Reporting

March 21, 2014 by Justin Ewers

Who should distribute billions for water projects—and how?


(photo credit: Preston Kemp)

Most of the recent debate over the best way to raise billions of dollars to invest in the state’s decades-old water infrastructure has focused on how much to spend—and on what. Lawmakers are publicly wrestling with what size water bond voters would support (10 different bond proposals in the Legislature range in scope from $6.8 billion to $9.2 billion). With drought worries growing, so too has the tug of war over the amount of money that should be set aside for dams and storage facilities (with bills ranging from $1.025 billion to $3 billion).

Lost amidst the sound and fury, though, is an equally important question—one that is quietly becoming a major source of disagreement inside the Capitol: Who, exactly, should be responsible for distributing the funds from one of the state’s largest-ever water bonds—and how can voters be assured they will go to the most sustainable, cost-effective projects?

This issue may come to a head Tuesday in a hearing on one of the highest-profile water bonds moving through the Legislature, a bill by Asm. Anthony Rendon (D-Lakewood) that includes what Rendon has called a “fundamentally different process” for crafting a water bond and for distributing funds in a more accountable way.

The Rendon hearing comes only a month after the regional leaders of the California Economic Summit sent a letter to the Governor and Legislature highlighting 11 opportunities, including the water bond, for the state to ensure water investments made during the drought provide relief where it is needed most, while also advancing two key principles of fiscal and environmental sustainability:

  • Regional competition: The Summit encouraged lawmakers drafting water bonds to advance the new paradigm where the state sets policy goals but allows regions to compete on a performance basis to craft sustainable strategies that deliver results—and provide the greatest return on investment.
  • Multiple benefits: The Summit also has emphasized the importance of creating incentives for the integrated approaches that are essential to advancing the triple bottom line—simultaneously protecting the environment, supporting diverse economies, and increasing opportunities for all Californians.

Retooling the water bond

So, how are the water bonds doing? All of the bills' authors, to their credit, seem to be searching for a more politically palatable way to invest in water projects than the measure they hope to replace: a controversial $11.1 billion bond already slated for the November ballot that has been criticized for the way it was drafted (in a series of closed-door meetings), what exactly is in it (more than a billion dollars in last-minute earmarks for local water projects), and how much it will cost (the price tag would make it the second-largest water bond in state history).

But while the amount they would spend varies, most of this year’s bonds would distribute funds in the traditional way. The Legislature would appropriate the dollars to state agencies and regional conservancies which would then be charged with developing “criteria” for parceling out money to specific projects. Several bills do outline a “competitive process” for a small portion of bond funds intended for storage facilities—directing the California Water Commission to “rank potential projects based on the expected return for public investment” before distributing the funds.

Still, only one proposed bond, Asm. Rendon’s AB 1331, applies these approaches in a comprehensive way to other parts of the bill—a case Rendon will be making on Tuesday before the Senate Committee on Natural Resources and Water.

Winning applause for transparency

As chair of the Assembly Committee on Water, Parks and Wildlife, Rendon earned plaudits last year for taking the unusual step of drafting a set of clearly-defined principles for his then-undrafted water bond. This policy framework was admirably clear about its objectives (protecting the Delta, reducing reliance on water imports, and restoring the health of California's watersheds, among other things) and its focus on accountability to voters (prohibiting earmarks to specific water projects).

Rendon’s current legislation, which was amended on March 18 to raise its spending on storage to $2.5 billion, has so far lived up to its billing: It avoids earmarks, and it doesn’t simply parcel out bond funds to a queue of projects with limited oversight. The legislation’s proposal to raise $1.5 billion for upgrading watershed systems also puts special emphasis on sending the money to what it calls “multibenefit” programs—projects that “address water quality and water supply issues” at the same time, for example, or that “build partnerships between the State of California and local governments near rivers.”

By outlining a set of defined state priorities, it provides a framework for the state and local agencies to partner on water projects that achieve state goals. This is true of a range of watershed appropriations, including, for example, $109 million for the Sierra Nevada and Cascades region “with a priority for the protection and restoration of watersheds that produce water for the statewide system” and $142 million for the Los Angeles region “with a priority for protection, restoration, and connectivity of the Los Angeles or San Gabriel Rivers.”

How Rendon would distribute bond funds

Unlike other proposed bonds—which would distribute these funds to a list of regional conservancies, where oversight may be more limited—Rendon proposes allowing the Legislature to disburse the funds to collaborative efforts, including conservancies, that promise to work together to achieve the “multiple benefits” the bill describes.

This departure from recent bond-funding practice has reportedly caused concern among advocates for state conservancies, but it may serve as an incentive to drive the very integrated approaches supported by the Summit—encouraging groups of local agencies, conservancies, and even private partners to join together to submit water proposals that achieve broadly-shared community goals.

Rendon’s bill could be even more complete, of course: On groundwater management—another looming issue for all of the proposed bonds—Rendon proposes requiring local agencies to submit a groundwater management plan (something that’s mostly voluntary today) in order to receive bond funds. Water experts concerned about the state’s declining aquifers have outlined several ways a water bond could be even more specific about statewide groundwater goals.

Still, with the June deadline approaching for the Legislature to put a water bond on the ballot, Rendon’s water bond is setting the bar high—and demonstrating the possibilities of a “fundamentally different process” for paying for water in California. 

Categories: Infrastructure, Water

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