BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Adopt Recommended Positions on State Legislation: AB 2079 (Bennett) Groundwater Well Permitting, *AB 2875 (Friedman) State Wetlands Policy, *AB 2881 (Lee) Social Housing, SB 1148 (Blakespear) Electrical Service Metering in Multifamily Dwellings and Local Government Buildings, and Other Legislation Which May Require Urgent Consideration for a Position by the Board.
End
RECOMMENDATION:
Recommendation
A. Adopt a position of “Oppose unless Amended” on: AB 2079 (Bennett) Groundwater Well Permitting.
B. *Adopt a position of “Support if Amended” on: AB 2875 (Friedman) State Wetlands Policy.
C. *Adopt a position of “Support” on: AB 2881 (Lee) Social Housing.
D. Adopt a position of “Support” on: SB 1148 (Blakespear) Electrical Service Metering in Multifamily Dwellings and Local Government Buildings.
Body
SUMMARY:
AB 2079 (Bennett) Groundwater Well Permitting (A-03/21/2024)
Position Recommendation: Oppose Unless Amended
Priority Recommendation: 2
AB 2079 would require a local enforcement agency (LEA) to perform certain functions at least 30 days before determining whether to approve a permit for a new large-diameter, high-capacity well of eight inches or more producing more than two acre-feet annually. An LEA is defined as any city, county, or water agency that has adopted an ordinance for construction, maintenance, abandonment, or destruction of a water wells. Under AB 2079 Valley Water is both the LEA and the Groundwater Sustainability Agency (GSA). The LEA would be required to take the following actions before permitting a new well are as follows.
• Internet Posting - After receiving an application for a large-diameter well, provide electronic notice to the general public by posting a notice on the LEA website.
• Notify GSAs - Notify all Groundwater Sustainability Agencies (GSA) within a 10-mile radius of a proposed well.
• Notify Other In-Basin Well-Permitting Agencies - Notify other LEAs administering well-permitting programs within the basin.
• Notify All Property Owners within a 1-mile Radius - Notify by written notice all registered owners or agents of parcels within a one-mile radius of the proposed new well.
GSAs would be required to provide specified information to LEAs on the applicable Groundwater Sustainability Plan, the estimated depth of the groundwater level, and information on fees, allocation, and monitoring. The bill requires an LEA to provide the applicant information related to the basin name and identification number from the Department of Water Resources, name of GSAs managing the basin, information on regulations adopted by the GSA, and notice that approval of the application and granting of a permit is subject to the regulatory authority of the GSA.
The bill prohibits LEAs from approving permits for large-diameter, high-capacity wells within a quarter mile from other wells used for supplying domestic water to one or more persons or to a community.
The bill provides several exemptions to allow for wells that do not draw more than 2 acre-feet per year, are located on a parcel of 5 acres or less zoned for rural residential use, or wells that provide water for public supply or a state small community water system.
Importance to Valley Water
AB 2079 seeks to codify Governor Newsom’s Executive Order N-7-22 issued on March 28, 2022, and to incorporate additional restrictions on new wells. The bill poses numerous issues for Valley Water because it does not consider sustainably managed groundwater basins, such as those in Santa Clara County. The Sustainable Groundwater Management Act (SGMA) was adopted in 2014, which was comprised of three bills, AB 1739 (Dickenson), SB 1169 (Pavley), and SB 1319 (Pavley). SGMA was largely modeled after the work done by Valley Water to manage the groundwater basins sustainably for over 50 years.
Information Sharing between LEA and GSA - As part of SGMA, Valley Water is specifically authorized as the GSA for Santa Clara County. Unlike most other areas in the state where counties carry out the permitting of wells, in Santa Clara County, Valley Water is both the well permitting agency and the Groundwater Sustainability Agency. AB 2079 does not contemplate this scenario and requires LEAs to communicate with GSAs where it makes no sense for our agency.
Prohibition of New High-Capacity Wells - The prohibition on new high-capacity wells within a quarter mile of a well used for domestic water for at least one person would lead to a de-facto ban on any new wells in much of Santa Clara County. In addition, the subsidence requirements of the bill which include prohibiting wells in areas that have subsided greater than 0.5 feet since January 1, 2015, could also be interpreted to prohibit new wells in areas like Santa Clara County where the basins experience elasticity and recovery. Elastic land subsidence and recovery are caused by seasonal and drought variability in groundwater levels. Unlike permanent subsidence, elastic subsidence is recoverable and does not cause permanent damage.
While some basins in California have been poorly managed and may need a heavy-handed approach as proposed by AB 2079, it is inappropriate for the basins managed by Valley Water. As such, staff recommends the Board adopt a position of “Oppose unless Amended” and to request the author amend the bill to limit its applicability to “Critically Overdrafted Basins”. Failing such an amendment, staff will work with our member associations, such as the Association of California Water Agencies and the California Municipal Utilities Association to address the many issues of the bill in order to arrive at language that would address our concerns.
Staff recommends the Board adopt a position of “Oppose unless Amended” on AB 2079.
Pros
• Would help protect existing wells in areas, such as critically overdrafted basins, where the groundwater levels are not sustainably managed.
Cons
• Would lead to a de facto ban on new agriculture and industrial wells in parts of South Santa Clara County based on well distancing requirements.
• Would lead to well permit denials even when groundwater conditions can support reasonable beneficial use.
• Creates an unnecessary regulatory burden for Valley Water even though our basins are sustainably managed.
*AB 2875 (Friedman) State Wetlands Policy. (I-02/15/24)
Position Recommendation: Support if Amended
Priority Recommendation: 2
AB 2875 would codify the existing state policy known as the “no net loss of wetlands policy” that was established in 1993 by Governor Pete Wilson through an Executive Order (W-59-93). That order states, “To ensure no overall net loss and long-term net gain in the quantity, quality, and permanence of wetlands acreage and values in California in a manner that fosters creativity, stewardship, and respect for private property.” AB 2875 would codify that sentence, albeit without the qualifying ending clause regarding “creativity, stewardship, and respect for private property,” and it also would codify findings and declarations about the importance of wetlands and that California has lost 90% of its wetlands and 95% of its coastal wetlands.
According to the author, this bill is necessary in the wake of the U.S. Supreme Court’s decision in Sackett v. EPA, 143 S. Ct. 1322 (2023) that narrowed the definition of “waters of the United States” (WOTUS) and leaves many wetlands in California without protection under the federal Clean Water Act. The bill is sponsored by California Audubon and supported by many environmental advocacy organizations. Supporters have argued that this bill simply codifies a long-standing state policy that is critically important given that less than 10% of the state’s historic wetlands remain.
Importance to Valley Water
Valley Water projects, whether water supply, flood risk reduction, or environmental enhancements, frequently impact wetlands, which are broadly defined in law. Wetlands include a wide variety of land types from washes, desert playas, and ephemeral creeks, to marshes, meadows, bogs, sag ponds, vernal pools, tidal flats, and tidal marshes. Valley Water’s work to protect disadvantaged communities and critical regional infrastructure through the South San Francisco Bay Shoreline Project is a good example where the no net loss of wetlands policy may need some modification. The state should ensure that projects that enhance wetlands are not hindered to the point that fewer acres of wetlands are made resilient, resulting in even greater loss of wetlands as sea level rise fully submerges them.
The no net loss of wetlands policy, as currently applied by the San Francisco Bay Regional Water Quality Control Board (Regional Board), is a disincentive to the establishment of ecotone wetlands that often require fill and may convert a portion of the wetland to upland habitat. The Regional Board’s enforcement of the no net loss policy requires not only the creation of new wetlands to mitigate for the construction of the upland habitat portion of the ecotone, but also requires the creation of wetlands of a lower ecological function to mitigate for the conversion of lower functioning wetlands to higher functioning wetlands. This requirement increases costs and reduces the amount of ecologically beneficial ecotone habitats that can be constructed. This is an issue for the South San Francisco Bay Shoreline Project, which seeks to establish horizontal levees with a large ecotone transition zone that will provide space for wetlands to migrate upslope as sea levels rise. The dry upland habitat is also critical for providing refuge for marsh species during high tide and storm events.
Staff recommends the Board take a position of “Support if Amended” with the request that the bill accommodate the changed circumstances brought on by rising sea levels that threaten to fully submerge wetlands without enhancement through projects like the South San Francisco Bay Shoreline Project. Converting wetlands to a more climate resilient, higher ecological function should not trigger the additional costs of replacing low performing wetlands.
Pros
• Codifies the no net loss of wetlands policy to ensure that wetlands continue to be protected.
Cons
• Fails to recognize that sea level rise will fully submerge many tidal wetlands without enhancements, including constructed ecotones.
*AB 2875 (Friedman) State Wetlands Policy. (I-02/15/24)
Position Recommendation: Support if Amended
Priority Recommendation: 2
AB 2875 would codify the existing state policy known as the “no net loss of wetlands policy” that was established in 1993 by Governor Pete Wilson through an Executive Order (W-59-93). That order states, “To ensure no overall net loss and long-term net gain in the quantity, quality, and permanence of wetlands acreage and values in California in a manner that fosters creativity, stewardship, and respect for private property.” AB 2875 would codify that sentence, albeit without the qualifying ending clause regarding “creativity, stewardship, and respect for private property,” and it also would codify findings and declarations about the importance of wetlands and that California has lost 90% of its wetlands and 95% of its coastal wetlands.
According to the author, this bill is necessary in the wake of the U.S. Supreme Court’s decision in Sackett v. EPA, 143 S. Ct. 1322 (2023) that narrowed the definition of “waters of the United States” (WOTUS) and leaves many wetlands in California without protection under the federal Clean Water Act. The bill is sponsored by California Audubon and supported by many environmental advocacy organizations. Supporters have argued that this bill simply codifies a long-standing state policy that is critically important given that less than 10% of the state’s historic wetlands remain.
Importance to Valley Water
Valley Water projects, whether water supply, flood risk reduction, or environmental enhancements, frequently impact wetlands, which are broadly defined in law. Wetlands include a wide variety of land types from washes, desert playas, and ephemeral creeks, to marshes, meadows, bogs, sag ponds, vernal pools, tidal flats, and tidal marshes. Valley Water’s work to protect disadvantaged communities and critical regional infrastructure through the South San Francisco Bay Shoreline Project is a good example where the no net loss of wetlands policy may need some modification. The state should ensure that projects that enhance wetlands are not hindered to the point that fewer acres of wetlands are made resilient, resulting in even greater loss of wetlands as sea level rise fully submerges them.
The no net loss of wetlands policy, as currently applied by the San Francisco Bay Regional Water Quality Control Board (Regional Board), is a disincentive to the establishment of ecotone wetlands that often require fill and may convert a portion of the wetland to upland habitat. The Regional Board’s enforcement of the no net loss policy requires not only the creation of new wetlands to mitigate for the construction of the upland habitat portion of the ecotone, but also requires the creation of wetlands of a lower ecological function to mitigate for the conversion of lower functioning wetlands to higher functioning wetlands. This requirement increases costs and reduces the amount of ecologically beneficial ecotone habitats that can be constructed. This is an issue for the South San Francisco Bay Shoreline Project, which seeks to establish horizontal levees with a large ecotone transition zone that will provide space for wetlands to migrate upslope as sea levels rise. The dry upland habitat is also critical for providing refuge for marsh species during high tide and storm events.
Staff recommends the Board take a position of “Support if Amended” with the request that the bill accommodate the changed circumstances brought on by rising sea levels that threaten to fully submerge wetlands without enhancement through projects like the South San Francisco Bay Shoreline Project. Converting wetlands to a more climate resilient, higher ecological function should not trigger the additional costs of replacing low performing wetlands.
Pros
• Codifies the no net loss of wetlands policy to ensure that wetlands continue to be protected.
Cons
• Fails to recognize that sea level rise will fully submerge many tidal wetlands without enhancements, including constructed ecotones.
*AB 2881 (Lee) Social Housing. (I-02/15/24)
Position Recommendation: Support
Priority Recommendation: 3
AB 2881 would implement the Social Housing Act, which would create the California Housing Authority (Authority) as an independent state body to provide affordable housing and close the gap between the amount of housing being built and the regional housing needs. The Authority Board would consist of ten appointed and elected members.
The bill would require the Authority to seek to achieve revenue neutrality in pursuit of its mission, and to seek to recuperate the cost of development and operations over the life of its properties through mechanisms that maximize the number of Californians who can be housed without experiencing rent burden.
This bill would require the Authority to prioritize the development of vacant parcels and parcels near transit and would establish a process for the annual determination of required social housing units.
Under the bill, social housing would accommodate a mix of household income ranges and would provide specified protections for residents who would participate in the operation and management of the units in which they reside.
The Authority would employ two leasing models in social housing developments, referred to as the rental model and the ownership model, and would establish the characteristics of both models. Under the ownership model, the authority would extend a 99-year lease, in the form of a limited equity arrangement, to individuals who commit to a minimum 5-year term of residence and would authorize the Authority to act as a lender for residents. The bill would establish eligibility requirements for social housing residents and would provide for the selection of residents by lottery, providing that people who may have been displaced from a property as part of its development would be granted a preference for occupancy.
This bill would establish the Social Housing Revolving Loan Fund within the State Treasury to provide, upon appropriation by the Legislature, zero-interest loans for the purposes of constructing housing to accommodate a mix of household incomes.
Importance to Valley Water
Last year Valley Water supported the same language in AB 309 (Lee), which was vetoed by the Governor. AB 2881 is an attempt by Assemblymember Lee to work through the legislative process to find a solution to the issues raised by the Governor in hopes of securing a signature.
Social housing is a model of housing that seeks to avoid issues associated with public housing by being built and maintained without relying on government subsidies. Home buyers who purchase market-rate units subsidize low-income and very low-income units. Social housing also avoids the problem of concentrated poverty by creating mixed-income neighborhoods. This strategy fosters economic opportunities while preserving affordability for low-income households in the community.
Currently, Santa Clara County is experiencing an unprecedented increase in the number of unsheltered people. This is both a human and environmental tragedy that requires innovative solutions. There is an urgent and immediate need for transitional housing as well as supportive services. However, homelessness is a symptom of the housing affordability crisis that is more acute in Santa Clara County than anywhere else in the nation. Social housing has the potential to reduce the number of people becoming unsheltered by sustainably increasing the number of very low- and low-income units available.
Encampments of unsheltered people create multiple issues along creeks and streams. In addition to serious life safety concerns from dangerous fast-moving flows during and after storms, the potential for disease outbreaks, wildfire risk from campfires, and the interference with flood risk reduction infrastructure, human waste results in nutrient loading of streams, causing algal blooms that impair natural and constructed habitat for aquatic species. In 2023, Valley Water removed 1344 tons of garbage from streams, up from 931 tons in 2022.
The Regional Water Quality Control Board’s San Francisco Bay Water Quality Control Plan prohibits the discharge of rubbish, refuse, or other wastes into surface waters or any place where they will eventually be transported to surface waters. This requirement makes Valley Water one of the entities responsible for the cleanup of rubbish and for preventing other encampment wastes from entering Valley Water-controlled waterways. Valley Water’s costs for encampment trash cleanup have been rising rapidly. Since 2013, the annual cleanup costs have risen from about $500,000 per year to over $3.4 million in 2023 and $2 million in 2022.
Social housing could be part of a larger solution that helps to deliver low-income units with significantly reduced or no public subsidy after an initial public investment. Santa Clara County urgently needs the rapid construction of new, low-income units on a crisis-solving scale. Staff recommends that the Board adopt a position of “Support” on AB 2881.
Pros
• Creates housing that may be available to very low-income residents, helping to reduce the growing numbers of newly unsheltered people.
• Increasing the supply of housing has the potential to reduce rents and make housing more affordable.
Cons
• Social housing needs an initial public investment and coordination from local housing authorities.
• There currently is no funding mechanism for the creation of social housing
SB 1148 (Blakespear) Electrical Service Metering in Multifamily Dwellings and Local Government Buildings (I-02/14/24)
Position Recommendation: Support
Priority Recommendation: 3
Existing law mandates the California Public Utilities Commission to require every residential unit in an apartment, condominium, or mobile home park, permitted after July 1, 1982, to be individually metered for electrical and gas service. SB 1148 would add an exception to this requirement for multi-unit housing (MUH) facilities if the MUH receives electricity from a microgrid and meets certain requirements.
The requirements for an MUH to qualify for the exemption include that 1) the tenant’s electricity costs are less than what the tenant would have otherwise paid for the use of electricity without the deployment of the microgrid; 2) the facility electrically isolates from the distribution grid during the daily peak period; 3) the facility uses electricity generated from renewable energy resources: 4) all construction workers employed in the construction of the MUH are paid at least prevailing wage; and 5) the owner of the MUH bills residential tenants for electricity use by charging for their direct usage, incorporating cost of electricity within rent, and calculated based on total square footage for each unit.
SB 1148 also requires the California Public Utilities Commission to authorize the use of master meters in any building owned or operated by a local government.
Importance to Valley Water
Valley Water is on the frontlines of climate change adaptation, be it from intensified storms and flooding, prolonged periods of drought, more frequent low-to-no snowpack years, the increasing risk of subsidence due to reduced groundwater recharge, and sea level rise caused by a climatic warming in the polar regions of our planet. SB 1148 would enable the development of renewable energy microgrids, that may reduce greenhouse gas emissions, the cause of human induced climate change, and increase energy reliability not only for those served by the microgrid, but also the regional electric grid by reducing load during peak energy demand events.
Due to existing law, multi-unit housing facilities face barriers to energy resilience. The requirement for individual meters affects how a site can manage energy generation, demand, and how it can operate separately from the broader electricity grid. SB 1148 would allow master metering, one meter connected to the grid so energy can be managed at a property-level, as opposed to individual meters on every unit in a MUH, and would simplify the process of deploying microgrids at MUH facilities.
Microgrids can disconnect and function independently from the broader energy distribution grid by using on-site solar, storage, and microgrid controls, making them useful during power outages. In addition, properties connected to microgrids would be able to go off the grid during peak use hours, which will reduce energy bills for residents, and improve the overall reliability of the electric grid.
SB 1148 allows for an increase in energy resilient housing powered by renewable energy that will help California achieve its ambitious greenhouse gas reduction goals. Valley Water supports the increased usage of renewable energy to help mitigate the myriad of climate change impacts affecting Valley Water’s delivery of safe, clean water, flood risk reduction, and environmental stewardship of creeks and streams.
SB 1148 also allows master meters for local government owned facilities, which may reduce the cost of construction for certain local government facilities, including emergency interim housing for unsheltered people.
Staff recommends that the Board adopt a position of “Support” for SB 1148.
Pros
• Allows master metering at multi-family housing facilities which streamlines the process for deploying renewable energy microgrids that reduce greenhouse gas emissions.
• Increases energy resiliency in housing units and for the grid overall by reducing peak demand.
• May reduced construction costs for emergency interim housing and other publicly owned multi-unit housing facilities.
Cons
• Individual tenant meters are used to prevent unfair billing by landlords; and their absence may increase regulatory costs for the California Public Utilities Commission.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
There are no Environmental Justice impacts associated with this item. The Board’s position does not enact the legislation discussed above. If the enactment of state legislation necessitates an action by the Board, any associated Environmental Justice impacts will be assessed when the Board considers the action.
FINANCIAL IMPACT:
There is no financial impact associated with this item.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
*Original Board Agenda Memo
*Supplemental Board Agenda Memo
UNCLASSIFIED MANAGER:
Manager
Marta Lugo, 408-630-2237