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Michigan

Project Title/Location
 Michigan Environmental Results Program (MERP) for the Dry Cleaner Sector / Statewide

Agency
 State of Michigan, Department of Environmental Quality (MDEQ)

Project Contact
Teresa Kinder; State of Michigan, Department of Environmental Quality - ESSD; 525 West Allegan Street; Lansing, MI 48909-7973; Phone: (517) 373-9283; Fax: (517) 335-4729; Email: kindert@michigan.gov

Project Summary
The MDEQ is proposing to pilot the MERP for its statewide dry cleaner sector. The MERP will be utilized as an innovative alternative to the permit to install and the pending Title V permitting requirements for National Emission Standards for Hazardous Air Pollutants (NESHAP) area dry cleaner sources, and New Source Performance Standards (NSPS) petroleum solvent sources.

Other innovations to be realized by this proposal include:

The benefits realized as a result of the MERP will be eliminating traditional time-consuming and expensive permit application and review process for both the facility and MDEQ, produce a greater level of continuous compliance, level the playing field within the sector, increased compliance resulting in a reduction of environmental and public health exposures to toxic substances, minimization of traditional inspection time through the use of multi-media compliance and enforcement tools, and providing an enhanced level of compliance assistance to all facilities so that each facility will know their compliance status

The MDEQ Director and management for each of the Department's divisions involved in the project are fully supportive of the MERP concept. This project is not being executed in cooperation with or funded by any other federal program but will require the involvement and coordination with stakeholders.

Summary of Budget Information
[Budgetary Information Withheld by U.S. EPA]

Pre-proposal Narrative
The dry cleaner industry is subject to both federal and state environmental regulations pertaining to air, water, solid and hazardous waste generation. Perchloroethylene (Perc) dry cleaners are subject to the federal National Emission Standard for Hazardous Air Pollutants (NESHAP) requirements for area sources, and will be subject to the state's Title V permitting program. The MDEQ recognizes that this pending requirement will be onerous and confusing for the typical small business dry cleaner owner. Although the dry cleaner sector has been subject to the NESHAP since 1993, this sector traditionally does not comprehend and/or comply with their environmental obligations. On the other hand, petroleum solvent (PS) dry cleaners are subject to a federal New Source Performance Standard (NSPS), the permit to install program, as well as federally enforceable state operating permits (FESOP). The MDEQ regulatory divisions recognize that there is a need to work more closely with the dry cleaning industry because so many of these establishments may be operating without proper monitoring, record keeping, and waste characterization requirements. Through the MERP project, the MDEQ will replace the traditional permitting process and incorporate the air, water, and waste requirements for the dry cleaner sector by consolidating all the permitting and regulatory requirements into a multi-media, self-certification compliance assistance package under the MERP.

The MERP self-certification program is similar to an environmental management system certification program. Michigan's project builds upon and goes beyond the concepts of the Massachusetts, Florida, and Rhode Island ERP programs. During the tool design and development phase, the MDEQ will utilize information from other states that have similar projects underway. The MDEQ is committed to communicating with other states that have similar projects in place so that lessons can be learned, and problems avoided. Although Massachusetts currently has an ERP for the dry cleaner sector, their program is only limited to perc dry cleaners. The MERP will go beyond the Massachusetts' program to include PS dry cleaners subject to the NSPS promulgated in 1981, and include NESHAP area sources that are soon to be regulated by the state's Title V program beginning December 2004. The program will serve as a model to other states. They may follow Michigan's lead in offering small area sources an alternative to the Title V program, may utilize the federal requirement portion of the MERP, and adapt it for use in their respective state environmental programs.

The dry cleaner self-certification project will use MDEQ resources and leverage outside community partners including USEPA Region V, local trade associations, community organizations, businesses and economic development agencies. The MDEQ will take a multi-media approach to prepare fact sheets, self-assessment checklists, a workbook for guidance on how to complete the self-assessment checklists, and compliance assistance tools for the dry cleaning establishments on pollution prevention, solid and hazardous waste generation, air and water pollution (including release notification). Additional training will be provided through on-site assessments and workshops. Again, the tools will also be available as models for other states.

Project implementation begins with the initial compliance inspection assessment to determine the baseline compliance rate. After the baseline assessment has been completed, the distribution of a self-assessment checklist and workbook will be provided to each dry cleaner establishment. The owner will be encouraged to participate with the MERP project in lieu of pursuing a traditional permitting approach. The participating establishments will be required to complete and submit multi-media self-certified checklists to the MDEQ. Any deviations observed by the dry cleaner will be corrected through a return to compliance (RTC) plan. The RTC plans will be submitted along with the self-certification package to the MDEQ. The checklists and RTC plans will be reviewed by the MDEQ. From this review, a post inspection list will be developed. Both the baseline and post inspections will be multi-media inspections.

One of the goals of the MERP is to gain 100% compliance in an industry that is traditionally not aware of their obligations. The MERP program will go beyond other state's standard ERP implementation by including an additional four-prong strategy for compliance: community involvement, application of business incentives, an electronic self-certification and reporting mechanism, as well as the development of a multi-media regulatory inspection program.

Many of Michigan's dry cleaner establishments are located in communities which face multiple stresses that involve an intermingling of economic, environmental and social issues. By seeking out and improving an establishment's environmental performance, the MERP project may improve or establish a new level of oversight and dialogue between community residents and establishment owners/operators. In turn, the MDEQ hopes that the dry cleaner business becomes a good environmental steward to the local community and state by increasing the interaction between businesses, residents, and regulatory agencies.

In addition to community involvement, the MDEQ will also provide business incentives for dry cleaner establishments to encourage active participation in the program. Incentives will include enforcement discretion for facilities identifying and correcting violations through the MERP self-certification process. It has been the MDEQ's experience that some businesses are afraid to ask for compliance assistance because they fear the penalties that may be assessed when violations are discovered. Enforcement discretion for self-certification facilities will help to alleviate some of those fears. In addition to program incentives, the MDEQ will also implement a series of inspection incentives which will reward those establishments that successfully pass an inspection. Promotion of these good stewards includes some type of endorsement by the MERP program at the state and possibly federal level.

The MERP will also expand to include web-based reporting of the self-certification report through the use of the State of Michigan web portal. The MDEQ will educate establishment operators on how to use the MERP submittal program, as well as what resources exist (within their community) for free access to a computer and Internet services. Additionally, the electronic component of the self-certification training will also encourage more establishment owners to access the MDEQ's compliance assistance materials which are available online. Using a web-based self-certification reporting system would also make reviewing and tracking the reports easier for regulatory staff. The MDEQ intends to make as many of its compliance assistance tools available on the web for review by both industry sector participants, community partners and organizations, and other states interested in replicating MERP project.

Lastly, the MDEQ will establish a multi-media regulatory inspection program. The MDEQ will assign an expert from each media. The media expert will assist in the development of inspector checklists, provide hands-on training for the multi-media inspector, and act as point of contact and a technical resource for the dry cleaner multi-media inspector for their specific media.

Initially, the MDEQ had considered the auto body shops, underground storage tanks, salvage yards, and dry cleaner sectors to pilot the MERP. The dry cleaner sector was selected based upon several factors. At the completion of the dry cleaner sector MERP pilot, the MDEQ can evaluate the success of utilizing the MERP tools developed through this pilot project, and the viability of transferring these tools to another targeted sector of interest: salvage yards. The lessons learned through the sector selection process will be documented and compiled in a step-by-step approach that will be made available for other states' use.

The dry cleaning industry consists mainly of small and medium-sized establishments that operate with minimal resources. The MERP self-certification tools that will be made available to the dry cleaning industry will address the full range of environmental requirements that these establishments are subject to, and will help these businesses understand their applicable requirements more easily. The MERP project will educate the dry cleaning sector and ultimately bring them into compliance. This could in turn reduce air, water, and waste-generated pollution, as well as reduce the potential for enforcement actions and fines. Participation in the MERP could also provide an economic benefit to businesses by reducing their overall operating expenses. Overall, the MERP encourages a voluntary, "beyond compliance" approach that incorporates pollution prevention, waste reduction, and community involvement.

Phase I
Phase I will begin with the development of a database for tracking the information gathered during this project followed by an identification period of all dry cleaner establishments within the state. This will be done in conjunction with cooperation from the Michigan Department of Treasury, state and local economic development agencies, local chambers of commerce, MDEQ regulatory databases, local community groups, and trade associations. Additional research will be conducted through public references such as the business yellow page listings.

Concurrently, the MDEQ will develop a multi-media inspector check list, provide inspection staff with additional multi-media training for this project, and produce industry self-certification forms, as well as workbooks, fact sheets, and other compliance assistance tools to be used by the business. Finally, a set of training workshops will be developed to address all applicable federal and state environmental regulations, going beyond the compliance requirements to include aspects of best management practices, pollution prevention and waste reduction. Best management practices will be researched using guidelines from vocational and trade schools, as well as internal pollution prevention programs that focus on small business assistance. This effort would continue on into the initial part of Phase II.

After the initial compliance inspection checklists are completed, the MDEQ will develop a series of performance measures, as well as document the criteria that will be used to measure and compare final data results. The MDEQ will also update, modify, or establish new enforcement discretion policy and procedures so that it is consistently applied to each dry cleaner's environmental media during the MERP pilot project. Compliance assistance activities and responses will be tracked. Follow-up inspections will be completed during Phase III.

Phase II
Phase II would follow Phase I and would last approximately one year. Phase II begins with a regulatory inspection of a cross section of the state's entire universe of dry cleaning shops to establish an initial baseline compliance inspection assessment. The results of the initial compliance inspections will be used as a baseline to determine the current level of source compliance at the start of the project. During this phase, the MDEQ will clarify that the initial compliance inspection assessment visits are not official enforcement inspections, and that penalties for any violations discovered under this assessment will be considered within the enforcement discretion policy that has been developed under Phase I. At the time the initial compliance inspection assessment is made, the establishment owner will receive a copy of the self-certification workbook, compliance forms, and fact sheets. Establishment owners/operators would also be highly encouraged to attend some of the established compliance assistance workshops that are scheduled over a period of time under Phase II.

Throughout the course of Phase I and Phase II, a web-based system will be developed and loaded online to accept and document the submittal of self-certification reports by the state's dry cleaner operators.

Phase III
Phase III would be the final implementation phase and would continue for a little more than one year. Final implementation incorporates the actual submission of the self-certification materials by the dry cleaner establishments to the MDEQ. The self-certification forms will be reviewed for completeness, the data will be aggregately compiled, and bench-marked against the pre-determined performance measures selected in Phase I. Once the project is implemented, it should be able to support itself with minimal resources from the Agency. The largest component of Phase III will be the staff review of submittals of the compliance self-certification reports and the follow-up inspection assessments. The regulatory staff within MDEQ will be responsible for review of the self-certification reports. A final report of project findings will be developed and submitted to USEPA.

Outcome Goals and Objectives
The MDEQ goals and objectives for the dry cleaning MERP are outlined below:

Anticipated Improvements or Results from MERP Implementation

  1. How does the proposed tool or approach differ from current methods?
    The MERP will provide an alternative to the traditional permitting system that is equally if not more protective of the environment. It will provide the dry cleaning sector with compliance assistance tools that are easy to understand and implement. It.
  2. How does the MERP build on "lessons learned" from prior experience?
    The MERP will be developed with a web-based reporting and automation component from the inception of the project. Based upon other states' ERP experience, the automation element is essential for a successful program.
  3. What are the quantifiable improvements in environmental outcomes expected to result from implementation of this innovation?
    Currently, a majority of the dry cleaning establishment owners do not perform adequate monitoring and record keeping as required in the NESHAP and NSPS. The MERP will establish an environmental management system approach to assist the dry cleaning owners/operators with achieving lasting compliance with these requirements.
  4. What are the measurable improvements in administrative efficiency and program operational costs that may result from the program?
    The main improvements will result in cost savings through multi-media inspections (versus single media) by one staff person, reduction of traditional compliance inspections, and implementing a sector-wide general permit to install which would replace the need for case-by-case permit review, development, and approval.
  5. What are the quantifiable costs and efficiency improvements for the permit holders/regulated entities resulting from implementation of the MERP?
    The dry cleaning sector will have the opportunity to participate in lieu of applying for case-by-case permit applications. Title V permit applications can run into the thousands of dollars for a consultant to develop the permit application and occupy months of the dry cleaning operator's time to assist the consultant.

Analysis and Reporting
Following the conclusion of Phase III, there will be a three-month report development period when analysis of the project is completed and a final report on the project will be submitted. The MDEQ anticipates beginning this project in March of 2004 but would be flexible based on when the grant funding was awarded.

Mar '03 - Dec '04
PHASE I 		Dec '04 - Dec '05
PHASE II 		Dec '05- Jan '06
PHASE III
Establishment of MDEQ tracking database Continued development of compliance assistance tools Completion and posting of electronic submittal system program online
Identification of all dry cleaner establishments Development of inspector checklist Submittal of self-certification reports
Development of compliance assistance tools Delivery of baseline compliance inspection assessments Certification report review/ data aggregation
Internal inspection staff training Training and compliance assistance for businesses Post assurance inspection assessment of sample businesses
Begin development of electronic & automation submittal system Continued development of the electronic & automation submittal system Analysis of outcomes
Update, modify or establish new enforcement discretion policy and procedures Submission of quarterly progress reports to EPA Submission of quarterly progress reports to EPA
Submission of quarterly progress reports to EPA Development & submission of final report to EPA
Development of performance objectives and measures

BUDGET SUMMARY

[Budgetary Information Withheld by U.S. EPA]

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