Delta Levee Investment Strategy update: Presentation and discussion of the Levee Investment Issue Paper

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At the September meeting of the Delta Stewardship Council, Deputy Executive Officer Cindy Messer updated the council on the progress of the development of the Delta levee investment strategy. The focus of this month’s update is an issue paper that staff have drafted and is currently being circulated for public review.

The issue paper has been prepared at the Council’s direction and summarizes the key topics to be addressed as the Council and staff work to update the Delta Plan’s interim policies for state investments in Delta levees. It will also inform the Council’s levee investment strategy, which will in turn guide the updates to the Delta Plan’s regulatory policies, its recommendations and some of the narrative as its related to state investments in Delta levees, Ms. Messer said.

Many papers, reports, and interviews went into compiling the issue paper. “The first thing we did is we went back to the statute as we always do and took a good look at the wording and the directive from the Delta Reform Act,” she said. “We also went back and looked at the bill analysis for SBX 7-1 around the Delta Reform Act and took a look at what it said in terms of the need for the Council to lead this effort to develop a comprehensive set of recommendations for priorities in state investments for Delta levees. We also looked at a wide range of different reports, technical papers, plans, ranging back from the 50s, the 70s to documents that have been released this year.

Cindy MesserWe did some consultation with some of our sister agencies and talked to some of the key individuals there to make sure that we were characterizing the information we were taking from different programs or plans or reports, running some of the information past them, and also getting their assistance on other resources that we might utilize or couldn’t obtain ourselves, such as some of the older reports,” Ms. Messer said.

Staff also went back to the development of the Delta Plan, and considered the comments, questions, and concerns that were discussed at that time. They’ve also been hearing from stakeholders, and some of their concerns have been factored into the paper, too, she said. “There were a lot of sources of good information. Obviously through the comment period, we will continue to receive additional information, suggestions, and what-not, but it felt like it was a good place to start in drafting this paper.”

Ms. Messer then reviewed the 15 key points contained within the issue paper. “With these 15 points, what we’ve done is to provide some background information around the question, some of the references we used to glean the information from, and then just some key points that we should consider as we move along in our updating process,” she said.

The key points are:

  1. What are the Delta’s levees? The Delta Reform Act calls for the Delta Plan to address project levees, or those that are part of the State Plan of Flood Control, and private, non-project levees. “One of the key points that we want to give some thought to are the levees in Suisun Marsh, which we’ve raised that in this particular question,” she said. In 1996, the subventions program was expanded to include approximately 12 miles of Suisun Marsh levees, and in the Suisun Marsh plan, the Bureau of Reclamation recommends public funding for Suisun Marsh levees be expanded beyond its current limit. “The question really is what is the extent of the state’s interests and the state’s investment in these levees,” she said.
  2. What goals and objectives should state investments in Delta levees further? The Delta Reform Act sets the objectives of reducing risks to people, property, and state interests in the Delta, and the State’s coequal goals warrant consideration as the priorities are set. “One of the things we wanted to acknowledge in this particular key point is that there are going to likely be times where there will be inconsistencies, conflict, complexity to looking at these different goals and objectives, and how we factor all of these into a recommended set of priorities,” Ms Messer said.
  3. What are the state’s interests in the Delta? There is a clear direction in the Delta Reform Act which is to reduce risk to people and property, but what are the state’s interests beyond that? In the issue paper, those interests are defined as being a more reliable water supply for California, protection and restoration of the Delta’s ecosystem, and maintaining the Delta as a place. “Delta as a place includes a myriad of factors,” she said. “Looking at the agricultural economy in the Delta, other infrastructure that’s critical in addition to water management facilities – roads, railroads, gas and energy facilities, telecommunication, and also being mindful of recreation and how that relates to levee improvements and levee related activities; and then protection of the legacy communities.”
  4. What threatens Delta levees?In the paper, we point out that the fact that many of the levees are very old, many of them were not built to certain recognized standards, and they were built using available materials, which are susceptible to different geologic and hydrologic threats, including subsidence, changing inflows, sea level rise, and earthquakes,” said Ms. Messer. “These are the threats that we want to be considering and taking a look at as we go through and update priorities for levee investments.”
  5. Fig 1 Delta Flood Management FacilitiesWho is responsible for the Delta’s levees? The issue paper acknowledges that the responsibility for levees in the Delta is a complex mix that includes private landowners, local maintaining agencies, the Central Valley Flood Protection Board, the Department of Water Resources, the California Water Commission, and the Department of Fish and Wildlife. “The key point here is that it’s a very complex set of players with a lot of different responsibilities, and we know from our experience in establishing the interim priorities that are currently in the Delta Plan that this is a very large group and varied group of interests that we must work with,” she said.
  6. What plans guide the State’s investments in Delta levees? Those plans include the Central Valley Flood Protection Plan, DWR bulletins and plans and studies, and the Delta Protection Commission’s Economic Sustainability Plan.“As we went through our research, we realized there are many state plans, and also non-agency reports, like PPIC reports and others, that really had suggestions and guidance for state investments in Delta levees,” she said. “This is really acknowledging there’s a lot of work that’s been done and how do we bring this all together in a coordinated manner in the work that we are doing.”
  7. How are Delta levee maintenance operations and improvements funded now? The costs of upgrading Delta levees are substantial; the issue paper pegs the number at somewhere between $3.8 to $4.28 billion. These costs, however, are only a small portion of the over $100 billion that is needed for flood management needs statewide. The state has provided and continues to provide the majority of investments in the Delta levee system, totaling about $700 million since the 1970s. The key state programs that provide funding for Delta levees are the Delta Levees Maintenance Subventions Program, the Delta Levees Special Flood Control Projects, and a variety of programs funded by Propositions 84 and 1E. Ms. Messer acknowledged that it is quite complex: “Depending upon what type of activity you’re looking at, whether it’s maintenance, operations, repairs, improvements, there are different responsibilities, different players, different cost share, and different programs,” she said. “The question here within the key point really is taking a look at how we will continue to pay for levee improvements and what will the funding sources be as we move forward.”
  8. What level of Delta levee improvement is warranted? Various plans for the Delta have proposed differing levels of protection, which are often tied to the assets being protected. Those standards include 200-year urban levees, FEMA 100-year levees, PL 84-99, HMP, Bulletin 192, and standards specific to the Suisun Marsh. “We recognize that there are different standards and different plans that recommend levels of improvement for Delta levees,” she said. “Obviously it’s a question that we will be wrestling with as we move through updating our priorities, and it is definitely something that is factored into our Delta levee investment strategy.”
  9. How should levee maintenance and improvement costs be allocated? ‘Beneficiaries pay’ is the principle endorsed by the Delta Plan. In practice, funds for levee maintenance and improvements are derived from either landowners through property taxes or by the state’s general fund, both through direct appropriation or by payments on voter-approved bond initiatives. However, Delta levees benefit many interests including owners and users of water, power, telecommunications and transportation systems. Securing funds from these additional beneficiaries will depend on establishing the Delta flood risk management assessment district as recommended by the Delta Plan. “One of the things that we wanted to bring together in this section is the cost share information, which differs between activities and differs in terms of the levee types,” she said. “Sometimes there’s federal participation, sometimes there’s not, so a very complex topic that we will need to give consideration to as we move through our work.”
  10. What is the federal government’s role? The recent draft of the Army Corps Delta Islands and Levees Feasibility Study concludes that the Army Corps will not recommend federal funding of levee improvements because the costs of those improvements exceed the identified economic benefits, among other reasons. Federal support is not provided for Delta levee’s maintenance, either. However, for project levees in the Delta, especially those protecting urban areas, continued federal assistance is authorized or likely, as well as through FEMA’s HMP and the Army Corps’ PL 84-99 program. “With FEMA’s HMP program and with the Army Corps PL 84-99 program, the ability for local maintaining agencies to remain eligible for these programs is important as these are the programs that will participate in cost-share post disaster for recoveries and repairs of levees, and so we wanted to acknowledge that this really is a key issue. … Without federal assistance for post disaster recovery, the cost to both the state and the locals obviously is increased for repairs and recovery, so something that we will obviously be mindful and paying attention to.”
  11. What conditions should be attached to state funding for levees? In order to receive State funds, local agencies maintaining both project and non-project levees must agree to perform routine maintenance and to agree to indemnify the State from liability for damages, but they are not required to participate in FEMA or the Army Corps levee rehab and repair programs. “As we go through and look at making our recommendations for state investment in Delta levees, being mindful of what the local agencies are required to do or can do will factor into our consideration at some level,” she said.
  12. What provisions should be made to improve habitat for fish and wildlife or to provide public recreation?We recognize in this part of the paper that many of the state plans do at least consider or recognize that there should be provisions made for these other areas, and we describe the different plans and their approach to this,” said Ms. Messer. “A couple key points that became apparent to us as we went through this exercise of putting the paper together is that it may be considered more of a burden to the local agencies as they are wanting to do flood management projects that there’s now this movement towards more multi-beneficial projects including habitat and how that affects the permitting process and costs for things. Another point we raised was how well do we know if we’re meeting the ecosystem objectives that many of these plans have put forward in terms of including these types of provisions in flood management work. There a need for more regular monitoring to let us know if these projects are really paying off in the way it was envisioned.”
  13. What if local agencies don’t act? Many local levee maintaining agencies diligently maintain and improve their levees while others have made little progress. “In the face of not, for whatever reason, being able to do those type of activities, how should we evaluate that? How should we look at the ability of the locals to do their regular maintenance and inspections, and how does that factor in to the work that we’re going to be doing?
  14. How should the State’s levee priorities address the risk of state liability for levee failures? There have been cases where the state has been found to be not liable and other cases where it was. “We wanted to acknowledge in the paper that as we move forward, we want to maintain at least the level that we have, not taking it a step further,” she said.
  15. What about climate change? Rising sea levels and the altered hydrology expected with climate change complicates the development of recommendations for levee projects, and longer term forecasts of increases of sea level of 55” or more seem to suggest that protection of some islands or tracts may become infeasible at some point. A balanced approach needs to consider both the risk of investment in unsustainable infrastructure on the one hand or the premature abandonment of important areas in the Delta on the other. “This is obviously a factor that will complicate our analyses in many ways. We have good information now, we know the data will continue to be generated, it will become better over time, so it’s really going to be a balancing act of looking at in terms of recommending priorities for state investments.

This is not a new exercise,” said Dan Ray. “Beginning in 1975, shortly after the first state funding for levees was put together, the Department of Water Resources developed and the legislature conceptually adopted a plan for improving and maintaining Delta levees, so it did many of the things we’re trying to do here. About every 10 years, that process has been renewed.”

Dan RayHe said that this is the fifth time this task has been undertaken. “There’s a lot to build on and we realized that almost every effort that had been undertaken addressed the very same questions, and that’s part of what leads us to the list of questions that we have.”

One of the things that really stands out is the substantial cost of the levee improvements that are needed, he said. The Central Valley Flood Protection Board’s plan to bring levees up to the basic PL 84-99 standard is about $3.8 to $4.2 billion; the portion for non-project levee is $1.4 billion, he said. “The new water bond has $295 million in it for the traditional programs that support non-project levees, so the gap between what’s needed and what we can accomplish with the funds that are likely to be available in the foreseeable future is substantial, so there’s no doubt that priorities are needed.

Mr. Ray recalled how when the Delta Plan was developed, the discussion and argument centered around how much improvement should be done. “In reality, our challenge now is what improvements are we going to have to defer or be unable to accomplish, and then understanding what that deferral would do in terms of the threats that are there, and how that would affect the state’s interests in the quality of the Delta environment and the hazards to people who live there,” he said.

While the state has made progress, adjusted for inflation, the total cost of improvements required hasn’t changed substantially from the Cal Fed estimate of $1 billion in levee improvements to the most recent investment proposals, he said. “Yet we’ve lost federal participation in the non-project levees, so out of a $1 billion budget that CalFed had estimated for levees, we’ve lost $500 million, so while we’ve made progress in improving levees, the burden we face as a state in terms of funding levee improvements is actually gone up. So the question is what are the first things that we have to do, recognizing that many things are important, and everybody wants good protection.   The challenge of identifying what are we going to be unable to do, and how are we going to make those decisions is substantial.”

Discussion period highlights …

Pat JohnstonCouncil member Patrick Johnston asked if the legislature or the state determined that the investment in a levee rehabilitation program was tied to water exports or some specific state interest?

In a couple different provisions in the water code, the legislature has identified some purposes for the state programs,” said Mr. Ray. “But not as specific as simply being tied to exports. They recognize the important value the levees play in maintaining the Delta’s landforms, it’s winding channels and islands, and the importance of maintaining water quality and protecting health and safety. The special projects program in particular articulates a specific state interest in terms of infrastructure, in addition to the other qualities I’ve talked about that are priorities for them.”

Over 40 years, the state’s invested about $700 million, is that correct?” asks Mr. Johnston; Mr. Ray affirms. “Any estimates of what the other aggregate contributions would be by reclamation districts or local government … ?

We don’t have that number and it’s not well tracked,” said Mr. Ray.

We don’t have a handle on local contributions on levee-flood related issues,” said Council member Phil Isenberg. “The estimate in this report, if I read it correctly, some districts are as low as $50,000 to as high as $100,000. … I can’t believe that reclamation districts are not required to release to the public a document on their budget and spending once a year. “

I think that would be available; the challenge might be to separate out reclamation districts that also have larger drainage or irrigation functions, than those that are strictly managing levees, so the budget might not be representative of their levee budgets,” replied Mr. Ray.

Phil Isenberg 2I think it’s important to scratch out whatever information we can find, and if we can’t find it, to point out with clarity if it’s not required,” said Mr. Isenberg. “I believe the law is that every special district must file a report with the controller … and I would not be shocked if many don’t, particularly the smaller districts, but this is like so many other things. The facts will guide the result, because ultimately the paper preliminarily shows that the Delta, unlike the rest of California, for non-project levees, receives a very high state contribution for payment of costs. That may not be a fully revealed picture, but it’s what I read preliminarily out of this paper, and so I think an effort to try and nail down additional facts … “

Mr. Isenberg said that the most clear observation in the paper was that the federal government was not going to spend a lot of money on non-project levees.

I see no reason to expect there would be substantial federal support for that,” agreed Mr. Ray. “I think we still want to reexamine the benefits the Bureau of Reclamation’s conveyance receives and figure out if there are approaches that would enlist them into helping make that conveyance work,” he said. “The other important thing to recognize is because the levees are so central to California’s federally approved water quality control plan for the Delta, I think it’s useful to think about what other non-traditional sources of federal funds might be available that would typically be used for water quality issues that might be available for some of the levee work that is central to the water quality objectives we are all trying to pursue.”

Larry RuhstallerThe Delta folks have not just sat around and said, oh woe is me, the world is coming to an end,” said Council member Larry Ruhstaller. “The Delta Protection Commission is working on how to put a funding source in place,” he said, referring to the Delta Protection Commission’s project to work on creating a Delta levee assessment district. “All the engineers that you talk to say yes there are solutions, yes you can bring these levees up to a certain level of soundness – it just takes money. Whether the numbers $2 billion or $4 billion, it’s pretty much the same number that we’ve been talking about for the last 30 or 40 years, but the will to spend it has evaporated, or not been as strong as it could be, so Delta Protection is working on that.

As far as the prioritization goes, I would say most of the folks in the Delta would say that we need urban protection,” he continued. “The Delta levees are a system, and if you start to discard islands and non projects, all of a sudden, that system will operate totally differently and the risk of catastrophic failure is more … we all know that there’s going to be the squeaky wheel that gets the grease first, but all the levees need to be maintained.”

Next steps …

Dustin Jones, the Council’s Supervising Engineer for this project, then gave the next steps from here. The issue paper has been posted on the website and is open for a 30-day public comment period. Once comments are collected, they will prepare summaries and consider how to respond.

DustinMr. Jones said they have taken Mr. Ruhstaller’s comments and concerns about involving the stakeholders within the Delta, so they have been keying up outreach efforts and developing a communication plan. “We have begun some listening sessions with stakeholders within the Delta and we are receiving feedback already on this plan that we’re developing,” he said. “We want to make sure everyone knows we are listening to comments out there.”

Council staff have received the draft communications plan from the consultants and have provided comments for that; they’ve also received drafts of the two group charters for the interagency group and the policy group within the Delta levee investment strategy, and they’ve provided comments on those as well, he said.   They are developing a meeting schedule and are working through to be sure they haven’t missed anyone and to make sure that the timeline is realistic. “There are a lot of interests in the Delta that we need to meet with so we have to be aware of our schedule and also our budget when we’re planning all these meetings out,” he said.

Data gathering for the technical side of the studies is underway. “We’ve been analyzing data that’s been provided by the Department of Water Resources in their previous efforts,” said Mr. Jones. “We’ve also developed a list of Delta islands that we’ll be looking at, and we’re going to be forming a consensus on that, looking at the islands and which ones actually need part of the analysis and which ones we may not need. We already know that some of the islands that have been submitted with the Delta list are not leveed islands; they are recognized as islands within the Delta, but they will not be part of our studies simply because they are not leveed.”

Other than that, we’re continuing with our communication buildup and that will take us well into November. Our peer review panel charge is well under development and we have six of the seven members for our peer panel selected and hopefully the seventh member will be relatively soon,” concluded Mr. Jones.

Cindy Messer added that the webpage has information on how to submit comments and that the comment period is open through October 27.

Public comment highlights …

During the public comment period, Melinda Terry, Executive Director for the Central Valley Flood Protection Association reiterated Councilman Ruhstaller’s remarks that the levees function as part of a system. “When you look at the State Plan of Flood Control map, the Delta levees sit in between the Sacramento system and the San Joaquin System, and that goes from Red Bluff down to Fresno, so that’s the state’s responsibility and liability when it comes to the need to reduce risk in the Central Valley,” she said. “In the middle are those non-project levees in the Delta, and they clearly, being in the middle, affect the state’s responsibility for all of those others, and so we hope you will really take a look at that.”

Melinda TerryMs. Terry also noted that funding constraints of the local agencies had been brought earlier. “It’s not just the budget amount that maybe the local island RD can collect, but there are laws that have come into play and constitutional amendments such as Prop 218 which really put constraints on even the money that an RD does raise,” she pointed out. “They are limited by 218 on what that can be spent on because the law was very clear that an assessment has to have benefits for each individual parcel, and they have to be proportional. Anything beyond that they consider it a tax and it has to be done through a different system.”

But it’s not just proportionality, but it’s the benefit itself,” she continued. “Things that are considered general benefits, which might be recreation or habitat – those are not allowed to be covered under that. They have to fall under some of their taxing system so as far as Prop 218, we’re very limited. The money has to go to toward the drainage function that they have and the flood protection.”

Ms. Terry also said she hoped they would work to obtain data from the reclamation districts as she is only seeing mention of obtaining data from the state here, she said. “I hope that you will really look to the local RDs because they have expressed to your [Council] numerous times their frustration over the inaccurate information or really outdated information that the state is using and they would prefer we were using as up to date as we can.

One comment that was brought up briefly by many, including Council members Phil Isenberg, Judge Damrell, and others was the desire to have a chronology included with the issue paper. Ms. Terry also suggested that including dates of flood events is helpful, because major legislation usually was passed after a major flooding event.

For more information …

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