Legislative Analyst's Office Analysis of the 2001-02 Budget Bill

California Coastal Commission (3720)

The California Coastal Commission was created by the state Coastal Act of 1976. In general, the act seeks to protect the state's natural and scenic resources along California's coast. It also delineates a "coastal zone" running the length of the California coast, extending seaward to the state's territorial limit of three miles, and extending inland a varying width from 1,000 yards to several miles. The commission's primary responsibility is to implement the act's provisions. It is also the state's planning and management agency for the coastal zone. The commission's jurisdiction does not include the San Francisco Bay Area, where development is regulated by the Bay Conservation and Development Commission.

The Coastal Commission has its headquarters in San Francisco and six regional offices throughout the coastal zone. The commission proposes expenditures totaling $15.8 million in 2001-02. This represents a decrease of $571,000, or 3.5 percent, below estimated current-year expenditures.

Permit Activity Outpacing Staff Resources

Over the past decade, staffing for the Coastal Commission's coastal management program has grown by about 14 percent. However, the size and complexity of the workload associated with this program has increased even more.

As shown in Figure 1 (see next page), the primary workload of the Coastal Commission's coastal management program—which oversees planning and development in the coastal zone—has grown over the past decade. Specifically, the number of coastal development permits reviewed by the commission increased by about 15 percent and the number of permit appeals referred to the commission increased by about 230 percent since 1992-93.

The increase in permit activity is due in part to the strength of the state's economy in recent years. Moreover, with a shrinking amount of undeveloped land in many coastal communities, efforts to further develop these coastal areas can be controversial and contentious. This, in turn, has contributed to the increasing number of local planning decisions that are appealed to the commission. The commission must devote substantial staff time to reviewing these often-complex permit applications and appeals. While the commission's staffing has grown by about 14 percent over the same period, this growth has not kept pace with the increasing volume and complexity of this workload.

Commission Not Performing Required Local Coastal Program Reviews

The commission has not performed a statutorily-mandated review of 91 percent of the state's local coastal programs (LCPs) within the past five years. The failure to review LCPs leaves the state susceptible to lawsuits. We recommend an augmentation of $1.4 million and 14.5 positions to reduce the backlog of LCP review.

Land use planning in the coastal zone, as in the rest of the state, is the primary responsibility of local governments. However, the Coastal Act imposes a number of requirements on land use in the coastal zone. Most significantly, the act requires local governments to adopt LCPs to govern development of land in their jurisdictions that lie within the coastal zone.

The commission certifies LCPs for conformity with the Coastal Act when they are developed, and whenever they are amended. To date, LCPs for 88 segments of the coastal zone have been certified by the commission. In addition, statute requires the commission to review certified LCPs at least once every five years (1) to assess whether the LCPs are being implemented in conformity with the Coastal Act, and (2) if necessary, to make suggestions for corrective action.

Most LCP Reviews Overdue. Currently, 80 certified LCPs have not been reviewed within the past five years. This amounts to 91 percent of all certified LCPs. As Figure 2 shows, most LCPs are between six and ten years overdue for review.

The commission asserts that it lacks staff resources to perform LCP reviews at a rate that would meet the mandated five-year cycle. In 1999-00, the commission received baseline funding for two permanent positions dedicated to LCP review. Aside from these two positions, the department directs its staff first to meet its permit issuance workload, rather than LCP review, because of the greater urgency of permit review deadlines, and the more immediate impact of permitted projects on coastal resources.

Failure to Review Can Weaken Coastal Protection. The LCPs provide an important link between local permit activity and coastal protection. The LCPs are intended to guide local planning in a way that balances economic, environmental, public access, and other needs. However, over time, the cumulative impact of development in and around the region, changes in laws and regulations, and advances in the understanding of ecosystems and watersheds, may cause LCPs to become outdated. Periodic reviews and updating of LCPs are intended to address this problem. To the extent the commission fails to conduct these five-year reviews, however, local permit actions, and consideration of appeals of those actions by the commission, can be based on outdated standards.

In addition, by reviewing LCPs every five years the commission would be able to assess the extent to which local development activity has in fact been consistent with the Coastal Act. These reviews thus can serve as an important oversight mechanism to monitor compliance with state law. By neglecting these reviews, the commission is less able to fulfill its responsibility as the state's planning and management agency for the coastal zone.

Failure to Review Leaves State Susceptible to Litigation. By not fulfilling its statutory obligation to review LCPs in a timely fashion, the commission becomes susceptible to litigation. Indeed, in 1999 the commission was sued for approving an amendment to an outdated LCP. The commission lost this case in superior court, and was ordered to reverse its approval. The department is currently party to another lawsuit relating to its failure to review an LCP within the statutory five-year time frame. Responding to lawsuits can require considerable staff time and expense. In addition, a series of losses in the courts could diminish the commission's credibility and effectiveness in enforcing the Coastal Act.

Failure to Review Can Impede Local Planning and Development. In the superior court case noted above, the court prevented the commission from approving an amendment to an LCP. The amendment was sought by a property owner who needed the amendment to proceed with a development. Although the commission had determined that the amendment was appropriate, the court decided that no amendment could be approved until the entire LCP had undergone the required five-year review. To the extent that the court's decision could be applied to other LCPs, the commission's failure to perform five-year LCP reviews could impede coastal planning efforts.

Legislature Calls for Workload Estimate. The commission's failure to conduct periodic reviews of LCPs was discussed during last year's budget hearings. (Please see pages B-94 through B-96 of our Analysis of the 2000-01 Budget Bill.) As a result of those hearings, the Legislature required the commission to provide, by January 10, 2001, a report on the scope of work and resources required to eliminate the review backlog.

Work Plan Identifies Need for Additional Staff. As required, the commission's report identifies the staffing need for completing reviews of high-, medium-, and low-priority LCPs. These staffing estimates appear in Figure 3. The commission estimated that it would require an additional 83.5 personnel-years in order to eliminate its current backlog. However, the commission suggests that the backlog could be eliminated over a five-year period, requiring the dedication of only 16.5 positions.

Eliminating Backlog Would Require Baseline Augmentation. Our review finds that the commission cannot redirect existing staff resources to the performance of five-year reviews of LCPs without impeding its ability to perform other statutorily-mandated activities. The commission does, however, currently have two positions dedicated to LCP review. Therefore, we recommend that the Legislature augment the commission's budget by $1.4 million and 14.5 positions. We further recommend the adoption of the following budget bill language to ensure that these new positions, as well as the two existing positions, are dedicated to LCP review.

Budget Language for Item 3720-001-0001:

Of the amount included in this item, $1,560,000 shall be for support of 16.5 positions. These positions shall be dedicated exclusively to the review of local coastal programs as (LCPs) required by Public Resources Code 30519.5, and as outlined in the commission's LCP review work plan dated January 10, 2001. The review of LCPs shall follow the priorities established in the work plan. The department shall annually, on or before January 10, provide to the Legislature a report that updates the review status of all LCP segments.