Who keeps buying California’s scarce water? Saudi Arabia

DroughtFour hours east of Los Angeles, in a drought-stricken area of a drought-afflicted state, is a small town called Blythe where alfalfa is king. More than half of the town’s 94,000 acres are bushy blue-green fields growing the crop.

Massive industrial storehouses line the southern end of town, packed with thousands upon thousands of stacks of alfalfa bales ready to be fed to dairy cows – but not cows in California’s Central Valley or Montana’s rangelands.

Instead, the alfalfa will be fed to cows in Saudi Arabia.

The storehouses belong to Fondomonte Farms, a subsidiary of the Saudi Arabia-based company Almarai – one of the largest food production companies in the world. The company sells milk, powdered milk and packaged items such as croissants, strudels and cupcakes in supermarkets and corner stores throughout the Middle East and North Africa, and in specialty grocers throughout the US.

Each month, Fondomonte Farms loads the alfalfa on to hulking metal shipping containers destined to arrive 24 days later at a massive port stationed on the Red Sea, just outside King Abdullah City in Saudi Arabia. …

Click here to read the full article from The Guardian

Are Water Rights Sufficient to Protect Water Users?

Drought water crops“The judiciary is the safeguard of our liberty and of our property under the Constitution,” said U.S. Supreme Court Justice Charles Evans Hughes in Elimra, New York in 1907.

That quote exemplifies the reason that five irrigation districts on tributaries to the San Joaquin River as well as the city of San Francisco filed lawsuits recently against the State Water Resources Control Board. They are defending their water rights. 

In December, ahead of the Water Board hearing, Governor Brown and Governor-elect Newsom both asked the Water Board to hold off and let the districts, the State, and the federal government finalize the voluntary agreements. But that didn’t happen and the problem is now in Governor Newsom’s lap as his Water Board will likely have to turn its attention to defending its decision in court.

“We file suit not because we prefer conflict over collaboration. On the contrary, we continue to encourage and participate in settlement discussions on our rivers, and support science on the Stanislaus. But we also have an indisputable responsibility to reserve our legal rights and protect our ag and urban customers,” said Peter Rietkerk, General Manager of the South San Joaquin Irrigation District (SSJID).

Unfortunately, sometimes, the courts are your only recourse.

The State Water Board’s decision on December 12, 2018 doubles the amount of water the State will take away from farms growing food, the parks and sporting fields where our children play, and even the water we drink from our taps at home and bubbling out of drinking fountains at schools. And if flow requirements can be imposed on the San Joaquin River they can be imposed anywhere.

The sad thing is there was an alternative available, but the Board has so far rejected it. Farmers in the San Joaquin and Sacramento valleys, irrigation districts, the Department of Water Resources, Department of Fish and Wildlife and the Bureau of Reclamation, worked collaboratively at the behest of both Governors Brown and Newsom, to propose a voluntary plan designed to quickly accomplish more for fish and the environment without the drastic harm water users expect from the water cuts.

Under these proposals farms and cities would still give up billions of gallons of water to the river during times that science tells us that it’s needed, as well as implement projects that improve habitat for fish, reduce predators and enhance ecosystems far beyond what the Board’s water-only plan could achieve. The voluntary proposals, expected to produce more salmon than the plan adopted by the State Water Board with less harm to the economy, would have been a win for all – farms, fish and folks.

“Our voluntary agreement will ensure water security and reliability, includes environmental improvements, enhances fish populations far beyond what is projected in the state’s current plan and most importantly, guarantees timely implementation,” said Modesto Irrigation District Board Vice President John Mensinger. “Their (the Board’s) plan threatens not only Central Valley ag and urban water users, but also the water supply of more than two million people living in the Bay Area.”

There is still an opportunity for the Water Board to adopt a voluntary path toward ecosystem restoration and faster solutions to restore dwindling salmon populations. The question is, will they do it or will former Supreme Court Justice Charles Evans Hughes words be put to the test again?

Executive Director, California Farm Water Coalition.

This article was originally published by Fox and Hounds Daily

Gov. Newsom Pushing For New Taxes on Water and Phones

Water Drought SprinklerGov. Gavin Newsom’s has called for a first-ever water tax and an added fee on phone bills at a time when the state is enjoying what recently departed state Legislative Analyst Mac Taylor called “extraordinary” budget health. Newsom said last week that experts now forecast a $21.5 billion budget windfall in 2019-20. Until recent years, the optics of asking the public to pay more with an overflowing budget would have seemed impossible to overcome.

Specific details have not yet emerged on Newsom’s plan, but it’s expected to be similar to a rejected 2018 proposal from state Sen. Bill Monning, D-Carmel, to tax residential customers 95 cents a month to help fund water improvements in rural farming communities in the Central Valley and throughout the state.

It would raise about $110 million to get clean water to what the McClatchy News Service estimated last year to be 360,000 people without such access. Others looking at the problem see it as much worse. Newsom said 1 million residents face health risks from their own water supplies.

Newsom emphasized what a priority the water tax would be for him on Friday by taking his cabinet on a “surprise” tour of affected Central Valley communities.

The dairy industry would also face $30 million in new fees. The $140 million annually that Newsom hopes to get from his plan is dwarfed by money already available from a $7.5 billion 2014 state water bond. While the largest chunk of the bond – $2.7 billion – was reserved for water storage projects, one of its listed priorities for the remaining $4.8 billion was providing access to clean water.

Howard Jarvis Taxpayers Association President Jon Coupal saw Newsom’s water tax plan as part of a historical continuum. He told the Sacramento Bee it was only the latest example “of California’s knee-jerk reaction to default to a new tax whenever there’s a new problem.”

But Newsom depicted his 2019-20 budget as reflecting discipline, touting its emphasis on continuing to add to the state’s rainy day fund and because of commitments to prepay some of CalPERS’ and CalSTRS’ unfunded long-term liabilities. Finance officials say every $1 billion prepaid now saves more than $2 billion in the long haul.

Governor cites urgent need to upgrade 911 system

Newsom also confirmed that he wants to add a 20- to 80-cent fee on monthly cellphone and landline bills to upgrade the 911 emergency notification system. That would take a two-thirds vote of the Legislature.

A similar proposal died late in the legislative session amid fears that it was a regressive tax that could cause headaches for incumbents on the November ballot.

But Newsom depicts the fee as a vital part of upgrading a 911 system that has outdated technology and is not up to the challenge of keeping safe a state facing devastating wildfires on a yearly basis.

The 911 fee was part of a larger wildfire-response program Newsom announced last week in the aftermath of last fall’s Camp fire in Butte County that killed at least 86 people and destroyed about 14,000 homes and the Woolsey Fire in Ventura and Los Angeles Counties that caused three deaths and torched 1,500 homes.

The governor wants to add $105 million to the $200 million already earmarked for improved wildfire response efforts in fiscal 2019-20. The extra money would be used to boost forest clearing efforts, to expand emergency fire rescue crews and more.

This article was originally published by CalWatchdog.com

California State Board Votes to Restrict Water to Farmers

Drought water cropsCalifornia’s State Water Resources Control Board (SWRCB) voted Wednesday to approve the Bay-Delta plan, which will re-allocate water from farms and cities to the environment in an effort to restore dwindling fish numbers.

The plan will require tributary rivers within the San Joaquin watershed to maintain an average water level of 40% of “unimpeded flow” — that is, the flow that would exist without human activity — during the spring season.

The result is that less water — “billions of gallons,” according to the Fresno Bee — will be available to the farming communities of the Central Valley, as well as to San Francisco and its suburbs, which rely on water from the area.

Last month, outgoing Gov. Jerry Brown and incoming Gov. Gavin Newsom asked the SWRCB to delay its vote by a month to allow time for local water authorities to reach voluntary settlement agreements (VSAs) as an alternative to the new plan. In the interim, several local irrigation districts did, in fact, commit to investing in conservation and environmental projects that would theoretically help restore fish populations without giving up quite so much water.

But as the Bee reports, the SWRCB — all of whose members were appointed by Brown, and who are thought to be partial to environmental groups — passed the plan anyway “to put pressure on a group of holdout water agencies.”

The Trump administration has promised to take legal action to block the plan, which may be moot as a result. Some environmental groups have criticized the Bay-Delta plan for not going far enough.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. He is also the co-author of How Trump Won: The Inside Story of a Revolution, which is available from Regnery. Follow him on Twitter at @joelpollak.

This article was originally published by Breitbart.com/California

San Francisco leaders hate Trump enough they voted to limit the city’s water rather than do this

Delta TunnelsFor months, San Francisco, a hotbed of anti-Donald Trump sentiment, has found itself in the awkward position of being aligned with his administration over California water policy.

On Tuesday, the city’s leaders said the alliance was unbearable.

In an 11-0 vote, the San Francisco Board of Supervisors agreed in a resolution to support the State Water Resources Control Board’s proposal to leave more water in the San Joaquin River and its tributaries to benefit struggling fish populations. The supervisors’ vote is subject to veto by Mayor London Breed, although the board could override the veto.

The vote splits the city from the Trump administration and instead moves its support to a state plan that its utilities commission warns could lead to severe drinking water shortages for its nearly 884,000 residents. …

Click here to read the full article from the Sacramento Bee

Trump memo orders Central Valley water changes

RB DroughtThe Trump administration has launched a bold effort to up-end water policies in the Central Valley and the Sacramento-San Joaquin River Delta, calling for big changes that would favor farmers over endangered species in allocating water.

Helping craft the administration’s new approach: Deputy Interior Secretary David Bernhardt, a former lawyer and lobbyist for the Westlands Water District, which is the nation’s largest agricultural water district with 600,000 acres of farmland in Fresno and Kings counties.

As CalWatchdog reported in June 2017, the prospect of having Bernhardt overseeing the federal government’s California water policies was opposed by nearly all Democrats in Congress because of his history. Meanwhile, to GOP lawmakers from the Golden State, his nomination was seen as confirmation of Trump’s 2016 campaign promises to abandon the old status quo involving Central Valley agriculture.

The Oct. 19 memo signed by Trump reflected Bernhardt’s years of calling for lesser regulatory burdens, specifically including long-lived protections for endangered species. It underlined the determination of the Trump administration to make sure farmers got more water. The memo also ordered that major water projects receive faster environmental reviews.

Trump signed the memo before a campaign rally in Arizona while flanked by three California House members – Majority Leader Kevin McCarthy of Bakersfield, Jeff Denham of Turlock and Tom McClintock, who represents a wide swath of Central and Eastern California. All have denounced what they see as excessive federal deference to environmentalists – including by the George W. Bush administration, not just the Obama administration.

“This will move things along at a record clip, and you’ll have a lot of water,” Trump assured them.

But veterans of the water wars – including those who back Trump’s new policy – have warned farmers not to get their hopes up for the rapid changes the president predicted. More modest changes in policies by the last Bush administration were fought in both federal and state courts by well-funded environmental law firms. They won not just stays of federal orders but full victories from judges who agreed with their interpretation of Congress’ intent when it adopted far-reaching water laws last century.

Fight over economic impact of rules looms

Bernhardt’s remarks at a May 2017 Senate hearing point squarely to one coming fight with broad implications for all of the federal government. When asked whether the Interior Department would keep its commitment to “scientific integrity” in enforcing federal laws, Bernhardt said, “I will look at the science with all its significance and its warts. You look at that, you evaluate it and then you look at the legal decision you can make. In some instances the legal decision may allow you to consider other factors, such as jobs.”

The idea that governments can consider such economic factors when interpreting laws has been one of the favorite legal arguments of conservative and libertarian law professors since it was advanced in 1973 by Richard A. Posner, who went on to serve 36 years as a federal appellate judge and to emerge as one of the most important and provocative legal thinkers of the 20th century.

If there is any evidence this philosophy is leading to new Trump administration interpretations of federal laws, a strong legal challenge is certain – not just because of what it would mean for water policy but because it would give business interests a powerful new tool to challenge a wide range of laws that create economic burdens.

Posner’s most crucial, basic claim – that the “common law” that is the basis of the legal system holds efficiency as a value – is scoffed at by many legal academics. A Stanford law school analysis that was otherwise sympathetic to Posner’s theories says it is based on “ambiguous” precedents.

The fight over the Posner-Bernhardt view of the law is in some ways the reverse of normal fights over the extent of judicial authority. Democrats say the claim that “efficiency” is part of how laws should be interpreted was invented out of whole cloth, with no evidence it reflected the wishes of the nation’s founders.

This is the line of argument often made by conservative strict constructionists, who reject the idea that the Constitution and other long-standing laws are “living documents” subject to new interpretations because of changing circumstances.

This article was originally published by CalWatchdog.com

California Doesn’t Need Another Water Bond

WaterIt feels every election Californians are voting on another water bond — and passing them. This November Proposition 3 is on the ballot, placed there through the initiative process. The state has plenty of unspent water related bonds. Shouldn’t we use the billions authorized for past water bonds yet expended before adding more billions to the state debt?

This bond would generate $8.89 billion for a number of water related projects including water quality, watershed and fisheries improvements, surface water storage and more at a total cost to taxpayers of $17.3 billion once the bonds are paid off with interest 40 years later. It’s hard to complain about the initiative’s goals but the costs should be put into context.

Since 2000 California voters have approved $31 billion in water and environmental projects using general obligation bonds. That’s money that comes out of the general fund used for all other services the state provides and GO bonds have first call on general fund revenues. About $10 billion of the $31 billion has not been allocated. That includes $4 billion that voters okayed as recently as the June primary election. In 2014, voters passed a ballot measure to reallocate unsold water-related bonds and authorized $7 billion for water purposes. Few have been sold by the state.

Citing a 2017 state treasurer’s report, the California Taxpayers Association notes that California has $83.24 billion in outstanding general obligation bond debt, with another $38.61 billion in authorized but unissued debt. If all bonds are sold, California would have $121.85 billion in general obligation bond debt, equivalent to nearly as much as the 2017-18 general fund budget. (Emphasis added.)

When do we say stop and use the resources at hand?

Of course, water is important to California’s quality of life. Water has been an important and contentious issue since the state was born and still is today. Just consider the fight that is brewing over Jerry Brown’s proposed tunnel project. But, by continually passing water bonds, especially those placed on the ballot through the initiative process, there is no overall management plan to deal with water issues.

Do voters consider the size of the state’s bond debt when voting on measures such as Prop 3? Hardly. If the proposal sounds good they support the idea and vote yes.

Californians should be concerned with water issues. But let’s spend money already authorized and let’s have better planning before jacking up the state’s general obligation debt.

This article was originally published by Fox and Hounds Daily

Towards a Grand Bargain on California Water Policy

Lake Shasta Water ReservoirWhen it comes to water policy in California, perhaps the people are more savvy than the special interests. Because the people, or more precisely, the voters, by huge majorities, have approved nine water bonds in the past 25 years, totaling $27.1 billion. It is likely they’re going to approve another one this November for another $8.9 billion.

The message from the people is clear. We want a reliable supply of water, and we’re willing to pay for it. But the special interests – or whatever you want to call the collection of politicians, unelected bureaucrats with immense power, and other stakeholders who actually decide how all this money is going to be spent – cannot agree on policy. A recent article in the Sacramento Bee entitled “Why San Francisco is joining Valley farmers in a fight over precious California water,” says it all. “Precious California water.” But what if water were so abundant in California, it would no longer be necessary to fight over it?

As it is, despite what by this time next year is likely to be $36 billion in water bonds approved by voters for water investments since 1996, the state is nowhere close to solving the challenge of water scarcity. As explained in the Sacramento Bee, at the same time as California’s legislature has just passed long overdue restrictions on unsustainable groundwater withdrawals, the political appointees on the State Water Resources Control Board are about to enact sweeping new restrictions on how much water agricultural and municipal consumers can withdraw from the Sacramento and San Joaquin rivers.

This is a perfect storm, and every conservation, recycling and storage project currently funded or proposed will not make up the shortfall. In 2002, well before these new restrictions were being contemplated, the California Dept. of Water Resources issued an authoritative study, “Averting a California Water Crisis,” that estimated the difference between demand and supply at between two and six million acre feet per year by 2020. An impressive response from the public during the most recent drought, combined with some investment in water infrastructure has narrowed that gap. But the squeeze is ongoing, with tougher challenges and tradeoffs ahead.

Abundance vs Scarcity

When thinking about solutions to California’s water challenges, there is a philosophical question that has to be addressed. Is it necessary to persistently emphasize conservation over more supplies of water? Is it necessary to always perceive investments in more supplies of water as environmentally unacceptable, or is it possible to decouple, or mostly decouple, environmental harm from investment in more water supplies? Is it possible that the most urgent environmental priorities can be addressed by increasing the supply of water, even if investing in more water supplies also creates new, but lessor, environmental problems?

This philosophical question takes on urgent relevance when considering not only the new restrictions on water withdrawals that face Californians, but also in the context of another great philosophical choice that California’s policy makers have made, which is to welcome millions of new immigrants from across the world. What sort of state are we inviting these new residents to live in? How will we ensure that California’s residents, eventually to number not 40 million, but 50 million, will have enough water?

It is this reality – a growing population, a burgeoning agricultural economy, and compelling demands to release more water to threatened ecosystems – that makes a grand political water bargain necessary for California. A bargain that offers a great deal for everyone – more water for ecosystems, more water for farmers, more water for urban consumers – because new infrastructure will be constructed that provides not incremental increases, but millions and millions of acre feet of new water supplies.

The good news? Voters are willing to pay for it.

How to Have it All – A Water Infrastructure Wish List

When considering what it would take to actually have water abundance again in California, the first step is to try to determine the investment costs, imagining a best case scenario where every good idea got funded. Here’s a stab at that list, not differentiating between local, state and federal projects. These are very approximate numbers, rounded upwards to the nearest billion:

Projects to Increase Supplies of Water

(1) Build the Sites Reservoir (annual yield 0.5 MAF) – $5.0 billion.

(2) Build the Temperance Flat Reservoir (annual yield 0.25 MAF) – $3.0 billion.

(3) Raise the height of the Shasta Dam (increased annual yield 0.5 MAF) – $2.0 billion.

(4) So Cal water recycling plants to potable standards with 1.0 MAF capacity – $7.5 billion.

(5) So Cal desalination plants with 1.0 MAF capacity – $15.0 billion.

(6) Desalination plants on Central and North coasts with 0.5 MAF capacity – 7.5 billion

(7) Central and Northern California water recycling plants to potable standards with 1.0 MAF capacity – $7.5 billion.

(8) Facilities to capture runoff for aquifer recharge (annual yield 0.75 MAF) – $5.0 billion.

Total – $52.5 billion.

Projects to Increase Resiliency of Water Distribution Infrastructure

(9) Retrofit every dam in California to modern standards, including Oroville and San Luis – $5.0 billion.

(10) Aquifer mitigation to eliminate toxins with focus on Los Angeles Basin – $7.5 billion.

(11) Retrofit of existing aqueducts – $5 billion.

(12) Seismic retrofits to levees statewide, with a focus on the Delta – $7 billion.

Total – $24.5 billion.

The total of all these projects, $77 billion, is not accidental. That happens to be the latest best case, low-ball estimate for California’s completed high speed rail project. Without belaboring the case against high speed rail, two comparisons are noteworthy.

First, an ambitious program to create water abundance in California and water infrastructure resiliency in California based on this hypothetical budget is achievable. These numbers are deliberately rounded up, and the final costs might actually be lower, whereas it is extremely unlikely that California’s high speed rail project can be completed for $77 billion.

Second, because people will actually consume these new quantities of water that are being supplied and delivered, private financing will be attracted to significantly reduce the taxpayer’s share.

The Impact of a $77 billion Investment on Water Supply, Resiliency, and Ecosystems

As itemized above, at a capital cost of $52.5 billion, the total amount of water that might be added to the California’s statewide annual water budget is 5.5 million acre feet.

This amount of water would have a staggering impact on the demand vs. supply equilibrium for water. It is nearly equal to the total water consumed per year by all of California’s urban centers. Implementing this plan would mean that nearly all of the water that is currently diverted to urban areas could be instead used to ensure a cool, swift flow in California’s rivers, while preserving current allocations for agriculture. The options for environmentalists would be almost unbelievable. Restore wetlands. Revive the Delta. Refill the shrinking Salton Sea.

The environmentalist arguments against the three dams are weak. Shasta Dam is already built. The impact of expanding the Shasta Dam is purportedly the worst on McCloud creek, where it will affect “nearly a mile” of what was “once a prolific Chinook salmon stream,” (italics added). That negative impact, which seems fairly trivial, has to be balanced against the profound benefit of having another 500,000 acre feet of water available every summer to generate pulses of swift, cool water in the Sacramento River. The proposed Temperance Flat Reservoir is proposed on a stretch of the San Joaquin River that already has a smaller dam. The Sites Reservoir is an offstream reservoir that will not interfere with the Sacramento River.

The environmental benefits of these dams are not limited to their ability to ensure supplies of fresh water for California’s aquatic ecosystems. They can also be used to store renewable electricity, by pumping water from a forebay at the foot of the dam into the reservoir during the day, when solar energy already brings the spot price of electricity down to just a few cents per kilowatt-hour, then generating hydro-electric power later in the evening when peak electrical demand hits the grid. This well established technology has already been implemented on dams throughout California, and remains one of the most cost-effective ways to store clean, but intermittent, renewable energy. It will also be a profit center for these dams.

The environmentalist arguments against desalination are also weak. The energy required to desalinate seawater is comparable to the energy necessary to pump it from Northern California to the Los Angeles Basin. The outfall can be discharged under pressure a few miles from shore, where it is instantly disbursed in the California current. The impact from the intakes is grossly overstated by environmentalists, when considering that even if all of these contemplated desalination plants were built, the water they would intake is only a fraction of the amount of water taken in for decades by California’s power plants that are sited on the coast and use seawater for cooling.

As for the Delta, the primary environmental threat to that ecosystem is the chance that an earthquake destroys the hundreds of miles of levees, causing the agricultural areas behind those levees to be flooded. Not only would agricultural contaminants enter the water of the Delta, but the rush of water flooding into the areas behind the levees would cause salt water from the San Francisco Bay to rush in right behind, creating conditions of salinity that would take years to remove, if ever.

This is why investing in levee upgrades and a Delta Smelt hatchery is a preferable solution to the Delta tunnels. The tunnels would ensure a resilient supply of water from north to south, but the Delta would still be vulnerable to levee collapse. Levee upgrades and a Delta Smelt hatchery would accomplish both goals – resiliency of the water supply and of the Delta ecosystem. Moreover, the presence of massive water recycling and desalination facilities in Southern California would take a great deal of pressure off how much water would need to be transported through the Delta from north to south.

How to Finance $77 Billion for Water Infrastructure

Funding capital projects depends on three possible sources: operating budgets, general obligation bonds, or revenue bonds. Operating budgets, which used to help pay for capital projects, and which ought to help pay for capital projects, will never be balanced until real pension reform occurs. So for the most part, operating budgets are not a source of funds.

A useful way to differentiate between general obligation bonds and revenue bonds are that the general obligation bonds impose a progressive tax on Californians, since wealthy individuals pay about 60% of all tax revenues in California. Revenue bonds, on the other hand, because they are serviced through sales of, for example, water produced by a desalination plant, are regressive. This is because all consumers see these costs included in their utility rates, and utility bills constitute a far greater proportion of the budget for a low income household.

The Grand Bargain – Creating Water Abundance in California
(MAF = million acre feet)

Projects to increase supplies of water

By financing water infrastructure through a combination of revenue bonds and general obligation bonds, instead of solely through revenue bonds, water can remain affordable for ordinary Californians. The $24.5 billion portion of the $77.0 billion wish list, the funds for dam, aqueduct, and levee retrofits, along with aquifer mitigation, are not easily serviced through revenue bonds. A 30 year general obligation bond for $24.5 billion with an interest rate of 5% would cost California’s taxpayers $1.6 billion per year. Some of these projects, to the extent they are improving water delivery to specific urban and agricultural consumers, might be funded by bond issuances that would be serviced by the agencies most directly benefiting.

To claim that 100% of the revenue producing water projects can be financed through revenue bonds is more than theoretical. The Carlsbad Desalination Plant financing costs, principle and interest payments a nearly $1.0 billion for the plant’s construction, are paid by the contractor that built and operates the plant, with those payments in-turn funded through the rates charged to the consumers of the water. The contractor also retains an equity stake in the project, meaning that additional capital costs incurred privately are also funded via a portion of the rates charged to consumers.

Some of the revenue producing assets on the grand bargain wish list may also have a portion of them paid for by general obligation bonds. Determining that mix depends on the consumer. For example, a revenue bond for the reservoir projects may be applied to agricultural consumers who are willing to pay well above historical rates to have a guaranteed source of water for their orchards, which have to survive through dry years.

For urban consumers in particular, making the more expensive projects financially palatable may require general obligation bonds to cover part of the costs, so the remaining costs are affordable for ratepayers. For example, desalination is a relatively expensive way to produce water, making it harder to finance 100% with revenue bonds. But without desalination, wastewater recycling and runoff capture are not sufficient local sources of water in places like Los Angeles. The overall benefit to Californians of adding another 1.5 million acre feet per year to the state’s water supply, using desalination which is impervious to droughts, may be worth having some of its cost financed with general obligation bonds.

To fund roughly 50% of the revenue producing water supply infrastructure ($26.2 billion) and 100% of the water resiliency and distribution infrastructure ($24.5 billion) on this list would cost taxpayers about $3.0 billion per year. While this might strike some as an unthinkable amount to even consider, these projects meet all the criteria for so-called “good debt.” Constructing them all would solve California’s challenge of water scarcity, possibly forever. All of the projects are assets yielding ongoing and long-term benefits that will outlast the term of the financing. At the same time, water would become so abundant in California that prioritizing water allocations to revive ecosystems would no longer provoke bitter opposition. And California’s residents would live again in a state where taking a long shower, planting a lawn, and doing other water-intensive activities that are considered normal in a developed nation, would once again become affordable and normal.

Other Ways to Help Pay for Water Abundance in California

Enable and Expand Water Markets

Even if a grand bargain is struck between environmentalists, farmers, and water districts, and massive investments are made to increase the supply of water, enabling and expanding water markets will help optimize the distribution of available water resources. Similarly, reforming California’s labyrinthine system of water rights might also help, by making it easier for owners of water rights to sell their allocations. Fostering water markets while protecting water rights have interrelated impacts, and ideally can result in more equitable, appropriate water pricing across the state. It might also help make it unnecessary to impose punitive tiered rates or rationing on household consumers.

Reform Environmentalist Barriers to Development

CEQA, or the California Environmental Quality Act, is a “statute that requires state and local agencies to identify the significant environmental impacts of their actions and to avoid or mitigate those impacts, if feasible.” While the intent behind CEQA is entirely justifiable, in practice it has added time and expense to infrastructure projects in California, often with little if any actual environmental benefit. An excellent summary of how to reform CEQA appeared in the Los Angeles Times in Sept. 2017, written by Byron De Arakal, vice chairman of the Costa Mesa Planning Commission. It mirrors other summaries offered by other informed advocates for reform and can be summarized as follows:

  • End duplicative lawsuits: Put an end to the interminable, costly legal process by disallowing serial, duplicative lawsuits challenging projects that have completed the CEQA process, have been previously litigated and have fulfilled any mitigation orders.
  • Full disclosure of identity of litigants: Require all entities that file CEQA lawsuits to fully disclose their identities and their environmental or, increasingly, non-environmental interest.
  • Outlaw legal delaying tactics: California law already sets goals of wrapping up CEQA lawsuits — including appeals — in nine months, but other court rules still leave room for procedural gamesmanship that push CEQA proceedings past a year and beyond. Without harming the ability of all sides to prepare their cases, those delaying tactics could be outlawed.
  • Prohibit rulings that stop entire project on single issue: Judges can currently toss out an entire project based on a few deficiencies in environmental impact report. Restraints can be added to the law to make “fix-it ticket” remedies the norm, not the exception.
  • Loser pays legal fees: Currently, the losing party in most California civil actions pays the tab for court costs and attorney’s fees, but that’s not always the case with CEQA lawsuits. Those who bring CEQA actions shouldn’t be allowed to skip out of court if they lose without having to pick up the tab of the prevailing party.

Find Other Ways to Reduce Construction Costs

The Sorek desalination plant, commissioned in Israel in 2015, cost $500 million to build and desalinates 185,000 acre feet of water per year. Compared to Carlsbad, which also began operations in 2015, Sorek came online for an astonishing one-sixth the capital cost per unit of capacity. Imagine if the prices Israelis pay to construct desalination plants could be achieved in California. Instead of spending $15 billion to build 1.0 million acre feet of desalination capacity, we would spend less than $3.0 billion. How did they do this?

The bidding process itself adds unnecessary costs to public infrastructure projects. Moving to a design-build process could significantly reduce duplicative work during the plant’s engineering phase. Project labor agreements are another practice that at the very least deserve serious reconsideration. Would it be possible objectively evaluate the impact of project labor agreements, and determine to what extent those mandates increase costs?

What about economies of scale? If ten desalination plants were commissioned all at once, wouldn’t there be an opportunity for tremendous unit savings? What about creativity? Elon Musk, who has disrupted the aerospace industry by building rockets at a fraction of historical prices, said “the construction industry is one of the only sectors in our economy that has not improved its productivity in the last 50 years.” Is he even partly correct? Is that worth looking into?

Shift Government Spending Priorities

Cancel High Speed Rail: The most obvious case of how to redirect funds away from something of marginal value into water infrastructure, which is something with huge public benefit, is to cancel the bullet train. The project is doomed anyway, because it will never attract private capital. But what if Californians were offered the opportunity to preserve the planned bond issuances for high speed rail, tens of billions of capital, but with a new twist? If voters were asked to redirect these funds away from high speed rail and instead towards creating water abundance through massive investment in water infrastructure, there’s a good chance they’d vote yes.

Cancel the Delta Tunnels: By investing in levee hardening, the Delta’s ecosystems can be fortified against a severe earthquake. Reducing the possibility of levee failure protects the Delta ecosystems from their worst environmental threat at the same time as it protects the ability to transfer water from north to south. Investing in hatcheries to increase the population of the threatened Smelt is a far more cost-effective way of safeguarding the survival of that species. And investing in infrastructure on the Southern California coast to make that region water independent greatly reduces the downside of a disruption to water deliveries through the Delta. Canceling the Delta Tunnels would save $20 billion, money that would go a long way towards paying for other vital water infrastructure.

Reform Pensions: The biggest out of control budget item, by far among California’s state and local agencies, is the cost of public sector pensions. A California Policy Center analysis released earlier this year, based on public announcements from CalPERS, estimated that the total employer payments for pensions for California’s state and local government employees is set to nearly double, from $31 billion in 2018 to $59 billion by 2024. And that is a best case baseline. If there is a severe market correction, those required contributions will go up further. No discussion of how to find money for other government operations can take place without understanding the role of pension costs in creating budget constraints.

Reduce State Spending: Other ways to shift spending priorities in California, while worth a discussion, are mostly controversial. Returning the administrator to faculty ratio in California’s UC and CalState systems to its historical level of 1:2 instead of the current 1:1 would also save $2.0 billion per year. Outsourcing CalTrans work and eliminating redundant positions could save $2.5 billion per year. Reducing just state agency headcount and pay/benefits by 20% would save $6.5 billion per year. Just enacting part of that, incremental pension reform for state workers, could stop the runaway cost increases that are otherwise inevitable.

California’s state budget this year has broken $200 billion for the first time. Of that, general fund spending is at $139 billion, also a record. Revenues, however, have set records as well. The rainy day fund is full, and an extra deposit of $2.6 billion has it overflowing. Why not spend that $2.6 billion on water infrastructure? For that matter, why not spend all of the $1.4 billion of cap and trade revenue on water infrastructure?

Financing more water infrastructure will more likely come via public and private debt financing. But redirecting intended future borrowings, in particular for high speed rail and for the Delta Tunnels, could cover most if not all of the infrastructure investments necessary to deliver water abundance to Californians. And at the least, redirecting funds from government operating budgets can defray some of the operating costs, if not some of the capital costs.

Work to Build a Consensus

How many more times will California’s voters approve multi-billion dollar water bonds? The two passed in the last four years, plus the current one set for the November ballot, raise $20 billion, but only $2.5 billion of that goes to reservoir storage. Only another $3.3 billion more goes to any type of supply enhancements – mostly to develop aquifer storage or fund water recycling. Meanwhile, consumers are being required to submit to permanent water rationing, and dubious projects are being funded to save water. Artificial turf is a good example. There isn’t a coach in California who wants their athletes to compete on these dangerous surfaces. On a hot day in Sacramento, the temperature on these “fields” can reach 150 degrees. They are actually keeping sprinkler systems operating on these horrendous boondoggles, just to reduce the deadly heat buildup.

Credibility with voters remains intact to-date, but cannot be taken for granted. If a grand bargain on California’s water future is struck, it will need to promise, then deliver, water abundance to California’s residents.

Change the Conventional Wisdom

California’s current policies have stifled innovation and created artificial scarcity of literally every primary necessity – not just water, but housing, energy and transportation. Each year, to comply with legislative mandates, California’s taxpayers are turning over billions of dollars to attorneys, consultants and bureaucrats, instead of paying engineers and heavy equipment operators to actually build things. The innovation that persists despite California’s unwelcoming policy environment is inspiring.

California’s policymakers have adhered increasingly to a philosophy of limits. Less water consumption. Less energy use. Urban containment. Densification. Fewer cars and more mass transit. But it isn’t working. It isn’t working because California has the highest cost of living in the nation. Using less water and energy never rewards consumers, because the water and energy never were the primary cost within their utility bills – the cost of the infrastructure and overhead was the primary cost.

Changing the conventional wisdom applies to much more than water. It is a vision of abundance instead of scarcity that encompasses every vital area of resource consumption. A completely different approach that could cost less than what it might cost to fully implement scarcity mandates. An approach that would improve the quality of life for all Californians. Without abandoning but merely scaling back the ambition of new conservation and efficiency mandates, embrace supply oriented solutions as well. Build wastewater recycling and desalination plants on the Pacific coast, enough of them to supply California’s massive coastal cities with fresh water. Instead of mandating water rationing for households, put the money that would have been necessary to retrofit all those homes into new ways to reuse water and capture storm runoff.

Paying for all of this wouldn’t have to rely exclusively on public funds. Private sector investment could fund a large percentage of the costs for new water infrastructure. Water supplies could be even more easily balanced by permitting water markets where farmers could sell their water allotments without losing their grandfathered water rights. If the bidding process and litigation burdens were reduced, massive water supply infrastructure could be constructed at far more affordable prices.

The Grand Bargain

Water abundance in California is achievable. The people of California would welcome and support a determined effort to make it a reality. But compromise on a grand scale is necessary to negotiate a grand bargain. Environmentalists would have to accept a few more reservoirs and desalination plants in exchange for plentiful water allocations to threatened ecosystems. Farmers would have to pay more for water in exchange for undiminished quantities. While private financing and revenue bonds could cover much of the expense, taxpayers would bear the burden of some new debt – but in exchange for permanent access to affordable, secure, and most abundant water.

*  *  *

This is the third and final part of an investigation into California’s water future. Part one is “How Much California Water Bond Money is for Storage?,” and part two is “How to Make California’s Southland Water Independent for $30 Billion.” Edward Ring is a co-founder of the California Policy Center and served as its first president.

New Proposed “Voluntary” Tax on the Water You Drink

Drinking waterAnother new tax is headed for your water bill, as if it wasn’t high enough already.

Gov. Jerry Brown has been trying to push through a statewide tax on drinking water, the first ever in California history, and as you might imagine, it has been a challenge for him.

People are fed up with new taxes. That was demonstrated very convincingly in the June recall of state Sen. Josh Newman, D-Fullerton.

All the political tricks that were employed to save him — delaying the election, allowing voters to withdraw their signatures on petitions, lifting the cap on campaign contributions from other politicians — failed to prevent voters from firing the politician who cast a critical vote in favor of a huge increase in gas and car taxes.

That tax hike will face its own reckoning in November, when voters will have the opportunity to repeal it by passing Proposition 6, a ballot measure that also mandates voter approval of any future attempts to raise those taxes.

But despite the clear anger of the voters, or perhaps because of it, the trickery continues.

The water tax proposed in Senate Bill 845 would be “voluntary.”

Here’s the trick: Unless you opt out of paying it, you’ll pay it.

How do you opt out? It will be up to each “community water system” to figure that out, but you can bet the cost of the new paperwork will be added to your water bill some other way.

The purpose of the drinking water tax is to provide clean water for about a million rural residents in areas where the groundwater is contaminated.

That’s certainly important, and you’d think the state would fund that priority with some of the tax money Californians already pay.

You’d be wrong. California’s not run that way. Instead, you pay the highest state taxes in the nation, Sacramento spends all the money on things voters would never approve, and then for anything voters think is important, Sacramento insists on a new bond or tax.

Read your ballot this fall. Politicians are pleading for billions more to pay for water, veterans’ housing and children’s hospitals. No need to ask for more money to pay for state salary increases and Caltrans featherbedding — that’s covered already.

Connected to the proposed water-tax legislation is SB844, which would impose fees on dairy producers and companies that manufacture or distribute fertilizer.

The money would be deposited into the same “Safe and Affordable Drinking Water Fund” set up by the bill that imposes the water tax.

But the dairy and fertilizer producers get something extra for their money: protection from pesky regulators at state and regional water boards

SB844 prohibits certain enforcement actions for “causing or contributing to a condition of pollution or nuisance for nitrate in groundwater.”

The Agricultural Council of California and the Western United Dairymen are in support of these bills, as are the various environmental justice groups that are sure to receive grants from the new pot of money.

The Association of California Water Agencies opposes the legislation.

Nobody asked the water customers for their opinion, but if you’d like to give it to them, call your representatives in the state Assembly and Senate. You can look up their names and contact information at findyourrep.legislature.ca.gov. Don’t delay.

In Sacramento in August, legislation moves like you-know-what through a goose.

olumnist and member of the editorial board of the Southern California News Group, and the author of the book, “How Trump Won.”

This article was originally published by Fox and Hounds Daily

How to Make California’s Southland Water Independent for $30 Billion

The megapolis on California’s southern coast stretches from Ventura County on the northern end, through Los Angeles County, Orange County, down to San Diego County on the border with Mexico. It also includes the western portions of Riverside and San Bernardino counties. Altogether these six counties have a population of 20.5 million residents. According to the California Department of Water Resources, urban users consume 3.7 million acre feet of water per year, and the remaining agricultural users in this region consume an additional 700,000 acre feet.

Much of this water is imported. In an average year, 2.6 million acre feet of water is imported by the water districts serving the residents and businesses in these Southland counties. The 701 mile long California Aqueduct, mainly conveying water from the Sacramento River, contributes 1.4 million acre feet. The 242 mile long Colorado River Aqueduct adds another 1.0 million acre feet. Finally, the Owens River on the east side of the Sierras contributes 250,000 acre feet via the 419 mile long Los Angeles Aqueduct.

California’s Plumbing System
The major interbasin systems of water conveyance, commonly known as aqueducts

California’s Overall Water Supplies Must Increase

Californians have already made tremendous strides conserving water, and the potential savings from more stringent conservation mandates may not yield significant additional savings. Population growth is likely to offset whatever remaining savings that may be achievable via additional conservation.

Meanwhile, the state mandated water requirements for California’s ecosystems continue to increase. The California State Water Board is finalizing “frameworks” that will increase the minimum amount of flow required to be maintained in the Sacramento and San Joaquin rivers order to better protect fish habitat and reduce salinity in the Delta. And, of course, these rivers, along with the Owens and Colorado rivers, are susceptible to droughts which periodically put severe strain on water users in California.

At about the same time, in 2015, California’s legislature began regulating groundwater withdrawals. This measure, while long overdue, puts additional pressure on urban and agricultural users.

California’s water requirements for healthy ecosystems, a robust and growing farm economy, as well as a growing urban population, are set to exceed available supply. Conservation cannot return enough water to the system to fix the problem.

How Can Water Supplies Increase?

In Southern California, runoff capture is an option that appears to have great potential. Despite its arid climate and perennial low rainfall, nearly every year a few storm systems bring torrential rains to the South Coast, inundating the landscape. Until the Los Angeles River was turned into a gigantic culvert starting in 1938, it would routinely flood, with the overflow filling huge aquifers beneath the city. Those aquifers remain, although many are contaminated and require mitigation. Runoff harvesting for aquifer storage represents one tremendous opportunity for Southern Californians to increase their supply of water.

The other possibilities are sewage recycling and desalination. In both cases, Southern California already boasts some of the most advanced plants in the world. The potential for these two technologies to deliver massive quantities of potable water, over a million acre feet per year each, is now predicated more on political and financial considerations than technological challenges.

Recycling Waste Water

Orange County leads the United States in recycling waste water. The Orange County Sanitation District treats 145,000 acre feet per year (130 million gallons per day – “MGD”), sending all of it to the Orange County Water District’s “Ground Water Replenishment System” plant for advanced treatment. The GWRS plant is the biggest of its kind in the world. After being treated to potable standards, 124,000 acre feet per year (110 million GPD), or 85 percent of the waste water, is then injected into aquifers to be stored and pumped back up and reused by residents as potable water. The remainder, containing no toxins and with fewer total dissolved solids than seawater, is discharged harmlessly into the ocean.

Currently the combined water districts in California’s Southland discharge about 1.5 million acre feet (1.3 billion GPD) of treated wastewater each year into the Pacific Ocean. Only a small percentage of this discharge is the treated brine from recycled water. But by using the advanced treatment methods as are employed in Orange County, 85% of wastewater can be recycled to potable standards. This means that merely through water reuse, there is the potential to recycle up to another 1.2 million acre feet per year.

Needless to say, implementing a solution at this scale would require major challenges to be overcome. Currently California’s water districts are only permitted to engage in “indirect potable reuse,” which means the recycled water must be stored in an aquifer or a reservoir prior to being processed as drinking water and entering the water supply. By 2023, it is expected the California Water Board will have completed regulations governing “direct potable reuse,” which would allow recycled water to be immediately returned to the water supply without the intermediate step of being stored in an aquifer or reservoir. In the meantime, it is unlikely that there are enough uncontaminated aquifers or available reservoirs to store the amount of recycled water that could be produced.

Desalinating Seawater

The other source of new water for Southern California, desalination, is already realized in an operating plant, the Carlsbad Desalination Plant in San Diego County. This plant produces 56,000 acre feet per year (50 MGD) of fresh water by processing twice that amount of seawater. It is the largest and most technologically advanced desalination plant in the Western Hemisphere. It is co-located with the Encina Power Station, a facility that uses far more seawater per year, roughly ten times as much, for its cooling systems. The Carlsbad facility diverts a portion of that water for desalination treatment, then returns the saltier “brine” to the much larger outflow of cooling water at the power plant.

Objections to desalination are many, but none of them are insurmountable. The desalination plant proposed for Huntington Beach, for example, will not have the benefit of being co-located with a power plant that consumes far more seawater for its cooling system. Instead, this proposed plant – which will have the same capacity as the Carlsbad plant – will use a large array of “wet filters” situated about 1,500 feet offshore, on the seabed about 40 feet below the surface, to gently intake seawater that can be pumped back to the plant without disrupting marine life. The outgoing brine containing 6 percent salt (compared to 3% in seawater) will be discharged under pressure from an underwater pipe extending about 1,800 feet offshore. By discharging the brine under pressure, it will be instantly disbursed and immediately dissipated in the powerful California current.

While desalination is considered to be energy intensive, a careful comparison of the energy cost to desalinate seawater reveals an interesting fact. It takes a roughly equivalent amount of electricity to power the pumps on the California aqueduct, where six pumping stations lift the water repeatedly as it flows from north to south. To guarantee the water flows south, the California aqueduct is sloped downward by roughly one foot per mile of length, meaning pump stations are essential. The big lift, of course, is over the Tehachapi Mountains, which is the only way to import water into the Los Angeles basin.

Barriers to Implementation – Permitting & Lawsuits

The technological barriers to large scale implementation of water recycling and desalination, while significant, are not the primary impediments. Permitting and financing are far bigger challenges. Moreover, financing costs for these mega projects become more prohibitive because of the difficulties in permitting.

The process necessary to construct the proposed Huntington Beach Desalination Plant is illustrative of just how difficult, if not impossible, it is to get construction permits. The contractor has been involved in the permitting process for 16 years already, and despite significant progress to-date, still expects approval, if it comes, to take another 2-3 years.

One of the problems with permitting most infrastructure in California is that several agencies are involved. These agencies can actually have conflicting requirements. Applicants also end up having to answer the same questions over and over, because the agencies don’t share information. And over the course of decades or more, the regulations change, meaning the applicant has to start the process over again. Compounding the difficulties for applicants are endless rounds of litigation, primarily from well-funded environmentalist organizations. The failure to-date of California’s lawmakers to reform CEQA make these lawsuits potentially endless.

Barriers to Implementation – Financing

Even if permitting were streamlined, and all technical challenges were overcome, it would be a mistake to be glib about financing costs. Based on the actual total cost for the Carlsbad desalination plant, just under $1.0 billion for a capacity of 56,000 acre feet per year, the capital costs to desalinate a million acre feet of seawater would be a daunting $18.0 billion. On the other hand, with permitting reforms, such as creating a one-stop ombudsman agency to adjudicate conflicting regulations and exercise real clout among the dozens of agencies with a stake in the permitting process, billions could be shaved off that total. Similarly, CEQA reforms could shave additional billions off the total. How much could be saved?

The Sorek desalination plant, commissioned in Israel in 2015, cost $500 million to build and desalinates 185,000 acre feet of water per year. Compared to Carlsbad, Sorek came online for an astonishing one-sixth the capital cost per unit of capacity. While there’s undoubtedly more to this story, it is also undeniable that other developed nations are able to deploy large scale desalination plants at far lower costs than here in California.

Financing costs for water recycling, while still staggering, are (at least in California) not comparable to those for desalination. The GWRS water recycling plant in Orange County was built at a capital cost of $905 million – $481 million was the initial cost, the first expansion cost $142 million, and the final expansion cost $282 million. This equates to a capital cost of $7,300 per acre foot of annual yield. If that price were to apply for new facilities to be constructed elsewhere in the southland, one million acre feet of recycling capacity could be built for $7.3 billion. Until there is direct potable reuse, however, it would be necessary to add to that cost the expense of either constructing storage reservoirs, or decontaminating aquifers for underground storage.

It’s anybody’s guess, but with reasonable reforms to contain costs, and taking into account additional investments in aquifer mitigation, a budget to make California’s Southland water independent might look like this:

  • 1.0 million acre feet from water recycling – $7.5 billion
  • 1.0 million acre feet from desalination – $15.0 billion
  • 0.5 million acre feet from runoff capture and aquifer mitigation – $7.5 billion

Total – $30 billion.
How much again is that bullet train? Water abundance in California vs. high speed rail

While runoff capture, water recycling, and desalination have the potential to make Southern California’s coastal megapolis water independent, it will take extraordinary political will and innovative financing to make it happen. The first step is for California’s voters and policymakers alike to recognize that conservation is not enough, that water supplies must be increased. Once the political will is established, it will be necessary to streamline the regulatory process, so cities, water agencies, and private contractors can pursue supply oriented solutions, at realistic prices, with a reasonable certainty that their applications will be approved.

*   *   *

Edward Ring co-founded the California Policy Center and served as its first president. This article originally appeared on the website of the California Policy Center.