Structural Pest Control Board approves fee and regulatory package after budget review; rejects most public comments

The Structural Pest Control Board voted to move forward with a package of fee and regulatory changes after staff presented fund-condition statements showing the board faces a structural budget deficit.

Board staff told members the board had a beginning base budget of about $6.8 million and projected expenditures that would reduce reserves, and the Department of Consumer Affairs budget office presented year-to-date and projected revenues showing a continuing gap between revenue and ongoing costs. Ryan Harrington, budget analyst, said the board ended fiscal year 2023–24 with about $2.6 million in reserve and that current-year projections leave the board with a smaller reserve that requires action to avoid service reductions.

Staff and the executive officer recommended the board reject public comments opposing increases to some Wood‑Destroying Organism (WDO) activity reporting fees and proceed with the package as noticed. Executive staff said most license and renewal fees are already at their statutory maximums and that unpredictable fine revenue cannot reliably replace fee revenue.

After discussion, the board voted 5–1 to direct staff to proceed as recommended and to provide the staff responses to public comments in the rulemaking record. Vice President Finley cast the lone no vote on that motion. The board then ratified non‑substantive edits to the same regulatory package and directed staff to complete the rulemaking process; that action passed on a 6–0 roll call vote.

Why it matters: Board staff said failing to act would threaten the board's financial stability and lead to service reductions. The fee changes are intended to stabilize the fund while staff continue to pursue longer‑term legislative changes to statutory fee caps.

Details and background

The rulemaking package covers several sections of Title 16 of the California Code of Regulations identified in the meeting materials as sections 19 36, 19 306.2, 19 408 and 19 97 (fee and licensing provisions). Staff reported 11 public comments received during the formal comment period, “primarily opposing the increase in WDO activity reporting fees,” but recommended rejecting those comments and proceeding. The executive officer said she was pursuing a legislative proposal and a fee study to request higher statutory fee caps in the future, which would give the board more flexibility to spread fee increases across license types.

Budget numbers presented to the board showed a beginning base budget of roughly $6.8 million and projected expenditures that, without the regulatory changes, would leave the fund with a smaller reserve. Harrington noted that personnel cost growth (salary, pension) is driving ongoing increases and that the budget office applies a conservative 3% annual growth assumption for planning. Harrington also provided separate fund condition statements for the board’s Education and Enforcement Fund and the Board’s Research Fund.

Formal actions and votes

- Motion: “Move to direct staff to proceed as recommended to reject the comments as specified and provide the responses to the comments as indicated in this memorandum.” Mover: President Anderson (moved on the record). Second: Board Member (second recorded). Vote: 5 yes, 1 no. Outcome: approved. (Roll call: President Anderson — yes; Vice President Finley — no; Board Members Tingan, Paxson, Mendenhall, Bridal — yes.)

- Motion: Ratify and approve proposed regulatory text (Attachment A) and authorize staff to complete the rulemaking process (including non‑substantive edits). Vote: 6–0 (unanimous). Outcome: approved.

What the board will do next

Staff will file the final rulemaking package with the Office of Administrative Law and continue work on a legislative fee proposal and a fee study to request higher statutory maximums that would permit more balanced fee increases in future years. The board asked staff to provide further budget breakdowns (by license branch and WDO reporting revenue) for members who requested more detail on revenue sources and how fee burdens are distributed.

Ending

Board members stressed the need to restore a sustainable reserve to avoid future cuts. Staff said they will return with continued budget monitoring and, where feasible, outreach explaining how the changes affect licensees and WDO reporting filers.