Report:
The AQMD's Program Cost Estimates for Implementing the Air Toxics "Hot Spots" Information and Assessment Act (AB 2588) During Fiscal Year 1996-97
Synopsis:
The Air Toxics "Hot Spots" Information and Assessment Act (AB-2588, H&S Code Section 44300 et. seq.) requires air districts to transmit annually to California Air Resources Board (CARB), an AQMD Board-approved cost estimate for local program implementation. This proposed estimate must be approved and transmitted to CARB before April 1, 1996 to be included in the state's new approved fee rule. The AQMD cost estimate for the Fiscal Year
1996-97 is based on the Three-Year Budget Forecast. Staff recommends approval of this cost estimate and its transmittal to CARB.
Committee:
Stationary Source Committee, February 16, 1996, Recommended for Approval
Recommended Action:
Approve the attached AQMD program cost estimate to implement AB 2588 for FY 1996-97 and its transmittal to CARB.
James M. Lents, Ph.D.
Executive Officer
PL:JPB:BWS:DV:RP:clb
Air Toxics Hot Spots Program Cost Estimate for FY 1996-97
Background
The AB 2588 Fee Regulation, which recovers state and local program costs, requires the AQMD to transmit an annual program cost estimate to CARB annually by April 1 for the following fiscal year. Alternatively, the AQMD must establish its own annual fee schedule by rule to collect the AQMD and state costs for implementation of the program. The fees assessed through this regulation are used to:
The AQMD's cost estimate and estimates from other districts, CARB, and the state Office of Environmental Health Hazard Assessment (OEHHA) are used by CARB to calculate the fees each district charges to facilities in its jurisdiction. The Fee Regulation is amended by CARB each year to incorporate these program cost estimates and other changes. The fees are specifically designated for the purpose of administering and implementing the mandated requirements of the Act and cannot be used for any other purpose. The AQMD collects the fees and transmits the state portion of the collected fees to CARB.
With the exception of Fiscal Year (FY) 1995-96, the AQMD has been included in this Fee Regulation since 1989. For FY 1995-96, AQMD is preparing its own fee regulation to recover these costs. This is required because the AQMD did not transmit its cost estimate before the cut-off deadline. However, staff will be proposing fee schedules identical to those in this year's state regulation.
Fiscal Year 1996-97 Cost Estimate
Staff has developed a program cost estimate for FY 1996-97 based on both the Three-Year Budget Forecast and costs incurred during FY 1995-96. The attached table contains a summary and breakdown of the AQMD's estimated AB 2588 program cost for FY 1996-97 which totals $2,040,232.
In FY 96-97, projected AQMD costs will be down by $691,581 (25%) compared to our current year (FY 1995-96). This reduction will be achieved by the reduction of staff and outside contracts.
Even with this reduction, fees may increase for two reasons. A number of high fee payers will revert to lower fee schedules as their status in the program changes. This is because a number of facilities will have their health risk assessments approved by AQMD, thereby placing them in lower fee schedules. Overall, collections could drop faster than expenses. Additionally, many low-risk sources have been exempted from paying fees. The state-wide process for exempting de minimis sources is ongoing and this could cut revenues further, leaving fewer sources to bear the program costs.