BOARD AGENDA MEMORANDUM
SUBJECT:Title
Adopt Recommended Positions on State Legislation: AB 30 (Ward) Atmospheric Rivers: Research, Mitigation, and Climate Forecasting Program, *AB 400 (Blanca, Rubio) Local Agency Design-Build Projects: Authorization, SB 23 (Caballero) Expedited Permitting for Water Supply and Flood Risk Reduction Projects, *SB 532 (Wiener) Ballot Measures: Local Taxes and Other Legislation Which May Require Urgent Consideration for a Position by the Board.
End
RECOMMENDATION:Recommendation
A. Adopt a position of “Support” on: AB 30 (Ward) Atmospheric Rivers: Research, Mitigation, and Climate Forecasting Program;
B. *Adopt a Position of “Support” on: AB 400 (Blanca, Rubio) Local agency design-build projects: authorization;
C. Adopt a position of “Support” on: SB 23 (Caballero) Expedited Permitting for Water Supply and Flood Risk Reduction Projects; and
D. *Adopt a position of “Support” on: SB 532 (Wiener) Ballot measures: local taxes.
Body
SUMMARY:
AB 30 (Ward) Atmospheric Rivers: Research, Mitigation, and Climate Forecasting Program (I-12/05/22)
Position Recommendation: Support
Priority Recommendation: 3
SB 758 (Block, 2015) established the Atmospheric Rivers: Research, Mitigation, and Climate Forecasting Program (Program) in the Department of Water Resources (DWR). The law requires DWR, upon an appropriation of funding, to research climate forecasting and the causes and impacts that climate change has on atmospheric rivers, and to use its existing authority to operate reservoirs in a manner that improves flood protection, and to re-operate flood control and water storage facilities to capture water generated by atmospheric rivers. DWR has implemented the Program.
AB 30 (Ward) would delete provisions of the Water Code that make the operation of the Program contingent upon the legislative appropriation of special fund moneys, and instead would simply require DWR to operate the Program as part of their annual department budget. The bill also would rename the Program the Atmospheric Rivers Research and Forecast Improvement Program: Enabling Climate Adaptation Through Forecast-Informed Reservoir Operations and Hazard Resiliency (AR/FIRO) Program.
Importance to the Valley Water
California has the most variable annual precipitation of any region in the U.S., ranging from severe drought to major floods. Research has shown that this variability is largely due to a weather condition known as “atmospheric rivers” which are responsible for 30-50 percent of California’s precipitation and water supply delivered in just a handful of days each year. An atmospheric river storm is commonly called a “pineapple express” because it brings tropical moisture to the western U.S. In December and January of this year California experienced a significant number of atmospheric rivers that brought high winds, precipitation, and flooding throughout the state. The Program allowed water managers to make timely decisions to release water from reservoirs for enhanced flood protection and to more accurately notify the public of potential floods.
Better forecasting of atmospheric rivers across hours, days, weeks, and seasons has the potential to improve both water supply and flood protection using “Forecast-Informed Reservoir Operations” (FIRO). Through the expansion of FIRO, and the accuracy in forecasting that it provides, reservoir operators can release water ahead of storms that could otherwise cause flooding with less concern regarding the loss of water supply needed in the summer months. Better forecast accuracy also helps reduce unnecessary releases of water.
Valley Water staff are currently exploring the use of FIRO precipitation projections on a pilot study basis in the operation of Lexington Reservoir in order to create additional flood storage space before forecasted rain events that may pose a flood danger by reducing releases of water called for in the current reservoir operation. The water that remains in the reservoir, that would have otherwise been released, can then be used at a later time to beneficially recharge the groundwater aquifer, support a larger cold-water pool for fish species, and support ecological habitat in streams throughout the dry periods in the spring, summer, and fall.
Staff recommends that the Board adopt a position of “Support” for AB 30.
Pros
• Requires DWR to operate the Program, removing the need for an annual advocacy effort for the continued operation of the Program.
• The continued improvement of atmospheric river forecasting allows for better informed water management decisions, both to collect additional water supply and to enhance flood protection.
Cons
• None identified at this time.
*AB 400 (Blanca, Rubio) Local agency design-build projects: authorization. (I-02/02/23)
Position Recommendation: Support
Priority Recommendation: 3
AB 400 would remove the January 1, 2025, repeal date for the existing law authorizing local agencies, to use the design-build procurement process for specified types of projects, thereby making these provisions operative indefinitely.
Existing law, includes several requirements for the design-build procurement process, including specified information submitted by a design-build entity to be certified under penalty of perjury. The authority for Valley Water to use design-build is part of the chapter in Public Contract Code 22162.5 that would be repealed if the January 1, 2025 sunset date is not removed or extended.
Importance to Valley Water
Design-build is one of several methods of project delivery that are available to an entity seeking to design and construct a building or other infrastructure. Using design-build, a single entity is contracted both to design and construct the project. Design-build can provide benefits for project owners because a single unified team is responsible for the successful completion of the project, avoiding mistakes or miscommunications between the designer and the builder. With only one contract to award and manage, the project owner saves money, achieves faster project completion, and reduces their liability for project failures.
Valley Water manages an integrated water resources system that includes the supply of clean, safe water, flood protection and stewardship of streams on behalf of Santa Clara County's nearly 1.9 million residents. Valley Water expanded the authority to use design-build with the passage of AB 851 (Caballero-Gloria) which authorized Valley Water to procure design-build contracts through January 1, 2025 for the following types of public works projects that exceed $1 million:
• Flood protection improvements
• Habitat restoration or enhancement
• Groundwater recharge or storage facilities
• Water treatment facilities
• The retrofit, repair, or expansion of existing surface water storage facilities
AB 400 will remove the sunset date for design-build authority for public agencies, including the Valley Water authority.
Staff recommends a position of “support” on AB 400.
Pros
• Indefinitely extends the authority for public agencies to use design-build.
• Saves public agency funding as the use of design-build is typically a more streamlined process.
Cons
• None at this time.
SB 23 (Caballero) Expedited Permitting for Water Supply and Flood Risk Reduction Projects (I-12/05/22)
Position Recommendation: Support
Priority Recommendation: 1
SB 23 is sponsored by the Association of California Water Agencies (ACWA) at the request of Valley Water, as approved by the Valley Water Board on October 25, 2022. The bill contains numerous provisions seeking to increase the efficiency of the regulatory permitting process for water supply and flood risk reduction projects, without exemption from any environmental protections. The qualifying projects under the bill include the following.
1. “Flood risk reduction projects,” which include a project or plan that is proposed by a public agency or a public utility, to construct, alter, retrofit, maintain, manage, or improve a facility, channel, levee, or flood control modification, in which flood risk reduction or sea level rise protection is an objective of the project.
2. “Water Supply Project,” which includes a project or plan proposed by a public agency or a public utility, to construct, alter, retrofit, maintain, manage, or improve a groundwater recharge, desalination, recycled water, water conveyance, surface water storage, stormwater capture, or water treatment facility.
Mitigation Measures for Water Quality Certifications
Watershed scale planning of environmental restoration and habitat enhancements has been identified as the most beneficial approach for species and has been advocated by fish and wildlife agencies and advocates. The use of Watershed Plans has been adopted by the State Water Board but has not been implemented in practice. For project applicants, Watershed Plans amount to “plug and play” mitigation strategies that reduce permit negotiation times and the costs associated with project delay. For the environment, it helps ensure mitigation dollars are spent where they provide the most benefit to the impacted species.
SB 23 would require the State Water Board and Regional Water Boards to accept a Watershed Plan for the purposes of issuing a Section 401 Water Quality Certification. The bill would require the water boards to use the following types of approved plans as Watershed Plans for purposes of implementing the Procedures for Discharges of Dredged or Fill Material to Waters of the State (Procedures) in issuing project certifications:
1. Habitat Conservation Plans that include biological goals for aquatic resources;
2. Natural Communities Conservation Plans that include biological goals for aquatic resources; and,
3. Habitat Management Plans that include biological goals for aquatic resources.
Unless the water board issuing a project certification determines in writing that a plan does not substantially meet the definition of a Watershed Plan, the bill would require the water board to accept, as terms of the project certification, avoidance, minimization, and compensatory mitigation for impacts to waters of the state provided through compliance with any Watershed Plan, so long as the public entity administering the plan identifies, tracks, and publicly reports the impacts to waters of the state and the manner in which they are addressed by such avoidance, minimization, and compensatory mitigation. To ensure mitigation investments stay focused where they are most beneficial to species, the bill would prohibit the water boards from imposing any additional project certification terms and conditions mandating avoidance, minimization, or compensatory mitigation for impacts to waters of the state beyond those in an approved Watershed Plan.
Lake and Streambed Alteration Agreements
SB 23 would require the California Department of Fish and Wildlife (CDFW) to issue a final Lake and Streambed Alteration Agreement (LSAA) within 180 days of receipt of a notification from a project proponent for water supply and flood risk reduction projects, provided that:
1. CDFW determines that the project will substantially adversely affect an existing fish and wildlife resource;
2. The project proponent submits a complete notification for the project; and
3. The project proponent submits environmental documentation required by the California Environmental Quality Act (CEQA).
The final LSAA would include any reasonable measures mutually agreed to by the project proponent and CDFW in accordance with existing law. If CDFW and the project proponent are not able to reach a final agreement on all measures, then the project proponent may proceed in accordance with a final agreement issued by an arbitration panel pursuant to existing law, including reasonable measures necessary to protect the existing fish and wildlife resources substantially adversely affected by the project. The bill would allow CDFW and the project proponent to mutually agree to an extension of the 180-day period for issuance of a final agreement if needed. A deadline for the conclusion of negotiations proposed by the bill is believed would motivate the parties to a more expeditious issuance of the final agreement.
Section 401 Water Quality Certifications
The bill would create a new optional State Water Resources Control Board (State Water Board) and Regional Water Quality Control Board (Regional Water Board) process for securing a federal Clean Water Act Section 401 Water Quality Certification for flood risk reduction and water supply projects. The optional process would require the applicable water board to issue project certification within 180 days after a project proponent completes the following:
1. Requests pre-application consultation;
2. Files a complete application for project certification;
3. If required for the project, files a complete application or petition for all water rights approvals or amendments necessary to implement the project; and
4. Submits environmental documentation required by CEQA.
The bill would establish a process for a water board’s determination of application completeness, including an option to appeal to the State Water Board a determination regarding application completeness. Following any State Water Board appeal determination, the bill would allow the option for the project proponent to challenge the determination of completeness in court. Determinations of application completeness have been a major source of permitting delay, often because there is no clear process or statutory limit on how long the process may take.
Reporting Requirements
SB 23 would require, beginning on January 1, 2025, and annually thereafter, the water boards to prepare a public report for the relevant legislative policy and budget committees regarding the implementation and outcome of the bill’s requirements.
Supplemental Consultation
This bill would authorize a state agency with the authority to permit a water supply or flood risk reduction project to do any of the following.
1. Enter into an agreement with a project proponent to recover costs for actions authorized by this section to expedite the review of environmental documents and review processing and issuances of project certifications, and other authorizations, permits, and approvals for water supply projects and flood risk reduction projects with the goal of completing permit review and approval in an expeditious manner.
2. Hire or compensate staff or contract for services needed to achieve these goals.
3. Work collaboratively with project proponents and other agencies with jurisdiction over the water supply project or flood risk reduction project to implement an integrated regulatory approach, similar to efforts implemented by the state permitting agencies for projects funded by the San Francisco Bay Area Measure AA, the San Francisco Bay Clean Water, Pollution Prevention and Habitat Restoration Program.
By creating an expanded opportunity for supplemental consultation with a permitting agency before and during the permitting process, it is believed that late-in-the-process surprises in mitigation requirements may be avoided, thereby averting costly project redesign and further delay.
Importance to Valley Water
As climate change extends the length and frequency of drought and the intensity of storms, communities across California are faced with difficult decisions regarding water supply, water use, and flood risk reduction. Changes in climate are necessitating critical adaptation of water supply and flood risk reduction infrastructure. State and local agencies are in a race against rapidly changing hydrology to build new projects or retrofit existing infrastructure, including water conveyance and treatment, recycled water, desalination, stormwater capture, surface and groundwater storage, sea level rise, and levee projects.
The Governor’s Water Supply Strategy, released last August, identified permitting delays as one of the key issues to be addressed for all types of water supply projects. As such, there is a unique opportunity to achieve permit streamlining that has so far eluded water and flood risk reduction agencies. The timely delivery of critical water supply and flood risk reduction projects depends on whether project applicants and state and federal agencies can find a way to expedite project permitting, including pre-application consultation, environmental document review, and permit application and approval.
Even after environmental documentation is completed, project permitting is mired in delays caused by overlapping jurisdictions of state and federal agencies, agency culture and staffing issues, and a lack of urgency for projects racing against the accelerating impacts of climate change. State permitting agencies have in recent years been under-resourced and statutory permitting deadlines are often missed, particularly for large projects. The permitting delays lead to costs increases in the tens of millions or more for large projects.
Because of the high cost of permitting delay for project applicants, Valley Water has been at the forefront of permit streamlining efforts for many years. The urgency of the climate crisis has increased the need for expedited permitting. There is now a unique opportunity to work with the Legislature and the Newsom Administration to address issues that cause permitting delays for water supply and flood risk reduction projects, without compromising on environmental protection.
Staff recommends that the Board adopt a position of “Support” for SB 23.
Pros
• Would improve species habitat mitigation outcomes through the use Watershed Plans that allow for mitigation investments at the best available sites for species recovery and resilience.
• Would expedite state permitting of water supply and flood protection projects.
• Would save public agencies and public utilities significant costs by averting delays on projects, including Valley Water projects in which delay can amount to tens of millions of dollars per year.
Cons
• The complexity of the environmental permitting process makes changes difficult even when the changes improve environmental outcomes for species, save public funding, and accelerate adaptation to a rapidly changing climate.
*SB 532 (Wiener) Ballot Measures: Local Taxes
Position Recommendation: Support
Priority Recommendation: 3
SB 532 would permit the proponents of a local initiative measure, or a local jurisdiction submitting a local ballot measure, that imposes or increases a tax with more than one rate, or authorizes the issuance of bonds, to choose to include in the ballot label either the estimate of the amount of money to be raised annually and the rate and duration of the tax levied in accordance with existing law or the phrase "See voter guide for measure information statement.”
In the event that the local jurisdiction includes the statement “See voter guide for measure information statement”, the bill requires the following information to be included in the tax rate statement mailed to voters:
(1) A concise description of the purpose of the tax proposed, including how the bond proceeds or tax revenue will be spent to benefit the community.
(2) If the measure imposes a tax expected to have more than one tax rate, a list of all the tax rates that are expected to apply and a description of how the tax will be imposed.
(3) A plain language description of any mechanism that would cause the tax rate or rates to vary over time.
(4) An explanation of the duration of the tax stating whether the tax expires on a specific date, expires upon final payment of indebtedness, does not expire until further action by the voters or the local governing body, or expires as the result of some other action or occurrence.
(5) Except if the information specified in paragraph (6) of this subdivision is included, the best estimate from official sources of the average annual dollar amount of taxes that would be collected during the ten-year period following the initial levy.
(6) If the tax measure would authorize the issuance of bonds, the security for which constitutes a lien on the property for ad valorem taxes within the jurisdiction, all the disclosures required by Section 9401.
Impact to Valley Water
California Elections Code Section 13119 proscribes how a measure, proposed by a local governing body or submitted to the voters as an initiative or referendum measure, poses a ballot question to voters. Beginning in 2015, with the enactment of AB 809 authored by Assembly Member Jay Obernolte (R-Big Bear Lake), the code section has been amended with the intent of increasing transparency to voters by requiring that a measure that imposes or increases a tax shall include in the ballot label language “the amount of money raised annually and the rate and duration of the tax to be levied.” Subsequent amendments by AB 195 (Obernolte, 2017) further clarified that this section of law also applies to a measure authorizing the issuance of bonds or the incurrence of debt.
While these changes to Elections Code 13119 may have been well intended, they have severely limited the ability of local entities, including schools, cities, counties, special districts, hospitals, and libraries, to pass local general obligation bonds for critical infrastructure projects or to enact tiered or progressive tax rates. Further complicating compliance for local agencies is the long-standing limit of 75 words or less in Elections Code Section 9051, which applies to ballot label language for all local measures. This limit is intended to keep ballot labels clear and concise and to facilitate the efficient administration of elections. When paired with the new requirements in Elections Code Section 13119, it is very difficult, if not impossible, to state all the rates of a tiered or progressive tax structure, thereby forcing local agencies to take simpler flat rate approaches to local taxation. Those flat rate approaches favor large property owners and the wealthy, while applying a higher tax burden on the owners of smaller properties and low income communities.
For bond measures, ballot label language that complies with Elections Code Section 13119 is confusing and misleading to voters. The interest rate for bonds issued in multiple series under one authorization approved by the voters may fluctuate significantly over time. Attempting to comply with the new law, local agencies are forced to insert rates into their ballot label language that are averages, projections, or statutory maximums that may not be charged in any given year. Also, the timing of individual bond borrowing can occur over a period of many years due to economic conditions, lengthy project permitting, construction delays, and changes in local priorities. These over-simplified ballot labels do not make sense in the context of bonds and ultimately mislead voters.
The required statements for tiered tax rate measures, bond measures, or measures combining a tax and bonds, may consume most of the 75 words of the ballot label language leaving few, if any, words to describe how taxes or bond proceeds will be spent in the community. Additionally, placing averages, projections, or maximums in the ballot label language may create legal issues, such as a cap on the rate, duration, and amount raised annually. De facto caps make it difficult for local agencies to access the full amount authorized by voters and may create credit concerns with bond investors.
Remarkably, AB 809 and AB 195 were enacted with broad bipartisan support and with no registered opposition. In 2018, some public agencies began to realize the difficulties in complying with the new law, and there was an effort to suspend the bond related provisions of the Elections Code statute through budget trailer bill language. However, that effort failed. In 2019, a coalition of cities, counties, special districts, school districts, and other local agencies, as well as labor organizations, formed to find a solution to the problems created by Elections Code Section 13119.
In November 2020, voters in Santa Clara County overwhelmingly approved Measure S, a renewal of Valley Water’s Safe, Clean Water and Natural Flood Protection Program. The program was first passed by voters in 2000 as the Clean, Safe Creeks and Natural Flood Protection Plan, then again in 2012 as the Safe, Clean Water and Natural Flood Protection Program. The measure includes a separate tax rate per unit of area that is applied to each of five different land use categories, ranging from vacant undisturbed land (which is taxed at the lowest rate) to commercial/industrial (which is taxed at the highest rate). These tiered tax rates also included a cap for single-family residential parcels to keep taxes low for homeowners, and preferential rates to support the preservation of agricultural lands. Measure S is the type of bond measure that SB 532 intends to address.
Elections Code Section 13119 forces the complexities of modern, progressive taxation, that can be fully and concisely explained in the voter information guide, to be precisely explained in 75 words or less on the ballot itself, or else face potential legal challenge. The bond investor concerns likely will result in less favorable rates for borrowing, increasing costs for taxpayers, and reducing the public benefits delivered from special tax proceeds.
Staff recommends that the Board take a position of support on SB 532.
Pros
• Would enable the continued enactment of special taxes such as the Measure S parcel tax and bond authorization that supports Valley Water’s Safe, Clean Water and Natural Flood Protection Program in a fair and equitable manner.
• Would address problematic ballot language requirements that force the misrepresentation to voters of the actual cost, rate, and timing of a tax and bond issuances through averages, projections, or maximums that may not be charged in any given year.
• Would enable the continuation of tiered, progressive taxation that doesn’t unfairly burden the owners of smaller properties and low-income communities.
• Would reduce the cost of borrowing by allowing the continued timely issuance of bonds as they are needed for public infrastructure costs.
Cons
• The issue can be construed, incorrectly, as an attempt to decrease transparency.
ENVIRONMENTAL JUSTICE 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 legislation necessitates an action by the Board with associated Environmental Justice impacts, those impacts will be assessed when the Board takes 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
Rachael Gibson, 408-630-2884