Farms and commodity processing facilities are no strangers to compliance fees. Fees are levied from the local, state and federal levels amongst various agencies. For the most part, yearly permit costs remain predictable. There may be inclusions of other programs or regulations they are required to comply with and pay for, but many businesses can expect specific fees from specific agencies. However, there is one California agency whose fees have increased by over 150% over the past seven years, resulting in increases to permits that already cost tens of thousands of dollars annually.
The State Water Resources Control Board (State Board/SWB) oversees two programs the agricultural industry must pay into to maintain compliance with the agency. For the tree nut hulling and processing industry, applicable businesses must pay into the Waste Discharge Program (WDR). Businesses are assessed fees based on the threat and complexity level. This evaluation considers the practices of the business directly related to the use and discharge of water on site and the quantity of water used. Tree nut operations subject to the WDR requirements and permit fees include pistachio hullers and processors and almond processors who blanch. The WDR program requires an annual report submission, detailing water sampling and evaluation that is conducted quarterly (and paid for by the permitted business.) These program fees pay for staff’s time in evaluating the report submissions annually.
Earlier this summer, State Board staff held a stakeholder meeting to discuss their anticipated budget for the 2023-24 season. At this meeting, staff presented an 8.5% increase to the WDR program which would result in thousands more dollars tacked on to permit compliance costs. This is the seventh year in a row that staff has proposed an increase over 5%. State Board staff have attributed the increases as necessary to pay for additional employees and support understaffed programs reviewing submitted reports. An additional component of the 8.5% bump in fees is a result of salary negotiations between the State Board and their unionized employees where State Board staff noted that 4% of the proposed increase goes towards paying annual salary increases and retirement contributions. Stakeholders were also informed that the 4% increase can be anticipated annually for the next few years to pay for the committed salary increases.
The Western Agricultural Processors Association (WAPA) has attended numerous meetings just like this over the past seven years. The Association has constantly questioned the rationale behind the increasing fees and has pointed out that in many instances the WDR program costs were double any other permit or environmental cost-of-compliance fee levied on ag businesses. For example, the San Joaquin Valley Air Pollution Control District (Air District) utilizes a zero-based-budget approach. This means that fees and engineering evaluation costs by permit applicants offset the cost of the work to process an application. The Air District has raised their fees only three times in the span of 20 years, and the Air District’s fees pale in comparison to what the State Water Board is charging. In a survey of WAPA members who hold WDR permits, one business operating two processing facilities pays over $80,000 for their facilities to comply with the State Water Board’s program. The businesses’ Air District permit cost a mere $3,500. In fact, WAPA’s survey of the membership revealed that WDR permit fees weren’t just double the amount of most other fee-based programs, there are multiple instances where the WDR fees are 10 times as high as any other permit cost, 20 times in other specific cases.
In August, WAPA sent a letter to State Board Chair Joaquin Esquivel detailing our frustration with their continuously increasing fee program. This has prompted several calls with staff and Board Members for the agency. Additionally, WAPA has begun engaging the legislature to bring this issue to their attention, with the aim of finding other potential solutions through General Fund dollars or through a budgetary review of the programs. While it might not be enough to halt the proposed increase for the 2023-24 year, you can be sure WAPA will continue this effort at whatever government level we have to.