Fort Walton Beach Council agenda — 12-24-2010 Regular — reading text

C c Q c N O U CD U 5000 Z O Q' Z O C O E i O 25 °0 V DD M 0 Q C7 O Cn cn 000 -------- ,_. Cost in Millions' Figure ES -2 Financial Risk —BMP and LOT Requirement Annual Cost Figure ES -3 shows the estimated annual direct compliance costs to the six sectors analyzed: agriculture, municipal wastewater treatment plants ( WWTPs), industry, urban stormwater, septic November 2010 Cardno ENTRIX Executive Summa Packet Pg. 102  14. 1. b Economic Analysis of the Proposed Numeric Nutrient Criteria for Florida tanks, and state agencies ( for development and enforcement of `Total Maximum Daily Load' or TMDL limits). It shows that average expected annual costs are significant for all sectors, ranging from $240 million for septic tanks and over $2. 1 billion for stormwater, based on the End -of P- ipe Requirement in all inland waters ( these costs change to $ 41 million to $ 783 million based on the BMP and LOT Requirement). As :indicated in Figure ES -3, stormwater costs in particular rise dramatically if enforcement of the proposed federal NNC is to meet the End -of P - ipe Requirement and applies to all inland water bodies. Stormwater and municipal WWTP costs are largely borne by local city and county governments, and thus are passed on to rate payers or tax payers. Together with the cost to state agencies of implementing and developing TMDLs, total costs to the public sector are expected to account for approximately 60 percent of total costs. Estimated Costs by Enforcement Scenario by Sector 2, 500 ,_„ ,__,__,_, ____, ,__ -- _ ,, ,_,_- ____ -_- 2, 000 it End of Pipe 1, 50C} - -- Requirement Minions 1, 000 ---------- i 500 BMP and Lot Requirement rt ell, ot PaO 9 Gs Sector FigureFigure ESES - - 33 DirectDirect AnnualAnnual Compliance Compliance CostsCosts byby ScenarioScenario andand SectorSector ES.ES. 22 ThereThere areare Significant Significant Distributional Distributional andand Socioeconomic Socioeconomic ImpactsImpacts ofof EPA'EPA' ss ProposedProposed Regulations Regulations ThereThere willwill bebe highhigh costscosts toto economicallyeconomically distresseddistressed areasareas asas wellwell asas substantialsubstantial economiceconomic costscosts andand dislocationdislocation impactsimpacts onon certaincertain economiceconomic sectorssectors inin thethe state.state. ManyMany countiescounties already already experiencing experiencing severesevere socioeconomicsocioeconomic conditionsconditions willwill feelfeel thethe impactsimpacts ofof thethe proposed proposed federalfederal NNC.NNC. OverOver 2020 countiescounties inin FloridaFlorida havehave povertypoverty ratesrates thatthat exceedexceed 2020 percentpercent ( ( thethe nationalnational averageaverage isis 1414 percent);percent); $ $ 256256 toto$ $ 647647 million.million. Complying Complying annualannual compliancecompliance costscosts inin thesethese countiescounties areare expected expected toto totaltotal withwith thethe proposedproposed federalfederal NNCNNC willwill causecause significantlysignificantly higherhigher costscosts onon aa perper capitacapita andand perper incomeincome basisbasis inin countiescounties withwith povertypoverty ratesrates exceedingexceeding 2020 percent.percent. UnderUnder thethe EndEnd - - ofof- -PipePipe RequirementRequirement scenario,scenario, thethe average;average; costcost ofof compliancecompliance perper personperson ($ ($ 1,1, 342)342) isis threethree andand aa halfhalf timestimes greatergreater inin thesethese countiescounties thanthan inin countiescounties withwith povertypoverty ratesrates underunder 2020 percent.percent. Further,Further, inin thisthis scenario,scenario, thethe costcost perper dollardollar earnedearned ( ( 44 percent)percent) isis 300300 percentpercent higherhigher inin thesethese countiescounties indicatingindicating thatthat aa largerlarger proportionproportion ofof November November 20102010 CardnoCardno ENTRIXENTRIX ExecutiveExecutive SS packetpacket Pg.Pg. 103103  L- 14. 1. b Economic Analysis of the Proposed Numeric Nutrient Criteria for Florida each dollar earned will be used to pay for the proposed federal NNC compliance. For example, in Hamilton County, the cost per person of End of Pipe Requirement scenario compliance is projected to be over $ 11, 700, or 467 percent of total county earnings. Further impacts may include increases in utility costs, which can also depress housing prices and further depress the retail and commercial development industry. Implementation of the proposed federal NNC could increase the cost of owning a home, and therefore decrease the value of a home; it can also divert spending from the service and retail sectors to spending on utilities. ES. 3 Benefits Associated with EPA' s New Water Quality Standards are Uncertain Benefits identified in the EPA Economic Analysis are highly uncertain. Many believe that the benefits from vastly increasing the number of water bodies listed as impaired fail to justify the costs. Florida water quality experts review Florida surface waters for nutrient impairment in accordance with Florida' s existing Impaired Waters Rule (IWR), and these experts believe that the vast majority of Florida lakes and flowing waters with existing water quality problems are already identified as impaired water bodies. As such, most of the estimated 2, 174 water bodies that may be newly listed as impaired under the proposed federal criteria likely do not merit being listed as impaired in light of the established Designated Uses for Florida waters and will not benefit from imposing the proposed federal NNC. This study shows that the potential compliance costs for " newly" impaired water bodies account for more than 25 percent of total costs ( Figure ES -4). Listing water bodies with acceptable ecological and human health conditions as impaired would allocate state resources unnecessarily to develop TMDLs, create " restoration" programs and create or increase treatment costs for discharges to these water bodies. Experts in Florida water resource management feel these limited resources would be better spent improving the water quality of those waters already listed as impaired for nutrients under the current IWR. a