In recent years, one of VACo’s top priorities has been support for robust levels of funding for the Water Quality Improvement Fund (WQIF). The WQIF is a stand-alone fund created by the 1997 General Assembly to financially assist local governments improve water quality. By statute, WQIF is capitalized primarily through the deposit of 10 percent of surplus revenues left over from a previous fiscal year.
For FY 2017, Governor Terry McAuliffe proposes a deposit of $61.7 million into WQIF. As the details below will elaborate, the lion’s share of this sum will be allocated to support an agricultural cost share program on a statewide basis. This initiative is consistent with positions in VACo’s 2016 Legislative Program. The Governor also proposes a $59 bond initiative intended to provide “nutrient removal grants” to assist wastewater treatment plants in meeting the capital costs associated with the installation of biological nutrient reduction technology.
Unlike recent budgets approved by the General Assembly, Governor McAuliffe’s proposed budget does not authorize issuance of Virginia Public Building Authority (VPBA) bonds for the Stormwater Local Assistance Fund (SLAF) in any specific amounts. Instead, VPBA is authorized to issue bonds for SLAF “to the extent available.” In recent years, SLAF has been an important resource for grants to assist more urbanized localities upgrade stormwater facilities.
The Governor’s biennial spending plan, which covers FY 2017-2018, was released on December 17 when he addressed the General Assembly’s joint money committees.
Department of Conservation and Recreation (DCR)
Water Quality Improvement Fund
-Requires the deposit of $61.7 million in the first year from the general fund into WQIF. Of this amount:
$800,000 will be dedicated to the Conservation Reserve Enhancement Program (CREP), a federal program to preserve open space.
Up to $500,000 to develop a tracking and reporting module as part of the agricultural Best Management Practices (BMP) data base.
$250,000 to be transferred to the Department of Forestry for water quality grants.
$100,000 as financial assistance for the development of nutrient management plans for golf courses.
-Of the remaining amount of WQIF $51.8 million is to be transferred to the Virginia Natural Resources Commitment Fund (a sub-fund of WQIF) to be distributed as follows:
$25.9 for Agricultural Best Management Practices (BMP) cost share assistance. Of this amount $15.9 million will be used for matching grants to farmers for lands that are exclusively within, or partially within, the Chesapeake Bay watershed. $10.3 million will be available to farmers with lands outside of the Chesapeake Bay watershed.
$6.2 million is allocated for technical assistance by Soil and Water Conservation Districts to participants in the Agricultural BMP program.
$19.6 million for implementation of previously approved livestock stream exclusion practices. Of this amount $9.8 million is for lands within the Chesapeake Bay watershed. $9.8 million is for lands outside of the Chesapeake Bay watershed.
Other expenditures by DCR
-$16 million each year from the general fund for deposit in the Virginia Land Conservation Fund to meet statutory obligations under Section 10.1-1020 of the Code of Virginia. Of the remaining funds, 50 percent is to be used for grants for fee simple acquisitions of easements with public access.
-Language is included providing for interest earnings on the WQIF to be deposited into the Natural Resources Commitment Fund to support a position within the Department of Conservation and Recreation to administer grant programs.
-$10 million in each year of the biennium in non-general funds (revenues from the recordation tax) will be deposited into the Natural Resources Commitment Fund. Of this amount $1.2 million would be distributed to Soil and Water Conservation districts to pay for technical assistance for farmers. $8.8 million allocated for agricultural BMPs statewide.
-Provides $6.8 million in both years of the biennium from the general fund for distribution to Soil and Water Conservation districts for administrative and operational support. Of that amount:
$312,000 will be distributed each year to soil and water conservation district for maintenance of dams at a rate of $3,000 per dam.
$150,000 each year would be dedicated for making small dam repairs.
-$500,000 from the general fund to support the Natural Heritage Program to fund management activities in Virginia’s 61 natural area preserves.
-$464,000 for each year of the biennium from the general fund is to be deposited into the Dam Safety, Flood Prevention and Protection Assistance Fund established to support dam inventory, evaluation, classification and flood plain management.
-$8,500 from the general fund in both years of the biennium to support the Rappahannock River Commission.
-$150,000 for each year to DCR in support of Shoreline Erosion Advisory Services.
-Includes language requiring DCR in collaboration with Soil and Water Conservation districts to develop a plan containing cost estimates for the rehabilitation of high hazard dams owned by Soil and Water Conservation districts. The plan is to be submitted to the Governor, the Chair of the House Appropriations Committee and the Chair of the Senate Finance Committee. The deadline for submitting an interim plan is November 1, 2016. The final plan is to be completed one year later.
Department of Environmental Quality (DEQ)
-$59 million in bonds authorized allowing DEQ to provide “nutrient removal grants to wastewater treatment plants considered significant and nonsignificant dischargers for capital costs incurred for the design and installation of nutrient removal technology.
-$3.2 million each year of the biennium from federal funds for general implementation of state and local stormwater management programs.
-$3 million from WQIF in the first year of the biennium for DEQ to conduct the James River Chlorophyll Study.
-$151,000 each year of the biennium from the general fund to pay annual membership dues for the Interstate Commission of the Potomac River Basin.
-$11,200 in each year of the biennium in general funds for Virginia’s participation in the Roanoke River Bi-State Commission and the Roanoke River Basin Advisory Committee.
-Includes language authorizing DEQ to capitalize the Nutrient Offset Fund to provide grants t support animal waste to energy projects.
-Includes language allowing DEQ to provide funding to the Virginia Geographical Information Network (VGIN) to implement a statewide “orthography to improve land coverage data necessary to assist localities I planning and implementing stormwater management programs.” DEQ is also directed to use “LIDAR surveys of elevations along coastal areas to support activities related to management of recurrent coastal flooding.”
-Includes language requiring local governments that have adopted stormwater utility fees to report to DEQ by October 1 of each year information about “each program funded under these fees and the expected nutrient and sediment reductions for each of these programs.” The Auditor of Public Accounts is to include specifications to ensure that localities are in compliance with the Section 15.2-2114 of the Code of Virginia, which authorizes localities to impose stormwater utility fees.
-Includes language providing that permit fee regulations adopted by the State Water Control Board (SWCB) must be set at an amount not to exceed “the direct costs for the administration, compliance and enforcement of Virginia Pollution Discharge Elimination System (VPDES) permits and Virginia Pollution Abatement (VPA) permits.
-Includes language requiring public institutions of higher learning (including community colleges) to be subject to project review and compliance with state Erosion and Sediment Control programs administered by local governments.
-Includes language authorizing the issuance of Virginia Public Building Authority (VPBA) revenue bonds to finance the Water Quality Improvement Fund (WQIF) “to the extent available.”
-Includes language authorizing the issuance of Virginia Public Building Authority (VPBA) revenue bonds to finance the Stormwater Local Assistance Fund (SLAF), the Combined Sewer Overflow Matching Fund and related programs “to the extent available.”
-Includes language reaffirming the purpose of SLAF, which is to “provide matching grants to local governments for planning, design, implementation of the stormwater Best Management Practices (BMPs)” and also states that the grants “shall be used solely for capital projects meeting all pre-requirements for implementation, including 1) new stormwater BMPs; 2) stormwater BMP retrofits; 3) stream restoration; 4) Low Impact Development (LID) projects; 5) vegetative buffer restoration; 6) pond retrofits and 6) wetland restoration.
Office of the Secretary of Natural Resources
-The Governor’s proposed budget includes language requiring the Secretary of Natural Resources November 4 of each year, to issue a report on implementation of Chesapeake Bay nutrient reduction strategies. The report will be issued to the chairs of the House Appropriations Committee; the House Committee on Conservation and Natural Resources; the Senate Finance Committee; and the Senate Committee on Agriculture, Conservation and Natural Resources.
Agriculture and Forestry
The Governor proposes a substantial increase (from $2 million in the current biennium to $4 million in the next biennium) in spending for the Agricultural and Forestry Industries Development Fund (AFID), which was established by the General Assembly in 2012 for the purpose of attracting and expanding agricultural and forestry based industries. The Governor also proposes a substantial increase over the previous biennium for the Virginia Farmland Preservation Fund. This fund supports the implementation of Purchase of Development Rights programs.
Department of Forestry (DOF)
-$1.8 million from general funds provided each year for the Reforestation and Timberland Programs.
-Contains language requiring DOF to report by December 15 of each year of the progress of implementing the silvicultural water quality laws of Virginia to the Chairs of the Senate Finance Committee and the House Appropriations Committee.
Virginia Department of Agriculture and Consumer Services (VDACS)
-$2 million each year from the general fund is to be deposited in the Agriculture and Forestry Industries Development Fund (AFID) for payments of grants to entities interested in attracting or expanding agricultural and forestry based industries in accordance with Section 3.2-304 of the Code of Virginia.
-$2 million each year from the general fund is to be deposited in the Virginia Farmland Preservation Fund. Pursuant to Section 3.2.201 of the Code of Virginia, a principal purpose of this fund is to provide grant funds to localities to support Purchase of Development Rights programs.
-$1.7 million each year for the promotion of Virginia’s agricultural products overseas.
-Contains language authorizing VDACS to collect annual inspection fees from establishments that are subject to VDACS’s regulations, which may entities involved with the processing and sales of certain food products. The language states that “any such establishment that is subject to any permit fee, risk assessment fee, or similar fee imposed by any locality shall be subject to (the VDACS) annual inspection fee and the locally imposed fee, when combined, do not exceed $40.”
VACo Contact: Larry Land, CAE