Increasing Fee-Based Support
The Legislative Analyst's Office (LAO) has identified some areas of potential savings that go beyond the governor's proposed budget, affecting the State Water Resources Control Board (SWRCB) and the Department of Water Resources (DWR). The theme that runs through these suggested savings to the state's General Fund contain the notion that assessed fees should fully fund all of a program's activities in part because the programs provide ongoing benefits directly to the assessed entities, and only to the assessed entities.

Water Rights Application Fee Increase
The LAO is suggesting that legislation be enacted to increase the current one-time fees on water rights applications. Currently, a one-time application fee is assessed on all water rights applications, which varies depending upon the amount of the proposed water diversion and/or storage. The minimum fee is $100 and the current fee framework has remained unchanged since the mid-1980s. The LAO justifies its proposal by pointing out that these one-time fees raise only $30,000 a year compared to program expenditures of $11 million in the current 2002-03 budget year.

New Water Rights Compliance Fee
The LAO is also proposing a new annual compliance fee assessed on all water rights holders under the SWRCB's jurisdiction, in order to fully replace the General Fund support proposed by the governor's budget for the SWRCB's water rights program. A special fund would be established to deposit the revenue generated by the water rights fees, estimated to be approximately $7.2 million.

Dam Safety Fee Increase
The LAO also put forth a proposal to enact legislation to revise the current dam safety fee structure to fully replace DWR's proposed budget of General Fund expenditures for the program. DWR oversees the dam safety program that regulates 1,250 dams in the state, which are not federally owned. The program supervises the operation and maintenance of dams over 25 feet tall or that exceed 50 acre-feet in storage capacity. The present fee structure was changed a decade ago and contains two fees. One is an annual maintenance fee of $200 per dam plus $24 times the dam's height in feet. The second is a fee that is charged for a new dam, a dam enlargement, a dam alteration, or a dam repair. This "filing" fee is calculated as a fixed percentage of an estimated cost of the project that is tiered depending upon project size. The minimum filing fee is $300.

The 2003 LAO report did not include the suggestion that was forwarded by the LAO last year to repeal the multi-county special district Educational Reform Augmentation Fund (ERAF) exemption. The LAO analysis did not mention either the multi-county or the water wholesaler special districts, both of which receive an exemption to the ERAF.

The LAO's recommendations are just one step in a multi-step State Budget Act process. Governor Davis and/or the Legislature would have to agree with these suggestions and take them a step further by including them in the proposed budget or in budget trailer legislation.

The Legislature is beginning to hold budget committee hearings on the 2003-04 state budget, and are simultaneously trying to come to agreement on many of the Mid-Year current 2002-03 budget reductions. For any district-specific budget questions, please contact State Legislative Advocate Wendy Ridderbusch at 916.441.4545.