Report 2019-127 Recommendation 4 Responses

Report 2019-127: San Diego County Air Pollution Control District: It Has Used Vehicle Registration Fees to Subsidize Its Permitting Process, Reducing the Amount of Funds Available to Address Air Pollution (Release Date: July 2020)

Recommendation #4 To: San Diego County Air Pollution Control District

To ensure that the permit fees it charges are sufficient to pay for its permitting program, the San Diego Air District should, by December 2020, establish a methodology to calculate the full cost of its permitting program, based on its actual expenditures and administrative costs, and perform this calculation each year.

1-Year Agency Response

The District conducted a competitive RFQ process and selected an independent consulting firm (Matrix Consulting Group). Matrix evaluated cost procedures and provided recommendations for calculating the full cost of the permit program, and issued a Cost Recovery and Fee Analysis Report. In May 2021 the Governing Board adopted and directed staff to implement a cost recovery plan and timeline for increasing permit fees, with a projected fee revenue increase of 18% for FY 21-22, and with additional fee increases in future years to achieve full cost recovery in 2 to 5 years for all fee categories; most fee categories can achieve 100% full cost recovery in 2 to 3 years. Calculating the full cost of the permit program will be performed annually and recommendations to continue full cost recovery will be provided to the Governing board each year.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

The Air District provided a copy of its consultant's report establishing a methodology for calculating the full cost of its permitting program.

6-Month Agency Response

The District conducted a competitive RFQ process and selected a consulting firm (Matrix Consulting Group). Contract with Matrix was signed on September 28, 2020. Matrix is currently in the process of evaluating our cost procedures and providing recommendations for calculating the full cost of the permit program.

The District is monitoring the impacts of the pandemic on San Diego County's economy including regional employment, consumer price index, housing market, and foreclosures (see attachments). These indicators will assist the District in determining when economic conditions allow the District to recommend proposed fee increases to the board. To prepare for the next proposed fee adjustments (when economic conditions allow), the District has selected Matrix Consulting to conduct a Cost Recovery and Fees Study.

California State Auditor's Assessment of 6-Month Status: Pending

The San Diego Air District indicated it expects to implement this recommendation by March 31, 2021. We look forward to reviewing the Air District's progress when it provides its next update.

60-Day Agency Response

The District conducted a competitive RFQ process and selected a consulting firm (Matrix Consulting Group). Currently developing the contract with goal of contract execution by Sept 30, 2020.

California State Auditor's Assessment of 60-Day Status: Pending

We look forward to reviewing the San Diego Air District's progress toward implementing this recommendation in its 6-month response due in January 2021.

All Recommendations in 2019-127

Agency responses received are posted verbatim.