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[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

 
                       CALIFORNIA WATER SECURITY

=======================================================================

                        OVERSIGHT FIELD HEARINGS

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                 June 18, 2001 in Cerritos, California
                  June 30, 2001 in Modesto, California
                  July 2, 2001 in San Jose, California

                               __________

                           Serial No. 107-40

                               __________

           Printed for the use of the Committee on Resources

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house
                                   or
         Committee address: http://resourcescommittee.house.gov

                                 ______

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                            WASHINGTON : 2002
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                         COMMITTEE ON RESOURCES

                    JAMES V. HANSEN, Utah, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,                   George Miller, California
  Vice Chairman                       Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana     Dale E. Kildee, Michigan
Jim Saxton, New Jersey               Peter A. DeFazio, Oregon
Elton Gallegly, California           Eni F.H. Faleomavaega, American 
John J. Duncan, Jr., Tennessee           Samoa
Joel Hefley, Colorado                Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland         Solomon P. Ortiz, Texas
Ken Calvert, California              Frank Pallone, Jr., New Jersey
Scott McInnis, Colorado              Calvin M. Dooley, California
Richard W. Pombo, California         Robert A. Underwood, Guam
Barbara Cubin, Wyoming               Adam Smith, Washington
George Radanovich, California        Donna M. Christensen, Virgin 
Walter B. Jones, Jr., North              Islands
    Carolina                         Ron Kind, Wisconsin
Mac Thornberry, Texas                Jay Inslee, Washington
Chris Cannon, Utah                   Grace F. Napolitano, California
John E. Peterson, Pennsylvania       Tom Udall, New Mexico
Bob Schaffer, Colorado               Mark Udall, Colorado
Jim Gibbons, Nevada                  Rush D. Holt, New Jersey
Mark E. Souder, Indiana              James P. McGovern, Massachusetts
Greg Walden, Oregon                  Anibal Acevedo-Vila, Puerto Rico
Michael K. Simpson, Idaho            Hilda L. Solis, California
Thomas G. Tancredo, Colorado         Brad Carson, Oklahoma
J.D. Hayworth, Arizona               Betty McCollum, Minnesota
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana

                   Allen D. Freemyer, Chief of Staff
                      Lisa Pittman, Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                 James H. Zoia, Democrat Staff Director
                  Jeff Petrich, Democrat Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                   KEN CALVERT, California, Chairman
            ADAM SMITH, Washington, Ranking Democrat Member

 Richard W. Pombo, California        George Miller, California
George Radanovich, California        Peter A. DeFazio, Oregon
Greg Walden, Oregon,                 Calvin M. Dooley, California
  Vice Chairman                      Grace F. Napolitano, California
Michael K. Simpson, Idaho            James P. McGovern, Massachusetts
J.D. Hayworth, Arizona               Hilda L. Solis, California
C.L. ``Butch'' Otter, Idaho          Brad Carson, Oklahoma
Tom Osborne, Nebraska
Jeff Flake, Arizona
                                 ------                                
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 18, 2001....................................    95

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     1
        Prepared statement of....................................     2
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................     3
    Solis, Hon. Hilda L., a Representative in Congress from the 
      State of California........................................    25
        Prepared statement of....................................    26

Statement of Witnesses:
    Atwater, Richard W., General Manager, Inland Empire Utilities 
      Agency.....................................................    35
        Prepared statement of....................................    36
    Burke, Yvonne Brathwaite, Los Angeles County Supervisor, 
      Prepared statement submitted for the record................    58
    Davis, Christopher, Management Assistant, City of Norwalk....    74
    Everts, Conner, Executive Director, Southern California 
      Watershed Alliance.........................................    75
        Prepared statement of....................................    78
    Gallucci, Art, City Manager, City of Cerritos................    72
    Gastelum, Ronald R., Chief Executive Officer, Metropolitan 
      Water District of Southern California......................     4
        Prepared statement of....................................     6
    Grindstaff, P. Joseph, General Manager, Santa Ana Watershed 
      Project Authority..........................................    11
        Prepared statement of....................................    12
    Koffroth, Steve, Office Manager, American Federation of 
      State, County and Municipal Employees Local 1902...........    18
        Prepared statement of....................................    20
    Levy, Tom, General Manager-Chief Engineer, Coachella Valley 
      Water District.............................................    40
        Prepared statement of....................................    41
    Libeu, Lawrence M., Director of Legislative Affairs, Eastern 
      Municipal Water District...................................    63
        Prepared statement of....................................    64
    Linsky, Ronald B., Executive Director, National Water 
      Research Institute.........................................    59
        Prepared statement of....................................    61
    Miller, Darryl, General Manager, West Basin Municipal Water 
      District and Central Basin Municipal Water District........    47
        Prepared statement of....................................    48
    Murray, Ta'Shara, Deputy, on behalf of Representative Yvonne 
      Brathwaite Burke, County Supervisor of the Second District, 
      County of Los Angeles......................................    58
    Pisano, Mark A., Executive Director, Southern California 
      Association of Governments.................................    28
        Prepared statement of....................................    29
    Stovall, John F., General Counsel, Kern County Water Agency..    67
        Prepared statement of....................................    68

Additional materials supplied:
    Breidenbach, Jan, Executive Director, Southern California 
      Association of Non-Profit Housing, Statement submitted for 
      the record.................................................    83
    Guzman, Martha, United Farm Workers of America, AFL-CIO, 
      Letter submitted for the record............................    86
    Lambros, Richard, Executive Vice President, Building Industry 
      Association of Southern California, Letter submitted for 
      the record.................................................    87
    Reeves, Robert, Sr., Executive President, AFSCME Local 1902, 
      Letter submitted for the record............................    90
    Spitzer, Todd, Supervisor, Third District, Orange County, 
      Statement submitted for the record.........................    93
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 30, 2001....................................    95

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................    95
        Prepared statement of....................................    96
    Condit, Hon. Gary, a Representative in Congress from the 
      State of California........................................    97
    Dooley, Hon. Calvin, a Representative in Congress from the 
      State of California........................................    98
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................    99
    Radanovich, Hon. George P., a Representative in Congress from 
      the State of California....................................    98

Statement of Witnesses:
    Birmingham, Tom, General Manager/General Counsel, Westlands 
      Water District.............................................   116
        Prepared statement of....................................   118
    Broddrick, Ryan, Director of Conservation Programs, Valley/
      Bay CARE, Ducks Unlimited, Inc.............................   169
        Prepared statement of....................................   170
    DiCroce, Nick, Vice President, Board of Governors, California 
      Trout, Inc.................................................   179
        Prepared statement of....................................   181
    Guy, David J., Executive Director, Northern California Water 
      Association................................................   111
        Prepared statement of....................................   112
    Guzman, Martha, United Farm Workers of America, AFL-CIO......   175
        Prepared statement of....................................   176
    Herrick, John, General Manager, South Delta Water Agency.....   137
        Prepared statement of....................................   139
    Moss, Richard M., General Manager, Friant Water Users 
      Authority..................................................   122
        Prepared statement of....................................   123
    Moss, Hon. Vern D., Chair of the Water Committee, Regional 
      Council of Rural Counties..................................   101
        Prepared statement of....................................   103
    Nelson, Daniel G., General Manager, San Luis & Delta-Mendota 
      Water Authority............................................   130
        Prepared statement of....................................   132
    Redfern, Suzanne, Landowner..................................   176
        Prepared statement of....................................   179
    Sablan, Dr. Marcia E., City Council Member, City of Firebaugh    99
        Prepared statement of....................................   101
    White, Chris, General Manager, Central California Irrigation 
      District, San Joaquin River Exchange Contractors W.A.......   145
        Prepared statement of....................................   146

Additional materials supplied:
    California Action on Water, Letter submitted for the record..   167

                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on July 2, 2001.....................................   197

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................   197
    Lofgren, Hon. Zoe, a Representative in Congress from the 
      State of California........................................   198

Statement of Witnesses:
    Cunneen, Jim, President and CEO, San Jose Silicon Valley 
      Chamber of Commerce........................................   199
        Prepared statement of....................................   200
    Davis, Grace, Government Affairs Manager, Intel Corporation, 
      Santa Clara, California....................................   206
        Prepared statement of....................................   208
    Diridon, Rod, Jr., Council Member, City of Santa Clara, 
      California.................................................   258
        Prepared statement of....................................   259
    Estremera, Tony, Chairman of the Board of Directors, Santa 
      Clara Valley Water District, Santa Clara, California.......   217
        Prepared statement of....................................   219
    Gaines, Bill, Director, Government Affairs, California 
      Waterfowl Association, Sacramento, California..............   201
        Prepared statement of....................................   204
    Gleick, Dr. Peter H., President, Pacific Institute for 
      Studies in Development, Environment, and Security, Oakland, 
      California.................................................   235
        Prepared statement of....................................   238
    Guardino, Carl, President and CEO, Silicon Valley 
      Manufacturing Group........................................   229
        Prepared statement of....................................   230
    McPeak, Sunne Wright, President and CEO, Bay Area Council, 
      San Francisco, California..................................   214
        Prepared statement of....................................   216
    Nelson, Barry, Senior Policy Analyst, Natural Resources 
      Defense Council, San Francisco, California.................   243
        Prepared statement of....................................   246
    Wells, Mary, Sacramento Valley Landowner.....................   232
        Prepared statement of....................................   233
    Wenger, Paul J., Second Vice President, California Farm 
      Bureau Federation..........................................   209
        Prepared statement of....................................   211

   OVERSIGHT FIELD HEARING ON SOUTHERN CALIFORNIA WATER SECURITY -- 
                      OPPORTUNITIES AND CHALLENGES

                              ----------                              

                         Monday, June 18, 2001

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                          Cerritos, California

                              ----------                              

    The Subcommittee met, pursuant to call, at 10 a.m., in the 
Sierra Conference Center at the Cerritos Center for Performing 
Arts at 12700 Center Court Drive, Cerritos, California, Hon. 
Ken Calvert [Chairman of the Subcommittee] presiding.
    Present: Representatives Calvert, Napolitano and Solis
    Staff Present: Joshua Johnson, Majority Staff Director; 
Steve Lanick, Legislative Staff; Jolyn Murphy, Calvert's Staff; 
and Jeannine Campos, Clerk.
    Mr. Calvert. The hearing by the Subcommittee on Water and 
Power will come to order. The Subcommittee is meeting today to 
hear testimony on Southern California Water Security -- 
Opportunities and Challenges.
    Under Committee Rule 4G the Chairman and the Ranking 
Minority Member, can make opening statements. If any members 
have statements, they can be included in the hearing record 
under unanimous consent.

  STATEMENT OF THE HONORABLE KEN CALVERT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    I frequently hear how industries such as the computer 
industry, agriculture, and defense are the driving economic 
force in California. They are right in pointing out the 
importance of their specific group to this broad-based economy. 
These industries have enabled California to become the world's 
fifth largest economy. We just passed France last week.
    Water, or rather a secure supply of quality water, is 
fundamental in fueling each of these industries. We all 
recognize the need for clean, safe, and reliable water supplies 
but too little has been done to ensure the security of that 
supply.
    It's been over 30 years since California has made any major 
investment in improving the supply and reliability of our water 
system. It is imperative that California, a state that serves 
as an innovative leader for the rest of the United States, 
address its aging and inadequate infrastructure.
    By doing so, we will increase our water supply and 
reliability and enhance the quality of the water we consume. In 
addition, research and development must be encouraged to 
support and maintain efforts to improve our healthy environment 
and create a sustainable future.
    The water and power Subcommittee will conduct a series of 
hearings throughout the state. We have started this process 
here in Southern California where the need to focus on water 
security is critical. Eighty percent of the state's population 
is concentrated in the southern half of the state which 
receives only 30 percent of the annual rainfall. We depend on 
water from a variety of sources such as the Colorado River, 
Owens Valley, and Northern California.
    As most of you know, California will have to reduce it's 
dependency on the Colorado River from the current level of 5.2 
million acre-feet to 4.4 million acre-feet within the next 15 
years. Complying with this requirement will not be easy, 
especially in light of demands placed on the water supply by an 
ever growing population.
    Over the past 6 years California has experienced wet years. 
However, rainfall this year is below normal. If we begin to 
experience a drought similar to the late '80's and early '90's, 
the state will not be prepared to handle the demands on water 
supply given the competing needs which include urban users, 
agriculture, and the environment.
    As dire as this sounds, there are solutions. Partnerships 
on local, regional, state, and Federal levels have been formed 
and active participation by all must be encouraged.
    I have introduced a bill, H.R. 1985 with 28 of my 
California colleagues including Mrs. Napolitano who is sitting 
here with us today. This bill, the Western Security Enhancement 
Act, addresses California water security by improving water 
supply, reliability, and quality and by maintaining and 
improving our environment.
    I believe the importance of this legislation should be 
evident to every municipality, irrigation district, business, 
conversation group, city, and county in this state. Certainly 
the entire West. All who are interested and invested in the 
success of California's future should support this bill. This 
debate cannot have any spectators. Too much is at risk.
    [The prepared statement of Mr. Calvert follows:]

Statement of The Honorable Ken Calvert, Chairman, Subcommittee on Water 
                               and Power

    During conversations with constituents, I frequently hear how 
industries such as the computer industry, agriculture, defense, 
ecotourism or Hollywood, are the driving economic force in California. 
They are all right in pointing to the importance of their specific 
group to this broad based economy. These industries have enabled 
California to become the world's sixth largest economy. But water, a 
secure supply of quality water, is fundamental in fueling each of these 
industries.
    We all recognize the need for clean, safe and reliable water 
supplies, but too little has been done to assure the security of that 
supply. It has been over 30 years since California has made any major 
investment in improving the supply, and reliability of our water 
system. It is imperative that California, a State that serves as an 
innovative leader for the rest of the United States, address its aging 
and inadequate infrastructure. By doing so, we will increase our water 
supply and reliability, and enhance the quality of water we consume. 
Research and development must also be encouraged to support and 
maintain efforts to improve our healthy environment and create a 
sustainable future.
    The Water and Power Subcommittee will conduct a series of hearings 
throughout the state; we have started this process, here, in southern 
California where the need for a focus on water security is the most 
acute. Eighty percent of the State's population is concentrated in the 
southern half of the State which receives only thirty percent of the 
annual rain fall. We depend on water receipts from a variety of sources 
such as the Colorado River, Owens Valley and northern California. In 
one case, California will have to reduce it's dependency on the 
Colorado River from the current level of 5.2 million acre feet to 4.4 
million acre feet within the next 15 years. Complying with this 
requirement will not be easy, especially in light of demands placed on 
the water supply by an ever growing population and the 1992 Federal law 
known as the Central Valley Improvement Act that reallocated several 
hundred thousand acre feet of contracted water supplies for other 
purposes. Over the past 6 years, California has experienced wet years; 
this year rainfall is below normal. If we begin to experience a drought 
similar to the late eighties and early nineties, the state will not be 
prepared to handle the demands on its water supply given the competing 
needs among it's users.
    As dire as this sounds, there are solutions. Partnerships on local, 
regional, state and federal levels have been formed and active 
participation by all must be encouraged. In Congress we have introduced 
a bill known as H.R. 1985, ``Western Water Security Enhancement Act'', 
that addresses California water security by improving water supply, 
reliability, and quality, and by maintaining and improving our 
environment. We currently have 27 California co-sponsors to this bill. 
I believe the importance of this legislation should be evident to every 
municipality, irrigation district, business, conservation group, and 
others who are interested and invested in the success of California's 
future.
                                 ______
                                 
    I would like to recognize first my good friend and 
colleague on this Committee, Grace Napolitano, for her opening 
statement.

 STATEMENT OF THE HONORABLE GRACE NAPOLITANO, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Napolitano. Thank you, Mr. Chair. Certainly my 
gratitude for his active leadership on the water issues at the 
Federal level and for holding the first of three hearings in 
the California water security in Southern California.
    I believe we also need to acknowledge we are being hosted 
by the city of Cerritos and the city manager is sitting in the 
audience. We are pleased to thank council for allowing us to 
use this marvelous facility for such an important hearing.
    I'm very appreciative of my Chairman's leadership because 
he's taken a bipartisan approach in addressing this crucial 
issue which is the major problem in California's water system 
is that it's aging and has not kept pace with the exploding 
population and we must act now to address the future needs of 
it. I mean long-range, not just short-range issues.
    California's last major expansion of its water system 
occurred over 40 years ago when the State Water Project was 
approved. It provides and transports a fourth of our water with 
remaining water coming in from the Colorado River and the local 
ground water, a lot of which has been contaminated and those 
issues to deal with so it isn't just the water that we import.
    It's all the other issues that our communities, our cities, 
and municipalities face in dealing with providing adequate 
potable and doing it in an expedient manner as well as in an 
affordable manner.
    When the State Water Project was built back in the '60's 
California had 16 million residents and the projections now 
show that the state's current population is about 35 million 
with a strong likelihood that it's going to hit 50 million 
within 20 years.
    Now, that is quite a jump for us. When I was serving in the 
state legislature I was told by my colleagues, my assembly 
colleagues, that we have stopped building. We have stopped 
accepting new people in the state of California, which may 
sound ludicrous to you but they were very serious about it 
because we experience most of the growth in Southern 
California. Northern California says, ``We need, we want, and 
we will keep the water and you need to find a way to either go 
to desalination or recycling to fill your needs.''
    Well, we need a balance. I believe in this approach that 
the Chairman has taken is taking testimony here from the folks 
that actually have to deal with the issues at the local level. 
It's going to be paramount for us to be able to have a bill 
that is going to help Northern California and also Southern 
California.
    What is the best solution for this approach? I believe 
that's why we're here and I thank my Chairman for that. We are 
given the opportunity to gain additional knowledge and have 
input into this complex water issue that we will be facing, not 
just within the next few years if we get another cycle of 
drought, but if we examine the factors that have left these 
challenges and listen to everybody, hopefully we will have a 
piece of legislation that will assist us and deal with our 
future needs of water short-term and long-term.
    Thank you very much, Mr. Chairman, and that's it for me.
    Mr. Calvert. Thank you. And thank you for helping us put 
together this wonderful facility with the city of Cerritos. The 
city manager, Art, is here.
    Art, stand up so we can all thank you. It's a marvelous 
facility.
    Panel I, we have Mr. Ron Gastelum, CEO, Metropolitan Water 
District; Mr. Joseph Grindstaff, General Manager, Santa Ana 
Watershed Project Authority; Mr. Steve Koffroth, Office 
Manager, AFSCME Local 1902. If you will all please come to the 
head table.
    We have a 5-minute rule. Many of you have already 
testified, I know, in front of my Committee and others in the 
past but I'll just explain it one more time. The green light 
indicates the time is on and the yellow light indicates 1 
minute is left. The red light indicates that time has expired. 
There's 5 minutes in testimony. Please try to stay within that 
5 minutes and we'll have plenty of time for questions. We 
appreciate that.
    Ron, you may begin.

 STATEMENT OF RONALD GASTELUM, CEO, METROPOLITAN WATER DISTRICT

    Mr. Gastelum. Thank you, Mr. Chairman, Honorable Grace 
Napolitano. My name is Ron Gastelum. I'm the Chief Executive 
Officer of the Metropolitan Water District of Southern 
California.
    I do have written testimony that I want to submit for the 
record. I will make a few brief comments within the 5 minutes.
    Mr. Calvert. Without objection, all written testimony will 
be accepted in the record.
    Mr. Gastelum. Thank you, Mr. Chairman. Mr. Chairman, there 
is a clear Federal interest in the legislation that has been 
introduced by you and co-sponsors. The California economy, the 
Southern California economy, is entirely dependent upon the 
interconnected water system in California.
    That economy noted recently in Southern California has 
recently surpassed in gross national product that of France. It 
is a staggering contribution by Southern California to the 
economy of this country and the well being of this country. 
When you look at the Central Valley and the production from the 
Central Valley and the Sacramento Valley in agricultural 
products, it is a staggering contribution.
    All of that is dependent on our water system. There is 
indeed a clear Federal interest in a reliable, clean, safe 
well-distributed water system here in California.
    There's also a clear Federal interest given the tie between 
the Colorado River, the other basin states, Mexico, and the 
Northern California water systems that all tie to Southern 
California.
    Balancing the management of those water systems not only 
produces benefits for Southern California but clear benefits 
for the other basin states and Mexico. There's a clear Federal 
interest in this legislation.
    There's also a clear need. When we plan and develop water 
projects, it can take 10 to 15 years. I'm not just talking 
about building dams. I'm talking about conjunctive use 
programs. I'm talking about the infrastructure necessary to 
move water from point A to point B. I'm talking about the 
recycling programs, the conservation programs. Long lead times 
are required and substantial financing is required.
    There's a clear need because of the environmental stress 
that we are experiencing throughout our system. Most 
particularly Sacramento San Joaquin Delta which your bill 
addresses most directly. We are in a stress condition with our 
water supplies. This year, as you noted in your preliminary 
comments, this has been a dry year. The Central Valley is 
hurting in many places. We are more fortunate here in Southern 
California because we do have water and storage but that's not 
indefinite and it will take, indeed, more to provide us long-
term security.
    Global warming is something we need to take very seriously. 
If global warming does result in different rainfall patterns 
and our ability to capture water and store water, we need to be 
prepared and this bill, in my opinion, does begin to prepare us 
for that very real potential.
    Then, of course, water quality. EPA regulations, state 
regulations, expectations of the public on our water quality 
have to be met. It is best met with source water protection but 
a combination is going to be needed.
    This bill does address both water protection and the kinds 
of programs that you'll be hearing about from Mr. Grindstaff 
and others about local projects. The solution is planning, 
balanced development, eco-system restoration, storage and 
conveyance improvements all addressed by this bill.
    We will have a more efficient water system. I think what we 
need to keep in mind is we got to this point in the development 
of our water systems here in California with the record of 
decision and with the decisions before us through three 
elements; leadership, consensus, and compromise.
    If we do not keep our eye on the need for those three 
elements, we won't get there and California will suffer. I 
commend you on the introduction of this bill. We are strongly 
supportive of this legislation. You can count on us to be a 
part of all three of those elements; leadership, consensus, and 
compromise.
    Thank you very much for this opportunity.
    Mr. Calvert. Thank you for your testimony, Mr. Gastelum.
    [The prepared statement of Mr. Gastelum follows:]

Statement of Ronald R. Gastelum, Chief Executive Officer, Metropolitan 
                 Water District of Southern California

Introduction
    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to submit this statement regarding Southern California 
Water Security--Opportunities and Challenges.
    My name is Ronald R. Gastelum, I am the Chief Executive Officer for 
the Metropolitan Water District of Southern California (Metropolitan). 
Metropolitan is a regional wholesale water agency that provides water 
to 26 member public agencies who serve 17 million people living in 
Ventura, Los Angeles, Orange, Riverside, San Bernardino, and San Diego 
counties.
    Mr. Chairman, I would like to thank you and the many cosponsors for 
your leadership in introducing CALFED authorization legislation on May 
24 that provides a ground-breaking approach to resolving regional 
resource management conflicts that affect a variety of stakeholder 
interests.
    The CALFED legislation not only serves California, but also serves 
the nation's interests. It implements a program that assures 
comprehensive achievement of regional health, economic and 
environmental program objectives. It is one of the most important 
pieces of water and environmental resource management legislation in 
California's history. In particular it:
     Authorizes funding over the next 30 years for the CALFED 
program, thereby preserving a national ecological treasure, ensuring 
necessary infrastructure for high-quality and reliable water supplies 
for our residents, industries and farms, and providing benefits to the 
aquatic and avian ecosystems of California and other western states;
     Creates an institutional framework through a Governance 
Board that provides the stability needed to assure coordination among 
the multiple local, regional, state and federal resource agencies must 
take coordinated actions to implement the CALFED program;
     Creates a competitive process to fund local and regional 
projects providing broad access to finances and assuring lower costs;
     Enhances the federal program for funding small 
reclamation programs throughout the west; and
     Preserves the linkages among the various CALFED 
objectives by requiring that projects recommended for funding be sent 
to Congress in a bundled package through the annual report process. 
This beneficially forces the stakeholder interests to work together to 
solve one of California's most pressing issues.
    We believe the CALFED legislation has the ability to end decades of 
stalemate in the Bay-Delta and provide dramatic improvements for 
multiple beneficiaries.
    By providing federal leadership to seek a balanced solution, you 
greatly increase the likelihood that CALFED agencies will achieve the 
objectives and actions that will move us forward together.
Responses to Questions. Mr. Chairman, in your letter of invitation you 
        asked us to provide testimony to this panel that focused on 
        three questions.
Question 1: What factors have led to the challenges that Southern 
        California is facing today in regards to water supply, quality 
        and reliability?
    The fundamental challenge of water management in Southern 
California and throughout the nation is to meet the increasing needs of 
our customers while ensuring high water quality and protecting and 
restoring fisheries.
    In the late 1980s and early 1990s, California experienced a six-
year dry spell, one of the most severe over the last 70 years. During 
that time, water users also incurred additional limits on their 
supplies when two fish species (winter-run salmon and Delta smelt) were 
listed by federal agencies. With reduced supplies from both the dry 
spell and the Endangered Species Act (ESA) requirements, the State 
Water Project (SWP) found itself limited on pumping during both wet and 
dry conditions.
    During this six-year period, the SWP supplies fell more than six 
million acre-feet under contract entitlements (see Chart 1). Water 
losses for ESA and other fishery regulations totaled 1.4 million acre-
feet during dry years, almost one-third of dry-year supplies under the 
state and federal water supply contracts.
    In addition, increased public health concerns and drinking water 
quality regulations have also challenged our approaches to providing 
high quality, low-cost supplies.
    Over the last decade, while drinking water quality regulations have 
increasingly become more stringent, little progress has been made to 
bring source water quality for Delta exporters in line with national 
averages. Delta water currently contains levels of bromide that are six 
times higher than the national average. Bromide and trihalomethanes 
both raise public health concerns because of possible links to cancer.
    High concentrations of salinity also degrade groundwater basins and 
impede efforts to recycle and reuse water.
    Although Metropolitan is a nationally recognized leader in funding 
research and implementing new cost-effective treatment technologies, 
the technical challenges and costs of removing contaminants from 
drinking water supplies can be staggering. Currently, the best method 
to control water quality is at the source.
    If urban water agencies are forced to abandon quality at the source 
and instead rely on alternative treatment technologies, the capital and 
operating/maintenance of these alternative technologies could exceed 
the cost of conventional treatment by over 1,000 percent.
    In summary, the factors that have lead to an almost certain crisis 
that would dwarf by comparison the current energy situation are:
     The lack of sufficient storage above and below the Delta 
to manage efficiently the competing demands of our environment and 
economy;
     The inefficient conveyance systems in and through the 
Delta that are causing rapidly deteriorating water quality for 
consumers and fish; and
     Lack of adequate financing for local resource 
development.
Question 2: What actions and measures have you taken to improve upon 
        your water supply, quality and reliability?
    Metropolitan over the last few years has gone through a dramatic 
change in policy direction and has begun to aggressively develop a new 
water management paradigm to meet water quality, supply reliability and 
environmental needs.
    Metropolitan has remained steadfast in our support for the 
environment, sound science and efficient water management practices. We 
have been a leader in funding and coordinating the implementation of 
early-start environmental restoration and scientific monitoring 
programs. We have also been a driving force at initiating new, more 
efficient water management tools to allow us to adjust to changing 
regulatory requirements. We fundamentally believe California needs a 
stable environment to ensure a stable economy.
    Metropolitan's strategy for water storage has changed. The old 
vision called for storing water upstream of the Delta and pushing it 
through the Delta during drought periods. The new vision calls for 
banking surplus water south of the Delta in wet periods to meet 
contractual commitments during drought years. This allows for reduced 
export pumping and increased Delta outflows for fisheries in during dry 
periods.
    Local resource development has also played a vital role at 
Metropolitan in managing the impacts of increasing environmental 
regulation and urban demand for imported water supplies.
    Current efforts to conserve and recycle water have produced more 
than 710,000 acre-feet per year. This is comparable to the current 
combined annual water supply for the City of Los Angeles and the City 
of San Francisco.
    Metropolitan's resource plan also calls for doubling recycling and 
adding 400,000 acre-feet of groundwater production. This is simply not 
possible without low salinity Delta water.
    Based on a study commissioned by the Los Angeles Area Chamber of 
Commerce in 1996, Southern California water agencies and taxpayers have 
spent more than $8 billion in water conservation, water recycling and 
storage since the early 1980s.
    Metropolitan and its member agencies are committed to invest 
another $8 billion by the year 2020 in the development of Southern 
California's local supply and storage programs.
    These resource management strategies will have reduced Southern 
California's dependence on Bay-Delta supplies during critically dry 
years, like 1977 and 1991, from 35% to 12% by year 2020.
    While these new strategies are proving effective at filling the 
1990s supply gap with real water (see Chart 2), we still need to 
implement the water supply actions in the CALFED Record of Decision to 
meet the needs of the environment and the economy.
    In summary, Metropolitan has taken key steps to deal with changing 
circumstances. This includes:
     Changing the storage paradigm by developing surface and 
groundwater storage south of the Delta; and
     Investing heavily in local resources, including extensive 
recycling and conservation and programs to maintain a full Colorado 
River Aqueduct.
    But we need a successful statewide plan if these local resources 
are to be effective.
Question 3: What additional measures or assistance may be needed in the 
        short, mid, and long term to improve your water security?
    Metropolitan is committed to working with the Congress and 
stakeholder interests to move the CALFED authorization legislation 
forward. We will also work to ensure the final CALFED authorization 
legislation embodies the following legislative principles. These 
principles include:
    A Stable and Effective Governance Mechanism. The legislation should 
promote creation of an effective governance mechanism, which adequately 
represents Southern California urban interests and assures stable and 
balanced implementation of the entire CALFED program.
     In 1994, the Bay-Delta Accord created a partnership 
between the state and federal governments, along with a broad array of 
water agencies and stakeholders.
     We need to continue this partnership to provide a more 
secure and favorable political environment for dealings with 
stakeholder concerns.
    Funding for Water Quality Projects, including Complementary 
Actions. Water quality is our top priority! The CALFED legislation must 
assure that water quality projects, including those identified as 
``complementary actions'' in the CALFED Record of Decision, are 
eligible and can effectively compete for funding within the CALFED 
authorization legislation. These water quality program elements 
include:
     Source protection measures to safeguard Bay-Delta 
drinking water supplies for 22 million Americans.
     Water storage and conveyance solutions to protect the 
integrity of drinking water supplies as they journey from the source to 
two-thirds of all Californian households;
     Support for innovative urban-agricultural partnerships, 
such as the partnership between Metropolitan and the Friant Water Users 
Authority, to improve source water quality, assure agricultural water 
supply, and provide water for fisheries restoration; and
     Water treatment technology research initiatives to 
improve micro filtration and ultraviolet disinfection technologies.
    Funding for Local and Statewide Supply Reliability Projects. 
Authorization must be clearly provided for the full range of actions 
contained in the CALFED Bay-Delta Program to increase water supply 
reliability, including investments in local resources, improvements in 
through-delta conveyance, and additional surface and groundwater 
storage consistent with the CALFED Framework Agreement and Record of 
Decision.
    A Stable Regulatory Environment. The legislation should contain 
provisions that require environmental restoration to be accomplished in 
a manner that assures reliability of water supplies for the State Water 
Project, Central Valley Project, and other water users.
    Funding for Environmental Restoration. The legislation must 
authorize adequate funding for the Environmental Water Account and 
Environmental Restoration Program defined in the CALFED Record of 
Decision to assure balanced progress of environmental restoration and 
improvements in water quality and supply reliability.
    The CALFED ecosystem restoration program is one of the largest 
environmental programs ever undertaken in the nation. Habitat 
restoration in the Bay-Delta watershed translates into environmental 
and ``economic'' benefits for both the Colorado and Columbia River 
Basin. The CALFED Program is also key to supporting Pacific salmon 
fisheries and waterfowl along the Pacific Flyway.
    Metropolitan supports legislative provisions that promote 
environmental habitat improvements while protecting private landowners.
    Elements of CALFED environmental program include:
     Installing screens on water diversions to protect fishery 
resources, thus eliminating a major source of fish mortality;
     Removing dams on tributary streams to open up previously 
inaccessible fishery spawning grounds; and
     Acquiring conservation easements and habitat acquisitions 
from willing sellers.
    Implementation of Environmental Water Account to Meet Endangered 
Species Act Requirements. The legislation should authorize 
Environmental Water Account (EWA) implementation to provide additional 
environmental water above the regulatory baseline, while protecting the 
reliability of urban and agricultural water supplies. The first 
priority for use of EWA water should be to meet the requirements of the 
Endangered Species Act with other ecosystem purposes having second 
priority.
     Federal authorization of the EWA will also provide 
support for the resource agencies to shift from regulatory-based 
operating procedures to more flexible operating procedures. Combined 
with improved monitoring, we believe this flexible operating strategy 
provides more water to the fisheries when needed and conserves limited 
supplies.
    Timely Permitting and Implementation of Projects. The legislation 
should provide for regulatory coordination and streamlining to assure 
timely implementation of CALFED projects and should protect the 
resource mix of demand management actions and infrastructure 
development agreed to in the CALFED Framework Agreement and Record of 
Decision.
    Sound Science. The legislation should authorize adequate funds for 
a strong, independent and objective science board to assure that 
CALFED-related decisions are based on the best-possible scientific 
information. The science Board should develop clear criteria to measure 
the success of ecosystem actions and adjust the restoration program in 
a timely manner in response to whether or not the success criteria are 
achieved.
     We cannot continue to solely focus on Delta outflows for 
the environment. We need to continue implement and monitor habitat 
restoration, pollution prevention, and exotic species control.
     We also need to implement the drinking water quality 
goals and actions outlined in the CALFED Record of Decision.
Ending Statement
    Mr. Chairman, your CALFED authorization legislation has aligned the 
federal government with a new direction in water management in 
California.
    If we follow this new direction, California will not have to choose 
between the environment and the economy.
    It is in everyone's interest to ``seize the opportunity'' you have 
provided to improve California's resources and enhance water and 
environmental programs throughout the West.
    We at Metropolitan are dedicated to working with you, Mr. Chairman, 
members of the subcommittee, Senator Feinstein, and all others in 
developing a workable approach to implement a balanced CALFED Bay-Delta 
program.
                                 ______
                                 
    [An attachment to Mr. Gastelum's statement follows:]
    [GRAPHIC] [TIFF OMITTED] T3149.001
    
  STATEMENT OF JOSEPH GRINDSTAFF, GENERAL MANAGER, SANTA ANA 
                  WATERSHED PROJECT AUTHORITY

    Mr. Grindstaff. Mr. Chairman, Ms. Napolitano, thank you 
very much for this opportunity to testify today. My name is Joe 
Grindstaff and I'm the General Manager of the Santa Ana 
Watershed Project Authority, a map of which you see before you. 
The Santa Ana Watershed is the largest coastal watershed in 
Southern California. It covers the western end of Riverside and 
San Bernardino County, most of Orange County, and even a 
portion of Los Angeles County, and is home to more than 5 
million people.
    Before I begin, I first want to state that our agency also 
is wholeheartedly in support of your bill, the California Water 
Security Enhancement Act. We believe it is a major step forward 
and will help all of us in this state maintain the water 
supplies that we need for the future.
    Mr. Chairman, unless we put guards on the county lines and 
salt peter in the water, our population is going to grow from 5 
million to 7 million people within the next 20 years.
    This next chart you'll see what the natural progression of 
water demand would be. Even assuming that we fully implement 
all of the best management practices, the top line shows that 
we would begin to need to import more water rather than less 
even in the face of decreasing supplies from Northern 
California and from the Colorado River.
    We have developed a plan that will allow us in normal years 
to actually decrease our imported water even while our 
population increases and in drought years to actually be able 
to totally roll off the system in order to do what we call 
drought proofing. That is the goal of our region is to drought-
proof the Santa Ana river watershed.
    The main elements of our plan are water quality 
improvements, water recycling, ground water storage, and we 
incorporate even things such as flood control and habitat 
restoration, even some recreational elements, and they all 
integrate. They all fit together. Later today you will hear 
from Mr. Rich Atwater and Mr. Larry Libeu, both representing 
two of our member agencies.
    The projects and programs that they implement will have a 
positive impact on the whole watershed, not just on their area. 
Our agencies are committed to drought-proofing the region and 
we will make the financial resources available to help make 
that happen but we need your help.
    Our goal briefly is to clean up the ground water basins and 
make them more usable for potable use and for storage. Second 
goal is to store about 1.5 million acre-feet of water in the 
ground for use during drought. That's twice as much as is in 
Diamond Valley Lake which is a significant contribution.
    Additionally our goal is to recycle more than 300,000 acre-
feet of water per year. That's how we would reduce our normal 
year demands so significantly.
    Another element is to remove Arundo. Arundo Donax, which 
some of you are aware of, I know the Chairman is aware of 
Arundo, it is a giant cane which uses water much more than 
native habitat does but also causes problems for flood control 
and for fire departments. In addition to having all of those 
benefits, that will help offset, for example, demands for water 
in the watershed as we grow.
    As the upper watershed recycles more water, Orange County 
might be concerned about the flow of water in the river, but 
removing Arundo helps to mitigate those decreases in flow as we 
begin to do more and more to use our resources wisely.
    In conclusion, we are committed to supporting you to help 
move this legislation through. We believe that it is critical 
for the future of California that we find a way to solve our 
problems. We can do it and we support your efforts. Thank you 
very much.
    Mr. Calvert. Thank you for your testimony.
    [The prepared statement of Mr. Grindstaff follows:]

Statement of P. Joseph Grindstaff, General Manager, Santa Ana Watershed 
                           Project Authority

Introduction
    Mr. Chairman, members of the committee, I thank you very much for 
the opportunity to address you today. The Santa Ana Watershed Project 
Authority (SAWPA) represents the Santa Ana River Watershed. This river 
is the largest coastal river system in Southern California and flows 
from the San Bernardino Mountains over 100 miles southwesterly to the 
Pacific Ocean at Huntington Beach. The watershed covers over 2650 
square miles of widely-varying terrain. This area, which includes parts 
of San Bernardino, Riverside, Los Angeles and Orange Counties, was home 
to 5.1 million people during the 2000 census. The population is 
expected to increase to 7 million by 2020. SAWPA was founded in 1972 
after eighty years of controversy and court battles, that at one time 
included more than three thousand parties. These parties agreed 
ultimately to appoint the large wholesale water agencies as 
watermaster, to represent their rights and they formed SAWPA as a way 
to really solve problems, rather than just fight. Today SAWPA has five 
member agencies, Eastern Municipal Water District, Western Municipal 
Water District, San Bernardino Valley Municipal Water District, Inland 
Empire Utilities Agency and Orange County Water District. These 
agencies each have different individual interests, but share the global 
responsibility to insure there is reliable, high quality water 
available for all the people of the region.

The Challenges
    Southern California is facing many challenges. The factors that 
have led to the challenges are myriad; law, regulation, population 
growth, water quality concerns, historical disputes between water users 
and many more. Southern California has done a good job managing in 
spite of these challenges. Water demand has remained level for many 
years, while the population was increasing. The water supply available 
from the Colorado River is decreasing because of the 4.4 plan. The 
water available from Northern California has been caught up in massive 
disputes about protecting endangered species and habitat. The ability 
of water suppliers to respond is limited by regulation and law. At the 
same time, water quality is more important than ever. Drinking water 
standards are, rightly, more stringent than ever. Even with 
implementation of all best-management practices in every single house 
and business, the demand for clean water in our region will increase.
    Inland Southern California is one of the fastest-growing regions in 
North America, and its continuing development has brought water supply 
challenges of previously unknown proportions. The engineers and water 
leaders of today have many advantages that civilizations of the past 
lacked--better science and construction techniques to name just two. 
But the modern era has brought obstacles as well. Never before have 
water policymakers faced today's high level of ecological sensitivity. 
A public mandate for environmental stewardship has taken center stage, 
and the heyday of on-stream dams appears to have drawn to a close. 
Local and statewide leaders are now scrambling to quench the Inland 
Empire's growing thirst, but development in other parts of the West and 
changing attitudes elsewhere in California are taming our aspirations 
for new imported supplies.
    Passage of the March 2000 statewide water bond has enabled a much 
broader pursuit of SAWPA's program goals. By restoring the area's worn-
out groundwater basins, enhancing natural percolation of rainwater 
underground and, in effect, creating more than 1,300,000 acre-feet of 
currently unusable storage capacity, SAWPA expects to drought proof the 
entire watershed within twenty years. Not only will this protect us 
from having to buy expensive imported water during dry years, but it 
will also leave more water for agriculture, wildlife and cities 
throughout California.
    In order for the SAWPA program to be fully implemented and for it 
to meet all the stated goals SAWPA will need additional funding to the 
existing state bond funds. It will be our request that this come in the 
form of Federal matching funds, additional funds from future state 
water bonds and local funding from water agencies and consumers.

What SAWPA is Doing
    Integrating the management of surface water, groundwater, habitat, 
groundwater cleanup and groundwater banking is the task of SAWPA. This 
integrated program implemented quickly and carefully offers the real 
capability to drought proof the region. The plan will recycle water and 
clean up contaminated water in order to reduce imported water demand 
and will store or bank water in groundwater basins during wet years and 
withdraw it during droughts. To do this effectively, the projects must 
be tightly coordinated and all activities integrated.
    SAWPA's efforts to provide such a program were greatly improved by 
the passage of the Water Bond on March 7, 2000. Chapter 6, Article 5, 
the Southern California Integrated Watershed Program, was intended by 
the legislature to fulfill this opportunity. Many members of the 
legislature worked to insure this section was included in the Water 
Bond. Matching Federal funds for the Water Bond will make these 
projects the broadest integrated program for reclaimed water, 
cooperative groundwater management and drought preparedness in 
California. Having access to good quality water under all conditions is 
a requirement for the regions' residents, industry, farms and 
environment.
    The CALFED framework agreement proposes the development of 50,000 
acre feet per year (AFY) of new reclaimed water capacity each year. In 
the Santa Ana Watershed, about 100,000 AFY is currently reclaimed. Some 
of the projects funding has been through Title XVI, some through other 
federal, state, regional and local programs. I want to take this 
opportunity to brag about some of these projects and programs. The 
Irvine Ranch has been the national example of the benefits of recycling 
for years with approximately 16,000 AFY of reclamation to support 
wetlands and landscape irrigation demands. The Green Acres project has 
provided about 9,000 AFY of reclamation for Orange County. The Water 
Factory 21 was the first project of its kind in the nation, taking 
reclaimed water and putting it though reverse osmosis and injecting the 
project water into the ground to form a seawater barrier. The Inland 
Empire Utility Agency program has reclaimed over 23,000 AFY for 
municipal and industrial irrigation use. The EMWD program has created 
an effective reclaimed water system that reclaims over 43,000 AFY of 
treated effluent for largely agricultural irrigation use. These 
projects are functioning and demonstrate the benefit of recycling 
wastewater in an arid region. The region has plans to increase that 
100,000 AFY capacity to over 300,000 AFY over the next twenty years.
    SAWPA and local water leaders have stepped up to face of these 
rising challenges, bringing solutions to these problems that will 
drought proof the region. While we hold little hope for additional 
water imports, we are making great progress in exciting new water 
storage and supply technologies. By working to maximize the Santa Ana 
Basin's potential for water storage underground--a practice known as 
``water banking''--we are not only preparing ourselves for normal water 
years, but for drought cycles as well.
    SAWPA is the hub for Santa Ana Watershed planning. SAWPA's largest 
success to date has been securing more than $250 million dollars in 
state money from the passage of Proposition 13'the most recent 
statewide water bond. The Proposition 13 funds will be used directly by 
SAWPA to enable a number of vitally important local water projects in 
this watershed to move forward.
    The Santa Ana Integrated Watershed Program (IWP) consists of six 
major project categories:
     Groundwater Cleanup and Purification will mitigate 
negative groundwater impacts from nearly a century of agricultural and 
other industrial land use practices;
     Water Storage will enable much of the Watershed to 
withstand a major statewide drought by storing upwards of 1,300,000 
acre-feet of new water underground throughout the basin;
     Flood Protection will keep lives and property safe along 
the Santa Ana River main stem;
     Wetlands, Habitat and the Environment welcomes a new era 
of man-made and natural wetlands that has potential to restore the 
West's now-hindered Pacific Flyway;
     Water Recycling is the product of a major attitude shift 
in water use, and the IWP encourages recycling as a means to reduce our 
area's overall consumption; and
     Recreation and Conservation will bring much-needed 
recreational opportunities to the region, providing access to open 
spaces and increasing public awareness of the Santa Ana's environmental 
needs and purpose.
    These six project categories will be pursued simultaneously, 
meeting the Santa Ana Watershed's water supply and flood control needs 
in a manner that will enhance wildlife habitat in our area and 
throughout the West Coast. The IWP process has collected and aggregated 
project needs from SAWPA member agencies, water districts, cities, 
counties as well as suggestions from a number of environmental groups 
and parks agencies. The various interests were consolidated into the 
project categories stated above.

Federal Benefits
    The federal benefits of this program are great. In both CALFED and 
the 4.4 Plan the reuse of water is critical to maintaining water supply 
for the region. The CALFED framework agreement calls for 50,000 AF per 
year in new water recycling. The only way this kind of objective can be 
reached is if both the federal and state government help with funding. 
It will take a major commitment. This will allow all water users in the 
west to be sure of their water allotment and in the future will provide 
a path for water supply development that can be replicated.

Salt Removal and Groundwater Cleanup
    Any recycling program that does not address salt is remiss. The 
Bureau of Reclamation has included desalting as a part of the Southern 
California Comprehensive Water Reclamation and Reuse Study. As the 
Santa Ana River and its tributaries flow toward the sea, the water 
percolates into the stream system, recharging the 35 groundwater basins 
that comprise the watershed. Water is pumped by farmers and cities from 
the groundwater source and utilized for agricultural, municipal and 
industrial supply. However, each use of the supply results in added 
salinity to the water for the next user. The California Water Resources 
Control Board and the Santa Ana Regional Water Quality Control Board 
closely monitor the impact of this additional salt to the River to 
assure that the water supply is protected for downstream beneficial 
uses. As excess salt builds up in the groundwater, groundwater banking 
and recycling projects are impeded. To facilitate the removal of salts 
the integrated program will construct new desalters to remove excess 
salt that would buildup in the basins and send it to the ocean through 
the Santa Ana Regional Interceptor, a regional brine line operated by 
SAWPA. The region has invested some $130 million in the brine 
pipelines, $150 million in desalters and $40 million in additional 
brine and industrial waste treatment facilities.
    By reducing the salt that remains in the watershed, the program can 
better balance salt generation and import with salt exports. The graph 
shows the reduction in excess salt generated or imported in the 
watershed over the life of the program. Desalting facilities such as 
the Arlington and Chino Basin desalters that are already built remove 
over 15,000 tons of salt per year, and another 200,000 tons must be 
removed to achieve a balance and cleanup the basin. This goal is both 
daunting and doable with this program. Desalters also remove other 
harmful contaminants and pollution from the groundwater and work to 
make the groundwater basins capable of storing the water needed for 
droughts.

[GRAPHIC] [TIFF OMITTED] T3149.002

Groundwater Banking
    Groundwater banking is key to the future water supply of Southern 
California. It is essential to prevent the need for more imported water 
in the watershed and provide reliable water during drought periods. 
Over the last thirty years, the Santa Ana Watershed Project Authority 
(SAWPA) and its member agencies Eastern Municipal Water District, 
Inland Empire Utilities Agency, Orange County Water District, San 
Bernardino Valley Municipal Water District, and Western Municipal Water 
District have been leaders in planning and dealing with the complex 
problems in watershed management. Their efforts have led to significant 
projects involving water conservation and clean up of contamination. 
SAWPA and its member agencies have also been working along with others 
to prepare for groundwater banking. Major efforts are underway to store 
large quantities of water in many of the basins in the watershed. 
Projects to remove salt and recycle water are already underway.
    The chart at right shows a projection of groundwater storage 
capacity that can be utilized over the next 20 years. The amount of 
storage will vary based on the amount of wet year water available for 
banking and any drought needs served during these years. Storage of the 
additional water must be matched with the capability to extract, treat, 
and deliver the water for use. SAWPA and its member agencies along with 
others will make this a reality.

[GRAPHIC] [TIFF OMITTED] T3149.003

Near Term Facilities and Projects
    To accomplish these ambitious goals, desalting projects are planned 
in the Chino, San Jacinto and Orange County groundwater basins. Surface 
water capture and percolation projects are planned to capture and 
transfer surface and recycled water into the subsurface for storage. 
Flood control projects will be completed to allow water to be put into 
storage and prevent waste and contaminated water from entering the 
system.

Habitat Enhancement
    Steel and concrete are not the only important projects in the 
watershed. In the Santa Ana River a non-native species Arundo donax 
(giant cane) has come to dominate some 10,000 acres of riparian 
habitat. Many native species do not prosper in the environment created 
by this Arundo. The giant cane is also a significant fire hazard, and 
has cost millions of dollars and ravaged the environment each time it 
burns. After each fire the native flora typically requires much longer 
growing times and when it grows back is much less dense so the Arundo 
expands its grip on the environment. From the perspective of water 
supply, most observers estimate that if the Arundo were removed and 
replaced with native species, some 10,000 Acre Feet (AF) of water per 
year could be saved. One respected University of California scientist 
estimates that 37,000 AF of water per year could be saved. Protecting 
habitat enhances water supply in other ways. Examples include the use 
of open space to percolate water into the ground, or creating wetlands 
that clean water while preserving habitat. Projects restoring native 
habitat and creating wetlands or open space, which can be used for many 
purposes, have been developed by many agencies in this region. SAWPA 
envisions expanding these activities with a long-term program designed 
to specifically manage, expand and improve the habitat in the region, 
while at the same time obtaining a benefit for wildlife, water quality 
and self-sufficiency.

Wetlands Creation and Enhancement
    Natural and created or enhanced (managed) wetlands have multiple 
benefits both to the environment and to man. The majority of water in 
the Santa Ana River would have been processed by a marsh or wetland of 
some type if humans had not modified the landscape. The recreation of 
wetlands in areas where they have historically prospered and the 
enhancement of existing wetlands benefit native species, reduce 
contaminants in the water, lower sediment transport and support 
endangered and threatened species in the area of the river. SAWPA will 
work with its members, environmental, conservation, and parks agencies 
to create and enhance wetlands to achieve the benefits wetlands bring 
to the watershed. SAWPA also coordinates with other agencies supporting 
the Santa Ana River Trail, (SART) a multi-use trail system to link 
trails throughout Orange, Riverside and San Bernardino Counties. As 
SAWPA proceeds with efforts to remove the invasive Arundo, a corridor 
for the SART along the river will be created. In addition, SAWPA and 
Orange County Water District hold land and rights-of-way in areas along 
the river. Arundo removal may be the one opportunity to provide access 
to the river in many areas because of environmental sensitivity 
everywhere else along the river.

Water Recycling
    California is learning a hard lesson these days. In addition to 
making new water available through innovative groundwater storage 
projects, we need to learn to squeeze as much as possible from our 
existing supplies. Good old-fashioned water conservation at the user 
level is obviously a good starting point for this goal, but technology 
has opened up some other options as well. Some of the most important 
and promising opportunities are in the area of water recycling.
    In addition, some industries have found that they don't need the 
most pristine water quality available for their particular enterprise. 
Why, for instance, would golf course sprinklers need the same quality 
of water that a restaurant would? With this in mind SAWPA is looking to 
expand recycling activities throughout the region, and we expect to be 
reusing 145,000 acre-feet of water by the year 2020. Recycled water is 
not an option for every area, so SAWPA's member agencies are working 
with local governments and even specific companies to find the most 
beneficial, targeted recycling projects

Recreation and Conservation
    SAWPA's goals go beyond enhancing local water supply and expanding 
regional wetlands for wildlife improvement. It also seeks to create 
opportunities for the public to enjoy the area's waterways to the 
fullest extent possible. Ensuring access to the region's wetlands, 
lakes and streams will enable locals to see first-hand how their very 
own water source also makes a substantial contribution to waterfowl 
migration and wildlife in general. We anticipate that this most visible 
of SAWPA contributions will find a warm reception with residents in the 
Santa Ana River Basin and look forward to showcasing the environment 
locally.
    The recreation and conservation component of the IWP will be 
fulfilled throughout the overall duration of our project. We will be 
looking to build bicycle paths and other trails as new wetlands are 
created and more riparian habitat is made available by way of Arundo 
removal.

The Opportunity
    The principal opportunity and challenge facing everyone is not 
technical, but to bring competing interests into alignment so that we 
can all envision a future where the water resources and river 
environment we leave to our children and grandchildren are well 
managed, of high quality and adequate to meet their needs. All 
stakeholders whether they be cities, businesses, regulators, farms, 
wildlife or environment interests must have their needs addressed for 
the watershed, the state and the nation to be successful. Providing 
policy leadership for the nation and the state is essential to prevent 
the mistakes and dilemma's of the past and to insure proactive and 
responsible progress is made in water. SAWPA believes and is committed 
to regional and watershed based planning, with local implementation of 
projects of long-range goals

Federal Measures and Assistance
    The US Congress can help significantly by funding local water 
reclamation and ground water storage projects to a much larger extent 
than they have been funded in the past. If the western United States is 
to become truly have a sustainable water supply, water recycling (or 
reclamation) is key. Under Congressional direction the US Bureau of 
Reclamation has just completed a six-year study showing what the 
potential for water recycling is. They have identified 500,000 acre-
feet per year of recycling that could be on line by 2010. Groundwater 
storage in southern California combined with reclamation could 
potentially store enough water to totally protect the economy from a 
drought for the next twenty or thirty years. Federal funding of a part 
of the cost of the development of this water is key. Federal law and 
regulation have been part of the problem and federal projects (the 
Colorado River and Central Valley Project) are impacted significantly. 
The truth is that if the State and Federal government do not contribute 
significant resources, water recycling will not expand rapidly. The 
federal government should provide incentives for multipurpose, 
multibeneficiary projects that consider both the environmental and 
habitat aspects, as well as water supply and quality implications.
    Governance of this resource is a critical issue. All major 
stakeholders must feel they are at the table, but ultimately decisions 
need to be made in a timely way. If we do not all work together water 
supplies that have long sustained significant uses, will dry up, 
probably in a drought, resulting in greater economic dislocation than 
necessary and deterioration in the quality of life for our children and 
grandchildren throughout the western part of the country. For your 
information, a summary of the federal funding needs for our watershed 
is attached below. Thank you for your time and attention. If you or 
your staff have any questions or would like more detailed information, 
please let me know.

Federal Funding Needs
    Local water agencies have demonstrated great responsibility in 
working together to bring about this broad-based stakeholder 
partnership. Collectively, the many diverse groups representing water 
interests in the basin are seeing real progress in drought-proofing the 
region, improving water quality and groundwater management, and fully 
integrating the environment and habitat into water resource planning. 
The vigilance of regional water agencies in helping to build a 
sustainable future while at the same time seeking to improve our 
overall quality of life should not be overlooked.
    We anticipate opportunities nationally to receive additional 
funding for projects that are already underway, as well as ones that 
have not yet been initiated. Local water policy makers understand that 
there will be a high degree of regional responsibility for project 
funding as well. SAWPA also anticipates future opportunities to take 
advantage of statewide bond measures similar to Proposition 13.
    Funding support for the watershed is needed to match the local and 
state funds that were overwhelmingly approved by the electorate of 
California on March 7, 2000 for the SAWPA Integrated Watershed Program.
    SAWPA has six programs in the Integrated Watershed Program (IWP). 
Each program is listed below along with the total federal 
appropriations requirements and a listing of significant example 
projects. Appropriations in fiscal year 2002 and 2003 are critical to 
allow the program to leverage California Proposition 13 funds. New and 
existing authorizations of these projects occur under a variety of 
methods, including the water bills under consideration, USBR and 
USACOE, among others.

Water Quality Improvement -- $15.4M FY 2002 -- $34.7M FY 2003
Desalting and groundwater treatment in the Chino Basin, Menifee, Orange 
County, and other areas will mitigate the impacts of nearly a century 
of agricultural, industrial, and other pollution now in the 
groundwater.

Water Recycling -- $15.2M FY 2002 -- $33.2M FY 2003
Significant water recycling projects, like OCWD's Groundwater 
Replenishment System and the Chino Basin Recycling Program, help to 
make the most of the limited water available to the watershed.

Water Storage -- $8.9M FY 2002 -- $10.5M FY 2003
Groundwater storage in the Chino, Bunker Hill, Orange County, and San 
Jacinto basins will ultimately store as much as 1.3 million acre-feet 
of water needed to drought-proof Southern California and provide for 
growth over the next 20 years.

Flood Protection -- $3.2M FY 2002 -- $3.9M FY 2003
Reducing flooding in the rural and urban areas of the watershed will 
provide significant water quality improvements and safeguards lives and 
property.

Wetlands Env. and Habitat -- $14.2M FY 2002 -- $13.2M FY 2003
Environmental and habitat programs save and clean water, improve 
habitat, and reduce the impact of urbanization on the watershed. Some 
examples are the removal of the invasive exotic weed, Arundo Donnax; 
creating water treatment wetlands; and improving native wetlands and 
the river system.

Recreation and Conservation -- $9.8M FY 2002 -- $32.8M FY 2003
Completing the Santa Ana River Trail and Parkway and related planned 
projects, such as the River Wash Loop, will provide recreational 
opportunities, economic enhancement, and an added understanding of the 
watershed and its connection to the potable water supply.

Total Watershed Program -- $66.9M FY 2002 -- $128.2M FY 2003
                                 ______
                                 

STATEMENT OF STEVE KOFFROTH, OFFICE MANAGER, AFSCME, LOCAL 1902

    Mr. Koffroth. Chairman Calvert, Ms. Napolitano, we thank 
you for this opportunity to testify before you on the security 
and importance of water in Southern California.
    My name is Steve Koffroth and I'm here today on behalf of 
the American Federation of State, County, and Municipal 
Employees, Local 1902. Our Executive President was unable to 
attend today.
    Just as a matter of introduction, AFSCME is a public sector 
union who represents about 1.3 million public sector employees 
across the nation. Specifically, Local 1902 represents managers 
and employees at the Metropolitan Water Districts and other 
smaller water districts within MWD's service area. In total, we 
represent about 1,800 employees and the interests of all water 
workers in the region.
    AFSCME Local 1902 is also a founder and participant in the 
California AFSCME Water Caucus, whose membership includes some 
of the largest water providers within the state, including MWD, 
East Bay MUD, Santa Clara Valley Water District, San Diego City 
County employees, and some other water districts within the 
state. In all, AFSCME represents about 3,000 water workers 
within the state and substantially more nationwide.
    I want to say we are in support of this bill. It's 
encouraging to see such a great effort to address the security 
of the world's second-most import resource as water is 
subordinate only to air, in our opinion, and specifically how 
we can achieve a balanced solution that moves the various 
CALFED stakeholders forward and together.
    Specifically we've been asked to respond to one of the 
questions about what long-term, mid-term, short-term assistance 
we may see needed. Certainly we recognize the need and 
importance of the CALFED program and we are committed to 
working with Congress and the various stakeholders to move the 
CALFED authorization legislation forward.
    To that end we have several legislative principles that we 
want to make sure are addressed and I believe are very well 
addressed within this bill.
    The first is having An Effective Governance Mechanism. The 
legislation should promote the creation of an effective 
governance mechanism which adequately represents all Southern 
California interests and assures stable and balanced 
implementation of the entire CALFED program.
    The CALFED financing programs discuss the need and 
importance of having all the stakeholders involved and they 
brought together many of the interests in creating a statewide 
partnership.
    Indeed, we have been able to reach consensus on a number of 
issues that will serve to strengthen the security of water. We 
are concerned, however, that CALFED has not adequately reached 
out to all the stakeholders which disregards or otherwise 
discounts important issues that can and should be brought to 
the table.
    Second, Funding for Water Projects. As I said before, water 
is nearly the most important resource we have. If we cannot 
assure that this resource is available and reliable, we 
threaten the lives of millions of residents, and we can do 
nothing to support future growth.
    The CALFED legislation must assure that water projects, 
including those directed at water quality, reliability, and 
environmental protection, be adequately supported in direct 
correlation to the importance that this resource is to the 
population we serve.
    Third, Careful Monitoring and Development of Water 
Marketing Principles. This is our highest concern regarding the 
CALFED plan and this affects important principles that must not 
be disregarded or unnecessarily placed in a subordinate 
position. Although this concern may be addressed through 
effective governance structure, it is important for the 
legislature, in and of itself, to take proactive steps to 
ensure and stress the importance of and improve the security of 
water.
    Clearly, CALFED's direction has been to investigate methods 
that will encourage or otherwise facilitate transfers. In fact, 
the Record of Decision specifically notes that the plan's 
success hinges on this issue. We have been concerned that this 
priority will lead to unnecessarily hasty decisions or plans 
and place blinders on the long-term outlook of the impact to 
all stakeholders.
    We've also included in my testimony a copy of a letter that 
we wrote to CALFED regarding this issue which outlines some of 
these concerns. So far we have seen few, if any, methods or 
means to address these issues.
    As we have seen recently with electricity, lack of long-
term planning or disregard of the long-term impacts of resource 
supply lead to tremendous instability and insecurity thereby 
negatively impacting the public we serve.
    Aside from water price and availability, the potential 
impacts created by water transfers include increased 
agricultural prices, farm worker job losses, public sector job 
losses, loss of suppliers, sprawl and environmental hazards, 
political accountability and stranded infrastructure and 
personnel costs.
    Although the EWA and other transfer processes may help to 
address supply issues, they must not be implemented or 
developed without adequate input from all affected parties and 
due regard to all the possible impacts.
    Fourth, Continued Study and Research. The legislation 
should provide assurances that continued research and study are 
performed so that any water related decisions are based on the 
most current and best possible information to allow us to 
develop clear criteria to measure the success of our actions 
and adjust any portion of these programs in a timely manner.
    Mr. Chairman, your CALFED authorization legislation is a 
great opportunity. We are behind you. We hope to work forward 
with you and make that process happen for everyone in Southern 
California. Thank you.
    Mr. Calvert. Thank you for your testimony.
    [The prepared statement of Mr. Koffroth follows:]

  Statement of Steve Koffroth, Office Manager, American Federation of 
           State, County and Municipal Employees, Local 1902

Introduction:
    Mr. Chairman and members of the subcommittee, we thank you for the 
opportunity to testify before you regarding the security and importance 
of water in Southern California.
    My name is Steve Koffroth and I am here today on behalf of the 
American Federation of State, County and Municipal Employees (AFSCME) 
Local 1902, as our Executive President Robert Reeves was unable to 
attend.
    AFSCME is a public sector Union who represents over 1.3 million 
public sector employees across the nation.
    Specifically, Local 1902 represents the employees and managers of 
Metropolitan Water District of Southern California and other smaller 
water districts within MWD's service area. In total, we represent 
approximately 1800 employees and the interests of all water workers in 
the region.
    AFSCME Local 1902 is also a founder and member of the California 
AFSCME Water Caucus, whose membership includes some of the largest 
water providers in California, including MWD, East Bay Municipal 
Utility District, Santa Clara Valley Water District, and San Diego City 
water employees. In all, AFSCME represents approximately 3000 water 
workers in California alone and substantially more nationwide.
    It is encouraging to see such a great effort to address the 
security of the world's second most important resource (as water is 
subordinate only to air), and specifically how to achieve a balanced 
solution that moves the various CALFED stakeholders forward and 
together.
Response:
    We have been specifically asked to respond to the question, ``What 
measures or assistance may be needed in the short, mid and long term to 
improve water security in Southern California?''
    We certainly recognize the need and importance of the CALFED 
program, and we are committed to working with the Congress and the 
various stakeholders to move the CALFED authorization legislation 
forward. To that end, we support the following legislative principles 
to assure a balanced CALFED program:
    1. An Effective Governance Mechanism. The legislation should 
promote creation of an effective governance mechanism, which adequately 
represents ALL Southern California interests and assures stable and 
balanced implementation of the entire CALFED program.
        CALFED plans and programs discuss the need and importance of 
        involving all stakeholders, and they have brought together many 
        interests in creating a statewide partnership. Indeed, we have 
        been able to reach consensus on a number of issues that will 
        serve to strengthen the security of water. We are concerned 
        however that CALFED has not adequately reached out to all 
        stakeholders, which disregards or otherwise discounts important 
        issues that can and should be brought to the table.
    2. Funding for Water Projects. As I said before, water is nearly 
the most important resource we have. If we cannot assure that this 
resource is available and reliable, we threaten the lives of millions 
of residents, and we can do nothing to support future growth. The 
CALFED legislation must assure that water projects, including those 
directed at water quality, reliability, and environmental protection, 
be adequately supported in direct correlation with the importance of 
this resource to the residents we serve.
    3. Careful Monitoring and Development of Water Marketing 
Principles. This is our highest concern regarding the CALFED plans, and 
affects important principles that must not be disregarded or 
unnecessarily placed in a subordinate position. Although this concern 
may be addressed through effective governance structure, it is 
important for the legislature, in and of itself, to take proactive 
steps to stress the importance of and improve the security of water.
        Clearly, CALFED's direction has been to investigate methods 
        that will encourage or otherwise facilitate water transfers. In 
        fact, the ROD specifically notes that the plan's success hinges 
        on this issue. We have been concerned that this priority will 
        lead to unnecessarily hasty decisions and place blinders on the 
        long-term outlook of the impacts to all stakeholders.

        I have included a copy of the letter we wrote to CALFED, which 
        outlines some of these concerns. So far, we have seen few, if 
        any, method or means to address these issues.

        As we have seen recently with electricity, lack of long-term 
        planning or disregard of the long-term impacts of resource 
        supply, lead to tremendous instability and insecurity--thereby 
        negatively impacting the public we serve. Aside from water 
        price and availability, the potential impacts created by water 
        transfers include: increased agriculture prices, farm worker 
        job losses, public sector job losses, loss of suppliers, sprawl 
        and environmental hazards, political accountability and 
        stranded infrastructure and personnel costs.

        Although the EWA and other transfer processes may help to 
        address supply issues, they must not be implemented or 
        developed without adequate input from all affected parties and 
        due regard to all the possible impacts.
    4. Continued Study and Research. The legislation should provide 
assurances that continued research and study are performed so that any 
water-related decisions are based on the most current and best-possible 
information. This will allow us to develop clear criteria to measure 
the success of our actions and adjust any portion of these programs in 
a timely manner.

Conclusion:
    Mr. Chairman, your CALFED authorization legislation has created a 
great opportunity to address resource management not only in 
California, but Nationwide.
    We now have the potential of moving along a path where California 
doesn't have to choose between the environment and the economy.
    We at AFSCME are dedicated to working with you, Mr. Chairman, 
members of the subcommittee, and all others in developing and 
implementing a workable and balanced CALFED Bay-Delta program.
                                 ______
                                 
    Mr. Calvert. I would like to welcome Hilda Solis on our 
panel today, a valued member of our Subcommittee.
    Mr. Gastelum, if we go into another dry period, and I guess 
most statisticians would say we are due for another drought--
hopefully that's not the case--but without this legislation, 
how difficult would it be to meet our water demand in the 
future?
    Mr. Gastelum. It will be impossible if I could say it 
bluntly. If we don't do the kinds of things that the record of 
decision has pointed to, we will not be able to meet the future 
needs whether we grow or not. Just with the existing demand we 
will not be able to do that in extended dry periods.
    Mr. Calvert. So without this infrastructure we will not be 
able to meet the demand in 20 years. So what role should the 
Federal Government play?
    Mr. Gastelum. Well, the Federal Government is a major 
player as the administrator, so to speak, of the Colorado River 
supply. As well as the administrator of the Central Valley 
project, the Federal Government is a major player in water. The 
Federal Government has taken a proactive role locally as well 
with the development of infrastructures throughout the state of 
California, as well as recycling and conservation.
    The Federal Government is deeply involved in water 
management in the state of California. This is an opportunity 
for the Federal Government, local water agencies, all the 
stakeholders to have a consistent plan looking out 20 years 
ahead, an integrated, efficient management program where 
investments are being made not just by the Federal Government 
but by the state and local entities as well. It's a tremendous 
opportunity for us as well to advert the kind of crisis that 
you see in the electrical utility industry.
    Mr. Calvert. Thank you.
    Mr. Grindstaff, obviously we've talked about the regional 
solution that you have outlined in the Santa Ana watershed and 
why that is important to California. Why do you believe Federal 
assistance is necessary in order to put this project together?
    Mr. Grindstaff. As Mr. Gastelum indicated, we get a 
significant amount of our water both from the Colorado River 
and from Northern California where the Federal Government has a 
significant interest. The Colorado River has long been the 
backbone of imported water supply for the region and for the 
inland empire virtually all of the imported water there comes 
from Northern California because of the salt load that comes 
from the Colorado River.
    It's critical that we address the water supply issues in 
that area and the Federal Government has a major impact, as Mr. 
Gastelum said, through the Colorado River and through the 
Central Valley project, and also through it's responsibility 
with the Endangered Species Act in helping us to address the 
issues as we move ahead in the future.
    Mr. Calvert. I think we all probably from your testimony in 
the beginning understand why we're here but one ought to give 
you an opportunity to do that again. Why don't you all three 
briefly describe why we find ourselves here in Southern 
California with a potential serious water crisis.
    Mr. Koffroth, you may begin.
    Mr. Koffroth. Well, I think if Southern California 
specifically were able to rely on itself for its own water 
supply, we definitely wouldn't be here today. It's important 
that as we move forward that we have a plan that allows us to 
sustain the growth and the population that is currently within 
this area.
    Although it originally started out as a desert, as we have 
discussed today, it turned out to be a major metropolitan area 
supporting a large population, huge industry. I think that is 
something that we cannot go without denying. As we said before 
water being one of our most major resources, is vital in 
providing for the sustenance and growth of that community.
    Mr. Calvert. Mr. Grindstaff.
    Mr. Grindstaff. California, as usual, is in the leading 
position on water. We have developed our economy and I think it 
is the marvel of the world really and truly. California is 
going to set the standard for the future, and Texas, New 
Mexico, Oklahoma. This is the beginning.
    What we decide here is going to be replicated in the future 
in all of the western states throughout the nation because none 
of them have a sustainable long-term water supply. That is why 
we're here. We developed this nation, the west, without having 
that in place, and we are building on the foundation that our 
forefathers laid but it is something that we can and will do.
    Mr. Calvert. Mr. Gastelum.
    Mr. Gastelum. Yes, Mr. Chairman. Southern California is 
dependent upon imported water. Something like 60 percent of the 
water consumed in Southern California is imported by the 
Metropolitan Water District.
    I think you'll see that our needs for more imported water 
are relatively modest and that is because we have an integrated 
program here in Southern California that stresses recycling, 
conservation, conjunctive use. I think if you look to the 
Proposition 13 past by the voters recently, you see a broad-
based approach.
    Southern California does need imported water. We need a 
more efficient reliable source of imported water. Not new 
sources really but more efficiency and reliability in the 
existing sources. We need better water quality.
    The result if we get those things is actually greater 
benefit for the other parts of the country. You have feast and 
famine in other parts of--rather the state. The Central Valley 
is most stressed first but with the kind of integrated system 
we're talking about, we will have more predictability for the 
environment, more predictability for water users, and we will 
have the predictability for economy generally of knowing 20 
years out that we have taken care of this issue. It sounds 
simple. I know it's not but it is within our grasp and I think 
if we don't do that, we are going to be very sorry.
    Mr. Calvert. Thank you.
    Ms. Napolitano.
    Ms. Napolitano. Thank you, Mr. Chair. One of the things 
that I haven't heard you state, and I know all three of you are 
in support of the Chairman's bill, what is it that you should 
do to add--what would you add to that language to assist 
municipalities in the Southern California area do their job 
better whether it's the standpoint of labor of who actually has 
to do the work.
    I'm speaking about water wells that have been contaminated. 
They might help communities to deal with their own water to 
increase recycling. And one of the major things we haven't 
talked about is the effect of salinity in the cost of water 
delivery and how that is going to affect any future dealing 
with the Colorado River which is one of our main sources of the 
salinity.
    Mr. Grindstaff. Let me take a shot at that one. Mr. 
Gastelum talked some about water quality. We did a calculation 
the other day, just a rough estimate, on water from Northern 
California. As I mentioned, because of salt loadings when we 
import water into Riverside County and San Bernardino County 
most of that has to be state project water.
    If the water quality there is improved and maintained at a 
consistent level that is maybe 150 milligrams per liter, that 
will save us in capital costs alone $160 TO $200 million on top 
of that untold millions in operating and maintenance costs and 
untold millions of kilowatt hours of power so water quality is 
an incredibly important part of what needs to happen.
    Another part that you mentioned was cleaning up the locally 
contaminated ground water supply. We have, in fact, in the 
Southern California region some sources of water where we could 
use it if we could clean it up, but that water is very 
expensive.
    I'll use an example. In an area behind our office we have 
the Arlington desalter. The Arlington basin was contaminated by 
citrus that was grown from the 1880's up to the 1940's. That is 
not something that anybody knew at the time when they were 
growing oranges. That certainly wasn't their intent but, in 
fact, that's the problem.
    We now desalt the water and pump it out of that basin and 
that water is used for drinking water but it is expensive. It 
would be important for us to have assistance to help us do that 
kind of thing. If we deal with water quality from Northern 
California, we deal with cleaning up contaminated water locally 
to make use of that.
    When you do that, that also makes available ground water 
storage where you can put clean water in and store it when it's 
available. Then you begin to have a real hope for maintaining 
our system even while we grow without using incredibly large 
amounts of new imported water.
    Ms. Napolitano. So that would be a great boon is the 
ability to clean some of the water and you wouldn't have to 
import it.
    Mr. Grindstaff. Absolutely. As I read the bill, I think 
that there is provision in there to allow for agencies to apply 
for grants to help pay a portion of that cost so that instead 
of paying $800 an acre-foot when the going rate for water is 
$400, maybe the city can say, ``We are willing to pay $600 if 
we can get the Federal Government and state government to help 
make that difference.'' That's the choice that I think many 
agencies in our region have made in the past and will make in 
the future.
    Mr. Gastelum. If I can expand on that. I think the bill 
approaches the large issues in a way that is very helpful to 
cities by providing clarity and certainty in the Delta on the 
management of environmental issues so we know that we are going 
to be able to get water of high quality on a predictable basis. 
That sends the right signal to cities at the retail end.
    Now, if Metropolitan Water District is not going to have 
enough water or, if indeed, it would help Metropolitan to be 
able to provide the needed water supply, we are going to have 
the clarity with this legislation of what our supplies are. And 
by providing competitive grants, the most efficient projects 
are going to have an opportunity to receive the funding that 
Joe just talked about.
    All together this weaves, I think, a comprehensive program. 
Clarity, the ability to get money for the most efficient 
projects, and people understanding that there is a common cause 
here and a common program. If you leave it to individual cities 
to try and figure it out on their own, they don't have the 
resources.
    They need to know from their regional governments like 
Metropolitan, the state, and the Federal Government they were 
going to take care of their needs and if they have additional 
needs that we can provide funding mechanisms for them to do the 
local projects. I'm not just talking about hardware. 
Conservation. We've had tremendous success here with 
conservation programs working through cities.
    Mr. Koffroth. Also, I just wanted to address that I don't 
think that the need for this bill or the thought of this bill 
comes necessarily from any errors or lack of effort within the 
area. I think from all standpoints we have the best workers 
delivering great water in a reliable fashion.
    I think the need for this bill is more about dealing with 
what we've been dealt from nature in the water that is 
available through Northern California, through the Colorado 
River, and being able to develop new methods and means to be 
able to provide a reliable source of water to the residents 
here. I think that is what we are here for today.
    Mr. Calvert. Thank you.
    Ms. Solis.

  STATEMENT OF THE HONORABLE HILDA SOLIS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Solis. Thank you, Mr. Chairman, for having this 
important meeting here and an opportunity to hear the panelists 
talk about their ideas regarding this very important issue.
    My concerns really deal more with water quality and what we 
can do to try to continue the cleanup effort in our basin. I 
represent, obviously, an area that has had a history of 
polluted water now. There are some serious concerns there with 
respect to how cleanup is done and how smaller purveyors are 
able to compete for these grants technically and be able to get 
into the pool or in line to be able to receive funding.
    While the need may not always require the commitment of 
giving funds, I wonder how we can provide that everyone gets 
that equal treatment so that small communities, and one that 
comes to mind that I used to represent in the Senate was the 
area of the city of La Puente where they had to close some 
wells and they had to transport water in.
    They were then allowing for that cost to be spread over the 
consumers. That was of great concern. I know there's been some 
remedies there. I would hope there is a better way of 
addressing these issues as they come up that we can do some 
better planning and help out some of these smaller communities 
such as La Puente and areas in El Monte and others that are 
trying to deal with this issue.
    As the science becomes more prominent with respect to the 
particular kinds of chemicals or additives that we are finding 
in the water, I would hope that we could have more opportunity 
for research done as well so that we can prevent the transport 
of those contaminants down the plume which has always been an 
area of concern for me.
    Again, keeping in mind that respecting the natural 
watershed and the way that we go about conserving waters are 
equally very important to communities of interest that are now 
finding that, yes, water is a very valued resource.
    But how do we also keep the integrity of the process of 
transporting that water in areas where it is needed but also 
without disrupting the local habitat that is equally very 
important. So if anyone could comment on that, I would 
appreciate it.
    [The prepared statement of Ms. Solis follows:]

Statement of The Honorable Hilda L. Solis, a Representative in Congress 
                      from the State of California

    Thank you Chairman Calvert for scheduling this important series of 
hearings. I would like to welcome our witnesses and thank them for 
their time and expertise on this issue.
    The future of California water is uncertain. We need to answer 
several questions about the federal government's role in water 
resources development and management.
    To do this, we must look at the entire picture. Decisions about the 
future of U.S. water resources policy are inextricably linked to the 
past. Nearly a century of project development has created a complex web 
of federal and state laws and regulations, contractual obligations, and 
economies based on existing water resources infrastructure. The time to 
understand this situation and start answering questions is now.
    Again, I appreciate your time and look forward to hearing your 
understanding of the past and future of water security in southern 
California.
                                 ______
                                 
    Mr. Gastelum. I would first like to comment. In your area 
there is a water district, Upper San Gabriel Municipal Water 
District. They are one of our member agencies. I was in a 
meeting several days ago where the general manager was 
describing their thought process in dealing with the issues you 
identified.
    EPA is not well equipped to come in in a speedy fashion to 
address these issues. They are an enforcement agency. They 
don't necessarily have a lot of money available to them. A 
great deal of study is required before they can justify going 
ahead.
    The local water district decided to dip into their 
reserves, and I commend them for this, to go ahead and start 
the cleanup effort. Not everybody out there has a reserve so to 
the extent that you can provide funding for these local water 
districts to get the work going.
    Now, obviously they have to work in conjunction with EPA 
but the missing element has been money. You can go back 
afterwards and sort out who is responsible and make them pay 
but you don't make the situation worse by just sitting there 
and doing nothing so to the extent that you can address local 
funds to do these kinds of cleanup projects.
    Joe is really talking about it on a basin-wide basis but 
it's the same principle. You do solve the problem. You provide 
more water for the long term. It's clearly something that needs 
to be addressed in this context.
    Mr. Grindstaff. I would add to that that, as Ron said, we 
are attempting to deal with it on a basin-wide basis but, in 
fact, if you look at the Santa Ana watershed and our 5 million 
people, the truth is there are many communities of interest and 
each area has had to band together. One of the most positive 
things for us has been the fact that with money available from 
Proposition 13, that has made people believe that banding 
together might actually do some good.
    One of the hardest things for agencies to do, particularly 
where they had fought for years about something as crucial and 
water, is come together and say, ``We will cooperate.''
    Before I came to SAWPA I was the manager of a retail water 
agency. We guarded our water rights jealously. We were 
absolutely committed to maintaining the lowest price possible, 
and we were committed to maintaining very high quality water.
    But sometimes that didn't lead us to have incentives to 
look long range and that is what this legislation does. It 
helps people say, ``Oh, there is money available for this if 
I'm willing to extend my view and look long range. I think 
maybe I'll do that. Maybe I can cooperate with my neighbor if 
cooperation with my neighbor means that there is more money 
available.'' I think that is an important role that you can 
play.
    Mr. Calvert. I want to point out in the legislation itself, 
and I know that if, in fact, this legislation passes and 
hopefully signed into law--
    Ms. Napolitano. When it passes.
    Mr. Calvert. When it passes. Thank you for correcting me 
there. This legislation addresses that. Grants for small rural 
economically disadvantaged communities, Indian tribes, to 
improve the health and safety of all communities. The intent, 
of course, is to work this governance process where, as you 
mentioned, Mr. Koffroth, all stakeholders would be represented.
    We have a year working with the state legislature and the 
governor to put together a fair process in which communities 
and all stakeholders feel is a fair process in which people 
believe that they have an opportunity to go after funds that 
would help their communities.
    One thing that I know is a concern to all of us is that in 
the past we tend to go after projects for each individual area 
with different success levels. This will give a process in 
which, I think, everyone will feel comfortable with and the 
money and the assets will be there to fund these projects in a 
more orderly fashion with the safeguards necessary for the 
environment and to assure that planning agencies are able to 
move forward to plan for adequate water and for the future of 
California.
    If there are no other questions for this panel, I want to 
thank you, all three of you, for coming out today and 
testifying and listening to our questions and answering them 
very well. Thank you very much.
    We are going to take a 10-minute break between the next 
panel and we'll start up again about 11:10. Thank you very 
much.
    (Whereupon, at 10:57 a.m. off the record.)
    Mr. Calvert. Thank this panel. I want to explain again the 
5-minute rule in case you weren't here when I explained it to 
the first panel.
    We have a 5-minute rule for each of you on your testimony. 
The green light indicates your time is going. The yellow light 
indicates you have 1 minute left. The red light indicates that 
the time has expired. Please try to stay within that time 
requirement so we have enough time for questions and answers.
    With that, Mr. Pisano, you may begin.

    STATEMENT OF MARK PISANO, EXECUTIVE DIRECTOR, SOUTHERN 
             CALIFORNIA ASSOCIATION OF GOVERNMENTS

    Mr. Pisano. Thank you, Chairman Calvert, and other Members 
of Congress for holding this hearing on an issue as important 
as the area of water supply and also our water quality in the 
south land.
    Let me note that my organization is the Council of 
Government and the Metropolitan Planning Organization for 
Southern California. We cover six counties, all the cites. We 
currently have 17 million people and 6 million jobs in this 
region.
    I will paraphrase from my testimony to enable me to stay 
within the time frame and cover the pertinent issues that the 
Committee is now looking at.
    Let me begin by noting that my organization working with 
its members develops the long-range growth forecast in the 
growth management plan for Southern California. I'm going to 
refer you to the table at the end of my testimony where we note 
what the population and employment forecast is.
    Looking out to the year 2025 we see that we will grow to 
22,600,000 people and to 10 million jobs, representing a 40 
percent increase in population and a 43 percent increase in 
employment.
    The fundamental question of concern to our council is 
planning and managing this growth. We are concerned about the 
distribution of growth and how we get all the cities and 
counties to coordinate their plans for this growth so that 
Southern California's future is shaped by the best vision for 
our quality of life into our new century.
    These concerns require us to link growth with 
infrastructure needs accomplish this growth. As we grow, we 
need the water supply, energy, transportation and environmental 
mitigation systems to work cost-effectively to support new 
residential and business demand.
    I'll limit my comments today to water. Let me note in our 
comprehensive plan and guide we present a water supply vision 
for Southern California. This vision includes a projected need 
for 5.79 million acre-feet of water in 2015. We've also 
projected water supplies for this same time frame. Assuming we 
reach our supply goals, we expect to have a water shortage in 
dry weather periods. Shortfalls of this kind demand that cities 
and water agencies work closely together to maximize our 
resources and minimize waste.
    It also means adopting practices not only for conservation 
but for use of water from other sectors. Such practices take us 
directly to the issue of water quality. The resolution of the 
water supply issue in Southern California (and the state of 
California as well) is going to rest on our capacity to combine 
water quality and water quantity, flood control, and other 
multi-purpose uses in an integrated strategy.
    Probably the most difficult water issue that we face in 
Southern California is having a fragmented institutional fabric 
that limits the development of flexible, comprehensive and 
creative multi-purpose solutions. An example of this difficulty 
is the administration of the total maximum daily load program 
by the EPA. Their regulatory and administrative approach 
interferes with and ultimately prevents the use of strategies 
that actually improve water quality and produce better flood 
control and more water supply.
    The Committee needs to know that the Federal Government has 
established a framework for integrated problem solving. 
Unfortunately this framework has not been used to help us 
coordinate the quantity/quality relationships. One of those is 
entitled the Section 208 Area-wide Waste Water Management 
Program. It was set up in the 1972 clean water act.
    Section 208 contemplates a basin by basin process within 
our region by which water quality and quantity can be managed. 
I urge the Committee to review the provisions of this part of 
the Clean Water Act that enables us to manage our surface and 
ground waters and manage our storm water. Section 208 can move 
us beyond regulatory actions and into much needed comprehensive 
resource management actions. Currently we are the 208 agency in 
our region but have been unable to implement any of its 
potential because of lack of resources.
    Let me just conclude with the observation and the 
experiences that we are seeing with many of our partners. SAWPA 
is pointing out and demonstrating how recycling in the 
management of waste water and storm water can be used for water 
supply in addition to flood control and quality. We need to do 
that in all of our basins. Furthermore, we need to find the 
funding needed for these kind of initiatives.
    Let me just conclude by noting when we take multiple 
benefits from quantity, quality, and flood control and we 
integrate them, we will be better able to address the cost 
benefit results from combining multiple objectives. Our 
challenge is to integrate these as we develop policies and 
programs. We look forward to working with the Congressional 
Committee to get passage of legislation that helps us meet the 
growth challenge successfully .
    The resources provided in the bill gives us a start for a 
framework where we can bring these various issues together and 
truly address our long-range needs. Thank you.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Pisano follows:]

 Statement of Mark A. Pisano, Executive Director, Southern California 
                       Association of Governments

Introduction
    Good morning, my name is Mark Pisano, Executive Director of the 
Southern California Association of Governments.
    The SCAG region is the largest metropolitan area in the country, 
encompassing six counties, 184 cities, and 38,000 square miles. This 
region, which is the size of Ohio, had approximately 16 million people 
in 2000.
    The region now serves about 40% of its water demand from local 
supplies and imports about 60%, mainly from the State Water Project, 
the Los Angeles Aqueduct, and the Colorado River Aqueduct. Potable 
water supplies are over 70% imported. Actions taken all over the 
state--indeed, throughout the western states--affect the water supplies 
potentially available for the SCAG region. As of 1995, the region's 
total annual water demand was about 10 million acre feet, compared with 
a statewide usage of about 80 million acre feet.
    Factors that create challenges for Southern California's water 
supply:
     Southern California's unique economic strength. In GDP 
terms, the state of California has the 6th largest economy in the 
world; Southern California alone has the 12th largest economy.
     Southern California's tremendous growth. The region has 
already seen dramatic growth; twenty-six of the region's cities more 
than doubled in population between 1980 and 1999. This trend is 
projected to continue. The region will grow by about 40% in both 
population and employment by 2025, adding two cities the size of 
Chicago for a total population nearing 23 million. During the same 
period, trade volumes through the region's ports are expected to nearly 
triple, up to a total goods value of more than $660 billion. [See Table 
1 attached to testimony.]
     The SCAG region's unique demographic diversity, which 
means that water resources and related services must be assured in an 
equitable manner for a variety of different ethnic, socio-economic, and 
age groups.
     The concentration of growth, especially residential 
development, in the outlying areas of the SCAG region, which creates 
new demands for local water supply infrastructure. At the same time, 
the SCAG region is nearing build-out in terms of privately owned, 
developable land.
     The state's uncertain future with regard to energy cost 
and supply. Water resources are both a source of energy supply, through 
hydroelectric generation, and a source of energy demand for pumping, 
transport, and delivery, as well as for wastewater management.
     The state's uncertain future with respect to climate. 
Southern California is by nature an arid region with unpredictable 
rainfall. Drought years, whether local or statewide, likewise cannot be 
predicted. Despite the dry climate, single storm events can be so 
severe that the region has responded to flood concerns by channelizing 
many natural waterways to speed runoff. However, in many areas these 
steps have served to minimize infiltration of storm water back into 
groundwater supplies.
     The possibility of global warming adds to the climate 
uncertainty, and could further diminish rainfall even in wetter states 
like Washington and Oregon, whose water in turn provides energy to 
California.
     Southern California's history of intense agricultural and 
industrial development, combined with its extensive coastal exposure, 
means that groundwater resources are frequently degraded, requiring 
treatment before they can be used.
     The region's unique concentration of biodiversity, with 
70% of the state's listed threatened or endangered species in Southern 
California. Southern California is one of the most imperiled bio-
regions in the world, making our decisions about water resources even 
more critical to the region's environmental sustainability.
     The fragmented nature of governmental responsibility for 
water resources and water quality in the region and in the state. This 
makes planning difficult and underlines the critical importance of 
communication, of multi-stakeholder efforts, and of multi-purpose 
solutions to the region's water supply and water quality problems.
    Actions taken in the region to improve water supply, quality, and 
reliability:
     Regular water demand forecasting. The service area of the 
Metropolitan Water District of Los Angeles covers most of the SCAG 
region. Several smaller agencies provide water to other portions of the 
region's six counties. These water suppliers model population growth, 
together with conservation measures, anticipated climate conditions, 
and price, among other factors, to project water demand and identify 
possible supply shortfalls. SCAG has a Memorandum of Understanding with 
the Metropolitan Water District to provide projections of population, 
employment, and housing growth that are a cornerstone of water supply 
forecasts.
     Dry-weather shortfalls have been projected. Working 
closely with the Metropolitan Water District, SCAG has produced a long-
range water resources plan as part of a regional comprehensive plan. 
This plan projected water supply shortfalls in dry years, as summarized 
in the attached charts. Several strategies were identified in that plan 
to address these shortfalls, and these strategies are being implemented 
through SCAG's cooperative relationships with the region's water 
agencies.
     SCAG's role in regional project review and planning. SCAG 
uses its formal intergovernmental review authority to review water 
infrastructure projects for consistency with anticipated regional 
growth patterns. Through programs such as the regional Growth Visioning 
initiative and related efforts, SCAG strives to integrate water 
planning with growth planning.
     Adoption of best management practices. Metropolitan Water 
District has adopted sixteen practices aimed at water conservation, 
including such measures as water audits, new and retrofit plumbing 
standards, landscape water conservation requirements, conservation 
incentives, and others.
     Conservation of stormwater runoff. Several parts of the 
SCAG region have been able to take advantage of spreading basins and 
gravel pits to allow artificial recharge of underground aquifers. For 
example, Orange County Water District's Water Factory 21 produces 15 
million gallons a day of blended reclaimed water which is recharged 
into aquifers to serve as a barrier against seawater infiltration.
     Integrated Resources Planning by MWD. This effort by MWD 
was undertaken with the goals of providing long-term water supply 
reliability while balancing investments between local and imported 
sources and protecting the financial security of MWD and its member 
agencies.
     Water reclamation. Reclaimed water supplies are primarily 
useful for groundwater recharge, irrigation of greenbelts and golf 
courses, and industrial purposes.
     Conjunctive use of groundwater resources. These efforts 
allow storage of water in underground aquifers through stormwater 
infiltration and spreading of imported surface water during wet years 
or rainy seasons. Water can be pumped out of these reserves during dry 
periods to meet peak water demands.
     New storage facilities. Metropolitan Water District's new 
Diamond Valley Reservoir provides 800,000 million acre feet of new 
storage for Southern California, and is also producing much-needed 
electricity.
     Groundwater recovery. Degraded groundwater supplies are 
being recovered and treated, where cost-effective.
     Numerous private initiatives in watershed planning, 
conservancies, and water conservation. Non-governmental organizations 
throughout the region are showing initiative in conserving land, 
developing runoff models, demonstrating innovative water conservation 
techniques, and convening stakeholder groups to overcome some of the 
institutional barriers to integrated management of our region's water 
resources. These efforts should be coordinated and encouraged.
    What additional assistance is needed to improve Southern 
California's water security?
     Approve continued funding for Cal Fed. This effort has 
been critically important in bringing together the parties with an 
interest in an equitable apportionment of the state's water supplies. 
Too much valuable work has gone into this effort, and the economic and 
environmental stakes are too high, to even consider withdrawing federal 
support now.
     Facilitate interdisciplinary planning. The issues of 
supply and quality and reliability are so tightly interrelated it is 
impossible to act in one area without significantly affecting another 
area. We know, for example, that environmental regulation in one area 
of water quality can undermine quality initiatives in another area. It 
is not unusual to find different efforts for a better quality of life 
working at cross-purposes.
     Support the use of cost-benefit considerations. Adding 
insult to injury, often narrowly defined efforts waste money we can 
ill-afford to waste. If we're going to be good public stewards we need 
to encourage approaches that leverage our resources much more 
wisely...not waste them without concern for comprehensive cost-benefit 
considerations.
     Support stakeholder processes. We believe that the use of 
more integrated, comprehensive approaches to our water challenge here 
require an inclusive stakeholder framework. This framework will ensure 
that the complexities of environmental improvement are more fully 
understood and prioritized, that the leaders and institutions needed to 
solve these problems are involved enough to ``own'' these problems, and 
that efforts to raise resources will be validated by credible cost-
benefit assessments and supported by greater public consensus.
     Make use of existing authorities. The Clean Water Act was 
written with these approaches in mind. I refer you to Section 208 and 
its call for ``areawide'' approaches to improving water quality. We now 
refer to these stakeholder-driven efforts as watershed management 
planning. Call them what we may, these inclusive approaches to 
negotiated rule-making and problem-solving continue to be essential, 
especially when some parts of our community rely only on the hand of 
heavy regulation and confrontation. SCAG has been given Section 208 
authority for our region and stands ready to implement that authority 
in the service of inclusive regional planning. SCAG has not kept the 
Section 208 planning process current largely because of a lack of 
funding sources.
     Concluding points. And as we all know in southern 
California, higher water quality creates more water. Higher quality in 
our imported water or our local water allows more reuse and more cost-
effective reclamation. And as these efforts combine with ever-greater 
conservation, we will have sufficient water supplies to support the 
growth that's coming. That will be a great achievement in this desert 
we know as southern California.
     But achieving this water independence, drought-proofing 
our communities, will require a new framework for problem solving. We 
ask you to be ready to help support this kind of stakeholder framework, 
to get the resources of EPA aligned with these local watershed 
initiatives and to emphasize the need for integrated, consensus-driven 
water improvements. SCAG and the region's water agencies have the 
cooperative relationships necessary to respond effectively to 
anticipated shortfalls and to keep water supply from becoming the next 
``energy crisis.''
     We will bring cooperative regional initiatives to your 
attention as they mature, both in the form of reports and future 
testimony. Thank you for your interest in our challenges and your 
willingness to be partners with us as better stewards of nature's 
bounty.
                                 ______
                                 
    [Attachments to Mr. Pisano's statement follow:]

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 STATEMENT OF RICHARD ATWATER, CEO AND GENERAL MANAGER, INLAND 
                    EMPIRE UTILITIES AGENCY

    Mr. Atwater. Thank you, Chairman Ken Calvert, Hilda Solis, 
Grace Napolitano. Thank you very much for the opportunity to 
testify. My name, for the record, is Richard Atwater. I'm the 
General Manager at the Inland Empire Utilities Agency, a member 
agency of SAWPA, and also a member agency of the Metropolitan 
Water District.
    Mr. Calvert. Move your mike a little closer.
    Mr. Atwater. Let me just be brief. I have a written 
testimony but let me highlight a few items.
    First, like the previous panel, I want to thank the 
Chairman for introducing this legislation, H.R. 1985. We 
definitely support and want to work with you as you go forward 
with the legislation. I think it's a real opportunity for not 
only Southern California but statewide to address some of our 
long-term water problems.
    First and foremost, in our area of San Bernardino County we 
overly the Chino Groundwater Basin, one of the larger 
groundwater basins in Southern California. As highlighted in 
Mr. Grindstaff's testimony, the opportunity to recycle water 
and implement the conservation best management practices, 
groundwater cleanup, and store surplus water from the Colorado 
River and Northern California so that we can utilize that 
supply in a drought. It will be a very cost effective way to 
address those issues.
    The previous panel talked about some of the local 
groundwater contamination problems in our area because of 
historic agriculture, dairies, orange groves, vineyards, the 
result is we do have elevated nitrates and higher salinity.
    In fact, in Congressman Calvert's area, I know he's well 
aware of it, the Jurupa Community Services District is facing 
an imminent problem where their local wells will be exceeding 
the drinking water standards for nitrates and they don't have 
an alternative supply readily available to them since they are 
not connected to the imported water system (MWD).
    That sort of problem highlights the need from the Federal 
Government's perspective the new EPA proposed arsenic standard. 
The city of Chino Hills has well water that is roughly five 
times proposed EPA standard which will be a very expensive 
issue for them to treat and deal with that.
    In that context, I wholeheartedly support the approach that 
Metropolitan has taken in their integrated water resources plan 
when they adopted it in 1996, as Mr. Gastelum pointed out today 
in his testimony, and that there is the need to have an 
integrated balanced approach to solving our water problems.
    You look at the projections of growth in our area that Mr. 
Pisano just presented for SCAG. You go forward 25, 40 years and 
you can see that with this population growth and even if we had 
a full supply from the State Water Project and the Colorado 
River, we would be short by upwards of million acre-feet.
    Clearly, local water supply and local management of 
resources and the infrastructure to do that is a critical issue 
facing Southern California. Clearly we need to do both. We need 
to deal with the issue statewide within Southern California it 
is, in my opinion, very important that we look at the local 
resources.
    Let me just highlight what has happened in the last year. 
Importing water to Southern California is very energy 
intensive. In fact, water use in California uses about 15 
percent of the total electric needs throughout the state.
    One of the things we've done, like most water agencies in 
Southern California, we've changed our public message to be a 
water and energy conservation message. The homeowner, if he 
saves water, will also help us greatly conserve a large amount 
of energy. I think that is something important message to the 
public.
    When you ask about the Federal role, well, the Washington 
State, as Members of Congress are well aware, we are totally 
interconnected with kilowatts. Certainly in the Colorado River 
Basin we have seven states that are joined at the hip on water 
management issues.
    And so the Federal role both locally with EPA drinking 
water standards, the Army Corps of Engineers on flood control 
improvements, we are working with NRCS on manure management 
clean up and renewable energy projects with the dairies in the 
Chino Valley.
    Certainly with the Bureau of Reclamation we are all 
involved intensely with our activities in Southern California. 
One of the things we would hope is that, for example, that this 
Committee would hold hearings on the energy and water issues 
and how they we can work together to help solve not only the 
energy crisis but better manage our water supplies to reduce 
our need for high-priced electricity.
    Secondly, let me also highlight for the Committee that the 
Southern California salinity management study that was jointly 
sponsored by the Bureau of Reclamation and the Metropolitan 
Water District, that issue of salt management is something that 
the Committee ought to look at more in depth.
    Then, thirdly, the Bureau of Reclamation started in 1992 
has this regional study that they worked with all the local 
agencies on. We participated, Metropolitan, SAWPA, and other 
agencies in Southern California. That is the regional water 
recycling program. I think that is another issue. How do we 
work together to more efficiently use our local supplies is one 
that I would encourage the Committee to continue to look at. 
Thank you.
    Mr. Calvert. Thanks, gentlemen.
    [The prepared statement of Mr. Atwater follows:]

    Statement of Richard W. Atwater, General Manager, Inland Empire 
                            Utilities Agency

I. Introduction
    Thank you Mr. Chairman Ken Calvert and members of the Subcommittee 
for Water and Power for the opportunity to testify today regarding the 
water problems facing southern California. I am the General Manager of 
the Inland Empire Utilities Agency.

                   A. Inland Empire Utilities Agency

    The Inland Empire Utilities Agency, a municipal water district 
under California law, was formed in 1950 by a popular vote of its 
residents. The service area of the Agency is entirely in San Bernardino 
County and has a current population of approximately 700,000. The Chino 
Basin also has 350,000 dairy cows, the most densely concentrated 
population of dairy cows in North America. Overall water use is about 
350,000 acre-feet annually, 70 percent of the supplies are from local 
sources within the Santa Ana Watershed.

              B. Background and Interagency Relationships

    The Agency is a member agency of the Metropolitan Water District 
and distributes about 65,000 acrefeet of imported water to the cities 
of Chino, Chino Hills, Fontana (through the Fontana Water Company), 
Ontario, Upland, Montclair, Rancho Cucamonga (through the Cucamonga 
County Water District), and the Monte Vista Water District. The Agency 
also provides wastewater treatment service ( four water recycling 
plants that produce about 60 million gallons per day or 63,000 acre-
feet per year). Excess recycled water flows downstream into the Santa 
Ana River and the Orange County Water District recharges that water 
into the Orange County groundwater basin for drinking water.
    The Agency is also a member of the Santa Ana Watershed Project 
Authority (SAWPA) and is an active member of the Santa Ana River 
Watershed Group and the Chino Basin Watermaster. As a member agency of 
SAWPA, the Agency's water projects are closely coordinated with the 
SAWPA watershedwide planning and the funding of priority projects 
through the Water Bond Prop. 13 grants.

II. Current Actions and Programs to Improve the Water Supply 
        Reliability
    The IEUA Urban Water Management Plan, adopted in December 2000 
documents the overall strategy for improving the water supply 
reliability in the Chino Basin area.
     Water Conservation
     Water Recycling
     Local Groundwater Storage and Conjunctive Use
     Groundwater Cleanup
     Stormwater
     Renewable Energy and Organics Recycling

                         A. Water Conservation

    IEUA and its retail utilities are committed to implementing the 
Memorandum of Understanding (MOU) Regarding Urban Water Conservation in 
California. IEUA is an active member of the California Urban Water 
Conservation Council (CUWCC). Currently, the Agency is expanding its 
conservation efforts to promote both water and energy conservation 
programs to our customers. To fund these new conservation initiatives, 
IEUA's Board of Directors is increasing its water rate for imported 
water by $ 1 per acre foot this week plus is earmarking general fund 
taxes to finance the water and energy conservation programs for our 
customers.

                           B. Water Recycling

    IEUA owns and operates four water recycling plants that produce 
high quality water that meets all state and federal requirements for 
non-potable landscape irrigation, industrial uses, and groundwater 
replenishment. The Agency recycles about 4,000 acre-feet annually and 
has a plan to increase that to approximately 70,000 acre-feet annually 
over the next decade. This is a ten year $125 million capital 
improvement program and would be accomplished in the following manner.
    Build ``purple'' recycled water pipeline system to hookup existing 
large customers (Inland Paper, golf courses, city parks, Reliant 
powerplant).
    Blend recycled water with stormwater and imported water in a 
coordinated fashion with flood control district to ensure that all 
water is conserved and replenishes the Chino Basin in an optimal manner 
(targeted goal is an additional recharge of 80,000 acre-feet per year).
    Build in the future new smaller water recycling plants in the 
northern part of our service area to provide recycled water to 
communities (Upland, Fontana, and Rancho Cucamonga) without the need to 
pump the water to them.
    Coordinate with cities and developers on new urban development 
projects so that dual ``purple'' piping is installed upfront to 
maximize non-potable uses with recycled water.

            C. Local Groundwater Storage and Conjunctive Use

    The upper watershed of the Santa Ana River is fortunate to have 
extensive groundwater basins. This resource as described in Joe 
Grindstaff's testimony is the foundation for all of our water supply 
planning for the Santa Ana River Watershed and for that matter, the 
whole coastal plain of southern California.
    Within the Chino Basin area, the Watermaster is implementing an 
Optimum Basin Management Plan to enhance the conjunctive use storage of 
the Chino Basin. The Optimum Basin Management Program developed over 
the past two years by the Chino Basin Watermaster would implement a 
comprehensive water resources management strategy to drought proof the 
area and enhance the yield of the groundwater basin. The Chino Basin 
Watermaster has developed a conjunctive use program to store 500,000 
acre-feet of imported water in wet years for drought year withdrawal 
for both local, regional and statewide availability.

                         D. Groundwater Cleanup

    Historically, Colorado River water (relatively high salinity) and 
agricultural practices have caused areas of the Chino Basin to have 
high salts that make the water unfit for domestic uses. To correct this 
problem and to recover this poor quality water, the Chino Basin Optimum 
Basin Management Plan recommends implementation of groundwater cleanup 
projects to pump and treat poor quality groundwater to meet drinking 
water standards. Additionally, the desalination projects of the lower 
Chino Basin area will protect and enhance the water quality of the 
Santa Ana River and the downstream use by Orange County.

                     Groundwater cleanup projects:
     Lower Chino area--- groundwater desalination 40 mgd (or 
approximately 45,000 AF per year), $250 million capital improvement 
program over 20 years.
     Jurupa Community Services District--- emergency need to 
build an ion exchange desalination project (about 4 million gallons per 
day facility) because Riverside County residents have well water 
approaching drinking water standards for nitrates.
     City of Chino Hills--- local Chino Basin well water has 
elevated arsenic (average concentrations over five times the proposed 
EPA drinking water standard of 10 ppb).
     Additional treatment of nitrates in groundwater in the 
communities of Chino, Ontario, Fontana, Upland, Montclair, Pomona, and 
Rancho Cucamonga is needed. Approximately six treatment plants are 
proposed that will pump and treat about 25,000 acre-feet annually of 
nitrate contaminated groundwater for municipal drinking water supplies.

                             E. Stormwater

    A critical issue facing the coastal plain of southern California as 
the region continues to urbanize and hardscape our landscapes will be 
how to implement both small scale and larger scale projects for 
stormwater capture to allow percolation into our groundwater basins. 
IEUA in coordination with the Chino Basin Watermaster, the San 
Bernardino County Flood Control District and the Chino Basin Water 
Conservation District is developing an integrated recharge master plan 
to optimize the capture of stormwater with replenishment of imported 
water from MWD and our local recycled water to enhance the storage and 
recovery of water from the Chino Basin.
    IEUA is also sponsoring work, in part funded by the CALFED Bay-
Delta Program, with the Rocky Mountain Institute on small scale, on-
site (neighborhood development) stormwater management strategies to 
enhance percolation of rainfall to minimize runoff, contamination of 
rainfall before it percolates, and costeffectively reduce flood control 
requirements.

              F. Renewable Energy and Organics Management

    The energy crisis reminds all of us working on the water problems 
facing California how incredibly dependent the imported water 
infrastructure of southern California is on cheap, low cost electricity 
to pump imported water into our region.
    IEUA in response to the energy crisis and our need to be a steward 
of our environment has developed a Chino Basin Organics Management 
Strategy that will:
     Produce through anaerobic digestion enough methane gas 
for 50 megawatts of clean, renewable electric energy by 2006;
     Cost effectively recycle organic wastes into fertilizer 
products in an environmentally safe manner that will reduce many 
thousands a year of long haul diesel truck trips per year;
     Reduce significantly air and water pollution from dairy 
cow manure; and
     Eliminate the need for electric power from the grid for 
operating the Chino Basin desalination and water recycling plants.
    Last Friday, June 15 IEUA with NWRI and the Southern California 
Alliance of POTWs (SCAP) hosted a conference on the Chino Basin 
Organics Management Strategy. We were very pleased with the broad based 
endorsement of the Strategy and the strong support we have received to 
date from the State of California and the Bush Administration for this 
initiative.

III. Future Issues and Need for Federal Assistance
    Southern California does have enormous water problems when you 
consider the following trends:
     The current population is about 17 million and will 
likely double over the 50 years.
     The imported water infrastructure from MWD can 
optimistically only deliver 3.2 million acre-feet, assuming full State 
Water Project entitlement deliveries of approximately 2 million acre-
feet and the
     Colorado River Aqueduct staying full constantly at 1.2 
million acre-feet.
     Importing water to southern California requires a large 
amount of electrical energy, substantially more than the alternative 
local supplies (recycled water, capturing stormwater, and groundwater 
recovery of poor quality water);
     The region will be over one million acre-feet short in 
2050 with a full supply from the State Water Project and the Colorado 
River!
    The issue for the region, as articulated in the MWD Integrated 
Water Resources Plan adopted in January 1996, is to developed a 
balanced approach to multiple sources of supplies with a clear priority 
to local resources management and emphasis on less energy intensive 
uses of water that protect water quality and the wildlife habitats of 
the region.
    How do we accomplish that? My suggestions are as follows:
    Coordinated regional infrastructure planning for water supply, 
groundwater management, stormwater, wastewater reuse and recycling 
needs to be integrated on a watershed scale. Regional leadership in the 
planning of flood control, wastewater and water facilities is an 
opportunity that can save billions over the next 5 decades. The Federal 
government should be a partner in this process. EPA, Army Corps, US 
Bureau of Reclamation, the USDA Natural Resources and Conservation 
Service all have significant activities within the region.
    Excellent examples mufti-agency planning and coordination include:
     USBR and MWD co-funding of the Salinity Management Study.
     USBR Southern California Comprehensive Water Reclamation 
and Reuse Study.
    I would recommend that your Committee hold a hearing on these 
studies.
    Santa Ana River Watershed Group and the Los Angeles and San Gabriel 
Watershed Council are institutional forums for coordinating between 
local, state and federal agencies focused on a geographic planning area 
(a river basin).
    Closely linked to the regional planning for infrastructure is water 
quality. In the future all water will be managed to maximize beneficial 
reuse and to avoid water quality problems (whether contaminating a 
beach, a groundwater aquifer, or a community stream). Drinking water 
quality--less than 5 percent of all water use in southern California is 
for in the house domestic uses (drinking, bathing, cooking). We need to 
rethink why we import water 500 miles and use it only once and than 
discharge into the ocean.
    Listed below are key references of the water resources planning 
issues and opportunities facing southern California.
    In closing, thank you for the opportunity to testify. If we can any 
additional information on the current and future water problems facing 
California, please do not hesitate to contact me.
    References:
    1. Urban Water Recycling Feasibility Assessment Guidebook, Richard 
Atwater, Frank Dryden, and Virginia Grebbien, California Urban Water 
Agencies with assistance from Watereuse Association of California. 
September, 1998 (www.watereuse.org).
    2. Salinity Manament Study, Final Report June 1999, Metropolitan 
Water District of Southern California and U.S. Bureau of Reclamation 
(www.mwd.dst.ca.us).
    3. Groundwater and Surface Water in Southern California, A Guide to 
Conjunctive Use, Association of Ground Water Agencies, October 2000 
(www.agwa.org)
    4. Chino Basin Optimum Basin Management Plan, Chino Basin 
Watermaster, July, 2000 (www.cbwa.org).
    5. IEUA Urban Water Management Plan, December 2000 (www.ieua.org).
    6. IEUA Seven Point Emergency Action Plan, March 2001 
(www.ieua.org).
    7. Rates, Rights, and Resource Management: Metropolitan's Strategic 
Planning Process and Southern California's Water Future, draft 2001, 
Richard Atwater and William Bloomquist
    8. Chino Basin Organics Management Strategy, IEUA, May 
2001(www.ieau.org).
                                 ______
                                 

STATEMENT OF TOM LEVY, GENERAL MANAGER, COACHELLA VALLEY WATER 
                            DISTRICT

    Mr. Levy. Thank you. I appreciate opportunity to be here 
today and testify. I would like to start off by saying I 
support your leadership on this bill and I am looking forward 
to working with you and the Committee to ensure that it is 
passed.
    I would like to talk a little about the Colorado River and 
it is probably the most important source of water for Southern 
California. We get about 5.2 to 5.3 million acre-feet a year 
from the Colorado River. However, California is only entitled 
to 4.4 million acre-feet in normal years.
    We have been overusing the Colorado River water by about 
800,000 acre-feet a year. This was allowed because the other 
lower-basin states were not using all of their entitlement but 
they are now effectively utilizing their entitlement so we 
would be reduced except for interim surplus guidelines.
    The guidelines allow California 15 years to reduce its use 
to 4.4 million acre-feet in normal years. These guidelines 
exist only because California Colorado River Agencies 
negotiated an agreement in October 1999.
    This agreement results in the preparation of 39 other 
agreements that include the Quantification Settlement 
Agreement. State and Federal environmental reviews are required 
before the agreements can become effective.
    Without the Quantification Settlement Agreement coastal 
Southern California would be cut by 750,000 acre-feet this 
year. This would have significant economic impacts on 
California as it would force Metropolitan to increase its 
demand from the State Water Project and from water markets. 
This would impact the Central Valley and the bay area. 
Significant water shortages would occur in California.
    The Quantification Settlement Agreement is at risk because 
of delays in the restoration of the Salton Sea. The water 
transfers from Imperial Irrigation District which are a 
critical component if California is to reduce its Colorado 
River usage cannot and should not fund the restoration of the 
Salton Sea.
    The restoration of the Salton Sea is a national and 
statewide responsibility. Congressional help is needed to 
ensure that these water transfers occur. Without this help the 
California economy will be damaged and the problems of the 
Salton Sea will continue to exist. The sea can be restored only 
through direct action and inaction is a decision not to save 
it.
    Other Colorado River issues include a solution to the 
environmental issues of the Mexican Delta without negatively 
impacting U.S. water users, salinity control programs to reduce 
the amount of salt that the agencies that use Colorado River 
water would get, and development and funding of a multi-species 
habitat conservation plan for the lower Colorado River that 
restores critical and endangered fish without impacting water 
power users.
    We are a State Water Project contractor and receive our 
State Water Project through an exchange with Metropolitan Water 
District. As a state water contractor, we need an adequate 
supply of safe and reliable water from the State Water Project.
    The project is not meeting the commitments that we sign 
contracts for in the 1960's and we need to have CALFED 
implemented in a balanced manner. That is environmental 
restoration, additional storage now of reliable and efficient 
transportation facilities across the Delta, and solutions that 
work if global warming occurs. I believe your bill does this.
    In terms of local initiatives, the failure of the State 
Water Project to meet its commitments has forced local agencies 
to attempt to implement solutions. These include conjunctive 
use, conservation programs, recycling, brackish water 
desalting, and local storage programs.
    Many of these strategies require the availability of water 
supplies for them to work. All of them are costly. Federal and 
state funding both as grants and loans are needed to implement 
these to the fullest.
    Thank you.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Levy follows:]

Statement of Tom Levy, General Manager-Chief Engineer, Coachella Valley 
                 Water District, Coachella, California

                      Introduction and background

    My name is Tom Levy. I am general manager-chief engineer of the 
Coachella Valley Water District.
    The Coachella Valley Water District provides a variety of water-
related services throughout a 1,000-square-mile service area in the 
southeastern California desert. It is primarily located in that portion 
of Riverside County commonly referred to as the greater Palm Springs 
area but it also provides domestic water service and sanitation in a 
portion of Imperial County along the Salton Sea and its boundaries 
extend into a small part of San Diego County.
    The district was founded under the County Water District Act of the 
State of California in 1918. It acquired regional flood control 
responsibilities when it absorbed the Coachella Valley Stormwater 
District in the late 1930s. In addition to storm water protection, the 
district provides irrigation water from the Colorado River to about 
70,000 acres of farmland. It provides domestic water to nearly 83,000 
homes and businesses in the cities and communities of Cathedral City, 
Rancho Mirage, Palm Desert, Indian Wells, La Quinta, Thermal, Mecca, 
Oasis, Desert Shores, Salton City, North Shore, Bombay Beach and 
surrounding areas. Wastewater collected from nearly 72,000 sanitation 
hookups flows to six reclamation plants where most is converted to high 
quality water for reuse for golf course and greenbelt irrigation. The 
district also operates groundwater recharge facilities for much of 
Coachella Valley.
    While all of Southern California is a desert, with an average 
annual rainfall of only about 12 inches on the coastal plain, Coachella 
Valley is especially arid with only about 3 inches of precipitation 
annually. There are no major rivers flowing through the area so most of 
Southern California's water supply must be imported from great 
distances--the eastern Sierra, Northern California and the Colorado 
River. Coachella Valley Water District has contracted to receive water 
from both Northern California and the Colorado River.
    All domestic water the district delivers is pumped from a large 
groundwater basin, also in a state of overdraft. It currently is 
replenished by natural flows of snowmelt from surrounding mountains and 
by imported water from the Colorado River through a contract with the 
Bureau of Reclamation and from the California State Water Project.

                Supply, quality & reliability challenges

Colorado River
    Supply: California's Colorado River supply is limited by the U.S. 
Supreme Court and by the California Limitation Act to 4.4 million acre-
feet per year. Accompanying charts show the division of the river's 
waters between the states and between agencies within California. 
Still, during the last 10 years the state has used more than 5 million 
acre-feet annually. The loss of 600,000 to 800,000 acre-feet of water 
annually to Southern California when California is limited by 
``normal'' Colorado River flows carries with it significant adverse 
economic impacts unless enough time is granted to implement essential 
reductions in use and development of alternative sources.

[GRAPHIC] [TIFF OMITTED] T3149.007

    Now that Arizona has developed uses for its full entitlement, 
excess water for California is a luxury of the past. Realizing this, 
and with prodding from the other basin states and the Secretary of the 
Interior, California and its Colorado River water purveyors have been 
working for several years on a plan to ultimately reduce the state's 
demand on the river to its basic entitlement. While negotiations 
continue to resolve individual agency supply concerns, enough progress 
had been made by the beginning of this year to earn the Secretary of 
the Interior's concurrence on Interim Supply Guidelines which allow the 
state 15 years to orderly reduce its demand on the river to its basic 
entitlement. These guidelines are conditional on the Quantification 
Settlement Agreement being operational by Dec. 31, 2002. Arizona and 
Metropolitan Water District of Southern California have worked out an 
agreement where that state would allow California surplus supplies in 
exchange for Metropolitan protecting Arizona from shortage impacts. 
Currently, progress is being made concerning environmental impact 
documents for the Quantification Settlement Agreement.
    All seven Colorado River Basin states support implementation of the 
California Plan to significantly reduce the state's Colorado River 
consumption. Unless water transfers pursuant to the Quantification 
Settlement Agreement begin in 2002 urban Southern California could lose 
up to 750,000 acre-feet per year of Colorado River water, resulting in 
a water crisis with severe economic impacts. To meet this schedule, all 
environmental compliance actions must first be secured. This requires 
congressional action because the Fish and Wildlife Service is unable to 
grant necessary permits before mitigation is authorized and 
funded.Without legislative action this year, the Quantification 
Settlement Agreement, Colorado River surplus guidelines, the seven 
state commitments and the ability of California to meet is obligations 
to stay within its Colorado River allocation would all be negated.
    The sought legislation would also authorize development of off-
stream water management reservoirs near the All-American Canal to 
enhance off-stream storage capability, would enhance the ability of 
Mexico to make efficient use of its Colorado River entitlement and 
would assist the development of a reliable water supply for the San 
Luis Rey Indian Water Rights Settlement.Quality: Historically, the 
Colorado River carries a heavy salt load--salt that leaches into the 
river naturally and salt that is added as water diverted for irrigation 
is returned to the river for downstream uses. By the time Coachella 
Valley Water District receives Colorado River water through the All-
American Canal system, nearly a ton of salt is delivered with each 
acre-foot of water. Coping with this salt is costly both in terms of 
money and additional water consumed.
    Salinity damage from Colorado River water in the United States 
typically range between $500 million and $750 million per year 
according to Bureau of Reclamation figures. High salinity levels make 
it difficult to grow fruits and winter vegetables and salt destroys 
domestic water pipelines and fixtures. Studies show that salinity 
damage could exceed $1.5 billion annually if future increases are not 
controlled. Several control projects have been completed since the 1974 
Colorado River Basin Salinity Control Act, Public Law 93-320, was 
adopted. Projects currently under development include the Paradox 
Valley, Grand Valley and Las Vegas Wash Units. Cost of salinity control 
generally ranges from $20 to $100 per ton while a conservative analysis 
of benefit is estimated to be $340 per ton.Traces of perchlorate, an 
industrial byproduct leaching into Lake Mead from the Las Vegas Valley 
area, have been detected in Colorado River water entering the Coachella 
Valley.
    And then, of course, there is the time bomb of the pile of uranium 
tailings sitting near the river's bank in Moab, Utah, with radioactive 
materials leaching into the water daily.Reliability: From the 
standpoint of having excellent storage facilities in Lakes Powell and 
Mead, the Colorado River has been extremely reliable to carry its users 
through extended droughts because of 60 million acre-feet of on-river 
storage. That reliability is at risk.
    The threat to reliability comes from two sources, both caused by 
environmental concerns. Before dams were placed on the river to store 
water for droughts and to protect whole regions from devastating 
flooding the river flowed freely to the Gulf of California. Today, 
there is a strong environmental movement to return a portion of that 
historic flow to the gulf.
    At the same time, the water conservation necessary to reduce 
California's demand on the river requires that the inflow to the Salton 
Sea be reduced. Unless the environmental consequences of the reduced 
inflow are addressed, California's Quantification Settlement Agreement 
is threatened.The Salton Sea was created shortly after the turn of the 
century when man accidentally diverted the entire flow of the Colorado 
River into the Salton Sink for two years. It has been maintained since 
by Colorado River water diverted to irrigate the Imperial and Coachella 
Valleys in California and the Mexicali Valley in Mexico.
    Today the sea is a primary resting place for migratory birds, 
including some endangered species.With a surface elevation nearly 220 
feet below sea level, the only way water leaves the Salton Sea is 
through evaporation which leaves the salts behind making today's sea 
saltier than ocean water. There has been much work done locally and in 
Washington toward saving the Salton Sea but this must remain a separate 
issue. Habitat such as wetlands adjacent to the sea can be created to 
address the endangered species needs resulting from Colorado River 
water conservation and transfer programs which will reduce inflow to 
the sea.
    Attempts to increase flows to the Colorado River Delta in Mexico 
for environmental enhancement also threaten the reliability of the 
river's water supply in the United States. Environmentalists claim only 
a ``small'' amount of water, about 100,000 acre-feet is needed for 
habitat enhancement in the delta. This is one-third of Nevada's annual 
entitlement. Mexico currently receives at least 1.5 million acre-feet 
of Colorado River water annually plus any surplus flows. So far, all of 
it has been diverted at Morales Dam in Mexico to irrigate farmland.
    Any delta enhancement activity must be done creatively to assure 
that it doesn't contribute to shortages in California and to assure 
that it benefits delta habitat.

[GRAPHIC] [TIFF OMITTED] T3149.008

State Water Project
    Quantity: The State Water Project was oversold and under-built. 
Even in a normal year, the State Department of Water Resources cannot 
meet commitments to its contractors. In a dry year it is incapable of 
producing half of the water it promised. This year it provides 35 
percent of its commitments. Solutions are needed to move water through 
or around the Sacramento-San Joaquin Delta. The State of California 
needs to honor its 1960s commitment to finish the project. This 
requires an aggressive environmental restoration program coupled with 
storage and facilities to move water around the delta.Quality: State 
Project water requires the removal of many contaminants before it can 
be used for domestic purposes. Many of these are picked up as the water 
flows through the maze of delta waterways on its way to the beginning 
of the California Aqueduct.
    Reliability: Without adequate storage and a cross-delta transfer 
facility, the State Water Project helps meet Southern California's 
water needs but, even in a normal year, it can't be called reliable. 
Global warming will reduce the reliability of the State Water Project 
and destroy many of the environmental benefits that are to be provided 
through CALFED. It needs to be considered in developing 
alternatives.Local agencies have been forced to develop programs to 
increase their reliability. This has shifted the responsibility from 
the State Water Project to the local agencies and requires more state 
and federal funding to assist them.
    Local water agencies have worked to improve its reliability through 
development of innovative conjunctive use programs. For example, for 
more than 25 years the Coachella Valley Water District and Metropolitan 
Water District of Southern California have had an exchange agreement 
which improves water reliability to both. Coachella Valley lies many 
miles from the end of the State Water Project but Metropolitan Water 
District's Colorado River Aqueduct passes through the valley. Coachella 
Valley exchanges its share of State Water Project water with 
Metropolitan for a like amount of Colorado River water which flows into 
percolation basins for groundwater recharge. To make the system even 
more flexible, Coachella takes water only during wet years when 
Metropolitan banks excess flows in the groundwater basin which 
Coachella draws upon during dry years when both state project and 
Colorado River entitlements go to Metropolitan. As part of the Colorado 
River Key Terms, both agencies are working on a 100,000 acre-foot wet 
year transfer that will improve reliability and reduce costs.
    Both state project and Colorado River water supplies are extended 
through these types of conjunctive use programs.
Groundwater
    Quantity: The amount of groundwater available to Southern 
California varies with the individual basins and sub basins. I will 
limit my remarks to the groundwater basin of Coachella Valley which, 
fortunately, is among the best in Southern California from the 
standpoint of large storage capacity.Still, it is in a state of 
overdraft and must be constantly replenished to provide stability and 
reduce the potential for ground subsidence and water quality problems.
    The groundwater supply is large enough to sustain our water users 
through an extended drought if necessary.Because rainfall is so scarce 
in Coachella Valley, professional water users (farmers and golf course 
managers) have recognized water as a major cost of doing business and 
have become world leaders in the development of micro-irrigation, 
computerized delivery systems and other water conservation techniques 
now used in many arid areas.
    Replenishment assessment fees are charged to major groundwater 
pumpers so they pay their proportionate share of the cost of replacing 
extracted water. Nearly all the water that we can reclaim from sewage 
is redistributed for golf course and greenbelt irrigation, further 
reducing demands on the groundwater supply.Quality: Generally, the 
quality of Coachella Valley's groundwater is very good but planned and 
proposed state and federal regulations can make that water very 
expensive for the consumer, probably without improving its 
healthfulness. Desert area groundwater often contains naturally 
occurring constituents such as radon, arsenic and chromium 6 at low 
levels but above levels proposed by some.
    We believe it is vital to deliver healthful water to urban users 
and recognize the necessity for the costs those users must bear for 
healthful water. However, we do not believe it is appropriate to 
increase the costs of providing them with water without sound science 
to indicate that the additional money they are forced to spend will 
make their drinking water more healthful. Coachella Valley Water 
District had contributed significantly to funding of scientific 
research in these areas and has actively encouraged other agencies to 
do the same. Concurrently, we also are investing in studies to 
determine cost-effective ways of removing constituents that may be 
found to be harmful. The head of our water quality section is one of 16 
people currently sitting on an EPA subcommittee studying costs of 
arsenic removal.We all agree that the current arsenic standard probably 
is too high but scientific studies to determine an appropriate level 
are still incomplete. If the level is set at 10 parts per billion, the 
annualized costs to Coachella Valley Water users will be about $2 
million. Unfortunately, this will be assessed from a small amount of 
users in rural areas because our wells in large population centers are 
relatively arsenic-free.
    Radon is a totally different story. Exposure to radon gas escaping 
from well water is very small compared to total amounts in ambient air. 
Still, Coachella Valley water users would be expected to pay as much as 
$8.3 million annually to meet requirements which have an almost non-
existent health benefit.Fortunately, the federal EPA has stayed away 
from the chromium 6 debate but some California legislators at both the 
state and federal levels are pushing for standards without the benefit 
of science.
    All current studies indicate that chromium 6 is not a carcinogen 
when ingested. In fact, it is rapidly converted to chromium 3, an 
element important to body functions, when ingested or exposed to 
organic matter. Because domestic well water generally is protected from 
organic contamination, chromium 6--as a percentage of total chromium--
appears higher in groundwater than surface supplies. Very little is 
known about removal of chromium 6 but preliminary numbers indicate the 
cost per year in Coachella Valley could be in the $15 million 
range.Another concern facing all of California is the adverse effects 
of MTBE on the state's ground and surface water supplies. This has not 
yet become a problem in Coachella Valley but it is only a matter of 
time.
    Reliability: The short- to mid-term reliability of the Coachella 
Valley groundwater basin is excellent and the district is currently in 
the public review stages of a valley-wide water management plan which 
will extend its reliability for decades. The plan requires 
implementation of a variety of conservation, conjunctive use, 
importation and reclamation activities designed to reduce use without 
damaging the valley's lifestyle or joint economic bases of tourism and 
agriculture.
    It involves more use of Colorado River water to reduce the demand 
on the groundwater basin and increased availability of state project 
water for exchange to increase the availability of water for 
groundwater recharge. These issues are closely tied to current 
negotiations concerning the Colorado River Quantification Settlement 
Agreement.

                     Measures and assistance needed

Colorado River
    Probably the most important issue facing Southern California water 
users that requires federal participation is the Colorado River 
Quantification Settlement Agreement. To go forward, we need 
congressional help in the form of $60 million for enhancement programs 
to protect endangered species habitat around the sea and direction to 
accept and implement a habitat conservation plan for Imperial Valley 
and the Salton Sea. Restoration of the Salton Sea is an issue that 
Congress and the California legislature need to address. However, the 
schedule for this important action is behind the implementation of the 
Quantification Settlement Agreement and should not result in failure of 
the Quantification Settlement Agreement and the resulting devastating 
economic impacts on California.
    An urgent short-term need is for the removal of the uranium 
tailings from the riverbank near Moab, Utah.An important long-term 
project is continued investment in desalting research. There is nearly 
one ton of salt in every acre-foot of Colorado River water delivered to 
Coachella Valley farms. The economic costs of such a salt load 
delivered throughout Southern California is tremendous.
    We also need assistance in resolving the Mexican Colorado River 
delta issue with creative programs that reach environmental goals 
without the sacrifice of needed water supplies in the United States.
State Water Project
    Concerning state waters, we need the CALFED process to work. Both 
state and federal officials must continue to work toward improving the 
water supply for most of the state by fixing the delta to improve both 
quality and quantity of water for the south.With the population of 
California growing, additional water supplies, including the benefits 
from storage, must be part of the solution.
Conservation
    Grant and loan programs to implement conservation and reliability 
enhancement programs--including water banking, conjunctive use, 
desalting brackish water and recycling--would help Southern California 
get through future droughts. An example of such is Coachella Valley's 
Martinez Canyon Recharge program. Here, a groundwater recharge 
facility, similar to the one the district has operated for many years 
for urban users, will be constructed in the agricultural portion of the 
valley to receive water through the Coachella Branch of the All-
American Canal. When completed, it will help rebuild a declining 
groundwater basin during normal years along the Colorado but, during 
years of shortage, farmers could ease up on their Colorado River 
demands and rely, instead, on a freshly recharged groundwater basin.
    Quality: We need to make sure water quality issues are based on 
good science and, when good science determines that expenditures must 
be made beyond the ability of users to pay, federal subsidies should be 
available to make up the difference instead of granting waivers to 
small service areas. If the water is found to be unhealthful, it is 
unhealthful to small populations as well as large populations.

                           Concluding remarks

    Thank you for traveling to California to hear our concerns about 
the state's water future. We look forward to working closely with you 
to address some of these recommendations and concerns.
    If you desire additional information about Coachella Valley Water 
District or some of the issues I have mentioned here we would welcome a 
visit to our web site: www.cvwd.org
    Of course, I am available to respond to any questions.
                                 ______
                                 

    STATEMENT OF DARRYL MILLER, GENERAL MANAGER, WEST BASIN 
   MUNICIPAL WATER DISTRICT & CENTRAL BASIN MUNICIPAL WATER 
                            DISTRICT

    Mr. Miller. Thank you very much, Chairman Calvert, and 
Committee members for allowing me to be here today and 
primarily testify regarding the value of local projects 
regarding our water supply issues in Southern California.
    My name is Darryl Miller. I'm General Manager for West 
Basin Municipal Water District, and Central Basin Municipal 
Water District. Two separate districts share one staff. Both 
are actively involved in wholesaling of imported water. Also in 
supplying recycled water in a very aggressive conservation 
program. We serve over 2.3 million people in total between both 
districts and it covers approximately 41 cities.
    Regarding recycled water, when the West Basin recycle 
program is completed we expect to be serving the capacity of 
approximately 70,000 acre-feet. Today we serve about 150,000 
acre-feet of imported water so that would replace half of the 
imported water sales with recycled water. That's significant.
    We also serve five qualities of recycled water depending 
upon the needs of the end users whether it be irrigation or 
very technical industrial sites such as the refineries.
    Central Basin has a similar goal. They have a fifty-mile 
system of existing pipes in the ground serving recycled water. 
We still need to expand that significantly and they are today 
serving 3,500 acre-feet. They plan to serve 10,500 acre-feet 
upon completion.
    Recycled water has a very strong and clear economic 
benefit. It helps drought-proof the area. It supplies 
reliability for industry which keeps jobs in the area. It is 
also has very strong environmental benefits. Rather than 
discharging from the Hyperion Treatment Plant to the Santa 
Monica Bay area, we actually divert some of that discharge and 
recycle the water for beneficial use. The more of that we can 
do, then there will be less discharge into the ocean and it 
discharges into the federally designated National Marine 
Estuary.
    The Federal Government has been investing in those projects 
and we appreciate that. Also you are very concerned with CALFED 
obviously in Colorado. The more use of recycled water is of a 
direct benefit and direct linkage to maintaining a reliable 
water supply for Southern California both for CALFED and for 
the Colorado River.
    We have been supported by a number of Congressmen and 
Congresswomen that have really helped us out in the past such 
as in Central Basin Congresswoman Napolitano, Congressman Horn, 
Congressman Royce, Congresswoman Roybal-Allard. In West Basin 
Congressman Harman--Congresswoman Harman. Excuse me. 
Congressman Waxman, Congressman Sherman, and Congresswoman 
Millender-McDonald covers both areas and she's been in a very 
key leadership position.
    Those are the attributes of the recycled water program. But 
despite the regional and Federal benefits, these programs are 
usually looked at as so-called local projects rather than 
having a beneficial regional asset and the responsibility of 
the local agencies.
    A competitive grant program as proposed by you, Chairman 
Calvert, in the Western Water Enhancement Security Act, would 
play a critical role in the ability for local agencies to 
continue to develop projects creating new alternative water 
supplies through recycling, desalination, and groundwater 
recovery.
    The creation of such a program is absolutely necessary. We 
strongly support it as part of the real solution for statewide 
water supply problems. In the absence of such a project, the 
CALFED initiative will severely limit the availability of funds 
for local projects and quickly provide a discouragement and an 
unlinking between the benefits of local projects and how it 
relates to CALFED.
    We strongly encourage the Subcommittee, the Congress to 
consider the values of local projects when you consider the 
CALFED bills. Thank you very much on behalf of the directors of 
both Central Basin and West Basin for letting me testify to you 
today.
    [The prepared statement of Mr. Miller follows:]

Statement of Darryl Miller, General Manager, West Basin Municipal Water 
            District, Central Basin Municipal Water District

    My name is Darryl Miller, and I am the General Manager of both the 
Central Basin Municipal Water District and the West Basin Municipal 
Water District. On behalf of the Central Basin District and the West 
Basin District, I thank Chairman Calvert and the Members of the 
Subcommittee on Water and Power for this opportunity to testify about 
the water supply challenges facing Southern California and the 
opportunities available to meet those challenges.
    The Central Basin Municipal Water District and the West Basin 
Municipal Water District are both public agencies that wholesale 
imported water to cities, mutual water companies, investor-owned 
utilities and private companies in southern Los Angeles County. Both 
Districts also supply their service areas with recycled water for 
municipal, commercial and industrial use and both are aggressively 
involved in water conservation efforts. The Central Basin District also 
supplies water used for groundwater replenishment. Each of the two 
agencies has a five-member publicly elected Board of Directors that 
sets policy and governs operations. However, the two Districts share a 
common staff and headquarters in Carson, California.
    The Central and West Basin Districts serve a combined area of over 
400 square miles in southern Los Angeles County. The population in this 
combined service area is over 2.3 million people living in 41 cities 
and unincorporated areas of the County. Each year, these two Districts 
deliver about 475,000 acre-feet of water in the combined service area.
    The Central Basin and West Basin Districts are each unique in the 
make-up of their service areas and the water supply challenges they 
face. While each is charged with ensuring a safe, adequate and reliable 
supply of water to its customers, each has its own specific obstacles 
to overcome in meeting that mission. Also, each District has initiated 
its own measures to improve its ability to meet the water supply needs 
of its service area.
    The West Basin Municipal Water District was formed in the mid-
1940's to preserve the limited underground water supplies in West Coast 
Groundwater Basin and to secure supplemental water supplies. Today, 
about 80% of the 210,00 acre feet of water used in the West Basin 
service area is imported water purchased by the District from the 
Metropolitan Water District if Southern California. Additional supplies 
come from local groundwater sources and from the District's aggressive 
water recycling program. Through water recycling and water 
conservation, the West Basin District is striving to significantly 
reduce the demand for imported water within its service area.
    The West Basin District is currently constructing additional 
components to the largest water recycling system of its kind in the 
nation. Recycled water in the West Basin District is domestic 
wastewater originating from the County of Los Angeles' Hyperion 
Treatment Plant that is further purified through primary, secondary and 
tertiary treatment. Recycled water in the West Basin is not used for 
drinking water purposes. Instead, it is used for non-potable 
commercial, industrial and municipal applications. When all of the 
component projects of the West Basin Water Recycling Program are 
eventually completed, the program will have the capacity to recycle up 
to 70,000 acre-feet of water per year. The two main components of the 
West Basin Water Recycling Program are the West Basin Water Recycling 
Project, now complete and developing 22,000 acre feet of water per 
year, and the Harbor/South Bay Water Recycling Project, which will add 
the capacity to develop another 48,000 acre feet of new water supplies.
    The West Basin is proud to report that all of the new water 
supplies developed through its water recycling program are put to 
beneficial use. More than 140 facilities in our service area are 
currently using recycled water for non-potable applications. The West 
Basin also tailors its recycled water to meet the unique needs of end 
users. Local oil refineries, which are a major user of our recycled 
water, have specific water quality requirements that require additional 
treatment processes. The West Basin also supplies recycled water for 
injection into seawater intrusion barriers along the coast. In order to 
meet the strict standards required for barrier water more than 12 
different treatment processes are utilized. While extra treatment means 
extra treatment costs, the end result is a dramatic reduction in the 
use of imported water and a more reliable supply of both drinking water 
and non-potable water.
    The Central Basin Municipal Water District was established in 1952 
to help mitigate the overpumping of underground water resources in 
southeast Los Angeles County. Local groundwater provided an 
inexpensive, but diminishing, source of water for the area. The Central 
Basin District was formed to supplement groundwater supplies with 
imported water, which is purchased from the Metropolitan Water District 
of Southern California. Today, in addition to groundwater and imported 
water, the Central Basin District provides recycled water for 
irrigation, commercial applications and industrial processes.
    The Central Basin Municipal Water District obtains recycled water 
from the San Jose Creek Water Reclamation Plant in Whittier and the Los 
Coyotes Water Reclamation Plant in Cerritos. The Central Basin Water 
Recycling Program is comprised of two distribution systems, as well as 
three pumping stations and a reservoir. The two systems are 
interconnected by a 50 mile distribution system that annually delivers 
about 4500 acre-feet of recycled water to more than 150 industrial, 
commercial, landscape and irrigation sites throughout southeast Los 
Angeles County. The Metropolitan State Hospital in Norwalk and U.S. 
Gypsum's paper mill in South Gate are among the Central Basin's largest 
recycled water partners.
    We all know that water is a finite resource. The water we are 
drinking today and using to water our lawns is the same water that 
dinosaurs drank thousands of years ago. Nature regularly uses, cleans 
and reuses water, and has done so for millions of years. Through water 
recycling programs, such as the West and Central Basin Districts', we 
are merely speeding up the natural process. However, for water 
recycling to play a role in the water supply problems facing 
California, the newly created water supply must be put to beneficial 
use in order to reduce the demand for imported supplies, which 
originate from the environmentally sensitive Bay/Delta or the federally 
controlled Colorado River.
    Water recycling by the Central Basin and West Basin Municipal Water 
Districts has strong and clear economic benefits for southern Los 
Angeles County. The reliability of recycled water helps to drought-
proof the region by ensuring a supply of water for non-potable purposes 
regardless of drought. This factor of reliability is both an attraction 
for new businesses to locate in our area and an incentive for existing 
businesses, and jobs, to stay.
    The water recycling programs of the Central and West Basin 
Districts also have clear environmental benefits. Recycling water 
directly reduces the volume of effluent discharged into receiving 
waters. This is particularly important in the West Basin, where 
effluent form the Hyperion Treatment Plant would normally be discharged 
into the Santa Monica Bay. Eventually, the West Basin Water Recycling 
Program could reduce by 110 million gallons per day the amount of 
effluent discharged into the Bay, which is a federally designated 
National Marine Estuary.
    In addition to the local economic and environmental benefits of 
water recycling, several established federal goals are also advanced. 
The federal government has already spent many millions of taxpayer 
dollars in the San Francisco/San Joaquin Bay/Delta. This Subcommittee 
is currently considering legislation that will authorize billions more 
to be spent on addressing the water supply and water quality issues 
that plague the Delta. Clearly, the issues in the Delta are of great 
federal concern, and the Central and West Basin programs directly 
contribute to advancing CALFED's goals.
    The federal government is also deeply interested in the State of 
California reducing its demand for water from the Colorado River. 
California annually exceeds its allocation of Colorado River water by 
approximately 800,000 acre-feet. As Arizona, Nevada and other States 
with which California shares Colorado River water continue to grow into 
their existing allocations, water recycling will continue to play a 
significant role in California's efforts to live within its own 
allocation. Also, a reduction in California's demand for Colorado River 
water will directly aid the efforts of the United States to meet its 
international treaty obligations with Mexico.
    The advancement of federal goals accomplished through aggressive 
water recycling and conservation efforts has been a strong rationale 
for federal involvement in the development of these types of projects. 
Many of these projects are capital-intensive, with large amounts of 
funding needed up-front in order to ensure completion and begin the 
delivery of new water supplies. Also, in today's market, in order to 
encourage end-users to switch to recycled water and commit to the 
development of infrastructure needed to facilitate the delivery of this 
water, it is often imperative to offer some financial incentive. A 
finite, short-term federal investment in the construction of well-
planned water recycling projects can allow water districts to offer 
recycled water at reduced prices and achieve the myriad of long-term 
benefits I have mentioned.
    The long-term local, regional and federal benefits of the water 
recycling and conservation efforts of the Central Basin and West Basin 
Municipal Water Districts are well-known to our congressional 
representatives. In the Central Basin, Congresswoman Napolitano, 
Congressman Horn, Congressman Royce, and Congresswoman Roybal-Allard 
have supported the Central Basin's requests for federal funds to 
develop projects. In the West Basin, Congresswoman Harman, Congressman 
Waxman and Congressman Sherman have all supported federal cost-sharing 
for water recycling and water conservation programs. Congresswoman 
Millender-McDonald represents portions of both Districts, and continues 
to be a leader in the Districts' efforts to seek federal assistance to 
develop such projects.
    Historically, the main obstacle to federal investments in water 
recycling projects has been the lack of budgeting priority placed on 
such programs, and the lack of a coherent federal policy addressing 
water infrastructure needs. The Bureau of Reclamation's Title XVI 
program, which provides a federal cost-share of 25% for the planning, 
design and construction of specifically authorized water recycling 
projects remains grossly underfunded. While the West Basin and Central 
Basin Municipal Water Districts have benefitted from this program, the 
vast majority of projects authorized to receive federal cost-sharing 
under this program are still waiting to participate.
    Other federal funding for the development of water recycling 
programs is available through the Army Corps of Engineers and the 
Environmental Protection Agency. However, water recycling funds through 
these agencies is limited and not readily available for new projects. 
Despite the regional and federal benefits I have mentioned, many in 
Congress refer to water recycling programs as so-called ``local 
projects'' that should remain solely the responsibility of local 
agencies.
    A competitive grant program such as the one proposed by Chairman 
Calvert in the ``Western Water Enhancement Security Act'' would play a 
critical role in the ability of local agencies to continue to develop 
projects creating new, alternative water supplies through recycling, 
desalination and groundwater recovery. The Central Basin Municipal 
Water District and West Basin Municipal Water District strongly believe 
that the creation of such a program is absolutely necessary as part of 
any real solution to the statewide water supply problem. In the absence 
of such a project grant program, the multi-billion dollar CALFED 
initiative will severely the limit the availability of funds for 
projects, especially in Southern California, that can quickly provide 
very quantifiable improvements in water supply.
    The Central Basin and West Basin Municipal Water Districts are 
already planning new projects that will further enhance the region's 
water supply. In addition to its ongoing efforts to market recycled 
water to new users, the West Basin District is embarking on the 
development of a comprehensive desalination program. One component of 
this program will include cutting edge facilities to desalinate 
recycled wastewater to extremely high purity levels for sensitive 
industrial applications. This desalination project will also allow the 
West Basin District to further reduce the volume of potable water 
currently used for seawater intrusion barriers, which is currently a 
mix of 50% potable water and 50% recycled water. Another component of 
the West Basin program will use state-of-the-art technology to 
demonstrate the economic feasibility of desalinating seawater to create 
new potable water supplies.
    The Central Basin District is also moving forward with plans to 
increase the use of recycled water within its service area. To 
accomplish this, the District will continue its efforts to market the 
benefits of recycled water to potential users. As new users commit to 
recycled water, the Central Basin District will need to construct 
additional links to its existing distribution system. As an example, 
the Montebello Loop project, currently under development, will connect 
users in the City of Montebello to the Central Basin's water recycling 
distribution system. The Central Basin is also developing a project 
that will connect the distinct water recycling systems of the Central 
Basin and West Basin Districts to create a truly regional water 
recycling treatment and distribution system throughout Los Angeles 
County.
    Projects like these, and the benefits they offer, may not be 
feasible without some measure of federal investment. I encourage the 
Subcommittee, and the Congress, to consider the value of these projects 
when allocating existing resources and authorizing new programs, like 
CALFED, that may further limit the availability of federal 
infrastructure investment funds in other areas. The Central Basin and 
West Basin Municipal Water Districts applaud Chairman Calvert's 
recognition of the importance of projects throughout the state that 
directly contribute to the goals of the CALFED program. On behalf of 
the Boards of Directors of the Central Basin and West Basin Districts, 
I thank you for this opportunity to address these issues before the 
Subcommittee.
                                 ______
                                 
    Mr. Calvert. Thank you. Mr. Miller, you bring up a good 
point and I think this is a question for the entire panel. The 
issue has been brought up by some and so I'll bring it up here 
today and give you an opportunity to address it.
    There is a record of decision with the Bay Delta, the 
original CALFED agreement. Our legislation goes beyond that 
obviously. We have a competitive grant program. We bring back 
reclamation loan program for the western states for ways in 
order to augment financial assistance to build projects, 
through the governance process obviously, if it's approved.
    I obviously, and those who are sponsoring this bill, 
believe that is important and I want to hear it from all of 
you. Can California meet its future demand on water strictly 
with the existing CALFED process as it is envisioned today with 
the record of decision without the additional leverage of this 
program that we have put in place encouraging local water 
agencies to build groundwater reclamation projects, conjunctive 
use, etc., etc., etc. Mr. Miller, you can start with that 
first.
    Mr. Miller. I'll answer very simply and clearly no. It's 
going to take a multi-source water supply program to manage the 
needs for our demands in the future without a doubt. CALFED 
alone by itself cannot take care of it.
    Mr. Calvert. I appreciate that.
    Mr. Atwater. I agree with that. We need additional funding 
in order to implement the program the locals need in order to 
make sure they got a reliable water supply.
    Mr. Calvert. And while you're answering that question maybe 
you can augment that. People need to realize that if California 
is to meet its agreement to limit itself to 4.4 million acre-
feet of water in the time line that was envisioned by the 
previous secretary, what does that mean if, in fact, we don't 
have a program to encourage all of California, not just 
Southern California?
    We'll be doing hearings, by the way, in Central Valley and 
the northern part of the state to build these projects. What 
does that mean because we lose--what does that mean to water 
supply in California losing that much water that we presently 
get out of the river?
    Mr. Pisano. If we lose--the only way California can 
continue to meet its needs with less water from the Colorado 
River is to implement programs that recycle and conserve and 
store wet-year water in groundwater basins for later use. We'll 
also recover basins that have been lost to contamination. We 
have to do all of those things plus facilitate water transfers 
from agriculture to urban uses in order to meet those goals.
    Mr. Calvert. I appreciate that.
    Mr. Atwater.
    Mr. Atwater. Yes, I would agree with both Tom and Darryl's 
points. The only thing I would add is when you look at the 
history of the CALFED Bay Delta program it is really focused on 
the Bay Delta and was less focused on Southern California.
    Not that it didn't address it but it didn't look at the 
needs and what we need to do in Southern California at the 
level that your bills address that need and also the need that 
I know all three members of this hearing today clearly 
understand and that is that within Southern California we have 
local community needs that weren't given that level of detailed 
attention in CALFED.
    Mr. Calvert. And, Mr. Pisano, before you answer that, I 
want to point out, as we know, Southern California used 70 
percent of the water or more in the state and we have an 
obligation to utilize that resource better than we have. That 
is the reason this legislation is drafted the way it is in 
order for us to do exactly that.
    Mr. Pisano.
    Mr. Pisano. Well, first of all, I want to agree with the 
first three panelists on the basic conclusion on CALFED. I know 
without additional resources we can't meet the commitments in 
the CALFED record of decision.
    Secondly, I want to emphasize and stress the comments that 
Mr. Atwater made, and that is we need to look at the cost 
effectiveness trade off of expenditure of dollars in Southern 
California for water quality, water quantity, but control 
benefits and what that could produce for the region and trade 
those resources on a cost effectiveness basis that we would 
spend against resources that the south would contribute toward 
the Bay Delta.
    And I'm not saying that the south shouldn't pay for the Bay 
Delta but let's have a level playing field and let's look at 
what the cost benefit ratios are of expenditures within our own 
region relative to the basins to the north.
    Then finally on the Colorado River, I just want to note 
that in dry weather periods given the long-term growth that 
we're forecasting, we have up to a 1.3 million acre-feet 
shortfall.
    Well, that is a shortfall that we need to address and we 
have multiple strategies of looking at that and that comes back 
to the previous point that I made. Resources to help us carry 
out some of our local regional strategies need to be put on the 
table with the same funding priority and the same degree of 
emphasis that resources to address the similar kind of multi-
use issue in the north. There hasn't been a level playing field 
as far as we're concerned in the south on that issue.
    Mr. Calvert. Thank you, gentlemen.
    Ms. Napolitano.
    Ms. Napolitano. Thank you, Mr. Chair. What I'm hearing from 
the first panel, as well as you, is that if we work together 
and are able to take into consideration the needs of the 
cities, the industry to conservation, recycling, storage, etc., 
etc., that we may be able to not only deal with the situation 
where we might run into a cycle of water shortage again, but 
secondly that if we work together, we may be able to come up 
with a solution.
    But has anybody done an assessment, qualitative or 
quantitative, to assess what if we do all of the above.You've 
stated them. Deal with the salinity issue, the storage, 
conservation, etc., etc.
    How will that put us in a better position to be able to 
deal not only with the growth of California but with the 
problems that we've had in delivery of quality water. What do 
we gain or what do we lose?
    Add to that the fact that EPA is requiring sanitation 
districts to do a fourth treatment of their recycled water 
which will cost billions of dollars to set up the treatment 
plant. At least, that's my impression.
    Chairman Dreier, Chairman of Rules, was going to send a 
letter to EPA asking them where that came from because nobody 
seemed to know. Again, that is another imposition not only for 
California but for the rest of the nation on how we deal with 
recycled water. Add that to the mix and where do we stand and 
how can we working collectively toward the same goal with the 
leadership assistance do we package that and be able to do 
that.
    Richard, you had in your statement--written testimony that 
we should have a hearing on the studies that are being 
conducted for salinity, and also encompass water recycling. 
Those are key for us but how do we put it all together.
    Mr. Pisano. Congresswoman, let me begin by stating at best 
there is not an integrated system-wide study within Southern 
California as to how to do it for our entire region. There is 
in certain watersheds and you have heard previous testimony on 
work that has been done in the Santa Ana.
    Let me just note some anecdotal information that we have 
acquired over the last 2 years. In LA City and LA County to 
handle the chloride problem in the north part of our county 
alone we are looking at $1.3 billion. That's to handle one 
pollutant of a TMDL program that EPA is administering and 
they--
    Ms. Napolitano. That's to handle what, sir?
    Mr. Pisano. The chloride. To solve the problem.
    Ms. Napolitano. All right.
    Mr. Pisano. And, in fact, to achieve the standard required 
just for one portion of our region, we are going to have to 
build probably a brine line in the northern part of the county 
going out to the ocean. That's probably the most cost-effective 
way to deal with it.
    This is piece by piece, function by function, type of 
problem solving and if we don't integrate our southern needs as 
we have in the Bay Delta to the credit of the Bay Delta, then 
the northern part of our state has brought together an 
integrated multi-use strategy for that resource. You have a 
commonality in the Bay that has focused that kind of work.
    I might suggest they have not done watershed analysis on 
some of the watersheds that drain into the Bay Delta in 
Northern California any more than we have in the south. That 
type of assessment is what we need. There are cost effective 
solutions with some interesting tradeoffs that need to be put 
on the table so we can bargain for funding and be part of the 
resource allocation process.
    That integrated and coordinated assessment throughout 
Southern California, as Mr. Atwater said, is really needed. 
Hearings might be a way to further stimulate to bring our 
information together.
    Mr. Atwater. Let me just say that clearly in Southern 
California we've done a lot of good planning but we haven't 
done it in as comprehensive and with the new water quality 
issues facing us I do think this Committee would serve our 
region well if we had hearings on the salinity management 
issue. It's both a Colorado River and Northern California 
issue. It's a local sanitation district issue like Mark just 
alluded to, this chloride issue. It's a Santa Ana River issue. 
It's a Salton Sea issue so we need to address that.
    I do think in both the Metropolitan Water District and its 
member agencies we are looking in the next year or two to 
update Southern California-wide our water plant. It needs to 
integrate and look at issues like storm water and needs to look 
at local watershed issues and needs to look at flight control 
and the other infrastructure.
    Certainly the drinking water quality issues that we've 
talked about need to be incorporated because that is affecting 
all the communities throughout Southern California, as 
Congresswoman Solis pointed out in San Gabriel Valley. Those 
are critical community impacts.
    Mr. Levy. I think that we do a poor job of planning all of 
the functions that need to be looked at and that are involved 
in all aspects of water. There are for the most part agencies 
which only have very limited control.
    My agency deals with the water from when it falls from the 
sky until when it runs into the Salton Sea. We are unique in 
that way but it is one that you have so many overlapping 
Federal and state mandates all of which are counter productive 
and we need to have some way of dealing with all of them in a 
unified manner.
    Mr. Miller. I agree with all that. We had a couple of other 
things like that that relate to the same question. Metropolitan 
has an integrated resources planning process that is an 
integrated approach and brings in many of the facets that you 
mentioned. However, it needs to bring in more. I think there 
can be a more concentrated IRP planning process that brings in 
the entire region of Southern California.
    Another observation would be that the value of reliable 
water today is probably too cheap. The value is worth more than 
what we are paying for today. If we are to do treatment, a 
fourth treatment, the citizens are going to have to pay more 
money. Not a whole lot more money but a little bit is going to 
bring a lot more funding resources to solve some of these 
problems.
    Ms. Napolitano. Well, the expansion of the recycled water 
program has always been a funding issue. I am pretty sure that 
we are going to have to deal with it. You're right, we don't 
pay enough. We don't value it enough so that we can really 
conserve. That is something that I think is incumbent upon all 
the water agencies to educate the users but recycle mostly is 
commercial immuny.
    Mr. Pisano. Congresswoman, I just want--
    Ms. Napolitano. Very quickly, Mark.
    Mr. Pisano. MWD does have a great innovative program but it 
needs to be complemented with the area-wide waste water 
treatment activities of our sanitation districts. We need to 
pull that together. These are federally directed programs. 
There is a better way to do it than what we are doing right now 
under the TMDL program.
    Ms. Napolitano. Thank you. May I ask, gentlemen, if you 
have any additional information, please submit it so that we 
can consider it.
    Mr. Calvert. We will keep the record open for any 
additional information, certainly, submitted for the record. I 
appreciate that.
    Ms. Solis.
    Ms. Solis. Yes. Just a follow-up question for Mr. Pisano. 
You opened with some statements regarding current regulations 
that are in place now by EPA but haven't been funded. Could you 
elaborate a little bit more about that?
    Mr. Pisano. The approach that Congress initially intended 
to control, storm water as well as other non-point source 
pollutions, was called an area-wide management approach to 
waste water. That program has not been active nor kept current. 
Rather, EPA has taken a permit, an NPDS permit with maximum 
daily loads associated or put on permits.
    I argue you cannot manage what the waste stream through 
that type of approach. That was not the intent of Congress. 
That is the way the act has evolved and been managed over the 
last 20 years.
    That is the program that I suggested to Congresswoman 
Napolitano that we change the approach so we integrate water 
quality and water supply and flood control. It is just as 
important in an arid era to do that as it is in a wet weather 
environment. We do not do that in Southern California.
    Ms. Solis. Might that be something that our Committee could 
inquire about and perhaps ask EPA to provide us some 
information on?
    Mr. Pisano. Certainly. We can work together.
    Ms. Solis. Right. I think one of the panelists talked about 
the north and south issue and the fact that it is a constant 
tug of war with resources and funding and it appears to me that 
the north has been better at organizing themselves and that we 
ought to do a lot more here to provide assistance in anyway we 
can to better coordinate and become the same potential force 
that we see our friends in the north have because, indeed, our 
consumers are paid top dollar for the transportability of that 
water and they are expecting to have clean water as well.
    I think it is incumbent upon us to see that we try to 
support that in any way we can. I know I'll be very open to 
work with all of you on that. Thank you.
    Mr. Calvert. I have a couple of quick questions just to tie 
this down. One is a comment on salinity. We plan to have a 
field hearing in Nevada in Las Vegas in July to talk about the 
Colorado River and water quality in the west and certainly 
salinity which is a big issue in Nevada. Probably later in the 
year we'll probably be in Phoenix for similar circumstances.
    The issue of global warming came up. I used to be Chairman 
of the Energy and Environment Subcommittee and have done 
probably 20 hearings on the issue of global warming. Without 
getting into the debate of whether it's human incrementalism 
that is creating global warming or a natural condition, or 
whether it exists, apparently, you know, there is a lot of 
science to state that global warming, in fact, is changing the 
climate and a climate change is taking place. There is a study 
that was written recently by some very well-known scientists 
who I have worked with on the El Nino situation several years 
ago and they were proven to be correct and we prepared for that 
eventuality.
    In that study it states that the snowpack in the Sierra 
Nevada will shrink because more rain and less snowfall. The 
snowpack has been, in effect, a regulator and, in effect, a 
storage mechanism in order to release water to our reservoir 
capability in the state.
    If, in fact, you believe that global warming is taking 
place, if you believe that climate change is taking place, this 
is going to have a tremendous impact on planning for 
California's water future. One, you'll have significant 
increase in flood flow according to this study. And you will 
have less supply based upon the existing storage capability in 
the State of California.
    Without this type of legislation in order to help increase 
the supply, and to help modulate if, in fact, this does occur, 
what is going to happen if, in fact, these predictions are 
true? I imagine Sacramento must be worried about that more than 
anybody. They have 75-year flood protection. If, in fact, the 
stories are true, they will have something to be concerned 
about. Any comment about the study? Has anybody been able to 
read it? Great nighttime reading.
    Mr. Pisano. Congressman, I have seen the study. Let me also 
comment as a board member of the Resources for the Future, an 
organization in Washington that is looking at natural resources 
in the physical science area, our scientists, in fact, have 
looked at that study and others.
    There is indication that we need to change some of our 
hydrologic regime assessments of what the flows will be long 
term in our rivers, as well as it potentially could affect 
snowpack much in the same way that the hydrologic regime could 
be affected. And it becomes an important element in long-range 
planning.
    The reason I was attracted to the study and into the work 
of RFF is when you look out 10, 15, and 20 years, those co-
efficients become extremely important, not minor. Also, your 
population forecasts become extremely important and we 
generally do not give that much attention to those policy 
parameters.
    I urge the Committee to not only look at the short-term 
funding which we support it and we'll work with you, 
Congressman, but we also need to look what are these long-term 
baseline assumptions that are affecting our longer-term 
planning so we have the right strategies in place.
    There is enough uncertainty on global warming that I don't 
think we can conclusively say that it will change but we need 
to have some what-if scenarios in our long-range planning 
should we see it's moving in that direction. Again, I'm urging 
Congress not to give short sight as well as our own region 
short sight to this longer-range consideration.
    Mr. Calvert. Any other comments on that?
    Mr. Miller. Very quickly, your prognostication if the 
snowpack decreases what happens is it's pretty obvious that the 
Delta, as well as the Colorado River quantities are going to 
decrease as far as flow of water, which brings us back to the 
local water planning.
    There are really only about five major sources of water for 
us if you exclude the Colorado River and the Delta. That is an 
ocean desalination, recycling, conservation, water transfers of 
different types and storage. It puts more of an emphasis on 
exactly what we are talking about today, looking at that multi-
faceted water resource approach locally.
    Mr. Calvert. Mr. Levy.
    Mr. Levy. I believe that when we look at solutions in 
CALFED we need to consider the impacts of global warming 
because we have a different--we'll have a different regime 
assuming the predictions on what happens with global warming. 
We'll have more rain, less snow. That means you need the 
ability to store water. I think if you look at the Colorado 
River, you have 60 million acre-feet of storage.
    You look at the State Water Project and you have five or 
six million acre-feet. You cannot operate that system with 
limited storage under a global warming scenario.
    You are going to have a hard time meeting the standards in 
the Delta if the ocean level raises because you won't have 
water in the reservoirs to be able to maintain the salinity 
interface. You have a higher water level so salinity is going 
to come back further and you have less water when you need it 
to push it out. We are going to see dramatic changes there.
    Mr. Calvert. It certainly is an interesting dynamic to add 
to this debate and we need to follow the science as this 
process moves along. Any other comments before we excuse the 
panel?
    Ms. Solis. Mr. Chairman, do we agree with the panel that we 
do have a problem with global warming?
    Mr. Calvert. Well, I've been studying that issue for many 
years and I think whether or not you believe that there is 
climate change or global warming based upon human activity or 
whether it's a naturally occurring phenomenon on earth, 
nevertheless, we should follow the science. If you believe, in 
fact, it is happening, then it certainly adds a dynamic to this 
debate. It certainly adds more importance to the passage of 
this legislation.
    So, with that, I'm going to also recognize some 
representatives from Yvonne Brathwaite Burke's office here, 
supervisor, Second District of the County of Los Angeles. 
Ta'Shara Murray and Miriam Long Simmons are here and they 
brought a statement to be submitted to the record. Without any 
objection, we will submit that statement for the record. Are we 
going to have them read part of it in the record? Okay.
    To this panel I want to thank you very much for coming out 
this afternoon and giving your testimony and answering 
questions. Thank you very much.

STATEMENT OF TA'SHARA MURRAY, DEPUTY, WITH MIRIAM LONG SIMMONS, 
 SENIOR DEPUTY, ON BEHALF OF REPRESENTATIVE YVONNE BRATHWAITE 
BURKE, COUNTY SUPERVISOR OF THE SECOND DISTRICT, COUNTY OF LOS 
                            ANGELES

    Ms. Murray. Good afternoon.
    Mr. Calvert. Good afternoon. You may begin.
    Ms. Murray. Good day, Mr. Chairman. My name is Ta'Shara 
Murray and I'm here today along with my colleague, Miriam 
Simmons, on behalf of Yvonne Brathwaite Burke.
    Ms. Napolitano. Pull the mike up closer to you, Hon, 
please.
    Ms. Murray. We are here today on behalf of Supervisor 
Yvonne Brathwaite Burke, County Supervisor of the Second 
District, County of Los Angeles. We appreciate you coming to 
Southern California today to listen to our concern for a safe 
and reliable water supply for our state and region. We know 
that you share those concerns and we commend you for your 
ongoing efforts to achieve those goals.
    Reliable water supply is of high importance in the Second 
District because business and industry don't have reliable 
water and many of our constituents don't have jobs.
    Representative Calvert, we commend you for introducing the 
Western Water Enhancement Security Act, H.R. 1985, to authorize 
a comprehensive program to enhance California's environment, 
the water supply and water quality, promote water use 
efficiency and water transfers, and create a government to 
implement CALFED and a competitive grants program.
    We thank you for allowing us to be here today. Thank you.
    [The prepared statement of Yvonne Brathwaite Burke 
follows:]

 Statement of Yvonne Brathwaite Burke, Supervisor, Los Angeles County, 
                               California

    Good day, Mr. Chairman. I am Yvonne Brathwaite Burke, supervisor of 
the second district of the County of Los Angeles
    I appreciate your coming to Southern California today to listen to 
our concern for a safe and reliable water supply for our state and 
region. I know you share those concerns, and I commend you for your 
ongoing efforts to achieve those goals.
    My primary message today is to urge continued federal support of 
the CalFed process that is key to California's water supply 
dependability and tapwater quality.
    The district that I have represented on the Los Angeles County 
Board of Supervisors since 1992 has a population of approximately 1.9 
million people, and has a high concentration of industry and 
minorities.
    A reliable water supply is of high importance in my district, 
because if business and industry don't have reliable water, some of my 
constituents don't have jobs.
    And lower-income families also are less able than others to buy 
bottled water or expensive home treatment systems, which many people 
perceive are superior to tapwater for water safety and aesthetics.
    Indeed, as wealthier households are more likely to have bottled 
water delivered to their homes and to install home-treatment equipment, 
water agencies are increasingly providing water to those who are least 
able to afford alternatives: children, elderly, people with compromised 
immune systems, and low income.
    So, more than ever, it is incumbent on government to ensure 
reliable water and high-quality water for the public welfare. The 
CalFed process is critical to that endeavor.
    Representative Calvert , I commend you for introducing the Western 
Water Enhancement Security Act, H.R. 1985, to authorize a comprehensive 
program to enhance California's environment, the water supply and water 
quality; promote water-use efficiency and water transfers; and create a 
governance board to implement CalFed and a competitive grants program.
    I also am aware that California Senator Dianne Feinstein has 
introduced Senate Bill 976 with similar goals, and I recall that both 
you and Senator Feinstein held a joint press conference at which you 
expressed your openness to bipartisan dialogue and consensus solutions 
as your respective bills proceed. I salute you for your bipartisanship, 
which certainly is the key to legislative success.
    As these bills proceed, may I suggest several principles that 
should be included in the final legislation:
    A governance mechanism that will assure a stable and balanced 
implementation of the entire CalFed program, and which represents urban 
Southern California's interests;
    Funding for water quality projects-including those called 
``complementary actions'' in the Record of Decision;
    Funds for state and local supply reliability projects, including 
additional surface and groundwater storage and improvements in through-
Delta conveyance;
    Funds for environmental restoration, specifically the Environmental 
Water Account and Environmental Restoration Program defined in the 
Record of Decision;
    And provisions that require environmental restoration be 
accomplished in a way that assures reliable supplies for recipients of 
water from the state and federal projects.
    Recently, the Bush Administration received deserved accolades for 
launching a massive federal effort to protect and restore Florida's 
Everglades.
    Mr. Chairman, may I submit that California's Bay-Delta, an area of 
more than 1,00 square miles, is the Everglades of the West--both a 
natural environmental treasure and a water source for two-thirds of the 
state's population.
    We urge Congress to join you and Senator Feinstein in launching a 
Bay-Delta restoration.

                                 ______
                                 
    Mr. Calvert. Thank you. Thank you very much for coming out 
this afternoon. We thank your supervisor. Thank you very much.
    We are going to combine our last two panels into one so we 
will take a very short break and then we'll come back together 
here in about five or 10 minutes. If that panel can organize up 
here at the front, we'll be back in just a couple of minutes.
    [Whereupon, at 11:59 a.m. off the record until 12:10 a.m.]
    Mr. Calvert. Please take your seats and we'll resume the 
Committee here very quickly.
    Our next panel and last panel we kind of combined as we 
have a few folks on the panel. We have Mr. John Stovall, 
General Counsel, Kern County Water Agency; Mr. Art Gallucci, 
City Manager, City of Cerritos, Mr. Conner Everts, Executive 
Director, Southern California Watershed Alliance; Mr. 
Christopher Davis, City of Norwalk, and Mr. Ron Linsky, 
Executive Director, National Water Research Institute, and, of 
course, Mr. Larry Libeu, Director of Legislative Affairs, 
Eastern Municipal Water District.
    With that, why don't we kind of go left to right. We'll 
start with you, Ron Linsky. Thanks for coming out this morning. 
I'll try to follow your PowerPoint here.

  STATEMENT OF RON LINSKY, EXECUTIVE DIRECTOR, NATIONAL WATER 
                       RESEARCH INSTITUTE

    Mr. Linsky. Thank you very much, Mr. Chairman. Good 
morning. My name is Ronald Linsky. I'm the Executive Director 
of the National Water Research Institute located in Fountain 
Valley, California.
    I thought that a change of pace would be appropriate. You 
have been looking this way for so long. If we turn the heads 
the other way, you can go in the other direction for awhile and 
look east as you are very familiar with that part of the 
geography.
    The title of this hearing I find very unique because it 
aptly defines the problems that Southern California is facing 
which are basically to ensure a supply that is simultaneously 
available and sustainable for development, economic growth, and 
the environment.
    The challenge that I view from the National Water Research 
Institute's perspective is the ability to take advantage of 
existing technologies, to address these critical issues. 
Remember however, that we live in an arid urban environment. 
The picture on the wall up there is a very, very, very telling 
image from NASA satellites. It is very difficult to see a 
natural environment there in Southern California.
    In fact, what you are really seeing is a reflection of 
enormous amounts of an artificial environment referred to as 
the urban watershed. This is an area that we have engaged a 
significant amount of our effort in to try to come up with what 
is the definition or characterization of an urban environment. 
It's my opinion that the most important issue facing Southern 
California is the prudent management of the actual and 
potential supplies that we have right in front of us.
    You are familiar with Washington, D.C., and Baltimore. If 
you look at the new image coming out this week from NASA, you 
will notice that the red area and the blue areas are the amount 
of paved surfaces in your second home back east that is growing 
at about 10 to 12 percent per year.
    Ms. Solis, you referred to the natural watersheds. We live 
in an environment here that there is no such thing as a natural 
watershed. We live in an artificial watershed that we have very 
little knowledge from a research perspective of how it 
operates. We don't understand the dynamics.
    In California the Department of Finances, you heard earlier 
today from various speakers, is expecting about 600,000 people 
a year, new people in this state, for the next 20 years. That 
means that there is a real conflict here because we are faced 
with a problem of trying to find new water.
    The mission statement of the National Water Research 
Institute is to create new sources of water through research 
and technology and to protect the marine and aquatic 
environments.
    From a water perspective, those 600,000 people a year 
refers to a demand that we have to anticipate which is about 
184 acre-feet a day which is equivalent to 67,000 acre-feet per 
year of new water. Not water in the snowpack. Not water in the 
ground water. Not water in the surface water but new water. How 
do we create that?
    Within Southern California it is interesting to note that 
on a daily basis a billion gallons a day are pushed out into 
the Pacific Ocean from treatment plants. That billion gallons a 
day is the equivalent of 6,000 acre-feet a day or, at the end 
of a year, over a million acre-feet a year of good quality, 
very high quality water is moving out into the ocean.
    That is interesting, too, because the value of that water 
is wrapped up in the service it provides to the human 
population in Southern California. That service is it serves as 
a carrier. It carries waste material that we really don't want.
    The water itself is extraordinarily good water. It is plain 
and simple, H2O. It hasn't changed from its 
beginning. We have to start looking at where are we going to 
find new sources of water. That is the margin between the water 
supply that we have and the demand of the population.
    We have projected that in Southern California between 
reuse, desalination, efficiencies, and conservation we have an 
opportunity to find water that will supply that marginal need 
that we are looking at.
    One of the rather interesting projects in Southern 
California that is attempting to do this is the Orange County 
groundwater replenishment system which will be a high tech 
advanced water treatment system that will take from the Orange 
County Sanitation District eventually about 100,000 gallons--
excuse me, 100 million gallons a day.
    It will reduce the ocean discharge. It's a high tech system 
with micro-filtration, RO, reverse osmosis, and ultraviolet 
disinfection. The project water will be used for seawater 
barrier and for groundwater recharge.
    What it will provide the two million residents of Orange 
County is a decreased dependence on imported waters, it will 
produce over 100,000 acre-feet of new water a year, and it will 
have an approximate energy savings of 125 million kilowatt 
hours a year by recycling that water.
    If you take and compare the Colorado River Aqueduct system, 
the delivery requirements of that water from the Colorado River 
is about 2,000 kilowatt hours per acre-feet. The State Water 
Project is about 3,260 kilowatt hours per acre-feet. The GWR 
system will have a total of only 1,700 kilowatt hours per acre-
foot that it delivers. The differential there is quite 
significant.
    When we look at the challenge of this hearing, and that, of 
course, is to look at the water security of Southern 
California, we have to rely upon imagination, we have to rely 
upon creativity, and we have to think out of the box, so to 
speak, when it comes to dealing with the challenges that we are 
faced with.
    With that, since I just saw the red light just now, we'll 
go on to the next speaker, Mr. Chairman.
    Mr. Calvert. Thank you, gentlemen. If somebody could flip 
the lights up a little bit. I know we are trying to save 
electricity here today but we've got to see. I think Larry 
needs -- you've got your glasses on. Larry Libeu, you are 
recognized.
    [The prepared statement of Mr. Linsky follows:]

   Statement of Ronald B. Linsky, Executive Director, National Water 
                           Research Institute

    Good morning, Mr. Chairman.
    My name is Ronald B. Linsky and I am the Executive Director of the 
National Water Research Institute (NWRI), located in Fountain Valley, 
California. I have attached a brief resume of my nearly 30 year 
professional career which includes research directorships at the 
University of Southern California and the University of Hawaii, and 
service as the Chief Technical Advisor to the United National 
Development Programme stationed on the Caribbean island nation of 
Trinidad Tobago.
    The title of this Field Hearing, Southern California Water Supply 
Opportunities and Challenges, aptly defines the future in what is, in 
fact, a desert environment: challenges and opportunities. The challenge 
to all Southern California water utilities is to ensure a supply that 
will sustain development, economic growth, and the environment. The 
opportunities are to make use of existing technologies, anticipate 
through research new or emerging technologies and to apply technologies 
to the needs of the urban watershed, which is in fact nearly all of 
Southern California.
    When viewing a satellite image of Southern California, you are 
immediately impressed with the extraordinary expanse of reflected light 
from the concrete surfaces arising from the mountains to the sea. In 
this vast urban watershed, the seemingly endless houses, concrete curbs 
and gutters, storm drains, streets, and freeways have become the 
metaphors for the rivers, streams, valleys, and hills of yesterday.
    In my opinion, the most important issue facing Southern California 
is the need to provide a sustainable, high-quality supply of water to 
the expanding population for all purposes. The California State 
Department of Finance has projected that the population of California 
will increase at a conservative annual rate of over 600,000 persons a 
year for the next 20 years. From a water supply perspective (and if we 
take a conservative approach) this means that over 60 million gallons a 
day of new water must be created to satisfy all the needs associated 
with maintaining the population, (e.g., manufacturing, food production 
and processing, environmental, life support, and recreational). 
Southern California can expect to receive about 65 percent of that 
population increase and, therefore, will need to find water to meet the 
demand for approximately 36 million gallons of new water per day.
    Water resource managers literally know where all the waters are in 
California. With considerable precision, they know the amount of snow 
pack available and, therefore, its potential contribution to the 
overall water supply equation. They also know with reasonable accuracy 
the amount of water banked in groundwater aquifers throughout the 
state, as well as what level of dependability they can expect from 
imported supplies. Yet, with all this knowledge, doubts continue to 
grow that current supplies are inadequate and future supplies will be 
more limited and unreliable. The major question is, therefore, not 
whether the managers can satisfy the increasing demands forecasted for 
the next two decades, but where will new supplies come from and will 
they sustain the current and projected populations and, at the same 
time, provide for growth and economic development.
    Within the Southern California coastal counties, more than a 
billion gallons of water are released to ocean environment on a daily 
basis. Only 2 percent of that volume was used to support the drinking 
water habits of the population. The remaining 98 percent was used to 
support everything else associated with the maintenance of the 
population. However, all that water was treated to drinking water 
quality standards, which required considerable investments of capital 
resources.
    Using water more than once is a critical strategy to assist 
overcome the water needs of southern California as well as the rest of 
the nation, especially the arid southwest and Florida. It is a strategy 
that should be given a higher priority and taken seriously by the 
federal government because, in reality, there is no new water on our 
horizon. I have stated many times that the only new water will have to 
come from existing water supplies.
    A prime example of addressing this major issue is the Groundwater 
Replenishment (GWR) System. The project will take highly treated 
wastewater from the Orange County Sanitation District, where currently 
it is discharged into the ocean, and purify it through an advanced 
water treatment system that includes microfiltration, reverse osmosis, 
and ultraviolet disinfection. A portion of the product water will be 
injected along the coast to create a hydraulic barrier to prevent 
seawater intrusion into a large groundwater basin that provides water 
for over 2 million residents of Orange County, California. The 
remaining purified water will be pumped to percolation ponds and 
naturally introduced into the groundwater basin. The purified water is 
nearly distilled in quality and will eventually blend into existing 
groundwater supplies to be extracted over time for everyday domestic 
and commercial/industrial use.
    The GWR project has many values and benefits. One of the most 
important to Southern California, especially at this particular time, 
deals with the energy savings potential of the project relative to 
imported water supplies.
    In terms of energy savings, it takes approximately 2,000-kilowatt 
hours of electricity to move one acre foot (326,000 gallons) of water 
from the Colorado River to Orange County. It takes even more energy--
3,260kilowatt hours of electricity--to bring one acre-foot of water 
from Northern California. It will take only 1,700kilowatt hours of 
electricity to produce an acre-foot of water from the GRW project. 
Every gallon of water produced from the GWR system will be one less 
gallons of water that must be transported from the Bay Delta or 
Colorado River. This alone is an extraordinary benefit, which has 
extraordinary value to the region.
    The first phase of the project will produce 78,000 acre feet of new 
water and the energy savings from that will be approximately 140 
million kilowatt hours each year, which is the enough energy to serve 
over 21,000 homes a year. At the completion of the project in 2005, the 
energy savings could increase to over 215 million kilowatt hours each 
year. The project has enormous value to California and adjacent states 
that provide power and water to this region.
    By taking advantage of current technologies, this project will 
provide a reliable supply of high-quality water for over 2 million 
people to enhance their water security, avoid excessive energy 
requirements, and ensure that future environmental needs can be met.
    The federal government needs to encourage projects like the GWR 
system. The development of not only a research and development program, 
but a partnership program that would provide incentives to incorporate 
water reclamation, reuse, desalting and desalination as a component of 
integrated resource management strategies must be a long-term priority 
goal of the House Committee on Resources and its Subcommittee on Water 
and Power.
                                 ______
                                 

  STATEMENT OF LARRY LIBEU, DIRECTOR OF LEGISLATIVE AFFAIRS, 
                EASTERN MUNICIPAL WATER DISTRICT

    Mr. Libeu. Thank you, Mr. Chairman and members of the 
Subcommittee for holding this timely oversight hearing with 
regard to Southern California water security.
    My name is Larry Libeu and I am the Director of Legislative 
Affairs for the Eastern Municipal Water District, EMWD. I want 
to say from the onset that we support your efforts to achieve 
this hardy goal through your legislation.EMWD is located in 
southwestern Riverside County. Our Service area is about 555 
square miles and we have a population of 440,000 people and we 
are growing.
    Over the past 50 years our service area has transformed 
from an agricultural base to predominately urban. Like a 
majority of Southern California water suppliers, we have to 
rely on imported water supply. Today we import approximately 76 
percent of our domestic water supply demands and we are 
experiencing growth at a rate faster than other portions of our 
region.
    The challenge that we face today is an ever increasing 
demand for water and a supply that is being governed by state 
and Federal authorities. It is further being diminished by 
regulatory, environmental, and hydrological conditions. The 
reliability of imported water supplies to Southern California, 
Mr. Chairman, is less than ideal.
    Aside from these challenges water agencies in California 
are now faced with a new political challenge. State legislation 
requires water supply agencies to provide certification of the 
capability to supply water demands of new development. Water 
serves as the foundation for economic development. California's 
economy cannot grow without water.
    EMWD has responded to these challenges through a series of 
innovative programs to improve quantity, quality, and 
reliability of our customer's water supply. In conjunction with 
partners within our service area, we are developing and 
implementing regional groundwater management plans to optimize 
the use of local water resources. EMWD is constructing its 
first desalter and is planning two additional facilities to 
treat otherwise unusable brackish groundwater.
    We are working with local, regional, and state agencies to 
utilize groundwater basins to store imported water. The 
conjunctive of available ground water storage will reduce 
EMWD's peak demand on imported water supplies and improve 
reliability during periods of drought.
    We have fully implemented all the best management practices 
as recommended by the State of California for water 
conservation. We have through the Bureau of Reclamations Small 
Reclamation Projects Act made major investments in the water 
recycling program. Today during peak demands, EMWD markets 100 
percent of its recycled water.
    There are several areas where the water agencies of 
Southern California will require assistance in achieving long-
term water security. The capital investment required to 
optimize local resources and implement regional conjunctive use 
programs will be a major financial burden. Most importantly, 
the long-term water supply planning for all of Southern 
California is contingent upon the completion of the CALFED 
process.
    That process will determine the approaches, the programs, 
and the projects we need for cost-effective water supply 
security in Southern California. Long-term water supply 
planning cannot be completed until the CALFED process is 
complete.
    Mr. Chairman, I've indicated the challenges facing EMWD. 
The CALFED process is critical to California's water quality, 
supply, reliability solutions, and its economic future. The 
structure and detail of how we want to govern such manners is a 
key component to our future ability in Southern California to 
meet our customer's needs.
    Water quality projects must be a part of the program. 
Environmental regulation must be addressed. Funding mechanisms 
must be in place to implement the programs which meet the goals 
and objectives of the CALFED framework and the record of 
decision.
    A competitive grant program to plan, design, and construct 
water resource projects is a strong motivator to achieve such 
results. Our path to assisting this challenge is to revitalize 
the Small Reclamations Project Act, Title II of your 
legislation. This program will provide agencies in Southern 
California as well as the rest of the west an opportunity to 
implement essential projects. Water resources management is not 
just a California crisis. It impacts all the west. It is time 
to look the 21st Century in the eye and invest in the west.
    In conclusion, Mr. Chairman, there are many crises facing 
the west. Abundant water supply has been a critical issue for 
Southern California. As each year passes, the need increases. 
Your legislation, H.R. 1985, recognizes the need for the 
establishment of a CALFED program, creates an effective 
government mechanism, addresses the critical issues of water 
quality, and acknowledges the need for environmental 
considerations, and provides the essential funding.
    EMWD's board applauds your efforts and will do everything 
within its powers and authority to assist in a successful 
enactment of this critical legislation. Thank you, Mr. 
Chairman.
    Mr. Calvert. Thank you, gentlemen.
    [The prepared statement of Mr. Libeu follows:]

  Statement of Lawrence M. Libeu, on behalf of the Eastern Municipal 
                   Water District, Perris, California

    Mr. Chairman and Members of the Subcommittee:
    I want to thank you, Chairman Calvert, for conducting this timely 
oversight hearing with regard to Southern California water security. My 
comments today are on behalf of the Eastern Municipal Water District 
(EMWD). Southern California water agencies face a challenge: search for 
new water supplies or better manage what we have. EMWD recognizes the 
need to provide the necessary resources to manage, develop and sustain 
the reliability of California's ever dwindling water supplies, at the 
same time minimize the social and economic impacts to our customers. 
Let me say from the onset EMWD supports your efforts to achieve these 
goals through your legislation.
    EMWD is located in southwestern Riverside County. Our Service area 
is approximately 555 square miles with a population of 440,000, which 
is forecast to double by the year 2020. The district is located in a 
semi-arid region of Southern California and encompasses the 43rd, 44th 
and 48th congressional districts. Over the past fifty (50) years EMWD's 
service area has transformed from an agricultural base to predominantly 
urban areas. As with a majority of Southern California regional and 
sub-regional suppliers, we must rely on an imported water supply. 
Today, we import approximately 76% (70,000 AF) to meet our domestic 
water supply demands. We are experiencing growth, at a pace much faster 
than other portions of the region. As the urban core moves toward lands 
in our service area which are available for development, EMWD is faced 
with the challenge of developing and providing water supply reliability 
to its customers, in a practical and economical manner.
CHALLENGES
    The challenge that we face is, an ever increasing demand for water 
and a supply, governed by State and Federal authorities, that is 
further being diminished by regulatory, environmental, hydrological 
conditions and its own unique challenge with regard to quality. The 
ability, and reliability, of the State Water Project to deliver water 
allocations being requested by their contractors is being reduced for 
the previously mentioned reasons. The Colorado River, governed by the 
Law of the River--the main artery of Southern California water supply, 
can no longer be over appropriated because of the implementation of the 
California 4.4 Plan. Water quality from both the State Water Project 
and the Colorado River is suffering due to environmental tradeoffs. 
Every year, Colorado river water quality is becoming more saline. State 
Project water quality is affected by the environmental flow 
augmentations. Reliability of both of these major imported water 
supplies to deliver water to Southern California is less than ideal. 
Aside from the challenges I've already outlined water agencies in 
California are now faced with a new political challenge. Recently 
introduced State legislation, if enacted, will require water supply 
agencies to provide certification of the capability to supply the water 
demands of new development. Increasingly, Southern California water 
agencies are being placed at odds with land use authorities and 
development interests. Water serves as the foundation for economic 
development. California's economy cannot grow without water.
ACTIONS AND MEASURES
    The Board and management of EMWD have been visionary since its 
establishment, with regard to projects and programs in our service 
area. That continued vision and your leadership on these issues, will 
help set the future for Southern California water supply security. In 
response to these emerging challenges, the District has undertaken a 
series of innovative programs intended to improve the quantity, quality 
and reliability of our customers' water supply.
    In conjunction with the municipalities, local water agencies and 
private groundwater producers within our service area, the District is 
developing and implementing regional groundwater management plans to 
optimize the use of local water resources. This program will result in 
the collection of comprehensive data on groundwater conditions, the 
stabilization of groundwater levels, and improved salinity management. 
As a result of these programs, EMWD is constructing its first 
groundwater desalter and is planning two (2) additional facilities to 
treat otherwise unusable brackish groundwater.
    EMWD is working with local agencies, the Metropolitan Water 
District of Southern California (MWD), the Santa Ana Watershed Project 
Authority (SAWPA) and the State Department of Water Resources (DWR) to 
utilize local groundwater basins to store imported water. This 
conjunctive use of available groundwater storage will reduce EMWD's 
peak demands on imported water supplies and improve supply reliability 
during periods of drought.
    EMWD has fully implemented all ``best management practices'' 
recommended by the State of California for water conservation. EMWD is 
committed to further conservation efforts and has established an award-
winning conservation outreach and public education program that is 
designed to pursue innovation and to challenge a new generation of 
thinking and approaches.
    EMWD, through utilization of the Bureau of Reclamation's Small 
Reclamation Projects Act, has made major investments in its water 
recycling program. During peak demands, EMWD markets 100% of the 
recycled water produced by its five (5) regional water reclamation 
plants. Uses include agricultural and landscape irrigation, 
environmental enhancement, and emerging industrial use.
    In addition to expanded conservation and resource development, 
EMWD's concerns over future water supply have led to increased emphasis 
on inter-agency planning and partnerships. EMWD is working more closely 
with MWD and SAWPA to ensure reliable regional imported water supply. 
Additionally, EMWD, through interaction and partnering, is developing 
water resource strategies with the cities and subagencies within our 
service area.
    There are several areas where the water agencies of Southern 
California will require assistance in achieving long-term water 
security. The capital investment required to optimize local resources 
and implement regional conjunctive use programs will be a major 
financial burden for local agencies. In particular, the costs of 
developing new water through desalinization, could inhibit indirect 
potable reuse and utilization of brackish groundwater.
    Water quality will remain a major issue for local agencies. 
Regulatory issues may result in changes in the salinity of imported 
water delivered to Southern California. Salinity management will 
require extensive interregional and interstate cooperation that may 
require legislative assistance.
    Most importantly, the long-term water supply planning of all 
Southern California water agencies is contingent upon the completion of 
the Cal-Fed process. That process will determine the approaches, 
programs and projects we need to have economic and water security in 
Southern California. True long-term water supply planning cannot be 
completed until Cal-Fed is complete. Southern California agencies will 
need the support of local, State and Federal legislators to ensure that 
the Cal-Fed process is completed in a reasonable amount of time.
ADDITIONAL MEASURES
    Mr. Chairman, I've indicated the challenges facing EMWD as well as 
the actions we are taking to address these issues. The Cal-Fed process 
is critical to California's water quality, supply, reliability 
solutions and ultimately its economic future. The structure and details 
associated with how we want such matters governed is a key component to 
our future ability in Southern California to meet our customers' water 
needs. Water quality projects must be a part of the program. 
Environmental regulation must be addressed but not at the sacrifice of 
water quality. Funding mechanisms must be in place to allow local 
agencies to implement the programs which meet the goals and objectives 
of the Cal-FED framework and Record of Decision. Funding is a key 
issue. A competitive grant program to plan, design and construct water 
resource projects is a strong motivator to achieve such results.
    Our path to assisting in this challenge is to revitalize the Small 
Reclamation Projects Act. EMWD has successfully used this program three 
(3) times in its history. Many of the projects and actions taken by 
EMWD to ensure water supply reliability and water resource management 
have been funded by this program. This program will provide agencies in 
Southern California, as well as the rest of the West, an opportunity to 
implement projects, which, in the bigger picture, will allow agencies 
to construct water resources management projects on a local level while 
at the same time potentially ease the burden on California's main 
import supply, and the Colorado River. The program works and all 
agencies, big or small, can access the various titles of the Act to 
build projects. Water resources management is not just a California 
crisis, it impacts all of the West. It's time to look the 21st century 
in the eye and ``invest in the West.'' A 19.7% growth rate in the last 
decade is part of the reason we're here today.

CONCLUSION
    In conclusion Mr. Chairman, there are many crises facing the West, 
energy is getting all the headlines today, but as the old adage says 
``this too shall pass.'' Abundant water supply, as noted from early 
history has been a critical issue for Southern California. As each year 
passes the need increases. Water agencies are being subjected to 
providing assurances to their constituents that: 1) there will be water 
when they turn on the tap 2) the water will of the highest quality 3) 
there will always bean ample supply and, 4) it won't be a challenge to 
their pocketbook. Your legislation, H.R. 1985, sets in motion the 
necessary components to help make those assurances. It recognizes the 
need for the establishment of a Cal-Fed program that embodies the 
principles of the Record of Decision, creates an effective Governance 
mechanism, addresses the critical issues of water quality, while at the 
same time, acknowledges the need for environmental considerations, 
timely decisions and permitting. EMWD applauds your effort and will do 
everything within it's power and authorities to assist in the 
successful enactment of this critical legislation.
                                 ______
                                 

 STATEMENT OF JOHN STOVALL, GENERAL COUNSEL, KERN COUNTY WATER 
                             AGENCY

    Mr. Stovall. Thank you, Mr. Chairman. I would like to thank 
you and the other members of the Committee for being here to 
take this testimony. As indicated previously, my name is John 
Stovall.
    I'm the Chairman--General Counsel, would like to be 
Chairman, of the Kern County Water Agency. I was just joking 
with Mr. Libeu a little earlier some people consider us part of 
Southern California. We just have this little mountain range in 
between us. We do have a lot in common because we are the 
second largest contractor on the State Water Project, the 
largest agricultural contractor, and, some people may not 
realize, the third largest municipal contractor on the State 
Water Project. We run a municipal water treatment plant, but we 
also wholesale water to other municipal and agricultural 
districts.
    The problems that we have before us this year are really 
indicative of the problems we face in the future. In this first 
dry year, after a couple of wet years, we have a 65 percent 
shortage on the State Water Project. More significantly 
perhaps, our studies show that in a repeat of the last drought 
the average shortage during the drought period goes from 26 
percent to 43 percent given current conditions. Of course, we 
all know that California is growing at the rate of several 
hundred thousand people per year. The situation will only get 
worse.
    In our view the crux of the problem is the lack of 
development of infrastructure and that problem has arisen 
largely because of perpetual conflicts that we have gotten 
ourselves into between interest groups, with certain Federal 
regulatory agencies, and even among water users ourselves. 
Regulatory restrictions have, in fact, diminished the capacity 
of the existing infrastructure over the past few decades.
    But the basic problem that causes all of this is a 
disrepair of the coalition that was brought together by Pat 
Brown for infrastructure development. He created the State 
Water Project through his skill in bringing a coalition of all 
Californians together. We would like to congratulate you and 
Mrs. Napolitano, your co-sponsors and your staff on bringing 
this bill which is beginning to reformulate that coalition of 
folks in California for progress.
    At the local level what we've done is to improve our 
infrastructure. Along with our partners on the State Water 
Project we have created what is known as the Kern Water Bank, a 
large groundwater banking project. Metropolitan, of course, has 
been engaged in creation of the Diamond Valley Reservoir, and 
the other projects you've heard about here today.
    More importantly, we've learned to work together to manage 
our water supplies more effectively. We are proud to call 
Metropolitan and its member agencies, Santa Clara Water 
District and others, our partners in putting together our water 
storage projects. We have also engaged in transfers that are 
mutually beneficial for us.
    We have also learned to work together even with some of 
those environmental interest groups and Federal regulators, 
that we have fought with in the past, in the CALFED process. 
The CALFED process has been very successful. Kern County, as a 
matter of fact, is one of the largest contributors to the 
environmental water account which came out of that CALFED 
process.
    All of those things are good but much more is needed and 
that is why your bill is so significant. These infrastructure 
improvements at the local level take a lot of money. Even 
groundwater storage projects and recycling, which are among the 
most cost effective of these projects, require so much money 
that Federal investment is needed.
    Certainly the CALFED projects themselves will require 
Federal investment to be implemented. The CALFED framework 
agreement and record of decision require an effective 
governance mechanism to ensure that we do all ``get better 
together'' as the CALFED saying goes.
    Your bill is, in the medium term, critical for our future. 
But in the long-term future of California, you are right that 
CALFED and the projects identified there alone do not solve the 
problem. Californians need to come together to reformulate that 
coalition for infrastructure development that is 
environmentally sensitive and responsible.
    There unfortunately is no substitute for creating that 
infrastructure and your bill goes a long way to putting us on 
that path. Again, we offer our congratulations to you, Mrs. 
Napolitano and your staff on a job well done.
    Mr. Calvert. Thank you, gentlemen.
    Mr. Gallucci, City Manager of the city that we are in 
today, Cerritos.
    [The prepared statement of Mr. Stovall follows:]

   Statement of John F. Stovall, General Counsel, Kern County Water 
                    Agency, Bakersfield, California

                          INTRODUCTORY REMARKS
    Thank you for the opportunity to present the views of the Kern 
County Water Agency on the important issues you are considering today 
related to the Western Water Enhancement Security Act. My name is John 
F. Stovall and I am the General Counsel of the Kern County Water 
Agency. Additional personal information will be submitted as an 
exhibit.
    The Kern County Water Agency is a local governmental entity with 
political boundaries encompassing the County of Kern, a territory 
approximately the size of Massachusetts, Vermont and Rhode Island 
combined with a population of more than 600,000 people. Almost 1 
million acres of the most productive farmland in the world and about 
400,000 people rely on the Agency for a significant portion of their 
water supply. The Agency is the largest contractor for agricultural 
water on the State Water Project, and also the third largest contractor 
for municipal water.
    We are proud of our partnership with the Metropolitan Water 
District of Southern California and other water suppliers in attempting 
to solve the water problems facing our constituents. As Californians 
become more aware of the looming water crisis, we look forward to the 
developing partnerships with all elements of the state and federal 
governments to solve the problems before us. Together we can 
significantly reduce the damage which will accompany the next drought. 
Let's address the three major questions before us.
    1. The factors that have led to the challenges that Southern 
California is facing today in regards to water supply, quality, and 
reliability.
Inadequate Infrastructure
    The short answer is that our population has more than doubled over 
the past quarter century with no development of meaningful new state 
infrastructure and an actual loss of water supply and system 
flexibility. In 1960 California had a population of 15.7 million 
people; today we have 33.8 million people. By the year 2040 some 
projections place us at 59 million people. To emphasize the point: 
yield of our major water supply systems (along with hydroelectric power 
generation capability) has dropped significantly over the past decade. 
Our infrastructure is woefully inadequate to serve current needs, much 
less the significant growth which will occur in the coming decades.
    We are not here to point fingers of blame, but we must recognize 
the basic problem to prevent its perpetual recurrence. Along with the 
Metropolitan Water District of Southern California and other local 
governmental entities, we have made the improvements we can, but they 
have been insufficient.
Perpetual Counter-Productive Conflict
    Attempts to improve infrastructure development, water supply and 
drinking water quality have faced tremendous challenges born of 
competing interests. The challenges have come not only from those 
focused on a narrow environmental agenda, but from within our own ranks 
as battles have ensued over dwindling supplies. The promise of CalFed, 
and the bill we are discussing today, is to harness the talent and 
energy of all stakeholders in a constructive effort to minimize the 
conflicts that have generated more attorney's fees than water, and to 
pursue optimal and reasonable solutions for mutual benefits. The 
stakeholders involved in the CalFed process have begun the constructive 
effort to improve water supply, drinking water quality, and the Bay-
Delta ecosystem. Before turning to that effort, we should look in more 
detail at the factors that have brought us to this point.
    A new recognition of the need to appropriately protect the 
environment has attracted the interest of both the Congress and the 
legislature. It has also attracted the attention of interest groups 
focused on various narrow aspects of environmental law. As a simple 
statement of fact, the power of such groups to block water development 
has been significant. Some of these groups have responsibly pursued 
their agendas; some have not.
    Additionally, regulatory agencies with a mission focused 
exclusively on narrow species preservation objectives have pursued 
those goals very zealously (we would say overzealously) in the past. 
The result has been significant litigation and impasses limiting water 
development. It has also resulted in the diminution of capacity of 
existing facilities.
    Water districts and other water suppliers have responded with 
litigation to protect the rights of their constituents. An atmosphere 
of confrontation had arisen between water districts and species focused 
regulatory agencies.
    Mistrust between water users has led to much conflict. As the 
supply of water has dwindled, the temptation has been to resist any 
measures which have the slightest potential to impact our own water 
supplies. Unfortunately, some of this paranoia is reinforced by those 
within the water community who have attacked the rights of their 
neighbors.
    These conflicts have not just expended energy and resources. More 
subtly, they have resulted in strident defenses of positions and 
inflexibility with little focus on creating compatibility of interests. 
They have limited the willingness to engage in creative and 
constructive problem solving efforts. They have resulted in a lack of 
trust which impairs the search for cooperative solutions.
Disrepair of the Coalition for Progress
    Governor Pat Brown is a symbol of the generation that built 
California. His legacy is the infrastructure which made California life 
the envy of the world. The Edmund G. ``Pat'' Brown California 
Aqueduct--more than 800 miles of working concrete and steel--is a 
symbol of the achievements of a bipartisan coalition of laborers, 
farmers, businessmen, and Californians from all walks of life. It's 
crowning glory was the groundbreaking on joint federal and state 
facilities led by Governor Brown and President John Kennedy. A primary 
factor in our problems today is that the coalition needed to build 
meaningful infrastructure has fallen into disrepair.
    The great State Water Project which contracted with local 
governments throughout the state to deliver 4.2 million acre-feet of 
water per year reliably, by most accounts can deliver less than 2 
million acre-feet reliably though it once was able to deliver 
approximately 2.3 million acre-feet. During the last drought California 
suffered major water shortages and major economic loss. The situation 
has deteriorated, and in spite of the efforts of water suppliers the 
yield from the State Water Project and Central Valley Project have 
diminished. The graph on the following page depicts past deliveries 
from the State Water Project preliminary to and during the last drought 
cycle and in a hypothetical repetition of those years under current 
conditions. It illustrates the severity of the situation we face. 
During the last drought period average State Water Project shortages 
were 26%. Our projections indicate that during a repeat of that drought 
the average shortage would be 43%. This assumes a constant demand 
level. Of course, we know that despite our best conservation efforts 
demand will increase.

[GRAPHIC] [TIFF OMITTED] T3149.009

    The situation may be worse than projected. In this first dry year, 
after a fortunate series of wet years, the State Water Project is only 
able to deliver a 35% supply. This is less than the projections 
indicate. We believe that a coalition for reasonable environmentally 
sensitive water development has already begun, but it must be fostered. 
We must focus on reasonable solutions to our water supply, water 
quality, and environmental problems. We cannot insist on unanimity in 
acceptance of these solutions because that simply gives a veto to 
interests opposed to water development under any circumstances. 
Instead, representatives of the people must determine what is 
reasonable. We must then seek a consensus, a coalition with critical 
mass, that will foster those reasonable solutions.
    2. The actions and measures that you have taken to improve upon 
your water supply, quality and reliability.
    We have learned that the most effective way of addressing the 
challenges before us is to do what we can at home and then engage in 
cooperative efforts with our friends such as the Metropolitan Water 
District of Southern California, the Santa Clara Valley Water District, 
and many others. We have also learned that we have to engage in 
cooperative efforts with other responsible groups with other interests 
that are willing to rationally and reasonably look for mutually 
beneficial solutions to California's problems. We are, for example, 
major suppliers for the Environmental Water Account.

Local Initiatives and Cooperation Among Districts
    Among our friends we have made significant progress in diminishing 
the pending impacts of the decline in the state and federal water 
supply projects. These local agencies are working day and night to 
improve conservation, storage and conveyance at the local level.
    The Diamond Valley Reservoir of the Metropolitan Water District of 
Southern California is an excellent example of a local agency investing 
heavily in facilities to minimize the impacts of water shortages. Our 
own Kern Water Bank project for underground storage of water is another 
example. Each of us work to improve our own situation.
    Perhaps more importantly, we look for opportunities for joint 
efforts to improve the quantity and quality of our supplies. The 
efforts of our Semitropic Water Storage District in conjunction with 
Metropolitan, Santa Clara and others utilize underground storage 
available in Kern for the mutual benefit of these districts and all 
users of the Kern County ground water basin. Along with the Kern Water 
Bank Authority, many of our Member Units and the Agency are exploring 
additional efforts. Transfers, both short and long-term are another 
mechanism for more effective use of our existing water supplies. Such 
efforts require cooperation among water users, and tremendous 
investment in facilities. The state has provided significant funding to 
enhance our ability to make these investments thus far, but far more 
must be done to resolve the crisis at hand.

Responsible Water Development Yields Environmental Benefits
    Underground storage of water can also have tremendous environmental 
benefits. The Kern Water Bank is an example of the successful multiple 
use of facilities that can provide significant ecosystem improvements 
while improving water storage. These projects, however, must have 
enough surface storage available to create enough flexibility in the 
overall system to maximize their benefits. Absent that surface storage, 
the benefits can be significantly impaired due to power requirements 
and conveyance restrictions.
    Given the concerns regarding global warming, we believe that 
investment in surface storage enhancements can have significant 
environmental benefits in the production of more clean hydroelectric 
energy. Certainly additional flexibility in the water systems will 
create more opportunities for off-peak pumping and other capacity 
benefits.

Involvement in Statewide Cooperative Initiatives
    On a larger scale, our Agency, along with other contractors on the 
State Water Project, has been actively engaged in cooperative 
processes. After the numerous and protracted conflicts of the 1980's 
resulted in no improvement to the yield of the State Water Project, we 
suffered catastrophic consequence in the last drought culminating in no 
State Water Project deliveries of agricultural water to our area in 
1991. We also faced additional loss of tremendous amounts of water to 
overzealous enforcement of the federal Endangered Species Act in 1992 
through 1994. We realized that the economic survival of our county 
required that we engage state and federal regulators, and even non-
governmental interest groups in a cooperative effort to reach mutually 
beneficial solutions. Many others, including the Metropolitan Water 
District of Southern California, came to the same realization. The 
state and federal governments led the effort. The joint effort led to 
the Bay-Delta Accord, the birth of CalFed, and ultimately the CalFed 
Framework for Action (``Framework Agreement'') which led to the current 
Record of Decision by the Department of the Interior and related 
actions by other state and federal agencies.
    That effort did stop the hemorrhaging of our water supply due to 
the federal Endangered Species Act, but it did so at a significant cost 
in water supply. Yet, after years of the CalFed process we continue to 
believe it represents the best hope of achieving both water supply 
improvements and environmental improvements. But, we have also re-
learned two great truths: the first is reflected in the phrase ``trust 
but verify'', and the second the reality that consensus does not and 
cannot mean unanimity.
    By the former, we mean that mere promises of ``getting better 
together'' or mutual benefit must be backed by meaningful controls and 
commitments to ensure that balance is achieved; significant gains by 
ecosystem focused stakeholders must be balanced with benefits to water 
users. By the latter, we refer to the previously mentioned truth that 
it is impossible to have a meaningful solution which satisfies the 
agendas of all groups; if one group or person can veto a solution then 
no meaningful solution is possible.
    CalFed has produced a Framework Agreement between the State and 
Federal governments which does provide significant benefits for water 
supply, water quality and the ecosystem if it is implemented to achieve 
mutual benefit. The Record of Decision, though ambiguous on some 
points, generally reflects that Framework Agreement. It is a meaningful 
beginning if its implementation tracks the Framework Agreement.
    We must conclude this section, however, with the realistic 
assessment that all of these efforts, if successful, only partially 
solve the problem. Far more is required to begin to resolve the 
infrastructure deficit and water supply crisis that faces current 
Californians, and the many millions more who will join us in the next 
few decades. The bill before you not only supports CalFed's efforts, 
but moves forward with significant funding for more local projects to 
help solve the problem.
    3. What additional measures or assistance may be needed in the 
short, mid, and long term to improve your water security.
    We must continue to develop cooperation and facilities at the local 
level to minimize the damage which will be suffered in the next 
drought. The 65% shortage on the State Water Project this year reminds 
us of the woeful inadequacy of the state and federal systems. We are 
not suffering the catastrophic consequences of this shortage today, 
because of the facilities built by local governments. But if additional 
dry years ensue, local facilities will be inadequate.
    We must also implement the existing Record of Decision and develop 
the water storage and conveyance facilities inherent in it. These are a 
minimum requirement to allow survival in the medium term.
    The bill before you is of invaluable assistance in both of these 
efforts. The provisions of the grant and loan programs provide federal 
assistance in the significant capital cost of developing facilities in 
California as well as throughout the west. As mentioned, the cost of 
developing local facilities to maximize our effectiveness in managing 
supplies is enormous. Costs for single pumps of the capacities and 
depths required can average half a million dollar. The capital costs of 
recycling are also enormous. Of course, capital costs of surface 
storage are even greater, but these facilities are necessary components 
of a flexible system. While we might like to see a greater federal cost 
share, we understand the political realities involved and appreciate 
greatly the assistance which is provided by the bill.
    The investment in CalFed facilities for water supply and quality 
improvement is also sorely needed. The facilities proposed are 
environmentally sound and we believe accepted by those responsible 
environmentalists who are committed mutually beneficial solutions in 
the Delta. We certainly anticipate, indeed expect, some opposition from 
some extreme interests. You must continue to pursue the high road of 
reasonable and balanced solutions to the problems before us. We 
encourage you to press on with the funding and controls in the Western 
Water Enhancement Security Act to ensure that the CalFed program is 
administered in a manner consistent with the Framework Agreement and 
ROD, i.e., a balanced approach to provide benefits to all stakeholders.
    In the long term Californians must engage in more dialogue among 
themselves and federal regulators to move beyond this stage of CalFed 
and develop the trust and cooperation necessary to (1) further improve 
storage in an environmentally sound manner, (2) further improve 
conveyance facilities for water supply reliability and drinking water 
quality, and (3) further stabilize delta facilities from exposure to 
catastrophic earthquake related loss. We recognize that your bill 
cannot appropriately go beyond what it has done. Resolution of these 
additional matters must await development of more trust and cooperation 
among Californians.
                                 ______
                                 

  STATEMENT OF ART GALLUCCI, CITY MANAGER, CITY OF CERRITOS, 
                           CALIFORNIA

    Mr. Gallucci. Thank you, Congressman. First of all, the 
City of Cerritos operates two utilities, public utilities, 
water. One is a tertiary water system reused water, and the 
other is a potable system. I want to talk about the tertiary 
first.
    When you approach the city of Cerritos and you came into 
this particular development, you saw very lush green lawns. I 
want to emphasize that every one of these lawns are irrigated 
with tertiary water. All of the center medians, our 24 parks, 
our 27 schools, and our college is all irrigated with tertiary 
water in the city. We are one of the few cities that can boast 
that. That was due to Jerry Brown.
    Governor Jerry Brown put a grant in and we applied for the 
grant when he was governor. We did receive that grant along 
with city dollars. We developed this particular tertiary water 
system where we irrigate all of these facilities within the 
city of Cerritos. That is to us extremely important.
    We use 2,000 acre-feet a year. We also sell our surplus 
tertiary water to our neighboring city Norwalk, to Caltrans. 
All of the freeways are irrigated adjacent here with tertiary 
water. We also sell to the City of Lakewood. We try to assist 
them in keeping their water rates down.
    We sell it to them for the same price that we have so there 
is no mark up for that water. As you know, tertiary water is 
much, much cheaper than the potable water. For that 2,000 acre-
feet of tertiary that we use, it saves us equal amount of 
potable water so there's 2,000 savings on our potable on an 
annual basis.
    Now, to jump into our potable system, we have 16,000 
connections in the city with out potable system. We use 15,000 
acre-feet of water a year, potable water. That's not the 
tertiary, just the potable. Some of the important items to us 
is the unfunded mandates. I'm speaking on behalf of cities now.
    Cities are just fearful of regulations that are coming 
down, unfunded mandates that are going to mandate additional 
cleanup of our potable water. Now, all of us want clean, 
potable water but the mandates that are passed, we are getting 
to the point where we are going to have to pump the water out 
of the ground through our system and use reverse osmosis 
eventually to clean it before it even goes into the system.
    These are through one of the new issues that you are 
talking about and Washington is concerned about, some of the 
new toxins that they are finding in there that are in the water 
and they want them cleaned greater than they have ever been 
cleaned before. That is causing a major, major impact on cities 
for these unfunded mandates.
    Fortunately, our utility we are in a very fine financial 
system with our utility. We can deal with it. Most of the 
cities in the area are having a difficult time. Fortunately, 
Congresswoman Napolitano and our neighbors in Norwalk, we work 
together on cleaning up military toxic base that she just said 
closed that had numerous oil storage facilities on it.
    One of the byproducts of that is now we are dealing with 
MTBE that are down in the aquifer and Norwalk and Cerritos are 
working with the Federal Government on cleaning that up. It 
hasn't reached the aquifer but our tremendous fear is that it's 
going to reach the aquifer so we are pumping and cleaning. We 
are working with Congresswoman Solis' district on keeping the 
plume in the northern part and we are monitoring that.
    We are all in an association, the City of Norwalk, all of 
the cities that she represents, Congresswoman Napolitano 
represents, to keep the plume isolated. The cost of that to 
cities and municipalities--I want to keep coming back as my 
whole function which is municipal financing and the issue to 
cities.
    I can't emphasize enough the interest to cities is the 
unfunded mandates and the additional mandates placed on 
cleanup. Something that just occurred in California that I know 
is not an issue here but it is an issue that relates to water, 
and that is the cost of electricity. The local cities have to 
pump it out of the ground and then pump that water around. That 
is electric. Our bill just skyrocketed.
    Every city around us has skyrocketed. Now, this is not your 
issue but it's an issue that deals with water and it has 
continued to raise with the price of water. Again, I want to 
emphasize the unfunded mandates that we are fearful of and I am 
and the MTBE issue that is also a major, major concern to 
myself and our city and the City of Norwalk who we share these 
common borders with.
    With that, thank you for allowing me to testify.
    Mr. Calvert. Thank you.
    Mr. Davis.

   STATEMENT OF CHRISTOPHER DAVIS, CITY OF NORWALK, NORWALK 
                     MUNICIPAL WATER SYSTEM

    Mr. Davis. Good afternoon, Chairman Calvert, members of the 
Subcommittee. Thank you for giving me the opportunity to 
address you this afternoon.
    My name again for the record is Chris Davis. I'm with the 
Norwalk Municipal Water System. I'm here to give you kind of 
the local municipal perspective on water quality issues and 
infrastructure.
    Just a little background. The Norwalk Municipal Water 
System services a population of about 3,400 homes and 
businesses, or about 14,000 residents or people. It's about 14 
percent of the City of Norwalk. We are the third largest 
purveyor in the city of Norwalk. First, let me address the 
issue of water quality. This is clearly a very important issue 
for us, as Mr. Gallucci alluded to, with the recent closing of 
the Defense Fuel Supply Point in Norwalk. We are certainly 
concerned about the plumes off of that facility.
    Additionally, in October 1999 we lost one of our three 
wells due to contamination. This forced us to increase our 
reliance on imported water where we had previously been 
servicing that area from groundwater.
    Now, fortunately through a program with the Water 
Replenishment District of Southern California we are working on 
getting that well back on line. This is through their safe 
drinking water program. If all goes according to plan, we 
should have it back up between 12 and 18 months from now. That 
kind of illustrates how much of an impact water quality issues 
can have on us.
    Another issue I wanted to touch on is Chromium 6 which has 
gotten a lot more attention due to the recent movie Erin 
Brockovich and the resulting lawsuits. We did go ahead and test 
our system for this substance. Fortunately it came up 
nondetect. We are very mindful of potential legislation and 
regulations coming out of both Washington and Sacramento which 
could have a major impact on a small purveyor like us.
    The second issue I wanted to touch on is infrastructure. As 
a small system we have not, unfortunately, been able to make 
the type of wholesale changes or upgrades to our system that we 
would like to. Nonetheless, our city council has made upgrading 
the infrastructure a top priority for our system.
    Currently we are in the third year of a 4-year valve 
replacement program which would allow us to better isolate any 
potential problems so that it affects smaller areas of our 
population and basically to mitigate the damage that either a 
major leak or contamination would have.
    Our major capital improvement priority, however, is the 
construction of a five million gallon water reservoir. The need 
for this reservoir was identified in a study by the U.S. Army 
Corps of Engineers which was conducted back in 1996. This would 
address storage capacity shortfalls and would provide a safe 
supply of drinking water. Right now we are working to secure 
funding for this program in order to proceed with construction.
    That concludes my remarks.
    Mr. Calvert. I appreciate that, Mr. Davis.
    Mr. Everts. Is that how you pronounce your name, sir?

   STATEMENT OF CONNER EVERTS, EXECUTIVE DIRECTOR, SOUTHERN 
                 CALIFORNIA WATERSHED ALLIANCE

    Mr. Everts. Thank you very much. I am honored not just to 
be last and give a little wrap-up but I want to thank both the 
Chair, the Representatives, the Committee staff, and your own 
staff who have helped me at the last moment put all this 
together.
    I'm glad also the record is still open so I can submit some 
more information.
    Mr. Calvert. Without objection.
    Mr. Everts. Thank you very much. I am here really to say 
that the watershed movement is alive and well in Southern 
California. Throughout Southern California I work with over 60 
organizations on a very local level doing all the things we 
just talked about. This doesn't happen alone and without a 
regional approach.
    I don't think we have a north/south issue here. I think we 
really have a perspective of what the rest of California--
potentially what the rest of the country could look like with 
the stresses of growth and development and industry that is 
happening across Southern California without much long-term 
planning. We are now in the implementation stage of CALFED 
after the rod.
    These things have not happened alone. While Southern 
California and major urban areas in Northern California have a 
flat water demand because of their investment and conservation 
reclamation, that has also included money from the Federal 
Government and the Bureau of Reclamation to make that happen.
    It's also a challenge with public participation the 
educational issue goes on and on. We have a partnership with 
LADWPM, the San Fernando Westside Recycling Plant. San Diego 
has also voted down a recycling plant. The money and the 
investment is there but to really make reclamation work as we 
heard it has worked successfully in some municipalities, it's 
an ongoing issue.
    The issue of energy keeps coming up. The direct link 
between the amount of water it takes to pump water from Kern 
County over to Hatchapies and the savings in the investment and 
conservation are now more apparent than ever. There is an 
excellent study that I'll include by Professor Bob Wilkinson 
that over a year ago before we hit these high prices and energy 
really pointed to that.
    I also want to point out jobs and economic development that 
has come out of the community-based organizations that have 
made our water conservation programs work. They have not 
happened just, with all due respect, to the agencies who I am 
happy to be sitting here with. They have done a very good job 
but they have done it in partnership with community-based 
organizations. So it is very cost effective to put the demand 
before the supply.
    I lastly wanted to touch on your comment on climate change. 
What we really see now are extremes in different places and 
where we may get our water from and traditionally expect water 
to come from. For instance, in the northeast part of California 
in the Feather River System they are low on water while we've 
got more water than the Seattle area this year in Southern 
California.
    It really pushes the need for us to maximize our local 
resources and do all the things we've been talking about, 
cleaning up our local ground water, conjunctive use, better use 
of reclamation and conservation.
    I haven't even talked about environmental restoration 
because I think we get to that through all these methods we 
have been talking to. Thank you very much.
    Mr. Calvert. Thank you. Mr. Everts, talking about the 
legislation that is being proposed, H.R. 1985, we have 
obviously gone beyond the initial CALFED legislation in that we 
have two additional sections in the bill. One that involves 
grants to local communities through California.
    I want to stress for the record this is not just for 
Southern California. East Bay MUD, for instance, has some very 
important projects that they find very important for their 
region. Sacramento has a conjunctive water project that they 
think is very important for their water future.
    Certainly whether Kern County is north or south depends on 
who you talk to but obviously they have some projects that they 
believe are very important to California's water future. We 
have a reclamation loan program that can fund either 
environmental enhancement programs or helps fund the same type 
of programs through a loan program to augment the grant 
program.
    You have indicated in your testimony these are important. 
Are you in favor of those sections of the bill that help 
communities leverage resources to build those types of things?
    Mr. Everts. Of course I am. I really see that it is a 
statewide and even the whole west is connected in terms of 
these water issues. As much as we can point to what we have 
done in Southern California, our water supplies come from other 
watersheds and so we have to be involved in those efforts as 
well.
    I would like to say I am Convenor of the California Urban 
Water Conservation Council, a statewide agency, and there is a 
real opportunity now to push these programs on a regional level 
because that is really how the governance works as our Southern 
California Association of Governments talk about their 
programs.
    I would like to say just in response is that I think those 
conservation reclamation programs and the water quality have to 
come first before the investment goes into supply. I think that 
is where the cost effective and immediate results happen to be. 
They also happen to be the most environmentally beneficial.
    Mr. Calvert. Certainly there will be a debate on the entire 
legislation whether it be supply or reclamation or conjunctive 
use and whether it is the money portion or the storage portion. 
I don't think anybody denies a need for water and better 
utilization of water here in California. I appreciate your--
    Mr. Everts. We hope to work with you from the environmental 
community. Thank you very much.

    [The prepared statement of Mr. Everts follows:]

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    Mr. Calvert. Larry, we have worked together over the years 
on various things and obviously one comment that hasn't been 
talked about, or we haven't talked about too much, is the 
reclamation process of this bill. You have been kind of 
involved in that over the years. Do you have any comment about 
that portion of the bill and what that means? Not just to 
California but to the western states and what they can do to 
help leverage water supply in the western states.
    Mr. Libeu. Yes, I do, Mr. Chairman. I thank you for the 
opportunity to respond to that.
    As you said, we have worked on this legislation, or this 
part of your legislation for a long time. I think it's 
important for people to realize that your legislation--when you 
prepared this legislation you realized that water resource 
management and shortage of water supply is just not a 
California issue. You took into consideration that the entire 
west is faced with the same problems.
    I commend you for your foresight in melting together with 
your CALFED legislation an additional piece of legislation 
which will allow the other western states, as well as members 
of the state of California, agencies in California, to access 
additional Federal dollars to build programs.
    One of the things that I think is real interesting and 
unique about Title II of your legislation is that there are 
three separate titles within that. You can build relatively 
large projects with the maximum Federal exposure of $50 
million. But for the smaller agencies like the City of Norwalk, 
places where the upper San Gabriel River Valley Basin need to 
implement smaller projects on a quicker basis. There is a small 
partnership program which allows grants of up to $5 million on 
a 50/50 basis.
    And for our long-term or bigger projects there are loan 
guarantees for people. We have worked a long time to put this 
together. I commend you on adding it to your CALFED legislation 
in realizing that the Federal Government has got a tremendous 
financial commitment to infrastructure in California already.
    We need to supplement that with new monies and partnership 
amongst the State of California and the agencies here to 
improve that and to put together the tools for the 21st Century 
that is going to make water supply and water management in the 
west the number one issue. Thank you.
    Mr. Calvert. Mr. Stovall, over the last 20 years your 
contract water supply has decreased obviously. What has been 
the major reasons for that reduction?
    Mr. Stovall. Well, a number of reasons. During the early 
'80's D1485 reduced supplies to improve salinity balances 
within the Delta. Since the early 1990's there have been 
restrictions imposed for endangered species protection that 
have sometimes impacted pumping and the cumulative effect of 
those has reduced the yield from about 2.3 million acre-feet 
down to somewhat less than 2 on the State Water Project.
    Mr. Calvert. Appreciate that.
    Ms. Napolitano.
    Ms. Napolitano. Thank you, Mr. Chair. There is the same 
resounding message here, that we need to take a look at the 
overall picture and work in coalitions rather than continue the 
band-aid approaches of the past. I tend to agree so much with 
that kind of approach. I've been working on the Colorado 
cleanup of the uranium tailings up in Moab for the last year 
and a half with Representative Chris Cannon because that is a 
potential detriment to the drinking water in Southern 
California. We get, what, 30 percent almost of that water and 
if we ever get a flood, a 100-year flood up there, we are in 
deep trouble because it contains uranium tailings.
    What we were able to accomplish with a coalition is bring 
all the parties, the governors together, all of the water folks 
along the Colorado River that have an interest in the Colorado, 
my colleagues on both sides of the isle, as well as my 
Democratic colleagues. We were able to get that piece of 
legislation moved through last year. Now we are just looking 
for the funding.
    What we thought we would have this year is the second step 
to that, and that would be to address the salinity from that 
area because there were 50 percent of the water fix-up. Fifty 
percent of the land that it traverses through are Federal 
lands. It is incumbent for the Federal Government to clean up 
some of that so you have less to clean up on the lower end or 
at the middle end and then down to Mexico.
    The problem sometimes we find, and Mr. Stovall, you hit it 
on the head when you say in your statement the mistrust between 
water users has left much conflict. Unfortunately, it's egos. 
It is turf. It is many things that we tend to think are 
paramount to our success.
    We are fortunate we have a Chairman who feels that working 
in conjunction is going to lead us to solutions rather than it 
is his turf because he is the Chairman. That is why I am 
thankful to him for holding the water hearings that are at 
least going to allow us together to listen to what the users 
are saying are going to lead us to the solutions rather than 
just the bandit approach again.
    However, we must also consider that if we don't work in 
unison, that means you have your share of work to do. It is 
convincing your local Federal representatives to work together 
to get this to happen because we all will win. If not, we all 
lose.
    I thank you very much. Especially Art, you and Chris, for 
coming in at the last minute subbing in for the city, the muni 
version of what you have to do. Since I come from the municipal 
government, I hold dear the fact that cities have to pay 
inordinate amounts to clean up their water wells so that they 
can provide for the cities and they are not even connected to 
the water supply. In other words, you can't melt them down to 
cut down the contaminants in those wells because they are 
separate and apart. Somehow we need to help the munis deal with 
their own issues so that we don't have to import more water 
thereby using less electricity and less of that source that 
Northern Californians would love to have.
    In the meantime, I still think we have a long-term 
education process that we need to become more open to. As you 
speak, do not just speak to water users but speak to the 
children and the schools, the teachers, the media. Anybody who 
will listen because it's going to be all of us working together 
that we are going to be able to come to the solution.
    I don't really have any more questions. You've covered 
them. But if you can sense the frustration in my voice, it is 
because I've been at it for a long time and we are still there 
trying. If it hadn't been for this man to bring it to our 
backyard and ask for our input, I think we would still be 
trying to figure out who is on first base. Thank you.
    Mr. Calvert. Ms. Solis.
    Ms. Solis. I don't have any questions either except this 
was a very insightful last panel. There is a lot of good issues 
that came up, particularly the municipalities and the things 
that they have to go through.
    Right now I have in two areas of my district where they 
have found chromium 6 in what happens to be a public city 
library in the City of Rosemead. Going about trying to assess 
who is responsible, how you pay for that cleanup, and where 
else it might be found obviously is a very sensitive issue and 
very controversial because our constituents are demanding that 
we do something as well.
    The science is going on. I now there are some legislative 
efforts in Sacramento as well as through Congressman Adam Shift 
to start looking at how to identify what levels are safe and 
unsafe and what have you. Those are very important. I would 
hope we could continue to have those discussions on this 
Committee and likewise look at what current resources, natural 
resources we have now in our basin that are not being utilized.
    I know in the San Gabriel Valley I worked very hard to get 
legislation passed to create a state conservancy at the San 
Gabriel River and LA River as they connect. There is a whole 
potential there to start looking at some ideas that you spoke 
about, Mr. Linsky, about trying to, if you will, create these 
artificial watersheds that we desperately need that perhaps 
some of our local municipalities and other organizations can 
also tap into and help us in providing that kind of support.
    I am very interested in hearing more about whatever 
information you have and likewise understand the needs and 
pressures of our local municipalities. I want to thank the 
panel and I want to thank the Chairman for calling this 
Committee together.
    Mr. Calvert. Thank you.
    Years ago, I'm a baseball fan, and I went out to watch a 
great movie, Field of Dreams. Remember the premise of that 
movie is build it and they will come. I think if we had a 
strategy in California, it would be don't build it and they 
will come anyway.
    I think that has been proven here in our state. 
Infrastructure has been ignored for a number of years and I 
don't point any fingers at anyone. I think Republican 
administrations, Democratic administrations, as we prioritize 
how we spend money, other things get in the way. I think we 
have come to the point where we can't ignore it any longer.
    I want to thank my colleague in the Senate, Senator 
Feinstein, who I think has stepped forward with legislation 
that she intended to move through the Senate to bring a process 
in the Senate as we are going to do in the House with H.R. 
1985.
    We have seen what crisis management is in the energy 
crisis. No matter where you stand on that, I think there are 
decisions that are being made today that people in public 
service and policy would have found astounding several years 
ago.
    I don't want to get to that point in water management. I 
think the environment would suffer because if we have to make 
decisions for people versus fish or for migrating birds, 
obviously decisions that would harm the environment probably 
would be made in order to safeguard people.
    We have maybe--maybe some time if we are lucky to do the 
right thing and to move forward with legislation that will 
leverage Federal assets to encourage the state and local users 
and so forth throughout our great State of California to do 
what is necessary for the residents of our great state and the 
tax payers to encourage water development and enhancement 
throughout our regions.
    With that, I look forward to future hearings. We are going 
to have several. We are going to have one on June 30th in the 
Central Valley and on July 2nd in San Jose, California. July 
9th in Las Vegas was mentioned to talk about salinity and other 
issues in the upper basin states and why this legislation is 
not just for California, as Larry mentioned, but really for the 
entire west.
    If anyone needs to contact our Committee or anything for 
additional information, please do so. I want to thank this 
panel for participating and answering our questions and I want 
to thank the City of Cerritos for being such wonderful hosts 
and to Grace Napolitano for suggesting it. This was a wonderful 
place to meet and great facility here in Cerritos.
    With that, this hearing is adjourned.
    [Whereupon, at 12:55 p.m. the Subcommittee Hearing was 
adjourned.]
    The following additional materials were submitted for the 
record:
     Statement from Jan Breidenbach, Executive 
Director, Southern California Association of Non-Profit Housing
     Letter from Martha Guzman, United Farm Workers of 
America, AFL-CIO
     Letter from Richard Lambros, Executive Vice 
President, Building Industry Association of Southern California
     Letter from Robert Reeves, Sr., Executive 
President, AFSCME Local 1902
     Statement from Todd Spitzer, Supervisor, Third 
District, Orange County

 Statement of Jan Breidenbach, Executive Director, Southern California 
                   Association of Non-Profit Housing

    Good morning, Mr. Chairman and Members of the Subcommittee. My name 
is Jan Breidenbach, Executive Director of the Southern California 
Association of Non-Profit Housing. I would like to thank you for the 
opportunity to testify on behalf of affordable housing advocates 
throughout Southern California.

BACKGROUND ON SCANPH
    The Southern California Association of Non-Profit Housing (SCANPH) 
is a non-profit membership organization dedicated to the development, 
preservation and management of permanently affordable housing for low-
income people. SCANPH believes that the non-profit community 
development industry is the best vehicle of attainment of this goal.
    SCANPH was founded in 1989 when a community of non-profit 
developers recognized that they had reached a level of growth that 
required the establishment of an umbrella organization . By 1996, 
SCANPH grew to over 500 members in the region -- including non-profit 
housing developers, social service agencies and community groups, 
private businesses, local government agencies, lenders, and numerous 
individuals engaged in affordable housing issues. Our members are 
located in Los Angeles, Orange, Riverside, San Bernardino, Ventura and 
Santa Barbara Counties.
    Non-profit housing is not just another way to develop real estate. 
Nor is it just good social policy. It is an economic development 
machine. Through the financing, production and management of this real 
estate, job opportunities are created and communities are strengthened. 
In short, the production of affordable housing, like all construction, 
is a major contributor to regional economic growth.

LINKING AFFORDABLE HOUSING AND NEED FOR RELIABLE, HIGH QUALITY WATER 
        SUPPLY
    However, without a reliable, high quality water supply our ability 
to provide affordable housing will not exist. California has 9 of the 
nation's 10 least affordable housing markets, including 7 of the top 7. 
A kindergarten teacher in Downtown Los Angeles needs over $78,096 in 
additional income to afford the median-priced home. Yet, we are under-
producing housing. Last year
    marked the 10th consecutive year of housing production at roughly 
50 percent of demand. The annual housing deficit for Los Angeles 
County, forecast by the Department of Housing and Community 
development, is expected to be 28,000 units. We cannot continue down 
this path if we hope to achieve a higher quality of life for the 
citizens of our region.
    Water availability is considered in every housing development 
decision made in California today. It is considered by the builder, the 
water agency, and the local government in the acquisition, planning, 
design, environmental analysis, project entitlement, construction, 
landscaping and mitigation monitoring stages. The California 
Environmental Quality Act (CEQA) requires consideration of the 
availability of water utility service and the California Water Code 
requires preparation of a water availability assessment for regionally 
significant housing projects. The reliability of current water supplies 
is being used increasingly as the basis for no-growth and NIMBY legal 
challenges to new housing developments.
    The cost of water infrastructure influences the cost of housing. 
Unfortunately, the most recent trend has been to shift the 
responsibility of infrastructure costs away from the broad constituency 
that benefits from new public facilities to the next person to move 
into the neighborhood. The result has been higher housing prices, lower 
housing production, and an inadequate supply of housing to shelter 
California's families.

Improve Reliability
    We would define an ``equitable'' distribution of the costs of new 
water infrastructure as one where new development pays for a fair share 
of new water facilities, but the trend of disproportionately burdening 
new home buyers for the costs of public facilities is broken. The 
reliability and quality of the water supply influences the operational 
costs to the homeowner or renter in their monthly water bills. Higher 
development fees, benefit assessments, and connection fees just lead to 
even higher monthly water utility expenses and to the challenge of 
providing affordable housing for our society.
    We support development of a more comprehensive program to improve 
reliability of the existing California water delivery system through 
increased levee maintenance, reinforcement and repair. State, federal, 
and local agencies should examine options for maintaining and 
strengthening the aging State Water Project, Central Valley Project, 
Colorado River Aqueduct, Los Angeles Aqueduct, and other vital canals 
from seismic, flood or other failures. Contingency plans should be 
developed and updated annually to permit emergency water transfers in 
the event of failure of one or more of these major water arteries.

Increase Storage
    We also recommend increasing off-stream storage facilities north 
and south of the Bay-Delta. With inherently inadequate water supplies 
and competing demands, as much flexibility should be built into 
California's water supply, storage and delivery system as possible. A 
key objective of future water management programs should be to 
alleviate potential regional water shortfalls. A water delivery system 
should be designed to minimize the suffering of any one region when 
statewide water shortages occur. We support increased storage capacity 
and new storage facilities as the best means to minimize the damaging 
consequences of future droughts.

WESTERN WATER ENHANCEMENT SECURITY ACT
    H.R. 1985 (Rep. Calvert-R), or the ``Water Enhancement Security 
Act,'' provides a ground-breaking approach to ensuring a reliable and 
high quality water supply for Southern Californians. The bill 
authorizes funding for a comprehensive plan that will prevent a looming 
water crisis in California, and will result in tangible benefits to 
Southern California.
    Short-term we need grants and loans to make Southern California 
less dependent upon imported water from the State Water Project and the 
Colorado River. We support the provisions in H.R. 1985 that could 
provide funding for new storage projects, surface or groundwater, in 
Southern California to make our region less dependent upon imported 
water. We also welcome the potential for increased local investments in 
water conservation and reclamation that increase our efficient use of 
currently available water supplies.
    Mid-term we need funding for the first stage of CALFED water supply 
and quality projects as described in the CALFED Framework and Record of 
Decision. It is critical that the agreements reached between state and 
federal agencies be implemented in a balanced manner that increases 
water supplies and improves the water quality of the Sacramento-San 
Joaquin Delta. H.R. 1985 provides an important federal funding 
commitment necessary to support the policy agreements reached by state 
and federal agencies to enhance the Delta's ecosystem, increase the 
reliability of its water supply and improve its water quality.
    Long-term we need to develop the water storage and conveyance 
facilities required to meet a growing population. Housing does not 
create population growth! Housing is a response to an increasing 
population's need for shelter. We need to responsibly plan for both 
California's future housing and water needs today, rather than react to 
increasing shortages of both. With the long lead times required for 
approval and construction of any major infrastructure project, we 
recommend that the feasibility of both new statewide level 
infrastructure, such as an isolated Delta conveyance facility, and 
regional water storage options continue to be pursued to meet future 
water needs. We also support aggressive research and development of new 
desalination technologies as a potential longer-term solution to our 
future water needs.
    H.R. 1985 bill will enable the state to get ahead of a potential 
water shortage and environmental disaster in the Sacramento-San Joaquin 
Delta, a critical component of Southern California's water supply, 
providing nearly two-thirds of the drinking water for the state.
    A high quality and reliable water supply has never been more 
important to our region. While demand for water is increasing in our 
ever-growing region, we face a decline in supply, with a federal 
mandate to reduce our dependence on the Colorado River.

CONCLUSION
    In the next 20 years, California's population is expected to grow 
to more than 45 million people. The Department of Water Resources 
estimates that the gap between water supply and demand will total 2.4 
million acre-feet in normal years of precipitation and up to 6.2 
million acre feet in drought years by 2020.
    The future of Southern California depends on managing our limited 
water resources wisely and responsibly. H.R. 1985 is a giant step 
toward the goal of clean, reliable water supplies for a growing 
population, as well as for farms, industry, and the environment.
    I appreciate the opportunity to testify before you today on behalf 
of the many affordable housing advocates and most importantly, the 
countless families that need affordable housing in Southern California.
    Thank you.
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    OVERSIGHT FIELD HEARING ON CENTRAL CALIFORNIA WATER SECURITY -- 
                      OPPORTUNITIES AND CHALLENGES

                              ----------                              

                        Saturday, June 30, 2001

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                          Modesto, California

    The Subcommittee met, pursuant to call, at 9 a.m., at the 
Modesto Board/Council Chambers, 1010 10th Street, Modesto, 
California, Hon. Ken Calvert [Chairman of the Subcommittee] 
presiding.

  STATEMENT OF THE HONORABLE KEN CALVERT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Calvert. Good morning. First I want to thank everybody 
for attending and it's great to be here in Modesto with my good 
friend Gary Condit and his congressional district and a 
delightful evening last night here in Modesto. It reminded me 
of my hometown with all of those great muscle cars going down 
on the main drag of Modesto. It's a wonderful community.
    The reason we're here is to talk about water and certainly 
the future of California depends on the future of California's 
water security.
    Everyone that has taken time to come here today understands 
the importance of water and water availability, reliability and 
supplies to our well-being, our environment and this state and 
country.
    We've convened this hearing as an opportunity to listen to 
the perspective of those closest to the issue. An important 
work of addressing California's water security has a strong 
foundation in the CalFed Bay-Delta program and the record 
decisions. This program contains a balanced holistic approach 
dealing with water security and the Bay-Delta Area and the 
impacts on water issues across the state and the West.
    We have introduced legislation to assure that this 
important program continues to progress from the formative 
stage to grow into a strong cohesive and balanced program as 
needed into the distant future.
    As Chairman of the Water and Power Subcommittee I believe 
Congress should focus on continued support of this important 
environmental undertaking and to further recognize that our 
water security depends upon the healthy environment and 
reliable water supply and good quality water.
    The legislation I introduced undertakes that broad 
perspective. No specific projects are authorized and it leaves 
the state and Federal agencies working in close consultation 
with the public and local stake holders to develop the 
governing structure to assure proper balance among all 
competing water interests. I emphasize that a balanced approach 
is necessary.
    We must provide to the environment an enhanced ecosystem 
while also working to honor contracts of water users and insure 
a water supply for every Californian who depends upon a clean, 
reliable water supply. To achieve these goals we need to 
carefully balance the use of existing water and serve and 
recycle that water and look for ways to augment the supply of 
water.
    That's the heart of what I believe and it's embodied in 
H.R. 1985, the Western Water Security Enhancement Act. We must 
stop thinking in a fashion that pits the environment against 
all other factors. The mentality that if you increase water 
supply and quality, it must be at the expense of the 
environment is detrimental to working constructively on water 
issues in the West. When water supply and quality are improved, 
the environment is benefitted by this additional water. When 
the environment is benefitted, water supply and quality are 
increased. With California's water security in the lurch we 
must take this approach to the situation, as the CalFed program 
attempts to do and this bill certainly assures.
    And with that I'd like to ask my good friend, and our host 
this morning here in Modesto, Gary Condit to have his opening 
statement.
    [The prepared statement of Mr. Calvert follows:]

Statement of The Honorable Ken Calvert, Chairman, Subcommittee on Water 
                               and Power

    The future of California depends on the future of California's 
Water Security. Everyone that has taken the time to come here, and 
certainly those that have agreed to provide testimony for us today, 
understand the importance of water availability, reliability and supply 
to our well-being, our environment, and to this state and our country. 
We have convened this Hearing as an opportunity to listen to the 
perspectives of those closest to the issues, here in California.
    The important work of addressing California's Water Security has a 
strong foundation in the CALFED Bay-Delta Program, and the Record of 
Decision that was released by that program in August of 2000. This 
program contains a balanced, holistic approach to dealing with Water 
Security in the Bay-Delta area, and the impacts on water issues across 
the state and West. As some of you already know, I have introduced 
legislation to assure that this important program continues to progress 
from the formative stage to grow into the strong, cohesive and balanced 
program that is needed into the distant future. As Chairman of the 
Water and Power Subcommittee, I believe Congress should focus on our 
continued support of this important environmental undertaking, and to 
further recognize that our water security depends upon a healthy 
environment, a reliable water supply, and good quality water. The 
legislation I introduced with more than half of my California 
colleagues takes that broad perspective. No specific projects are 
authorized and it leaves to State and Federal agencies, working in 
close consultation with the public and local stakeholders, to develop 
the governing structure to assure proper balance amongst all competing 
water interests.
    I would emphasize that a balanced approach is necessary. We must 
provide for the environment and enhance ecosystems, while also working 
to honor contracts of water users, and assure a water supply for every 
Californian who depends on a clean, reliable water supply. To achieve 
these goals, we need to carefully balance the use of existing water, 
conserve and recycle that water, and also look for ways to augment the 
supply of water. That is at the heart of what I believe, and it is 
embodied in H.R. 1985, ``Western Water Security Enhancement Act'', 
which I have introduced in Congress. This bill clarifies that the 
Governance Board, in carrying forward the CALFED program, should 
consider economic/social and ecosystem restoration as coequal 
objectives. In fact, in the short term, while the stakeholder developed 
Governance Board is being formulated, it ensures that equal funding is 
provided for assuring a reliable water supply and for environmental 
benefits.
    We must stop thinking in a fashion that pits the environment 
against all other factors. The mentality that if you increase water 
supply and quality it must be at the expense of the environment is 
detrimental to working constructively on water issues in the West. When 
water supply and quality are improved, the environment is benefitted by 
this additional water. When the environment is benefitted, water supply 
and quality are increased. With California's water security in the 
lurch, we must take a holistic approach to the situation, as the CALFED 
program attempts to do and this bill assures.
                                 ______
                                 

  STATEMENT OF THE HONORABLE GARY CONDIT, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Condit. Thank you, Mr. Chairman. I would like to 
welcome all my colleagues to the City of Modesto. We're honored 
to have all of you here today and we're very proud of this 
facility and if you get out today, you'll see some of the 
renewal, redevelopment of the downtown area. We're very excited 
and very proud of that.
    I'm pleased that the Chairman selected Modesto. This area 
illustrates tremendous benefit of water security. It's no 
surprise to some of us who are from the Central Valley and the 
foothills that water is the lifeblood of agriculture.
    Several weeks ago I and all the members sitting up here 
today and several other members in the House of Representatives 
introduced the Water Enhancement Security Act. This bill is 
balanced and comprehensive. Let me underscore balance is the 
cornerstone of this bill. It links progress of water supply and 
water quality with the progress on the environment. The link 
puts agricultural cities and environmental interests on equal 
footing. One interest cannot advance without the other.
    And as we discuss this today and as the Chairman takes 
these hearings around the state, one of the things that we 
should continually remind ourselves is that we all have to get 
well together if we're going to be successful with water policy 
facing the State of California. No one interest can get ahead 
of the other. That's what this bill does. That's what all the 
people that are committed to do--to work on it today are trying 
to do. That's what our objective is, to make sure that we all 
get well together as it relates to a solution for water facing 
California.
    We need to do this as quick as we possibly can. CalFed's 
been hanging around a long time. It's time we begin to put some 
meat on the bones. This is, I think, a major effort and I 
commend the Chairman, Mr. Calvert, who has taken sort of the 
bull by the horns and move this thing in a very pro-aggressive 
way.
    Once again, welcome to all the members here today.
    Mr. Calvert. I'd like to add to that that Gary and I have 
worked very closely putting this bill together as well as all 
the members here on the dais today. Obviously they are all very 
wise people.
    Any other opening statements?

      STATEMENT OF THE HONORABLE GEORGE P. RADANOVICH, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Radanovich. Yes, as soon as I learn how to use this 
microphone. I guess I don't have to pull a switch or anything.
    Mr. Chairman, thank you for all your work in putting this 
bill together. As Mr. Condit had mentioned, it is a good, 
balanced approach to California's water needs, and I also want 
to thank my friend Vern Moss from Madera County for coming here 
to testify. You'll be hearing his wisdom here very shortly. 
He's a good man and wise man.
    I do want to mention when CVPIA was passed many, many years 
ago it really made water a scarce source in the state. And 
since then I think that we have just not had enough water to 
meet needs. I'm really concerned about a bill that does--at 
least in this time of water shortage--that doesn't put urban 
and ag water uses at least ahead of the environment until we 
get more supply to it all. I think this water shortage is just 
going to be as serious as the electricity crisis if we don't do 
something about it soon enough.
    Until we get water supply that can meet all the needs of 
the state, I just think that human beings need to come first 
and then we can take care of everybody else just a little bit 
later. I think this bill does that. That's why it's been my 
concern on reliability until we get some long-term water supply 
in, not for a specific water agency in a particular part of the 
state, but for all urban and ag users in California until we 
get supply on that can take care of all the water needs in our 
state. So I applaud the Chairman for putting a bill together 
that does that.
    I also want to thank Senator Feinstein for her work for 
putting together a similar bill on her side and look forward to 
the testimony today.
    Mr. Calvert. Any other statements?

 STATEMENT OF THE HONORABLE CALVIN M. DOOLEY, A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Dooley. Yes, I just want to thank you, Mr. Calvert, for 
holding this hearing. As someone who represents maybe a part of 
the state that has been most negatively impacted by the 
reduction in the supplies of water, obviously this legislation 
is something that holds some promise to how we can move forward 
with increasing the certainty of the supplies that are 
delivered to the south of the Delta and also insuring that we 
can move forward in a manner where the Federal Government will 
step up with its commitment financially and otherwise to meet 
not only the water supply demands of the State of California, 
but also are able to provide for some of the environmental 
investments that are going to be needed.
    I think what all of us are very much aware of and I hope 
the people who are going to be engaged in the legislative 
process and some of the people that are testifying here, anyone 
can kill a piece of legislation that we're dealing with in 
Congress. I would hope as we're moving forward here that 
everyone would maintain a commitment to be constructive. And 
hopefully throughout this hearing, those people who have some 
questions or concerns about the legislation would go beyond 
just voicing their opposition, but identify remedies that would 
allow us to put together a compromise that can meet the 
objectives of this legislation which I think all of us would 
agree are sound and responsible.
    Mr. Calvert. Okay. Ms. Napolitano.

       STATEMENT OF THE HONORABLE GRACE F. NAPOLITANO, A 
    REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Napolitano. Well, I echo the sentiments of all my 
colleagues and I tell you this is a truly bipartisan bill. When 
I was in state legislature and--to me this is one of the first 
pieces of legislation that we have been able to set on the 
table and actually formulate areas of concern and their 
inclusion into a bill, so especially my charge is 
municipalities. Those are the ones that are more affected in my 
area. That's all I have. I have very little ag, almost none.
    So the assistance to the munis is very critical and the 
Chairman has been very open about the process, so we're all 
hoping that we get solutions, not only as my colleague Dooley 
is indicating is the objections, but what would be the 
solutions to be able to have everybody have a piece of that pie 
that we all want to formulate and make sure that benefits all 
of California.
    Thank you, Mr. Chairman.
    Mr. Calvert. Thank you. Also, I'd like to read one 
paragraph from a letter from Senator Feinstein.
    The bill--this is her. ``The bill I introduced into the 
Senate brings on line ecosystem protection, water storage in a 
balanced and concurrent way. I will not support authorizing 
legislation and appropriations that do not protect the 
environment and increase California's water supply.''
    She indicates that we're doing the same thing on the House 
side, so we appreciate her support.
    Mr. Calvert. Our first panel is Dr. Marcia Sablan, City 
Council Member, City of Firebaugh, and Mr. Vern D. Moss, 
Supervisor of Madera County. If you would please step up and 
take our witness stand here, I guess.
    Let me explain a little rule. We have these little lights. 
We're on a 5-minute rule to make sure we have plenty of time 
for questions. The green light indicates that obviously you 
have time. The yellow light indicates you have 1 minute 
remaining. The red light means the 5 minutes expired. We try to 
stay in that as much as possible in order to have time for 
questions.
    With that, Doctor, you may begin.

   STATEMENT OF MARCIA SABLAN, CITY COUNCIL MEMBER, CITY OF 
                           FIREBAUGH

    Dr.. Sablan. Thank you, Congressman Calvert. I am honored 
to have this opportunity to represent the citizens of the San 
Joaquin Valley. I also echo the sentiments of the congressman 
here to applaud you for this work that you have done to try to 
bring this bill forward.
    To give you a little bit of my background, I'm a Board 
Certified Family Physician in practice in Firebaugh with my 
husband who's an internist. We were scholarship recipients of 
the National Health Service Corp back in 1981 and when we 
finished our obligation, the beauties of Firebaugh kept us 
there.
    For those of you that aren't familiar with Firebaugh, and I 
think almost everybody here is, it's a river town, a historic 
river town along the San Joaquin River with a population today 
of 6,500 people. It was the headquarters for the Miller and Lux 
Ranch that began valley irrigation, so I think it's an 
important place to talk about the history of valley irrigation.
    It began a long time ago in the 1840's as a ferry crossing 
when the San Joaquin River was big enough to hold steam ships 
to come down before the dams were placed.
    A lot of my knowledge came--about the water issues came 
from living there in Firebaugh but also from being a member of 
the BDAC, the Bay-Delta Advisory Committee. I've also been a 
member of the Firebaugh City Council for--since 1983 and the 
mayor for 10 years.
    Most of our citizens like you know are dependent on 
agriculture for their livelihood. We often think of the farmers 
in this equation, but I would just like to represent today the 
farm workers, the service providers, the people that serve the 
farms.
    In my medical practice, which is the thing I think I can 
bring to this table, is the fact that our society depends on 
the health of the environment, healthy economy. When the water 
supply can't be guaranteed and the layoffs start, it's always 
the farm workers that have the layoffs and suffering first. And 
that reflects in our society health.
    During the drought, for example, we saw a lot of the people 
that had been farm managers, farm workers laid off and their 
health insurance was interrupted. Therefore, they have become 
dependent on governmental systems. We've seen interruptions in 
treatment for their diabetes, hypertension and other chronic 
diseases with disastrous effects.
    The town of Firebaugh wants to get ahead. The people want 
to get ahead. Most of the town has become stabilized now. We 
don't really have as many migrant workers as before. There are 
citizens now.
    Our budget is dependent on the sales tax from the farm 
equipment sales. In the past the drought years have previewed 
for us the inability of the cities to provide basic services. 
In fact, the City of Mendota, our neighbor to the south, lost 
their police force during the last drought and are now 
dependent on sheriff coverage.
    What's the progress that's been made that we can look 
forward to if the water bill is completed? We have in Firebaugh 
400 new low to moderate income homes that are almost completely 
owned by farm workers. Those people are first time homeowners 
that have moved in from the ranches, become productive citizens 
of our town. Those are the people that are most vulnerable to 
water supply changes.
    The city has joined with five other groups in the West side 
of Fresno County to farm the I-5 business development district, 
which is a collaborative for economic growth. The city has been 
able to attract two value-added tomato paste plants within the 
past 2 years. Like the congressman stated, this is the 
lifeblood of our area. Please consider the citizens of 
Firebaugh, the citizens of the West side and the farm workers 
also as we look at these water bills. Thank you.
    [The prepared statement of Dr. Sablan follows:]

   Statement of Marcia E. Sablan, M.D., City Council Member, City of 
                         Firebaugh, California

    I would like to thank Congressman Calvert and the members of the 
Subcommittee for giving me the opportunity to testify. I am grateful to 
Congressman Calvert for spearheading this effort to obtain consensus 
for H.R. 1985 and addressing the difficult problem of water supply.
    I am a Board Certified Family Physician in practice with my husband 
in Firebaugh, California. We were both National Health Service Corp's 
Scholarship recipients assigned to Firebaugh and have lived there for 
almost 20 years. Much of my knowledge of complex water supply issues 
stem from my appointment to the Bay Delta Advisory Committee. I have 
been a member of the Firebaugh City Council since 1983 and Mayor for 10 
years. I would briefly like to talk about the socioeconomic 
demographics of western Fresno County. Firebaugh is a historic river 
town of 6,500 residents, located 50 miles west of Fresno. Firebaugh 
began as a ferry crossing on the San Joaquin river (before the dam) and 
in the late 1800's served as the headquarters for the Miller & Lux 
Ranch, where Valley irrigation began. Firebaugh and other west Valley 
cities (Mendota, San Joaquin) grew along with agriculture.
    Most of Firebaugh's citizens are dependent on agriculture for their 
livelihood: farm workers, ranch foremen, mechanics, secretaries, farm 
equipment sales.
    In my medical practice, we see and feel the effects of agricultural 
water supply. When the water supply cannot be guaranteed and lay-offs 
start, the farmworkers are the most vulnerable. Unemployment problems 
are reflected in society's health. Many workers have lost health 
insurance benefits, resulting in interruption of treatment for 
diabetes, hypertension and many other diseases that when left 
untreated, can produce disastrous effects. Many have increased 
dependence on governmental programs like Medi-Cal and welfare.
    The budget of the City of Firebaugh is heavily dependent on sales 
tax from farm equipment sales. The drought years of the past have 
previewed the decrease in the ability of the cities to provide basic 
services. For example, the City of Mendota lost its police force during 
the last long drought.
    What progress has been made? Almost 400 new low and moderate 
housing units have been developed over the past decade. Most of those 
have been purchased by first time homeowners who previously lived in 
farm housing. This has stabilized the population and allowed the city 
to increase services. Those advances would be the first to be lost with 
a decrease in the agricultural water supply. Five cities on the 
Westside joined together seven years ago to form the I-5 Business 
Development District, collaborating in regional economic development. 
The City of Firebaugh has been able to attract two value added tomato 
factories from this.
    California's water supply affects everyone, but it is the lifeblood 
of the Valley's cities and their citizens.
    Thank you, Congressman Calvert and Subcommittee members for your 
work in introducing this bill to authorize the CalFed projects and 
continue California's vision of a dependable water supply.
                                 ______
                                 
    Mr. Calvert. Thank you, Doctor. Supervisor.

      STATEMENT OF VERN D. MOSS, SUPERVISOR, MADERA COUNTY

    Mr. Vern Moss. Mr. Chairman, members of the Subcommittee, I 
want to thank you for the opportunity to provide testimony on 
behalf of the Regional Council of Rural Counties (RCRC) to the 
Subcommittee regarding California water security.
    I'm the Chairman of the RCRC Water Committee, which is an 
advisory body to our Board of Directors. RCRC is an 
organization of 28 rural Northern California counties. We have 
over 140 elected county supervisors in our membership. Our 
member counties include the San Joaquin, Sacramento and Trinity 
watersheds.
    Collectively, our counties are the source areas for the San 
Francisco Bay-Delta's water. It is from our membership area 
that over 80 percent of the water for the Delta comes. Our 
counties comprise nearly 40 percent of the state's land mass 
and hold significant groundwater resources, over which the 
counties exercise regulatory authority.
    I want to take this opportunity to thank you and your 
Subcommittee staff for the hard work they have put into making 
this a fix, and to help us out here, we on the ground, to fix 
the system that we feel is broken.
    The environment in the San Francisco Bay-Delta is broken. 
We could spend endless and probably pointless hours pointing 
fingers about who did what when to cause this problem. We must 
pass up that temptation.
    We must recognize that the water supply and water quality 
protections for the people of our state is also broken. That 
places our economy and our very future at risk. We have a duty 
to not only proclaim the problem, but to solve it.
    Much of the situations regarding water supply and water 
quality that the Subcommittee heard from witnesses during your 
field hearings in Cerritos on June 18th are the same in the 
north state.
    We support regional sustainability and investment in water 
resources. We believe that the Santa Ana watershed project and 
others like it in the south state are great projects. We in 
RCRC supported funding for these projects even though they were 
at the opposite end of the state. We also could do other 
similar large scale projects in our areas. We just need the 
funding.
    We support new functional surface storage projects. By 
functional we mean ones that supply water locally, as well as 
regionally, and that recognize California's area of origin and 
watershed of origin protections for our part of the state.
    We support ecosystem restoration. However, you must 
recognize that many of our counties are over 75 percent 
federally owned. Therefore, additional land acquisitions for 
ecosystem restoration must consider the economic consequences 
to the communities and local governments.
    The payment in lieu of taxes by the Federal Government is 
critical to our local government coffers in order to provide 
adequate services.
    We support groundwater storage projects, but we point out 
that California law has spoken on the point of who may regulate 
that resource, manage it, and maintain the resource in long-
term, safe yield. It is the counties.
    We support a process that helps achieve these goals, but 
one that leaves the decision making at the local level. The 
best ideas we have found come from the people closest to the 
ground and who have to live with the problem.
    We know how to do the work. We know how to fix what's 
broken. Therefore, a decision making process that allows 
innovative, locally supported solutions is the best one.
    Calling in air strikes in Vietnam from Washington didn't 
work decades ago. Calling in project mandates from Washington 
to California won't work today. Local decisions made by 
accountable, locally elected officials will produce sustained 
solutions.
    Thank you for the opportunity to testify. I will be glad to 
answer any questions that you have.
    [The prepared statement of Vern Moss follows:]

Statement of The Honorable Vern D. Moss, Chair of the Water Committee, 
                   Regional Council of Rural Counties

    MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
    I want to thank you for the opportunity to provide testimony on 
behalf of the Regional Council of Rural Counties (RCRC) to the 
Subcommittee regarding California's Water Security.
    I am the Chairman of the RCRC Water Committee, which is an advisory 
body to our Board of Directors. RCRC is an organization of twenty-eight 
rural northern California Counties. We have over one hundred and forty 
elected County Supervisors in our membership. Our member Counties 
include the San Joaquin, Sacramento and Trinity Watersheds. 
Collectively, our counties are the ``source'' areas for the San 
Francisco Bay-Delta's water. It is from our membership area, that over 
eighty percent of the water for the Delta comes. Our Counties comprise 
nearly 40% of the State's landmass and hold significant ground water 
resources, over which the Counties exercise regulatory authority.
    I want to take this opportunity to thank you and your subcommittee 
staff for the hard work they have put into trying to help those of us 
out here--on the ground--to fix a system that is broken. The 
environment in the San Francisco Bay Delta is broken. We could spend 
endless and probably pointless hours pointing fingers about who did 
what when to cause this problem. We must move past that temptation.
    We must recognize that the water supply and water quality 
protections for the people of our state are also broken. That places 
our economy and our very future at risk. We have a duty to not only 
proclaim this problem but to solve it.
    Much of the situations regarding water supply and water quality 
that the subcommittee heard from witnesses during your field hearing in 
Cerritos on June 18 are the same in the north state.
    We support regional sustainability and investment in water 
resources. We believe that the Santa Ana Watershed Project and others 
like it in the south state are great projects. We in RCRC supported 
funding for these projects even though they were at the opposite end of 
the state. We also could do similar large-scale projects in our areas. 
We just need the funding.
    We support new functional surface storage projects. By functional, 
we mean ones that supply water locally, as well as regionally, and that 
recognizes California's Area of Origin and Watershed of Origin 
protections for our part of the state.
    We support ecosystem restoration. However, you must recognize that 
many of our Counties are over 75% federally owned. Therefore, 
additional land acquisitions for ecosystem restoration must consider 
the economic consequences to communities and local governments. The 
Payment of In Lieu Taxes by the Federal Government is critical to our 
local government coffers in order to provide adequate services.
    We support ground water storage projects, but we point out that 
California law has spoken on the point of who may regulate that 
resource, manage it, and maintain the resource in long-term safe yield. 
It is the Counties.
    We support a process that helps achieve these goals, but one that 
leaves the decision making at the local level. The best ideas we have 
found come from the people closest to the ground and who have to live 
with the problem. We know how to do the work. We know how to fix what's 
broken. Therefore, a decision making process that allows an innovative, 
locally supported solution is the best one.
    Calling in air strikes in Vietnam from Washington didn't work 
decades ago. Calling in project mandates from Washington to California 
won't work today. Local decisions made by accountable, locally elected, 
officials will produce sustainable solutions.
    Thank you for this opportunity to testify and I will be very happy 
to answer any questions.
                                 ______
                                 
    Mr. Calvert. Thank you, Supervisor. I appreciate both of 
your testimony.
    I first want to reiterate that the local decision-making 
process is an extremely important part of H.R. 1985 and 
certainly RCRC's played an important role in making sure that 
we brought that to the attention of both state and local 
officials.
    As you are aware, we have a portion of the bill that in the 
governance--that would allow for the stake holders, obviously 
the locals, the people in here in the state to be a part of 
that process in determining where projects should be or should 
not be built and because we don't predetermine, in spite of 
what some people may have said, whether or not certain projects 
should be completed or not, we think that you all should be a 
part of that process and go through a process of regular order.
    Would you like to further explain surface storage projects 
that potentially could be up in the--your part of the state? I 
know that Mr. Herger has been very helpful in talking about 
various things up in your area. He's done a very good job, by 
the way, for your region.
    Mr. Vern Moss. Maybe I could just talk a little bit about 
the water supply within the area, if that would be all right, 
Mr. Chairman.
    Mr. Calvert. Sure.
    Mr. Vern Moss. The primary challenge for our area is to 
maintain a water supply for our agriculturally based economy, 
while increasing supplies for urban growth occurring within our 
areas. We also must maintain or improve our water quality to 
meet the new standards. This sometimes is very difficult. It 
sounds like it's easy, but when you deal with a delivery system 
in some cases that was created during--shortly after the gold 
rush, it makes it rather difficult.
    Water transfers are a challenge for most of our counties. 
If water is treated as a commodity which can be bought and sold 
and transferred into private sector as if it were a share of 
stock, then California agriculture in our part of the state 
will end. We shouldn't rush to deregulate water and end up with 
a situation similar to where we find ourselves in electricity.
    Linked to transfers is the fact that the only entity in 
California which can use the regulatory power it holds to 
remove water's value and purchase it for use elsewhere is the 
Federal Government and its agencies within the Department of 
Interior of Commerce. The specter of the Federal treasury being 
used to create willing sellers is frightening. Thus, the so-
called assurance that only willing sellers would sell water is 
not a real protection.
    Much of our membership area's population grows at the same 
annual rate as the urban areas of the state. However, we have 
fewer options to develop new water supplies to meet that 
demand. For example, in much of the foothill and mountainous 
areas of the north state there are virtually no opportunities 
for new surface storage projects except on live streams. Thus, 
we must have the flexibility to increase the capacity of some 
reservoirs and build new reservoirs if alternatives should be 
taken off the table until it has undergone a complete analysis 
with review by Congress.
    Groundwater resources in some areas of the north can be 
managed to create a sustained yield which is measurable and 
safe. In other areas there is no true groundwater basin. The 
groundwater, where it exists, is located in small fractures 
within the geologic strata far below the surface. There are, as 
yet, no proven methods to even determine safe yield in those 
areas. In other areas, the groundwater basin is either impaired 
through low water quality or is in overdraft. Nevertheless, 
those resources are protected and secured to the overlying land 
through state and local laws.
    Mr. Calvert. Thank you.
    Doctor, do you want to also expand a little bit on water 
shortage affect upon farm worker housing and certainly in the 
food processing business, uses a substantial amount of water 
also. I know that's a big industry in your area.
    Dr. Sablan. Yes, thank you. I think what I would just like 
to emphasize, Congressman, is that farming is about planning. 
People have to have a dependable supply. They have to know the 
amount of water that they are going to get before they are 
willing to make the investment into planting a field for that 
year. The farm workers are left waiting for that decision every 
year.
    Most people work for a farm labor contractor and that 
contractor works hard to get positions for their people on 
different ranches that are planted. And those water decisions 
are what we see holding up the progress. Sometimes the 
decisions come too late for the farmer to work and to plant 
that field and to hire his people. People move on to different 
places.
    We've seen a new trend even in small towns like Firebaugh 
and Mendota that people are taking off for the Midwest when 
these announcements come in the middle of the winter that there 
won't be farm water. People don't know how to put those 
things--I don't think we know how to put those things into 
perspective when it says in the paper that they are going to 
have a 25 percent water supply for this year. What does that 
mean? Should I wait around and see if I can get a job in April 
or go to Nebraska, go someplace else and destroy the fabric of 
the society that's being built around that area.
    Mr. Calvert. Thank you.
    Mr. Condit. First of all, let me thank both of the 
witnesses and thank them for the work they do on both of their 
committees. I was on the city council and county of 
supervisors. I know how difficult that job is. I'm not sure 
it's as hard as the one I've got today, but it's tough.
    First of all, Doctor, let me commend you and your husband 
for the fine work you do in Firebaugh with farm workers and the 
farmers. You do a great service to the people of that area and 
I know they are appreciative of it. I'm certainly appreciative 
of it as well.
    I also want to acknowledge, you've had a big role in 
helping influence the State of California, particularly 
Governor Davis, to be more aggressive and visionary in a water 
stand for California. You've made presentations before him and 
I know that you impacted him in his view of what it is we 
should be doing and I want to thank you for doing that. You did 
that on all of our behalf.
    The question I have is similar to Congressman Calvert's 
question. We've had several years of chronic shortage in the 
valley. Could you describe sort of the impact of that when you 
have a water shortage on the community, on the economic base of 
the community, what actually happens to that community.
    And if that continues, if we have a shortage every year and 
announce shortage in advance on the West side, what will 
actually happen to Firebaugh from your point of view?
    Dr. Sablan. Thank you. Well, the thing that interests me 
the most probably is the city budget. We have, like I 
mentioned, our sales tax based on farm equipment sales. I think 
that's the first weather vane that shows us that the economy is 
not right when the farm sales go down. The people that work in 
that industry represent our town, pay our taxes, provides our 
police force, provide our fire protection. That's really--the 
property value in the City of Firebaugh is very low in 
comparison to the sales tax revenue. That's our big use.
    But I think the more important thing that I see on a daily 
basis, Congressman Condit, is the people's view of their 
future. We have people that are--a lot of them are first 
generation Americans that want to see progress, want to send 
their kids to school. They do it through farm work. Those of us 
that have paid college tuition know how hard that is and 
imagine doing that on a farm worker's salary and not knowing 
whether we're going to have a job next year or not or how long 
we are going to work.
    Just a little example of how things change. Most women work 
in the spring chopping cotton, cleaning weeds from the cotton 
fields. This year one farmer decided because of the economy not 
to plant cotton and the cotton he did plant he used herbicide 
to clean the weeds with instead.
    I heard that same complaint five times in 1 day in the 
office that I'm not going to work this year because of that 
certain farmer's not planting. That's--people don't have bank 
accounts. They are pretty much living from month to month. 
Those are the people that are very vulnerable in that type of 
thing.
    I think--I can't emphasize enough the dependability, the 
planning that has to go into farming. Everybody else is a spin-
off and dependent on that, but the farmer is the one that needs 
to make the investment.
    Mr. Condit. Thank you. Mr. Chairman.
    Mr. Calvert. Mr. Radanovich.
    Mr. Radanovich. Good morning, Dr. Sablan. I appreciate your 
testimony. I do have a question.
    Can you give me an idea what the current rate of 
unemployment is in Firebaugh?
    Dr. Sablan. Yes. It's in the 20's, 20 percent. Probably 
Firebaugh may be--Congressman, I don't know, may be a little 
bit better off than some of the other communities because we 
have more ranch owners living in Firebaugh. Mendota which is 
just south of us has in the 40's their unemployment rate and 
that would probably be closer to most of the rates in some of 
the towns.
    Mr. Radanovich. As you know, when the state kind of 
reprioritized its water needs as a result of the CVPIA Act that 
was passed in 1992, I think it was, provided then historic 
water shortages to your part of the state. In particular the 
West side's water district, which was under contract, and then 
typically got anywhere between 25 to 45 percent of their 
contracts supply.
    As a result of that, there's been attempts to get that 
water supply back up to 100 percent of contract, but there's 
also been discussion about retiring lands, somewhere up to 
about 200,000 acres in that area due to the antifill contracts 
and also a refusal to open the drains. There's land that has 
become unfarmable with salt.
    What would be the consequences of Firebaugh if there would 
be an eventual buy out of that large amount of land in your 
part of the state?
    Dr. Sablan. Thank you. Well, of course, it would affect 
everything that I talked about. I think it's really important 
for us to remember that we need to replace that somehow. And as 
I mentioned, we have the two tomato paste plants going on in 
Firebaugh now.
    I would love to see in an agreement that's made like that 
reparations, so to speak, to the citizens of that area, an 
investment in value-added agriculture in jobs that can take the 
place of those things. We have enough product in that area and 
that's what we've produced, but typically the western part of 
the Fresno County hasn't added anything to that product and 
that's what I would be asking to see.
    Mr. Radanovich. Would you venture to say what the 
unemployment rate might be if there's a significant supply of 
water in the area, closer to 100 percent of contract?
    Dr. Sablan. Probably be closer to the rest of the state 
then in the 10 percent range I would be guessing. You know, you 
probably know that farm workers have a very hard job and 
sometimes peoples in the second generation don't want to do 
that job anymore and that's why the city council, we've been 
trying very hard to have other diversified--still based on 
agriculture. Like I mentioned, we have plenty of product there, 
but we don't have the investment in the factories and things we 
need to increase the value added.
    Mr. Radanovich. Thank you very much.
    Good morning, Mr. Moss.
    Mr. Vern Moss. Good morning, Congressman.
    Mr. Radanovich. Thank you for being here. Can you give me 
an idea at least in Madera County, and you're welcome to go 
into the outlying areas, too, some of the water projects that 
have been there historically, some that may have been thought 
of recently that might be part of a statewide plan to increase 
water to the State of California?
    Mr. Vern Moss. There's actually two projects under 
consideration right now. One in a permitting process which is 
commonly referred to as the Madera Ranch Project or we call it 
the Old Pico Ranch, which would accommodate underground storage 
and aquifer of up to around 400,000 acre feet. We are--right 
now we are providing a permit so that the individual can have 
an opportunity to apply. We want to be sure that the science 
will work.
    That particular ground is at 13,600 acres and it has not 
too far to move from there to the San Joaquin River. Much of 
what we're doing right now is dependent upon where we stand 
with the river and the restoration projects.
    Second item, very quickly, there's a study proposed as part 
of a Prop 13 grant to study a groundwater banking project and 
what they refer to as gravity four and it's actually in the 
(phonetic) Elisa Water District. That's just in its infancy and 
we don't know quite where that's going to go.
    Mr. Radanovich. And then the discussion has been raising 
Friant Dam in San Joaquin as part of the CalFed project here.
    Has there been much discussion regarding Rogers Crossing on 
the Kings River? That's not in your watershed.
    Mr. Vern Moss. I am aware that there is talk of a four foot 
increase to Friant to increase capacity. The last I heard that 
nothing had gone forward on that. I know that there was more 
progress on Shasta than on Friant.
    Mr. Radanovich. Thank you.
    Mr. Calvert. Thank you. Mr. Dooley.
    Mr. Dooley. Thank you. Dr. Sablan, it's good to see you 
here. I compliment you on the work that you've done in terms of 
providing not only health care for a lot of the farm worker 
families in that region, as well as the I-5 corridor in the 
work that you've done there. We're seeing some real benefits in 
terms of the ability to meet some of the real social and human 
costs that are affected there.
    I guess one of the areas of this legislation that has 
received some attention deals with the assurances, and that is 
the portion which would try to insure that we would provide 70 
percent of contracted water supply to contractors south of the 
Delta, which would obviously encompass the I-5 corridor.
    I guess from your perspective, just counting the impact 
that it would have to your local economy, if you would have 
that certainty in a normal year, that 70 percent of deliveries.
    Dr. Sablan. Yes, of course, the farmers would be very, very 
happy with that. But I think, Congressman, like you mentioned, 
as far as business investment, I think that's the thing the 
people look at. What's the future of building homes in that 
area? What's the future of building tomato paste plants in that 
area, if it's going to be every single year that same 
uncertainty?
    So I think that you are saying it exactly correctly that 
that's the thing that would give us the foundation to look for 
this type of economic development if we had that assurance that 
the farming industry would have its supply that's needed.
    Mr. Dooley. Supervisor Moss, that provision obviously has a 
greater impact on Fresno County and Madera County.
    Is that a provision that you would also support?
    Mr. Vern Moss. Would you restate it?
    Mr. Dooley. The portion of the bill that deals with 
trying--that says that in normal years, which we have a 
criteria of normal rainfall years, that we would commit to try 
to provide 70 percent of water deliveries south of the Delta, 
with the provision that we wouldn't harm any other water user's 
interest.
    Mr. Vern Moss. Well, I think I'd support that, yes, 
Congressman.
    Mr. Dooley. The other significant provision in the 
legislation deals with the investigation of potential water 
storage, both above ground as well as underground. And I was 
unclear in terms of the position of the Board of Supervisors in 
Madera County on studies that would investigate the potential 
of gravity four, is this--does the board have a position on 
that? Are you supportive of a study going forward to understand 
the full potential of that?
    Mr. Vern Moss. At this particular point in time, the board 
does not have a position. It is agendized for Tuesday, item 
four on the agenda, and it will come from the Water Oversight 
Committee without recommendation just for consideration.
    Mr. Dooley. Do you personally have a position on that?
    Mr. Vern Moss. I have not taken a position until I hear 
what testimony is going to be given. I have talked to Mr. 
Halcan (phonetic) in fact as late as yesterday to talk about 
some of the prospects of that and he was asking me the same 
question. I said until it comes before the board, I have not 
taken a position.
    Mr. Dooley. Just for the record, someone who represents--I 
represent part of Kern County, too, and we were able to 
establish the Kern County water basin has the potential now to 
store a million acre feet of what we have almost filled up.
    In a year such as this where we only are seeing about 45 
percent of Federal deliveries and 25 percent of state 
deliveries, this has been one of the best investments we have 
made. Hopefully Madera County, as they look forward to this, 
can spend some time understanding the benefits that were 
accrued in Kern County both with the project on the Kern River 
or Kern Water Bank as well as some of the work that the 
syntropic irrigation has done just a little bit further north 
of there.
    Mr. Calvert. Ms. Napolitano.
    Mrs. Napolitano. Thank you, sir.
    I'm very impressed, Dr. Sablan, by some of your background. 
Coming from a municipal citizen or a government spot before, I 
understand some of the issues that you're faced with. It is 
quite a difference between the metro area that I come from to 
the area that you represent and I'm sure that a lot of the 
issues are very much the same.
    One of the questions that I would like to know whether or 
not you have underground water storage. Have you looked at what 
is happening to your area due to the pesticides that might 
affect your clients, your patients, and how does the city 
provide for cyclical drought delivery of water surfaces to your 
community? I'm not just talking farming. I'm talking about the 
residents.
    Dr. Sablan. Thank you. The City of Firebaugh has a good 
water supply underneath the clayed levels. We haven't had that 
problem with our own water supply. We don't use--unlike some of 
the other cities in the area, we've been lucky enough to have 
only well water to be used. Dos Palos north of us I believe is 
using surface water and enters exactly into the problems that 
you're talking about.
    I think our position on the San Joaquin River affords us to 
have--we don't use San Joaquin River water, but affords us the 
replenishment of the wells that we've used traditionally and so 
our city water supply is in very good condition and has never, 
to my knowledge, been contaminated with pesticides.
    Surface water is another whole complete problem. I think I 
don't understand this completely, but I think it has to do with 
the clay layer in that area.
    Mrs. Napolitano. The filters.
    Dr. Sablan. Yes, filters the water. We're in a good 
position as far as that is what I'm told.
    Mrs. Napolitano. You have no problems with your wells at 
all?
    Dr. Sablan. We haven't to this moment had one. We have five 
active wells right now. It sounds like a small amount, but 
that's enough to provide. And we also have room for expansion.
    That was one of the parts that is very difficult in the I-5 
business development corridor is to provide water services. 
Every imaginative tomato paste plant uses a lot of water. 
That's been an important infrastructure project that the 
Federal and state government has helped to provide that area is 
to provide water infrastructure. Right now fortunately enough 
we have the water supply to attract other industries.
    Mrs. Napolitano. Are you at any point utilizing or 
providing recycled water?
    Dr. Sablan. Yes. One of the tomato paste plants that we 
have, the Tomatec is the name it, we actually use that water 
for irrigation on the city's--the citizens refer to it as a 
sewer farm. It's not really a sewer farm. It's the land that 
was bought along with the sewer farm.
    So that tomato washing water is used for irrigation of an 
alfalfa field. Interestingly enough, what came out of that was 
that that land has very little need for any type of fertilizer, 
pesticides because of that--the products that come--the natural 
products that come off the tomato. It's been an interesting 
project.
    Mrs. Napolitano. Very good. Mr. Moss, is there any areas 
that you have an issue with, the recycling of water or putting 
wells back into service that have been contaminated or closed?
    Mr. Vern Moss. We have no problem with the contaminated 
wells. I would make a comment, if it's appropriate. The 
concerns that local residents have had on the Madera Ranch 
Project has more to do with the aquifer and whether or not the 
science will work on it. That's why it's rather important that 
we pursue a permitting process, so that we're sure that it 
doesn't do damage to adjacent lands.
    The concern of bringing 400,000 acres into an area for 
storage during wet season could very well cause a flow outward 
rather than downward and it's surrounded by permanent crops of 
fruit trees, which would be damaged. So we're waiting to see 
what the science is to see if it works for us.
    Mrs. Napolitano. One of the problems that we're beginning 
to face is that EPA is going to be mandating sanitation 
districts to bring forth treatment to recycle water. That is 
going to mean additional establishment of treatment plants for 
the fourth treatment, which will be in the billions of dollars 
and you need to--one of the things that I would want to see 
happen is that we can address that through this bill so that if 
it does happen, and we are mandated in California, that is, 
that we have the ability to assist municipalities that have 
treatment plants, be able to utilize that--the bill to assist 
in building or addressing the needs of that fourth treatment 
because if we're going to have to cut our water consumption by 
the year 2015, then we need to be able to make good use of the 
recycled water for everybody.
    Thank you, sir.
    Mr. Calvert. Thank you. And I want to thank both of you for 
your excellent testimony and answering our questions. We 
appreciate your coming out here on a beautiful Saturday 
morning. With that we'll be introducing our next panel.
    Our next panel--we're setting up the chairs. I think we're 
going to be splitting between the two areas here--is Mr. David 
Guy, the Executive Director of the Northern California Water 
Association; Mr. Tom Birmingham, the General Manager, General 
Counsel for the Westlands Water District; Mr. Richard Moss, 
General Manager of the Friant Water Users Authority; Mr. Dan 
Nelson, General Manager of the San Luis and Delta-Mendota Water 
Authority; Mr. Chris White, General Manager, Central California 
Irrigation District, San Joaquin River Exchange Contractors; 
and Mr. John Herrick, General Manager of South Delta Water 
Agency.
    Mr. Guy, you may begin. I think you may have heard the 5-
minute rule. Especially a panel of this size, please try to 
stay within the 5-minute rule. You may begin.

STATEMENT OF DAVID GUY, EXECUTIVE DIRECTOR, NORTHERN CALIFORNIA 
                       WATER ASSOCIATION

    Mr. Guy. Thank you, Chairman Calvert. Members of the 
delegation, thank you for coming to Modesto today and the great 
Central Valley. I appreciate the opportunity to be here today 
and to provide a perspective on the northern part of the great 
Central Valley, the Sacramento Valley, and some of the great 
things that are going on in the Sacramento Valley.
    I'm the executive director for the Northern California 
Water Association. We represent about 70 water suppliers 
throughout the Sacramento Valley irrigating about 850,000 
acres.
    You know about a lot of the great things that have gone on 
in the Sacramento Valley. I think all of you have been up there 
about one time or another and seen the progress that we have 
made to achieve water reliability and to provide benefits for 
the ecosystem and to protect the endangered fish in the 
Sacramento Valley as well as provide water for refuges.
    Today I'd like to talk about an innovative program for the 
Sacramento Valley, which I believe is a very significant 
development and is really a new way of doing business in 
California.
    I think you all are generally aware that in the last year 
we have been working with a lot of water users from throughout 
the state and one of the points that brought us together was 
what could have been a very ugly water rights proceeding before 
the State Water Resources Control Board. And rather than going 
to a proceeding where we killed each other, we decided to try 
to work together and to try to increase the water security for 
folks not only in the Sacramento Valley, but also in the 
remainder of the Central Valley, in Southern California and the 
Central Coast. What came out of this is what we are now calling 
the Sacramento Valley Water Management Agreement.
    What that does is really give rise to this idea of 
integrated water management in the Sacramento Valley. That 
includes a range of things. It includes, of course, fish 
passage improvements, which you're generally aware of, water 
use efficiency. It includes new offstream storage at Sites 
Reservoir, an enlarged Shasta reservoir. It talks about flood 
protection. It talks about environmental protection and a whole 
range of programs in an integrated manner.
    We believe and we think we're going to be able to show here 
over the next several years that if we can manage the system in 
the Sacramento Valley in an integrated manner, that we will 
foremost, because of course, that is in our interest, we are 
going to be able to provide water security for people within 
the Sacramento Valley and for the environment and the refuges 
within the Sacramento Valley. And at the same time this will 
help improve the water supplies and the water quality in the 
Bay-Delta and that, of course, will benefit everybody in the 
rest of the state.
    We are now developing work plans through this process to 
make this real and to try to--to flush this out a little bit 
and put it onto paper to show exactly what we mean. I think 
it's a very significant development.
    We have a tremendous partnership, not only with the Bureau 
of Reclamation, DWR, in this process with a lot of the folks 
sitting around the dais right now, from again the San Joaquin 
Valley, from Central Coast and Southern California, as well as 
the Delta.
    So we are very much looking forward to working in that 
integrated program. I think there's three things that I would 
like to suggest that I think are going to be important to make 
this integrated program a reality. I'll just touch on those 
very briefly.
    The first is that I think this idea of empowering regional 
solutions is going to be critical. There's been a lot of 
discussion about regional solutions and I think this is a 
classic example of an opportunity to empower regional and local 
solutions to water in California. Of course, that's where the 
success has always been in California and this is no different.
    The second thing, of course, is I think we need to make 
major investments in infrastructure and that I think goes 
without saying. If we're going to have this integrated program, 
we're going to need to have the investments that are necessary 
to move that program forward.
    And then the third and the final piece of this I believe is 
we're going to need to have the regulatory streamlining and 
reform that I believe is necessary to put a program of this 
magnitude together and to be able to put all the pieces 
together in a coordinated and integrated fashion, so that we 
can in fact achieve all the multiple benefits we've talked 
about for the Sacramento Valley, for the environment, and for 
the water users in the rest of the state.
    I want to commend you in H.R. 1985, all of you in your 
efforts to move this forward. I believe it's an excellent bill. 
We really look forward to working with you to make this bill a 
reality and thank you for your efforts and time you've been 
spending in the Central Valley and hope you'll continue to work 
with us in the Sacramento Valley to make our integrated program 
a reality.
    [The prepared statement of Mr. Guy follows:]

  Statement of David J. Guy, Executive Director, Northern California 
                           Water Association

    Mr. Chairman and members of the Subcommittee, my name is David Guy. 
I am the Executive Director of the Northern California Water 
Association (NCWA). NCWA is a geographically diverse organization, 
extending from California's Coast Range to the Sierra Nevada foothills, 
and nearly 180 miles from Redding to Sacramento. Our members rely on 
the waters of the Sacramento, Feather, Yuba and American Rivers, 
smaller tributaries and groundwater to irrigate nearly 850,000 acres 
that produce every type of food and fiber grown in the region. Many of 
our members also provide water supplies to state and federal wildlife 
refuges, and much of this land serves as important seasonal wetlands 
for migrating waterfowl, shorebirds and other wildlife.
    We welcome the opportunity to provide the Northern California 
perspective on water security and to present both the opportunities and 
challenges we now face. The Subcommittee's interest in California water 
security is appropriate and very timely given the importance of a 
successful resolution to the environmental and water supply problems in 
the Sacramento San Joaquin River Delta and San Francisco Bay (Bay-
Delta). The Bay-Delta is a tremendous economic and environmental 
resource to California and the nation, and there is much at stake in 
how we implement the numerous ecosystem restoration and water 
management actions.
    For many years, the Sacramento Valley (the northern half of the 
Great Central Valley) has been targeted as the primary source of water 
to meet California's burgeoning demands. Water users and landowners in 
the Sacramento Valley have also faced restrictions under the Endangered 
Species Act (ESA), the Central Valley Project Improvement Act (CVPIA) 
and other environmental restrictions. These actions have posed many 
challenges for Northern California water users and their ability to 
provide secure water supplies for the farms, cities and wildlife 
refuges in Northern California. Rather than focus on these challenges 
(which we could do in painstaking detail), we believe it is more 
constructive to focus on the exciting solutions that are currently 
being advanced by and from within the Sacramento Valley. These projects 
or programs, if properly implemented, will go a long way to provide 
water security not only for Northern California, but for other regions 
in California as well.

AN INTEGRATED WATER MANAGEMENT PROGRAM FOR THE SACRAMENTO VALLEY WILL 
        IMPROVE WATER SUPPLY, QUALITY AND RELIABILITY
    Northern California water users have committed to help improve 
water supply reliability, water quality and environmental benefits. The 
Sacramento Valley's initiative and effort to help protect salmon and 
other aquatic species is unprecedented and is now recognized as one of 
the most exciting and progressive voluntary salmon restoration efforts 
in the United States. Today, more than a dozen NCWA members, 
representing over 500,000 acres of irrigable land, have either 
completed or are in various stages of developing screens to prevent 
fish entrainment at their diversions. Many NCWA members have also 
initiated far-reaching efforts to refurbish fish ladders, construct 
siphons, remove dams, create habitat conservation plans and implement 
other habitat improvement projects to enhance the environment, while at 
the same time improving water supply reliability.
    Additionally, NCWA and the Northern California water users have 
embarked on an integrated water management program that has broad 
support from water suppliers and local governments throughout the 
Sacramento Valley. This integrated program includes these fish passage 
improvements (fish screens and siphons), groundwater management, 
evaluation of the Sites off-stream reservoir, flood protection, water 
use efficiency programs, potential expanded storage in Lake Shasta, 
intra-regional water transfers and exchanges, and watershed management. 
(See attached map.)
    During the past year this integrated program led to an 
unprecedented water rights settlement among water users throughout 
California. This settlement, now known as the Sacramento Valley Water 
Management Agreement, and the ensuing integrated water management 
program, avoided the extremely contentious Phase 8 Bay-Delta water 
rights proceedings before the State Water Resources Control Board. The 
parties to the agreement include NCWA, the Bureau of Reclamation (BOR), 
the Department of Water Resources (DWR), the federal contractors in the 
San Luis and Delta-Mendota Water Authority, the State Water 
Contractors, and the Contra Costa Water District. This proceeding would 
have pitted these parties from throughout the state against each other. 
This integrated program will now serve as the heart of a regional 
strategy for the Sacramento Valley.
    The Sacramento Valley Water Management Agreement and integrated 
water management program focus on meeting 100% of the water supply 
demands within the Sacramento Valley during all year types, both now 
and into the future. Northern California water users believe that, once 
the full demands within the Sacramento Valley are met, this integrated 
program will help make water supplies available for use in and beyond 
the Bay-Delta to meet water quality standards, and provide for export 
water users in the San Joaquin Valley, Southern California, the Central 
Coast, and as assets for the Environmental Water Account (EWA) and 
other environmental programs.
    The parties to the agreement will, during the next five months, 
prepare a joint work plan for short-term Sacramento Valley water 
management projects to implement the agreement that will describe this 
integrated program in more detail. Work plans on longer-term projects 
will follow.

SIGNIFICANT EFFORTS ARE NOW NECESSARY TO IMPROVE WATER SECURITY FOR THE 
        SACRAMENTO VALLEY AND CALIFORNIA.
    To improve water security for the Sacramento Valley, leadership is 
now critical to empower regional solutions, provide for infrastructure 
throughout California and streamline and reform the regulatory process 
to accomplish these goals.
     Empower a Regional Solution For the Sacramento Valley
    California history has shown that solutions to water problems in 
the state have typically been successful at the local and regional 
level. Very few solutions fit every part of our extremely diverse 
state. Put differently, there have been few instances when a top-down, 
one-size-fits all, bureaucratic policy or law has helped the state or 
has been implemented. Instead, California water users are now poised to 
advance a series of regional solutions and local partnerships that will 
serve California's needs for many years to come. The integrated program 
described above is an exciting example of a regional solution for the 
Sacramento Valley, but it can only be implemented with state and 
federal leadership empowering local interests to take the actions 
necessary for these programs to succeed. Any bureaucratic efforts to 
impose top-down solutions, like past efforts, are doomed to failure and 
have the potential to destroy the tremendous progress that has been 
made on these regional solutions.
    Like the Sacramento Valley integrated program described above, 
every regional strategy will include the appropriate mix of 
infrastructure needs, storage, conveyance, water transfers and 
exchanges, fish passage improvements, water conservation and 
efficiency, groundwater management, flood protection, watershed 
management and environmental improvements. To fully empower these 
regional solutions requires state and federal funding and the 
regulatory streamlining necessary to implement these programs.
     Provide for Infrastructure Needs in California
    The California Business Roundtable has estimated that California 
must invest $90 billion on infrastructure over the next ten years in 
order to meet the demands of a state growing by nearly 600,000 people a 
year. Perhaps the most critical infrastructure elements include the 
ability to store, convey and better manage our water resources on 
behalf of cities, farms, and fish and wildlife.
    To provide for these water infrastructure needs will require an 
aggressive funding program to facilitate and fully empower regional 
solutions. There is an important role for both Congress and the state 
legislature to ensure that appropriate funding is allocated in a manner 
that achieves noticeable results. It is also important that the 
regional and local entities are accountable for using these funds to 
implement the regional solutions in an effective and cost-efficient 
manner.
     Streamline and Reform the Regulatory Process
    With nearly18 federal and state agencies under the respective 
executive branches that dictate California water policy, it is critical 
to coordinate and ultimately streamline the plethora of agencies with 
jurisdiction over water resources in California.
    The framework to create CALFED in June 1994 called for cooperation 
and collaboration between the federal and state agencies that oversee 
water in California. It is essential that these agencies continue to 
work together in this manner. Over the past 7 years, CALFED has evolved 
from a concept to streamline agency efforts to a massive bureaucratic 
program. For CALFED to be successful as it transitions from a planning 
program to an implementation agency, it must move from a top-down 
bureaucratic organization to an organization that facilitates and 
fosters a series of regional strategies with local control and 
governance. Most notably, it must streamline the regulatory process to 
assure that these programs will be implemented. Specific examples 
include the facilitation of intra- regional water transfers and 
exchanges and expedited permitting by the U.S. Army Corps of Engineers 
and Environmental Protection Agency.
    Significantly, this means that CALFED and its member agencies will 
serve in a more limited, albeit more effective role, to advance water 
and environmental policy in the state. It is also means that CALFED 
will serve a critical role to coordinate regional strategies to ensure 
that they fit together in a manner that provides statewide benefits, 
and also provide a broad-based governance strategy and oversight 
capability to ensure appropriate and efficient implementation of all 
CALFED program elements.
                                 ______
                                 
    [An attachment to Mr. Guy's statement follows:]
    [GRAPHIC] [TIFF OMITTED] T3149.021
    
    Mr. Calvert. Thank you, Mr. Guy.
    Mr. Birmingham.

 STATEMENT OF TOM BIRMINGHAM, GENERAL MANAGER/GENERAL COUNSEL, 
                    WESTLANDS WATER DISTRICT

    Mr. Birmingham. Mr. Chairman, members of the Committee, 
good morning. I appreciate the opportunity to appear before you 
today to discuss an issue which is of vital importance to the 
State of California.
    At the outset thank you for introducing H.R. 1985. 
Westlands strongly supports this legislation and is grateful 
for the leadership that each of you has demonstrated through 
the introduction of this bill. It is apparent from the bill 
that you and your staff worked hard to develop legislation that 
would insure that the CalFed program is implemented in a 
balanced, innovative manner that links progress on 
environmental restoration and enhancement with progress on 
water supply and water qualities improvements.
    Westland's Water District serves irrigation water to 
605,000 acres of land on the West side of the San Joaquin 
Valley and Fresno and Kings counties. The demand for irrigation 
water in Westlands is 1.4 million acre-feet per year.
    Westlands is one of the most fertile, productive and 
diversified farming regions in the nation. Westlands farmers 
produce over 50 different crops worth more than a billion 
dollars. Like every other region of the area west the ability 
of our farmers to produce crops and generate economic activity 
depends upon the availability of an adequate reliable source of 
water.
    Historically demand in Westlands has been satisfied through 
the use of groundwater, water made available from the Central 
Valley Project pursuant to contracts with the United States for 
the delivery of 1.5 million acre feet and annual water 
transfers.
    Prior to 1981 our water supplies were reduced only once in 
the CVP, during the 1977 drought period, 1977 being the driest 
period in California on record. However, in 1991 a new era of 
project operations began.
    In 1991, the winter-Chinook salmon was listed as a 
threatened species and new limitations were imposed on 
operation of the Central Valley Project. In 1992, the Delta 
smelt was listed as a threatened species and again new 
limitations were imposed on the operations of the CVP. In 1992 
the Central Valley Project Improvement Act was enacted.
    Although one of the purposes of this act was to achieve a 
reasonable balance among competing demands for the Central 
Valley uses of water, the act has been implemented in a way 
that has added to the environment. This water was taken away 
from ranches, farmers and businesses that relied upon its 
availability for decades.
    Moreover, the entire burden of the water supply reductions 
resulting from implementation of the Central Valley Project 
Improvement Act have been borne entirely by the West side of 
the San Joaquin Valley. For this reason the reliability of 
water supplies for agricultural water users on the West side of 
the valley has gone from 92 percent on average in 1991 to less 
than 50 percent today.
    The impact of Implementing CVPIA is best demonstrated by 
the allocations to contractors last year, the sixth year of the 
wettest period on record in California. Last year CVP 
contractors south of the Delta received only 65 percent 
allocation notwithstanding the optimum water supply conditions 
that existed in this state.
    Governor Gray Davis and former Secretary Bruce Babbitt 
recognized the disproportionate nature of these actions in June 
2000 when they signed the document entitled, ``California's 
Water Future, A Framework For Action.'' The framework 
accurately noted that agricultural water contractors had been 
disproportionately affected by regulatory actions.
    The key commitment in the Framework for Action was a 
provision that in normal years south-of-Delta Central Valley 
agricultural contractors increased water supplies from 60 to 70 
percent.
    Westlands and other San Joaquin Valley agricultural 
contractors supported the framework based upon this commitment, 
but somehow between signing the Framework for Action in June 
2000 and the issuance of the Record of Decision in August 2000, 
that commitment became ambiguous.
    In response to diminished water supplies from the project, 
Westlands farmers have substantially modified their irrigation 
techniques. First, unreasonable reliance has been placed upon 
groundwater. For instance, last year farmers in Westlands 
extracted more than 337,000 acre feet of water for irrigation. 
This is more than double the safe yield of the project. Excuse 
me, of the groundwater basin.
    In addition, farmers in Westlands have gone to more 
efficient water irrigation techniques and today farmers in 
Westlands have one of the highest seasonal efficiency 
applications in the region, over 83 percent.
    The loss of water for irrigation, as you've heard here 
today, also means loss of jobs, both on farm jobs and jobs in 
the communities that provide goods and services to farmers in 
Westlands. For instance, this year, Westlands estimates that 
because of inadequate water supplies more than 70,000 acres 
will be fallowed. This represents a loss of 105 million dollars 
in crop values and a loss of 367 million dollars to the 
regional economy. But in human terms it means a loss of more 
than 875 on farm jobs and an unknown number of jobs in the 
local communities.
    As I indicated at the beginning of my remarks, the CalFed 
program has the potential to be a great benefit to the State of 
California. Congress can help solve California's water problem 
by authorizing a CalFed program that will give equal priority 
to restoring Bay-Delta watersheds, restoring water supplies 
that have been lost over the last decades and protecting and 
enhancing water quality from municipal investment agencies.
    In its present form H.R. 1985 will ensure that the CalFed 
program is implemented in a balanced manner. Westlands looks 
forward to working with the members of the Committee toward a 
passage of this important legislation.
    Thank you, and I would be happy to answer any questions 
that you might have.
    [The prepared statement of Mr. Birmingham follows:]

  Statement of Thomas W. Birmingham, General Manager/General Counsel, 
                        Westlands Water District

    Mr. Chairman, members of the Committee: Good morning. I am Thomas 
Birmingham, General Manager/General Counsel of Westlands Water 
District, and I appreciate the opportunity to appear before you today 
to discuss an issue of vital importance to the State of California, 
indeed, the nation.
    At the outset, I would like to extend our appreciation for your 
introduction of H.R. 1985, the Western Water Enhancement Security Act. 
Westlands strongly supports this legislation and is grateful for the 
leadership that you and your colleagues have demonstrated through 
introduction of this bill. This legislation would ensure that the 
CALFED Program is implemented in a balanced and innovative manner that 
links progress on environmental restoration and enhancement with 
progress on water supply and water quality improvements.
    Particularly important to west side agricultural water users are 
the bill's provisions ensuring a 70% allocation to south-of-Delta 
agricultural Central Valley Project service contractors in normal 
years, increasing limits on pumping at the Harvey O. Banks Pumping 
Plant to 8200 cubic feet per second pursuant to the Record of Decision, 
and providing direction on the management of the Environmental Water 
Account. Inclusion of these provisions in H.R. 1985 will help sustain 
agriculture in the San Joaquin Valley, an industry that provides 
significant benefit to the state and the nation.
    Westlands Water District is a California water district that serves 
irrigation water to a 605,000 acre area on the west side of the San 
Joaquin Valley in Fresno and Kings counties. The District averages 15 
miles in width and is 70 miles long. The demand for irrigation water in 
Westlands is 1.4 million acre-feet per year. Historically, that demand 
has been satisfied through the use of groundwater, water made available 
to the District from the Central Valley Project under contracts with 
the United States for the delivery of 1.15 million acre-feet, and 
annual transfers of water from other water agencies.
    Westlands is one of the most fertile, productive and diversified 
farming regions in the nation. Rich soil, a good climate, and 
innovative farm management have helped make the area served by 
Westlands one of the most productive farming areas in the San Joaquin 
Valley and the nation. Westlands farmers produce over 50 different 
commercial fiber and food crops sold for the fresh, dry, canned or 
frozen food markets; domestic and export. A list of the crops grown in 
the District last year and the acres planted to each crop is attached 
hereto as Appendix A.
    Westlands estimates that the value of crops produced by farmers in 
the District exceeds $1 billion per year. Using a well-accepted 
economic assumption that every $1 produced on-farm generates another 
$3.50 in the economy, Westlands farmers produce nearly $3.5 billion in 
economic activity annually. Like every other region of the arid west, 
the ability of our farmers to produce crops and generate this economic 
activity depends on the availability of an adequate, reliable source of 
water.
    As indicated above, farmers in Westlands have relied on three 
sources of water: (1) groundwater; (2) water made available to 
Westlands from the Central Valley Project under its water service 
contracts with the United States; and (3) annual water transfers. Water 
deliveries from the Project began in 1967. Until 1991, those deliveries 
were reliable, and in fact were the principal source of water for 
irrigation within Westland's. From 1967 to 1991, our water supplies 
were reduced only two times; in 1977 and 1978. This reduction was a 
result of the extraordinary drought conditions in 1977, the driest year 
on record in California. However, in 1991 a new era of Project 
operations began.
    In 1991, the winter-Chinook salmon was listed as a threatened 
species under the federal Endangered Species Act. Because of this 
listing, new restrictions were imposed on the Project. In 1992, the 
Delta smelt was listed as a threatened species under the federal 
Endangered Species Act, and additional restrictions were imposed on the 
Project to provide protection to this listed species. Also in 1992, the 
Central Valley Project Improvement Act was passed by Congress and 
signed into law by former President George Bush.
    The purposes of this Act were:
        (a) Lto protect, restore, and enhance fish, wildlife, and 
        associated habitats in the Central Valley and Trinity River 
        basins of California;
        (b) Lto address impacts of the Central Valley Project on fish, 
        wildlife and associated habitats;
        (c) Lto improve the operational flexibility of the Central 
        Valley Project;
        (d) Lto increase water-related benefits provided by the Central 
        Valley Project to the State of California through expanded use 
        of voluntary water transfers and improved water conservation;
        (e) Lto contribute to the State of California's interim and 
        long-term efforts to protect the San Francisco Bay/Sacramento-
        San Joaquin Delta Estuary;
        (f) Lto achieve a reasonable balance among competing demands 
        for use of Central Valley Project water, including the 
        requirements of fish and wildlife, agricultural, municipal and 
        industrial and power contractors.
    The CVPIA has been implemented by the Department of the Interior in 
a manner that has reallocated more than 1,000,000 acre-feet of Project 
water away from farms, ranches and business that relied upon this water 
for decades to the environment--for the restoration and enhancement of 
fish and wildlife. Moreover, virtually all of the water supply 
reductions that have resulted from implementation of the Act have been 
imposed on south-of-Delta Central Valley Project agricultural water 
service contractors. The reliability of water supplies for these 
contractors, including Westlands, has gone from 92% on average in 1991 
to 50% today. The impact of implementing the CVPIA is best demonstrated 
by allocations to south-of-Delta agricultural water service contractors 
last year, the sixth wet year of one of the wettest periods on record. 
In 2000, these contractors received only a 65% allocation. The 
disproportionate impact of these regulatory requirements on the water 
supplies of west side farmers was recognized by Governor Gray Davis and 
former Secretary of the Interior Bruce Babbitt in June 2000, when they 
signed the CALFED document entitled ``California's Water Future, A 
Framework for Action.''
    The Framework for Action correctly noted that Westlands and other 
San Joaquin Valley agricultural water contractors have been 
``disproportionately affected by recent regulatory actions.'' A key 
commitment in the Framework was a provision stating that in a normal 
water year, south-of-Delta Central Valley Project agricultural 
contractors would receive 65 to 70 percent of their contractual water 
supplies.
    Westlands and other San Joaquin Valley agricultural contractors 
supported the Framework for Action based on this commitment. But 
somehow between the signing of the Framework for Action and the issuing 
of the formal Record of Decision, that commitment was amended, and 
Westlands and other contractors lost more of their allocation.
    In response to diminished water supplies from the Central Valley 
Project, Westlands' farmers have substantially modified their 
irrigation techniques. First, more reliance has been placed on the use 
of groundwater. In 2000, farmers in Westlands pumped more than 337,000 
acre-feet of groundwater for irrigation. This is more than double the 
USGS estimate of the safe yield of the groundwater basin, 135,000 acre-
feet. The extent to which farmers relied on groundwater last year is 
disturbing because precipitation and runoff in 2000 were above normal. 
Sound principals of conjunctive use dictate that in wet or above normal 
years, groundwater use should be reduced to allow the groundwater table 
to recover.
    To maximize the limited supplies, farmers in Westlands have also 
converted to more efficient irrigation systems. The conversion to more 
efficient irrigation methods is depicted in the following table:
[GRAPHIC] [TIFF OMITTED] T3149.022

    Since 1996 Westlands has encouraged this conversion to more 
efficient irrigation techniques by offering low-interest loans to its 
farmers for the purchase of more efficient irrigation systems. By using 
improved plant varieties, sprinklers, drip and micro-irrigation, 
improved furrow and sprinkler management and water recycling, Westlands 
farmers continue to have one of the highest seasonal application 
efficiency ratings in the nation, over 83 percent District-wide.
    The value of water from the Central Valley Project includes the 
production value of the water, the employment generated by farming of 
land irrigated with the water and the income generated for the District 
by water charges based on the water delivered. The average quantity of 
water needed to produce a crop on land within the District is 
approximately 2.5 acre-feet/acre. Therefore, unless there is a 
replacement supply, for every 1,000 acre-feet of CVP water supply 
reduction, approximately 400 acres of land must be removed from 
production. A conservative estimate of average annual gross crop value 
is $1,500 per harvested acre of land within the District. So the lost 
revenue resulting from the fallowing of 400 acres is approximately 
$600,000. And using the same economic assumption that every $1 produced 
on-farm generates another $3.50 in the economy, this impact to the 
broader economy is $2.1 million. In addition, approximately one full 
time farm worker is associated with every 80 acres of land in 
production. Therefore, for that same 400 acres removed from production, 
five people will probably become or remain unemployed.
    This year Westlands has received a 45% allocation of its Project 
water supply, and it estimates that because of inadequate water 
supplies, more than 70,000 acres will be fallowed. This represents a 
loss of $105,000,000 in lost crop values and a loss of $367,000,000 to 
the regional economy. In human terms, it means a loss of 875 on-farm 
jobs, and an unknown number of jobs in the communities and businesses 
that provide services and equipment to farmers in Westlands.
    This analysis is consistent with a 1996 study by the California 
Institute of Rural Studies entitled 93640 at Risk: Farmers, Workers and 
Townspeople in an Era of Water Uncertainty. This profound study 
reported a decline in farm and packing wage incomes of $4.8 million, 
and the loss of 360 to 720 farm jobs due to drought induced changes in 
crops during a six-year period from 1987-92. The study also showed an 
11 percent drop in retail sales, and a drop of nearly 30 percent in 
farmland values compared to increased farmland values in other areas of 
Fresno County.
    The CALFED Program has the potential to solve California's greatest 
water problem. To succeed, the Program must be implemented in a 
balanced, innovative manner that links progress on water supply 
improvements with progress on environmental restoration and progress on 
water quality improvements. This is critically important because 
notwithstanding the potential benefits to all Californians that could 
result from the CALFED Program, if it is implemented in a way that 
gives priority to any one of its many purposes, the Program will fail.
    Congress can help CALFED solve California's water problem, and in 
so doing, restore some of the water supplies that Westlands has lost 
over the last decade. In its present form H.R. 1985 will ensure the 
CALFED Program is implemented in a balanced manner that will ensure 
success. Westlands looks forward to working with the members of the 
Committee and its staff toward passage of this important legislation.
    Thank you.
                                 ______
                                 
    [An attachment to Mr. Birmingham's statement follows:]
    [GRAPHIC] [TIFF OMITTED] T3149.023
    
    Mr. Calvert. Thank you, John. Mr. Moss.

STATEMENT OF RICHARD MOSS, GENERAL MANAGER, FRIANT WATER USERS 
                           AUTHORITY

    Mr. Richard Moss. Mr. Calvert, Chairman Calvert and members 
of the Committee, I as well wanted to welcome you to the 
Central Valley and thank you very much for taking time out of 
your potential holiday weekend to spend with us and to discuss 
the needs for water security in the region.
    I'm Richard Moss. I'm the general manager at least for the 
time being of the Friant Water Users Authority which represents 
the million acres on the east side of San Joaquin Valley. I'm 
an engineer by trade and I couldn't do this without a map to 
speak to, so if you'll indulge me for a second.
    It's important for you to understand how the Friant 
division fits within the context of the Central Valley. The 
area in pink here is the Friant Division of the CVP served by 
Millerton Lake on the San Joaquin River to the Madera canal 
that serves Madera County and the Friant Canal that serves the 
County of Fresno, Tulare and Kern; the number one, number two, 
number three producing counties in the nation.
    The Friant Division was predicated on, as I mentioned, the 
development of water from Friant Dam. When Congress authorized 
the construction of Friant Dam in 1939 and built the dam in 
1945 one of the things that it did was extirpate the last 
remaining salmon run that existed on the San Joaquin River, 
which was the most furthest extent the Chinook salmon would 
travel in terms of spawning in the area, which is currently 
under the Friant Dam. So it's important for you to understand 
that in essence this reach of the river from here all the way 
down to the Merced for the most part is dry with the exception 
of water that may be available in flood years.
    The reason for my bringing that point up is to be able to 
discuss with you today the--what we see as the most significant 
threat to our water supply security to that one million acres 
of and four billion dollar agricultural economy of the Friant 
Division.
    That biggest threat I think actually can be turned into a 
very big opportunity for all of us. And really that is that 
rewatering and the reestablishment of the salmon fishery in the 
San Joaquin River below the Friant Dam.
    We've been involved in litigation with the environmental 
community since 1988. We took the opportunity to put a stay to 
that litigation here a couple of years ago in an effort to try 
to move toward being cooperative and finding a way to resolve 
this issue of putting a salmon run back in the San Joaquin 
River in a way that keeps our growers whole from a water supply 
and cost standpoint. We've actually made great progress in 
pulling that program together.
    We have two sets of studies underway with a lot of help 
from both the state and Federal Government in terms of funding, 
but those studies will study what it's going to take to put the 
fish back in the river from a biological and hydrological 
standpoint. And the other study is where is the water going to 
come from to meet this new need for river outflow.
    So we're progressing with those studies and we're intending 
them to be completed probably within the next year, which will 
allow us then to put together a plan for restoration that we 
hope can get broader and broader acceptance.
    The Water Enhancement Security Act and CalFed in general 
has been very supportive of our efforts and needs to continue 
to be supportive of our efforts. The CalFed Record of Decision 
has a major component in it for San Joaquin River restoration 
but it doesn't go all the way in terms of potentially restoring 
salmon to our part of the river. So we're--we see a need or a 
gap--to fill the gap in terms of funding for river restoration 
ultimately and we're very pleased to see the competitive grants 
program in the bill in a hope that aspect of the bill can be--
the Water Enhancement Security Act can fill that gap in terms 
of funding to bring us to a program of complete river 
restoration.
    We're obviously--given the fact that if we're trying to 
return an anadromous fishery to the upper San Joaquin River, we 
need a robust program of ecosystem improvement in the Delta 
itself. These fish are going to have to travel all the way down 
the river in and through to the Delta, out the bay and to the 
ocean if they are going to have a successful restoration 
program of salmon. So we need a healthy Delta, a viable 
ecosystem there in order to maintain that fishery as it moves 
all the way through the system.
    So funding CalFed, getting a robust ecosystem restoration 
program is very important to Friant Division in terms of 
ultimately making our salmon recovery project well.
    We are concerned that in establishing--that there not be 
anything in the bill that would establish priorities or cause 
problems for our effort in terms of restoration work. We see 
that as a real potential of upsetting some delicate priorities 
in terms of existing CVP operations and setting out some 
mandates that will be very difficult to fulfill in terms of 
assurances. We would just provide that caution to you as you go 
forward.
    I think, as you're well aware, Friant Water Users Authority 
have come out in strong support of the Water Security and Water 
Enhancement Security Act and we do look very much forward to 
continuing to work with this Committee and all of you. We very 
much appreciate your leadership in pulling this bill together 
and very much hope it can be a success. We're pleased to answer 
any questions.
    Mr. Calvert. Thank you, Mr. Moss.
    [The prepared statement of Richard Moss follows:]

   Statement of Richard M. Moss, General Manager, Friant Water Users 
                               Authority

    MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:
    I very much appreciate being given the opportunity to testify 
before the Subcommittee to provide responses to your questions about 
the state of our water supply reliability in the Friant Division of the 
federal Central Valley Project (``CVP''), the actions or activities we 
have undertaken to improve that reliability and the assistance that 
federal legislation may be able to provide. I am testifying today as 
the General Manager of the Friant Water Users Authority and as a small 
citrus grower in the Friant Division service area.
    I provided testimony to this Committee in March of last year in 
which I laid out the hope and the expectations of what water users in 
our service area would derive from a CalFed plan that was, at the time, 
deep in development/negotiation between the federal Clinton 
administration and the California Davis administration. A lot has 
happened since March 2000. A much better understanding of the blueprint 
for the CalFed actions anticipated over the next several years is now 
in place. Thus, I also intend to update you herein with our most 
current views of the CalFed Program and how it should reauthorized. In 
that regard, I have attached as Exhibit A to my testimony the policy 
document adopted by the Friant Water Users Authority Board of Directors 
that provides these views in summary policy form. Please forgive me if 
some of this testimony covers ground I touched upon in previous 
testimony.
Introduction
    I am Richard M. Moss, the General Manager of the Friant Water Users 
Authority. The Friant Water Users Authority is a joint powers authority 
formed under state law comprised of 25 member agencies that all get 
water from the Friant Division of the CVP.
    The Friant Division service area is comprised of approximately 1 
million acres of the world's richest farmland. It ranges from the 
southern part of Merced County, all the way to the Grapevine in Kern 
County. The majority of the service area is in Madera, Fresno, Tulare 
and Kern counties. This one-million-acre area annually produces about 
$4 billion in gross agricultural production. We grow a tremendous 
variety of crops. The majority of the area is dedicated to permanent 
plantings of grapes, nuts, tree fruit and citrus. We also have a 
significant amount of row and field crops, as well as leading the 
nation in dairy production. This area is truly unique in its quality of 
agriculture and in its ability to produce all of this on small family 
farms that average approximately 100 acres in size. The area is also 
renowned for its highly efficient use of irrigation water, having been 
a ``hot bed'' for the development of drip and low volume irrigation 
technology. We can boast of some of the highest irrigation efficiencies 
found anywhere in the world.
    The Friant Division of the CVP consists of Friant Dam and Millerton 
Lake on the San Joaquin River northeast of Fresno, the 152-mile Friant-
Kern Canal that runs south all the way to Bakersfield and the 36-mile 
Madera Canal that runs north to the Chowchilla River. The Friant 
Division of the CVP annually delivers approximately 1.5 million acre-
feet of water. This water supply is principally used as a supplemental 
water supply, providing only 1.5 acre-feet per acre on average. 
However, there are some parts of the service area that rely totally on 
the Friant Division water as their sole source of supply. The area is 
blessed with good quality groundwater aquifers. Groundwater is the firm 
source of supply for the majority of the service area. The Friant 
Division is unique in the west in that it employs a two-class system of 
water deliveries. The Class 1 water is the first water to develop 
behind Friant Dam and is delivered to those parts of the service area 
that have limited or no access to groundwater supplies. The Class 2 
water develops only after the Class 1 demands have been met and is 
delivered to those parts of the service area that can rely on 
groundwater. Class 2 water is typically used to replenish the 
groundwater through ``in-lieu'' recharge--providing growers with 
surface water in-lieu of using their wells, and through direct 
recharge--percolating water in recharge basins, natural water ways and 
unlined canals into the underground aquifers. The Friant Division has 
been in service for 50 years and has been successful in arresting the 
serious condition of groundwater overdraft that existed prior to the 
project. It should be noted, however, that a condition of critical 
groundwater overdraft still exists in parts of the service area and in 
neighboring areas in the southern San Joaquin Valley.
    The majority of the water rights to the San Joaquin River allowing 
for the diversion of water at Friant Dam were obtained by the U.S. 
Bureau of Reclamation through purchase and exchange agreements with the 
individuals and entities that held those rights at the time the Friant 
Division was developed. The single largest of these agreements requires 
annual delivery of 840,000 acre-feet of water to the central San 
Joaquin Valley near Mendota (commonly referred to as the Exchange 
Contract). Thus, the Friant Division is dependent upon other features 
of the CVP, including Shasta Dam, the Tracy Pumping Plant and the 
Delta-Mendota Canal, to facilitate this required exchange. It is 
important to note that if for some reason the U.S. Bureau of 
Reclamation is unable to meet the demands of the Exchange Contract out 
of Delta export supplies, the Exchange Contract provides for the 
release of water from Friant Dam to meet Exchange Contractor demands.
Factors Leading to Challenges that California is Facing Today in 
        Regards to Water Supply, Quality and Reliability
    The Committee has asked about what I believe are the factors that 
led to the water challenges we face today in California.
    There are a number of factors that have led to the challenges, more 
accurately the crisis, we are facing in terms of a chronic water 
shortage for the state and in particularly for the San Joaquin Valley 
as a region.
    The state population growth is an underlying force that continues 
to drive the need for developing additional water supplies. Yet, we 
have placed very few new water projects on line over the past twenty 
years. This lack of new water supply infrastructure to meet growing 
population needs means that we have had to live off of the ``extra'' 
capacity of the system that our forefathers designed and built 30, 40 
or 50 years ago. That extra capacity is gone. There is now very limited 
ability to weather a one or two year drought, much less a drought 
comparable to even the most recent drought of the late 1980's and early 
1990's.
    Beyond the lack of new construction of water supply facilities, are 
the needs associated with the development of a new environmental ethic 
in the state and the nation that has sought to address a perceived lack 
of consideration given to the environment with the construction of much 
of our water supply system. I remember vividly discussing with my 
Central Valley Project manager counterparts how we were going to share 
the remaining unallocated yield of the CVP of some 1.2 million acre-
feet as short a time ago as in 1989. Since that time, we have had the 
passage and implementation of the Central Valley Project Improvement 
Act and other regulatory actions to protect and enhance the environment 
that have resulted in less and less water being available for human 
uses, including agricultural production. A great deal of this lessening 
water supply impact has come to rest on the San Joaquin Valley as a 
region. Water supplies that were historically very dependable are now 
very unreliable. The region suffers from a well-documented groundwater 
overdraft that has been significantly worsened as a result of lessening 
availability of surface water supplies.
    The reliability of Friant Division water supplies is currently at 
risk as a result of a couple of major actions or activities.
    In the first, litigation brought in 1988 by a number of 
environmental and fishing organizations seeks to return sufficient flow 
to the upper mainstem of the San Joaquin River for the restoration of a 
salmon fishery. Estimates of the need for additional water to restore 
this fishery range from 150,000 acre-feet to some 600,000 acre-feet per 
year on the average. If Friant water users were ordered by the courts 
to release existing supplies for this purpose, it obviously would have 
a major impact on the availability of water to Friant Division water 
users unless additional water supplies were developed to meet this 
need. It is important to note that a stay to this litigation was 
developed by the parties to the action in November of 1999 that allowed 
the parties a limited period of time to explore ways of restoring flow 
and natural processes to the upper mainstem of the San Joaquin River 
which would provide for the restoration of a fishery while not 
adversely impacting the available water supply or cost of water to 
Friant water users. The development of a plan of restoration has been 
progressing for a year, with study results expected to be available at 
the end of this year or early next year.
    The second risk to Friant Division water supplies lies within the 
fact that the region is now chronically water short. Generally, those 
areas of the San Joaquin Valley that were the last to develop their 
land and their rights to water are the first to be shorted when the 
inevitable droughts occur. In particular, with the loss of water supply 
reliability of waters being exported out of the Sacramento/San Joaquin 
River Delta, some of the water users served by the Delta export pumps 
apparently feel compelled to attack the water rights and water supplies 
of their neighbors within the region. These attacks have taken the form 
of several legal challenges to CVP operations or other legal 
maneuvering to avail themselves of the very limited water supplies that 
exist for the balance of the region. It is important to note that not 
everyone suffering from the water supply cutbacks has taken this 
aggressive approach. Many, such as the Kern County Water Agency and 
others, look to a more cooperative approach to dealing with their water 
shortages; relying upon creativity and partnerships as compared to 
litigation and divisiveness. The legal challenges and attacks on our 
continued beneficial use of Friant Division water supplies have 
consistently been defeated. However, the cost of defending these claims 
has been extraordinary, both monetarily and in terms of the uncertainty 
and acrimony created.
    There also exists a threat to the continued use of the available 
water supplies for our agricultural economy that are driven by our own 
regional growth. The San Joaquin Valley is one of the fastest growing 
regions in the state. Balancing urban area growth with maintenance of 
the most productive agricultural region in the world presents constant 
challenges. Keeping prime farmland in production next to burgeoning 
cities is becoming more and more difficult. Moving growth to non-
irrigated lands, like the San Joaquin Valley's foothills, can only be 
accomplished if the new development brings a water supply with it. 
Given the region's already chronically water short condition, where 
will this water supply come from unless new supplies are developed?
Actions and Measures that Friant Water Users Have Taken to Improve Our 

        Water Supply, Quality and Reliability
    Friant water users believe strongly in joining with others to try 
and create mutually beneficial partnerships that address our problems 
and the problems of others.
    If you were to have asked what the greatest threat to Friant 
Division water supplies was four years ago, I would have said it was 
the potential of an adverse outcome in the effort to allocate the 
responsibility for meeting Bay/Delta water quality standards. The stage 
was set for a massive fight before the California State Water Resources 
Control Board between the major water users on the San Joaquin River 
upstream of the point where it enters the Bay/Delta, including entities 
such as Modesto Irrigation District, Turlock Irrigation District, 
Merced Irrigation District, the City and County of San Francisco, Delta 
Export interests, Friant water users and others. Coming out of the1994 
Bay/Delta Accord, the California State Water Resources Control Board 
was charged with allocating the responsibility for meeting the flow and 
water quality standards to the water right holders for waters tributary 
to the Bay/Delta. On the San Joaquin River, the responsibility for 
meeting the new standards was negotiated and agreed to by the major 
water right holders on the river. This agreement is known as the San 
Joaquin River Agreement and was formally adopted by the State Board in 
December 1999. The Friant Water Users Authority, on behalf of the 
Friant Division districts, was a major contributor towards the 
development of this agreement. This agreement provides for a twelve-
year timeframe to test theories of river flow augmentation combined 
with export pumping regimes and operation of a barrier at the head of 
the Old River Channel, designed to provide the greatest benefit, in 
terms of survival, for fall run Chinook salmon. The technical aspects 
of the San Joaquin River Agreement are known as the Vernalis Adaptive 
Management Plan or ``VAMP.'' In essence, twelve years have been 
provided for the users of waters from the San Joaquin River (including 
Friant water users) to develop a long-term sustainable plan for the 
protection of San Joaquin River fisheries based upon sound scientific 
evidence that will be generated from the VAMP analysis. This is 
considered by virtually everyone in the California water community to 
be a victory for compromise over conflict. These once adverse interests 
now meet several times a year to adaptively manage the experimental 
program and to optimize the value of the San Joaquin River Agreement to 
the parties and to the environment.
    The previously mentioned stay in the litigation to restore a salmon 
fishery to the upper mainstem of the San Joaquin River should also be 
considered a valuable partnership activity on the behalf of Friant 
water users to address an issue of tremendous concern. While there is a 
considerable way to go to completion of a plan for restoration that 
keeps Friant Division water users whole from a water supply and cost 
standpoint, I have every belief that this effort will be a success. Ten 
years of litigation have led to this consensus-based attempt to find 
resolution to some otherwise intractable issues. The litigation has the 
potential to go on for at least another ten years. Even if the 
plaintiffs were successful, there would be no measurable improvement in 
the environmental condition of the San Joaquin River below Friant Dam 
for a long, long time. Environmental restoration is now being 
accomplished and, importantly, the economy of the eastside of the San 
Joaquin Valley is being maintained.
    Lastly, let me mention the fledgling cooperative efforts between 
the Friant Water Users Authority and the Metropolitan Water District of 
Southern California (``MWD'') to find mutually beneficial ways to 
improve water management. Within the past year, Friant interests and 
MWD representatives began what we hope will be a productive partnership 
to assist MWD to significantly improve the water quality to its 
Southern California water users while at the same time improving the 
capabilities of Friant Division water districts to manage available and 
new water supplies to meet existing needs, including the need to 
develop water supplies for San Joaquin River restoration. This new 
partnership has great potential to provide significant benefits to the 
San Joaquin Valley and to Southern California. This partnership, when 
combined with the partnering efforts involved with San Joaquin River 
restoration, clearly has the potential to lead to actions that can 
benefit virtually the entire state.

Additional Measures or Assistance Needed in the Short, Mid and Long 
        Term to Improve Water Security
    As I know you are aware, the Friant Water Users Authority is 
supportive of the Western Water Enhancement Security Act Congressman 
Calvert has introduce along with many of the members of this Committee. 
We very much appreciate the leadership of this Committee in developing 
this legislation. We have sought to have it strengthened in a couple of 
regards in order to be more supportive of the actions and programs we 
have underway and actions and programs we foresee in the future, 
importantly including those just previously mentioned.
    As noted earlier, in order to address a significant threat to the 
Friant Division's water security, we are developing and implementing a 
program of restoration for the upper mainstem of the San Joaquin River 
below Friant Dam. Congress clearly recognized the environmental 
tradeoffs it was making when it authorized the construction of the 
Friant Division of the CVP back in 1939. We expect Congress and the 
federal government to have a major role in the restoration of the river 
and return of a fishery. Our progress on the studies and development of 
a plan for restoration are ``out of synch'' from a timing perspective 
with the immediately needed reauthorization of the CalFed Program. We 
know the funding needs for the San Joaquin River restoration program 
will be significant and we are concerned that they have not been 
adequately considered in the CalFed Framework Agreement and the 
subsequent record of decision. However, we are excited about the 
provision of a new program contemplated in the Western Water 
Enhancement Security Act that will allow projects for water supply 
development and water quality improvements to compete for federal grant 
funding. We believe that with some assurance that our multi-benefit 
programs for environmental restoration, water supply improvement and 
water quality improvement can qualify for the program, that we can 
compete effectively for such monies in the future to help meet our 
local water supply and river restoration needs.
    Certainly, creating a well-funded, balanced and scientifically 
based program of environmental restoration of the Bay/Delta and its 
tributaries will be consistent with and supportive of our needed San 
Joaquin River restoration effort. Even if we are successful in 
returning the conditions favorable to an anadromous fishery below 
Friant Dam, the conditions all of the way down the river, through the 
Delta, through the Bay and to the ocean must also be conducive to 
successful salmon smolt out-migration and the return of the adults. In 
this regard, it is easy to understand why we believe CalFed must be 
reauthorized and the environmental restoration program get underway 
quickly in order for Friant water users to ultimately obtain their 
needed water supply security.
    New water supply infrastructure, including the new storage 
contemplated in the record of decision, must be supported and the 
regulatory hurdles leading to construction minimized. This does not 
mean abandoning existing law and regulation and running the risk of 
making environmental or economic mistakes. However, a plan of water 
supply development and water quality improvements that takes too long 
to come to fruition will only create new mistrust of the process and 
new reasons for individual interests to think and act only for 
themselves. Being able to move effectively and efficiently in making 
the necessary determinations to effect water system improvements is 
essential.
    Finally, we have experienced first-hand the cost and anguish of 
defending our water rights and water supplies from those who would 
interpret existing law to an end never intended by the legislature. We 
remain concerned about any current or future effort to weaken our 
ability to meet the needs of our service area, including the needs of 
the San Joaquin River, by those desperate for additional water supplies 
within the region. In that regard, we see great potential for the 
inadvertent upset of existing water rights and operational priorities 
for the CVP with otherwise well-intentioned law to provide assurances 
of a water supply where, truly, no assurance can be found. Clearly, an 
assurance to some has the potential to become a huge liability to 
others and must be avoided unless all interests are in agreement and 
the source of the assurance is clear.
Closing
    In closing, let me extend my appreciation for the invitation to 
appear before the Committee today. Friant water users very much 
appreciate you coming to the Central Valley to hear our concerns and 
look forward to working with you to address these important issues. 
Thank you.
                                 ______
                                 
    [An attachment to Richard Moss' statement follows:] 
    [GRAPHIC] [TIFF OMITTED] T3149.024
    
    [GRAPHIC] [TIFF OMITTED] T3149.025
    
    Mr. Calvert. Mr. Nelson.

  STATEMENT OF DAN NELSON, GENERAL MANAGER, SAN LUIS & DELTA-
                    MENDOTA WATER AUTHORITY

    Mr. Nelson. Chairman Calvert and members of the 
Subcommittee, first of all, welcome to the San Joaquin Valley 
and thank you very much for the opportunity to speak before you 
today on the Central California Water Security on Opportunities 
and Challenges. My name is Dan Nelson, I'm the executive 
director of the San Luis and Delta-Mendota Water Authority.
    First off, on behalf of the Board of Directors and member 
agencies, thank you, and your colleague cosponsors for the 
development and introduction of H.R. 1985, the Western Water 
Enhancement Security Act. Your effort has resulted in 
legislation that balances agricultural, urban and environmental 
objectives and sets CalFed in motion on the right path.
    I've submitted written testimony and will go over some of 
the highlights of that testimony in shorter form. First of all, 
I'd like to leave you with three points today and three key 
issues.
    The first issue would be that California's headed full 
steam into a water supply crisis and that there is a very large 
block of about a million acres on the western side of the San 
Joaquin Valley that's already fully engulfed in that crisis.
    The second key point I'd like to leave you with today are 
water users and purveyors are doing the best that they can to 
cope with that crisis through conservation, transfers, 
reclamation, land retirement, et cetera, but it's become 
obvious that through those coping mechanisms alone that they 
won't be able to be sustainable.
    The third point is that California is in dire need of the 
implementation of a comprehensive master plan. This 
comprehensive master plan is going to have to include 
additional infrastructure for additional supplies, regulatory 
balance and assurances, and continued restoration of fisheries 
in the environment.
    On the water supplies and impacts, over the last 10 years 
there's been several million acre feet of water shifted each 
year to meet evolving and environmental mandates. This 
rededication of resources coupled with rapid population growth 
has vastly destabilized California's water picture. Nowhere in 
the state is this more evident than the CVP ag contractors 
south of the Delta.
    Mr. Birmingham has already indicated to you we've gone from 
stability that we've had from 1950 through 1990 to a situation 
of where our ag users have about 50 to 55 percent average 
supply today.
    As part of the development of an integrated resource plan, 
the U.S. Bureau of Reclamation has recently done a gap analysis 
of agriculture on the West side of San Joaquin. And essentially 
the most recent--it's still a working document, but the most 
recent draft of this gap analysis has indicated that even with 
a 70 percent supply for the ag surface contractors on the West 
side of the valley, that there is a--and also taking into 
consideration the sustainable groundwater and transfers 
available to the region, that there is a gap of over 800,000 
acre feet between the legitimate needs to the region and the 
supplies available. And that's assuming that this area gets 70 
percent supply.
    The water shortage and instability contribute to increased 
unemployment in an area that already has some of the highest 
unemployment in the state. The loss of equity as land values 
plummet lowers the tax base for schools and local services and 
subsidence through lowered groundwater.
    The shortage that we're experiencing on the West side of 
the San Joaquin Valley is predominantly as a result of the 
implementation of three Federal statutes, the Central Valley 
Project Improvement Act, the Endangered Species Act, and the 
Clean Water Act of which we have under the Clean Water Act the 
State Water Resources of 1995 Water Quality Control Plan.
    There's been a tremendous amount of contentiousness and 
mistrust that has surfaced as a result of how these acts have 
been implemented. It's our feeling that there is--there is 
discretion to implement those acts in a more balanced way that 
meet the objectives of the environment and the objectives of 
the statutes themselves while still resulting in reasonable 
amount of and sustainable water supply for agriculture.
    Some of the--some of the coping mechanisms as I indicated 
before is high-tech conservation. You're not going to find any 
ag area in the world that is spreading their water thinner and 
getting more bang for their buck from the water supply that 
they have.
    In addition to that, they are very, very active out in the 
transfer market and have been very successful. I do need to add 
we're a little concerned about the future of that market as we 
implement additional plans such as the environmental water 
count, public purchases for Level 4 refuge supplies.
    There are several programs currently underway of public 
purchases of additional water and we're a little concerned 
about what they may do to the market and ultimately how 
realistically are we looking at the opportunities in future 
water transfers to meet reduced water supplies.
    In closing, the West side of the San Joaquin Valley is 
looking at the fixes for themselves through the framework of an 
integrated resource plan and essentially that resource plan is 
going to be multifaceted. It will include additional 
conservation. It will include utilizing our sustainable 
groundwater as best as we can and maximizing its use, but 
maintaining its sustainability as well as the need for some 
additional supplies and there will be an element of land 
retirement.
    Right now there's some proposals of even up to a couple of 
hundred thousand acres of land proposed or being looked at as 
being retired on the West side of the valley. Even with 200,000 
acres of land to be retired on the West side of the valley, 
that still leaves close to 3 or 400,000 acre foot gap of 
sustainability for the remainder of the lands.
    A balanced approach for development and managing 
California's water resources into the future is long overdue. 
Defining and implementing that balance has eluded Californians 
through decades of contentiousness amongst the major stake 
holders. South of Delta water users and south of Delta rural 
communities dependent on the CVP have experienced a downward 
spiral in their water supplies and economy. H.R. 1985 has 
provided the region with hope, hope for immediate stability and 
opportunities to move toward long-term sustainability.
    We once again thank the authors and cosponsors for their 
vision and leadership and fully support the passage of this 
legislation.
    Mr. Calvert. Thank you, Mr. Nelson.
    [The prepared statement of Mr. Nelson follows:]

Statement of Daniel G. Nelson, San Luis & Delta-Mendota Water Authority

I. Introduction
    Chairman Calvert and members of the Subcommittee, thank you for the 
opportunity to speak before you today on Central California Water 
Security-Opportunities and Challenges. My name is Dan Nelson, and I am 
the executive director of the San Luis & Delta-Mendota Water Authority.
    First off, on behalf of our Board of Directors and member agencies, 
``thank you'' and your colleague cosponsors for the development and 
introduction of H.R. 1985, The Western Water Enhancement Security Act. 
Your effort has resulted in legislation that balances agricultural, 
urban and environmental objectives and sets Calfed in motion on the 
right path.
    The San Luis & Delta-Mendota Water Authority (Authority) was formed 
as a joint powers authority in January 1992. The Authority represents 
its member agencies at the state and federal levels and advocates on 
issues that affect their water supply and the ability to deliver that 
supply. The Authority's member agencies take water from the federal 
Central Valley Project (CVP) through the Tracy Pumping Plant and the 
Delta-Mendota Canal, which the Authority also operates and maintains.
    The Authority's service area stretches from the City of Tracy in 
Stanislaus County, along the west side of the San Joaquin Valley to 
Kettleman City in Kings County. Its service area also includes the 
Santa Clara Valley, as well as farmland in San Benito County and in the 
Pajaro Valley. In all, the Authority's membership consists of 32 water 
agencies representing agricultural, urban and wetland water suppliers.
    The Authority's members have contracts totaling 3.3 million acre-
feet of water from the CVP and includes over 1 million acres of the 
most efficient and productive farmland in the nation. It also includes 
more than 100,000 acres of seasonally flooded and managed wetlands. 
Those wetlands, located along the Pacific Flyway, are home to 1.5 
million migratory geese and ducks annually. The service area also 
includes the Silicon Valley, home to the billion-dollar computer 
industry and many industrial and municipal water users.

II. CHALLENGES
A. Water Supply/Impacts
    Over the last ten years, there has been several million acre-feet 
of water shifted each year to meet evolving environmental mandates. 
This rededication of resources, coupled with rapid population growth, 
has vastly destabilized California's water picture. No where in the 
state is this more evident than the CVP agricultural contractors south 
of the delta. Prior to 1989, there was only 2 years in the 45 years of 
CVP operations in which these contractors didn't receive 100% or more 
of their contract supplies. Recent modeling has shown that these same 
farmers can now expect a 50-55% supply on average. Furthermore if there 
was a repeat of the 1987-1992 drought there would be a few years with 
no water available at all. (Please note graphs below).
    As part of the development of an integrated resource plan the U. S. 
Bureau of Reclamation (USBR) has initiated an analysis to determine the 
gap between the water supply available to south delta agricultural 
users vs. their needs. The most recent draft of the analysis indicates 
that even with a 70% allocation from the CVP supplemented by local 
groundwater and surface water, there is still a gap of over 850,000 
acre-feet. The analysis clearly indicates that status quo for the 
region is not sustainable.
    The water supply shortage and instability contribute to increased 
unemployment in an area that already has some of the highest 
unemployment in the state, loss of equity as land values plummet, 
lowered tax base for schools and local services, subsidence from 
lowered ground water, and in general an underlying instability and 
uncertainty within the region.
B. Regulations
    The shortage for south of delta CVP contractors is predominantly 
the result of the implementation of three federal statutes:
    1) Lthe Central Valley Project Improvement Act;
        a. Dedication of CVP water for wildlife refuges
        b. Dedication of 800,000 acre-feet of CVP yield for fisheries.
        c. Trinity River restoration
    2) Lthe Endangered Species Act; and
        a. Winter Run Salmon
        b. Delta Smelt
    3) Lthe Clean Water Act.
        a. 1995 State Water Resource Control Board Water Quality 
        Control Plan
    These statutes make additional commitments for deliveries south of 
the delta to wetlands and wildlife habitat while at the same time 
reducing the overall amount of water available to the region through 
restrictions on pumping from the delta for fishery and water quality 
purposes.
    Discretion -- There has been a tremendous amount of contentiousness 
& mistrust that has developed from the manner in which these statutes 
have been implemented. It is widely acknowledged that there is broad 
discretion in how they are implemented. We strongly believe that the 
environmental objectives of these statutes could be obtained through a 
more balanced implementation approach that would be more efficient for 
the environment and could have significantly less impacts.
    Science -- Contributing to the contentiousness and mistrust is the 
lack of peer review opportunities and collaboration in the 
determination of the regulatory requirements. The scientific validity 
of most of these requirements has never been subject to independent 
scientific review. Implicit are a number of important assumptions whose 
scientific validity has not been assessed, or worse, assumptions whose 
validity has been assessed and found wanting. In addition, although 
their effect on water supplies is large, no attempt has been made to 
estimate the effect of these requirements on the fish populations. 
There is therefore no substantive means to prioritize actions for the 
sake of restoration and water supply efficiencies. The Calfed Science 
Program offers great promise. The program has assembled an impressive 
interim Science Board. Agencies and stakeholders appear to have 
considerable good will toward and respect for this new program. The key 
to its success will be the linkage between the Science Program and the 
Calfed agencies decision making process on regulations, the 
Environmental Water Account, and other biologically sensitive actions.
C. Infrastructure
    Compounding the problem of the rededication of agricultural water 
to environmental uses and population growth has been the lack of 
development of new supplies over the last couple of decades. Stymied by 
conflict, disputes and strict regulations California has had to rely 
almost entirely on an infrastructure built decades ago. This 
infrastructure is insufficient for us to be able to accomplish our 
environmental & agricultural objectives while meeting the needs of an 
expanding population.
D. Conservation, land retirement and transfers
    Conservation -- Water managers and farmers have gone to great 
lengths and at great expense to stretch existing water supplies. 
Irrigation technology, methodology and efficiencies for south of delta 
agricultural contractors are renown for both district and farm level 
efficiencies. Water users and purveyors continue to seek techniques and 
opportunities to hone their water use and conveyance.
    Land Retirement -- To address chronic water shortages and assist in 
local drainage problems local districts have developed and begun to 
implement land retirement programs. Efforts to identify and address 
third party impacts have been intensified for larger scale retirement 
proposals.
    Transfers -- South of delta water users have participated 
successfully in water transfers over the last decade. There are 
however, rising concerns about the cumulative effect on the water 
market by large public water acquisition programs such as CVPIA Level 4 
refuge purchases, Environmental Water Account, Governors Drought Bank, 
Calfed Environmental Restoration Program, Vernalis Adaptive Management 
Plan, and the CVPIA Acquisition Program. In and of themselves these 
programs have merit but we need to assess the cumulative effects and be 
more realistic about future transfer opportunities outside of these 
programs.

III. OPPORTUNITIES
    The solutions to south of delta CVP contractors supply deficiency 
and instability will need to include both a reduction of demand and 
recovery of some of the supplies that have been rededicated. The 
solutions will be a variety of regional based projects/programs coupled 
with CVP and state-wide based projects/programs.
A. Integrated Resource Plan (IRP)
    South of delta CVP contractors are supportive of the development 
and implementation of a comprehensive IRP as the framework for moving 
toward the resolution of their short and long term water supply issues.
    The Mid-Pacific Region of the USBR is undertaking an Integrated 
Resources Plan for the west side of the San Joaquin Valley in 
cooperation with the Authority and other local stakeholders. The IRP 
will be a resources management master plan to consider water management 
in the context of environmental and socioeconomic factors. The focus of 
the study will be on alternative means of reducing the imbalance 
between water demand and supply. Water quality, land use, environment, 
flood control, drainage, groundwater, and local economic issues will be 
considered. The IRP will be used by USBR, water districts, and others 
to guide water supply development and management in the future.
    The Plan will be based on a detailed water supply and demand 
analysis. Essential to this base is a reasonable CVP allocation and a 
balanced and stable regulatory regime that accomplishes environmental 
objectives while minimizing water supply impacts.
    Water management options include ongoing programs, options 
identified in the Calfed Record of Decision, and other local and 
regional options. These options could include:
     Additional water conservation, water transfers and 
exchanges;
     Management of agricultural drainage including additional 
land retirement, water treatment and tailwater reuse;
     Surface and groundwater storage;
     Projects that improve local flood control that also have 
a water supply benefit;
     Conveyance improvements such as the Delta-Mendota Canal 
and California Aqueduct Intertie, the San Luis Bypass, and canal 
enlargements; and
     Environmental restoration and enhancement projects within 
the region.
B. H.R. 1985, the Western Water Enhancement Security Act
    A balanced approach for developing and managing California's water 
resources into the future is long overdue. Defining and implementing 
that balance has eluded Californians through decades of contentiousness 
among the major stakeholders. South of delta water users and south of 
delta rural communities dependent on the CVP have experienced a 
downward spiral in their water supplies and economy. H.R. 1985 has 
provided the region with hope. Hope for immediate stability, and 
opportunities to move toward long term sustain-ability. We once again 
thank the authors and cosponsors for their vision and leadership and 
fully support the passage of this legislation.
                                 ______
                                 
    [Attachments to Mr. Nelson's statement follow:]

    [GRAPHIC] [TIFF OMITTED] T3149.026
    
    [GRAPHIC] [TIFF OMITTED] T3149.027
    
    Mr. Herrick.

   STATEMENT OF JOHN HERRICK, ATTORNEY FOR SOUTH DELTA WATER 
                             AGENCY

    Mr. Herrick. Thank you, Mr. Calvert. My name isJohn 
Herrick. I'm the attorney for the South Delta Water Agency, not 
the general manager. I appreciate being invited here, 
obviously. These problems are very significant as well as 
threatening to all the parties involved here. But I'd like to 
take a certain different focus than the other speakers.
    When the Central Valley and state water projects were 
built, they were finalized based on certain promises that were 
made and those promises were then put into statutes in 
California. Specifically those statutes include the Delta 
Protection Act, which said that you will maintain a supply of 
good quality water in the Delta for all purposes, but including 
current and future Delta needs.
    The statutes that were passed were the Area of Origin 
Watershed Protection Acts, which said basically that as those 
areas grow, they will be able to take advantage of this newly 
restored water so that their future has not been mortgaged at 
the expense of somebody else's future.
    Those two acts contemplated unless there is an increased 
supply that there will be less available for exports. That's 
what they say. That's what was promised and that's what's in 
the statutes.
    Now the representative from the Regional Council of Rural 
Counties didn't tell you what we've been discussing with them a 
lot. Their general plans for the next 30 years to 2030 
anticipate that they will need 3 to 5 million acre feet more of 
water. If we don't increase the pie, there's zero export.
    Now, that's a slight overstatement. That's the magnitude of 
the problem. And so if we do not figure out how to have more 
water for everybody, then you will simply be choosing sides as 
to who will get what is there.
    One of the problems that we have with the current--the 
current thought process is that increased supply is always the 
promise. We're studying the raising of Friant. We're studying 
the raising of Shasta. We're looking into the Sites Reservoir. 
But while you're looking into that, you're now trying to 
promise somebody will have a greater supply right now. We don't 
want to be the opponents of the rest of the ag in the state.
    We heard Mr. Birmingham say after 6 years of the wettest 
time we've had, 6 years wettest record on--six years wettest on 
record they are getting 50, 60 percent. If you say now I'm 
going to look into more storage, but I want to give them more, 
where is it going to come from? There's no extra supply of 
water that's not being used.
    What you're doing is pitting one part of the state against 
another when you select somebody to protect. You did it in 19--
I don't mean you specifically. You did it in 1992 when you said 
I think the environment needs 800,000 acre feet. We just heard 
the speaker say they are 800,000 acre feet short. Where did 
that come from?
    You can't simply say this group needs more money if you 
don't have a larger supply. And CalFed is not helping. CalFed 
undertook its preferred alternative based on the assumption 
that the Delta water will get worse in quality. The preferred 
alternative makes it worse for my clients.
    Now, they are trying to make it better for export quality 
versus cities because they have problems with treatment. It 
gets worse for my client. So when we talk about everybody 
getting better together, it's not happening. CalFed wants to 
export more water. These people need more water. So do the 
cities.
    You know what happens when you export more water? You 
increase the level of harm to my clients. My clients are harmed 
every day by your export projects, every day. Last week and the 
week before I received calls from diverters on Old River. John, 
my siphons won't work. You know why they won't work? Because 
the water levels have been dropped to a point where they can't 
be diverted.
    Those people who live in the Delta, those people are 
supposed to be provided with protections not only from the 
Delta Protection Act, which says you'll take care of them, but 
from the general laws which say you shouldn't be able to 
operate without harming somebody else. That's what's happening 
now.
    If you think that CalFed is solving those problems, you're 
wrong. CalFed has embarked upon a method to change the way that 
the state project diverts. That's fine. They are going to do 
that, too. Not only get more water, which their clients need, 
but in order to protect fisheries, too, they are going to try 
to restay the intake at Clinton Forebay in a manner that 
protects fish. You should know now when you salvage fish you 
kill them. There's no protection of fish now.
    We're going to do that in a manner which forces them to 
change the way and the rate in which they draw water into the 
forebay. DWR water says it will double the amount of draw down 
that my clients are experiencing. Double it. There's no plan to 
address that. They are going to look into it. But there's no 
plan to address that.
    There's also no plan to address the amount of salt coming 
down the river. The state and Federal projects import 100 
million tons of salt every year and then the users use the 
water, it gets concentrated and up to 400,000 tons of that gets 
poured back into the San Joaquin River and guess where that 
goes. It goes down to my client.
    DWR and the USBR have no plan by which to meet the four 
interior Delta salinity standards, but CalFed wants to import 
more water down there. We're not trying to fight these guys, 
but you can't address one problem without the other. It's all 
redirected impacts. Every time you choose something to do it, 
it's redirected impacts.
    Unless you go forward and say you have to mitigate what 
you're going to do and we're going to have X amount of water, 
you're not solving the problem. If you try to redivide the pie 
now, you're simply harming some other people.
    I'd like to add one more thing. I understand I'm going long 
here. You all know the peripheral canal, what that was, right? 
A tremendous fight, we thought it was decided. CalFed wants to 
store water in the Delta and son of a gun they decide on a way 
that buys up the heart of the Delta, six islands now, six, and 
enough water is not going to go through the Delta. It's going 
to be piped from one island to another island. Oh, son of a 
gun, we got a way now to transport the fresh water from the 
Sacramento River system across the Delta to the export pumps 
without the uncomfortable necessity of it going through the 
Delta channels.
    That's not right. Please don't force us to fight the same 
battle again. We need new supplies. We don't need 
reliabilities. We need sufficiency. We don't need new storage. 
We need new yield. And unless you make those distinctions and 
embark upon a plan to get a bigger pie, we will be fighting 
forever and nobody's going to win.
    But the first group that's going to lose are my clients. 
When you buy up a third of the Delta to mitigate the impasse of 
the export project, you're just admitting that we're just in 
the way of what you're trying to accomplish.
    Thank you for your time very much. There's numerous issues 
that we can discuss tonight. I'm looking forward to more 
questions. Thank you.
    [The prepared statement of Mr. Herrick follows:]

   Statement of John Herrick, Attorney for South Delta Water Agency, 
                          Stockton, California

    Mr. Chairman and Committee Members:
    I would like to thank you for inviting me to speak before this 
Committee. As you can imagine, it is very difficult for us to schedule 
time to attend any Committee hearings in Washington D.C., and so 
holding one here is greatly appreciated.
    My name is John Herrick. I am the attorney for the South Delta 
Water Agency and work closely with counsel for the Central Delta Water 
Agency. I am appearing here today on behalf of both Agencies. Our 
Agencies encompass a large part of the Sacramento-San Joaquin Delta 
(``Delta'') from which both the State and Federal projects export 
water. The Delta is the end of the line for most of the major rivers of 
the state and suffers the impacts of decreased flows, degraded water 
quality, lowered water levels and reverse flows. In light of this, the 
Delta Water Agencies have a unique perspective with regard to the water 
problems facing our State.
    The problems are monumental, and because they are not being 
adequately addressed, the State as a whole and our clients in 
particular continue to suffer while the various interests fight over 
how to re-divide an already too small pie. We originally hoped that 
CALFED would work towards solving these problems, but its wrongly 
focused and mutually exclusive goals will worsen the problems so 
desperately in need of fixing.
    As you know, over twenty million Californians rely on the Delta for 
all or some of their water needs. Most of this water is delivered to 
them by the State and Federal projects, known as the State Water 
Project and the Central Valley Project, respectively. These projects 
built extensive systems of dams, canals, aqueducts and pumps to deliver 
surplus flows and stored water to agricultural users in the San Joaquin 
Valley and municipal users throughout the southern half of the State. 
The California statutes which allowed these projects to proceed, either 
created or reserved certain rights for those areas from which the water 
originates or is exported. These statutes generally include the Delta 
Protection statutes, the Area of Origin statutes, and the Watershed of 
Origin statutes. Taken as a whole, these statutes require that the 
Delta and upstream areas are entitled to protection from the projects, 
and as they grow, they will be able to use the water developed by the 
projects. In other words, the underlying principle of the projects is 
that as time goes on, there will be less water available for export.
    Contrary to the law, the projects refuse to supply the current 
needs of area of origin and in-Delta users. In addition, we are now at 
the point where the growing needs of those areas of origin are being 
circumvented because State and Federal agencies are trying to increase 
the amount of water for export without increasing new supply or yield. 
The Regional Council of Rural Counties, which includes most of the 
areas of origin for the Sacramento and San Joaquin Rivers has estimated 
from the General Plans of its constituent that those counties will need 
an additional 3-5 million acre feet of water by 2030. It is simple 
mathematics to see that in a relatively few short years, all of the 
current yield of the projects will be needed for the areas of origin, 
with little left for exports.
    This is the crux of the problem facing us. Any efforts that seek to 
increase exports without corresponding increases in yield or developed 
water forces the various areas of the State to fight each other in 
order to both survive and to protect their future growth. Currently the 
State and Federal governments are taking sides, thereby promoting the 
conflict. Since CALFED began, we have asked and demanded it catalog and 
estimate current water needs, then compare that to projected needs for 
all uses, and determine the shortfall. Rather than do this, CALFED has 
simply assumed that reallocating current supplies will provided 
sufficient quantity. This incredible assumption is based on an 
unwritten plan to slowly take the water away from agriculture to meet 
environmental and urban needs. Notwithstanding that this assumption is 
simply wrong, such a policy should be subject to public debate before 
the bureaucracy tramples the underlying rights of the parties. CALFED's 
approach creates confusion and misunderstanding because it talks of 
``water reliability'' without discussing the inadequacy of the supply. 
It also masks the true situation by referring to ``new storage'' it 
will create without explaining how this will (or will not ) affect the 
overall yield of the system.
    The bottom line is California needs additional supply; not reliable 
shortages and not new storage that is not new yield. Our State has only 
been able to survive droughts by over-drafting its groundwater basins. 
CALFED makes no effort to address this situation, rather it exacerbates 
the situation by promoting water transfers of surface supplies which 
leads sellers to rely more on groundwater. Recent draft legislation 
attempts to delve into these issues, but gets sidetracked in creating 
preferences to protect certain interest groups.
    Another issue facing California's water future deals with whether 
or not the projects will be required to operate in a manner that does 
not simply shift burdens to innocent third parties and interests. 
Currently the projects redirect impacts to two main groups. The first 
is our clients, the users in the Delta. The operation of the State and 
Federal projects does four things: (i) decreases the level of the water 
in the Delta to the point where local diverters cannot exercise their 
riparian and other superior rights, (ii) fundamentally alters the 
direction of flow in the Delta which creates stagnant zones where 
contaminants concentrate, (iii) decreases the amount of water flowing 
into the Delta during times when local needs are not being met, and 
(iv) causes upstream drainage of a quality that greatly exceeds 
downstream water quality objectives.
    In spite of the existence of these problems and the ongoing failure 
to address them, CALFED has undertaken to increase the activities which 
cause these problems, before (and sometimes instead of) first curing 
these problems. As an example, in order to export more water in a 
supposed fish-friendly manner, a new place of diversion for the State 
project has been chosen. Operation of this new diversion site will, 
according to the State's modeling, double the existing draw down of 
water. In other words, CalFed has undertaken to increase the harm to 
third parties before it has figured out how to mitigate the current 
level of harm. You should know that it is the expressed position of the 
Bureau of Reclamation that it need not operate in a manner that 
protects Delta diverters.
    The second group suffering the impacts of the operation of the 
projects is the environment, including and especially fisheries. This 
is a complicated issue, not well understood or handled. The Fish and 
Wildlife Service, Department of Fish and Game, and National Marine 
Fishery Service seek large amounts of money and water to mitigate the 
loss of habitat and lessen the threat to endangered species. At the 
same time, those agencies are allowing the State and Federal export 
projects to kill large amounts of endangered species. This year, 18,000 
endangered salmon were killed and in the last two years over 100,000 
Delta smelt. While allowing this, those fishery agencies actively seek 
to prevent other actions which would mitigate the adverse affects those 
same projects have on in-Delta users, specifically my clients. It's 
okay to kill endangered species, but it's not okay to protect 
riparians.
    Either the fisheries are endangered or they are not. If they are, 
then the projects should be operated in a manner that does not kill 
thousands of endangered species in order to provide a certain level of 
exports. Regardless, those projects should be required to operate in a 
manner that does not harm innocent third parties who existed well 
before the export projects began and who have water rights superior to 
theirs.
    CALFED's environmental water account, or EWA, is a curious example. 
This proposal naturally sounds beneficial; a supply of water for use to 
help fisheries. The problem is that it simply shifts a burden from one 
party to another. Remember, there is no extra, unused supply of water. 
First, the account is used to protect the junior most water right 
holders from the obligation of mitigating their adverse effects on 
fisheries. If they are allowed to cap the amount of mitigation needed 
to address the impacts they have caused, then the remaining needs 
simply get reallocated to others, directly or indirectly. This 
redirection of the obligation to mitigate impacts on fisheries is best 
evidenced by New Melones dam and reservoir, a portion of the Federal 
project on the Stanislaus River. In order to help restore Delta fishery 
needs, New Melones must release 1500 cfs at some times when other 
similar size rivers have downstream obligations one tenth that amount. 
To justify this and maintain control of this water, the Fish and 
Wildlife Service claims the water is for Stanislaus fisheries, but it 
coincidentally provides the lion's share of Delta needs . This 
tremendous loss of water directly decreases the amounts available to 
San Joaquin county which borders the river.
    Second, purchasing water encourages diverters and reservoir 
operators to collect or control more water than they consume so they 
can both sell water and still meet their needs. Again, since there is 
no unused or extra supply of water in the system, the control of this 
water simply shifts the shortage to someone else.
    One of the most prevalent fallacies in water is that conservation 
is the key to more supply. Such a position ignores the distinction 
between consumption of water, and use or application of water. 
Conservation in practice means that a party still consumes the same 
amount of water, but prevents the loss of some of its applied or un-
consumed water. However, this simply reallocates a shortage. On the 
Sacramento and San Joaquin River systems, everybody's return flow, 
drainage, or ``wasted water'' helps meet someone else's needs, 
including fishery needs. This is because that water adds to downstream 
river flows or groundwater supplies. When you conserve water in 
Sacramento, there is less water in the river and Delta. As a 
consequence, there is a greater need for upstream releases to meet 
standards such as Delta outflow which protects many interests including 
fisheries. This ``conservation'' simple reallocates the shortage of the 
entire system.
    Conservation in some areas is beneficial. When you put a brick in 
your toilet in San Francisco, less fresh water is discharged into the 
ocean, and thus there is more net supply. For this reason, our agencies 
advocate efforts to make areas which rely on imported water more self 
sufficient. Installing gray water lines in new construction, trapping 
seasonal flows to the ocean, and desalinating brackish groundwater are 
just a few of the possibilities. It is important for any Federal 
legislation to recognize the distinctions in what conservation means in 
any particular area. Previous efforts toward this end have been 
universally ignored by the Bureau of Reclamation. In the 1992 Central 
Valley Project Improvement Act encouraged transfers of water, but only 
water that was made available from a decrease in consumption or a 
decrease in water previously irretrievably lost. After the numerous 
transfers which resulted, I know of none that complied with this 
provision.
    Please bear in mind, when any conservation results in a 
reallocation of the shortage, it may increase the amount available for 
fisheries at one time, but almost always decreases the water available 
at another time. We rob Peter to pay Paul.
    The implementation of the EWA is also done in a manner that causes 
harm to third parties who are already being impacted by the export 
pumps. The fishery agencies won't allow my clients to be protected from 
the exports during times environmental water is being used. The permit 
conditions for the South Delta tidal barriers, which mitigate some of 
the effects caused by the export pumps, preclude barrier operations 
when EWA water is being released. Whether or not the barriers 
themselves impact fish (as the agencies claim) is irrelevant. The point 
is that in order to help fish, the Federal government stops helping 
others who it is also harming; redirecting the shortage of water.
    As you can see, the consequence of creating an environmental water 
account is to simply transfer the shortage of water available for fish 
to someone else. Incredibly, CALFED transfers the shortage to the 
senior water right holders in order to protect the junior water right 
holders.
    It is common today to ``seek consensus'' and ``balance needs'' 
while addressing the problems. These are terms that make people feel 
good; mostly people who get their water out of a faucet. But when 
balancing means a riparian in the Delta has no water so that exports 
can continue, the term is a direct challenge to the existing law. You 
don't balance needs when Water Code Sec. 12204 states . . . ``no water 
shall be exported which is necessary to meet'' in-Delta needs. The 
natural consequence of this feel good attitude is to ask senior water 
right holders to suffer so that junior ones get more. This reversal of 
California water right priorities continues at an accelerated pace. It 
began with the Delta Accord wherein the State and Federal projects 
worked out a deal to help fisheries as long as exports didn't decrease 
further. It continued with the projects asking the State Water 
Resources Control Board to adopt a Water Quality Control Plan for the 
Delta which also guaranteed exports would not decrease. Now, CALFED not 
only continues the principal of ``no net loss'' of exports, but seeks 
to increase the amount available to certain export contractors. There 
is no magic wand that makes more water. If the Federal government 
mandates more for one interest, some other will have less. Since the 
proposal is to deliver more to junior right holders, then necessarily, 
senior right holders will have less.
    Another example of redirected impacts is found in the salinity 
issue. The export projects deliver up to 100,000,000 tons of salt to 
the San Joaquin Valley each year. Up to 400,000 tons of that comes back 
into the San Joaquin River as either surface or subsurface drainage and 
in concentrations sometimes 10 to 20 times that of the applicable water 
quality standard. If the Federal government wants to help California, 
it should begin to solve this problem rather than continually make it 
worse. Not only does the drainage ruin the San Joaquin River and harm 
downstream users, but the accumulation of salts in the San Joaquin 
Valley is dooming the next generation of agriculture. You should bear 
in mind that CALFED is doing nothing to address this problem; its 
trying to increase the amount of salt to be imported.
    CALFED seeks to embark on a monumental program of ecosystem 
restoration, including the creation of upwards of 300,000 acres of 
habitat in the Delta. The consequences of such a loss of farm land are 
virtually ignored by the bureaucrats who view Delta agriculture as an 
obstacle. Any such project should require approval by local 
governmental agencies in order to insure that the State and Federal 
Governments are not simply imposing their will on others. This loss of 
agricultural land and production is virtually ignored by CALFED. The 
impacts to future food and fiber supply of the nation must be 
considered.
    We have already seen though, that CALFED will try to avoid the 
legal obligations of examining the impacts of land purchases. As an 
example, rather than go through the CEQA and NEPA processes, CALFED 
simply gave a grant to the Nature Conservancy in order to purchase 
Staten Island in the north part of the Delta. This sort of end run of 
the law should not be tolerated. Actions like this continue to make us 
suspicious of the motives involved. As you can see from my attachment 
and the in-Delta storage discussion below, Staten Island just happens 
to be part of the pathway for a Peripheral Canal.
    Further, local, State, and Federal agencies already own or control 
significant acreage in the Delta and yet have not attempted to maximize 
its habitat value. There is no reason to embark on additional purchases 
of land if the government does not use what it already has.
    Finally on this point, you should understand the underlying lack of 
logic for what is being done. In order to export water to certain areas 
of the State, we create a system that harms the Delta, fisheries and 
the environment. In order to mitigate for that harm, the State and 
Federal governments seek to buy up large parts of the Delta and 
decrease the amount of water available therein which puts the Delta 
farmers out of business and strangles the local economy. The net effect 
is that the government is trying to promote one areas' growth at the 
expense of other areas.
    Lastly, I would like to explain another way in which CALFED 
threatens the Delta rather than help it. Twenty years ago, the people 
of California voted down a project known as the Peripheral Canal. That 
project was a component of the State Water Project and proposed to move 
Sacramento River water to the export pumps without having the water go 
through the channels of the Delta; rather it would go through an 
isolated canal around the Delta. Obviously, removing more of the good 
quality water from the Delta does not improve the Delta. CALFED began 
by advocating some similar isolated facility, either across the Delta 
or around it. After a tremendous outcry from the public, CALFED changed 
its position and stated it would not seek any isolated facility unless 
and until current efforts to use Delta channels proved ineffective in 
improving water quality. The time frame given for the efforts was seven 
years.
    Last minute negotiations leading to the CALFED Record of Decision 
(conducted without public involvement) inserted a decision to ``fast 
track'' in-Delta storage. We recently discovered that a previously 
proposed private project to flood Delta islands for storage has been 
``reconfigured'' to add a fifth island and to allow water to pass from 
flooded island to flooded island without the water flowing through 
Delta channels. Attached hereto is an overhead/map of the Delta 
indicating those Delta islands the government seeks to purchase or 
control and thus accomplish the isolated transfer of water across the 
Delta, not through it. The sad fact is that CALFED intentionally misled 
us on this issue.
    Of all the threats to beneficial uses in the Delta, especially 
agriculture, I believe this is the most serious. Once the State and 
Federal projects can isolate the Delta from the fresh water of the 
Sacramento River, they will. In that event, the incentive to restore 
and protect in-Delta water quality and quantity, as required by law, 
will evaporate and the Delta will die.
    In conclusion, I request that you be very cautious before 
considering Federal legislation to force our system to provide more 
water or more protection to any particular interest. A better approach 
would be to first require the Federal Central Valley Project to fully 
mitigate its adverse effects on third parties and the environment; that 
way you stop trying to accomplish your goals by taking away from some 
to give to others. Second, you should authorize actions that will help 
contribute to the overall supply of water in California so that the 
existing laws of priority can be followed and everyone can be supplied. 
Finally, you should endeavor to protect agriculture which is and will 
continue to be necessary to feed California and the nation.
    Thank you for your time.
                                 ______
                                 
    [A map attached to Mr. Herrick's statement follows:]
    [GRAPHIC] [TIFF OMITTED] T3149.028
    
    Mr. Calvert. Thank you.
    Mr. White.

 STATEMENT OF CHRIS WHITE, GENERAL MANAGER, CENTRAL CALIFORNIA 
  IRRIGATION DISTRICT, SAN JOAQUIN RIVER EXCHANGE CONTRACTORS 
                              W.A.

    Mr. White. Thank you. Good morning, Mr. Chairman and 
members of the Committee. My name is Chris White. I'm the 
general manager of the Central California Irrigation District. 
I am testifying today on behalf of the San Joaquin River 
Exchange Contractors Water Authority. We're about 250,000 acres 
on the West side of San Joaquin Valley near Los Banos, 
California.
    First, we would like to commend you on the hard work you 
and your staff have done in a very short period of time. In 
addition to grasping this topic, you've produced some very 
promising legislation.
    The Exchange Contractors hold a very unique position in the 
California water system. We hold both riparian and pre-1914 
water rights from the San Joaquin River.
    In 1939 through historic purchase agreement an exchange 
with the Bureau of Reclamation, we exchanged the right to 
utilize that historic water for sources from the Delta. That 
Exchange Contractor Act of over 60 years ago allowed for the 
development of the Friant system of water delivery and storage 
and the water distribution of storage on the Kings River. This 
should remind us all that we have a history in California of 
being able to make decisions on a local level and having them 
benefit the entire state including the urban interest.
    Under your leadership, Mr. Chairman, current efforts by the 
Congress seem to express the position that the Federal 
Government will no longer tolerate endless agonizing in an 
effort to find the infamous win-win for everyone plan. This 
approach is guaranteed that nothing has been done to increase 
water supplies for the last 10 years.
    For the last 40 years the Exchange Contractors have led in 
the fight for drainage in our area. The regional board, EPA and 
State Water Resources Control Board, in various forms worry 
about the quality of the San Joaquin and wish to regulate 
discharges.
    In 1963 and again in 1967 the Bureau promised in Federal 
Court the San Luis Drain would be built. More recently in 
response to contractors, Exchange Contractors, the bureau has 
again been required to submit a drainage plan to the court.
    The plan that the Bureau of Reclamation has ultimately 
submitted appears to emphasize land retirement. Based on the 
Exchange Contractor's many years of dealing with this drainage 
problem, I would like to offer the following observations.
    One, land retirement is a part of the solution or can be 
part of the solution. But to rely upon it alone is again to 
adopt a short-term approach in which the only acceptable 
alternative is one that garners the least opposition. In some 
way the point has to be made that this type of short-term 
approach to problem solving on water issues is no longer 
adequate.
    Two, the construction of the San Luis drain was stopped on 
the theory that more studies were needed. Since that time the 
Federal Government has spent hundreds of millions of dollars 
and yet no solution or long-term solution has been found.
    If the local citizens and growers in our area in 1960 had 
been offered a solution or a way to solve the problem, we're 
going to give you grants and loans and we're also going to quit 
worrying about whether we might someday, somehow make a 
mistake, this problem would not exist today.
    In light of this experience of the Exchange Contractors we 
enthusiastically endorse your concept, Mr. Chairman, of a grant 
program to fund worthy projects.
    Third, new water supply facilities, new facilities to carry 
on the flexibility and sources and deliveries with which the 
Exchange Contractors made possible in the 1939 exchange have 
all been a part of this debate. Government must rid themselves 
of the notion that it is possible to study and consider 
alternatives and call that progress.
    The implementing parties must be local agencies. Progress 
can only occur, however, if government is required to grant all 
the permits in such a fashion that the project is not stalled 
indefinitely. All we need is for the Congress to provide us 
with the ability to develop new water sources and systems for 
transportation of water which will provide water supply 
security, enhance the environment and the economic well-being 
of this country.
    Again, Mr. Chairman, we'd like to thank you for the 
opportunity to testify today and we are happy to answer any 
questions.
    [The prepared statement of Mr. White follows:]

     Statement of Chris White, General Manager, Central California 
   Irrigation District, on behalf of the San Joaquin River Exchange 
                      Contractors Water Authority

    Good morning, Mr. Chairman and members of the Committee. My name is 
Chris White, and I am the General Manager of the Central California 
Irrigation District. I am testifying today on behalf of the San Joaquin 
River Exchange Contractors Water Authority which consists of the 
Central California Irrigation District, Firebaugh Canal Water District, 
San Luis Canal Company and Columbia Canal Company, situated in the 
central San Joaquin Valley near Los Banos, California.
    First, I would like to commend you on the hard work you and your 
staff have done in a very short period of time. Since becoming Chairman 
of the Subcommittee of Water and Power, you have had to learn a lot 
about a very complicated topic. In addition to grasping this topic you 
have produced a very promising piece of legislation.
    The Exchange Contractors hold a very unique position in the 
California water system. We hold riparian and pre-l9l4 water rights 
from the San Joaquin River. Historically, water was diverted from the 
San Joaquin River at Mendota Dam into extensive canals in a Northerly 
direction. This water irrigates approximately 250,000 acres of land on 
the West side of the San Joaquin River.
    In l939, through a historic Purchase Agreement and Exchange 
Agreement with the Bureau of Reclamation, the Exchange Contractors 
exchanged the right to utilize their historic water sources in the 
Kings River and the San Joaquin River for receipt of water through the 
CVP diverted from the Tracy Pumps.
    Today, Congress must understand that a great deal can be 
accomplished by local interests and entities, and the benefits of their 
acts can be felt statewide. A perfect example of that is reflected in 
what the Exchange Contractors did over 60 years ago to substitute their 
historic water source, in order to allow for development of the Friant 
Kern Canal and the development of new water storage and distribution 
facilities upon the Kings River. This should remind us all that we have 
a history in California of being able to make decisions at the local 
level which benefit the whole State, including urban interests.
    It should remind us as well that the proper role of the Federal 
Government is to assist in the financing that allows those beneficial 
projects and facilities to be built with local impetus and organization 
that allow all of our needs to be met.
    Today, the Exchange Contractors provide for groundwater management 
of the underground aquifers under their 250,000 acre service area by 
conjunctively using surface water, coordinating the extraction of 
groundwater, and carefully monitoring recharge sources. These 
groundwater areas appear to be in balance and are not overdrafted. How 
was this accomplished? Through grant programs and low interest loans 
offered by members of the Exchange Contractors to their landowners and 
tenants to encourage water conservation and control and by the Exchange 
Contractors themselves investing in capital facilities. Over the years, 
there has been a tendency to study and consider alternatives endlessly. 
The Exchange Contractors, on the other hand, have found that failing to 
act out of a fear of making a mistake poses the greatest risk.
    Under your leadership, Mr. Chairman, current efforts by the 
Congress seem to express the position that the Federal Government, 
while inviting the State of California as a partner in the process, 
will no longer tolerate endless agonizing in an effort to find the 
infamous ``win, win for everyone''. This approach has guaranteed that 
nothing has been done to increase water supplies for the last 30 years. 
And, and we are grateful for this proactive--and indeed courageous--
approach.
    The Exchange Contractors, in addition to developing long-term 
solutions to water problems in California, have some experience dealing 
with short term thinking and solutions of the recent past which may be 
helpful in this process. In l960 the San Luis Act provided that 
drainage would be provided for the San Luis Unit as part of the Central 
Valley Project. It was well known that lands in the San Luis Unit, many 
of which are at a higher elevation than the service area of the 
Exchange Contractors, would become salinized if not properly drained. 
Worse yet for the Exchange Contractors, these lands would drain 
downhill into our service area resulting in intolerable shallow 
groundwater and poor quality water rising to the surface--destroying 
some of the most productive agricultural land in California.
    For the last 40 years, the Exchange Contractors have led the fight 
to require that drainage be done. During that time, we have watched as 
shallow groundwater levels have risen to the surface of the Exchange 
Contractors' land, watched as salinity and boron levels of our drainage 
system increase due to these pressures, and have watched as the rising 
dysfunction of the State and Federal regulatory approach to the 
``drainage problem'' has made little progress toward a solution.
    The Regional Board , EPA and the State Water Resources Control 
Board in various forums worry about the quality of the San Joaquin 
River and wish to regulate discharges. In 1963, and again in 1967, the 
Bureau of Reclamation promised, in Federal Court, that the San Luis 
Drain would be built. More recently, in response to yet another action 
filed by landowners and the Exchange Contractors, the Bureau has again 
been required to submit a drainage plan to the Court.
    The plan that the Bureau ultimately submitted emphasizes land 
retirement. Unfortunately, this is only part of the solution. Based on 
the Exchange Contractors' many years of dealing with this problem, I 
would like to offer the following observations:
        l. LAfter irrigation of the upslope lands for 30 or more years 
        without an adequate drainage system, to suggest that the 
        solution is now simply to stop irrigation on those lands 
        ignores the quantity of water which was been applied over this 
        period and which is perpetually going to rise to the surface 
        within the Exchange Contractors' service area. Land retirement 
        is part of a solution, but to rely upon it alone is to again 
        adopt a short term approach in which the only acceptable 
        alternative is the one that garners the least opposition. In 
        some way, the point has to be made that this type of short-term 
        approach to problem solving on water issues will no longer be 
        adequate.
        2. LEfforts to solve the drainage problem in the San Luis Unit 
        are emblematic of the history of water decision making over the 
        last 30 years in California. It was the State of California 
        which stopped construction of the San Luis Drain, not Federal 
        inaction, on the theory that more studies were needed. Since 
        that time, the Federal Government has spent hundreds of 
        millions of dollars studying the problem and no long term 
        solution has been found. Unfortunately, the interplay between 
        State and Federal Government has been a leading cause of the 
        lack of progress. The lesson the Exchange Contractors take from 
        this experience is that if the local citizens in the area had 
        in l960 been told that the way that we are going to solve the 
        drainage problem is to provide grants--part from the State and 
        part from the Federal government--and that we are going to stop 
        worrying about making a mistake to the degree that it paralyzes 
        all action and instead, build or do something about the water 
        itself, we would not continue to have the problems that exist 
        today.
        In light of this experience, the Exchange Contractors 
        enthusiastically endorse your concept, Mr. Chairman, of a grant 
        program to fund worthy projects.
        3. LWith any solution, Congress must be explicit. New water 
        supply facilities, new facilities to carry on the tradition of 
        flexibility in sources and deliveries which the Exchange 
        Contractors made possible in l939 in the area South-of-the-
        Delta have all been a part of the debate. Similarly, it appears 
        that there has been agreement that the State government and 
        Federal government bureaucracies must rid themselves of the 
        notion that it is possible to study and consider alternatives 
        and call this progress. The implementing parties are local 
        agencies rather than the State or Federal government. Our 
        experience tells us that this is where progress can be made. 
        That progress can only occur however if the State and Federal 
        bureaucracies are required to grant all permits required to 
        implement a project deemed worthy of a grant in such a fashion 
        that the project is not stalled indefinitely. The example of 
        California and the power crisis is overused but one theme that 
        everyone agrees is present--the mix of combative regulatory and 
        legislative bodies do not make a good cake.
    In conclusion, the Exchange Contractor's experience and historical 
perspective may be of help to you in considering how to avoid the 
collapse of the California water infrastructure in the same way that 
the California power infrastructure has collapsed. The nationwide 
effects of a significant loss of California productivity due to water 
shortages is much greater than rolling blackouts and increased power 
bills. The Exchange Contractors, and others like us, have the 
resolution and the energy and the willingness to work with all of the 
stakeholders to resolve many of the problems we are discussing here 
today. All we need is for the Congress to provide us with the ability 
to develop new water sources and systems for transportation of water 
which will provide water supply security, enhance the environment and 
the economic well being of this country.
    Again, Mr. Chairman, I want to thank you for taking the time to 
hold this series of hearings on this important topic. With your 
leadership, I am optimistic that we can find some common ground and 
ultimately, find a solution to these problems. If there are any 
questions, I would be happy to answer them.
                                 ______
                                 
    Mr. Calvert. Thank you. I appreciate all your testimony and 
I think I've met with each one of you separately, together and 
you have helped teach me about what's going on here in this 
part of the state in regards to water.
    Obviously, as Mr. Herrick very ably pointed out along with 
the rest of you, is that we've got a problem. That's why we're 
here today and we'll be in San Jose on Monday. We were in 
Cerritos and we'll be at other places around the state to 
listen and learn.
    As I approach a question, it's important to point out that 
you can't say this enough that we don't have enough water and 
if we don't honestly deal with that problem, we will have 
continued conflict and no one will win and so we're trying to 
put together a piece of legislation that will move the process 
forward that will work in a balanced way for the environment, 
for the rural community and the urban community where we all 
can hopefully win or we'll all lose.
    So with that, we put together a legislation, H.R. 1985, 
which also has two other sections to the bill. One, we didn't 
take anything out of CalFed as the Record of Decision, but we 
did add to it and we put a process upon it where it would move 
things forward.
    Two sections, of course, the grant section which was talked 
about and bringing back a small loan reclamation project 
through the Bureau to the western states, which would allow not 
only for water projects, but for environmental mitigation, 
something we've been talking about for some time. Those two 
sections, by the way, are necessary and expensive, but the 
Federal Government should participate because we've imposed 
Federal law upon all water users in the deal, so any comment 
about those two sections and whether or not the State of 
California or even more specifically your areas could meet 
future needs or existing needs without those two sections. I'll 
just open it up for 5 minutes of any comments.
    Mr. Birmingham. I'll start and say absolutely not. I think 
the CalFed program is one element of the development of the 
water resources necessary to sustain the economy of the State 
of California and to allow that economy to grow. But it's not--
it is not the sole element.
    And the other two titles of your bill are equally as 
important to helping the State of California continue to grow 
its economy through the development of the infrastructure 
needed, principally storage and conveyance to have reliable 
adequate supplies of water.
    Mr. Calvert. Any other comments?
    Mr. Guy. I will echo what Mr. Birmingham said in large 
part. In my comments I focused on two particular pieces. One, 
of course, was empowering regional solutions and the other is 
investment in infrastructure. It seems those two sections of 
the bill are absolutely essential and really provide the 
foundation to do exactly that. So I think they are absolutely 
imperative parts of the bill. We'll do everything we can to 
make them work.
    Mr. Richard Moss. I would echo that sentiment. Adding that 
CalFed isn't the only environmental restoration program in the 
state that needs funding, so this provides an opportunity for 
that as well. The state system has lost a valuable commodity I 
think called flexibility by virtue of all the mandates and the 
limitations placed on the operations of the projects.
    These two other sections of the bill will help in adding in 
particular local capability to be more flexible and creative on 
how they manage and operate their systems. So it's a very much 
needed part of the bill.
    Mr. Nelson. We look at our solutions, as I said earlier, in 
the context of eliminating the gap that we have between supply 
and demand. And although CalFed establishes and stabilizes 
where we are within that gap and helps us close that gap 
somewhat, it doesn't nearly come close to helping us close it 
all the way. And the other two sections of the bill, we look at 
those as being opportunities to assist us in moving toward the 
closure of that gap.
    Mr. Herrick. I would just like to say that we agree 
encouraging local projects and funding that federally is a good 
idea, but the practice is the 800 pound gorilla of the Federal 
Government agencies destroyed it all. CalFed had a redact 
council referenced earlier that came up with numerous pages of 
recommendations and said thank you.
    The government agencies didn't take any of that into 
consideration. They trumped everything that the local people 
wanted.
    The issue of ecosystem restoration, very few people come 
out here and say we shouldn't help the environment, but again 
your intentions get perverted in practice. We have an 
environmental water act that says let's buy some water and 
release it for fisheries so we can protect exports. They put a 
condition on the barriers that protect my client that say you 
can't use them if environmental water is in the system. So in 
order to protect a certain amount of exports and fish you slit 
my clients' throats. That's what happens. That's what's going 
on right now.
    So you guys have to decide how you get these good 
intentions implemented without the lunacy of the bureaucracy in 
between you and me destroying everything and they are doing it. 
Excuse me for being--
    Mr. Calvert. That's why we're trying to fix it.
    Any other comments, Mr. White?
    Mr. White. The opportunity for these--this new yield that 
we've been discussing, you know, restoration along a river, 
let's say, is an opportunity to provide water flow for 
restoration purposes, but on the other end of that there are 
other beneficial uses that can be used as a conveyance system 
at the same time.
    There are other opportunities if we look at it in the right 
way and some of these comments relating to the regulatory 
agencies is right on line.
    Mr. Calvert. Thank you.
    Mr. Condit.
    Mr. Condit. Thank you, Mr. Chairman. Thanks all of you for 
your testimony here today. It's appreciated. It's not like I 
haven't heard it before. I appreciate it very much.
    I'd like to kind of get into the gap analysis. The gap 
analysis assumes a 70 percent supply. What does the gap show if 
there's a 50 percent supply and what if you had 100 percent 
supply, is there still a gap? You need to kind of help us 
understand that.
    Mr. Nelson. I don't have the specific numbers in front of 
you, but I think off the top of my head, if we had another 20 
percent decline from the 70 percent supply, that would equate 
to another 3, 400,000 acre feet. We're talking about 1.9 
million acre feet in total here and so I would--it would just 
increase that gap. Of course, we had a 50 percent supply of 
where we are today. Even when we had 100 percent supply, that's 
about 1.9 million acre feet and along with the sustainable 
yield in groundwater that's been determined, we would still 
have to be out on the transfer market to be able to meet the 
needs and the needs that are anticipated through the year 2025.
    In fact, in history when prior to the 1990's when we had 
100 percent supply, in many years we had what was called 
interim water available which actually supplemented our 100 
percent supply to the region, so we were able to get up and 
above 100 percent supply in many of the years prior to 1990 and 
many years took advantage of that.
    And so we're looking--70 percent supply doesn't get us out 
of the woods. What it does is it provides a baseline for us 
from which we--a reasonable baseline from which we feel that we 
can get better and along with the other provisions of the act 
be able to become sustainable.
    So 70 percent supply by no means meets our needs. However, 
it does provide a reasonable baseline from where we are today 
from which we can get better.
    Mr. Condit. If you have 100 percent, you still have a gap?
    Mr. Nelson. That's correct.
    Mr. Condit. I guess that's the point I want to make.
    Go ahead, Mr. Moss.
    Mr. Richard Moss. Congressman, I'd like to add to that. 
Prior to 1990 in the '80's there was active consideration of 
how we were going to split up the balance of the CVP yield of 
some 1.2 million acre feet that was left over in the project, 
hadn't been allocated yet.
    One of the main projects being considered was the Mid 
Valley Canal Project, which would have brought water into the 
middle of the Central Valley and served a million, million and 
a half acres. To take this additionally, why? Because the 
region suffers from a chronic groundwater overdraft.
    We already have an existing need that is beyond our supply 
that manifests itself as groundwater overdraft to the tune of 
half a million to a million acre feet. That's not counting the 
shortages they have on the West side because they have a 
limited access to that supply. From a regional standpoint we 
started this debate in the '90's water shortage and it's only 
gotten worse and worse.
    Mr. Condit. Can you fill the gap with--you mentioned water 
transfers, conservation, land retirement, underground storage, 
pumping, whatever, Mr. Nelson?
    Mr. Nelson. We look at the sustainable yield and it's 
been--we're learning more and more about what the sustainable 
yield is for groundwater in the West side of the San Joaquin 
Valley. And it's probably noteworthy that groundwater banking 
opportunities on the West side are pretty limited. We have both 
geologically and water quality-wise the groundwater 
availability is just kind of spotty in both quantity and 
quality. So we have a very limited access and limited 
opportunities to be able to--to develop the type of conjunctive 
use that we even have down in Kern County.
    So those types of opportunities aren't available to us, but 
what we do plan to do is to identify and maximize the amount of 
sustainable groundwater that we can use each and every year and 
that would be a couple of hundred thousand acre feet.
    Congressman, in the question can we use conservation and 
groundwater and transfers to eliminate the gap? Absolutely. And 
we're using those on a daily basis. I will say that the numbers 
that I have presented to you have already taken into 
consideration the sustainable yield in groundwater and a very--
and an assumption of a very, very high level of conservation 
and efficiencies, and so they are already assumed that we're 
going to be doing those things in the analysis.
    Mr. Condit. This question is for Mr. Nelson and Mr. 
Birmingham both. I'm a strong supporter of the assurances 
provision of the bill. I think it's important. It is my 
understanding that this provision can be accomplished without 
impacting other water users.
    Do you have a different viewpoint? And from your point of 
view would you please describe for me the provision whether it 
can be achieved without impacting other water users or not?
    Mr. Birmingham. I think the answer to that question is an 
absolute yes. Mr. Herrick observed that to provide the 70 
percent supply to CVP contractors south of the Delta, it's 
necessary to take water away from others. And that simply is 
not correct.
    As Mr. Nelson said in his testimony, it is possible to 
operate the Central Valley Project in a manner that is--that 
achieves the objectives of the three statutes, Federal statutes 
that Mr. Nelson identified, the Clean Water Act, CVPIA and the 
ESA, and at the same time achieve a more reasonable balance in 
terms of water supply.
    The Department of the Interior has a tremendous amount of 
discretion in the way it operates the project and implements 
those three laws. And to date over the course of the last 10 
years, the discretion has been exercised in a manner that 
reduces rather than increases water supplies, but within the 
existing regulatory baseline, discretion can be exercised in 
the manner that would easily achieve a 70 percent supply in a 
normal year. I want to emphasize that.
    We're talking about a 70 percent supply in a normal water 
year and it can be achieved without doing unreasonable harm to 
the environment and without taking water away from any other 
water agency and without degrading water quality.
    Mr. Condit. Mr. Nelson, do you have anything to add to 
that?
    Mr. Nelson. No. It's certainly our intent that this be 
accomplished without impacting another water user in the state.
    Mr. Condit. My colleagues have been generous with the time. 
I have one additional question for Mr. Guy.
    I agree with you that we must advance the infrastructure 
project and streamline the regulatory process. Could you please 
update us on the use of the progress of Sites Reservoir in 
Sacramento Valley and provide specific information of why the 
streamlined regulatory process is so important. I think we kind 
of get that, but I'm not sure everybody in the room gets that.
    Mr. Guy. Thank you, Congressman Condit, for the question. 
For most of you Sites Reservoir is located on the west side of 
the Sacramento Valley, about ten miles west of the town of 
Maxwell and it was one of the projects that was identified in 
the CalFed Record of Decision.
    What the CalFed Record of Decision stated is that CalFed 
would join with local partners in evaluating the feasibility of 
the project and in doing the environmental review. In fact, 
that is what is being done at this time.
    There is an MOU that was completed late last year between 
the Department of Water Resources, the Bureau of Reclamation, 
several of the fishery agencies, and then several of the local 
water entities, probably about ten of the local water entities, 
to move forward with this process.
    And what is happening right now is that we are getting a 
handle on what the work that has been done by the Department of 
Water Resources on that particular project, hopefully the 
environmental review and the feasibility work for that project 
will begin in seriousness later this summer. There will be 
scoping on the environmental part of the project and the 
feasibility work will begin.
    I am pleased to say that--partnerships, as everybody knows, 
are challenging and difficult. I think all in all the 
partnership between the local agencies and the CalFed agencies 
are so far working pretty darn well in the Sites Reservoir 
situation and we are hoping to meet the CalFed target of 
completing the environmental review and having the permitting 
completed by the summer of 2004. That's pretty ambitious at 
this time. But that's the goal of the CalFed decision and we're 
ready to make that commitment.
    Mr. Condit. Thank you, Mr. Chairman. I apologize to my 
colleagues. Thank you.
    Mr. Radanovich. Thank you, Mr. Chairman. Did you mention 
the possibilities of establishing or re-establishing a fishery 
below Friant Dam? If that's possible, would that take 
additional water, which I assume it would? If you're talking 
about that gap between Friant and Merced River, where would the 
water come from? Are you going to build another dam? Are we 
going to raise the dam?
    Mr. Richard Moss. CalFed contemplates new San Joaquin 
storage. In our studies we're looking at any additional source 
we can find to meet that water need, because it will be 
significant; in the order of 200 to 600,000 acre feet in an 
area that's already water short.
    Friant Dam and Millerton Lake has storage capability of 
385,000 acre feet of active storage on a river that annually 
produces about 1.9 million acre feet. It's too small for the 
watershed behind it. So we think new surface storage to capture 
the peak runoff, reregulate it, and allows us to put it into 
our underground long-term storage has some real potential to 
generate a significant chunk of that new yield that's going to 
be needed.
    CalFed is beginning the studies. The Bureau of Reclamation 
is putting together with us a Memorandum of Understanding to 
begin a study of new San Joaquin River storage. It's a delicate 
process given that we are in a program and a process with our 
new environmental partners of studying where the water is going 
to come from.
    We don't want to get out in front of that process in 
pushing new storages being the only solution when in fact we 
know it won't be. It will require water transfers. It will 
require again more conjunctive use, possibly tying into other 
watersheds with the conveyance to be able to move water around 
and bring more water into the region.
    Mr. Radanovich. With regard to the assurance language on 
the bill, Friant, have we worked out the disagreements there? I 
think is--
    Mr. Richard Moss. Well, we're attempting to. Quite frankly, 
Congressman, I'm not sure they can be worked out. We're giving 
it a shot. We share the concerns expressed by Mr. Herrick as to 
having greater definition of where the water will come from in 
order to provide this assurance.
    It's difficult given our needs for river restoration. It's 
difficult being the only other part of the CVP, south of the 
Delta, that could possibly be impacted by a Federal mandate to 
provide a certain water supply. So we're very anxious about how 
that process goes forward and the answer to your question is 
no, we have not come to closure yet on that.
    Mr. Radanovich. I want to state for the record, too, my 
original motives for being so strong on this reliability issue 
was to prioritize urban and ag interest over the environmental 
interests at least until we get to the point where we can 
accommodate them all, which I am fully supportive of. I'm sorry 
it's gotten to problems like this, but I think--to me it all 
boils down to if we can't put human needs above the 
environmental needs on a temporary basis until we get more 
water supply, then I think we're doing something morally wrong 
here. I hope we can work this language out and move it forward.
    Dan, I want to ask you a question. Should we begin a study 
in this CalFed--in this bill land retirement in Westlands, 
possible purchasing of land to make up for the contract 
deficiencies historically?
    Mr. Nelson. I think that there are definitely opportunities 
through this bill to take a look at that. Let me take on the 
broader issue, if I may.
    Unfortunately, it's becoming broadly acknowledged that land 
retirement is going to be one of the components necessary to 
bring sustainability on the West side of the San Joaquin 
Valley. I look at primarily as a result of a water supply 
situation in it, but there's also some drainage issues of 
course involved, too.
    The land retirement program is going to have to be a very 
thorough program, and as Dr. Sablan had mentioned, is going to 
have to take into consideration all the third party impacts, 
and it is my sense that CalFed could be a useful form for some 
of the discussions on that.
    Mr. Radanovich. You mentioned 70 percent shortfall of about 
800,000 acre feet in your area of the state.
    Can you translate that acre foot number into acres of 
production?
    Mr. Nelson. In the analysis, they use about 2.3 acre feet 
per acre and so the 800,000 acres would be what, about 350,000 
acres.
    Mr. Radanovich. If you were still--if you had 100 percent, 
what would be the land then that you would still be short to 
farm on the water?
    Mr. Nelson. If you're talking about geographically, where 
is that land, I would assume it would be in the upper portion 
of the San Luis unit.
    Excuse me, Congressman. That's where their allocation per 
acre even in their contract supplies is much less than other 
areas of the CVP.
    Mr. Radanovich. Would that include land in Westlands as 
affected by the nonopening of the drain, the 50,000 acres 
that's tied up in the lawsuit?
    Mr. Nelson. I imagine there would be a component of that, 
but most of the land that I was referring to that has a short--
an allocation that is less than the other areas is in another 
region, in the plains.
    Mr. Radanovich. Thank you, Mr. Nelson. I do have more 
questions.
    Mr. Calvert. Thank you, Mr. Radanovich.
    Mr. Dooley.
    Mr. Dooley. Thank you, Mr. Chairman, I just want to touch 
again on the Chairman's language and how we work through this 
because it's absolutely critical.
    In the ongoing discussions that, Mr. Moss, you've been 
having with Mr. Birmingham and others, in the language that you 
are suggesting, especially in terms of some language that 
refers specifically to cost, is that there will not be any 
adverse impact also in cost.
    I guess I'm a little bit concerned that if you do have 
something in that nature and does it also though preclude what 
might be a decision to move forward with projects to increase 
yield and supply that might in fact have an increased cost 
associated with that that we would think would be a good 
investment because of the benefit.
    How are we to assure that we wouldn't have an adverse 
implication in being able to increase yield and supply if we 
have this language in the bill?
    Mr. Richard Moss. Very good question, Congressman. There's 
great concern about cost of water. And as you well know, the 
cost in the Friant Division of CVP supplies as a result of new 
contracts and CVPIA have meant an increasing cost of 1000 to 
1500 percent over the last 10 years. That cost was very 
difficult for the districts to deal with, but nonetheless they 
have.
    The CVP is integrated from a cost standpoint. And one of 
our concerns is that if the--if there is a major expenditure to 
try to find additional water supplies to meet this assurance, 
that our grower--our growers would not be the beneficiaries of 
that additional water, they don't want to have to pay the 
additional cost.
    Heretofore, before the contracts were renewed, contracts 
were on a fixed-rate basis and that there wouldn't be any 
change in cost to other contractors as a result of new projects 
being added and those kinds of things. But ever since 1986 and 
the passage of legislation that required a full repayment of OM 
costs and the repayment of all capital costs by the year 2030, 
the CVP is taking on another direction.
    Mr. Dooley. I understand that. I'm concerned with the 
potential negative impacts if you have something in this. Even 
from the Friant perspective--
    Mr. Richard Moss. Our growers would love to be able to 
support a new project that they can see new benefits.
    Mr. Dooley. Let's play this out a little bit, though. In 
terms of some of the Cross Valley contracts and some--that 
provide some benefit to Friant, if you do have increased yield 
that goes to south of the Delta to meet the 70 percent 
assurances, it could have significant impacts even on some of 
the availability and costs of water that might be benefitting 
Friant.
    And if you have this provision in there, my concern is, are 
we setting the standard that actually can have a negative 
impact, maybe not just simply on the contract price of the 
water, but on other water that's being accessed by members of 
your unit?
    Mr. Richard Moss. Again, I don't think so. If there's a 
benefit to be derived to my growers from additional water 
supply, they are willing to pay for it. There's nothing in the 
bill that precludes them from doing that and in coming to an 
agreement that they are in fact being benefitted.
    Mr. Dooley. Wouldn't this language, though, preclude an 
investment by--
    Mr. Richard Moss. Why?
    Mr. Dooley. If it had a--
    Mr. Richard Moss. All it says in providing this assurance 
that it wouldn't cost anybody more money that isn't being 
directly benefitted by the program. I don't see where that 
provision would necessarily preclude my growers or other 
growers who are actually benefitting directly as a result of 
providing more water to being able to pay for it.
    Mr. Dooley. I hope we can do that. I guess, Mr. Nelson or 
Mr. Birmingham, if you have any comments on that.
    Mr. Nelson. One of the dilemmas we have with the cost 
provision is that historically the CVP has been based on a 
postage stamp rate. Essentially this would stray from the 
postage stamp rate cost allocations that the CVP has 
historically been.
    My sense is that's opening a very large can of worms not 
just for meeting the 60, 70 percent supply component of this 
legislation or the 70 percent supply, but it also has 
implications on any future CVP projects. I guess the biggest 
concern we have is that we think there are large implications 
in how it is that we've been allocating costs throughout the 
last 50 years that the CVP based on this language.
    Mr. Dooley. It's unfortunate we're not going to have the 
opportunity to respond to some of the questions that's going to 
be carried in the next panel. I'd just like to read you a 
statement from Nick DiCroce from California Trout.
    It says--talking about the potential water savings. They 
are talking about the 10 percent increase of price of water to 
agriculture, which they indicate to be 1.20 to 4.20, 
anticipated by one study, 3.2 percent decrease in water demand. 
And they contend that that 3.2 percent reduction would apply to 
agriculture's current usage of more than million acre feet is a 
reduction of more than one million acre feet per year.
    ``At those rates, a modest 10 percent reduction in 
agriculture water usage for a relatively small increase in the 
price of water would theoretically solve the state's predicted 
shortage of 2.9 million acre feet by the year 2020 with water 
left to spare for urban growth and river habitats.''
    I guess what they are contending is that if we had a 10 
percent increase in the price of water, that we would solve our 
water supply needs. I appreciate any comments you might have.
    Mr. Birmingham. With the Chairman's permission, I'd like to 
respond to that. The suggestion that is being made raises a 
very fundamental question. That is, are we going to solve 
California's water problem by eliminating agriculture as an 
industry in this state? That's a--the fundamental question.
    The premise for the suggestion is that increased costs will 
lead to increased conservation. As Mr. Nelson has already 
indicated, farmers in the San Joaquin Valley have almost 
exhausted the opportunities for conservation. There may be some 
room for additional conservation, but not much more.
    And so the question is, shall we take agriculture out of 
California's economy and rely entirely on industrial uses of 
water or should we continue to maintain ag?
    And that is one of the fundamental benefits that we see 
from H.R. 1985 is that the balanced implementation of the 
CalFed program will help sustain agriculture, because from our 
perspective ag is a vital component of our economy and produces 
benefits well beyond the food and fiber that we all enjoy as a 
result of it.
    For instance, the question I would ask is how much oxygen 
is produced by all of the orchards that exist up and down the 
San Joaquin Valley and I would submit it's--that there is a 
benefit to having agriculture production in the valley that is 
an environmental benefit. The use of land for agriculture is a 
valuable resource.
    Mr. Calvert. Thank you.
    Ms. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chairman. My questions are 
more directed to the issue of salinity. I think I need to know 
from either Mr. Herrick or from somebody else that might be 
able to answer is where does most of that salt come from? Where 
is the major portion? Is it Federal lands? Is it due to the 
farming areas of--go ahead. Of course, that leads to the issue 
of the saving of the Bay-Delta.
    The sanitation district in the Los Angeles County has a 
project with the beach where they are pumping recycled water to 
help maintain the salt water intrusion. Could that be used to 
be able to help maintain the flow? Those are questions--would 
that hurt the restoration of the ecosystem? Those are questions 
that kind of beg answers in my mind.
    Mr. Herrick. That's a huge can of worms and I'll see if I 
can address that briefly. First of all, reuse of water in 
various areas is a very good idea. We encourage the government 
to try to promote greater self-sufficiency in lots of areas. 
But when you go upstream of the Delta and try to conserve water 
or redirect it for other purposes, you simply decrease the 
downstream of flow. So if some municipality of farmers upstream 
decrease the amount of water that they have that drains back 
into the river or into the underground, somebody else gets 
less.
    So when you decrease a flow upstream, then New Melones Dam 
has to release more fresh water in order to meet the salinity 
standards in the Delta.
    Now, the soils on the western side of the San Joaquin 
Valley these gentlemen are more better able to comment on them 
than I am. But the Central Valley Project by importing or 
exporting water from the Delta takes water of 200 to 400 tds in 
terms of salt, which is a measure of salt and salinity, and 
takes that down to the valley. If those areas got the water out 
of the river like they previously did, I'm not saying they 
should do that now, if they did, that water was extremely good 
quality water. That was a hundred or less tds.
    When you import 200 to 400 tds water and then consume a 
large part of it, which is what plants do and that's fine, you 
have concentrated the salt. The plants don't use the salt. So 
although there are salts and things like selenium in the 
grounds down there, the problem is that you keep importing tons 
and tons of salt.
    My testimony mentions the raw numbers. It's a million tons, 
not a hundred million. That's a huge amount of salt that's just 
gathering down there. Some of it gets back down there and 
that's what causes the salinity of the rivers problems, because 
it comes in tremendous concentrations, so that comes back into 
the river.
    The issues about saving the bay we don't think are quite 
well focused, because they say don't you let that salt go down 
to the bay and flush out, don't give us your problem. That salt 
came from the bay. Now it should be at the right concentration, 
get out and we have to address that problem. It's the same 
salt.
    The selenium that comes out of the foothills down there, 
historically that just made its way to the river and went out 
the ocean, too. Now, if we're going to increase the way that 
happens and the concentration, that's one thing, but you can't 
collect it down there. You have to get rid of it some way.
    Now, the salt to our purposes is the bigger problem because 
that constantly harms my clients, but you have to be able to 
get rid of it. And there's all sorts of ways we can do this. We 
would support the other gentleman here that talk about the 
promises of the Federal Government that went unfulfilled 
regarding the drain. You have to do something. To say they 
should keep their salt is a fundamental misunderstanding of the 
problem.
    Mrs. Napolitano. How much of the land usage is lost to 
salinity? Can anybody answer that?
    Mr. Birmingham. In Westlands today because of inadequate 
drainage there are approximately 15,000 acres of land that have 
been taken out of production. We estimate that there are 
approximately 250,000 acres of land in Westlands that 
ultimately will require drainage.
    You've heard discussions about a land retirement program. 
We are involved in discussions about the potential retirement 
of some of those lands to deal with the drainage issue. It's 
important for me to point out, however, the lands within 
Westlands that have drainage problems do not drain to the San 
Joaquin River. Salts imported to Westlands don't make their way 
back to the river because Westlands doesn't discharge drain 
water outside of its boundaries.
    The question becomes how to deal with the drainage problem. 
The retirement of the land, as Mr. White suggested, is not 
going to in and of itself solve the drainage problem on the 
West side of the San Joaquin Valley.
    People talk about the West side of the San Joaquin Valley 
and some people think that refers to Westlands. In fact, the 
West side of the San Joaquin Valley refers to the entire area 
from Tracy all the way to Bakersfield to Kern County.
    Land retirement is potentially one element of a means of 
dealing with drainage, but there will have to be additional 
studies and additional measures taken to deal with drainage in 
other areas that are not retired.
    Mrs. Napolitano. Is there a threat that future utilization 
of these lands may be threatened by the increase of salinity 
usage of that irrigation--increased water in that irrigation 
water that's being imported?
    Mr. Birmingham. Absolutely. As water with high 
concentrations of salt are imported, unless the water is 
drained, the water and the salt accumulate within the soils and 
ultimately the salinity accumulates in the soil and will 
eliminate the productivity of those lands.
    That's why within Westlands there have been lands that have 
already been taken out of production because they are incapable 
of growing crops.
    Mr. White is an expert on this subject. If you have 
specific questions, I would encourage you to direct them to 
him.
    Mrs. Napolitano. I think all of you should answer them 
because I think this affects everybody. I think the reduction 
of water plus the salinity is going to affect the agricultural 
industry in California. So if you don't put that into context 
and I think we're missing the boat in that particular area 
because it's all in one. It's not separate from.
    Mr. White. Congressman, could I add a little something?
    Mr. Calvert. Final comment and then we'll go back around.
    Mr. White. Various agencies are looking at areas in the San 
Joaquin River. They are tinkering around with water quality 
discharge limits and so forth. The thing you must understand is 
that the better water quality is available in bigger 
quantities, so as you try to restrict water, let's say you set 
a standard at 500 tds for discharging into the river, there's a 
lot of 550 part water that you're going to take out of the 
system, you're going to make the downstream water quality 
worse.
    It's not an easy problem that can be solved with a 
regulatory approach. The solutions are facility type solutions, 
not regulatory. We can turn into a--very quickly into a 
spiralling type situation with water quality.
    Mrs. Napolitano. Explain who would be able to go clean up 
the discharge.
    Mr. White. Some of the projects that are offered up in the 
CalFed authorization, and to the extent that there's new yield 
in the system, this can be used in the riverine system for 
environmental benefits and as well as for water quality 
benefits.
    Mrs. Napolitano. EPA is mandating some of the sanitation 
districts to even treat groundwater runoff in Southern 
California, so expect something to happen along those lines. 
Thank you.
    Mr. Calvert. Thank you. Go through another round very 
quickly.
    Mr. Nelson, I have a question very quickly. How much water 
has been shifted in the last 10 years from water contract users 
for other purposes? Do you have an approximate number?
    Mr. Nelson. Yes. It's well over 1.5 million acre feet with 
both the state and Federal contractors.
    Mr. Calvert. 1.5 million acre feet?
    Mr. Nelson. That's annually by the way.
    Mr. Calvert. Now, we've heard numbers in normal years that 
we need about an additional six million acre feet of water in 
order to meet the needs of the various water contractors and 
environmental demands that are being placed within the system.
    Would this panel agree that that's approximately the right 
amount of additional yield that we would need in order to meet 
the all those requirements? Any comments on that?
    Mr. Herrick. I'll comment and say I don't know. It's 
impossible to get six million acre feet in any term that you're 
considering.
    Mr. Calvert. What is possible, Mr. Herrick?
    Mr. Herrick. That's a tough one. I have a disagreement with 
the rest of the panel members about what water is available 
now. If there are ways to reoperate Shasta and the Delta cross 
channel pumps to get more water, we would encourage that. 
Transfers don't do that. Transfers take somebody's water for 
money and cause third party impacts. I hope I'm not digressing 
too much. Let me just say one of the ways they are trying to 
get additional supplies is to go in the tributaries and buy 
surplus water.
    A good example of that happened in this last December where 
they purchased from Merced Irrigation District, so the water 
came down in December instead of summer power releases. That 
water was pumped across the Delta at a time when diverters on 
Middle River had no water.
    When you decrease the summer flows from Merced, you put an 
incremental additional obligation to New Melones to meet water 
quality standards in the summer. So that can be described and 
is described every time we fight it as no third party impacts, 
but it does have third party impacts.
    Again, I'm sorry, I'm the crazy cousin that nobody would 
like to look at in these kind of things. But it's accomplished 
in a manner--and I'm not blaming these gentlemen here. I'll 
blame the Bureau of Reclamation. It's accomplished in a manner 
that I describe as cheapening.
    If the Bureau wanted to buy more water from wetlands down 
in the valley and bought it itself and had the state pump it, 
which they didn't have surplus pumping capacity, then a 
limitation on pumping kicks in, which was set forth. That 
limitation is what on--the feds using the state's pumps. That 
limitation protects my clients.
    So they needed this water for the wetlands, the Bureau did, 
so the Bureau paid the seller to temporarily change its point 
of diversion from the Merced River to the state pumps. So 
Merced Irrigation District was diverting water to state pumps 
instead of at its dam. When you do it that way, those 
limitations on export pumping don't apply.
    So if you describe it--don't do anything differently, but 
describe it differently, the protection to my clients 
evaporates and we complained about that and the answer was, 
well, if you describe it that way, we don't have to protect 
you.
    So anything you come up with here, somebody will twist and 
bend and cheat because I submit there isn't any extra supply 
out there.
    Now, there are ways of getting incremental benefits from 
doing this and changing that, I agree with that completely. 
There are ways to do it. But any significant amount of water is 
simply a reallocation in type and place. If you can do that 
with those wet time of year flows, wonderful, we'll back you up 
all the way. But that's not how it happens.
    Mr. Calvert. Mr. Condit.
    Mr. Condit. I'll be real quick. Mr. Birmingham made a 
comment about the action plan that Governor Davis and Senator 
Babbitt signed and you made a reference that it was sort of 
totally ignore.
    I know a lot of people in this room and a lot of people 
across the state from all the interests were involved in that 
process. Why is it being ignored and who's ignoring it?
    Mr. Birmingham. I know, Mr. Condit, that you were 
intimately involved in the discussions that led up to the 
execution of the Framework for Action as were a number of other 
Members of Congress and Senator Feinstein.
    What is stated in the Framework for Action is unambiguous. 
It states that in normal years the CVP contractors south of the 
Delta that have been disproportionately impacted by recent 
regulator actions should receive an increased supply of 15 
percent to a 65 or a 70 percent allocation.
    When that document was executed, we as affected parties 
were told that in developing the Record of Decision, we would 
be able to participate, as would all interested parties, 
including municipal water users and environmental water users, 
to insure that that promise became real.
    Well, the Record of Decision was prepared by the Federal 
agencies and the state agencies that make up CalFed and we were 
told that because of the process, we would not be included in 
developing the Record of Decision.
    And when the Record of Decision came out, there were new 
provisions concerning the operation of the projects under 
biological opinions obtained in connection with the Record of 
Decision that suggested to us that it would be very difficult 
for the projects to be operated in a manner to accomplish the 
improved water supply.
    So the specific answer to your question of who's ignoring 
it, I would say bluntly, it's the Fish and Wildlife Service and 
it is the National Marine Fisheries Service. The projects can 
be operated in a manner to protect listed species. It's vitally 
important to us that those species be protected. Our water 
supplies aren't really going to begin to improve until the 
environment is restored. That's why we think it's critically 
important that H.R. 1985 mandate be a balanced approach. Our 
water supplies aren't going to improve until the environment 
improves. That's important.
    But the discretion that was exercised by Fish and Wildlife 
Service, and hence in developing those biological opinions, 
created a tremendous amount of ambiguity and uncertainty 
concerning the ability of the CVP to affirm the framework made 
in the action.
    Mr. Condit. So the action plan was basically ignored 
administratively, there was an administrative fix that could 
have happened, but didn't happen? Is that what I understand you 
to say? I don't want to put words in your mouth.
    Mr. Birmingham. I don't want to say it was totally ignored, 
but I would say it was manipulated.
    Mr. Condit. Don't you think--I'm sorry, Mr. Nelson.
    Mr. Nelson. I'd like to expand on that a little bit and it 
goes back to what Mr. Herrick said earlier.
    On a policy level I think there was full intent and full 
expectations that this 15 percent up to 70 percent would be 
done. However, the translation between that policy discussion 
and those policy agreements from the folks actually out in the 
field making the operational day-to-day decisions got lost. And 
so--although it wasn't ignored maybe by those policy folks that 
made that commitment, it certainly was--the commitment was made 
in such a way that allowed the regulatory folks to ignore it 
entirely and it was ignored. There was no consideration of that 
15 percent when coming up with the operations for this year's 
supply.
    Mr. Birmingham. As an example, the initial forecast of 
operations developed by the Department of the Interior 2 months 
after the Record of Decision was signed, or 3 months after the 
Record of Decision was signed, said that if the next water year 
is a normal water year, CVP contractors south of the Delta will 
get 45 percent of 45 percent supply. That was immediately after 
execution of the Record of Decision and I know that there was a 
lot of pressure put on the Department of the Interior at the 
end of the last administration to fulfill the promise that was 
made in the Framework for Action.
    Mr. Condit. That's my point. I thought it was pretty 
phenomenal that you had Governor Davis and Senator Babbitt sign 
that had some security for you guys to get your allotment of 70 
percent. So I was just trying to figure out where it fell off 
the chart. You're saying administratively. That's what I 
understand.
    Mr. Nelson. Yes.
    Mr. Birmingham. Yes.
    Mr. Condit. Let me just make one other point. I think Mr. 
Birmingham makes an excellent point. Actually, I think the 
State of California and the Federal Government has to decide 
whether the agricultural is going to be in business in 
California. I think that's how crucial water policy is here is 
whether or not we survive.
    We make reference to the West side, people do think I'm 
talking about Westlands when you said west side, but the west 
side is a whole region of the State of California that produces 
a tremendous amount of the economy for California, the 
agriculture of California.
    If we continue with this policy where we have land 
retirement or you don't get your allocation, you're down to 45 
percent or what have you, from your point of view, you guys, 
some of you work in these small communities on the West side, 
what happens?
    I mean, we used to talk about a thing called plant closure 
and force companies who were going to close down plants to do 
some sort of compensation to employees for a month or a year or 
what have you. This is quite a controversial issue.
    My perception is if you wipe agriculture out in California, 
you're going to end up with plant closures. You're going to end 
up with a whole region of the state with no economy. You 
already have a massive problem with unemployment.
    In your perspective, you guys work over there, live over 
there, what do you think happens if we continue down this path 
of no comprehensive water policy that keeps agriculture strong 
in California?
    Mr. Birmingham. We are on the verge of a collapse of the 
agricultural economy on the West side of the San Joaquin 
Valley. As you say, that goes well beyond Westlands. That is 
not an exaggeration. It isn't due totally to inadequate water 
supplies. Low commodity prices, high cost of energy plays a 
part in that.
    As Dr. Sablan very eloquently stated, when farmers and farm 
workers and businesses people hear in December that next year 
if it's a normal year, you're going to get a 45 percent supply, 
farm workers leave and no reasonable businessman is going to 
want to invest the money necessary to develop and maintain 
plants in the area.
    We've already seen the failure of processing plants. I 
mean, the best example is Tri-Valley Growers last year. And 
again, you can't lay that entirely at the feet of inadequate 
water supplies, but inadequate water supplies and unreliable 
water supplies certainly play a major role in the failure of 
that cooperative.
    Mr. Condit. Dan, I know you're over there.
    Mr. Nelson. Just simply put, the rural economies are based 
entirely on agriculture and agriculture--the sustainability of 
agriculture is entirely based on a sustainable supply. So 
taking away that supply obviously just guts the economy for a 
wide group of rural communities and those dependent on them.
    Mr. Condit. David.
    Mr. Guy. If I could just add, too, there's also a west side 
of the Sacramento Valley that is in much the same predicament 
in that they received 60 percent of contract supplies this 
year. They also receive water from the Central Valley Project. 
Not to rehash things that have already been said, but I think 
everybody's aware of the agricultural crisis.
    I think what you're seeing is increasing pressure upon the 
water managers to make sure that one particular input, being 
water, is just that much more reliable and that much more 
affordable.
    And that's again going back to the bill, why I think these 
investments in infrastructure and empowering regional solutions 
are so important so that we can try to maintain and sustain 
that agricultural and rural economy.
    Mr. Condit. Thank you.
    Mr. Calvert. Mr. Radanovich.
    Mr. Radanovich. Thank you, Mr. Chairman. On the issue of 
reliability, I somehow think that this has gone from setting 
statewide priorities while we're in a short term or while we're 
in a low supply period and setting standards or priorities 
until we get into enough supply that we can satisfy all the 
needs of water in California and somehow has gotten to an issue 
that is strictly for Westland's own water supply.
    I'm kind of discouraged at the fact that it's come to that. 
To me it's a reliability issue for all the needs, human needs 
of Californians throughout the state.
    Is there a way to get it off of strictly a Westlands issue 
or a Westlands/Friant issue and get it back to a statewide 
priority issue?
    Somebody had mentioned the fact that there was plenty of 
flexibility in the agencies that implement DSA, CVPIA, and some 
of these other standards so that there might be flexibility 
enough to meet these needs.
    Is there a way we can get that flexibility down in law so 
we get this being off a Westlands and/or a Westlands/Friant 
issue and set it--get a statewide priority system that puts 
urban and ag uses above environmental issues on a temporary 
basis so we can get to a supply point to meet the needs of all?
    Do you have any questions, Tom, because I'm frustrated that 
it's gotten to this point. I really am and it shouldn't be that 
way.
    Mr. Birmingham. I agree completely. I have heard people say 
and the people that say this are misinformed, that--I don't 
think they are misinformed, I know they are misinformed. That 
the shortages are being imposed on the West side, AKA 
Westlands, because that's the most recently developed area. 
They are the newest contractors. That's just wrong.
    First, Bill Harrison who is the general manager of Del 
Puerto water district who is in the audience, they were one of 
the first contractors in the CVP. Del Puerto Water District is 
also on the West side. San Joaquin Valley is suffering from the 
same shortage as is Westland.
    Mr. Radanovich. Tom, then, how do we get reliability into 
this bill so that it works for everybody in California rather 
than being a Westland issue?
    In my mind it is not only California is short of water and 
it will be until we get additional supply. We've got to figure 
out a way to make this thing work without it looking like 
California's agriculture is eating each other up and this issue 
is going to go down the tubes.
    Mr. Birmingham. I think one solution to that is by 
mandating, that none of these uses--when I say these uses, I 
mean municipal use, agricultural use and environmental use has 
priority. The CVPIA--as I said in my comments, one of the 
purposes of CVPIA is to achieve municipal balance. 
Unfortunately, that was interpreted by the last administration 
as giving environmental usage a priority.
    All of the work that has been done to date in the CalFed 
program has been to restore the environment. Maybe that was 
appropriate, but we are at a point now--and I think this is 
what you are saying. We are at a point now where we have to 
accomplish benefits for the other CalFed purposes in addition 
to restoring and enhancing the environment. That means 
implementing the program in a way that accomplishes a balanced 
implementation.
    Mr. Radanovich. I applaud the fact that you're working 
together. You guys are doing good. But rather than coming up 
with language that's going to satisfy both Friant and Westlands 
in this thing, can you come up with language that satisfies the 
state in general and really goes toward the reliability issues 
that I want to see that I think most of the rest of 
Californians want to see? Is it possible to come up with 
something like that?
    Mr. Birmingham. The answer is yes, and we would look 
forward with working with you and your staff to come up with 
that kind of language.
    Mr. Radanovich. I'd love to see it.
    Mr. Richard Moss. Not to be a wet blanket, but you can't 
think of a more complicated system of water allocation and 
water priorities than the California water law system. I don't 
think there's any appetite--at least I've never seen any 
appetite on the Federal front, especially in this Committee, to 
preempt California water law and California water rights.
    Beyond that, there is an established set of priorities as 
to how the project gets operated. We just had a very recent 
court case which again reaffirmed the priorities, if you will, 
to pump water to Tracy by Exchange Contractors that was trying 
to be upset and overturned.
    So you have to be very careful when you come in and try to 
overlay a Federal mandate that's going to set--upset, 
potentially upset existing priorities of operations and 
existing law of both on the state and Federal level by just a 
broad brush priority system.
    I'd be glad to work with you on it, Congressman. I'm not 
sure it can be accomplished.
    Mr. Birmingham. It won't surprise you, on this issue I 
disagree with Mr. Moss. I don't think it's a matter of imposing 
Federal law on state water law. I think it's a discretion of 
describing to Federal agencies how they should exercise 
discretion in implementing Federal statutes. That is one of the 
purposes of Congress.
    Mr. Radanovich. I guess I would like to leave it as being--
if you could help me with a priority system for a reliability 
system for California urban and ag water uses rather than 
something strictly for Westlands, I'd like to work on that.
    Mr. Nelson. Just a brief comment. Again, this 70 percent 
provision isn't strictly for Westlands. There are-- as has been 
noted quite a few times, there are 24 other ag service CVP 
contractors south of the Delta that are experiencing the exact 
same shortages and the exact same restrictions as Westlands.
    The 70 percent supply was the--and the assurance of the 70 
percent supply was as a result of a broad acknowledgment by 
everyone from Governor Davis to Senator Feinstein to 
Congressman Condit to actually anyone that's involved in 
California water that there has been disproportionate impacts 
as a result of redistributing water over the last decade from 
water uses to environmental uses, that there have been 
disproportionate--
    Mr. Radanovich. That's the way it started a year ago. Now 
metropolitan water is calling up and saying we're not sure this 
is very good in weighing on behalf of the urban community and 
I'm saying it's not necessarily going to benefit them. Now 
you've got problems with Friant even in the agriculture 
community.
    What I'm asking you to do is come up with something that 
works for all of urban and ag water uses in the state that will 
also serve Westlands' needs as well. Otherwise we're going to 
have problems.
    Mr. Nelson. We are committed--and we thought that the 
language accomplished the increased water for the west side of 
the San Joaquin districts while not impacting anybody else and 
we thought we had come to closure on that particular part of it 
and that's our intent. And we're committed to continue working 
toward making sure that the legislation assures this while not 
impacting anybody else.
    [Discussion held off the record.]
    Mr. Dooley. I guess again a little bit of frustration in 
representing the area which is arguably having some of the 
highest levels of unemployment in the nation that associated 
impacts in terms of some of the highest incidence of childhood 
poverty and highest incidence of teenage pregnancies and the 
lowest rate of health insurances being offered, which is all 
attributed to the state of economy.
    When we're dealing with public policy issues here in terms 
of--there's some groups out there that are going to testify on 
the next panel that we don't need additional supply which would 
contribute additional yield--advocating a policy that we can 
have what sounds like a very modest proposal in terms of a 10 
percent increase in water prices which is going to be $1.20 to 
$4.20 cents acre foot as they testified, that that can be the 
future needs of the state's water usage.
    In spite of the empirical data that you can rely on rather 
than theoretical projections they are making in terms of what 
they faced in the last 10 years, what has been the increase in 
water prices that you folks have faced?
    What has that contributed to increased supplies and, Dan, 
you talk, and what has been the percentage increase that you've 
seen?
    Mr. Richard Moss. Well, we've seen increases in our water 
rates for our Class I firm supply from $3.50 acre foot up to I 
think it's right about $38.00 acre foot. Class II went from--
which is the unstorable wet season water that we use for 
groundwater recharge from $1.50 up to $25.00. There has been no 
reduction in water use as a result of those increase in costs. 
There's been a lot of money taken out of our local economies as 
a result of that, but not a decrease in water use. We have some 
of the highest efficiencies in the world. Where water shortage 
is already, we have lots of incentives to use our water as 
efficiently and effectively as possible.
    Mr. Dooley. What are the relative increases that you've 
seen?
    Mr. Nelson. Those numbers are fairly comparable. We do have 
some areas up to 60 or 70 dollars per acre foot. The other 
point that's probably noteworthy here is not only do we have 
increased costs on the CVP water we get, but we're also being 
chronically short. We're out on the water market every year. 
That gets up into the $150 range per year.
    Mr. Calvert. Thank you. We'll take a 10-minute break and 
we'll introduce our next panel.
    [Recess.]
    Mr. Calvert. We'll be introducing our third and last panel. 
While they are coming forward, I have a couple of announcements 
to make.
    First I'll introduce them, Mr. Ryan Broddrick, Director of 
Conservation Programs, Valley/Bay CARE, Ducks Unlimited; Martha 
Guzman, United Farm Workers of America, AFL-CIO; Susan Redfern, 
landowner; and Mr. Nick DiCroce, Member of Board of Governors, 
California Trout.
    I would like to submit for the record a list of 
endorsements that we just received, including the Association 
of California Water Agency, Associated General Contractors of 
California, Bay Area Council, California Building Industry, 
California Business Property Associations, California Business 
Round Table, California Chamber of Commerce, California Council 
of Manufacturers Technology Association, California State 
Council of Labors, Valley Industry and Commerce Association, 
State Water Contractors, Southern California Water Committee, 
Orange County Business Council, Northern California Water 
Association, Mountain County Water Resources Association, Los 
Angeles Area Chamber of Commerce, Central Valley Project Water 
Association, and Cal-Nev Conference of Operating Engineers.
    If no objections, we'll submit these for the record.

    [A letter submitted for the record by California Action on 
Water follows:]

[GRAPHIC] [TIFF OMITTED] T3149.038

[GRAPHIC] [TIFF OMITTED] T3149.039

    Mr. Calvert. Welcome, thank you for coming out today and if 
you weren't here, we have a 5-minute rule. We try to stay 
within that for testimony so we can allow plenty of time for 
questions. You'll see a green light, then a yellow light, 1 
minute remaining, and then the red light comes on.
    With that, Mr. Broddrick, you may begin.

STATEMENT OF RYAN BRODDRICK, DIRECTOR OF CONSERVATION PROGRAMS, 
                VALLEY/BAY CARE, DUCKS UNLIMITED

    Mr. Broddrick. Mr. Chairman, members of the Subcommittee, 
thank you for the opportunity to speak before you today. I 
provided written testimony. I'll just try to highlight a few 
key points to stay within the time allotted.
    I am the Director of Conservation Programs for Ducks 
Unlimited's Western Regional Office. That regional office was 
established in 1987. Prior to that time Ducks Unlimited 
invested primarily in Canada to ensure the conservation of the 
continental waterfowl population.
    I think the parallel is in the mid '80's the Central Valley 
of California was recognized as critical to the conservation of 
waterfowl and Pacific Flyway. Up to 60 percent of all the 
waterfowl, and I'm not just referring to those that are ducks 
and geese, but to shore birds as well, reside in this Central 
Valley during the annual migration. So the Central Valley and 
the water security for that Central Valley and how we meet the 
challenges of water security in the Central Valley dictate 
essentially the health of 60 percent of the Pacific Flyway.
    The Flyway obviously does not have a similar status of 
endangered and threatened species that some of the salmon and 
native fish enjoy. That should not be a criticism. That should 
be a succeed statement.
    The issue as it relates to water security in California and 
why Ducks Unlimited's mission is absolutely tied to 
California's water future is the wetlands and the wetlands we 
manage, associated uplands, the riparian habitat and all the 
environmental benefits associated with wetlands are tied 
directly to the managed agricultural irrigation system in 
California. Whether it be Northern California, Central 
California, both the Sacramento component, the San Joaquin 
component, much of what the public and private wetlands of this 
state are dependent upon managed water.
    So security of that water, the ability to have water both 
for aqueduct and terrestrial resources, the ability to have 
water to be introduced into the wetlands during that peak 
migration when we have 8 to 12 million waterfowl visiting this 
state, that is an obligation by the way to provide habitat to 
them--whether they are hunted or not, that is a habitat issue. 
That is why we are here testifying.
    The questions you raised with respect to what has 
contributed to the declines or to the conflicts we currently 
have, obviously we focussed in the testimony earlier and then 
today probably over the last decade of issues, CVPIA, CalFed, 
the Bay-Delta Act, the Bay-Delta Accord.
    Certainly those were--if those documents in the CalFed 
Record of Decision and the framework established in August 
haven't identified the challenges and opportunities for 
California, there is no other document that's more definitive. 
I think that has been established for us.
    I think the issues of fisheries dominating how and where we 
use environmental water has been merely a function and I don't 
want to trivialize this--dramatic declines in fisheries from 
the '70's, Federal Endangered Species Act on some anadromous 
salmonids and delta smelt, cause and effect relationship was 
very easy to establish. Water was a common habitat issue.
    The state and Federal water projects were the easiest and 
most direct response to reduce those declines. That's not to 
trivialize how complex that is, but it's certainly the sum 
total of where we are today.
    We have established in the CalFed process, both the science 
program and environmental water account program a variety of 
balance components that resulted in the Record of Decision in 
August. From Ducks Unlimited's viewpoint, our wetlands values 
and our mission is limited to wetlands values understanding 
those are a lot broader than just ducks that are best served as 
nested underneath a broader restoration plan and absent 
investing in water security, whether it be surface storage, 
groundwater use, additional groundwater use or conjunctive use, 
we will have a drought. When we have that drought, there will 
be demands for water in a crisis mode and my greatest fear and 
my experience of history will suggest that fisheries and 
waterfowl and wetland dependent species in a crisis will lose, 
so we need to invest now, whether it be surface supply, 
additional groundwater storage, make decisions, implement the 
CalFed Record of Decision in a balanced fashion that requires 
capital.
    And I urge your support. Thank you for the opportunity to 
testify to that. We need implementation that requires Federal 
and state leadership in critical Federal funding.
    [The prepared statement of Mr. Broddrick follows:]

    Statement of Ryan Broddrick, Director of Conservation Programs, 
                 Valley/Bay CARE, Ducks Unlimited, Inc.

Introduction
    Chairman Calvert, members of the subcommittee, thank you for the 
opportunity to speak before you today. I am the Director of 
Conservation Programs for Ducks Unlimited's Western Regional Office, 
Valley/Bay CARE Initiative in California.
    Ducks Unlimited was founded in 1937 by concerned and farsighted 
sportsmen and conservationists. It has grown from a handful of people 
to an organization of over 800,000 members. At the inception of Ducks 
Unlimited, Inc., and for many years thereafter, the focus in waterfowl 
conservation was protection, restoration, and enhancement of wetlands 
and associated uplands in the Canadian prairie breeding grounds.
    In 1984, Ducks Unlimited, Inc., while maintaining financial support 
for continued conservation in the breeding grounds of Canada, 
recognized the increasing need to secure wintering and breeding habitat 
within the continental United States. The Western Regional Office of 
Ducks Unlimited, Inc. was opened in 1987 in recognition that California 
was critical to maintaining the health of the Pacific Flyway. The 
Central Valley supports up to 60% of the total duck and goose 
population of the Pacific Flyway. On a continental scale, the Central 
Valley provides a wintering home for 100% of the world's population of 
Aleutian Canada Geese; 100% of the Pacific Tule Geese; 66% of North 
America's Tundra Swans; and up to 65% of North America's pintails. It 
is important to note that California has lost approximately 95% of its 
historic wetlands and currently cereal grain agriculture provides a 
large seasonal offset to the loss of historic wetland habitat in 
meeting waterfowl forage needs.
    Since 1987, Ducks Unlimited, Inc. in California, has worked through 
partnerships on private and public lands to enhance, restore, and 
protect approximately 205,00 acres of wetlands and 23,500 acres of 
associated uplands at a cost of over $60 million. Much of this work to 
date focuses not on large net expansion of wetland acreage 
(approximately a 45,000 acre increase that DU has participated in) 
relative to historical wetlands, but rather insuring that wetland 
values are enhanced biologically and improved operationally with 
respect to water management.
    Waterfowl are not the only beneficiaries of Ducks Unlimited, Inc's 
habitat work. Wetlands improve the overall health of our environment by 
recharging and purifying groundwater, moderating floods, reducing soil 
erosion and providing recreation. The wetlands, riparian, upland, and 
agricultural lands that provide habitat for waterfowl, also provide 
essential habitats for hundreds of other wetland dependent plant and 
animal species, supporting over 50% of California's threatened and 
endangered species during some stage of their life cycle. The majority 
of seasonal wetlands critical to support peak winter migratory 
waterfowl and shorebirds in the Central Valley, whether public or 
private lands, are dependent upon managed water. The same reservoirs 
and conveyance structures that provide water for agricultural, urban, 
and industrial use, provide water for managed wetlands, two thirds of 
which remain in private ownership. In a similar fashion the seasonal 
wetland benefits of rice and other cereal grains in the Central Valley, 
play a critical role and once again are dependent upon managed water.
    The mission of Ducks Unlimited, Inc. is to fulfill the annual life 
cycle needs of North American waterfowl by protecting, enhancing, 
restoring and managing important wetlands and associated uplands. The 
Ducks Unlimited, Inc. mission, combined with the goal of the North 
American Waterfowl Management Plan (NAWMP), which is to rebuild 
waterfowl populations to the levels of the 1970's, necessitates our 
involvement in the work of this subcommittee related to Central 
California Water Security- Opportunities and Challenges.
    Ducks Unlimited, Inc. fundamental role is making habitat 
improvements on the ground. Uncertainty and indecision with respect to 
water reliability risks progress made to date, and frustrates 
intelligent conservation strategies for the future.
Factors Leading To The Challenges Facing California Today
    The vast over simplification, is that the Central Valley Project 
developed in the 1930's, and the State Water Project developed in the 
1960's, were developed to meet project purposes for a state with 
roughly a third of the current population. Those project purposes did 
not include societal values reflected in mandates such as the National 
Environmental Protection Act, Federal Endangered Species Act, Federal 
Clean Water Act, California Environmental Quality Act, California 
Endangered Species Act, or the North American Waterfowl Management 
Plan. Reconciling the conflict is further complicated by the reality 
that much of the ecosystem capacity has been dramatically altered long 
before the respective water projects were completed, making the 
challenge of ecosystem restoration as a response to individual species 
recovery a difficult task. Of the hundreds of species of wildlife in 
California that have attained threatened or endangered species status, 
it was relatively easy to identify causes of direct and indirect 
mortality for anadromous salmonids and delta smelt. The declines were 
dramatic, the common habitat demand was water, and modification of the 
Central Valley Project and State Water Project operations was the 
principal response to reverse the declines.

Actions and Measures Taken to Improve Water Supply, Quality, and 
        Reliability
    From a wetlands perspective Ducks Unlimited, Inc. has focused on 
the following components that attempt to improve water supply, quality, 
and reliability in both direct and indirect fashion.
     Improve water use efficiency through state of the art 
survey and design of wetland enhancement and restoration projects while 
still maintaining habitat diversity.
     Develop alternate water supplies including the use of 
wells, recognizing that ground water may improve flexibility in 
maintaining wetland values and moist soil management.
     Improve fish passage by working to develop fish screening 
projects and water management strategies that contribute to fisheries 
recovery while still maintaining habitat values for wetland and 
terrestrial species.
     Continue research to refine our understanding of the 
biological needs of waterfowl and wetland dependent species.
     Establish GIS interactive models that assist in making 
land use and conservation decisions, and ranking relative priorities 
with respect to wetland conservation investment. (Refer to attachments 
for examples)
     Integrate wetlands restoration into the broader mosaic of 
ecosystem restoration that provides benefits for wildlife while at the 
same time contributes to flood control, improved water quality, 
conjunctive water use, and maintenance of wildlife friendly 
agricultural lands.
    It is obvious that the ability of Ducks Unlimited, Inc. to 
accomplish the above actions is dictated by much broader and complex 
public policy decisions related to agriculture, environmental 
restoration, and water reliability.
    From an on the ground habitat restoration perspective, the 
influence of the endangered and threatened species provides opportunity 
for habitat development consistent with our mission, while at the same 
time often creates indecision from partner agencies related to 
implementing actual habitat improvements as we attempt to meet 
competing habitat needs. By necessity, the decision making process is 
longer and more expensive. Opportunity for biological disagreement 
seems to increase in an exponential versus linear fashion as habitat 
species preferences are added to the desired habitat outcome. 
Accordingly, an over arching multi agency organization such as CALFED 
and specifically the components related to Ecosystem Restoration Plan 
and Science Program provide the opportunity to reach agreement in a 
more timely fashion and proceed with the on the ground restoration.
    For highly managed seasonal wetlands of the Sacramento and San 
Joaquin Valley, the availability (quantity, quality, time, and 
duration) of water is the critical component to not only flooding 
seasonal wetlands for the fall migration, but also meeting the diverse 
habitat needs hundreds of resident species and other migratory non game 
species that require the upland and riparian habitats so often 
associated with wetlands. Absent a reliable water supply, these habitat 
values cannot be maintained. Accordingly, the commitment made to refuge 
water supplies (including private wetlands in the Grasslands Water 
District) contained in the Central Valley Project Improvement Act, 
Section 3406(d) have been critical to wetlands conservation.

Additional Measures or Assistance Needed In Short, Mid, and Long Term 
        To Improve Water Security
    To provide a context for the additional measures or assistance 
needed, I think it is important to recognize the progress that has been 
made to date. The establishment of Central Valley Improvement Act, Bay-
Delta Accord, and CALFED-Bay Delta Program in the last decade 
identified the challenges and opportunities. Investments in ecosystem 
restoration from CVPIA restoration funds, Bay-Delta Act, Category III, 
State Propositions 204, 12, and 13 provide an unprecedented investment 
in resolving the accumulated conflicts of our current level of 
development.
    The most dramatic progress has been in improving salmonid fish 
passage with the screening and/or consolidation of diversions, removal 
of barriers, and in stream flow improvements. This progress was 
possible because landowners and water agencies recognized that 
enhancing salmon survival improved the reliability of their water 
supplies by addressing the risk of regulatory intervention disrupting 
delivery and substantial public funding made improvements a good 
business decision. I believe this dynamic must be replicated across the 
CALFED program areas to insure continued improvement. The Environmental 
Water Account (EWA) is another example of development of a tool that 
would have never occurred absent the CALFED process. EWA provides an 
alternative to strict regulation that is adaptable to the realities of 
water supply and biological needs. It needs the opportunity to prove 
it's utility as an effective tool. It is important to recognize that 
the CALFED record of decision developed during a period of time 
uninterrupted by prolonged drought and before the effects on water 
supply are realized in meeting contractual limits from the Colorado 
River.
    The following, we believe are important to consider in developing 
water security, while at the same time improving ecosystem function and 
insuring environmental benefits.
     Recognize that without a commitment to continue the 
process of identifying additional surface supplies, it will be very 
difficult to overcome the hesitancy of landowners and water agencies to 
innovate and enter into partnerships to provide environmental benefits.
     Approach surface water supply development with the 
objective of incorporating carryover capacity to help meet water 
demands for agricultural, urban, municipal, and environmental needs, 
for the predictable drought cycle that inevitably occurs in California. 
For in Delta and/or south of delta storage, provisions should be 
considered to insure that CVPIA, Section 3406(d) water supplies for 
refuges and Grasslands Water District be included to provide long term 
flexibility, assurance of supply, and integration with regional water 
management.
     Approach existing and new conveyance capacity as a tool 
to not only provide direct delivery and delivery to storage, but also 
provide flexibility in exchanges and transfers which incorporate 
environmental benefits that serve regional urban, municipal and 
agricultural needs.
     The future of wildlife in California, as across the 
nation, is inseparably tied to actions undertaken on private lands. In 
the Central Valley, agriculture remains the dominant use on these 
lands. It is our view that conservation of agricultural resources 
provide significant additional opportunities for developing seasonal 
wetlands, associated uplands, and riparian corridors that can provide 
multiple environmental benefits. This opportunity can only be realized 
if agricultural interests can undertake partnerships as a prudent 
business decision that compliments their core business, rather than 
compromises it.
    I offer this testimony from the perspective that the mission of 
Ducks Unlimited, Inc. as it relates to the Central Valley, is 
inseparably tied to implementing a comprehensive water plan that 
addresses competing needs. Ducks Unlimited, Inc. applauds Chairman 
Calvert and members of the Subcommittee for conducting this field 
hearing and urge your continued leadership in this critical endeavor.
                                 ______
                                 
    [An attachment to Mr. Broddrick's statement follows:]
    [GRAPHIC] [TIFF OMITTED] T3149.029
    
    Mr. Calvert. Thank you.
    Ms. Guzman.

  STATEMENT OF MARTHA GUZMAN, UNITED FARM WORKERS OF AMERICA, 
                            AFL-CIO

    Ms. Guzman. Good morning. My name is Martha Guzman. I'm a 
legislative analyst for the United Farm Workers of America, 
AFL-CIO. I'm also the technical researcher for the California 
Safe Drinking Water Program which is an EPA water program that 
has targeted over 20 communities in the Central Valley from 
Fresno to urban.
    We are here to give a perspective of how a reliable water 
supply impacts farm workers. We heard earlier from Dr. Sablan 
and others of the direct relationship that exists between farm 
workers and agricultural production, that without farm workers 
we would not have the industry that exists today.
    But the inverse exists as well, that without the resources 
of land and water for the ability to produce there can be no 
demand for labor. Farm workers are undeniably directly impacted 
and integrated by any changes in the agricultural production.
    As you continue to examine the needs for this reliable 
source of water, we ask that you examine a little deeper into 
why--what the reason is for this reliable source of water. For 
the UFW a reliable water supply is essential for a sustainable 
agricultural industry and a necessary component for sustainable 
agriculture is having a sustainable income and a sustainable--
and a standard of living for workers that allows it to function 
and prosper.
    We are committed to the Constitution of California that 
requires the beneficial use of water for the right to use the 
water. This beneficial use of water means providing a benefit 
to the economy, the environment, the land, air, and more 
importantly the workers in the communities that are impacted by 
its use. The beneficial use of this public resource is also 
found in Federal law.
    In the late '30's and early '40's with the Central Valley 
Project there was the intention to embrace the concept of using 
water as a tool for fostering sustainable development by 
providing water to family farmers with the previous limit of 
160 acres.
    The concept of providing water for the--providing 
environmental and economic sustainability for our communities 
must continue to be a driving force behind Federal and state 
water policy.
    The United Farm Workers is currently involved with the 
CalFed Bay-Delta program and was instrumental in putting 
environmental justice requirements and guidelines in the Record 
of Decision.
    The guidelines for these projects are put in place for 
programs and for specific projects before they are completed 
and before they are authorized.
    There are various ways that communities can be adversely 
and positively impacted from these water projects and programs. 
They range from the potential increased health risks from a 
wetlands project in the Delta, on the community that subsides 
off of a contaminated fish population, to the socioeconomic 
impacts on rural communities from either a guaranteed water 
supply to contractors or an ecosystem restoration project.
    The United Farm Workers is committed to working with CalFed 
and our elected officials to ensure that our quality water 
supply is used to foster sustainable community development in 
the Central Valley and look forward to providing some friendly 
amendments through some of our congressional friends.
    [The prepared statement of Ms. Guzman follows:]

Statement of Martha Guzman, Legislative Analyst, United Farm Workers of 
                           America (AFL-CIO)

    The direct relationship that exists between farm workers and the 
agricultural industry is mainly defined by the worker's contribution on 
the field and in other areas of production and processing. Without farm 
workers we would not have the vast agricultural industry that exists 
today. The inverse is true as well, without the resources in land and 
water for the ability to produce there can be no demand for labor. Farm 
workers are undeniably directly integrated and impacted by changes in 
agricultural production.
    As you continue to examine the needs for a reliable water supply in 
the Central Valley we ask not only that you recognize the intrinsic 
relationship that farm workers have to agricultural production, but 
also to reflect deeper on the ultimate reason for attain reliable water 
supply. For the United Farm Workers a reliable water supply is 
essential for a sustainable agricultural industry and a necessary 
component of sustainable agriculture is having a sustainable income and 
standard of living for the workers that allow it to function and 
prosper. We are committed to the Constitution of California that 
requires the beneficial use of water for the right to water. The 
beneficial use of water means providing a benefit to the economy, 
environment, land, air and the workers and community impacted by its 
use. The beneficial use of this public resource is also found in 
Federal Law. The Central Valley Project was intended to embrace the 
concept of using water as a tool for fostering sustainable development 
by providing water to family farmers (160 acres) throughout the Valley. 
The concept of water providing environmental and economic 
sustainability for our communities must continue to be the driving 
force behind federal and state water policy.
    The United Farm Workers in conjunction with the Environmental 
Justice Coalition on Water continue to work with the CALFED Bay-Delta 
Program on the goals and guidelines established in the Record of 
Decision (R.O.D.) issued August 28, 2000. The R.O.D. requires that 
every Program include community outreach and participation, guidelines 
for project proposals and requirements to factor in the community 
impacts of a project or program before receiving funding or 
authorization. There are various ways that communities can be adversely 
and positively impacted from water projects and programs. They range 
from the potential increased health risks from a wetlands project in 
the Delta on the communities that subside off of contaminated fish to 
the socioeconomic impacts on rural communities from either a guaranteed 
water supply to contractors or an ecosystem restoration project.
    The United Farm Workers is committed to working with CALFED and our 
elected officials to ensure that a reliable water supply is used to 
foster sustainable community development in the Central Valley.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Ms. Redfern.

            STATEMENT OF SUZANNE REDFERN, LANDOWNER

    Ms. Redfern. Good morning. Chairman Calvert, and other 
members of the Subcommittee, particularly those of you who have 
traveled such a long way on this early Saturday morning, I 
would like to thank you for holding this hearing here today and 
for introducing H.R. 1985, which we strongly support.
    My name is Susan Redfern and when I say that we support 
your bill, I'm speaking for Redfern Ranches, a family farm 
situated in the Dos Palos Flyway area on the West side of the 
San Joaquin Valley.
    My father Floyd Redfern started out farming in 1927 growing 
corn on a rented 160 acres with a Case tractor, which we still 
have. Over the next 30 years of boom and bust, he managed to 
accumulate the 13,000 acres we're farming today. We grow 
cannery tomatoes, garlic, onions, peppers, almonds, prunes, 
cotton, berries, grapes, alfalfa, hay, sugar beets and various 
grains. Our work force ranges from 40 to 70 people and we have 
an annual budget of about nine million dollars.
    Today I'll try to briefly describe the challenges we face 
since the passage of the CVPIA. I speak for Redfern Ranches as 
well as for the other farmers in the four Federal districts 
which serve our lands because I think we're all facing the same 
dilemmas and I'm sure that we've all just about exhausted our 
resources trying to survive them.
    I will try to tell you what the challenges are. I'll 
summarize the various investments we've made to adapt to our 
changing circumstances, try to articulate why despite our best 
efforts we're still in an unsustainable situation and to 
explain the unexplainable, why we're still out there farming.
    Since the CVPIA we received 100 percent of our full 
allocation only once in a flood year when we were already 
drowning. In other years we received as little as 25 percent. 
This year we're getting 45 percent. In most Federal districts 
45 percent translates to about an acre foot per acre. Crop 
requirements are about two and a half acre feet per acre. So to 
compensate, growers must either pump groundwater contributing 
to serious overdrafting and subsidence, try to purchase costly 
supplemental water or fallow.
    The most visible of these options is fallowing and the one 
which most deeply impacts the local economies. In Redfern 
Ranches we were forced to fallow about a thousand acres every 
year due to water shortages. It's estimated that 20 percent of 
the ag land surface area is fallow this year. By extrapolation 
how much prime ag land will I fallow during a drought? What 
will be the repercussions of this agricultural brown-out on the 
people it puts out of work and on the communities they support? 
How will it affect the annual Fresno County gross farm income 
of three billion dollars and the state's fragile economic 
condition?
    Along with the problems created by our reduced water 
supply, we're plagued by the lack of certainty of that supply 
from year to year, which makes it impossible for us to plan and 
to finance our operations.
    In preparing for the next year's crops a farmer starts 
working his land as early as August and so needs to line up his 
crop financing by early fall. By December he will have invested 
at least one-third of the total cost of growing his crop in 
land prep, preirrigation and weed control activities. By the 
end of January he will have made commitments to rent pipe and 
other equipment and made substantial deposits to his water 
districts.
    He can estimate his inputs down to the dollar, but he won't 
even get any preliminary estimate about how much water he can 
put on that crop until February. And he won't get anything he 
can hang his hat on until May when the crops are already in the 
ground. No wonder lenders are balking. Why should a banker take 
a risk on a crop that might die of thirst in the middle of 
July?
    Few would dispute that west side ag has been put under 
enormous pressure since the passage of the CVPIA, but some have 
asked what we've done to adapt to these challenges. Farmers are 
resourceful by definition. My neighbors more than most. We're 
trying to manage to its fullest every resource, whether 
natural, human, mechanical or economic.
    In the last 10 years at Redfern Ranches we've invested one 
and a half million dollars into sprinklers, surface pipes, 
drips and portable booster pumps. Other efforts we've made to 
increase water use efficiency include hiring a water soils 
manager, using farm wide leveling, employing on-farm 
recirculation and reuse and hiring outside consultants to 
evaluate irrigation and pump efficiencies.
    Besides these on-farm measures, we've supported all 
district and regional efforts to maximize water savings, such 
practices as tiered pricing, canal lining, drain water 
recirculation and reuse and drain water treatment research.
    Finally, the whole area has made major shifts in cropping 
patterns with the goal that each acre foot of water we use 
would go into production of a high value crop. Redfern Ranches 
has gone from 4,000 acres of cotton to 1500 and installed over 
500 acres of orchard and prunes. However, the price of 
installing and operating orchard crops in drip irrigation is 
enormous.
    We are also putting off road and ditch maintenance and weed 
control. We're not replacing equipment and vehicles. 
Essentially just deferring what will catch up with us. Until 
CalFed can give all of us assurances of water quantity, none of 
us can afford to continue to invest in more high-tech 
irrigation and drainage.
    You may wonder why under such grim circumstances we're 
still out there farming. From a practical standpoint it doesn't 
make much sense. It's more than a practical matter, not only in 
our operations, but also in our way of life and in the well-
being of our employees and our communities. Many of us have 
deep roots in the area. When my father died at age 98 in 1993 I 
was advised to sell the ranch, pay the estate taxes and live 
worry free. I couldn't do it.
    The nine million dollars our ranch sent into the local 
economy every year may sound like small change from an urban 
perspective, but it's the lifeblood of small rural towns. They 
depend on our ranch and others like it as do our employees, 
most of whom are with us for many years. This summer we have 
three generations of Joe Munozes on our payroll. No one at 
Redfern Ranch is paid minimum wage. And all regular employees 
and their families at the present are provided health care 
coverage at no cost.
    We value these human resources as highly as any other and 
it's in their interest as well as our own that we keep at it, 
but we are tapped out.
    And so, Chairman Calvert, we look to you and your 
Subcommittee for relief. We believe that H.R. 1985 can offer us 
such relief. We're firmly in support of the bill for the 
following reasons:
    First, we understand that California's water wars will 
continue unabated until larger environmental problems are 
addressed. H.R. 1985 will provide the funding and authorization 
the Bay-Delta program needs to tackle those issues.
    Second, we believe it's unreasonable to solve one sector's 
problems on the back of another and trust that the provisions 
of 1985 will correct this inequity.
    Finally, we feel that H.R. 1985 will provide the assurances 
that CalFed will restore certainty to water deliveries to 
agricultural contractors. That's certainly what we need in 
order to continue producing food and fiber in the nation's most 
productive ag region. Again, thank you for this opportunity to 
testify today.
    [The prepared statement of Ms. Redfern follows:]

     Statement of Suzanne Redfern, President, Redfern Ranches, Inc.

I. BACKGROUND:
        A. LSalutation, thank you, self-introduction.
        B. LRedfern Ranches--history, crops, employees, water supply 
        sources

II. DILEMMAS FACING WEST SIDE FARMERS as result of CVPIA:
        A. LSUPPLY SHORTAGES, leading to fallowing
        B. LSUPPLY UNCERTAINTY, creating planning and borrowing 
        problems.
        C. LWATER COSTS increased, compounding higher fuel and power 
        costs and low commodity prices.

III. WESTSIDE FARMERS' RECENT EFFORTS TO ADAPT TO THESE CHALLENGES 
        (using Redfern Ranches as the model):
        A. LOn-farm water efficiency measures (drip installations, 
        sprinkler and gated pipe, additional personnel, ecirculation 
        systems, laser-leveling)
        B. LDistrict Wide Efficiency Measures we've supported (Tiered 
        pricing, drain water reuse, drain water treatment research, 
        canal lining)
        C. LNew cropping patterns we've initiated to increase dollar 
        value of products created by each acre-foot of water applied 
        (almond and prune orchards, tomatoes, onions, garlic, peppers, 
        seed crops replacing traditional cotton/alfalfa/sugar beet 
        rotation)

IV. WHY WE'RE STILL HERE:
        A. LThe financial investments we've made in efficiency measures 
        and permanent crops.
        B. LThe emotional investment, responsibility to our employees, 
        communities, heritage, belief in the land and its ability to 
        feed people and provide for us.

V. WHY THE PRESENT SITUATION IS UNSUSTAINABLE (summary):
        A. LInsufficient water means fallowing, inability to support 
        operations, overheads, workforce.
        B. LUncertain supplies, late Bureau announcements make planning 
        and financing arrangements impossible.
        C. LIncreasing costs of water along with fuel, power, etc. 
        erase profit.

VI. SOLUTIONS:
        A. LBAY DELTA process is our best hope to finding a truce in 
        California's water wars. No stability to be had until the 
        larger environmental problems are addressed, and Bay Delta is 
        set up to address them.
        B. LOne problem can't be solved entirely on the backs of 
        another segment. We strongly support CONGRESSMAN CALVERT'S BILL 
        and its practical, regional approach to restoring balance to 
        water allocations.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Mr. DiCroce.

    STATEMENT OF NICK DiCROCE, MEMBER, BOARD OF GOVERNORS, 
                        CALIFORNIA TROUT

    Mr. DiCroce. Good afternoon, Mr. Chairman, members of the 
Subcommittee. I appreciate the opportunity to appear before you 
and present an alternative point of view from most who are here 
today.
    I am a member of California Trout, a statewide fisheries 
organization and we are members of the Environmental Water 
Caucus, a group of local and national organizations focussed on 
CalFed and California water policies.
    California Trout shares a vision with many of the leading 
organizations that make up the Environmental Water Caucus and 
it is a vision that we would like state and Federal legislators 
and water planners to adopt.
    The vision is that you view California water as a finite 
and sustainable resource, and that the currently economically 
wasteful and harmful uses of California water needs to change. 
We believe that your Committee is in a unique position to 
become a champion for sustainable and efficient use of this 
critical resource.
    There's no question that California's population will 
continue to grow. We are blessed with a 60 billion dollar 
recreation and tourism industry that depends on healthy rivers, 
bays and beaches, and we are blessed with an agricultural 
industry that feeds a nation and accounts for more than 28 
billion dollars to the state's economy and continues to grow 
even through drought years. However, we would probably not be 
at this hearing today if all was well in this nirvana that we 
call California.
    Let's take a look at some of the indicators that all is not 
well. One, California now holds the prize for the largest 
number of endangered species in the country.
    Two, California already captures, stores and uses 43 
million acre feet of water in a given year. That's enough water 
to accommodate a population of 200 million people. That's just 
used as a middle strength indicator.
    Three, California ag now uses 75 to 80 percent of our water 
supply in a normal year. The water is provided at subsidized 
prices. Much of it we feel is used in wasteful ways and on low 
value, price supported crops.
    Four, despite the obvious damage that has been done to our 
California landscape and the huge amounts of waters being 
stored and used, we still battle, we still sue, and we 
legislate over whether more of the same or--whether we're going 
to do more of the same or whether there aren't some better ways 
to solve our issues.
    We think we have some better ways and I will discuss them 
in a moment, but first some pertinent observations. Water 
subsidies are comparable to a drug habit in three significant 
ways. They breed an insatiable appetite. It seems as though we 
can never get enough. We've heard some of that today.
    Secondly, there is little or no concern for the side 
impacts of the habit. Thirdly, it breeds irrational actions. 
The most recent example of those irrational actions is 
Westlands' current claim for San Joaquin water is a perfect 
example of all three of those characteristics.
    Another observation, it has always intrigued me that 
legislators and others who are fiscal conservatives, and I put 
myself in the category of a fiscal conservative, can continue 
to support water pricing subsidies that have done so much to 
upset market economics and to breed inefficiencies.
    In our belief that the state has already developed abundant 
water supplies for our future and that the current supply needs 
to be utilized in a more economical and sustainable way, we 
suggest the following actions and overall directions for your 
Subcommittee.
    One, required water conservation goals and plans for each 
of the three main water users in place of the current voluntary 
programs.
    Two, special programs and investments that will cause 
changes in water use practices by agriculture, including 
reasonably graduated pricing structures and investment 
incentives on the use of higher technology irrigation equipment 
where it's applicable.
    Three, gradual reduction and an eventual elimination of 
agricultural water subsidies which is a disincentive to the 
wise use of water.
    Four, establishment of a brokerage to facilitate market 
based water transfers, market price water transfers, which can 
provide some profit incentive to agricultural water rights 
holders that supply the water.
    Five, a much heavier reliance on groundwater storage as 
well as improved legislative controls on the use of 
groundwater.
    And six, a CalFed sponsored, high priority program to 
improve desalinization technology and make it available to 
urban areas for future water supply.
    With the Pacific Coast as our border it--and so much of the 
population in urban areas on the coast, it makes sense.
    Compared with this vision described above, H.R. 1985, with 
all due respect, Mr. Chairman, we feel is upside down and 
backwards. On the other hand, the cumulative impact of the 
above steps can provide California with enough water for the 
future and for drought supply periods. It could enhance supply. 
It could make us get well together. It could increase yield and 
it could be a more balanced approach and it would assure the 
continued growth of all the sectors of California's economy. 
Thank you.
    [The prepared statement of Mr. DiCroce follows:]

  Statement of Nick DiCroce, Vice President, Board of Governors, and 
     Chairman, Board Conservation Committee, California Trout, Inc.

    I appreciate the opportunity to appear before your committee and to 
present the views of the organizations I represent. I am a member of 
California Trout, a statewide membership-based fisheries conservation 
organization that was established in 1971. Our mission is to protect 
and restore wild trout and steelhead and their habitats. Our 
organization has a track record of working cooperatively with state and 
federal agencies and we have been instrumental in a number of 
significant actions such as the Mono Lake decision. We are also members 
of the Environmental Water Caucus, a group of local and national 
organizations focused on the issues of the San Francisco Bay Delta and 
the Central Valley rivers connected to the Delta. The Environmental 
Water Caucus has been heavily involved in the CALFED process and 
similar actions to restore the Bay-Delta and Central Valley habitats.
    California Trout shares a vision with many of the leading 
conservation organizations that make up the Environmental Water Caucus, 
and it is a vision that we would like state and federal legislators and 
water planners to adopt. The vision is that you view California water 
as a finite and a sustainable resource, and that the current 
economically wasteful and harmful uses of California water need to 
change. We believe that your committee is in a unique position to 
become a champion for sustainable and efficient uses of this critical 
public resource.
    There is no question that California will continue to grow; our 
population is predicted to reach almost 50 million by the year 2020. 
Our state economy is now at $7 trillion--the third largest in the 
world. The economic future of California will demand that adequate 
supplies of good quality water be made available to accommodate this 
growth and the growth of our largest industry--a $60 billion recreation 
and tourism industry that is supported only by healthy rivers and bays.
    California is blessed with an agriculture industry that feeds the 
nation and contributes $28 billion to the state's economy. The 
agricultural industry is a significant employer and has always been a 
significant influence in the state. Assurances that water will be 
available to accommodate growth and that it will be available during 
drought periods are vital to the industry--and we clearly recognize 
that all is not well.
    However, we would probably not be having this hearing today if all 
was well in this Nirvana that we call California. Let's take a look at 
some of the indicators that all is not well:
    1. LCalifornia now holds the prize for the largest number of 
endangered species of all kinds--one of the legacies of our past 
propensity to build large dams and divert waters out of our natural 
ecosystems at a dangerously excessive level.
    2. LCalifornia already captures, stores and uses 43 million acre 
feet of water in a typical year. This is enough water to accommodate--
on a theoretical basis--a population of more than 200 million people.
    3. LCalifornia agriculture now uses 75 to 80% of our water supply 
in a normal year. The water is provided at subsidized prices which 
allows it to be used in wasteful ways and on low value, price supported 
crops. It is obvious that changes in water practices by California 
agriculture can be the key to our usage and distribution problems.
         A few statistics will help make the case; Only 15% of 
        California farms use efficient drip technology, most of the 
        remainder are using wasteful flood and furrow irrigation, 
        similar to what was done in the 1890's; 60 percent of the total 
        water is applied to three low-value subsidized crops--cotton, 
        rice and alfalfa; rice-growing in the state evaporates more 
        water in a year than Los Angeles uses. Clearly these are not 
        efficient or sustainable practices.
    4. LDespite the obvious damage that has been done to our California 
landscape and the huge amounts of water being stored and used, we still 
battle, sue, and legislate over whether we need more of the same or 
whether there aren't some better ways to solve our problems.
    We think we do have some better ways, and I will discuss those in a 
moment. But first some observations.
    Water subsidies are comparable to a drug habit in three significant 
ways. They breed an insatiable appetite; it seems as though it can 
never be satisfied. Secondly, there is little or no concern for the 
side impacts of the habit. And finally, it breeds irrational actions. 
The most recent example of those irrational actions is Westlands 
current claim against their brother water districts for San Joaquin 
water, based on a ``county of origin'' justification. If anybody has a 
county of origin justification, it is Trinity County who provides all 
of Westlands' Central Valley Project water.
    Another observation: It has always intrigued me that legislators 
and others who are fiscal conservatives--and I put myself in the 
category of a fiscal conservative--how you can continue to support 
water pricing subsidies that have done so much to upset market 
economics and that help maintain the current sub-optimal production 
practices.
    State and federal water planners and legislators have a 
responsibility to address this pricing issue. In the last California 
State Water Plan, agricultural water pricing was relegated to four 
pages of an appendix near the end of the 775-page report with the 
conclusion that the demand for agricultural water is inelastic and will 
not be affected by the price. While that conclusion seems to fly into 
the face of logic, the plan's sample data allows a very different 
conclusion. According to the plan, a 10% increase in the price of water 
to agriculture ($1.20 to $4.20 an acre foot in the Central Valley) 
produces only a 3.2% decrease in water demand. But that 3.2% reduction, 
if applied to agriculture's current usage of more than million acre 
feet, is a reduction of more than 1 million acre feet per year. At 
those rates, a modest 10% reduction in agriculture water usage for a 
relatively small increase in the price of water would theoretically 
solve the state's predicted shortage of 2.9 million acre feet by the 
year 2020--with water left to spare for urban growth and river 
habitats.
    What would happen if the price of water for agriculture were to 
increase and approach something akin to a market price? Like most 
competitive businesses when faced with increases in costs, the 
alternative is to become more efficient in order to reduce other costs. 
The technologies are available and can be implemented with favorable 
returns on investment. Since most of California agricultural production 
is controlled by corporations that gross over $1 million annually, we 
can expect them to make business-like choices that reduce the amount 
and cost of their water. The elimination of the current rate of 
subsidized pricing would produce trickle down benefits for all: Gone 
would be the multi billion dollar costs to California taxpayers to 
build dams and reservoirs to ``develop'' more water supply. Gone would 
be the need for more water imports from out of state. Down would go the 
price of water for urban users. And gone would be this outdated 
corporate welfare program for California agriculture.
    Changes of this nature require incentives. Urban areas have shown 
that they can reduce water requirements by 30% when the pricing 
``incentive'' is there. A baseline charge with higher costs for usage 
above a baseline works in urban areas. It's just one of the solutions 
that could be applied to agriculture to cause efficient water usage.
    Major urban areas such as Monterey, San Francisco and Marin 
counties already have shown that 30% reductions through water 
conservation are achievable; it's an embarrassment to Northern 
Californians that Los Angeles probably has the best water conservation 
record in the state--using the same amount of water that it used in 
1972, despite a population increase of nearly 1 million people. It's 
now time to invest.
    Perhaps you feel that I'm being too tough on California's 
agriculture industry. But California agriculture can be the real heroes 
in this situation. We have seen many examples of farm operations that 
have achieved significant water savings through modifications to their 
water use practices and they are well documented in separate studies 
conducted by the Natural Resources Defense Council and the Pacific 
Institute. By enacting meaningful water conservation programs, the 
industry can improve their operations, improve water quality, continue 
their growth and profitability, reduce the harmful side impacts of 
their current practices, and bring an end to the historic water wars of 
California. They could be true heroes and leaders for both the state 
and the business world.
    As I mentioned, our organizations have been closely involved in the 
CALFED process. While we regard the CALFED Record of Decision as an 
imperfect solution--especially the emphasis on increased water 
diversions out of the Delta--we are very supportive of the ecosystem 
restoration and water conservation directions that CALFED has 
initiated. We view the ongoing analytical process and the detailed 
examination of the costs and benefits of significant water projects as 
a necessary step to arrive at solutions that will provide long-range 
solutions for all Californians.
    In our belief that the state has already developed abundant water 
supplies for our future and that the current supply needs to be 
utilized in a more economical and sustainable way, we suggest the 
following actions and overall directions for your committee:
     Required water conservation goals and accomplishments by 
each of the three main water users--urban, agricultural, and 
industrial--in place of the current voluntary programs. CALFED calls 
for an anemic 1% conservation goal for agriculture. Experience in both 
the agriculture and municipal sectors has clearly proven that higher 
goals are achievable.
     Special programs that will cause changes in water use 
practices by agriculture, including reasonably graduated pricing 
structures, investment incentives for the use of higher technology 
irrigation equipment where applicable, and incentives for fallowing 
marginal land during drought periods. Although CALFED plans to invest 
$2.9 billion in ``water use efficiency,'' their investment doesn't 
begin to challenge the largest water user in the state.
     Gradual reduction and eventual elimination of 
agricultural water subsidies, which is a disincentive to the wise use 
of water. The impact on food prices can be minimized by the economic 
benefits of water conservation.
     Establishment of a brokerage to facilitate market priced 
water transfers. This would allow the conserved water to be transferred 
to needy urban areas and provide some profit incentive to the 
agricultural water rights holders that supply the water.
     A much heavier reliance on ground water storage as well 
as legislative changes to place controls on the use of groundwater. 
California and Texas are the only western states that have no controls 
on groundwater even though it is a large part of the annual water 
supply. Groundwater storage is a far more economical alternative and 
less damaging to our environment than the increases in surface storage 
dams planned by CALFED.
     A CALFED sponsored, high priority program to improve 
desalinization technology and make it available to urban areas for 
future water supply, especially during drought periods. With the 
Pacific Ocean as our border, desalinization is too logical a solution 
to be crowded out by continuing our existing practices.
    H.R. 1985, the Western Water Enhancement Security Act, does not fit 
with the vision and actions described above. In fact, the authorizing 
of new and expanded dams, the priority on delivery of subsidized water 
for Central Valley agricultural contractors, and the lack of emphasis 
on ecosystem restoration will only perpetuate the current institutional 
practices of California agriculture. Compared with the vision described 
above, H.R. 1985 is upside down and backwards.
    On the other hand, the cumulative impact of the above steps would 
provide California with more than enough water for the future and for 
drought periods. They would assure the continued growth of all sectors 
of the state's economy.
    A similar positive vision is stated in a report published by the 
Pacific Institute, entitled California Water 2020. It requires ``...no 
significant new supply infrastructures to be built, nor any drastic 
advances in technology.'' As also stated in the report: ``No ``heroic'' 
or extraordinary actions are required of any individual or sector. The 
changes necessary to achieve a sustainable water future for California 
can be brought about by encouraging and guiding positive trends that 
are already under way.''
    The current CALFED Framework, which calls for spending $8.7 billion 
over the next seven years, has some of the elements described above. 
But the continued dependence on building more surface storage 
facilities to capture and export more of our already over-committed 
water supply as well as the unwillingness to tackle the unnecessary 
waste of so much water are major flaws in the plan. It dooms the state 
to a continuous degradation of our natural environment at a time when 
it is more important to its citizens and the state's economy. It also 
presents the California agricultural industry with an opportunity to be 
environmental and economic heroes.
                                 ______
                                 
    Mr. Calvert. Thank you, I think. A couple of questions.
    Mr. Broddrick, you brought up an excellent point. I was 
offered the Chairmanship of this position, I thought about it 
long and hard because I was Chairman of another Committee that 
I was quite happy being Chairman of, but I knew that this was 
going to be quite an interesting field to get into.
    One issue you bring up that I think is very important, and 
we can't say it enough, is that we found out with this crisis 
that we're presently having with electricity, there are 
decisions being made today that people a year ago or 2 years 
ago wouldn't have dreamed of making. Things that were 
absolutely opposite of their philosophical positions. I see it 
every day in some of the decisions that are being made both in 
Sacramento and Washington.
    If a crisis with water comes along, which could come along 
very soon, we will start making decisions that obviously have 
the most political impact, quite frankly, on the people who 
send us to office and keep us elected. We don't want to make 
those kind of decisions.
    If a drought hits California or the West, we'll be making 
decisions that would be, I think, unfortunate for the 
environment because we'll probably put people first. So what 
we're trying to do in H.R. 1985 is to address those issues of 
additional supply and flexibility both for the urban and rural 
communities and for the environmental community.
    Now, you've looked at the bill. Obviously you're a well-
known conservation group. Would you agree that we've tried to 
move in that direction to have a balanced approach to hopefully 
not have these crisis management decisions?
    Mr. Broddrick. Chairman Calvert, first I need to say thank 
you for taking on this Chairmanship because when you're getting 
into California water, obviously it's a tar pit that has had 
many victims before. I hope that you are not one of them.
    Mr. Calvert. Me, too.
    Mr. Broddrick. I think that what you've proposed is 
addressed, frankly, in one of the underlying intentions that's 
occurred for the last 10 years. That is, are we going to 
provide water supply and are we going to provide security for 
that supply? We have invested in the last 10 years the--
obviously with Federal and state appropriations huge 
improvements in our ecosystem restoration and I don't want to 
understate the need for additional improvements, but if you 
look at what we've been able to accomplish for San Luis, the 
Sacramento River, I think folks, whether it be ag or 
governmental, should really applaud that progress.
    I watched the '97 floods. During those '97 floods, as it 
should have been, human health and safety drove all public 
decisions and responses. I am convinced that if we don't build 
on the success that we have today from CalFed and from CVPIA, 
from category three, from the investment of the ag and urban 
folks and we go into a drought, as we had at the turn of '87 
through '92, that we will have dramatic impacts to our economy 
and to the wildlife.
    Water and agriculture right now is certainly one of the 
components. I don't pretend that Ducks Unlimited in its 
wetlands conservation issues comes anywhere close to touching 
the issues with ag policy that are driving the economics in the 
valley, water policy and the energy cost issues. Water's 
certainly gone up.
    I can talk to friends that are telling me they are paying 
$180 a ton now for fertilizer that they were paying a $110 a 
ton last year on commodities that aren't at the same rate they 
are last year. They are less.
    So I think on private lands and agricultural lands in 
California that essentially the private lands in California or 
Central Valley that are ag related, that if we can't get a 
marriage with existing ag lands with improved water supplies 
and efficiencies and conservation, the message of--the mission 
of Ducks Unlimited as it relates to wetlands conservation and 
all that's associated with it are all going to be compromised. 
It compromises the Pacific Flyway in total.
    Mr. Calvert. Miss Redfern, I want to thank you for putting 
a human face on an industry that I think is important to our 
state. I know that the computer industry is important, the 
entertainment industry is important, the aerospace is 
important. The farming industry is still the largest industry 
in the State of California and employs the most people in the 
State of California. And I think that we have a responsibility 
to make sure that that industry isn't harmed any more than it 
already is being harmed.
    I hear the various opponents of what we're trying to 
accomplish here say that we're subsidizing the agriculture 
industry. I am a conservative Republican. I think most people 
at this table would probably agree with it. I think most people 
were surprised when we put together a pretty aggressive bill to 
accomplish additional water storage and delivery hopefully for 
California, for everyone, for the environment, industry and so 
on.
    But your industry is maybe--probably over the last number 
of years is beginning to be the most controlled industry. When 
it comes to Endangered Species Act or the Clean Water Act or 
the EPA regulating pesticide usage, competition from outside 
the United States, we're not picking up our responsibility and 
promoting better trade policies where you can promote and 
deliver California agriculture throughout the world.
    And so I don't apologize for trying to do what I can to 
keep agriculture viable in the State of California and I hope 
that you and the people within your community hang in there 
because I think it would be terrible if we lost a great 
industry and all the ramifications that would go along with 
that in this state, so thank you for being here and I'll now 
turn it to Mr. Condit.
    Mr. Condit. If I may, Mr. Chairman, Mr. Dooley has a time 
problem, I'm going to yield to him and let him go first.
    Mr. Dooley. Thank you very much, Gary. I guess I took 
exception to Mr. DiCroce to some of your testimony that was 
printed that you didn't acknowledge. In part, because I'm 
beginning to be increasingly frustrated with some of the myths 
and fallacies that are continuing to be perpetrated.
    In your written testimony it talks about a 10 percent 
increase in water costs was going to solve a good portion of 
our problems, which the empirical data has indicated otherwise.
    Other parts of your testimony you identify that there's a 
tremendous amount of waste to water that is occurring 
throughout the state. I would ask you to go into the Westland 
Irrigation District, the Friant Irrigation District where there 
has been a significant number of studies by academic 
institutions that have demonstrated that they are among the 
most efficient in the world and the level of conservation that 
can be implemented there to increase more efficiencies is 
marginal at best.
    And yet we have people that continue to try to create this 
perception that we can solve all of our problems by increasing 
prices and by increasing conservation.
    Even the issue of the water subsidies. Do you know what the 
level of water subsidies are for the Friant and the Westland 
unit?
    Mr. DiCroce. Significant.
    Mr. Dooley. What are they? Do you know?
    Mr. DiCroce. I don't know exactly. I know the average price 
according to the central district water plan that farmers pay.
    Mr. Dooley. The water subsidy that is benefitted by users 
on the CVP is the interest that is foregone by the capital 
investment. So our predecessors in Congress thought it was a 
good public policy that we would have an investment in the 
development of the Federal Water Project and that that subsidy 
that we were going to provide at this time that you act like is 
so outlandish is that we weren't going to have to repay the 
interest on that capital investment. Every dime on that capital 
investment is being repaid by the users. I don't make any 
apology for that.
    Furthermore, if it was just the water subsidy that was a 
problem, I have no confidence that if we eliminated the water 
subsidy that you folks would be happy if we still got the same 
amount of water.
    The other thing I get increasingly frustrated with is I 
don't know how many people or part of your organization even 
yourself that has visited some of the areas that have been so 
adversely impacted.
    I'm a real Democrat when it comes to the social issues. 
When I see the human suffering that's occurring in my district 
and I have people that do not think that it's an appropriate 
public policy for us to find a way to provide increased 
certainty of water delivery to that region in order to maintain 
an economy to provide a better future for these children that 
oftentimes are low income, I get very frustrated.
    The reason why I'm taking exception to what you testified 
is because this is why we never solve the problem, by 
considering Mr. Calvert's bill that is supported by all co-
sponsors is an upside-down approach doesn't do anything to 
allow us to move forward.
    When there's a lack of acknowledgment that water supply is 
going to have to be a part of increasing the yield to meet the 
future needs of the environment, which your membership is 
interested in and also economic needs, I think does an 
injustice for the work that we're trying to do.
    I apologize for getting a little bit angry here, but this 
type of approach doesn't get us anywhere and I would hope that 
before members in your organization that are one of the leading 
ones in the environmental community would understand and 
acknowledge the facts because when we have the presentation of 
some of the past arguments that have no substantiation, it 
doesn't get us to an--to a point where we can really solve our 
problems. I would be more than pleased to let you respond just 
out of being--
    Mr. DiCroce. I'll respond to a number of your points, I 
hope. I think the solutions and the recommendations that we 
have made are the only solution that I have heard today that 
allows us to increase yield without the redirected impacts, 
which is a nice buzz word in the industry. It allows us to do 
that. We feel that it is a much more balanced approach.
    I recognize that balance--the word balance is in the eyes 
of the beholder. We also feel as though this is a more 
efficient and more economical way to enhance and increase our 
supply of water, which is what we would like to do.
    I would also like to address the area that you brought up 
about the price of water and its impact, the data about raising 
the price of water a little bit and having it impact demand, 
having it reduce demand is straight out of the state water 
plan, the last version of the state water plan. The conclusions 
that were reached then I take responsibility for. Those were 
mine that says, gee, if you increase the price a little bit 
more, you could generate 10 percent savings. And if you could 
generate 10 percent savings, you would solve our water supply 
problem. It's worth the chance to try that.
    Mr. Dooley. Excuse me. Did you acknowledge what Mr. Moss 
said on the Friant unit as well as what Mr. Birmingham said on 
the Westlands unit where the increases in the last 5 years have 
been on the tune of at least almost 600 percent?
    Mr. DiCroce. I'm not as familiar with that data. I'd love 
to see it.
    I think the last point that I'd like to respond to is that 
I come from a background--a business background and my last 15 
years I spent with one of the global manufacturing 
organizations of the world. We saw in the 1980's and the early 
1990's American manufacturing relatively inefficient, 
relatively slow responding and so on, having our lunches eaten 
by imports.
    And in the '90's we changed an awful lot of what we were 
doing. We became more efficient. We slimmed down. We cut costs. 
And American manufacturing and the American automobile industry 
rebounded to where it is healthy. It continues to grow, it is 
profitable, and it employs more people than it employed a 
decade or more ago.
    We think that the same kinds or similar efficiencies in the 
agricultural industry can make heroes of the agricultural 
industry in the same way that American manufacturing are heroes 
today in our economy and we would look forward to that.
    Mr. Dooley. Thank you.
    Mr. Calvert. Mr. Condit.
    Mr. Condit. Since Mr. Dooley did so well, I'm going to let 
Grace go next.
    Mrs. Napolitano. Thank you, Mr. Chairman, and thank you for 
deferring, Mr. Condit.
    One of the things that I keep hearing is everybody has 
specific areas of interest. However, I have yet to hear anybody 
talk about education of the populous on conservation and other 
areas that are going to be critical, because it isn't just one 
solution, it's many solutions and we have to look for it.
    In looking at those solutions I think we need to be more--
that's one of the reasons I'm here is to learn how my neighbors 
to the north feel about the water that they use and how we can 
benefit by helping address the issues from this area through 
Mr. Calvert's bill.
    I don't know what we can do, like in farm areas, the farm 
workers, but I know that in schools we can begin to have our 
young children learn about water conservation, about better use 
of water in homes, in factories, in many other areas. I don't 
think we're even beginning to talk about that.
    I have questions for some of you, but I defer back to Mr. 
Condit and to the Chair. But it just seems to me that as one of 
the areas we have not even begun to address is how do we not 
train people's long acceptance that you turn on the faucet, you 
have water.
    Mr. DiCroce. May I respond to that? Los Angeles takes a bad 
rap for lots of reasons, but in one area that Los Angeles has 
done an outstanding job and that's water conservation. The 
public responds when water conservation becomes an important 
agenda. And Los Angeles in 1972 began to tackle water 
conservation and water usage to the point where since 1972 with 
a population growth of one million people they use the same 
amount of water that they used in 1972.
    Mrs. Napolitano. I'm glad you brought that point up.
    Mr. DiCroce. People will respond, they will.
    Mrs. Napolitano. I think that all of us, special interest 
included, need to work together and come up with solutions that 
are going to be beneficial to everybody rather than attacking 
each other or saying that that does not work. I think that's 
just a challenge for me is how to make it work.
    Mr. DiCroce. I want the agricultural industry to be heroes 
in this area.
    Mrs. Napolitano. Well, I understand that. When I was in the 
state legislature I was Chair of international trade, I 
continued to support the outreach of my small businesses into 
foreign countries, not to leave California, but to expand to 
everybody, be it Hong Kong or Thailand, people looked to 
California product. We certainly need to protect the workers 
that labor in the fields and also users in California. I look 
forward to working with everybody.
    Thank you, Mr. Chairman.
    Mr. Calvert. Thank you.
    Mr. Condit.
    Mr. Condit. Thank you, Mr. Chairman. I'm going to associate 
myself with Mr. Dooley's remarks as it relates to Mr. DiCroce. 
I would invite you, if you have not, to take a little tour of 
the West side of this area so that you can get an idea of 
what's been done. You make reference that you want agriculture 
to be heroes. I'm telling you that the farmers and the farm 
workers in this state are heroes in terms of the industry. They 
build a very strong economy. We can compete with anyone in the 
world.
    Mr. DiCroce. No question.
    Mr. Condit. Anyone in the world. Just give us a fair shake 
and we'll do it. If you haven't been, and I don't know if you 
have or you have not, you should make the effort to do it.
    Mr. DiCroce. I will be happy to take you up on that.
    Mr. Condit. I would also like just for the record to 
comment that I know that the Committee extended invitations to 
some other environmental groups and RDC, et cetera. They are 
not here today.
    Mr. DiCroce. RDC will be with you Monday in San Jose.
    Mr. Condit. That is great. We're here in the Central Valley 
of California and agriculture where water is the lifeblood. 
We're sorry they couldn't get loose on Saturday to show up. 
This is the place they should have been.
    They should have done the same thing I invited you to do, 
take a little trip on the West side and see what they have 
done, see how efficiently these people operate. They don't have 
much margin for error at all. I'm a little concerned that they 
really didn't want to come over here and I'm sorry that they 
didn't. It's their loss.
    Ms. Redfern--
    Mr. DiCroce. I think Barry Nelson of RDC and I decided to 
split the workload, if you will. I would be here, he would be 
in San Jose.
    Mr. Condit. Are you representing them today?
    Mr. DiCroce. Not representing him.
    Mr. Condit. You are working with the organization?
    Mr. DiCroce. We both work with the Environmental Caucus, 
both our organizations.
    Mr. Condit. Ms. Redfern, thank you for being here today. I 
want to associate myself with the remarks of Mr. Calvert as it 
relates to your comments. You certainly do put a human face on 
this and you are--you and your family are certainly heroes to 
the agricultural industry.
    I would like, if you would, for you to speak to the impact 
on resources for water and I hope explain this correctly, water 
for preirrigation, chemicals for and labor that was used during 
the early months of the year going into December. I would like 
for you to explain to us all that preparation that you made and 
then you find out later that you're not going to have enough 
water so those fields over on the West side lay fallow and 
you've done all this prelabor, prespraying, pre-everything.
    What's the loss to you and to the industry to that? Does 
that make sense to you, the question?
    Ms. Redfern. Yes. On a per acre basis by January we put 
perhaps $150 an acre into a crop. With present commodity prices 
and present water deliveries, if we can earn approximately $5 
an acre a crop net we are feeling as if it's been a successful 
year. We're just hanging on. So with those acres, should they 
not receive water, the ones that have already received those 
preirrigations and work which we do as a matter of course, that 
$150 an acre is in the red.
    Mr. Condit. And from my observation on the West side, there 
are a lot of acreage in that category right now where people 
have done this prework and been told later that they are not 
going to receive the water, so the land will lay fallow and the 
money invested in the prework is lost.
    Ms. Redfern. That's exactly right, thank you.
    Mr. Condit. So it goes to the heart of creating some 
reliable commitment so that people don't make--that's a waste 
of water, it's a waste of everything, for you if you don't have 
a long-term commitment; is that not correct?
    Ms. Redfern. Yes, that's a waste of fuel. Every resource 
that we have on our ranch is wasted.
    Mr. Condit. Thank you very much. I want to thank all of you 
again for your testimony.
    I want to, Mr. Broddrick, get to you real quick. I want to 
acknowledge and compliment you because I know of anyone sitting 
in this building today that you have a great deal of knowledge 
about CalFed and that when you were at Fish and Game you worked 
very hard on CalFed and you're an integral part of the state 
team that negotiated the action plan and I want to thank you 
and congratulate you and commend you for that.
    One of the little known provisions of the CVPIA directs the 
Secretary of the Interior to develop a replacement water supply 
for refuge. This water supply currently comes from the--comes 
from and impacts agricultural service contractors.
    Now I just want to know in your current position are you 
willing to work with us to develop a replacement water supply 
as to--directed under law?
    Mr. Broddrick. The answer as written in the testimony that 
I didn't speak to is yes. I as everyone else who has a vested 
interest by organizational association are nervous about the 
loss of the utility of the refuge water supply provisions. I am 
concerned just as maybe others are that there's a zero sum game 
in water and if fisheries are driving all the priorities, then 
some of the terrestrial species, whether they be ducks or some 
of your threatened species, may be a little short on the stick 
when they are all allocated, especially in a crisis.
    My response very directly to the question, I think we've 
got a bill here with all the flexibility we have in conveyance 
and needs for essential surface storage and existing conveyance 
of water south and back up to the grassland system and I don't 
think that unless we have water security that potential 
partners, whether they be agricultural districts, farm 
districts, private landowners or other environmental 
organizations are going to be willing to commit to anything 
very innovative if we continue to position left, right, center 
or depending on your point of view on the compass away from 
each other.
    I think there's opportunities to meet all the refuge 
demands. When I say refuge, I mean grassland water districts, 
private lands there as well, but no one is willing to offer 
that flexibility when there isn't water security. Certainly 
there's this dramatic option there that we're afraid to explore 
because of the scarcity.
    Mr. Condit. Thank you. Miss Guzman, if you could, for me, 
we talked a little bit about the economy and the high 
unemployment rate of the West side of this region and how the 
loss of water would impact the economy.
    If we don't solve the water problem and make sure there's 
some certainty and security for agriculture, what is the plight 
of the farm workers who make this whole thing work anyway? I 
mean, what do they do when there's no--when those lands lay 
fallow? Where do they go, what do they do? Has your 
organization had--have they done any studies to that, what the 
options are, et cetera?
    Ms. Guzman. Our organizations haven't done any studies. 
There have been studies done not to land or fallow due to 
salinity, but there have been some studies done of a land 
retirement due to drought. That was done by Don Redifo 
(phonetic) when he was at the California Institute for World 
Studies.
    But I think what was mentioned earlier also by Dr. Sablan 
and some other of the representatives on the West side on the 
impact to the rural communities is that there is nowhere for 
them to go. This is a problem--this is a situation that is here 
currently.
    I've also been confronted with something that Tom has, I'm 
sure repeatedly, that this is an industry that's only been on 
the West side for 50 years, but regardless of how long it's 
been there, it's there today.
    One of the other issues I wanted to bring about was--that 
tied to this about workers having not much of another choice 
and it being tied really to some of the contracts and some of 
the insurance languages that's in the contracts. It's not that 
we're opposed to that guarantee, but just a concern. And this 
is found not only on the West side, but also on the east side.
    When the contracts are determined--are defined by use for 
purely irrigation use, then it's a limit to the diversification 
of the economies in these rural areas. There's a case that I'd 
like to give in Orange Cove where they--the small city of 
Orange Cove wanted to put in a tortilla packaging plant, but 
they are maxed out on their water supply from the Friant and 
were looking for some sort of guarantee--they basically 
couldn't bid on this plant because they couldn't guarantee them 
the water supply and they don't have--they have some 
limitations on working on the agreement with the irrigation 
district there and that's based on how the contracts are 
written.
    And this is also, I'm sure, a case that Dr. Sablan is 
facing in Firebaugh where they have to look, as she mentioned, 
to their packaging and processing sheds and companies that they 
also need a reliable source of water, whether or not irrigated 
agriculture is adjacent to them, but those tomatoes come to 
them from up and down the valley, so they need to process them 
there and have a guaranteed water supply.
    That's something we would like to work with Congressman 
Calvert on his bill and really assuring the communities that 
there will be a water source for their economic development.
    One other thing I'd like to add as a solution is that if 
there was some way to tie into these contracts that they would 
all be as good as Mrs. Redfern, then we'd be all for that as 
well.
    Mr. Condit. Thank you very much. You bring up a good point 
and I noticed that Mr. Calvert made note of that. Thank you all 
for being here today. I appreciate it.
    Mr. Calvert. I have just a couple of other questions and, 
Ms. Guzman, you make a good point. Assurity of water not just 
for farming, but for other uses that may help the local economy 
and provide for better and higher paying jobs and that works 
for everybody's benefit. That's why we're here today, to try to 
expand the supply of water to meet those needs.
    Mr. DiCroce, I listened to your testimony and read your 
testimony. I'm just kind of curious, obviously you don't like 
H.R. 1985. Specifically, you don't like the section that 
reauthorizes CalFed. Is that all right, the three billion 
dollars, the Federal money that we're going to put into CalFed 
as our share? Is that part of it okay?
    Mr. DiCroce. I think our view is that to a great extent 
with the tenancy, the way it's written it appears to 
preauthorize damage--
    Mr. Calvert. I was going to ask that question. How does it 
preauthorize--
    Mr. DiCroce. I feel as though it subverts or walks around--
    Mr. Calvert. How specifically does it subvert? The way that 
legislation is written is that we must agree to a government 
scheme within 1 year from the completion of the bill assuming 
that the bill is signed into law and we have a law and 
authorization bill. The state legislature, the governor of 
California, this Committee, would work together to put together 
a government scheme. All the project would have to go to that 
with all the stake holders, including yourself would be 
involved in that process, then would have to come back to 
Congress and then would have to be appropriated. And it still 
would have to go through the legal requirements and all the 
other permissions that must be branded from various Federal and 
state, local organizations.
    So how does it predetermine anything?
    Mr. DiCroce. If all of that is so, Mr. Chairman--
    Mr. Calvert. It is so.
    Mr. DiCroce. --then I don't think that we would object to 
it. It doesn't appear to be that way.
    Mr. Calvert. The other section of the bill allows for 
Federal participation to allow local communities, for instance, 
put in reclamation. Are you opposed to reclamation?
    Mr. DiCroce. No.
    Mr. Calvert. Are you opposed to conjunctive use?
    Mr. DiCroce. Absolutely not.
    Mr. Calvert. But you're opposed to the Federal Government 
participating in those projects. Is that what I heard in your 
testimony?
    Mr. DiCroce. No. I'm not following, so I can't answer that 
one.
    Mr. Calvert. I guess what I get to is are we--are you--is 
your organization or the organizations you represent opposed to 
the Federal Government participating in augmenting water supply 
to the State of California?
    Mr. DiCroce. No.
    Mr. Calvert. But in your testimony you said yes, you were.
    Mr. DiCroce. You said Federal--
    Mr. Calvert. Federal money.
    Mr. DiCroce. To augment water supply.
    Mr. Calvert. Federal money to be used to help augment water 
supply in the State of California for both urban, rural and 
environmental purposes. Are you opposed or in favor of that?
    Mr. DiCroce. Stated that way we would have no objection to 
it. If it predetermines the construction of some major dams 
that CalFed is going--
    Mr. Calvert. Where in the legislation does it say that we 
are to predetermine anything?
    Mr. DiCroce. I think that's the conclusion--
    Mr. Calvert. That's the conclusion that's possibly arrived 
at by people who are opposed to H.R. 1985 and are quite frankly 
going to create a water crisis in the State of California, 
which I don't believe is necessary, nor good for the future of 
this state. And then we need to go out and educate people in 
the environmental community that we don't take one nickel, one 
dollar out of the environmental projects that were originally 
outlined within the CalFed agreement. I think Mr. Broddrick 
would testify to that fact.
    At any time have you seen where we take any money out of 
environmental litigation?
    Mr. Broddrick. The CalFed issues that you identified in 
terms of continuing with a Record of Decision embedded in the 
CalFed Record of Decision is 150 million dollars a year in 
environmental programs, 150 million dollars a year in 
environmental water account. If CalFed stays as projected, but 
not fully funded, your bill will actually help ensure that 
those provisions are funded versus compromising. So if you stay 
with the CalFed Record of Decision, then we're in--with those 
components embedded, they are part of the biological opinion. 
They are there.
    Mr. Calvert. Basically it's a point that needs to be driven 
home over and over again. This is CalFed plus plus. We added a 
section on grants to assist local communities to build water 
projects that augments their water supply, reclamation, 
conjunctive use. I haven't talked to an environmental 
organization yet that's opposed to that.
    We add back another section for bringing back the 
Department of the Interior Bureau of Reclamation Loan Program 
which can also be used for environmental mitigation. We augment 
that from the original legislation. I haven't talked to many 
people who are opposed to that.
    And so I come to the conclusion that there's some people in 
this state that just don't want extra water.
    Mr. DiCroce. I think if you can go back to the comments I 
made, I think our vision and we feel that the state does 
already have adequate water supply. The challenge is to use it 
more efficiently.
    Mr. Calvert. Well, I would state that based upon the number 
of hearings that I've had, in a number of the counties, I 
suspect every county in the state will end up endorsing this 
bill, every major city would find that very dubious, in fact. 
Especially in the West that we had a hearing, by the way, in 
Northern California, which was the most attended hearing in the 
history of United States of America. The most--now, I think 
there was 4,000 people who came and left that hearing during 
the day. Unfortunately I couldn't Chair it that day. I had a 
previous commitment.
    But this isn't healthy. We've got to find solutions to the 
problem and we need to work together to find these solutions. 
Water transfers and increased costs of water forcing the farm 
industry into bankruptcy and I guess that would in effect 
create a water transfer is not an acceptable solution as far as 
I'm concerned.
    Mr. DiCroce. I would agree with you, that is not an 
acceptable solution.
    Mr. Calvert. Any further comments?
    Mr. Condit. I don't want to--this gentleman here I 
certainly don't want to do that. As I was sitting here 
thinking, do you guys take the position on other 
infrastructures other than water? With your theory we can 
conserve our way out of an electrical crisis that we're in. We 
don't need to build anything, you know, just keep conserving.
    With the growth that you have in the state--I don't know, I 
don't mean to be disrespectful to you. It's just illogical to 
think that because we have a tremendous amount of growth--and I 
don't want people to think this is going to happen here in the 
Central Valley if we don't continue farming. What do you think 
is going to happen? Do you think we're just going to have land 
sitting out there? These people are going to build houses. 
People are going to come here and they are going to commute in 
their cars.
    I mean, I just don't understand what the logic is of that 
rationale. I mean, we're in an infrastructure crisis all across 
this country in terms of roads, in terms of water facilities, 
in terms of electrical stuff. And you are to tell me that we 
just conserve our way out of it is the answer. I don't mean to 
be--that's what it sounds like you're saying.
    Mr. DiCroce. I am saying that generally, not the total 
solution, but a good part of it. May I respond to a couple?
    Mr. Condit. You've taken enough shots today. You're welcome 
to respond.
    Mr. DiCroce. Your analogy to the energy crisis, I'd like to 
give you my personal view, not necessarily the California view. 
I think we have an energy pricing crisis. We don't have so much 
of an energy supply problem. There are some shortfalls.
    The energy usage in the state has been going up modestly 
year after year. There hasn't been a lot of building and there 
are some shortfalls that have been solved in less than a year. 
Our crisis in energy is more a crisis of pricing, not supply.
    We feel the same way for supply in the water issue. We 
don't have a crisis of supply. We have a crisis of efficient 
use and summary distribution.
    Mr. Calvert. So increasing the price is the answer?
    Mr. DiCroce. No, that's not the only answer. Improving 
investing in technology is one of the items I mentioned. More 
groundwater storage is one of the items I mentioned. A number 
of other actions to go along with it, not just the reduction of 
subsidies.
    Mr. Condit. California in the last decade the population 
rose 30 percent. Increase in water is less than 2 percent, so 
you can conserve your way out of that. That's like saying we 
shouldn't build any more highways because we have to figure out 
another option. Obviously we have to figure out all kinds of 
options. It sounds like to me you're opposed to any kind of 
infrastructure developing.
    Mr. DiCroce. No, I do not say that. I know nothing about 
highways. I don't know a lot about electricity either. I only 
know a little bit about water.
    Mr. Condit. Thank you, sir, you've been very kind in 
allowing us to go back and forth.
    Mr. Calvert. I want to thank you, this panel and I thank 
the audience for attending today. It was a very informative 
hearing. I want to thank you, Mr. Condit, for his hospitality 
in his wonderful City of Modesto. I look forward to doing that. 
But we do have a crisis in California and not as visible as the 
electric crisis is today, but we want to be proactive in trying 
to deal with it and work with all the communities, 
environmental community, the farming community, and certainly 
the urban areas in order to come up with a common solution that 
can work with the best interest of all of us here in the 
wonderful State of California.
    So have a great day, God bless and we'll see you at the 
next hearing, hopefully.
    [Whereupon, at 1 p.m., the Subcommittee was adjourned.]
                                ------                                

   OVERSIGHT FIELD HEARING ON NORTHERN CALIFORNIA WATER SECURITY -- 
                      OPPORTUNITIES AND CHALLENGES

                              ----------                              

                          Monday, July 2, 2001

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                          San Jose, California

                              ----------                              

    The Subcommittee met, pursuant to call, at 9 a.m., in the 
City Council Chambers, 801 N. First Street, Room 205, San Jose, 
California, Hon. Ken Calvert [Chairman of the Subcommittee], 
presiding.
    Present: Representatives Calvert and Lofgren.
    Staff Present: Steve Lanich, Staff; Jeannine Campos, Staff; 
and Joshua Johnson.

STATEMENT OF THE HON. KEN CALVERT, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Calvert. The committee will come to order. If everyone 
will please take their seats, we'll convene the meeting here 
shortly. Thank you.
    In the meantime, if the witnesses in the first panel will 
please proceed to the front table, we would appreciate that. 
Thank you.
    First, I want to thank my host today, Zoe Lofgren, for 
allowing me to come up here to the beautiful city of San Jose. 
I had a delightful evening here last evening and you certainly 
have a community I'm sure you're very proud of and certainly 
well represented. It's a pleasure to be here.
    I have been going around the state having a number of 
hearings on the future of California's water security. Everyone 
has taken time to come here today understands the importance of 
water availability, reliability and supply to our well being, 
our environment, and this state and our country.
    We have convened this hearing as an opportunity to listen 
to perspectives of those closest to the issues. Important work 
addressing California's water security has a strong foundation 
in the CALFED Bay-Delta Program and the Record of Decision. 
This program contains a balanced holistic approach to dealing 
with water security in the Bay-Delta area and the impacts on 
the water issues across the board.
    We need to certainly achieve the goals toward a balanced 
approach to water use to conserve and recycle that water and 
look for ways to augment the water supply. This is in the heart 
of what I believe is embodied in H.R. 1985, the Western Water 
Security Enhancement Act.
    We must stop thinking in a fashion that pits the 
environment against all other factors, a mentality that if we 
increase water supply and quality, it must be at the expense of 
the environment and is detrimental to the working constructive 
on water issues in the west.
    When water supply and quality improve, the environment is 
benefitted by this additional water. When the environment is 
benefitted, water supply certainly helps the state and the 
west. We have a number of stakeholders here today that have 
various perspectives on water and we are certainly looking 
forward to listening to them. We certainly, I think, can all 
agree that we have a problem with water supply in the state of 
California--we always have.
     It's one historic truth that we've had in this state for 
many years and certainly in the west. We would like to come up 
with a proactive solution where we don't get into decision 
processes that we are faced today with electricity which 
sometimes are not the best solutions.
    With that, I thank the witnesses for being here and 
recognize Congresswoman Zoe Lofgren.

STATEMENT OF THE HON. ZOE LOFGREN, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Ms. Lofgren. I'll be very brief because I'm eager to listen 
to the witnesses. First, let me welcome you, Mr. Chairman, to 
this beautiful city and this wonderful valley where I have 
lived all my life.
    It's a dynamic area, although we have an overall downturn 
in the American economy right now. We all know that. This still 
remains an area that is energetic. It really represents the 
economic future of the United States and the world.
    Clearly the ability to have a clean environment and ample 
water supply is something that matters a great deal to this 
community, not only to industry but to our residents. I think 
this hearing is an important one. I'm appreciative that I've 
been invited to join you here today even though I'm not a 
member of the Subcommittee.
    Clearly this is an issue that all Members of Congress will 
be dealing with along with our partners in state and local 
government and the private sector. I hope that we can get ahead 
of the curve on the challenges that face us here today. We know 
that the next major challenge that will face our state is water 
supply and there are several others following behind. With 
that, thank you once again for coming to San Jose.
    Mr. Calvert. Thank you. With that, we'll start with our 
first panel and we'll just kind of go left to right and start 
with Mr. Jim Cunneen. Welcome.
    By the way, let me explain our little 5 minute rule, all 
these little colored lights. We try to limit the testimony to 5 
minutes. The green light indicates that you're into the 4 
minutes and the yellow light indicates 1 minute is left. The 
red light indicates please wrap it up.
    With that, Jim, please begin.

STATEMENT OF JIM CUNNEEN, PRESIDENT AND CEO OF SAN JOSE SILICON 
                   VALLEY CHAMBER OF COMMERCE

    Mr. Cunneen. I can hardly say my name in 5 minutes, Mr. 
Chairman. Delighted to have you to Silicon Valley. Welcome from 
the Central Valley. In hearing Congresswoman Zoe Lofgren's 
opening remarks and yours, it does remind me how much we have 
in common as two regions.
    Both the agricultural community and Silicon Valley do 
depend on a clean, stable water supply. We both handle 
hazardous materials daily for the manufacture of our products 
and farming. We both depend on international trade to a great 
degree.
    I look forward to partnering more between the Silicon 
Valley delegation and the Central Valley delegation. I think we 
have much in common on some core issues.
    I am Jim Cunneen, President and CEO of the San Jose Silicon 
Valley Chamber of Commerce. We want to thank you for inviting 
our organization to address the Subcommittee this morning.
    We would like to express our strong support for your 
efforts, Chairman Calvert, and Senator Feinstein's efforts to 
reauthorize the CALFED and to provide the Federal appropriation 
that is necessary for the program's implementation.
    The Chamber of Commerce, by way of background, represents a 
powerful network of small retailers, small manufacturers, mid-
size service sector firms, accounting, PR, legal, and large 
high-tech enterprises. We're the metro Chamber and the 
companies that make up our organization have created Silicon 
Valley's resilient economy.
    We represent nearly 2,000 companies throughout the metro 
area and we are the largest nonprofit organization that 
represents the entire supply chain, the value chain of our 
business economy.
    As a large urban Chamber we have long witnesses our 
region's ups and downs. Our take is simple. Silicon Valley's 
technological revolution is far from over, and our best days as 
a successful community lie ahead. A clean, stable water supply, 
however, is a prerequisite for future growth, and to maintain 
our regions leadership position in the nation's economy. Here 
is what's at stake.
     The nation's largest high-tech presence and number of 
jobs; with a combined high-tech payroll of $56 billion, with 
$22 billion of that in San Jose alone; a labor force in which 
high-tech firms employ 1 out of every 4 private sector workers; 
and with at least one computer in 77 percent of all households, 
the #1 ranking in the entire nation.
    I cannot stress enough the importance of water to the 
fulfillment of our future. The challenge is clear, to provide a 
reliable source of water for everyone in the state and still 
provide required flows for environmental purposes. We don't 
believe that these goals are mutually exclusive.
    From a business perspective it is pretty straightforward. 
If we are perceived as a region by others that is short on 
water in addition to the high cost of living and traffic 
congestion and other issues, it will be difficult to maintain 
and sustain the businesses that compliment the high-tech and 
biotech industrial base that is so important to our future.
    We believe your committee and policy makers at both the 
state and Federal level must address three key areas.
    1. First, Federal investments in the Delta must continue to 
be increased. The Delta is at the center of our water delivery 
system. While the State of California has stepped up and passed 
Proposition 13 in the March 2000 ballot providing nearly $2 
billion, no new Federal money was allocated in the last session 
of Congress for this important purpose.
    Also, state legislation providing for governance of CALFED 
was defeated in the final days of the '99 2000 session so the 
time to act is now. The Delta must be rehabilitated through the 
immediate commencement of a number of crucial repairs and only 
with new Federal investment in this priority area can the Delta 
be restored to deliver on its dual purpose, transporting water 
while maintaining a health ecosystem that minimizes the new 
listings of species, something we all want to avoid.
    2. California must have additional Federal guidance to 
develop a plan showing how we intend to stay within our 
allotted 4.4 million acre-feet a year of Colorado river water. 
We have always exceeded our allocation, yet we are being asked 
now to stay within that allocation. At the same time, demand 
for water continues to increase. It's a problem that we are 
going to need to continue to work on with our Federal partners.
    3. Finally, any solutions within the CALFED process must 
include storage and conveyance elements. While the Phase II 
Record of Decision and EIR do include a call for surface 
storage, it lacks any specifics. This is a crucial element to 
any fair, balanced plan.
    We want to offer you our committed support for efforts to 
reauthorize the CALFED project. This important program, 
controversial in elements, provides the best hope available to 
insure a reliable, clean water supply in an equitable fashion 
for the Silicon Valley and all of California.
    You are to be commended, Chairman Calvert, for coming to 
Silicon Valley, for holding this hearing, and for fostering an 
atmosphere of cooperation among the various sectors of the 
state's economy and major business and environmental 
stakeholders.
    We are going to depend on you and Congresswoman Lofgren and 
Senator Feinstein for continued leadership that will be 
essential to create a positive political will to address the 
water supply problems facing our state and we look forward to 
answering any questions you might have as well. Thank you very 
much.
    [The prepared statement of Mr. Cunneen follows:]

 Statement of Jim Cunneen, President and CEO, San Jose Silicon Valley 
                          Chamber of Commerce

    Good morning. I'm Jim Cunneen, President and CEO of the San Jose 
Silicon Valley Chamber of Commerce.
    Thank you, Chairman Calvert, for inviting our organization to 
address the Subcommittee this morning. I'd like to express the San Jose 
Silicon Valley Chamber of Commerce's support for your efforts to re-
authorize CalFed and to provide the federal appropriation necessary for 
program implementation.
    The Chamber of Commerce represents a powerful network of small 
retailers, small manufacturers, mid-size service-sector firms and large 
high tech enterprises--companies that have together created Silicon 
Valley's resilient economy. Representing nearly 2,000 companies, our 
Chamber is the largest non-profit organization representing the entire 
supply chain of business enterprises throughout the San Jose 
Metropolitan Area. As a large, urban Chamber, we have long witnessed 
our region's ups and downs. Our take? Silicon Valley's technological 
revolution is far from over, and our best days as a successful 
community lie ahead.
    A clean, stable water supply, however, is a prerequisite for future 
growth, and to maintain our regions leadership position as:
     The nation's largest high-tech presence and number of 
jobs;
     With a combined high-tech payroll of $56 billion, with 
$22 billion of that in San Jose alone;
     A labor force in which high-tech firms employ 1 out of 
every 4 private sector workers;
     And with at least one computer in 77 percent of all 
households, the 1 ranking area in the entire nation.
    I cannot stress enough the importance of water to the fulfillment 
of our promising future. The challenge is clear: To provide a reliable 
source of water for everyone in the state and still provide required 
flows for environmental purposes. These goals are not mutually 
exclusive.
    From the business perspective it's straightforward: If we are 
perceived by others as a region that is water short (in addition to 
high cost of living, traffic congestion, and other issues), it will be 
difficult to be able to sustain the businesses that complement the 
high-tech and biotech industrial base that is so important to our 
nation and its standing in the global marketplace.
    We believe your committee and policymakers at both the state and 
federal level must address these key areas:
    1. LFederal investments in the Delta must be increased. The Delta 
is at the center of our water delivery system. While the State of 
California passed Proposition 13 in March 2000 providing nearly $2 
billion, no new federal money was allocated in the last session of 
Congress. Also, state legislation providing for governance of CalFed 
was defeated in the final days of the 1999-2000 session. The Delta must 
be rehabilitated through the immediate commencement of a number of 
crucial repairs. Only with new federal investment in this priority area 
can the Delta be restored to deliver on its dual purpose--transporting 
water while maintaining a healthy ecosystem that minimizes the new 
listings of species.
    2. LCalifornia must have additional federal guidance to develop a 
plan showing how we intend to stay within our allotted 4.4 million 
acre-feet a year of Colorado River water. We consistently exceed our 
allocation at present. Yet demand for water increases.
    3. LAny solutions within the CalFed process must include storage 
and conveyance elements. While the Phase II Record of Decision and EIR 
do include a call for surface storage, it lacks any specifics. This is 
a crucial element to any fair, balanced plan.
    I want to offer you our committed support for efforts to 
reauthorize the CalFed project. This important program, controversial 
though it is, provides the best hope available to insure a reliable, 
clean water supply in an equitable fashion for the Silicon Valley--and 
all of California. You are to be commended for holding this hearing and 
for fostering an atmosphere of cooperation among the various sectors of 
the state's economy and major business and environmental stakeholders. 
Your continued leadership will be essential to create the positive 
political will to address the water supply problems facing our state.
    Thank you.
                                 ______
                                 
    Mr. Calvert. Thank you, gentlemen.
    Mr. Gaines.

   STATEMENT OF BILL GAINES, DIRECTOR OF GOVERNMENT AFFAIRS, 
                CALIFORNIA WATERFOWL ASSOCIATION

    Mr. Gaines. Thank you. Mr. Chairman, members of the 
committee, my name is Bill Gaines. I'm the Director of 
Government Affairs for the California Waterfowl Association. On 
behalf of our association's 15,000 members throughout 
California I would like to thank you for coming to San Jose 
today and for allowing us to provide testimony on the CALFED 
Program and your legislation dealing with CALFED Program as 
well.
    Historically, California's Bay- Delta watershed provided 
about 4 million acres of naturally occurring seasonal wetlands 
for waterfowl and other wetland-dependent wildlife. 
Unfortunately, over the course of the last century or so, about 
90 percent of those wetlands have been removed due to 
converting land to agricultural uses, urbanization, flood 
control, and navigation projects.
    Today we have, as I mentioned, about 10 percent of our 
historic wetlands remaining. Unfortunately, about 60 percent of 
our Pacific Flyway waterfowl still must depend upon these few 
remaining wetlands to meet their annual migratory and nesting 
needs.
    In addition, we estimate that about 50 percent of 
California's threatened and endangered species are also in some 
way wetland dependent.
    Due to significant changes in California's natural 
hydrology, most of these few remaining wetlands must also be 
managed today. In other words, they must be artificially 
irrigated and intensely managed to recreate and maintain marsh 
conditions.
    In essence, public and private wetland managers must farm 
for ducks. In other words, we are dependent upon surface water 
supplies and groundwater supplies just like every other farmer 
out there in the Central Valley is, just like our urban users 
are, we are dependent upon water to provide those managed 
wetlands for waterfowl and other wetland dependent species that 
depend upon them.
    Definitely water is the lifeblood of California's waterfowl 
conservation effort. About 10 years ago, in response to this 
concern and the fact that almost all of our remaining wetlands 
were of minimal habitat quality in almost all but the wettest 
of years, California Waterfowl Association worked with Congress 
and a variety of other water interests to pass the Central 
Valley Project Improvement Act.
    The refuge water provisions within the CVPIA played a 
critical role in helping to provide the Central Valley Federal 
refuges, the state wildlife areas, and the private wetlands 
within the Grasslands Resource Conservation District with a 
guarantee of some water supplies, good water supplies in all 
but the driest of years.
    Unfortunately, the CVPIA refuge water provisions also had 
some shortage provisions which would allow those water supplies 
to be cut in dry years and I'll talk about those in a second. I 
must commend Congressman Miller for his assistance with passing 
the CVPIA. Obviously he was a key player in that many years ago 
and we thank him to this day for that, as well as many other 
Members of Congress.
    Although the CVPIA plays an important role in providing 
water supplies, to roughly about 50 percent of our remaining 
Central Valley wetlands, there is still much to be done 
considering that we only have about 10 percent of our historic 
wetlands remaining. Even if that 10 percent could be managed to 
provide pretty good waterfowl and wetland-dependent species 
habitat year in and year out. With only 10 percent provided on 
the ground, we had a lot of work to be done.
    The CALFED Program was initiated a couple of years later 
and its intent, of course, was to address ecosystem health, 
water quality, water supply reliability and levee system 
integrity in the Bay-Delta watershed as well.
    Because the restoration enhancement of the wetland areas in 
the Bay-Delta watershed depends largely upon these wetland 
water supplies as well, CALFED is a very, very important 
program to us.
    Back in November of '96 the State of California's public 
supported the CALFED Program and made a financial commitment to 
it, if you will, with the passage of Proposition 204 which 
committed about $995 million in state funding for 
implementation of CALFED related activities.
    Clearly this was an important step toward giving the CALFED 
Program the fuel that it needed to address the water supply 
reliability problems that we have in the Central Valley but it 
simply is not enough.
    Federal funding to supplement the state funding is critical 
to the success of the CALFED Program and we believe that your 
H.R. 1985, Congressman, takes an important step in this 
direction.
    Our association is pleased to provide this legislation with 
our support, but we do have some concerns, most notably the 
Westlands water provision, which guarantees south of the Delta 
water users minimum deliveries, if you will, above what they 
are receiving now on a typical year in, year out.
    That provides us with great concern because the bill lacks 
specificity as to where that water is going to come from.
    Clearly the Central Valley refuges and the private wetlands 
in the Grasslands Resource Conservation District that 
benefitted so greatly from the CVPIA could be severely hurt 
under H.R. 1985 if those appropriate safeguards to provide 
protections from environmental water supplies, most notably 
wetland water supplies, aren't somehow included. We look 
forward to working with you on providing those safeguards 
within the bill.
    We also ask for your assistance on a couple of other 
points. One of the long concerns that we've had with the CALFED 
Program is the fact that the CALFED Program is primarily a fish 
program.
    Now, we recognize that if you are going to address the 
water delivery and water liability concerns in our Central 
Valley and throughout California, you need to address listed 
fish species concerns. There is no question about that because 
it is the same listed fish species that are creating many of 
the regulatory pinches, if you will, that are restricting some 
of the important water users south of the Delta from receiving 
their water supplies.
    Nevertheless, if you are going to have an ecosystem 
restoration program and you want to address the ecosystem as a 
whole, it is critical that you address the significant wetland 
loss that we have experienced here in our Central Valley.
    We ask for your help in providing some guidance to CALFED 
to make it a program that takes into greater consideration 
wetland and waterfowl species that have suffered so greatly 
from the loss of the 90 percent of their habitat here in 
California.
    We are here today to provide our support for H.R. 1985. We 
do ask for your assistance in providing us with some of the 
language in there that we need to make it a better bill. We 
thank you for the opportunity to be here today.
    [The prepared statement of Mr. Gaines follows:]

  Statement of Bill Gaines, Director, Government Affairs, California 
                         Waterfowl Association

    Good morning. Mr. Chairman and Members of the Committee, my name is 
Bill Gaines, and I am the Director of Government Affairs for the 
California Waterfowl Association. On behalf of our Association's 15,000 
members, and waterfowl enthusiasts throughout the Pacific Flyway, I 
would like to thank you for the opportunity to come before you today to 
discuss Northern California Water Security--Opportunities and 
Challenges.
    Founded in 1945, the California Waterfowl Association (CWA) is a 
private nonprofit organization dedicated to the conservation of 
California's waterfowl, wetlands and our hunting heritage. The 
California Waterfowl Association effectively pursues this mission 
through waterfowl research, habitat projects, education and outreach 
programs, and Government Affairs activities.
    Historically, California's Bay/Delta watershed provided over 4 
million acres of naturally occurring wetland habitat for Pacific Flyway 
waterfowl and other wetland-dependent species. Over the course of the 
last century, largely due to the construction of the federal Central 
Valley Project, the State Water Project, the conversion of land to 
agriculture, urban expansion, and flood control and navigation 
projects, over 90% of this once vast habitat base has been destroyed. 
The greatest percentage loss of this important habitat type in North 
America. Yet, today, our few remaining wetlands must still provide 
critically important nesting and wintering habitat for roughly 60% of 
Pacific Flyway waterfowl--representing nearly 25% of our continental 
waterfowl population. In addition to placing serious stress on our 
waterfowl resource, the significant loss of this habitat type has also 
had a substantial impact on many of our State's other native species. 
In fact, an estimated fifty percent of California's threatened and 
endangered species are, in some way, wetland-dependent.
    Due to significant changes in California's natural hydrology, most 
of our few remaining interior wetlands must now be ``managed''--
artificially irrigated and intensively managed to create and maintain 
marsh conditions. As a result of this very unique condition, the 
quantity and quality of wetland and waterfowl habitat available in 
California in any given year is highly dependent upon the availability 
of water supplies for wetland management. Recognizing this unique and 
serious condition, for more than half a century, our Association has 
worked cooperatively with State and federal legislators and agencies, 
other organizations and private landowners to obtain reliable water 
supplies for wetlands and to develop, influence, fund and implement 
wetland programs which facilitate the much needed enhancement, 
restoration and on-going maintenance of California's critical wetland 
habitat.
    Yes, water is the lifeblood of California's wetland and waterfowl 
conservation effort. Unfortunately, for many years, the lack of a firm 
wetland water supply has minimized our ability to fully manage 
California's few remaining habitat areas in all but the absolute 
wettest of years. Ten years ago, in response to this concern, our 
Association worked closely with Congress to draft the ``refuge water'' 
provisions of the Central Valley Project Improvement Act (CVPIA). When 
the Act was signed by President Bush in the fall of 1992, a significant 
positive step was taken towards addressing these critical annual 
wetland water needs. By ``guaranteeing'' firm annual water supplies to 
Central Valley federal refuges and State wildlife areas, and private 
wetlands within the Grasslands Resource Conservation District, this 
landmark legislation marked a critical, positive milestone in the 
California wetland conservation effort. But, with only about ten 
percent of our historical habitat still in place, much remains to be 
done.
    More recently, the CALFED Program was initiated to address 
ecosystem health, water quality, water supply reliability, and levee 
system integrity in the Bay/Delta watershed. Because the restoration, 
enhancement and maintenance of waterfowl habitat throughout much of 
this watershed also depends upon on these areas of concern, properly 
implemented, the CALFED Bay/Delta Program represents a tremendous 
opportunity to address the needs of migratory and nesting waterfowl, 
and other wetland-dependent species.
    The CALFED Program is a cooperative, inter-agency effort of 18 
State and federal agencies. In November of 1996, the people of 
California formally embraced the CALFED Program as the vehicle for 
addressing our State's water concerns by passing Proposition 204, the 
``Clean, Safe, Reliable Water for Cities, Farms and the Environment'' 
Bond Act--a measure which committed $995 million in State funding for 
the implementation of CALFED related activities. But, although these 
State dollars may appear significant, they alone are simply not enough 
to fuel this essential effort. CALFED is certainly the most significant 
and positive multi-interest endeavor ever undertaken to address water 
and environmental concerns in California, and perhaps throughout the 
entire nation. Yet, without the necessary funding to fully implement 
its many important facets, the Program will fall short of its 
considerable goal of providing all of California's urban, agricultural 
and environmental water interests with reliable long-term water 
supplies. Significant supplemental federal funding is integral to the 
success of this important Program.
    Congressman 4Ken Calvert's H.R. 1985, the ``Western Water 
Enhancement Security Act'', would address this serious concern in the 
near-term by authorizing significant federal funding for the CALFED 
Program, beginning in fiscal year 2002. Our Association firmly believes 
that the funding, guidance and appropriate governance that 
Representative Calvert's bill would provide are critical to the success 
of the CALFED Program, and we are pleased to offer this important 
measure our full support.
    Although we fully support this bill, we would also like to provide 
some specific thoughts on how this bill could more effectively help the 
CALFED Program to better achieve it's environmental goals. As currently 
written, Section 103 of H.R. 1985, entitled ``California Water Supply 
Security'', would require the Secretary of the Interior to operate the 
Central Valley Project (CVP) in a manner which assures south-of-Delta 
CVP agricultural water service contractors at least 70% of their 
existing contracts in a normal water year. At the same time, the 
Section also includes language that states that ``the increased supply 
shall be accomplished without reducing deliveries to other water 
agencies that rely on water diverted from the Bay/Delta watershed or 
degrading the quality of water...for municipal and industrial uses.'' 
With no specific similar protections called out for environmental 
users, we believe this provision, as currently written, places south-
of-Delta managed wetlands at considerable risk. Although the CVPIA does 
offer some protections for many of these habitats, the Act specifically 
allows for shortages in ``Level 2'' and ``Level 4'' wetland water 
deliveries. To address this concern, we ask that Section 103(a)(3) of 
H.R. 1985 be amended to also specifically protect managed wetlands from 
reduced deliveries to meet the increased south-of-Delta agricultural 
supply called out by the bill.
    Our Association would also like to offer the following general 
thoughts on how the environmental benefits provided by the CALFED 
Program could, and should be improved. To begin, it is important to 
note that we appreciate and fully support the overall goal of the 
CALFED Program to address water supply reliability, and we recognize 
the importance of addressing the habitat needs of listed fish species 
in achieving this objective. California's ``managed'' wetlands--which 
are also highly dependent upon surface water availability--will benefit 
greatly from achieving this goal as well. Yet, if the Program is to 
make an honest effort to restore the integrity of the Bay/Delta 
ecosystem, it must fully consider the serious habitat needs of native 
wildlife--most notably wintering and nesting waterfowl, and the listed 
``non-fish'' species and other wildlife which share their habitats.
    The tremendous loss of our historic Central Valley wetlands, and 
the resulting impact to many species--several of which are now 
threatened or endangered--is well documented. These species of concern 
are very low in profile compared with winter and spring run chinook 
salmon, delta smelt, and the other high-profile listed fish species 
CALFED has focused on, but they are every bit as threatened or 
endangered. The CALFED Program's ecosystem restoration effort could, 
and should play a significant role in addressing the habitat needs of 
these wetland-dependent species. Yet, thus far, the continued requests 
by our Association, and our conservation partners, to elevate wetland-
dependent species and their habitats to a high priority of the CALFED 
Program have largely been ignored.
    In the mid-1980's, in response to serious reductions in North 
American waterfowl populations, the North American Waterfowl Management 
Plan (NAWMP) was signed by the federal governments of Canada, the 
United States, and Mexico. This Plan established broad waterfowl 
populations goals, and identified seven initial priority areas on the 
North American continent in greatest need of habitat restoration and 
enhancement. California's Central Valley was one of these identified 
top priority areas.
    Two years later, in 1988, a habitat restoration program, in many 
ways like CALFED, was initiated to address NAWMP objectives in our 
Central Valley. Known as the Central Valley Habitat Joint Venture 
(CVHJV), this public/private partnership--consisting of nearly twenty 
State and federal resource agencies and private conservation 
organizations--carefully established biologically based acreage 
objectives for the preservation, enhancement, restoration and 
maintenance of waterfowl habitat throughout much of the CALFED project 
area. For the past 13 years, by working closely with private landowners 
and the agricultural sector to achieve its objectives, the CVHJV 
partnership has made great strides in addressing its identified habitat 
goals, and has gained considerable acceptance within the private 
sector.
    Representative Calvert's H.R. 1985 recognizes the importance of 
utilizing partnerships to achieve CALFED's goals. Yet, the Program 
itself continues to ignore what is arguably the most successful 
environmental restoration partnership ever created--the Central Valley 
Habitat Joint Venture. Today, we ask for you to use H.R. 1985 as a 
vehicle for reshaping CALFED into a program which takes advantage of 
the effective partnerships and extensive goodwill the CVHJV has created 
over the course of the past decade. We also ask for your assistance in 
guiding CALFED to more appropriately address all of our Bay/Delta 
ecosystem restoration needs. We request that language be inserted in 
the bill which requires the Program to fully recognize the many listed 
non-fish species who depend upon seasonal wetland habitats, and that a 
portion of the funding authorized in the measure be earmarked for 
projects consistent with the habitat objectives called out in the 
Implementation Plan of the Central Valley Habitat Joint Venture. 
Carefully amended in this way, H.R. 1985 could not only help CALFED to 
take advantage of the substantial private sector support currently 
enjoyed by the CVHJV, but also help the Program to bring the many 
public and private partners of the Joint Venture--and their available 
funding--to the CALFED table to assist in the delivery of the Program's 
ecosystem restoration goals.
    In conclusion, the California Waterfowl Association would like to 
applaud Representative Calvert for introducing H.R. 1985, and Members 
of the Committee for holding today's hearing. We also ask Congress to 
help us fully realize the potential of the CALFED Program to 
appropriately address the needs of our North American waterfowl 
populations and the other native plant and animal species who share 
their habitats.
    On behalf of the members of the California Waterfowl Association, 
and waterfowl enthusiasts throughout the North American continent, I 
thank you for the opportunity to come before you today, and I would be 
happy to answer any questions you may have at this time.
                                 ______
                                 
    Mr. Calvert. Thank you for your testimony.
    Ms. Davis.

  STATEMENT OF GRACE DAVIS, GOVERNMENT AFFAIRS MANAGER, INTEL 
                          CORPORATION

    Ms. Davis. First, I would like to thank you, Chairman 
Calvert, and Zoe Lofgren for allowing me to speak to you today 
on behalf of Intel Corporation regarding the economic impacts 
and benefits of a clean water supply.
    By way of background, Intel Corporation has 120 site 
facilities located in 50 different countries. California is 
home to two of our largest sites, the first located here in 
Santa Clara employing approximately 8,000 people, and another 
in Folsom which employs approximately 7,500.
    We employ 18,000 people in California alone with a 
worldwide employment base of 86,000 people. Moreover, we added 
approximately 20,000 of those jobs in the year 2000 recently.
    The year 2000 was our 14th consecutive year of revenue 
growth with sales totally $33.7 billion. Our industry as a 
whole is proud to provide high paying jobs for our local 
communities.
    To start, in the words of our CEO Craig Barrett, we have 
long said that product and environmental stewardship, as well 
as employee health and safety can go hand in hand with 
successful business practices.
    With this in mind, it is important to note that a clean, 
dependable water supply is a crucial element of our 
microprocessor manufacturing process. Simply put, the industry 
can't produce microprocessors without a clean, consistent 
quality water source.
    Additionally, when looking toward the future, this clean, 
sustainable water supply is a key determinant in our expansion 
plans within California and across the nation. Intel uses the 
water to rinse off computer chips of impurities and 
imperfections so they work flawlessly inside computer products.
    Each year we use approximately 6 billion gallons of water 
to manufacture and assemble our microprocessors worldwide. At 
face value, that's a lot of water. But the amount of water used 
by Intel as a whole is much smaller than most people believe.
    For example, a typical golf course in Arizona uses the same 
amount of water per day as an Intel wafer fab. Of all water 
users in the United States, industry accounts for 6 percent of 
water consumption while electric and electronic equipment 
manufacturing, including Intel's products, account for about 1 
percent of that.
    Because we recognize how critical a clean ultra-pure water 
supply is, we have taken great measures to ensure we use our 
water supply as efficiently and responsibly as absolutely 
possible. From an external perspective, water quality and 
conservation are our Intel's top environmental issues.
    As a result, we have taken every measure to ensure we are 
maximizing our own water efficiency. For example, we have 
created an industrial water management program combining some 
of our best water conservation strategies from various Intel 
sites into what we call our best-known methods.
    Rather than reinvent the wheel, if a site is in need of 
water conservation, we know how much the program costs, what it 
takes to design it, run it, and we can implement it at the 
needed site.
    This program can reduce the amount of fresh water used at 
an individual factory by 50 to 60 percent. Even with Intel's 
healthy growth, normalized water use has remained relatively 
constant and flat.
    Overall, Intel recycles about 1 billion gallons of water 
per year. Between 1998 to 2001, Intel will save about 20,000 
acre-feet of water, or the amount used by 100,000 people per 
year. This is equal to all the water that falls over Niagara 
Falls in two and a half hours.
    As part of our long-term strategy, we have established a 
new working group chartered to develop a water management 
strategy and an implementation plan that includes a reduction 
in overall water consumption for our major manufacturing sites.
    Finally, as we continue to grow, I can assure you we will 
continue to expand our resource reduction strategies to lessen 
the impact on our local environments. At the same time, the 
overall health of the high-tech economy is reliant upon crucial 
resources and clean water is a critical component of the 
manufacturing process.
    Once again, simply put, we can't do it without a clean 
water supply. As such, our industry sector needs to have access 
to this critical resource.
    On behalf of Intel Corporation, I would like to thank you 
for allowing me to speak to you today and I look forward to 
answering any questions you may have.
    [The prepared statement of Ms. Davis follows:]

      Statement of Grace Davis, Government Affairs Manager, Intel 
                  Corporation, Santa Clara, California

    First, I would like to thank you, Chairman Calvert as well as your 
esteemed colleagues on the Water and Power Resource committee for 
allowing me to speak to you today on behalf of Intel Corporation 
regarding the economic impacts and benefits of a clean water supply.
    By way of background, Intel Corporation has 120 site facilities 
located in 50 different countries. California is home to two of our 
larger sites, the first located here in Santa Clara with an employment 
base of approximately 8,000 people and another in Folsom with 7,500 
employees. We employ 18,000 people in California alone with a worldwide 
employment base of 86,000 people. Moreover, we added approximately 
20,000 of those employees last year alone.
    The year 2000 was our 14th consecutive year of revenue growth, with 
sales of $33.7 billion dollars. Net income was up 44% including 
acquisition-related costs. Our industry as a whole provides high paying 
jobs to our local communities.
    To start, in the words of our CEO Craig Barrett, we have long said 
that product and environmental stewardship, as well as employee health 
and safety can go hand in hand with successful business practices.
    With this in mind, it is important to note that a clean, dependable 
water supply is a crucial element of our microprocessor manufacturing 
process. Simply put, the industry can't produce microprocessors without 
a clean, consistent quality water source. Additionally, when looking 
towards the future, this clean, sustainable water supply is a key 
determinant in our expansion plans within California and across the 
nation.
    Intel uses the water to rinse off computer chips of impurities and 
imperfections so they work flawlessly inside computer products.
    Each year, we use approximately 6 billion gallons of water to 
manufacture and assemble our microprocessors, worldwide. At face value, 
that's a lot of water. But the amount of water used by Intel as a whole 
is much smaller than many people believe. For example, a typical golf 
course in Arizona uses the same amount of water per day as an Intel 
wafer fab. Of all water users in the United States, industry accounts 
for six percent of water consumption while electric and electronic 
equipment manufacturing, including Intel's products account for about 
one percent of that.
    Because we recognize how critical a clean ultra-pure water supply 
is, we have taken great measures to ensure we use our water supply as 
efficiently and responsibly as absolutely possible. From an external 
perspective, water quality and conservation are our Intel's top 
environmental issues. As a result, Intel has taken every measure to 
ensure we are maximizing our own water efficiency. For example, we have 
created an industrial water management program combining some of our 
best water conservation strategies from various Intel sites-into what 
we call our best-known methods.
    Rather then reinvent the wheel, if a site is in need of water 
conservation, we know how much the program costs, what it takes to 
design it, run it, and we can implement it at the needed site.
    This program can reduce the amount of fresh water used at an 
individual factory by 50-60 percent. Even with Intel's healthy growth, 
normalized water use, has remained relatively flat.
    Overall, Intel recycles about 1 billion gallons of water per year. 
Between 1998 to 2001, Intel will save about 20,000 acre feet of water--
or the amount used by 100,000 people in a year. This is equal to all 
the water that falls over Niagara Falls in 2 and a half hours.
    As part of our long term strategy, we have established a new 
working group chartered to develop a water management strategy and an 
implementation plan that includes a reduction in overall water 
consumption for Intel's major manufacturing sites. The scope of this 
team is to set goals, develop water use models and evaluate water use 
reduction, recycling and reclamation technologies. The team will 
establish roadmaps of existing and future site.
    Intel is committed to saving water. At the same time, in order for 
this industry to continue, it's critical that we have access to an 
abundant clean water supply for the manufacturing process. Our Hudsen 
Massachusetts site has proven to be an efficient, cost-competitive 
addition to Intel's manufacturing network. Intel has invested nearly 5 
pecentof the cost of the project in water recycling and conservation 
measures that use innovative technology and exceed state requirements. 
It's among the world's first semiconductor manufacturing plant to 
reuse, clean and recycle the ultra pure water it uses to rinse computer 
chips. This 10 million dollar investment will enable Intel to use less 
water than the increased production level would ordinarily require.
    Finally, as we continue to grow, I can assure you we will continue 
to expand our resource reduction strategies to lessen the impact on 
local environments. At the same time, the overall health of the high 
tech economy is reliant upon crucial resources and clean water is a 
critical component of the manufacturing process. As such, our industry 
sector needs to have access to this resource. On behalf of Intel 
Corporation, I would like to thank you for allowing me to speak to you 
today.
                                 ______
                                 
    Mr. Calvert. Thank you, Ms. Davis.
    Mr. Wenger.

STATEMENT OF PAUL J. WENGER, SECOND VICE PRESIDENT, CALIFORNIA 
                     FARM BUREAU FEDERATION

    Mr. Wenger. Thank you, Mr. Chairman, for the opportunity to 
present testimony to the committee today. My name is Paul 
Wenger. I am the Second Vice President of the California Farm 
Bureau Federation and a farmer from Modesto. I raise walnuts 
and alfalfa on my family's farm that was purchased by my 
grandfather in 1910.
    On behalf of the Farm Bureau, I would like to announce our 
support for H.R. 1985, the ``Western Water Enhancement Security 
Act,'' and express our appreciation for your leadership on the 
difficult and complex issues that surround California's water 
supply.
    The Farm Bureau has supported the CALFED process since its 
inception in 1994 and continues to actively participate in the 
CALFED Program. In 1996 the Farm Bureau supported the Safe, 
Clean, Reliable Water Supply Act, otherwise known as 
Proposition 204, because we believed in the promise of CALFED. 
CALFED promised that California's water users would ``get 
better together,'' and we believe CALFED can and should deliver 
on that promise.
    As you move forward in the legislative process, we ask you 
to look for alternative ways to accomplish the environmental 
goals of the CALFED Program. The Farm Bureau urges you to 
maximize the ecosystem restoration potential of CALFED by fully 
embracing the locally driven and cooperative programs, in lieu 
of outright government land acquisitions and regulation.
    The Farm Bureau believes that government land acquisitions 
are not the best way to support habitat development. The most 
fiscally responsible and effective means to develop habitat is 
through a program like Partnerships for Restoration.
    This program would be a voluntary local landowner/local 
government driven process where framers and ranchers take 
proactive steps to increase the habitat value of their land in 
return for financial compensation and protection from 
prosecution under the Endangered Species Acts.
    Landowner ``assurances'' are a vital component of the 
program because landowners should not be criminally prosecuted 
for accidental interference with protected species when they 
are trying to support and preserve these species for future 
generations.
    I sat through your discussion in Modesto on Saturday and it 
was interesting to hear about how agriculture has been said to 
use 85 percent of the developed water. According to Bulletin 
160 of the Department of Water Resources, agriculture currently 
uses 43 percent of the developed water in California, 
environment 46 percent, municipal and industrial 11 percent.
    Conservation we keep hearing and agriculture will settle 
all the problems of water in California. Conservation is a 
misnomer when you talk about agriculture. Agricultural water is 
not lost. It is interesting as we flood and furrow irrigate 
some of our ground, even the University of California at Davis 
said the most effective and efficient way to use water, 
depending on your soil type, of course, is through flood 
irrigation.
    It's interesting in the Modesto area where you were at on 
Saturday that they are now facing a problem as people have 
converted to drip and micro-irrigation but there is less water 
being applied to the surface.
    We apply just enough water for the plants to use and 
there's nothing that is going and percolating down in the 
underground aquifers when usually we took that water and about 
15 or 20 percent of the water was used by the plant and the 
rest of it found its way down through the soil stratus and into 
the underground aquifers.
    Instead we now have Modesto irrigation district and other 
areas putting in reinjection wells taking possibly contaminated 
surface waters and trying to reinject them into underground 
aquifers, and yet we are telling farmers not to apply more 
water onto their land. I find it ironic.
    We heard that if you could increase the price of water, 
that we would have conservation and those who could pay for it 
would get it. I find this unfair. I am a farmer and I raise, 
like I said, alfalfa and walnuts. I will not know until 
December this year what I will get for my walnuts I raised last 
year. I don't know too many people in business today that wait 
that long to find out if they are going to have a profit or a 
loss.
    Agriculture is a price taker, not a price setter. If we 
could just say whatever we pay for the price of water, we'll 
pass it on to the ultimate consumer which is all of us here. 
Fine. We can't do that. We produce a crop and then we ask 
somebody what they are going to pay us for it and we've got to 
figure out how to make a profit in between.
    When you look at the current farm prices that we all know 
about, we are selling our products at prices that we haven't 
seen for 30 years. I know our costs are a lot more than they 
were 30 years ago. Farmers are stewards of the land. We are 
true conservationists.
    I can remember 20 years ago, 30 years ago when I started 
farming in my dad's, and even in my grandfather's time, we 
always let the fence lines grow so you have habitat for quail 
and other things. It's funny that now all of a sudden people 
are focusing on our farms and we have people from outside the 
farm telling us what is best for our land, how best to manage 
it.
    You can't really blame farmers when all of a sudden they 
say, ``We're going to clear our fence rows because of a thing 
called the Endangered Species Act and other people that think 
they know what is best for our land.'' I find it ironic that we 
have endangered species on our land currently. We should be 
applauded and not regulated.
    Real quickly because the light went on and we would just 
like to say that we do have some things that we would like to 
see just a little as far as in the Act but we do support H.R. 
1985.
    We look forward to working with you and your staff to 
cooperate to implement the goals of CALFED while minimizing the 
program's effects upon our state's valuable agricultural 
resources. We will be discussing some clarifications with your 
staff. We also have some attachments, I think, written, changes 
that we would maybe like to see, some little things.
    Thank you for having this hearing today.
    [The prepared statement of Mr. Wenger follows:]

Statement of Paul Wenger, Second Vice President of the California Farm 
                           Bureau Federation

    Thank you, Mr. Chairman, for the opportunity to present testimony 
to the committee today. My name is Paul Wenger. I am the Second Vice 
President of the California Farm Bureau Federation (``Farm Bureau''), 
and a farmer. I grow walnuts and alfalfa on my family's farm that was 
purchased by my grandfather in 1910. On behalf of Farm Bureau, I would 
like to announce our support for H.R. 1985, the ``Western Water 
Enhancement Security Act,'' and express our appreciation for your 
leadership on the difficult and complex issues that surround 
California's water supply.
    The Farm Bureau has supported the CALFED process since its 
inception in 1994 and continues to actively participate in the CALFED 
Program. In 1996, the Farm Bureau supported the Safe, Clean, Reliable 
Water Supply Act, otherwise known as Proposition 204, because we 
believed in the promise of CALFED. CALFED promised that California's 
water users would ``get better together,'' and we believe CALFED can 
and should deliver on that promise.
    As we move forward in the legislative process, we ask you to look 
for alternative ways to accomplish the environmental goals of the 
CALFED Program. The Farm Bureau urges you to maximize the ecosystem 
restoration potential of CALFED by fully embracing the locally driven 
and cooperative programs, in lieu of outright government land 
acquisitions.

1. The Farm Bureau believes that government land acquisitions are not 
        the best way to support habitat development:
    The Farm Bureau believes the most fiscally responsible and 
effective means to develop habitat is through a program like 
Partnerships for Restoration. This program would be a voluntary local 
landowner/local government driven process where farmers and ranchers 
take proactive steps to increase the habitat value of their land in 
return for financial compensation and protection from prosecution under 
the Endangered Species Acts. Landowner ``assurances'' are a vital 
component of the program because landowners should not be criminally 
prosecuted for accidental interference with protected species when they 
are trying to support and preserve these species for future 
generations.
    Wildlife and farming are compatible. Our farms and ranches have 
been supporting wildlife of every variety for generations because our 
family farmers are excellent stewards of the land. In fact, farmers and 
ranchers are the most qualified guardians of these resources because 
the soil, weather, seasons, wildlife, and vegetation guide every aspect 
of their lives and livelihoods. We do not need pilot programs to see if 
a program like Partnerships for Restoration could be successful because 
we are surrounded by examples of farmers and ranchers taking proactive 
steps to support wildlife.
    For example there is Dave Fisher, a high desert cattleman in San 
Bernardino County, who is continuing his family's 150-year tradition of 
ranching and wildlife preservation. Through water development and 
responsible grazing practices, he has created a haven for wildlife. 
Because of his efforts, his ranch is the home of a flourishing 
population of big horn sheep and the most viable population of desert 
tortoises in the state.
    There is Tom Muller who farms 6,000 acres with his partners in Yolo 
County, in addition to the 850-acre vineyard Muller personally manages. 
Muller has provided significant nesting habitat on his farm by letting 
his ditches and field lines be covered with grassy vegetation, and he 
even plants native grasses and trees in these areas and at the low ends 
of his fields. His vineyards also provide cover for wildlife because he 
mows between the vines instead of discing. Muller has also introduced 
an Integrated Pest Management Program to reduce the need for spraying.
    There is Charlie Matthews who was a pioneer of using rice rollers 
on his Yuba County property. The farm, which was bought by Mathews' 
great-grandfather in 1860, is located in an area noted for its 
waterfowl populations. The rice straw roller is used to incorporate 
rice straw into the soil after harvest, allowing for easier breakdown 
and helping to establish artificial wetlands for migrating waterfowl. 
Mathews floods his rice fields from October to March, allowing time for 
the later migrating species to stop and rest on his farm. Mathews' rice 
farming techniques are not unusual, and are now, in fact, the 
predominant practice in Northern California.
    A program like Partnerships for Restoration would be a viable 
alternative to the significant government land purchases proposed as a 
part of the CALFED Program. With adequate protection from liability and 
some financing, California's farmers and ranchers could work with the 
regulatory agencies to create many times over the amount of habitat 
that can be supported through outright government ownership.
    The Farm Bureau is concerned about the government's continuing 
consumption of California's privately owned land and water resources 
because each purchase threatens our state's farming and ranching 
infrastructure.

2. There is a baseline of agricultural land and water resources that 
        must be maintained by each community:
    When the resources within a community drop below the agricultural 
resources baseline, the region is no longer able to support the farming 
infrastructure. The processing plants, equipment dealers, 
transportation links, farm workers and other necessary farm support 
services either go out of business or leave the area. Once this occurs, 
the remaining agricultural lands within the region are sold to the 
highest bidder because the farmers and ranchers are no longer able to 
sell and transport their fresh fruits, vegetables, nursery, meat and 
dairy products to the urban markets, and the farm workers must make 
other arrangements to support their families.

3. Cooperative habitat restoration projects are less expensive and 
        provide greater fishery benefits than government water 
        purchases.
    There is strong evidence to suggest that physical restoration of 
habitat, like planting trees on stream banks and putting gravel in 
stream beds, is less expensive than purchasing water, and results in 
greater increases in fish populations. In particular, the Farm Bureau 
is troubled by the substantial CALFED Environmental Water Account (EWA) 
purchases because this water is being converted from agricultural use.
    Since the EWA water is only for ``recovery'' of protected fish 
species, in theory, this water would not be otherwise involuntarily 
taken by the regulatory agencies to protect the fish from ``jeopardy.'' 
The agencies have more discretion in how they ``recover'' species than 
they do in avoiding jeopardy. As such, the Farm Bureau urges CALFED to 
find alternatives to unnecessarily converting agricultural water 
resources to non-agricultural use.
    The Farm Bureau supports H.R. 1985 and looks forward to working 
with your staff to cooperatively implement the goals of CALFED while 
minimizing the program's effects upon our state's valuable agricultural 
resources.
    Mr. Chairman, we will be discussing some clarifications with your 
staff as the bill progresses. Please refer to our attachment for 
information regarding how this bill could be even better. Thank you 
very much for the opportunity to provide the perspective of 
California's farmers and ranchers.

                               ATTACHMENT

    Mr. Chairman, there are a number of places within H.R. 1985 where 
the California Farm Bureau Federation would like to see the bill 
clarified, as follows:
    H.R. 1985, May 23, 2001 (10:57 AM), p.4, lines 20-25 and p.5, lines 
1-2.
                               * * * * *
    ``ENVIRONMENTAL WATER ACCOUNT.--The term `Environmental Water 
Account' means the water account established by the CALFED agencies to 
provide water for the protection and recovery of species of fish listed 
under section 4(c) of the Endangered Species Act of 1973 (16 U.S.C. 
1533(c)) at no direct cost and no indirect cost to the water users, in 
the Bay-Delta watershed and export areas''. 1
---------------------------------------------------------------------------
    \1\ We continue to question whether scientifically and economically 
the EWA can be justified, especially given the available alternatives 
to water purchases.
---------------------------------------------------------------------------
                               * * * * *
    Id. H.R. 1985, at p.10, lines 20-24, change lines 24-25 and delete 
all of lines 1-10 on p. 11, substituting the following language:
                               * * * * *
    ``(c)PROMOTION OF PARTNERSHIPS.--The joint structure proposed under 
this section shall provide the following:
    (1) The Governance Board shall adopt, no later than January 1, 
2002, a safe harbors/assurances program voluntarily established by 
private landowners and local agencies, such as the Partnerships For 
Restoration Program. Under this program, the CALFED agencies shall 
partner with landowners and local agencies to develop cooperating 
landowner commitments that will meet co-equal objectives to achieve 
local agricultural resources baseline goals as defined in (2) below and 
to implement the ecosystem restoration goals in the Record of Decision.
    (2) AGRICULTURAL RESOURCES BASELINE--It is necessary for a viable 
agricultural community to have a minimum acreage of prime, unique, and 
statewide importance farmland and associated water supply. This land 
and water must remain available for agricultural production in the 
[defined geographic area, e.g., Yolo County] for disposition as agreed 
upon by the affected farming community.
    (iii) ``Establish an Agricultural Water Account (AWA) similar in 
concept to the Environmental Water Account (EWA) as identified in the 
Record of Decision that requires a portion of any newly developed Bay-
Delta Program water supply to be used as agricultural mitigation water, 
based on the amount of agricultural water redirected to other uses as a 
result of Bay-Delta Program actions. The AWA may be a component of the 
EWA.''
                               * * * * *
    Id. H.R. 1985, p.12, change lines 13-17 to read as stated below and 
delete rest of section.
                               * * * * *
    ``(f) PRELIMINARY REQUIREMENTS.--The joint structure proposed under 
this section shall provide that -
    (1) before acquiring land as part of the CALFED program, the 
Governance Board shall first conduct a survey to determine what land is 
currently owned by the Federal Government and is available to achieve 
identified CALFED program objectives.'' 2
---------------------------------------------------------------------------
    \2\ CALFED should return to Congress to authorize appropriations 
for any additional land acquisitions.
---------------------------------------------------------------------------
                               * * * * *
    Id. H.R. 1985, p.13, change lines 1-8, as follows:
                               * * * * *
    ``(g) ACHIEVEMENT OF GOALS OF RECORD OF DECISION--The joint 
structure proposed under this section shall provide that the Governance 
Board shall partner with private landowners and local agencies to 
develop cooperating landowner commitments that will meet coequal 
objectives of achieving local economic and social goals and to 
implement the ecosystem restoration goals in the record of decision.''
                               * * * * *
    Id. H.R. 1985, p.17, change to lines 5-13 to the following and 
delete rest of section.
                               * * * * *
    ``(1) If, by December 31 of any year, the Environmental Water 
Account water purchase targets, or their functional equivalents, have 
not been met, the Federal agencies shall continue their efforts to meet 
the water purchase targets and shall make use of the available 
Environmental Water Account assets to provide protection and recovery 
for any species listed under section 4(c) of the Endangered Species Act 
of 1973 (16 U.S.C, 1533(c)).'' 3
---------------------------------------------------------------------------
    \3\ This provision is inconsistent with section 4(8), especially 
lines 1 and 2 on p.5.
---------------------------------------------------------------------------
                               * * * * *
    Id. H.R. 1985, p.18, line 5, change the date to 2002.
                               * * * * *
    ``(c) LAND ACQUISITION; MANAGEMENT PLAN REQUIRED FOR EXISTING 
LANDS.--The State agencies and the Federal agencies may not, under the 
interim governance structure described in Attachment 3 of the record of 
decision, acquire any additional lands for ecosystem restoration unless 
such agencies, through the Secretary and by not later than January 1, 
2002 develop a management plan for all lands acquired by such agencies 
under such structure before the date of the enactment of this Act.
                               * * * * *
    Id. H.R. 1985, p.19 at line 9, change ``affect'' to ``supercede''.
                               * * * * *
    ``Nothing in this paragraph is intended no shall be construed to 
supercede the requirements for the issuance of such permits and 
approvals.''
                               * * * * *
    Id. H.R. 1985, p.20, lines 14-18, delete subsection A(ii).
                               * * * * *
    ``(A) Whether a project--(i) increases yield. 4
---------------------------------------------------------------------------
    \4\ Delete for 2 reasons: (1) Taking agricultural land out of 
production would qualify under A(ii); and (2) section A(ii) does not 
take into account groundwater.
---------------------------------------------------------------------------
                               * * * * *
    Id. H.R. 1985, p.25, lines 11-18, add SOUTH DELTA IMPROVEMENTS.
                               * * * * *
    ``(3) NEW PROJECTS REQUIRED TO BE INCLUDED.--The Governance Board, 
through the Secretary, shall include in reports under this subsection 
each of the following new CALFED projects, as identified in the record 
of decision, by the dates indicated:
    (A) A project to raise the height of Shasta Dam, by January 1, 
2004.
    (B) South Delta Improvements and In-Delta storage; by January 1, 
2002.''
                               * * * * *
    The Farm Bureau supports H.R. 1985 and looks forward to working 
with your staff to cooperatively implement the goals of CALFED while 
minimizing the program's effects upon our state's valuable agricultural 
resources.
                                 ______
                                 
    Mr. Calvert. Thank you, Mr. Wenger.
    Ms. McPeak.

   STATEMENT OF SUNNE MCPEAK, PRESIDENT/CEO, BAY AREA COUNCIL

    Ms. McPeak. Mr. Chairman, it is a pleasure to be able to 
appear before you again today and also to have the opportunity 
to address Congressmember Lofgren.
    I represent the Bay Area Council, a business sponsored 
public policy organization that covers the nine counties in the 
Bay Area. The nine counties represent a population of about 6.5 
million people and an economy that is approaching $250 billion 
annually.
    I'm going to be a little bit provincial in my testimony 
talking about the region. Clearly an economy of $250 billion 
requires water quality and water supply in order to operate. 
But we have also built our economy around a very fragile and 
special ecology, the Bay-Delta estuary.
    The Bay Area Council has a business set of leaders who have 
been engaged in water policy for more than a decade closely 
following the CALFED process. I personally have been involved 
in water for about 28 years in California.
    We served on the Bay-Delta Advisory Committee. In fact, I 
co- chaired it. Others will testify before you today also 
served and those in the audience who are members of BDAC. The 
message we want to underscore is one you've heard from us 
before.
    I will reference a letter we sent dated June 1 to you 
supporting your efforts and Senator Feinstein to introduce 
legislation to implement CALFED. The Bay Area Council also has 
joined with a number of other business organizations and labor 
organizations in California and that letter was submitted as 
testimony on Saturday in Modesto.
    The message that is conveyed in this correspondence is the 
following. We have worked long and hard to come to an agreement 
in California through the CALFED process and now with your 
leadership please let us move forward in implementing those 
agreements.
    It is not time to go back and reopen and renegotiate what 
was a solution put forward that not only was balanced. You've 
heard that word. Sometimes that means we are addressing 
simultaneously water supply, water quality, and fisheries, or 
that we are fairly taking into account all of the needs of the 
region of the state.
    That solution was also integrated. I'm going to use that 
word and try to explain it. We advanced recommendations through 
the CALFED process that said absolutely restore the Bay-Delta 
estuary, the environment. The ecosystem has to be fixed.
    We also advanced recommendations that said please use water 
as efficiently as possible. That means we save every last drop 
we possibly can. We use every water efficiency measure that is 
available to us by conservation to reclamation to water 
marketing.
    We also said you have to do facilities. Anyone who thinks 
we can take care of the environment let alone the economy of 
this region and all of California without that integrated 
solution simply doesn't understand the facts.
    We come forward as, yes, the business community but also as 
ardent supporters of a restored environment that says please 
move forward on CALFED.
    In April I was also questioned by members of your committee 
regarding energy and power and perhaps the lessons to be 
learned from the correct crisis that we are enduring in 
California so I brought for you a report that I can submit in 
testimony that Jim Cunneen and I and the Silicon Valley 
manufacturing group released in April that documents the 
situation, how do we get into it, and also solutions.
    The lessons that I think should be drawn from our energy 
predicament and applied to the water challenge facing us is the 
following one. If you delay investing in infrastructure, you 
are ultimately going to pay a higher price.
    Secondly, we have to have adequate supply. You have to have 
capacity in the system. Thirdly, an integrated solution is the 
way to be the most cost effective and environmentally 
sensitive. Optimize conservation but also invest in 
infrastructure.
    For water, yes, we need to pursue water efficiency measures 
and do that immediately and simultaneously also pursue our 
investment in our storage, conjunctive use, storage underground 
and above ground, and appropriate conveyance if we are going to 
have improvement in our environment and fisheries, if we are 
going to have adequate water supply, and sufficient quality to 
support not only our economy but also our ecology. Thank you.
    [The prepared statement of Ms. McPeak follows:]

  Statement of Sunne Wright McPeak, President & CEO, Bay Area Council

    The Bay Area Council is a business-sponsored, CEO-led, public-
policy organization founded in 1945 to promote economic prosperity and 
quality of life in the region. The Bay Area region encompasses the nine 
counties that rim San Francisco Bay and 100 cities, including Oakland, 
San Francisco and San Jose, the heart of Silicon Valley. The economy of 
the Bay Area is approaching $250 billion annually. The regional economy 
not only is dependent on an adequate supply of quality water to thrive, 
but also is closely linked to the environmental health of the Bay-Delta 
Ecosystem. As an association of major employers, the Bay Area Council 
has been involved in California water policy issues for more than a 
decade and since 1994 has been deeply engaged in the Bay-Delta CALFED 
process.
    The following points summarize the perspectives of the Bay Area 
Council as a regional organization of major employers with a history of 
involvement in California water policy.
     California water policy is at a critical juncture. 
Decisions that are being made today about how to improve California's 
water infrastructure will having profound and lasting implications for 
the nation and the state, now the 5th largest economic power in the 
world.
     Water policy decisions and the manner in which they are 
implemented will affect every resident and every business in 
California, which in turn has major implications for the national 
economy.
     While we have come along way over the last several years 
to craft an action plan to restore the critical hub of the state's 
water system, the Bay-Delta, we need investment to move that plan to 
reality.
     That is why the employers who are members of the Bay Area 
Council have invested in the development of the solutions and are now 
focusing authorize of the funds necessary to implement the solutions. 
We have joined with other business organizations in California to 
advance workable solutions.
     Following the prolonged drought of the late 80s and early 
90s, California businesses invested literally billions of dollars to 
increase their water efficiency, getting more production out of every 
gallon.
     Those efforts have paid off tremendously. California 
water agencies now serve more people and industries than in the early 
80s with almost the same amount of water. However, as the limits of 
efficiency from the current supply are approached, new investments must 
be made.
     As we know, permanent reductions in water usage that have 
been achieved through retrofitting industries with water efficient 
hardware lead to demand hardening. This means that conservation efforts 
in the future will not free up the additional water that will be needed 
to sustain a strong economy.
     Ironically, businesses that drive economic growth and 
productivity are among the most dependent on reliable, high quality 
water.
     To ensure that the economy continues to thrive, business 
needs a reliable, good quality supply of water. This is especially true 
in the high tech industry where variances in supply and quality can 
translate into more costs and a higher bottom line.
     It goes without saying that thriving businesses lead to 
more jobs which leads to a strong economy. Water is one of the key 
threads that holds those pieces together.
     The demand for jobs will only increase as California's 
population is estimated to reach 40 million by 2010 and almost 50 
million by 2020. The Bay Area is projected to generate more than 1 
million new jobs by 2020 and grow by perhaps as much as 1.4 million 
people.
     Last year, the state and federal government and 
stakeholders, including the business community, supported the final 
plan to fix the Bay-Delta, California's major water infrastructure 
system. The plan is multi-faceted and calls for enormous investment in 
water quality and supply, as well as restoration of the environment.
     Severe water shortages and economic impacts are predicted 
for California if the investments are not made now. In fact, it is 
likely that significant shortages and economic impacts will be 
experienced before all of the improvements and facilities included in 
the Bay-Delta plan can be completed and brought on line.
     The current energy crisis in California is a stark 
reminder of what can happen when investments are not made in 
infrastructure, resulting in deterioration of both capacity and 
flexibility to meet normal demand levels, not to mention the ability to 
respond in case of emergencies.
     The Bay-Delta program provides essential ingredients to 
rebuild the nation's water infrastructure in California. But 
significant financial resources will be needed at both the federal and 
state level.
     The program calls for $1 billion to expand existing 
storage facilities and construct new ones. It includes $1 billion 
toward environmental and ecosystem restoration. Another $1 billion is 
earmarked to upgrade the aging water conveyance system. Improvements to 
drinking water quality for all water users is slated to receive $800 
million. Approximately $1 billion is earmarked for water conservation 
and reclamation programs.
     These investments are critical to drought proof 
California and to protect this vital economy.
     A federal funding authorization is pivotal to improving 
California's water infrastructure.
    Agreement last year on a plan of action signaled a new era of 
cooperation and water management that is historic. It is time to seize 
this opportunity and move forward. The Bay Area Council and major 
employers in the region join with business organizations throughout 
California in urging Congressional action to invest in the water 
infrastructure needed to support the nation's economy for the 21st 
Century. Attached is our letter of support for CALFED implementation 
legislation.
                                 ______
                                 
    Mr. Calvert. Thank you. Thank you for your testimony.
    Mr. Estremera. It's good to see you again.

STATEMENT OF TONY ESTREMERA, CHAIRMAN OF THE SANTA CLARA VALLEY 
               WATER DISTRICT BOARD OF DIRECTORS

    Mr. Estremera. Thank you. Mr. Chairman, members of the 
Subcommittee including, of course, my own Representative 
Lofgren, thank you for the opportunity to provide testimony 
today.
    My name is Tony Estremera and I'm Chairman of the Santa 
Clara Valley Water District Board of Directors. Let me begin by 
welcoming you and the members of the Subcommittee to San Jose, 
our home, and to express to you our appreciation for your 
leadership in moving forward with H.R. 1985.
    Our Board recently took a support position on your bill and 
we look forward to working with you and your staff as the bill 
moves through the legislative process.
     The Santa Clara Water District is the principal water 
supply agency for Santa Clara County and the Silicon Valley. 
Our duties include providing drinking water for more than 1.7 
million people, managing the local groundwater basin and 
providing flood management service for the entire county.
    In an average water year more than half of the water used 
in the county comes from the Bay-Delta watershed and in drier 
years our reliance on Bay-Delta water reached as high as 90 
percent so I'm sure you can see why the reliability of our Bay-
Delta supplies is so important to us.
    The residents and businesses of Silicon Valley also need a 
high-quality water supply. Unfortunately, the quality of our 
Delta sources ranks in the bottom 10th percentile nationwide 
and poses constant challenges to us in treating this water to 
meet public health standards.
    Mr. Chairman, you asked us three questions. The first 
question was what challenges do we face with regards to our 
water supply, quality, and reliability. The principal challenge 
that we face is how to provide a reliable high- quality water 
supply to our customers in a practical, cost effective, and 
environmentally sensitive manner.
    Our challenge has been made more difficult by regulatory 
changes and fishery protection measures that resulted in a less 
secure lower quality water supply for our region. Restrictions 
in the Delta have reduced the reliability of our imported 
supplies. Historically we could count on receiving most, if not 
all, of our entitlement right from the Delta. Unfortunately, 
this is no longer the case.
    Another problem is what we refer to as the low-point 
problem that we have at St. Louis Reservoir. Before the last 5 
years we have been threatened with reservoir levels predicted 
to drop so low and the object counties so high that we have 
suffered supply outages.
    Fortunately, through heroic efforts we were able to avoid 
the situation but we can't continue to operate in this way. 
That is why the St. Louis Bypass Project is extremely important 
to our region. The project will provide us with improved water 
supply, quality, and greater flexibility in the operation of 
our St. Louis reservoir.
    As I mentioned previously the reliability of our water 
supply has decreased. This is particularly true of our supply 
from the CVP. Therefore, it is essential that the Department of 
the Interior finalize the municipal and industrial water 
shortage policy so that we know how reliable our CV supplies 
will be.
    You also asked what steps we are taking to improve the 
quality and reliability of our own water supplies. The District 
is implementing our integrated water resource plan that 
includes increased levels of water conservation, recycling, 
banking, and transfer. Our advanced planning has allowed us to 
cope with the 35 percent state water project delivery this year 
but if the reduced deliveries continue, our local supplies will 
be exhausted.
    The District is also leading the Bay Area Blending and 
Exchange effort to explore opportunities to improve water 
quality and water supply reliability at the regional level.
    Finally, you asked what additional measures we needed to 
meet our region's immediate and long-term needs for secure 
water supply. We see those measures as the following:
    1. Adequate Federal funding for the CALFED Bay-Delta 
Program including complementary actions like San Louis Bypass 
Project and Bay-Area Blending and Exchange Program.
    2. Clear, consistent, and coordinated implementation of 
administrative policies, regulatory decisions, and project 
operations so the reliability of our supplies won't suffer from 
any new initiatives.
    3. An effective stakeholder based governance structure for 
the CALFED Program.
    4. A strong commitment by CALFED and the CALFED agencies to 
invest in measures to improve Delta drinking water quality from 
the source to the tap.
    Mr. Chairman, and members of the Subcommittee, thank you 
again for holding this hearing here in San Jose. On behalf of 
the District Board of Directors I want to thank you for the 
leadership that you have shown on what may be the most 
important resource issue facing our state. For our part we 
pledge to work closely with you and your staff as the CALFED 
bill moves through the legislative process. Thank you.
    [Statement of Mr. Estremera follows:]

Statement of Tony Estremera, Chairman of the Board of Directors, Santa 
                      Clara Valley Water District

    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity to provide testimony on Northern California Water 
Security--Opportunities and Challenges. My name is Tony Estremera and I 
am Chairman of the Board of Directors of the Santa Clara Valley Water 
District.
    Let me begin by welcoming you and the members of the Subcommittee 
to San Jose, our home, and to express to you our appreciation for your 
leadership in moving forward with H.R. 1985. As you are aware our Board 
of Directors recently took a support position for H.R. 1985 and we look 
forward to working with you and your staff as the bill moves through 
the legislative process.
    The District is the stream management and wholesale water agency 
serving Santa Clara County, including the high-tech area known as 
``Silicon Valley.'' The District provides the water supply that 
supports more than 1.7 million residents and more than 6,000 high-tech 
businesses.
    In an average year, more than half of the water supply in Santa 
Clara County is imported from three sources: the federal Central Valley 
Project (CVP), the State Water Project, and the Hetch Hetchy system 
owned and operated by the City and County of San Francisco. Of the 
three imported sources, our federal Central Valley Project water is the 
largest source of imported water. In drier years like the drought from 
1987 to 1992, the county's dependence on imported water increases to as 
much as 90 percent of the total supply. You can immediately see why the 
reliability of our imported supplies from the Sacramento-San Joaquin 
Delta is of such paramount importance to us.
    The residents and businesses of Silicon Valley also demand a high 
quality water supply. Unfortunately, the quality of our Delta sources 
ranks in the bottom 10th percentile nationwide and poses constant 
challenges to urban water agencies that need to treat this water to 
meet increasingly stringent standards for drinking water. The high-tech 
and pharmaceutical industries in Silicon Valley also need a reliable 
and consistently high quality supply to remain competitive worldwide.
    Mr. Chairman, in your letter of invitation, you asked me to provide 
testimony to the Subcommittee that focuses on three questions.
    Question 1: What factors have led to the challenges that California 
is facing today in regards to water supply, quality and reliability?
    The fundamental challenge that faces our district is this: How do 
we provide a reliable, high quality water supply to our customers in a 
practical, cost-effective and environmentally sensitive manner? You 
will find that other urban water agencies around the Bay Area share 
similar challenges, although some of us are more dependent on the 
Delta, while others may have a more secure source of water.
    Our task is made more difficult by regulatory changes that have 
occurred over the past decade. Implementation of fishery protection 
measures under the Central Valley Project Improvement Act and 
Endangered Species Act has resulted in a less secure, lower quality 
water supply for our region. One example of this is the so-called ``low 
point'' problem at San Luis Reservoir, which has become a chronic worry 
for the District.
    In four of the last five years, operations forecasts during the 
spring months have projected that San Luis Reservoir storage levels 
would drop during the late summer months to a level that would cause 
serious water quality problems, and potentially an interruption in 
federal water service. So far, each time this threat has occurred we 
have been saved by a combination of extraordinary federal and state 
actions, and cool weather that minimized demand. However, this year, we 
once again find ourselves facing a low point problem, this time without 
the benefit of above normal rainfall.
    This is the first dry year after a string of wet years, and we see 
that the federal and state water systems already are being stretched to 
the limit. The CVP delivery to South-of-Delta agricultural contractors 
is at 45 percent and the State Water Project is only able to deliver 35 
percent of our entitlements. What this demonstrates is the degree to 
which the system has been over extended to meet competing needs in the 
Delta, and the extent our deliveries have suffered as a consequence.
    This year, and probably for the next few years, we'll see our water 
supply challenges compounded by the power crisis in the Western states. 
The plumbing systems, ranging from individual wells to the gigantic 
federal system, are dependent on a reliable and reasonably priced power 
supply to move the water from its source to its final place of use. We 
have been threatened with additional ``emergency'' water shortages 
because of power blackouts.
    Another dimension of the additional challenge imposed by the power 
crisis is the need for water for power generation. Many of the new 
power generation plants require water for cooling, which could lead to 
additional demand on an already limited resource. Furthermore, we fear 
that existing reservoirs could be operated differently to serve power 
generation needs and compete with water supply and delivery needs.
    As the water management agency for a large metropolitan area, the 
District has always been responsible for meeting the long-range water 
needs of its constituents. Silicon Valley is still a dynamic economic 
engine for the whole nation. The District will continue to be 
challenged to come up with the best and most comprehensive way to meet 
existing and future water supply and water quality needs while 
protecting the environment and enhancing the quality of life for its 
constituents.
    Question 2: What actions and measures have you taken to improve on 
the supply, quality and reliability of your water?
    The District adopted an Integrated Water Resource Plan in 1996 and 
has been implementing that preferred strategy. The strategy includes a 
combination of increased conservation, recycling, banking and 
transfers. We have been building up reserves in our local groundwater 
basins, as well as our banking program. Our advance planning has 
allowed us to cope with the 35 percent State Water Project delivery 
this year.
    The District has developed a comprehensive water conservation 
program, which includes implementation of all of the Best Management 
Practices for urban water conservation. Examples include incentives for 
the installation of ultra low-flow toilets and other water saving 
appliances and programs to increase landscape irrigation efficiency.
    The District is also a partner in the South Bay Water Recycling 
Project, which serves the cities of Santa Clara, San Jose and Milpitas, 
and the South County Regional Wastewater Authority, which serves the 
City of Gilroy. The District Board has set a policy goal that by the 
year 2020, recycled water will account for 10 percent of the total 
water supply in Santa Clara County. Presently, the District is 
negotiating with the South Bay Water Recycling Project to own and 
operate the southern portion of the recycled water system as part of 
the new power plant being built by Calpine-Bechtel.
    The highlight of the District's Integrated Water Resource Plan is 
its emphasis on flexibility to react to future changes. We are updating 
our plan to reflect the changes that have occurred since 1996 and to 
adjust for new challenges in the future.
    The District is also participating with other Bay Area water 
agencies to explore opportunities to improve water quality and water-
supply reliability at the regional level. We are finishing Phase 1 of a 
CalFed-funded study that identified the needs in the Bay Area. We are 
looking forward to Phase 2 of the study to more fully explore some of 
the opportunities that have been identified.
    Earlier in my testimony, I mentioned that the power crisis has 
compounded our water-supply challenges. The District is meeting that 
challenge head-on by instituting a ``Water for Summer'' campaign and 
program. We started to implement an extensive outreach program to 
educate our constituents about the linkage between power and water use, 
and that power conservation and water conservation go hand in hand. 
Internally, the District has invested in backup power supplies and has 
been working with our retail agencies to cope with what could be a 
long, hot summer.
    Question 3: What additional measures may be needed in the short-, 
mid- and long-term future to improve your water security?
    Four additional measures are needed to meet our region's immediate 
and long-term needs for a secure water supply. Those measures are:
     Adequate federal funding for the CalFed Bay-Delta 
Program, including the complementary actions.
     Clear, consistent and coordinated implementation of 
administrative policies, regulatory decisions, and project operations.
     An effective, stakeholder-based governance structure for 
the CalFed program.
     A strong commitment by CalFed and the CalFed agencies to 
invest in measures to improve Delta drinking-water quality from source 
to tap.
    I will address each of these measures individually.
    CalFed has made great progress toward restoring the health of the 
Bay-Delta ecosystem under the combined efforts of the state and federal 
governments and a broad group of stakeholders. During CalFed's planning 
stage, nearly $675 million in federal, state and local funding was 
spent or committed to 266 approved ecosystem restoration projects. As a 
result, salmon populations have rebounded in the Sacramento River and 
its tributaries and in other key watersheds.
    The CalFed Record of Decision calls for similar investments in the 
areas of a reliable water supply, water quality and a stable levee 
system. The state's voters approved funding for these investments with 
the passage of Proposition 13, a $1.97 billion state bond issue. Local 
interests are also investing billions of dollars in new management 
techniques to address these issues. Now, it is time for the federal 
government to fund its share of the CalFed Program. The first step in 
this process is the passage of legislation that authorizes federal 
funding for the entire CalFed program, including complementary actions 
such as the San Luis Bypass Project and Bay-Area Blending and Exchange 
Program.
    A second immediate need concerns the coordination and 
implementation of administrative policies, regulatory conditions, and 
state and federal project operations. As you are no doubt aware, the 
federal agencies with regulatory authority over the Bay-Delta have 
competing and sometimes conflicting missions and mandates. CalFed was 
established, in part, to address this issue. And, while the CalFed 
agencies have worked toward better coordination of their policies and 
regulatory conditions, the results have been imperfect. To avoid 
conflicts between competing priorities for resource management, the 
CalFed reauthorization legislation should encourage the clear, 
consistent and coordinated implementation of policies, regulatory 
decisions and project operations. For example, to ensure that water-
delivery goals for Central Valley Project agricultural contractors do 
not result in adverse impacts, the legislation should clarify water 
delivery goals for municipal and industrial customers consistent with 
the Bureau of Reclamation's Municipal and Industrial Interim 
Reliability Policy.
    We believe that many of these conflicts can be addressed through 
the establishment of a strong, stakeholder-based governance structure 
for the CalFed program. We are pleased to see that H.R. 1985 envisions 
such a structure, and would require the new governance board to 
coordinate implementation of all relevant programs, including the 
Central Valley Project Improvement Act. The bill would also require the 
board to coordinate and integrate goal setting and funding to ensure 
the most cost-effective and biologically effective investment of 
federal funds. We would add to that list of responsibilities that 
important task of ensuring balanced and timely implementation of the 
projects and programs in the CalFed Record of Decision.
    Finally, we are looking for a strong commitment from the CalFed 
agencies to invest in those improvements needed to achieve the targets 
for drinking-water quality identified in the Record of Decision. As an 
urban agency dependent on the Delta for its drinking water supplies, we 
are concerned about the quality of that water and the cost of treating 
water to meet increasingly stringent standards for drinking water. The 
CalFed reauthorization legislation should make water quality a priority 
on a par with water supply and ecosystem improvements.
    Mr. Chairman and members of the Subcommittee, thank you again for 
holding this hearing and providing me the opportunity to discuss the 
Silicon Valley region's water-security concerns. On behalf of the Santa 
Clara Valley Water District's Board of Directors, I want to thank you 
for the leadership you have shown on what may be the most important 
resource issue facing this state--how to reconcile the needs of urban 
and agricultural economies and the ecosystem for high-quality, reliable 
water supplies. For our part, we pledge to work closely with both you 
and Senator Feinstein as both bills move through the legislative 
process.
                                 ______
                                 
    Mr. Calvert. Thank you. Thank you for your testimony.
    As many of you know, I've been traveling around the state 
and have met most of you individually or with groups or other 
testimony over the last number of months. I took on this 
responsibility understanding the fact that water in California 
is probably the most controversial subject, or one of the most 
controversial subjects that we deal with but something that we 
must deal with.
    With the CALFED authorization expiring, we need to move 
forward with that legislation. Those here most understand what 
we attempted to do in H.R. 1985 which one is obviously 
reauthorized CALFED. Also to move toward what is determined 
within that agreement, that additional storage, as Ms. McPeak 
very ably pointed out, and both Senator Feinstein and I do that 
on her legislation and mine..
    And then added to that and I call it CALFED Plus, what Mr. 
Estremera also pointed out, was that we have water shortages 
beyond what is involved in CALFED; to allow local communities 
to develop water resources-reclamation.
    I don't know very many people that are opposed to 
reclamation and reutilizing our water supply. Conjunctive use, 
groundwater storage, other ways of developing water resources 
throughout the State of California and, quite frankly, put the 
Federal resources there to help instigate those type of 
projects, $4 billion in authorization for leverages both state 
and local money to build those projects that are absolutely 
necessary.
    As Mr. Cunneen pointed out, we are going to be limited to 
the Colorado River to our proper allocation, as the upper basin 
states would say, to 4.4 million acre-feet. We are drafting 
about 5.6 million acre-feet presently.
    Court orders, and probably properly so, have restricted the 
city of Los Angeles to Owens Valley to Mona Lake and right here 
in the northern part of the state the Trinity River decision 
which loses an additional 300,000 acre-feet of water.
    What does that say? We have a diminishing supply and 
increasing demand so we are attempting in a responsible way to 
address that in H.R. 1985. I appreciate your testimony.
    One question from a business perspective. I heard from Mr. 
Cunneen, Ms. Davis, Ms. McPeak about long-term business 
decisions. I used to be in the business community and I 
understand when you are making decisions to expand a plant or 
to build a new plant facility that you have to look at the 
local economy.
    You have to look at if you're going to have enough 
electricity, if you're going to have enough water, what is the 
cost of those basic commodities and how that is going to effect 
your manufacturing process in your competitiveness in the world 
market place.
    So what about that? How is industry today looking at 
California and, obviously, specifically water? I mean, 
obviously we have an electricity problem in this state that we 
are trying to address but how is that playing with water right 
now? Maybe we can start with Mr. Cunneen and any other person 
who might want to make a point. We're rationing microphones, 
too.
    Mr. Cunneen. Well, I think that the direct answer is that 
we may be losing some short-term decisions, tactical decisions 
that companies make as to where to expand some operations. I do 
believe that is short-term. I believe the industries here are 
committed for the long-term still to Silicon Valley and to 
California.
    What they really desperately want is a feeling that there 
is a plan out there whether it's in the case of electric 
utility reorganizations or if it's in the case of water. They 
want to make sure that we are all on the same page, going in 
the same direction, and that there's an honest plan.
    I remember on the floor of the Assembly in the State 
Legislature when we were debating the electric deregulation 
issue the issue of supply came up. The answer was very clear. 
Don't worry. The flow of power from out of state will continue 
unimpeded to California while we require utilities to divest 
from their own power generating ability.
    Now, that sounds almost silly now looking back at it. It's 
easy to see that would not occur. That would not be the case. 
From the business community's perspective we are asking you, 
Chairman Calvert, and Congresswoman Lofgren, and Senator 
Feinstein, please don't let it get to an absolute crisis like 
this because it will be more severe in the case of water. It 
will be lasting damage.
    We'll ride out some of these rolling blackouts but in the 
case of water, it is crucial to the manufacturing process. It's 
crucial that we have storage conveyance and strong 
environmental protections. Don't let it get to a crisis. Act 
now in this session of Congress.
    Ms. Davis. Thank you, Chairman Calvert. Santa Clara is 
Intel's corporate headquarters and it's our home and it will 
always be our home. Having said that, to put it in perspective, 
what we do in Santa Clara is we build the mask which is the 
mold for the microprocessor. Then that product is then shipped 
to other facilities in which they make the actual product.
    It is a critical component of the whole process. You can't 
build it without the mask obviously. We do look at resource as 
a major impact to our manufacturing process. My thought on the 
question that you asked is that on the heels of the energy 
issue it is definitely something that not just Intel but every 
corporation looks at and has to consider.We appreciate all the 
work that you've done with regards to the water issue, and 
Congresswoman Lofgren as well.
    But, do answer your question, Santa Clara is our corporate 
headquarters and our home and we want it to remain that way and 
do plan that it stays that way. Anything that you can do in 
your committee and Congresswoman Lofgren to ensure that 
California remain a solid economy, a solid place to do business 
is greatly, greatly appreciated.
    Ms. McPeak. We do hear that water, water supply and water 
quality, are issues that are taken into account in making 
decisions for expansion and location. I have not heard in the 
last, say, 3 years a company who says, ``I'm moving because we 
don't have an adequate water supply,'' but they will say they 
are taking it into account for their future plans.
    That really does speak to quality as well as quantity, 
particularly in the high-tech manufacturing sector.
    But I do want to underscore something I've had personal 
experience with out of state, out of state campaigns or other 
regions trying to recruit businesses and, of course, they site 
among the reasons why somebody should leave California or the 
Bay Area water, now power.
    Zoe will remember an effort where we had the national wind 
tunnel complex that we were very much in competition pursuing 
with NASA Ames and it took a ton of effort to be able to 
demonstrate to the aerospace industry that there could be 
available water through reclamation, i.e., recycling, that 
actually would satisfy their needs, and (b) that we were 
addressing the problem through CALFED.
    We do not want to take a big step backwards by not now 
going forward to implement as you have well outlined. Yes, it's 
a real issue that is taken into account.
    Mr. Calvert. Thank you.
    Ms. McPeak. May I also add what we consider business and 
employment in California and in the Bay Area as well, 
agriculture is part of the business community so I didn't want 
to overlook what Mr. Wenger had said. You heard firsthand the 
perspective that the agricultural community now has in 
California which is greater uncertainty and we do not want to 
lose that segment of our industry in either the region or the 
state.
    Mr. Calvert. In spite of the success of the high-tech 
industry and the entertainment industry here in California, 
certainly aerospace industry in California, we should not 
forget that the largest industry in the State of California is 
still agriculture.
     They have done a great job not only for this region but 
for our state and for our country. It's one of our bright spots 
on the balance sheet on our trade program throughout the world 
so we certainly appreciate that industry and hope it can 
survive a very difficult year. I know many farmers are having a 
very difficult time.
    Ms. Lofgren.
    Ms. Lofgren. It's fun to see you, Sunne, and I think we 
first met each other when I was on the board of supervisors of 
this county and you were on the board of supervisors in Contra 
Costa. I was thinking back to the water wars of that time.
    I remember growing up in this valley. We felt that we were 
northern Californians and they were taking our water. It really 
wasn't until much later that I realized that Santa Clara County 
is really in exactly the same spot in terms of water 
importation as Los Angeles or Southern California. We are 
dependent on the water of others as much as our neighbors to 
the south.
    Having said that, however, we are also quite fond of our 
Bay and we want to make sure that whatever we do does not 
adversely impact our environment. As you and I both know, that 
is an intense priority for the people of the Bay Area including 
Santa Clara County.
    In a way I'm almost afraid to ask this question but I think 
it is important that we face up to the challenges that are 
heading for us and come up with the plan that is reasonably 
designed to meet those challenges. I think reasonable people 
can differ on the details but all of us should agree that is 
something we need to do.
    As you know, Senator Feinstein has a bill that is not 
exactly the same but quite similar to Mr. Calvert's bill. Mr. 
Miller has a bill that has different elements. I'm wondering if 
any of the members have had a chance to analyze the differences 
between the Miller approach, the Calvert approach, the 
Feinstein approach and are there elements that ought to be 
brought to--
    Mr. Calvert. Mine's better.
    Ms. Lofgren. I know that you believe that--that are missing 
in each. Are there conglomerations that should occur or 
criticisms that you can offer on shortfallings so that we can 
come up with the best solution for our state?
    Ms. McPeak. Let me try to address it. I will tell you that 
I could not do a line-by-line comparison, although I have--
    Ms. Lofgren. I wouldn't ask you to do that.
    Ms. McPeak. --read the legislation. There is a difference, 
a fundamental difference and approach that also reflects what 
had been sort of one of the divisions within the CALFED process 
at BDAC and within the state that goes to the fact that people 
of good will can have sincere differences and almost two 
different world views.
    That was all I could do to explain it when Secretary 
Babbitt asked me why is there such a divide between a lot of us 
who are supporting a package that had a presumption that we 
were going to need facilities and others with whom I had stood 
in the past who presumed that it could be done without 
facilities and also wanted to delay taking the steps toward 
those facilities. It comes down to that fundamentally different 
world view.
    I think it bears a little bit of elaboration so I'm going 
to do so. The advocates who have suggested Federal legislation 
that still doesn't streamline getting to a decision on 
facilities is sort of one camp.
    I view what Chairman Calvert and Senator Feinstein are 
doing, although there are differences within their legislation, 
as taking all of the CALFED Record of Decision as a package. 
That's why I tried to emphasize that there is an integrated 
solution as the Bay Area Council views this, and I think the 
business community largely within the Bay Area.
    There are times when we have no rain fall, sometimes we 
have a lot of rainfall. We look at the fact that we need more 
water for the environment and we need water of sufficient 
temperature at the right time in the estuary. But if that is 
going to happen and still sustain the economy and deliver water 
in other regions of the state, we've got to be able to capture 
that water when it comes down in bucketsful, either 
precipitation or snowmelt.
    That is why we have gone forward saying we respectfully 
disagreement with those who say you can do it only with 
conservation or reclamation because, yes, we can get a whole 
lot of water efficiency and stretch the average supply in that 
method and we add to that water marketing.
    We want to introduce price signals into the management of 
water. We need to be aware of what kind of dislocation that 
has, third-party impacts, and I could elaborate on that as 
well.
    However, having said that, we also think in order to have 
enough water for the environment in times of low rainfall, 
particularly that third, fourth, fifth year of, say, a drought 
and water on an ongoing basis for the economy that we've got to 
have off-stream storage and we have to improve some of the on-
stream storage capturing capability.
    That's how I actually explain what we've got to divide 
again in Congress, we've got to divide in camps in California. 
It's different world views who will say no more facilities 
because anymore water you take out of the environment is an 
injury to the environment.
    I will sit here and tell you I've got at least enough 
battle scars presumably to have the credentials in fighting for 
the environment that says I will make that trade to have more 
water in periods of low rainfall of the right temperature to 
release into the estuary and that requires storage.
    Mr. Cunneen. I just want to make sure the most important 
point of that isn't lost, which is that Congressman Calvert's 
approach and Senator's Feinstein's approach we believe 
incorporate that integrated view that Sunne is talking about.
    The Phase II Record of Decision was a careful balance but 
it included storage and conveyance off- stream/on-stream has to 
be included in a final package with Federal leadership. I think 
that is the biggest divide between those two approaches and 
Congressman Miller's approach and why we prefer Chairman 
Calvert's approach.
    Mr. Wenger. From our perspective with the Congressman's 
bill we feel there is the timeliness involved. We've heard a 
lot of lip service over the years of we'll study storage, we'll 
study storage, we'll study storage. Certainly in the 
Congressman's bill there are timeliness. If we are going to do 
them, let's do it by a certain timeline and take a look.
    That's not going to say what facility is going to be built 
or where but if we say we're going to do it, then let's do it. 
Let's have some time frames so we can get on with at least 
getting these studies done and know what the results of those 
studies are going to be.
    Ms. Lofgren. Thank you.
    Mr. Calvert. And I appreciate that. I wanted to point out 
and ask a couple of other questions. This legislation attempts 
to be a little proactive and try to get ahead of the problem in 
attempting to hopefully not have a problem--as big a problem as 
we may have in California and to prevent making bad choices.
    I would say as we had a witness from Ducks Unlimited up in 
Modesto who made a point that we don't want bad choices being 
made. What that witness meant by that was if, in fact, there is 
a crisis in California in the future where we start making 
choices for farming or water for the environment or water for 
urban users or industrial users, there's no happy solution.
    If from a political perspective he indicated probably the 
environment would lose the most if we had to make those kinds 
of decisions because of the reality of politics today in trying 
to satisfy the most number of people with a limited amount of 
supply. We don't want to get to that and that is what we're 
trying to do.
    Mr. Estremera, I wanted to ask a question of you. Even if 
we move forward with the Record of Decision including the part 
that would augment storage in California based upon the fact 
that, as I mentioned earlier, diminishing supply not including 
what we would get through the Record of Decision.
    These reclamation projects that I hear about from every 
water district in the state and conjunctive use and all these 
other things we went through, the section that we put in the 
bill that induces, you know, gives a lot of encouragement to 
these agencies to move forward because we put money there, do 
you think--what do you think would happen if those types of 
projects aren't built in the state of California?
    Mr. Estremera. Mr. Chairman, I can certainly respond with 
respect to our own county. As you know, we have our own long-
term resources plan and we have tried to be prudent as most of 
our business community has said. We try to plan as best as we 
can.
    As you know, our approach here as a water district has been 
that our role is not to determine how fast we grow, whether we 
grow or not. Our role is to provide the water that people need 
in the county. The decisions are made by other municipalities 
so we try our best to have the resources planned.
    In our resources plan we have about a 20 percent plan of 
recycled water being a real necessary portion of our water 
supply in the future so if we didn't have that capability, if 
we didn't build that capability, we would be, I think, in 
serious trouble.
    This is one reason why we have adamantly tried to 
participate in recycling over the years. This is why we are, in 
fact, right now in negotiations with respect to extension of 
the present pipeline of recycled water down into the Coyote 
Valley because we want to make sure that recycling is an 
effective portion of our supply.
    If we don't have the support either nationally or statewide 
and, of course, in our case where we match money all the time, 
we're not going to be an effective provider of water. There is 
no question that our economy is going to seriously suffer from 
it so these projects and this support is really important. In 
fact, as I say, it is ultimately important for our provision of 
supply locally.
    We try and plan as best as we can but we also have to 
provide and we have to provide consistent with that plan and 
consistent with the needs of the economy. We can't do without 
that help so we really appreciate that provision. Thank you.
    Mr. Calvert. Any other comments on this?
    Ms. McPeak. Just to quickly add to what Tony said. The 
reclamation is essential not only for the mix; that is, to have 
that additional supply. It is also for timing because it's not 
likely that we are going to be able to bring on line the amount 
of supply that is going to be contributed by new storage before 
we can do the reclamation. We need to do that first and 
optimize it.
    It also allows us to minimize the amount of surface 
storage. That is the other role so it is a blend of our supply 
sources and, therefore, greater flexibility. It is a timing 
issue. We need to do it as soon as possible. We also are able 
to minimize the amount of surface storage and conjective use 
because of reclamation.
    Mr. Calvert. Thank you.
    Mr. Gaines. Mr. Chairman, one last comment if I could. Our 
association does support increased storage. The devil is in the 
details, of course. Where that storage is, how it's built, how 
the water is delivered, and so forth, is something we would 
take a very, very close look at.
    Clearly if they are going to put an additional storage, 
though, the loss of habitat, the possible loss of the 
environment by putting that storage in place is something that 
would be of great concern to us.
    Our waterfowl, of course, would benefit from increased 
storage as well. You talked about choices, though, and it's not 
always simply a choice between the environment or a choice 
between urban users or farming users. I would like to point to 
the Klamath Basin and what is going on right now as a sample of 
that.
    As you probably know, there's three listed species of fish 
up there that are holding not only the local agricultural 
community, the local community as a whole, but also one of the 
most important refuges in the entire National Wildlife Refuge 
System hostage right now.
    We have a documented 430 wildlife species that depend upon 
the Klamath Refuge Complex. Those 430 species are being held 
hostage by simply three species so it's a case where there's 
decisions within the environment as well.
    If they had additional storage up there right now, we 
wouldn't be looking at zero water to the agricultural community 
and zero water to the refuges. That is an example of where it 
can get much, much worse than it is in the Central Valley right 
now. I think we need to look outside our Central Valley borders 
and see what is happening elsewhere, most notably in the 
Klamath Basin. If we don't act now, we simply may not have time 
to act in the future. Thank you.
    Mr. Calvert. Unfortunately I wasn't able to chair that 
hearing. It was the largest Congressional hearing in the 
history of the United States, as I understand it, in a small 
town. A lot of tragedy going on. I heard many people are losing 
everything that they own and it cries for--those types of 
problems none of us in elected office like to come up with or 
deal with. We would rather try to stop that before it gets that 
bad.
    Any comments?
    Mr. Gaines. We view that as the canary in the mine shaft. 
We really do. It will happen down here sometime in the future 
if we don't deal with these issues now.
    Ms. Lofgren. Just one quick follow-up question on the 
supply. Sunne, what do you anticipate in terms of volume that 
will come from the new storage capacities? Is there an amount 
that has been identified?
    Ms. McPeak. If you're talking about yield versus capacity, 
a lot of that is still going to go through further study and 
analysis and it's surface and groundwater for conjunctive use 
that would make a difference.
    But I can assure you that actually when we do the math and 
look at the water that can be generated from efficiencies, 
conservation, reclamation, conservation urban, ag reclamation, 
watershed management, water marketing, which we can probably 
get to, I don't know, maybe 2 or 2.5 million acre-feet or 
perhaps more, and look at the growing demands and the reduction 
such as the Colorado River or the Trinity groundwater pumping 
overdraft, there's a gap that is anywhere from depending on the 
year half a million to maybe 1.5 million acre-feet in the next 
20 years.
    We think storage needs to contribute about, at least what 
we're trying to plan, hopefully anywhere from 250,000 to 
500,000 acre-feet in yield. That is possibly what you can get 
from looking at a large Shasta, doing maybe a new reservoir 
conjunctive use, and perhaps Eel River has been identified as a 
in-Delta facility.
    There are others who can give you more detail but that is 
the order of magnitude.
    If, for example, you'll hear maybe testimony about climate 
changes will reduce snowpack making more precipitation. The 
implications there are that we need to have the off-stream 
storage to actually capture the precipitation which comes down 
faster than snowmelt as an example. You've got to have the 
ability to suck up the water fast and put it into storage, off-
stream storage, so you are not impairing in-stream flows.
    Mr. Calvert. Yes, Mr. Wenger.
    Mr. Wenger. Just to make a comment. When you talk about 
storage, we're living off the storage that our forefathers did 
70 or 80 years ago to put people to work. They always talk 
about the big dam. As we heard here earlier, the loss of 
habitat for reservoirs. I would just like to make a comment.
    I grew up on the Stanislaus River and I can remember back 
in '76 when people were chaining themselves to rocks because 
they didn't want to see the New Melones raise because the water 
was going to inundate some areas. If you look at the salmon 
fishery in the Stanislaus River today, it is better than it has 
ever been in my lifetime and it is in no small part because of 
New Melones having the water that can release at times it needs 
to release it.
    Certainly there's some gravel beds that may weaken 
reconstitute gravel beds and do things like that. When you 
start talking about multiple uses, you just think about this 
weekend where everybody is going to be. They are going to be at 
Don Pedro. They are going to be at Shasta. They are going to be 
at all those places recreating. You think about all the habitat 
that is created.
    Between here as I drove here, there's a lot of dry hills 
and I've got some friends that are cattle ranchers up there. 
They put in a one-acre little pond. You wouldn't believe the 
wildlife that comes because of water. We've got to have the 
water. We've got to have the storage. I don't think we can just 
focus on what are we going to need in 20 years. We had better 
be focusing on what we are going to need in 50, 75, and 100 
years.
    Mr. Calvert. Thank you. I want to thank this panel for your 
testimony and answering our questions. We certain appreciate 
your coming out on this July 4th week. Thank you very much.
    We will now call our second panel.
    We want to thank all of you for coming out today. You 
probably heard my prior announcement about the five- minutes 
and all the little lights here. We appreciate that you keep the 
testimony within 5 minutes were we have time for Q&A.
    With that, Mr. Guardino, you may begin.

 STATEMENT OF CARL GUARDINO, PRESIDENT AND CEO OF THE SILICON 
                   VALLEY MANUFACTURING GROUP

    Mr. Guardino. Good morning, Chairman Calvert and 
Congressmember Lofgren. Thank you so much for holding this 
important hearing in Silicon Valley.
    As you may know, the Silicon Valley Manufacturing Group was 
founded in 1977 by David Packard, co-founder of Hewlett Packard 
Company. Today it represents 190 of the largest private sector 
employers in all of Silicon Valley who collectively provide 
275,000 jobs just in this valley alone, or one of every four 
private sector workers.
    Quick overview of Silicon Valley. Where we are this morning 
the population of the valley, which is Alameda, San Mateo, and 
Santa Clara Counties, is only 11 percent of our state's 
population but produces more than 20 percent of the personal 
income taxes for 1999 and 2000 for the State of California.
    Mr. Calvert. Thank you.
    Mr. Guardino. Our pleasure. Silicon Valley is responsible 
for 16 percent of the state's revenues from taxable sales in 
1999. And relative to exports, just two-thirds of Silicon 
Valley, Santa Clara and Alameda Counties alone, which are only 
8 percent of the state's population, account for 33 percent of 
the state's export sales in 1999.
    Truly Silicon Valley's current and future success is 
coughing up a substantial amount of revenue for state and 
Federal coffers. We want to continue to prosper so that we can 
do our share to protect this great state and nation's economy 
and quality of life.
    Relative to water, after energy, we see water as 
potentially the next big crisis facing our state and nation. 
Yet, this time, unlike the energy crisis that we are currently 
in, we have a chance to divert a crisis rather than dig out 
from it so we really commend you, Chairman Calvert, 
Congressmember Lofgren, for having the foresight to move 
forward now as expeditiously and thoughtfully as possible 
rather than to react to the crisis that is coming.
    The Manufacturing Group sees four key points critical to 
any legislation that moves forward and these are actually in 
order.
    First, an effective stakeholder-based governance structure 
for the CALFED Program. Second, an adequate Federal funding for 
the CALFED Bay-Delta Program. Third, a strong commitment by 
CALFED and the CALFED agencies to invest in measures to improve 
Delta drinking water quality from stream to spigot. Fourth, a 
clear, consistent, and coordinated implementation of 
administrative policies, regulatory decisions, and project 
operations.
    Chairman Calvert, we commend you and Senator Feinstein for 
continuing to try to work together to harmonize your bills in a 
bipartisan/bicameral fashion and strike a balance that protects 
our environment, enhances our quality of life, and strengthens 
our economy for every employer and working family in 
California.
    In a past life I was Chief Assistant to a state legislature 
who was a dairy farmer. On issues regarding water we viewed 
these as so critical that we always saw the link as you 
referred to earlier between the importance of major industries 
in California from agriculture to high-tech or, as we lovingly 
refer to, from cow chips to computer chips. Because we see the 
link, we want to work with you for the good of all Californians 
in the prosperity of California's economy. Thank you for your 
time.
    [The prepared statement of Mr. Guardino follows:]

     Statement of Carl Guardino, President and CEO, Silicon Valley 
                          Manufacturing Group

    Mr. Chairman and members of the Subcommittee, as President and CEO 
of the Silicon Valley Manufacturing Group, I am speaking for the 
interests of a diverse range of member companies from the Silicon 
Valley area. The Silicon Valley Manufacturing Group was founded in 1977 
by David Packard, and today represents 190 companies employing one 
quarter of the Silicon Valley workforce. The Manufacturing Group 
focuses their efforts on public policy issues regarding business 
competitiveness and quality of life in the region.
    The significance of a reliable and clean supply of water to the 
region cannot be overstated. Constraints on water supply are increasing 
on all sides. Some constraints are the result of our growing awareness 
and consideration of environmental and habitat values and the economic 
and quality of life contributions they make to the region. Other 
constraints are the price we pay for our success. With an increase in 
employment of approximately 25% over the last 5 years, there are more 
people, more businesses, and a greater overall demand for quality water 
supplies. An infrastructure that reliably provides high quality water 
is a foundation of both economic prosperity and community quality of 
life. Wise and efficient management of water that ensures a balance of 
all water needs: agricultural, urban, environmental, and commercial/
industrial should not be impeded by an inadequate infrastructure. An 
infrastructure that permits water transfers, recycled water 
distribution, and efficient water use will become increasingly 
important as constraints upon water supply and quality increase as the 
region continues to grow.
    The Valley's high-tech and pharmaceutical/biotech industries demand 
a consistent, high-quality supply to support their manufacturing, 
research and development needs. Companies such as Intel and LSI Logic 
invest in additional treatment processes to remove any traces of 
metals, organics, and salts. Variability in quality can cause plant 
shut downs for recalibration. If local water suppliers experience 
variations in the quality of water supplies from state or federal 
project sources, or must switch sources of supply due to interruptions 
in service, this can have significant adverse economic impacts for 
companies that are vulnerable to these changes.
    Similarly, our region's research institutions, the R&D portions of 
our pharmaceutical/biotech companies and industries with water-
dependent processes would be devastated by interruptions in supply.
    Recently, the Bay Area Water Users Association publicized a San 
Francisco PUC finding that a significant seismic event could leave the 
region's residents supplied by the Hetch-Hetchy system without water 
for 20 to 60 days. So many critical systems rely upon water: cooling 
and heating our buildings, providing sanitation, irrigation, fire 
suppression, critical cleaning and manufacturing processes in industry. 
The need for water permeates all facets of our modern life. The cost of 
a rolling blackout can be fairly well accounted for. But, the cost of 
lost research, lost product, lost business and the social costs of this 
kind of infrastructure failure are simply incalculable.
    The Manufacturing Group has participated in water quality and 
supply planning with regional partners, including the Santa Clara 
Valley Water District and the Bay Area Water Users Association. Locally 
these efforts have included plans for increasing conservation, 
recycling and recycled water distribution, water transfers and 
groundwater banking. Because the integrity of water supply 
infrastructures is essential, we are encouraging the San Francisco PUC 
to hasten their progress on their Capital Improvement Plan to upgrade 
the aging and seismically vulnerable Hetch-Hetchy system that 2.4 
million residents of the Bay Area rely upon.
    The continued growth of industry in the Silicon Valley region 
depends as much on maintaining the region's quality of life as it does 
on maintaining business-related infrastructure. The need for clean, 
quality, reliable water for drinking, recreation and habitat 
maintenance is just as important. Business leaders understand that 
water supply and water quality are fundamental indicators of the 
quality of life. Based on my personal knowledge of business leader's 
concerns, I can state that if we don't have the best air, water and 
land, we're not going to have the best people.
    Meeting the region's and the state's diverse water needs in the 
future will require the most creative, coordinated and thoughtful 
efforts of community, government and business acting in partnership. We 
support the efforts of the State and federal agencies to find a 
solution to improve water supply, water quality and environmental 
resources through the CALFED process.
    We thank you for the concern and leadership you have shown on this 
issue. We look forward to working with you and your staff in the 
future. On behalf of the Silicon Valley Manufacturing Group, thank you 
for giving me this opportunity to provide these comments.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Ms. Wells.

STATEMENT OF MARY WELLS, CHAIRWOMAN, NORTHERN CALIFORNIA WATER 
                          ASSOCIATION

    Ms. Wells. Mr. Chairman and members of the Subcommittee. My 
name is Mary Wells. I'm a landowner on the west side of the 
Sacramento Valley where my husband, Charles, and I own row crop 
ground and farm rice in three irrigation districts all 
delivered from and dependent upon the great Sacramento river.
    In addition, we own rangeland where we live and our family 
cattle operation continues in the small foothill community 
known as Sites.
    I appreciate the opportunity to testify before you today 
and provide a farming landowner's perspective on the water 
supply challenges that have spawned years of effort and action.
    Today, however, I applaud the tremendous opportunity in my 
part of the state not only to provide water efficiency and 
security in my region, but also to effectively assist in the 
resolution of water issues in the San Francisco Bay-Delta and 
far beyond.
    A reliable and affordable water supply is vital to my 
family's farming operation. Because of this, I serve as a 
Director on the boards of Tehama Colusa Canal Authority, known 
as the T-C, and two irrigation districts. Because water issues 
transcend local impacts, I became a founding Director of the 
Northern California Water Association in 1992 where today I 
serve as Chairman.
    For years Sacramento Valley residents have experienced a 
continuing increase in environmental and other regulatory 
demands. For 25 years landowners in my area have been involved 
in aggressive conservation and restoration efforts to meet 
these needs, but our struggle to meet these demands grows more 
and more difficult.
    For example, I have personally experienced water shortages 
as low as 25 percent allocation during seven out of the last 20 
years. I have spoken for many years about our despair but today 
I am here to speak of opportunity as offered in H.R. 1985.
    In integrated water management program for the Sacramento 
Valley will improve water supply, quality, and reliability. 
This plan is reflected in the development of the Sacramento 
Valley Water Management Agreement which was finalized when the 
State Water Resources Control Board postponed Phase 8 of the 
Bay- Delta Water Rights Proceedings. This agreement is now the 
template for our regional strategy in the Sacramento Valley.
    The Sacramento Valley water management agreement will 
concentrate efforts most notably through groundwater management 
activities, evaluation of the sites, off-stream reservoir, 
flood protection, water transfers and exchanges, watershed 
management, fish passage, and other environmental improvements.
    The resulting regional commitments is focused on meeting 
all of the water supply needs within the Sacramento Valley 
first every year while helping to provide for Bay-Delta water 
quality standards, export supplies, and even the environmental 
water account.
    The following actions as part of the regional integrated 
management plan will begin to achieve the commitment to 
landowners like me within the basin who face increased water 
shortages.
    The first item would be the intra-regional water transfers. 
The Central Valley Project, or CVPIA, contains a provision to 
facilitate and endorse this intra-regional transfers in the 
Sacramento Valley for CVP project water. For many years the T-C 
has benefitted from some water transfers. However, there is a 
need for the Bureau of Reclamation, as a partner, to further 
exercise its discretion in a manner that will expedite and make 
affordable such transfers from neighboring water suppliers.
    The second action would be the conveyance of water in 
Federal facilities. There is now a tremendous opportunity to 
convey water including transferred, exchanged, or remanaged 
water through Federal facilities. This can be done under the 
CVPIA or the Warren Act. The key, however, is for the Bureau of 
Reclamation to utilize its discretion again under these laws to 
expedite rather than hinder conveyance of this water in an 
economically feasible manner to the landowners in the region.
    A third action is Sites off-stream reservoir. The 
flexibility of the state's water system would be greatly 
enhanced with the construction of Sites reservoir. I have a 
unique interest in the development of this project. As I 
mentioned, my property is in the footprint of the proposed 
Sites reservoir.
    My rangeland and home of 27 years will be flooded by the 
Sites reservoir once it is filled. I only have to look over the 
hill into the Sacramento Valley where all of our irrigated 
farmland, our livelihood, and that of my children and that of 
my grandchildren are so dependent upon securing reliable water 
supplies. If we succeed in this integrated endeavor, so shall 
the rest of California have an opportunity for a more secure 
and adaptable water supply.
    In closing, there is a vision in the north that the 
Sacramento Valley will be able to provide substantial 
contributions to help provide water security throughout the 
state but this can only occur when we are empowered a regional 
solution like the integrated program of water management and 
supply activities that I have described today.
    The combination of facilities, management, regulatory 
streamlining, and sound use of discretion by Federal and state 
agencies can assure local landowners like me that are needs 
will be met. Such local solutions will far better utilize each 
region's water resources, and thereby make water available to 
resolve much of California's growing water needs.
    I thank you and I thank you for your continued support of 
agriculture.
    [The prepared statement of Ms. Wells follows:]

    Statement of Mary Wells, Sacramento Valley Landowner, Maxwell, 
                               California

    Mr. Chairman, Members of the Subcommittee, my name is Mary Wells. I 
am a landowner on the west side of the Sacramento Valley, where my 
husband, Charles, and I own row crop ground and farm rice in three 
irrigation districts all diverting water from and dependent upon the 
great Sacramento River. In addition, we own rangeland where we live and 
our family cattle operation continues, in the rolling foothill 
community known as Sites, located 10 miles west of Interstate 5 and the 
small town of Maxwell. I appreciate the opportunity to testify before 
you today to provide a farming landowner's perspective on the water 
supply challenges that have spawned years of effort and action. 
However, today, I must applaud the tremendous opportunity in my part of 
the state to not only provide water efficiency and security to my 
region, but also to effectively assist in the resolution of water 
issues in the San Francisco Bay-Delta and beyond.
    A reliable and affordable water supply is vital to my family's 
farming operation. Because of this, I serve as a Director to the boards 
of Westside Water District, Maxwell Irrigation District, and the Tehama 
Colusa Canal Authority (T-C). Because water issues transcend local 
impacts, I became a founding Director of the Northern California Water 
Association in 1992, where today I serve as Chairman. My perspective 
has further been shaped by the 21 years of water-related employment, 
including General Manager of Westside Water District and Administrator 
to Maxwell Irrigation District.
    Water is delivered to our row crop ground from Lake Shasta, down 
the Sacramento River to the Red Bluff diversion dam, where it is 
diverted into the Tehama-Colusa Canal for a severity to ninety mile 
journey to the Westside Water District. The eighteen T-C districts are 
water service contractors with the Central Valley Project (CVP).
    For years, Sacramento Valley residents have experienced a 
continuing increase in environmental and other regulatory demands on 
the region's water supply both from within the region and from other 
areas of the state. Landowners and other water users have been involved 
in aggressive conservation and restoration efforts to meet all of the 
needs in the region. But, our struggle to meet these demands grows more 
difficult. For example, agricultural water users on the T-C are only 
receiving 60 percent of their contract allocation this year, after five 
consecutive wet years in California. As a result, I have personally 
experienced water shortages during seven out of the last twenty years. 
For two of these seven years, we received only 25 percent of our 
contract allocation.
    This hopefully dispels a common misperception that water users 
north of the Bay-Delta are flush in water and always receive a full 
allocation every year. In fact, many of the diverters in my region, 
particularly along the T-C are short of water even in 100 percent 
supply years due to the moratorium placed on additional contracts in 
1977 while these districts were still being completed. This condition 
is only made worse in years of reduced supply. Because of increased 
shortages and other system-wide issues in the Sacramento Valley, we now 
have an opportunity and a need to manage our water supplies in a more 
integrated manner. We have, therefore, embarked upon an integrated 
water management program to meet local needs in Northern California and 
thereby help provide solutions to problems in other regions of the 
state.

AN INTEGRATED WATER MANAGEMENT PROGRAM FOR THE SACRAMENTO VALLEY WILL 
        IMPROVE WATER SUPPLY, QUALITY AND RELIABILITY
    T-C contractors and other Northern California water users have 
committed to help improve water supply reliability, water quality and 
environmental benefits. Most notably, we have been involved in the 
development of an integrated water management program for the 
Sacramento Valley. This program includes fish passage improvements, 
groundwater management activities, evaluation of the Sites offstream 
reservoir, flood protection, water transfers and exchanges, watershed 
management and other environmental improvements.
    This plan is reflected in the development of the Sacramento Valley 
Water Management Agreement, which was finalized when the State Water 
Resources Control Board postponed Phase 8 of the Bay-Delta water rights 
proceedings. This agreement is now the template for a regional strategy 
in the Sacramento Valley. The Sacramento Valley Water Management 
Agreement will concentrate efforts on meeting all of the water supply 
demands within the Sacramento Valley every year, and it will help to 
provide water supplies for use in the Bay-Delta region for a number of 
uses, including meeting water quality standards and providing export 
supplies to areas south of the Bay-Delta, and as an asset for the 
Environmental Water Account (EWA) and other environmental programs.

PROVIDING WATER SECURITY FOR THE WEST SIDE OF THE VALLEY
    Water security for water users in my area and throughout the 
Sacramento Valley enables Northern California water users to enhance 
water security throughout the state. As I mentioned earlier, water 
users on the T-C are only receiving 60 percent of their water 
allocation from the CVP this year. Water users in the Sacramento Valley 
can assist in more effectively utilizing the resource to provide water 
supplies for needs in other parts of the state, but we first are 
committed to meet local water demands in the Sacramento Valley.
    To meet these needs, leadership and direction must be provided to 
support the development of this regional integrated management program. 
For me and the water users on the T-C, the following actions will begin 
to achieve this goal.

Infra-Regional Water Transfers
    A critical component of any plan to meet all of the water needs in 
the Sacramento Valley is the ability to transfer water within the 
region. The Central Valley Project Improvement Act (CVPIA) contains a 
provision to facilitate and endorse these types of infra-regional 
transfers in the Sacramento Valley for CVP project water. These 
transfers allow water diverters in the Sacramento Valley to assist 
their neighbors in meeting their individual water needs. For the past 
several years, the T-C has benefited from certain water transfers, 
however, there is a need for the Bureau of Reclamation, as a partner, 
to further exercise its discretion in a manner that will expedite and 
make affordable such transfers from neighboring water suppliers. These 
intraregional transfers promote partnerships among the local water 
users and allow local needs to be met.

Conveyance of Water in Federal Facilities
    Intra-regional water transfers to the T-C water users and other 
creative management tools will require conveyance of water through 
federal facilities. There is now a tremendous opportunity to convey 
water, including transferred, exchanged and re-managed water, through 
federal facilities to help provide water security on the west side of 
the Sacramento Valley. This can be done under the CVPIA or the federal 
Warren Act. The key, however, is for the Bureau of Reclamation to 
utilize its discretion under these laws to expedite rather than hinder 
conveyance of this water in an economically feasible manner to the 
landowners in the region.

Fish Passage Improvements
    Water users on the west side of the Sacramento Valley are currently 
initiating efforts to improve water delivery reliability while 
improving fish migration past the Red Bluff diversion dam on the 
Sacramento River. This is a continuation of a historical commitment on 
the part of T-C to protect Endangered Species Act (ESA) listed species 
while meeting water delivery obligations. These efforts are reflective 
of projects developed by water diverters throughout the Sacramento 
Valley, such as fish screens, fish ladders, siphons, dam removal, 
habitat conservation plans, and other habitat improvement projects to 
enhance the environment while ensuring water supply reliability.

Sites Off-Stream Reservoir
    The flexibility of the state's water system would be greatly 
enhanced with the construction of Sites reservoir. I am very much 
interested in the development of this project. As I mentioned earlier, 
my property is in the footprint of the proposed Sites reservoir. My 
home ranch and much of my rangeland will be flooded by Sites reservoir 
once it is filled. Although I will be losing my home of twenty-seven 
years, I only have to look to the east over the hills into the 
Sacramento Valley where all of our irrigated farming, our livelihood, 
and that of my children and grandchildren are so dependent upon 
securing water reliability. If we succeed in this integrated endeavor, 
so shall the rest of California have the opportunity for more secure 
water supplies.
    This off-stream storage project would provide additional water 
availability for a number of uses including improvements to habitat and 
water quality. This reservoir would provide water supplies in average 
and dry years for urban, agricultural and environmental purposes, 
increase Bay-Delta outflows during critical times, improve flood 
control, enhance groundwater recharge, contribute to the EWA and 
improve flexibility for existing projects.
    In closing, developing solutions for California's water needs 
requires the implementation of an integrated program of water 
management and supply activities that includes the components I have 
mentioned today. The Sacramento Valley will be able to provide 
substantial contributions to help provide water security throughout the 
state. But, this can only occur when we empower regional solutions, 
like the integrated program described above, and local needs are 
satisfied by a combination of facility management, regulatory 
streamlining and the sound use of discretion by federal and state 
agencies. Such local solutions will far better utilize each region's 
water resources, and thereby make water available to resolve much of 
the State's growing water needs.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Dr. Gleick.

    STATEMENT OF DR. PETER GLEICK, DIRECTOR OF THE PACIFIC 
    INSTITUTE FOR STUDIES AND DEVELOPMENT, ENVIRONMENT, AND 
                            SECURITY

    Mr. Gleick. Mr. Chairman, Congresswoman, thank you for the 
opportunity to speak to you today.
    I'm the Director of the Pacific Institute in Oakland. It's 
a nonprofit research institute. We look at a wide range of 
things, most of them related to water resources, and climate 
change.
    I also serve as a member of the National Academy of 
Sciences Water Science and Technology Board. I have been given 
a challenge today to talk about two completely different things 
in 5 minutes. I'll do the best I can.
    The first is something that you believe to be true that I 
think is no longer true. The second is something that you 
probably think is not true but turns out to be true.
    The first one has to do with water use efficiency and the 
potential for improving water use efficiency. It used to be 
true in the State of California and in many other places that 
building new reservoirs and dams and aqueducts was the best way 
to solve our water problems in California. We did a wonderful 
job in that regard but that is no longer the case.
    In fact, the good news is that far more water is available 
at far less cost far more quickly by improving the way we use 
water by improving the efficiency of water use statewide than 
could ever be made available by new dams and reservoirs. I'll 
come back to that point in a moment.
    The second issue is that climate change turns out to be a 
real problem. Despite what many people have believed for a long 
time, climate change is now acknowledged to be a real problem, 
something in our future if not already in our present, and that 
state and Federal water agencies need to do a much better job 
of thinking about what climate change means for water 
resources.
    In particular, we must avoid funding unnecessary 
infrastructure or, in particular, infrastructure that is 
designed for conditions that may no longer exist or may not 
exist in the future. We must not build things we don't need and 
can't afford.
    Now, let me come back to the first point briefly. In my 
written testimony there are a number of figures. If you could 
perhaps look at the first one only. This is somewhat of a 
mundane example but I think the importance of it will become 
clear.
    This figure looks at how much water the State of California 
uses to flush toilets. Now, it may sound somewhat mundane but, 
in fact, toilets are the largest indoor user of water for all 
of us.
    The top line shows how much water we would use to flush 
toilets every year in California if there were no conservation 
and efficiency. The blue line in the middle shows how much 
water we use today to flush toilets based on the current mix of 
inefficient and efficient toilets. And the bottom line is how 
much we would use to flush toilets if all of the toilets in the 
State of California were efficient models.
    Now, as you probably know, President Bush signed into law 
in the early '90's the National Energy Policy Act which 
includes standards for new efficient toilets. All the toilets 
you buy nationwide now are efficient toilets. But there are 
still plenty of inefficient toilets statewide and nationwide 
despite the great efforts that have been made to replace 
inefficient toilets.
    In fact, our estimate is that there are 500,000 acre-feet 
of water used every year to flush toilets that are inefficient. 
A mundane example but a huge amount of water. You heard in the 
first part of the testimony this morning that the yield from 
the expected new supply projects proposed under CALFED is 
250,000 to 500,000 acre-feet.
    There is potential for improving water use efficiency in 
every sector of our economy, not just toilets. Toilets is just 
one example, but these are huge savings in the agricultural 
area, in the industrial area, and in many other aspects of our 
use in homes.
    In terms of future need for storage, the state may need 
more storage. I'm not disputing that, but I would argue that we 
don't need to fast track that new storage and if we do, we are 
risking making the wrong decision early. I would urge you very 
carefully to look at the agreements that CALFED has come to, 
the balance of choices presented in the CALFED agreement, and 
not fast track storage that we may not need and may not be able 
to afford.
    Let me address the second point, climate change. This is a 
very complicated issue but not as complicated as some might 
expect. Let me offer a quick summary, given my limited time, 
based on the conclusions of the recently completed National 
Assessment.
    Again, President Bush in 1990 passed a law that required 
that a ``National Assessment'' of the impacts of climate change 
be done. Such a National Assessment has been done and was 
presented to Congress and to the President in the last several 
months.
    The results that I would like to talk about come from the 
National Assessment Water Report, which was funded by the 
Department of the Interior. All of your offices have received 
them.
    Very briefly, the findings are as follows: Climate change 
is a real problem. Some climate change now seems unavoidable no 
matter what we do. The evidence is accumulating and convincing 
that the climate is already changing. There are close and 
complex connections between California's water system and our 
climate. Our water is very dependent on the climate system.
    There are likely to be serious negative impacts for the 
state's water resources. There may also be some positive ones 
depending on the way the climate changes and the speed at which 
it changes. There are many remaining uncertainties including 
the nature of the changes and extreme events, changes in 
precipitation patterns, details of regional effects.
    There are things we should be doing right now. California 
water planners have not adequately addressed this issue. For 
example, the California water plan done by the Department of 
Water Resources has not addressed this issue and CALFED has not 
addressed this issue. It is, I believe, a requirement now from 
the Secretary of the Interior that all agencies and bureaus 
under the Secretary's jurisdiction look at the issue of climate 
change.
    In sum, there doesn't have to be a water crisis in 
California. There are a wide range of innovative and successful 
projects and efforts that have been done and are underway that 
can reduce the severity of California's water resource 
problems.
    The bad news is that there are new challenges coming. A 
crisis in California's water policy making. There are problems 
at the state and Federal level in the way we think about water 
policy.
    I urge you to make sure that legislation that you propose 
and pass including, for example, H.R. 1985, ensure that the 
potential for water use efficiency statewide receives its 
appropriate priority and attention, that taxpayer money is not 
spent on expensive and unnecessary infrastructure before it's 
needed, and that the risks of climate change are addressed soon 
by the appropriate Federal and state agencies. Thank you.
    [The prepared statement of Mr. Gleick follows:]

Statement of Peter H. Gleick, President, Pacific Institute for Studies 
         in Development, Environment, and Security 1
---------------------------------------------------------------------------

    \1\ 654 13th Street, Preservation Park, Oakland, California 94612, 
510 251-1600.
---------------------------------------------------------------------------
    Mr. Chairman and members of the Committee, thank you for the 
opportunity to testify today. I am a scientist by training and direct 
the policy research activities at the Pacific Institute for Studies in 
Development, Environment, and Security in Oakland, California. The 
Pacific Institute is an independent, non-partisan research center 
looking at a wide range of national and international water issues. I 
have served on a wide range of boards and committees, including the 
Public Advisory Forum of the American Water Works Association, the 
International Water Resources Association, scientific panels of the 
American Geophysical Union, the American Association for the 
Advancement of Science, and others. I am currently a member of the 
National Academy of Science's Water Science and Technology Board. A 
full resume is attached.
    The Institute works extensively on California water policy issues 
and provides analysis and policy recommendations to State, Federal, and 
local policymakers. The Institute is a participant in the ongoing 
California Water Plan effort of the state DWR. We were chosen by the 
U.S. Department of the Interior to do a formal independent review of 
CALFED's water-use efficiency analysis. I served as co-chair and lead 
author of the National Assessment Water Sector report looking at the 
implications of climate change for the nation's water resources.

                           Summary Testimony

    My testimony today addresses two critical points: first, the vast 
potential to improve the efficient use of water statewide; and second, 
the coming risks of climate change. In summary, the good news is that 
far more water is available, at a far lower cost, through efforts to 
cut the inefficient and wasteful use of water, than could ever be made 
available by new reservoirs and dams. The bad news is that climate 
change is a real problem and the State and Federal agencies looking at 
our water problems need to do a better job of addressing it. In 
particular, members of Congress have the responsibility to avoid 
funding expensive infrastructure that is either unnecessary or designed 
for conditions we no longer expect to occur. We must not build things 
we don't need and can't afford.
    Let me start with the potential for improving our water use. One 
example should really open your eyes. As you know, there is a national 
standard (the National Energy Policy Act of 1992, PL 102-486) that has 
required all toilets sold in the U.S. for the past seven years to be 
``ULFTs----highly efficient, low-flow toilets. California has made 
great progress in replacing old, inefficient toilets, and the new ones 
pay for themselves within a year in water savings. Yet we estimate that 
at least two-thirds of the old inefficient ones are still in place, 
wasting 2 to 4 gallons every time we flush them. What does this mean? 
As Figure 1 shows, it means that there are 500,000 acre-feet of clean, 
cheap water wasted every year just from our inefficient toilets. It 
means that California residents are flushing more than $250 million 
dollars every year down the drain. This is more water than could be 
produced as reliable yield from any of the new proposed reservoirs. And 
it is the cheapest water available.

[GRAPHIC] [TIFF OMITTED] T3149.030

    This is just one example: improvements in water-use efficiency are 
possible in every single sector of our economy, from our industrial, 
commercial, and agricultural sectors. We estimate that no new water 
supplies are necessary for at least two decades, even with expected 
increases in population and economic growth, beyond projects that are 
designed to store and use groundwater, increase our use of reclaimed 
water, and improve efficient use.
    Let me address the second point: global climate change. This is a 
complicated issue, but not as complicated as some think. Let me offer 
you a summary, using the conclusions of the recently completed National 
Assessment Water Sector report. This report, part of the overall 
National Assessment requested by President George Bush and the Congress 
in the 1990 Global Change Research Act (Public Law 101-606), was 
released several months ago. I served as co-chair and lead author of 
the Water Sector report, which was funded by the Department of the 
Interior and the U.S. Geological Survey. The scientific community and 
the public extensively reviewed the report. (The full report is 
available for this committee, and members of the public can find it at 
www.pacinst.org/naw.html).
    Let me summarize some of its major findings:
     Climate change is a real problem
     Some climate change now appears unavoidable.
     The evidence is accumulating and convincing that the 
climate is already changing.
     There are close and complex connections between 
California's water system and our climate.
     California's water resources and some of the 
infrastructure already in place are especially vulnerable to climate 
changes.
     There are likely to be serious negative impacts for the 
state's water resources; there are also likely to be positive impacts 
and some reductions in the severity of negative ones we already 
experience. There are also many remaining uncertainties, including the 
nature of changes in extreme events, precipitation patterns, and the 
details of regional effects.
    There are things we should be doing right now. California water 
planners have not adequately addressed this issue, at the federal, 
state, or local levels. In particular, the California Water Plan has 
not addressed this issue adequately, nor has CALFED. I note that a new 
order from the Secretary of the Interior, Order No. 3226, now requires 
that every bureau and office of the Department of the Interior consider 
and analyze potential climate change impacts in long-range planning, 
developing water plans, and when making major decisions about resources 
under the Department's purview. This order applies to all CALFED 
activities, and to much more.

                        Background to Testimony

1. Water Use Efficiency: What is the Good News?
    Out of the limelight, every single economic sector in California is 
working to resolve water problems and having some success. Water use is 
becoming more efficient in every sector. Smart collaborations are 
finding ways of restoring natural ecosystems while maintaining 
California's excellent agricultural productivity and protecting 
landowners. California farmers are continuing to innovate and 
modernize, using less water while producing more food, fiber, and 
profit. Urban water-use efficiency improvements are keeping ahead of 
population growth. In other words, even as populations grow, the amount 
of water each person needs is dropping, and in some cases, even total 
water use is dropping. The potential for even more improvements in 
efficiency is enormous.
    This kind of good news means that the number of successful tools 
that we have for solving California's water problems is growing. Let me 
offer some specific examples:
Urban Highlights
    Cities are becoming much more water efficient, breaking the link 
between population growth and growing water use.
     Water use in Santa Clara County peaked in 1985, and is 
lower today than it was 15 years ago.
     San Diego County is using less water--13 percent less--
than it was using ten years ago, even though its population has grown 
10 percent.
     Water demands for the Metropolitan Water District peaked 
in 1989 and 1990. They are using less water now then they were 10 years 
ago.
     Los Angeles used 593,000 acre-feet of water in 1970. 
Demand rose in the late 1980s and then began to drop back. In 1998 they 
used 594,000 acre-feet. Figure 2 shows this history. Population during 
this same period rose from 2.8 million to 3.75 million people--a 32 
percent increase.

[GRAPHIC] [TIFF OMITTED] T3149.031

    Water recycling is reducing wastewater volumes and providing water 
supply, reliability, and environmental benefits.
    Statewide, industrial, commercial, and institutional water use 
efficiency is rising dramatically. Between 1980 and 1990, industrial 
water use in California dropped 30 percent, while the State's economic 
production rose 30 percent. This trend has continued in recent years.
    Contrary to some beliefs that no ``new storage'' for water is being 
built in the State, substantial increases in ``storage'' in the form of 
massive groundwater banks have been created. Just two examples:
     In the past 20 years at one facility alone near 
Bakersfield, nearly 1 million acre-feet of water have been stored.
     The Semitropic Water District groundwater-banking program 
has stored 500,000 acre-feet of water in the past decade.
Agricultural Highlights
    For decades, with no official policy or recognition, California 
growers have been moving toward higher-valued crops that use less water 
per acre and per dollar earned. Figure 3 shows the drop in field and 
grain crops and increases in vegetable and fruit crops.

[GRAPHIC] [TIFF OMITTED] T3149.032

    Growers are also moving toward more efficient irrigation 
technologies, saving money, water, and energy, and increasing yields. 
Yet, much more potential exists, as Figure 4 shows.

[GRAPHIC] [TIFF OMITTED] T3149.033

    Smart collaborations between local landowners and urban agencies 
are providing high-quality, reliable recycled water for agricultural 
irrigation.
    The technological and communications revolution sweeping the 
country and the world is also having an effect in agriculture. Farmers 
are learning how to get the information they need to improve 
productivity, reduce water use, and increase profits.
Some Bad News?
    Great efforts have been expended to improve California's formal 
water planning process--both at the state Department of Water Resources 
and in the CalFed process. The result has been an imperfect, but 
improved effort to balance competing needs and desires. That balance is 
threatened by imbalanced legislation at the federal level--legislation 
that favors political preferences over economic rationality, and large 
infrastructure over more effective and cheaper efficiency improvements.

Recommendations
    Existing technologies for improving water-use efficiency, improving 
water supply reliability, and cleaning wastewater have enormous 
untapped potential. The potential for improving the efficiency of water 
use is greatly underestimated by official agencies.
     Regulatory incentives and motivation can be effective 
tools. Smart regulation is better than no regulation.
     Economic innovation leads to cost-effective changes. The 
power of proper pricing of water is underestimated.
     Ignorance is not bliss: the more water users know about 
their own use and the options and alternatives available to them, the 
better decisions they make.
     The most successful water projects have individuals and 
groups with different agendas working together.

2. Nature of Climate Impacts for California Water
     There will be very important effects on water 
availability.
      * Significant changes in the timing of runoff from the Sierra 
Nevada;
      * Less snow, more rain, more late winter and early spring 
runoff;
      * Less late spring and early summer runoff;
      * Less summer soil moisture (more need for irrigation water)
     Everyone seems to worry about droughts, but the risks of 
flooding may be as great or greater. Worse, we may see increases in the 
risks of both.
     Water quality will also be affected: salt water may 
penetrate farther into the Sacramento/San Joaquin Delta to where the 
pumps for our water supplies take freshwater for Bay Area and Southern 
California.
     The Colorado River will also be directly affected.
     There is an increased risk of contamination of coastal 
groundwater due to rising sea level.

[GRAPHIC] [TIFF OMITTED] T3149.034

Some Climate Change is Unavoidable.
    Some climate change is unavoidable. There is nothing we can do (or 
more accurately, nothing we will do) to prevent at least some change 
from occurring. Indeed, the National Assessment water sector report 
presents evidence that change is already occurring (Figure 5).
What Should We Do?
     Research on climate change must not only continue, it 
must accelerate, just as greenhouse gas emissions are accelerating. 
(This is a federal and international responsibility.)
     Research on climate impacts must greatly expand. What we 
don't know seriously swamps what we do know. (This is a federal and 
state responsibility.)
     The risks of climate change must be incorporated into all 
water planning, including the design and operation of federal and state 
water facilities, CalFed, and the California Water Plan.
     We must begin now, and should have begun a decade ago, to 
evaluate policies for adapting to and mitigating the worst threats. 
(This is a federal, state, local, agency, and individual 
responsibility.)

[GRAPHIC] [TIFF OMITTED] T3149.035

    Despite rhetoric to the contrary, there doesn't have to be a water 
crisis in California. There is a wide range of innovative and 
successful projects and activities already underway showing how to 
address California's diverse water problems. The bad news is that there 
are new challenges coming, and a crisis in California water 
policymaking--real problems at the state and federal levels in the way 
we think about water policy. I urge you to make sure that the 
legislation you propose and pass, including HR 1985, ensures that the 
potential for improving water-use efficiency receives its appropriate 
priority, that taxpayer money is not spent on expensive and unnecessary 
infrastructure, and that the risks of climate change be addressed soon 
by the appropriate federal and state agencies.
    Thank you for the opportunity to testify before you today. I will 
be happy to answer any questions you might have.
                                 ______
                                 
    Mr. Calvert. Thank you. You get these high-tech folks here 
in Silicon Valley to invent a low-flow toilet that works.
    Mr. Gleick. They do work, Mr. Chairman. I would be happy to 
address that issue.
    Mr. Calvert. A better one.
    Mr. Nelson.

   STATEMENT OF BARRY NELSON, SENIOR POLICY ANALYST, NATURAL 
                   RESOURCES DEFENSE COUNCIL

    Mr. Nelson. Thank you, Mr. Chairman, and Congresswoman 
Lofgren. I appreciate the opportunity to speak with you today. 
My name is Barry Nelson with the Natural Resources Defense 
Council. We have been working on California water issues for 
nearly 20 years.
    Congressman, the good news from the perspective of the 
topic you are hearing today is that CALFED has been working on 
these issues in a very cooperative manner since 1995. That 
CALFED plan has been adopted by state and Federal agencies and 
is supported by a very broad range of stakeholders throughout 
the State of California.
    We look forward to working with you in drafting legislation 
to implement that program. Unfortunately, we can't support 
either H.R. 1985 or S. 976 at the moment and you have received 
a letter to that effect from approximately 25 organizations, 
most of the environmental and fishing organizations that have 
worked in the CALFED process.
    On the other hand, we do believe that Congressman Miller's 
newly introduced legislation would support balanced CALFED 
implementation. I would like to briefly discuss some of our 
concerns and focus as well on our recommendations for moving 
forward.
    In short to begin, we fear very much that the CALFED 
Program may be beginning to unravel and the early warning sign 
there is the diminished level of state funding and Federal 
funding that we have been seeing. We are very concerned that if 
this trend continues, it could lead to gridlock and damage not 
just the environment but also water supply throughout the 
state. We are strongly supportive of a balanced state and 
Federal program to fund the CALFED program and we would like to 
move forward with that as rapidly as possible.
    I would, however, like to mention a couple of concerns 
about H.R. 1985 and I'll start with its potential impacts on 
water supply reliability. The first of those concerns is that 
by establishing essentially seniority for a very small group of 
farmers in the Central Valley, there is the potential to 
undermine state water rights and also to affect the water 
supplies of Silicon Valley here in the South Bay, of the East 
Bay, of water users in a variety of parts of the state. We are 
very concerned about that.
    Second, we are concerned about the potential of the bill to 
undermine the ecosystem restoration program coming out of 
CALFED, Trinity River restoration, wetlands water supplies, 
wildlife refuge supplies, protection of the Bay-Delta 
endangered species.
    We are also concerned about the premature authorization of 
facilities. Sunne McPeak mentioned that we need facilities to 
move forward. We completely agree that we are going to need 
smart, intelligently designed facilities. We don't believe we 
can get there if we short circuit the analysis of those 
facilities.
    Some of the facilities that H.R. 1985 would authorize are 
so premature that they literally don't have a spot on the map. 
A site hasn't been selected. A name for these facilities has 
not been selected in the San Joaquin Basin. I'll get to another 
one of those facilities in a moment.
    If this bill were enacted, we are very concerned as well 
that it would change the record of decision as it would affect 
Federal agencies. It would not change that record of decision 
as it affects state agencies. We are very concerned that would 
undermine that state and Federal partnership that has been 
essential for this program and for the successes it has seen so 
far.
    Our recommendations. We have worked very hard to present 
recommendations to the CALFED Program. Not just NRDC but the 
environmental community at large. We have presented your office 
with a briefing book on these issues and a detailed blueprint 
for meeting California's water supply needs.
    In our testimony we mention five principles. I'll mention 
four rapidly and then spend a moment on the fifth. The first is 
in order to move forward with the program to meet California's 
water supply needs, we need to make sure we are moving forward 
with the program that is compatible with the Record of Decision 
so we don't set aside five, 6 years really, of hard work.
    The second is that we make sure we are not just compatible 
with the decision but that we are implementing that decision in 
a balanced fashion delivering the full range of benefits, not 
just ecosystem, not just water supply, water quality, levee 
stability, and so forth.
    The third is making sure that we have a program compatible 
with ecosystem restoration. The fourth is making sure we are 
doing analysis before we make decisions.
    The fifth is economic analysis. We are concerned that we 
haven't focused enough on economic analysis in making decisions 
in the CALFED Program. They have done some credible analysis. 
NRDC recently completed an analysis that showed, for example, 
Sites reservoir, one of the facilities that CALFED recommends 
be studied but not yet authorized.
    That facility, according to our analysis, would cost 
approximately $400 an acre foot to deliver water to the 
agricultural community. Dramatically more to the urban 
community. More to the urban community, we believe, than any 
urban water agency would be likely to pay. And in the 
agricultural community that amount of money is simply beyond 
the capability of the ag community.
    Some of the folks who have advocated the construction of 
Sites reservoir have been found by the Bureau of Reclamation to 
be unable to pay more than $12 an acre foot for their water 
supply. Frankly, we don't think it's likely that the state or 
Federal Governments are going to construct a reservoir that 
would cost $400 to deliver water to folks who can afford to pay 
$12 for their water supply.
    The principles that NRDC has recommended aren't abstract. 
We don't believe it means we should not act. We think we should 
move forward rapidly. That's why we supported things like the 
Bay-Delta Accord, the water bond passed last year, Prop 204, 
state and Federal funding for the CALFED Program.
    In light of the time, I'm not going to mention all the 
different tools that we believe can and should be implemented 
to strengthen water supply reliability and in the long run 
protect water quality and the health of the ecosystem. The good 
news again is from the perspective of CALFED's own economic 
analysis.
    The more benign water policy, water supply tools or also, 
as Dr. Gleick mentioned, the less expensive tools. They are the 
ones that are less controversial, less expensive, more 
environmentally benign and, frankly, clearly more likely to 
happen in the short-term.
    Mr. Chairman, Congresswoman Lofgren, thank you for this 
opportunity to speak with you. We look forward, as I said, to 
putting together a broadly supported piece of legislation to 
implement the CALFED Program. Thank you.
    [The prepared statement of Mr. Nelson follows:]

  Statement of Barry Nelson, Senior Policy Analyst, Natural Resources 
                            Defense Council

    Mr. Chairman and members of the subcommittee, thank you for the 
opportunity to speak with you today regarding California water supply 
reliability and related issues. My name is Barry Nelson and I am a 
Senior Policy Analyst with the Natural Resources Defense Council's 
Western Water Project. I have been involved in California water policy 
issues for over a decade and have been involved in the CALFED Bay-Delta 
Program since its inception. NRDC has over 500,000 members, nearly 
100,000 of whom live in California.
    NRDC works actively to restore the health of the Bay-Delta 
ecosystem, to improve California drinking water quality and to improve 
water supply reliability. We believe, for two reasons, that it is 
essential that Californians act to improve water supply reliability. 
The first is that unwise water supply activities can undermine 
ecosystem restoration efforts. The best way to avoid these conflicts is 
to invest in intelligent water supply activities that are compatible 
with a healthy ecosystem. The second reason comes from our 
understanding that providing tangible water supply reliability benefits 
is essential to broadening support for ambitious ecosystem restoration 
efforts. In short, we recognize the need to move forward with a 
balanced program that will benefit the environment and the California 
economy. The genius of the CALFED Bay-Delta Program is in its 
recognition that improved water supply reliability, improved water 
quality and restored ecosystem health are all compatible and must be 
pursued through a coordinated, interdisciplinary strategy.
    The good news, with respect to the topic of your hearing today, is 
that the CALFED program has been investigating these issues since 1995. 
Its plan was adopted last year. This plan has been endorsed by state 
and federal agencies and a broad, bi-partisan range of stakeholders. We 
support the CALFED program. But the CALFED plan is not simply a list of 
projects. It is a carefully constructed strategy to assure broad 
benefits and to allow phased decision-making to take place on 
controversial issues as adequate information becomes available.
    NRDC believes that federal funding for balanced implementation of 
the CALFED plan is an important key to improving water supply 
reliability. We look forward to working with you in drafting 
legislation that will promote this goal. Unfortunately, neither H.R. 
1985 or S. 976 is such a balanced bill. I will return to our concerns 
in a moment, and to other obstacles to progress, but first, I would 
like to discuss the principles that, we believe, provide the keys to a 
balanced approach to improving water supply reliability in the coming 
several years.

Keys to Improving Water Supply Reliability
    NRDC and the California environmental community have worked 
carefully to develop recommendations for the improvement of water 
supply reliability in California. We have separately provided you with 
the environmental community's briefing book and blueprint for improved 
water supply reliability. I have copies with me today. This work leads 
us to suggest five principles for moving forward with an effective 
program.
    Compatibility with the CALFED Record of Decision: The CALFED 
process has required leadership, six years and enormous resources from 
Congress, the state legislature, state and federal agencies and 
stakeholders. The plan, adopted last August, lays out a road map for 
moving forward in a balanced manner. Any effort designed to provide 
water supply reliability benefits for Californians must be compatible 
with this plan. If efforts that would undermine the CALFED program gain 
strong support, they will bring down this broad-based effort and weaken 
other collaborative efforts to meet water supply, water quality and 
ecosystem restoration needs.
    Balanced Implementation of the CALFED Program: Compatibility with 
CALFED is the first step. The second step is assuring that state and 
federal agencies are moving forward with a balanced program designed to 
provide the full range of benefits promised by the CALFED plan. Without 
such balanced implementation, support for the CALFED program would 
inevitably erode.
    Credible Economic Analysis and ``Beneficiary Pays'' Financing: For 
far too long, water supply planning efforts have excluded credible 
economic analysis and focused on forcing taxpayers to subsidize water 
development. We believe that we must turn towards realistic water 
prices designed to pay for needed improvements and provide incentives 
to use water efficiently. The failure to incorporate credible economics 
and financing has led some water users to conclude, erroneously, that a 
new wave of dam building is required to meet future water needs. Water 
users cannot pay for such improvements. State and federal budget 
realities make massive taxpayer subsidies for these projects unlikely. 
Credible economics and financing are essential to developing realistic 
projects that will deliver real benefits. The CALFED program has 
initiated some credible economic analysis, with results I will discuss 
later. The CALFED plan also requires beneficiaries to pay for proposed 
new surface storage facilities. These are, we believe, significant 
steps forward.
    Compatibility with Ecosystem Restoration: A healthy ecosystem 
improves water supply reliability. If the Bay-Delta were allowed to 
continue to degrade, it would inevitably lead to more listings under 
the state and federal endangered species acts, additional litigation, 
additional operational restrictions, increased conflict and reduced 
water supply reliability. In addition, proposals for future development 
that would further damage the ecosystem are inevitably met with 
opposition, delays and escalating costs. Fortunately, in the CALFED 
plan, in propositions 12, 13 and 204, and in previous federal funding 
for CALFED, agencies, legislators and stakeholders have accepted this 
principle.
    Analysis Before Decision-Making: As I mentioned above, the CALFED 
plan is not simply a list of projects. The program did a tremendous 
amount of analysis to develop its recommended actions. However, in some 
areas, CALFED recognized that additional analysis was required before 
making final decisions, particularly regarding controversial, 
expensive, potentially damaging and questionably viable projects such 
as new surface storage and proposed new Delta facilities. The CALFED 
plan lays out an ambitious program of evaluation in these areas, to 
provide a solid basis for decision-making. In short, to develop 
workable water supply solutions, we need to make sure that adequate 
analysis precedes decision-making.
    These principles are not abstract, nor are they reasons to delay 
action. For example, these principles led NRDC to strongly support the 
water bond last year in California. This bond was consistent with these 
principles. As a result, it attracted board support, provided broad 
benefits and was approved by nearly a two-thirds vote of the public. We 
believe that a similar approach could be successful in crafting federal 
legislation.

Recent Obstacles to Progress
    During recent months, several significant obstacles have emerged, 
which are hindering progress towards programs to provide improvements 
in water supply reliability, water quality and ecosystem health. Many 
of these obstacles indicate that the CALFED ``deal'' may be unraveling. 
If this trend continues, it will lead to gridlock, to the detriment of 
water users and the environment. In short, it would throw out six years 
of planning, squander broad support for the CALFED plan and make it 
difficult for a similar broad-based planning process to emerge for 
years to come.
    Imbalanced State Funding: NRDC has supported full funding for 
CALFED at the state level, even for the portions of the CALFED plan 
with which we have serious concerns. However, it appears unlikely that 
state legislators will fully fund CALFED. It appears that storage 
investigations are likely to receive full funding and that 
disproportionally large cuts will be focused on the CALFED water user 
efficiency and water quality programs. The result is that water supply 
reliability efforts will be undermined. In addition, some water users 
also succeeded in deleting from the budget language that reflected the 
CALFED plan beneficiary pays requirement and the requirement that the 
state create new user fees to support ecosystem restoration. We hope 
that these problems will be remedied before the budget is finalized. To 
date, however, pressure from water users is responsible for distorting 
the state budget to undermine the CALFED program.
    Inadequate Federal Appropriations: The CALFED plan will be nearly 
meaningless if it is not funded. Last year, Congress provided no funds 
for CALFED. This year, the federal appropriations process again raises 
serious cause for concern. The Administration is seeking only $20 
million in funding for CALFED, down from $60 million in the 
Administration's budget request last year. The situation in the House 
is even more dire. The House Energy and Water Appropriations bill 
includes no funds for CALFED ecosystem restoration, water quality or 
water use efficiency activities. However, the House bill does include 
funding for studies for Sites Reservoir. Unfortunately, it appears 
unlikely that we will see balanced federal funding for water supply 
reliability or ecosystem restoration activities. With some Californians 
seeking to undermine the CALFED plan, the likelihood of substantial 
federal funding in the near future for CALFED's water supply 
reliability efforts is very low.
    Unfortunately, the state and federal appropriations processes 
appear to be establishing surface storage--the most expensive, 
controversial, environmentally damaging and speculative projects--as 
the highest priority for funding.
    Sites Reservoir: Because CALFED developed remarkably little 
information regarding the proposed Sites reservoir, CALFED indicated 
that additional analysis is required. CALFED did not, for example, 
determine who might receive benefits from the reservoir, if it were 
built. However, the CALFED plan does require new facilities to be paid 
for by beneficiaries, not the taxpayers. Since the adoption of that 
plan, several developments threaten to undermine the CALFED strategy 
regarding this facility. A memorandum of understanding signed by the 
Bureau of Reclamation appears to promise benefits from Sites to 
specific water users. This document ignores the beneficiary pays 
requirement and calls for taxpayer funding for the project. As I 
mentioned above, water users have also succeeded in stripping language 
from the state budget that simply repeated the CALFED requirement that 
beneficiaries pay for these projects.
    CALFED did not complete an analysis regarding the likely cost of 
water from a Sites Reservoir to agricultural water users. However, 
NRDC, using CALFED's methodology and data, has completed such an 
analysis. A summary is attached. We discovered that, even before 
considering the needs of the environment, water from Sites would cost 
over $400 per acre-foot to North of Delta users and $470 to South of 
Delta agriculture. The cost for urban water users would be much higher, 
far more than any urban agency would be likely to pay. The strongest 
supporters of Sites are Sacramento Valley water users, such as the 
Tehama-Colusa Canal Authority. Some water users in the Tehama-Colusa 
Canal Authority currently pay just over $11 per acre-foot. In fact, the 
Bureau of Reclamation has found that these water users are incapable of 
paying more. As a result, they are not paying the Bureau what they 
already owe taxpayers for capital repayment, operations and maintenance 
costs and restoration fund charges. In summary, the strongest 
supporters for Sites Reservoir, a project that would produce water 
costing $400 per acre-foot, have been officially found by the Bureau of 
Reclamation to be incapable of paying more than $12.00 per acre-foot. 
We found that operating the project to provide water for South of Delta 
CVP customers would require an annual subsidy of nearly 100 million 
dollars. State and federal agencies are well aware of these problems 
with Sites Reservoir, which is why CALFED proposed going no farther 
than preparing additional studies.
    H.R. 1985 and S. 976: Unfortunately, these two pieces of federal 
legislation both violate all of the principles I outlined above. 
Neither is compatible with the CALFED plan. Neither would effectively 
promote improved water supply reliability. I have attached a short 
summary of our concerns regarding H.R. 1985. We have also provided your 
office with a much more detailed analysis of the many ways in which 
this bill conflicts with the CALFED program. I would like to mention 
just a few of the obstacles to improving water supply reliability that 
this bill would create.

    1. Undermining State Water Rights. The bill would give federal 
agricultural water contractors South of the Delta first claim on any 
water controlled by federal agencies, in order to guarantee a specified 
level of delivery. This provision would turn California water rights on 
its head--essentially turning junior contractors, such as the Westlands 
Water District, into senior water rights holders. This provision could 
be used by West side water users to undermine the reliability of water 
supplies for Silicon Valley, for the East Bay and for other parts of 
the state. The near certainty of this threat is demonstrated by the 
Westlands Water District's attack on water supplies for farmers on the 
East side of the San Joaquin Valley.

    2. Undermining Ecosystem Restoration. The Westlands Water District 
has sought for years to weaken legally required environmental 
protections for the Bay and Delta, endangered fish species, wildlife 
refuges and the Trinity River. These interests have already sued to 
block restoration actions on several fronts. In 1995, they sought to 
repeal much of the Central Valley Project Improvement Act. The proposed 
delivery guarantees would provide them with another tool in this 
effort. If passed, this language would be immediately cited in 
Westlands' existing legal attacks on environmental protection. The bill 
would also redefine the CALFED ecosystem restoration program and create 
numerous new obstacles to federal and even state participation in 
ecosystem restoration efforts. The lack of clarity in these provisions 
would be certain to lead to decades of litigation.

    3. Prematurely Authorizing Water Development Facilities. The CALFED 
plan clearly calls for careful analysis of proposed new surface storage 
facilities prior to seeking congressional authorization. H.R. 1985, on 
the other hand, would authorize these facilities, following the 
submission of a report to Congress. The bill would allow authorization 
to be withdrawn if a report is rejected by two congressional committees 
within 60 days; however, this timeline makes such congressional action 
extremely unlikely. This approach would violate the CALFED plan and 
long-standing congressional precedent. The bill would also pre-
authorize Sites Reservoir and un-named facilities in the San Joaquin 
Basin that CALFED concluded were so premature and problematic that the 
program did not even project possible dates for a recommendation to 
Congress. As I discussed previously, economic analysis by CALFED and 
NRDC suggest that, even without considering environmental needs, none 
of these projects is viable as a water supply facility. And finally, 
the bill would allow the Secretary of Interior, in cooperation with a 
CALFED governance body that does not yet exist, to trigger 
authorization for virtually any facility in the Central Valley, 
including some, such as the Peripheral Canal and Auburn Dam, that 
CALFED has explicitly rejected.

    4. Undermining the Environmental Water Account. The bill would also 
redefine the Environmental Water Account (EWA) in a way that could harm 
South of Delta water users. The EWA is designed to help restore the 
Bay-Delta and protect endangered species without affecting the water 
supplies of South of Delta water users. If the EWA is redefined, as 
proposed in H.R. 1985, it would render the EWA inadequate to achieve 
this goal. As a result, South of Delta water users, including the Santa 
Clara Valley and Southern California, would almost certainly see 
increased disruptions in water deliveries.
    In each of the above ways and more, H.R. 1985 would undermine the 
CALFED plan. We have similar concerns regarding S. 976's treatment of 
storage facilities and CVP deliver assurances.
    The CALFED plan is binding on both state and federal agencies. H.R. 
1985 would fundamentally alter the plan in a number of respects. These 
changes would bind federal agencies. However, California agencies would 
continue to be bound by the existing plan. If the bill were to be 
enacted, state and federal agencies would be working to implement 
different and conflicting programs. At its heart, CALFED is a 
cooperative arrangement between state and federal agencies. By 
legislatively altering the CALFED plan and commitments made by federal 
agencies, the bill would undermine this partnership.
    Westlands' Attack on the San Joaquin River has Blocked Transfers. 
As I mentioned above, the Westlands Water District has attacked farmers 
on the East side of the Central Valley in an attempt to take one third 
of the flow of the San Joaquin River. Many of the farmers on the East 
side have a long history of selling water to help Westlands growers 
meet their needs. Indeed, the emergence of a vital water market among 
South of Delta water users is a striking success story. We have 
strongly supported these transfers, which help meet agricultural water 
needs and provide incentives for growers to use water efficiently. 
However, it is not surprising that these East side farmers are now 
unwilling to sell water to Westlands. As a result, this year, the San 
Joaquin River petition is probably costing Westlands Water District 
growers hundreds of thousands of acre-feet of water.
    Bureau of Reclamation's Failure to Reform Expiring CVP Contracts: 
One of the primary causes of concerns regarding water supply 
reliability is the Bureau of Reclamation's practice of developing water 
without regard to efficient use or environmental impact. Thus, massive 
exports from the Delta were promised to water users, regardless of 
their willingness to pay the cost of that water and regardless of 
impacts on California's wildlife, fisheries and water quality. Today, 
laws passed because of strong public support for environmental 
protection have properly, if belatedly, imposed some outer limits on 
how much destruction can be caused by water projects. As a result of 
these modest movements towards balance, exporters who came to rely on 
free or virtually free water from the Delta, now complain of 
reliability problems.
    Unfortunately, the Bureau of Reclamation is proposing to worsen 
these problems. Instead of charging the true value of water to its 
customers, it is offering new 25 and 50 year contracts for water at a 
fraction of its true cost. Instead of reducing quantities to the amount 
that is actually available, the Bureau is rolling over unrealistic 
quantities from the 1940s and 1950s. Instead of requiring efficiency 
and reasonable use of water, the Bureau is proposing to provide water 
to water rights holders and other prior rights holders at virtually no 
cost and with no conservation requirements.
    Fundamentally, the Bureau of Reclamation's position regarding the 
renewal of expiring Central Valley Project contracts is decreasing 
water supply reliability by promising more water than it knows it can 
deliver, by charging prices that encourage water wasting and by failing 
to require conservation efforts.

Recommendations
    So how should we move forward to improve water supply reliability? 
NRDC recommends that any water supply program be consistent with the 
principles presented above. We support federal funding and believe that 
there is an important role for federal agencies to play in implementing 
a wide range of tools with dramatic potential water supply reliability 
benefits. These tools include:
     Agricultural water conservation
     Urban water conservation
     Voluntary water transfers
     Conjunctive use
     Cleaning up contaminated groundwater basins
     Dry-year land fallowing
     Permanent retirement of drainage-impaired agricultural 
land
     Urban water recycling
     Desalination
    CALFED's own economic analysis reveals that these approaches are 
all less expensive than destructive new surface storage projects. They 
are also far less controversial, potentially less environmentally 
damaging and far more likely to produce benefits in the short run. This 
is why the CALFED plan sets the stage for an ambitious, multi-
disciplinary strategy, including these tools, to help California meet 
its current water needs. These recommendations are discussed at length 
in the environmental community's Blueprint for an Environmentally and 
Economically Sound CALFED Water Supply Reliability Program. We have 
provided your office with a copy of this document.
    We firmly believe that it is possible to develop broadly-supported 
federal legislation that will improve water supply reliability, as well 
as ecosystem health and water quality. Neither H.R. 1985 nor S.976 will 
achieve this goal. We believe that new language being prepared by 
Congressman Miller and Senator Boxer may come closer to this goal of 
balanced implementation. Unfortunately, some water users appear to see 
this moment as an opportunity to rewrite the CALFED deal and to 
advantage themselves at the expense of the environment, urban and other 
agricultural water users. We believe that this effort will be 
unsuccessful. The result, we fear, could be gridlock in Washington and 
in Sacramento, reduced funding levels, decreasing confidence that 
cooperative ventures such as CALFED can produce results, decreased 
state and federal leadership, missed opportunities, litigation and, 
most importantly, declining water supply reliability, water quality and 
ecosystem health.
    In a time of constrained state and federal budgets, it is essential 
that public investment in water issues be designed for maximum benefit. 
The stakes are too high to squander resources on ineffective, unwise 
projects. The CALFED plan is far from perfect. However, our choice 
today is a simple one, join together to implement this program in a 
balanced manner or throw away six years of work, return to the water 
wars and gridlock of a decade ago, wait for a drought, and pray.
    We appreciate this opportunity to speak with you. NRDC looks 
forward to working with you to craft legislation that will meet the 
needs of California's environment and economy.

Attachments:
     Summary of concerns regarding H.R. 1985
     Summary of NRDC's economic analysis of proposed surface 
storage facilities and financing
                                 ______
                                 
 SUMMARY OF CONCERNS REGARDING THE WESTERN WATER ENHANCEMENT SECURITY 
                                  ACT

                             JUNE 18, 2001

    Congressman Ken Calvert has introduced legislation regarding 
California water issues. NRDC supports federal legislation to help 
restore the San Francisco Bay-Delta environment, to improve water 
quality and improve California's water supply reliability. However, 
NRDC opposes this bill due to the following concerns. As currently 
written, the legislation would:
    Authorize Environmentally and Economically Unjustified Surface 
Storage Projects: The bill would authorize new and expanded dams that 
could further damage an already overtapped San Francisco Bay-Delta 
ecosystem, endangered species such as the winter run Chinook salmon and 
valuable commercial and recreational fisheries. The total amount of 
storage contemplated by the bill is roughly equal to the capacity of 
Lake Shasta, the state's largest reservoir.
    Provide Unprecedented Authority to the Department of the Interior 
to Construct New and Expanded Dams: The bill would provide the 
Department of Interior with unprecedented authority to authorize 
projects in California's vast Central Valley. Projects would be 
authorized if Congressional committees fail to reject, within 60 days, 
a report on proposed projects from the Department of Interior. These 
projects would not receive any review from the full House or Senate. 
The bill would also give the Secretary authority to authorize projects 
that CALFED has rejected, such as the Peripheral Canal and Auburn Dam.
    Mandate Agribusiness Water Delivery Levels at the Expense of 
Critical Needs: The bill would make the delivery of subsidized water 
for a small group of Central Valley agricultural contractors the 
highest federal priority in California. Such guarantees are 
unprecedented and dangerous. This language would override other CALFED 
programs and create many problems, potentially including:
     Undermining State Law and Other Water Users: The bill 
would appear to create a legal entitlement which Westlands could use in 
existing and likely future litigation to attack other water users 
(EBMUD, Friant, Sac Valley, etc.).
     Undermining Environmental Protections: Perhaps the most 
likely short-term outcome of this provision would be to force DOI to 
try to roll back environmental protections under the Clean Water Act, 
the ESA or the CVPIA.
     Prohibiting Purchases: The bill could prevent the 
Environmental Water Account from purchasing water, which has provided 
approximately half of the water for the EWA.
     Require development of new supplies: The bill would 
essentially give CVP contractors ``first call'' on all storage and on 
all water supply reliability funding through CALFED until they had 
achieved clear reliability at this mandated level.
    The bill would turn the CALFED program into a permanent mitigation 
fund for water users: The bill would require the CALFED ecosystem 
restoration program to offset all impacts from Endangered Species Act 
protections on all water rights holders in most of California. This 
provision could also be read to require CALFED to pay all ESA-related 
water costs from future water development in the entire Bay-Delta 
solution area, forever.
    The bill interferes with ecosystem restoration: The bill would 
prohibit federal OR State land purchases for ecosystem restoration 
until a management plan is adopted. The bill could prohibit all state 
and federal CALFED ecosystem land acquisition to be halted permanently 
if, for any reason, this plan not be adopted by January 1, 2003. The 
bill also creates a new undefined mitigation responsibility for 
``cumulative impact on the local government and communities'' from all 
CALFED land acquisitions. Finally, the bill requires the CALFED 
ecosystem program to meet ``coequal objectives of achieving local 
economic and social goals and to implement the ecosystem restoration 
goals in the record of decision.'' (section 102(g). These provisions 
are poorly defined and would create new obstacles and legal liabilities 
for the ecosystem restoration program.
    Abandon the CALFED Process. The joint state-federal CALFED Bay-
Delta Program has prepared an ambitious, if imperfect, plan regarding 
water supply, water quality and aquatic ecosystem restoration. However, 
the bill would abandon the CALFED plan and return California to the old 
approach of asking taxpayers to pay for destructive water projects to 
deliver subsidized water to agricultural users. The bill would overturn 
or ignore CALFED requirements regarding:
     ``Beneficiary Pays : The CALFED plan requires new surface 
storage to be paid for by users, not taxpayers.
     Ecosystem Funding: The CALFED plan requires $150 million 
per year in ecosystem restoration funding (from state, federal and 
local sources.) The bill would steer scarce federal resources into new 
surface storage projects.
     Water User Fees: The CALFED plan requires $35 million per 
year in new water user fees to help pay for the CALFED program. User 
fees are not discussed in the bill.
     Analysis Before Decisions: The CALFED plan includes 
timelines for evaluating new storage facilities before Congress would 
vote to authorize individual projects. The bill would authorize 
projects without analyzing costs, benefits, financing and environmental 
impacts.
     Management of Any New Facilities. The CALFED plan 
includes requirements for the operation of any new storage facilities 
(such as providing flows for fish restoration), to assure balanced 
projects. The bill abandons this approach in favor of a legislative 
guarantee of water deliveries for a small segment of the agricultural 
community, at the expense of other water users and the environment.
     Implementing Current Law: The CALFED plan includes 
decisions regarding the implementation of the Endangered Species Act 
and the Central Valley Project Improvement Act, signed in 1992 by 
President Bush. Implementation of these laws could be required to be 
revisited if they interfered with the water delivery mandate.
     Balance: The CALFED plan includes interconnected programs 
designed to assure progress on water supply reliability, water quality 
and ecosystem restoration. The bill would abandon this approach and 
fail to serve the California environment or its economy.
    The Path to Success: California's recent experience with passing $4 
billion in parks and water bonds suggests a workable Congressional 
strategy. In 1998, the California legislature considered and rejected a 
water bond that featured expensive and controversial dam projects. At 
the end of 1999, the legislature refused to make this mistake again. It 
stripped out controversial provisions and passed a water bond with 
broad support. The resulting bonds were passed by a 2/3 vote of the 
public, with strong urban, agricultural and environmental support. A 
similar congressional strategy would lead to a bill with real 
environmental, water supply and water quality benefits.
                                 ______
                                 
Summary of the Conclusions of Natural Resource Associates' Analysis of 
         Proposed New Surface Storage Facilities and Financing

                             MARCH 30, 2001

    This analysis investigated the cost of proposed new surface storage 
facilities under evaluation by the CALFED Bay-Delta program and their 
cost-effectiveness for providing water supply for Central Valley 
agriculture. To assure its credibility, this analysis was prepared in 
consultation with CALFED staff. The analysis has produced several 
important results.
    CALFED Overestimated Potential Yield from New Surface Storage: This 
analysis revealed that CALFED's analysis significantly overstated the 
potential water supply from new and expanded dams. Specifically, the 
CALFED analysis failed to consider the impact of groundwater, land 
retirement and other programs on the demand for and yield of water from 
these projects. Given ongoing efforts to improve groundwater management 
and calls from the Westlands Water District to retire 200,000 acres of 
farmland from that district, these impacts are certain to be 
significant. This new analysis suggests that, CALFED overestimated 
potential yields as indicated below.

[GRAPHIC] [TIFF OMITTED] T3149.036

    Even These Revised Yield Estimates are Unrealistically High: The 
revised estimates in this analysis are likely to be optimistic 
regarding potential yield from these facilities, because neither CALFED 
nor this analysis have yet incorporated the needs of the environment. 
Protecting the Sacramento River, the Bay-Delta and natural resources 
such as the endangered winter run Chinook salmon would require 
restrictions such as limiting the filling of any new storage. Further 
analysis will certainly show that, unless these facilities ignore the 
needs of the environment and the requirements of the Endangered Species 
Act, actual water yields would be significantly lower than indicated 
here.
    Water from New Surface Storage is Too Expensive for Agriculture: 
This analysis reveals that Central Valley agricultural interests are 
unable to pay the cost of water from these proposed facilities. For 
example, the Westlands Water District, the agricultural district in the 
Central Valley most vocal about its need for more water, now pays $58 
to $68 per acre-foot for water from the
    Central Valley Project. Water from new surface storage, however, 
would cost $207 to $1,064 per acre-foot--far more than this water would 
be worth to farmers. These cost estimates are almost certainly too low, 
because this analysis has not yet considered likely cost overruns or 
the needs of the environment.

[GRAPHIC] [TIFF OMITTED] T3149.037

    Total Possible Subsidies: The Westlands Water District alone would 
be willing to take the entire yield of new proposed facilities. 
Westlands and other agricultural interests have requested that they 
receive water from these facilities at current water rates. If this 
request were granted and if Sites Reservoir were constructed and 
operated to deliver 242,000 acre-feet of water annually to the 
Westlands Water District, it could result in a subsidy of nearly $100 
million per year. This is an unlikely outcome, but, this estimate 
provides a sense of the scope of potential new subsidies.
    These Cost Estimates Raise Questions about the Willingness of Urban 
Water Users to Pay for These Facilities: Although urban willingness to 
pay for new surface storage was not the focus of this analysis, these 
new cost estimates raise serious questions about the willingness of 
urban water agencies to pay for new surface storage, given the 
availability of less expensive options (such as conservation, 
reclamation, water transfers and even desalination).
    Background: Central Valley agricultural interests have led the 
charge for the construction of new and expanded dams to divert more 
water from California's already overtapped rivers. Water subsidies have 
long encouraged inefficient and excessive water use. Further subsidized 
water projects could harm threatened ecosystems and salmon runs. The 
CALFED plan requires that any future surface storage projects be paid 
for by water users, not taxpayers. However, CALFED has not prepared 
specific proposals regarding the operation or financing of the new 
facilities it is evaluating.
    Recommendations: As a result of this analysis, NRDC recommends that 
the CALFED program:
     Re-estimate the water supply benefits of proposed new and 
expanded dams.
     Revise its economic analysis regarding the cost-
effectiveness of water supply tools.
     Increase the role of economics as a key tool to avoid 
unjustified projects and to develop meaningful water supply reliability 
goals.
     Prepare draft operation plans for proposed new surface 
storage facilities to protect natural resources.
     Prepare specific draft financing plans for proposed new 
facilities, identifying beneficiaries, willingness to pay, and 
implementing the CALFED ``beneficiary pays'' principle.
    Finally, we recommend that the CALFED program wait for full 
analyses to be completed prior to making decisions regarding the 
justification for any individual new surface storage facility.
                                 ______
                                 
 CONFLICTS BETWEEN THE WESTERN WATER ENHANCEMENT SECURITY ACT AND THE 
                       CALFED RECORD OF DECISION

                             JUNE 18, 2001

    The bill conflicts with the state-federal partnership that is 
essential to the success of CALFED.
    The CALFED ROD is binding on both state and federal agencies. The 
bill would fundamentally alter the ROD in a number of respects. These 
changes would bind federal agencies. However, California agencies would 
continue to be bound by the ROD. If the bill were to be enacted, state 
and federal agencies would be working to implement different and, in 
some respects, conflicting programs. This would necessarily create 
conflicts between state and federal agencies regarding funding, 
findings regarding balanced implementation, as well as individual 
projects. At its heart, CALFED is a cooperative arrangement between 
state and federal agencies. By legislatively altering the ROD and 
commitments made by federal agencies, the bill would undermine this 
partnership.
    The bill would undermine the CALFED ROD regarding surface storage.
    The bill would eliminate congressional oversight and prematurely 
and inappropriately authorize dam projects, in conflict with the ROD: 
The CALFED ROD states that once extensive required evaluations are 
completed and if specified criteria are satisfied, it could be 
appropriate to seek authorization for expanded Shasta and Los Vaqueros 
reservoirs at the end of 2004 (ROD, p. 44-45). Thus, the ROD reflects 
Congress' traditional requirement that the Bureau of Reclamation 
provide such analyses (operations plans, financing plans, environmental 
documentation, etc.) before Congress votes to authorize construction. 
In contrast, the bill would require the Secretary of the Interior to 
submit a report regarding specified projects to two committees. If 
those reports were not rejected by both committees within 60 days--a 
nearly impossible timeline, given the congressional calendar--projects 
would be automatically authorized (Sec105(c)( 4)). Of course, Congress 
always has the ability to withdraw authorization from a project. The 
bill would essentially provide full authorization to construct 
projects, contingent only on the submittal of a report to Congress. The 
bill also eliminates any role for the Senate Committee on Environment 
and Public Works.
    The bill would authorize projects that the CALFED ROD does not find 
worthy of authorization: The CALFED ROD states that Site Reservoir and 
San Joaquin River storage should be studied. However, both of these 
projects are very conceptual and existing information regarding both 
suggest that they are infeasible. Indeed for the San Joaquin River, 
CALFED has not even selected a site for a possible project. Given the 
problems facing these projects and their highly preliminary nature, the 
ROD does not even discuss dates for possible Congressional 
authorization (p. 45). In contrast, the bill would authorize both of 
these projects, subject only to the submission of a report to Congress 
(Sec105(c)( 4)).
    The bill would give the Secretary unprecedented authority to 
authorize projects not included in, or even rejected by, the CALFED 
ROD: The CALFED program considered and rejected facilities such as 
Auburn Dam and the Peripheral Canal. However, the bill would provide 
the Secretary with authority to authorize for construction these or 
nearly any other facility in the CALFED solution area (Sec. 
105((b)(1)). The Secretary is directed to submit reports to authorize 
projects on behalf of the governance board and in ``cooperation'' with 
the State of California. However, the governance board has not been 
created, nor has the process by which this board would make decisions 
been determined. Therefore, the bill would impose little practical 
constrain on the Secretary's ability to authorize virtually any project 
in the CALFED solution area, even projects explicitly rejected by 
CALFED.
    The bill would require CALFED to pursue projects even if they are 
determined not to be viable: The CALFED ROD calls for careful 
evaluation of proposed storage projects prior to determining if they 
are viable and worthy of submission to Congress for authorization. Of 
course, should individual projects be determined to be not viable, 
CALFED would conclude its analysis. However, the bill would require 
CALFED to continue evaluations for facilities even if they are 
determined not to be viable. For example, if CALFED determined that one 
of the listed projects is not economically viable, the draft would 
still require the preparation and submission to Congress of full, final 
environmental impact studies.
    The bill would change the CALFED timeline: The bill shortens the 
timeline for surface storage investigations in the San Joaquin Basin. 
The CALFED ROD does not include a construction date for these projects, 
because they are currently so speculative and expensive. The ROD does 
call for initial evaluations to be completed by the middle of 2006. The 
bill requires a full report (final EIS, etc.) to be submitted to 
Congress by January 2005.
    The bill conflicts with CALFED commitments regarding the operation 
of storage.
    The bill contains no safeguards that any new surface storage would 
be operated as described in the ROD. Indeed, the operational goals 
envisioned by CALFED conflict with the historic CVP operation and 
current CVP contracts. The CALFED ROD indicates that new surface 
storage would only be constructed if it would have broad benefits. 
CALFED has explicitly rejected the Central Valley Project's historic 
primary operational goal of maximizing yield. Instead, CALFED is 
investigating the potential for storage to create ``much needed 
flexibility in the system to improve water quality and support fish 
restoration efforts'' (ROD, p. 42). However, the bill fails to 
implement this new direction. It is likely that new federal 
construction funds would be directed to the Bureau of Reclamation. Such 
funds would likely to be used to construct facilities such as expanding 
the Central Valley Project's Shasta Dam. The Central Valley Project 
(CVP) is already overcommitted. Specifically, the project is unable to 
deliver full contract amounts for all CVP contractors. The Department's 
position regarding the renewal of CVP contracts would continue to 
commit to unrealistically high water delivery levels. If Shasta Dam 
were raised, or if other facilities were constructed through the Bureau 
of Reclamation, it is highly likely that these facilities would be 
operated as are current facilities. For example, 90 percent of the 
water from the CVP is delivered to agricultural contractors at 
subsidized rates. The CVP delivery assurances raise this probability to 
a near certainty. Such an operation for new storage facilities would 
not be consistent with the CALFED ROD, however, the bill fails to 
require the operation of new storage facilities to be different from 
the status quo in the CVP.
    The bill conflicts with the CALFED beneficiary pays financing 
requirements for surface storage.
    Current CVP operations present obstacles to a beneficiary pays 
program: The ROD discussion of surface storage requires that ``final 
cost allocations, however, will be based on the principle of 
``beneficiaries pay '' (ROD, p. 47). There is, however, no 
beneficiaries pay requirement in the bill regarding CALFED 
implementation. In fact, the Bureau's current interpretation of 
reclamation law does not permit them to charge interest to CVP 
agricultural service contractors. Additional language would be 
necessary to implement the CALFED beneficiaries pay principle.
    The CALFED program has not completed cost allocations for surface 
storage: Repayment of principal and interest is only one facet of a 
credible beneficiary pays financing program. Equally important is the 
cost allocation process, by which total project costs are allocated to 
beneficiaries. Traditionally, a large percentage of the cost of water 
projects has been assigned, often without justification, to the public. 
Despite repeated requests, CALFED has not developed a credible basis 
for the required cost allocations for proposed facilities. The bill 
fails to require a credible cost allocation process.
    CVP agricultural and even urban water contractors have paid only 
pennies on each taxpayer dollar invested in the CVP. CALFED has clearly 
rejected this subsidized approach to water development. The bill, 
however, fails to implement the new direction required by CALFED. A 
beneficiary pays financing program is essential to assure that the 
CALFED water supply program does not encourage inefficient water use 
and environmentally and economically unsound projects.
    The bill would provide CVP growers with assurances that would 
undermine the CALFED plan, ecosystem restoration, and other water users 
and increase pressure for subsidies.
    The CALFED ROD states that CALFED agencies ``expect'' the program 
to result in 65 to 70 percent deliveries in average years. On the other 
hand, the bill would guarantee 70 percent deliveries in years within 5 
percent of normal (Sec. 103(a)(3)). Thus, the bill directly undermines 
one of the most carefully written sections of the ROD. It would provide 
a legal guarantee that was rejected by CALFED agencies. It would also 
redefine the definition of a normal water year and increase the 
required level of delivery. The bill does not discuss what would happen 
if the CVP were unable to meet the mandated delivery level. Several 
outcomes are possible.
     Undermining State Law and Other Water Users: Despite some 
revisions to previous drafts, the language would appear to create a 
legal entitlement which Westlands could use in existing and likely 
future litigation to attack many other water users (EBMUD, Friant, Sac 
Valley, etc.) In this way, despite the language in section 102(h), the 
bill appears to interfere with state water law.
     Undermining Environmental Protections: Perhaps the most 
likely short-term outcome of this provision would be to force DOI to 
try to roll back environmental protections under the Clean Water Act, 
the ESA or the CVPIA.
     Prohibiting Purchases: The bill requires that CVP 
deliveries be maintained without ``reducing deliveries'' to other 
users. Because voluntary transfers result in reduced deliveries, the 
draft could be read to prohibit South of Delta transfers to maintain 
CVP delivery levels. This provision could prevent the EWA from using 
water purchases, which have provided approximately half of the water 
for the Environmental Water Account.
     Require development of new supplies: The bill would 
essentially give CVP contractors ``first call'' on all storage and on 
all water supply reliability funding through CALFED until they had 
achieved clear reliability at this mandated level. If the bill resulted 
in a requirement that deliveries be maintained at current costs, it 
would violate the ``beneficiary pays'' requirement of CALFED. The bill 
would force water supply funding and CALFED tools to be designed to 
benefit CVP agricultural service contractors, at the expense of other 
water users and other CALFED programs.
    At a minimum, this provision would result in years of litigation 
and an ongoing, and worsening problem. Westlands' CVP contract expires 
in 2008. This provision, however, would be permanent. It would create 
an enormous obstacle to negotiating a realistic contract total. This 
problem would become worse over time as areas of origin increase their 
demand, thereby reducing Delta supplies. This language could be read as 
creating a permanent federal ``export'' right conflicting with state 
``area of origin'' rights.
    The bill redefines the Environmental Water Account.
    The bill would narrow the focus of the EWA: The definition of the 
EWA focuses exclusively on ESA compliance (Sec.4(8)) and excludes the 
requirement in the ROD that ROD the EWA also contribute to broader 
ecosystem restoration (p. 4). The bill also requires first priority in 
managing the EWA to be given to meeting assurances in the ROD (Sec. 
103(b)(2)). This provision also establishes ecosystem restoration as a 
secondary priority. This open ended language could be interpreted as 
guaranteeing water users first call on EWA water, even when there is no 
corresponding reduction in Delta pumping as described in the ROD.
    The bill would eliminate the ``tier 3 water'' required by the ROD: 
The bill would establish the maximum legal exposure of water users, in 
case of a failure of the EWA (Sec. 103(b)(2). This definition excludes 
``tier 3'' water which the ROD indicates may be required under some 
circumstances.
    The bill is inconsistent with the ROD with regard to increased 
pumping from the Delta: The ROD clearly indicates that the impacts of 
proposed increases in State Pumping are not ``covered'' by the EWA (p. 
49). The bill could be read to violate the ROD by requiring the EWA and 
the ERP to ``maximize the water supply benefits to be provided by the 
increased pumping capacity'' (Sec. 103(a)(4)(B)). The impacts of this 
increase should be addressed through mitigation in a new operations 
plan required by the ROD. They should not be addressed by using the EWA 
and the ERP as a mitigation fund for increases in Banks pumping.
    The bill would turn the EWA and the Ecosystem Restoration Program 
(ERP) into a permanent mitigation fund for water users throughout 
nearly the entire state.
    The bill would require the EWA and the ERP to be used to offset all 
impacts from ESA protections on all water rights holders in the Bay-
Delta solution area. This provision would insulate most California 
water users from ESA actions related to water allocations, even those 
having nothing to do with the Bay-Delta. It could also be read to 
require CALFED to pay all ESA-related water costs from future water 
development in the entire Bay-Delta solution area, forever. The lack of 
a clearly defined baseline (an issue carefully addressed in the ROD) 
would likely result in significant legal uncertainty.
    The bill interferes with ecosystem restoration.
    The bill blocks land acquisition: The bill would prohibit federal 
OR State land purchases for ecosystem restoration until a management 
plan is adopted (Sec. 103(c)). The bill could override state 
initiatives through CALFED program and halt essential ecosystem 
restoration efforts. In addition, the bill would require all state and 
federal CALFED ecosystem land acquisition efforts to be halted 
permanently if, for any reason, this plan not be adopted by January 1, 
2003.
    The bill creates a new mitigation responsibility: The bill requires 
mitigation for ``cumulative impact on the local government and 
communities'' from all CALFED land acquisitions. These impacts are not 
defined, nor is mitigation. This provision would create a new open-
ended mitigation obligation that could be a significant obstacle to 
ecosystem restoration and a significant legal liability for CALFED 
(Sec. 102(f)).
    The bill redefines the CALFED program. The bill would require 
CALFED to develop partnerships with ``landowners and local 
governments'' to meet ``coequal objectives of achieving local economic 
and social goals and to implement the ecosystem restoration goals in 
the record of decision.'' (section 102(g). This provision would 
redefine the purpose of any CALFED ecosystem restoration project that 
required land acquisition. Such ``local economic and social goals'' are 
undefined and have never been discussed in the CALFED program. This 
requirement could hamstring the ecosystem restoration program.
    The bill limits ecosystem funding: The bill requires ``equal 
funding'' for yield improvements and environmental benefits in 2002 
(Sec. 101(b)(2)). This requirement ignores the fact that some 
``ecosystem'' funding provides direct water user benefits (e.g. fish 
screens). Such a requirement could reduce funding for ecosystem 
restoration and interfere with a balanced program. It could also reduce 
funding for the Environmental Water Account, which could effectively 
terminate CALFED's efforts to reduce the impacts of the Endangered 
Species Act on water users.
    The bill would give water users first priority in allocating 
Ecosystem Restoration Program assets. The bill would establish the 
delivery of water to CVP and SWP contractors as the first priority of 
the Ecosystem Restoration Program (Sec. 103(b)(2)). This provision, 
which is discussed above, would turn the EWA and the Ecosystem 
Restoration Program into a mitigation fund for existing and future 
water development.
    The bill would interfere with balanced funding of the CALFED 
program.
    The specificity in the bill regarding the storage and deliver 
assurances would establish these as the de facto priorities for federal 
funding. There are no comparable requirements for any other section of 
the CALFED program. The likely result is that funding for other CALFED 
programs (e.g. water use efficiency, ecosystem restoration, water 
quality) would receive lower priority in the appropriation process.
    The bill does not clarify the relationship between the Small 
Reclamation Projects (Title II) and the CALFED program.
    Would the Small Reclamation Projects be consistent with the CALFED 
Ecosystem Restoration Program? The CALFED ROD requires water supply 
activities to be compatible with, indeed to further, the ecosystem 
restoration program. However, given the damaging impacts of much water 
development, projects funded through the Small Reclamation Projects 
could undermine the CALFED ecosystem restoration program.
    How would the Small Reclamation Projects be considered in the 
annual balancing determination process? The CALFED program requires an 
annual finding of balanced implementation. It is not clear, however, 
how the Small Reclamation Projects be considered in this finding.
    The bill does not clarify the scope of the Small Reclamation 
Projects. The bill does not provide clarity regarding the scope of the 
program. Is funding from this title intended to be for activities that 
are not eligible for CALFED funding? Could the Water Supply Program 
fund projects that CALFED has rejected as inappropriate?
    The bill contains a clear bias towards supply-side actions.
    The bill abandons CALFED's water supply reliability goal, which 
treats equally water management actions that would improve reliability 
through increasing supply or decreasing demand. The bill incorporates a 
``yield'' concept that CALFED rejected (Sec. 3(1), Sec. 4(14), Sec. 
104(b)(1)(A)) . This ``yield'' approach does not discuss, and may 
exclude, key reliability tools such as water transfers and land 
retirement.
    The bill would create guarantees that could allow water users to 
avoid repayment of loans.
    The bill would create loan guarantees that would allow water users 
to default on loans. This provision would defeat other sections of the 
bill that would require repayment of loans with interest (Sec. 
105(b)(2)). It would also violate the ``beneficiary pays'' provision of 
the ROD.
    The bill would fail to promote balanced implementation of the 
CALFED program.
    The bill would direct the Department of Interior to emphasize CVP 
deliveries and surface storage development, at the expense of other 
elements of the CALFED program. The bill fails to encourage the 
implementation of other key CALFED ROD requirements, including:
    Dedicated Ecosystem Restoration Funding: The ROD requires the 
establishment of new broad-based water user fees of at least $35 
million per year to support ecosystem restoration (ROD, page 38). The 
bill should provide that establishment of such a dedicated restoration 
funding is necessary for a federal finding of balanced implementation 
of the CALFED program. In addition, the bill should direct DOI, in 
concert with the state, to develop recommendations for a diverse set of 
funding mechanisms to ensure stability in funding for the restoration 
program over the long-term.
    Beneficiary Pays Financing Plans for Proposed Surface Storage: The 
ROD requires beneficiaries to pay the true costs of new surface storage 
facilities. The bill should require DOI to complete a financing plan 
reflecting CALFED's beneficiary pays requirement for each proposed 
surface storage facility. Such plans should be submitted at least one 
year prior to congressional consideration of any proposed facility 
(ROD, pages 45 and 47).
    Environmental Restoration Water: The ROD requires CALFED to acquire 
a minimum of 100,000 acre-feet of additional water per year to 
implement the ecosystem restoration program on upstream tributaries 
(ROD, page 36).
    Program Consistency: The bill fails to require all agencies 
receiving federal support to ensure that CALFED supported water 
projects constructed or operated in the Central Valley contribute to 
the CALFED ecosystem restoration program and do not undermine the 
achievement of the CALFED restoration objectives (ROD, page 43).
    Water Use Efficiency Funding: The bill fails to require DOI to 
submit to Congress, by July 2001, a detailed finance proposal, 
including local cost sharing, to assure that federal taxpayer 
investments in water use efficiency are cost-effective and provide 
near-term benefits for water users and ecosystem restoration (ROD, page 
62).
    Agricultural Water Use Efficiency Implementation: The bill fails to 
require the DOI to complete, by August 2001, specific milestones, 
associated benefits, remedies and consequences for the agricultural 
water use efficiency program (ROD, page 62).
    Delta Drinking Water Quality: The bill fails to require the EPA, in 
cooperation with the State, to establish a comprehensive drinking water 
policy for the Delta and upstream tributaries by the end of 2004 (ROD, 
page 67).
    Science: The bill fails to require DOI to develop and implement the 
science-based milestones, models, indicators, reports and programs 
described in the ROD (ROD, page 76). The bill does not provide 
dedicated funding to implement the science program or ensure that the 
scope of the science program includes review of all aspects of the 
CALFED program, not just the restoration element.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Mr. Diridon, you may begin.

 STATEMENT OF ROD DIRIDON, JR., COUNCIL MEMBER, CITY OF SANTA 
                       CLARA, CALIFORNIA

    Mr. Diridon. Mr. Chairman, Congresswoman Lofgren, thank you 
for the opportunity to speak with you today and to provide some 
testimony on Northern California's water security, 
opportunities, and challenges.
    My name is Rod Diridon, Jr., and I'm a City Council Member 
for the City of Santa Clara and Chairman of the Treatment Plant 
Advisory Committee for the jointly owned San Jose, Santa Clara 
Water Pollution Control Plan also know as WPCP. I also have the 
endorsement of San Jose Mayor Ron Gonzales for these comments.
    The City of Santa Clara has consistently supported the 
progress of CALFED which provides the most promising in 
resolving the problems in the Bay-Delta. My comments today will 
focus on the regions cooperative efforts to improve the water 
shed, protect endangered species, and provide a drought-proof 
water supply through an aggressive and successful recycled 
water program.
    The San Jose, Santa Clara WPCP is one of the nation's 
largest advanced watershed treatment plants serving 1.3 million 
residents and businesses in eight cities and the adjacent 
unincorporated county areas of the South Bay.
    In 1991 with assistance from the U.S. Bureau of Reclamation 
Santa Clara, San Jose, and other agencies involved with the 
Water Pollution and Control Plan designed and built a regional 
water recycling project, the largest of its kind in Northern 
California. It consist of over 60 miles of distribution 
pipeline, three pump stations, and a 4 million gallon 
reservoir.
    The initial impetus for constructing this system was to 
protect endangered species by avoiding the potential for salt 
marsh conversion at the watershed discharge point into the San 
Francisco Bay.
    Water recycling provides other environmental and economic 
benefits such as watershed protection and drought-proof water 
supplies. Although the plan is designed for capacity of up to 
167 million gallons per day, a trigger of only 120 million 
gallons a day was set by the state and Federal Governments in 
1990 to protect against potential marsh conversion.
    Phase 1 of the South Bay Water Recycling Program was 
completed at a cost of $140 million and became fully 
operational in 1998. This summer we expect to deliver an 
average of 10 million gallons a day with peak demand up to 15 
million gallons. The system has the potential to divert 50 to 
100 million gallons per day, depending on additional 
distribution pipelines and pumps.
    To ensure the economy of Silicon Valley can maximize its 
potential and contribute to state and national economies as 
well, we are fully engaged in expanding our commitment and 
reliance on this incredibly valuable resource.
    There are over 300 customers of the system currently, and 
more are added each quarter. The City of San Jose has been 
negotiating a cooperative agreement with Calpine/Bechtel in the 
event that the California Energy Commission approves an 
operating license this summer for the proposed 600 megawatt 
Metcalf Energy Center.
    This is a key element of the agreement and this is how to 
meet the power plant's need for an average of 3 million gallons 
of water per day. This will be recycled water when it comes on 
line in 2003.
    A 10-mile pipeline extension would be required to serve the 
power plant. If sized to supply other customers further south, 
the projected cost of $50 million would be required to 
implement this program.
    The water district, hence the City of San Jose, are 
beginning to negotiations to work out a partnership for funding 
and operation of this pipeline. We are proceeding with an $82 
million expansion of the South Bay Water Recycling Program 
expected to increase the system capacity, improve operational 
flexibility, and manage the treatment plants diversional 
requirements to 2006.
    South Bay Water Recycling could potentially be even further 
expanded and fully integrated into the overall water supply of 
Santa Clara County and play a strategic role in environmental 
protection, water use efficiency, and water supply reliability 
through 2020.
    Through all of these efforts by local cities, the Santa 
Clara Valley Water District, and other agencies, this region is 
becoming a leader in sustainable water use, integrating water 
supply and waste water discharge through innovations in water 
recycling and conservation.
    Federal financial support of recycled water through CALFED 
and other mechanisms cannot help Silicon Valley leverage local 
funding and realize its vision of water supply reliability, 
water use efficiency, and water protection. We ask for your 
help to reduce the projected deficit in local water supplies, 
meet the EPA mandate to protect endangered species, and ask for 
your continued funding.
    Mr. Chairman, thank you for providing us with the 
opportunity to address our progress and our concerns and we 
look forward to working with you and Senator Feinstein as both 
bills move through the process. Thank you.
    [The prepared statement of Mr. Diridon follows:]

Statement of Rod Diridon, Jr., Council Member, City of Santa Clara, and 
  Chairman, Treatment Plant Advisory Committee, San Jose/Santa Clara 
                     Water Pollution Control Plant

    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity to provide testimony on Northern California Water 
Security--Opportunities and Challenges. My name is Rod Diridon, Jr., 
and I am a Council Member from the City of Santa Clara and Chairman of 
the Treatment Plant Advisory Committee for the jointly-owned San Jose/
Santa Clara Water Pollution Control Plant. I also have the endorsement 
of San Jose Mayor Ron Gonzales.
    The City of Santa Clara has consistently supported the progress of 
CALFED which provides the most promise in resolving the problems in the 
Bay-Delta. We appreciate the opportunity to address the water recycling 
in our region, given the important role it can play in providing a more 
reliable water system in Silicon Valley.
    As you have heard in other testimony, securing additional high 
quality water supplies is of paramount importance. Instead of restating 
this concern, I will focus on the region's cooperative efforts to 
improve the watershed, protect endangered species, and provide a 
drought-proof water supply through an aggressive and successful 
recycled water program.
    The San Jose/Santa Clara Water Pollution Control Plant is one of 
the nation's largest advanced wastewater treatment plants. The regional 
plant serves 1.3 million residents and businesses of eight cities, and 
the adjacent unincorporated county areas in the South Bay. It is 
jointly owned by the cities of San Jose and Santa Clara, with 
representation of the tributary agencies provided through a Treatment 
Plant Advisory Committee (or TPAC).
    In 1991, with assistance from the U.S. Bureau of Reclamation, Santa 
Clara, San Jose and other agencies involved with the Water Pollution 
Control Plant designed and built a regional water recycling project, 
the largest of its kind in Northern California. It consists of over 
sixty miles of distribution pipeline, three pump stations, and a four 
million-gallon reservoir.
    Initial impetus for constructing the system was to protect 
endangered species by avoiding the potential for salt marsh conversion 
at the wastewater discharge point into San Francisco Bay. Water 
recycling provides other environmental and economic benefits--such as 
watershed protection and a drought-proof supply of water. Although the 
plant has a design capacity of 167 million gallons a day, a trigger of 
only 120 million gallons a day was set by state and federal governments 
in 1990 to protect against potential marsh conversion.
    Phase 1 of the South Bay Water Recycling Program was completed at a 
cost of $140 million and became fully operational in 1998. This summer 
we expect to deliver an average of 10 million gallons a day with peak 
demand up to 15 million gallons. The system has the potential to divert 
50 to 100 million gallons per day, depending on additional distribution 
pipelines and pumps.
    To ensure the economy of Silicon Valley can maximize its potential 
and contribute to state and national economies as well, we are fully 
engaged in expanding our commitment and reliance on this incredibly 
valuable resource:
     There are over 300 customers of the system currently, and 
more are added each quarter.
     The City of San Jose has been negotiating a cooperative 
agreement with Calpine/Bechtel in the event that the California Energy 
Commission approves an operating license this summer for the proposed 
600 megawatt Metcalf Energy Center. A key element of that agreement is 
how to meet the power plant's need for an average of 3 million gallons 
a day of recycled water when it comes on line in 2003. A 10-mile 
pipeline extension would be required to serve the power plant. If sized 
to supply other customers further south, the projected cost is $50 
million. The Water District and San Jose are beginning negotiations to 
work out a partnership for funding and operating this pipeline.
     We are proceeding with an $82 million expansion of the 
South Bay Water Recycling Program, expected to increase system 
capacity, improve operational flexibility, and manage the Treatment 
Plant's diversion requirements to 2006.
     South Bay Water Recycling could potentially be even 
further expanded and fully integrated into the overall water supply of 
Santa Clara County and play a strategic role in environmental 
protection, water use efficiency, and water supply reliability through 
2020.
    Through all of these efforts by local cities, the Santa Clara 
Valley Water District, and other agencies, this region is becoming a 
leader in sustainable water use, integrating water supply and 
wastewater discharge through innovations in water recycling and 
conservation.
    Federal financial support of water recycling through CALFED and 
other mechanisms can help Silicon Valley leverage local funding and 
realize its vision of water supply reliability, water use efficiency, 
and environmental protection. Otherwise, we may not meet our goals in 
helping reduce the projected deficit in local water supplies, and the 
EPA mandate to protect endangered species.
    Mr. Chairman, thank you for providing us with the opportunity to 
address our progress, and our concerns. We look forward to working with 
you and Senator Feinstein as both bills move through the process.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Couple of comments. I've heard people refer to both H.R. 
1985 and Senator Feinstein's bill as fast tracking or 
preauthorization of projects within CALFED. It's difficult to 
say fast track and Federal Government in the same sentence 
without losing half the audience.
    The reality of it is that we, I think, create a better 
process. At least that's in my mind's eye, to move toward 
potential development of those additional water storage 
projects.
    It certainly isn't fast track and it certainly does not 
stop for continued input into the development of those 
projects. Certainly it has to go through an ongoing 
authorization process and it has to go through an appropriation 
process which in itself is a difficult one at best. When people 
say that, I obviously disagree but, nevertheless, everyone 
certainly has the right to their own opinion.
    As far as the development of some of these additional 
storage projects, too, people must realize that it's not just 
storage for additional quantities of water, but it is also 
storage for flexibility and water quality. As I'm sure some of 
the people here at the table understand, that we also have the 
need for flexibility during periods of drought and also a 
better quality of water for various purposes.
    But to start off the question, Dr. Gleick, I used to be 
Chairman of the Energy Environment Committee so I spent many 
days and evenings going to hearings on global warming so I am 
somewhat familiar with the issue. I've read a number of papers. 
As a matter of fact, the last one that just came out regarding 
global warming and its effect on the snowpack in the High 
Sierras.
    Obviously, the snowpack is a storage vehicle in itself 
because it releases water as it melts and our existing water 
storage availability in California is somewhat dependent upon 
that type of activity.
    So if, in fact, you believe in global warming, then that 
changes the paradigm. It could possibly change that paradigm in 
that we could have less snow melt but more water flow. We're 
not quite sure based upon the studies I've read but that could 
happen.
    And the problem would be that we would be unable to trap 
water if, in fact, that occurs because we may have to release 
water because we don't have enough storage capability if, in 
fact, those kind of things occur.
    So as we look down the road, and I'm sure we'll be studying 
this as we do here, does that mean that we should have 
additional storage in California if, in fact, you follow that 
new paradigm. If, in fact, global warming is going to occur as 
some people say it is, and this will change the Sierra amount 
of storage that we are having in snowpack, what does that do to 
the existing paradigm of storage in California?
    Mr. Gleick. Thank you, Mr. Chairman. Your point is exactly 
right. Despite the many uncertainties about climate change, the 
thing in California that we are perhaps most certain of is that 
higher temperatures will mean dramatic changes in the snowpack, 
changes in the timing of runoff in California which, in turn, 
poses challenges for water management.
    Our snow runoff already poses challenges for our water 
management. And our system, the system of reservoirs, and the 
way we manage those reservoirs is designed based on the 
assumption that the future will look like the past and that is 
no longer the case.
    Will that mean a requirement for more storage is a question 
that we don't know the answer to yet. What is recommended in 
the National Assessment Water Report is that it's time to begin 
evaluating the way we manage the existing system.
    First of all, the existing system is managed in terms of 
timing of releases and filling for flood control and a water 
supply regime based on past climate. It's time to start looking 
at the way that system might operate if climate change becomes 
a reality, or as climate change becomes a reality.
    Let me give you one example. A study was done at Georgia 
Tech for the National Assessment looking at Folsom. Folsom, as 
you know, provides flood control for Sacramento and there's a 
great deal of concern now about the ability of Folsom to 
adequately provide protection.
    Under one of the scenarios of climate change, which is 
warmer and also wetter, if we operate Folsom the way it is 
currently operated, flood damages downstream go up enormously 
on the order of $220 million a year increase in flood damages.
    The study also looked at changing the way we operate 
Folsom. The results suggested that if we change the way we 
operate the system, not build a different size--
    Mr. Calvert. I read the same report. That indicates you 
have to have 100 percent depletion of the water within Folsom.
    Mr. Gleick. No, no, no. Not at all.
    Mr. Calvert. As I understood it, you have to dramatically 
lower the reservoir capacity in order to make sure you have 
enough capacity to capture snowmelt because without even 
additional levee construction downstream because Sacramento 
right now has about--it depends on who you talk to--anywhere 
from 70 to 80-year flood protection. You're saying you can go 
ahead and leave Folsom's existing level with the existing water 
commitments and contracts downstream without any modification 
and still provide for that kind of flood control?
    Mr. Gleick. Yes, that's correct. I'll be happy to send this 
study on to your office.
    Mr. Calvert. Send that over to me. I would love to see it.
    Mr. Gleick. The conclusion is that changing operations at 
any of our reservoirs may turn out to be much more effective 
than we think but we haven't done those studies yet. The first 
line of defense is to look at that. It's much cheaper to model 
the way we operate the system and figure out what we have to do 
than to try and build storage.
    Mr. Calvert. I think we agree that if, in fact, that we are 
going to have a change of climate for whatever reason, I mean, 
we could get into a debate of whether it's caused by humans or 
caused by a naturally occurring change in weather that we go 
through from time to time.
    If, in fact, we are going through a stage of global 
warming, that we probably ought to plan on that and have long-
term analysis of what kinds of effects both positive and 
negatives that can happen to our state as long-term planners we 
should look at that. That is the point I wanted to make.
    Mr. Nelson, I've been hearing this continuing criticism of 
fast tracking or preauthorizing projects. Which project did we 
preauthorize outside of the Record of Decision?
    Mr. Nelson. A host of projects. There are a number. The 
projects include Los Vaqueros.
    Mr. Calvert. When you say preauthorizing, are you saying 
that the state legislature and the U.S. House of 
Representatives, in fact, are preauthorizing the construction 
of these projects?
    How is that done in the aspect of you have to go out and 
get money and you still have to go through the environmental 
process and NEPA process in order to get the various 
permissions that are involved in developing any kind of water 
project or anything in the State of California.
    Mr. Nelson. If I could, I'll contrast the CALFED Program 
with what is in H.R. 1985.
    The CALFED Program very clearly laid out in the timeliness 
in the CALFED Record of Decision says that operational plans 
and financial analyses--economic analyses and a financing plan, 
environmental analyses would be completed before Congress was 
asked to approve construction. As you know, Congressman--
    Mr. Calvert. We're a long ways from approving construction. 
I mean if, in fact, we are successful in moving forward H.R. 
1985 and Senator Feinstein is successful in moving her 
legislation and we are successful in coming together with a 
conference, and if we are successful in getting the President 
of the United States to sign it, then we have to go through 
another process of looking at these projects that may or may 
not be developed, and then we need to come back to the United 
States House of Representatives, ask for an appropriation 
United States Senate, ask for an appropriation, go back to 
Congress, ask for an appropriation, have the President of the 
United States agree to it.
    Now, you know, if there isn't enough checks and balances in 
that. I tell my friends that and they say, ``What kind of 
preauthorization is that?'' If I had the power to preauthorize 
and preappropriate things, I would like to do it but I don't. A 
legislative process is a slow and cumbersome one at best.
    I would attest to you, sir, that there is nothing that is 
going to be built without plenty of time and opportunity for 
our various friends in the environmental community to have a 
lot of input if, in fact, these projects are built.
    I think perceptually we are trying to create some balance 
here and that we need to move the process forward in a more 
balanced and equitable way but we may have a difference of 
opinion there. Certainly we are not preauthorizing anything.
    Mr. Nelson. I'm a little confused, Congressman. As I read 
your bill, it would eliminate a vote of full Congress to 
authorize construction.
    Mr. Calvert. We certainly streamlined the process but there 
is plenty of time for various groups and organizations to stay 
involved in the process to the point of appropriation of actual 
development of a project.
    Mr. Nelson. Our concern, though, is precisely the one you 
mentioned, and that is if appropriations become the primary 
venue for discussion of facilities, we are very concerned with 
regard to facing what we saw with Auburn Dam last week and that 
is the necessity for a floor fight in the House of 
Representatives regarding a facility that we believe, most 
believe, the City of Sacramento and a variety of other folks 
believe is simply not necessary. The Corps of Engineers as 
well.
    Mr. Calvert. Obviously that didn't happen so I would attest 
we are going to try to move a bill that is balanced and working 
with everyone. As you well know, we've had discussions with, I 
think, everyone in this room I've talked to on one occasion or 
another. Controversies around water are very well known in the 
state and, by the way, in the western United States that we are 
trying to deal with in a reasonable way, I think.
    Ms. Lofgren.
    Ms. Lofgren. Yes. This has been a very helpful discussion 
to understand where the disagreements are and even potential 
points of agreement in how we might move forward. I'm one of 
the co-founders of the Climate Change Caucus in the House of 
Representatives which is a bipartisan group that meets on a 
regular basis looking at the science of climate change and the 
implications for our country and our planet.
    I think it is quite clear that we are well along in the 
climate change scenario and no matter what we do, it cannot be 
averted even. If we did everything right in terms of our 
emissions policies, which we probably will not do, we are up 
for several decades before we could effect--at the best before 
we could effect that curve.
    One of the questions I have, and I don't have the answer, 
and maybe I could ask Dr.--is it Gleick?
    Mr. Gleick. Gleick.
    Ms. Lofgren. We don't know what the implications will be 
because the analysis of the climate is so incredibly complex 
you can't make sure predictions. One of the issues that we 
discussed today is the snowpack issue.
    Clearly if temperatures rise snowpacks will fall but there 
is no guarantee that the rainfall for this region would also be 
impacted.
    At least some of the scenarios show a rather important 
decrease in rainfall over all and precipitation over all. 
That's not to say that those analyses are correct.
    I notice in your written testimony, as well as Mr. 
Nelson's, and I think the prior panel, there was discussion of 
desalinization as an option for California. I'm interested in 
your comments in two ways. First, in looking at this, and 
Congressman Drew Cunningham is someone who spent a lot of time 
on this issue from Southern California. He and I have often 
discussed that the impediment seems to be, first, sufficient 
inexpensive and reliable energy to make that a viable option.
    I have a question. How do we put that into the equation? 
Certainly our infrastructure is not set up for that option. If 
you have a comment on the infrastructure and delivery 
implications for desalination being a portion of our solution 
if you could address that.
    Mr. Gleick. I would be happy to. Desalinization is a well 
understood technology. Probably 1 percent of the world's 
drinking water supply actually now is desalinated in one form 
or another, mostly in areas that are extremely water short and 
extremely energy rich. The Persian Gulf in particular.
    Desalination, I think, is unlikely to play a significant 
role in California's future for quite a while for two reasons. 
One is it is still very expensive. It is still twice as 
expensive as what the average urban residential homeowner pays.
    In fact, the experiment that Santa Barbara went through in 
building a desalination plant was quite informative. They built 
a desalination plant during the last drought. The water from 
that plant was so expensive that local homeowners turned to 
conservation and were extremely effective at reducing their 
water use. That plant is now shut down. It's mothballed.
    Desalination has become cheaper since then and there are 
some opportunities to reduce the cost further. I think it will 
never be--
    Ms. Lofgren. Never say never.
    Mr. Gleick. Never say never.
    Ms. Lofgren. We've got our fusion bill coming online.
    Mr. Gleick. For a long time it's not going to be cheaper 
than other options available to us. Water use efficiency 
improvements are enormously more cost effective. I might go so 
far as to say it will never be cheap enough for agricultural 
use.
    It may be cheap enough for very high-valued industrial use 
at the coast but the minute you have to move it anywhere, the 
costs go even higher. Small uses perhaps. Santa Barbara is 
exploring the possibility--I'm sorry, San Diego is exploring 
the possibility of building a plant but I don't think it will 
be a big contributor to California's water supply.
    Ms. Lofgren. If I could, one of the criticisms that you 
made, Mr. Nelson, in your written testimony was your belief 
that the bill that Mr. Calvert has introduced advantages the 
Central Valley farmers to the detriment of other water users. 
Could you explain your thinking on that so I understand it?
    Mr. Nelson. I would be happy to. There are actually two 
ways in which that would take place. The Santa Clara Water 
District is a contractor of the Central Valley project, as are 
Central Valley agricultural interests. The bill establishes 
guaranteed level of delivery for the Westlands Water District 
for agricultural use in the Central Valley.
    As I read the bill, it sets up certainly the possibility 
that some of the water that would be necessarily provided to 
Central Valley agriculture could come out of water supplies 
that would be demanded by East Bay MUD, by Santa Clara Valley, 
by a number of other water users.
    The second way in which it could affect water users here in 
Silicon Valley is with regard to what is called the 
environmental water account set up as an insurance policy to 
allow protection of the Delta to take place without affecting 
south of Delta water users. A real win/win. It is a program 
that we support if we can make sure that it works properly.
    H.R. 1985 would expand that program, we think, to the 
breaking point. Expanding it so it would be designed to benefit 
folks in other parts of the state who the program simply wasn't 
designed to benefit.
    If that were to take place, we believe the environmental 
water account wouldn't work. Those protections would fall apart 
and we would probably see litigation and what we have seen in 
the past which is less predictable water supplies out of the 
Delta for Santa Clara County and other folks as well.
    Mr. Calvert. Obviously I disagree with that, Mr. Nelson. We 
don't tough the 800,000 acre-feet in the primary environmental 
account, nor do we want to move ahead with a separate 
environmental account on water.
    And we're talking about 70 percent of normal year guarantee 
on water which was outlined in the agreement with Secretary 
Babbitt and Mr. Hayes prior to their departure, and Governor 
Davis. Obviously these are issues that we continue to work on 
and are very emotional throughout the State of California 
certainly to the farming industry.
    But I think certainly farming is an important industry in 
the state as we have heard from various testimony. They have 
done probably more in the last few years to move toward 
conserving water and using water in a better way than they have 
in the last 50 years. I think we ought to work toward a 
solution to this problem.
    I think if we work, I obviously believe, with creating more 
water supply, we'll have more water for the environment and 
still be able to maintain a viable agriculture industry in the 
State of California.
    On the desalination issue, because I've been kind of 
following this thing a little bit, and I agree with you. I 
think desalination is probably way off because of its 
utilization of water until we get a cheap energy source. 
Congresswoman Lofgren and I have worked together on fusion and 
other science issues in the past and will continue to do so.
    By the way, there are several areas, the City of Carson and 
the City of Long Beach, primarily preheated water that is 
coming out of the power utilization that they could bring the 
cost down of desalination. There are some new technologies. 
Some people believe we could do it between $700 and $800 an 
acre-foot. I find that somewhat dubious but, nevertheless, we 
are working toward that.
    Desalination really works on brackish water and the efforts 
that we are doing on reclamation and utilization of those type 
of water resources to reuse are somewhat successful and we can 
do it at an economical cost, $100 to $200 an acre-foot.
    This legislation allows for Federal dollars to be used to 
be leveraged with state and local money to do exactly that. I 
don't know very many people that are opposed to those projects 
being developed. Certainly here in Northern California and the 
Central Valley and Southern California and throughout the State 
of California and through the West are these types of projects.
    Do any of you want to comment whether you agree that these 
kind of projects are necessary in the state for us to meet 
future water needs?
    Dr. Gleick and Mr. Nelson.
    Mr. Gleick. Which projects in particular?
    Mr. Calvert. Well, we have a project, one down south that 
SAWPA is developing, for instance, to develop 100,000 acre-feet 
of water through reclamation recharging an aquifer and being 
able to bring that water back up and actually will clean up the 
aquifer because the water going in will be cleaner than the 
water that is in the aquifer at the present time. There are 
other reclamation projects. The City of San Diego is interested 
in doing those types of things certainly right up in this area 
as was mentioned in prior testimony.
    Certainly, Mr. Diridon, you may want to comment about 
reclamation efforts here in the Santa Clara, San Jose area. 
Conjunctive use between San Francisco and Sacramento. It is 
remarkable to have some of these communities working together 
that have been at war on water. I find out there are about 100 
water wars going on in the State of California and we are 
trying to resolve one at a time.
    Mr. Gleick. Yes, Mr. Chairman. In general I'm a big fan of 
innovative projects. We actually testified previously in front 
of your committee on a report we did on 40 examples of 
successful sustainable water resource management that include 
reclamation and efficiency and innovative projects with farmers 
and environmentalists to restore ecosystem.There are a lot of 
very smart innovative things going on.
    Mr. Calvert. You think the Federal Government should 
participate in things like this to help leverage state and 
local money to develop these kind of water resources?
    Mr. Gleick. In certain cases, yes. Without being specific 
it's hard to judge. I'm also not--
    Mr. Calvert. What about Mr. Diridon on his project. Do you 
think his project should have some Federal assistance in 
helping him out? I bet Mr. Diridon would say yes.
    Mr. Diridon. It might help a little.
    Mr. Calvert. How about Mr. Nelson. You had a comment. Do 
you want to support Mr. Diridon in his water project?
    Mr. Nelson. You bet. You bet we do. A couple of comments. 
First, Congressman, I agree with you. I think the energy cost 
of desalination is substantial. That cost is coming down in 
some cases, as you mentioned. With brackish water it is 
certainly more affordable.
    We would love to find a way to make that the silver bullet 
for California's water needs. Right now it clearly isn't. We 
don't oppose. We believe we should be putting some Federal 
resources in that area. We also think it's very important we 
make sure our state money, our Federal money, and our local 
money is spent where it is going to be most effective.
    Right now it appears that desalination is not in that 
place. Is it a technology of the future? Maybe, and we 
shouldn't ignore it. I would also note that when CALFED did its 
own economic analysis, desalination was not the most expensive 
tool. Some of the surface storage facilities we are looking at 
are more expensive than desalination.
    Mr. Calvert. Well, we get into that surface storage. 
Obviously we're not doing on-stream storage anymore. That is 
virtually impossible to do. Most of the storage that we're 
talking about is off-stream storage. Off-stream storage by 
definition is more expensive because we have to get water to 
that.
    A great example of that, of course, in my district in 
Southern California with Diamond Valley Lake to store 800,000 
acre-feet of water. Very expensive. Very expensive. No one 
disputes that Sites, the reservoir I suppose you were talking 
about, would be very expensive but it also adds flexibility 
with existing water supplies, blended water supplies, which 
brings down the real cost of that number. I suspect that number 
at $400 an acre-foot, you are bringing in the capital cost and 
the real cost of water based upon whatever formula you may have 
used.
    Mr. Nelson. We used the formula that CALFED used. We simply 
used their formula for calculating cost.
    Mr. Calvert. But it certainly adds flexibility and 
certainly adds water quality to the system which is, in my 
mind, necessary and something we've been studying. I think 
probably Sites is about as studied as most any water project 
that we've ever gone through.
    Obviously it is expensive but it is, in my mind, necessary 
along with water reclamation. As far as desalination is 
concerned, we probably will look toward a couple of 
demonstration projects in California to try to bring that 
technology along because I think that's important.
    We won't probably put a lot of resources in it but some 
because science is important and to understand desalination in 
a better way and new technologies that are coming up I think is 
important. The utilization of desalination on brackish water is 
economical. It works. SAWPA I think is a great example of that 
and I think we ought to move it forward.
    Any other comments? Yes, ma'am.
    Ms. Wells. I would like to say that for 20 some years those 
of us on the CVP side in the Sacramento Valley have implemented 
and have been following a very stringent water management and 
conservation plan. I would say that we are in the 80 percentile 
efficiency.
    The interesting thing, if I could sort of characterize my 
position as a landowner, I have often felt in the last 20 years 
that it was at the bottom of the food chain relative to 
watching my supply diminish. The difference now is that I view 
this as an opportunity to be a cornerstone or a building block. 
With such simple things as streamlining transfers in basin, 
facilitating conveyance.
    These are obstacles because of price or facilities. Often 
times they are not very expensive things. They are just a 
willingness for the agencies and those involved and our 
neighbors who supply us with additional water. We have a world 
of water rights and resources in Northern California. We are 
now looking to approach it that what can we do in an integrated 
management plan.
    The cornerstone of it is meeting the needs of those in 
basin that have been facing water shortages. By doing that you 
develop groundwater. If there is groundwater, you monitor it so 
there is not the fear so much of shipping everything out of the 
basin. There is so much going on right now and I think 
legislation such as what you are proposing does leverage with 
Federal and state funding to get those things done.
    At the same time we don't believe that is enough to result 
all of the state's problem relative to the growing population. 
Look at the increased demands from the environment. As I said 
in my testimony, every year we see more and more of our water 
be taken for that.
    It's not to say that it shouldn't occur but we have to meet 
that need. We do it in basin with all of the less expensive 
things and as we develop off-stream storage, yes, there is a 
very expensive price component. But the way I understand it, 
the flexibility, as you have mentioned, is phenomenal.
    Look at water temperature alone. If you were to put a drop 
of green dye in Sites and blue in Shasta and we had an 
excessive winter, we had a very good winter supply, you could 
release water out of Shasta into Sites. There are times then 
you could hold the cold water. We may actually use water for 
the farming in the valley out of Sites but use the pricing 
structure.
    It's an exchange situation where water would then be made 
available for temperature purposes and then move to the Delta 
and supply water to the south at a price that is more 
affordable to them. There is just a host of flexibility and 
exchange issues that certainly warrant the leveraging and the 
possibility of doing these things.
    Mr. Calvert. Thank you.
    Mr. Diridon, do you have any other comments?
    Mr. Diridon. A last word on water recycling. A reminder we 
currently recycle 10 to 15 million gallons a day through WCPC 
and the water recycling programs but the potential to 50 to 100 
million gallons that we could recycle every day.
    That's a good thing. That's good for the environment 
because it helps us avoid salt marsh conversion. It's good for 
industry because it provides reliable, clean water supply. It's 
good for our communities because if our economy is strong and 
our environment is strong, it leads to a better quality of 
life.
    We need continued help from CALFED and from the Federal 
Government. I'll ask that while you work through some of these 
issues that have been talked about today, that you do continue 
to advocate on behalf of that funding and allow us to continue 
to do our job locally.
    Mr. Calvert. Thank you.
    Ms. Lofgren.
    Ms. Lofgren. Well, like so many things, there is no one 
answer and we are going to have to do all sorts of things. I 
was recently talking to a Member of Congress from a different 
part of the country in explaining that we are conserving 
energy. We are the most efficient among all the 50 states in 
per capita energy usage in California.
    Really a lot of it was the trading of the last drought. I 
remember 1978, which was the first memory I have on the 
drought, how all of a sudden you couldn't take showers and you 
couldn't--I mean, it was intense. To this day I don't leave the 
water running when I brush my teeth. It drives me crazy when 
people do that. You permanently change habits and conservation 
is going to be part of this answer for water as well as using 
technology.
    We have been financial partners on the reclamation effort 
here. I think actually we should do a little bit more, not only 
in this county but throughout the state of California. That is 
clearly part of the solution. I don't think anyone is arguing 
it.
    I would like to take a moment to pitch the bill that we're 
working on. Fusion energy obviously is a longer-term project, 
but I do believe that we need to use the best science minds we 
have to secure that sort of energy for our country and the 
world of decades hence when we come to grips with the finite 
quality of some of our other energy resources. That will also 
be part of the water solution if we manage to achieve in that 
area.
    Thinking about energy, and that clearly is the constraint 
on desalination, there are energy costs to move water as well. 
When we were trying to cope with the energy crises, one of the 
little facts delivered to us was that the single biggest user 
of energy in the State of California was the Central Valley 
Project which I guess it makes a lot of sense. I hadn't really 
thought of that.
    If we are going to be--let's say a scenario what if, if we 
do some additional storage and it's going to be moved. Dr. 
Gleick, for example, have you calculated the energy cost of the 
impact of moving that water from storage?
    Mr. Gleick. Those numbers are available. I don't have them 
in my head but, as you point out, the largest single user of 
electricity is, in fact, the pumping of the water over 
Tehachapis into Southern California.
    For that reason, in addition any gallon of water that you 
don't need to use south of the Tehachapis saves you not just 
water but energy as well. That makes water use efficiency 
improvements even that much more cost effective. If you include 
the energy savings from saving water, the combined savings are 
tremendously important.
    Mr. Nelson. We have recently completed that analysis and to 
do that we looked at the facility in the Central Valley that 
would generate the most water per acre-foot. Raising Shasta Dam 
would be the project that would generate the most energy per 
acre-foot of new storage.
    People intuitively understand it when they think of new and 
raised dams as generating energy but when you have to pump that 
water over the coast range to get it here, over the Tehachapis 
to get it to Southern California.
    Certainly in the case of Southern California we have looked 
at those numbers closely and the more storage we build in the 
Central Valley to deliver water to Southern California in 
particular, the more energy they consume. These projects right 
now are energy losers.
    Ms. Lofgren. It looks like Ms. Wells has--
    Ms. Wells. I would like to comment. I'm certainly not an 
expert in power. I'm trying to stay up with it as it is but you 
have to remember the CVP is also a producer of power in excess 
of what it needs often. We're not at a point in Sites to know 
exactly how.
    Certainly there is power needed to pump the water in as an 
off-stream storage facility, but there is also the opportunity 
to create power. Generally speaking it could almost be power 
neutral in terms of what you put in it's got to come out and 
you can generate power so there is always that concept, too.
    Ms. Lofgren. It would be interesting. I don't know what the 
answer is. I mean, they tell you in law school never ask the 
question unless you know the answer but I don't know the answer 
and I would be interested in any of the analyses done.
    Clearly, we live in the desert. It's the Cadillac desert 
and we have benefitted, or some would say not, but I wouldn't 
redo what Governor Brown did decades ago. We wouldn't have an 
economy. None of us would living here in these numbers. The 
question is now what? I think this has been a very useful 
discussion in terms of the policy choices that we face to 
maintain a healthy environment and a healthy economy. I really 
appreciate the very thoughtful comments.
    Mr. Calvert. I also want to thank this panel. I think 
Congresswoman Lofgren is right. There is no one answer, though 
I would say that H.R. 1985 helps. We obviously are going to 
conserve more. We need to conserve more. I don't think anyone 
in this room doesn't think we should conserve.
    We need better farming practices. I think we've seen a lot 
of evidence of that in the last number of years. We are going 
to need ground water storage. We are going to need off-stream 
storage. We are going to need reclamation. We are going to need 
water transfers. Those are going to take place.
    All of these things are going to take place or we're not 
going to meet demand. We know what happens when you don't have 
enough supply and you have too much demand. I mean, I learned 
that in ECON 101 class back many years ago. We don't want to 
face that choice. As we move forward on this, we look forward 
to working with everybody and everyone's participation.
    I'm happy to say that we have a number of endorsements of 
this so far. The Association of California Water Agencies, the 
Bay Area Council, California Business Properties Association, 
California Business Round Table, California Chamber of 
Commerce, California Manufacturers Technology Association, 
California State Council of Labors, Conference of Operating 
Engineers, Central Valley Project Water Association, LA Chamber 
of Commerce, Mountain Counties Water Resources, Northern 
California Water Association. That's just a portion of a number 
of endorsements along with what you heard from California 
Waterfowl, Ducks Unlimited, and others.
    This is process. We are moving forward and hopefully we are 
a successful process because I can assure you that we must get 
an authorization bill or those dog gone appropriators won't 
give us any money.
    With that, I appreciate you coming out. God bless. We're 
adjourned.
    (Whereupon, at 11:27 a.m. the meeting was adjourned.)

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