Good morning, everybody.

It is Monday, April 20th.

Welcome to the Transportation and Environment Committee.

We have four items on our agenda this morning.

The first three are under the Department of Environmental Protection Fund, the Department of Environmental Protection General Fund, the Climate Change Planning, NDA, and the Department of Environmental Protection, Water Quality Protection Fund and Water Quality Protection Charge.

And so we'll start with DEP and Mr.

Lubchenko.

Good morning if you want to walk us through the packet.

Good morning.

And I thought maybe quick introduction since we have a fair number of folks from DEP here today, and then I'll walk us through the packet for those first three items.

Good morning, Jennifer Macedonia, Director of the Department of Environmental Protection.

I'll turn it to Amy.

Good morning, Amy Stevens, Division Chief for the Water Restoration Division.

Good morning, Lindsay Robinette Shaw, Section Chief for the Buildings and Transportation Programs Group.

All right.

So as you mentioned, the first three items today are the DEP General Fund, the climate change planning non-departmental account, which is also general fund supported, and then the water quality protection fund, which is a self-supporting enterprise fund.

First, we'll talk about the two DEP portions of the budget.

Overall, that is a decrease of about 3.5 million.

We'll talk about all the puts and takes in a minute.

And across both the funds.

First, we'll talk about the general fund side of the budget.

That budget, and I've got the summary numbers here on page three of the packet across all of these department and funds.

There are no programmatic or staffing or significant staffing additions or reductions or enhancements to the general fund portion of the budget, as we'll we'll talk about in a little bit.

As you know, the uh uh council president's instructions for uh how we're reviewing budgets this year is that uh ads and enhancements uh that are identified by the committees uh would be going to the reconciliation list for uh further discussion and debate uh going forward.

Uh however, in this case, staff does not have immediate recommendations regarding any items since the staff does not feel these items rise to that level of being enhancements or um additions.

Certainly, if the committee were to add something, that would have to go on the reconciliation list as well.

The committee can also choose to reduce items, and we'll talk about that, some options there in a minute.

Uh those reductions, the committee could opt either just to make them as straight reductions or could opt to put them on the reconciliation list for for further discussion.

Um as I mentioned, there's a slight decrease in the general fund budget, uh, although uh I I do want to point to uh page six of the packet.

This lays out uh basically a crosswalk from the FY26 budget to the FY27 budget.

Uh and it's it's listed as table one at the top of the page.

Uh and uh as you can see, a lot of these adjustments and you and these are adjustments you'll see in other budgets across uh county departments.

Uh a lot of them are what we would call technical adjustments or same services types of adjustments where you're trying to do the same thing in 27 that you're doing in 26, but there could be some increases or decreases related to that.

Uh and then also we have some significant cross-cutting items that you see across departments, such as the FY27 compensation adjustment.

Those adjustments will be dealt with at the count by the council at a macro level, and then the department budgets will be adjusted accordingly.

Uh so the committee does not need to take up, for instance, the FY27 compensation adjustment for the DEP General Fund, which is adding about 160,000 uh if it were to remain unchanged from what the executive recommended.

You also have some of the technical adjustments I mentioned, like laps.

Each year, the department in coordination with OMB identifies a lapse rate or a vacancy rate that it'll experience for the upcoming year.

It's a projection based on historical experience with vacancies and OMB does uh try to establish some uh general rules across uh the departments to identify what uh the laps would be.

Uh so that if you are increasing laps, you are decreasing costs.

If you are decreasing laps, you're increasing your costs in the department since you're expecting a higher amount of your uh personnel costs to be spent.

Then we have a lot of annualizations from prior uh from the prior year, FY26.

For instance, if you have a compensation increase in 26, that will then uh build into FY27 as well.

Similarly, if you have new positions or position changes in one year, that can affect uh the budget in FY27.

Uh you also have uh impacts on contracts.

Uh the DEB general fund, much of its operating budget is in contracts.

And uh so you do have adjustments there, often for CPI related adjustments, and uh DEP can speak to those as part of uh what we're seeing here.

Uh and then a couple of other um items noted here, uh internal service funds, motor pool, printing and mail, risk management, those are all items that are budgeted centrally and then spread to the departments by OMB.

So you see those in each of the departments as well.

Another cross-cutting issue the executive has recommended is a two and a half percent inflationary adjustment for nonprofits.

So that will affect departments differently depending on which ones have uh uh contractual contractual arrangements with nonprofits uh or grant-related um opportunities for nonprofits.

Uh so that that will also affect departments in different ways.

Um as I mentioned earlier, the um uh one significant adjustment is in the uh electric leaf blower program implementation.

Uh that um I've got some discussion of that on the bottom of page six.

Uh this uh was new funding in FY26 in the general fund budget, about $645,000 for both outreach with the new legislation as well as rebates to help provide uh transitional uh help assist with transitional costs for folks switching over from uh gas-powered equipment to electric.

Um, there was an expectation that the uh outreach and rebates would be ending over time.

Uh so this the FY27 budget assumes a reduction in the um the one-time outreach, although there's still outreach money in there going forward.

Uh, and then also it does include uh rebate money uh for the final year.

So the uh FY27 budget still includes several hundred thousand dollars for rebates, as was presumed in the fiscal impact assumed for the legislation.

Uh so once again, this reduction um, while it is a reduction in the budget per se, it was expected, it's something like what we might see with one-time funding in one year and then it reduced in the next year.