BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 552


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          Date of Hearing:  June 28, 2016


                  ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE


                                 Marc Levine, Chair


          SB  
          552 (Wolk) - As Amended June 16, 2016


          SENATE VOTE:  31-5


          SUBJECT:  Public water systems:  disadvantaged communities:   
          consolidation or extension of service:  administrative and  
          managerial services


          SUMMARY:  Authorizes the State Water Resources Control Board  
          (SWRCB) to contract with an administrator to provide  
          administrative and managerial services to a designated public  
          water system, as defined, to assist with the provision of an  
          adequate and affordable supply of safe drinking water.   
          Specifically, this bill:  


          1)Updates and clarifies several provisions of law on water  
            system consolidation.


          2)Authorizes the SWRCB, in order to provide affordable, safe  
            drinking water to disadvantaged communities and to prevent  
            fraud, waste, and abuse, to do both of the following:











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             a)   Contract with an administrator, as specified, to provide  
               administrative and managerial services to a designated  
               public water system to assist the designated public water  
               system with the provision of an adequate and affordable  
               supply of safe drinking water, and



             b)   Order the designated public water system to accept  
               administrative and managerial services, including full  
               management and control, from an administrator selected by  
               the State Water Board.



          3)Defines "administrator" as a person that the State Water Board  
            has determined is competent to perform the administrative and  
            managerial services of a public water system, as specified.   
            Authorizes the State Water Board, in determining competency,  
            to consider demonstrated experience in managing and operating  
            a public water system.



          4)Authorizes an administrator to expend moneys for  
            infrastructure, operation and maintenance, and to set and  
            collect water user rates and fees. 



          5)Defines "designated public water system" as a public water  
            system that serves a disadvantaged community and that the  
            SWRCB finds consistently fails to provide an adequate and  
            affordable supply of safe drinking water.











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          6)Requires the SWRCB to meet specified critera, before it  
            determines that a public water system is a designated public  
            water system.



          7)Requires the State Water Board to make financial assistance  
            available to an administrator for a designated public water  
            system, as appropriate and to the extent that funding is  
            available.






          EXISTING LAW:    

          1)Establishes a state policy that every human being has the  
            right to safe, clean, affordable, and accessible water  
            adequate for human consumption, cooking, and sanitary  
            purposes.

          2)Establishes the federal Safe Drinking Water Act (SDWA) and  
            sets standards for drinking water quality.  

          3)Requires the SWRCB to regulate drinking water and to enforce  
            the federal SDWA.

          4)Requires the SWRCB, in administering the SDWA programs to fund  
            improvements and expansions of small community water systems,  
            to encourage the consolidation of small community water  
            systems that serve disadvantaged communities, and prioritize  
            funding for construction projects that involve the physical  
            restructuring of two or more community water systems, at least  
            one of which is a small community water system that serves a  
            disadvantaged community, into a single, consolidated system. 

          5)Authorizes the SWRCB, where a public water system or a state  








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            small water system within a disadvantaged community,  
            consistently fails to provide an adequate supply of safe  
            drinking water, to order consolidation with a receiving water  
            system. 

          6)Limits the liability of a consolidated water system,  
            wholesaler, or any other agency in the chain of distribution  
            that delivers water to a consolidated water system, as  
            specified.  
          FISCAL EFFECT:  Unknown. 


          COMMENTS:  Authorizes the SWRCB to contract with an  
          administrator to provide administrative and managerial services  
          to a designated public water system, as defined, to assist with  
          the provision of an adequate and affordable supply of safe  
          drinking water.


          1)Author's Statement: California is the 6th largest economy of  
            the world, it is unconscionable that so many Californians -  
            most especially people living in disadvantaged communities -  
            are living in Third World conditions without water.   
            California took a bold step last year by authorizing the State  
            Board to consolidate water systems that fail to deliver  
            drinkable water - and SB 552 is a tool that the State Water  
            Board may use to be more efficient.  A third party  
            administrator will bring stability to the water system and the  
            community, and long-term sustainability to the water supply  
            for disadvantaged communities.     


          2)Background:  California has a challenge providing safe  
            drinking water to all of its residents. The SWRCB is  
            responsible for the state's drinking water program and  
            estimates that 500 communities rely on public water systems  
            that do not meet drinking water standards.  We do not know  
            exactly how many Californians lack access to safe drinking  
            water on a daily basis, but it is on the order of millions of  








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            people.   Drinking water contamination disproportionally  
            affects disadvantaged communities that rely on groundwater as  
            their drinking water source.   Many small communities do not  
            have the technical, managerial, or financial capability to  
            operate what can be complex drinking water systems.  


            For many years through various means, but primarily through  
            financial incentive or prioritization, the state has  
            encouraged voluntary consolidation of public water systems.   
            SB 88 (Committee on Budget), Chapter 27, Statues of 2015, for  
            the first time, authorized the SWRCB to require certain water  
            systems that consistently fail to provide safe drinking water,  
            to consolidate with, or  receive an extension of service from,  
            another public water system.


            The SB 88 provisions that authorized public water system  
            consolidation was largely built off of recommendations in the  
            Governor's "Resilient, Affordable, Safe Drinking Water for  
            Disadvantaged Communities Framework", which was released May  
            2015.  The framework specifically laid out three steps to  
            ensure every Californian has access to an adequate supply of  
            safe water for daily needs.  The first two steps to improve  
            technical, managerial, and financial capacity and to implement  
            consolidation if improvements are not effective were part of  
            SB 88.  The third step of contracting with a third party to  
            manage the system to allow for it to be brought up to a  
            sustainable condition was not included and is embodied in this  
            bill.


            Additional approach to correct drinking water system failures:  
             This bill creates an additional tool for addressing lack of  
            safe drinking water by authorizing the SWRCB to identify  
            public water systems that are consistently unable to provide  
            sufficient safe drinking water and to contract with a  
            competent administrator.  The SWRCB notes that the use of a  
            contracted entity, would provide technical and managerial  








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            capacity, economies of scale, and other efficiencies.  


          3)Prior and Related Legislation: 


               a)     SB 1263 (Wiekowski), would enhance the process for  
                 evaluation of the creation of a new drinking water  
                 system.  To be heard in this committee on June 28, 2016.


               b)     SB 88 (Committee on Budget), Chapter 27, Statues of  
                 2015, authorizes the SWRCB to order water system  
                 consolidation or extension of services.


          1)Supporting and Support If Amended Arguments: This bill will  
            grant the SWRCB the authority to order a water system which is  
            consistently failing to provide safe drinking water to accept  
            a contract administrator.  This is an important tool for the  
            SWRCB to have.  There are many systems which may not be  
            candidates for physical consolidation but could begin  
            providing safe drinking water to their customers with new  
            management. While this could be an important and effective  
            tool there should be more clarity provided to available  
            funding, a public process, an affordability analysis, and a  
            long-term sustainability plan when an administrator is used.


          2)Opposing Arguments: This bill does not specify what entity  
            would be responsible for costs associated with the required  
            administrative and managerial services in the bill.  There is  
            a lack of specificity in the bill relating to funding of the  
            required administrative services and whether the administrator  
            would be subject to Proposition 218.  This bill does specify  
            that customers of a subsumed water system may not be charged  
            an additional fee beyond the costs of the consolidation  
            itself.  As the current structure of the bill offers no  
            funding for the predictable increase in operation,  








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            maintenance, and administrative expenses, this bill would  
            place an undue burden on the receiving water system.  Safe  
            drinking water is a right of every Californian, but it is a  
            cost that should not be paid in full by public water agencies.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Catholic Conference of Bishops


          Clean Water Action (if amended)


          Community Water Center (if amended)


          RCAC (if amended)


          Self-Help Enterprises (if amended)




          Opposition


          Association of California Water Agencies


          California Municipal Utilities Association









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          Regional Water Authority




          Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)  
          319-2096