ACWA Voices Concerns with Water Bond Package

Support withheld over new water fee, other provisions as proposed

The Association of California Water Agencies (ACWA) credited the Schwarzenegger Administration for advancing a bold infrastructure and water resources plan for the state, but said concerns with a proposed new fee on water users are preventing the association from supporting the Water Resources Investment Fund in the governor's water infrastructure financing package.

Testifying before the Senate Committee on Natural Resources and Water, ACWA State Legislative Director Ronald L. Davis said that while association members support much of the water bond package, the proposed fee on water users to help fund integrated regional water management programs around the state has raised a number of questions and concerns that must be addressed to remove ACWA's opposition.

Concerns include the lack of a sunset for the fee, the potential for funds generated by the fee to be redirected for other purposes, problems collecting the fee if it is construed as a tax and therefore subject to Proposition 218 requirements, and the proposed method by which the California Water Commission could raise the fee.

Earlier in the hearing, Department of Water Resources Director Lester Snow indicated that a number of changes to the fee proposal are being considered in response to concerns. Davis told committee members that ACWA would review the changes and work with the administration to seek clarification and remove or modify objectionable provisions.

As currently structured, the fee would be imposed on local water suppliers, and they could choose to collect it from their customers for payment into a state fund. Money generated by the fee -- estimated at about $5 billion over 10 years -- would be split between a statewide investment account and regional investment accounts. The regional accounts would help fund integrated regional water management programs that meet specific requirements.

In his testimony, Davis said it is not clear that a fee is needed to spur investments in regional integrated water management activities. He noted that local water agencies already are investing an estimated $2.5 billion annually in local and regional infrastructure and programs.

If the legislature ultimately determines a fee of some kind is needed to fund water resources projects or programs, Davis said it is critical that the fee provide direct, measurable benefits to water rate payers. He encouraged committee members to review a set of policy principles adopted by ACWA's Board of Directors that specify that no broad water user fees should be imposed to finance water infrastructure programs without clearly defined benefits to users.

Davis noted that ACWA is committed to working with the legislature and the administration to make refinements needed to move forward with a water planning and financing package that the water community can support.

Association of California Water Agencies

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