DEPARTMENT OF ENVIRONMENTAL PROTECTION

 

REVISED AND UPDATED FINAL RECOMMENDATIONS OF THE OPERATION, MAINTENANCE AND REPLACEMENT WORKGROUP

 

November 5, 2003

 

 

A document entitled "Final Recommendations of the Operation, Maintenance and Replacement Workgroup", dated November 15, 2001, was presented to Executive Staff in the fall of 2001.  As a result of the recommendations of this workgroup, several changes were implemented within the Growing Greener grant program.  The changes included: providing a separate funding category for O, M & R projects, requiring an O, M & R plan as a deliverable of all funded construction projects, providing discussion of the need for an O, M & R plan in the application package, revising score sheets to reflect the ability of the applicant to provide for O, M & R, and providing O, M & R training at grantee training.  However, several loose ends remained, dealing primarily with a dedicated funding source for O, M & R.

 

In July 2003, new DEP Secretary Kathleen McGinty met with representatives of the workgroup and expressed her interest in establishing a permanent, dedicated funding source for O, M & R.  At her request, the workgroup re-convened in order to evaluate and, if necessary, revise and update our previous recommendations, particularly with regard to funding amounts.  Two new members were added, including one from academia, to provide a fresh look at our data and analysis.  The following is the result of this effort and provides an update to the November 15 document.

 

O, M & R Plan

 

Experience has shown these plans to be very useful in defining tasks and establishing responsibility for the various O, M & R needs of watershed restoration sites.  A Technical Assistance Grant is in place to assist watershed groups in the development of these plans for mining-related projects.  No changes are recommended from the initial document.

 

Long-term Cost Analysis

 

In the previous document, the group recommended use of an O, M & R factor, which was the percentage of the total construction costs needed to fully provide for O, M & R on an annual basis.  While the amount needed would fluctuate considerably from year to year, the O, M & R factor averaged those costs out over the life of the project (defined as being the projected design life of the project plus one replacement).  The group previously developed an average O, M & R factor of 4% for all watershed restoration projects.  Data collected from projects over the ensuing 2 years has supported this number, as has data provided by the 2 new members.  Therefore, the group recommends staying with the 4% factor.

 

The group previously recommended that the Department consider funding half of the full amount needed, with watershed groups using volunteers and local partners to provide the other half.  The group now believes that this is probably unrealistic for the majority of the watershed groups doing this work, for a number of reasons.  First, the 50% local match assumed the implementation of another recommendation that never occurred due to budget concerns.  The group previously recommended that the DEP's Bureau of Abandoned Mine Reclamation (BAMR) increase the size of their in-house construction staff to assist local groups with maintenance needs on abandoned mine drainage (AMD) passive treatment projects.  That staff increase has not materialized and BAMR has had difficulty keeping up with maintenance needs on its own projects.  They have not been able to assist watershed groups in this area.  Also, the lab analysis cost issue has proven to be a difficult one to solve and one that continues to cause problems for watershed groups.  The options currently available to groups include use of a DEP collector number through partnership efforts with staff from Mineral Resources Management and Water Management, use of a Growing Greener grant to fund analysis, or partnership with a local lab that may provide analyses at reduced or no cost.  These options are not currently fully covering the need in this area, often leaving watershed groups with inadequate funds and a resulting inability to properly monitor projects.

 

The group has developed two recommendations to address the issues discussed above.  The first is an increase in Department-provided funding from 50% of the O, M & R need to 65% of the need (to cover replacement costs at 40% of the total need, lab costs at 10% of the total need and half of the maintenance costs at 30% of the total need).  This would leave local groups and their partners to cover operational and monitoring costs (20% of the total need) and half the maintenance costs (half of 30%), or 35%.  In addition, the group recommends one other option to address the lab need issue.  The recommendation is to provide funds for lab analysis of AMD passive treatment facilities, where the greatest monitoring need is, by providing some of the needed funds to the Eastern and Western PA Coalitions for Abandoned Mine Drainage (EPCAMR and WPCAMR).  The simplest mechanism to accomplish this would be to encourage these two groups to submit a Growing Greener application for funds that could be disbursed to watershed groups who submit a request and meet certain criteria that would need to be developed.  Preliminary discussions have been held with the two groups and both are interested.  This would give watershed groups 3 options to pay for lab analyses: through a DEP provided collector number, through an individual O & M grant, or through a request to EPCAMR/WPCAMR.  All of these 3 options could be funded from the dedicated O, M & R fund.

 

Implementation (Funding Engine)

 

The workgroup's November 2001 recommendations included 2 possible funding options.  The first, called "pay as you go", proposed earmarking up to 10% of Growing Greener funds to O, M & R projects.  The amount not needed for these projects would, at some point, be released for new project funding.  The second option, called "set aside" proposed an annual budget appropriation from the legislature into a non-lapsing fund that would be allowed to accumulate funds for long-term needs.

 

Discussions that have taken place with DEP Secretary McGinty in the intervening time have helped to refine the two options and combined them into somewhat of a hybrid.  Funds could be provided by Growing Greener (likely from the amount currently used for the water and sewer set aside), but would go into a non-lapsing fund to allow a build-up of funds to address long-term needs.  Other options for a funding source should also be considered, since recommended appropriations to the fund would take a significant portion of expected Growing Greener funds.  This non-lapsing fund would require legislation to be established.  The annual funding amount needed will be recommended by this workgroup (see Attachment A), but will be at the Secretary's discretion.  If the fund is accumulating more quickly than is deemed necessary, the Secretary would have the option of reducing the annual appropriation to the fund.

 

The workgroup took a step beyond the 2001 recommendations and attempted to determine future-funding needs based on expected construction expenditures through 2012 (the final year for Growing Greener under the current legislation).  Since the O, M & R factor is based on construction amounts, a funding projection was necessary in order to estimate the amount needed to be deposited in future years.  Attachment A lists the funding sources and their funding amounts, the total amount being spent on watershed restoration projects, the total cumulative amount and the expected amount that will be needed to deposit into the fund on an annual basis through 2012.  This amount is based on the premise that the Department will need to provide funding for 65% of the total O, M & R needs, including lab costs, with the local groups and their partners providing the other 35%.

 

It's important to note that the recommended funding amounts are conservative.  There are a number of factors that may reduce the actual amount needed from the fund.  They include: the possibility that resource recovery technology will continue to develop and will eventually cover a portion of O, M & R costs; the likelihood that future project funding will be directed toward watershed groups who demonstrate the ability to provide a larger portion of the needed O, M & R in their watershed (the Growing Greener project scoring process takes this into consideration by providing additional points when a group is willing to take on greater O, M & R responsibility); and the gradual amelioration of mine drainage over time that can be improved by certain mitigation and reclamation techniques.  On the other hand, as passive treatment technologies have become more sophisticated, more severe water quality problems are being addressed with systems that require more intensive operation and maintenance.  The extent to which these factors will offset each other is unknown, resulting in a need for conservative projections.

 

The workgroup moved on to address the issue of access to the non-lapsing fund.  The workgroup is in favor of the establishment of a "quick response" contracting procedure, which was previously presented to and approved by Secretary McGinty (previously called the "emergency repair contract").  This procedure will provide funds in an expedited manner for repair of watershed restoration projects where the problem needs to be addressed immediately to prevent environmental damage to the watershed or costly damage to the project.  The group recommends funding this contract out of the non-lapsing fund.  The establishment and administration of the quick response contract is being developed by a separate, internal DEP committee.  The workgroup discussed at some length the need for a continuously open grant process versus a once per year grant round that would coincide with the current Growing Greener process.  The group decided that, since there would be an quick response contract in place to handle situations that arise unexpectedly, a once per year grant round would adequately address the needs of watershed groups.  The administration of this option would be much easier for the Grant Center than a continuously open grant process, since the grant round timing would coincide with the regular Growing Greener grant round.

 

It was the consensus of the workgroup, however, that the process of applying for O, M & R funds should not be in competition with new project applications, but should be a separate, competitive process.  Funds would be taken from the non-lapsing O, M & R fund rather than the annual grant.  The workgroup recommends that certain minimum criteria be developed, which applicants must meet, and that the O, M & R applications then be ranked against each other, since there may not always be enough funds available to cover all applications meeting the criteria.  The fund should be used for lab analyses, higher cost maintenance items and replacement only.  The fund should not be used for routine operation and monitoring or low-cost maintenance items.  Recommended criteria to be evaluated include: importance of the project to the watershed, whether the existing project is receiving adequate operation and maintenance by a local group, the viability of the local group, and the reasonableness of the costs and technology being proposed.

 

Other Issues of Concern

 

The group identified two other issues that need addressed.  One is the need for a statewide database to track all watershed implementation projects.  There is a particular concern with regard to AMD treatment projects to be able to track projects and monitor their effectiveness.  Two entities have come forward and offered to develop and maintain such a database that would include web-based GIS capabilities.  One is WPCAMR/EPCAMR, as an extension of their lab analysis function.  The other is the Federal Office of Surface Mining (OSM), using the capabilities of GIS staff in their Pittsburgh Technical Office.  The group's recommendation is to pursue this with OSM, for two reasons.  They are not asking for funds from the Department to accomplish this, as WPCAMR/EPCAMR would need, although OSM will need assistance from some Department staff in order to build the database.  Also, OSM has staff with GIS knowledge, while WPCAMR/EPCAMR would need to contract out this work.  For non-AMD projects, the current project tracking being done by the Regional Offices appears to be adequate. 

 

The other area of concern identified is the need for improved technology transfer among those involved in watershed restoration work.  This is a continuously evolving technology, with an ongoing learning process.  WPCAMR/EPCAMR has taken the lead in addressing this with respect to AMD by adding two days to the annual AMD watershed conference in June, with an emphasis on technology transfer during those two days.  This conference, funded in part by the Department, should address the concern with regard to AMD.  Should this conference be successful in addressing this concern, the group recommends that this format continue on a long-term basis.

 

 

 

Conclusions

 

The need to address O, M & R of watershed restoration projects has become increasingly more apparent as more systems, and more sophisticated systems, are constructed.  An analogy to consider is the construction of other types of infrastructure (highways, sewer and water lines, sewage treatment plants) that use Commonwealth and Federal funds.  All these facilities have long-term operation, maintenance and replacement concerns that must be addressed and funded.  Fortunately, the cost is somewhat less for watershed restoration systems in that most systems being constructed are "passive" and volunteer groups are willing to shoulder some of the need.  However, while it's difficult to pinpoint exact funding amounts needed for these systems, the costs are significant and will adversely impact the amount of Growing Greener funds available for new construction if all funds come from this funding source.  Finding appropriate funding sources and determining appropriate amounts to set aside will be a challenge to the Department.

 

Department actions needed to implement the final portions of the O, M & R workgroup recommendations include the following:

 

 

The O, M & R workgroup remains dedicated and willing to assist in final implementation of these recommendations.

 

 

 

 

 

 

ATTACHMENT A

 

 

 

NRCS

319

BAMR

WRPA

OSM

G2

ACOE

Totals*

Cum. Total

Fund Amt.**

1988

$125,000

$0

$0

$0

$0

$0

$0

$125,000

$125,000

-

1989

$150,000

$0

$0

$0

$0

$0

$0

$150,000

$275,000

-

1990

$0

$75,000

$0

$0

$0

$0

$0

$75,000

$350,000

-

1991

$75,000

$200,000

$0

$0

$0

$0

$0

$275,000

$625,000

-

1992

$12,000

$225,000

$0

$0

$0

$0

$0

$237,000

$862,000

-

1993

$0

$400,000

$0

$0

$0

$0

$0

$400,000

$1,262,000

-

1994

$0

$675,000

$0

$0

$0

$0

$0

$675,000

$1,937,000

-

1995

$152,066

$850,000

$0

$0

$0

$0

$0

$1,002,066

$2,939,066

-

1996

$0

$1,000,000

$0

$0

$0

$0

$0

$1,000,000

$3,939,066

-

1997

$183,959

$275,000

$1,498,036

$0

$0

$0

$0

$1,961,585

$5,900,651

-

1998

$34,314

$1,700,000

$1,645,922

$0

$0

$0

$0

$3,399,051

$9,299,702

-

1999

$274,454

$3,400,000

$2,820,839

$688,458

$262,240

$25,904,601

$0

$32,445,193

$41,744,895

-

2000

$109,284

$2,700,000

$378,902

$296,558

$567,800

$22,796,533

$0

$26,849,077

$68,593,972

-

2001

$200,000

$3,700,000

$2,726,957

$0

$321,400

$25,074,405

$0

$32,022,762

$100,616,734

-

2002

$683,000

$4,000,000

$392,234

$0

$925,721

$21,115,282

$2,390,000

$29,506,237

$130,122,971

-

2003

$885,000

$4,000,000

$1,890,000

$0

$919,747

$14,119,308

$4,400,000

$26,214,055

$156,337,026

-

2004

$1,597,000

$4,000,000

$3,400,000

$0

$750,000

$15,000,000

$4,000,000

$28,747,000

$185,084,026

$4,812,186

2005

$1,275,000

$4,000,000

$2,000,000

$0

$750,000

$15,000,000

$4,000,000

$27,025,000

$212,109,026

$5,514,835

2006

$485,000

$4,000,000

$2,000,000

$0

$750,000

$17,000,000

$3,000,000

$27,245,000

$239,354,026

$6,223,205

2007

$455,000

$4,000,000

$2,000,000

$0

$750,000

$20,000,000

$3,000,000

$30,205,000

$269,559,026

$7,008,535

2008

$589,000

$4,000,000

$2,000,000

$0

$750,000

$21,000,000

$3,000,000

$31,339,000

$300,898,026

$7,823,349

2009

$336,000

$4,000,000

$2,000,000

$0

$750,000

$21,000,000

$3,000,000

$31,086,000

$331,984,026

$8,631,585

2010

$300,000

$4,000,000

$2,000,000

$0

$750,000

$22,000,000

$3,000,000

$32,050,000

$364,034,026

$9,464,885

2011

$300,000

$4,000,000

$2,000,000

$0

$750,000

$23,000,000

$3,000,000

$33,050,000

$397,084,026

$10,324,185

2012

$300,000

$4,000,000

$2,000,000

$0

$750,000

$25,000,000

$3,000,000

$35,050,000

$430,134,026

$11,183,485

* - Actual expenditures through 2002, projected expenditures starting with 2003

** - Cumulative total multiplied by 4% Annual OMR factor, multiplied by 65% DEP funding