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Bipartisan package: Water plan OK'd -- will voters sign on?

Originally published: 11/5/09

It took long months of delicate negotiations -- and the last-minute deletion of a project dear to the heart of the state's most powerful legislator -- for California lawmakers to craft what could turn out to be one of the most pivotal water deals in state history.

Now comes the hard part:The plan's proponents must convince a debt-weary, politician-leery electorate that it's a deal worth what could be a $25 billion-plus price tag by the time it's paid.

"We're done with part one," Assembly Speaker Karen Bass, D--Los Angeles, said Wednesday. "Part two is we need to take the message out (of Sacramento). ... First and foremost we have to begin by educating voters about water."

Bass' remarks came a few hours after legislators had staggered through an all-night session that ended with bipartisan support for a five-bill package of reforms to California's antiquated water system.

The bills were sent to Gov. Arnold Schwarzenegger, who effusively praised them.

"This is without any doubt the most comprehensive water infrastructure package ... in the history of California," the governor said.

The package's pieces range from new ways of protecting the fragile ecosystem of the Sacramento-San Joaquin River Delta to keeping track of how much water is being pumped from California's underground sources.

They also include asking voters to approve -- probably next November -- an $11.1 billion bond measure that would pay for recycling, drought relief, water storage and wastewater treatment programs.

What the final package did not include was $10 million to help build a tolerance center in Sacramento. Construction of the center long has been championed by Senate President Pro Tem Darrell Steinberg, D-Sacramento, who acknowledged Tuesday that he had included the provision in the bond bill.

But the earmark sparked a flap in both legislative houses just after midnight, when The Bee's story on the plan was published on its Web site.

When it became clear that the controversy was delaying approval of the bond measure in the Assembly, Steinberg agreed to drop the idea.

"I have worked my heart out to get this water package passed," he said, "and the last thing I would ever want to do is jeopardize this incredibly important work."

One of the legislators who had pushed for removal of the earmark said it might not have ultimately stopped legislative approval of the bond proposal but would have become a great campaign weapon for the bond measure's foes.

"In the bigger picture, it's going to take away a distraction that wasn't going to help our institution," said Assemblyman Jared Huffman, D-San Rafael, "and wasn't going to help the chances of this bond with voters."

Legislative leaders acknowledged that further improving the bond measure's chances with voters will take a herculean effort on their part.

"We need to spend a tremendous amount of time doing the education to break down the historic mistrust and misperceptions that (have) been the fundamental reason it's taken half a century to make the advancements that we made," said Bass.

Steinberg noted that voters surprised pundits and pollsters last November by approving a $10 billion bond proposal to build a high-speed rail system in the state.

"Voters had a forward vision, and they said despite the difficult economic times that they wanted to point toward the future," he said, "and I think with the right campaign, the right education, the right message, that they will do the same again."

But opposition to the high-speed rail measure was scattered and underfinanced. When it comes to the water bond, a potentially formidable odd-fellows coalition could form, consisting of public employee unions, anti-tax groups, some environmental groups and some local water and sewage agencies.

All of those elements have found something to dislike in the water package.

The politically potent and financially well-heeled unions fear committing more of the state's parched financial resources to water will mean less money for its payroll, and contend that individual water projects should be paid for by those who benefit directly from them.

In a letter sent to lawmakers Monday, the lobbyist for the 700,000-member Service Employees International Union California said it was unacceptable to cut education and social service programs to pay the debt that will be incurred by the water bonds.

"As yet, SEIU has seen no water system improvement financing plan that it would not oppose," wrote union lobbyist Allen Davenport.

Anti-tax groups fear the bonds would increase the state's debt too much. Some local agencies contend the reforms provide benefits to those outside their boundaries while sticking their customers with the bills. And some environmental groups oppose elements of the plan that could lead to construction of dams and a canal through the Delta.

"The water package that passed in the dead of night epitomizes the dysfunction that has gripped our legislative process," Barbara Barrigan-Parrilla, campaign director for Restore the Delta, said in a statement. "The package lost any semblance of rational debate and turned into a 'pork' festival."

Whether voters see it that way may depend on which aspect of the potential costs they choose to emphasize.

Jason Dickerson of the Legislative Analyst's Office, estimated that the annual principal and interest on the water bonds could range from $724.7 million to $809.3 million.

But Schwarzenegger spokesman Aaron McLear said that because the proposal requires that no more than half of the bonds be sold before 2015, much of the state's current public works bond debts will be paid off before the water bonds begin to take effect.

"It's not going to take away money from any of our other priorities," he said.

WATER BOND SPENDINGThe $11.14 billion water infrastructure bond probably will be on the November 2010 ballot. A breakdown of the proposed spending:$3 BILLION / Potential new dams$2.25 BILLION / Projects to protect and restore the Delta$1.785 BILLION / Watershed protection throughout state$1.4 BILLION / Regional water supply projects$1.25 BILLION / Water recycling and conservation$1 BILLION / Groundwater cleanup and water quality$455 MILLION / Local drought relief projects

Source: www.leginfo.ca.gov

HIGHLIGHTS OF THE PLAN* Authorizes an $11.14 billion bond measure to pay for dams, underground water banking, water recycling, Delta restoration and dozens of regional projects.* Creates a seven-member council charged with adopting a long-range management plan for the Delta by Jan. 1, 2012. The Delta council could authorize a canal to move water around the Delta southward.* Establishes a goal to reduce statewide per-capita urban water use by 20 percent by 2020.

What's next: The bond likely will go before voters in November 2010.

IN THE WATER DEALThe California Legislature's water package calls for an election, probably in November 2010, on an $11 billion water bond requiring majority approval by the state's voters.

Regarding the peripheral canal, the plan would:Provide assurances about a proposed Delta water diversion canal. It would prevent the Department of Water Resources from starting construction until the Water Resources Control Board approves a diversion permit for the project.* That diversion permit must specify 'flow criteria' that set new stream-flow requirements to improve Delta habitat.* Water contractors must sign contracts to pay for the canal project and to offset property tax losses to Delta counties.* The canal, as proposed by the Bay Delta Conservation Plan, must help endangered species recover, as required by the Natural Communities Conservation Plan, a higher standard than species protection, called for by current federal rules. Without this enhanced standard, state funding can't flow.

The plan would also:* Create new Delta Stewardship Council, which must prepare a comprehensive, long-term "Delta Plan" by Jan. 1, 2012. The council can require state agencies to follow the Delta Plan.* Reform the existing Delta Protection Commission so that it expands Delta recreation; promotes agriculture; seeks federal status for the Delta as a "place of special significance"; and promotes emergency preparedness, appropriate land use and strategic levee investments.* Create Sacramento-San Joaquin Delta Conservancy, which will receive funds and make grants for habitat restoration activities from a pool of $2 billion set aside for Delta sustainability, restoration and conservation projects. This can include flood protection projects and ecosystem restoration associated with Bay Delta Conservation Plan. However, no bond money may be used for canal planning, construction, operation, maintenance.

In Sacramento and Northern California, the water package would:* Affirm existing legal protections for upstream water diversions; also affirm state law allowing those diversions to be modified.* Provide $400 million for "drought relief" that may pay cities for water that's instead used to improve Delta flows; $250 million for a Klamath River dam removal project (plus up to $20 million to offset Siskiyou County economic impacts); $60 million for salmon migration projects in Sacramento River watershed; and $50 million in matching grants to improve upstream wastewater treatment.

Elsewhere in California, the water package would:* Create a comprehensive strategy to stabilize statewide water deliveries by improving management of Delta resources.* Increase statewide debt load, though half of the bonds can't be sold until after 2015 to minimize negative impacts.* Require 20 percent water conservation statewide by 2020; provide several paths to local water agencies for achieving this; agencies that fail will not be eligible for state water grants.* Call for Department of Water Resources to coordinate water supply and flood protection between state and federal projects.* Provide $1.9 billion for re- gional water management; $1.5 billion for watershed protection projects; $500 million for groundwater protection proj- ects; $500 million for water recycling and conservation for urban and agricultural users.* Require statewide monitoring of groundwater supplies, starting Jan. 1, 2012.* Add 25 employees to State Water Resources Control Board, to police illegal water diversions.

For water exporters, the package would:* Set "Two Gates" as $28 million, "early action" project by Delta Stewardship Council. The project would build two movable gates on central Delta channels, regulating flows to stabilize water exports.* Require the Delta Stewardship Council to "promote a more reliable water supply" as part of the Delta Plan.* Provide a path to construction of a Delta water diversion canal, even though it gives limited oversight to Delta Stewardship Council.* Allocate $3 billion for potential new dams, but only the "public benefit" portion of those projects, such as ecosystem flows, flood control, rec-reation.* Assure public funding -- if voters approve the bond -- of habitat restoration in the Delta, which may help stabilize water deliveries.-- Matt Weiser

To read more about Delta issues, visit www.sacbee.com/delta

Call Steve Wiegand, Bee Capitol Bureau, (916) 321-1076. Jim Sanders, Jack Chang and Torey Van Oot of The Bee Capitol Bureau contributed to this report.

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