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Delaware has affirmed that “clean water is essential to [its] future, its economy, its environment, and the health of its citizens.” Yet, state and local efforts to reduce water pollution have not kept pace with the need, and today more than 85% of Delaware’s waterways do not meet federal and state quality
standards. Further, the state has experienced more frequent and severe flood events over the last several decades, highlighting Delaware’s vulnerability to the damaging costs of extreme weather.

To address the state’s water quality and flooding challenges, in 2015 the Delaware General Assembly established the Clean Water and Flood Abatement Task Force. This bipartisan group – comprised of state agency staff as well as stakeholders from the state’s agricultural and environmental communities – was charged with investigating these issues and making recommendations for improvement. After a yearlong inquiry, the Task Force presented to the General Assembly a set of findings and recommendations. Its chief recommendation was to “significantly increase the annual investments in upgrading and maintaining Delaware’s water infrastructure, promoting water quality, alleviating flooding and providing flood control, and preventing or responding to stormwater damage.”

Meanwhile, the US EPA Chesapeake Bay Program Office commissioned the University of Maryland Environmental Finance Center (EFC) to identify options for Delaware to sufficiently and efficiently finance water quality restoration practices, in order to achieve pollutant load reduction targets for the Chesapeake Bay and to clean up waters in the 70% of the state that does not drain to the Bay. To conduct this analysis, the EFC interviewed Delaware state agency staff and reviewed the Task Force findings as well as the state’s existing funding streams and financing mechanisms for water quality restoration. Through this analysis, the EFC identified opportunities for Delaware to both narrow its water quality funding gap as well as change the way in which it finances restoration so that investments are made as efficiently and effectively as possible.

It is the EFC’s hope that the ideas presented in this report will inform the Delaware General Assembly as it considers the Task Force’s recommendations and advances the state’s goals of (1) increasing revenue flow for water quality restoration so that it is sufficient and stable, (2) harnessing all public, private and philanthropic resources to achieve clean water, and (3) maximizing the impact of state water quality and flood abatement investments so they achieve the greatest benefit for current and future Delawareans.

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Virginia has demonstrated a strong commitment to restoring the health of the Chesapeake Bay as well as the state’s own local waterways.1 Since the Chesapeake Bay Total Maximum Daily Load (TMDL) was enacted in 2010, Virginia has invested more than $350 million in nonpoint source pollution reduction projects statewide.2 The Commonwealth has made steady progress toward implementing its Chesapeake Bay Watershed Implementation Plan (WIP) and achieving target load reductions. It has advanced particularly impressive gains in abating point source pollution, and the Commonwealth’s nutrient credit trading program is a model for the region.

However, Virginia has recognized a need for greater levels of investment in Bay restoration, especially for practices that support attainment of goals in the state’s agriculture and stormwater sectors, which are making slower-than-needed progress in order to meet final 2025 TMDL targets. Virginia has also identified a need to amend its existing Bay financing mechanisms so that funding is more predictable and stable from year to year, and so that state water quality investments are as efficient and effective as possible.

The Chesapeake Bay Program Office (CBPO) asked the University of Maryland Environmental Finance Center (EFC) to help Virginia identify creative financing solutions that will meet these needs. Through interviews with Virginia state agency staff as well as a review of the Commonwealth’s existing funding streams for Chesapeake Bay restoration activities, EFC has identified opportunities for the Commonwealth to both close its Bay restoration funding gap as well as improve the way in which it finances restoration. These strategies focus on state-level opportunities because, though Bay cleanup is funded by various public and private actors, it is state governments that are ultimately accountable for meeting TMDL mandates.

It is EFC’s hope that the ideas presented in this report will inform Virginia’s efforts to (1) increase revenue flow for water quality restoration in a way that is stable and sufficient, (2) take advantage of opportunities to leverage private sector investment in Bay restoration, and (3) find efficiencies as the Commonwealth accelerates compliance with restoration targets. Virginia’s success in these regards would make it a model for other Bay jurisdictions seeking to make the best use of public funds for water restoration.

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The Blue Crab Management Outcome under the 2014 Chesapeake Watershed Agreement states that in addition to managing for a stable and productive crab fishery, the partnership will evaluate an allocation-based management framework by 2018. An allocation-based management framework would designate a numerical total allowable catch of blue crabs for the Chesapeake Bay and allocate a percentage of the total allowable catch to each of the three fishery management agencies, the Maryland Department of Natural Resources (MDNR), the Virginia Marine Resources Commission (VMRC) and the Potomac River Fishery Commission (PRFC). This document describes the progress made towards the Blue Crab Management Outcome evaluation of an allocation-based management framework as of September 2017.

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