Assembly Standing Committee on Environmental Safety and Toxic Materials

Turn the microphone on. Welcome. Good morning, everyone. This is the Assembly Committee on Environmental Safety and Toxic Materials oversight hearing Wednesday, March 13, 2023. The oversight hearing will have a handful of colleagues coming in and out this morning, so be patient with us. This hearing is being recorded, so there will be a number of different folks watching in. Providing safe, clean and affordable drinking water is incredibly important. Sounds simple, but it's not. In a State of 40 million people, and with our state water sources so diverse as the mountain, snowpack, lakes, out of state rivers and groundwater basins, there are many obstacles to providing clean water. Some of our challenges include drought, contamination, economics and the effects of climate change from sea level rise, fires and floods. In a state as wealthy as California, it's troubling to think that not all Californians have access to safe, clean drinking water. The lack of clean, affordable drinking water impacts disadvantaged communities disproportionately.

These communities are usually also impacted by multiple sources of pollution as well as economic challenges in their communities. This hearing is more than a check in on a very important state program. It's a gut check to us. Part of our shared responsibility is to ensure all Californians have access to safe, clean, affordable drinking water. And as we hear from speakers today, please keep this goal in mind.

We want to hear from everyone about the challenges that are before us, as well as the pathways on how to improve to ensure on this particular goal. Before we start, I want to thank all of the witnesses in advance and say thank you for committing to not only this vision, but also to this constructive dialogue that we've set for today. And so I'll ask the first set of panelists to come forward, and at the moment, ask any of our colleagues, particularly Ms. Alois Reyes, if you want to say a few words.

I excited to be part of this committee and more excited because I know that through the years of knowing our chair, I've known him to be a champion for clean, safe, accessible water. I think he's educated us on so many of the issues, especially those issues affecting our most impacted communities, mine being one of them.

And so I want to thank our esteemed speakers who will be sharing so generously of your time and your expertise to provide us the information that we need as we move forward in making decisions for all of California. Thank you.

Thank you, colleague. To start the hearing off today, we have Mr. Joaquin Esquivel, the chair of the State Water Resources Control Board, and I want to thank him for his work and continuous advocacy throughout the entire state on this particular matter. And so the floor is yours, sir.

Thank you. And good morning, chair. Thank you for your leadership. And thank you for the members of the committee this morning and this opportunity to update you on California's progress on meeting the human right to water. My name is Joaquin Esquivel. I am chair of the State Water Resources Control Board. I'm fortunate to be one of five board Members here at the State Water Board.

I think, as you all know, we administer water rights in the state and along with our nine regional water quality control boards, oversee water quality regulation. And as of 2014, we regulate the state's over 7000 public water systems, and here have primacy over both the state and federal Safe Drinking Water Act. And importantly here, to really provide some context to how it is that we got to where we are with here nearly a million Californians without access to clean water.

I did want to provide just a brief history, and I can sometimes go long, so I will try to keep it as brief as I can. I think first, it's important to remember that when you look at the last 200 years of water development within the state, it mirrors here the development of our drinking water systems as well, which is to say 200 years ago, we didn't have the agencies and the decision making that we have now.

We're not as protective of the activities that go on in the state. And to be candid, a lot of unregulated activity took place that we're still dealing with today. Whether that's mercury contamination, whether that's disconnecting our floodplains, whether that's really altering the systems that we first found here. And really, when you think of our drinking water systems, the first moment that the state really started to grapple with the challenge of providing drinking water was in 1915, when at that point, it was typhoid that was ravaging communities.

And so at the Bureau of then Sanitation Engineering, there was a drinking water program that was created trying to fast forward then what you have after that is 50 years still yet of development that didn't regulate industry, where pollutants and discharges into our waterways were largely left to locals. And so it really reached a crisis point here when in the late 60s, the State Water Resources Control Board was actually created. That brought together a water rights office from 1914, some pollution control boards from the really said we had to get a handle on this crisis of pollution in our waterways because it was limiting the ability for Californians, then 15 million Californians, to be able to develop our water resources and grow. I think it's important to note thereafter four years, Porter Cologne was actually the model for the Clean Water Act.

And what we had was a Safe Drinking Water Act as well at the state and federal levels, and a huge amount of federal investment that expanded access to clean drinking water. So the last 50 years of history have been about the ebb and flow of investment from the Federal Government. But what's important now, and kind of brings us to current time, was that for all of those investments that came from the Federal Government, for all that attention that this state and the national government, Federal Government paid to lack of access to clean drinking water, there were still so many communities that still hadn't without. And that's what led to really 2012, when California adopted the human right to water. That was because communities insisted on access.

Even though the Clean Water Act and the Safe Drinking Water Act and previous investments had really passed up communities, it was that generational lack of access and the state saying, we're going to own that, that really brought us into this modern discussion that we're having quickly. Then kind of telescoping, just two years later, in 2014, the Division of Drinking, the drinking water program at Department of Public Health, was actually transferred to the State Water Resources Control Board. And there we hit the ground running.

We worked with this legislature in order to be able to develop authorities that don't exist anywhere else in the nation around consolidation, around administration, providing administrators, rather, for drinking water systems, and importantly, as Well, dollars to even just better understand how many Californians were without access to water. But importantly, what is it going to take to actually fulfill the human right to water?

And that brings us then, to 2019, when Governor Newsom really took this as his personal calling and worked with this Legislature to finally pass a source of funding prior to that. And here we'll get into, we have programs like the State Revolving Fund that have really helped continue to support access, expand access to drinking water, but not a Fund that really drilled down onto our challenge, which is really small, failing systems.

And so glad to be here, glad to be able to really report on the progress that passage of SB 200, the Safe and Affordable Fund, and this, again, telescoping discussion that we've had in the state. So when we look at what this challenge really is, I think it's important to note that over 95% of Californians have access to clean and safe water. It's not just clean and safe water.

It is actually water that meets some of the highest standards in the nation, and they are the highest standards in the nation. It's because we regulate compounds like 123 TCP, and other constituents that at this point, there aren't national standards for. We oversee, again, somewhere around 7000 total water systems. About 3000 of those are community water systems. That means that they're serving populations of a permanent population of 15 connections or greater.

And then we have a lot of smaller systems from there that the counties are primarily regulating, overseeing, and then also domestic wells as this continuum of this challenge of access to clean water. And all through there, many different flavors of water systems, you might have a municipal system, you might have a special services district, you might have an independent investor owned utility. And brings some of the challenge that we really have with being able to maintain access to drinking water.

It is a localized and disparate endeavor. And importantly, when we look at the number of violations from systems, 90% of them are from systems under 500 connections. So there is a direct relationship, oftentimes with having the economies of scale and the ability to maintain access. But here we know that at the start of the safe and affordable program in 2019, if we consistently apply our metrics now, we had 1.6 million Californians without access. That's now down to about 900,000.

It fluctuates and is part of the challenge. We have systems that here are at risk and then become failing. And part of our success has been around our ability to use data. So then, moving quickly here again, you kind of see the scale and scope of our challenge compared to other utilities. We have so many more systems that we're needing to oversee. So what is the Safe and Affordable Fund been able to get us when we receive this 130,000,000?

Important to note, the Safe and Affordable Fund provides us 130,000,000 over 10 years at this point, and we're halfway into implementation of that. We're here in the fifth year. What we knew is that 130,000,000 wasn't going to be able to do everything that we needed. What it provided was a basis for technical assistance and dollars for these small systems. But we brought all of those other authorities that I talked about at the start that we worked with this legislature on, mandatory consolidation authorities.

And so here you see really the larger, safer program that we created is composed of our drinking water needs assessment, our supportive systems outreach, yes, funding sources, but also the regulatory authorities we have, and importantly here, the safer advisory group. I want to note that some of the panelists that will be following me are members of that advisory group.

And it has been so critical because we have needed to have an open ear, an open mind, and importantly, synthesizing a lot of experience out in our communities with this challenge of access to clean water. So here again is kind of the components of the program and what we've been using. And I won't tick through all these. I don't want to take too much time. I'll fast move into what we've been using insofar as our funding sources. Again, as I noted, the 130,000,000 is good money.

It's foundational money. It allows us, though, to really tap what are multiple sources of funding for this program, including the State Revolving Fund, including PFAS General Fund support. We have principal forgiveness as well from the state revolving programs. We have bond dollars. And really what we're trying to do is use all of funds that we can to make sure we are maximizing what is this investment that we have from the legislature and importantly, looking to meet this incredible goal we have.

So how are we doing on meeting some of that? Well, on getting dollars out, I just wanted to note for the State Revolving Fund, for every dollar that the legislature appropriates for matching funds for the Federal State Revolving Funds, that's $5 in federal funding that we're able to bring back down. And in total, since 2014, the State Board has actually invested here.

And I'll just move to the next slide, actually $17.2 billion and that's 2.7 in this Drinking Water State Revolving Fund, 7.7 billion in the Clean Water State Revolving Fund. That's a lot of wastewater and water recycling that goes out. And importantly, 3.4 billion of that funding has been in disadvantaged communities. And I think I want to make sure I go then to the real metrics of what all that funding has gotten us. What we now have are these metrics.

I'll note, as you can see, are to June of 2023, which doesn't encompass all the funding that we've been able to do this year, but we've been able to bring back 200 systems into compliance that were failing. That's $620,000,000 in grants to disadvantaged communities. We've accelerated 385 projects through technical assistance and assisted 4600 households with interim water solutions. I'll note there, as we all know, what we've experienced these last years since passage of the Safe and Affordable Fund is another turn of drought.

That was in part, which the 2012 through 2015 drought wasn't part of the real momentum to pass the 2019 Safe and Affordable Fund because of the dry wells that we saw, because of the lack of access and the challenges that we saw from drought. Certainly then, and to still be thrown back into drought so quickly, to have to respond to COVID and to still be able to boot up this program and have numbers like this and metrics that show a lot of momentum is great to see. But we know that there's still a lot of challenge here before us. So here again, I won't go over and over our accomplishments, but we are proud of the fact that we've been able to help 2 million Californians since 2014.

We've had 120 systems that have been consolidated. That's again going back to those mandatory consolidation authorities and consolidations generally. That's not all mandatory consolidations. A lot of that is voluntary, which is really the sort of discussion. And ultimately the success of our work is really dependent upon this disparate leadership that we're tapping. And again, you'll hear from others that we've been able to work with on the program that have accelerated a lot of critical discussions in communities. And here I'll go to my next slide.

So being able to hear note what is coming next. We're cognizant that we have PFAS coming up here in the spring from the Federal Government. There's chrome six that the State Board has a maximum contaminant limit that we're considering. There's climate change pressures. There's a lot that not just our small failing systems, but our drinking water systems generally will need to be able to respond to and includes climate change.

So here, the investments that we'll be making in, say, water recycling and treatment and continuing to ensure that, that 95% continues to grow, that we get to 100% when it comes to meeting the human right to water is going to require continued funding. It's going to require continued here attention to the challenges that our small failing systems importantly are facing, but also our drinking water systems writ large. We have to be mindful that many small systems face technical, managerial, financial challenges.

And when we say, go to a San Francisco Public Utilities Commission or the Los Angeles Department of Water and Power, the level of service that comes from us as an agency is very different than the level of service for a small system with a board that may only meet once every couple of months or may only have a part time operator.

So, so much of our focus will need to be on continuing to support through technical assistance, those small systems, but then also continue to be able to meet again. What we know is a huge challenge still yet here within the state. But when you look nationally, no other state in the nation has data like we have with the needs assessment dashboard has programs and funding and emphasis on this challenge and have taken it as seriously as the Newsom Administration and this legislature.

So some lessons learned and a couple of things to just leave us with. First, reliable, transparent data about systems, including how they're functioning and why they fail, is critical to any progress in this work. Having this data and making it available to everyone, including our community and municipal partners, means that we can be informed and we can strategically approach sustained solutions. Second, again, this will take a village. It really requires the collective leadership of a lot of local agencies.

And there I want to note the Coachella Valley Water District. And I know Vice President Castello Estrada will be before us here about some of that work, but there's other agencies as well, like Placer county water agency, I think of the newly formed Ukiah Water Authority, which is consolidating systems. There's a lot of leadership, and it's going to take that in order for us to really meet the human right to water.

And then I think, third, I want to make sure and leave with that sustainable drinking water solutions aren't a one size fits all. You have to find a solution that works for a community which requires extensive planning, forethought and capital. And ultimately, we look forward to what we know is going to be continued challenges, but a lot of momentum and a lot of humility ultimately, as well as, you know, chair, coming from the eastern Coachella Valley, I take very personally what are generational gaps in access. But I'm very proud of the momentum we have and still yet the work that's before us.

Thank you, Mr. Chair. I'm going to ask my colleagues to see if they have any questions for you at the moment.

I do want to thank you so much for your presentation. And I think that going back to my opening comments about the fact that our chair has, over the years, talked about the million Californians without good drinking water, safe drinking water, that is something that, quite frankly impacted me because it was something I did not know.

So when we look at the Auditor's report, it is one of the comments that is made, and I appreciated your last comment, that sometimes we accept these things with humility because you're not responsible personally for what's in this audit report, but as the chair now then trying to figure out what we do to make it better. I think everybody would agree it's unacceptable to have a million people. And by your statement, you said it's now down to 800,000 or a number less than a million.

But that, for me, when I first heard it from our chair years back. It really did impact me. So hearing something that there's more that is being done. One of the areas that I was most involved with over the years has been the lead in water and how that's impacting our children and how that will impact them for the rest of their lives. It isn't something that you can take some treatment and you'll be fine. The rest of their lives, they will have the learning disabilities, depending on how much of that lead they have ingested. But from the audit, they talk about liver and kidney problems, they talk about cancer. These are things that impact. And again, it's our most disadvantaged communities. And I appreciated the additional investment in the disadvantaged communities. The other is, I know we talk about funding, but one of the auditors findings was that the funding was available to help these failing water systems.

But the processing takes so much time and that that needs to be shortened. The monitoring of the technical systems that you talked about and also just the outreach and trying to do more on the outreach. Again, you get to be the messenger, so you get to hear our thoughts on this, but it is so important to the people of California and they depend on us. Now, there were recommendations. Part of that was legislation that we need to introduce to help to solve the problem.

My question to you is, what would you like the legislature to do to untie your hands, to take care of some of the issues that are before you? We really do depend on you to take care of the remaining 800,000. This is long term. It's always the same people, it's always the same communities, and it's the ones who can least afford to be impacted the way they're impacted.

I completely agree, Assembly Member, and I appreciate your leadership and attention on this as well. I'm with you. When we as Californians, I know as I grew up not here having to worry about access to water, but knowing when I go to my grandmother's ranch that we don't drink the well water. We have bottled water.

Seeing those dichotomies, it's easy, I think, for most of us to not realize that again, because 95%, over 95% of Californians have access to clean water, that there are communities and there are communities that haven't had access for generations. I appreciated the audit, truly, when you read the content of the audit, it reflects what was a lot of good discussion with our folks around, continuing to need to have an eye on getting dollars out faster.

But also what was unfortunate, I think, is that it editorialized a headline of a lack of urgency at the board that I know isn't reflective of what is this momentum and a lot of investment that it is going out into communities. I think it's important that the audit didn't find waste, fraud or abuse amongst its findings. And so what we have done is made sure that we have an expedited drinking water program that we adopted since then. It was one that we were working on and importantly acknowledges that we are trying to do everything we can within our own regulatory authorities to just cut through where we can. And importantly, these are very oftentimes difficult technical projects that sometimes it's out of our hands what those timelines take, and especially when we get to real communities without capacity. And it's why it's been so important that technical assistance is there.

It's good that we continue to make sure we have metrics on what that technical assistance is delivering for the projects, but what it's doing is creating that pipeline for communities that haven't been able to take advantage of, say, I think of the American Recovery Act, I think it was, and those are fundings where you had to be shovel ready. Our communities don't have shovel ready projects because of just this generational lack of investment sometimes. Again, I appreciate the audit.

I think its headline created this sense of generally that the board isn't up to the task. And what I hope to continue to do is make sure that we're communicating what we're doing. And to your point, where are the stumbling blocks? And I think that I won't take too much to opine, absent some further thought for you, but our mandatory consolidation authorities are really important.

They're what help us drive to solutions when sometimes there's resistance and there may be opportunities to make sure that that is a process that we're able to use more if needed, so that we really set that expectation and get folks connected. And ultimately, consolidation is one of our strongest tools for ensuring that we have access into the future, because they really are those economies of scale that systems and communities need if they're going to be able to not just have access now, but maintain it.

Thank you. I appreciate your questions. I know again, the audit may have not have painted the board in the best light sometimes, but again, I welcome all the good content that was in there and this opportunity to continue to talk about the work.

When you talk about 95%, that's a big number. So I applaud you on that. And again, you get to be the messenger. It's just something that is of great concern and count on the legislature because we are concerned collectively and we want to be able to help in any way that we can so that you then are able to achieve the safe, affordable drinking water for all Californians.

Really appreciate that and legislature has been such a critical part of this. So I appreciate that continued engagement. Thank you.

Good morning. Thank you for answering all the questions and thank you for leading that. I just have a couple of questions. The 900,000 California that have lack of access, do we know where they are? Do we have the location? The cities?

We do. Thankfully, thanks to what was a $3,000,000 one time investment from the legislature just before we adopted the safe and affordable Fund in 2019, we did what's known as a drinking water needs assessment that brought together dozens of metrics, dozen plus, I think it is, around what is the technical, managerial, financial standing of these systems? What are the contaminants that may be exposed to?

How close are they to a successful, well run system so that we started to get actual dollars on, not just the need that's out there, but what is it going to cost in order to be able to meet the human rights of water? That dashboard is available on our website. It's live insofar as it is updated regularly with what are the currently failing systems?

What we know and here, because of our better understanding and data, is that we have systems that are at risk that may have an E. Coli violation. And so they come online because of some challenge, but it may be addressed. So they go back off, right? They're no longer seen as out of compliance, but that kind of oscillating, if you will, is a warning sign for us.

It's a blinking sign, right where we see a system that is, it may be a reporting violation they forgot to report, but that can be signs of some greater challenge of the system. And intervening with those systems while they're at risk has been such an important strategy of the boards at this point because we do want to get upstream. By the time a system has failed, it means there's probably been a lot of disinvestment.

There's multiple issues oftentimes, and it's more expensive to then address the issue. So we do have that data, and importantly, what we have is a lot more other data that's giving us a fuller picture of what it's going to take. I think with a population of nearly 40 million, we're the size of Canada. So it's really trying to think about supporting and administering systems at almost a national state scale.

And do you guys have outreach to those communities, letting them know that their water is contaminated.

Yes. So the water systems themselves are responsible for meeting the laws of the Safe Drinking Water Act and the federal Drinking Water act. We're there to regulate those systems and make sure that they're following those laws, which include notice. So systems, when they are no longer serving safe water, have to notice. And importantly, we have one, our division of drinking water, which has the engineers and the technical relationship with the system.

But thanks to the Safe and affordable Fund, we actually also have the office of public participation with a lot more folks. So we have real folks with community experience to engage with communities, not just the engineering experience to deal with the water system. And so I've been very proud of, again, the resources that this legislature has provided us, the administration has been a champion for and that we've been able to actually bridge a real discussion here.

And then on the flip side of that, on the positive side, you also said that you guys are providing clean, about 900,000 Californians with clean drinking water. I would hope that you have that on your website as well.

Yes, we're trying to show the full picture. Right. What is the status, how many systems are not meeting, how many are meeting, and what are, again, as I said, there are future challenges here. We have PFAs as a maximum contaminant limit that the Federal Government is going to be coming out with in the spring. We have a lot of work in the state that we're doing there.

And I think it's important when we talk about threats to drinking water system, whether it's PFAS or microplastics or chrome sick, these are all risk based systems. And dialing back to back when typhoid outbreaks were happening and there used to be. We've come a long way. We still have a long way to go, though, to really drill down for our communities.

Thank you.

Thank you.

Thank you, chair. Good questions in regards to the audit. Good questions. In terms of remaining Californians who require access, I want to talk a little bit about the mandatory consolidation comment that you made. Not everywhere in California does the policy and the politics align for purposes of executing the end goal here. And this mandatory consolidation concept idea that you put forward here, can we talk a little more about that? Because I think it's important that this legislature hear more about what are some of the impediments.

And perhaps we'll hear that from some of the other speakers following you to what's in the way of us ensuring that all Californians have access, right. And we've heard directly from some of our colleagues that the program doesn't work because there are agencies locally that don't want to consolidate, that don't want to take on failing systems, that don't want to take on the responsibilities and liabilities of communities who are a financial burden to their system. And so let's spend a little time talking about this mandatory consolidation authority or power that perhaps could be contemplated by this legislature in order to achieve this end goal.

Yeah, I appreciate that, chair. I'll know we have the authorities now. But again, I want to invite up, actually, Darrin Polhemus, our Director of the division of drinking water, and I have as well with me, and I wanted to apologize. I meant to introduce after my comments Joe Karkoski, who's the head of our division of financial. You know, it might be helpful to be up here as well as we talk about some of this. And so, Darrin, I'll maybe just hand it to you.

I know that we have a number of mandatory consolidations that we've gone through. There's a number in the hopper. We have a ton of voluntary consolidations, which is really the more ideal when communities can come together and we don't have to be dictating how the systems do. But to the chair's question, I don't know if you.

Yeah, absolutely. I'm happy to talk about it. It's really an original idea that I think California should take credit for. The rest of the nation is starting to look at it a little bit, and there's plenty of us to unpack in it. We entered into it cautiously. It's very important that communities remain involved. Right. We don't want to be a dictator, state or imposition on the communities when we're putting them together.

We're also very sensitive to, sometimes these communities are separated for the wrong reasons, redlining, exclusion of practice, all of those really ugly reasons that may have separated them in the past. And putting them together is something that we need to do deliberately in a fashion that makes sure that everybody's protected in that space. So our early foray into this put a lot of safeguards. There's a lot of public process that goes into setting that up.

I think now after five years or so of our experience on it, it's a good time to reflect on with us and our environmental justice partners in the water space about what maybe we should contemplate as far as adjustments to make it quicker. One of the things we did see just we should back up for 1 second too and say that the credible threat was as important as actually having the authority. Right.

We went from an average of four consolidations a year prior to the authority granted to us, to over 40 in the intervening years. And that is a huge improvement that we saw. The challenges we see now are some on timing. There are some built in time frames that we might want to shorten around noticing and the likes, because again, we wanted to give the communities time to come to solution.

But there are obvious points now where we can see from our perspective that they're not going to. And so why wait the full six months that the statute requires? Maybe we should accelerate some of those things. And the other important part that we're starting to see as well is not all communities can physically connect.

We need to probably expand our thinking about consolidation into managerial consolidation, because there's a lot of efficiencies that can be gained just by having one professional group that's led by community members that oversees the billing and the equipment and the likes. So to bring that together and trying to do that will be a really important part.

Thank you. I think it's important that we seriously consider and maybe the audit has some correlations to the issue of timelines and shortening those processes in order to get to the end goal for these consolidation to occur. When I hear from my colleagues that the program isn't working, many times it's because of the politics on the ground, the policy is working in many other places.

And I hate to always say, well, it's working in the Coachella Valley, because then it's, well, you were part of the, kind of author of the legislation, maybe that. No, it was a very well thought out statewide approach that was taken to address this issue. It wasn't thought of just in the lens of what's happening in our region. It was a crisis that was thought out for some time.

But it's the politics that are getting in the way locally where agencies are just saying we're not interested in taking on these responsibilities. The incentives are not big enough. Right. To take on the financial burdens is kind of the feedback. And in some cases, I hate to say, there's also, we don't want to serve those folks. I mean, we've heard that. And the fact is that this mandatory consolidation effort, I think, is the only way in some cases that we will get to eradicating the safe, clean drinking water problem in California. I don't know if my colleagues have any other comments on that front or any questions on that.

I appreciate exactly what you're talking about, Mr. Chair, and I think that consolidation is something that we appreciate what you've done, but you're right, the local politics sometimes do hinder those efforts. And if it is mandatory, then there isn't the choice. We sort of take the politics out of it. We require that it be done because we already saw from the information you provided for those that are 500 or less, those are the ones that are most impacted.

So if we know that we have to figure out how we put those 500 with another 500, then they're no longer, there are less resources being used by the state to monitor all these small groups. I recognize some of them want the autonomy, but we have to figure out, again how we serve all of California.

I don't have any other questions. I appreciate you talking about lessons learned. I appreciate the questions again about the audit and spending some time about the mandatory consolidation. Just appreciate your leadership, your accessibility, and looking forward to continuing to work on this issue. I'm hopeful that some good dialogue comes out of the next group of speakers. And if it makes sense, Safer 2.0 kind of perspectives, legislative proposals can come from a dialogue like this to only make the program a much more successful one. And so just again, thank you for being here. I don't know if you have any closing comments. I know you'll be here for the rest of the dialogue.

I will be here for the rest of the dialogue. And just thank you. I really do appreciate that. And I think it is a really important moment. We are halfway through implementation of the Safe and Affordable Fund. That's, again, as you heard, with all of this work, it's a smaller subset of the funding that we have. There's a bipartisan infrastructure law. There's other things.

But that is such a critical component of our funding because we have nowhere else to go for the real focus on small failing systems, and we need those dedicated resources for them, even as we also look at our larger drinking water program. And it is about supporting the larger systems, too. But we have to fix this, and now is a great time, as you said, chair, to really check in, understand, do more and really appreciate that partnership.

Thank you.

Thank you.

We'll now prepare for the stakeholder perspective. We have Cástulo Estrada, board Vice President, Director division five, Coachella Valley Water District; Kyle Jones, policy and legal Director for Community Water Center; Karina Cervantes, managing Director, California Association of Mutual Water Companies; and Rami Kahlon, Director of Regulatory affairs, California Water Service. We'll begin presentations in that order. Welcome, everyone, and thank you again for being here.

Good morning, chair and members of the Committee, I'm Cástulo Estrada, Vice President at the Coachella Valley Water District. Our district is honored and very much appreciates your invitation. We were here back in 2019 during the joint informational hearings that included this Committee to testify on why SB 200 was critical to addressing California's human right to water policy. Today, we're here to give you a summary on what the funding and the safer program has allowed us to accomplish. I think my mouse isn't working.

Our agency is in the desert area near the southern border, and we span from about palm springs to the Salt Sea, and you can see us there on the map towards the end, our region circled in that black circle. All the water in our region that's used for drinking purposes comes from the ground. Our aquifer in General produces high quality water, but we have some issues in the eastern portions of our valley.

There on the map, you'll see areas colored in green, yellow, and red, indicating high levels of arsenic. We have high levels of chromium six and fluoride in these areas as well. There are several small water systems in this area that are not in compliance with the arsenic rule. This is a large unincorporated area of Riverside County that is rural and mainly agricultural. It's classified as either disadvantaged or severely disadvantaged.

Communities and small water systems have developed over the years in the form of mobile home parks to satisfy the need for housing. There are over 100 small water systems here, and public infrastructure is sometimes miles away.

Shortly after the state recognized that every human being has the right to safe, clean, affordable and accessible water, our district formed the Coachalla Valley Disadvantaged Communities Infrastructure Task Force. Our mission to secure safe, affordable water for Coachella Valley residents by coordinating and collaborating with the community, other agencies, elected officials and stakeholders. One of the first things that we did at the task force was complete a water supply master plan.

It was almost like our own mini needs assessment, and we did this by using a grant fund grant that we received from the State Water Board. We identified, analyzed and prioritized over 100 small water systems to be consolidated within our district. 43 consolidation projects were created with an estimated project cost of about $100 million, back in 2018. Since 2018, our district and the Water Board have made significant progress on implementing the top two ranked projects within our master plan, and we've received $34 million so far.

We have five other projects in the works. The applications are at different stages and we are working with the waterboard without any issues. These seven projects represent about 48 systems of the 100 systems that we identified. Prior to the completion of our master plan, we identified three other consolidation projects that we have since completed.

We worked on these projects from 2016 to 2021, and during that time, both our district and the Water Board gained experience on how to better implement projects and the funding process in general. Both the district and the Water Board have learned that these consolidation projects are complex and lengthy for many reasons, including environmental challenges, right of way issues, and layers of outside agency involvement and approvals. One of the items that we have identified as critical to the implementation process is meeting regularly.

Our agencies are meeting once a month and we sometimes meet twice a month when there's critical items to discuss As indicated by the number of projects that are underway and completed, the current process is working. In summary, about 43 consolidation projects have been identified through our master plan. Three projects have been completed, seven projects are underway and this represents about 48 systems. Of the 100 systems that we identified, our district and the Water Board are coordinating well, resulting in $63 million in funding.

This funding is achieving the goals of the human right to water policy, benefiting about 9300 people so far. We are committed to continuing this work with everyone involved and the big question I think, is why is this funding and the safer program important? Well, the truth is that we wouldn't be doing any of what you just heard about without the support of the state and the safer program.

Water systems across California will continue to have challenges due to several factors, including aging infrastructure, climate change and evolving regulations. We urge you to continue supporting the safer program and our state's human right to water policy. And I thank you for your time.

Thank you, Board Member. I want to just add a little context and I won't take too long.

The water district in 2012 or so went to district voting, and it allowed for reflective representation, allowing for a discussion like this to even elevate itself to be a priority. From that point forward, allowing for a disadvantaged communities task force to be established and incorporating the community to be able to again elevate these types of priorities, to be part of a policy discussion and then a pursuit of resources to implement these types of projects. And so the politics aligning with the policy is critical.

And I want to recognize the work of the Vice President because he has led that effort. The makeup of the board, for the most part, has not changed a whole lot, but he has brought the leadership of the rest of the board along to agree to address this issue. And they've all now subscribed to the need to address this issue. And I give them credit, but I give the Vice President credit for leading this effort.

And so I just wanted to make sure that people in this room recognize that. And I believe that's why this program has been successful in our region. So thank you, Mr. Vice President. The next presenter.

Okay, good morning, Chair Members. Kyle Jones, I'm the policy and legal Director with Community Water center. We're an environmental justice nonprofit based originally in Viscelia, California, focused on organizing an advocacy around the drinking water crisis. We since expanded. We have our office in Sacramento, of course, but we also work in Watsonville, California, on the Central coast, in Monterey County there. In both areas, we're focused more on providing direct technical assistance funded through the safer program to support some of these consolidations.

And then we also have staff in DC, which is a great addition. So we can kind of really work on addressing this problem from all levels to make sure that we can move to get access to clean, safe, and affordable drinking water for all Californians. So I wanted to start by just talking about where we were before the human right to water passed and why our residents were so focused on wanting to pass that law.

And so this is a snapshot from the Tulare County General Plan. This has all been removed, and I'm not going to read it, but I'll paraphrase, there's a lot of communities in our unincorporated communities in Tulare county that don't have resources that lack the tax base. So we're going to consider them non viable and not suggest that we invest in them and many of those communities. East Orosi, Allensworth, Tooleville. We're working now in consolidations, but it's been tough.

And I think to the point of that mindset of those are those people over there, that's where this came from. There's redlining. Many of these communities are farm working communities that started as farm worker housing, that eventually became permanent housing, that became communities, and that were intentionally left out of governance, intentionally left out of decision making processes, and weren't able to access a lot of the infrastructure to begin with. We also had to deal with a lot of unmitigated drought impacts.

Again, many of these same communities or families who were outside of water systems were relying on domestic wells that were shallow. This is Simona Maganya, and this is in 2015, her well went dry, and her husband had just gotten out of open heart surgery, so he was still in recovery. And they had to go drive their truck around to get water from neighbors. They did that every day so that they could bathe, shower, use their toilet, cook, things like that.

To this day, she was actually able to get a loan for a replacement well. So she has water in her home. Obviously, that's always a threat if you're on groundwater in, in areas where over pumping is continuing to occur. But that is a loan. It wasn't a grant. Nowadays, it probably would have been a grant. She was received. So she talks to us at the time about how do we, can we help her with that?

Because she's not able to sell her home with that loan on there. We have a lot of infrastructure challenges in these small communities. That first pipe there is part of a main in Seville, California, in Tulare County. Usually they're underground, not above ground, this is a huge problem and pathway for contamination that was had to get addressed. And this picture is actually from 2021 in Allensworth.

Then the bottom right there, they were having some issues with their tank, and in a time of drought, they were actually losing water like that. And this is commonplace for many of these communities across California. And then water quality is a big concern. I think everybody's mentioned it so far. A lot of this stems from nitrate contamination. That's our main source in the areas we work due to agriculture, primarily dairies, but over application of pesticides, that it's gone on unregulated for many years.

And then finally, water affordability. I think we spent a lot of time focusing on clean and safe water. But the human right to water law does mention affordable water, and I think it's where we've made the least amount of progress. Too many families are having to pay far too much money in not just rural communities, urban communities as well, and aren't able to get help they need on their water bills.

So as rates continue to rise faster than inflation, we're continuing to have more people fall behind and fall at risk of shutoff. So just wanted to flag some policy wins. This is a report we did about 10 years of the human right to water and just wanted to flag. Obviously, AB 685 to pass the human right to water was something the community Members asked for and rallied around. Kind of our first foray into the policy space. SGMA was a big one.

It's not this Committee's jurisdiction, but I think it's important to mention that tackling overpumping of groundwater is going to be critical. Consolidation Authority, as mentioned, was huge. I think when SB 88 was passed in 2015, health and safety code 116682 was about a paragraph this big. It's now one of the larger statutes in there. There's been a lot of tweaks since then, and then SAFER in SB 200 in 2019. And then I wanted to mention some local efforts. CV-SALTS program in the Central Valley.

Agwater 4.0 in the central coast. These are local nitrate regulatory programs implemented by the regional boards to help get resources for communities to address replacement water, long term solutions, and restore groundwater basins that have been impacted by nitrate pollution. So we've seen this. The numbers are varying, but these are the water systems that were failing in 2023. I also wanted to flag this. This is from Community Water Center's drinking water tool. Everywhere, in the darker oranges and then that almost brown color.

Those are areas of groundwater where it's over the MCL for nitrate contamination. And so you can see throughout the Central Valley and the central coast, there's a big problem. Then these are a list of wells that have gone dry over the past few years. There's 1400 outages in 2022 alone, and then many of these wells are not getting replaced fast enough.

There's currently a backlog of over 1000 wells, I believe, where people are relying on hauled water and tanked water because we can't get a driller out there in time. And so where we are today is that the Safe and Affordable Drinking Water Fund, because of the cost assessment, the draft 2024 cost assessment shows that there's about $10.5 billion in need to solve the drinking water crisis. And I don't want to phrase that as that we're falling behind [or] that we're not making progress.

We've made a ton of progress. It's that we're getting better data, that we're really understanding the scope of the problem, and that I hope that we can see that number not as something terrifying, but as a challenge to collectively work together to address. And I do want to flag. The State Water Board has done a fabulous job getting funding out the door and been able to turn around any of the budget allocations the Legislature has provided.

They're getting that money out as fast as they can in many instances. Not all, but many. So those are some of the solutions I'll skip because I'm taking too long. I wanted to flag this project. Johnson, McGinnis and Live Oak, we talked a lot about system to system consolidations, and there's challenges there, lawsuits, things like that, because of other communities. But I wanted to talk about domestic wells because they take a long time as well. And there's a whole separate set of challenges there.

And so this is the community. It's in the central coast, just south of Watsonville. You can see kind of a challenging terrain there. And I just want to flag that these projects take a lot of trust because you're asking individual homeowners to join a system, and for the first time, they're going to have a water bill, they're going to have new governance structures, and you need all community, or a good chunk of the community members to participate.

So that's door knocking and developing trust with everybody one on one. So the gentleman up on the top, right, that's Silverio Perez. He's a community leader. Him and his wife Ana Maria, they're farm workers. They grow flowers. And because of him, we were able to actually get this project moving because we were able to establish a level of trust with him. And if you see the bottom right there, they're leading a platica to kind of build resident support. We've also taken to DC. That's with Rep. Vargas.

We actually didn't have a meeting with him, but he pulled us into the office to just chat. So that was a fun day for all of us. But I flagged that because there's a lot of advocacy that residents have to take as well, that our organizing through SAFER has empowered people to do. They need to be able to collectively organize and fight for these projects to succeed. And this project is far from complete.

We've gotten a feasibility analysis done, but the cost of this project is looking a little higher than what the Water Board is willing to fund. And so the Water Board is actually suggesting we maybe have to rethink about how we're going to do this project. Our hope is that we don't have to walk away from this community because as I mentioned, trust is big. It takes a long time to build, and we will lose that if that happens.

So our hope is we can continue to find solutions there, but that's going to take continued collective efforts. So what's needed? Like I mentioned, domestic wells, that's a big challenge throughout the state that I think we're doing a better job of capturing small water systems, but not enough to capture what we need to take to address domestic wells. Those costs, like I mentioned, tend to be higher, and we need to think about how do we pull everyone together.

It's not just the state and the Water Board who have a responsibility there. There's counties who are permitting authorities, and there's pumpers and polluters through SGMA and some of these regulatory programs that should be paying part of that cost to make sure that these people move into safer systems. We need to continue to work with the Water Board on consolidation authority and processes.

Like I said, we'll probably end up running consolidation bills every year because there's just so much we're continuing to learn and need to tweak in that authority. More funding to close the gap. As I mentioned, we've spent a lot of the money we have. We need to just make sure we're continuing to get this money from the Federal Government, from the state government, from local parties.

And I think I would prefer to see that we continue to coordinate that through safer, so the Water Board can keep driving those processes. And then finally, low income water rate affordability. We don't have a program for water assistance like we do for other utilities. And regardless of the source, costs are getting too high. And we can't keep making people choose between safe or affordable water. We have to be able to do both. So our goal is clean, safe, and affordable water for all Californians.

And there's a lot we have to do, but we do believe there's a path and we hope that we can get there working together collectively, and just ask all you all to join us. Thank you.

Thank you. I know we'll have some questions on the issue of affordability as the last speaker wraps up, so thank you for your presentation. Please proceed.

Good morning, Chair Garcia and esteemed Members of the Committee. My name is Karina Cervantes, and I'm here on behalf of the California Association of Mutual Water Companies, also known as Cal Mutuals. Our Association was founded by a group of 14 committed mutual water companies that really got together to be of service to smaller water systems. The mission of our Association is to provide some advocacy, but most of our time is spent facilitating access to operational and educational resources for mutual water companies across the state.

Over time, our Association has grown to include nearly 400 member mutuals from throughout the state, and over half of those do fall under the 500 service connections and fewer. I definitely extend my gratitude to the Committee for convening this hearing and allowing us to discuss the significance of the SAFER program in realizing the human right to water here in California. Today.

I will share a remarkable success story under the SAFER program for one of our Members, but also share with you insights from our members' experiences, within the SAFER program and a series of recommendations developed from their diverse perspectives and challenges. In February just last month, we had the opportunity to celebrate a monumental achievement with one of our core Members, South Mesa Mutual Water Company, which provides water service to the communities of Cali Mesa in Riverside County and Yucaipa in San Bernardino counties.

South Mesa was able to secure a $10 million grant from the State Water Board's SAFER program, specifically Prop 68 funding, and helps to amplify some of the resources available under SAFER. This funding will help to facilitate the crucial replacement of water mains throughout the system. It's also going to contribute to the construction of a new well to meet present and future water needs in the community, and it will also enable the completion of a voluntary consolidation with Hillcrest Mobile Home park.

Many of those residents have been exposed to nitrate contaminants in their own well, so this will help to eradicate that nitrate contamination affecting those community Members. This project will also include a new groundwater Recharge Basin that will contribute to the resiliency of regional water supplies. And of course, I want to emphasize that the political will was definitely there on the ground. There are numerous partners that help to conceptualize this project and that will also benefit from this upgraded infrastructure in South Mesa.

The partnerships included the County of San Bernardino, the San Bernardino Valley Municipal Water District, and the San Gorgonio Water Pass Agency, all playing an invaluable role in bringing forward momentum around this project. We would also like to commend the San Gorgonio Water Pass Agency for stepping up to help small water systems in the area by providing gap funding to South Mesa and other neighboring small water systems.

Many smaller water systems do not have the financial reserves to handle the cash flow requirements that usually come with the acceptance of a grant. With this gap funding, these systems can make the necessary and much needed local infrastructure investments without heavily burdening their reserves or impacting their operating daily budget as they await grant reimbursements from the state.

And of course, as much as I want to celebrate with all of you the continuing successes under the safer program, it's also just as equally important to address the ongoing challenges in achieving the human right to water. In 2022, the State Water Board sent over 3000 letters to water systems encouraging consolidation and water partnerships.

As complex and varied as consolidations are, this blanket letter was confusing to many water systems who received it, and it was confusing because it lacked any type of specificity or criteria to determine who might be viable local regional partners. Also criteria around what makes a viable consolidation that could inform the local decision making process.

And in 2023, we also learned of emerging material impacts on water systems that had received this communication, including changes to established grant approval and funding processes which were now tied to the completion of a consolidation study. So we were very much interested in doing our own check in with our Members.

This was prior to this hearing being scheduled, but we also wanted to do our own check in and survey our own Members that had received this communication from the State Water Board and who perhaps were focused as systems that could undergo or should examine and assess the consolidation viability locally. I'll just provide a high level overview of the results of that survey, but the perspectives were just as varied and just as complex.

The majority reported that consolidation was not feasible for their system and this was based on earlier conversations that they may have had with regional water agencies, nearby water systems, but then also conducting their own consolidation studies to try to assess if that was something that was feasible for them. So some Members found that consolidation was not feasible due to the lack of a nearby system or the presence of geographical barriers such as mountains, rivers, freeways that made it difficult to connect with a potential receiving system.

For others, their own consolidation studies determined that consolidation cost would exceed the identified costs per connection or system limits in the SAFER needs assessment, and others continued to maintain that consolidation was neither necessary nor beneficial given that they are well resourced, well run, and don't have any known water quality issues.

A small group of our respondents to our survey also indicated that they were in the process of consolidating with another system, and there was just some frustrations about the length of time that that physical consolidation was taking. And then another group, also of our systems that responded to our survey, were very much interested in pursuing a consolidation with another system. They just admittedly said they don't have the technical managerial or financial resources to accomplish it yet.

So based on those findings, we did develop a series of recommendations. This is just a sample of those recommendations that I will share with you. There is a fuller list, but these were based again on the feedback from our Members regarding the State Water Board's current strategy regarding consolidations. And one of our primary recommendations was just to make sure that we're maintaining an annual progress report and updates on completed and ongoing consolidations. We do feel this would provide critical insights and also inform future consolidation efforts.

Similarly, we've heard from chair Esquivel in the progress of responding to the audit having timelines metrics so people have a realistic understanding of how long these consolidations will take. Similarly, we also ask for greater clarity around what makes a system an eligible and ideal candidate for consolidation. System size, geography, degree of risk, or a combination thereof, of course. And then, of course, there were also a longer series of recommendations regarding those systems that indicated they wanted to pursue a voluntary consolidation.

Right now, there really isn't an easy path forward. There isn't really an easy way to make themselves known. There's a lot of legwork involved in them having to sort of assess who the regional and nearby partners could potentially be that they would consolidate with. So one of the recommendations that we made around that is there's an electronic annual report that's due by systems.

One of our recommendations was to perhaps pose a question there so that systems interested in consolidation could self identify and then receive any additional support from the state Water Board staff. We also have systems that indicated they had reached out to Water Board staff to ask the conversation about technical assistance regarding that, and the response could have been faster. We did have one system that had to wait up to a year to get a response, an initial response from state Water Board staff.

Some of the other frustrations that were mentioned, and I'll just wrap up, is that there was also concerns about systems submitting an application for funding under the SAFER program. Those can take a while to work themselves through the queue. So one of the recommendations was that even though the intended use plan gets updated annually, that an application be considered and evaluated under the year under which it was submitted, rather than having to chase an ever changing goalpost.

And of course, lastly, I just want to conclude also in continuing know seek additional resources for those large water systems that are making themselves available to support smaller water systems in the region. I know Coachella Valley Water District is here and emphasizing a lot of work that they've been able to do, but also the Mojave Water agency.

The water replenishment District of Southern California and Orange County Water District are also working with small water systems and disadvantaged communities to help with technical assistance, consolidation studies, and mutual aid. And lastly, I know my comments almost exclusively focused on the SAFER program because we do also believe that it is an essential set of tools to help solve our state's water challenges.

However, I am in full agreement with my colleague here at the community water center that affordability will continue to be a challenge at the water system level and also for many households throughout California. Public water systems are being called upon to comply with many and ever increasing series of new legislative and regulatory requirements. Chromium six was one that was mentioned, water conservation, also drought planning, drought resiliency, PFAs, lead and copper, and many more. And we know that collectively these are daunting for systems of any size.

But I do want to emphasize that they can seem insurmountable for smaller systems, and we'll continue to have those affordability challenges without the necessary resources made available by the state to help offset many of those costs. The only recourse for many systems are to pass that on to their ratepayers, their shareholders, and it's a process that's unsustainable.

So thank you again for the opportunity to share the insights and experience of our select and important group of small water systems and to share all of our recommendations with all of you. And we look forward to continuing the conversation and being partners in this fight to realize safe drinking water for all in California.

Thank you very much. We'll want to our next presenter.

And I previously served as Director of the Water Division at the California Public Utilities Commission for 12 years. I share my background with the committee today because I have spent my entire career working with water utilities of all sizes, and I strongly believe that water service is our most important utility. So today I'll be sharing with the Committee not just my views, but those of the regulated utilities represented by the California Water Association, and I'll talk about the challenges and opportunities that we see collectively.

The California Water Association is a statewide business trade group representing water utilities, which are regulated by the California Public Utilities Commission. These utilities serve drinking water to customers to approximately 15% of the state. So I want to turn my attention to the SAFER program. We're now five years into the program, or about halfway, as we've heard. Today I'll be sharing with the Committee my perspective on the SAFER program, what's worked, what could work better, and I'll offer some suggestions on how we can improve the program.

And at the end, if I have a few minutes, I'm going to talk a little bit about water affordability, specifically low income customer assistance and ties to the human right to water. So let's talk about what's worked. Administration of the SAFER program under the State Water Board has worked well, particularly given the challenging circumstances in which it was launched. While there has been concern expressed in the audit report about urgency, it's never easy to launch a new program, particularly one that is as broad as SAFER.

And with the pandemic that ensued shortly after, just a year later, the challenges were especially great. I can tell you that as an advisory group member, I've been advocating through my role to get funding out faster through the program and to make sure that we're getting value out of dollar spent. And in the past two years, I have personally seen improvements as a SAFER member, and more importantly, our California Water Association members have seen these improvements as well.

Firstly, I want to acknowledge the California Water Association Member companies have a long history of working with the Water Board staff. Oversight of water quality resides with the Water Board's division of drinking water and when this department was moved over from the Department of Public Health back in 2014, the Water Board kept in place the organizational structure, the staff, the management, providing for a near seamless transition.

This was very helpful as our existing relationships with the Water Board remained intact, and I think this existing collaborative work environment helped us forge new relationships with SAFER and the division of Financial Assistance staff at the Water Board. Our membership has experienced firsthand individual project managers from these departments going above and beyond to help our members get funding applications out, as well as funding applications from water systems wishing to consolidate out the door.

And the Water Board is receptive to change proposals to amending its procedures to overcome any bottlenecks that may come up. The Water Board launched an expedited grant assistance program, I believe, about a year and a half ago, and it had the foresight to include our membership. Our customers are also taxpayers and equally worthy of grant dollars, and we appreciate the Water Board including us. At one time, grants were restricted to public agencies only. I've been in this business a long time. That's no longer the case.

However, our membership always remains ever vigilant about this issue. I also want to say a few words about income taxes, if possible. CWA member companies - there was a period of times when the grants we received were subject to federal income taxes, which not only reduced net funding, but reduced the attractiveness of those grants. Fortunately, the tax law was changed in the end of 2021, and grants are no longer subject to federal tax.

One major improvement in the SAFER program was the expansion of technical service providers to include engineering firms with expertise in water systems. Previously, these technical assistance providers were mostly community based organizations with more expertise in community outreach than water system engineering. We have examples where the change to professional engineering firms has made remarkable reductions in the time required for such assistance, a many fold improvement in some cases. As a SAFER member, I've insisted that waterboard staff Institute performance metrics for technical assistance providers.

All right, with that, I'm going to turn to what could work better. Technical assistance and grant timelines continue to remain a challenge and can result in a multiyear process before work can even begin on a permanent solution. Many smaller water systems are not technically sophisticated, and pursuing assistance from a state agency is often a daunting task. And when there's no timeline or expiration date for the technical assistance provider to achieve tasks and utilize funding, progress slows down.

That's one of the reasons why it takes so long to solve water system issues. A sense of urgency can be created by imposing timelines for performance and expiration dates for funding. The startup process, for getting technical assistance and grant funding. It's just hard. Getting an application filled out filed is a challenge even for sophisticated water systems. And let's not forget that not every water system is a willing recipient of help.

That's one reason the State Water Board, I believe, has avoided using consolidation authority that it's been had since, believe, 2015. If assistance can be focused on those water systems who are willing recipients of aid, the process, I believe, can move along much smoother. Maybe a better approach is that willing partners should rise to the top of the list. With the SAFER program. There exists a prioritization schedule based upon risk criteria, but, you know, willingness to move forward. It's not on the list.

CWA - the Water Association has a list of 13 systems which are ready to sell. They might or may not meet the SAFER criteria as the most risky, but they are ready to be sold and consolidated. Many of these systems that are ready have aging owners, and without a succession plan, they could pass away at any time, immediately moving the system and its customers into a very risky situation and potentially into the failing risk category.

The incentives for technical assistance providers do not necessarily meet the priorities of the SAFER program. For example, nonprofit technical assistance providers typically excel in outreach and community engagement, but not necessarily in solving technical engineering problems experienced by water systems. If technical assistance funding expires before a solution is reached, the process can and does start again with nothing accomplished.

Up to half of SAFER funding in past years has gone to technical assistance providers, and the expectation should be that solutions will be found or funding will not continue. Our membership - California Water Association members, we're regulated by the California Public Utilities Commission, our economic regulator. While there's good coordination between the Water Board and the CPUC, these agencies have different focuses. Water system consolidation is one area that they have in common.

The CPUC must approve water system consolidations, and they take a critical look on the impact of consolidations on customers of the acquired and of the acquiring entity. The CPUC recently became so concerned on whether its existing rules and procedures for consolidations were working that it opened a rulemaking two years ago to revisit its regulations. This rulemaking is still in progress, but if the rulemaking results in more restrictive consolidation rules, this will adversely impact water system consolidations. So with that, let me turn lastly to solutions.

So I'd like to offer the committee some solutions based on the issues that I've just outlined for you today. The State Water Board or Legislature may want to put in some criteria to prioritize systems for consolidations, including those systems that want to be consolidated. You've heard me talk about that timelines need to be more robust. The Water Board, I believe, should establish timelines with benchmarks for every consolidation project involving state funded technical assistance.

The Water Board should track and publicly share metrics for each stage of the grant process to better understand where those bottlenecks are occurring. And lastly, I want to talk about a memorandum of understanding that the state board has with the CPUC. In that memorandum of understanding, there's no mention really of consolidation or grant funding coordination. So our recommendation is that the memorandum of understanding should be updated to include coordination between CPUC and waterboard on consolidations as well as on grant funding.

And I might just have a minute left, and if I do, with the committee's permission, I'd just like to say something about affordability. So one of the components of the human right to water law is that everybody should have access to water that's affordable. And despite multiple attempts, the State Legislature has been unable to pass a statewide low income assistance program. Other states have been able to pass laws to support customer assistance, including Illinois, Pennsylvania.

Fortunately for California Water Association members, the California Public Utilities Commission has allowed regulated utilities to offer low income customer assistance programs. We've had those programs in place for many years now, and they provide a significant discount on the monthly bill. Many of the regulated utilities also offer emergency assistance programs which provide help as needed, but it's not ongoing. I think to serve customers best under the human right to water, Californians deserve a permanent, ongoing, monthly low income rate assistance program. And I want to encourage the Legislature to continue these conversations to develop a program that works for all water utility customers. Thank you very much.

Thank you so much. Our Chair stepped out for just a moment. We do have some questions. First, I want to thank you all. It's great to hear from all of you. You truly are the leaders and future leaders and current leaders that California needs. For Mr. Estrada. Are we on the right path? How can we help to improve and what solutions are there? That's a whole lot, but.

Yeah, I think we're on the right path. I think at least in our region, you were able to see that our metrics are working. I mentioned that just in the projects that we have right now, we're probably hitting about 50% of the systems that we've identified. There are also resource challenges, not just maybe with the Water Board, but also with all the other agencies that are involved in implementing these projects.

Wonderful.

So, to add to that, I would say that my colleagues, I think, made some good points about how to speed that. It's been my opinion that the more you can incentivize local water agencies that understand their systems, that understand what it takes for these consolidations to move quicker, if you find a way to incentivize their participation, I think projects will move faster.

And I know that the Water Board has kind of come up with some ideas that include incentivizing some of other projects within the system, like increasing capacity, drilling new wells, updating reservoirs as a way to incentivize them to take on a bigger area. So I think that's working, and I don't have too many issues to share. Thank you.

Very good. Thank you so much, Mr. Jones. And I'm glad you talked about affordability, such an important part of all of this. Mr. Kahlon, also, thank you for mentioning that. How can we help to improve community engagement? Trust is something you mentioned, and I hadn't thought about that specifically, but that is absolutely true. You're now asking them to accept that somebody's coming in, the government's coming in to change how they get their bill, that they get their bill. How do you help improve community engagement? And what solutions or ideas can you share to improve our ability to provide clean water? What are your suggestions on that? That was part of your presentation. But very specifically, improving our community engagement.

Well, I think it's about making sure we're sticking to tried and true models. The way that we work is that we work to build relationships with residents and to bring them into our movement and provide them with resources connected by the State Board, and that is made possible by SAFER. We also have engineers on staff that lets us kind of help walk residents through this whole process and become trusted parts of their community in some instances.

So I think continuing to make sure that SAFER funding among all else, there's many things that are being asked of it, but that funding technical assistance providers through community-based organizations who can look like communities and speak the languages and build that trust is going to be critical. I think we've seen in this budget year, there's been suggestions that SAFER can be used to backfill infrastructure and things like that.

No, we cannot lose access to this technical assistance because we have to keep building this pipeline of projects going so that they're ready for when infrastructure dollars are available. So really it's just about how can we expand that? I think some of the problem is just capacity. We work in a few areas. We work with Leadership,Council for Justice Accountability. They're in other parts of the state, but there aren't always CBOs everywhere.

I think we saw a lot of well outages that occurred in the northern part of the state, and there's not a lot of groups up there. So continuing to work to find willing partners who can build that trust is going to be critical because there's a lot of barriers in place. Redlining and systemic racism come up in these projects. And you can't just always hope that that is something that willing communities are going to have to go for.

And being able to focus waterboard resources on these difficult projects is going to be critical.

Thank you. Thank you so much. And Ms. Cervantes, it's good to have that different perspective also, and I appreciate your comments regarding that. The question is, how can we help? Are there solutions? In addition to what you've shared, are there solutions you think that we as a legislature should take into consideration?

One of the things that I didn't mention was that for our mutual water companies, they do have 501 C12, which is a tax exemption status that is recognized at the federal level, but the state does not conform to that. So I know that for some of our mutual water company members that wish to apply for state funding, that is something that automatically makes them hesitate because they are not for-profits.

And in this instance, any state grants received, they would potentially have to pay a tax on that. So that is something that we've been working in other legislative sessions, is to try to get state law to conform with what's happening at the federal level with their tax exemption status. So that's something. So I'm pointing this out as ways to be able to increase and maximize opportunities for all types of water systems in the State of California to be able to address drinking water challenges.

I think one of the other things that I'll just highlight again was how important it was to have a larger water agency being able to float some of the money for the smaller water systems because they don't have those level of reserves that can pay for some of the upfront cost of even studying whether consolidation is something that's feasible and when it's determined to be paying for those initial upfront construction costs.

So really having those kinds of willing collaborative partnerships is really important, and there are ways to incentivize those kinds of collaborations. I know that there are larger systems that also hesitate to take on smaller systems because their records of maintenance aren't up to where they would expect water systems to be.

And so again, making those kinds of earlier investments in water systems that could potentially be at risk because of the size of the system, or again, leadership that is aging out of their willingness to continue to operate that system. I think offering those types of early investments when a larger system has indicated they would be willing to take on that responsibility and potential liability if the needed improvements are made in the smaller systems.

It's wonderful. It's clear that we have in this room lots of organizations and leaders and representatives that want to work on the consolidation and just finding the proper path to get there. Mr. Callon, I appreciated you gave lots of recommendations. One of those was to prioritize, and I think that's really important. The funding, especially now, is limited. And if we know which ones can be most successful, that they need just that money, as you've mentioned, for the incentives or whatever it is.

If we have limited funding, we prioritize those that can be most successful of our systems. I appreciate those comments. Tell us, where has a state missed the mark and how can we be better? And again, about the legislatures, talk about how the legislature can help to improve access to clean water for all Californians, something that we keep talking about.

So, you know, let me, let me answer your question, but let me give you a little bit of a background. I've told the committee my work in water utilities for essentially my entire career, small water is not sustainable. Small water systems are always facing capital needs and more increasingly stringent water quality requirements. So when I was at the Public Utilities Commission, my job, one was trying to consolidate small water systems.

So during my 12 year tenure there, I'm most proud that 37 of my 145 systems were consolidated on my watch. And now the Public Utilities Commission only regulates something like 90 water systems through the state. Some of those are large and the smaller ones have mostly been consolidated. So this is very important for us to do in terms of consolidations. I mentioned in my, I'm going to.

Stop you for a moment. With that success. How do we duplicate that? Yes, that was going to be your next comment. I'm sorry I stopped you.

Thank you so much. So the way to duplicate that success is working with small water systems is very hard and for a whole host of reasons. But we have an opportunity to consolidate the systems that are, let's say, the easy-to-pick fruit. That's the ones we should be targeting, because we can reduce the absolute number greatly. And there is a needs assessment, there is a risk criteria that the Water Board has. But in my talk, I mentioned willing sellers.

If you can just get those willing sellers and get them out of the water business, that's a win for everybody.

Sorry, get who out of the?

If you can just get those smaller water systems out of the water business, that's a win for everybody. Before SAFER, I'll add that there just wasn't a funding source to address these smaller water systems. And one of my jobs as a regulator was to ask my larger water systems to help me out here and take over some of these water systems. But without the funding sources, without the regulator agreeing to subsidize those costs among the other customers, it just wasn't going to happen.

And lastly, if I could just add one more point about affordability. My company, California Water Service, we serve water all throughout the state. Our average bills range from $30 to $113 a month. That's a fraction of what folks pay for gas and electric service throughout the state. Thank you.

Thank you. Thank you all, Mr. Chair.

Any other questions, comments?

You selected some great panelists on both panels.

Any closing comments from the panelists? We'll start from the top.

Sure. Just again, thank you for the invitation. These goals are our goals in our region. And I think to answer the Assemblywoman's question a bit better, it is a tough question. It is a tough just task to achieve. And I've had several conversations with some of the Water Board Members, including Ms. Firestone, and she asked me a similar question. She said, how can we replicate what you guys are doing out there in the Coachella Valley so that we can see that across the entire state?

And it's very hard to answer. And all I can say is that it requires a lot of collaboration. It requires everybody to be at the table and for everyone to bring their own strengths. I think some of our colleagues mentioned that you might have technical assistance providers that are more kind of community-based organizations that don't really have the technical background to manage extremely complex projects that are very technical.

So that requires you to have technical folks, that requires you to have the water agencies, that requires you to have willing participants, that requires you to have the political will. And so being able to get to that point is extremely hard. And I think that's the task that we have before us. And the more that we can work on it, I think the better future we're going to have. Thank you for the invitation.

Thank you.

Yes, thank you. I'll just say that the residents we work with for too long have been dealt with insecure water supplies or water that is making them sick, that is giving them cancer that they can't take a hot shower in, and that as a state, we have the resources as a country we have the resources to do much better, and we need to do much better. It's embarrassing that we have people living in these conditions in California.

And so just to please continue to work with us, to help us identify solutions, to help pass some solutions, to find the resources necessary to get these projects going, and to prioritize the communities who have been for too long left out, and let's make water affordable as well. So, thank you.

I think both have expressed much of what I would want to say as well. But again, just thank you for the opportunity to come and share our members' unique perspectives, but also offering their voices and bringing them to the table to think about together solutions. And we're just willing to continue to be a part of this important conversation and discussion in moving our state forward.

And then lastly, I'll just thank the committee for allowing me to share my perspective. I think the SB 200 legislation was really breakthrough legislation because this was the first time there was a direct focus on small water systems with dedicated funding to address their issues. So thank you.

Thank you. I also want to thank the committee and the team for putting this hearing together.

And you make reference to SB 200, Senator Monning, and the collaboration with him and our house to have the political will to move this discussion forward initially was being framed as we may need to push a water fee, a water tax, and some folks were willing to do that right in the interest of addressing this issue, but we didn't have to, and we were able to move with resources from our climate investments.

Given the nexus that is there, I want to just thank you all for being here. I think we take away some good feedback and some marching orders in some aspects for the next efforts on this particular program. And we want to see every corner of the state benefit from this program and be able to come back and say that more people than this hearing that we heard in this hearing have access to clean water. And so, thank you, Chair and everyone else.

I'm going to open it up for public comments at this time. Anyone wishing to address the committee, if you will, please be brief, a minute, you know, your name, association, and your comments. We greatly appreciate that.

Mr. Chairman, members Oracle Gonzalez, on behalf of the City of Coachella, one of the most important things this legislator can do in this area of policy is to ensure that as the state adopts new drinking water standards, that on the front end, they be required to identify the funding streams that will allow small disadvantaged systems to pay for those compliance costs, but also that the compliance timelines be realistic in the City of Coachella for example, like most of the Coachella Valley, we have naturally occurring chromium that has been in the drinking water since before the modern Coachella Valley existed.

Based on our analysis of the proposed MCL that will be adopted next month for chromium six, it's going to cost the city almost $36 million to build the infrastructure to comply with that new standard, resulting in an average increase in customer bills of 120%. From an affordability perspective, this is going to push our affordability index to 4.5%, almost three times higher than the one and a half percent that the state uses to determine affordability.

For a community with average income of $35,000 a year, that is just not realistic. We are certainly thankful to you, Mr. Chairman, for including a funding stream in your bond tied to affordability for chromium six. And we look forward to working with you to making that a reality. But interestingly enough, as well as last year, you helped us secure funding for a pilot study that's going to allow us to test an alternative technology to help us comply with the standard.

But one of the issues that we're going to run into is that even if we're able to get that pilot study done, we may not be able to have it done in time to meet the timelines of the state. So I'll just leave you. It's important that we be realistic on the front end and certainly look forward to working with all of you to keep California going forward.

Good morning. My name is Jennifer Cleary. I'm the California Director for Clean Water Action, and I've been working on this issue for 21 years, I think. 21, yeah. So just to say, I want you to recognize how much success we've had. I've been in front of this committee dozens of times over the last 20 years. When I started, the only way you could do planning for your infrastructure was to get a loan from the state through the SRF. Consolidations were a dirty word.

I couldn't use it at any communications with water agencies unnamed. And the first grant program we had targeted at small communities was in Proposition 50. In the first funding proposal we had, we had $3 million available, and we had $300 million in applications. So just. You've done a lot. You guys have helped us with language access, you've helped us with funding. You've helped us chip away at the availability of funding. Doing set-asides for disadvantaged communities was huge.

Getting funding in Prop 1 that included technical assistance, really allowed us to experiment and try to understand what worked, because, remember, this isn't just funding out the door. This is something new that we haven't done before. So we may have some problems with the SAFER program, but that's because we're practicing, we're trying. And you now have a willing partner. For many years, you were, like, imposing solutions on an unwilling agency. Now you have a partner.

So what I'd really like this committee to do is to take that partnership seriously, make changes as they're needed, and support the continuation of this program past its 2030 expiration date. Thank you.

Hi, good morning. Andrea Abergal. I'm the manager of water policy at the California Municipal Utilities Association. We largely represent urban and larger, medium, and large-sized systems. So why are we here? Our involvement, we really want to see this program be successful. We were large supporters of SB 200, and we engage often, as with ACWA, who's going to speak after me, and oftentimes we're critical of the implementation because we want the program to be successful. We want to see the money funded appropriately.

We want to see future funding that is appropriately and used effectively. A challenge that we've found, and I think it's important to be a little bit critical of the implementation. Just like Jennifer Clary said, it's good to see that it's working and to make adjustments moving forward. But something we've noticed is that the goalposts tend to move. The criteria that are used in the needs assessment changes, which increases the number of systems that do end up on that failing or the at-risk categories.

And we know that the overall goal is to get systems off of those lists. So we need to think of how to address which system should be on the list and address the needs that they have and get them off before expanding the needs assessment to the medium or larger size systems.

In the past, we have asked the board to narrow the focus of the needs assessment, and we continue to work with staff there and want to see those goalposts in place and see the program working effectively. And the challenge with the moving goalposts is just how to measure the progress over time. And I think the public would benefit if there was a more transparent process to demonstrate all this progress that is made.

Lastly, I just want to note that what's important moving forward is to maximize the funding that's available. And we really want to see that funding going to the small and very small systems that need it. Thank you.

Good morning. Chair and members, Soren Nelson with the Association of California Water Agencies. We represent 470 public water providers across the state that provide about 90% of the water used in the state. I wanted to start by acknowledging the good work of Teres Cavell and his staff on this program. If you've been paying attention to the board recently, they have a huge workload in front of them and have not lost sight of the very high importance of this program being successful.

So wanted to acknowledge that, and I should also mention I'm a member of the SAFER advisory group, and so I'd bring that perspective as well. I think one of the challenges faced with the state's work on the human rights water and the SAFER program is it has a really hard time telling its own story sometimes.

I think, as the last speaker mentioned, the criteria that we use over time changes every year in the needs assessment and new criteria are added or tweaked and new data is good, but it does make it really hard to track the progress we've made, and the same extends to the cost assessment we do every year. So the price tag of achieving the human right to water recently jumped $6 billion, up from four and a half to over 10.

And part of the reason for that is we added a category that would fund over 30,000 new wells being drilled for systems and domestic well users that have a high risk of running out of water but aren't necessarily already out of water or have water that's out of compliance. And so there's a lot of nuance to the data.

And so I think a focus for the legislature and the board, we're at the halfway point here and approaching the end of the program is having good data to make decisions. So thank you very much.

Good morning. My name is Michael Claiborne. I'm a directing attorney at Leadership Council for Justice and Accountability and also a former advisory group member for the SAFER program. We work alongside communities in the San Joaquin Valley and the East Coachella Valley. The communities we work alongside often have some of the worst water quality and water supply issues in the state. Disadvantaged communities that have little technical, managerial and financial capacity to be able to deliver safe drinking water reliably. And because of that, they need support.

So we applaud the State Water Board's efforts in implementing the SAFER program. As you've heard today, there's been a lot of success. Communities like Lanare and Mathinitracht in the San Joaquin Valley have safe drinking water today because of the SAFER program and because of the State Water Board's efforts to get funding out the door.

There's also, as you've heard today, a lot of work left to do, including communities like Tuleville Tombstone Territory, Kentua Creek, El Porvenir, Fuller Acres, and mobile home parks within the Coachella Valley dealing with arsenic problems.

So what we would urge the legislature to do is continue supporting these programs, extend the SAFER program past 2030 so that we keep making this progress, better fund regulatory programs like the Sustainable Groundwater Management Act and the Porter Cooler and Water Quality Control Act to protect water supplies in the first place and prevent pollution, and then address the urgent need to ensure that water is affordable by passing a low-income rate assistance program. Really appreciate the attention to this issue and thank you to the committee.

Good morning Chair Garcia, members of the committee, it's my pleasure to be before you today. My name is Danielle Coats. I'm with Rancho California Water District. I've been involved in conversations related to advancing safe and affordable drinking water through the legislative process since 2011, passing legislation to address liability concerns as well as legislation sought to advance legislation on consolidations. I appreciate the comments on there being space for all solutions and all parties at the table.

I do believe strongly that there is an opportunity for viable public water systems to be part of the solution and part of advancing opportunities to address additional considerations and solutions through the process. Some of the thoughts in terms of today's conversation that I would like to elevate for consideration is to continue to look at system affordability as a means to address household affordability. They are different and they are distinct in their solution types.

But as we're able to make systems more viable and less volatile, we're able to stabilize rates and pass those rate savings on to customers. So I think SAFER has done a really good job in exploring that. But I think there's a little more room and I really appreciate, and I would be remiss and I should have said earlier, the work that the state board has done on the safer program, it is a huge lift and I've been paying attention to it for quite some time.

So in addition to looking at system affordability, seek opportunities to advance regional solutions. These could be through the consolidation, system-to-system consolidations. It could be managerial consolidations. There's various types of consolidations that we could continue to explore through this conversation. In addition to that regional solution, we should also look at opportunities for regional infrastructure that can be utilized by multiple systems and provide economies of scale and that means. And then greater scrutiny of systems where bottled water is the ongoing solution.

Could there be pilot projects, innovations, technology that we could utilize in these spaces? Finally, I would conclude my remarks with saying that Rancho Water has been exploring the issue of the bridge loans and financing of water systems in general. And that's something we hope to elevate through the legislative process in coming months. Thank you.

Good morning, Chair members. Bryan O'Jackie with the Regional Water Authority. RWA is comprised of 22 drinking water suppliers that serve 2.2 million people in the greater Sacramento area. Our mission is essentially what this hearing is about is the achievement of the human right to water.

Right, so what does that take? It takes reliable water supply, which we actually didn't talk a lot about today, but the biggest impact on that is climate change. It's in the analysis and highlighted in the very first paragraph, but we didn't talk a lot about it today. But I do need to make that point. Quality, which we spent a lot of time talking about today, and affordability, which we touched on, didn't dive into.

I want to really acknowledge the comments that you made Chair there at the end about how do we pay for this? Because I think that that's the central issue. Right. And I do want to also acknowledge all the comments here. The SAFER program has provided us with a path forward. Has it gotten everything right on its first step?

No. But is that a reasonable expectation? No. Is it getting better? Yes, I think we talked about that here today. We want to keep building on that. But the fundamental underpin there on all of this is how do we pay for these things and what is that source of funding.

And I do want to say that where we landed on SB 200 funding was critical because it avoided placing additional burden on the 95% of water providers that have been successful in the state in achieving the human right to water and all of those elements. And that as we move forward, we need to keep that in mind, and I'll close my comments there and appreciate the time. Thank you.

Thank you very much. And thank everyone who has shared their perspectives during public comments. Very insightful hearing. We covered a lot of ground. We will continue to dialogue with our stakeholders. We will continue to explore ways to improve the program that is the SAFER program. And we also want to continue to engage a broader stakeholder audience. Our Native American nations are a central component to collaboration in some parts of the State of California, where access to the infrastructure and safe, clean drinking water are fundamental.

I know that for our region and other parts that were mentioned, for example, Tule areas that we know also have some challenges, and probably the list is far longer than that. So once again, just want to thank the staff and the panelists that were with us, and for that, we'll now adjourn. Thank you.