CITY OF
STAFF REPORT
Item No, 26
DATE: July 27, 2026
TO: Honorable Mayor and City Cou
FROM: Dr. Sean M. Moore CityManager)
PREPARED BY: Fermin Preciado, Director of Dent Services/City Engineer Landon Kern, Assistant EngineerW h, L_ VL
Peter Kann, Director of Community Development Ak
SUBJECT: State of California Regional Stormwater Regulation Update ww
RECOMMENDATION:
That the City Council:
Receive an update regarding recent updates to the State of California's regional stormwater regulations; or
2. Provide further direction to staff.
BACKGROUND/DISCUSSION:
The Santa Ana Regional Water Quality Control Board (RWQCB) is a State of California regulatory agency responsible for protecting, preserving and restoring water quality in Southern California's Santa Ana River Watershed. The Santa Ana River Watershed covers portions of Orange County, Riverside County and San Bernardino County.
The Municipal Separate Storm Sewer System (MS4) Permit is a joint permit issued by the RWQCB to the County of San Bernardino, the San Bernardino County Flood Control District (SBCFCD), and the sixteen (16) incorporated cities in the Santa Ana River Watershed within San Bernardino County. The San Bernardino County Flood Control District is the Principal Permittee, whose primary responsibilities include administration of the overall stormwater program in conjunction with the cities, and act as the liaison with the (RWQCB) staff.
SBCFCD and the 16 cities within San Bernardino County are "Co-Penmittees" and responsible for implementing individual program elements in their individual jurisdictions and to financially support their individual efforts as well as financially supporting the county -wide program. The MS4 Permit (Permit) is regulated and provisions enforced by the RWQCB for the State of California. While the Permit expired in 2015, its term was administratively extended by the RWQCB until a new updated Permit is issued.
In 2018, the RWQCB indicated that a new updated permit would be developed as a regional permit, instead of a permit solely for San Bernardino County. This new regional permit would incorporate approximately 60 public agencies across Orange, Riverside, and San Bernardino counties. Since the release of the initial draft of the new permit in 2021, local agencies have been working closely with RWQCB staff to review and discuss the proposed changes, requirements, and anticipated fiscal considerations affecting all public agencies involved. Much of the discussions have been focused on the anticipated higher costs for the public agencies.
The new permit includes several significant changes that could substantially increase costs for cities, counties, and flood control agencies. Proposed new requirements could include additional efforts and increased costs for planning studies, inspections, monitoring, reporting, staff training, public outreach efforts, and construction -related fees. The costs of these additional efforts will be the responsibility of each public agency. Cities are also concerned that some existing compliance programs that have been implemented at the city level to improve water quality may no longer be recognized under the new permit framework. To address these concerns, representatives from the three counties have formed a collaborative working group to negotiate revisions with the RWQCB and seek more practical and cost- effective approaches to meeting the State of California's water quality goals. The proposed new permit is being referred to as an "un-funded mandate", since cities do not have the hundreds of thousands of dollars that are estimated to support the new permit's provisions and requirements each fiscal year.
At this time, no adoption schedule has been established for the new permit, and discussions between the RWQCB and local agencies continue. Through these coordination efforts, local agencies continue to emphasize that the new permit should aim to improve water quality in a more practical manner and consider that the requirements remain achievable and financially sustainable for public agencies.
There have also been discussions between the cities, counties and flood control districts to seek legal action against the State for what are considered drastic changes in the new permit. Since the City of Yucaipa is a co-permittee with San Bernardino County, the County Attorney's office has been actively involved throughout these discussions.
Additional information will be provided during the presentation provided by staff and a representative from SBCFCD regarding the ongoing coordination and the anticipated adoption schedule for the new permit.
FISCAL IMPACT:
The new permit is proposed to include several significant changes that would substantially increase costs for the City of Yucaipa. The proposed FY26/27 Budget includes approximately $300,000 in funding from the General Fund to address the requirements of the current permit. With the proposed updates, the annual costs to address these new regulations could potentially increase significantly and cost the City of Yucaipa $600,000 to $700,000 per year.
Attachments:
1. San Bernardino County information for updates to stormwater regulations.
ATTACHMENT 1
Summary Update — May 2026
NPDES MS4 Permit Renewal
5°"gF"'.'"'_';: Ull rY S1 ORMWAT, ER P'' Tentative Order No. R8-2026-0034
WHERE WATER
MEETS COMMUNITY
This Summary is provided to update Permittee Executive Managements on the MS4 Permit renewal.
As of this summary, the Tentative Order was released by the Regional Board for public review and comment on May 5, 2026 (2026 TO). There is a 45-day public comment period ending on June 19, 2026.
This 2026 TO is the "second draft" to the original TO released by the Regional Board on Mar 5, 2024 (2024 TO).
Background
Summary Updates of October 2022, March 2024, and April 2024 are attached to this document for convenience.
Additionally, in Fall 2024, the District commissioned Beacon Economics to analyze the economic impact of the 2024 TO on San Bernardino County and the valley Cities. A Fact Sheet was developed to highlight the major economic impacts to our County. The Fact Sheet and the Beacon Report are also attached for your information.
Tentative Order (TO) — The first tentative order was released by the Regional Board on March 5, 2024 (2024 TO), with an extended public comment period of 120 days, ending July 3, 2024. Written comments were submitted by the Tri-County Group (San Bernardino County, Riverside County, and Orange County) on July 311. The San Bernardino County Flood Control District (District) submitted comments focused on County -specific concerns, separate from the Tri-County Group.
The 2026 TO was released May 5, 2026, with a 45-day comment period only for revisions made to the 2024 TO. The Tri-County group received a red -lined version of the 2026 TO, ensuring a more streamlined review. The Regional Board did not release a "Response to Comments" with the 2026 TO and the District does not know when the document will be released to the public. The "Response to Comments" are the Regional Board's responses to public comments received on the 2024 TO.
In January 2026, in preparation of the release of the 2026 TO, the District's Expert Counsel issued a Public Records Act letter (PRA) to the Regional Board to produce the entire administrative record for the 2026 TO. Regional Board staff provided a majority of these documents at this time and expect the PRA to be completed in the near future.
Public Workshops/Hearing
As of this Summary Update, the Regional Board will conduct a Public Hearing to consider adoption of the 2026 TO at their July 24, 2026, board meeting in Orange.
It is possible that the Public Hearing may continue to the Regional Board's September 11, 2026, meeting in Irvine. Regional Board members and staff will be present to receive testimony regarding the 2026 TO.
MS4 Regional Permit — Timeline to Adoption
•Tentative Order
Released
•120-Day
comment period
•Written comments
due
-End of 45-day
comment period
t
Next Steps
MS4 Permit Renewal — Tentative Order
May 5, 2026
•End of 120-day -Public Workshop
comment period •Reional Board directs
(extended from staff to continue
60-day) working with Permittees
on TO
*Public Hearing to
consider adoption
of 2026 TO
92026TO released
•45-day public
comment period
•TENTATIVE: Possible
continuation of Public
Hearing to consider
adoption of 2026 TO.
1. District staff have alerted city NPDES representatives regarding public release of the 2026 TO.
The District has and will continue to schedule meetings with the San Bernardino County Permittees to review the 2026 TO and develop county -specific comments.
2. District staff are analyzing the 2026 TO and identifying any continuing or new issues with the proposed requirements.
3. District and County NPDES representatives will continue to work with the Tri-County Group (San Bernardino County, Riverside County, and Orange County) and bring forward San Bernardino County Permittees' comments to the group, and subsequently the Regional Board, before the end of the comment period.
4. The Permittees, District, and County (collectively, "the Program") will be utilizing the assistance of O'Reilly Public Relations (OPR) to coordinate the Program's message between Expert Counsel and City/County leadership for update meetings and to prepare for the July 24, 2026, Public Hearing.
5. District NPDES representatives will offer assistance to our city NPDES representatives as they meet with respective Executive Managements and/or Elected regarding the 2026 TO.
Recommendation
District NPDES staff request Executive Management logistic and networking support to coordinate messaging and scheduling the Elected at Regional Board and other local government meetings (i.e., SBCTA/city council committee meetings, workshops, or work sessions, etc.) to provide testimony on behalf of the County.
Alk
WHERE WATER
MEETS COMMUNITY
Summary Update
NPDES MS4 Permit Renewal
Staff Working Proposal
This Summary is being provided to update Permittees' executive management on the current MS4 Permit renewal. As of this summary, there is no definite timeline for the adoption of a new MS4 Permit.
Background
In January 2010, the Santa Ana Regional Water Quality Control Board (Regional Board) adopted the National Pollutant Discharge Elimination System Municipal Separate Storm Sewer System Permit (2010 MS4 Permit) for stormwater discharges from areas in unincorporated San Bernardino County and from the Cities of Big Bear Lake, Chino, Chino Hills, Colton, Fontana, Grand Terrace, Highland, Loma Linda, Montclair, Ontario, Rancho Cucamonga, Redlands, Rialto, San Bernardino, Upland, and Yucaipa. The District was designated as the Principal Permittee under the MS4 Permit. The District represents the co-permittees to implement area -wide programs required by the MS4 Permit. The Implementation Agreement (Agreement 11-545) funds this work. The 2010 MS4 Permit expired in January 2015, and was administratively extended by the Regional Board.
In late 2018, the Regional Board indicated that the next MS4 permit will be a regional permit, naming all 60 permittees in Orange, Riverside, and San Bernardino Counties. The Regional Board had been developing the regional MS4 permit since late 2018.
Release of Staff Working Proposal
On December 24, 2021, the Regional Board released a Staff Working Proposal (SWP) of a regional permit to the 60 permittees of San Bernardino County, Riverside County, and Orange County (Permittees). Subsequently, the Regional Board publicly released the SWP on January 25, 2022, and held a public workshop on February 4, 2022.
The Regional Board solicited feedback on the SWP from the public; the Principal Permittees provided initial written feedback on March 10, 2022. The initial feedback letter proposed a discussion schedule between Regional Board staff and the Permittees, focusing on specific sections of the SWP. The Regional Board Staff was amenable to this discussion schedule and the Permittees have been meeting with Regional Board since April 2022. The initial feedback letter is attached; it outlines the Permittees' initial concerns with the SWP that were used as discussion points for the meetings with Regional Board staff.
•SWP released to
SBC, RivCo, OC
Permittees only
Timeline: SWP Release
•SWP release
*Public Workshop
i Notice
*Written
Feedback
deadline
Big Bear Lake . Chino . Chino Hills . Colton . Fontana . Grand Terrace . Highland . Loma Linda . Montclair* Ontario . Rancho Cucamonga Redlands . Rialto . San Bernardino . San Bernardino County . San Bernardino County Flood Control District . Upland . Yucaipa
MS4 Permit Renewal — Staff Working Proposal
October 2022
The SWP is not a complete "permit" document and omits the Fact Sheet (Attachment D), which documents the Regional Board's rationale to justify SWP requirements. The SWP is not the tentative draft permit. Thus, the initial feedback solicited by the Regional Board is not a formal public comment letter and the Regional Board will not be providing a formal response to feedback received.
Tri-County Group
The Principal Permittees of each county — San Bernardino County Flood Control District, Riverside County Flood Control and Water Conservation District, and County of Orange — formed the "Tri-County Group" to collaborate and coordinate information and concerns between the Permittees and Regional Board staff. The Tri-County Group includes each county's respective legal counsels, who have been meeting with Regional Board counsel to discuss SWP legal issues identified by the Permittees.
Proposed Changes outlined in SWP
While the Permittees wait for the Fact Sheet (SWP Attachment D), the early discussions with Regional Board staff have been providing the Permittees the Regional Board's rationale behind new proposed requirements, structure, and current program modifications outlined in the SWP. As a result of these discussions, a smaller Focus Group of the Tri-County Group are developing proposed changes to the SWP in red -lines of the SWP.
The Permittees anticipate that the Regional Board will include the following proposed changes/additions in the SWP. These may require Permittees to develop new, or update existing, programs, plans, studies, perform additional inspections and reporting, retrofit and/or install new facilities, etc. to comply with the permit requirements, increasing the cost of compliance.
Overall Significant Changes resulting in increased costs of compliance: Cost of compliance is estimated to significantly increase without indication of a source of additional funding if the tentative permit:
o Does not recognize and/or reference multiple pathways of compliance, or the existing plans, studies, reports, and programs of Permittees to satisfy the permit requirements (i.e. TMDL documents/resolutions, Basin Plan Amendments, Comprehensive Bacteria Reduction Plans, WQMP Technical Guidance Document, regional task force or coalition efforts, etc.); o Triggers new measures or programs that will require hiring additional staffing, contract staff, and/or consultants to implement the permit requirements and to maintain the required compliance activities throughout the life of the permit; o Does not propose and/or identify any funding mechanisms for stormwater for the implementation of the permit or the required compliance activities through the life of the permit; o Requires a new stakeholder process (public review/comment) be implemented for programs or processes that previously did not require stakeholder input; and o Expands the scope of training or requires Permittees be responsible for annual training of outside entities, including Permittees' contractors and consultants. • Significant Changes in Specific Sections:
o Potential Significant TMDL Compliance Change: Continued use, or updates to the Permittees' Comprehensive Bacteria Reduction Plans (CBRP), and the BMP-based compliance method proposed and established with the 2010 MS4 Permit, is now questionable.
The Permittees implementation of the CBRP has significantly improved water quality to date, and Permittees hope to be able to negotiate revisions to the SWP that allow continued use of the CBRP.
o New: SWP implementation of Trash Amendments via Track 1 or Track 2 (determined by each Agency in 2017) will require full compliance by December 2, 2030. 5175526.3 2 1
MS4 Permit Renewal — Staff Working Proposal
October 2022
o New: The SWP includes development and implementation of a Watershed Management Plan (WMP) with a Reasonable Assurance Analysis to verify that water quality goals can be met as proposed in the WMP. Failure to meet milestones identified in the WMP are permit violations. o Significant Change to Development/Redevelopment: Road WQMP will need to be revised from current program of length -based ('/4 mile min.) to area -based (5,000 sf min.) of new or improved road. Anticipated increased costs to Permittees. o Revised: Updates to the WQMP Technical Guidance Document (TGD) will no longer require approval from the Regional Board Executive Officer. This can potentially lead to a non -uniform TGD between the Permittees' agencies, increasing the Permittees' potential for permit violations and administrative civil liabilities.
o Significant Change to Municipal Construction Fees: Permittees will be required to start paying annual Construction General Permit fees for municipal construction projects >1 acre.
Anticipated increased costs to Permittees.
o Significant Change to Inspections: The SWP increases inspection for commercial and industrial facilities and increases reporting frequencies and requirements. Anticipated increased costs to Permittees.
o Significant Change to Public Education metrics: The SWP requires Permittees to conduct statistically significant annual surveys with unidentified parameters. Anticipated increased costs to Permittees.
o Significant Change to Water Quality Monitoring: The SWP requires a costly causal assessment to be conducted to determine cause of an water quality exceedance. Anticipated increased costs to Permittees.
Next Steps
Public Staff Workshop — The Regional Board hosted a public staff workshop on August 2, 2022, at the Riverside Main Library. The workshop allowed the Permittees to hear and discuss SWP comments with other stakeholders and the Regional Board. No decision on the SWP was made at this workshop.
The Permittees share a common goal with the Regional Board to improve water quality and impacts from stormwater. The Permittees strive to ensure permit implementation remains sensible to our respective agencies' operations. Agency NPDES coordinators and the District's NPDES section will continue to update you and greatly appreciate your support, especially during any future testimony before the Regional Board.
*Public Staff
Workshop
*Discuss redlines
with Regional
Board
Timeline: Next Steps
1 TM •Tri-County Group,
discussion - San Permittees
Bernardino & complete SWP
Riverside Counties redlines
•Tentative Draft
Permit
•Public Comment
Period
• Permit
adoption
•Submit redlines to
Regional Board
•10/21-Board mtg.,
information only
•Permit
effective date
5175526.3 3 1 P a g e
Summary Update — March 1, 2024
NPDES MS4 Permit Renewal
MEETS WHERE COMMUNITY WATER Staff Working p Pro osal/Tentative Order This Summary is being provided to update Permittees' Executive Management on the current MS4 Permit renewal, including staff perspective of the Regional Board's public workshops to disadvantaged and tribal communities. This update includes a recommendation to present a Permit Update and Regional Board's Outreach to the Permittees' Executive Management.
Background The Summary Update of October 2022 is attached to this document for convenience.
Tentative Order (TO) — The TO was released today, March 1, 2024, by the Regional Board. A Public Workshop is being planned for March 15, 2024, in Anaheim to introduce the Tentative Order to the Santa Ana Regional Board Members. The workshop will be held at the City of Anaheim, and available via video and teleconference.
Public Workshops for Disadvantaged and Tribal Communities The Regional Board hosted evening public workshops to solicit feedback on the Staff Working Proposal (SWP) from disadvantaged and tribal communities. These workshops were held:
May 10, 2023
San Bernardino Family YMCA
May 16, 2023
Virtual (via Zoom)
May 17, 2023
Moreno Valley Recreation and Conference Center
May 18, 2023
Memorial Hall, Huntington Beach
Regional Board staff's non -technical presentation included a background of stormwater permitting and a broad overview of the SWP, summarizing a few of the required programs that the County and Cities would be expected to implement in the next permit term. The presentation and other workshop documents are included with this update for perusal. The presentation also included the timeline for future drafts, comment periods, focused public workshop, and adoption of the MS4 permit. This timeline is depicted at the end of this update.
Agency Perspective
During these workshops, Regional Board Staff emphasized their goal to obtain perspectives from disadvantaged and tribal communities. County and City NPDES staff do not believe the Regional Board achieved this goal. Attendance by the general public at the in -person workshops were dismal, ranging from none (San Bernardino and Moreno Valley) to three (Huntington Beach); Regional Board staff accounted for the majority of attendance. There were 32 attendees at the virtual workshop; while at least 3 were from environmental groups, it is unknown if residents of disadvantaged or tribal communities were present.
At the San Bernardino workshop, City and County NPDES staff (5 in attendance) were able to share some resident viewpoints with Regional Board staff through the course of the workshop presentation.
While NPDES staff were able to provide public feedback to the Regional Board, the perspectives from the disadvantaged communities are best relayed by our City and County leadership.
MS4 Permit Renewal — Staff Working Proposal
March 1, 2024
Next Steps
1. The District and County NPDES representatives have alerted city NPDES representatives of the Tentative Order's release. The Co-Permittees will be meeting in closed session on March 6, 2024, to coordinate reviews and discuss the Tentative Order.
2. The District and County NPDES representatives will be convening with the Riverside and Orange County NPDES representatives (Tri-County Group) on March 12, 2024, to strategize and coordinate reviews of the Tentative Order, and prepare for initial public comments at the March 15, 2024, Regional Board meeting in Anaheim.
3. Presentation to City and County Managers, Elected — NPDES requests to provide a presentation to inform Managers/Electeds of the potential impacts of Tentative Order.
Additionally, due to the limited public notification of the May 2023 workshops (10-day lead time), County NPDES staff approached Jayne Joy, the Regional Board's Executive Officer, regarding the Regional Board's willingness to present to city/county leadership. Ms. Joy agreed and will work with County NPDES staff to schedule the presentation. A copy of the Regional Board's presentation is attached to this Summary.
Recommendation
The Permittees request an agenda item at a SBCTA CCMTAC or Board of Directors meeting in April for both the permit update and Regional Board outreach. NPDES representatives believe that the feedback from our City and County leadership will provide the Regional Board with the true perspectives and priorities of our residents.
MS4 Regional Permit — Timeline to Adoption
•Workshops for
Disadvantaged & Tribal
Communities
— — __j
•2nd Draft -Tentative
Order (tentative)
•60 day (min) limited
public comment period
*Tentative Order released
•60 day (minimum) public
comment period
-Public Workshop
The Permittees share a common goal with the Regional Board to improve water quality and impacts from stormwater. The Permittees strive to ensure permit implementation remains sensible to our respective agencies' operations. Agency NPDES coordinators and the District's NPDES section will continue to update you and greatly appreciate your support, especially during any future testimony before the Regional Board.
2i
MS4 Permit Renewal — Tentative Order
April 2024
Summary Update — April 2024
NPDES MS4 Permit Renewal
Tentative Order
This Summary is being provided to update Permittees' executive management on the current MS4 Permit renewal. As of this summary, the Tentative Order (TO) was released by the Regional Board on March 5, 2024. Public Comment period was extended to a total of 120 days and ends on July 3, 2024.
Background
The Summary Update of October 2022 is attached to this document for convenience.
The Summary of the Public Workshop on March 151h, 2024, is attached to this document.
Public Workshops
The Regional Board will use the upcoming board meetings to have public workshops for the Regional Board members and the public, regarding the TO. Regional Board staff will be going through each section of the TO to summarize the permit to board members for further knowledge of the permit requirements. These board meetings will be held on:
May 3, 2024
City of Newport Beach
June 14, 2024
Orange County Water District
July 26, 2024
City of Orange
September 13, 2024
City of Cypress
October 25, 2024
Inland Empire Utilities Agency
MS4 Regional Permit — Timeline to Adoption
-Workshops for
Disadvantaged & Tribal
Communities
•2nd Draft - Tentative Order
(tentative)
•60 day (min) limited public
comment period
•Tentative Order
released
•60 day (min) public
comment period
•Public Workshop
*Regional MS4
Permit adoption
•End of 120-day comment
period (extended from 60
days)
5175526.3 11 P a c
MS4 Permit Renewal — Tentative Order
April 2024
Next Steps
1. The District and County NPDES representatives have alerted city NPDES representatives of the Tentative Order's release. The Permittees are meeting to review the TO and provide comments to the District.
2. District and County NPDES representatives will continue to work with the Tri-County group (San Bernardino County, Riverside County, and Orange County), and bring submit the comments from the Permittees to the Regional Board before the end of the comment period.
Additionally, District NPDES representatives would like to offer our assistance to our city NPDES representatives to assist in meeting with your city management/electeds regarding the TO and the important changes contained within.
Recommendation
The Permittees request an agenda item at a SBCTA CCMTAC or Board of Directors meeting on May 2, 2024 for the permit update City Managers. NPDES representatives believe that the feedback from our City and County leadership will provide the Regional Board with the true perspectives and priorities of our residents.
5175526.3 2 1
A BEACON ECONOMICS
Cost Impact Analysis of MS4 Tentative
Order for San Bernardino County
September 2024
© 2024 All rights reserved. Beacon Economics LI_C.
Executive Summary
In this report, Beacon Economics estimates the explicit and implicit costs associated with the proposed Regional Municipal Separate Storm Sewer System (MS4) Permit (referred to as Tentative Order (TO)) for the local government agencies in San Bernardino County under the regulatory jurisdiction of the Santa Ana Regional Water Quality Control Board. These Permittees (cities, the county, and the Flood Control District) have been regulated since 1990 under a series of MS4 permits that set forth regulations on how stormwater runoff from urbanized areas is to be monitored and managed.
We find that most new costs ($billions) will be associated with:
Attaining water quality objectives for stormwater, which will effectively require the urban landscape to be constructed in accordance with a Watershed Management Plan (WMP).
Further new costs ($millions) will be incurred in relation to a ratcheting up of existing mandatory mitigation measures, including:
(1) Increasing the frequency of inspections for businesses and construction sites, particularly since general industrial permit holders and all food and drink establishments are now required to undergo annual inspections. (2) Installing, maintaining and monitoring trash and litter capture devices on most street drain inlets. While installation and maintenance have been mandated by the state's trash policy, the requirement for monitoring is a new addition.
(3) Requiring incorporation of features for water quality protection (referred to as Water Quality Management Plan (WQMP)
requirement) into a much broader universe of qualifying public and private development and redevelopment projects.
Over the next 20 years, these changes will cost San Bernardino County nearly $10.8 billion. This estimate does not include all possible costs or unintended consequences that could arise from the change in MS4 permitting requirements. r 40 2
BEACON ECONOMICS
San Bernardino County 20-Yr Cost Estimates (2024 $)
Numeric Limits Compliance/WMP
$
10,219,563,415.05
Develop ment/Re-Dev.
$
552,204,672.74
Comm. Inspection
$
13,321,247.92
Trash
$
6,560,000.00
Ind. Inspection
$
1,947,649.80
Total Costs
$
10,793,596,985.51
NUMERiiO LIYv"iI S COMPLIANCE, WMP DEVELOPMENT, AND COMPLIANCE MAINTENANCE We estimate median capital costs of approximately $7.52 billion and annual O&M costs of $135 million for San Bernardino. Over 20 years, it will cost San Bernardino approximately $10.2 billion to develop and maintain a WMP. • DEVELOPMENT AND RE -DEVELOPMENT Installation of ADA ramps exceeding 5,000 square feet will now trigger a WQMP, which will create delays and constrain city budgets. Due to changes in requirements forwhen a development triggers a WQMP could increase the construction cost of single-family homes by up to $25,000 per home. Assuming the exact same conditions for all single-family home developments in the county, this equates to increased single-family housing costs of $27.6 million across the county. Over 20 years, the aggregate increase in housing costs across the county would be $552.2 million.
Rising constructions costs are particularly problematic as residential construction has decreased substantially over the last 45 years. Low housing supply in the face of a growing population leads to rising home prices. • COMMERCIAL INSPECTIONS Commercial inspection costs are expected to rise by over $13.3 million over the next 20 years in San Bernardino due to more frequent inspections of Low Priority facilities and food and drink establishments. All but one of the agencies that will be disproportionately impacted encompass disadvantaged communities. Of these four, Ontario will likely be impacted most, followed by Chino and Colton.
• TRASH COMPLIANCE Over the next 20 years, it will cost over $6.5 million for San Bernardino to comply with the new monitoring requirements for trash. • INDUSTRIAL INSPECTIONS The changes presented in the TO will increase industrial inspection costs by approximately $1.9 million over the next 20 years. /16
A BEACON ECONOMICS
All the agencies that will be disproportionately impacted encompass disadvantaged communities. Of these four, Fontana and Ontario will likely be impacted most.
In addition to explicit costs, Beacon Economics considers the implicit costs or opportunity costs that will likely be incurred by San Bernardino County in meetingthe proposed requirements. These costs include those associated with increased tax rates and redirected county funds. The financial implications of the TO raise concerns about resource allocation in counties already facing serious socioeconomic challenges.
Redirecting funds to meet TO requirements could undermine ongoing efforts to support disadvantaged communities, risking the deepening of existing economic hardships.
Cost
Share
%
Capital
($M)
1-Yr
0&M
($M)
20-Yr
0&M
($M)
General
Fund
($M)
Share of
General Fund Budget
Capital
1-Yr
0&M
Capital/5+i-
Yr 0&M
Estimated Median Cost (WMP)
$7,522
$135
$2,698
Grand Terrace
1.66%
$125
$2
$45
$7.86
1588.5%
28.5%
346.2%
Highland
3.63%
$273
$5
$98
$23.85
1144.9%
20.5%
249.5%
Yucaipa
4.19%
$315
$6
$113
$28.81
1093.9%
19.6%
238.4%
Chino Hills
5.23%
$393
$7
$141
$55.27
711.8%
12.8%
155.1%
Loma Linda
2.31%
$174
$3
$62
$26.71
650.4%
11.7%
141.7%
Rancho Cucamonga
8.37%
$630
$11
$226
$117.83
534.3%
9.6%
116.4%
County of San
Bernardino
13.51%
$1,016
$18
$364
$193.00
526.5%
9.4%
114.7%
Upland
4.15%
$312
$6
$112
$61.30
509.2%
9.1%
111.0%
Big Bear Lake
1.63%
$123
$2
$44
$24.26
505.5%
9.1%
110.2%
Fontana
9.51%
$715
$13
$257
$149.08
479.8%
8.6%
104.6%
Montclair
2.45%
$184
$3
$66
$39.36
468.2%
8.4%
102.0%
Colton
3.45%
$259
$5
$93
$65.94
393.5%
7.1%
85.8%
San Bernardino
10.53%
$792
$14
$284
$224.81
352.3%
6.3%
76.8%
Chino
4.95%
$372
$7
$134
$112.30
331.5%
5.9%
72.3%
Redlands
5.10%
$384
$7
$138
$115.73
331.5%
5.9%
72.2%
Rialto
5.34%
$402
$7
$144
$129.29
310.7%
5.6%
67.7%
Ontario
9.00%
$677
$12
$243
$428.87
157.8%
2.8%
34.4%
SB County Flood
1 5.00%
1 $376
$7
$135
-
-
-
Average
6%
$418
$7
$150
$106.13
594%
11%
129%
Median
5%
$374
1 $7
$134
$65.94
1 505%
1 9%
110%
SOCIECONOMIC FACTORS AND DISADVANTAGED COMMUNITIES The
county's socioeconomic vulnerabilities are profound, with 33% of its population living in Disadvantaged Communities (DACs). Nine agencies in the county have poverty rates above the state average.
Six of these nine are within the Santa Ana region, including San Bernardino (18%), Ontario (13%), Rialto (15%), Montclair (10%), Highland (16%), and Colton (15%). �. 4
A BEACON ECONOMICS
Considering the stormwater program cost shares assigned to each agency in San Bernardino County, we find that the estimated Numeric Limits Compliance/WMP (capitals p readout over five years plus one year's O&M) would equate, at best, to a third, and at worst, three -and -a -half times an agency's general fund budget. This means if agencies attempt to payfortheirfair shares of the numeric limit compliance/regional WMP development in five years, in most cases, theywill have no general funds left over for other public expenditures (legal services, libraries, parks and recreation, police, public works, etc.). • CAPITAL AND O&M COSTS San Bernardino County faces severe financial challenges under the TO, with most cities experiencing capital costs exceeding 300% of their general funds. Particularly, Grand Terrace, Highland, and Yucaipa are highlighted as cities where one year's O&M costs alone consume a large share of their generaIf unds. The potential financial demands associated with the TO could present these cities with difficult decisions between regulatory compliance and maintaining essential public services and infrastructure.
Cities with poverty rates above the 12% state average would need to contribute substantially to WMP costs, indicating that economic vulnerability is / prevalent in areas financially burdened by TO requirements. /
IMPACTS ON AQUATIC LIFE
While the goal of the TO is to increase the water
quality, the impact on local aquatic life may be negative, and may conflict with conservation efforts by the MWD. The San Bernardino MWD is leading a large-scale habitat conservation plan, including multiple tributary restoration projects along the Santa Ana River. Currently, these tributaries have flows and are important habitats for aquatic species such as the western pond turtle, Santa Ana sucker, and Arroyo chub, some of which are federally threatened.
Photo credit: Oregon Dept. of Fish & Wildlife; Santa Ana Watershed Project Authority; Zack Abbey.
A significant concern of the TO is the potential impact of the new prohibitions on these local aquatic species.
BEACON ECONOMICS
Introduction
The Santa Ana Regional Water Quality Control Board (Santa Ana Water Board) is a state government agency responsible for protecting and improving water quality within the Santa Ana River Watershed, which spans portions of Riverside, San Bernardino, and Orange counties in Southern California.
Stormwater from the Santa Ana River Watershed flows through a network of channels and eventually drains into the Pacific Ocean, via the Santa Ana River. The Municipal Stormwater Program of the Santa Ana Water Board regulates stormwater discharges from municipal separate storm sewer systems (MS4s) throughout the Santa Ana River Watershed. As per the Federal Water Pollution Control Act (Clean Water Act) section 402(p), stormwater permits are required for discharges from an MS4 that serves a population of 100,000 or more.
MS4 permits in the Santa Ana River Watershed have been issued since the 1990s and have been renewed four times since their initial issuance. Until now, the Santa Ana Water Board has regulated portions of the Orange, Riverside, and San Bernardino counties located within the Santa Ana Region through separate Phase 1 MS4 permits for each county. These permits expired but were administratively extended and so, remain in effect.
Currently, a Tentative Order (TO) has been drafted for a fifth iteration, where for the first time, the separate permits would transition to a single Regional MS4 permit covering those portions of the Orange, Riverside, and San Bernardino counties (including their cities and flood districts) located within the jurisdiction of the Santa Ana Water Board.
In addition to consolidation of the three counties' MS4 permits into a single regional permit, the TO addresses administrative details, discharge prohibitions —including those related to non-stormwater runoff' and trash —and outlines specific requirements for managing new developments to reduce pollution and hydrological impacts. It also contains provisions for detecting and eliminating illicit discharges, as well as public education initiatives and training programs to ensure compliance. ' The TO includes a list of authorized non-stormwater discharges. These authorized discharges include air conditioning copsensate, fire hydrant flushing, non-commercial vehicle washing, among other exempt discharges.
A BEACON ECONOMICS
ON
Most notably the TO includes responsibilities for Perm ittees to:
(1) Engage in an iterative process for continual improvements in all their programs, to achieve compliance with Effluent Limits and Receiving Water Limitations, including numeric Effluent Limits based on Waste Load Allocations (WLAs). (2) Adopt a system of performance metrics prescribed by the draft permit to objectively measure the performance of their control measures and Best Management Practices (BMPs).
While the primary goal of the TO is to strengthen BMPs and pollutant control measures in pursuit of better water quality (as established in the Water Quality Control Plan for the Santa Ana River Basin) an objective analysis of the costs is necessary to meet federal and state requirements.' In this report, Beacon Economic estimates the costs for San Bernardino County Permittees associated with the more stringent MS4 permitting requirements as set forth in the TO.
2 Federal law mandates that "social, economic, and environmental consequences of proposed decisions shall be clearly stud in [informational materials]." (40 C.F.R. § 25.4(b)(2).) State law mandates evaluation of all "impacts of the AtVA&Wg!8
'5t w(%Fglity impacts. (Wat. Code, § 13149.2, subd. (b)(2).)
Part I. Explicit Costs
As a first step, Beacon Economics estimates the expected explicit costs to be expended with the new requirements. Explicit costs are those directly associated with outlays of money, includingthose incurred once and those incurred on an ongoing basis.
The TO is based on the federal standards for MS4s established by the Clean Water Act (CWA) section 402(p)(3)(B), which require MS4s to "reduce the discharge of pollutants to the maximum extent practicable [MEP]." MEP is the highest level of effectiveness that can be achieved employing whatever BMPs are technically feasible (i.e., those that are likelyto be effective) and are not cost prohibitive.3 The TO also references State Water Resources Control Board precedential orders directing that MS4 permits in California require the eventual attainment of water quality standards.
The MEP standard applies to a series of provisions in the TO referred to as the minimum control measures (40 CFR, section 122.26 (d)(2)(iv)). These measures include, among others, discharge elimination and remediation, runoff monitoring and reporting, conducting program effectiveness assessments, conducting municipal inspections, and public education.
WATERSHED MANAGEMENT PLAN COSTS
As part of the new permitting requirements, Permittee counties will likely need to adopt Watershed Management Plans (WMPs) or similar plans attempting compliance with the numeric limits in the TO. For the purposes of this section, numeric limits compliance measures and WMPs are synonymous.
To estimate the capital cost of developing these plans, as well as the associated annual Operations and Maintenance (O&M) costs, cost estimates were extrapolated from WMP groups as presented in the 2021 Los Angeles Water Board Study.' These costs are incurred by implementing a systemwide combination of parcel -scale water quality controls, street 3 State Water Resources Control Board Office of Chief Counsel February 11, 1993 Memorandum, "Definition of Maximum Ex�ipt Practicable."
° 119 angeles/wateri r m r /
a
drainage retrofits (often referred to as "Green Streets") and regional stormwater capture facilities.
Table 1. Permittees' Projected Cost Estimates for EWMP Full Implementation (Millions of Dollars, 2019$)s
EWMP Group
Capital
(Low)
Capital
(High)
Annual
0&M
(Low)
Annual
0&M
(High)
Total20-Yr
Cost (Low)
Total20-Yr
Cost (High)
Ballona Creek
$2,892.12
$2,892.12
$82.55
$82.55
$4,543.09
$4,543.09
Dominguez Channel
$1,340.65
$1,340.65
$15.39
$15.39
$1,648.41
$1,648.45
Malibu Creek
$201.54
$201.54
$3.86
$3.86
$278.71
$278.71
Marina Del Rey
$368.12
$368.12
$2.39
$2.39
$415.91
$415.91
North Santa Monica Bay
$34.51
$34.51
$1.15
$1.15
$57.55
$57.55
Palos Verdes Peninsula Cities
$90.00
$129.50
$1.34
$1.52
$116.80
$159.90
Rio Hondo/San Gabriel River
NR
NR
NR
NR
$121.80
$121.80
Santa Monica Bay J2 & J3
$660.02
$660.02
$4.82
$4.82
$756.38
$756.38
South Bay Beach Cities
$46.13
$95.48
$2.15
$3.33
$89.04
$162.00
Upper LA River
$6,541.98
$6,541.98
$123.38
$123.88
$9,009.65
$9,009.65
Upper San Gabriel River
$1,216.34
$1,216.34
$44.31
$44.31
$2,102.59
$2,102.59
Upper Santa Clara River
$669.12
$669.12
NR
NR
$669.12
$669.12
Total
$19,809.06
$19,925.11
Source: Los Angeles Water Board Analysis.
Table 2. Estimated WMP Capital and O&M Costs for San Bernardino County, Extrapolated by Relative Land Area (Millions of Dollars, 201" EWMP Group
Land (in Acres)
San
Bernardino
Land Ratios
San Bernardino County Costs
Total20-Yr
Cost (Low)
Total20-Yr
Cost (High)
Ballona Creek
81,677
4.22 $19,176.88
$19,176.88
Dominguez Channel
50,857
6.78 $11,174.85
$11,175.12
Malibu Creek
32,992
10.45 $2,912.52
$2,912.84
Marina Del Rey
1,409
244.69
$101,768.58
$101,771.02
North Santa Monica Bay
1,056
326.48
$18,789.13
$18,776.07
Palos Verdes Peninsula Cities
14,464
23.84 $2,784.07
$3,811.41
Rio Hondo/San Gabriel River
20,416
16.89 $2,056.85
$2,056.85
Santa Monica Bay J2 & J3
34,362
10.03 $7,589.04
$7,589.44
South Bay Beach Cities
15,217
22.66 $2,017.35
$3,672.19
Upper LA River
309,757
1.11 $10,027.94
$10,038.99
Upper San Gabriel River
79,185
4.35 $9,154.55
$9,154.33
Upper Santa Clara River
199,811
1.73 $1,154.54
$1,154.54
Average
70100.24
56.10 $15,717.19
$15,940.81
Median
33677.00
10.24 $8,371.89
Source: Analysis by Beacon Economics.
5 Cost estimates are based on Permittees' EWMP estimates as presented under "Method 2" of the LA Water Board Study. e Lei ratios were calculated using the included lands as reported in each watershed's annual reports.
WOW
BEACON ECONOMICS
9 Table 3. Median WMP Capital and O&M Costs for San Bernardino County, Extrapolated by Relative Land Area, (Millions of Dollars, 2024$)
San Bernardino County
2019$
Present Value
(2024$)
Capital, Median
$6,161.71
$7,521.60
0&M (20-Yr), Median
$2,210.18
$2,697.96
Total Cost, Median
$8,371.89
$10,219.56
Source: Analysis by Beacon Economics.
Table 4. Average WMP Capital and O&M Costs for San Bernardino ('ounty, Extrapolated by Relative Land Area, (Millions of Dollars, 2n?4A) San Bernardino County
2019$
Present Value
(2024$)
Capital, Average
$12,565.65
$15,338.89
0&M (20-Yr), Average
$3,263.03
$3,983.18
Total Cost, Average
$15,829
$19,322.46
Source: Analysis by Beacon Economics.
CAPITAL COSTS In terms of averages, the estimated capital cost for San Bernardino County is $15.34 billion in today's dollars. However, these averages may include outlier data points, such as the cost of the Marina Del Rey WMP.
In terms of medians, the estimated capital cost for San Bernardino County is approximately $7.5 billion in today's dollars.
O&M COSH'S The average O&M costs for San Bernardino County equal $3.98 billion in today's dollars. These values equate to approximately $200 million for San Bernardino per year. Again, these averages may include outlier data points, such as the costs of the Marina Del Rey WMP. It is more reasonable to consider median costs instead. The estimated median O&M costs for San Bernardino County equal $2.7 billion over the next 20 years. This corresponds to annual O&M costs of around $134 million.
TOTAL'01MP OOSTS Over the next 20 years, it will cost San Bernardino County an average of $19.3 billion to cover the capital and annual O&M costs of developing a WMP. As for the median, over the next 20 years, it will cost San Bernardino County an estimated $10.2 billion in median capital and annual O&M costs to develop a WMP. /-4. 10
BEACON ECONOMICS
Table 5. Estimated WMP Capital and O&M Costs for Agencies within San Bernardino County, Extrapolated by Relative Land Area, (Millions of Dollars, 2024$) San Bernardino County Proposed WMP
Agency
Land Area
(Acres)
Population
Cost
Share
Costs (in Millions, 2024$)
Capital
0&M
(Annual)
0&M (20-
Yr)
Total (20-
Yr)
Big Bear Lake
4074.24
4914
1.63%
$122.60
$2.20
$43.98
$166.58
Chino
14835.2
93137
4.95%
$372.32
$6.68
$133.55
$505.87
Chino Hills
21176.45
77058
5.23%
$393.38
$7.06
$141.10
$534.48
Colton
9469.38
53154
3.45%
$259.50
$4.65
$93.08
$352.57
Fontana
27432.45
213851
9.51%
$715.30
$12.83
$256.58
$971.88
Grand Terrace
2255.04
12814
1.66%
$124.86
$2.24
$44.79
$169.64
Highland
10562.11
55984
3.63%
$273.03
$4.90
$97.94
$370.97
Loma Linda
5487.62
25228
2.31%
$173.75
$3.12
$62.32
$236.07
Montclair
3520.64
37494
2.45%
$184.28
$3.31
$66.10
$250.38
Ontario
31339.71
180717
9.00%
$676.94
$12.14
$242.82
$919.76
Rancho
Cucamonga
26851.71
173545
8.37%
$629.56
$11.29
$225.82
$855.38
Redlands
21201.09
71972
5.10%
$383.60
$6.88
$137.60
$521.20
Rialto
15144.06
102985
5.34%
$401.65
$7.20
$144.07
$545.72
San Bernardino
35303.55
223230
10.53%
$792.02
$14.20
$284.10
$1,076.12
Upland
9782.02
78376
4.15%
$312.15
$5.60
$111.97
$424.11
Yucaipa
16847.42
53991
4.19%
$315.15
$5.65
$113.04
$428.20
County of SB
89484.03
137778
13.51%
$1,016.17
$18.22
$364.50
$1,380.66
District
-
-
5.00%
$376.08
$6.74
$134.90
$510.98
Total
344,766.72
1596228
1000/b
$7,521.60
$134.90
$2,697.96
$10,219.56
Source: San Bernardino Stormwater Management Program Budget and Cost Sharing Allocation for FY 2024- 2025. Analysis by Beacon Economics.
t 11
BEACON ECONOMICS
Figure 1. Estimated WMP Capital and 20-Year O&M Costs for SBC Agencies (Millions of Dollars, 2024$)
$1,400.00
$1, 200.00
$1,000.00
$800.00
$600.00
$400.00
$200.00
0.00 "
O p 0 °= U W= Q Z p m m
m U J G U = D } U U- C,' U = O W N Vl
■ Capital Costs I O&M Costs (20-Yr)
Source: San Bernardino Stormwater Management Program Budget and Cost Sharing Allocation for FY 2024- 2025. Analysis by Beacon Economics.
TRASH COMPLIANCE COSTS
According to the TO, Permittees must choose between two options for trash management:
1) Track 1 requires the installation of Full Capture Devices (FCDs) to control trash larger than 5mm in size from priority, designated and equivalent land uses. 2) Track 2 requires the installation of a combination of trash capture systems that achieve equivalency of Full Capture Systems.
Permittees made theirtrack selection several years ago based on requirements setforth in the state's trash policy adopted bythe State Water Resources Control Board (SWRCB) in 2015.' The state's version of Track 1 trash compliance does not include a requirement for monitoring.
https://www.waterboards.ca.gov/water_issues/programs/trash_control/documentation.htmt ot BEACON ECONOMICS
12 Instead, the state's trash policy requires the installation, operation, and maintenance of full capture systems. The trash control requirements set forth in the TO may not be in -line with the state board's trash reduction requirements. To require Track 1 agencies to monitor their full capture systems is unreasonable, as agencies had not anticipated this new requirement when making their track selection and changing a trash management system once it is up and running is costly.
Each Track 1 Permittee in San Bernardino will incur expenses related to the following tasks:
a. Initial Assessment — Develop an On -Land Visual Trash Assessments (OVTA) plan and estimate trash generation rates from non -protected full capture systems. b. Monitoring Efforts — Estimate trash generation rate reduction and conduct inspections.
c. Increased Annual Reporting Efforts — GIS map updates, annual report templates, and coordination with O&M.
An initial assessment is expected to cost a flat fee of $30,000. Monitoring efforts are expected to cost each Track 1 Permittee $15,000 annually and increased annual reporting efforts are expected to cost each Permittee $4,000 annually in additional expenses.' For the county's Track 1 Permittees,'these three tasks will cost a combined $4.92 million over the next 20 years.
ADDITIONAL INSPECTION COSTS
Each Permittee must have an effective inspection program for industrial, commercial, and construction sites to minimize or reduce the pollutant discharge into MS4s. The TO specifies inspection frequencies for different priority sites:
• High Priority: Inspected once a year.
• Medium Priority: Inspected once every two years.
• Low Priority: Inspected once every five years.
Permittees can, however, propose alternative inspection schedules. 6 Based on consultation with stormwater program expert within Riverside County. 40* BEACON ECONOMICS
13 INDUSTRIAL INSPECTION COSTS
The current permit has the same schedule of inspections as specified in the TO for High and Medium Priority sites. However, the current permit requires that Low Priority sites be inspected once every permit term. Permit terms can last longer than five years; the current term has extended to 14 years. The TO specifies that Low Priority sites be inspected once every five years. The new industrial inspection specifications will impact agencies' Low Priority industrial facilities.
Table 6. Industrial Facilities in San Bernardino Agencies, Fiscal Year 2022-2023 San Bernardino County Industrial Facilities (FY 2022-2023) 0-99
100-199
200-499
500-999
Big Bear Lake
Chino
Fontana
Ontario
Chino Hills
Colton
County of SB
San Bernardino
Grand Terrace
Montclair
Highland
Rancho Cucamonga
Loma Linda
Rialto
Redlands
Upland
Yucaipa
Source: San Bernardino County Stormwater Program Annual Report for 2022-2023. Analysis by Beacon Economics.
In the 2022-2023 fiscal year, of the nearly 3,000 industrial facilities located within the jurisdiction of the 17 Co-Permittees, 3.3% reported deficiencies. Although the number of industrial facilities has increased by 84% since the 2006-2007 fiscal year, the percentage of inspections finding deficiencies has dropped from approximately 60% to less than 20% over the last 15 years.
Moreover, the severity of deficiencies has substantially decreased overtime. In the 2006-2007 fiscal year, over 90% of deficiencies required some level of enforcement action, whereas in the 2022-2023 fiscal year, over 90% of deficiencies required no enforcement action.
A6 14
A BEACON ECONOMICS
Table 7. Industrial Facility Inspections and Deficiencies in San Bernardino Agencies, FY 2006-2007 through FY 2022-2023
San Bernardino County Industrial Facility Inspections and Deficiencies 2006-
2007
2007-
2008
2010-
2011
2011-
2012
2012-
2013
2013-
2014
2014-
2015
2022-
2023
Inspections
1561
1162
1527
1364
1280
1344
1085.0
554.0
Deficiencies
933
661
845
674
578
623
474.0
96.0 % Deficient
59.8°/a
56.9%
55.3%
49.4%
1 45.2%
1 46.4%
i 43.7%
i 17.3%
Source: San Bernardino County Stormwater Program Annual Reports retrieved from https://sbcountystormwater.org/government/resources/ . Analysis by Beacon Economics.
Figure 2. Industrial Facility Inspections and Deficiencies in San Bernardino Agencies, FY 2006-2007 through FY 2022-2023
3000.0
2500.0
2000.0
1500.0
1000.0
500.0
o.o
2006-20072007-20082010-20112011-20122012-20132013-20142014-20152022-2023 ® Total Industrial Inspections ■ # Deficiencies Reported Source: San Bernardino County Stormwater Program Annual Reports. Analysis by Beacon Economics. �. 15
A BEACON ECONOMICS
Table 8. Industrial Facility deficiencies and Enforcement Severity in San Bernardino Agencies, FY 2006-2007 through FY 2022-2023
San Bernardino County Agencies, Industrial Inspection Actions by Severity (Low to High) 2006
-
2007
2007-
2008
2010-
2011
2011-
2012
2012-
2013
2013-
2014
2014-
2015
2022-
2023
None Required
0.0 0.0
0.5 0.0
0.0 0.0
0.0 0.5
VerbalwEduc/Outreach
0.1 0.2
0.2 0.0
0.0 0.1
0.2 0.0
NOC
0.8 0.5
0.1 0.7
0.8 0.8
0.7 0.5
NOV
0.1 0.2
0.0 0.3
0.1 0.1
0.1 0.0
Require Clean Up or Charge
Clean Up Costs
0.0 0.0
0.1 0.0
0.0 0.0
0.0 0.0
Admin Order
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Stop Work Order
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Admin Civil Action
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Refer to the RWQCB
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
Source: San Bernardino County Stormwater Program Annual Reports. Analysis by Beacon Economics. presents data on the share of High, Medium, and Low Priority industrial facilities within each agency in San Bernardino. For example, in fiscal year 2014-2015, approximately 20% of industrial facilities in Highland were High Priority and the remaining 80% were Low Priority.
Agencies where most industrial facilities are already classified as High or Medium Priority will not experience see as significant a change with the new industrial inspection requirements set forth in the TO as those agencies where most industrial facilities are classified as Low Priority.
• Most industrial facilities in Colton, Chino Hills, Redlands, Rialto, Upland, and Yucaipa have been historically classified as High Priority.' Most industrial facilities in Big Bear Lake, Grand Terrace, Loma Linda, Montclair, Rancho Cucamonga, the City of San Bernardino, and the unincorporated regions of San Bernardino County have historically been classified as Medium Priority. The anticipated impact of additional industrial inspections will be relatively low for these agencies. 8 Industrial facilities in the Flood Control District have also historically been classified primarily as High Priority, forthe anpual reports where data is available.
BEACON ECONOMICS
16 BBL
CHI
CHH
COL
FON
G RT
HIG
LOL
MON
ONT
RAC
RED
RIA
SBD
UPL
YUC
SBC
FCD
Most industrial facilities in Chino, Fontana, Highland, and Ontario have historically been classified as Low Priority. The anticipated impact of additional industrial inspections will be relatively high forthese agencies.
• All the agencies that will be disproportionately impacted by the new industrial inspection requirements house disadvantaged communities.10 Of these four agencies, Fontana and Ontario will likely see a disproportionate impact, as they each have a significant number of industrial facilities, as shown in Table 6.
Table 9. Heat Map of Industrial Facilities in San Bernardino by Priority Level as a Share of All Facilities within Agency, FY 2006-2007 thrO gh FY 2014-2015 San Bernardino Countv Industrial Facilities by Priority Level FY 2006-2007
FY 2007-2008
FY 2010-2011
FY 2011-2012
FY 2012-2013
FY 2013-2014
FY 2014-2015
H
M
L
H
M
L
H
M
L
H
M
L
H
M
L
H
M
L
H
M
L
1.0 0.0
0.0 1.0
0.0 0.0
0.2 0.8
0.0 0.1
0.9 0.0
0.0 0.9
0.1 0.0
0.8 0.2
0.0 0.8
0.2 0.1
0.1 0.8
0.1 0.2
0.7 0.1
0.3 0.6
0.1 0.3
0.6 0.1
0.3 0.6
0.1 0.3
0.6 0.1
0.3 0.6
1.0 0.0
0.0 1.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
1.0 0.0
0.0 1.0
0.0 0.0
1.0 0.0
0.0 1.0
0.0 0.0
0.5 0.5
0.0 0.7
0.2 0.1
0.7 0.2
0.1 0.6
0.3 0.1
0.6 0.3
0.1 0.4
0.5 0.1
0.1 0.3
0.7 0.1
0.5 0.4
0.0 0.3
0.6 0.1
0.3 0.6
0.1 0.3
0.6 0.1
0.3 0.6
0.1 0.3
0.6 0.0
0.0 0.0
0.0 0.0
0.0 0.0
1.0 0.0
0.0 1.0
0.0 0.0
1.0 0.0
0.0 1.0
0.0 0.0
1.0 0.0
0.0 1.0
0.0 0.5
0.0 0.5
0.5 0.0
0.5 0.5
0.0 0.5
0.5 0.0
0.5 0.0
0.0 1.0
0.2 0.0
0.8 0.0
0.5 0.5
0.0 0.5
0.5 0.0
0.7 0.3
0.0 0.7
0.3 0.0
0.7 0.3
0.0 0.7
0.3 0.0
0.7 0.3
0.2 0.4
0.4 0.3
0.4 0.3
0.3 0.5
0.2 0.3
0.6 0.2
0.3 0.5
0.2 0.3
0.5 0.2
0.4 0.5
0.2 0.2
0.3 0.5
0.2 0.3
0.5 0.2
0.3 0.5
0.2 0.3
0.5 0.2
0.3 0.5
0.2 0.3
0.5 0.2
0.3 0.5
0.2 0.5
0.3 0.2
0.5 0.3
0.2 0.4
0.4 0.3
0.4 0.3
0.3 0.4
0.3 0.3
0.4 0.3
0.3 0.4
0.3 0.4
0.6 0.0
0.4 0.6
0.0 0.5
0.5 0.0
0.5 0.5
0.0 0.5
0.5 0.0
0.6 0.4
0.0 0.6
0.4 0.0
0.3 0.3
0.4 0.5
0.2 0.3
0.9 0.1
0.0 0.9
0.1 0.0
0.7 0.1
0.2 0.7
0.1 0.3
0.7 0.1
0.3 0.2
0.3 0.6
0.1 0.0
0.9 0.1
0.6 0.3
0.0 0.6
0.4 0.0
0.6 0.4
0.0 0.6
0.4[0.4
.0
0.6 0.4
0.4 0.3
0.3 0.3
0.5 0.3
0.4 0.1
0.5 0.3
0.1 0.6
0.5 0.2
0.3 0.5
0.3 0.3
0.3 0.3
1.0 0.0
0.0 1.0
0.0 0.0
1.0 0.0
0.0 1.0
0.0 0.0
1.0 0.0
0.0 1.0
0.0 0.0.0.
0.0 0.0
0.6 0.4
0.1 0.5
0.4 0.1
0.9 0.1
0.0 0.8
0.2 0.0
0.6 0.3
0.1 0.4
0.5 0.1
0.4 0.5
0.1 0.8
0.2 0.0
0.9 0.1
0.0 N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
I N/A
N/A
Source: San Bernardino County Stormwater Program Annual Reports. Analysis by Beacon Economics.
Note: H = High Priority, M = Medium Priority, L = Low Priority facilities 10 Based on 2022 Census tracts. Data retrieved from: https://oehha.ca.gov/catenviroscreen/sb535 . Parts of Chino are co?Wdered disadvantaged.
Vftj
BEACON ECONOMICS
17 On average, industrial facilities within San Bernardino agencies have historically been classified as follows: 788 High Priority, 1136 Medium Priority, and 1377 Low Priority. Due to the change in the frequency of inspections (from once per permit term, to once every five years) required for Low Priority facilities set forth in the TO, these industrial facilities will face higher inspection costs.
Considering an inspection in San Bernardino costs $250 per visit, and independent of the hours of inspection conducted within a visit, inspection costs are expected to rise by $44,274 annually.
Inspection costs are expected to rise by $885,490 over the next 20 years, combined for agencies in San Bernardino.
Table 10. Estimate of Additional Industrial. Inspection Costs in San Bernardino County High
(Avg)
Med (Avg)
Low (Avg)
Total Facilities
788
1136
1377
Current Freq/year
1 0.5
0.0714286
New (TO) Freq/year
1 0.5
0.2 Inspection Cost
$250
$250
$250
Current Insp. Cost
$197,000
$142,000
$24,597
New Insp. Cost
$197,000
$142,000
$68,871
Added Cost
(Annual)
$0
$0
$44,274
Added Cost (20-Yr)
$0
$0
$885,490
Source: San Bernardino County Stormwater Program Annual Reports. Analysis by Beacon Economics.
On average, between 15% and 25% of industrial facilities in San Bernardino have historically had general use permits, and between 75% and 85% of facilities have had non - general permits.
18 BEACON ECONOMICS
Table 11. Industrial Facilities by Permit Type for San Bernardino County Agencies San Bernardino County Agencies, Industrial Permits by Type 2006-
2007-
2010-
2011-
2012-
2013-
2014-
2007
2008
2011
2012
2013
2014
2015
Average
# Permits
709
635
667
592
589
555
531
611
c
a�
CD
Share of Total
24.0%
21.4%
19.9%
18.0%
17.2%
15.7%
14.8%
18.7%
�o
a�
# Permits
2244
2332
2684
2704
2842
2979
3046
2690
c
0 Z
Share of Total
76.0%
78.6%
80.1%
82.0%
82.8%
84.3%
85.2%
81.3%
Total
2953
2967
3351
3296
3431
3534
3577
3301
Source: San Bernardino County Stormwater Program Annual reports. Analysis by Beacon Economics.
While under the current permit, industrial facilities with general use permits do not have a specified frequency of inspection different to that specified by their priority level, under the TO, generally permitted industrial facilities will be considered High Priority. As such, they will be subject to annual inspections.
Inspection costs will increase for Medium and Low Priority industrial facilities with general use permits, but not for High Priority facilities as they are currently subject to annual inspections. The additional costs for new inspections of Low Priority industrial facilities have already been accounted for above. If 18.7% of Medium Priority facilities are general permit holders, we estimate that this requirement change will adversely impact around 212 facilities. Considering that the cost of an inspection is $250 in San Bernardino, this change will equate to additional costs of $53,108 per year, or $1,062,160 over the next 20 years.
Overall, the changes presented in the TO will increase industrial inspection costs by over $1.94 million in the next 20 years, due to more frequent inspections of Low Priority industrial facilities and of facilities with general use permits. r-4. 19
A BEACON ECONOMICS
COMMERCIAL INSPECTION COSTS
Like industrial inspections, commercial inspections are expected to increase in frequency —and in turn, in costs —in San Bernardino County, based on the requirements set forth in the draft permit.
Table `i2. uonlrnercial Facilities in San Bernardino Agencies, Fiscal Year 2022-202 San Bernardino
County Commercial Facilities (FY 2022-2023)
1000-
0-99
100-199
200-499
500-999
1999
2000+
Grand Terrace
Big Bear Lake
Chino Hills
Chino
Ontario
Highland
Rancho Cucamonga
Colton
Redlands
Loma Linda
Upland
Fontana
San Bernardino
Yucaipa
Montclair
Rialto
SB County
Source: San Bernardino County Stormwater Program Annual Report for 2022-2023. Analysis by Beacon Economics.
The share of commercial inspections reporting deficiencies in San Bernardino has decreased substantially over time. Whereas historically (between fiscal year 2005-2006 and fiscal year 2014-2015), about 30% of commercial facility inspections have reported deficiencies, in the most recent fiscal year 2022-2023 only about 10% of commercial facility inspected reported deficiencies.
Table 13 presents data on the share of High, Medium, and Low Priority commercial facilities within each agency in San Bernardino. For example, in fiscal year 2014-2015, approximately 20% of commercial facilities in Highland were Medium Priority and 70% were Low Priority.
Agencies where most commercial facilities are already classified as High or Medium Priority will not experience as significant a change with the new commercial inspection requirements set forth in the TO compared to those agencies where most commercial facilities are currently classified as Low Priority.
Most commercial facilities in Chino Hills, Montclair, Rancho Cucamonga, Redlands, and Rialto have been historically classified as High Priority. Most f_r. 20
BEACON ECONOMICS
commercial facilities in Big Bear Lake, Fontana, Loma Linda, Ontario," and the unincorporated parts of San Bernardino County have historically been classified as Medium Priority. The anticipated impact of additional commercial inspections will be relatively low for these agencies.
• Most commercial facilities in Chino, Colton, Highland, Loma Linda, Ontario, Upland, and Yucaipa have historically been classified as Low Priority. The anticipated impact of additional commercial inspections will be relatively high for these agencies.
• All but one of the agencies that will be disproportionately impacted by the new commercial inspection requirements encompass disadvantaged communities.12 Of these four agencies, Ontario will likely be impacted most, followed by Chino and Colton, as they each have a substantial number of commercial facilities, as shown in Table 12.
Figure 3. Commercial Facility Inspections and Deficiencies in San Bernardino Agencies, FY 2005-2006 through FY 2022-2023
6000
5000
4000
3000
2000
1000
n
ti6� tiI",
I Total Inspections ` # Deficiencies Reported
Source: San Bernardino County Stormwater Program Annual Reports. Analysis by Beacon Economics. " Half of the industrial facilities in Loma Linda and Ontario are classified as Medium Priority, and half are classified as Lo,v4Priority.
12 ed ZO r r cts; f�Oretrieved from: httos://oehha.ca.gov/catenviroscreen/sb535. Parts of Chino, i flea o a n a,, �f� r o, and Upland are classified as disadvantaged. 21 On average, commercial facilities within San Bernardino agencies have been classified as follows: 2,417 High Priority, 3,501 Medium Priority, and 4,242 Low Priority. Due to the change in frequency of inspections (from once per permit term, to once every five years) required for Low Priority facilities set forth in the TO, these commercial facilities will face higher inspection costs.
Considering an inspection in San Bernardino costs $250 per visit, and independent of the hours of inspection conducted within a visit, inspection costs are expected to rise by $136,336 annually.
Inspection costs are expected to rise by over $2.7 million over the next 20 years, combined for agencies in San Bernardino.
Table 13. Heat Map of Commercial Facilities in San Bernardino by Priority Level as a Sh-are of A11 Facilities within A!9ence!, FY 2006-,2007 threeu h Fit 201 4.-22015 San Bernardino County Commercial Facilities by Priority Level FY 2006-2007
FY 2007-2008
FY 2010-2011
FY 2011-2012
FY 2012-2013
FY 2013-2014
FY 2014-2015
FH7
M
L
H
M
L
H
M
L
H
M
L
H
M
L
H
M
L
H
M
L
BBL
1.0 1 0.0
0.0 0.2
0.8 0.0
0.2 0.8
0.0 0.2
0.8 0.0
0.2 0.8
0.1 0.2
0.8 0.1
0.2 0.8
0.1 CHI
0.0 0.3
0.7 0.0
0.3 0.7
0.0 0.3
0.7 0.0
0.3 0.7
0.0 0.3
0.7 0.0
0.3 0.7
0.0 0.3
0.7 CHH
0.7 0.3
0.0 0.7
0.3 0.0
0.7 0.3
0.0 0.7
0.3 0.0
0.7 0.3
0.0 0.3
0.3 0.4
0.7 0.3
0.0 COL
0.0 0.3
0.7 0.2
0.1 0.7
0.2 0.1
0.7 0.2
0.1 0.7
0.0 0.3
0.7 0.2
0.1 0.7
0.0 0.3
0.7 FON
0.6 0.3
0.1 0.2
0.5 0.3
0.2 0.5
0.3 0.1
0.7 0.3
0.1 0.6
0.3 0.2
0.6 0.2
0.2 0.6
0.2 GRT
0.2 0.5
0.2 0.3
0.4 0.3
0.3 0.4
0.3 0.3
0.4 0.3
0.3 0.4
0.3 0.3
0.4 0.3
0.3 0.4
0.3 HIG
0.6 0.1
0.3 0.6
0.2 0.2
0.6 0.2
0.2 0.5
0.3 0.2
0.4 0.4
0.2 0.0
0.3 0.7
0.0 0.2
0.7 LOL
0.0 0.5
0.5 0.0
0.5 0.5
0.0 0.5
1 0.5
0.0 0.5
0.5 0.0
0.5 0.5
0.0 0.5
1 0.5
0.0 0.5
0.5 MON
0.2 0.2
0.7 0.4
0.4 0.2
0.4 0.4
0.2 0.4
0.4 0.2
0.4 0.4
0.2 0.5
0.3 0.2
0.5 0.3
0.2 ONT
0.5 0.3
0.1 0.2
0.5 0.3
0.2 0.5
0.3 0.2
0.5 0.3
0A
0.5 0.4
0.1 0.4
0.5 0.1
0.4 0.5
RAC
0.4 0.1
0.5 0.4
0.2 0.5
0.4 0.2
0.5 0.5
0.2 0.3
1 0.5
0.2 1 0.3
0.5 0.2
0.3 0.6
0.2 1 0.2
RED
1 0.8
0.1 0.1
0.8 0.1
0.1 0.8
0.1 0.1
0.8 0.2
0.1 0.7
0.2 1 0.1
0.7 0.2
0.1 0.7
0.2 0.2
RIA
0.1 0.1
0.8 0.2
0.1 0.7
0.2 0.1
0.7 0.2
0.1 0.7
0.5 0.2
0.3 0.5
0.2 0.2
0.5 0.2
0.2 SBD
0.7 0.1
0.2 0.2
0.5 0.3
0.2 1 0.5
0.3 0.1
0.4 0.4
0.1 0.4
0.4 0.1
0.4 0.4
0.1 0.4
0.4 UPL
0.6 0.1
1 0.2
0.7 0.1
0.2 0.7
0.1 0.2
0.8 1 0.0
0.1 0.6
1 0.3
0.1 0.1
0.1 08
0.1 1 0.1
0.8 YUC
0.0 0.3
0.7 0.0
0.4 0.6
0.0 0.4
0.6 0.0
0.4 0.6
0.0 1 0.4
0.6 0.0
0.4 0.6
0.0 0.4
0.6 SBC
0.3 0.5
0.2 0.5
0.3 0.2
0.5 0.3
0.2 0.5
0.3 0.2
0.4 0.4
0.2 0.2
0.5 0.3
0.2 0.5
0.3 FCD
1 1
1 0
N/A
N/A
N/A
N/A
I N/A
N/A
N/A
N/A
N/A
N/A
N/A
I N/A
N/A
N/A
I N/A
N/A
N/A
I N/A
Source: San Bernardino
Countv Stormwater Program Annual Reports. Analvsis by
Beacon Economics.
Note: H = High Priority, M = Medium Priority, L= Low Priority facilities rt. 22
BEACON ECONOMICS
Table 14. Estimate of Additional Commercial Inspection Costs in San Bernardino County
High (Avg)
Med (Avg)
Low (Avg)
Total Facilities
2417
3501
4242
Current
Freq/year
1 0.5
0.0714286
New (TO)
Freq/year
1 0.5
0.2 Inspection
Cost
$0
$250
$250
Current Insp.
Cost
$0
$437,607
$75,742
New Insp.
Cost
$0
$437,607
$212,079
Added Cost
(Annual)
$0
$0
$136,336
Added Cost
(20-Yr) 1
$0
$0
$2,726,724
Source: San Bernardino County Stormwater Program Annual Reports. Analysis by Beacon Economics.
Restaurants However, the TO brings another substantial change to commercial facility inspections. Per the current permit, "restaurants are inspected at least once during the MS4 permit cycle,"13 as these establishments engage with fats, oil, and grease (FOG), pollutants that are the most impactful on receiving waters.
According to the TO, "the Permittees must inspect eating or drinking establishments annually or cause such inspections to occur on their behalf."1' The expansion of the definition of restaurants to "eating and drinking establishments" will generate substantial costs for businesses in the county.
There are currently 1,178 full -service restaurants, 1,847 limited -service restaurants and 93 drinking places in San Bernardino County, according to the latest (fourth quarter 2023) U.S.
Census Bureau data. Assuming these establishments are distributed evenly across the county, we scale the number of establishments based on relative population ratio to the portions of the county (agencies plus unincorporated portions of the county that are 13 https://www.waterboards.ca.gov/santaana/board_decisions/adopted_orders/orders/2010/10_033_rc_ms4_permit_01_ 29,Lp.pdf
14 / v�terl}c�rd 8#, /sC�ntaana/water_issues/programs/stormwater/docs/2024/tentative_ms4_permit_2- 2 l V t IVt
23 currently Permittees) to estimate the number of food and drink establishments within the Santa Ana River Watershed.
Figure 4. Food and Drink Establishments in San Bernardino County, Q1 1990 - Q4 2023 3500
3000
2500
2000
1500
1000
500
0 0 1-1 N M U1 l0 I- W O -4 N M U1 l0 I, W 0 .--1 N M ul l0 h W 0 .--I N M Q7 T Ql T T T T T 0 0 0 0 0 0 O 0 c-I r- r- .--I 1 i -i 1 rl N N N N N M 2 r1 NM d' r1 N M 2 ti N M d' � NM �' .-1 N M d c-I N M V 0 0 d c7 0 0 0 CI o c7 o Cl 0 0 0 cl 0 0 C cl o o c7 CI o c7 o o
25.00%
20.00%
1S.00%
10.00%
5.00%
0.00%
-S.00%
-10.00%
� Food & Drink Establishments - - Growth Rate (%) . • • . • • Linear (Growth Rate (%)) Source: U.S. Census Bureau. Analysis by Beacon Economics.
According to the 2020 decennial census, San Bernardino County has a population of 2,181,654. The 17 agencies (not including the Principal Permittee) of the county have a combined population of 1,596,228, representing approximately 73.17% of the county's total population. Based on this population ratio, we estimate there to be 2,282 food and drink establishments in San Bernardino that would be subject to the MS4 TO.
We assume for simplicity and consistency15 with previous parts of the report, that the number of restaurants does not grow (although historically, the number of food and drink establishments has grown at 0.6% per year) in the next 20 years.
Considering that an inspection costs $250 per visit in San Bernardino, and the current permit term has extended for 14 years, the additional annual cost of requiring annual inspections for food and drink establishments equals $529,726. The 20-year cost of 75 This is also reasonable, given that the newly added costs will likely hinder growth. 1-6
oit BEACON ECONOMICS 24
requiring annual inspections for food and drink establishments is approximately $10.6 million.
Table 15. Estimate of Additional Commercial Inspection Costs in San Bernardino ro,,snt+
Inspection Freq.
Annual Cost
Total Cost (20-Yr)
Added Costs
1x per permit term
$ 40,748.17
$ 814,963.34
1x per year
$ 570,474.34
$ 11,409,486.77
$ 10,594,523.43
Overall, adding the 20-year marginal cost of $2.7 million for higher frequency inspections of Low Priority commercial facilities (with the 20-year marginal cost of $10.6 million for higher frequency inspections for food and drink establishments), we arrive at a 20-year cost of $13.3 million for San Bernardino County.
This control measure would disproportionately impact disadvantaged and tourist communities within Permittee counties. Significant portions of San Bernardino County are classified as Disadvantaged Communities (DACs) or as Severely Disadvantaged Communities (SDACs) and may be adversely impacted by the increased regulations on restaurants. For example, the City of Big Bear Lake in San Bernardino County is primarily a tourist community, and restaurants make up a significant element of the local economy. Restaurants in the state already face financial burdens due to existing regulations and new higher minimum wages. The proposed classification of all food and drink establishments as High Priority will place an additional burden on the cities' economies.
CONSTRUCTION SITE INSPECTION COSTS
Currently, the construction site inspection frequency is as follows:
• For High Priority sites: eight times per year (once per month during the wet season) • For Medium Priority sites: twice per wet season
• For Low Priority sites: once per wet season
The TO specifies the same inspection frequencyfor Medium and Low Priority sites, however the inspection frequency for High Priority construction sites is reduced to four times per year (once every two months duringthe wet season).
This change should reduce the inspection costs faced by agencies. However, at the same time, there is a change in how priority levels are determined. /-4- 25
BEACON ECONOMICS
High Priority sites are currently defined as those disturbing 50 acres of soil and greater, Medium Priority sites are those disturbing between 20 and 50 acres, and Low Priority sites are those disturbing less than 20 acres.
With the TO, High Priority sites will include any construction site disturbing 20 acres of soil or more, Medium Priority sites are those disturbing between five and 20 acres, and Low Priority sites are those disturbing less than five acres.
These two changes (lower frequency inspections for High Priority sites and lower threshold acreage to be defined as High Priority) will have opposing effects on costs. We assume for simplicity that these roughly cancel each other out.
NEW DEVELOPMENT & SIGNIFICANT REDEVELOPMENT COSTS
The MS4 permit requirements are designed to reduce the discharge of pollutants from new developments and significant redevelopment projects. Permittees must use source control measures (e.g. street sweepers), structural control measures, and treatment control measures (e.g. bioswale) in their designs. These measures are designed to prevent or reduce the discharge of pollutants into the receiving waters.
ELIMINATION OF GREEN STREETS GUIDANCE
Although there are several changes in the TO that increase development costs, the highest potential cost impact on developers is likely to be the change to road requirements.
The proposed elimination of EPA Green Streets Guidance and, in turn, the inclusion of roadway projects as priority projects triggers the requirement to prepare a Water Quality Management Plan (WQMP) which could disproportionately affect roadway improvement projects in San Bernardino County. As most roadway projects in these regions are improvements to existing infrastructure, there is an inherent limitation on space available to incorporate additional water quality infrastructure.
In addition to the limitation on space, construction costs are currently high, which is generallytrue across the nation (see figures below), and the new requirements would place an additional cost on development and redevelopment projects. The new r-i- 26
ot BEACON ECONOMICS
requirements would likely delay construction, presenting additional opportunity costs that are difficult to quantify.
Figure 5b. Producer Price Index: Inputs to
Figure 5a. Average Weekly Wage Construction Industries: Net Inputs to Highways and in the United States Streets, Goods (Dec 2014 = 100), United States 1,500
1,400
1,300
1,200
1,100
1,000
900
150
140
130
120
110
100 V\
90 M d'
Ln
lD
r�
00 M
O
N
M
O
O
O
O
O
O
O
O
O
O
O
O O
M
lD
M
N
M
lD
M
rV
M
lD
M N
>
>
i
7 >
>
>
O
O
O fi
0 O
O
O
O
0 O
O
0 0
O
a'
Ln
lD
r-
r,
00 M
O
O
N
M M
Z Z
Z
Z
Z
Z
Z
Z
Z
Z
Z
,1
o
-
0 0
0 .1
0 0
0 N
0 N
0 N
0 N
0 N N
0 0
N
N
N
N
!V
N
N
N
fV
N
fV
N N
Source: U.S. Bureau of Labor Statistics, Average Weekly Earnings of All Employees, Construction [CEU2000000011], retrieved from FRED, Federal Reserve Bank of St. Louis; U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Inputs to Industries: Net Inputs to Highways and Streets, Goods [WPUIP23123111, retrieved from FRED, Federal Reserve Bank of St. Louis. Analysis by Beacon Economics.
CASE STUDY 116 As an example, a $4 million project in San Bernardino that would not have triggered a WQMP requirement under the current permit (due to the project not extending beyond 0.5 miles) may now require a WQMP with BMP costs of over $200,000, not including regular maintenance costs." This represents a 5% increase in construction costs.
However, this figure cannot be applied to all projects. Each project, depending on its dimensions, location, and surrounding infrastructure, has different inherent needs for water treatment. Currently, the permit requirements allow for projects to be evaluated on a case -by -case basis through feasibility studies. With the new TO, projects surpassing 5,000 square feet will all require a WQMP (and in turn, BMPs), regardless of the feasibility or specific conditions surroundingthe project. 16 Case studies are based on consultation with stormwater program expert within San Bernardino County. 17 P%sts are highly dependent on the type of project. Some projects require infiltration methods while others do not. BMP c4agast&tjieCt3K3Mr I fthod required for a particular project. 27 CASE STUDY 2 As another example, a development of 29 single homes spanning a Land area of 40 feet by 3,620 feet (where each parcel is 125 feet) would currently require no BMPs in San Bernardino. The same development under the new TO would require 29 BMPs. With a rough approximation of cost for a BMP at $20,000 to $30,000, which varies depending on the type of BMP implemented, this permitting change results in a cost increase of roughly $725,000, or $25,000 per home.
Again, this figure may be greater for other projects of the same size, depending on the location and other factors that may necessitate a different BMP for water treatment. It should be noted that if the land area of 40 feet by 3,620 feet was instead used for a single project, it would require four BMPs, both under the current permit as well as under the newly proposed permit.
Figure 6. Residential Construction in San Bernardino County over Time 160000
140000
120000
100000
80000
60000
40000
20000
0 Built Built Built Built Built Built Built Built Built Built 1939 or 1940 to 1960 to 1960 to 1970 to 1980 to 1990 to 2000 to 2010 to 2020 or earlier 1949 1969 1969 1979 1989 1999 2009 2019 later
■ Owner occupied ■ Renter occupied
Source: U.S. Census Annual Community Survey (ACS) 5-year estimates. Analysis by Beacon Economics.
For simplicity, assuming that single-family homes are all built in similarly sized lots, with similarly sized parcels, and the existing road and environmental conditions surrounding them are similar, we can extrapolate the figures from Case Study 2 to estimate that the overall increase in housing construction costs will be roughly $27.61 million in the county r4- 28
A BEACON ECONOMICS
per year. Over 20 years, this would add up to over $552.2 million in additional single family home construction costs.
Additional residential construction costs are especially problematic given the drop in construction overtime, as shown in Figure 6 above. With limited residential housing supply, house prices continue to rise in the county (see ;_figure 7).
Figure 7. Home Price Index in San Bernardino County: 1975 to 2023 400
350
300
250
200
150
100
50 0
Ln co - v r- o m �D M ru Ln oo T r` o rn
r� n 00 00 W m M M m O O O ti f 1 ,1 N N
Ol 01 Ol m al Ol Ql al Ol O O O O O O O O
N rV N rV rV rV " fV
Source: U.S. Federal Housing Finance Agency, All -Transactions House Price Index for San Bernardino County, CA [ATNHPIUS06065A], retrieved from FRED, Federal Reserve Bank of St. Louis. Analysis by Beacon Economics.
Moreover, since municipalities typically do projects on a larger scale, such as the installation of ADA ramps, this proposed change may adversely affect their ability to complete projects in a timely or cost-effective manner.
DEFINITION OF IMPERVIOUS SURFACE
Further, the new definition of "imperviousness" will trigger WQMPs for individual homes, trails projects, and other small projects.
The definition of Impervious Surface found in the glossary includes virtually any surface that is "cleared, graded, graveled, paved." This essentially requires any surface on a construction site to be considered impervious regardless of its future condition. Newly 29 BEACON ECONOMICS
developed parks, landscapes, and gardens that would be effective infiltration areas for years to come would be considered impervious, if during their construction the site is cleared or graded. This new definition thus unfairly increases the size of post -construction BMP treatment, impacting the space and funding available forthe development project.
The WQMP requirements could easily crush the economic vitality and available resources for these small projects.
CHANGES TO HYDROMODIFICATION CHANNEL EXEMPTIONS
Stormwater from urban areas can cause stream channel modifications, either through accelerated erosion or channel engineeringto prevent erosion. Mitigating for hydromodification can require the setting aside of land for large basins. Under the current permit, developers may be relieved from mitigation requirements, based on hydromodification susceptibility maps that have been submitted by the counties and incorporated into their guidance documents.
The proposed removal of this exemption poses an additional and entirely unnecessary cost to developers, in both the public and private sector, analogous to the additional development costs associated with the proposed removal of the Green Streets guidance.
OTHER CONCERNS AND COSTS
DRY WEATHER FLOWS
The TO establishes discharge prohibitions aimed at eliminating dry weather flows into the Santa Ana River. However, the San Bernardino Valley Municipal Water District (MWD) has already taken steps to eliminate dryweather flows in certain critical sub -watershed areas.
The San Bernardino MWD is leading a large-scale habitat conservation plan, including multiple tributary restoration projects along the Santa Ana River. The conservation plan redistributes water from the Riverside treatment plant to these tributaries.
Currently, these tributaries have flows and are crucial habitats for key aquatic species, some of which are federally threatened. These species include the western pond turtle, Santa Ana sucker, and Arroyo chub (pictured below). r4- 30
A BEACON ECONOMICS
Photo credit: Oregon Dept. of Fish & Wildlife; Santa Ana Watershed Project Authority; Zack Abbey A significant concern of the TO is the potential impact of the new prohibitions on the protection of these aquatic species, as the new MS4 requirements could conflict with the San Bernardino MWD's ongoing efforts. Because of the naturally occurring "background" bacterial levels in some stream channels, there could be an excess of numeric limits as set forth in the TO, even with the introduction of clean or recycled water.
Eliminating dry weather flows into some of these tributaries could negatively impact these species.
The current MS4 permit appears to prioritize recreational uses (Rec) over other beneficial uses in the basin plan, such as the protection of rare or spawning habitats. In a dry climate like ours, the treatment plants along the river have minimum discharge requirements to ensure sufficient waterfor aquatic wildlife. Therefore, if water is diverted from the river, there should be an equivalent amount of clean water returned to the Santa Ana River.
The San Bernardino MWD seeks a clear pathway for entities responsible for MS4 compliance to collaborate with those aimingto enhance native species habitats. As the TO stands, the MS4 Permittees will be hindered from supporting native species' habitat enhancement due to concerns about factors such as background bacteria that might jeopardize compliance.
To address this, the San Bernardino Valley MWD proposes compensatory reclaimed water discharges to maintain base flow in certain critical reaches. Essentially, the MWD proposes that captured water be treated and returned to the Santa Ana River to help maintain the habitats of native species. Additionally, restoring streams impacted by stormwater systems would be beneficial.
PUBLIC EDUCATION AND OUTREACH
Permittees must implement an effective public education and outreach program designed to raise awareness of pollution -prevention of BMPs by distributing educational material and motivatingthe public to implement BMPs resulting in reduction of pollutants in MS4 e4l. 31
BEACON ECONOMICS
discharges. Beacon Economics has not attempted to estimate the additional costs of public education and outreach programs that would be required to ensure compliance with the numeric limitations as set forth in the TO."
Part III. Impact on Disadvantaged and
Developing Communities
The financial impact of the TO on Permittee counties is not just a matter of compliance. It is a question of prioritizing resources in regions already struggling with substantial socioeconomic challenges. This reallocation could further strain efforts to uplift disadvantaged communities, creating a cycle of economic hardship that is difficult to break.
The proposed TO for stormwater management in the Santa Ana River Watershed presents challenges across the counties involved, particularly San Bernardino and Riverside. These counties, which already face substantial economic challenges, are expected to bear a disproportionate share of the financial burden compared to wealthier counties like Orange.
This section contextualizes these concerns by providing a comparative analysis of these three counties, focusing on their demographic profiles, disadvantaged communities, and the financial implications for city budgets.
'B In addition to the costs above, this report does not include cost estimations for: constraints to water quality credit tradFoig, additional staff training, integrated pest management, new program effectiveness, assessments, re-evaluation o0*W9(tnWgreb"M1@!5programs.
32 Figure 8. Poverty Rates by Age Group across Permittee Counties
25.0%
20.0%
15.0%
10.0%
5.0%
i
0.0%
Under 5 yo 5-17 yo 18-34 yo 35-64 yo 65+ yo Overall
a San Bernardino County Riverside County Orange County
Source: U.S. Census Annual Community Survey (ACS) 5-year estimates. Analysis by Beacon Economics.
Globally, there is a well -documented disparity between those who contribute most to environmental degradation and those who suffer the consequences.19 The financial burdens imposed by the TO —ranging from the development and maintenance of WMPs to increased industrial and commercial inspection costs —are likelyto disproportionately impact the counties of San Bernardino and Riverside. These counties, which house a significant proportion of disadvantaged communities, are less equipped than Orange County to comply with the TO without facing substantial economic disruption.
DEMOGRAPHIC AND SOCIOECONOMIC OVERVIEW
The three counties involved in the TO exhibit significant differences in their demographic compositions and socioeconomic conditions ( and ). These differences can, in turn, influence their capacity to manage the financial demands imposed by the TO. • SAN BERNARDINO COUNTY San Bernardino has a total population of 2.18 million. Of the three counties under discussion, it has the highest percentage of 19 Chancel, L., Bothe, P., & Voituriez, T. (2023). Climate inequality report 2023, Fair taxes fora sustainable future in the glgkwl South (Doctoral dissertation, World Inequality Lab (WIL)).
A BEACON ECONOMICS
33 residents living in disadvantaged communities (33%),20 with a large Hispanic population (55%) and significant economic challenges. The county's median household income is approximately $79,091-14% less than the state median — and 13.4% of the population lives belowthe poverty level. o The county ranks 291h out of 58 counties in the state on the Distressed Community Index, indicating a comfortable level (Economic Innovation Group EIG, 2023).2'
• RIVERSIDE COUNTY With a population of 2.43 million, Riverside County also has a significant Hispanic population (51%), and 15% of its residents are classified as living in disadvantaged communities. The median household income is below the state median, at $86,748, with 11 % of the population living below the poverty line.
o According to EIG, Riverside County ranks 21st out of 58 counties in California, indicating a comfortable level (Economic Innovation Group EIG, 2023).
ORANGE COUNTY Orange County is the largest of the three counties, with a population of 3.2 million. Atotal of 15% of its population is classified as living in disadvantaged communities, and 10% of residents live below the poverty line. The county boasts a median household income of $106,209, which is 16% higher than the state median. Its racial composition is more diverse, featuring a lower percentage of Hispanic residents compared to the other counties (34%), and a higher percentage of Asian residents (22%).
o Classified by EIG as prosperous, ranking 101h out of 58 counties in California (Economic Innovation Group EIG, 2023).
20 DAC population percentages are based on data from CalEnviroScreen 4.0, developed by the California Office of Enripnmental Health Hazard Assessment (OEHHA). For more information, see the CalEnviroScreen 4.0 report:
ht // l re /c l vir cr n-40.
2#Mqthyj%Upnoio, under DAC, it was considered the proximate location of each Census Tract. For more information, see the Distressed Communities Index by the Economic Innovation Group: https://eia.ora/distressed- communities/?regions%5B0%5D=06065®ions%5B1 %5D=06025&geo=counties&tat=33.35&ton=-116.06&z=8.01. 9 Table 16. Demographic and Socioeconomic Characteristics Across Counties, 2022 Percent
Black or Total
below
Population Hispanic African Asian poverty Population
American in DAC
level
Orange County 3,175,227.00 34% 2% 22% 100/0 15%
San Bernardino
County 2,180,563.00 55% 7% 8% 13% 33%
Riverside County 2,429,4187.00 51 % 6% 7% 1 1 % 15%
Source: U.S. Census Bureau, American Community Survey 2022.
Figure 9. Annual Median Household Income by County, 2022 v $120,000.00
c E
`B o
u
$100,000.00
- o
M L
N $80,000.00
C 7
Q =
$60,000.00
$40,000.00
$20,000.00
$
Orange County
San Bernardino
Riverside County
County
■ Median Household Income
$106,209.00
$79,091.00
$86,748.00
— California Median Household Income
$91,551.00
$91,551.00
$91,551.00
Median Household Income
Index(California = 100)
116%
86%
95%
Source: U.S. Census Bureau, American Community Survey 2022. Analysis by Beacon Economics. f4. 35
BEACON ECONOMICS
DISADVANTAGED COMMUNITIES
To effectively classify disadvantaged communities, the CalEnviroScreen score22 incorporates a broad spectrum of environmental, health, and socioeconomic data to generate scores for every census tract in California. This rigorous method identifies areas where residents are most burdened by pollution and socialvulnerability.
San Bernardino County stands out for having a significantly higher percentage of its population living in DACs, as compared to Orange County. Figure 10 illustrates this contrast: 33% of San Bernardino's population resides in DACs, compared with 15% in Riverside and Orange Counties.
This demographic reality positions San Bernardino and Riverside counties in a more precarious situation. The counties' budgets, which might otherwise be directed towards fostering economic growth and improving living conditions in these vulnerable areas, will need to be reallocated to meet the TO's stringent requirements.
Figure 1�. r-upu atlon in Disadvalq�abeQ3uYiY i19 kO�Vd i lsy"S.�itl hits 800,000 40%
N
O
�
Q
C�
E
E 600,000
30%
0 U
0 0-
0 400,000
20%
o
�
v
Q
C
O1
�
U
0 200,000
10%
L
v
o
n.
n.
0 0
0%
San Bernardino Orange
Riverside
■ Population in DAC ®% of Total Population living in DAC Source: U.S. Census Bureau, American Community Survey 2022; CalEnviroScreen 4.0: California Communities Environmental Health Screening Tool. Analysis by Beacon Economics. 22 CalEnviroScreen 4.0 score is developed bythe California Office of Environmental Health Hazard Assessment (OEHHA). 4 Fo?wore information, see the CalEnviroScreen 4.0 report: https7//oehha.ca.gov/catenviroscreen/report/calenviroscreen- At BEACON ECONOMICS
36 The demographic and socioeconomic landscape of these counties is diverse and complex.
Within San Bernardino, Riverside, and Orange counties, the population distribution differs widely in terms of racial composition, income levels, and residents in distressed communities. These factors play a crucial role in shaping how each city within these counties will experience the impacts of the TO.
To fully understand the extent of these impacts, it is essential to delve into the agency -level analysis, where the nuances of each community's economic and social structure become clear. The following sections will explore how these differences influence the capacity of individual cities to absorb the financial burdens imposed by the TO, highlighting the unique challenges faced by the most vulnerable populations in each region.
San Bernardino County is in the least favorable position among the three counties impacted by the TO for stormwater management. The cities within the county that shoulder the largest share of TO costs —such as San Bernardino, Fontana, and Ontario — not only face significant financial burdens but are also characterized by high levels of poverty and large populations living in DACs (Table ).
CITIES BEARING THE HIGHEST COSTS
• San Bernardino (11%): As the largest city in the county, San Bernardino bears the highest share of TO costs. This city also faces notable socioeconomic challenges, with 18% of its population living below the poverty line, well above the state average of 12.20%. Additionally, 67% of its population is classified as living in DACs, reflecting the significant economic and infrastructural pressures on the city and its population. San Bernardino and Rialto have a notably larger share of Black or African American residents (12%) compared to other cities in the county. • Fontana (10%): Fontana follows closely, contributing 10% to TO costs. The city has a predominantly Hispanic population (73%) and 60% of its population is considered DAC. This high percentage indicates that a substantial portion of Fontana's population is economically vulnerable, despite its lower poverty rate. • Ontario (9%): This city also contributes significantly to the TO costs. Ontario, with 13% of its population below the poverty line and 71 % classified as DAC, faces substantial challenges similar to San Bernardino and Fontana. 37 BEACON ECONOMICS
POVERTY AND DISADVANTAGED COMMUNITIES
• High Poverty Rates: Nine agencies in the county have poverty rates above the state average of 12%. Six of these are within the Santa Ana region. These include San Bernardino (18%), Ontario (13%), Rialto (15%), Montclair (10%), Highland (16%) and Colton (15%).
o These cities are also among those contributing substantial shares to the TO costs, indicating that economic vulnerability is widespread in areas that are also financially burdened by the TO requirements.
• High DAC Populations: Cities with a significant proportion of their population classified as DAC include Rialto (78%), Ontario (71%), San Bernardino (67%), Montclair (67%), Colton (60%) and Fontana (60%).
The high DAC percentages in these cities suggest that a large segment of their populations is economically and socially disadvantaged, making the financial burden of the TO particularly harsh.
The analysis of cities within San Bernardino, Riverside, and Orange counties reveals a complex and varied landscape where economic and social vulnerabilities intersect with the financial demands of the TO. Each agency faces unique challenges, from high poverty rates and large DAC populations, to racial and ethnic disparities. These factors underscore the profound impact that the TO will have on city agencies that are already struggling with significant economic hardships.
The requirements of the TO will not only place additional pressure on city fiscal budgets but will also affect household incomes and local industries. As cities work to comply with the TO, the financial burden may result in reduced public services, increased taxes, or other measures that could further strain the local economy. /-4, 38
0 BEACON ECONOMICS
Table 17. Distribution of Tentative Order Costs and Socioeconomic Demographics across San Bernardino County Agencies
nignear Marx
Cl-inc
Chine Hills
Coltan
Fontana
Granc1 Terrace,
Highland
Loma Linda
Montrtair
Ontario
Rancho Gucarrbnga
Remands
Rialto
San Bernardino
Upland
Yucaipa
"shirt �f
3ount,/TO
'05ts
aOplAction
1.6%
5,0S9
5.D%
91,C08
5.2%
78,223
3.5%
53,959
2M279
1.7%
13,104
3.6%
-%, 789
2.3%
24,583
2.5%
37,842
176XS
174, &%
5.1%
73,234
5.3%
103,873
11 '_
221,041
4.2%
78,947
4.2%
54,428
Black sr
Africa,i
Hispanic Anieri.an Asiar,
30%
0%
54%
8%
21.%
4%
73%
9%
fag% I
8%
51% .;
4%
59% :
7'%
28%
6%
71% .1
5%
70%
5%
40% J
9%
3.6% J
b%
75% .IF --I
12%
67% ll
12%
44%
6%
34%
1%
Belowr _
Pavertly Population
Levcl inDAC
3%
18%
40%
2%
7%
4%
8%
25%
10%
7`+
14% I
6%
2%
4%
10%
4%
14%
12% 18%
6%
15% 9 60%
9% tl , 27%
7% rT 26%
16% 4D'%
13% 20r%
15%67%
13% 197 71%
15% 78%
16%— 67%
SG%
San Bernardino County 13.5% 2,190,563 55% 7% 8% 13% 33% Rivef side Couwy 2,429,487 51% 6% 7% 11% 15%
Orant,v County 3,175, 2-7 34% 21% 22% 10% 15%
Source: U.S. Census Bureau, American Community Survey 2022. Analysis by Beacon Economics. r4- 39
A BEACON ECONOMICS
Table 18. Distribution of Tentative Order Costs and Socioeconomic Demographics across San Bernardino County Agencies
Median Household
Inc:ome
Median Household
Ircorne (Ca rfornia -
100)
Big Bear Lake
$
70,020
75%
Chino
$
95,721
105%
Chino Hills
$
105,978
115%
Cotton
$
66,725
73%
Fontana
$
93,581
102%
Grand Terrace
$
89,791
96%
Highland
$
72,222
79%
Lonw Undo
Montclair
$
72,769
80%
Ontario
$
79,7M
lib%
RanchoCucamoiga
$
108,345
11B%
Redlands
$
92,797
101%
Matto
$
85,585
93%
San Bernardi no
$
62,801
69%
Upland
$
97,838
107%
Yucaipa
$
95,075
93%
San Bernardino County $ 79,091 BS%
Riverside County $ 86,748 95%
Orange County $ 106,209 115%
Source: U.S. Census Bureau, American Community Survey 2022. Analysis by Beacon Economics.
The next section will explore the financial implications of the TO on each city's general fund budget, analyzing how much each city and agency is expected to pay and what these costs represent as a percentage of their general fund budget. This analysis will provide a clearer understanding of the economic pressures facing these communities and the potential ripple effects on both municipal operations and the local economy. By understanding the full scope of these financial demands, we can better assess the sustainability of these requirements and their long-term impacts on the fiscal health of the affected cities.23 23 For this analysis, the General Fund Budget is primarily considered. The funding sources for individual permittees in San Be�wrdino County include a mix of General Funds, which most agencies heavily rely on, alongside Specialized Funds 4=41
wer, annd�St�o-rm Drain Funds), Inspection and Permit Fees, Dev)lopmentt Fees, and Special ht ra a ement Fees and Business License Renewal Fees). Some agencies also rel on Property Taxes, Rents, Royalties, and other specific fees like Water Quality Management Plan (WQMP) Check Fees. This diversity reflects the varied financial strategies employed by each city or district to support their stormwater management and related environmental programs.
.N
Part III. Implicit Costs
As the demographic analysis points out, the cities most impacted by the TO are those already facing socioeconomic challenges. The financial demands of the TO will exacerbate existing fiscal pressures on city budgets and will also ripple through local economies.
Compliance with the TO could force cities to make difficult choices, such as reducing public services, increasing taxes, or diverting funds from critical economic development initiatives. These measures, while necessary for compliance, risk deepening the economic strain on the most vulnerable populations, potentially leadingto a cycle of hardship that further undermines long-term growth and stability.
CAPITAL COSTS RELATIVE TO GENERAL FUNDS
The capital costs required to complywith the TO present a challenge for several cities within San Bernardino County, especially when these costs are considered relative to each city's general fund budgets (:,s bhe % '').
• Several agencies would face great financial strain, with capital costs vastly exceeding their general funds. Grand Terrace and Highland are under immense pressure, with their capital costs exceeding 1,100% of each of their general funds — equivalent to nearly eleven years' worth of each city's entire budget. • Other agencies, including Colton, San Bernardino, and Montclair, are similarly burdened, with capital costs ranging above 350% of their general funds. These cities, which are alreadyfacing economic hardship, such as DAC populations and high poverty rates, may find it difficult to absorb these costs without compromising their abilityto fund essential services and infrastructure projects. • With capital costs alone consuming multiple years' worth of general funds, these cities may have to divert funds from other critical areas, potentially exacerbating existing socioeconomic disparities.
r4. 41
ov BEACON ECONOMICS
O&M COSTS RELATIVE TO GENERAL FUNDS
The ongoing O&M costs present another layer of financial strain on cities within San Bernardino County. These costs are particularly concerning as they represent a significant portion of each city's general funds, leaving little room for other essential expenditures. • Ongoing O&M costs under the TO represent a significant financial burden, especially for cities like Yucaipa and Highland, where these costs account for 20% of the city's general funds. This percentage indicates that the agencies may struggle to maintain other essential services.
• Grand Terrace faces even more substantial O&M costs, consuming about 28% of its general funds. These considerable expenses could force the city to reallocate funds from other critical areas, further straining an already tight budget and potentially compromising essential services.
OPPORTUNITY COSTS
The financial demands of the TO extend beyond direct costs; they also represent significant opportunity costs forthe affected cities. Funds that could have been allocated to critical public works projects, economic development initiatives, or community services will instead be directed towards meeting the TO's requirements.
We estimate the burden of capital costs and O&M for WMP development:
• Public Works: Public works expenditures are crucial for maintaining infrastructure, ensuring public safety, and fostering community growth in many cities. In the City of San Bernardino, where capital costs exceed 350% of the annual budget, the 0&M costs forjust one year represent 34% of the general fund budget allocated to public works. Similarly, in Colton, the O&M costs for one year are equivalent to 89% of the total annual public works budget.za
o These high opportunity costs suggest that cities maybe forced to delay or cancel essential public works projects, compromising infrastructure 24 Source: Colton Financial Report. General Fund Expenditures Budget, FY 2024-25.
ONBEACON ECONOMICS 42
maintenance and public safety. Other agencies will likely face similar challenges, requiring a reassessment of budget priorities and potentially diverting funds from critical infrastructure improvements to cover TO -related expenses.
• Economic Development: The diversion of funds to cover TO compliance may also impact cities' ability to invest in economic development. In Montclair, for example, the need for funds to cover yea rly O&M costs could be significant, with the required amount being equivalent to over 8% of the city's generaIf unds. This potential strain on the city's budget could limit its ability to attract new businesses, improve local infrastructure, and support job creation initiatives, especiallycon side ring that 67% of the population lives in distressed communities and 15% lives in poverty. This could have long-term consequences forthe city's economic health and its abilityto improve living standards for its residents.
Table 19. Proposed Capital and 0&M Expenditures Relative to 2024 San Bernardino City General Fund Expenditures
Share ($, M) $792
Expenditures
2024 - 25
TO Median Cost
............................................. .................. ..................... .............................................. ..................._.......................
Budget ($, M)
........................................
Budget .
_...................................................................
Capital
Police
$105.7 M
47.7%
750%
Public Works
$41.4 M
18.7%
1912%
General Government
$21.6 M
9.8%
3667%
Community Development &
Housing
$14.5 M
6.6%
5457%
Capital Improvement Projects
$0.0 M
0.0%
Finance & Management Services
$7.2 M
3.3%
10924%
Parks Recreation & Community
$6.4 M
2.9%
12400%
Legal Services
$5.2 M
2.3%
15280%
Library
$5.8 M
2.6%
13710%
City Manager
$5.3 M
2.4%
15068%
Human Resource & Risk
Management
$2.8 M
1.3%
28052%
City Clerk
$2.1 M
0.9%
38513%
City Council
$1.2 M
0.6%
64249%
Economic Development
$1.8 M
0.8%
43677%
Mayor
$0.3 M
0.2%
236757%
Total
$221.3 M
100%
358%
Source: San Bernardino City 2024 Budget. Analysis by Beacon Economics. $14 $173
Capital/5
O&M-1
+ 1-Yr
year
0&M
13%
156%
34%
392%
66%
732%
98% 1089%
196% 2144%
222% 2588%
274% 3117%
246% 3118%
270% 3009%
503% 5569%
691% 9151%
1152% 13475%
783% 8497%
4246% 49154%
6% 74%
A BEACON ECONOMICS
43 To illustrate the tradeoffs that need to be considered by agencies, we consider the example of the City of San Bernardino. For every $1 that is spent on compliance with the new MS4 regulations, San Bernardino either must increase taxes by a dollar, give up spending on other public services by a dollar, or choose a combination of higher taxes and less spending on other public projects.
Based on the city's cost share of 10.53%, the new permitting requirements correspond to capital and one-year O&M costs (for WMP development and management) of $173 million per year.25 The table below illustrates the relative size of the city's annual cost obligation for WMP development and management, based on their 2024 general fund expenditures.zs Table 20. Distribution of Tentative Order Costs for San Bernardino County, Sorted by Largest Impact Relative to Agency General Fund Budget
Cost
Share
%
Capital
($M)
1-Yr
O&M
($M)
20-Yr
0&M
($M)
General
Fund
($M)
Share of General Fund Budget
Capital
1-Yr
0&M
Capital/5+i-
Yr 0&M
Estimated Median Cost (WMP)
$7,522
$135
$2,698
Grand Terrace
1.66%
$125
$2
$45
$7.86
1588.5%
28.5%
346.2%
Highland
3.63%
$273
$5
$98
$23.85
1144.9%
20.5%
249.5%
Yucaipa
4.19%
$315
$6
$113
$28.81
1093.9%
19.6%
238.4%
Chino Hills
5.23%
$393
$7
$141
$55.27
711.8%
12.8%
155.1%
Loma Linda
2.31%
$174
$3
$62
$26.71
650.4%
11.7%
141.7%
Rancho Cucamonga
8.37%
$630
$11
$226
$117.83
534.3%
9.6%
116.4%
County of San
Bernardino
13.51%
$1,016
$18
$364
$193.00
526.5%
9.4%
114.7%
Upland
4.15%
$312
$6
$112
$61.30
509.2%
9.1%
1 111.0%
Big Bear Lake
1.63%
$123
$2
$44
$24.26
505.5%
9.1%
110.2%
Fontana
9.51%
$715
$13
$257
$149.08
479.8%
8.6%
104.6%
Montclair
2.45%
$184
$3
$66
$39.36
468.2%
8.4%
102.0%
Colton
3.45%
$259
$5
$93
$65.94
393.5%
7.1%
85.8%
San Bernardino
10.53%
$792
$14
$284
$224.81
352.3%
6.3%
76.8%
Chino
4.95%
$372
$7
$134
$112.30
331.5%
5.9%
72.3%
Redlands
5.10%
$384
$7
$138
$115.73
331.5%
5.9%
72.2%
Rialto
5.34%
$402
$7
$144
$129.29
310.7%
5.6%
67.7%
Ontario
9.00%
$677
$12
$243
$428.87
157.8%
2.8%
34.4%
SB County Flood
1 5.00%
1 $376
1 $7
$135
-
-
Average
6%
$418
$7
$150
$106.13
594%
11%
129%
Median
5%
$374
$7
$134
1 $65.94
5050%
9%
1100%
'Note: General Funds: Total General Fund Budgets for the last year available (2023 or 2024). For Grand Terrace, last year available is 2021; Ratio: Capital: Estimated Capital Cost/ General Fund Budget; Ratio: 1-Yr O&M: One year estimated O&M costs / General Fund Budget. Source: San Bernardino FY 2024 - 2025 budget and cost -sharing allocation; City Financial Reports. Analysis by Beacon Economics.
2e Assuming capital costs for WMP development are spread out over 5 years. zs �i of San Bernardino's generalfund is used here to illustrate the relative size of TO -induced spending. ov BEACON ECONOMICS
The significant budget required to comply with the TO highlights the need for San Bernardino County to explore alternative funding sources beyond the general fund. While Measure W21 in Los Angeles County serves as an effective model of dedicated funding for water quality and infrastructure projects, these counties must consider pursuing similar initiatives or securing additional state and federal grants tailored to their specific needs to bridge the substantial funding gap.
However, it is relevant that any newfunding mechanisms are designed to avoid imposing an undue burden on already economically vulnera We communities. As discussed throughoutthis analysis, many cities within these counties are alreadyfacing challenges.
Implementing regressive funding strategies could exacerbate these challenges, particularly in areas with high DAC populations and existing socioeconomic disparities. "Measure W collects funds through a property tax of 2.5 cents per square foot of impermeable surface area, such as driiy4Lways and rooftops, on properties in Los Angeles County. This tax is specifically designed to address stormwater rut),ir�e�ance�il�orojects that enhance water quality, increase water supply, and support r i e '{� s ai a i i c s t e county.
For more detailed information, you can visit Measure W: The Safe. Clean Water Program. 45 Conclusion
The proposed TO carries significant costs —both explicit and implicit —on the 17 agencies in San Bernardino County (excludingthe Flood Control District). These costs stem from three key factors: (1) a proposed overhaul of the existing BMP approach to stormwater management in favor of an approach based on numeric limitations, (2) an increase in industrial and commercial inspections, and (3) changes in development and significant redevelopment requirements that will now more easily, and often unreasonably, trigger a WQMP.
Beacon Economics estimates the annual costs for the county will be over half a billion dollars, which equates to nearly $10.8 billion over the next 20 years. Spending of this size will be cost -prohibitive for agencies, which is directly against the expectations outlined in the California State Auditor's Report on State and Regional Water Board s:21 "We would expect that in developing pollutant control plans, regional boards would adequately consider the costs local jurisdictions would incur to comply with the pollutant control plans and would determine the overall cost of storm water management to those jurisdictions so as to make sure that such costs are not prohibitive."
Based on Beacon Economics' analysis, these increased costs will disproportionately impact San Bernardino County's disadvantaged communities, forcing them to choose between important public programs —police, fire service, public works, economic development —and complyingwith the new requirements.
As Los Angeles has had to do through Measure W, San Bernardino Countywill likely need to implement a new tax based on the square footage of property, which being a somewhat regressive tax will continue to pose disproportionately high financial burdens on the most disadvantaged communities.
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About Beacon Economics
Founded in 2006, Beacon Economics, an LLC and certified Small Business Enterprise with the state of California, is an independent research and consultingfirm dedicated to delivering accurate, insightful, and objectively based economic analysis. Employing unique proprietary models, vast databases, and sophisticated data processing, the company's specialized practice areas include sustainable growth and development, real estate market analysis, economic forecasting, industry analysis, economic policy analysis, and economic impact studies. Beacon Economics equips its clients with the data and analysis they need to understand the significance of on -the -ground realities and to make informed business and policy decisions.
Learn more at beaconecon.com
Project Team
Christopher Thornberg PhD. Founding Partner (Project Advisor) Niree Kodaverdian PhD. Research Manager
Miriam Valdes PhD. Research Manager
For further information about this report or to learn more about Beacon Economics please contact:
Sherif Hanna, Managing Partner sherifPbeaconecon.com
Victoria Bond, Director of Marketing and Communications. victoria(abeaconecon.com Beacon Economics LLC shall remain the exclusive owner of any Proprietary Information and all patent, copyright, trade secret, trademark, domain name and other intellectual property contained herein. t--6 47
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Proposed MS4 Permit
Impact
I• •• • Harms Disadvantaged Communities
�••�': �� • Nine cities in San Bernardino County have poverty rates exceeding the state average � • The financial burdens of the permit compliance will exacerbate existing fiscal pressures on City and County budgets and will have severe repercussions on local economies • Cities will face intense financial strain, with capital costs exceeding 350% to 1,100% of their annual budgets, resulting in reduced public services.
%• Worsens Housing Crisis
• The lack of affordable housing drives California's high poverty rate, the highest in the nation. • Construction costs for a single-family home in San Bernardino County could rise by $25,000 per home as the permit will trigger new Water Quality Management Plans for development. • Under these rules, the cost of a 29-home development will rise an estimated $725,000. • Housing construction costs in the County may rise an estimated $27.61 million annually if these revisions are approved.
Obstructs New Roads, Infrastructure
p` The proposed permit will require road and infrastructure projects to have a Water Quality Management Plan, raising costs by 5% or 30%, or more, and increasing maintenance costs. • Commercial inspection costs in San Bernardino could rise a projected $13.3 million in 20 years due to more frequent inspections.
• Limited space and high construction costs make it difficult to add required new water quality infrastructure to existing roadway projects. New requirements will further increase right-of- way costs and delay construction.
Continued dialogue between the Board, impacted Counties and Permittee cities is needed to refine the Permit requirements to provide meaningful water quality benefits without harming disadvantaged communities or impeding new housing and infrastructure improvements.