Bay Program officials spent nearly three years wading through scientific analyses and exploring cleanup options before finally setting new water quality goals for the Chesapeake last spring.

Now, it has appointed a panel of business leaders, politicians and economic experts and given them the next six months to do something that may be even harder—finding the billions of dollars it will take to meet the new goals.

The 15-member Chesapeake Bay Watershed Blue Ribbon Finance Panel is charged with finding innovative solutions to pay for the huge nutrient and sediment reductions needed to improve water quality for fish, shellfish and and other creatures.

The diverse group, which includes former Virginia Gov. Gerald Baliles, former U.S. Interior Secretary Bruce Babbitt, Jim Perdue, chairman of Perdue Farms, and others, was called for by the Executive Council at its Dec. 9 meeting. Baliles will chair the panel.

At that meeting, both Virginia Gov. Mark Warner and Maryland Gov. Robert Ehrlich voiced concerns that the cleanup goals would not be met without new funding sources.

“Chesapeake Bay Program partners have provided world-class science to the Bay restoration effort for more than two decades,” Warner said in announcing panel members on March 11.

“Today we are adding a level of financial expertise that has rarely been seen in an ecosystem restoration effort, but we are convinced that it is critical to maintaining the heritage, economy and regional identity that is the Chesapeake Bay.”

The Chesapeake Bay Commission, an advisory panel representing the legislatures of the Bay states, estimated in a report last year that meeting all of the major commitments of the Chesapeake 2000 agreement, such as oyster restoration, wetland enhancements, education efforts and others, could cost $19 billion.

The panel, though, will focus on costs associated with the nutrient and sediment reductions needed to meet the Bay’s new water quality goals, said Rebecca Hanmer, director of the EPA’s Bay Program Office.

The commission estimated that could cost nearly $11 billion for the District of Columbia and the Maryland, Virginia and Pennsylvania portions of the watershed. The Bay Program has made similar estimates, although some recent work has suggested costs of some actions, such as wastewater treatment plant upgrades, may have been overestimated.

Hanmer said the panel would use those estimates as a starting point for its work, but would look at costs for the entire watershed, which also includes parts of New York, Delaware and West Virginia. Those headwater states were not signatories to the Chesapeake 2000 agreement, but have agreed to work toward the new cleanup goals.

“Our current estimate might be more like that same $11 billion, but for the entire watershed, not just the four jurisdictions,” Hanmer said.

The panel will look at funding opportunities available from federal, state and local governments, as well as from the private sector. It will also examine how existing programs can be used more effectively. For example, some ongoing funding sources, such as money from the EPA’s State Revolving Fund for clean water projects, may be used in more creative ways to support Bay cleanup projects.

“It’s not just about adding more money, it’s also about how can you operate in ways that will get a bigger bang for your buck,” Hanmer said.

The panel, she said, will not only look at overall costs, but will examine financial issues for particular sectors, such as wastewater treatment plants and agriculture. In addition, they will look at trends within sectors, such as agriculture, to see if new opportunities will emerge in the way the industry operates that could aid cleanup efforts.

Hanmer said the panel may also make recommendations about addressing issues that could help control future cleanup costs, such as managing growth in ways that reduce runoff.

Hanmer said the panel, which was named by Bay Program partners, brings together experts who have expertise beyond the Bay Program’s traditional focus on water issues. She noted that Baliles has worked on airline industry issues, and a New York appointee, Thomas Kelly, is well-known for helping industry and governments to find creative financial solutions to a range of environmental issues.

“That’s the kind of energy and creativity and expertise that I am sure we will be able to tap by bringing experts like this into the Bay Program family temporarily,” she said.

The panel was to hold its first meeting on March 30 in the District of Columbia. It is expected to meet three or four additional times before making its final recommendations, likely to consist of a menu of potential funding options, to the Executive Council this fall.

The Executive Council is the top policy-making body for the Bay cleanup effort, and includes the governors of Maryland, Virginia and Pennsylvania; the mayor of the District of Columbia; the EPA administrator; and the chairman of the Chesapeake Bay Commission.

Panel Members

Bruce Babbitt: Served as interior secretary during the Clinton administration and is a former governor and attorney general of Arizona. He currently is a director of the World Wildlife Fund and chair of the District of Columbia Mayor’s Environmental Council.

Gerald L. Baliles: Former governor and attorney general of Virginia, who signed the 1987 Chesapeake Bay Agreement. He is author of the book, “Preserving the Chesapeake Bay.” In 1993, President Clinton appointed him to chair the National Commission to Ensure a Strong and Competitive Airline Industry. He more recently assisted the United States in negotiating an “open skies” air transport agreement with Japan.

William C. Baker: President of the Chesapeake Bay Foundation, where he has worked for the past 28 years. He serves on a number of boards, many of which are Bay-related, and is a founding member of the Living Classrooms Foundation, the Metropolitan Washington Smart Growth Alliance and the Institute for Venice Lagoon.

Phyllis M. Cole: A resident of Petersburg, WV, she is special project consultant to local governments and served as senior staff to Gov. Bob Wise. She was the project manager for local flood protection projects, including the coordination efforts after the flood of 1985. She has served on the Interstate Commission on the Potomac River Basin since 1986.

Joseph Corrado: President of the Corrado American construction firm, and chairman of the Delaware Department of Natural Resources and Environmental Control’s Wastewater Facilities Council. He also serves on the board of directors of Delaware State University.

Nicholas DeBenedictis: Chairman of Aqua America Inc., and former secretary of the Pennsylvania Department of Environmental Resources and director of the state Office of Economic Development. He serves on several boards for regional economic and environmental organizations.

Penelope A. Gross: An elected official to the Fairfax County Board of Supervisors since 1996. She chairs the Metropolitan Washington Council of Government’s Water Supply Task Force and was recently elected to the Potomac Watershed Roundtable.

F. Henry Habicht II: A former deputy administrator of the EPA and former assistant attorney general for the U.S. Department of Justice where he directed the Environmental and Natural Resources Division. He is chief executive officer of the Global Environment & Technology Foundation and is a founding principal of Capital E. LLC. He serves on numerous boards and advisory councils.

James W. Hubbard: A member of the Maryland House of Delegates since 1992. He has a long history of community involvement and currently serves on the Metropolitan Washington Council of Government’s Air Quality Committee, Children’s Environmental Health and Protection Advisory Committee and the Chesapeake Bay Commission.

Thomas Kelly: President of the New York State Environmental Facilities Corporation, a public benefit corporation that promotes environmental quality by providing low-cost capital and expert technical assistance to municipalities, businesses and state agencies for environmental projects in the state. The corporation was one of the top bond issuers in the country in 2003.

James Patrick Muldoon: Chief Executive Office of METCOR since 1979, and a founding member of the Washington First Bank and chairman of the board of several business and professional organizations.

Jim Perdue: Chairman of the Board of Perdue Farms Inc., the family poultry business founded by his grandfather. He is active in poultry industry organizations and is a member of the board of several community organizations. He has a Ph.D. in fisheries from the University of Washington.

Terry L. Randall: A certified public accountant and president and CEO of Mellot Enterprises. He is former managing partner of the Global Group for Wolpoff & Company, LLP, Accountants and Consultants.

John McNeil Wilkie: A partner of Tatum CFO Partners, LLP. He is the former president of Eurotech Ltd. and former vice-chairman of the Morgan Guaranty International Bank. He is the District of Columbia’s representative to the Bay Program’s Citizens Advisory Committee.

James D. Wilkins II: A farmer and banker from Circleville, WV. He has a history of service to the community through membership in a number of boards and is currently co-chair of the North Fork Watershed Association.