Consolidate Field Offices of the Texas Water Commission and the Texas Air Control Board

The state can save funds by consolidating the field offices of the Texas Water Commission and the Texas Air Control Board under the Texas Natural Resource Conservation Commission.


Background
The passage of Senate Bill 2 during the summer of 1991 set in motion a series of organizational changes that will ultimately result in a new comprehensive environmental agency, the Texas Natural Resource Conservation Commission (TNRCC).

For the most part, TNRCC will be the result of a merger of responsibilities and resources of the Texas Water Commission (TWC) and the Texas Air Control Board (TACB) on September 1, 1993.

TWC has taken over the licensing and regulatory functions of the Texas Water Well Drillers, Texas Irrigators and major regulatory duties of the Texas Department of Health in the areas of solid and hazardous waste. TWC has a wide range of environmental duti es including: water quality monitoring; the prevention, control and abatement of water pollution; regulation of petroleum storage tanks and a wide variety of other related programs.

TACB sets standards for air quality, regulates activities and enforces air quality standards in Texas. TACB s regulatory activities are derived from the Federal Clean Air Act (FCAA), amendments to the FCAA and the Texas Clean Air Act.

Both TWC and TACB maintain extensive field operations throughout the state. Currently, TWC has 14 field offices and TACB has 12. The agencies have agreed on a 15-region configuration, which complies with the Uniform State Service Regions as required by Art icle V, Section 120 of the General Appropriatio ns Act. The new 15-region configuration will require that TWC move staff from the Lubbock and San Angelo offices to establish a new office in Abilene. TACB currently has an office in Abilene. TACB currently does not have offices in three of the 15 new serv ice regions (Amarillo, San Angelo and Austin). TWC has offices in these cities. TACB plans to establish a field office in Austin, but only provide an investigator at the Amarillo and San Angelo TWC offices.

The Texas Performance Review examined current fi eld office situations to identify potential savings to the state of Texas as a result of the consolidation of these field offices. Typically, savings are achieved through consolidation when total lease space can be reduced through shared support facilitie s or common areas, such as break rooms, rest rooms or lobbies. The state has general square footage standards for state facilities, which keep overall space utilization at an appropriate level. State law has mandated that TWC and TACB field offices must be merged by September 1, 1996. Because field office lease expiration dates may be staggered and to facilitate operations after the official agency merger on September 1, 1993, these agencies are beginning the consolidation now.


Recommendations
A. The Texas Natural Resource Conservation Commission (TNRCC) field offices should realize a lease cost savings as a result of sharing support facilities (common areas), reducing telephone service charges and following employee square footage standards of the General Services Commission. Appropriations should be reduced accordingly.

Interviews with TWC and TACE management in small and large field offices confirmed that office square footage could be reduced by sharing support facilities (common areas) such as reception areas, conference rooms, break rooms, file rooms and the like. H ouston field offices may have this lease space savings, but the tremendous volume of transactions and activities and the size of combined staff would negate any possible reductions in their common areas.

Savings in lease costs by consolidating office space can be realized by comparing each field office s current office square footage per employee to the state standard of 200 square feet per employee. The state standard square footage includes work space for the employee and an allocation of space for the shared common areas. Any identified special use space currently required by a field office in addition to normal office space has remained constant for the purposes of this study. Extra storage space is an example of special use space.

Another benefit of consolidating field offices would be reductions in monthly telephone service charges. The single office requires just one base line.

B. TNRCC can realize a laboratory cost savings by discontinuing the outside contracts for metal and organic analysis and by expanding the Houston laboratory facilities into the current Texas Water Commission (TWC) field office space as they consolidate wit h the Texas Air Control Board (TACB) field office. The agency s appropriation should be reduced accordingly.

TWC s Houston field office currently shares building space with the agency s central laboratory. TWC is two and a half years into a ten-year lease of the office and laboratory facility. TWC is expanding laboratory capabilities to include the analysis of metals and organics.

C. TNRCC should reduce the number of regional directors to one per field office and the agency s appropriation should be reduced accordingly.

Savings from this recommendati on could only be realized in regions that currently have two field offices. For the most part, regional directors have technical expertise in one or more programs. Today and in the future, with larger staffs, increasingly complex environmental regulations and more specialized employees, regional managers must be more involved in real management and less in the technical aspects of programs. More of the regional directors technical responsibilities should be absorbed by the next level of managers the program managers. This is essential as TWC and TACB field offices consolidate into one office headed by one regional director.

D. The state should realize general revenue savings if TWC field office administrative staff is cross-trained to perform TACB functions and paid, in part, from TACB federal funds and/or fee funds. Appropriations should be reduced to reflect these projected savings.

Currently, the salaries and fringe benefits of approximately 56 TWC field office administrative staff are paid from general revenue funds. TWC regional managers salaries are included in this number. TACB is funded primarily from federal funds and fees and receives no general revenue funding. Through consolidation of field offices and cross-training of administrative staff, at least a portion of these salaries and fringe benefits could be paid from TACB federal and fee funds. In order to appropriately charge TACB federal and/or fee funding sources, TWC administrative staff must perform administrative job duties directly and/ or indirectly tied to TACB programs. The types of duties currently performed by field office administrative staff suggests that this proposal is a reasonable alternative.

This recommendation assumes that air pollution regulation fees collected by TACB would be sufficiently appropriated by the Legislature. Because the U.S. Environmental Protection Agency requires that fees it authorizes must be used to carry out the require ments of the Federal Clean Air Act (FCAA) and may not be used for other state purpos es, it is reasonable to assume that the agency can set fees sufficient to cover the costs of carrying out TACB activities. To support regulatory programs, states can charge an emissions fee up to $25 per ton of emissions. An additional fee can be charged o n mobile emission sources. TACB has projected a rise of approximately $65.5 million in the total fees collected by 1995. Under current state legislation, TACB is permitted to keep only that portion of the fees appropriated to them by the Legislature with the balance of collected 1990 FCAA fees transferred to the state s General Revenue Fund. According to TACB, these fees are earmarked by federal law and can only be used in the regulation of air pollution.

A first impression of the proposed field office consolidation of two environmental agencies with somewhat similar functions would suggest that TWC and TACB staff (technical and administrative) could be cross-trained to perform similar duties. A further an alysis of the specialized technical training and formal education required of an individual to satisfactorily perform in air or water programs confirms that it would be difficult to cross-train technical staff. The complexity of federal procedures, rules and regulations in each discipline would make it v ery difficult for an individual to perform with a reasonable level of expertise in both areas. Many of the larger corporations and businesses monitored by TWC and TACB field staffs hire highly-skilled, well-trained and very specialized geologists, biologis ts, engineers and environmentalists. Technical staff could be trained to identify potential violations and report back to an appropriate investigator.


Implications
The recommendations, if implemented, would result in an effective and efficient consolidation of the field offices of TACB and TWC. Square footage used would be based on state standards, and the new agency would be able to take maximu m advantage of consolidation through shared administrative staff and resources.


Fiscal Impact
Future events and their financial impact on the consolidation of field offices and TNRCC are currently moving targets and will not be quantifiable until management develops specific policies, procedures, budgets and organizational structures to address them. The following estimates are based on the current situation.

In determining the financial impact of lease costs when consolidating field offices, a comparison was made of total office square footage currently leased in each region to estimated future office square f ootage requirements assuming utilization of the state standard of 200 square feet per employee. Staggered lease expiration dates for field offices were noted. Square footage netted from this comparison was multiplied by the projected future cost per square foot for office space in each city. Approximately $495,000 in fee savings could be realized over the five-year period.

The financial impact of base telephone line charges for those regions moving from two to one field offices is an average savings per re gion of $3,000 per forecast year. Based on a staggered consolidation schedule as determined by the agencies, the total five-year savings would be approximately $111,000. Additionally, for those regions involved in a relocation/consolidation of offices, a m oving cost of $165 per employee was included in the year of consolidation for that region. Estimated moving costs totaled $88,500 over the five-year period results in an average savings per region of $200 to $300 per month or $2,400 to $3,600 per year (an exception would be the Houston region).

According to TWC and TACB, lease and telephone expenses, as well as moving costs, are funded from a combination of fee sources.

The square footage currently being used as office space by the Houston TWC field office is almost exactly the space needed for laboratory expansion. TWC has determined that building new laboratory facilities for just the metals analysis alone (financial da ta for the organics analysis were not available for this study) would cost approximate ly $1.5 million. Furthermore, converting existing office space to a laboratory, as opposed to building new laboratory space, would cost approximately $700,000. Thus, as a result of consolidating Houston field offices and converting TWC office space to labo ratories, a savings of approximately $800,000 can be realized over the five-year period.

As explained previously, the lack of metals analysis capabilities in the laboratory results in TWC having to hire a private contractor to provide the service. Accordi ng to TWC, maintaining a fully equipped and staffed metals laboratory and eliminating the outside contracts will result in a net savings of approximately $2.5 million over the forecasted period. TWC estimates this savings will approximate 75 percent fees ($1,875,000) and 25 percent federal funds ($625,000).

Currently TWC s Houston field office staff can walk samples over to the laboratory. Once they merge with TACB, a courier service will be necessary. Field office management estimates the added courier expense will be about $15,000 per year.

The average annual salary of a regional director is about $50,000, plus state fringe benefits approximate 29.27 percent or $14,600 per year. There are 11 regions that currently have both a TWC and TACB regional director. Total savings from consolidation wo uld be approximately $710,600 per year or $3,553,000 over the five-year forecast period.

The savings realized would be a combination of general revenue and fee funds depending on which TWC and TACB regional director positions are retained. For the purposes of this study it was assumed that regardless of the positions retained, the new TNRCC regional directors would perform TWC and TACB duties on an equal basis and would be funded accordingly. An equal allocation to g eneral revenue and fees would result in a $355,300 annual savings to each funding source.

The salaries and fringe benefits of approximately 56 TWC field office administrative staff are paid from general revenue funds. These salaries total approximately $1 .75 million annually. In addition, state fringe benefits approximate 29.27 percent or $512,225 per year. Assuming that TWC administrative staff could be sufficiently cross-trained to perform TACB program-related administrative duties 25 percent of the time , total general revenue savings would approximate $565,500 per year ($1,750,000 + $512,225 = $2,262,225 x 25 percent).

Savings to the Savings to Reduced Cost
Fiscal General Revenue Other Dedicated to Federal Change
Year Fund 001 Accounts or Funds Funds* in FTEs

1994 $921,000 $ 808,000 $107,000 -11
1995 921,000 926,000 114,000 -11
1996 921,000 1,003,000 122,000 -11
1997 921,000 1,052,000 138,000 -11
1998 921,000 1,133,000 153,000 -11

*By reducing overall costs of laboratory operations, which are 25 percent federally funded, federal funds to the state will
decrease proportionally.