BILL ANALYSIS Ó
-----------------------------------------------------------------
| |
| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2013-2014 Regular Session |
| |
-----------------------------------------------------------------
BILL NO: SB 848 HEARING DATE: February 11,
2014
AUTHOR: Wolk URGENCY: Yes
VERSION: As proposed to be amended CONSULTANT: Dennis O'Connor
DUAL REFERRAL: Environmental Quality and Governance and Finance
FISCAL: Yes
SUBJECT: Safe Drinking Water, Water Quality, and Water Supply
Act of 2014.
BACKGROUND AND EXISTING LAW
In November 2009, the legislature passed and the governor signed
SBX7 2 (Cogdill). Also known as the Safe, Clean, and Reliable
Drinking Water Supply Act of 2010, that law placed on the
November 2010 ballot an $11.14 B general obligation bond before
the voters to fund various water resources programs and
projects.
The legislature has amended the bond proposal three times,
including twice delaying the placement of the bond before the
voters. After initially being delayed to the November 2012
ballot, the bond was subsequently delayed to the November 2014
ballot, where it remains now.
Over the course of the last year or two, there has been much
discussion on whether the public would support the current
November 2014 bond proposal. Moreover, if the voters would not
support that bond proposal, what, if anything, should take its
place on the ballot?
To help answer those questions, this Committee held a joint
hearing in February with the Senate Governance and Finance
Committee titled "Overview of California's Debt Condition:
Priming the Pump for a Water Bond." That hearing explored
California's overall debt condition, the fund balances for
various bond funded programs, and the implications for the
November 2014 water bond.
1
This was followed two weeks later by a second hearing which
asked the question "What's Changed Since the Legislature Passed
the Safe, Clean, and Reliable Drinking Water Supply Act of
2010?" That hearing highlighted some of the unanticipated
developments that occurred since the drafting of the bond, and
posed the policy question "What changes, if any, should be made
to the bond in light of recent developments?"
Later, on September 24, 2013, the Senate Environmental Quality
and the Natural Resources and Water Committees held a joint
hearing titled "Setting the Stage for a 2014 Water Bond: Where
Are We and Where Do We Need To Go?" That hearing focused on
where the various legislative bond discussions stood, identified
issues that may need additional attention, and, where
appropriate, suggested alternative approaches for consideration
by the members.
PROPOSED LAW
This bill would replace the $11.14 B water bond that is
currently on the November 2014 ballot with a new $6.825 B
general obligation bond titled "The Safe Drinking Water, Water
Quality, and Water Supply Act of 2014." The bill would also
seek voter approval to make unappropriated bond funds from
specific water bonds, which were authorized in 2000 and earlier,
eligible for appropriation for water supply projects.
The proposed bond measure is organized as follows:
Chapter 1.Short Title
Chapter 2 Findings and Declarations
Chapter 3.Definitions
$900 M Chapter 4.Safe Drinking Water and Water
Quality Projects
2,000 Chapter 5.Water Supply Enhancement
Projects
1,200 Chapter 6. Sacramento San Joaquin
Delta
1,700 Chapter 7.Watershed and Ecosystem
Improvements
1,025 Chapter 8Water Storage Projects
Chapter 9.General Provisions
_________ Chapter 10.Fiscal Provisions
$6,825 M
Chapter 4. Safe Drinking Water and Water Quality Projects.
2
This chapter would authorize $900 M in funding for the
following:
$400 Mto the State Water Board (Board) for projects to
address immediate safe drinking water needs.
At least 10 percent of the funds would be
allocated for projects serving severely disadvantaged
communities.
Up to $25 M may be used for technical
assistance to disadvantaged communities.
Up to $10 M may be used to finance
development and demonstration of new technologies and
related facilities for water contaminant removal and
treatment appropriate for use by small and state
small water system.
$100 Mfor grants and direct expenditures to finance urgent
public health emergency actions to ensure that safe
drinking water supplies are available to all
Californians.
$400 Mto the Board for deposit in the Small Communities
Grant Subaccount for grants for wastewater treatment
projects. The Board would be required to give priority
to projects that serve disadvantaged communities and
severely disadvantaged communities, and to projects
that address public health hazards. Eligible projects
include projects that identify, plan, design, and
implement regional mechanisms to consolidate wastewater
systems or provide affordable treatment technologies.
Of the $400 M, $20 M would be allocated to the Board
for grants and loans to private well and septic owners
to protect drinking water sources.
Chapter 5. Water Supply Enhancement Projects. This chapter
would provide $2,000 M in funding for the following:
1,500 Mto the Department of Water Resources (DWR) for
competitive grants for projects that develop, improve,
or implement an adopted integrated regional water
management plan (IRWMP) and improve the quality or
supply of safe drinking water, reduce the amount of
water imported to the region, or address any of the
following other critical water supply reliability
issues:
Groundwater clean-up or pollution prevention
3
in sources of drinking water.
Advanced water treatment technology projects
to remove contaminants from drinking water, water
recycling, and related projects, such as distribution
or groundwater recharge infrastructure.
Urban and agricultural water conservation
and water use efficiency projects.
Other integrated water infrastructure
projects that address one or more water management
activities and improve the reliability or quality of
regional water supplies, including the repair or
replacement of aging water management infrastructure.
Projects receiving IRWMP funds would be require to have
at least a 25% local match. However, DWR would be
authorized to suspend or reduce the cost share
requirement for either of the following:
Projects serving disadvantaged communities,
or
Projects that result in a direct reduction
in water imported from the Delta.
To be eligible for IRWMP funding, a region must comply
with the following requirements:
Have an adopted integrated regional water
management plan.
For each urban or agricultural water
supplier that would benefit from the project, have
adopted and submitted to DWR an urban or agricultural
water management plan, as appropriate. DWR would be
required to certify that the plans met the
requirements of the Urban or Agricultural Water
Management Planning Act, and the urban and
agricultural water conservation requirements
established under SB7X 7(2009, Steinberg).
For each local agency whose service area
includes a groundwater basin that would benefit from
a groundwater management project, have adopted and
submit to DWR a groundwater management plan. DWR
would be required to certify that the groundwater
management plan met the requirements of the
Groundwater Management Planning Act.
Have a water budget that describes local and
imported water supplies and uses in sufficient detail
to inform long-term efforts towards sustainable water
management, and, where applicable, include a
description of any measures anticipated to reduce the
4
amount of water imported to the region in the future.
DWR would be required to develop guidelines for
complying with this requirement.
Where applicable, an integrated water
management plan shall be consistent with and
implement WC §85021 (state policy to reduce reliance
on the Delta).
Where applicable, IRWMP funding would be made available
to water agencies to assist in directly reducing the
amount of water imported from the Delta.
The California Water Commission would be required to
review the DWR's implementation of the IRWMP program
and certify that requirements for grant eligibility are
met prior to DWR making final grant awards.
$1,400 Mwould be distributed to regions pursuant to
a specific schedule. The schedule is based on
each region receiving $50 M, the balance of the
funds were distributed to each region in
proportion to population.
100 M would be available for grants for
projects that significantly advance the
application and effectiveness of innovative
integrated regional water management strategies.
Priority would be given to projects that address
groundwater overdraft and related impacts.
Eligible projects include the following:
Innovative decision support
tools to model future regional climate change
impacts.
Groundwater management plans
and projects that further sustainable
groundwater management.
Other projects determined by
DWR to advance innovative strategies for the
integration of water management.
500 Mto the Board for competitive grants for projects that
develop, implement, or improve a stormwater capture and
reuse plan and that capture and put to beneficial use
stormwater or dry weather runoff. Stormwater capture
and reuse projects developed pursuant to an adopted
integrated regional water management plan are also
eligible for funding provided the projects were
5
developed in substantive compliance with the Stormwater
Resources Planning Act. Eligible projects include any
of the following:
Projects that reduce capture, convey, treat,
or put to beneficial use stormwater or dry weather
runoff.
The development of stormwater capture and
reuse plans.
Decision support tools, data acquisition,
and data analysis to identify and evaluate the
benefits and costs of potential stormwater capture
and reuse projects.
Projects that, in addition to improving
water quality, provide public benefits, such as
augmentation of water supply, flood control, open
space and recreation, and projects designed to mimic
or restore natural watershed functions.
Special consideration would be given to plans or
projects that provide multiple benefits such as water
quality, water supply, flood control, natural lands, or
recreation. A 25% local cost share would be required
for grant funds, which may be suspended or reduced
requirements for disadvantaged communities.
Chapter 6. Sacramento San Joaquin Delta. This chapter would
provide $1,200 M in funding for the following:
800 Mto the Delta Conservancy for water quality, ecosystem
restoration, fish protection facilities, and community
sustainability projects that benefit the Delta.
Eligible projects would include:
1. Projects to improve water quality facilities
or projects that would contribute to improvements in
water quality in the Delta.
2. Habitat restoration, conservation and
enhancement projects to improve the condition of
special status, at risk, endangered, or threatened
species in the Delta and the Delta counties.
3. Projects to assist in preserving
economically viable and sustainable agriculture and
other economic activities in the Delta.
4. Multi-benefit recycled water projects that
improve groundwater management and Delta tributary
ecosystems.
5. Scientific studies and assessments that
support the Delta Science Program.
6
Not less than $500 million would be made available for
items 1 & 2 above.
Would require the Conservancy to:
Achieve wildlife conservation objectives
through projects on public lands or voluntary
projects on private lands to the extent possible.
Funds could be used for payments to landowners for
the creation of measurable habitat improvements or
other improvements to the condition of endangered or
threatened species.
Coordinate, cooperate, and consult with the
city or county in which a grant is proposed to be
expended or an interest in real property is proposed
to be acquired and with the Delta Protection
Commission. Acquisitions shall be from willing
sellers only.
Would require grantees to demonstrate to the
Conservancy how local economic impacts, including
impacts related to the loss of agricultural lands,
would be mitigated.
Would authorize the Conservancy to develop and
implement a competitive habitat credit exchange
mechanism in order to maximize voluntary landowner
participation in projects that provide measurable
habitat or species improvements in the Delta. These
funds could not be used to subsidize or decrease the
mitigation obligations of any party.
400M to reduce the risk of levee failure and flood in the
Delta for any of the following:
Local assistance under the Delta levee
maintenance subventions program.
Special flood protection projects under
Chapter 2 (commencing with Section 12310) of Part 4.8
of Division 6, as that chapter may be amended.
Levee improvement projects that increase the
resiliency of levees within the Delta to withstand
earthquake, flooding, or sea level rise.
Emergency response and repair projects.
Chapter 7. Watershed and Ecosystem Improvement. This chapter
would provide $1,700 M in funding for the following:
500 Mfor water quality, river, and watershed protection and
7
restoration projects of statewide importance outside of
the Delta. Funds would be allocated as follows:
$250 M to implement the Klamath Hydroelectric
Settlement Agreement. Up to $50 M may be made
available for restoration projects in California
pursuant to Klamath Basin Restoration Agreement
provided that the full $250 M is not needed for
dam removal projects.
$100 M to help fulfill state obligations under the
Quantification Settlement Agreement.
$100 M for projects that help fulfill state
obligations under the San Joaquin River
Restoration Settlement.
$50 M for projects that help fulfill state
obligations under the Tahoe Regional Planning
Compact. Funds to implement this provision
would be appropriated to the Tahoe Conservancy.
875 Mfor projects that protect and improve California's
watersheds, wetlands, forests, and floodplains. Funds
would be allocated to specific conservancies, the
Wildlife Conservation Board (WCB), and the Ocean
Protection Council (OPC) according to a specific
schedule.
250 Mto the Secretary for Natural Resources for a competitive
program to fund multi-benefit watershed and urban
rivers enhancement projects in urban watersheds that
increase regional and local water self-sufficiency and
that meet at least two or more of the following
objectives:
Promote groundwater recharge and water
reuse.
Reduce energy consumption.
Use soils, plants and natural processes to
treat runoff.
Create or restore native habitat.
Increase regional and local resiliency and
adaptability to climate change.
20 M to the Department of Parks and Recreation to address
public health deficiencies in drinking water and
wastewater quality at state parks.
30 M to the Board to fund watershed activities by
resources conservation districts.
8
25 M to the Board to fund competitive grants to special
districts and nonprofit organizations for projects that
reduce or manage runoff from agricultural lands for the
benefit of surface and groundwater quality.
Chapter 8. Water Storage Projects. This chapter would provide
$1,025 M in funding for the following:
$1,000Mto the California Water Commission for any of the
following:
Surface storage projects identified in the
CALFED Bay-Delta Programmatic Record of Decision,
excluding projects at Lake Shasta.
Groundwater storage projects and groundwater
contamination prevention or remediation projects that
create additional groundwater storage capacity.
Conjunctive use and reservoir reoperation
projects including associated infrastructure.
Projects that restore the capacity of
reservoirs currently impaired by sediment buildup,
seismic vulnerability, or other impairment.
Projects that result in a permanent
reduction of water exported from the Delta and a
transfer of the equivalent water right to instream
flow. Priority shall be given to projects that also
result in the permanent elimination of irrigation
runoff contributing to salinity in the San Joaquin
Valley.
Recycled water storage facilities.
A project within the Delta watershed must provide
measurable improvements to the Delta ecosystem.
Funds may be expended solely for the following public
benefits:
Ecosystem improvements, including, but not
limited to, changing timing of diversions,
improvement in flow conditions, temperature, or other
benefits that contribute to restoration of aquatic
ecosystems and native fish and wildlife.
Water quality improvements in the Delta or
in other river systems that provide significant
public trust resources or that clean up and restore
groundwater resources.
Flood control benefits, including, but not
limited to, increases in flood reservation space in
9
existing reservoirs by exchange for existing or
increased water storage benefits.
The commission would select projects through a
competitive process based on expected public benefits
received for public investment. The commission, in
consultation with the Department of Fish and Wildlife
(DFW), the Board, and DWR, would be required to develop
and adopt, by regulation, methods for quantification
and management of public benefits. The regulations must
include priorities and relative environmental value of
ecosystem benefits provided by the Department of Fish
and Wildlife and the priorities and relative
environmental value of water quality benefits as
provided by the Board. Funds could not be expended for
the costs of environmental mitigation measures or
compliance obligations except for those associated with
providing the public benefits. The public benefit cost
share of a project could not exceed 50 percent of the
total cost of the project.
No funds could be allocated to a project until the
commission approves the project based on the following
determinations:
The commission has adopted the regulations
and specifically quantified and made public the cost
of the public benefits associated with the project.
DWR has entered into a contract with each
party that will derive benefits, other than public
benefits, from the project that ensures the party
will pay its share of the total costs of the project.
The benefits available to a party shall be consistent
with that party's share of total project costs.
DWR has entered into a contract with DFW and
the state board, after those agencies have made a
finding that the public benefits of the project for
which that agency is responsible meet all the
requirements of this chapter, to ensure that public
contributions of funds pursuant to this chapter
achieve the public benefits identified for the
project.
The commission has held a public hearing for
the purposes of providing an opportunity for the
public to review and comment on the information
required to be prepared pursuant to this section.
The commission has found and determined that
the project is feasible, is consistent with all
10
applicable laws and regulations, and will advance the
long-term objectives of restoring ecological health
and improving water management, including the
beneficial uses of the Delta.
All environmental documentation has been
completed and all other federal, state, and local
approvals, certifications, and agreements required to
be completed have been obtained.
25 Mto the department for studying the feasibility of
additional surface storage projects. Funds provided by
this provision are not available to study the
feasibility of any storage project identified in the
CALFED Bay-Delta Programmatic Record of Decision.
Other Provisions of the Bond:
All moneys provided by the bond are subject to appropriation
by the Legislature.
Requires the bonds authorized by this measure to be prepared,
executed, issued, sold, paid, and redeemed as provided in the
State General Obligation Bond Law except those provisions
restricting the use of bonds to fund the costs of construction
or acquisition of capital assets.
Eligible applicants under this division are public agencies,
nonprofit organizations, public utilities, mutual water
companies, and Indian tribes having a federally recognized
governing body carrying out substantial governmental duties in
and powers over any area. To be eligible for funding under
this division, a project proposed by a public utility that is
regulated by the Public Utilities Commission or a mutual water
company shall have a clear and definite public purpose and
shall benefit the customers of the water system.
Up to 10 percent of funds allocated for each program could be
used to finance planning and monitoring necessary for the
successful design, selection, and implementation of the
projects authorized under that program. Water quality
monitoring would be required to be integrated into the surface
water ambient monitoring program administered by the state
board.
No more than 5 percent of the funds allocated for a program
could be used to pay the administrative costs of that program.
Funds provided by this bond:
Could not be used to acquire land via eminent domain.
Could not be used to support or pay for the costs of
environmental mitigation measures or compliance obligations
11
of any party except as part of the environmental mitigation
costs of projects financed by this division.
Could not be expended to pay costs associated with
design, construction, operation, maintenance, or mitigation
of new Delta conveyance facilities.
Could not be used to acquire or transfer water rights
except for a permanent dedication of water for in stream
purposes.
Projects funded with proceeds from this bond would be required
to promote state planning priorities consistent with Gov. Code
§65041.1 and sustainable communities strategies consistent
with Gov. Code §65080(b)(2)(B).
Whenever feasible, restoration and ecosystem protection
projects must use the services of the California Conservation
Corps or certified community conservation corps.
Special consideration would be given to projects that employ
new or innovative technology or practices, including decision
support tools that demonstrate the multiple benefits of
integration of multiple jurisdictions, including, but not
limited to, water supply, flood control, land use, and
sanitation.
Exempts all bond funded programs, except those funded by
Chapter 8. Water Storage Projects, from Administrative Law
review of guidelines, funding criteria, etc.
Each state agency administering a bond funded competitive
grant program would be required to develop project
solicitation and evaluation guidelines. The guidelines could
include a limitation on the dollar amount of grants to be
awarded. Before disbursing grants, the state agency must
conduct three public meetings to consider public comments
prior to finalizing the guidelines. The state agency must
publish the draft solicitation and evaluation guidelines on
its Internet Web site at least 30 days before the public
meetings. Upon adoption, the state agency must transmit copies
of the guidelines to the fiscal committees and the appropriate
policy committees of the Legislature.
The State Auditor would be required to conduct an annual
programmatic review and an audit of expenditures from the
fund. The State Auditor shall report its findings annually on
or before March 1 to the Governor and the Legislature, and
shall make the findings available to the public.
The Legislature would be authorized to enact legislation
necessary to implement programs funded by this measure.
Other Provisions of the Bill
Would seek voter approval authorizing the Legislature to
appropriate currently unappropriated funds from specific water
12
bonds. The funds would then be available to be appropriated for
grants and direct expenditures to accomplish the purposes of
Chapter 5. Water Supply Enhancement Projects. The specific bond
measures with unappropriated balances are:
The Water Conservation and Water Quality Bond Law of 1986
The Water Conservation Bond Law of 1988
The Safe, Clean, Reliable Water Supply Act of 1996
The Safe Drinking Water, Clean Water, Watershed Protection,
and Flood Protection Act of 2000
ARGUMENTS IN SUPPORT
According to the author, "California faces critical water
challenges in the next decade. Legal battles and controversial
projects have slowed the response to the ecosystem crisis in the
Delta. Small communities throughout the Central Valley lack
access to safe drinking water. Our cities face some of the
highest flood risks of any metropolitan areas in the country.
Climate change is stressing water supplies throughout
California."
"Funding to meet these water challenges is dwindling. Yet,
controversy and lack of fiscal restraint have resulted in water
bond proposals that are not viable and cannot be supported by
California's voters."
"SB848 is a $6.8 billion water bond that focuses on California's
most critical and broadly supported water needs: regional and
local water supplies throughout the state; critical drinking
water needs; delta ecosystem restoration and stronger levees to
improve water delivery; groundwater and surface water storage
that provide public benefits; and better flood protection."
"SB848 would replace the $11.45 billion, pork-filled water bond
currently slated for the 2014 ballot-which is too expensive and
too controversial to ever pass with the voters."
"SB848 doesn't fund everything. It doesn't fund enormous tunnels
or large projects that lack consensus. But it does fund a great
number of water supply improvements for every community in the
state, including new water systems, surface and groundwater
storage projects, groundwater cleanup, recycling and
conservation. Only the most fiscally competitive projects will
be funded."
"SB848 focuses on financing the most cost-effective local and
regional projects, projects that will provide greater water
13
supply independence and self-reliance while delivering a more
clean and reliable supply of water for all of California's
communities."
ARGUMENTS IN OPPOSITION
The arguments against SB 848 made by Association of California
Water Agencies (ACWA) are typical of those made by the
opposition.
"ACWA supports the existing, $11.14 billion version of the 2014
Water Bond but recognizes that changes to avoid earmarks and
reduce its size will aid its passage. That said, SB 848 as
currently drafted is fundamentally flawed."
"SB 848 would dramatically reduce bond funding for Delta
Sustainability and storage - two categories that are critical
for meeting the coequal goals."
"SB 848 would eliminate continuous appropriation for storage -
thus creating uncertainty for additional storage which is
critical to a providing a more reliable water supply for
California."
"ACWA's board-level California Water Finance Task Force
deliberated for months in 2012 and 2013 on how the bond could be
downsized in a way that protects key statewide priority areas
and still retains significant funding for other important
categories (e.g., disadvantaged communities, Integrated Regional
Water Management Plans (IRWMPs), groundwater quality, recycling
and conservation and watersheds)."
"Amendments that address the above concerns and are consistent
with [ACWA's $8.2 B] proposal would allow ACWA to engage further
on SB 848"
COMMENTS
Picking up where we left off, the committee background for our
September 25, 2013 informational hearing raised a number of
issues for the members' consideration regarding the various
water bond proposals. Issues raised in that background relevant
to this bill include:
Eligible Parties. Previous versions of this measure limited
eligibility to receive bond funds to public agencies,
nonprofit organizations, public utilities, and mutual water
14
companies. The measure, as proposed to be amended, also makes
federally recognized Indian tribes that own or operate a
public water system eligible for bond funds.
Definitions. This bill adopts the same definition of
"disadvantaged community" and "severely disadvantaged
community" as was used by propositions 50 and 84 and
designates specific allocations of project funding in those
communities. However, the 2010 federal census did not collect
the household economic data necessary for making this
determination about communities. As such the state does not
have current data necessary to identify such disadvantaged
communities as required by this bill. This is an issue that
will likely be explored in greater detail in the Senate
Environmental Quality Committee.
Compliance. The background observed that while each bond
proposal made grants contingent on complying with specific
statutes, proposals were not consistent regarding which
statutes are prerequisite. This bill has multiple levels of
requirements: For some of the programs, for example, DWR
would have to certify or otherwise determine that the plan or
program meets the requirements of the law. For IRWMP grants,
for example, such programs and requirements include:
The Urban Water Management Planning Act
The Agricultural Water Management Planning Act
The Groundwater Management Act
DWR would not be required to certify or otherwise determine
compliance with other requirements of the law, including:
15
IRWMP Act
Water budgets that include, where applicable, a
description of any measures anticipated to reduce the
amount of water imported to the region in the future
Where applicable, consistency of an integrated water
management plan to the policy of reducing dependence on the
Delta
However, the California Water Commission would be required to
ensure IRWMP grant eligibility requirements are met prior to
DWR making final grant awards.
More generally, the measure as proposed to be amended would
require consistency with all laws, including all provisions of
the Sacramento San Joaquin Delta Reform Act of 2009.
Funding Regions. This measure would use the same funding
regions as was used in the most recent water bond, Proposition
84.
Funding Formulae. This measure would distribute IRWMP funds
across the regions as follows: Each region received a $50 M
allocation, and the balance was distributed based on
population. This is similar to how Proposition 84 distributed
funds across the regions.
Compared to a strict allocation by population, such a system
reduces the allocation to high population areas and boosts the
allocation to low population areas. Under this measure, the
North and Central Coasts, along with the Lahontan and Colorado
River regions would see the largest boosts in allocations
compared to a strict allocation by population.
Matching Rates. Previous versions of this bill would have
required a 50% cost share for IRWMP grants. The measure as
proposed to be amended would reduce this requirement to a 25%
rate.
As with previous versions of this bill, this measure would
allow the matching rate to be reduced or waived for projects
that directly benefit a disadvantaged community. This bill
would additionally allow the rate to be reduced or waived for
projects that result in a direct reduction in water exported
from the Delta, thereby creating an incentive for such
projects. Presumably, this is intended to encourage projects
that would further the policy goal in WC §85021. That policy
16
goal is to reduce reliance on the Delta by regions that depend
on water from the "Delta watershed" through investments in
projects that improve regional self-reliance. If
incentivizing that policy goal is the reason for the reduced
rate, it might make sense to extend the provision for reduced
matching rates to include projects that reduce exports from
not only the Delta, but the greater Delta watershed per water
code WC §85021.
Delta. This measure provides all non-levee related Delta
funds to the Delta Conservancy, who would then make specific
funding decisions. The jurisdiction of the conservancy is the
Delta and Suisun Marsh. However, in furtherance of its role
in implementing the Delta Plan, the conservancy may fund an
action outside the Delta and Suisun Marsh if the board makes
all of the following findings:
The project implements the ecosystem goals of the Delta
Plan.
The project is consistent with the requirements of any
applicable state and federal permits.
The conservancy has given notice to and reviewed any
comments received from affected local jurisdictions and the
Delta Protection Commission.
The conservancy has given notice to and reviewed any
comments received from any state conservancy where the
project is located.
The project will provide significant benefits to the
Delta.
The question is, would the Delta Conservancy be the best
funding agency for all the projects likely to be funded from
this program? Stated another way, are there projects that are
likely to be funded through this program that would be better
funded by some other agency? The answer to the second
question likely is "yes."
In 2012, a very diverse group of stakeholders came together to
identify near-term Delta projects that should move forward
through the regulatory and other processes. This Coalition to
Support Delta Projects identified $1.1 B in no and low risk
Delta projects. Not counting delta levee projects, (which
this bond would fund through a separate provision), a number
of those recommended projects were either on-going DWR efforts
or projects on DWR owned lands.
Regional Watersheds. The background observed that the current
2014 bond (as with Propositions 84 and 50) specifically
17
identifies and provides funds to the different conservancies
and watershed programs. This measure, as proposed to be
amended, would also distribute fund to specific conservancies
and watershed programs.
Studies? The background observed that none of the proposals
included funding for studying the feasibility of additional
surface storage projects. This measure, as proposed to be
amended, would provide $25 M to DWR for studying the
feasibility of additional surface storage projects.
Additional Comments. The committee background for our September
25, 213 informational hearing focused on broad, overarching
issues common to each of the various bond proposals. These
comments are more focused on this measure.
IRWMPs - This bill would make the repair or replacement of
aging water management infrastructure serving disadvantaged
communities an eligible use for IRWMP funds. This has not
been an explicitly authorized use of IRWMP funds under
previous water bonds.
Stormwater Capture and Reuse - Stormwater management is an
evolving concept. At one time, it was viewed as a part of
flood management. Indeed, Proposition 1E, a "flood bond,"
included a stormwater program and directed DWR, the state's
flood agency, to administer it. The Stormwater Resource
Planning Act views stormwater management as a method to
address a significant source of urban water pollution while
opportunistically addressing water supply, water quality,
flood management, and ecosystem restoration. The Integrated
Regional Water Management Planning Act views stormwater
management plans as a component of IRWMPs. This measure
reflects a growing perspective that stormwater is an
underutilized source of water supply and provides funds to
help change that.
Delta Conservancy - In implementing the Delta grant program,
this bill would require grantees to demonstrate to the Delta
Conservancy how local economic impacts, including impacts
related to the loss of agricultural lands, would be mitigated.
While mitigation of "significant effects" is generally
required under CEQA, the CEQA guidelines state that an
economic or social change by itself shall not be considered a
significant effect on the environment. So what would happen
under this provision of the bond if the only impact was
economic or is not even all or part of a CEQA project?
18
Moreover, it is not clear what would happen if the Conservancy
determined that the economic impacts were not sufficiently
mitigated. Would that mean that the project could not be
funded? At a minimum, this provision would likely increase
the costs of many otherwise desirable projects.
Delta Conservancy - In implementing the Delta grant program,
this bill would require the Delta Conservancy to "coordinate,
cooperate, and consult with the city or county in which a
grant is proposed to be expended or an interest in real
property is proposed to be acquired and with the Delta
Protection Commission." This language can (and is) being read
a couple of different ways. Some interpret this language as
merely stating the usual practice of conservancies - namely,
keeping all affected and interested parties in the loop on
what the conservancy is planning. Others interpret this
language as ensuring that cities, counties, and the Delta
Protection Commission have an opportunity to veto any project
they find lacking. Additional clarification would be helpful.
Delta Conservancy - To maximize voluntary landowner
participation in projects that provide measurable habitat or
species improvements in the Delta, this bill would authorize
the Delta Conservancy to develop and implement a "competitive
habitat credit exchange mechanism." The notion is to allow
habitat to be traded as a commodity by creating habitat
credits that willing landowners can sell to private and public
investors. Investors will include state agencies seeking
credits for mitigation requirements or restoration mandates.
Through the Exchange, farmers will be paid to "grow" habitat.
The result will be a new funding stream that enables
landowners to earn revenue by implementing innovative
strategies to restore functional habitat and will effectively
put rural communities at the center of the new conservation
economy.
While such an exchange mechanism might be helpful, this
measure does not provide sufficient administrative guidance to
the Delta Conservancy to ensure it is properly developed and
managed. Such guidance is usually provided though adoption of
a policy bill.
Delta Levees - This measure, as with many previous bonds,
provides funding for the Delta Levee Maintenance Subvention
Program and the Delta Special Flood Protection Projects
Program. Unlike previous bond proposals, this bill would also
19
include funding for levee improvement projects that increase
the resiliency of levees within the Delta to withstand
earthquake, flooding, or sea level rise and emergency response
and repair projects. These may or may not be good ideas, but
again this measure does not provide sufficient administrative
details to know one way or another. Again, some additional
legislative guidance would be helpful.
Storage - This bill would make many more types of storage
projects eligible for funding compared to the existing 2014
water bond, with the potential of greatly expanding the
state's water storage capacity at more competitive costs.
There are a number of reservoirs in the state that are not
allowed to fill completely because of seismic safety concerns.
And, staff is aware of studies that suggest desilting the
state's reservoirs could restore over 1.7 M acre feet of
storage. Additionally, storage for recycled water has the
potential to expand recycled water use by creating it in the
winter when it is not needed and using it in the summer when
there is great demand.
Continuous Appropriation. A number of opponents to this
measure object that, unlike the measure currently on the
November 2014 ballot, this measure does not propose to make
funds for storage continuously appropriated to the California
Water Commission. On March 1, 2006, the Senate Committee on
Natural Resources and Water, in its Report to the Conference
Committee on Infrastructure Bonds: Recommendations for the
Proposed Infrastructure Bonds, described a set of bond
financing principles to guide its recommendation to the
Conference Committee. This included:
"The Legislative Branch's Power To Allocate Funds. One of
the fundamental checks on the executive branch is the
budget process. In that process, the role of the Governor
is to develop and propose a budget; the role of the
Legislature is to review the proposed budget, amend where
necessary, and to appropriate the funds to implement the
budget. Bond funded programs that are funded by continuous
appropriations bypass the formal budget process with its
inherent checks and balances system. Consequently,
continuously appropriated bond programs should be avoided."
Rising administrative costs - This proposal, like most recent
water bond proposals, caps administrative costs at 5 percent.
This is already a challenge for many existing bond funded
programs. This proposal also adds administrative costs, by
20
requiring an annual programmatic audit by State Auditor, and
by adding additional findings by DWR in implementing IRWMP, to
name two examples. If the administrative costs cannot be
covered by bond proceeds, then some other funding source must
be used.
State Planning Priorities - Projects funded by this proposal
would be required to promote state planning priorities and
sustainable communities strategies. Under current law, the
state planning priorities are:
To promote infill development.
To protect environmental and agricultural resources.
To encourage efficient development patterns by ensuring
that any infrastructure associated with development, other
than infill development, supports new development that does
all of the following:
" Uses land efficiently.
" Is built adjacent to existing developed areas.
" Is located in an area appropriately planned for growth.
" Is served by adequate transportation and other essential utilities and services.
" Minimizes ongoing costs to taxpayers.
Despite concerns raised by some, it is not obvious why
complying with those provisions of current law would also
conflict with good water resources management.
Related Measures:
SB 927 (Cannella and Vidak) - would amend the water bond
currently on the November 2014, reducing the authorized amount
from $11.14 B to $9.217 B, and rename the measure the Safe,
Clean, and Reliable Drinking Water Supply Act of 2014.
AB 1331 (Rendon) - would repeal the water bond currently on
the November 2014 and would replace it with the Clean and Safe
Drinking Water Act of 2014, a $6.5 B general obligation bond
to finance a variety of water resources related programs and
projects.
AB 1445 (Logue) - would repeal the water bond currently on the
November 2014 and would replace it with the California Water
Infrastructure Act of 2014, a $5.8 B general obligation bond
to finance public benefits associated with water storage
projects.
Referred to Environmental Quality Committee. This analysis does
not address issues within the purview of the Senate
Environmental Quality Committee. Issues likely to be raised by
that committee include:
Definitions of "disadvantaged community" and "severely
21
disadvantaged community."
Funds provided for safe drinking water needs including the use
of bond proceeds to fund operations and maintenance costs of
interim water treatment equipment and systems.
Funds provided to protect and improve water quality, including
the creation of a private well and septic system program.
Whether the Department of Conservation is the appropriate
agency to implement the agricultural lands runoff grant
program.
Requirements for water quality monitoring.
Whether to provide funds to State Parks to comply with
drinking water and wastewater requirements.
Other water quality related issues raised in the committee
background for the September 25, 2013 joint hearing.
Referred to Governance and Finance Committee. This analysis
does not address issues within the purview of the Senate
Governance and Finance Committee. Issues likely to be raised by
that committee include:
The potential effect of this measure on the state's bonded
indebtedness.
The appropriateness of and method to access previously
authorized but unused water bond proceeds.
Other issues associated with the authorization of general
obligation debt.
Positions. The committee has received many letters regarding
this and other water bond measures. Many letters did not
reflect a formal support or oppose position, but instead
addressed specific areas of interest or concerns or were
otherwise supportive of further discussion. This analysis only
lists entities that have taken a formal position on this
specific measure. Be assured, however, that the committee has
received and considered the issues raised in each of the
different letters.
SUGGESTED AMENDMENTS: None
SUPPORT
American Planning Association
Big Sur Land Trust
California Association of Local Conservation Corps
California Trout (Seek Amendments)
Clean Water Action (Seek Amendments)
Community Water Center (Seek Amendments)
22
Contra Costa County Board of Supervisors
Environmental Defense Fund
Land Trust of Santa Cruz County
Leadership Counsel for Justice and Accountability (Seek
Amendments)
Monterey Bay Aquarium
PolicyLink (Seek Amendments)
Sacramento County Board of Supervisors
Sacramento Regional County Sanitation District
Sierra Club California
Solano County Board of Supervisors
Sonoma County Water Agency
Trout Unlimited (Seek Amendments)
Yolo County Board of Supervisors
Water Bond Coalition
OPPOSITION
Association of California Water Agencies (Unless Amended)
Browns Valley Irrigation District (Unless Amended)
California Alliance for Jobs
California Building Industry Association (Unless Amended)
California Business Properties Association
California Chamber of Commerce
California Citrus Mutual
California Cotton Ginners and Growers Association
California Farm Bureau Federation (Unless Amended)
Calleguas Municipal Water District (Unless Amended)
Castaic Lake Water Agency
Corona, City of
Dublin San Ramon Services District (Unless Amended)
Eastern Municipal Water District (Unless Amended)
Helix Water District (Unless Amended)
Kern County Water Agency
Las Virgenes Municipal Water District (Unless Amended)
Mesa Water District (Unless Amended)
Metropolitan Water District of Southern California (Unless
Amended)
Mojave Water Agency
Monte Vista Water District (Unless Amended)
Moulton Niguel Water District (Unless Amended)
Nesei
Northern California Water Association (Unless Amended)
Riverside Public Utilities (Unless Amended)
San Bernardino Valley Municipal Water District
Santa Ana Watershed Project Authority
South Tahoe Public Utilities District (Unless Amended)
23
Southern California Water Committee
Three Valley's Municipal Water District (Unless Amended)
Upper San Gabriel Valley Municipal Water District
Valley Center Municipal Water District (Unless Amended)
Western Agricultural Processors Association
Western Growers Association
Western Municipal Water District
Westlands Water District
Wheeler Ridge-Maricopa Water Storage District
24