 Vermont PBS in cooperation with Orca Media and the Vermont Press Bureau presents Capital Beat, the Week in Review, from the Vermont State House. Here's host Neil Goswami. Welcome everyone to Capital Beat. I'm Neil Goswami with the Vermont Press Bureau. We are inside the Senate Judiciary Committee, a very busy committee as you can see, and we are talking water quality today with House Representative David Dean, the Chairman of the Natural Resources, Fish and Wildlife Committee. What a long name. Well, it's a new name too. It was Fish, Wildlife and Water Resources, but we've restructured committees in the House this year. Well, thanks for being here, and Secretary Julie Moore of the Agency of Natural Resources. Thank you for having me. Thanks for being here. We've been talking about Lake Champlain and some tributaries in Vermont for a long time and about the water quality of those bodies of water. Representative Dean, we are under the gun to sort of find a way to clean up our waterways through the EPA and other mandates. Can you give us sort of a background as to what's wrong with the lake and what are we doing, who's requiring us to do this to fix it? Okay, first off, it is not an issue of the lake. There are four major watersheds, mega watersheds in the state of Vermont. Lake Champlain, Lake Memphemagog, the Connecticut River, and the Hudson River. Three of those four mega watersheds are part of impaired waters. Memphemagog, the Connecticut River, and Lake Champlain. They all have TMDLs, which is the magic phrase that we've been hearing about Lake Champlain. They either have them or soon will have them. And so all of the waters comprising probably 95% of the waters of the state of Vermont are part of an impaired mega watershed. So it's not just Lake Champlain. In terms of Lake Champlain, the concern is nutrient loading, too much phosphorus. All water bodies have, as a matter of natural occurrence, some limiter in terms of what grows in the lake, whether it's animals up through fish or plants, up through cyanobacteria, although in a lot of cases it starts with cyanobacteria. We end up with plant growth. In Lake Champlain, as a matter of natural occurrence, there's too little phosphorus. Well, guess what? 200 years ago, we came along and started adding phosphorus to Lake Champlain. We now have too much phosphorus in Lake Champlain, and the plant growth has accelerated as the level of phosphorus has gone up. In the Connecticut River watershed, Long Island Sound is the receiving water. There's so much nitrogen moving down the river, and it's a salt water receptor at Long Island Sound. Nitrogen is the problem on the Connecticut River, and we have a dead zone. There's so much plant growth that when it dies off, it takes all the oxygen out of the water, and we have ad noxic conditions, which means no oxygen. Permagog is phosphorus also, being a freshwater body of water. So we have the Hudson River, which is the Hussig and Battenkill. The megawater shed, the Hudson, does not have a TMDL. It is impaired in certain areas, but it doesn't have a TMDL for whatever reason, and both the Hussig and the Battenkill are in excellent condition. So we have nitrogen on the eastern side of the state, phosphorus in the north, and phosphorus on the western side of the state. Those are the problem nutrients that we're trying to take care of. And we talk about the TMDL, that's total maximum daily load, and we also hear a lot about phosphorus, especially pertaining to Lake Champlain. Where is this phosphorus coming from, and why is it all of a sudden a problem? Oh, it's not all of a sudden a problem. It's been a problem for 100, 125, 150 years. All lakes go through a life cycle, and it starts off as, you know, bare ground with running water, and it dams up, and it becomes a lake, and eventually it utrophies, and the utrophic status of a lake is a measure of how close that lake is to becoming dry land, right? That's the life cycle of a lake. As you speed it up with adding nutrients and adding things that make things grow really fast, you're speeding up that process. So it's been with us a long time. We're starting to notice it now because of, and I mentioned this earlier, cyanobacteria. Algae blooms. Algae blooms, and algae blooms that when they die create a toxin or release a toxin as part of their rotting process. Rotting's not the right word, but it's the only one that came to me. And that affects mammals as well as aquatic species. It's happening now. Natural systems have a tipping point, okay? And like everything on this side of the tipping point, everything seems fine, seems fine, seems fine, and then you add that last 100 pounds of phosphorus, and then suddenly you've tipped over on the other side. And that's what we're seeing, and that's what we've been seeing for the last 20, 25 years. We're on the other side of the tipping point. And it's these toxic algae blooms that have really caught the attention of the public, and that's why I think it's become such a topic here in the State House. So Secretary Moore, I get the sense that everyone in the State House and around Montpelier wants to clean up the lake. They also now must clean up the lake. How did we get into that position being mandated to do so? Sure. So under the Clean Water Act, as Representative Dean mentioned, there's the TMDL process. And the TMDL process applies once a jurisdictional theory, so in this case the Agency of Natural Resources determines that a water body does not meet standards. It was determined in the late 1990s that Lake Champlain wasn't meeting standards, and a TMDL was developed. The document was developed jointly with New York State, and then we have a separate agreement under the umbrella of the TMDL, but not formally part of it with the province of Quebec. That TMDL was approved by EPA in 2002, and Vermont began work on implementing our parts, as did partners in New York and Quebec. The TMDL was appealed, or EPA's approval of it, was appealed by the Conservation Law Foundation in 2008. EPA ultimately settled with the Conservation Law Foundation, agreed to reopen the TMDL, look more closely at a couple of pieces of it, including some of the assumptions made about reductions in non-point source pollution, and the revised TMDL document was finally signed into effect this past summer. And so now we've begun the work of implementing under the revised TMDL. It's got targets for different sections of the lake, different targets. Those targets actually have the effect of making the lake look like 13 little lakes on paper, but in each area of the lake, the targets are slightly different. In the main lake, where water quality is frankly very good, the reductions that are required are relatively modest, as opposed to an area like Massisquoia Bay where existing conditions are much more challenging. The reductions required under that pollution budget are very significant. Okay, so we have this mandate from the Environmental Protection Agency. The legislature has enacted some of these requirements from the EPA in state law. So now we have sort of set the table. We know what we need to do. And Representative Dean, your committee has spent about eight or nine weeks now trying to come up with ways to fund the lake clean up around the state, the water clean up around the state. We know we need to spend somewhere in the range of 25 to 30 million a year over the next 20 to 30 years to meet the goals that are outlined or mandated, I should say, by the federal government and now our own statutes. So let's talk about the funding sources that you've identified. You would like to, you have recommended raising the room meal and alcohol tax by 1% from 9% to 10%. And I think that raises about $19 million or so. Yeah, you have talked about a $10 fee on I think motor vehicle registrations in addition to what's already there, another $6 million raised or so. What else are you looking at to get to the $31 million a year? Well, there is in place right now a 0.2% surcharge on the property transfer tax, which raises about $5 million. And then there are some minor additional sales taxes on rental of limousines and rental of Marina slips and things of that nature. In addition to what is in the memo that we have now submitted to the Ways and Means Committee, our committee is fully aware of what's known as the TDI settlement agreement that was reached between the company that is laying the underwater cable down the center of Lake Champlain. And fortunately for us all in Vermont waters so that they can provide large, large amounts of power to Massachusetts. They still needed to get a certificate of public good from the state of Vermont and the public good has now been defined in dollars that they will be contributing dollars to the state of Vermont. The problem is we don't know when it will start. We presume it will start but they still don't have a customer for all of that power until we know that they have a customer, the money is not real. The money that we raised in our recommendations to Ways and Means is assuming that that money will not materialize. And we just took what I would consider a conservative stance, that money is not going to materialize so that we raise the money that we do. If that money materializes, it's time to sit down and talk. Because in terms of two of the major payments, there's $6.5 million a year coming to the state of Vermont as soon as these folks find a customer for their power. I'm doing this. This is Massachusetts down here because that's where they're going to sell. And as soon as they start construction, the money starts to flow. As soon as they start selling power, $6.5 million a year will come to the state of Vermont. There is no escalator. It will remain that but it will remain at that level for 40 years. So we're fully aware of that but we assume until we see a signed contract that it doesn't exist. So your funding sources raise a total of $31 million or so. And they start in 2019 and they would run for two years before sunsetting. At which point you would like to see a per parcel fee on all property owners in Vermont based on their impervious surface area that they own. That's part of our recommendation, the ways of means. That timing also coincides with what we expect to happen with TDI. You're well aware that the governor is no fan of the plan that you've put forward. He called all of your ideas, quote, problematic and promised reporters at his weekly news conference this week that he would veto them. So that is sort of the backdrop that we are working with as ways and means now picks up your work and reviews it. Secretary Moore, your boss is the governor. You work for him. What is so problematic about the funding sources that they've identified knowing that they don't start until 2019? Sure. I think we need to back up a step first and talk at least briefly about the report that Treasurer Pierce had put together. She had undertaken a fairly comprehensive analysis of different funding mechanisms. And in the end put together a package of potential funding mechanisms targeting a figure of about $25 million a year. That's actually about half of the gap that exists between current spending on water quality and what my agency is estimated as the full needs to achieve our water quality goals. So $25 million, the other $25 million will be borne by people who have permits from the agency and requirements either from the federal government or state law to implement practices. The money we're talking about, whether it's the $25 million that the Treasurer recommended that the governor is subsequently incorporated in his FY18 and 19 budgets or the $30 million that Representative Dean's committees put together is a piece of that. And it's going to be used to incentivize and subsidize the work of municipalities and farmers and wastewater treatment facilities to implement the projects that need to be done to achieve our water quality goals. There's some questions in there about whether there's some existing revenue sources or financial instruments that haven't been fully utilized at this point that could be put to some of this work. One piece of that might be the state revolving fund that is a low cost, no cost interest loan program that comes with money from EPA that's matched by the states to the tune of about $20 million a year. There's some flexibility in that program to look beyond wastewater sources at stormwater sources. And frankly, there are states that have accentuated the flexibilities in those programs in ways that we haven't in the past. I think in large part, because we've had grant programs to the ecosystem restoration program, loans don't look particularly appealing when their grant's available for that work. But as we restructure and the regulatory authorities kick in that require some of these practices to be done, I think low cost, low interest loans may have greater and greater appeal and we need to look at that piece as well as other elements to work into the puzzle. The law requires that this work is done regardless of who pays for it. It's not a question of the commitment to water quality. It's really about how we structure that financial package. So Representative Dean, do these types of loan programs make sense to you? They do and we worked as part of our work last year, I believe it was to increase flexibility within some of the steps that the Secretary has mentioned that other states have taken to increase flexibility. But there's another issue on the horizon that is not part of this conversation directly. And that's combined sewer overflows during the last wet weather situation. We had, I believe, 24 or 20 discharges of untreated effluent into the waters of the state. Now this isn't, you don't go out swimming this time of year, so the danger level is low, but those are actually permitted overflows. It's not like anybody has broken the terms of their permit. Those are permitted overflows. We know about them. We've been trying for 30 years to reduce them and the agency had recently made it clear that in fact they were going to reduce them. So one of the flexibilities we built in was to allow that fund to be used for CSOs. And so there are other demands on those funds. I agree they're available. They have been for a number of years. The problem is part of the money in those funds is federal. It comes to us through EPA. The future of which is at least dimmer than it used to be. It's not quite dismal, but it's dimmer than it used to be. A wrinkle to this discussion that's relatively new in the last six months or so. We are living under the Trump administration now in Washington. They have made some noise about cutbacks that they are seeking at the EPA. Secretary Moore, fill us in on what potential pitfalls there are if the Trump administration follows through and is able to cut back where they have said they would. Sure. What we've been hearing is 25% across the board cut to EPA, which could have a really significant effect on Vermont. My agency as a whole, about a third of our funding is federal funding. EPA specifically provides significant funding to the Department of Environmental Conservation. About 40% of that department's funding comes from EPA, including the funding that pays for a third of our staff. A loss of federal funding, however, doesn't really do anything to change our obligations under the core environmental programs or the commitments we have to Vermonters to maintain clean air and clean water. So you're facing a potential one-third loss of staff, and yet you would be expected to maintain the same environmental standards and programs that you have now. That seems to be the framework that's been put forward at this point in time. Rather untenable. Yeah, rather daunting. Yeah, just understand that my committee and myself are disagreeing right now with the administration. Should that begin to come to pass, we're ready to pull together. And the secretary knows that, and I hope the governor knows that also. We're hopeful we don't need to cross that. And that wiser minds will prevail. It really changes the entire discussion about how we move forward on these TMDLs. Well, and not just here. Think about it. Great Lakes. Yeah, Chesapeake Bay. Chesapeake Bay, yeah. And it's not just water. It's clean air. It's solid waste. It's hazardous waste and toxics, things like the Papua crisis in Bennington. It's every one of our core environmental programs. Real game changer. One of the things that I heard from the governor this week was that we have this two year bridge laid out by Treasurer Beth Pierce. Why, why are we moving forward with seeking a funding source now when we have two years to find and implement it? Is there a reason that you and your committee felt compelled to move forward this year? I don't think the treasurer came up with that to give us two years to sit on our hands. These are going to be tough political questions. Absolutely no question about it. I've been around here enough years to know a tough question when I see one. Yeah. But you've got to start somewhere. And with the harder the question, the more lead time that you can give yourself so that debate continues to evolve. The Clean Water Act that passed in 2015 was a result of six years of work. Yeah. We've got two years. That may not be enough time. Right. You know, in terms of the timing of something like TDI coming along, something like an impact from EPA. And so, yeah, I felt compelled to begin the discussion now. Please understand that, yeah, my committee is committed to clean water, Republican and Democrat alike. But, you know, we know that this is going to be a long conversation because many of the members of that committee have been through the six years to get to the Clean Water Act with me. Yeah. You know, we're, and I just don't want to, I don't want to sit on my hands, kick the can down the road or use any cliche you want. We can't wait those two years and then say, oh, you know what, we don't have a way to move forward in terms of clean water for the state of Vermont. I don't want to be there. So you've started this work. Your committee has put together this plan. It's now off to Ways and Means. Still a few steps before the House even considers it. Yes. I'm going to go to the Senate and they'll do their work. When you launched this effort in January, did you expect to have a bill pass the legislature this year or was it more of a biennium long effort that you saw? Given that we do have two years in terms of the treasurer's work, I can live with two years. Okay. The fact is though, if we hadn't started now in the first jurisdictional committee, we wouldn't be where we are with the second half of the biennium coming up for any House action that's going to take place. Right. You know, then we still have to get it over to the Senate. So it had to start somewhere. It had to start sometime and I and my fellow committee members said now. Yeah. So what's your best case scenario for this year? Would you like to have a bill over to the Senate? Yeah. You know, I'd like to know what the House view is and at least resolve that question. Yeah. Does that seem like a reasonable sort of timeframe for you to use this year, perhaps next year to come to some viable funding plan? Yeah. I mean, we certainly share representative Dean's sense of urgency and the recognition that the fact that there is only two years of funding that's been identified at this point and our commitment has been to take the next 12 months to look carefully at what those options and opportunities may be. Yeah. Knowing that we have to ultimately arrive at the station at the same time regardless of if we're on a slightly different track at this point. Yeah. Or what size the train is. Lots of questions. Right. If the Trump administration does fulfill some of these comebacks to EPA and even if they go through with that, is there any way that the TMDLs go away? Can they back out of those as well? No. I mean, the regulatory sort of framework that TMDLs fall under is robust and well established and it would take a Herculean effort to remove it at this point. And frankly, that's incredibly problematic that there will be no changes in regulation to match these changes in funding. Not that we're seeking changes in regulation. What we're hoping is that there will be a recognition of the regulatory framework, the need to implement it, and the need to fund that implementation. Yeah. Okay. If I could. One of the arguments when I'm asked about, well, isn't EPA going to back off and whatever? I don't care. Those are my neighbors living along the shores of Lake Champlain who are dealing with water. They can't swim in with fish kills with loss of value in their property. Those are my neighbors in the Northern Connecticut River who are having scum lines form on their canoes and other quiet craft that they use in the river with no explanation of the source of what's doing that. And a river that smells funny and kills fish, that affects my neighbors. Yeah. So I'm not willing to abandon them. I don't care what the EPA tells me. Yeah. They were, how would you say, stimulus in terms of moving this forward and the agency and EPA gave us a plan that we could implement through the Clean Water Act. I mean, that was really helpful. But I'm not willing to walk away from my neighbor's point. Yeah. And I have about 30 seconds or so left. I just want to ask you, we hear so much about Lake Champlain. Collectively, has state government done a poor job of making clear that this is a statewide issue, not just a Chinden County or Lake Champlain basin issue? I would say it's a perpetual challenge. I think it's one that probably stems from the fact that at its inception, this work was really focused on Lake Champlain. That was the first mega watershed, TNDL. The needs have grown beyond that. There are inland lakes and ponds. There are streams and rivers. Well, a pill of Lake Champlain that also have some pretty significant water quality needs. And it's really up to us to make clear to all Vermonters that we're talking about Vermont's waters, Vermont's lakes, ponds and streams, and not just Lake Champlain. Okay. We'll have to leave it there for this week. Secretary Julie Moore and Representative David Dean, thank you both so much for joining me today. Thank you. And we're glad you could join us. We hope you'll be back next week after Town Meeting Day. And be sure to tune in to Vermont this week as well.