The Regional Boards Have Not Adequately Considered the Cost of Implementing Pollution Control Requirements
When establishing pollutant control plans, the regional boards have not always adequately considered the costs to local jurisdictions involved in complying with these plans. State law requires regional boards to include economic considerations as a factor when establishing maximum pollutant levels. However, state law does not define what those economic considerations must include, and the State Water Board has provided limited guidance regarding the nature of these economic considerations. Nevertheless, we would expect regional boards to determine the overall cost of storm water management to local jurisdictions and estimate the costs that local jurisdictions will incur in complying with the new pollutant limits being established. Regardless of any legal requirements, this information is critical because both the costs for complying with a new pollutant control plan and the local jurisdictions’ ongoing costs for managing storm water affect their financial ability to comply with the plans. If the regional boards had this information, they could better aid local jurisdictions in complying with pollutant control plans by adjusting the timelines for compliance with the plans or identifying more cost‑effective methods of compliance.
The cost to achieve pollutant limits in pollutant control plans can be substantial. For example, Los Angeles estimated that it would cost 41 local jurisdictions a total of about $1.4 billion in construction costs to build devices to reduce the discharge of metal pollutants into the Los Angeles River, and an additional $153 million in annual maintenance costs after the local jurisdictions completed construction of the devices. The local jurisdictions in the Los Angeles region must comply with this new pollutant limit by January 2028.
Although the regional boards have generally complied with state law by providing cost estimates for the pollutant limits in the pollutant control plans we reviewed, they frequently either did not use appropriate methods for developing those estimates or did not document the sources they used to develop those estimates. To determine whether the regional boards adequately considered costs when adopting pollutant control plans, we reviewed pollutant limits in 20 of the 49 pollutant control plans adopted by Central Valley, Los Angeles, and San Francisco Bay between 2002 and 2016 that affect local jurisdictions operating storm sewer systems. We reviewed pollutant control plans issued as far back as 2002 because the process that the regional boards use to develop these plans has not changed and because the local jurisdictions’ deadlines to achieve the pollutant limits have not yet lapsed for most of these 20 plans. We expected that the regional boards would strive to develop supportable cost estimates, given the magnitude of these costs. However, in six of the 20 pollutant control plans we reviewed, the regional boards did not document the sources they used to develop those estimates. Additionally, in three of the pollutant control plans we reviewed at San Francisco Bay—including one of the six that did not have documented sources—the regional board did not use appropriate methods to develop the cost estimates.
In total, we question the support for the cost estimates of eight of the 20 pollutant control plans we reviewed. For example, when setting pollutant limits for pesticides in a pollutant control plan for San Francisco Bay Area creeks, the San Francisco Bay board estimated the costs of compliance by reviewing a State Water Board study that calculated the annual total cost per household for storm water management across six cities, only one of which was in the San Francisco Bay Area. The San Francisco Bay board then multiplied the annual total cost per household by the estimated number of households in the San Francisco Bay Area to determine its total annual cost for storm water compliance. Finally, the board used 3 percent of that amount to estimate the total cost for local jurisdictions in the San Francisco Bay Area to comply with the pesticide pollutant limits. The assistant executive officer at the San Francisco Bay region stated that the San Francisco Bay board used 3 percent because local jurisdictions were already taking some actions to comply with the pollutant limits, so it concluded that the additional costs would be between 1 percent and 5 percent of total costs. He explained that local jurisdictions would have informed the board if they had concerns about the estimates. Nevertheless, we question the appropriateness of developing these estimates for pesticide pollutants based on other jurisdictions’ total storm water management costs, which include the costs of complying with multiple pollutant limits. Further, other localities are subject to pollutant limits for different types of pollutants that have unique requirements for addressing them, meaning their costs are likely not comparable to those for local jurisdictions in the San Francisco Bay Area.
In contrast, the regional boards used appropriate methods for developing cost estimates and documented the sources used to develop them in several other pollutant control plans we reviewed. For example, the Los Angeles board used cost estimates that the USEPA and the Federal Highway Administration developed to determine the estimated costs for installing filters to remove metals from storm water discharged into the Los Angeles River. Using appropriate methods to develop cost estimates gives both the regional boards and local jurisdictions a better understanding of the financial impact that additional pollutant reduction requirements will impose on local jurisdictions. If the regional boards do not use appropriate methods to develop their cost estimates, any subsequent assessment of local jurisdictions’ ability to achieve pollutant limits could be inaccurate. Also, if regional boards do not document the sources they use to develop their cost estimates, the local jurisdictions that will ultimately be responsible for those costs will lack assurance that those cost estimates are accurate.
Despite being aware of the significant costs local jurisdictions incur, the regional boards did not always take into account the total cost of complying with pollution control requirements. We found that for 12 of the 20 pollutant control plans we reviewed, the regional boards did not consider all of the costs that local jurisdictions had previously incurred as a result of other storm water management requirements. In particular, Los Angeles did not consider the costs local jurisdictions had already paid in seven of the eight pollutant control plans we reviewed in that region. For example, Los Angeles implemented several pollutant limits in a pollutant control plan for the Dominguez Channel. In developing those limits, it identified some specific methods local jurisdictions could use to comply with them, including dredging Los Angeles Harbor and installing storm water filters, and it estimated the cost of complying with the pollutant limits at either about $64 million or $80 million per year for the next 20 years, depending on the compliance method used. However, Los Angeles did not document any consideration of the amounts that the local jurisdictions had already spent to manage storm water. One of the local jurisdictions subject to this limit is the city of Los Angeles, which as of 2012—the same year that the Dominguez Channel pollutant limits became effective—was already subject to 19 different pollutant control plans in other water bodies and had spent $35.4 million on storm water operations in fiscal year 2012–13.
The environmental program manager at Los Angeles stated that the Los Angeles board considers input from local jurisdictions when it establishes deadlines to comply with pollutant control plans and assumes that local jurisdictions take into consideration their existing expenditures and ability to obtain funding when providing their input on the amount of time they believe is needed to meet the deadlines. However, as discussed above, we found that Los Angeles did not adequately document consideration of local jurisdictions’ total storm water management costs when developing pollutant control plans. The environmental program manager at Los Angeles explained that there is no legal requirement to do so, and also stated that the costs for complying with various pollutant control plans are not entirely discrete and unique, meaning that the methods for complying with one plan can also address compliance with several other plans. Nevertheless, this is not a sufficient reason to ignore the total burden facing local jurisdictions. The board could instead take into consideration the cost efficiencies presented by any methods that address multiple pollutant control plans when evaluating the impact of new pollutant requirements on local jurisdictions’ overall storm water management costs.
It is important that regional boards identify and understand local jurisdictions’ existing costs before imposing additional requirements. Pollution control requirements cannot improve water quality if local jurisdictions are unable to comply with them. For example, a city official from Bellflower stated that addressing the costs of storm water management had resulted in funding cuts to public safety, recreation, and capital improvement projects.
The State Water Board Has Not Provided Guidance to Local Jurisdictions for Tracking Storm Water Costs, Diminishing the Ability of Regional Boards to Evaluate the Burden on Local Jurisdictions
Federal regulation requires local jurisdictions to report their projected costs for meeting storm water requirements to the regional boards and to annually report their actual costs. As a form of proactive governance, the State Water Board could have provided statewide guidance to local jurisdictions on how to track and report their costs as a way to assist the regional boards in developing pollutant control plans. In the absence of statewide guidance, the three regional boards we reviewed also did not provide guidance to the local jurisdictions. The lack of such guidance has resulted in inconsistencies in defining and reporting storm water management costs. For example, in the Central Valley region, we identified two cities that accounted for street sweeping costs differently, which resulted in inconsistencies in the information they submitted to the regional board. According to a supervising engineer at the city of Sacramento, the city does not count any of its street sweeping expenditures as a storm water management cost because it performs this sweeping as part of its regular operations, regardless of a requirement by the regional board. In contrast, according to the environmental services supervisor at the city of Modesto, that city designates its street sweeping expenditures as a storm water management cost because street sweeping is required under its storm water permit. Without uniform cost guidance, the regional boards are unable to obtain accurate information on the burden local jurisdictions face in complying with storm water pollutant limits.
San Francisco Bay does not annually collect information on the cost of storm water management from local jurisdictions and is therefore not fully informed of the total costs these jurisdictions incur. Staff at San Francisco Bay reported that inconsistency in cost reporting among local jurisdictions makes the information difficult to use. The absence of local jurisdictions’ actual costs has impaired San Francisco Bay from considering the financial impact of new pollutant limits. For example, in 2004 San Francisco Bay attempted to analyze the impact of new pollutant limits for mercury on the total burden of local jurisdictions, but because it lacked information on its local jurisdictions’ actual storm water management costs, it based its analysis on cost estimates developed in 2003 for the Los Angeles region. Based on that analysis, it estimated that local jurisdictions spent approximately $45 million annually to manage storm water. The following year, San Francisco Bay completed a similar analysis for another pollutant limit using data from a 2005 State Water Board survey of six cities in the State, and it concluded that the local jurisdictions’ costs for managing storm water were substantially higher, at $72 million. In both cases, San Francisco Bay extrapolated cost data from studies conducted in other parts of the State and did not know the amounts that local jurisdictions in its own region actually spent. The assistant executive officer for San Francisco Bay agreed that collecting cost information from local jurisdictions would help improve San Francisco Bay’s understanding of the costs its local jurisdictions incur, as well as the actual costs for implementing various pollution control methods.
The Central Valley board complies with the federal reporting regulation by annually collecting actual and projected expenditure information from local jurisdictions. However, the board does not verify the accuracy of the information that local jurisdictions submit or make use of it. According to the environmental program manager for Central Valley, the lack of consistency in how local jurisdictions track and report their costs makes it difficult to use the information or verify its accuracy.
Los Angeles also collects both projected and actual costs from its local jurisdictions annually, but the information it collects is inconsistent. We obtained the annual cost reports for fiscal years 2012–13 through 2015–16 that Los Angeles local jurisdictions submitted to the Los Angeles board. However, when compiling these data to determine the total costs that the jurisdictions spent for storm water management, we identified numerous errors and omissions, including inaccurate and missing information. For example, one local jurisdiction presented identical expenditures for three consecutive years in each of the categories, making us question whether it was actively tracking and reporting its actual expenditures. Other jurisdictions reported costs for individual cost categories that were greater than the total cost reported for the jurisdiction as a whole. Consequently, we concluded that presenting a summary of costs for all of these jurisdictions would be misleading. However, the city of Los Angeles, which incurs a substantial portion of the storm water expenditures in the region, does track its revenue and expenditures for storm water separately as a part of its formal budgeting process. Table 3 presents its revenue and expenditures for the past several fiscal years, including fiscal year 2016–17.
|Storm water pollution charge||30.1||28.8||28.5||28.2||28.3|
|Development and inspection fees||0.6||0.9||1.0||1.5||1.9|
|Difference between revenue and expenditures||4.1||9.8||7.7||22.8||18.1|
* Other sources includes grant funds received, reimbursement from other city funds, and interest earnings. These amounts increased significantly in fiscal year 2015–16 due to an additional $15 million received from the Los Angeles Department of Water and Power for storm water capture and infiltration
† Expenditures include joint projects where the city of Los Angeles works collaboratively with other local jurisdictions.
The environmental program manager at Los Angeles reported that the board noticed the problems with the cost reports and sought explanations and corrections from the local jurisdictions for most of the problems. She also stated that the inconsistency in cost reporting among local jurisdictions makes the board reluctant to exclusively rely on the information because the board lacks confidence in its accuracy.
The State Water Board has been aware of this inconsistency in cost reporting for years but has yet to correct the problem. In a 2005 study the State Water Board commissioned, its consultant found that local jurisdictions were inconsistently reporting and tracking storm water activities and associated costs. It recommended that the State create cost‑reporting guidance for local jurisdictions to allow accurate cost analyses and comparisons. The State Water Board is in the best position to provide such guidance as it can ensure consistency in reporting throughout the State. Despite that recommendation, the State Water Board has not developed such guidance. According to the chief deputy director at the State Water Board, it has not issued guidance to local jurisdictions because it lacks expertise in municipal finance and accounting, and it has never sought that expertise so that it could create the recommended guidance because neither state nor federal law requires it to provide such guidance. Further, according to the chief deputy director, if the board wants to ensure that the local jurisdictions follow State Water Board guidance on cost reporting, it would need to adopt as a regulation any cost‑reporting guidance it develops. However, until this guidance is prepared and disseminated, the information that regional boards receive from local jurisdictions will continue to be inconsistent, and the regional boards will not be able to thoroughly evaluate the effects of the requirements they impose on local jurisdictions or the local jurisdictions’ ability to pay for those efforts.
The State Water Board and Regional Boards Have Established Some Pollutant Control Plans Without Seeking Key Information, Resulting in Unnecessary Costs for Local Jurisdictions
The regional boards serve an important role by establishing pollutant control plans for local jurisdictions, which drive storm water management efforts and the related costs for local jurisdictions to implement those efforts. However, in many instances the regional boards have developed the pollutant control plans without obtaining sufficient information on the water bodies they are regulating to tailor these plans adequately, which can result in some local jurisdictions incurring excessive costs or failing to achieve water quality goals. In other instances, the State Water Board and regional boards have continued to use outdated information to establish some pollutant control plans, causing local jurisdictions to pay more than necessary to address storm water pollution. Additionally, Los Angeles used inaccurate information when developing and implementing certain pollutant limits.
The Regional Boards Established Some Pollutant Control Plans Using Insufficient Information
The Los Angeles and Central Valley boards were not sufficiently thorough in their development of certain pollutant control plans because they did not tailor the pollutant limits to the particular water bodies. The extent to which some pollutants are harmful varies based on the characteristics or conditions of the water body, such as the water body’s temperature and mineral content. For example, some water bodies reduce the toxic effects of lead while others increase them. Federal regulation establishes standard maximum pollutant levels for regional boards to impose in specified water bodies, but it allows a regional board to deviate from those levels when the board has information that indicates that a different level would continue to be protective of the water body.
Modifying maximum pollutant levels to align with the unique conditions of the water body can result in significant differences in the actions local jurisdictions must take to address pollutant control plans, which correspondingly affects the costs incurred to perform those actions. For example, a study conducted by a group of cities in the Los Angeles region showed that the level of a metal pollutant in the Los Angeles River could be higher than the federal maximum pollutant level and still be safe. The Los Angeles board responded by changing the maximum pollutant level for the Los Angeles River from the federal level to the level referenced in the study. In 2015 Los Angeles estimated that as a result of the change, the expected costs to comply with the pollutant control plan—which local jurisdictions must comply with by January 2028—would be between $340 million and $1.3 billion less than they would have been otherwise. Additionally, if a regional board does not take the steps necessary to learn that the characteristics of a particular water body render some pollutants more toxic than they would be in other water bodies, the regional board could establish pollutant control plans that are insufficient to improve water quality to safe levels.
We reviewed pollutant limits in 20 pollutant control plans that the regional boards established and found that the Los Angeles board imposed four and the Central Valley board imposed one without obtaining all relevant information about the related water bodies, despite the potential impact on local jurisdictions and the environment. For example, the Los Angeles board established limits for two pollutants in the Los Angeles River using the federal maximum pollutant levels instead of adjusting them to meet the unique characteristics of that water body. When we inquired about those decisions, the environmental program manager at Los Angeles acknowledged that the federal levels were stricter than they might need to be but explained that the information needed to modify the levels was unavailable because no one had performed a study. Despite not having this information, she stated she believed the pollutant limits were appropriate because the USEPA developed the federal levels to be protective of most species in water bodies throughout the nation, meaning that they are appropriate for all water bodies.
Although federal regulation allows states to use federal maximum pollutant levels to establish their pollutant limits, they may not result in the most cost‑effective or environmentally protective outcomes. During our review of pollutant limits in 20 pollutant control plans, we identified several other examples of pollutant limits for which Los Angeles did seek additional information through studies of a water body and because of the water body’s conditions, it adopted limits that were less strict than the federal levels, such as the metal pollutant limit for the Los Angeles River discussed previously. In these situations, the local jurisdictions would be able to comply with storm water requirements more cost‑effectively.
The regional boards often rely on local jurisdictions, nonprofit environmental organizations, and other public agencies to conduct studies to obtain relevant water body information. Under State Water Board policy, local jurisdictions that are subject to pollutant limits are responsible for providing the necessary information on the water body to justify any modifications to pollutant limits. However, officials at the local jurisdictions we visited expressed concern with the cost of conducting such studies. For instance, the city of Los Angeles reported that it provided about $900,000 of the $2.2 million required for a study to determine an appropriate pollutant limit for the metal pollutant in the Los Angeles River. In our review of pollutant control plans, we also found that Central Valley had identified studies it could have commissioned to obtain better information and estimated the costs for these studies as ranging from $400,000 to more than $15 million.
According to the chief deputy director at the State Water Board, studies to determine the appropriate pollutant limits for metals in water bodies will often be valuable when local jurisdictions are struggling to meet the pollutant limits because the studies will typically cost less than the advanced treatments required to meet the unmodified pollutant limits. The revised limit for the metal pollutant in the Los Angeles River was expected to reduce the costs of complying with the pollutant control plan by $340 million to $1.3 billion. This example demonstrates how critical these studies are and that they should be performed when appropriate. Nevertheless, the regional boards informed us of their reluctance to conduct their own studies because they lack the staff resources and funding to do so. Currently, the State does not provide funding for such studies.
For the pollutant control plans we reviewed, we found that the San Francisco Bay board used information on a specific water body, when appropriate, to tailor the pollutant limits to that water body. In some instances, the board used information on water bodies provided by the San Francisco Estuary Institute, a nonprofit environmental organization. The San Francisco Estuary Institute operates a regional monitoring program in coordination with San Francisco Bay, wherein local jurisdictions and other entities such as industrial waste dischargers collaborate on efforts to monitor the region’s water bodies. The information that San Francisco Bay obtained from this regional monitoring program aided it in tailoring pollutant limits in its water bodies. This type of collaboration between local jurisdictions and other entities could benefit local jurisdictions in other regions because it would allow them to pool resources to conduct studies of water bodies in their areas.
The State Water Board and Regional Boards Require Local Jurisdictions to Monitor Some Pollutants Unnecessarily
Local jurisdictions have been unnecessarily monitoring certain bacteria in their water bodies because the State and the regional boards have not adopted USEPA guidance in a timely manner. In January 1986, the USEPA issued formal guidance recommending that states use certain indicators to test for the presence of harmful levels of bacteria and discouraged the use of previously issued indicators because they were deemed less effective. Nevertheless, the State Water Board continues to require regional boards to use those now‑outdated indicators for establishing pollutant control plans for ocean waters. Consequently, the San Francisco Bay board established pollutant limits for an ocean water body that contained the outdated indicators in addition to the USEPA’s recommended indicators. Additionally, although the State Water Board’s policy for bacteria presently addresses only ocean waters, the three regional boards also used the outdated indicators in some instances to establish pollutant control plans for its freshwater bodies. As a result, the regional boards have been unnecessarily requiring local jurisdictions to monitor outdated indicators in these water bodies as well.
When we discussed this disparity with the chief deputy director, he said the State Water Board is planning to issue new statewide maximum pollutant levels for bacteria and has prepared a draft document containing proposed maximum pollutant levels that align with the USEPA’s recommendations. However, the State Water Board has not yet established a specific date for formally adopting the proposed levels. He also said that the State Water Board had not prioritized the issuance of new bacteriological levels for ocean water that match USEPA guidance because state law regarding waters adjacent to public beaches requires coastal communities to monitor for the outdated indicators. Although state law does require such monitoring, it allows the use of different indicators if, based on the best available scientific studies, the alternative indicators are as protective of public health. As previously noted, the USEPA determined that its recommended indicators were superior to the outdated indicators. The State Water Board and regional boards’ delay in adopting the USEPA guidance has resulted in local jurisdictions incurring unnecessary costs over several years for monitoring the outdated indicators. These costs could have been avoided if the State Water Board and regional boards had not delayed in adopting the USEPA guidance. Because the regional boards do not collect cost information that can be relied upon, as we described previously, we were not able to determine the actual costs that local jurisdictions incurred to monitor the outdated indicators.
We also determined that the Central Valley and San Francisco Bay boards developed pollutant control plans that required local jurisdictions to monitor for certain pesticides that the USEPA has banned or restricted for private use. Staff at both Central Valley and San Francisco Bay reported that as a result of these USEPA restrictions, local jurisdictions rarely exceed the limits for those pesticides. However, the regional boards still require the local jurisdictions to monitor for them. If local jurisdictions have demonstrated that they no longer exceed pollutant limits, and federal restrictions on the pollutants make it unlikely that local jurisdictions will exceed those limits in the future, the local jurisdictions should not be expected to continue monitoring for those pollutants.
According to a report on these pesticides that Central Valley provided, approximately 4 percent of the water sampled by Sacramento County local jurisdictions between 2010 and 2016 that were subject to these limits exceeded the pesticide limits, which means that 96 percent of the samples for the local jurisdictions did not exceed the limits. According to the assistant executive officer at San Francisco Bay, the board does not enforce the requirement to monitor the pesticide. The assistant executive officer informed us that local jurisdictions should be aware that they no longer have to monitor for the pesticide because their storm water permits do not expressly require them to do so. Nevertheless, the pollutant control plan for San Francisco Bay explicitly states that local jurisdictions must monitor for the pesticide. By not updating the monitoring requirements that are no longer necessary, the San Francisco Bay board risks creating confusion among local jurisdictions regarding the need to monitor those pollutants, which can result in some jurisdictions incurring unnecessary costs. According to the assistant executive officer, the board is considering removing the requirements. He further noted that the time and effort required to change a pollutant control plan is the reason why the board has not yet removed the monitoring requirements.
Los Angeles Used Inaccurate Information When Developing and Implementing Certain Pollutant Limits
In addition to Los Angeles’s use of insufficient or outdated information, we identified two instances in which that board erred in its responsibilities for developing pollutant limits or overseeing their implementation, resulting in inaccurate information that local jurisdictions used to plan their storm water management efforts. In the first instance, we determined that Los Angeles used incorrect methods to determine two pollutant limits. When establishing limits for a group of 14 pollutants, Los Angeles decided on a particular methodology. However, it deviated from that approach without specific justification when it established the limit for two of the pollutants, calculating their limits using a less stringent method than desired for the water body and resulting in one limit that was four times less strict than intended and another that was nearly three times less strict. When we brought this issue to Los Angeles’s attention, its environmental program manager acknowledged the errors and stated that the board would need to revise those limits.
In another instance, Los Angeles did not sufficiently review one group of local jurisdictions’ storm water management plans, resulting in those local jurisdictions following an approved plan for more extensive pollutant removal methods than necessary. Los Angeles’s permit allows local jurisdictions to develop storm water management plans detailing the methods they will use to comply with the pollutant limits that the permit imposes. The local jurisdictions submit these plans to the Los Angeles board for review and approval. The environmental program manager cited an instance in which staff discovered an error in a storm water management plan submitted by a group of local jurisdictions a year after the Los Angeles board approved the plan. The error pertained to a calculation used to determine the measures needed to sufficiently mitigate storm water pollution. The group used a pollutant limit in its calculation that was nearly 10 times stricter than was necessary, which resulted in it developing more stringent and more costly mitigation measures for that pollutant. A year after approving the plan, Los Angeles contacted the local jurisdictions to inform them of the error. In response, the local jurisdictions acknowledged the error and stated that they intended to correct it, although they had not done so as of January 2018. The local jurisdictions also noted that as a result of the error, they would be reducing the extent of their mitigation efforts that had been scheduled to begin in 2017, which we expect would likely result in lower costs than originally anticipated.
According to the environmental program manager, this error occurred for a single calculation affecting one pollutant limit in one plan, out of several hundred calculations conducted for various pollutant limits. The environmental program manager also stated that Los Angeles did not feel it was necessary to review other plans to ensure that it did not overlook similar mistakes in other jurisdictions’ plans because its process is to review the plans every two years. The environmental program manager provided us with the document that Los Angeles distributes to local jurisdictions providing requirements for preparing the storm water management plans and checklist that it uses when conducting internal reviews to ensure local jurisdictions meet these requirements. Accordingly, it appears that Los Angeles has a process for periodically reviewing the appropriateness of storm water management plans.
The State Water Board’s Statewide Trash Policy Has Resulted in Some Local Jurisdictions Unnecessarily Redirecting Resources for Storm Water Management
The State Water Board’s adoption of a statewide trash policy has led certain local jurisdictions to expend resources to address a pollutant of lower concern than other pollutants within those jurisdictions. In 2015 the State Water Board adopted a policy prohibiting the discharge of trash into water bodies (trash policy). Although there are no federal water quality criteria or approved guidance for evaluating the discharge of trash into water bodies, federal law is broad in the types of pollutants it allows states to regulate. Further, the USEPA has communicated that states have the authority to regulate trash. However, even though the State Water Board may have the authority to issue a trash policy, it should not do so if complying with the policy results in local jurisdictions unnecessarily redirecting resources when they do not currently have harmful levels of trash in their waters.
Many local jurisdictions in California do not have waters known to be harmed by trash. Under the federal Clean Water Act, each state is required to create a list of all water bodies where the level of pollutants in the water body interfere with the uses of the water body, such as public water supplies, propagation of fish and wildlife, or recreational purposes (polluted waters list). For example, the polluted waters list identifies water bodies containing toxic levels of mercury. According to the State Water Board’s staff report developed in support of the trash policy, only four of the nine water regions in California have known trash problems. Although Los Angeles and San Francisco Bay have water bodies on the polluted waters list, Central Valley does not.
To comply with their joint storm water permit, local jurisdictions in the Sacramento area in 2017 identified known pollutants and initially ranked trash as 22nd in order of concern. Given that Sacramento is the largest urban area in the Central Valley region and trash is a more significant problem in urban areas, other nonurban areas of the region are even less likely to be negatively affected by trash. However, the local jurisdictions in the Sacramento area selected four pollutants, including trash, to prioritize their efforts, citing the State Water Board’s trash policy as their justification for changing the prioritization. Some of the pollutants the local jurisdictions elevated trash above include fipronil, an insecticide that the USEPA lists as a possible cancer‑causing substance in humans, and E.coli, a type of bacteria linked to health problems in humans. A supervising engineer at the City of Sacramento Department of Utilities stated that implementing the trash requirements would also result in significant additional expenditures, particularly in capital improvements.
According to the chief deputy director, the State Water Board believes it is in a better position than the regional boards to identify pollutants that are important to address statewide. He also stated that unlike other pollutants that dissolve in water, trash may flow from one region to another, making it necessary for the State Water Board to intervene. However, the staff report used by the State Water Board to support the trash policy is focused on problems with trash in coastal communities, as evidenced by the referenced studies being primarily conducted in coastal regions such as the San Francisco Bay and Los Angeles regions where trash impairment has been documented. As we noted earlier, many areas throughout the State do not have the same concerns regarding trash as Los Angeles and San Francisco Bay.
We believe these local jurisdictions’ efforts would be better directed toward pollutants that currently impose greater threats to their water bodies. Although Central Valley does not have any water bodies on the polluted waters list for trash, the trash policy will require local jurisdictions in this region to dedicate resources to reducing trash in their water bodies. These jurisdictions have until December 2018 to complete their planning efforts. To comply with the trash policy, local jurisdictions will have to install equipment, such as screens on storm drains, to minimize trash discharge. Although Central Valley has not yet estimated how much it will cost its local jurisdictions to address this policy, Los Angeles estimated that the cost to install and maintain these screens for all communities along the Santa Monica Bay will be between $1.6 million and $7.1 million per year for the first five years, with annual maintenance costs of $2.7 million in subsequent years.
Although these costs could differ for local jurisdictions in the Central Valley, addressing the trash policy requirements will nevertheless result in local jurisdictions having less funding available to address other pollutants that are of greater concern. The environmental services supervisor at the city of Modesto stated that many solutions for addressing trash are cost‑prohibitive to the extent that funding them would not leave sufficient funds to maintain existing storm water infrastructure. Additionally, according to the executive officer at the Central Valley board, complying with the trash policy will likely cost the more rural and low‑income local jurisdictions more per capita than the amounts projected by the State Water Board’s cost estimate because of their smaller populations. The executive officer said that the State Water Board appears not to have performed a robust analysis of the impact of the trash policy on smaller rural municipalities that are not within a larger metropolitan area. However, according to the chief deputy director, the State Water Board feels confident that it adequately considered the costs for smaller and more rural local jurisdictions to comply with the trash policy. In its analysis, the State Water Board considered costs based on land use and the size of the local jurisdiction and considers the analysis valid for all local jurisdictions in the State.
The State Water Board believes that a statewide trash policy is necessary because trash is a serious issue in California and, according to the chief deputy director, will become more problematic if not addressed promptly by all local jurisdictions. Although such a policy may be appropriate in areas where trash is an excessive pollutant, many of California’s water bodies have not been determined as being at this level. The chief deputy director also justified the State Water Board’s trash policy by stating that it will supersede regional policy and eliminate the need for regional boards to develop their own trash policies or pollutant control plans in the future. Although the State Water Board appears to be proactive in its efforts to address water pollutants, local jurisdictions should not be required to pay for implementing a statewide trash policy when that is not warranted by the condition of their water bodies. Such a requirement will cause local jurisdictions to have fewer resources available for addressing water pollutants they have determined as currently posing a greater threat to the environment in their areas. Instead, the State Water Board could wait to implement the trash policy until a region’s water bodies have been determined as harmed by trash.
Common Funding Sources for
Storm Water Management
• General fund revenue: A local jurisdiction that does not have sufficient revenue from other sources will have to supplement storm water spending with revenue from its general fund.
• Storm water fees: Some local jurisdictions have adopted a fee structure that allows the jurisdiction to collect a fee from property owners.
• Development fees: Local jurisdictions can charge a fee to individuals seeking services, such as building permit reviews or inspections.
• Grants: Limited grant funding is available from the State through bond funds and the California Department of Transportation.
Sources: California State Auditor's review of the sources of revenue for storm water management for a selection of local jurisdictions.
Local Jurisdictions Have Had Limited Ability to Obtain Funds for Storm Water Infrastructure, but Recent Legislation May Make More Funding Available
Local jurisdictions have limited options for covering the costs of storm water management, as described in the text box. Meanwhile, changes to permits have caused concern among storm water managers at local jurisdictions about increased future costs, and many capital projects remain unfunded that would help jurisdictions comply with their permit requirements. For example, because of the addition of the trash policy discussed previously, the city of San Mateo plans to install 10 trash‑capture devices throughout the city. However, the city has not yet identified a funding source for nine of the 10 devices in this capital project, which are expected to cost a total of $11.8 million. To determine how cities have been financing storm water management and pollutant mitigation, we reviewed funding information from seven cities across the three regions and identified common sources of funding.
Requirements in state law have limited local jurisdictions’ ability to impose storm water fees on properties within their geographic areas. Proposition 218, approved by voters in 1996, requires a majority of voters to approve property‑related fees, with the exception of sewer and water fees. Fees for sewer and water services are approved if after the local jurisdiction proposes the fee, a majority of property owners do not write in to the local jurisdiction to oppose it. However, fees for storm water management require approval by a majority of voters, a significant limit on the ability of local jurisdictions to generate revenue to help pay for it. Only three of the seven cities we reviewed had revenue from these property‑related fees. Two of these cities faced stagnant fee revenue as they determined that a fee increase was unlikely to receive voter approval. The other city experienced small increases in fee revenue resulting from new property development, and although it had considered a fee increase, the city deferred that proposal because of higher priority initiatives.
In October 2017, the governor approved legislation that clarified Proposition 218 by defining the term sewer to include both sanitary sewers and storm water sewers. This legislation went into effect January 1, 2018. Consequently, a local jurisdiction is now able to impose or increase storm water fees if a majority of property owners do not write in to oppose the fee—a substantially lower burden than obtaining a majority vote through a ballot measure. The change will likely result in an easier process for local jurisdictions to establish these fees.
Because of the challenges that cities have historically faced with increasing or implementing storm water fees, they have turned to other sources of funding for storm water management. Six of the cities we researched charge fees for services and licenses, such as permits for new development or required facility inspections, to support their storm water management. Four cities relied to some extent on their general fund, which is their primary operating fund and includes revenue from sources such as property and sales taxes. However, as this fund supports most city government functions, more funding allocated to storm water management will mean less funding available for other important activities. As discussed previously, a city official from Bellflower stated that addressing the costs of storm water management had resulted in funding cuts to public safety, recreation, and capital improvement projects.
The demand for another funding source—grants from the State—has far exceeded the funding available. The passage of statewide bond measures in 2006 and 2014 made $282 million available for storm water grants, of which $95 million has not yet been appropriated to fund projects as of January 2018. In previous rounds of funding, the State Water Board awarded $82 million in grant funding. In 2016, which was the latest round of funding, the State Water Board received 84 applications requesting grant funds totaling $322 million. Using scoring criteria that included assessments of technical feasibility and cost‑effectiveness to evaluate the proposals, the State Water Board awarded $105 million for 27 projects. State law requires that grant awards made pursuant to the 2014 bond measure include at least a 50 percent funding match from the local jurisdiction unless certain criteria are met for a reduced match. The majority of the entities that were awarded grant funds pledged a match of more than $1 million. For example, the city of Los Angeles was awarded a $7 million grant but provided $9.6 million of its own funds as a match. Overall, those local jurisdictions that were awarded grant funding provided $182 million in matching funds, representing an aggregate match of 63 percent. However, matching requirements and subsequent resource commitments for operations and maintenance can pose a substantial financial burden on cities, which may discourage some of them from applying for these grants. Additionally, these grant funds can be used only for capital projects, which does not address the difficulties cities face to sufficiently fund regular operations for their storm water programs, as discussed earlier in this section.
Some of the cities whose storm water funding we reviewed received support from other government sources. The California Department of Transportation (CalTrans) is responsible for mitigating storm water pollution from state roads, and the State Water Board allows CalTrans to fund projects in local jurisdictions for this purpose. Two of the cities we reviewed—Bellflower and San Mateo—took advantage of this funding source. In entering into these projects, CalTrans agreed to reimburse local jurisdictions for the capital costs, and the local jurisdictions are responsible for managing the projects and for subsequent operation and maintenance. For example, the city of Bellflower entered into a $13 million agreement with CalTrans in June 2016 to construct a project to capture storm water. Because the city did not need to provide matching funds for the project, there was no up‑front capital cost to the city, unlike the commitment required for a state grant. The project is scheduled to be completed in 2019, at which time the city of Bellflower will be responsible for the costs of maintaining the facility. In addition, the city of Torrance received a grant of nearly $300,000 from the U.S. Bureau of Reclamation for use from September 2012 to April 2015 towards a $3.6 million storm water project.
Several of the cities we reviewed have begun implementing projects that benefit them in multiple ways, including by improving storm water management. These efforts provide greater opportunities for seeking funding from other available sources. Staff from several cities stated that in addition to or in lieu of capital improvements specific to storm water, they have incorporated elements that address storm water needs into other infrastructure projects. For example, the city of San Mateo has funded street improvement projects that include elements of low impact development, which, as discussed in the Introduction, involves managing storm water as close to the source as possible, thus reducing maintenance costs. Because these are street projects, the city is using transportation funds generated by a local sales tax to help finance them. Likewise, the city of Baldwin Park was awarded a CalTrans grant for increasing active transportation, such as walking and biking. The city intends to use the grant funds to develop a bike path, which an engineer with the city’s Department of Public Works informed us will include elements that will benefit the city’s storm water management. In addition to incorporating funds pertaining to transportation projects, cities may be able to add storm water management elements to projects for waste management, parks and recreation, and flood control.
The State Water Board’s Division of Financial Assistance provides information through its website regarding available funding sources that it administers and other funding sources. The website has information on two applicable storm water grant programs, although the majority of the funds for the storm water grants has been awarded and applications for the remaining $95 million balance mentioned previously were not yet being accepted as of January 2018. The State Water Board is also a member of the California Financing Coordinating Committee, which serves as an information resource regarding funding options for infrastructure projects. In 2017 the committee held six funding fairs at locations throughout the State.
Additionally, in 2015 the State Water Board, in collaboration with some regional boards, created a formal strategy for maximizing the efficient use of storm water as a resource. One of the components of the strategy was to identify and evaluate existing funding opportunities and determine potential barriers to making use of them. The State Water Board is responsible for issuing a report, due in fall 2018, summarizing the limitations of current funding and presenting recommendations for increasing funding.
Regional boards have provided limited guidance to local jurisdictions on funding opportunities and could do more to ensure that the information is thorough and up to date. The storm water manager at the Central Valley board informed us that he attempts to connect permit holders directly with organizations providing funding opportunities and with staff at the State Water Board’s Division of Financial Assistance. Staff at all three regional boards stated that they notify local jurisdictions of funding opportunities and are willing to make themselves available to help local jurisdictions with grant proposals. However, the storm water funding information on the websites of two regional boards is insufficient or outdated. The San Francisco Bay board’s website does not have a dedicated page pertaining to funding, and the Central Valley board’s website contains outdated information, such as links to grants that are no longer accepting applications. For example, in January 2018, that website highlighted an announcement of a U.S. Department of Transportation grant program with an application deadline of April 2016. Additionally, neither regional board included a link on the storm water funding section of their respective websites to the California Financing Coordinating Committee website.
Los Angeles’s storm water funding page on its website also contained limited and outdated information, but when we brought this issue to the attention of board staff, Los Angeles subsequently replaced the storm water funding page on its website with a new funding opportunities page, which includes information on state grants, multi‑benefit projects, and the California Financing Coordinating Committee. The environmental program manager at Los Angeles explained that the website had been recently redesigned and updated, but the former funding page was inadvertently left active.
Cities in each of the three regions we reviewed have had opportunities to provide input to the regional boards on developing storm water permits, allowing the cities to have some influence on the ultimate requirements. The regional boards should similarly work with their local jurisdictions to determine what kinds of additional guidance related to funding would be helpful and what funding methods jurisdictions have implemented that may be useful to others. The regional boards could then work with the State Water Board through a committee to generate best practices for storm water financial management and funding approaches, including techniques such as assessing specific fees or partnering on multiuse projects. The regional boards could also identify best practices already in use or being considered by local jurisdictions, such as the city of Los Angeles’s ordinance regarding low impact development, and provide information on these topics. Finally, the State Water Board and regional boards could ensure that all available resources are provided on their respective websites to allow permit holders in all locations access to current and complete information.
To promote the establishment of appropriate pollutant limits, the Legislature should amend state law to direct the State Water Board to assess whether a study of a specific water body is justified and, if so, to require the appropriate regional board to ensure that the study is conducted by the regional board or the applicable local jurisdictions. For example, a study could be justified if the water body’s condition might warrant modifying a maximum pollutant level, if the study could be performed cost‑effectively, and if the study’s benefits are likely to reduce local jurisdictions’ costs or improve protection of the water body’s uses. The State Water Board should seek additional funding for local jurisdictions to conduct studies if it believes additional resources are needed.
State Water Board and Regional Boards
- The State Water Board should develop guidance by August 2018 for regional boards to document estimates of the costs local jurisdictions will incur in order to comply with pollutant control plans. These procedures should also address the need to use appropriate methods to develop those estimates, to document the sources they use to develop the estimates, and to document consideration of the overall cost of storm water management to local jurisdictions when completing an economic analysis as part of developing pollutant control plans. Additionally, the documentation of cost estimates should include, where applicable, the impact other pollutant control plans will have on the costs local jurisdictions are expected to incur.
- Once the State Water Board has developed cost‑estimation guidance, the regional boards should follow this guidance.
- To ensure that the regional boards obtain adequate and consistent information on the storm water management costs local jurisdictions incur, the State Water Board should develop statewide guidance by August 2018 for local jurisdictions on methods for tracking the cost of storm water management. If the State Water Board believes it does not have the expertise to develop such guidance, it should hire or contract with an expert in municipal finance who can assist in developing that guidance.
- If the State Water Board believes regulations are necessary to ensure that the regional boards and local jurisdictions follow its guidance regarding adequate and consistent information pertaining to their costs for storm water management, the State Water Board should adopt such regulations.
- Once it has distributed its guidance, the State Water Board should work with the regional boards to develop an annual review process of the information the regional boards receive to help ensure its consistency with the guidance.
- Until the Legislature amends state law, the State Water Board should provide guidance to the regional boards on when studies of specific water bodies should be conducted and assist the regional boards in obtaining funding for those studies.
- The State Water Board should direct its staff and those of the regional boards to revise their storm water management requirements when staff become aware of changing circumstances that would make certain monitoring by local jurisdictions unnecessary.
- The State Water Board should revise its trash policy to focus it on local jurisdictions that have water bodies that are harmed by trash, as identified by the polluted waters list. In addition, the State Water Board should review the polluted waters list at least biannually to identify any additional water bodies recently determined to be harmed by trash and impose its trash policy on the applicable jurisdictions.
- To ensure that information regarding funding options available to local jurisdictions is consistent and current, the State Water Board and regional boards should work together to provide accurate information on their websites that is readily accessible, and the State Water Board and regional boards should remove outdated information by May 2018.
- To better provide comprehensive information on funding sources and storm water financial management for local jurisdictions, the State Water Board should create a committee by August 2018 to identify the informational needs of jurisdictions and create best practices for storm water financial management and financial approaches. This committee should include representatives from the State Water Board’s Division of Financial Assistance, the regional boards, and various local jurisdictions.
- San Francisco Bay should comply with federal regulations and require local jurisdictions to report annually the projected and actual costs of complying with their permits.
- Los Angeles should correct its pollutant control plan where it miscalculated two pollutant limits.