budget and outcomes committee (boc) meeting agenda · measures, results and accountability ... end...

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Budget and Outcomes Committee (BOC) Meeting Agenda Clean Water Council (Council)

July 8, 2016 9:00-4:00

MPCA Conference Room 100 (1st floor) MPCA, 520 Lafayette Road North, St. Paul, MN

9:00 Regular Business Approve agenda Chair and Staff update

9:15 Discuss FY18-19 Clean Water Fund (CWF) dollars for University of Minnesota (UMN) project Pilot Project to estimate Return on Investment of Clean Water Legacy Fund Programs

9:30 Discuss FY18-19 CWF dollars for the following new programs proposed by Council members One Watershed One Plan Implementation Water Legacy Grants Program Drinking Water Protection

10:30 Break

10:40 Discuss FY18-19 CWF dollars for Board of Water and Soil Resources (BWSR) Programs Water Management Transition (One Watershed One Plan) Critical Shoreland Protection-Permanent Conservation Easements Targeted Wellhead/Drinking Water Protection Riparian Buffer-Permanent Conservation Easements Shoreland Buffer Compliance Grants to Soil and Water Conservation Districts Conservation Drainage Management and Assistance Tillage and Erosion Transects

12:00 Lunch

12:30 Continue to discuss FY18-19 CWF dollars for BWSR Programs Surface and Drinking Water Protection/Restoration Grants (Projects and Practices) Grants to Watersheds with Multiyear Plans (Targeted Watershed Program) Accelerated Implementation Community Partners Clean Water Program Measures, Results and Accountability Technical Evaluation Washington County Grey Slough Habitat Improvement Local Water Management Plan - NE Metro Groundwater Management Area Workshops and Grants - NE Metro Groundwater Management Area Local Water Management Plan - Bonanza Valley and Straight River Groundwater

Management Areas

1:45 Break

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2:00 Discuss FY18-19 CWF dollars for the following new programs proposed by agencies

Statewide Recreational Water Testing Portal (MDH) Vegetative Cover and Soil Health (MDA) Metropolitan Area Water Quality Sustainability Support (Met Council)

2:40 Discuss FY18-19 CWF dollars for the following programs

Stormwater BMP Performance Evaluation and Technology Transfer – UMN Legacy Website - Legislative Coordinating Commission

3:15 Discuss Indirect Costs related to CWF dollars Discuss indirect costs with Minnesota Management and Budget (MMB). 3:45 Discuss stakeholder process for draft BOC FY18-19 CWF Recommendations and objectives

of August BOC meetings 4:00 Adjourn The next BOC meetings will be on August 5 and August 12. More information about the Council’s Budget and Outcomes Committee can be found at http://www.pca.state.mn.us/tchyee5.

(in thousands) FY18 FY19 (in thousands) FY18 FY19

Carry Forward from Prior Year 670 5,500 Carry Forward from Prior Year 670 10,980

Sales Tax Receipts 109,598 114,607 Sales Tax Receipts 109,598 114,607

Investment Income 705 705 Investment Income 705 705

Total Resources 110,973 120,812 Total Resources 110,973 126,292

ML16 Chapter 172 (Legacy) - - ML16 Chapter 172 (Legacy) - -

ML16 Chapter 189 (Supplemental) (20) (23) ML16 Chapter 189 (Supplemental) (20) (23)

End of Session Balance 110,953 120,789 End of Session Balance 110,953 126,269

FY18 FY19 FY18 FY19

5% Balance: Amount Available to

Appropriate* 105,473 115,058

10% Balance: Amount Available to

Appropriate* 99,993 114,808

Balance 5,500 5,753 Balance 10,980 11,484

% of Revenues 5% 5% % of Revenues 10% 10%

Scenario 1:

5% Reserve

Scenario 2:

10% Reserve

*Note: This assumes sales tax receipts are collected at the rate estimated in the February 2016 forecast. Actual sales tax receipts may be

higher or lower than these estimates. Estimated availability illustrates a range of potential reserves from 5% to 10%.

Clean Water FundMinnesota Management and Budget

Draft 6-22-16

For informational purposes only

FY18-19 Calculation of Amount Available to Appropriate*

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6/27/16

Voyageur’s National Park Clean Water Projects Agency: Minnesota Pollution Control Agency Category: Groundwater and Drinking Water Program Number: 92A Program Contact(s): Randy Jenniges, SHE for the Voyageur’s National Park Clean Water Joint Powers Board Person filling out form: Randy Jenniges Program Description and Outcomes to Date: This program protects water quality in the State's only National Park by funding wastewater and SSTS projects in the Voyageur’s National Park Clean Water Joint Powers Board planning area following the Comprehensive Plan to bring the National Park into compliance with state standards. The comprehensive study found that there is a 64% non‐complying/failing septic system rate in the planning area. The following projects are in design or being constructed:

Crane Lake Water & Sanitary District project under design and construction for the Eastern Service Area. This project consists of centralized and decentralized solutions, and increases the utilization of the CLWSD treatment facility.

Island View project in design phase with anticipated construction in 2017 and 2018.

Pucks Point (Kabatogama Sewer District) currently under construction and anticipate completion at the end of 2016.

FY 18‐19 Program Description: The comprehensive plan identified over $40 million in projects over the planned project area. The FY18‐19 budget request is $2,200,000 and will be distributed by the Voyageur’s National Park Clean Water Joint Powers Board for the planning, design, permitting, and construction of the Ash River, Island View, and Crane Lake projects. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds 1,500,000 2,000,000 3,500,000

FTEs (state agency staff funded by Clean

Water Funds)

More about this Program: The Voyageur's National Park Clean Water Joint Powers Board was set up to create and implement a Comprehensive Plan for the area of the National Park and to help the project partners develop a comprehensive wastewater collection and treatment system (including centralized and decentralized treatment) for the housing, recreational, and resort developments in the Park’s Namakan Basin area. Funding direction and FTEs for FY18‐19: FY18‐19 $2,200,000 The expenses are proposed projects in the Voyageur's National Park Clean Water Joint Powers Board.

2

Long‐term funding vision (until 2034 and beyond):

FY20‐21 $1,250,000 $1,000,000 for each FY

Other funds used to support this program: ISLAND VIEW PROJECT: FUNDING SOURCE AMOUNT KOOCHICHING COUNTY $30,000 KOOCHICHING COUNTY $400,000 MN STATE BONDING 2010 $100,000 MN STATE BONDING 2014 $7,817,800 MN LEGACY FUNDS 2015 (1/2 OF $2M) $1,000,000 ARMY CORP 2016 $4,500,000 PROJECT ASSESSMENTS $3,000,000 SUBTOTAL FUNDING $16,847,800 CRANE LAKE WATER & SANITARY DISTRICT: TRACT 1 AMOUNT MN STATE BONDING 2014 $750,000 IRRRB $690,000 CLWSD $ 60,000 TRACT 2 LEGACY $1,500,000 SUBTOTAL FUNDING $3,000,000 KABETOGAMA TRACT 1 AMOUNT Small Community Wastewater Program (loan) $400,000 Small Community Wastewater Program (grant) $1,600,000 Kab Township Geo Bond (Mn Rural Water) $76,824 MPFA PSI Grant $1,161,200 IRRRB $179,349 Legacy $940,000 Other Township Sources $48,598 DNR Capitol Fee $64,175 SUBTOTAL FUNDING $4,470,147 Funding notes: The Voyageur's National Park Clean Water Joint Powers projects are currently leveraging $2.5 million in Clean Water funds for over $20 million in projects. The stakeholders are planning to continue this funding effort for over $40 million in planned projects in the next 20 years. Additional Information http://www.sehinc.com/online/namakan http://www.sehinc.com/online/island‐view‐sanitary‐sewer‐project http://www.sehinc.com/online/puckspoint

What is Clean Water Worth? Estimating Return on Investment for

The Minnesota Clean Water Legacy Funds

Submitted by: Bonnie Keeler, Eric Lonsdorf (Institute on the Environment) and Steve Polasky (Applied Economics) On behalf of: The Natural Capital Project, University of Minnesota Estimated start date: July 1, 2017 Estimated end date: June 30, 2018 Client: The Clean Water Council Total Budget: $265,000 over 12 months

Project proposal The Clean Water Council (CWC) advises on the expenditure of the Clean Water Legacy Funds (CWF) that

aim to protect, enhance and restore water quality in Minnesota’s lakes, rivers, and streams and to

protect groundwater. The CWC is charged with making recommendations on spending of the CWF, but

the Council currently lacks information on which programs and investments are most likely to yield a

high return on investment (ROI). The University of Minnesota’s Natural Capital Project (NatCap)

proposes the following work plan to support the CWC in making smarter, more strategic investments of

CWF dollars to better achieve water quality goals.

In conversation with CWC leadership, we identified three interrelated information needs where NatCap

tools and approaches can add value to existing CWC processes:

1) Having better information about public values and preferences for clean water and what types

of clean water benefits are the most highly valued by Minnesotans.

2) Provide information and methods to evaluate the ROI of programmatic activities where returns

are measured in improved water quality and/or enhanced human wellbeing

3) Provide information and methods to assess how to allocate resources among different

programmatic activities (e.g. planning, technical assistance, monitoring, implementation).

I. Assessing the various benefits of clean water to Minnesotans

Making informed funding decisions that align with public values requires that we understand public

perceptions of what “clean water” means. Some investments are more likely to enhance the

recreational quality of lakes and rivers, whereas other investments are more likely to protect public

health or enhance the quality of sensitive aquatic ecosystems. There is currently very little information

available that policy makers can use to evaluate these tradeoffs or understand the preferences of the

citizens of Minnesota for different types of benefits from clean water. This activity will delineate

important components of clean water and quantitatively assess the value of these components across

Minnesota. It is striking that Iowa, a state with far fewer lakes and less clean water than Minnesota, has

gathered far more information in recent decades on the value of clean water. Investing in a rigorous and

objective manner to, an understand Minnesotans’ priorities for water quality will build a solid

foundation for the CWC to justify future investments and funding priorities.

Activities: NatCap in collaboration with social science colleagues in the Forest Resources department will

conduct a series of focus groups and surveys across Minnesota covering a gradient of water quality

metrics throughout the state. We will evaluate individual and household preferences for clean water at

specific endpoints (lakes, rivers, streams, groundwater) at each location using social science techniques

to elicit preferences and rankings for different water values (e.g. recreation, drinking water quality,

hypoxia, aquatic ecosystem health) from different demographic groups. The outcome of this work will

enhance understanding the values Minnesotans place on water quality and how they evaluate and rank

potential tradeoffs among competing water quality objectives. These insights will feed directly into CWC

decision‐making processes about allocation of resources, funding recommendations, and public

communication and outreach around the benefits of the CWF.

Budget: $88,000 to cover faculty support, two graduate researcher stipends, travel and survey expenses,

analysis and reporting costs.

II. Evaluation of Return on Investment (ROI) of programmatic activities

The Council seeks objective approaches to evaluate return on programmatic activities. Evaluating the

ROI is one promising way to compare across different projects to find which ones generate the highest

value per dollar invested. ROI can provide valuable information about various potential investments,

especially for implementation projects that represent the largest proportion of fund expenditures.

Traditional ROI used in a business setting measures investment costs and returns in dollar terms. But in

conservation and restoration applications, returns need not be measured in dollar terms. The value of

clean water is not always easy to represent in monetary terms, such as the worth of increasing biotic

integrity and enhancing natural beauty of lakes and streams, or providing safer environments. In cases

where monetary returns are difficult to obtain, it is possible to use alternative measures of returns for

ROI, such as miles of streams that meet water quality standards, or the number of people who have

higher quality drinking water sources.

We propose to use a multi‐criteria evaluation approach to assess the numerous benefits of CWF

implementation dollars using a suite of metrics representing a diverse set of benefits and endpoints of

interest. We will model our work on the “conservation dashboard” approach developed by the Nature

Conservancy and demonstrated at the June 16th, 2016 meeting with Council leadership. CWC can then

evaluate returns among various dimensions of water quality improvement and decide which projects

present the best portfolio of returns for the citizens of Minnesota.

Activities: In collaboration with the Council, NatCap would co‐develop a set of spatially‐explicit metrics

that could be used to evaluate the ROI on CWF implementation projects. Candidate metrics include

costs (upfront and maintenance), miles of stream affected, acres impacted, numbers of households

affected, avoided treatment costs, changes in property values, changes in recreational access or quality,

potential health benefits, impacts on equity, and likelihood of improving habitat for sensitive aquatic

species, among other metrics. NatCap has already assembled statewide spatial datasets for quantifying

many of these metrics and would supplement with agency datasets and expertise where appropriate.

NatCap would use a subset of metrics selected by the CWC to evaluate past implementation projects

funded by the CWF and produce a report and associated maps that the Council could use to evaluate

ROI. NatCap will aim to assess hundreds of past projects statewide to produce an assessment that was

comprehensive and representative.

Budget: $76,000 to cover 12 months of a 50% time GIS technician plus supervision and project

management to develop metrics, collect spatial data, obtain project information, complete analysis,

host workshops and write the final report. To visualize the results of the analysis in a web‐based

interactive decision‐support tool would require an additional $45,000 in software development fees to

build user interface, underlying data structure, web hosting, and documentation.

III. Assessing allocation of the CWF among programmatic types using a “value of information” approach

Council leadership seeks objective information on benefits of allocating resources among different types

of programmatic investments such as implementation, monitoring, planning, and technical assistance.

As these are different types of investments, directly comparing the ROI across these types is not always

straightforward. For example, monitoring and planning activities result in information. Such information

can be used to better allocate implementation investments resulting in improved water quality.

Monitoring may also be essential to show the returns of implementation investments. Information in

and of itself does not improve water quality. For information to have value it needs to be used to

improve performance through better targeting or learning about what works and what does not.

To address this allocation challenge, we propose using a “value of information” (VOI) approach. VOI

evaluates the improvement in decision making with the information, versus without the information, in

terms of better water quality outcomes. The value of information analysis will use Minnesotans’ values

and the ROI analysis to determine funding priorities across monitoring, planning, and implementation

needs.

Activities: NatCap researchers will conduct in‐depth interviews and review documents to understand

how information generated under different programmatic investment strategies has led to changes in

decisions and subsequent impacts to water quality. We will rely on approaches from decision analysis

and VOI techniques to map causal pathways from investments to decisions to changes in water quality.

We will summarize our findings in a report and guidance document, including evaluation of the

effectiveness of past allocation strategies and recommendations for how to evaluate future allocations.

Budget: $56,000 to cover 12 months of a 50% time research assistant plus supervision and project

management to complete interviews, document review, host workshops and complete the final report.

6/10/16

Water Management Transition (One Watershed, One Plan)

Agency: Board of Water and Soil Resources (BWSR) Category: Non‐Point Source Implementation Program Number: 45 Program Contact(s): Melissa Lewis, 651.297.4735, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: One Watershed, One Plan Program: Accelerate implementation of the State’s Watershed Approach through the statewide development of watershed‐based local water planning that is synchronized with Watershed Restoration and Protection Strategies (WRAPS) and Groundwater Restoration and Protection Strategies (GRAPS). FY10‐17 Clean Water Funds = $5.1 M

Created One Watershed, One Plan framework (103B.801)

BWSR awarded funds for 5 pilot projects across Minnesota

In FY16, BWSR will finalize the One Watershed One Plan operating procedures, plan content requirements, and transition plan.

Open a request for proposal for soliciting new planning areas (6 to 7) in March 2016. FY 18‐19 Program Description: One Watershed, One Plan Program: Accelerate implementation of the State’s Watershed Approach through the statewide development of watershed‐based local water planning (103B.801) that is synchronized with Watershed Restoration and Protection Strategies (WRAPS) and Groundwater Restoration and Protection Strategies (GRAPS) by providing technical assistance, program oversight, and grants to local governments. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0 $0 $.9 M $4.2M $5.1M


Water Funds)

0 0 1.4 2.1

Funding and FTE notes: Staff to oversee development of new program, provide technical assistance, and grant oversight to local governments developing One Watershed, One Plans. More about this Program (up to ½ page description of program and outcomes if you want to expand on the items above; could also attach other materials already developed for this program): For assistance, oversight, and grants to local governments to transition local water management plans to a watershed approach as provided for in Minnesota Statutes, chapters 103B, 103C, 103D, and 114D.

Funding direction and FTEs for FY18‐19: BWSR anticipates requesting about the same level in funding for FY18‐19 as FY16‐17 funding levels based on the projected pace of progress for state coverage by 2025. FTEs will be about the same as FY16‐17. For FY18‐19 the agency is likely to propose and increase in the Target Watershed Program to be used in part to pilot the concept of “Funding the Plan”. Long‐term funding vision (until 2034 and beyond): BWSR estimates that once the complete transition of watershed based management plans has occurred (2025), needs will decrease and is not anticipating requesting funds for plan development. Request for funding increases in this program would be associated with providing a more systematic and predictable method of funding plan implementation. Other funds used to support this program: NA Funding notes: No source of funds for development of comprehensive watershed management prior to the development of this program. Supplement versus substitute: NA If applicable – statutory citation that guides program activities: Minnesota Statues 103B, 103C, 103D, and 114D Additional Information (Add links and contact information for your program): Contact Melissa Lewis or Marcey Westrick at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). More information about this program can be found at http://www.bwsr.state.mn.us/planning/1W1P/index.html. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Dollars Passed Through

NA NA $.86M (95%) $3.4 M (Anticipated)

(81%)

$4.26M

Entities NA NA Local Governments

Local Governments

Approximate number of contracts

NA NA 5 10‐14 5‐19

2/23/16

Critical Shoreland Protection – Permanent Conservation Easements

“Reinvest in Minnesota: Critical Shorelands” Agency: Minnesota Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 79 Program Contact(s): Bill Penning, 651‐297‐1894, [email protected] Person filling out form: Bill Penning Program Description and Outcomes to Date: Reinvest in Minnesota: Critical Shorelands Program: A pilot program to purchase permanent conservation easements to protect lands adjacent to public waters with good water quality but threatened with degradation. FY10‐17 Clean Water Funds = $2M

Program did not exist prior to FY2016.

In FY16, the RIM Critical Shorelands program is a new program and still in development. At this time, BWSR is looking at piloting this program in one watershed that is of particular concern to source water supply for communities along the Mississippi River upstream of and including the Twin Cities.

FY 18‐19 Program Description: Reinvest in Minnesota: Critical Shorelands Program: To purchase permanent conservation easements to protect lands adjacent to public waters with good water quality but threatened with degradation. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0 $0 $0M $2M $2M


Water Funds)

0 0 0 0.5

Funding and FTE notes: No staff were funded out of this appropriation in FY16. As the program is implemented in FY17 up to .5 FTE will provide support to process and execute easements and provide technical and administrative support to implementing Soil and Water Conservation Districts and landowners. More about this Program: For purchase of permanent conservation easements to protect lands adjacent to threatened public waters. BWSR has developing partnerships with local units of government and non‐profit partners. Resource assessment and prioritization has been completed. Implementation will begin shortly. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting the same level in funding for FY18‐19 as FY16‐17 funding levels based on need. FTEs will be about the same as FY16‐17. Long‐term funding vision (until 2034 and beyond): BWSR estimates that needs will remain high over the coming decades to protect critical areas in northern Minnesota.

Other funds used to support this program: NA Funding notes: No state source of funds for providing easements to protect critical prior to this program. Non‐profit partners are raising additional funds to leverage CWF dollars. Total external fund contribution is unknown at this time. Supplement versus substitute: NA If applicable – statutory citation that guides program activities: 103F.515 Additional Information: Contact Bill Penning at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


NA NA NA $1.9M (95%)

Entities NA

NA NA SWCDS Landowners

Approximate number of easements

NA NA NA 30

6/10/13

Targeted Wellhead/Drinking Water Protection “Reinvest In Minnesota Wellhead Protection”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 20 Program Contact(s): Bill Penning, 651‐297‐1894, [email protected] Person filling out form: Bill Penning Program Description and Outcomes to Date Reinvest In Minnesota Wellhead Protection Program: Grants to implement best management practices or permanent conservation easements in communities/wellhead protection areas where the actions needed to protect drinking water are known. FY10‐17 Clean Water Funds = $12.0M

Since the beginning of the RIM Wellhead Protection program in 2010, BWSR has funded 27 easements totaling 1,610 acres. These acres will be restored to native perennial vegetation and will have positive impacts on groundwater quality as compared to pre‐easement conditions.

In FY16/17, the $3.5 million the state has appropriated through BWSR’s wellhead easement program will help to leverage up to $8 million in federal funding through the Conservation Reserve Enhancement Program proposal.

FY 18‐19 Program Description For permanent conservation easements on wellhead protection areas under Minnesota Statutes, section 103F.515, subdivision 2, paragraph (d), to permanently protect groundwater supply sources in wellhead protection areas. Priority to be placed on land that is located where the vulnerability of the drinking water supply is designated as high or very high by the commissioner of health, where drinking water protection plans have identified specific activities that will achieve long‐term protection, and on lands with expiring Conservation Reserve Program contracts. Funding information

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $2.3M $3.6M $2.6M $3.5M $12 M


Water Funds)

.5 .8 .6 .8

Funding and FTE notes: No staff were funded out of this appropriation in FY16. As the program is implemented in FY17 as part of CREP up to .8 FTE will provide support to process and execute easements and provide technical and administrative support to implementing Soil and Water Conservation Districts and landowners. More about this Program: The Wellhead Protection Conservation Easement program is targeted to protect drinking water through the Reinvest in Minnesota Program (RIM). In partnership with the Minnesota Department of Health

(MDH) and Soil and Water Conservation Districts, permanent conservation easements are purchased in

areas where the vulnerability of the drinking water is designated as high or very high. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting an increase in funding for FY18‐19 over FY16‐17 funding levels based on the need to expand the program for groundwater and drinking water protection. FTEs will be about the same as FY16‐17. Long‐term funding vision (until 2034 and beyond): BWSR estimates that permanent protection needs will remain high over the coming decades. Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

USDA CRP NA NA NA $8M $8M

Funding notes: No source of funds for permanent conservation easements in highly vulnerable wellhead areas prior to the RIM Wellhead program. $2M of the FY16/17 appropriation is being held for leverage to be used in the upcoming CREP program once approved by the USDA and is projected to acquire up to 737 acres. Supplement versus substitute: N/A If applicable – statutory citation that guides program activities: 103F.515 Additional Information: Contact Bill Penning at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). More information about this program can be found at http://www.bwsr.state.mn.us/easements/ Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


$2.07M (90%)

$3.24M (90%)

$2.34M (90%)

$3.16M (90%)

$10.81M

Entities SWCDs Landowners

SWCDs Landowners

SWCDs Landowners

SWCDs Landowners


7 12 7 16 42

NOTE: In the proposed Minnesota CREP, the federal government will pay 80% of the overall project costs. However, there are some expenditures not authorized for use of federal dollars such as Easement Stewardship and staffing. Thus, a higher percentage of state funding must be used for these two cost categories resulting in lower pass through dollars. However, the State will realize approximately 4 times the acres protected under by easement due to the federal CREP leveraged.

2/23/16

Riparian Buffer ‐ Permanent Conservation Easements

Reinvest In Minnesota Riparian Buffer Program Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 42 Program Contact(s): Bill Penning, 651‐297‐1894, [email protected] Person filling out form: Bill Penning Program Description and Outcomes to Date: Reinvest in Minnesota Riparian Buffer Program: Purchase and restore permanent conservation easements on riparian land adjacent to public waters, except wetlands. Establish buffers of native vegetation that must be at least 50 feet where possible and no more than 100 feet. This program is coordinated and matched with Outdoor Heritage Funds. FY10‐17 Clean Water Funds = $41.65 M

Since the beginning of the RIM Riparian Buffer program in 2010, BWSR has funded 457 easements totaling 5,330 acres. These acres will be restored to native perennial vegetation and will provide both water quality and habitat benefits.

In FY16/17, the $9.75M million appropriated by the legislature through BWSR’s buffer easement program will help to leverage up to $39 million in federal funding through the Conservation Reserve Enhancement Program proposal.

FY 18‐19 Program Description: Purchase and restore permanent conservation easements on riparian buffers adjacent to lakes, rivers, streams, and tributaries, to keep water on the land in order to decrease sediment, pollutant, and nutrient transport; reduce hydrologic impacts to surface waters; and increase infiltration for groundwater recharge. This appropriation may be used for restoration of riparian buffers protected by easements purchased with this appropriation and for stream bank restorations when the riparian buffers have been restored. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $6.9M $12M $13M $9.75M $41.65M


Water Funds)

1.5 2.6 2.8 2.2 0

Funding and FTE notes: No staff were funded out of this appropriation in FY16. As the program is implemented in FY17 as part of CREP approximately 2.2 FTE will provide support to process and execute easements and provide technical and administrative support to implementing Soil and Water Conservation Districts and landowners.

More about this Program: The RIM Riparian Buffer Easement Program is the only program funded through both Outdoor Heritage and Clean Water Funds (from the Clean Water, Land and Legacy Amendment), as recommended by the Lessard‐Sams Outdoor Heritage and Clean Water Councils. The program targets creating native plant buffers on riparian lands adjacent to public waters through the purchase of permanent conservation easements. This program is part of a strategic approach to prevent pollutants from entering our lakes and streams and to enhance fish and wildlife habitat. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting an increase in funding for FY18‐19 over FY16‐17 funding levels based on need to fund CREP. FTEs will be increase as compared to FY16‐17. Long‐term funding vision (until 2034 and beyond): There will be a long‐term need to continue to create buffers along un‐regulated ditches. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

USDA CRP NA $39M $39M

LSOHC NA $4.339M $5.72M $19.544M $29.603M

Funding notes: The RIM Buffer program is the only program that connects both LSOHC and CWF fund. All of the FY16 and FY17 buffers appropriations (both CWF and OHF) are being held for leverage to be used in the upcoming CREP program once approved by the USDA. Supplement versus substitute: There is no base funding for this program. CWF and OHF are the only source of funds. If applicable – statutory citation that guides program activities: 103F.515 Additional Information (Add links and contact information for your program): Contact Bill Penning at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Funds being passed through

$6.21M (90%)

$10.8M (90%)

$11.7M (90%)

$6.7M (69%) see

note $35.41M

Entities SWCDs Landowners

SWCDs Landowners

SWCDs Landowners

SWCDs Landowners

Approximate number of easements 134 233 90 268 725

NOTE: In the proposed Minnesota CREP, the federal government will pay 80% of the overall project costs. However, there are some expenditures not authorized for use of federal dollars such as Easement Stewardship and staffing. Thus, a disproportionate amount of state funding must be used for these two cost categories resulting in lower pass through dollars. However, the State will realize up to 4 times the acres protected under by easement due to the federal CREP leveraged.

2/23/16

Conservation Reserve Enhancement Program (CREP) Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 78 Program Contact(s): Bill Penning, 651‐297‐1894, [email protected] Person filling out form: Bill Penning Program Description and Outcomes to Date: CREP Program: Interagency effort to implement CREP aimed at restoring surface water quality in areas targeted for nutrient reductions and protecting sensitive ground water and drinking water sources. FY10‐17 Clean Water Funds = $18M

No program existed prior to FY16.

For FY16, Governor Dayton submitted a proposal for a Minnesota Conservation Reserve Program (CREP) in late 2015. Negotiations with the Farm Service Agency are ongoing.

FY 18‐19 Program Description: CREP Program: To purchase and restore permanent conservation easements to treat and store water on the land for water quality improvement purposes and related technical assistance. This work may be done in cooperation with the United States Department of Agriculture with a first priority use to accomplish a conservation reserve enhancement program, or equivalent, in the state. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0M $0M $0M $18M $18M


Water Funds)

0 0 0 ?

Funding and FTE notes: No staff were funded out of this appropriation in FY16. As the program is implemented in FY17 as part of CREP approximately staff will be added by BWSR and SWCDs to provide support to process and execute easements and provide technical and administrative support to implementing enrolling landowners. More about this Program: CREP is an offshoot of the Conservation Reserve Program (CRP), the country’s largest private‐land conservation program. The proposed federal, state, and local partnership would voluntarily retire environmentally sensitive land using the nationally‐recognized Reinvest in Minnesota (RIM) Reserve program. This is accomplished by permanent protection through establishing conservation practices via payments to farmers and agricultural land owners. A combination of USDA CRP payments and incentives will be necessary to achieve a potential 80:20 federal to state match expectation. Much of the state’s most recently appropriated and anticipated future appropriations will be dedicated to CREP to maximize federal dollars leveraged.

Funding direction and FTEs for FY18‐19: BWSR anticipates requesting about the same level of funding for FY18‐19 as FY16‐17 funding levels based on the CREP submitted by Governor Dayton. FTEs will be increased as compared to FY16‐17. Long‐term funding vision: BWSR anticipates asking for additional CREP funds for FY20‐21 to complete the five year CREP. Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Name of Funding Program

FSA NA NA NA $72M estimated

$72M estimated

LSOHC NA NA NA $13.8M $13.8

MN State Bonding NA NA NA $30M pending

$30M pending

Funding notes: In December, 2015 Governor Dayton submitted a 100,000 acre CREP proposal to the US Department of Agriculture – Farm Services Agency. The proposal requested the maximum allowable 80% Federal cost share for total project cost. The other 20% would come from State secured sources. This translates to a federal share of $634 million, a state share of at $161 million combined for a total estimated project cost of $795 million. A variety of appropriations from CWF and OHF have been secured or recommended. A $30M bonding request is currently before the Legislature. BWSR and partners will continue to seek a variety of funding sources to fund all aspects of the CREP. Supplement versus substitute: This is a new program. Clean Water Funds will help leverage federal funds up to 4:1 (federal:state) dollars. Additional Information Contact Bill Penning at BWSR or visit http://www.bwsr.state.mn.us/crep/CREP_Proposal_Summary_Fact_Sheet.pdf. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 See note

Total


NA NA NA $5.634M

$5.634M

Entities NA NA NA SWCDs Landowners


NA NA NA 494

494

Note: Under this proposal the Federal government will pay 80% of the overall project costs. However, there are some categories of costs for which federal funds cannot be used, including execution of easements and technical and administrative to support implementing SWCDs Thus, a disproportionate amount of state funding must be used for these two cost categories.

2/23/16

Shoreland Buffer Compliance Program “Buffer and Soil Erosion Law Implementation”

Agency: Board of Water and Soil Resources Category: Nonpoint Source Implementation Program Number: 77 Program Contact(s): Doug Thomas/ Marcey Westrick, 651-219-6338/651-284-4153, [email protected]/[email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Shoreland Buffer Compliance Program: Provides grants for purposes of supporting local governments in their implementation of the new buffer law. · Program did not exist prior to FY2016. · In FY16, BWSR awarded funds on a non-competitive formula based on SWCD workload to support

their local implementation of the new buffer law. · Pass through funding to counties and/or drainage authority to support local implementation. · Assistance to collect and provide drainage system benefitted area maps, files, and/or GIS files to

DNR to support mapping. · Landowner outreach and information. · Provide technical assistance to landowners. · Provide financial assistance to landowners. · Purchase of equipment to support implementation. · Provide alternative practice validations, if requested, where the prescribed buffer may not be

the right water quality practice for a site. · Review DNR maps and conduct landowner outreach prior to map finalization. · Adopt buffer recommendations for waters not mapped by DNR for inclusion in local water

management plans. · Implement the new statewide excessive soil erosion provisions that protect downstream waters

and property owners from negligent or absent soil and water conservation management practices.

· Inventory of baseline conditions i.e. where buffers already exist. FY10-17 Clean Water Funds = $5M FY 18-19 Program Description: Buffer and Soil Erosion Law Implementation: Provides grants for purposes of supporting local governments in their implementation of the statewide buffer and excessive soil erosion laws. Funding information:

FY10-11 FY12-13 FY14-15 FY16-17 Total

Clean Water Funds $0M $0M $0M $5M $5M FTEs (state agency

staff funded by Clean Water Funds)

0 0 0 3

Funding and FTE notes: Staffing for one coordinator position and two field staff positions to provide coordination, technical assistance and oversight for BWSR’s and local government start up and implementation of the new buffer law. More about this Program: For grants to local units of government to ensure compliance with riparian buffer or alternate practice requirements for state required buffers and soil erosion law. Funding direction and FTEs for FY18-19: Same as for FY16-17. Long-term funding vision (until 2034 and beyond): BWSR anticipates requesting funds for FY18-19 to continue to support the first years of implementation until one year after the November 18, 2018 deadline unless the agency is successful with a FY17 supplemental general fund request. Other funds used to support this program: Not applicable Supplement versus substitute: Not applicable If applicable – statutory citation that guides program activities: Not Applicable Additional Information: Contact Doug Thomas or Marcey Westrick at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ Clean Water Fund pass-through dollars: FY10-11 FY12-13 FY14-15 FY16-17 Total


NA NA NA $4M (80%)

$4M

Entities NA NA NA SWCDS Approximate

number of contracts

NA NA NA 90 90

http://www.legacy.leg.mn/

2/23/16

Grants to Soil and Water Conservation Districts “Soil and Water Conservation District Technical Capacity”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 90 Program Contact(s): Doug Thomas, 651‐219‐6338, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Soil and Water Conservation District Technical Capacity Program: Provides grants that focuses on increasing SWCD capacity to address four resource concern areas—Soil Erosion, Riparian Zone Management, Water Storage and Treatment, and Excess Nutrients. Eligible activity categories include: Staffing, Cost Share/Incentives, and Technology/Capital Equipment. FY10‐17 Clean Water Funds = $22M

Program did not exist prior to FY2016

In FY16, BWSR awarded the state’s 90 soil and water conservation districts $11 million based on legislative formula of $100K base and state match to county allocation. For FY17, a similar allocation method will be used to distribute funds.

FY 18‐19 Program Description: Soil and Water Conservation District Technical Capacity Program: BWSR will not be requesting Clean Water Funds for this program in FY18 ‐19. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0M $0M $0M $22M $22M


Water Funds)

0 0 0 0 0

More about this Program: For payments to soil and water conservation districts for the purposes of Minnesota Statutes, sections 103C.321 and 103C.331. From this appropriation, each soil and water conservation district shall receive an increase in its base funding of $100,000 per year. Money remaining after the base increase is available for matching grants to soil and water conservation districts based on county allocations to soil and water conservation districts. The board and other agencies may reduce the amount of grants to a county by an amount equal to any reduction in the county's allocation to a soil and water conservation district from the county's previous‐year allocation when the board determines that the reduction was disproportionate. The second year appropriation cancels if new buffer requirements are not enacted in 2015. Funding direction and FTEs for FY18‐19: BWSR will not be requesting Clean Water Funds for this program in FY18 ‐19. This funding is intended to be shifted to the general fund in FY18‐19.

Long‐term funding vision (until 2034 and beyond): BWSR will not be requesting Clean Water Funds for this program going forward. Other funds used to support this program: NA Funding notes: The increase in funding recognizes the role SWCDs play in providing technical assistance to private landowners. It also recognizes new demands for SWCD services from: 1) increases in CWF on‐the‐ground implementation dollars, 2) Minnesota’s new buffer law, 3) expansion of soil loss limits law statewide, 4) the Agricultural Water Quality Certification Program, and 5) a growing role in land‐related groundwater issues. Supplement versus substitute: Not applicable If applicable – statutory citation that guides program activities: Not applicable Additional Information: Contact Doug Thomas at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


NA NA NA $22M (100%)

$22M

Entities NA NA NA SWCDs


NA NA NA 180 180

6/15/16

Conservation Drainage Management and Assistance “Multipurpose Drainage Management Program”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 41 Program Contact(s): Tim Gillette, 651‐297‐8287, [email protected] Marcey Westrick, 651‐284‐4153, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Multipurpose Drainage Management Program: Implementation of a conservation drainage/multipurpose drainage water management program in consultation with the Drainage Work Group to improve surface water management by providing funding under the provisions of 103E.015. FY10‐17 Clean Water Funds = $1.5M

Program did not exists prior to FY16.

In FY16, BWSR awarded 6 grants for $.675M. For FY17, the Request for Proposal is anticipated to open in the summer of 2016.

Local governments provide a minimum 25% match for all pass through dollars they receive.

FY 18‐19 Program Description: Multipurpose Drainage Management Program: Implementation of a conservation drainage/multipurpose drainage water management program in consultation with the Drainage Work Group to improve surface water storage and treatment within public drainage systems by providing funding under the provisions of 103E.015. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds .66* 2.7* 3.4** $1.5M $8.26M


Water Funds)

.1 .7 .7 .7 .7

*Former conservation drainage demonstration program ** Former soil erosion drainage law compliance program

Funding and FTE notes: Staff provide technical assistance, grant monitoring and reporting oversight to local governments. More about this Program: For technical assistance and grants for the conservation drainage program in consultation with the Drainage Work Group, coordinated under Minnesota Statutes, section 103B.101, subdivision 13, that includes projects to improve multipurpose water management under Minnesota Statutes, section103E.015.

Funding direction and FTEs for FY18‐19: BWSR anticipates requesting an increase in funding for FY18‐19 as FY16‐17 funding levels based on need and to expand this program. FTEs will be about the same as FY16‐17. Long‐term funding vision (until 2034 and beyond): BWSR estimates that multipurpose drainage implementation needs will remain high over the next decades. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


NA NA NA NA NA

Funding notes: No source of funds for multipurpose drainage implementation existed prior to this program. Local governments provide a minimum 25% match for all pass through dollars they receive. Supplement versus substitute: NA If applicable – statutory citation that guides program activities: 103E.015 Additional Information: Contact Tim Gillette at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). Clean Water Fund pass‐through dollars:

FY10‐11* FY12‐13* FY14‐15** FY16‐17 Total

Dollars passed through

$.51M (77%)

$1.6M (59%)

$1.7M (50%)

$.68M (90%)

$4.49M

Entities Local Governments

Local Governments

Local Governments

Local Governments


8 15 33 6 6

*former conservation drainage demonstration program ** former soil erosion drainage law compliance program

2/23/16

Tillage and Erosion Transects Agency: Board of Water and Soil Resources Category: Nonpoint Source Implementation Program Number: 80 Program Contact(s): Megan Lennon, 651‐296‐1285, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Tillage and Erosion Transects Program: Program to systematically collect data and produce statistically valid estimates of the rate of soil erosion and tracking the adoption of high residue cropping systems in in the 67 counties with greater than 30% land in agricultural row crop production. FY10‐17 Clean Water Funds = $1M

Program did not exists prior to FY16

In FY16, BWSR entered into a contract with the University of Minnesota, Department of Soil, Water and Climate to develop a long‐term program to systematically collect tillage (crop residue after planting) data and annual soil erosion estimates. The first collection of this data is planned for the spring of 2016.

FY 18‐19 Program Description: Tillage and Erosion Transect Program: Program to systematically collect data and produce statistically valid estimates of the rate of soil erosion and tracking the adoption of high residue cropping systems in in those 67 counties with greater than 30% land in agricultural row crop production. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0 $0M $0M $1M $1M


Water Funds)

0 0 0 .5

Funding and FTE notes: Staff provide overall project management, coordination, and technical oversight. More about this Program: Designed to establish a long term program in Minnesota to systematically collect data and produce county, watershed, and state wide estimates of soil erosion caused by water and wind along with tracking adoption of conservation measures to address erosion. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting about the same level in funding it did in FY116‐17 for FY18‐19 and beyond to maintain this program. FTEs will be about the same as FY16‐17.

Long‐term funding vision (until 2034 and beyond): BWSR estimates that data collection needs on soil erosion and residue cropping systems will remain high over the next decades. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program: NA Funding notes: No source of funds for this type of data collection existed prior to this program. Supplement versus substitute: NA Additional Information: Contact Megan Lennon at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


NA NA NA $.86M (86%)

$.86M (86%)

Entities NA NA NA University of

Minnesota

University of

Minnesota


NA NA NA 1 1

6/15/16

Surface and Drinking Water Protection/Restoration Grants “Projects and Practices”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 37 Program Contact(s): Marcey Westrick, 651‐284‐4153, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Project and Practices Program: Grant and incentive funding to protect, enhance, and restore water quality in lakes, rivers and streams and to protect groundwater and drinking water implementation priority actions in local water management plans. FY10‐17 Clean Water Funds = $76.9 M

BWSR has awarded over $51M in funds for 285 projects to restore and protect surface and drinking water including groundwater.

In FY16, BWSR awarded 35 grants for $8.9M. For FY17, the Request for Proposal is anticipated to open in the summer of 2016.

A non‐State match equal to at least 25% of the amount of Clean Water Funds requested and/or received is required.

FY 18‐19 Program Description: Project and Practices Program: Grants to protect and restore surface water and drinking water; to keep water on the land; to protect, enhance, and restore water quality in lakes, rivers, and streams; and to protect groundwater and drinking water. Projects must use practices demonstrated to be effective, be of long‐lasting public benefit, include a match, and be consistent with total maximum daily load (TMDL) implementation plans, watershed restoration and protection strategies (WRAPS), or local water management plans or their equivalents. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $6M $29.1M $21.4M $20.38M $76.88M


Water Funds)

3.9 6.5 8.0 7.9

Funding and FTE notes: Staff provide technical assistance for application development, project implementation, grant monitoring and reporting oversight to local governments. Current staffing is based on the cumulative volume of grants/projects being implemented. Grants typically provide for three years for project completion so many grants carry over into the next biennium. More about this Program: For grants to protect and restore surface water and drinking water; to keep water on the land; to protect, enhance, and restore water quality in lakes, rivers, and streams; and to protect groundwater and drinking water, including feedlot water quality and subsurface sewage treatment system projects and stream bank, stream channel, shoreline restoration, and ravine stabilization projects. The projects must use practices demonstrated to be effective, be of long‐lasting

public benefit, include a match, and be consistent with total maximum daily load (TMDL) implementation plans, watershed restoration and protection strategies (WRAPS), or local water management plans or their equivalents. A portion of these funds may be used to seek administrative efficiencies through shared resources by multiple local governmental units. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting an increase in funding for FY18‐19 as compared to FY16‐17 funding levels based on demonstrated need. FTEs will be about the same as FY16‐17. Long‐term funding vision (until 2034 and beyond): BWSR estimates that conservation implementation needs will remain high over the next decades. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


NA NA NA NA NA

Funding notes: Local governments provide a minimum 25% match for all pass through dollars they receive. Supplement versus substitute: NA Additional Information: Contact Marcey Westrick at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects) or in the Clean Water Fund Legislative Reports http://www.bwsr.state.mn.us/publications/legislative.html. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


$5.8M (97%)

$26.8M (92%)

$19.5M (91%)

$8.7M (85%

FY16 Only)

$60.8M

Entities 48Local Governments;

1M to Conservation

Corp of Minnesota

Local Governments;

1M to Conservation

Corp of Minnesota

Local Governments;

1M to Conservation Corp

of Minnesota

Local Governments;

1M to Conservation

Corp of Minnesota


48 159 78 35 (FY16 Only) 320

6/10/16

Grants to Watersheds with Multiyear Plans “Targeted Watershed Program”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 38 Program Contact(s): Marcey Westrick, 651‐284‐4153, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Targeted Watershed Program: Focuses on watersheds where the amount of change necessary to improve water quality is known, the actions needed to achieve results are identified, those actions can be implemented within a four‐year time period, and are capable of achieving measurable outcomes. FY10‐17 Clean Water Funds = $21.75M

BWSR awarded funds for 7 projects for $11.3M in FY14‐15.

FY 16‐17 funds have yet to be awarded. Currently, there is a request for interest which closed on March 9. BWSR approval of projects is anticipated to occur in May 2016.

A non‐State match equal to at least 25% of the amount of Clean Water Funds requested and/or received is required

FY 18‐19 Program Description: Targeted Watershed Program: Focuses on local units of government organized for comprehensive watershed management plan implementation of identified priority water resources where the amount of change necessary to improve water quality is known, the actions needed to achieve results are identified, and those actions are capable of achieving measurable outcomes. Funding information

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0 $0M $12M $9.75M $21.75M


Water Funds)

0 0 3.0 3.7 3.7

Funding and FTE notes: Staff provide technical assistance for application development, project implementation, grant monitoring and reporting oversight to local governments. Current staffing is based on the cumulative volume of grants/projects being implemented. In the future we expect the current staffing level to remain somewhat the same as the number of projects completed will offset the number of projects added. Staffing could increase if funding were to be substantially increased. More about this Program: For grants to local government units organized for the management of water in a watershed or subwatershed that have multiyear plans that will result in a significant reduction in water pollution in a selected subwatershed. The grants may be used for establishment of riparian buffers; practices to store water for natural treatment and infiltration, including rain gardens; capturing storm water for reuse; stream bank, shoreland, and ravine stabilization; enforcement activities; and implementation of best management practices for feedlots within riparian areas and other practices

demonstrated to be most effective in protecting, enhancing, and restoring water quality in lakes, rivers, and streams and protecting groundwater from degradation. Grant recipients must identify a nonstate match and may use other legacy funds to supplement projects funded under this paragraph. Grants awarded under this paragraph are available for four years and priority must be given to the best designed plans each year. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting an increase in funding for FY18‐19 as compared to FY16‐17 funding levels to expand the program. FTEs will be about the same as FY16‐17. Long‐term funding vision (until 2034 and beyond): BWSR estimates that funding needs will remain high over the next decades. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program: NA Funding notes: No source of funds for watershed management and holistic watershed projects was available prior to this program. Local governments provide a minimum 25% match for all pass through dollars they receive. Supplement versus substitute: NA Additional Information: Contact Marcey Westrick at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). More information about this program can be found at http://www.bwsr.state.mn.us/publications/legislative_resources/2016/2016_TDWP_Report_to_Legislature.pdf. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13

FY14‐15 FY16‐17 Total


NA NA 11.3M (94%)

8.75 M (90%)

$20.05M (92%)

Entities NA NA Local Governments

Local Governments

Local Governments


NA NA 7 8 15

6/10/16

Accelerated Implementation Agency: Board of Water and Soil Resources Category: Nonpoint Source Implementation Program Number: 39 Program Contact(s): Doug Thomas and Marcey Westrick, 651‐219‐6338/651‐284‐4153; [email protected] / [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Accelerated Implementation Program: Enhance the capacity of local governments to accelerate implementation of projects and activities that supplement or exceed current state standards for protection, enhancement, and restoration of water quality in lakes, rivers, streams, and groundwater. Activities include 1) increase in technical assistant through regional technical service areas (TSAs), 2) technical training and certification, 3) inventories of potential restoration or protection sites, and 4) developing and using analytical targeting tools that fill an identified gap. FY10‐17 Clean Water Funds = $26.6M

BWSR has awarded approximately $13.8 M for 98 projects from FY12‐15.

In FY16, BWSR awarded 19 grants to local governments through the competitive grants process totaling $2,006,078. In addition, these funds invest in building the capacity of Non‐Point Engineering Assistance TSA Joint Powers Boards to increase the capacity of soil and water conservation districts to provide highly skilled technical and engineering assistance to landowners. TSAs use these funds to invest in building regional capacity across the state to efficiently accelerate on‐the‐ground projects and practices that improve or protect water resources. In October 2015, BWSR’s Board awarded each of the eight TSA areas $241,000 for FY 2016. Funds are also used to support technical training and credentialing of local soil and water conservation district staff.

Local governments provide a minimum 25% match for all pass through dollars they receive. FY 18‐19 Program Description: Accelerated Implementation Program: Enhance the capacity of local governments to accelerate implementation of projects and activities that supplement or exceed current state standards for protection, enhancement, and restoration of water quality in lakes, rivers, streams, and groundwater. Activities include 1) increase in technical assistant through regional technical service areas (TSAs), 2) technical training and certification, 3) inventories of potential restoration or protection sites, and 4) developing and using analytical targeting tools that fill an identified gap. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0M $6.6M $8M $12M $26.6M


Water Funds)

0 .9 2.5 4.6

Funding and FTE notes: Staff provide technical assistance to local governments in addition to assistance with grant oversight and reporting. Increase in staffing reflects increase in agency provided technical training and credentialing, TSA program oversight, and development of state‐wide targeting tool. More about this Program: For targeted local resource protection and enhancement grants and statewide program enhancements for technical assistance, citizen and community outreach, and training and certification, as well as projects, practices, and programs that supplement or otherwise exceed current state standards for protection, enhancement, and restoration of water quality in lakes, rivers, and streams or that protect groundwater from degradation, including compliance. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting about the same level in funding for FY18‐19 as FY16‐17 funding levels based on the continued need to provide resources to support the local conservation delivery system. FTEs will increase as the technical training and credentialing program becomes fully operational in FY18‐19 and beyond. Long‐term funding vision (until 2034 and beyond): BWSR estimates that needs will remain high over the next decades. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

NRCS Conservation Operations

NA NA NA $500K $500K

Funding notes: No source of funds for technical assistance that supplement or exceed existing standards prior to this program. Local governments provide a minimum 25% match for all pass through dollars they receive. Supplement versus substitute: NA Additional Information: Contact Doug Thomas or Marcey Westrick at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/.

Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Dollars passed through

NA $6.5M (98%)

$7.3M (91%)

$4.7M (78%)

FY16 only

$18.5M

Entities NA Local Governments

Local Governments

Local Governments

Local Governments


NA 36 62 27 125

6/10/16

Community Partners Clean Water Program Agency: Board of Water and Soil Resources Category: Nonpoint Source Implementation Program Number: 44 Program Contact(s): Marcey Westrick, 651‐284‐4153, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Community Partners Clean Water Program: Increase citizen participation in implementing water quality projects and programs to increase long‐term sustainability of water resources. This effort and resources of active and engaged community groups, such as, lake associations, non‐profits, and conservation groups, is supported through this program. This effort is delivered through local collaboration using a “small grants partners” program. FY10‐17 Clean Water Funds = $7.5M

In FY 12‐FY 15, BWSR has awarded 46 projects.

In FY16, BWSR awarded four grants for $403,000. For FY17, it is anticipated the Request for Proposal will open in the summer of 2016.

FY 18‐19 Program Description: Community Partners Clean Water Program: Increase citizen and non‐governmental organization participation in implementing water quality projects and programs to increase long‐term sustainability of water resources. This effort and resources of active and engaged community groups, such as, lake associations, non‐profits, and conservation groups, is supported through this program. This effort is delivered through local collaboration using a “small grants partners” program. Funding information (Use legislative appropriations for the program in the table below consistent with session laws and the Council’s budget spreadsheet; if other amounts are used please explain below):

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0 $3M $3M $1.5M $7.5M


Water Funds)

NA .7 .7 .7 .7

Funding and FTE notes: Staff provide technical assistance for application development, project implementation, grant monitoring and reporting oversight to local governments. Current staffing is based on the cumulative volume of grants/projects being implemented. More about this Program: For community partner grants to local units of government for: (1) structural or vegetative management practices that reduce storm water runoff from developed or disturbed lands to reduce the movement of sediment, nutrients, and pollutants for restoration, protection, or enhancement of water quality in lakes, rivers, and streams and to protect groundwater and drinking water; and (2) installation of proven and effective water retention practices including, but not limited to, rain gardens and other vegetated infiltration basins and sediment control basins in order to keep water

on the land. The projects must be of long‐lasting public benefit, include a local match, and be consistent with TMDL implementation plans, watershed restoration and protection strategies (WRAPS), or local water management plans or their equivalents. Local government unit costs may be used as a match. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting about the same level in funding for FY18‐19 as FY16‐17 funding levels to maintain this program. FTEs will be about the same as FY16‐17. Long‐term funding vision (until 2034 and beyond): BWSR estimates that needs will remain high over the next decades. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program: NA Funding notes: No source of funds for sub‐grants to community partners prior to the Community Partners program. Local governments provide a minimum 5% match for all pass through dollars they receive. Supplement versus substitute: NA Additional Information (Add links and contact information for your program): Contact Marcey Westrick at BWSR. Projects funded with Clean Water Funds through BWSR can be found at the Minnesota Legacy website at http://www.legacy.leg.mn/ (recommend searching under BWSR administered projects). Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


NA $2.2M (73%)* $2.2M (73%)* $.4M (53%)* FY16 only

$4.8M

Entities Local governments

Local governments

Local governments

Local governments


NA 26 20 4 50

*If funds are not expended in a particular Fiscal Year, funds have been transferred to projects and practices projects.

6/10/16

Measures, Results and Accountability Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 40 Program Contact(s): Bill Eisele, (651) 282‐2929, [email protected]; Marcey Westrick, 612‐298‐4419, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Measures, Results and Accountability: This fund is to provide state oversight and accountability for grants to local government, support program and outcomes reporting, evaluate results and measure the value of conservation program and project implementation by local governments, including submission to the legislature a report from the board, in consultation with the commissioners of natural resources, health, agriculture, and the Pollution Control Agency, detailing the recipients, projects funded under this section, and the amount of pollution reduced. FY10‐17 Clean Water Funds = $6.49M

Clean Water Fund Legislative Report; eLINK technical support; Local Government Training for grants oversite, reporting and compliance, and measure performance.

In FY16, BWSR will conduct the Clean Water Fund Legislative Report; eLINK technical support; Local Government Training for grants oversite, reporting and compliance; measure performance; and PTMApp technical support.

FY 18‐19 Program Description: Measures, Results and Accountability: This fund is to provide state oversight and accountability for grants to local government, support program and outcomes reporting, evaluate results and measure the value of conservation program implementation by local governments, including submission to the legislature a report from the board, in consultation with the commissioners of natural resources, health, agriculture, and the Pollution Control Agency, detailing the recipients, projects funded under this section, and the amount of pollution reduced. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $.59 $2.1M $1.9M $1.9M $6.49M


Water Funds)

2 4.1 4.1 5.1 5.1

Funding and FTE notes: Staff provide eLINK technical support, training on oversight and accountability, evaluate results, perform grant monitoring and verification, and conduct reporting.

More about this Program: To provide state oversight and accountability, evaluate results, provide implementation tools, and measure the value of conservation program implementation by local governments, including submission to the legislature by March 1 each even‐numbered year a biennial report prepared by the board, in consultation with the commissioners of natural resources, health, agriculture, and the Pollution Control Agency, detailing the recipients, the projects funded under this section, and the amount of pollution reduced. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting about the same level in funding for FY18‐19 as FY16‐17 funding levels based on maintaining this program to support grant integrity, measurability and outcomes reporting. FTEs will be about the same as FY16‐17. Long‐term funding vision (until 2034 and beyond): BWSR estimates that needs for results based accountability will remain high over the next decades. Clean Water Funds supplement the number of projects completed through this program. Other funds used to support this program: NA Funding notes: No source of funds for oversight and accountability existed prior to this appropriation. Supplement versus substitute: NA Additional Information: Contact Bill Eisele or Marcey Westrick at BWSR. The BWSR Clean Water Fund Legislative Report can be found at the BWSR website at http://www.bwsr.state.mn.us/publications/legislative.html. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


NA NA NA NA NA

Entities NA NA NA NA NA


NA NA NA NA NA

2/23/16

Technical Evaluation “Habitat Evaluation Program”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 43 Program Contact(s): Wade Johnson, 651‐259‐5075, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Technical Evaluation Program: Statutory mandate to annually evaluate a sample of up to 10 habitat restoration projects, beginning July 1, 2011. BWSR and DNR have been collaborating on implementing state statue (Laws of Minnesota 2011, First Special Session, Chapter 6) that requires restoration evaluations to be conducted on habitat restoration projects completed with Clean Water Funds, Outdoor Heritage Funds and Parks and Trail Funds. FY10‐17 Clean Water Funds = $.5M

Have completed over 50 evaluations to date on various clean water projects.

In FY16, 10 projects will be evaluated.

FY 18‐19 Program Description: Technical Evaluation Program: Statutory mandate to annually evaluate a sample of up to 10 habitat restoration projects, beginning July 1, 2011. BWSR and DNR have been collaborating on implementing state statue (Laws of Minnesota 2011, First Special Session, Chapter 6) that requires restoration evaluations to be conducted on habitat restoration projects completed with Clean Water Funds, Outdoor Heritage Funds and Parks and Trail Funds. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds 0 $168,000 $168,000 $168,000 $.5M


Water Funds)

0 .5 .5 .5

Funding and FTE notes: Funding goes toward a joint position between BWSR and DNR for the habitat evaluation program. This program evaluates projects from the Clean Water Fund, Outdoor Heritage Fund and the Parks and Trails Fund. More about this Program: For a technical evaluation panel to conduct ten restoration evaluations under Minnesota Statutes, section 114D.50, subdivision 6. Funding direction and FTEs for FY18‐19: BWSR anticipates requesting about the same level in funding for FY18‐19 as FY16‐17 funding levels based on statutory requirement of evaluating 10 projects per year. FTEs will be about the same as FY16‐17.

Long‐term funding vision (until 2034 and beyond): BWSR estimates that much information will be gleaned from the habitat evaluation program. However, if the Clean Water Fund is no longer available, then this requirement would no longer be applicable. Funding would not be pursued via the general fund. Other funds used to support this program: NA Funding notes: As a requirement under 114D, this program has not be funding previously. Supplement versus substitute: NA If applicable – statutory citation that guides program activities: Minnesota Statutes, section 114D.50, subdivision 6. Additional Information: Contact Wade A. Johnson at DNR. Clean Water Fund pass‐through dollars: NA

2/23/16

Washington County Grey Slough Habitat Improvement Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 93 Program Contact(s): Marcey Westrick, 651‐284‐4153, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Washington County Grey Slough Habitat Improvement: For a grant to Washington County for a water quality improvement project that will improve water quality and restore an essential backwater aquatic area by reconnecting Grey Cloud Slough to the main channel of the Mississippi River Area. FY10‐17 Clean Water Funds = $.52 M

BWSR received no appropriations for this project prior to FY16.

In FY16, BWSR entered into a grant agreement with Washington County for this project.

FY 18‐19 Program Description: Not applicable Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0M $0M $0M $0.52M $0.520 M


Water Funds)

0 0 0 0 0

Funding and FTE notes: N/A More about this Program: For a legislatively directed grant to Washington County for a water quality improvement project that will improve water quality and restore an essential backwater aquatic area by reconnecting Grey Cloud Slough to the main channel of the Mississippi River Area. This appropriation is not available until at least an equal amount is committed from non‐state sources. Funding direction and FTEs for FY18‐19: N/A Long‐term funding vision (until 2034 and beyond): N/A Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Local Sources NA NA NA $.65M $.65M

Funding notes: This was a one‐time funding stream with a specific purpose.

Supplement versus substitute: N/A Additional Information: Contact Marcey Westrick at BWSR. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


N/A N/A N/A $0.52M $0.52M

Entities N/A N/A N/A County


N/A N/A N/A 1 1

2/23/16

Local Water Management Plan “NE Metro Groundwater Management Area”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 65 Program Contact(s): Don Buckhout, 651‐296‐0768, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: N&E Metro Groundwater Management Area: Funds to collaborate with the commissioner of health and local units of government in the North and East Metro Groundwater Management Area through development or implementation of local water management plans as provided for in Minnesota Statutes, chapters 103B, 103C, 103D, and 114D, to identify strategies for groundwater protection and potential locations for infiltration projects and practices, including potential wetland restoration, enhancement, or creation that would contribute to groundwater recharge, surface water enhancement, and wellhead protection. Areas in the Mississippi River flyway, or that also provide habitat for waterfowl production, fish spawning, or other fish or wildlife habitat, should be specifically identified. FY10‐17 Clean Water Funds = $.015M

These funds have been used to hire a groundwater management area project coordinator, to support DNR groundwater management area plan, to support groundwater restoration and protection strategies, to partially fund workshops for local officials for groundwater conservation, and to partially fund a grant to promote stormwater reuse for turfgrass irrigation in the N&E Metro Groundwater Management area.

In FY16/17, there were no dollars appropriated for this program.


FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $0M $0M $0.15M $0M $0.15 M


Water Funds)

0 0 .8 0 .8

Funding and FTE notes: A Groundwater Management Area Project Coordinator was partially funded out of this appropriation. Funding direction and FTEs for FY18‐19: N/A Long‐term funding vision (until 2034 and beyond): N/A

Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

CWF – Met Council $0.55M $0.55M

CWF ‐ MDH $0.3M $0.3M

Funding notes: This was a one‐time funding stream with a specific purpose. Supplement versus substitute: N/A Additional Information: Contact Don Buckhout at BWSR. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


N/A N/A $9,000‐$18,000

(6%‐12%) N/A

$9,000 ‐ $18,000 (6%‐12%)

Entities N/A N/A

Local Government N/A


N/A N/A 2‐4 N/A 2‐4

2/23/16

Workshops and Grants “N&E Metro Groundwater Management Area”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 67 Program Contact(s): Don Buckhout, 651‐296‐0768, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date:

Workshops and Grants for the N&E Metro Groundwater Management Area: For a workshop for public works professionals or other local officials that promote landscape best management practices that keep water on the land, including rain gardens, within the North and East Metro Groundwater Management Area and for grants to local units of government in the North and East Metro Groundwater Management Area to keep water on the land.

FY10‐17 Clean Water Funds = $.010 M

These funds have been used to sponsor 3 UofM Extension workshops in the North and East Metro Groundwater Management Area for local officials to promote groundwater protection. In addition, these funds have been used to partially fund a grant supporting stormwater reuse in the N&E Metro Groundwater Management Area.

FY 18‐19 Program Description: NA Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total



Water Funds)

0 0 0 0 0

Funding and FTE notes: N/A Funding direction and FTEs for FY18‐19: N/A Long‐term funding vision (until 2034 and beyond): N/A Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

CWF – Met Council $0.55M $0.55M

CWF ‐ MDH $0.3M $0.3M

Funding notes: This was a one‐time funding stream with a specific purpose

Supplement versus substitute: N/A If applicable – statutory citation that guides program activities: Additional Information: Contact Don Buckhout at BWSR. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


N/A N/A $0.1M (100%)

N/A $0.1M

Entities

N/A N/A

University of Minnesota Extension, Local Government N/A

Approximate number of

grants/contracts N/A N/A 3 N/A 3

2/23/16

Local Water Management Plan “Bonanza Valley and Straight River Groundwater Management Area”

Agency: Board of Water and Soil Resources (BWSR) Category: Nonpoint Source Implementation Program Number: 66 Program Contact(s): Don Buckhout, 651‐296‐0768, [email protected] Person filling out form: Marcey Westrick Program Description and Outcomes to Date: Bonanza Valley and Straight River Groundwater Management Area: To collaborate with the commissioner of health and local units of government in the Bonanza Valley Groundwater Management Area and Straight River Groundwater Management Area through development or implementation of local water management plans, to identify strategies for groundwater protection and potential locations for infiltration projects and practices, including potential wetland restoration, enhancement, or creation that would contribute to groundwater recharge and wellhead protection. Areas in the Mississippi River flyway, or that also provide habitat for waterfowl production, fish spawning, or other fish or wildlife habitat, should be specifically identified. FY10‐17 Clean Water Funds = $.025M

These funds have been used to fund the 1W1P pilot in the North Fork Crow Watershed, which includes most of the Bonanza Valley Groundwater Management Area (GWMA) and to provide a grant to local governments in the Straight River Groundwater Management Area to implement groundwater protection practices by agricultural producers and irrigators. Also used to partially fund Groundwater Coordinator position to support DNR Groundwater Management Area Plans in the Bonanza Valley and Straight River GWMA.

In FY16/17, there were no dollars appropriated for this program.


FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total



Water Funds)

0 0 .2 0

Funding and FTE notes: A Groundwater Management Area Project Coordinator was partially funded out of this appropriation Funding direction and FTEs for FY18‐19: N/A. Long‐term funding vision (until 2034 and beyond): N/A

Other funds used to support this program

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

CWF –MDH NA NA $.03M NA $0.3M

Funding notes: This was a one‐time funding stream with a specific purpose. Supplement versus substitute: N/A Additional Information: Contact Don Buckhout at BWSR. Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total


N/A N/A $215,000 (86%)

N/A $215,000

Entities N/A N/A

Local Governments N/A

Approximate number of grants N/A N/A 2 N/A 2

3/23/16

Legacy Website Agency: Legislative Coordinating Commission (LCC) Category: Legislative Activity Number: 63 Program Contact(s): Greg Hubinger, 651‐296‐2963, [email protected] Sally Olson, 651‐296‐9002, [email protected] Person filling out form: Sally Olson Program Description and Outcomes to Date: Legacy Website: The LCC has been tasked with developing and maintaining a website that shows how revenues generated by the Legacy Amendment and the Environment and Natural Resources Trust Fund are utilized. The website was required in 2009 session laws, chapter 172, and codified in Minnesota Statutes 3.303, Subdivision 10. The Legacy website can be accessed at: www.legacy.leg.mn FY10‐17 Clean Water Funds = $68,000

The LCC developed and continues to maintain the Legacy website that displays information specified in Minn. Stat. 3.303, Subdivision 10 relating to projects funded with legacy or environment and natural resources trust fund dollars. The website currently contains information on over 14,000 projects.

In FY 16‐17 the LCC will be adding interactive infographics to the website that will display the appropriations from each fund to each agency as well as infographics that will display the total appropriations allocated to each agency.

FY 18‐19 Program Description: Legacy Website: Basic maintenance and general upgrades to the website and underlying database. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $25,000 $13,000 $30,000 0 $68,000


Water Funds)

0 0 0 0

Funding and FTE notes: Each of the four legacy funds and the environment and natural resources trust fund have contributed to the costs for the development and maintenance of the website. Legacy fund liabilities are shared proportionately by the funds, based on their participation in the 3/8ths of one percent sales tax. LCC staffing costs are absorbed within their existing General Fund appropriation. More about this Program: The LCC contracted with a website/database consulting firm to build and maintain the Legacy website. State agencies receiving legacy and environment and natural resources trust fund appropriations provide the statutorily required data that is displayed on the website. The LCC also developed an API, which permits agencies to import data from their databases directly to the website. Agencies can also enter project data through an on‐line data entry form. LCC staff provide technical support to the approximately 20 state agencies that report project data.

Since the website was initially developed in 2010 upgrades have included: an updated reporting structure, design enhancements, the addition of a mobile theme, and the addition of an interactive project map. Funding direction and FTEs for FY18‐19: The LCC anticipates requesting approximately $15,000 from the Clean Water Fund to upgrade the website’s content management system and for general website maintenance. Long‐term funding vision (until 2034 and beyond): It is likely the LCC will need Clean Water Funds on an ongoing basis for basic maintenance and general upgrades to the database and website. Other funds used to support this program:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Arts & Cultural Heritage Fund

$20,000 $8,000 $18,000 0 $46,000

Outdoor Heritage Fund

$25,000 $13,000 $30,000 0 $68,000

Parks & Trails Fund $15,000 $7,000 $13,000 0 $35,000

Environment & Natural Resources

Trust Fund

0 $3,000 $9,000 0 $12,000

General Fund $15,000 $15,000 $15,000 $15,000 $60,000

Funding notes: General fund dollars estimated based on the percentage of LCC staff time allocated to the website. Supplement versus substitute: NA If applicable – statutory citation that guides program activities: Minn. Stat. 3.303, Subdivision 10 Additional Information (Add links and contact information for your program): Contact Sally Olson at the LCC. Minnesota’s Legacy website is available at http://www.legacy.leg.mn/ . More information about the statutory requirements for the website can be found at https://www.revisor.mn.gov/statutes/?id=3.303 Clean Water Fund pass‐through dollars: NA

6/3/16

Stormwater BMP Performance Evaluation and Technology Transfer Agency: University of Minnesota, Water Resources Center Category: Applied Research and Tool Development Programs Program Number: 82B Program Contact(s): Jeffrey Peterson, 612‐624‐3963, [email protected] Person filling out form: John Gulliver, 612‐625‐4080, [email protected] Program Description and Outcomes to Date: In accordance with the Clean Water Fund appropriation, the MPCA has engaged researchers at the University of Minnesota to develop a research program that addresses priority needs, including: a Stormwater Research Roadmap and Framework for priority needs for the next decade, evaluating the bioavailability of Polycyclic Aromatic Hydrocarbons in stormwater ponds, phosphorus dynamics in stormwater ponds, and a knowledge and technology transfer program to disseminate the results of this research. Current fiscal year 2016 activities include: • Development of the Scope of Work and Project Work Plan for the University’s research and associated contracting activities •Completion of Scope of Work, Project Work Plan, and contract finalization. • The contract with the MPCA was signed April 10, 2016. Fiscal year 2016 and 2017 activities include or will include: •Development of an actionable stormwater research strategy/roadmap for the State for the next decade, • Conducting research to identify major sources of PAH contamination to stormwater detention pond sediments in the metro and outstate areas with particular attention paid to soil reference values and bioavailability., • Conducting research to develop an understanding of the processes controlling export or retention of P in stormwater ponds, and • Disseminate the results of the research conducted under Objectives 2 and 3, and other related research and findings to practitioners, local governmental units, agencies, and other stakeholders through education, training, and outreach. FY 18‐19 Program Description: Continued stormwater research funding is necessary to address a backlog of research needs. A continuing needs for approximately $1.5 million per biennium is estimated. The results of the research strategy/roadmap process will identify research priority needs and provide a process for continually updating the list of priority needs. For example, much of the 2016‐17 activity is on how and when to schedule maintenance dredging on stormwater ponds, specifically with regard to phosphorus release and PAH contamination in pond sediments. A few stormwater ponds will have been sampled to assess the character of PAH contamination and phosphorus dynamics. However, sampling and assessment of more ponds is needed to develop tools and guidelines that can be used by public agencies to perform a relatively simple assessment on 30,000 ponds. Expanding the sampling and assessment and the eventual development of tools and guidelines is a strong need for the FY 18‐19 biennium. Other priority needs will also be funded. They will depend upon the priorities established in the research strategy/roadmap process. The dissemination activities for the results of the research will continue as in FY 16‐17.

Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds $550,000 $550,000


Water Funds)

0 0

Funding and FTE notes: FY 16‐17 funds are passed‐through the MPCA to the University of Minnesota. Funding direction and FTEs for FY18: For FY 18‐19, we propose an increase of funding to $1,500,000 to provide the tools and guidelines mentioned under FY 18‐19 Program Description and to expand the research program. The needs are great. The FTEs will be similar to FY 16‐17. Long‐term funding vision: Cities, counties, watershed control districts, etc. are continually required to meet more stringent stormwater quality requirements, and are asking for guidance to help them meet these requirements. The development of these guidance procedures requires research, and the University of Minnesota has met some, but not all, of these requests. Our long‐term funding vision is to continue to meet these requests, in an order and priority determined by reviewing the Stormwater Research Roadmap. Funding notes: FY 16‐17 funds are passed‐through the MPCA to the University of Minnesota. Supplement versus substitute: N/A If applicable – statutory citation that guides program activities: (i) $275,000 the first year and $275,000 the second year are for a storm water best management practice performance evaluation and technology transfer program to enhance data and information management of storm water best management practices; evaluate best management performance and effectiveness to support meeting total maximum daily loads; develop standards and incorporate state of the art guidance using minimal impact design standards as the model; and implement a knowledge and technology transfer system across local government, industry, and regulatory sectors for pass‐through to the University of Minnesota. This appropriation is available until June 30, 2018. Additional Information: N/A Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

University of Minnesota

$550,000 $550,000


1 1

2/26/16

Stormwater BMP Performance Evaluation and Technology Transfer Agency: Pollution Control Agency Category: Applied Research and Tool Development Programs Program Number: 82 Program Contact(s): Marni Karnowski, 651‐757‐2495, [email protected] Person filling out form: Ryan Anderson, 651‐757‐2222, [email protected] Program Description and Outcomes to Date: In accordance with the Clean Water Fund appropriation, the MPCA has engaged researchers at the University of Minnesota to develop a research program that addresses priority needs, including: a Stormwater Research Roadmap and Framework for priority needs for the next decade, evaluating the bioavailability of Polycyclic Aromatic Hydrocarbons in stormwater ponds, phosphorus dynamics in stormwater ponds, and a knowledge and technology transfer program to disseminate the results of this research. Current fiscal year 2016 activities include: • Development of the Scope of Work and Project Work Plan for the University’s research and associated contracting activities Fiscal year 2016 and 2017 activities include or will include: •Completion of Scope of Work, Project Work Plan, and contract finalization. •Development of Stormwater Research Roadmap, conducting research on Polycyclic Aromatic Hydrocarbons (PAHs) in stormwater ponds, conducting research on phosphorus cycling in stormwater ponds, and developing a knowledge and technology transfer system to communicate the results. FY 18‐19 Program Description: The MPCA will not be asking for additional funding for this work for FY 18‐19. The University of Minnesota staff will determine if they wish to pursue additional direct funding. Funding information:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

Clean Water Funds 550,000


Water Funds)

0

Funding and FTE notes: These funds are pass‐through funds to the University of Minnesota; MPCA staff are not funded from this appropriation. Funding direction and FTEs for FY18: N/A Long‐term funding vision: N/A Funding notes: These funds are pass‐through funds to the University of Minnesota.

Supplement versus substitute: This is a one‐time appropriation from the Clean Water Fund; the MPCA would not be engaging the University to conduct this research without this appropriation. If applicable – statutory citation that guides program activities: (i) $275,000 the first year and $275,000 the second year are for a storm water best management practice performance evaluation and technology transfer program to enhance data and information management of storm water best management practices; evaluate best management performance and effectiveness to support meeting total maximum daily loads; develop standards and incorporate state of the art guidance using minimal impact design standards as the model; and implement a knowledge and technology transfer system across local government, industry, and regulatory sectors for pass‐through to the University of Minnesota. This appropriation is available until June 30, 2018. Additional Information: N/A Clean Water Fund pass‐through dollars:

FY10‐11 FY12‐13 FY14‐15 FY16‐17 Total

University of Minnesota

$550,000


1

MMB Guidance to Agencies on Legacy Fund Expenditure

1

Executive Summary

Background: Laws of Minnesota 2011, First Special Session, Chapter 6, Article 5, Section 9 requires that “the commissioner of management and budget shall finalize guidance and best practices to assist state agencies in uniformly accounting for their expenditure of legacy funds.” The need for this guidance arose, in part, from agencies’ confusion about how to comply with the requirement that legacy fund expenditures be “direct and necessary for a specific appropriation.” Some agencies have interpreted the requirement to mean that they must exclude legacy funds from their indirect cost allocations, thereby subsidizing the administration of legacy funds programs with other state dollars.

Key Points: Agencies are responsible for the efficient and appropriate use of legacy dollars. In MMB’s view, the “direct and necessary” requirement is intended to promote efficient and effective use of legacy fund dollars to maximize program dollars and subsequent outcomes for all Minnesotans. This goal is not unique to legacy fund dollars: efficient administration should be a goal with all state spending. The concept of “direct and necessary” is similar to the federal concept of needed, reasonable, and consistent, which guides states’ use of federal dollars. Ultimately, agencies are responsible for the efficient and appropriate use of legacy dollars, as well as documenting and defending their legacy fund expenditure. State law and policy require all state funds pay their fair share of administrative costs. MS 16A.127, Subd. 3 and MMB policy require agencies to reimburse the general fund for all statewide indirect costs, and for the portion of agency indirect costs attributable to recoveries of general fund expenditures. It is reasonable and appropriate to expect the legacy funds to pay for the administration of legacy fund programs, rather than subsidizing said programs with other state dollars. Additionally, federal rules require indirect costs be allocated uniformly. If the legacy funds were excluded from an agency’s indirect cost allocation while federal funds were included, the agency is possibly in violation of said rules, and could be at risk of losing their federal funding. The “direct and necessary” requirement does not prohibit the use of indirect cost billing for necessary administrative costs when that is the most efficient mechanism. An example of a necessary administrative cost that is not amenable to direct billing is photocopies. In order to direct bill photocopies to a particular program or fund, tracking hardware would need to be installed on all copiers, staff would need to enter the correct code during each use, as well as aggregate and bill total copying charges at the end of the period. While such a system would provide a clear tie to how many copies were produced for a particular legacy fund, it would cost both time and money to implement, operate, and maintain such a system. In this example, the most efficient billing method is an indirect allocation. In general, direct billing is the preferred method provided it is the most efficient; if not, an indirect allocation should be used.

Agencies can use federal policy as a guide for understanding allowable legacy fund expenditure. Agencies can use Federal OMB Circular A-87, Attachment B, for further guidance on allowable legacy fund expenditures as well as federal requirements on indirect cost allocation plans. This policy provides a time-tested and generally accepted standard for understanding allowable costs. OMB Circular A-87, Attachment B lays out several types of costs and the extent to which they are allowable. The main driver of an allowable cost is whether it is necessary for the particular award, just as legacy fund allowable costs should be necessary for the legacy programs they are supporting.


2

Laws of Minnesota 2011, First Special Session, Chapter 6, Article 5, Section 9 requires that “the commissioner of management and budget shall finalize guidance and best practices to assist state agencies in uniformly accounting for their expenditure of legacy funds. The commissioner shall make this information available to all state agencies identified in this act.” The following accounting guidance is provided in compliance with this requirement.

This guidance also addresses questions about allowable administrative costs in light of the Office of the Legislative Auditor’s (OLA’s) recommendation in their November 2011 Legacy Amendment Evaluation Report that Minnesota Management and Budget (MMB) “should develop policies on allowable administrative costs for programs, projects and activities supported with money from legacy funds.”1 The OLA further stated that what is needed is a framework of principles, policies, and procedures. They specifically suggest that MMB follow the process used by the Department of Administration, Office of Grants Management, in developing standard grants management policies and procedures. MMB agreed with this recommendation and worked with agencies to develop this guidance to address the concerns of the OLA, the legislature, agencies, and constituents. We engaged agencies in creating this document by gathering information on current practices and areas of concern, convening interagency discussions on the most relevant topics, and asking for feedback on guidance drafts.

Agencies and sub-grantees that have received legacy fund appropriations have expressed confusion about how to comply with legal requirements intended to minimize the use of legacy dollars for administrative purposes. Current law requires that all legacy fund expenditure be “direct and necessary for” the specific appropriation. Part of agencies’ confusion comes from the use of the word “direct” as part of this requirement. A direct expenditure is a well-defined and commonly used accounting term that describes how expenditures are billed and tracked. The terms “direct” and “indirect” describe different billing mechanisms, and do not refer to the nature of the expense. For example, rental cost can be either direct billed or indirectly allocated. Some agencies have interpreted the “direct and necessary for” requirement to mean that they must exclude legacy funds from their indirect cost allocations. These agencies have consequently subsidized legacy fund programs with general funds or other state dollars.

In MMB’s view, the “direct and necessary” requirement is intended to promote efficient and effective use of legacy fund dollars: The language clearly implies the need for agencies to document and defend their legacy fund expenditure as needed, reasonable, consistently applied, and rationally allocated. However, it should not prohibit the use of indirect cost billing for necessary administrative costs when that is the most efficient mechanism, nor does it require agencies or sub-grantees to subsidize administrative costs associated with legacy fund programs with other sources of funding. It is reasonable to expect legacy fund programs to pay their fair share – and only their fair share – of agency administrative costs.

1 Minnesota Office of the Legislative Auditor, Program Evaluation Division, The Legacy Amendment Evaluation Report, November 30th, 2011. Page 57.


3

Background on Legacy Fund Use Restrictions

Administrative costs are part of the cost of doing business for all organizations, whether they are in the public, non-profit, and private sectors. Since the passing of the legacy amendment in 2008 and its subsequent implementation, the legislature has tried to limit the use of legacy funds for administrative expenses. This goal is not unique to legacy fund dollars: efficient administration should be a goal with all state spending, so that on-the-ground program dollars can be maximized.

The term “administrative costs” is not a universally defined accounting term. It is difficult to universally define the term “administrative costs,” because the nature of a cost depends on its context. For example, legal services may be considered an administrative cost in many instances, but these services would be a program cost in the case of a public defenders program. Although there are always exceptions, common examples of administrative costs include:2

• Accounting and Financial Services • Clerical Support • Executive Personal (such as Commissioners) • Facilities Management • General Office Equipment and Supplies • Human Resources • Information Technology • Insurance • Legal Services • Purchasing • Rent / Lease • Security

The legislature has used different approaches to try to limit agency and sub-grantee use of legacy funds for administrative costs. In 2009 and 2010, the legislature placed percentage caps on administrative expenses in select appropriations. For example, in 2009 the legislature appropriated $4 million dollars in Outdoor Heritage Fund money to the Department of Natural Resources (DNR) for a conservation partners grant program. Up to 6.5% of this appropriation could be used by DNR for their administration of the grant. In the same year, recipients of Arts and Cultural Heritage Funds such as the Department of Education, Minnesota Historical Society, and the Department of Administration, were limited to using up to 2.5% of their grant appropriations for administration of those grants. For those appropriations that have percentage caps in place, agencies are responsible for defining the range of their administrative expenses, working within the percentage cap, and defending their use of funds to internal and external stakeholders, including auditors, the legislature, and the public.

2 A very similar list also appears in the Office of the Legislative Auditor’s November 2011 Legacy Amendment Program Evaluation Report cited above. Page 53.


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During the 2011 legislative session, the legislature changed its approach to limiting the use of legacy funds on administration in a way that provides more flexibility for agencies. Instead of using percentage caps, the legislature required that legacy fund expenditure must be “direct and necessary for” the specific appropriation. Each article in the 2011 legacy fund bill includes the following language: “Money appropriated in this article may not be spent on activities unless they are directly related to and necessary for a specific appropriation. Money appropriated in this article may not be spent on indirect costs or other institutional overhead charges that are not directly related to and necessary for a specific appropriation.” This “direct and necessary for” requirement gives agencies increased flexibility in their use of legacy fund dollars for administration relative to the percentage cap approach. However, this requirement has caused confusion and concern amongst legacy fund recipients about how to comply with the law, and what expenditures are allowable.

The section below provides a conceptual framework for understanding allowable legacy fund costs.

Principles for Guiding Allowable Costs

The concept of “direct and necessary” is similar to the federal concept of needed, reasonable, and consistent, which guides states’ use of federal dollars. The principles and guidelines outlined in this section are the basis for well-established federal policy that places the burden for responsible, efficient, and appropriate use of federal money on the agencies that receive those federal funds. These principles are useful as a framework for understanding allowable expenditure for legacy and other state funds, because they are designed to hold the agency accountable while still allowing needed flexibility for organizational diversity in mission and structure. These principles apply to both administrative and program costs, and whether they are treated as direct or indirect expenditures.

The three basic premises can be used as the foundation for determining allowable expenditures of legacy funds:

1. Agencies and organizations are responsible for spending legacy fund dollars in a way that is consistent with the specific appropriation or agreement.

2. Agencies or organizations receiving legacy fund dollars are responsible for the efficient and effective use of those dollars.

3. Agencies and organizations have responsibility for employing whatever form of organization and management techniques may be necessary for the efficient and reasonable administration of legacy funds given their unique staff, facilities, and background.

Implicit in these premises is the assumption that state agencies are capable of administering funds efficiently and effectively to the terms specified in the award, given their particular circumstances. Federal policies allow states the flexibility to determine both their direct and indirect costs, including administrative costs. State agencies are able to allocate those costs to their federal awards as long as the costs meet certain basic criteria. Similarly, state agencies need flexibility in determining their direct and indirect costs, and allocating those costs to the legacy funds, as long as those costs meet basic criteria. These same principles also apply to all other state funds, including other constitutionally designated funds.


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These basic principles apply to all recipients of legacy funds, including agencies, grantees, sub-grantees, and contractors. Legacy grant recipients are responsible for the appropriate use of legacy dollars, just as state agencies are responsible for their use of funds. State agencies that administer legacy grants are also responsible for overseeing the grantee’s use of those dollars.

Legacy fund recipients should consider the guidelines presented in this section in determining whether or not a legacy fund expenditure is allowable.

a) Need and Reasonableness

Legacy fund recipients should consider both need and reasonableness in determining if a specific legacy fund expenditure is allowable. A cost is reasonable if it is generally considered to be ordinary, logical, and proper for the efficient administration of the legacy fund award. The cost should not exceed that which would be incurred by a prudent person, in either its nature or amount, at the time that the expenditure is made. Prices for goods and services should be consistent with fair market value prices, and administration costs should be consistent with the legacy fund recipients’ responsibility to act efficiently and effectively with state funds.

The particulars of what is considered needed and reasonable will vary greatly depending on the particular legacy fund, the agency, and the appropriation purpose. For example, booking an art gallery for an art exhibit may be considered a needed and reasonable expenditure for an Arts and Cultural Heritage appropriation supporting visual artists in Minnesota. However, booking that same art gallery for an employee recognition function would not be a necessary and reasonable expenditure as part of a Parks and Trails Fund appropriation to support local parks and trails.

Legacy fund recipients must use their best judgment and adopt a prudent mindset when considering what expenditures are both needed and reasonable for a particular legacy fund award, given the particular situation of the organization and appropriation. Agencies and sub-grantees should be prepared to defend their legacy expenditures to legislators, internal and external auditors, stakeholders, and the public.

b) Consistency

Legacy fund recipients should give expenditures consistent treatment within a legacy fund award. Recipients should refer to the same governing logic in charging and categorizing expenditures throughout the life of an appropriation or grant.

Legacy fund expenditures should be determined in accordance with generally accepted accounting principles, and tracked according to Minnesota accounting policies and procedures. Such policies and procedures are in place to ensure the consistent treatment of all state expenditure, including legacy fund expenditure. Furthermore, a cost should not be categorized as a direct expenditure to a project if a cost of the same purpose and in similar circumstances has been allocated to the award as an indirect expenditure. For example, rent could be categorized as a direct or an indirect expenditure, but not as both simultaneously.

Agencies and sub-grantees should be prepared to defend their expenditures to legislators, internal and external auditors, stakeholders, and the public.


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c) Adequately Documented

Legacy fund recipients are responsible for developing and maintaining adequate documentation of their legacy fund expenditures. While the means and processes of this documentation can and should vary by organization, the resulting documentation should be sufficient to show that the need and reasonableness and consistent use criteria have been met. At a minimum, legacy fund recipients should be prepared to demonstrate to an outside party that they have a logical system in place for determining legacy fund expenditures, and that the system has been consistently applied within the organization.

d) Rationally Allocated

Legacy fund expenditures should be clearly allocable to the program. Either they should be allowable direct expenditures, as determined by the principles provided above, or they should be an allocable amount of the agencies indirect costs. Activities that benefit from either agency or statewide indirect costs will receive an appropriate allocation of those costs.

Legacy fund recipients have raised questions regarding what indirect costs can be considered “direct and necessary for” legacy fund appropriations and awards. By definition, an indirect cost cannot also be a direct cost of a program. However, indirect costs are necessary for the administration of state funds. Indirect costs can therefore be allocated to the legacy funds, just as they are to all other state funds.

The allocation of agency indirect costs to the legacy funds should meet the same basic criteria outlined above of being needed and reasonable, consistently applied, and adequately documented. Further exploration of the nature and proper allocation of direct and indirect costs is provided in the next section of this guidance document.

TYPES OF ALLOWABLE COSTS

Agencies can use Federal OMB Circular A-87, Attachment B, for further guidance on allowable legacy fund expenditures. This policy provides a time-tested and generally accepted standard for understanding allowable costs.

OMB Circular A-87, Attachment B is not meant to be exhaustive, but it lays out several types of costs and the extent to which they are allowable. The main driver of an allowable cost is that is be necessary for the particular award, just as legacy fund allowable costs should be necessary for the legacy programs they are supporting. Some types of costs are not allowable, because they are never viewed as necessary, such as the cost of alcoholic beverages, staff entertainment, lobbying, or fundraising. Other types of costs – whether they are public relations costs, meetings, audit costs, bonding, legal costs, travel, etc, -- should be judged based on their need and reasonableness for the specific program. It is not possible to anticipate every type of cost that might arise for the variety of agencies and organizations that administer legacy funds in order to say explicitly whether or not they are allowable, so staff should use their best judgment. Necessary expenditures can be treated as either direct or indirect costs.


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OMB Circular A-87, Attachment B provides guidance on several issues that have also been raised with regards to the legacy funds. For example, staff compensation costs including wages, salaries, and fringe benefits are allowable to the extent that they meet the criteria outlined above, and they are consistent with the amount paid for similar government work in other programs.

Employee benefits such as the cost of leave, employee insurance, pensions, and unemployment are allowable to the extent that they are reasonable and required by law, policy, or government-unit employee agreement.

Employee benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as sick leave, holidays, court leave, military leave, and other similar benefits are allowed if they are established in written leave policies, the cost is equitably allocated to all related activities, including legacy programs, and the accounting basis for each type of leave is consistently followed by the government unit.

Staff costs charged to legacy funds can include all levels of staffing, including managerial staff, as long as those costs are reasonably and equitably allocated. The amount of staff compensation charged to legacy funds for wages, salary, and benefits should be reflective of their workload on legacy projects. Agencies should have checks in place to ensure that legacy funds – and all other state funds – are charged in a way that accurately reflects actual employee time. This could include staff tracking their actual time spent on legacy programs on an on-going basis, or allocating cost according to staff position descriptions. If an agency does not have a personnel time report system that can handle actual hours, a reasonable percentage of time spent on legacy activities approach could be used, and the percentage used for individual programs should be checked at least quarterly to be sure that it is accurate. If there are discrepancies found, the agencies should complete expenditure corrections and adjust position descriptions accordingly. Agencies should implement the system that is most efficient and effective for them.

Other staff costs, such as insurance and unemployment, should be considered on a case-by-case basis and should be handled in a way that the agency considers logical and defensible. Agencies can consult OMB Circular A-87, Attachment B for further guidance on allowable legacy fund expenditures.

LEGACY FUNDS AND INDIRECT COSTS

Much of the confusion surrounding the “direct and necessary for” requirement comes from the use of the word “direct.” “Direct” is a well-defined and commonly used accounting term, referring to direct vs. indirect cost charges. Direct expenditures are those that can be identified specifically with a particular final cost objective, whereas indirect costs are those general support costs that cannot reasonably be directly charged to an agency, program, appropriation or program. “Direct” and “indirect” describe to how expenditure is treated and tracked, not to the nature of the expense. Some administrative costs can be treated either as direct or indirect cost. For example, rent may be direct billed to a program or included in an agency’s indirect cost allocation. Regardless of whether it is treated as a direct or indirect cost, the nature and necessity of the rental cost remains the same.

Agencies face a trade-off between transparency and efficiency when determining what costs to direct bill and what costs to include in an indirect cost allocation plan. Direct billing is more transparent, but often


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more administratively burdensome than an indirect cost allocation. For example, direct billing photocopies to a particular program or fund would require that hardware be installed on all copiers so that individual copies could be tracked to programs or appropriations. Staff would then need to enter the appropriate code when using the copier, and then aggregate and bill total copying charges at the end of the period. Such a system would show a clear tie between the number of copies and the amount billed to each fund. However, this system would require more time and money to implement, operate, maintain and report, and therefore, would be less efficient than including copies and printing costs in the agency’s indirect cost allocation. If these costs were included in an indirect cost plan, agency financial staff would be responsible for allocating the total cost of copies across programs and funding sources in a way that they believe is fair and equitable. Staff would also be responsible for documenting and justifying their indirect cost plan to both internal and external stakeholders. Agencies should use indirect billing methods when there are efficiencies to be gained and administrative costs are kept low. In many cases, agencies might consider their current indirect rates to be the most efficient option.

Some agencies may choose to move some costs to direct billing in response to receiving legacy funds if they wish. For example, some IT costs that are frequently included in indirect cost allocations, such as network connections, hardware, and e-mail service, could potentially be removed from the indirect cost allocation and direct billed to legacy programs, in order to show clear connection between legacy fund spending and need. However, moving entirely to direct billing would not be efficient for many organizations, and therefore would not be consistent with the need to keep administrative costs down. It is not necessary or desirable for agencies to move entirely to direct billing in order to comply with the “direct and necessary for” requirement. Instead, legacy fund recipients are responsible for finding a balance between direct billing and indirect cost allocation that they believe is efficient, logical, and defensible given their particular circumstances, resources, and constraints.

In those cases where agencies have an indirect cost plan in place, legacy funds should be included in that indirect cost allocation. MS16A.127, Subd. 3 and MMB policy require that agencies reimburse the general fund for all statewide indirect costs, and for the portion of agency indirect costs attributable to recoveries of general fund expenditures. This law and policy is based on the principle that it is reasonable and appropriate for all state funds to pay their fair share of administrative costs. We believe that this applies to the legacy funds just as it applies to all other state funds. Furthermore, federal policy requires that indirect costs be allocated uniformly across state and federal funds, so that the resulting indirect rate is equitable. If the legacy funds were excluded from the allocation, it would result in a higher indirect rate for those funds that were included. Federal policy prohibits federal funds from subsidizing state funding via higher indirect cost rates. Therefore, agencies that exclude legacy funds from their indirect cost allocation are possibly in violation of federal rules, and could be at risk of losing their federal funding awards. Other state funds would also be subsidizing legacy fund programing if legacy funds were excluded from the allocation. Agencies should document and be willing to defend how they allocate their indirect costs in general, and how they allocate indirect cost to the legacy funds in particular.


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a. General Indirect Cost Rates

When the agency or organization’s major functions benefit from indirect costs to approximately the same degree, the allocation of indirect costs can be achieved through one rate, by classifying the agency’s total cost as either direct or indirect, and 2) dividing the total indirect cost pool by an equitable distribution base. The resulting rate can be used to distribute indirect cost across funds and programs, including legacy programs.

b. Multiple Indirect Cost Rates

When major functions within an agency benefit from indirect costs to varying degrees, the indirect cost can be allocated into separate cost groupings. Indirect cost can then be allocated within individual cost groupings by a base that reflects the relative use and benefits. Each cost grouping should constitute a pool of like expenses in terms of the allocation base that best measures the relative benefits provided by each function. The number of different cost pools should be limited to what is practical. The base that is used when allocating costs within a cost pool should be based on actual conditions, depending on the benefits that each group receives.

Agencies that have multiple indirect cost groupings in place should aggregate legacy funds across those cost grouping in a way that they feel is most defensible based on their function, so that the resulting indirect cost allocations are appropriate. Legacy award should not necessarily be included in the same cost grouping because they are funded by legacy dollars: they should be grouped by major function.

c. Special Indirect Rates

In some cases, a single indirect rate for an agency or organization or a rate for each major function of the agency may not be appropriate. There may be factors which may substantially affect the indirect costs applicable to a particular program or group of programs. Such factors may include: the physical location of the work, the level of administrative support required, the nature of the resources that are used, the organizational structure used, or some combination of factors. When an award or group of award is carried out in a way that generates significantly different indirect costs, then agencies should use a separate indirect cost pool for those awards, provided that the resulting indirect cost rate is significantly different from other rates at the agency, and the award or awards are material in amount.

Any special indirect cost rates used for a legacy award or legacy awards should be based on the same indirect cost factors described above of location, administrative support, and resources. That is, legacy funds should only be granted special indirect cost rates when merited by substantive differences in cost, just like any other state or federal award. Legacy funds should not necessarily be granted special rates because they are legacy funds. It is appropriate for legacy funds to pay indirect rates based on their actual costs.

d. Statewide Indirect Costs

MS16A.127 defines both statewide and agency indirect costs. Statewide indirect costs refer to all general fund expenditures made by any state agency attributable to providing general support services to any other state agency. For example, the cost of the statewide accounting system and financial support to agencies provided by MMB, as well as the building maintenance services as provided by the Department


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of Administration are all part of statewide indirect costs. These costs are part of the full cost of doing business. State programs cannot function, for example, without the presence of the state accounting system.

MS16A.127 charges MMB with calculating and allocating statewide indirect costs in a fair and equitable manner. Agencies are then responsible for reimbursing the general fund for the portion of their indirect cost attributable to non-general funds. It is through this process that non-general funds pay for a “fair share” of the cost of statewide administrative services. In the absence of this process, the general fund would be made primarily responsible for the administrative costs of non-general fund programs, therefore, putting the general fund in the position of subsidizing the costs associated with other funds.

MS16A. 127 does allow MMB to issue waivers from the reimbursement requirement of statewide indirect costs in particular circumstances. The circumstances in which a waiver can be granted are limited because such a waiver leaves other state funds responsible for paying that portion of the agencies’ indirect costs.

MMB has granted some legacy funds a waiver from paying statewide indirect in the past, where specifically prohibited by law. Outdoor Heritage appropriations from 2010 were granted a waiver based on the requirement in Laws of MN 2010, Chapter 261, Article 1, Section 2, Subd. 7, that “money appropriated in this section must not be spent on indirect costs or other institutional overhead charges.” This language clearly exempts the Outdoor Heritage Fund from paying indirect costs in this year, such that it should not reimburse the general fund for the cost administering Outdoor Heritage projects.

MMB does not consider the direct and necessary language sufficient to require a waiver from statewide indirect costs. If the legislature would like to exempt the legacy funds from paying statewide indirect costs, they should clearly exempt them within the law. Agencies are expected to pay statewide indirect costs for their administration of legacy fund programs.

CONCLUSION

This guidance focuses on implementing the requirement that legacy fund expenditures be “direct and necessary for the specific appropriation.” This requirement is intended to ensure that agencies maximize program dollars and subsequent outcomes for all Minnesotans. However, this requirement does not prohibit agencies from paying for the full cost of administering legacy programs. Under law and state policy, all state funds, including the legacy funds, should pay their portion of administrative costs, and not be subsidized by the general fund or other dedicated funding sources. That is, the legacy funds can and should pay their fair share – and only their fair share -- of organizational costs. Rather than requiring agencies and organizations to subsidize their legacy funded programs with other funds, the “direct and necessary for” language requires that organizations adequately document and reasonably defend their legacy fund expenditures.


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APPENDIXES

Appendix 1: Examples on legal language that has placed limits on the use of legacy funds for administration:

Law Examples of Administrative Caps or Other Limits Laws of MN 2009, Chapter 172 Administrative percentage caps placed on specific appropriations, such

as:

Article 1, Section 2, Subd. 2b, to DNR for the Green Corridor Legacy Program: “No more than 5% of this appropriation may be spent on professional services directly related to this appropriation’s purposes.”

Article 2, Section 6(a), to BWSR for the Conservation Easements RIM Program: “Up to five percent may be used for administration of this program.”

Article 2, Section 6(b) and 6(c), to BWSR for grants to local watershed districts: “Up to five percent may be used for administering the grants.”

Article 3, Section 2, Subd. 2(d), to DNR for grants to parks and trails of regional significance: “Up to 2.5 percent of this appropriation may be used for administering the grants.

Article 4, Section 2, Subd. 2(b)(4), to the State Arts Board for grants: “Up to three percent of the money to administer grant programs, deliver technical services, provide fiscal oversight for the statewide system, and to ensure accountability of the state’s resources.”

Laws of MN 2010, Chapter 361 Further limits placed on the use of Outdoor Heritage Funds for “indirect and institutional overhead” charges. Article 1, Section 2, Subd. 7 states of the Outdoor Heritage appropriations in this year that “money appropriated in this section may not be spent on activities unless they are directly related to and necessary for the specific appropriation. Money appropriated in this section must not be spent on indirect costs or other institutional overhead charges.”

Additional Clean Water Fund appropriations to BWSR included 5% caps on administrative expenses, just as they were included on a number of the agencies 2009 appropriations.

Laws of MN 2011, Special Session 1, Chapter 6

Language limiting the use of legacy funds for administrative change to the requirement that all expenditure from all four legacy funds be “direct and necessary for a specific appropriation.” The full language is as follows: “Money appropriated in this article may not be spent on activities unless they are directly related to and necessary for a specific appropriation. Money appropriated in this article may not be spent on indirect costs or other institutional overhead charges that are not directly related to and necessary for a specific appropriation.”


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Appendix II: Indirect Cost Calculations

Agencies are not required to us an indirect cost allocation. However, where applicable, state and federal policy requires that indirect costs be allocated out across all funds, so that the resulting indirect cost rate is equitable. If an agency that has an indirect cost plan in place chooses to exclude legacy funds from the cost allocation, they would be in violation of both federal and state policy requiring all funds to pay their fair share – and only their fair share – of agency costs.

Agencies that have indirect cost plans in place should include necessary legacy fund shared administrative costs in their indirect cost allocation.

1. “Indirect cost rate proposal” means the documentation prepared by a government unit or subdivision thereof to substantiate its request for the establishment of an indirect cost rate. Federal and state policy require that this documentation contain:

I. A description of the indirect cost rate, including subsidiary work sheets and other relevant data, cross referenced and reconciled to the financial data.

II. A copy of the financial data (financial statements, comprehensive annual financial report, executive budgets, accounting reports, etc.) upon which the recovery rate is based.

III. An explanation of the direct base used to allocate agency indirect costs.

IV. A chart showing the organizational structure of the agency during the period for which the plan applies, along with a functional statement(s) noting the duties and/or responsibilities of all units that comprise the agency.

2. “Indirect Cost Rate” is a device for determining in a reasonable manner the proportion of indirect costs each program should bear. It is the ratio (expressed as a percentage) of the indirect costs to an indirect cost base.

3. “Indirect Cost Pool” is the accumulated costs that jointly benefit two or more programs or other cost objectives.

4. “Base” means the accumulated direct costs used to distribute indirect costs across the agency. Normally, this is either total direct salaries and wages or total direct costs less any extraordinary or distorting expenditures. The cost base selected should result in each award bearing a fair share of the indirect costs in a reasonable relation to the benefits received from the costs.

Indirect Cost Rate = Indirect Cost Pool / Base

Any exclusions from the base should be done to eliminate distorting expenditures, as stated in the definition. A common example of a distortionary expenditure would be pass-through grants, less the cost of


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administering those grants. Pass-through appropriations are distortionary because large portions of the money go out the door to other organizations. Some legacy dollars are appropriated to agencies like the DNR and Department of Administration for pass-through grants to other organizations, and therefore should be excluded from the indirect cost base. However, legacy dollars that are used for programs administer grants and agency programs should remain in the indirect cost base. Other examples of possible exclusions from the base include capital expenditures, payments to individuals, or any unallowable costs as discussed above.

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FINAL 1/25/16

Clean Water Council’s Guiding Principles and Funding Priorities for FY18‐19 Clean Water Funds

Minnesota State Constitution, Article XI, Sec. 15 The Clean Water Fund may be spent only to protect, enhance, and restore water quality in lakes, rivers, and streams and to protect groundwater from degradation, and at least five percent of the clean water fund must be spent only to protect drinking water sources. The dedicated money under this section must supplement traditional sources of funding for these purposes and may not be used as a substitute. Clean Water Fund dollars should be considered one‐time funding. Guiding Principles

Improve and protect water quality and preserve water quantity in accordance with state and federal laws, without substituting for traditional sources of funding.

Balance short‐term progress with the long‐term achievement of clean and sustainable water with a bias towards on‐the‐ground projects that have measurable outcomes.

Promote programs that demonstrate significant new progress towards clean and sustainable water resources.

Promote actions that protect groundwater quantity and quality particularly in vulnerable drinking water areas.

Consider whether funded programs and projects are cost effective, provide the greatest return on investment for ecosystem services, and how they fit into the entire need to reach clean and sustainable water.

Encourage activities that change individual and institutional behaviors on the landscape scale to accelerate water quality and quantity outcomes.

Support programs where agencies innovatively share results to accelerate the adoption of successful projects.

Promote agency coordination to efficiently utilize Clean Water Fund dollars.

Keep water where it falls by promoting water storage, retention, and infiltration where appropriate.

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Funding Priorities FY18‐19 Clean Water Funds will be prioritized for programs that:

Address point and nonpoint pollution source issues.

Measure outcomes.

Restore impaired waters and protect high quality waters.

Leverage other available funds.

Implement activities from completed Watershed Restoration and Protection Strategy (WRAPS), Total Maximum Daily Load (TMDL) Implementation Plans, Comprehensive Local Water Management Plans, or Groundwater Plans.

Target implementation activities through surface water and groundwater monitoring.

Implement the State’s Watershed Approach where deliverables contribute new, significant information to help achieve water quality and quantity goals.

Strengthen local capacity to support nonpoint source implementation activities.

Provide new enforcement of existing regulations that would achieve measurable water quality and quantity outcomes.

In order to comply with state water quality requirements, accelerate drinking water, wastewater, and stormwater infrastructure improvements that rank high on Project Priority Lists for the Drinking Water or Clean Water Revolving Loan Funds.

Have statewide benefits and applications.

Prioritize projects on private lands where low income is a barrier for implementation.

budget and outcomes committee (boc) meeting agenda · measures, results and accountability ... end...

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