FUNDING MECHANISMS BY CATEGORY

Introduction

The purpose of the following list is to provide a menu of funding options for local governments and other users. The Panel has considered a full range of options, from special fees to the formation of cooperatives. A number of areas such as securitization-offer further potential for creative funding schemes and deserve continued investigation.

The Panel feels that a mix of various funding mechanisms will ultimately be required to make up the current shortfall in the Tributary Strategies effort. Continued creativity will be essential, and the Panel recommends, first, that planners and decisionmakers at all levels of government and in the private sector strongly consider how to make use of the different funding mechanisms listed here, and second, that they continue their own investigations into new ways of funding important environmental projects.

Four Categories

This compilation of funding ideas is arranged according to the four major areas of the Tributary Strategies: Point Source, Developed Land, Agricultural Lands and Resource Protection.

In terms of nutrient reduction "Point Source" essentially refers to biological nutrient reduction (BNR) at waste treatment plants with flows of at least 500,000 gallons per day.

The primary "nonpoint source" focus falls on Agricultural Lands, with an emphasis on conservation and nutrient management plans and improved means for containing animal waste and other sources of nitrogen and phosphorus. Developed Land programs primarily address runoff from streets, parking lots and other developed areas, and focus on stormwater management efforts, such as retention ponds. Resource Protection includes a range of practices designed to protect natural areas such as forests and wetlands.

Of the four areas addressed here, projects on developed land, such as the "retrofitting" of outdated stormwater systems, are generally the most expensive. Generally, point source projects have had the benefit of specific construction grants and other sources of funds and have been proven to be quite cost effective. The largest shortfall in funding, however, is in the area of agricultural programs. Agricultural programs, such as cost-share programs, are generally voluntary, and many efforts, such as developing conservation plans, may lack adequate technical assistance or incentives. Resource protection programs, while a small portion of the total shortfall, have the potential to contribute significant habitat benefits in addition to their nutrient reduction function.

Each of the four sections begins with a brief introduction and overview of issues in that area. Ideas with broader impact generally appear first, followed by mechanisms which raise new funds and finally by ideas for reallocating existing funds. Some issues cut across areas, of course, as do some funding mechanisms. Icons are used to identify categories and to signal which funding mechanisms are likely to be useful in more than one area.