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State and Regional Water Boards They Must Do More to Ensure That Local Jurisdictions’ Costs to Reduce Storm Water Pollution Are Necessary and Appropriate Report Number: 2017-118

Scope and Methodology

The Joint Legislative Audit Committee (Audit Committee) directed the California State Auditor to review the regulation of storm water pollution by the State Water Board and three regional boards. Specifically, we were directed to review how the State Water Board and the Central Valley, Los Angeles, and San Francisco Bay regional boards developed and implemented storm water permits and how the pollutant limits contained in the permits affected local jurisdictions. Our audit scope focuses on storm water permits issued by the regional boards to regulate local jurisdictions with populations of 100,000 or more, which the USEPA refers to as Phase I permits. Phase II storm water permits, which are for smaller entities, are managed by the State Water Board and are not included in the audit scope. Table 4 lists the objectives that the Audit Committee approved and the methods used to address those objectives.

Table 4
Audit Objectives and the Methods Used to Address Them

AUDIT OBJECTIVE		METHOD
1	Review and evaluate the laws, rules, and regulations significant to the audit objectives.	Reviewed relevant laws, regulations, and other background materials applicable to the regulation of storm water pollution by the State Water Board and regional boards.
2	Identify the roles and responsibilities of the State Water Board, regional boards, and any other relevant statewide entities involved in developing policy and providing oversight regarding storm water permitting. Determine whether these entities’ storm water permitting and compliance requirements are consistent with federal law and regulations, including the Clean Water Act.	Reviewed the roles of the State Water Board and regional boards. We did not identify any other relevant statewide entities involved in developing policy or providing oversight for storm water permitting. Interviewed staff at the State Water Board and regional boards to further assess their roles and how they interact with each other. Reviewed all pollutant control plans currently in effect for Central Valley, Los Angeles, and San Francisco Bay and determined if they were consistent with federal requirements. For the pollutant control plans we reviewed at the three regional boards, we determined if there was comparable state guidance or requirements and if the provisions of the plans were consistent with the state guidance or requirements. Further, without reaching conclusions on legal issues currently being litigated, we determined if the state guidance and requirements were consistent with federal guidance.
3	Identify data and information used by the State Water Board, regional boards, and any other entities to allocate storm water cleanup costs and establish storm water permits, permit requirements, and associated programs directed at local jurisdictions. In particular, explain the history and evolution of storm water permits for Los Angeles.	As we describe in the Introduction, regional boards assigned the responsibility for reducing pollutants to the sources of the pollutant. We reviewed 20 pollutant control plans across the three regions and found that the regional boards established responsibility for most of them based on the concentration of the pollutant in each entity’s storm water, making each entity responsible for ensuring that the levels of pollutants in its water are safe. Accordingly, the local jurisdiction is responsible only for pollution within its geographic boundary. Reviewed 20 pollutant control plans across the three regions to identify whether the regional boards justified the pollutant limits, considered the costs associated with the pollutant limits, and used an appropriate method to allocate responsibility for pollutant control. Reviewed the storm water permits currently in effect for Central Valley, Los Angeles, and San Francisco Bay and identified differences in the permit structures. Documented the history of Los Angeles’s storm water permit for Los Angeles County.
4	Since 2011, for the three regional boards responsible for storm water permitting for Central Valley, Los Angeles, and San Francisco Bay, do the following:
	a. Determine whether the three boards’ storm water permitting and compliance requirements are consistent with state and federal requirements. Identify any significant disparities and determine why those disparities exist.	Reviewed all pollutant control plans currently in effect for Central Valley, Los Angeles, and San Francisco Bay and determined, without reaching conclusions on legal issues currently being litigated, whether they were consistent with state and federal requirements.
	b. Identify any significant differences in storm water permitting and compliance requirements among the three boards, determine why such differences exist, and, to the extent possible, determine the impact any differences have on local jurisdictions and other parties.	Reviewed the storm water permits currently in effect for Central Valley, Los Angeles, and San Francisco Bay and identified differences in the permit structures. As we note in the Introduction, we identified differences among the regions and discuss the reasons for significant differences. However, the concerns we report in the Audit Results—pertaining to how the regional boards considered costs, gave guidance on costs, and supported their pollutant limits—were consistent across the regions.
	c. To the extent possible, determine whether those responsible for storm water pollution in these three regions are also responsible for the associated costs of their pollution and the storm water permits. If not, determine whether options exist for equitably redistributing cleanup costs to those responsible. In particular, determine who has paid for storm water pollution within the jurisdiction of the Los Angeles board.	As we describe in the Introduction, regional boards do not typically allocate cleanup costs but instead impose limits on the pollutants that a local jurisdiction can allow into a water body. Therefore, the local jurisdiction is responsible only for pollution within its geographic boundary. We reviewed each regional board’s efforts to determine the amounts local jurisdictions have paid for storm water pollution and whether the State Water Board and the respective regional board give any guidance regarding tracking and reporting costs. For Los Angeles, we discovered inconsistencies in local jurisdictions’ cost reporting and therefore we lacked confidence in the accuracy of the information. Because the city of Los Angeles tracks its storm water costs as part of its formal budgeting process, and because it incurs a significant portion of the total costs in the Los Angeles region, we present cost information for the city of Los Angeles for fiscal years 2012–13 through 2016–17 as reported by the city.
	d. For a selection of local jurisdictions covered by the three boards, such as municipalities and counties, identify the fiscal and other impacts jurisdictions have had or will have in complying with storm water permits. Provide the jurisdictions’ perspectives about these impacts and, to the extent possible, assess their significance.	For audit objectives 4(d) and 4(e), we selected eight local jurisdictions to review. We selected four local jurisdictions from the Los Angeles region, including one specified in the audit request, and two each from the Central Valley and San Francisco Bay regions. In making our selection, we considered the location of the local jurisdiction, its projected burden for addressing storm water, and the opportunity to identify potential best practices. From Central Valley, we selected the cities of Modesto and Sacramento. From Los Angeles, we selected the cities of Baldwin Park, Bellflower, Los Angeles, and Torrance. From San Francisco Bay, we selected the city of San Mateo and the Santa Clara Valley Urban Runoff Pollution Prevention Program. The Santa Clara Valley Urban Runoff Pollution Prevention Program is an organization for managing aspects of permit implementation across local entities in Santa Clara County. Therefore, for the purpose of identifying funding sources from various entities, we excluded this program from our analysis, as it is financed by member entities and does not have direct revenue sources. We interviewed individuals at each of the local jurisdictions and obtained supporting documentation regarding the impact of the cost of storm water permits.
	e. For the selection of three or more of the local jurisdictions specified by the requester, identify current and potential funding sources for programs that target storm water cleanup and management, such as watershed management programs.	We identified the funding that the local jurisdictions used for their storm water management programs, which include watershed management programs. We reviewed funding information provided by the State Water Board and regional water boards.
5	As part of reviewing the storm water permitting processes and policies, identify any best practices that could assist the State Water Board, regional boards, and permitted jurisdictions.	During the course of our audit, we identified some potential best practices that we summarize in the Introduction.
6	Review and assess any other issues that are significant to the audit.	During the course of our audit, concerns were raised regarding the qualifications of board members for the State Water Board and regional boards. We reviewed information about each board member’s qualifications for the State Water Board and the Central Valley, Los Angeles, and San Francisco Bay boards and found that they all met the qualifications established in state law.

We conducted this audit under the authority vested in the California State Auditor by section 8543 et seq. of the California Government Code and according to generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives specified in the Scope and Methodology section of the report. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Respectfully submitted,

ELAINE M. HOWLE, CPA
State Auditor

Date:
March 1, 2018

Staff:
Linus Li, CPA, CMA, Audit Principal
Nathan Briley, JD, MPP
Michaela Kretzner, MPP
Amanda Millen, MBA
Danielle Petersen
Jasmine M. Zandian

Legal Counsel:
Mary Lundeen, Sr. Staff Counsel

For questions regarding the contents of this report, please contact Margarita Fernández, Chief of Public Affairs, at 916.445.0255.

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