WATER QUALITY IMPROVEMENT FUND

www.deq.virginia.gov/bay/wqif.html

The Virginia Water Quality Improvement Act of 1997 (VA CODE Section 10.1-2117 through 2134) was enacted by the Virginia General Assembly in response to the need to finance the nutrient reduction strategies being developed for the Chesapeake Bay and its tributaries.

Pursuant to the Act, the Commonwealth established in the State treasury a special permanent, nonreverting fund, known as the "Virginia Water Quality Improvement Fund." The Act directs the Department of Environmental Quality to assist local governments and individuals in reducing point source nutrient loads to the Chesapeake Bay with technical and financial assistance made available through grants provided from the fund.  Section 10.1-2129.B. of the Act directs the Secretary of Natural Resources to develop written guidelines that (i) specify eligibility requirements; (ii) govern the application for and distribution and conditions of WQIF grants; and (iii) list criteria for prioritizing funding requests. 

Legislation passed during the 2006 General Assembly session amended the WQIF guidelines with respect to several point source issues and in response the Office of the Secretary of Natural Resources published revised guidelines (Nov. 2006) based on those changes and public comments.  

ELIGIBILITY

Currently, project eligibility is limited to design and installation of nutrient reduction technology at Chesapeake Bay watershed publicly owned wastewater treatment plants.  The DEQ Director is required to sign an agreement with all eligible applicants with one exception.  The Director may defer a grant if it is determined that the use of nutrient credits in accordance with the Chesapeake Bay Watershed Nutrient Credit Exchange Program (§ 62.1-44.19:12 et seq.) would be significantly more cost-effective than the installation of nutrient controls for the facility in question.

WQIF APPLICATION PROCESSING

Applicants for WQIF grants must first submit a grant Application during a solicitaion period. In order to process the applications in a fair and equitable way and also establish a prioritization, DEQ developed guidance memorandum (GM) #06-2012 (guidance memorandum).  The status of grant applications can be found at the following link: ready to proceed.

To develop a draft agreement, DEQ relies on: the application, external information (such as water billing records and Census information), a Preliminary Engineering Report (PER), bid information (i.e. schedule of values) from the contractor and the engineering agreement with scope of work.  Once a draft agreement for construction is ready for public review, a review period is posted and public comments are solicited during a comment period of at least 30 days at the following link: draft/public-noticed agreements.  Draft agreements may be viewed at the DEQ central office.

Following this period, a project will then be listed on the website as signed grant agreements.

As required by the Act, all point source construction grants must be governed by a legally binding, enforceable agreement that includes provisions to: govern design and installation of facility upgrades; require long-term operation, maintenance and monitoring; require periodic reporting; and include stipulated penalties for non-performance.

Summary of Appropriations by Fiscal Year

 

WQIF STATUS (April 2011)

In the Fall of 2010 it was projected that the WQIF would be fully expended by the end of the current fiscal year (FY11 ends 6/30/11) unless the General Assembly appropriated more grant funds.  The WQIF did receive an appropriation of about $3.64 million from the FY10 budget surplus, but those funds are almost completely earmarked ($3 million for James River chlorophyll standards study; $546,645 deposited to WQIF reserve fund).  No other WQIF appropriations were made and the previous bonding authority was not increased.

                                                                                                                     

To spread the remaining limited funds equitably among all grantees, reimbursements were pro-rated, with the exception of 10 “hardship” localities, at 85% beginning last July.  The 10 “hardship” grantees will receive unreduced, uninterrupted grant payments until their projects are completed.

 

Reimbursements for FY11 are actually running behind the owner-furnished projections submitted to DEQ-WQIF last fall.  There may be a WQIF balance that can be requested for carry-over into FY12 but it will likely be exhausted early in FY12.  The current estimate of the total shortfall to cover existing, signed agreements is about $107 million.  Once the WQIF is fully expended, DEQ will continue processing reimbursement requests and deferring payment until funds are made available through future General Assembly appropriations.