May 6, 2004 - From the February, 2002 issue

California Resources Secretary On Water, Open Space & Infrastructure

In the past year because of the energy crisis, our major urban municipalities' growing lack of open space and the possibility of another severe water shortage, the people of California have been reminded just how important our natural resources are to the future livability and quality of life of California. To continue to help flesh out the resource needs and priorities in our state, MIR is pleased to continue our on-going dialogue with Mary Nichols, California Secretary of Resources. In this interview Mary brings us up to date on the successes of Prop. 12 and the need for Prop. 40, the role of the Department of Water Resources in both the CalFed experiment and last summer's energy crisis and, with the primary election just around the corner, the importance of electing a Governor with a prominent focus on improving our state's infrastructure.


Mary Nichols

Mary, why do we need more park bond money? What positive impacts have past open space investments had on the quality of life in California? And how well have we spent Prop. 12 dollars?

Before Prop. 12 was approved by the voters, this state lived through a 12-year drought in which no new bond money was infused into the system for land acquisition and park construction. Those functions came to a halt at the state level.

Because of that lack of investment, a number of projects were put on hold until funding became available. And when Prop. 12 was approved, those projects were able to proceed. That paradigm has caused the majority of the Prop. 12 allocation to be spent or appropriated.

Let's review what precisely what was accomplished by the passage in 2000 of the largest park bond measure in the state's history. How should the taxpayers and the voters judge the success of Prop. 12?

Southern California residents can look at the new state conservancies-Baldwin Hills Conservancy and Lower Los Angeles and San Gabriel Rivers and Mountains Conservancy-as two very important places where funding was allocated. Additionally, the Santa Monica Mountains Conservancy, the Coastal Conservancy and the state park system have all been able to purchase and make land available to the public that wasn't there before Prop. 12.

The situation is similar in Northern California where one the largest land acquisition projects in state history is currently in process. The Mill Creek Project will preserve an enormous amount of redwood and watershed land near some of the most important salmon areas in the state. A number of other areas that were also purchased will be maintained primarily as wildlife preserves.

And how does that relate to the March ballot and Prop. 40? How will a new bond measure help the state achieve its stated goals and objectives re: the environment?

One of the good things about Prop. 40 is that approx. one-third of the proposed allocation will go directly to cities and counties according to a per capita formula. For the first time, those municipalities will be guaranteed to receive substantial funding.

The importance of that is that we're seeing growth throughout the state and many of these areas do not have enough parks within or in proximity to their jurisdictions. Prop. 40 addresses the need for both state and local parks by helping localities determine which projects they need most.

Another important feature of Prop. 40 is a mechanism to aid in the preservation of agricultural lands. The amount of that allocation has yet to be determined, but the end result will be a way to incentivize the preservation of the state's vanishing agricultural land.

Mary, let's move on to some other issues that the Governor has given you responsibility over. In the past year, the national and local press have been covering natural resources-gas, energy, water, etc. Give our readers a heads-up, a quick insight into what national environmental policy debate will most impact California and your responsibilities and mandates.

Clearly any survey of scientists or natural resource experts will tell you that the number one issue for everybody is the threat of global climate change. California has already begun to see the effects of that with our state's hydrology. And whether this climatic change is human-caused of otherwise, the reality is that our rainfall patterns are changing and we don't have a system in place to effectively cope with it. That climatic change is going to have an enormous impact on which infrastructure facilities we must invest in.

Let's now delve into state water policy. Do we have enough? What infrastructure remains to built? And what's the status of CalFed?

It's a fragile period at the moment. The CalFed program is at a point in its development where the most important issue is whether the federal government will continue to be our partner. And although Sec. Norton has pledged support for CalFed, the reality is that we had no federal funding last year and will see minimal federal funding this year.

That has raised concerns as to whether federal agencies will be there and will be on the same path in implementing the Record of Decision in CalFed. Clearly this is a complicated process and is not helped by the transition at the federal level and a lack of some appointments in key positions in this new administration.

This program relies on both state and federal employees working together. To date, they have done a terrific job of carrying the program through the planning stage. But now we're in the implementation stage and we need a strong commitment from the Bush administration to help with restoration projects, studies for storage projects, grants for watershed restoration, levy maintenance, etc. The future and effectiveness of this program really comes down to whether the strong coordination that we have had between the state and federal agencies continues into the future.

In an MIR interview last month with Tom Graff he stated that, at least on the market side of the resource equation, he believed environmentalists had found an ally in EPA Administrator Whitman. Is her support of CalFed an irregularity or is it the beginning of a positive partnership?

We have two principal agencies that we deal with CalFed, the EPA and the Interior. And as of yet, we have not seen EPA play an active role in the CalFed program.

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I don't think we know yet what EPA's role will truly be in CalFed. We've certainly seen under Administrator Whitman a great willingness on the part of EPA to continue playing a very active role in other areas in environmental quality. Hopefully we will see her speak out on the issue of CalFed to the same degree.

Let's view the CalFed issue through a different lens. The Dept. of Water Resources is charged with purchasing water for CalFed's environmental water account. Many have asked whether their role in the energy crisis has detracted attention from the water side of their operation. Give us some insight into the DWR's priorities re: energy and water?

The energy business at the Department of Water Resources is a freestanding unit. So it's not taking away from the activities of the department as it relates to water. And now, as the deficits begin to settle and people begin to look at what the DWR was able to do, most observers agree that the action of that department stabilized the market, kept the lights on and kept panic from settling in.

With regard to the environmental water account, some observers' criticisms stem more from the expectations of people selling water then an actual failing of the DWR. In my view, the environmental water account has actually has succeeded in doing what it was intended to do.

In fact, we've finally received the technical review report on the environmental water account and it praised the water account for purchasing the full amount of water that they intended-nearly 300,000 acre-feet-and using it effectively to reduce the mortality of winter-run salmon and delta smelt at the state and federal pumping plants. That report did note however, that there have been a few rough spots and that the account needs to be more nimble and able to respond quickly to changes in fishery conditions and when emergency water is needed.

Your answers allude to the larger idea of "the environment". Again, in that interview with Tom Graff we asked him to craft a position statement for the gubernatorial candidates re: the environment. He said, "[T]he best way to address economic and environmental concerns together is by charging people the total cost for use of essential commodities If we follow that mandate, we're likely over time to not only improve our economy, but our surrounding environment as well." Mary, what's your take on Graff's thesis?

It shows a touching faith in human rationality. But the mantra that true cost pricing is the solution to all problems is a little bit simplistic. Sure, it wouldn't hurt to have a better dose of reality when it comes to recognizing the true cost of how we live, but I'm not even sure that if we could switch to a pay-as-you-go system the world would be any different. I think our current situation is a little more complicated than that.

In our interview with you in April, you said, "When Gray Davis ran for Governor, he talked about infrastructure as the looming crisis facing the state. Shortly after he was appointed, he created the Commission on Building for the 21st Century. The problem is we were a little late in getting started." Give us your sense of the current state of our state's infrastructure.

There's no doubt that we've had to address infrastructure in the past year. The energy crisis forced a particularly expedited look at electricity and natural gas infrastructure. But, it helped create active working programs for both electricity and natural gas. We're now able to track all potential new projects and assisting the ones that look like they will meet our needs and environmental requirements.

Additionally, the state has been working hard to clear the obstacles to school construction and the government is supporting bonds to assist in that effort.

As you know, the use of bonds, particularly during a period of historically low interest rates, will enable the completion of projects that would have otherwise been postponed due to revenue shortfalls and stimulate the economy by creating jobs and spurring demand for materials and services.

This Administration is committed to expanding and improving the state infrastructure for education-the state has disbursed $5.8 billion in general obligation bond funds for school districts to acquire school sites and either construct or modernize school facilities. And, since the passage of Prop. 39, 40 of 46 K-12 school bond measures have passed, resulting in $2.4 billion in additional local bond funding for schools.

The state has $7 billion worth of improvements underway in the state highway system-that's 650 different projects to address traffic congestion and deferred maintenance for cities and counties.

Across the board, we've made progress on a number of fronts. However, the current shortfall in the general fund revenues will undoubtedly slow down these efforts. But regardless of available capital, the growth is still coming and we've got to find a way to prioritize infrastructure.

You've served in both the federal and state government.With voters about to go to the polls what difference does it make what party and/or person gets elected? Does it make a significant difference or does the machinery of government just move on no matter which party's in power?

In my experience, it does make a difference who is elected. And the primary difference is that the winning candidate gets to: 1) Set a tone for how the government will address the infrastructure, water, energy and transportation programs; and 2) He gets to appoint the people who make those programs happen.

To illustrate that point, one of the most remarkable stories of Gov. Davis' first term has been a Memorandum of Agreement that was worked out between the Resources Agency, the Business, Transportation and Housing Agency and Cal EPA. The MOA deals with how these agencies address the environmental issues surrounding transportation projects. Having that kind of mandate helps us engage our colleagues in government and stimulate the imagination of the community so that we can address problems in a more holistic manner. And when people who are interested in parks, restoration of water quality, the mountains, transportation and infrastructure begin to rethink how they can collectively work together and begin to alter their projects accordingly, we begin to see a huge amount of change. That is the kind of leadership that this Governor has brought-and will continue to bring.

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