• The Environmental Compliance Program, which was part of the former Bureau of Environmental Regulation and Management, is not a comprehensive central advisor on environmental regulation compliance for all Public Utilities Commission enterprises as it was intended to be. That program's 3.00 FTE Classification 5620 Regulatory Specialist positions would be more useful if transferred to water and clean water system operations according to assessed need. Such transfers would ensure focused support for operations staff with their environmental regulation compliance obligations, particularly as the Water System Capital Improvement Program progresses.
  
  
• Further, elimination of three former Bureau of Environmental Regulation and Management positions would result in salary savings of up to $336,545, inclusive of mandatory fringe benefits, with no diminution of programmatic services. These salary savings would result from the elimination of an Administrative Engineer position, a Program Manager I position, and a Secretary II position.

Former Bureau of Environmental Regulation and Management Functions

The Public Utilities Commission General Manager has restructured the former Bureau of Environmental Regulation and Management, combining two of its former functions with the Clean Water Enterprise's Sewer Operations Section into a new Wastewater Collection System Bureau reporting to the new Assistant General Manager, Clean Water. The former Manager of the Bureau of Environmental Regulation and Management, who is now the Manager of the Wastewater Collection System Bureau, was responsible for the following disparate functions performed by 50.00 FTEs:

1. The Pretreatment, Pollution Prevention and Storm Water Program which (a) manages initiatives to prevent pollution, control the quality of storm water run-off, and ensure that pretreatment programs limit certain pollutants from going into the sewer system, and (b) enforces pretreatment permit compliance. The Pretreatment, Pollution Prevention and Storm Water Program comprises 32.00 FTE positions. In Section 9 of the Budget Analyst's Phase I Management Audit of the Public Utilities Commission - Clean Water Enterprise Fund (September 27, 2004), the Budget Analyst recommended that management responsibility for the Pretreatment, Pollution Prevention and Storm Water Program be transferred from the Manager, Bureau of Environmental Regulation and Management to the Clean Water Enterprise. This recommendation reflected the Pretreatment Pollution Prevention and Storm Water Program's total focus on clean water and its close working relationship with other clean water staff. Such a transfer should encourage more efficient wastewater sampling and regulatory compliance monitoring. The Public Utilities Commission General Manager's restructuring of the Pretreatment, Pollution Prevention and Storm Water Program into the Wastewater Collection System Bureau has implemented that recommendation.

2. The Environmental Compliance Program which is intended to act as a central advisor on compliance with Federal, State, and local environmental regulations related to (a) environmental permits for operational facilities, (b) assessment and environmental remediation of toxic and hazardous materials and waste, (c) integrated pest management, and (d) storage tanks and emergency generators. The Environmental Compliance Program comprises 5.00 FTE positions. While the Public Utilities Commission General Manager has restructured the Environmental Compliance Program into the Wastewater Collection System Bureau, the Department is currently working through the final structural locations for these staff given their department-wide responsibilities which extend beyond the Clean Water Enterprise.

3. The Public Utilities Commission Health and Safety Program which ensures that the Department is in compliance with Occupational Health and Safety Act regulations and acts as a technical resource on how to provide a healthy and safe workplace. It advises on hazardous materials handling, provides health and safety training, develops regulations, investigates accidents, and develops programs in response to department-wide health and safety issues. The Public Utilities Commission Health and Safety Program comprises 8.00 FTE positions. The Public Utilities Commission General Manager has placed this program under the Human Resource Services Bureau Manager. The Budget Analyst concurs with this restructuring for the following reasons. First, the Public Utilities Commission Health and Safety Program's responsibility for providing services to staff members throughout the entire Department is reflected in the program's new location within the Business Services Division. Second, the program has an enforcement role and therefore needs to be in an organizational position to be taken seriously by staff throughout the Department, and to ensure that senior management responds as necessary. Third, this organizational structure aligns the reporting relationships of the two key departmental functions related to personnel.

4. Administrative support comprising 5.00 FTE positions.

Environmental Compliance Program

Despite its intention to be a resource for all Public Utilities Commission enterprises, the Environmental Compliance Program's role as a central advisor on environmental regulation compliance is far from comprehensive:

• Environmental regulation compliance is currently split between four divisions: the Planning Bureau, the Water Quality Bureau, the Water Pollution Control Division, and the Water Supply and Treatment Division. Their respective environmental regulation compliance responsibilities are coordinated through committees, for example the Habitat Conservation Committee, the monthly Wastewater Round Table, and the monthly Water Round Table. While the Environmental Compliance Program participates in these committees, it neither leads them nor has provided centralized support by means of a comprehensive department-wide database of all of the Department's environmental regulatory compliance permits, licenses, plan renewals, or contracts. Although permit and program managers are ultimately responsible for having their permits and licenses up to date, a comprehensive department-wide database would be a useful tool for notifying the responsible staff members of upcoming deadlines for renewal of mandatory permits, licenses, plans, or contracts. Environmental Compliance Program staff have initiated development of such a database but it is not yet complete.
  
  
• There are specific positions outside of the Environmental Compliance Program which are responsible for overseeing clean water regulations and drinking water regulations. The Phase I Management Audit of the Public Utilities Commission - Clean Water Enterprise Fund recommended that the position responsible for overseeing clean water regulations be transferred from the Planning Bureau to the Clean Water Enterprise. The position responsible for overseeing drinking water regulations is located in the Water Quality Bureau.
  
  
• The program's environmental permitting function no longer includes environmental regulation permits required for Water System Capital Improvement Program projects, as this function has been taken over by the Planning Bureau and the Infrastructure Division. Therefore, the Environmental Compliance Program now focuses on environmental permitting related to operations and capital improvement projects outside of the Water System Capital Improvement Program.
  
  
• The program's environmental permitting function excludes State Department of Health Services permitting of the laboratories which is performed by the Water Quality Bureau itself. This is a legacy arrangement from the transfer of the Clean Water Program laboratories from the Department of Public Works to the Public Utilities Commission. Departmental staff members advise that there has been no consideration of consolidating that function into the Wastewater Collection Services Bureau because the current arrangement works.
  
  
• The program's environmental permitting function also excludes permits for discharges from the water pollution control plants. These are managed directly by the Water Quality Bureau and the Water Pollution Control Division.
  
  
• The Manager of the Environmental Compliance Program manages two pools of pre-qualified, as-needed contractors available for projects from across the Department. One pool is for operational support contracts and the other is for California Environmental Quality Act consultants. However, both pools are ending in FY 2005-2006 because their funding is almost expended. While there may be a new operations support as-needed contract pool to succeed the current pool, the current California Environmental Quality Act consultant pool will be replaced by a new as-needed contract pool managed by the Planning Bureau which will encompass expertise not previously available to the Department in areas such as resource economics and sustainability.

Based on the existing allocation of environmental regulation compliance functions, the operations staff most closely linked to a facility or program requiring environmental regulation compliance permitting, licensure, plan renewal, or contracting are responsible for ensuring that those requirements are met. Under this circumstance, it is unclear what additional value a non-comprehensive central advisor on environmental regulation compliance offers. Therefore, the Budget Analyst recommends that the 3.00 FTE Classification 5620 Regulatory Specialists be allocated to water and clean water system operations according to assessed need to ensure focused support for operations staff with their environmental regulation compliance obligations, particularly as the Water System Capital Improvement Program progresses. In FY 2004-2005, the Environmental Compliance Program is being funded 77.5 percent by the Water Enterprise Fund, 17.5 percent by the Clean Water Enterprise Fund, and 5 percent by the Hetch Hetchy Enterprise Fund. On this basis, 2.00 FTE Classification 5620 Regulatory Specialists could be transferred to the Water Enterprise, 1.00 FTE Classification 5620 Regulatory Specialist could be transferred to the Clean Water Enterprise, and the Hetch Hetchy Enterprise could work order environmental compliance services from the other two enterprises as necessary.

As a result of such transfers based on assessed need, there would no longer be any need within the Wastewater Collection System Bureau for a 1.00 FTE Classification 5138 Program Manager I, Environmental Compliance Program, position or the 1.00 FTE Classification 1446 Secretary II position which supports the Program Manager. The Program Manager has already lost responsibility for environmental regulation permits required for Water System Capital Improvement Program projects, will soon cease managing both pools of pre-qualified, as-needed contractors, and has not completed a department-wide database of all of the Department's environmental regulatory compliance permits, licenses, plan renewals, or contracts which could, in the future, be completed by the 3.00 FTE Classification 5620 Regulatory Specialists based on their work with water and clean water system operations staff. This management position and its secretarial support are no longer necessary.

Implementation

The Pretreatment, Pollution Prevention and Storm Water Program has been transferred to the Wastewater Collection System Bureau within the Clean Water Enterprise and the Public Utilities Commission Health and Safety Program has been transferred to the Human Resource Services Bureau. As recommended above, the 3.00 FTE Classification 5620 Regulatory Specialists in the Environmental Compliance Program, which has been transferred to the Clean Water Enterprise, should be reallocated to water and clean water system operations according to assessed need. As a result of these structural reorganizations, there would no longer be a justification for, or diminution of programmatic services resulting from the deletion of, the following positions:

• 1.00 FTE Classification 5174 Administrative Engineer position which formerly provided budget and finance support to the now defunct Bureau of Environmental Regulation and Management. This position is vacant. The Wastewater Collection Services Bureau already has (a) a 1.00 FTE Principal Administrative Analyst to provide direct budget and finance support to the Pretreatment, Pollution Prevention and Storm Water Program, and (b) a 1.00 FTE 1842 Management Assistant to provide direct budget and finance support to the Sewer Operations Section. Further, the Clean Water Enterprise also has an Administrative Unit which will be providing support to the Wastewater Collection Services Bureau as part of the Clean Water Enterprise. The 1.00 FTE Classification 5174 Administrative Engineer position has an annual salary cost of between $89,210 and $108,446, plus mandatory fringe benefits,¹ for a total savings of up to $135,015 annually.
  
  
• 1.00 FTE Classification 5138 Program Manager I, Environmental Compliance Program, position which has an annual salary cost of between $89,941 and $109,307, plus mandatory fringe benefits, for a total savings of up to $136,087 annually. There would no longer be a separate Environmental Compliance Program for this position to manage.
  
  
• 1.00 FTE Classification 1446 Secretary II position which has an annual salary cost of between $43,274 and $52,565, plus mandatory fringe benefits, for a total savings of up to $65,443 annually. There would no longer be a Classification 5138 Program Manager I, Environmental Compliance Manager, position requiring secretarial support.

Elimination of the above three positions would result in savings of up to $336,545, inclusive of mandatory fringe benefits, with no diminution of programmatic services.

Conclusion

The Environmental Compliance Program is not a comprehensive central advisor on environmental regulation compliance for all Public Utilities Commission enterprises as it was intended to be. That program's 3.00 FTE Classification 5620 Regulatory Specialist positions would be more useful if transferred to water and clean water system operations according to assessed need. Such transfers would ensure focused support for operations staff with their environmental regulation compliance obligations, particularly as the Water System Capital Improvement Program progresses. As a result of those transfers, there would no longer be any need for a 1.00 FTE Classification 5138 Program Manager I, Environmental Compliance Program, position or the 1.00 FTE Classification 1446 Secretary II position which supports the Program Manager.

Further, there is no continued justification for the vacant 1.00 FTE Classification 5174 Administrative Engineer position which formerly provided budget and finance support to the now defunct Bureau of Environmental Regulation and Management.

Recommendations

The Public Utilities Commission General Manager should:

9.1 Transfer management responsibility for the 3.00 FTE Classification 5620 Regulatory Specialist positions in the Environmental Compliance Program to water and clean water system operations according to assessed need.

9.2 Eliminate the 1.00 FTE Classification 5174 Administrative Engineer position.

9.3 Eliminate the 1.00 FTE Classification 5138 Program Manager I, Environmental Compliance Program, position.

9.4 Eliminate a 1.00 FTE Classification 1446 Secretary II position.

Costs and Benefits

Elimination of (a) the 1.00 FTE Classification 5174 Administrative Engineer position, (b) the 1.00 FTE Classification 5138 Program Manager I, Environmental Compliance Program, position, and (c) a 1.00 FTE Classification 1446 Secretary II position would result in savings of up to $336,545, inclusive of mandatory fringe benefits, with no diminution of programmatic services.

Transferring management responsibility for the 3.00 FTE Classification 5620 Regulatory Specialist positions in the Environmental Compliance Program to water and clean water system operations according to need would focus those positions on supporting water system operations staff who are responsible for environmental regulation compliance permits, licenses, plans, and contracts.

¹ To maintain consistency with the Phase I and II reports, mandatory fringe benefits are calculated on an average of 24.5 percent for non-uniformed positions. However, the Department is budgeting for FY 2005-2006 mandatory fringe benefits on an average of 30.0 percent to reflect the upcoming budget year's increases related to Charter mandated retirement provisions and increased health and dental benefit costs.