HomeMy WebLinkAboutSWRCB - Providing Safe Drinking Water through Consolidation of Water Systems and SB 623 Workshop Menchaca, Clarissa
From: Bennett, Robin
Sent: Monday, November 6, 2017 1:31 PM
To: Menchaca, Clarissa
Cc: McCracken, Shari; Schmidt, Dennis; Raevsky, Cathy; Gosselin, Paul; Snellings, Tim
Subject: FW: Notice of Joint Workshop with CPUC - Providing Safe Drinking Water through
Consolidation of Water Systems and SB 623
Attachments: Joint Workshop Notice_Safe Drinking Water.pdf
FYI, see the notice attached from the SWRCB for public workshop
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To: Bennett, Robin <RBen nett@buttecounty.net>
Subject: Notice of Joint Workshop with CPUC- Providing Safe Drinking Water through Consolidation of Water Systems
and SB 623
This is a message from the State Water Resources Control Board
Attached is a Notice of Workshop and Opportunity to Comment on Joint Workshop California Public Utilities Commission
and
State Water Resources Control Board Providing Safe Drinking Water through Consolidation of Water Systems and SB
623.
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State Water Resources Control Board
NOTICE OF WORKSHOP AND
NOTICE OF OPPORTUNITY FOR PUBLIC COMMENT
Joint Workshop
California Public Utilities Commission and
State Water Resources Control Board
Providing Safe Drinking Water through Consolidation of Water
Systems and SB 623
NOTICE IS HEREBY GIVEN that the State Water Resources Control Board (State Water
Board) and the California Public Utilities Commission (CPUC)will hold a joint workshop on
providing safe drinking water through consolidation and acquisitions of water systems and a
discussion on SB 623, which would create a safe and affordable drinking water fund. The
workshop will include expert panels on funding and governance challenges associated with
providing safe drinking water. The workshop will also be an opportunity for interested persons
to provide input to the State Water Board and CPUC. While a quorum of the State Water Board
and CPUC including board members and commissioners may be present, this will be an
informational workshop only, and the State Water Board and CPUC will take no formal action.
However, comments made at the workshop will become part of the record for CPUC proceeding
R.17-06-024. The workshop will be held on:
Monday, November 13, 2017 at 1:00 PM—5:00 PM
State Personal Board Auditorium (11"t Floor)
801 Capitol Mail
Sacramento, CA 95814
BACKGROUND
Under California's Human Right to Water Policy (Assembly Bill 685, Eng 2012), "every human
being has the right to safe, clean, affordable, and accessible water adequate for human
consumption ..."Although most of the state's residents receive drinking water that meets federal
and state drinking water standards, many drinking water systems in the state consistently fail to
provide affordable, safe drinking water to their customers. Lack of safe drinking water is a
problem that disproportionately affects residents of California's disadvantaged communities.
The State Water Board estimates that roughly 300 disadvantaged communities in the State
receive water from a public water system that does not meet drinking water standards. Many
small public water systems in disadvantaged communities lack the technical, managerial and
financial capacity to deliver safe drinking water at affordable rates. While larger systems have
F;U(; , MAn"'.0S. CHAIR ] EILEEN SOBIECK, EnCLITIVE DIPECTOF1
1001 1 Street.Sacramento.CA 95614 1 Mailing Address:P.O.Box 100,Sacramento.CA 958I2-0100 I www.witerboard%.Ca.gov
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the financial resources to hire well-trained and technically competent water system operators,
small systems may find it difficult to retain operators with sufficient expertise. Furthermore,
these communities often lack the financial resources to absorb the significant additional costs
required in order to treat their drinking water to meet standards. Although the State has been
able to assist disadvantaged communities with paying for the capital costs of the treatment
systems through financial assistance such as Proposition 1 and the Drinking Water State
Revolving Fund, there are no funding sources available to provide funding for long-term
operations and maintenance costs. Disadvantaged communities often lack the rate base to
demonstrate that they can afford operations and maintenance costs related to treatment of the
contaminants, with the result that they are effectively barred from accessing capital
improvement funding for this purpose. In contrast, generally larger water systems have the
financial capacity both to pay treatment costs and to provide for a well-trained and technically
competent workforce of water system operators.
Senate Bill 623 would provide a Safe and Affordable Drinking Water Fund in the State Treasury.
It would generate $2 billion dollars over the course of 15 years to alleviate the financial burden
placed on many communities to secure safe drinking water. The source of revenue would be
from a diverse group including farms, dairies, homes, and businesses. It is estimated that
SB 623 would generate $110 million dollars annually through a 95 cents monthly contribution
from water customers and up to a $10 monthly contribution from businesses. The other
$30 million would be committed through the agriculture and dairy industry. The Fund would
ensure direct assistance towards emergency water and for long-term operations and
maintenance cost in disadvantaged communities.
Benefits of Consolidation
Consolidation of water systems is a proven approach to addressing concerns around providing
safe drinking water to disadvantaged communities, in support of the Human Right to Water.
Consolidated water systems provide economies of scale and can save on operations and
maintenance costs by sharing such costs as billing and operational personnel, treatment costs,
and new water sources. Furthermore, consolidated water systems often can purchase time-
saving equipment that neither system could afford to purchase alone because they can spread
costs over a larger customer base. Physical consolidation can also result in lowered monitoring
costs. For example, two small water systems may each be required to sample monthly for
bacteriological quality in the distribution system, disinfection byproducts annually, and lead and
copper every three years, etc. When a receiving water system takes in a subsumed system
they may not see an increase in their sampling if the consolidation water system population
does not exceed certain thresholds. The subsumed water system could therefore see a saving
in monitoring costs, which could be passed on to the consumers. This can functionally reduce
monitoring costs by half. Additionally, water sources can often be shared, giving the water
systems more flexibility and reliability.
CPUC Role in Water System Consolidations
The CPUC regulates investor-owned water utilities across the state of California. The majority
of these water systems are small with fewer than 500 service connections. With increasingly
stringent water testing/quality requirements and the need for infrastructure investment, smaller
water systems typically do not possess the technical, managerial or financial capabilities to
operate viable utilities. As such, the CPUC has had a long standing policy to encourage the
consolidation of smaller water systems with larger water systems. This policy was formally
memorialized in the Public Utilities Code in 1997 when Chapter 2.5, titled "Public Water System
Investment and Consolidation Act of 1997,"was added. At the time, the Legislature found that
(1)water systems are faced with the need to replace or upgrade the public water system
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infrastructure, (2) increasing amounts of capital are required to finance the necessary
investment in public water system infrastructure, (3) scale economies are achievable in the
operation of public water systems, and (4) providing water corporations with an incentive to
achieve these scale economies will provide benefits to ratepayers. These concerns remain
valid today and the CPUC continues to make progress in water system consolidation. The
CPUC is neutral with regard to the acquiring water system ownership status, i.e. the acquirer
may be another investor owned utility, a publicly owned system, or a mutual utility. In addition,
since 2014, the CPUC has required its large multi-district water utilities to bring forth
consolidation proposals to increase the affordability of water for their customers.
State Water Board Role in Water System Consolidations
Another step towards achieving the Human Right to Water was the enactment of Chapter 27,
Statutes of 2015 (Senate Bill 88, Senate Committee on Fiscal Review), which authorizes the
State Water Board to require certain water systems that consistently fail to provide safe drinking
water to consolidate with, or receive an extension of service from another public water system.
Significantly, this law provides liability relief for the receiving water system, whether the
consolidation is mandatory or voluntary. The State Water Board posts relevant information
about its use of this authority at
http://www_waterboards.ca.gov/drinking water/programs/compliance/index.shtml.
In addition, the State Water Board actively uses its financial assistance programs to provide
incentives that encourage voluntary consolidations. More information can be found at
http_//www.waterboards.ca.gov/drinking water/certlic/drinkingwater/waterpartnership.shtml.
WORKSHOP OVERVIEW
The workshop will include staff presentations followed by expert panels on the topics of the role
of consolidations in providing safe drinking water and a discussion on SB 623. The panels will
be followed by public comments and Board member and Commissioner discussion. While a
quorum of the State Water Board and CPUC including Board members and Commissioners
may be present, this will be an informational workshop only, and the State Water Board and
CPUC will take no formal action.
PUPOSE OF WORKSHOP
The purpose of the joint workshop is to provide information on consolidation efforts and
discussion of SB 623 by both the CPUC and the State Water Board as a means of providing
safe drinking water, and to receive public input on how these efforts could be strengthened and
made more successful.
PARKING AND ACCESSIBILITY
For street parking and parking garage locations please refer to:
http://cityofsacramento.org/Public-Works/Parking-Services/Parking-Map.
The State Personal Board Auditorium is accessible to persons with disabilities.
ACCESS NOTICE AND AGENDA
To access the notice and the agenda please refer to the State Water Board's Calendar at:
https://www.waterboards.ca.gov/board info/calendar/index.html.
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ADDITIONAL INFORMATION
Please direct questions about this notice to either:
Mary Yang
State Water Resources Control Board
1001 1 Street
Sacramento, CA 95814
(916) 322-6507
Mary.Yanq@waterboards.ca.gov
Kevin Truong
California Public Utilities Commission
505 Van Ness Ave
San Francisco, CA 94102
(415) 703-1353
Viet.Truonq(Dcpuc.ca.gov
November 3, 2017 Com'Q.l�l FZk r
Date Jeania Townsend
Clerk o the Board