The budget proposes total expenditures of $190.6 million from various sources for support of the DFG in 1997-98. This is an increase of $23.8 million, or 14 percent, from estimated current-year expenditures.
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 also protecting wildlife and plant species and their habitat. The budget proposes $1.5 million--about the same level as in the current year--for the department to continue these functions of the program.
The NCCP 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. The program has received support from a range of entities including local government, developers, and environmental groups, and the department has made significant progress in developing plans. However, the administration has not yet proposed to expand the program to other parts of the state. This is because, in part, the program's ultimate success is still uncertain.
Program's Scope Significantly Expanded in Current Year. In 1996-97, the program's scope and the role of the state in the implementation of NCCP has expanded significantly. Specifically, the current-year budget included $600,000 for grants and $4.4 million for land acquisition by DFG and the Wildlife Conservation Board (WCB).
Budget Request. For 1997-98, the budget proposes to further increase the level of state funding for NCCP implementation to a total of $1.6 million for local assistance grants and $14.4 million for land acquisition for various departments. Figure 15 shows the proposed expenditures.
|Natural Community Conservation Planning
Land Acquisition and Local Assistance Grants
|Department and Purpose||Fund Source||Amount|
|Department of Fish and Game
|Reimbursements from Habitat Conservation Fund||$1.6|
|Wildlife Conservation Board
|Habitat Conservation Fund||6.4|
|State Coastal Conservancy
|State Coastal Conservancy
River Parkway Subaccount,
Analyst's Review. Based on our review, we conclude that Chapter 765 does not authorize the state, as part of its role in NCCP implementation, to provide local assistance grants or acquire land. Furthermore, as we discussed in our Analysis of the 1996-97 Budget Bill, we have the following concerns with the department's proposal.
Criteria for Allocating Funds for Endangered Species Conservation. The budget requests land acquisition funds not only for implementation of the NCCP program in southern California, but for implementation of other plans to preserve endangered and threatened species and their habitats. For example, the budget for WCB requests $1 million from the Habitat Conservation Fund to implement the Kern County Multiple Species Habitat Conservation Plan. (Please see WCB, Item 3640.)
We think that these requests for state funding for the acquisition, restoration, and management of land to protect endangered species raise significant policy issues for the Legislature in determining the state's overall role in conserving and managing its endangered species. Below we suggest criteria that the Legislature might use in determining that role.
Endangered Species Pilot Program Not Funded in Budget Year. In 1996, the Legislature took steps to better define the state's role in the conservation of threatened and endangered species. For example, Chapter 972, Statutes of 1996 (AB 137, Olberg) requires the Governor to establish a commission to study the economic impact of protecting threatened and endangered species and report its findings by December 31, 1997. Additionally, Chapter 974, Statutes of 1996 (AB 350, Bustamante) requires DFG--if funds are appropriated for this purpose--to develop recovery strategies for five threatened or endangered species, by January 1998, and implement those strategies upon approval by the Fish and Game Commission.
Our review indicates that the department is unlikely to meet Chapter 974's statutory deadline. This is because, although the costs to develop and implement recovery strategies could be in the millions of dollars annually, DFG has (1) requested no additional funding to implement Chapter 974 in the budget year and (2) submitted no proposal to redirect funds.
Request Raises Significant Policy Issues. In our view, Chapter 972 and Chapter 974 represent important steps towards defining the appropriate state role in funding the conservation of endangered and threatened species. However, the administration's proposal to expand the state's role in acquiring land and providing grants to implement the NCCP program in southern California and provide funds for implementation of other plans (such as in Kern County) to protect species raises significant issues outside the scope of Chapter 972 and Chapter 974 which the Legislature should review. Pending such review, and statutory direction on how the NCCP program should proceed, we recommend that the request for $16 million for local assistance and land acquisition for the NCCP program be denied. (Please see conforming write-ups in Item 3640 and Item 3760.)
Schedule Proposition 204 Funds at Reduced Level
We recommend that, in order to facilitate legislative oversight, a new budget Item 3600-001-0405 be added to provide $8 million to pay for the state's share of costs associated with implementation of the Central Valley Project Improvement Act. (Add new budget Item 3600-001-0405 for $8 million.)
Background. The federal Central Valley Project Improvement Act (CVPIA) of 1992 required the Secretary of the Interior to take specified actions relating to restoration of fish and wildlife in the Central Valley, including the development of a program to double, by 2002, the natural production of anadromous fish in Central Valley rivers and streams. (Anadromous fish include steelhead, salmon, and sturgeon.) The CVPIA specifies the projects and actions to be taken and requires the state to pay a share of their costs. Proposition 204, approved by the voters in November 1996, created the Central Valley Project Improvement Subaccount (CVPIS), and provided $93 million to be allocated by the State Controller to DFG and the Department of Water Resources to pay the state's share of these costs.
Budget Request. The Governor's budget proposes to allocate $10.4 million from CVPIS in 1997-98 to DFG to restore Central Valley fish and wildlife. These funds are not included in the budget bill. This is because the funds are proposed to be continuously appropriated to DFG. We have the following concerns with the budget request. (We discuss the use of Proposition 204 funds in the Crosscutting Issues section of this chapter.)
Recommendation. In order to further legislative oversight, we recommend creation of a new budget Item 3600-001-0405 for $8 million, to be scheduled in the budget bill for Central Valley fish and wildlife restoration as indicated in Figure 16.
|Department of Fish and Game
Central Valley Project Improvement Act Requirements
Estimated State Cost
|Anadromous Fish Doubling Program||$2.0|
|Reduce losses of anadromous fish from diversions||2.0|
|Install temperature control device at Shasta Dam||1.0|
|Participate in mitigation for Glenn-Colusa Irrigation District's
Hamilton City Pumping Plant
|Replenish spawning gravel and restore riparian habitat below Shasta, Folsom, and New Melones reservoirs||0.5|
|Construct seasonally operated barrier at head of Old River||0.5|
|Monitor fish and wildlife resources in the Central Valley||0.5|
|Restore striped bass fishery in the Bay Delta estuary||0.5|
Some Expenditures Can Be Shifted From
Fish and Game Preservation Fund to Proposition 204
We recommend that $196,000 requested for monitoring of Central Valley fish populations be shifted from the Fish and Game Preservation Fund Nondedicated to Proposition 204 funds (Central Valley Project Improvement Subaccount), because this is an appropriate use of Proposition 204 funds. (Reduce Item 3600-001-0200 by $196,000 and increase Item 3600-001-0405 by $196,000.)
The budget requests $783,000 for DFG to assist the U.S. Fish and Wildlife Service in monitoring Central Valley fish populations as required by the CVPIA. This amount includes $587,000 from the CVPIS (as shown in Figure 15 above) and $196,000 from the nondedicated account of the Fish and Game Preservation Fund (FGPF-ND). The goal is to assess the biological results and effectiveness of restoration actions required by the CVPIA.
Proposition 204 Is Appropriate Funding Source. Our review indicates that CVPIS is an appropriate fund source to support the monitoring program. This is because development of the monitoring program is one of the actions required by the CVPIA. While FGPF-ND can also be used to fund the activity, DFG has provided no justification for why all costs of the monitoring program should not be paid from the CVPIS.
Recommendation. We recommend that $196,000 requested for monitoring of Central Valley fish populations be shifted from the FGPF-ND to CVPIS (Proposition 204) funds, as this expenditure appears to be an appropriate expenditure of those Proposition 204 funds and it would free up FGPF-ND funds for other legislative purposes.
The budget requests $700,000 in Proposition 204 funds (Bay-Delta Agreement Subaccount) for DFG to place screens on water diversions and improve fish habitat in the Sacramento-San Joaquin Delta. The goal is to improve the viability of delta fish species, including both threatened and endangered species (such as winter run chinook salmon and delta smelt) and recreational species (such as striped bass).
Screening of Water Diversions is a Priority for Improving Delta Fish Survival. There are an estimated 1,800 unscreened water diversions in the delta providing water for irrigation and municipal and industrial uses. These unscreened diversions trap fish are one of the causes of the decline in various delta fish species. The Bay-Delta Agreement Subaccount of Proposition 204 provides a total of $60 million for projects to protect fish and wildlife species in the delta, including the screening of the unscreened diversions, as part of a broad approach to restoring the delta ecosystem. DFG indicates that it will screen ten diversions in 1997-98 out of the 1,800 that are currently unscreened.
Proposed Mitigation Is Not Based on Established Program. While DFG's proposal to screen water diversions and improve fish habitat in the delta is consistent with the requirements of Proposition 204, we are concerned that the department has not taken steps to ensure that the screening of delta water diversions accomplishes the long-term objective of restoring fish species. This is especially so given the slow rate--at proposed funding levels--at which delta diversions will be screened.
Specifically, the State Water Resources Control Board recommended in 1995 that DFG cooperate with federal agencies to develop a program to (1) evaluate the impact of delta water diversions on fish species and (2) establish priorities accordingly for screening diversions--either by state, federal, or local agencies or by local landowners--to maximize the effectiveness of screening. However, our review indicates that DFG has not followed this recommendation and has not established such a program.
Recommendation. We recommend that $700,000 requested from Proposition 204 bond funds to screen delta water diversions and restore habitat be approved, because these proposed expenditures are consistent with the requirements of Proposition 204. However, to ensure that the department's long-term approach to screening delta water diversions is coordinated with federal agencies and is effective, we further recommend adoption of the following supplemental report language:
It is the intent of the Legislature that the Department of Fish and Game
institute a program to evaluate the impact on fish species of water diversions within the Sacramento-San Joaquin Delta and establish priorities for
screening or relocating those diversions, as recommended by the State
Water Resources Control Board in its May 1995 Environmental Report
Appendix to the Water Quality Control Plan for the Bay-Delta. The department shall seek the cooperation of the U.S. Fish and Wildlife Service and
the National Marine Fisheries Service in instituting the program.
Budget Request. The budget requests $267,000 from the Striped Bass Stamp Dedicated Account in the FGPF for DFG to expand stocking of striped bass in the Sacramento-San Joaquin Delta. Although the department has stocked striped bass in the past, it has reduced its efforts in recent years due in part to funding limitations. The budget request is the first year of a proposed program to significantly expand DFG's efforts to stock striped bass. Specifically, the department indicates that in 1997-98 it will stock 500,000 striped bass (a 300 percent increase over the current-year level of stocking) and in subsequent years, it will request additional funds to increase the number of striped bass stocked in the delta to three million annually.
Analyst's Review. Our review shows that the department's proposal (1) is at odds with the efforts of state and federal agencies--including DFG--to improve the quality of the delta ecosystem and protect endangered and threatened species there and (2) has not been established as a cost-effective approach to restoring the long-term viability of the striped bass populations in the delta. Specifically:
Recommendation. In our view, it makes little sense to significantly expand the state's effort to restore the striped bass population in the delta through increased stocking when (1) stocking is at odds with current efforts of state and federal agencies to protect endangered and threatened delta fish species and (2) the department has not yet developed an effective approach to addressing the factors--such as delta water diversions--that limit striped bass population. Accordingly, we recommend that funding to increase stocking of striped bass be deleted. The Legislature should evaluate future proposals to increase the striped bass population in light of (1) the consistency of the proposal with the state's efforts to protect other delta species--including endangered and threatened species--and (2) the likely effectiveness of the proposal in increasing the long-term viability of striped bass.
Chapter 1140, Statutes of 1990 (SB 2149, McCorquodale) extended the sunset date on requiring a striped bass stamp for fishing striped bass from January 1991 to January 1995. Under Chapter 1140, funds from the stamp are deposited in the Striped Bass Stamp Dedicated Account in the FGPF, and are available for the preservation and enhancement of striped bass. The Governor's budget estimates that available resources in the dedicated account total $1.7 million for 1997-98. (The budget requests a total of $966,000 from the Striped Bass Stamp Dedicated Account, FGPF for support of the department in 1997-98.)
The department indicates that it will seek legislation in 1997 to reestablish the Striped Bass Stamp and the Striped Bass Stamp Dedicated Account in the FGPF. In the event that such legislation is not enacted, we think that the funds remaining in the dedicated account should be transferred to the FGPF-ND, as this would provide the Legislature with greater flexibility in spending those funds for its fish and game priorities. Accordingly, we recommend in Item 3600-001-0200, adoption of the following provisional language:
All funds remaining in reserve in the Striped Bass Stamp Dedicated Account in the Fish and Game Preservation Fund (FGPF), as of June 30, 1998, shall be transferred to the nondedicated account in the FGPF and shall be available for appropriation by the Legislature, if legislation reestablishing the Striped Bass Stamp is not enacted by that date.
The budget requests $1 million from the nondedicated account in the FGPF for expansion of the upland game bird program. Specifically, the department proposes to expand public communication, develop habitat, and increase public opportunities for hunting upland game birds (such as wild turkey and grouse).
Reserves Are Available in Dedicated Account. The upland game bird program is supported by revenue generated from the sale of an upland game bird stamp, which is required for hunting upland game birds. These revenues are deposited in the Upland Game Bird Heritage Dedicated Account. Our review indicates that there is a significant reserve of $1.3 million projected in the fund at the end of 1997-98. In our view, these funds are a more appropriate source of funding for expansion of the upland game bird program than the FGPF-ND. Appropriating $1 million for the proposed restoration activities would still leave a reserve of $227,000.
Accordingly, we recommend that $1 million requested to expand the upland game bird program be funded from the appropriate dedicated account of the FGPF instead of the nondedicated FGPF.
The DFG receives federal funds for programs including sport fish restoration and management of recreational hunting. For 1997-98, the budget requests $29.1 million in federal funds.
Department Has Consistently Overbudgeted Federal Funds. Our review indicates that DFG is unlikely to require this level of federal funds. This is because in recent years, the department has consistently requested federal funds spending authority that exceeded the level of federal funds available to the department. To adjust for this overbudgeting in future years, the department plans to revise its methodology for budgeting for federal funds.
Recommendation. Based on a five-year average of the department's expenditures of federal funds from 1991-92 through 1995-96, we estimate that the level of federal funds available to the department in 1997-98 will be about $24.9 million, or $4.2 million less than the amount proposed in the budget. Accordingly, we recommend a reduction of $4.2 million in the department's federal funds expenditure authority. This would provide a more accurate estimate of the amount of federal funds that the department is likely to expend in 1997-98. If during the budget year the department receives additional unanticipated federal funds, it can submit a request to the Legislature to spend those funds in accordance with Section 28.00 of the budget act.
The budget proposes $36.3 million for support of the board and its programs in 1997-98, a reduction of $1.8 million (or 4.8 percent) below current-year estimated expenditures. The reduction reflects mainly lower capital outlay expenditures by the board.
The budget requests $760,000 from the Environmental License Plate
Fund (ELPF) and $936,000 from the Public Resources Account for capital
outlay. According to the Department of Finance, no specific projects have
been identified for funding with these proposed appropriations. We see
no reason why the board should have discretion over these amounts for
unspecified uses. Doing so reduces the Legislature's oversight of these
funds and limits the use of these amounts for legislative priorities. Accordingly, we recommend that the funds be deleted.
Chapter 765, Statutes of 1991 (AB 2172, Kelley)--known as the Natural Community Conservation Planning (NCCP) Act--authorized the Department of Fish and Game (DFG) 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. As we discuss under the DFG (Item 3600), the budget is requesting significant increases in funding for NCCP-related activities--primarily to acquire land. Included in these requests are $8 million to the WCB to acquire property ($6.4 million) and to provide local grants ($1.6 million) for land acquisition, land management, and plan implementation.
Consistent with our analysis of the requests for NCCP funding under Item 3600, we think that the Legislature ought to first determine statutorily whether the state should fund NCCP land acquisition and local assistance grants before funding is provided. Accordingly, we recommend that the $8 million requested for WCB be denied.
The budget requests $1 million from the HCF for the board to acquire land to assist in the implementation of the Kern County Multiple Species Habitat Conservation Plan. The plan's purpose is to protect endangered and nonendangered species habitats within a 3,000 square mile area; and reconcile conflicts between endangered species and development, agriculture, and energy production such as oil and gas.
Multiple species habitat conservation plans are similar to NCCPs, and represent local and regional efforts to plan for resource and species conservation in a more coordinated manner while facilitating development. While it proposes to assist in the Kern County efforts, the board does not propose to provide funding to assist in implementation of other habitat conservation plans currently being implemented in the state. Additionally, the criteria by which the board selected the Kern County Multiple Species Habitat Conservation Plan as meriting state funding are not clear.
As with the NCCP program, we think that providing state funds to implement locally developed habitat conservation plans such as the Kern County Multiple Species Habitat Conservation Plan raises policy issues for the Legislature about the appropriate role of the state in funding the implementation of these plans, and the appropriate sources and level of state funding. Pending legislative review and policy direction on these issues, we recommend deletion of the requested funds. (Please see our writeup on the NCCP program in Item 3600, DFG.)
As we discuss in the Crosscutting Issues section of this chapter, Proposition 117 established the HCF, and requires that the HCF receive annual revenues of $30 million primarily for wildlife habitat acquisitions and improvements. To provide this funding level, Proposition 117 requires the transfer of (1) 10 percent of funds from the Unallocated Account, Cigarette and Tobacco Products Surtax Fund, and (2) additional funds from the General Fund to total $30 million. Proposition 117 allows the Legislature to substitute for the General Fund the transfer of other appropriate funds.
Our review indicates that the administration's proposal to fund the HCF in 1997-98 would result in a deficiency in the ELPF of about $1 million. This is because the administration proposes transfers into the HCF totaling only $28 million--$2 million short of the amount required by Proposition 117. Under the terms of Proposition 117, this shortfall would ordinarily be met by transferring funds from the General Fund to the HCF.
However, our review indicates that funding to cover this shortfall will be provided not by the General Fund but by the ELPF. Specifically, the proposed budget includes language (in Item 3640-311-0140) directing the Controller to transfer any funds necessary from the ELPF to the HCF in order to preclude a transfer from the General Fund to meet the requirements of Proposition 117. Our review further shows that transferring $2 million from the ELPF to the HCF will result in a deficiency in the ELPF, given other 1997-98 ELPF expenditures proposed in the budget.
In order to both (1) meet the requirements of Proposition 117 and (2) avoid either a deficiency in the ELPF or a transfer from the General Fund to the HCF in 1997-98, we recommend that the Legislature transfer $2 million from other appropriate special funds to the HCF. We think that an appropriate fund would be the Waterfowl Habitat Preservation Account in the Fish and Game Preservation Fund. This is because the account is one of the funds eligible for providing funds to the HCF. Moreover, the account is projected to have sufficient reserve in 1997-98 of $2.5 million to permit such a transfer. Accordingly, we recommend an increase in Item 3640-011-0211 of $2 million for transfer from the Waterfowl Habitat Preservation Account to the HCF.
Budget Request. The commission has the authority to require a dedication of land, or an easement, in order to provide public access to the coast. Such a dedication is typically done as a condition of approval for coastal development permits. The budget requests $100,000 from the General Fund for the commission to contract for development of a coastal public access implementation plan. The plan's purpose is to determine priorities for developing offers to dedicate land.
Lack of Funding Has Hampered Commission's Ability to Plan. According to the budget's supporting documents, a lack of staff funding at the commission has reduced its ability to (1) effectively and comprehensively track and monitor offers to dedicate land and (2) develop a statewide plan for implementing coastal public access. Our review shows that the commission currently has staff qualified to develop the plan, but would require additional funding in 1997-98 for their support because the current source of support funding--federal funds--is likely to be exhausted by September 1997.
Recommendation. Given the availability of staff expertise, we think it is likely to be more cost-effective for commission staff to develop the access plan instead of contracting out for the service. This is particularly so since the commission already maintains a database of the location of offers to dedicate land and will be responsible--in conjunction with the State Coastal Conservancy--for implementing the plan once it is developed. Accordingly, we recommend that the funds requested for contracts be provided instead for staff support.
The budget requests $6.3 million from the General Fund to establish wetlands mitigation banks and restore wetlands in southern California ($5.8 million) and the San Francisco Bay Area ($509,000), as indicated in Figure 17.
Wetlands Mitigation Bank. Traditionally, when a developer builds adjacent to or on top of wetlands, the developer is responsible for mitigating the impact of the development. Mitigation efforts can take the form of making improvements to the adjacent wetlands or developing new wetlands. The budget proposes a wetland mitigation "bank" as another way to mitigate development. Under this approach, developers would buy "credits" in a wetlands mitigation bank for wetlands they damage or destroy elsewhere as a result of a development project.
|Wetlands Mitigation Banks
|San Francisco Bay Area|
The budget proposes $6.3 million from the General Fund to restore three wetlands. Most of the funds ($5 million, or 87 percent) are for one wetlands restoration project in southern California, likely located at upper Newport Bay in Orange County. The remaining funds are for two unspecified projects in San Francisco Bay. A developer who needs to mitigate a development could buy "credits" in the bank thereby offsetting the costs of the wetlands restoration projects. We have the following concerns with the request.
Recommendation. In our judgment, wetlands mitigation banking represents a mechanism for potentially facilitating development while improving the quality of mitigation. However, without a commitment that developers will pay for their share of wetlands restoration project costs, and without further definition of (1) the state's ongoing role in managing the projects and (2) how the banks will operate, we think that funding these projects is premature. Accordingly we recommend that $6.3 million requested to restore three wetlands be denied.