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 2021 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 2021 as required in § 2.2-220.1. This consolidated report also addresses Item 361.A. in the 2018 Special Session I Budget for FY 2021 and FY 2022 in Chapter 2.

Water Quality Improvement Fund and Cooperative Nonpoint Source Pollution Programs

For FY 2021 (the period July 1, 2020 – June 30, 2021), DCR initially allocated $35.0 million in agricultural cost-share and $5.85 million in technical assistance funds to Soil and Water Conservation Districts. An additional $5.6 million in agricultural cost-share and $547,000 in technical assistance funds were allocated to Districts in December 2020. Finally, $500,000 in Conservation Reserve Enhancement Program (CREP) cost-share funds were available for disbursement to Districts as state match for new projects. Practices installed on farms during FY 2021 will result in estimated edge of field nitrogen reductions of approximately 10.9 million pounds, phosphorus reductions of approximately 4.0 million pounds, and sediment reductions of approximately 770,000 tons.

Under the Water Quality Improvement Fund (WQIF) Point Source Program, since 2006, 69 point source WQIF grant agreements obligating $798.7 million have been signed. The construction project grants range from 35% to 90% cost-share, for design and installation of nutrient reduction technology at Chesapeake Bay watershed point source discharges. The WQIF point source grants provide critical support for compliance with the nutrient discharge control regulations and achieving Chesapeake Bay nitrogen and phosphorus waste load allocations. Sixty-six of the projects have been completed and are operational. A summary of active construction grant projects is accessible via the DEQ WQIF webpage. For calendar year 2020, 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 Chesapeake Bay tributary basins. Tables of discharged and delivered loads for each individual facility and basin totals are available online from DEQ.

With nonpoint source funding made available through the WQIF, along with matching funds, DEQ has worked with local government and state agency partners to implement a wide range of actions to reduce nonpoint source pollution that contributes to water quality problems.

Although there has been no additional WQIF Nonpoint Source Program funding since 2016, implementation activities continue under a Request for Assistance (RFA) made available to local government (cities, towns, counties, Soil and Water Conservation Districts, and Planning District Commissions) and state agency applicants. DEQ continues to manage projects awarded through the $3.4 million RFA. These nonpoint source (NPS) pollution implementation projects are at various stages of completion.

Within the Chesapeake Bay Watershed, projects that maximize reduction of nitrogen, phosphorous or sediment were a funding priority. Projects with the highest pollution reduction relative to dollars requested were given priority. These projects implement pollution control actions that will have a significant and lasting impact on local and state water quality. After nearly four years of implementation, many projects are nearing completion. One project has been terminated and several projects have been completed. Overall, pollution reductions are expected to be in line with original reduction estimates.

Funding Needs for Effective Implementation of Agricultural Best Management Practices

The funding projections for the effective implementation of best management plans was determined using a revised formula for FY 2020 and future years. These 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 2019 and assumes the practices included in the WIP are implemented.

A revised estimate of $2.6 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 2021 allocations from state sources for implementation of agricultural best management practices (BMPs) had the following breakdown:

FY 2021 (Program Name – amount):

VACS Cost-Share program funding - $40.6 million

District Technical Assistance - $6.4 million

District Financial Assistance - $7.1 million

FY 2021 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 BMPs through the FY 2020-2030 biennium are estimated in the 2021 Ag Needs Assessment Table on page 22. A comprehensive review of the VACS Program that began in 2019 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 practices.

Chesapeake Bay and Virginia Waters Clean-Up Plan Report

During FY 2021, 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 BMPs with a continuing focus on livestock exclusion practices, the reissuance of administratively continued Phase 1 Municipal Separate Storm Sewer System (MS4) permits, and implementing revised Stormwater Management Regulations. Virginia agencies are wrapping up the 2020-2021 WIP milestones period and drafting the 2022-2023 WIP milestones. DEQ’s five year 2019 Virginia Nonpoint Source Pollution Management Plan (drafted April 2019), was fully approved in March 2020, and the first annual report for this plan was submitted to EPA in February 2021.

In FY 2021, DEQ developed 10 Total Maximum Daily Load (TMDL) equations for small watersheds and completed two Implementation Plans covering 19 waterbody impairments. The NPS program has shifted its reporting window due to the limited availability of information; in FY 2020, a total of 223 small TMDL Implementation Watersheds saw BMP activity resulting in a total of 4,129 BMPs installed using a total of $22,921,761 of Federal and State funds as well as landowner contributions.