Memorandum of Understanding
The purpose of this Memorandum of Understanding (MOU) is to outline the understanding among the parties for the exploration of watershed and/or basin solutions for water quality issues in the Rock River basin.
1. Parties. This MOU is entered into between the Department of Natural Resources (DNR) and the municipalities, groups and other entities or individuals signing this MOU, who collectively make up, and will be referred to as, the Rock River Partnership (RRP). The RRP is an unincorporated associations of point and nonpoint dischargers located within the Rock River Basin. DNR recognizes that the membership of the RRP is likely to change overtime. However, since this is an MOU, and is therefore a statement of intent rather than a legally binding contract, both the DNR and the RRP acknowledge that it is acceptable for the membership of RRP to change over time.
Municipalities, group and other entities or individuals wishing to agree to this MOU shall evidence their agreement by signing a signature addendum to the MOU. Those signature pages may be in counterparts, and all such signature pages shall collectively be deemed part of this MOU. If any signer of this MOU wishes to withdraw from the RRP, the signer shall provide written notice to the office of the RRP as it may be established by the RRP from time to time, and also to the DNR. RRP will periodically provide a list of members to the DNR. Also, RRP will provide the DNR with materials stating the formal qualifications for membership in RRP.
2. Additional partner efforts. Both DNR and RRP recognize that the RRP effort was initiated by the managers of several publicly-owned wastewater treatment plants in the basin, and that the membership of the RRP consists largely of these public point sources at this time. Both the DNR and the current membership of RRP wish to see the RRP expanded to include other types of partners, and both DNR and RRP commit to seeking to include other partners in the RRP. Efforts to expand the partner base of RRP will be ongoing through the remainder of 1996 and throughout 1997. DNR and RRP will discuss methods for expanding partner involvement in RRP.
3. Initial proiect: WRI study. The initial effort to be jointly undertaken between the RRP and the DNR is mutual assistance with a study to be performed by the World Resources Institute (WRI). RRP and DNR have made certain preliminary agreements about future use of the WRI study, contained in Addendum 1 to this MOU. All parties agree to use their best efforts to reach consensus as to how the WRI study will be used, if at all, in future watershed/basin work (including WPDES permitting) related to the Rock River. The parties will make good faith efforts to reach agreements on specific projects affecting the Rock River in the future, and if agreements are reached, they will be reflected in additional Addendums to this MOU.
4. Targeting future efforts. DNR and RRP agree that it is extremely difficult to explore solutions for water quality issues on the scale of the entire Rock River Basin. Localized conditions, as well as localized partner objectives, make it imperative that the Basin be broken down into sub-units for the determination of specific goals and solutions DNR and RRP agree to work on this breakdown of the Basin for purposes of further work under this MOU.
In addition to this geographic breakdown, the parties agree that they
need to conduct further discussions about the nature of future studies that
are needed to properly determine goals for the reduction of various pollutant
loadings, the development of control strategy alternatives, methods of calculating
the "least cost mix" of the various alternatives, development
of criteria for judging the alternatives to be pursued, determining how
partner priorities fit with DNR and U.S. EPA programmatic priorities,
and funding issues.
5. Future funding mechanisms; effluent trading etc. DNR and RRP agree
to explore the methods for funding further research as well as possible
effluent trading and related techniques for funding least cost mix control
strategies. DNR recognizes that RRP members will not agree to fund control
strategies that are outside their own geographic borders or outside their
specific legal responsibilities without specific, binding assurances from
DNR as to the implications of such strategies for the funding entitiesí
legal responsibilities. DNR and RRP agree to explore the methods for innovative
funding approaches needed to implement the least cost mix or other consensus-based
control strategies which may involve new tools such as effluent trading.
DNR and RRP recognize that nothing in this agreement may require a party
to exceed the partyís legal
capabilities as established by law (including but not limited to statutes
and regulations).
6. Correlation of Rock River basin analysis with potential ambient Phosphorus standards. In the event that the DNR establishes ambient Phosphorus concentrations as standards or goals, whether through new regulations or guidance, the department has previously recognized, and reiterates here, that it will only implement such new Phosphorus concentrations through "a watershed approach" as generally defined in the memo from Secretary George Meyer to the Natural Resources Board dated July 17, 1995. In particular, the department is committed to seeking water quality solutions across all media, and will not pursue additional reductions from point sources in Phosphorus or other substances if reductions can be technically achieved at materially lower monetary cost through control strategies for non-point sources.
In order to determine watershed-based solutions, the department intends
to proceed
through the following steps:
(a) Determine if nutrients are a problem;
(b) Where are the nutrients coming from? What water quality standards
or beneficial uses are impaired?
(c) Develop target reduction goals to restore beneficial uses.
(d) Develop menu of strategies to achieve reductions;
(e) Assign quantity of reductions likely to be achieved and unit costs for
each strategy;
(f) Prioritize strategies in order of cost-effectiveness.
(g) Explore trades, cooperative agreements, funding techniques, or other
mechanisms needed to implement mix of strategies.
(h) Select scenario (mix of most cost-effective strategies) reasonably likely
to achieve target reduction goal.
7. Rock River Partnership Pilot Project which correlates the basin analysis
with future WPDES permitting of dischargers to the Rock River. The department
will work with dischargers on permit scheduling, compliance schedules, or
other techniques to
facilitate the use of information collected in this project in upcoming
decisions affecting WPDES dischargers and other water quality program decisions,
as well as on a moratorium on new or modified permit limits, while information
on basin conditions is being collected. The DNR will apply all means
available to it under the law to allow the permitting of RRP members to
take account of information made available under the basin studies conducted
by the RRP. The benefits of the preceding sentences in this section 7 shall
apply only to those dischargers participating, through formal qualification,
in the RRP. . Neither the DNR nor the permittees who are member of the RRP
waive any rights any of them may have with respect to WPDES permitting.
Without limiting the foregoing, the members of RRP do not waive the right
to seek alternative effluent limitations, file petitions, or otherwise dispute
the content of any WPDES permit, or exercise any other rights available
to them as provided by law.
This MOU represents a pilot study/project on the part of the DNR and
the terms of this MOU are not to be applied statewide, or to be considered
as precedent, unless and until the results of the pilot are known and reviewed,
and the DNR can determine whether or not it wishes to expand, modify or
otherwise apply the techniques and results of this
pilot in other areas of the state.
8. WPDES permittee studies. DNR recognizes that the WPDES permittees may pursue their own studies, either alone or jointly, outside the scope of this MOU.
9. Term. The commitments made by all parties under this MOU are not to be deemed open-ended and perpetual. Rather, all parties to this MOU recognize the pilot nature of this project, and the fact that the parties will evaluate its progress and success at future points, and determine the future course and longevity of this project, and hence this MOU. All parties will periodically discuss the progress and status of the efforts under this MOU, and as a part of those discussions will seek to agree on the term of this MOU. Any individual RRP member may terminate its own involvement in the project by withdrawal from the MOU, but in no event will the department, or the RRP as a whole, terminate participation in this MOU (and hence the MOU itself) sooner than three (3) years after the execution of this MOU by the department. This date should not be viewed as a presumptive date of termination, but affords the department the ability to unilaterally end the MOU if it cannot, in good faith, reach an agreed termination date with the RRP through mutual discussion, after the project has run a minimum of three (3) years.
DEPARTMENT OF NATURAL RESOURCES By: Date Executed 1/9/97 George Meyer, Secretary |
(a) The funding of the WRI study will be provided by WRI funding sources
and the DNR and the RRP will not be required to fund this project. However,
RRP
members may provide occasional in-kind services as they are willing and
able to provide.
(b) DNR shall ensure that a draft of the WRI report shall be submitted to
the
DNR and the RRP Steering Committee for review and comment to allow input
before
WRI makes final editing changes.
(c) DNR and RRP do not anticipate that the project will be collecting new
data
on water quality in the Rock River basin. Both the DNR and RRP will share
available
data with WRI. Rather, the intended purpose and scope of the WRI study is
to use
existing information on land use patterns and available in-stream data to
make a general
analysis of the sources of one major nutrient to the Basin -- Phosphorus.
It is the goal of
the study to make a general approximation of the relative contributions
of point and non-point
sources of this substance, and to begin to locate areas within the Basin
that deserve
greater scrutiny in attaining reductions in P loadings to the system.
( d ) Because of the focused and limited purposes of the WRI study, as well
as
the fact that the WRI study will not generate new water quality analysis,
the DNR will not
use the WRI study to draw a conclusion as to the inter-relationship of various
conditions
in the basin, such as ambient Phosphorus concentrations and turbidity, in
contributing to
water quality concerns in the basin. Also, the DNR will not use the study
to draw
conclusions as to the consequences of reaching certain ambient Phosphorus
concentrations; any ambient concentrations used in the study as a goal are
for purposes of
making an arbitrary assumption to establish an arbitrary reference point
for purposes of
calculating potential and relative costs for various water pollution control
strategies.
Additional research will be needed, which will not be a part of the WRI
study, before the
Department will be able to make reasonable predictions about the likely
impacts on water
quality (whether aesthetically, chemically, or biotically) of various specific
levels of
Phosphorus reduction in the Rock River basin or portions thereof.
(e) It is the intent of both parties to reach consensus as to how the study will be used, if at all
DEPARTMENT OF NATURAL RESOURCES
By:
George Meyer Secretary
ROCK RIVER PARTNERSHIP
By Steering Committee Members:
Date Executed Roger Sherman, Fort Atkinson WWTP
Date Executed Glen McCarty, Waupun WWTP
To complete and make effective the execution of this MOU by the RRP,
the assent of
each individual current member of the Rock River Partnership must be evidenced
by
execution of a signature addendum page, copies of which will be maintained
by the DNR
and the RRP. The signatures of Steering Committee members above is to indicate
the
initiation of RRP activities with the department; the RRP will determine
its members who
may represent the RRP with the department on an ongoing basis from time
to time.
MEMORANDUM OF UNDERSTANDING
Between the Wisconsin Department of Natural Resources
and
the World Resources Institute
January 6, 1996
Backgound
In spite of pollution control regulations and agricultural conservation
subsidies put in place
over the last twenty years, water quality in many parts of the United States
may be declining. For
a number of reasons, the near-term prospects for improvement are not bright.
Federal funding for
conservation subsidies is being cut severely while the costs of tighter
regulatory requirements on
point sources to meet the nationís water quality goals are estimated
to be as high as $15 billion.
Nonpoint source pollution has become the leading cause of surface water
impairment, but is
largely unregulated. A new approach to water pollution control is badly
needed.
One innovative potential solution is discharge reduction credit trading.
This approach
uses markets to achieve improved environmental quality at least cost. Water
quality trading
would allow dischargers the flexibility to purchase discharge reduction
credits at a lower cost than
installing controls while providing an equivalent or greater reduction in
loading and improvements
in water quality. This approach has been successfully applied to achieve
reductions of lead, su1fur
dioxide and emissions of airborne pollutants.
Discharge reduction credit trading has been less successfully applied
to water quality
issues, largely because the nature of the most important target -- nonpoint
sources -- makes
evaluation of the costs and benefits difficult. Nevertheless, based upon
estimates derived from
actual experience, it appears that some agricultural practices have the
potential to reduce nutrient
loadings at costs that are significantly less than point source remediation,
offering the opportunity
for major cost savings.
The Wisconsin Department of Natural Resources supports market-based initiatives
and
has committed to evaluate the environmental and economic benefits of implementing
a water
quality trading program. The department has targeted initiatives to increase
voluntary reductions
and pollution prevention activities, to reduce costs, and to encourage innovative
alternatives to
traditional regulatory strategies. Market-based systems may offer greater
environmental benefits
in a more flexible and cost-effective manner than is provided under existing
regulations.
The World Resources Institute (WRI) has undertaken a study to develop and
apply new
methods of economic analysis to support actual projects at the state and
municipal level where
water quality trading is allowed or under serious consideration. The information
made available
through this series of studies will help governing agencies evaluate the
utility of trading programs,
assist industries and municipalities to make informed choices regarding
point versus nonpoint
control, identify efficient rate and funding levels, and achieve and maintain
water quality standards
and goals for designated uses in an economically optimal fashion. Beyond
economic and
environmental analysis, other elements pertinent to trading programs, such
as contracting
mechanisms, associated "transaction" costs, verification of implementation,
and monitoring of
environmental performance will also be considered.
The Wisconsin Department of Natural Resources (DNR) and the World Resources
Institute (WRI) have agreed to collaborate on a research effort to explore
the economic and
environmental potential of water quality trading in Wisconsin. The purpose
of this Memorandum
of Understanding (MOU) is to outline the roles and responsibilities of each
institution, the
objectives of the research program, and the associated outputs.
There are several objectives of this joint research program:
1) To provide sufficient information to the Department of Natural Resources
and to allow it to make informed decisions regarding the efficacy of water
quality trading within Wisconsinís legal, economic, and environmental
context.
2) To determine the potential of water quality trading in the Rock River
Watershed to achieve the Stateís water quality objectives and to
determine the
relative environmental and economic benefits of trading and regulatory options.
3) To extend the lessons learned from this joint research effort to other
agencies, businesses, farmers, and environmental and conservation concerns
outside the state of Wisconsin.
Roles and Responsibilities
Under this Memorandum of Understanding, DNR and WRI each agree to fulfill
certain
responsibilities toward each other to enable, support and complete this
research effort. A
collaborative research program on water quality trading will further the
mission of all parties.
The Wisconsin Department of Natural Resourceís mission is:
The World Resource Instituteís mission is to help governments,
environmental and
development organizations, and private business understand how to meet basic
human needs and
nurture economic growth without undermining the natural resource base and
environmental
integrity. To this end, WRI engages in policy research regarding important
environmental
questions that are relevant to a broad audience. WRI not only undertakes
research and prepares
publications, but also attempts to publicize the findings of research efforts
as widely as possible.
DNR and WRI are interested in exploring how to further improve water quality
at the
least cost. This common interest provides the fundamental basis for this
Memorandum of
Understanding. The intended purpose and scope of this study is to use existing
information, to
the extent possible, to analyze policies intended to reduce phosphorus loadings
to the Rock River
Watershed.
WRI will be responsible for conducting much of the analysis. In particular,
WRI will:
Develop site-specific coefficients for agricultural practices. Previous
analysis of
agricultural practices for the 1995 farm bill was undertaken for 49 land
resource regions
across the United States. WRI will use this database as the starting point
for analysis of
nutrient trading. However, the practices relevant to a given watershed will
have to be re-evaluated
using more site-specific soil data and a water-quality model. Additional
practices developed by state researchers will be used to supplement this
dataset.
Create a watershed-based economic/environmental model. In order to simultaneously
evaluate the economic and environmental potential of water quality trading,
the
appropriate analytical tool must be developed. The model developed for this
effort by a
WRI will enable the exploration of various regulatory and trading arrangements.
The
resulting model will be available to be adopted by state analysts to accomplish
on-going
analysis when the project is completed.
Analyze alternative mechanisms to implement trading programs. Alternatives
could
include historical regulatory arrangements; options for the implementation
of trades
including point-point, point-nonpoint, and nonpoint-nonpoint options; for
contracting
mechanisms such as fixed fee and marginal cost; strategies for remediation;
and trading
ratio levels. Policies to be tested will be determined jointly by WRI and
DNR. WRI will
participate in planning and outreach meetings organized by the state and
the partnership,
as appropriate.
Prepare a discussion paper outlining the economic and environmental potential
of water
quality trading for the Wisconsin case study. Recommendations for policy
and further
actions will be outlined. WRI will be solely responsible for the content
of this report.
Publish study results. The analysis and results of this research effort
will be of interest
well beyond the local levels and project sites. Regulators, industries,
state and local
governments and researchers around the country will also be interested in
study findings,
methods and recommendations. For this reason, we will produce a research
report
detailing each case study and the lessons learned. The study will not only
include research
related to the case studies considered, but also summaries of other projects
undertaken
prior or concurrently. The report will consider the opportunities for trading
and describe
the conditions that will facilitate trading in other areas. The interim
report for the
Wisconsin case will be completed by February 1997 and the final report by
March 1997.
Raise sufficient funds to support its own institutional efforts.
In order to achieve the benefits of the best possible analysis, DNR will
support the
research in various ways. In particular DNR will:
Assist WRI in obtaining or gathering information to support the analytical
effort. In
particular, DNR will collate relevant point and nonpoint source and geographical
data
within the DNR for the watershed under study and provide this data to WRI.
DNR will
also seek to enlist the involvement of other state agencies in data collection
as necessary,
DNR will provide copies and interpretations of relevant state laws and regulations
as
necessary.
Organize a series of meetings with other state agencies and organizations
within the
selected watershed to involve appropriate stakeholders in the discussion
of water quality
trading policies and options.
Through the course of the research effort, DNR will remain committed
to maintaining the
relationship described herein, providing sufficient staff time to enable
and support the
completion of the work.
Review and provide timely comment on analysis and report drafts prepared
by WRI.
The result of this research effort will be a peer reviewed report written
and published by
WRI that discusses the relative benefits of water quality trading in the
context of Wisconsin and
several other states. Prior to publication, and as soon as the analysis
is complete, WRI will
provide a white paper to DNR and others as appropriate, that describes the
methodology, policies analyzed, results and recommendations. WRI will not
attribute opinions expressed in the report
to the DNR. WRI will also make available relevant information and analytical
tools to DNR.
Analytical tools and data developed by WRI in the course of this study will
remain the intellectual
property of WRI and will not be released by DNR to any third party without
the prior written
consent of WRI. Data collected by DNR may be used as it sees fit, though
it is understood that
no new water quality data will be necessary to complete this study.
WRI and DNR anticipate cooperation and assistance from a stakeholder
group in the
region, the Rock River Partnership (RRP), and WRI agrees to solicit input
on the report from
RRP and to furnish RRP with twelve copies of the final report.
It is understood that this analytical collaboration is intended to support
decision making by
Wisconsin Department of Natural Resources, in conjunction with other data
and analyses, but that
the DNR has no obligation to act on the results of this study.
George Meyer, Secretary Jonathan Lash |
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