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iStockphot.com/Mdwarren

“I was just driving down the road,” says the energetic Gail Blazer, when asked how she got the idea for a new public-private cost-share program to upgrade stormwater treatment in Ocean City, MD . To be exact, she was driving down Coastal Highway, the city’s main thoroughfare, thinking about the flooding that overtops this artery through the island and the dirty runoff that carries pollutants to Ocean City’s delicate receiving estuarine ecosystems. Both the flooding and water-quality problems result from development that was built before stringent stormwater regulations.

Blazer, the city’s environmental engineer, is about to cut a $2,000 check for a recently constructed infiltration trench that will reduce flooding and remove pollutants at a condominium development. The project is the first, completed under the new Stormwater Management Retrofit Cost Share program. Ocean City’s cost-share program and a second program, at the St. Johns River Watershed Management District in Florida, are the focus of this article.

Cost-Share Programs
Cost-share programs are a long-standing strategy used by various levels of government and by other organizations to incentivize behaviors that might not (or could not) otherwise occur. Although such programs take many forms, a typical structure might be as follows: One organization wishes to encourage a particular type of project or practice and has a pool of money to dedicate toward this goal. The organization will solicit proposals from other organizations for projects that meet its goals and criteria. One criterion for project selection will always be that the applicants are providing a percentage of the funds for the project. Some projects will be selected for funding and the organizations will enter into a contractual agreement. The cost of the project is thus split or shared between or among the organizations.

There can be some variations on this arrangement. The funding organization could be a federal agency, a state or local government, or a nonprofit organization. The pool of money for projects could be large or small, and the source could be taxes, fees, a foundation, a pollution-offset fund, or other sources. Proposals might be requested on a regular basis, such as once a year, or on a rolling basis. The percentage of cost borne by each organization also would vary by program.

One study on cost-sharing programs asserts, “The sharing of costs for public investments between the federal government and state or local groups has been a common practice in the United States since it was founded nearly two centuries ago” (Miller 1974). An example of a cost-sharing program that goes back more than 50 years is the Great Plains Conservation Program (GPCP), which was administered by the Soil Conservation Service—now the Natural Resources Conservation Service (NRCS)—beginning in 1956. The program is now subsumed under other NRCS cost-sharing programs (some of which address a variety of stormwater-related problems). The GPCP “provided for the government’s sharing the cost of conservation measures with farmers and ranchers under a contract” (Helms 1981). Another cost-share program, which is focused on stormwater quality, is the 22-year-old Maryland Department of the Environment Stormwater Pollution Control Program. Up to 75% cost share is provided for “stormwater management retrofit and conversion projects in urban areas developed prior to 1984. These projects reduce nutrients, sediments and other pollutants entering the State’s waterways through the use of infiltration basins, infiltration trenches, vegetated swales, extended detention ponds, bioretention basins, wetlands and other innovative structures” (MDE 2008).

In particular, cost-share programs are often used to achieve ends that are not incentivized by the market, such as environmental preservation or restoration. Blazer of Ocean City wondered how she might raise interest in retrofitting existing developments. She finds that there is growing interest in these projects as a result of the nascent cost-share program.

One benefit of cost-share programs is that they can be quite flexible in the variety of activities they fund. Cost-share programs may fund planning, projects, research, innovative technologies, proven technologies, and so on. Our historic example, the GPCP, funded activities as varied as “establishing vegetation on lands previously cropped and for reseeding range. Irrigation for pasture and forage, fencing, and development of water supplies supported the shift to rangeland and were designed to prevent overgrazing. Conservation measures for cropland included contour stripcropping, terracing, grassed waterways, land leveling, reorganizing irrigation systems, and windbreaks” (Helms 1981).

Photo: St. Johns River Watershed Management District

A stormwater park, which combines stormwater treatment with passive recreation

Aside from their flexibility, cost-sharing programs are attractive because of how simply they provide an incentive. “Cost-share programs encourage adoption of … programs by reducing the cost of implementation” (Rausch 1998). “Cost sharing can leverage stormwater agency funding with federal, state, local, and private match to broaden the extent and reach of potential … programs” (CNT 2007).

Water Quality Upgrades: Ocean City’s Program
Ocean City, MD, is 2.5 square miles in area but 10 miles long. Built on a barrier island, it is part of a diverse and “impressive coastal resource,” the coastal bays area. Tourists flock to the area to enjoy its natural beauty and recreational opportunities—nearly 3 million people a year. The year-round population is only about 7,000 people. The area’s natural resources are threatened, though, by intensive development and other problems that have degraded water quality and habitat, the very features that fuel Ocean City’s main industry, tourism. “Keeping the water clean, the beaches clean, is really important,” Blazer reiterates.

The city is a partner in the Coastal Bays Program, along with the town of Berlin, the National Park Service, Worcester County, the USEPA, and the Maryland Departments of Natural Resources, Agriculture, Environment, and Planning. The Coastal Bays Program is one of just 28 national estuary programs in the US, and its mission is to protect the land and waters of the Assawoman, Isle of Wight, Sinepuxent, Newport, and Chincoteague bays.

The retrofit cost-share program helps Ocean City to fulfill a larger goal of reducing pollution from existing development as required by the Maryland Coastal Bays 2000 Comprehensive Conservation Management Plan (CCMP). Blazer notes that the city participated in developing the CCMP, the first management plan for the coastal bays. The CCMP covers action plans to meet water-quality, fish and wildlife, recreation and navigation, and community and economic development goals.

One water-quality “challenge” listed in the CCMP is the “decrease nutrient inputs from runoff.” Some solutions to meet this goal are ensuring that the new stormwater management devices address water quality and quantity, taking into consideration the cumulative impact of runoff from many small properties, and building of new or retrofit stormwater management devices in existing developments. Retrofits are needed because stormwater management measures did not apply to some projects, such as multifamily and commercial buildings, built before 1985 (Blazer 2008). Blazer thinks a lot about how to implement these solutions and the other goals in the CCMP. She has implemented two mini-grant programs in addition to the cost-share program. Her supervisor and the city council allow her to be creative and to implement the ideas that come to her when she’s driving down the road.

This year, as a pilot effort, $10,000 from the city’s stormwater and Critical Area Mitigation funds will be used to for “five projects up to $2,000 each or combination of a number of projects to equal $10,000” (Blazer 2008). The mitigation funds are paid into by new developments and are used to pay for buffer and stormwater treatment projects.

The first project completed under Ocean City’s program was originally proposed as a trench drain. When the project came to the city for approval, Blazer realized that with some simple modifications, the structure could do more than just drain a parking lot. She suggested that the trench be designed with a perforated underdrain wrapped in filter fabric. Ocean City is fortunate to have freely infiltrating soil (sand). The thirsty sand underneath the trench will soak up runoff, providing water-quality treatment in the process. Blazer says excitedly of the completed project, “I’m going to do a ribbon-cutting and a big check and all that.”

Blazer already has another project in the pipeline and anticipates many more in the future. She will publicize the project through some of the talks that she gives to the various organizations in the city. “I can plant the seed in their head and tell them ‘if you are going to do something, I’ll help you with that,’” she says.

St. Johns River Watershed Management District
The St. Johns River Watershed Management District is one of five regional districts in Florida that is charged with “balancing people’s needs for water with nature’s needs.” A state agency with ad valorem taxing authority, the district manages groundwater and surface water supplies in all or part of 18 counties in northeast and east-central Florida.

“We have a variety of programs related to stewardship of natural water resources in this part of the state,” David Watt explains, by way of introducing the organization. Watt, the assistant director for the Division of Engineering, oversees the district’s Stormwater Management Cost-Share Program.

The district’s program is “an outreach program geared toward assisting local governments to construct water-quality improvement projects,” he says. The cost-share program has existed since 1995 but evolved into its current form about four years ago. Before that time, the program provided cost shares to local governments for master planning. Once most areas had been master planned, the district’s board moved the program away from planning and toward funding construction projects. As Watt explains, “Once [master planning] has been done, the construction costs are just overwhelming.” The board allocates between $2 and $4 million per year for the program.

In the cooperative program’s new incarnation, the priority “is to support stormwater management efforts that contribute to the improvement of water quality by achieving pollutant load reduction goals (PLRGs) or total maximum daily load (TMDL) allocations for identified priority pollutants” (SJRWMD 2007). Funded projects are predominately ones that are part of a master plan. As in Ocean City, where older developments lack stormwater treatment, the district encompasses many city and county areas that don’t have adequate stormwater quality treatment, Watt says. “We do a lot of what we see as retrofits. These are, many times, multi-objective projects.”

Of the projects chosen, Watt says, “They are basically ready to go, and we come in and help with more bang for the buck.” Projects must be completed in 18 to 24 months. In addition, the program focuses on the implementation of proven water-quality treatment technologies. “The program is not intended to fund untried technologies, so we’re very confident that the projects are having the intended water-quality results.”

Last year, the program awarded $2.6 million for 10 projects with total capital costs of $17.3 million. In addition to the typical types of projects one might expect to see, such as ponds and swales, the district has been very successful in building “stormwater parks,” which combine stormwater treatment (treatment trains using dry and wet detention, some wetland treatment, and perhaps even some chemical treatment) with passive recreation (walking trails, bridges, and areas for picnicking).

Clear Goals, Effective Controls
The stormwater BMP cost-share programs that were examined for this article differ in structure, focus, and scope. Whereas the St. Johns River Watershed Management District’s program funds local government projects, Ocean City’s program funds private projects. The district funds facilities that treat stormwater from multiple developments, possibly for large land areas. The city’s program, however, is directed toward retrofits on individual developments. Finally, while the district may provide up to $1 million as its share of a large project, the city is starting out with $2,000 awards.

Photo: St. Johns River Watershed Management District

An aerial view of the stormwater park

The cost-share programs arise naturally from an existing plan (or plans). That is, the cost-share program is not an end in itself; it supports long-term planning processes. The St. Johns River Watershed Management District program facilitates the implementation of local governments’ watershed master plans. The Ocean City program is aimed directly at meeting the CCMP water-quality goals. In both cases, the plans that gave rise to the cost-share programs were created over a number of years, required public input from a range of stakeholders, and were thoroughly vetted. Similarly, the Maryland cost-share program described early in the article funds projects that support existing watershed plans. As Kim Lamphier, spokesperson for Maryland Department of Environment, explains, “Urbanized watersheds have prepared watershed improvement master plans, which recommend the locations and the types of stormwater practices that will be beneficial in reducing pollutions from stormwater runoff.” This structure provides the programs with a very clear goal: projects that are funded must help meet the objectives of the plan. The criteria used to evaluate applicants’ projects also come naturally from the plans and the programs’ resultant goals.

The programs are set up in a way that enables them to control the quality of the projects that are funded. In the cases of the St. Johns River Watershed Management District and Ocean City, the programs are familiar with—and are even involved in the design of—the projects they fund. “These projects are known to us in some way,” says Watt. The projects are analyzed carefully by district staff as a part of earlier master planning processes. In Ocean City’s case, the program is just getting started, and Blazer is encouraging promising projects to apply. She can also work with each project to ensure that facilities are designed to meet the water-quality and -quantity goals. This program characteristic also leads to two other shared, positive aspects of the two programs.

The programs choose projects that are well planned and poised to begin, jumping in with the cost share to bolster the effort. The cost-share program helps project dollars go “twice as far,” says Watt. Of the program’s role in encouraging retrofits, Blazer says, “I’m thinking, how can I get them interested in doing stormwater?” The programs serve as a kind of a project booster.

Oversight effort and costs can be a major drain on resources for cost-share and grant programs. However, these two programs are structured so that oversight is made less burdensome. Because of the programs’ familiarity with and confidence in the projects they fund, they are able to function well with what might seem like relatively distant oversight. “We’re very comfortable not having [tight] control,” says Watt. “We ask for progress reports every six months, and we go out and inspect the project near or after completion. On a day-to-day basis, the local governments have a high degree of integrity.” In Ocean City, projects are also inspected periodically and at completion, but not more than other stormwater devices that are being constructed.

One more tool that the programs use to ensure the quality of the projects is the timing of the cost share itself. Both programs provide the cost-share dollars after the project has been completed satisfactorily. “The ultimate control is the reimbursement. It is a pretty significant amount of leverage,” Watt notes.

Does Measuring Success Mean Monitoring?
Both programs are seeking improved water quality through the funded projects. Some may wonder how improvements are measured. Water-quality benefits of the finished projects are not, so far, being measured through sampling or similar studies. Here again, the advantage of building a program on established plans becomes clear. The programs are able to rely on the science, studies, policy, stakeholder input, and even specific projects and actions that have been recommended by the plans that support their goals. They are not required to monitor and restudy to demonstrate their successes. In addition, the St. Johns River Watershed Management District program provides cost sharing only to implement structures that have been shown to remove pollutants. Finally, at this early time in the Ocean City program, Blazer is still in the process of proving that interest in the program is sufficient to support its existence. The first complete Ocean City project also implements a proven technology.

Conclusion
Cost-share programs can stretch the tight supply of available environmental program dollars and meet the needs of multiple organizations at one time. With attention to issues such as setting goals and easing the burden of oversight, programs can be set up for success. The Maryland Department of the Environment, which awards $1,000,000 in financial assistance to local governments annually, recommends a “consistent funding program and a long-term planning process for the reduction of stormwater pollutants on a watershed-wide basis,” according to Lamphier. The St. Johns River Watershed Management District and Ocean City programs echo the theme, funding projects grounded in long-term plans.