Economic Analysis of Critical Habitat Designation for the San Jacinto Valley Crownscale Prepared for: U.S. Fish and Wildlife Service Division of Economics Arlington, Virginia Prepared by: Northwest Economic Associates A Division of ENTRIX, Inc. Vancouver, Washington September 2005 Economic Analysis of Critical Habitat Designation for the San Jacinto Valley Crownscale Prepared for: U.S. Fish and Wildlife Service Division of Economics 4401 N. Fairfax Drive Arlington, VA 22203 Prepared by: Northwest Economic Associates A Division of ENTRIX, Inc. 12009 N.E. 99th Street, Suite 1410 Vancouver, WA 98682-2497 Send comments on the economic analysis to: Field Supervisor Carlsbad Fish and Wildlife Office U.S. Fish and Wildlife Service 6010 Hidden Valley Road Carlsbad, CA 92009 September 2005 TABLE OF CONTENTS Executive Summary ES-1 1.0 Introduction and Background 1 1.1 Approach to Estimating Economic Effects ................................................................................. 1 1.1.1 Efficiency Effects ............................................................................................................ 2 1.1.2 Distributional and Regional Economic Effects ............................................................... 3 1.2 Scope of the Analysis.................................................................................................................. 5 1.2.1 Sections of the Act Relevant to Economic Analysis ....................................................... 7 1.2.2 Other Relevant Protection Efforts ................................................................................... 8 1.2.3 Additional Analytic Considerations ................................................................................ 8 1.2.4 Benefits.......................................................................................................................... 10 1.3 Analytic Time Frame................................................................................................................. 11 1.4 Information Sources .................................................................................................................. 12 1.5 Background of the Crownscale Listing ..................................................................................... 12 1.6 Background of the Crownscale Critical Habitat Designation ................................................... 13 1.7 Description of the Species and Habitat ..................................................................................... 13 1.8 Critical Habitat Designation...................................................................................................... 15 1.8.1 Excluded Lands ............................................................................................................. 15 1.9 Organization of the Report........................................................................................................ 16 2.0 Framework for Economic Analysis 17 2.1 Pre-Designation and Post-Designation Effects ......................................................................... 17 2.2 General Categories of Economic Effects .................................................................................. 17 2.2.1 Federal ........................................................................................................................... 19 2.2.2 Private............................................................................................................................ 19 2.2.3 Effects on Small Entities ............................................................................................... 21 2.2.4 Effects on Energy Supply.............................................................................................. 22 2.3 Project Life, Period of Analysis, and Discount Rate................................................................. 22 2.4 Definition of economic impacts ................................................................................................ 23 2.5 Caveats and Assumptions.......................................................................................................... 24 Northwest Economic Associates • i 3.0 Socioeconomic Profile of the Critical Habitat Area 26 3.1 Geographic Description of the Region...................................................................................... 26 3.2 Population Characteristics and Demographics.......................................................................... 26 3.3 Employment and Economic Activity ........................................................................................ 27 4.0 Regulatory Environment 30 4.1 Other Species Listed under the Act........................................................................................... 30 4.2 Federal and California State Statutes and Regulations.............................................................. 31 4.2.1 Clean Water Act ............................................................................................................ 31 4.2.2 Porter-Cologne Water Quality Control Act................................................................... 32 4.2.3 California Environmental Quality Act........................................................................... 32 4.3 Western Riverside County Multiple Species Habitat Conservation Plan.................................. 33 5.0 Economic Effects on Residential, Commercial, and Industrial Development 36 5.1 The Costs of Pre-Designation Activities ................................................................................... 36 5.2 The Costs of Post-Designation Activities.................................................................................. 42 5.2.1 Mitigation Fees.............................................................................................................. 42 5.2.2 Conservation Activities ................................................................................................. 42 5.2.3 Assumptions .................................................................................................................. 45 5.2.4 Development Projections............................................................................................... 47 5.2.5 Estimation Results: Costs of Mitigation Fees and Conservation Activities .................. 51 5.2.6 Estimation Results: Administrative Cost of Section 7 Consultation ............................. 53 5.2.7 Estimation Results: Total Post-Designation Economic Costs ....................................... 55 5.3 Total Economic Cost of Development Activities...................................................................... 55 6.0 Economic Effects on Road Projects and Other Activities 57 6.1 Effects on Road Projects ........................................................................................................... 57 6.1.1 Post-Designation Projects.............................................................................................. 57 6.1.2 Conservation Efforts and Costs ..................................................................................... 59 6.2 Administrative Costs ................................................................................................................. 62 6.3 Total Cost Summary.................................................................................................................. 63 6.4 Effects on the San Jacinto River Flood Control Project............................................................ 64 6.4.1 History of the Project..................................................................................................... 64 Northwest Economic Associates • ii 6.4.2 Project Modifications .................................................................................................... 65 6.4.3 Conservation Efforts...................................................................................................... 65 6.4.4 Administrative Costs ..................................................................................................... 66 6.4.5 Total Costs.....................................................................................................................67 6.5 Effects on Pipeline Projects....................................................................................................... 68 6.5.1 Metropolitan Water District........................................................................................... 68 6.5.2 Pre-Designation ............................................................................................................. 68 6.5.3 Total Protection Costs to Pipeline Projects ................................................................... 73 6.5.4 Administrative Costs ..................................................................................................... 73 6.5.5 Total Costs to Pipeline Projects..................................................................................... 74 6.6 Effects on California Department of Fish and Game, San Jacinto Wildlife Area ........................ 74 6.7 Cost of Habitat Conservation Plans........................................................................................... 77 6.8 Effects on Agriculture ............................................................................................................... 78 6.9 Effects on Fire Management ....................................................................................................