SD50 - Costs of Expanding Coastal Zone Management in Virginia


Executive Summary:
The Coastal Zone Management Act, a federal act originally adopted in 1972, is intended to promote a national interest in the effective management of coastal zones and waters. A 1990 reauthorization of the Act required that certain nonpoint pollution management measures must be implemented in states with approved coastal zone programs. Nonpoint pollution has been described by the United States Environmental Protection Agency (EPA) as the pollution of waters "caused by rainfall or snowmelt moving over and through the ground." Examples of nonpoint pollution include fertilizers, pesticides, sediments, or toxics that are set in motion by precipitation.

Senate Joint Resolution 43 of the 1994 Session requires a JLARC study of the potential cost impacts of the nonpoint pollution management measures. Key findings of this report follow.

• Aside from one particular management measure - the retrofitting of existing onsite disposal systems (OSDS, or septic tanks) - Virginia's estimated cost in its existing coastal zone is about $18.1 million, or within a range suggested by EPA national cost estimates.

• Two factors, the geographic zone within which the measures are applied, and the interpretation given to the OSDS measure, could have a major impact on the magnitude of Virginia's cost.

• Several factors form a context for Virginia's response to the management measures, including the fact that funding at risk from non-implementation is limited and Virginia has an existing nonpoint pollution effort to pursue similar ends using means more in its control.

Virginia's Potential Cost in the Current Coastal Zone, Excluding Existing OSDS

JLARC staff's estimate of the basic cost of the management measures in the existing coastal zone is $18.1 million annually. This is within the range of the mean approximate cost per participating coastal state of between $16.2 and $24.6 million, calculated based on EPA's national cost estimates.

The largest portion of these costs are urban costs, estimated to be $10.1 million annually. These costs are incurred for management measures such as urban runoff, erosion and sediment control, new OSDS costs, and roads, highways, and bridges. In addition, about $4.7 million in annual agriculture costs are estimated. "Other" costs, for forestry, hydromodification (dams, channelization, streambank and shoreline stabilization projects), and marinas are estimated at $3.3 million annually.

Costs of an Expanded Coastal Zone and the OSDS Measure

If the coastal zone is expanded to include either of the boundaries Virginia has been asked by the National Oceanic and Atmospheric Administration (NOAA) to consider, then the costs for the management measures would be significantly greater. Specifically, it is estimated that excluding existing OSDS, NOAA's basic recommendation would increase costs by about 40 percent, while implementation within the full zone Virginia has been asked to consider would increase costs by about 130 percent compared to the costs of the current zone.

Potentially, the single greatest factor affecting the magnitude of Virginia's costs, however, is the application of the existing OSDS measure. OSDS is the treatment of wastewater through the use of conventional septic tanks and soil absorption or drainage fields. The measure for existing OSDS requires an enforceable approach to obtain proper operation and maintenance of these systems. The measure could have a unique impact in Virginia. EPA's economic achievability analysis for the existing OSDS measure categorizes distances of less than two feet from the septic tank to the groundwater table as an "insufficient" separation distance. Virginia's state regulations permit separation distances of as little as two inches from the septic tank trench bottom to the groundwater table.

Based on a cost approach similar to EPA's economic achievability analysis, it appears that Virginia's existing OSDS cost in both the current and proposed zones could be about $190 million. The reason that the cost could be so substantial is the large number of households potentially affected.

State Response to the Management Measures

To this point, the State has not ruled out the implementation of the management measures, but nor has a definitive commitment been made to implement them. The executive branch's position is that if the measures are implemented, they will be implemented in the existing coastal zone, and not in the NOAA/EPA proposed zones.

The State has been addressing nonpoint pollution through its tributary strategy approach to reducing pollution to the Chesapeake Bay. This approach has enabled a mix of voluntary and enforceable measures, and enables the State to pursue its most effective options to achieve water quality improvements. The State's current approach to the set of federal management measures appears appropriate: to consider the management measures for the existing zone, while exploring the details for what is expected in that zone before making a final decision. The State needs to clearly understand what the federal expectations are with regard to the implementation of potentially high-cost management measures. The State may also need to consider whether its agencies have the regulatory authority to make boundary distinctions in applying and ensuring the implementation of the measures.