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

Resources Agency (0540)

The Resources Agency through its various departments, boards, commissions, and conservancies is responsible for conservation, restoration, and management of California's natural and cultural resources. The following departments and organizations are under the Resources Agency:

The budget requests $226.6 million for the Resources Agency in 2001-02, an increase of about $95.6 million (or 73 percent) above estimated current-year expenditures. The increase reflects primarily an increase of $70 million from the General Fund for a River Parkways Program and $88.7 million in bond funds for the CALFED Ecosystem Restoration Program, and a decrease of $58.7 million in Propositions 12 and 13 bond expenditures.

River Parkways Program Should Be Defined Statutorily

The budget proposes $70 million from the General Fund for a River Parkways Program to significantly expand funding for river parkway projects. We recommend the enactment of legislation to define the program and establish a process and a set of criteria to prioritize river parkway projects statewide. We further recommend that the proposed $70 million be deleted and any additional funding for the River Parkways Program be included in that legislation. (Reduce Item 0540-101-0001 by $70 million.)

The budget proposes $70 million from the General Fund on a one-time basis for a River Parkways Program to be administered by the Secretary of Resources. The money would be used to provide grants for habitat acquisition, park development, riparian habitat restoration, bank stabilization, and development of public access and trails in the following areas:

• $25 million for the Los Angeles River (north).
• $15 million for the Los Angeles River (south).
• $7 million for the San Joaquin River Parkway.
• $8 million for the Tuolumne River Parkway.
• $1 million for the Guadalupe River.
• $4 million for the Sacramento River.
• $10 million for "opportunity matching" (to provide state matching funds when the opportunity of a worthy project arises).

Funding for River Parkway Projects Mostly From Bond Funds. Up until now, funding for river parkway projects has come mostly from bond funds. Specifically, Proposition 204 (1996) provided $27 million for a river parkway program. Approved by the voters in March 2000, Proposition 12 provided $33.5 million in additional funding for river parkways and Proposition 13 provided $95 million that could be used for the river parkway projects defined in Proposition 204.The agency indicated that most of the bond funds available for river parkways have been either encumbered or earmarked for specific projects.

Bond-Funded Programs Do Not Specify Project Criteria or Selection Process. Proposition 204 specifies a wide range of projects that may be funded with its bond funds. These include acquisition and restoration of riparian habitat and developing public access and providing recreational opportunities. However, Proposition 204 does not specify the selection process or define the criteria to be used in deciding which projects to fund. Similarly, Proposition 12 does not provide specific criteria or a selection process to allocate funds not already designated to particular projects in the measure. Proposition 13 also does not specify a project selection process or criteria other than requiring 60 percent of funding to be used in or near urban areas.

Proposed Program Expansion Lacks Details on Key Components of the Program. Our review of the budget's $70 million proposal for river parkways finds that it lacks key information necessary to evaluate this initiative. For example, there is no justification for the size of the expenditure amounts or justification as to why particular geographical areas were selected. The proposal also does not set out the priorities or criteria by which specific projects will be funded. Consequently, it is not known whether the funding will be directed at the highest statewide priorities or what the projects will achieve in terms of protection, restoration, and providing recreational opportunities.

Furthermore, the proposal does not describe how the program will be administered. For example, it is not clear whether the program will be administered as a competitive grant program. It is also not clear how much of the funding will be administered directly by the agency and how much will be administered by its constituent departments, some of which currently fund river parkway projects under various grant programs. Because the agency proposal does not request any staffing to administer the program, this raises additional concerns about the agency's capacity to develop and implement a River Parkways Program.

River Parkways Funding Should Be Provided Through Legislation. While providing additional funds for river parkways may have merit, we think the Legislature should define the program and establish a process including a set of criteria to prioritize river parkway projects statewide. We therefore recommend that any funding for a River Parkways Program be included in legislation defining the program and establishing criteria to prioritize river parkway projects statewide according to where they are most needed.

Additional CCRISP Funding Should Await Delivery of Current-Year Products

The budget requests $2 million to continue the California Continuing Resources Investment Strategy Project (CCRISP). The agency is scheduled to deliver by May 2001, two reports essential to the project's development in future years. Therefore, we withhold recommendation on the requested amount pending receipt of these products.

Recognizing the need for an assessment of the state's natural resources and a plan to guide acquisition and habitat restoration efforts, the Legislature in the 1999-00 Budget Act, directed the Resources Agency to develop a habitat blueprint and provided $250,000 for that purpose. The Legislature specified two goals for the habitat blueprint:

• To assess the current condition of the state's natural resources and habitat.
• To establish a long-term set of funding and policy priorities for future investment in resources protection and habitat acquisition and preservation.

The agency renamed the project, California Continuing Resources Investment Strategy Project (CCRISP) and in May 2000 requested $2 million for the 2000-01 costs of the multiyear project.

Work Products Defined and Time Lines Set. The Legislature approved funding for CCRISP in the 2000-01 Budget Act, subject to the approval of a work plan by the Department of Finance and the Legislature. The agency submitted a work plan in November 2000, that was subsequently approved by the Legislature. The work plan identified time lines and work products for the project over the six-year span of the project, as shown in Figure 1. Specifically, during the current year, the agency is scheduled to report on the methodology to be used and an evaluation of key data available for the development of CCRISP. In the following years, a resource assessment and a report on conservation priorities will be developed.

Decisions on New Funding Should Await Receipt of Interim Work Products. The budget requests $2 million for the third-year funding of CCRISP. Work products to be delivered in the current year are particularly important to the success of developing a statewide conservation blueprint. Specifically, the report on the methodology to be used in identifying conservation priorities (due April 2, 2001) will determine how the agency will develop conservation priorities statewide. The evaluation of available data (due May 1, 2001) will provide an indication of what additional data collection and analysis are needed. At the time this analysis was prepared, work on these products was underway and the agency reports it intends to meet the schedule. In order that the Legislature can be provided with more information on the progress of CCRISP, we think it is prudent for the Legislature to await receipt of these products before approving additional funding for CCRISP. Accordingly, we withhold recommendation on $2 million pending receipt of the products.