Introduction
At the end of fiscal year 2001, we at the Arizona Department of Environmental
Quality marked the completion of our 14th year as a department. We continue to
build our agency’s performance on the pillars of productivity, quality, service and
advocacy, in order to fulfill our mission to protect the public health by protecting
the environment. Arizona’s citizens hold dear the quality of life to be found in our
state and its communities. They want to know that our air is clean to breathe, our
water is safe to drink, and our natural environment is protected. The employees
of ADEQ are stewards of Arizona’s natural legacy. We have dedicated our
professional lives to public service. It is through the hard work, accountability
and professionalism of all our employees that ADEQ continues to improve our
performance and fulfill our mission.
The 2001 annual report is an accounting of our stewardship, on behalf of the
citizens of Arizona, to effectively utilize our human and fiscal resources, to
protect and improve environmental quality, to provide excellent customer service
and to advocate for our state’s environmental interests. We have endeavored to
streamline operations, clarify roles, and be responsive and accountable in serving
our customers’ needs because, ultimately, it is their judgment that determines our
success. The method and means we have employed to fulfill our statutory mission
are those of public service and professionalism. This report highlights our progress
and our accomplishments in FY 2001. The appendices to this report, which are
available for viewing at the ADEQ Library or on our Web site at
www.adeq.state.az.us/comm/pubs/ar.html, provide significant technical detail
about many of our programs. In addition, the ADEQ Web site continues to add
useful information on our most recent activities and may be accessed at
www.adeq.state.az.us.

ADEQ's FY 2001 Annual Report, Page 1

ADEQ at a Glance
The Arizona Legislature established ADEQ as the state’s environmental
regulatory agency under the Environmental Quality Act of 1986. At the close of
FY 2001, ADEQ had 779 employees working in our Phoenix headquarters and
our Flagstaff and Tucson regional offices. The employee turnover rate during
fiscal year 2001 was 15.3 percent, down significantly from the record 20.8 percent
during fiscal year 2000. The department’s organizational structure is composed of
the director’s office, including staff offices of communications, legislative and
intergovernmental affairs, and special counsel, and four divisions: administrative
services, air quality, water quality and waste programs. Our agency’s core
functions include planning and assessment, rule writing, permitting, conducting
inspections, compliance and enforcement actions, monitoring and sampling,
investigating and remediating contaminated sites, and responding to emergencies.
In addition to these regulatory and restoration functions, ADEQ also develops
public education and information for such programs as pollution prevention,
recycling, and compliance assistance to individuals, local governments and
businesses. In an effort to improve customer service and enhance efficiency, we
have increased coordination among our various staff members who have similar
functional responsibilities in different program divisions affecting common
facilities or areas.

Fiscal Highlights
Information on our FY 2001 expenditures, revenues and full-time employees is
shown on the charts on Pages 3 and 4. Total revenue from general fund
appropriations, federal funds, interest, fines, penalties and fees was $111,616,731
in FY 2001. Chart 1 shows the sources of revenue and the percent contribution
from each source. We expended $97,555,069 in FY 2001. Chart 2 displays the
expenditures broken down by the state’s accounting classifications, while Chart 3
shows the expenditures by the four major funding sources. Information on
funding sources for authorized staff is provided in Chart 4.

ADEQ's FY 2001 Annual Report, Page 2

*Designated general fund revenues

Chart 2. ADEQ's FY 2001 Expenditures, by Accounting Classification
Total Amount: 97,555,069

Employee Related Expenses 5.95%
Personnel Services 28.45%
Professional & Outside Services 20.89%

Indirect 9.78%

Travel 1.17%

Capital Equipment 1.43%
Aid to Organizations/Individuals 24.27%

Other Operating Expenses 8.06%

ADEQ's FY 2001 Annual Report, Page 3

Chart 3. ADEQ's FY 2001 Expenditures, by Funding Source
Total Amount: 97,555,069
Federal Funds 11.68%
Appropriated Funds 23.55%
General Fund 12.26%

Non-Appropriated Funds 52.51%

ADEQ's FY 2001 Annual Report, Page 4

Legislative Highlights
In FY 2001, ADEQ sought to secure the authorities and fiscal resources needed
to build a stronger department that will better serve the citizens of Arizona and
enhance the quality of our state’s natural environment. The 2001 legislative
session increased our authority to protect public health and the environment in
several ways. The Legislature provided ADEQ with legal authority equivalent to
the federal Clean Water Act, enabling us to apply for delegation from the U.S.
Environmental Protection Agency of the National Pollutant Discharge
Elimination System permit program. This will enable Arizona to join 45 other
states that have delegated federal authority to control water pollution within
their borders by regulating industrial, municipal and other facilities that discharge
directly to surface waters. In addition, the Legislature established the
Underground Storage Tank Municipal Tank Closure Program to assist small
towns in closing abandoned tanks that present a serious risk to health and safety.

ADEQ's FY 2001 Annual Report, Page 5

Productivity
By reducing the cost of compliance with environmental regulations, ADEQ
enhances productivity and thus provides value to Arizona citizens. By making our
processes more efficient, we are able to respond quickly to the needs of the
regulated community while reducing costs and without compromising public
health or environmental protection efforts. ADEQ’s efforts help balance a rapidly
changing state economy with a clean environment and a healthy citizenry.

Air Quality Title V and General Permits
In FY 2001, ADEQ pursued an ambitious schedule to issue comprehensive air
quality permits, which are required under Title V of the federal Clean Air Act,
that will help large industrial sources stay in continuous compliance with their
pollution control requirements. We developed 10 general permits for smaller
pollution sources, which allows for issuing permits in days, not months. This
exceeded our goal of developing nine general permits in this period.

Water Quality Permits
ADEQ has worked for several years to streamline processes and improve
efficiencies for the Aquifer Protection Permit Program. With these process and
database improvements and staff training, we surpassed the target that the Sunset
Committee of Reference set in 2000 to reduce the inventory of pending permit
actions from 416 to 208 by July 1, 2002. On June 30, 2001, one year ahead of
schedule, the Aquifer Protection Permit inventory was reduced to 194. Effective
in January 2001, revisions to the Aquifer Protection Permit and Reclaimed Water
Permit rules enabled us to implement permitting improvements through the
expansion of the number of general permits, which significantly decreased the
time necessary to permit facilities. We hosted rule workshops in Phoenix,
Flagstaff and Tucson to educate the regulated community about the new rules
and to encourage them to take advantage of the general permit option where
appropriate.

ADEQ's FY 2001 Annual Report, Page 6

Monitoring Assistance Program
In 1998, the Legislature established the Monitoring Assistance Program (MAP)
to address chronic monitoring and reporting violations of drinking water
regulations that occurred at small water systems. MAP is a mandatory fee-forservice program for all water systems serving fewer than 10,000 people. During
the first three years of MAP, more than 96 percent of participating water systems
were brought into compliance with the applicable drinking water monitoring and
reporting requirements. During this same three-year period, contractor services
were secured at 26 percent below the revenues generated by fees, resulting in a
fund surplus. In 2001, the Arizona Legislature continued MAP for an additional
three-year period and increased the number of chemicals covered under the
program. We are currently developing rules for the MAP continuation that will
collect additional samples, lower program fees and use the surplus from the
previous three years to reduce program fees further. In the next three years, MAP
will collect and analyze additional chemicals at a reduced fee as an expanded
service to participating water systems.

ADEQ Intranet
ADEQ undertook several initiatives in FY 2001 to provide employees
information more efficiently through enhanced electronic communications, thus
ensuring that our employees have the information necessary to serve the public
effectively. The Office of Communications, in conjunction with the Information
Technology Section, launched a dramatically improved intranet in April 2001
that not only made tools such as templates and forms more accessible, but also
provided internal messages in a consistent, less intrusive way than sporadic email. The latter came in the form of a daily, electronic employee newsletter called
News to Use, and was supplemented by another posting that synthesized
pertinent articles from news media Web sites from around the country. The
intent was to keep employees informed and extend their awareness to issues
beyond the unit, section or division level, which in turn helped strengthen agency
morale by fostering a common base of knowledge.

ADEQ's FY 2001 Annual Report, Page 7

The development and implementation of an agency intranet has significantly
improved the timeliness and cost effectiveness of internal communications. With
the intranet, employees are able to access the ADEQ Library’s catalog from their
desks and can monitor the status of Help Desk service requests online.

Database Improvements
In FY 2001, ADEQ added an emergency response database to the Web site, the
fifth such database on our Web site that provides the public with immediate
access to information. The Information Technology Section replaced older,
outdated software with more user-friendly, maintainable and sharable systems to
improve productivity and efficiency. Public access has been improved by making
this core data available on the ADEQ Web site. Technological enhancements
moving toward a uniform database environment have helped ADEQ to
streamline and standardize business practices for improved productivity and
customer service. For example, enhancements to the Licensing Time Frame
module have created a standardized functionality throughout ADEQ for cost
recovery and accounting purposes.

New ADEQ Building
The new ADEQ office building in the Capitol Mall complex progressed from
planning and design stages to actual construction in FY 2001 as we continued our
preparations for the scheduled July 2002 relocation. We will be consolidating
most of our Phoenix workforce into one location, which will provide a more
efficient office environment and allow us to improve both staff productivity and
customer service by centralizing records storage and our information and
communications systems.
In cooperation with the Arizona Department of Administration and the
construction contractor, ADEQ has undertaken to design and construct this
facility in an effort to meet certification requirements of the U.S. Green Building
Council. If we are successful, ours will be one of only a few buildings in the
United States to carry this certification. We also are working to achieve an
energy efficiency rating based on the building’s design.
ADEQ's FY 2001 Annual Report, Page 8

Employee Recognition
The agency also supported agency morale through traditional channels. In FY
2001, ADEQ developed a new employee recognition program to better suit the
needs of the agency. The revised program allows for timely and frequent
recognition of the outstanding contributions of employees, supervisors and teams.
Through this program, employees are applauded for the outstanding service they
provide to the public and to each other.
The most significant change to the employee recognition program was the
addition of the Gold Star Award, which is a tool for all ADEQ employees to
recognize their coworkers “on-the-spot.” It is a straightforward process that
recognizes employees who demonstrate one or more of the following: teamwork,
positive attitude, quality work or customer service. Each month, 31 names are
drawn from a box containing all the names of that month’s Gold Star Awards
recipients.

ADEQ's FY 2001 Annual Report, Page 9

Quality
ADEQ achieves quality by reducing the public’s exposure to pollutants through
clean, safe water and air, and regulation, management and minimization of
Arizona’s wastes. By measuring how clean the environment is, ADEQ is able to
take steps to reduce unacceptable levels of pollution and oversee cleanup of
contaminated sites.

Air Quality Monitoring
As a result of clean air measured in the 1997-1999 period, EPA determined in FY
2001 that the metro Phoenix area has met the one-hour standard for ozone
pollution. Arizona is also on the way to attainment for monitored violations for
carbon monoxide, capping the necessary second straight year at the end of 1999.
We continue to work with our fellow air pollution agencies to refine the
monitoring network so we can provide citizens with accurate information about
the quality of the air they breathe.

Brown Cloud Summit
On March 15, 2000, Governor Jane Dee Hull signed Executive Order 2000-3,
establishing the Brown Cloud Summit and charging the summit with the
complicated job of identifying ways to reduce the brown cloud and recognizing
that the same measures might also help the Valley’s other air quality problems.
ADEQ coordinated the activities of the summit, including providing technical
support and testimony, and assigned two ADEQ employees to each
subcommittee. The agency was also responsible for scheduling and facilitating all
meetings of the summit and the subcommittees.
Throughout the process, summit members kept in mind ongoing work by other
groups to improve visibility at national parks and wilderness areas throughout the
West, sought comments from citizens, developed proposals to put the pollutionfighting measures into action and worked to get them done.

ADEQ's FY 2001 Annual Report, Page 10

The summit’s recommendations focused on three themes:
‚

Citizen-set goals to improve the brown cloud, improve our understanding of
the nature of the haze throughout the Valley, and improved monitoring to
assess our progress

‚

Long-term, market-driven strategies to help reach the visibility goal and
provide health benefits

‚

Short-term, voluntary and mandatory measures to reduce emissions and
improve public health

The summit also recommended the establishment of a visibility index and
additional monitoring to track progress. Many of the summit’s recommendations
were contained in HB 2538, which was enacted into law May 8, 2001.

WQARF Early Response Actions
ADEQ conducted several early response actions and early response action
evaluations at Water Quality Assurance Revolving Fund (WQARF) sites in FY
2001. We successfully installed groundwater pump and treat and soil vapor
extraction systems at ALSCo in the West Van Buren site and removed more than
6,000 tons of solid and hazardous waste from the East Washington Fluff site. On
these two early response actions, we spent more than $2.5 million of WQARF
funds.
During FY 2001, we also worked on the design and construction of several other
early response actions, including a soil vapor extraction system at F&B in the
West Central Phoenix WQARF Site and groundwater pump and treat systems at
the Central and Camelback site in Phoenix and the Broadway Pantano site in
Tucson. This work, as well as the early response action evaluations conducted
during FY 2001, will result in additional cleanup actions at WQARF sites in FY
2002.
During our South Phoenix initiative, ADEQ not only took action to eliminate a
significant public health threat to the South Phoenix community caused by a
former automobile shredding facility at 5th Street and Buckeye Road. The ADEQ
ADEQ's FY 2001 Annual Report, Page 11

director, senior managers and Waste Programs Division staff also endeavored
throughout the summer-long project to connect with community leaders and
work with them to keep citizens informed about our activities.
In May, as the early response action began, we opened a community information
office across the street from the project site and staffed it daily with English and
Spanish employees until the project was completed. In addition, the director
hosted weekly luncheons at the South Phoenix office, which enabled community
leaders and ADEQ managers to talk about their concerns and vision for
improving environmental conditions in that area of town. Staff members also
provided educational presentations to four groups of students from Lowell
Elementary School.

Innovative Waste Utilization Permit
ADEQ issued the Innovative Waste Utilization hazardous waste operating permit
on April 12, 2001. This was a complex permitting process due to the urban
location of the facility, the amount of concern expressed at the public and
political level, and the media attention concerning issuance of the permit.
Through a rigorous public involvement and permit review process, the permit
addressed the majority of public concerns and set a standard for how hazardous
waste permits will be considered in similar circumstances.

Water Quality Improvement Grant Program
Twice a year ADEQ allocates funding to public and private entities for statewide
local management of nonpoint source pollution through the Water Quality
Improvement Grant Program. Applicants receive matching funds provided under
319(h) of the Clean Water Act to implement on-the-ground water quality
improvement projects to improve and protect water quality by controlling
nonpoint source pollution, such as runoff from row crop production or
concentrated animal feeding operations, urban runoff, sediment deposits from
construction and sand and gravel mining, and petroleum pollution and soil
disturbance from recreational activities.

ADEQ's FY 2001 Annual Report, Page 12

The Water Quality Improvement Grant Program expanded and flourished
notably during FY 2001. Interest in the program grew during the 2001 grant
cycles with workshop attendance almost doubling in six months. Staff attribute
the increased public interest to their enhanced outreach efforts that expanded
the number and geographic dispersion of informational workshops conducted and
improved attendance of a more diverse customer base. Local governments, tribal
authorities, cities, counties, regional development centers, colleges and
universities, local nonprofit organizations, state agencies, for-profit organizations,
individuals and watershed groups attended our workshops. This broader audience
and soaring interest will bring about a more competitive grant program and
deliver more desirable water quality improvement projects for the state.

Total Maximum Daily Load
Waterbodies that do not meet their water quality standards and designated uses
are known as “impaired waters” and are placed on a list required by section
303(d) of the Clean Water Act until a total maximum daily load analysis
(TMDL) is prepared and implemented. A TMDL is a calculation of the total
amount of a pollutant that a waterbody can receive and still achieve water quality
standards. In Arizona, each TMDL also contains an implementation plan that
summarizes activities or projects that can be undertaken to bring the water
quality back to meeting standards.
We worked with stakeholders throughout FY 2001 to develop draft rules that
must include criteria for determining whether monitoring data are “credible,”
identifies the methodology to be used in deciding whether a waterbody is
impaired and if impaired, how the waterbody will be prioritized for development
of a TMDL. It is anticipated that the “impaired waters identification” rule will be
finalized by the end of the calendar year and will be used to develop the 2002
303(d) List. In addition to the public participation requirements for the 303(d)
List and TMDLs, this new statute requires us to develop rules related to the water
quality assessment, impaired waters identification and TMDL processes.

ADEQ's FY 2001 Annual Report, Page 13

Animal Feeding Operations
In previous years, the agency has responded to complaints related to animal
feeding operations, but has recently gained the authority, through a new general
permit, to regulate these operations. Marking the first full fiscal year of proactive
involvement, ADEQ’s Water Quality Enforcement Unit inspected a total of 46
animal feeding operations in FY 2001. Of those 46 operation inspections, 31 were
dairy, nine were feedlots, five were swine and one was poultry. From these 46
inspections, we issued two notices of opportunity to correct (NOCs) to feedlots.
Four NOCs were closed during the fiscal year – the two NOCs issued in FY 2001
and two NOCs carried over from the previous year.
Based on our inspections, the animal feeding operations appear to be operating,
for the most part, in compliance with the applicable state laws and rules. Few
operations that have had minor problems have since been brought into
compliance.

Reduced Number of Reported Leaking Underground Storage Tanks
During FY 2001, only 108 releases from underground storage tank systems were
reported to us. This figure is substantially less than the 266 reported in FY 2000,
478 in FY 1999, and the even higher numbers of releases reported in previous
years.
Several variables have led to the trend of fewer leaking underground storage
tanks, including the fact that the population of regulated underground storage
tanks has decreased and stabilized to about 8,000 tanks within the last three
years. Our continuous and concerted efforts to work with the regulated public to
achieve and maintain compliance with underground storage tank operational and
reporting requirements has contributed significantly to the decrease. In FY 2001,
848 of the 861 underground storage tank facility inspections that we inspected
complied with the federal and state 1998 underground storage tank upgrade
requirement. This represents a greater than 98 percent compliance rate. The
continued efforts of our Underground Storage Tanks Inspections and
Compliance
ADEQ's FY 2001 Annual Report, Page 14

Program makes the projection of fewer leaking underground storage tanks in the
future realistic and the decreasing trend sustainable.
One leaking underground storage tank response during FY 2001 was particularly
significant. In late June 2000, a private drinking water well in Quartzsite was
found to be contaminated in excess of health-based standards with chemicals
commonly found in petroleum. Other potentially affected wells in the general
area were sampled and three additional private wells were found to contain
petroleum contamination above health-based standards. The four residences
affected by the contamination were immediately provided with a temporary
alternative water supply for drinking and household use. In anticipation of other
homeowners requiring drinking water, we immediately contracted with a local
water supplier to distribute four tanks and bottled water for other households
suspected of having affected wells.
ADEQ initiated an extensive outreach effort to inform community members
about the contamination. In September 2000, the Water Infrastructure Finance
Authority and the town of Quartzsite executed a loan, whereby a portion of the
loan was to be used to provide a potable water supply to affected homes until a
permanent water main could be installed. In November, we met with town
officials and representatives from La Paz County to develop a community
notification action plan to provide adequate notice of the problem and
short-term resolution to the residents of Quartzsite.
Throughout this entire process, we investigated the potential sources of the
contamination. Three potential sources of an underground storage tank release
were identified and, based on preliminary soil and groundwater investigations,
one of the sources was eliminated, another exhibited elevated concentrations of
contamination and the remaining source is still under investigation.

ADEQ's FY 2001 Annual Report, Page 15

Service
ADEQ understands that public service is a cornerstone of its mission as a state
agency. Thus, ADEQ strives to meet and exceed our customers’ expectations in
all that we do. As we serve our customers, we reduce pollution and contaminants
through preventative measures and remediation activities. Meeting customer
needs also includes educating the public about the environment and involving
stakeholders, who provide input on our programs, rules and processes.

Car Care
For years, Arizona has maintained one of the nation’s most comprehensive and
successful vehicle emissions inspection programs. In FY 2001, ADEQ placed
renewed emphasis on customer service for its VEI program that operates in the
Phoenix and Tucson metropolitan areas. Now called Car Care, the program
educates motorists about the important linkage between proper vehicle
maintenance and air quality and keeps pace with rapidly advancing automotive
technology.
In FY 2001, ADEQ entered into a new inspection services contract with GordonDarby Arizona Testing, Inc., to provide emissions testing services from January
2002 through December 2009. Program enhancements include an expanded
inspection network, new on-board diagnostic testing technology and a wait time
monitoring system that allows ADEQ to continually assess contractor and
network performance.
The new contract increases capacity for added customer convenience and
reduced wait times. Phoenix will have three new inspection facilities, located in
Surprise, South Phoenix and Chandler, bringing the total available test lanes to
59. Tucson will have additional lanes opened at two facilities for a total of 13
available test lanes.

ADEQ's FY 2001 Annual Report, Page 16

Car Care’s continued outreach to the service industry through training classes
and seminars is being augmented with on-board diagnostics seminars prior to the
start of on-board diagnostics inspections. Continued improvements in service
include adopting new technologies. Vehicles manufactured since 1996 are
equipped with computer systems designed to continually monitor engine
function. By scanning the vehicle’s on-board computer a new level of technology
in automotive emissions testing is achieved. On-board diagnostics testing will
replace the tailpipe test on properly equipped light-duty cars and trucks, and will
improve the identification of vehicles needing emissions related repair and
significantly reduce test time.

Community Liaisons
In an effort to improve customer service throughout the state, we created four
community liaison positions to serve each corner of the state. The primary role of
the community liaisons is to help local residents, businesses and governments
understand environmental requirements and help them work through agency
processes. They provide professional resources to help develop compliance
strategies and infrastructure improvements to increase environmental quality in
the less urbanized areas of the state. The long-term result of these activities will
be an increased awareness and understanding of ADEQ’s role and regulations, a
higher level of compliance, and a savings in time, cost and other resources in
dealing with our department.
Below we have highlighted several key ways in which ADEQ’s community
liaisons provided customer service in FY 2001.
Bisbee Bond Issue
An aging sewer collection and treatment infrastructure problem in the
city of Bisbee has resulted in problems maintaining compliance with
ADEQ and EPA regulations that protect public health and the
environment. Various city administrations over the past several decades
have been unsuccessful in their attempts to develop a permanent solution
to these problems. In September 2000, an ADEQ community liaison
ADEQ's FY 2001 Annual Report, Page 17

located at a county office in Bisbee to work with the city in finding a
solution and obtaining voter approval to finance it. When the voters
approved the financing solution by a 95-to-five margin on May 15, 2001,
the city was on its way to designing and implementing a $26 million
enhanced collection system and new wastewater treatment plant.
Town of Chloride’s Water Supply
Located in a mineralized area where the local groundwater requires
treatment to meet potable water standards, public and private wells in the
town of Chloride have total uranium of more than 1,000 ug/l, which far
exceeds EPA proposed standard of 30 ug/l by 2003. In addition to this
exceedance, the wells of the Chloride Domestic Water Improvement
District, which provides service to approximately 400 people, have
experienced a consistent loss in supply over the last three years and has
had to haul water to meet demand during the summer.
With a community liaison spearheading this project, ADEQ assisted the
town by providing assistance in applications for technical assistance
grants, helping put together a consulting team and a scope of work,
providing project oversight, and providing compliance assistance to rectify
past and avert future monitoring and reporting violations.
Wastewater Planning in Beaver Dam and Littlefield
The communities of Beaver Dam and Littlefield have high density
subdivisions with relatively shallow depths to groundwater, thus
complicating wastewater disposal. Even though there is no centralized
sewer system in the area, their proximity to Mesquite, Nev. has brought
substantial growth to the communities. An ADEQ community liaison is
helping the Dixie Escalante Cooperative Power Utility to develop a
partnership with the communities to provide wastewater planning and
possible future capital improvements to avert future water resources
degradation.

ADEQ's FY 2001 Annual Report, Page 18

Recycling Outreach and Workshop
The ADEQ Recycling Program focuses on public education and outreach to
encourage voluntary participation in source reduction, reuse and recycling of
solid waste, while also identifying techniques to enhance waste reduction efforts.
The Recycling Program conducted 141 outreach events during FY 2001.
Highlights of these events are listed below.
Earth Day 2001
The Recycling Program staff celebrated Earth Day 2001 by traveling to
Earth Day events throughout the state during the month of April.
Activities were sponsored by jurisdictions, schools, and non- and forprofit organizations.
Computer Recycling – StRUT
The Recycling Program partnered with public jurisdictions, non-profit
organizations and local business to promote the Students Recycling Used
Technology (StRUT) Computer Recycling Day. On Saturday, April 21,
Valley residents had the opportunity to recycle their old and obsolete
computers and associated equipment by taking them to one of several
drop-off locations throughout the Valley.
Recycling Program Funding Workshop
In June 2001, the Recycling Program held our first Waste Reduction
Assistance Funding Workshop. The workshop featured 14 speakers who
represented a variety of recycling organizations. The workshop was
attended by approximately 90 people and received high praise from
participants.

Community Advisory Boards
During FY 2001, we successfully established five additional community advisory
boards or groups for WQARF and federal Superfund sites, exceeding our goal of
establishing two of the groups in FY 2001 and three in FY 2002. Currently, we
ADEQ's FY 2001 Annual Report, Page 19

support 15 community advisory boards or groups that represent a total of 20
WQARF and two federal Superfund sites throughout the state. These groups
meet at least quarterly to receive updates on our work at sites and provide input
about community concerns.
During FY 2001, we conducted more than 100 public meetings, including
community advisory board/group meetings, educational presentations to various
groups and other required public meetings. We also produced 13 factsheets to
distribute information to the community near various WQARF sites.

Lenders’ Day
Our Underground Storage Tank staff went beyond their traditional outreach to
the regulated community this year by holding an event in May that was designed
for the realty, development and lending community -- customers who we consider
to be major players in the issues and challenges associated with contaminated
properties.
Approximately 60 consultants, realtors, property assessors, financial institution
representatives attended our Lenders’ Day event, which focused on liability and
other issues related to the investigation, clean up and sale of contaminated
properties. The audience heard presentations from ADEQ remediation staff as
well as from speakers representing a cross-section of the industry. Feedback was
overwhelmingly positive and included a strong recommendation that Lenders’
Day become an annual event.

Pollution Prevention Program
Through the Pollution Prevention (P2) Program, ADEQ assists customers who
are required by state law to submit P2 plans. We also provide assistance by
sharing pertinent information with P2 communities, training the facilities in need
of assistance and participating in a variety of other P2 outreach activities. ADEQ
recognizes that sharing information about P2 successes will promote greater
accomplishments in carrying out P2, so we encourage participation in P2 Program
workshops and conferences.
ADEQ's FY 2001 Annual Report, Page 20

During FY 2001, the P2 Program promoted P2 efforts through the following
activities:
By speaking at environmental events and displaying P2’s information
package at 22 state, regional, national, and international workshops and
conferences on many different topics, including general P2, automotive
and fleet repair, boats and marinas, watersheds, parks, hazardous wastes,
green building, and integrated pest management.
Upon request from regulated facilities, we provided two free classroom
training seminars on plan writing and P2 compliance requirements.
Conducting 27 on-site visits and four meetings in FY 2001, the program
assisted facilities with conducting P2 opportunity analysis and meeting P2
regulatory requirements.
Staff have facilitated the development of a partnership with Arizona’s
military stations to reinforce the sharing of P2 information, and improve
communications and cooperation. An existing partnership with the
mining industry has included the development of a mining P2 Web site
for promoting P2 through networking, mutual assistance and information
exchange.

ADEQ's FY 2001 Annual Report, Page 21

Advocacy
ADEQ is a leading advocate for Arizona’s environmental interests. With the
authority to administer federal programs and through high-level involvement in
state and regional programs, we ensure that the regulations and modes of
enforcement of these programs are applicable to the special needs of Arizona’s
environment. By making known our position on national environmental issues,
we help shape national policy and work to ensure that it reflects the specific
needs of Arizona’s citizens.

Arizona Pollutant Discharge Elimination System
Because of identified benefits of a state-operated program, ADEQ initiated work
in FY 2001 to involve stakeholders and EPA in making great strides toward
operating a state National Pollutant Discharge Elimination System (NPDES)
permit program. Between October 2000 and May 2001, we worked with
stakeholders to modify our statutory authorities so that we could operate a state
program with all necessary components of the NPDES and related programs.
These efforts resulted in the passage of House Bill (HB) 2426 during the 2001
legislative session. HB 2426, which became effective on Aug. 9, 2001, created the
Arizona Pollutant Discharge Elimination System (AZPDES) program by adding
Article 3.1 in Title 49, Chapter 2.
We continued to work with our stakeholders to draft a Memorandum of
Agreement (MOA) with EPA that details how the state will administer the
AZPDES program. The MOA establishes provisions for transfer of permit
documents, specifies classes and categories of permit applications that we will
send to EPA Region 9 for review, outlines the frequency and content of our
reports to EPA Region 9, details our compliance and enforcement program, and
establishes procedures for modifying the MOA. We also convened several
working groups to develop rules to complete the final piece of the AZPDES
program submittal requirements. The working groups made recommendations on
which of the existing NPDES rules should be incorporated by reference and
which should be rewritten to provide clarity for Arizona applicants and
ADEQ's FY 2001 Annual Report, Page 22

permittees. Following these recommendations, we developed the rules to ensure
that the AZPDES program is consistent with, but no more stringent than, the
federal program. Formal public comment periods for both the MOA and the rules
are scheduled for FY 2002. We plan to submit the complete program package to
EPA Region 9 by Jan. 1, 2002. Based on this target submittal date, we anticipate
receiving AZPDES program approval by July 2, 2002.

Arsenic Standard
In January 2001, EPA revised the arsenic standard for drinking water by lowering
the maximum contaminant level from 50 parts per billion (ppb) to 10 ppb. In
Arizona, arsenic occurs naturally in groundwater and surface water; in many
locations these naturally occurring levels of arsenic are above 10 ppb. The
January EPA action triggered vigorous national debate as to whether the existing
scientific evidence shows arsenic is a health concern above 10 ppb and whether
EPA accurately captured the cost and benefits of this new drinking water
standard. We became engaged nationally in this debate searching for answers to
the health effects questions and to ensure the costs and benefits were more
accurately captured as this EPA action is estimated to cost Arizona water systems
between $75 to $120 million annually. We made presentations at several national
conferences on arsenic throughout 2000 and 2001 urging the scientific
community to develop additional health effects studies designed to address the
uncertainties existing in the studies underlying the EPA action and urging EPA
to improve their cost estimate as well as their benefits analysis. As a result of
engaging in the national debate, the EPA Office of Research Development asked
us to participate in a meeting of select states to identify the scientific issues
surrounding arsenic to provide EPA the knowledge necessary for future health
effects studies. We were also asked to sit on the National Drinking Water
Advisory Council’s subgroup on arsenic that was charged by the EPA to perform
a critical evaluation of their regulatory cost estimate for the arsenic regulation
and to make specific recommendations on improvements to be used in revising
this estimate.

ADEQ's FY 2001 Annual Report, Page 23

Governor’s Agricultural Best Management Practices Committee
In an effort to address agriculture’s contribution to particulate pollution and to
avoid federal intervention, the Governor’s Agricultural Best Management
Practices Committee was statutorily created in 1998. The statute that established
this committee also established that ADEQ would provide support for the
logistical aspects of the development of the general permit and public education
campaign. After several years in development, the Agricultural PM10 General
Permit became effective by rule on May 12, 2000. The general permit requires
that a commercial farmer implement at least one BMP to control PM10 for each
three types of sources of particulate pollution. Throughout FY 2001, the
committee members and stakeholders have worked to educate farmers about the
new requirements in support of compliance by the Dec. 31, 2001 deadline.

TRW Settlement
ADEQ and the Arizona attorney general led a successful joint civil and criminal
settlement with air bag manufacturer TRW Vehicle Safety Systems Inc. in
January 2001. The $22 million in fines and penalties was the largest settlement of
its kind in U.S. history.
Arizona and the federal government alleged that TRW illegally disposed of the
chemical sodium azide that is used to explode air bags on impact. As a result of
the settlement, TRW will pay hazardous waste fines and penalties, will clean up
contamination from the violations, and pled guilty to one count of illegal storage
of hazardous waste, five counts of illegal transportation of hazardous waste and
nine felonies in federal court.
In addition to monetary penalties, the settlement required TRW to fund
supplemental environmental projects (SEPs) valued at approximately $5.7
million. The SEPs include facility upgrades to ensure safer handling of wastewater
and significantly reduce TRW-generated waste TRW. A SEP to implement a
countywide community notification system to inform residents of potential
emergencies was also required. By helping prevent future environmental harm
from the mismanagement of hazardous materials and notifying local residents in
ADEQ's FY 2001 Annual Report, Page 24

the event of a potential emergency, these SEPs provide a valuable service to the
community.
The settlement was a result of four years of investigation and negotiations with
TRW, and makes it clear that compliance with Arizona environmental laws is
expected and that the hazardous waste program will enforce the law to protect
Arizona's citizens.

Water Quality Initiatives for Border Communities
Through formal memoranda of understanding, ADEQ has partnered with several
Mexico-based organizations to protect binational water bodies. For the Nogales
Sonora Wastewater Pretreatment Program, ADEQ and the State of Sonora
Drinking Water and Sewage Commission are working together to protect water
supplies and infrastructure investments in Nogales, Arizona and Nogales, Sonora
through an industrial pretreatment program. In a similar arrangement, ADEQ
and the University of Sonora, with the support of Sonora’s Secretariat for Urban
Infrastructure and Ecology, have formed an investigative partnership. Data
gathered from environmental monitoring activities under this agreement will help
ensure the safety and long-term protection of water quality necessary for growing
border communities that Arizona and Sonora share.

Air Quality Outreach Efforts in Nogales, Arizona and Nogales,
Sonora
To address particulate air pollution in Nogales, Arizona and Nogales, Sonora,
ADEQ implemented a binational outreach campaign. In addition to developing
educational materials for the general public, this effort includes a parallel
initiative to bring stakeholders together. Stakeholder involvement enables ADEQ
to identify large-scale community actions to address difficult issues, such as the
need for road paving projects in Nogales, Sonora. This binational governmental
dialogue is undertaken in cooperation with the U.S. and Mexico Consuls located
in Ambos Nogales. The consular-led forum for this dialogue is called the Border
Liaison Mechanism.

ADEQ's FY 2001 Annual Report, Page 25