Hayward vs. Hill, et al., Round 2

The head of the San Luis Obispo Air Pollution Control District, Larry Allen, has joined Adam Hill in complaining about my Forbes.com article.  Here’s his complete letter, followed by my reply:

Mr. Hayward – you ought to check the accuracy and credibility of your information source(s) before you publish an article in a national magazine. Absolutely none of the information you’ve published here in this opinion/attack piece regarding me and the San Luis Obispo (SLO) County Air Pollution Control District is correct.

Contrary to your claims, local air quality would not be nearly as good as it is today without the efforts of our agency and our many partnerships with local business to help achieve and preserve clean air. We do and have implemented many successful programs that have significantly reduced emissions from local sources that are not directly regulated by the state and federal EPA. The residential wood combustion rule you mention was adopted in 1993 to ensure clean burning woodstoves are installed in new homes to reduce exposure inside and outside the home to toxic air contaminants from inefficient woodburning units. It was just one of numerous other measures that were developed and implemented as part of a very effective clean air plan that achieved significant local emission reductions with broad input and support from the business and community interests. Our plan was used as a model by the California Air Resources Board for other air districts to follow, and implementing that plan resulted in SLO County attaining the state ozone standard. I am proud of that.

Regarding your statements on our budget and salaries, I am paid a $153,096 annual salary, not $250,000 as you claim. Of 23.5 total staff, only 4 others, our Division Managers, earn a 6-figure salary – $105,310 per year to be precise. You might also be interested to know that our staff size has not increased since 1993, a claim very few other government agencies could make. Our agency is extremely lean and streamlined in its operations. Our long-term fiscal plan, adopted by our 12-member Board of elected city and county officials, anticipated the closure and loss of revenue from the power plant several years ago and implemented numerous cost cutting measures to build reserves to cover that loss when it occurs. All of this information is included on the Air District’s website, an information source you must have not considered in advance of submitting your attack piece.

Contrary to your statements, only 50% of our budget comes from permit and inspection fees, which are set by our Board in a public hearing, not by staff; less than 1% of our budget comes from fines. The other 50% of our budget does come from state and federal appropriations, motor vehicle registration fees and local property taxes. Regarding the alleged $13,000 fee to the university to inspect and permit a tractor: I have no idea where you got such a notion. We do not require permits for tractors, but we do provide grants for farmers to repower or replace their tractors to help them comply with state regulations – I’m guessing that’s what you must be referring to, with the notable correction that we are giving them money, not charging them fees. We typically provide over $1 million per year in grant funds to local business and other organizations to help them comply with state air quality regulations.

I’m sure you achieved your clear goal of inciting public outrage about government excess.  Unfortunately, that outrage is based on entirely false information presented in your hit piece. I would hope that a national magazine like Forbes would hold its writers to higher standards than you’ve clearly been held to, and I will be writing the Forbes editors to ask for a formal retraction and apology to be published by them.

And my reply, transmitted this morning:

Mr. Allen is correct that I have misstated his base salary.  He and other public servants like him might help their case, however, if they did not deliberately render their complete compensation in opaque terms that seem designed for obfuscation rather than transparency.  The 2012 salary information for the APCD (p. 41 of the budget document) sets Mr. Allen’s direct salary at $153,202, but then adds two curious lines: “Fixed costs: $12,082; Variable costs: $70,919; Total: $236,021.”  (The 2011 total figure was $240,119.)  There is no explanation or breakdown of either of these categories: how much of these figures are standard benefits (health insurance, etc.), and how much are other items that deserve to be considered compensation, such as pension contributions or especially cashable accrued vacation and sick days or per diems (the favorite trick of the state legislature)?  And why is this table omitted from the current year budget document entirely, with no total annual compensation figure listed anywhere?  I think I know why.  (The 2011 salary schedule puts Mr. Allen’s “variable costs” of salary at $82,000.)  The public ought at least to know what the commensurate figure for “variable costs” of Mr. Allen’s salary is this year.

This opacity contrasts starkly with the way total compensation is reported for senior executives at public corporations, where direct salary, annual bonuses, stock options, and contingent buyout obligations are clearly stated and explained.  If Mr. Allen wishes to be more transparent, he should restore that omitted table to the current budget, and offer more details about those mystery numbers.  (I was, incidentally, the public interest representative on the California Citizens Compensation Commission in the early 1990s, so I’ve seen this circus before.)

But Mr. Allen’s salary is entirely ancillary to the main points, about which he disputes two.  Mr. Allen says “Contrary to your claims, local air quality would not be nearly as good as it is today without the efforts of our agency and our many partnerships with local business to help achieve and preserve clean air.”  Leaving aside how many businesses in the county truly regard the APCD as their “partners,” I categorically dispute Mr. Allen’s triumphalism about the role of his agency in the air trends in the county.  A close consideration of the data will show an insignificant difference in air quality trends between San Luis Obispo and counties that do not have special purpose air districts like the APCD.  I suspect that Mr. Allen and his staff are unaware of these data.

Second, Mr. Allen contests my criticism of the APCD deriving its revenue from self-determined fees and fines: “Contrary to your statements, only 50% of our budget comes from permit and inspection fees, which are set by our Board in a public hearing, not by staff.”  I wonder, then, why the budget page of the APCD website reads as follows: “Most of our funding comes from fees paid by businesses and industries that cause air pollution,” and goes on to say that other funding sources are “minor.”  So Mr. Allen disagrees with his own website?  Perhaps he will see to changing this soon.  But again this misses the point: whether the amount of revenue from permit fees is 25 percent or 75 percent, the correct amount should be: zero.  Or at the very least the revenue should flow to the county’s general fund, where its use would be balanced alongside the full range of public interests.

This gets precisely the heart of the problem.  Mr. Allen repairs behind a convenient fiction that the board, not directly accountable to the people, is something more than a rubber stamp for these semi-autonomous, staff-run single purpose agencies, which have, please note, greater autonomy than the federal EPA.  (Incidentally, proposals over the years in the state legislature to have local air boards directly elected have been stoutly opposed by air districts.  Curious, that.)  There is extensive academic literature, again likely unknown to Mr. Allen and his staff, about how single-purpose agencies like the APCD become increasingly zealous over time, and indifferent to wider balancing of public interests.  This is why I conclude that the APCD as a standalone agency should be abolished, and its legitimate enforcement functions (enforcing conformity for equipment like diesel generators, for example) transferred to the county’s general planning department, where both decisions and oversight are by their nature required to balance competing interests in a way that the APCD does not.  This is just a sound principle of public administration, which has been endlessly trampled by modern trends in administrative governance.

At the back of all of this is the fact that our air quality statutes, both state and federal, are antiquated and badly in need of reform.  We’re not living in the 1970s anymore.  To be sure, it isn’t Mr. Allen’s fault that his single-purpose agency is an obsolete model, prone to the usual mission-creep incentives of bureaucracies everywhere to metastasize.  But neither does he have any incentive to be a reformer.  Quite the opposite.  (It’s a separate issue for another time, but the infamous AB32 should be called the “Keep CARB and Local Air Districts in Business Forever Act.”)

All of the forgoing propositions require considerable evidence and debate to substantiate, which is why I’m working on a book about the subject.  But perhaps Mr. Allen will agree to a formal public debate with me about all of these issues after I return to the county later this summer?  A public servant ought to be willing to offer a vigorous defense for matters of protracted controversy like this.  I’m sure Cal Poly or some other civic organization would be willing to host such a public forum.  Let me know.

I’ll let you know if he accepts.  Maybe we could make it a marquee event at the oft-promised Power Line Wine Weekend on the central coast.