The Secretary for Resources heads the Resource Agency, and is responsible for general policy formulation to manage and preserve California's natural, recreational, and wildlife resources. The Secretary is responsible for the operation of the following departments and organizations:
|Conservation||California Conservation Corps|
|Fish and Game||San Francisco Bay Conservation and|
|Forestry and Fire Protection||Development Commission|
|Parks and Recreation||Energy Resources Conservation and|
|Boating and Waterways||Development Commission|
|Water Resources||Santa Monica Mountains Conservancy|
|State Lands Commission||State Coastal Conservancy|
|Colorado River Board||California Tahoe Conservancy|
|California Coastal Commission|
The Secretary also (1) serves as an ex officio member of various commissions and conservancies, (2) administers the Environmental License Plate Fund (ELPF), and (3) issues the state's guidelines for preparation of environmental impact reports (EIRs) and designates the classes of activities exempted from the preparation of EIRs.
We recommend that State Water Project (SWP) funds, not the Environmental License Plate Fund, pay for a proposed study of alternative options for financing and operating the SWP. (Reduce Item 0540-001-0140 by $350,000 and augment reimbursements in Item 0540-001-0001 by $350,000.)
The SWP consists of a dam and reservoir (Lake Oroville) on the Feather River, a major aqueduct from the Sacramento-San Joaquin River Delta to southern California, branch aqueducts to other parts of the state, and water storage and power generation facilities. The SWP is the state's means of moving water to (1) agricultural areas for crop production and (2) urban areas throughout the state for domestic use. Project revenues come primarily from payments made by water agencies on long-term contracts for water delivery. Under current law, responsibility for constructing, operating, and maintaining the SWP rests with the Department of Water Resources (DWR).
Budget Request. For 1996-97, the budget requests $350,000 from the ELPF for an evaluation of the operational and financial needs of the SWP. The Secretary indicates that the proposed study will evaluate various options for financing and operating the state's water supply programs in order to provide cost-effective service, including the following:
Although the proposed study may result in some ancillary environmental benefits by improving the state's ability to protect water-related habitat, its primary purpose is to evaluate the operational and financial needs of the SWP. Consequently, the ELPF is not an appropriate funding source for this study. Rather, an appropriate source of funding for the proposed study would be SWP funds. This is because the study will identify options for operating the SWP based on improving the effectiveness and efficiency of the SWP and achieving cost savings or revenue gains for the state, the SWP contractors, and bond holders. Accordingly, we recommend that the study be funded from the SWP funds.
We recommend the adoption of supplemental report language requiring departments and agencies under the Resources Agency to develop schedules for making resources databases accessible through the California Environmental Resources Evaluation System, and report this information to the Legislature.
The California Environmental Resources Evaluation System (CERES) was initiated in January 1994 by the Resources Agency to improve the coordination of state resources databases and the dissemination of information on resources management and planning. The budget requests $768,000 from the ELPF to continue work on the CERES in 1996-97, to inventory and integrate resources databases, develop applications for their use, and provide public access to the information they contain.
Resources Departments Collect Significant Amounts of Information. The various resources departments spend significant amounts of money and staff time annually to collect and manage resources information. For example, in 1994-95, the Department of Fish and Game alonespent about $14.9 million collecting data, such as the location of endangered species, which is critical to the department's management of the state's natural resources. Other departments that collect and manage significant amounts of resources data include the Department of Conservation, the Department of Forestry and Fire Protection, the Department of Water Resources, and the State Lands Commission.
Much Information Not Currently Accessible to Public. Despite the significant expenditures of staff time and funds to collect and manage resources information, much of that information is not easily accessible to either the public, including both for-profit and nonprofit organizations, to local governments, or to other state agencies. Improving the accessibility of information would assist local governments and state agencies in their planning for growth and natural resources conservation efforts. Improving the accessibility and integration of that information is also consistent with Ch 508/95 (SB 1, Alquist), which created a new Department of Information Technology to help improve the state's management of information technology and the accessibility of information collected.
The Resources Agency indicates that it has completed an inventory of most of the databases maintained by resources departments which it plans to publish on the CERES in spring 1996. The next step will be for resources departments to develop and implement strategies to increase the accessibility of the databases identified in that inventory.
Recommendation. Given the significant funds and staff time being spent on collecting and managing resources information, and the importance of this information to the effective management by both local and state agencies of the state's natural resources, we think it is important that where appropriate, resources databases be made accessible to state agencies, local governments, and for-profit and nonprofit organizations. Accordingly, we recommend the adoption of the following supplemental report language:
The Secretary for Environmental Protection heads the California Environmental Protection Agency (Cal-EPA). The Secretary is responsible for overseeing and coordinating the activities of the following departments that make up the Cal-EPA:
Major activities of the Cal-EPA include permit and regulatory reform, the promotion of pollution prevention, the development of markets for environmental technologies, and the establishment of business assistance programs such as the "one-stop" permit assistance centers (PACs). Many of the Cal-EPA's initiatives have been implemented in conjunction with the constituent agencies within the Cal-EPA (noted above) and with other state agencies, such as the Trade and Commerce Agency.
The budget proposes total expenditures of $2.7 million for the Secretary in 1996-97. This level of expenditures is the same as estimated current-year expenditures.
We recommend that: (1) the Secretary provide workload justification for the funding and staffing levels for the Permit Assistance Centers (PACs) in the budget year; and (2) the Legislature adopt supplemental report language requiring the Secretary to develop and provide performance measures and workload information in order to evaluate the PACs in the budget and subsequent years.
PACs Established Administratively. Beginning in 1992, the Secretary has administratively established eight PACs (seven of which are full-time) throughout the state. The PACs are designed to provide a single point of contact for businesses to obtain information on all required permits and assistance in applying for such permits. These could be federal, state, and local permits necessary to start a business, including environmental, land use, and health and safety permits. The PACs are overseen by the Secretary, and staffed by employees assigned from boards and departments within the Cal-EPA, as well as from various local agencies.
In the current year, estimated expenditures for the PACs are about $2.7 million, with state and local contributions of $1.4 million and $1.3 million, respectively. As part of the state's contribution, about 20 personnel-years have been assigned to the PACs from within the Cal-EPA, mainly from the Department of Toxic Substances Control and the Regional Water Quality Control Boards. Also included in the state's contribution is $236,000 from five state agencies outside of the Cal-EPA.
Budget Proposes Expansion of the PACs. The budget requests an increase of $243,000 to support five more (four part-time) PACs and to establish a full-time position in the Secretary's office to oversee the PACs in 1996-97. However, no details have been provided regarding the particular staffing needs at each of the proposed PACs to substantiate the funding increase.
Legislature Required Evaluation of the PACs. The Supplemental Report of the 1995 Budget Act required the Secretary to report to the Legislature by January 1996 on the development of a strategic plan with performance measures that would allow an evaluation of the progress and overall effectiveness of the PACs. The Secretary was also required to develop a funding allocation for each PAC which links the funding sources to the particular type of permitting assistance actually provided at the center. The report was submitted to the Legislature in December 1995 and we have reviewed the report.
Current Performance Measures Too Broad and Need Refinement. The Secretary's report states that the PACs provided assistance to about 2,900 customers in the first five months of 1995-96. The report, however, does not provide further information on how and the extent to which customers are assisted. Furthermore, the report fails to provide a funding allocation for the centers as directed.
While we believe there is merit in the concept of providing "one-stop" assistance to businesses in meeting the permit requirements of several regulatory agencies, it is important to be able to evaluate the effectiveness of the PACs in providing such assistance. This is because staff resources used in support of the centers are redirected from various boards and departments where these resources would otherwise be performing similar permitting functions. The centers are provided to offer a more convenient location and a more "coordinated" approach to the permitting process, but at added costs.
We find that the performance measures developed to date for the current year do not allow the Legislature to effectively evaluate the PACs. For instance, the only performance measure established relates to the number of customers "served" at each PAC. Such a broadly defined performance measure does not allow for an evaluation of the level of service provided to customers and ultimately whether the customers are better off--such as, in the amount of time needed to issue permits--as a result of the assistance provided by the PACs.
The Secretary's office indicated that it is developing computer software that will track the type of assistance (permitting, financial, technical, etc.) provided to each PAC customer, including the particular type of permit involved. In addition, customer surveys will track the level of satisfaction with the quality of service provided. To ensure that the Secretary develops performance measures that allow the Legislature to evaluate the PACs, we recommend that the Legislature adopt the following supplemental report language:
Workload Data Needed to Structure Appropriate Funding and Staffing. The Secretary was not able to provide actual workload information for each PAC showing the particular type of permitting assistance provided. Consequently, we are unable to determine whether the current funding allocation for the PACs is consistent with the permitting assistance provided.
Similarly, without this workload information, we are unable to determine whether the current breakdown of the Cal-EPA employee assignments to the PACs is justified. The reassignment of employees to the PACs is likely to have an impact on the workload at the Cal-EPA board or department from which the employees are assigned. Therefore, it is necessary to have workload information to ensure that the assignment of employees to the PACs (1) is appropriate in light of the demand for particular types of permitting assistance at the PACs and (2) does not negatively impact the quality of service provided to parties who apply for permits at the Cal-EPA boards and departments, without the assistance of a PAC.
Ongoing Funding of PACs Needs Justification. While we think that expanding the PACs in 1996-97 may have merit, we recommend that the Secretary provide, prior to budget hearings, workload data for each PAC to justify the allocation of funding sources and employee assignments to each PAC in 1996-97.
We also recommend that the Legislature adopt the following supplemental language to direct the Secretary to provide appropriate performance measures and workload justification for the funding sources and employee assignments at each center in its 1997-98 and future years' requests for support of PACs.
The Department of Conservation (DOC) is charged with the development and management of the state's land, energy, and mineral resources. The department manages programs in the areas of: geology, seismology, and mineral resources; oil, gas, and geothermal resources; agricultural and open-space land; and beverage container recycling.
The DOC proposes expenditures totaling $414.4 million in 1996-97, an increase of about $17.3 million, or 4.3 percent, over estimated current-year expenditures. The increase is due largely to a projected increase in expenditures in the beverage container recycling program, as discussed below.
The California Beverage Container Recycling Fund had accumulated a reserve of approximately $100 million by the end of 1994-95, mainly due to payments for refunds on beverage containers being less than the amount paid into the fund.
California's Beverage Container Recycling Program (BCRP) began in October 1987 after enactment of Ch 1290/86 (AB 2020, Margolin). The original goals of the program were to reach an overall beverage container recycling rate of 80 percent, by an unspecified date, and to make recycling of beverage containers more convenient for consumers. By 1994, the state's overall recycling rate for beverage containers had reached 79 percent. Recycling rates varied for different container types, from 82 percent for aluminum containers to 17 percent for bimetal containers (metal containers made primarily of steel).
The program is funded by the California Beverage Container Recycling Fund (CBCRF). In 1994-95, about $333 million in revenues were generated. The fund derives its revenues primarily from the 5 cent per beverage container refund value paid by consumers when they purchase beverages. The fund also receives processing fees from container manufacturers. These fees are paid by manufacturers for every eligible beverage container they sell in California. These revenues, in turn, are used to pay recyclers, who accept empty beverage containers from consumers and pay a refund value, to offset their net cost of recycling beverage containers.
Money in the CBCRF is first used to pay refunds to consumers when they recycle their containers, processing payments and administrative fees to processors; cover the costs of the DOC's program administration; and provide a reserve for contingencies. Any remaining funds available in the CBCRF are then used for various purposes as specified by statute, including payment of handling fees and grants to nonprofit organizations and governmental entities for litter abatement, recycling, and related activities.
When people do not recycle containers for which a refund value has been paid, these funds accumulate in the CBCRF. In past years, these reserves were more than adequate to cover other recycling expenditures specified by statute. As a result, by the end of 1994-95, the CBCRF had an accumulated reserve of approximately $100 million.
Recent legislation will reduce the reserve in the California Container Beverage Container Recycling Fund over future years, as well as limit funding available to the Department of Conservation for administration of the Beverage Container Recycling Program.
The BCRP was significantly modified, effective January 1, 1996, by Ch 624/95 (SB 1178, O'Connell). Figure 11 summarizes the key fiscal provisions of Chapter 624.
Among other things, Chapter 624 continues payments of $18.5 million annually from January 1, 1996 to January 1, 1999 to recyclers at supermarket sites. It also increases the amount made available for payments to operators of curbside recycling programs and increases payments to recyclers, while reducing the fees paid by container manufacturers. Chapter 624 also places a cap on the amount that the DOC may spend for administration of the program, so that by 1998-99, total support would be about 81 percent of the amount appropriated in the 1995-96 Budget Act, or about $21.4 million.
Chapter 624 Will Reduce the CBCRF Reserve. One impact of the changes instituted by Chapter 624 will be to reduce the reserve in the CBCRF over future years. This is because Chapter 624 will reduce the amount of revenues deposited in the CBCRF while increasing annual payments to recyclers and grant funding for various recycling programs.
Beverage Container Recycling Program
Key Fiscal Provisions of Chapter 624, Statutes of 1995
|Handling Fees--provides $18.5 million until January 1, 1999 to be paid to recyclers at supermarket sites.|
|Curbside Program Payments--provides $5 million annually until January 1, 1999 to be paid to operators of curbside recycling programs.|
|Processing Fees--reduce payments from:|
|Processing Fee Payments to Recyclers--increase to about $44.8 million annually.|
|New Processing Fee Accounts--creates new accounts for plastic containers and bimetal containers.|
|Department of Conservation Administration--limits annual expenditures to:|
Chapter 624 Reduces Funding for Program Administration. In compliance with Chapter 624, the proposed budget reflects a decrease in funding for the DOC's administrative support. Specifically, the budget reflects a reduction of $1.3 million for the current year and proposes a decrease of $1.7 million in 1996-97--to $24 million. The department proposes to implement the reduction in both years primarily by decreasing its expenditures for program outreach and public relations. For instance, the department proposes to reduce funding for these activities from $3.1 million in the current year to $2.1 million in the budget year.
The department indicates that as it reduces administrative support in future years, in accordance with Chapter 624, funding may not be adequate to support current program activities. Specifically, the department indicates that future reductions in administrative support may impact mandated activities. These activities include calculating processing fees and payments and auditing their payment; certifying processors and recyclers; administering grants; and providing technical assistance to recyclers.
We recommend using $1,061,000 from the Soil Conservation Fund (SCF) in lieu of a like amount from the Environmental License Plate Fund for agricultural land mapping and grants to protect agricultural land because the SCF is the appropriate fund source for the activity. We further recommend that the Legislature (1) adopt Budget Bill language that authorizes the SCF to be used for programs related to the conservation of agricultural land, and (2) enact legislation to make the SCF available for these programs. (Reduce Item 3480-001-0140 by $61,000; increase Item 3480-001-0141 by $61,000.)
The department administers programs related to the conservation of agricultural land. These programs are funded from a combination of General Fund, the SCF, and other sources (primarily federal funds and reimbursements). Figure 13 identifies the three programs dealing with protection of land resources, their funding sources, and the budget proposals for these programs for 1996-97.
Open-Space Subvention Program. Under the California Land Conservation Act of 1965 (Williamson Act), landowners may enter into ten-year contracts with local governments which restrict the use of property to open-space and agricultural purposes. To compensate the landowners for the restricted use of their property, the property is assessed at less than market value for property tax purposes. In turn, the state compensates the counties for the loss of property tax revenues by providing counties with General Fund subvention payments. Currently, about 16 million acres--roughly half--of the state's total agricultural lands are enrolled in contracts. The DOC reviews and verifies subvention claims; analyzes land use related to preservation of agricultural land and reports to the Legislature; and provides assistance to local governments in implementing the program.
Contracts are automatically renewed unless the landowner or local government files for nonrenewal. Landowners may also petition to cancel contracts prior to contract expiration and must pay a fee for any contract cancellation. In 1992-93, cancellation fee revenues to the state were $3.6 million. Current law requires that of these revenues, $985,000 or any other amount approved in the Budget Act be transferred to the SCF for specified purposes. The remaining fee revenues accrue to the General Fund.
Farmland Mapping and Monitoring and Soil Resource Protection Programs. In addition to the Open-Space Subvention Program, the DOC is also responsible for mapping and monitoring the conversion of farmland in the state. In addition, it provides technical support and advisory services to locally formed Resource Conservation Districts (RCD) on soil conservation. These activities are funded primarily from the SCF.
Budget-Year Proposal. As Figure 13 indicates, for 1996-97, the budget requests additional funding for the DOC's agricultural land conservation programs as follows.
Proposed Program Expansions Have Merit but Mapping and Stewardship Activities Should Be Funded From Cancellation Fees. Our review indicates that the request to expand land resource conservation activities has merit. Our review further indicates that the request to use General Fund support for subvention audits is appropriate because the subventions are paid from the General Fund. Similarly, the proposed use of the ELPF for grants to RCDs is also appropriate, since the grants are intended to help enhance and restore fish and wildlife habitat and related water quality--an eligible use of the ELPF.
Department of Conservation
Land Resource Protection Programs
Fund Sources and 1996-97 Augmentations
|Program||Fund Sources|| 1996-97
|Open-space subvention administration||General Fund||
|Farmland mapping and monitoring||Soil Conservation Fund Reimbursements|
|Soil resource protection||Soil Conservation Fund|
It is therefore appropriate, in our view, that these fee revenues be used to support activities that promote farmland protection, such as mapping of farmland under contract and training of local governments in the implementation of the Williamson Act. Doing so would also be consistent with current statutory policy of using cancellation fees to fund the state's land conservation programs. For instance, under existing law, money in the SCF supports the DOC's Farmland Mapping and Monitoring and Soil Resource Protection programs, to protect agricultural lands and other open-space lands and manage water and soil resources.
Accordingly, we recommend using the SCF in lieu of the ELPF for agricultural mapping activities and for grants to protect agricultural lands. Because current law does not explicitly authorize the use of the SCF revenues for these activities, we further recommend that the Legislature (1) adopt Budget Bill language to authorize the use of the SCF for programs related to the conservation of agricultural land, and (2) enact legislation to make the SCF available for these programs on an ongoing basis.
The California Department of Forestry and Fire Protection (CDFFP), under the policy direction of the Board of Forestry, provides fire protection services directly or through contracts for timberlands, rangelands, and brushlands owned privately or by state or local agencies. In addition, the CDFFP (1) regulates timber harvesting on forestland owned privately or by the state and (2) provides a variety of resource management services for owners of forestlands, rangelands, and brushlands.
The budget requests a total of $409 million for support of the CDFFP in 1996-97, including the General Fund ($280.4 million), various other state funds ($25.1 million), and federal funds and reimbursements ($103.5 million). This is an increase of $13.6 million, or 3.4 percent, from estimated current-year expenditures. The increase is due primarily to the consolidation in 1995 of the State Fire Marshal with the department.
We recommend that the request for $800,000 and 9 positions to expand the department's pre-fire management initiative be denied because the department has not yet completed a pilot program to test the initiative or evaluated the results of that pilot. (Reduce Item 3540-001-0001 by $800,000).
In the current year, the department is redirecting--from existing resources--$453,000 to develop and implement a new pre-fire management initiative. This initiative is intended to coordinate fire prevention, fire control and fuel reduction efforts in order to reduce wildland fire costs and losses to the public. The department also plans to redirect $412,000 in the budget year to implement the initiative. In both 1995-96 and 1996-97, redirected funds will be used to implement the initiative in three test ranger units. (There are 22 ranger units statewide.) Figure 14 shows the tasks to be completed in 1995-96 and 1996-97 with the redirected funds.
As Figure 14 (see next page) shows, the department plans to complete pre-fire management plans in the three test ranger units by July 1997. While the department plans to implement those plans in 1997-98, it has not provided a schedule for their implementation.
Pre-Fire Management Initiative--
Tasks to Be Completed
With Existing Funding
|Train three ranger units' staff||July 1996|
|Assist ranger unit staff to validate field data||January 1997|
|Complete ranger unit pre-fire management plans||July 1997|
Initiative Will Require Significant Long-Term Costs. The department also plans to request additionalfunds to implement the initiative in each year through 1999-2000, at which time it will be operating statewide in all 22 ranger units. As illustrated in Figure 15, this will bring annual funding for the initiative to $2.4 million in 1999-2000, for total funding of $8.4 million for the period 1995-96 through 1999-2000.
Criteria for Evaluating Pilot Results. While we think that opportunities to reduce the cost and damages associated with wildland fires ought to be explored, we think that the department's proposal to expand the pre-fire management initiative is premature and that the initiative should not be expanded before implementation in the test ranger units has been completed. This is because expansion should be based on whether the results of implementation in the pilot units demonstrate that the initiative is achieving its objectives. Below, we offer some criteria for the Legislature to consider in evaluating the results of the initiative, and determining whether the program merits additional funding.
Recommendation. We recommend that the Legislature deny $800,000 and 9 positions requested to expand the department's pre-fire management initiative because the department has not yet completed implementation of the initiative in three test ranger units, or evaluated the results of the initiative in those test units. The Legislature should evaluate those results in determining whether the program merits additional funding.
We recommend that the department report at budget hearings on the status of its plan to reduce its expenditures on telecommunications, and the impact of these reductions on the department's fire control program.
In 1994-95, the CDFFP was provided $3 million from the General Fund to replace a portion of the department's telecommunications equipment, including radio equipment and emergency command center consoles at various locations around the state, because its communications system had seriously deteriorated. This was the first year of a ten-year, $62 million plan to replace equipment, eliminate a backlog in equipment replacement, and provide limited expansion for the department's telecommunications system (to meet increased demands on the system). The plan called for replacement expenditures of $6.5 million in 1995-96 and $6.5 million in 1996-97.
Current-Year Funding Falls Short of Plan. In the current year, telecommunications expenditures are estimated to be about $1.4 million, about $5.1 million below the level required by the CDFFP's plan. This is because the department requested only about $3 million for 1995-96. In addition, the department reduced telecommunications expenditures further to implement expenditure reductions required by Control Sections 3.75 and 3.90 of the 1995 Budget Act. Figure 16 shows that Control Section reductions total $3.1 million in 1995-96, with a significant portion--about $1.6 million or 52 percent of the total reduction--made in telecommunications and mobile equipment.
California Department of Forestry And Fire Protection
General Fund Reductions
Per 1995 Budget Act Control Sections
1995-96 and 1996-97
|Telecommunications and mobile equipment||1,596||2,036|
|Other fire protection programs||168||168|
|Resource Protection and Improvement Program||322||404|
Reduction Plan Not Yet Developed. The department indicates that it is currently developing a long-term plan for reducing expenditures for telecommunications and mobile equipment. According to the department, however, the reduction in spending for telecommunications equipment proposed for 1996-97 will severely impact its ability to replace outdated telecommunications equipment, potentially causing system failures and jeopardizing public and firefighter safety. Given the importance of telecommunications to the department's fire control program, we recommend that the department report at budget hearings on why it chooses to reduce telecommunications replacement expenditures (in favor of other General Fund expenses), the status of its plan to reduce its expenditures on telecommunications, and the impact of these reductions on the department's fire control program.
The State Lands Commission (SLC) is responsible for the management of lands that the state has received from the federal government. These lands total more than four million acres and include tide and submerged lands, swamp and overflow lands, the beds of navigable waterways, and vacant state school lands.
The budget proposes total support of the commission in 1996-97 of $17.1 million, including the General Fund ($9.6 million), the Oil Spill Prevention and Administration Fund ($4.9 million), and reimbursements ($2.7 million). This is a decrease of $155,000, or 0.9 percent, from estimated current-year expenditures.
We recommend that the Legislature transfer $15.6 million of the reserve in the School Land Bank Fund to the General Fund, in order to provide the Legislature with maximum flexibility in the use of these funds. So that the Legislature may reevaluate the fund's statutory purpose and the best use of its revenues, we further recommend that the State Lands Commission report at budget hearings on its long-term plan for using these revenues under current law.
The SLC manages lands that were given to the state by the federal government in order to help support public education. Some of these lands are leased for commercial purposes (such as mining and oil drilling). Lease revenues (royalties) are deposited in the State Teachers' Retirement Fund (STRF) after the SLC recovers its costs.
Under the School Land Bank Act of 1984, the commission may also sell school lands and purchase other properties in order to consolidate school land parcels into contiguous holdings. The purpose of consolidating school lands is to facilitate the effective management of those lands for the purpose of generating revenue for the STRF. Revenues from land sales are deposited in the School Land Bank Fund (SLBF), and are in turn available to the SLC for property purchases.
Significant Reserve in the SLBF. The SLBF has built up a significant reserve in recent years. This is because revenues from the sale of school lands have exceeded the SLC's expenditures from the fund. As Figure 17 shows, the fund will have an estimated reserve of $15.6 million at the end of 1995-96. By the end of 1996-97, the reserve is projected to increase to $18.4 million.
The SLC staff have considered purchasing various commercial real estate properties, which is consistent with the commission's strategy of using revenues from school land sales to purchase income properties. At the time this Analysis was prepared, however, commission staff had found no commercial properties that met their investment criteria, and thus had made no investments. Consequently, the budget proposes no expenditures from the SLBF in 1996-97.
Legislature Should Reevaluate the Purpose of the SLBF. In view of the difficulties that the SLC is encountering in finding suitable commercial properties for investment and the significant reserve accumulated in the fund, we think the Legislature should reevaluate the statutory purpose of the SLBF. Below we list some purposes that the Legislature might want to establish for the use of monies in the fund.
Recommendation. Because the commission has not allocated the funds, we recommend that $15.6 million of the reserves in the SLBF be transferred in 1996-97 to the General Fund, in order to provide the Legislature with maximum flexibility in the use of these funds. So that the Legislature may reevaluate the fund's statutory purpose and the best use of its revenues in the long run, we further recommend that the SLC report at budget hearings on its long-term plan for using these revenues under current law.
The Department of Fish and Game (DFG) administers programs and enforces laws pertaining to the fish and wildlife resources of the state. The Fish and Game Commission sets policies to guide the department in its activities, and regulates the sport taking of fish and game. The DFG currently manages about 160 ecological reserves, wildlife management areas, habitat conservation areas, and interior and coastal wetlands throughout the state.
The budget proposes total expenditures of $165 million for support of the DFG in 1996-97. This is an increase of $1.5 million, or 0.9 percent, from estimated current-year expenditures.
We withhold recommendation on $74.3 million from the Fish and Game Preservation Fund (Item 3600-001-0200) because the department indicates that it will propose a significant amendment to the budget.
The Fish and Game Preservation Fund (FGPF) accounts for a significant portion--about 45 percent--of the DFG's proposed support level for 1996-97. This fund receives revenues primarily from the sale of hunting and sportfishing licenses, commercial fishing permit fees, landing taxes, and environmental review fees paid by development project applicants. The budget requests $74.3 million from the FGPF for support of the department in 1996-97.
Budget Request Will Be Significantly Amended. The department and the Department of Finance (DOF) indicate that they will propose to amend the department's budget in the spring of 1996. Specifically, they will submit to the Legislature a Finance Letter which will propose a reorganization of the department in the budget year. The DFG indicates that it will propose to consolidate (1) the number of regional offices from five to three and (2) programs to better focus on habitat protection.
Because details of the reorganization are not yet available, we are not able to provide specific comments on the plan's proposals. Below, we offer some criteria for the Legislature to consider in evaluating the forthcoming proposal, once submitted by the DOF and the DFG.
Withhold Recommendation. Pending receipt of the proposal and related budget information, we withhold recommendation on $74.3 million from the FGPF proposed for support of the department.
We recommend that $600,000 requested for local assistance grants and $4.4 million for land acquisition for the department's Natural Community Conservation Planning pilot program be denied because proposed changes in the program's scope and purpose require policy review by the Legislature. (Reduce reimbursements in Item 3600-101-0200 by $600,000 and reduce Item 3640-301-0262 by $4.4 million.)
Chapter 765, Statutes of 1991 (AB 2172, Kelley)--known as the Natural Community Conservation Planning (NCCP) Act--authorized the department to assist public and private agencies in preparing and implementing natural community conservation plans. These plans are intended to facilitate economic development, while protecting wildlife and plant species and their habitat.
The NCCP Act Pilot Program--Success Not Yet Established. The administration initiated the NCCP program in southern California in 1991 as a pilot program, and indicated that it would be expanded statewide if it proved successful. Until now, however, the administration had not proposed to expand the implementation of the program. This is because, in part, the department has yet to evaluate the pilot program and its ultimate success is still uncertain. The program has received support, however, from a range of entities including local government, developers, and environmental groups.
Administration Now Proposes to Significantly Expand Program's Scope. For 1996-97, the administration is proposing to significantly expand the program's scope and the role of the state in its implementation. Specifically, the administration indicates that the establishment and management of large habitat preserves is an essential component for successful implementation of the NCCP program, and proposes a significant state role in the funding and establishment of these preserves. In 1996-97, the budget proposes $600,000 for grants to local governments for preserve management and monitoring and $4.4 million for land acquisition. (The land acquisition amount is shown in the Wildlife Conservation Board, Item 3640.)
Based on our review, we conclude that Chapter 765 does not authorize the state, as part of its role in the NCCP implementation, to provide grants to acquire land. Furthermore, we have the following concerns with the department's proposal.
Request Raises Significant Policy Issues. The administration's proposal raises significant issues which the Legislature should review. Pending such review, and legislative direction on how the pilot program should proceed, we recommend that the request for $600,000 for local assistance grants and $4.4 million for land acquisition from the HCF for the department's NCCP pilot program be denied.
Although the department has made progress in increasing the share of funding that comes from reimbursements, the Natural Community Conservation Planning program is still not being funded in accordance with statute. We recommend that the department report at budget hearings on the prospects of it being reimbursed for its costs under the program.
One underlying premise of the NCCP program is that landowners benefit from the program because it provides greater certainty about where and how their development projects may occur. This is because the program is designed, in the long run, to shorten the California Environmental Quality Act (CEQA) process for individual development projects. Chapter 765 requires that the department be fully reimbursed for the costs it incurs in participating in the development and implementation of natural community conservation plans.
Some Progress, but Reimbursements Fall Short. As we observed in our Analysis of the 1995-96 Budget Bill, it makes sense for project applicants to pay for the costs of developing plans, because in the long run, those plans will shorten the environmental impact review (CEQA) process for individual projects, and facilitate development that is compatible with habitat protection. Indeed, program staff cite increased development in areas enrolled in the NCCP program as one indication that the program is achieving its objectives with respect to facilitating development.
For 1996-97, the budget requests for the pilot program $1.5 million and 16 positions to be continued on a limited-term basis. As Figure 18 shows, reimbursements will account for only $526,000--about 34 percent--of the program's total 1996-97 funding. (Federal funds will provide $367,000, about 24 percent of total funding, with state funds providing the balance.)
Department of Fish and Game
Natural Community Conservation Planning Program
(Dollars in Thousands)
|Fund Source||Amount||Percentage of Total|
|Federal trust fund||367||24.0|
|Fish and Game Preservation Fund||561||36.6|
The department's work related to the Cantara spill, including restoration project implementation and monitoring, is projected to continue until 1999-2000. Funding will be provided by settlement funds received from the Southern Pacific Transportation Company and other litigants.
Background. The DFG is the lead agency for response to a July 1991 chemical spill, known as the Cantara Loop spill, that damaged aquatic life along 45 miles of the Sacramento River above Lake Shasta. The spill occurred after a Southern Pacific train derailed at the Cantara Loop bridge in Siskiyou County spilling the chemical metam sodium directly into the river. To date, the DFG and other state and federal agencies have incurred costs for spill cleanup and response, damage assessment, and litigation totaling about $13 million.
Total Settlement Is $38 Million. The state reached a settlement with Southern Pacific Transportation Company and other parties involved in litigation surrounding the spill in March 1995. However, that settlement was challenged by a group of environmental and fishing organizations. In January 1996, litigation ended and settlement funds became available for expenditure. In accordance with the terms of the settlement, federal and state agencies will begin to receive settlement funds totaling $38 million through 1999-2000. Most of the settlement funds will be paid in the current year. Figure 19 shows the distribution of funds under the terms of the settlement agreement.
Distribution of Cantara Spill Settlement Funds
|1995-96||Total Through 1999-2000|
|Cantara Trustee Council||$1.8||$14.0|
|Repayments to state and federal agencies||11.5||12.5|
|Department of Fish and Game future response pool||3.0||3.0|
|Department of Fish and Game Cantara monitoring and restoration||3.0||5.0|
|Fish and Game Preservation Fund||2.0||2.0|
The Department of Parks and Recreation (DPR) acquires, develops, preserves, interprets, and manages the natural, cultural, and recreational resources in the state park system and in the State Vehicular Recreation Area and Trail System. In addition, the department administers state and federal grants to cities, counties, and special districts that help provide parks and open-space areas throughout the state.
The state park system consists of 265 units, including 38 units administered by local and regional park agencies. The system contains approximately 1.3 million acres of land with 280 miles of ocean and 811 miles of lake, reservoir, and river frontage. In 1996-97, about 70 million visitor-days are anticipated at state parks and beaches operated by the department, up from an anticipated 66 million in 1995-96.
The budget proposes expenditures totaling $201.4 million for departmental support and local assistance in 1996-97. This is a decrease of $22.1 million, or 9.9 percent, from estimated current-year expenditures. Of the total expenditures, the budget requests $180.6 million for support of the department, which is a net decrease of $4.7 million, or 2.5 percent, from the estimated current-year level. In addition, the budget proposes a total of $20.8 million (from special and federal funds) for local assistance grants. This is a decrease of $18.4 million, or 47 percent, below estimated current-year spending for local assistance. This decrease reflects primarily a depletion of bond funds for local park development. The budget also proposes $18.3 million for capital outlay expenditures, including $5.5 million from the General Fund. (Please see our analysis of these expenditures in the Capital Outlay section of the Analysis.)
As discussed in the Crosscutting Issues section in the State Administration chapter, the department is one of five departments selected by the administration for a pilot project in performance-based budgeting.
The budget proposes to replace special fund support of the department with additional General Fund support and increased revenues.
Department's General Fund Support Has Fallen. From 1990-91 to 1995-96, General Fund support for the department fell from $70.9 million to $48 million, a decrease of about $22.9 million or 32 percent. This decrease has left the department increasingly reliant on other funds for its support. In 1993-94, for example, $8.9 million was transferred from the Off-Highway Vehicle Trust Fund into the State Parks and Recreation Fund (SPRF) for department support. In 1995-96, $19.4 million was transferred from the California Beverage Container Recycling Fund (CBCRF) to the SPRF for support of the department.
Budget Proposal. To replace CBCRF funding in 1996-97, the budget proposes to increase General Fund support for the DPR over the 1995-96 level by $16.4 million, to $65.8 million. This augmentation is intended to provide the department with a stable funding level in 1996-97 and allow it to develop a long-term plan to stabilize funding. The plan includes the following components.
We recommend that the department report at budget hearings on its proposal to increase revenues, reduce operations, and achieve savings in 1996-97, and its expenditure priorities in the event that revenues fail to meet projections.
At the time this Analysis was prepared, many elements of the department's plan to increase revenues, reduce operations, and operate more efficiently over future years were still being developed. Below, we discuss in more detail each component of the department's funding stabilization plan and some concerns that the plan should address.
Department Has Typically Overestimated Revenues. The department expects to increase SPRF revenues in 1996-97, by among other things, increasing park and beach fees. Park and beach fee revenues account for the bulk of SPRF revenues. In 1994-95, about $45.6 million (83 percent) of SPRF revenues were from service fees. However, our review indicates that revenue increases projected by the department may not materialize. As Figure 20 shows, park service fee revenues in recent years have fallen short of the department's projections by an average of $9.3 million, or 16 percent, annually. Based on this experience, and given no change in the department's methodology for projecting revenues, there is no reason to assume that the department's projections for 1996-97 will be more accurate.
Current-Year Revenues Are Falling Short of Projections. This overestimation continues in the currentyear. Specifically, actual revenues have fallen significantly short of projections in two of the first six months of 1995-96. As a result, actual revenues were $2.3 million, or about 8.5 percent, below projected levels for July through December 1995.
If revenues to the SPRF do not meet projections in 1996-97, the department will either have to rely on alternative fund sources or decrease expenditures. The department's funding plan should identify expenditure priorities in the event that revenues fall short of projections.
Reduction in Operations Not Yet Defined. At the time this Analysiswas prepared, the department had not identified which park units it would recommend to be privatized, surplused, or converted to local control. The department plans to complete this list by June 1996.
In "Making Government Make Sense" (please see our 1993-94 Budget: Perspectives and Issues, pages 111-132), we described a model in which duties are assigned to the state based primarily on whether those duties represent truly statewide functions and state control is necessary to ensure adequate service levels. Consistent with this framework, we think that the department should assess whether ownership and management of particular park units should be the responsibility of the state, as opposed to local government or nonprofit or for-profit organizations. We also think it is important that the department's funding plan clearly identify not only the particular units proposed for privatization, surplusing, and conversion, but also the department's criteria in selecting those units.
Operational Cutback Resulted in Deferred Maintenance Backlog. In the past, the department has managed to sustain budget reductions and revenue shortfalls without having to significantly reduce service levels, such as closing parks. The department has been able to do this in part by deferring expenditures, such as operations and maintenance. The department indicates that the current backlog of deferred maintenance is about $35 million.
The department does not currently have a multiyear plan to address this backlog, but indicates that it will develop such a plan. In our view, the development of such a plan is critical. This is because the department's ability to continue to defer these costs is limited and deferrals do not provide a long-term solution to the department's funding problems. Moreover, continuing to defer maintenance will likely result in degradation of park units and ultimately have a direct impact on the department's ability to accomplish its mission. Deferring maintenance will also result in higher costs at a later time to fully replace or rehabilitate structures or facilities that have not been properly maintained.
Recommendation. The department faces the long-term challenge of establishing stable sources of support funding and a level of operations commensurate with that level of funding. Many of the details of the department's plan to stabilize its support funding are still being developed. Accordingly, we recommend that the department provide at budget hearings further details on its proposal to increase revenues, reduce operations, and achieve savings in 1996-97, and report on its expenditure priorities in the event that revenues fail to meet projections.
We recommend that $2.8 million requested for department support of park units that have boating-related activities be funded out of the Harbors and Watercraft Revolving Fund (HWRF) instead of from the General Fund, as this is an appropriate use of the HWRF. We further recommend that the Legislature convene a task force to assess long-term demands on the state park system and the appropriate level of funding and mix of fund sources for support of the system. (Reduce Item 3790-001-0001 by $2,800,000 and create new Item 3790-001-0516 for $2,800,000.)
The department's funding stabilization proposal presents the Legislature with important decisions--both long-term and short-term--about the sources of funding, scope of operation, and the future development of the state parks system.
Alternative Sources of Department Funding. In the short term, as we discuss above, the department's proposal relies primarily on an increase in support from both the General Fund and the SPRF revenues (such as from increased park service fees). We think it is important that the Legislature review all options in assessing this proposal. Accordingly, we discuss below some special funds the Legislature could draw on for the department's support in lieu of the requested funds.
In addition to using state parks to protect the state's natural resources and provide recreational opportunities, the Legislature has also expressed interest in using the state park system to accomplish other policy objectives as well. For example, in 1995, the Legislature passed AB 324 (Cortese) which would have created a task force to examine potential uses of state and local park and recreation facilities and staff in providing youth services. (The Governor vetoed this legislation.) Accordingly, we recommend that the task force also be charged with assessing the potential role of the state parks system in achieving policy objectives outside of its traditional responsibilities, such as reducing crime and educating young people.
Summary. In both the long term and short term, we think it is important that the development, operation, and funding of the state park system be based on clearly defined legislative priorities. Accordingly, we recommend that $2.8 million requested for department support of park units that have boating-related activities be funded out of the HWRF instead of from the General Fund, as this is an appropriate use of the HWRF under existing law. We further recommend that the Legislature convene a task force to assess (1) the long-term demands on the state park system, (2) the appropriate level and mix of funding for the system's support, and (3) the role of the state parks system in achieving policy objectives outside of its traditional responsibilities.
The Santa Monica Mountains Conservancy (SMMC) purchases lands and provides grants to state and local agencies and nonprofit organizations to conserve open space and improve recreational opportunities in the Santa Monica Mountains Zone and the "Rim of the Valley Corridor" adjacent to the San Fernando Valley. It promotes these objectives by (1) acquiring and consolidating subdivided land, (2) acquiring land for eventual sale or transfer to other public agencies, (3) creating buffer zones surrounding federal and state park sites, (4) restoring natural resource areas, and (5) implementing programs to improve access from surrounding inner city areas.
The budget requests a total of $580,000 from the General Fund ($96,000), the Santa Monica Mountains Conservancy Fund (SMMCF--$444,000) and reimbursements ($40,000) for support of the conservancy in 1996-97. Funds in the SMMCF primarily come from reimbursements from the Mountains Recreation and Conservation Authority (MRCA) and sales of conservancy property. The MRCA is a joint powers authority made up of the conservancy and two local recreation and park districts in the Santa Monica Mountains area. Conservancy staff indicate that by receiving General Fund support, the SMMC is entitled to receive free legal representation from the Attorney General, up to a specified allotment of hours, for which the conservancy would otherwise have to pay.
The budget proposes no capital outlay expenditures by the conservancy in 1996-97, down from estimated capital outlay expenditures of $1.1 million in 1995-96 and $10 million in 1994-95. Under Proposition 117, the California Wildlife Protection Act of 1990, the conservancy received $10 million annually for capital outlay for five years beginning in 1990-91. The final year of this $10 million annual allocation was 1994-95.
We recommend that the proposed appropriation for $96,000 from the General Fund to support the conservancy be deleted because the request is inconsistent with legislative intent that beginning July 1, 1995, no General Fund money be appropriated for support of the conservancy. We further recommend that the conservancy report at budget hearings on its efforts over the last three years to reduce its reliance on General Fund support. (Eliminate Item 3810-001-0001 for $96,000.)
Proposal to Use General Fund Is Inconsistent With Legislative Direction. Chapter 1304, Statutes of 1992 (AB 3248, T. Friedman) eliminated the July 1, 1995 "sunset" requirement in law for the SMMC, thereby permanently establishing the conservancy. However, Chapter 1304 also declared legislative intent that beginning July 1, 1995, no money should be appropriated from the General Fund for the support of the conservancy. Instead, other funding sources should be utilized, including the SMMCF, other special funds, donations, and local funding sources. Additionally, Chapter 1304 specified that in order to ensure an orderly transfer of funding sources, the conservancy should reduce operations to compensate for the loss of General Fund support or seek additional non-General Fund sources of revenue.
Proposed Level of Support Funding Not Justified by Capital Outlay Workload. The budget proposes nocapital outlay expenditures by the conservancy in 1996-97. This, as indicated above, is because beginning in 1995-96, the conservancy no longer receives funds allocated by Proposition 117. In past years, developing and implementing capital outlay projects (such as acquiring and restoring open space) accounted for most of the conservancy's workload. Relatively little of the conservancy's support costs have been for ongoing property maintenance. However, the level of support funding proposed for 1996-97 has not been adjusted to reflect this decline in capital outlay workload. Instead, proposed support funding is at the same level of funding as estimated current-year expenditures. Given the significant decline in the conservancy's capital outlay in both 1995-96 and 1996-97 relative to prior years, we do not believe that the proposed level of support funding is justified.
Recommendation. Given legislative direction and the decreased workload projected for 1996-97, we do not believe that the request for $96,000 from the General Fund for conservancy support is justified. Accordingly, we recommend the elimination of $96,000 in General Fund support for the conservancy. We further recommend that the conservancy report at budget hearings on its efforts over the last three years to reduce its reliance on General Fund support.
The Department of Water Resources (DWR) protects and manages California's water resources. In this capacity, the department implements the State Water Resources Development System, including the State Water Project (SWP). The department also maintains public safety and prevents damage through flood control operations, supervision of dams, and safe drinking water projects.
The budget proposes total expenditures of $825.2 million in 1996-97, a decrease of $151 million, or 16 percent, from estimated current-year expenditures. This reduction is due to a decrease in capital outlay expenditures, as portions of the SWP are completed.
Total expenditures include $695.5 million financed with the SWP funds and $49.3 million in bond funds for safe drinking water loans and grants. Appropriations in the Budget Bill provide the remaining $80.4 million, of which $16.2 million is from the General Fund. The General Fund amount is $141,000, or 0.9 percent, above the estimated current-year General Fund expenditures.
The California Water Fund has provided an increasing share of support for the department in recent years, which has reduced the availability of the fund for statutory purposes. In 1996-97, the budget proposes to increase this share still further.
The California Water Fund (CWF), created in 1959, derives its revenues primarily from contractors who pay for the delivery of water from the SWP. Under existing law, the CWF provides funding for construction of the SWP and for various statutory uses, including the following:
Use of CWF For Department Support Has Reduced Availability for Statutory Purposes. This shift from the General Fund to the CWF for support of the department has reduced the availability of the CWF funds for statutory purposes. For example, Chapter 716 expressed the Legislature's intent that a total of $65 million be transferred from the CWF into the Environmental Water Fund (EWF) from 1990-91 through 1998-99, for expenditure on environmental projects and programs. However, through 1995-96, the transfers to the EWF have been less than required by a total of $21.2 million, as shown in Figure 22.
California Water Fund Transfers
To the Environmental Water Fund
1991-92 Through 1995-96
|Amount to be transferred under |
Ch 716/89(AB 1442, Baker)
|Amount actually transferred||18.8|
To free up CWF funds for department support, the budget proposes to fund some statutory purposes of the CWF from alternative sources instead. For example, the budget requests $1 million for the retirement of irrigated agricultural land in the San Joaquin Valley not from the CWF, but from the Habitat Conservation Fund. The budget also proposes to replace $2.8 million of the CWF funding for Delta levees subventions with funds from the Harbors and Watercraft Revolving Fund (HWRF). (We discuss these requests separately later in this write-up.) However, the budget makes no proposal to reduce the amount--$21.2 million--due to the EWF under Chapter 716.
We recommend that $2.8 million requested for local subventions for Delta flood protection and control be funded out of the California Water Fund (CWF), in accordance with statute, instead of the Harbors and Watercraft Revolving Fund. We further recommend that $2.8 million requested from the CWF for departmental support be replaced with a like amount of General Fund. (Eliminate Item 3860-101-0516 [$2,800,000], increase Item 3860-005-0144 by $2,800,000, increase Item 3860-101-0176 by $2,800,000, reduce Item 3860-001-0144 by $2,800,000, and increase Item 3860-001-0001 by $2,800,000.)
Budget Proposes Harbors and Watercraft Funds for Delta Flood Protection. Current law--Ch 28/88 (SB 34, Boatwright)--declares the Legislature's intent to transfer $12 million annually from the CWF to the Delta Flood Protection Fund (DFPF) for Delta flood protection uses. For 1996-97, the budget proposes $9.1 million from the CWF and $2.8 million from the HWRF for the Delta flood protection and control subventions program.
Use of Harbors and Watercraft Funds Inconsistent With Statute. The department indicates that the HWRF funds will be used to repair and rebuild levies in the Delta, which will protect navigable waterways, watercraft harbored in the Delta, and public facilities such as marinas and harbors. Thus, according to the department, the use of the HWRF for Delta flood protection is justified.
However, our analysis indicates that under current law, the department is not eligible to use the HWRF funds for flood protection. This is because current law specifies that the HWRF funds are available upon appropriation to (1) the Department of Boating and Waterways for boating facilities development, boating safety, and boating regulation programs and (2) the Department of Parks and Recreation (DPR) for the operation and maintenance of units of the state park system that have boating-related activities.
Consistent with statutory direction, we think that the CWF ought to be used for Delta flood protection instead of the HWRF. Accordingly, we recommend that $2.8 million from the CWF rather than the HWRF be provided for Delta levee protection, in accordance with statute.
The DWR Support Should Be Shifted to General Fund. As we discuss in our write-up on the DPR (Item 3790), the budget proposes an augmentation in the DPR's General Fund budget of $16.4 million, but no funding from the HWRF, which is an appropriate fund source to support the DPR's boating-related activities and programs. In that item, we recommend that $2.8 million in HWRF be provided to the DPR in 1996-97, freeing up a like amount of General Fund monies. In turn, these General Fund monies could be used in lieu of CWF monies in this item to support the DWR. This shift would free up the CWF to support the Delta Flood Protection Program.
Summary of Fund Shift Actions. The purpose of our recommendation is to ensure that various funds are used more in accordance with their statutory purposes. The fiscal effect of our recommendations is summarized below:
We recommend that the department report at budget hearings on how it will achieve self-sufficiency in the San Joaquin Drainage Relief Program, in accordance with statute.
Chapter 959 established the San Joaquin Valley Drainage Relief Program, to encourage the retirement of irrigated land and help resolve subsurface drainage problems in the San Joaquin Valley. Under the program, the DWR is authorized to acquire and retire agricultural lands with poor drainage, and to market water that is conserved as a result of retirement of land to public agencies, nonprofit organizations, or water utilities. The DWR is required to ensure that retired lands are managed as wildlife habitat, wetlands, or nonirrigated agricultural land, and to coordinate with the Department of Fish and Game to ensure that adequate funds are available to manage those lands.
Under Chapter 959, funds from the sale of water are deposited into the San Joaquin Valley Drainage Relief Fund, which is continuously appropriated to the department for acquisition and retirement of additional agricultural lands, land management, and administrative costs. Chapter 959 required that the program become self-supporting when fully implemented.
Habitat Conservation Fund Provides Both Current-Year and Budget-Year Funding. In the current year, the first year of operation of the program, the DWR projects that it will spend $1 million in reimbursements, provided to the department by the Wildlife Conservation Board from the Habitat Conservation Fund (HCF), to acquire and retire agricultural lands. At the time this analysis was prepared, however, the department had not acquired any land, and consequently had not generated any revenues from the sale of water. In 1996-97, the budget proposes one position and $1.1 million, again from the HCF, to continue to acquire and retire agricultural lands.
The department indicates that it has undertaken preliminary analysis to determine the viability of the program as a self-supporting program. However, all funding for the program to date has been provided by the HCF. Because implementation of the program could entail significant costs, we think it is important that the Legislature be apprised of the program's status. Accordingly, we recommend that the department report at budget hearings on its plan to acquire irrigated land, the total estimated costs of land acquisition, and when the department anticipates the program will become self-supporting.
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