Performance audit, Arizona Department of Environmental Quality, Air Quality Division

              A REPORT
TO THE
ARIZONA LEGISLATURE
Debra K. Davenport
Auditor General
Arizona Department of
Environmental Quality–
Air Quality Division
Performance Audit Division
SEPTEMBER • 2004
REPORT NO. 04 – 07
Performance Audit
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators
and five representatives. Her mission is to provide independent and impartial information and specific recommendations to
improve the operations of state and local government entities. To this end, she provides financial audits and accounting servic-es
to the State and political subdivisions, investigates possible misuse of public monies, and conducts performance audits of
school districts, state agencies, and the programs they administer.
The Joint Legislative Audit Committee
Representative John Huppenthal, Chair Senator Robert Blendu, Vice Chair
Representative Tom Boone Senator Gabrielle Giffords
Representative Ken Clark Senator Peter Rios
Representative Ted Downing Senator Thayer Verschoor
Representative Steve Yarbrough Senator Jim Weiers
Representative Jake Flake (ex-officio) Senator Ken Bennett (ex-officio)
Audit Staff
Lisa Eddy, Manager and Contact Person
Catherine Dahlquist, Team leader
Nate Wayman
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.auditorgen.state.az.us
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
September 15, 2004
Members of the Arizona Legislature
The Honorable Janet Napolitano, Governor
Mr. Stephen A. Owens, Director
Arizona Department of Environmental Quality
Transmitted herewith is a report of the Auditor General, A Performance Audit and Sunset
Review of the Department of Environmental Quality, Air Quality Division. This report is in
response to a November 20, 2002, resolution of the Joint Legislative Audit Committee.
The performance audit was conducted as part of the Sunset review process prescribed in
Arizona Revised Statutes §41-2951 et seq. I am also transmitting with this report a copy of
the Report Highlights for this audit to provide a quick summary for your convenience.
As outlined in its response, the Department agrees with all of the findings and plans to
implement the recommendation.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on September 16, 2004.
Sincerely,
Debbie Davenport
Auditor General
Enclosure
Services:
The Air Quality Division ensures Arizona’s air safety and qual-ity
by monitoring and analyzing air quality data, regulating
sources of air pollution, and working with other state, local,
and federal agencies to plan and implement strategies to
protect Arizona’s future air quality. The Division is divided into
the following five areas of responsibility:
􀁺􇩁 Air Assessment Section—Collects, analyzes, and
reports air quality data so that decisions can be
made to improve air quality in Arizona.
􀁺􇩃 Compliance Section—Conducts compliance evalua-tions
on facilities permitted by the Division and other
air pollution sources covered under division rules,
responds to air pollution complaints from the public,
and pursues enforcement, if warranted, on those
facilities.
􀁺􇩐 Permits Section—Regulates sources of air pollution
using a system of permits to ensure that the air pollu-tants
do not cause harm to the public health.
􀁺􇩐 Planning Section—Coordinates regulatory aspects of
air quality control, including state-wide plans and
Arizona Administrative Code regulations.
􀁺􇩖 Vehicle Emissions Section—Manages the State’s
vehicle emissions inspection program and provides
oversight of the contractor.
Facilities:
The Division’s staff are primarily located in the agency’s
headquarters at 1100 West Washington Street in Phoenix.
This is a private lease-to-own facility, costing the Department
approximately $3.5 million annually for 184,200 square feet.
The Air Quality Division uses approximately 26,600 square
feet of the facility, which includes an air quality analysis labo-ratory
in the first floor of the adjacent parking garage.
Additionally, department staff located in the Northern
Regional Office in Flagstaff and the Southern Regional office
in Tucson perform some division duties. The Northern
Regional office is located in a privately owned facility where
PROGRAM FACT SHEET
Department of Environmental Quality
Air Quality Division
Director's Office
6
Air Assessment
43
Vehicle
Emissions
39
Compliance
27
Permits
23
Planning
16
Program revenue:
$59.4 million (fiscal year 2004, actual)
Program staffing:
154 FTE positions, including 28 vacancies (as of May 2004)
Office of the Auditor General
General Fund
$623
Sales and charges
for services
$44.2 million
Licenses, permits,
and other fees
$9.8 million
Federal grants
$5.2 million
Investment
earnings
$274,254
the Department leases 4,600 square feet for $83,900 annually. The Southern Regional Office is
located in 5,700 square feet of a state-owned building that the Department leases from the
Department of Administration for $116,000 annually. The Division also administers the vehicle
emissions inspection program from state-owned buildings in Phoenix and Tucson; the Phoenix
office has 14,720 square feet with $74,400 in annual operations and maintenance costs, while
the Tucson location costs $45,300 annually in operations and maintenance for 4,504 square feet.
Equipment:
The Division has specialized equipment, such as air quality monitoring equipment that measures
the concentration of various pollutants in air samples or the range of visibility. The Division also
pays the Department of Administration a monthly lease fee of approximately $10,000 for 28 vehi-cles.
Mission:
To control present and future sources of air pollution to protect the environment and ensure the
health and general welfare of the citizens of Arizona.
Program goals:
The Air Quality Division has adopted the Department’s four goals:
1. Improve the quality of Arizona’s air, land, and water.
2. Enhance relationships with the public, regulated community, and agency partners.
3. Provide leadership on children’s environmental health.
4. Provide value to all of Arizona.
Adequacy of performance measures:
The Division’s 18 performance measures are adequate for two of these four goals and include
measures for outcome, output, efficiency, and quality. However, the remaining two goals
addressing external relationships and children’s environmental health could benefit from addi-tional
performance measures to adequately assess progress in these areas. For example, the
Division could add an output measure that reports the number of stakeholder meetings con-vened
by the Division involving representatives from the regulated community and the public.
Source: Auditor General staff compilation of unaudited information from the Department’s Web site, Arizona Financial Information System (AFIS)
Account Event Transaction File for the year ended June 30, 2004, the Department’s Strategic Plan, and other information provided by the
Department.
State of Arizona
The Office of the Auditor General has conducted a performance audit of the
Department of Environmental Quality, Air Quality Division pursuant to a November 20,
2002, resolution of the Joint Legislative Audit Committee. This audit was conducted
as part of the Sunset review process prescribed in Arizona Revised Statutes (A.R.S.)
§41-2951 et seq and is the third in a series of four reports, which also included audits
of the Water Quality and Waste Programs Divisions. The final report will be an
analysis of the 12 statutory Sunset factors.
The Division’s mission is to protect Arizona’s environment and citizens by controlling
sources of air pollution. The Division conducts numerous activities to carry out these
responsibilities. For example, it issues permits to facilities and conducts periodic
inspections of the facilities’ equipment and records to ensure proper operation.
Division staff also monitor air quality throughout the State through a network of
specialized equipment. The Division also administers the vehicle emissions
inspection program in Maricopa and Pima Counties.1 This audit focused primarily on
two aspects of the Division’s work in carrying out its mission: the Division’s
effectiveness in improving the State’s overall air quality, and the extent to which
regulated facilities comply with rules and laws regarding air pollution.
Division efforts positively impacting Arizona’s air quality
(see pages 7 through 13)
One of the Division’s primary functions is to monitor air quality around the State to
determine compliance with national air quality standards set by the federal
Environmental Protection Agency (EPA). If an area within the State exceeds these
standards, the EPA designates that area as “nonattainment.” These nonattainment
areas pose potential health risks to citizens because of the elevated air pollution, and
the general public and private industry can also be affected economically in these
areas.
Several significant challenges make improving Arizona’s air quality more difficult
than it would be in some other states. Arizona’s large, rapidly growing population is
1 Small portions of northern Pinal County and southern Yavapai County are also included in the Maricopa County emissions
testing requirements.
Office of the Auditor General
SUMMARY
page i
accompanied by increases in vehicle traffic and construction, which contribute to air
pollution. Arizona’s warm temperatures, limited rainfall, and arid topography also
contribute to elevated air pollution levels. Further, the State’s leading role in the
nation’s copper industry has resulted in several nonattainment areas for sulfur
dioxide, one of the pollutants the EPA regulates.
Despite these challenges, the Division has made strides over the past few years in
reducing the State’s air pollution. The EPA has redesignated 5 of Arizona’s 20
nonattainment areas as being in attainment with national air quality standards, and
10 more are in the process of being redesignated or are eligible for this process.
Several division initiatives have contributed to these redesignations, including a
vehicle emissions inspection program designed to reduce levels of carbon monoxide
and ozone, a program for cleaner burning gasoline in heavily populated areas, and
pollution forecasts designed to help reduce travel on days with high air pollution
potential. In its 2003–2008 Strategic Plan, the EPA regional office noted that Arizona
has made substantial progress toward cleaner air over the past several years.
Division generally addresses violations by major source
facilities within specified time frames (see pages 15
through 20)
Division records indicate that key facilities are generally complying with air pollution
standards, and when they do not, the Division generally takes timely enforcement
action that soon corrects the problem. Among the more than 700 sources of pollution
that the Division currently regulates, 52 facilities have the potential to emit 100 tons
or more a year of pollutants such as carbon monoxide. These facilities, called “major
source facilities,” include power plants, smelters, and cement plants. Compliance
work conducted by the Division found that in calendar years 2002 and 2003, two-thirds
of the facilities were sufficiently in compliance and no enforcement actions
were necessary. Further, when enforcement actions were issued, they were generally
for relatively minor issues, such as excessive dust.
When facilities are not complying, they generally are promptly informed and brought
into compliance. Department policy requires an internal review of the enforcement
action before it is approved by management. Of the 25 notices sent in calendar years
2002 and 2003, 18 were sent within the time frames specified in policy, and only 2
exceeded the time frames by more than 30 days. Developing specific time frames for
each step of the enforcement action review and approval process and creating
weekly reports on the status of pending cases would help the Division better adhere
to its policy for issuing enforcement actions. Once the notices were sent, most
State of Arizona
page ii
facilities came into compliance within specified time frames. For the 25 notices, 16
were resolved within the specific deadline (generally 30 days) and 2 more were
resolved within another 30 days. Division officials indicated that in the remaining
instances where facilities exceeded their time frames before coming into compliance,
they made sufficient effort so that more stringent regulatory efforts did not need to be
taken.
Office of the Auditor General
page iii
State of Arizona
page iv
Office of the Auditor General
TABLE OF CONTENTS
continued
page v
1
7
7
8
10
13
15
15
17
19
20
Introduction & Background
Finding 1: Division efforts positively impacting
Arizona’s air quality
Division monitors and regulates major air pollutants
Significant challenges exist to improving Arizona’s air quality
Division has taken steps to improve air quality
Recommendations
Finding 2: Division generally addresses violations by
major source facilities within specified time frames
Division regulates through inspections, report reviews, and
enforcement actions
Division can strengthen generally sound program of issuing
enforcement actions
Violations are not widespread and are generally resolved quickly
Recommendation
Agency Response
State of Arizona
TABLE OF CONTENTS
concluded
page vi
Tables:
1 Schedule of Revenues and Expenditures
Years Ended June 30, 2002, 2003, and 2004
(Unaudited)
2 Air Pollutants Regulated by the EPA’s
National Ambient Air Quality Standards
As of June 2004
3 Status of EPA-Designated Areas
As of June 2004
4 Air Quality Division
Timeliness of Issuing Informal Enforcement Actions
To Major Source Facilities
Calendar Years 2002 and 2003
5 Air Quality Division
Status of Enforcement Actions Issued To Major Source Facilities
Calendar Years 2002 and 2003
Figure:
1 EPA-Designated Areas
As of June 2004
4
8
11
18
20
12
The Office of the Auditor General has conducted a performance audit of the
Department of Environmental Quality, Air Quality Division pursuant to a November 20,
2002, resolution of the Joint Legislative Audit Committee. This audit was conducted
as part of the Sunset review process prescribed in A.R.S. §41-2951 et seq and is the
third in a series of four reports, which also included audits of the Water Quality and
Waste Programs Divisions. The final report will be an analysis of the 12 statutory
Sunset factors.
Division regulates and protects air quality in Arizona
The Air Quality Division is one of four divisions within the Department of
Environmental Quality, in addition to the Waste Programs, Water Quality, and
Administrative Services Divisions.1 The Division’s mission is to protect Arizona’s
environment and citizens by controlling sources of air pollution. It carries out this
mission under the federal Clean Air Act, which outlines the nation’s air pollution
regulations and affirms that state and local governments bear the fundamental
responsibility for air pollution control. The Division is responsible for regulating all
sources of air pollution in most of the State, although the three most populous
counties—Maricopa, Pima, and Pinal—have authority to regulate many facets of air
pollution control.2 In these counties, the Division retains responsibility for certain large
facilities, such as copper smelters, coal-fired electricity plants, and cement plants, as
well as mobile and portable sources.3
The Division conducts numerous activities to carry out these responsibilities. It issues
permits to facilities, and conducts periodic inspections of the facilities’ equipment
and records to ensure proper operation. Division staff also monitor air quality
throughout the State through a network of specialized equipment, using the data to
The Division’s mission is
to protect Arizona’s
environment and
citizens by controlling
sources of air pollution.
1 After the completion of audit work, effective August 2, 2004, the Department created a new Tank Programs Division.
2 A.R.S. §49-402 specifies which sources of air pollution fall under the Division’s original jurisdiction, such as smelters, coal-fired
electrical generating stations, and motor vehicles. The Division does not regulate sources of air pollution on tribal
lands; these are regulated by the federal Environmental Protection Agency.
3 A.R.S. §49-401.01 defines mobile sources as combustion engines, devices, machines, or equipment that operate during
transport and emit air pollution while in motion or at rest, and portable sources as any stationary source capable of being
transported and operated in more than one county.
Office of the Auditor General
INTRODUCTION
& BACKGROUND
page 1
develop regulations and plans to bring the State into attainment with national air
quality standards. The Division also administers the vehicle emissions inspection
program in Maricopa and Pima Counties.1
The federal Environmental Protection Agency (EPA) provides oversight of the Division
and all local air pollution control agencies, sets health-based air quality standards,
and ensures that federal standards and regulations are followed. For instance, the
EPA approves all the Division’s formal plans to control regulated air pollutants.
Organization and responsibilities
The Air Quality Division is organized into five sections, and is overseen by an
administrative unit including the division director, deputy director, and four additional
staff. As of May 2004, 28 of the Division’s 154 authorized FTE positions were vacant.
􀁺􇩁 Air Assessment Section (43 FTE positions, 9 vacancies)—This section collects,
analyzes, and reports air quality data. Specifically, it operates the network of
more than 180 air quality monitors at approximately 60 locations, analyzes and
performs quality assurance on the collected data, and reports it to the EPA. This
section also creates models of air pollution dispersion that project the
movement and quantity of specific air pollutants, which other sections in the
Division use in their planning work. Special public outreach activities include
daily air pollution forecasting and creating various maps, such as locations of air
quality monitors, air pollution areas, and areas sensitive to smoke from
prescribed burns, for use in public meetings and on the Department’s Web site.
􀁺􇩃 Compliance Section (27 FTE positions, 2 vacancies)—This section is
responsible for ensuring that facilities permitted by the Division and other air
pollution sources covered by division rules are following all applicable
regulations, and for taking enforcement actions against violating parties. Staff
perform these duties by inspecting regulated sites and reviewing the facilities’
technical reports. Inspectors also respond to the public’s complaints. If
inspectors identify violations, staff members are required to pursue enforcement
actions to bring the facilities back into compliance with regulations. Enforcement
actions range from issuing an informal Notice of Opportunity to Correct, which
allows the operators of a facility a specified number of days to correct a minor
deficiency, to filing a civil action, which involves the state Attorney General’s
Office and can include substantial financial penalties to the violating facility.
􀁺􇩐 Permits Section (23 FTE positions, 6 vacancies)—This section manages air
quality permit issuance and renewal to facilities under the Division’s jurisdiction.
All facilities with the potential to produce regulated air polluting emissions are
The Division operates
more than 180 air
quality monitors around
the State.
1 Small portions of northern Pinal County and southern Yavapai County are also included in the Maricopa County emissions
testing requirements.
State of Arizona
page 2
required to apply for and receive a permit before beginning operations, and as
of July 1, 2004, the Permit section was administering over 700 active permits.
Permits are divided into three categories—Class I permits for major source
facilities, such as cement plants and copper smelters, which have the potential
to emit large quantities of regulated pollutants; Class II permits for minor source
facilities and portable sources, such as some asphalt plants and manufacturers,
which have lower potential emission levels; and General permits for broad
categories of similar facilities, such as dry cleaners and crushed stone plants.
Depending on the permit application’s complexity and the quantity of the
facility’s potential emissions, rule requires section staff to review an application
and either issue or deny a permit within 1 to 16 months.
􀁺􇩐 Planning Section (16 FTE positions, 3 vacancies)—This section is primarily
responsible for developing the Department’s state implementation plans (SIPs)
and air quality rules, as well as overseeing several funds created by the
Legislature, such as the Air Quality Fee Fund. The SIPs detail how the State
plans to achieve compliance with national air quality standards, while the rules
govern activities in the State that generate air pollution. Staff in this section also
work with county and municipal agencies to create and implement the
measures required to achieve reductions in federally regulated air pollutants.
􀁺􇩖 Vehicle Emissions Section (39 FTE positions, 8 vacancies)—This section
administers the vehicle emissions inspection program in Maricopa and Pima
Counties. While an outside contractor performs the general public’s emissions
testing, section staff oversee the contractor and inspect all public and private
fleet inspection sites. They also research current and new emissions testing
methods, evaluate the current program’s effectiveness, and respond to the
public’s inquiries and complaints.
Budget
As detailed in Table 1 (see page 4), the Division received approximately $59 million
in fiscal year 2004. Approximately $5 million was in federal grants from the EPA, while
permits and other fees accounted for an additional $10 million.
Scope and methodology
This audit focused on the Planning and Compliance sections; specifically, on the
Division’s effectiveness in improving the State’s overall air quality and on the level of
The Division administers
over 700 active permits.
Office of the Auditor General
page 3
State of Arizona
page 4
Table 1: Schedule of Revenues and Expenditures1
Years Ended June 30, 2002, 2003, and 2004
(Unaudited)
2002 2003 2004
Revenues:
State General Fund appropriations $ 379,665 $ 128,124 $ 623
Sales and charges for services 2 15,088,592 37,383,229 44,194,579
Licenses, permits, and other fees 10,066,726 11,648,103 9,774,281
Federal grants 2,874,695 3,152,674 5,173,078
Investment earnings 229,683 219,893 274,254
Total revenues 28,639,361 52,532,023 59,416,815
Expenditures:
Personal services and related benefits 6,118,784 6,277,293 6,303,342
Professional and outside services 2 17,620,737 28,152,886 29,316,724
Travel 305,157 264,735 219,425
Aid to organizations 3,072,509 3,110,092 3,026,630
Other operating 554,093 691,352 543,189
Equipment 702,588 1,067,214 211,685
Allocated costs 3 2,657,046 2,916,884 3,065,434
Total expenditures 31,030,914 42,480,456 42,686,429
Excess (deficiency) of revenues over (under) expenditures (2,391,553) 10,051,567 16,730,386
Other financing sources (uses)
Transfers in 4 5,030,929 8,674,554
Transfers out 5 (1,704,645) (16,998,800) (16,359,100)
Total other financing sources (uses) 3,326,284 (8,324,246) (16,359,100)
Excess of revenues and transfers in over expenditures and transfers
out $ 934,731 $ 1,727,321 $ 371,286
1 This schedule presents revenues and expenditures of the Division’s operations. The Department also operates two
Regional Offices that incur some air-related expenditures that are not included in this table because the Department
does not allocate the Offices’ expenditures among the divisions. The Offices conduct water, waste, and air activities and
have expenditures of approximately $4.1 million annually.
2 Sales and charges for services include vehicle inspection fees and professional and outside services expenditures of the
Division’s emission inspection program, which is primarily operated by an independent contractor. Both amounts
increased significantly in 2003 and 2004 as a result of a change in the way that inspection fees are remitted by the
contractor. Beginning in January 2002, a new contract required the contractor to remit all vehicle inspection fees
collected to the Department and the Department to pay the contractor directly for services performed. Prior to this
change, the contractor retained all inspection fees and remitted only the Department’s portion of fees. In addition, sales
and charges for services include fees received in lieu of inspections for vehicles less than 5 years old that are deposited
in the Clean Air Fund. These fees were previously collected by the Department of Commerce; however, in 2003 the
legislature transferred control of the Fund to the Department, resulting in an increase in sales and charges for the
Division’s services revenues.
3 Consists of that portion of department-wide overhead expenditures allocated to the Division for administrative personnel,
rent, general accounting, telecommunications systems, and risk management costs.
4 Consists of transfers from the Clean Air Fund of approximately $1.5 million in 2002 authorized by Laws 2001, Chapter
371 associated with the Brown Cloud Study, and approximately $3.5 million from the Clean Air Fund for a subsidy to
reduce emission test fees as authorized by Laws 2001, Chapter 236. In addition, the 2003 amount consists of
approximately $8.7 million transferred from the Department of Commerce when the Clean Air Fund was transferred to
the Department.
5 Includes transfers of approximately $1.7, $2.1, and $2.2 million in 2002, 2003, and 2004, respectively, to the Department
of Administration, Department of Transportation, and Department of Weights and Measures for clean air-related
programs, such as oxygenated fuels and bus subsidies. In addition, the 2003 amount includes $14.9 million transferred
to the State General Fund, as required by Laws 2002, Chapter 1, and Laws 2003, Chapter 1; and the 2004 amount
includes $11.7 million transferred to the State General Fund, as required by Laws 2003, Chapter 263, and $2.5 million
transferred to the Water Quality Assurance Revolving Fund, as required by Laws 2003, Chapter 262.
Source: Auditor General staff analysis of the Arizona Financial Information System (AFIS) Accounting Event Transaction
File for the years ended June 30, 2002, 2003, and 2004.
regulated facilities’ compliance with state air pollution rules and laws. This report
presents two findings and associated recommendations:
􀁺􇨠 The EPA has recognized the Division’s efforts to improve the State’s air quality
as successful (see Finding 1, pages 7 through 13); and
􀁺􇨠 The Division generally takes enforcement actions in a timely manner against
major source facilities (see Finding 2, pages 15 through 20).
Several methods were used to study the issues addressed in this audit. Methods
used in all areas included interviews with division management and staff and other
stakeholders, including legislative staff and representatives from the EPA, the Arizona
Attorney General’s Office, private industry associations, environmental protection
organizations, and county pollution control agencies. Auditors also reviewed Arizona
Revised Statutes, the Arizona Administrative Code, the Code of Federal Regulations,
and the Department’s Compliance and Enforcement Handbook.
The following specific methods were used in reviewing each area:
􀁺􇩔 To determine if the State is in compliance with federal air quality standards,
auditors reviewed public notices published in the Federal Register and various
documents prepared by the EPA and the Division, including air quality
monitoring data from 1995–2003. To research and document the challenges to
improving air quality in Arizona, auditors reviewed data from several federal
agencies.1
􀁺􇨠 To evaluate the Division’s compliance and enforcement efforts, auditors
obtained and analyzed data from the Division’s automated compliance and
enforcement data systems on the 52 major source facilities that the Division had
permitted as of July 2004. The data was used to identify those major source
facilities that had enforcement cases issued to them in calendar years 2002 or
2003. Auditors then conducted a detailed file review of the compliance and
enforcement actions that the Division took against these facilities.
This audit was conducted in accordance with government auditing standards.
The Auditor General and her staff express appreciation to the director, division
director, and staff of the Department of Environment Quality for their cooperation and
assistance throughout the audit.
1 Reports reviewed include the National Oceanic and Atmospheric Administration’s Comparative Climatic Data publication;
National Oceanic and Atmospheric Administration. Air Resources Laboratory. Environmental Research Laboratories.
Office of Oceanic and Atmospheric Research. Air Stagnation Climatology for the United States. Silver Spring, MD: April
1999; U.S. Census Bureau. Census 2000 Redistricting Data; U.S. Census Bureau. Final 2003 Housing Units Authorized
by Building Permits; U.S. Department of Transportation. Bureau of Transportation Statistics. National Transportation
Statistics 2002. U.S. Geological Survey. 2002 Copper Yearbook.
Office of the Auditor General
page 5
State of Arizona
page 6
Division efforts positively impacting Arizona’s air
quality
Despite difficult challenges, the Division has achieved successes in improving the
State’s air quality. In working to fulfill its responsibility to monitor Arizona’s air quality
and ensure that national air quality standards are met, the Division faces several
significant challenges, including the State’s rapid population growth and
accompanying increases in pollution from vehicle traffic. However, the Division has
implemented initiatives that have brought air quality in several problem areas of the
State into compliance with national standards.
Division monitors and regulates major air pollutants
One of the Division’s primary functions is to monitor air quality around the State to
determine compliance with state and national air quality standards. According to
division staff, it does so by collecting and analyzing air samples at approximately 60
sites located throughout the State.1 Monitoring is not only required by federal law, but
is important to protecting the health of Arizona’s citizens. The EPA has set the
National Ambient Air Quality Standards (Standards) based on analysis of the health
risk to humans from certain air pollutants (see Table 2 on page 8 for a list of these
pollutants). These Standards set a limit on the quantity of each pollutant allowed in
the air. If an area within Arizona exceeds the Standards for any of these pollutants,
the EPA designates it as a nonattainment area. For example, the EPA has designated
the Hayden area as nonattainment for exceeding the sulfur dioxide standard
because of emissions from the copper smelter located in the area.
If an area is designated as nonattainment, the Division must take corrective action.
The Division submits a SIP to the EPA, demonstrating how and when the area will
achieve attainment with the Standards.2 Once an area has monitoring data that
The EPA sets air quality
standards that Arizona
must follow.
1 The Division’s efforts are supplemented by air quality monitors operated by Maricopa, Pima, and Pinal Counties, as well
as by private industrial facilities.
2 While the delegation agreements with Maricopa, Pima, and Pinal Counties detail the counties’ authority over many air
pollution control components, the development of SIPs is shared between these counties, the Maricopa and Pima
Associations of Governments, and the Division. The Division retains responsibility for submitting the SIPs to the EPA for
all nonattainment areas in the State.
Office of the Auditor General
page 7
FINDING 1
shows compliance with the Standards for either 2 or 3 consecutive years, depending
on the pollutant, the Division must submit another SIP to the EPA that demonstrates
how the area will remain in attainment.
There are several real and significant costs associated with being designated a
nonattainment area. First, these areas pose a potential health risk to that area’s
citizens. Second, there are also economic costs for an area to be designated
nonattainment. For instance, all newly permitted industrial facilities located in the
affected area are required to install and operate more effective and costly pollution
control equipment than would otherwise be required, and in some cases would need
to demonstrate that every addition they contribute to air pollution is offset by
reductions to air pollution in other areas.
There can also be direct costs to the public associated with the measures required
to achieve attainment with the Standards. For example, motorists in the Phoenix
nonattainment area are required to pay for a vehicle emissions test every 2 years and
are likely to pay a higher price for gasoline because of special gas blends and vapor
recovery equipment designed to reduce air pollution.
Significant challenges exist to improving Arizona’s air
quality
The Division faces several challenges in its attempts to improve Arizona’s air quality
and comply with the EPA’s Standards, including:
State of Arizona
page 8
Table 2: Air Pollutants Regulated by the EPA’s
National Ambient Air Quality Standards
As of June 2004
Pollutant1
Major
Source
Health Risk/
Other Impact
Carbon Monoxide (CO) Vehicle emissions Cardiovascular and other system
damage
Nitrogen Dioxide (NO2) Vehicle emissions Respiratory damage, decreased visibility
Particulate Matter (PM) Dust, vehicle emissions Respiratory damage
Ozone (Ox) Vehicle emissions,
off-road equipment
Respiratory damage, plant damage
Sulfur Oxides [Sulfur
Dioxide (SO2)]
Copper smelters Respiratory difficulties, plant damage,
decreased visibility
1 The EPA also includes lead in these standards, but there are no major sources in Arizona.
Source: Auditor General staff analysis of Godish, Thad. Air Quality. Boca Raton: Lewis Publishers, 2004;
Comrie, Andrew and Jeremy Diem. “Climatology and forecast modeling of ambient carbon monoxide
in Phoenix, Arizona.” Atmospheric Environment, Dec. 1999. 5023-5036; the Arizona Department of
Environmental Quality’s FY’03 Air Quality Report; EPA Web site: http://epa.gov/air/criteria.html.
􀁺􇨠 Fast-growing population poses varied challenges—Increased challenges to
controlling air pollution accompany a rapidly growing population in an urban
environment. According to figures published by the U.S. Census Bureau from
the 2000 Census, Arizona and Nevada are the fastest-growing states in the
western United States.1 Similarly, the metropolitan Phoenix area has been
growing faster than any other large city in the West besides Las Vegas, Nevada.
Rapid population growth impacts air quality through increasing vehicle traffic
and construction. Data published on western states by the U.S. Department of
Transportation in its National Transportation Statistics 2002 Report indicate that in
2002, Arizona was second only to California in volume of roadway traffic in urban
areas. Research from multiple sources indicates that there is a strong correlation
between vehicle traffic and air pollution, and that vehicle emissions are the
largest contributor to several pollutants in Arizona’s air. Additionally, increased
construction is associated with the generation of particulate matter pollution
from construction site activities, such as clearing land and driving on unpaved
roads. Data from the U.S. Census Bureau’s Final 2003 Housing Units Authorized
by Building Permits tables shows that the Phoenix area issued more residential
building permits than any other metropolitan area in the West, exceeding 10,000
more permits than the next highest area.
􀁺􇩓 State’s topography and climate create additional challenges—Another
challenge to improving the quality of Arizona’s air is the State’s climatological
and topographical characteristics. According to the National Oceanic and
Atmospheric Administration’s Comparative Climatic Data and Air Stagnation
Climatology for the United States reports, Arizona is located in the region of the
country with the highest anticyclonic activity (stagnant air), highest
temperatures2, most sunshine, and least rainfall, all of which are contributing
factors to high air pollution. Additionally, the State’s arid landscape generates
high levels of coarse particulate matter when disturbed through construction
activities and vehicle traffic on unpaved roads. Further, in the Phoenix area
particularly, the layout of the metropolitan area surrounded by mountains leads
to the creation of inversion weather patterns that keep ground-level pollution
from dissipating into the upper atmosphere, resulting in higher levels of carbon
monoxide and other pollutants.
􀁺􇨠 Copper production has resulted in high sulfur dioxide levels—Arizona is the
largest copper-producing state in the country. According to the U.S. Geological
Survey’s 2002 Copper Yearbook, Arizona produces approximately two-thirds of
the nation’s copper. There have been more than 20 copper facilities around the
State, and copper smelters emit significant amounts of sulfur dioxide during the
refining process. In fact, copper facilities have been the largest emitter of sulfur
dioxide in each nonattainment area.
Vehicle emissions are
the largest contributor to
several air pollutants in
Arizona.
1 In this report, “West” and “western states” include Arizona, California, Colorado, New Mexico, Nevada, and Utah.
2 While a few cities in Florida, Hawaii, and Texas have slightly higher average annual temperatures, Arizona’s average
temperatures in the summer are the highest in the nation. This is of particular importance for ozone production, as the
summer months are the period of highest ozone levels.
Office of the Auditor General
page 9
Division has taken steps to improve air quality
The EPA has formally recognized Arizona’s air quality improvements resulting from
division initiatives. Specific initiatives have included adopting a vehicle emissions
inspection program in the Phoenix and Tucson metropolitan areas and expanding the
air quality monitoring networks located around the State. Partly owing to these and
other initiatives, the EPA has redesignated several areas within the State as having
attained compliance with national air quality standards, and the Division has
completed the necessary work for additional areas to be redesignated.
Division has undertaken several air quality initiatives—The Division has
implemented several measures to reduce or manage the State’s air pollution. In its
2003–2008 Strategic Plan, the EPA’s regional office noted that Arizona has made
substantial progress toward cleaner air over the past several years. Also, in auditors’
interviews, EPA regional officials highlighted the following initiatives as having
positively impacted Arizona’s air quality:
􀁺􇩃 Cleaner Burning Gasoline Program—This program, initiated in 1997, details the
various seasonal requirements for gasoline sold in the Maricopa County area.
Cleaner burning gasoline is designed to reduce the quantities of several
pollutants in vehicle emissions. Data from several sources indicates that motor
vehicle emissions are the largest source of air pollution in Maricopa County, and
an EPA regional official points to the cleaner burning gasoline program as the
single largest measure providing emissions reductions for carbon monoxide
and ozone. The EPA approved the most recent modifications in April 2004
authorizing the State to discontinue the use of the environmentally hazardous
fuel additive MTBE (methyl tertiary butyl ether), while still requiring other types of
cleaner burning gasoline.
􀁺􇩖 Vehicle Emissions Inspection and Maintenance Program—This program is
designed to reduce on-road vehicle emissions, which contribute to increased
levels of such pollutants as carbon monoxide and ozone, and is operated by the
Division and its contractor in the metropolitan Phoenix and Tucson areas. EPA
officials rate the program highly, noting it is well-run and expressing confidence
in the quality assurance of its data. This program was also highlighted in the
National Governors’ Association Center for Best Practices 2000 State
Innovations to Reduce Vehicle Emissions report.
􀁺􇩅 Expansion of the visibility and air toxics monitoring networks—The Division’s
commitment to go beyond federal requirements for its visibility and air toxics
monitoring networks allow it to more readily identify and address sources of the
relevant pollutants. Monitoring provides details on areas with high air pollution
that the Division uses when creating pollution control measures. An EPA regional
official notes that the Division is the most proactive agency in the Southwest for
The EPA states that
Arizona has made
substantial progress
toward cleaner air.
State of Arizona
page 10
Visibility monitoring—
Visibility impairment is
caused by both natural and
human activities, and can be
expressed in terms of the
amount of interference with
our range of vision.
Monitoring networks are used
to precisely measure the
degree of impairment.
visibility monitoring and protection. For example, the official pointed out that the
Division established a monitoring network in the State’s federal wilderness
areas, such as the Grand Canyon, that doubled the number of monitoring sites
that the federal government required. The Division has also recently created an
extensive visibility monitoring network in the Phoenix area that is available for
viewing on the Division’s Web site. Further, while monitoring for air toxics is not
federally mandated, the Department is participating in the Phoenix-area Joint Air
Toxics Assessment Project with three Indian tribes and other organizations.
􀁺􇨠 Increased air pollution forecasting—The Division’s daily forecasting now
includes ozone, particulate matter, and carbon monoxide projections for the
Maricopa County area, having expanded from only ozone in October 2003. The
Division makes its forecasts available each Sunday through Friday to the public,
the EPA, and local employers for use in part as a guide to implementing travel
reduction strategies to lessen the creation of air
pollution on high pollution days.
Several nonattainment areas redesignated to
attainment areas—The EPA has redesignated
several of the State’s nonattainment areas to attainment
status, and the Division is making progress in several
more. Once the air quality monitoring data for an area
demonstrates compliance with the Standards, the
Division submits a SIP to the EPA formally requesting
redesignation to attainment status.1 These SIPs include
the pollution control measures used to maintain
compliance with the Standards, and the Division typically
works with county and municipal entities to create these
measures. Since the Standards were implemented
following the passage of the federal Clean Air Act
Amendments in 1970, Arizona has been designated with
20 separate nonattainment areas, ranging from sulfur
dioxide in Ajo to particulate matter in Yuma (see Table 3,
and Figure 1 on page 12).
Action has been taken or is pending to move 15 of the 20
nonattainment areas to attainment status. The EPA
formally redesignated 5 of the 20 nonattainment areas to
attainment status between 2000 and 2004. For example,
the most recent EPA action was a final approval to
redesignate the Morenci nonattainment area for sulfur
dioxide to attainment status on April 26, 2004. The EPA is
also in the process of redesignating 3 nonattainment
1 As indicated in A.R.S. §49-406, the Maricopa and Pima metropolitan planning organizations will in some cases prepare
these SIPs in conjunction with the Division. In all cases, the Division is responsible for submitting the SIP to the EPA.
Office of the Auditor General
page 11
Table 3: Status of EPA-Designated Areas
As of June 2004
Status Area Pollutant
Attainment Ajo Sulfur Dioxide
Bullhead City Particulate Matter
Morenci Sulfur Dioxide
Payson Particulate Matter
Tucson Carbon Monoxide
Transitional1 Ajo Particulate Matter
Douglas Particulate Matter
Douglas Sulfur Dioxide
Hayden Sulfur Dioxide
Hayden/Miami Particulate Matter
Miami Sulfur Dioxide
Phoenix Ozone/1-hour standard
Phoenix Carbon Monoxide
Rillito Particulate Matter
San Manuel Sulfur Dioxide
Nonattainment Nogales Particulate Matter
Paul Spur Particulate Matter
Phoenix Ozone/8-hour standard
Phoenix Particulate Matter
Yuma Particulate Matter
1 The air quality in these areas meets the standards for attainment status,
but the EPA and/or the Division needs to complete the redesignation
process.
Source: Auditor General staff analysis of U.S. Federal Register Notices, SIPs
submitted by the Arizona Department of Environmental Quality, and
the Department’s Air Quality Reports for fiscal years 2001—2003.
State of Arizona
page 12
Figure 1: EPA-Designated Areas
As of June 2004
1 "Maintenance Area" is the official designation from the EPA for areas demonstrating attainment with its air-quality
standards.
Prepared by the Arizona Department of Environmental Quality, Air Quality Division.
1
areas to attainment. Further, 7 additional nonattainment
areas have demonstrated air quality meeting the
Standards, and the EPA will be able to act on these
redesignation requests once the Division submits all
required documentation.
The air quality in the remaining 5 nonattainment areas
does not yet meet the Standards, but the Division
continues to take action in these areas:
􀁺􇩔 The Paul Spur and Yuma particulate matter
nonattainment areas have had exceedances only
because of high-wind occurrences that caused high
levels of pollution. Prior to requesting redesignation
to attainment in these cases, the Division needs to submit to the EPA a Natural
Events Action Plan (NEAP), which is similar to a SIP. In Yuma, for example, the
Division has been working with several local entities to create a NEAP for that
area’s particulate matter exceedance.
􀁺􇩔 The particulate matter nonattainment areas in Nogales and Phoenix have not yet
demonstrated compliance with the Standards, and the Division has submitted
SIPs detailing how compliance will be achieved.
􀁺􇩔 The final nonattainment area is for the new 8-hour ozone standard in the greater
Phoenix area, including portions of Maricopa and Pinal Counties. The Division
has until June 2009 to demonstrate compliance with these new standards.
According to the Division, additional ozone modeling is needed before
determining which, if any, additional pollution control measures will address this
problem.
Recommendations
This finding provides information only. Therefore, no recommendations are
presented.
Office of the Auditor General
page 13
New EPA Standards—The EPA modified its air
quality standards in 1997 to include a more
stringent restriction on ozone pollution, to be
averaged over 8 hours instead of measured hourly
only, and a second particulate matter category for
this pollutant’s smaller, more harmful type. The new
ozone standard took effect in June 2004, while the
new particulate matter standard will not be fully
implemented until November 2004. The EPA has
proposed to designate all of Arizona as attainment to
the new particulate matter standard.
State of Arizona
page 14
Division generally addresses violations by major
source facilities within specified time frames
The Division generally takes enforcement action against facilities with the greatest
potential pollution emissions levels in a timely manner. The Division currently
regulates 52 “major source” facilities, such as cement plants and electric generating
plants. A review of division records found that the majority of these facilities operate
in compliance with air quality laws, and in those instances when the Division identifies
violations, it generally takes enforcement action within the time frames prescribed in
policy. A few small changes, including specific time frames for each step in the
enforcement action review and approval process, would help the Division eliminate
the relatively few delays that occur.
Division regulates through inspections, report reviews,
and enforcement actions
Because poor air quality affects both the public’s and the environment’s well-being,
the Division regulates sources of air pollution.1 Potential impacts of poor air quality
include health risks such as cancer, birth defects, brain and nerve damage, and long-term
injury to the lungs and breathing passages. Additional impacts include
environmental damage, such as a thinning protective ozone layer. Further, regional
haze reduces visibility and may discourage recreational and other uses of state
resources, such as state parks.
The Division regulates facilities by issuing permits, conducting inspections, reviewing
the facilities’ technical reports, and taking enforcement action against facilities when
a violation is identified.2 The Division classifies violations as either minor or major.
1 Although the Department bears primary responsibility for the State’s air quality, its regulatory responsibilities are shared
with the federal government and Maricopa, Pima, and Pinal Counties’ air pollution control agencies.
2 Although the agreement between the Department and EPA stipulates major source facilities be inspected biennially, the
Division has chosen to inspect the facilities annually.
Office of the Auditor General
page 15
FINDING 2
Potential health risks of
poor air include cancer
and birth defects.
􀁺􇩍 Minor violations are those that pose a minimal risk to human health and the
environment, such as failure to keep a copy of a complete permit at the facility.
􀁺􇩍 Major violations are those that pose risk to human health and the environment.
An example of a major violation is a facility’s failure to install, calibrate, operate,
or maintain emissions monitoring equipment necessary for monitoring air
contaminants.
The Division resolves most violations using informal enforcement actions. For
example, for a minor violation, the Division may send the facility a Notice of
Opportunity to Correct (NOC), which explains the violation(s) and the action the
facility needs to take to verify its return to compliance. However, if the violation is
particularly egregious, the Division may take formal enforcement action, such as
issuing a consent order, or referring the action to the Attorney General’s Office for civil
or criminal action.
The enforcement process also requires staff to follow up to ensure the facility corrects
the violation(s) and returns to compliance. If a facility has not corrected the
violation(s) within a specified time frame, department policy recommends that it
escalate the enforcement action. For example, if the Division issued a Notice of
Violation (NOV) for the original violation(s), it could escalate the action to a consent
order, and then to a referral for civil action. Department policy allows for case-specific
deviations from these guidelines with approval from the division director.
State of Arizona
page 16
Division-Regulated Sources
Source—Any building, structure, facility, or installation that may cause or contribute to air
pollution or the use of which may eliminate, reduce, or control air pollution emission.
􀁺􇩍 Major source—Any stationary categorical source in an attainment or unclassifiable area with the
potential to emit 100 tons per year or more of any conventional air pollutant, such as carbon
monoxide, or 250 tons or more per year of any pollutant regulated under the Clean Air Act if the
source is not classified as a categorical source.1 Sources in nonattainment areas may be subject
to a lower threshold for conventional pollutants. The severity of the nonattainment area will
dictate what emissions level constitutes a major source. As of July 2004, the Division regulated
52 major sources, including cement plants, smelters, and electric generating plants.
􀁺􇩍 Minor source—A source of air pollution that is not a major source. As of July 2004, the Division
regulated 682 minor sources, including dry cleaners, mortuaries, cotton gins, and waste water
treatment plants.
1 A categorical source is one of 26 classes of sources including lime plants and primary copper smelters.
Division can strengthen generally sound program of
issuing enforcement actions
While the Division generally issues enforcement actions to major source facilities
within its specified time frames, it could still improve. Auditors reviewed the records
of all 52 major source facilities to determine how quickly the Division issued a notice
of enforcement action when it identified violations. When staff find violations, an NOC
or NOV is internally reviewed and approved by management before being sent to the
facility. The Department’s policy requires the Division to send the notice to the facility
within 45 days if the violation is identified through an inspection, or 60 days if
identified through a technical report review.
As illustrated in Table 4 (see page 18), the Division issued 25 informal enforcement
actions to these facilities in calendar years 2002 and 2003.1 In all, 18 of the 25
1 The Division escalated 4 of the 25 informal enforcement actions issued in calendar years 2002 and 2003 for civil action
by the Attorney General’s Office. Although the violations in two of the actions were resolved prior to the referral, the
Division still escalated them for the purpose of assessing penalties, which can only be done through civil action.
Office of the Auditor General
page 17
Informal Enforcement Actions
􀁺􇩎 Notice of Opportunity to Correct (NOC)—Puts the facility on notice that the Division believes a
nonsignificant violation of an environmental law has occurred and should be corrected.
􀁺􇩎 Notice of Violation (NOV)—Puts the facility on notice that the Division believes a significant
violation of environmental law has occurred and should be corrected.
Formal Enforcement Actions
􀁺􇩁 Administrative Orders—From the Division
Compliance Order—Unilateral order issued without input from the facility. It is appealable.
Consent Order—Bilateral order issued with the complete written agreement of the facility. It is
not appealable.
Permit Suspension/Revocation—Unilateral or bilateral order suspending for a specified period of
time or revoking the facility’s permit. If issued unilaterally, it can be appealed.
􀁺􇩃 Civil Referral—From the Division to the Attorney General’s Office
Permanent Injunction/Civil Penalty
Temporary Restraining Order/Preliminary Injunction
Consent Judgment/Consent Decree—A negotiated settlement of a civil complaint.
􀁺􇩃 Criminal Referral—Authority for prosecution of environmental crimes lies exclusively with the
Attorney General’s Office, but the Division assists by gathering evidence.
The Division generally
issues enforcement
actions to major source
facilities in a timely
manner.
State of Arizona
page 18
informal actions (72 percent) were issued within policy time frames. Five (20 percent)
exceeded their time frame by 1 to 30 days, while 2 actions (8 percent) were issued
more than 30 days after the date specified by policy.
Although the Division has generally issued enforcement actions in a timely manner,
as of August 2004, the Division noted that it has not completed the review of two
NOVs originally recommended by staff in September and November of 2003.
Division staff indicated the delays in issuing these two enforcement actions resulting
from technical report reviews were due, in part, to the notices sitting on one
reviewer’s desk for several months and the need to revise the wording once the
reviews had been completed. While the Department has guidelines specifying who
must review and approve an enforcement action before it is issued, it does not
specify individual time frames for completing these tasks. Therefore, the Division
should consider developing specific time frames for each step in the review and
approval process. Additionally, the Division should consider creating a report of all
pending enforcement cases to alert both the manager and staff of their status, and
division management should ensure that these reports are reviewed weekly. Division
management indicated that such a report would be helpful and they plan to develop
it.
Table 4: Air Quality Division
Timelines of Issuing Informal Enforcement Actions To Major Source Facilities
Calendar Years 2002 and 2003
Number Issued According to Policy
Year
Type
Total
Issued
Within
Time Frame
Exceeded by
1 to 30 Days
Exceeded by
More Than 30 Days
2002 NOC 1 1 - -
NOV 7 4 2 1
Total 8 5 2 1
2003 NOC 6 4 1 1
NOV 11 9 2 -
Total 17 13 3 1
NOC = Notice of Opportunity to Correct
NOV = Notice of Violation
Source: Auditor General staff analysis of the Division’s Inspections, Compliance, and Enforcement (ICE) database,
Arizona Aerometric Information System (AZAIRS) database, and facility files.
Violations are not widespread and are generally resolved
quickly
Most major source facilities comply with air quality laws. Auditors found that in
calendar years 2002 and 2003, the Division issued enforcement actions to only one-third
of the 52 major source facilities. Further, of the 17 facilities that had enforcement
actions issued to them, 12 were issued only one action, and many of these were for
relatively minor violations, such as excessive dust.
When the Division identifies violations, major source facilities generally resolve them
in a timely fashion. This timeliness takes two forms:
􀁺􇩆 First, the Division generally gives facilities a relatively short period of time to
comply. According to department policy, a facility receiving an NOC should
return to compliance within 180 days, and a facility receiving an NOV should
return to compliance within 120 days.1 However, the Division can and usually
does direct facilities to correct violations in a shorter time frame. Auditors
reviewed all 25 enforcement actions issued to major source facilities in calendar
years 2002 and 2003 and found that the Division directed the facilities to come
into compliance in 7 to 120 days, with the most frequent time frame being 30
days.
􀁺􇩓 Second, most facilities comply with the Division’s time frames. As shown in Table
5 (see page 20), the majority of violations identified in calendar years 2002 and
2003 were corrected within the Division’s deadlines. Specifically, facilities
resolved violations in 16 of the 25 enforcement actions (64 percent) within the
specified deadlines, with another 2 (8 percent) exceeding their time frame by 30
or fewer days. Four actions are still open and have exceeded their designated
time frames. However, the Division is actively working with the facilities to resolve
two of the actions, and has requested assistance from the Attorney General’s
Office to resolve the remaining two actions.
The Division determined that it was not necessary to escalate enforcement action for
the five actions where the facilities exceeded their time frames but eventually came
into compliance because the facilities actively worked to resolve the violations. For
example, in the case of the facility that exceeded its designated time frame by 181
days, the delay was due to the fact that the facility had to submit an approved
planning document that could only be done after completing a particular
performance test. Once the facility completed the test, it completed and provided the
planning document to the Division.
Most major source
facilities correct
violations within
deadlines.
1 According to department policy, once a facility has missed the “return to compliance” time frames set in the NOV, the
Division will contact the facility to discuss their options for demonstrating compliance. Policy calls for the staff to state that
one of three options must occur within the next 45 days or a compliance order will be issued: 1) send proof to the Division
that the facility has returned to compliance, 2) take appropriate steps to return to compliance within the next 45 days and
then notify the Division, or 3) enter into a consent order where an extension can be negotiated between both parties.
Office of the Auditor General
page 19
In 2002 and 2003, only
one-third of major
source facilities had
enforcement actions.
Recommendation
1. To help ensure facilities with violations are notified within the required time
frames, the Division should consider:
a. Setting in policy specific time frames for each step in the enforcement
action review and approval process.
b. Creating a report of all pending enforcement cases to alert both the
manager and staff of their status; division management should ensure that
these reports are reviewed weekly.
State of Arizona
page 20
Table 5: Air Quality Division
Status of Enforcement Actions Issued To Major Source Facilities
Calendar Years 2002 and 2003
Year
Type
Total
Issued
Complied Within
Designated
Time Frame
Complied, but
Exceeded
Designated
Time Frame1
Still Open
and Exceeding
Designated
Time Frame2
2002 NOC 1 1 - -
NOV 7 7 - -
Total 8 8
2003 NOC 6 4 1 1
NOV 11 4 4 3
Total 17 8 5 4
NOC = Notice of Opportunity to Correct
NOV = Notice of Violation
1 The number of calendar days by which the facilities exceeded their designated time frames were 2, 23, 56, 109, and 181.
2 Of the four actions still open, two were referred to the Attorney General’s Office for civil action. Resolution of the third action
is dependent on additional performance testing, which was delayed due to weather. The reporting violations in the fourth
action have been remedied, but the facility must still provide a plan for ensuring that similar violations do not occur in the
future.
Source: Auditor General staff analysis of the Division’s Inspections, Compliance, and Enforcement (ICE) database, Arizona
Aerometric Information Retrieval System (AZAIRS) database, and facility files.
.
Office of the Auditor General
AGENCY RESPONSE
ARIZONA DEPARTMENT
OF ENVIRONMENTAL QUALITY
1110 West Washington Street   Phoenix, Arizona 85007
Janet Napolitano (602) 771-2300   www.azdeq.gov
Governor
Stephen A. Owens
Director
Northern Regional Office
1515 East Cedar Avenue   Suite F   Flagstaff, AZ
86004
(928) 779-0313
Southern Regional Office
400 West Congress Street   Suite 433   Tucson, AZ
85701
(520) 628-6733
Printed on recycled paper
September 13, 2004
Ms. Debra K. Davenport, CPA
Auditor General
2810 North 44th Street, Suite 410
Phoenix, AZ 85018
Re: Performance Audit and Sunset Review—Air Quality Division
Dear Ms. Davenport:
The Arizona Department of Environmental Quality appreciates the opportunity to respond to the
Air Quality Division (the Division) performance audit report. The report is a useful assessment
of the Division’s efforts to improve air quality throughout Arizona and to ensure compliance by
major sources of air pollution. We thank the Office of the Auditor General for its effective
communication throughout the audit process.
As the audit report reflects, the Division’s mission is “to control present and future sources of air
pollution to protect the environment and ensure the health and general welfare of the citizens of
Arizona.” The Division achieves its mission through monitoring air quality throughout Arizona,
issuing permits to industrial sources of air pollution, inspecting those facilities and taking action
to bring facilities into compliance, among other initiatives and responsibilities. We have
continued to improve air quality in much of Arizona despite significant reductions to the
Department’s and the Division’s budget and personnel.
The Department recently has made significant achievements in air quality initiative s and
improvements. For example, in 2003, the Department received the annual Clean Air Award
from the American Lung Association of Arizona in recognition of the Department’s successes in
improving air quality in Arizona. Additionally, throughout 2003, the Department worked
constructively with stakeholders and the U.S. Environmental Protection Agency (EPA) to
designate the boundaries for the Phoenix area eight hour ground- level ozone nonattainment area
within the northeastern portion of Maricopa County and a very small portion of northern Pinal
County. The Department’s effective effort avoided imposition of EPA’s presumptive boundary,
which would have placed the entirety of both Maricopa County and Pinal County in the new
non-attainment area.
Ms. Debra Davenport
September 13, 2004
Page 2 of 4
The Department also is proud of our Children’s Environmental Health Project (Project), which
focuses on reducing environmental risks to children’s health in Arizona, including particularly
the effect of air quality on childhood asthma and other respiratory illnesses. The Department is
working with the Arizona Department of Health Services to assess the extent to which specific
environmental factors are related to asthma events. In the summer of 2003, nearly a year in
advance of the federal imposition of the standard, we began forecasting and widely reporting a
new eight hour ground- level ozone standard, which is more protective of children’s health.
Children are at risk from exposure to harmful ozone because they are active outside, playing and
exercising, and the Department’s ozone forecasts allow parents and caregivers to adjust outdoor
activities accordingly. The Department, in cooperation with Maricopa County, provides daily
forecasts of ozone, particulate matter, and carbon monoxide levels, and announces appropriate
health advisories on our web site.
Further, as part of the Project, in August of this year, the Department, in cooperation with several
school districts in Arizona, launched an innovative pilot program to reduce children’s exposure
to harmful diesel emissions from buses idling near schools. Key elements of the pilot program
include having drivers turn off buses upon arrival at a school and not restart the engine until the
bus is ready to depart. Diesel emissions can aggravate respiratory illnesses, such as asthma, and
have been linked to lung and heart disease. One of the components of diesel emissions, carbon
monoxide, also can reduce alertness and learning capacity in children.
In addition, the Department employs a Hazardous Air Response Team (HART) to provide air
quality monitoring and forecasting during emergency situations. HART uses a mobile air quality
monitoring van, as well as portable monitoring devices, to collect air quality information
necessary to develop public health advisories when smoke or other emissions threaten public
health. HART has monitored smoke from several major fires in Arizona, including the Rodeo-
Chediski fire in 2002, the Aspen fire in 2003, and the Willow and Nuttall fires in 2004. Also, in
November 2003, HART monitored potentially hazardous air emissions from a chlorine spill at a
chemical facility in Glendale.
As the audit report recognizes, Arizona is committed to improving visibility levels by reducing
haze in the state’s urban areas, national parks and wilderness areas and has taken a leadership
role on these issues in the Southwest. Indeed, in 2003 Governor Napolitano became Co-chair of
the Western Regional Air Partnership (WRAP), a collaborative effort of state and tribal
governments and various federal agencies to implement the recommendations of the Grand
Canyon Visibility Transport Commission and to develop the technical and policy tools needed
by western states and tribes to comply with the EPA's regional haze regulations. With Governor
Napolitano as the WRAP Co-chair, the Department is playing an even greater role in the effort to
improve visibility and air quality in Arizona and other western states.
Ms. Debra Davenport
September 13, 2004
Page 3 of 4
The Department also is implementing several special air quality studies in sister cities along the
U.S.-Mexico border. A study of Nogales, Arizona and Nogales, Sonora is completed and the
study of Douglas, Arizona and Agua Prieta, Sonora is in the final stages. In 2005 we will begin a
major study of air quality in the area of Yuma, Somerton and San Luis, Arizona and San Luis
Rio Colorado, Sonora. By assessing the current air quality problems, these studies will allow
communities to identify and implement appropriate remedial measures and thereby benefit
children and others living in these border communities.
FINDING 1: DIVISION EFFORTS POSITIVELY IMPACTING ARIZONA’S AIR
QUALITY
As the audit report indicates, in spite of Arizona’s rapid population growth and challenges
associated with our state’s climate and terrain, 15 of the 20 areas of the state once designated as
not meeting air quality standards now enjoy healthful air quality. In addition to the efforts
discussed in the audit report, the Department continues to work with local and regional agencies
in the metropolitan Phoenix area to reduce particulate pollution, as well as meeting the new,
more stringent eight-hour standard for ozone.
Moreover, in Yuma, we have submitted to EPA a Natural Events Action Plan to control
particulate pollution and are working closely with local governments and other stakeholders to
develop a new plan to show how the area will continue to meet the standard for particulate
matter.
FINDING 2: DIVISION GENERALLY ADDRESSES VIOLATIONS BY MAJOR
SOURCE FACILITIES WITHIN SPECIFIED TIME FRAMES
Assuring compliance with environmental laws is a priority for the Department. The Division has
made many improvements to its enforcement process in recent years. For example, the Division
has created for all major source facilities detailed inspection checklists, which identify every
applicable air quality standard or requirement for each facility. The Division also recently
employed new comprehensive complaint and enforcement tracking databases to ensure
complaint responses and enforcement actions progress adequately.
The Division addresses violations quickly and effectively. This includes the imposition of
appropriate penalties to deter future violations. In 2001, for example, ADEQ collected the
largest state-only air quality penalty in the United States for violations at the North Star Steel
facility in Mohave County, valued at $7.75 million. Most recently in fiscal years 2003 and 2004,
the Department assessed $501,180 in penalties for air quality violations, including Valley
Refining for operation of a refinery without a permit ($75,180), APS Cholla power plant for
burning unauthorized liquid wastes ($200,000) and Cyprus Sierrita for operation without a
proper permit ($140,000).
Ms. Debra Davenport
September 13, 2004
Page 4 of 4
RECOMMENDATION
1. To help ensure facilities with violations are notified within the required 45 days, the
Division should consider:
a. Setting in policy specific time frames for each step in the enforcement action
review and approval process.
b. Creating a report of all pending enforcement cases to alert both the manager and
inspector of its status: division management should ensure that these reports are
reviewed weekly.
The finding of the Auditor General is agreed to and the audit recommendation will be
implemented.
Thank you for the opportunity to respond to the performance audit and Sunset review for the Air
Quality Division.
Sincerely,
Stephen A. Owens
Director
02-07 Arizona Health Care Cost
Containment System—Medical
Services Contracting
02-08 Arizona Health Care Cost
Containment System—
Quality of Care
02-09 Arizona Health Care Cost
Containment System—
Sunset Factors
02-10 Department of Economic
Security—Division of Children,
Youth and Families, Child
Protective Services
02-11 Department of Health
Services—Health Start
Program
02-12 HB2003 Children’s Behavioral
Health Services Monies
02-13 Department of Health
Services—Office of Long Term
Care
03-L1 Competitive Electric Metering,
Meter Reading, and Billing
and Collections
03-01 Government Information
Technology Agency—
State-wide Technology
Contracting Issues
03-02 Registrar of Contractors
03-03 Water Infrastructure Finance
Authority
03-04 State Board of Funeral
Directors and Embalmers
03-05 Department of Economic
Security—Child Protective
Services—Foster Care
Placement Stability and
Foster Parent Communication
03-06 Arizona Board of Appraisal
03-07 Arizona Board for Charter
Schools
03-08 Arizona Department of
Commerce
03-09 Department of Economic
Security—Division of
Children, Youth and Families
Child Protective Services—
Caseloads and Training
04-L1 Letter Report—Arizona Board
of Medical Examiners
04-L2 Letter Report—Gila County
Transportation Excise Tax
04-01 Arizona Tourism and
Sports Authority
04-02 Department of Economic
Security—Welfare Programs
04-03 Behavioral Health Services’
HB2003 Funding for Adults
with Serious Mental Illness
04-04 Department of Emergency and
Military Affairs and State
Emergency Council
04-05 Department of Environmental
Quality—Water Quality Division
04-06 Department of Environmental
Quality—Waste Programs
Division
Performance Audit Division reports issued within the last 12 months
Future Performance Audit Division reports
Arizona Department of Transportation—Motor Vehicle Division—State Revenue Collection
Functions