Financing Our Water Future May be This Generation’s Biggest Challenge

There can be little doubt that California’s water system is in need of a major upgrade. Large-scale investments are needed in everything from water storage capacity to water recycling facilities to levees. Substantial investments in ecosystem restoration and habitat improvements also are needed if we are to meet the co-equal goals of improved water supply reliability and ecosystem health.

Financing these investments is one of the key challenges facing this generation of water managers. The topic is fueling discussion in nearly every corner of the water policy arena, including a workshop convened this week by the Delta Stewardship Council. The Legislative Analyst’s Office and the Public Policy Institute of California have weighed in, and a new work group is tackling the issue as part of the California Water Plan process.

Meanwhile, legislation in the form of SB 34 (Simitian) awaits discussion and debate when the Legislature returns in January.

The topic is complex, but today’s dialog boils down to this: What is the appropriate mix of financing tools to fund needed investments in our water supply system?

As part of the comprehensive water package enacted in 2009, the Legislature approved a water bond now slated for the November 2012 ballot to fund a portion of the public benefits of the package. ACWA supports the water bond as an appropriate and much-needed mechanism to fund the public benefits of investing in our water system, but we must be prepared to address other financing options that may emerge in the coming months.

To help bring these issues into focus within the water community, ACWA President Paul Kelley has convened a task force on water finance composed of members of the ACWA Board and supported by experts from inside and outside the water world. The task force, which met for the first time this week, will consider specific policy principles for recommendation to the ACWA Board.

The effort could not be more critical. Our water infrastructure is being asked to do more than ever before as we move to operate our system to meet the co-equal goals. Where water projects once were operated solely for water supply purposes, today they are being managed to meet a host of ecosystem and species needs as well. Meeting these needs into the future will require tremendous investments, much of which will benefit the public at large. Broadly funding a portion of these investments with public funds is entirely appropriate.

Given the importance of these issues, it’s fitting that the theme of ACWA’s 2011 Fall Conference & Exhibition is “Financing Our Future.” I look forward to continuing the discussion.