Federal Funds Summary: MPCA FY2022-2023 Budget Overview

Federal Funds Summary Senate Environment and Natural Resources Finance Verlynn Schmalle, CFO Greta Gauthier, Assistant Commissioner February 17, 2021

Our mission Protect and improve the environment and human health.

Overview of MPCA Federal Funds Federal funds are 8% of the MPCA FY2022-FY2023 base budget. The Governor s Budget contains no change items or increases in Federal Funds. The Federal EPA Performance Partnership Grant (PPG) is the largest source of Federal Funds (Flexible, Single MOU, Multi-media) and provides funding for delegated responsibilities. Targeted federal grants supplement a wide range of initiatives across the agency. Most federal grants support state-wide activities. Select grants have been effective in working with local partners St. Louis River AOC, MN Clean Diesel, Nonpoint Source. Federal funds support all/part of 25% of all positions and supplement the capability of all Divisions. 3

FY2022 - 2023 Base Budget FY22 Base FTE FY22-23 Base $(M) General Clean Water Environmental Remediation Federal Special Revenue Closed Landfill Investment Other 10.3 0.0 415.1 113.9 116.2 110.2 0.0 7.6 12.4 3.2 171.7 242.4 43.8 60.1 0.0 29.7 TOTAL 793.3 $563.3 4

FY2022-23 Base Budget by Fund: $563.3M Federal $43.8M 8% Special Revenue: $60.1M 11% Other $29.7M 5% Includes $14.8M of VW Settlement Remediation $242.4M 43% Includes $180.3M of 3M Settlement Closed Landfill Investment $0M 0% General $12.4M 2% Environmental $171.7M 30% Clean Water $3.2M 1% 5

FY 2022-2023 Governors Change Item Recommendations Fund FTE Amount $(000) General Clean Water 1.0 94.8 5.1 41.6 Environmental 5.0 4.5 Remediation Federal 5.0 0.0 12.6 0.0 Special Revenue 0.0 0.1 Closed Landfill Investment 0.0 5.6 Special Revenue 5.0 1.8 TOTAL 110.8 $71.3 6

Governors Budget Recommendations FY 2022 -2023 Biennial Budget Federal Funds Performance Partnership Grant

Federal EPA Performance Partnership Grants PPG Purpose: Cornerstone of Federal EPA/State relations, combines multiple environmental grant programs into a single grant. Governing Law: 40 CFR 35, State and Local Assistance, Subpart A, Environmental Program Grants, and also are subject to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards statutes. Use: PPG funds can be used to carry out any activity that is allowable under at least one of the environmental program grants, consistent with a negotiated work plan. The ability to fund a broad range of activities across media is one of the most flexible features of PPGs. Match: The PPG grant utilizes a single, composite minimum cost share based on the match or maintenance of effort requirements of the categorical grants included in the PPG. 8

Federal Legislation delegated responsibilities: Clean Air Act Comprehensive Environmental Response, Compensation and Liability Act Clean Water Act Federal Insecticide, Fungicide and Rodenticide Act (Dept of Ag) Toxic Substances Control Act Pollution Prevention Act Safe Drinking Water Act (MDH) Solid Waste Disposal Act 9

FY 2022-23 Base Federal Grants by Division ($43.8M) MPCA Division FTE FY2022 $(000) FY 2023 $(000) All Performance Partnership Grant Environmental Analysis and Outcomes 79.8 11,576 11,576 11.5 1,259 1,259 Industrial 3.6 527 527 Remediation 18.2 4,304 4,304 Resource Management and Assistance 3.1 874 874 Watershed TOTAL - 3,375 $21,915 3,325 $21,865 116.2 10

Performance Partnership Grant inclusion Grant Program Inclusion in PPG Match/MOE Air Pollution Control 40% match Water Pollution Control Nonpoint Source Management $2.3M 40% match Hazardous Waste Management 25% match Toxics Compliance and Monitoring 25% match Pollution Prevention Initiatives 50% match The PPG composite match for FY22 is $6.9 million from the Environmental Fund 11

Governors Budget Recommendations FY 2022 -2023 Biennial Budget Federal Funds TargetedGrants

FY 2022-23 Base Federal Grants by Division - EAO MPCA EAO Division FY 2022 FTE Match FY 2022 $(000) Water Quality Mgmt. Planning 2.3 No Match 322 Water Pollution Control Support 5.9 No Match 417 National Ground Water Monitoring - No Match 35 Particulate Monitoring 2.5 3.3 No Match 485 TOTAL 11.5 $1,259 13

FY 2022-23 Base Federal Grants by Division - Industrial MPCA IND Division FY 2022 FTE Match FY 2022 $(000) $527 Underground Storage Tank 3.6 25% 14

FY 2022-23 Base Federal Grants by Division - Remediation MPCA Remediation Division FY 2022 FTE Match FY 2022 $(000) Department of Defense MOA 1.3 No Match 279 Superfund State Programs 3.3 10% 882 Leaking Underground Storage Tank 10.3 11% 1,410 CORE Program 0.6 11% 112 Brownfields Response - No Match 731 Brownfields Assessment & Cleanup - No Match - Great Lakes Program 2.4 No Match 630 Great Lakes St. Louis River AOC 0.3 No Match 260 TOTAL 18.2 $4,304 15

FY 2022-23 Base Federal Grants by Division - RMAD MPCA RMAD Division FY 2022 Match FY 2022 $(000) FTE Natural Resource Damage Assessment (Common Loon) 2.1 No Match 376 MN Diesel Program 1.0 25% Match from VW 498 TOTAL 3.1 $874 16

FY 2022-23 Base Federal Grants by Division - Watershed MPCA Watershed Division FY 2022 FTE Match FY 2022 $(000) $3,375 Nonpoint Source Implementation - 40% Local Match 17

Governors Budget Recommendations FY 2022 -2023 Biennial Budget Federal Funds LGU Partners

Great Lakes Program St. Louis River AOC St. Louis River Area of Concern EPA investing $47M in federal funds as part the Great Lakes Restoration Initiative (GLRI). $25M State match from FY2017 bonding Work to be completed by Army Corp of Engineers Duluth Harbor (complete) Erie Pier Scanlon Reservoir and Munger Landing Thompson Reservoir More than 40 local, state, Tribal, stakeholder partners. 19

MN Clean Diesel Program - $498,000 Decrease diesel fuel emissions through grants and Loans for emission reduction technologies School Buses Heavy Duty vehicles Grants made statewide 20

Nonpoint Source Implementation Grants - $3.4 M Multi-year grants for local projects to address water pollution from diffuse sources Bassett Creek Waterhsed Management Commission Buffalo-Red River Watershed District Carlton Soil & Water Conservation District Carnelian-Marine-St. Croix Watershed District Cedar River Watershed District Chippewa River Watershed Project Chisago County Soil and Water Conservation District Comfort Lake - Forest Lake Watershed District Coon Creek Watershed District Dodge Soil and Water Conservation District Douglas Soil & Water Conservation District Faribault County Soil & Water Conservation District Goodhue County Soil and Water Conservation District Greater Blue Earth River Basin Alliance Gustavus Adolphus College Hawk Creek Watershed Project Heron Lake Watershed District Isanti Soil and Water Conservation District Lincoln County Soil and Water Conservation District Martin Soil and Water Conservation District Pipestone Soil and Water Conservation District Pomme de Terre River Association Prior Lake Sprink Lake Watershed District Red Lake Watershed District Redwood Soil and Water Conservation District Sauk River Watershed District Scott Watershed Management Organization SE Minnesota Resources Board Goodhue Shingle Creek Watershed Management Commission Todd County Soil and Water Conservation District Vadnais Lake Area Watershed Mgmt Org. Washington Conservation District Whitewater Joint Powers Board 21

Governors Budget Recommendations FY 2022 -2023 Biennial Budget Federal Funds Support

Federal Funds, FTEs and Positions Federal funds cover more positions than FTEs, because some positions are funded with both federal and state dollars. Amount Federal Share Base Budget $ Federally Funded FTE $43.8M 116.2 7.8% 14.6% Positions at least partially funded by Federal $ 201 25.3% 23

Federal Share of FY 2022 by Division (includes PPG) MPCA Division FY 2022 Fed $(000) FY2022 Pct Base $(000) Environmental Analysis and Outcomes 3,919 16,576 23.6% Industrial 2,762 18,577 14.9% Municipal 980 11,211 8.7% Operations 905 42,478 2.1% Remediation RMAD 4,539 2,604 118,630 53,552 3.8% 4.8% Watershed 6,206 15,541 39.9% EQB TOTAL - 1,274 - $21,915 $277,946 7.9% 24

Summary Federal funds comprise 8% of the MPCA FY2022-FY2023 base budget. The Governor s Budget contains no change items or increases in Federal Funds. The Federal EPA Performance Partnership Grant (PPG) is the largest source of Federal Funds (Flexible, Single MOU, Multi-media) and provides funding for delegated responsibilities. Targeted federal grants supplement a wide range of initiatives across the agency. Most federal grants support state-wide activities. Select grants have been effective in working with local partners St. Louis River AOC, MN Clean Diesel, Nonpoint Source. Federal funds support all/part of 25% of all positions and supplement the capability of all Divisions. 25

Questions? Minnesota Pollution Control Agency 26