Title V Fee Committee Status Report

Title V Fee Committee Status Report

May 1, 2009

State of Delaware
Department of Natural Resources and Environmental Control
Division of Air and Waste Management
Air Quality
Management Section
/ Annual
Title V Fee Committee Status Report
Calendar Year
2008
Published May 2009
This report meets the requirements of 7 Del. Code, Chapter 60, Subchapter VIII, Section 6097(j)

Table of Contents

Section / Page
Introduction……………………………………………………………………... / 1
Title V Fee Committee…………………………………………………………. / 2
Overall Program Costs………………………………………………………….. / 3
Fees Collected…………………………………………………………………... / 3
Current Staffing Levels…………………………………………………………. / 5
Program Accomplishments……………………………………………………... / 6
Title V Permitting Activities……………………………………………….. / 6
Title V Compliance Activities……………………………………………… / 7
Title V Enforcement Activities……………………………………………... / 7
Title V Planning Activities…………………………………………………. / 8
Title V Emission Inventory Activities……………………………………… / 9
Title V Air Monitoring Activities…………………………………………... / 10
Title V Small Business Ombudsman Activities……………………………. / 10
Other Special Accomplishments……………………………………………. / 11
Source Hours for the Previous Calendar Year………………………………….. / 13
Appendix A……………………………………………………………………... / 15

i

Title V Fee Committee Status Report

May 1, 2009

Introduction

Title V is an air pollution control program, based in federal law, designed to standardize air quality permits and the permitting process for major sources of air emissions across the country. The name "Title V" comes from Title V of the 1990 federal Clean Air Act Amendments which required that the U.S. Environmental Protection Agency (EPA) establish a national operating permit program. Accordingly, EPA adopted regulations [Title 40 of the Code of Federal Regulations, Chapter 1, Part 70 (Part 70)], which required states and local permitting authorities to develop and submit a federally enforceable operating permit programs for EPA approval. As a result, the State of Delaware developed 7 DE Admin. Code 1130.

Section 502(b) of the 1990 Clean Air Act Amendments requires that all sources subject to the permitting requirements under Title V of the 1990 Clean Air Act Amendments pay an annual fee, sufficient to cover all reasonable (direct and indirect) costs required to develop and administer the permit program. These requirements were incorporated into 7 Del. Code Chapter 60, Subchapter VIII. These fees must be reviewed periodically (currently every three years) before the authorization expires to consider adjustments. In the State of Delaware, these annual fees cover both “Major Sources” and “Synthetic Minor” sources. EPA defines a Major Source as a facility that emits, or has the potential to emit (PTE) any criteria pollutant or hazardous air pollutant (HAP) at levels equal to or greater than the Major Source Thresholds (MST). The MST for criteria pollutants may vary depending on the attainment status (e.g. moderate, severe, serious, extreme) of the geographic “Designation” area and the Criteria Pollutant or HAP in which the facility is located. Sources may also elect to take voluntary limits to reduce their PTE to below the MST. These sources are called Synthetic Minor sources.

The Title V revenue is intended to ensure a stable level of support for the technically complex activities undertaken by the Department of Natural Resources and Environmental Control (the Department) to ensure both protection of human health and the environment and a reasonable level of service to customers seeking permits and other services. The services provided by the Department supported wholly or partially by this Title V fee revenue are summarized in a later section of this report called “Program Accomplishments” which include:

·  Permitting activities;

·  Compliance activities;

·  Enforcement activities;

·  Planning activities;

·  Emission inventory activities;

·  Air monitoring activities;

·  Small Business Ombudsman activities; and

·  Other special accomplishments.

These activities and the fees required to support this work are consistent with the EPA guidance for Title V programs. This report is intended to provide a reasonable amount of accountability over those activities and the fees assessed.

Title V Fee Committee

Delaware Statute established the Title V Operating Permit Program Advisory Committee[1] herein and specified that the membership of this so-called “Title V Fee Committee” include certain emitting business interests as well as members of the pubic and non-governmental organizations. The purpose or charter of the Title V Fee Committee is to assess whether the fees collected pursuant to 7 Del. Code Chapter 60, Subchapter VIII are adequate to ensure the effective implementation of the Program, and to make recommendations to remedy or improve any deficiencies or elements of the Program.

The committee has been operating for several years, and by working together has expanded its scope to include renegotiating the Title V fee structure periodically prior to expiration to ensure that the financial needs of the Air Quality Management Section and other Title V requirements are being met while the payment burden is distributed fairly across the Major Source and Synthetic Minor facilities. In order to do this, the Air Quality Management Section estimated the cost of the Title V Program through a detailed Workload Analysis. The results of the Workload Analysis then set the baseline for the total Title V revenue that needs to be collected annually for the next three years. Once the baseline is set, the Title V Fee Committee works with the Major and Synthetic Minor Sources to determine how the fees will be distributed fairly. See http://www.awm.delaware.gov/Pages/Title%20V%20Committee%20Information.aspx for the Workload Analysis that was used during the 2008 round of fee negotiations.

The Title V Fee Committee was very active in 2007 and 2008. In 2007 the Committee met on February 23 and March 30th to discuss applying a one time 20% surcharge to the 2008 Title V fees to meet program needs. The Committee agreed on this and the surcharge was approved by the Legislature and enacted on June 30, 2007. See http://legis.delaware.gov/LIS/LIS144.NSF/vwLegislation/HB+187?Opendocument for House Bill 187 which covered this one time surcharge. In the fall of 2007 the committee began meeting to discuss the Title V fee schedule for calendar years 2009 through 2011. See below for the summary results of each meeting:

1. October 26, 2007 – DNREC’s Air Quality Management Section (AQMS) staff presented the results of the Workload Analysis to the committee
2. November 12, 2007 – The Title V Fee Committee met to discuss how to apportion the total costs of the Workload Analysis into Title V eligible activities and Non-Title V eligible activities.
3. December 20, 2007 – The Title V Fee Committee met to discuss how other states charge their Title V and Synthetic Minor facilities to help determine how to equitably distribute the Title V fee burden
4. January 18, 2008 – The Title V Fee Committee met to determine the final amount that should be collected by Title V and Synthetic Minor facilities.
5. March 7, 2008 – the Title V Fee Committee met to discuss the Title V fee schedule for 2009 through 2011.
6. April 3, 2008 – The Title V Fee Committee met to finalize the Title V fee schedule for 2009 through 2011.

The agenda and materials for each of these meetings are available at: http://www.awm.delaware.gov/Pages/Title%20V%20Committee%20Information.aspx.

The new Title V Fee Schedule, which was supported by the title V Fee Committee, was presented to the Delaware General Assembly through House Bill 418. It was passed by the House on June 5, 2008, was passed by the Senate on June 19, 2008 and was signed by the Governor on July 3, 2008. This revised Title V Fee Schedule applies to Calendar Years 2009, 2010, and 2011. It can be found in 7 Del. Code Chapter 60, Subchapter 8 and is available at: http://delcode.delaware.gov/title7/c060/sc08/index.shtml#TopOfPage.

Title V Fees are billed annually in December for the next calendar year. Title V bills for Calendar Year 2009 were mailed in December 2008. Facilities can choose to pay their bill in one payment or in quarterly payments. If the facility chooses to pay their bill in one payment, it is due by February 1st. If the facility chooses to pay their bill in quarterly payments, the payments are due on February 15th, May 15th, August 15th, and November 15th. If a facility does not pay their bill, they will be sent three reminders. The third reminder is sent certified mail. If after the third reminder the facility sill does not pay their bill, enforcement action will be taken.

Overall Program Costs

See Table 1 for a summary breakdown of Calendar Year 2008 Title V Costs.

Table 1: 2008 Title V Costs

Salary / $2,255,079
Travel / $5,525
Contractual / $580,077
Energy / $3,866
Supplies / $18,446
Division Overhead / $300,000
Total / $3,162,993

Fees Collected

Title V fees are billed on a calendar year basis (January 1 through December 31), but are spent on a state fiscal year basis (July 1 through June 30). In addition, the calendar year revenue includes interest gained on the Title V account and quarterly payments made by some facilities that were billed in the previous calendar year but not paid until the current calendar year. This makes comparing revenue and expenditures difficult.

The total Calendar Year 2008 Title V revenue was $3,725,515 including interest and some quarterly payments from 2007 that were not paid until 2008. This demonstrates a 27% revenue increase from 2007. A 20% surcharge in Title V billing was approved for calendar year 2008 by the Title V Fee Committee to address a shortfall due to an inadvertent error by the Department and some other unexpected circumstances. Hence, the 27% revenue increase reflects a somewhat artificial apparent increase reflecting an unusually low 2007 number as a basis for comparison. This increase is also slightly higher that predicted as a few new unplanned synthetic minor facilities were added in 2007. See Figure 1 for a history of Title V billing and revenue since 1997.

Figure 1: Title V Billing and Revenue History

In 2008 82 Synthetic Minor and 62 Title V facilities were billed. A total of $3,555,900 was billed, however, as of December 31, 2008, $3,544,000 was collected. The difference of $11,900 was the result of two quarterly payments totaling $5,900 that had not been received and one non-payment for $6,000.

The Title V balance as of December 31, 2008 was $1,785,019. Using this carryover balance, the total amount of Title V fees billed in 2009, and projected expenses and revenue losses, a Title V balance of $1,228,479 is projected at the end of 2009. See Table 2 for this projection.

Table 2: 2009 Title V Balance Projection

Description / Starting Balance / Revenue / Expense / Resulting Balance /
2008 Carryover Balance / $1,785,019 / $1,785,019
2009 Title V Fees Billed / $3,537,704 / $5,322,723
2009 Unpaid Title V Bills / -$118,051 / $5,204,672
2009 Projected Expenditures Based Upon 2008 Expenditures / $3,162,993 / $2,041,679
Additional Division Overhead / $100,000 / $1,941,679
Enforcement Salary Support / $73,426 / $1,868,253
Additional 2009 Salary/Benefits Cost Due to Recently Filled Vacancies / $237,274 / $1,630,979
Projected Additional 2010 Revenue Loss Due to Facilities Closing or Switching to NM / -$402,500 / $1,228,479
Projected 2009 Carryover Balance / $1,228,479

Current Staffing Levels

The Air Quality Management Section is currently at a 89% staffing level or 11% vacancy rate. See Table 3 for a breakdown of staffing levels in each group within the Section.

Table 3: Air Quality Management Section Staffing Levels

Branch / Authorized / Assigned / Staffing Level / Potential Added Positions /
Administrator’s Staff / 10 / 10 / 100% / None
Air Surveillance / 14 / 12 / 86% / None
Engineering &Compliance / 30 / 25 / 83% / 2- RGGI[2]
Planning / 22 / 20 / 91% / 1 - RGGI
Temporary Positions / 2 / 2 / 100% / None
Seasonal Positions / 1 / 1 / 100% / None
Total / 79 / 70 / 89% / Future AQMS Total: 82

See Table 4 for future hiring actions that the Air Quality Management Section plans on taking.

Table 4: Air Quality Management Section Potential Hiring Actions (Not Approved by the Office of Management and Budget)

Branch / Pending Hires / Projected Level / Future Hires /
Administrator’s Staff / None / 100% / None
Air Surveillance / 2 / 100% / None
Engineering & Compliance / None / 83% / 6 –Total: 2-RGGI, 3 PMI (reclassified to EIV), 1 Paralegal II (reclassified to EIV)[3]
Planning / None / 91% / 2 Total: 1- RGGI, 1 PMI (reclassified to EIV)

See Table 5 for a list of hiring actions taken in calendar year 2008.

Table 5: Calendar Year 2008 Hiring Actions[4]

Date of Action / Name / Source / Position / Branch / Funding Source /
1/22/2008 / Gontkovsky, Kristoffer / External / ESIII / Planning / NSF/Title V
1/28/2008 / Beebe, Lisa / External / ECS / Planning / ASF
5/25/2008 / Postell, Thomas / Internal / PMI / Planning / NSF/Title V
6/23/2008 / Winterling, Jill / External / ACII / Air Surveillance / Title V/ASF
10/14/2008 / Manson, Anthony / External / MAIII / Analytical Support Group / Title V/NSF
11/24/2008 / Hill, Nicole D. / External / ASII / Administrator’s Group / NSF/Title V
11/24/2008 / Russum, Laura / Seasonal to FTE / ASII / Administrator’s Group / Title V
11/24/2008 / Sarnoski, Charles / External / ESIII / Air Surveillance / NSF/Title V
12/1/2008 / Griesa, Timothy / External / SECS / Planning / NSF
12/8/2008 / Mood, Gerald / Seasonal to FTE / ESIII / Planning / NSF/Title V

Program Accomplishments

Title V Permitting Activities

Air Quality Management is responsible for all permitting activities at Title V and Synthetic Minor facilities. In calendar year 2008 the following permitting activities were accomplished:

·  1 initial Title V Permit was issued;

·  14 Title V Permit Renewals were issued;

·  3 Title V Permit Amendments were issued;

·  11 Synthetic Minor Construction Permits were issued; and

·  29 Synthetic Minor Operating Permits were issued.

The Air Quality Management Section is required to issue Title V Renewal Permits within 18 months or 547 days of determination of receipt of a complete application by 7 DE Admin. Code 1130. In calendar year 2008 the Air Quality Management Section issued Title V Permit Renewals within 383 days of application receipt on average. The shortest amount of time to issue a Title V Permit Renewal was 179 days while the longest amount of time was 559 days. This was the only permit that was not issued within the 547 day timeframe.