BILL ANALYSIS �
AB 2238
Page 1
Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Bob Wieckowski, Chair
AB 2238 (Perea) - As Amended: April 11, 2012
SUBJECT : Public water systems: drinking water.
SUMMARY : Sets new requirements for and restrictions on, the
California Department of Public Health (CDPH) when it
administers programs to fund improvements of small community
water systems, and requires local area formation commissions
(LAFCOs) to assess drinking water and wastewater services.
Specifically, this bill :
1)Provides that it is the intent of the Legislature to encourage
LAFCOs to focus on the consolidation, merger, or extension of
public water systems, especially those located in
disadvantaged communities, by seeking financial assistance in
order to perform the necessary service reviews and other
appropriate studies.
2)Requires LAFCOs, when conducting a municipal service review
(MSR), to comprehensively assess various alternatives for
improving efficiency and affordability of infrastructure and
service delivery for drinking water and wastewater services.
3)Makes the following changes to the requirements that CDPH,
when administering Safe Drinking Water Act (SDWA) programs to
fund improvements and expansions of small community water
systems, must follow:
a) Requires CDPH to promote, instead of encourage, the
consolidation or merger of small community water systems
that serve disadvantaged communities in instances that a
consolidation or merger will help at least one of, instead
of both of, the affected agencies.
b) Requires, instead of authorizes, funding for feasibility
studies performed prior to a construction project to
include studies of the feasibility of consolidating two or
more water systems.
i) Specifies that this requirement extends to merging a
community water system with a city water system, if at
least one of the water systems is a small community water
system that serves a disadvantaged community.
ii) Authorizes CDPH to forgo this requirement if it
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makes a written determination that a consolidation or
merger is not feasible under the circumstances.
iii) Prohibits CDPH from making a determination of
infeasibility if, within the previous five calendar
years, the LAFCO conducted a study or MSR that found the
consolidation or merger feasible.
c) Adds mergers as a restructuring option that must be
considered, in addition to consolidation for funding.
d) Adds managerial consolidation and a merger of one or
more community water systems as criteria that are required
to be prioritized for construction funding.
4)Requires the Strategic Growth Council (SGC) to manage and
award financial assistance to a city, county, LAFCO, special
district, nonprofit organization, or other specified public
entity, for the preparation, planning, and implementation of a
public water system consolidation, merger, or extension of
services project for the purposes of promoting water
conservation.
a) Requires the financial assistance provided to be from
the Safe Drinking Water, Water Quality and Supply, Flood
Control, River and Coastal Protection Bond Act of 2006
(Proposition 84).
b) Requires the SGC to give priority to funding projects
proposed by an economically disadvantaged community.
5)Specifies that reimbursement to local agencies shall be made
if the Commission on State Mandates determines that this bill
contains costs mandated by the state.
6)Makes other technical and clarifying changes.
EXISTING LAW :
1)Pursuant to the federal SDWA, authorizes the United States
Environmental Protection Agency (US EPA) to set standards for
drinking water quality and to oversee the states, localities,
and water suppliers who implement those standards.
2)Pursuant to the California SDWA (Health and Safety Code (HSC)
� 116275 et seq.), requires CDPH to regulate drinking water
and to enforce the federal SDWA and other regulations.
3)Requires CDPH, in administering SDWA programs to fund
improvements and expansions of small community water systems,
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to do all of the following:
a) Give priority to funding projects in disadvantaged
communities;
b) Encourage the consolidation of small community water
systems that serve disadvantaged communities in instances
where consolidation will help the affected agencies and the
state to meet all of the following goals:
i) Improvement in the quality of water delivered;
ii) Improvement in the reliability of water delivery;
and,
iii) Reduction in the cost of drinking water for
ratepayers.
c) Allow funding for feasibility studies performed prior to
a construction project to include studies of the
feasibility of consolidating two or more community water
systems, at least one of which is a small community water
system that serves a disadvantaged community; and,
d) In instances where it is shown that small community
water system consolidation will further specified goals,
give priority to funding 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.
4)Pursuant to the Safe Drinking Water, Water Quality and Supply,
Flood Control, River and Coastal Protection Bond Act of 2006
(Proposition 84), as approved by the voters, provides funding
for safe drinking water, water quality and supply, flood
control, natural resource protection, and park improvements.
5)Requires LAFCOs, in order to prepare and update spheres of
influence, to conduct a service review of the municipal
services provided in the appropriate area designated by the
LAFCO, and to prepare a written statement of its
determinations, including infrastructure needs or deficiencies
related to sewers and municipal and industrial water in
specified disadvantaged, unincorporated communities.
6)Requires LAFCOs to comprehensively review all of the agencies
that provide the identified service or services within the
designated geographic area and authorizes LAFCOs to assess
various alternatives for improving efficiency and
affordability of infrastructure and service delivery within
and contiguous to the sphere of influence, including, but not
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limited to, the consolidation of governmental agencies.
7)Authorizes LAFCOs, when conducting a service review, to
include a review of whether the agencies under review,
including any public water system, are in compliance with the
California SDWA.
8)Establishes the SGC and requires the SGC to identify and
review activities and funding programs of member state
agencies that may be coordinated to improve air and water
quality, improve natural resource protection, increase the
availability of affordable housing, improve transportation,
meet the goals of the California Global Warming Solutions Act
of 2006, encourage sustainable land use planning, and
revitalize urban and community centers in a sustainable
manner. Requires the SGC to manage and award grants and loans
to support the planning and development of sustainable
communities.
FISCAL EFFECT : Unknown.
COMMENTS :
Need for the bill : According to the author, "There are hundreds
of thousands of Californians that live in disadvantaged
communities without the most basic features of a safe and
healthy environment -- clean and affordable drinking water,
adequate wastewater treatment or stormwater drainage. In
particular, this issue disproportionately affects families that
live in disadvantaged, unincorporated communities.... This
results in disadvantaged economically families being at risk of
health issues (e.g. blue baby syndrome, cancer) related to
exposure of contaminated water and are burdened by the
additional costs of buying bottled water to cook and drink.
Families with an average �median household income] of $21,000
are paying $25-$30 a month for bottled water, in addition to $54
or more a month for their contaminated water?.
This bill aims to increase efficiency of service delivery and
access to clean and affordable water and wastewater services by
promoting consolidation or extension of infrastructure and
managerial consolidation of service provision when consolidation
and service extension improve efficiency, affordability and
access to the basic elements of a healthy and sustainable
community. Specifically, it would improve LAFCOs ability to
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identify and study opportunities for consolidation and service
extension and it would ensure that funding programs administered
to promote clean and affordable drinking water promote
consolidation and service extension when those activities
further the goals of safe and affordable drinking water in
disadvantaged communities."
CDPH consolidation requirements : AB 783 (Arambula), Chapter
614, Statutes of 2007, requires CDPH to prioritize funding of
water projects in disadvantaged communities and directs CDPH to
encourage, provide funds for studies on, and prioritize funding
for projects which consolidate small public water systems in
certain situations. CDPH's "Guidelines for Consolidation
Projects" states, "Funding for consolidation projects is both
authorized and encouraged by the SDWSRF program. Consistent
with the SDWSRF Intended Use Plan, funds may be used for
consolidation projects that improve the safety of public water
supplies by enabling noncompliant water systems lacking the
necessary Technical, Managerial, and Financial (TMF) capacity to
achieve compliance with safe drinking water standards by
consolidating with another water system that is in compliance."
The CDPH then outlines in detail requirements and qualifications
for SDWSRF consolidation funding in order to assist applicants.
AB 2238 alters the requirements for drinking water system
consolidation funding delineated by AB 783. For example, AB
2238 appears to authorize funding for consolidation when the
project helps only one of the affected agencies to meet the goal
of improved water quality, reliability or affordability.
Current law requires that funding be made available for projects
in which the affected agencies will be helped to reach these
goals. If this provision in AB 2238 is consistent with SDWA
requirements, then adding qualifications for this type of
disbursement, such as requiring that the project is the most
efficient and effective means of solving a regional drinking
water problem, should be considered.
AB 2238 additionally requires that feasibility studies of
drinking water projects include studies of the feasibility of
the consolidation of drinking water systems, unless CDPH makes a
written determination that consolidation is infeasible. The
bill then prohibits CDPH from making a determination of
infeasibility if a LAFCO has determined that consolidation is a
feasible option.
CDPH is the agency charged with assessing eligibility and
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determining how best to disburse SDWSRF and other safe drinking
water funding. Preventing CDPH from determining whether a
consolidation is a feasible option seems counter to the most
efficient and effective means of using public funding to improve
drinking water issues. Therefore, the provision prohibiting
CDPH from making a determination of feasibility should be
amended to instead require CDPH to consider LAFCO's findings.
Additionally, AB 2238 does not specify what findings of
feasibility a LAFCO must make in order for its findings to
inform CDPH's funding process. Typically, CPDH assesses
technical, managerial and financial (TMF) capacity when
determining whether a project is feasible. Therefore, the
requirement that CDPH consider LAFCO's finding of feasibility
should be contingent upon whether TMF capacity is included in
the finding.
LAFCO responsibilities : Current LAFCO law specifies various
ways that special districts and other agencies can be
reorganized and modified, including consolidation, dissolution,
a merger, or establishment of a subsidiary district. MSRs,
which are a comprehensive study designed to better inform LAFCO,
local agencies, and the community about the provision of
municipal services, were added to LAFCO's mandate with the
passage of the Cortese-Knox-Hertzberg Act in 2000. The MSR is a
prerequisite to a determination of sphere of influence, which is
a planning boundary outside of an agency's legal boundary that
designates the agency's probable future boundary and service
area.
New duties were mandated for LAFCOs, cities, and counties by SB
244 (Wolk), Chapter 513, Statutes of 2011. Provisions in SB
244, which took effect January 1, 2012, include requiring the
LAFCO, in determining the sphere of influence of each local
agency, to consider infrastructure needs related to municipal
and industrial water in disadvantaged unincorporated
communities. It also authorized LAFCOs to assess various
alternatives for improving efficiency and affordability of
infrastructure and service delivery, including, but not limited
to, the consolidation of governmental agencies. AB 2238
requires LAFCOs to comprehensively assess various alternatives
for improving efficiency and affordability of infrastructure and
service delivery for drinking water and wastewater services. It
is unclear whether the requirements on LAFCOs in AB 2238 are
duplicative of the mandates recently imposed by SB 244.
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Strategic Growth Council (SGC) requirements : SB 732
(Steinberg), Chapter 729, Statutes of 2008, created the SCG, a
cabinet level committee, within the provisions of Proposition
84. The SCG is tasked with coordinating the activities of
member state agencies to provide, fund, and distribute data and
information to local governments and regional agencies that will
assist in developing and planning sustainable communities and to
manage and award grants and loans to support the planning and
development of sustainable communities.
This bill authorizes several local government entities,
including LAFCOs, to receive Proposition 84 funds for the
preparation, planning, and implementation of a public water
system consolidation, merger, or extension of services project
for the purposes of promoting water conservation. Currently, it
appears that LAFCOs have to apply for Proposition 84 funds
through another entity, such as a metropolitan planning
organization.
Arguments in support : The California Rural Legal Assistance
Foundation, PolicyLink, Clean Water Action, and Community Water
Center contend that, "Hundreds of thousands of people throughout
the state cannot use the tap water in their homes for drinking
or cooking due to contaminated groundwater?. Many more
communities are on the edge, forced to pay for expensive
treatment or close wells, limiting local drinking water supplies
and creating additional barriers to local economic development.
AB 2238 attempts to address these issues by requiring the CDPH
to promote consolidation of small community water systems that
serve disadvantaged communities and prioritize funding for these
projects, when they improve efficiency, affordability and access
to the basic elements of a healthy and sustainable community."
Arguments in opposition : The California Association of Local
Agency Formation Commissions argues, "Nearly half of the
thousands of Municipal Service Reviews conducted by LAFCO
include water or wastewater agencies. LAFCOs do not have the
resources or expertise to study reorganizations in all of these
cases and would require the retention of consultants. There is
no funding for these studies and therefore the costs would be
passed on to all counties, cities and special districts. More
importantly, since LAFCO is powerless to implement any study,
our experience is that the affected agencies will resist any
consolidation suggestion."
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The Association of California Water Agencies (ACWA) writes, "AB
2238 would add a new unfunded mandate that would require a LAFCO
to comprehensively assess various alternatives for improving
efficiency and affordability of infrastructure and service
delivery for drinking water and wastewater services. �SB 244]
newly authorizes the review that this bill would mandate.
Requiring this review in every instance for water and wastewater
would be a misuse of limited resources."
Related legislation :
1)AB 1669 (Perea), establishes the Nitrate at Risk Area Fund for
the purposes of developing and implementing sustainable and
affordable solutions for disadvantaged communities in areas
reliant on nitrate-contaminated groundwater as their source of
drinking water and requires the SWRCB to identify those areas.
AB 1669 is scheduled for hearing in the Assembly
Environmental Safety and Toxic Materials Committee (ESTM)
Committee on April 24, 2012.
2)AB 2208 (Perea), authorizes the CDPH, when implementing the
SDWSRF, to consolidate multiple community projects to meet
safe drinking water standards. AB 2208 is scheduled for
hearing in the Assembly ESTM Committee on April 24, 2012.
3)AB 2334 (Fong), requires the Department of Water Resources to
analyze drinking water and wastewater services affordability
for low-income residents. AB 2334 is scheduled for hearing in
the Assembly ESTM Committee on April 24, 2012.
4)AB 2529 (Wieckowski), authorizes the CDPH to adopt interim
regulations and take other actions to expedite the process of
providing funds for drinking water projects, especially to
severely disadvantaged communities. AB 2529 is scheduled for
hearing in the Assembly ESTM Committee on April 24, 2012.
Suggested Committee amendments : The Committee may wish to
consider amending the bill as follows:
1) Delete the addition of "merger" to the Health and Safety
Code.
2) Clarify that the requirement in line 39 on page 5 is for
the content of the feasibility study, not for the funding
itself. (Page 5, line 39)
3) Clarify that the feasibility study must include the
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consolidation of two or more public water systems. (Page
6, line 2)
4) Require CDPH to consider a LAFCOs finding of
feasibility, if a LAFCO completed such a study within the
previous five years, during CDPH's assessment of the
feasibility of a project. Delete the provision that
prohibits CDPH from making a determination of infeasibility
if a LAFCO found consolidation feasible. (Page 6, line 7)
5) Clarify that funding for construction projects that
consolidate two or more community water systems shall be
prioritized. (Page 6, line 13)
6) Ensure consistency with existing definitions of
"disadvantaged community." (Page 8, line 28)
Dual referral : This bill was heard by the Assembly Committee on
Local Government on April 14, 2012, and passed on a 6 - 3 vote.
REGISTERED SUPPORT / OPPOSITION :
Support:
California Rural Legal Assistance Foundation (sponsor)
Clean Water Action
Community Water Center
PolicyLink
Opposition:
Association of California Water Agencies (unless amended)
California Association of Local Agency Formation Commissions
California Special Districts Association (unless amended)
Regional Council of Rural Counties
Tuolumne Utilities District
Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916)
319-3965