BILL ANALYSIS Ó
SB 554
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Date of Hearing: June 14, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
SB
554 (Wolk) - As Amended January 4, 2016
SENATE VOTE: 39-0
SUBJECT: Delta levee maintenance
SUMMARY: Makes permanent the current 75% reimbursement rate for
Sacramento-San Joaquin Delta (Delta) levee maintenance costs in
excess of $1,000 per mile. Specifically, this bill:
1)Eliminates the July 1, 2018, sunset on the current
authorization of a 75% state cost-share in the Delta levee
maintenance or improvement program.
2)Eliminates the effective date for returning to a 50% state
cost-share.
3)Eliminates the July 1, 2018, sunset on advance reimbursement.
EXISTING LAW:
1)Establishes the Delta Levee Maintenance Subventions Program
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(Subventions Program) administered jointly by the Central
Valley Flood Protection Board (CVFPB) and the Department of
Water Resources (DWR) to provide reimbursement to local
agencies for a portion of the costs of maintaining or
improving project or non-project levees.
2)Since 1996, has maintained the following reimbursement rate
for the Subventions Program of:
$0 for the first $1,000 per mile of levee, and
up to 75% of eligible costs in excess of the $1,000
per mile, based on an assessment of the agency's ability
to pay.
1)On July 1, 2018, reverts the reimbursement rate for the
Subventions Program to:
$0 for the first $1,000 per mile of levee,
up to 50% of eligible costs in excess of the $1,000
per mile, based on an assessment of the agency's ability
to pay, and
caps the maximum annual reimbursement per agency at
$2 million.
1)Establishes the Delta Levees Special Flood Control Project
Program (Flood Control Project Program) to fund levee
improvements that have identifiable public benefits. Includes
the Subventions Program and the Special Flood Control Project
Program in the Flood Control Project Program.
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2)Establishes the Delta Stewardship Council (Council) to
maintain a Delta Plan that is the long-term management plan
for the Delta. Requires the Delta Plan to, among other
things, recommend priorities for state investments in levee
operation, maintenance, and improvements.
3)Requires Delta levee investments through the Subventions
Program and the Special Flood Control Project Program to be
consistent with the Delta Plan.
FISCAL EFFECT: According to the Senate Appropriations Committee,
over the past ten years, annual program funding has ranged
between $5.7 million and $16.3 million. In recent years,
funding for the program has come from voter-approved general
obligation bonds (Proposition 50, Proposition 84, and
Proposition 1E), which are repaid by the General Fund.
COMMENTS: This bill makes permanent the current 75%
reimbursement rate for Delta levee maintenance costs in excess
of $1,000 per mile.
1)Author's statement: By continuing the current cost share
formula, SB 554 ensures that Delta reclamation districts can
afford to maintain and improve Delta levees. Maintenance of
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the Delta levees is important to reduce flood risk and ensure
the Delta can continue to serve its many valuable uses - as
fertile farmland, a water conveyance, and a rich estuary
ecosystem.
2)Background: The Delta is the hub of the California water
system, and is the most valuable estuary and wetland ecosystem
on the west coast of the Americas. Much of Delta land is
subsiding such that it has been called California's sinking
heart. Most of the primary Delta is below sea level and the
central Delta is deeply subsided, resting 15 feet or more
below sea level.
There are significant state interests protected by Delta
levees including conveyance for the State Water Project and
the Central Valley Project, highways, utilities, agriculture,
recreational assets, fisheries, and wildlife.
3)Limited funds, competing priorities: There are just over
1,100 miles of levees that protect 141 Delta islands. The
majority of those levees are locally owned (non-project
levees). Since the 1970's the state has committed
approximately $700 million to levee operations, maintenance
and improvements. Recent estimates for needed Delta levee
improvements range from $1.3 billion to $3 billion. Even if
that level of investment were to occur there would will still
be a risk of levee failure in the Delta, as increasing risks
of earthquake, flood, and sea level rise are mounting and
levees on deeply subsided islands cannot reasonably be built
to withstand all risks.
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Attempts have been made to focus state investments in Delta
levees, but to date there are no clear priorities for state
spending on levees in the Delta. Additionally, the standard
to which a levee must be maintained is variable, with
uncertainty as to what is necessary to qualify for federal
disaster assistance. Discretion on how to spend state money
on Delta levees has been left to the DWR and the CVFPB. The
DWR has developed guidelines, but essentially, any agency that
has the ability to come up with financing has had their
projects funded in recent years. According to a 2012 Public
Policy Institute of California (PPIC) study and a Council
evaluation of levee investments we have not seen the highest
level of investments in levees that would best protect the
Delta and state interest, but have seen high levels of
investment in levees that have been identified as being a poor
cost benefit investment for the state.
4)Development of priorities and who should pay: In 2005, AB 1200
(Laird) required the DWR to assess the risk of Delta levee
failure and evaluate how best to address such risks. At the
time, this was consistent with the DWR's plan to develop a
Delta Risk Management Strategy (DRMS) to identify which levees
had greatest value to state interests to justify state
investment. In 2009, SB 1 x7 (Simitian), the Delta Reform
Act, became law. In part, the Delta Reform Act required the
Council to include a Delta Levees Investment Strategy (DLIS)
in its Delta Plan. The DLIS is expected to be completed
within the next calendar year.
Moving forward, there is a question of who should pay what
level for levee maintenance. The key issue is that most levee
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miles (730 miles) are privately owned. Existing law requires
local agencies applying for Subventions Program funding to
provide information on the agency's ability to pay. The last
time the ability to pay was analyzed was in 2007. That study
found that agricultural districts should qualify for a 75%
reimbursement while non-agricultural districts may have an
ability to pay a higher share.
5)Real improvements: Despite some of the questions highlighted
above, the Subventions Program has resulted in significant
improvements in the stability of Delta levees. Delta levee
failures have declined significantly since the 1980's, and in
2010, the PPIC called the Subventions Program "the most
important state investments in Delta levees".
6)Sunset date? If the desire of the committee is to maintain
the current 75% reimbursement rate until the Council adopts a
DLIS for state investments in Delta levees, some delay may be
appropriate. Even if the Council were to adopt the DLIS by
late 2016 or early 2017, it may be challenging to make any
necessary statutory changes to the Delta subventions program
before the July 1, 2018, reduction in the reimbursement rate.
Further, if the committee wishes to require a more substantive
analysis of a local agency's ability to pay, an evaluation by
the Council or another independent body should be required.
If the committee wishes to keep pressure on the Council to
develop and adopt the DLIS for State investments in Delta
flood management, extending the current 75% reimbursement rate
indefinitely might not be prudent. Further, an indefinite
extension may predetermine a level of funding across all
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levees that is inconsistent with what the DLIS would identify,
and in doing so may undermine the development of the DLIS.
It is not immediately clear what an appropriate extension
should be. However, given the Council indicates that it is
close to completion of the DLIS, a shorter extension may be
more appropriate than a longer one.
7)Prior and Related Legislation:
a) AB 1200 (Laird), Chapter 573, Statutes of 2005, required
study of levee risks and development of levee funding
priorities.
b) SB 1 x7 (Simitian), Chapter 5, Statues of the 7th
Extraordinary Session of 2009-2010, established the
Sacramento-San Joaquin Delta Reform Act requiring Delta
management to meet coequal goals of environmental and water
supply sustainability.
c) AB 798 (Wolk), Chapter 548, Statutes of 2006, provided a
4-year extension on the 75% reimbursement rate for the
Subventions Program.
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d) SB 808 (Wolk), Chapter 23, Statutes of 2010, provided a
3-year extension on the 75% reimbursement rate for the
Subventions Program.
e) SB 200 (Wolk), Chapter 549, Statutes of 2012, provided a
5-year extension on the 75% reimbursement rate for the
Subventions Program.
1)Support Arguments: The Subventions Program has dramatically
improved flood control and increased the reliability of water
conveyance in the Delta by utilizing a very efficient process
of partnering with local flood control agencies for levee
maintenance and improvements. Local agencies fund 100% of the
work up front, and the state reimburses a percentage, creating
an incentive for the local agencies to perform the work in the
most cost effective and efficient manner possible. Levees
will always require some degree of maintenance, supervision
and upkeep, just like any other element of state or local
infrastructure. Ensuring that the Subvention Program becomes
a permanent resource for local governments that partner with
state agencies is critical, appropriate, and timely.
2)Opposing Arguments: This bill provides an opportunity to
advance the beneficiaries-pay principle in the Delta with
appropriate analysis and deliberation. The Legislature's
clear intent in the 1990's was to reduce the state's financial
exposure on the Subvention's Program from 75% to 50% within 10
years. Since that time, three bills have passed to
temporarily extend the subsidy while waiting for the state to
reassess the direction it will pursue in protecting the Delta.
This bill, however, seeks to extend the higher level of
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subsidy in perpetuity, in contradiction to the rationales of
previous legislation. Prior to any further legislative action
to extend the state cost-share, an outside entity should
conduct an affordability and benefits assessment for the
Subventions Program.
REGISTERED SUPPORT/ OPPOSITION:
Support
Association of Water Agencies
Bethel Island Municipal Improvement District
California Central Valley Flood Control Association
Collinsville Levee District
Contra Costa County Board of Supervisors
Delta Counties Coalition
Delta Protection Commission
East Bay Municipal Utility District
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Reclamation District No. 3
Reclamation District No. 150
Reclamation District No. 548
Reclamation District No. 756
Reclamation District No. 799
Reclamation District No. 2025
Reclamation District No. 2026
Reclamation District No. 2028
Reclamation District No. 2029
Reclamation District No. 2041
Reclamation District No. 2060
Reclamation District No. 2065
Sacramento County Board of Supervisors
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San Joaquin County Board of Supervisors
Solano County Board of Supervisors
Solano County Farm Bureau
Oppose (unless amended )
Calleguas Municipal Water District
Cucamonga Valley Water District
Eastern Municipal Water District
Inland Empire Utilities Agency
Las Virgenes Municipal Water District
Long Beach Water Commission
Mesa Water District
Metropolitan Water District of Southern California
Upper San Gabriel Valley Municipal Water District
Walnut Valley Water District
Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)
319-2096
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