Board) once relied on allocations from the state’s general fund. However, the trend of the last 20 years or so has been to fund activities with permittee fees to support the programs administrated by the agencies, leaving little or no room for outside work. “We are vastly fee-funded,” said


Fran Spivy-Weber, vice chair of the State Water Board, at the PPIC con- ference. “It means we have a narrow window to funnel dollars and that makes it hard to do new projects like climate change adaption.” This issue of Western Water looks at how water use is paid for and the push to make public fi nancing more fl exible.


Bridging the Funding Gap Bonds, the most common form of water project fi nancing, are paid for either by taxpayers (requiring voter approval) or water users. Since 1970, voters have approved more than $23 billion in bonds for water projects, with the money going toward water quality, drinking water, land conserva- tion and habitat protection. The bulk of the funding has been authorized in the past decade, including 2006’s Prop. 84 – a $5.4 billion measure that is the largest water bond in state his- tory. Prop. 84’s large price tag sparked opposition because of concerns the projects under its umbrella did noth- ing to substantially increase the state’s water supply.


A long-delayed, $11 billion water bond is scheduled for the November ballot. It was to have been voted on in 2010 and 2012, but was pulled by the Legislature because of concerns about its prospects for passage. Lawmakers this year are working to craft its re- placement and there are several propos- als from Republicans and Democrats, some of which contain several billion dollars for new water storage. Despite the heavy investment in bonds, only 3 percent of the exist- ing funding for water projects today is bond-sourced, said Hanak, noting “it’s a small piece of the puzzle.” Instead, local rates, fees and taxes carry the weight in ensuring the continued delivery of


May/June 2014


water. The state’s general fund contrib- utes 11 percent and the federal govern- ment 4 percent to the equation, but the latter’s portion “is small and will be declining,” Hanak said. The gist of PPIC’s report is that the costs of water are rising faster than infl ation and that looming obstacles such as Prop. 218 have to be navigated to provide lifeline water service and to begin chipping away at the $2 billion to $3 billion funding gap to assist small, disadvantaged rural communities, fl ood and stormwater management, ecosys- tem support for endangered species and integrated water management. “Although fi lling this gap may seem daunting – particularly to cash- strapped program managers – it is not large relative to the sums California is already spending on water services. In other words, this is a fi xable problem,” the report says.


Getting people to agree to an extra tax to fund stormwater cleanup is not an easy proposition, even in coastal areas that are plagued with reams of litter after large storms. Several cities have attempted to assess special taxes to clean up stormwater, not always successfully.


Stormwater and Runoff 7%


Integrated


Management 10%


Water Supply 7%


Ecosystem 35%


Watch PPIC’s video about “Filling Funding Gaps in California’s Water System”


Flood


Protection 32%


Drinking Water


Quality 9%


Authorized water-related bond funds since 2000 ($15.3 billion) Source: PPIC


7


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