Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation

Good morning everyone. I'd like to welcome you to Assembly budget sub 4. Today we will hear the Administration spending plan for water and coastal resilience chapters and chapters of Prop 4. We'll also hear from the Department of Water Resources and State Water Resource Control Board. We have seven items that are planned for presentation.

For each presentation item, I'll ask each of the witnesses in the agenda to introduce themselves before they begin their testimony. At the end of the presentation items, Members of the Subcommitee may ask questions, make comments or request a presentation on any of the six non presentation items.

We will not be taking a vote on any of the items on the agenda. After all the items are heard, we'll take public comment. For Members of the public who wish to provide public comment, please limit your testimony to the items on the agenda.

If you have comments on specific budget augmentations not related to the departments before us, please refer to the daily file for which Subcommitee hearing the Pertinent Department will be before the Committee. Each Member of the public will have one minute to speak and we are ready to begin.

And we'll begin with my overall comments that I'll make right after we go ahead and bring up everybody for item one, the various Prop Fours. All right, so if the panelists for Prop 4 would come, you're breaking protocol on us here, right? All right, great. Nobody over on the side there, right.

So before we begin this particular item, I just wanted to make some overall comments about water and the budget issues that we have here today. First of all, we have to recognize that this budget was created by the Governor and his various agencies.

Before we had the L A crisis, before we've had sort of the recent changes in the economy that are out there. I think everybody realizes there are many new risk out there, including a prediction that the GDP for the first quarter made by the Atlanta Fed is probably going to be dropping by 2%. Rather than growing.

All of those things add tremendous amount of additional risk. And so we're talking about a budget created before problems and trying to anticipate where things are going to be. But certainly things will will probably be tighter than where we are in the budget at this point in time.

Second thing is clean water in the world is going to become more and more precious and you're seeing people will literally fight over it here in California as we have over pumped our groundwater, etc. We have more contamination of water, more ability to identify contaminants of water.

The cost of water will inevitably rise in California because we simply have to do more to Try to obtain the water that we need out there with data centers, et cetera. Demands for water keeps increasing. We hope that new technology will help us find ways to bring costs down.

And that will be one of the themes that we will be consistently trying to look for, both with the expenditure of our Prop 4 funds, but also the expenditure of our greenhouse gas funds. And that is we need to find ways in California to leverage the high technology skills that we have here to bring the cost down.

And there's two essential items where I think you're going to see that happening and two festering problems that we've had here in California. One is water will become more expensive and more precious. The other is grid reliability.

And those two issues, I think are ripe for significant technological investments and breakthroughs, but they will take careful management on all of our parts because the public is rightfully very sensitive. Both of these are essential. Must have items in your life. You can't live in modern America today without clean water.

And you can't live here without access to affordable electricity. And with the demand for electricity going up and up and up, we have the same challenges in electricity that we have in water. So with that very cheery, optimistic overview, we're ready to go ahead and dive into presentations for item one.

And whoever wants to go first, please introduce yourself. Stay, stay. Nice close. By the way, up here, we can't move these things, but you guys can bring those things right up to your mouth. And so we appreciate it if you do. Right. Thank you. Thank you. Is he on? Now try the yellow. Has to be. Yeah. Now try it again.

Good morning, chair, members. I'm Andrew Hull with the Department of Finance. I'm also joined with Members of DWR and the Water Board. We're here to discuss the water chapter and the Proposition for bond. Many of these appropriations are allocated to DWR and the Water Board, but we also have staff and Members from other departments. If there are specific questions in that area. With that, I will turn it over to my colleague at the Water Board to talk about his area.

Good morning, chair, Members of the Committee. Glad to be here. My name is Joaquin Esquivel and I have the honor of serving as the chair of the State Water Resources Control Board. As you just said, Chair, these investments are really critical in order to maintain level of access to water and affordability. So excuse me.

The main pots that the Water Boards will be drawing down this budget year would be 183 million rather which will are for drinking water and wastewater. As you well know, we've had. We have our Safe and Affordable Fund. We have the state revolving Fund. We have other sources of funding. But our Proposition and bond dollars here are some of our most flexible.

You know, they don't come with a lot of the federal requirements and really allow us to try to as best we can, deliver funding soon, but also importantly, solutions soon to communities that are still without access to clean and safe drinking water and importantly sanitation as well.

Over these last years, we've been fortunate to have received dollars through the budget process here for septic to sewer conversions. We've seen in which we haven't necessarily had direct funding for before and have really unearthed what is a critical need on the sanitation side so that 183 million will go to continue to augment the work of the board to ensure that work continues to continue.

Additionally, there's dollars that we'll be drawing down for recycled water, also tribal water projects and importantly a pot that will be used for the order water quality challenges both in the Tijuana River Valley, other communities.

Thank you very much. Next.

Good morning. My name is Kasey Schimke. I'm the Deputy Director for Legislative affairs with the Department of Water Resources. We too have a pretty significant piece of the Prop 4 funding. Some of those build off of, you know, many of those build off of.

Past efforts of the Legislature looking through the table in your agenda starts off with the water data and stream gauges. That's something that was really initiated and pushed forward by the Legislature with SB 19 and this continues that effort to reactivate existing stream gauges, to install new ones and to retrofit older ones.

Something that's very important for us to understand what is happening in our river system, river and stream systems. There are places in the state where we have good data. There are places in the state where we don't have good data. And as we see changes happening with precipitation levels in temperatures, that all affects how that water flows.

So I think that's that's an important piece of the puzzle. Proposition 4 also provides a significant amount of money for groundwater groundwater Sustainable Groundwater Management act implementation, but also associated but maybe not fully integrated into the SGMA program, groundwater recharge activities and the likes of that.

You'll see that there's only about 10 million of that proposed in the budget year. Part of that is the fact, and I can provide a little deeper dive if you want. About over half billion has been spent in the last 10 years for implementation of SGMA, getting groundwater agencies stood up and projects.

I believe it's over 350 million in the last three years. So part of the, part of this step back a little bit is to find out what is the need, work with those agencies to develop the program. Something I think perhaps Department of Finance can talk about is the guideline process that we've discussed previously.

We need to develop the new program based on their specific requirements of Prop 4. And so we're going to be doing that. So the request looks small in the budget year, but it's really building off of a healthy investment and then looking to the future where there's also additional investments in that again building off of past efforts.

There's funding for the dam safety efforts, $480 million to continue that effort to assist dam owners to do repairs and rehabilitation and the likes of that. So that's something we're going to be anxious to be spending and working on those projects as well. There's also funding for elements of water management that have not been funded recently.

Integrated Regional Water Management the Integrated Regional Water management grant program and planning process is really regions of the state organizing themselves water managers and determining what are our regional needs, what are the projects that would benefit us and in what form. It's really a ground up process.

There has not been significant funding for that effort in the last several years. This reinvests another segment of funding for that. I would not be fully discussing this if I didn't also talk. There's funding in here for flood protection, something that we very much care about and need to look forward to.

And the Department administers many different flood related programs. We have responsibilities in the Central Valley where the state has a liability and responsibility to do the management. We have small communities throughout the Central Valley. We have partnerships with local agencies statewide on the statewide flood control subvention efforts.

And we also have historically through bonds and through General funds supported delta levies and maintenance and subventions and special projects work done on those. So Prop 4 provides, provides significant funding for all of those different elements.

Again, I'm happy to talk specifics as we move through this, but that kind of gives you a highlight that there's quite a bit here and there's quite a bit of multi year use of of those funds that we have proposed.

Great, thank you.

Good morning Mr. Chair, Mr. Lackey, Sonja Petek with the Legislative Analyst Office. And I know that my colleague Ms. Ehlers has been before you in two different hearings going over some of our overarching points regarding the administration's proposed multi year spending plan for Proposition 4.

So I'm not going to go over those main points again, except to note how they may apply to some of the programs within the Water Chapter. I wanted to start by just noting that in terms of the overall bond, the $10 billion bond, the water Chapter makes up the biggest dollar amount.

It's 3.8 billion of the 10 billion over 32 different programs administered by nine different departments. One key point that I know has been important to Members in your Subcommitee is that within the administration's plan it would shift some prior General Fund appropriations to Proposition 4.

And within the water chapter, this includes 51 million for water recycling, 47 million for dam safety and 15 million for system wide flood risk reduction. Now overall, just a few points about the administration's proposed approach to spending in the Proposition for Water Chapter. A lot of these programs, a lot of the 32 programs, these are established programs.

A lot of them have well defined sort of processes and ways to assess, need or identify projects that that should be funded. And two really good examples of this include the drinking water programs that were mentioned by Chair Esquivel a moment ago. The Water Board conducts an annual drinking water needs assessment.

This really helps to identify where there are still gaps in the system. But also at Department of Water Resources there are a number of ways for the Department to understand where flood risk is highest and which projects are sort of a high priority.

So for example, every five years the Central Valley Flood Protection Plan is updated and that sort of assesses projects within the state plan of flood control, which is the area for which the state has liability. They identify risk and needs in that plan. The Department can also rely on local in terms of delta levies, the Department can rely on assessments by local reclamation districts about need.

And the Delta Stewardship Council also now produces a Delta levies investment strategy which the Department is supposed to follow in terms of how it prioritizes funding to provide funding to sort of the highest risk levy projects. I also wanted to note that specifically for flood there's a couple areas where the funding is actually.

The spending is actually sort of predetermined and that is in the flood control subventions program where the state Legislature actually identifies projects in statute to be funded and the Department administers that funding. Additionally, the Department provides the state match for federally led projects by the Army U.S. army Corps of Engineers.

So those the funding that's being proposed for Proposition 4 in 25-26, some of that would support the state match for those projects. And it's also one of the Prop 4 sort of provisions was that the state should be trying to leverage federal funding when possible. So that's a good example of that.

Now, I bring all of this up just to point out that the fact that these programs are well established and have these ways to assess, need and determine funding priorities should give the Legislature some assurance that the funding will be spent strategically and on vetted projects.

And this isn't to say that the Legislature wouldn't want sort of updates on how that funding is being spent. So you could request, for example, sort of annual updates on which flood control projects are being funded with Proposition for funding.

Now, on the other hand, there are a few new programs within the water chapter and there are some programs, such as the Integrated Regional Water management program that Mr. Shimke just noted that maybe the guidelines haven't been updated in a while, or it's a program that hasn't received funding for many years.

And so the Department needs to go back out and meet with interested parties and develop, revise and develop guidelines on those projects.

As we've said in other previous hearings, this is an area where the Legislature might want to consider requiring the Administration to come back in future years with more detailed budget requests after they sort of know more about how they intend to spend the Proposition for funding that might help the Legislature understand whether or not it's comfortable with the administration's approach.

A few more examples in addition to the one just mentioned at the Water Board, the Urban Stormwater Management program needs to sort of get up and started again. This is an existing program, but it hasn't had funding for a bit. Regional conveyance and repairs at Department of Water Resources.

There's also a new program that will be administered by the Natural Resources Agency to increase climate related education and research. So that might be one that the Legislature would benefit from. Additional details in future years. The last point that I wanted to make is related to the Salton Sea.

So Proposition for the Proposition for Water chapter includes buckets of funding for Salton Sea. One is for projects 160 million for projects at the Salton Sea and then 10 million to create a Salton Sea Conservancy.

And this was a Bill that was passed last year by the Legislature to create a conservancy contingent on voter approval of Proposition 4. So since Proposition 4 passed, the Administration will be coming forward, it's our understanding, this spring with a proposal for how to implement that legislation and create the conservancy.

The Salton Sea is an important statewide responsibility. The state has taken responsibility for improve, you know, making improvements at the sea as that Sea recedes. It poses serious public health risks to the to the local communities. It's also an important stopover for migratory birds on the Pacific Flyaway.

So it's important that that the state continue to make improvements at the Salton Sea. And to that end, the Administration has proposed to spend most of the project funding in 20 or to appropriate most of the project funding in 25-26. 148 million of the 160 million. And we think this makes sense.

The projects have already been sort of identified. They're in some phase of either design, planning or construction. Construction. They're part of the phase 110 year plan that the depart that the state has to complete by the end of 2028 per an order by the State Water Board.

So I raise all of this just to say that this is an important area of spending. We need to keep monitoring it. Our office will be taking a close look at the proposed plan for implement for creating the Salton Sea Conservancy. And we'll of course raise any issues we identify for your benefit. Great. Thank you.

Thank you very much. Anybody else on the panel, anything you'd like to mention? Mr. Lackey, I'll start with you since I didn't give you an opportunity to do any overall comments.

I have some specific questions for this panel. I appreciate you being here and there's a lot of concern about the management of water. Since I've been here, it's always a concern regarding water. Volume and quality are very big focus points and it's never going away. Those are responsibilities that we should take very seriously.

And especially since we got the trust of the public with this bond money. They're expecting us to make good decisions, so I hope we will. Subsidence is a very serious problem statewide, but especially to farmers in the Central Valley. And I was wondering, maybe either Mr. Schimke or Ms. Arthur could answer.

What is the state doing to allow more surface water to flow to farmers in the Central Valley during these wet months so that we can recharge the ground? I mean, we're seeing rain coming down today, I think even.

Well, thank you. It's a very good question. Obviously, subsidence is something that is affecting both our own state water project conveyance systems, our aqueduct system through the Central Valley, as well as several of the other water managers in the valley.

The state has been very involved, led by our groundwater team, but also matrixed across various departments working specifically on groundwater recharge incentivizing that we saw in 2023 when we were very Much faced with significant, significant amounts of water, we were able to do quite a bit of movement of water out of our system and into groundwater use.

That is also continuing at this point. But it's a good point. We are moving water through the system. We are moving water into San Luis Reservoir, but also to our other water users. Some of that is being used for groundwater recharge. Not all of that. Some of that is being moved into local, into local systems.

But primarily currently we're moving into San Luis Reservoir, filling up that joint facility. So that is a, both a federal and a state reservoir facility, filling that up so that we have that south of the delta in storage for use.

One of the key points I would say about specific to groundwater recharge, you have to have the water to begin with. And you pointed out we are in somewhat of an average water year right now. So there is some water that is doing that and being available for that.

But I don't think we're going to see this year the same levels that we were able to see, for example, in 2023 when the entirety of the state was seeing large amounts of precipitation, 200 plus percent snowpack in some areas. That's really when you want to be able to grab that water.

Because additionally when we have average years, there are users of that water. There are those who need that water for their use, not necessarily for future, future storage. So it's a good question. I don't know that I have the full answer for you here today, but we are doing that. A lot of it is dependent upon available waters to then put into the ground.

Okay. Now as it relates to volume, during the past, it's my understanding anyways, during the past several weeks, water from the delta is being allowed to flow out to the ocean, but not much towards the thirsty Central Valley for our farming needs. And how is that decision determined?

And what is the science behind who makes the call on those water flows from the delta? It's always been a controversy since I've been here.

On the project side. Yes, I can talk further.

So I know there's not a simple answer, but if you could try to help me understand a level of understanding, that'd be helpful.

I feel great success with that statement right there. Just understanding that there's no simple answer. The state water project system and the federal Central Valley Project operate cooperatively under permits for our salinity control for water quality in the delta for species impacts, and obviously taking into account other water users and their needs.

So we coordinate Our pumps in the delta. The Federal Government and the state system coordinate our pumps and we operate under different. It's not even 50/50 split. It depends on timing of information. So to your question, yes, water has been flowing out under some of those requirements. Water will always flow out of the delta.

We aren't expecting that there, there ever should be a time when the rivers stop flowing out. There is a need for water by other water users through the central, through the central part of the delta. Antioch, Pittsburgh, you know, other areas in Contra Costa County are water users as well.

So you asked the question, what are the rules? How does that work? It varies, it varies somewhat on formulas relating to water quality, salinity, where the salinity is in the delta at given times, when the tide pushes in or when water flows are low, that salinity changes.

Some of it relates to, to potential species impact at time of the year. When certain times of the year, certain species are known to be in certain locations. That affects the volume of water that can be taken as well. So as you pointed out at the beginning, that's not a simple answer. It is quite complex.

I again don't know that I'm going to have the answer that suffices for you. The simple answer is we are operating under a number of different rules and regulations to be in compliance with. And we also then are maximizing the water that we are taking and storing and delivering when we are able to do that.

And I, I don't mean this to sound facetious, but apparently there was some beautiful water that was released. Where in the world did that happen? The President was the one who made the mention of that. So I'm just wondering, is that made up?

That water was in the southern Sierras into their system? It's my understanding that it was released because the Army Corps of Engineers had identified those reservoirs, had encroached into their flood space at certain times of the year, spirit supposed to leave water out. And that was the logic behind those releases. Those waters are released into that local system. Those don't make their way to either the state or federal systems in the delta.

Thank you. Finally, what's really perplexing to me, I mean, I came to this institution in 2014 and something really big happened. Then we passed that big water bond and water storage was the big promise. We've seen very little movement and very little water committed to this water storage circumstance. Can you help me understand why that's the case?

Because it's over 10 years and there's been very little movement in that arena. And help me understand why that is in such a challenge. Because the demand and the need for that water storage is arguably not dissipated.

Correct. You have all the good questions today. So, so that's fine. Proposition 1 in 2014 included $2.7 billion through the Water Commission for the state to invest in certain defined public benefits associated with water storage projects. And it was fairly complex and a fairly complexly written bond.

So the Water Commission went through their process to develop those regulations which took multiple years in the process, working in a public format to develop that.

And then I believe it was 2018 issued initial projects that had applied that had been part of this one very well known is Sites Reservoir up in Calusa and just to name that one. But those projects all had local sponsors, all had local efforts. They were not state projects, they were all local projects.

So those locals had planning, design, funding elements that they were developing. Obviously with projects you then move on to permitting and, and the likes of that. Those are all. There are six that are moving forward. I can give you the quick update on those if you'd like. I mentioned the Sites project.

It has a, an estimate of middle of next year. They're going to receive their full final amount of money from the Prop one piece of that. They've gone through, you know, a lengthy process because for the, in their, in their instance they were also undertaking a water rights proceeding to determine do we have the water to put in that. In that location.

If I could interrupt you, it looks like the Sites project looks like it's projected to be completed in 2033, is that correct?

Correct. And that's, and that's a matter of construction at that point. There are several groundwater programs that have received funding for this also and that are moving through the process. But these are really local led efforts and I would say none of them are insignificant efforts. So there's local funding that has to be developed in partners as well.

Okay, thank you.

Other Members, Assembly Member

All, thank you so much. So my understanding is that the, in the proposed budget, the Water Board is proposing to eliminate the in stream flows program funding. Is that true?

I'm not aware of that Assembly Member, but we can double check and get back to you here. But I'm not aware of any elimination of in stream flows funding.

Correct, Yeah. Andrew Hull with the Department of Finance there. There shouldn't be any reductions related to that.

Perfect. Because I know it's funded by cannabis dollars and so just if you could double check for me. I heard that from some of our Water folks up on the north coast that they were concerned about this program's elimination, particularly given that it's not even a General Fund hit, which obviously is big in our area.

We have previously as a Legislature allocated about $770,000 for additional staff to do the permanent water regulations on the Smith, excuse me, the Shasta and the Scott. Those regulations are about three to five years out from what I understand. But I'm seeing.

Do you have an update on sort of where we're at in that process, what that might look like and how that might impact this year's budget?

Yeah, really appreciate that question. Those resources are still on the table and our staff are working currently on that by direction from the State Water Resources Control Board. What we have in place right now are emergency curtailment efforts in the watershed.

But as we said publicly and as we've worked with the locals, we've signaled as a board that we're really needing to see long term solutions put into place as well, lasting solutions with the community.

The hope is that tribes and growers and the community can come together and really see a shared vision that they can bring to the board. But either way, the board is doing the scientific basis work now to be able to establish those in stream flows. So that work is ongoing and is current.

And do you have the budget necessary to finish that work

As we have currently requested? Yes. And as we see the work.

Excellent, and I know obviously the Karuk and the Yurok are very interested in seeing those finished as well, very much so for the groundwater storage, banking recharge dollars that are proposed. And I apologize if you already said this. Is that for new projects or new technologies or new innovation, or is that to support existing projects that are underway?

The simple answer is it's going to probably be both. The funding in Prop 4 is split one very much dedicated to implementation of the Sustainable Groundwater Management act, which means projects and actions by those groundwater sustainability agencies pursuant to their plans. The other category of funding is a little broader opportunity.

That's the one that speaks more to the groundwater recharge and elements of that. That is it's going to be a grant program and it can apply to, you know, obviously we're not paying something that's already completed, but there are existing projects, there are things moving forward and there will be new projects that come also. So yes, that is what that funding is intended for, both.

So for that grant program, is that program construct already in place and you're better funding what exists? Or do you have to actually create the program to push out those dollars.

So we would create as a, you know what happens is we develop the program guidelines to implement the funding and the requirements of the bond. That is, you know that that could be a very start in the basics. What are the contracting requirements? You know we have that template.

What we also do is we work with stakeholders who are interested in receiving that funding and obviously interested in how that funding is received and used by whom. And we receive feedback in the development of what will the conditions of this grant be.

We then released that for when we were doing a guideline process, a 45 day period, receive more comments, review that and that's how the grant program would get created.

I'm going to interject real quick if I can, when you release that for a 45 day review program, does that get sent to Committee staff and does that get sent to the Legislature also?

It is released publicly, but I don't know that there is a requirement that it be released to you. It's definitely something we could make happen.

Though, if you could. I think it Assembly Member would appreciate it.

Thank you so much, Mr. Chair.

And then last question. And I appreciate all of the work especially that's happening on the instream restoration projects. We do hear from time to time people who are impacted economically, whether it's from curtailments for agriculture. Is there any funding to try to support that economic base for many of these counties like Siskiyou County?

I'll say at the State Water Resources Control Board we don't have direct programs but I know through the Department of Fish and Wildlife and others there's a lot of funding that is going into these watersheds. It's not just, you know, the demands on the regulatory side that are happening.

Actually, I will say I know we have some funding for say like telemetry and putting in meters and so really trying to help facilitate the work that the board is here requesting when it comes to data or information on the water rights side.

So there are investments that are going in when it comes to say direct losses or harm in the agricultural space. I'd have to check with CDF or Department of Food and Agriculture to see if there are support programs for growers that are in those circumstances. But I know at the State Water Resources Control Board we don't have that sort of funding.

Yeah, if you could, that'd be great. If you could get back to our office, we'd really appreciate that. Thank you.

We'll definitely work with the sister agency. Thank you. Assemblymember.

Assemblymember Connolly.

Thank you. Chair, good morning. I wanted to talk about dam safety. How many dams has the Department of Water Resources classified as extremely high of potential downstream impacts to life and property, namely those expected to cause considerable loss of human life or property. And then I have a follow up Assembly Member.

My name is Kasey Schimke. I'm the Deputy Director for Legislative affairs with Department of Water Resources. There are about 1300 and 1232. It varies depending on which ones came out of service. Statewide regulated dams by the Department we I believe have identified about 260 to 265 of those as extremely high hazard.

What that means is as you pointed out, the risk downstream should that facility experience a failure. I do like to caveat that that doesn't necessarily mean there is a greater likelihood of failure. It just means that there is homes, roads, cities downstream of those facilities.

So you kind of answered my second question, although maybe you're better at math than me. It was going to be what percentage does that represent of the overall total of dams? So it sounds like probably about one in five.

Yeah, it's about 21%. I think 21%.

Okay, thank you. Which is a fairly significant number. Given that number. What was the rationale behind backfilling $47 million for dam safety?

Good morning. Meghan Larson, Department of Finance. The Governor's Budget does propose the dam. Safety back Bill to provide budget resiliency. We understand that the Legislature may have. Different priorities and are of course open to having further discussions about that.

Great. We will. Yeah. We'll definitely take a harder look at that. So appreciate it.

This is Andrew Hull with Department of Finance. I'd also add that there wasn't, there wasn't policy choices in those reductions. When we looked at the climate packages, it really was looking at where was their funding left. That could still be shifted.

So rather get in a situation in the future where we're looking at potential reductions and no other funding source. The chance was now to ship these over to the bonds. We understand there's some sensitive programs as far as the Legislature is concerned. There's also some other programs in DWR and we look forward to carrying on with those conversations.

Great. Appreciate it. With the resources agency here and this may be more for item two later, but I'll ask. Looking for more details for the salmon hatchery money. Is anyone. Does that make sense to us that now or panel two?

Yeah, thank you, Mr. Bonham.

Yeah, so good morning. Chuck Bonham, still the Director of the California Department of Fish and Wildlife.

Thank you, Director. Yeah, so really just looking for more details on. On what? Yeah, that allocation is about, how would the money be utilized.

At the Member and chair's discretion. I was intending on covering this in the next agenda item. And you could walk through that expenditure proposal at that moment.

I think that's going to be more appropriate.

Excellent. Thank you. Great, thank you. We'll tee it up.

Assembly Member Caloza.

Thank you, Chair Bennett and thank you to the panelists. I just wanted to ask some additional follow up questions to get some information on some of the allocations. And you know, Prop 4 is obviously is an incredible investment to our water infrastructure. $3.8 billion. Can you tell me a little bit more about the tribal water infrastructure?

What does that include? How will those monies be allocated amongst the different tribes in the state? Is it competitive? Is it formula? If you can share.

Yeah, I really appreciate it. I'm really excited about this. And it's not a lot. It's 25 million. We know there's a lot of need out in our communities, especially tribal communities. This year we're asking for 11 million of that 25. And this is a new program.

So you know, we'll still need to really figure out how best we prioritize. What is a lot of need out there.

I know we've been working with US EPA and the US Government when it comes to federally recognized tribes since they have the primary trust obligation and trying to understand what the need and obligation is not just for federally recognized tribes, obviously, but for all tribes within the state. But again, 25 million is not a lot.

So we will need to really do our best to prioritize these dollars so that they, they go as far as they can. But since it is a new program, some of those discussions are, will still be ongoing here as to how best we deliver these dollars. But the 11 million will give us a running start in trying to figure out how best we prioritize.

So is it competitive or is it a formula amongst the different tribes in the states?

I think at this point we haven't determined whether we would have a competitive process or simply a formula. And I think what we want to make sure we do is just really like on our drinking water work generally our needs assessment has been really driving where we put our investments.

And so being able to do a mini understanding of what projects may be out there, are shovel ready or need some investment on the technical side will help us kind of understand if this is just going to be, you know, a program that we target to a few projects or open up for sort of a competitive process amongst the tribes.

Okay. And as I'm sitting here next to the chair of Water Parks and Wildlife, I hope that you do reach out to our chair and her team given the new program. So I'm also on that Committee but would love to learn more given that it's a new program.

And I'm sure you know there's also Assembly Member James Ramos, who I'm sure may have some feedback on this program.

Very much so.

And the other question that I have given the large amount of funding there is specifically for our water infrastructure, can you talk to us a little bit more about what oversight mechanisms that you have in place to ensure that, you know, this voter approved Proposition and those dollars are going to where they're intended to.

What can the public, where can the public expect to see where their monies are going and how it's being distributed equitably in the state?

I really appreciate that question. We have some long standing federal programs known as the state revolving funds. And so we have a yearly process that we go through called the intended use plan. Where the board has a very public process of both scoring projects.

So how best to prioritize what are limited dollars, but importantly have a fundable list, as we call it, which, which lists out which projects we're looking to Fund for the next year.

In addition, with the Safe and Affordable Fund and the yearly Fund expenditure plan that we also carry out, there, again, another very public process, we'll be leveraging all of those existing processes that are prioritizing drinking water projects and disadvantaged communities and needed communities and also other larger systems as well to get these dollars out effectively and through a lot of public process.

Again, this is, you know, the intended use plan process and the, the yearly Fund expenditure plan that we go through for the Safe and Affordable Fund are all existing infrastructure that we know a lot about the need, especially because of our needs assessment as well.

So we'll be using those existing processes, very public processes to then complement and get these dollars out then as well.

And I'm going to interrupt here. We're nearly an hour into our meeting and we have seven agenda items and we're still asking questions on item one. So I wish we had unlimited time, but this room is literally booked and we don't have unlimited time. And so I'm going to ask a couple things.

One, ask everybody to try to focus on the questions that are most urgent, recognizing we can't all just, we can't all ask all the questions that we want. I, I haven't asked any questions yet on this item and I have many, but I'm going to. We also need the respondents to be more concise in their answers.

These are all complicated programs and we just, you have to hit the essence of the complication. And then if there is more information, Members are going to have to seek that out afterwards.

So if we'll be more, more direct and concise with the answers, if we'll try to be prompt and judicious with the questions, it'll be, it'll be the only way we will get to all seven items within the timeframe that we have this room allocated. Anything else?

No, I can follow up with you directly. I would just ask. And the last point I'll make is that it would be helpful for there to be one place for the public to see the allocation of the dollars, whether it's a website, to make it easy. The average, you know, person is a working person. They're not going to have time to follow whether or not these dollars hit their communities. And even for us, it's difficult. So we'll follow up

And we have a dashboard and I'll make sure we share it with you. Thank you.

Thank you, Mr. Chair. And I'll try to be as quick as possible here. So under the Prop 4 spending plan, I'm going to ask you about groundwater. The Administration proposes appropriating about 10 million out of 386 million for groundwater storage, banking, recharge and in stream flow.

And I guess my concern is, given the importance of these items to prepare for drought, address water supply challenges, implement sigma, why are we not spending more of the 386 million?

And in fairness to everybody, that has been addressed earlier, before you got here. So they will repeat it, but they'll repeat a Shorter version than the answer they gave us before. And then you can watch the, watch the presentation, which you can't do questions multiple times.

Talking to me. In the last three years, we have put out about $360 million for groundwater projects and use. This is going to be looking to what is the continuing need. And it's really going to be hearing back from those water, those groundwater users and working with them to define where the investments should go moving forward.

So that's why there's a small amount in the current.

All right. Because you know, you got 386 or 361 out of the bond. All right. And then the next question I had was we've taken some cuts in the budget and then we've gone to the bond in order to backfill that. And I guess my question is. While.

We have a difficult budget year, when have we done that before? Because it seems like we have commitments for some of this money and now we are getting less out of the budget and using the bond money for it. So who wants to answer?

Hi, Andrew Hull with Department of Finance. Yes. In this year we had to make some decisions to help balance the budget. Okay. Well, that's, that's the, the rationale for this, that there was only a few areas left in the climate packages that began in 2021.

So we really looked at what, what existing funding was out there that still hadn't been spent and also wasn't about to be encumbered for anything that was still left on that list. We proposed shifting it to the bond if it was eligible to try to achieve some General Fund savings.

Given some of the General Fund uncertainties over the next few years.

Obviously the Bond was passed to be in addition to that. So that's probably the issue I'm having. And I would concur with Senate Member Caloza that we got a lot of money that's going out that we don't see as a Legislature. We don't see where it's going, and it does cause us some consternation. I know our chair.

We're in good hands with you to make sure that we actually see where the money goes and then we get a report back that we have been efficient with the money. So thank you.

Thank you. Well, we certainly, we're certainly going to keep asking for that. I don't know that we can guarantee it's going to happen. And we have had that issue raised multiple times already with the Administration, which is about the backfilling issues that are out there once today and multiple times last week. Any other questions before I begin mine?

Right, great. Okay. So you can be concise with your answers, but I'm going to try to get through all these things partially so that you're aware that there are things that I have questions about.

First of all, just that tension that we've talked about that's been out there in terms of the Fund shift, et cetera, recognizing, like we said at the very first hearing when we had all of the agency directors here, it's normal. But we're going to be challenging you folks.

You guys have things that you want to do out there. Our goal is to make sure we do that in a professional way that we can keep working together collaboratively as we move forward, I might point out.

So now I say that before I put in my little dig here, the reason that money is available that people have been asking for is because it's money we've kept allocating and you keep putting pulling out of the budget. And so that's why you say, well, we just looked around and found something.

Well, what you found was what we have keep putting in. So we're asking to try to bring an end to that in this budget cycle, which is if you agree and sign the budget, we assume you say, okay, we've given up on that and we're going to do that.

That's an important plea for us because our negotiations with you will say, okay, we'll give you this, you give us this, we give you this, you go and spend it. We, we. And we don't get the second half of the bargain. And that's just going to erode that sort of professional relationship that we should have.

So with that, thank you very much. I'll also remind again that the bond is it was the stimulus and the creation of the Legislature. The Administration wasn't actively trying to help us pull this bond effort altogether, et cetera. So we have a greater sense of ownership in terms of these funds, in terms of how they're being expended.

I have a question about the brackish desalinization and salinity management projects. I have some concerns that people are starting to do these projects right at the coast and there is a potential to do cause seawater intrusion if you're doing the brackish water.

What kind of guarantees do we have that we're making sure that we have the scientific evidence that brackish water desalinization projects that are asking for state grants are not, are proving that they're not going to exasperate that problem.

I appreciate the question, Chair. And we fortunately have regulatory programs that are keeping an eye on just that. Whether it's, you know, issues with brine around recycled water or desal. the regulations, currently all requirements, salt and nutrient management plans within the basins that those activities are happening so as to ensure, to your point, that the activities don't further worsen salinity issues in groundwater or create intrusion issues.

So the regulatory programs at the, at the Water Boards and at the regional water quality control Boards are doing well to account for that.

And I'm going to ask you to follow up with me a little more specifically. And I have a few projects I'd like you to check on. Great. To make sure that. That we'd love to make sure we. Follow, we've had a number of questions about groundwater storage and concerns about how little is being spent here.

And you've, you've made an attempt to answer that. I'd like to add one part to that, and that is that we have an enormous number of projects out there being advocated for by water districts, et cetera.

And if, if we're only putting out the nine, you know, the 9.0 million to start off, it would be helpful for all of those districts to get a realistic idea of whether these projects are, whether there's going to be money for these projects.

Literally there are probably $1.0 billion worth of groundwater storage projects that are going to be proposed out there. It'd be helpful for everybody to be realistic. I don't think that very much of this 300 million is going to go for all those projects by the time time the state looks at all the other things.

But what, how the, how you're going to allocate that essential $300 million or 260 or whatever we have would be helpful for everybody to know that. The integrated regional water management. I had some questions.

I'm now going to defer the questions about that, except to ask you to reach out to my office for a time to talk a little bit. I have some thoughts about these projects.

After serving 20 years on the Board of Supervisors, we submitted many of these projects and I see some places where I think people can game the system. And I'd like to, to be able to talk with you about that.

Multi benefit land repurposing program is one that I hope to elevate in terms of the importance for two reasons. One, if we're going to decrease our groundwater pumping to try to get us down to sustainable pumping levels, then some land is going to have to be repurposed.

I think that's an important lever for us because we're accomplishing two things there. When we do that, we're getting our groundwater pumping down to an appropriate level and creating, not losing the economic benefit of that land.

But I think that it's going to be a system that's going to be easy for us to not have the highest priorities met there. It might be whoever has the most ability to quickly access those funds, et cetera. I'd like to make sure that we actually prioritize, prioritize those multi benefit land repurposing dollars.

So that's something else that I hope that I want to get on your radar screen as we move forward. LAO has suggested two things that I think are really important and that is even though these are existing programs and we have pretty good confidence that those are programs that have been set up, we would like to have a report back and be able to be confident that a year from now when we say how did you spend those dollars?

That we will actually get those reports. So that's our request, but we will be working with our staff to try to identify those places where we don't have prior clarity in terms of how funds are going, it's new allocations in terms of where that's going to be happening.

So we're going to ask our staff to be trying to work with you to develop those things. We're going to ask LAO in particular to where they're making those recommendations that we, that we follow up.

Those are the programs where multi benefit, I mean multi year funding is one that we will probably be less likely to want to be supportive of. And we will.

This whole issue of asking you to try to make sure you justify if it'll be easier for us if you can explain why it's better for us to do multi year allocations with these funds. What are the economic benefits of people being able to plan ahead?

And there are help us identify those things quickly and we can all kind of move on more quickly with that. Recognizing that we've deferred to one question on dams. The other quick questions I have rather than taking the time for you. Well, I'd like to give you, I'd like to give you a minute or two.

Can you identify the places where you're asking for multi year funding where you can say hey this, this is why this really works. Not a General. Well, usually it's better for people to be able to plan bati. Can you identify specific places where it's really obvious that multi year is important?

Better than having us hold that money back.

Thank you. Yeah. Andrew Hull with Department of Finance. I'll try to be brief and then if anyone wants to jump in. In some cases, you know, it's been addressed earlier but there's a few programs where the departments are asking for first year support dollars for staffing.

They're going to be developing criteria, they're going to be trying to set up their guidelines. Having certainty about the following year about the local assistance that's going to be there helps them to plan towards that and sort of know what's going to be coming the year after. But I'll let anybody else jump in if they'd like.

Okay, great, go ahead.

I was thumbs up.

Thumbs up. That's the basic. That's one example of that and I'm sure that there are other. What's the status of the federal funding for the drinking water state revolving Fund?

One of the big issues we talked about at the beginning of this hearing, the added risk we have, the biggest added risk we have is the fact that tons of our funding is probably going to be cut. And so this is one of those examples of that.

We've got the Drinking water state Revolving Fund and the Clean Water State Revolving Fund and the rollback of the infrastructure bond money, etc. So can you help us with that?

Yeah, it's a concern of ours too and we're watching it.

But at this time those we haven't been have any signals from the agencies or staff and or any indication that those are endangered at this point and want to make sure and communicate that any of the funds that have been here identified by the bipartisan infrastructure law or the state revolving Fund are obligated at this time.

They may not have been drawn down yet because many of the projects that are being funded are mid construction or just starting construction, but they are obligated at this point.

And so we feel fairly confident on those that they couldn't legally be pulled back.

We're not sure all what to expect or see, but at this point, we're not seeing any indication that they would be. All right. So the status of the funds we have received, some of them, none of. Them we have of what we've received, they become obligated, but the program works on a reimbursement basis.

So each year we have a baseline amount that's funded for the state revolving Fund. And then we have these plus ups because of the bipartisan infrastructure law, again. And those are. Those are allocated each year. And here at this point, again, all of those have been encumbered but not completely drawn down.

So they're still sitting with the feds, which does cause some concern as it may be able to be pulled back.

One final specific question. Why are we combining the suballocations for the water conservation and agriculture and the urban areas with the funding for the integrated regional water management program?

Very simply, we were trying to be more efficient. Water conservation does tend to fall more into those Urban water conservation does tend to fall into that integrated regional water management pipeline. Hot. And rather than create a new program, we were trying to partner those up and be more efficient.

Great. Okay, before we move on from issue two, anything else for many Members. Right. Thank you, Members, and thank you to the panelists. Appreciate that. And we are now ready to move on to issue two.

All right, whichever Administration witness would like to start on issue two, please introduce yourself.

All right. Good morning, Chair and Members. My name is Courtney Massengale with the Department of Finance. The Governor's Budget includes 1.2 billion for coastal resiliency over the lifetime of the bond across various programs and departments. I'm joined by colleagues from these departments and they are available for questions.

And I'm going to pass it on over to the Coastal Conservancy to give their overview.

And actually, I think I'll go first with the Ocean Protection Council. Good morning. Oh, sorry. You had me. Good morning, Chair, Assembly Members, my name is Caitlin Kalua. I'm the Deputy Director of the California Ocean Protection Council. We also sit within the Secretary's Office of the California Natural Resources Agency.

So just to kick off this item, as we're aware, climate change continues to impact California's coast, generating sea level rise, storm surge and flooding, coastal erosion and Habitat loss. These impacts threaten public health and safety, critical infrastructure, communities, homes, tribal cultural resources, public access, and the health of ecosystems.

Proposition 4, Section 92020, provides 135 million to the Ocean Protection Council over the lifetime of this bond for projects that conserve, protect and restore marine wildlife, healthy ocean and coastal ecosystems. Prior to this bond, OPC had identified well over 50 million immediate priority projects increase ocean health and resilience to take place over the next two years.

Each of these projects are consistent with the Ocean Predictions Council's current strategic plan to protect California's coast and ocean, as well as our Tribal Engagement Strategy equity plan, as well as overarching state strategies, including the pathways to 30 by 30, that is to conserve 30% of California's lands and waters by 2030, the state sea Level Rise Action Plan, as well as outdoors for all.

The proposed budget, as you'll see in the materials from the Prop 4 funds is 7.5 to the Ocean Protection Council, which reflects these needed investments over the next two years by building from the past year's investments as well as our current available funds from the current budget year.

So to inform the spending plan, OPC has just under 25 million and 20 million, respectively, from the greenhouse gas reduction funds as well as proposals. Proposition 68.

Again, to Fund these immediate needed projects over the course of this year as well as 2026, with expenditures certainly intended to increase substantially from the Proposition 4 funding after this budget year, OPC is collaborating closely with the California Coastal Conservancy, Department of Fish and Wildlife and State Parks to ensure that the Chapter four, that is section 92020, the climate bond, are coordinated, leveraged and maximized benefits for coastal communities and ecosystems.

This includes coordination on sea level rise and coastal adaptation planning and projects, kelp forest restoration and actions to advance sustainable and resilient fisheries and fishing communities in the face of climate change. There's a second allocation provided by Proposition 4 to the Ocean Protection Council that is to advance.

Excuse me, to advance implementation of sea level rise mitigation and adaptation that will be done through OPC's existing Senate Bill 1 Sea level rise Adaptation Planning Program grant program and which implements the California Sea Level Rise Mitigation adaptation act of 2021 that was Chapter 236, statutes of 2021 provides funding for both local, regional and tribal governments to develop sea level rise adaptation plans and on the ground resilience projects.

We received over, excuse me, 75 million from Proposition 4 over the course of life of the bond. We're proposing 20 million in the current or this upcoming budget year for expenditure.

Although we acknowledge that with the establishment of a new technical assistance program to assist grantees or interested jurisdictions in accessing these funds, we do anticipate that the number of applicants and the need for this program is going to substantially increase in coming years.

And therefore we have a multi year spending plan beyond fiscal year 2526 that accelerates the encumbrance of expenditure of these funds. And with that I'm more than happy to turn to my colleagues at the California Coastal Conservancy. Thank you.

Thank you. Good morning, Chair Bennett and Members of the Committee. I'm Amy Hutzel. I'm going to be talking about the State Coastal Conservancy coastal resilience funding in Prop 4. So the total amount for coastal and combined flood management in Prop 4 is 350 million.

And the total amount for coastal resilience is 415 million, with 85 million of that 415 for San Francisco Bay. The plan for the coastal and combined flood management and coastal resilience funding is to appropriate those funds over the next decade, starting with about 10% of the total funds in 2526.

This proposed rollout plan was informed by the fact that there's been a recent large influx of state funding for coastal resilience. The Coastal Conservancy has encumbered approximately $500 million of General Fund and GGRF for projects over the past few years and we're managing those projects now.

The 2526 allocations will allow us to Fund implementation of additional shovel ready projects as well as support planning and design of projects that then we can move forward into implementation in future years with future appropriations. So a little more detail about each of these projects.

Programs the Coastal and Combined Flood Management Program has a stated purpose of coastal and combined flood management projects and activities for developed shoreline areas, including areas with critical community infrastructure, including transportation and port infrastructure.

The 32.8 million in FY2526 in this coastal and Combined Flood Management Program will be allocated to multi benefit projects that improve public safety, including shoreline resilience projects designed to address coastal flooding, storms, sea level rise and shoreline stability, and including projects that incorporate engineering with nature or nature based features.

Priorities include planning and implementation of flood risk management in disadvantaged communities and planning and implementation of projects to help protect urban waterfronts, ports, transportation and other public infrastructure.

We'll be guided by the State Sea Level Rise Action Plan that Caitlin referred to, local and regional sea level rise and coastal flooding plans, and through our work with local flood control districts and many other partners.

The Coastal Resilience Program in the Climate Bond is a broader program and it's for projects to protect, restore and increase the resilience of beaches, bays, coastal dunes, wetlands, coastal forests, watersheds, trails and public access facilities.

So we'll be using the 30.8 million of FY2526 funds for coastal Resilience to broadly achieve many of the goals and objectives in our agency's adopted strategic plan that could include land acquisitions that support the Pathways to 30 by 30 initiative, restoration of many different habitats, upland habitats, wetland habitats, subtitle habitats, projects to protect working lands that provide multiple benefits including farms, ranches and working forests, and then public access projects that further our outdoors for all efforts, including the coastal Trail and Great Redwood Trail, lower cost coastal accommodations such as campgrounds and projects that expand coastal access for people with disabilities.

85 million of the coastal Resilience funding, as I said, is specifically for San Francisco Bay and that's for projects that are consistent with the San Francisco Bay Restoration Authority or the San Francisco Bay Area Conservancy Program.

The plan is to appropriate approximately 50% of these funds over the first two years, with the remainder over several years after that with 20 million in FY 2526. So a little bit faster rollout than the other two larger programs.

And that's because there are many regional plans in the San Francisco Bay Area that guide our work on wetlands restoration, sea level rise, land conservation and public access. So projects that could be supported.

It's Large scale Baylands restoration in the north and South Bay, oyster and eelgrass restoration, Bay Trail, Ridge trail and protection and restoration of watersheds around San Francisco Bay. There's another program in Prop 4, the dam removal program.

The plan for that funding we have based on the schedule and budget for the design and construction of the Matiliha Dam removal project in the County of Ventura. That is a really high priority project for us, our agency. It is one of the highest priorities in NOAA's recovery plan for Southern Steelhead.

There's significant downstream work, including levies, bridges, land acquisition that need to occur prior to the actual dam removal. And there's a project team at Ventura County in place to work on this program. And I'm trying to be brief.

I'm going to interrupt you right there only because I want to make it clear to everybody that the Matilda Dam removal project is one that's been going on for 25 years. It has nothing to do with me being the Chair of this. Me being the Chair of this particular Committee. I'm certainly very happy and supportive of it.

But the Federal Government and the state have been partners on that. And as you said, it's the number one salmon restoration project in the state at this point in time. So anyway, I just want to get that clear. Go ahead, continue.

It's a happy coincidence. So I would say Prop 4 funds are going to be managed as part of the Conservancy's ongoing grant program. So we're not developing any new programs or guidelines. We have a single rolling pre application and application process.

We review these staff, review them based on our board adopted strategic plan and project selection criteria and we take them to our board when projects are ready given CEQA and other timing factors. And the goals and objectives in our strategic plan align really well with the purposes of the climate Bond program. And I'll just make a pitch.

On March 17th. We have a webinar for grant applicants, potential grant applicants. So we are getting the word out. And with that I will end. Thank you.

Move the microphone a little closer, please.

Thank you very much, Director Bonham.

Chair. Good morning Members. Chuck Bonham, the Director of the California Department of Fish and Market.

I can both. Move it closer and speak louder. There you go. I want to do four quick things. I want to answer the specific questions to the Department in the staff agenda. On item two, I want to go back and answer a few questions that just came up in item one.

I want to thank the Committee and the Legislature. I want to openly share our thinking about some of the uses we're proposing of the funding. And then lastly, conclude by expressing the urgency to support the budget change proposal we have in front of on you. So first, Mr.

Rogers, my Department is not funding specific irrigator or landowner activity in the basin of the Scott and Shasta watersheds to remediate their curtailment risk.

However, we are actively funding the Siskiyou County Farm Bureau in conjunction with the Karuk tribe and the Yurok tribe to do collaborative partnership program projects to create efficiencies, make sure there's water stability for the landowner community and for habitat restoration for salmon benefit.

So we are not funding specifically related to curtailments, but we have funded $10 million in the Scott watershed and the Shasta watersheds to motivate the Farm Bureau tribes and the Department to figure out a collaborative outcome.

Excuse me. The microphone's to your side and you're speaking. When you speak to Mr. Rogers, everybody loses you. So we're. We're having people. Yeah. So, yeah, we'll try it again. There you go. Good.

Next question that came up, Assembly Member Connolly. I will explain more in a moment, but in the last five years, our Department has spent about $45 million in massive modernization and infrastructure upgrade on our hatchery system. One of our budget change proposals is for an additional 5 million. I'll get to that in my last item. And Mr.

Lackey, I welcome the opportunity to come by at any moment. I'd be glad to share my experience trying to permit large scale infrastructure projects. My Department recently has issued our entitlements to both the sites project and the Delta conveyance project.

It's very likely those will end up in court because people have strong opinions about what I do in permits. But regardless of that, if we had sites, reservoir and the Delta conveyance project right now, the state would be better positioned to capture high flows and move it to people. So from there, I'd say thank you.

You spent a lot of time last year producing Proposition four. Thank you to the overwhelming majority of Californians who affirmatively voted yes.

It is a form of a blessing to have a state controlled asset that's $10 billion large, that's thoughtfully dedicated to dealing with water security, equity, biodiversity and benefits for people in the face of climate disruption, rather than being exclusively connected to the flux that's occurring on the federal front for similar funding sources. We are extremely fortunate.

Here's the thinking at our Department that is responsive to the questions in the staff agenda. You're asking the Department, why did you pick one of three possible priorities for but one section of the Proposition, section 92050. But first, let me start with.

We are your state agency that is the trustee to save nature across every corner of this state and out into the ocean. That's our mission of the $10 billion. We're name checked only twice in this bond for a total of 1% of that $10 billion. There's $25 million in Section 92070 for hatcheries.

I'll come to that in a moment. Your questions are about a different topic. A $75 million investment that we will manage collaboratively with our partners at the Resources Agency and the Ocean Protection Protection Council that could be used for three objectives. Island ecosystem protection and restoration, kelp forest restoration and climate ready fisheries.

As you know, we propose to focus at our Department on one of those three. Here's our thinking. First, the Resources Agency and the Department of Finance have been looking across the whole bond. All of the state government thinking about optimizing and maximizing. Our Department has a named much narrower role in this bond.

Then when we looked at those three potential objectives for the $75 million. To be Frank, we have no information or record that educates us on what is intended by island ecosystem protection and restoration. Then when we thought about the second category of kelp restoration, I actually think it's a tragedy.

This is one of the most saddening stories in our natural world in the last decade. It would be as if you woke up tomorrow and the majority of our old growth redwoods had disappeared.

We have lost our kelp forest ecosystem at that similar scale in almost large degree because of a 20142015 hot water, algal and heat wave burst in the ocean. But when we surveyed across Proposition 4, we see that the Ocean Protection Council has $135 million line item for very similar work.

An amount much larger than a third of $75 million. So to optimize, we thought, what if OPC could start with a focus on kelp? We want to start a conversation to understand what island ecosystem restoration actually means. Meanwhile, my last point of the four.

We have a dire urgent need to deal with our fisheries and getting them climate ready. It's about fish and our environment, but it's also about people and jobs. Our Department manages 250 fisheries out in the ocean across all kinds of jurisdictions. We've got climate disruption, drought, ocean acidification.

We've got decreased food sources for these fisheries in the ocean. We've got unnatural movement of them. We've got toxic algal blooms. So we're looking at climate ready fisheries and it is a crisis for us on a management level. So the specific BCP in front of you is for $38.6 million for just the next fiscal year.

We take 11, almost 12 million and apply it to salmon monitoring and new technology. This is hatchery related to assemblymember Connolly. We want to shift to modern technology. There's something called parental based tagging. We can do the DNA coding of fish when they're in our hatcheries. It's less intrusive, it produces less mortality.

It allows us to create a library and track generations of the fish that are swimming out. That allows us to make more sophisticated management decisions on the back end. Then we propose to take $11 million and continue advancing our whale turtle safe fishery dynamics. This is about people too.

One of our most profitable commercial fisheries that remains is Dungeness crab. I don't know about you all, but I used to set my calendar in California about having crab at local crab feeds, Chipino and California wine.

The reality is as the ocean has changed while that fishery is still profitable, it's running right into whales who have changed their migration patterns and they're swimming into the crab gear. It's entangling whales and killing them.

We're in the middle of trying to find a way to save for the hard working men and women that still practice the trade on the ocean and the recreationalists the ability to catch Dungeness crab while shrinking the mortalities on whales and turtles. That's this funding.

Lastly, we propose $774,000 to administer all this, including, check this out, it's 2025. For most people that make a commercial living catching fish in the ocean, they supply information to us in paper logbooks. Let that sit in for a minute.

Part of the funding we're requesting is to turn all that to digital electronic information, which allows us to make smarter decisions both for industry and conservation and then on hatcheries. It's a different line item. It is that $25 million. But currently for this fiscal year, the budget change proposal seeks an additional $5 million for a specific hatchery.

We're in the middle of one of the first true Put down your litigation, come to a table, find common ground settlements.

Friant Water User Association and other water users in the San Joaquin Basin and you may remember it from your time at the Attorney General's Office and very, you know, often in the courtroom, environmental groups, the Natural Resource Defense Council reached a settlement probably 30 years ago.

Now, part of it is to do water supply reliability projects in the San Joaquin system for the benefit of users.

Another part of it is to re wet about 50 miles of the river which had been dry for 50 years and then build a hatchery which the Department and Department of Water Resources have spent $40 million to do as a jump start facility to bring spring run Chinook salmon back to the San Joaquin for the first time in 150 years.

So we propose $5 million to do the operations of that. The remainder of the 25 million we're thinking about. In the last five years we've spent that $45 million to upgrade our infrastructure. We won the world's largest hatchery system. It's old.

We've been spending money with your partnership to bring it up to speed and we have just completed our first ever third party engineering assessment of the whole system to get it climate ready.

We expect to keep coming back to you with specific examples, examples of modernization to use the remaining part of that 25 million in each successive years until it's gone. So we thank you for Prop 4. I hope I could answer the questions in the agenda and that came up in the prior item.

We were thoughtful on how to use the 75 million even though we picked only one of the objectives. I understand the Legislature, as the Lao points out, could have a different opinion, but what we picked we're going to use very well to accelerate return on investment for people, jobs and the environment. Thank you.

Thank you very much. I'd be remiss if I just didn't say it's always inspiring to listen to you talk when you come here. So thank you. Go ahead LAO.

Apologize for interrupting Sonja Petek with the LAO and I can make this very brief. Overall, we would just point out that the Coastal resilience chapter of Prop 4 has 1.2 billion, a pretty significant amount, but that the share proposed by the Administration to be spent in 25, 26 is somewhat lower than for the other chapters of the bond.

However, in our review, we think that the multi year approach that's been proposed by the Administration for Ocean Protection Council, State Coastal Conservancy and Department of Parks and Recreation reflect appropriate considerations about staffing capacity, about the readiness of projects and about the availability of existing funds.

I won't go through examples since a lot of those were brought up by our Administration colleagues just a moment ago and then so the only other point that I would make is to address what Mr. Bonham was just discussing in terms of the $75 million allocation for Fish and Wildlife.

And the only reason that we wanted to bring this up is that you crafted Proposition 4, and in Proposition 4, you identified three areas of potential spending for that 75 million. We think what the Department has proposed has merit. It's a pretty robust plan to specifically focus in on climate ready fisheries management.

However, you might also think it's important to address those other two items that you put in the bond.

So we just wanted to raise that to make sure you are aware of, you know, sort of what you what you had done, what's being proposed, and that to make sure that you agree with the Administration and what they've proposed.

Thank you very much. Give me one second here and I'll be with you, Mr. Rogers. And that is.

Well, Assemblymember Wilson isn't here, so I'll hold. Go ahead. Assemblymember Rogers.

Thank you so much. And in the interest of time, I'll submit some additional questions to each of your offices that I had. Just a quick editorial because we'll say this every single time. We know that the Prop 4 dollars are really expensive money. It's, you know, about $2 for every $1 that we'll have to pay back over the lifespan of the bond.

And so it really is helpful and this is a compliment, Mr. Bonham, for us to hear not just how it's additive but also the urgency around it. Most of us, I think, made it really clear that operations, existing operations or supplanting existing dollars is not a good use for expensive money.

And so that was really helpful and I appreciate that. My question really previously I'd asked state parks about coastal sea level rise and the requirement and the funding for the projects that they're supposed to do and their timeline on that.

I just really wanted to ask for OPC, you obviously have a component of this that is more locally based for counties, for cities, for tribes. How are you going to integrate with state parks as they build out their plan?

Not just the plan, but the implementation, especially understanding that as we do projects that impact sea level rise or prevent it, you can just push those added impacts to other parts of the community as well.

No, it's a great question. So taking a step back to our existing Senate Bill 1, Sea Level Rise Grant Program, it is a separate funding pool that really is targeting local assistance. So it's not necessarily intended for other state agencies, but that is where we are coordinated in the planning efforts.

We have already funded or we have an existing, from a separate funding source, to state parks to support sea level rise vulnerability and adaptation projects in San Diego County. And so, certainly, through Prop 4, this expands that statewide consistent with state park's existing sea level rise strategy, the statewide sea level rise action plan.

And so in that way we're highly coordinated. As well as, identifying what are those additional information needs, gaps, how can we support. But also there's not necessarily that need for that to be part of the section 90230 excuse me, that Senate Bill 1 funding program that really is intended for local jurisdictions.

Within that program, we do require or ask that it's a multi jurisdictional effort in that, you know, it might be a single city applying for these funds, but we do need to look regionally countywide as we're looking at sea level rise adaptation.

And so that's another way to complement state parks, lands that are owned by and managed by state parks, what is then managed by our local and county or tribal governments.

Yeah, I really appreciate that. And over the next couple of years, as sort of that funding gets rolled out and as that project, I'm going to continue to ask that question about how you're coordinating with state parks, cities, counties, they don't look beyond their jurisdictional borders, but obviously the ocean doesn't care.

So just making sure that we are coordinated so that, that we don't just move the impacts, but actually help to build resiliency. Thank you.

Assemblymember Connolly.

Yeah. Director Bonham, just a quick follow up question. I really appreciated your testimony. A lot of inspiring work going on.

So, putting aside the $5 million, it's going toward Friant, which was great to hear about. So the additional $20 million, if I'm understanding you correctly, it sounds like there will be kind of an ongoing assessment that will be largely informed by the just completed engineering assessment of the whole system, if you will.

And just to the extent you can, like how does that look like? How do you anticipate that money flowing or being utilized?

Of the example I gave of spending approximately $45 million in the last five years, in this arena, I could make the reasonable prediction we would probably do some of those similar projects. For example, as climate has changed, fish have become susceptible to new dynamics.

There's a particular disease, which we believe is significantly affecting fall-run Chinook right now, called thiamine deficiency. We only scientifically teased that out in the last four or five years. It exists in fisheries around the globe, Norway, China, but it has not shown up in salmon before in California. It has adverse impacts for them.

But it turns out you can do treatments, you can sterilize your raceways in your hatchery, you can think about your egg injection practices that add thiamine back to your action to offset that loss in their natural dynamic. So we would be doing that.

Other things we've found that are very useful include partnerships with operators and owners of dams to talk about how we share water for purposes of cold water in the hatchery, or different release timing strategies to more mimic nature. Or sometimes you can do automation of some of the action which achieves much greater efficiencies.

It may be the case, and I'm nervous with the Department of Finance sitting here, that we're going to need some massive work beyond the remaining $20 million. But that falls into the category of public works and there's a whole state process for us to do the due diligence and lay that out.

Appreciate it. So if I can just add a quick follow up to the group. How are departments measuring and evaluating if previously funded projects are having the intended effects once they are completed?

We do three things. On our end, we track every dollar you've been giving us. We've allocated about $500 million from the earlier Prop 1 Water Bond, Prop 68 Parks Bond and the recent General Fund surpluses. We can have it down to the project, the beneficiaries, the metrics of restored waters and lands, most often through partnerships.

Secondly, we're one of only two departments to go through service based budgeting. It's zero based budgeting. We have a massive spreadsheet that we report to your staff on an annual basis that shows change in our level of service relative to our mandates. We track all these investments on that as well.

And then third, we're trying to communicate better by creating storyboards on all the work we're doing so the general public can see how their dollars are benefiting California.

Yeah, I would repeat some of that. At a project level, we are regularly monitoring the project. So any implementation project has a 20 year grant agreement and our staff are working with the grantee to regularly assess and evaluate whether the project is still serving the public benefit. So that's at the project level.

At a regional level, the Coastal Conservancy, we are participating in multiple regional collaboratives and forums like the Southern California Wetlands Recovery Project. Several forum in the San Francisco Bay Area, there's a Central Coast Climate Collaborative, the North Coast Resource Partnership.

So we are, at a regional level, working with many tribes, community groups, public agencies to assess the impact of our work. Not just the conservancy funding, but broadly the funding brought to bear by state and federal funding sources. And I mean I could talk about this all day in San Francisco Bay. It helped, but I won't.

But there's.

Yeah, there are regional efforts to assess this and then at the statewide level, I mean the Coastal Conservancy, we are reporting out annually on our work with an annual report to the public and to our board and more broadly across the State Resources Agency manages the bond accountability website and the state has statewide reports like "Pathways to 30 by 30", the Nature-based Solutions Climate Strategy.

I think I'm saying that wrong. And Outdoors for All. And there is tracking of the objectives in those statewide reports and Prop 4 can be part of that.

And Assemblymember, I would just add, you literally asked probably the state's best expert on basically what's performance monitoring, effectiveness monitoring. Do you know what you funded produce the intended result.

And I think what's really exciting, in the last couple years, is our resources agency creating that digital display tracking projects so the public can interface that way because it's hard for people to go find 50 different academic or agency reports and Member Lackey.

I think this could be replicated in the permitting world so people can see transparently where things are in the process and be glad to come by and talk about that.

Wonderful. And just briefly adding on for the Ocean Protection Council we're a little, a little different in that our annual allocations have historically been smaller. We don't generally receive allocations in the hundreds of millions, not necessarily always on the ground.

We do support on the ground restoration projects, but it's also the research, the monitoring and then of course restoration on a smaller scale.

So for us I can talk about the mechanisms, but the overarching value really that's added by projects that's funded by the Ocean Protection Council is often a catalyst for then, you know, additional phases of a project then be eligible for additional sources of public funding, et cetera.

So that I just want to place a finer point that it's not always monitoring of a on the ground restoration project, but that final deliverable of let's say a phase one of a construction plan, et cetera, that then allows them to go on and then that's part of our due diligence is okay, what, what happened with that initial in a way a seed investment.

So I just wanted to place that distinction for our agency is that these tend to be a little smaller, but again are building. They're the building blocks, the foundational building blocks for a lot of projects.

And with that we do of course have the ongoing General project specific oversight, the quarterly reporting that is required by grant recipients as well as then our annual reporting that is in public as well as the use of state accounting and the bond reporting databases.

And of course now as we look at both Prop 4, but our next iteration of our agency strategic plan, we're just now wrapping up our current five years plan is how to improve that transparency and public understanding of where funds have been distributed and for what purpose. This is largely important in the sea level rise.

Back to Assemblymember Rogers, your point on ensuring that sea level rise planning adaptation is coordinated across jurisdictions. As they're looking to, as different jurisdictions look to OPC for specifically this type of funding, they can see where vulnerability assessments already taking place, where are they already being funded.

How can they either tap into that information so we're not being duplicative or how to better align again, multi regional. Excuse me, multi jurisdictional regional planning.

Thank you.

Anything else? So I'm going to rip through my questions here. First, before I rip through my questions. It's very gracious of you to thank the Legislature for creating a bond at a critical time like this.

And so I would be remiss not to compliment Assemblymember Wilson, who really helped at some key moments keep the bond alive and moving and some key leadership there. So thank you very much for that.

The issue as to whether we allocate all this bond funding, same issue about out year allocations, et cetera, is one we just want to raise. We'll put on your radar screen. We may want to hold some of that back and try to be able to evaluate programs.

We would appreciate you being ready to talk with our staff about where you think we. That is not appropriate because it would actually jeopardize the efficient spending of the funds. So just hope. Just put that on your radar screen. It's an issue that we'll try to work out with you. A quick aside.

You brought up your zero based budgeting. You talked about how talented Ms. Hutzel is in terms of that. So while we have the Department of Finance representatives here and some still here, we would love to hear that happening across more and more departments. Right? To the extent that it's feasible to implement that.

But that kind of concept is exactly what the Legislature's, I think, been asking a lot about which is how do we, from a legislative standpoint, have assurances that the money is being spent wisely and those kind of processes are certainly helpful for us as we go forward.

So very quickly, under the coastal and combined flood management projects that are out there, I'd like to get on the radar screen. I think there's a need for all of these projects, you know, transportation and etc. But ports are going to be absolutely critical to the future of California in a variety of ways.

Offshore wind energy, we have to probably import more gasoline into the ports. We're trying to convert the ports over to green ports because there's so much diesel that is out there. I mean to get rid of the diesel trucks that that are out there.

So I hope that the coastal and combined flood management projects will potentially relieve some other port issues so that the ports can invest their funds in those things. So point that out.

And then I thought that the LAO analysis was helpful to complement the administration's analysis as to why on the Coastal Resilience Funding of the $330 million to do that, 10% of the funds each year for the next decade. That was helpful for us to hear that.

In terms of why you did that that way, certainly the $75 million, your justification answered a lot of the questions that I had and I think that the other members certainly make reference to that also. And you know, in terms of climate ready fisheries, if anybody, including Ms.

Wilson, has, I think that part of the idea of having all three options there is to literally have all three options be evaluated. But it doesn't mean that the Legislature intended for that to be divided one third, one third, one third or that it couldn't all go to one place. And good, I'm glad we got that.

So that's helpful for all of us. So from that standpoint, I think you could feel relatively safe unless I hear something different from other members about your prioritization of the $75 million.

And with that, I want to ask, I'm going to start at, at the end, but Director Bonham, can, can you give us an update on the implementation of the salmon strategy since it's been identified as one of the important things out there for us and certainly fits your mission so so much.

I can. Thank you for the question. About 18 months ago, a little over a year and a half ago, Governor Newsom released California's first ever salmon strategy that sought to be succinct, direct and action based in a way that the average person could understand.

We have countless large tomes of recovery and scientific documents, but we need to speak to people about what we need to do for an animal that might have the most majestic journey in the natural world, that since the beginning of time, our Native American sovereign partners have known no world without their abundance.

And as of today, a federal council is meeting, which is an annual process. And my department will have to grapple again with whether there are sufficient salmon in our rivers to have a fishing season. And it's possible we may need a third year of no fishing.

We are looking at fishing options and the process will play out for the month of March and April. So against that backdrop, the Governor and the state salmon strategy has 71 actions identified down to like specific thing to do on a time frame.

Roughly speaking, we've gotten underway over 60% of that work and we've completed about 14% of that work. And what we want to do in the coming weeks and months is have a way to share that update. And within that, since it's on the agenda, Action 1.11, I believe, is Matilija Dam.

And just so I'm really clear on the record, we're not radicals, we're not crazy. There is infrastructure and dams around the state and the country. Almost all of it is used and useful and serves in a essential need for people. It's staying.

Some of it is old and can be fixed to be more efficient for people and the environment. Occasionally you've got something that no longer serves its purpose and the owner and operator in transparent ways has determined and people aren't arguing about it.

It's a safety risk and it costs too much money and taking it out is the most prudent thing to do. That's Matilija Dam. The lead agency is the county. A diverse collection of folks are working on it.

Amy and I, an agency, have funded about $36 million or more of the underlying work to do on some of the bridges with property owners. That's Matilija, and we're on path for that project to be completed.

Thank you. Just a quick add. In terms of salmon restoration less than 100 years ago, there are pictures of so many salmon moving up that river that you could literally walk across the river on salmon. And it's very possible for that to come back. The dam has absolutely no use any longer.

But it is something that a county by itself would never be able to handle. So I appreciate you identifying it as the number one project that is out there.

It'll be interesting to see the county's still going to have to step up in a big way to come up with the matching funding that you know or the complementary funding that will be out there.

So appreciate that question or that answer. The recent layoffs at NOAA and their impact on the state in terms of the partnership that we have with Prop 4 funding. Can you give us a quick update in terms of how you're going to handle that?

I've been waiting for this question all morning and we have been in close contact with colleagues at federal agencies over the past couple weeks and have remained up to date on what is happening. And it is very worrisome in terms of our ability to conduct these projects, complete the projects, leverage the Prop 4 funds, monitor the results.

So I would say at NOAA, the relationship with NOAA, there are three coastal zone management agencies in California. Us, the Coastal Commission, BCDC, and there are three National Estuarine Research Reserves, NERS, Tijuana, San Francisco Bay and Elkhorn Slough. NOAA provides funding for the staff at Coastal Zone agencies and NERS. So that's one thing we're very concerned about.

NOAA provides data. They tell us when the storms are coming. They are tracking sea level rise. They are assisting us with nature based adaptation and ocean monitoring. NOAA Fisheries also prepares recovery plans for endangered fish and marine species.

And to move a project forward through the regulatory system if there's impacts to marine species or fish, you consult with NOAA. So we're very concerned about our ability to move projects through the regulatory process when staff are being cut.

And then I do just beyond NOAA, I want to also say USGS, the lead sea level rise modeler in California at USGS took an early retirement last week. And that is a big loss to the coast and ocean community and unexpected. Four out of 10 positions in the USGS Ecological Lab in San Francisco Bay just went away.

So it's beyond NOAA and USEPA. The San Francisco Bay program they've just launched lost staff. They've canceled a notice of funding opportunity for San Francisco Bay restoration. The Federal Highway Administration just paused indefinitely a NOFO for transportation resilience projects.

And even if federal funds are brought to bear in these programs, agencies like EPA, NOAA, Federal Highway Administration are now going to have to run all of their grant awards through the Department of Government Efficiency. There was a recent executive order.

So even if funds are made available, it is going to delay the process of getting grants out. So it is a concern for operations of coastal zone management and for funding of projects. And it's beyond, I mean Bureau of Ocean Energy Management, U.S. Fish and Wildlife Service, National Park Service, Corps of Engineers, these are all agencies we are working with on a daily basis to make projects happen. Sorry.

So I'm going to end this session. Unless there's anybody else, I don't see any, anything else. End the session on two points. And one is, you know, back when we were the agricultural country that existed at the time of the founding of this country, people were pretty darn independent.

You lived on your farm and took care of almost everything. Today in 2025, we are so highly specialized that we are completely dependent upon each other for everything. You know, almost no one is completely self sufficient.

So when you talk about the value of weather predictions and the, you know, we have to work together and the one thing that government does is pull so many of those various components together.

I mean if, imagine if you had to do your own checking about whether the meat was processed properly, whether the, whether your food is clean, whether your water is appropriate and that's what you have Government agencies do all those things.

We will see tremendous negative impacts, in the long run, in terms of the chaos that we're going to have from sort of an unfocused destruction of sort of these systems that have been designed to work together. And with that I'm going to lead on a more; end on a more optimistic note.

And that is, I love the phrase, 'the animal that has the most majestic journey of them all being the salmon'. A week ago when Mr. Bonham was recognized for, for an award from, from the, all the groups that support sort of salmon restoration, etc. They described in, in more detail the journey of that fish.

And if you, I'm not going to take the time but it is as you listen to that journey ago, it is as, as majestic and as mysterious and how it all happened that they decide when do they, how do they decide to leave the ocean and find back the exact spot that they, you know, they came from is truly amazing.

And so it, it raises the point, as my colleague said, we have this constant trade off between protecting fisheries and water for agriculture and it's not a clean 100% one's all right and one's all wrong at all. It is a constant trade off that is out there.

And I think you're ready to finish up with hopefully the even more inspiring news.

Yes, it's the hardest topic I've worked on in my entire professional career, which is now a quarter of a century.

But I feel so good about California because even though it's got conflict and strong differences of opinions, when you get folks who have different views to sit down and try to sort out a better future, you can do right both by salmon and farms, people and the environment.

It doesn't have to be an or, it can be an and. And that's the spirit I encourage all of us to keep at. Thank you.

And on that, I think it's appropriate time for us to leave this and move on to issue three. And while everybody's coming up, I'm going to take a quick 90 second break. If anybody else wants a head.

All right, we're. We'll call this meeting back to order. And I know that Assemblymember Connolly and Rogers are out there coming in soon. I don't know whether Assembly Member Pappin is returning or not. Right. But I hope she is. But with that, we'll start with brine discharge management and disposal.

And I think that we wrote up in, into the presentation about the brine discharge, a short presentation. And I just want to try to read some of these, make some of these points for the record. But brine, I'll just. I'm going to read this.

Brine is a water solution with high concentration of salt can result from desalinization, brackish groundwater. Brackish groundwater and seawater. It's also a byproduct of water recycling and water wastewater treatment.

We are going to, because of the nature of things going on here with water, we're going to have to do a lot more desalinization, a lot more brackish groundwater desalination, a lot more water recycling. And there are a huge number of water recycling projects that are actually moving in the state at this point in time.

The high salinity and the potential to contain chemical residues. Brine disposal and management is a growing issue and it is one that is causing water to become increasingly expensive. I watch a project move from 150 million to 550 million and a lot of it was because of complications with their brine discharge.

We expect to have brackish groundwater desalinization production of 28,000 acre feet per year by 2030. 84,000 acre feet a year by 2040. Reuse 800,000 acre feet of water per year by 20301.8 million acre feet of recycled water by 2040. That's a lot of brine. All right.

And so I wanted us to stop as we're looking at the Prop 4 funding and identify this as the problem that California might be uniquely positioned to be able to deal with with our entrepreneurial spirit, with the great technology background that we have.

This is an example of one of those places where investments could, in better technology could lower this cost and lower the cost of water dramatically, if you can find ways to do that.

So I'm particular interested when trying to ascertain if brine disposal is or will be an issue that the state faces that we could do something about, understand the state's role in terms of brine management and discharge. And we have some presentation here on that and then learn more about the research innovation.

So that's why we're sort of digressing into that as it fits with our how much of our budget should potentially go for some of these investments as we move forward. So appreciate the, the fact that we have our speakers here today and we'll start with whoever wants to go first.

Great, thank you. Chair, my name is Joaquin Esquivel here, Chair at the State Water Resources Control Board. I'm actually joined by our Deputy Director at the Division of Drinking Water, Phil Crater as well, to help fill in any information and question and answer any questions you may have.

I really appreciate this opportunity because so often we have a focus certainly on water quantity and that is supreme importance. But the quality side as well, to your point, can, can limit us when it comes to the work on the quantity side, especially with increased recycled water desalination projects out there.

And I agree, Chair, the state is well positioned to be able to continue to innovate in this space. The fact is, the current existing regulatory frameworks we have require salt and new nutrient management plans when recycled water is proposed for a basin.

And it's because we know that without those considerations we have a real threat of damaging our groundwater basins when it comes to increased salinity.

That is both true on the urban side and in more rural settings Here what comes to mind certainly is the Central Valley and the need to manage both quantity there again below ground, but also quality where salinity continues and it's increased.

The increase in salinity continues to be a threat to both, you know, agricultural production and drinking water there.

The Central Valley Regional Water Quality Control Board has a program known as CV Salts, which is really looking and aiming to handle and tackle that challenge long term, find ways of disposal of brines and salts and manage it at that basin level scale that it really requires.

It's hard for any one entity here to tackle these challenges and it really requires regional solutions.

And there on the urban side, I'll note that in say, the Santa Ana river watershed, we often like to say the hardest working drop of water in the state is in the Santa Ana river watershed because that water is recycled over and over again.

Some of the more well known water recycling projects, like the Orange County's groundwater replenishment system, all depends on managing brines. And there are brine lines ultimately that all those recycled facilities contribute to and then discharged into the ocean.

But there are ultimately economic opportunities when it comes to the resources and minerals and the value that can be captured within those brines. And it's exciting because it does feel like we are on the Cusp of really seeing a lot more.

Well, first and foremost investment certainly in recycled water, but then investment in how you manage brines into the long term and ensure that the quality side is focused on as, just as much as the quantity side.

I'll note that to your point, you know, it really depends on what sort of sources we're talking about, whether it's inland or on the coast, whether it's a product of water recycling or desalination.

But ultimately it all is actually really depending on a very old technology at this point, reverse osmosis technology where really it again concentrates the brines ultimately while it also cleans up and, but it's a lot of energy intensive work that goes on. So that adds to the cost ultimately of the recovery of these minerals as well.

But again, I think that there is an incredible amount of innovation that's happening and real opportunity for us to continue to manage. But the quantity and quality issues associated with these activities and they're, they're increasing. Thank you, Phil.

To see if there's anything further that I didn't cover to Phil, generally and then I know we have representatives here from Berkeley National Labs to talk about some of the innovation going on.

Thank you Chair Esquivel, and good morning Members and Chair. Just. All I'll add is that we have developed regulations that provide consistency and a clear pathway to permitting the most common types of projects. We don't require projects to discharge brine to the ocean or through a brine line, but those are the common methods of discharge.

And so we wanted to make sure that we had a clear framework to move those along quickly. However, if there are other approaches that project proponents want to take for a project waterboard staff, you know, we're more than happy to have those discussions and work with applicants to tailor their projects.

Well, I hope you'll stay open to two new innovations that are out there in terms of, you know, zero liquid discharge altogether, ways to use the brine material that is out there.

You know, the Central Valley inland areas are ones that could benefit tremendously because brine discharge, when you're right at the coast, you do have the ocean there. But there's an impact for that and certainly a cost in terms of, of trying to do that. Brian discharge.

So I hope your, your permitting and regulations will stay open and come, come back to the Legislature if we think we need to make some modifications with regard to that. I'm going to, I'm going to jump to LAO because. And then, then I'll come to you to finish Up. All right. But LAO, your presentation on this.

Oh, yeah, thank you, Mr. Chair. Sonja Petek from the LAO. We just had a couple of issues that we thought or questions for legislative consideration, issues you might want to think about as you hear from the other panelists and think about as the state begins to increase the amount of desal and water recycling that it does.

So these questions can also be found on page 17 of the agenda. So I don't need to necessarily read all of these, but, you know, first it's, you know, we know that the State Water Board does regulate both discharges and has a water quality plan for California's oceans.

And so one question is how sufficient are the current water quality regulations for protecting both groundwater and surface water from the potentially negative impacts of brine discharge? What will be the challenges that the state faces in monitoring brine discharge?

Do we have enough information about the amount, what's in the brine and the impacts on marine life, et cetera?

Another issue for consideration is how can the state ensure that brine discharge from new plants do not further compromise bodies of water that already have salinity challenges, such as the Sacramento San Joaquin Delta or certain inland aquifers in addition? Well, I already mentioned this, but, like, what additional research is needed?

Do we know what other states and countries are doing? Could we learn from them? And then what role should regional collaboration play when it comes to brine disposal?

And then it was already mentioned that some desal plants do not necessarily have discharge into the ocean, but what additional support might they need from the state in terms of funding or technical assistance when it comes to inland brine disposal?

Great. Thank you very much. And now, Dr. Fisk, we really appreciate you being here. I'm sure you've got the solution for us for all the new technologies that we need. But no, we really appreciate you coming here to talk about that.

Thank you very much, Chairman Bennett, and thank you, Assembly Members, and also thank you for your service to our state. I'm Peter Fisk. I'm the Executive Director of NAWI, the National Alliance for Water Innovation. This is a program that was created by the U.S.

Department of Energy, but partnership with the State Water Resources Control Board, CA DWR, and the California Energy Commission. And what we've done is we've received funding from the Federal Government and leveraged that with state dollars. And so we actually are running a number of research projects, including many in California because of the state investment.

And those state dollars are leveraged three to one with federal dollars. So we've talked about BRINE as a persistent issue. And as you've noted, as our plan is to diversify the water supply for California, we will be creating more brine. And so this question of what is it going to do in our environment is critical.

NAUI has been doing a number of projects in this area of brine treatment, and I want to tell you a little bit about them. So for starters, you know, Joaquin, you mentioned reverse osmosis being an old technology actually developed by two immigrant grad students at UCLA in the 1950s.

And now actually, we are developing new advanced cycles to squeeze many more drops of water out of that brine. So typically, a typical ocean desalination plant might only squeeze 50% of fresh water out and throw away 50% in the form of brine. We have new cycles that enable you to squeeze most of the drops of water out.

One of the most interesting ones is actually no longer using membranes like we use in reverse osmosis, but we have new chemicals that actually chemically pull the water away from the brine. In fact, in Ventura County, we're going to be pioneering a pilot of one of these systems in the town of Cambria, California.

Cambria built a water reuse system that involved reverse osmosis, ended up with a bunch of brine, and had a lot of challenges with how to dispose of that brine economically. We actually are going to roll a trailer and be able to squeeze every last drop of water, leaving behind dry salts.

It turns out that brine, as you know, water, is a universal solvent. So it contains everything in the periodic table. And in fact, water, the brine that we're throwing away, may actually be valuable constituents that we can harvest. So this is. I'll allow you, at the next break, you can take a look at this.

These are blocks of magnesium metal. This magnesium was harvested from the Santa Barbara desalination plant. So we took a tote of brine from them, extracted out the magnesium chloride, dried it, electrolyzed it, and made this metal. Magnesium metal sells for about $8,000 a ton, and most of the US supply comes from China.

And in fact, it is a critical material for the Clean Energy Revolution because it's so lightweight and strong. You can make lighter bodies for automobiles, et cetera. So you can save energy efficiency by using a lighter weight metal. We have another pilot and a project outside of California in El Paso.

El Paso, Texas, is the scene of the largest inland desalination plant in the Western Hemisphere. It's actually critical to the water supply for that city.

And they have, right next door, a pioneering team of innovators who are taking that brine, which would normally be pumped at great cost underground, and actually transforming it into a complete suite of chemicals. And they now have negotiated 20 year offtake agreements for the, for the sale of all those chemicals.

So they create concentrated sulfuric acid, sodium hydroxide, they create more water, and they create gypsum, which is a soil amendment that is used to open up soil and keep permeability and porosity for water flow.

So we also have exciting projects, including in Palmdale, California, we have the Palmdale Water District partnering with another innovator in California to use the brine and alter its chemistry. So it actually sucks in CO2. So you can actually use the brine as a sponge to clean the air and actually sequester carbon.

So I'd love to report that all these things are, you know, ready for advanced deployment. But this is where this early stage investment is so valuable because we know that the regulatory community, we know that the consulting community needs to see real stuff. They need to see that it works.

And so we now have almost a dozen of these pilots running and we're bringing utility managers and consulting engineers to see these advanced technologies and encourage them to incorporate them into future designs.

So this item's on the agenda because I heard a presentation about this, about these new technologies coming forward, and it just seemed to me that we have a unique opportunity here.

It fits the concept that the biggest bang for the buck that we can get from our greenhouse gas money and from our Prop 4 spending is for us to develop technologies that solve our problems and at the same time give us an economic ability to export that technology and make the revenue and have, have California be the leaders in these areas.

So I want to use this opportunity to say I hope we will think creatively and I will hope the Administration will think creatively about are there, are there some incentives that we could build in to jumpstart this classic example is back when the rest of the nation was refusing to do some things in terms of DNA development.

It was only California that both created the right rules and regulations and also incentivized that. And now today, California is the leading biotech state in the country. We should be the same kind of leading state when it comes to water technology. There's, we have all kinds of reasons why we should do that.

So this is the challenge that I'm throwing out there that I hope we can find great ways because a little bit of investment in a technology improvement that fuels an industry take off and decreases the cost of Doing these things is really valuable.

And the final thing I want to try to pull together is it seems to me that there are two things. One, if you can develop all these different chemicals from the brine and from the, you know, from. From extracting these chemicals, because water is the universal, you know, solvent, that there is an economic benefit there.

There is also a big energy demand that usually comes from trying to treat this. So there's a greenhouse gas issue that we could try to incentivize technologies around that also.

So if we had technologies and if we had incentives and if we had regulations that said, look, if you do it all, if you pull out the chemicals and make magnesium and you somehow pull out the carbon and you generate, instead of 50% of the water going out and brine, you generate some more fresh water that we can then use for the fresh water that we need.

We ought to have a special incentive for those kinds of projects that are out there. So before I go to Assembly. Go ahead, Assemblymember Wilson.

Yeah, thank you for letting me go. I do have to leave, but I wanted to make sure. Before I left, I wanted to follow up on something that you said, and as it relates to what you said in terms of innovation and also really what the chair said, you talked about that the current process is energy intensive.

Right. And so I wondered, with all of the different uses, is it neutral at some point or it becomes beneficiary? I was trying to understand now what. What that means now with innovation that you're doing.

That's a great question. And indeed, when you have more chemical processing, you're typically looking at higher energy use. One of the things we're looking at at NAWI is that our water treatment systems are. Water plants presently are very fixed in the amount of energy they use throughout the day.

And we're actually doing research again with the City of Santa Barbara to allow their desal plant to run like a Ferrari. So when water, when energy is cheap and abundant, you can turn up the volume of water that you produce. When energy is in demand, you can dial back that.

So we could imagine that these desalination and water reuse systems would act like a sort of a balancer on the grid. One of the reasons why the California Energy Commission also invested in the NAUI program. So we will be using more energy. We will also be using more energy for data science and all these sorts of things.

But if we use it smartly, we can actually end up with a more resilient grid in the same basis.

Thank you.

You're welcome. Thank you. And just as you're getting ready to leave, I want to point out that Assemblymember Pappin was on the bond Committee with you. And so our thanks to you also for pulling forward. And Assemblymember Conley, you were on that Committee too. zero, I'm sorry. Right.

We had a few Members. We were a large Subcommitee that ensured that there were different voices represented on different topics to get to such a.

Comprehensive bond under your able leadership. Right. Thank you. Great. Thank you. All right, Members, any. Any other questions, etc. On. On this issue? I have. I just would like to point out the decarbonization that you talked about. We are going to be using more energy as we do this.

And so is this a topic that is currently being talked about on the Administration side in terms of this issue of brine and CEC and coordination with CEC on the, on the carbonization side, etc. I mean, that's one of the issues is one group regulates sort of this discharge. One group regulates the global, I mean, the carbon.

You know, one group regulates the minerals that come out of it. And we need to try to somehow link those three together. So that's the challenge that I see. Right.

Yeah, I appreciate that. I think, as you know, the Governor has his water supply strategy that we all contributed to. And one of the buckets there is desalination and increased water recycling.

And while I'll have to review back through the document, if we had put in brine disposal as one of the issues we'll be working on, it definitely fits in within the theme of, again, the increased activity on recycling and desal that we're going to be seeing and needing to then address a number of these issues.

We're actually in the middle of scoping right now some amendments to our ocean plan. So when it comes to at least desalination on the ocean discharge side, I think there's opportunities to make sure we're incorporating some of these considerations and helping incentivize the innovation.

So I'm kicking this off as the introduction, but we'll bring this up sort of annually here and hopefully you'll keep coming with more and more rules and regulations that incentivize the innovations that are happening at N. Thank you very much. Appreciate that. Thank you. All right, we're going to go to issue four.

Thank you so much, Phil.

Thank you. This light. Let's get your bike frame.

All right, thank you, Chair. I appreciate this opportunity here. Joaquin Esquivel, again, chair at the State Water Resources Control Board. I'm now joined by Assistant Deputy Director Andrew Altavogt from our Division of Drinking Water. He's the head of our SAFER Program. And also joined here by Kristyn Abhold.

She was at the Division of Drinking Water and recently took up a position with our Division of Financial Assistance heading our Office of Sustainable Water Solutions. So they're here to help fill in.

I'll also note Kristyn has done an incredible amount of work and was lead on our needs assessment, the real data side of so much of the work.

So the opportunity here to update you all on our Safe and Affordable Fund and our SAFER Program, our Safe and Affordable Fund for Equity and Resilience is just really well taken and really appreciate it, I think. As we all well know, the State of California in 2012, passed what's known as the Human Right to Water.

It was an ambitious and still is an incredible statute. One of the first states in the nation here to really embrace the human right to water. But that change in the water code didn't come with any new programs, didn't come with new funding or authorities on its own.

And it's been actually then an evolution here with the state and importantly leadership of successive governors in the Legislature that, that we've had a transition where the Division of Drinking Water was brought from the Department of Public Health over to the State Water Resources Control Board.

We were granted authorities like mandatory consolidation which no other states currently have.

And importantly, Governor Newsom made a priority along with the Legislature to find a sustainable source of funding, to find a source of funding ultimately for this incredible goal where we know, and importantly, I'll say, you know, at the start of this all in 2012, we couldn't actually say how many systems were not meeting maximum contaminant levels, how many people were without safe and clean drinking water, what were their challenges.

There was, we were still very much at the start of wrapping our arms as a state around this challenge. And so in 2019, through the leadership of the Governor and the Legislature, we had passage of the Safe and Affordable Fund. 130 million a year for a first 10 year commitment.

And what we've been able to do with that is leverage existing bond dollars, opportunities like the bipartisan infrastructure law on the federal side and other allocations here from the General Fund to have a flexible source of funding dedicated to small failing systems.

Where, you know, the State of California has somewhere around 2,800 community water systems that's systems that serve 15 permanent connections or more. But when you look at those that serve fewer than that, what are known as state smalls, we have over 7,000 water agencies in the state providing water to communities.

And while 400 or so of the largest of those water agencies serve about 90% of the population and currently 98% of Californians are receiving clean and safe drinking water.

We know that there are so many small, of these small systems that really struggle and so that it really requires a different level of service from the state in ensuring then clean water. And so since 2019 we've been able to go from 1.6 million Californians down now to about 800,000 Californians.

We were at one moment 700,000 and importantly have brought 300 drinking water systems back into compliance. And you may ask, well, the numbers don't seem to add up amongst all that, why do we still have 800,000? Why do we still see, you know, 200 plus drinking water systems that are failing?

And that's because this is a very dynamic challenge that we have. It isn't just around, it's not a static number. Those number those systems that are not meeting maximum contaminant levels, they drop it and they can drop off and on the list. And and so importantly, our goal with this program is to have sustaining and lasting solutions.

And one of our key tools in that is consolidation. And so since 2019 we've been able to consolidate over 140 drinking water systems to neighboring systems that are more well resourced.

And it's really those economies of scale that we know are really critical in being able to meet not just current limits, maximum contaminant limits, current pressures from climate change and other challenges for drinking water systems, but also future needs here as well. We know we have microplastics we're concerned about.

We know there's constituents of concern like PFAs that are coming down the line. All of that is going to put further pressure on again these smaller failing systems. So this challenge that we're all in the midst of collectively is a generational one.

It's taking us generation to get to the fact that, you know, communities weren't purposely delivered municipal water were sometimes redlined. And so the human element for all the technical, important, critical technical work that goes on in funding is sometimes the most important element in actually making headway. So we're proud of the progress we've made.

We know we still have a lot more to do.

And to our previous conversation, you know, the progress Prop 4 Bond Dollars and other sources of funding are just really well needed because through this needs assessment we've really identified that we have a funding gap of about $5 billion over the next five years for just those failed and at risk systems, not to mention domestic wells, which are also a huge focus of the state board and a lot of the efforts here.

But the challenge with domestic wells is unlike some of these systems where consolidation might be an option, they may be isolated, but it's a part of the continuum of the work that we're doing.

And proud of our partnership with organizations like Self Help Enterprises and others at the local level who have allowed us to respond to drought and dry wells where, you know, thousands of households are being currently supported with hauled water right now. So there's a quick gloss.

Glad to dive into specifics, but just very fortunate of the leadership of this state to tackle something and importantly actually have the data to back up where we need to be making investments.

And I feel there's a number of other states that are also, we know, struggle with this but don't have the running room, if we will, that we have here.

Very important topic. We're talking about the most disadvantaged people in the state, the least ability and certainly everybody should have the right to clean water. You talked about the fact that it's a dynamic situation, so you're making progress. And then. But while we're making progress, we're also causing more and more people to be at risk.

And fortunately the Assembly has consistently dealt with one of the reasons that causes more and more people to fall into this and that is new wells that are going in that are high capacity, that are deep 2,000 foot wells that are then sucking groundwater levels down and then jeopardizing these smaller systems that are out there.

While the Legislature's had the courage to take on the interests that are trying to block or trying to keep that practice going. We haven't been able to be successful in getting the Bill through the Senate and assigned by the Governor.

But it is something that complements the efforts and if we don't get that, get that done Legislatively at some point in time, your challenge will just keep growing out there and we won't have the resources to be able to deal with that.

All right, we'll go on to the two of you for your presentations if you have anything to add further to add. All right, thank you. LOA.

Just a couple. This is Sonja Petek again from the LAO and just a couple of things to add. We did have some issues for you to consider that are listed on pages 20 and 21 of your agenda. But I think I just want to highlight a couple of them for your consideration.

Question 6 and 7 on page 20. One that Mr. Esquivel already alluded to is how can the state make sure that the state funded improvements are really maintained over time? So it's not just, you know, invest improve assistance, you know, if it's not a consolidation in particular.

And I guess another challenge is that some of the state small systems and domestic wells are subject to less state regulation. So that's another challenge for, you know, to ensure that those investments are long lasting. And question seven, you know, the SAFER program is also supposed to consider affordability of water, of drinking water.

And while we have definitely improved as a state in terms of assessing affordability, particularly through the Water Board's Annual Needs Assessment, we don't necessarily have a system in place to actually address the affordability. So what are some of the tools that the Legislature can consider going forward to actually address the affordability of water?

And then on page 21, I just want to draw your attention to question 11, because when the Safer Fund was created, it uses 5% of greenhouse gas reduction funds annually, up to 130 million through fiscal year 29-30. So that funding source is scheduled to go away after that fiscal year.

We also, as we talked about in some of the earlier issues, there's a lot of uncertainty right now about federal funds. So this will be an issue, I guess, for the Legislature to grapple with is how to support these programs going forward if the need still exists.

So Those are items 6 and 7 are two of the questions I wanted to ask. So she's just asked them. And so I'm going to ask you to briefly try to give us an answer to question six.

And that is how do you monitor, make sure that these small, small systems that don't have regular state regulations stay, stay in bounds after you get them fixed?

Yeah, I appreciate the question and it's a huge concern of ours, especially because there are so many lessons we've learned before the Safe and Affordable Program came to the board. You know, I know of specific communities out there that, you know, an initial investment was made, folks thought it was, it was going to resolve the issue.

But because of a lack of capacity and operation and maintenance dollars, a few years later, that facility is no longer functioning and we're kind of back to square one. And so a lot of that, if it's not a consolidation again, consolidations provide the most lasting solutions for communities but not every community is a candidate for consolidation.

There may not be a system close by. And there we really are working with the system to ensure that there are efficiencies in place that, you know, and importantly do things like rate studies. So we really understand if we make this investment, is it one that is going to be able to be maintained by the community?

So your basic. So your basic answer is you're trying to make sure they have the capability of monitoring themselves.

Yes, we do our best to make sure the investments are not one time.

Try to speed these up. We're fighting time wise here and stuff.

And then do you have any innovations on the issue of addressing the affordability question in question seven?

Yeah, I will note on affordability, you know, we were very fortunate.

The State Legislature and the Governor here prioritized the paying down of water debt that was an eight nearly billion investment and really paid down what was a lot of debt that was accumulated because of drinking water shut off moratoriums during COVID But was our single largest program that we've ever had that really tried to help tackle this issue of affordability.

While our programs and investments help keep water rates down, we don't have any dedicated funding currently for an affordability program.

You don't have long term.

All right, Members, any questions? All right. All righty. I have, I think the issue raised in item 11 is something, it's good to have it on the radar screen. And we're all going to have to try to figure out what are we going to do after 2029-2030. And with that, thank you very much.

We're going to go to issue five. All right. Oh, that is light. Thank you.

All right, issue five. Appreciate the opportunity here. This is on the Sustainable Groundwater Management Act and its implementation. We have a BCP request here in order to be able to tap our Underground Storage Tank Fund in order to pay for some of our positions on the Sustainable Groundwater Management Act.

I think as we all know, currently there are seven inadequate basins that have been determined that are now at the State Water Board. Six from a prior determination from the Department of Water Resources, one that was recently determined.

But of the six that were here found inadequate, the State Board has voted to bring two of those basins into the probation the Tulare Subbasin and the Tule Subbasin. We recently had a hearing for the Kern Subbasin where we continued that probationary hearing and decision.