Thursday, January 25, 2018

DEP, DCNR Discuss Special Funds Use To Support Community Projects, Support Agency Environmental Missions With House Appropriations Committee

DCNR Secretary Cindy Adams Dunn and DEP Secretary Patrick McDonnell Thursday appeared before House Appropriations Committee to discuss how their agencies use special funds to support community-initiated projects and carry out the environmental and conservation missions of their agencies.
The 2-hour question and answer session covered uses of several funds-- the Conservation District Fund, Environmental Education Fund, Environmental Stewardship (Growing Greener) Fund, Hazardous Sites Cleanup Fund, Keystone Recreation Park and Conservation Fund and the Recycling Fund.
Secretary McDonnell noted DEP uses these funds as prescribed by statute to carry out its mission of protecting Pennsylvania’s air, land and water from pollution and ensuring the health and safety of Pennsylvania’s citizens through a cleaner environment.
He said the funds help bring brownfield and coalfield sites back into productive use, advance new sources of energy, support county conservation districts in their important on-the-ground work, assist municipalities in reducing the amount of waste going to landfills, support watershed protection and restoration, and help fund environmental education projects throughout the state. DEP, he said,  takes its responsibility as a trustee of these resources very seriously.
DCNR Secretary Dunn said communities all over Pennsylvania compete for and depend on these limited funds and match their own local funds to get local recreation and conservation projects done and when completed, the projects remain a huge draw for visitors, tourists, residents and businesses, noting tourism is critical to Pennsylvania’s economy  She said parks and trails are a major reason for visitation and spending.  
Here are some of the highlights from the hearing--
-- Volkswagen Settlement: Rep. Stan Saylor (R-York), Majority Chair of the House Appropriations Committee, said he would like to see a level playing field for rebates under the federal Volkswagen settlement.  Under the settlement, he said states can pay rebates of up to 75 percent for electric vehicles and up to 25 percent for natural gas vehicles.  Given Pennsylvania’s natural gas resources and saying natural gas vehicles like buses are cheaper than electric, the rebates should be similar.  McDonnell said there are restrictions in the federal settlement on the percentages and for who can get what and said there will be a request for information coming out shortly asking for ideas on projects to fund.  [Note: DEP had a series of listening sessions and comment period on spending the funds starting in May of last year. Click Here for more.]
-- Transparency Of Reporting Balances: Rep. Curtis Sonny (R-Erie) said this is an issue of reporting how the special funds are being used to the General Assembly in a transparent way and encouraged more sharing of information.  He noted the balances at times come from the length of time needed to complete a local or state project and asked how that could be shortened.
As an example of why balance show up, McDonnell pointed to the Recycling Fund saying annually DEP reserves $20 million a year for local recycling performance grants because they don’t know how much will be requested and that is reported, but it shows up in the balance in the fund.  Dunn said the issue seems to be constrained by accounting terminology, but the reality is when grants are awarded the funds are precommitted on their books.  
DCNR is also looking more closely at whether projects are truly ready to go at the time of application.  Sometimes it does take 3 to 4 years to complete a project, she said, because of construction seasons, municipal contracting procedures, land purchases and other considerations that can happen when communities do a project.  She said there is a constant conveyor belt of projects moving through the system.
-- Conservation District Funding: Rep. Tim Briggs (D-Montgomery) asked how conservation districts can receive more timely reimbursements from the Fund and why is the Conservation District Fund balance so high.  McDonnell explained the funding comes from several sources, but noted some of the primary funding comes through the Public Utility Commission from Act 13 drilling impact fees and the balance has a lot to do when fees are actually collected, once a year, and deposited.
Rep. Leanne Krueger-Braneky (D-Delaware) also asked about conservation district funding related to Mariner East 2 Pipeline construction violations.  She said she was referred by DEP’s Southeast Regional Office to conservation districts because DEP could not get out to look at the incidents for several days due to staff cuts. McDonnell said DEP has lost 700 to 800 staff to budget cuts over the past decade and a proposed cut to the conservation district Fund last year of $3.2 million would have also cut conservation district staff significantly.
-- Hazardous Sites Cleanup Fund: Rep. Mary Jo Daley (D-Montgomery) asked how has DEP coped with the loss of revenue from the Capital Stock and Franchise Tax to the Hazardous Sites Cleanup Fund.  McDonnell said the Funds is used to clean up state hazardous waste sites, pay federal Superfund costs, for emergency response, brownfields cleanup and more.  Traditionally, DEP had spent $45 to $50 million a year for the program from the Fund.  The tax had provided about $40 million a year.  Now DEP receives only Act 13 drilling fees and hazardous waste fees which yield only about $20 million a year.  He said over the next 2 years the agency will be spending those monies down, adding they will need to have a conversation about where the Fund goes from there.
-- Measuring Results From Fund Spending: Rep. Fred Keller (R-Snyder) asked if the agencies measured how well they are achieving the goals of the funds?  McDonnell said each of the funds has statutorily required purposes and those are typically reported on in the budget each year, in program metrics and outcomes and through annual reports. DEP is also taking additional steps to link program efforts and actual outcomes in the environment-- cleaner air and water-- for example. Dunn said they measure the success of the funds as part of the budget process as well, including the economic impact.
-- Environmental Education Fund: Rep. Maria Donatucci (D-Delaware) asked for background on how these funds are spent.  McDonnell said the Fund comes from 5 percent of all fines and penalties collected by DEP that are used to support local environmental education programs and provided some examples.  Dunn said DCNR receives 25 percent of the funds to support environmental education efforts in state parks and also provide some examples.
-- Keystone Recreation, Park and Conservation Fund: Rep. Sue Helm (R-Dauphin) asked for an overview of the Fund and its uses and why the balance is so large. Dunn noted it is the 25th anniversary of the Keystone Fund and it is the basic “bread and butter” fund used to support local community recreation, land conservation projects and improvements to state parks and forests.  She noted, projects can take 3 to 4 years for the reasons noted above which accounts, in part, for the large balance.
-- Underground Storage Tank Indemnification Fund: Rep. Helm also expressed a concern about withdrawing monies out of the Indemnification Fund and asked for an overview.  McDonnell said the primary purpose is to act as an insurance fund for storage tank owners, but recently the programs to clean up home heating oil tanks spills and other tank cleanup programs were reauthorized by the General Assembly.  Click Here for more.
-- Steps To Speed Up Projects: Rep. Doyle Heffley (R-Carbon) said his constituents are sometimes frustrated about the length of time it takes to complete projects that are being held up for bog turtles and other reasons  He pointed to PennDOT projects primarily.  What steps can  the General Assembly take to speed up these projects?  Dunn said there have been several initiatives to speed up projects like through better cooperation and coordination between agencies like PennDOT.  She also pointed to the Conservation Explorer tool to identify endangered plant and animal species more quickly to help speed projects.
-- Restrictions On Uses Of Special Fund: Rep. Leanne Krueger-Braneky (D-Delaware) asked if the monies in the funds and their uses are restricted.  McDonnell said each fund is different, but they each restrict the use of the monies for specific purposes to fund local projects or to support the administration of the programs they serve.  Dunn said it is the same with DCNR’s funds, they all have restrictions.
Rep. Saylor said they may need to look at giving agency Secretaries more authority to move funds from one to another based a more urgent funding needs.
-- Lack Of Staff At Agencies Holding Up Job Creation: Rep. Karen Boback (R-Lackawanna) also expressed concerns about the speed of permit reviews and was concerned that staff cuts at agencies have affected getting permits out in a timely way that prevents job creation.  McDonnell said DEP’s General Fund support has been cut consistently over the last decade and it was the water permit programs that have been affected the most because those permit review programs [erosion and sedimentation and water obstructions and encroachments] were funded by the General Fund.
-- Special Fund Cash Flow: Rep. George Dunbar (R-Westmoreland) noted there were heated debates within the Republican Caucus over whether the special fund balances are available for transfer or not.  He asked for more explanation of the funding for the Environmental Stewardship (Growing Greener) Fund balance and whether there are concerns about continuing revenues.  McDonnell said there is money flowing in and being spent on a constant basis in this Fund like most funds.  DEP receives about $24 million from ESF and commits those funds to local projects, but a significant portion goes for the debt service [up to $60 million] for the $625 million bond issue [that was all been spent years ago.] He said there is a “robust” discussion now going on about future needs, like for the Chesapeake Bay cleanup.  He also noted taking money out of this Fund, the Hazardous Sites Cleanup Fund and others would also also jeopardize matching federal funding.
-- Responding To Water Well Contamination: Rep. James Santora (R-Delaware) expressed a concern about finding private water wells, noting recent well contamination problems with Mariner East 2 Pipeline construction.  Dunn noted DCNR does register private water wells locations and recently enhanced the data system used to make water well locations available to the public.  McDonnell, with respect to cleaning up water wells, said DEP looks to responsible parties first to correct the problems, or failing that, to taking emergency action and recoups costs from responsible parties.  Funding would come from the Hazardous Sites Cleanup Fund, Storage Tank Fund or other appropriate funding source.
Click Here for a video of the hearing.  Click Here for Secretary Dunn’s testimony and Click Here for her handouts.  Click Here for Secretary McDonnell’s testimony and Click Here for the handouts.
Rep. Stan Saylor (R-York) serves as Majority Chair of the House Appropriations Committee and can be contacted by sending email to:  and Rep. Joe Markosek (D-Allegheny) serves as Minority Chair and can be contacted by sending email to:

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