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Recreation, environment, access, and land use news and information for California.
10 minutes reading time (1945 words)

Operation Restore - The California OHMVR Program and OHV Trust Fund

The past year has been one of turmoil for the California OHMVR Program.  This entry is the beginning of a critical look at the past and present of the OHMVR Program.

******************

Operation Restore - The California OHMVR Program and OHV Trust Fund

Goal:  Restore the financial health and integrity of the California OHMVR Program.  

Executive Summary

The California OHMVR program was created in 1971 as a self-funded program.  The primary funding is derived from registration of off-road vehicles, entries fees to State Vehicle Recreation Areas (SVRA), and revenue derived from a calculation of the motor vehicle fuel tax paid for fuel used in off-highway recreation.  In 2007, SB-742 was approved by a near unanimous vote and changed the motor vehicle fuel tax revenue to be derived from a calculation based on the actual number of OHV recreation-related public land visitor-use-days.  

Over the life of the program, the OHV program has been subject to manipulation with funds diverted from providing for OHV recreation opportunity to other non-OHV uses.  Numerous state program audits are critical of OHV Program management within the California Department of Parks and Recreation (State Parks).

The mismanagement of the OHV program began to change with the appointment of Daphne Greene as Deputy Director. Originally appointed by Governor Davis in 1999 to the Off-Highway Motor Vehicle Recreation Commission, Ms. Greene was then appointed by Governor Schwarzenegger to be Deputy Director of the Off-Highway Motor Vehicle Recreation Division of State Parks in 2004.

Deputy Director Greene was appointed, in part, to implement specific repairs to the Division outlined by an extensive audit performed in 2005 by the Bureau of State Audits (BSA).

Prior to Ms. Greene’s tenure as Deputy Director, the annual Local Assistance Grants component of the OHV Program showed significant fluctuation from year-to-year.  The local assistance grants program was revamped in 2005 to be a true competitive process.  That was followed by the passage of SB-742.  Together, those actions helped put the OHV Program on a solid footing with sound management guidelines to where the state OHV Program is now a model being looked at by other states around the nation.

The visionary leaders that created the OHV Program wanted a strong, organized program that included law enforcement, the remediation of land and education with an understanding of where you can recreate legally as a self-funded program.  The program as now structured is that program.  It is self-funded and receives no funding from the General Fund.  In fact, over $188 million has been diverted from the program to other non-OHV efforts.  

Due to administrative encumbrances, the OHV Program has maintained a healthy reserve.  Administrative hurdles encumber the program from carrying out its legislative mission to increase OHV opportunity.

The funding reductions of the last few years (four successive years of budget diversions) means that the program has already had demonstrable reductions that are becoming visible; such as a 10% cut to district staffing; an 18% cut in headquarters staffing.  Contracts are being cut, which means fewer hours at the SVRA.  There will be closures in the middle of the week and, clearly, there has been loss of opportunity in the maintenance of the trails and the riding in the areas supported by local assistance grants.

The fundamental math works this way:  OHV was a $75 million program for the 2011/2012 budget year.

$54 million of that money goes to the operation and maintenance of the SVRAs, the legal responses to the constant lawsuits, the overhead, most of the attendant costs on personnel.  But, in terms of recreational opportunity, the $54 million only allows riding in eight (8) SVRAs.  Those eight SVRAs, in the last five years, have seen ridership go up 150%.  They are crowded.  It is also becoming increasingly difficult to provide increased opportunities in those areas.  However, that is where the $54 million goes: law enforcement, environmental needs, education, legal costs, etc….

The $21 million local assistance grants program, which was $26 million in prior years and is now capped at $10 million for the next grant cycle, allows for recreation opportunities outside of the SVRAs.  This recreation opportunity is part of what the program was designed to offer.   It is what the visionary leaders that created the OHV Program wanted -- a strong, organized program that included law enforcement, the remediation of land and education with an understanding of where you can recreate legally as a self-funded program.

Annually, the OHV Program receives about $55 million that comes from the Gas Tax.  That gas tax amount is what is used by the recreation community for off-road recreation and was identified as the primary source of funding for the self-funded OHV program and codified in 1972.  The state of California receives about $5.2 billion in Gas Tax each year.  Of that, $55 million goes to OHV.  The remaining OHV Trust Fund receipts are monies from registration fees and SVRA entry fees.

The OHV Program is a $75 million per year program, all from user funding.  The continued diversion of funds from the OHV Trust Fund are beginning to place the program in jeopardy.  The local assistance grants for 2012/2013 grant cycle are 52% lower than the previous grant cycle.

There is no more money to replenish the capital outlay and acquisition account in the trust fund or to retain the required reserve.

The OHV program works so well because local assistance grants go to law enforcement, environmental, educational and OHV opportunities outside the SVRAs.  

The consequences of loss of the local assistance grants program and capital outlay is a rapid disintegration of the SVRA system (the OHV Program) because we will not have enough money to handle the growing need.

The grant funding is provided to local agencies: US Forest Service, Bureau of Land Management, County Sheriff Departments, and numerous non-profit agencies.  This funding is spent in the counties: salaries for workers and purchase of miscellaneous materials for projects.

An Economic Analysis shows the financial contribution of the local assistance grants program to the county.  The California State OHV Program is a positive economic impact in counties where OHV recreation opportunities occur.

Since the beginning of the OHV Program, funds designated for OHV have been diverted for other purposes within Parks. The fundamental program changes in SB 742 (chaptered in 2008) halted flagrant abuse and manipulation of the OHV program for other than supporting OHV recreation opportunity.

Even a casual reading of the  2005 Audit shows that State Parks and Division have not fairly served the interests of the OHV community in California and have flagrantly disregarded the intent of the laws that govern the OHV Program. Tens of millions of dollars of revenue generated by the OHV community and entrusted to the Division have been improperly siphoned away from the OHV Program to pay for other items unrelated to the OHV Program. For example, the Auditors found the following major items:

-- OHV Trust Funds have been spent to fund California State Parks where no motorized off-road vehicle use is allowed. In one case, OHV Trust Funds were allocated to an off-shore island where no vehicle use is permitted or has ever been known to take place. As noted in the audit (page 64, paragraph 1), “…relevant provisions of the Revenue and Taxation Code that define the intent of the Legislature with respect to spending OHV Trust Funds money state that those funds should be used to support recreation areas on surfaces where both street-licensed and off-highway motor vehicles can engage in recreation.” The Legislature’s intent clearly limits the expenditure of OHV Trust Funds money to support the off-highway use of street-licensed vehicles only in areas where traditional off-highway vehicles are used and to take various actions to mitigate the impacts of that use. The State Parks was unable to provide adequate documentation or formal assessments to support charges to the OHV Trust Funds. With its action, Department of Parks and Recreation has exceeded its authority and used OHV Trust Funds money inappropriately.

-- OHV Trust Funds have also been inappropriately expended to help underwrite the salary of State Parks officials and to charter the services of private aircraft.

-- The Auditors found 80 instances in which the OHMVR Division split up major contracts so that single-source vendors could be awarded multiple smaller contracts in order to avoid the scrutiny of higher level Department officials and to circumvent the requirements of state contracting regulations. This practice appears to be in direct violation of the "anti-splitting" laws set forth in the Public Contracts Code and administrative policy established by the Department of General Services

-- The Division and Commission lacked a comprehensive strategic plan that balances responsible OHV recreation with environmental concerns and provides a coordinated vision as to how to manage the OHV program. As a result, large amounts of money are wasted in haphazard attempts to manage a multi-million dollar grant program with conflicting (and often ambiguous) priorities. The unbelievably complicated process – generating over 13,000 pages of grant applications – causes many important OHV opportunity providers to simply forego the grant request process due to the bureaucracy and red tape. Clearly, the Commissioners, who are basically volunteers, do not review 13,000 pages of grant applications. Even when the Division does actually review all of the required application data and analyzes it thoroughly, an unbelievable amount of OHV Trust Funds are needlessly spent evaluating grant applications.

-- Much of the Division overhead is absorbed by efforts to resolve the continuing dissension between the OHMVR Division and the OHMVR Commission. The result is that after OHV Trust Funds that are controlled by the Commission are added to overhead expenses incurred by the Division (including all of the misuse), very little actually goes to supporting existing OHV opportunities to accommodate the growing demand for OHV recreation by California residents.

This is not the first time that serious discrepancies regarding the allocation of OHV Trust Funds has been exposed. Similar situations have occurred in the 1970’s, 1980’s, 1990’s and now in 2005. After a similar audit on the program in 1976, section 5090.61 of the Public Resources Code (PRC) had to be amended to specifically prohibit the Director or his immediate staff from having their salaries or expenses billed to the OHV Trust Fund. The purpose and agenda of the Department of Parks and Recreation is often in conflict with the objectives of the OHV program.

The current financial scandal involving State Parks and “hidden” accounts underscores a bigger problem within the system.  In the past four budget cycles, $129 million has been diverted from the OHV Trust Fund to other sources, including the State Parks and Recreation Fund.  

Analysis of the 2007-08 Budget Bill conducted by the Legislative Analyst’s Office found that the SPRF was virtually depleted.  That fund relies on park entry fees and had been 91-96% below estimates for previous years.  In subsequent budget cycles, the OHV Trust Fund has been depleted and State Parks is sitting on two special funds totaling over $54 million; $33.5 million identified as OHV Trust Fund and $20.4 million identified as State Parks and Recreation Fund.

As it stands, indications are that ALL the State Parks “hidden” funds are OHV Trust Funds.

We call upon the legislature to address the OHV Trust Fund issue without further delay.  The visionary leaders that created the self-funded OHV Program wanted a strong, organized program that included law enforcement, the remediation of land, and education with an understanding of where you can recreate legally.

The past diversion of funds from the OHV Trust Fund has placed the program in jeopardy and endanger of becoming encumbered.  The local assistance grants for 2012/2013 grant cycle are 52% lower than last year; a reduction that poses a serious threat to the OHV program.

Prompt action is necessary to address this critical issue.

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