LAO 2003 Budget Analysis: Resources

Legislative Analyst's Office

Analysis of the 2003-04 Budget Bill

Resource Assessments: Improving Effectiveness and Creating Savings

A number of departments within the Resources Agency engage in resource assessment activities intended to determine the condition of natural resources in the state. In the sections that follow, we review the resource assessment activities of the Departments of Fish and Game (DFG) and Forestry and Fire Protection (CDFFP), as well as the Secretary for Resources, and identify opportunities for funding shifts and program reductions, some of which will create General Fund and Environmental License Plate Fund savings. We also discuss opportunities to increase the value of the information collected.


What Are Resource Assessment Activities and Why Are They Important? We have defined resource assessments broadly to include a number of different activities related to determining the condition of natural resources in the state. For example, these assessment activities can include identifying the presence or absence of a particular plant or animal species, the size of the population, and the geographic distribution of that species. Activities involve either collecting original data or compiling existing data and can be species or habitat specific or be focused on a geographic area. Lastly, assessment activities can also include the analysis of the information in order to report on the overall health of a species or habitat and the factors that threaten it. 

Resource assessment activities can serve an important function for resource departments. The information can be used in making investment, regulatory, and management decisions. For example, in order to invest in the land or other conservation strategies to protect a particular threatened or endangered species, the state needs to know, at a minimum, where that species occurs. For those departments issuing permits for development or resource extraction, basic information on the nature and condition of natural resources that occur in the geographic area relevant to the permit is essential to the environmental review process. Lastly, information on species population and trends can serve as one measure of the effectiveness of the policies and investments intended to protect that species.

Opportunities for Fee Cost Recovery And Efficiencies at Fish and Game

We recommend that resource assessment activities in support of the Department of Fish and Game's environmental review process related to permit issuance and development approvals be partially funded by permit applicants and developers. We further recommend that the department partially fund its marine resource assessment activities by increasing fees on ocean-related fishing activities. Lastly, we recommend program reductions in light of opportunities for efficiencies. (Reduce Item 3600-001-0001 by $2.2 million and increase Item 3600-001-0200 by $2 million.)

Department Carries Out Activities Related to Permit and Development Approvals. The DFG has responsibility for managing and protecting the state's fish and wildlife resources. The department's responsibilities include reviewing environmental documents and issuing permits for a variety of activities which may impact natural resources. For example, the department is responsible for issuing permits for activities which may impact streambeds or the taking of endangered species. The department also reviews environmental documents under the California Environmental Quality Act (CEQA) for development proposals that may impact fish and wildlife resources. The department also participates in the Natural Communities Conservation Planning (NCCP) process, in which the department issues permits for development activities in exchange for a plan that provides for regional protection of multiple species.

The department engages in many resource assessment efforts to support its review of environmental documents prior to permit issuance or development approvals. For example, the department currently is conducting studies related to species located in areas for which the department is engaged in NCCPs and the monitoring of timber areas in the Sierra Nevada. 

Some Resource Assessment Costs Are Related to Permit and Development Approvals. While the department was not able to provide us with the exact amount of its resource assessment expenditures that are related to permit or development-related approvals, we estimate the department spends between $10 million and $12 million (all funds) annually for this particular purpose. These activities are funded from a variety of fund sources, including the General Fund, federal funds, and fees that are deposited in the Fish and Game Preservation Fund. While it is difficult to isolate the General Fund contribution for this particular activity, we estimate it could be up to around $3 million. Fees appear to support little, if any, of the department's resource assessment activities.

Fees Should Cover Resource Assessment Costs for Permit and Development Approvals. Many permit applicants and developers benefit from the department's resource assessment activities. This is because the assessments are used by the department in the environmental review of permits and conservation plans. Once these permits and plans are approved, the development process can go forward, which benefits developers. However, the public also benefits from these activities because many of the assessment activities are also related to the department's mandate to manage the state's natural resources for the benefit of all of the state's residents. We therefore conclude that the assessment activities that are related to permit and development approvals should be at least partially funded by the permit applicants/developers who benefit directly from the department's environmental review.

Given the direct benefit to permit applicants and developers from the department's resource assessment activities, we think that it would be appropriate to shift a portion of the support for resource assessment from the General Fund to fees. Specifically, we recommend a reduction of $1.5 million from the General Fund and an increase of like amount in the Fish and Game Preservation Fund (the fund into which most of DFG fees are deposited). This represents partial funding (about 50 percent) of the estimated General Fund costs of the department's resource assessment costs that are related to permit and development approvals. (Please see our write-up on Timber Harvest Plan Review Fees in this chapter for a discussion of opportunities to recover from fees the department's costs, including for resource assessment, related to timber harvest plan review.)

The department has a number of existing fee authorities that could be used to generate the increased fee revenues to support resource assessment. For example, Section 711.4 of the Fish and Game Code gives the department broad authority to defray through fees the costs of managing and protecting fish and wildlife resources for its CEQA-related activities. In addition, Section 1607 of the Fish and Game Code authorizes the department to charge fees to cover all costs related to the streambed alteration permit program and Section 2840 of the Fish and Game Code allows the department to recover all costs associated with its NCCP activities. For some fees, the specific fee schedule is set in statute, so revising the fees to increase them would require a statutory amendment. In other cases, the authorizing statute for the fee provides the department with broad authority to set fees and therefore would allow fee increases to be made administratively.

Fees Should Cover Some Costs of Marine Management Activities. The Marine Life Management Act requires the department to prepare an annual report on the status of sport and commercial fisheries managed by the state. As part of the report, the department gathers data on individual fisheries and uses this information for the management and regulation of commercial and recreational fisheries. We estimate the assessment costs related to this effort to be about $1 million annually paid for from the General Fund.

We think the costs to conduct the marine assessments should be partially borne by the commercial and recreational fishing activities that benefit from the management of those resources. We therefore recommend a reduction of $500,000 from the General Fund and an increase in the Fish and Game Preservation Fund of a like amount to support these activities. In order to raise these additional fee revenues, we also recommend the enactment of legislation to assess a surcharge on each of the many existing DFG fees that are assessed on ocean-related fishing activities.

The DFG's Resource Assessment Coordination Can Be Achieved With Fewer Resources. Beginning in 2001-02, the department's budget has included two positions and $200,000 from the General Fund to coordinate and prioritize certain monitoring and assessment programs. Our review finds that these coordination activities can be absorbed by the existing conservation planning staff, and we therefore recommend the deletion of these positions and associated funding.

Increased Value Can Be Achieved From Forestry's Resource Assessment Efforts

In order to improve the effectiveness of the resource assessment activities of the California Department of Forestry and Fire Protection, we recommend the enactment of legislation that would require that (1) the department include an analysis of the costs and benefits of various resource management policies as part of its assessment activities and (2) the resource assessment information collected by the department be made more readily available to the timber harvest program. Lastly, we recommend expenditure reductions for nonessential activities. (Reduce Item 3540-001-0140 by $99,000).

The Forest and Rangeland Assessment Report. The CDFFP, under the policy direction of the Board of Forestry, provides fire protection services on timberlands and rangelands, owned privately or by state or local agencies. In addition, CDFFP (1) regulates timber harvesting on forestland owned privately or by the state and (2) provides a variety of resource management activities on these lands. As part of these responsibilities, CDFFP compiles and assesses data related to California's forest and rangelands. Statute requires CDFFP to conduct an assessment of these lands and to report its findings every five years to the Secretary for Resources and the Board of Forestry. As specified in statute, the Legislature intended that these assessment activities provide the basis for forest and rangeland policy recommendations. The latest assessment report was due in January 2002, but has yet to be completed. The department, however, anticipates this report will be released soon.

Based on our discussions with the department and our review of draft reports, we find that the department has compiled a substantial amount of data on forest and rangeland resources which provide information on the status and trends of those resources. However, we find that the report does not present the assessment information in such a way that it can easily be used by policymakers as a tool for policy decisions. For example, while the draft report includes data on the number of large, old trees, sometimes referred to as old growth, there is no discussion on the various policy options (including costs and benefits of those options) related to the preservation of old growth trees.

Resource Assessment Needs a Fiscal and Policy Framework. We think that the resource assessment activities of the department could be targeted more effectively if the statute requiring the five-year forest and rangeland assessment report were clarified to explicitly require the department to analyze the costs and benefits of a range of forest and rangeland management policy options as part of the report. For example, the Board of Forestry and the Legislature are often faced with resource policy decisions such as protecting the areas adjacent to fish bearing streams and addressing concerns with clearcutting. Information from the department's assessment activities, if focused on policy issues (including a discussion of costs and benefits of policy options) could be a valuable policy tool for policymakers. We think the department could include a fiscal and policy framework for their next report using existing resources by redirecting their efforts to focus on major forest and rangeland policy issues. 

Relevant Assessment Information Should Be Available for Timber Harvest Review. The department is required to review all plans to harvest timber on nonfederal lands, and considers issues such as the impact of timber harvesting on water quality. However, we found that information collected by the department's resource assessment staff (such as the impact of timber harvesting on riparian vegetation and data on stream and road systems) has not been made easily accessible to the department's timber harvest review staff. This is due in large part to the fact that the timber harvest review program operates as a separate program and that there appear to have been minimal efforts to date to integrate the resource assessment information into the timber harvest review program. To address this concern, we recommend that the Legislature amend statute governing the department's forest and rangeland assessment program to specify that relevant resource assessment information shall be made readily available to the timber harvest review program. We think that this requirement is achievable within existing resources.

Nonessential Assessment Expenditures Should Be Eliminated. In our review of the department's resource assessment efforts, we have identified one program, the Sierra Nevada Initiative Resource Assessment ($99,000 from the Environmental License Plate Fund [ELPF]) that we conclude is not essential to the department's core assessment and monitoring activities. The program mainly funds contracts to support local and regional research and outreach projects in the Sierra Nevada, rather than the department's resource assessment activities. We therefore recommend the elimination of this program and a corresponding reduction of $99,000 from ELPF. The resulting savings in ELPF could be used to free-up General Fund proposed for support of other resources programs.

Resource Secretary's Assessment Activities Can Be Reduced

Both major data efforts at the Secretary for Resources, the Legacy Project and The California Environmental Resources Evaluation System (CERES), have major weaknesses. We recommend eliminating the Legacy Project and significantly reducing CERES. These reductions will result in savings of $2.3 million to the Environmental License Plate Fund that could be made available for other legislative resource priorities. (Reduce Item 0540-001-0140 by $2,307,000.)

Recommend Eliminating the Legacy Project. The budget proposes about $1.6 million for the California Legacy Project. The project (under its current and previous names) has received $5.8 million in funding since 1999-00. The intent of the program as presented to the Legislature is to assess the current condition of the state's natural resources and habitat and to establish a long-term set of funding and policy priorities for future investment in resource protection and habitat acquisition and preservation. While we find the project has increased the level of communication among the various resource departments regarding existing assessment and conservation activities, we recommend that the project be eliminated for the following reasons.

For these reasons, we recommend that funding for the Legacy Project be eliminated in the budget. This would provide $1.6 million in ELPF which could free-up a like amount of General Fund in other resources programs.

Recommend Funding for CERES Be Reduced. The CERES is an information system developed by the Secretary of Resources to facilitate access to a variety of electronic data related to natural resources. The CERES system is available on the Internet to the public, free of charge. The budget proposes $937,000 (ELPF) for CERES, a slight reduction from the current year. We recommend significantly reducing funding for CERES because of a number of factors that reduce the value of the system:

While we have raised concerns with CERES, we are recommending reducing rather than eliminating funding. This is because dismantling the program totally would not allow state departments and the public to make use of the state's past investment to compile resource information. Therefore, we recommend the Legislature reduce funding for the program by $737,000 (ELPF), leaving $200,000 in the budget year which is sufficient funding to provide for computing costs to maintain the existing site, but provides no funding to expand or add new information to the site. This would present the Secretary of Resources with the opportunity to develop a strategic plan and budget proposal for the program that could be considered by the Legislature in a future year. The resulting savings in ELPF could free-up a like amount of General Fund in other resources programs.

Return to Resources Table of Contents, 2003-04 Budget Analysis