Hearing explores funding for Calif. water needs

March 9, 2016
The Senate Natural Resources and Water Committee met today.

SOURCE: Association of California Water Agencies (ACWA)

CALIFORNIA, March 8, 2016 -- California lawmakers and stakeholders from throughout the water community today focused on ways to fund the state’s chronically underfunded water needs during a hearing of the Senate Natural Resources and Water Committee.

Sen. Fran Pavley (D-Agoura Hills), who chairs the committee, said the hearing was a continuation of one held last fall that focused on unfunded water needs with a focus this time on how to pay for those needs.

Rachel Ehlers, of the state’s Legislative Analyst’s Office, provided context on the issue by presenting a LAO brief on water-related funding. Citing a report from the Public Policy Institute of California, the brief highlighted the fact that the vast majority of water-related funding in California is at the local level. According to the PPIC report, local sources spent about $25.6 billion between 2008 and 2011, or 84% of statewide total water spending. The typical local funding sources include fees for water and sewer services, property taxes and assessments, developer fees, other local taxes, and money from local government general funds. By contrast, spending from state sources during that time period is estimated to be $3.7 billion, or 12% of total funds. Federal sources contributed $1.2 billion or 4% of total funds.

The LAO report also stated that costs for local water agencies are likely to increase, in part because of aging infrastructure, higher costs to obtain water and higher regulatory requirements. At the same time costs and needs are rising, significant restrictions on local funding exist such as Proposition 218, which requires higher voter approval for certain new fees and stricter “cost-of-service” requirements for some fees.

ACWA Executive Director Timothy Quinn testified about funding constraints facing local water agencies under current law, which requires different procedures for different types of infrastructure. Agencies seeking to fund activities such as storm water capture or flood control must meet higher thresholds for voter approval, he said. In addition, agencies interested in adopting tiered rates or lifeline rates for low-income customers face some constraints under existing law.

Quinn explained that a coalition – which includes ACWA, the League of California Cities and the California State Association of Counties – has filed a potential ballot initiative that would amend the state Constitution’s Article X to create a new, optional funding method local agencies could use at their discretion to finance stormwater, flood control and other water and sewer-related projects and pursue conservation-based water rates or lifeline rates for low-income households. He said the coalition would decide in coming weeks to pursue the initiative or a parallel legislative strategy.

“This demonstrates the willingness of local agencies to stand up to their responsibilities to fund local water systems and infrastructure,” Quinn said. “The proposed measure is about finding additional funding to do that.”

Quinn also stressed that ACWA “will continue to oppose a public goods charge as a way of financing” water system improvements and programs.

Newsha K. Ajami, director of urban water policy for Water in the West, testified that California needs a sustainable funding source to “move the water system forward.”

Laurie A. Wayburn, co-founder, co-CEO and president of the Pacific Forest Trust, outlined some of the challenges facing the state’s watersheds.

Deven Upadhyay, group manager in water resource management for the Metropolitan Water District of Southern California, testified on how future water reliability requires a diverse approach that includes demand management and local resource development.

About ACWA
The Association of California Water Agencies (ACWA) is the largest statewide coalition of public water agencies in the country. Its 430 public agency members collectively are responsible for 90% of the water delivered to cities, farms and businesses in California.

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