Major California Water Deal Could Come as Early as Wednesday

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Outlines of a Possible Agreement Beginning to Emerge

No one knows for sure whether a massive multi-billion dollar deal will come together quickly–perhaps by Wednesday–in the special session of the California legislature that is now in session in Sacramento. If they do know, they are not talking.

If agreement is reached and takes place next week, even with the promise that there will be hearings in both policy and fiscal committees before a floor vote, this issue which has such profound implications for the state of California could be done in a day or less, with most of the critical discussions taking place in the closed door caucuses of both parties behind closed doors.

Whatever is passed will have bonds–most probably in the $5 to $6 billion range–which must be approved by the voters as a “general obligation bond” ballot measure–unless a “revenue bond” backed by anticipated payments of those using water is part of the deal, which does not appear likely. General obligation bonds are paid out of the state’s general fund over a period of years and are the garden variety used for most infrastructure of long lasting effect.

The pressure is there to act quickly because of the September 27, 2007 deadline for any bond propositions on the February primary ballot placed there by the legislature to make it on the ballot. While that deadline has been known to slip a bit on past measures including bonds–and as part of the Elections Code, can be modified by action of the legislature and Governor–there are practical constraints involving preparation of the ballot, arguments pro and con in the pamphlet on the election, and other logistical but important details.

On top of that, many legislators are going on trips abroad, some of which have been planned for some time and involve, at least allegedly fact finding on state related issues of interest to the legislator. On Thursday for instance, Senate Republican leader Ackerman is scheduled to go to Brazil. He is not alone–a number of legislators are scheduled to go to China. Hence the focus on Wednesday. Legislators are on a “24 hour call,” meaning that they must return to Sacramento within a day of notification by the leader of their house that a session is being convened.

The outlines of a deal are beginning to emerge between what the Republican legislators want–which emphasize dams and water storage–and what most Democrats and environmentalists want–protections for the fragile Delta and other ecosystems in the state, underground storage and cleanup of aquifers below some of the areas that are demanding the water.

The Senate is taking the lead. SB 1XX, (since the water session is the second special session, all bills introduced in it have a double “X”, not to be confused with another liquid, beer, or matters not fit for a family site such as this) introduced by Senate President pro Tem Don Perata, contains the elements of what he has been talking about for some months. It is called the “Water Supply Reliability Bond” and is pegged at $5.4 billion in its current iteration. It is the only bill, so far introduced in the special session on water. The Governor’s proposal, at least as it was made long before the special session, can be found in SB 59 (Cogdill), left over from the regular session.

In addition, the Governor has on his desk from the regular session, SB 1002 (Perata) which would put to work immediately $611 million in bond funds already approved by the voters in Propositions 1E and 84 on last November’s ballot.

Out of SB 1XX, $2 billion of this bond would go for “water supply reliability projects.” Another %1.4 billion would go to Delta restoration and operation. A final $1 billion would go to regional projects to resolve conflicts with water supply and water quality.

You will not find in this bill the word “dam” or the phrase “peripheral canal.” It is crafted as if it was a camel being put through the eye of a needle–without specific projects and preferred mechanisms for accomplishing its goals–in large part due to the fact that it will take a two-thirds vote for the legislature to pass any bond measure for the ballot. (Camels having water in their humps and traveling through the desert seemed an apt metaphor–although charting a midway course between Scylla and Charybdis also seemed appropriate.)

The principles and goals of the bill are set forth in it, and include recitation of the following:

• Growing population and a shifting hydrology due to climate change and other factors are creating new pressures on California’s water supply system.

• The Sacramento-San Joaquin River Delta is broken and cannot reliably meet any of its principle beneficial uses.

• New investments to improve water supply reliability must improve conditions in the Delta and support the ultimate conveyance and restoration choices made by Legislature and Governor for the Delta.

• Emphasis should be regional solutions that provide quick, certain, reliable new water supply.

Out of the first pot of $2 billion, which is appropriated to the Department of Water Resources of the state, grants will be made for projects to improve water supply reliability. These funds will be divided regionally. While not mentioned specifically, eligible projects under the broad language of the bill will include the following:

• Constructing new dams and reservoirs
• Raising or replacing existing dams
• Implementing new or expanding existing groundwater storage or conjunctive use projects.
• Implementing groundwater cleanup projects that provide or restore usable water supply or groundwater storage.
• Reclamation, recycling, desalination facilities, and
• Urban or agricultural water use efficiency projects.

Grants are required to be competitive within each region. Applicants within a region may join together to propose joint projects with other regions. Projects should be scored and ranked for funding using the following criteria:

• Improvement in water supply reliability for the region.
• Multiple benefits (new supply, water quality improvement, ecosystem improvement).
• Cost-effectiveness
• Time to full operation
• Demonstrated feasibility
• Local support, participation, and consistency with local water plans
• Statewide benefits

There is a matching requirement. The state will put up 50% of the cost of any project and localities will fund the remaining 50%.

The second pot of $2.4 billion for Delta restoration and operation is divided as follows:

• $1 billion in GO Bonds for restoring delta infrastructure to protect water supply.

• $1 .4 billion in GO Bonds for Delta ecosystem restoration projects consistent with preferred alternative.

These are needed to protect the Delta, the largest estuary on the west coast of the United States, with major environmental requirements from recent state and federal courts and the importance of the Delta to water used for drinking and other purposes throughout the state by millions of Californians.

Major reports have been released this year on the Delta and the steps needed to maintain it in the face of global warming which is likely to cause the threat of greater salt water intrusion. The Governor has a report from a “blue ribbon panel” that he commissioned which will be released. The science here and the politics of the Delta are quite complex and we have had many articles in the California Progress Report published.

The direction of legislation and administrative action on the Delta, especially in the context of these court decisions and the requirements of the California and Federal Endangered Species Acts, will hopefully be better known by the time this part of the bond measure reaches the ballot for the voters to decide.

There is a feeling amongst some water experts in Sacramento that some of the water districts in Southern California may be becoming a bit more enlightened, perhaps even ahead of the politicians, in wanting to reduce their reliance on the Delta and other water supplies 400 miles to the north. Clean up of vast underground aquifers that can store water closer to where the demand is for its use may be the direction where they will be going and may result in better management of water. While hidden underground and not having the same visual appeal of dams and reservoirs, there is less evaporation and loss of the water–and this may be the direction of plans funded under the other parts of this bond–but they are related to and will have an impact on how the Delta is treated.

The Delta also washes out the San Francisco area bay, which is also an important consideration.

The last $1 billion for regional projects to resolve conflicts with water supply and water quality is designed for projects throughout the state, including:

• Klamath River, where there has been a major dispute between native peoples, fishermen, and farmers

• Sacramento

• Los Angeles

• Coastal rivers (e.g. Russian, Eel, Carmel)

• Others, including San Joaquin Santa Ana, and even the Salton Sea.

A Conclusion, If We Ever Have One

In all of this there are significant questions as to whether the users of the water should pay for it, what the state wide important issues are versus the ones of local or regional scope, what the “public trust benefits” are in these allocations and uses, and other public policy decisions which will affect future California generations and the earth. SB 1XX in whatever form it may pass in, or any other bond measure, will probably of necessity be the vessel for the funding with important decisions to be made in the future as to specifics.

The fights on this issue will not go away. More than a century ago, Mark Twain said: “Whiskey is for drinking; water is for fighting over.” As others have noted, he also said: “I’ve seen a heap of trouble in my life and most of it never came to pass.” We’ll see what the legislature passes, when and if it does. It appears that Senate Democrats and Republicans are close to a deal–and the Assembly must also approve any bill and its members will have their own questions.

Stay tuned on this one, with an ear close to the ground. The sounds of water gushing may, or may not, remind you of the movie Chinatown.

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