Maryland Bay Restoration Fund (Flush Fee) Update Presentation to the Maryland GFOA By Jag Khuman, Director Maryland Water Quality Financing Administration Maryland Department of Environment April 20, 2007 Maryland Bay Restoration Fund Background: Bay Restoration Fund (BRF) was created under SB 320 during 2004 legislative session, which provides a dedicated source of revenue for nutrient (Nitrogen & Phosphorus) reduction to the Chesapeake Bay. The BRF established two separate sub-funds: a. Wastewater Fund b. Septic Fund Maryland Bay Restoration Fund BRF Fee • A fixed $2.50/month ($30/yr) fee per household collected with water/sewer bills - effective 1/1/05 (commercial & industrial users pay based on 250 gallons/day flow = 1 EDU) • A $30/yr fee per user of an onsite sewage disposal (septic) system or holding tanks to be collected by the County - effective 10/1/05 (60% to MDE; 40% to MDA) Maryland Bay Restoration Fund Administrative Cost Allowance • For BRF Fee billing and revenue collection Local governments/billing authorities - up to 5% of the fee deposited to the State Comptroller’s Office (Cumulative claims thru 3/31/07 show 1.08% of fee deposits) State Comptroller’s Office - up to 0.5% total fee deposits • For wastewater & septic fund program implementation MDE - Up to 1.5% of Wastewater Fund MDE - Up to 8% of MDE share of Septic Fund • For cover crop program implementation MDA – Statute Silent Maryland Bay Restoration Fund Exempted from Paying Fee (by Statute) County, Municipal Corporation, Bi-County or Multi-County Agency under Article 28 or 29 of the Code, Housing Authority under Article 44A of the Code, School Board, Community College, or any other Unit of the County or Municipal Corporation (Federal & State Government not exempt) Maryland Bay Restoration Fund Financial Hardship Exemption The law allows, subject to approval by the Maryland Department of the Environment, the billing authority to establish a program to exempt certain “residential” dwellings that demonstrate substantial financial hardship (As of March 2007, 24 billing authorities have approved financial hardship exemption programs) Maryland Bay Restoration Fund Septic Fund - Revenue & Grant Awards Septic Fund – Fee Revenue Deposit (MDE/MDA) FY 2005: $ 0.26M FY 2006: $ 7.97M FY 2007: $11.01M (thru 3/31/07) (Estimated $12M/yr – split 60% MDE, 40% MDA) MDE Grant Awards (thru 3/31/2007) Septic Projects: $ 9.0M (10 entities) Maryland Bay Restoration Fund Septic Fund - Fee Billing Options Bay Restoration Advisory Committee recommendation to County Governments on fee billing options: A. Bill the septic fee along with property tax (starting July ’05 with fee prorated for 3 quarters) or B. Develop separate septic fee billing system (starting 10/1/05) (Most Counties opted for option A; 3 did not start fee billing until July ’06 - FY ‘07) Maryland Bay Restoration Fund MDE Eligible Uses of the Septic Fund With priority given to onsite sewage disposal systems (septic systems) in the critical areas, provide grants or loans of up to 100% for the: a. cost to upgrade septic systems with the best available technology for nitrogen removal, b. cost difference between a conventional system and a system that uses best available technology for nitrogen removal, or c. cost of repairing/replacing a failing septic system with best available technology for nitrogen removal or another wastewater treatment system (added during 2006 legislative session and applicable only to low- income owners) Maryland Bay Restoration Fund MDE Septic Grant Awards (thru 3/31/07) GRANTEE AWARD Anne Arundel Co. Health Department $2,644,000 Calvert Co. Dept. of Planning/Zoning $ 933,000 Charles Co. Health Department $ 604,000 Frederick Co. Health Department/Canaan Valley $ 712,000 Kent Co. Water and Wastewater Department $ 597,000 State DNR (Queen Anne's Co./Corsica) $ 287,000 Caroline Co. Health Department $ 144,000 Talbot Co. Dept. of Public Works $1,168,000 Wicomico Co. Health Department $ 771,000 Worcester Co. - Environmental Programs $1,142,000 TOTAL $9,002,000 Maryland Bay Restoration Fund MDE Septic Grant – Direct Applications Owners of Septic Systems located in other areas (i.e., not part of the10 entities awarded grant to-date) can make direct applications to MDE. Application form available on web site: http://www.mde.state.md.us/Water/CBWRF/osds_preapp.asp MDE contact: Jay Prager Water Management Administration 410-537-3780 Maryland Bay Restoration Fund Wastewater Fund - Revenue & Grant Awards Wastewater Fund – Fee Revenue Deposit (MDE) FY 2005: $ 7.02M FY 2006: $57.69M FY 2007: $42.96M (thru 3/31/07) (Estimated Revenue $60M/yr) MDE Grant Awards (thru 3/31/2007) ENR Projects: $72.3M (27 projects) Sewer Rehabilitation: $ 5.8M (8 projects) Maryland Bay Restoration Fund Eligible Uses of the Wastewater Fund • Grants to WWTP owners of up to 100% of eligible cost of planning, design and construction of ENR upgrade (e.g., nitrogen reduction from 8mg/l to 3mg/l) for flows up to the “approved” design capacity. • Grant of up to $5M/yr for existing sewer system rehabilitation (FYs 2005 - 2009). • Grant to WWTP owners of up to 10% of annual BRF wastewater fee revenue to off-set additional ENR operations and maintenance costs (Starting FY 2010; Est. $6M/yr). Maryland Bay Restoration Fund Wastewater Fund - ENR Goals • First upgrade the 66 major WWTPs discharging to the Chesapeake Bay with ENR technologies. These 66 major facilities treat 95% of the total Maryland sewage flow and will reduce nitrogen by an additional 7.5M lbs/yr and phosphorus by 0.26M lbs/yr. • Next upgrade additional WWTPs based on ENR cost effectiveness, water quality benefit, readiness to proceed, and availability of funding. Chesapeake Bay Watershed The nutrients causing New York water quality impairments drain into the Chesapeake Bay via rivers from the entire watershed. Pennsylvania Maryland Delaware West Virginia Chesapeake Bay District of Watershed Columbia Boundary Virginia Cap Load Allocations by State Nitrogen Allocation Phosphorus Allocation (million pounds/year) (million pounds/year) PENNSYLVANIA 72 2.3 MARYLAND 37 2.9 VIRGINIA 51 6.0 DISTRICT OF COLUMBIA 2 0.3 NEW YORK 13 0.6 DELAWARE 3 0.3 WEST VIRGINIA 5 0.4 SUBTOTAL 183 12.8 CLEAR SKIES REDUCTION -8 BASIN-WIDE TOTAL 175 12.8 Maryland Annual Nutrient Loading Cap Nitrogen – 37.25 Million pounds Phosphorus – 2.92 Million pounds 20 million pound 1.1 million reduction pound needed reduction needed Maryland Bay Restoration Fund List of Major WWTPs WWTP NAME OWNER COUNTY CELANESE ALLEGANY Co. ALLEGANY CUMBERLAND CUMBERLAND ALLEGANY GEORGES CREEK ALLEGANY Co. ALLEGANY ANNAPOLIS ANNE ARUNDEL Co. ANNE ARUNDEL BROADNECK ANNE ARUNDEL Co. ANNE ARUNDEL BROADWATER ANNE ARUNDEL Co. ANNE ARUNDEL COX CREEK ANNE ARUNDEL Co. ANNE ARUNDEL DORSEY RUN STATE (MES) ANNE ARUNDEL MARYLAND CITY ANNE ARUNDEL Co. ANNE ARUNDEL MAYO LARGE COMMUNAL ANNE ARUNDEL Co. ANNE ARUNDEL PATUXENT ANNE ARUNDEL Co. ANNE ARUNDEL BACK RIVER BALTIMORE CITY (REGIONAL) PATAPSCO BALTIMORE CITY (REGIONAL) CHESAPEAKE BEACH CHESAPEAKE BEACH CALVERT Maryland Bay Restoration Fund List of Major WWTPs WWTP NAME OWNER COUNTY DENTON DENTON CAROLINE FEDERALSBURG FEDERALSBURG CAROLINE FREEDOM DISTRICT CARROLL Co./MES CARROLL MOUNT AIRY MOUNT AIRY CARROLL TANEYTOWN TANEYTOWN CARROLL WESTMINSTER WESTMINSTER CARROLL ELKTON ELKTON CECIL NORTHEAST RIVER CECIL Co. CECIL PERRYVILLE PERRYVILLE CECIL INDIAN HEAD INDIAN HEAD CHARLES LA PLATA LA PLATA CHARLES MATTAWOMAN CHARLES Co. CHARLES SWAN POINT CHARLES Co. CHARLES Maryland Bay Restoration Fund List of Major WWTPs WWTP NAME OWNER COUNTY CAMBRIDGE CAMBRIDGE DORCHESTER HURLOCK HURLOCK DORCHESTER BALLENGER CREEK FREDERICK Co. FREDERICK BRUNSWICK BRUNSWICK FREDERICK EMMITSBURG EMMITSBURG FREDERICK FREDERICK FREDERICK CITY FREDERICK THURMONT THURMONT FREDERICK ABERDEEN ABERDEEN HARFORD ABERDEEN (APG) FEDERAL (DOD) HARFORD HAVRE DE GRACE HAVRE DE GRACE HARFORD JOPPATOWNE HARFORD Co. HARFORD SOD RUN HARFORD Co. HARFORD LITTLE PATUXENT HOWARD Co. HOWARD Maryland Bay Restoration Fund List of Major WWTPs WWTP NAME OWNER COUNTY CHESTERTOWN CHESTERTOWN KENT POOLESVILLE POOLESVILLE MONTGOMERY DAMASCUS WSSC MONTGOMERY SENECA CREEK WSSC MONTGOMERY PARKWAY WSSC PRINCE GEORGE’S PISCATAWAY WSSC PRINCE GEORGE’S WESTERN BRANCH WSSC PRINCE GEORGE’S BOWIE BOWIE PRINCE GEORGE’S CENTREVILLE CENTREVILLE QUEEN ANNE’S KNSG (KENT ISLAND) QUEEN ANNE’S Co. QUEEN ANNE’S CRISFIELD CRISFIELD SOMERSET PRINCESS ANNE PRINCESS ANNE SOMERSET LEONARDTOWN LEONARDTOWN SAINT MARY’S MARLAY TAYLOR SAINT MARY’S Co. SAINT MARY’S Maryland Bay Restoration Fund List of Major WWTPs WWTP NAME OWNER COUNTY EASTON EASTON TALBOT TALBOT COUNTY REGION II TALBOT Co. TALBOT CONOCOCHEAGUE WASHINGTON Co. WASHINGTON HAGERSTOWN HAGERSTOWN WASHINGTON MCI STATE (MES) WASHINGTON WINEBRENNER WASHINGTON Co. WASHINGTON DELMAR DELMAR WICOMICO FRUITLAND FRUITLAND WICOMICO SALISBURY SALISBURY WICOMICO POCOMOKE CITY POCOMOKE CITY WORCESTER SNOW HILL SNOW HILL WORCESTER BLUE PLAINS (WSSC SHARE) DISTRICT OF COLUMBIA (REGIONAL) TOTAL ESTIMATED COST – ENR UPGRADES: $1.014 BILLION (MARCH 2007) Maryland Bay Restoration Fund Wastewater Fund - ENR Upgrade Status (3/31/2007) WWTPs Completed: 2 Under Construction: 11 Design: 12 Planning: 23 Pre-Planning: 18 Total 66 Maryland Bay Restoration Fund Wastewater Fund - Projected ENR Grant Awards 791 800 722 700 600 505 500 $ Million 400 320 300 185 217 160 160 200 100 60 69 30 30 70 100 0 2006 2007 2008 2009 2010 2011 2012 FY Annual Grant Awards Cum. Grant Awards Maryland Bay Restoration Fund Wastewater Fund - Projected Bond Issuance 600 550 490 500 400 $ Million 280 300 210 200 160 120 70 60 100 50 50 0 0 0 0 0 2006 2007 2008 2009 2010 2011 2012 FY Annual Bond Issuance Cum. Bond Issuance Maryland Bay Restoration Fund Wastewater Fund - Est. ENR Construction Starts/Yr 66 66 70 56 Number of WWTPs 60 50 38 40 30 24 18 16 14 20 10 10 8 10 6 10 0 0 2006 2007 2008 2009 2010 2011 2012 FY # Construction Start Cum. Const. Start Maryland Bay Restoration Fund Wastewater Fund - Cum. Awards vs. Funding Need 1200 Deficit likely ~$200 million 1000 800 $ Million 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 FY Cum. Grant Awards Cum. Grant Need Maryland Bay Restoration Fund Bay Restoration Fund Advisory Committee 18 members representing the state agencies, legislature, local governments, and environmental and business organizations (Provide an annual report each January 1) Key Responsibilities: • Perform an analysis of the cost of nutrient removal • Identify additional sources of funding for the fund • Make recommendations to improve effectiveness of fund • Make recommendations on the appropriate fee to be assessed in FY 2008 and beyond Maryland Bay Restoration Fund Construction Material Inflation vs. CPI 10.0% 8.3% % increase over prior year 8.0% 6.7% 6.1% 6.0% 4.2% 4.0% 3.3% 3.3% 2.5% 2.6% 1.5% 2.0% 0.5% 0.0% 2002 2003 2004 2005 2006 Consumer Price Index (MD-DC-VA) Construction Material PPI Source: Bureau of Labor Statistics Maryland Bay Restoration Fund MDE Grants and Loans -Wastewater Systems $320 $350 $313 $300 $238 $250 $213 $197 $ Million $200 $165 $120 $150 $100 $50 $- 2006 2007 2008 2009 2010 2011 2012 Maryland Bay Restoration Fund In Summary Local Government Finance & Budget Officials • Don’t expect 100% in ENR grants from BRF • Expect higher construction bids than estimated • Apply timely for MDE financial assistance Maryland Department of the Environment Bay Restoration Fund For additional information visit MDE website at: www.mde.state.md.us or call 410-537-3119
"State of Maryland Tax Exempt Form"