HD67 - Review of the Department of Environmental Quality


Executive Summary:
HJR 531, approved by the 1995 General Assembly, directs JLARC to examine "the organization, operation, and performance" of the Department of Environmental Quality (DEQ). JLARC staff completed an interim report on DEQ's reorganization in December 1995. This report, which completes JLARC's review of the agency, focuses on DEQ's operation and performance as it relates to the air and water programs.

DEQ has existed for less than four years. During this time, the agency has undergone a merger of four agencies to create the new department in 1993, a significant change in organization to accommodate regionalization of the agency's operations in 1994, and a significant downsizing of the agency's staff in 1995. DEQ has also had three directors during the first three years of its existence.

At present, DEC is not fulfilling many of the goals that the General Assembly established for it when the agency was created in 1993. Indeed, DEQ's current focus appears to lack commitment to the agency's core statutory goals of protecting the State's environment from impairment. Most significantly, DEQ is not meeting its statutory and constitutional mandate to protect State waters from impairment. The "report card" graphic below provides an assessment of DEQ's efforts to meet the major aspects of its statutory mandate.

There are five major conclusions of this study. These conclusions are summarized on the next page, and then each is discussed further in this report summary.

DEQ Report Card:
Major Agency Functions

• = Satisfactory
?- = Satisfactory with Improvement Needed
X = Unsatisfactory

Protecting the State's air quality: ?-
Protecting the State's waters from Impairment: X
Permitting: ?-
Monitoring: ?-
Inspections: X
Air enforcement: ?
Water enforcement: X
Environmental planning/analysis: X
Internal management: X

• Significant weaknesses in water inspections, monitoring, enforcement, and planning have undermined DEQ's ability to protect State waters from impairment.

• The air program does not exhibit the same degree of weakness as the water program, but needs to implement the Title V permitting program, address a serious decrease in inspections, and plan for proposed new federal standards.

• The State's air quality has continued a long-term trend of improvement, but water quality indicators are at best mixed, and DEQ data does not support the contention that water quality is improving. In fact, monitoring results for fecal coliform bacteria suggest cause for concern that water quality may be worsening in some river basins.

• DEQ has failed to assess penalties, or has assessed minimal penalties, in instances of direct impairment of State waters.

• Poor leadership has resulted in low employee morale and trust in agency management, poor communication, excessive top management positions, and poor resource planning, and has severely limited DEQ's institutional capability to meet its statutory mandate.

DEQ Water Program Has Serious Deficiencies

JLARC staff's review identified significant weaknesses in DEQ's water program that have undermined the agency's ability to protect State waters from impairment:

• Water monitoring lacks sufficient biological monitoring, is inconsistent among regions (for example, Northern Virginia staff unilaterally decided not to monitor streams in Fairfax County they believe to be impaired), and lacks central office oversight.

• DEQ water compliance inspections have decreased 49 percent since DEQ's reorganization in fiscal year 1995; and all water inspections have decreased 31 percent since DEQ's reorganization, placing Virginia next to last in EPA Region III in the percentage of major sources inspected (Region III consists of the states of Delaware, Maryland, Pennsylvania, West Virginia, Virginia, and the District of Columbia).

• Virginia lacks both a laboratory certification program and a mobile laboratory, limiting the State's ability to verify the self-reported data on which DEQ's main water permitting program is based.

• DEQ water enforcement has decreased drastically, particularly with regard to formal enforcement actions. Civil penalties collected for water permit violations decreased from $327,286 in FY 1992 to $4,000 in FY 1996, and Virginia lagged behind the other 11 states surveyed by JLARC staff in the amount of water penalties collected for FY 1996 (the next lowest state collected more than eight times the amount of Virginia's water penalties).

• DEQ does not conduct adequate water resources planning and has not submitted a statutorily mandated annual water resources report for the past ten years.

• DEQ has not met its grant commitments for the water program, leading EPA to withhold $1.6 million in grant funds from the Commonwealth.

Some Cause for Concern with DEQ's Air Program

At present, DEQ appears to meet its mandate to protect the State's atmosphere from impairment. However, this review identifies several concerns regarding the air program that need to be addressed.

• Air inspections have decreased by30 percent since 1992. Virginia is now last in EPA Region III in the percentage of major air sources inspected.

• Virginia is the only one of the 50 states whose Title V permit program has been disapproved by the EPA, and DEQ continues to delay planning and hiring staff for this program.

• DEQ's planning for improved air quality in Hampton Roads and Richmond has focused on stop-gap measures and needs to incorporate longer-term, systematic approaches for improvement, particularly if proposed new federal standards for ozone and particulate matter are adopted.

Air Quality Shows Continuing Trend Towards Improvement; Water Quality Trends Are, at Best, Mixed

Since the creation of DEQ in 1993, air quality has continued to improve, part of a long-term trend set in motion by the adoption of the Clean Air Act in 1972. Two of the Commonwealth's three remaining nonattainment areas for National Ambient Air Quality Standards (NAAQS) are now eligible for re-designation. However, to maintain the favorable trends in air quality, DEQ needs to plan for meeting proposed new federal standards for ozone and particulate matter, and for implementing the Title V operating permit program.

On the other hand, neither DEQ's own analysis nor JLARC staff's analysis of the agency's monitoring data supports the assertion that the State's water quality has improved since the creation of DEQ in 1993. There has probably been a long-term improvement in the State's surface water quality since the passage of the federal Clean Water Act in 1972. A combined State, federal, and local investment of approximately $2.1 billion dollars during this time in sewage treatment plant upgrades has helped account for much of this improvement. However, DEQ is not meeting the current challenges of the water quality program. These include the following:

• identifying the impaired waterways in the Commonwealth;

• dealing with long-term cases of noncompliance and enforcing the water pollution laws in a certain, timely, and consistent manner to ensure compliance by the regulated community;

• implementing an effective regulatory program in the State's groundwater management areas; and

• conducting water supply planning to ensure an adequate supply of drinking water as the Commonwealth continues to experience rapid population growth.

The State continues to experience difficulty in addressing long-term noncompliance and does not have a consistent, credible enforcement program, even in cases where point sources of pollution are causing impairment of waterways. In the face of significant opposition from the regulated community, DEQ continues to grapple with the role of metals and other toxic pollutants in water quality. DEQ has yet to expand its biological monitoring program sufficiently, and the agency has yet to establish a credible groundwater regulatory program. Finally, DEQ has neglected water supply planning, leaving a critical gap in the Commonwealth's environmental programs. DEQ's lack of leadership in these areas puts the State's future water quality at risk.

DEQ data and other water quality data do not support the contention that water quality has been improving statewide since the creation of DEQ in 1993. JLARC staff examined DEQ monitoring data as reported in the 305(b) report, monitoring data from the U.S. Geological Survey (USGS), DEQ's 303(d) impaired waterways list, as well as monitoring data and modeling for the Chesapeake Bay Program. Both DEQ and USGS data show mixed results tor water quality in recent years, with a trend towards an increase in fecal coliform violations.

Chapter IV of this report identifies several shortcomings in DEQ's 303(d) list, which is frequently cited by DEQ management as evidence of improving water quality. These shortcomings include: inconsistency in monitoring among regional offices and lack of central office oversight of regional monitoring, failure to monitor certain streams in Northern Virginia believed by DEQ staff to be impaired, lack of metals data, and insufficient biological monitoring. In addition to the shortcomings noted by JLARC staff regarding the 303(d) list, the percentage of impaired waters identified in the 1996 version of this list has actually increased to approximately five percent from about three percent in the 1994 list. This increase in impaired waters between the 1994 and the 1996 303(d) lists is inconsistent with the assertion of improved water quality.

Poor Leadership Has Diminished DEQ's Institutional Capability

The merger of four predecessor agencies into DEQ was intended to enhance the institutional capability of the State's environmental regulatory agencies to address environmental problems. Instead, management problems at DEQ have diminished the institutional capability of the agency to meet its statutory mandate. Management weaknesses at DEQ are manifested in a number of ways, including:

• low employee morale and trust in agency management;

• poor internal communication and problematic relationships with the Office of the Attorney General and the Environmental Protection Agency;

• employee fear of retaliation for upsetting members of the regulated community;

• excess top management and management support staff;

• poor resource planning, including shortsighted space planning and shortages of staff in key areas such as enforcement and compliance staff; and

• unnecessary expenditures, such as purchase of satellite television service for four top managers, and a questionable relationship with a management consultant that was initiated on a sole source basis because the consultant understood "the ideology and tenants [sic] of the Governors Office and the Secretary of Natural Resources."

DEQ Needs to Focus on Its Statutory Mission

DEQ needs to refocus its efforts on meeting the agency's constitutional and statutory mission. In particular, DEQ needs to improve its commitment to protecting State waters. This will require a greater commitment to conducting inspections and water resources planning. In addition, DEQ needs to improve its water enforcement program to prevent impairment of State waters, remove the economic benefit of noncompliance, and deter future violations.

DEQ also needs to focus its internal management on its statutory mandate. Rather than allocating scarce resources to excessive top management positions and other unnecessary expenditures, DEQ needs to allocate increased resources to its core statutory responsibilities of protecting the State's environment. DEC management also needs to communicate clearly to its employees that the primary mission of the agency is to protect the environment. At present, nearly half of DEQ's employees fear for their jobs if they make a decision consistent with law or regulation that upsets a member of the regulated community. DEQ management needs to emphasize to its employees that enforcing environmental laws and regulations is the mission of the department - not a reason to fear retaliation.