Second water bond hearing: “What’s Changed Since the Legislature Passed the Safe, Clean, and Reliabile Drinking Water Supply Act of 2010?”

On Tuesday, March 12, 2013, the Senate Natural Resources and Water Committee and the Senate Governance and Finance Committee held a joint hearing on the water bond entitled “What’s Changed Since the Legislature Passed the Safe Clean and Reliable Drinking Water Supply Act of 2010?”

On the agenda for today, Ellen Hanak of the Public Policy Institute of California will discuss how the state managed through the most recent drought years, Richard Atwater of the Southern California Water Committee will discuss how stormwater management can be integrated into regional water solutions, Jason Peltier of Westlands Water District and Jonas Minton of the Planning and Conservation League will discuss near-term Delta projects, Jay Lund from UC Davis Center for Watershed Sciences will discuss recent developments in water storage, and Tom Howard from the State Water Resources Control Board will discuss communities that rely on contaminated groundwater.  This hearing is the second in a series of three to be held on the water bond.  (Coverage of the first hearing can be found here.)

Senator Fran Pavley, chair of Senate Natural Resources and Water Committee began by noting that since the water bond was written, other compelling needs have arisen for bonds to fund possibly parks, infrastructure and school modernization, so it is important to look at the bigger picture as we focus on other things.  The focus of today’s hearing is what’s changed since 2009, she said, noting that the handout prepared by staff is very detailed and includes a listing of the water bond, chapter by chapter.

The hearing was co-chaired by Senator Lois Wolk, chair of the Senate Committee on Governance and Finance, who agreed that much has changed since the water bond was first written.  With so many issues now coming to the forefront “tinkering is not going to do it.  We really do need to revisit and revise the bond and start anew.”  Senator Wolk added that a new bond needs to have some strong accountability measures, so that the ordinary citizen and others can easily and transparently get to how much has been spent, where it was spent, and the advantages of that spending.  “I would like to see those measures; I think that’s a different approach than we had in ’09.”

And with that, the speakers were called forward.


Ellen Hanak, senior fellow at the Public Policy Institute of California, gave a retrospective of how the state managed during the recent drought.  “California has lived through droughts before,” she began, noting that when they looked at the impact of drought on the state’s economy, “the conclusion was that because of our variable climate, we are set up as an economy to manage droughts pretty well.

One key reason why the economy is fairly resilient to drought is because a lot of the economic activity is in the urban sector, which is not that reliant on large quantities of water as a production input,” she said.  Urban utilities manage droughts by compressing at the residential level first, and not shorting the industries, commerce or key public health and safety sectors like hospitals, so the job losses in the urban sector aren’t many.

Agriculture tends to suffer more during a drought because water is such a key production input and agriculture is a big user of water, but from the standpoint of the statewide economy, that’s not such an issue as it is such a small share of the economy.  It’s about 1 or 2% depending on how you count it,” she said.

Droughts often spur innovation in water management, and certainly the previous droughts in  the late 80s to early 90s encouraged that in a big way, with many innovations emerging in urban water efficiency, water marketing, groundwater banking, and recycled wastewater.  A lot of the portfolio philosophy we have in California for water management really got a big jump start with that drought, she said: “Those are all foundations that we had for dealing with this latest drought.”

The actual dry years of the latest drought were 2007 through 2009.  A drought emergency was declared for the Central Valley in June 2008, and for the state as a whole in the following year.  The drought emergency declaration was officially lifted in March of 2011.  So how did California manage through the recent drought?  Ms. Hanak recapped:

Urban water savings: This is typically a big area of focus during a drought. There were many drought programs put in place, such as voluntary limits, extra fines, or watering rules, she said.  There aren’t any good statewide estimates yet, but reports from around the state suggest that there was a lot of demand compression in the urban sector; a weak economy and Delta pumping restrictions also contributed to the reduction.  The question is can some of the compression in residential use be maintained?  20% by 2020 can be a basis for helping to encourage utilities to maintain the momentum on that instead of a rebound back to pre-drought levels, she said.  Another problem was that a lot of urban water agencies did not have the kind of rate structure that made them fiscally resilient to drought, so many of them had to raise prices because such a large part of their costs are fixed and don’t get compressed when use goes down.  Utilities are now trying to take a fresh look at how to set themselves up to be fiscally resilient.

The farm economy:  There was a lot of debate and discussion about what the impact of the drought was on the San Joaquin Valley as they are so reliant on imported water supplies and both drought and Delta pumping restrictions were at play.  There were definitely some revenue and job losses due to lower water availability and reduced irrigated acreage; however, there is evidence that some of the drought management tools in place helped to mitigate that, including water marketing that made water available, as well as the traditional drought management tool of increased groundwater pumping.  “We have to think of our groundwater as a drought reserve, and it does make sense to pump more in dry years and let recharge happen in wet years,” but there is the question of the viability of extra dry-year pumping in places that are already severely overdrafted, she cautioned.  There were also some questions about subsidence and impacts on other external things like infrastructure, such as the California Aqueduct.

Hanak - Resilience and the Recent Drought March 2013 (2)_Page_07California’s water market: During the drought, the water market was somewhat helpful, but not nearly as much as during the drought of the late 80s to the early 90s.  “There was a little bit of an uptick during the dry years, but not much; we estimate that only about 500,000 to 600,000 AF in all of extra dry year water was traded during the 2007-2010 period,” she said, noting that one reason it was not as effective was due to infrastructure constraints – “Delta pumping restrictions made it much harder for folks in the Sacramento Valley, who in the past have made water available for dry year trades, to move that water.”  There were also some institutional constraints as the approval process for transfers has become much more complex and changes frequently, which makes us not very nimble in terms of moving in drought situations.  For future droughts, the state can work to relieve some of those constraints.

Hanak - Resilience and the Recent Drought March 2013 (2)_Page_08Groundwater banking: Prior to 2007, the amount in storage in Kern County and Metropolitan’s groundwater banks was 3.5 million acre-feet, it’s highest level.  During the dry years, 2 million acre-feet was made available just through the Kern County and Metropolitan water banks alone.  That‘s not all of the groundwater banking done in the state, but that’s the data we could readily get, Ms. Hanak said.  “In 2011, the balances went way up again.  That shows you the value of a really wet year and the ability to move water through the Delta.  2011 was so wet, there was water for everybody, including being able to pump,” she said.  However, some conflicts emerged over falling groundwater tables in some of the banking areas in Kern County, so groundwater management may need to be strengthened in those areas where banking is occurring so that there are rules are in place to mitigate and handle these kinds of conflicts, she said. There needs to be adequate recharge abilities as well as enough storage south of the Delta to manage in the dry years.

Hanak - Resilience and the Recent Drought March 2013 (2)_Page_09So in conclusion, “California’s economy can handle multiyear droughts but we have to keep innovating to reduce the cost of shortages, especially with our growing economy and growing population.  Delta conveyance does matter for a diversified portfolio – both for water marketing and for groundwater banking. Marketing and groundwater institutions need strengthening.  Expansion of other kinds of diversification tools is important – the idea of reducing reliance on the Delta through water use efficiency and development of other local sources.  And water utilities need to improve their rate structures to accommodate droughts and long term conservation.  It is not necessarily a bond related issue, but something where the legislature might be able to help that challenge,” she said.

  • Click here for Ellen Hanak’s power point presentation.


“The Southern California Water Committee has been working on stormwater since the water bond was enacted by the legislature about 3 years ago, and we’ve worked closely with the new California Water Foundation,” began Richard Atwater, Executive Director of the Southern California Water Committee.

The SCWC has been working closely with the flood control districts, the water districts, the cities, the regional boards, and the state water board within the six Southern California counties on both how to clean up stormwater and also how to capture and store it, said Mr. Atwater.  CWF SCWC NatResources Presentation 3 12 13_Page_04To summarize, about half the water in about half the water in the Southern California coastal plain is imported, and the other half is local; it used to be 60% imported, and the trend is continuing downward, said he said.

Regional water boards regulate stormwater runoff pollution, but historically in SoCal, stormwater has always been captured: “it’s a water supply, it’s part of the adjudications or in the case of Orange County with the Santa Ana river, it’s always been an important part of the river management,” said Mr. Atwater, adding that “the Santa Ana Watershed Project Authority’s success was integrating all of that, and we got lots of multiple benefits both with clean water and water supply.”

Historically, in the state’s water plan, they talk about flood management traditionally the way you think about it in the Central Valley.  However, in Southern California, on the Santa Ana and San Gabriel River, in a dry year like this one, 100% of the stormwater gets stored in a groundwater basin, unless you’re down in Long Beach of Huntington Beach, right on the beach, but otherwise it gets diverted into the river channels and percolates underground, so it’s really part of the local groundwater production,” he said.

CWF SCWC NatResources Presentation 3 12 13_Page_05Since the early 1960s, the San Gabriel River, through the leadership of the Los Angeles County Sanitation Districts, has been recycling wastewater and putting it in the groundwater basins, and if you live in Downey or Long Beach, you drink it, Mr. Atwater said. “I like to point out that if you look at the Santa Ana River watershed, they use the same technology, and 100% of the wastewater produced in the upper watershed upstream of Orange County is either reused in San Bernardino and Riverside County or it flows down the Santa Ana river and goes into the groundwater basin.”  He added that Orange County water districts have spent over a half a billion dollars to recover half of their sewage and put it in the groundwater basin, so “if you drink water at Disneyland, 90% of the water you are drinking there came out of a wastewater sewage treatment plant,” he said, adding that “since the early 1960s with LA County Sanitation Districts, the National Academies of Science, the Rand Corporation, have done multiple health effects studies and it’s always received a clean bill of health.”

CWF SCWC NatResources Presentation 3 12 13_Page_08In Southern California, like everywhere in this state, geography and geology matter a lot, said Mr. Atwater, and stormwater needs to be captured where it can percolate into the deep aquifers.  If you are along the coast,  capturing the stormwater in a rain barrel is a good thing and it helps clean up the beaches, but if you don’t get it in the deep aquifers, when it stops raining, it doesn’t help you a lot as a water supply.

Delta water is valuable in Southern California because of its low salinity, he said, noting that State Water Project water is critical for the San Gabriel and Santa Ana watersheds as Colorado River is way too salty and the State Water Resources Control Board does not allow Colorado River water to be used in the Santa Ana River.

CWF SCWC NatResources Presentation 3 12 13_Page_07In the Chino basin, “What we did 5, 6 years ago, we banked surplus State Water Project with Metropolitan Water District, we built half a billion groundwater desalter, so that nitrates are four times the drinking water standard, we run it through reverse osmosis.  In the City of Ontario, Chino Hills and Chino, 25% of their drinking water supply is coming out of that contaminated groundwater.  The point I want to make is that we integrated that and during the 2007-09 drought, we reduced imported water by half, we increased groundwater production, we conserved water and we doubled the production of recycled water, and that’s how you survive during a drought,” said Mr. Atwater.

CWF SCWC NatResources Presentation 3 12 13_Page_10There are lots of multi-use examples of stormwater capture, from a typical rain barrel at a home to smaller scale and larger scale projects. “We have twelve Army Corps dams in Southern California; if you want to capture a lot more stormwater in the next decade, the Army Corps is a critical opportunity.  I would encourage you to think about that as the Army Corps plays a critical role,” said Mr. Atwater.

There’s been a lot of innovation and creativity over the last decade with integrated watershed management and the Santa Ana River is certainly a case study for some lessons learned of great successes, but what I would highlight is that we ought to encourage those multi-benefit projects and in particular, those that have clean water and urban runoff pollution control,” he said.

In San Fernando Valley, where the City of Los Angeles is very challenged, historic groundwater production has dropped to half of what it was because of Superfund contamination.  “They want to capture more stormwater and they want to put recycled water in it, but they also need to spend $1 billion to clean up the legacy of pollution,” said Mr. Atwater. “So it’s a complicated problem when you say we want to increase local supplies and reduce reliance on the Delta. There are great examples in Southern California where we can do that very well, but in the San Fernando Valley, you have to take the long-term view.  It’s going to take you multiple decades to get there.”

  • Click here for Richard Atwater’s power point presentation.


Jason Peltier, Chief Deputy General Manager of Westlands Water District, began: “I appreciate the opportunity to pause and reflect as looking back at what has changed and hasn’t changed is always a healthy exercise,” he said.  “I think our effort represents a change in how we do business, how we communicate and how we’re conversing in the Delta in a little slice of an area, a little work area for us, but it represents something of real value to those who participated in the process.

The effort was launched out of recognition on the part of the inviters, whose names are the first listed on the letter to the Governor, that while there’s a bunch of big long-term planning processes going on, there was very little going on in the short term: “The problems remain, and the question was can we find a group of people who want to talk about identifying projects that basically don’t have opposition, would contribute in one way or another the state’s goal for water supply and environment, and we were successful at that,” said Mr. Peltier.  “We wanted to see if we could talk about action instead of more studies, and we wanted to test the system in terms of making decisions.”

There is a broad feeling of frustration that we have multiple planning processes going on the Delta, some very large scale like BDCP, and others small and more focused, but in a lot of those different planning efforts we see a big overlap of NEPA/CEQA work,” he said.  “For example, in the Yolo Bypass, we have two plans, two NEPA/CEQA efforts, and many agencies involved with their own drivers.  It’s just insanity to think about all of this process is focused on the same resource, the same ecosystem, and the same land, water, and people.”

About 80 people participated in half dozen half-day meetings where we got together to talk and learn.  The signers of the letter are mostly Delta interests, local governments, reclamation districts, environmental organizations and agricultural interests . Their participation reflects a desire on the part of the Delta interests to get engaged in a process, given that other processes are more formal, more abstract, long-term and not so friendly, he said.

This was a venue to talk about short-term actions. “The group produced a list of 50 projects that people thought should proceed and move ahead in the planning processes, and we also accomplished learning, communication and understanding about these projects and a lot of other things going on in the Delta which is always of value,” he said.

We had a very coarse screen for the projects, noted Mr. Peltier, so they could have problems the group is not aware of.  “We say let them proceed in a normal course of business,” he said, adding: “We did not undertake this effort as a substitute for BDCP or many other processes that are going on, and we did not produce what we thought would be a list of potential candidates for bond funding, although some of them might be valid projects that might deserve broader public funding at some point down the road,” said Mr. Peltier.

This year, we’re focusing on continuing to identify more projects, and we also want to try and go through the list “and see if we can find a half dozen projects that deserve more effort and communicate with the sponsors and find out if there’s anything this group with no real authority  … can do to help you.”

Mr. Pelteir then added that in listening to the first panel, he was ‘intellectually amused’ because in the CDP export area, “we are in what we consider to be a 20 year, 2 decade drought.  We’ve had three years of full supply in the last 20 years, so we have learned many lessons and we’ve suffered,” he said, adding that “while I appreciate that the ag economy is not a significant portion of the state’s economy, as I pointed out, if you live in those areas that have 40, 60, up to 90% shortage in water supply, it doesn’t matter what your relevance is in the state; in your life, it means an awful lot.”  We live in a world where we have shortages and costs going up continually, and “our supply last year, 40% in a good water year and now we’re looking at 25% supply with reservoirs about normal.  Admittedly, we recognize we’ve had little rain for two months, but it’s the nature of our system has moved us through periods like this historically.  Presently the environment regulations that control the system aren’t allowing us to move through that process very well.”

Jonas Minton, Water Policy Advisor with the Planning and Conservation League, then began with “although I do not always agree with my friend and colleague Jason on all matters on water, it’s actually a real pleasure to come here as one of the weird, odd couples on near-term Delta projects,” noting that today he would be talking about real projects that are moving ahead and can be moving ahead.

The Contra Costa Canal supplies the Contra Costa Water District and it is an important piece of infrastructure; it’s an open canal with parts unlined, and so for water supply reliability purposes, they need to line or pipe the canal.  “It’s pretty straightforward, and people say yes, good project,” said Mr. Minton.

Hearing Presentation 3-12-13 v2_Page_04Dutch slough is a restoration project of about 1200 acres suitable for tidal marsh habitat. The land is owned by the Department of Water Resources, and they’ve worked out the arrangements with the counties, which is important for our effort that there be that kind of support.  It’s a great project, said Mr. Minton.

However, the Contra Costa Canal goes right through a portion of Dutch slough, and if you water up Dutch Slough for tidal habitat – tidal habitat means you have to have tidewater on it – you could get brackish water infiltrating their canal, explained Mr. Minton.

Contra Costa already had a grant to pipe a portion of their canal, but not where Dutch Slough is, “so they went and talked to DWR and said hey, what if we switch the order in which we do our lining project.  Let’s line the part by Dutch Slough first.  And DWR, a big massive bureaucracy with rules and regulations said ‘that’s a good idea, OK!’ so this year they are going to go ahead and start both projects.  And what does that do?  It contributes to ecosystem restoration, one of the state’s goals for the Delta, and it contributes to water supply reliability.”

Hearing Presentation 3-12-13 v2_Page_06Knaggs Ranch in the Yolo Basin is another great project.  They grow rice there.  So what is this project?  “Sometimes it isn’t that complicated, folks.  Last year they started with 5 acres.  After they harvested, after there is an economic return to the farmer and by extension to the County, they experiment by flooding it up to see how fish do, and as it turns out that you get bigger fish if they rear in an area off the main channel of the Sacramento River.  You get bigger fish, and bigger fish are better.  What do you get with this project?  You get ecosystem restoration again, and you get a significant contribution to that third objective in 2009, Delta as Place.  So you’re getting extra benefit … and good rice,” said Mr. Minton.

Hearing Presentation 3-12-13 v2_Page_11The McCormick Williamson Tract, located east of Walnut Grove, is owned by the Nature Conservancy; it has possibilities for restoring critical tidal and freshwater marsh as well as flood plain habitat, explained Mr. Minton, but it needs funding and it needs to go through the permitting processes.  “The folks who fund it want to be sure they get benefit from that, and in this case, that might be some of the water contractors, agencies like Metropolitan Water District or Westlands Water District, and they want to be sure they get recognition and that’s a key item to be worked out.”

Hearing Presentation 3-12-13 v2_Page_13The Middle River Corridor runs north to south on the east side of the Delta; it is one of the most important pathways to get water from the Sacramento River down to the pumps in the southern Delta.  “One of the things that came to light in our process is that even if in 10 or 20 years there are new tunnels to convey water, on average, half of the water exported from the Delta will still be exported from the south Delta.  Still half will, and that points out the importance of maintaining and strengthening those levees, certainly in the 10 to 20 years … even if tunnels are built,” said Mr. Minton.

The levee on Lower Roberts Island was recently strengthened by making levee bigger, wider on top, with a more gradual backside.   And just as bigger fish are better, Mr. Minton said:  “Bigger levees are better. They can be more earthquake resilient.  They are not earthquake-proof, but they can increase the reliability of water supply.

Hearing Presentation 3-12-13 v2_Page_15Mr. Minton continued: “So what do you get with a project like this?  You get water supply reliability, you get ecosystem restoration because in some places they make the top wide enough that they can put some riparian shading habitat there, consistent with the Corps of Engineers rules on levees so they actually doing that as well, and you contribute to the objective of Delta as Place, because those levees are not only protecting the pathway of water down to the Central Valley and Southern California, but you are also protecting that agricultural land as well.  A Three-for.”

The list produced 43 projects that 37 opinion leaders say are good to move through the process, although he noted that the group didn’t vet projects, and there could be endangered species or other issues to be dealt with. “They do not solve all of the problems for the Delta.  We still need to tend to these long-term planning efforts, but there are things we can do now.”

Earmarking projects in bonds is not a good way to go, he said:  “However, we can look at past bonds where you’ve established chapters, categories of funding, so things like levees, habitat, seems like that would be consistent with past practice and could make substantial but not complete improvements.”

“I can’t let Jonas go on for too long without finding something to correct,” said Mr. Peltier, jokingly; however, “he made a point about why the water agencies are investing in ecosystem improvements and it’s not just Met and Westlands, it’s Kern, Santa Clara.  We are investing not for recognition – we don’t care about the recognition; we care about the results.  We’ve long recognized that part of increasing water supply reliability of the Delta-derived waters is through a healthy ecosystem so if we can improve the ecosystem by improving intertidal habitat, as we’re working in the Yolo Bypass on the Yolo Ranch or the Suisun Marsh, or McCormick … Recognition’s okay but what we want is a more reliable water supply and that’s the goal and that’s the purpose of our investment.”

Senator Wolk asked Jonas about the price tag.  Mr. Minton said the coarse number was about $1 billion, and there’s probably another half a billion dollars in other projects that he anticipates will be brought forward in this next round of meetings.  Mr. Minton noted that cost sharing is a provision of many of those projects.  Mr. Peltier added that the group didn’t really talk money, as it wasn’t a ‘safe place’.  “We didn’t even go there.  We recognized it and we walked away from it,” he said.

I don’t want to walk away from it, although I do understand the constraints of the group,” said Senator Wolk, adding “one of the failings of the bond from my perspective is that levees are not in there, and maybe this interim bond … ought to have some focus on earthquake resilient levees,” she said.  “What is the cost of the Middle River Corridor?”

Mr. Minton replied that Metropolitan has had several firms looking at the Middle River Corridor.  Some of the levees have already been fully or partially upgraded.  They have been looking at what additional work needs to be done to make them essentially earthquake resilient – “that means essentially shake but don’t break; it means if they overtop, the backside won’t wash it out so when the water recedes the levees will still be there.  They came up with a preliminary rough estimate of bringing the Middle River Corridor up to earthquake resilience of $60 million.”

In terms of time frame, Mr. Minton said that in his experience, some of these projects, particularly if they involve the Corps of Engineers, are ‘multi-generational’ projects.  However, the state has had a levee program in the Delta for decades that is very effective.  “It’s a cost sharing program; they have the staff, they have the regulations, they have the processes, and they know how to do these.  Because these kinds of improvements are strengthened on the land side, it means that no equipment and no earth touches the water.  That means there is no Corps of Engineers permit, and that means these can be done very quickly.  Of course, we have to be sure there are no unusual environmental issues there, but for decades, these projects have moved … this is a one-year process.”


The California water system is almost unique in having a tremendous amount of interconnection – really we have a statewide system,” began Jay Lund, Professor of Civil and Environmental Engineering at UC Davis Center for Watershed Sciences.  “It’s really governed and most water management decisions are made locally, and the previous speakers have done a really good job of showing that.

Storage_Handout March 2013_Page_3California has an overall surface water storage capacity of about 42 million acre-feet and a groundwater storage capacity between 150 million acre-feet to 1.5 billion acre-feet, depending on how you count it.  “The general lesson to get out of that, for long term droughts, groundwater has always been and will always be our biggest source of storage,” said Mr. Lund.  “Our surface water storage is important for droughts, certainly in many localities and even in some important municipal systems, but if we’re going to go through a 6-year drought as a state from a statewide perspective, it’s groundwater that is really important.”

Surface storage can be of two types: on-stream and off-stream.  On-stream storage is very essential for catching floods, but most of the good sites for dams already have dams on them, at least from an engineering perspective, he said. Off-stream storage is how we’ve built most new surface storage in the last 20 years.

Groundwater is a better form of storage for droughts in general, but it’s requires pumping as well as recharge capacity.  “Storage is good, but for water supply, it’s more essential that you actually find water to put in it.  If you have an empty glass, there’s not much water; if you have a bigger glass that is empty, there’s still the same amount of water, and I think that’s lost in a lot of the storage discussions.  You have to have water to put in storage for it to be useful storage,” he said.

Recently, the Contra Costa Water District added 60,000 acre-feet to Los Vaqueros Reservoir, increasing the capacity to 160,000 AF.  It’s a good strategic location for storage and there is potential to expand even more; “I think the site capacity for that location is 1 million AF,” he said.  Other recent storage projects include the San Vicente Dam in San Diego and the spillway changes at Folsom Dam, and getting the necessary work done at Success Dam and Isabella are locally important.

There are some major proposals for expanding surface reservoir capacity, such as the proposed Sites Reservoir, expanding Shasta Dam, the proposed Temperance Flat above Millerton Dam, and the proposal for a small increase on the Merced River.

Many of these proposals are relying on environmental benefits to justify them economically in terms of benefit-cost analysis … most of those analyses are not out.  I looked at the Shasta Dam benefit-cost analysis some time ago and noted that most of the benefits they are relying on for that are related to winter run salmon that are spawning at an unnatural low elevation now and it occurred to me that it might be a way to justify this dam but I’m not sure that’s the best investment of $600 million for winter run salmon,” he said.  “I think some of our storage investigations have looked at can we justify these bits of infrastructure rather than what’s the best way of achieving the fundamental purposes we have in mind for this water system.  I think in terms of agency efforts, some reorientation would be useful in many cases.”

As for groundwater, there has been a steady increase in local management of groundwater; however there is continued overdraft in the Tulare Basin. “We often talk about there being overdraft throughout California.  I think we have localized overdraft in many places in California, but it is in the Tulare Basin where we see the very big numbers,” he said, adding “for the most part, I’m amazed at how in balance the system is in terms of overdraft,” noting that there are other imbalances in terms of water quality, nitrates, salts and other factors.

Various types of water markets have been very useful in the last couple of decades, certainly since the 1991 drought, said Mr. Lund, noting that they’ve really helped agencies to better understand and to use these resources conjunctively.  Markets have provided incentives to for people to find opportunities to get along and cooperate which hasn’t always been the case, he said; there are examples across the state of local water markets helping to make the system run a little more efficiently.

Greater environmental flow requirements in the Delta and its tributaries are a threat to long-term storage for water supply purposes as it will leave less water available to store, “so the storage that you have might not fill as often, because you are required to release some of that water downstream that had a water supply purpose, but it makes the increases in storage more valuable in many cases,” he said.

Water conservation reduces the value of expanding surface water reservoirs, he said, referring to the handout which contained a table summarizing the results of modeling studies done a few years ago.

Click for a larger view.
Click for a larger view.

The table shows what the value of increasing capacity for a variety of dam locations up and down the state, under the different scenarios: with both full exports and no water exports from the Delta, with 30% water conservation for various levels of Delta exports, and with a warmer, drier climate with and without those different levels of conservation.  “So you can see how storage in different parts of the state changes in value, relative values at least, under different kinds of conditions, illustrating how each of these individual projects is connected to a very large and interacting system.  I wouldn’t swear by all of these numbers … but I think they illustrate the general order of magnitude and the general behavior,” he said.

For north of Delta storage, such as Oroville and Folsom Lake, under current climate conditions, from full exports to ending exports, the value of increasing that storage capacity goes down because there is less market for that water.  If you increase the amount of urban water conservation in the system, the value of increasing that storage also goes down, again because there are less valuable demands in the system, Mr. Lund explained.  Conversely, if you have a much warmer, drier climate, the value of that storage goes up considerably, although effects of conservation and effects of exports also can affect this.

However, it is different for south of the Delta, such as Millerton Lake and Lake McClure.  “For those locations, if you ended water exports, instead of the value of storage going down, it goes up dramatically because of that bottleneck at the Delta.  And if you have a drier climate, the cost of the spilled water or the opportunity lost for the spilled water goes way up,” he said.

However, New Don Pedro is a very large reservoir on a moderate sized river with enough storage capacity to capture the average year of flow, so a lot of water can be stored there.  “In that river, if you have a drier climate, the value of expanding that storage goes down.  Why? Because you’d hardly ever have enough water in that river to fill it up.  It is as if you have a really, really huge glass and pretty small pitcher,” he said.

These illustrate how storage decisions are interconnected with a lot of other water management decisions that are made across the whole state “so my major lesson here is that these decisions have to interact,” he said.

In terms of the bond, “I think it’s important for us to encourage the best use of existing storage.  New storage is always going to be expensive; sometimes it will probably be worthwhile, but given its expense and given the opportunity cost of every dollar in the system these days, we have to be very careful about how its spent and how it fits in with other potential investments that we might have,” he said, noting that there is an important role for looking for ways to provide incentives for all these different parties to work together.

I’m pretty pessimistic on the possibility of there being federal match for any of these kinds of investments; even the state providing a match or general obligation funding for this is pretty much unprecedented.  Oroville is the biggest state project; almost all of that was paid for by beneficiaries.  It would set a new precedent to have major state funding for storage so I think those things have to be approached cautiously,” said Mr. Lund.


The State Water Resources Control Board recently released two reports regarding communities that rely on contaminated groundwater, began Tom Howard, Executive Director of the State Water Resources Control Board.  The first report, prepared pursuant to AB2222, identified all communities that rely on groundwater as a primary source of drinking water, the principal contaminants that are found in the source water for those communities, and the potential solutions and funding sources; the second report, prepared with the technical capabilities of Jay Lund and Thomas Harder of UC Davis, issued recommendations to address nitrate in the groundwater in two pilot basins for the study, the Tulare and the Salinas basin.

Tom Howard 3-12-13 presentation Communities report graphics 2lv_Page_2There are many groundwater basins in California that have concentrations in water that exceed maximum contaminant levels, so it’s hardly a surprise that many communities that draw upon that groundwater have to deal with those problems,” he said.  Out of the 2600 community water systems investigated for the report, 680 of those were drawing from aquifers that had pollutants in excess of maximum contaminant levels; these water systems are delivering water to over 21 million people.  However, it’s important to realize that most communities are capable of dealing with those problems; they can treat the water, or they can blend it in various ways to ensure that the water that is delivered to the customers meets all the maximum contaminant levels established by the Department of Public Health.  “In fact, DOH says 98% of people consistently receive water that is in compliance with all maximum contaminant levels,” he noted.

Tom Howard 3-12-13 presentation Communities report graphics 2lv_Page_3The larger communities have the capacity and ability to deliver high quality water to their customers, but the smaller or more disadvantaged the community is, the more likely they are to deliver water that exceeds maximum contaminant levels to their customers, he said: ”Of the 680 systems we found that were relying on source water with polluted water, we found that 265 of those systems have at least a couple of times over the last 8 years, and in some cases consistently, have been delivering water that exceeds one or more maximum contaminant loads.”

This study just dealt with public water systems which are defined as having 15 connections or greater, but it’s important to realize that there are 2 million Californians who rely on private wells or systems with fewer than 15 connections: “They are completely unregulated and in many cases, if there’s a problem in the groundwater system in a particular area, they are more susceptible to the problem of delivering water because they generally have more shallow wells which are more likely to be polluted by different types of materials.”

Tom Howard 3-12-13 presentation Communities report graphics 2lv_Page_4The most common pollutant found was arsenic, a naturally occurring pollutant; after that was nitrate, generally a man made problem and principally agricultural in nature; third was various nucleotides and uranium, both naturally occurring.  There are other human caused pollutants, such as PCE, perchlorate, and TCE, but “really the vast bulk of the problem is arsenic and nitrate.”

The second report was just for study areas of the Tulare and Salinas basins, and identified that 96% of the nitrate load in those basins was agriculturally derived.  The problem of nitrate pollution will persist, even if all new source inputs are removed, because there is a very large load of nitrates in the soil column, mostly from fertilizers, but dairy issues as well, Mr. Howard said.  In some areas, there may be localized concentrations due to concentrations of septic tanks or industries, such as food processors, that discharge to land, “but generally when you find these widespread problems, it’s an agriculturally derived issue,” he said.

There are three things that can be done, Mr. Howard said: clean up the basin, put programs in place for pollution prevention or source control, or use treatment or alternative supplies at the point of use.

Clean up is a good alternative if you are dealing with a point source type of pollutant, such as a spill or leaking undergrounds storage tanks, he said, noting the State Water Board has programs in place for that, but four the top four pollutants, “these are either naturally occurring or they are very broadly distributed and the idea of trying to clean them up is infeasible.  Just the costs are beyond the capability of any entity to deal with them because of their wide distribution,” he said.

Pollution prevention and source control is a far preferable alternative to trying to clean up, but not very useful for at least three of the four principal pollutants, he said, noting that there are opportunities in nitrate pollution to deal with source control and the water board is looking at those now.

Senator Wolk asked Mr. Howard what can be done about arsenic.  Mr. Howard replied that arsenic is a naturally occurring pollutant that is widespread in much of California.  It can be treated at the source but when it is widespread, it is impractical to try to pump the water out, clean it up, and put it back in the basin.  That’s the problem with the four principal pollutants which account for 90% of the problems found in wells.  “It shows that while widespread clean up of the basin is desirable, it’s really not going to be solution,” said Mr. Howard.

With nitrates, if it’s irrigated agriculture, the question is if it is possible to control nitrate application so that a greater percentage of the nitrate uptake goes into the crop as opposed to excess nitrogen applications that may result in percolation into the groundwater basin, Mr. Howard explained.  UC Davis found that while it is possible to make some improvements at a relatively low cost, trying to reduce the nitrate load sufficiently to meet maximum contaminant levels in the groundwater basin, the cost is quite high to the farmer.  There are activities that can be done: the Department of Food and Agriculture’s Fertilizer Research and Education Program is working to develop information to be used to ensure appropriate nitrogen applications, and both the Central Coast and the Central Valley RWQCBs are requiring nutrient application reporting.

We are beginning to assess the issue of whether we should be dealing with this in a regulatory framework, so we are moving forward with the Department of Food and Agriculture assessment of whether a nitrogen application accounting methodology should be established for farmers, and the water board is putting together an expert panel to advise it as to what a regulatory program should look like that would be effective, cost efficient, and effective for control of nitrates, Mr. Howard noted.

For large communities, treatment is an alternative and they are capable of dealing with that independently, but the smaller communities are going to need assistance from the state, not only in the infrastructure, but in the operations and maintenance of these systems, said Mr. Howard, stating that ongoing operations and maintenance is probably not a good bond funded activity, so it will require some sort of ongoing funding to augment any bonds.

The US EPA estimates that clean water infrastructure needs in California over the next 20 years are about $40 billion; most of those will be dealt with by large communities paying their own costs, so really the issue I think the committee should focus on how to deal with the communities who are incapable of dealing with it themselves,” noting that in the pilot area, UC Davis estimated that it would cost $25 to $30 million annually to deal with all of the small communities in those two basins.  “That’s really a pretty sizeable chunk of the amount necessary to deal with this problem; you’re probably looking at $100 million or so annually for both capital costs and ongoing operations and maintenance,” he said.

It’s my understanding that Prop 50 and 84 funding has been allocated for drinking water; the state’s revolving fund has $150 to $200 million annually, but this is mostly loan money and not very useful for these small, disadvantaged communities, he said.  “In 2012, AB 685 was adopted which stated that everyone had a right to clean, affordable, accessible drinking water … there is a broad need but I think the focus should be on the disadvantaged communities, and that ongoing funding will also necessary,” he said, closing with the reminder that 2 million Californians rely on groundwater not captured by any of these approaches because they are on individual drinking water wells or systems with less than 15 connections.

Senator Pavley noted that on chart of community water systems relying on contaminated water, Los Angeles County is at the top.  Mr. Howard replied that in Los Angeles County, a lot of groundwater wells are contaminated from pollution that occurred back in the 30s and 40s from the aerospace and other industries that have contaminated the groundwater basins with solvents and perchlorates.  “We just find problems all through that basin.”  Due to the widespread nature of the pollution, the solution is often wellhead treatment.

However, “I just think that there needs to be a system in place that ensures that all communities have the capacity to achieve drinking water levels.  In most cases, it will be through local funding sources because of economies of scale, but the state will have to step forward in disadvantaged communities where economies of scale make it infeasible to deliver drinkable water,” he said.

  • Click here for Thomas Howard’s handout.
  • Click here for the State Water Board report, “Communities That Rely on a Contaminated Drinking Water Source”
  • Click here for the UC Davis Report, Addressing Nitrates in California’s Drinking Water with a Focus on the Salinas and Tulare Basin.
  • Click here for the State Water Resources Control Board Report, “Recommendations Addressing Nitrate in Groundwater.”


  • Watch the hearing at the California Channel by clicking here.
  • Click here for the Committee staff report on the water bond.

Other Hearing Materials:

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