Air Program Advisory Forum Fee Stakeholder Meeting March 2, 2020
Overview Today kicks off discussion about Air Program fees Topics include: • Background • Program Funding • Timeline • Discussion! 2
Department of Natural Resources Director’s Office Division of Other Direct Missouri Air Funded Positions Environmental Quality Conservation Commission Air Pollution Control Program Public Program Director Information & Legal Darcy Bybee & Admin – 4 FTE 2 FTE Regional Air Quality Planning Permits Offices Emily Wilbur - 16 FTE Kendall Hale - 25 FTE 22 FTE Fiscal and Budget Environmental Air Quality Analysis Deedra Beye-Stegeman - Services Steve Hall - 17 FTE Program 3 FTE 18 FTE Compliance & Enforcement GVIP Richard Swartz - 17 FTE David Offu - 7 FTE 3
Air Pollution Work – Funded by Air Fees • Air Pollution Control Program • Five Department Regional Offices • St. Louis, Kansas City, Northeast, Southeast, & Southwest • Environmental Services Program • Air Pollution Work—Funded by Local Fees • Local Air Agencies • St. Louis County, St. Louis City, Kansas City, & Springfield • Work dependent on agency Total: approximately 150 full-time staff 4
Air Program Overview • Air Program’s web site: http://www.dnr.mo.gov/env/apcp/index.html • Overview of Air Pollution Control Program staffing and work duties: https://dnr.mo.gov/env/apcp/airadvisory/docs/2019- 03-01-regform-overview-presentation.pdf • 2014-2016 Fee Stakeholder information: https://dnr.mo.gov/env/apcp/airadvisory/index.html 5
Background Air Program and fee authority: • Missouri Air Conservation Law, 643 RSMo • RSMo 643.079 ‘… the DNR may review fees and propose changes after holding stakeholder meetings…’ ‘… the DNR shall submit a proposed fee structure with stakeholder agreement to the air conservation commission…’ 6
Background on Fees Fees adjusted based on 2014/2015 Fee Stakeholder discussions: • Emission Fee – $48/ton (increased from $40), effective 2016 • Permit Fees – effective 2017 • $75 per hour for construction permit review (increased from $50) • New tiered approach for operating permit • New filing fees for construction permits and portable plants • Asbestos Fees – effective 2017 • GVIP Fees – unchanged 7
What We’ve Done – Examples (1 of 3) Rule Changes: Removed Basic Operating permits Removed Open Burning permits Red Tape Reduction process eliminated rule backlog Monitoring network savings Outsourced filter weighing, remote quality checks, discontinued sites and equipment, plan for equipment replacement, reduce sample frequency Discontinued evaluation of certain federal area source rules 8
What We’ve Done – Examples (2 of 3) Shared lease of building will save rent Continue and expand electronic systems Scanning hardcopy reports Converting to electronic fileroom Electronic correspondence Eliminated one copier and one printer Multi-function machines save under contract General streamlining of workflows 9
What We’ve Done – Examples (3 of 3) Only essentials: Training costs, electronic options when possible Office supplies “Core function duty” travel Reduced spending on commission meetings Scrutinize every vacancy prior to filling These are some of the items we’ve done, and we’ll These are some of the items we’ve done, continue to look for savings and we’ll continue to look for savings 10
Ozone Concentration St. Louis Kansas City Rural Year 11
Chargeable Emissions and Fees Due 240,000 $9,000,000 $8,623,280 $8,500,000 220,000 $8,000,000 215,582 200,000 $7,500,000 $6,721,920 $7,000,000 180,000 $6,500,000 160,000 $6,000,000 $5,500,000 140,000 140,040 $5,000,000 120,000 $4,500,000 Emission Fee: $40/ton Emission Fee: $48/ton 100,000 $4,000,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 Chargeable Emissions from Point Sources in Missouri Emission Fees Due 12
MDNR Emission Fee Historic Trend of the Emission Fee Rate EPA Emission Fee $60.00 $55.00 $50.00 $45.00 $40.00 $48.00 $35.00 Fee Per Ton $40.00 $30.00 $33.00 $34.50 $31.00 $34.00 $25.00 $25.70 $20.00 $15.00 $10.00 $5.00 $0.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Emission Year 13
What are other states doing? Researched 10 states around Missouri • Fees vary by permit type • Flat fee by industry and/or permit type • Smaller emitters pay less or nothing • Similar fee structure states: $70/ton IA, NE; $53/ton KS Unique fee structures • Pay on allowable emissions • Pay higher of industry-type inspection fee or emission fee • Vary fee by pollutant • Set funding amount needed to operate program, divide by tonnage to get fee/ton annually 14
2018 Facilities by Permit Type 2018 Total Emissions by Permit Type Non-Title V Title V 5.03% 21% Title V Non-Title V 94.97% 79% 15
Today’s Focus: Long term funding viability • While air quality continues to improve…fee revenues to operate program decrease • We’ve reduced workload where we can, but it is not reducing proportionally. • We do expect expenditures to increase. 16
Program Funding 17
Actual Operating Expenditures Excludes Pass Through, All Fund Sources $14,500,000 $14,000,000 $13,500,000 $13,000,000 $12,500,000 $12,000,000 $11,500,000 $11,000,000 $10,500,000 $10,000,000 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Actual Actual Actual Actual Actual Actual Actual 18 Air Stakeholder Meeting March 02, 2020
Factors for Future Emission Fee Revenue • 5 year trends • Pending projects • Input from facilities • Future federal regulations 19
Annualized Revenue Assumptions • Reflects projected 5 year (FY2023-2027) average for all funds • Federal, Permit, Asbestos, and GVIP projections held constant • Includes projected emission fee revenues at current emission fee of $48/ton: FY2020 to FY2022 – sustainable FY2023 – 6% reduction from FY2019 actuals FY2024 – 2% reduction from FY2023 projection FY2025-2027 – same as FY2024; further reductions unknown This is our best projection of revenue. 20
Actual and Projected Air Pollution Revenue (excludes Pass Through) $14,000,000 $12,000,000 $10,000,000 GVIP Fees $8,000,000 Asbestos Fees Other Federal $6,000,000 Federal 105 Non Title V Fees $4,000,000 Title V Fees $2,000,000 $0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 Projected Actual 21 Air Stakeholder Meeting March 02, 2020
Projected Annual Revenues (excludes Pass Through) 5-Year Average (FY23-FY27) All Fund Sources GVIP Fees $2,183,605 Asbestos Fees $561,185 Title V Fees $5,576,705 Other Federal $723,611 Federal § 105 Performance Partnership Grant $2,339,470 Total $12,410,433 Non-Title V Fees Air Stakeholder Meeting March 02, 2020 22 $1,025,857
Actual and Projected Air Pollution Operating Expenditures (excludes Pass Through) $18,000,000 $16,000,000 $14,000,000 GVIP Activity $12,000,000 Asbestos Activity $10,000,000 Other Federal Activity Federal 105 Activity $8,000,000 Non Title V Activity $6,000,000 Title V Activity $4,000,000 $2,000,000 $0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 Actual Projected 23 Air Stakeholder Meeting March 02, 2020
New Projected Expenses (Pay Plan) Revised (Post-Governor Recommendation) FY21-FY28 FY21 – 3% Pay Plan FY22 Forward – 3.5% (Annual) Fringe 1% annual growth FY21 – 58% FY22 – 59% FY23 – 60% FY24 – 61% Assumptions: FY25 forward – 62% • The pay plan includes cost of living, market adjustments, and “above and beyond” for FY23-FY27 • 1% annual growth on fringe rate (capped at 62%) 24
Projected Annual Expenditures (excludes Pass Through) 5-Year Average (FY23-FY27) Operating E&E $1,542,443 Miscellaneous (Refunds, Statewide Central Work Comp, Unemp) Services, DNR Administration, OA $32,307 ITSD, Leases/Rents $2,799,330 Fringe $4,661,139 Personal Services $7,587,227 Total $16,622,447 Air Stakeholder Meeting March 02, 2020 25
Average Annual Shortfall Projection Projection Period FY23-FY27 Title V Shortfall $ 2,991,747 + Non Title V Shortfall $ 911,776 Emission Fee Fund Shortfall $ 3,903,523 Asbestos Fee Fund Shortfall $ 216,607 + GVIP Fund Shortfall $ 91,886 Average Annual Shortfall $ 4,212,016 26
Projected Annual Operating Expenses and Revenue Excludes Pass Through, All Fund Sources $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 5 Year Average Shortfall $8,000,000 $4,212,016 $6,000,000 $4,000,000 $2,000,000 $0 FY23 FY24 FY25 FY26 FY27 Shortfall $3,157,430 $3,778,834 $4,269,688 $4,702,564 $5,151,560 Operating Expenses Revenue 27 Air Stakeholder Meeting March 02, 2020
Projected Operating Expenditures (excludes Pass Through) 5-Year Average (FY23-FY27) All Fund Sources Asbestos Activities GVIP Activities $777,792 $2,275,490 Other Federal Activities $723,611 Title V Activities $8,568,452 Federal §105 Performance Partnership Grant Activities $2,339,470 Non-Title V Activities $1,937,632 Total $16,622,447 28 Air Stakeholder Meeting March 02, 2020
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