Op-Ed: Natural Gas Part of Energy Future Along With Renewables

Delmarva Now op-ed (2018-04-24) Salisbury University Perdue School of Business finance professor Dan Ervin cautioned against energy policies that completely discard fossil fuels, particularly natural gas, in favor of solar and wind energy. Ervin argued that implementing a 100% renewable energy policy based on current solar and wind energy technologies will drive up Maryland’s energy prices and stifle the state’s economy.

Ervin stated that continuing innovations and investments need to be made in natural gas technologies and supported proposed pipeline projects in the state and that while solar and wind costs have dropped neither are “economically viable without subsidies.” Ervin also highlighted energy sector emission declines in the United States for carbon dioxide, sulfur dioxide, and nitrogen oxide declines since 2006. From the op-ed:

In general, pipelines are the safest method of fuel transportation. Nationally, dozens of environmental groups are involved in a “keep-it-in-the-ground” campaign, zeroing in on oil and gas companies that provide 80 percent of the nation’s energy and 12 million jobs. …

The proponents of solar and wind know the combination of these two technologies account for just slightly more than 3 percent of America’s energy supply and 7 percent of the nation’s electricity, despite generous help from federal tax credits and state mandates for renewables. …

With energy consumption expected to grow substantially during the next 30 years, we’d better be prepared. For all the talk about the prospects of wind and sun meeting all of our energy needs by mid-century, the evidence suggests it’s a bad idea, and we would pay a huge price for such shortsightedness in electricity shortages, in closed industries and in lost jobs.

Conowingo Dam to Get Separate Nutrient Targets But Who Pays Remains Up in the Air

Maryland Reporter article (2018-04-12) reported that the Conowingo Dam will be getting its own nutrient reduction targets under the Chesapeake Bay Total Maximum Daily Load Phase III Watershed Implementation Plan (WIP). The Dam and its reservoir on the Susquehanna River has reached its capacity to trap nutrients and sediment and during major storm events can release significant pollution that disrupts efforts underway further down the main stem of the Bay and some of its tributaries.

Earlier WIPs assumed that the Dam’s nutrient and sediment trapping capacity remained intact but after research showed that the trapping capacity had been exhausted, the Bay watershed states were left with an unanticipated new source of water pollution that has to be addressed. The Dam’s pollution is estimated to generate 6 million pounds of nitrogen and 260,000 pounds of phosphorus annually that now must be offset. In response, the Dam will now have its own Phase III WIP goals, similar to those of each Bay watershed state. From the article:

The Conowingo plan will identify nutrient reduction efforts that go “above and beyond” those in the state plans. The rationale for the shared plan, [Maryland Department of the Environment Water and Science Administration Director Lee] Currey said, is that Bay-wide water quality benefited when Conowingo was trapping nutrients, effectively lessening the amount of cleanup work each state had to do. Now that those nutrients are being washed downstream, all of the jurisdictions should pool their resources and work together to offset their impact.

The article explained that the actual implementation of nutrient control actions will be focused on those areas that will have the maximum effect in offsetting the Dam’s pollution – mainly parts of Maryland, New York, and Pennsylvania. This approach is more cost effective than requiring all parts of the Bay watershed to share the Conowingo’s load equally. However, this approach leads to a secondary question – who will pay for all of this?

The cost to offset the Conowingo’s pollution load is expected to cost many millions of dollars and the article states that Exelon, the dam’s owner, will be expected to contribute a reasonable portion of the funding but it is unlikely that the company can afford all of the costs. Maryland has significant power over how much Exelon will pay as Exelon requires the State’s approval as part of its relicensing process under the Federal Energy Regulatory Commission. The Maryland Department of the Environment will make a final decision on its re-certification decision (along with conditions such as a funding requirement) in mid-May. From the article:

“Once we know how much additional capital results from [the Conowingo certification], there may be a gap,” Currey said. “Then the question is, ‘How do we best close that gap?’”

To help answer that question, the EPA will soon seek a third-party contractor to manage the implementation of the Conowingo WIP. That includes identifying where pollution control practices can be implemented most cost-effectively and overseeing pooled money to implement the plan.

But a major part of the job will be identifying sources of money that could help plug any funding gap. Options could range from finding previously untapped sources of federal funding to testing new types of public-private partnerships that could bring more nongovernmental money to the effort.

The article also discussed how the United States Environmental Protection Agency would hold Bay watershed states accountable if the Conowingo Dam fails to meet its nutrient reduction targets. A draft version of the Conowingo plan will be available for public comment in early 2019.

Useful Links

Prior Conduit Street Coverage of Conowingo Dam

 

 

Unique Long-Term Study Finds Sewer Overflows, Stormwater BMPs Have Greatest Water Quality Impacts in Gwynns Falls Watershed

Baltimore Sun article (2018-04-16) reported on a recently released study quantifying pollution sources and clean-up efforts in the Baltimore City and Baltimore Count Gwynns Falls watershed. The study was compiled by the United States Geological Survey (USGS), in partnership with Blue Water Baltimore and the Cary Institute of Ecosystem Studies. The study tracked water quality in the 171 square kilometer watershed from 1998 to 2016.

Source: USGS

The study is unusual in that it was able to analyze 20 years of water quality data for an urban area (something that does not exist for many urban environments areas) and pinpoint both water pollution sources leading to watershed degradation as well as the positive effects of various kinds of watershed restoration projects. The study factored in climate change and the increased precipitation the watershed has received over time.

The study found that a major contributor to watershed degradation was sewer overflows while the installation of stormwater best management practices (BMPs) likely have a positive effect on water quality. From the study:

However, sanitary sewer overflows and best management practices, are factors that appear to affect the water quality at Carroll Park, the most downstream location monitored in the Gwynns Falls watershed. The increasing duration of sanitary sewer overflows was related to increasing loads and concentrations of nutrients; sanitary sewer overflow volume was related to total coliform levels. In contrast, installation of  structural best management practices appears to be related to declines in phosphorus. These outcomes, while preliminary, indicate that current efforts and investments in gray and green infrastructure improvements likely positively affect the water quality of the Gwynns Falls watershed. Further, this study has established a framework to evaluate the effect of future gray infrastructure repairs in accordance with the Baltimore City and County Consent Decrees and green infrastructure installation.

Additional comments provided by the Sun article:

“We’ve known a long time, sewage bad, stormwater projects good,” said Alice Volpitta, water quality manager for Blue Water. “Now we can say with scientific certainty that that is the case, and that carries a lot of weight.” …

“This is the first time with statistical accuracy we can say sewage is really detrimental to water quality,” Volpitta said.

Peter Groffman, professor at the City University of New York Advanced Science Research Center and a senior research fellow at the Cary Institute of Ecosystem Studies in New York, said long-term data “is the only way to know for sure whether our investments in clean water infrastructure are working.”

“Even with 20 years of water quality data, we are just beginning to see the long-term effects of sewage overflows and water main breaks, along with the stormwater projects that are designed to address polluted runoff,” Groffman said.

Useful Links

USGS 2018 Report: Factors Affecting Long-Term Trends in Surface Water Quality in Gwynn Falls Watershed

Does Annapolis Landfill Project Point to the Future of Utility Scale Solar?

Bay Journal article (2018-04-16) questioned whether a new solar facility that is sited on a closed municipal landfill can help answer the land use concerns posed by utility scale solar projects. The Annapolis Renewable Energy Park, a 16 Mega Watt solar array set on roughly 80 acres that used to be the landfill for the City of Annapolis, is largest landfill-based energy generation project in the nation according to the project’s developers.

MACo has noted that large scale solar projects can provide many benefits but also pose land use challenges that include the targeting of prime agricultural lands and open space. While the Maryland General Assembly responded to a MACo initiative during the 2017 Session by passing legislation (HB 1350) that provided a greater role for counties and municipalities in the siting of all kinds of energy generation facilities, there is still immense pressure to for solar developments on farmland and open space throughout Maryland. MACo has supported solar development on alternative sites, such as brownfields and greyfields.

The article stated that Maryland has developed an estimated 958 megawatts of solar and is second only to New York in solar development among Chesapeake Bay watershed states. Conversely, the article noted that Virginia’s market has just started to rapidly expand due to recent state legislation while Pennsylvania’s market remains stagnant due to “unfavorable” state rules.

The article discussed recent zoning actions taken by several counties in order to ensure solar facilities do disrupt the agricultural, natural, historical, or cultural fabric of their jurisdictions. The article cited Anne Arundel, Caroline, Frederick, Kent, and Talbot counties in particular.

The article also provided various viewpoints on the agricultural and land use issues posed by utility scale solar:

“It’s almost like the wild, wild West out there, and whoever gets their stake in the ground first wins,” said Colby Ferguson, government relations director of the Maryland Farm Bureau. …

“For every 1,000 acres taken out of [agricultural] production, we lose a farm,” Ferguson said. …

“These guys are coming in and dangling pots of money [in front of landowners],” said state Sen. J. B. Jennings, a Republican representing Baltimore and Harford counties, and a farmer himself. “It’s just taking up valuable farmland.” …

“How do we find something that’s balanced?” [Anne Arundel County Planning and Zoning Officer Philip] Hager asked. “It’s a very complex situation, with a lot of stakeholders.” …

“It’s unfortunate there’s a perception problem,” said Mike Volpe, vice president of Open Road Renewables, a Texas firm, and spokesman for a coalition of utility-scale solar developers. He pointed out that such projects can generate jobs and much-needed tax revenue for poor rural counties. …

“It’s cheaper to just go out to a farm field and drill ground screws and anchor to the ground,” said Paul Curran, managing director of BQ Energy LLC, the New York-based firm developing the [Annapolis] landfill project. It also took longer to plan and get regulators’ approval, Curran said, something many solar developers wouldn’t put up with.

Useful Links

HB 1350 of 2017

Prior Conduit Street Coverage of Solar Energy Facility Siting

A Century of Innovation: Celebrate with WSSC

wsscJoin WSSC on May 1, 2018 for the WSSC Water Symposium: A Century of Innovation. This event focuses on the future of innovation in the water industry and recognizes WSSC’s 100 years of service. You will hear from WSSC GM/CEO Carla Reid and other industry leaders, as well as experts in energy, resource recovery and technology.

Highlights include four, interactive panel discussions about the latest innovations, current research and what’s on the horizon. Topics include smart water technology, adapting to climate change, resource recovery and WSSC’s upcoming Bio-Energy Project.

We look forward to this dynamic event designed for water industry professionals to come together to learn, discuss and collaborate. Let’s share best practices and develop partnerships to provide the residents of the National Capital Region with life’s most precious resource. A Centennial reception will immediately follow the program.

 

Review the agenda and register at https://www.wsscwater.com/symposium

Round-up of the 2018 Session for Counties

MACo’s legislative efforts earned an 80% success rate – and as usual, the counties’ voice makes a difference in Annapolis. Bills we support are more likely to pass, and bills we oppose are more likely to fail.

2018 Legislative Results Infographic

MACo’s legislative initiatives, priorities, and positions are directed by its Legislative Committee. This body comprises elected representatives from all of MACo’s members – the 24 county jurisdictions (including Baltimore City).

The “one county, one vote” system of deciding the Association’s legislative strategies, ensures that all counties have an equal voice. All 24 jurisdictions participated regularly in the weekly meetings throughout the session – where they also engaged with policy leaders and advocates who joined the meeting to address county leadership.

Our policy staff have compiled updates and results on all of the bills the Legislative Committee decided to take action on this year.

For the 2018 End of Session Wrap-up for each subject MACo covers, click below:

2018 End of Session Wrap-Up: Assessments and Taxation

2018 End of Session Wrap-Up: Business Affairs

2018 End of Session Wrap-Up: Disparity Grants

2018 End of Session Wrap-up: Economic Development Tax Credits

2018 End of Session Wrap-Up: Education

2018 End of Session Wrap-Up: Elections

2018 End of Session Wrap-Up: Employee Benefits & Relations

2018 End of Session Wrap-Up: Environmental Legislation

2018 End of Session Wrap-Up: Finance and Procurement

2018 End of Session Wrap-Up: Government Liability & Courts

2018 End of Session Wrap-Up: Health & Human Services

2018 End of Session Wrap-Up: Housing & Community Development

2018 End of Session Wrap-Up: Intergovernmental Relations *MACo Initiative Area*

2018 End of Session Wrap-Up: Parks & Recreation

2018 End of Session Wrap-Up: Pensions

2018 End of Session Wrap-Up: Planning & Zoning

2018 End of Session Wrap-Up: Property Taxes

2018 End of Session Wrap-Up: Public Information & Ethics * MACo Initiative Area *

2018 End of Session Wrap-Up: Public Safety and Corrections

2018 End of Session Wrap-Up: Road Funding * MACo Initiative Area *

2018 End of Session Wrap-Up: School Construction * MACo Initiative Area *

2018 End of Session Wrap-Up: State Budget & Fiscal Affairs

2018 End of Session Wrap-Up: Tax Sale Bills

2018 End of Session Wrap-Up: Transportation and Public Works

2018 End of Session Wrap-up: Wynne Tax Bills

2018 End of Session Wrap-Up: County Tax Revenues

2018 End of Session Wrap-Up: Other Tax Bills

Montgomery Considers Major Changes of County Stormwater Program

Bethesda Beat article (2018-04-11) reported that Montgomery County Executive Ike Leggett has proposed scaling back the County’s stormwater treatment program in response to concerns about the program’s fiscal sustainability and the inclusion of an 800 additional treated acres that the County was previously not receiving credit for. The article stated that Leggett has recommended reducing the Department of Environmental Protection’s capital budget by $240 million and is based on plans to cancel $113 million in stormwater projects, not filling seven vacant positions, and from project oversight efficiencies generated by reorganizing the Department. Leggett is also proposing no increase in the County’s stormwater remediation fee (also known as the “rain tax”).

The proposed cutbacks come while the County remains under a consent decree for failure to attain its stormwater reduction goals under its Phase I Municipal Separate Storm Sewer System (MS4) permit. The permit is required by the federal government but the terms and enforcement is set by the State. The article stated that the County has until 2020 to treat a total of 3,800 acres of impervious surface or face a $300,000 fine.

According to the article, Leggett’s proposal has produced concern in the environmental community. From the article:

Kit Gage, advocacy director for the environmental group Friends of Sligo Creek, wrote in a guest post on the local blog Seventh State, that Leggett’s proposal “makes no sense.”

“The county already has to do special projects because it didn’t do enough stormwater work,” Gage wrote, referring to the county’s failure to meet a state-mandated requirement to treat runoff from impervious surfaces such as the water that flows off roofs and across parking lots and roads. …

“This department needs to have greater efficiencies and that’s what we’re trying to do,” Leggett said in an interview last week. “We’ve slowed down capital spending related to schools, recreation, fire stations and everything else. But the environmental community wanted us to continue to increase the fee and they’re the only ones that don’t want to have a slow down. If the council wants to increase the fee—they can do so, but I’m not going to do that.”

The article stated that the County Council is scheduled to decide on Leggett’s proposed capital budget reductions in mid-May. Some Council Members also had questions concerning departmental operations and the recent accounting changes that allowed 800 additional acres to be counted towards the County’s MS4 goal:

“It does sound like a significant error was made,” Berliner said. “Typically what we expect of any administration or ourselves when a significant error is made is an after-the-fact review so we get a report exactly why was this mistake made.”

Council member George Leventhal said in an interview last week that he believes Leggett and the county budget department were correct in wondering why the county had accomplished so little toward meeting the permit requirements despite increasing the stormwater fees year after year.

The article also discussed how the Department is revamping its contract process for stormwater proecess. Rather than contract on a project-by-project basis, the new system will hold contractors responsible for certain acreage targets but allow them to decide which projects they will undertake.

2018 End of Session Wrap-Up: Environmental Legislation

This post summarizes the status of various environment bills that MACo took a position on for the 2018 Regular Session.

Septic Systems – Septic Stewardship Act of 2018: HB 361 / SB 314 is an Administration bill that would change septic fee charges and uses under the Bay Restoration Fund (BRF). The bill had three primary parts:

  1. The bill would have exempted a septic system owner from paying the BRF fee if: (1) the owner has a septic system using best available nitrogen removal technology (BAT); and (2) the owner did not receive a State or federal grant or income tax subtraction modification for installing the BAT system.
  2. The bill would have altered how the money going into the BRF septic system/cover crop account is divided. Currently, 60% of the funds going into the account goes towards septic systems (including BAT upgrades and connections to wastewater treatment plants) and 40% goes to the Maryland Agriculture Water Quality Cost Share Program within the Department of Agriculture for cover crop activities. The bill would change that distribution to 50% for septics and 50% for cover crops.
  3. The bill would have allowed BRF septic system money to be used by eligible homeowners for the reasonable cost of pumping out a septic system once every 5 years. In order to be eligible, the homeowner must reside in a local jurisdiction that has developed a “septic stewardship plan.” The plan must include provisions to ensure that septic systems are properly operated and maintained, including being subject to routine pump-outs and inspections.

Push Icons-MORE WORKMACo Position: MACo supported the bill with amendments to retain the current 60 % septic/40% cover crop allocation. MACo also noted the voluntary septic stewardship plan would provide another “tool in the toolbox” for county governments to address their septic system nitrogen loads.

FINAL STATUS: The House Environment and Transportation Committee gave HB 361 an unfavorable report. The Senate Education, Health, and Environmental Affairs Committee gave SB 314 an unfavorable report.

MACo Testimony on HB 361

MACo Testimony on SB 314

Septic Systems – BAT Septics Near Streams: HB 719 would require a property owner to install a septic system that uses BAT or replace an existing septic system with a BAT system if: (1) the system is within 1,000 feet of a “blue-line stream” that is located in the watershed of a nitrogen-impaired body of water; and (2) there is construction activity on the property requiring the approval of a general permit for stormwater. “Blue-line stream” means a stream that appears as a broken or solid blue line or purple line on a U.S. Geological Survey topographic map.

MACo Position: MACo opposed the bill, arguing that: (1) the bill’s mandate is overbroad and that the General Assembly previously rejected a similar “BAT everywhere” mandate in 2017; (2) the use of BAT systems in these areas would result in minimal nitrogen reductions for significant cost; and (3) the bill limits county flexibility in addressing septic system nitrogen pollution.

Push Icons-DEFEATEDFINAL STATUS: The House Environment and Transportation Committee gave HB 719 an unfavorable report.

MACo Testimony on HB 719

 

 

Septic Systems – Watershed Implementation Plan Credits, BRF Uses, & Septic Stewardship Plans: HB 1765 would clarify how a county may take credit for nitrogen reductions for septic systems and authorize a local jurisdiction to create a “septic stewardship plan” to assist homeowners in the maintenance and operation, including pump outs, of their septic systems. The bill would:

  1. provide that a reduction in nitrogen for upgrading a septic system to BAT may count towards the nitrogen load reduction required in a local jurisdiction’s Phase III Chesapeake Bay Watershed Implementation Plan (WIP) if there is a current operation and maintenance contract for the septic system;
  2. authorize a local jurisdiction to use up to 10% of their BRF septic account allocation to assist eligible homeowners for the reasonable cost of an operation and maintenance contract that provides for, at least once every 5 years, the pumping out of the septic system if: (i) the homeowner verifies the operation and maintenance contract; and (ii) the homeowner resides in a local jurisdiction that has established a septic stewardship plan;
  3. provide that BRF septic account funds may be used to provide financial assistance to a local jurisdiction for a septic stewardship plan in fiscal years 2020 and 2021;
  4. specify that the financial assistance for homeowners: (i) shall be based on homeowner income, with priority given to low-income homeowners; and (ii) may be provided through grants, rebates, or low- or no-interest loans;
  5. require that a septic stewardship plan include: (i) specific goals consistent with the nitrogen load reduction consistent with the local jurisdiction’s WIP; (ii) public education and outreach measures that will be taken, including best management practices, legal requirements, and existing support and financial assistance; (iii) technical guidance for the siting, design, evaluation, and construction of a septic system; (iv) a requirement that a septic system located on residential property to be pumped out, inspected, and tested at least once every 5 years; (v) certification and licensing procedures for a person that pumps out and inspects septic systems; (vi) enforcement mechanisms, compliance incentives, and penalties; (vii) funding mechanisms to support the plan and expand education, demonstration projects, and inspections; (viii) requirements for record keeping; and (ix) a process for periodically evaluating and revising the plan.

MACo Position: MACo supported the bill, arguing that it gives counties another “tool in the toolbox” to meet their nitrogen reduction goals under their WIPs. As a county exhausts its options for connecting failing septic systems to public sewer or upgrading them to BAT systems, it may make sense for the county to encourage the proper operation and maintenance of septic systems.

Push Icons-IMPROVEDFINAL STATUS: The General Assembly passed HB 1765 with MACo-supported amendments that: (1) authorized a local jurisdiction with a septic stewardship plan to receive nitrogen reduction credit for the pumping out of a septic system; (2) clarified that it is a local jurisdiction’s governing body that must adopt the septic stewardship plan, after consultation with the jurisdiction’s local health department; (3) ensuring that the appropriate local officials have access to the Department of the Environment’s BAT septic database for credit calculation purposes; and (4) several other technical and clarifying changes.

MACo Testimony on HB 1765

Sea Level Rise and Coastal Flooding – Construction Standards, Adaptation, and Mitigation: As introduced, HB 1350 / SB 1006 would : (1) add new requirements to the Coast Smart siting and design criteria; (2) subject local structure and highway facility projects to the Coast Smart criteria if the State funds at least 30% of the project; (3) require local jurisdictions subject to nuisance flooding to draft a plan to address the flooding and submit the plan to the Maryland Department of Planning (MDP) for approval once every 5 years; (4) require MDP to establish a saltwater intrusion adaptation plan; (5) require the Board of Public Works to establish criteria for when state funds may be used for sea level rise and coastal flooding mitigation; and (6) require real estate vendors to provide notice to potential purchasers of certain property vulnerable to sea level rise.

MACo Position: MACo opposed the bill, arguing that: (1) the application of the Coast Smart siting and design should be required to apply to local projects where the majority of funding is provided by local governments; and (2) preparing and submitting a nuisance flooding plan to MDP for formal approval increases county costs and risks MDP imposing costly, unnecessary, or ill-fitting mandates on a county.

Push Icons-IMPROVEDFINAL STATUS: The General Assembly passed HB 1350 and SB 1006 with MACo-supported amendments that: (1) limited the application of Coast Smart design and siting criteria to local structure projects where at least 50% of the project costs are funded with State funds and the project costs at least $500,000; and (2) required affected counties to develop a nuisance flooding plan but removed the MDP approval component. The amendments also added the State Treasurer or the Treasurer’s designee to the Coast Smart Council, included the Maryalnd Emergency Management Agency in State mitigation efforts, and deleted the real estate vendor notice provision.

MACo Testimony on HB 1350

MACo Testimony on SB 1006

Mosquito Spraying – Notice to Municipalities: HB 400 would require the State, a county, or a bi-county agency to provide at least 24 hours of notice to a municipality before spraying for mosquitoes within the boundaries of the municipality. The state, county, or bi-county agency must provide the municipality the location of spraying and the planned date and time of the spraying.

MACo Position: MACo supported the bill with amendments to waive the 24-hour notice when the spraying is needed to control an outbreak of a virus, contagion, or similar public health threat. In that case, notice should be provided as soon as practicable.

Push Icons-IMPROVEDFINAL STATUS: The General Assembly passed HB 400 with the MACo amendments.

MACo Testimony on HB 400

 

 

Recycling – Mattresses and Box Springs: HB 850 would require a county to include a strategy for managing the disposal of mattresses and box springs in their recycling plan by October 1, 2019. The strategy must include: (1) eliminating the disposal of mattresses and box springs from landfills and incinerators; (2) preventing the dumping of mattresses and box springs; (3) recycling mattresses and box springs; and (4) promoting related business and social programs that create jobs for unemployed, homeless, disabled, or formerly incarcerated individuals and disadvantaged youths. The Maryland Department of the Environment would provide technical support but no financial support.

MACo Position: MACo opposed the bill, noting that: (1) the bill would impose a costly new mandate on county governments that could be very difficult for certain counties to achieve; and (2) the mandate imposed by the bill is counter to the General Assembly’s recycling approach that has been in place for more than a decade. MACo cited many alternative recycling solutions the General Assembly has passed or considered since 2005 for other problem waste stream items that did not involve an unfunded mandate on county governments.

Push Icons-DEFEATEDFINAL STATUS: The House Environment and Transportation Committee gave HB 850 an unfavorable report.

MACo Testimony on HB 850

Final Fate of Controversial FCA Legislation Up to the House

The House Environment and Transportation Committee is considering whether to take action on legislation pertaining to the Maryland Forest Conservation Act (FCA). HB 766 (sponsored by Delegate Anne Healey) and SB 610 (sponsored by Senator Ron Young) are a legislative priorities of both the Chesapeake Bay Foundation and Maryland League of Conservation Voters.

As originally introduced, the legislation would have created a new definition under the FCA of “priority retention area” that would have included contiguous growth forests and other forested areas. These retention areas would be prohibited from being disturbed unless an applicant has provided a set of written justifications that is affirmatively approved by the State (if the project is occurring on State-owned lands) or a local authority (if the project is within a local jurisdiction). The justifications must include: (1) an explanation of the reasons that the development cannot be altered to preserve the priority retention area; (2) a description of the alternatives that were considered, including applications for local variances that would facilitate forest conservation but not affect public safety, and that no other alternatives exist; and (3) a description of the forest conservation best practices or techniques that were considered and rejected and the reasons for any rejections.

A State or local authority may not approve a written justification based: (1) solely on cost; (2) on a preference to maintain a preferred site design; (3) a desire to obtain maximum zoning density or intensity; or (4) a desire to conduct mass grading or clearing of the development site. If the justifications were approved, the project developer must mitigate by replanting trees at a 1:1 ratio. The bill also contained language regarding when a forest conservation plan must be reviewed, when the Department of Natural Resources must update its Forest Conservation Act Technical Manual, and how a local government may use fee-in-lieu monies.

MACo supported the legislation with amendments, noting that while the technical manual update, fee-in-lieu provisions, and forest conservation plan reviewing timing were reasonable changes, there were significant issues with the priority retention definition, written justifications, and 1:1 replanting ratio proposed by the bill. MACo expressed concern that the bill would disrupt long-term planned development with priority funding areas and locally designated growth areas and greatly increase both the cost and difficulty of completing Smart Growth-friendly projects.

MACo also questioned the conflicting forest coverage and loss data that were being raised by the bill’s proponents and opponents and argued that establishing a data baseline was crucial before making broad changes to the FCA. The Maryland Municipal League also supported the bill with similar amendments. Opponents to the bill included NAIOP-MD (representing commercial builders) and the Maryland Building Industry Association.

While the House did not take any action on HB 766 after its February 21st bill hearing, the Senate passed a greatly amended version of SB 610 that struck the entire bill and replaced it with a “Task Force on the Forest Conservation Act Offset Policy.” MACo opposed the Task Force version of SB 610, noting that the Task Force membership was unbalanced, that its charge appeared to generate pre-determined outcomes, and that the House had already considered and rejected a very similar Task Force last year (see SB 365 of 2017).

Based on its actions last year, MACo does not believe the House will support the Task Force language found in SB 610. However, the House is considering whether to create a technical data study of both forest and tree canopy coverage in Maryland and programmatic review of state and local FCA programs. Consistent with MACo’prior statements, MACo could support such a study as long as the study considers all of the state’s tree replanting and forest programs and does not narrowly focus on outcomes solely under the FCA.

Useful Links

HB 766 of 2018

MACo Testimony on HB 766

SB 610 of 2018

MACo Testimony on SB 610

SB 365 of 2017

Baltimore City Tests the (Storm)waters With Environmental Impact Bonds

Bay Journal article (2018-03-28) reported that Baltimore City plans to issue up to $6.2 million in environmental impact bonds for “green infrastructure” stormwater projects. The bond deal was created with the assistance of the Chesapeake Bay Foundation. The article noted that the bond issuance is expected to help pay for green stormwater projects, such as vegetated swales, rain gardens, and reducing impervious surfaces, in more than three dozen neighborhoods. The article stated that Quantified Ventures will help the City manage the issuance. The City considered the issuance after DC Water, the District of Columbia’s water and sewer authority, conducted a $25 million bond issuance in 2016.

Interest in environmental impact bonds is growing throughout the United States. As with conventional bonds, the bond issuer makes regular interest payments to the bond investor and pays the investor the full face amount of the bond at the bond’s maturity date. However, the interest payments for environmental impact bond are contingent on the success of the project that the bond is funding. If the project meets expectations, the investor receives the baseline interest rate specified for the bond. If the project performs more poorly, the interest payments are reduced or eliminated. If the project exceeds the expected performance, the investor receives an additional premium over the baseline interest rate.

 

From the article:

“Baltimore can and, we predict, will be a model for innovation in pollution reduction,” declared Bay Foundation President Will Baker at a news conference announcing the deal in West Baltimore by the site of one of the planned projects. “It’s a partnership with nature to save dollars and reduce pollution.” …

Rudy Chow, the city’s public works director, said officials were looking to diversify the city’s borrowing as it attempts to curtail polluted runoff at the source. Baltimore is required by federal and state regulators to reduce and treat polluted runoff from more than 4,000 acres of pavement and buildings across the city by 2019. …

“We really think that we’re starting a movement here in the watershed and across the country,’’ said Carolyn duPont, director of Quantified Ventures. “We believe that environmental impact bonds will be a key part of public finance in the future. Budgets are always squeezed for cities, and there’s also an ever-growing group of impact investors who are really excited to put their money and capital to work into projects like these that have both a financial return as well as environmental and social benefits.”

Useful Links

Chesapeake Bay Foundation Website

Quantifed Ventures Website

Prior Conduit Street Coverage of Environmental Impact Bonds