Water: State's Most Basic Resource –– Will Policy Actually Precede The Pumbing?

Jim Costa, State Senator (16th Senate District)Chair, Senate Agriculture & Water Resources Com.

Some may think California Department of Water Resources Bulletin 160 is the State's water plan. But many argue that it is fatally flawed. Its assumptions may be incorrect. If you were to ask Jim Costa what California's Water plan is today, I would say that through excruciating pain in the decade of the 1990's we've put together all the regional factions in the State, including business, the environment and agriculture, to try to put the policy before the plumbing. I would argue that rather than Bulletin 160, California's water policy today is enacted in two primary places.

One is CalFed, the effort between California and the federal government to come together to develop a Record of Decision (ROD) that we've now been in the process of implementing for a couple of years. The state has provided financing-in the form of Proposition 204 that I carried in 1996 and Proposition 13 that I carried with Mike Machado in 2000-for the CalFed plan to solve most of the issues surrounding the Delta and also other regional proposals that we think are important. Both of those statewide bond measures provide over $2 billion to begin financing solutions that are envisioned in the Record of Decision as part of the CalFed plan. That's one part of California's plan.

The second part of California's plan is the Colorado River Agreement-the 4.4 Plan that included the re-operation of the Colorado River and essentially provides a more secure supply of water to the Metropolitan Water District. The success of the Colorado River 4.4 agreement is a critical component of California's water plan because, if successful, it will put more stability and more independence in Southern California's ability to satisfy our water needs. Correspondingly, it will put less demand on water from the northern portion of the state.

What's lacking in California-whether you're talking about Bulletin 160, the CalFed program or the 4.4 Colorado River effort-is an ability to tie all those efforts together and incorporate the regional efforts that are taking place into the overall plan. It seems to me that what's lacking most is coordination. What's lacking is accountability. What's lacking is oversight. What's lacking is financing.

We can talk about the successes the state has had over the last decade, and I think we've had a number of them, but the impetus for the regional efforts really stems from an understanding that state policies take place gradually. There used to be a day, especially in rural parts of the state, when you looked to Sacramento and to Washington to solve your water problems. There was logic, there was precedent and there was a historical relation to that kind of a system. I'm here to tell you that after 24 years of hitting my head against that proverbial brick wall, the day in which we can expect Sacramento or Washington to solve all of our water problems has gone. If you're looking for Sacramento or Washington to solve all of your water problems, you're going to be sadly disappointed.

That's not to say that Sacramento and Washington don't play a major role, because we do. But it supports my point about what is missing. What's missing are the incentives for regions to come together in a constructive way, to put together plans that are in fact workable. Plans that can be implemented. Plans that can be financed. Plans that people have agreement on.

Let me tell you where some of the flaws are with regard to the plans that I've just enumerated. The 4.4 Agreement is so important, yet today we still don't have agreement on how to deal with the Salton Sea. I'm arguing that rather than simply throwing money at the problem, maybe what we should do is take a step back, put together $50-$100 million and have a 5-year time period to put out an RFP, to put pilot projects together to figure out what might work. It's obvious there is not a solution at this point in time, nor is there any agreement or consensus about it.

The issue of land fallowing is very controversial in the Imperial Valley and was very controversial in the San Joaquin Valley fifteen, twenty years ago. I would like to put a land fallowing program together with some of the current proposals seeking to acquire coastal wetlands. It makes a nice symmetry. We do some good in both areas.

Metropolitan's efforts on the Colorado River include some land fallowing programs together with programs like the Cadiz groundwater bank that will increase supply reliability for Southern California. This kind of integrated approach, drawing the best from a variety of programs is the type of regional thinking that advances California's water policy.

The issue of the CEQA exemption to implement river re-operation on the Colorado is still out there and problematic. Notwithstanding the progress we've made, 4.4 has a number of critical issues that have to be overcome to ultimately achieve a success. In the CalFed effort, we now have disagreement over the Environmental Water Account as well as disagreement on whether or not we can increase pumping in the State Water Project to take advantage of the efficiency over years when we've had above average yield. We have strong disagreement under the CalFed implementation effort on what the long-term future will be on water storage, especially surface storage and which, if any, of those proposals will move forward.

While we talk about the success of SAWPA, the Santa Ana Watershed Project Authority, and hold that out as an example of a successful regional plan, I can tell you that two years ago I tried to bring together the various interests of the San Joaquin Valley between Modesto and Bakersfield. We even got the water managers to sit down in a room for a couple of different meetings. We developed a framework. And then what happened? The westside decided to go against the eastside-the old Hatfields and the McCoys trick. They managed to circle the wagons and they got their guns out. The trouble was that the guns were all pointed inward. This is a regional problem. These are the types of issues we all have to confront if we are to successfully pursue regional efforts in the future.

We know the state will continue to grow in the next 30 years. It is estimated that population in California will be 50 million by the year 2030. We know that agriculture is going to change. What that change is going to look like as we try to compete in terms of a world market is hard to predict. Obviously the great green revolution that we in part have been responsible for here-with the land grant universities, the cutting edge technologies, etc.-have, for better or worse, been exported around the world. And because of labor and other costs, those food products today have the same high yield, the same good quality and are being produced much cheaper in other parts of the world. What does that mean for California agriculture? Does it become a boutique industry? Does it follow the patterns of the dairy industry in the state and some of those successes from the California wine industry? Our role will certainly change.

We also know that through my legislation last year and Sen. Kuehl's legislation-making a direct correlation between future growth and water resources to sustain that future growth-will continue to have a tremendous impact on how we plan for our water needs.

We know that the Endangered Species Act and CEQA, whether we like it or not, will continue to be a driving force on how we bring together solutions to these problems. For example, we've got to do both ground water storage and surface storage. We did that in the Monterey Agreement with the Kern County Water Bank. What did we get for our good deeds? The Planning and Conservation League sued us as did the folks in Santa Barbara.

We've done the water trades. We do a lot of water trading in California between urban and agricultural areas. But I asked Tom Graff, my friend at Environmental Defense, "You always tell me to do transfers. Transfers. Transfers are the solution to the game. But Tom, you've never showed me a transfer that you've ever liked."

So this is the box that we're in . And I don't see us getting out of it in the near future. How creative can we be with our water management tools? How successful, for example, will desalinization be as a new water management tool for the coastal community? Will there be a future for water markets in California that work? And what will be the role? It is very important that we discuss these questions.

Just as Sacramento and Washington can't be seen as the end-all solution to all of our water problems, nor do I believe that public financing all of our water efforts are going to be the long-term solution either. You have to create the opportunity for venture capital to participate and for the private sector to participate at some level if you're going to take advantage of all the financing opportunities that are out there.

Let me close by saying that it's an interesting time in California. And the next drought that we have, which I believe is going to come sooner rather than later, will really be the catalyst to bring all of these issues together, then you'll see the public's attention, willingness and desire, along with our public policymakers, to engage in a meaningful way. When that happens, the foundation that has been laid with the CalFed effort, with the 4.4 program, and with the regional plans that we're attempting to develop statewide will really allow California water needs to be addressed and as a result, stability will return to California's water supply system.

Ron Gastelum

President/CEO

Metropolitan Water District

As I was sitting at the 100 Year Celebration of DWP recently, I looked at the pictures of William Mullholland and thought about that history. In my mind, there are three points in time in the development of water in Southern California where the business community and government had to come together and make something happen.

The first point in time was really when Mr. Mullholland, the City of Los Angeles and the business community made the commitment to build the L.A. Aqueduct from the Owens Valley, to indebt the city to an unheard of amount, to take the risk, to go build this pipe bigger than was needed at the time and to acquire water supply. At about the same time, other cities joined together with Los Angeles to form the Metropolitan Water District. They took all the public criticism for this noble effort. And it offered a huge turning point for the cities and this region.

The next point happened in the ‘50s and ‘60s when water planners began to understand that the Owens Valley and Colorado River aqueducts were not enough to meet future demands. Gov. Pat Brown stepped forward and said "Working with everybody and the business community, we're going to get this statewide project going." Tough, tough fight, it barely passed the electorate, but the decision was made and we are now the beneficiaries of a marvelous statewide project. Yes it has some inaccuracies and there are many things we need to improve, but it is one of the most marvelous assets that our state could imagine.

Now we come to the current point in time. We've lost some of those wars, those mighty wars with Arizona and some of the other states, and our Colorado River water supply will be cut back. And the Endangered Species Act has risen to a level of importance where it now has a major impact on our ability to do the kinds of water planning that we have done in the past. Not to mention the Salton Sea problem that Senator Costa alluded to.

Cutbacks in the Colorado River are inevitable. But if we were getting 2 million acre-feet from the State Water Project as we envisioned-as we thought we were paying for-we wouldn't be having much of the discussion today. We would be talking about something else. But we didn't. Today in a dry year, we're only counting on getting 450,000 acre-feet from the State Water Project for our entire service area, a far cry from 2 million acre-feet. We're up against real limitations. It is time for us to come together as they did in the time of Mulholland and as they did in the time of Pat Brown. The business community, working with a lot of leaders and planners, need to meet today's challenge.

This year and next year are critical. The CalFed bill needs to pass. The Colorado 4.4 issue has to be addressed, this year. In December, the Secretary of the Interior has an important decision to make: Do they turn off the tap for urban Southern California because the quantification settlement agreement hasn't been signed simply because we haven't been able to solve the Salton Sea problem? I would submit to you that even if we had $1 billion to throw at the Salton Sea today, that wouldn't equate to agreement on what ought to be done. Senator Costa is absolutely right, we need to move on, we need to do studies, we need to set aside some money, but we need a new CalFed legislation.

The business community needs to send two messages from our region to the United States Congress, to the Bush Administration, to the Governor and to our State Legislature. Pass a CalFed bill this year. It doesn't have to be perfect, but we need momentum. We'll work out the details. We'll resolve the 4.4 issue, it doesn't necessarily have to be resolved to solve the Salton Sea issue. We ought be able to think of creative ways to satisfy our commitments to the other basin states and keep the transfer from the Imperial Irrigation District to San Diego on the table.

Those things will take us to where we need to go. There is an additional urgency that I would just like to touch upon for a minute. Senator Costa offered SB 610 last year, Senator Kuehl offered SB 221. They ask a very logical question, the right question: With new development, where are you going to get the water? At present, if any of you developers try to get your projects approved with greater than 500 units, somebody is going to have to make a finding-probably the city or county that you're in front of-that there is an adequate water supply. But cities and counties don't know really anything about water. They look to us in the water community. And we look to Mark Pisano and SCAG to help us with our projections on growth. All of us are going to have to come together and get straight

answers.

Developers are calling me all the time. We need to get through this process. We need to make 221 and 610 work. We have the assets here in Southern California. And I'm actually fairly optimistic. Not a week goes by that I don't get a call from somebody saying, "Would you like to buy some water?" There is a lot of water for sale. We need to make the right choices on how we do that and more importantly, we need to continue to work with the Central Valley, Northern California, and others, because it's not as simple as just flashing our wallets, buying their water and leaving them in the lurch. We need to figure out win-wins with those local communities. It is our time and it is our responsibility to make the most of it for generations to come.