1. Chapter 92a Fee Amendments Proposed Rulemaking Water Resources Advisory Committee Harrisburg, PA March 24, 2016 Tom Wolf, GovernorJohn Quigley, Secretary

2. Chapter 92a, NPDES Permitting, Monitoring and Compliance, was published as final rulemaking on October 9, 2010. 25 Pa. Code § § 92a.26(h) and 92a.62(e): “The Department will review the adequacy of the fees established in this section at least once every 3 years and provide a written report to the EQB.” Regulatory Requirements

3. NPDES permit application reviews Monitoring and compliance Program administration Program management Surface water assessment Fee Related Activities

4. Program Expenses - Fiscal Year 2012 Fee Related Activities

5. Managers / Supervisors Engineering Staff Inspectors Biologists Administrative Staff Program Implementation: Personnel

6. FTEs 1 - Fiscal Year 2012 (Total 185) Personnel 1 FTEs include both DEP Central Office and regional staff

7. Chapter 92a Revenues and Expenses 192a Application and Annual Fees are deposited into multiple sub-funds within the Clean Water Fund. 2The EPA Section 106 Grant requires a state match. Historically the match was approximately $5 million. The 92a fee package intended to generate $5 million from Application and Annual Fees, but has generated only 70-80% of this objective. In addition to the Section 106 base grant, DEP also receives a supplementary 106 grant and a 604(b) grant, and these funds are included in this line item. Source 1 FY2011 FY2012 FY2013 FY2014 FY2015 92a Fee Revenue $3,632,255$4,125,558$3,600,000 Federal Funds 2 $6,905,078$6,648,800 Total Revenue$10,537,333$10,774,358$10,248,800$10,248,000 Expenses$17,515,972$18,713,590$19,120,015$19,369,439$19,623,852 Ratios 0.60 0.58 0.540.530.52

8. Of the approximately $20 million in annual expenses to administer the NPDES program, only 18% comes from NPDES fees Since 2007, DEP has lost 74 positions from the Clean Water Program and Bureau of Clean Water, 65 of which had a direct role in implementation of the NPDES and WQM permit programs Problem Statement

9. DEP is seeking to restore the 65 positions lost through increasing NPDES and WQM permit fees. Restoring these positions is deemed critical to serve DEP’s mission and fulfill commitments made in DEP’s local water quality and Chesapeake Bay initiatives. New revenue required = $9 million per year ($8 million of which will come from NPDES) Proposed Solution

10. Individual NPDES application and annual fee increases phased in over 10 years (2 permit cycles) Removal of the current $2,500 “cap” on GPs The average fee (across all categories) is currently $1,600; this will increase to an average of $2,340 initially and then $3,200 five years after the rule is final Proposed Solution

11. Automatic fee adjustment every 3 years based on the change in the consumer price index (CPI), published in the PA Bulletin Flexibility for DEP to eliminate fees for permit renewal applications (i.e., annual fees only) Flexibility for DEP to establish specific calendar due dates for annual fees Proposed Solution

12. Comparison – NPDES Permits

13. Comparison – NPDES Fees

14. Chapter 91 Fee Amendments Proposed Rulemaking Water Resources Advisory Committee Harrisburg, PA March 24, 2016 Tom Wolf, GovernorJohn Quigley, Secretary

15. 25 Pa. Code § 91.22 establishes Water Quality Management (WQM) permit application fees WQM fees for most permits were established in 1971 – the consumer price index has increased 585% since that time Regulatory Requirements

16. Of the approximately $1.4 million in annual expenses to administer the WQM program, less than 10% comes from WQM fees Since 2007, DEP has lost 74 positions from the Clean Water Program and Bureau of Clean Water, 65 of which had a direct role in implementation of the NPDES and WQM permit programs Problem Statement

17. DEP is seeking to restore the 65 positions lost through increasing NPDES and WQM permit fees. Restoring these positions is deemed critical to serve DEP’s mission and fulfill commitments made in DEP’s local water quality and Chesapeake Bay initiatives. New revenue required = $9 million per year ($1 million of which will come from WQM) Proposed Solution

18. Increases in WQM fees that are commensurate with DEP’s level of effort Removal of the current $500 “cap” on GPs The average fee (across all categories) is currently $234; this will increase to an average of $1,645 Proposed Solution

19. Highest fees for new Major wastewater treatment facility permits and new wastewater land application permits Automatic fee adjustment every 3 years based on the change in the consumer price index (CPI), published in the PA Bulletin Proposed Solution

20. DEP is seeking restoration of 65 positions lost since 2007 directly related to implementation of NPDES and WQM programs under Chapters 92a and 91, respectively $9 million in new annual revenue needed to recover 65 positions ($8 million proposed for NPDES, $1 million proposed for WQM) Fees would be similar or less than comparable states Summary

21. Dana K. Aunkst, P.E., Deputy Secretary Office of Water Programs Lee A. McDonnell, P.E., Director Bureau of Clean Water Thank you.