September 26, 2014
Agricultural groups are upset over a unanimous decision by the California State Water Resources Control Board (SWRCB) to boost waste discharge requirements (WDR) permit fees by as much as 33 percent.
Roger Isom, president of the Fresno-based Western Agricultural Processors Association (WAPA), said processors of crops like tomatoes and pistachios will see a 7.9 percent increase in their WDR permit costs for the coming year. This is off slightly from the 9.2-percent hike the board requested in August.
Hardest hit by the latest fee hike was the dairy industry, which will see its permit costs climb 33 percent next year.
“We’re very concerned about the rapid increase in these fees,” said Western United Dairymen CEO Michael Marsh.
According to Marsh, state law mandates that regulatory agencies assessing fees on agriculture must first conduct an analysis of commodity pricing as part of the fee adjustment process. This was not done, Marsh said.
“They need to take into account the pricing mechanisms of the commodity being regulated,” Marsh said. “I spelled that out in my testimony to the state board during their deliberations.”
While Marsh and others remain critical over an apparent lack of transparency by the state agency in defending the fee hikes, Marsh praised state water board members Dorene D’Adamo and Tam Doduc for agreeing that more transparency in the process is necessary.
Still, D’Adamo and Doduc voted to support the fee hike.
“We’re concerned that the fees may not be entirely used for agricultural programs,” Marsh said. “We want them to justify these fees.”
Fee or tax?
Marsh said that state agencies like the SWRCB have been moving to a fee-based funding structure and away from state general fund allocations for some time now. While the fee structure system is within the regulatory agency’s legal authority, Marsh remains concerned that not all fees charged of agricultural users are being used for agricultural programs within the regulatory agency.
“That makes it a tax, and we have clear law that says only the Legislature has taxing authority,” Marsh said.
According to Isom, some of the stated reasons for these increases have been simply to cover the cost of hiring more staff without a clear reason why more regulators are needed.
Isom said these fees for one of his pistachio processors amounts to an increase from $41,000 per year to $44,000.
Using the example of another tree nut processor the fees charged for WDR permits is more than 250 percent of that charged for all other permits combined.
The fee hikes are nothing new for agriculture. They’ve been happening now for at least a decade.
Joel Nelsen, president of the California Citrus Mutual (CCM), said his group has tried to address these fee hikes with the agency during the past decade, but has not been able to get them to slow down on the increases.
According to Nelsen citrus packers have seen their annual WDR fees climb from $400 to $9,600 over the past 10 years.
“This is obscene,” Nelsen said. “What you have here is a rogue agency getting away with what it wants with no oversight or transparency.”
Western United Dairymen and WAPA both expressed that they would seek an audit or other legislative action to gather more information on where the money from these fees is being spent.
Other agricultural groups participating in the water board discussions included the Ag Council, California Fresh Fruit Association and California Dairies, Inc.
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