April 30, 2002
The California Environmental Quality Act (CEQA) establishes an important role for the Department of Fish and Game in reviewing proposed projects which may impact fish and wildlife. We found that the effectiveness of the department's CEQA review is limited by several factors, most significantly the department's lack of a formal process for prioritizing projects for review and determining their level of review. We make a number of recommendations to improve the department's review process and discuss means available to fund the review effort.
The Department of Fish and Game (DFG) is the principal state department responsible for protecting, conserving, and perpetuating native fish, plants, and wildlife in California. It does this using a number of tools, one of which is the environmental review of proposed projects under the California Environmental Quality Act (CEQA). While DFG has a number of roles under CEQA, the focus of this report is on the department's role as a trustee agency under CEQA. The role of the trustee agency is to protect the natural resources affected by a proposed development project. Under CEQA, DFG is the trustee agency for fish and wildlife, as well as for designated rare and endangered native plants of the state.
The public trustee role of the department is important for two reasons. First, it is through the CEQA process that decision makers learn about the potential adverse impacts their decisions can have on fish and wildlife and potential ways to mitigate or eliminate those impacts. Second, the public trustee role is also an important conservation tool because it allows for a broader focus of review than other environmental review authority granted to the department. This is because, as a public trustee agency, DFG can comment on all aspects of a project that affect any fish, wildlife, or native plant species, whereas other reviews are species- or habitat-specific.
In recent years, the Legislature has expressed concern about the department's ability to fulfill its role as a trustee agency under CEQA. The DFG carries out its trustee agency role by providing comments to other agencies, primarily a "lead agency," which is the principal agency responsible for approving a project. In this report, we evaluate the current status of the effectiveness of DFG's CEQA review activities.
Methodology. In reviewing how well DFG is serving as a public trustee agency under CEQA, we interviewed a broad range of interested parties in the CEQA process. These include many different lead agencies, DFG, developers, and environmental organizations. For example, we interviewed planning staff in several cities and counties, including Orange County, Santa Barbara County, County and City of San Diego, Marin County, and Placer County. We also reviewed a sampling of comments DFG has issued on proposed projects as part of the department's CEQA review efforts.
The CEQA was enacted in 1970 in order to ensure that state and local agencies consider the environmental impact of their decisions when approving a public or private project. Unlike other environmental laws that are focused on a single species or a single medium (air, water, land), CEQA requires decision makers to consider a project's impacts on all aspects of the environment before approving it. (In 1997, we examined the entire CEQA process in our report CEQA: Making It Work Better.)
The CEQA has three main purposes:
Currently, any activity that may cause a physical change in the environment is a project subject to CEQA review. Projects include those carried out by public agencies themselves, such as public works construction, and private projects where there is some link with public decision making, such as permit approval or granting of public funds. Certain activities are fully or partially exempt from CEQA requirements either by state law or regulation adopted by the Secretary for Resources.
DFG Assists Lead Agencies. Under CEQA, a lead agency is the public agency which has the principal responsibility for carrying out or approving a project. Typically, the lead agency is a city or county, but it can also be a state agency. The CEQA sets up a process by which lead agencies must consider a variety of potential environmental impacts, including impacts to fish and wildlife, which may result from the project they are reviewing.
The CEQA requires lead agencies to notify and consult with DFG regarding all projects which may impact fish and wildlife habitat. The CEQA encourages lead agencies to consult with DFG early in the process to seek the department's recommendations on the preparation of environmental documents. Once an environmental document is developed, that document is sent to DFG for review and comment. The DFG generally has between 30 and 45 days to review the document, although the review and comment period can be extended by the lead agency. While the lead agency is required to send the document to DFG for review, CEQA does not require DFG to comment on each project.
The CEQA and its regulations provide limited guidance on how DFG should comment on projects in terms of the form, substance, and extent of the comments. Rather, the regulations generally direct commenting agencies to focus on identifying and analyzing impacts and ways to avoid or mitigate them, offer specific mitigation measures, and, if mitigation measures are submitted, then prepare monitoring or reporting programs for lead agencies.
Department's CEQA Review Workload. Based on the department's estimates, it receives between 8,000 and 13,000 CEQA documents per year. Some of these documents merely notify DFG that an environmental review document for a project is being prepared. When the environmental documents themselvessuch as Environmental Impact Reports (EIRs)are received, DFG selects which ones it will review and comment on. Given problems with the department's CEQA workload tracking system (discussed later in this report), the exact workload of the department is uncertain.
Regardless of the number of documents received by the department, the complexity of these documents varies significantly. The variation is due primarily to two factors. First, the documents cover a wide variety of projects, ranging from small projects, such as a single lot subdivision, to large projects, such as housing developments. While some of these projects may have significant impacts on fish and wildlife, and can include endangered species issues or can occur in sensitive habitats, others have little if any impact on fish and wildlife.
Second, the CEQA documents vary in complexity depending on the project's stage within the CEQA review process. For example, "a Notice of Preparation"which notifies the public that an EIR will be developedcan be less than one page long. While other documents, such as an environmental impact report, discuss in detail a project's impacts and propose specific mitigation measures.
Budget for CEQA Review Increased in 2000-01; Proposed for Reduction in 2002-03. When CEQA was passed by the Legislature in 1970, resources for DFG review were not provided. The review duties were assumed by existing staff, as DFG did not have a formal CEQA program and reviewed only a limited number of documents. Over the years, DFG has received an increasing number of CEQA documents for its review, as a result of both increasing project development and court decisions which reaffirmed that lead agencies must notify DFG of any project with a potential impact to fish and wildlife. In 1999, the department estimated that it devoted the equivalent of nine full-time staff positions statewide and about $737,000 to its CEQA efforts, although there were no staff positions or funding dedicated specifically and solely to that purpose.
In response to findings that the department's activities related to CEQA were limited, and in recognition of the importance of CEQA review to fish and wildlife conservation, the Legislature in 2000-01 augmented DFG's budget by 25 positions and $2.1 million from the General Fund for CEQA review. While the augmentation continues in the current year, we note that the department has not dedicated these positions solely for CEQA review. The 2002-03 Governor's Budget, however, proposes to eliminate this augmentation.
DFG Is Entitled to Collect Fees. Chapter 1706, Statutes of 1990 (AB 3158, Costa), requires DFG to collect environmental filing fees for projects subject to CEQA. The fees, which are levied on project applicants, are intended to defray a portion of the costs incurred by DFG in meeting its environmental review obligations under CEQA. Statute also authorizes the fees to be used for other purposes as well, including the administration of timber harvesting regulations and habitat management. Fees are paid to the county clerk (who collects the fees on behalf of DFG) at the time of filing the final CEQA documents. Fees are then remitted monthly to DFG.
Statute establishes the amount of the fee paid by project applicants (currently, either $850 or $1,250) based on the "type" of CEQA document (such as an EIR) prepared for the project. All CEQA lead agencies can exempt project applicants from paying the fee by finding that the project has a minimal impact on fish and wildlife. This is referred to as a "de minimis" finding. For 2000-01, the department collected $1.8 million in environmental filing fee revenues. These revenues are deposited in the Fish and Game Preservation Fund, and have been used by the department for various conservation activities, including CEQA review.
Below we identify and discuss in detail several limitations with the department's CEQA review process. These limitations reduce the effectiveness of the department's review process and make legislative oversight and accountability of the CEQA process more difficult.
DFG Lacks a Formalized Process for Prioritizing Workload. The DFG receives many more CEQA documents for its review and comment than it processes. The department reports it currently reviews about 40 percent of CEQA documents it receives. The documents received reflect projects with a wide variety of potential impacts on fish and wildlifefrom insignificant to substantial. The CEQA does not provide clear guidelines as to the type of projects which DFG is to review and comment on.
In our review, we found that DFG does not have in place a formalized process or well-defined criteria for prioritizing projects for comment. Additionally, the process by which projects are selected for comment varies from region to region. This is because DFG headquarters has delegated the authority to select projects for review to each of its six regional offices. While the DFG's 1993 strategic plan calls for the department to develop a policy to set priorities for selecting the projects it reviews, such policies have yet to be developed. While the department plans on categorizing projects as "high," "medium," or "low" priority in the future, it has not yet developed detailed criteria to guide this categorization in order to ensure consistency within each category and from project to project.
DFG Lacks Standard Protocol Regarding Extent of Its Comments. The extent and nature of DFG's comments on CEQA documents are important. While DFG's comments submitted to lead agencies as part of CEQA are advisory only, our review found that they are given weight by lead agencies. Lead agencies advise us that they are much more likely to give weight to DFG's comments when they are detailed and project-specific, as opposed to boiler plate form letters.
In instances where DFG does comment on projects, we found that those comments vary in the level and type of information provided, even for similar types of projects where one would expect a similar level of detail. We found that this was because there is no standard protocol for responding to documents. Accordingly, while DFG's comments sometimes consist of a simple boiler plate template indicating that species are present, at other times they include a very detailed discussion of the specific impacts of the proposed project.
In addition, we found that DFG's comments vary both in the detail with which they discuss mitigation measures proposed by project applicants, as well as how often the department proposes its own mitigation measures. The comments also vary in whether they discuss the permitting requirements that a project could be expected to meet in order to receive other DFG permits. Some comment letters provide this information, while others do not.
Another variation we found relates to whether DFG's comments are issued jointly with those of the United States Fish and Wildlife Service (USFWS). In some cases, the comments are issued jointly, while in other cases they are not. The USFWS has authority for federally listed species and migratory birds. Lead agencies report that receiving comments jointly from USFWS and DFG is helpful because it allows lead agencies to get a more complete picture of the impact of a project on the environment. Otherwise, a lead agency would separately receive comments about species only of concern to the USFWS or DFG, respectively. Joint issuance of comments also encourages the state and federal agencies to be consistent and simplifies the review process for lead agencies.
DFG Is Not Involved Early in the CEQA Process. Under CEQA, lead agencies are encouraged to "consult" with DFG early in the process. This is to allow DFG ample time to consider a project's potential impacts. Lead agencies can also seek recommendations from DFG on the type of environmental document required. This early consultation serves several important purposes. First, it ensures that all affected agencies have an opportunity to voice their opinions about the level of impact a project will have and thus the type of environmental document that should be prepared. Second, it is more cost-effective for comments to be received early in the process, when changes can most easily be incorporated into a project.
We found that early consultation is generally not happening for several reasons. First, lead agencies report they do not seek DFG's early counsel unless they know that the project will ultimately have to attain a DFG-issued permit. Second, some lead agencies may not seek DFG input because they think the department does not have resources to assist in the CEQA review process. Finally, DFG is often unable to respond to notices requesting consultation because, in light of existing resources allocated to CEQA review, it gives priority to reviewing CEQA documents of projects that are at later stages of development and thus more imminent.
DFG Seldom Follows Up on Its Comments. In our discussions with lead agencies and DFG, it appears that DFG often does not follow up on the comments it provides to lead agencies. Follow-up activity could include meeting with local planning staff or consultants to explain the department's concerns, or testifying at public meetings on the project. The department indicates that this is a lower priority given its current resources.
While CEQA does not specifically require DFG to follow up on its written comments, the lack of such follow-up in our view makes the comments less effective. First, the follow-up is an opportunity for DFG to further articulate any concerns about the impact of the project on public trust resources. Also, follow-up allows DFG to represent the interest of public trust resources throughout the CEQA process. Since DFG's comments are only advisory, the better that DFG is able to articulate its comments, the more likely it is that the comments will be considered and addressed by lead agencies.
DFG Does Not Follow Up on the Effectiveness of Mitigation Measures. One of CEQA's three main purposes is to mitigate the impacts of projects on the environment where feasible. Mitigation can include any number of measures, such as establishing a buffer zone near wildlife habitat or revegetating a project site with native vegetation. As a public trustee agency, DFG may choose to comment on the mitigation measures proposed by a project proponent and suggest specific mitigation measures and monitoring plans.
We found that the department has taken few steps to determine the effectiveness of implemented mitigation measures in actually reducing the impact of a project on fish and wildlife resources. While CEQA requires public agencies to monitor the implementation of mitigation measures, it does not require the agencies to evaluate the effectiveness of these measures. Nevertheless, in the absence of effectiveness information, it is difficult to assess how well CEQA is working overall to protect the environment, how effective individual mitigation measures are, and how mitigation measures can be made more effective in the future.
Lack of Reliable Data Complicates Program Management and Legislative Oversight. At the time this report was prepared, DFG could not provide basic information about its CEQA review activities (such as the number and type of documents it receives), thereby making both internal management and legislative oversight difficult. Specifically, without adequate tracking of its CEQA review activities, we question how the department can adequately budget for these activities and target its resources effectively.
Recognizing the need for reliable management information, the department is
developing a database system to track data on its
CEQA review activities. However, we have some concerns with the department's
prototype system. Specifically, the data base as
currently proposed will not provide information on (1)
the number and type of initial consultations and
(2) the priority of projects (in terms of potential impact to habitat) reviewed by DFG. In addition, the data base will not track DFG's follow-up activities, if any, after its comments have been submitted to a lead agency.
As discussed above, state law requires the department to collect filing fees for environmental documents prepared pursuant to CEQA. While the department has begun a series of audits of the collection of the fees, we find that there are a couple of weaknesses with the current administration of this fee, including issues with the fee structure itself.
Inconsistent Application of Fee Exemption. As we previously indicated, lead agencies can identify projects as having a de minimis impact on fish and wildlife and therefore exempt project applicants from paying the environmental filing fee. While DFG has promulgated regulations to help clarify the fee exemption, we found some evidence that the fee exemption is being granted inconsistently by lead agencies. For example, some lead agencies appear to use different standards in considering a proposed project's impacts on fish and wildlife. Inconsistency in granting the fee exemption raises concerns about fairness and, to the extent that lead agencies are granting exemptions when they should not be, the department is not collecting the fee revenues accorded it by law.
Because administratively planned audits for most counties for compliance with AB 3158 have not been completed, there is limited information to assess the extent to which fee exemptions are being granted inconsistently on a statewide basis.
Concerns Raised About Equity of Fee Structure. Many of the lead agencies we interviewed felt that the current statutorily established fee structure was not equitable because project proponents are required to pay the same fee regardless of the project's size and environmental impact as long as the same type of CEQA document is filed. This perceived inequity in the fee structure might result in lead agencies trying to fit a project within the fee exemption, perhaps resulting in some of the inconsistency in administering the exemption.
No Annual Review of Fees as Required by Statute. Statute requires the department to prepare an annual review of these filing fees and to recommend to the Legislature adjustments to the statutory fee structure. To date, the department has not reviewed the fee structure or recommended fee adjustments, primarily because the legality of the fee was being litigated over a period of several years. However, the legality of the fee was upheld by the Third District Court of Appeal in April 2000.
As discussed earlier in this report, DFG is assigned an important role as a public trustee agency under CEQA. However, our review has identified a number of areas where the consistency, effectiveness, and accountability of the department's activities as a public trustee agency could be improved.
In the following sections, we recommend that the Legislature take several actions to improve the consistency and effectiveness of DFG's activities as a public trustee agency, to improve accountability to the Legislature, and to provide the Legislature with better information to evaluate the department's funding requirements. Specifically, we recommend that the Legislature direct DFG to:
Additionally, we recommend that the Legislature reexamine the environmental filing fee (AB 3158 fee) structure as a means of funding DFG's CEQA review activities.
Most of the above recommendations call for DFG to conduct more strategically the work it is already doing. Therefore, most of the recommendations should result in a negligible increase in DFG's overall workload and costs. While the recommendation regarding the assessment of mitigation measure effectiveness would impose some costs on the department, we have structured the recommendation to keep the department's costs to a minimum. Additionally, the environmental filing fee could be explored as an appropriate funding source for any additional costs that would result from implementing the recommendations.
Establish Clear Workload Priorities. Currently (based on the 2001-02 funding level), DFG receives many more CEQA documents than it processes. Not all of the projects for which CEQA documents are submitted involve significant impacts to public trust resources. We recommend that the Legislature direct DFG to develop a prioritization matrix to guide DFG in the selection of projects on which it will comment. Such prioritization would maximize the use of limited resources, ensure consistency in the selection of projects for DFG comment, ensure that the highest priority projects are being reviewed and commented on, and provide for legislative oversight.
The matrix should provide sufficiently detailed criteria to categorize a project as high-, medium-, or low-priority for DFG comment. These criteria might be based on factors such as the size of the project, the project's cumulative impact on fish and wildlife in conjunction with neighboring development, the presence of listed species, and the type of habitat involved. The DFG should advise the Legislature on the criteria the department is using to set priorities for selecting projects once these are established.
Standardize the Type of Information Provided in Its Comments. As discussed earlier, our review found that DFG's comments on CEQA documents lacked consistency in terms of the level of response provided. In addition, we found that the department's comments sometimes were not detailed enough to be of much use by the lead agencies. In order to improve the effectiveness of DFG's comments, we recommend that the Legislature direct DFG to standardize the type of information provided in its comments. The DFG should clearly identify the type of information that DFG's comment letters should generally include for each level of project priority: high, medium, and low.
Based on our discussions with lead agencies as to what comments they find useful, we recommend that, at least for all high-priority projects, the department comment on the adequacy of mitigation measures and the adequacy of mitigation monitoring plans. These comments are beneficial because they provide DFG the opportunity to comment early in the development process on the potential adverse impact of proposed projects on fish and wildlife. As a result of DFG's comments, lead agencies may make better-informed decisions in evaluating the projects and projects may be changed to minimize the adverse impacts on fish and wildlife.
Furthermore, for projects of all levels of priority, we think that DFG's comments should identify and provide information on other DFG permits that may be required for the project (such as streambed alteration permits). In addition, to the extent the USFWS will also be involved in the review of projects, DFG should attempt to coordinate its review efforts with USFWS. This "one stop" information approach can be beneficial to project proponents. It allows project sponsors to prepare earlier, rather than later, in the planning process for other changes in the project that may be needed to satisfy permit requirements. This would potentially save project sponsors time and money. Such an approach would also improve consistency among all stages of the environmental review process.
Improve Data Management. As previously discussed, the Legislature lacks basic information needed to assess how well the department is carrying out its CEQA functions. Also, the department lacks a data tracking system needed to manage and budget its CEQA resources effectively.
We therefore recommend that the Legislature direct DFG to ensure that its data tracking system, currently under development, at a minimum tracks the following:
Based on our discussions with the department, we understand that the last four items are not currently part of the department's prototype data tracking system. However, we think the costs to collect this additional information would be negligible, given the current data management development activities of the department.
Using these data, the department should submit a one-time report by January 10, 2004 to the Legislature that summarizes its CEQA review workload based on this data tracking system. We think that with better information on the department's workload, as well as its accomplishments at a given funding level, the Legislature will be better able to evaluate the department's funding requirements for its CEQA review activities.
In a later section, we discuss potential funding sources to cover any additional costs that are identified related to these recommendations for improving data management.
Assess the Effectiveness of a Sampling of Mitigation Measures. While CEQA requires public agencies to monitor the implementation of mitigation measures, it does not require the agencies to evaluate the effectiveness of these measures. As a result, it is difficult to assess how well CEQA is working overall to protect the environment, how effective individual mitigation measures are, and how mitigation measures can be made more cost-effective in the future.
We recommend that the Legislature require the department to assess the effectiveness of a sampling of mitigation measures and submit a report on its findings. The sampling should focus on widely used mitigation measures (such as locating projects at least 100 feet from streams) the department commonly offers to reduce impacts of projects on fish and wildlife resources. By focusing on such widely used mitigation measures, the department should be able to draw general conclusions that would have broad application to a large number of projects.
To the extent possible, the department's assessment should incorporate a review of existing literature on the effectiveness of mitigation measures. By focusing on a sampling of mitigation measures and incorporating a literature review, the department should be able to keep its costs to a minimum to address this requirement. As discussed below, to the extent these activities impose additional costs, we think the filing fee is an appropriate fund source.
This information will assist public decision makers in identifying effective mitigation measures, promoting greater consistency in the development of mitigation measures, and enabling project developers to cost-effectively incorporate proven mitigation measures up front in project design. In addition, the Legislature will have better information with which to evaluate CEQA's overall effectiveness in protecting the environment.
Reexamine Fee Structure and Its Administration. As discussed above, there are potential problems with inconsistent application of the environmental filing fee (AB 3158 fee) exemption and concerns have been raised about the equity of the fee structure. We think that the annual report on this fee currently required by statute would provide the Legislature with useful information to assist its evaluation of this fee and to determine what changes might be appropriate. Since the legality of the fee has been settled, we recommend that the department submit this statutorily required report by January 10 of each year. However, based on discussions with the department, it is unclear when the department plans to submit this report to the Legislature.
In its first report, the department should evaluate, and make recommendations as appropriate, to address the perceived inequities in the existing fee structure. As part of its evaluation, the department should consider the merits of a fee structure which is tiered based on a proposed project's impact on fish and wildlife. Under such a fee structure, the greater a project's potential impact on fish and wildlife, the higher the fee. This report should also address, as required by statute, any adjustments in the fee necessary to cover the full costs of the department's CEQA activities.
Finally, the annual report should also summarize the findings of the department's currently ongoing audits of local jurisdictions for compliance with their responsibility to collect the environmental filing fee. A sufficient number of jurisdictions should be audited in order to assess compliance on a statewide basis. These audits should specifically examine whether local jurisdictions are appropriately applying the fee exemption accorded projects with a minimal impact on fish and wildlife.
Budget Proposal. As indicated above, the 2002-03 Governor's Budget proposes to reduce DFG's CEQA review activities by $2.1 million, in effect returning the department's CEQA review efforts to the level prior to the 2000-01 augmentation. The department estimates that at the reduced funding level, it will be able to review about 10 percent of the documents that it receives. The department is not able to report, however, on the level of review those documents will receive.
Potential Alternative Funding Sources to Increase CEQA Activities. If the Legislature wishes to provide for a higher level of departmental review than proposed in the Governor's budget, one option would be to transfer a portion of the Environmental License Plate Fund (ELPF) balance (projected to be $9.6 million at the end of 2002-03) to the department for CEQA review. Monies in ELPF are available to the department for the review of the potential impact of development activities and land use changes.
Additionally, the AB 3158 fees are another potential funding source to increase DFG's CEQA review activities over time. For example, the AB 3158 fee structure could be revised so that the fees raise an amount to more fully cover the department's costs associated with its CEQA review workload. Also, if fee structure revisions were made so as to reduce the inappropriate application of the fee exemption, more fee revenues would be collected by the department.
The DFG's activities under CEQA have the potential to be a valuable conservation tool. Our review of DFG's CEQA activities has identified a number of areas where the consistency, effectiveness, and accountability of the department's activities as a public trustee agency could be improved. We recommend a number of actions, summarized in Figure 1, that the Legislature can take to improve DFG's review efforts. Of these actions, we think that it is fundamentally important for the Legislature to direct the department to establish a formal process for prioritizing projects for review and for determining the level of review projects should receive.
Finally, while the adoption of our recommendations should enhance the consistency of the review process and ensure that the highest priority projects are addressed, legislative oversight of DFG's review activities will remain difficult unless certain other changes are made. Therefore, we recommend that the Legislature require DFG to improve its data management and to submit a one-time report on its CEQA review workload and activities. This will provide the Legislature with key information necessary for legislative oversight.
Improving DFG’s CEQA
Selecting Projects for Review and Comment
Direct DFG to establish a prioritization matrix for
project review and comment. The matrix should provide sufficiently
detailed criteria to categorize a project as high-, medium-, and
low-priority for DFG comment.
Consistency in Level of Review and Extent of Comments
Direct DFG to standardize the type of information provided
in its comments on proposed projects.
Direct DFG to improve data management by ensuring that its
data tracking system, currently under development, tracks specific
information necessary for legislative oversight and program management.
Effectiveness of Mitigation Measures
Require DFG to assess the effectiveness of a sampling of
widely used mitigation measures.
Assembly Bill 3158 (Environmental Filing Fees)
Reexamine the current fee structure.
Recommend that DFG submit the annual report that is
currently required by statute.
This report was prepared by Jennifer Giambattista, and reviewed by Mark C. Newton. The Legislative Analyst's Office (LAO) is a nonpartisan office which provides fiscal and policy information and advice to the Legislature.
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