IN THIS ISSUE –  “Costly and Bruising”

STATE BUDGET SURPRISES

  • California’s Rainy Day Fund May Overflow…Save, Spend or Refund?
  • Unprecedented $110 Million to Dismantle Oil Islands in State Budget

ELECTION 2018

  • Newsom Dominates Gubernatorial Fund-Raising
  • “Costly and Bruising” Rent Control Initiative Campaign Looms

WATER

  • Snow Joke: Drought Returns to 44% of California
  • Major Water Storage Projects Score Low in Competition for $2.7 Billion in Bond Funds
  • “Carpetbaggers from Beverly Hills” Put Private Brand on Central Valley Agriculture…And Water

Capital News & Notes (CN&N) harvests California legislative and regulatory insights from dozens of media and official sources for the past week, tailored to your business and advocacy interests.  Please feel free to forward. 

Ideas and inquiries are welcome: bob_gore@gualcogroup.com

Stay current daily!  For our focused updates via Twitter: @jrgualco / @robertjgore / @gualcogroup

FOR THE WEEK ENDING FEB. 2, 2018, READ ALL ABOUT IT!!

 

California’s Rainy Day Fund May Overflow…Save, Spend or Refund?

California’s swelling budget reserves are approaching a point where the state by law can’t save any more money ‑ but don’t expect a tax rebate.

The state is quickly filling up its so-called rainy day fund, the budget stabilization account voters created in 2014 when they passed an initiative that forced lawmakers to save money in flush years. Gov. Jerry Brown’s budget proposal puts the state on pace to fill it with $13.5 billion by July 1, 2019, but the milestone could come even sooner.

By law, the fund can only hold 10 percent of the state’s projected general fund revenue as a hedge against the cuts that would come in a recession. Any additional revenue has to be spent on infrastructure.

If the revenue keeps pouring in, Legislative Analyst Mac Taylor told senators earlier this month they’ll have a lot of options. The money “will be there for you do whatever you want to do with it, build reserves, tax cut, whatever you want to do.”

But, in one of those only-in-California budget formulas, filling the rainy day fund presents a different kind of problem for legislators.

If they want to use the windfall of today’s booming economy for other priorities, like paying down debt, they’d have to actually spend money before filling the rainy day fund. Otherwise, the additional revenue would have to be spent on infrastructure like roads and prison repairs.

That’s right, California lawmakers might have to spend money to save it.

Here are some of the ideas they’re floating now to make the most of the surplus:

Sen. Jim Nielsen, R-Tehama, remembers the one “glorious time” in the 1980s when California saw a spike in state tax revenue and delivered rebates to taxpayers.

Technically, that could happen again, but don’t hold your breath.

A 1979 ballot initiative that became known as the Gann limit compels state government to return money to taxpayers if state spending exceeds certain thresholds.

Last year, the Legislative Analyst’s Office warned that rising revenue put the Gann limit within reach for the first time in decades. Brown’s office disagreed, and you didn’t get that check.

Nielsen, the top Republican on the Senate Budget Committee, said he’d advocate for some kind of rebate even though he knows it’s unlikely.

“Am I confident about the prospect? No, the temptation to spend money is vastly too great.”

Lawmakers from both parties back Brown’s pledge to fill the rainy day fund. They’re thankful that the extra money buys them some insurance if a recession hits and cripples state tax revenue.

California’s state budget is especially vulnerable to recessions because its collection of personal income tax leans heavily on high-earners whose income from capital gains can nose dive in a downturn.

But some wonder whether a rainy day fund that holds 10 percent of one year’s revenue is enough. Past recessions, for example, have slashed revenues by 20 percent. Brown’s own budget suggested that a recession could take a $20 billion bite out of the general fund in its first year.

That history has some lawmakers suggesting that the state might need a bigger savings account. They’d have to put an initiative before voters to raise the cap.

“We can say with certainty (a recession) will come. It’s wise to remember that our state revenue is extremely volatile,” said Assemblyman Jay Obernolte, R-Hesperia, the senior Republican on the Assembly Budget Committee.

Other choices, Taylor told lawmakers in January, include setting aside more money in the state’s emergency fund – the account that pays for unexpected disasters like wildfires – or prepaying known expenses to relieve pressure later.

California’s main public pension funds are riding the soaring stock market to banner years. The California Public Employees’ Retirement System has gained almost $40 billion since July 1, and the California State Teachers’ Retirement System is up at least $20 billion.

But both systems owe tens of billions of dollars more than they have on hand. Brown’s budget estimated the state has more than $270 billion in debt related to its pension funds and promises it has made to pay for the health care state workers receive in retirement.

“We’ve got to get our balance sheet in better shape,” said Sen. John Moorlach, R-Costa Mesa, referring to the pension debts and the state’s bond debts.

CalPERS and CalSTRS have handed a series of fee increases local governments and school districts since the recession a decade ago to get a better handle on the debts and to fund pensions. Some government agencies say they can’t afford to pay more and they’re worried about how the rate hikes will affect their services if a recession hits.

“The state is taking away more than it is giving primarily by way of the ramping of the CalSTRS pension schedule,” said Democratic Assemblyman Al Muratsuchi, a former Torrance school board member. “There is such a disconnect between the prevailing narrative here in Sacramento and what the districts are reporting at the local level.”

He wants to fill the rainy day fund, but he said he’s looking for ways to provide some pension relief to school districts.

California has no shortage of deferred maintenance and capital construction projects, from bumpy roads to aging prisons. The Legislative Analyst’s Office two years ago estimated the total bill for those delayed projects topped $77 billion.

That’s why some lawmakers would be happy to see the surplus work as voters intended when they created the rainy day fund four years ago, by first filling up a savings account and then putting money into capital projects.

“We have done a terrible job at investing infrastructure lately in California,” Obernolte said.

Lawmakers might choose to go in another direction, perhaps by following through on pledges to extend health care coverage to undocumented immigrants, extending tax credits to lower-income residents, expanding access to preschool or by setting aside money to spur more affordable housing projects.

“The state is doing well. We are a great strong economy, we have the lowest unemployment in forever,” said Nancy Skinner, D-Berkeley, at a January hearing. “And yet … in most of our communities we both see the benefits the strength of the economy has given, but also areas where it has not,” she said, describing proliferating homeless encampments.

She suggested putting $4 billion of the surplus into affordable housing.

Taylor, the legislative analyst, said the state would have a better sense of its financial standing by May. His office in November projected that the state would exceed its revenue expectations over the next 18 months by $3.5 billion. He told senators last month that if he had to update the number, he’d expect that his office would revise its revenue projections upward.

“It’s important to take a moment to enjoy these times budgetarily speaking. They don’t get much better than this,” he said a Senate Budget Committee hearing.

http://www.sacbee.com/news/politics-government/capitol-alert/article197715684.html?#emlnl=BreakingCapitolState_Alert#storylink=cpy

 

Unprecedented $110 Million to Dismantle Oil Islands in State Budget

State lawmakers are considering an unprecedented request to spend more than $100 million in taxpayer money to dismantle two offshore oil-drilling facilities—a platform connected to the ruptured pipeline and a man-made island in nearby Ventura County—because the oil companies that were leasing the sites went bankrupt last year.

“Just because they decided to walk away doesn’t mean that we can walk away,” said state Sen. Hannah-Beth Jackson, a Democrat from Santa Barbara.

“So right now the state is holding the bag.”

It’s too soon to say if the situation is an aberration or a sign of things to come. California has a long history as a major oil-producing state but has more recently embraced environmental policies that require a shift away from petroleum. The Southern California coast is dotted with 31 oil platforms and artificial islands, some of which date back to the 1950s and are in poor condition. The state expects many to be decommissioned in the coming decades as they reach the end of their productive lives.

Oil companies accept responsibility to plug wells and return the ocean to its natural state when they enter into leases with the state to drill. The current proposal for taxpayers to foot the bill illustrates what happens when the companies can’t do it.

State officials are asking for $50.5 million to plug and abandon wells at Rincon Island in Ventura County, whose owner declared bankruptcy after being charged with numerous safety violations and a state of disrepair. And they are seeking $58 million to shutter the rig known as Platform Holly in Santa Barbara County, which has been idle since the pipeline owned by Plains All American Pipeline ruptured in 2015 and then shut down, leading Venoco, the company that was leasing the platform, to go bankrupt. In both cases, those costs would cover just the first phase of dismantling—the projects would require more money for the decommissioning stage, likely beginning in 2020.

California is staring at the enormous cost of shuttering these rigs as the federal government proposes expanding offshore drilling. It’s an epic philosophical clash: The Democratic-led state government has advanced policies to promote clean energy and reduce the use of petroleum, including a ban on new leases to drill in state waters. On the other hand, the Republican administration of President Donald Trump has embraced the fossil fuel economy and begun the process of opening the U.S. coastline to oil and gas drilling in federal waters.

The federal government is holding public meetings in each state where it seeks to expand offshore drilling. California’s will be Feb. 8 in Sacramento.

The state controls waters for the first three miles from the coast. While it can’t control what happens in federal waters beyond that, it can thwart expansion there by making it difficult to transport oil through the state waters that lead to the shore.

For environmentalists, the newly revealed state cost of decommissioning oil platforms when the responsible companies go bankrupt is reason to be wary.

“It’s the most clear example of the cost that is passed on to taxpayers,” said Marce Gutierrez-Graudins, director of Azul, a San Francisco-based ocean conservation advocacy group. “This is a very direct line of how an oil spill is literally costing us, still, years later.”

The request for public funds to close up the drilling sites is laid out in a 10-page document from California’s State Lands Commission, the state agency charged with managing oil and gas resources. It describes potentially dire consequences of leaving the facilities in the ocean: “Failure to secure and properly plug and abandon the… wells could result in significant harms to public health and safety, and damage to the marine and coastal environment.”

The deteriorating rigs could cause oil spills or emit lethal levels of poisonous gas, the document says—creating a massive financial and legal risk because the state government would be liable.

“It is vital to take immediate steps to mitigate the potential harms from the facilities,” the State Lands Commission argues.

The money requested—$108.5 million over three years—is a small fraction of the $190 billion state budget Gov. Jerry Brown has proposed for new fiscal year. Still, it’s nearly as much as the state spends to educate 10,000 school children for a year.

“This is serious stuff. That’s why we’ve requested these dollars from the state—not because we don’t think they’d be better used for other purposes, but because we have to,” Lt. Gov. Gavin Newsom, who chairs the State Lands Commission, said in an interview.

“In the absence of those investments, the spill costs and the cleanup costs would be so staggering.”

the state will eventually get reimbursed. It’s seeking payment through bankruptcy court from Venoco, the company that leased Platform Holly most recently, and also pursuing reimbursement from ExxonMobil, which leased the platform until 1997.

Venoco declined, through a spokesman, to comment. ExxonMobil disputes how much responsibility it bears, but a company spokeswoman said it “will continue to work closely” with California officials.

“The final determination of liability and financial responsibility has yet to be settled,” spokeswoman Julie King said by email.

State officials are also seeking to recover some of the costs from a bond Venoco secured as part of its lease. But the bond is worth just $22 million—a fraction of the cost to decommission the platform.

By contrast, when the United States government leases land for oil drilling in federal water, it requires a level of bonding that covers the cost of decommissioning, said John Romero, a spokesman for the federal Bureau of Ocean Energy Management.

Venoco was leasing two platforms in federal water off California at the time it went bankrupt last year. Since then the federal government has required Chevron, which previously held the leases to the platforms, to take over responsibility for decommissioning them.

“There was absolutely no burden to the taxpayer on this,” Romero said.

Newsom said he’s realized that the State Lands Commission needs to require bigger bonds on oil leases. Many of the bonds were set decades ago and never updated. Now the commission is working to re-negotiate bond levels on other leases.

“Our eyes were not wide open in terms of assessing the true cost of shutting these things down when we originally bonded these leases, and as a consequence these costs are astronomical,” Newsom said. “We are definitely increasing these bonds and making sure we don’t make these mistakes.”

https://calmatters.org/articles/california-taxpayers-foot-bill-shutter-old-oil-rigs-pacific/

 

Newsom Dominates Gubernatorial Fund-Raising

Gavin Newsom remains the dominant front-runner in fundraising in the California gubernatorial campaign, reporting nearly $16.7 million in cash on hand as the year started, according to disclosure documents filed with the state on Wednesday.

That’s more than all his gubernatorial rivals combined, and it’s a notable shift for a candidate who dropped out of the 2010 governor’s race in part because he was a lackluster fundraiser.

Newsom’s cash-on-hand figure is more than double what his nearest Democratic rivals – state Treasurer John Chiang and former Los Angeles Mayor Antonio Villaraigosa – each have in the bank, according to filings at the California secretary of state’s office.

Villaraigosa had more than $5.9 million in the bank at the beginning of the year for his gubernatorial bid, lagging far behind top Democratic rival Lt. Gov. Gavin Newsom.

Villaraigosa raised $4.4 million in 2017 and spent more than a quarter of that on his campaign, according to a summary of the campaign finance report he filed with the California secretary of state.

“We set out to make this a two-person race, and we have accomplished that by dramatically increasing our support in the polls, raising over $7 million and laying the foundation for a winning people-powered campaign. We are on track to advance to the general election and win in November,” Villaraigosa campaign spokesman Luis Vizcaino said in a statement.

Chiang spent nearly every dollar he raised during the last six months of 2017, according to a campaign financial disclosure statement filed with the California secretary of state’s office.

Chiang, the state’s treasurer, raised $1.3 million and spent $1,264,602 during this reporting period, according to the filing.

It’s a dramatic uptick in spending since he entered the race in mid-2016, and it occurred just before a campaign shake-up intended to reboot a candidacy that has been lagging in the polls.

Overall, Chiang has raised nearly $8.2 million for his gubernatorial bid and entered 2018 with nearly $5.8 million in the bank and $20,283 in unpaid bills.

http://www.latimes.com/politics/essential/la-pol-ca-essential-politics-updates-gavin-newsom-has-more-cash-on-hand-than-1517455921-htmlstory.html

 

“Costly and Bruising” Rent Control Initiative Campaign Looms

A costly and potentially bruising campaign is taking shape over rent control in California, with deep-pocketed Los Angeles activist Michael Weinstein bankrolling a proposed November ballot initiative to repeal a state law that sets tight limits on the type of housing covered under local rent control laws.

“Nobody’s fighting for the tenant,” said Weinstein, president of AIDS Healthcare Foundation, who partly funded the Proposition 61, the 2016 fight over prescription drug costs that became the most expensive initiative that year, with total spending at roughly $130 million.

As California confronts a historic housing crisis, low- and middle-income renters are being pushed out, even in cities with some form of rent control.

The disruption is fueling the push by Weinstein and other tenants rights’ activists to overturn a state law that prevents cities and counties from adopting strong rent control laws.

Proponents say they have been met with enthusiasm this year while gathering signatures for a proposed November ballot initiative that would repeal the 1995 Costa-Hawkins Rental Housing Act, which says rent control cannot apply to large amounts of housing, including all housing built after 1995, single-family homes, condos and duplexes. If the proposed initiative is successful, efforts by local communities to strengthen existing rent control ordinances and pass new laws could drastically alter the housing market across California.

“People are excited,” said Anya Svanoe, a spokeswoman for the Alliance of Californians for Community Empowerment, also behind the campaign. “This is the easiest signature-gathering we’ve ever done. It’s telling … People are hungry for rent control and … to see solutions to the housing crisis that can provide immediate relief to themselves and their neighbors.”

Critics, including the California Apartment Association, believe repeal would lead to “extreme versions” of rent control throughout the state, bringing new housing construction to a standstill.

“It’s a disincentive for the construction of new, multifamily housing,” said Tom Bannon, CEO for the apartment association, a group representing landlords, investors and developers. His argument – that rent control deters new construction because it limits profit and financing options – is backed by other powerful real estate interests and construction trades groups in Sacramento, including the California Chamber of Commerce and the California Building Industry Association.

Supporters, on the street for just two weeks, have collected 100,000 signatures. They need 365,880 valid signatures by June to qualify for the November ballot. If the current law is repealed, any city or county in California could require rent control on any type of housing it chooses.

The campaign, with real estate interests on one side and tenants’ rights activists on the other, could become the most expensive initiative this November.

“Money wise, this could be the grand poobah of them all because of what’s at stake,” said Steve Maviglio, a Sacramento-based Democratic political consultant. “On one side you have a multimillionaire fighting for rent control, and the (California) Apartment Association on the other … both sides have deep pockets, so it could be a very expensive battle. The question is whether it will overshadow other issues on the ballot designed to help housing.”

Housing is a top concern among the state’s electorate. More than half of California voters say the state’s housing affordability crisis is so bad that they’ve considered moving, and 60 percent of likely voters support rent control, according to a statewide poll last fall. Both sides of the rent control battle have also poured money into ballot box fights in recent years.

There is widespread agreement, among Democrats and Republicans and between pro-growth activists and those concerned about tenant displacement, that California must build more housing to address its affordability problems. The state needs about 200,000 housing units per year to keep pace with rising demand, though it is building an average of roughly 80,000 units per year.

Rents in California, the most expensive in the nation, have gone up more than 40 percent in major metropolitan areas since 2015, according to a January housing analysis by the Public Policy Institute of California. Median rents for all types of rental housing range from $1,595 in Sacramento, to $4,395 in San Francisco, to $2,933 in Los Angeles, according to the real estate listing service Zillow.

Nearly half of Californians – 47 percent – say the state’s high housing costs are a financial strain on themselves and their families, according to the Public Policy Institute analysis. That figure is higher among renters, with 61 percent saying they are financially burdened.

Backers of the Costa-Hawkins repeal say building the housing California needs will take decades, and tenants facing big rent increases need help now.

“There’s no building our way out of this crisis,” said Damien Goodmon, director of the AIDS Healthcare Foundation’s “Housing is a Human Right” campaign. “We have no illusion … that this will be costly and ugly.”

The state Chamber of Commerce labeled a bill that also sought to repeal Costa-Hawkins a “job killer.” It died earlier this year in the Assembly, setting up the ballot box fight.

“I expect it to qualify,” said Allan Zaremberg, the Chamber’s president and CEO. “We’re concerned about increases in the cost of housing and being able to keep people in California. The consequences of a strong economy and an inability to keep up with the demand for housing is a problem we need to solve, but we believe that rent control diminishes investment in housing opportunities.

“It costs more money to build (in California),” Zaremberg said. “If you can’t recover those costs, you’re less likely to put your money into a development.”

Jeff Pemstein, a board member for the state Building Industry Association, acknowledged that economically thriving cities like San Francisco, which has rent control, have experienced a building boom, but he argued developers in other markets, like Sacramento, cannot absorb the high costs of construction, labor and permitting on top of rent control.

“People will pay astronomical prices to live in niche markets like San Francisco. They are super desirable so you can afford to put up with a lot of inconvenience, but the vast majority of California cannot afford to do that,” said Pemstein, also division president for Towne Development of Sacramento, which finances all types of development including rental housing and single-family homes.

http://www.sacbee.com/news/politics-government/capitol-alert/article197489354.html#emlnl=Alerts_Newsletter#storylink=cpy

 

Snow Joke: Drought Returns to 44% of California

The T-shirt-wearing temperatures and lack of winter rain have combined to push nearly half of California into all-too-familiar territory: a state of drought.

Less than a year after Gov. Jerry Brown declared an end to one of the worst droughts in California history, a consortium of nationwide water experts reported Thursday that 44 percent of the state is again experiencing at least moderate drought conditions.

The plight is worst in Southern California, according to the U.S. Drought Monitor. Los Angeles and San Diego have received less than 2 inches of rain since July, and temperatures along the state’s southern coast have soared into the 90s this week.

But the unusual drying is creeping northward. The southern Sierra Nevada is in a “moderate drought,” the Drought Monitor reported, and snow levels across the 400-mile range are approaching some of the lowest levels ever recorded this time of year.

At Phillips Station south of Lake Tahoe, where state water officials base their monthly snow surveys, hydrologists on Thursday found just 13 percent of average snowpack. Only twice since record-keeping began in 1946 has there been less snow — in 2014 and 1963.

Across the Sierra, the situation wasn’t much better. Snowpack measured a meager 27 percent of average for the first of February, according to the California Department of Water Resources.

The snow measurements are closely tracked because the spring and summer melt provides nearly a third of the state’s water supply.

“California experiences the most variable weather in the nation,” said Department of Water Resources Director Karla Nemeth. “It’s vital that water conservation efforts remain consistent regardless of the year’s precipitation.”

While state officials are urging water savings the mandatory regulations that prompted shorter showers and brown lawns during the five-year drought are still a long way off.

For one, California’s peak rainy season still has another month to go. While forecasts show little sign of wet weather through at least mid-February, a handful of late-season storms could quickly improve the water picture.

And California’s biggest reservoirs are still flush with the runoff from last year’s drought-ending rains. Lake Shasta on Thursday measured 109 percent of what it usually holds this time of year, and New Melones Lake near Sonora was at 139 percent. Even if the winter remains dry, most water agencies have plenty of reserves.

Additionally, the places that store and ship the bulk of California’s water supply are in the northern reaches of the state, where drought conditions have yet to take hold. The Sierra is still drought-free from Yosemite National Park north, according to the Drought Monitor.

The Drought Monitor, which is a joint effort by the National Oceanic and Atmospheric Administration, the Department of Agriculture and the University of Nebraska, indexes a number of factors for its weekly update, including precipitation, river levels and soil moisture. Last week, 13 percent of California was deemed to be in some stage of drought.

The Bay Area remains neither in a drought nor in the cautionary state of “abnormally dry,” the Drought Monitor said.

Still, Felicia Marcus, chair of the State Water Resources Control Board and architect of the drought regulations that were lifted in April, said the situation has begun to warrant concern.

“Every month that it stays dry and every month that we don’t get more snowpack makes us more and more worried,” she said. “We’re all watching the weather reports with more fervor than we watch the sports pages, and this is a halftime score you don’t want to have.”

https://www.sfchronicle.com/news/article/With-storms-skipping-state-nearly-half-of-12544705.php

 

Major Water Storage Projects Score Low in Competition for Bond Funds

An application for $1 billion of state bond money to build Temperance Flat dam east of Fresno scored a dismal zero from the California Water Commission staff on the cost-benefit ratio, potentially jeopardizing its construction.

Supporters of the dam expressed shock and dismay and are blaming the commission staff for the low score. They’re got company.

All 11 water project applications from around the state under review by the commission have scored less than one or even zero on their public benefit ratios, said state Assemblyman Joaquin Arambula, D-Fresno. That includes the proposed Sites Reservoir project in Northern California.

A score of one or greater is considered the minimum needed to be awarded money.

“It’s clear to me that something is not working in the process,” Arambula said.

The Association of California Water Agencies also complained about the low scores.

“I was surprised to hear that the California Water Commission staff’s preliminary analysis indicated none of the 11 storage projects were worthy of funding,” said Timothy Quinn, executive director of ACWA. “We have reached out to commission staff to better understand their evaluation criteria and hopefully be able to assist our member agencies who are going through the appeals process.”

Chris Orrock, California Water Commission spokesman, said the ratio counts for only one-third of each project.

“It’s a staff recommendation,” Orrock said. “It’s not a decision by the commission.” Additionally, there’s an appeals process, he said.

Scores will be made public Feb. 1 when the nine-member commission holds a three-day meeting, although applicants have already been told what their public benefit ratio score will be.

Proposition 1, approved by voters in 2014, authorizes the sale of $7.5 billion in general obligation bonds to fund water supply projects, ecosystem and watershed protection and restoration, and drinking water protection. Of that, the commission is doling out $2.7 million for water projects by the end of July.

Arambula said he and Assemblyman Rudy Salas, D-Bakersfield, whose district includes Kings County, met with commission staff Jan. 16 to get a better understanding of why Temperance Flat scored so poorly.

It appears the staff is being cautious in matching information in the application with the language of Proposition 1, Arambula said. “It leads you to say no information has been given,” he said, resulting in the zero score.

In a statement, Salas said he was “disappointed” but believes the score will climb as advocates make their case on appeal.

Mario Santoyo, executive director of the San Joaquin Valley Water Infrastructure Authority that’s trying to build the $3 billion Temperance Flat dam, said the authority hired an expert to calculate the public benefit ratio. The expert determined it was 2.83, which means that “for every dollar that the state invests, they get a return of 2.83 dollars in value,” he said.

To get a zero from the commission staff made no sense, he said. He met with commission staff Jan. 10.

“We were certainly shocked and unhappy when we heard,” Santoyo said. “It came as a big surprise … We were standing there with our jaws open.”

But the staff said “don’t panic, this will be corrected as you provide us clarity” in the appeals process, Santoyo said.

A possible reason for all the low scores is that the state is using a new process to fund water supply projects that has flummoxed the staff, he said. “There are efforts to change the process, to try to put some common sense to this,” he said.

But Chris Acree of Fresno, executive director of Revive The San Joaquin and an opponent of the dam, said the commission staff made the right call.

“We’ve always said the cost-benefit is not adequate,” Acree said.

Requiring additional conservation on the Valley floor would stretch existing water resources at far less cost that building a new dam, Acree said. In addition, the project would flood a river gorge that has rare Indian archeological sites, he said.

http://www.fresnobee.com/news/local/water-and-drought/article196955739.html#storylink=cpy

 

Oroville Dam Emergency Repairs Near $900 Million

The cost of the Oroville Dam spillway failure last February has risen to $870 million, according to a new tally released Friday by the Department of Water Resources that includes $210 million of work done by agency staff and consultants.

The department said in October that the cost of repairs by construction contractor Kiewitt would hit $500 million, but that estimate did not include the agency’s internal costs.

Heavy rains last year caused dam operators to release 55,000 cubic feet of water per second down the spillway, triggering the disintegration of the spillway and the evacuation of 188,000 nearby residents. An independent investigation found that the 1960s-era spillway had numerous defects, such as thin concrete, poor anchors to the underlying rock and the fact that it was set on weak rock.

Originally, the department estimated that the Kiewitt work would cost $275 million, but that was before greater damage was found in the foundation of the spillway. The initial design called for about 485,000 cubic yards of concrete, but as excavation of the loose rock proceeded, that was increased to 870,000 cubic yards.

The department said that it had spent $160 million responding to the crisis in the months after the damage. And it is spending an additional $210 million for debris removal, power line replacement, staff time and technical consultants, spokeswoman Erin Mellon said.

The Federal Emergency Management Agency is expected to cover 75% of the $870 million, with State Water Project agencies paying the rest, she said. So far, FEMA has reimbursed the department for $87 million.

The new cost estimate includes work that will be done later this year to rebuild an upper section of the spillway, along with additional work to the emergency spillway that also failed last February when dam operators tried to use it instead of the damaged main spillway.

Mellon said that the department is evaluating possible fixes to some of Kiewitt’s work, but it would be done within the $500 million contract. Three of the 234 concrete slabs have surface imperfections that may require fixes later this year. The concrete did not cure properly, because an outage at the concrete plant caused delays that let hot winds dry the concrete too quickly, the department said.

The department also noted that water pooling on the hillside has led to seepage through the spillway walls, but those walls were planned to be replaced later this year. It also noted a small section of a new wall is 1% out of vertical alignment and its engineers are examining whether fixes will be needed.

http://www.latimes.com/local/california/la-me-oroville-spillway-cost-20180126-story.html

 

“Carpetbaggers from Beverly Hills” Put Private Brand on Central Valley Agriculture…And Water

Self-described “carpetbaggers from Beverly Hills,” Stewart and Lynda Resnick have transformed California agricultural water management. They  founded  a conglomerate that brings you branded almonds, pistachios, citrus and pomegranates.  The crops are grown on the 281 square miles of the San Joaquin Valley they own, irrigated by a sprawling system of water rights, storage and pipelines.   Their privately held company, valued in excess of $4 billion, is now donating $50-80 million annually in an unprecedented intervention in the region.

Mark Arax – former LA Times writer, author of “The King of California” bio of JG Boswell and 3rd generation Fresno resident – writes about the couple in the New York Times Sunday Magazine:

https://story.californiasunday.com/resnick-a-kingdom-from-dust