Senate Committee Scolds SWRCB in Recent Hearing on Draft Statewide Permits

By Cori M. Badgley

In early 2011, the State Water Resources Control Board (“SWRCB”) released three draft statewide NPDES permits for public review and comment. To say that these permits were not well-received by the regulated community (i.e., small municipalities, CalTrans and industrial business owners) is an understatement. In a rare intervention by members of the state legislature into the realm of state agencies, the Senate Select Committee on California Job Creation and Retention held an informational hearing on the draft permits on October 6, 2011. The message from the hearing came across loud and clear: time for a do-over.

The three draft permits at issue are the following: a new statewide Phase II small MS4 permit (covering municipalities with populations less than 100,000), a new statewide Industrial Permit, and a new statewide permit for CalTrans. Although the previous statewide permits have long since expired, draft language for the new permits was not released until 2011. In response to releasing the draft permits, SWRCB received an overwhelming number of comments, most of which opposed the new permits.

Although the stated purpose of the hearing on October 6, 2011 was “informational,” the result was a stern talking to by the senators on the committee to SWRCB to start the process over. The main concerns voiced at the hearing both by the senators and representatives of the regulated community were the following:

Money, money, money: It all comes down to dollars and “sense”, as Senator Wright stated. For the draft Phase II small MS4 permit, representatives from Watsonville and Roseville both testified that the estimated increase in cost to municipalities was three fold. For example, the current cost to Roseville is $800,000, which would increase to $3.5 million the first year of implementation and result in average annual costs of $2.9 million. For the statewide Caltrans permit, Caltrans has estimated $900 million in cost to comply with and implement the draft permit. In terms of the Industrial permit, SWRCB has estimated an increase of costs anywhere from 90% to 2000% to the regulated community.

Proposition 218 as a Potential Barrier: The other common concern from municipalities is the limitations imposed by Prop. 218. Stormwater fees are not exempted from the voting requirements of Prop. 218 like other public facility fees such as sewer and water. If the cities and counties can’t impose user type fees, then the additional cost of the Phase II permit will have to come from the general fund, which is already dwindling in the recession.

Lack of Stakeholder Involvement: Outside of cost, the other major concern from the regulated community was the lack of involvement in the process. Instead of being a proactive part of the process, they feel they have had to react to very complex and unclear draft permits without any upfront involvement.

In response to many of the comments received by SWRCB, the Executive Director for SWRCB stated that SWRCB staff already has meetings set up with CalTrans as well as CASQA to discuss revisions to the permit. The director also stated that in light of the costs, he anticipates major revisions to the permits to bring the costs within a reasonable range.

The best news for the regulated community from SWRCB is that the decision has already been made to remove the numeric effluent limitations from the Industrial Permit. SWRCB now agrees that there is not enough data to impose these requirements, and any new Industrial Permit will include best management practices, not numeric effluent limitations.

For now, it looks like its back to the drawing board for SWRCB. SWRCB expects to have drafts of all three permits re-issued in three months. Abbott & Kindermann LLP will continue to monitor the permits and provide updates when more information is known.

Cori M. Badgley is an attorney at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

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