January 19, 2018
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Three Years on, How California Is Spending Its $7.5 Billion Water Bond

In 2014 Californians approved Proposition 1. Ellen Hanak at the Public Policy Institute of California breaks down how much of that $7.5 billion has been appropriated so far and what that means for future water spending.

by Ian Evans

THREE YEARS AGO, California voters passed Proposition 1, a bond that provided $7.12 billion for water projects and reallocated another $425 million. The funds had to be split among seven categories: safe drinking water, water storage, flood management, water recycling, drought preparedness, ecosystem and watershed protection and groundwater sustainability.

Ellen Hanak and Jelena Jezdimirovic at the Public Policy Institute of California (PPIC) dove into the numbers to see how the proposition money has been spent throughout the state.

They found that about 80 percent of the proposition’s money has been appropriated, and they broke down the funding in a recent PPIC blog post.

(Courtesy of the PPIC)

Water Deeply spoke with Hanak, director of the PPIC Water Policy Center, about the Proposition 1 funding, what it tells us about water projects in California and about legislative priorities in 2018.

Water Deeply: How does this rate of spending compare to past water bond spending?

Ellen Hanak: This is about the typical pace of spending. Sometimes we’d like to see the money get out the door quicker or get frustrated that a bond passes and it doesn’t get all spent right away, but there is a whole process within each category to develop the specific details. And then when the calls go out, people have a bit of time to respond, there’s a judging process, an awards process and that doesn’t all happen overnight.

Water Deeply: Do you expect that Proposition 1 funding will be finished by the end of 2018?

Hanak: Probably not. You’ll see that one big circle that has had nothing spent at all yet is the storage piece. They are on track to make approval decisions, but I am guessing that not all that money will go out the door. It will take a while to get the contracts signed. Those are big projects. They don’t happen overnight, and there is a lot of accountability involved in making sure that the money goes to what it is intended to go to.

Just look at Prop. 84 and Prop. 1E. We’re 11 years out and there is still money left.

Water Deeply: The circle for groundwater sustainability is almost completely empty. Why is that?

Hanak: As you know, the state has a new groundwater law, that is really a landmark piece of legislation enacted in late 2014. It called for the creation of new groundwater sustainability agencies to manage groundwater and the development of groundwater sustainability plans that have to be completed and for which implementation has to start in 2020, and in some cases in 2022.

First, that deadline of creating groundwater sustainability agencies passed this summer and I would say that folks are feeling that it was quite successful in the sense that you’ve got almost all of the areas that are required to be covered by an agency covered now.

There’s quite a bit of additional money that is going to go for actual groundwater projects, and that will probably happen more over time. Some of that is to clean up groundwater basins that have chemicals in the water that make it unusable. We’ll probably also see some additional investments in sustainability efforts.

Water Deeply: Does this spending so far tell you anything about what we might expect in 2018?

Hanak: I think we’re continuing to see progress on safe drinking water in small communities. One of the things that is going to be on the legislative agenda is looking for some additional complementary funding to support operations and maintenance of projects [around safe drinking water].

We have some bond funds available and some other [funding] sources but those are almost always for the capital investments to upgrade these systems, and they don’t cover operations and maintenance. What folks have highlighted is that there is also a need to have funding available to support these communities on an ongoing basis, because many of them are quite small and very low-income. They can’t always fund the operations and maintenance on their own.

That was already under discussion in the legislature this past year. The idea in the proposal that is on the table now, in the bill’s current form, is a cost-sharing between the agricultural sector, which would provide some funding through taxes on fertilizer, and the urban sector, which would provide funding through a surcharge on people’s monthly water bills.

Water Deeply: Gov. Jerry Brown issued an executive order in 2015 in which he said that all new projects needed to take climate change into account. Are those considerations having any effect on which projects and areas are getting funding?

Hanak: I would say that there is a lot of awareness of climate change and the possible impacts that it will have on the water sector in California. One of the things that all of the models are quite confident about is that – and we’ve already seen this – the state is getting warmer. That is going to shrink the size of our mountain snowpack. I think that some of the interest that you see in Prop. 1 reflects that concern of augmenting our other kinds of storage, which includes surface reservoirs and underground storage.

The debates are really about where are the right spots and which are the most cost-effective projects. But I think that there is agreement among all of the parties that we have to manage our storage system differently as the climate changes. You’re seeing that both in the state bond spending, but also in the way local and regional water managers are approaching their systems.

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