November 20, 2020 – News & Notes

For Clients & Friends of The Gualco Group, Inc.

IN THIS ISSUE – “Unprecedented Amount of Uncertainty”

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.




Legislative Analyst Foresees Fiscal Uncertainty, But a Rosy 2021-22 State Budget

Sacramento Bee

California could see $26 billion in one-time surplus funds that will help balance the budget next year, but moving forward will face rising deficits, according to a new report from the Legislative Analyst’s Office.

The report estimates California will see a temporary surplus next fiscal year beyond what lawmakers and Gov. Gavin Newsom expected when they created the current $202 billion state budget that cut money from education and state worker salaries.

That extra cash could allow them to avoid major cuts in next year’s budget, but the windfall will evaporate quickly, the report warns. California still faces long-term deficits driven by the coronavirus pandemic that will rise to $17 billion by 2024, analysts predict.

Since the beginning of the fiscal year in July, tax revenue has come in consistently higher than expected. Through October, California has collected $11.3 billion more in tax revenue than anticipated, according to the state’s Department of Finance.

That’s partly because the state is recovering quickly but unevenly from the pandemic-induced recession, with high-income earners continuing to prosper and low-income workers facing the worst consequences.

The limited effect on high wage earners has kept California’s revenue up as those workers have kept their jobs and continued to work from home. California’s budget relies heavily on those high earners because of the state’s progressive income taxes.

Federal stimulus checks for individuals and increased unemployment help has also boosted California revenue in the short term. This year’s revenue is also partly from taxes on 2019 income, when the economy was booming, according to the Department of Finance.

Although low-income families have been hit hard and face high unemployment rates, the Legislative Analyst’s Office found applications for government funded health care and food assistance are actually down from the previous year. That means those programs are putting less strain on the state budget.

The report warns that there’s still an “unprecedented amount of uncertainty” about the budget and that “revenues easily could end up $10 billion or more above or below” what analysts predict.

The evening before the Legislative Analyst’s Office released its report, Senate President Pro Tem Toni Atkins previewed the relatively rosy economic outlook in a statement. She said her priorities for spending the extra money would include restoring funds cut from schools and other areas in this year’s budget. She also said she wants to steer more money to hard hit local governments, COVID-19 response, homelessness, and emergency preparedness.

Atkins and her colleagues in the Legislature have until next summer to hash out a new budget for the 2021-22 fiscal year.

Gov. Gavin Newsom says he’s already working on his budget proposal, which he’ll present to lawmakers in January.



Gavin Newsom’s Day Off Continues to Draw Backlash


California Medical Association officials were among the guests seated next to Gov. Gavin Newsom at a top California political operative’s opulent birthday dinner at the French Laundry restaurant this month.

CEO Dustin Corcoran and top CMA lobbyist Janus Norman both joined the dinner at the French Laundry, an elite Napa fine dining restaurant, to celebrate the 50th birthday of lobbyist and longtime Newsom adviser Jason Kinney, a representative of the powerful interest group confirmed Wednesday morning.

Both Norman and Corcoran are friends of Kinney, as is Newsom, who referred this week to his 20-year friendship with Kinney. In a photo obtained by Fox LA, Norman is clearly visible seated to Newsom’s left.

The presence of CMA brass could amplify criticisms of the dinner occurring despite coronavirus restrictions that have limited Californians’ movements and constrained businesses. While Newsom and Kinney’s lobbying firm have said the meal abided by public health rules, it has struck a chord with Californians who have assailed the upscale soiree as hypocritical as coronavirus cases surge.

The state has issued guidelines prohibiting more than three households from gathering privately — a limit clearly exceeded by the French Laundry dinner. However, the state has intentionally allowed restaurants to seat people from more than three households together.

Doctors and other health care workers have been vigilant since the pandemic began in asking Californians to stay at home — a call that has ramped up in recent weeks as hospitals across the nation fill to capacity.

A spokesperson for the CMA, Anthony York, said in a statement that “the dinner was held in accordance with state and county guidelines.”

The photos suggest that the dinner was held in what amounts to a fancy garage, with walls on three sides and a roof. Newsom and Kinney’s lobbying firm, Axiom Advisors, has insisted that it was an outdoor dinner. It is unclear whether that counts as outdoor dining under state guidelines, though Napa County restaurants were allowed to serve patrons inside at the time of the Nov. 6 event.

The CMA has long been a powerful presence in the state Capitol, and its Sacramento officials are longtime friends with Kinney. The group spent $2.1 million last year lobbying state leaders.

The doctors’ lobby this year successfully convinced Newsom and state lawmakers not to slash Medi-Cal reimbursement rates that were funded by a tobacco tax that CMA spearheaded in 2016. Besides listing dozens of bills, CMA also reported lobbying the Newsom administration on Covid-19 screening and testing rules.

But the group isn’t always successful with Newsom. He signed legislation in September that will give nurse practitioners more authority to work without physician oversight, a bill that CMA opposed.

Newsom on Monday apologized for what he called “a bad mistake” in attending a birthday party that broke the very rules that he has been preaching to slow the spread of the coronavirus.

Newsom said he realized as soon as he sat down at the outdoor table that the group was larger than he had expected to celebrate the 50th birthday of Jason Kinney, a political adviser that Newsom said he has known for 20 years.

“I made a bad mistake,” Newsom said. “I should have stood up and … drove back to my house.

“The spirit of what I’m preaching all the time was contradicted,” he added. “I need to preach and practice, not just preach.”

The lapse came just as California is seeing a surge in coronavirus infections and hospitalizations, and as health officials lobby residents to skip traditional Thanksgiving and holiday gatherings or self-quarantine if they travel out of state.

State and local officials have largely blamed recent increases on such social gatherings, and media experts said Newsom’s failure to abide by his own rules may have hurt his credibility just as the state is trying once again to tighten them. Newsom announced Monday that more counties will move more quickly into increased business restrictions as the state tries to head off a further spike in cases.

Newsom said he is concerned that he may have undermined his own message.

“So that’s why you have to own it, and you have to be forthright and I’m doing my best every single day in trying to model better behavior,” he said.

D’Lee Daleo, co-owner of Switch Fitness in Elk Grove, put Newsom’s action in the same category as U.S. House Speaker Nancy Pelosi getting her hair washed and blow dried at a San Francisco salon in late August, at a time when the city was not allowing indoor beauty services because of the pandemic.

“They have no idea what it’s like to be a regular person who wakes up every day and goes to work,” said Daleo, who has been struggling to keep the boutique fitness studio open when gyms are only allowed to open outdoors with modifications. “It shows they’re elitist, and we’re just little peons who are supposed to do whatever they tell us to do.”

Newsom’s fellow Democrats were silent, while Republican state lawmakers quickly took to Twitter to make fun of his apology.

Jot Condie, president and CEO of the California Restaurant Association, defended Newsom’s attending the dinner even as he criticized the state for increasing indoor dining restrictions.

“Dining at a restaurant is likely to be safer than gathering with others at a home,” he said in a statement. “So, hats off to the governor for choosing the safer option.”

Newsom said it was the first time he has been out to eat with more than just his wife, though he’s been on outings with just her twice.

“This has not been a practice I’ve indulged in the in the past,” Newsom said during his regular weekly public briefing, four days after initially issuing a statement saying he erred. ”I take very serious what we’re promoting.”


State Lawmakers’ Hawaiian Safari Also Generates Heat

Sacramento Bee

Several California lawmakers have confirmed they’ve traveled to Hawaii this week for the four-day annual Independent Voter Project’s policy conference — usually attended by lobbyists and industry representatives — despite the surge in COVID-19 cases throughout the country.

Assembly members Frank Bigelow, R-O’Neals, Heath Flora, R-Ripon, Jose Medina, D-Riverside, Chad Mayes, I-Yucca Valley, Blanca Rubio, D-Baldwin Park, Jordan Cunningham, R-San Luis Obispo, and Senators Andreas Borgeas, R-Fresno; Bill Dodd, D-Napa, said they had traveled this week to Maui for the summit.

In statements to The Sacramento Bee, Bigelow, Flora, Cunningham and Borgeas defended their decision to attend the event, and said they were learning valuable ways to safely reopen California’s economy during the pandemic. They confirmed they’d been tested before flying to Hawaii, which the state requires unless a visitor is prepared to quarantine for two weeks upon arrival, and said they are following safety protocol.

“Yes, my family and I are in Hawaii for an annual, bipartisan policy conference,” Cunningham said in a statement. “This event promotes intelligent public policy in our state. In fact, we are here discussing ways we can safely reopen our society and save our small businesses, workers, and kids. We paid for my family’s tickets and COVID tests with personal money – no state funds were used.”

The Sacramento Bee contacted every lawmaker’s office to confirm whether members had made the trip and reviewed previous financial records and reports to determine which legislators had attended the summit in years past.

The list of members who have not responded to multiple inquiries are: Senators Susan Rubio, D-Baldwin Park, Scott Wilk, R-Santa Clarita, and Assembly members Wendy Carrillo, D-Los Angeles, Bill Brough, R-Dana Point, Tom Daly, D-Anaheim, Mike Gipson, D-Carson, and Jim Cooper, D-Elk Grove.

Carrillo wrote a tweet this week with a location tagged in Kihei, Hawaii, which Politico California first reported, close to where the conference is being held at the Fairmont Kea Lani resort. KRON4 News also reported that an eyewitness had seen Cooper on the island and that Cooper said he was attending a conference.

The legislators aren’t the only California elected officials who’ve recently had to come clean about their social plans.

Dan Howle, chairman and executive director for the Independent Voter Project, defended his decision on Monday to move forward with the event, which he said is a third of its normal capacity this year. Not counting family members and other guests, about 50 participants are joining the panels, which Howle said are focusing on how to keep the economy humming during COVID-19.

“There’s a lot of different ideas about how we can get people’s businesses (open), about starting the process of bringing people back to some semblance of normal,” he said. “And because we have this long relationship with the hotel we agreed, let’s give this a try.”

The summit’s timing, however, couldn’t be worse. California’s positivity rate has surged to 5.3% over seven days, and public health officials have warned against non-essential and out-of-state traveling. Californians leaving the state are urged to quarantine for 14 days upon their return. Many across the nation are coming to terms with disappointment over missing Thanksgiving meals with their families and loved ones.

The Independent Voter Project is a San Diego-based “nonpartisan” group best known for putting the 2008 initiative on California’s ballot to install the state’s top-two primary system. Held for more than a decade, the conference offers an opportunity for lawmakers to socialize at the beachside resort with lobbyists and other California politicos who have interest in state lawmaking.

Howle declined to confirm, other than with permission from Blanca Rubio, whether the legislators who had not responded to requests were in attendance. He said, however, that fewer than 20 members from a handful of states, including Washington and Texas, were there.

All participants, Howle added, are encouraged to get tested again within five days of their return, and to alert the group of a positive result.


San Diego Mayor “Seriously Considering” Challenging Newsom


San Diego Mayor Kevin Faulconer said Thursday he is “seriously considering” a Republican challenge to Gov. Gavin Newsom, seizing on the governor’s recent mistakes and saying the Democratic executive has failed the state in the Covid-19 crisis.

“We need leadership — right now,” Faulconer said. “People are angry … and rightfully so.”

Faulconer, a moderate Republican in his final weeks as San Diego mayor, argues that Newsom has set California on a dangerous economic path. Business owners are frustrated by a “continued shifting” of mandates, “open and closing, open and closing every other month,” he said.

He said Californians of all political stripes “have had it.”

Faulconer’s comments about a gubernatorial run were his most detailed to date. As the chief executive of the state’s second largest city, Faulconer is often viewed as the most viable Republican for statewide office in solidly blue California. But any GOP candidate would be challenged to take on Newsom in a state where Democrats outnumber Republicans in voter registration by a whopping 46 percent to 24 percent.

A month ago, Newsom still enjoyed high approval ratings — 58 percent of Californians approved of his job performance and 61 percent approved of his handling of the pandemic response, according to the Public Policy Institute of California. The state at that time had much lower coronavirus spread and fewer restrictions in place, and Newsom has received credit for California’s lower infection rates this fall compared to other states that had fewer restrictions.

But coronavirus rates have since shot up — climbing 50 percent during the first week of November — sparking another round of anxiety over exposure risks and anger toward new restrictions. Newsom also committed the most gauche misstep of his governorship this month.

The governor on Monday issued a personal apology for attending a dinner party at The French Laundry in Napa County that had 12 people and more than three households. The event celebrated the 50th birthday of his longtime friend and political adviser Jason Kinney, who has become a blue-chip lobbyist. POLITICO was first to report Wednesday that Newsom sat with two top officials from the California Medical Association at the event.

The governor earlier faced a backlash after acknowledging that he had sent his own children back to private school, despite the fact that most of California’s 6 million public school students remain in distance learning — and will for the foreseeable future with Covid-19 cases climbing higher.

“I am seeing and hearing more frustration than ever before with the governor’s hypocrisy — from private schooling,” to enjoying privileges that most Californians do not have, Faulconer said. “And people are rightfully outraged that the governor sets the rules, but he doesn’t follow them — while Californians are sacrificing everything right now.”

The San Diego mayor, who was a business executive before taking office, said Newsom’s actions have prompted him to look seriously at a gubernatorial run, though he has not formed an exploratory committee, the first formal step.

But “I’ve been having a lot of positive conversations with people about it,” he said.

Newsom’s term is up in 2022, but there are ongoing efforts to collect signatures for a recall of the Democratic governor — though many political observers say those are long-shot bids.

“There will always be opportunists trying to score cheap political points, but now more than ever, the governor is going to stay focused on his job, and leading us through the pandemic — keeping relief and recovery from Covid front and center,” said Newsom political spokesperson Dan Newman.


California Republican Registration Edges Past Independents

Sacramento Bee

California Republican Party Chairwoman Jessica Millan Patterson will be the first to tell you that, before last year, state Republicans were losing steam.

The number of registered Republicans in California had been dwindling for a decade. By 2019, more people were registered under “no party preference” than the Republican Party. Steve Schmidt, a California political consultant who ran the late Sen. John McCain’s presidential campaign, described the party post-election as a “gathering of weirdos, cranks, losers,” and “nut jobs.”

But as of October, California Republicans’ numbers are up, if ever so slightly. The party has about 50,000 more registrants than those who associate with no party. The party has grown registration numbers, donors and volunteers in recent years, Patterson said, and if they continue to support and engage with Republicans at a grassroots level.

Some of that could be attributed to the power of President Donald Trump — “there are many individuals out there who would only turn out to vote because the president was on the ballot,” Patterson said — but she’s also confident in the power of the party’s ability to engage voters on state and local issues.

“Our job, in the long run, is to engage these voters and get them excited about midterm elections,” she said. “Get them excited about local candidates, and get them excited about Republican solutions here in California.”

Trump may be on his way out of the White House, but California Republicans still have reasons for hope. In an election cycle that many had hoped would bring a “blue wave,” California Republican candidates have held onto existing congressional seats and could gain a few, depending on the results of some close races.

Democrats still maintain a supermajority in the state Legislature and were able to flip two state Senate seats in their favor. They also hold all statewide offices, from governor to state controller.

Patterson nevertheless remains optimistic about the future of the state Republican Party.

“I think that we have huge opportunities for growth,” Patterson said. “I have said this from the beginning: 2020 was about setting the table, and 2022 is about bringing balance back to California.”

Republicans are seeing success this year, in part, because they choose good candidates, said Jim Brulte, former California Senate GOP leader and party chairman prior to Patterson.

Candidates like Young Kim in the 39th Congressional District and Michelle Steel in the 48th, reflect the Korean-American communities they represent, he said, Rosilicie Bogh is a good match for the large Latino population in California Senate District 23.

“Republicans have learned the lesson that you have to recruit good candidates,” he said. “Not that we haven’t had good candidates in the past, but at the end of the day we had really good candidates this year.”

Party operations are “very sound” Brulte added, but other factors influence the result of an election.

The coronavirus pandemic was an important messaging point for Republicans this year. The party has criticized Gov. Gavin Newsom’s system of opening some businesses while allowing other to open during the pandemic.

Lawsuits against Newsom’s executive orders brought by Republican Assemblymen Kevin Kiley and James Gallgher received widespread support among conservatives, especially in the northern regions.

“We have seen, certainly, an uprising and active participation from Republicans and others, who want to be a part of a movement,” Patterson said. “Where they say, ‘I was not political before I did this… it’s just made me so frustrated that I realize my vote matters.’”

The party has been criticized in recent years for what some see as a shift away from the center. The California GOP this year endorsed several candidates who expressed interest in the conspiracy theories of the QAnon movement.

Brulte acknowledged that the party has lost people in the political center.

“Most minority parties in states become much more reactive to their base,” he said. “That’s not just Republicans in California. It’s also Democrats in other states around the country.”

Patterson said she can appreciate the criticism, and as someone who describes herself as “big-tent Republican,” she’s looking for ways to grow the base.

“While my views might be more conservative than the average, I believe that there’s so much that we agree on. Let’s focus on the things that we agree on and get people elected.,” she said. “I think that is critical if we want to win here in California.”


Ready for 2022 Ballot? Initiatives Already Lining Up


Much has been said and written about the hundreds of millions of dollars spent for and against the dozen statewide measures on this month’s ballot.

Big money? Yes, but it was really just chicken feed, because the stakes in those ballot battles were infinitely greater.

Take, for instance, Proposition 15, a battle between a union-led coalition that proposed the measure, and a business coalition. Had Proposition 15 passed, it would have generated roughly $10 billion a year for schools and local governments. That’s about 66 times as much as the one-time spending for and against the measure.

Other than the scale, there was nothing unusual this year about the lopsided risk-reward aspect of major ballot measures, and it will fuel another round of conflicts two years hence. There are at least four high-dollar ballot measures headed for the 2022 ballot:

MICRA—In 1975, Jerry Brown signed the Medical Injury Compensation Reform Act or MICRA, placing a $250,000 cap on damages for what were called “pain and suffering” in medical malpractice lawsuits.

Consumer advocates and personal injury lawyers have attempted numerous times in the Legislature to modify the law, contending that it protects bad medical care providers and short-changes their innocent patients. Providers and their insurers have turned back each challenge, saying that removing the cap would raise medical costs.

measure already qualified for the 2022 ballot would adjust the cap for inflation retroactively to 1975, probably increasing it to well over $1 million, and eliminate it for “catastrophic injuries.” The outcome could have multi-billion-dollar impacts and thus will mean multi-million-dollar campaigns.

PLASTICS—A certain-to-qualify measure would reduce or eliminate single-use plastic packaging through regulation and a tax.

California recycler Recology is the chief sponsor of the initiative, which would continue a crusade, also supported by environmental groups, that stalled in the Legislature thanks to fierce lobbying by a packaging industry coalition led by South Carolina-based Novolex.

As the battle shifts to the ballot, the Recology group will portray plastic packaging, particularly items used for takeout food, as environmental despoilers. The industry will counter that using plastic packaging is cleaner than the alternatives, particularly during a pandemic.

SPORTS WAGERINGAnother virtually certain 2022 ballot measure also continues a contentious issue the Legislature failed to resolve — whether legal sports wagering should come to California and if so, who should benefit.

A legislative measure would have given Indian tribal casinos and some horse racing tracks authority to take bets on sporting events, but the politically powerful casinos opposed it because it would also have sanctioned new forms of gambling in non-tribal card rooms, impinging on the tribes’ monopoly.

A tribal coalition’s pending ballot measure mirrors the failed legislation except for its card room enhancements. It’s uncertain whether the card rooms will try to mount an opposition drive but billions of gambling dollars will hinge on the outcome.

FLAVORED TOBACCODespite stalling on other issues, the Legislature did pass a ban on flavored tobacco products, which have been criticized as luring young men and women into tobacco use.

“It will be a point of deep pride and personal privilege as a father of four and as someone who’s had many, many family members die at the hands of the tobacco industry to sign that bill,” Gov. Gavin Newsom said.

The legislation was a defeat for the tobacco industry, which is fighting back with a referendum that would repeal the new law, just as this year’s Proposition 25, sponsored by the bail bond industry, erased a law that eliminated cash bail for criminal defendants.


State Wasted $2.7 Billion in Homeless Housing Funds, State Auditor Finds

Sacramento Bee

California’s affordable housing shortage is due in part to the state’s failure to develop a well-coordinated plan, which allowed a state agency to mismanage and ultimately lose $2.7 billion that could have financed thousands of affordable housing units, according to the state auditor. The news comes as California scrambles to find permanent homes for homeless people temporarily housed in hotels amid the pandemic and thousands of renters stare down an eviction moratorium that expires in February. Although the state needs to build an estimated 125,000 affordable housing units annually through 2029 to meet demand, it’s only supported an average of 19,000 units annually, the auditor found. A major factor: California’s labyrinthine financing process. While most large states have one department that handles affordable housing funding, California has five — and they report to different elected officials, meaning no one oversees the entire system, the Los Angeles Times reports. The lack of state oversight has also slowed development in cities and counties, which as of June 2019 had issued building permits for only 11% of the affordable units in their housing plans.

To overhaul the process, the auditor recommended eliminating one of the state agencies, improving communication among the others, and strengthening state oversight of local development. The California Department of Housing and Community Development announced it would temporarily pause some affordable housing funding programs while other state agencies revised their funding criteria in order to “achieve increased collaboration and alignment for our customers.”



“Forever Chemicals” Contaminate Groundwater; Cleanup Costs “Going to be Painful”


In the weeks before the coronavirus began tearing through California, the city of Commerce made an expensive decision: It shut down part of its water supply.

Like nearly 150 other public water systems in California, the small city on the outskirts of Los Angeles had detected “forever chemicals” in its well water.

Used for decades to make non-stick and waterproof coatings, firefighting foams and food packaging, these industrial chemicals — per- and polyfluoroalkyl substances or PFAS — have been linked to kidney cancer and other serious health conditions.

The chemicals turned up in both of the city’s wells serving about 3,000 residents. One well already had treatment capable of reducing the chemicals, but the other did not, according to the California Water Service, which operates the wells.

The discovery forced Commerce to choose between two bad options: keep serving the contaminated water, or shut the well down and import water at more than double the cost.

Flush with funds from taxing the city’s casino and outlet mall, officials decided to err on the side of caution and shut the well down.

“We don’t take risks when it comes to drinking water,” said Gina Nila, the city’s deputy director of public works operations.

Then the pandemic struck. The casino closed for months, and the local economy took a hit. City staff were furloughed and laid off. And the tab for replacing its inexpensive underground water with costly imported water continues to climb, reaching about $460,000 in just nine months.

Now the city faces the prospect of needing to spend $1.8 million on a new treatment system, on top of its growing bill for replacement water.

“We’ll find a way to pay it,” said Commerce’s acting director of finance Josh Brooks. “It’s going to be painful.”

Across California, water providers are discovering the same thing: These chemicals are everywhere. They last forever because they don’t break down. They’re dangerous. They’re expensive to get rid of. And many Californians don’t even know they’re drinking them.

California is now cracking down by implementing new thresholds for the chemicals that will force cities and utilities to shut down their wells, treat the water, or notify their customers about the contamination.

A CalMatters analysis of state data reveals that nearly 200 drinking water wells, or 15% of those tested, have exceeded the new thresholds in at least one round of testing over the past year. Although they are concentrated largely in Los Angeles, Orange and Riverside counties, contaminated wells are found statewide, in rural as well as urban areas.

At least 26 wells in hotspots, including Fresno, the East Bay and parts of Riverside and San Luis Obispo counties, contain extreme amounts of the chemicals — two to 10 times higher than the state’s recommended levels in at least one test, according to the CalMatters analysis.

“I actually think it’s scary as all get out, so we need to clean it up,” said Felicia Marcus, a visiting fellow at Stanford University’s Water in the West program and former chair of the State Water Resources Control Board. “The real question is, what is it going to take?”

Underground water is one of California’s most precious resources, providing nearly half of its drinking water, and even more in drought years. In a state where water is already scarce, the contamination of wells adds another unwelcome stressor.

The big blow to local agencies comes as the coronavirus pandemic guts cities’ budgets and their capacity to deal with yet another crisis. Groundwater is cheap, costing ratepayers much less than water imported hundreds of miles through aqueducts. Replacing the tainted water can double the cost, while removing the chemicals can cost each supplier millions of dollars in sophisticated, new treatment facilities such as reverse osmosis.

At least 146 public water systems serving nearly 16 million Californians have already detected traces of the two most pervasive chemicals — perfluorooctanoic acid (PFOA) and perfluorooctane sulfonate (PFOS) — in their well water, according to the CalMatters analysis.

The sources are ubiquitous across California: They leak into groundwater from firefighting foam used by airports and military bases, trickle off landfills and seep from industrial facilities.

“The PFAS that are in the environment today are likely to be in the environment 20 years from now or 40 years from now or 100 years from now,”  said Jamie DeWitt, an associate professor of pharmacology and toxicology at East Carolina University. “And eventually you’re going to have enough in your body so that your body starts to develop diseases.”

Federal advisories for drinking water, which are not enforceable, recommend limiting PFOA and PFOS to 70 parts per trillion, combined. But California officials, concerned about the health effects, set more stringent thresholds: 10 parts per trillion for PFOA and 40 parts per trillion for PFOS.

Now, under a new state law, the water board will require providers to clean up their water or notify customers if the average concentrations exceed those thresholds, called “response levels,” over the next year.

Detecting “forever chemicals” in groundwater doesn’t necessarily mean that people are drinking high levels of them.

CalMatters’ analysis shows that some providers — including in Pico Rivera, Downey and migrant farmworker housing near Watsonville — are serving drinking water from contaminated wells that exceeded the state’s threshold in at least one test over the past year.

But 19 suppliers, including in Oroville, Atascadero, Jurupa Valley and the Santa Clarita Valley, have shut down more than 50 contaminated wells. A few, like Pleasanton, have relegated their tainted wells to emergency-use only.

And 21 suppliers, including ones in Corona, East Los Angeles, Fresno and Riverside, already have treatment systems that can filter out some of the chemicals or blend with cleaner water to dilute them. However, under the state’s new threshold, more action may now be required for some providers’ water to be clean enough to comply.

One of the hardest-hit areas is the northern half of Orange County, which gets more than 75% of its water from wells. In July, the Orange County Water District estimated that roughly 20% of 200 wells had been shut down because of the chemicals — eliminating enough water to serve hundreds of thousands of people per year. Replacing that water could add $20 a month to residents’ bills, and the costs could ultimately top $1 billion over the next 30 years, according to the district.

Finding out whether water systems are actually serving the contaminated water to people is remarkably difficult.

CalMatters contacted 67 water providers that have exceeded the new guidelines in at least one round of testing. Many repeatedly failed to respond; a few, like the cities of Lathrop and Monterey Park, refused to say whether their tainted wells were currently providing drinking water to residents.

The state water board has urged providers to notify their customers of elevated levels, but has not required it. That will change over the next year as the new law’s requirements kick in.

Californians are largely left in the dark about the safety of their drinking water: Less than 9% of roughly 14,350 public drinking water wells in the state have been tested for PFOA and PFOS. State requirements have focused on areas considered vulnerable to contamination, such as near airports and landfills.

This fall, California expanded its testing orders from roughly 600 to 900 wells, including those within a one-mile radius of previous detections. Some providers also voluntarily test their wells. (The hundreds of thousands of private wells are excluded from testing requirements.)

People can test their own water for the chemicals, but the process is costly and difficult, and only some household filters work. Residents wondering if their water supply has been tested should contact their supplier.

The low rate of testing in California means that the true extent of the contamination — and the cost of cleanup — remains unknown.

“We have an emerging problem with a lot of our water providers — contamination that is not their fault,” said Assemblymember Cristina Garcia, a Bell Gardens Democrat who wrote the law authorizing state officials to crack down on the chemicals. “So how do we fix that?”

These “forever chemicals” have been accumulating in water, soil and human bodies since the late 1940s, when 3M Co. developed a revolutionary process to make them, leading to Scotchgard and other products. Soon after, DuPont began using PFOA to make Teflon.

Prized by industry for their ability to repel water and oil, the chemicals exploded in use worldwide. After the Environmental Protection Agency learned that they were building up in people’s bodies and the environment, 3M agreed in 2000 to begin phasing outPFOS, and DuPont agreed in 2006 to phase out PFOA.

Nearly everyone in the United States carries PFOA and PFOS in their bodies — even babies, who absorb them during pregnancy and breastfeeding. In California, more than 780 people tested had an average of seven “forever chemicals” in their blood; nearly all had at least one, according to Matt Conens with the state Department of Public Health.

In 2004, the Environmental Protection Agency charged DuPont with illegally hiding evidence about the health risks of PFOA for 20 years. Then the extent of the danger to the public was revealed several years later, after residents of the Ohio Valley sued DuPont. Funded by a $70 million settlement, researchers found higher rates of diseases among people drinking water highly contaminated with PFOA from a DuPont factory in West Virginia.

The research team reported a “probable link” between PFOA and six health conditions: thyroid disease, kidney and testicular cancer, ulcerative colitis, high cholesterol and dangerously high blood pressure in pregnancy.

The chemicals also can impair the immune system, according to the National Toxicology Program. Children with high levels of PFOA and PFOS in their blood produce lower levels of antibodies after vaccination, which could reduce their ability to fight off infections.

“Now we’re discovering all these bad things, and in the meantime, the (chemicals) have multiplied and biomagnified in the environment and in human bodies,” said Philippe Grandjean, a Harvard University adjunct professor of environmental health who has studied immune effects of the chemicals.

Even as water systems struggle to clean up PFOA and PFOS, use of other substances in the massive family of perfluorinated chemicals continues.  Newer chemicals were detected twice as often as the old ones at airports and landfills, according to a water board analysis.

“The train has already left the station,” Grandjean said. “And we’re just running on the platform, trying to get hold of the handle on the last car.”

Many Californians are unaware that they’re drinking traces of the chemicals.

Aracel Fernández, 51, who worked as a farm laborer until she hurt her back, has been living at the Buena Vista Migrant Center near Watsonville for the past 23 seasons.  Her water tastes so unpleasant — like chlorine — that she pays $30 a month for bottled water.

But she didn’t know that the well providing her drinking water contained levels of PFOA up to 13 parts per trillion, above the state’s new recommended limit of 10 parts per trillion.

That well remains active, according to Jenny Panetta, executive director at the Housing Authority of Santa Cruz County, which operates the center and the well. “We believe the water at Buena Vista is healthy and safe, in compliance with all requirements, and we’re committed to keeping it that way,” Panetta said in an email.

Now that Fernández knows that the carcinogenic chemical is in her water, she has a question for officials who say the water is safe: Would they drink it, or let their kids and pets drink it?

“¿Se arriesgarían?” Fernández asked — “Would they take the risk?”

In Pico Rivera, a city east of Los Angeles that is 91% Latino, well water has high concentrations of PFOA. But Frances Esparza, superintendent of the El Rancho Unified School District, didn’t know about the contaminated water at her schools until she read about it in the Whittier Daily News about a year ago.

“Knowing that was in our water really concerned me,” Esparza said. “All of us are in this situation, and we’re finding out in a local newspaper? That’s not ok.”

Esparza shut down the schools’ taps and drinking fountains, purchased bottled water and spent nearly $80,000 to install filters on sinks and fountains.

Scott Bartell, a professor of public health at the University of California Irvine, also didn’t know about the contamination in his home turf of Orange County until he went looking for it. And Bartell knows these chemicals better than most: He helped investigate the health threats in the Ohio Valley and served on a World Health Organization panel reviewing the links between PFOA and cancer.

Bartell is now spearheading the California arm of a nationwide investigation into exposures to the chemicals and associated health risks, including children’s brain development.

“They build up in the body and they have the potential to be toxic,” Bartell said. And there are a lot of opportunities for people to be exposed to them. “You put all that together, and it is a concern.”

Some water providers are trying to find millions of dollars to treat or replace their contaminated water.

In Pico Rivera, residents rely 100% on groundwater. All city-operated wells and half of the Pico Water District’s supply exceeded the state’s new recommended levels in at least one round of testing over the past year.

Some of the wells have up to twice as much PFOA as the state recommends.

“We were kind of shocked at how high they were,” said Adrian Rodriguez, water supervisor for the city of Pico Rivera.

“We didn’t cause the contamination … someone else did. We don’t know where it came from, or how it got there,” Rodriguez said. “Right now we’re barely getting a handle on it.” 

Pico Rivera’s contaminated wells are still providing water. It could take at least a year and nearly $4 million to build just one treatment facility for two wells, and Pico Rivera doesn’t have the money.

“This is a big, big, big impact to our agency to be able to treat the water or install facilities in a very short time,” said Monica Heredia, director of public works.

Anaheim faces a similar plight. Its 19 wells provided about 70% of the water used by 64,000 customers. But after detecting the chemicals, the city shut down 12 of the wells, replaced them with imported water and increased residents’ rates by about $7 per month.

The Santa Clarita Valley Water Agency, which serves more than a quarter-million people, shut down 17 of its 42 wells. Installing a new $6 million treatment facility that costs $600,000 per year to operate brought three wells serving about 5,000 households back online. But treating all of its contaminated wells will cost about $80 million upfront plus $3 million to $5 million per year, according to spokesperson Kathie Martin.

It’s the same story across the state. California Water Service has shut down PFAS-tainted wells in Chico, Marysville, Oroville and East Los Angeles, and returned a critical well to service in Visalia with a $1.6 million treatment plant.

Making matters worse, there are still thousands of other perfluorinated chemicals in use today, and treatment installed for some may not be effective for all.

Some providers pay a centralized water district to manage the groundwater — and now those agencies are putting a portion of that money toward cleanup.

“From an economic standpoint, it makes sense for us to help out our pumpers,” said Rob Beste, assistant general manager of the Water Replenishment District, which has set aside up to $34 million to help its customers pay for treatment. And with groundwater about half the cost of imported water, “it makes sense for the pumpers to treat it and still use groundwater,” he said.

But state funding to help water agencies is scarce in California. “There are many systems applying for funding, and there’s not enough money to go around,” said Daniel Newton, assistant deputy director of the state water board’s Division of Drinking Water.

To cover the costs, water providers across the state have started what legal experts suspect could become a flood of lawsuits.

The Orange County Water District has lined up seven law firms as it considers suing to recover clean-up costs projected to exceed $1 billion. Already, it has paid $1.4 million to investigate treatment techniques. The district’s legal counsel wouldn’t say which parties a lawsuit would target, but likely defendants include chemical companies.

Some water agencies already have sued 3M and DuPont, and its various spin-offs. Others are also suing the military, which has used firefighting foam containing the chemicals for decades.

“It doesn’t matter to us who pays for these as long as our customers don’t have to,” said Kathryn Horning, corporate counsel for California American Water, which is suing chemical manufacturers and the Department of Defense to help pay for a $1.3 million system to clean up a well near the former Mather Air Force Base near Sacramento.

3M spokesperson Sean Lynch said the company “acted responsibly in connection with products containing PFAS and will vigorously defend our record of environmental stewardship.” DuPont, which has undergone corporate reshuffling since making and using PFOA, would only say it was wrongly named in the suit.

Finding a way to pay for treatment will be critical, particularly as more chemicals make their way into Californians’ water.

“Certainly, in the long run, this (contamination) is going to take a lot more money,” Stanford’s Marcus said. “And a lot more thought.”

By | 2020-11-20T13:19:40-08:00 November 20th, 2020|Air Quality|