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Water Package Analysis

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Water Package Analysis Powered By Docstoc
					The New Costs Triggered by The Delta Legislation Are Simply Unaffordable
The legislature has embarked on a major reform of the state’s water system, heedless of the enormous costs involved, just when the state’s financial condition has never been more dire. A realistic assessment of the total costs of the Delta legislation comes to $52B to $78B or more.
This $52B to $78B range of costs is the sum of three major components: • • • $18B–$44B for conveyance; $16B for new programs and projects in the Delta; and $18B in new statewide costs associated with a proposed $12.375B bond measure plus required matching.

A series of huge capital projects would be initiated by the Delta legislation including: new Delta conveyance, construction of several new surface storage reservoirs, construction of other local water management and delivery projects, Delta levee strengthening, ecosystem restoration, and creation of three new state agencies and expanded state programs to prepare and implement the Delta Plan.

The exporters have repeatedly stated they will pay the cost of new conveyance.
The $18B - $44B Delta conveyance cost estimate is based on “The Sacramento San Joaquin Delta – 2009, An Exploration of Costs, Examination of Assumptions and Identification of Benefits,” by Steve Kasower. These costs include the construction cost of building a canal or tunnel on an eastern or western alignment, plus necessary levee upgrades to continue through Delta operations, new rights of way, mitigation and relocation of impacted facilities/infrastructure. The reason for the wide range of estimated costs ($18B-$44B) is that a tunnel will be substantially more expensive than an open canal. • The $18B estimate comes from information in Table 1, second column: o $4.2B for Isolated Conveyance (eastern alignment) based on DWR work in 2008; plus o $9.8B for Through Delta Conveyance based on DWR work in 2008; plus o $4B for Mitigation Costs characterized as “mid-range.” • The $44B estimate comes from information provided in Table 1, third column: o $9.8B for Through Delta Conveyance (DWR); plus o $33B for Tunnel Conveyance based on actual construction costs for the London– Paris Channel Tunnel or “Chunnel;” plus o $2B for mid-range Mitigation Costs.

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All users of water from the Delta watershed will have to pay the $16B cost of new programs and projects in the “Delta Plan.” It is expected that the $16B cost of new programs and projects in the “Delta Plan” will be funded through a surcharge or fee on water use.
• • $16B in state water fees spread over 30 years is approximately $530M per year in new state water fees, not counting the likely fee increases over time. For the same urban customers south of the Delta who are financing the new Delta conveyance, this fee would come to $11B more on their water bills. $11B is approximately 70% of $16B and represents the share of new Delta costs attributable to urban users south of the Delta.

This $16B would provide: • $14B in levee repair and strengthening, plus new staffing costs for the Delta Plan. o The estimated cost for Delta levees is based on preliminary work conducted under the Delta Risk Management Strategy where costs for improving Delta levees to a variety of standards were estimated in 2008. The cost to improve the Delta levees to a seismically resistant standard is $13.812B in 2008 dollars. o Sections 85305(a) and 85306 of the Delta bill, AB 68, direct the Delta Plan to promote strategic levee investments and to recommend priorities for state investments in levee operation, maintenance, and improvements in the Delta, including both project and nonproject levees. o Levee repairs and maintenance will be necessary in order to maintain and protect costly ecosystem restoration projects, especially those projects that will be implemented on Delta islands. o The costs for new agencies and staff can be tabulated by reviewing the enacted budgets of current agencies such as the CALFED Bay Delta Authority, the Water Rights Division of the State Water Resources Control Board and the California Integrated Waste Management Board. • $2B for ecosystem restoration not included as part of the new Delta conveyance. o The $2B for Delta ecosystem restoration is the amount not accounted for when the $2B proposed under a $12.375B General Obligation Bond (draft SB 371 – 9/3/09) is subtracted from the $4B estimated cost of restoration presented by Kasower (2009), Table 1 - second and third columns, Restoration line item.

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A General Obligation bond of $12B has been proposed which has been linked to the “Delta package” but the actual price tag of the water projects identified in this GO bond measure is an additional $18B.
The proposed $12.375B bond measure (Cogdill, draft SB 371 9/3/09) contains several chapters where new costs and matching requirements are identified for delta improvements and infrastructure throughout the state: • • • • • • Chapter 6 - $2.325B for water supply reliability that would fund water supply management programs in hydrologic regions throughout the State with a required match of $1.19B in nonstate funds. Chapter 8 - $3B for Delta Sustainability, including $2B for ecosystem restoration and $1B for local improvements, including levee improvements. Chapter 9 - $4B for the public benefit portion of qualified storage projects and groundwater projects. Matching is required by SB 371 and draft AB 893 (9/11/09, Sec. 79745) requires it to be at least 50% (i.e. $4B for $8B of total costs). Chapter 10 - $1.5B for watershed and coastal protection throughout the state. Chapter 11 - $1.05B for groundwater cleanup and water quality improvement. Of this amount $0.3B devoted to stormwater quality may require matching of up to $0.3B. Chapter 12 - $0.5B for water recycling projects and requires non-state matching of at least $0.5B.

Due to the local match requirements of the bond bill, water customers will also have to pay another $6B to be eligible for state assistance in three major categories set forth in the bond measure. Therefore, the actual cost of the various proposed water infrastructure projects identified in the existing bond measure is $18B. This bond measure would provide: • • • • • • Over $2B for local water supply reliability projects, requiring a local match of up to 50%. $3B for Delta sustainability, including projects to improve water quality, and protect and restore fish and wildlife. $4B in continuous appropriations for surface water storage. This funding is for the public benefit portion of any project and requires a $4B match. $1.5B for conservation and watershed protection (including outside the Delta), and protect the Delta from invasive species. Over $1B for groundwater protection and water quality. $0.5B for water recycling and advanced treatment technologies, requiring a local match of at least 50%.

The State Treasurer has recommended user fees as the preferred financing tool, which is the method of financing used over the last hundred years to construct and operate California’s water storage and delivery infrastructure.
The State Treasurer has recently issued a report concluding that general obligation bonds are not the appropriate financing tool for new water infrastructure. Some of the financing for these $12B in water projects identified in the GO Bond measure may instead be paid for with additional user fees.
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Urban SWP and CVP customers located south of the Delta will pay the majority of the costs for this Delta legislation.
There are an estimated 24 million urban SWP and CVP customers located south of the Delta that comprise about 70% of the state’s population and will pay between $42B and $68B, which will likely to be amortized over thirty years. This $42B to $68B estimate includes the full cost of conveyance at $18B - $44B. It also includes $24B comprised of 70% of the $16B in costs for new Delta projects or programs and 70% of the $18B in new statewide costs associated with a proposed $12.375B bond measure plus the required matching.

The agricultural water districts have repeatedly told the Legislature that they can pay neither the costs of the new Delta conveyance, nor any fee on water use. This would shift all the costs enumerated above onto urban water customers in California.
As a result, urban water customers south of the Delta would carry the full cost of a new Delta conveyance, two-thirds of the cost of the Delta Plan, plus their share of surface storage and regional projects. In the absence of drastic cost-cutting, the debt service for these urban customers could come to more than $4B/year. This debt service estimate is based on the 6.5% benchmark used by the Legislative Analyst’s Office or $65 million per $1B borrowed. Based on the full share of costs for south of Delta urban customers of $42B to $68B, the debt service would range from $2.7B - $4.2B. Paying this huge price tag via water user fees on the water bill will result in more than doubling of the water rates for these urban customers, as well as additional huge annual water rate increases for many years into the future. The projected 2010 water sales revenues for the largest SWP urban contractor that serves more than half of the urban water customers south of the Delta are $1.1B (reference Metropolitan Water District Budget 2009/2010, page 30). To raise its $2B or more annual share of $4B/year in debt service, it would need at least an additional $2B over its $1B in current annual water sales revenues.

The money to pay the entire $52B to $78B price tag for the programs and projects associated with the Delta legislation will be demanded from the same Californians who are enduring the worst recession since the 1930s.
The state share of any bond repayments will strain the state’s already overburdened General Fund. This long-term over-commitment of taxpayer and ratepayer dollars must be rigorously scrutinized by the Legislature, and the costs scaled down to meet financial reality.

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S T R AT E G I C E C O N O M I C A P P L I C AT I O N S C O M PA N Y
R E S O U R C E S O L U T I O N S W I T H V I S I O N A N D V A L U E

T H E S A C R A M E N T O S A N J OA Q U I N D E LT A – 2 0 0 9
AN EXPLORATION OF COSTS, EXAMINATION OF ASSUMPTIONS, AND IDENTIFICATION OF BENEFITS THIS IS A DRAF T D OCUMENT PREPARED BY STEVEN KASOWER, PRINCIPAL

ST RAT EGIC EC ONOMIC APPLICAT IONS CO MPANY 1720 Q STREET S AC R A M E N T O, C A 9 5 8 1 1 - 6 7 1 7

Table 1 - Delta Facilities, Summary of Costs
Features Configurations User Pays Isolated and Through Delta Conveyance, Isolated East Conveyance, Through Delta Conveyance, Tunnel Mitigation Restoration Off-Stream Storage Total $4 B4 $4 B7 $5 B8 $4.2 B $4.2 B Tunnel and Through Delta Public Pays Isolated and Through Delta Tunnel and Through Delta

$9.8 B1,2

$9.8 B

$9.8 B

$9.8 B

$33 B3

$33 B

$2 B5 $4 B $5 B

$46

$2 $4 B $4 B $2.5

$2.59

$2.5

$2.5

$23 B

$53.8 B

$20.5 B

$47.3B

$6.5 B

$6.5 B

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Through Delta Improvements include levee earthwork, setback levees, channel dredging, intake, siphon, operable gates from California Department of Water Resources, “An Initial Assessment of Dual Delta Water Conveyance As requested by the Delta Vision Blue Ribbon Task Force,” May 2008 [online] http://deltavision.ca.gov/BlueRibbonTaskForce/June2008/Item_7_Attachment1.pdf

Both isolated as well as through Delta Facilities are required to provide the protection and yield from the Delta. This was from testimony of Greg Gartrell, Assistant General Manager, Contra Costa Water Agency, at the Joint Legislative Hearing on the 2009 Proposed Delta/Water, August 18, 2009 3 From text 4 This is a mid-range estimate. Estimates range from $2 Billion to $6 Billion from various sources. 5 Assumed to be in the midrange of values. 6 Users will pay for mitigation according to the testimony of Roger Patterson, Deputy General Manager, Metropolitan Water District of Southern California, at the Joint Legislative Hearing on the 2009 Proposed Delta/Water, August 18, 2009. 7 This is a guess only for tabular use. This number could be greater due to the political characteristics of “restoration” and the definition that is finally agreed upon. 8 Cost estimates presently are explained as ranges. For the purposes of this table, a total slightly lower than maximum was selected. 9 Discussions on off-stream storage options include discussions on a 50/50 split between project beneficiaries and the general obligations of the public.
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3|Page

An Initial Assessment of Dual Delta Water Conveyance

As requested by the Delta Vision Blue Ribbon Task Force Prepared by California Department of Water Resources

April 2008

Initial Dual Conveyance Assessment Delta Vision Report

Table 1 – Estimated Costs for Dual Conveyance Configurations A through D ($ Billion) CONFIGURATIONS B C

FEATURES Eastern Alignment 1 – Canal, intake, fish screen, pumping plant, control structure, siphons, bridges, culverts, utility relocation, railway impacts, forebay, land, some mitigation Western Alignment 2 – Canal, pipeline, pumping plant, pipeline, tunnel, forebay, no mitigation Through-Delta Improvements 1 3 – Levee earthwork, setback levees Through-Delta Improvements 2 – Channel dredging, intake, siphon, operable gates TOTAL

A

D

$4.2 B

$4.2 B

--

--

--

--

$7.4 B

$7.4 B

--

$8.6 B

$8.6 B

$1.2 B $4.2 B 5.4 B $14 B $7.4 B

$1.2 B 8.6 B $17.2 B

All estimates include a contingency cost for engineering, construction management, legal, and project administration costs of approximately 30%. The cost estimates do not include possible near-term through-Delta improvements being considered in the BDCP process. For configuration A, the cost for construction of the canal is the highest at 26% of the total cost, followed by the radial gates for the siphons at 17%. For configuration C, the cost of the tunneling is more than 50% of the total cost. For configuration D, the cost of the setback levees is the highest at 40% of the total cost, followed by tunneling at 27%. Retrofitting existing levees and constructing setback levees for the Through-Delta improvements are the most expensive features. Both of these costs were originally included to maintain the Through-Delta Component after a catastrophic earthquake. Due to the high cost associated with this approach, relying on the Isolated Conveyance
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Cost estimates for the eastern alignment include real estate, environmental documentation, and mitigation. Cost estimates for the western alignment include real estate. Cost estimates for the through-Delta improvements include environmental documentation and mitigation.

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April 23, 2008

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DWR Bay-Delta Office

Levee References
Levee cost estimate – CALFED Delta Levees and Habitat Subcommittee Handout 6/08 Total cost to repair the 87 islands identified by the Delta Risk Management Strategy to a seismically resistant standard = $13,812M Levee work is included in the Delta Plan - SB 68 9/11/09 85305. (a) The Delta Plan shall attempt to reduce risks to people, property, and state interests in the Delta by promoting effective emergency preparedness, appropriate land uses, and strategic levee investments. 85306. The council, in consultation with the Central Valley Flood Protection Board, shall recommend in the Delta Plan priorities for state investments in levee operation, maintenance, and improvements in the Delta, including both levees that are a part of the State Plan of Flood Control and nonproject levees. Fees are intended to fund the implementation of the Delta Plan - PP SB 1 8/4/09 Chapter 3. Other Users of Water from the Bay-Delta Watershed 85405. (a) There is hereby imposed an annual fee on each person or entity who holds a right, permit, or license to divert water within the watershed of the San Francisco Bay/Sacramento-San Joaquin Delta. The fee shall apply to holders of water rights, including riparian rights, appropriative rights without regard to the date on which those rights were perfected, pueblo rights, or any other rights to use water within the Delta watershed. (b) Until December 31, 2012, the council shall establish fees in an amount that provides only for the funding necessary to complete the Delta Plan, establish the council, and implement the early actions identified in Part 2 (commencing with Section 85080). The council shall establish these fees initially by emergency regulation. (c) Commencing January 1, 2013, and each year thereafter, the council shall, by regulation, set the fee schedule authorized by this section so that the total revenue collected from the fees equals the appropriate proposed annual budget; or, so that the total revenue collected from the fees equals the amount needed in the council’s judgment to accomplish both the following: (1) To pay the costs of facilities and program activities intended to mitigate damage to fish populations and other natural resources in the Delta and its tributaries that are reasonably related to the diversion of water and other activities of the holder of water rights subject to this section. (2) To pay the administrative costs and other costs of the council related to council activities financed pursuant to this part, including all costs incurred by the council or any other agency in establishing, administering, defending, or collecting the fees authorized pursuant to this section.

Population Threatened or endangered: # of unique species within levee boundaries (norm.)

Environmental Restoration opportunites (norm.) Existing habitat (alkali marsh, wetlands, and uplands) (norm.)

Levee geometry Average land elevation excluding levees (NAVD88) Lowest land elevation (NAVD88)

Others Flood risk (annual frequency of fai Importance Rating w/o water Export= W1*(Asset Rating) + W2*(Envir. importance) + W4*(Life Safety) Seismic risk (annual frequency of Life Safety (normalized by Smith Tract)

Criticality Rating Criticality Rating w/o Water Export Criticality Rating with Water Expor Normalized Criticality Rating with Water Export Normalized Criticality Rating w/o water exp. Vulnerability Rating = Flood risk + Seismic risk Recommended for improvement By SC Sub-Committee Criticality Rating = Importance rating * Vulnerability rating Sesismic improvement length (miles)

Repair Cost Estimate ($M) Seismic Resistant/Cost Per Mile

Levee Raise Cost (

Average levee crest elevation (NAVD88)

Sum of environmental assets (existing & potential)

Seismic Repair/Cost Per Mile

Importance rating with water export

Asset Rating (normalized by Smith Tract)

Criticality Rating with Water Export

Preserved Land (TNC/BLM)

Comments on Connectivity

Households (Census 2000)

Federal flood control levee (miles)

Environmental Importance (normalized by Elk Grove)

Population (Census 2000)

Water Export Importance

Average levee height (ft)

Urban Levee Standards

Seismically Repairable

1-Foot of Levee Raise

PL84-99/Cost Per Mile

Urban Levee Program

Seismically Resistant

Levee length (miles)

ID Name
1 2 3 4 5 6 7 8 9 Atlas Tract Bacon Island Bethel Island Bishop Tract Bixler Tract Boggs Tract Bouldin Island Brack Tract Bradford Island

Weights 896.7 5530.6 3463.6 3664.9 608.8 2152.2 5937.3 5327.6 2137.5 12644.6 2331.2 5182.8 11910.7 5251.6 745.5 962.9 4350.1 208.5 491.1 5910.6 441.3 2356.8 16525.0 3629.4 7171.8 93.5 9814.0 1298.4 16421.4 8136.1 4217.5 2857.4 3464.0 1186.2 3214.5 389.9 4518.3 5879.3 305.9 5813.2 6318.1 5213.8 1615.0 6062.5 4476.3 1165.4 4774.3 13081.6 3626.6 150.4 11371.6 7511.0 14.3 8.7 13.7 9.3 5.9 17.7 56.6 5,212 4,093 36,246 52,028 8,559 40,825 629,940 0 0 103 194 23 216 905 3.0 14.3 11.5 8.7 3.3 6.1 17.9 10.8 7.4 41.1 9.8 16.1 10.6 13.0 5.5 16.4 2.6 3.8 5.4 10.3 9.5 17.4 10.5 18.8 1.6 11.5 6.3 28.3 17.1 11.0 8.7 15.5 3.8 9.1 3.7 14.9 12.3 4.3 18.7 778,030 43,916 254,118 141,119 1,161 1,645,372 25,897 14,021 21,630 216,612 189,059 80,278 20,757 4,278 21,921 29,277 998 1,326 33,603 847 16,027 1,347,255 9,790 39,116 22 52,804 7,676 253,978 13,584 15,787 126,855 24,614 6,153 44,049 19,259 14,599 78,015 0 507,972 8139 180 2228 1041 0 9301 0 108 96 1639 47 137 35 20 24 35 4 0 210 105 22 9531 38 168 0 134 8 1137 83 27 968 13 79 237 176 0 149 0 284 2466 0 1069 355 0 2437 0 24 46 646 51 13 29 7 12 18 10 2 0 50 25 9 3415 11 41 0 39 2 404 30 11 396 6 28 96 63 0 55 0 6 20 0 0 0 56 1 77 99 2 1 93 44 0 0 0 0 1 1 4 8 0 2 1 3 1 3 0 1 10 1 1 1 5 9 6 3 1 5 2 17 1 0 1 1 0 1 2 1 0 4 2 2 1 1 0 4 0 0 0 0 0 10 0 3 0 1 1 2 6 1 1 1 0 0 0 0 1 0 1 0 1 7 1 0 1 2 2 6 4 1 4 0 0 0 7 0 0 4 1 0 10 1 1 0 3 0 1 4 9 3 8 0 0 1 3 1 0 2 1 1 1 1 2 1 1 2 1 5 3 1 1 1 1 1 1 2 8 2 0 2 5 5 7 8 4 8 2 1 0 15 1 0 5 1 0 20 2 4 0 3 1 4 13 10 4 11 0 0 1 4 1 0 4 16 11 12 12 13 21 12 12 10 17 19 15 20 14 20 13 15 18 9 22 22 27 32 11 24 11 17 30 24 19 12 10 11 34 12 24 14 30 0 12 13 11 20 13 33 11 27 19 13 12 15 24 10 -13 -3 2 10 10 -14 -4 -7 -11 -2 -2 10 0 2 -5 15 -5 0 4 10 8 13 -15 4 -4 10 10 -6 6 -7 1 -7 26 -9 9 5 7 3 -10 -6 -14 4 -14 26 -10 7 2 -2 -1 -8 10 -7 -20 -19 -17 -3 -16 -24 -18 -23 -24 -13 -15 -4 -16 -6 -14 -8 -10 -8 -8 3 -15 -9 -25 -7 -6 -9 0 -17 -6 -18 -13 -24 17 -18 -6 -5 -5 -6 -18 -17 -23 -4 -24 6 -18 -3 -16 -11 -8 -21 -2 6 24 15 10 4 11 26 17 17 28 21 18 10 14 17 18 -1 23 9 18 12 19 19 26 19 14 7 20 30 13 19 8 18 8 21 15 9 23 -3 22 19 25 16 27 7 22 20 17 15 14 22 15 0.10 nat. gas, Hwy 4 Hwy 4 liqu. gas liqu. gas nat. gas 10.3 17.8 5.6 0.10 0.10 0.10 nat. gas nat. gas nat. gas 7.5 0.10 0.10 nat. gas nat. & liqu. gas 0.10 nat. gas 6.6 0.10 8 mi rd 0.8 0.10 0.10 nat. gas nat. gas 5.3 0.10 0.10 nat. gas, Hwy 160 & 220 nat. gas 0.10 0.10 0.10 0.10 nat. gas, Hwy 160 & 5 Yes 8 Mile Rd nat. gas nat. gas, Hwy 5 1.7 28.0 15.7 32.0 1.8 7.1 0.10 0.10 0.10 0.10 nat. gas, Hwy 5 nat. gas nat. gas nat. gas 10.5 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Hwy 5 Yes nat. gas nat. gas Hwy 5, 8 mi rd Yes liqu. gas, Hwy4 Yes Hwy 12 nat. gas nat. gas nat. gas, Hwy 12 & 160 Hwy 4 nat. gas 18.6 18.0 11.2 1.9 4.1 2.7

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1

1

1
51.2 543.3 408.5 208.4 127.0 684.3 356.8 292.7 1584.6 East side only 348.7 497.6 376.9 0.02 462.3 208.6 58.6 190.9 390.3 363.4 372.8 489.7 296.9 1007.4 512.8 East side only 400.8 295.6 591.5 79.8 323.1 132.1 17.2 37.9 35.6 24.1 20.8 38.2 33.0 39.4 38.6 35.6 30.8 35.6 35.6 38.1 22.6 35.6 37.7 20.8 35.6 26.1 25.9 35.6 30.0 36.6 34.0 38.2 20.8 35.6 35.6 55.6 699.1 426.2 221.5 136.1 937.9 370.9 417.6 2123.3 363.7 557.8 393.2 482.3 272.2 59.6 199.1 493.9 389.5 388.9 518.1 361.7 1051.0 549.3 459.9 309.0 776.7 85.5 337.0 137.8 18.7 48.8 37.1 25.6 22.3 52.3 34.3 56.2 51.7 37.1 34.6 37.1 37.1 49.8 23.0 37.1 47.7 22.3 37.1 27.6 31.5 37.1 32.2 41.9 35.5 50.2 22.3 37.1 37.1 6.2 54.1 32.1 20.1 12.8 72.7 30.3 32.7 163.5 27.4 44.9 29.7 36.4 21.1 7.3 15.0 38.2 36.6 29.3 44.1 31.2 79.3 44.3 35.1 23.7 60.3 8.0 25.4 10.4 2.1 3.8 2.8 2.3 2.1 4.1 2.8 4.4 4.0 2.8 2.8 2.8 2.8 3.9 2.8 2.8 3.7 2.1 2.8 2.3 2.7 2.8 2.6 3.2 2.7 3.9 2.1 2.8 2.8 36.3 198.0 151.5 108.3 74.3 246.1 142.7 111.4 563.3 129.3 211.4 139.8 170.1 72.2 34.2 70.8 146.9 212.7 138.3 229.1 148.7 373.6 220.1 144.7 113.9 214.1 46.7 119.8 49.0 12.2 13.8 13.2 12.5 12.2 13.7 13.2 15.0 13.7 13.2 13.1 13.2 13.1 13.2 13.2 13.2 14.2 12.2 13.2 12.2 13.0 13.2 12.9 13.2 13.1 13.8 12.2 13.2 13.2

Urban/Cost Per Mile

Total assets ($1000)

Connectivity

Area (acres)

PL84-99

1
0.087 0.233 0.159 0.120 0.128 0.253 0.176 0.176 0.270 0.182 0.122 0.156 0.180 0.184 0.226 0.184 0.132 0.190 0.249 0.198 0.096 0.284 0.143 0.194 0.107 0.188 0.099 0.210 0.162

3
0.285 0.725 0.503 0.386 0.408 0.785 0.553 0.552 0.834 0.572 0.391 0.493 0.564 0.577 0.702 0.577 0.422 0.596 0.773 0.618 0.311 0.878 0.452 0.606 0.345 0.589 0.323 0.655 0.510

10 Brannan-Andrus Island MERGE Upper Andrus Island 11 Byron Tract 12 Cache Haas Area 13 Canal Ranch 14 Clifton Court Forebay South 15 Coney Island 16 Cosumnes River Area 17 Deadhorse Island 18 Dutch Slough 19 Egbert Tract 20 Little Egbert Tract 21 Ehrheardt Club 22 Elk Grove 23 Empire Tract 24 Fabian Tract 25 Fay Island 26 Glanville Tract 27 Glide District 28 Grand Island 29 Hastings Tract 30 Holland Tract 31 Hotchkiss Tract 32 Jersey Island 33 Kasson District 34 King Island 35 Libby McNeil Tract 1 36 Liberty Island 37 Lisbon District + Glide 38 Little Mandeville 39 Lower Jones Tract MERGE Upper Jones Tract 40 Mandeville Island 41 McCormack Williamson Tract 42 McDonald Tract 43 McMullin Ranch 44 Medford Island 45 Merritt Island 46 Middle Roberts Island MERGE Drexler Tract MERGE Holt Station MERGE Lower Roberts Island MERGE Upper Roberts Island

663.9 564.4 301.6 411.8 193.1 143.3 369.7 Needs further investigati 1645.1

35.6 39.4 34.6 30.0 20.8 24.3 20.8 29.1

692.6 805.2 314.2 501.3 207.0 163.9 396.3 1743.2

37.1 56.2 36.0 36.5 22.3 27.8 22.3 30.8

52.2 63.0 24.4 47.7 19.5 20.7 37.3 148.7

2.8 4.4 2.8 3.5 2.1 3.5 2.1 2.6

246.2 211.2 115.1 191.7 113.1 79.2 216.4 715.1

13.2 14.8 13.2 14.0 12.2 13.4 12.2 12.6

0.218 0.198 0.246 0.171 0.258 0.091 0.215 0.206 0.181

0.679 0.618 0.763 0.538 0.798 0.298 0.671 0.643 0.568

3-Foot of Levee Raise

47 Netherlands 48 New Hope Tract 49 Palm-Orwood Tract 50 Paradise Junction 51 Pescadero 52 Peter's Pocket 53 Pico Naglee Tract 54 Pierson Tract MERGE Randall Island 55 Prospect Island 56 Quimby Island 57 RD 17 (Mossdale) 58 Rindge Tract 59 Rio Blanco Tract 60 River Junction Tract 61 Rough and Ready Island 62 Ryer Island 63 Sacramento Pocket Area 64 Sargent Barnhart Tract East 65 Sherman Island 66 Shima Tract 67 Shin Kee Tract 68 Smith Tract 69 Stark Tract 70 Staten Island 71 Stewart Tract MERGE Mossdale RD 2107 72 Sutter Island 73 Terminous Tract 74 Tinsley Island 75 Twitchell Island 76 Tyler Island 77 Union Island 78 Veale Tract 79 Venice Island 80 Victoria Island 81 Walnut Grove 82 Walthal Tract MERGE Wetherbee Lake 83 Webb Tract 84 Weber Tract 85 West Sacramento 86 Woodward Island 87 Wright-Elmwood Tract

25307.8 8128.0 4857.7 3553.8 7518.7 3382.8 6595.3 8804.4 410.4 2226.2 769.9 9768.6 6742.6 1502.9 3496.6 1412.8 11776.4 27302.0 2190.5 10268.0 2668.9 2160.1 2897.3 706.1 9093.4 3985.9 1050.5 2533.4 12439.1 59.1 3568.3 8798.3 24685.8 1706.2 3095.4 7195.7 473.0 2763.2 63.2 5440.9 642.4 12789.1 1814.9 2108.3

41.8 13.6 16.5 7.0 9.0 7.5 10.1 15.9 14.5 7.0 15.8 15.8 5.8 12.9 6.8 20.2 15.7 7.9 19.4 7.0 6.5 11.3 5.1 25.3 17.8 12.4 20.5 1.3 11.9 22.9 33.0 5.4 12.4 15.0 2.9 6.2 12.9 3.8 23.4 8.9 7.1

204,429 88,106 273,734 130,789 225,692 2,138 388,892 89,103 1,788 626 969,933 18,516 9,988 43,006 103,353 61,494 28,781,540 2,036,301 114,940 997,638 12,324 2,690,573 5,199 20,596 53,787 26,333 94,399 0 14,493 92,866 156,763 27,975 13,308 57,078 55,332 52,374 416 385,752 4,156,570 124,671 16,429

1039 689 97 3917 583 28 1107 638 4 0 9286 43 0 316 0 276 237968 13620 216 11392 9 25432 12 42 196 115 652 0 115 101 540 131 4 196 479 333 2 5313 31606 0 2

321 238 19 28 187 8 341 157 35 1 0 2661 12 0 111 0 79 92129 5536 110 4001 3 10265 5 12 11 63 42 270 0 55 42 112 46 2 7 172 118 1 1755 11401 0 1

1 1 0 1 1 2 1 1 0 0 4 1 0 1 1 1 8 0 3 1 3 1 0 0 1 1 2 1 0 1 3 0 1 1 0 1 1 1 4 1 0

3 2 1 1 1 1 1 3 5 1 0 1 0 1 1 1 3 0 3 0 1 1 0 1 1 0 2 0 1 1 2 1 1 1 0 1 3 0 7 0 1

1 1

5 4 1 2 3

27 19 12 32 26 18 27 29 28 18 12 28 11 12 37 15 25 37 17 14 14 13 17 23 15 27 28 26 13 0 12 15 20 12 11 14 22 30 30 11 15 33 11 12

4 4 -7 21 15 10 9 1 12 3 -10 13 -12 3 28 6 -5 22 6 -9 5 4 12 11 -12 13 18 3 -5 9 -12 -9 2 0 -16 -8 1 23 20 -13 16 17 -10 -5

-10 -12 -17 8 0 0 -5 -14 -3 -5 -18 -20 -26 -8 9 -12 -13 -14 -18 -42 -27 -15 -15 3 -22 2 5 -10 -23 -3 -21 -19 -17 -13 -23 -16 -15 -3 13 -30 -8 -12 -18 -17

22 15 19 11 11 8 17 28 15 15 23 14 23 9 9 9 29 15 11 24 9 9 5 13 27 13 10 23 18 -9 23 25 18 11 27 22 21 7 10 24 0 16 21 17

0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

Hwy 84 nat. gas, Hwy 5 nat. & liqu. gas Hwy 5 nat. & liqu. gas, Hwy 5 nat. gas nat. gas Hwy 160 6.8 1.8 5.0 6.5 6.8

892.0 381.5 563.1 146.3 188.3 157.2 209.7 439.9

21.4 28.1 34.2 20.8 20.8 20.8 20.8 27.6

954.7 402.1 588.4 156.8 201.8 168.5 224.8 464.1

22.9 29.7 35.8 22.3 22.3 22.3 22.3 29.1

89.4 33.2 45.0 14.7 19.0 15.8 21.1 38.6

2.1 2.4 2.7 2.1 2.1 2.1 2.1 2.4

509.5 172.2 215.7 85.6 110.2 92.0 122.8 201.7

12.2 12.7 13.1 12.2 12.2 12.2 12.2 12.7

0.222 0.162 0.196 0.125 0.130 0.105 0.180 0.266

0.691 0.510 0.611 0.401 0.416 0.341 0.565 0.823

1

3 2 5 5 1 4 1 0 2 2

267.9 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Hwy 5 Yes Hwy 5 nat. gas liqu. gas Hwy 220 & 84 nat. & liqu. gas, Hwy 5 Yes liqu. gas, Hwy 5 Yes nat. gas Hwy 5 Hwy 5 Hwy 5 Yes nat. gas nat. gas Hwy 5 Hwy 160 Hwy 12 nat. gas nat. gas nat. gas 2.4 12.2 1.1 Low-cost seismic improv Consider PL-84-99 and E 12.2 20.6 12.4 4.1 2.9 20.3 8.0 4.5 9.6 Repair under an existing 5.4 242.1 734.1 328.2 234.9 694.5 218.2 136.3 296.5 106.4 885.9 371.2 300.7 665.0 442.9 808.5 818.3 148.9 461.2 0.10 nat. gas, Hwy 4 1.0 3.2 0.2 0.10 0.10 0.10 nat. gas nat. & liqu. gas, Hwy 84 Yes liqu. gas 11.8 Repair under an existing 562.5 87.8 130.2 509.1 487.6 317.4 253.6 Repair under an existing 328.5 482.1 121.2

38.2 20.8 30.6 20.8 35.6 36.3 20.8 29.8 35.7 31.0 20.8 26.1 20.8 35.0 20.8 24.2 32.4 37.3 35.3 24.8 27.7 37.2 37.4 30.5 20.8 39.4 20.8 35.6 35.9

351.1 352.2 499.2 130.0 252.6 820.5 351.8 247.0 1228.5 226.5 146.1 313.7 114.0 923.5 397.9 319.4 696.4 624.2 843.2 998.0 157.1 623.9 693.3 94.9 139.6 726.3 522.7 331.2 274.6

50.0 22.3 31.7 22.3 37.1 40.5 22.3 31.3 63.2 32.2 22.3 27.7 22.3 36.4 22.3 25.7 33.9 52.5 36.8 30.2 29.2 50.3 46.1 32.9 22.3 56.2 22.3 37.1 38.9

27.2 33.1 44.1 12.2 19.0 62.5 33.1 19.9 92.7 19.5 13.7 26.7 10.7 71.0 37.4 29.2 54.4 52.3 64.1 88.9 13.0 49.9 53.4 8.5 13.1 56.8 49.1 25.0 20.8

3.9 2.1 2.8 2.1 2.8 3.1 2.1 2.5 4.8 2.8 2.1 2.4 2.1 2.8 2.1 2.3 2.6 4.4 2.8 2.7 2.4 4.0 3.5 2.9 2.1 4.4 2.1 2.8 3.0

101.2 192.3 207.9 71.0 89.8 273.6 192.1 101.0 297.4 89.4 79.8 142.4 62.3 334.6 217.3 156.0 266.7 174.7 302.1 418.3 65.6 180.7 204.1 38.0 76.2 193.7 285.4 117.7 93.1

14.4 12.2 13.2 12.2 13.2 13.5 12.2 12.8 15.3 12.7 12.2 12.6 12.2 13.2 12.2 12.6 13.0 14.7 13.2 12.7 12.2 14.6 13.6 13.2 12.2 15.0 12.2 13.2 13.2

0.223 0.156 0.229 0.112 0.112 0.279 0.161 0.126 0.234 0.113 0.113 0.078 0.142 0.262 0.147 0.231 0.186 0.229 0.243 0.183 0.131 0.259 0.217 0.209 0.098 0.235 0.170 0.209 0.175

0.694 0.493 0.711 0.361 0.360 0.860 0.507 0.402 0.726 0.364 0.364 0.260 0.451 0.809 0.464 0.718 0.583 0.712 0.752 0.574 0.418 0.803 0.677 0.652 0.320 0.729 0.534 0.652 0.551

1

2 11 0

3

9 1 4 1

1 1 1 1 1 1 7 1 1 1 5

1 7 3 2 5 1 2 2 11 1 2 3 1 1

2

5 1 11

1

2 1

11,081

30.04

13,812

34.29

1,772

2.84

8,692

13.05

0.18

0.57

Average Cost per mile Total cost of repair

($M/mile)

6
0.645 1.524 1.080 0.846 0.890 1.644 1.181 1.179 1.742 1.218 0.856 1.060 1.203 1.228 1.479 1.229 0.918 1.267 1.620 1.310 0.697 1.830 0.979 1.287 0.764 1.252 0.721 1.384 1.095

1.433 1.310 1.601 1.150 1.671 0.671 1.416 1.361 1.211

6-Foot of Levee Raise

1.456 1.094 1.297 0.876 0.907 0.756 1.204 1.720

1.463 1.061 1.497 0.796 0.795 1.795 1.089 0.878 1.527 0.802 0.802 0.595 0.976 1.693 1.003 1.511 1.241 1.499 1.579 1.223 0.911 1.680 1.429 1.378 0.714 1.532 1.143 1.379 1.177

1.21

Bill
Lockyer,
Treasurer

 California
State
Treasurer

 October
1,
2009



Fellow	Californians:	 The	recession	that	has	rocked	the	national	economy	and	world	financial	markets	has	dealt	our	State	and	local	government	 finances	a	powerful	blow .		In	the	past	year,	the	Governor	and	Legislature	were	forced	by	rapidly	falling	revenues	and	rising	 unemployment	to	enact	three	different	versions	of	the	annual	budget	before	completing	their	work	on	the	2009­10	spend­ ing	plan .		Along	the	way,	the	State	was	forced	to	suspend	or	delay	work	on	more	than	5,000	job­creating	infrastructure	 projects	to	conserve	cash	for	vital	public	services .	 State	budget	writers	ultimately	had	to	overcome	an	unprecedented	cumulative	shortfall	of	close	to	$60	billion . 	Doing	so	 came	at	great	cost	to	funding	for	our	schools,	universities,	and	health	and	human	services	programs .		Cities,	counties	and	 local	districts	were	forced	to	deal	with	losses	of	similar	magnitude .	 Their	finances,	like	State	government’s,	remain	at	risk	 of	substantial	deficits	for	at	least	the	next	three	years	as	California	gradually	recovers	from	what	is	likely	the	worst	and	 longest	recession	since	the	Great	Depression .	 For	our	2009	Debt	Affordability	Report,	“The	Investments	We	Need	for	the	Future	We	Want:	California	Needs	a	Master	 Plan,”	I	asked	our	staff	to	survey	the	damage	done	by	the	recession	and	dysfunctional	credit	market	to	our	state’s	ability	to	 finance	its	critical	infrastructure	needs .	 The	Report	assesses	the	effects	over	the	near­term	and	the	next	two	decades,	and	 updates	the	findings	of	our	2007	Debt	Affordability	Report .	 That	edition	underscored	the	need	for	longer­range	planning	 for	capital	projects	and	to	better	integrate	infrastructure	priority­setting	within	the	State	budget	process .	 This	year’s	report	concludes	the	fiscal	earthquake	that	struck	California	in	2008	and	2009	will	cause	debt	service	to	con­ sume	a	larger	piece	of	the	State’s	General	Fund .	 The	portion	will	grow	from	the	current	6 .7	percent	to	10	percent	or	more	 by	the	middle	of	the	next	decade	unless	the	budget	improves .		So	it	is	more	urgent	than	ever	to	arrive	at	consensus	about	 infrastructure	needs	and	financing	costs	and	to	incorporate	careful	debt	planning	into	the	budget	process .	 The	current	debate	about	how	to	finance		improvements	to	California’s	water	infrastructure	system	provides	a	timely	and	 pressing	case	study .		Some	have	suggested	paying	the	entire	cost	with	State	general	obligation	bonds,	which	must	be	repaid	 from	the	General	Fund .		But	this	report	makes	clear	that	further	increasing	the	General	Fund’s	debt	burden,	especially	in	 the	next	three	difficult	budgets,	would	require	cutting	even	deeper	into	crucial	services	already	reeling	from	billions	of	dol­ lars	in	reductions .	 The	case	for	user­funding	for	most	water	system	improvements	is	compelling,	both	as	a	matter	of	equity	 and	fiscal	prudence .	 Exactly	50	years	ago,	the	Legislature	and	Governor	Edmund	G .	“Pat”	Brown	established	a	Commission	on	a	Master	Plan	 for	Higher	Education .	 The	members	included	higher	education	leaders	and	expert	public	members .	Charged	with	devel­ oping	a	blueprint	for	meeting	the	higher	education	demands	of	our	rapidly	growing	state,	the	Commission	completed	its	 work	within	a	year .	 The	Master	Plan	laid	out	specific	guidelines	for	financing,	constructing	and	allocating	resources .		For	 the	following	four	decades,	it	guided	decisions	and	measured	success,	and	California’s	higher	education	system	became	the	 best	on	the	planet .	 Today,	we	need	the	same	bipartisan	commitment,	good	will	and	good	sense	to	plan	and	build	the	kind	 of	California	we	want	for	ourselves,	our	children	and	our	grandchildren .	 So	this	report	urges	the	creation	of	a	Commission	on	a	Master	Plan	for	Infrastructure	Financing	and	Development .	 The	 Commission	would	complete	a	thorough	and	public	assessment	of	the	state’s	infrastructure	needs,	costs	and	financing	 alternatives .		And	it	would	produce	a	blueprint	and	timetable	for	building	a	California	that	is	prosperous	and	a	great	place	 to	call	home .		In	addition	to	creating	the	Commission,	I	urge	the	Legislature	and	Governor	to	permanently	and	systemati­ cally	incorporate	the	state’s	infrastructure	finance	needs	into	the	annual	budget	process .	 I	commend	and	thank	the	staff	of	the	State	Treasurer’s	Office,	and	our	financial	advisers	and	economists .	They	helped	us	 make	sense	of	the	rapid	and	often	chaotic	events	that	so	profoundly	changed	California’s	finances	over	the	past	two	years .	 Their	efforts	made	it	possible	to	deal	effectively	with	severe	difficulties	while	keeping	close	watch	on	California’s	future	 well­being .	 On	their	behalf	and	mine,	thank	you	for	the	opportunity	to	serve	the	people	of	California .	

BILL	LOCKYER	 California	State	Treasurer	

C a l i f o r n i a ’ s

lao Projections

Fiscal Outlook

2008-09 Through 2013-14

November 2008 Mac Taylor Legislative Analyst

California’s Fiscal Outlook

extent to which the financial and credit markets stabilize following their October disruptions. Debt–Service Ratio (DSR). The DSR for bonds—that is, the ratio of annual General Fund debt–service costs to annual General Fund revenues and transfers—is often used as one indicator of the state’s debt burden. There is no one “right” level for the DSR. However, the higher it is and more rapidly it rises, the more closely bond raters, financial analysts, and investors tend to look at the state’s debt practices, and the more debt–service expenses limit the use of revenues for other programs. Figure 7 shows what California’s DSR has been in the recent past and our DSR projections for the forecast period. We estimate that: •	 The DSR for infrastructure bonds will rise to 7.8 percent in 2011–12 before falling to 7.5 percent by 2013-14. Thereafter, it will steadily decline as outstanding bonds are paid off. If the state’s deficit–financing bonds (known as Economic Recovery Bonds) are included in DSR, it would peak at 9.4 percent in 2011-12. It is anticipated that these bonds will be paid off following our forecast period, at which time the DSR
Figure 7

will drop down to reflect only infrastructure bonds. As noted in the figure, the DSR we are projecting is considerably higher than in past years. In part, this reflects the sharp fall-off in General Fund revenues we are projecting, which has the effect of driving the ratio up for a given level of debt service. It also is important to note that to the extent additional bonds are authorized and sold in future years beyond those already approved, the state’s debt–service costs and DSR would be higher than projected above. For example, each additional $1 billion of bonds authorized would add roughly $65 million annually to debt–service costs once they are sold.

Projected Debt-Service Ratioa
10% 9 8 7 6 5 4 3 2 1 Infrastructure Budget-Related

•	

90-91 92-93 94-95 96-97 98-99 00-01 02-03 04-05 06-07 08-09 10-11 12-13 Forecast
aRatio of annual debt-service payments to General Fund revenues and transfers.

42

Legislative Analyst’s Office

Population Data
Urban SWP and CVP customers located south of the Delta are about 70% of state population Source: DWR (B160-05), referencing 2000 Population. (B160-09 does not use 2005 data yet) Total State Population (2000) = 34,000,000 Those receiving water from Delta watershed = 32,000,000 (94%) Using DWR population (2000), SWP population looks close to 22,000,000 w/o double counting. Other urban receiving from CVP only = 2,000,000+ (Fresno, CCWD, Tracy, San Juan, EDID, SEWD, etc.) Urban population served by SWP & CVP = 24,000,000 (2000 Pop.); CVP is mostly North of Delta Tracy P.P. (subtract 1M) 23M/34M = 67.6% (roughly 2/3 of State population) · This percentage applies to statewide cost 23M/32M = 72% of those reliant on Delta watershed. · This percentage applies to Delta watershed costs MWD serves more than half of the urban south of Delta customers Based on population MWD population served = 18.2M (MWD “At A Glance” Fact Sheet) Total SWP CVP urban population = 24M (this is not limited to south of Delta and will yield a conservatively low estimate of MWD’s portion) (18.2M/24M)x100= 76% Based on water volume SWP Urban South of Delta (based on Table A Allocations) South Bay = Central Coast = MWD = Other So Cal = 210,000 AF 70,486 AF 2,011,500 AF 271,350 AF {at 50% split Urban-Ag}

Total Urban SWP South of Delta = 2,563,000 AF (63%) MWD share of SWP South of Delta – (2,011,500/2,563,000)x100= 78%

BUDGET 2009/10

Five-Year Financial Forecast

Figure 11 illustrates historical and forecasted sales. The expected case projection is based on normal weather (average condition). The high and low forecasts represent sales levels that could occur under dry and wet hydrologic conditions.
Figure 11. Water Sales*

In addition to hydrology, other major factors affecting sales include retail demand and local supply production. The level of water sales is the most influential variable affecting future water rates.

* Includes Exchange sales

SOURCES OF FUNDS

Water Sales Receipts
Water sales receipts are expected to increase from $1.1 billion in 2009/10 to $1.5 billion in 2013/14. This increase is due to anticipated rate increases and water sales. Fixed charge receipts (readiness-to-serve and capacity charge) are expected to increase from about $136.5 million in 2009/10 to $197.9 million in 2013/14. A forecast of the major receipts categories for the next five years is shown in Figure 12. Property tax and annexation revenue is expected to decrease from $91.4 million in 2009/10 to $83.2 million in 2013/14. This is based on the maximum tax rate allowed under Section 124.5 of the Metropolitan Water District Act. 2009/10 Annual Budget
31

Power sales from Metropolitan’s hydroelectric power recovery plants, excess Colorado River power, and DVL power generation are projected to average about $26.1 million per year over this period. Interest income is projected to average about $41.5 million per year over this period. The average return on the investment portfolio is expected to be 4.5% from 2009/10 to 2013/14.

Five-Year Financial Forecast


				
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