PA Environment Digest Blog: DEP Budget Hearing: DEP Does Not Have Enough Staff To Meet Needs In Any Of Its Programs

DEP Secretary John Quigley was very direct in telling the Senate Appropriations Committee Thursday that his agency does not have enough staff to meet the needs of any of its programs because of persistent and continuous budget cuts over the last decade.

He added additional cuts would not only be “ruinous” for the agency, but also for the regulated community.
“DEP's ability to protect public health and the environment, and to perform basic functions like evaluating permit applications in a timely fashion, have been stressed to the limit,” said Secretary Quigley. “Further cuts will jeopardize the citizens we serve and the environment that we are obligated to protect, and harm the state's economy.”

In comments at the end of the 3-hour hearing, Sen. Pat Browne (R-Lehigh), Majority Chair of the Senate Appropriations Committee, said “a bunch” of DEP special funds will be “underwater” in the near future and many of them are for very important programs. He mentioned the Clean Water and Radiation Protection funds.

Secretary Quigley said the Storage Tank Fund will be out of money in mid-2017 and the Hazardous Sites Cleanup Fund in mid-2018.

Sen. Browne said other DEP funds do have money and could be looked at to support other programs and looked forward to working with DEP on those issues.

Secretary Quigley said DEP has been in a position for the last decade to do more with less. He noted the agency lost 14 percent of its staff, while the average agency lost 6 percent of staff.

He added, in another example, DEP spent $23 million for information technology a decade ago and just with inflation the budget should be $29 million. However, it is now just $16 million.

Secretary Quigley said DEP has identified 10 projects under the Governor’s Go-Time initiative to make the agency more efficient including--

-- Consolidating the grant application process into one platform;

-- DEP received permission to download apps to agency iPhone, which it could not do before, that will make staff more effective;

-- Adopted faster Internet service to its regional offices that will make work more efficient;

-- Start using iPads this year in the Oil and Gas Program, rather than carrying clipboards, that will double the productivity of DEP’s inspectors;

-- Instituting an electronic document management solutions to eliminate the need of 10s of thousands of square feet of warehouse space now used to store paper documents;

-- Replacing the eFACTS permit management and inspection reporting database, which is included in the Governor’s budget; and

-- Starting an electronic permit acceptance and review initiative in the mining program as a first step to making other permit processing electronic.

Here are other changes proposed for DEP in the Governor’s FY 2016-17--

-- $0 funds will be transferred from the Marcellus Shale Legacy Fund to DEP in FY 2016-17, $10.3 million was transferred in FY 2015-16; and

-- 2 new positions for Covered Device (electronics waste) Recycling Act administered at DEP.

Here is a quick summary of questions raised by Senators at the hearing--

-- EPA Clean Power Climate Rule: Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, asked why DEP is moving ahead with developing a plan to meet the Clean Power Climate Rule when the U.S. Supreme Court stayed the implementation of the Program.

Secretary Quigley said DEP is planning to continue working with stakeholders on the development of a Pennsylvania Plan to meet the EPA rule because one of the outcomes of the federal court challenge could be to meet the existing compliance schedule. He said it is worth a “deep-dive” on the issue, because that is the safest option.

At the same time, Secretary Quigley said it is unlikely DEP will be submitting a Plan to EPA before the legal challenges are decided.

He added, alternative/renewable energy and using Pennsylvania’s cleaner natural gas is the future and those trends will continue irrespective of what happens to EPA’s rule.

Sen. Kim Ward (R-Westmoreland) asked what the cost is to develop Pennsylvania’s plan to meet the requirement. Secretary Quigley said DEP is not hiring new staff to prepare the plan; about 6 staff use part of their time to prepare the plan. In addition, Pennsylvania is getting special modeling support from the National Governor’s Association to look at policy options.

Sen. John Wozniak (D-Cambria) said coal-fired power plants are important to the economy in Western PA and everything should be done to protect them as long as possible.

-- Proposed Waste Fee Increases: Sen. Yaw asked Secretary Quigley to explain the proposed $1.75/ton increase and broadening of the state waste disposal fee that would be deposited to DCNR’s Oil and Gas Fund. Secretary Quigley said the idea behind the fee is to even the playing field between municipal and construction and demolition and residual waste to which the fee is proposed to apply. Without the fee increase, the Environmental Stewardship (Growing Greener) Fund will be hit with a $35 million reduction in funding for watershed restoration and recreation projects [along with a $15 million reduction to the Hazardous Sites Cleanup fund].

-- Citizens Advisory Council/Oil & Gas Technical Advisory Board: Sen. Yaw asked about issues related to advisory committees, including DEP’s Citizens Advisory Council where its Executive Director was dismissed by the agency. He also noted the Oil and Gas Technical Advisory Board and the Conventional Oil and Gas Advisory Committee both recommended DEP not go ahead with Chapter 78 drilling regulation changes and DEP did. Sen. Yaw said it seems like DEP ignores its advisory committee or the agency dismisses people it doesn’t like.

Secretary Quigley said there was no policy differences with the Citizens Advisory Council, but dismissing the Executive Director is a personnel issue that he could not discuss.

Secretary Quigley said he thought it was healthy to occasionally have disagreements with its advisory committees as part of the discussion of regulatory requirements and policy. He noted the Oil and Gas Technical Advisory Board which advises DEP on issues related to Marcellus Shale drilling did not recommend delaying the regulations

He said DEP appointed individuals to the two oil and gas advisory committees from several sources, including Sen. Scott Hutchinson (R-Venango). He explained DEP added the Conventional Oil and Gas Advisory Committee because there was only one advisory group previously advising DEP on both the conventional and Marcellus drilling industries and they thought separate groups would be helpful.

-- Chesapeake Bay Program: Sen. Yaw said he was aware of a proposed Growing Greener III Program for a suggested $900 million with many, many items that were “nice to have.” He said some of those may have to be redirected to support the Chesapeake Bay Program and other programs the Commonwealth must do.

Secretary Quigley said there have been discussions with a variety of groups on a proposal and Gov. Wolf is anxious to have a conversation with members of the General Assembly about what should be in any new Growing Greener Program.

Sen. Scott Wagner (R-York) asked later for more information on the Chesapeake Bay Program on whether putting some of the required nutrient reductions out for bid would be a good idea. [The reference is to Senate Bill 724 that would be an ineffective way to address nutrient reductions that would not count toward the state’s Chesapeake Bay cleanup commitments.] Secretary Quigley said there are opportunities for market-based approaches to nutrient reductions, like the Nutrient Credit Trading Program, and DEP is now proposing changes to the program to make it more effective.

Secretary Quigley said there is an “incredible sense of urgency” in making the changes needed to make the Trading Program more efficient and effective and to address Pennsylvania’s Chesapeake Bay cleanup commitments.

Sen. Elder Vogel (R-Beaver) asked if the Penn State survey of farmers on conservation practices mentioned in the Chesapeake Bay Reboot will actually be used in the Chesapeake Bay Program. Secretary Quigley said the survey is part of an effort to get Pennsylvania farmers the maximum credit possible for conservation practices on the ground, but which have not be credited within the Bay Program.

Sen. Lloyd Smucker (R-Lancaster) said Lancaster County is at “ground zero” on Chesapeake Bay Program and there are concerns about the Bay Reboot proposed by DEP. He asked about the confidentiality of the farmer survey results. Secretary Quigley said Penn State is handling the survey and no data from individual farmers will be made available to DEP. It will be aggregated for DEP’s use.

Sen. John Eichelberger (R-Blair) asked what role county conservation districts will have in implementing the Chesapeake Bay Reboot and expressed concerns about district involvement. Sen. Lloyd Smucker (R-Lancaster) had similar concerns. Secretary Quigley said DEP had paid for 100 educational visits to farmers, but now DEP is proposing, instead, to pay for 50 enforcement visits to farmers. However, DEP is not asking districts to take enforcement actions. He emphasized the new program would be voluntary on the part of districts. Secretary Quigley said Pennsylvania has been trying to educating farmers for 30 years; now is the time to go to the next step.

He acknowledged there has not be enough outreach to districts about the reboot, noting DEP is meeting with districts next week to discuss Reboot in detail. Sen. Eichelberger said he is concerned about conservation districts being viewed as an “enforcer,” rather than being an entity that helps farmers.

-- Susquehanna River Impairment: Sen. Rob Teplitz (D-Dauphin) asked what the next step is in making a decision on listing the Lower Susquehanna River as impaired. Secretary Quigley said DEP does not yet have a specific source for the endocrine disruptors and herbicides that are the likely the causes for the smallmouth bass in the river. He said DEP will be doing a herbicide use survey and an extended water sampling program that will go up the river’s tributaries to try to identify sources.

-- Federal Mine Reclamation Fee: Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee, said the federal Abandoned Mine Reclamation Fund fee is set to expire in 2021 and wanted to know what is DEP doing to ensure it continues. Secretary Quigley said they are deeply engaged with the state’s Congressional Delegation to do everything we can to make sure the fee continues.

-- Coal Waste Power Plants: Sen. Yudichak (D-Luzerne) said he learned this week the Panther Creek waste coal power plant is cutting back its operations which provide not only energy, but mine reclamation benefits. He asked what DEP is doing to make sure these plants and their benefits continue. Secretary Quigley said the waste coal power plants are an “incredible” resource for Pennsylvania because of their multiple benefits. He said has been in discussions with White House officials on how the coal waste plants can continue to be viable. He added they also recognized their importance as they had the opportunity to comment on federal air quality regulations.

Sen. Randy Vulakovich (R-Allegheny) also expressed support for coal waste power plants and their multiple benefits.

-- Lead In Drinking Water: Sen. Yudichak (D-Luzerne) asked about what DEP is doing to prevent lead in drinking water problems. [Sen. Yudichak sponsored Senate Bill 1254 signed into law last year that lowered the lead content of pipes and other plumbing products as part of a program that has been in place in Pennsylvania since 1989.]

Sen. Vincent Hughes (D-Philadelphia), Minority Chair of the Senate Appropriations Committee, also expressed concerns about lead levels in children in Pennsylvania. He said he understands part of the problem is due to Pennsylvania’s older housing stock.

Secretary Quigley said DEP has a water sampling program for the 159 public water systems in the state and noted that none of Pennsylvania’s public water supplies exceed EPA lead standards. Secretary Quigley agreed with Sen. Hughes the problem is caused in large part by the older housing stock in Pennsylvania.

He said one problem DEP has is the Safe Drinking Water Program is down 25 percent in its staff due to the relentless cuts in DEP’s budget. The major impacts of all the budget cuts has disportionately fallen on water protection programs because they are supported by the General Fund. If we continue on this path, Secretary Quigley said, he is not confident their success with these programs can continue. DEP was asked to provide its recommendations on what it needed to properly support this program.

-- Pipeline Infrastructure Task Force: Sen. Yudichak (D-Luzerne) asked what parts of the Pipeline Infrastructure Task Force recommendations will require legislation to implement. Secretary Quigley said Gov. Wolf wants to use as much natural gas as possible for energy generation and to make things and pipelines are a key part of doing that. He said DEP is responsible for implementing 94 of the 184 recommendations and an internal task force has been formed to see how each of those recommendations will be implemented, including by legislation. DEP, he said, will also continue to reach out to stakeholders as this process goes forward. He noted the first recommendation was that DEP needed more staff.

-- Speed Of Oil & Gas/Other Permit Programs: Sen. James Brewster (D-Allegheny) asked what steps DEP is taking to speed up the permitting of oil and wells and related permitted processes and whether DEP had the staff needed for the program. Secretary Quigley said, “no,” DEP does not have enough staff to meet the needs of any of the regulatory programs or for the regulatory community, not just in the Oil and Gas Program. He said DEP is going to electronic permitting process and other changes that will help speed up the process and provide more transparency for the public.

Secretary Quigley said at the same time there is a responsibility on the part of the applicants to submit good applications. He noted last Fall his staff did an analysis of 2,600 randomly selected applications from DEP’s biggest programs-- the Chapter 102 erosion control and Chapter 105 stream encroachment programs.

He said 30 percent of the applications had technical deficiencies that slowed down DEPs review process. Only a handful of the 47 firms preparing those applications got passing grades in application preparation-- 1 consultant got an A, 5 consultants got a B, 7 got a C, 8 a D and 26 an F.

Sen. Scott Wagner (R-York) asked later if the list of substandard consultants is publicly available. Secretary Quigley said DEP has not gotten in the business of shaming companies, but wanted to work individually with consultants.

Secretary Quigley noted DEP’s Southeast Regional Office has four permit writers with over 200 permit applications on their desk [in the Chapter 102-105 programs]. He said additional cuts would not only be “ruinous” for the agency, but also for the regulated community. He said he would not come to the Governor or the General Assembly for more staff unless he first did as much as possible to reduce costs.

-- Extending Existing Permits: Sen. Mario Scavello (R-Monroe) suggested extending existing environmental permits rather than having companies re-apply for new permits as a way to save money and support businesses. Secretary Quigley said it would not be an appropriate solution to this issue, in particular where there are updated environmental protection standards that apply to issuing new permits. Investments in electronic permitting and other initiatives will help speed the permit process, he said.

-- Natural Gas Severance Tax: Sen. Kim Ward (R-Westmoreland) asked if the proposed 6.5 percent natural gas severance tax would allow for deductions for production costs. She noted the existing drilling impact fee, which would be retained under the Governor’s proposal, has a 5.5 percent effective rate. Secretary Quigley said the proposal does have credits for payments under the drilling impact fee. He also noted Pennsylvania drillers/producers have low production costs, and producers have been bragging about how low they are in announcements of recent business results.

-- Keystone Landfill/Act 101 Update: Sen. John Blake (D-Lackawanna) asked about the status of the Keystone Landfill expansion application. Secretary Quigley said DEP expects a response to the technical deficiency letter sent to Keystone in late Spring or early Summer. DEP has already started the air monitoring that local residents had requested with the federal Agency for Toxic Substances and Disease Registry. The results will be released to the public when they becomes available.

Sen. Blake followed up by saying he was working on an update to the 1988 Act 101 Municipal Waste Planning, Recycling and Waste Reduction Act saying there should be a review of state waste disposal fee and where it is directed and the materials included in the mandatory recycling program. Secretary Quigley said he would be happy to work with the Senator on an update. He also said other acts are due for a review as well, including the Act 537 Sewage Facilities Act.

Sen. Blake asked whether there was a way to set different requirements for imported waste. Secretary Quigley said court decisions have held waste imports are part of a “protected class” of interstate commerce.

-- Recycling Fund: Sen. Scott Wagner (R-York) asked for more details on revenues and expenditures from the Recycling Fund and noted the number of grants available to buy recycling containers and support local programs seems to be declining. [Sen. Wagner is the owner of PennWaste which provides waste and recycling services in Central Pennsylvania.] He said money should never have been transferred out of the Recycling Fund to balance the state’s budget. The Senator said “I'm more on (DEP’s) side than you think” on this issue. Secretary Quigley said $15 million was transferred out of the Recycling Fund to balance the budget several years ago. He also noted the amount of waste being disposed in Pennsylvania is declining.

-- Electronics Waste: Sen. Elder Vogel (R-Beaver) expressed concerns about shrinking options for electronics waste. Secretary Quigley said the problem needs a legislative fix that Rep. Chris Ross (R-Chester), but it is a real problem. He specifically expressed concerns about the illegal dumping of TVs, if local recycling programs started charging for recycling services instead of having electronics manufactures pay for recycling like they do now.

-- Hazardous Sites Cleanup Fund: Sen. Stewart Greenleaf (R-Montgomery) asked for the status of the Hazardous Sites Cleanup Fund and its funding. Secretary Quigley said there has been a 55 percent reduction in funding to the Hazardous Sites Cleanup Program with the end of the Capital Stock and Franchise Tax and said it will run out of money by mid-2018. [Note: If the increase and broadening of the state’s waste tipping fee is not adopted and deposited to the Oil and Gas Lease Fund, a $15 million transfer to the Hazardous Sites Cleanup Fund could not be made.]

-- Third Party Permit Reviews: Sen. Gene Yaw (R-Lycoming) asked, given DEP’s concerns about staffing, whether it would be possible to have third-party review of permits by consultants. Secretary Quigley said for the sake of public integrity he believes permit reviews and decisions should remain at a public agency. He said as an option might be what PennDOT has done. That agency pays for additional DEP staff to work on its permits.

-- Permit Fee Increases: Sen. Lloyd Smucker (R-Lancaster) asked about the status of permit fee increases. Secretary Quigley he would get the detailed information to the Committee, but noted 22 percent of DEP’s budget is General Fund, 28 percent is federal funds and the remainder is permit review or administrative fees. He said generally the agency review permit fees every three years and they are in that review cycle now.
[The Governor’s Regulatory Agenda published on February 27 shows DEP proposing permit fee increases for the coal and noncoal mining, Safe Drinking Water, Environmental Laboratories, Radiation Protection and Air Quality programs in the coming year. (PA Bulletin, page 1127)

-- Black Fly Control Program: Sen. Rob Teplitz (D-Dauphin) asked about the status of the Black Fly Control Program and whether it will be expanded. Secretary Quigley said the program would need more funding to be expanded beyond the cost-to-carry budget appropriation of $3.3 million included in the budget request.

-- Travel Ban: Sen. Bob Mensch (R-Lehigh) said he has had problems arranging a meeting with his local constituents and DEP on water pollution issues in Montgomery County because of the Governor’s travel ban that prevents certain travel by DEP employees. DEP offered to meet at the Norristown Regional Office, but that was not an acceptable solution. He said they did finally arrange for a meeting, but it wasn’t a good situation. Secretary Quigley said the travel ban has been lifted with the signing of the budget in December. He said DEP has a cost of doing business and that bill has to get paid, particularly during a budget impasse. He said DEP has tried to accommodate the public within its restrictions. Sen. Mensch said that is not a good way of doing business. He noted the Governor spent over $30 billion during the impasse, and said there is a lesson here to be learned.

Click Here for a copy of Secretary Quigley’s written testimony. Click Here for audio and video of the Senate budget hearings.

House Budget Hearing

DEP’s House Appropriations Committee budget hearing is March 1 at 9:30. Click Here to watch House hearings live.

Budget Background

DEP received about $164.4 million in 1994-95 from the General Fund which increased to a high of $245.6 million in 2002-03. In the 2014-15 budget, DEP’s General Fund total was $141.4 million, after bottoming out in 2012-13 at $126.8 million, about half the highwater mark in 2002-03.

DEP’s authorized complement has shrunk from 3,200 in 2002-03 to its current 2,495, about 705 positions-- 22 percent-- as DEP Secretary John Quigley mentioned in a video report to DEP employees in a way that he considered them lost.

Two additional developments will cause a decrease in watershed restoration and other funding available to DEP in the coming year.

The Independent Fiscal Office released a new report last week saying the drop in natural gas prices means the state will collect $38 million less in Act 13 impact fees this year than it did last year.

A portion of those fees go to support the Environmental Stewardship (Growing Greener) Fund to support local watershed projects. As noted above, the Governor’s budget does not transfer money to DEP to support its Oil and Gas Regulatory Program for the coming year.

The Independent Fiscal Office issued another report saying royalty income from natural gas wells on DCNR State Forest land would decline by 40 percent in the current fiscal year going to the Oil and Gas Lease Fund.

Gov. Wolf’s budget includes a proposal to increase and expand the state waste disposal fee by $1.75/ton with the resulting $35 million in revenue to be deposited in the Oil and Gas Lease Fund.

The fee increase was necessary, according to the proposal, to allow the continued transfers out of the Oil and Gas Lease Fund to the Environmental Stewardship (Growing Greener) Fund ($35 million) and the Hazardous Sites Cleanup Fund ($15 million) required by Act 13.

If the waste fee increase doesn’t go through (it has to be done legislatively), these two programs would take a hit financially.

Here are the major budget documents from the Governor’s Budget Office--

-- FY 2016-17 Executive Budget

-- FY 2016-17 Line-Item Spreadsheet