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Other Budget Issues

Last Updated: 1/20/2011
Budget Issue: Department's October 19, 2010 reorganization plan
Program: Department of Resources Recycling and Recovery
Finding or Recommendation: Hold hearings on department's recent reorganization plan to shed light on which reorganization options would serve to implement department's programs as effectively as possible and create intended efficiencies and savings. Adopt supplemental report language requiring reporting on timing and amount of savings from implementing the reorganization.
Further Detail

Statutory Reorganization of Waste Management and Recycling Functions.  Chapter 21, Statutes of 2009 (SB 63, Strickland) eliminated the California Integrated Waste Management Board  (the CIWMB) and moved the functions and staff of CIWMB into the newly created Department of Resources Recycling and Recovery (DRRR). Chapter 21 also transferred the Division of Recycling from the Department of Conservation into DRRR. The DRRR became effective on January 1, 2010.

Savings Were Anticipated From Creation of DRRR. At legislative hearings last year on SB 63, the Legislature was led to believe that the creation of the DRRR would result in further cost savings beyond those from eliminating the CIWMB board structure.

DRRR's Internal Reorganization Plan.On October 19, 2010, the department proposed an internal reorganization which divides the department primarily by programmatic function. (For example, all permitting activity is grouped together organizationally.) 

Where Are the Savings? Although the DRRR anticipates increased efficiencies and savings to the state from the October 19 reorganization, which it started to implement soon thereafter, it has yet to budget any such savings in funding or staff. (The 2011-12 Governor's Budget does not reflect budgeted savings from implementing the October 19 plan.) Nor has it provided an estimate as to when such savings are likely to occur and what level of savings the state can reasonably anticipate in the future.

Is This the Best Reorganization Model?Some aspects of the department’s initial steps at the October 19 reorganization—such as putting market development functions together or local assistance functions together—appear to make sense. These steps open the door to further organizational changes that would create efficiencies and potentially improve program effectiveness. However, other aspects of the October 19 reorganization are of questionable benefit and may actually cause problems. For example, separating out the permitting function of a particular recyclable product or waste material (such as waste tires) from its enforcement function as proposed under the October 19 reorganization could make it more difficult for DRRR to coordinate related regulatory activities. This could create inefficiencies and impede program effectiveness.

Recommended Legislative Actions.In light of the above, the Legislature might want to consider two actions:

  • First, the Legislature could hold hearings on the department’s reorganization plan. At these hearings, the Legislature could ask the department to discuss which reorganization models it considered in developing its plan and its basis for adopting the model it chose. These hearings could serve to advise the Legislature of the various options for reorganizing the department, shedding light on which options would serve to implement programs as effectively as possible consistent with legislative intent and statutory policy direction for these programs. We think that one option (and alternative to the department’s plan) that should specifically be evaluated is a reorganization in which regulatory functions (such as permitting and enforcement) are consolidated by recyclable product or waste material, leaving functions like market development, public outreach, and local assistance to be consolidated across the various products and materials regulated by the department. As a result of the hearings, the Legislature may determine the statutory changes required in order to direct a reorganization that best serves legislative goals and priorities.


  • As a second action, the Legislature could adopt supplemental report language directing DRRR to submit to the Legislature, in conjunction with the 2012-13 Governor's Budget, a report that estimates the savings, both in terms of expenditures and position authority, resulting from the department’s reorganization plan. The report should explicitly discuss when these savings are anticipated to materialize.