On July 28 of this year, Governor Newsom issued the final water resilience portfolio which calls for a set of actions to meet California water needs through the 21st century.  Specifically, Action 19.4 directs the Water Commission to assess the state’s role in financing conveyance projects that could help meet needs in a changing climate.  At the Commission’s October meeting, commissioners began the work set out for them in the portfolio by considering a background policy brief prepared by staff, hearing a synopsis of initial stakeholder interviews, a presentation from Ellen Hanak with some thoughts on resilience and conveyance, a presentation from DWR’s John Andrew on the intersection of resilience and conveyance, and a proposal from DWR’s Kamyar Guivetchi on a conceptual study of conveyance needs in the San Joaquin Valley.

OVERVIEW OF THE COMMISSION’S ASSESSMENT OF CONVEYANCE

The agenda item began with Assistant Executive Officer Laura Jensen giving an overview of the background policy brief. 

The Water Resilience Portfolio tasks the Commission with assessing a state role in financing conveyance projects that could help meet needs in a changing climate.  The portfolio puts the Commission’s work in the context of enabling regional resilience while continuing to set statewide standards and investing in projects of statewide scale and importance that address challenges beyond the scope of any region.  At the end of this effort, the Commission will produce a white paper and recommendations for state policymakers.

The graphic is a high level overview of the four phases of the work plan and shows the timeline on which its projected to roll out with a projected completion date in the middle of 2021.

At this meeting, the staff is wrapping up phase 1 which includes research and the development of the background policy brief, which was informed by interviews with thought leaders and stakeholders.

 Phase 2 now begins with collecting public input; this will include expert panels at upcoming meetings as well as regional workshops held at different locations around the state. 

In spring of 2021, they will move onto phase 3 and begin developing a draft paper and recommendations, wrapping up in the summer of 2021 with Commission approval of the final paper.

BACKGROUND POLICY BRIEF

The background policy brief is organized into 3 sections.  The first section looks at resilience and conveyance in the context of climate change; the second at determining and assessing public benefits; and the third at financing mechanisms and challenges.  Each section has a suite of guiding questions to frame the considerations before the Commission. 

Section 1: Resilience and conveyance in the context of climate change

Climate change is here and over the coming years, California is expected to experience more of an increased ratio of rain to snow in mountainous regions, causing earlier runoff and reduced natural storage in the snowpack, as well as increased frequency and intensity of both droughts and floods. 

The two together necessitate looking at our current water management system and figuring out where it makes sense to upgrade or improve systems,” said Ms. Jensen.  “These systems may be used differently from historic purposes and there’s a need to promote flexibility and new connections.”

The background policy brief proposes a common definition of resilience because having consistent terminology is important.  “Here we’ve drawn from the ecosystem definition of resilience and the definition reads as the ability of a system to respond to and accommodate change, ensuring its functionality and longevity for an extended time horizon,” said Ms. Jensen.  “By meeting needs in a changing climate, conveyance contributes to water system resilience.”

The terms ‘reliability’ and ‘sustainability’ are sometimes intertwined and conflated with resilience, but while they are related, they aren’t the same thing, she noted.

The staff has considered a broad definition of conveyance that includes traditional conveyance or gray infrastructure such as pipes and canals, green infrastructure such as rivers and streams, and governance, or the legal and regulatory and policy frameworks that underpin the water management system.  Ms. Jensen noted that the Commission will not be considering thru-Delta conveyance as that has its own processes and related conversations.

One salient point from our early conversations in the importance of considering conveyance as part of a water system,” she said.  “Something that connects a water source to a water user, based on water availability and water demand.  In this context, water conveyance becomes a proxy for considering broader water management issues and in absence of context, conveyance can’t really be robustly evaluated based on its impacts on and benefits to a larger system.”

The characteristics of a resilient water system are that it accounts for the needs of the environment and all humans; it’s adaptable, both responsive to and reliable during change or crisis, and guided by long-term planning and thinking.  Conveyance can be itself resilient to climatic stressors responding to periods of flood and drought through increased redundancies or connections within the system and conveyance can promote system-wide resilience by serving larger climate response strategies, such as Flood Managed Aquifer Recharge or Flood MAR.

Part of the Commission’s work will be to consider what criteria should be used to evaluate the resilience of conveyance projects.  Those possible criteria include durability, flexibility, and adaptability; serves multiple beneficiaries; its usefulness during multiple hydrologic conditions; the scale of impact; and partnerships.  Ms. Jensen noted that partnerships are an important facet of possible resilience criteria because they can define ongoing governance.  There will also be a need for operational flexibility as systems continually adapt.

The guiding questions in this section look at the characteristics of resilient conveyance, the criteria that should be used to assess their effectiveness at a variety of levels, whether priority should be given to some types of projects, and how partnerships can promote resilience. 

The slide on the upper right poses some considerations on topics that emerged during staff’s initial research and discussions conducted for phase one, such as, are big projects more critical or is a decentralized approach?  Is there a need for state incentivized planning, a water budget, or state-driven metrics? 

These are things that the Commission can consider, refine, or put aside as it moves forward with the work, or add to it as things come up,” said Ms. Jensen.  “For instance, the Commission may want to consider how water rights could limit the ability to move forward with certain projects, or if watersheds are the appropriate level at which to be working.

Section 2: Determining and assessing public benefits

The second section of the brief looks at determining and assessing public benefits.  State responsibilities can be used to help identify public priorities that may warrant a state investment, and Ms. Jensen noted that the human right to water came up in nearly every conversation staff had during phase one.  Other state responsibilities include enhancing public trust resources, public health and safety, establishing resource goals, and enforcing rules of behavior.

The Commission will be considering how to set state priorities with respect to resilient conveyance and the public benefits that may warrant state financing, and in considering public benefits, the state may want to think about benefits to the people of California that don’t readily accrue to private users, benefits of statewide scale and importance, and benefits to catalyze progress and systemic change.

Determining the value of the public benefits for which the public is paying can be used to demonstrate the need for the state’s investment.  The Commission’s Water Storage Investment Program bases state funding on the value of the public benefits provided; the Army Corps of Engineers pays for the value of identified public benefits and a commensurate percentage of other project costs that cannot be allocated to a particular benefit. 

Ms. Jensen noted that it’s a complex process valuing public benefits and prior to moving forward, may warrant asking some of the considerations posed here, such as would the project move forward without state funding or is there a more cost-effective way to meet public priorities?

The guiding questions in this section consider the public benefits conveyance projects can provide, whether some are more of a public priority than others, and how the state could value these benefits.

Section 3.  Assessing financing mechanisms and challenges. 

There are many ways by which water infrastructure can be financed, but the majority of financing comes from water users themselves from fees paid on water bill or special taxes.  State grants and loans are an important source, such as general obligation bonds like Prop 1 or the State Revolving Fund, or the California Infrastructure and Economic Development Bank or IBANK which provides low-interest loans for infrastructure projects. There are also federal grants and loans, such as EPA’s WIFIA or Water Infrastructure Finance and Innovation Act loan program. 

Emerging financing options include the possibility of federal stimulus funds, enhanced infrastructure finance districts, public-private partnerships, a public goods charge similar to the energy sector, and green bonds.

Ms. Jensen noted there are challenges with some funding sources.  Small rural community water systems lack large enough user base to pay for needed infrastructure or ongoing operations and maintenance, which will likely be exacerbated by the pandemic.  Bonds can be costly to secure and manage and don’t pay for operations and maintenance, and the state budget is also impacted due to challenges associated with the pandemic.  There are also policy challenges as Props 218, 26, and 13 limit water district’s ability to easily secure revenue streams.

The guiding questions in this section, consider how projects are currently funded, what mechanisms are preferred, what innovative mechanisms look like, the challenges associated with financing conveyance, and how best to finance resilient conveyance.

Moving forward, Ms. Jensen said that the Commission will be revisiting guiding questions with new information from panels and workshops and possibly reshaping the questions based on what’s learned, and then ultimately using the information gathered through workshops, panels, and Commission discussions to shape the final paper and recommendations.

STAKEHOLDER INTERVIEWS

Next, Lisa Buetler, Executive Facilitator with Stantec briefly discussed what was learned through their extensive interview process designed to gather information from knowledgeable stakeholders.

We wanted to find out how investment in conveyance infrastructure would improve water resiliency, and we wanted to know how the characteristics of resilience would actually relate to conveyance – that wasn’t a one to one or an easy poll,” she said.  “We wanted to learn the role of the state and the criteria that should be used in making investments and what public benefits might accrue from that.  We wanted to learn how things should be paid for and the challenges for paying for things, and how to continue talking with communities as we move forward in considering this.”

They began with background research which consisted of a literature review and consultation with the research community and financing and conveyance experts.  They next prepared background materials and an initial policy brief and tested interview questions with those who were knowledgeable about the subject.  From there, they convened mixed groups with people from across the state.  There were nine basic questions and the conversations lasted from 30 to 90 minutes.

134 people were invited to participate; 103 were able to do so.  A wide array of stakeholders were engaged, including disadvantaged communities, tribal nations, growers, NGOs, legislators, state and federal agencies, water agencies, and others.

One of the first things that came up was the question of how to define conveyance.  They said to think of it as built infrastructure, use of natural conveyance, and governance.

This is important, particularly when we talked to members of the community that had some concerns about the constructed conveyance processes but were interested in seeing what could be done to improve habitat and ecosystems,” she said.  “The other thing that we learned in this process is that one size doesn’t fit all.  There were some regional variations but there were also some variations in the concerns of particular communities.”

Northern California conveyance concerns

Many in the mountain counties still rely on old mining era ditches and flume systems which are unstable systems subject to quite a few problems.  There are concerns right now with the number of fires going on as there is a sensitivity and fragility to some of the systems.  They also have a very limited ratepayer base and a lot of disadvantaged communities. 

When we talk about disadvantaged communities in California, we have a mindset of what that might look like, but there are a lot of people in the northern and rural mountain counties who are on a limited income and they are people that are part of the ratepayer base, so they don’t have a lot of system elasticity in terms of rates,” Ms. Buetler said.

This particular group was really concerned about was paying attention to the connection between the upper and lower watersheds.  “Many of the benefits of what occurs in the upper watershed accrue much farther down and the people who live in those areas don’t actually see the benefits, so they wanted to find out if there was something that could be done as we thought about conveyance that could create some more equity.”

They also thought it was important to consider the environment, the management of the watershed, and the way that that was done was critical to the overall system health.  One of their interests was interties that would increase flexibility as some of these systems are stranded and without assistance. 

In the Bay Area, there were seismic concerns and they also the thought that the whole system had to be considered to get to resilience.

Central California conveyance concerns

In the Central Valley, subsidence was a pressing and ongoing concern that was brought up in nearly every conversation, said Ms. Buetler.  There are special issues associated with disadvantaged communities where entire communities may not have access to safe clean water; the human right to water was an important part of this conversation.

There was a lot of awareness of the benefits of conveyance as it relates to SGMA and to groundwater banking.  There was also a lot of discussion about flood management and Flood MAR and how the change in climate would really affect the water regime, and the opportunities for changing the way water is managed that could have a lot of resilience benefits.

The Central Coast was included in this group.  The region is not connected to the larger state infrastructure, so their primary focus was on improving local reliability.

Southern conveyance concerns

In Southern California, seismic issues were a concern, both local seismic concerns as well as whole system seismic concerns.  This group was looking at the use of conveyance to help them reduce reliance on imported supply. 

There was a lot of awareness that there may be periods of time, up to three years, where the system would have to be fully self-sustained, and they wanted to make sure however they managed their conveyance, that that would be a feasible thing,” said Ms. Buetler.

There was consensus that the regulatory structures created a lot of uncertainty going forward, given climate change, endangered species, and groundwater issues. 

There was a lot of discussion and concern about the dependence on the full system functionality,” she said.  “Even though we told them we weren’t talking about the Delta, this group felt we needed to have the Delta on the list so it’s been added here.  Also the Central Valley Project and the State Water Project.”

Southeastern conveyance concerns

On the southeastern side of California which depends on the Colorado River, there were interstate and international issues that were of concern. 

There were concerns about water quality and ag to urban transfers and the agricultural improvements that benefit urban areas and how that should be assessed in terms of conveyance and what the tradeoffs and benefits that are accruing should be accounted for.

Disadvantaged communities

In all cases, the underrepresented communities and disadvantaged communities talked about how important it is that they be part of the discussion and part of the decision making input. 

They did not want to have things done to them; they wanted to be engaged in the process of creating solutions,” said Ms. Buetler.

What was learned

When asked about what resilience is and how it should be defined in the context of conveyance, they told us that resilience meant being adaptive to all hydrologic conditions and able to respond to multiple considerations.  It should be flexible.  It should also provide redundancy, which is sometimes counterintuitive for those in government who are trying to work for efficiency, but sometimes redundancy is needed, she said.  They spoke about considering past performance and having a way of reporting and accounting for the contributions to the system in achieving resilience.  They also wanted to make sure whatever was done would be balanced and the range of systems considered. 

In terms of the conveyance criteria, they tried to get at what criteria or scorecard should be used when considering what should be funded.  Things interviewees suggested were multi-benefit, multi-use criteria, the benefit to the overall watershed, a balance of local versus regional infrastructure, and also a balance of existing versus new.  They said that whatever is done with conveyance had to be part of a broader set of solutions, and so they appreciated that this was part of the Governor’s water portfolio.

Interviewees said the conveyance should be more than just supply; it should also be used to increase operational flexibility and has the potential to change storage management, flood management, and groundwater management.

In terms of financing, some said the grant process is sometimes a barrier; they can be problematic or expensive to apply for, and meeting the reporting requirements can sometimes be onerous, so often, they don’t want to apply for a grant.  There was a strong sense that a lot of agencies were really advantaged in the grant process and maybe the people needed the grants the most really weren’t getting them.  Likewise, CEQA and permitting is a concern – not the goals, but rather the cost and time to produce the environmental documents.

For some agencies, Prop 218 is a continuing concern, and for smaller agencies, the matching requirement was also sometimes onerous.  Some expressed concerns that the beneficiary pays process adequately represented the public interests.  There are also public or private investment opportunities and low-interest loans; good interest rates and flexible repayment was important for some of the interviewees.

For priorities, they went spoke about multi-benefit multi-purpose outcomes and the human right to water projects that support SGMA.  There was a big emphasis on SGMA, as well as those projects that enhance and preserve ecosystems.

It was strongly suggested that they should look to the transportation and energy sectors for good examples as well as mechanisms and processes in place for the granting or loaning of money.

ELLEN HANAK: Water conveyance and resilience: Considerations for state support

Ellen Hanak, Director of the Water Policy Center at the PPIC then gave some big picture thinking, beginning with how she thinks about building water system resilience. 

First, there is the changing climate and in particular, the warming which will have impacts directly on both water demands and the snowpack.  Precipitation will become more volatile precipitation, both across years as well as within years, where there will be more of a peak in the mid-winter months and less in the spring and the fall.  There will be more intense droughts and floods.  Ms. Hanak said those are factors that are going to be important for thinking about water supply, flood management, and ecosystem health.

Second, there will be increasing water scarcity as to the extent that we can’t capture and store as much water, supplies will be reduced.  To the extent that it’s hotter, that will increase water demands for irrigation, but even without climate-related changes, there is increasing water scarcity because of the need to manage groundwater basins.  She noted that in the San Joaquin Valley, even with historical hydrology, folks are looking at a significant decline in water availability just to bring groundwater basins into balance.

Third, there are growing water equity concerns.  The issue has been on the radar for at least a decade now about the lack of safe drinking water, especially in a lot of small, disadvantaged rural communities.  There was also a lot of vulnerability for well-dependent communities in terms of supplies.  Now affordability issues are coming to the forefront in a much broader way, including in larger systems.  Flood protection is another water equity issue as a lot of the places that will be subject to more severe floods are also the places where less economically privileged folks live.

Conveyance is the lynchpin for improving resilience

The water system can be thought of as a grid, Ms. Hanak said, presenting maps showing the three components of the water grid at the statewide level.  The map on the left shows the main above-ground storage and conveyance infrastructure, which includes pipelines, canals, and aqueducts.  The map on the right shows the groundwater basins. 

We really need to think about this as a system with surface water and groundwater connected,” she said.  “Conveyance are really the pieces that connect everything, and are the lynchpin for grid upgrades that we’re going to need to make to improve our resilience.”

Conveyance upgrades can help us adapt our system to the changing water storage and flood risk realities.  The climatic changes will make it necessary for us to manage our surface reservoirs differently to have more room for floods because there will be less snow and more rain, and we’re going to have to get more water in the ground in order to do that, she said.  A lot of the capacity for dealing with this is going to be by augmenting groundwater storage, which will also be key under SGMA.

Conveyance can increase the flexibility to manage drought risks by giving water users more capacity to trade water, bank it, or to carry it over; all of that requires the ability to get the water from where it is into the ground and then be able to get it back out again and move it to other places, not just to use it on the land atop the groundwater.

Conveyance can help address inequities in drinking water access and reliability within regions through system consolidations and interties.  For example, the Bay Area did much better in the most recent drought because of investments made in recent decades in interconnecting the different water systems.  She noted that Southern California also has a lot of resilience because of those interconnections. 

It’s also not just building new stuff but fixing what’s broken, Ms. Hanak said.  “Fixing what’s broken doesn’t mean just fixing it exactly the way it used to be before; it means also thinking about adapting it to the new hydrologic realities.  Where are the smart new investments? They may be at the statewide grid or it may be at the regional level.”

Paying for conveyance

Ms. Hanak began by presenting a chart that shows what is spent annually across the entire system, which is basically about $30+ billion a year that’s spent on California’s water system. 

The largest bar is water supply which is urban water systems, irrigation districts, and agricultural systems.  Water quality is the next largest expenditure, which is mainly wastewater systems but also includes stormwater.  Flood management spending is a much smaller bar with just a bit over $2 billion.  Then projects dedicated to freshwater ecosystems, although Ms. Hanak said there is some ecosystem spending embedded in some of the other bars.  About a billion per year is for debt service on past state general obligation bonds.

The colors of the bars show which levels of government are providing that money.  The dark blue, which is the overwhelming majority in water supply, water quality, and even in flood management, are local monies mainly through water rates as well as some local taxes.  State funds are shown in bright orange and account for about 12% per year.  The debt service on prior bonds comes straight out of the general fund.  The yellow is federal spending and accounts for about 3%.

‘Fiscal orphans’ are those needs that consistently lack reliable funding.  This includes poor rural communities, flood protection, and ecosystems.  It also includes collaborative management, because projects that bring together agencies and partners not used to working together need incentives to work together and take some risks.

The main way the state helps with water system improvements and investments is through general obligation bonds.  The chart shows the amount of money that’s been approved over time for water-oriented bonds by the voters.  She noted the big uptick in the 2000s; there were plans for more bonds in the 2010s but Prop 3 in November of 2018 failed to be approved by voters, but other than that, quite a lot of money has been coming through. 

Ms. Hanak noted that with the water bonds, we barely spent more than $1 billion annually for these bonds as it takes time to spend the money.  She also noted that it’s important to remember that they are paid back by the general fund and unless we’re raising taxes to pay for them, that means that the money is coming out of something else that we do with the general fund, so it’s not like its free money. 

In preparing for this presentation, she did some research into the projects that have been funded by Propositions 40, 50, 1E, 84, 1, and 68 to see if there was conveyance or pipelines or distribution systems as part of the project. 

It turns out that there are a lot of them,” said Ms. Hanak.  “There are about 350 projects over the last decade or so that have been funded by a state bond that had at least some conveyance component.  Some of them are pure conveyance projects.  $1.5 billion – so it’s not trivial already what the state is doing through its bonds on conveyance issues.  The biggest category are flood projects and stormwater management projects.”

Drinking water projects were another, which includes interties and projects to fund consolidations.  There were also some improvements to the Friant-Kern Canal in the last decade and a number of canal lining projects such as the All American Canal.  Recycling and desal projects often have distribution system components that make them much more valuable.  Some improvements in conveyance in order to make them more beneficial for ecosystems.  Not much for wastewater, but wastewater funding is done most often through low-interest loans rather than bond funding.

In terms of how to pay for these, Ms. Hanak said that the water users are the main funders right now, and as she sees it, they are going to have to continue to be the main funders.  “I just don’t see how switch to a different way to do that,” she said.  “I think there’s potential for some matching grants where merited, but fundamentally, unless there’s an important water user component, we’re just not going to be continuing to make the kinds of investments that we need to.”

Other local and regional sources are possible, such as land assessments, but it’s important to align incentives when we’re thinking about any kind of funding source.  “We also need to avoid leaning on regressive taxes as we really want to think about an equity lens for a lot of these things.  Right now, there’s been some consideration of using a sales tax within the San Joaquin Valley to pay for a lot of the water system upgrades, and that worries me from an equity perspective because it’s definitely a regressive tax so I think it’s more important to think about getting incentives right on that.

What are the roles for the state?

The state can provide supporting analysis that sheds light on what is the smart strategy and what are the smart plays on conveyance infrastructure, thinking about it in the context of the grid and of resilience.

The state can continue to use grants for the fiscal orphans and especially thinking about the idea of spurring innovative collaborations that think about the watershed and how conveyance fits into that, and how to bring various parties and various beneficiaries to the table together.   

Facilitate pooling of resources and low-cost borrowing

Aligning regulatory approaches to make it easier for folks to use the grid well.  Ms. Hanak acknowledged this isn’t free for the state, but it’s figuring out how to make sure that all of the other pieces work together, not just conveyance projects, but making water available for recharge and connecting flood projects and water supply projects.

In conclusion … 

Some principles for building and funding resilience include increasing the flexibility of the system, developing incentives so that water users and other beneficiaries have the incentives to play and to invest, encouraging alignment across state agencies and programs and requirements including aligning with federal and local requirements, and then promoting multi-benefit approaches. 

Sometimes we can think about a project that can do a lot of things at once, such as the Kern Water Bank which is great for recharging water but also a great ecosystem resource now,” Ms. Hanak said.  “But we can also think about these multi-benefit approaches as kind of broadening the size and scale and how we think about the issues so that we can bring more parties in and more collaboration.  So that’s where I think the watershed approach to thinking about conveyance is going to be important for resilience.”

JOHN ANDREW: The intersection of resilience and conveyance

DWR Assistant Deputy Director John Andrew began by recalling how he was speaking on a panel at an infrastructure forum with Felicia Marcus about sustainability and sustainable infrastructure to be exact, and after his talk, her comment was ‘I like what John just said about sustainability, but I like resilience a whole lot better.’

I think that points out the need to take definitions seriously,” he said.  “Many consider these terms – whether it is resilience or sustainability or adaptation – that they are all the same, and while they certainly have overlaps, they certainly are not the same.  The term resilience is vague, often misunderstood, and often applied inconsistently, and it can have different meetings in different contexts, whether you’re a business person, you’re in disaster and recovery, or in your social services, for that matter.  So I urge the Commission to take the time to define what it means by resilience.”

The common use of resilience really reflects ecological definition, he said.  It’s a rubber band with the ability to return to a previous state.  The definition can be stretched to accommodate more than just bouncing back, but also realignment and reorganization.

But as climate changes the environment, it occurs to me that we may be unable to return to previous states and that at some point, climate change means history will not repeat itself, at least not our natural history and in that case, we may want to perhaps not be resilient unless we define it as such,” he said.  “We may want to do something entirely different.  We may want to reinvent ourselves.  Retreat is talked about in a lot of climate change conversations, or essentially the idea of transformation, so to the extent that the Commission wants to include transformation in its definition of resilience, I think that’s something that probably needs to be explicit.”

Elements of resilience

The slide has a partial list of elements of resilience for the water sector, and the role of conveyance in water sector resilience is noteworthy, he said.  “I have often commented in presentations over the years that we tend to practice a faith-based form of water management in California, and when it comes to resilience, there’s no room for miracles or even wishful thinking.  We need to have a lot of good data and information about the situation that we find ourselves in and the choices that we face.”

Conditions have to be known first before the connections, and besides the physical connections, social connections must also be addressed, he said, noting that one of the ulterior motives of the Department’s Integrated Regional Water Management program is the need to connect the water systems and the need to connect the people.

Flexibility is a fundamental tactic in the changing climate and connections certainly contribute the flexibility and redundancy.  He echoed Lisa Buetler’s earlier comment about the tradeoff or tension between efficiency and redundancy, and said that we need to have some tolerance for some inefficiency if you will because we need to have some redundancy or stand-by capacity.  He also noted that we also need to have some redundancy in our social connections because in many ways, those are more fragile and more perishable than the physical connection.

Because of a changing climate, we’ve entered an era of semi-permanent emergency response,” Mr. Andrew said.  “That’s something we need to learn.  Certainly some of that is mutual aid which has been around for some time now, but a lot of that is connections and interties … so I think conveyance plays a very large role in being able to have emergency response capacity.”

Importance of acting in the face of a changing climate

He also noted that there can be a reluctance to act and to fall back on studying the situation more, but if you combine that with climate change, there are some really deep pitfalls in just wanting not to make a decision. 

We absolutely have to act in the face of a changing climate and we’re certainly not going to reduce the uncertainty around climate change for probably another generation, and we will simply have to, again being brutally honest, we’re going to have to act with a lot of incomplete information.

The prerequisite for acting is the values, and while that may sound odd, a crisis is a poor time to do a visioning exercise.  “You need to know who you are as an organization, what your values are, and not having that kind of self-knowledge when an emergency happens is classically how organizations get tripped up, when they need to know that information about themselves the most,” he said.  “I think we also need to learn especially from failures when we’re acting in a realm of incomplete information.”

Climate resilience and organizations

So in order to foster climate resilience at the Department of Water Resources, they now voluntarily include a resilience chapter in every environmental impact report.  They also started asking voluntary questions on grant applications about the climate resilience of the organizations that we’re distributing taxpayer funds to.  Mr. Andrew assured that it doesn’t affect the Department’s judgment on the application, but they hope it causes some organizations to start thinking about climate change and how it is really going back to values, how is it affecting your organization, and again, your conception of your knowledge of your organization.

I’ll close with a helpful thought that eventually, climate resilience is going to need to be like safety in our sector, and that is part of everybody’s job in the water sector – it’s not something that’s a one-off.”

KAMYAR GUIVETCHI: Study Proposal to Evaluate San Joaquin Valley Conveyance

Kamyar Guivetchi, Manager of DWR’s Division of Planning, then discussed the steps the Department is taking on Water Resilience Portfolio action 19.3 which directs DWR to conduct a feasibility analysis for improved and expanded capacity of federal, state, and local conveyance facilities to enhance water transfers and water markets and that incorporates climate change projections of hydrologic conditions.

Mr. Guivetchi began by acknowledging that conveyance rehabilitation improvements are needed statewide, but due to all of the challenges facing the San Joaquin Valley, they are focusing there first. 

He presented a hydrograph of the American River, pointing out that it’s representative of a number of other major rivers in California.  The gray traces are flows in the American River from October to September from 1980 to 2010; the amber plots are climate change projections for the year 2070 through 2100.  Each trace is a different year, and the darker trace is the median for those years.    

There is a pronounced shift in the peak flows earlier in the season and higher, and you can see the individual traces are significantly higher than the historic traces,” he said.  “At the same time, we see that our summer flows are going to be significantly lower in the summer and fall months.  Because we’ve developed and designed and constructed our water infrastructure for the gray lines, we really need to rethink or transform how we modernize that would include rehabilitation as well as improvements and enhancements to our water infrastructure including conveyance.”

Action 19.3 of the Water Resilience Portfolio directs the Department to conduct a feasibility analysis for improved and expanded capacity of federal, state, and local conveyance facilities to enhance water transfers and water markets. The analysis must incorporate climate change projections of hydrologic conditions.  However, there are other related actions called for in the portfolio about improving groundwater, improving our flood management system, and doing better at climate vulnerability and adaptation, so Mr. Guivetchi said that as they work on this study, they want to make sure they can cross-pollinate their analysis so that it looks beyond water transfers and water markets, and looks at multi-benefit opportunities for helping advance other actions in the portfolio.

The study proposal has three steps:

First step is to engage stakeholders in the San Joaquin Valley, and to review all the prior studies they can find.  The information being developed for the stakeholder assessment for the Commission’s work will help inform step one.  They will then draft a technical memo documenting the findings of prior studies and identifying information gaps.

The second step will be to develop a plan of study that will include stakeholder involvement as well as the information from the literature review and synthesis of prior studies.  The plan of study will then include the purpose, the geographic scope, the tools and methods to be used in the analysis, the climate change assessment methodology and approach, the information on conveyance from prior studies, and any new insights they might have.

The third step will be to conduct the conceptual study.  Mr. Guivetchi noted it is intentionally a conceptual study rather than a feasibility study as that can imply a higher level of detail than might be warranted at this time.  They could recommend some additional studies in the future, if necessary.

EXECUTIVE OFFICER JOE YUN: Summing it up

Executive Officer Joe Yun had some advice for the commissioners as they prepare to take up this project over the next eight months.

Really you can think about your task as Commissioners as making those recommendations that will guide some funding source in the future because there is no designated funding source at the end of this at this time, so you are writing recommendations that will help define how the state behaves with that funding source of the future,” he said.

It can be thought of as recommendations of some of the limitations and incentives.  In some way, the state must figure out how to equitably disburse any funding it would have, so what guides or limits that state involvement?  While local entities provide the bulk of the funding, state funding is also important in that it could be used as match for leveraging other sources of funding.  Certainly there are the incentives that come along with state funding.  Is there an incentive to participate a certain way or innovate or seek partnerships?  There are other things that you’ll have to consider, such as when is a project ready to proceed?” 

There’s an overwhelming amount of information that you’ve heard today and again, we’ll return to this and try to break it down in bite sized chunks over the next 8 months as you think about how you would like to make recommendations that may be tie the upper and lower watersheds, that talk about how we can incentivize behaviors to make water resilient systems.”

DISCUSSION HIGHLIGHTS

Commissioner Samantha Arthur suggested regarding the section about public benefits in the briefing document, could staff bring back lessons learned from Prop 1 from evaluating public benefits and integrating that into a state-supported project process?

Executive Officer Joe Yun said that they will pull in what was learned from Prop 1, but he pointed out that unlike Prop 1, this work is a blank slate.  “In Prop 1, we were given what the public benefits were, so we needed to simply define what we were talking about when we talk about ecosystem improvement or water quality improvement.”

The other thing I would offer to you is one the questions before the Commission could also be, are public benefits the only way to define the state’s share?” Mr. Yun continued.  “As the PPIC slide showed, the state has made conveyance investments using general obligation bonds, so either there’s a broad understanding of public benefit in that work, or they are funding beyond public benefits for some other reason, so there’s also those kinds of elements that we might be able to play with as well.”

Commissioner Alexandre Makler questioned the federal government’s share of funding at 3%, which seems low, given the Central Valley Project.  Would there be opportunities for federal funds in a stimulus package for this type of infrastructure and climate-related water system resilience infrastructure?

Ellen Hanak noted that the slide shows the three year average, although they have done this analysis a number of times since the late 2000s and the results are usually rather similar.  “What we found during the great recession was that the federal share went up to about 5% and that was partly because some of the state and local funding went down in absolute terms, but also there was an impact of stimulus where the feds were able to come in and help out, especially the American Recovery and Reinvestment Act which had an infrastructure focus.  …   there have been discussions about a potential role for stimulus funds in the water sector and where that could help.  Where it mostly helped last time was on water supply and wastewater systems where the state already had some good systems in place where it was very easy to develop shovel-ready projects that can basically spend the money fast because that’s a big goal of stimulus spending is to get the economy going.  There are probably ways that the state could think about how to make some of these other areas of resilience ready for that.”

Commissioner Teresa Alvarado commented regarding Mr. Andrews’ comment about resilience or transformation, she is very interested in exploring innovative approaches to ensure that investments are made in transforming and maximizing our climate benefits in a very transformational way.  “I also liked the idea that we’re learning and we’re acting, that these are processes we’re not going to know the answers for.  I know it’s difficult for the government to invest in pilots and in things that aren’t a sure thing, but we’re going to have to lead in this area and be bold and be smart in our investments.

Commissioner Alvarado then said the Commission needs to talk about how to address governance issues and operating agreements, and what role the state can play to mandate or incentivize collaboration because the state has such a highly fragmented system.

I agree completely with that assessment, and I think that’s where, to the extent that it’s an issue of how California’s many local entities work together, the state can provide some very useful incentives through how it funds by providing matching grants,” said Ms. Hanak. “This is a space where providing some regulatory relief could be helpful too, if you got all the folks working together well and they can present a way that they are going to tackle some problems that are not going to be harmful to the ecosystem and provide various benefits, then maybe that’s a case for getting some of the permits through easier.  There’s a piece where state agencies themselves need to help with their own governance coordination.  We hear all the time about the challenges between the flood side and the water supply side and that applies to the federal government as well.”

PUBLIC COMMENT EXCERPTS

During the public comment period, Geoff Van den Huevel, an advocate for the dairy industry in SGMA implementation expressed support for the Commission’s project. He noted that flood flows are the last bit of water available and those need to be moved into groundwater. “Conveyance is the linchpin of improving a difficult situation – if we’re going to improve it any, it’s going to be through the successful expansion of conveyance.” 

Doug Obegi from NRDC noted that there’s a lot of magical thinking around new conveyance.  From the environmental perspective, he said it’s important to recognize we have devastated our fish and wildlife throughout the Delta watershed. “Conveyance can have similar effects as new dams in terms of, from the downstream fishes perspective, the water is gone, whether it was held behind a dam or put into a canal.”

Justin Frederickson, environmental policy analyst at CFBF noted the importance of the bottom-up approach on what kinds of infrastructure and conveyance is needed out there, because beneficiaries and water users are not necessarily adverse to paying for infrastructure that serves their needs if it makes sense.  “The veto on the Friant Kern Canal fix, because Friant Kern system is the definition of conjunctive use and the best thing we could do to help with SGMA goals in the Valley, and that is state policy, so to decline investing in that was disappointing.” 

Scott Hamilton, chairman of Technical Committee for San Joaquin Valley Blueprint noted that the Blueprint effort is trying to tackle all the challenges: water supply, environmental vision, and to address need of DACs that aren’t being addressed by others.  They are thinking that a large part of the new conveyance will be funded by the beneficiaries.  “But there are public benefits.  Without investment in conveyance, you lose 1 million acres of farmland, and that has implications for tax revenues and human resource implications, especially for disadvantaged communities.  Investment in water is not just an investment in farms, it’s an investment in the communities throughout the Valley.”

Osha Meserve representing Local Agencies of the North Delta pointed out that it’s important to keep in mind there is a huge value to conveying water into the natural system.  Taking water out of the rivers and streams has all kinds of effects on both the water right holders and users in the system, as well as the environment and the fish.  “We’re very concerned about solutions for the south SJV in particular that rely on taking more water out of the Delta as a way to try to address the groundwater overdraft there. … Anything that takes more water away from rivers is very concerning, so I say we should focus on bettering the existing infrastructure first that is leaky and could be repaired, saving water where we waste it, and then maybe looking at what new conveyance that is really needed that won’t harm the environment and water users.”

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