BILL ANALYSIS Ó SENATE COMMITTEE ON NATURAL RESOURCES AND WATER Senator Fran Pavley, Chair 2015 - 2016 Regular Bill No: SB 37 Hearing Date: March 24, 2015 ----------------------------------------------------------------- |Author: |Nielsen | | | ----------------------------------------------------------------- ----------------------------------------------------------------- |Version: |February 12, 2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |Yes |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Dennis O'Connor | | | | ----------------------------------------------------------------- Subject: Water: floods BACKGROUND AND EXISTING LAW In 2006, the voters ratified the Disaster Preparedness and Flood Prevention Bond Act of 2006, shown on the ballot as Proposition 1E (Prop. 1E). Prop. 1E authorized $4.090 B in general obligation bonds to fund infrastructure projects for flood protection and levee repair and improvement. Among other things, Prop. 1E provided $3 B for: Evaluating, repairing, rehabilitating, reconstructing, or replacing levees, weirs, bypasses, and facilities of the State Plan of Flood Control, (SPFC); Improving or adding facilities to the State Plan of Flood Control to increase levels of flood prevention for urban areas; and Reducing the risk of levee failure in the delta. Two years later, the Legislature passed and the Governor signed the Central Valley Flood Protection Act of 2008 (SB 5, Machado). That act required The Department of Water Resources (DWR) to develop, and the Central Valley Flood Protect Board to adopt, a plan for reducing the risk of flooding throughout the SPFC system, including recommended actions and projects. That plan, called the Central Valley Flood Protection Plan (CVFPP), was developed and adopted in 2012 and identified a total flood control funding need of $14 B to $17 B. SB 37 (Nielsen) Page 2 of ? While the plan was being developed, DWR created a program for improving or repairing facilities of the SPFC called the "Early Implementation Program (EIP)." This program provided $936 M to various projects, including $182.4 M to the Sutter Butte Flood Control Agency (SBFCA) for the Feather River West Levee Project. Upon completion of the CVFPP, the DWR established the Urban Flood Risk Reduction (UFRR) Program to identify and fund projects to reduce the risk of flooding in urban areas. The Legislature appropriated $155 M in the 2014/15 budget for this program. The schedule for this next round of funding is: January 21, 2015 UFRR Program Guidelines and Project Solicitation Package approved by the Director, finalized and released to the public. March 9, 2015 Concept Proposals due (or postmarked) by 5:00. May 15, 2015 State notifies Local Agencies of results of funding decisions. SBFCA expects to receive additional funding through UFRR for the Feather River West Levee Project. Under the UFRR funding guidelines "only work performed after a Funding Agreement is executed may be eligible for reimbursement. However, the DWR is authorized to provide reimbursement to funding recipients that execute a new funding agreement under the UFRR program, or that amend an existing funding agreement under the EIP program, for any expenditures associated with a project initiated under the EIP program if such expenditure was incurred after July 1, 2014 and before issuance of a funding commitment letter or funding agreement amendment, but in no case expenditures incurred later than October 1, 2015." So, if SBFCA does receive additional funding for the Feather River West Levee Project, it could receive reimbursement for expenditures incurred after July 1, 2014 through October 1, 2015. PROPOSED LAW This bill would authorize DWR to provide reimbursement to funding recipients that execute a funding agreement under the UFRR program for expenditures associated with continued funding of a project initiated under the EIP program and incurred after July 1, 2014, and before issuance of a funding commitment, or amendment or execution of the funding agreement, but no later than December 31, 2015. SB 37 (Nielsen) Page 3 of ? ARGUMENTS IN SUPPORT According to the author, "Suspending work on the Feather River West Levee Project could cost the State and local sponsor tens of millions of dollars in construction contract claims, expired right-of-way agreements, extended overhead and increased financing costs. SB 37 facilitates construction moving forward without delay, avoids burdening the local sponsor with expenditures above the local project cost share, and avoids the negative consequences that would result from unforeseen delays in state contract approval of the final phase of the project. Without this certainty, ongoing construction operations may be forced to shut down, reducing public safety, cost effectiveness and eroding public trust." ARGUMENTS IN OPPOSITION: None received COMMENTS Is this really a problem? It depends on your expectations of DWR. If you believe DWR will meet its May 15 date to award grants and would then work expeditiously to execute funding agreements before October 1, then no, it's not a real problem. If, on the other hand, you think DWR is liable to run into some difficulty causing it to miss the October 1 funding deadline, then yes, it is a real problem. What is the harm in passing this anyway? This bill was drafted fairly narrowly. Should the bill be enacted and it was later found to be unnecessary, there wouldn't likely be any lingering consequence. SUGGESTED AMENDMENTS: None SUPPORT Sutter Butte Flood Control Agency (Sponsor) California Central Valley flood Control Association OPPOSITION: None Received