In November 2014, California voters overwhelming approved Proposition 1, a bond measure to provide financing to increase water supply, provide clean, safe and reliable water, and restore habitat.
The total amount authorized was $7.5 billion to be allocated among seven categories: water storage, watershed protection and restoration, groundwater sustainability, regional water management, water recycling and desalination, drinking water quality and flood protection. Slightly more than a third of the total ($2.7 billion) will be used for water storage projects. The watershed protection category was allocated $1.5 billion and the remaining $3.3 billion was distributed among the remaining five categories.
In January, Gov. Jerry Brown requested $533 million in his budget proposal for fiscal year 2015-16 (starting July 1) to fund various water projects. Only $3 million was requested for storage projects. The request for the watershed projects was $178 million and about $135 million each for water recycling, and desalination and water quality projects.
The budget request also presents a multi-year plan for the use of the funding. For example, water storage funding does not ramp up until 2017-18, then more than $400 million is requested. Most of this money will be for storage projects that also improve water provision to the Delta and its tributaries.
Peak funding for water recycling will be in years 2016-17 and the following year, whereas the majority of the groundwater sustainability funding peaks in years 2018-19 and 2019-20.
In February, the Legislative Analyst’s Office reviewed the water-bond funding request and recommended several criteria for awarding the funds. Examples include ensuring funding is targeted to projects that not only produce public benefits, but benefits at the state level.
The LAO recommended to the Legislature that benefits be tightly defined. “Many departments intend to include certain water supply benefits — such as increased water supply and avoided water supply disruptions — in their criteria for selecting projects. However, these benefits are often private because the benefits accrue to a water system’s defined customer base. Therefore, we recommend the Legislature specify that water supply benefits are only public benefits to the extent that there is no identified group of beneficiaries (such as ratepayers) and that only these public water supply benefits are eligible for bond funding.”
Another example is the use of funds for developing groundwater plans. Drought legislation (Sustainable Groundwater Management Act of 2014) adopted last year required communities to prepare these plans. Consequently, the LAO recommended, “… the Legislature specify that funds for developing groundwater management plans only be available to disadvantaged communities, in order to address ability-to-pay concerns.”
The governor will submit a revised budget in May, and later in spring and summer the Legislature will make decisions on the amount funded this year and the criteria for its use.