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
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          |Author:    |Nielsen                |           |                 |
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          |Version:   |February 12, 2015                                    |
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          |Urgency:   |Yes                    |Fiscal:    |Yes              |
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          |Consultant:|Dennis O'Connor                                      |
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                              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