17-19 Wastewater/Stormwater

Permit Fee Rulemaking January 10, 2017

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Wastewater/Stormwater

Permit Fees Update for 17-19

Wastewater Discharge Permit Fee

Task Force MeetingJanuary 10, 2017

Agenda

3

Introductions

Background on Permit Fee Increases

Budget Impacts

Agenda

4

Approach to 17-19 Biennium Fees

Rulemaking Timeline

Questions / Discussions

Background

5

Background

6

• Municipal sanitary sewer discharge permits required

• Construction Grant Program helps build POTWs

1972 Clean Water act establishes

NPDES program.

• Municipal sanitary sewer secondary standards are established in federal and state laws

1977 EPA establishes BCT for POTWs

• Ecology administers 250 municipal POTW permits

• State Revolving Fund established to help upgrade POTWs

1987 Clean Water Act amended to require water quality based

limits

• Approximately 6,000 wastewater & stormwater discharge permits

Today Ecology has over 40 permit

categories

Background

7

• Mandated that Ecology create a fee program for issuing & administering wastewater discharge permits

Initiative 97

(1988)

At the time, the fee program was

structured around individual major

industrial and municipal

wastewater permits

Fee Program Mandate

Background

8

“Fees shall be established in amounts to fully recover and not to exceed expenses incurred by the Department…”

(RCW 90.48.465, Water discharge fees)

Background

90.48.465 creates inequities by:

• Capping fees for municipal POTWs

• Establishing and capping fees for Dairies

• Setting base fees for certain aquatic pest control permits

• Requiring Ecology to mitigate impacts to small businesses

9

What Do Permit Fees Pay For?

10

Protection against

3rd-party lawsuitsPermit

Writing

Permit Applications

and Modifications

Operator Outreach

Engineering Oversight

Inspections

Technical Assistance

Monitoring and

Evaluating Compliance

Plan and Document

Review

Overseeing Pretreatment

Programs

Administration of Permit Program

15-17 Permit Fee Increases

11

Fee Increases Prior to 15-17

For the 6 years prior to 15-17, Ecology had only increased fees for select

categories that were under-paying

Categories that were over-paying were not increased

12

Fee Increases for 15-17

13

Heading into 17-19

14

Before the 2016 Supplemental

15-17 Fee Increases

Our Final 15-17 Budget

13-15 EOB Savings

15

Financial flexibility to look at

approaching fee increases for 17-19 and beyond more

strategically

HST Revenue Decline

16

MTCA Update

17

MTCA Funding

STCA

LTCAELSA

37% of the agency’s operating budget

($178M) 30% of WQ’s operating budget

($27M)

Including Permit Fee Supported Work

29% of the agency’s capital budget

($400M)

Supplemental Budget Impacts

18

Delays in Stormwater and Cleanup Projects

PPG and Capacity Grant Reductions

Vacancy Savings Reductions

Supplemental Budget Impacts

19

Delays in Stormwater and Cleanup Projects

PPG and Capacity Grant Reductions

Vacancy Savings Reductions

Shift STCA Expenditures to Permit Fees

15-17 Projected Fund Balance

20

Beginning Fund Balance and Revenue

Beginning Fund Balance (- Cap Reserve) $3,459,111

Projected Revenue for 15-17 $41,609,784

Beginning Fund Balance + Projected Revenue $45,068,895

Expenditures

2015-17 Biennial Budget $41,819,000

Projected Ending Fund Balance

2015-17 Projected Ending Fund Balance $3,249,895

15-17 Projected Fund Balance

21

Beginning Fund Balance and Revenue

Beginning Fund Balance (- Cap Reserve) $3,459,111

Projected Revenue for 15-17 $41,609,784

Beginning Fund Balance + Projected Revenue $45,068,895

Expenditures

With 2016 Supplemental Budget: +$3M $44,810,000

Projected Ending Fund Balance

2015-17 Projected Ending Fund Balance $258,895

17-19 Budget Outlook

22

37,494,000 37,790,000

41,052,000

42,961,000

34,000,000

35,000,000

36,000,000

37,000,000

38,000,000

39,000,000

40,000,000

41,000,000

42,000,000

43,000,000

44,000,000

0 9 - 1 1 1 1 - 1 3 1 3 - 1 5 1 5 - 1 7

EXPENDITURE GROWTH

Since 09-11, our costs have increased on

average $1.8M each biennium

15-17 amount does not include 15-17 COLAs or the impact of the building COP payoff

40,000,000

40,500,000

41,000,000

41,500,000

42,000,000

42,500,000

43,000,000

43,500,000

44,000,000

44,500,000

45,000,000

15-17 17-19

41,737,000

44,926,000

Biennial Appropriation Levels for Fund 176

17-19 Budget Outlook

23*Based on Governor’s 2017-19 Operating Budget Proposal

17-19 Projected Fund Balance

24

Beginning Fund Balance and Revenue

Beginning Fund Balance (- Cap Reserve) $258,895

Projected Revenue for 17-19 (with no fee increase)

$41,647,770

Beginning Fund Balance + Projected Revenue $41,906,665

Expenditures

2017-19 Operating Budget* $44,926,000

Projected Ending Fund Balance

2015-17 Projected Ending Fund Balance ($3,019,335)

*Based on Governor’s 2017-19 Operating Budget Proposal

Fee Increases for 17-19

25

Fee Increase Options Explored

26

$2.15M

$3.02M

Fee Increase Options Explored

27

$2.15M

$3.02M

Fee Increase Options Explored

28

$2.15M

$3.02M

Increase only underpaying

categories

Not a sustainable

solution

12.83% increase in FY18

10.20% increase in FY19

Fee Increase Options Explored

Increase all non-capped categories by 5.9% and 5.0%

Does not try to address category

equity at all

29

Fee Increase Options Explored

30

$2.15M

$3.02M

12.83% increase in FY18

10.20% increase in FY19

New Revenue Needed

Overpaying Categories:

5.50% FY18

4.50% FY19

Need to Increase Above the FGF

5.9% FY18

5.0% FY19 Underpaying Categories:

6.37% FY18

5.58% FY19

Impact to Proposed Approach

31

Impact to Proposed Approach

32

17-19 Rulemaking

33

Timeline for 17-19 Rulemaking

34

Date Activity

November 29, 2016 Agency approval to proceed with rulemaking.

December 7, 2016 Announce rulemaking

December 9, 2016 Rulemaking website goes live and Ecology mails/emails notice to all permittees and other interested parties

Early January 2017 Meet with stakeholder workgroup to review proposed increases and answer questions

March 1, 2017 File the proposed rule (begins the public comment period)

April 4, 2017 Hold public hearing (in Lacey and via webinar)

April 11, 2017 Public comment period ends

April-May 2017 Review and address public comments received

June 28, 2017 Adopt rule

July 29, 2017 Rule become effective

Questions / Discussion