NBC Bay Area Tracks Where Your Water Bond Money Really Goes

NBC Bay Area’s Investigative Unit digs into the details of California’s Proposition 1, the $7.5 billion water bond to find out how many innovative and cutting edge projects meant to solve drought issues are actually contained in the bond.

An NBC Bay Area analysis of projects funded by California’s $7.5 billion water bond found little high-tech, innovative projects that some say are needed to upgrade the State’s aging water infrastructure. NBC Bay Area’s analysis also discovered that no money has, so far, gone to fund drought solutions included in the bond such as desalination projects, direct stormwater management and efforts to fund integrated regional water management among 13 different regions.

NBC Bay Area also found a handful of projects funded by the bond that appear to mostly benefit private enterprises, despite the Legislative Analyst’s Office recommendations that projects should have widespread benefit.

The funding includes $30 million to provide recycled water for Chevron’s Richmond refinery, $15 million to build a pipeline to serve recycled water to vineyards, pasture land and the Napa Valley Country Club and a half million dollars to pay for 7 storage tanks in private residential resort community in Humboldt County. 

In a statement provided to NBC Bay Area, Chevron said the recycled water project will free up fresh water for the surrounding community.

“The $30 million in Prop 1 funds is being used to invest in wastewater treatment at the West County District that is routed to the Richmond Refinery,” Chevron communications specialist Leah Casey said in the statement.” The Richmond Refinery is a leader in reclaimed water use in the San Francisco Bay region, with approximately 60 percent of water drawn from recycled sources. Richmond Refinery reclaimed water use frees up enough water to supply up to 16,000 homes (46,000) people on a daily basis.”

“We’re proud of the program,” said Kurt Glaubitz, Global Media Relations Manager for Chevron. “We think this is a good news story. It will provide California with a lot of fresh water.”

California state officials acknowledge the need for more innovation in the historically conservative sector, but say the bond won’t be a significant funding source for those high-tech projects.

Instead, officials say fixing the myriad of issues with existing systems is the immediate priority. They defend the current bond strategy by saying that funding cutting edge yet riskier technology is difficult with public capital. The bond is a good step, they say, but it provides just a small fraction of the money needed to modernize California’s water infrastructure and address the environmental concerns exposed by the drought.

“You have an infrastructure need that’s in the tens and tens of billions of dollars,” said California Secretary for Natural Resources John Laird. “The question is, what is the most effective expenditure of funds? And I think right now, making a lot of things in the existing system work.”

Laird said he’s confident the steps laid out in the California Water Action Plan will ultimately lead to the adoption of those high-tech solutions, but said the system in place needs fixing before that happens.

“We do need to do things which we haven’t done, which is recycle more water” Laird said. “There’s always places to go with conservation. There’s some places we can capture storm water. There’s some places where desal (desalination) works. And we have to do all of those things and we have to move to them. We’re doing a good job of incenting that but now we have to deliver.”

But some view the drought and California’s aging water infrastructure as an opportunity to reinvent the water sector. They say this $7.5 billion water bond would be a good place to start trying that reinvention.

“The reality is a lot of our water infrastructure is heading towards the end of their lifespan and they need to be replaced,” said hydrologist Newsha Ajami, who serves as director of Urban Water Policy with Stanford University’s Water in the West initiative. “And this is an opportunity. We can rethink how we are going to replace them or we can rethink what we want to do with the system we have. And the opportunity is maybe we don’t need to build another large reservoir or another wastewater treatment plant.”

Ajami said she would like to see the state embrace innovative approaches like it has in the clean energy field, but she admits the water sector has been slow to adopt those same innovative approaches.

“It’s very hard to change the (water) sector,” Ajami said.

While Ajami said it’s a good idea to have these water bonds, she says many of the projects have been in the books for a long time already, and are not highly innovative.

Ajami said the State could move more aggressively towards recycling and stormwater capture projects. In particular, she’d like to see smaller regional projects that offer more flexibility.

But Ajami does agree that much more money will be needed and she hopes leaders in Sacramento push for innovative solutions that may require more creative funding.

“It’s good to have these bonds, but they are not a sustainable, reliable money source,” Ajami said. “We need to have more innovative financing mechanisms that can continuously provide funding for some of these innovative solutions.”

It’s a sentiment shared by some of the state’s top water officials.

Felicia Marcus, Chair of the State Water Resources Control Board, agrees that there must be more funding for innovation in the water sector, but she says that will require alternative funding sources.

“We can only spend bond dollars the way the legislature wrote the bond,” Marcus said. “We can’t move bond money to something that would be really cool to do. Should we be spending more on risky, more technological innovation? Sure. It’s not in this bond.”

Some experts say matching funds provided by the State can help encourage local investment in innovative technology. It’s easier to make those decisions when the risk is shared.

“It’s especially helpful when you’re doing something that’s risky and untested,” said Ellen Hanak, Director of the Public Policy Institute of California’s Water Policy Center. “Having that matching grant from the state, from the feds, it just kind of really helps to give the community some confidence that this is something worth doing.”

Hanak also said she’s like to see more money in the bond for projects that can’t be funded by rate payers at the local level, such as purchasing or leasing water rights for environmental purposes.

NBC Bay Area’s examination of the current water bond allocation discovered 23 different projects using $18.5 Million that fit the model Hanak describes, including projects to improve wastewater treatment plants, studies to see if wastewater treatment plants are needed and projects to clean up existing water sources.

“I would rather see in the future more of the state bond monies going to things that are very hard to fund locally,” Hanak said. “That means less emphasis on water supply and waste water agencies and more emphasis on the kinds of things they don’t fund with their rate payer base like dealing with some of the environmental issues.”

While people may disagree on the specifics of how the bond money should be spent, everyone seemed to agree on one point: The water bond alone is not going to solve California’s water problems. All agree that if California really wants to encourage and create innovation to solve future drought it will take tens of billions of more dollars.

“It takes an awful lot to set up the institutional infrastructure to think more holistically about water (statewide),” said Water Board Chairwoman Marcus. “So this is something we're going to be at for a while.”

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