$9 billion urged for water programs

SACRAMENTO -- Gov. Arnold Schwarzenegger unveiled a $9-billion bond package Tuesday that would pay for three new or expanded dams and amount to an unprecedented level of taxpayer financing for water projects.

With drought and court-imposed cutbacks looming, the governor’s proposal kick-starts what is expected to be several weeks of intense negotiations with legislators to place a water bond on the Feb. 5 ballot.

Schwarzenegger’s insistence upon dam projects in the Bay Area and in the Sacramento and San Joaquin valleys puts him at odds with most Democratic legislators. They say the state will get more water at lower cost by cleaning up polluted groundwater supplies and recycling and conserving water.

The bond proposal also breaks with historical water development in California, where most major water projects have been financed by the federal government or specific water users -- not by taxpayers at large.

The Republican governor’s latest, most detailed proposal involves $3.6 billion more in borrowing than what Senate leader Don Perata, an Oakland Democrat, has proposed in a bond measure of his own. Perata would not preclude local water districts from competing for state money to help build dams in his $5.4-billion proposal, but his plan would not earmark state money for specific dams.

“We’re not saying we’re not for dams,” Perata said, “but what we are saying is: Let the dams compete with other things. This is kind of ironic for me to say instead of the governor: Let the market run its course.”

Perata predicted that Schwarzenegger would be forced in negotiations to drop specific dam projects because, he said, Southern California taxpayers -- who would pay the largest share of those costs -- will prefer more cost-effective ways to expand supply.

“He’s either going to come our way,” Perata said, “or there will be no way.”

Last week, the governor declared a special legislative session on water to force legislators to keep working on the issue through their fall break. Some legislative leaders had hoped to strike a deal by Thursday, before at least 19 legislators depart for overseas trips. Or, they say, they will negotiate for at least the next several weeks -- as long as they can before an undetermined deadline for printing a supplemental ballot pamphlet for the Feb. 5 presidential primary election.

Schwarzenegger’s proposal would invest in expanding Millerton Lake on the San Joaquin River northeast of Fresno. Farmers in the area complain that the existing lake is not big enough to meet their needs, those of city dwellers or of salmon downstream.

The governor would also fund a new reservoir in the hills of Glenn and Colusa counties, where water would be piped from the Sacramento River 16 miles away. And he would expand the Contra Costa Water District’s Los Vaqueros Reservoir near Livermore.

Assemblyman John Laird, a Santa Cruz Democrat taking a lead on water negotiations, said that the central debate in coming weeks would be over the question, “Who pays?”

“Do the people across the state pay for their own water and the water of other people?” he said. “Or do the people that receive the water pay a fair share of the cost of getting it to them?”

John Moffatt, who advises the governor on water issues, said Schwarzenegger’s proposal would invest tax dollars only where the state at large stood to gain and only to pay up to 50% of the cost of a dam project. Water users would have to pay the rest.

“The state will only pay for that portion of a project that has public benefits,” he said. “Our goal is to add assets to the backbone of the system that offer additional flexibility and benefits to everybody.”

Jeffrey Kightlinger, general manager of the Metropolitan Water District of Southern California, which provides water to 17 million people from Ventura County to the Mexican border, said California needs more reservoir storage. But his agency has spent $4 billion on storage-related projects in the last 12 years, he said.

MWD’s top concern, Kightlinger said, is finding a way to safeguard the export of water from the Sacramento-San Joaquin River Delta.

The delta is a source of water to two-thirds of California but also home to several species of threatened fish. Last month, a federal judge imposed protections for delta smelt that could cost Southern California a third of its delta supplies by curtailing pumping from December to June. Those months are the primary season for moving storm runoff and Sierra snowmelt to farm fields and reservoirs hundreds of miles south.

Consensus has been growing for years that California must re-engineer delta channels to separate fish habitat from water pumps to avoid supply cutbacks triggered by the U.S. Endangered Species Act. In their bond proposals, neither Schwarzenegger nor Perata specifies such a rerouting, or “conveyance.” Instead, they are waiting to hear the recommendations -- due in October -- of a task force appointed by Schwarzenegger last year.

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nancy.vogel@latimes.com