California Farm Bureau Federation Director of Water Resources Danny Merkley told the board, “As farmers, as businesspeople, we understand there are cost increases. Some of those the board may have some control over, some of them, maybe it is more the Legislature. Nonetheless, these fee increases and the cost of compliance as these programs become more and more complex are death by 1,000 cuts — not just at the state water board but other agencies throughout the state. It is getting to be an insurmountable piling on.”
The state water board last week considered proposed resolutions to adopt emergency regulations revising the core regulatory fee schedules, including water-quality fees for programs, such as the Irrigated Lands Regulatory Program in the Waste Discharge Permit Fund and water-rights fees in the Water Rights Fund.
Related to the WDPF, the board approved the staff recommendation to increase the per acre fee in the WDPF by 12 cents, increasing the rate to 87 cents per acre. This would cover $1 million from the state budget to fund five new positions in the ILRP. The board also approved use of the WDPF reserve to offset the remaining 7 percent shortfall. The ILRP expenditures are projected to exceed revenue by approximately 22 to 23 percent, 16 percent as a result of the five new positions in the budget and 7 percent from staff and program cost increases.
The WDPF houses funds for: National Pollution Discharge Elimination System; storm water; waste discharge requirements (or general orders); land disposal; Clean Water Act 401 certification; confined animal facilities; the ILRP and now cannabis, which will be kept structurally separate in the WDPF.
Adopted as an emergency fee-setting regulation, the increases are effective for the 2017-18 fiscal year that began July 1.
Responding to the proposed fee increases, Merkley reminded the board that the contribution by agriculture to enhance water quality in the state is a public benefit.
“There is a need for some General Fund infusion of these programs. There’s significant public benefit, but agriculture is carrying the burden, not only in the cost of compliance, but the fees,” Merkley said.
Back in 2011, the California Legislature shifted the shared cost of water-quality programs from taxpayers to permit fee payers, increasing the fee from 12 cents per acre to 56 cents an acre and since then, the fee increased again to 75 cents an acre.
Eric Larson, administrator of the San Diego Regional Irrigated Lands Group, pointed out that the “increase in the acreage fee from 75 cents to 87 cents is an increase we hate to see. It just raises the cost we have to pass onto our members that is above the costs they are incurring for compliance with the General Ag Order issued by our region.”
“We want to guard against a change to create what others see as a more equitable cost allocation that results in a cost shift to the smaller irrigated lands groups,” Larson said.
Farm Bureaus in Sacramento and Yolo counties wrote comment letters suggesting that the State Water Board change its methodology to create a more equitable allocation of costs. Sacramento County Farm Bureau Executive Director Bill Bird noted: “The Sacramento Valley since 2005 has worked hard to protect water quality through an annual investment of $1.5 million in surface water-quality monitoring, analysis, (and) outreach to owners of irrigated agriculture,” adding that, “as a result, we have fewer water quality issues than elsewhere in the state and require fewer staff resources.”
John Russell, deputy director for the State Water Board Division of Administrative Services, said he would like to hold more stakeholder workshops to develop proposals more fully.
Pertaining to the Water Rights Fund, projected to decrease by $750,000, the staff recommendation before the board was not approved. However, the board adopted a 5 percent annual fee increase for water rights permits, licenses and pending applications. The annual fee increased from $0.066 to $0.069 per each acre-foot greater than 10 acre-feet. The board also adopted a fee of $750 for small irrigation use registrations for cannabis and set the filing fee to establish the “Cannabis Statement” at $200.
Bob Gore of the Gualco Group Inc., which represents a number of agricultural clients including the California Association of Winegrape Growers, said, “We still are mystified by where our fees are going. We have no idea exactly what is being accomplished year to year.”
Gore provided as an example the permit backlog cited for a budget change proposal considered by a Senate budget subcommittee in 2016. The BCP noted that pending in June 2015 were 385 applications, 304 registrations, 578 petitions and 1,626 expired permits.
“It cites backlogs respectively of 14 years, nine years, eight years and astoundingly, 44 years. So our question is what’s been done in the last two fiscal years?” Gore asked.
Speaking about the proposed increase to $100 per year from the current $100 every five years for livestock stock pond registration, Kirk Wilbur, director of government affairs for the California Cattlemen’s Association, said, “That percentage increase is quite alarming. It is unreasonable to increase those fees all at once by 400 percent.”
In many cases, Wilbur said, the value of the water right itself may be less than the annual fee, adding that the amount would add up for ranchers who hold multiple livestock stock pond registrations.
“Under the current fee schedule, that individual (holder of 14 registrations) pays $1,400 every five years. Under the proposed schedule, the individual would pay $7,000 every five years,” Wilbur said, recommending that the board reject the fee increase and work with stakeholders to establish something more reasonable.
State water board vice chairman Steve Moore said, “We need to put on the brakes a little bit. This may need more discussion and coming back with a revised proposal that takes into account a phasing in. Maybe the end game isn’t at the 400 percent level, but maybe at the 100 or 200 percent level.”
In addressing the shortfall in water-rights fees in the Water Rights Fund, the state water board decided that current water rights registration fees remain, except for cannabis, while state water board staff work with stakeholders to develop something more reasonable for the water rights registration fees.
Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com. Permission for use is granted by the California Farm Bureau Federation.