Meeting Summary
                March 7-8, 2006

            Wyndham Washington Hotel
               Washington, D.C.
              Audio Associates

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                              TABLE OF CONTENTS
TUESDAY, MARCH 7, 2006	1
Introductions/Meeting Overview	1
Agency Priorities	2
Cross-Collateralization: 1996 Safe Drinking Water Act	3
Office of Air and Radiation Priorities	5
Leveraging the Clean Water State Revolving Fund	8
Workgroups Report Out	11
   Combined Operations of the SRFs	11
   Sustainable Watershed Financing	11
   Affordability Rate Design for Households	12
Opening Remarks	13
Environmental Finance Center Update	13
Performance Measurement	16
Workgroups Report Out	18
   Loan Guarantee Program and Application of Useful Life Financing Concept to SRFs	18
   Environmental Management Systems	21
   Financial Assurance	22
   Innovative Environmental Financing Tools	24
Continued Discussion on Combined Operations of the SRFs	25
Wrap-Up and Next Steps	26
Public Comment Period	27
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                               MEETING SUMMARY

EFAB members present: Terry Agriss, Julie Belaga, John Boland, George Butcher, Don Correll,
Michael Curley, Rachel Deming, Kelly Downard, Mary Francoeur, Jennifer Hernandez, Keith
Hinds, Steve Grossman, Stephen Mahfood, Langdon Marsh,  Gregory Mason, John McCarthy,
James Smith, Dr. Andrew Sawyers, Cherie Collier Rice, Dr. Jim Tozzi, Billy Turner, and John

EFCN members present: Sarah Diefendorf, Heather Himmelberger, Jeff Hughes, Bill  Jarocki,
Mark Lichtenstein, Sam Merrill, Dr. Peter Meyer, Dan Nees, and Kevin O'Brien.

EPA  staff present:  Stanley Meiburg  (DFO), Joseph  Dillon,  Director, Office of Enterprise
Technology  and Innovation; Lyons Gray, Chief Financial  Officer (CFO),  Vanessa Bowie,
Director, Environmental Finance Staff, Alecia Crichlow, Sandra Keys, Timothy McProuty, Vera
Hannigan, and Susan Emerson.


Introductions/Meeting Overview
Stan Meiburg, DFO                                                        1:00 PM

Mr. Meiburg called the meeting to order, welcoming all Environmental Finance Advisory Board
(EFAB) and Environmental Finance Center Network (EFCN) members present as well as invited
speakers and audience members. He briefly described the chartered purpose of EFAB and noted
that this public meeting would allow public comment at the close of the Wednesday meeting. He
then  introduced  two  new  members:  Jennifer  Hernandez,  Partner/Co-Chair,  National
Environmental Team, Holland  and Knight in San Francisco,  and  Gregory Mason, Assistant
Executive Director, Georgia Environmental Facilities Authority. Mr. Meiburg also mentioned a
distinguished guest who had not yet arrived, John Howard, Chair of the  National Advisory
Council for Environmental Policy and Technology (NACEPT). EPA has asked Mr. Howard to
work collaboratively with EFAB, in what should be a very productive partnership.

EFAB had been very productive since its August 2005 meeting, issuing its first letter on the
financial test, thanks to the leadership of Mr. Barnes and Ms. Francoeur. That letter resulted in an
Agency response and a great deal of interest. He noted that the Board had a full agenda that day,
including draft reports on affordability rate design for  households, useful life financing,  loan
guarantees, expanded definition of state revolving funds (SRFs),  and a progress report on
environmental management systems (EMSs).

He  then  welcomed  Stephen  Johnson,   U.S.  Environmental  Protection  Agency (EPA)
Administrator, noting that he was the first Deputy Administrator to have met with the Board and
this is only the third time that an EPA Administrator had addressed the Board. Mr.

Johnson is  also the  first Administrator to be selected from within  EPA, where he has had a
distinguished record and earned an EPA Distinguished Service Award.
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Agency Priorities
Honorable Stephen L. Johnson, EPA Administrator

Mr.  Johnson  thanked those attending for their welcome and began  by describing President
Bush's charge to him in appointing him EPA Administrator: accelerate environmental protection,
while maintaining  the  country's economic competitiveness. EFAB's advice is critical  in
achieving this goal. How can the Agency  pay to address issues in all environmental programs?
He expressed appreciation for EFAB's past and future work as playing an important role in
reaching  the  President's stated goal for the agency. EFAB's recent reports, he said, had been
very helpful.

The Administrator  noted another contribution of EFAB: the Agency had recently recruited
EFAB member, Lyons Gray to be its new  Chief Financial Officer (CFO), recently confirmed by
the U.S. Senate, who will bring the Agency significant State and EFAB experience.

Mr. Johnson then emphasized an area in which EPA will particularly appreciate EFAB's advice:
water infrastructure needs. Whether in clean water SRFs, lead issues,  or drinking water SRFs,
these needs are great and will require far  more funding than EPA's budget of $300 billion can
supply. The solutions will not be easy, but the nation needs to figure out how to pay for them.
Mr. Johnson was aware that EFAB had been working on these issues for several months and is
very interested in their ideas. He noted that NACEPT Chair, John Howard provides EFAB an
opportunity to collaborate and accelerate environmental protection on water infrastructure issues,
which are also on NACEPT's agenda. EFAB is but one example of how collaboration can lead to
more progress than can conflict.

The Administrator then thanked outgoing  EFAB members, John McCarthy and Lyons Gray for
their contributions to EPA and awarded them special plaques.

Before moving  on to the next speaker, Mr.  Meiburg asked  those at the  table for brief
introductions. Noting the  several EFCN  members  at the table, he lauded the years  of
collaboration  between   the two  groups.  He then introduced EPA  Chief of  Staff,  Charles
Ingebretson as the next speaker. Before coming  to EPA, Mr. Ingebretson served Honeywell as
Governor of the  Relations Council and counsel for the law firm of Bracewell and Patterson. He
also served as General Counsel of the House Committee on Energy and Commerce, where he
handled "with grace" a very volatile environment. He earned a Bachelor's Degree in Political
Science from Duke University  and a Law  Degree from  the University of Notre Dame. He is an
expert on cross-collateralization and its history in Congress.
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Cross-Collateralization: 1996 Safe Drinking Water Act
Charles L. Ingebretson, EPA Chief of Staff

Mr. Ingebretson first provided background on the evolution of amendments to SDWA. It took
four years to develop and pass the act, but innovative financing was never a prime consideration
and cross-collateralization was not considered; Congress was suspicious about transfers between
the Safe Drinking Water Act (SDWA) and the Clean Water Act (CWA), because of competition
among committees on the Hill, a situation that has never really changed. He  noted that Clean
Water SRF (CWSRF) management, in contrast to the Drinking Water SRF (DWSRF), had a
longer time to develop and was, therefore, in better shape and managed on the House side by the
Transportation Committee. In the mid-1990s, the House Energy and Commerce Committee
wanted to modify the SDWA, as had been done for wastewater legislation, but there were too
many jurisdictional fights. In addition, there was real interest in nurturing a new SRF separately
from the big wastewater contractors and state folks who  might draw the life out of the DWSRF.
Similar concerns existed in the House Transportation Committee.  Other reasons were the sense
that States were not sophisticated enough on this kind of thing,  although information contradicts
this, and Congress did not want to compromise the core idea.

What has changed? The authority to transfer expired, but the act was permanently reauthorized
in the appropriations bill. He then expressed the hope that EFAB could help EPA figure out how
to get Congress back on track. States are now more  sophisticated, and there are  untapped
resources  in private markets. Jurisdictional problems  still exist and probably will remain.
Creation of the Homeland Security Department was the  last major Federal shift in organization,
and it takes a lot for Congress to change the order of the committees and their responsibilities. It
is important to find other ways to help the committees work together. Mr. Ingebretson concluded
that, given the President's commitment to fund the two SRFs at a responsible level, EPA should
work hard to get the biggest bang for the buck.

Mr. Meiburg thanked Mr.  Ingebretson for  his perspective and insights on the history  of the
SDWA. EFAB has discussed expanded joint opportunities between the SDWA  and CWSRF, but
EPA has been concerned that some  good may be lost in the process. He invited questions and
comments from EFAB and EFCN members.

Ms. Agriss noted EFAB's concern in working toward adding efficiency and strength to the SRFs,
for instance, by seeking joint operation of programs and even expanding them to other options,
about getting "siloed" at the Agency level and in Congress. She hoped the Agency would keep
an open mind on EFAB recommendations. She recognized that people, even in the  Office of
Water, can get protective of their programs; providing access by other people to one's program
can create uneasy feelings. Mr. Smith noted that even EPA was initially very reluctant to create
the DWSRF.

Mr. Wise pointed out that, given all the money that would be on the table,  people  had been
concerned about the potential  for mismanagement and scandal; but the track record should now
provide EPA and the Hill with a sense of security and integrity now, and they should be open to
considering operational mechanisms, such as cross-collateralization, transfer, or joint operations,
which can be competently and capably managed.
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The Ohio Water Development Agency, Mr. Grossman noted, had operated programs for water
and wastewater side by side. The State has also leveraged the program significantly, loaning far
more  money than has been brought in through capitalization grants and repayments;  but, future
needs will be so great, the State needs to find ways to get more bang for the buck.

Dr. Sawyers agreed, saying reduced funds especially for clean water will restrict SRFs from
moving ahead.  Maryland will have to find other ways to finance customers. Municipalities are
being asked to bear a much greater portion of the cost, but in many cases cannot afford it. He
also noted that the way SDWA is written, states must fund projects in sequence, which prevents
them  from  utilizing the funds the way they should; states would appreciate more flexibility on
ordering projects funded.

Mr. Mason suggested looking into some states that have been very sophisticated in taking SRFs
beyond their original intent. SRFs are often the only  option small communities have. He noted
that loans should extend beyond 20 years, because larger projects are being built.

Mr. Ingebretson asked for ideas on regional economies of scale. Could all of New England or the
Midwest or the West, for instance, pool their money to increase their leverage?

Mr. Mahfood noted that there are many people out in the states working on innovative financing,
but it will  take many years to push these efforts through. Funds are now declining- and it is
increasingly difficult  to meet even the  basic requirements of programs. He  also asked what
progress has been made on reducing earmarks. To which Mr. Ingebretson replied  that there has
been  significant progress;  the President's budget removes all earmarks that were appropriated
and assumes they will not be renewed.

Reducing earmarks is important, Ms.  Agriss said,  but so is  improving coordination  among
agencies, particularly for  U.S. Department  of  Agriculture (USDA) Rural  Utilities  Service
programs that can be tapped for small communities; they have  a challenging time choosing
among programs compared with taking advantage of multiple programs at one time.

The discussion turned to issues of regionalization, which raises many jurisdictional issues. Water
infrastructure is a much more local issue than,  for example, air transport. Regional collaboratives
have  formed in the Great Lakes and Chesapeake Bay, however.  Collaborations  among a few
states to finance  something similar to SRFs  might  be possible,  barring jurisdictional issues.
Regionalizing across state lines may not be possible for many reasons.

Mr. Wise  suggested  striving  for  closer  synthesis  between  CWA and  SDWA, not  just on
financing, but merging authorities from a watershed perspective, which would  bring  a huge
payoff.  EPA does have  a program closely  related  to  regionalization  called the Watershed
Protection Program. SDWA has some authorities that could benefit from watershed protection
through source protection, well head protection, and the ability to fund private systems.

Ms. Himmelberger added that cross-state regionalization may be impractical,  but much can be
done  in regionalization within states. She  cited the example of New Mexico, which legislated
that Albuquerque and the county in which it is  located work together to form a regional authority
to manage the metropolitan area's 70 water systems. Other areas  of forced regionalization are on

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arsenic and drought management. Many opportunities exist within states to take advantage of
economies of scale; reaching across state borders can happen later.

Ms. Agriss suggested distinguishing between regional planning and actual financing.  SRFs are
financially  strong;  expanding  them will not  improve  their financial  efficiency;  however,
planning, particularly across state lines, is especially needed. Once planning identifies projects,
the SRFs are there to finance them.

The Mississippi legislature,  Mr. Meiburg added, is now considering  a bill that pushes a Gulf
Coast regional authority. Local communities are resisting it, because infrastructure is going to
drive  development patterns. For the Governor to have taken this on as part of his recovery and
renewal initiative is a pretty significant development.

Mr. Meiburg then thanked Mr. Ingebretson for his insights on the history of SDWA as helpful in
structuring  solutions now. Mr. Meiburg then  introduced the next speaker,  Deputy  Assistant
Administrator Elizabeth (Beth) Craig, who has served at EPA in different positions since 1984,
including being in charge  of EPA's budget for four and a half years. She also once worked for
the National Enforcement Investigation Center in Denver. Before EPA, Ms. Craig she worked
with the Department of Health and Human Services as well as a nonprofit organization doing
management  training for  health and development professionals  in developing  countries.  She
earned a master's in public administration from George Washington University and a bachelor's
from Mary Washington College.

Office of Air and Radiation Priorities
Elizabeth Craig, Deputy Assistant Administrator, Office of Air and Radiation (OAR)
Mitch Greenberg, Smartway Transport Partnership Group, Office of Transportation  and Air
Quality (OTAQ)

Ms. Craig  said  she  would  speak on OAR priorities and then  turn to her colleague,  Mitch
Greenberg, for a description of EPA's Smartway Transport  program. Noting a nice balance
between OAR's  broader goals and EFAB's work, she handed out a chart that illustrated the full
range of OAR programs. She briefly reviewed the following OAR priorities:

•  Implementing current programs, especially in National  Ambient Air Quality Standards
   (NAAQS), for ozone and particulate matter (PM) that is 2.5 micrometers or smaller
•  Continuing to develop major rules, including (a) the model Clear Air Interstate and Clean Air
   Mercury rules that states can choose to promulgate and (b) two major on-road and non-road
   heavy diesel rules with  significant potential  benefits  in emissions reductions  and  fuel
•  Collaborating  on a multimedia toxics  program through the  grant program Community
   Action for Renewed Environment (CARE), in which EPA's waste, water, pesticide  staff help
   communities assess and address toxic issues through current agency programs
•  Restructuring the air-monitoring network to identify monitoring locations and  their condition
•  Developing new  major rules for (a) air toxics  residual risk  and area sources, (b) mobile
   source  air  toxics, (c)  locomotive and  marine  issues,  and (d)  small engines  (Bond
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•  Developing renewable fuel standards and working on diesel  retrofit,  responding  to  the
   Energy Policy Act of 2005
•  Addressing climate change through the voluntary Smartway Transport Program, Energy Star
   Program, and Asia-Pacific Partnership, in which the United States  is working with five
   Asian-Pacific countries to find ways to reduce greenhouse gas (GHG) emissions
•  Continuing  work  on  stratospheric  ozone issues, in particular  working with  industry on
   approval of alternatives to ozone-depleting substances
•  Increasing momentum and outreach on radon, which recent research has shown to be double
   the anticipated risk
•  Developing a radiation monitoring network and emergency response in association with the
   Department of Homeland Security
•  Continuing outreach work on asthma in response to this rising public health issue.

Ms. Craig and Mr. Greenberg then fielded questions from EFAB and  EFCN members.

Responding  to a question from Ms. Francoeur, Mr. Greenberg said EPA was coordinating with
the Department of Transportation (DOT) on a National Freight Policy for innovative financing to
address congestion  and air quality  issues as well as work for energy  savings. EPA is also
working with (a) 21st  Century Truck, an industry group sponsored by the Department of Energy
(DOE), to look at futuristic goals for freight transportation, particularly fuel efficiency of small
trucks,  (b)  the  Smartway Transport  Program,  (c) Clean  Cities  Program,  and (d)  Clean
Automotive  Technology Program. Mr.  Meiburg added that Mr. Greenberg was  outlining new
directions for the agency  as the Mobile Source Program has expanded beyond  setting emission
standards for cars through these programs, as the technological limits for light-duty vehicles and
trucks have been reached.

Before turning to Mr.  Greenberg for a fuller description of the  Smartway program, Mr. Meiburg
noted that the Air Office had asked EFAB about this program at the August EFAB meeting. Ms.
Belaga and Mr. Curley then met with Mr. Greenberg and Rob Brenner in the fall, which resulted
in the draft charge from OAR  on the Smartway program in their meeting folders. If EFAB and
OAR want to move forward on this, EFAB could form a workgroup on the subject.

Mr. Greenberg then described the program in more detail. Its goal is to create a more efficient,
cleaner freight transport sector, which is huge and growing;  ports  are congested and have air
quality problems to solve  and fuel to save. Many of the nation's 7 to  8 million trucks are old and
still in the system, because such trucks can last 20 to 30 years. Every company's  number one
cost after labor is fuel, and for small companies, fuel can be the number one cost. The Smartway
program  is finding and applying innovative  techniques for old trucks. The  goal is 20 percent
more fuel efficiency and  decreased  NOx and PM emissions. A company can  save $1,000  per
truck per year. Not all trucking companies are big ones, which have  greater flexibility; most are
small (six to 20 trucks) and have razor-thin margins.

The Smartway program sells a package of four innovative technologies to retrofit old trucks for
greater efficiency. The $7,000-$12,000 package includes (a) an idle control device, (b) single
tires   to replace double tires  at each  position,  reducing  rolling resistance and  weight and
increasing fuel efficiency and truck weight capacity,  (c) improved aerodynamics to reduce drag
at the back and turbulent flow underneath, and (d) controls for PM emissions. These technologies

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are bundled because the first three will produce enough savings to fund the fourth, which does
not save fuel. Fuel savings would begin to pay off any monthly loan repayment the company
needs to finance the package. Despite this, obstacles exist to companies purchasing the package,
and OTAQ is looking for ways to reduce risk to and leverage funds for truck companies.

The Board and EFCN members then entered a lengthy discussion of the Smartway program.

Mr. Wise suggested working with ports to finance retrofit packages, instead of giving incentives
to trucking companies to buy. Mr. Greenberg thought this was an interesting idea, although not
all ports have the financial capital to support this.

Mr. Downard asked how much global source pollution comes from trucks. Mr. Greenberg said a
total of six to eight million freight trucks produce the largest share of NOx and PM emissions or
50 percent of mobile source diesel emissions. OTAQ is targeting the long-haul trucks.

Mr. Marsh asked whether any of the money budgeted for DOT could be used for making low-
interest loans to trucking companies for the package. Mr. Greenberg said EPA is looking into
this; the Energy Bill does mention grants and loans.

Mr. Hughes suggested that  the program focus on solid waste trucks for demonstration projects,
possibly using EPA solid waste innovation projects,  because it might be easier to implement
within the public sector. Mr. Greenberg noted that although the Smartway idea is very flexible,
waste haulers probably do not do much queue idling, which is worse than straightforward idling;
there are many ideas for fixing infrastructure that could help too.

Ms.  Diefendorf cited one city  supervisor in  California who would probably like to bring the
Smartway package to trucking companies, because of the impact of heavy-duty diesel trucks on
the community. Perhaps several communities could pilot a project for trucking companies. Ms.
Craig suggested in this  case packaging Smartway with diesel retrofitting to reduce emissions
through a couple of EPA's voluntary programs.

Mr.  Meyer said that, if trucking companies  could  actually  make money by  purchasing the
Smartway package,  the  package does not need to be sold at  below-market cost, which means
easier  access  to funding. He thought a regulatory element would be necessary to make the
program work.  Mr.  Marsh  asked what the potential regulatory impact would  be  of the diesel
retrofit issue and what the timing was for the mobile air toxic  rule. Ms. Craig answered that the
rule is being proposed this year, so could not fully answer the question.

Ms.  Francoeur asked how the program would benefit the large trucking companies, for whom
capital access  is not  a  problem. Mr. Greenberg  said most  of those companies  are already
Smartway partners and have created three- to four-year action plans for EPA. The big companies
are actually just around 1 percent of the 500,000 U.S. trucking companies, of which 300,000 are
very small enterprises, so they only handle 10 or 15  percent of the  total mileage. The small
companies, however, represent much of the emissions  inventory of fuel consumption and do not
have financial flexibility.
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Mr. Meiburg concluded the discussion by asking any interested Board members to volunteer for
the new workgroup to be formed on Smartway.


Mr. Meiburg reconvened the meeting by introducing the newly arrived John Howard and Don
Correll. Mr. Meiburg then introduced the next speaker, Assistant Administrator Ben Grumbles as
someone who has been a great supporter of EFAB for many years.

Leveraging the Clean Water State Revolving Fund
Benjamin H. Grumbles, Assistant Administrator, Office of Water

Mr. Grumbles began  by noting that the EFAB represents an "all-star" cast of aficionados on
water issues. He would speak on three topics: water infrastructure, cross-collateralization, and
innovative financing.

First,  the Agency is  committed, on the  demand  side, to  the  four  pillars  of sustainable
infrastructure—better  management,  full-cost pricing,  efficient water  use,  and  watershed
approaches  to protection—using  three  tools:  technology  and  science,  innovation,  and
collaboration.  A 2002 EPA report  identified a $224 billion infrastructure  capital gap—$122
billion for wastewater and $102 billion for drinking water—just for capitalization, not operation
and maintenance.  If you factor in 3 percent real growth in revenue beyond inflation,  those
numbers fall to a low  $20 billion for clean water and about $40 billion for drinking water; these
are still large. EPA is continuing to provide  seed money for capitalization grants, and SRFs are
fostering the four "pillars," particularly asset management,  capacity development,  and EMSs
under the first pillar of better management. Asset management includes improving management
of on-site  and decentralized  clustered systems, which comprise  25  percent  of wastewater
infrastructure. He stated the need for everyone to encourage a movement toward full-cost pricing
and true value  recovery. Innovative  approaches  to reducing demand on water and wastewater
infrastructure are  a particular  priority. EPA  is studying development  of a water efficiency
program, working closely  with the  Energy Star program on improving the marketability  of
water-efficient products. The fourth pillar on watersheds ties the first three pillars together and
involves decentralized systems and source water protection. EPA just entered into  a source water
collaborative with  13 other organizations, ranging  from  national environmental groups  to
national utilities to state drinking water and clean water  administrators, to emphasize watershed
protection  to  reduce  costs downstream.  EPA  is  focusing  on technology, innovation, and

Regarding the tool of technology and science, Mr. Grumbles noted that the  Administrator is a
career scientist and strongly supportive of technology. Although not a "silver bullet," technology
combined with management practices and approaches and sustainability ethics  are  powerful.
Sustainable infrastructure depends greatly on technology—for example, remote sensing for leaks
or security breaches—including the technology of information exchange.

He then discussed the innovation tool. On the supply side, the Administrator  is seeking the best
ideas  and realistic options for innovative financing and weighing their pros and  cons. EPA is
looking into private  activity  bonds  and  arbitrage  restrictions, as well  as other  innovative

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financing mechanisms and supporting states and local areas on sustainability through fees and
other financing mechanisms. Taking the Chesapeake Bay as an example, Maryland enacted the
"flush fee" two years ago to finance bay protection. This may be a model for other water bodies,
such as Puget Sound. The Agency is looking for innovative financing in other areas, such as
storm water issues, and is eager for new ideas on loan guaranties.

Mr.  Grumbles also noted the  importance of, but did not go  into detail on, the collaboration
"tool." No  progress will be made without reaching out to a wide array of actors. He concluded
his presentation, saying  that the  Office of Water is working on many products to advance the
four  pillars through the three tools he had described. The  Agency is now  laying  out and
researching options, as  well  as looking for partnerships to  advance innovative financing
approaches. Mr. Meiburg then opened the floor for comments and questions.

Mr.  Turner asked Mr. Grumbles to  elaborate on the 80 percent of water quality issues that
involve nonpoint  source pollution.  He replied that there was no clear dollar price tag on it. The
line  between point and nonpoint sources is evolving and continues  to  move. The 2000  Clean
Water Need  Survey said $181  billion was  necessary  in the  next 20 years to meet  CWA
requirements, of which $8 billion  was for nonpoint sources. The need survey tried to capture
storm water costs under 402(p)  as well, which is a  growing cost burden. Both  EPA and the
public recognize  that CWA implementation  costs  are  significant; that  is  why sustainable
approaches to infrastructure financing decisions are so important. The nation needs to recognize
that  more  attention and resources should  be devoted to storm water and runoff through a
watershed approach.

Mr.  Curley noted that EFAB's affordability study addresses the issue of who will pay for the
funding gap, which will be a great "chapter in the book" on full-cost pricing and  gap payment.
Mr.  Grumbles said EPA was  looking  forward to working with EFAB on  affordability as an
important approach, but  that one cannot religiously  hold to the full-cost price;  some limited
situations may still require lifeline rates or some type  of subsidy. He  noted that 75 to 80 percent
of water infrastructure investments for clean and drinking water are underground;  technology is
necessary to minimize  disruption of  citizens' lives affordably.  The biggest price  tag and
challenge for  cities and communities is  in  modernizing infrastructure and complying with
mandates on sewer overflows. Mr. Grumbles is  working with the Enforcement Office on a
combined approach on clean water permits and long-term control plans  for a fixed schedule for
updating and modernizing infrastructure and complying with  mandates, in which affordability
will be a big issue.

Responding to Mr. Wise on EPA working with USDA on ways to  make funding sources into
sustainable financing systems for farmers, Mr. Grumbles said EPA has for several years worked
with  USDA  on finding greater synergy  between USDA's Natural Resources  Conservation
Service programs and EPA's water programs. That is where there is  a lot of funding to address
watershed protection or water quality issues, particularly through programs under the Farm Bill.
A focus on ecosystem  needs  and steering  funds to targeted priority watersheds are key to
reducing costs downstream for municipal utilities. Water quality trading is also a priority. USDA
announced an initiative last summer to integrate market-based approaches, including trading to
improve water quality and improving watershed conservation.
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Mr. Jarocki asked Mr. Grumbles for assistance on innovative financing on a canal project in
western Washington State and then suggested using comparisons of the cost of a like volume of
gourmet coffee or gasoline to the same volume of water to give citizens an idea of how good a
deal water supply is.

Mr. Marsh  thanked Mr. Grumbles for EPA's support for the Thursday roundtable on watersheds
and noted that, although  the focus  will be on nonpoint financing, many of the concepts to be
discussed will be consistent with infrastructure finance, for example,  equity in fees and taxes at
the local level. He hoped the discussion would cover the total watershed context and not just
focus on financing a specific gap in  funding.

Mr.  McCarthy asked Mr.  Grumbles for his thoughts  on how  funding programs, such  as
community development  block grants and so on, could be empowered to look  at the household
level. He said he would keep the household level approach in mind when considering drinking
water affordability guidance for public comment. His staff is also looking at affordability in the
context of  CWA. The National Association of Water Control Agencies (NAWCA) suggested
EPA revisit its affordability policies in long-term control plans and sewer overflows under CWA.
This is a good opportunity to examine affordability at the household level.

Dr. Sawyers  offered to discuss the affordability document with  Mr. Grumbles  after he has a
chance  to read it. He mentioned in particular the need to address affordability in pockets  of
poverty. Mr.  Grumbles agreed that more work is necessary to increase  access to safe drinking
water and  sanitation for  pockets of poverty  in Appalachia,  for Native American tribes, and
elsewhere in the continental United  States.

Mr. Butcher wondered if the Board  should recommend that EPA support useful life financing for
SRFs, as it has done in the past. EFAB believes there is no financial reason not to delegate to
each state the decision whether to limit loans to 20 years or to make longer amortization periods
as long as 40 years available. Mr. Grumbles agreed that Congress continue to look at the issue;
he has testified in support  of extended term  financing  in  the CWSRF context. He thought it
important to find ways to encourage and emphasize leveraging and the best possible use of SRF
funds. Dr.  Tozzi reminded  the  group that the Administrator  had specifically asked EFAB  for
recommendations on  the cost of water infrastructure; EPA  funds for  it have been and will
continue to be reduced.  He asked Mr. Grumbles  if EPA wants demand-side or  supply-side
options on  reducing the gap in  funding? Mr. Grumbles  said EPA was open to a wide array of
innovative  supply-side financing tools, including loan guarantees. The Administrator had given a
similar  charge  to the Great Lakes collaboration to come up with approaches  to accelerate
restoration  and protection of water bodies that hold 20 percent of the world's fresh  water
supplies. He noted a book by James Levin called From Walden to Wall Street that embraces the
private sector as a potentially strong ally on ecosystem restoration.

Mr. Turner ended the  discussion on a positive note by noting the progress made.  The American
Water Works Association  has  launched  "The Value of Water"  program,  and the  Water
Environment Federation  has  the "Water Is  Life: Infrastructure  Makes It Happen"  program.
NAWCA has the "Clean  Water Miracle" program. The focus on full-cost pricing is getting out
there. Asset management tools  and EMSs are all somewhat generated by a focus on the four

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Mr. Meiburg concluded the session by noting that EFAB now had a USDA field manager/expert
witness in Dave Miller, who was present at the meeting and represented USDA in New York.

Workgroups Report Out

Mr. Meiburg noted  that Jim Smith would report on combined operations of SRFs, instead of
Sonia Toledo, who could not attend the meeting.

Combined Operations of the SRFs
Jim Smith

Mr. Smith began by noting that he could not attend the workgroup meeting, but did receive its
report. Workgroup recommendations for combined operations of the SRFs  that passed by the
Board were fielded to the EPA  State Board Group,  a group of state officials who run both water
and drinking water SRF programs and some related management and administration programs.
The final workgroup recommendation was to advance them and get approval.

Mr. Meiburg noted that EFAB and EFCN members had  the draft letter  on combined  SRF
operations in their folders. The Board then reviewed some of the history behind the workgroup's
mission,  noting that members had voted for additional study that went beyond the anecdotal,
although  some workgroup members disagreed with  this. Several EFAB members stated that they
found the draft letter too "tepid"; it merely states that the workgroup did what it had been asked
to do and that EPA should now take over on the issue, which seems rather weak, although this is
true of many EFAB recommendations. One member pointed out that the idea had been studied
for many years and is clearly a good one, but it is not EFAB's job  to implement it; EPA needs to
run with  it. Several Board members thought the letter should be "beefed up," state its points
more definitively and enthusiastically, and use a more affirmative tone to become a letter that the
Board could coalesce around.

Mr. Meiburg suggested that they think about the issue overnight and return to it on Wednesday
for a decision.

Sustainable Watershed Financing
Langdon  Marsh

Mr. Marsh described the special Thursday roundtable on watershed financing as an exciting
opportunity to put all ideas on the table—realistic options to raise charges at the local level for
what and how and under what equity considerations to do it. They would look at the need to raise
revenue locally to pay debt-service costs, bonds, and perhaps projects too. They expected to hear
solid  advice from several resource economists on  ecosystem valuation techniques to make
charges more equitable and, therefore, more acceptable. They would discuss collaboration issues:
can you bring people together across boundaries for watershed protection? One example to be
explored  is the Maryland "flush fee." How politically feasible is it to get this through? Another
example will be the McKenzie River Basin in Oregon, where they  raise organic crops by funding
a marketing and information operation. They expect to have a wide discussion on other ideas as
"fodder"  for recommendations  on pilot  demo  projects through various organizations, on areas

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needing research, and on existing models that add tools to the toolbox. The goal is to wrap it all
up in a report for adoption by EFAB at its August meeting. Mr. Marsh said they expect 40-50
people to attend the roundtable.

Mr. Hinds described an effort in New Mexico in which all private utilities with fewer than 1,500
users are allowed to have automatic 2 percent  annual increases in fees.  Passage of this system
was  very difficult, but the system  was necessary to allow private utilities to raise  the money
needed to comply with environmental improvements.

Mr. Turner noted a regulatory aspect of the watershed issue. The costs of bringing watersheds
into  compliance  with wet weather types of issues are high. Regulatory agencies are reticent to
deal with the issue by putting out what is viewed as a  reduction in  standards.  Standards were
originally designed around dry weather considerations and are now being applied to wet weather
conditions. Watershed runoff brings organisms present on land into  streams, where they cause
violations. He was unsure there was an answer to the problem, but it was important to find a way
to spread the word.

Mr. Marsh mentioned how Oregon got upstream farmers to grow filter  strips, shade trees, and
other approaches to avoid other extraordinarily expensive fixes. He had done an issue paper with
an intern on the  subject that he  had  provided the workgroup, will  provide to  roundtable
participants, and would be glad to provide to EFAB members as well.

Affordability Rate Design for Households
Andrew Sawyers and John McCarthy

Dr. Sawyer and Mr. McCarthy then reported on the work of the Affordability Workgroup, which
had completed and sent its report to the Administrator. The next question may be to address Mr.
Grumbles' concern on addressing wet weather issues and affordability. The workgroup referred
in its report to looking at how the SRF program could help address affordability, but had not
decided to go in that direction. They are now waiting for a response.

Mr.  Meiburg mentioned that the briefing for Mr.  Grumbles went well, providing the Agency
with a new way  of looking at affordability. The EFAB report should have a profound effect on
EPA thinking. He commended the workgroup on their work.

Mr. Turner also  complimented the workgroup on its great report, which brought out  new ideas
for the utility community. Many want to do  programs, but it is tough to  get them approved. A
new mechanism  is necessary for getting the word out to industry. EPA could usefully direct the
report to industry and related associations. He noted that the workgroup report encouraged EPA
policy to look at the entire community. Mr. McProuty added that the report also points out the
need for collaboration; the utility is responsible for addressing as much of the problem it can, but
situations exist where poverty and the financial burden exceeds the utility's capacity, and some
form of subsidy  may be needed from some level of government. Mr. McCarthy also  noted that
many people who  cannot afford the cost of water live in multiple-family dwellings and do not
pay  individual  water bills.  This is  an example  of the kind of sticky problems  that need
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First Day Summary
Stan Meiburg

Mr. Meiburg took a few minutes to summarize the main points made during the meeting that
day. First, Mr. Johnson's presentation that day had put to rest the issue of whether the EPA
Administrator appreciated the work of EFAB. Mr. Ingebretson had noted that some of the things
people now argue about on joint operations, for instance, have been argued about for a long time,
because,  they are political problems that are difficult to resolve; finance by itself cannot always
solve problems. Part of EFAB's job is to "take back" the financial perspective so that over time
people start to change their views that the world is not what it was ten years ago.

The Board had also received a good presentation on innovative financing efforts, such as the
Smartway program, and changes in the Agency's mission, such as in mobile sources. They had
also heard from  Ben Grumbles on the four pillars  of sustainability in water infrastructure and
three tools to promote them. He noted that much of EFAB's work on combined operations of
sustainable water treatment financing and affordable rate design speaks in one way or another to
those four pillars.

Mr. Meiburg concluded by noting that the Agency  and EFAB will be looking for new realistic
ways and ideas to address future challenges. He then adjourned the meeting for the day.

Adjournment                                                              5:00pm


Opening Remarks
Stan Meiburg                                                              9:15 am

Mr. Meiburg convened the second day of the EFAB  meeting, noting the next EFAB meeting was
August 14-15, 2006 in San Francisco at the Hotel Nikko.  He then introduced Sarah Diefendorf,
EFCN  president.

Environmental Finance Center Update
Sarah Diefendorf

Ms. Diefendorf said that each year she would use the March  meeting as a "President's Choice"
opportunity to describe  a particular aspect of EFCN work  and the August meeting  to present an
overview of EFCN. That day she focused on EFCN's Green Business and public recognition
programs. Green Business is an EMS program for small and  medium-sized enterprises  (SMEs).
According to EPA, EMSs are a form of continuous cycle planning for improving processes to
meet business environmental  goals. Such systems can be  broad  or narrow,  are not easy to
implement, and require top- to bottom-level support.  EMSs take  a  long-term commitment to
continuous improvement. One size does not fit all; each EMS is different for each company and
each industry; they are not easily standardized and, therefore, not certified in any  way. This
means  EMSs are not necessarily compliance driven. The company frequently does not quantify
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results, for example, how much the business has saved or how much it is no longer using, etc. An
EMS that financial industries  can rely on must have external third-party certification.

Ms. Diefendorf then described a California green business program called the "Green Network,"
consisting of 11 different counties with 11 coordinators working together. EPA brought her and
others in to help these counties coordinate. California's program is voluntary, which is important,
because the Chamber of Commerce considered the program "backdoor legislation"  and a "job
killer." The program is an on-the-ground program to help SMEs implement a type of EMS that
promotes compliance by requiring it for certification. The program is free, which is important for
SMEs. In California, the program is county based (state based in Hawaii and Arizona) and run
either as a public agency or organization or a nonprofit. Most of the California programs and the
state's 800 certified businesses are in the Bay area. Ms. Diefendorf handed out checklists for
SMEs  specific  to  different industries.  Certain industries,  such as  dry cleaners that use
perchloroethylene, are not considered for certification. All certified businesses must meet certain
regulatory standards and undergo on-site verification, in contrast to self-checking programs.

The California program has resulted in some savings, but no profits; waste reduction; increased
compliance, for example, with worker safety and health; improved relations with customers and
regulators; increased  public  recognition  for  SMEs; and  a  mostly  standardized  verification
process.  California hopes someday to  offer Green  Business SMEs some kind of certification
incentive. Ms. Diefendorf summarized by  saying the process of creating a Green Business in
California is difficult and long; however, it is very measurable (in terms of energy use, water use,
sick  and injured employees, regulatory relief, emissions, and cost savings). California does not
yet measure these, because it hesitates to bother businesses, has few resources, and it is difficult
to measure 11 different programs with different priorities. So, there is currently no State—only
county—oversight and no State disincentives to influence the county programs.

Hawaii's Green Business program is limited to water use by hotels and involves a tiered system
with different levels of certification. This means hotels reach one level and never go further, as
they do not like being dictated to. Arizona has received an EPA grant to start a Green Business
program, beginning with auto body shops. This received mid- but not top-level support, so fell
apart in 2004.

Ms. Diefendorf listed a number of best practices for EMSs and Green Business programs: (a) go
beyond compliance, (b) involve measurable, consistent, and transparent on-site compliance, (c)
commit to ongoing  improvements, and (e) receive top- to bottom-level support; all these lead to
credibility in certification. Asked why the Green Business program does not include dry cleaners
and metal platers, she said dry cleaners who use alternatives to perchloroethylene are included,
but not those who use it, as its use is banned in Southern California anyway.

Mr. Wise noted the difficulty of  finding a nexus between an EMS and financial performance.
Much anecdotal evidence exists that an EMS does improve performance, including financial, but
actual empirical evidence is  lacking. One study has very mixed findings  on cost  savings or
revenue-enhancing features of EMSs.

Mr. Meiburg was struck  by the point that people tend to think EMSs are intrinsically good; but
data that can be checked and verified and identify  what is happening on the  ground, however

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much it is resisted. He also noted how this work again illustrates how the EFCs share and learn
from each other.

EFCs have often seen a clear infrastructure "gap" in local government, Mr.  Hughes added,
between the "converted" and a few elected officials and career staff who have very different
objectives. EFCs try to understand the needs and objectives of both groups to find interesting
policy support tools that communicate points that EPA and others are making on the issue. EFCs
are also doing everything from focus groups to interviews with officials on communication tools
for collecting statewide information on indicators to ensure they can truly provide warning signs
of potential local government problems.

Ms.  Himmelberger  then described the  case  of  New  Mexico,  which  has  an intra-state
collaboration among multiple state agencies and assistance providers dealing with water in the
state, initiated by Governor Bill Richardson, focusing on financing water.  The State had provided
funding for water systems for the poor in the past. The Governor took this on as  an issue,
bringing agencies and other entities together to improve the situation. They came up with a 10-
point plan for counties to get funding through loans and grants, although not for R&D, for which
different criteria exist. The 10 points cover rate structures, asset management, water rights, and
sustainable quantities, among  others.  Future inter-state  collaboration  is  also possible.  Ms.
Himmelberger  was surprised that the  legislature passed  New Mexico's  State Water  Plan.
Legislation is now being developed to change how funding is done.

In Mississippi,  after Hurricane Katrina,  Mr. Meiburg noted, EPA's Region VI Office  of Water
worked with the States of Louisiana and Mississippi on a well-received compendium of all
sources of systems available for water development activities in those states.

Mr. Jarocki then reported on a tool developed for the SRF  Program called "Passing Track"  to
see the effect of financing;  in the long term,  has  the  SRF contribution increased  financial
capacity? This easy tool  relies on only  14 figures in audit financial statements and allows the
SRF Program to track capacity in the entire portfolio. The Community Development Block Grant
Program wants to replicate the tool, which may become standard for all public  contributors that
work together to fund a project to report on its effectiveness—information that can be sent to a
Congressional delegation or others who want to know about it. His EFC  also does technical and
financial Management Capacity Reviews before a loan is granted, tracking the same indicators
ahead of time on, for example, credit worthiness, for unrated communities. These reviews state
what a community will need from a financial management point  of view to succeed in the long
term.  A third piece is to track, after a community receives a loan, whether it implements the
financial techniques and whether it has been demonstrated in financial results.

Answering a question on collaboration or coordination among EMS certifiers, Ms.  Diefendorf
said  there is competition among nonprofit organizations  whom do  variations of  EMSs, for
example, Green Seal, who is working with the State on hotels. Similar state organizations around
the country are actually starting to work with each other.

She also responded to a question on what triggered the Chamber of Commerce's perception of
the plan as a "job killer." She guessed that the success of the program might,  it thought, force
other companies to take it on, raising costs. Ms. Hernandez suggested the  chamber was afraid the

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next step would be mandatory not voluntary, which may be true, given the makeup of the State
legislature. Although efforts to create some level of benefit for the companies did not succeed,
she did think the effort did educate legislators on green certification.

Mr. Meiburg then introduced EPA Deputy Administrator Marcus C. Peacock, who had earlier
served as associate director for Natural Resources,  Energy, and Science at the at the Office of
Management and Budget (OMB), where he developed the Program Assessment and Review tool.
This tool received a Harvard award for innovations in American government. Mr. Peacock has
also had practical  grounding  in the political system, including  experience  on the  House
Committee on Transportation and Infrastructure.

Performance Measurement
Honorable Marcus C. Peacock, EPA Deputy Administrator

Even while working at OMB, Mr. Peacock said he was aware of EFAB as one of the most valued
advisory groups at EPA. He described two aspects of  his  current position:  he fills in for the
Administrator at events  and he serves as chief operation officer, a big  responsibility that
underlies his appreciation for EFAB. Decreases in EPA's budget are stressing the  organization,
so EFAB is now even  more important in helping EPA  become more effective  and productive
with fewer resources. He looks forward to working with EPA's new Chief Financial  Officer
Lyons Gray.

Mr. Peacock then touched on three areas of EFAB work. First, he reiterated the Administrator's
great interest in addressing water infrastructure  issues, which is a top priority for the agency, can
be controversial, and has raised debate on SRF  capacity. EPA must find ways to raise more
capital for  water infrastructure. Mr. Peacock cited innovations such as Maryland's flush fee.
Second, financial assurance is a complex area. The Office of  Solid Waste  and Emergency
Response (OSWER) is working on a plan to  address some of the issues EFAB,  the General
Accounting Office,  and Inspector  General  have raised  about  financial assurance.  EPA
appreciates EFAB's work in this  area. Third,  he cited  the many potential benefits,  including
health, of the Smartway Transport program. EPA needs to entice more firms to  get involved in
this program.

Mr. Peacock then discussed performance measurement. He is currently installing a performance
measurement system at  EPA, an  agency  with  an $8 billion budget  that has  no  quarterly
management report. He wants to initiate one in  September for delivery in October. EPA has two
lines  of  business:  Headquarters is a large "document  manufacturing machine" on important
regulations, guidance, and reports to Congress, which needs to transform. The Regions focus on
location-specific issues. He had asked four clusters of Regions to identify priorities, so EPA can
track progress on a quarterly basis against their  own priorities. This should help EPA achieve its
goal of protection of human health and the environment  faster and more rationally. He hoped to
build on it and accelerate pr4ogress on the agency's goals.

Mr.  Peacock then  fielded questions from the  group. Ms. Diefendorf asked how  EPA would
gauge Regions' performance and how that would feed back to the grantees. Will there  be
interplay between what grantees do, regional performance measurement,  and reports back to
headquarters? Performance measurement has two aspects, he said, tracking progress of Regions

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on  self-selected priorities and a broader  organizational  assessment. Next year, he  will add
performance measurement grants.

When asked how to measure nutrition loading, such as in the Mississippi River, on a  quarterly
basis, Mr. Peacock said they are trying for outcome measures, including quarterly, but they need
to link outputs to outcomes.  Mr. Hughes pointed out that outcomes depend on a variety  of
players, for example, EPA cannot control  and is losing ground on urban sprawl and is simply
trying to prevent a downward slide. How can progress be accurately measured? Some programs
are penalized for  this. Mr. Peacock replied that it was a matter of setting an outcome  goal, for
example, "the quality of the river will drop by 5 percent, not 10 percent, as
expected." It is important not to shy away from measuring performance;  it just means that more
needs to be done.  In the end, programs, not personnel, should be measured, even when outcomes
are not controllable.

Regarding the Administrator's and  EFAB's  own emphasis on water infrastructure, Mr.  Wise
asked whether the agency would prepare an overall strategic approach  on  water infrastructure
from top to the bottom, from Federal to  state to local levels? Such a plan would help  EFAB in
setting its own strategic agenda for effective support to EPA.  Mr. Peacock  said he  would
mention this good and sensible question to Mr. Grumbles.

Asked if EFAB should continue to struggle with the issue of arbitrage restrictions, when no relief
seems possible, Mr. Peacock suggested shifting EFAB resources elsewhere,  as these restrictions
are not likely to be changed.

Mr. Turner asked how Mr. Peacock would develop a program to measure progress  in the water
and  water  infrastructure field  in  terms  of levels  of performances?  Many performance
measurements for drinking water and wastewater industries exist, but the gap is overwhelming.
Mr. Peacock said  many promising areas are being explored; for example, many technologies are
available to decrease repair costs, for example, finding and repairing leaking pipes. The scope of
the problem  should  change to finding  ways to  greatly  reduce current costs  or change  the
assumptions that go into that analysis.

Mr. Merrill  pointed out that some outcomes  are  simply getting  people together and  building
relationships. How can this be addressed through restructuring of performance measurements,
and how can EPA evaluate long-term policy shifts? He cited the example of the root causes of
sprawl as shifts in land use policies, which can take years to occur. How can EPA  measure
performance in this case?  Mr. Peacock provided two  answers:  First,  some things should  be
measured, even if imperfectly, for example, measuring meeting impact by guessing how many
people each  attendee will talk to about the meeting. Second, performance measurement systems
do  not just  identify failures, but inform  conversations  better and identify ways  to  improve
performance. He added that quarterly reports must always incorporate a qualitative discussion.

Asked how reductions in Federal funding for EPA will hurt state projects, Mr. Peacock replied
that the Presidential  request for $3.4 billion represents a steady SRF volume of $3.4 billion,
which means putting in $6.8 billion from 2003 though 2011; every time Congress pays  ahead of
that, it is going to be less than last year. SRF money does revolve, which  is different than cutting
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a program that relies on new funds to "keep the bathtub full" each year, when the drain is not
plugged. The policy will not change and will probably decrease more.

In answer to a question, Mr. Peacock foresaw some kind of periodic review by broader EPA
management to reassess its strategic  plan  based  on  performance measurements.  The annual
performance report  is a good one; the quarterly report could eventually become public, which
may influence the annual report. EPA also needs to test links between outputs and outcomes, but
EPA does not track outputs yet.

On earmarks,  Mr.  Peacock said interest  in  reducing  earmarks has been  weak, but this  is
changing. The number of earmarks that EPA suffered last year has been reduced by almost half.
Mr. Mahfood added many in the field would support EPA reducing earmarks.


Workgroups Report Out

Mr. Meiburg reconvened the meeting  by noting that the first workgroup to report  had worked
very hard the past six months on very important issues, such as water infrastructure.

Loan Guarantee Program and Application of Useful Life Financing Concept to SRFs
George Butcher

Mr. Butcher first reported on the activities  of the  SRF Loan Guarantee Workgroup. Failing  to
identify  any  significant  benefits  from  a new  loan  guarantee  program,  the  workgroup
recommended  against creating  one.  Loan  guarantee  programs in  general  provide  limited
benefit—that is, avoiding the cost of obtaining privately provided municipal bond insurance—to
borrowers with market  access.  In the  last  paragraph of page one  of the report, the bulleted
paragraph that says "which includes most water and  sewer  systems"  should read "many," not
"most." Additional costs may be imposed  on a borrower using a loan guarantee system, such  as
the Federal cost-cutting requirements, where applicable to SRF loan guarantees. Confusion in the
market may be caused by the proliferation of programs,  particularly for small  borrowers. Two
areas of additional  study exist: Can existing  loan guarantee programs be more effective, and
could a new loan guarantee program targeting  small unrated borrowers accelerate environmental
activity in that sector?

Mr. O'Brien pointed out such programs have supply and demand side incentives. For rateable
communities with access to funding, loan guarantees increase SRF loan attractiveness to city
councils  and utility  boards. Mr. Butcher said limited benefit from loan guarantees would come
from making the SRF Program more efficient, for  example,  by reducing vehicle loan costs. On
the other hand, some  existing obstacles—so-called cross-cutting requirements—are themselves
obstacles that loan guarantees cannot overcome.

Mr. Dillon asked if the interest in loan guarantees was not in stimulating more activities and
making more funds available, but in how  to extend the  loan period? Mr. Butcher agreed that
giving a  subsidy for the first 20 years and a loan guarantee for amortization of the loan beyond
20 years provided a nice package that facilitated subsidy provision and lowered overall cost by

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extending the amortization period. EPA is not interested in loan guarantees to stimulate more
interest in startups or creating funding, so  much as benefiting existing projects. Mr. Dillon also
noted that loan guarantees could also assist certain recipients whose ability to get loans has been
capped, as it could still be provided above the level of the cap.

Mr. Tozzi pointed out that there were loan guarantee programs now in the government that are
not being used at all. The Administrator, Deputy Administrator, and Associate Administrator all
want real answers, not just a report. A billion-dollar gap exists, and the board is saying the nature
of the gap needs  to be addressed.

Mr. Meiburg suggested that part of the reason that various constraints make loan guarantees
unattractive, compared with other sources of funding. Mr.  Butcher added that private markets
provide loan guarantees as well. The intent is not to disrupt the private market, which is working
well, for  the limited benefit of reducing the cost of already available guarantees.

Mr. Butcher said the workgroup had recommended that the Board send the report forward and
endorse the workgroup's continued work on the two areas they had identified for further study.
The Board members agreed to send the report to the agency,  with minor amendment of the
wording  noted earlier and possibly offer a special briefing to increase  the agency's receptivity to
the recommendations.

Mr. Butcher then turned to the Application  of Useful Life Financing to SRFs workgroup's report.
First, the workgroup could not see any financial reason for EPA to impose requirements relating
to the  pace of recycling. Second, there is no financial reason for  not allowing SRFs to make
individual decisions. EPA should delegate  to each state the decision whether to limit its loans to
20 years  or make them longer.

The Board has previously concluded that use of extended amortization periods corresponding to
the useful lives of finance facilities is a reasonable approach to making environmental facilities
more  affordable and allocating costs of environmental facilities among various generations of
rate payers.  An  earlier EFAB report did not answer the question whether that general concept
should be applied to SRFs.

A specific recommendation is, to the extent that a financing period  beyond 20 years is currently
authorized by statute, the Bard recommend EPA approve requests by  state SRFs for approval of
useful  life financing up to 40 years. Even though even  longer financing periods might make
sense,  40 years seemed like  a significant improvement on what exists now, one that should not
raise too many  political  concerns. The workgroup also recommended that, to the  extent an
extended financing period  is  not currently  authorized  by statute,  EPA support a statutory
amendment authorizing useful life financing up to 40 years. This second recommendation clearly
applies to drinking water, and,  based on EPA's determination proper interpretation of the CWA,
may or may not apply to clean water.

Mr. Meiburg summarized the sense of the group that, in contrast to a loan guarantee program,
which  may be too constrained to be effective, the extended useful  life type of loan would help
SRFs work better. Mr. Butcher said it more strongly: even in the absence of cross-cutting in of
additional requirements, a loan guarantee  program would have a very modest benefit.  This is

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because, except for unrated entities, a very effective loan guarantee program is already privately
available; whereas, adoption of useful life financing, both within the SRF context and more
broadly, would make projects more affordable, therefore, creating the possibility of financing
larger amounts of capital at the same cost.

Mr.  Hughes  asked what  the  cash flow analysis  would look  like with extended  useful life
financing? Capitalization may need to be maintained at a little higher level. Mr. Butcher noted
that  revolving the money more quickly does not provide more assistance;  20 years versus 40
years does not increase or decrease the value of the  subsidy, but 40-year amortization permits
lower debt service and, therefore, lower rates.  Asked whether an extended term of financing
would encourage states that are not currently leveraging to do so, Mr. Butcher said that has not
been discussed. Mr. Sawyers thought a 40-year term might allow larger loans; the EPA's  $3.4
billion target would not necessarily change because you are taking  out a larger loan. Longer
terms in the drinking water program have not affected recycling of funds; it does address lower
payments, potentially larger loans for  smaller applicants who need  the funding. Mr. Butcher
noted that with the very big gap that exists in water infrastructure funding, financial devices  such
as this one only have a limited impact. The combined thinking of the two workgroups is  that,
even though useful life financing only makes a dent in a huge problem, loan guarantees cannot
realistically make any dent. He also addressed Ms. Agriss concern, saying that states doing direct
loans are really underutilizing their capital, which some people may say is irresponsible if they
have needs beyond what they can fund. Means are available to increase the amount of funds that
they have to more than  offset any  decrease in the amount of funds that are being recycled as a
result of a longer utilization.

Mr.  Downard reminded the group that extending useful life financing would not apply to the
entire portfolio.  There will always be a mix in  the product base, and extension will make that
workable and livable. It provides an opportunity to do some things for  some places that could not
otherwise afford it. Mr. Jarocki said it was a matter of affordability. Communities think  they
cannot afford the SRF. Lengthening the term allows them to decrease the annual cost, generating
more revolving dollars. Extending useful life financing moves communities toward taking the
money and helps solve certain problems in the SRF Program. Mr. McCarthy suggested that Mr.
Peacock rethink the metric of $3.4 billion in light of the actual subsidy being more when the term
is longer.

Mr.  Wise noted the useful life recommendations will have a stronger linkage to affordability
issues, which is good. He suggested beefing up the primary recommendation. Mr. Hughes noted
that the affordability report tried to take a message to the household level, whereas the useful life
addresses community affordability. He said he would like to take some of the savings and create
a kind of targeted household. The greatest beneficiaries of useful life financing are not those with
affordability problems. Mr. Butcher noted that the report does not address refinancing, which is a
significantly lower priority with the reduction in funds.

Mr.  Meiburg summarized the sense of the board as generally supportive of  the draft report's
recommendations, but members needed some more time to look at the final wording. The board
agreed to leave  consideration  of the report open through April 12 for comments by members
before the workgroup put together a final draft to circulate to all members for approval in e-mail
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replies. The board may want to extend its discussion of these issues to its August meeting, when
they will plan for work for the year ahead and how to proceed in areas such as this one.

Mr.  Butcher then  returned to the Loan Guarantee Workgroup's draft concept paper,  which
touched on Ms. Agriss' concern on arbitrage relief. The gist of the paper is, instead of trying to
change a law, change  the facts so the law does not apply. Given the perpetuity requirement that
applies to SRFs, all subsidies provided to borrowers ultimately come from either accumulated
earnings already received or current investment earnings on SRF equity.
Use  of investment earnings to pay debt service subsidies, either directly or indirectly, is what
triggers IRS arbitrage  restrictions. The idea is to provide the same subsidy, but for a purpose that
does not create the arbitrage  crossing.  Two examples  are providing  capital  assistance from
accumulated or current earnings, so  the perpetuity  requirement would continue to be met, or
provide operating assistance, again from earnings. If the  subsidies were provided in the form of
operating assistance, the result could, in fact, be the same as  achieving arbitrage relief in full.
Programs could be structured so that the investment of SRF equity is completely unrestricted.

This concept paper requires a significant amount of  additional discussion before the workgroup
could make a recommendation. The workgroup sought the board's encouragement to continue to
investigate the issue and return with a report, if appropriate.

Mr. Sawyer thought it was a great idea that certainly needed more though. He was not sold on
the idea of using the additional funds for operating  assistance, although it can be used for that
purpose as  well as  administrative assistance. Certain criteria would need to be met, for instance,
a demonstrable water quality benefit, but the additional funds would really provide additional
benefit to the SRF Program and for catalyzing projects.

Mr. Meiburg summed up  the sense of the meeting  that the Board's  next step  was to set up a
meeting with Mr. Grumbles fairly quickly to review loan guarantees, useful life financing for the
SRFs, and this concept paper, and, given charges from the Administrator, Deputy Administrator,
and Mr. Grumbles, start the process of future work. He asked if the Board was comfortable with
following these steps,  to which they all agreed.

Environmental Management Systems
Rachel Deming

Ms. Deming said that how to move forward on EMSs is a challenging question. Definitions of
EMSs continue to evolve and have never been clearly defined. Creating benefits from EMSs is
also a hurdle. The workgroup's charge was broad, and it was difficult to  select a focus; however,
even though EMSs are a difficult issue, there is tremendous interest across the agency to move
forward on them.

The  workgroup decided  to  focus on two questions and  break the  workgroup up into three
subgroups on equity, debt, and insurance. The first question is: would  branding some form of an
EMS give the market  segment something of value?  Shana Harbour's  office is doing something
that goes in this direction: an EMS Plus System called "Performance Track" that  goes beyond
the traditional system  by  addressing a broad range of issues. To answer this first question, one
needs to  identify the  performance indicators  that an EMS or  some branded form of this will

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address. The American Chemical Society has a form of EMS they are trying to sell to different
market segments. Working with them has helped inform the workgroup on some of the market
issues. Ms. Deming thought the workgroup could come up with a list of indicators that coincide
with what would be of value to the marketplace. She mentioned that Board member Helen Sahi,
not present, could help guide this subgroup and Michael Curley on the insurance segment.

The  second  question the workgroup would like to address is: can EMSs assist in identifying,
assessing, quantifying, and/or reporting risk in ways that are useful to the marketplace? EMSs
are supposed to avoid surprises through constant assessment of performance and identifying risk
factors. EMSs provide a platform to build  in proposed regulatory changes or new information,
for example, on toxicity of some chemical. The value of EMSs may be enhanced by upcoming
required  SEC financial disclosures for environmental liabilities. She suggested getting in touch
with Shana Harbour and Tim McProuty if anyone wants to join any of the three subgroups.

Mr.  Charles Kent then noted that, because an EMS is mostly a process, it is not ideal for the
financial community. There is a question about whether information from an EMS  can feed into
information in a different model or decision.

Mr.  Merrill asked, given anecdotal information  and  some  analyses  say  it is not  clear that
environmental investments create financial value,  when would the workgroup come to its  own
conclusion and what will it do if the answer is no? Ms. Deming responded that, if the answer is
no, EPA will want them to figure out what the barriers  are that prevent these investments from
somehow being translated into the marketplace. But, they believe there is some value and interest
"out there" in these tools; it has just been hard to quantify.

Mr. Meiburg summarized the discussion by saying that, since August, the workgroup had  done a
lot of work to refine the analytical framework for looking at the EMS question and has set up a
subgroup structure in order to proceed. A number of EPA  offices are obviously willing to
support them.  It was clear from the lively  and robust discussion  at the workgroup meeting the
previous  day that a high level of energy and enthusiasm underlies the group's work. He  then
adjourned the meeting for lunch.


Financial Assurance
Mary Francoeur

Ms.  Francoeur said EFAB's work  on financial  assurance  had  been a worthwhile  two-year
process,  resulting  in a final letter to the Administrator. The workgroup identified the issues
involved and developed recommendations,  but has not finished yet; it is a topic that can still be
refined. The workgroup's effort also brought EFAB two new and very important members in Ms.
Rice and Ms. Deming.  The letter to the agency represents  a process and broadening  of the
board's efforts. What is  important is that the parties responsible for the potential costs have the
capacity  to pay and take a stance and approach. The workgroup's next step is to move forward
on the captive insurance issues,  which is  not  quite financial capability  but a sort  of internal
insurance. Ms. Rice and Mr. Curley have been looking at these issues. On June 27, 2006, a
roundtable workshop will be held in New York to bring together a variety of parties and States to

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discuss how they look at captive insurance as potential creditors and at industry and parties who
use captive insurance and why they value it.

Many issues still  remain to  be resolved: insurance, bank facilities, different types of credit
substitution mechanisms,  the major issue of financial reporting and how those requirements
relate to financial assurance requirements, and the question of costing. Corporate guarantees may
be worth investigating. They  had decided that corporate guarantees, their requirements, and the
form laid out in regulations  were fairly clear; much is not known about their effectiveness;
however, the workgroup shelved the issue,  because they did  not see any problems in who is
providing the corporate guarantee. As long as these guarantees have the financial capacity, meet
requirements of the financial test, and meet regulatory requirements, they do not require much
input by the board now.

Ms. Deming followed up by noting that the June 27 roundtable in New York may be of broader
interest in terms of other issues, such as brown field redevelopment. Ms. Hernandez concurred,
mentioning use of captive insurance in construction defect litigation risks for affordable housing
providers, who have insufficient resources of their own to fund  the insurance; this was quite a
good vehicle for this particular risk. They also looked at captives for redevelopment agencies
who have multiple insurers and also multiple projects for which they want to use captives to
cover private developers in the redevelopment area.

Matt Hale, Director, EPA Office of Solid Waste

Mr. Hale was pleased with the final  letter, which had thoughtful and helpful recommendations.
The financial test is part of a larger picture. His office is looking broadly at the effectiveness of
current   financial   assurance  requirements  and   upgrading  them,   including   improving
implementation of current regulations and upgrading  pieces of the regulations; the financial task
issue  relates  to  the latter. His office and  many states,  including  California, have also been
working  on  upgrading  cost  estimations.  His  office is  also analyzing file  information  and
followup to the Super Fund 120-day report; they are  looking at whether to implement 108(b) of
the Super Fund, which gives EPA  authority to identify high-risk categories of industry and
develop financial assurance to prevent Super Fund costs. They are also studying how many
requisites end up on the National Priorities List or as targets of removal. If there are a significant
number, does this reflect a failure of financial assurance or are there ways to improve financial
assurance to reduce the burden on the Super Fund or the public taxpayer? Judgments on this will
come later this year.

On regulatory issues, captive  and other insurance issues are on  the table. His office is committed
to doing  a plan by July, in which they will look explicitly at the kind of regulations that make
sense and a path forward on the issues that EFAB is addressing.

The timing of EFAB's work on financial  tests and captive insurance, particularly the June
roundtable, therefore, is good. The financial test and captive  insurance  issues  generate a lot of
discussion. He then turned to Ms. Bromm for her input. Mr. Meiburg first thanked Ms. Bromm
for her presentation with  Rosemarie Kelly last August,  which was a seminal event and very
helpful to the board. EPA has identified financial assurance as one of its national  enforcement

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priorities. He hoped data collected as part of that will continue to provide feedback that will help
the Board identify and make recommendations.

Susan Bromm, Office of Site Remediation Enforcement

Ms.  Bromm first noted that the enforcement  initiative is not about how many  enforcement
actions EPA takes, but whether EPA can get good compliance results for financial assurance.
EFAB is raising a lot of attention on the issue, which is a positive development.

She  said she  also  liked the recommendations  on the  financial test, which go  a  long  way to
address  EPA concerns on  enforcement and EPA's ability to assure compliance with  these
requirements. Capacity building is  an ongoing  effort to keep  folks  in the states and  EPA
knowledgeable enough to do a good job assessing compliance with these requirements.

The  Enforcement Office has a pretty formal  structure  on managing enforcement priorities.
Financial assurance is one of five or six priorities. The office sets  goals for itself and has an
enforcement strategy; the Regions make commitments on how  they will fulfill the priority's
goals. All the Regions are making  good progress on their commitments, specifically on the
"Resource Conservation and Recovery Act closure/post-closure  financial  assurance corrective
action" and looking at Super Fund documents, such as  consent decrees with financial assurance
requirements. Many  states,  such as  New York and California, have embraced  this; it  is very
much a Federal/state effort.

Some enforcement actions are "brewing." Her office would like to interact with EFAB on them,
as it  learns more, and she looks forward to a productive working relationship.

Mr. Meiburg commended Mr. Barnes and Ms. Francoeur for their leadership on this project as
well  as  Mr. Hale and Ms. Bromm for their  steadfast  support. Ms.  Francoeur then  added that
EFAB members might consider commenting on a  draft proposed  rule making from the
Government Accounting  Standards  Board  on reporting environmental liabilities  for potential
environmental cleanups. The deadline for comments is May 1.

Innovative Environmental Financing Tools
Michael Curley

Mr.  Curley reported  on  the work  of the Innovative Financing Tools  workgroup. He first
mentioned that they expect a response shortly on the restoration letter they sent to the  EPA
Administrator. Regarding the Smartway Transport program, Ms. Bowie, Mr. Mr. Prouty, and
Ms. Belaga, and Mr. Curley had met  with OAR in November. The poor results of the program to
date  had led OAR to ask for EFAB's assistance. One problem  was that increasing  truck
aerodynamics has had severe logistical problems, for example, trucks with aerodynamic features
that cannot pull up to bays to unload.

More generally, 80 percent of trucking companies  are small and have little access to capital; they
create more pollution, but do not have good enough credit to obtain loans to address the problem.
Many of the large  trucking companies have  lots  of funding, but still do  not participate in the

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program. What kind of financial incentive would help? Reducing  NOx emissions can bring
$2,500-$3,000 per ton; each of these trucks produce 3,500 Ibs a year or 1.75 tons. A reduction in
NOx is about 20 percent, so that is about 700 Ibs., or 35 percent of a ton, which means $1,000 is
left on the  table. Collecting that NOx credit from small trucking companies  and monetizing it
would represent a significant amount of money. These trucks are in  service for 20 to 25 years.
The present value—just the taxable rates of $1,000 a year—is about $7,500 in 10 years. If $7,500
can be generated for a $14,000 problem, this financial incentive is worth looking into.

A related question is that the devices that reduce CO2 and NOx also reduce fuel consumption;
but, the devices that reduce PM have no impact on fuel at all, so the OAR wants to build  a
program  that encourages truckers to buy the package  of reduction systems, including for PM.
Just telling truckers that the package will save money on fuel has not been enough to get them to
buy the package.

The next step is to write a memo with what the Board thinks are correct assumptions as well as
questions for OAR  and build  a bifurcated incentive program  that provides  small trucking
companies  with access to capital at low cost and some kind of incentive for large trucking
companies. OAR is definitely interested in EFAB's ideas.

A third  question concerned the Diesel Retrofit Program. A mechanism could  be devised that
allowed,  for example, a utility with a nonattainment problem to collect NOx credits by helping to
pay for diesel retrofits for the city's fleet of garbage trucks.

Ms.  Belaga  explained  Connecticut's  "Feebate  Program,"  which  is  of  great  interest  in
northeastern states that have signed a GHG agreement; the idea is to  lower the sales tax on cars
that do not contribute as many GHGs and charge more for cars that do. They  are now watching
to see how well it works. It may force the auto industry to increase CAFE standards. The only
cost to the State is the rebate form, which is covered by the fee. Mr. Curley said the workgroup is
looking at using vendors to finance retrofitting.

Board members also made  a number of suggestions for the workgroup. It should consider that
truckers save money by retreading their tires a couple times, but the single tires in the Smartway
package  cannot be retreaded or capped. The workshop should perhaps be in touch with tire
manufacturers promoting the super  single tires,  such as Michelin. Another  suggestion was
looking  at the potential of retrofitting school bus fleets, which could have a significant health
benefit as well. Finding a way to finance such diesel retrofits for the benefit of schoolchildren
and school districts could be a winner. Such a program was financed in Georgia through an
outstanding enforcement action  against Georgia-Pacific that required them  to  set aside  $3.5
million for achieving NOx emission reductions.

Continued Discussion on Combined Operations of the SRFs
James Smith

Mr. Meiburg then returned EFAB to discussion of combined operations of CWA and SDWA
SRFs from the  previous day. Mr. Smith began the discussion by  saying that he  understood the
Board's concern about sending a weak letter on the subject to the Administrator. He proposed
redrafting the letter, having  the chair review it, and then circulating it for Board review or go

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forward with the letter as modified. Mr. Smith also suggested that Ms. Toledo and he could meet
with Mr. Grumbles, Mr. Ingebretson, and Mr. Peacock to explain why the Board's points should
not be considered threatening.

Ms. Deming questioned whether the workgroup should keep working on joint operations, given
the tensions it had created? Mr. Smith responded that it was really up to the agency to act; EFAB
would be available for advice. Mr. Meiburg added that it was professional courtesy to make sure
EPA  clearly understood EFAB's points;  the Board would then have done its job and could
always be available if EPA needed more  advice or clarification. Mr. Hinds  agreed that EFAB
should not act as a go-between for EPA and the States on these issues. Ms. Francoeur noted that
the States have indicated they wanted joint operations, so EFAB had delivered the message to
EPA, outlining  clear reasons to support the idea.  Mr. Downard thought that, if EFAB believes
joint  operations are right, it should make a  strong statement, despite the opposition, or EPA
would drop the idea.  In the end, Mr.  Meiburg  suggested and  Board members  approved
modifying the letter as  discussed, giving the Board  two weeks to review it, and then  sending a
final version to  the Administrator.


Wrap-Up and Next Steps
Stan Meiburg

Mr. Meiburg spent a few minutes summarizing main points from the various presentations and
discussions that day. He thought the group had been extraordinarily productive. Ms. Diefendorf's
presentation on work in her Region on "green business" and how they are  tracking  outcomes
from  useful EMSs  to help the agency was very enlightening. The way Mr. Jarocki's workgroup
has been tracking results on SRF work also had something to teach the board.  The main message
is that EFCN's strength is how they work together.

Mr. Peacock had then described performance measurement at EPA, providing an opportunity for
Board members to feed into the performance measurement process. The Board had  agreed to
send an update  on loan guarantees to the agency. The Useful Life workgroup  will circulate their
document to the board for comments by April 12.  It is pretty clear that the board needs to set up
a meeting with Mr. Grumbles on a number of topics, not only loan guarantee and useful life
issues, but  also future EFAB missions.  Many of the issues—including  affordability—are
converging. It is clear that, given the Administrator's charge to EFAB to engage with  NACEPT
on the infrastructure issue, EFAB will  have more work and will be engaging in  some high-level
discussions with the agency to help frame an agenda.

The EMS workgroup has also made great progress, has created three subgroups, and  identified
two questions. The agency has great interest in this  topic, on which  thinking  had matured since
the Board took it up five years ago. There is great potential for progress there and he thanked Ms.
Deming for pulling that group together.

The Financial Assurance workgroup has submitted a letter on  the topic to the Administrator and
organized a roundtable on June 12,  2006 in New York.  The Board will discuss   financial
reporting and cost estimation at their  San Francisco meeting. In addition, the Board  agreed to

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modify its letter on combined operations  before sending it to the Administrator. Mr. Meiburg
concluded by saying that the EFAB was one of the very few EPA advisory committees for which
members not only regularly attend meetings, but work hard in groups and on reports. Very few
other advisory committees have matched their efforts.

Public Comment Period

When  no one in the audience took the opportunity to speak, Mr. Hinds suggested that EFAB
develop some kind of orientation program for new EFAB members, saying he would e-mail his
suggestions to Mr. Meiburg and asking other new members to do so as well. Mr. Meiburg said
Ms. Bowie and her staff  could follow up. Mr. Downard suggested the orientation also include
members who have been reappointed once.

Mr. Sawyers then returned to  the issue of combining operations on SRFs, suggesting the Board
review the environmental SRF document, because there will  be a requirement for some major
changes.  In light of funding reductions, pooling both the drinking and clean water funds is quite
possible. EPA's structure  would remain the same, but at the state level, it would be pooled and at
the behest of the state to decide how the funds should be used based on priorities. A state such as
Maryland could  easily  use an underutilized fund to supplement the other, if overextended. He
recognized that the 30 percent transfer existed, but EPA might at least offer the option to states to
prioritize areas.

Mr.  Tozzi  asked  the  Board to reconsider  its  organizational  structure  in addressing  the
Administrator's current charges to the Board. Some workgroups have submitted their reports and
outlived their usefulness.  Board members should develop options before that August through e-
mail, etc. as  there was much to consider; for example, EFAB had the opportunity for meaningful
work on the  demand side  of the curve. Mr. Wise suggested also circulating a paper EFAB wrote
several years ago on environmental revolving funds, part of a series of papers on SRFs, in the
1990s, as a template for  how they should proceed. Mr. Marsh urged the Board to  think about
synergies from  a watershed basis or at least the interconnection between point and nonpoint
sources.  Nonpoint finance  could alleviate the gap in point  sources. Mr. Meiburg agreed to
respond to these matters before the August meeting.

Board  members then thanked Mr. Meiburg for  his excellent facilitation. Mr. Meiburg  then
adjourned the meeting.

Adjournment                                                            (3:55 pm)
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Designated Federal Officer:
A. Stanley Meiburg,  DFO, EPA

Honorable Pete V. Domenici, United States Senate

State and Local:
Kelly Downard, Chairman Louisville Metro City Council
Honorable Vincent A. Girardy, Mayor, Peapack & Gladstone, New Jersey
Steve Grossman, Executive Director, Ohio Water Development Authority
Gregory R. Mason, As st. Executive Director, Georgia Environmental Facilities Authority
Dr. Andrew Sawyers, Program Administrator,  Maryland Water Quality Financing, Maryland
Department of the Environment
Billy Turner, President, Columbus Water Works

Business and Industry:
Terry Agriss, Vice President, Energy Management, ConEdison
Donald Correll, President and CEO, Pennichuck Corporation
Rachel Deming, Associate General Counsel, Ciba Specialty Chemicals Corporation
Stephen Mahfood, President Mahfood Associates
Cherie Collier Rice,  Treasurer and Vice President of Finance, Waste Management
Dr. Jim J. Tozzi, Multinational Business Services

Banking, Financial, and Legal:
George Butcher, Managing Director, Municipal Finance, Goldman, Sachs, & Co.
Michael Curley, Executive Directory, The International Center for Environmental Finance,
Towson University
Mary Francoeur, Director, Financial Guaranty Insurance Co.
Jennifer Hernandez, Partner/Co-Chair, National Environmental Team, Holland and Knight
Keith Hinds, Merrill Lynch & Co.
Helen Sahi, Director, Environmental Services Department, Bank of America
Greg Swartz, Vice President, Piper Jaffray & Co.
Sonia Toledo, Merrill Lynch & Co.
Justin Wilson, Waller Lansden

Associations, Organizations, Academia, and Public Interest Groups
A. James Barnes, Professor of Public  and  Environmental Affairs, Adjunct Professor  of  Law,
Indiana University
Julie Belaga, Co-Chair, Connecticut League of Conservation Voters
John Boland, Professor  Emeritus, Department of Geography and Environmental Engineering,
The Johns Hopkins University
Langdon Marsh, Fellow, National Policy Consensus Center, Portland State University
John McCarthy, Shelter for Life International
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Environmental Finance/Independent Consultants
James Smith, Bozeman, Montana
John C. Wise, Hidden Valley Lake, California


Dr. Richard Barringer, Director, Environmental Finance Center, University of Southern Maine
Mark Lichtenstein, Director, Environmental Finance Center, Syracuse University
Dr. Sam Merrill, Projects  Director,  Environmental Finance Center,  University of Southern
Dan Nees, Director, Environmental Finance Center, University of Maryland
Jeff Hughes, Director, Environmental Finance Center, University of North Carolina
Peter Meyer, PhD, Director, Environmental Finance Center, University of Louisville
Kevin O'Brien, Executive Director, Great Lakes Environmental Finance Center, Cleveland State
Heather Himmelberger, Director, Environmental Finance  Center, New  Mexico Institute of
Mining and Technology
Sarah Diefendorf, Director, Environmental Finance  Center, California State University at East
William Jarocki, Director, Environmental Finance Center, Boise State University
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Vanessa Bowie, Director
Vera Hannigan, Senior Program Analyst
Timothy McProuty,  Senior Program Analyst
Alecia Crichlow, Program Analyst
Susan Emerson, Program Analyst
Sandra Keys, Administrative Assistant
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