IDEM Update Indiana Industrial Operators Association April 18, 2007

Thomas W. Easterly, P.E., DEE, QEP Commissioner IN Department of Environmental Management

New State Laws impacting IDEM from the 2006 Legislative Session

HB1110 —Removal of Mercury Convenience Switches from End of Life Motor Vehicles.

SB 234 —Improving the rulemaking process for wet weather discharges and authorizing the Environmental Stewardship Program.

HB1117 —Simplifying the solid waste statutes and eliminating the groundwater task force.

SB 146 —Removing the Property Transfer Disclosure Form from Statute.

IDEM’s Environmental Goal

Increase the personal income of all Hoosiers from the current $0.88/$1.00 of the national average to at least $1.00/$1.00 of the national average while maintaining and improving Indiana’s Environmental Quality.

Pilot 2006 Environmental Performance Index

Yale Center for Environmental Law & Policy

Yale University

Center for International Earth Science Information Network (CIESIN)

Columbia University http://www.yale.edu/epi/

How Will IDEM Help Increase Personal Income?

Clear, consistent and speedy decisions  Clear regulations  Assistance first, enforcement second  Timely resolution of enforcement actions  Every regulated entity will have current valid permits without unnecessary requirements  Written Standard Operating Procedures  Improved staff training and development

Performance Metrics

Quality of Hoosiers' Environment

Result Target Comments

% of Hoosiers that live in counties that meet air quality standards % of CSO Communities with approved programs to prevent the release of untreated sewage 85% 48% 100% 100% 80% 20% 2 counties @ 964,725 of 6,271,973 failed 75% by 2007 is goal

Permitting Efficiency

Total calendar days accumulated in issuing environmental permits, as determined by state statute

Land Air Water

81,726 321,262 66,565 207,000 86,864 385,000 208 permits 699 permits 85,443 48,000 200,000 82 permits * Places emphasis on back logged permits

Compliance

Total percentage of compliance observations from regulated customers within acceptable compliance standards

Inspections

96.84% 97% 75%

Self reporting

94.99% 99% 95%

Continuous monitoring (COM)

99.61% 99.90% * Tracks observations and not just inspections 98.95%

Organizational Transformation

Budgetary agency dollars spent on

key

outside contracts for core agency functions.

Dollars spent on outside services per year $3,100,00 $0 $3,447,017 Will require increase in head count to accomplish

Counties above AQ Standards

January 10, 2005  Allen--Ozone    Boone--Ozone Clark —PM & Ozone Dubois--PM   Elkhart--Ozone Hamilton--Ozone     Hancock--Ozone Madison--Ozone Marion —PM & Ozone Shelby--Ozone  St. Joseph--Ozone January 1, 2007  Clark--PM  Marion--PM

Communities with Approved CSO Long Term Control Plans

Akron Albion Angola Aurora Avilla Berne Bluffton Boonville Brazil Bremen Brownsburg Butler Centerville Chesterfield Columbia City Columbus

Communities with Approved CSO Long Term Control Plans

Crawfordsville Crown Point Decatur Frankfort Goshen Greenfield Indianapolis Kendallville Knox LaGrange LaPorte Lowell Madison Markle Michigan City Milford

Communities with Approved CSO Long Term Control Plans

New Haven North Vernon Ossian Plainfield Plymouth Rockport Remington Seymour South Whitley Sullivan Valparaiso Veedersburg Wakarusa Warren Warsaw Waterloo Winamac

Permitting

IDEM is still meeting the statutory deadlines for permit issuance, as reported in past years IDEM now tracks the total calendar days a permit is in house and is applying a deadline to permits that traditionally do not have a statutory deadline; as a new interpretation to the intent of statutes

Total Permit Calendar Days

600000 500000 400000 300000 200000 100000 0 6/30 /200 5 9/30 /200 5 12/3 1/20 05 3/31 /200 6 6/30 /200 6 9/30 /200 6 12/3 1/20 06 3/31 /200 INIT 7 IAL GOA L Air Water Land

Percent of Activities Meeting Regulations

100.00% 98.00% 96.00% 94.00% 92.00% 90.00% 88.00% Inspections 6/3 0/2 005 9/3 0/2 005 12/ 31/ 200 5 3/3 1/2 006 6/3 0/2 006 9/3 0/2 006 12/ 31/ 200 6 3/3 1/2 007 INIT IAL GO AL Self Reporting Emission Monitoring

Office of Enforcement 2002-2007

Referrals Violation Letters Notice of Violations Agreed Orders Commissioner's Orders Dismissals

2002 2003 2004 2005 2006 2007* 887 17 607 33 467 47 547 203 591 231 134 47 561 311 15 125 457 349 15 121 318 314 6 44 202 258 41 48 427 417 38 46 66 62 7 5

Major Regulatory Initiatives

Regulations to facilitate the proper management of e-Scrap Rulemaking to require the removal of mercury convenience switches from automobiles prior to crushing or shredding Rulemaking to allow Performance Track (Indiana Environmental Stewardship Program) —Charter Members Announced in February 2007

Major Regulatory Initiatives

Outdoor Wood Fueled Boilers —EQSC Report recommended waiting to proceed until EPA issues its model rule in January 2007 Utility NOx, SO2 and Mercury emission rules:  CAIR, which regulates NOx and SO2, was adopted by the Air Pollution Control Board in November.

 CAMR, regulating mercury, was due to EPA on November 17, but Indiana does not have a Final Rule because there has been no resolution of issues between Utilities which favor the federal program and the Hoosier Environmental Council which favors a 90% reduction —APCB May 2, 2007

Major Regulatory Initiatives

Rulemaking to establish presumptive 8-1-6 VOC BACT controls to streamline permitting:  Acid Scrubbers for foundry core making amines — Withdrawn at Request of INCMA   Compliance with certain NESHAPs--Continuing Ethanol Plant BACT —Final Adoption 12/6/2006 Possible statewide regulations on the formulation of consumer products (i.e. air fresheners, deodorants, etc.) and paint products to ensure continued compliance with the Ozone standard and reduce our impact on neighboring States —First Notice Soon Adjustments to the Title V fees to fully fund the program —Air Board Adoption 12/6/2006

IDEM Fees & Fund Balances Title V Example

Significant Communication Challenge:  Auditor reports the “check book balance” for each fund on June 30  IDEM collects almost all of its Title V fees in the 2 nd Quarter of each year.

 IDEM’s June 30 fee balance is similar to a person’s check book balance right after depositing their paycheck  IDEM must pay all of its bills until the next pay day (next June 30) without overdrawing

IDEM Fees & Fund Balances Title V Example

For the last five years (FY 02-FY 06), Title V fund expenditures have exceed revenues by $5,771,277, yet the June 30, 2006 check book balance was $10,039,779 which many people believe is a healthy fund balance.

This fund balance is insufficient to cover the estimated $10,587,184 in expenditures up to the date of receipt of new funds in the 2 nd Quarter of 2007.

IDEM Fees & Fund Balances Title V Example

The “payday checkbook balance” minus the expenditures before the next pay day gives the “minimum cash in the check book” which is projected to be

negative

by $547,405 during FY 06.

The actuarial fund balance (assets less contracted liabilities) is much worse because the fund has $6,131,187 in contractual obligations and its projected lowest net worth is actually a debt of $6,678,592.

05-06 Available Cash by Month

FY 2006 Available Cash Balance

7-31-2005 5,160,120 8-31-2005 5,106,237 9-30-2005 2,670,495 10-31-2005 391,762 11-30-2005 (1,197,329) 12-31-2005 (1,170,121) 1-31-2006 (2,876,751) 2-28-2006 889,278 3-31-2006 5,464,556 4-30-2006 4,763,721 5-31-2006 4,182,213 6-30-2006 3,767,774

Available Cash Balance

6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 (1,000,000) (2,000,000) (3,000,000) (4,000,000) $5,160,120 $5,106,237 $2,670,495 $5,464,556 $4,763,721 $4,182,213 $3,767,774 $391,762 ($1,197,329) ($1,170,121) ($2,876,751) $889,278

2007 Legislative Issues

Budget —SB432  Federal Funds continuing to decrease  State General Funds fluctuate  Dedicated Funds: Except for Title V, fees collected for do not relate to program costs — some programs like Methamphetamine Clean-up and Mercury Switch Management completely unfunded (Recently adjusted Title V fees) Consider Prohibiting the Commissioner from renewing a permit for a facility that was not constructed or has not operated for the past 5 years —SB205

IDEM Budget Comparisons (w/o ELTF)

2005-2007 $240,798,257 Federal: $84,618,622 (35.1%) Red 2007-2009 $206,249,350 Federal: $57,530,097 (27.9%) Red Dedicated: $91,318,803 (37.9%) Green General: $64,860,832 (29.9%) Lt. Aqua Dedicated: $86,969,087 (42.2%) Green General: $61,750,166 (29.9%) Lt. Aqua

FY 07-09

IDEM Fees (Thousands)

Air Water Land Total Income Expense Spend Down Annual Proposed Increase Efficiency $19,815 $25,008 -$5,193 -$2,596 $2,500 $96 $22,100 $27,296 -$5,196 -$2,598 $2,461 $137 $27,500 $37,571 -$10,071 -$5,036 $4,094 $942 $69,415 $89,875 -$20,460 -$10,230 $9,056 $1,174

Fee Proposals

CAFO/CFO – 25 staff (17 FTEs) Fee Revenue: $42,000 Expenses: $1.2M

Proposed Fee Revenue: $2.8

Annual Number of permits issued: 121 Annual Number of Permit renewals: 435 Number of Compliance Inspections: 1100 (Proposed)

Fee Proposals

NPDES – 79 staff Fee Revenue: $3.8M Expenses: $6.2M

Proposed Fee Revenue: $4.75M

Annual Number of permits issued: 340

Proposed increase is 25%

Fee Proposals

Drinking Water/Wastewater Operator Certification – 6 current staff Fee Revenue: $146,000 Current Expenses: $471,000 Proposed Fee Revenue: $526,000 (would add 3 staff) Annual Number Certifications/tests issued: 4469

Wastewater Operator Biennial Renewal Fees

Classification Class I-SP Current $30 New $60 Increase $30 Annual Increase $15 Class I Class A-SO Class A Class II Class B Class III Class C Class IV Class D $30 $30 $30 $30 $30 $30 $30 $30 $30 $60 $60 $60 $80 $80 $100 $100 $120 $120 $30 $30 $30 $50 $50 $70 $70 $90 $90 $15 $15 $15 $25 $25 $35 $35 $45 $45

Water System Operator Triennial Renewal Fees

All $30 $150 $120 $40

Fee Proposals

Wetland/Water Quality Certification – 7 staff Fee Revenue: $0 (60% federal funds/40% state funds) Expenses: $538,000 Proposed Fee Revenue: $96,900 

Proposed General Permit Fee $100



Proposed Individual Permit Fee $200

Annual Number of permits issued: 760

Fee Proposals

Storm-water Fees – 8 current Staff Fee Revenue: $365,000 Expenses: $698,000 Proposed Fee Revenue: $1.4M (add field staff for inspections) Annual Number of permits issued: 4,050 Rules 5, 6 and 13 have been funded through fees and enforcement fines

Rule 5 Rule 6 1-999 1,000-2,999 3,000-4,999 5,000-6,999 7,000-9,999 10,000 and up Current Proposed $100 $400 $100 $150 MS 4 by Population $0 $0 $0 $0 $0 $0 MS 4 by Type $250 $500 $750 $1,000 $1,500 $2,000 Non-municipal $0 $500 County System $0 $2,000 Note: 25% reduction if MS4 is co-permitted Increase $300 per NOI $50 Annually $250 per NOI $500 per NOI $750 per NOI $1,000 per NOI $1,500 per NOI $2,000 per NOI per NOI per NOI

Fee Proposals

Hazardous Waste – 96 staff Fee Revenue: $1.3M

Expenses: $8M Proposed Fee Revenue: $4.1M

Permit Review, renewal, modifications and Corrective action plan reviews: 375 Federal funding (currently) 33% State funding (currently) 31% Fee funding (currently) 36%

Environmental Crimes Task Force

SB286 Environmental Crimes Task Force Created by SEA 195 (2005) has been meeting since October, 2005.

Chaired by Senator Kenley then Rep Walorski Developing more specific environmental criminal statutes.

2007 Legislative Issues

Streamlined Rulemaking when adopting Federal Requirements (including deadlines) without change SB154 Ask the 2007 EQSC to study Environmental Rulemaking Process SB154 Current Roles of Environmental Districts  Regional Water and Sewer Districts  Solid Waste Management Districts (Recycling) SB154

Questions Submitted in Advance

Q. Where are we with the wastewater operator rule?

A.

Work group completed its work in August 2006, Second Notice scheduled for May, 2007. Fees in SB 432.

Q.

What are we seeing in terms of alternative fuel in IN. Are we actually going to have convenient gas stations where you can buy bio fuel?

A. There are now 82 E-85 and 8 B-20 public pumps list is at: www.in.gov/isda/biofuels

Questions Submitted in Advance

Q. What is IDEM doing in terms of economic development to help attract or keep industry?

A.

Clear, Consistent and Speedy decisions.

Q. Why are we getting Copper numbers on industrial permits that are lower than background?

A.

Aquatic toxicity.

Q.

A.

Questions Submitted in Advance

We have heard that several departments have been downsized and wonder if that will impact our permit?

IDEM total staff is up 6 full time and 11 part time people since 12/31/2004. Permitting staffs have been increased and permit backlogs are going down. Still need staff in industrial pretreatment, operator certification, and storm water programs.

Q.

A.

Q.

Questions Submitted in Advance

When will the continuing education coordinator be replaced?

The current person is Tonja Fuller-White.

Where are we on the CSO Issue?

A.

Answered in presentation.

Q.

Questions Submitted in Advance

Where are we with the future of electronic reporting?

A.

1.

2.

3.

4.

Let $5.9 million contract with CGI for overall system. Going program by program, three years to completion.

First State approved by EPA for CROMEER.

Digital Inspector Virtual File Cabinet —some programs are on IDEM’s website now.

Questions?

Tom Easterly 100 N. Senate Ave. IGCN 1301 Indianapolis, IN 46204 (317) 232-8611 Fax (317) 233-6647 [email protected]