Get Ready, Complying With the RRP Rule Will Get Much More Expensive

EPA to raise RRP fees

Businesses complying with the EPA RRP Rule should plan ahead for increased costs. Because of EPA's mismanagement and lack of accountability regarding the RRP Rule, the actual costs to administer and enforce the rule have so far dramatically exceeded the fees collected from complying firms. To address the shortfall of funds EPA plans to raise the fees related to the rule. This will likely mean that the cost of firm certification and firm re-certifications will dramatically increase. And, because the RRP rule is required to be self funding, it looks like EPA will need to raise the fees high enough to offset their losses since the program began, as well as their ongoing costs going forward.

The increased costs will definitely add to the advantages non-complying firms have been enjoying so far, further punishing legitimate businesses for complying. I also predict the increased fees will promote more illegal work, therefore more kid will be needlessly poisoned because many in our our government are incompetent.

The amount of the EPA RRP fee increases is not yet known

rrp firm certification fees going up Because EPA did not do an accurate estimate of program costs and revenues when they set their original fees, money coming in to support rule administration is not coming anywhere close to the actual costs. If EPA were a for profit business they would already have gone out of business when it comes to RRP. But, because the EPA and its leadership are not held to the same standards as for-profit businesses and business leaders, not only will they be allowed to continue operations, those at EPA who are responsible for the RRP rule get to keep their jobs and paychecks, despite such dismal performance. And, rather than concentrate on fixing their business plan to create financial health, EPA can simply charge their customers more money. The problem is that their customers, those who must comply with the rule, do not have any other options they can choose from to do business with.

Here is a summary of information to help you understand what has happened and what to expect going forward

Note: Info below is from an EPA Office of Inspector General Report dated 2/20/13 titled "EPA Is Not Recovering All Its Costs of the Lead-Based Paint Fees Program”

EPA had not conducted a formal cost study to determine its actual program costs before establishing fees.

According to the report, EPA is losing money on the RRP program.

Based on the agency’s estimates since the RRP rule went into effect in 2010, the total loss will amount to around $16.4 million by 2014.

Fiscal year 2010, the first year of the rule, actually netted a profit of $8.9 million, but costs are exceeding fee collections by $25.3 million for 2011 through 2014.

The report pointed out three issues contributing to the EPA’s unrecovered costs.

The agency has not conducted recommended biennial cost reviews to ensure that fees are in line with costs. (Think WAG: "Wild Ass Guess")
The fee structure also does not take into account all the indirect costs needed to recover the cost of administering the RRP program.
RRP firm participation is lower than the EPA projected.

The report says that by not recovering all of its program costs, “the federal government did not collect funds that otherwise could have been available to offset the federal budget deficit.” (In business speak this means they contributed to the deficit by operating beyond their means.)

The OIG recommends that the March 2009 fee schedule for the lead-based paint program be adjusted “to reflect the amount of fees necessary for the program to recover the costs of implementing and enforcing the program.”

The report indicated that the EPA agrees with the recommendation and "intends" to take “corrective actions".

According to the report EPA agreed and plans to conduct a biennial cost review of the RRP program in Fiscal Year 2013.

Wrapping this up!

Here is what the EPA Inspector General had to say:

“The President’s Budget Message for FY 2012 states that reducing the long-term federal deficit must be a priority. The federal government is looking for ways to save money and cut unnecessary costs. We believe that EPA could help the federal government in this endeavor by collecting more lead fees to recover more of its costs"