Reporting

March 28, 2014 by Justin Ewers

With water bond debate beginning to boil, three issues that must be resolved


(photo credit: Chrystian Guy)

With the drought worsening, a long, dry summer ahead, and only 90 days left on the calendar before lawmakers must decide whether to put a multi-billion water bond on the ballot, it’s no surprise that the water debate in Sacramento is beginning to boil.

A contentious Senate hearing on Tuesday over one of the 10 bond measures now moving through the Legislature revealed long-held divisions among Democrats and Republicans alike over how to invest billions in California’s aging water infrastructure, who should distribute the money, and what can be done to make all this spending transparent enough that voters will approve it.

The hearing, though, also revealed exactly where the current sources of disagreement are—and highlighted the major issues that must be resolved before a water bond can pass. Three of the biggest topics under discussion:

1. How big should the bond be?

Even as a newly-released PPIC poll shows growing awareness about the state’s dire water situation (seven times as many respondents as last year are calling drought the “most important issue” in the state), only a bare majority of likely voters say they would vote for the $11 billion bond that’s on the ballot.

The poll points to the solution already being pursued by lawmakers: 59 percent of likely voters say they would support a smaller bond. But with the June legislative deadline looming, that doesn’t leave much time to hammer out an agreement on the state’s most complex, contentious subject.

In the most recent hearing—where members of the Senate Committee on Natural Resources and Water reviewed Asm. Anthony Rendon’s $8 billion proposal—Senate Democrats, in particular, seemed content to let the overall size of the bond be determined later. Rendon’s measure was amended more than 20 times, but none of the changes concerned how much Rendon’s proposal would spend or how it was allocated among, for example, Delta projects ($1 billion), watershed protection ($1.5 billion), and clean drinking water ($1 billion). That debate seems to be on hold until the final negotiation.

2. How much money for storage—and how should the money go out?

Surface storage (i.e. dams) has long been at the center of water disagreements in California, and this year’s negotiations are no different. Still, it is becoming increasingly clear where the lines are being drawn: Republican lawmakers, with the support of stakeholders including the Association of California Water Agencies and at least one Central Valley Democrat (Asm. Henry Perea in his bill, AB 2686), believe the bond should set aside $3 billion for storage. They also want these funds to be “continuously appropriated”—meaning the money would be available for projects without further legislative action.

“Three billion for storage is realistic, and it’s fair considering what we’re going through,” GOP Sen. Anthony Cannella, author of a $9.3 billion bond proposal, said in Tuesday’s hearing, raising the specter of unemployment levels climbing to 50 percent in his San Joaquin Valley district, with California growers being forced to leave fallow 800,000 acres of farmland this year.

Most Democrats, meanwhile, prefer a much smaller amount be spent on storage. Sen. Lois Wolk, who sets aside $1.025 billion for storage in her $6.8 billion proposal, has touted projects she believes would increase water supply at lower cost—replenishing groundwater aquifers and restoring existing storage facilities. Many Democrats oppose continuously appropriating these funds—which they worry would allow the construction of large new dams. Wolk wants lawmakers to keep hold of the purse strings so they can parcel out funds to storage projects they approve of.

In this week’s hearing, Asm. Rendon proposed a novel approach—outlining a quasi-continuous appropriation for his $2.5 billion in storage that would parcel out $500 million a year for the next five years, while still allowing the Legislature to recoup the funds after three years if they hadn’t been spent. Rendon’s approach is designed to encourage regions to spend money quickly—and would make it harder for water districts to put money away while they get approval for large surface storage projects. In a sign of disagreement even among members of the same party, the proposal was amended over his opposition by Democrats on the Senate Committee on Natural Resources and Water, who returned the appropriation back to the Legislature.

A few days later, when Sen. Yee was indicted, Democrats saw their supermajority in the Senate slip even further away. The final water bond will likely need at least two Republicans to pass. That means a storage number closer to $3 billion will continue to be part of negotiations—with the exact approach for appropriating the funds still undetermined.

3. How to ensure transparency and oversight in the rest of the bond?

While the debate over using bond funds to build more dams will continue to make headlines, the truth is only about a third of the water bond is likely to go to storage projects. The rest of the funds will be distributed to clean drinking water programs, watershed restoration efforts, Delta levees and ecosystem improvements, and other regional water projects.

This week, to their credit, lawmakers began publicly grappling with the best way to maintain oversight over these funds, as well. Much of the debate in the Rendon hearing, in fact, was over how to keep “earmarks” out of the bill—which lawmakers agree is the major weakness of the current $11 billion bond—while also making sure the money gets to local water projects as quickly as possible.

With the PPIC poll showing legislative approval sagging slightly to 36 percent—and with the Sen. Yee revelations likely to send confidence in the Legislature down further—these issues have become even more important. The fate of the water bond may ultimately be determined by how transparent it is perceived to be—and how much confidence voters have the money will be wisely spent.

In a February letter to the governor and legislative leaders, the Summit was clear about its priorities, encouraging state leaders to use the bond to set statewide goals for its water supply—and then to allow regions to compete for funds through a process that rewards integrated projects that aim to achieve multiple benefits.

By and large, legislative leaders—and the administration, too—seem to agree with this approach, but discussions are ongoing about exactly how to make it a reality. On one side are a group of Senate Democrats led by Sen. Wolk, whose bond would distribute over a billion dollars in watershed restoration funds through nine state conservancies, public entities specifically designed to address multi-faceted resources issues—and that also have a strong track record in past bonds of getting the money out.

On the other are Asm. Rendon and his allies, who believe sending the money through conservancies could make the bill vulnerable to accusations of pork—especially in urban districts like Rendon’s in Southeast Los Angeles where conservancies are less active. Earlier this week, Rendon proposed creating a competitive grant process for $1.5 billion in watershed restoration projects that would require all state and local agencies, including conservancies, to compete for the funds. Over his opposition, the measure was stripped out of the bond this week by Senate Democrats, who returned the funds to conservancies.

While Rendon has promised to “fight” for his approach, there may be a policy middle ground that could improve the final bond’s chances of passage. This could include setting more clearly-defined state goals for these funds along the lines recently proposed by California Forward’s Jim Mayer: “One way [to do this] would be to specify a competitive process that allocated money based on how much water the projects will conserve, store, or deliver. It is clearly more complicated than that, but the details should be limited to further achieving the topline outcomes.”

This approach would support all of California’s diverse regions. It would help mountain watersheds like the Sierra Nevada, which are responsible for 70 percent of the state’s water supply but have received less than 2  percent of recent water bond funding. It would give a boost to valley projects supported by groups like the Nature Conservancy that are concerned about the state’s rapidly declining groundwater. It would also support integrated restoration projects in districts like Asm. Rendon’s along the lower Los Angeles River.

With the pressure on to finalize a bond, could this approach be part of a grand water compromise? In Tuesday’s hearing, Sen. Fran Pavley expressed confidence that a final deal would be struck—and that a measure would go to the ballot. “We know negotiations will occur,” Pavley said, “and we’ll resolve our differences.”

Categories: Water

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