Assembly Budget Subcommittee No. 3 on Climate Crisis, Resources, Energy, and Transportation

Good morning. Welcome to Assembly Budget Subcommittee Three. Today we'll hear from the Water Board and the Department of Water Resources and a few spring finance letters. Under the Natural Resources Agency, we will vote on 28 items that were heard at our April 19 meeting. We have five items that are planned for discussion. For each presentation item, I'll ask each of the witnesses in the agenda to introduce themselves before they begin their testimony. At the end of the presentation items.

Members of this Subcommitee may ask questions or make comments on any of the 27 non presentation items. After all the items are heard, we'll take public comment in regards to the departments before us today, first in the room, followed by phone testimony. Each Member of the public will have 1 minute to speak. The phone number is on the Committee website and should also be on the screen if you're watching over the Internet.

That number is 877-692-8957 the access code is 131-5447 if you encounter any problems, please contact the Assembly Budget Committee at 916-319-2099 and a staff member will assist you. We'll take two motions for the vote, only calendar. The first motion is going to be to approve items one through 21 and 23 and 28.

And when we have a quorum here, we'll take roll and take a vote on the consent calendar, et cetera. And with that, we're up to issue one. And if all the panelists would please come forward, I'd like to welcome all of you here and let the Administration decide what order you want to begin.

All right. Good morning. I think I am going first, and then I'll pass it on to my right here. Good morning, Chair Bennett. My name is Cindy Messer, and I am the lead Deputy Director.

Just for everybody. And everybody's going to give testimony. Those microphones move, and the closer they keep them, you don't have to lean, but if you pull them to you, that's the best thing to do. But you do need to be relatively close, right.

Okay.

Thank you.

How's this?

That's much better.

All right. Thank you. Okay. Starting over. Good morning. My name is Cindy Messer, and I am the Lead Deputy Director for the Department of Water Resources. Very happy to be here today to provide an overview to you of DWR's efforts over the last few years to implement funding allocated to the Department from the water resilience package as well as the drought resilience package. So if it's okay, I'll run through some high level report outs and pass it on from there.

Thank you okay?

So, starting with flood and dam safety within the Department of Water Resources, the Legislature and the Governor in 2021 and 2022 invested a total of $638,000,000 in flood funding over multiple years. Much of this funding has already been committed, including 198,000,000 for the American River Commons Feature project. This is one that we share responsibility with the US Army Corps of Engineers and 102,000,000 for the Delta Levee System Integrity program for levee improvements in the Delta Region.

In addition, we have provided 18 grants under our floodplain management protection and risk awareness program to support 18 projects that reduce risks associated with stormwater, flash flooding, and mudslides. And we are in the process of funding various multi benefit projects in the yellow bypass, Sacramento river, and lower San Joaquin river that not only address flood control, but also fish passage and other habitat benefits.

So, touching on dam safety, I'd like to highlight a couple, or provide a couple of highlights for our dam safety local assistance program. The 2022 drought package allocated $100 million over two years for the first Statewide Dam Safety Local Assistance Program. Approval of the proposed Dam Safety and Flood Management Grant Program Trailer Bill it's a mouthful in conjunction with the first appropriation that will come in 202324 will provide the framework to establish this program.

The program will assist local dam owners with repairs, rehabilitation, and enhancements at existing state jurisdictional dams that provide at least one or more of the following benefits, protection of public safety restoration of water storage flood risk reduction enhancement of water supply reliability enhancement, protection or restoration of habitat for fish and wildlife, and protection of water quality.

So, moving on to water conveyance programs, the $200 million that was allocated to the Department of Water Resources for Water Conveyance and our water conveyance program is currently being utilized to complete various feasibility studies, design, development, and in one case, to construct essential restoration at one of the canal sites that has been impacted by subsidence. This program focuses on sections of four critical water conveyance canals within the state that have all experienced subsidence impacts.

And of note or to put it in context, I should say the four canal sections have lost up to somewhere around 60% of their conveyance capacity, reducing their ability to efficiently move water in periods of time where we have a lot of water to move and to move that water into areas of the state for storage for drier periods.

I would also note that the recipients of this funding for this program will also be using federal funding to pay for a third of the cost of the projects. So next, I'll touch on several key habitat and nature based activities the Department has been undertaking. Funding was provided for various habitat and nature based activities related to drought. DWR provided funding for four pilot projects to develop watershed resilience plans. We've worked with the California Natural Resources Agency to develop grant guidelines for water resilience projects.

We've also provided grants to support drought resiliency as it relates to wildlife. Namely, one program has provided funding for birds migrating along the Pacific flyway, and we've done that a couple of years in succession. And we've also continued our restoration efforts at the Salton Sea using the funds provided to the Department. Lastly, and in addition, $200 million in Habitat funding was provided to support priority, large scale, multi benefit Habitat restoration projects that are distributed throughout the Central Valley.

These projects also provide flood protection, public access, carbon sequestration, and groundwater recharge. These projects continue to move forward toward construction, and a number of agreements will be executed this spring, moving these projects into their next phase. All right, shifting gears would like to highlight some efforts related to immediate drought response. So, starting with community drought relief, funding has been awarded via the grant programs, sorry, programs for both small and urban communities. The total funding committed to date is $650,000,000 for about 300 projects.

The schedule for the remaining funding, approximately $150,000,000, was extended due to the high number of applications we received and are currently evaluating, and we anticipate awarding the remaining funding by the end of this fiscal year. We also received funding from the Drought Contingency Fund. In fiscal year 202122 DWR received 13.5 million of the $25 million in the Drought contingency Fund, and these dollars were dedicated and committed to media buys as part of the Save our Water campaign.

That was about 825,000,000, and we also applied the remaining 5 million to urgent forecasting needs related to our aerial snow surveys. So that's the contingency funding. And then, speaking of forecasting, shifting gears a little bit here, the funding that the Department received since 2021 and moving forward has for data forecasting and communications. All of this funding has been committed and it's been applied to important hydrological programs, several of which have been extremely crucial during this 2023 storm season.

These programs include the aerial remote sensing of snow program and the forecast Informed Reservoir Operations program. The funding has allowed, for example, an increase in the number of flights that we have been able to do as part of the aerial snow survey to collect critical data about the current snow pack.

Information from the state climatologist that has come out of these programs has helped call OES, the governor's Office of Emergency Services, the National Guard, California Highway Patrol and other state agencies to pre position things like helicopters, high water vehicles and other resources in key locations during the storm season to save lives.

Data from these various hydrological programs has also been extremely important in helping inform DWR management and our partners of the snowpack conditions, and especially as they are changing with temperatures rising and as we move later into the spring season. We've also been able to increase our information about runoff associated from atmospheric rivers and the snowmelt and reservoir releases during these current emergency activations.

So all of the data that we've been able to collect from these programs, the additional data we've been able to really put to use during this extremely dynamic winter season. So, communications I'd like to just touch on the Save our water campaign, so I know I'm going back and forth a little bit between wet conditions and drought conditions. So save our water campaign.

Money spent to date includes activities such as market research, bringing on board advertising agencies, and executing contracts with public relation agencies, with the bulk of the funding going toward the production of advertising assets and paid media to get the word out far and wide. DWR is currently working with the Office of Community Partnerships and strategic communications to provide resources to community based organizations as part of a larger CBO effort. DWR is also leveraging this funding with public private partnerships to stretch the dollars further.

One concern is that with a wet winter, individuals may become complacent with water conservation. This coming summer, DWR anticipates focusing the remaining $12 million for 22-23 for continued campaign media during the hottest and driest part of the year. So essentially May through August of this year and 17 million for 23 and 24 will go towards the same effort. And this leads me to my final area that I'd like to highlight, which is water conservation and agriculture.

So approximately $115,000,000 in water conservation grants will be fully awarded to urban communities in May. An additional 18 million is committed for direct contracts for conservation for small water suppliers, and 7 million in bond funds have been committed for agricultural conservation, or sorry will be committed in this next year. The $296,000,000 appropriated for the Sustainable Groundwater Management act implementation in 21 and 22 and 2223 has been allocated through the Sustainable Groundwater Management grant program, with 150,000,000 awarded as local assistance grants in May 2022.

As part of round one. Round two applications are currently being evaluated and draft funding recommendations will be made within the next month. This will award the remaining funds this also includes a directed grant to the water foundation to provide technical assistance as required by fiscal year 22-23 budget, which directed the Department to make 10 million of the 56 million available for small farmer technical assistance. And with that, I would like to hand things over to my colleague and Chair of the Water Board, Joaquin.

Thank you, Ms. Messer. Good morning, Chair. Good morning, Members. My name is Joaquin Esquivel. I'm Chair of the State Water Resources Control Board. It's an honor to be here with you this morning. I just want to start off and just thank the Committee for their Support.

We know that our communities, between drought and now here flood, continue to bear incredible brunts due to climate change and the funding that we're able to disperse between DWR and ourselves to really support ongoing need, especially here, I think of in the context of dry wells that we continue to see is really appreciated. On that, when it comes to the board's contingent, I'll quickly just go over a brief update on where we are on our various pots.

And when it comes to our previous allocated drought contingency funds, we have 50 million that's been committed. 42.9 million of that or so has gone to self help enterprises for the wells and tanks program and water hauling program. I think it's important to remember that that program was actually developed out of an emergency need from the previous drought in 2014 and 2015.

And what we've been very fortunate about is the ability to scale to the response that we've needed in our hardest impacted communities by drought in the San Joaquin and other places in the state. And so 42 million has gone to self help. I just want to acknowledge them because of their incredible partnership. And again, what continues to be a challenge with dry wells, even amongst wet conditions. Now, another 7 million has gone to the Rural Community Assistance Corporation's drinking water well replacement program as well.

So that 50 million is being here well used. Additionally, the board, over these last budget years, has received 1.3 billion to support both wastewater and drinking water systems. These are grants and these are grants really we're looking to ensure we target to communities that we know are here needing it most. Loans are another component of the financial assistance that the board provides, but it's really grants that help offset and here keep affordability so front of mind for us.

So of that 1.3 billion, we have already committed about 484,000,000, split between 281,000,000 to drinking water projects, another 300 million to wastewater projects. Currently, we have pending grant eligible applications totaling about a billion for drinking water, that's 207 construction applications. And then on the wastewater side, we have a need of about 1.3 billion, with 88 construction applications in for about 1.6 billion, and then 34 planning applications for 41.

So we have an incredible continued need to be investing in our wastewater systems and our drinking water systems. I think of wastewater often right now because unlike our drinking water programs, we don't have as sometimes robust a support of what is still very critical access to sanitation. And I think it's one of the more easier things to take for granted in today's time and can easily erode so much progress that we've had. And so just appreciate the continued support for those funds and those programs, knowing that they're doing incredibly important work.

And thank you. I'm going to pause you. I think I tried to catch a break there. These busy Assembly Members are tough to get a hold of, and so I want to grab a quorum while we have it and take a vote on the consent calendar.

Thank you.

Chair Secretary Bennett present. [Roll Call] Like to have a motion on the vote. Only items issues one through 21, 23 and 28. Moved and seconded by Assemblymember Friedman and seconded by Assemblymember Rivas, [Roll Call]

Now, if we could get a motion for items 22 and 24 through 27, moved by Assembly Member Rivas, seconded by Assemblymember Connolly, could we vote, please? [Roll Call]

Measure and we'll leave the roll open for absent Members. And pardon the interruption and back to you.

No pardon the least. I appreciate it Chair. Thank you. I think I was pretty wrapped up on the 1.3 billion at this point. What I would just continue to emphasize again is just how critical these funds are and just the appreciation. Next, I'll move on to groundwater cleanup and water recycling. So the water recycling funds appropriate in 2021 and 2022 are being administered in conjunction with the Clean Water State Revolving Fund Loan Program to Fund water recycling projects and our clean water SRF pipeline.

After accounting for projects specifically named in the budgets and the board's determination of groundwater versus water recycling split, we approximately have 275,000,000 in state funds has been appropriated to date for water recycling projects. Generally, approximately 35 million has been encumbered. Another 560,000,000 in water recycling projects are currently under review and expected to be funded in 2023. And another 105,000,000 in projects can be added to the list, so about 21 in total.

Based on the current 15 million maximum grant that these projects can qualify for, we have 290,000,000 in grant funds. The Water Board continues to provide the water recycling funds and is expected to receive new water recycling appropriations regularly. As it historically has. The 71.5 million in funding for groundwater cleanup is being administered consistent with the site cleanup account sub-account program.

Just recently, on April 18, the State Board actually adopted a resolution for the cleanup sub account program that's actually prioritizing funding for disadvantaged communities and environmental justice communities. These funds will be encumbered in FY 23-24 and support cleanup of at least 30 additional contamination sites. Moving on to our PFAS dollars, one of our key initial efforts is implementing the budget carve out for 15 million of the 22-23 PFAS allocation.

This is for sampling related work, including developing standards operating procedures and for validation of broad spectrum testing for pfas and developing a treatment based regulation for PFAS. We're currently in the works to incorporate about 15 million into existing statewide contract to complete that necessary analytical work. We are additionally working on a technical assistance agreement at around 10 million that will provide PFAS sampling services for disadvantaged communities and systems statewide.

Particularly, many of these systems don't know if PFAS is present in their drinking water, so the sampling work is going to be really critical to actually figuring out how much of a need there is when it comes to actually addressing the problem. We're proposing a total of about 500 million in pending PPAS related funding requests. As those applications are completed, they will be considered for funding out of some combination of both state grant money and or federal monies. We have emerging contaminants of concerns, dollars from the feds that we're able to use with that. I'll stop there.

Thank you very much. Next.

Thank you.

Good morning, the Administration before we go to LAO.

Lizzie Uri, Department of Finance thank you for the opportunity to present on the water and drought resilience General Fund solutions. The 2021 and 2022 budget acts committed $8.7 billion for water and drought resilience investments, and the Governor's Budget maintains $8.6 billion, or 98% of this funding. And the administration's General approach to natural resources and climate General Fund solutions has been discussed in previous hearings.

But I did want to highlight a few pertinent considerations related to water and drought investments, including protecting the majority of funding for most programs, minimizing disruptions for programs already underway, protecting funding for the most immediate climate risks. So water and wildfire, the potential availability of federal funds and the potential to shift programs to other funds, and the availability of program funding by fiscal year, given the multi-year nature of the recent climate investments and the need to address the budget gap within the budget window.

So some of the specific reductions and delays in this area include PFAS cleanup, a reduction of 75 million in 23-24, and a delay of 30 million to 24-25. And this maintains approximately $130,000,000, or 65% of PFAS cleanup resources for the water recycling programs, a reduction of 40 million in 23-24. And this maintains 760,000,000 or 95% of funding to support water recycling and groundwater cleanup for aqueduct solar panels, a reduction of 15 million in 21-22.

And this maintains $20 million, or about 57% of funding for this purpose. And finally, water refilling stations at schools, a reduction of 5 million in 2223 which eliminates funding for this purpose. Thank you.

Thank you very much. Thanks for reading those into the record for us LAO.

Thank you. Sonja Petek with the Legislative Analyst Office. Good morning, Mr. Chair and Members.

I didn't catch your name.

Sonja Petek.

Okay. I thought that was your name and I thought I heard something different. Right.

Yeah. I should speak up.

There you go. Okay.

Just pull that microphone nice and close. That helps, right?

Okay, good. Thank you very much. Our office would note that the governor's proposal, the proposed approach to address the budget problem in the water and drought area, the Governor proposes to maintain nearly all of the funding. As mentioned by Ms. Yuri, it would achieve General Fund savings in the budget year 23-24 of nearly $5 million by cutting about $200 million and then delaying another 300 million until 24-25.

And we note that it does keep funding for many of the critical activities, such as providing emergency drinking water supplies. Our office thinks these proposed solutions generally seem reasonable. For example, among the proposed reductions affecting the departments that are under discussion today, the governor's approach would cut a small amount from water recycling, and has already been noted there is some federal funding available for this purpose, more federal funding than is typical thanks to the Infrastructure Investment and Jobs Act.

In addition, another proposed reduction is to the aqueduct solar panels pilot studies. So this would reduce the total from 35 million to 20 million. We just note here that the Department of Water Resources already did award the $20 million to the Turlock irrigation district to start the pilot project on some of their portions of the aqueduct.

And we think that overall this reduction makes sense because the state can sort of wait to see how successful this initial pilot is before deciding whether to Fund additional pilot studies or even to expand the use of solar panels over aqueducts in the future.

Excuse me. I'm going to interrupt you for a second so that Assemblymember Garcia can add on quickly. We can get him in and out if he needs to, right?

The first motion was votes one through 21, 23 and 28, [Roll Call]

And then motion two is 22, 24 through 27. Garcia. Okay, thank you.

Thank you.

Yes, so I was just mentioning that our office does find these proposed reductions to be generally reasonable, but we do want to make an important point. The governor's approach is just that. It's the governor's preferred approach. And later, of course, can craft its own approach to solve the budget problem, a solution that reflects its priorities. In addition, I would mention that we are most assuredly dealing with a larger budget problem than was estimated in January.

As noted in the agenda, our office does offer some options for the Legislature to consider. So first, the Legislature could consider converting some of the proposed delays into reductions. By doing so, the Legislature would always have the option to come back and Fund these projects when the budget is in a better condition. By making these reductions rather than delays, it doesn't lock in the Legislature to this funding, especially if we are looking at more than one year of deficit conditions.

Second, the Legislature could also consider reducing state funding where there is a lot of federal infrastructure investment and jobs act funding available right now. This means, for example, the Legislature could consider reducing more from the water recycling programs, and this is certainly not a commentary on the importance of those projects, but rather looking for ways to sort of address the state budget problem where there is available federal funding.

The Legislature could also look at the funding, that's the state funding for drinking water and wastewater projects, as there is also a lot of federal funding available for such projects right now. Third, the Legislature could consider making reductions to some programs that are new. So, for example, there were some augmentations made in the 2122 budget for programs that were just starting up.

The Legislature could consider reducing planned funding in 2324 and instead request that the Administration provide some kind of evaluation or status update on how those new programs are going to see if they're at least beginning to show the results that the state had hoped for. And then this would obviously inform future funding decisions by the Legislature. And then fourth, we suggest that the Legislature could consider taking a coordinated approach in seeking reductions to programs that have similar or complementary goals.

So, for example, as shown on pages 38 and 39 of the agenda, we note that there are a variety of augmentations for habitat programs. While each program is unique and does serve important purposes, several of these programs have similar goals. And the Legislature could take sort of a holistic look at these augmentations and make targeted reductions while maintaining some of the complementary goals.

So, bottom line from our office, our suggestions are not a commentary on the merits of any of these programs, but rather an attempt to help the Legislature make some tough choices this year as we face a sizable and worsening budget deficit. Thank you.

Thank you very much. Anybody else from the panelists? Anything else you want to add, Members? Do we have questions? Assemblymember Rivas?

Thank you. Good morning, everyone. Thanks for your presentations. I wanted to follow up with a few questions with the recent flooding in places like my district, which is the North Bay Marine and Sonoma, but also the catastrophic situations we are seeing in the Central Valley and Tulare County, where there's an imminent risk. Has the Administration reassessed the need for redirecting any of the previously allocated direct drought response dollars to help these communities?

Good morning. Thank you for the question. My name is Cindy Messer. I'm Lead Deputy. Okay, just to make sure. So I'll take a first crack at that and others can definitely weigh in. So I think you kind of hit know we are not out of drought because of one very wet winter, albeit. So there are definitely still areas, as you've mentioned, that are feeling the impacts of the last three years. Central Valley being of particular interest, communities that are very dependent on groundwater.

Obviously, it will take a while for those basins to recharge. We'll need several more really good years to kind of get those moving in the right direction. One of the things that I had mentioned in just kind of running quickly through how the Department has implemented funding over the last few years is we did receive quite a large amount of funding for immediate drought relief, and we have actually committed a lot of that funding.

So given the immediate need from drought, given the number of applicants, we were able to move a lot of those dollars quickly out. And I would say there was definitely a need to help address emergency situations. But some of the projects that we funded also kind of looked towards resiliency. So helping communities kind of build.

I was going to ask you about that in particular toward flooding as well.

So recharge projects are one area that we have of late been very, and I know we'll talk probably a lot more about recharge as we go through the morning, but that is one area that we had really kind of had an eye towards for drought, trying to move waters into areas to help replenish groundwater basins. But as we're finding it actually has multi benefits. So being able to divert water, we'll talk about a temporary pump program that we just started up.

It just fired up our first pumps yesterday, working with Fresno irrigation district down in. So, you know, we are looking towards ways to kind of do dual assistance if you will, with some of the programs that we've started. So that's just one example, being able to take floodwaters recharge fields. We're looking for areas where there also may be dry well issues. So we can kind of get the double benefit of that. So I don't know if that.

Yeah, no, and very glad you brought up the recharge issue as well. That's on my list. So unless anyone else wants to chime in, just a couple of other questions. When do you expect all the funding for the drinking water wastewater infrastructure program to be committed? As of January, there was still $1.0 billion uncommitted. And what are you seeing as the demand for this program?

Yeah, as I went over, the demand on the drinking water side alone is a billion, and on the clean water side, let me make sure I reference this right for you instead of trying to peck through this. I will make sure we get it back to you. It is significant. I know on the state revolving fund side, not this grant program, but say on the loan component, there's well over 3 billion worth of loans in the clean water SRF. So the demand certainly outstrips it.

When we would be fully committed in this funding, I would say within the next couple of years, but that would be taking a guess, and I would need to refer back to our division of financial assistance. But at this point, we've committed 498. So about 500 million within this first year and a half or two. And so at that pace, within a couple of years.

Great. Are there any federal programs or funding sources that you have identified that can offset some of the cuts proposed here today?

Yeah. What we're very fortunate for is we do have the bipartisan infrastructure law, which was passed. There was also an inflation reduction act, which had a few dollars more going, I think, to the Department of Interior. Some of those dollars are through formula. So things like the state revolving fund, which the bipartisan infrastructure law, largely the benefits of the water component, which was only about 15% of the Bill, went through the state revolving fund. So those are all formulaic.

I think I would note, and have a note of caution, is that the bipartisan infrastructure law was supposed to ride on top of our base funding for the state revolving fund. And again, this is a significant federal program that's been around that supports wastewater and drinking water loans largely, but also loan forgiveness and grants. So with earmarks being reintroduced into DC, those have been pulled out of the baseline program. So we're actually receiving about 50% less from the state revolving Fund. Baseline.

What we have is the bipartisan infrastructure law, which is kind of filling that gap right now. So we're getting a bit more, especially in loan forgiveness, but we're actually receiving less than we had historically on the baseline. So it complicates this evaluation of how we really see these federal funds coming down to us. But they are there and there are some that can offset, there are emerging contaminants of concern, dollars as well that helps offset the PFAS hit that is being proposed.

And on water recycling there, I would just note that it really competes with the state revolving for the clean water, state revolving Fund, with wastewater projects generally. So getting wastewater treatment plants upgraded, stopping and preventing failures, which we continue to see as even larger plants now, is really important. And so the balance there is, if you try to lean a little more on the clean water SRF for water recycling without having a more dedicated pot, you put pressure on the wastewater side of things.

So to answer your question, yes, we do have additional federal dollars that are coming down that augment and help our stakeholders. But I would caution, on the bipartisan infrastructure law, it's a bit of a complicated story to tell because of the erosion of 54%, nearly less that we receiving on the state revolving Fund generally. Because of your remarks. Great.

And then finally, in addition to kind of the other strategies we're talking about this morning, conservation, recycling, recharge, what funding has been provided and what efforts has the state undertaken to increase our capacity for water storage?

That storage question, I might look more to DWR, but I would just on our part, know that the board has pending for it before it a water rights permit for the site's reservoir. And there is similar permitting activities going on that these large storage projects and storage projects generally out there require oftentimes water, right or otherwise.

We're doing our part to make sure we're being very communicative to project proponents, helping to prepare everyone and set everyone up for a cogent and as quick as we can process before the board. But these are not uncomplicated projects. But here we're fully committed to do our part to help project proponents along and have their best hearing, which we can't predetermine at the board, especially on water rights. And importantly, just need to be able to have a fair evaluation.

But on the funding side, I'll maybe look to either finance or Department of Water Resources.

Yeah, so Sergio Aguilar Department of Finance in terms of water storage. So as part of Prop one, there was about $2.7 billion that was allocated for water storage and that funding is being implemented. In addition, last year the water funding there was $500 million that was approved for water storage in the out year, and the Governor's Budget maintains that $500 million. So that's not part of the reductions or solutions.

Acknowledging that water storage is one of the important components for overall water resilience strategy so that 500 million is maintained as part of the Governor's Budget.

Any other Member questions? Comments? Assemblymember Rivas

Thank you, Mr. Chair. I don't have a question, but just a comment to the Water Board. I know that the state is implementing the federal bipartisan infrastructure law for safe drinking water and I have been working on this issue, working with advocates on this issue is particularly led service lines and we've met about this. And I just want to thank the chair for his efforts in working with the advocates and to help address their concerns.

I also want to encourage the board to continue engaging with advocates and to keep into consideration when implementing the bipartisan infrastructure law, the health protections on the customer side. And I know you and I have had several conversations and I really appreciate that and just wanted to take this opportunity to thank you.

Thank you for that leadership. I know lead, especially exposure to children, and I've appreciated the investments that have been made around school testing and ensuring that we get lead out of communities. And I would just note, we know that we don't have the real mainline issues with lead that are back east, but nonetheless, we have lead challenges here that are more associated with fixtures and parts of fitting goosenecks and things like that, which sometimes are a little harder to really get to.

But we're completely committed and really appreciate the leadership that you've had on all this. Thank you.

Assemblymember Essayli

Thank you, Mr. Chair. I'm fascinated with PFAS. It's something I'd never heard about. I've met with my water agencies. It's an issue of growing concern. My understanding is that the acceptable levels have recently been, the standard has been increased, if you will. The acceptable levels have been lowered statewide. Is that accurate?

We haven't recently lowered any. I know there have been recent, within the last year, perhaps year and a half or so adoption of new notification limits for new types of PFAS. We know there are thousands of polyfluorinated, alkalized substance components out there. There's different chains and versions of them. And so we're kind of trying to, at this point, just best assess what's out there so that we can even understand, well, what do we need to potentially think about regulating down the line.

And so there haven't been, again, any, and we, to be clear at the state, have not adopted yet maximum contaminant limits. We don't have enforceable standards for PFAS. What we have are notification levels and response levels that agencies are still operating to. So I don't want to diminish that. In fact, people are actually addressing and operating to it. What you may have heard about is the Federal Government recently adopting or here beginning their regulatory process to adopt a maximum contaminant limit at the federal level.

We're very blessed here in the State of California in having a division of drinking water that is able to and has been adopting maximum contaminant limits these last decades where the EPA hasn't. It's been a long time since they've adopted one. And so we really applaud the EPA for moving forward. It helps lessen, if you will, sometimes the burden on what we will then be addressing, because there's other things like microplastics out there, there's other emerging contaminants that we'll potentially need to address.

And so hopefully that's helpful. There's a federal maximum contaminant limit that started a process, and that's, I think, a bit lower than what we currently have our notification levels at.

Okay. Yeah, I heard from some agencies. They were concerned that, and I don't know if these were proposed limits or limits might impact their ability to actually deliver drinking water because they don't have the filters in place to remove the PFAS. Apparently, it's a very difficult chemical to detect and remove. So I just want to make sure that these funding cuts. Well, number one, does the Department consider PFAS to be a carcinogenic?

Yes. Our office of Environmental Health Hazard is the agency that does the human health assessments. And yes, I think the end route is long term.

So we're talking, like, impacts. Erin Brockovich stays like, people are getting cancer from this stuff.

Yeah, that is really the concern. I'll note for folks that are listening, when it comes to the PFAS contamination we have in the State of California, it's not as sort of a critical situation as communities that have had it manufactured, where you have really high levels, really concerning impacts. What we're seeing is, regrettably the impact of usage of these products so ubiquitously in our daily lives for decades. Where it's accumulated in groundwater, it's accumulated in places where it's been discharged, like wastewater treatment plants.

But it's still importantly not at necessarily the levels of places where it's been manufactured. It's still an issue here and it's one that we are taking very seriously. But for those that are concerned about their drinking water sources concerned, I think it's really important to put in context that there are things like arsenic and real things that have acute human impacts in the immediate that are out there still too. But it is a concerning thing.

And here when it comes to impact on drinking water systems, there are already systems that have stopped pumping groundwater there. There have been impacts in Orange County particularly, I know, and throughout the state. But I know Anaheim, Jorvalinda, others had to cease their groundwater usage because of the contamination there and have put in treatment already resin exchange. They're spending a lot of money.

And so I think I feel the urgency and the tension around needing to start to recoup these dollars because otherwise it's communities ratepayers that end up paying for the cost of remediation of an issue that. Right. They didn't cause. Exactly.

So I appreciate those answers. I just encourage that this remain a priority. I see that proposals to cut $70 million.

I appreciate that.

Something that's causing cancer.

Yes, I appreciate that Assembly Member. And I think the comfort comes insofar as there are additional emerging contaminants of concern dollars from the federal side that will draw down to replace that 70. But we're not done. We'll continue to speak a lot further on the need to remediate the cost and ultimately there are responsible parties out there and I think that's important to this too.

Thank you.

Thank you.

Thank you. I appreciate the line of questions that are coming from our colleague here. I'm working on a climate resiliency bond and there is a large section as it relates to water infrastructure where we're actually including funding anticipating these reductions. And so I would encourage our colleague and colleagues to kind of keep an eye on the language there because if these budget reductions or pause buttons are hit, we have an opportunity to not only backfill but also increase potential funding to help address these issues.

And they are in specific communities of California. This isn't a statewide issue. So we're being very intentional with the language and the bond, and I just want to encourage our colleague and friends here to keep a close eye on that. So we're looking out for this particular subject area with funding as well.

Thank you. No other questions. I'll jump into my comments first. Overall, I think that there's general alignment between the administration's approach and what I think I perceive as the Legislature's views about this partially because there aren't major cuts in these areas, because I think you rightfully and Lao, I think, agrees you're identifying these are the most essential things that we have to continue to focus on.

So overall, I guess I would want to just make this comment, and this is really important work if you want to work in water in California, the public, as important as water is for the General public, they don't understand anything except turn the tap. I shouldn't say they don't understand anything, but they turn the tap. They expect the water to come out. And the complications of having that be the case in a state like California are significant.

I mean, we have a canal that brings water all the way from the north to the south, and it's just not like the old days. And it's not like it's an uncomplicated system. And so you all have a really important responsibility to meet that need for everybody and deal. The public counts on you and us to figure out the complicated aspects of it and create the reliability that's just essential. And when you see that break down, you see how tragic it can be.

And when we see those low-income farm worker communities in the Central Valley, and you read the recent articles that have recently come out. Bloomberg News, the LA Times both had heartbreaking articles about what it's like to have your well go dry. And that's going to be more talked about in our second issue item here. When we get more specific about groundwater, it reminds us of just how important it is that we get this right when it comes to water.

So most of what we have set up here, because there is General alignment is this is an opportunity for us to get information, specific information in my mind, so we can answer questions, so we can be more informed as policymakers about exactly what we're doing, how are we implementing, what are the issues? And that's part of why we separated this. We had all the other water agency issues in previous hearings.

We carved out DWR and the State Water Board specifically so that we could ask these questions. So really appreciate we tried to get these questions to you in advance. I have come up with a few others that I didn't get to you in advance, so my apologies for that. But hopefully you're prepared for the questions that we have. And I know my colleague already asked a number of the questions in this particular category. Philosophically, I'd like to get both the Administration and LAO to weigh in.

We have this interesting thing going on in the budget where there are cuts that are potentially not that popular of cuts, we oftentimes see the statement, well, we'll make these triggers. If we hit a certain trigger, if we have the money, we'll restore the funding. On the other hand, we have a suggestion that we delay expenditures and we have an LAO suggestion of instead of delaying, why don't you just cut?

All of these are sort of like distinctions without a difference in my mind to some extent. If we have the money, we don't have to put it into a trigger where we're already committed because we could put that back in, as LAO has pointed out a number of times. On the other hand, if it is left in the budget but delayed, we could always cut it out later. So I'd really like to have you both way in, particularly on this one.

What would be the difference for us budget wise, if we, instead of delaying this funding, just cut it and then reevaluate it later? And I'm going to start with LAO, since you're the ones that are sort of suggesting that as an option. I'm not suggesting that you're saying we do that. You're just trying to craft options, and I want to understand that option a little bit better than I do at this point in time.

Thank you for the question. Sonja Petek from the LAO one of the issues with the proposed delays is that we are looking at sort of a budget problem over a multi-year period. And so there's no guarantee that come 24-25 we're going to be in a position to accommodate that spending coming back by making it a cut and then considering it later when budget conditions are better, it means we're not sort of locked in.

And I guess 1.0 I'd make here is that when budget conditions are better, and we don't know right now if that's going to be next year, if that's going to be several years down the road, priorities may have shifted somewhat and we don't know if these are going to be the most pressing issues and items and programs to fund at that point. If they are, you certainly have the choice to restore funding that you cut previously. So that's sort of where we're coming from.

I appreciate that, but the same thing is true in that we could cut those programs later also. But does it change any budgeting action? We leave $1.0 billion in for the 25-26 budget, let's say, or the 24-25 budget. This is a 24-25 budget. Does that change anything? Whether we left it in or we didn't when we get to 24-25 and we do the budget, except the fact that it's already in.

And so now you have to decide whether to cut it or not. The only thing I can see is it highlights it more, that it's either been removed or not. Could you help me?

Thank you again for the question. I'd make a couple of points there. One is that both the Department of Finance and our office, the Legislative Analyst Office, look at trying to balance the budget over the multi-year period. So making those cuts actually would help balance the budget over the multi year period because the budget problem that was estimated in January has already worsened. And so we have to look at not just 23-24 but several years beyond that as well.

And then the second point that I would make about the idea of sort of keeping the funding in and delaying it and bringing it back, like, couldn't you just cut that funding in a future year? I guess we would just say that that's certainly an option. It's a hard choice to come back and have to cut it again. So it's whether or not you want to keep coming back each year and saying, can we really afford it this year? As opposed to sort of cutting it now and then revisiting the issue when we have better budget.

That's helpful. Thank you. Anything the Administration want to add to that?

Yeah, so maybe I'll talk a little bit about this. Sergio Aguilar with Department of Finance. So maybe just taking a step back in terms of the overall budget framework, the budget architecture.

So as part of the overall budget framework to try to solve for the $22.5 billion budget gap, the administration did take a balanced approach at looking at these various categories and how much of the reduction we place within these categories, whether we're talking about funding delays, whether we're talking about reductions and pullbacks, which are true reductions, whether we're looking at Fund shifts, trigger reductions or limited borrowing. So we tried to take a balanced approach within each of those categories.

When talking about triggers and delays in terms of the trigger, as we had proposed it, one of the benefits of the trigger is not needing to wait for additional legislative action to be able to continue implementing the programs. So these programs are all programs and funding that the Legislature, Administration previously agreed to. So by putting in the trigger starting January of next year, if the fiscal condition approves, those programs automatically come back on and the departments could continue implementing them without any further delays.

Now, if we wouldn't do that, there would need to be additional legislative actions to be able to bring those back, which would then cause some delays in implementing the program. So that's one of the benefits that we saw of the trigger. And again, it really is continuing the same programs and dollar amounts we previously agreed to. So there's no change in purpose.

And then in terms of looking at whether we do a delay versus reduction, I think to my colleague's point from the Leo is capturing it within the multi year because we also do a multi year budget to have out year forecasts within the revenue, acknowledging these are know priority programs that we do want to maintain. We want to make sure that those costs are accounted for within the multi year and it doesn't show that there's money potentially available for other things.

We want to commit this funding for these priority programs. And so that is one of the benefits for certain programs, including delays so that they could still be captured within the overall budget. Multi year.

Great. Thank you. This is a question I didn't give you an advanced notice on.

So if you want to get back to me later on it, but do you have a breakdown in terms of the grant funding that we get out there, et cetera, for sewage treatment plants and water projects, a breakdown in terms of the income levels of the communities that are getting those grants, how much is going to disadvantaged communities, how much is going to communities that are challenged versus communities because ratepayers, as is pointed out in this report, are paying the vast majority of all of these projects and ratepayers in some communities have much less ability.

So I'd love to have those statistics if you could provide that for us. And with that, I think we will go on to issue item two, which is some other items. But before we get into issue item two, I do want to ask a question that's unrelated but is timely in terms of the fact that this afternoon the energy Committee has an energy trailer Bill and the Administration asked, particularly DWR and the Department of Finance, will they be there this afternoon?

And the energy Committee to defend their proposal is a question I wonder if you guys know the answer to whether DWR and Department of Finance.

I'm going to look to one of my colleagues back here to double check.

If we, part of why I'm asking that now is maybe somebody can check and while we're still in the hearing. But Assemblymember Garcia, anything you want to add on this?

No, thank you for asking the question we do have. What we've done is we've taken a budget proposal by the administration, put it into a policy vehicle, wanting to have a kind of thorough policy deliberation on the matter, and we would hope that the administration would participate in that conversation.

I think it could be mutually beneficial as we either land in this space where it'll be a budget policy adoption that is considered, or the Bill move all the way through the process. But we certainly would love to hear from the Administration on this matter if all possible.

Yeah, we don't have our energy teams here, and so I'm not specifically sure if there's an intent to attend. But we could follow up and ask the energy teams respectively at finance at DWR to see if there's any plans.

If you get the answer while we're in session and you want to make your response public, I'm sure Assemblymember Garcia would appreciate that, and if not, certainly understand. All right. Thank you.

So we're going to, this is the sort of catch all category issue item two, but this is sort of where the details are that I was referring to that we have, I think, specific questions we'd like to ask. So again, whoever wants to serve on the panel for issue item two, if you'll approach, switch folks out here.

Mr. Leaf, we begin. Yeah, whoever's going to begin for you guys.

Great. Thank you. Chair Bennett. Committee Members, I'm Paul Gosselin. I'm Deputy Director of the Department of Water Resources over the Sustainable Groundwater Management Office. What I want to do is begin a little background and update as to where we're at on the implementation of the Sustainable Groundwater Management Act.

The law calls for local agencies to form as groundwater sustainability agencies, which also known as GSAs, and work with local groundwater users to develop and implement groundwater sustainability plans to achieve the sustainability goals of groundwater basins over a 20 year period. I've been recently quoting Winston Churchill saying that it seems like we've been at this a long time, but we're really just nearing the end of the beginning of that journey towards groundwater sustainability. And with that, the act did put in a number of strict deadlines.

And I'm pleased to report that to date, the Department and local agencies have met every deadline. And for the Department, we play a dual role of providing local assistance and conducting compliance oversight. It's really in our DNA, if you will, to really ensure that groundwater becomes sustainable in the state. And through our data acquisition, issuance of guidance, facilitation, and technical support is critical to the success of groundwater sustainability. Now, let me describe the plans and the status of our reviews of these plans.

Every basin subject to the Sustainable Groundwater Management Act has adopted a plan, which is very important because once local agencies adopt a plan, they begin implementing upon adoption. So it's quite an achievement to reach this point. And these plans are a roadmap for how local agencies are going to reliably provide groundwater to the communities over the long haul in a sustainable way.

And SGMA directs the Department to evaluate these plans to determine if they're using the best available science and information and are reasonably likely to achieve sustainability goals for each basin. The criteria for plan evaluation is in the state's regulations and we had two years to achieve the deadline to review.

And again, this is going to be the initial review of the plan where there are multiple plans in a single basin or basins developed under a coordination agreement, we'll provide a single assessment for that basin or basins. We do not look at individual plans in basins, we look at a basin in total. So the current status in 2020, we received 46 plans for 21 basins, and these are largely critically overdrafted basins. And we review these plans for what's called in the regulation, substantial compliance.

No plan is going to be perfect. They're not going to be complete. They're going to have data gaps and we're going to expect plans to adapt, and I'll be speaking more to that in a bit. In 2022, we received 65 plans from 63 basins, and these are from the non critically overdrafted basins. So we've been reviewing plans, issuing determinations. On March 2, we completed determinations for 12 groundwater basins, largely in the Central Valley.

They were deemed initially incomplete because we found a number of deficiencies that precluded our approval. We ended up approving six of those basins and then six became were deemed inadequate and now subject to oversight by the State Water Resources Control Board. And again, just to date, with the critically overdrafted basins and non critically overdrafted basins, we've approved 18 basins to date. There are six inadequates. There's still one remaining that's incomplete. And we have nine basins where we've approved an alternative plant.

They came in with something that was analogous to what's required in GSPs. So we still have 59 basins to evaluate and review by next January. So there's a considerable work ahead. We're really confident we're going to be able to achieve that. And again, all our determinations, all our findings are posted on our portal. It's open and transparent. But as we look ahead, and I think the subject of our budget proposal is there's a lot of work ahead.

Agencies we have yet to issue guidance and compliance on interconnected surface water interbasin coordination where one basin's planned can't preclude an adjoining basin from achieving their goals. And community engagement is always going to be something that is going to need to be improved, as well as those data gaps and keeping track of their achievement, of their groundwater sustainability goals. So there's a lot more work ahead, a lot more data that needs to be developed, but we're real confident.

Even though we were the last state west of Mississippi to have a statewide groundwater LAR, I think the structure has really proven it's probably the best structure and I think we're really on track to achieve groundwater sustainability in the basin, subject to SGMA. So with that, I'll close. Thank you.

Thank you very much. Next presenter.

Good morning. My name is Chris Leaf. I'm the Executive Officer for the Central Valley Flood Protection Board. I've been on the job for about two weeks.

Welcome.

Thank you. I'll defer to my colleagues from DWR on the specifics of the flood prevention and infrastructure proposals, but just wanted to say the board is a strong partner in implementing these proposals, which are consistent with the 2022 update to the Central Valley Flood Protection Plan.

Thank you.

Good morning, Mr. Chair, Members of the Committee. Chris Tjernell, Deputy Director at the California Department of Water Resources for Integrated Watershed Management program. Pleasure to be here today, nbe part of this conversation and want to echo some previous comments. I think, by Chair Escovell just around the appreciation for the work that this Committee has done to support so many good investments over the last several years, in particular, as we have really seen such an increase in extreme climatic swings.

Back in 2007, and I'll try to keep this as brief as I can, but back in 2007, just for a little bit of context, following Hurricane Katrina on the Gulf Coast and some litigation in the Central Valley of California, that really established pretty significant responsibility and liability, really, for the state when it comes to flood protection and responsibilities. Following both of those events, the Legislature passed through SB five.

Then Senator Machado, his legislation, a bill to do, among other things, required the development every five years of updates to a new Central Valley Flood Protection Plan. Prior to that, there was no strategic overarching plan for state investment in the Central Valley. And that was actually a significant reason why we were found to have liability after certain flood events earlier in the 90s. So, in 2012, the first plan was developed.

In 2017, it was updated its first time, and most recently, as the Executive Officer of the Central Valley Flood Board just mentioned, the second update to that plan, the 2022 update was adopted. That plan lays out a strategic game plan for the investment of between 24 and $30 billion over the next 30 plus years.

One of the items that you'll have before you today, that you do have before you today, is a 30 some odd million dollar proposal for us to work on the 2027, I believe, update of the Central Valley Flood Protection Plan. That is a good deal, given that it is a strategic guidance document for tens of billions of dollars.

Those planning investments go a long way in updating our ability to model, to predict, to make sure that we stay on the cutting edge of climate change analyses, to do full, comprehensive assessments of the status of the Central Valley flood system for which we are responsible. So you'll see that in front of you today, and we can get more into that if you would like.

A couple of the other items that you have in front of you for flood protection really speak to the breadth, not the entire breadth, but really a good swath of the breadth of responsibilities that DWR and in many ways, the Central Valley Flood Protection Board have in combination with each other for reducing flood risk, consistent with the vision that's laid out in that Central Valley Flood Plan. So you have a proposal in front of you for the Urban Flood Risk Reduction program.

Very strong program, super important for many reasons, two of which being that it's a program specifically focused on the urban cores of the Central Valley, where the majority of folks live, but also the majority of where kind of the infrastructure assets are as well. Equally important is that those funds leverage far more federal dollars than we are required to put forward. So for every dollar that we put forward, we leverage between 2 and 4 federal dollars through that same program.

You'll also see investments for Delta, both habitat and flood risk reduction projects. This is consistent with actually a legislative mandate from a couple of decades ago requiring the Department to invest in both maintenance and larger projects for the integrity of Delta islands. So important for the 27 million American, sorry, Californians who rely on Delta water supply for their drinking water and for the local agricultural economy in that same region. So there's a couple other proposals in there as well.

Happy to dive into those. But that Central Valley Flood Plan, hugely important for setting that vision, setting the priorities, large stakeholder engagement in that process. It's really a consensus document in a lot of ways, and looking forward to continuing working with you on these proposals and happy to answer any questions that you might have.

Thank you very much. Other Administration presentation. LAO.

Okay, thank you, Mr. Chair. Sonja Petek with the LAO. We want to start by noting that, as has already been discussed, we're facing a budget problem this year. And in light of that, we suggest the Legislature apply pretty high bar to any new spending proposals, as that essentially means you have to reduce funding for previous commitments. Like every dollar of new spending means a dollar less for something you've already committed to.

So in this context, in applying that high bar, we think that any proposal that you do approve should be urgent, and the benefits of any proposal should sort of outweigh the benefits of things you might have to consider cutting. So I'll cut to the chase. In both the context of the SGMA proposal as well as the flood related proposals, our office thinks the Legislature should consider approving these proposals because we think they do meet that higher threshold for approval within the current budget context.

I'll just note a few things about each as to why we came to that conclusion. So first on SGMA, I'll go in the same order that the Administration did. Obviously, groundwater. The state relies on groundwater for drinking water, for agricultural purposes. Managing groundwater sustainability is therefore vital to the state's future.

And as noted by the Administration, the state's currently in the early stages of implementation, really after a number of years of planning, and there have already been some challenges with the planning process, as noted by our colleagues from the Department of Water Resources. When it comes to some of the particular groundwater sustainability plans, some of those had some issues that are still being worked through.

I raised this point just to say that the local agencies are going to continue to need the support and technical expertise of the Department. The proposal before you today is for 14 million General Fund on an ongoing basis to support 40 positions at the Department. Eleven of these are new positions and 29 are existing positions. We would note that some of these existing positions were supported with Proposition 68 funding, which has nearly been expended.

So in order to kind of maintain the current level of support and maybe do a few additional things, the Department will need additional state support. We just mentioned one key factor that we think makes a lot of sense, which is the Department providing a lot of the data collection and analytic capabilities statewide. We think this makes a lot of sense because the Department has economies of scale relative to the individual local groundwater sustainability agencies.

It also means that the data will be standardized across the state, that it will be collected on a regular basis and potentially collected more frequently than it would be by the individual local agencies. In addition, we understand that the Department intends to do some enhanced data collection activities, such as collecting or increasing the frequency by which they collect data in some of the priority areas, such as where drinking water wells have run dry or where ground water recharge projects are set to take place.

The Department indicated they would also be doing enhanced analyses of groundwater basins, which could help with things like understanding where the best underground water conveyance routes are located. And I won't get into these technical details, you'd be in a much better place to do that, but it made a lot of sense from our perspective that the Department would be doing this kind of analytic work rather than the individual agencies.

The last thing we'd note on SGMA, obviously, the goal with SGMA is to help the state achieve groundwater sustainability. And that said, it will be very important for the Legislature to continue to conduct robust oversight of the implementation, because we really need this set of laws that we call SGMA to be successfully implemented, given our reliance on groundwater.

So the Legislature could consider doing this in a couple of ways, perhaps conducting oversight hearings at key milestone dates, such as when all of the local groundwater plans have there's a final disposition on all of the local groundwater plans, or in five years, for example, which is a point at which the local agencies and the Department sort of need to do a review. And so with that, the bottom line, again, we think this proposal warrants consideration by the Legislature.

I'll just make a few comments on the flood related proposals. Again, despite the current budget problem, we think this warrants consideration by the Legislature, and there are several reasons for this. So, first of all, we think that the various flood related proposals do respond to critical flood protection and risk management needs to protect public safety, as well as key statewide water conveyance infrastructure.

As already noted, a lot of these projects also help the state draw down federal funding on projects that are conducted in collaboration with the US Army Corps of Engineers. A number of the other projects also would create state credits for the state cost share on future projects conducted in collaboration with the US Army Corps. This funding would also allow key projects that are already in progress to continue. And we'd know an interesting thing about the way the funding is structured. It's mostly one time in nature.

So what this means is that even for the continuing projects, it gives the Legislature the flexibility to consider future funding within the context of that year's budget situation. So with that, thank you. Happy to answer any questions.

Thank you very much. Before I go to Member questions and comments, which I'll do in just a moment, I just want to give it kind of an overview of some thoughts that I have. I think everybody is starting to have a greater and greater appreciation of the role of groundwater basins and the importance of groundwater in California. It is sort of the last refuge for us to go to as we have tapped the surface water.

We're relying on more of water than can be delivered in terms of surface water. And groundwater is unfortunately not being used currently at a sustainable rate. And that causes all kinds of problems for us, not the least of which is our final Reserve. It's like a family drawing down the bank account. Eventually you draw that thing down and you have lots of problems that come as a result of that.

So, in terms of overview, I'd like to point out the challenges that I see with SGMA at this point in time. And I offer these as overviews. And I want to complement what particularly Mr. Gosselin, you and your Department are doing in terms of trying to implement SGMA. But it seems like we have a technical knowledge shortage. Underground basins are complicated. It's very hard for everybody to understand them.

If the general public saw, if you took the underground basins and you could reveal it all, then they saw how many new. I think about the reservoir we have in our area that everybody drives by every day and sees the reservoir. And when that reservoir goes down, the phone goes, starts ringing off the hook, but it doesn't happen with a groundwater basin, right. And if somebody suddenly starts putting pipes down into the reservoir, running down the hills, everybody go, what are those pipes doing? Right.

Doesn't happen when thousands of new wells go into groundwater basin just since SGMA was passed. So technical knowledge is a gap that we have, that we have to try to fill. And I appreciate the comments of LAO and appreciate the efforts of the Department to try to help fill those for local agencies. That's going to funding. Groundwater sustainability agencies have the ability to raise fees, but it is very difficult for local agencies to actually, just from a political standpoint, get that done.

And I think we have to think about that challenge. Do we have the right funding mechanism for groundwater agencies to do the robust work that they need to do for us to be at the sustainability, the true sustainability level that we need to be by 2040 and hopefully sooner. The third thing is the timeliness of the challenge.

If we're going to be way out of a long ways from sustainability in 2039 and think that somehow we're going to make it in 2040, I think that's just not. We all know that's not realistic. But my experience has been, it is really easy with this to say, let's do the hard stuff later, and let's only nibble at the edges now. Let's do another study. Let's be sure.

I have, over the course of history in the United States, we have exploited resource after resource that way and have destroyed the resource usually. Fish stocks is a classic example. Fishermen wouldn't take a 10% cut, right? And because they wouldn't, suddenly they needed to take a 50% cut. Well, that's when the fishermen said, well, we'll take the 10% cut now. But now that wasn't good enough. And then you came back a few years later, and then the population dropped even more.

And they said, now you've got to take a 90% cut. And they said, well, we'll take a 50% cut now. The same thing can happen with groundwater. It's certainly not exactly comparable. But the point is, resource after resource in the history of the world has been exploited that way, delaying the hard. And so I hope that we have a sense of urgency that we can implement as we move forward. And then that leads me to the fourth thing, which is, I think, my greatest concern.

And that is, as I look at groundwater sustainability agencies throughout the state, there's a great deal of variety in how they were formed. We gave local governments a tremendous amount of flexibility in how they were formed. But as with all situations, the people that had the most to lose had the most interest in having strong representation on those agencies.

And that creates a built in, not for every agency, but for many agencies, I should say, a strong incentive to delay because the people that have the most to lose want to. And too many people have a view, or at least I should say not too many. But many people are more interested in the short term gains that they get from that over pumping than they are in terms of us getting to long term sustainability. So I just want to call that out there.

But conflicts of interest on groundwater sustainability agencies is a genuine issue and needs to be talked about openly because in other government bodies, if you had the conflicts of interest that exist, alarm bells would be ringing off if you had it set up the way that it has been set up. And that affects all the other issues. It affects the fees. They don't want to charge a lot of fees.

The regulated industry almost always wants to have a starved regulator agency out there, and so they don't charge high enough fees. Therefore they don't have the technical knowledge that gives them justification for delaying action as it moves forward. So we certainly will have oversight hearings as we move forward.

Want everybody to be aware of that as we try to deal with these challenges, not because we don't have well intentioned people trying to get this done, but because this is so important and it has many challenges in terms of implementation. The final thing I'd say in terms of the overview is that we have decided to do this with lots of local control in terms of how we get this done. That politically is always the most advantageous in terms of implementation.

But it does make it more difficult to come up with a coherent plan. And I would offer Australia as an example. After 10 years of severe drought and two years of extreme fires, they just said, we've got to nationalize this and that's what will happen and that's what we will have to do if this effort at letting the locals have a significant amount of influence.

And so if people want to keep local control, they need to know that we have to be successful as we move forward. Now, I know that Members have some questions, but before we go to the questions, I think you have, I saw your reach and so I want to give you an opportunity to respond to those specific sort of broad overview things about GSAs and SGMA as we go forward.

Thanks, Chair Bennett. Those are four key points that are top on our minds on implementation. And I think on the technology side, the information side from where we started in 2014, we are vastly far ahead on understanding basins, local agencies and the Department, and I think that speaks to our budget proposal about advancing some of those technical aspects that's going to continue through the whole lifespan of the act. It's just the nature of groundwater, as you described.

It's difficult, and nature doesn't provide us a homogeneous sort of set of basins, so it makes it always challenging. Funding has always been in the minds of agencies, and I think going into the plan development side, agencies were formed. We gave broad discretion to local agencies on how they formed. Some designed their governance in a very efficient way. Some had better economies of scales, others that didn't. And they largely worked through the grants that we provided, bought $300 million plus of SGMA Implementation Dollars.

So they were using that to develop their plans. And now, as I said, all the plans have been adopted. They have some access to some implementation grants, but largely now they're stepping back, saying, okay, we developed a plan, we have this organization we need to run now we need to kind of do it. And I think that reality is hitting home for some agencies, going from a plan and then seeing the reality of how to carry it out.

Some agencies have adopted Prop 218 fees and have done that successfully. Some are running into challenges. Some, especially smaller rural agencies, are starting to go through that process. They haven't done it before, and we've been cognizant of that. We've had a workshop for local agencies on funding options, the wide gambit to give them tools, ideas, share from their partners on how to get funding. So that's something we're going to keep track of.

It is one of the criteria we'll look at about do the agencies have the financial means to actually carry out what they intend to do? Because that's of an issue to us. And as for the timeliness, and this gets into governance compliance, we're not waiting till 2040 or 2042 to achieve the goal. Annual reports come in every year, and we're starting a process to review how agencies are reporting to us annually, the ones that are approved. And that's going to result in a couple of facets.

One is either us giving some policy directive guidance to correct what actions they've been taking, or feedback loop to us on what other assistance we need to help guide them along the way. And that kind of gets to some of our data needs. But also the five year update. SGMA was very clear that we weren't going to wait till 2040. There's periodic updates at least every five years, and it's really the performance measure. Are they on track to achieve their sustainability goals based upon empirical data?

What they're measuring in the ground? Are they on track to where they say they want to go and if they're not, that's where we're going to come back and identify. Are they making modifications to where they plan to get to or other adjustments they need to do? And at any point, even though we've approved plans, if we find that they're falling out of compliance or we question whether they're still on track to achieve sustainability, we can deem the basin inadequate and have the state board intervene.

So local control was very important, but it was also predicated that there had to be a state backstop. And we're well prepared to make sure we keep everyone on track. And for governance, it is a wide gambit of how agencies were formed, I think for good or for ill, but we're focused not so much on how they design the governance, it's what they're doing. And we have some pretty strong regulations, guidelines on the conduct of how they're actually carrying out.

Are they moving towards their sustainability goal and keeping on track so irregardless of their governance, we're going to keep them on track and provide assistance. We have facilitation services, we have written translation. We're starting a pilot on verbal translation so that community engagement is something we're also going to press as we get through implementation. So a few comments on your points and I agree those are key.

Thank you very much. I appreciate that. I'm going to turn this over to Member comments. I'm going to step out for just one minute while you guys start with your comments and questions.

Assemblymember Connolly.

Thank you. I really appreciate how the chair provided that overview. I think that's the larger stage. And certainly in our local communities, we're seeing this play out. There's the Central Valley, which of course we're all focused on to a large degree. But for example, in the North Bay, particularly Sonoma County, a lot of individuals are on well systems.

You have small ag, and more broadly speaking, as noted by the chair, groundwater really is going to be a key part of our overall set of solutions to overcome drought and just have resilience and sustainability. Maybe getting more specific from that overview, though, and I apologize if I was out of the room and you discussed this already, but how many plans under Sigma have been approved in comparison to those that have been rejected at this point?

So we've approved 18 basins, plans and basins. We have one basin that's incomplete. We found through the initial review that they had some deficiencies that precluded our approval. They have six months to respond. They responded, we're reviewing that, and then six are inadequate. Where we found after that incomplete process, they resubmitted. They still had one or more deficiencies that precluded our approval, and now they're under jurisdiction of the state board.

Are we seeing more compliance over time?

Yeah, I think one thing that we've been focusing in on, on the plans is how their sustainable management criteria is set up, because Sigma had a very different lens to look for. For water managers, it wasn't just about eliminating overdraft, it was about how do they manage the basin, eliminating that overdraft and how does that affect all the groundwater uses and users to avoid undesirable results. And that was sort of where a lot of the agencies had trouble. So we're hoping to work through.

But I think the amazing thing, just looking at the depth and breadth of those plans and where agencies are starting to implement, it's pretty astounding, the efforts that have been put forward already. Most agencies have been promoting a lot of recharge projects, and that speaks to the San Joaquin Valley watershed studies. Again, tools to allow those agencies to do better management. We've seen that through floods that really has taken off, but also on demand management.

I think there's 19 basins right now that either have some allocation demand reduction scheme in place or have some in the works. So they're really moving forward on both fronts on trying to advance inputs, increase inputs into the basin, and do demand management on the other side. So a lot of hard work, a lot of difficulty locally, politically, with constituents trying to work through these issues, but the effort they've gone through is just absolutely astounding.

No. And really appreciate that. Local focus. Are there certain areas, like smaller rural communities, that need additional help with their gsas and what funding sources are available for these communities?

Yeah, we had had a webinar workshop for gsas and particularly a lot of small rural ones. This was new to them. They hadn't done Prop 218 before. You also had a lot of new agencies that were formed through joint powers agreements. So you had new agencies. There was in kind staff support to create these new agencies, and now they needed to transition off of the inkind support from the other Member agencies or counties or cities to Fund themselves. So they're going through that process right now.

A lot of them have been looking at either Prop 218 or other assessments in the process. So we're going to keep engaged. We've been having regular workshops with gsas. We have regional check ins with them on their plans and then again in their annual reports. This is one of the facets that we do ask for, is what actions have been taking, how they're implementing.

So we're going to keep apprised on how those funding mechanisms are going, and those will be lessons learned for us to come back and see what other things we may need to do to help support local agencies.

Great. And related as we go forward with implementation. From what we're seeing, is there a need to amend or add to sigma at this time, given that we are now implementing, are there any loopholes or gaps that have been identified?

Like any law, there's always times for improvement. But I think one of the things that I was struck by this being a vast, huge change in water law, taking 100 years of groundwater law on its head and turning into a whole new system based upon local control. With state oversight largely mechanically, it's run very well. I think we've seen it after 10 years. There's been some amendments, but structurally we're able to work through with our regulations.

But I think we'll be open to listen to Legislature and others on other ideas. But we're pretty confident under the statute and regulations, we're on track to achieve groundwater sustainability.

Good. Looking forward to kind of an ongoing dialogue on that final question. For now, the State Water Board is mostly supported by fees on regulated parties. Why is the state waterboard not able to collect fees until 2025 for its activities? Does that mean the General Fund is covering these plans?

I can't speak to waterboard funding.

Hi.

Thank you.

Just a quick comment on that. So the six basins that are currently at the board, the board held a hearing actually just about a month ago to really have a real overview of. Okay, well, what's the board's process here, which is with a lot of discretion, there are certain timelines and statutes within the law here to do with fees especially and bringing basins into probation. What we have to still determine as a board right now is which basins should we bring them all into probation?

Should we pick a few first and start to kind of tee them off. Ultimately, though, a basin has to be brought into probation before we can even begin to collect fees. The process for probation again is laid out in statute. Even at expedited, just keeping to the timelines within the statute, it would take around a year to kind of really get a basin into probation, then have to then set up a structure for fees.

So that's why you see at this point and the soonest that we would be collecting fees on any basins after they've been into probation, which again, it's a whole public process and hearing wouldn't be until 2425 or the dates that we indicated.

Thank you. So I have a series of these detailed questions that I had mentioned earlier. And if Assembly Member Connolly asked the question while I was out of the room, you can just say you've already answered that question. I'm happy to do that, but I'm going to move forward. First, just a quick response to your comments about my four items.

When it comes to the issue of governance, and I certainly respect the fact that you're interested in results and the governance is not what your major focus is. But I would offer that in places where an obvious conflict of interest looks apparent, or just in general, the fact that there's a conflict of interest between anybody who is using a resource heavily and their reluctance to decrease the use of that resource, those are the areas where it just makes us more attentive as we're doing our oversight.

So we just are more likely to say in that situation, hey, we're going to pay more attention and be more alert. So I would offer that. The other thing is, in terms of how Sigma is working, I think that if you look at Bloomberg News, came out with a 5000 word article that just came out about a week ago, and I really recommend that everybody take a look at it. It documents what has happened since Sigma since 2014.

The article focuses on out of state, big out of state institutional investors, pension funds from Canada, big insurance companies from out of state that have made a calculation that the return on an investment in land and deep wells in the Central Valley was a very profitable investment to make, but it was not a sustainable investment. But they weren't worried about it not being sustainable as long as they could.

If you run a private equity firm, you take this big investment and then 1012 years later you've made your return, and then you move on to something else. That article shows the number of deep wells that have been put in and the impact on the shallow wells problem that we have. There is a problem with the sigma implementation.

If from 2014 to 2022, 6000 new wells have been put into those critically over drafted basins and those new wells are sunk at 1000ft deep or more than 1000ft deep, meanwhile drawing down the water from the 200 foot deep drinking water wells that are above them and are not financed by the tremendous wealth that can come in from the outside. So that's one example of where we have a problem and we don't actually have Sigma language to address the new wells.

In fact, we have a bill on this. But in fact, groundwater agencies don't even get to say no. So if you're a groundwater agency, you've worked hard, you put your plan together and somebody has come in and they've purchased the land, they go to the county, not you, and they get a permit and they can sink that well 1000ft deep, start drawing down.

Certainly the groundwater agency people can say, well, they can change their allocation, but once you have a permit and once you have the well permitted, you have a vested right and it becomes legally much more of a challenge, which is going to be the next topic I'm going to get into, which is the whole adjudication issue that is out there. But it's legally much harder for groundwater agencies and then they have to deal with that.

Whereas it would have been much better if they could have at the beginning said, no, we can't handle five new 1000 foot deeper massive wells. And these are wells with much bigger diameters, much bigger capacity, and they can drain an aquifer much faster than the existing farming community that is out there. So you look like you want to respond.

Yeah. And I think that phenomenon that was in the Bloomberg report started before Sigma. I think we're starting to see even in Sack Valley there were corporate investor agriculture coming in, buying large tracks. So it was starting before Sigma. I think entities were starting to pencil out profits from California agriculture. Obviously this is changing some of the communities, changing some of the dynamics.

But I think one piece in the article, if I recall that one of the things that Sigma did affect is as agencies started to implement their plans, it became apparent that projection about we're just going to pencil out and run this till Laco is dry wasn't going to happen because the agencies started to do allocations, started to do some land repurposing and some other facets. So it is, on one hand, the change in land ownership and the structure of that and impacts on family farms.

But on the other end, we are going to hold the agencies accountable to achieve their sustainability goals. GSAs can limit how much can get extracted from these wells. They can't impact the permitting of those wells, but they can affect the extraction. The other piece too that sometimes gets lost is the local land use decisions by not just the counties on well permitting, but municipalities and counties on land use.

Sigma did also amend the government code that directed local land use agencies to take into consideration the groundwater sustainability plans when they do general plan or zoning amendments. This is something that, if you think about as you know, land use planning is the key. That and groundwater sustainability plans set the tone and the values for the community. That nexus needs to be tightened up a lot more. Those local agencies and the land use agencies need to work a lot closer together.

So those implications on land use decisions, while permitting, need to tie into. What does that mean for the resources that that's going to affect. So those are just some.

Great. Yeah, I appreciate that. And I certainly agree the trend started before Sigma. But I think that one of the points is that Sigma did not give the groundwater agencies the authority to stop the new well implementation, which would have been better than now trying to do it after the fact in terms of trying to decrease an allocation or change the allocation.

So I'm certainly not suggesting that Sigma is not having any impact, but Sigma, I think, has some holes in it that still need to be fixed. And what's understandable the first time you do the major change like that. And the point is, I think we should stay open to what are the tweaks that we need to make as it goes forward.

By the end of the year, we're doing an analysis on well permitting decisions and how they've been affected, either county ordinances and how that affects groundwater sustainability plans. So by the end of the year, we should have analysis and report maybe some recommendations.

Wow. Yeah, that would be great. And that gets me to the next question. I'm going to try to do these in order of importance and some of the detailed questions. Hopefully we can run through fairly quickly. And that is the whole issue of adjudication that is out there. As I mentioned, once you have a well permitted and built, you have given somebody a vested right which gives them stronger case when they go to courts. But we also have these adjudications now taking place.

And in groundwater agency I'm very familiar with, I believe the judge is right on the verge of getting ready to make a ruling that would, in a sense, essentially overrule the groundwater agency's determination of what sustainable yield is. And they have come up with some clever legal language to say this isn't sustainable yield, but they're allocating water greater than sustainable yield, but saying that's not sustainable yield. So therefore, we're not violating Sigma, and yet they're mandating themselves to try to maximize that kind of allocation.

I think that the adjudication process is one that could really unravel sigma and the things that we're trying to do, particularly if this trend catches on. In other words, if people are unhappy, those big institutional investors from outside of the state are unhappy with their allocation and they decide to sue, and they can find a judge to do that. Somehow we have to work and develop the laws so that legally, a judge can't just violate the findings of Sigma.

Or we will find that the people that can hire the most powerful will hire the best attorneys and get the best decisions. And groundwater agencies will have to try to defend themselves in lawsuits using the precious fees that they're collecting from the groundwater pumping. This is a real threat. So I see that as a second thing. I don't know if you have any thoughts or comments on that. I know it's a really thorny problem for you guys to even comment.

Something us and the state board are tracking. Again, there is statute to try to merge the two and have them work in sync, and we're keeping track of some of the developments. I can't speak to details on adjudications, but again, we're looking to uphold the integrity of local implementation of sustainable Commodity Management act, because that's where you get input from the communities and real good engagement. So a lot more discussion on that.

Well, to the extent that you and the Administration and the Governor will advocate for that, I think it will be helpful to try to have us reach the right balance between the judiciary and the Executive branch in terms of implementing Sigma and not undermining the first and only sort of significant groundwater law that we've come up with at this point in time.

So, before I go on to my specific questions, would you make sure that you present all of your new proposals that somebody from Department of Finance or whatever reads in all the new spending proposals that you have.

Department of Finance I think they were somewhat covered in their opening remarks as part of the opening presentation. I could go through them again if preferred, but I think they were covered.

Why don't you? We've had a request for them, so maybe we were all caught up in the heavy policy issues and missed those. Right. Thank you.

All right, so again, Sergio Aguilar, Department of Finance. So in terms of Sigma, there's two related proposals. One is 14 million ongoing General Fund and 11 positions, 11 new positions and supporting 29 existing positions for WWR to continue implementing sigma. And then the second is a one time preparation of 2.5 million General Fund in 23-24 and 600,000 annually through 27-28 for the San Joaquin river groundwater recharge, specifically for water availability analysis and technical assistance.

So there are two similar related proposals in terms of flood prevention and infrastructure. There's various proposals, as my colleague from DWR briefly covered funding to do the 2027 Central Valley flood Protection Plan update, and it's 36.9 million General Fund over various fiscal years. There's funding for the Delta Levee Systems Integrity and Habitat Restoration program, specifically 13.21 million one time General Fund and 27.4 million in Proposition 1 Fund. Additional funding for the system wide flood risk reduction program, for paradise cut and the Yolo bypass projects.

And specifically that's 25 million in a General Fund. In 23-24 there's funding for the Central Valley Urban Flood Risk Reduction program, 135.5 million General Fund. And that's inclusive of various different projects. As part of the April 1 submissions, there's 43.7 in Proposition 13 funding for the South Delta Permanent Operable Gates project. I think those are all the ones that were part of your agenda.

Great. Thank you very much. I appreciate you taking the time to do that. This is going to be hopefully a little more rapid fire. But the first question, now that gsas have been finalized, and again, just speak up if Mr. Assembly Member already asked a question, any data gaps that you're finding that you think we should be paying attention to from a legislative.

Yeah, and I think the proposal we have is reflective of some of the data needs that local agencies have. And I think Elliot spoke to that, that this is going to bring economy of scale standardization.

So without us providing the data that agencies have been able to rely on, they're either not going to have that data and not use the best available science, or they'll go their own way again, put fees and costs on locals and do it in a way that may or may not fit. So one, it's some of the data needs that we identified we're going to fulfill, but we've also seen data gaps come through the plan. Some of it is, again, more technical in nature.

Some of it is also going to be advancing community engagement. But we're also seeing in time we're going to need agencies to become and adapt their plans towards what we've seen, the eridification and advancing of climate change. So as the governor's water supply strategy that was put out for hot and dryer California last August pointed to, this is the reality. So we're going to need plans to be adapted to reflect what we've been currently experiencing in 2040 and 2042.

So they're going to be resilient towards those efforts. So that's going to need a lot of data gap augmentation as well as interconnected surface water. That's a data gap. Again, we're developing methodologies for agencies to follow, as well as interbasin coordination. So we have not yet dealt with one basin's ability to achieve their goals across boundary lines. So all of that are kind of the key data gaps we see in the next few years.

Great. Thank you. I think it's one of the reasons why, and I think we have broad agreement on why we need to have sufficient funding moving to the agencies so that we can fill in those data gaps as we move forward.

The better job that we do in terms of filling in the data gaps, the more we can accomplish what I believe is the goal, which is for the existing agricultural operations that have been a long standing part of California and both of our economy and in terms of the society and community needs. That's what is an important aspect of California that we need to protect.

And it's the changing things that we have to evaluate very carefully as we move forward to make sure they're sustainable and without good technical information. So I certainly am strong supporter of the new positions and the new funding, and I think the LAO is in strong agreement with that. As it moves forward, somebody's on probationary status. Those probationary basins, what's the timeline for that, for them?

Esquivel mentioned we have six basins are deemed inadequate over at the State Water Resources Control Board. They had an information hearing last month to start studying the stage. None have been placed in probation yet, and they're in the process of developing that. So if there's questions, the board can answer that. That's under the board's process.

Great. I'll have the board come up, because I do have a couple questions for the board. Don't go far. Yeah, Mr. Goslin, I'm sure we have more questions for. There you go. So how about that in terms of probationary status?

So, as Mr. Gosselin said, we currently don't have any in probation. Now the board is going to be making determinations who to bring in, and there are timelines. So noticing requirements of about 30 days and then another 90 days as folks come in, because there's just a lot of process afforded the basins as they come into probation at the state. So timeline wise, the soonest we'd likely see any basins in probation would be sometime next year.

Okay, sometime next year. And then could you answer the question? Legislation already allows judges to ask for advice from the waterboards as they're working on adjudications. It's one of the questions we alerted you to, but the waterboards have opted not to weigh in. Could you answer?

Yeah, I gladly clarify. It's not that we have opted not to weigh in, it's that when a request and a referral comes in through the courts, what we do is say, okay, in order to participate, here's the amount of staff time, here's what the cost would be, because we don't have resources otherwise to participate and fulfill our obligations to the court. And when we do take that step, what is often happening is the folks within the proceeding make the determination.

It's not kind of worth the cost to proceed. So we're not making a determination, we're just articulating clearly what the costs would be for us to participate in staff time, et cetera. And at that point, we are then not being.

We don't have state funding for you to give advice?

No. We are a fee based organization, regrettably.

To the judicial branch when the judicial branch asks for it. And we're at the same time concerned about adjudications, undermining sigmas. So I would offer, that's another issue that we have. If we don't have the funding to be able to respond to judicial requests for help, which is the appropriate thing, we want the judicial branch to try to make sure they're consistent with the groundwater sustainability plan, and then we can't respond to that. So that's a pretty significant issue.

I'd like to get on everybody's radar screen as we go forward here and then fee structure, who's best to answer the question in terms of what the fee structures, which groundwater agencies have fee structures, what's the range, all of that kind of stuff.

I don't have the specifics on individual GSA fee structures. Like I said, many agencies going back initially had put Prop 218 fees in place. A number of them are in the development stage again. That's augmenting the monies, the state monies that have been put out $300 million over the last few years so we can come back and compile sort of the status, if that's important.

That would be very helpful information for us to have as we're looking budget wise, because we also have small rural districts that literally the basin is large, over drafted, but for the small rural area to be able to put in sufficient fees to run a groundwater agency is pretty limited. And so right now, do we have plans outside of, do we think we're going to have grants for ongoing implementation, maybe based on the financial wherewithal of a district?

I mean, some districts can afford the fees and the regulation much better than others.

Yeah, the future funding and structure. This is something we've been talking with local agencies about on different funding mechanisms. Right now, there's nothing proposed or established to do that, but those kind of issues. We've been talking to local agencies on what state local relationship should be in terms of funding and sort of baselining minimum expectations, especially for ones that may not have the economies of scale to carry out what's expected in the statute.

All right, great.

If I can add just one thing on fees, the board's fees, when we bring folks into probation and then begin to recoup fees are actually on top of those ongoing GSA fees that they will be providing. So we know that it becomes as a strain and the board has flexibility on what we set those fees at.

But we're going to do our best to keep it close to the actual work that we're doing and the benefit, ultimately, that it should be to these agencies, as we here emphasize that this isn't a reset button as you come to the board. It's a continuation through what are, we know, difficult issues that they're trying to work through. And the board is here to help provide clarity through to them for.

And it also hopefully will be an incentive for them to not go onto probation. Right. Because they would be paying.

I think it may have been structured that way.

How about the Fenner aquifer under the Mojave desert? Is there any way that that comes under Sigma?

No, I believe it's either a low or very low priority basin. And again, there was a lot of discussion when Sigma was formed about where to place these so high and medium priority basins. Out of the 515 basins, the 94 high and medium priority basins are the one that were slated to be sigma required. That accounts for 96 plus percent of the groundwater demand in the state. So for us, that's a good target to get sustainability going.

I'm going to leave it at that, because we have lots of other questions. And I just wanted to get that out there. I'm going to jump over water bottling, but if somebody could just get back to us on that, the governor's eo order.

I'll come to those questions that I have on that after Mr. Fong, who has to leave in a few minutes, wants to ask some questions on flooding, and I hope he'll appreciate that we're giving him some precious time as we're all trying to squeeze in our questions, too. Thank you.

I certainly appreciate the chair's indulgence. I jumped in a little late here, but because the Governor was just in the Central Valley yesterday, I believe Joaquin was there as well. I appreciate the visit. Just a few quick questions.

Just because it's time sensitive in our community when it comes to the flooding in the tiller basin and throughout the central valley and flood protection, just quickly, since the Governor was there surveying the damage, the Governor's Budget does eliminate $40 million that was approved in the budget last year for floodplain restoration in the San Joaquin Valley. Is there now a conversation to restore that money and enhance it? I think that's an important conversation that we need to have.

Yeah. Sergio Aguilar with Department of Finance. So I'll just know. We definitely have received a lot of feedback on that specific reduction. I think that was also discussed yesterday. I'll just note we're currently working on the mayor vision. The Governor's Budget did make that reduction. Don't have any additional information to share on that one at this point in time.

Okay. In terms of the next few months in the region, we are expecting the historic snow pack to melt. What is being done within the administration to address there? I know there's the emergency funding that's been provided to oes, but what does the next steps look like?

So thank you. I can take that question and then others can jump in if I've missed something. So I'm told I need to bring this close. So you are right. We have exited the atmospheric Rivers march flooding phase. We at the department, along with our partners, Cal OES, Army Corps, others are really monitoring snowmelt. So a lot of our data collection, our forecasting, our coordination with local county entities and local emergency responders is providing the information about the snowmelt and as that water is coming in.

So we'll continue to do that, working very closely with them. We've had several meetings, we'll continue to have a lot of presence and meetings down in the area to work with the four counties on a regional flood strategy. So part of what DWR does is we do a lot of data generation and analysis, so we're trying to feed as much information as we can to the locals, have them fill in gaps. Obviously, they're very aware of the local conditions.

Also working with the Army Corps, who has a lot of this information. So this regional flood strategy will help to really identify areas that need to be prioritized around flooding and inundation. So we know water is coming into the lake bed from the reservoir releases. But we also know as we enter the warmer season, we'll have diversions, we'll have irrigation. So we're going to monitor how much water is really kind of coming down into the area and where it's inundating. Prepositioning flood fighting materials.

That's another service. I guess I will call it that. DWR, along with some of our partners, do we provide flood fighting specialists. So we'll continue to work with the locals looking at levee conditions, making sure we have materials in place if they're needed as waters rise with the snow melt, we also have just implemented the temporary pump program, if you will. That's something I think was touched upon yesterday with the governor's visit. So that's something we've kicked off. Paul, I don't know.

Your program leads it, if you want to say a few words about that.

This adds on to effort. We started working with local agencies and the reservoir managers to identify when those reservoir releases were going to come down. And we identified not just in Tulare Lake, but central and southern San Joaquin Valley. About 108 already permitted recharge or bank facilities.

So just for us to coordinate, we make at least weekly calls to coordinate to let them know water is coming down, captured if they can, just to make sure that whatever could be captured to avoid flood risk, downstreams could be taken. This builds upon the Executive orders that the Governor issued the past few months.

And then we found that the capacity of these agencies, they had maxed out the capacity and said we could divert more if we had pumps and some actually had some basins they had created but didn't have infrastructure or piping to do it. So that's where the temporary pump program came in to just advance some of those flood diversions to minimize the impact downstream.

So let me just be very quick in terms of just speaking to this point about the need for more infrastructure and what the local counties I've talked to, of course, the local electeds there, they're very concerned that they need to build infrastructure in preparation, as you said, that the monitoring and the data and they want to be able to build things before in preparation for the water to flow. And so there is this kind of a timing issue in terms of reimbursement. Can you address that?

You have a lot of, as you mentioned, capacity, a lot of these water districts, flood irrigation districts, counties and cities that probably are expending a lot of resources right now to address this situation. But then they're bleeding their general funds and their reserves and their city budgets and their county budgets. How can we streamline the reimbursement part of it?

I can't speak to theme of reimbursement. I will just say for the temporary pump program, this is funded by the state. So it's a turnkey, right?

Not the pump, not the pumping. I mean, I appreciate the pumping program need to, of course, move the water. But broadly speaking, we have communities that are literally in the midst of being in the middle of a flood event, and they're trying to prepare either raising levees or expanding capacity in facilities that haven't seen as much water in a long time.

And so appreciate the response by OES certainly has been very helpful because now, as we look forward to the next few months, this is a critical time and certainly a lot of anxiety for us in the valley.

Yes. Yeah. And having been down a couple of times in the last month and the conversations we're having with the local entities, part of what we're doing, along with Cal OES, is really just encouraging them and making sure as they are putting requests in so as they have activities that do fall under emergency repairs and whatnot, to get those requests into the hopper through Cal OES, the state operations center, some of it comes to DWR.

We can get mission tasks to get materials to them so they don't have to perhaps do expenditures out of pocket to get some of, or technical assistance. I didn't mention that. It's part of the flood fighting specialists. So I think there's a little bit, the counties seem to be getting organized and prioritizing where those needs are, and then we're working with them to kind of put those into the buckets, if you will, of emergency, get those in.

Those can be reimbursed through perhaps FEMA with the federal declaration or the Driola funds. But there are also other requests. We know Kings county just put one in on Friday for potential to look at levee raise. Those are going to be a little bit different type projects as we move forward. So I know we're working through that. I don't know.

I appreciate the chair's indulgence. Let me just say that within the response, emergency response, certainly that the reimbursement side is something that we're really concerned about. We're dealing with reimbursements from fires from 2019. So we're really concerned that as communities and cities and water districts are expending significant resources to protect their neighborhoods and their communities and their livelihoods and livestock, that we're not forcing them to go bankrupt or to bankrupt their reserves or in their general funds waiting for a reimbursement that's necessary.

The other thing, as we deal with the emergency side is looking forward in the preparation and if we could restore and enhance the flood protection funding, as well as fast track some of the disaster relief, that's critically important. And I think one thing that we need to look at moving forward is just how do we streamline the maintenance of these facilities, the debris removal?

A lot of the debris that was in these facilities certainly built up during the drought, but we had water districts that were trying or waiting for approval from agencies. And then when the water came, the debris actually led to levees breaking and damage. And so trying to streamline that process, I think, is critically important. So I think those three areas, if we could work together on that, I think that's extremely important, especially the next few months, that are critical. Certainly.

Thank you, Mr. Chair, for letting me kind of jump in. This is critically important for us in the Central Valley, and I appreciate the indulgence.

Thank you for your constant interest and attention to these good budget issues. Just going to be real quick on groundwater recharge, and then we're going to move on to issue item three. Just with regards to the governor's executive order out there, do you have any data in terms of how robustly has the program been implemented taken advantage of? Do you have any data on how much water we've been able to recharge as a result?

The public is at the point where they see anything, not anything, any floodwater. It's like, why aren't we recharging everything? So if anything we can have to help us respond would be helpful.

Yes. One thing I'll say is under the executive order, flood diversions are being reported to the State Water Resources Control Board. So to date, just under that Executive order, 50 some odd agencies have reported there's upwards of over 55,000 acre feet that's been diverted. And that doesn't even include some of the other diversions that are occurring with entities that have pre 1914 water rights or have established water right permits. So there's a lot of diversions going on.

And primarily recharge is important, but this is really getting diversions to protect communities and minimize impacts downstream. Now, in terms of how much is getting recharged? Different areas percolate at different rates and the geology is different. And again, some of these areas that get diverted don't have a water right permit. They're diverting because they're minimizing flood risk. So the areas may not be totally conducive to recharge.

But in the end, what we're looking at, at least in the aggregate, is the local groundwater sustainability agencies report to us annually on April 1 the change in storage within the basin for the past year. So the year that ended, September 30. So that change in storage should account for either changes in pumping if there's in Lou recharge because they weren't pumping, or increased input into the basin from natural recharge, active recharge, and everything else. So we're going to be looking next May.

We'll get it April 1. We should get it out by May 1. That change in storage, that would reflect improved storage, as well as the quarterly groundwater monitoring that occurs in typically April and then the fall. So we're going to be tracking that. We're going to be working closely with the board on better metrics on characterizing recharge.

So it's a year from now that we'll have better data in terms of how well we were able to recharge now. Yeah.

Thank you. I would just add, as Paul said, it really falls into two buckets here. We're talking about permitted recharge and then unpermitted recharge. And in the unpermitted space, it's because if you are incidentally recharging, because you're fighting floods, it is at a space that before executive order, before the leadership of the Administration, was just kind of undefined. And so, on the permitted side, because of streamlining that we've done, because of temporary permits that we've established, because these moments, they're ephemeral almost.

They come, and it's hard to. You need to plan before they come so that you can divert safely, ensure you're not harming water right holders. The number of permits we actually had this year for the amount of water was not much. We've approved eight permits, plus, I think at this point, it's about 190,000 acre feet worth of recharge that those permits are permitted for.

And the other activity we took on the permitted side was an adjustment to the Bureau of Reclamation's water right permit, where we were able to make a temporary urgency change order from a petition and unlock 600,000 acre feet worth of recharge for the Bureau of Reclamation. They're using what's known as their 215 contracts, which are excess water within their system, that they can then, because it's really a matter of conveyance, ultimately get to folks that can use it for recharge at a reduced price.

So that 600,000 acre feet, the 190,000 acre feet, that's all the permitted recharge that we have in place for this year. And then there's again, the unpermitted side. And there folks are reporting to us through the executive order. We have, I think it's about 58 entities that have reported recharge under the executive order provisions. And the importance of the executive order as well is to create some guide rails around.

Again, what we all acknowledged was unpermitted activity that could take place, but we want to ensure it doesn't take place in a way that hurts communities water quality challenges, especially around nitrates.

So there's prohibitions in the unpermitted executive order work that is ensuring that it's not being applied to dairy lands, it's not being applied to places that pesticide application or fertilizer application happened recently, where you have water quality impacts that are then exacerbating your quantity issue and needing to think of those at once is really important. So I just wanted to kind of add that.

And as Paul said here we're really working here in real time to best support the decision making that's going on across the basins with the melt and around things like recharge so that we have as best a picture as we can on where water can move under, what provisions can they do. So, and here, lessons learned for hopefully additional years like this, where we can actually put this to use further.

But really proud of the work that's gone on and the balance that we've had to strike with not just saying yes to everything, but really understanding what are the impacts of the activities we're having on the watershed.

I appreciate the dairy restriction and the recent pesticide application, much more complicated with the nitrate buildup. What are your thoughts on that? How are you handling that?

There's an incredible amount of work and science that's gone into programs like our irrigated lands regulatory program where we're looking at the ratios at which plants uptake nitrogen, the amount that you should apply and what's over application. And I really acknowledge the regional water quality control boards, the Central Valley Regional Water Board, and central coast in their work there.

We also have programs like CV salts, which are in the long term looking at salinity, but also nitrates as well in the groundwater and providing replacement water for folks. So I think there's a real opportunity to continue to make sure we focus on that work.

But for the emergency executive water.

Do.

You have a standard that you have for concerns about sending nitrate polluted water down into the basin?

On the unpermitted side? Again, we built in these prohibitions to prevent those worst case sort of scenarios. I think it's important to remember with nitrates, especially in the central Valley, there's already a lot of nitrate loading within the root zone or other places. So applying water can have the effect of increasing nitrates, but in the long term can actually help. A lot of that science I know again, right now is still being done.

And I know right now, especially around these projects that are going to the ground testing, to say, okay, what is the impact after a year like this in places is going to be really important. So I think on the point there we have a lot of programs that are helping to inform it and hear a learning opportunity and on the unpermitted side, actual restrictions to prevent the worst of activities from happening.

Thank you. I would like to have used this time to talk about the Colorado River and the Delta Conveyance. But given our timing, for anybody who prepared your answers on Colorado River and Delta Conveyance, we would love you to communicate those to us in writing, if you could, from the agencies. But in the interest of time, I think we have to move on.

And so we're going to go on to dam safety and really want to thank both of you and all of you for these answers. You've got important work to do. Right. And let's hope we can create good partnership between the Legislature and the executive branch on a complicated topic and try to really come up with the best good government we can. So thank you very much. Appreciate it.

Thank you.

All right. Good afternoon chair and Assembly Members. My name is Sharon Tapia. I am the division manager of the Division of Safety of Dams and we're commonly referred to as DSOD at the Department of Water Resources. DSOD regulates the safety of approximately 1240 nonfederal dams statewide. DSOD provides independent oversight of the design and construction of dams, including new construction and enlargement, repair, alteration and removal of existing dams.

We annually inspect dams to ensure owners are properly maintaining their dams in a safe condition, and we perform independent review and analysis of existing dams in addition to other critical functions. Issue three is a request from DWR for $3.178 million in ongoing funding from the dam Safety Fund to support 12 new positions in fiscal year 23-24. It also includes Trailer Bill Language to modernize a 1991 application fee schedule that is set in statute under Section 6300 of the Water Code.

Six of these positions are for implementation of an enforcement program and that is for new statutory authorities that were provided under Senate Bill 92 back in 2017, and the other six positions are to address a workload increase related to new dam construction projects, enlargements, repairs, large remediations, and removal of dams.

Since 2004, our dam safety program has been funded solely by annual fees which are paid by all dam owners, in addition to application fees, which are paid only by dam owners who are constructing a dam, making modifications to an existing dam, or removing a dam. Prior to that, we were 100% General funded and dam owners paid a nominal fee for their annual fee as well as and they paid the 1991 application fees.

Revenue to support this request would initially be collected through annual fees and offset through the modernization of our 1991 application fee schedule. So while DSOD can adjust annual fees for cost of living increases with our Director approval, we do not have the authority and statute to adjust the 1991 application fee schedule.

The updated fee schedule will correct an imbalance that is currently occurring in the revenue that we collect to cover our regulatory cost for oversight of application work, and I'm happy to answer any questions that you may have.

Anybody else from the Administration? Great. LAO. Assembly Member. I just have one comment more than a question. The Trailer Bill allows the Department to adjust the fees.

I just want to make it clear that having the authority to adjust the fees is not as good as having the fee automatically go up with the cost of living, that it's just so much more appropriate to just have the fees gradually move with the CPI and not have everybody be concerned when five years or 10 years later you say now we have to have a big increase in fees because we didn't do that.

So to the extent that you can modify the Trailer Bill in such a way that it adds regular cost of living increase, hardly anybody complains about that. When you come along with after some period of time, a significant increase that you have the problems. And I think it's good government because it keeps fees more in line with the cost of reinforcement on the part of the Department. And with that, thank you very much. We appreciate the presentation.

We're going to go to issue item four, water supply strategy implementation and water recycling project fees. We'll have similar thoughts.

Hi Chair. Welcome back or welcome back for me. Apologies. One second, let me make sure I pull up my documents. Okay. I'll give a breakdown of our request here. So the State Water Resources Control Board requests a cumulative total of 28 permanent positions and 1 million in contracting funding. 19 permanent positions. And that kind of breaks down to 19 permanent positions, which is about $4.73 million and those are one-time. And then also amongst those 19 positions, $500,000 in one time contract funding from the Waste Discharge Permit Fund.

And this is for fiscal year 23-24. And then it'll be an incremental increase of nine permanent positions. And again, that's from the waste discharge permit. And then starting fiscal year 2025-26 ongoing spending authority for about $6 million, $5.6 of that from the Waste Discharge Permit Fund, $408,000 from the safe drinking water account to continue to support about 28 positions.

So these resources will address critical statewide water supply needs through planning and permitting for our new water supplies and storage in accordance with the governor's California Water Supply strategy for adapting to a hotter and drier future. The water supply strategy, as you know, sets out goals and directives for the production and use of recycled water, brackish groundwater, seawater, desal, stormwater capture, and use.

To deliver the pace and scale of projects necessary to meet these goals, the Water Board must modernize its regulatory structures and expand its staff capacity so that the state and regional Water Boards can assess, permit, fund, and implement projects at the pace that this climate emergency really warrants. These actions will increase the resilience of local and regional water supplies and better position the state to respond to inevitable water supply and water quality challenges associated with warming climate.

What I'll notice especially about the water supply strategy here is that in a warming climate and in a climate where the reality is whether we're talking about the Colorado River Basin, whether we're talking about the Bay Delta, whether we're talking about the eastern Sierra, these places where we've depended on for exported water aren't able to sustain the levels that we've exported from here into this future.

And so the water supply strategy really does focus on water recycling, groundwater capture, and recharge, desal, and even conservation as critical components of ensuring that we're adapting to this climate that we actually have. So I'm proud of the work the board has been able to do in this vain already.

And these positions will really help us to again modernize and ensure that we're able to engage with agencies and be able to respond timely, but also to be able to evaluate our decision making process to begin with. There, because the water supply strategy directs a lot of work and including a lot of streamlining work, where here we're really breaking down. Well, what is the permitting process for recycled water projects? What is that permitting process for desal projects?

And in laying those out, better try to get to better decision making sooner. And I think that that's what's so critical about this work and this request. It allows us to not get to decisions sooner by removing parts of our work, but really by supporting the foundational resources that allow us to be better decision makers in that space. So appreciate the support potentially of that request.

Great. Thank you. Department of Finance. LAO. Great. Certainly feels like an appropriate request from my perspective. Could you just give us a sense of what your comfortability is with an annual fee, recycling is becoming more and more complicated. Your department's got more and more challenges in terms of doing that fees to cover your costs. In terms of the increased complexity of that. What are your thoughts on that?

Yes, actually, this year, the State Water Board will be adopting direct potable reuse regulations. They'll be the first in the nation as complex and as protective as these are. And what it means is we're going to see a whole new generation of water recycling projects get ushered in. And I think it's important for us to be able to remain flexible in the way that we recoup our fees.

And here, we do our best to ensure that we have a lot of data associated with, well, what are the fees supporting? Where is the staff time going? And as we map that out, we know that we're going to continue to see the need for staff time to approve these complex recycled projects. So the proposal to try to, I know some folks out there are like, well, can you put a cap on how much you would raise or how you manage that.

It really harms sometimes our ability to actually respond to the resource need that's out there. I'll note that we manage our fee programs. It's a yearly assessment. What came in? What came out? What are the expenditures? And creating a bit of a reserve, where we can do things like we just did with the COVID emergency, where we suspended any fee raises for a bit. And we can do that because we know we have a reserve.

And trying to dictate too much, whether through caps or tying us to, say, the inflation index or whatever it may be, just creates more difficulty in us trying to do our best, which is really make a resource request that isn't over onerous, but actually gives us the resources we need to do the work that we know we have to.

When the taps go dry and when the problems come, the public doesn't say, oh, you were overfunded. Right. So we have to make sure we do have the resources to bring good recycled projects on, et cetera. All those things that you're attempting to do.

Thank you, chair.

I appreciate that answer. All right. We are ready to move on to our final item, and that is issue item number five.

And I'm glad to move to this item because this is whether, what brings to mind is last year, last fiscal year, the board invested $3.3 billion in loans, grants, and financial support for drinking water systems, wastewater systems, water recycling, and very proud of the incredible work the Division of Financial Assistance does to support so much of the water needs out there.

And then on top of it, we were able to accomplish an arrearidge program that nationally, no other state has mirrored insofar as really here paying down debt. So the 2021 Budget act appropriated 1 billion in federal funding for the American Rescue Plan for Water and Wastewater Bill debt, known as arrearages, for debt accrued from March 4, 2020 through June 15, 2021.

That window is important to note because we asked for a billion because of some polling and some numbers that we had developed with water agencies to figure out how much debt was being carried around. And at the time of that, the need was there. But of that amount, approximately $255 million was provided to water agencies for those drinking water arrearages within that window, $124 million was provided to wastewater agencies for debt and arrearages. And then there was about $15 million for administration of the funds at the board.

Additionally, the 2020 Budget act transferred about 200 million to the Department of Community Services. And again, you add those two numbers, and it's not the billion that was provided. And what we found was actually a lot of debt was transferred either to county roles or to other debt services within the water space. So we actually ended up doing is learning a lot about what happens to drinking water and wastewater debt as it's accrued, and a lot of it moves off of the books of the agencies.

And so we were, in the end, chasing that a bit. So again, 200 million, though, in 2022, budget act was transferred to the Department of Community Services and Development. There, they've been implementing a federal low income water assistance LIRA program, low income rate assistance program that's based off of emergency need. It's modeled off of an energy program that similarly provides crisis line. And so we were able to move dollars into, thankfully, that program and could work by our sister agency.

This as a result of lower. So covered why we had lower than anticipated arrearages. At this point, finance has not reverted any waterboard water arrearages funding pursuant to this control section further. Nor has the Administration determine what to do with the remaining funds. And we'll just stop at that.

Great. Any questions? Yes, go ahead.

Thank you. So what administrative or operational issues does the board have or may have with using the funding for the purpose it was originally intended for?

We know the original intention came with a deadline. There were a window at which arrearages could be covered, and we've covered all those arrearages from that window. So we're not able to do anything under our own discretion now to be able to spend those funds further on, say, other existing debt that may be out there.

If the board were to be asked to do so, I would just note that although it was an incredible accomplishment, within a year we got these dollars out, stood up a program that didn't exist before, and were able to quickly deliver this benefit to so many Californians. But it did come at cost with the board. A lot of redirect had to happen in order to do that redirect from programs that are just as critical.

And so I think for us, it's this balance of receiving the resources to then be able to better accomplish that work a bit, insofar as positions or otherwise. So I think I would just flag that sort of complication with existing funds, and currently, we don't have within our discretion to be able to spend them on anything outside that window.

So you think you would need additional positions to better administer if you had to?

I would just say I would not want to see the amount of redirection that ended up happening to accomplish this benefit that we ended up having to do before. It did harm some of our core work, and it was a significant undertaking and one I'm incredibly proud of. Again, because of the benefit we're able to deliver, but it does come at cost.

And one more question, why don't we extend the period for which these funds may be used or use these dollars to help Californians offset the cost of their water bills?

Sure. At Lizzie Urie, Department of Finance. As the chair noted, the budget act did have specific provisional language limiting to the June 15, 2021 time period.

But additionally, control Section 11.96 of the 2022 Budget act, provides finance with the authority to initiate a reversion of unspent funds from the Coronavirus Fiscal Recovery Fund, which includes the arrearages program to be allocated to direct disaster response costs. So Finance is currently in the process of reconciling those actual disaster response costs. And once that reconciliation occurs, we anticipate making a decision about how to best cover those costs, either through these savings or through potentially additional General Fund.

So given the General Fund outlook, the Administration really needs to keep all options on the table in terms of being able to cover those response costs, whether that means through ARPA savings or potentially additional General Fund.

So you don't think these funds will be used for debt?

So we can't say at this time we are in the process of this reconciliation of disaster response costs.

Okay. Because, of course, there's still a lot of people, there's still a lot of debt. Right. And we need to help Californians with it, and that was the original purpose of these funds, so I definitely would push for us to do that in some way. Thank you.

Thank you.

Well, thank you very much. It's been a very informative day as we move forward, and we're going to wrap this up. If there are no other questions, appreciate your steady attendance here Assembly Member. We will open this up for public comment now, and we'll start with public comment. And this is public comment on the departments in the agenda. And you have 1 minute to identify yourself. Thank you. To identify yourself, and you may begin. Okay.

Thank you, Mr. Chair and Assemblymember Rivas. Jason Ikerd, on behalf of the California Municipal Utilities Association and the San Francisco Public Utilities Commission, really want to speak to the last item and make this real. In San Francisco alone, ratepayer arrearages are 32 times higher today than they were before the pandemic.

And what really matters there is that there's 12,000 residents in that city alone who have $15 million of debt hanging over their head, 37% of which are from the poorest zip codes in the city. Because of Prop 218 and because the people that I represent are local governments. There is no real option for them to resolve this without state assistance. And we agree with what the Chair just said, and we respect how quickly and how effectively the board was able to stand up this program.

But with all due respect, the inconvenience associated with a redirect of staff is not really a sufficient reason for the tens of thousands of ratepayers across the State of California to not have access to the billions of dollars or the $1.0 billion that you and your colleagues appropriated for this exact purpose two years ago. So we would urge you guys to make one change in statute and allow another round of funding to occur.

Thank you.

Thank you very much, Mr. Chair. Vanessa Cajina with KP Public Affairs on behalf of the Los Angeles Department of Water and Power. Also to speak on issue five regarding water and wastewater arrearages, we very much appreciate Assemblymember Rivas' line of questioning. Our customers are still facing a serious amount of arrearage debt associated with water and wastewater from the pandemic.

As you'll recall, county and City of Los Angeles had a lot more fits and starts of when people were able to go to work and stay at work and stay at home. So as a result of that, we're dealing with about $135,000,000 at this point, and that is a significantly higher number than we had associated with arrearage debt prior to the pandemic. We ask you to make that one change. Appreciate the waterboard's comments.

However, we do believe that this is an appropriate use of these funds for customers who really need it. Thank you.

Thank you.

Thank you. Chair Alex Leumer, on behalf of California Trout, Trout Unlimited, Defenders of Wildlife, and American Rivers. On issue three, we're opposed to the dam safety Trailer Bill is currently written. This Bill would inhibit the removal of obsolete dams, which is a strategy clearly outlined in the state's 30 by 30 pathways report. The cost of dam removal is frequently less than repair, especially when maintenance is deferred. Federal funding opportunities recognize this.

California should take a similar approach consistent with federal policy and allow these funds to be used for dam removal. Our groups would be supportive of this Trailer Bill if it included funding provisions for this dam removal. Additionally, Defenders of Wildlife, California Trout, and Trout Unlimited also request the inclusion of other fish passion solutions. Thank you.

Thank you.

Hello. Pilar Onate Quintana here on behalf of the Irvine Ranch Water District and Hubble Water Agency. Speaking on issue 25 with respect to the dam safety grant program, first off, we are very grateful for the initial starter funding to kickstart the establishment of this important program. Secondly, on the flip side here, we are very supportive of the administration's trailer bill language to get this program going in this sort of hydrological year.

It's very clear that we really need to make significant repairs to existing dams, not only for purposes of maximizing storage capacity for those dams that are restricted due to public safety concerns, but also due to current and ongoing flooding concerns. So again, we do strongly support the administration's language on this, and we do acknowledge the Committee's comments in the analysis, and we would like to engage further on those suggested refinements.

Thank you very much.

Good afternoon, Mr. Chair. Mark Fenstermaker here on behalf of Sonoma Water as well as the Salinas Valley Basin Groundwater Sustainability Agency on issue two. Want to recognize a couple of the points and the questions laid out in the agenda regarding small basins and sub basins that are facing really high fees that we're going to have to pass along to pumpers because we have just a small pool of pumpers to help support just basic GSA administration, monitoring, data gathering, and the sigma money that's been coming out so far, even though it's General Fund.

The programs have not been available for those types of activities to be covered. And we are looking to this next round of sigma funding to help support some of those fees so we don't have to charge pumpers somewhere between $300 and $400 an acre, which is really just unsustainable. In addition, on behalf of Sonoma water on issue one, a little concerned at the proposed cuts to the watershed resilience funding.

We are really at the end of integrated regional water management program funding. Out of the last bond, it's been critical for our watershed resilience, and obviously with the weather whiplash we're experiencing, we need to be cognizant of that resilience. Thank you.

Thank you.

Thank you. Cindy Tuck with the Association of California Water Agencies. I'm speaking to issue 25, which is the dam safety grant program and the Trailer Bill Language. Again, we appreciate the starter funding that's continuing, and we support the administration's trailer bill language, and we appreciate the suggested changes that staff has made regarding that language. Thank you.

Thank you.

Good afternoon, Mr. Chair. Beth Olhasso, on behalf of Water Reuse California, on issue one, on the funding, I really, for water recycling, want to support what Chair Esquivel said on how confusing the funding coming from the Federal Government is. We're not seeing that backfill come because of the directed spending from the feds. So while there are suggestions that there's plenty of funding coming from the Federal Government. It's not there as the chair said. And so we really do support the proposed funding as cut.

Would like more, but we'll take the small cut. So really hope that the Committee maintains that funding on the trailer bill piece for the recycled water fee. Appreciate your questions to the chair. Water reuse understands that we do need to start funding and hope that these positions will help expedite our permits. We are concerned. We have asked for that cap of some sort. We're not hard line on a 5%. It was our suggestion.

We've seen a lot of other fees get raised 10,15, 20% year after year and just need some certainty so that we can plan out those projects and know what our ratepayers are going to have to pay. And so some way that we can work with you and the State Water Board on that fee and finding that certainty, we would appreciate. I have one more client just on Serrano Water district in Orange County supporting what my colleagues said on the dam safety funding. Thank you for the extra time.

Thank you.

Good afternoon. Jaime Minor, on behalf of the Monterey One Water, Eastern Municipal Water District, and Santa Margarita Water District, and West Basin Municipal Water District. Want to echo the comments of my colleague from water reuse. She put it very well. We aren't seeing this trickle in enough funding from the federal level, especially when it comes to water recycling infrastructure. So now is not the time to let our foot off the pedal and getting these projects up and going.

And then additionally on issue four, echo the concerns around some sort of cost containment when it comes to the fees. But do appreciate the workload and the need to adjust, but just some sort of certainty for permittees. Thank you.

Thank you.

Thank you. Good afternoon. Darryl Little. On behalf of NRDC on issue five, I'd like to express our support of the extension of the State Water Boards California Water and wastewater arrangement payment program. Assistance is urgently needed by households struggling with large accumulations of water debt. Thank you.

Thank you. We'll now start with the phone lines and the number is 877-692-8957 the access code is 131-5447 operator, if you'll open up the phone lines, please.

Sir. And if you would like to speak, please press one, then zero. An ATT specialist will provide you with your line number, which we will open and identify you with. We'll first go to line 18. Go ahead.

Hi. Thank you. This is Olivia Seideman, climate policy coordinator with Leadership Council for Justice and Accountability. I really wanted to raise some issues around two of the non presentation items that were on the agenda today. The first is issue 21 around Salton Sea accelerated restoration. While we support the continued investment in the Salton Sea, these resources must improve the well being of the communities that surround the sea, whose public health and quality of life continue to be impacted.

As the state slowly develops management programs and implements projects, at least half of all funding invested in the Salton sea must target the development of multi benefit projects that not only create habitat and suppress dust, but also provide resources for community resiliency and access to recreational spaces. And then for issue 27 on SB 905, carbon capture technologies have the potential to either directly or indirectly extend the life of fossil fuel infrastructure and do not address copollutants.

The Legislature must ensure that as allocations are made for SB 905, implementation, agencies are enacting robust community engagement on this implementation, are ensuring that there is no additional pollution and that all projects have pollution reduction plans and that no projects move forward in the face of community opposition, especially in already overburdened communities. Thank you.

We'll go next to line 21. Go ahead.

Hi, this is Natalie, Water Policy coordinator with Leadership Council, providing comments on behalf of the water items discussed today. We're pleased the Committee discussed the remaining arrearage funding. Low income households are still struggling to recover from water debt accrued during the pandemic. We urge legislators to use the remaining water and sewer arrearage funding to address debt accrued through the end of the pandemic on February 28, 2023.

As such, we support the extension of the statutory timeline for ridge debt to enable more of the funds to be spent on the state waterboard's arrearage program. The state waterboards arrears program successfully allocated more than 400 million in debt needs. Given the success of the arrearage program, the remaining arrearage funding should be left in their program. Despite significant storms, there's still severe drought challenges, including replacing 1600 drinking water wells, which may take nearly 10 years.

Furthermore, throughout the storms, domestic wells continue to go dry, and we will likely see additional drinking water wells go dry this summer. The state must preserve drought contingency funding to be able to continue funding well replacement salt water and other emergency projects to ensure that.

We'll go next to line 17. Go ahead.

Thank you very much. Your time is up. Thank you.

Good afternoon, Chair Bennett, members. This is Megan Cleveland with the Nature Conservancy calling to provide comment on issue one. We urge the Legislature to preserve critical funding in the budget to support nature based climate solutions and water resilience. As you know, the governor's January budget makes significant cuts to natural resources and climate spending. These cuts are far greater than the proposed reductions in other areas of the budget.

Specifically, the governor's proposed budget cuts the drought and water resilience package by nearly 200 million and delays an additional 300 million. This includes cuts to climate resilience at the watershed level. The Nature Conservancy urges the Legislature to protect critical investments in nature based solutions, multi benefit flood management projects, habitat restoration and clean drinking water from further budget cuts. We also recommend that the Legislature restore and preserve General Fund appropriations to programs that are considered ineligible for special funding or bond funding.

Finally, these cuts demonstrate that California urgently needs a climate bond of at least $15 billion to provide a stable long term funding source for nature based climate solutions as well as a structured investment plan to address the impacts of climate change. Thank you very much.

Thank you.

We'll go next to line 14. Go ahead, please.

Good afternoon, Chair Bennett and members. This is Robert Gore from the Guelco group, and we appreciate your diligence and patience. On behalf of the Sacramento Area Flood Control Agency, the nation's most at risk flood agents, and also the Kings River Water Authority operators of Pine Flat Dam.

We strongly support issues 18,24,25 and items to be heard 1,2, and 3. On item to be heard number four, and on behalf of Kings River Conservation District, Modesto Irrigation District, Kern County Water, the California Association of Wine Grape Growers in the cities of Fresno and Long Beach. The proper funding source for this is as a statewide benefit is General Fund, not the ratepayers. We support the Water Board's initiative, but we feel this should be transferred to a General Fund continuing appropriation. Thank you.

Thank you.

We'll go to line 23.

Good afternoon, chair Members Erik Turner with Niemela Pappas and Associates. On behalf of Turlock Irrigation District, we'd like to express support for the proposed funding included for updating water rights data for California modernization project included in issue 14, as well as echoing previous comments in support of the Governor's Budget trailer bill on dam safety in issue 25, and would ask that additional funding be included for dam safety and flood protection. Thank you.

Thank you.

Line 15.

Good afternoon, Chair Members. Jamie Fanous with the Community Alliance of Family Farmers, CAF. CAF represents over 8000 small and historically underserved family farmers. We want to express our thanks to the Department of Water Resources for their $10 million investment to support small and socially disadvantaged farmers to engage in sigma. We appreciate the attention committed to flooding today. I wanted to draw your attention to the fact that this extreme flooding has decimated hundreds of small farms, many have lost their homes, farm equipment, and more.

There's currently no federal or state programs to help them get back on their feet, and we urge the Legislature to allocate at least $5 million as part of the Flood Contingency Fund through CDFA's California Underserved and Small Producer Program, or CUSPP. We really appreciate the time and thank you very much.

Thank you.

We'll go next to line 20. Go ahead.

Hi, this is Sandra Nakagawa, policy Director at the California Climate and Agriculture Network, also known as CalCAN. I'm calling in today about issue one and the proposed cuts to the state water efficiency and enhancement program, also known as SWEEP. SWEEP has consistently been oversubscribed by 200% to 300%, meaning there's two to three times as much funding requested as has been available. While we celebrate this wet winter, we know from history and climate modeling that the pendulum will inevitably swing back towards drought in the near future.

Meanwhile, the Colorado river is still in crisis due to a long term mega drought. In the Imperial Valley region, which is the largest user of Colorado river water, SWEEP was oversubscribed last year by 280% with 48 applications submitted, but only enough funding to cover 17 projects. Those 17 projects alone, though, will save 4800 acre feet of water each year. This is about more than just water. By electrifying and solar powering irrigation pumps, the program reduces local air pollution and scales up renewable energy.

By improving irrigation efficiency, the program reduces potent nitrous oxide emissions and nitrate leaching into groundwater. We urge the Legislature to restore the composed steps to SWEEP. Thank you for your time.

Thank you.

Line 22.

Good afternoon, Chair and members Kaitlyn Johnson with Political Solutions on behalf of California Water Association. Speaking on item 3940, issue five, PUC reports show that customers continue to carry substantial amounts of water utility debt. Despite the success of the CWAP program, households and small businesses across the state continued to experience negative impacts due to the pandemic. Using the remaining unspent funds from the original appropriation would help many California families who continue to face significant economic challenges.

The CWAP program is best suited to provide this assistance, as it does not require the customer to apply for the assistance. Rather, the utility applies for the assistance on their behalf and applies it to their bills. For these reasons, we urge the Committee to approve extending CWAP funding eligibility. I've also been asked to express support for this request on behalf of California Water Service. Thank you very much.

Thank you.

Line 19.

Thank you and good afternoon and really appreciate the discussion and comments today. My name is Lauren Ahkiam, and I'm calling from the Los Angeles Alliance for New Economy in LA and so really appreciate again, Assembly Member Rivas' questions, particularly as one of our representatives. We are calling today in strong support for the consideration, as discussed, to extend the CWAP program. We've seen how successful it's been and something that we fought and worked together with you all to first award in 2021.

And we know that there are still tens of thousands of customers in LA who carry that over $135,000,000 in water and wastewater debt.

And this would be allowing these remaining funds to go to relieve those customers and through the really streamlined way that the Legislature approved, where customers don't have to wade through super confusing and complicated processes that sometimes LIHWAP can be, that will really expedite people getting relief and help people to have more stable economic footing and would also just really encourage, as other folks have mentioned, the continued funding for the water solutions that we need for California like wastewater recycling and PFAs to remediate our water supplies and the sigma work.

So thank you for that consideration as well.

Thank you very much.

Line 25. Go ahead, please.

Good afternoon, Chairman Members Lily Mackay calling on behalf of San Diego County Water Authority and United Water Conservation District in support of the dam funding portion. Thank you very much.

Thank you.

Mr. Chair. We have no further lines in queue.

Thank you very much. Operator. And this meeting is now adjourned.