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 department proposes expenditures totaling $506.7 million in 2000-01, which represents an increase of $35.2 million, or 7.5 percent, above estimated current-year expenditures. About 91 percent of the department's proposed expenditures ($460.7 million) represent costs associated with the Beverage Container Recycling Program.
The department requests an augmentation of $5.6 million and 71 positions to accommodate its projected workload increases in the Beverage Container Recycling Program, which was recently expanded by legislation. We believe the department's estimates are too high, and that some proposed augmentations are premature. Accordingly, we recommend a reduction of $2.1 million. (Reduce Item 3480-001-0133 by $2.1 million.)
Background. California's Beverage Container Recycling Program (BCRP) is one of the nation's most innovativeand complexrecycling programs. In essence, the state requires that consumers pay the functional equivalent of a deposit when they purchase certain containers of specified beverages (primarily soft drinks, beer, and certain juices). This money (2.5 cents for most containers) is returned when the container is brought to a certified recycling center. However, the actual collection, transfer, and use of these funds, as well as associated subsidies and fees, is considerably more complicated. (We described some of these other facets of the program in our Analysis of the 1999-00 Budget Bill, pp. B-45--B-57.)
The details of the BCRP's requirements on manufacturers and recyclers have been statutorily changed every few years since the program began in 1986. The outward structure of the program encountered by consumers, however, has undergone far fewer modifications. This changed with Chapter 815, Statutes of 1999 (SB 332, Sher). The most notable change is the inclusion of many new types of beverages under the program, as shown in Figure 1.
| Figure 1 | |
| Types of Beverages Subject to
Beverage Container Recycling Program | |
| Prior to Chapter 815 | Added by Chapter 815 |
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In addition, Chapter 815 made other significant changes to the way the program is administered. Major changes include:
Effect on Recycling Rates and Program Funding. While Chapter 815 increases the number of beverages that fall under the program (DOC estimates a 15 percent increase), it is not designed to significantly increase the proportion of eligible containers that are recycled. In fact, we anticipate that the overall recycling rate for containers subject to the program will actually decrease in the first year. This is primarily because consumers may not realize that the new beverages carry California Redemption Value (CRV) and therefore can be redeemed, particularly since the new containers are exempt from CRV labeling requirements in the first year.
In addition, we note that beverage container recycling rates have been decreasing in recent years. As Figure 2 shows, the rate for all CRV containers has dropped from a high of 82 percent in 1992 to 74 percent in 1998. (While DOC has not yet calculated the 1999 rate, we expect it will be similar to 1998's rate.)
The department estimates consumers will pay $420.2 million in CRV "deposits" in 2000-01. Because about a quarter of all eligible containers are not returned, over $100 million is not returned to consumers as CRV, and is retained by the department. This revenue is used by DOC for a variety of purposes. Approximately $20 million to $30 million is used to support DOC's cost of administering the program. Additional amounts are allocated as grants for litter reduction programs, subsidies to certain types of recyclers and manufacturers, administrative payments to various program participants, and other purposes. Many of these expenditures have increased as a result of Chapter 815. Still, the budget anticipates a fund balance of $77.8 million at the end of 2000-01.
The DOC's Proposal Is Based on Unrealistic Assumptions. The department requests an augmentation of $5.6 million and 71 positions to accommodate the programmatic changes made by Chapter 815. (Approximately 24 of the new positions would be limited-term.) This represents a 25 percent increase in the program's support budget, and a 39 percent increase in program staff. The department asserts an augmentation of this magnitude is needed to administer the program. However, we believe the proposal includes a number of unrealistic assumptions and unjustified expenses. For example:
Departmental Expansion Should Be Reduced. While we believe that the department will require additional resources to implement the provisions of Chapter 815, we believe the proposed magnitude of the augmentation is not justified. We believe it is based on unrealistic assumptions resulting in unreasonably high staffing levels. Moreover, we note that Chapter 815 requires a study, due December 1, 2000, to evaluate possible duplication and overlap between the activities of DOC's Division of Recycling and those of the California Waste Management Board. We believe it would be prudent to minimize the additional resources that are committed to the BCRP until this report is submitted, and the full impact of Chapter 815 can be better evaluated.
Until such an evaluation can occur, we believe it is reasonable that the budget of DOC's recycling division be increased by $3.5 million above current-year levels. This represents a 15 percent increase, which matches the estimated 15 percent increase in containers subject to the program. While we recognize this is an imperfect measure of increased workload, we believe it to be the most appropriate indicator currently available. Additionally, we believe that it will provide the department with adequate staff to carry out its expanded responsibilities. Accordingly, we recommend that Item 3480-001-0133 be reduced by $2,100,000.
The budget proposes an increase of $2.2 million to significantly expand an existing grant program to Resource Conservation Districts (RCDs). The proposed augmentation would be used primarily for the support of "watershed coordinators" within RCDs. We believe the purpose of the proposed grant is unnecessarily narrow. Moreover, we find that a large number of RCDs are not currently eligible to apply for grants. We therefore recommend that the Legislature deny the proposed augmentation. (Reduce Item 3480-001-0001 by $234,000 and reduce Item 3480-101-0001 by $2 million.)
Background. Resource Conservation Districts (RCDs) are community-based governmental organizations that promote soil conservation, watershed management, and land capability enhancement on private lands. There are currently about 100 RCDs in the state. Many RCDs fund their activities by imposing an assessment on the affected landowners. Examples of typical RCD work include developing and administering water and soil conservation projects, providing technical assistance to landowners, and establishing standards for range and tillage practices.
State law authorizes DOC to make grants to RCDs for any work they are authorized to undertake. Since 1998-99, the department has had baseline funding of $120,000 to make such grants.
Department Seeks Augmentation for Specific Grant Program. The department seeks an increase of $2.2 million, including $2 million in baseline funding for grants, and $234,000 and two positions to administer the new grant program. While the current ($120,000) grant funding can be used by RCDs for virtually any of their normal duties, the proposed grant money could be used only to establish a "watershed coordinator" within an RCD. It is not clear precisely what the role of these watershed coordinators would be, but the department suggests that they would serve as "contacts" that coordinate RCD activities with state and other entities. The department assumes that the $2 million would fund 50 watershed coordinator positions at $38,000 each.
Grant Program Unnecessarily Narrow. Chapter 994, Statutes of 1996 (SB 1268, Costa) authorized DOC to implement a grant program for RCDs. The legislation permits a broad range of activities to be covered by the grants, extending to "any work that [RCDs] are authorized to undertake, including, but not limited to, grants for watershed projects." Accordingly, the current grant program has funded a large variety of activities.
The proposed grant program is drawn much more narrowly, aimed only at funding "watershed coordinators." The department has not yet developed criteria for the new program. However, on the basis of information provided by the department, we believe the proposed grant program would do little to help fund the projects and technical assistance RCDs can provide within their jurisdictions. Instead, the program would only fund positions serving as liaisons between the RCD and other entities, primarily the state. We believe this is unnecessarily restrictive. While some RCDs are active and able to carry out many important functions, many others lack resources to have much impact. For this latter group, the addition of a watershed coordinator seems unnecessary, since there is little RCD activity to coordinate.
Many RCDs Are Not Eligible for Grants. Beginning January 1, 2000, Chapter 994 requires RCDs to meet a number of conditions in order to be eligible for grants. These requirements include the adoption of annual and long-range work plans, the convening of regular meetings according to certain open meeting requirements, and the securing of local support funding. Our review finds that fewer than 50 RCDs would be eligible to receive grants. Therefore, it is almost certain that the estimated 50 grants could not all be awarded.
Recommend Legislature Deny Augmentation. Based on our belief that the grant program is (1) unnecessarily narrow and (2) premised on an unrealistically high participation rate, we recommend that the proposal be denied.
As an alternative, if the Legislature wishes to make additional grant money available to RCDs, it could augment the current program by a modest amount above the $120,000 now available. However, we would recommend that any such increase be available for a broad range of activities by RCDs, and not merely to fund watershed coordinators. We believe it would be appropriate for the Legislature to express the intended use of any such funding in budget bill language.
The department proposes to spend $337,000 from the General Fund to convert its collection of faultline reports to a digital format. We believe this is unnecessary. Instead, individual reports should be converted if and when they are needed. We therefore recommend deletion of this funding.
In carrying out the Alquist-Prieto Earthquake Fault Zoning Act of 1972, DOC prepares fault evaluation reports (FERs), which detail the location and activity of certain earthquake faults. These reports, of which there are currently about 250, are used to direct the construction of new buildings away from hazardous faults. In addition, the act requires local governments to submit to DOC a copy of approved site-specific fault hazard reports, known as AP site reports. Developers prepare these reports, which document certain earthquake hazards, when they propose projects within fault zones defined by DOC. The DOC keeps these reports, which number about 4,500, on file for use by the public.
The department houses the FERs and AP site reports in its San Francisco regional office. Microfiche copies have been made for most of the FERs, and photocopies are maintained in DOC's Sacramento and Los Angeles offices. The department also makes photocopies of all reports available for purchase. The microfiche and photocopies are black-and-white, and thus do not reproduce color detail included on some of the maps. However, the department permits interested users to make color copies of maps off-site.
Department Proposes to Digitize All Reports. The department proposes to hire an outside vendor to convert the reports to a digital format. This would create a color reproduction of the original documents, which could then be copied and sold to the public on CD-rom. The department argues that this would ensure the long-term preservation of the collection, and would make color copies available to the public at a reasonable cost.
Comprehensive Conversion Unnecessary. We believe converting all 4,750 files to digital format is unnecessary, for three reasons.
First, it is unlikely that there will be requests to use all the reports. This is because these documents are up to 25 years old and of varying quality. The AP site reports in particular (which account for about 91 percent of the proposed conversion cost) were prepared by a variety of private firms, with varying skills and employing different approaches. In addition, many local zoning ordinances and various other planning documents have already incorporated information contained in many of these reports.
Second, black and white photocopies may be adequate for many requests. Much of the data contained in the reports (particularly the AP site reports) are not dependent on color reproduction. Moreover, black and white reproduction has apparently worked well for some 25 years. In addition, users are able to make color copies of documents off-site.
Third, long-term survival of the reports has already been partly addressed. Microfiche copies have already been made of most of the FERs. Further, all the AP site reports were submitted to local governments, which presumably have retained copies.
Department Should Digitize Reports on As-Needed Basis. Because access to many of the reports may never again be requested, we believe the department should delay converting a report to digital format until it becomes necessary. For example, if the department receives a request for a photocopy of a worn original, conversion to digital format could be appropriate. The department acknowledges that it already has the equipment and expertise necessary for making digital conversions on a small scale.
Accordingly, we recommend that item 3480-001-0001 be reduced by $337,000.
The department requests $153,000 and 2.1 positions to avoid a planned reduction in its effort to create an abandoned mine land inventory. We recommend that the request be denied because any proposal to alter this program should be considered in light of a report on the topic, which the Department of Conservation is required to submit to the Legislature by June 1, 2000.
Background. The 1997-98 Governor's Budget proposed a multiyear survey of abandoned mines in the state. The proposal provided DOC with an average of $450,000 per year for three years. At the end of the third year (1999-00), the department was to submit a report to the Legislature and Governor which provides an inventory of abandoned mines, including information on the magnitude, scope, and location of abandoned mines in the state, and which makes recommendations for future actions. Beginning in the fourth year (2000-01), the department's funding for the abandoned mines program would drop to $250,000 per year.
The Legislature approved this proposal in the 1997-98 Budget Act, and the department has received its three years of funding, as proposed. The report is due June 1, 2000.
Department Seeks to Maintain Program Above Planned Levels. The department asserts that its progress on the abandoned mines inventory is "slightly ahead of schedule." Nevertheless, it is requesting additional resources for two years. Specifically, the department requests an additional $153,000 (above the $250,000) and 2.1 positions for 2000-01 and indicates that it will propose an additional $149,000 and 2.1 positions for 2001-02, in order to maintain its current level of staffing for its abandoned mines activities. (Without the additional funding and position authority, the program's staffing would drop from 4.6 positions to 2.5 positions in 2000-01, as originally envisioned.)
Augmentation Is Premature. We believe any augmentation of the program should be considered in light of the department's upcoming report, which according to the department "will provide detailed recommendations on the proposed direction and future of the program." The project was designed as a three-year study, at the end of which the Legislature and Governor would review and evaluate the results of the project. We believe this process should be observed. If the Legislature and Governor conclude that the study indicates a need for additional resources, then an augmentation could be made in the next budget cycle. Meanwhile, we note that, even without the proposed augmentation, the department will retain 2.5 positions and $250,000 annually to continue the abandoned mines inventory.
Accordingly, we recommend that Item 3480-001-0001 be reduced by $153,000.