Cost Benefit Assessment, 2006 Water Quality
Report to Congress

The Clean Water Act requires states to report to Congress on the social costs and benefits of actions necessary to achieve the objectives of the Clean Water Act. WDNR believes that while cost benefit assessments can inform the decision making process, this type of analysis should not override the goals of environmental or ecosystem health as a single dominant decision point.

The complex and multi-jurisdictional nature of environmental protection and water quality regulation and restoration precludes a precise analysis of fiscal outlays in the context of this biannual report. In addition, rapid change in our understanding of the complexity of environmental systems - for example - as well as evolving knowledge of precise endpoints for environmental damage exerted by a single contaminant further complicate our ability to assess potential benefits of specific actions or regulations. Thus, this section of the report assessment is limited to a brief discussion of some of the major financial outlays related to water quality, including the Environmental Improvement Fund (with special emphasis on the Clean Water Fund and the Safe Drinking Water Program), the state's Stewardship Program (Land Aquisitions and Easements) and the state's Polluted Runoff Management Program.

Environmental Improvement Fund

Wisconsin's Environmental Improvement Fund (EIF) consists of three separate financial assistance programs: the Clean Water Fund Program for wastewater treatment and urban runoff projects, the Safe Drinking Water Loan Program for drinking water projects, and the Land Recycling Loan Program for brownfields projects. The EIF directs limited financial resources to projects with the highest environmental priority score.

The EIF is an excellent tool for Wisconsin in meeting its responsibilities under the 1987 Clean Water Act. EIF programs provide financial assistance to local units of government in the form of subsidized loans and, in some cases, grants or interest subsidy payments.

Clean Water Fund Program

The Clean Water Fund Program (CWFP) is Wisconsin's revolving loan program. The CWFP uses funding from the capitalization grant authorized by the Clean Water Act and supplemental funding from state borrowing to help achieve state water quality goals and the objectives under the Clean Water Act.

Repayments of principal and interest from CWFP loans will make up the primary source of funding for future EIF programs. The programs are administered jointly by WDNR and the Department of Administration. The CWFP provides financial assistance to municipalities for planning, design and construction of surface water and groundwater pollution abatement facilities. Over the yearsm an increased emphasis has been placed on preventive maintenance for existing pollution abatement facilities. Financial assistance is administered by the CWFP through: 1) a federal revolving loan program, 2) a state leveraged loan program, 3) a state direct loan and hardship program, 4) a federal hardship program, and 5) a small loan program. The state programs are a commitment made by the Legislature to exceed the federal funding for surface water pollution abatement. From 1991 through 2003, the CWFP entered into 532 financial assistance agreements with Wisconsin municipalities totaling $1.88 billion in loans and $115 million in financial hardship assistance grants. In addition, the CWFP has executed agreements with 48 municipalities to subsidize interest payments on wastewater treatment project loans made to the municipalities by a state program other than the CWFP. The amount of financial assistance provided for individual CWFP projects ranges from $25,000 to over $134 million. The Milwaukee Metropolitan Sewerage District, which is comprised of 28 individual municipalities serving a population of about 1.2 million, has received 49 CWFP loans totaling over $566 million. This amount represents 30% of the CWFP's total loan dollar volume since the program began in 1991.

The CWFP provides financial assistance for the following types of projects:

Compliance maintenance projects - These wastewater projects are necessary to prevent a municipality from exceeding effluent limitations contained in their Wisconsin Pollution Discharge Elimination System (WPDES) permit.
New or changed limits projects - These wastewater projects are necessary for a municipality to meet effluent limitations contained in its WPDES permit which were newly established or modified after May 17, 1988.
Unsewered projects - These wastewater projects provide treatment facilities and sewers for unsewered or partially unsewered municipalities.
Urban runoff projects - These stormwater/nonpoint source projects are necessary to meet WPDES permit requirements, meet non-agricultural performance standards, or control urban stormwater problems under WDNR-approved plans.

The CWFP may provide financial assistance to municipalities in the following ways: provide loans at or below market interest rates, provide grants under a state or federal hardship assistance program, purchase or refinance the debt obligations of municipalities incurred for CWFP-eligible water pollution control projects, and make subsidy payments to municipalities to reduce interest on loans made by the Board of Commissioners of Public Lands for CWFP-eligible projects.

Each project is prioritized using a system established by Wisconsin Administrative Code. The environmental criteria used to select projects include: impacts to human health, maintenance of fish and aquatic life, maintenance of wildlife, impacts to outstanding and exceptional resource waters, the ability to treat septage and leachate, and the population served by the project. The priority system assigns a score to every project based on the criteria. Projects are ranked numerically, so in the event funding is not available for all requested projects in a given year, awards will be made by the order in which they are ranked. Funding each biennium has been sufficient to fund all eligible CWFP projects, except for those projects requested under the financial hardship assistance program.

Safe Drinking Water Loan Program

The Safe Drinking Water Loan Program (SDWLP) was enacted in 1997 to provide financial assistance to municipalities for the planning, design, construction or modification of public water systems. To be eligible for SDWLP funding, projects must comply with national primary drinking water regulations under the Federal Safe Drinking Water Act or otherwise significantly further the health protection objectives of the Act. The SDWLP began providing assistance in 1998. From the beginning of the program through 2003, the SDWLP has provided 31 loans to local units of government totaling $99.4 million.

Land Acquisitions and Easements

WDNR Bureaus of Facilities and Lands and Community Financial Assistance manage the Stewardship Program, which provides funding for a variety of fee simple and easement acquisitions that protect natural resources and increase public recreational opportunities. Typical projects include preserving green space and incorporating proper land management practices; expansion of wildlife management areas, fisheries areas, natural areas, and state parks; recreational development projects; and habitat restoration areas. Where possible, the WDNR looks for opportunities to blend funds from the Stewardship Program with funds from other federal programs such as the Land and Water Conservation fund (LAWCON).

This funding, $46 million dollars a year through the year 2010, is to provide for both land acquisition and property development. Portions are to be used by non-profit conservation organizations and local governments, both for acquisition and property development purposes. Examples of projects funded by Stewardship in the past several years include establishment of the Peshtigo River State Forest, Capitol Springs State Park, and the Lower Chippewa River State Natural Area. In addition, substantial expansions to several water-based properties have occurred including the Turtle Flambeau Scenic Waters Area and Tomahawk River State Natural Area. WDNR looks for opportunities to partner with other organizations or to cost-share project costs with federal dollars available for acquisition of lands protecting wildlife, fishery or water quality.

Two of the five acquisition priorities for Stewardship funding are lands that preserve or enhance the state's water resources. This includes land along the Lower Wisconsin State Riverway; land abutting wild rivers and wild lakes, and land along the shores of the Great Lakes. In addition, the Stewardship program focuses on efforts to protect water quality and fishery habitat by acquiring buffer areas along streams. This program provides funding for WDNR projects and provides cost sharing to municipalities and nonprofit organizations. Since 1990, approximately $10 million has been spent on WDNR streambank projects, and about $4.5 million in grants have been provided to municipalities and nonprofit organizations for 45 projects. The WDNR has targeted 146 stream corridors with a goal of 21,075 acres or 1,317 miles for easements and 19 stream corridors totalling approximately 30,334 acres or 130 miles for acquisitions.

In addition to the Stewardship Program, the Nonpoint Source Pollution Abatement Program provides funding for WDNR easements to reduce polluted runoff. This program has funded approximately $3.3 million for purchase of 61 easements totaling 1,400 acres. Management of properties owned by the WDNR is outlined in master plans for each property. These plans cover maintenance, management, and development that will occur on the property for at least 15 years. Contained in the plans are recommendations for a variety of land management and recreational activities, especially for those properties that include large water features that are aimed at protecting water quality and scenic natural features. Master plans for properties such as the Lower Wisconsin Riverway, Brule River State Forest, Turtle-Flambeau Flowage Scenic Waters Area, Chippewa Flowage, and Dells of the Wisconsin River State Natural Area contain provisions for protection of water quality and scenic beauty. Polluted Runoff Management Program

Priority Watershed/Lake Program

Expenditures for polluted runoff including pass through funding to communities via the Priority Watershed/Lake Program, open competition grants through the Targeted Runoff Management (TRM) Grant Program, and Urban Nonpoint Source and Storm Water Grant Program. Financing compliance with performance standards (described above under "polluted runoff"), has a total estimated annualized cost of $92 million. The estimated portion for state government is $22 million (24%), for local government is $46 million (50%) and for private landowners and operators is $24 million (26%). The majority of the local government and private sector costs are associated with meeting the non-agricultural performance standards. Sources of government funds include state bonding, segregated and general purpose revenue sources for cost-sharing and local staff, the state clean water revolving loan fund, federal programs, including EQIP, CRP, CREP and section 319, and local funding sources, including county cost-share programs and storm water utilities. These funds are needed to meet standards across the state, including the 120 waters listed as impaired on the federal section 303(d) list.

Last Revised: 2006