FINAL REPORT
REVENUE PRODUCING SYSTEMS
IN SELECTED AIR POLLUTION CONTROL AGENCIES
a study by
CHARLES W. GRUBER P. E.
for the
CONTROL PROGRAMS DEVELOPMENT DIVISION
OFFICE OF AIR QUALITY PLANNING AND STANDARDS
ENVIRONMENTAL PROTECTION AGENCY
RESEARCH TRIANGLE PARK, NORTH CAROLINA 27711
SEPTEMBER 30, 1974
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MECHANICAL ENGINEER
OHIO REGISTRATION E26O5
CHARLES W. GRUBER
6309 PARKMAN PLACE CINCINNATI. OHIO 45213
FINAL REPORT
REVENUE PRODUCING SYSTEMS
IN SELECTED AIR POLLUTION CONTROL AGENCIES
(Short Title Fee Study)
Charles W. Gruber, PE
6309 Parkman Place
Cincinnati, Ohio 45213
Contract Number 68-02-
Project Officer Henry C. Thomas
Control Programs Development Division
Office of Air Quality Planning and Standards
ENVIRONMENTAL PROTECTION AGENCY
Research Triangle Park, North Carolina 27711
September 30, 197^
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ACKNOWLEDGEMENT
The author gratefully acknowledges the cooperation of the Control
Officers, Administrators and Staff of the agencies who contributed to this
study:
The City of St. Louis, Division of Air Pollution Control
The City of Philadelphia, Air Management Services
The City of Chicago, Department of Environmental Control
The City of New York, Department of Air Resources
The County of Los Angeles, Air Pollution Control District
The Bay Area, Air Pollution Control District
The Puget Sound, Air Pollution Control Agency
The State of Oregon, Air Quality Control Division
The State of Wisconsin, Bureau of Air Pollution and Solid Waste Disposal
Much of the data was developed especially for this project and required
considerable time and effort by the contributors. The individuals who
participated are named in the Agency Interview Summaries and they are
sincerely thanked for their assistance.
Many other individuals expressed opinions to the author personally
on the philosophical and practical bases regarding fees and charges for
the wide range of technical and supervisory activity required of the air
pollution control agency. These conversations were of assistance in
formulating the conclusions of this study.
The guidance of the Project Officer, Henry C. Thomas, and Staff of
the Control Programs Development Division, Office of Air Quality Planning
and Standards, U.S. Environmental Protection Agency was a major contribution
to the successful completion of this work, and this help and assistance
is gratefully acknowledged.
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DISCLAIMER
This report was furnished to the Environmental Protection Agency by
Charles W. Gruber, Cincinnati, Ohio, in fulfillment of Contract Number
68-02-1^5^. The contents of this report are reproduced herein as received
from the contractor. The opinions, findings, and conclusions expressed
are those of the author and not necessarily those of the Environmental
Protection Agency. Mention of company or product names in not to be considered
as an endorsement by the Environmental Protection Agency.
i i
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FEE STUDY
TABLE OF CONTENTS
I PURPOSE OF THE STUDY
II STUDY DESIGN
I I I REVENUE SYSTEMS
IV INTERVIEW SUMMARIES
V SUMMATION OF DATA
VI COMMENTS ON DATA
VII CONCLUSIONS
Appendix I Agency Interview Guide
in
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LIST OF TABLES
Table No.
1 Agencies Selected for Study
2 Revenue Producing Systems
3 Schedule of Fees - StL APCD
k Source of Funds - StL APCD
5 Service Revenue vs Service Costs - StL APCD
6 Schedule of Fees - PHIL AMS
7 Source of Funds - PHIL AMS
8 Service Revenue vs Service Costs - PHIL AMS
9 Schedule of Fees - CHI DEC
10 Source of Funds - CHI DEC
11 Service Revenue vs Service Costs - CHI DEC
12 Schedule of Fees - NYC DAR
13 Source of Funds - NYC DAR
14 Service Revenue vs Service Costs - NYC DAR
15 Schedule of Fees - LAC APCD
16 Source of Funds - LAC APCD
1? Service Revenue vs Service Costs - LAC APCD
18 Schedule of Fees - BA APCD
19 Source of Funds - BA APCD
20 Service Revenue vs Service Costs - BA APCD
21 Schedule of Fees - PS APCA
22 Source of Funds - PS APCA
23 Service Revenue vs Service Costs - PS APCA
2k Schedule of Fees - ORE DEQ
25 Source of Funds - ORE DEQ
26 Service Revenue vs Service Costs - ORE DEQ.
27 Schedule of Fees - VMS APSW
28 Source of Funds - WIS APSW
29 Service Revenue vs Service Costs - WIS APSW
30 Agency Data
31 Source of Income
32 Service Revenue
33 Service Revenue to Service Costs
3^ Sources of Operating Funds
35 Service Revenue vs Service Costs
36 Maricopa County, Arizona
37 State of Michigan
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I PURPOSE OF THE FEE STUDY
A. INTRODUCTION
The Clean Air Act of 1970 has demanded an almost explosive expansion
of state, regional, and local air pollution control programs. Funds for
such programs have come principally from general tax based revenues
augmented in varying degrees by federal grants.
Many control agencies of long standing have charged fees for con-
struction permits and required source inspections. Except for a few
recent developments, such charges have been nominal and exerted no signi-
ficant influence on the requirement for tax based funds and federal support,
New agencies created to meet the federal Clean Air Act requirements
appear hesitant to establish fee systems applying directly to regulated
sources. At present many states perform stipulated source inspections,
review and issue or deny permits to construct, or perform work related
directly to sources of air pollution with no applicable charges or fees.
A wide variety of policies exist with respect to service charges for
required agency operations.
B. PURPOSE
This study is to draw together the practices of several key agencies
with respect to charges for required services for the benefit of those who
might wish to utilize charges and fees for control activities. New
concepts in fees and charges are of interest and influence of fee systems
on emission reduction is studied.
Specifically, the purpose of the FEE STUDY is to investigate and
describe revenue producing systems in a number of state and local air
pollution control agencies. The study is to indicate how fees and charges
are collected, how they are disposed of, and how they relate to the agency
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funding process. The legal authority for implementing fees and charges,
and the level of charges in effect are included.
Adjunct to the principal purpose are the following:
(a) The influence fee systems have on the enforcement process
(b) Problems associated with collection and disposition of fees
(c) Administrative and legal processes required to adopt new systems
or change existing levels of charges
(d) A 'pulse-taking1 of the control agency administrators relating fees
and charges to agency operation.
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I I STUDY DESIGN
A. GENERAL
The design of the study is straight-forward. From the personal
experience of the contractor with the advice and assistance of the Control
Programs Development Division of the Federal EPA, nine agencies which have
differing fees and charges and which are local, regional,'and state
jurisdictions were selected for visitation by the contractor.
A prior federal study* generated background data which was also used
in the agency selection. No agency included in the federal study was
selected for this work, but significant information from federal report
will be included herein.
The variety of revenue systems expected to be used were considered
and a Schedule of Revenue Producing Systems to include all possible
arrangements used by agencies was constructed. An Agency Interview Guide
was then constructed to assist in the orderly development of the required
information and data during the agency visits.
The Guide, a copy of which is Appendix I of this report, incorporates
general agency data and the names of persons interviewed. The Schedule of
Revenue Producing Systems is included for convenience in recording. Inter-
related questions deal with legal authority, collection and disposition
of revenues, the influence of fees collected on budgeting and enforcement,
and the reaction of the administrators to new ideas or expanded systems.
The data requested relates to the dollar volume of fees and charges
by fee class together with the units involved. Funding data seeks to
establish costs broken down into the four major service divisions of an
agency, namely administration, engineering, technical and enforcement
"Report on a Study of Control Agency Revenue Fees. Office of Planning and
Management, U.S. EPA, June 197^.
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along with the estimate of the percent of each services related to the
revenue producing system. The source of funds was scheduled into the
following classes general or tax based; state support of local
or regional operations; federal; retained fees; and other sources of
funds to support the required agency programs.
In addition to the data collected and question response, general
information about the agency in the form of fiscal reports, annual reports,
organization charts and other documents were solicited to aid in the
reporting on each agency, as well as drawing conclusions for the study.
Visits were scheduled with agency managing officers or their repre-
sentative personnel and others who could furnish the objective data and
and the subjective evaluations sought. Their frank responses to the
opinion questions and the time and effort expended to produce the data
were major contributions to this work. Without such cooperation the study
could not have been accomplished.
After completing the visits, the output of the data and the opinion
responses were structured and completed. Data is summarized and conclusions
are drawn. The conclusions reflect
(a) Opinions of study agency representatives
(b) The compendium of agency practice from the federal studies
(c) The contractor's personal opinions shaded by the results of the nine
agency interviews
B. STUDY AGENCIES
Selection of the study agencies was guided by several parameters.
(a) They should include city, county, and regional agencies with fee
systems in operation.
(b) They should have some geographical distribution.
(c) The state agencies must not have been visited in any of the federal
studies.
(d) The systems in use should have variety. They should differ in nature
and length of time in force. Systems of long standing and new ideas
of recent implementation were considered of equal importance in
accomplishing the objectives of the study.
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The agencies selected are shown in Table 1. Each agency is designated
by an acronym to facilitate tabular presentation of data.
Des iqnation
StL. DAPC
PHIL AMS
CHI DEC
NYC DAR
LAC APCD
BA APCD
PS APCA
ORE AQCD
WIS APSW
Table 1. AGENCIES SELECTED FOR STUDY
Agency
City of St. Louis, Division of Air Pollution Control
City of Philadelphia, Air Management Services
City of Chicago, Department of Environmental Control
City of New York, Department of Air Resources
County of Los Angeles, Air Pollution Control District
Bay Area Air Pollution Control District
Puget Sound Air Pollution Control Agency
State of Oregon, Air Quality Control Division
State of Wisconsin, Bureau of Air Pollution and Solid
Waste Disposal
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I I I REVENUE SYSTEMS
A. GENERAL
Fees and charges have been used for many years to partially support such
activities as processing required permits to install, operating permits,
and annual inspection and certification programs. More recently, fees and
charges have been devised for meeting other activity costs, such as monitor-
ing and surveillance and technical service. Other sources of revenue
directly available to agencies are taxes earmarked by state law and civil
penalties. Five general groupings are used:
Group A - Charges made for specific activity
Group B - Charges authorized by state law to be assessed against
political sub-divisions of a region
Group C - Revenue systems authorized, but not instituted. This Group
was deleted, as all revenue systems approved but not used
could be identified specifically in the catalogued systems.
Group D - Specialized Charges
Group E - Fines and Penalties
To further structure the Systems, they are identified as:
F - for fixed fee applying to every application or billing. Frequently
a fixed fee is identified as a 'filing1 fee.
S - for charges levied according to a schedule of equipment size, cfm
rate, or some parameter of the equipment or process involved
V - a variable charge to reimburse the agency for the costs (either
direct or total) of performing a test or service.
Table 2 identifies the various systems and proved to be adequate for
the nine agencies surveyed.
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TABLE 2. REVENUE PRODUCING SYSTEMS
Group A
A.I Permits to Construct, (one time)
Al.l Permits to Operate (one time)
A2 Recurring operational permits (annual?)
"A3 Monitoring/Surveillance charges
/\k Source Analysis charges (Source test or witness)
A5 Fuel Analysis charges
A6 Business License fees (Solid fuel dealers license)
A7 Motor Vehicle Inspection fees
A8 Application for Variance or Hearing Board Proceedings
A9 Open Burning permits
A10
All
A12
Group B
Bl Earmarked taxes
B2 Contractural Services with Other Communities
Group C
Cl Authorized but not charged (Record why)
Group D (Specialized charges)
Dl Charges for Technical Reports and Information (LA)
Group E
El Fines and Penalties (Court assessed)
E2 Civil Penalties (Admin. Assessed)
Notes to Revenue Producing Systems
1. " Where automatic penalties are provided for follow by P.
2. Note the following
S for a scheduled (variable) fee
F for a fixed fee (the same for all applicants)
V variable depending upon time required (actual cost of the work)
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B. SYSTEM DESCRIPTION
A1 Permits to Construct
This system has perhaps the longest history of use. Its strength is
more as a regulatory tool than a source of operating funds. The charging
of the fee was not found to enhance the permit requirement, although it
was occasionally stated that the charging of the permit fee added 'stature'
or 'official' tone to the permit. Often the fee is in two parts, a filing
fee and an approval or denial charge.
The schedule ranges from a few broad classes or sizes to a very
detailed listing having as many as forty or fifty categories.
Often the regulatory statute includes as a condition for requiring a
permit, the phrases construct, reconstruct, install, or re-install, and
alter to make any replacement or alteration. The construction permit is a
valuable tool in maintaining the emission inventory of the region.
A1.1 Permits to Operate (one time)
Permits to operate are frequently required in addition to the construct-
ion permit. In other systems the approval of the construction permit
following completion is the authorization to operate. One system (Phila-
delphia) uses an indefinite (one time) permit to operate for small sources
as distinguished form the recurring or periodic re-inspection of major sources.
A2 Recurring Inspections for Operational Permits
This regulation is another powerful enforcement tool and where required
by the regulation is frequently accompanied by a charge to partially defray
the inspection costs. The period of re-certification is frequently one
year but may be longer (New York City is triennial) and some use "at least
once every three years" to permit the agency a degree of latitude. A
good re-certification system with adequate field inspection can be
expensive, but it pays big dividends in enforcement. As regulations
become more complex, the need for competent re-certification grows. The
emission inventory is up-dated by the reinspection process.
A3 Monitoring/Surveillance Charge
This system is perhaps the newest concept in charges levied against
sources. None of the above systems (Al, 1.1, or 2) involve the recovering
of costs of area-wide monitoring or surve?1 lance over sources. Surveillance
charges are designed to shift a major part of the agency costs from
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general tax based funds to air pollution sources. It is primarily an
annual billing to sources based on a specified formula using parameters of
pollutant emissions or size of source. The State of Michigan introduced
the concept. Wisconsin also has an A3 charge which is described in this
study. Since Michigan was not studied in this work, only the general
aspects of the Michigan system are reported from the Federal effort.
A*+ Source Analysis Charge and A5 Fuel Analysis Charge
A4 and A5 are similar and result in a charge to the source to recover
the actual costs of the service. This is a billing procedure and very
little use of these charges is made.
A6 Business License.
Business licenses are used as regulatory tools. Only St. Louis,
requiring Solid Fuel Dealer's License was found. The City of Cincinnati,
not part of the survey, also requires solid fuel dealer's licenses. In
both cities revenues are insignificant, less than $1000 for less than 20
licenses. In other areas, business licenses are required but are not
related to or regulated by the air pollution control agency.
A7 Motor Vehicle Inspection
A fee to be charged for reinspection of existing motor vehicles is
in the process of creation. Mostly state level programs, some are now
funded for development and some are in the study stage but none are
operational. In the survey agencies, none were involved in a required
motor vehicle reinspection program for which a fee is charged. Several
programs are limited to Metropolitan areas and several are 'sub-let1 to
other departments. Chicago DEC will fund an inspection for emissions as
add-on charge to current motor vehicle license, in the Department of
Transportation. Cincinnati is studying emission add-on to an on-going safety
lane inspection program. Since no programs are operational, no data shows
up in the revenue systems. Where funds are appropriated for developmental
motor vehicle programs as in Chicago and Oregon, the analysis deletes the
motor vehicle funds as they are significant amounts and would distort
comparisons with other agencies in the study.
A8 Application for Variance and A9 Open Burning Permits
Both categories are self explanatory.
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Bl Earmarked Taxes
Two agencies have assessing authority granted by State Law, Bay Area
APCD and Puget Sound APCA. These are not charges for service performed
and in operational costs-related service revenues they are separated out.
However, they are a realistic and sound method of determining the cost
sharing between political bodies of a regional agency. Both systems seem
to be working well with BA APCD based upon the property tax valuation and
PS APCA basing the charge per capita. Both rates of charges are set by
Boards made up of elected representatives of member communities. It is
significant that both agencies have been requested to investigate revenue
systems to shift some of the financial burden from general tax based funds
to other revenue methods including charges to air pollution sources.
82 Contractual Service
This group provides for an agency contracting with other political
entities, which contracts are paid from tax based funds as above. Since
the B2 programs add costs to the agency, they are included in operational
analysis. Such contracts are few and are a small fraction of total
operations.
Cl Authorized but Not Charged
This group was deleted as programs authorized but not begun were found
to be insignificant and fit into the already classified systems.
Dl Charges for Technical Service
When agencies are requested to furnish technical help or information,
they are authorized to bill the recipient for costs incurred in providing
the service.
El Criminal Penalties and E2 Civil Penalties
Criminal Penalties are catalogued as a revenue source but are not
included in any operational analysis since revenues always revert to the
community of jurisdiction. E2 Civil Penalties are those assessed by the
operational unit or an administrative board and are usually reflected in
the budgeting process of the agency. The Civil Penalty is found in the
newer programs and can be a major source of revenue (or costs as in New
York City) and is reported by those having access to the system as being an
effective aid to the enforcement effort.
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IV INTERVIEW SUMMARIES
A Summary of each agency visitation is prepared. Data for each
jurisdiction is given along with a commentary resulting from discussions
with appropriate personnel. Following the commentary is a summary table
of fees, a table of Sources of Funds and a tabular analysis of Service
Revenue vs. Service Costs. The tables are noted to show the basis for
determination where the data is calculated or estimated.
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A. St.L DAPC AGENCY INTERVIEW SUMMARY
AGENCY: CITY OF ST. LOUIS, DIVISION OF AIR POLLUTION CONTROL,
DEPARTMENT OF PUBLIC SAFETY
Charles M. Copley, Jr. - Commissioner
Cary J. Russell - Office Manager
HEADQUARTERS: k\3 City Hall, St. Louis, Missouri 63103
JURISDICTION: City of St. Louis
DATE OF INTERVIEW: June 6, 197^
PEOPLE SERVED: 622,000 (1970 Census)
AREA SERVED: 61.2 sq. mi.
NO. OF SOURCES: 739 (Registered Sources)
\k Solid Fuel Dealers Licenses
(Sec. Four No. 30) Source operation is the last operation preceding
the emission of the air contaminant, which operation results in the
separation of the air contaminant from the process materials.
REVENUE SYSTEM IN EFFECT AND LEGAL AUTHORITY:
A1(S) Permit to Construct. ORDINANCE 55923, EFFECTIVE June 22, 1971
Al.l(F) Permit to Operate. ORDINANCE 55923, EFFECTIVE June 22, 1971
NOTE 1: All air pollution sources existing at the time the original
ordinance was adopted did not pay a fee for registration. Now, only when
a new air pollution "source, or controls are installed on an existing source
or alterations are made to existing source or its control equipment are
fees required.
A6(F) Solid Fuel Dealers License - Chap. 647, RC I960.
SCHEDULE OF FEES: See Table 3,:
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: Only by legislative
action (ordinance) of the Board of Aldermen. The Agency with advice
from the Air Pollution Advisory Council recommends.
COLLECTION AND DISPOSITION: Payments required with application. Collections
by Agency are deposited to the General Fund without designation to the
Agency account.
COLLECTION COSTS: Minimal, less than one employee's time.
PROBLEMS IN COLLECTION: None. If fee is not paid the permit is not issued.
Collections are 100%.
GOVERNMENTAL UNITS EXEMPT: Federal, State, and Local governmental sources,
including public Boards of Education, are subject to ordinance
requirements, but do not pay permit fees.
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BUDGETING WITH RESPECT TO FEES: Since fees collected are deposited to the
General Fund and since the allocation of budgeted funds is not
contingent on collection of fees, there are no budgeting problems
related to permit fee system operation.
RETURNS IN TERMS OF POLLUTION CONTROL: The Agency can see no benefit in
pollution reduction from the fee system. Permit fees have been collected
for many years and those regulated and required to pay for permits
are accustomed to doing so.
GENERAL COMMENTS: Any major adjustment upward in fee schedules would
require legislative approval and would be strongly opposed by those
who are affected. There would be slim chance of adoption. New types
of revenue systems would be opposed by the Agency as disruptive to the
enforcement process, particularly if the Agency would become the
collection unit. The Commissioner singled out as objectionable a
charge for recurring annual inspection. He believes such a system, if
the charges produce significant revenues, would soon draw the
accusation that revenue producing is the prime beenfit and enforce-
ment is secondary.
TABLE 3. St.L APCD FEE SCHEDULE SUMMARY
Al Plan Examination and Permits for Installation, alteration, or
and replacement and for inspection and affixing labels.
Al.l
Fuel Burning and Source Operation
Basis of Fee. Net heat output, BTU/hr
Fee. $6.00 to $160.00
Refuse Burning Devices.
Basis of Fee. Manufacturers Maximum Operating Capacity
Fee. $60.00 to $100.00
For Registration of each source operation
Fee. $30.00
A6 Solid Fuel Dealers License
Fee. $20.00 for each 1icense plus
$ 2.00 for each truck over one
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TABLE k. StL DAPC SOURCE OF FUNDS FY
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANT
RETAINED FEES
OTHER
TOTAL
BUDGET
$ } 000
299.0
299.0
598,0
INCOME
$ 1 000
299.0
299.0
598.0
BUDGET
7,
50
50
100
INCOME
%
50
50
100
TABLE 5. StL DAPC SERVICE REVENUE VS. SERVICE COSTS FY 7k
AGENCY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
' (MONITORING)
ENFORCEMENT
OTHER
TOTAL
(D
SERVICE COST
Col. 2 i Col. 3
COST
$1000
144.2
72.1
179.7
202.0
593.0
AGENCY
BUDGET
Of
A>
2k
12
30
3k
100
REVENUE RELATED (2
SERVICE CCCT
Col. 4
COST
$1000
21.6
43.3
101.0
165.9
Col. 5
SERVICE
COST
%
»
15
60
50
4
27
SERVICE REVENUE
Col. 6
REVENUE
CLASS
Al
A1 . 1
A6
Col. 7
REVENUE
$1000
A
68.8 I
3.0
..k J
72.2
Col. 8
REV REL
SERVICE
COST
%
kk
kk
Col. 9
AGENCY
BUDGET
% .
12
12
NOTES:
(1) Service Division Costs estimated from ratios of Division personnel to
total personnel taken from organization chart 5/1/72.
(2) From an estimate of the percent of time each Service Division
contributes to the permit revenue system (from organization chart).
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B. PHIL AMS AGENCY INTERVIEW SUMMARY
AGENCY: CITY OF PHILADELPHIA, AIR MANAGEMENT SERVICES, PHILADELPHIA
DEPARTMENT OF PUBLIC HEALTH
Norman Glazer, Acting Director of Engineering
William Miller, Asst. Director of Engineering
Leon Randall, Administrative Officer
HEADQUARTERS: 4320 Wissahickon Avenue, Philadelphia, Pennsylvania 19129
JURISDICTION: City of Philadelphia
DATE OF INTERVIEW: August 15,
PEOPLE SERVED: 1,950,000
AREA SERVED: 128.5 sq. mi
NO. OF SOURCES: 11,000 one time licenses, plus 2100 annual licenses.
A source is a unit of equipment which requires a license, either one
time or an annual license. A unit of equipment is an article machine
or device which may cause the issuance of air contaminants. If the
article or device has a control apparatus attached to it or it is part
of the system, the control unit is associated with the process for the
purpose of permit or operating license. For Example, A boiler plant
with three fuel fired boilers equipped with an e.s.p. would be three
units for purpose of determining permit or license fee. An asphalt
batching plant which has a drying furnace equipped with a cyclone followed
by a bag house would be one process and would require two permits but only one
operating license.
REVENUE SYSTEMS IN EFFECT AND LEGAL AUTHORITY:
Al(S) Installation permits.Par 3-306&7 Air Management Code, effective
1969.
A1.1(S) Operating license (one time) Par 3-306&7 Air Management Code,
effective 1969.
A2(S) Operating licenses, recurring annually. (Same authority as
above). *
Note: The Al.l and A2 are described in the Philadelphia Regulations as
"indefinite operating license" and "renewable operating license"
respectively. In general, al1 units require operating licenses except
activity relating to household appliances, motor vehicles or other
equipment used on highways, any building or structure used exclusively for
dwellings containing fewer than 3 dwelling units, and fuel burning equip-
ment of a net load rating of 250,000 BTU per hour or less. All other
equipment that require license to operate shall be renewed annually
except where the rated capacity is less than 2,000,000 BTU per hour or
where gas or No. 5 grade or better fuel oil is the only fuel used for
boilers, warm air furnaces, hot water heaters and their burners and
stokers in which case an indefinite operating license is required.
Par 3-306, Air Management Code.
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The Air Management Code is Title 3 of the Philadelphia Code.
El Penalties, Par 3-103 Air Management Code
SCHEDULE OF FEES: See Table 6
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: Only by legislative
action of the City Council can new revenue systems be adopted or
existing fees revised.
COLLECTION AND DISPOSITION: For Al fees payments are required with the
application. Applications are approved and transmitted to the Department
of Licenses and Inspections where the permits are issued and fees accounted
for. Al.l and A2, Operating Licenses, Applications are received, reviewed
and bills are rendered for the fees. Here also, the Department of Licenses
and Inspections does the billing and collection. All revenues are deposited
in the general fund without earmarking for Air Management Services.
COLLECTION COSTS: Since billing and col lections are done by Department of
Licenses and ^spections, the costs of such activity could not be
determined. Air Management revenues are handled along with all other
licenses and fees required by the City of Philadelphia.
PROBLEMS IN COLLECTION: None, as the fee for installation permits is paid
with the application. For operating licenses, collection problems are
minimal. It was estimated that less than 1% of the billings are not paid on
the first billing. Follow-up by Field Inspection Service results in
collection of the 1% or in a few cases disapproval of the operating
license making it illegal to operate the unit.
GOVERNMENTAL UNITS EXEMPT: No permits of license or fees is required of
federal facilities. For State and Municipal facilities (including
Board of Education) application for permits and licenses are required
but no fees are charged.
BUDGETING WITH RESPECT TO FEES: Since fees collected do not become an item
in the operating budget, no problems arise from a possible reduced
col lection.
RETURNS IN TERMS OF POLLUTION CONTROL: The Agency believes there is no direct
effect upon enforcement or pollution reduction from the revenue system.
The benefits of the permit and operating license system are well estab-
lished. The only indirect benefit might be stated that charging the fee
adds an official 'tone1 to the permit therefore may be of some benefit.
Permit fees have been collected for many years in the City of Philadelphia
and for many permits and licenses other than Air Management Services and
the general population and contractors are 'accustomed1 to paying such
fees.
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GENERAL COMMENTS: Three years ago a city-wide study of costs vs revenue from
Inspections and Licenses indicated that some fees be revised upward to
match the revenue to direct costs of services. The $30 fee for boiler
license was increased from $20 and such adjustment was reported to create
the balance between revenues and direct costs. Table 8 Service Revenue
vs Service Costs indicates that the revenue is 60% of the costs. It is
pointed out that the costs of Table 8 are estimated total costs from budget
figures which include personnel fringe benefits and indirect costs. If
adjustments are made to include direct costs only then the revenue
from permits and licenses would balance the direct cost. The direct service
cost was not available in time to meet the deadline for this report.
Air Management Services Division contemplates no program of revenue review.
The funding of Air Management Services is dictated by overall City policy
of relating revenue from fees to cost of service as a means of apportioning
costs between specific service 'users' and tax payers generally.
TABLE 6 PHIL AMS Fee Schedule Summary
Al Installation Permits
Boilers, Warm Air Furnaces, Hot Water Heaters
Basis of Fee. Rated capacity BTU/hr output
Fee. $30.00 to $50.00
Incinerators and Crematories
Fee. $50.00 each
Industrial Processes and Other Equipment
Basis of Fee. Each process or unit of equipment
Fee. $25.00 to $50.00
Al.l Indefinite Operating License
Fee. $5.00 each
A2 Renewable Operating Permits
Basis of Fee. Rated capacity of fuel burning equipment or for process,
each uni t
Fee. $20.00 to $ 50.00
17
-------
TABLE 7. PHIL AMS SOURCE OF FUNDS FY 197**
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANTv
RETAINED FEES
OTHER
TOTAL
BUDGET
$1000
749.4
708.3
1458; 2
INCOME
$1000
749.4
708.8
1458.2
BUDGET
%
51
49
100
INCOME
%
51
49
100
TABLE 8. PHIL AMS SERVICE REVENUE VS. SERVICE COSTS FY 74
AGENCY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
' (MONITORING)
ENFORCEMENT
OTHER
TOTAL
SERVICE COST
Col. 2 Col. 3
COST
$1000
243
243^
554
408(1)
1458(1>
AGENCY
BUDGET
%
17
17
38
28
100
REVENUE RELATED
SERVICE COST
Col. 1*
COST
$1000
124s
32J
»
156
Col. 5
SERVICE
COST
%
50
8
11
SEK'.MCE REVENUC
Col. 6
REVENUE
CLASS
Al
Al.l
A2
Col. 7
REVENUE
$1000
8.2^1
2.5
b.9
76.3
>
s
93.9
Col. 8
REV REL
SERVICE
COST
01
/o
60<"
. 60
Col. 9
AGENCY
BUDGET
%
6
6
NOTES:
(1) Service costs are derived .from total budget estimates for FY 1974 and include
fringe benefits. The distribution to the various services was by the ratio
of man-years of the service to total agency man-years.
18
-------
AGENCY INTERVIEW SUMMARY
AGENCY: CITY OF CHICAGO, DEPARTMENT OF ENVIRONMENTAL CONTROL
H. W. Poston, Commissioner
Edward Petkus, Director Engineering Service Division
James Masterson, Industrial Process Permit Section
Joseph Coyne, Assistant Director, Division of Inspectional
Servi ces
Edward Markley, Accountant
HEADQUARTERS: 320 North Clark Street, Chicago, Illinois 60610
JURISDICTION: City of Chicago
DATE OF INTERVIEW: July 16, 1974
PEOPLE SERVED: 3,255,000
AREA SERVED: 227 sq. mi.
NO. OF SOURCES: 40,000 fuel burning, 3,000 industrial, 2,500 incinerators,
and uncounted commercial sources as dry cleaners, restaurants and
gasoline stations. Sec. 17-2.1, Article II of the Environmental
Control Ordinance defines a source as "Any and all sources of emission
of atmospheric pollution, whether privately or publicly owned or
operated. Without I'miting the generality of the foregoing, this term
includes all types of business, commercial and industrial plants,
works, shops and stores, and heating power plants and stations, building
and other structures of all types, including single and multiple
family residences, apartment nouses, office buildings, hotels,
restaurants, schools, hospitals, churches and other institutional
buildings, automobiles, trucks, tractors, buses and other motor
vehicles, garages, vending and service locations or stations, rail-
road locomotives, ships, boats and other water-borne craft, portable
fuel-burning equipment, incinerators of all types both indoor and
outdoor, refuse dumps and piles, and all stack and other chimney
outlets from any of the foregoing."
REVENUE SYSTEMS IN EFFECT AND LEGAL AUTHORITY:
A1(S) Permits to Construct (includes first permit to operate)
Sec. 17-2.44
Al.l(S) Original Inspection Fees, Sec. 17-2.45
A2(S) Annual Inspection Fees, Sec. 17-2.45
A4(V) Source Analysis Charge, Sec. 17-2.52. This charge has not
been activated.
E1(S) Criminal Fines and Penalties, Sec. 17-2.62.
All of the Sections quoted are found in Article II of the Environmental
Control Ordinance, Chapter 17 of the Municipal Code of Chicago.
Enacted December 16, 1969 and Amended January 1, 1973.
19
-------
SCHEDULE OF FEES: See attached. Table 9.
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: New fee systems or
new fees for existing systems can be adopted only by legislative action
of the Chicago City Council.
COLLECTION AND DISPOSITION: Al and Al.l Fees for permits to construct
and original inspection are paid for directly with the application
or by 'lump sum payment1 with the BuiIding Permit application. For
A2, Annual Inspections, bills are rendered by the Comptroller's office.
Disposition is by deposit to the general fund and budget to the Agency
does not include these funds.
COLLECTION COSTS: Not determined as collections for all city license and
fees is done by Comptroller's office and costs for Department of
Environmental Control operations are not separated.
PROBLEMS IN COLLECTION: On Al and Al.l fees, payment is with application.
On A2 fees, very little problem with collections. Estimate that less
than 1% are difficult or uncollectable.
GOVERNMENTAL UNITS EXEMPT: The regulations (Sec 17-2.50)provide for
remittance of all examination or inspection fees charged against
charitable, religious or educational institutions when such institution
is 'non-profit1. Governmental units are required to pay fees and
then claim refunds. The definition of 'person' (Sec 17-2.1) includes
'government corporation, minicipal corporation, city, county,
municipality, district or other political subdivision, department, bureau,
agency, or instrumentality of federa, state or local government...'
This section is all-inclusive, but there is discussion going on con-
cerning the remitting of fees to governmental entities.
BUDGETING WITH RESPECT TO FEES: Fees collected are deposited into the
Corporate Fund and budget does not include an item of revenues from
fees.
IMPACT ON TAX BASED FUNDING: Fees collected being deposited to the Corporate
Fund become an item of income to the City and adds to the tax based
revenue in a very small amount.
RETURNS IN TERMS OF POLLUTION CONTROL: The fees charged have no effect
upon pollution control.
GENERAL COMMENTS: For many years Chicago has charged fees for required
Inspections and such practice is accepted by the citizenry and contractors
as normal procedure. The agency management believes that a major upward
adjustment in DEC fees would be upsetting and draw complaints. Should
higher costs or other considerations indicate a need for revision,
careful study would be necessary to set the charges at a level which would
limit receipts to the proportionate share of the budget necessary to carry
out the program for which the fees are charged.
20
-------
TABLE 9. CHI DEC Fee Schedule Summary
Al Filing Fees for Inspection of Plans
Basis of Fee. Per filing of application
Fee. $5.00 to $15.00
Permits for installation, alteration of, or additions to
Fuel Bruning Equipment
Basis of Fee. Capacity in BTU/hr
Fee. $10.00 to $30.00
Refuse Burning Equipment
Basis of Fee. Sq. ft. of grate area
Fee. $5.00 to $25-00
Process Creating or Devise for Controlling Air Pollution
Basis of Fee. One unit operation of one process
Fee. $10.00 each
Al.l Original Inspection Fees
Fuel Burning Equipment
Basis of Fee. Capacity in BTU/hr
Fee. $10.00 to $40.00
Refuse Burning Equipment
Basis of Fee. Sq. ft. of grate area
Fee. $10.00 to $50.00
Process Creating or Device for Controlling Air Pollution
Basis of Fee. One unit operation of one process
Fee. $10.00
A2 Annual Inspections
Fuel Burning Equipment
Basis of Fee. Capacity in BTU/hr
Fee. $10.00 to $20.00
Refuse Burning Equipment
Basis of Fee. Sq. ft of grate area
Fee. $5.00 to $15.00
Process Creating or Device for Controlling Air Pollution
Basis of Fee. One unit operation or one process
Fee. $5.00
21
-------
TABLE 10. CHI DEC SOURCE OF FUNDS FY Ik
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANT^
RETAINED FEES
OTHER
TOTAL
BUDGET
$1000
2177(1)
770
2947
INCOME
$1000
2177 (l)
770
2947
BUDGET
%
Ik
26 U'
100
INCOME
o/
/o
7k
26
100
NOTES:
(1) Does not include an estimated $324,000 budgeted to noise, water and solid
waste programs within the total Chicago funds, amounting to $2,500,990 for
DEC operation for 1973.
(2) In 1974 with Chicago adding $2,513,430 for motor vehicle inspection the
Federal grant funds will drop to 12% of DEC budget.
%
TABLE 11. CHI DEC SERVICE REVENUE VS. SERVICE COSTS - 1973
AGENCY SERVICE
Col . 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
' (MONITOR IMG)
ENFORCEMENT
OTHEK <*>
TOTAL
(')
SERVICE COST
Col. 2
COST
$1000
477
410
929
1013
118
2947
Col. 3
AGENCY
BUDGET
%
16
14
32
34.
4
100
REVENUE RELATED
SERVICE COST
Col. k
COST
$1000
»
266
144
1013U)
1423
Col. 5
SERVICE
COST
%
/)'
65(3
^
ioou
48
SERVICE REVENUE
Col. 6
REVENUE
CLASS
A1
A2
A2
Col. 7
REVENUE
$1000
1 1\
169 (3)
93
323
590
Col. 8
REV REL
SERVICE
COST
O/
/U
64
65.
32
41
Col. 9
AGENCY
BUDGET
%
6
3
11
20
NOTES:
(1) '973 service costs were constructed by taking air program segment of
DEC 1973 budget ($2,9^71000) and applying service percentage values
calculated from 197^ PPBS* budget, less motor vehicle funds (motor
vehicle Inspection was not in the 1973 activities) and adjusting for
differences in 1973 £ 197** programs
(2) A2 Inspections will require something less than 100% of enforcement
but the percentage of effort was not available.
(3) Divided by ratio of revenue l69/( 169+93) x 100 - 65%
(k) Research 50
Public Information 68
*Performance Planning Budget System
-------
D. NYC DAR AGENCY INTERVIEW SUMMARY
AGENCY: CITY OF NEW YORK, DEPARTMENT OF AIR RESOURCES, ENVIRONMENTAL
PROTECTION AGENCY
Harvey Goldstein, Asst. Commissioner for Administration
Joseph A. Sullivan On Assignment from Federal EPA, Region II
HEADQUARTERS: 120 Wall Street, New York, New York 10005
JURISDICTION: City of New York
DATE OF INTERVIEW: August 7, 1974
PEOPLE SERVED: 8,600,000
AREA SERVED: 299.7 sq. mi
NO. OF SOURCES: 800,000 premises each of which have some source. 2000 major
sources.
Each piece of equipment which emits air contaminants is a source. Air
pollution source is not defined in the New York Air Pollution Control
Code.
REVENUE SYSTEM IN EFFECT AND LEGAL AUTHORITY:
A1(S) Permits to Construct. Sec. 1403.2-7.01, Article 7, Local Law
No. 49
A2(F) Triennial Recertification. Sec. 1403.2-7.03. Same as above
D1(F) Certification of Instruction. Sec. 1403.2-7.05. Same as above.
Dl(V) Publication Fees. Sec. 1403.2-7.07. Same as above.
E1(S) Fines & Penalties - Court assessed. Sec. 1403.2-15.25, Article
15 of Local Law No. 49.
E2(F) Civil Penalties. Sec. 1403.2-15.01, Article 15 of Local Law
No. 49 (Imposed by Environmental Control Board)
SCHEDULE OF FEES: See Table 12.
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: New fee systems or
change in fee schedules is by legislative action of the City Council.
COLLECTION AND DISPOSITION: All fees collected are deposited to the General
Fund without designation. Al and A2 fees are paid with applications.
Dl fees are very small and paid when certificate is received or when
billed. E2 fees require legal process to collect.
COLLECTION COSTS: Al and A2 fees require only the mechanics of receiving the
fee and depositing. Less than one person's time is required. The same
applies to Dl fees. El are collected by courts but E2 present a problem in
collections. The report of the Environmental Control Board for the month
of June 1974 indicates the costs of assessing and collecting the Civil
Penalties for FY 1974 (July 1973 through June 1974) exceed the collections
by $256643. Since August 1971 the collections have been only 34% of the
imposed penalties and the cumulative total of excess costs over
col lections is $387391.
23
-------
GOVERNMENTAL UNITS EXEMPT: No fees or charges are required of any city,
state, or federally owned facilities.
BUDGETING WITH RESPECT TO FEES: The operating budget does not include revenues
so there is no effect upon operating funds if revenue falls below the
estimate.
RETURNS IN TERMS OF POLLUTION CONTROL: The Agency believes there are no
enforcement benefits to the Al and A2 fees. The criminal and civil
penalties El and E2 are primarily the enforcement tools.
GENERAL COMMENTS: Revenue from the Certification Program (A2) will fluctuate
in the several years ahead. The initial certification program will be
self liquidating. But since this is a triennal program, the re-certifi-
cation will not equal the original. The re-certification program is
developing. Federal funding is an important part of the financing of the
Department of Air Resources. The local funds are simply not adequate to
carry out the scientific and technical operations required of the local
agency by the federal Clean Air Act.
-------
TABLE 12. NYC DAR Fee Schedule Summary
Al Permit to Install Equipment other than Fuel Oil Burning Equipment
(issued by Department of Buildings)
Fuel Burning Equipment
Basis of Fees. Gross output rating in 1000's of BTU/hr
Fee. $35.00 to $110.00
Refuse Burning Equipment
Basis of Fees. Maximum horizontal inside cross sectional area of
primary combustion chamber, sq. ft.
Fee. $50.00 to $300.00
Other than Fuel or Refuse Burning
Basis of Fees. SCFM of gas emitted
Fee. $50.00 to $300.00
Amendment of Application or Alter Equipment
Fee. Excess amount payable for amended or altered equipment over
the amount pad for the original permit
Discontinuance of Operation of Refuse Burning Equipment
Fee. $15.00
A2 Operating Certificate or Renewal
Fee. $30.00 paid with application
Dl Administrative Fees
Certificate of Instruction
Fee. $3.00 each certificate
Publications
Fee. Not to exceed unit cost of publication
E2 Civil Penalties (Imposed by Environmental Control Board)
Basis of Penalty. According to type of violation
Penalty. $75.00 to $500.00 with each day of violation being a separate
penalty
25
-------
TABLE 13. NYC DAR SOURCE OF FUNDS FY
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANTv
RETAINED FEES
OTHER
TOTAL
BUDGET
$1000
3100
3100
1300
7500
INCOME
$1000
3100
3100
1300
7500
BUDGET
%
41.3
41.3
17.4
100
INCOME
°/0
41.3
41.3
17.4
100
TABLE 14. NYC DAR SERVICE REVENUE VS. SERVICE COSTS FY 74
AGENCY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
(MONITORING)
ENFORCEMENT
OTHER (3)
TOTAL
SERVICE COST
Col. 2
COST
$1000
1275
1350
2175
2025
675
7500
Col. 3
AGENCY
BUDGET
% (1)
17
18
29
27
9
100
REVENUE RELATED
SERVICE COST
Col. k
COST
$1000
6.2
420.3
1350
1777
Col. 5
SERVICE
COST
%
1
33
100
24
SERVICE .REVENUE
Col. 6
REVENUE
CLASS
Dl
Al
A2
E2
Col. 7
REVENUE
$1000
6.2
330.0
230.0
(256. 6) (
566.2
Col. 8
REV REL
SERVICE
COST
%
100
32
0
. 32
Col. 9
AGENCY
BUDGET
% '
1
7
8
NOTES:
(1) Rased on personnel ratio Organization Chart "Staffing by Bureau, July 1974"
(2) Not included in analysis since Environmental Control Board receives and
accounts for funds. ECB is not part of the DAR. The ( ) indicate costs of
ECB exceeded collections by 256.6 thousand dollars in FY 1974.
(3) Executive 225
EPA Support 150
Noise Abatement 300
26
-------
E. LAC APCD AGENCY INTERVIEW SUMMARY
AGENCY: LOS ANGELES AIR POLLUTION CONTROL DISTRICT
Robert A. Lunche - Air Pollution Control Officer
Eric E. Lemke - Chief Deputy Air Pollution Control Officer
Sanford M. Weiss - Supervising Engineer III
E. L. Konold - Administrative Deputy
HEADQUARTERS: 434 South San Pedro Street, Los Angeles, California 90013
JURISDICTION: County of Los Angeles
DATE OF INTERVIEW: June 18, 1974
PEOPLE SERVED: 7,000,000
AREA SERVED: 4083 sq. mi.
NO. OF SOURCES: 25,000 Industrial (permit units), 35,000 Service Stations.
A source is one "permit unit". A "permit unit" is one process capable
of emitting air pollution or one air pollution control device.
REVENUE SYSTEMS IN EFFECT AND LEGAL AUTHORITY:
A1(F) Filing Fee. RULE 40 EFFECTIVE 1964
Al.l(S) Permit to Operate. RULE 40 EFFECTIVE 1964
A4(V) Source Analysis. RULE 43
A8(F) Hearing Board Variance Procedure, RULE 42
A9(F) Open Burning. RULE 45
B2(F) Contractural Services with State Negotiated
D1(V) Technical Reports. RULE 44
SCHEDULE OF FEES: See Table 15.
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: State Statute permits
the Los Angeles County Air Pollution Control Board to revise fees up to
the cost of providing the service (Sec. 24267) for those services
designated above. To adopt new and different kinds of fees, for example
A2 - Reinspection Fees, would require action by the State Legislature.
COLLECTION AND DISPOSITION: A1 Filing Fees paid with application. Al.l and
other Fees are billed requiring payments within 30 days. All fees are
deposited directly in Agency fund accounts and become part of the
budgeting process.
COLLECTION COSTS: Nominal - very difficult to determine as billing is
integrated with all financial operations.
PROBLEMS IN COLLECTION: None. If billings are not paid, operating permit
becomes void and source must make new application requiring new filing
fee.
27
-------
GOVERNMENTAL UNITS EXEMPT: State, County and City, and Board of Education
facilities are subject to Permit Regulations but do not pay the permit
fee. Federal units are not specifically exempt from paying the permit
fee. Governmental units do pay for Petition of Variance.
BUDGETING WITH RESPECT TO FEES: Fee Revenues are deposited in the Agency
Funds accounts and are an item in the budgeting process. Serious
difficulty arises when revenues from permits lag due to business
conditions or other reasons not associated with air pollution control
activities. For example, the District budgeted $618,000 in revenue for
FY Ik. Estimate of revenue is $492,000 leaving this account short by
$126,000 to be made up be seeking supplemental appropriation or by
re-orientation of program to adjust for revenue deficiency. Such
financial management problems detract from the main thrust of the
agency purpose - control of air pollution by the most productive use of
resources.
RETURNS IN TERMS OF POLLUTION CONTROL: The Permit System is the backbone of
enforcement. This is the view of the Air Pollution Control Officer.
However, funding by revenues cannot go beyond the cost of operating the
Permit System.
GENERAL COMMENTS: The agency does regular source re-inspections on an annual
basis and would prefer to have a fee system for this required inspection.
However, the County legal advisor rules that State Statute prohibits
such charges.
An opinion was strongly voiced that determination of fees charged for
enforcement and related activities should be a local determination
based first upon the impact such systems have on the required and desired
air pollution control programs, and second upon the local determination
of the distribution of the funding burden between the public who
benefits and the sources who cause air contamination. With reference to
Federal sharing of the funding, a positive view was taken that federally
mandated programs should be federally funded and fee systems should
not be looked at to replace federal funds.
Los Angeles County Air Pollution Control District is studying a fee
revision schedule to bring charges more in line with present day costs.
Note that Rule 40 fees produce 88% of all revenues received, and was
adopted in 1964. S-ince then costs have risen more than 3^ times justi-
fying the consideration. Revisions upward can be made to cover costs
of the service by action of the County Air Pollution Control Board. On
July 11, 1974, Rule 42 Hearing Board fees were increased from $16.50
filing to one hundred dollars.
28
-------
Table 15 LAC APCD Fee Schedule Summary
Al Filing for Authority to Construct
Fee. $40.00 each application
Transfer of Ownership
Fee. $10.00 (provided no change in equipment)
A1.1 Permit to Operate
Schedule 1 Electric Motor Horsepower
Basis of Fee. Total rated motor horsepower connected
Fee. $40.00 to $800.00
Schedule 2 Fuel Burning Equipment
Basis of Fee. BTU/hr input
Fee. $40.00 to $800.00
Schedule 3 Electrical Energy
Basis of Fee. Total KVA rating except electrical motors
Fee. $40.00 to $800.00
Schedule 4 Incinerator
Basis of Fee. Maximum horizontal inside cross sectional area of primary
combustion chamber, sq. ft.
Fee. $40.00 to $800.00
Schedule 5 Stationary Container
Basis of Fee. Capacity in gallons
Fee. $40.00 to $800.00
A4 Analysis
Fee. Variable to recover .cost of work
A8 Hearing Board Filing
Fee. $100.00 each filing
82 Contracts
Basis of Fee. Negotiated to recover costs
Dl Technical Reports
Fee. Variable to recover cost of work
A9 Open Burning Permit (Deleted 3/15/73)
Fee. $20.00 each filing
29
-------
TABLE 16 LAC APCD SOURCE OF FUNDS FY 1974
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANT^
RETAINED FEES
OTHER O
TOTAL
BUDGET
$1UOO
4333.5
1291.9
760.9
613.2
92.5
7147.0
INCOME
$1000
4388.5
1281.9
573.9
492.0
94.0
BUDGET
%
62
18
8
7
1
6830.3 96
INCOME
%
64
19
9
7
1
100
NOTES:
(1) State Forecast Contract
State Air Monitor Contract
From Other County Departments
24.0
40.0
30.0
TABLE 17 LAC APCD SERVICE REVENUE VS. SERVICE COSTS FY 1974
AGENCY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
' (MONITORING)
ENFORCEMENT
W
OTHER
TOTAL
Note (2)
SERVICE C7-3T
Col. 2 | Col. 3
COST
$1000
995
1851
1692
2290
319
7147
AGENCY
BUDGET
%
14
26
24
32
4
100
REVENUE RELATED
SERVICE COST
Col. i»
COST
$1000
1480.3
64.0^
1544.8
Col. 5
SERVICE
COST
%
80
,(0
22
CEP.VICE SEVSfl'JE
Col. 6
REVENUE
CLASS
A 1 &1 . 1
A3
A9
B2
E1(3!
Col. 7
REVENUE
$1000
600
n
3
64.oC>
683
Col. 8
REV REL
SERVICE
COST
%
42
42
42
100
44
Col. 9
AGENCY
BUDGET
% -
3
1
1
1
10
NOTES:
(1) State forecast contract 24,000. State air monitoring contract 40,000. Assumed
to cover costs 100%
(2) Service Division costs estimated from ratios of Division personnel to total
personnel from organization chart.
(3) Revenue for El fines are paid into the general fund of the communities where
the case is tried and therefore is not included in the total revenues of the
District. Total El fines collected in FY 74 were $146,500.
Planning and Evaluation
(4)
30
-------
F. BA APCD AGENCY INTERVIEW SUMMARY
AGENCY: BAY AREA AIR POLLUTION CONTROL DISTRICT (Region of the State
of Cali fornia)
M. Feldstein, Deputy Air Pollution Control Officer
D. H. Monaghan, Asst. Controller
J. Talbot, Chief Permit Service
T. Story, Chief Special Services
HEADQUARTERS: 939 Ellis Street, San Francisco, California 94109
JURISDICTION: All of seven counties: Alameda, Contra Costa, Marin, San
Francisco, San Mateo, Santa Clara, and Nappa, and portions of two counties
southwestern Solano, and southern Sonoma.
DATE OF INTERVIEW: June 2k, 1974
PEOPLE SERVED: 4,775,000
AREA SERVED: 5,600 sq. mi.
NO. OF SOURCES: Estimated 40,000 plus registration of service stations which
will add an estimated 30,000 sources. A source operation means the last
operation preceding the emission of an air contaminant, which operation
(a) results in the separation of an air contaminant from the process
materials or in the conversion of the process materials into air contami-
nants, as in the case of combustion of fuel; and (b) is not an air
pollution abatement operation. (Reg. 2, par 2031)
REVENUE SYSTEMS IN EFFECT AND LEGAL AUTHORITY:
A8(S) Application for Variance. Hearing Board Rules, Article 6,
Rule 6.k
B1(V) Earmarked Taxes. Section 24370.1, Article 14, Chapter 2.5 of
Division 20 of the Health and Safety Code, known as the Bay
Area Air Pollution Control Law
B2(V) Contractual Service with State
Dl(V) Charges for technical work performed for others. APC Board
Resolution 779
E2(S) Fines and Forfeiture - Article 13.6 of the same chapter as Bl
above. And Chapter 6, Part 1, Division 26, Health and Safety
Code, Powers and Duties.
SCHEDULE OF FEES: See Table 18
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: A8 Variance application
fees are established by the Board of Directors. Other fees are estab-
lished by program requirements to produce revenue to cover cost of
service. E2 forfeitures are set by legislation.
COLLECTION AND DISPOSITION: All revenues are retained by the Agency and become
part of the budget process.
31
-------
COLLECTION COSTS: Nominal. Part of overall business management. Separation
of costs not available.
PROBLEMS IN COLLECTION: None. There are no uncollected fees outstanding.
GOVERNMENTAL UNITS EXEMPT: All state and local government units are exempt
from Application for Variance fees (A8).
BUDGETING WITH RESPECT TO FEES: This is no problem since revenue from retained
fees is a smal1 part of the overall funding (about 3% of FY 197^ budget).
Since the District recenves and retains all revenues, a fund balance is
available to help finance the coming year.
RETURNS IN TERM OF POLLUTION CONTROL: The present revenue systems have no
effect on pollution control except the usual restraints by fines and
forfeitures for violations.
GENERAL COMMENTS: While legislation has been introduced to authorize permit
and re-inspection fees, the Bay Area Air Pollution Control District at
this time has taken no position in support of or opposition to the measure.
The District may be inclined to support the measure. The Deputy Director
expressed the view that reasonable fees charged for inspections would
add a certain degree of status to the permit and inspection regulations,
and would aid enforcement. The reaction of source managers to the pro-
posed permit and inspection fee legislation is not known. Such reaction
will be revealed at the time of public hearings on the bill. If the
legislature adopts the permit and inspection fee measure, revenues should
be used to fund increasing costs and not replace federal funding which
should be maintained or increased to provide for increasing federal require-
ment as in the case of indirect source regulations which may add materially
to the Bay Area budget.
32
-------
TABLE 18. BA APCD Fee Schedule Summary
A8 Variance Filing
Basis of Fee. Each application for a variance from any regulation
Fee. $500.00 plus
$100.00 for each additional point included in the application, plus
$250.00 for each one-half day of hearing in addition to the first
day
Accusation by any person other than the APCO
Fee. $25.00
Application for Hearing under Health and Safety Code 2^369.1
Fee. $25.00
NOTE: Public agencies qualifying under Government Code Section 6103 are
exempt from paying filing fees.
Bl Assessment to Counties
Basis of Fee. The amount of money needed by the district but not
exceeding two cents ($0.02) on each $100 of assessed value of all property
included in the district and shall be apportioned to the counties, one-
half- accordhg to the relative assessed value of property on the secured
roll of each county within the District and one-half in the proportion
that the population of each county bears to the total population of the
District. The assessment for Fiscal 75 (7/1/74 to 6/30/75) is determined
by the $0.0175 per $100 which is the same level as in the past two years.
B2 Contracts
Fee. Negotiated to recover costs
Dl Technical Work Charges
Fee. Variable to recover costs
E2 Civil Penalties
Penalties. Range from $6000 to $500 depending upon section violated and
each day constitutes a separate offense. Sec. 39260 Chapter 6, Part 1,
Division 26. Section 2^369 of Article 13.6 provides a forfeiture of up
to $500.00 for a violation of Reg. No. 2 unless a trial for such action
is held in which case the court may assess up to $5000 forfeiture.
33
-------
TABLE 19.BA APCD SOURCE OF FUNDS FY 1974
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANT^
RETAINED FEES
OTHER *^
TOTAL
BUDGET
$1000
2763
1079
500")
174
776<2>
5297
INCOME
$ 1 000
(Bl) 2763
1079
385°
174
776
. 5182
BUDGET
%
52
21
1 7
3
15
98
INCOME
%
53
21
8
3
15
100
NOTES: '
(1) Federal Grant approved and budgeted $500.000 while revenue realized was $385,000.
(2) Interest Earned $171,000. Rental Income $1^2,000.
(3) Income Not Relative to Service 313 313
Fund Balance Available 463 463
TABLE 20. BA APCD SERVICE REVENUE VS. SERVICE COSTS FY 74
AGENCY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
' (MONITOR IMG)
ENFORCEMENT
OTHER '^)
TOTAL
SERVICE CC-T
Col. 2
COST
$1000
1033
511
1445
1768
641
5146
Col. 3
AGENCY
BUDGET
%
21
10
28
34
7
100
REVENUE RELATED
SERVICE COST
Col. k
COST
$1000
62
1850(0
*fO
1952
Col. 5
SERVICE
COST
o/
/o
4(2)
100UJ
100
37
SERVICE REVENUE
Col. 6
REVENUE
CLASS
B2
Dl
E2
A8
Col. 7
REVENUE
$1000
59
1
101
11
174
Col. 8
REV REL
SERVICE
COST
%
ioo(2
5
27
9
Col. 9
AGENCY
BUDGET
%
1 1
2
1
3
NOTES:
(1) Include Legal with Enforcement.
(2) Assume contracts B2 and billed service (Dl) costs are fully recovered by
charges.
40
13
47
82 34
(3) Hearing Board
Advisory Counci1
Board of Di rectors
Legal Council
Public Information 152
-------
G. PS APCA AGENCY INTERVIEW SUMMARY
AGENCY Puget Sound Air Pollution Control Agency
A. R. Dammkoehler, Air Pollution Control Officer
James R. Pearson, Sr. Air Pollution Engineer
HEADQUARTERS 410 West Harrison Street, Seattle, Washington 98119
JURISDICTION Four Counties King (Seattle), Kitsap, Pierce (Tacoma),
and Snohomish (Everett)
DATE OF INTERVIEW: July 2, 1974
PEOPLE SERVED: 1,918,300
AREA SERVED: 6300 sq. mi.
NO. OF SOURCES: 2011 (350 sources more than lOt/yr of anyone contaminant)
DEFINITION OF SOURCE: The term 'source1 is used in Sec. 6.03 Reg 1, but
is not defined as such in Reg 1. The designation used is a 'Notice of
Construction1. Each piece of equipment must have a 'notice' but more
than'one piece of similar equipment (the process and the control device)
constructed at the same premise at the same time can be included in
one 'notice'. Boilers which are always a separate piece of equipment
for fee determination.
REVENUE SYSTEMS IN EFFECT AND LEGAL AUTHORITY:
Al Filing Fees (F) Notice of Construction (S)
Board of Directors Resolution No 214, October 10, 1973 and
Article 6 of Regulation 1.
A8(F) Application for Variance. Section 7.02, Article 7 of Regulation 1
A9(F) Open Burning Verification Fee. Section 902A Article 9 of
Regulation 1
Bl Earmarked Tax Based Charges. Washington State Clean Air Act
(Effective June 8, 1967) Section 70.94.093.
Cl Registration Fees were authorized -by legislation but were not
authorized by Board of Directors because when fees became
authorized registration of sources was nearly completed so the
revenue from the system was insignificant
Fees for Indirect Source Registration have been authorized by
State Legislation but Authority to Charge has not yet been
instituted by the Board of Directors as the Indirect Source
Registration Regulations are just now under development.
D1(V) Charges for Technical Information, RWC State Code, Chapter 4,
Article 42.17 .
El Fines and Penalties (criminal) Sec 3.25, Article 3» Regulation 1
E2 Civil Penalty. Sec 3.29, Article 3, Regulation No. 1
35
-------
SCHEDULE OF FEES: See Table 21.
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: New revenue systems
require new authority by action of the State Legislature. Authorized
fees, as in the case of Permit Fees (Al) can be changed, up to the
cost of the service performed.
COLLECTION AND DISPOSITION:
Al Fee is billed but will not issue permit until Fee is paid.
Some fees are sent in with application
A8 Fee is received with application
A9 Just beginning but same as A8
81 Budget is approved by Board of Directors and assessment is
apportioned by population. When budget and assessment is
determined, bills are rendered to political entities. Payments
are made at different times by the different entities and
collection has been no problem.
Dl Billing mechanism has not yet been determined as charges are
just beginning. This will be a very small amount of revenue
and numbers of billings will be small. The normal development
will probably provide for payment method at the time the
service is agreed to. Will only recover cost of service
rendered.
El Very seldom used. Any fines as result of court action are
retained by the jurisdiction where the case is heard.
E2 Civil penalties are assessed by letter notice from the Control
Officer to the violator. Thirty days are allowed for payment
or appeal. Appeal is to the Pollution Control Hearing Board
(State of Washington). Assessments neither paid nor appealed
are filed for payment in the Superior Court of the County in
which the violation occurred.
All revenues except El Fines are retained by the Puget Sound
APCA agency without designation to the program involved. An account-
ing is made separately of Civil Penalties assessed (E2) and legal
costs of collection are charged against penalties assessed. The
amount of E2 revenue is the total assessments collected less the legal
cost of col lection.
COLLECTION COSTS: For all except El the costs are nomimal, less than one
person's time. With respect to E2 penalties assessed, the costs
of collection are significant. For the calendar year the following
data are given:
(a) Civil Penalties Assessed $100,600.
(b) Civil Penalties Paid 71,386
(c) Legal costs of collection 27,96?
(d) Net revenue ^3,^19
Legal costs are 28% of penalties assessed and 39% of the penalties
paid. Collections are 71% of penalties assessed and net revenue is
of the penalties assessed.
36
-------
PROBLEMS IN COLLECTION: Problems arise primarily with federal and some
state facilities. State facilities are expected to pay. It is
believed collections will be attained. The federal payments are yet
to be resolved.
GOVERNMENT UNITS EXEMPT: None. However, difficulty is being experienced
in making collections from federal facilities. Fro state, see above.
BUDGETING WITH RESPECT TO FEES: Fee Revenues are deposited in the agency
accounts and are part of the budgeting process. However, in essence
B2 Revenues are tax based. The fees from Permits, (Al) Variances (A8)
and Civil Penalties (E2) form only slightly over 8% of the budget
requirements. Any deficiencies in collection would be made up from
reserves.
The real point at issue is to fund the increasing costs of the Puget
Sound APCA while state and federa1 funding support remain at the same
level or decrease.
RETURNS IN TERMS OF POLLUTION CONTROL: No siginificant change in the enforce-
ment results was observed after fee system was inaugurated. The Civil
Penalty (E2) assessments are considered to be a good enforcement tool.
GENERAL COMMENTS: The Control Officer has given some consideration to pro-
posing a surveillance fee based upon effluent discharge as one mechanism
to shift the burden from the 'per capita1 assessment directly to pollution
sources. With this method of funding revenue would decrease as emissions
are reduced necessitating a periodic review and adjustment of the
schedule.
As a matter of principle, the agency would prefer not to rely on
federal funding but as a matter of practical political consideration
federal and state funding must be maintained while he is seeking
increased local revenues from whatever source to meet the increasing
financial needs of the Agency. It is believed that greatly increasing
fees by legislative action to fund a combination of increasing costs
and a possible reduction in federal support is simply 'out of the
question1 at the present time.
37
-------
TABLE 21 PS APCA Fee Schedule Summary
Al Application for a Notice of Construction
Fee. $25.00 for each filing plus the following schedule
Fuel Burning Equipment
Basis of Fee. Million BTU/hr input (design)
Fee. $15-00 to $150.00
Control Equipment or Uncontrolled Process
Basis of Fee. SCFM from equipment or process.
Fee. $50.00 to $250.00
Refuse Burning
Basis of Fee. Primary chamber area, sq. ft.
Fee. $50.00 to $100.00
Storage Tanks
Basis of Fee. Capacity in gallons
Fee. $50.00 to $250.00
Other than classified above
Fee. $50.00 per application
A8 Variance
Fee. $20.00 Residential burning
$35.00 Other burning
$75.00 All other applications
A9 Open Burning Verification
Fee. $15.00
Bl Earmarked Taxes
Basis of Fee. Budget and assessment approved by the Board of Directors
Fee. 12.4$ per capita FY 7k, increasing to ]k.kt per capita FY 75
Dl Technical Information
Fee. Variable to cover cost
V
E2 Civil Penalties
Basis of Fee. A schedule depending upon the seriousness of the
violation approved by Board of Directors
Fee. Not to exceed $250.00 per day for each violation
38
-------
TABLE.22. PS APCA SOURCE OF FUNDS FY 74
GENERAL TAX BASED (Bl)
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANT^
RETAINED FEES
OTHER (3)
TOTAL
BUDGET
$1000
251.0
250.0
395.0
16.0
.8
912.8
INCOME
$ 1 000
251.0
250'.'0
395.0
77.0<]>
973.0
BUDGET
%
28
27
43
8
106
INCOME
%
26
26
4o
8
100
NOTES:
(1) Revenue was 77 thousand vs. estimated 16 thousand dollars.
(2) From PS APCA budget work sheet, income budget source of funds FY 1974.
(3) Carry Over from Previous year.
TABLE 23. PS APCA SERVICE REVENUE VS. SERVICE COSTS FY 74
AGENCY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
' (MONITORING)
ENFORCEMENT
OTHER (3)
TOTAL
(0
SERVICE COST
Col. 2
COST
$1000
165.0
161.3
253.6
316.1
16.8
912.8
Col. 3
AGENCY
BUDGET
%
18
18
28
34
2
100
REVENUE RELATED
SERVICE COST
Col. k
COST
$1000
161.3
316.1
477.4
Co). 5
SERVICE
COST
%
100<2>
100
52
SERVICE REVENUE
Col. 6
REVENUE
CLASS
Al
AS
E2
Col. 7
REVENUE
$1000
30.0
3.6
43.4
77.0
Col. 8
REV REL
SERVICE
COST
%
18
14
16
Col. 9
AGENCY
BUDGET
, %
3
1
4
8
NOTES:
(1) From PS APCA budget work sheets, expense budget FY 1974.
(2) 100% was assumed when an estimate was not given.
(3) Public Relations
39
-------
H. ORE AQCD AGENCY INTERVIEW SUMMARY
AGENCY: OREGON, STATE OF., AIR QUALITY CONTROL DIVISION, DEPARTMENT
OF ENVIRONMENTAL QUALITY
Wayne Hanson, Asst. Director of DEQ, Air Quality Control. Division
Harold M. Patterson, Administrator, Air Quality Control Division
John Vlastelicia, Federal EPA Region X assigned to State of Oregon
HEADQUARTERS: 1234 S.W. Morrison Street, Portland, Oregon 97205
JURISDICTION: Entire State of Oregon. Note: Two local authorities, Mid-
Willamette Valley APCA (in the N.W. Region) and the Lane Regional APCA
operate as entities and conduct their own programs (issue permits) within
the framework of the State Program.
DATE OF INTERVIEW: June 28, 1974
PEOPLE SERVED: 1,700,000 (State population of 2,500,000 less 800,000 in the two
independent districts).
AREA SERVED: 88,400 sq. mi. (State area of 98,148 sq. mi. less 10% of area
within the two independent districts).
NO. OF SOURCES: Estimated to be 6000 (does not include an estimated 1000
sources in the two independent districts).
A 'source1 is a facility listed in Table A, Chapter 340, of the Rules of
the Department of Environmental Quality, by SIC Classification or any other
source not so listed which emits 10 tons or more per year of air contam-
inants or which emit malodorous substances.
REVENUE SYSTEMS IN EFFECT AND LEGAL AUTHORITY:
Al(F) Filing Fee
Al.l(S) Application investigation and permit issuing or denying fee
A2(S) Annual permit compliance determination fee
Legal authority for above is Sec. 20.033.02 through Sec. 20.033.20,
Ch. 3^0 Oregon Administrative Rules Compilation, adopted by D.E.Q.,
December 17, 1973, effective, January 11, 1974. Rules are adopted by
authority contained in State Law ORS 449.733.
E2 Civil Penalties. Sec. 12-015, Ch. 340
SCHEDULE OF FEES: See Table 24
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: New revenue systems can
only be adopted by the Oregon State Legislature. ORS 449.733 authorizes
D.E.Q. to establish the schedule of fees based upon anticipated costs
including administrative, investigative and inspection to determine
compliance or non-compliance with the permit.
COLLECTION AND DISPOSITION: Payment of the fee !s required with the application
for Al and Al.1 fees. For A2 Annual data and reports and fees are required
40
-------
at the same time. Fees are deposited to the State General Fund and are
designated for the Agency activity. El fines go to county where cases
are heard. E2 penalties go to the general fund without credit to the
agency.
COLLECTION COSTS: Nominal as fees accompany application.
PROBLEM IN COLLECTION: While fees are collected for 100% of the applications,
the administrative nuisance is great. Small facilities send applications
and fees to wrong location and it is difficult to trace. Since
applications are from state-wide locations where distances from issuing
center are considerable, the difficulties are compounded.
GOVERNMENTAL UNITS EXEMPT: While not exempt by Oregon Law, the Federal
Establishments do not pay the fees. State and local facilities pay the
fees. Schools complain about 'double taxation1 and are reluctant, but
eventually pay.
BUDGETING WITH RESPECT TO FEES: Anticipated fees to be collected are part of
the budgeting process and budget difficulties have been considerable
because of over optimistic estimates. The State Fiscal Officer set an
unrealistic estimate of revenue from fees for FY 1975. This may
reflect a desire to shift the burden from general tax based funds to
specialized revenue sources as the Permit Fee Program. Revenues from fees
are fixed by the D.E.Q.. schedule. The lower than predicted level of
activity thus results in deficit of funds needed to carry on the budgeted
program.
RETURNS IN TERMS OF POLLUTION CONTROL: The view was expressed that there are
no benefits in pollution emission reduction from the operation of the
fee system.
GENERAL COMMENTS: The collection of the fee has been a source of some
problems for the Air Quality Control Division particularly because of the
budgeting process. In the face of the deficit from revenue needed
positions cannot be filled. As the program progresses smaller sources
are to be dealt with and more complaints about the fee charges are
expected. The air quality control program would be a much more direct
program if they were not required to charge fees. A number of admin-
istrative questions would be avoided. Given a free choice this Agency
management would favor the permit system without charging fees.
-------
TABLE 2k ORE AQCD Fee Schedule Summary
Al Permit Fi1 ing
Fee. $25.00 non-refundable
Al.l Application Investigation and Permit Issuing or Denying
Basis of Fee. Estimated cost of processing application, scheduled
according to Standard Industrial Classification (SIC) number
Fee. $25.00 to $450.00
A2 Annual Permit Compliance Determination
Basis of Fee. Same As Al.l
Fee. $25.00 to $350.00
NOTE applying to Al.l and A2: The fee applies to one SIC source at one plant
site except for multiple fuel burning devices where the fee is determined
by increasing the unit fee by 20%. (The fee of one unit of fuel burning
equipment plus 20% is the fee for the multiple fuel burning unit application)
E2 Civil Penalties
Basis of Penalty. A schedule according to the severity of the
violation and history of occurrences
Penalty. $25.00 to $500.00 for each violation for each day
-------
TABLE 25 ORE DEC SOURCE OF FUNDS FY
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANTx
RETAINED FEES
OTHER O
TOTAL
BUDGET
$1000
726.1
570.2
38^.8(2)
(530.3)
1681.1
INCOME
$1000
726.1
570.2
90. 0^
1386.3
BUDGET
%
^3
3^
5
82
INCOME
%
52
k\
7
100
Notes:
(1) Mobile Source Control is a new program to be wholly supported by fees beginning
July 1, 1975. This item is not included in the total figures. During FY 75
the program is tax supported.
(2) This is a Legislative Fiscal Office estimate from DEC, Federal Grant 1974-75,
. A.Q. Division Summary. The A.O.. Staff believes $90,000 is a more realistic
estimate.
(3) The 90,000 estimate for FY 1975 comes from the estimate of revenues for the
1973-75 beinnium originally set at 156,000 and 90,000 is 58% of the biennium
estimate. Recent estimate of biennium revenues from fees is placed at 100,000
so the FY 1975 revenues will be considerably less than 90,000.
-------
TABLE 26. ORE DEC. SERVICE REVENUE VS. SERVICE COSTS FY
AGEr.'CY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
' (MONITORING)
ENFORCEMENT (5)
OTHEH (6)
TOTAL
SERVICE CC'T
Col. 2 j Col. 3
COST
$1000
273.0
Included i
Admi n i s
232.0
887.6
768. 8(4
1681.1
AGENCY
BUDGET
%
16
rat i on
17
53
100
REVENUE RELATED
SERVICE COST
Col. k
COST
$1000
136.5
136.5
Col. 5
SERVICE
COST
O/
/O
*><'
8
SERVICE REVENUE
Col. 6
REVENUE
CLASS
A1
Al.l
A2
E2(jj
Col. 7
REVENUE
$1000
90(2)
90
Col. 8
REV REL
SERVICE
COST
%
66
. 66
Col. 9
AGENCY
BUDGET
%
5
5
NOTES:
(1) Based upon other agencies studied, it is assumed that Administration and
Engineering have approx. the same cost. On this basis Engineering related
to revenue is 50% of the above Administration Service Cost total.
(2) Revenues from Permit Applications and Annual Compliances Determinations are
grouped by the A.Q. Staff and estimated to be $90,000 for FY 75. This is
\tfe11 below the $38^,800 revenue specified by state budget people necessary
to support new positions and capital outlay. Since this is a new program
there are no actual collection data.
Not credited to agency funds and not figured in budget procedures
(3)
(4)
(5)
(6)
FY 75 is a tooling up period for this service so it is not included in
the Service Cost Total. Beginning July 1, 1975 this service is to be
self supporting through fees charged for inspections.
613.8
233.9 Col. 1
39.9
238.5
Point Source
Area Source
Enforcement Headquarters
Planning & Registration
Mobile Source Control
(530.3) CO
-------
H. WIS APSW AGENCY INTERVIEW SUMMARY
AGENCY: WISCONSIN, STATE OF. BUREAU OF AIR POLLUTION AND SOLID
WASTE DISPOSAL: DIVISION OF ENVIRONMENTAL PROTECTION,
DEPARTMENT OF NATURAL RESOURCES
William T. Rock, Engineer
HEADQUARTERS: 4610 University Avenue, Madison, Wisconsin 53701
JURISDICTION: State of Wisconsin
DATE OF INTERVIEW: July 19, 1974
PEOPLE SERVED: 4,400,000
AREA SERVED: 54,464 sq. mi.
NO. OF SOURCES: 1200 (facilities)
A source is the same as a facility. A facility is one installation,
plant or premises at one location having contiguous property and
containing one or more point sources. For example a boiler plant
containing three boilers connected to a single chimney would be one
facility or one source.
REVENUE SYSTEMS IN EFFECT AND LEGAL AUTHORITY:
A3(F&S) Annual monitoring fee for effluents to be paid by persons
required to report. Chapter NR 101, Sec NR 101.75.
Effective February 1, 1973.
El Fines 6- Penalties - Court assessed. Sec NR 101.76 of the
above and Sec NR 154.08 of Chapter NR 154.
RETURNS IN TERMS OF POLLUTION CONTROL: There are no direct enforcement
benefits except that the fee system may focus attention on emission
quantities. The charges are not high enough to stir reduction for
benefit of saving annual charges. The system was not designed to
influence emission reductions nor is it considered as a license to
pollute. The purpose was to shift some burden from tax based funds.
The fee system does indirectly focus on the emission inventory and
tends to increase the accuracy of the inventory through review of
emissions with each billing.
AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES: Revisions to NR 101
Fees can be accomplished by administrative action following public
hearing. Process involves Advisory Board review, then decision by a
hearing examiner employed by Department Natural Resources. Decisions
are subject to legislative review.
COLLECTION AND DISPOSITION: Collection is by billing due in 30 days.
Revenues are deposited to the General Fund without designation.
45
-------
COLLECTION COSTS: The system of billing is integrated into the emission
inventory and source control computer file. The cost of developing
the billing system was $14,000. Annual operating (billing and
collection) costs are estimated at $6000 per year.
PROBLEMS IN COLLECTION: The system was adopted February 1, 1973, and 1973
calendar year emissions data acquisition began shortly after January 1,
1974. Completed all air emission billings May 6, 1974. All bills
were distributed on May 6, 1974. About 800 facilities, 50% for
water only and 50% for air and/or water. From 400 billings, complaints
were received from 60 facilities. About 30 billings have been revised
on basis of fact. It is estimated that zero billings will wind up in
1i tigation.
GOVERNMENTAL UNITS EXEMPT: Municipal and Boards of Education facilities are
exempt from paying the fee. State facilities are not exempt. Federal
facilities are not exempt but are not paying the billings and will
not be pushed for payment.
BUDGETING WITH RESPECT TO FEES: Fees collected are not part of the budgeting
process so there are no problems created by over-estimating revenues.
GENERAL COMMENTS: The Agency is studying two aspects of revenue from
Agency operation. Some consideration is being given to recovering a
higher percentage of monitoring costs through a revision of the fee
schedule. It is noted that only 26% of the monitoring and administrative
costs related to monitoring are recovered by the present A3 schedule
of charges. Time estimated to complete administrative hearings on such
proposal is 6 months to 1 year.
Some study has been given to the E2 Civil Penalty assessment against
violators as an aid to enforcement. State legislative action would be
required for adoption with a minimum time required as 1 year from
introduction of legislation. Strong resistance to such legislation
would be expected from regulated sources.
46
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TABLE 27
SCHEDULE OF FEES
A3 For each person required to report, either for liquid effluent
or air emissions, an administrative fee of $50.00 is charged. In
addition to the above, an emission charge is made:
1. NR 101.53 establishes a reporting level of .25 tons per day of operation
for each of the six primary pollutants or a yearly reporting level of
50 tons per year. The pollutants are: Particulates, Sulfur Dioxide,
Nitrogen Oxides, Carbon Monoxide, Hydrocarbons, Oxidants. For each
required reporting source a fee of $0.20 per ton per year per pollutant
is charged with a minimum charge of $10.00 for each substance.
2. For Table II NR 101.52 listed toxic or hazardous substance where
emission exceeds quantities found in Table II a report shall be filed.
The cost factor for the reporting fee will be determined for each
listed toxic substance by dividing $50.00 by the emission reporting
level in Ibs/day. This cost factor multiplied by the daily output of
each substance will yield the annual surveillance fee for air emissions
for each substance. The minimum charge is $50.00 for each substance
requiring reporting.
The total monitoring fee is the administrative fee plus the sum of all
additional fees provided no person shall be charged a monitoring fee
totaling more than $10,000 annually.
Note: A provision is made for charging for odor emissions but no mechanism
is yet found to accomplish such charges.
El Violators of reporting requirements shall be fined not less
than $200 nor more than $10,000 foe each offense. Violators
of emission regulations or orders may be assessed fines not
les than $10 nor more than $5000.
-------
TABLE 28 wiS AP&SWD SOURCE OF FUNDS FY Ik
GENERAL TAX BASED
FROM STATE TO LOCAL
(TAX BASED)
FEDERAL GRANT
RETAINED FEES
OTHER
TOTAL
BUDGET
$1000
721
699
1420
INCOME
$ 1 000
721
699
BUDGET
%
51
^9
1^20 1 100
INCOME
%
51
49
100
TABLE 29. WIS AP&SWD SERVICE REVENUE VS SERVICE COSTS
AGENCY SERVICE
Col. 1
TITLE
ADMINISTRATION
ENGINEERING
TECHNICAL
(MONITORING)
ENFORCEMENT
OTHER ' '
TOTAL
SERVICE COST
Col. 2 ! Col. 3
COST
$1000
117
Included
759
372
172
1420
AGENCY
BUDGET
%
8
In Enfc
54
26
12
100
REVENUE RELATED
SEPA'ICE COST
Col. k
COST
$1000
2
r cement
759
861 (0
Co!. 5
SERVICE
COST
%
B(2)
100
58
SERVICE r.EVEM'j:
Co). 6
REVENUE
CLASS
A3
A3
Col. 7
REVENUE
$1000
17
195
212(0
Col. 8
REV REL
SERVICE
COST
%
2?(2)
26
- 26
Col. 9
AGENCY
BUDGET
%
1
14
15
NOTES:
(1) Enforcement is .not included in Total Service Cost, Revenue Related because
of the small amount of revenue from El.
(2) The % of Service Cost related to Service Revenue was not available nor was
the personnel distribution. The next best allocation method was chose, the
ratio of Monitoring Costs to Total Costs. 759./o420 x 117=62'. Allocate 62,000
or. 53% of the total Administrative Cost to A3 Revenue. From interview comment^
this is a high figure but it is the only one which has some basis for estimating
(3) Calendar data were used for Service Revenue since one full year could be
included. FY 74 revenues would be nearly the same.
(4) Air Regulation Management
48
-------
TABLE 30 AGENCY DATA
TIME PERIOD
AGENCY BUDGET ($1000)
TOTAL SERVICE REVENUE
($1000)
TOTAL SERVICE REVENUE
AS % OF AGENCY BUDGET
(%)
PEOPLE SERVED (1000)
AREA SERVED (SQ. Ml.)
NO. OF SOURCES ^
St.L
DAPC
FY 74
589
72
12
622
61
739
PHI LA
AMS
FY 74
1458
94
6
1950
'*&'
13100
CHI
DEC
1973
2947
590
20
3550
227
45500
NYC
DAR
FY 74
7500
566
8
8600
300
(*
800000
LAC
APCD
FY 74
7147
683
10
7000
4083
60000^
BA
APCD
FY 74
5146
174
3
4775
5600
70000*3)
PS
APCA
FY 74
913
77
8
1918
6300
2011
ORE
AQCD
FY 75
1681.
90
5
1700
88400
6000
WIS
APSW
FY 74
1420
212
15
4400
54464
1200
NOTES:
(1) FY 75 (71/174 to 6/30/75) Is used with estimates as fee system began Jan. 11, 1974.
(2) Source definition and usage varies greatly from one agency to another. See Agency Interview Summary
for source definition.
(3) Includes gasoline stations.
(4) These are buildings on premises which have one or more sources. New York State DAR estimates
2100 major sources In New York City.
-------
TABLE 31 AGENCY DATA SOURCES OF INCOME
SOURCE OF FUNDS
GENERAL TAX
BASED FUNDS
SUBVENTION
FROM STATE
FEDERAL GRANT
RETAINED FEES
OTHER
TOTAL INCOME
BUDGET
INCOME/BUDGET
$1000
%
$1000
%
$1000
%
$1000
%
$1000
%
$1000
%
$1000
St.L
OAPC
299
50
299
50
598
100
598
100
PHI LA
AMS
749. 4
51
708.8
40
1458.2
100
1458.2
100
CHI
DEC
2177
74
770
26
2947
100
2947
100
NYC
DAR
3100
M.3
3100
41.3
1300
17.4
7500^
100
7500
100
LAC
APCD
4388.5
64
1281.9
19
573.9°
9
492
7
94
1
6830.3
100
7147.0
96(1)
BA
APCD
2768^)
53
1079
21
385(3>
8
174
3
776<*>
15
5182
100
5297
58(3)
PS
A PC A
251(5)
26
250
26
395
40
77(6)
8
937
100
912.8
106<6>
ORE
AQCD
726.1
52
570.2
41
90 (7)
7
1386.3
100
1681.1
82(7)
WIS
APfrSUD
721
51
699
49
1420
100
1420
100
NOTES:
(1) , Federal Grant was budgeted at the award amount of $760,900 of which $573,900 was received.
(2) These are B1 Earmarked taxes paid by member counties according to budget requirements. FY 74 rate
was $0.0175 per $100 property valuation. The statutory limit is $0.02 per $100 valuation.
(3) Federal Grant was budgeted at the award amount of $500,000 of which $385,000 was received.
(4) Other Income Is not related to Service: Interest earned $171,000, rental Income $142,000, and fund
. balance available $463,000.
(5) These are Bl assessment funds apportioned to member counties at a rate of 12.4< per capita.
(6) Retained fees was budgeted for $16,000 and revenues were $77,000.
(7) Revenue from Fees was established by State Fiscal Officer at $384,800 whereas experience to date
shows that revenues will amount to approximately $90,000.
50
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TABLE 32. SERVICE REVENUE RELATED TO UNITS OF ACTIVITY
Al
Al.l
A2
A3
A8
A9
82
Dl
E2
TOTAL SERVICE
REVENUE
E2(5)
E)(5)
81
$1000
UNITS
$/UNIT
$1000
IIHIT«
S/UNIT
$1000
UNITS
$/UNIT
$1000
UNITS
S/UNIT
$1000
UNITS
$/UNIT
$1000
UNITS
S/UNIT
$1000
UNITS
$/UNIT
$1000
UNITS
S/UNIT
$1000
UNITS
S/UNIT
$1000
$1000
$1000
UNITS
$1000
UNITS
St.L
APCO
68.8
4800
14.1
3
100
30
72.2<21
N/A
PHI LA
AHS
8.2
251
35
2.5
582
4.3
83.2
2221
37
-
93.9
13.3
17*»
CHI
DEC
169
₯91*
38
421
35727
12
590
111
NYC
OAR
330
N/A
(3)
230
N/A
(3)
6.2
N/A
566.2
CO
(256.3)
NEC
LAC
APCD
600
1(500
133-3
Inc.
In
Al
11
800
13.8
8
900
8.9
6k
3
JZJJ30
683
146.5
BA
APCD
11
23
478
59
2
29500
3
N/A
101
N/A ..
m
NEC
2768
$0.0175
$100 val
PS
APCA
30
206
Ilt6
3.6
30
120
43. 4
N/A
77-
NEC
251
12. IK
cap! t<
ORE
AQCD
90
1(80
188
Inc.
In
Al
Inc.
In
Al
90
2.5
NEC
WIS
APSWO
212
400
530
212
NEC
i
NOTES:
(I)
(2)
(3)
CO
(5)
Units - 1 unit Is 1 permit or 1 application or 1 variance application, etc.
It Is not units of equipment, and Is not the same for alt agencies.
St.L DA PC issued 14 Solid Fuel Dealer's licenses In FY71* with revenue of
$400. Since this Is the only agency to issue such licenses, A6 was omitted
from Table 32.
N/A data not available
Excess of costs over collections, assessed by Environmental Control Board.
E2 and El Penalties which are not part of the budgeting process.
-------
TABLE 33
SERVICE REVENUE RELATED TO SERVICE COST AND AGENCY BUDGET
At
Al.l -
A2
*3
A3
A9
82
Dl
E2
TOTAL SERVICE REVENUE
TOTAL SERVICE REV. .
TOTAL SERVICE COST"
TOTAL SERVICE COST
TOTAL SER. REV. .
AGENCY BUDGET
AGENCY BUDGET
$1000
%
$1000
%
$1000
%
$1000
%
$1000
X
$1000
%
$1000
%
$1000
%
$1000
%
$1000
%
$1000
%
$1000
St.L
DAPC
68.8
44
3.0
44
72.2(I)
44
165.9
12
598
PHI LA
AHS
8.2
60
2.5
60
83.2
60
.
t
93.9
60
156.5
6
1458.2
CHI
DEC
169
64
421
36
590
1*1
1423
20
2947
NYC
DAR
330
32
230
32
6.2
100
566.2
32
1770
8
7500
LAC
APCD
600
42
nc 1 tided
In
above
11
42
8
42
64
100
683
44
1545
10
7147
BA
APCO
11
27
59
100
3
100
101
5
174
10
1952
3
5146
PS
APCA
30
18
3.6
1
43.4
14
77
16
477.1
8
912.8
ORE
AQCD
90
66
Includec
in
above
Includec
In
above
WIS
APSWD
212
26
;
90
212
66 | 26
136
5
1681. 1
821
15
1420
NOTES:
(I) StL DAPC has $400 revenue from issuing 14 Solid Fuel Dealer's Licenses (A6).
Since this is the only agency, and It Is such minor Item, It Is carried as
a footnote rather than in the Table.
52
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V SUMMATION OF DATA
A. DATA TABLES
The Data are summarized in four Tables each table containing notes
of explanation:
Table 30 shows total agency budget and revenues along with agency
parameters of people served, area, and number of sources.
Table 31 shows sources of income and percent of total income for each
source. Total Budgeted funds are also shown which are then compared
to total income.
Table 32 shows sources of revenue from each fee system for each agency.
Indicated on the table are the units associated with the revenue and
and average $ per unit calculated. It is important to note that the
units for each agency are not the same. Each revenue system dictates
the definition of units to be included. Shown also are the revenues
from fines and penalties (El and E2) and the revenue assessments, tax
based (Bl)
Table 33 shows the service revenue related to the service cost and to
the total agency budgeted costs. The service division costs of the
agencies related to the service activity was the most difficult to
attain and at best is an approximation from other parameters. The
difficulty stems from
(a) several service divisions being involved in a revenue system
(b) one service division being partially involved in one revenue system
(c) one service division being partially involved in more than one
revenue activity.
Mainly the Service Division costs were calculated from personnel or man-year
effort distribution and estimates furnished during the interview.
53
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B. DATA ANALYSIS
1. Agency Data (Table 30)
Agency budgets and service revenue data are 'hard' figures but much
of the service cost and the percent of the service cost to the service
revenue activity are estimates. Breakdowns from the totals to the divisional
figures were not available from the agencies and so they were generally
estimates calculated from personnel assignment schedules or man-years of
effort or other management data. The percent of effort of a division
related to the revenue service cost was in all cases an opinion drawn from
the interview. Where the effort was not known, the entire service division
cost was used in the analysis.
Budgets varied from a high of $7,500,000 for NYC DAR to a low of
$598,000 for StL DAPC. The average budget is meaningless because of the
extreme range of the jurisdiction size, population ranging from 8.6 million
to just over 600 thousand. A factor which stands out (not related to the
fee study) is people concentration which dictates the seriousness of the
problem. NYC Is the most concentrated with 28.7 thousand people per square
mile compared to Oregon with 19.2 people per square mile.
The number of sources also is a measure of the program requirements.
In NYC there are 2662 sources per square mile compared to Oregon with .07
and Wisconsin with .02 sources per square mile. Offsetting the concentration
of people and sources is the physical distances involved, NYC having 300
square miles vs. Oregon of 88,400 square miles.
The above are just some of the considerations in assessing'the costs
of the required air pollution control program. The data regarding number
of sources is particularly 'soft' as 'sources' have a different definition
for each agency, but it does indicate the'concentration vs. the spread of
emission points which is a very important parameter in the analysis of air
quality results vs. emissions per source, and the setting of emission
regulations to achieve air quality standards.
2. Funding Sources (Table 30
Sources of operating funds was rather straight-forward in definition
but varied for the jurisdictions of study. Table 34 gives averages and
ranges of fund sources. All tax based revenues are put together, these
being general fund, subvention from State and assessments.
-------
TABLE 3^. SOURCES OF FUNDS FOR NINE AGENCIES
BY PERCENT OF TOTAL
Percent of Total Funds
Range for
Average Individual Agency
Tax-based Jk% 83% to 50%
Federal Grant 20%. 50% to 8%
Retained Fees 3% 7% to 0%
Other 3_% 15% to 0%
Total 100%
In Table 3^ the Retained Fees are those fees which accrue to the
agency and are part of the budget process. Where fees are retained and
become part of the funding, it is important that the agency have a reserve
fund to draw upon as revenues change from year to year and especially
where activity or the revenue base is estimated to decline. In the budget
process revenues from fees should be conservative or under estimated
unless such reserve is available.
3. Service Revenue Related to Activity (Table 32)
This table of data is greatly influenced by the definition of the
'activity units' which carries the variability as the 'source definition1.
Units related to permits and inspections (Al, Al.1, and A2) are fixed by
the regulation of the agency and have a different base depending on the
regulations. The involvement Is such that no averages can be determined
and users of this data should go to the regulations to ascertain the meaning
of a unit.
k. Service Revenue Related to Service Cost and Agency Budget (Table 33)
In this analysis averages for all nine agencies are shown with
range of service revenue, related service costs, and agency budget.
55
-------
TABLE 35. SERVICE REVENUE VS SERVICE COST AND BUDGET
Range
Avg. % Max. % Min. %
Service Revenue as a percent of Service Costs 33 66 10
Service Revenues as a percent of Agency Budget 9 20 3
Table 35 shows that for the nine agencies surveyed 33% of the service
cost is recovered by the service revenue with a high of 66% and a low of
10% for the individual agency percentages. Compared with total Agency
budget requirements, revenue from fees and service charges averaged 9%
with a range from 20% to 3%.
C. OTHER AGENCY DATA
Reviewing the Summaries of eleven state agency visits by a federal
study team, it appears that the Schedule of Fees (Table 2) established
for this study is complete.
Two agencies not covered by this study are noted:
(a) Maricopa County, Arizona where receipts from permit fees for FY 74
is estimated to be $200,000 against a budget plus Federal Grant of
$400,000 or 50% of the agency funding requirements. The summary with
comments is shown in Table 36.
(b) The State of Michigan which uses an Annual Surveillance Fee reports
estimated receipts of $1,300,000 against a budget of $2,400,000
($1,500,000 state funds, and $900,000 Federal Grant). From these
estimates, surveillance charges to sources would be 87% of the State
funds required and 54% of the total funds for the operation of the
Michigan State program. The Michigan Summary is shown in Table 37.
56
-------
TABLE 36. MAR I COPA COUNTY, ARIZONA
State: Arizona (Maricopa County Bureau of Air Pollution Control)
Budget: $300,000 Federal Grant: $100,000
Existing Fees:
Description Disposition Est. FY Ik Receipts
1. Air permit fees (paid upon issuance of permit) Revolving fund $200,000
Salient Points:
1. Statutory authority to levy fees (with receipts being available solely for air pollution
control) was obtained from the State in 1968; Agency management saw fees as the only
feasible way to support a strong program.
2. A fee schedule was adopted by the County in late 1968; in 1971 a new, stronger approach to permits
and fees was adopted. Agency management shares the credit for this increased funding with
heightened environmental concern and the first and only "air pollution emergency" conditions that
Phoenix has ever experienced.
3. Fee revenues grew from FY 71 ($100,000) to FY 7k ($200,000) as a result of County growth and more
complete coverage of sources. Administrative costs are estimated at no more than 10 percent of
recei pts.
k. Fee receipts have stabilized and Agency management expects only gradual increases under existing fee
schedule; prospects for increasing the fees (which can only be used to defray the cost of the permit
program) are uncertain, and would take at least 12 months.
5. Agency management feels that it is in a real financial box: fee revenues are stable, Federal
grants have decreased somewhat, and County general fund support is unlikely.
From, Report on a Study of Control Agency Revenue Fees. Office of Planning and Management, U.S. EPA
June 1974.
57
-------
TABLE 37. STATE OF MICHIGAN
State: Michigan (State Division of Air Pollution Control)
Budget: $1,500,000 Federal Grant: $900,000
Existing Fees:
Description Disposition Est. FY Jk Receipts
1. Annual surveillance fee (paid upon receipt of remiburses appropriation $1,300,000 a
bill each February)
Salient Points:
1. This is the outstanding example of the revenues that can potentially be raised by fees in the area
of air pollution control; it was passed in mid-1972, under circumstances similar to the water fee.
2. The total elapsed time between initial substantive discussions (December 19&9) and initial receipts
(February 197*0 was over four years.
3. Collections, as of early May, were over 90 percent of billings and no specific collection problems
were foreseen; FY 75 receipts are projected to be $1,600,000.
k. Fees provide approximately kO percent of total revenues and are the only source of non-Federal funds;
legislative intent was apparently to fund only increased surveillance activities, but the Appropriations
Committee made the fee the sole source of State funds for both the State and five local agencies.
Maximum receipts under current schedule estimated to be $2,000,000 annually.
5. The State's local agencies are now prohibited from levying fees; the sharing of fee receipts between
the State and local agencies has been, and promises to continue to be, a problem area.
Approximately $700,000 is allocated among 5 local air pollution "control agencies.
From, Report on a Study of Control Agency Revenue Fees, Office of Planning and Management,
U.S. EPA, June 1974.
58
-------
VI SUMMARY OF COMMENTS RELATED TO FEE STUDY OBJECTIVES
A. FEE SYSTEMS IN USE IN NINE STUDY AGENCIES
The most universally used revenue systems are the charges for
installation permits and required inspections (Al, Al.l, and A2). All
agencies excpet BA APCD and WIS APSW use one, two, or all three systems.
A bill is introduced into the California legislature to authorize Bay
Area APCD to utilize such charges. No prediction was made as to the
success of its adoption.
Wisconsin finds the A3 Surveillance and Monitoring system working
well in Its first year of operation although revenues are recovering only
26% of the monitoring costs and 15% of the total agency operating fund,
requi rements.
A4 through A6 fees were not found in the survey agencies except
License Fees (A6) charged by StL APCD to Solid Fuel Dealers. The amount
is so small ($400) it was not included in the summaries.
A8, Variance Hearing fees were found in three agencies while A9»
Open Burning Permits were found in LAC APCD where they are to be discon-
tinued.
Reimbursement for Contracts B2 and charges for Technical Services
and Reports (Dl) were found in three agencies. Two other agencies were
authorized to make :D1 charges and are tooling up to do so. Revenues
from Dl fees are shared with the Federal government by all grantee agencies.
Criminal penalties for court prosecuted violations are universally
used, but since revenue from assessed criminal penalties are not credited
back to agency operation, they are not included in this analysis.
Civil Penalties E2 are successfully used in three agencies, two of
which show an excess of income over costs while a third, operating through
a separate Board as an administrative court has shown an excess of
operating costs over collected penalties assessed.
59
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B. AUTHORITY TO ADOPT NEW REVENUE SYSTEMS OR REVISE FEES
The practice is universal that the elected legislative body must
approve new fee systems. City Agencies generally require ordinance to
change the amount of the fees charged while district or state agencies
generally are allowed to set the fees to recover the cost of operation.
As is seen from the data summaries, the fees are generally set well
below the cost of the service related to the fee system.
The reasons for setting fees well below costs, even though legal
authority is given to recover costs are not readily apparent. However,
some points might be made as follows:
(a) Lack of cost experience and cost data along with a desire to be
'well within1 the legal requirements. Very little evidence was
found of adequate cost accounting. Only now (197^) is CHI DEC using
PPBS which furnishes reasonably accurate cost data. Some agencies
had difficulty in breaking down costs by Services Divisions which is
the first step to assessing activity costs.
(b) Escalating costs requiring frequent review (LAC APCD last established
fees to recover costs in 1964 and reports that since then costs have
risen 3^ times requiring study for upward revision).
(c) A hesitance to set the charges so high that additional enforcement
problems arise from a resistance to pay "high" fees.
C. FEE APPLICABLE TO PUBLIC ENTITIES
In general, federal, state and local governmental agencies are
subject to the operational regulations, but there was no universal policy
with regard to payment of fees. Every agency where fees are charged
against other governmental units have collection difficulties. Each
agency, except where governmental facilities are exempt from paying the
fee, struggles with other governmental units until a policy is developed.
Once this is done, collections proceed according to established policy.
The rationale for non-charges to other governmental units may be
found historically that a 'higher' governmental agency is not subject to
control by a lesser unit. When most agencies were local (city) operations,
state and federal entities were not subject to any of the local regula-
tions. However, now that states are universally involved in air pollution
60
-------
control and in fact state regulations are also federal regulations,
exemptions on the old basis can no longer be claimed. But the tradition
carries over. Time may change this viewpoint.
Another viewpoint considers that a charge by one government agency
to another is somewhat like charging oneself for services performed.
The charge merely transfers funds from one account to another adding
paper work to an already burdened system.
D. COLLECTION AND DISPOSITION
Collection of fees present no problems whether fees are required with
applications or are billed after compilation by the agency. Usually
there is built-in authority to cancel or recind a permit or license to
operate if the fee is not paid. LAC APCD has a built-in penalty. When
a permit issuing fee is not paid within a certain length of time, the
permit application is cancelled. After this is done, a new filing fee is
required with the re-filing when the permit is sought a second time.
The processing of received revenues presents no difficulties. How
this is done is dictated by the business practices of the agency.
E. BUDGETING WITH RESPECT TO FEES
Where revenues are part of appropriated funds and revenues fall
short of predicted amounts, serious difficulty can arise. Shortage of
revenues do not permit hiring of people to perform the service to generate
the revenue. This is a 'chicken and egg1 situation and seed money or
fund reserves are needed to provide^for failure of revenues to meet
predictions which are part of the agency budget.
Where fee revenues are deposited to the general fund without designa-
tion as an item in the agency appropriation, no problems arise. Funds
are appropriated from general revenues plus federal grants and agencies
are assured of the year's operating funds.
However, in the budgeting process, the revenue expected from fees can
be a bargaining point by the agency representative to the budget hearing.
Staff is needed to perform the service and where revenues are expected
to recover even a portion of costs, it would be reasonable to assume a
certain weight of argument for the appropriation would accrue.
61
-------
F. RETURNS IN TERMS OF POLLUTION CONTROL
The permit to construct and renewable operating certificate were
given strong recommendation as good enforcement aids. However, the
strength is found in the regulatory authority rather than in the
charging of the fee.
Only the E2 Civil Penalty assessment was singled out as having a
direct influence on reduction of emission through enforcement. The
authority of the agency administrator (as in PS APCA) or a board (as in
NYC ECB) to direct that monies be forfeited for certain observed and
provable infractions of the regulations adds strength to a cease and
desist order and encourages bringing the source into compliance.
It was apparent from the PS APCA and NYC ECB data that costs of
collecting civil penalties are substantial.
Puget Sound report for the calendar year 1973:
(a) Civil penalties assessed $ 100,600
(b) Civil penalties collected $ 71,386
(c) Legal costs connected with assessment and
collection $ 27,967
(d) Net revenue $ k3,419
From the above it is determined that the legal cost of assessment and
collection was 39 percent of the actual collections.
The New York City, Environmental Control Board which functions
primarily to hear charges of violations and then render decisions as
orders to abate and to assess and collect civil penalties, shows excess
of operating cost over collected penalties of $256,6^3 for FY 7^. From
August 1971 when the Board began operations through June 197^ imposed
2.7 million dollars but collected only $923,871 or 34% of the total
imposi tions.
G. IMPACT OF REVENUE SYSTEMS ON TAX BASED FUNDING
The revenues from fees and charges shift the burden from general tax
based funding to the sources of air pollution emissions. The degree of
shift, of course, depends upon the level of fees and charges assessed.
Two aspects of this shift are apparent, one the present revenues
from fees are a small percentage of agency fund requirements, the average
62
-------
of nine agencies studied being 9% with a maximum of 20% and minimum of
3%. To bring larger revenues, the schedules would require increases of
several orders of magnitude. For example, if the cost of administration,
engineering and inspection to operate the permit system of Agency A was
1 million dollars and the existing fee structure generated the average
return of 9%, the revenue would be $90,000. Now a proposal is made to
make the permit system self sustaining by increasing fees. The fees must
be adjusted upward to produce an additional $910,000 or they must be
increased more than 10 fold. Assuming no increase in number of permits,
an Individual permit which at present would cost $100.00 must be
increased to $1000.00 and it is doubtful that such major adjustment
could practically be attained. Adjustments upward will be made, but
the extent of adjustments will be tempered by other considerations in
addition to cost of service.
H. GENERAL REACTION TO FEE SYSTEMS
Agency Managers accept the fee systems they administer as part of
their managerial responsibilities. Most of them inherited the base of
operation and are not 'campaigning1 for big change. Some have minor
changes under study and some say they will study change to recover more
costs if requested by 'higher authority1. All control officers are
conscious of the continuing need for expanding budgets based upon higher
personnel costs to maintain present level of activity and the possibility
of new programs dictates by the federal E.P.A. How these higher costs
are to be met will require much of their attention in the years ahead.
63
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VII CONCLUSIONS
A. UNIVERSALITY OF FEE AND REVENUE SYSTEMS
When looking beyond the nine agencies selected for this study because
each had one or more revenue producing systems, it would be found that
such universality does not apply to all agencies. A complete count would
no doubt show more state agencies do not charge fees than do make charges
for permits, inspections and other activity. Local agencies have a
longer history of charging for services rendered. It becomes a practical
and a political question to choose between funding the agency's operation
from tax-based monies or by specialized charges against air pollution
sources.
B. IMPACT ON ENFORCEMENT PROGRAMS
The choice between source charges and tax-based funding should be
examined and decided only after serious consideration of the affect the
charges will have upon the enforcement programs.
It is self evident that civil penalties, fairly and conservatively
applied, aid enforcement. Charges for permits and required inspections
do not loom large as an enforcement tool, but do generate revenue which
is readily managed. Many administrators stated the charges added 'status1
to the permit and inspection. It could also be said that the service
when charged for must be more expertly carried out. It is believed that
there is substance to this viewpoint.
C. FEE SYSTEMS SHOULD BE UNCOMPLICATED
In divising fee systems, the basis for the charge must be definite
and not amenable to subjective misinterpretation. The fixed fee does
not require judgement, but it cannot be used for every size and
complexity of installation and still relate charges to service costs.
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Fee schedules which relate charges to costs should be kept uncomplicated.
Compromise with precision is justified to accomplish schedules that are
readily understood. The applicant should be able to calculate the fee
from the schedule with a minimum of instruction.
Where charges are based on complex formulas, as in the case of
surveillance costs distributed according to emissions, good use can be
made of automatic data processing and billing. Wisconsin appears to have
overcome the billing complexity by sending with each bill, a computer
print-out of the parameters and billing computation. A space is allowed
on the print-out sheet for up-dating and correcting data. Experience
has shown that data is up-dated and not always in favor of the source.
D. MAJOR CONSIDERATIONS IN SUPPORT OF AND IN OPPOSITION TO FEE SYSTEMS
1. In Support of Fee Systems
(a) Fees charg.ed for services directed toward enforcement shift a
portion of the burden of financing from the general public through
the use of tax-based funds to the sources of air pollutant emissions.
(b) There is a tradition of many years that new construction and
use of land is controlled by the permit system and such permits
are issued only after a fee is paid. The installation permit with
the fee for constructing and installing source processes and equipment
to control air pollution emissions is part of this tradition. The
operating permit extends the system for more complete control.
(c) Collection of fees for services is easily managed with a
minimum of default of payments
(d) Effluent charges can have a positive influence on enforcement.
Such assessments could motivate controls of air pollution emissions
solely for economic reasons.
(e) A sense of fairness dictates that sources who cause pollution
and receptors who benefit from control should share the burden of
enforcement. The formula will differ from place to place, but in the
absence of a data base for dividing costs, a starting point might be
"fifty-fifty", with sources and the public sharing equally in the
overall costs of agency operation.
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2. In Opposition to Fee Systems
(a) When an agency becomes dependent upon fees and charges for all
or a major share of Its operating funds, there may develop an aura
of doubt as to the freedom of choice of program emphasis. Which
services grow in importance, those that generate revenue or those
that reduce emissions and improve air quality? If revenue and control
are parallel and in the same direction then one complements the
other. But where such is not the case, the burden of choice rests
heavily upon administrators to set the course of operation along the
most productive path toward the agency goal, of acceptable air quality.
(b) Apportionment of costs between sources and activity becomes a
formidable undertaking. Emission inventory is not an exact science.
The basis for charging in relation to contribution needs definition
which is available only to themore advanced program areas.
(c) Fees and charges for a small number of major sources can be
managed. But consider the sheer weight of numbers JWhepeccost
sharing is to be spread among all sources of a populous area as New York
City with a potential of 800,000 sources in 300 square miles. Then
look at the dispersion problem of a state program-^ as in Oregon
with 6000 sources located in 88,400 square miles. Detail problems
will grow as fee systems are extended from a few major contributors
to the equitable sharing among all sources.
(d) A subtle but important consideration is the potential for
programs supported entirely and generously by fees and charges, to
become self perpetuating. Budgets from tax-based funds are subject
to annual review by elected representatives of the people thereby
exercising control often lacking in fee supported regulatory programs.
(e) Costs of collecting civil penalty assessments can be considerable.
Experience of New York City shows that the operating costs of the
Environmental Control Board, whose function is to adjudicate charges
of violation and assess penalties exceed the collection of penalties
imposed. Collection of civil penalties is not as automatic and
manageable as charges made for other service functions as permits
and inspections.
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E. REVENUE SYSTEMS COMPARED
Which revenue system is best for which agency? This question is not
answerable. Each system is constructed to accomplish a stated purpose.
To determine which system it should adopt, an agency must first
eatablish the objective to be accomplished. Is the system to produce
revenue to shift the financing burden? Are the fees and charges to aid
enforcement? Will enforcement and fund shift be mutual objectives?
When such questions are answered, the fee or charging basis is structured
bearing in mind that approval i)y elected representatives of the people
wi11 be requ i red.
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TASK 2
2.0 AGENCY INTERVIEW GUIDE k. Date of Contact
General
Agency Name
2. State . . ._.. Regional j County City
3. Person Interviewed:
Name Name
Title Title,.
Name Name
Title Title
REVENUE PRODUCING SYSTEMS (Task l)
Group A
A.I Permits to Construct, (one time)
Al.) Permits to Operate (one time)
A2 Recurring operational permits (annual?)
A3 Monitoring/Surveillance charges (Michigan)
Kk » Source Analysis charges (Source test or witness)
AS Fuel Analysis charges
A6 Business License fees (Solid fuel dealers license)
A7 Motor Vehicle Inspection fees
A8 Application for Variance or Hearing Board Proceedings
A9 Open Burning permits
All
AI2
Group B
Bl Earmarked taxes (Bay Area)
B2 Contractual Services with Other Communities (SWOvPlan)
Group C
Cl Authorized but not charged (Record why)
Group D (Specialized charges)
01 Charges for Technical Reports and Information (LA)
Group E
El Fines and Penalties (Court assessed)
E2 Civil Penalties (Admin. Assessed)
Notes to Revenue Producing Systems
1. Where automatic penalties are provided for follow by P.
2. Note the following
S for a scheduled (variable) fee
f for a fixed fee (the same for all applicants)
V variable depending upon time required (actual cost of the work)
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6. Obtain a copy of Fee System Schedule of Charges of otherwise
describes the fees and charged made.
Response.
7. Legal Authority for collecting fees or charges.
Response.
8. What is the mechanism for collecting Fees By Fee Designation Number.
Resonpse.
9. DISPOSITION OF REVENUES FROM FEES AND CHARGES
9.1 Deposited to General Fund without designation. __^_^
9.2 Deposited to General Fund designated for agency activity.
9 3 Retained by agency without designation.
S.k Retained by agency designated to specific activity. _^^_
9.5 Other:
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10. If response is 9-2 or 9.4 or otherwise shows "for agency activity"
is the budget appropriation reduced by the amount of fees antici-
pated to be collected? , .
10.1 If yes, what provisions are made to make up deficit if fees
collected are not up to predicted amount?
Dollar Volume of Fees & Charges and Unit Volume (or other fee
parameter) for last operational year and current year.
Fee
Class
LAST operational yr.
$ Revenue
Units
Predicted for current yr.
$ Revenue
Units
12 Cost of Collecting Fees? (Estimate in man years of $ cost of % fees
collected) ,
13. Diffuculty of collecting Fees? % of total uncollected
Remarks.
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AGENCY BUDGET & SOURCE OF FUNDS VS COSTS
]k. BUDGET VS COSTS (If available obtain copy of budget request for current
and future years (to 1979)
Agency Total
A. Administration
B. Engineering
C. Monitoring
Technical Services
(Source Test)
D. Enforcement
E- Others
F. Others
G. Others
H. Others
Last Yr '
Expend! tures
Current '
Budget
% of Bu
19
dget Al
19
locatic
19
>n-Reveni
19'
lemarks
Syst.
15. SOURCES OF FUNDS
Source
Category
-
General (Tax Based)
State Funds to Local
(State Tax Base)
Federal Funds
Retained Fees
Others
Others
Others
Last Yr.
£
Current Yr.
F
19
rejectee
19
\ Years
19
19
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16. Are there any enforcement benefits from any of the revenue systems?
16.1 What are the disadvantages of the present revenue systems?
From Agency Standpoint:
From Users Standpoint:
17. You now generate about % of your total budget requirements by fees and
charges. Would you welcome a higher percentage of your budget requirements
generated by fees and charges? ____^_
17.1 If the answer to 17. is yes, what percentage do you believe should be
generated by charges for fees and services? %
17.2 Why do you like this higher percentage?
17.3 Would you require Board or Legislative Action to increase fees?
If you wished substantially increased present fees, estimate the reaction of
Board or Legislation to such a request. What length of time would be
required if you believe they would consider higher fees?
18. Do you have any "pet" ideas you would like to have available to generate
revenue which you do not at present have? Describe.
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18.1 What would be the benefits from such new idea system?
18.2 Would such 'new idea1 system require Board of Legislative Action?
18.3 How long would it take to get such 'new idea' system adopted?
]8.k Once adopted, how long would it take to put into operation?
18.5 What would reaction of Users be to such 'new idea1 system?
19- How do you define a "Source"?
20. Population served?
Area served?
No. of sources?
21. Request
Organization Chart with positions required
Annual activity report
Annual or other Budget or Fiscal Report
Other reports or documents which are pertinent to this survey
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TECHNICAL REPORT DATA
(Please read Inalructions on the reverse be lore completing)
. REPORT NO.
EPA-450/3-75-018
4. TITLE AND SUBTITLE
Revenue Producing Systems in Selected Air
Pollution Control Agencies
5. REPORT DATE
Sept. 1974
6. PERFORMING ORGANIZATION CODE
AUTHOR(S)
8. PERFORMING ORGANIZATION REPORT NO.
Charles H. Gruber
. PERFORMING ORGANIZATION NAME AND ADDRESS
University of Cincinnati
722 Rhodes Hall'
Cincinnati, Ohio 45221
12 SPONSORING AGENCY NAME AND ADDRESS
U. S. Environmental Protection Agency
Office of Air Quality Planning and Standards
Controls Programs Development Divisiqn
Research Triangle Park, North Carolina 27711
I. RECIPIENT'S ACCESSIOI*NO.
10. PROGRAM ELEMENT NO.
2AH137
11. CONTRACT/GRANT NO.
68-02-1454
13. TYPE OF REPORT AND PERIOD COVERED
14. SPONSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
16. ABSTRACT
This paper reports the findings of a study of revenue producing systems in nine
air pollution control agencies. The revenue producing systems include various permit
fees, inspection fees, monitoring/surveillance fees and specially earmarked taxes.
The agencies studied included two State agencies (Oregon and Wisconsin) and seven
local agencies (St. Louis, Philadelphia, Chicago, New York, Los Angeles, San Francisco
Bay Area, and Puget Sound). The study found that collecting fees usually presented
few problems except where fees were levied against other public entities (e.g.*
schools, government buildings). Revenues from fee systems do shift some burden from
general tax based funding to the sources of air pollution. Kowever, it was found
that, in the agencies studied, only a small portion of agency budget requirements
come from fees; the average being 9 percent. The study also concluded that fees alone
are not major enforcement aids and have little direct effect on pollution control.
17.
. KEY WORDS AND DOCUMENT ANALYSIS
DESCRIPTORS
b.IDENTIFIERS/OPEN ENDED TERMS
COSATI l-'icld/Group
13. DISTRIBUTION STATEMENT
Release Unlimited
19. SECURITY CLASS (This Report)
Unclassified
21. NO. OF PAGES
79
20. SECURITY CLASS (Thispage)
Unclassified '
22. PRICE
EPA Form 2220-1 (9-73)
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