Vermont Department of Environmental Conservation

Waste Management Division

Final Proposal for the State Innovations Grants 2004

1\. **PROJECT TITLE:** An Environmental Results Program for the Retail
Gasoline Sales

Sector

2\. **APPLICANT INFORMATION:**

> Applicant Name: State of Vermont Department of Environmental
>
> Conservation (VT DEC), Waste Management Division
>
> Project Contact: Peter W. Marshall, VT DEC, Waste Management Division
>
> Address: 103 S. Main Street/West Office Bldg.
>
> Waterbury, Vermont 05671-0404
>
> Phone: (802) 241-3868
>
> Fax: (802) 241-3296
>
> Email: <peter.marshall@anr.state.vt.us>

3\. **FUNDING REQUESTED: [\[Financial information redacted\]]{.mark}**

4\. **PROJECT PERIOD: [September 2004 - September 2006 (may be adjusted
]{.underline}**

**[depending on EPA Award Date)]{.underline}**

5\. **NARRATIVE WORKPLAN**

**Project Background**

This project would use the Environmental Results Program (ERP) model to
achieve a measurable improvement in compliance with sections of several
federally delegated regulatory programs at facilities within the retail
gasoline sales sector as well as other facilities regulated by the
Vermont Underground Storage Tank (UST) program. The project seeks to
measure and improve compliance at the subject facilities with: the
Underground Storage Tank program, RCRA generator requirements; Stage II
(and possibly Stage I) air rules; and the floor drain aspects of the
Underground Injection Control (UIC) program. In addition, this project
could evaluate compliance with the Spill Prevention Control &
Countermeasures (SPCC) plan requirement. Enhanced outreach to the sector
would focus on the use of a sector-specific regulatory and best
management practices (BMPs) workbook to achieve cross-media compliance
and pollution prevention, and to provide training for the sector.

The State of Vermont currently has approximately 1.5 full-time
equivalents (FTEs) conducting inspections in its federally delegated UST
Program to oversee compliance with the Vermont Underground Storage Tank
Regulations (VUSTR). The regulated community consists of approximately
2,400 USTs at approximately 1,100 facilities. The Vermont UST program
currently conducts approximately 100 inspections per year and does not
anticipate having new resources in the foreseeable future to
significantly increase the number of inspections. At the current rate of
inspection, it would take the Vermont UST Program over 10 years to
evaluate each facility once. Under the ERP model, an assessment of every
facility's compliance status would be conducted and submitted to VT DEC
on an annual basis.

The Vermont UST program is an established program seeking improved
sector-wide compliance through development of a sector specific ERP
Program. The ERP model can achieve this goal through a combination of
enhanced technical assistance, outreach, targeted and random
inspections, and a mandatory self-certification program. Retail gasoline
sales sector facility operations have historically led to significant
environmental impacts from the release of petroleum products to the
environment. The following three graphics demonstrate the need to
address this widespread and serious environmental problem of improper
management of retail gasoline sector facilities. As these graphics show,
the remediation of motor fuel UST (similar to an RGS definition)
clean-up costs account for 70% of the Vermont Petroleum Cleanup Fund
annual expenses. In addition, virtually no town has been spared from a
release from an UST system.

In addition, the Vermont RCRA program has found the retail gasoline
sector to have unique, and very common, compliance problems. In the last
few years, the Vermont RCRA program has forwarded formal enforcement
cases against retail gasoline sector facilities involving 18 locations.
Several of these cases also involved violations of the Vermont
Underground Storage Tank Regulations as well as Stage II air violations.

**Project Overview**

An Environmental Results Project (ERP) is a common sense approach to
achieving enhanced environmental protection. The VT DEC proposes to use
the ERP approach to assist Retail Gasoline Sector (RGS) facility owners
and operators in understanding and complying with several applicable
environmental program regulations and going beyond compliance to prevent
pollution and provide for increased protection of public health and
public and worker safety. The ERP approach provides facility owners and
operators the information needed to maintain applicable operational
requirements while also improving accountability to the public for
environmental performance.

This proposed Environmental Results Project will include the following
typical components:

-   A workbook that includes Best Management Practices (BMPs) and
    compliance requirements. The workbook is a guide to compliance with
    the self-certification form mentioned below;

-   A BMP checklist for use by the facility in assessing the status of
    compliance, pollution prevention, and other health and safety
    practices;

-   A compliance self-certification form that the facility owners and
    operators are required to complete, sign and return. On the form,
    the facility owners and operators must certify the current
    compliance status of the facility and acknowledge that the facility
    must comply with all applicable environmental laws;

-   A Return to Compliance form that is used to address compliance
    problems identified in the self-certification process that cannot be
    corrected at that time. The form establishes a return to compliance
    schedule and deadline for compliance. This form must be signed and
    returned when a facility cannot certify full compliance with all
    applicable regulatory requirements;

-   Workshops to provide technical and compliance assistance to facility
    owners and operators, and to provide training on the requirements of
    the ERP process;

-   Inspections by the VT DEC to confirm the accuracy of the
    certifications and compliance with the applicable environmental
    regulations; and

-   Ongoing technical and compliance assistance by telephone, on-site
    assistance (as resources allow), and a project-specific web page
    with FAQs and additional resources.

This project facilitates the transfer of innovation by being designed to
accommodate: additional regulatory requirements within this sector
program; the use of the project model for other industry sectors and
regulatory programs within Vermont; and the use of the project model by
other states. The project would be fully documented, modular in design,
and tracked on the project's web site. It is anticipated that this
project will serve as a model for other sectors where there is overlap
between regulatory programs, or pollution prevention opportunities, to
communicate with one voice to regulated community in order to promote
multi-media compliance. This proposal is designed to coordinate programs
where they overlap naturally rather than force a multi-media model in a
situation where it does not belong. This approach may likely be widely
used in the future as a successful alternative to the cumbersome
multi-media programs of the past. This program seeks to increase both
compliance within the sector as well as beyond compliance activities
(reduce pollution) with a minimal increase in resources.

**Project Workplan**

This project proposes several areas of innovation: economy, modularity,
assistance, and the communication of compliance results.

First, due to a limited budget and limited grant availability, this
project would demonstrate how to implement an "ERP on a shoestring."
Because the ERP concept is now sufficiently established, the VT DEC can
show through this proposal that a successful ERP can be maintained on a
very limited budget. (The bulk of the grant money will go toward the
development and initial implementation of the ERP). The second element
of economy is the cost savings that will result from the coordination of
reporting requirements of a number of currently uncoordinated reporting
requirements from various programs, many driven by federal law. Both the
regulated community and the VT DEC will benefit from these cost savings.
The sector will receive more cost-effective (to the state) compliance
assistance and well as compliance oversight thereby reducing potential
environmental impacts.

The second area of innovation involves modularity. This proposal would
establish the ERP in a "modular" format that would allow for: (1)
straightforward future expansion to cover new regulatory requirements or
additional regulatory programs, and (2) easy transferability to new
sectors and programs. It would be designed at the outset to serve as a
model for two other areas which the VT DEC believes lend themselves to
the ERP approach: the auto salvage sector and the Stormwater Program's
multi-sector general permit. The project would be designed to be
transferable to other states. A Vermont web page would track the project
and serve as a repository for the project design and reports.

The third area of innovation involves the broad use of technical and
compliance assistance to enhance compliance while, at the same time,
minimizing the potential for the cross-media transfer of pollutants. It
appears likely that the Chafee Bill (S.195 - now before Congress) will
soon require states to increase assistance efforts to the UST regulated
community.

The fourth area of innovation involves the ability of the ERP model to
generate data that measures program performance. This is accomplished by
comparing compliance rates from the initial inspections of a
statistically valid number of facilities to the compliance rates found
through random inspections after the information & education and
self-certification phase of the project. As the public and policy makers
increasingly demand results from governmental efforts, it is not enough
to simply say that we are doing well in meeting our output goals; we
need to be able to demonstrate the specific progress being made in
meeting the desired outcome of enhanced environmental protection. Both
environmental performance and performance measurement would be enhanced
through more effective traditional inspections and enforcement that
would be facilitated by the evaluation of self-certification statements.

Project Schedule (Table)

  -----------------------------------------------------------------------------
  Task/Milestone        Task Description                 Start Date End Date
  --------------------- -------------------------------- ---------- -----------
  Stakeholder Outreach  Outreach to internal and         10/15/04   09/30/05
                        external stakeholders (including            
                        targeted facilities) about the              
                        project.                                    

  Goals identification  Finalize the goals of this       10/15/04   12/30/04
                        project, upon which metrics will            
                        be based                                    

  Develop Logic Model   Develop a logic model with       10/15/04   1/15/05
                        stakeholder involvement. Logic              
                        model can assist in development             
                        of metrics and data needs.                  

  Measures              Development of metrics to be     12/30/04   3/30/05
  identification        tracked by this project.                    

  Prepare legislation   Prepare draft legislation for    10/15/04   12/1/04
                        (1) generic ERP enabling                    
                        legislation for agency (not                 
                        necessary for this ERP, but                 
                        helpful), and (2) fee                       
                        legislation to cover program                
                        costs after grant period                    

  Revise UST            Draft language for mandatory     10/15/04   12/15/04
  Regulations           self-certification for all UST              
                        facilities (or all UST                      
                        facilities in the RGS)                      

  Formal APA Rule       Average timeframe for selective  1/1/05     7/1/05
  Revision Process      rule revisions is 6 months                  

  Facility              Determine the exact              10/30/04   12/30/04
  identification        characteristics of facilities to            
                        be targeted, and compile a list             
                        of facilities from reliable                 
                        sources.                                    

  Statistical           Development of a statistical     1/1/05     3/1/05
  methodology           methodology to drive performance            
                        measurement and analytical                  
                        tasks.                                      

  Data input &          Development and implementation   11/1/04    6/30/06
  management            of an approach to                           
                        cost-effectively inputting and              
                        managing ERP data, including                
                        primary and secondary data.                 
                        Primary data consists of data               
                        from inspection reports and                 
                        facility forms (including                   
                        self-certification forms).                  
                        Secondary data sources include              
                        lists of facilities from                    
                        regulatory and private sector               
                        databases.                                  

  QAPP finalization &   Finalize QAPP based upon results 3/1/05     5/1/05
  approval              of the measures identification,             
                        statistical methodology, and                
                        data management tasks. Primary              
                        data collection will not occur              
                        before relevant parts of the                
                        QAPP are finalized and approved             
                        by EPA.                                     

  Baseline inspections  Inspections at facilities to     5/1/05     7/1/05
                        establish a performance                     
                        baseline. Facilities selected at            
                        random from the entire targeted             
                        population, based upon sample               
                        design from statistical                     
                        methodology.                                

  Workbook and          Finalization of workbook,        3/1/05     7/1/05
  Certification Form    outreach and assistance                     
  Finalization          materials, web resources, and               
                        certification forms.                        

  Facility              Delivery of compliance/technical 7/1/05     10/31/05
  assistance/Outreach   assistance to facilities, which             
                        is expected to take the form of             
                        workbooks, fact sheets and/or               
                        workshops.                                  

  Self-certification    Implementation of a mandatory    9/1/05     10/31/05
                        facility self-certification                 
                        approach. Self-certification                
                        refers to the submission of a               
                        legally binding record of a                 
                        facility's compliance and                   
                        beyond-compliance practices.                

  Self-Certification    Self-Certification and RTC forms 10/31/05   10/31/05
  Deadline              due                                         

  Analysis of           Analysis of Self-Certification   11/1/05    12/15/05
  Self-Certification    data with primary purpose of                
  Data                  identifying opportunities for               
                        selective follow-up (next step).            

  Selective follow-up   Selective follow-up with         12/15/05   3/15/06
                        self-certifying facilities,                 
                        based upon analysis of                      
                        self-certification data.                    
                        Targeted follow-up may include              
                        phone calls, inspections and                
                        enforcement.                                

  Post-certification    Inspections at facilities to     4/15/06    5/15/06
  inspections           establish whether sector                    
                        performance measures (and other             
                        measures) have changed since the            
                        baseline. Inspection data also              
                        used to cross-check                         
                        self-certification data at                  
                        inspected facilities. Facilities            
                        selected at random from the                 
                        entire targeted population,                 
                        based upon sample design from               
                        statistical methodology.                    

  Data analysis         Analysis of baseline,            5/15/06    7/15/06
                        self-certification, and                     
                        post-certification data to                  
                        understand change in facility               
                        performance and overall outcomes            
                        of interest. Assessment of                  
                        project efficiency.                         

  Preparation of Final  Draft and finalize final project 8/15/06    10/15/06
  Project Report        report.                                     

  Reporting to EPA      Reporting shall include          12/30/04   9/30/06
                        quarterly, annual and final                 
                        reports.                                    
  -----------------------------------------------------------------------------

The project would begin immediately after (1) a grant award, and (2) the
approval of the Vermont legislative Joint Fiscal Committee. The project
would begin with the selection of contractor to assist with the
development of the project, internal VT DEC meetings among participating
programs to determine the scope of the project, and the hiring of a
project administrator. The Vermont UST Regulations would be amended to
require the self-certifications. Legislation would also be drafted to
set fees that would allow the project to be self-sufficient after the
grant period. Broad enabling legislation for ERP-type projects that
cross current programmatic boundaries would also be proposed. It is
estimated that this initial work would be completed within four months.

The second phase of the project would be to work with the selected
contractor and stakeholders to develop an implementation plan covering
the development of: the self-certification form, outreach materials, the
sector-specific BMPs and compliance requirements workbook, statistical
requirements for baseline and follow-up inspections, a data management
system, and the creation of a tracking system for project performance.
Baseline inspections would be conducted during this phase of the
project. It is estimated this phase would be completed in 6-8 months.

The third phase of the project would include the outreach efforts and
all self-certification related activities. An information and education
effort to notify the regulated sector of the initiative would be
conducted early in this phase. This would consist of distributing
information by mail and email, maintaining a web page devoted to the
effort, and conducting a series of workshops around the state. The
workbooks containing BMPs, compliance requirements, and the
self-certification forms would be provided in this phase by mail. The
workshops would provide direct outreach and training, and on-site
technical and compliance assistance would be offered as resources allow.
The workshops would also provide a forum to discuss the mandatory
self-certification and provide guidance for its completion. A fee would
be required with the submission of the self-certification.

Enforcement efforts for failure to submit the self-certification form,
the return to compliance form, and/or instances of significant
non-compliance would be conducted in this phase as well. Post
certification inspections would also be conducted in the certification
phase. These inspections serve to verify self-certification data, return
to compliance data, and provide further input into the statistical model
to document changes from baseline conditions.

The fourth phase of the project would involve the analysis of the data
and the development of a report documenting results of the initial round
of work.

**ERP Development and Implementation**

The VT DEC will rely to a large extent on a qualified ERP Contractor to
assist in the development of the ERP experimental design, outreach
initiatives, the statistical model, and necessary QAPP revisions. The
ERP will be developed in consultation with broad stakeholder input that
includes trade organizations and the direct involvement of the target
facilities. The ERP will be developed to maximize the likelihood that
measurable environmental results will accrue from the project. The ERP
will also be developed in a manner that allows for the transfer of the
project design to new sectors and programs in Vermont as well as to
other states.

Implementation of the ERP will follow the experimental model developed
by the project and be governed by sound data collection and analysis
procedures of the project QAPP. The QAPP will be amended as necessary to
ensure data quality objectives are met and measurable environmental
results are documented. The ERP Contractor will assist in the
implementation of the ERP as outlined below:

-   Assist with project design

-   Develop statistical methodology

-   Assist VT DEC Information Technology (IT) staff in the development
    of necessary data systems and hardware infrastructure

-   Assist VT DEC staff in review and presentation of outreach materials

-   Assist VT DEC staff in stakeholder outreach, especially concerning
    the benefits of ERP from experiences of other states

-   Assist VT DEC staff in analysis of project data and presentation of
    results

-   Review data and provide QA/QC

**ERP Process and Methodology**

The ERP model will serve as a framework for coordinating the reporting
that the various DEC regulatory programs require of these facilities.
This coordination will enhance the DEC's ability to view compliance
across programs and will reduce the paperwork burden for both the sector
facilities and the DEC. Although the amount of paper processed by the
sector facilities may at first be increased, the burden associated with
that paperwork should decrease since it will be organized as the
facilities operate, not as government operates, and will be accompanied
by clear guidance for its completion. The various reporting requirements
for this sector are currently program-driven and not coordinated. This
project would minimize reporting burdens by consolidating as many
reporting requirements as possible (others not currently identified can
be added to the project at any time) while also reinforcing, both
internally and externally, the notion that facility compliance crosses
media and programmatic boundaries. It is anticipated that this
coordination, and the automation of the certification report processing,
will result in cost savings that will benefit the regulated community
and the VT DEC.

**Stakeholder Involvement**

The project will seek broad stakeholder involvement in the design and
implementation of the project. Stakeholders will include, at a minimum:
the target facilities, trade groups, municipalities, environmental
groups, all DEC programs with jurisdiction over target facilities, other
state and federal programs with jurisdiction over target facilities, and
the general public. Stakeholder meetings will be announced via
mass-mailings and advertisements in media (TBD). Stakeholder meetings
will be held in various locations around the state to maximize input.

**Performance Measurement**

This project focuses on priority environmental issues by targeting an
industry sector that is present statewide with significant potential for
environmental releases and emissions. The project is intended to improve
compliance within the sector with requirements of four
federally-delegated programs: UST, RCRA generator requirements, the
Clean Air Act (CAA) Stage I & II requirements, and the Safe Drinking
Water Act (SDWA) UIC requirements.

This project would establish sector-specific, cross-media Best
Management Practices (BMPs) as well as compliance guidance materials.
The purpose of the BMPs would be to encourage facilities to go beyond
compliance to reduce waste, pollution, and emissions through the use of
better operation and maintenance practices as well as pollution
prevention practices. This project would encourage the regulated
community to achieve reduced compliance costs by addressing all
compliance and environmental issues at once through cross-media BMPs
(that lead to compliance) rather than narrowly focusing on whatever
problem was identified during the last regulatory inspection.

This project will build on lessons learned from the last decade of
searching for ways to measure prevention efforts by using a mechanism
(ERP) that specifically measures results. The project is likely to
produce quantifiable reductions in hazardous waste generation as well as
quantifiable improvements in compliance with all four prevention
programs. While one of the main goals is to reduce spills and leaks from
UST facilities, the lag time between occurrence and detection may
prevent quantification of these goals.

This project establishes goals for innovation, and indicators to measure
progress toward those goals, by using the ERP model for the project's
structure. The project is designed to demonstrate accountability for
environmental results within the sector by measuring progress towards
the key project indicators from the various project programs on an
annual basis. The information concerning project design, tracking,
measurement, and reporting of results will all be maintained on a web
page devoted to this project. Results from the project would be
generated annually after the first implementation year. Specific goals
for the project would include both environmental result goals as well as
compliance goals. The environmental result goals would be derived from
the key indicators of the project and would likely include measures of:
UST releases, air emissions, and hazardous waste generation (sumps,
spill buckets, and releases). The compliance goals for the project are:

\- to reach approximately 85% participation by the sector facilities
during the first certification year.

\- to reach 100% participation by the sector facilities by the end of
the second certification year.

\- to improve the initial rates of compliance (as determined by the
initial and follow-up random inspections) with selected UST, RCRA, Air
and UIC requirements by 20% by the end of the first certification year
(the second project year).

In the long-term, it is expected that this approach will yield: annual
multi-media compliance measures across all facilities in the sector;
improved sector-wide compliance; reduced emissions and releases; reduced
costs of compliance and program administration; and improved
communication between the regulated community and the VT DEC concerning
compliance (regulatory improvements, self-reporting).

**Data Quality Assessment, Validation and Usability**

Data quality will vary. The quality of the data required to demonstrate
compliance with applicable regulations will be consistent with what is
currently required by the various regulatory programs. Both data and
secondary data will be validated using protocols to be developed in
accordance with the project QAPP, as revised. Cross-checks will be used
wherever possible. Data will be analyzed to ensure that unusable data is
identified and removed from consideration under the project. Further
descriptions of assessment, validation, and usability can be found in
the project QAPP.

**Data Analysis**

All data analysis will be governed by the project-specific QAPP.

**Measurable Environmental Improvement**

This project is designed to improve environmental results by the
intended outcomes of: reducing the threat of releases of petroleum,
hazardous wastes, and hazardous materials to groundwater (a significant
source of drinking water in Vermont) and soils through enhanced
compliance with UST, RCRA, UIC, and sector-specific BMPs; reducing air
emissions through enhanced Stage II vapor recovery compliance; and
reducing hazardous waste generation through the use of the BMPs.

The ERP model will allow for the measurement of annual compliance
progress *for the entire sector, with several environmental laws*. This
proposed ERP model consists of an initial round of inspections of a
statistically valid number of facilities, sector-based multimedia
outreach and education, a mandatory multi-media self-certification on a
sector-specific form, a processing fee, and data analysis that would
result in statistically valid compliance reports to document project
performance. Current environmental programs tend to measure outputs
rather than outcomes, whereas this approach would measure environmental
results on a holistic cross-media basis.

**Public Involvement**

Public involvement will be carried out as part of the stakeholder
involvement since the target facilities represent a sector that has had
historical impacts on neighborhoods from releases of petroleum to soils
and groundwater. It is anticipated that the public will participate to
improve the compliance status of these facilities

**Reporting**

Quarterly reporting to EPA will provide the status of the pilot project
and progress towards milestones on the project schedule.

**Project Budget (estimated)**

See attached budget sheet.

**Pilot Project Organization, Roles and Responsibilities**

This pilot project will be managed from the Waste Management Division of
the VT DEC. Three supervisors from the Division will have key roles in
establishing the project and providing oversight of personnel and
resources. These three supervisors are Peter Marshall (project manager),
Chief of the Hazardous Waste Management & Prevention Section; Marc Roy,
Chief of the Hazardous Waste Technical Services Section; and Ted Unkles,
UST Program Supervisor. Resumes for these three key personnel are
attached. They have over 40 years combined experience in working with
the VT DEC with UST and hazardous waste management programs.