Authorizes $7.12 billion in new general obligation bonds, and re-allocates $425 million in previously authorized unsold bonds, to fund various water-related programs.

BACKGROUND

Most of the snow and rain that California’s people and economic activities rely on has historically fallen in the northern and eastern parts of the state, whereas the state’s major population centers have developed along the Pacific Coast and in the arid south. To supply cities and to provide irrigation water for agricultural land in the Central Valley and coastal valleys, as well as to manage periodic flooding, in the 20th century, the state and federal governments engineered complex systems for storing and transferring water: the federal Central Valley Project (CVP) and the State Water Project (SWP).

Northern California watersheds feed the state’s two largest rivers, the Sacramento and the San Joaquin, which meet in a delta and estuary, the Bay-Delta Estuary, before flowing into San Pablo and San Francisco bays. Water for the CVP and SWP moves through the area where the rivers converge and is transferred to users around the state; about two-thirds of Californians get some portion of their water for drinking, household uses, and landscaping through this system. About three million acres of farmland, much of that in the San Joaquin Valley, are served. Of this water that has been “developed” for economic purposes, about 20% goes for urban uses, including municipal and industrial uses, and about 80% goes for agriculture. Additional “undeveloped” water meets environmental needs, such as instream flows that support fisheries and other aquatic life. Proportions vary from region to region and from year to year.

By historical standards, the 20th century was unusually wet. Although the century was punctuated by several multi-year droughts, much of the time there was enough snow and rain to support generous allocations of water for agricultural and urban development. But by the first decade of the 21st century, problems had become apparent:

• The state’s system of water allocation was overtaxing the environment, especially fisheries, in the upper watersheds, the Sacramento-San Joaquin Delta, the San Francisco Bay, and California coastal areas.
• Changing climate conditions might affect the amount, location, and timing of precipitation that the water system relies on, creating both increased risks of flooding and delivery uncertainties; drought conditions were likely to become the norm rather than the exception.
• The state’s groundwater aquifers, especially in the agricultural Central Valley, had been overdrafted, in some cases beyond recovery.

Water Rights

California’s system of surface water rights gives priority to owners of land adjacent to waterways and to those whose water rights were acquired before 1914. The same water may be used multiple times by different water rights holders. Although data is not uniformly available for all holders of water rights, several recent studies have found that California has issued water rights for at least five times more surface water than the state receives on average from precipitation.

Groundwater

In California, groundwater is considered to belong to the owner of the land above it, although groundwater is not distributed uniformly within a groundwater basin. For most urban and rural users, surface water is supplemented by groundwater. In the 20th century, groundwater provided 30% to 46% of the water Californians used, depending on whether a year was wet or dry. Unlike the other Western states, extraction (pumping) of groundwater has not been monitored or regulated in most of the state. Legislation just sent to the Governor would regulate the statewide pumping of groundwater for the first time.

HISTORY OF THE BOND

In 2009, the Legislature passed a five-bill water package. It included a plan for the Delta that created coequal goals of providing a more reliable water supply for California and restoring and enhancing the Delta ecosystem, while protecting cultural, recreational, natural resource, and agricultural values of the Delta. It also called for reduced statewide reliance on the Delta. The package included bills for groundwater monitoring, statewide water conservation, and accounting for water diversions. The fifth bill was an $11.14 billion bond proposal, the Safe, Clean, and Reliable Drinking Water Supply Act of 2010. To get legislative support to pass this bond bill, the leadership included funding for a wide range of projects around the state.

This water bond was to be voted on in the general election in November 2010, but the Governor pulled it from the ballot with the concurrence of legislators, sensitive to criticisms of what has been referred to as “pork” in the bond and concerned that California’s voters would not support such a large bond during a statewide recession. With minor modifica­tions, the water bond was rescheduled for the November 2012 ballot but pulled again by Governor Brown and legislators for the same reasons.

Faced with allowing the highly criticized $11.14 billion bond to go to voters in November 2014, and under mounting pressure caused by serious statewide drought conditions, Governor Brown and legislators came together after the regular deadline for placing measures on the ballot to negotiate the present $7.545 billion proposal.

Major issues in bond bill negotiations and in subsequent support for or opposition to the bill focus on (1) funding that would directly advance the Bay Delta Conservation Plan, (2) funding for water purchases that could indirectly advance the Bay Delta Conservation Plan, (3) storage projects, and (4) continuous appropriation of funds for storage projects.

The Bay Delta Conservation Plan (BDCP)

In an effort to address declines of fish species while ensuring a more reliable water supply, CVP and SWP water contractors have developed a habitat conservation plan that includes twin tunnels to run for about 30 miles under the Delta to deliver Sacramento River water directly to export pumps in the south Delta. (These twin tunnels are an alternative to the above-ground Peripheral Canal rejected by California voters on referendum in 1982.) As beneficiaries of the water deliveries, contractors have said that they will pay for the tunnels, which represent about two-thirds of the total project cost. Because they will construct these tunnels with ratepayer rather than taxpayer funding, the project does not require voter approval. The other third of the BDCP project consists of 21 conservation measures intended to restore fisheries and the ecosystem. These are defined under BDCP as public benefits that should be paid for by taxpayers, partly through general obligation bonds. The 2010 water bond included some funding for these public benefits. Because of the controversial nature of the twin tunnels projects, the Governor and legislators tried to make the current bond “BDCP neutral.”

Water Purchases for Environmental Flows

In 2000, state and federal government agencies established an account to buy water from holders of water rights upstream of the Delta to be used for instream flows to benefit fish as well as to ensure reliable water supplies to users south of the Delta. Scientists questioned the benefits to fish, and use of the account was discontinued in 2007. Funds are allocated in Prop. 1 for water purchases associated with enhanced stream flows. Supporters say the bond contains protections against use of the flows to support BDCP and against the kinds of abuses alleged for the earlier water account. Opponents say the bond does not contain adequate protections.

Storage Projects

The bond includes funding for statewide water system operational improvement in four categories: groundwater storage projects, projects that coordinate surface and groundwater use (conjunctive use projects), local/regional surface storage projects, and surface storage projects of statewide significance. Eligible projects in the last category include raising Shasta Dam, expanding Los Vaqueros Reservoir in the Bay Area’s Contra Costa County, building Sites Reservoir west of Interstate 5 in Northern California to provide offstream storage of water pumped from the Sacramento River, and building Temperance Flat Dam on the San Joaquin River above the existing Friant Dam to increase upstream storage capacity. Negotiators disagreed on the proportion of the bond that should be allocated to storage and on the balance of alternative storage, such as underground storage, to traditional above-ground storage projects.

Continuous Appropriation of Funds for Storage Projects

Continuous appropriation means bond funds are not subject to the legislative budget process and go directly to the entity identified to receive them: in this case, the California Water Commission. Proponents of continuous appropriation say that this is necessary to provide a level of certainty for the high level of local investment, and that appropriations decisions are best insulated from legislative politics. Opponents of continuous appropriation say that bond language guiding the Water Commission favors surface storage over invest­ments in underground storage. Opponents also maintain that the Legislature’s role in the budget is an appropriate check on the Administration and, by extension, the Water Commission, who are all gubernatorial appointees.

GENERAL PROVISIONS OF THE WATER BOND

• Clean, Safe, and Reliable Drinking Water, $520 million (7%).
• Protecting Rivers, Lakes, Streams, Coastal Waters, and Watersheds, $1.495 billion (20%).
• Regional Water Security, Climate, and Drought Preparedness, $810 million (11%).
• Statewide Water System Operational Improvement and Drought Preparedness (dams and other storage), $2.7 billion (36%).
• Water Recycling, $725 million (9%).
• Groundwater Sustainability, $900 million (12%).
• Flood Management, $395 million (5%).

See Addendum to Analysis of Proposition Analysis PDF in "Additional Materials" for project details.