workers have a higher
rate of several different types of cancer, including pan-
creas, cervix, lung, and breast. Since they are virtually
unregulated, the environmental impact of products
used in salons  is currently unknown.
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               ACTIVITIES  &  ACCOMPLISHMENTS
As a result of these problems, EFC9 began the
process of identifying and coordinating stakeholders
to attend a salon roundtable meeting. The primary
purpose of the meeting will be to facilitate an open
exchange of information on the use and potential
environmental and human health impacts of current
salon products and practices and their alternatives.
Meetings will also cover motivational impulses that
influence product choices. The meeting will also
seek to identify a set of information gaps and follow-
up steps (including research needed) to be under-
taken by some of the stakeholders.

To prepare for the upcoming roundtable meeting,
EFC9 has been participating in meetings and confer-
ence calls of the California Healthy Nail Salon
Workgroup as well as the national Healthy Nails
Network Listserv, which was an outgrowth of the
session EFC9 organized on Nail Salons for the 2004
WRPPN Conference.  In addition, to educate EPA staff
in Region 9, EFC9 organized and facilitated a presen-
tation by Dr. Devra Davis, director of the Center for
Environmental  Oncology at the University of
Pittsburgh. Finally, EFC9 attended meetings with EPA
staff from Region 9 to begin the process of develop-
ing a roundtable partners list and identifying target
ingredients and practices.

CALIFORNIA CHEMICALS POLICY

In partnership with EPA, the Women's Environmental
Leadership Network (WELN), Commonweal, the
Gellert Foundation, the Marisla Foundation, and
California Assemblywoman Wilma Chan's office,
EFC9 will hold an educational roundtable on the
possibility of developing a state-based chemical poli-
cy. As Europe comes closer to establishing a new,
more comprehensive policy regarding chemicals,
state industries and communities are wondering
what it will mean to California. California citizens
and companies are growing wary of the "single
chemical" approach to regulating chemicals and
wonder if there is a better and more proactive way
to determine which chemicals are safe and how they
should be regulated. The California legislature typi-
cally sees at least 10 bills per session devoted to
individual chemicals and chemical  uses. This
approach is time-consuming, confusing, and damag-
ing to industry, nonprofit organizations, government,
and the general public. As a result, EFC9 has been
asked to explore the possibility and ramifications,
good and bad, of a California Chemical Policy.

In March 2006, EFC9 will plan and co-host a
California Chemical Policy Symposium to educate
attendees on current policy as well as potential
options for the state. The one-and-a-half day sympo-
sium will be held in downtown Oakland and will
include panel sessions and a stakeholder roundtable.

To prepare for the upcoming symposium, EFC9 has
attended 10 planning meetings with partners  and
additional stakeholders, including representatives
from University of California-Berkeley, the offices of
California Assemblywoman Fran Pavley and
California Assembly Speaker Fabian Nunez, and
numerous environmental justice advocates in
California. The group developed the symposium
attendee list, speaker list, and agenda. They also
secured initial symposium speakers, including repre-
sentatives from the California State Assembly, the
European Union, and industry.

CALIFORNIA ENVIRONMENTAL
INCUBATORS

More than 10 years after EFC9 was founded, the
California Environmental Incubator project was
established to revisit EFC9's roots and determine the
status  and success of environmental incubators in
                                                  REGION 9 EFC AT CALIFORNIA STATE UNIVERSITY

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            ACTIVITIES  &  ACCOMPLISHMENTS
California. The original mandate for EFC9 was to
help promote and finance new and innovative envi-
ronmental technologies. In response, EFC9 planned,
developed, and launched an environmental small
business incubator, the Alameda Center for
Environmental Technologies (ACET), to house and
foster start-up environmental companies. Opened in
1995, ACET was one of six existing or planned envi-
ronmental incubators in the state and was  heralded
as one of the most promising efforts to promote new
environmental technologies. In 2005, ACET was
renamed Advancing California's Emerging
Technologies and houses both environmental and
biotechnical companies

The California Environmental Incubator project
determined the status and success of environmental
incubators in California. It also determined why some
incubators succeeded while others failed, and provided
closure to an effort that has been included in EFC9's
task plan since its inception. In general, only one incu-
bator has survived while the others, hampered by their
narrow focus, were not sustainable over the long term
and were forced to close their doors.

                   Contact
4 Sarah Diefendorf, EEC Director
  Phone: (415) 346-3323
  Cell: (415) 999-6978
  E-mail: sdief@aol.com
                                           ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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PERFORMANCE  MEASURES
   Outcomes
Impacts
   As a result of the activities and accomplishments out-  In 2005, EFC9 continued its mission to encourage
   lined in the previous section, outcomes have includ-
   ed the following:

   • Raised awareness of environmentally beneficial
     behaviors by marketing the placement of them in
     television and movies.

   • Increased awareness and fostered networking to
     facilitate the development of and continue the
     effectiveness of regional Green Business Programs.

   • Increased awareness of the health and environ-
     mental impacts of hair and nail products.

   • Increased awareness of the "single chemical"
     approach to regulating chemicals and possibility of
     a California Chemical Policy.
businesses to undertake source reduction, pollution
prevention, and energy conservation. It continued to
educate and encourage consumers to choose green
products and services. Specific environmental issues
addressed through EFC9's activities and accomplish-
ments include the following:

• Environmental Management Systems

• Pollution prevention

• Resource conservation

• Green products

• Environmental behaviors

• Chemical policies
                                                  REGION 9 EFC AT CALIFORNIA STATE UNIVERSITY

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Environmental Finance Center
     Boise State University
EF@N
environmental finance center network


                   Region 10 Environmental Finance Center
                   AT BOISE STATE UNIVERSITY

                     In This Report




                     Background & Summary	108



                     Activities & Accomplishments	109



                     Performance Measures..                       ..122

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                                             BACKGROUND  &  SUMMARY
       The mission of the Environmental Finance
       Center at Boise State University (Boise State
       EFC) is to help communities with issues sur-
rounding "how to pay" for environmental protection.
The primary focus of the Boise State EFC is the devel-
opment of broadly applicable, practical tools that
improve the efficiency and effectiveness of environ-
mental systems in meeting the challenges of protect-
ing the environment and public health.

The Boise State EFC serves the U.S.  Environmental
Protection Agency (EPA) Region 10 states of Alaska,
Idaho, Oregon, and Washington. In addition to Region
10 states, this EFC has been called upon to provide its
specialized services and tools in other areas through-
out the country.

The Boise State EFC creates computer-based tools that
provide important information for decision-makers to
use in financing environmental systems. Among the
financial outreach methods developed by the EFC are
intensive training programs and workshops concen-
trating on  computer  programs for utility rate-setting
and capital improvement planning for environmental
facilities.
                                                   REGION 1O
Consistent with the network of university-based EFCs,
the Boise State EFC pursues its own environmental
goals and effectively supplements its core funding
with funding from other sources. In 2005/2006, EFC
attracted 16 grants and contracts, which were spon-
sored for international, national, private sector, and
regional (both within and outside of EPA Region 10)
projects. This leveraging of resources demonstrates the
real value of the Environmental Finance Center
Network to Region 10 and EPA.

The major focus of the center's work during FY 2005
was to  continue and complete the development of
innovative software to address non-point source water
pollution challenges. The center participated in
dozens of conferences and workshops, providing soft-
ware, training, and technical assistance to scores  of
national, state, and local decision-makers.
Amy Williams and BillJarocki, Boise State University Environmental
Finance Center
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          ACTIVITIES  &
   ACCOMPLISHMENTS
Completed Projects & Initiatives

DEVELOPMENT OF INNOVATIVE
FINANCIAL TOOLS
In 2005, the major emphasis for the center was devel-
oping innovative tools to respond to the needs of
water and wastewater systems, as well as stakeholders
involved in addressing non-point source water pollu-
tion challenges. The goal is to reach communities in
need nationwide. The EFC's new tools for this year are
the following:

Rate Checkup™
A full-cost pricing model for water utilities, Rate
Checkup™ integrates the EFC's asset refinancing
model, known as CAPFinance™, in developing accu-
rate, fair, and equitable user charges for water utili-
ties. The wastewater version is under development.
A simplified version of Rate Checkup™ for water
utilities was developed for the Kansas Drinking
Water Program in 2005. Training on the software tool
will take place in early 2006 and Kansas is licensed
for statewide distribution of CAPFinance™.

System Development Charge Software Model
Development of this tool was completed in 2005 for
the University of Illinois' Midwest Technical
Assistance Center. The model will help water systems
calculate the impact of new development and design
impact fees to recover those costs. The model can
import data from CAPFinance™ into the design of
impact fees.

Electronic Sanitary Survey (Iowa Model)
Working with EPA's Drinking Water Academy, the
Boise State EEC had previously developed a sanitary
survey data collection system that is operated on
personal digital assistants or handheld Windows-
based computers. In 2004, Iowa contracted with the
EFC to produce a variation of this approach that will
allow information to be shared across Internet
 In 2005, the Boise State EFC...

 + Developed 10 tools for water and waste-
    water systems.
 + Conducted nine applicant reviews for the
    Idaho Drinking Water State Revolving Fund.
 + Provided direct technical assistance to five
    communities.
 * Conducted 55 workshops with up to  300
    attendees each.
    Participated in or presented at 11 work-
    shops.
networks, linking the central and regional offices of
the state drinking water program. The product was
completed and launched in 2005. Additional work to
integrate it with Iowa Safe Drinking Water
Information System will be completed in 2006.

Idaho 319 Grant Program

The Idaho Department of Environmental Quality
asked the center to modify Plan2Fund—a financing
and implementation software model—for application
to the Clean Water Act Section 319 financing pro-
gram in 2004.  In 2005, the project was reworked to
be a Web-based  application program. This work is
expected to be completed in 2006.

Financial Analysis Calculator for Exemptions

In 2005, the Boise State EFC continued its develop-
ment of a software tool to help regulatory agencies
quickly determine the financial capacity of communi-
ties seeking exemptions from the implementation
deadline for the  arsenic rule. This tool is designed to
assist regulatory  staff unfamiliar with financial analy-
sis by automatically generating a  financial capacity
report. Included  in the report are the current finan-
cial and economic conditions of the  system and
                                                     REGION 1O EFC AT BOISE STATE UNIVERSITY
                                                                                           IO9

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             ACTIVITIES  &  ACCOMPLISHMENTS
trends throughout time, affordability of current water
rates, and financial and affordability impacts of
financing capital improvements to meet the water
quality standard. This model will be available for all
future rule exemption scenarios in 2006.

SRF Financial Capacity Template

A modified version of the Financial Analysis
Calculator for Exemptions was developed for the
Washington Department of Ecology to assist the
department's staff in  reviewing the financial capacity
of applicants for Clean Water SRF loans.

Enhanced Version ofPlan2Fund
The Boise State EFC  made several enhancements to
Plan2Fund, which included adding a grant-tracking
feature, additional reports, and  run-time functionality.
The enhanced version of Plan2Fund can be accessed
and downloaded on  the EFC's Web site at
.

National Directory of Watershed Resources
The Boise State EFC  made enhancements to the
Directory of Watershed Resources, enabling it to be
accessed  nationally. In 2005, Region 1 added its
funding information into the database, and the Boise
EFC anticipates other regions will add their water-
shed resources to the directory in the future, thus
creating a national tool for watershed protection.

Prioritization Tool Beta Model
The EFC developed a prioritization tool to assist
stakeholder groups when prioritizing objectives using
pre-established decision rules. A beta model is avail-
able on the EFC's Web site.

One Plan BMP Financing Model

The EFC is working with the Natural Resource
Conservation Service, Idaho Soil Conservation
Commission, and others to enhance the Idaho One
Plan model with an environmental finance subrou-
tine. The  EFC is developing a model that will be
linked to  Idaho One  Plan that will identify the costs
and environmental effects of individual agricultural
best management practices. This model is a direct
response (and the outcome of an EFC-sponsored
charrette) to the conflicts between water users and
environmentalists in the Klamath Basin.

Nevada Statewide CAPFinance License
The state of Nevada specified the use of the EFC's
CAPFinance in its request for proposals for improv-
ing the asset management  capabilities of water and
wastewater systems in the  state. The winning propos-
al offered by Farr West Engineers of Reno led to the
establishment of a statewide license for the use of
CAPFinance in Nevada. Training and technical assis-
tance was extended to Farr West Engineers in the
summer of 2005.

MICRO-ENVIRONMENTAL FINANCE—
Focus ON  INFRASTRUCTURE
While watershed financing technical assistance and
training has increased significantly during the past
several years, the EFC maintains an  important core of
tools and services related to the traditional full-cost
funding challenges of providing essential public  serv-
ices. The following are highlights of EFC's new State
Revolving Fund activities and a variety of training
and technical assistance  events:

State Revolving Funds (SRFs): Providing Financial
and Management Capacity Analysis
Since 1997, the Boise State  EFC  has provided third-
party review of financial  and management capacity of
applicants seeking funding  from the  Idaho Drinking
Water State Revolving Fund (DWSRF) Program. Similar
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               ACTIVITIES  &  ACCOMPLISHMENTS
services are provided under contract to the Alaska
Clean Water Fund and Drinking Water Revolving Fund
for the  analysis of financial capacity. The Boise State
EFC conducted nine reviews in 2005. Information
about the review criteria and the latest compiled sta-
tistics on the characteristics of DWSRF applicants in
Idaho as of May 2005 can be found on the EFC's Web
site at .
Look for "Financial Capacity Assessment Indicators:
Idaho DWSRF".

In 2005, the following financial and management
capacity review reports were completed:
Alaska

City of Nome

Mile 8 Utility, LLC

City of Petersburg
Idaho

City of Burley

City of Bancroft

City of Chubbuck
City and Borough of Sitka   City of Homer

City of Ketchikan

Also in 2005, the EFC entered into a contract with
the Washington Department of Ecology (WDoE) for
financial capacity analysis services related to the
Clean Water State Revolving Fund. The Department
of Ecology asked the center to not only conduct
financial capacity reviews of its recipients for funds,
but also to design a computer-based model that
would expedite such financial reviews and automati-
cally generate financial capacity analyses. This new
computer tool will be used in the State of
Washington beginning in 2006.

The development of the WDoE SRF financial capaci-
ty analysis tool opens the door for the EFC to pro-
vide third-party review services to  other state SRF
programs at a lower cost, while decreasing the pro-
duction time per review. Idaho's DWSRF will experi-
ment with the new model at the end of 2005, and  is
expected  to shift to the new technology in 2006. In
addition, the DWSRF will monitor post-award finan-
cial capacity using and EFC-developed computer
model, Capacity Tracker. This  test will measure the
efficacy of using a tool like Capacity Tracker to
measure the impact on financial capacity derived
from taxpayer-supported grant and capital financing
taxpayer subsidy programs like the SRF.

The Idaho Clean Water SRF may adopt the review
methodology in 2006, pending legislative approval of
new SRF processing cost requirements for loan recip-
ients. In mid-2006, the EFC expects to convert the
Alaska SRF financial review process to the new tech-
nology as well.
COMMUNITY
Moro, Oregon
Tenino, Washington
Dietrich, Idaho
Mat-Su Borough, Alaska
Buhl, Idaho
CONDITION
Water and wastewater rate
increases
Establishing wastewater system
Upgrade of sewer system
Water system management
Wastewater upgrade/NPDES
violations
CHALLENGE
Acceptance of rates
Extreme cost $ per capita
Extreme cost $ per capita
Remote systems
Extreme cost $ per capita
                                                      REGION 1O EFC AT BOISE STATE UNIVERSITY
                                                                                             '"

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              ACTIVITIES  &  ACCOMPLISHMENTS
Specific Technical Assistance Projects
In 2005, the center extended special technical assis-
tance attention to a number of communities. These
communities were facing significant financial chal-
lenges in regard to implementing improvements to
their water or wastewater systems, or both. Assistance
included financial analysis, grant writing, town hall
meetings, and other onsite support. The communities
and their challenges are listed as follows:

Presentations, Training and Technical Assistance
Events—Highlights
Idaho Rural Water Association Finance Workshops
The EFC teamed up with the Idaho Rural Water
Association in  2005 to deliver several one-day work-
shops on water utility finances for small water utili-
ties in Idaho. The workshops included information
on planning, budgeting, financial  planning, and rate-
setting and how the center's financial software tools
can help them in these areas. Four workshops were
held in Idaho in 2005, and four more workshops
were  planned for 2006.
BillJarocki presenting financial management training workshop
for the Idaho Rural Water Association in Twin Falls, Idaho
Washington Infrastructure Assistance Coordinating
Council Conference
In November 2005, the EFC presented a training ses-
sion on water rate-setting, using its Rate Checkup™
software tool, at the Washington Infrastructure
Assistance Coordinating Council 2005 Conference.
The session covered rate-setting, as well as infra-
structure replacement financial planning using
CAPFinance™. Approximately 25 to 30 people
attended the session.

Great Lakes Rural Community Assistance Partnership
(RCAP) In-Service Training

In May 2005, the EFC presented an all-day workshop
on water rate-setting at the Great Lakes RCAP In-
Service Training provided by the National
Environmental Services Center in Morgantown, West
Virginia. The workshop included information on
planning, budgeting, financial planning, and rate-
setting and how the EFC's financial software tools
can help them in these areas. The workshop was
conducted in a computer lab at the University of
West Virginia, and the 11 attendees received hands-
on experience in running Rate Checkup™ and
CAPFinance™. The  EFC also participated in a half-
day session (approximately 20 attendees) on capital
improvement cost estimating.

Eastern Oregon AWWA/PNCWA Fall Conference

In September 2005, the EFC presented a training ses-
sion on utility finances for water and wastewater util-
ities in Pendleton, Oregon, for the Eastern Oregon
subsections of the Pacific Northwest Section of the
American Water  Works Association (AWWA) and the
Pacific Northwest Clean Water Association (PNCWA).
The eight-hour session included information on plan-
ning, budgeting, financial planning, rate-setting, and
how the EFC's financial software tools  can help them
in these areas. Fourteen people attended.

EPA Region 7 Combined Sewer Overflow (CSO)
Long Term Control  Plans (LTCP) Workshop
The center presented a session on utility financing
for stormwater utilities in May 2005 at the Region 7
EPA Headquarters in Kansas City, Kansas. The four-
hour session covered budgeting, reinvestment in cap-
ital assets,  and full-cost pricing for CSO/SSO (sanitary
sewer overflow) implementation. Approximately 65
people attended.
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               ACTIVITIES  &  ACCOMPLISHMENTS
Idaho Department of Commerce and Labor
Conference
The EFC conducted a workshop on "Community
Development Financing: New Realities of Environmen-
tal Finance" for the Idaho Department of Commerce
and Labor conference. The EFC presented the issues of
implementation finance for environmental  projects and
the impact on community development efforts. About
300 community development and local, state, and fed-
eral government professionals attended.

Oregon Utility Finance Workshop Series
The EFC delivered a series of eight regional workshops
on utility finance in April and May 2005. These full-day
workshops were sponsored by the League of Oregon
Cities and the Oregon Department of Environmental
Quality (ODEQ) and funded by ODEQ. Approximately
200 local government officials received the training as
well as copies of the EFC's software products for
improving financial capacity. Workshops were conduct-
ed in LaGrande, the Dalles,  Prineville, Salem, Roseburg,
Florence, Ashland, and Tillamook. Three hundred
copies of CAPFinance™ were provided to  ODEQ for
distribution to Oregon communities.

Following the workshops, individual communities
were invited to receive  direct technical assistance
from the EFC in June. Initial assistance sessions were
funded by ODEQ with follow-up assistance work
funded through the Boise State EFC. Communities
taking advantage of the technical assistance were
Scappoose, Yachats, Independence,  Moro, Cottage
Grove, Monmouth, Huntington, and Nyssa.

U.S. Army Corps of Engineers Western Region
Meeting, Salt Lake City
In April, the EFC was invited to address the western
states representatives of the U.S. Army Corps of
Engineers (USAGE) regarding issues of financial
capacity measurement and leveraging capital financ-
ing for water and wastewater projects funding
through the USAGE 595 process.
Colorado CAPFinance Workshop Series
The EFC, in cooperation with the Colorado
Department of Community Affairs and the Colorado
Municipal League, conducted a series of eight
regional workshops throughout the state on the
topic of asset replacement financing. The EFC
demonstrated CAPFinance to the workshop partici-
pants and provided copies of it to more than 300
Colorado communities, special districts, and private
water systems. Workshops were  delivered in
Alamosa, Cortez, Delta, Glenwood Springs, Fort
Collins, Limon, Lajunta, and Colorado Springs.

Syracuse University's Environmental Finance Center's
PMFP Training

In July, the EFC teamed with the Region 2 EFC at
Syracuse University by presenting a CAPFinance
workshop at the 2005 Public Management and
Finance Program (PMFP)  seminar at the Peek N'
Peak Resort in western New York. PMFP delegates
received copies of the CAPFinance model along with
a conceptual framework for meeting the challenges
of infrastructure gap financing for water and waste-
water systems. An outcome of this workshop was
the genesis of developing a version of CAPFinance
that will address solid waste  facility needs. The
Syracuse EFC is working with the Boise State EFC to
develop this new version of the  model.
                                                      REGION 1O EFC AT BOISE STATE UNIVERSITY

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             ACTIVITIES  &  ACCOMPLISHMENTS
Environmental Training Institute for Small
Communities—Morgantown, West Virginia
West Virginia University was the site of a full-day
training session on water and wastewater system
financing delivered by the Boise State EFC during the
Environmental Training Institute for Small
Communities Conference. Fifteen people attended.

Alaska Water and Wastewater Management
Association—Sitka Conference
Since its establishment, the Alaska Training and
Technical Assistance  Center (ATTAC) at the University
of Alaska at Sitka has relied on the Boise State EFC
for training and technical assistance on utility finance
issues. In September, the Boise State EFC presented
three workshops for  ATTAC at the Alaska Water and
Wastewater Management Association Training
Workshop at Sitka. The EFC presented workshops
about planning, budgeting, and capital investment for
continuing education unit credit. Approximately 35
people—primarily water and wastewater system
operators and managers—attended each work
session. Attendees received copies of CAPFinance
and other EFC software.

Oregon League of Cities Water and Wastewater
Financing Workshop

In November, the Oregon League of Cities invited
the EFC to conduct a workshop on utility finance in
Eugene in conjunction with the league's 50th
Anniversary Conference. Nearly 40 city officials
attended this full-day workshop, which featured EFC
software products such as CAPFinance and the new
System Development Charge model.

Regions 7, 8, 9, and  10 Capacity Development
Workshop—Portland, Oregon

In July, EFC Director Bill Jarocki facilitated work-
shops at the Regions 7, 8, 9, and 10 Capacity
Development  Workshop in Portland.
Region 7 State Drinking Water Program Stakeholders
Meeting Series
In August and September 2005, the EFC facilitated
four meetings of drinking water program capacity
development stakeholders in the Region 7 states of
Iowa, Missouri, Nebraska, and Kansas.  The purpose
of these meetings was to revisit  state program priori-
ties developed under the Safe Drinking Water Act's
(SDWA) state  capacity development strategy require-
ments. EFC staff assisted state drinking water pro-
gram staff members and stakeholders in reviewing
the  original capacity development strategies, prepar-
ing  the annual reports to the governors (required by
the  SDWA)  and in discussing how the strategies
should be adjusted to better meet future needs. The
EFC has been assisting the Region 7 states' drinking
water programs  on drinking water capacity develop-
ment implementation since 1997.

Idaho City Clerks, Treasurers, and Finance Officers
Association Institute (ICCTFOA)

The EFC staff presented two workshops at the ICCT-
FOA Institute  in September 2005. This annual  insti-
tute conference is the primary training  event for
municipal fiscal  officers in Idaho. Workshop topics
focused on the methodology and legality of system
development charges (sometimes called development
impact fees), and utility rate setting. Approximately
70 people attended each workshop.

Como Manejar las Oficinas Prestadoras de Servicios
de Agua con Criterio Empresarial ("How to Provide
Water Service According to Business Principles")
The Institute of Technology in Santo Domingo,
Dominican  Republic, was the  venue for the first
Spanish presentation of the Boise EEC's training and
financial tools. About 15 water service  professionals
representing various sized water systems  in the
Dominican  Republic attended this two-day work-
shop, arranged by Ing. Fidel Perez of WeGroup, S.A.
The event demonstrated the nearly universal chal-
lenges of providing the  best quality water service to
the  most people at the lowest cost for the longest
period of time. Workshop participants were
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               ACTIVITIES  &  ACCOMPLISHMENTS
enthusiastic about the usefulness of the EFC financial
management tools and are eager to have these pro-
vided in Spanish. The invitation from WeGroup, S.A.
to the EFC to conduct the event was the result of
WeGroup representatives having attended the EFC
financial training workshop at West Virginia
University earlier in the year. The center is expected
to return to the Dominican Republic to provide spe-
cialized services (see new initiatives for 2006).

MACRO-ENVIRONMENTAL FINANCE
Focus ON WATERSHED FINANCING

Boise State's 2002 Annual Report introduced the divi-
sion of activities between the focus areas of macro-
environmental and micro-environmental finance. This
division is useful in separating traditional utility-based
financing work from the emerging challenges of
financing non-point pollution reduction at the
watershed level.
Jarocki (center) with participants of the financial management
workshop in Santo Domingo

Watershed Funding Workshops

Watershed restoration is important throughout the
region. In order for watershed planning and imple-
mentation to be effective, identification and acquisi-
tion of resources are necessary. Due to the differences
in sophistication levels of different watershed groups,
the EFC has tailored its workshops to levels that best
address these differing needs. In 2005, the center pre-
sented seven watershed funding workshops:
Amy Williams (left) presenting watershed funding workshop in
Hauser Lake, Idaho.

Intermediate Workshops
Intermediate workshops focus on watershed stake-
holders that are familiar with the watershed process
but lack the knowledge and skills needed to weave
together a funding strategy. The workshop covers
principles of developing a finance strategy and iden-
tifying the funding tools and techniques that support
the strategy to achieve  a watershed vision. The EFC
presented four  intermediate workshops in 2005.

EPA Region 7 Watershed Financing Workshops
In August 2005, more than 50 people attended work-
shops in Omaha, Nebraska, and Kansas City, Kansas.
Attendees received CDs with PowerPoint presenta-
tions, Plan2Fund, handouts, and additional tools and
resources. The  EFC provided additional assistance
following the workshop and set up a Web site with
numerous resources for workshop participants.

Advanced Workshops
Many watershed groups are sophisticated in water-
shed planning and fundraising; however, some often
have unique funding challenges. The EFC provided
three workshops in the region to assist these com-
munities by addressing their specific financing needs.
Participants at each of the advanced workshops
received one-on-one assistance both prior to the
workshop and  following the workshop.

• Anchorage, Alaska—Advanced Workshop. The
  EFC presented an advanced workshop for the
                                                      REGION 1O EFC AT BOISE STATE UNIVERSITY
                                                                                              -

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             ACTIVITIES  &  ACCOMPLISHMENTS
  Anchorage Waterways Council. The meeting
  focused on particular challenges of the council
  and identified and made available tools and other
  resources to assist.

 • Chehalis, Washington—Advanced Workshop. The
  EFC held two advanced workshops in Chehalis in
  2005, to assist the group in prioritizing objectives in
  its watershed plan. The meeting resulted in the
  development of a new rating tool that can be used
  by other groups to assist in the prioritization process.

Online Training Workshop
The EFC is developing an online version of the
watershed funding workshop. The online training
includes information on the basic principles of water-
shed funding using the "community quilt" model, the
importance of partnering, leveraging opportunities,
identifying matching resources, budgeting, research-
ing resources, and grantwriting basics. The EFC
developed supplementary information for the train-
ing that included information on community asset
inventories, task prioritization, and fundraising. The
EFC also developed online tutorial demonstrations
for the centers tools, including Plan2Fund and the
Directory of Watershed Resources. These demonstra-
tions use animated screen shots to demonstrate how
to use the tools. The training material has been
posted to the EFC's Web site.
DIRECTORY OF WATERSHED RESOURCES
DATABASE  UPDATE

In 2003, the Boise State EFC in Region 10 developed
the Directory of Watershed Resources, a database of
funding sources for watershed protection and restora-
tion. The initial directory included information on fed-
eral, state (Oregon, Washington, Idaho, and Alaska),
private, and other funding sources and assistance.

The directory has been a huge success, identifying
nearly 800 programs within Region 10. More than
100 people visit the site per month and the numbers
are growing as people become aware of the
resource. In addition, several agencies have begun to
link to the directory Web site and are directing
unfunded applicants to the EFC for assistance.
However, for this database to continue to be a
resource for watershed stakeholders, the information
must be kept up to date.

In 2005, in order to make the updating process more
efficient, the EFC enhanced the e-mail update func-
tion of the Directory of Watershed Resources. The  e-
mail function allows the EFC to send e-mails to pro-
gram contacts  that includes a link to their specific
programs for review. The enhancement allows each
contact to link directly to its program information,
edit the program, and  submit the changes online.
The database tracks the programs with changes, as
well as the programs that have been accepted with-
out changes. This new function allows the EFC to
track completed updates and identify programs that
need additional research. An update request was e-
mailed to more than 600 program contacts in 2005.
The EFC is now in the process of completing the
updates to the database.

NATIONAL  EXPANSION OF THE
DIRECTORY OF WATERSHED RESOURCES
AND  PLAN2FUND

The positive response  to the Directory of Watershed
Resources generated a strong demand for the tool  in
other regions.  The demand was recognized by EPA's
Sustainable Finance Team, which provided additional
                                            ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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               ACTIVITIES  &  ACCOMPLISHMENTS
financial resources to the EFC in 2005, to enhance
and expand the directory and Plan2Fund for distri-
bution to watershed groups in other regions
throughout the United States.

Directory of Watershed Resources
In 2005, the EFC expanded the Directory of
Watershed Resources to function as a national data-
base, allowing other states and regions to add their
funding information into the directory. The New
England EFC was the first EFC to utilize the national
structure,  adding more than 600 programs to the data-
base. The EFC is currently working with Region 3 and
the states of Montana and Arkansas, which have
expressed an interest in adding their states' financing
resources into the database in  2006. It is expected
that, as resources allow, additional EFCs in  the
Network will also add information into the  database.

Plan2Fund™
Many watershed groups struggle with the  task  of
moving from the actual watershed plan to locating
funding sources. During 2003, the  center responded
to this need by developing Plan2Fund, which was
developed in Microsoft Access and walks users
through the process of estimating the costs of their
watershed program plan's goals and objectives,
assessing local matches, and determining funding
needs to meet goals and objectives. The results from
Plan2Fund can be used to search for funding sources
utilizing the Directory of Watershed Resources.

In response to feedback received from users of the
original version, the center completed enhancements
Plan2Fund in 2005. The enhancements included
developing a runtime version  of the program, allow-
ing users  to access Plan2Fund without owning
Microsoft Access. In addition,  the center added more
detailed budgeting information to the program, as
well as adding new reports and a function that
allows collaborative watershed groups to identify the
tasks that are assigned to different stakeholders. The
center also added a grant-tracking section that  allows
users to identify and track grants and resources for
specific tasks. Since the enhanced version became
available this fall, several hundred copies of
Plan2Fund have been distributed free of charge to
conference attendees and workshop participants. In
addition, more than 50 copies have been mailed by
request, and more than 200 people have  down-
loaded Plan2Fund from the EEC's Web site at

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             ACTIVITIES  & ACCOMPLISHMENTS
WATERSHED PRIORITIZATION TOOL

In 2004, the EFC provided an advanced workshop to
the Chehalis Basin Watershed Partnership in
Washington, which just completed a nearly six-year
effort to finish its watershed plan, only the second
plan in the state to be finalized. Following the work-
shop, the group requested additional follow-up and
technical assistance from the EFC to assist in moving
forward to implementation.

The largest challenge faced by the Chehalis group
and many others that have completed a watershed
management plan  is setting priorities for implementa-
tion. With many collaborative stakeholder groups,
prioritization is a difficult undertaking due to the
variety of interests at the table and the often-con-
tentious nature of environmental protection. In 2005,
the group requested the EFC's assistance in develop-
ing a tool to help it through the prioritization
process. Through a series of meetings, the EFC
helped the partnership identify multiple decision
rules it could use to determine  the priority of objec-
tives identified in its plan.

Prioritization is a major challenge among watershed
groups. The Chehalis case  study provides stakehold-
er groups with a successful example of how  prioriti-
zation can be done, demonstrates a process to fol-
low,  and provides  a tool that can  be adjusted to
address their unique circumstances.

The Excel-based prioritization tool developed for the
Chehalis group is available on the EFC's Web site.
The EFC  created a template that can be used by
other groups in developing their own decision rules
and prioritization tools. The template has  been
posted to the EFC's Web site.

ENVIRONMENTAL  FINANCE
E-NEWSLETTER

The EFC prepares  a quarterly newsletter that focuses
on watershed funding issues within Region 10. In
2005, the EFC expanded the newsletter to include
micro-financing issues such as utility finance,
rate-setting, and point source funding challenges.
The newsletter is e-mailed to more than 500 recipi-
ents, including past workshop attendees, watershed
groups, various EFC contacts, and local governments.
The response to the newsletter has been positive.
The EFC continues to receive requests from individuals
to be added to the e-mail subscription list. The
newsletter is available on the EFC's Web site at
.

IACC Newsletter

In 2005, the EFC assisted the Washington
Infrastructure Assistance Coordinating Council (IACC)
by providing a quarterly newsletter on infrastructure
financing in Washington State. The goals of the
newsletter are to provide relevant and timely infor-
mation on infrastructure financing and related issues
and enhance communication between state and fed-
eral financing programs, as well as the systems and
public. The IACC Newsletter can be viewed at:
.

EFC INFORMATION ACTIVITIES -
WEB SITE

The activities of the EFC are profiled on its Internet
Web site, 
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               ACTIVITIES  &  ACCOMPLISHMENTS
in positive responses and requests for additional infor-
mation. The following are some examples of events
and services the EFC provided in 2005:

EPA Watershed Funding Workshop, August 3> 2005
The EFC participated in a Watershed Funding
Workshop presented by EPA's Sustainable Finance
Team in Washington, D.C. Attendance for the work-
shop was limited to 51 participants, although more
wanted to attend. The high demand for this work-
shop demonstrates the need for watershed funding
tools and information. Response to the EFC's  presen-
tation was very positive. Sixty-nine percent of the
attendees rated the usefulness of Plan2Fund as
"High," and 76 percent said they would use the tool.
As a result of the high demand for the workshop,
and in order to reach a broader audience, a webcast
of Plan2Fund and overview of watershed funding
tools and information has been developed and post-
ed on the EFC's Web site.

Funders Fair, May 9-10, 2005
Congressman Michael Simpson (Idaho) requested the
EFC's participation in two funding fairs offered in
Twin Falls and Idaho Falls. The fairs targeted rural
stakeholders in southeast and south central Idaho fac-
ing financing challenges in infrastructure, agriculture
and natural resources, small business, and art and his-
torical fields of interest. At the fair, the center present-
ed valuable information and resources to participants.
In addition, the EFC hosted a display booth at each
fair and  provided software CDs and information with
other agencies and participants. As a result of the fair,
several participants requested additional assistance.

Watershed Dialogue—EPA Office of Wetlands,
Oceans and Watersheds, January 17,  2005

The EFC participated in a Watershed Dialogue pre-
sented by the EPA Office of Wetlands, Oceans and
Watersheds (OWOW). The EFC gave a brief presen-
tation on its watershed funding tools and participat-
ed in the dialogue discussion. The meeting gathered
together several of the nation's leaders in watershed
protection with EPA staff to discuss current and
planned activities undertaken by OWOW. The dia-
logue helped EPA gain insight on how to better
serve watershed groups and provided a forum to
discuss resources and networking opportunities with
other participants.

U.S. Forest Service and the State of Washington
Department of Ecology Meeting, May 3, 2005
The EFC presented information on funding strategies
that focused on road stabilization work needed to
meet the water quality requirements for the depart-
ment's Washington Administrative Code 222 rules. The
EFC assisted the group in identifying potential funding
alternatives to a congressional appropriation request.
Idaho Water Reuse Conference, May 25, 2005
The EFC presented information on tools and services
available to assist with funding water reuse projects
in Idaho.

Pennsylvania Conservation District Watershed
Specialists Meeting, October 5, 2005
The EFC partnered with EFC Region 3 and presented a
demonstration workshop on Plan2Fund to Conservation
District Watershed Specialists in Pennsylvania. CDs of
Plan2Fund were provided to more than 100 participants.

EPA Headquarters Brown Bag Presentation,
Augusts, 2005
The EFC participated in a brown-bag presentation
for EPA headquarters staff on Plan2Fund and the
Directory of Watershed Resources.
                                                       REGION 1O EFC AT BOISE STATE UNIVERSITY

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             ACTIVITIES &  ACCOMPLISHMENTS
Idaho Nonprofit Development Conference,
October 21, 2005
The EFC participated in the Idaho Nonprofit
Development Center annual statewide conference
titled, "The Power of Nonprofits: Influence, Impact,
and Investment."
Washington Department of Ecology Watershed
Leads Meeting, October 20, 2005
The EFC gave a presentation at the Department of
Ecology's Watershed Leads Meeting on the EFC and
the tools and resources available to assist with Water
Resource Inventory Areas (WRIA) implementation in
Washington. Additional assistance was requested
from WRIA groups as a result of the presentation.

Northwest Power Planning Council Presentation,
October 19, 2005
The EFC presented a brief workshop on Plan2Fund
and the Directory of Watershed Resources to the staff
from the Northwest Power Planning  and Conservation
Council, Bonneville Power Association, and the
National Oceanic and Atmospheric Administration.

Watershed Funding Customer Service Assistance
In 2003, the EFC established a toll-free telephone
number for watershed stakeholders to call if they
needed one-on-one technical service assistance when
searching for watershed funding within Region 10.
The center has continued this service for Region 10.
Watershed Financing Individual Assistance

During 2005, the EFC responded to requests for indi-
vidualized assistance for planning, researching fund-
ing options, or other assistance from a number of
individuals and organizations including Canyon
County, Washington State Parks Department, and
Hauser Lake Watershed Association.
New Initiatives

The EFC will pursue several new initiatives in 2006
in the policy areas of Safe Drinking Water, Clean
Water, and Watershed Protection.

WATERSHED FUNDING WORKSHOPS
The EFC is developing an online watershed funding
workshop. The workshop will include video, Web
tutorials, and links to resources and tools to assist
watershed groups, local governments, and tribes in
developing strategies for financing watershed protec-
tion efforts. In addition, the EFC will provide ongo-
ing Web support and assistance to groups develop-
ing and implementing long-term funding strategies.

DIRECTORY OF WATERSHED RESOURCES

The EFC is expanding the directory to a national
database. In addition, the EFC will continue to
update and expand the funding sources within the
directory.

PRIORITIZATION TOOL

The EFC is developing a computer-based prioritiza-
tion model to assist watershed organizations in rank-
ing the goals and objectives of their watershed plan.
The prioritization model will ultimately help commu-
nity-based organizations accomplish their tasks more
efficiently. Field testing in late 2004 led to the deliv-
ery of a full-beta model in 2005. The next step is to
develop a user-friendly version of the tool using con-
ventional software platforms.
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               ACTIVITIES  &  ACCOMPLISHMENTS
BARAHONA PROJECT  (DOMINICAN
REPUBLIC)

A spin-off of the EFC's work in the Dominican
Republic in November, the Barahona project is the
vehicle through which the EFC's utility finance and
financial management tools,  training methodology and
technical assistance will be adapted for Spanish-
speaking professionals and managers to improve their
financial capacity of water and waste water systems.
The Barahona project is a $72 million (U.S.) construc-
tion project—internationally  funded and overseen
by the national water production agency in the
Dominican (INAPA). A team of 11 consultants will be
involved,  including the EFC for software development
and financial management capacity building.

EFC NETWORK COLLABORATIONS

Watershed Protection

The EFC will continue to collaborate with the
University of Maryland EFC  on watershed protection
and watershed funding efforts. Together, these EFCs
expect to introduce watershed planning and financing
tools to stakeholders in Virginia.

Directory of Watershed Resources
The EFC is collaborating with the Region 1 EFC and
the EFC Network to expand the Directory of
Watershed Resources to other EFC regions. This work,
funded through EPAs Office  of Wetlands, Oceans and
Watersheds, is designed to lay the groundwork for
eventual nationwide application of EFC tools.
Conferences and Meetings
The EFC will continue to collaborate with the EFC
Network to provide information and presentations
at conferences.

Dashboard Project
In 2006, the EFC began work on a new EPA-funded
project that will include the Environmental Finance
Centers at the University of North Carolina, University
of Maryland, and Cleveland State University. Code-
named the "Dashboard Project," this effort will tackle
the next big challenge in environmental financial man-
agement training—translating financial management
information to aid in better decision-making by local
officials. This project will include the development of a
new tool—called the "Dashboard"—that will integrate
and digest the output of the variety of financial man-
agement tools produced by the EFC Network. The
project will also examine the information used by
decision-makers, best practices that lead to financial
capacity, and the best methods for exchanging infor-
mation effectively. By leveraging the multi-regional
coverage of the cooperating EFCs on this project, the
EFC hopes to create techniques and tools that will
have nationwide application.


                    Contact
   Bill Jarocki, EFC Director
   Phone: (208) 426-4293
   Cell:  (208) 340-2216
   E-mail: bjarock@boisestate.edu
                                                      REGION 1O EFC AT BOISE STATE UNIVERSITY
                                                                                              121

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                                            PERFORMANCE  MEASURES
Outcomes

As a result of the center's activities and accomplish-
ments outlined in the previous section, outcomes
have included the following:

• Widely distributed tools assisting numerous water
  and wastewater systems in the region and beyond.

• Nationwide reach of software, training, and techni-
  cal assistance for stakeholders involved in address-
  ing non-point source water pollution challenges.

• Maintenance of important core of tools and servic-
  es relative to the traditional full-cost funding chal-
  lenges of providing essential public services.

• Dissemination of training and technical assistance
  at numerous public and private forums via work-
  shops, presentations, and conferences.
Impacts
In 2005, the center continued its mission to improve
the efficiency and effectiveness of environmental
systems. It offered intensive training programs and
workshops concentrating on computer programs for
utility rate-setting and capital improvement planning
for environmental facilities. Specific environmental
issues addressed through the center's activities and
accomplishments include the following:

• Wastewater and water systems

• Watershed management

• Water conservation
                                           ENVIRONMENTAL FINANCE PROGRAM: 2OO5-2OO6 REPORT

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                                                                                  Jnited States
                                                                                 Environmental Protection Agency
                                                                                 (2731 -R)
                                                                                 1200 Pennsylvania Avenue, NW
                                                                                 Washington, DC 20460

                                                                                 EPA-205-R-06-002
                                                                                 October 2006
                                                                                 www.epa.gov
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