alaska air permit program

1. 1 Alaska Air Permit Program Program Mission, Workload, and Budget Issues Reintroduce myself Note that time allotted is one hour & importance of sticking to schedule Explain that this is a brief Overview All the details are in department’s workload and Funding analysis & benchmarking reports Please note your questions and seek answers in background documents. If still confused we can explain at a later time. Reintroduce myself Note that time allotted is one hour & importance of sticking to schedule Explain that this is a brief Overview All the details are in department’s workload and Funding analysis & benchmarking reports Please note your questions and seek answers in background documents. If still confused we can explain at a later time.

2. 2 Five Major topics, touch on each brieflyFive Major topics, touch on each briefly

3. 3 Air Quality Programs Air Non-Point & Mobile Sources Program manage small and diffuse sources of air pollution. Air & Water Data & Monitoring Program Technical support for air quality management Air Permits Program Overall Air Quality Mission includes more than air permit NPMS - Nonattainment, I&M, Ethanol, Air Toxics AWDM - run monitoring sites, Review Monitoring plan, review QA plansOverall Air Quality Mission includes more than air permit NPMS - Nonattainment, I&M, Ethanol, Air Toxics AWDM - run monitoring sites, Review Monitoring plan, review QA plans

4. 4 Air Permits Program Manage point sources of air pollution through permits and emission limitations State Implementation Plan Title I Permitting Title V Permitting Small Business Assistance Stationary Source Compliance Air Quality Complaints Mostly concerned with Clean Air Areas Implement stationary source programs required by the clean air act Describe eachMostly concerned with Clean Air Areas Implement stationary source programs required by the clean air act Describe each

5. 5 Legislative Intent U.S. Congress 1970 Clean Air Act - State Implementation 1977 CAA Amendments - New Source Review 1990 CAA Amendments - Operating Permits Alaska’s Implementation 1972 - SIP, including permit-to-operate 1983 - Revised, adds New Source Review 1990 - Statute, change to construction and operating permit Federal CAA has undergone changes over the past 30 years State law has followed changes CAA has federal system - State implement with federal oversight If state fails to implement, Fed implement Other sanctions can apply Loss of highway funds Federal permit fees Federal CAA has undergone changes over the past 30 years State law has followed changes CAA has federal system - State implement with federal oversight If state fails to implement, Fed implement Other sanctions can apply Loss of highway funds Federal permit fees

6. 6 Legislative Intent Alaska Legislature1 Have a program to prevent, abate, control, and identify air pollution. Comply with the federal Clean Air Act. Ensure continued receipt of federal highway funds. Implement in a manner that meets meets legislative goals. Legislature wanted to avoid sanctions & have state run program Adopted Statute in 1993 Stated purposesLegislature wanted to avoid sanctions & have state run program Adopted Statute in 1993 Stated purposes

7. 7 Legislative Goals Meet Federal requirements Efficient and cost effective permitting Accountability on Program Cost Recovery Ensure productivity of businesses Protect health & welfare of Alaskans. Goals that are listed in the actual session laws Deal with what the program is expected to achieve Goals that are listed in the actual session laws Deal with what the program is expected to achieve

8. 8 Legislative Goals Contain costs Minimize permitting staff foster accountability improve efficiency of government Use appropriate contracting authority Deal with how the department should achieve the goals Deal with how the department should achieve the goals

9. 9 Financial History Funding sources Federal Restrictions CAPF Initial Fee Rate Determination Changes in Initial projections Overall Program Cost & Change Summary Talk about some of the financial assumptions about delivering the air quality program, and the current status of those factors. Funding sources - discuss the funding sources we have been using Federal limits regarding what funding sources can be used How we decided on the initial permit fee rate What has changed in our original projections Brief summary of the current situation financially for the programTalk about some of the financial assumptions about delivering the air quality program, and the current status of those factors. Funding sources - discuss the funding sources we have been using Federal limits regarding what funding sources can be used How we decided on the initial permit fee rate What has changed in our original projections Brief summary of the current situation financially for the program

10. 10 Funding sources Clean Air Protection Fund (CAPF) Permit Administration Fee - Direct Costs Emission Fees - Indirect Costs Federal 105 Grant One-time Federal Grants FY 2003 - Some General Fund Statutory designated fund EPA grant for Clean Air Act implementation Has been static for several years Also supports the other air programs Requires state Match EPA reluctant to increase base - generally wants new work New work has been one time funds Most recent legislature has approved some general fund amounts to increase service in oil & gas sector Statutory designated fund EPA grant for Clean Air Act implementation Has been static for several years Also supports the other air programs Requires state Match EPA reluctant to increase base - generally wants new work New work has been one time funds Most recent legislature has approved some general fund amounts to increase service in oil & gas sector

11. 11 Initial Permit Administration Fee 1993 estimate assumed 45 positions billing with 31 billing 62% of their time. Remaining 38% unbilled time also funded by Permit Administration Fee Manager and clerical time also factored into the technical staff billable rate. Total Cost ($2,642,600) divided by billable hours (33,870) result in $78.02 per hour. Direct costs Direct costs include all permit review, issuance, compliance inspections, facility data reporting, and rectifying non-compliance (Not enforcement) Direct costs Direct costs include all permit review, issuance, compliance inspections, facility data reporting, and rectifying non-compliance (Not enforcement)

12. 12 Initial Emission Fee 1993 estimate of 14.7 FTE needed to provide the indirect services. Costs for these services totaled $1,104,500 Estimated 218,000 tons per year of billable emissions Divided cost by emissions to give Emission fee of $5.07 per ton. Indirect costs Not service to specific facility rent, utitlities, management, accounting, other costs Indirect costs Not service to specific facility rent, utitlities, management, accounting, other costs

13. 13 Changes in Initial Assumptions - Assessable Emissions Emission Fees pay for indirect costs Indirect costs have increased. Emission estimates have decreased Per Ton rate has not changed Indirect revenue has decreased Emissions are a way to pro-rate the indicrect costs Emissions are a way to pro-rate the indicrect costs

14. 14 Changes in Initial Assumptions - Assessable Emissions Explain slide Note DeclineExplain slide Note Decline

15. 15 Changes in Initial Assumptions - Billable Staff Time Total Staff reduced from needed 45 to actual 25. Estimated Direct Cost reduced proportionally 1993 = $2,642,600 2002 = $1,467,648 18,816 billable hours needed in FY 2002 14,506 billable hours annual average FY 99-01 Never authorized the number of staff deemed necessary in 1993 Prorated our estimated costs by number of staff Billable hours needed based on $78 per hour Have not been able to bill enough hoursNever authorized the number of staff deemed necessary in 1993 Prorated our estimated costs by number of staff Billable hours needed based on $78 per hour Have not been able to bill enough hours

16. 16 Changes in Initial Assumptions - Billable Staff Time Explain chartExplain chart

17. 17 Overall Program Cost & Change Summary EPA default cost $5.4 million operating permits program alone 1993 estimates required budget $ 3.7 million FY 2002 budget was $2.3 million. $2.3 million can not be raised through fees without a change in the fee rates.

18. 18 Problems Affecting Program Viability Service expectations not met Budget authority restriction affects ability to address service expectations Inability to generate revenue to match budget authority further reduces ability to meet service expectations Ability to generate fees is only one of our problems All three are linked Ability to generate fees is only one of our problems All three are linked

19. 19 Steps Taken to Address Service Revise Title V permit commitment Commit to Permit Fee Study Implementing Benchmarking findings Increased opportunity for permittee input in Title V permits Direct management intervention in permitting Management Decisions to address program problems Main steps taken to address service expectations Want to highlight Benchmarking Management Decisions to address program problems Main steps taken to address service expectations Want to highlight Benchmarking

20. Benchmarking study was conducted in the winter of 2000 to identify how we could improve construction permitting. Benchmarking study was conducted in the winter of 2000 to identify how we could improve construction permitting.

21. 21 Steps taken to Manage within Budget Authority Delayed hiring of staff Non-billable staff positions held vacant Restricted expenditures One time grant-funded benchmark implementation Temporary grant funding of construction permit position In addition to service improvements, we had to live within our budget authority Management decisions made to stay within authority Several of these are one-time or short term fixes - all have consequences Delayed hiring of staff effectively eliminated our small business assistance efforts. In addition to service improvements, we had to live within our budget authority Management decisions made to stay within authority Several of these are one-time or short term fixes - all have consequences Delayed hiring of staff effectively eliminated our small business assistance efforts.

22. 22 Step taken to Address Revenue Generation Force re-estimation of emission fees annually or default to potential emissions Establish billable hour targets for technical staff Collect significant past due accounts This deals with ability to generate the cash that our budget allows us to spend First designed to capture emission increases as well as decreases Second was to force staff to focus on direct permit service work Third was to pay attention to past due accounts which were previously unattended due to staff shortages This deals with ability to generate the cash that our budget allows us to spend First designed to capture emission increases as well as decreases Second was to force staff to focus on direct permit service work Third was to pay attention to past due accounts which were previously unattended due to staff shortages

23. 23 Direct impacts of Management Decisions Immediate Service impacts Service concerns that remain un-addressed Longer term consequences immediate impacts to ability to provide service Prevents us from addressing some of the other service concerns that remain unaddressed EPA concerns with progress of Title V issuance EPA concern with adequacy of Title V fees Loss of experienced staff Possible loss of state primacy immediate impacts to ability to provide service Prevents us from addressing some of the other service concerns that remain unaddressed EPA concerns with progress of Title V issuance EPA concern with adequacy of Title V fees Loss of experienced staff Possible loss of state primacy

24. 24 Immediate Service impacts Operating Permits Construction Permits Compliance Program Development Administrative Group Small Business Assistance program Air Permits management team