RD585 - FY2019 Chesapeake Bay and Virginia Waters Clean-Up Plan – November 2019

Executive Summary:

This report was developed to comply with consolidated water quality reporting requirements set forth in § 62.1-44.118 of the Code of Virginia. This section requires the Secretary of Natural Resources to submit a progress report on implementing the impaired waters clean-up plan as described in § 62.1-44.117 of the Code of Virginia. This consolidated report also includes the “Annual Report on the Water Quality Improvement Fund" by the Department of Conservation and Recreation (DCR) and Department of Environmental Quality (DEQ) pursuant to § 10.1-2134 of the Code of Virginia and incorporates the reports on “Cooperative Nonpoint Source Pollution Programs" required in subsection D of § 10.1-2127 and the “Watershed Planning and Permitting Report" required in subsection B of § 10.1-1193 of the Code of Virginia. The report also encompasses DCR’s report of “Annual Funding Needs for Effective Implementation of Agricultural Best Management Practices" pursuant to subsection C of § 10.1-2128.1 of the Code of Virginia. The 2019 report includes the “Water Quality Improvement Fund Requests Estimate Report" required by § 10.1-2134.1 of the Code of Virginia and the “Stormwater Local Assistance Fund Requests Estimates Report" required by § 62.1-44.15:29.2 of the Code of Virginia. This consolidated report also includes the “2014 Chesapeake Bay Watershed Agreement Progress Report: State of the Chesapeake Bay Program Report to the Chesapeake Bay Executive Council," August 2019 as required in § 2.2-220.1. This consolidated report also addresses Item 361.A. in the 2018 Special Session I Budget (Chapter 2) for FY 2019 and FY 2020.

Water Quality Improvement Fund and Cooperative Nonpoint Source Pollution Programs

For FY 2019 (the period July 1, 2018 – June 30, 2019), DCR allocated over $22 million in agricultural cost-share and technical assistance funds to Soil and Water Conservation Districts. This included over $500,000 in Conservation Reserve Enhancement Program (CREP) cost-share funds to be disbursed by Districts as state match for completed projects. Of the $22 million, approximately $17.4 million was distributed to farmers through the Virginia Agricultural Cost-Share Program (VACS) and CREP for implementation of best management practices (BMPs). An additional $2.4 million was allocated in technical assistance to Districts to provide implementation assistance to participants. The implementation of backlogged Stream Exclusion SL-6 Pending VACS cost-share applications was reduced from approximately $4 million in the Chesapeake Bay watershed to less than $720,000 ($5 million statewide). Additional funding provided by the General Assembly during the 2019 Session will address the remaining backlog; the funding for those practices should be obligated by the Districts by November 1, 2019. Practices installed on farms during FY 2019 will result in estimated edge of field nitrogen reductions of approximately 10.1 million pounds, phosphorus reductions of approximately 3.6 million pounds, and sediment reductions of approximately 784 thousand tons.

Under the Water Quality Improvement Fund (WQIF) Point Source Program, DEQ currently has 66 signed agreements that obligated $792.1 million in state grants ranging from 35% to 90% cost-share, for design and installation of nutrient reduction technology at Bay watershed point source discharges. Within this total number of projects receiving cost-share, 64 have been completed and two are active in the construction stage. For calendar year 2018, facilities registered under the Chesapeake Bay Watershed Nutrient Discharge General Permit reported discharged loads that, in aggregate, were significantly below the total Waste Load Allocations currently in effect for all Bay tributary basins. Tables of discharged and delivered loads for each individual facility and basin totals are available online from DEQ.

As part of a WQIF Nonpoint Source Program, through a 2016 Request for Assistance (RFA) directed at local government applicants (cities, towns, counties, Soil and Water Conservation Districts, and Planning District Commissions) along with state agencies, DEQ awarded $3.4 million to implement nonpoint source (NPS) pollution control projects. Within the Chesapeake Bay Watershed, projects that maximize reduction of nitrogen, phosphorous or sediment were a funding priority. In addition, projects with the highest pollution reduction relative to dollars requested were given priority. These projects will implement pollution control actions that will have a significant and lasting impact on local and state water quality.

Although no new funding has been offered since the 2016 RFA, DEQ continues to manage existing projects. After three years of implementation, many projects are nearing completion. One project has been terminated and one project has been completed on budget and on schedule. DEQ successfully transferred funding from the terminated project into existing projects that had demand for additional implementation. Overall, pollution reductions are expected to be in line with original reduction estimates.

Funding Needs for Effective Implementation of Agricultural Best Management Practices

Funding projections for the Chesapeake Bay were developed based on a detailed analysis of practices identified in the Chesapeake Bay Phase III Watershed Implementation Plan (WIP). This included a review of progress made in implementing the WIP through 2018 and the inclusion of reductions projected from nearly $100 million of stream exclusion practices statewide that either have been installed or were funded as of June 30, 2019 (including nearly $51.7 million in the Bay watershed). The WIP implementation schedule focuses on full implementation by 2025.

For the fiscal years 2020 – 2030, the final scheduled year of the Chesapeake Bay WIP, a revised estimate of $2.7 billion may be required from state and federal funds as well as farmer financial contributions to meet water quality goals. Approximately 40% of this total ($1.1 billion) could be needed from State sources, the vast majority of which is direct funding of the Virginia Agricultural Cost-Share (VACS) Program and support for Soil and Water Conservation Districts that implement the VACS program.

Actual FY 2019 allocations from state sources for implementation of agricultural best management practices had the following breakdown:

FY 2019 (Program Name – amount):

VACS Cost-Share program funding - $17.47 million

District Technical Assistance - $3.57 million

District Financial Assistance - $7.1 million

FY 2019 support figures exclude engineering support via DCR staff, IT support, and training assistance (e.g., Conservation Planning Certification). These have been itemized separately.

Projected funding needs from state sources for implementation of agricultural best management practices through the FY 2019-2020 biennium are estimated in the 2019 Ag Needs Assessment Table on page 20. Funding levels will need to be increased to achieve goals established in Virginia’s Phase III WIP. A comprehensive review of the VACS Program over the last two years has led to improved program efficiency, increased flexibility in agricultural practice standards and specifications, and other significant programmatic revisions. Additional efforts are focused on methods to improve tracking of voluntarily installed.

Chesapeake Bay and Virginia Waters Clean-Up Plan Report

During FY 2019, many strategies were implemented to reduce pollutants entering the Chesapeake Bay tributaries and Southern Rivers basins. Significant progress was made in reducing point source pollutant discharges from sewage treatment plants, installing agricultural best management practices with a continuing focus on livestock exclusion practices, the reissuance of all remaining administratively continued Municipal Separate Storm Sewer System (MS4) permits, and implementing revised Stormwater Management Regulations. Virginia submitted its draft Chesapeake Bay TMDL Phase III Watershed Implementation Plan to EPA on April 5, 2019. The final plan was submitted to EPA on August 23, 2019. Virginia agencies are wrapping up the 2018-2019 WIP milestones period and drafting the 2020-2021 WIP milestones.

In FY 2019, DEQ developed 30 Total Maximum Daily Load (TMDL) equations for small watersheds and completed 2 TMDL implementation plans covering 95 impaired waterbody segments. In the first half of FY 2019, a total of 98 small TMDL Implementation Watersheds saw BMP activity resulting in a total of 426 BMPs installed using a total of $6,176,617 of Federal and State funds and landowner contributions.