The state conserves and manages its natural resources through a number of programs. Many of these programs focus relatively narrowly, either on (1) reviewing and mitigating the environmental impacts of particular projects--such as specific proposals to harvest timber--or (2) managing and restoring specific species of fish or wildlife. The Legislature recognizes the limitations of such a project-by-project approach to natural resource conservation and management, and has called for greater coordination of various conservation efforts. For example, in the Coastal Act of 1976 the Legislature declared the state's coast to be a distinct and valuable natural resource, existing as a balanced ecosystem, and called for orderly, balanced utilization and conservation of coastal resources.
Trend Away From Project-Based Review to Broader Focus. In recent years, there has been a trend away from project-based review and towards a broader focus in natural resource management. Instead of focusing on individual species or particular habitat, this broader approach focuses on whole ecosystems, bioregions, watersheds, and natural communities. One example of this new approach is the Natural Community Conservation Planning (NCCP) program established by Chapter 765, Statutes of 1991 (AB 2172, Kelley). This program calls for broad-based, regional planning to promote the management and conservation of multiple species and natural communities, while promoting coordination and cooperation among public agencies, landowners, and other private interest through the planning process.
1997-98 Governor's Initiatives. For 1997-98, the budget proposes to further implement this broader approach to natural resource management. Specifically, the budget proposes to expand the NCCP program and implement two other initiatives, as summarized in Figure 6. According to the administration, these initiatives are an effort to achieve a cooperative, integrated approach to managing and restoring the state's (1) endangered and threatened species and natural communities, (2) watersheds, and (3) coastal resources. These initiatives would be implemented by various resources departments.
|Proposed Resources Initiatives
|Natural Community Conservation Planning||16.0|
Analyst's Overall Review of Governor's Initiatives. In general, we believe that taking the broader approach to conserve and manage the state's natural resources has merit. However, we think that, for these initiatives to be effective, it is important that they be well defined with goals and criteria to guide resource allocation decisions. It is also important that these initiatives identify quantifiable results that enable assessments of the effectiveness of the approach. This is particularly essential because the approach is relatively new and its effectiveness is still not known.
Our overall review identifies four concerns that are common to all of the initiatives as summarized below. We further discuss individual initiatives in the writeups of departments proposed to implement the initiatives as well as in the following writeup in this section. Specifically, we find:
Conclusion. While proposals that take a broader approach to resource conservation and management may have merit, their effectiveness is unproven and costs are unknown. Consequently, it is essential that such initiatives have well-defined and measurable goals and outcomes to facilitate future assessment of their effectiveness and costs, be coordinated with existing state programs and policies, and provide for legislative oversight and policy direction. Our review concludes that the administration's proposals are deficient in these respects. This raises significant fiscal and policy issues for the Legislature to consider as it evaluates the initiatives and crafts its own approach to broad-based natural resource management. We discuss elements of the three initiatives in more detail either below (in the case of the watershed initiative) or under the individual departments in this chapter (DFG in the case of the NCCP, and the Resources Agency, California Coastal Commission, State Coastal Conservancy, and the State Water Resources Control Board in the case of the coastal initiative).
Budget Request. The budget proposes $3.8 million from the General Fund ($3.4 million) and the California Wildlife, Coastal, and Park Land Conservation Fund of 1988 (Proposition 70--$430,000) for various resources departments to implement a watershed initiative. Funds would be used to assess the ecological health of watersheds and evaluate how they are being affected by activities such as timber harvesting and development.
The assessments would be used to assist local organizations--called community-based watershed groups--to develop watershed management plans. These plans are intended to (1) guide efforts by local organizations, land owners, and state and federal agencies to restore watersheds and (2) streamline state regulatory processes such as timber harvest plan review by the Department of Forestry and Fire Protection (CDFFP) and issuance of streambed alteration agreements by the Department of Fish and Game (DFG).
Figure 7 (see page 18) indicates the funding proposed for the initiative.
As we discuss earlier in this Crosscutting Section, we think that implementing a broader approach to resource management generally--including watershed protection--has merit. We recommend approval of the request by the State Water Resources Control Board (SWRCB) for watershed coordinator positions given that these staff will help to implement existing five- to seven-year workplans of the regional boards. These workplans include identifying and assessing water quality problems in each region, targeting resources to the watersheds with the
|Department of Conservation
|Department of Forestry and Fire Protection
|Department of Fish and Game
|State Water Resources Control Board
most significant problems, developing an implementation strategy, and evaluating the results. However, we find the following deficiencies with respect to the balance of the watershed initiative proposal:
Recommendation. We think that a broader approach to managing and restoring watersheds--beyond a project-by-project review of impacts--has merit and could result in improved conservation of the state's watersheds. In our view, the SWRCB's request for regional watershed coordinators has merit as these staff will help to implement existing multi-year workplans to achieve specific objectives. However, our review points to deficiencies with the remaining elements of the initiative which reduce the Legislature's ability to evaluate the initiative's specific outcomes or hold the various departments accountable for its results.
Because these deficiencies are likely to limit the initiative's long-term effectiveness, we think that the departments implementing the initiative should address these deficiencies before the Legislature authorizes the initiative. Accordingly, we recommend deletion of the funds requested for the initiative except for ten regional coordinators requested for the SWRCB.
Proposition 204 Passed by Voters. Proposition 204--the Safe, Clean, Reliable Water Supply Act of 1996--was passed by the voters in November 1996. The measure provides $995 million for various water-related purposes. Specifically, funds are provided for habitat restoration in the Bay-Delta, wastewater treatment, water recycling and conservation, and local flood control and prevention. Of the $995 million, Proposition 204 continuously appropriated $968 million to various departments, including the Department of Water Resources (DWR), the State Water Resources Control Board, and the Resources Agency. The remaining $27 million--for river parkway acquisition and riparian habitat restoration--is available only upon appropriation by the Legislature.
Expenditures for Current and Budget Years. The administration proposes Proposition 204 expenditures totaling $99 million in 1996-97 by various departments. The budget proposes expenditures totaling $189 million in 1997-98, as indicated in Figure 8. Of the $189 million, only $27 million (14 percent)--for river parkway acquisition and riparian habitat restoration--is included in the budget bill. The remaining $162 million is proposed to be allocated directly to various departments and conservancies--$113 million for local assistance and $49 million for state support.
State Support Expenditures Should Be Scheduled in Budget Bill. The budget's proposal to allocate funds directly to the various departments is consistent with the terms of Proposition 204. However, we are concerned that allocating funds outside of the budget process reduces the Legislature's oversight over the expenditure of Proposition 204 funds. In our view, scheduling these expenditures in the budget bill will provide the Legislature with greater oversight of how funds are spent--consistent with the requirements of Proposition 204--and better ensure that the objectives of Proposition 204 are accomplished.
|Proposition 204 Expenditures
|Programs and Affected Budgets||Amount|
Fish and wildlife restoration--Central Valley Project
South Delta environmental mitigation
Fish and wildlife restoration--Central Valley Project
Bay-Delta nonflow-related projects
|Clean Water and Water Recycling||$55.3|
Water recycling and reclamation
Delta tributary watershed rehabilitation
Seawater intrusion control
|Water Supply Reliability||$71.9|
Local water supply
Sacramento Valley water management
River parkway program
|Flood Control and Prevention||$18.0|
Claims submitted by 6/30/96 for state share of costs
Proposition 204 continuously appropriates its funds, with certain exceptions, to various departments. Proposition 204 does not preclude the Legislature from considering the proposed expenditures in the budget process and scheduling the expenditures. Legislative Counsel has advised us that generally the Legislature has the authority to appropriate the Proposition 204 funds in the budget bill for specified purposes, as long as those purposes are consistent with Proposition 204. Such an approach is consistent with current practice whereby expenditures from the Habitat Conservation Fund (Proposition 117), although continuously appropriated, are scheduled in the budget bill.
As discussed under the individual departments in this chapter, we find that some of the proposed Proposition 204 expenditures for state support are inappropriate. Accordingly, so that the Legislature can exercise oversight over these expenditures, we recommend that new items be created to specify all of the proposed Proposition 204 expenditures for state support in the budget bill. We discuss our specific recommendations for the amounts and purposes for which funds should be appropriated under the individual departments. (Please see our writeups for the Secretary for Resources, Item 0540, and the Department of Fish and Game [DFG], Item 3600.)
Projects Required by Central Valley Project Improvement Act Should Also Be Scheduled. Proposition 204 provides $93 million to be appropriated directly to the State Controller for allocation to DFG and DWR to pay the state's share of costs for fish and wildlife restoration activities that are required by the federal Central Valley Project Improvement Act (CVPIA). The budget displays expenditures totaling $30 million for the current year and proposes expenditures totaling $34.4 million for the budget year ($24 million for DWR and $10.4 million for DFG) from Proposition 204 funds for this purpose. Since the CVPIA provides specifically the categories of projects that are mandated and require a state share of the costs, we recommend that the budget bill include a schedule of the projects to be funded by Proposition 204 funds to clearly identify state expenditures that meet CVPIA requirements.
We recommend that DWR provide the Legislature, prior to budget hearings, with a schedule of projects that relate to specific CVPIA requirements and are to be funded by Proposition 204 funds. We discuss our particular concerns with DFG's proposal for these Proposition 204 funds in our writeup for DFG (Item 3600).
Proposition 204 created the River Parkway Program, and provides $27 million to implement it. Funds are available for acquisition and restoration of riparian and aquatic habitat and for river and stream trail projects. (Please see the Capital Outlay section of this Analysis for our discussion of the Department of Parks and Recreation's [DPR's] River Parkway Program proposed expenditures.)
The budget proposes to expend the entire $27 million in 1997-98, as indicated in Figure 9 (see page 24). Funds will be spent to acquire and restore riparian habitat and develop public access and recreational opportunities. Of the total, $26.3 million will be allocated to the Wildlife Conservation Board (WCB), various state conservancies, and DPR for capital outlay. The remaining $700,000 is proposed for local assistance grants in the Urban Streams Restoration Program administered by the Department of Water Resources (DWR).
Legislature Called for River Protection Program. Chapter 762, Statutes of 1991 (SB 906, Hill)--the California Riparian Habitat Conservation Act--called for a coordinated state rivers and riparian habitat protection program. Partially in response to this measure, various state agencies including the Department of Fish and Game (DFG), the WCB, and the State Lands Commission have issued reports and plans to conserve and better manage the state's rivers and riparian habitat.
|Proposition 204 River Parkway Program
Proposed Expenditures, 1997-98
|Agency and Purpose||Amount|
|California Tahoe Conservancy|
|Wildlife Conservation Board|
|Sacramento River and tributaries||1,500|
|San Joaquin River||500|
|Santa Margarita River||300|
|San Jacinto River||2,000|
|San Joaquin River Parkway||5,000|
|State Coastal Conservancy|
|Los Angeles River and tributaries||2,000|
|Department of Parks and Recreation|
|Santa Monica Mountains Conservancy|
|Los Angeles River and tributaries||5,000|
|Department of Water Resources|
Planning Efforts to Continue in 1997-98. Several of the planning activities started since 1991 are proposed to continue in 1997-98. For example, DFG requests about $70,000 in 1997-98 to continue development of the Riparian Habitat Joint Venture Program, which will establish strategies and quantifiable habitat objectives to protect riparian habitats statewide. In addition, the California Rivers Assessment--a cooperative effort among the University of California, Davis; state, federal, and local agencies; and private organizations--is conducting a statewide inventory of rivers and detailed evaluations of their environmental conditions, to improve river conservation and management. The statewide inventory and evaluation has not been completed. The project has focused its initial attention on various rivers and bodies of water including the Eel, Sacramento, Mokelumne, Cosumnes, Carmel, Owens, Santa Clara, and Santa Margarita rivers, and the Salton Sea.
Analyst's Review of Proposed River Parkway Program. The availability of Proposition 204 funds provides the Legislature with a significant opportunity to further the objectives of Chapter 762, and fund projects in a coordinated manner using criteria that allow projects to be prioritized statewide based on need for acquisition and restoration of riparian and aquatic habitat. In our view, $700,000 requested for local assistance for the Urban Streams Restoration Program administered by DWR is justified. This is because that program--established by statute in 1985--has well-defined criteria for determining funding priorities and distributing grants. (In the past, these grants have been funded by bond funds that are now depleted.)
However, our review of the projects proposed for funding under WCB and the various state conservancies raises the following concerns.
Recommendation. In our view, expenditures of River Parkway Subaccount funds will be most cost-effective if they are based on established criteria to prioritize river restoration and enhancement projects statewide according to where they are most needed. Because the projects proposed for 1997-98 do not meet this criteria, we recommend that the funds be deleted (with the exception of $700,000 for DWR). While we recognize that this will delay spending of Proposition 204 funds, we think that it is advisable nonetheless to establish criteria for consistent evaluation and selection of projects in order to ensure that funds are directed to the highest priority projects from a statewide perspective, not an individual state agency perspective.
In order that the Legislature can assess whether the administration's proposals are based on such criteria in future years, we recommend adoption of the following supplemental report language:
The Secretary for Resources shall submit a report to the Legislature by January 1, 1998, describing (1) the criteria used in selecting Proposition 204 River Parkway Program projects proposed for funding in 1998-99; (2) the relationship of those proposed projects to ongoing planning and evaluation efforts such as the California Rivers Assessment; and (3) a priority list of projects selected based on the above criteria for funding in subsequent years.
Based on this information, the Legislature will be better able to allocate River Parkway funds in future years in accordance with its priorities and with established high-priority needs.
Figure 10 (see page 28) summarizes the total amount of funds available for expenditure in 1997-98 for selected special funds and park-related bond funds, the Governor's proposed expenditures from these funds, and the reserve balances available after the Governor's proposed expenditures. The Legislature may wish to retain some of the projected reserves in the accounts to meet contingencies such as revenue shortfalls or unanticipated expenditures. However, this would further reduce the amounts of funds available for appropriation by the Legislature in 1997-98.
Environmental License Plate Fund (ELPF). The ELPF derives its funding from the sale of personalized motor license plates by the Department of Motor Vehicles. Funds from the ELPF can be used for the following purposes:
|Selected Special Funds
1996-97 and 1997-98
|Environmental License Plate Fund||$23.0||$19.4||$18.4||$1.0|
|Public Resources Account, Cigarette and Tobacco Products Surtax Fund||21.0||21.0||20.4||0.6|
|Habitat Conservation Fund||44.3||33.5||32.4||1.1|
|a Based on Governor's budget.|
The budget proposes expenditures totaling $18.4 million from the ELPF, a reduction of $4.6 million (20 percent) from estimated current-year spending. This reduction is due primarily to an overestimation of revenues in the current year, resulting in the need for a General Fund loan to the ELPF to cover current-year expenditures. The budget indicates that this loan will be repaid in 1997-98 from ELPF revenues, reducing the amount of funds available for expenditure on programs in the budget year. As we discuss under the Wildlife Conservation Board (WCB--Item 3640), underfunding of the Habitat Conservation Fund (HCF) in the budget year would result in a budget-year deficit in the ELPF.
Public Resources Account, Cigarette and Tobacco Products Surtax Fund (PRA). The Public Resources Account (PRA) receives 5 percent of the Cigarette and Tobacco Products Surtax Fund (C&T Fund) revenues. The budget projects account resources to be about $21 million in 1997-98. Generally, PRA funds must be used in equal amounts for (1) park and recreation programs at the state or local level and (2) habitat programs and projects.
Of the projected resources, the budget proposes expenditures from the PRA for the various departments totaling $20.4 million. This is a decrease of $596,000 (2.8 percent) from estimated current-year funding. This reduction reflects a decrease in projected revenues to the C&T Fund, and a drawing down of the reserve in the PRA.
Habitat Conservation Fund (HCF). The HCF was created by Proposition 117, the California Wildlife Protection Act of 1990. The proposition requires that the fund receive annual revenues of $30 million primarily for wildlife habitat acquisitions and improvements. To provide this funding level, Proposition 117 requires transfer of (1) 10 percent of funds from the Unallocated Account, C&T Fund, and (2) additional funds from the General Fund in order to provide a total of $30 million. Proposition 117 allows the Legislature to substitute for the General Fund the transfer of other appropriate funds.
The budget proposes to transfer a total of $27.9 million into the HCF in 1997-98. Including a carry-over reserve from 1996-97, the budget proposes total expenditures of $32.4 million in the budget year. These funds are proposed to fund activities of the California Tahoe Conservancy, State Coastal Conservancy, Department of Parks and Recreation, and WCB. Specifically, the budget proposes $23.4 million to be allocated to WCB.
Park-Related Bonds. Figure 11 (see page 30) shows the amount available in selected park bond funds and the expenditures proposed for 1997-98. Park development projects and land acquisitions have traditionally been funded by various bonds passed by the voters. The availability of bond funds has contributed to the Legislature's flexibility in funding its priorities in past years. This is because the Legislature has been able to free up funds in the ELPF and the PRA by using bond funds to the greatest extent possible to fund various projects.
The budget projects available park-related bond fund balances totaling $18.6 million at the beginning of 1997-98, as shown in Figure 11. The figure also shows that the fund balance at the end of 1997-98 is estimated to be $6.5 million. Of this amount, $3.2 million is from the 1988 park bond. Much of these funds are earmarked for development of particular geographic areas and for certain categories of projects. Consequently, if the Legislature approves the Governor's spending proposals, the amount available for projects to meet legislative priorities will be less than $6.5 million.
|Selected Park Bond Funds
1996-97 and 1997-98
|Parklands Fund of 1980||$1.9||--c||--||--c|
|Parklands Fund of 1984||4.7||2.5||2.4||0.1|
|Fish and Wildlife Habitat
Enhancement Fund of 1984
|State Coastal Conservancy Fund of 1984||1.7||1.3||0.8||0.5|
|California Wildlife, Coastal and Park Land Conservation Fund of 1988b||47.2||12.1||8.9||3.2|
|Wildlife and Natural Areas Conservation Fund of 1988||1.6||
|a Based on the Governor's budget.|
|b Amounts shown reflect all bond allocations including those not subject to budget bill appropriations.|
|c Not a meaningful figure.|
As indicated in Figure 12, the budget reflects expenditures totaling $269.2 million in 1997-98 from various water bonds for (1) safe drinking water; (2) water supply, including water conservation, water recycling, and groundwater recharge; (3) wastewater treatment and other water quality projects, (4) Bay-Delta ecosystem restoration, and (5) flood control. This is an increase of $178.7 million, or 197 percent, above estimated current-year expenditures from bonds for these purposes. This increase reflects the availability of $995 million of additional bond funds from the Safe, Clean, Reliable Water Supply Act (Proposition 204) for various purposes.
|Selected Water Bond Fundsa
|Safe drinking water|
|1986 California Safe Drinking Water Fund||$20.3||$15.7||$4.6|
|1988 California Safe Drinking Water Fund||35.1||15.2||19.9|
|1986 Water Conservation and
Water Quality Fund
|1988 Clean Water and
Water Reclamation Fund
|1988 Water Conservation Fund||24.2||5.4||18.8|
|Safe, Clean, Reliable Water Supply Fundb||170.5||87.0||83.5|
|Wastewater treatment/water quality|
|1984 State Clean Water Fund||$27.4||$15.1||$12.3|
|Safe, Clean, Reliable Water Supply Fundb||158.6||40.2||118.4|
|Bay-Delta ecosystem restoration|
|Safe, Clean, Reliable Water Supply Fundb||$548.7||$43.5||$505.2|
|Flood control and prevention|
|Safe, Clean, Reliable Water Supply Fundb||$18.0||$18.0||
|a Based on Governor's budget.|
|b Proposition 204.|
Safe Drinking Water. The budget projects total expenditures of $30.9 million in 1997-98, leaving a balance of $24.5 million at the end of 1997-98. Pending grant applications are in the pipeline against most of this balance.
Water Supply. The budget projects total expenditures of $121.5 million--$87 million from Proposition 204 bond funds-- for water supply programs. This leaves a balance of $118.7 million, mainly for new projects.
Wastewater Treatment and Other Water Quality Projects. The budget proposes $55.3 million in expenditures to fund wastewater treatment, agricultural drainage treatment, seawater intrusion control, and other water quality projects in 1997-98. This leaves a balance of $130.7 million, mainly for new projects.
Bay-Delta Ecosystem Restoration. Proposition 204 bond funds provide a total of $583 million for various projects to restore the ecosystem of the Bay-Delta. The budget estimates expenditures of $34.3 million from these funds in 1996-97, leaving a balance of $548.7 million at the start of 1997-98. The budget proposes expenditures of $43.5 million in 1997-98, leaving a balance of $505.2 million.
Flood Control and Prevention. The costs of federally authorized flood control projects are shared by the federal government (65 percent), state government (25 percent), and local government (10 percent). Due to the state's budget condition in recent years, however, the state has been unable to pay fully its share of costs for these flood control projects. According to the Department of Water Resources (DWR), the unpaid amount on the state's share of costs is currently about $167 million.
Proposition 204 bond funds provide $60 million for the state's share of costs of these flood control projects. The budget estimates expenditures of $42 million from these funds in 1996-97, leaving a balance of $18 million at the start of 1997-98. The budget proposes spending the remaining $18 million by the end of 1997-98. About $107 million in state costs will remain unpaid. According to DWR, the unmet funding need for the state share has caused construction to stop on a number of projects, including enlargement of Prado Dam on the Santa Ana Mainstem near the border of Orange, Riverside, and San Bernardino Counties, and work on Upper Llagas Creek in Santa Clara County.
The $60 million in Proposition 204 funds for the state share of flood control costs is only available to pay claims submitted by June 1996 for projects in specified counties. Thus, these funds are not available to address the recent floods.