Water reform package moving forward, but conflicts remain

The promise of a water deal moved closer this week as a diverse coalition of agricultural, urban and environmental groups rallied behind a policy proposal authored by Senate leader Darrell Steinberg, D-Sacramento. But Republicans balked at the measure, citing concerns over how the bill would impact small farmers.  

What it all means for those hoping for a comprehensive water package is unclear. The Steinberg and Assembly GOP proposals only deal with changes in water policy. They do not address the other major part of these negotiations – a bond that would have to be put before voters to pay for new water storage and infrastructure projects.

Democrats and Republicans introduced separate water bond proposals Wednesday.
In addition to the intricate policy details, politics has complicated the water talks throughout this months-long process. With the state’s budget facing what Assembly GOP leader Sam Blakeslee, R-San Luis Obispo, said could be a $20 billion deficit next year, taking on more debt to pay for water storage and upgrades may be a tough sell to voters.

Republicans are aware of those political realities, and want to ensure that the changes to state water policy – which do not need to go before voter, and can be passed through the Legislature on a majority vote – are still good for the state, with or without a water bond.

Republicans seek stand-alone policy.
“We want to make sure this policy stands on its own,” said Assembly Republican leader Sam Blakeslee. Blakeslee noted he wants to break from the conventional wisdom about water negotiations, in which Democrats would get changes they want in water policy in exchange for a water bond that would ensure the construction of at least one new reservoir.

Speaking at the 2009 California Water Conference, sponsored by the Society of American Military Engineers, Department of Water Resources director Lester Snow said there was the “attention and momentum” to move a deal now. While some vocal critics remain, there is major agreement among those actually shaping the package.

“Every stakeholder assumes someone else has an advantage and they’re getting screwed,” Snow said. “There are no substantive issues anymore. It’s in the ‘black helicopter phase.’”

Steinberg presented his bill, SB 1 7x, in a joint hearing of the Assembly Water, Parks and Wildlife and Senate Natural Resources Committees Monday. He was joined by a diverse coalition of disparate interests, including lobbyists for the state’s largest urban and agricultural water agencies and the Natural Resources Defense Council.  

What about the Peripheral Canal?
The unprecedented coalition built by Steinberg came together after major concessions that could lead to the construction of a canal that would divert water out of the Sacramento-San Joaquin River Delta and through the San Joaquin Valley.

Asked after his speech on Wednesday morning, DWR director Snow said the state already has the legal authority to start building the canal. “We clearly have the authority to do that,” he said. “That’s not something that’s a mystery to us.”

But if the state were to simply start construction on a structure that moved water around the delta, lawsuits would be inevitable.

Those lawsuits may still come, even if this bill is passed. But advocates for the canal say the language in the bill makes their legal case stronger.

The agencies themselves say they would pay for the huge project, using the money from the rate increases paid by their customers.  

“All the agencies will share the cost of conveyance,” said Jeff Kightlinger, Chief Executive Officer of the Metropolitan Water District of Southern California, which provides water to the Los Angeles basin. Kightlinger said the cost of the canal could cost between $6 billion and $12 billion, and would be funded by urban and agricultural rate payers.

Rate hikes could total 10 percent to 12 percent for urban and industrial users, and perhaps 50 percent to 100 percent for agricultural customers, he said.  

The environmentalists say no authorization for a canal.
But environmentalists who support the legislation authored by Sen. Darrell Steinberg, D-Sacramento, said the bill does not give a green-light to construction of the canal, or any other capital projects. The bill, focuses on governance of the delta, environmental safeguards, water supply reliability and other issues. Funding for those issues, perhaps in the $9 billion range, will be addressed separately, he said.  

 “The bill does not authorize a canal,” Ann Notthoff of the Natural Resources Defense Council testified during Monday’s hearing.

The divergence reflects the fragile nature of the group supporting the water-reform package, which includes environmentalists and others long opposed to a canal, or conveyance. Whether or not the bill actually eases the possibility of a canal is apparently still a matter of dispute among some coalition members.

But Assembly Republicans say they are unhappy with the bill, and they have introduced their own water plan that they said would curb the authority over groundwater monitoring contained in the Senate plan.

The Republican bill, AB 1 7x, was introduced hours after a closed-door meeting Monday of Gov. Arnold Schwarzenegger and the Republican and Democratic leaders of both houses. During the meeting, Senate Republican leader Dennis Hollingsworth, R-Murrieta, and Assembly Republican leader Sam Blakeslee, R-San Luis Obispo, said they were unhappy over the regulatory powers that the Steinberg bill authorized for groundwater monitoring and new conservation provisions. Republicans said the provisions were particularly difficult for small farmers.

The authors of the bill are three of the Assembly Republican negotiators on water  — Jean Fuller of Bakersfield, Jim Nielsen of Yolo and Kevin Jeffries of  Riverside.

Assembly Republicans said the bill was intended to provide a platform for future negotiations, and was “a work in progress,” but it was put forward as a potential alternative to the Steinberg proposal.

A look at the bills.
The Senate and Assembly bills are similar in some respects, but differ in others. One key difference is in the penalties and fines for improper diversions of water.

*The Senate bill calls for fines up to $5,000 per day or the amount of “the highest market value of water,” a level that could far exceed $5,000 per day if the diversion was on a large scale. The Assembly plan’s language caps the penalty at $5,000, according to the language in the bill.  

The Assembly Republicans bill, which deals with policy and not fiscal issues, was introduced on the same day that legislative hearings began on the Steinberg bill, which was the product of months of negotiations between water interests and environmental groups.
But some of the largest water players in the state remain supportive of the Steinberg measure. The fact that both water agencies, among the most powerful political players in state water issues, back the bill reflects their belief that the legislation assists them in their ultimate goal. The bill provides “a clear path to conveyance,” said lobbyist Ed Manning, representing Westlands Water District. “It’s a heck of a lot better than the status quo.”

The bill itself does not contain language explicitly authorizing the Peripheral Canal, nor does it contain any of three above-ground storage projects associated with the negotiations – Tem
perance Flat near Fresno and Sites in Colusa County, and raising the level at Los Vaqueros Reservoir in Contra Costa County.

But analyses by MWD and Westlands suggest that language deep in the 116-page bill helps expedite development of the canal over time – a project already authorized in state law. The state has begun studying the environmental impacts of canal, although it has not settled on whether the channel should go through or around the delta.

The above-ground storage issues are expected to be addressed in the bond proposal.

The canal is a flashpoint in the debate over California water policy. The multibillion-dollar canal – rejected by voters in 1982 – would move water from the Sacramento River around the delta and into the California Aqueduct. One goal is to get more water to the south without having huge pumps pull it out of the delta, an action that damages the fisheries and has drawn court rulings. Opponents believe the canal could choke off water to the delta, worsening the environmental hazard.

The governance of the delta.

Steinberg has proposed a top-to-bottom overhaul of the management of the delta by setting up a new panel to decide critical policy, expand the power of California’s water-use enforcers and create the position of Delta Watermaster to ride herd over the delta protections. It establishes a policy that is protecting the environment and assuring reliable water supplies are of equal importance – a finding that is a departure from the past.

It would set up an independent scientific panel to examine the delta’s needs. It includes fines of up to $5,000 per day for illegal diversions of water. It authorizes the State Water Resources Control Board to initiate investigations on its own, rather than in response to complaints, and it requires the state to put into effect an aggressive groundwater management program.    

The legislation would repeal the California Bay-Delta Authority Act, currently the principal statute governing the delta, and shifts key authority to a seven-member Delta Stewardship Council that would decide delta policy. The Council would be an independent state agency and have authority over delta development.

The council also would have a say-so over the Peripheral Canal, a regulatory hurdle that does not exist in current law. But the council also would be required to follow the proposed statute, which says delta policy “should improve the water conveyance system and expand statewide water storage” and provide a “reliable water supply.”

The bill also contains stringent conservation and groundwater management programs, details how delta-area local governments will participate in the management of the delta. It includes conservation requiring a per capita, 20 percent cut in water use by 2020. The water districts’ participation in the program is voluntary, although districts face losses in funding if they don’t participate.

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