Category: Ecosystems

Drought Watch: Managing—and Learning from—Scarcity

This is part of a continuing series on the impact of the drought.

California is entering a fourth year of drought. The welcome, wet conditions that appeared earlier this winter gave way to dryness during the latter half of December. Although forecasts suggest that wet weather may return later this month, the long-term moisture deficit is unlikely to be erased, leaving the state to continue grappling with water scarcity.

As unpleasant as droughts are, they offer an opportunity to assess how well prepared California is for managing its water resources. The usual approach to learning from droughts is to conduct assessments after the drought ends. Unfortunately, once the rains come—as they certainly will—the pressure to prepare for the next drought is greatly reduced.

Recognizing the need to learn from drought while it is ongoing, PPIC will hold a half-day conference on January 12 in Sacramento. The event, supported by the California Water Foundation, will include two keynote addresses—one on current drought conditions by the state climatologist and another from a member of the Australian National Water Commission on how that country managed an unprecedented, 13-year-long drought. In addition, there will be a conversation with four members of the California State Legislature on legislative priorities for addressing droughts. Finally, panels of state and local leaders will focus on institutional responses to the current drought and proposals for policy reforms in three areas:

Managing urban and agricultural water scarcity. To date, the consequences of the latest drought have varied greatly across California’s geographical regions and economic sectors. Impacts in large urban areas have been modest, while many smaller community water systems have faced significant shortages. Agriculture has been hit particularly hard, but the intensity of the crisis has varied depending on geography and availability of groundwater. The panel will explore wide-ranging proposals to reduce the effects of future droughts on urban and agricultural sectors.

Conserving ecosystems during drought. Acute water scarcity has posed a major challenge for the state and federal agencies charged with managing ecosystems that support fish and waterfowl. Difficult decisions, including temporary reductions in environmental standards and trade-offs between species, were made “on the fly” with limited scientific information. The panel will review lessons learned during this drought and consider new approaches.

Water allocation during drought. The state’s century-old law that governs water rights played a central role in managing the drought during 2014. For the first time since 1977, the State Water Resources Control Board had to restrict surface water use by some water rights holders. In addition, the board had to make tough choices about how to manage water for the environment and how to allocate water to protect public health. The panel will examine the strengths and weaknesses of the current approach to water rights, along with alternative approaches that might reduce conflict during drought.

The conference is now fully booked, with more than 400 participants registered to attend. But you can follow the proceedings via live webcast. PPIC will also post videos of the sessions after the event.

Drought Watch: What’s in Proposition 1?

This is part of a continuing series on the impact of the drought.

California voters are deciding the fate of Proposition 1—a $7.5 billion water bond. If Prop 1 passes, the water sector will get a big boost in funding. Prop 1 contains $7.12 billion in new debt (the remaining $400 million dollars is money that would be re-authorized from previously passed bonds).

So what kind of water projects will be funded if Prop. 1 passes? The bond focuses mainly on water supply ($3.6 billion) with the majority ($2.7 billion) designated as matching funds for storage projects. These matching funds are intended to support up to half the costs of projects that store water either in surface reservoirs or underground aquifers, and they can only be used to fund “public benefits.” Public benefits include, among other things, better flood protection and recreation opportunities, as well as improved environmental conditions. For instance, expanding surface reservoirs makes it possible to store more cold water, which can be released during warm months to support salmon habitat. Likewise, expanding ponds to recharge groundwater basins can create bird habitat.

The California Water Commission will determine which storage projects receive these funds through a competitive process. The rest of the water supply dollars are mainly for matching funds for water recycling and desalination projects ($725 million), with $100 million each for water conservation and groundwater sustainability planning.

Proposition 1 also has funds for the five areas PPIC has identified as critically underfunded “fiscal orphans” in our recent study of water system finance: ecosystems, drinking water quality, flood protection, stormwater pollution management, and integrated water resources management. Of the funds designated for water quality improvements, $520 million is intended for disadvantaged communities and $800 million is for cleaning up groundwater basins that have been contaminated with industrial and agricultural chemicals. Just over half a billion dollars is designed to encourage agencies to collaborate on water management priorities, with funds going to different regions for priority projects in Integrated Regional Water Management plans. These projects would overlap with the previously mentioned categories, and they would need to improve regional self-reliance and help adapt to the effects of climate change.

Since 2000, California voters have approved six water bonds, totaling nearly $20 billion dollars. These bonds looked a little different than Prop 1. Ecosystem improvement and flood protection were the main priorities, with smaller amounts for drinking water quality, integrated management, stormwater, and water supply projects (these bonds also had large amounts for parks and public access). While these bonds provided welcome support to these areas, they also came with fiscal tradeoffs: bonds are repaid with general fund tax dollars that also support other state programs.

The current drought is likely helping the bond’s chances of passage: according to the most recent PPIC Statewide Survey a record-high 68% of all adults say that the supply of water is a big problem in their part of the state. In this context, it is important to keep in mind that while continued investments in our water system will help us be better prepared for future droughts, this bond is not designed to provide immediate relief from the current one. Most water projects take time to design and build. And, whether or not Proposition 1 passes, the state’s water system will face significant challenges that require funding sources more reliable than a bond can provide.

Drought Watch: Water for the Environment

This is part of a continuing series on the impact of the drought.

The ongoing drought has heightened tension over how water is allocated in California. In our recent publication on overall water use in California, we show that the environment uses the largest share—50%—of the state’s water. In contrast, agriculture uses 40% and urban users account for only 10%.

The amount going to the environment may look surprisingly high, but this number is not as straightforward as it may seem. Most of what we call “environmental” water is simply too remote for people to use—or is actually reused for irrigation, drinking water, or other human benefits. In other words, most of the water that goes to the environment does not significantly detract from the overall amount of water available for other purposes.

Here, we look more closely at how the California Department of Water Resources breaks down environmental water use (also see related figure below):

  • Managed wetlands make up state and federal wildlife refuges and account for only 4% of total environmental water use. These wetlands provide critical habitat for migratory and resident birds, along with fish, plants, and other wildlife. Some provide other important ecosystem services like flood protection.

  • Delta outflow accounts for 16% of total environmental water use. The state sets standards for how much water should flow into the Delta from the Sacramento and San Joaquin Rivers, and how much should flow out of it, into San Francisco Bay. These standards seek to meet two primary objectives: protection of native fishes listed under state and federal Endangered Species Acts, and maintenance of water quality standards within the Delta—most notably for salinity—to allow irrigation of farms in the Delta and exports of water to cities and farms elsewhere.

  • Instream flows constitute 18% of statewide environmental use. These are minimum river levels set by state regulatory agencies to meet habitat needs for fish and wildlife in waterways.

  • Rivers designated as “Wild and Scenic” use the bulk of water assigned to the environment—63%. Under federal and state laws, these rivers are protected from the construction of water resources projects—such as dams or diversions—that would adversely impact them. However, most of these rivers are in the state’s remote north coast, where there is little agricultural or urban demand for water and no economically viable way to use it elsewhere. Outside of the north coast, most water in Wild and Scenic Rivers (such as those on the west slope of the Sierra Nevada) is captured in downstream reservoirs and used again for hydropower generation, irrigation, and drinking water.

As this discussion shows, the allocation of limited water supplies is not a matter of simple tradeoffs between the environment and humans. Sometimes, water counted toward environmental use gets used again for something else. Other times, there is no practical alternative use (such as in the north coast). Understanding these basic facts is essential to resolving differences over how to manage water in California.

Drought Watch: Putting Some Myths to Rest

This commentary was first published by the Sacramento Bee on July 6, 2014. Drought Watch is a continuing series on the PPIC Blog.

As the effects of the drought worsen, two persistent water myths are complicating the search for solutions. One is that environmental regulation is causing California’s water scarcity. The other is that conservation alone can bring us into balance. Each myth has different advocates. But both hinder the development of effective policies to manage one of the state’s most important natural resources.

Let’s consider the first myth, that water shortages for farms are the result of too much water being left in streams for fish and wildlife.

Continue reading on Sacbee.com.

Drought Watch: Regional Solutions

This is part of a continuing series on the impact of the drought.

Across California, local water agencies are scrambling to apply for new state matching grants authorized under February’s emergency drought legislation. The program aims to accelerate the use of remaining state bond funds for integrated regional water management: activities in which local agencies team up to generate mutual benefits. One example—water suppliers and stormwater agencies that work together to incorporate captured stormwater into local water supplies. Such projects can simultaneously enhance water supply reliability and the quality of water in rivers and coastal areas.

Regional integration has already led to some significant successes, most notably the enhanced ability of urban water suppliers in Southern California and the Bay Area to cope with the current drought. Successes include ramping up water conservation and recycled wastewater storage to increase supplies in storage, and building new connections between local water systems to enable emergency sharing. Outside funds are often needed to jump start these collaborations, both to encourage innovation and to enable some partners—such as stormwater agencies – to participate even if they don’t have the necessary funds.

But as we showed in our study Paying for Water in California, integrated regional water management is on the brink of fiscal failure because state bond funds are running out. Both the legislature and local water agencies have pushed the idea that bonds should continue to provide these dollars, and the major bond proposals under consideration include substantial new funds for this purpose.

But there might be a better way: adding a small statewide surcharge on water use to support regional projects. Local water agencies have often rejected this idea, arguing that if they send money to Sacramento they won’t see it again. But what if the funds go directly to the regions?

Here’s how we think this could work. The legislature (or state voters) would pass the surcharge and set broad criteria for funding eligibility. The funds would be apportioned to the state’s 12 principal hydrologic regions—the large basins that are already used to divvy up bond funds. But rather than having state agencies award the grants, this task would go to new Regional Water Commissions—regional counterparts to the California Water Commission, the state body tasked with awarding matching grants for storage projects under most bond proposals.

Though more politically tricky to pass than a bond, the statewide water surcharge would have numerous advantages. The revenues would be more reliable than bond funds. And relying on Regional Water Commissions to allocate these dollars could encourage broader collaborations than we have seen from the state-sponsored grant program, which has nearly 50 planning regions, often too small to reap the real benefits of integration. Many groundwater basins, for instance, have different boundaries than the current planning regions, and groundwater agencies could use assistance from these regional funds to support better management.

Finally, this statewide option is preferable to creating local or regional surcharges, which can be difficult to raise without approval of two-thirds of local voters. To raise $200 million annually—the amount that’s been available through bonds—a surcharge 7.5 cents/1,000 gallons on urban water bills would suffice. This would increase the average cost of tap water by just 2.8 percent, while creating a valuable incentive fund that helps local water managers enhance the quality and reliability of regional water supplies. As part of a package with a new bond devoted to areas of true statewide need, a statewide water surcharge would help ensure that our water system can support a healthy economy, society, and environment.

Local Water Funding in the June Primaries

Much of the current water talk in Sacramento surrounds a new state water bond for the November ballot. Yet as we show in our study Paying for Water in California, most water spending—84 percent—is actually raised locally. While passage rates on local water measures have been fairly high since 1995 (72 percent passing), few make it on the ballot (on average only six per year). This is largely because funding for many critical water services—including stormwater management, flood protection, and ecosystem and watershed improvements—often requires two-thirds of voters to approve, and local officials are reluctant to put such measures on the ballot unless they think they can win. In the June 3 primary election, only two local water measures were proposed. The results illustrate the challenges of funding water services that require direct voter approval.

In Contra Costa County, Orinda’s Road and Storm Drain Repair Bond passed with 75 percent approval. It authorizes the city to issue $20 million in general obligation bonds to fund the restoration and repair of roads and storm drains, plus a property tax increase to pay for the bonds. Broader funding measures like this—which include a water service along with something else—have generally been more successful than exclusively water-focused measures. Local governments seem to have recognized this reality and have increased these kinds of measures in recent years. Unfortunately, measures that fund multiple activities may generate less funding than is needed to fill water service gaps.

The second local water measure, the Lake County Healthy Lake Tax, failed with 64 percent approval (repeating an earlier failed attempt in 2012 that had 63 percent approval). It would have increased the local sales tax by one-half cent for 10 years to pay for the eradication of weeds, algae, and invasive mussels from Clear Lake, the restoration of wetlands, and the improvement of water quality.

As the Lake County example suggests, the two-thirds voter threshold for local special taxes and bonds is a significant obstacle. Orinda twice failed to pass measures in the mid-2000s, despite 64 percent approval. Since 1995, 65 percent of the measures requiring two-thirds approval passed, but 84 percent would have passed at the 50 percent threshold that is required for local general taxes and statewide fiscal measures. We can’t know how many more measures would have been put on the ballot had the voter threshold been lower.

Funding these essential water services through local tax and bond measures is a marked contrast to funding for water supply and sewer services, which are paid for with revenues from monthly customer bills. These services are generally in good fiscal shape because when new funds are needed, providers are required only to give customers the opportunity to protest rate increases.

To help address water funding gaps, California should consider treating flood and stormwater services like water and wastewater. It would also be helpful to treat local special taxes like local general taxes and statewide fiscal ballot measures—requiring a simple majority vote. Of course, this would require constitutional reforms. But without these changes, the state will need to provide much more support to local governments to pay for services that are essential to all Californians.

Drought Watch: Improving Environmental Management

This is part of a continuing series on the impact of the drought.

In the previous Drought Watch we examined the need to modernize the way we track water supply and use to better manage droughts. California also needs to modernize how we manage water for the environment during droughts.

By reducing the quality and quantity of habitat, drought poses a broad ecological challenge to California’s fish and wildlife. The stress is particularly acute in watersheds where native species compete with the demands of cities, farms, and forestry for critical land and water supplies. In many watersheds, remaining habitat has become more suitable for invasive, non-native species, which also compete with native species in various ways. The net result can be significant reductions in populations of native species during severe droughts. Recovery can take years.

In a recent blog post, we joined colleagues from UC Davis, UC Hastings, and Stanford to call for reform in the way the state manages the environment during drought. A common approach is to relax flow and water quality standards prescribed for species protection to make more water available for human needs. This year, the State Water Resources Control Board has already done this on numerous occasions, with the concurrence of state and federal fish and wildlife agencies.

This is not necessarily bad drought policy. Regulators have to make difficult choices when there simply is not enough water to go around. However, the process could be improved. Flow and water quality standards for critically dry years are set well in advance of a drought and involve extensive scientific review. In contrast, relaxing standards receives little review, and the process typically does not incorporate plans to mitigate for the consequences, either during or after the drought.

This same ad hoc approach applies to well-meaning efforts to conserve species during a drought. In late April, the governor released an executive order that instructs the California Department of Fish and Wildlife to help endangered fish species, through actions such as monitoring winter run Chinook salmon, improving habitat on state lands, and seeking cooperation from landowners. These are common-sense measures, but if they had been planned for before the drought, they could have been implemented more quickly.

Money for environmental management during a drought is also an afterthought. In his latest state budget, to be considered by the legislature this summer, the governor has proposed approximately $40 million be made available to support actions contained in his executive order. This is a significant increase over the $2.3 million total allocated in emergency state funding in February. Still, this money will not arrive soon enough to make a major difference for this year. Again, planning ahead to raise such funds would be preferable. (See one alternative approach here.)

Good environmental drought policy must anticipate actions that may be necessary to balance human uses of water with the long-term needs of fish and wildlife. The criteria and scientific basis for the relaxation of flow and water quality standards should be developed, reviewed and adopted before a drought emergency. This includes identifying funding mechanisms for emergency responses and mitigation actions that reduce harm during the drought and lead to recovery of species afterward. If California is lucky enough to get through this drought without significant new harm to our native fish and wildlife, let’s make sure we prepare better before the next drought strikes.

Drought Watch: Essential Elements for a Water Bond

This is part of a continuing series on the impact of the drought.

In both houses of the California Legislature, multiple versions of a new water bond are being amended and debated to make the June deadline for replacing the $11.1 billion bond now slated for the November election. Originally intended for the November 2010 ballot, the bond has been twice delayed due to concerns it would not pass. The March 2014 PPIC Statewide Survey showed a bump in public approval since last year, with 50 percent of likely voters now saying they would approve it, up from 42 percent in March 2013. Survey responses to other questions about water suggest that this rise in support likely reflects concerns over the drought. For example, a record share of residents (15%) named water as the most important issue facing the state (up from 2% a year earlier).

As the legislature considers the final size and shape of this new bond, it is worth reviewing how bond funds have been used in the past and the areas that most need bond support in the future.

The 2000s were a big decade for water bonds, with approved funds totaling almost three times as much as the three previous decades combined. Even so, bond funds currently only contribute about $1 billion a year to the water sector, a small portion of the $30 billion that is spent annually on the state’s water system.

Moving forward, new bond funds are likely to be more limited (as shown by the current bond’s bumpy road to approval), so it makes sense to focus them on areas that lack sustainable and reliable funding sources. As we show in our report Paying for Water in California, these areas include small water systems in rural, low-income communities, flood protection, stormwater pollution management, aquatic ecosystem recovery, and integrated water management. The bond funds approved in the 2000s have been spent overwhelmingly in these areas, yet the need is still great.

For activities that more readily raise funds from local ratepayers—such as water supply and wastewater management—future bond support should be limited to projects that generate broad public benefits. This might include water supply projects that promote better integration of our water system (e.g., by capturing stormwater, which can improve both water supply and prevent pollution) or ecosystem recovery (e.g., by improving the quality or quantity of water to support fish and wildlife).

Even if a new water bond passes this fall, California will need to find other ways to pay for small system drinking water quality, critical improvements to flood protection, stormwater management, aquatic ecosystems, and integrated water management. As part of its deliberations, the legislature will need to think beyond bonds, and consider new statewide fees or special taxes—such as a small surcharge on water use or a small increment on the sales tax—to help fill these gaps with a reliable revenue stream.

Chart Source: Paying for Water in California.

Videos Highlight Water Finance Event

The drought has focused attention on water supply and highlights the crucial role of funding in supporting our water system, said Ellen Hanak, PPIC senior fellow, at a half-day conference PPIC hosted last week at the Sacramento Convention Center. The conference focused on the issues highlighted in the PPIC report Paying for Water, which pinpoints funding gaps in five key areas of water management. Hanak opened the conference with a presentation of her report, starting with an overview of how California pays for water. She noted that state general obligation bonds make up just a small part of the $30 billion spent annually on the water system.Most funding, about 85 percent, comes from local sources—rates, fees, and taxes. However, legal obstacles make it difficult for local agencies to raise money. Hanak then summarized the areas in which the state is failing to deliver the level of services California residents expect. She closed with a roadmap of recommendations for funding reform.

In the first panel discussion, experts from local water agencies and the governor’s office took up the issue of “fiscal orphans” for which there is no clear revenue stream—areas such as flood control, stormwater, and safe drinking water for small, disadvantaged communities. panelists talked about their challenges and successes in building better integrated systems in these orphan areas.

The second panel tackled a series of tough questions: How can the state partner with local and regional agencies to improve water management? What has the state done well and what can it do differently? Panelists with both state and local perspectives joined this lively discussion.

The third panel considered some of the legal challenges posed by Propositions 218 and 26. Panelists said these constitutional amendments have pushed water authorities to be more transparent in their use of taxpayer funds. But the measures and the courts’ interpretations of them have also made it more difficult to fund water solutions.

Drought Watch: Saving the Fish

This is part of a continuing series on the impact of the drought.

In a recent California WaterBlog post, Peter Moyle of the University of California, Davis—a frequent collaborator on PPIC projects—highlights an issue not much discussed in the context of this drought: we ignore fish and wildlife at our peril. California is home to 122 different species of native fishes, including 32 kinds of salmon and trout. These fishes are part of the unique natural heritage of California and, as Moyle points out, most are on a trajectory toward extinction. A poorly managed drought can hasten this process.

State and federal laws that protect endangered species reflect the high value society places on native biodiversity. The sweeping Delta Reform Act of 2009, passed by bipartisan majorities, went a step further, placing ecosystem health on par with water supply reliability. Above all, history shows that failure to manage fish and wildlife well during a drought can have very expensive long-term consequences for water management once the rains return.

So what, if anything, is being done for fish in this drought?

The short answer is “not much.” Most discussion at both the state and federal levels has focused not on whether to relax environmental standards, but on how much to relax them. In the coming weeks many petitions will be filed with the State Water Resources Control Board for exemptions from water quality and flow standards. The board has already exempted the Central Valley Project and the State Water Project from meeting flow standards for the Sacramento–San Joaquin Delta, which is home to many endangered fishes, including salmon and steelhead. The emergency drought legislation making its way through the state legislature includes significant sums to provide relief to communities hard hit by the drought, but very little to help reduce stress on the environment. On the federal level, the legislation pending in the House would reduce protections for the environment, while the Senate bill—introduced by California’s two U.S. senators—offers little to improve conditions for fish.

Moyle points out that although native fishes adapt well to drought, they are hampered by the many modifications we have made to our rivers, the way we manage water, and our policies regarding fish harvests and hatcheries. He offers some well-known prescriptions for drought management and some novel ideas, including trucking fish to cool water sources and establishing fish triage panels with the authority to allocate water to keep fish alive through a drought. Equally important, his post reminds us that the actions that help the environment most during a drought are those taken long before the drought begins.