BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 552|
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UNFINISHED BUSINESS
Bill No: SB 552
Author: Wolk (D)
Amended: 8/19/16
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 6-0, 4/29/15
AYES: Wieckowski, Gaines, Hill, Jackson, Leno, Pavley
NO VOTE RECORDED: Bates
SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Bates, Nielsen
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-2, 8/26/16 (Pursuant
to Senate Rule 29.10)
AYES: Wieckowski, Hill, Jackson, Leno, Pavley
NOES: Gaines, Bates
SENATE FLOOR: 31-5, 6/1/15
AYES: Allen, Beall, Berryhill, Block, Cannella, De León,
Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg,
Hill, Hueso, Jackson, Lara, Leno, Leyva, Liu, McGuire,
Mendoza, Mitchell, Monning, Nguyen, Pan, Pavley, Roth, Vidak,
Wieckowski, Wolk
NOES: Anderson, Fuller, Moorlach, Morrell, Stone
NO VOTE RECORDED: Bates, Huff, Nielsen, Runner
ASSEMBLY FLOOR: 50-28, 8/23/16 - See last page for vote
SUBJECT: Public water systems: disadvantaged communities:
consolidation or extension of service:
administrative and managerial services
SOURCE: State Water Resources Control Board
SB 552
Page 2
DIGEST: This bill 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.
Assembly Amendments 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.
ANALYSIS:
Existing law, under the California Safe Drinking Water Act,
1) Requires 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.
SB 552
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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, from an
administrator selected by SWRCB.
SB 552
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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.
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12)Exempts a charter city, charter county, or charter city and
county from provisions that authorize SWRCB to contract with
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 (Assembly Budget
Committee) and SB 839 (Senate Budget and Fiscal Review
Committee), 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.
SB 552
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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.
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 (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
incorporation of the program into SWRCB.
2) The Water Quality, Supply, and Infrastructure Improvement
Act of 2014 (Proposition 1)
Proposition 1, approved by the voters in November, 2014,
authorizes $7.12 billion in general obligation bonds for
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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.
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.
SB 552
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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, 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.
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
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
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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
would also provide transparency and avoid fraud, waste, and
abuse in the provision of these services.
Related/Prior Legislation
SB 552
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SB 1263 (Wieckowski) enhances the process for evaluation of the
creation of a new drinking water system.
SB 88 (Committee on Budget, Chapter 27, Statutes of 2015)
authorized the SWRCB to order water system consolidation or
extension of services.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, this bill
has unknown, potentially significant costs, depending upon the
number of public water systems placed under the control of, or
provided assistance by, an administrator, as well as the extent
and duration of the assistance. This bill does not identify a
funding source.
SUPPORT: (Verified8/24/16)
State Water Resources Control Board (source)
California Catholic Conference, Inc.
California League of Conservation Voters
Clean Water Action
Community Water Center
Leadership Counsel for Justice and Accountability
Rural Community Assistance Corporation
Sierra Club California
Self-Help Enterprises
OPPOSITION: (Verified8/24/16)
Association of California Water Agencies
California Municipal Utilities Association
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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."
ASSEMBLY FLOOR: 50-28, 8/23/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Daly, Dodd, Eggman, Cristina Garcia, Eduardo Garcia,
Gatto, Gipson, Gomez, Gonzalez, Gordon, Roger Hernández,
Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty,
Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas,
Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber,
Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper,
Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes,
Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner,
Waldron, Wilk
SB 552
Page 12
NO VOTE RECORDED: Frazier, Gray
Prepared by:Rachel Machi Wagoner / E.Q. / (916) 651-4108
8/26/16 14:26:51
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