CALFED Finance Planning
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Transcript of CALFED Finance Planning
CALFED Finance Planning
Need for Finance Planning
• Status quo approach to rely so heavily on State bond funds unlikely in the future
• Existing funding significantly declining• Legislative direction on new water user fee • Benefits-based financing principle in ROD • Avoid piecemeal finance planning
California Bay-Delta ProgramYears 1-4 Program Funding
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
Yr 1 Yr 2 Yr 3 Yr 4
Program Years
$ i
n m
illi
on
s
Water User
Local
Federal
State
California Bay-Delta ProgramYears 1-5 Cumulative Funding
Federal7%
Water User7%
Local Grant Match22%
State Bond Funds55%
StateGeneral Fund
& Other9%
California Bay-Delta ProgramYears 5-8 Estimated Funding
$0
$100
$200
$300
$400
$500
$600
$700
Yr 5 Yr 6 Yr 7 Yr 8Program Years
$ i
n M
illi
on
s
Water User
Local
Federal
State
Finance PlanningReports
Finance Options Report–Expand understanding of benefits and
costs –Develop financing options
Ten Year Finance Plan –Develop specific funding targets–ID unmet needs–ID financing strategy
Finance PlanningReports
Draft Finance Options Report provides Foundation for 10 year plan discussion:
• Annual funding targets for each element and task/project
• Schedule and readiness of projects • Potential benefits and beneficiaries • Possible finance strategies for each element
and task/project
Finance Planning Outreach
• Stakeholder and agency workgroups & informal meetings
• Legislative hearings & meetings• Public meetings and workshops • Independent Review Panel
– 8 member panel of academics and practitioners
Analysis For Developing Finance Plan
1. What are the reasonable funding
needs/targets?
2. What are the benefits?
3. Who are the beneficiaries?
4. How should costs be allocated?
5. What are the finance tools?
10 Year Finance PlanFunding Targets & Unmet
NeedsProgram Element Funding Targets Available Funding Unmet Needs
Ecosystem Restoration $1,701.3 $701.7 $999.6Environmental Water Account $416.1 $122.9 $293.2Water Use Efficiency $2,236.3 $1,348.2 $888.1Water Transfers $6.0 $6.0 $0.0Watershed $123.0 $51.6 $71.4Drinking Water Quality $264.4 $4.5 $259.9Levees $489.8 $61.4 $428.4Storage $1,034.5 $952.6 $81.9Conveyance $338.9 $143.6 $195.3Science $368.9 $22.5 $346.4Oversight & Coordination $123.0 $73.6 $49.4
Subtotal $7,102.1 $3,488.6 $3,613.4
Potential Capital ProjectsSurface Storage Construction $5,358.9 $0.0 $5,658.9Conveyance Construction $2,408.4 $149.5 $2,258.9Susiun Marsh Levees $101.0 $0.0 $101.0
TOTAL (including Potential Capital Projects) $15,270.4 $3,638.2 $11,632.2
What are the Benefits?
– Water supply (yield & reliability)
– Drinking Water Quality
– Ecosystem Improvement
– Flood Protection
– Hydropower
– Recreation
Measuring “Economic” Benefits
• More Easily Measured: Water supply,
water quality and flood protection
• More Difficult to Measure: ecosystem
improvements
Finance Tools For the Public Share
– State General Obligation Bonds– General Funds– Federal appropriations
For the User Share – Self Liquidating GO Bonds– State Revenue Bonds– SWP & CVP contractor charges– JPA Revenue Bonds– Local matching contributions– New State Administered Fees
New State Administered Fees
Fee versus Tax:• Need a Nexus between level of benefits and
amount paid in fees
• Each program in CALFED has different set of beneficiaries that would result in varying fee levels among water users
New Benefits Based Water User Fee
Finance Options Report suggests that a water user fee is best suited to programs with diffuse water user benefits & not able to identify individual beneficiaries such as:
• Ecosystem Restoration• Environmental Water Account• Drinking Water Quality• Delta Levees• Watershed
Example Finance Strategies
• Surface Storage Construction
• Groundwater Storage
• WUE (Conservation, Recycling, & Desalination)
• Ecosystem Restoration Program
Financing negotiated project by project based on willing beneficiaries
GW and WUE Grant Programs – Primarily local funding, Public share for broader statewide benefits
Public share - Future State bonds & Fed appropriations, Water User share - fee possible, Local cost shares
10 Year Finance PlanNext Steps
Before mid-October
• Refine funding targets and available funds
• Develop proposed cost sharing plan
• Continue outreach with agencies and stakeholders
Finance Planning Issues /Challenges
• Measuring or understanding benefits to support cost sharing
• Philosophical differences--property right vs. public trust
• Ensuring balance & linkages across Programs
• Large gap, no easy money, numerous interest groups & timeframe condensed