How to Pay By EPA

Agency program helps communities figure it out

• By L. K. Williams
• Sep 11, 2007

DO you know about rate setting or cost recovery? What about that hot topic asset management? For water/wastewater utilities and the communities that support them, the money is critical but knowing how to manage that money may be more sustaining in the long run.

That's the idea behind the U.S. Environmental Protection Agency's Environmental Finance Program, which is supported by an advisory board and a network of nine university- based centers (Environmental Finance Centers or EFCs). The EFCs provide training and other services to state and local governments and small businesses. The program is funded by EPA and other public and private money.

Lyons Gray, chief financial officer for EPA, explains in the program's 2005-2006 progress report that "the services are based on the premise that communities want to comply with environmental regulations but often do not know how to pay for them. Many communities, particularly small ones, lack in-house financial expertise. The finance centers help fill this knowledge gap—they know that finance is a critical component of sustainable environmental protection."

 The centers correspond to different EPA regions. They are, in order of establishment,
• University of New Mexico (Region 6),
• University of Maryland (Region 3),
• Syracuse University (Region 2),
• California State University at Hayward (Region 9),
• Cleveland State University Great Lakes EFC (Region 5),
• Boise State University (Region 10),
• University of North Carolina at Chapel Hill (Region 4),
• University of Louisville Center for Environmental Policy & Management (Region 4), and
• University of Southern Maine (Region 1).

It is important to note that not all of the centers deal with water concerns: The University of Louisville, for example, does not. However, the center in your EPA region can direct you to the appropriate university. It also is important to know that the centers do not provide any funding.

Information campaign prevails
Sara Peseke, associate director of the Syracuse University EFC, shared the following information  about outreach work done with Windsor,  N.Y., a town of about 6,000 people.

In 1999, the Broome County Health Department determined that 41 percent of Windsor's septic systems were failing. Wastewater was seeping above the ground surface, causing odor problems and potential health hazards.  The department recommended the town  invest in a public sewer system. Town efforts to pass a resolution on the matter failed twice.

In 2003, the town supervisor suggested contacting EFC; he had attended one of their workshops.  Center staff helped with public education, community empowerment, process facilitation, and convened a group of technical assistance providers to work collaboratively. The group included the U.S. Department of Agriculture Rural Development, Rural Community Assistance Partnership Solutions, N.Y. Rural Water Association, and the Environmental Facilities Corp.

The group held a series of public information, focus group, and public education meetings during 2004 and 2005. By explaining, with the appropriate amount of detail, the wastewater process, placing the cost in perspective, and describing the breakdown of every dollar contributed to the project, residents began to understand the underlying cost components of a wastewater system. At the next resolution vote for the public sewer project, the community passed the measure.

Pilot program targets officials
Jean Holloway, a training manager at the University of Maryland EFC in College Park, has been working with small communities for about 8 years now. A former town manager, she can relate to the issues many class participants face. While training, Holloway said, she always tries to keep in mind "what's ideal and what's doable."

Town managers, council members, people  from private utilities, and operators seeking continuing  education units come to some of her  half-day classes that cover, among other things,  rate setting, cost recovery, and asset management. 

So far Maryland's EFC training has been free to the community, but Holloway said that budget issues were starting to change that. "If a class is requested, we are starting to charge, but it is still not what it costs to put the program together." 

She will be looking for additional funding if a pilot training program that begins this month gets approval for national application.  Holloway explained that the EFCs are trying to develop a certificate program for managers, elected officials, and other nontechnical people. "I'm really excited," she said.

In the pilot, Holloway will teach at three locations in Maryland and three in Virginia.  The first confirmed class was set for Sept. 17 at the Northern Virginia Community College (Annandale campus) at press time. With the working title of "The Sustainable Infrastructure Academy," the pilot will include budgeting, rate setting, and cost recovery.

Holloway said two of the most important things that officials need to know are that:

1) It is important to let technical personnel have input on the financial end because they know the costs of manpower, electricity, and chemicals they need to stay in compliance. Arbitrary cuts to the budget can put a utility out of compliance.

2) Elected officials need to be aware of how much liability they have for running a utility system. Operators may go to jail, but officials also may have some personal liability, such as negligence.

The EFCs also advise the Environmental Finance Advisory Board about what works and what does not work from in-the-field experience, according to the program report. The board then combines the real-life scenarios with its experience and provides advice to EPA.

Check it out for yourself: www.epa.gov/efinpage.   

This article originally appeared in the 09/01/2007 issue of Environmental Protection.