BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 552
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|Author: |Wolk |
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|Version: |8/19/2016 |Hearing |8/26/2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Rachel Machi Wagoner |
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SUBJECT: Public water systems: disadvantaged communities:
consolidation or extension of service: administrative and
managerial services.
ANALYSIS:
Existing law, under the California Safe Drinking Water Act,
1) Requires the State Water Resources Control Board (SWRCB) to
administer provisions relating to the regulation of drinking
water to protect public health, including, but not limited
to, conducting research, studies, and demonstration programs
relating to the provision of a dependable, safe supply of
drinking water, enforcing the federal Safe Drinking Water
Act, adoption of enforcement regulations, and conducting
studies and investigations to assess the quality of water in
domestic water supplies.
2) Requires SWRCB to ensure that all public water systems are
operated in compliance with the act.
3) Authorizes SWRCB, where a public water system or a state
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. Provides that the consolidation may be physical or
operational.
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This bill: Authorizes 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)Adds definitions and makes clarifying and conforming changes
to water system consolidation statute.
2)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.
3)Prohibits, in the case of an ordered consolidation, fees or
charges imposed on a customer of a subsumed water system from
exceeding the cost of consolidating the water system with a
receiving system or the extension of service to the area.
4)Authorizes SWRCB, in specified circumstances, to do both of
the following:
a) Contract with an administrator to provide administrative
and managerial services to a designated public water system
to assist 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
SWRCB.
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5)Requires SWRCB to meet specified criteria before it determines
that a public water system is a designated public water
system.
6)Requires SWRCB to make financial assistance available to an
administrator for a designated public water system, as
appropriate and to the extent that funding is available.
7)Authorizes an administrator to expend available moneys for
capital infrastructure improvements; set and collect user
water rates and fees; and, expend available moneys for
operation and maintenance costs of the designated public water
system.
8)Requires SWRCB to work with the administrator and the
communities served by the designated public water system to
develop adequate technical, managerial, and financial capacity
to deliver safe drinking water so that the services of the
administrator are no longer necessary.
9)Provides that a designated public water system is not
responsible for any costs associated with an administrator.
10) Provides that administrative and managerial contracts for
consolidations are exempt from the state acquisition of goods
and services statute and may be awarded on a noncompetitive
bid basis.
11) Provides that a local government that sets water rates in
accordance with Proposition 218, as approved by the voters on
November 5, 1996, shall be deemed to be providing affordable
water and would not be subject to administrative or managerial
services by an administrator contracted by SWRCB due to lack
of affordability.
12) Exempts a charter city, charter county, or charter city and
county from provisions that authorize SWRCB to contract with
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an administrator to provide administrative and managerial
services to a designated public water system.
13) Incorporates language to avoid chaptering conflicts with the
Resources Budget trailer bills, AB 1611 and SB 839, both of
the current legislative session.
Background
1)Transfer of the Drinking Water Program.
SB 861 (Committee on Budget and Fiscal Review), Chapter 35,
Statutes of 2014, transferred the Drinking Water Program from
the California Department of Public Health (DPH) to SWRCB,
giving SWRCB primary enforcement authority (primacy) to
enforce federal and state safe drinking water acts, and is
responsible for the regulatory oversight of about 8,000
public water systems throughout the state.
The 2014-15 Budget Act and SB 861 transferred $200.3 million
($5 million General Fund) and 291.2 positions for the
administration of the Drinking Water Program from DPH to
SWRCB.
The goal of Transferring the Drinking Water Program was to
achieve the following objectives:
Establish a single water quality agency to
enhance accountability for water quality issues.
Better provide comprehensive technical and
financial assistance to help communities, especially
small disadvantaged communities, address an array of
challenges related to drinking water, wastewater,
water recycling, pollution, desalination, and
stormwater.
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Improve the efficiency and effectiveness of
drinking water, groundwater, water recycling, and
water quality programs.
1)Safe Drinking Water Plan for California.
In 1993, the California Department of Health Services (DHS)
(now DPH) submitted to the Legislature the report entitled,
"Drinking Water into the 21st Century: Safe Drinking Water
Plan for California" (1993 Plan). In 1996, the Legislature
enacted SB 1307 (Calderon), Chapter 755, Statutes of 1996,
requiring a periodic update of the original Plan.
DPH assembled a team of experts that conducted extensive
reviews and analyses, resulting in a draft plan that included
an overview of drinking water regulation, reviews and plans
for drinking water quality/monitoring and threats, treatment
technologies, funding aspects and financial assistance, and a
focus on the challenges faced by small drinking water
systems.
Following the July 1, 2014 transition of the Drinking Water
Program to the SWRCB, the draft plan's recommendations and
implementation plan has been enhanced based on the synergies
and resources resulting from incorporation of the program
into SWRCB.
The Safe Drinking Water Plan for California includes SWRCB's
assessment of the overall quality of the state's drinking
water, the identification of specific water quality problems,
an analysis of the known and potential health risks that may
be associated with drinking water contamination in
California, and specific recommendations to improve drinking
water quality.
2)The Water Quality, Supply, and Infrastructure Improvement Act
of 2014 (Proposition 1).
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Proposition 1, approved by the voters in November, 2014,
authorizes $7.12 billion in general obligation bonds for
state water supply infrastructure projects, such as public
water system improvements, surface and groundwater storage,
drinking water protection, water recycling and advanced water
treatment technology, water supply management and conveyance,
wastewater treatment, drought relief, emergency water
supplies, and ecosystem and watershed protection and
restoration.
a) Clean, Safe and Reliable Drinking Water. Proposition 1
authorizes $520 million for expenditures, grants and loans
for projects that improve water quality or help provide
clean, safe, and reliable drinking water to all
Californians and provides that the projects eligible for
funding pursuant to this section shall help improve water
quality for a beneficial use. The purposes of this section
are to:
Reduce contaminants in drinking water
supplies regardless of the source of the water or
the contamination.
Assess and prioritize the risk of
contamination to drinking water supplies.
Address the critical and immediate needs
of disadvantaged, rural, or small communities that
suffer from contaminated drinking water supplies,
including, but not limited to, projects that
address a public health emergency.
Leverage other private, federal, state,
and local drinking water quality and wastewater
treatment funds.
Reduce contaminants in discharges to, and
improve the quality of, waters of the state.
Prevent further contamination of drinking
water supplies.
Provide disadvantaged communities with
public drinking water infrastructure that provides
clean, safe, and reliable drinking water supplies
that the community can sustain over the long term.
Ensure access to clean, safe, reliable,
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and affordable drinking water for California's
communities.
Meet primary and secondary safe drinking
water standards or remove contaminants identified
by the state or federal government for development
of a primary or secondary drinking water standard.
The funds are to be allocated as follows:
i) $260 million shall be available for deposit into the
State Water Pollution Control Revolving Fund Small
Community Grant Fund for grants for wastewater treatment
projects. Priority shall be given to projects that serve
disadvantaged communities and severely disadvantaged
communities, and to projects that address public health
hazards. Projects may include, but not be limited to,
projects that identify, plan, design, and implement
regional mechanisms to consolidate wastewater systems or
provide affordable treatment technologies.
ii) $260 million shall be available for grants and loans
for public water system infrastructure improvements and
related actions to meet safe drinking water standards,
ensure affordable drinking water, or both. Priority
shall be given to projects that provide treatment for
contamination or access to an alternate drinking water
source or sources for small community water systems or
state small water systems in disadvantaged communities
whose drinking water source is impaired by chemical and
nitrate contaminants and other health hazards identified
by SWRCB.
iii) Specifies that at least 10% of the funds must be
allocated for severely disadvantaged communities and up
to 15% of the funds must be allocated for technical
assistance to disadvantaged communities.
Comments
1) Purpose of Bill. According to the author, "This bill would
authorize the State Water Resources Control Board to require
public water systems that serve disadvantaged communities and
that consistently fail to provide an adequate and affordable
source of safe drinking water, to obtain administrative and
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managerial services from a third party administrator,
selected by the State Water Board. The bill also provides
clean-up language to SB 88 (Budget and Fiscal Review
Committee), Chapter 27, Statutes of 2015, trailer bill that
permits the state Water Board to order water system
consolidation or extension of services."
According to SWRCB, for common sources of drinking water
contamination, such as arsenic and nitrates, expensive
systems must be installed and operated to treat the water to
meet drinking water standards. In many cases, technological
advances have not yet been sufficient to make such treatment
systems affordable, especially to small, disadvantaged
communities. In addition, many small disadvantaged
communities do not have the technical, managerial, or
financial capability to operate what are sometimes complex
drinking water systems. Disadvantaged communities also often
lack the rate base to pay for operation and maintenance
costs, meaning that they are effectively prohibited from
accessing capital improvement funding that requires
demonstration of ability to fund such costs.
SWRCB maintains that consolidating public water systems and
extending service from existing public water systems to
communities and areas which currently rely on
under-performing or failing small water systems, as well as
private wells, reduces costs and improves reliability.
Consolidation does this by extending costs to a larger pool
of ratepayers.
2) New tools for addressing drinking water system failures: In
addition to the consolidation authority provided by SB 88,
this bill would give SWRCB another tool to address the
systemic issues affecting public water systems serving small,
disadvantaged communities. This bill would authorize SWRCB
to identify public water systems that are consistently unable
to provide an adequate and affordable supply of safe drinking
water and, once funding is available, to then contract with a
competent administrator to provide managerial and technical
expertise to that system. SWRCB notes that the use of a
contracted entity, in cases where public water systems have
proven inadequate, would provide technical and managerial
capacity, economies of scale, and other efficiencies such as
web-based operating systems. The use of a contracted entity
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would also provide transparency and avoid fraud, waste, and
abuse in the provision of these services.
3) Referral to the Committee pursuant to Senate Rule 29.10. SB
552 was originally introduced by Senator Wolk on February 26,
2015, as a measure to require, by January 1, 2017, SWRCB to
develop a report identifying specific funding and enforcement
mechanisms necessary to ensure disadvantaged communities have
water systems that are in compliance with state and federal
drinking water standards.
On July 7, 2015, Assembly amendments amended the bill to
authorize 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. The
measure passed the Assembly Floor on August 23, 2016 by a
vote of 50-28.
Consistent with Senate Rule 29.10 the Senate Rules Committee
has referred the amended bill to the Senate Environmental
Quality Committee for a hearing of the Assembly amendments.
Related/Prior Legislation
SB 1263 (Wieckowski) would enhance the process for evaluation of
the creation of a new drinking water system.
SB 88 (Committee on Budget, Chapter 27, Statutes of 2015)
authorizes the SWRCB to order water system consolidation or
extension of services.
SOURCE: California State Water Resources Control
Board
SUPPORT:
California Catholic Conference, Inc.
California League of Conservation Voters
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Clean Water Action
Community Water Center
Leadership Counsel for Justice and Accountability
Rural Community Assistance Corporation (RCAC)
Sierra Club California
Self-Help Enterprises
OPPOSITION:
Association of California Water Agencies
California Municipal Utilities Association
Regional Water Authority
ARGUMENTS IN
SUPPORT:1) Supporters argue that 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."
ARGUMENTS IN
OPPOSITION: The opposition states that it is concerned "with
the lack of specificity related to funding for the
administrative and managerial consolidations that are outlined
in the bill including whether the administrator would be subject
to Proposition 218. SB 552 not only creates uncertainties
associated with the initial consolidation but does not include
sustainable provisions for the continued operations and
maintenance costs of the designated system, potentially shifting
costs to ratepayers in the receiving water systems."
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