ENVIRONMENTAL PROTECTION AGENCY
ENVIRONMENTAL FINANCIAL ADVISORY BOARD
STRATEGIC ACTION AGENDA
FISCAL YEARS 2016-2017
BACKGROUND
The Environmental Financial Advisory Board (EFAB) is chartered under the Federal Advisory
Committee Act to advise EPA on environmental finance issues, options proposals, and trends. EFAB
seeks ways of lowering costs and increasing investments in public purpose environmental facilities and
services. EFAB is supported by EPA's Office of Water, Water Infrastructure Resiliency and Finance
Center, within the Office of Wastewater Management.
EFAB's Designated Federal Official is Michael Shapiro, Deputy Assistant Administrator for the Office of
Water. EFAB's plans and operation are aligned with the major environmental goals presented in EPA's
strategic plan.
EPA GOALS
EFAB's work is organized in support of the 5 major goals in EPA's Strategic Plan:
1. Addressing Climate Change and Improving Air Quality
2. Protecting America's Waters
3. Cleaning Up Communities and Advancing Sustainable Development
4. Ensuring the Safety of Chemicals and Preventing Pollution
5. Protecting Human Health and the Environment by Enforcing Laws and Ensuring
Compliance
EFAB OBJECTIVES
In its strategic planning process, EFAB applies these thematic EPA goals in the context of the
requirement in its charter to provide advice and recommendations on the following issues:
• Reducing the cost of financing sustainable environmental facilities, discouraging polluting
behavior, and encouraging stewardship of natural resources;
• Creating incentives to increase private investment in the provision of environmental services and
removing or reducing constraints on private involvement imposed by current regulations;
• Developing new and innovative environmental financing approaches and supporting and
encouraging the use of cost-effective existing approaches;
• Identifying approaches specifically targeted to small community financing;
• Assessing government strategies for implementing public-private partnerships, including
privatization and operations and maintenance issues, and other alternative financing mechanisms;
• Improving governmental principles of accounting and disclosure standards to help improve
sustainability of environmental programs;
• Increasing the capacity issue of state and local governments to carry out their respective
environmental programs under current Federal tax laws;
• Increasing the total investment in environmental protection and stewardship of public and private
environmental resources to help ease the environmental financing challenge facing our nation; and
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• Removing barriers and increasing opportunities for the U.S. financial services and environmental
goods and services industries in other nations.
Based on these goals and objectives and input from EPA, EFAB develops a Strategic Action Agenda
describing its workgroup structure and lists ongoing and completed projects. Given the number, scope,
and nature of the issues that EFAB addresses, its workgroups take the lead in developing projects for
consideration and approval by the Full Board.
LOJECT SUMMARIES FY 21
Project Title: Financing Legacy O&M Costs at Green Infrastructure Project Sites
Work Group Co-Chairs: Donna Ducharme and Leanne Tobias
EPA Strategic Goal: Protecting America's Waters
EPA Client: Office of Water
Anticipated Report Date: March 2016
Plenty of attention and efforts have been devoted to funding/financing the capital costs of construction
and clean-up at environmental sites that do not generate ongoing revenues. But less attention has been
given to finding mechanisms for funding the legacy (perhaps permanent) operations and maintenance
costs associated with such sites. This workgroup is exploring the mechansims that are, and might be,
available to cover these ongoing legacy costs at green infrastructure project sites. Examples of
mechanisms to be examined may include fully funded trusts, escrow accounts, utility structures, annuity
products, a variety of bonding instruments, and others. The project will consider the feasibility and costs
of each instrument examined and their suitability to differing environmental sites and conditions.
Project Title: Financial Capacity Development for Small Drinking/Wastewater Systems
Work Group Co-Chairs: Heather Himmelberger and Jennifer Wasinger
EPA Strategic Goal: Protecting America's Waters
EPA Client: Office of Water
Anticipated Report Date: March 2016
Small water systems face many challenges to being financially sustainable. These include developing
affordable rate structures, building the capacity to analyze financial alternatives, and obtaining the
funding needed to build, run, maintain, and replace infrastructure. These challenges are exacerbated by
the limited technical capability and capacity of staff working at small systems. Many entities work with
small systems including EPA, USD A, technical assistance providers (e.g. NRWA, RCAP, EFCs, etc.), but
their efforts are often not well coordinated. This workgroup seeks to identify ways that EPA can work
with all of the interested entities to provide a coordinated range of technical and financial assistance to
help small systems become sustainable enterprises on an ongoing basis.
Project Title: Financing Pre-Development Activities in Communities
Work Group Co-Chairs: Ed Crooks and Hope Cupit
EPA Strategic Goal: Protecting America's Waters
EPA Client: Office of Water
Anticipated Report Date: March 2016
For communities considering innovative projects, decisions during phases of project development that
precede construction (pre-development) are often limited by a lack of funding. Pre-development activities
include planning, project prioritization and selection, permitting and entitlements, engineering and design,
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and financing and funding. Although only a small part of total costs, these activities have considerable
influence on which technologies and financing approaches are chosen, especially with regards to
emerging technologies and alternative financing. Due to fiscal constraints, large needs and risk aversion,
governments tend to focus resources on conventional projects and infrastructure construction, thereby
underinvesting in pre-development. This workgroup is focusing on identifying ways that EPA can assist
local governments with project planning and financial analysis of water infrastructure projects.
Project Title: Public-Private Partnerships for Water Infrastructure Projects
Work Group Co-Chairs: Lisa Daniel and Richard Weiss
EPA Strategic Goal: Protecting America's Waters
EPA Client: Office of Water
Anticipated Report Date: August 2016
Although water infrastructure needs are increasing, funding for EPA's State Revolving Funds (SRFs) and
other Federal programs are not keeping pace. Innovative solutions are needed now more than ever and
public-private partnerships (P3s) can be one such innovation. P3s can help communities secure funding
for infrastructure projects and support long-term system operations via risk allocation and performance-
based equities. With few water sector examples, questions remain about how effectively P3s will work.
This workgroup is looking at the costs and benefits of P3s for water utilities and exploring the technical
assistance that EPA might provide to help communities better cope with the legal and financial elements
of P3s. The group is also reviewing the P3 case studies and other P3 work products being developed by
the Environmental Finance Center at the University of North Carolina.
Project Title: Financing Stormwater and Green Infrastucture Programs
Work Group Co-Chairs: Joanne Throwe and Mathilde McLean Crosby
EPA Strategic Goal: Protecting America's Waters
EPA Client: Office of Water
Anticipated Report Date: March 2016
Managing stormwater is a challenge for many communities whether the motivation is flooding, water
quality, water quanity, or revitalization. There are about 8,000 municipalities required to implement
stormwater programs, but only about 1,400 stormwater utilities. Financing these programs and
encouraging green infrastructure are EPA priorities. This workgroup is identifying the barriers that
communities face in developing dedicated sources of revenue for stormwater and green instructure
programs. It is also exploring ways to address those barriers and actions that EPA and other interested
parties can take to grow the number of communities with dedicated revenue sources in this area.
Potential Project Title: Household Affordability Challenges in the Water Sector
Work Group Co-Chairs: Tom Liu and Rick Giardina
EPA Strategic Goal: Protecting America's Waters
EPA Client: Office of Water
Anticipated Report Date: March 2016
Many communities are experiencing hardship in financing the projects and activities needed to meet their
wastewater and drinking water obligations. Furthermore, many households within communities are
challenged in meeting their portions of the costs of these obligations. EPA has taken a number of steps to
include flexibility in its programs to help communities meet their obligations in an affordable manner, but
is looking to do more. In response to an EPA request, this workgroup seeks to identify ways that EPA can
further assist communities with affordability challenges in implementing their water infrastructure with a
particular emphasis on addressing the challenges of household affordability.
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OMPLETED REPORT FY 201
I
1. Improving the Environmental Compliance Status of Small Water Systems in Puerto Rico,
December 2014
EPA Strategic Goals: Protecting Human Health and the Environment by Enforcing Laws and
Assuring Compliance and Protecting America's Waters
Primary Customer: Office of Enforcement and Compliance Assurance
View this report at:
http://www.epa.gov/sites/production/files/2014-12/documents/small water systems in puerto rico.pdf
View all EFAB Reports at:
http://www.epa.gov/envirofmance/publications
This Strategic Action Agenda is a flexible planning tool and is updated during the fiscal year as
needed. All revisions will be shown on the home page at:
http ://www. epa.gov/envirofmance/efab .htm
Comments are important and welcomed. For additional information, contact Vanessa Bowie at
bowie.vanessa@epa.gov.
830F16001
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