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									    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

								
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