Since Drought is the New Normal, Why Aren’t We Maximizing Proposition 1 Funds?
The following Commentary by Cordoba Corporation Managing Partner and Chief Financial Officer Maria Mehranian was published on Fox & Hounds Daily on March 1, 2018:
In recent Fox & Hounds columns, Fox & Hounds Editor and Co-Publisher Joel Fox and the Bay Area Council’s Vice President for Public Policy Adrian Covert rightfully question why the $2.7 billion dollars set aside for additional water storage as part of voter approved $7.5-billion water bond proposal, Proposition 1, has not yet been fully allocated.
While water storage is an important component of California’s overall water strategy, we must also ask the same question about the $4.8 billion earmarked by the passage of Proposition 1 in 2014 for other water quality, water recycling, wastewater, drinking water and groundwater projects. Why have so many of these projects not yet materialized?
Two key factors may be contributing to the fact these projects and their anticipated benefits are not yet realized. First, cities and other local agencies must come up with matching funds in order to pursue many of the Proposition 1 grants for these projects. Many cities and local agencies are already running on tight budgets or cash strapped as they try to make ends meet. Second, many cities and local agencies have not found or pursued creative ways to monetize such projects.
There are some excellent examples of cities and agencies that have successfully pursued such projects. LADWP recently broke ground on its North Hollywood Groundwater Treatment Project, which will clean up and restore the use of groundwater for use as drinking water. Using Proposition 1 funds and its own matching funds for this project, LADWP anticipates reducing its imported water purchases by 50% by 2025, with the ultimate goal of producing 50% of the city’s water supply locally by 2035. Tangible savings will no doubt result from the reduced reliance on imported water, which will likely be reflected in future lower rates.
LADWP has also been very proactive on promoting and implementing stormwater capture projects, which, similar to water treatment and water recycling projects, result in more water being captured and cultivated locally for beneficial reuse, thus reducing reliance on imported water and the cost associated with it. However, not all cities and local agencies have been able to develop, fund and capitalize on such projects.
Proposition 1 identified $200 million for multi-benefit stormwater management projects such as green infrastructure, rainwater and stormwater capture projects, and stormwater treatment facilities. These projects can transform wasteful runoff, which is often the source of contaminants, into a valuable resource where such water can create or enhance open space, watersheds and habitat areas, be used for groundwater recharge, or be reused for other domestic or commercial purposes.
In addition to the environmental and water supply benefits related to stormwater capture, there is a looming stormwater compliance concern that must be addressed. In 2012, the LA Regional Water Quality Control Board adopted its landmark municipal separate storm sewer systems (MS4) permit requiring LA County, LA County Flood Control District, and over 80 municipalities in the County to implement their own stormwater programs. While challenging to implement, the MS4 permit uniquely combines water quality concerns with water supply strategies.
By placing water quality and water supply as two sides of the same coin, the LA County MS4 permit encourages integrated water planning and the development of multibenefit and regional projects that provide more “bang for the buck” through regional collaboration and economies of scale. In addition, the MS4 permit enables cities to develop Watershed Management Plans or several cities in the same watershed to partner in Enhanced Watershed Management Plans.
Such efforts allow for the implementation of the MS4 permit through strategies appropriate for the specific watershed and the use of best management practices (BMPs) and other control measures as they address the highest priority watershed compliance issues.
LA County is currently is working on developing a Safe, Clean Water Program (a water resilience plan) through the collaborative efforts of local city government leaders, environmentalists, business, labor, and other key stakeholders. A first draft of the Program is expected in the spring of 2018, and will continue to be developed with stakeholder input through summer of 2018. A potential funding measure to implement the plan is also under consideration. Once finalized, it will appear as a ballot measure to be considered by LA County voters.
In the meantime, we must look to the State of California to fulfill the promises of Proposition 1, both for water storage as noted by Mssrs. Fox and Covert in their recent Fox & Hounds columns, but importantly, also for the projects earmarked in the measure for the other water quality and water supply projects and programs.
With our cities facing stormwater compliance requirements and deadlines associated with the MS4 permit, we need to reexamine the procedures and mechanisms through which the Proposition 1 funds can be dispersed and/or develop effective strategies to empower cities and local agencies to monetize such projects in the long-term so that they can invest in such projects in the short-term. We cannot afford any further delays in increasing our local water supplies and ensuring we implement enhanced water quality protections.