1. Draft Stormwater Proposal Home Builders Association of Virginia Richmond, Virginia June 29, 2009

2. Stormwater Regulation Background • Regulation began as legislation during the 2004 General Assembly authored by Preston Bryant. • Two Technical Advisory Committee (TAC) processes have led to current regulation. • First Regulation was scrapped by Soil and Water Conservation Board (SWCB) because of improper public notice. • Second TAC was not allowed to address technical components of regulation. • SWCB approved the current regulation for publication in the Virginia Register of Regulations September 25, 2008. • Regulations are currently under review by the Governor, Secretary of Natural Resources, and Department of Planning and Budget. • Publication should occur sometime in late April or May of 2009. • Regulation is scheduled to be final by December of 2009. • HB1991 introduced during the 2009 General Assembly moved the effective date of the Regulation to July 1, 2010.

3. Proposed Regulation Outline • Regulation contains new structure for local stormwater program permitting and management, new technical regulations for stormwater, and a new fee structure for stormwater permitting. • Localities will be required to manage independent stormwater programs approved by DCR, or DCR will manage an independent program for the locality. • New technical requirements include designing onsite nutrient reductions to .28 lbs of Phosphorous per acre per year, and changes water quantity requirements from the first half inch of precipitation to the first full inch of precipitation. • New fees are increased in anticipation of significant increases in program management at DCR and within the localities.

4. Concerns with the Regulations Drafted • DCR has unfairly targeted the Development Industry and all businesses looking to build in Virginia by targeting the smallest contribution of phosphorous with the highest price tag. • Setting .28 lbs/acre/year of phosphorous as a mandate for all new construction has minimal impact on the overall health of the Chesapeake Bay and other tributaries, and severely limits the ability of Virginia to expand both its commercial and residential bases. • 75% of all rainfall events in Virginia are ½ an inch or less, meaning that the new water quantity standards are targeting 25% or less of the heaviest storms. • The .28 standard assumes that all undeveloped land in Virginia will be developed in order to meet the Phosphorous allocation from the Chesapeake Bay Program. • DCR is unable to determine actual urban phosphorous loads.

5. DCR Basis for New Regulation is False • False: DCR has repeatedly claimed that the Urban Phosphorous load is the only load that has increased. • True: While the Urban Phosphorous load has increased, so has the total urban acreage. Therefore the per acre urban phosphorous load has declined.

6. DCR Basis for New Regulation is False • False: Agriculture’s contribution has been addressed and the Agricultural Phosphorous load is declining at a much sharper rate than Urban Loads. • True: While Agriculture enjoys a voluntary program with state cost-sharing, the state has not had the money in the Water Quality Improvement Fund (WQIF) necessary to fully fund agricultural BMPs. In fact, on a per acre basis Agricultural and Urban loads have performed similarly.

7. Actual Stormwater Trends

8. Actual Stormwater Trends • Since 2000: • Agricultural Reduction per Acre 3.1% • Urban Reduction per Acre 2.99% • Since 1985: • Agricultural Reduction per Acre 9.29% • Urban Reduction per Acre 34.87%

9. What’s the Solution • HBAV proposes a simple plan that attacks nutrient pollution from a global position. • Rather than divide and conquer, we must look at the pollution as the problem not each individual source. • HBAV proposes a plan that is both more effective and more efficient.

10. The HBAV Alternative • The Better Way consists of 5 key components. • Maintain the current Chesapeake Bay Act standard of .45 pounds of phosphorous per acre per year for new development, and expand that requirement to the rest of Virginia. • Allow for acceptance of on-site mitigation designs at .60 pounds of phosphorous per acre per year. • Require a payment of $15,000 per pound of phosphorous to the Water Quality Improvement Fund for the difference between the on-site mitigation of .60 and the requisite .45 pounds of phosphorous per acre per year. • Use the approximately $170 million generated by development in the fund as grants to assist in the construction of agricultural stormwater management facilities and the retro-fitting of point-source facilities. • Return to quantity control measures for the first ½ inch of rain in the one-year, 24 hour storm.

11. How Does This Compare? • A Few Assumptions: • The model assumes a $15,000 per pound price for phosphorous, which represents average up front costs across a variety of projects including those used in the Virginia Tech Economic Analysis. • We also assume that land development trends over the last 30 years will continue. • And that all funds in the WQIF will be used to their highest potential.

12. Option 1 • Simply apply the .45 lbs/ac/year to all development applied to both Urban and Mixed Open Space. • Current Development Patterns Continue • No Additional Financial Aid is provided to Agricultural or Point-Source loads. • Historic reductions in phosphorous from agriculture and point sources are continued.

15. Option 1 Result • Total Phosphorous Load reduced to 7.9 million pounds. • Urban Phosphorous Load increases by 78,000, but a per acre reduction of .096 lbs/acre (1.116 in 2007 vs. 1.02 in 2030). • Agricultural Load reduction of 1.3 million pounds, but a per acre reduction of only .13 lbs/acre. • Still at 1.9 million pounds over allocation.

16. Option 2 • Take DCR’s recommendation of .28 lbs/acre/year applied to both Urban and Mixed Open Space. • Current Development Patterns Continue • No Additional Financial Aid is provided to Agricultural or Point-Source loads. • Historic reductions in phosphorous from agriculture and point sources are continued.

19. Option 2 Result • Total Phosphorous Load reduced to 7.8 million pounds. • Urban Phosphorous Load INCREASES by 39,000 pounds, but sees a per acre decrease of only .116. • Agricultural Load Reduction is comparable to Option 1. • Still at 1.8 million pounds over allocation. • Total additional cost $2 billion.

20. Option 3 HBAV Alternative • Onsite design at .60 lbs/ac/yr. • $15,000 payment into WQIF per pound difference between .45 and .60 • $170 million generated annually for WQIF. • WQIF allocated at 60% agriculture; 20% point-source; 10% mixed open space BMP upgrades; 10% urban BMP upgrades.

25. How Do I Calculate My Payment to WQIF? • Option 3 • On a ten acre parcel, construction of a BMP to remove phosphorous and reach the .60 requirement will cost approximately $240,000. • A payment will be due to the WQIF in the amount of $22,500. Calculated at 10 acres x .15 lbs phosphorous removed per acre x $15,000 per pound. • Total Phosphorous Removed: 19 to 31 pounds • On-site: 16 pounds • Off-site: From 3 pounds to 15 pounds

26. HBAV Alternative Result • Total Phosphorous Load Reduced to 6 million pounds. • Total Urban Load increase by 80,000 pounds. • Total Agricultural Load Reduced by over 2.4 million pounds. • Phosphorous allocation is met and exceeded in 20 years.

27. DCR’s Response • Industry is proposing to pollute more. • Proposal takes us beyond limits of technology. • More stringent and mandatory farm runoff regulations are forthcoming that are not taken into account in the model.

28. Questions? Barrett Hardiman Home Builders Association of Virginia 707 East Franklin Street Richmond, Virginia 23219 (804) 643-2797 bhardiman@hbav.com