State agency awash in red ink
As general fund dries up, Water Resources seeks funding options
By MITCH LIES
SALEM -- In November, the Oregon Water Resources Commission put out a call to stakeholders for ideas to restructure the Oregon Water Resources Department's budget.
The department's budget is heavily dependent on general fund revenues, which is a problem as the state's revenues are down along with its economy.
The commission received 28 ideas, OWRD Senior Policy Coordinator Brenda Bateman said. The ideas ranged from conservative suggestions involving small tweaks of department operations to a complete overhaul of the department.
The commission is sorting through the ideas and hopes to condense them to a handful of concrete suggestions.
In the meantime, the department is looking at a 25 percent reduction of its general fund revenue and a further decline in its ability to function.
Just since the start of the 2009-11 biennium, the department, which relies on general funds for about two-thirds of its budget, has lost 17 positions out of 146.
With 35 more positions due to be eliminated in the upcoming biennium, stakeholders are concerned about the department's ability to fulfill its role.
"We need some way to help fund the water resources department other than general funds," said Jim Myron, a lobbyist for the water conservation group WaterWatch of Oregon.
"If they have to take another 25 percent cut in general funds, they're going to go from a 140-person agency to an 80-person agency," he said. "That is kind of devastating."
WaterWatch is proposing a new fee on water permit holders this session, Myron said. The $100 annual fee would generate about $2 million a year, enough to at least recoup what the department has lost in general fund revenue since the start of the current biennium.
The department, meanwhile, is not advancing any legislation calling for new or increased fees.
"At this point, all options are on the table," Bateman said when asked if the department would support fee increases.
Last session, the department asked for and was provided several fee increases and one new fee.
Under Senate Bill 788, which lawmakers passed last session, the department raised its cost recovery through fees from 28 percent to about 50 percent of the cost of operating programs.
Under the bill, owners of new exempt wells were required to submit a map of the well location and pay a one-time $300 recording fee.
Under another bill, start card fees for maintaining the department's well-inspection program increased from $125 to $225. And the department initiated a "geotechnical hole report fee" for testing holes for subsurface conditions. The fee is $25 for the first report and $10 for each subsequent report.
Water users generally supported the fee increases. But support for new or increased fees this session appears unlikely.
Oregon Association of Nurseries Executive Director Jeff Stone said the association will oppose the annual fee on water permit holders.
"We opposed the fee last session, and we will oppose it this session," he said.
As for any other fees or fee increases, Stone was less definitive in his opposition, but did not indicate he would support the proposals.
"We need to look at the cumulative impact of all the fees and policies that are proposed in any legislative session," he said. "We may support a water fee. We supported one two years ago as part of the Water Resources budget 50 percent cost-recovery proposal. And two years before that there were fees increased because they were out of date.
"So we need to look at all the fees proposed by Water Resources, Department of Environmental Quality, Oregon Department of Agriculture, by all the different agencies that potentially could touch our members and say, on balance, what is the load of all those fees before we can say yes or no," Stone said.
Oregon Farm Bureau Director of Government Affairs Katie Fast said she doubts her members will support an increase in water fees this session.
"We did agree to a large fee package in the last Legislature, and that was a difficult negotiation," she said.
"It is going to be hard to go back to my membership and say, 'You need to pay a little bit more,' because we are seeing this discussion in every single sector or agency we deal with.
"They are looking at fee increases and decreasing general fund and how they are going to make that up," Fast said.
"For my membership, water is just one piece of that pie," she said.
The annual water permit holder fee, Myron said, will not single out agriculture.
"It can't just be on agriculture," he said. "Municipalities would be subject to fees as well," he said.
"We need to do something," Myron said. Among positions the department currently is doing without are some vital positions, Myron said, including the water master position in the Klamath Basin, which was eliminated because of budget cuts.
Anita Winkler, executive director of Oregon Water Resources Congress, which represents irrigation districts, said her members also are likely to oppose an annual water right permit fee.
"But there has to be a bigger discussion about how the Water Resources Department is funded," Winkler said.