OFFICE OF THE CHIEF FINANCIAL OFFICER
CENTER FOR ENVIRONMENTAL FINANCE
NOVEMBER 2014
EPA 19OR14009
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INTRODUCTION
This report summarizes the work and accomplishments of EPA's Environmental Finance Program.
The two main components of the program are the Environmental Financial Advisory Board
(EFAB) and the agency-supported Environmental Finance Centers (EFCs). Both the EFAB and
the EFCs provide unique services to the nation, helping find ways to pay for sustainable
environmental programs and promote responsible stewardship. Together, these initiatives seek to
lower costs, increase investments, and build the capacity of public and private parties to support
environmental needs.
The EFAB is an independent advisory committee established to recommend ways that EPA can
address the growing environmental financing challenges facing the nation. First chartered in 1989
and operating under the authority of the Federal Advisory Committee Act (FACA), the EFAB
reports to the EPA Administrator and program offices on environmental finance issues, options,
proposals, innovations, and trends. The Board is comprised of approximately 30 members
appointed by the agency's Deputy Administrator. The membership represents diverse points of
view from those in state and local governments; the banking and finance communities; business
and industry; and non-profit organizations. The Board provides policy and technical advice on a
wide range of financial issues, with a particular focus on supporting the EPA's strategic goals and
cross-cutting fundamental strategies, as outlined in its Strategic Plan.
Environmental goals cannot be met without financing, which is essential to implementing state
and local programs. However, knowledge about how to fund environmental programs is often
limited, especially at the local level. As a result, there is a need to educate public officials on the
front lines of financial environmental facilities and services about options and tools available to
help them meet their requirements and ensure a healthy environment for the people in their
communities.
The EFCs are nine university-based organizations that provide innovative solutions to
communities to help manage the cost of environmental protection. The EFCs provide state and
local officials and small businesses with advisory services; education, publications, and training;
technical assistance; and analyses on financing alternatives. EFCs pursue various avenues of
education and training such as offering short courses on environmental finance for state and local
officials as well as graduate-level educational courses through regular university curricula. In
addition, the EFCs develop and publish case studies about financing techniques and serve as
clearinghouses for regional and state information on environmental financing and program
management. Other activities include providing outreach services by developing tools, training
courses, delivering lectures, or otherwise educating communities and relevant stakeholders about
financing issues. The EFCs have proven to be effective vehicles for promoting innovative
environmental financing techniques for states and localities.
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In addition to the EPA support, all of the EFCs attract additional funds through grants and contracts
with other public and private clients. During FY 2014, centers in the network operated at the
following universities:
University of Southern Maine (Region 1)
Syracuse University (Region 2)
University of Maryland (Region 3)
University of North Carolina at Chapel Hill (Region 4)
University of Louisville (Region 4)
Cleveland State University (Region 5)
Wichita State University (Region 7)
Dominican University of California (Region 9)
Boise State University (Region 10)
The EFAB and the EFCs provide financial experience and expertise outside of the Agency's core
competency of developing and implementing environmental programs. These programs also
complement each other - the EFCs share with the EFAB their real-world experience and the EFAB
members may also make their professional experience available to assist the EFCs in their work.
ENVIRONMENTAL FINANCIAL ADVISORY BOARD HIGHLIGHTS
The EFAB's charter was approved by the Deputy Administrator for another two-year term on
March 7, 2014. The charter renewal is in accordance with the provisions of the Federal Advisory
Committee Act (FACA), 5 U.S.C. App.2 and relevant Agency policies. The EFAB is in the public
interest and supports EPA in performing its duties and responsibilities. Some of the major
objectives of the EFAB are to provide policy advice and recommendations for:
Reducing the cost of financing sustainable environmental facilities, discouraging polluting
behavior, and encouraging stewardship of natural resources;
Identifying approaches specifically targeted to small community financing;
Creating incentives to increase private investment in the provision of environmental
services and removing or reducing constraints on private involvement imposed by current
regulations;
Removing barriers and increasing opportunities for the U.S. financial services and
environmental goods and services industries in other nations; and,
Developing new and innovative environmental financing approaches and supporting and
encouraging the use of cost-effective existing approaches.
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The Center for Environmental Finance (CEF) implemented a process to recruit EFAB members in
an effort to create a FACA committee that reflects a rich diversity of talent, expertise, experience,
and points of view necessary to provide balanced environmental finance advice to the
Administrator. This process involved frequent interaction with the agency's senior officials,
including the Office of General Counsel, Office of the Administrator and Office of Diversity and
Advisory Committee Management and Outreach. Along with the traditional outreach recruiting
efforts such as the Federal Register notification and recommendations from past and present board
members, CEF solicited recruitment on multiple Listservs, social media, targeted minority and
women organizations, and public interest groups. This effort resulted in the largest pool of
qualified candidates in the history of the Board.
The EFAB held two successful public meetings on December 12-13, 2013 and May 13-14, 2014.
The purpose of the meetings were to hear from informed speakers on environmental finance issues,
proposed legislation, and EPA priorities; to discuss activities, progress, and preliminary
recommendations with regard to current EFAB work projects; and to consider requests for
assistance from EPA offices.
Through these public meetings, EFAB developed independent reports on financing environmental
programs and activities. They issued reports making recommendations concerning programs and
activities managed by EPA's Office of Water, Office of Policy, and the Region 1 office.
COMPLETED PROJECTS
Municipal Energy Efficiency and Greenhouse Gas Emissions Reduction: Financing and
Implementing Energy Efficiency Retrofits in City-Owned Facilities (January 2014): At the
request of the EPA Region 1 office, the Board produced a report that would help smaller
communities understand the benefits of processes to develop and methods of financing energy
efficiency projects. The Board reviewed a vast amount of existing information and distilled it down
to a useable educational piece that will help communities, particularly those without dedicated
energy staff, decide whether and how to move forward on efficiency measures.
Utilizing SRF Funding for Green Infrastructure Projects (January 2014): The report analyzes
and explores the potential of the Clean Water State Revolving Fund (CWSRF) to provide credit
guarantees to green infrastructure projects within current program eligibilities and resources. This
opportunity could be especially attractive for the large state CWSRF programs and/or for states
that leverage their CWSRF programs. The findings in the report indicate that some CWSRF
programs have reached a point where they may have the capacity to expand funding for green
infrastructure projects by offering credit guarantees at the same triple-A ratings enjoyed by most
CWSRF loan programs. The report also discusses other program strengths that could more than
double these capacity estimates. The report makes recommendations on the process needed to
realize these potential program benefits. At the request of the EPA's Office of Water and the White
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House's Council on Environmental Quality, the EFAB also produced a three-page summary of the
larger technical report.
Transit-Oriented Development for Sustainable Communities (July 2014): The EFAB was
charged with developing information regarding financing tools and strategies that could be applied
to transit-oriented development (TOD) for sustainable communities. The Board hosted a workshop
on transit-oriented development and a roundtable on environmental infrastructure investment.
These meetings brought together many government, industry, and finance experts with real-world
experience in financing and implementing development projects. The EFAB prepared a report to
the agency suggesting that public-private partnerships (P3s) provide access to alternative forms of
financing that would enable TOD project directors to more easily harness private developers'
expertise, industry innovation, and accelerate the timetable of meeting economic development
goals. The Board also recommended that the EPA identify means to improve the P3 process,
especially as it related to TOD, to further the environmental and economic development benefits.
Review of EPA's Draft Financial Capability Assessment Framework (September 2014): The
EFAB was asked to review the draft of the revised Financial Capability Assessment Framework
by the Office of Water to ensure that the document identifies appropriate examples of additional
information that communities could provide to supplement the findings of EPA's two-part
assessment process identified in the Combined Sewer Overflows: Guidance for Financial
Capability Assessment and Schedule Development report of 1997. The Board evaluated the
existing framework and recommended the inclusion of 10 additional metrics, in conjunction with
the existing metrics, for consideration in the financial analysis. The EFAB also recommends that
the following qualitative factors also be considered in the framework: (1) extraordinary
considerations, (2) additional system priorities and environmental/regulatory matters and (3) small
system considerations.
ENVIRONMENTAL FINANCE CENTERS HIGHLIGHTS
The financial outreach services provided by the EFCs help the regulated communities to meet
environmental needs by identifying ways of cutting, lowering and shifting costs, and increasing
investments in environmental systems. These accomplishments, to date, have made an important
contribution to environmental progress, but much still needs to be done and their work remains an
ongoing process.
UNIVERSITY OF SOUTHERN MAINE
Provided assistance to sustainable communities grantees through resource development,
one-on-one assistance, national webinars, and in-person events on topics such as
implementing and financing green infrastructure; auditing development codes for barriers
to low impact development; integrating water infrastructure investments and planning into
local and regional sustainability planning; conducting asset management for water
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resources; linking water resources and economic development in rural places; revitalizing
brownfields; building resiliency to hazards; and, connecting livability planning to
combined sewer overflow remediation efforts.
Undertook efforts to pursue new separate funded projects assisting state agencies and the
EPA Region 1 with needs including fiscal analysis of alternative development patterns,
healthy communities and food waste and small water systems finance and management.
Completed a report on the economics and finance of Maine's water resources and
infrastructure in collaboration with The Nature Conservancy with support from the Doris
Duke Charitable and Elmina B. Sewall Foundations, with a focus on the opportunities to
protect and provide water resources at lower costs.
SYRACUSE UNIVERSITY
Facilitated the Puerto Rico Recycling Partnership (PRRP) as a service to the Puerto Rican
government and the EPA to promote materials source reduction, clean composting, reuse,
and recycling through a working partnership including government (at all levels), non-
profit organizations, citizens, environmental groups, and the private sector. The PRRP is
designing programs, educating the public, and ensuring effective implementation.
Partnered with the New York State Association for Reduction, Reuse, and Recycling to
develop programs in the Hudson Valley that serve communities seeking to start or enhance
their waste reduction programs.
Partnered with the Department of Sanitation of New York on their NYC Compost Council
to establish a best management practices protocol for hundreds of existing and new
community compost sites throughout all five boroughs of NYC.
Worked together with EPA and Onondaga County's Save the Rain program to plan and
facilitate the first ever National Green Infrastructure Communities Summit in October
2013, inviting and hosting communities from around the country. Syracuse's critical
involvement in the Save the Rain program has generated many successes in Onondaga
County and communities throughout New York State, the EPA Region 2 office, and
beyond by allowing Syracuse to transfer knowledge and technical training demonstrated
first in Onondaga County.
UNIVERSITY OF MARYLAND
Providing technical support on the Maryland Smart Energy Communities (MSEC)
program. The MSEC program, which is administered by the Maryland Energy
Administration and funded by proceeds from the Regional Greenhouse Gas Initiative, is a
model for community-scale energy policy and management. Maryland municipalities and
counties join MSEC when they adopt two of three policy goals related to building energy
efficiency, renewal energy generation, or transportation petroleum reduction. Upon
adopting the policy goals, setting up a system for tracking energy patterns, and establishing
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a plan for meeting the goals, communities receive a grant to kick-start their goal. Through
recruiting, workshops, webinars, tutorials (i.e., energy Star portfolio Manager), and on-site
visits, the EFC has engaged over 50 Maryland communities in the program, which is
intended to be more than a one-time grant, and instead an on-going opportunity for
communities to access funding, build a network of peers, develop innovative energy
projects, and serve as leader for local businesses and residents.
Worked with the Maryland Department of Natural Resources Chesapeake and Coastal
Service to provide a framework for incentivizing local efforts to revitalize working
waterfront communities and economies throughout the State. Known as Phase 1, the EFCs
objective was twofold: 1) identify opportunities for state leaders to employ innovative
financing policies and tools in support of local working waterfront initiatives; and 2)
provide Maryland with a recommended structure for establishing a working waterfronts
program within the agency.
The Maryland EFC found that the working waterfront development issues are uniquely
local in nature and require community leaders to address and react to a myriad of issues
including cultural and heritage protection, economic development, infrastructure
construction and maintenance, as well as natural resource restoration and protection. As a
result of the complex nature of working waterfront development efforts, the state plays a
uniquely important role in informing decision-making and improving the capacity of local
leaders to advance their working waterfronts efforts. Specifically, a working waterfronts
program for the state of Maryland should focus on coordinating the collective resources at
the state level to the benefit of local communities. The program should be based on five
key working waterfront development elements: 1) comprehensive planning; 2)
infrastructure financing; 3) cultural and heritage protection; 4) economic analysis and
development; and 5) natural resource restoration and protection.
The Phase 2 effort currently underway to prove the EFC's findings uses the pilot
community of Cambridge which will have the EFC focus on addressing each of these areas
within the context of the City's existing planning efforts. The goal is to demonstrate how
the state can mobilize and apply its resources to the benefit of local communities and
traditional working waterfront economies and cultures.
UNIVERSITY OF NORTH CAROLINA at CHAPEL HILL
Hosted a public forum featuring presentations from 10 prominent environmental finance
experts and innovators from a variety of perspectives that cut across sectors and issues.
Speakers included Stan Meiburg, former Deputy Regional Administrator, EPA Region 4;
Andrew Sawyers, Director of EPA's Office of Wastewater Management, Office of Water;
Alfred Griffin, President of the New York Green Bank, and many more. The forum fostered
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discussion and identified emerging trends, strategies, and ideas that help answer the basic
"how will we pay" questions at the heart of successful environmental protection. The event
drew more than 130 in-person attendees and 250 online attendees from across the country.
The EFC offered a workshop on financing green infrastructure for the Council of
Infrastructure Authority and state revolving fund managers and staff. The workshop also
included a tour of green infrastructure installations in the Ramsey-Washington Metro
District, MN to showcase green infrastructure projects funded by SRF programs. The
workshop and tour reached approximately 80 SRF professionals. In addition, as part of this
project, the EFC produced a catalog of publications on green infrastructure for stormwater
management that have finance relevance. Since May 2014, more than 900 people have
accessed the catalog.
The Georgia Funders Forum is a group of representatives from the various public finance
programs for water, wastewater, and stormwater projects in the state of Georgia. Since
2007, the group has been meeting a few times annually. The informal meetings are
convened and facilitated by staff from the EFC. The objective is for staff from various
financing programs to provide updates on their respective programs and, in some cases,
explore opportunities to collaborate.
UNIVERSITY OF LOUISVILLE
Produced two Practice Guides: PG 33 - Communities, Trains, and Trainyards: Exploring
Policy Options for Affected Municipalities and PG 34 - Using Principles of Environmental
Sustainability to Improve Student Health. Through these Practice Guides, the EFC is able
to reach out to a national audience via website. Specific themed guides are listed as
resources on other websites such as the Kentucky Department for Environmental
Protection (KDEP), the U.S. EPA's Brownfields Urban Ag resources site, and the
Geoprofessional Business Association.
Co-authored and published a peer review chapter on participatory planning in an edited
volume about Climate Change. Heberle, L., Merrill, S., Keeley, C. and Lloyd, S. (April
2014) [ "Local Know ledge and Participatory Climate Change Planning in the Northeastern
U.S. " in International perspectives on climate change: Latin America and Beyond (Editors
Profs. Leah, Filho; Alves, Fatima; Caeiro, Sandra; and Azeiteiro; Ulisses). Springer. Cham
Heidelberg, New York, Dordrecht, London, pp. 239-252.]
Led the HUD/EPA Sustainable Communities Partnership grantee community members
across the nation, providing them with webinars, workshops, practice guides, targeted fact
sheets and one-on-one technical assistance in the areas of water infrastructure, brownfields,
resiliency, and climate change in partnership with the EFCs at the University of Southern
Maine, the University of Maryland, and the University of New Mexico.
Assisted elected officials and community members in Louisville, KY with communication
and obtaining information from EPA Region 4 representatives and KDEP officials
regarding the Black Leaf Chemical Site. This also included assistance to a medical
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researcher at UofL who agreed to perform limited biological sampling and testing of
residents who live near the site.
Presented to a national audience of 200 individuals from communities working on vacant
property issues on the topic of effectively using comprehensive data to reach community
goals - 2013 Reclaiming Vacant Properties Conference, Center for Community Progress,
September 9-11,2013.
Keynote speaker for the Neighbor Works America Green Leadership Forum May 20th,
2014, in Louisville, KY on the topic of linking environmental protection and safety from
toxic exposures with affordable housing initiatives. This was a national audience of about
100 community development professionals.
CLEVELAND STATE UNIVERSITY
Collaborated with Don lannone, Executive Director of Ashtabula County Growth
Partnership, on the development of an Integrated Development Budget (IDE) in Butler
County, Ohio creating a unified economic development budget and plan linking together
the economic initiatives of all of the local governments and not-for-profit workforce
organizations, and a private sector technology firm in the county. The IDE prioritizes
investments in technology, infrastructure, and workforce, with increasing the capacity of
the county fiber backbone, targeting investment in road and bridge, drinking water, and
clean water infrastructure, and providing job training to meet the market needs of the
region.
Developed the funding strategy tying together the consortium of local governments, special
districts, county government, the County Port Authority, the Transportation Improvement
District, and technology and workforce effects together to create a more strategic-
collaborative approach to economic development.
Conducted a solid waste and recycling rate study for the City of Elyria, Ohio (population
of approx. 54,000). The City has operated with a legislatively determined rate and lacking
a cost driven formula. The defined rate is based on a "full cost pricing model." The resultant
increase is to capitalize a sinking fund for the replacement of their fleet of eight mechanized
(one arm) collection trucks and trash and recycling bins.
Working with the Ohio Department of Transportation on revenue enhancements through
defining the market value of and selling the naming rights of public infrastructure assets,
including highway interchanges and roadside assistance services in metropolitan areas of
the state.
Published (along with colleagues Bill Jarocki, Director of Enterprise Planning and
Analysis, Montana Department of Revenue, and Kristina Gillespie, Chief Operating
Officer, Voltaic Solutions, LLC) a series of three articles on environmental and
infrastructure finance topics in the practitioner journal UIM: The Journal of Finance and
Management for Water and Wastewater Professionals. The articles are based on EFC
projects in Regions 5 and 10. The first article, Financing America's Infrastructure Needs,
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identified the utility of implementing for "useful life financing" to match the long-term
financing strategy to the useful life of the capital asset. The second article entitled COFee:
A Market Driven Solution to Today's Clean Water Challenges, details the use of a Capacity
Optimization Fee (COFee) system that promotes economic development and efficient use
of the wastewater systems by industrial customers. The third article, entitled COFee in
Action: The City of Nampa (Idaho) Solidifies the Connection between Wastewater
Infrastructure and Economic Development, followed the first operating year of the COFee
strategy.
WICHITA STATE UNIVERSITY
Developed content and curriculum for a series of Conservation Planning and Water Loss
workshops that were held in four locations across Iowa including: Storm Lake (10/29/13);
Atlantic (10/30/13); Waterloo (11/5/13); and, Mt. Pleasant (11/6/13). These workshops
focused on short and long-term conservation planning related to drought, as well as the
impact of unaccounted for water within the utility. Other topics included emergency
preparedness planning and how to use the WaterWise calculator to determine the true cost
of water loss specific to individual W/WW utilities. The EFC partnered with the Iowa
Association of Municipal Utilities for the development and delivery of these workshops.
The EFC also worked in cooperation with the Iowa Department of Natural Resources to
market the series. These workshops were extremely successful as noted through the
positive evaluations. Over 130 operators and local government professionals from across
Iowa participated in the workshops.
Worked with the EPA Region 7 office to coordinate a dialogue with the Administrator and
communities in South Central Kansas on March 13, 2014. The purpose of the event was to
identify opportunities and challenges related to environmental regulations for small
communities. The session hosted 35 participants and provided a platform for a candid and
open discussion about small community opportunities and challenges on environmental
compliance. The EFC staff provided a short presentation on the activities of the EFC over
the last couple of years and then facilitated the session dialogue.
Planned, coordinated and hosted the 2014 Regional Economic Area Partnership Regional
Water Conference. The event was held in Newton, Kansas on May 29, 2014 at the Meridian
Conference Center and with over 110 participants attending. The conference's theme was
Regional Water Planning, which focused on providing assistance to the State's broad
visioning this year to plan for the State's water resources for the next 50 years. Keynote
speakers from the Oklahoma's State Water Planning Agency presented the plan currently
in use in the state, which was followed by presentations involving the funding and content
needed action in Kansas.
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DOMINICAN UNIVERSITY AT CALIFORNIA
Worked with nine different Tribes in California and Arizona to help them develop their
green economies. Support to Tribes included: 1) analyzing a transfer station and
composting operation for the Big Sandy Rancheria and Morongo Tribes; 2) identifying
recycling commodity prices and supporting recycling program expansion for the Gila River
Indian Community; 3) exploring multiple financing options to support a waste program for
the Big Valley Rancheria Band of Porno Indians; 4) preparing a capital improvement plan
for the Tohono O'odham Nation; and, 5) developing a financial feasibility guidebook for
a Tribal composting operation for the Trinidad and Bear River Rancherias.
BOISE STATE UNIVERSITY
Completed reprogramming of its signature product, HydroDASH. It provides a simple
method for small water systems to generate financial data for lenders and regulators and
translates financial data into actual knowledge about the true sustainability of a system.
The system generates operating ratios, a debt coverage ratio, needed savings, an
affordability index and various comparisons of revenues and costs.
Worked with communities during the year to build financial and managerial capacity. The
EFC helped the community of Kuna, Idaho, organize their finances so that the public works
director was able to present a coherent financial plan to their council with the goal of
creating a system reserve requirement. Additionally, considerable work was done on
establishing a long-term rate strategy to meet their goals. West Valley water system is a
small distribution water system with aging infrastructure. The EFC's efforts were directed
to help the system understand how to implement an asset management plan. Additionally,
the EFC worked with the water system on how to apply for a rate increase with their Public
Utility Commission.
For more information about the Environmental Finance Program, please visit:
http://www2. epa. gov/envirofmance.
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