Orange County Branch Newsletter
What the Passage of the Proposition 1 Water Bond will mean for Southern California
By Dave Eames, P.E., ENV SP and Nathan Chase, P.E., ENV SP | AECOM
On November 4, 2014 Californians passed a significant proposition that was high on the Governor’s list of priorities to facilitate funding for a large number of water restoration and conservation projects to be constructed over the coming decade. The $7.5B Proposition 1 Water Quality, Supply, and Infrastructure Improvement Act of 2014 (aka “Water Bond”) was smaller than the originally drafted $11.1B bond measure but still provides a significant amount of seed money to finance upwards of $25B to $30B in watershed management, restoration, and conservation projects. The goal is to fund various elements of a comprehensive 5-year Water Action Plan outlined by the Governor in January of 2014 to address the state’s water restoration, resilience, and reliability.
Once the bonds are sold to investors the money will go into the state budget and then get distributed to the various water agencies. The cost to taxpayers is estimated to be about $360M per year over the next 40 years, which works out to a total cost of approximately $14.4B (including principal and interest payments). Put another way, by dividing by the number of California taxpayers (roughly 16 million), Proposition 1 will cost each taxpayer $22.50 per year through 2055.
In total, about $2.4B will be sent to various state agencies including the State Water Resource Control Board and the Department of Water Resources for projects improving local resource management. Another $1.9B will be available for watershed and statewide flood management. The largest bucket of money, however, goes directly to the California Water Commission to be distributed to applicants through a competitive process for storage related projects in the Bay Delta watershed. The $2.7B in grants will be awarded to projects that demonstrate ‘public benefit’ and meet defined criteria including habitat restoration, improving water quality, reducing damage from floods, improving recreation, and responding to emergences. Another $520M will be allocated toward improving safe drinking water including money earmarked for small disadvantaged communities.
Although limited information is currently available regarding specific projects that will benefit from Proposition 1 and their timing, highlights for Southern California include the following:
- $63M for Santa Ana Region IRWM;
- $52M for San Diego IRWM;
- $100M additional for water use efficiency outside IRWM;
- Santa Ana Watershed, eligible for funds under the State Coastal Conservancy;
- San Juan Creek Basin, eligible for funds under storm water capture;
- Water Recycling beneficiaries may include a Seawater Desalination project, such as the proposed Dana Point or Huntington Beach projects;
- Southern California water agencies Groundwater Conjunctive Use projects;
- Salton Sea ecosystem restoration; and
$500M set aside for local conservancies including the Baldwin Hills Conservancy, Coachella Valley Mountains Conservancy, the Ocean Protection Council, the San Diego River Conservancy, the San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy, and the Santa Monica Mountains Conservancy.
It is also worth noting that the conveyance aspects of the Bay Delta Conservation Plan (BDCP) are excluded from Proposition 1 funding (e.g., the 30-mile, 40-foot diameter underground twin tunnels), though some Proposition 1 funds are designated for Delta habitat restoration. , 
The Governor’s 2015-16 Budget shows that $532M of the Proposition 1 funds will be made available initially for expenditures under the various investment categories, as shown in the figure below side-by-side with the total Proposition 1 funding. 
Significant attention will be placed on the decisions to be made in the coming months by the various agencies that must now determine how to spend these funds, with several rounds of applications likely that will be open to public agencies, non-profit organizations, public utilities, and mutual water companies. Improvements to the State’s water infrastructure and water management practices are critically needed to provide resilience to future droughts and increased demands due to population growth, and Proposition 1 funding will provide a new avenue for moving to a more sustainable water future for California.
 Pacific Institute, 2014. Online Document (http://pacinst.org/publication/insights-into-2014-california-water-bond/).
 Bay Delta Conservation Plan, 2013. Online Document (http://baydeltaconservationplan.com/PublicReview/PublicReviewDraftBDCP.aspx).
 State of California, 2015. Online Document (http://www.ebudget.ca.gov/2015-16/pdf/BudgetSummary/FullBudgetSummary.pdf).