Overview of FY 2011 Chesapeake Bay Program Funding Options

1. Overview of FY 2011 CBIG Funding Options Jim Edward Chesapeake Bay Program July 20, 2010

2. Summary • Under the strategy developed in response to EO 13508, Clean Water Act funds will be targeted beginning in FY 2011. • 4 conference calls were held with the jurisdictions on 6/16, 6/24, 7/1 and 7/14 to discuss targeting options. • All jurisdictions were represented at each conference call. • A total of 5 funding formulas were presented as possible FY 2011 CBIG allocations during this process. • Options 1-4 are based upon nutrient target loads and Option 5 is based upon the FY 2010 CBIG funding allocation formula.

3. Summary (continued) • In addition, EPA solicited ideas for additional ways to calculate funding. No official proposals were provided. • As part of these discussions, three questions regarding the issue of targeting priority watershed and/or practices were posed to each jurisdiction. • After much debate, no consensus could be reached on which funding formula should be used to best target Clean Water Act funds.

4. Three Questions Posed to States • Are you in favor of geographic targeting? • Are you in favor of targeting funds with priority practices? • Could match be a way to consider targeting?

5. Five Funding Options Option 1: 50/50 Base/Target Split Target Based on Portion of Delivered TN and TP Reductions Compared to No Action Option 2: 50/50 Base/Target Split Target Based on Portion of Delivered TN and TP Reductions Compared to 2009 Delivered TN and TP Loads Option 3: 75/25 Base/Target Split Target Based on Portion of Delivered TN and TP Reductions Compared to 2009 Delivered TN and TP Loads Option 4: Phase-in of Option 2 Target From 10%- 50% of Total Funds Over 5-Year Period Option 5: Current FY 2010 Distribution

6. Option 1 50/50 Base/Target Split Target Based on Portion of Delivered TN and TP Reductions Compared to No Action Nitrogen Reduction = (2010 No Action Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2010 No Action Delivered Phosphorus Load) – (Delivered Phosphorus Target Load)

7. Option 2 50/50 Base/Target Split Target Based on Portion of Delivered TN and TP Reductions Compared to 2009 Delivered TN and TP Loads Nitrogen Reduction = (2009 Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2009 Delivered Phosphorus Load) – (Delivered Phosphorus Target Load)

8. Option 3 75/25 Base/Target Split Target Based on Portion of Delivered TN and TP Reductions Compared to 2009 Delivered TN and TP Loads Nitrogen Reduction = (2009 Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2009 Delivered Phosphorus Load) – (Delivered Phosphorus Target Load)

9. Option 4 Phase-in of Option 2 Target From 10%- 50% of Total Funds Over 5-Year Period Nitrogen Reduction = (2009 Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2009 Delivered Phosphorus Load) – (Delivered Phosphorus Target Load) FY 2011- 10%

10. Option 4 (Cont) Phase-in of Option 2 Target From 10%- 50% of Total Funds Over 5-Year Period Nitrogen Reduction = (2009 Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2009 Delivered Phosphorus Load) – (Delivered Phosphorus Target Load) FY 2012- 20%

11. Option 4 (Cont) Option 4 Phase-in of Option 2 Target From 10%- 50% of Total Funds Over 5-Year Period Nitrogen Reduction = (2009 Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2009 Delivered Phosphorus Load) – (Delivered Phosphorus Target Load) FY 2013- 30%

12. Option 4 (Cont) Phase-in of Option 2 Target From 10%- 50% of Total Funds Over 5-Year Period Nitrogen Reduction = (2009 Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2009 Delivered Phosphorus Load) – (Delivered Phosphorus Target Load) FY 2014- 40%

13. Option 4 (Cont) Phase-in of Option 2 Target From 10%- 50% of Total Funds Over 5-Year Period Nitrogen Reduction = (2009 Delivered Nitrogen Load) – (Delivered Nitrogen Target Load) Phosphorus Reduction = (2009 Delivered Phosphorus Load) – (Delivered Phosphorus Target Load) FY 2015- 50%

14. Option 4 (Cont) Five Year Summary for Option 4

15. Option 5 Current FY 2010 Distribution States are required to document, in their Work Plans, which priority watersheds and/or priority practices are being targeted for implementation with these grant funds.

16. Summary of Funding Options Summary Comparison:

17. Summary Chart of States’ Option Selections *Option 2 selected with the condition that EPA allocate additional funding so that no state is penalized by this formula.

18. Next Steps • The Management Board will provide feedback regarding which funding option(s) it supports. • CBPO Acting Director will brief Shawn Garvin, EPA Region 3 Administrator on the Management Board’s initial discussions and feedback. • The draft FY 2011 Chesapeake Bay Program Grant and Cooperative Agreement Guidance will be shared with the jurisdictions for review and comment in mid- August.

19. Next Steps (continued) • Comments from jurisdictions on the guidance will be due at the end of August/ beginning September. • A funding option will be selected by EPA prior to issuing the final FY 2011 CBIG Grant Guidance.

20. Conclusion • While no consensus could be reached, a majority of the jurisdictions prefer Option 5. • EPA would like the Management Board’s opinion and feedback on the various funding options and approaches.