U.S. GOVERNMENT PRINTING OFFICE

41–039cc u WASHINGTON : 1997

CALFED BAY-DELTA PROGRAM

OVERSIGHT HEARING

BEFORE THE

SUBCOMMITTEE ON WATER AND POWER

OF THE

COMMITTEE ON RESOURCES

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

FIRST SESSION

ON

THE FISCAL YEAR 1998 FEDERAL BUDGET REQUEST

FOR THE CALFED PROGRAM AND ITS SOLUTIONS

TO THE WATER PROBLEMS

APRIL 17, 1997—WASHINGTON, DC

Serial No. 105–17

Printed for the use of the Committee on Resources

(
(II)

COMMITTEE ON RESOURCES

DON YOUNG, Alaska, Chairman

W.J. (BILLY) TAUZIN, Louisiana

JAMES V. HANSEN, Utah

JIM SAXTON, New Jersey

ELTON GALLEGLY, California

JOHN J. DUNCAN, JR., Tennessee

JOEL HEFLEY, Colorado

JOHN T. DOOLITTLE, California

WAYNE T. GILCHREST, Maryland

KEN CALVERT, California

RICHARD W. POMBO, California

BARBARA CUBIN, Wyoming

HELEN CHENOWETH, Idaho

LINDA SMITH, Washington

GEORGE P. RADANOVICH, California

WALTER B. JONES, JR., North Carolina

WILLIAM M. (MAC) THORNBERRY, Texas

JOHN SHADEGG, Arizona

JOHN E. ENSIGN, Nevada

ROBERT F. SMITH, Oregon

CHRIS CANNON, Utah

KEVIN BRADY, Texas

JOHN PETERSON, Pennsylvania

RICK HILL, Montana

BOB SCHAFFER, Colorado

JIM GIBBONS, Nevada

MICHAEL D. CRAPO, Idaho

GEORGE MILLER, California

EDWARD J. MARKEY, Massachusetts

NICK J. RAHALL II, West Virginia

BRUCE F. VENTO, Minnesota

DALE E. KILDEE, Michigan

PETER A. DEFAZIO, Oregon

ENI F.H. FALEOMAVAEGA, American

Samoa

NEIL ABERCROMBIE, Hawaii

SOLOMON P. ORTIZ, Texas

OWEN B. PICKETT, Virginia

FRANK PALLONE, JR., New Jersey

CALVIN M. DOOLEY, California

CARLOS A. ROMERO-BARCELO ́ , Puerto

Rico

MAURICE D. HINCHEY, New York

ROBERT A. UNDERWOOD, Guam

SAM FARR, California

PATRICK J. KENNEDY, Rhode Island

ADAM SMITH, Washington

WILLIAM D. DELAHUNT, Massachusetts

CHRIS JOHN, Louisiana

DONNA CHRISTIAN-GREEN, Virgin Islands

RON KIND, Wisconsin

LLOYD DOGGETT, Texas

LLOYD A. JONES, Chief of Staff

ELIZABETH MEGGINSON, Chief Counsel

CHRISTINE KENNEDY, Chief Clerk/Administrator

JOHN LAWRENCE, Democratic Staff Director

SUBCOMMITTEE ON WATER AND POWER RESOURCES

JOHN T. DOOLITTLE, California, Chairman

KEN CALVERT, California

RICHARD W. POMBO, California

HELEN CHENOWETH, Idaho

LINDA SMITH, Washington

GEORGE P. RADANOVICH, California

WILLIAM M. (MAC) THORNBERRY, Texas

JOHN B. SHADEGG, Arizona

JOHN E. ENSIGN, Nevada

ROBERT F. SMITH, Oregon

CHRIS CANNON, Utah

MICHAEL D. CRAPO, Idaho

PETER A. DEFAZIO, Oregon

GEORGE MILLER, California

OWEN B. PICKETT, Virginia

CALVIN M. DOOLEY, California

SAM FARR, California

ADAM SMITH, Washington

RON KIND, Wisconsin

LLOYD DOGGETT, Texas

————— —————

————— —————

ROBERT FABER, Staff Director/Counsel

VALERIE WEST, Professional Staff

CHRISTOPHER STEARNS, Democratic Counsel
(III)

C O N T E N T S

Page

Hearing held April 17, 1997 ................................................................................... 1

Statement of Members:

Doolittle, Hon. John T., a U.S. Representative from California; and Chairman, Subcommittee on Water and Power ................................................... 1

Radanovich, Hon. George, a U.S. Representative from California ............... 103

Statement of Witnesses:

California Bay-Delta Water Coalition (prepared statement) ........................ 64

Garamendi, John R., Deputy Secretary, Department of the Interior .......... 8

Prepared statement ................................................................................... 49

Golb, Richard K., Executive Director, Northern California Water Association ................................................................................................................. 31

Prepared statement ................................................................................... 70

Johnson, Leslie Friedman, Director of Agency Relations, California Regional Office, The Nature Conservancy ...................................................... 28

Prepared statement ................................................................................... 61

Kamei, Rosemary, Director, Santa Clara Valley Water District .................. 27

Prepared statement ................................................................................... 59

McPeak, Sunne Wright, President and CEO, Bay Area Council .................. 30

Prepared statement ................................................................................... 68

Payne, W. Ashley, owner, Ashley Payne Farms ............................................ 33

Prepared statement ................................................................................... 71

Perciasepe, Robert, Assistant Administrator for Water, Environmental

Protection Agency ......................................................................................... 11

Prepared statement ................................................................................... 54

Snow, Lester, Executive Director, CALFED Bay-Delta Program ................. 3

Prepared statement ................................................................................... 46

Wheeler, Douglas P., Secretary for Resources, State of California .............. 10

Prepared statement ................................................................................... 50

Additional material supplied:

California’s Bay-Delta—Restoring a National Treasure (report) ................. 82

Category III 1995–1996 Restoration Projects ................................................ 74

Communications submitted:

California Delegation joint letter of February 25, 1997, to Chairman

Bob Livingston .............................................................................................. 98

McCollum, Michael: Letter of April 14, 1997, to Hon. John Doolittle ......... 75

Wilson, Pete: Letter of March 31, 1997, to Hon. Joseph M. McDade ........... 54
(1)

FISCAL YEAR 1998 FEDERAL FUNDING

REQUEST FOR THE CALFED PROGRAM

THURSDAY, APRIL 17, 1997

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON WATER AND POWER,

COMMITTEE ON RESOURCES,

Washington, D.C.

The Subcommittee met, pursuant to call, at 12:34 p.m., in room

1324, Longworth House Office Building, Washington, DC, Hon.

John Doolittle (Chairman of the Subcommittee) presiding.

Mr. DOOLITTLE. The Subcommittee on Water and Power will

come to order. We have set today’s meeting to hear testimony concerning the fiscal year 1998 Federal budget request for the

CALFED program.

I apologize to our witnesses. I don’t think I have ever started a

hearing more than five minutes late, and I guess if we were operating on Pacific Coast time, we would be more or less on that

standard today, but unfortunately, it is Eastern time here.

We had an extraordinary situation involving the address of the

Speaker of the House to the full House of Representatives, which

was not anticipated at the time this hearing was scheduled, so I

apologize, and I realize that people have been inconvenienced and

may need to adjust their schedules.

STATEMENT OF HON. JOHN T. DOOLITTLE, A U.S. REPRESENTATIVE FROM CALIFORNIA; AND CHAIRMAN, SUBCOMMITTEE

ON WATER AND POWER

Mr. DOOLITTLE. The CALFED program promises to be one of the

most important issues considered by this Subcommittee in the

105th Congress. It represents a major Federal and State commitment to solving California’s water needs and sets the stage for future water management policies and facilities within California.

It is critical that we use this opportunity to meet the needs of

all of our constituents—agriculture and urban, landowner and conservationist, business owner and recreationists alike.

Let us also be clear that the funding for the CALFED Bay-Delta

Program under consideration today is not limited to a funding request for this year alone, nor is it limited to the three years of the

current authorization. It is a program likely to involve decades of

Federal and State funding commitments.

The current CALFED authorization, the Federal authorization as

large as it is proposes implementation of only certain limited aspects of the program in this and the next two fiscal years, while
2

postponing the authorization and funding request for most of the

program into future years.

All of the CALFED alternatives under consideration are estimated to range in cost from $4,000,000 to $8,000,000, an amount

to be paid over 20 to 30 years. This is the time to hear a solid commitment from those most interested in the current CALFED program objectives, that they will be full participants and supporters

of the latter phases of the project, when the relative funding for

projects they now support is on the decline.

Another issue of concern is the need to develop criteria to assess

the successful implementation of the earlier portions of the program. When the object of an authorization is a dam or a water recycling plant, success is achieved when the facility is completed

and becomes operational. Not only do we currently lack the specifics on the projects to be undertaken in this phase of CALFED,

but there are no measuring sticks to determine that we have

achieved a specified goal once the money has been spent. How do

we know that there will not just be an endless flow of requests for

new funding, based not on the need to achieve a new goal, but

rather because we haven’t defined success? If we do not define a

measure of success, we will be asked to spend unlimited resources

with no hope of closure.

The CALFED program must incorporate milestones and objective

measurements that define when specific goals have been met.

Finally, this phase of the program represents a major public acquisition of private property rights. Much of the area viewed as potential habitat, meander belts, and ecosystem management zones is

currently held by private interests. Their predecessors built hundreds of miles of levees and reclaimed tens of thousands of acres

of land in the 1800’s.

This land is now used throughout the delta and along the Sacramento and San Joaquin Rivers to support a thriving rural economy dedicated to farms, small businesses, mineral extraction,

recreation areas, and private residences.

If these private landowners are going to be asked to return these

lands and water rights to the public domain, a process should be

set up which is fair, expeditious, and easy for them to use.

The preferred alternative in this case is that any acquisition

should be based on a willing seller and willing buyer transaction.

If that is not the case, we do not want to endorse a program that

acquires property through regulatory or programmatic takings or

forces people to sell out of sheer frustration.

I do not believe that these concerns present insurmountable obstacles. Rather, they represent reasonable, attainable goals which

should reflect the way government conducts its business. The Federal California Bay Delta Environmental Enhancement Act coupled

with California Proposition 204 advance a partnership with potential funding of nearly $1.5 billion.

It has the potential to be used to enhance the water quality and

environmental resources in the Bay-Delta, as well as for other

water resource activities in California. Yet how it is administered

will be a test of government’s ability to transition to a smarter,

more efficient, less coercive mode of operation. I look forward to

hearing from the witnesses.
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Mr. Dooley, are you going to make an opening statement?

Mr. DOOLEY. Mr. Chairman, I think that I will not give an opening statement, but rather thank all the participants who have been

waiting for some time for their testimony. I really thank the leadership that has been shown by a number of the people that are

going to be testifying for putting together a really diverse coalition

which is committed, I think, to finding constructive and positive solutions to some of the water and environmental problems that have

plagued California for decades. Thank you.

Mr. DOOLITTLE. Thank you. Now, if the Subcommittee members

will indulge me, I would just like to observe that it has come to

my attention, and frankly, has caused me great concern that there

have been some last-minute delays and changes in the 1997 water

allocation announcement for the CVP contractors.

I think that it is unfortunate that the Fish and Wildlife Service,

one agency among the many CALFED agencies, can continually

take action at the last minute that threaten, the efforts to build

consensus among the various stakeholders. This is the second year

in a row that there have been last minute blow-ups related to

water allocations.

All the other parties at the table are operating in good faith to

provide as much water as possible for the environment with as little economic impact on water users as possible. I am very concerned that the Department of Interior does not have the desire or

perhaps the clout to rein in what has become a rogue agency.

This is a far cry from Secretary Babbitt’s commitment when he

was first appointed that his department would speak with one

voice. With that, let me invite our first panel of witnesses to come

forward, and if they would, to remain standing to take the oath.

If you will please raise your right hands?

Do you solemnly swear and affirm under penalty of perjury that

the responses given and statements made will be the whole truth

and nothing but the truth?

Thank you. Let the record reflect that each answered in the affirmative.

We welcome you here. I think you are all familiar with our fiveminute rule of testimony. The lights are there as a guide. I would

like to mention that we asked Mr. Snow to give a lengthier explanation, so he will have ten minutes for his statement.

Let me introduce our distinguished panel. We have Mr. Lester

Snow, Executive Director of the CALFED Bay-Delta Program. We

have the Honorable John Garamendi, Deputy Secretary from the

Department of Interior; the Honorable Douglas P. Wheeler, Secretary for Resources of the State of California; and Mr. Robert

Perciasepe, Assistant Administrator for Water of the Environmental Protection Agency.

Gentlemen, we are very pleased to have you here, and Mr. Snow,

it is my understanding you will lead off this panel.

STATEMENT OF LESTER SNOW, EXECUTIVE DIRECTOR,

CALFED BAY-DELTA PROGRAM

Mr. SNOW. Thank you, Mr. Chairman and members of the committee. My name is Lester Snow. I am executive director of the

CALFED Bay-Delta Program.
4

What I would like to cover today is to give you an overview of

the program covering our basic approach and the status, but also

to spend a fair amount of time on what we refer to as early implementation, how we begin improving the situation in the Delta, and

specifically the importance of Federal fiscal year ’98 funding commitment to that early implementation effort.

First, I want to start with I guess what I would call my overall

conclusion, and that is that we cannot and we will not fail in our

efforts to bring a long-term solution to the Bay-Delta system resource conflicts.

In this case, the we that I refer to is the State, Federal, and local

governments and perhaps more importantly, the stakeholder community including environmental, urban, business, and agricultural

leaders coming together as a unit. In this case, the we has realized

that we must move forward and solve this problem.

The reason that we will not fail is not because the current crop

of stakeholders or agency representatives who are smarter or more

insightful than the past generation, but more simply that the consequences of failure have become so severe. Included in the category of failure is inaction or status quo.

In the past, we have left things slide because there was flexibility left in the system. We could put off decisions or put off investments because there were no immediate consequences. Those

days are gone forever.

We see now the consequences of failure in terms of direct impacts, like levee failures during flooding. We see the decline of recreational and commercial fishing. We see risks to water quality in

terms of drinking water supplies, overall reduction of water supply

reliability, reduction of watershed productivity, and perhaps more

alarming for the long run and perhaps less directly understood, a

reduction in Pacific Rim competitiveness and jobs unless we deal

with these issues.

What we are facing are years of deferred investment and decisions to not make changes because it is costly or complicated or

may result in conflict. We are seeing a slow but methodical reversal of this deferred investment, first with the creation of something

called CALFED and the framework agreement, then the accord,

then Proposition 204, and now the appropriation that we are seeing

in the proposed fiscal year ’98 budget.

We must continue in this path and use Prop 204 and the appropriation to renew the necessary investments in this system so that

we may succeed. I would like to switch now and try to provide a

basic overview to the CALFED Bay-Delta Program, and to do that,

I want to use a briefing book that I believe you have been supplied,

commonly referred to as the Federal briefing packet, which I believe you have in front of you.

I know that some of the other speakers will draw attention to

this, and you will hear this a number of times, but I guess part

of the unique aspect of what we are doing is the joint collaborative

effort among State and Federal agencies. We have as a basic foundation of our program stakeholder and general public involvement.

If we do not maintain stakeholder involvement and we do not

maintain general public access to our program, we will fail, because
5

that is how attempts in the past have failed to reach conclusions

to these problems.

We depend on a collaborative effort to find solutions. That collaboration extends beyond the agencies to individual landowners

that must work with us to help us understand their issues and find

solutions that work.

If I could refer to pages four and five of the briefing book, it will

give you a basic organizational structure of CALFED, organized

under the Secretary of Interior and the governor of the State of

California, with the CALFED agencies in fact forming a board of

directors for the Bay-Delta program.

We have laid out a process in three phases, moving from getting

simple agreement on what the problem is to be solved in this system all the way through phase three, which is implementation of

the solution. We have set up specific objectives to cover the problem areas which we have identified as water quality, ecosystem

health, improved water supply reliability, and system integrity or

levee stability.

We have in phase one, which we completed last year, identified

three alternatives for addressing those issues in a combined fashion. We are now in phase two which includes the environmental

documentation under State and Federal law and a refinement of

these alternatives so that we may reach a preferred, a draft preferred alternative in November of 1997, and a final preferred alternative in the fall of ’98.

If you can look at page seven of the briefing packet, you will see

a very concise description of the nature of the alternatives that we

are moving forward with.

You will notice that each alternative is composed of what we

refer to as common programs, consideration of additional storage,

and finally modification of the way we convey water in and around

the Bay Area system.

Within the common program, we have water quality, system integrity, ecosystem restoration, and water use efficiency. What we

are doing in phase two is refining these alternatives and developing environmental documentation to support them as we move

forward.

We are dependent on a lot of public input, with emphasis on actions and alternatives which address multiple objectives. We want

to avoid people simply trying to address their problem that is separate from someone else’s interests, and thus have developed alternatives that attempt to address as many objectives as possible.

For example, when we look at storage, we look at it not just as

it may be used for water supply, but also how storage can be operated to improve water quality, fish flows, and flood management,

so we get as much benefit out of a single action as possible.

All objectives must be addressed in an alternative. In California,

we refer to it as no one gets out alive. We are all in this together.

You don’t get your problem solved unless everybody else’s problems

are solved.

Given the common programs that I have mentioned at the bottom of that chart, it is clear that some actions, no matter what the

final alternative, will be implemented, that is, if they are common

to all of them. Certain actions must be taken to improve ecosystem
6

health, water quality, system integrity, and water use efficiency.

That is the basis for the concept of early implementation.

What we have found with our extensive outreach to the public

and to stakeholders is that they don’t want to wait ten year for

more plans to be prepared. They want to see a long-term solution,

but they want us to start fixing the problem now, and not put it

off until we have dotted every I and crossed every T.

We have the ability because of the common program to identify

actions that allow us to begin reinvestment in the system, to identify actions which will have a beneficial impact, and/or will not

prejudice the long-term outcome.

It is important that we identify actions that we can actually start

resolving some of the existing conflict in the system. If I could direct your attention to page 18 and the three charts that follow that,

I will attempt to describe the basic process that we are utilizing to

identify projects and begin the early implementation.

A major concept in this restoration-coordination activity, as we

refer to it, is to actually identify the priority projects and programs

that can achieve a reduction in conflict of the system and contribute to the long-term.

We are attempting to set up what could be called a funding matrix so that we can make the most efficient use of existing moneys

that are available as well as new appropriations.

We are doing this currently primarily looking at something called

category three, a funding mechanism that came out of the accord.

Monies have been made available in Prop 204.

As we set up the different priorities of what needs to be done,

diversions that may need to be screened, certain types of habitat

that may need to be restored, for current conflict-types of issues,

such as anticipated spring run salmon is a problem. We are dealing

with Delta smelt in the Delta that is a problem, and then we look

at integrating other Prop 204 funds that may be able to make the

project bigger or more efficient, and looking at other Federal funds.

It is our desire to integrate the State and Federal decisions to

come up with better, more efficient programs that address the

problems in the system.

On chart two, there is a very quick shorthand of the decisionmaking structure that we have put in place. As you know in identifying the amounts of money that may be necessary in fiscal year

’98, we can identify them by categories, not by project. It is our

firm belief to maintain allegiance to the stakeholders that have

been involved and the public, that we must go through a methodical process of picking the best projects.

We have identified categories of activities. We have done that in

a very open process. There are four basic steps for us to come up

with the individual projects, identify the priorities, develop actions

which address those priorities, establish a request for proposals so

we get the best projects in, and finally, recommend the projects.

Since we are dealing with potential multiple funding sources,

projects that we would want to use Prop 204 funds for, we would

recommend to the Secretary of Resources for the State of California, and likewise, if the Federal appropriation goes through, we

would submit those to the Secretary of Interior for final determination.
7

We are utilizing an ecosystem roundtable which has been established as a Subcommittee of the Bay-Delta Advisory Council to look

at these near-term implementation issues and help develop criteria

and priorities by which we will select specific projects. The BayDelta Advisory Council will also review this as part of its task of

looking to the long-term program.

We have attempted to set up a project review process that maximizes public input and gives us the greatest probability of getting

the best projects to address the issues that we have identified.

The third chart—I really just put this in here to give you an indication of the kind of timeframe that we are on. To make a long

story short, we have set up for three separate funding cycles between now and the end of Federal fiscal year ’98. We are on path

now to identify specific projects to begin receiving funding in August of this year. Obviously, those funding projects will be focused

primarily on Prop 204, but we can immediately identify additional

projects for funding in the February to March timeframe, and then

a third funding cycle for August-September of next year.

We have set up a process to get maximum input in terms of the

kinds of projects that can address the problems that we have seen

in the system.

We have attempted to identify the kinds of activities, and that

is categorized on page 23. In general, they follow the issues of habitat acquisition and restoration, including conservation easements,

fish screening projects, monitoring to make sure that these projects

are effective in meeting the objectives of the program.

We are establishing indicators that will be used as a yardstick

to make sure that we are making progress on the program. We are

also looking at water quality measures, including watershed management. We are looking at integrating habitat into levee stabilization programs and you will also notice in our proposed activities

conservation and reclamation activities.

I see I am about out of time. If I could indulge you for two more

minutes, please?

Mr. DOOLITTLE. Certainly. Go ahead and finish your statement.

Mr. SNOW. I guess at this point, instead of going through the

more detailed list of the kinds of projects, what I would like to do

is put the emphasis on our outreach and creative solution approach

to this.

We don’t pretend that we know all of the best solutions to these

problems. We do know what the problems are. We do know that

we have problems with fish when it comes to diversions, and we

need to screen them.

We want to solicit creative proposals from people so that we have

on the table in front of us the best thinking of everybody in the

State of California. It is a collaborative effort. We need to work

with the local landowners and local conservancies to make sure

that we are designing the best approaches to these problems.

We cannot pretend that we know in Washington or in Sacramento the best thing that works on Butte Creek. We need to

work with the local folks to understand how these things can be

accomplished.

This is part of a long path. It took us 150 years to get the system

to the condition it is in today. There is no one fix. We have to have
8

a variety of actions and a significant period of time in order to recover the system.

We have to actually test our approach to large-scale ecosystem

restoration. Nothing of this magnitude has ever been implemented.

We need to move cautiously but deliberately.

Finally, I guess I would say that we cannot fail, as I started out.

The risk of failure is too great. Part of this issue of not failing is

clearly a strong Federal commitment, not only a policy commitment

to make this happen but also a financial commitment to make sure

we can proceed with the projects that are necessary.

The less that we invest today, the more there will be conflict like

arose yesterday with respect to CVPIA, and the longer it will take.

We often think that we can save a penny today, and that will be

a penny saved, and that is not the case when it comes to health

of this water system.

We need to make the investments today so that we can reduce

the conflict for tomorrow. Thank you, Mr. Chairman.

[Statement of Lester Snow may be found at end of hearing.]

Mr. DOOLITTLE. Thank you very much. Mr. Secretary, welcome.

STATEMENT OF THE HONORABLE JOHN R. GARAMENDI,

DEPUTY SECRETARY, DEPARTMENT OF THE INTERIOR

Mr. GARAMENDI. Mr. Chairman, here we are again. I want to

thank you and the members of the Subcommittee for inviting me

this morning to discuss our process and progress in developing the

comprehensive long-term restoration of the California Bay-Delta

ecosystem.

I am pleased, in fact delighted, that my colleagues from the Environmental Protection Agency and from the State of California are

here with me. Our joint participation demonstrates mutual concern, shared cooperation, and long-term commitment to meeting

the challenges of protecting our resources.

I would like to depart a little from my prepared testimony and

deal with the issue you raised in your opening statement, Mr.

Chairman. The April water allocation which is just completed is

the most recent example of the importance of the Bay-Delta program that we are here discussing today.

This has been an extraordinary water year, the seventh such extraordinary year in the last eight. We cannot fix the weather, but

we can surely fix the water system.

The Bay-Delta program is the fix to the water system, and it is

imperative that we undertake the projects identified in the BayDelta program. This is the only way that we can all work together

in a coordinated fashion. This is the only way to protect fish and

wildlife. This is the only way to protect agriculture and urban

water users. This is the only way to avoid another fight next April

over the allocations.

The CALFED program itself comes from the 1994 December

when Federal agencies, State agencies, representatives of agriculture, urban, and environmental organizations signed what is

known as the Bay-Delta Accord.

That accord described new ways to meet the requirements of

laws, the Endangered Species Act, the Central Valley Improvement

Act, the Clean Water Act, as well as certain State laws.
9

We are working together in a comprehensive long-term strategy

to restore the health of the Delta and the Bay. You have heard the

goals from Mr. Lester Snow, and I will not repeat them here, but

in order for us to develop the accord and carry out the long-term

Bay-Delta program, the Federal and State agencies combined

forces in what we call CALFED.

Four Federal agencies, the U.S. Fish and Wildlife Service, Bureau of Reclamation, EPA, and the National Marine Fishers began

the effort together with the State of California.

We have added or are about to add six additional Federal agencies, USGS, the Bureau of Land Management, National Resource

Conservation Service, the U.S. Forest Service, Western Area Power

Administration, and the Army Corps of Engineers.

These additional agencies provide a vast array of experience and

programs critical to our long-term restoration efforts. Only through

broad integration of policies and programs as well as new and creative ways of approaching problems can we realize the goals carried out or laid out in the Bay-Delta program. This year’s tragic

flooding is a prime example.

In the past several months, State and Federal agencies have

been responding to the January floods that wreaked havoc throughout much of the Central Valley and the Bay-Delta’s many tributaries. The Army Corps of Engineers in collaboration with

CALFED and other Federal and State agencies has undertaken

major efforts to repair flood protection facilities throughout the system.

With the organization of CALFED, we have a unique opportunity

to implement the restoration goals that are part of the Bay-Delta

program, as well as the Administration’s complementary Federal

flood plain management strategies.

Reducing flood damages and threats to life and property through

cost effective and where appropriate, nonstructural alternatives,

can also restore the natural values inherent in the flood plain and

adjacent lands as well as provide for water quality, quantity, and

ecosystem benefits envisioned in the Bay-Delta program.

A moment to speak about the funding. An overwhelming endorsement from California voters for Proposition 204 plus the bipartisan support here in Congress that resulted in the passage of

authorizing legislation last fall and the unprecedented collaboration among historically feuding water interests in California, we

have an incredible opportunity today to use the Bay-Delta funding

provided for in the President’s budget as a down payment on this

major effort to restore the environment as well as to provide the

necessary water and flood protection.

The program we are undertaking is one of the most significant

restoration programs ever undertaken in the world, and its implications go well beyond California.

The committee has recognized the importance of the Central Valley to the health of California’s economy and its diverse natural resource base. The CALFED program is an innovative and unique

approach to resolving the complex resource issues that have burdened the State for decades.

It is imperative that we have the funding from the Federal level.

We ask that you and this committee give us your full assistance
10

to achieving the goals of the CALFED program. Thank you, Mr.

Chairman.

[Statement of John Garamendi may be found at end of hearing.]

Mr. DOOLITTLE. Thank you. Secretary Wheeler, we are pleased to

welcome you here. You are recognized for your testimony.

STATEMENT OF HONORABLE DOUGLAS P. WHEELER,

SECRETARY FOR RESOURCES, STATE OF CALIFORNIA

Mr. WHEELER. Thank you, Mr. Chairman. I have a prepared

statement that I will submit for the record and attempt very briefly

to summarize my remarks which are directed at the State’s participation in CALFED.

In addition to my responsibilities as Secretary for Resources, I

am also Chairman of the governor’s Water Policy Council, and, I

am pleased to say, co-chair of CALFED with my colleague to the

left, Bob Perciasepe.

The State’s involvement with CALFED really began just five

years ago this month, with the announcement of the governor’s

water policy framework, in which he identified a strategy to meet

all of California’s water needs for the coming decades.

At that time and at several occasions since then, the governor

has said that until we solve the issues of the Bay-Delta, both the

water supply issues and the environmental issues, we will not be

able to develop a comprehensive water supply for the State which

assures growing supply as California continues to flourish.

In April of ’92, he made that statement. In June of ’94, he came

to the conclusion that we could not achieve a comprehensive solution in the Bay-Delta or elsewhere unless first the State got its act

together by coordinating a multiplicity of agencies and different authorities. Then having done that through the Water Policy Council,

we challenged our colleagues in the Federal Government who exercise a variety of jurisdictions in the Bay-Delta to similarly come together.

So we have first the Water Policy Council at the State level. We

had next the organization of the Federal Ecosystem Directorate,

FED, and then as a result of a framework agreement in June of

’94, the emergence of CALFED, the coalition of interests which for

the first time in California’s history, and I believe in the country’s

history, brought together all the resource agencies and all of the interested parties to work together on a solution that is truly comprehensive.

That led to the December, 1994, Bay-Delta Accord, which used

the period of three years allotted by the ‘‘no surprises’’ policy of the

Clinton Administration to find the ultimate final solution for the

Bay-Delta, both in terms of ecosystem restoration and in terms of

water supply.

As you have heard from Lester Snow, we are well on our way toward this Delta fix. We are now in the second phase, in fact, of a

three-phase program which has remained the highest priority for

Governor Wilson in the achievement of his overall water policy

framework.

The program and the concept received a strong vote of endorsement first from the legislature of California with the passage of

S.B. 900, and then ultimately, as you have also just heard, from
11

the voters of California, who by a margin of 63 percent in November elected to commit $995 million to a variety of different programs, five in all, for assuring a clean, safe, reliable water supply

for California. Three of those five elements are directly attributable

to the work of the Bay-Delta program and to the solutions of BayDelta issues. In furtherance of the initiative approved by the voters

in November, the governor’s budget for ’96-’97, and his proposed

budget for ’97-’98 include commitment of $280 million all told in

implementation of programs authorized by Proposition 204.

This is a landmark for the State of California and more than demonstrable of the State’s commitment to this partnership. We are

very pleased, therefore, that the Congress elected to authorize in

the fall of last year a Federal match to that State effort and are

here to urge your approval of the first year’s increment of that Federal funding in the amount of $143 million.

The governor wrote to the House appropriations committee on

the last day of March, just a couple of weeks ago, to say that for

the State of California, there is no higher priority in the Federal

budget than this match of the State’s effort with respect to the

CALFED Bay-Delta program, and that the State’s expenditure in

support of this program can only succeed if there is a commensurate resolve and effort on the part of the Federal Government.

Let me conclude my remarks, Mr. Chairman, on this occasion by

quoting from the governor, and he wrote in that letter of March 31,

‘‘This $140 million appropriation is my highest priority for the energy and water development appropriations bill.’’

We have submitted a copy of that letter to you for the record,

and I am pleased to have been able to underscore the governor’s

commitment and the State’s commitment to being a full partner in

this very innovative solution to Bay-Delta issues. Our partnership

with the Federal Government represents real opportunity to demonstrate to the world in fact that California has once again led the

way in devising innovative means in which to meet its resource

and its economic objectives.

[Statement of Douglas P. Wheeler may be found at end of hearing.]

Mr. DOOLITTLE. Thank you. Mr. Perciasepe, we are pleased to

have you here, and you are recognized.

STATEMENT OF ROBERT PERCIASEPE, ASSISTANT ADMINISTRATOR FOR WATER, ENVIRONMENTAL PROTECTION AGENCY

Mr. PERCIASEPE. Thank you, Mr. Chairman. It is an honor for me

to be here. I, too, like my colleague, Secretary Wheeler, am wearing

two hats today, first as an administrator of EPA but also as the

co-chair with Secretary Wheeler of the CALFED process, so in that

regard, it is an honor to be here and be invited to testify.

Before I say something about the accord and add just a few more

pieces to what you have already heard, I also want to make clear

how important we view and recognize the economic and ecological

significance of the water systems in California. The economy of the

State of California is important to the entire economy of the United

States, and the ecological resources and natural resources that we
12

are working with here and that are involved with are also of national significance.

I want to talk a little bit about what we have achieved under the

accord and a little bit about the funding and what we hope to be

able to do.

First, the accord accomplishes a number of things that have been

mentioned already. It defines a process to adopt water quality

standards. It defined a process to coordinate water project management. It created a program to improve aquatic habitat. It established a long-term process which Lester has reviewed, and I think

I agree with Secretary Wheeler that it provide a framework and an

atmosphere and a time for us to achieve those things by having

that period of certainty.

The water quality standards were ultimately adopted by the

State water resources control board in May of ’95 and approved by

EPA in September of ’95. This is something that both the State of

California and the Federal Government had been trying to achieve

for quite some time, and we are all very proud that we were able

to do that.

We have set up a process to coordinate reviews of some of the

achievements of the accord to date, a process to coordinate project

management between the State and Federal Government. We have

developed an atmosphere of more confidence in the financial markets in the State of California, in people like Standard and Poor’s

writing that the accord represents a major step in alleviating many

of the credit concerns that were evolving from a municipal bond

standpoint. Richard Rosenberg from the BankAmerica Corp saying

that the accord is a critical first step toward a new era of water

management in the State.

These are all confidence-building and important statements in

terms of the atmosphere and the process that we are trying to put

forward.

I think more importantly and probably significant is the involvement of all the different stakeholders. Mr. Chairman, you mentioned in your opening remarks the agricultural concerns, the

urban and industrial needs, the ecological needs, and getting everybody to work together on those issues have been provided for in

this process.

The Federal funding request for fiscal ’98 is really part of this

larger process that Lester reviewed, and you have the information

in front of you which I won’t detail here in my comments about

how we are anticipating these funds to be spent.

I would like to make a couple of points that we have to have a

continuing transition into the long-term plan that we are all working on, and part of what we are trying to do with our five-year

funding plan here at fiscal ’98, and the CALFED proposal, is to

continue building that confidence by doing no-regret projects,

projects and programs that are components of all the different alternatives that are common to all of the alternatives and cover

many of the areas that we are concerned about, not just ecological

restoration but also water quality, levee vulnerability and the

water supply. Some of those projects are laid out in front of you.

We are also working on a cost-share agreement which we plan

to have in place before September so that the Federal funds and
13

the State funds under Prop 204 can be spent in a cooperative way

under an agreement that both of us have to do, because statements

both in the Federal law authorizing Federal funds and the State

law require a cost-share agreement.

We also have a new way of doing business in how we are going

to be working on these projects. You have me from the Environmental Protection Agency here talking to you today about projects

that are going to be done perhaps by the Army Corps of Engineers,

or maybe by Secretary Wheeler’s agency, or the Department of Interior—probably not by EPA—advocating this whole issue of

projects that we are all working on together, and how these funds

are going to work together in tandem, and how we are going to

make those decisions.

I will conclude, simply because much has already been said, by

saying that the Bay-Delta process should be supported for a number of reasons. First, it is built on a core of partnership with the

State, and I think, as a former State official, one of the most important things in this process is that we are working on this together

with the State.

Second, the coordination amongst the Federal agencies, again, as

Secretary Wheeler mentioned in his statements, we have really

worked very hard to keep the agencies working together on this,

and this provides a really good opportunity for us to do it.

Third is the fact that all the stakeholders are involved with this,

and I think Lester may have used the term nobody gets out alive.

I would prefer to say we are all going to be fed really well, and that

the idea here is really that the house has to be built with all the

struts strong and that is what we are trying to do, and that is what

the process is designed to do.

I will stop here, Mr. Chairman, and I will answer any questions.

[Statement of Robert Perciasepe may be found at end of hearing.]

Mr. DOOLITTLE. Thank you very much. It is hard to know where

to begin, but Mr. Garamendi, what is the status of this water allocation?

Mr. GARAMENDI. The water allocations were made late yesterday.

The announcements went out late yesterday afternoon.

They are much the same; in fact, they are the same as was envisioned by the operation—CALFED operating group—last Friday.

There was a modification made, a statement made as to the policy

surrounding the B–2 water and how it can and under what circumstances it would be used in the Delta, also a policy statement

made with regard to the no-net-loss provisions of the accord which

will be in operation this year. That having been done, the policy—

the allocation was made yesterday.

It is, as I said in my opening statement, this is a symptom of the

larger problem, and we will be plagued with April allocation problems every year in the future as we have been in the last several

years in the past because the system is broken. It is the Bay-Delta

program that allows us and gives us the framework and the resources, the guidelines and the mechanism to fix the system.

It is simply imperative, we cannot survive long in California

without the Bay-Delta program.

Mr. DOOLITTLE. I think we all agree the system clearly is broken.

Hopefully, this process will lead to its satisfactory repair and an-
14

swers. Are there outstanding issues still unresolved concerning the

water allocation?

I thought I read something in your press release that there are

going to be further refinements.

Mr. GARAMENDI. Yes. The work done by the operating, the ops

group, last Friday spoke to the first half of the process. The second

half was unresolved last Friday, and that second half is whether

the specific criteria and mechanisms to be used in the makeup

pumping that will occur in the fall. That has yet to be determined.

We do have an extensive box of tools available to us to assist in

the makeup pumping in the fall. We expect that all of those tools

will be used. Some of them are cited in the CVPIA legislation, others have been suggested by water users throughout the State, and

we will be using all available tools as appropriate and as needed

to complete the makeup pumping in the fall.

We have about a two to three-week period ahead of us in which

these issues will be discussed and resolved and my statement

speaks to that period of time.

Mr. DOOLITTLE. So you expect that at least within three weeks,

these allocation issues would be resolved?

Mr. GARAMENDI. That is correct. That is the intention, and the

word I had last night, discussions with the people that will be

doing the work is that they expect to be able to resolve the remaining issues which are principally around the issue of—which are

around the issue of the makeup.

Mr. DOOLITTLE. Thank you for your efforts so far.

Mr. Snow, is it important to the CALFED Bay-Delta Program

that the appropriate agencies determine the accounting of the

800,000 acre-feet of yield for the CVP rather than Fish and Wildlife?

Mr. SNOW. The short answer to that question would be yes, but

we do need to understand how we are going to deal with what I

would call environmental flows.

We certainly feel as we compare our ecosystem component of the

long-term plan, that should be addressed in the magnitude and

timing with certain kinds of flows to provide ecosystem benefit.

Obviously, that is what was intended with the 800,000 acre-feet,

so at some point in our process, we need to better understand the

prescription for the 800,000 acre-feet to make sure it is integrated

with the way we look at the long-term needs of the ecosystem.

Mr. DOOLITTLE. And how close are we, in your opinion, to reaching a long-term agreement on how that water will be counted?

Mr. SNOW. I cannot answer that. I am not involved in dealing

with the CVPIA and the actual prescription. I can respond that we

are quite close in terms of the CALFED program understanding a

lot of the principles related to when you need ecosystem water for

the fish restoration plan or other types of issues, so we are trying

to work closely to integrate those, but I am not familiar with the

schedule for making the determination of the 800,000.

Mr. DOOLITTLE. Let me ask our Deputy Interior Secretary. Mr.

Garamendi, how would you answer that?

Mr. GARAMENDI. I am trying desperately to recall what I told you

a week and a half ago so as to honor the commitment I made when

I raised my hand as to telling you the whole truth.
15

As I recall, it is the end of this—it is in May. It is the end of

May. I believe that was my testimony a week and a half ago, and

I believe it is the end of May that we expect that to be completed.

Mr. DOOLITTLE. I know my time is up here, but Mr. Wheeler, are

you in accord with this process, the 800,000 acre-feet, or is it your

understanding, too, that representatives state that we will have

closure of this by the end of May?

Mr. WHEELER. We are so assured, Mr. Chairman. This is not a

matter of direct interest of the State or a concern. I should say it

is of interest to the State but not of direct responsibility, and we

share the view of the CALFED project that we have to take into

account the availability of this water as part of a larger plan,

which plan is very much a concern of the State.

Mr. DOOLITTLE. If you don’t know what this is, it is going to be

difficult, isn’t it, to proceed ahead?

Mr. WHEELER. Absolutely, and I think that goes to the point of

how much additional water and for what purpose will be required

of the CALFED process. This is a building block situation.

We are trying to integrate. One of the unique aspects of CALFED

is the fact that we are trying to integrate a number of disparate

statutory authorities and requirements, State, Federal, and local,

into a comprehensive plan, and the comprehensive plan that

CALFED is supposed to prepare, but you are absolutely correct

that you can’t do that unless you know what the component parts

are.

Mr. DOOLITTLE. Thank you. Mr. Radanovich.

Mr. RADANOVICH. Thank you very much, Mr. Chairman, actually

for setting these hearings and for the attendance of everybody involved with the CALFED process.

It is a remarkable process. I want to extend my complete endorsement of your endeavor and I want to reiterate how easy it

was last year to promote the funding or at least the authorization

for the spending of a portion of which you were seeking to get appropriated.

It was very easy simply because it had broad-based support in

California, and I look forward to continuing that as well.

Mr. Snow, I wish to get an estimate from you or at least a breakdown of the current $143 million request. I will applaud the Administration for coming up to the plate for the full amount. We,

however, have our task at hand to make sure that the appropriators indeed appropriate that much this year.

So if you could, please, give me the breakdown, a general breakdown, of where that money will go and also which agencies it will

be spent through. Is that a problem in making sure that all

CALFED agencies were affected the same way?

Mr. SNOW. In the briefing book, it provided our current estimate

on page 23 to go through both our—what we have done is given

a total estimate of what we can accomplish in fiscal year ’98 for the

total program. That adds up to $260 million and covers all four

problem areas.

Then in turn, we have taken each of the areas, such as ecosystem quality, and broken it down into pieces such as habitat acquisition and restoration, fish screening and passage, and then in

each of those cases, further broken it down.
16

These end up being our target categories. For example, $47 million of acquisition of key properties and habitat restoration in partnership with others for fish and wildlife purposes, and we have indicated in there just looking at existing programs that funding

could be used by USDA in concert not only with their Natural Resource Conservation Service Activities, the Fish and Wildlife Service, but other entities.

We have not made a determination at this point exactly how

those moneys should flow, and the reason for that is while we have

targeted areas and types of habitat, we have not selected projects,

and that comes through this ecosystem roundtable process that I

have described.

So as we get an inventory of projects ready to go, each one may

have a different funding combination and a different lead agency.

We are looking to accomplish the kind of maximum ecosystem benefit for the least dollars by looking at these different combinations

of projects.

So this is our current working level of detail, these kinds of categories, and as we proceed with our public process through the ecosystem roundtable and the Bay-Delta Advisory Council, we will

start filling in with specific projects.

The first projects will be funded under Prop 204, because we intend to do that in this Federal fiscal year, August of this year, to

begin allocating the moneys.

Mr. RADANOVICH. So if I can assume the total of page 23 is not

the total, but rather it goes on to include pages 24 and 25?

Mr. SNOW. Yes, I am sorry. It is on page 26 that has the totals. It shows $143 million as a potential Federal funding, and $260 million as the total.

Mr. RADANOVICH. Thank you very much. Mr. Chairman, I have

a statement and a letter I would like to submit for the record.

Mr. DOOLITTLE. That will be accepted, without objection.

[Statement of Hon. George Radanovich may be found at end of

hearing.]

Mr. RADANOVICH. Thank you very much. Also, Mr. Snow, how

much is the programmatic EIS statement on the three long-term

alternatives expected to cost, how will it be funded, and is late

1998 a realistic timeframe to expect completion of this EIS?

Mr. SNOW. Let me start with the last question, realistic time

line.

I think if you talk to people that are familiar with projects such

as this, they would say no, that it cannot be done in that period

of time. However, we have established that deadline, and we intend

to stick to it.

An important part of this whole effort is keeping everybody engaged, keeping the momentum, and I believe if we keep the stakeholder community engaged and the diversity of the State and the

Federal agencies that we can meet our targets.

These kinds of processes, if you slow down every time there is

an issue, you can turn it into a ten-year planning process. That is

not going to serve the resource system well if we do that, so we intend to stick to that deadline.

In terms of the funding, as a result of the Bay-Delta Accord,

there was a specific agreement developed between the State and
17

Federal agencies to prepare a long-term plan. That agreement that

has been executed between the State and Federal agencies provides

for 50–50 cost share of developing the long-term strategy, preparing environmental documentation, and establishes in that

agreement a total cost of $20 million to be split evenly and provides

for modifications as necessary as we proceed and covers a four-year

period of time. That is what we are operating under currently.

Mr. RADANOVICH. Thank you. Mr. Chairman, I would like another couple minutes because I have run out. I do have some more

questions.

I know this is a hard question to ask, but Mr. Perciasepe, is that

how you say it?

Mr. PERCIASEPE. That is fine.

Mr. RADANOVICH. Would there be any difficulty in extending the

existing three-year program to four if necessary until a long-term

management plan is determined, if it is determined that it will

have to go beyond 1998, and if so, can you give me an idea of how

long we might expect it to go if you don’t reach that 1998 deadline?

Mr. PERCIASEPE. Thank you. The existing accord which was

signed in December of ’94 was a three-year horizon which would in

theory then have it expiring in December of this year.

We are all in agreement that this needs to be extended for some

period of time. We are working with all the stakeholders, with the

State and the other Federal agencies to frame how that will be extended.

I think it is our feeling and our desire to extend the accord for

the appropriate period of time to allow that work to be completed,

and we think it has worked well within the framework for all the

work that we have been doing.

So the answer in simple terms is yes, we think it should be extended, and yes, we are working on it to get it long before the deadline or the expiration.

Mr. RADANOVICH. Thank you very much. Mr. Deputy Secretary,

thank you for being here. As you well know, I have had a long-term

desire for obtaining some legislative changes in the CVPIA, so to

follow up on the Chairman’s question, to what extent will the prescription be that the 800,000 acre-foot will require legislation in

your opinion?

Mr. GARAMENDI. I don’t think any legislation is required with regard to the CVPIA. What is required is that we move beyond the

CVPIA and get all of the water system in California into a repair

process. The CALFED Bay-Delta puts us there where we can

achieve the fixes, the kind of solutions necessary.

As to the CVPIA, we do not believe legislation is required, and

certainly, we spoke to that extensively last year.

Mr. RADANOVICH. Thank you, Mr. Deputy Secretary. One more

question, if I may. Will the department present water contracts as

a draft new contract beginning with contract negotiations on those

water contracts that expire later this year and then early in 1998?

Mr. GARAMENDI. There are two issues that are outstanding with

regard to the water contracts. The first is the issue of the Windstar

impact on those contracts and whether the language needs to be

changed. The solicitor for the Department of Interior, Mr. John

Leshy, has determined that the current language in many of the
18

contracts opens the Federal Government up to significant financial

liability, and we are now in the process of discussing with the contractors different language that may resolve that problem. We hope

for a speedy resolution of that, and if that is the case, we would

hope to have that resolved in the next few months, perhaps sooner.

The second has to do with renewal of contracts. The contracts

that are up for renewal will be dealt with as they come up. Until

the EIS is completed, those renewals will be additional short-term

extensions.

Mr. RADANOVICH. Thank you.

Mr. DOOLITTLE. Mr. Pombo is recognized.

Mr. POMBO. Thank you, Mr. Chairman. Mr. Snow, in going

through the briefing packet that you provided, I notice that there

are a number of land acquisition portions of that, and that a lot

of that money is contingent on land acquisitions.

Do you intend on proceeding with that willing buyer-willing seller arrangement only?

Mr. SNOW. Yes, exclusively willing buyer-willing seller, and if I

could add, in as many places as possible, we would like to work

with a local entity of some sort, be it a conservancy or group of

landowners that we try to work through.

A lot of the historic problems have been associated with land acquisition for ecosystem purposes, and I think we know too well the

good intentions of restoring wetlands only to create mosquito problems for the neighbors, and we have to go through those.

If we do not commit to doing that, we are not going to have a

lot of willing sellers, so we have to make a strong commitment to

working with landowners and do it exclusively on a willing-seller

basis.

Mr. POMBO. So it will be exclusively on the willing-seller basis.

Is that part of the authorizing document or is that just a commitment on your part?

Mr. SNOW. For what we are calling the early implementation program or the accelerated implementation, it is a policy statement.

Basically, that is how we are going to proceed with this early implementation program.

Mr. POMBO. Have you identified, and I know you have, but have

you identified potential sites for acquisition and if so, how are you

dealing with those property owners at this time?

You brought them into the process and discussed with them that

their properties are slated for potential acquisition?

Mr. SNOW. At this point, all we have identified is broad areas

such as the Delta or Suisun Marsh or North Bay or San Pablo Bay.

We have not targeted specific properties at this point.

Mr. POMBO. I notice that in one part, it specifically points out the

Stone Lakes Wildlife Refuge, the expansion of that existing refuge.

In order to do that, you are expanding onto private property, and

I have had constituents contact me with concern as to which direction and who is involved.

Mr. SNOW. We are aware of the conflicts and the controversies

associated with Stone Lakes. We highlighted that area because

that particular category that we proposed would deal with meander

belts as well as the potential condition to existing refuges in the

San Joaquin, Delta, and the Sacramento system.
19

We have not targeted specific acquisitions in those areas, but I

think that the point that you are making is certainly a critical

issue to us, and that is that we have to work with the local parties

that would be affected by such land acquisitions in order to have

a long-term successful program.

We do not view this as run in quickly and secure 100 acres and

we are through. We have to have a long-term sustained relationship with the local property owners in order to maintain the kind

of program that we are talking about.

Mr. POMBO. At what point will the property owners be contacted

and told that they are on the map, so to speak?

Mr. SNOW. Well, there are two separate tracks that we are on to

do that.

One is that we have already started holding regional meetings to

discuss our long-term program, ecosystem restoration activities.

The point of that is to talk about where we may be going in the

long run, what could be local impacts, and to get better ideas.

Separately, though, we will be holding local meetings to talk

about these near-term activities, to have actual workshops before

we solicit proposals from people to try to get additional input and

let people know what is going on in their area.

The other piece that fits that is that we are trying to have meetings with local entities in certain areas, such as in the Delta with

the Delta Protection Commission, to get on their agenda and describe these activities and to work with some of the local landowners.

Also, I guess I would stress that this is only a partial response

to the issue that you raised. That is why we have established something called the ecosystem roundtable. This actually has members

of people from different parts of the State with different interests,

so they are bringing these concerns to the table as we even formulate our strategy for implementing these ecosystem restoration opportunities.

It is probably not a perfect system that we have set up, but we

think we have enough workshops and contact, enough organizations, that we are providing the opportunity to make sure we run

these issues to the ground and that we do not make a mistake and

get landowners upset at the front end of a program when we are

depending on their cooperation for the long run.

Mr. POMBO. Unfortunately, and I appreciate your trying to set up

the roundtables and do as much of that as you can, but unfortunately, the property owners that are involved may be more likely

to reach out if they went to a farm bureau meeting than an ecosystem restoration roundtable, and so you can have a lot of meetings like that.

The Health Protection Agency is made up of a very diverse

group, but the property owners that are involved for the most part,

you can go all the way through your entire process and they can

be oblivious that they are even being considered.

I would like to strongly encourage you that early on in the process, when you are beginning to develop areas and maps as to where

you are going to go that you begin to contact the property owners

so that they know before they pick up their paper in the morning

and see a map that they are potentially going to be on a map.
20

I think that would avoid a great deal of the problems in the longterm.

Mr. Chairman, I understand my time has expired. I did have a

few more questions. Are we going to have another round of questions?

Mr. DOOLITTLE. Why don’t you just go ahead and ask your questions?

Mr. POMBO. Thank you. What restrictions—if you come up with

a plan and you can use South San Joaquin, you can use the Stone

Lakes area, both of which are identified as areas of potential acquisition, and you come up with a plan that the experts agree is the

best thing to do, but you have unwilling sellers in those particular

cases.

What kind of restrictions would you place upon those sellers who

happen to be within an area that is slated for acquisition on their

activities, normal farming activities? What kind of restrictions

would you place on them if they are unwilling sellers?

Mr. SNOW. Well, I guess there are a couple ways to try to answer

that, but I think that perhaps the most germane way to answer it

is that a proposal that would come in for this early implementation—that is what I am talking about right now exclusively, that

had these types of local conflicts going on would be very unlikely

to receive funding through our process, because it is incomplete as

far as we are concerned.

We are looking for projects that are ready to go and don’t have

these kinds of conflicts and controversies going on with that. So we

are going to expect programs and projects to come in where people

are already working with the local landowners to resolve those

problems.

So if we have a proposal for land acquisition where it is a patchwork quilt because they are saying they are going to have to condemn some of the parcels, it doesn’t meet our criteria for this early

funding effort.

Mr. POMBO. But see, that is exactly the problem right there. It

is just the way you described that, because it will be on the map

as slated for acquisition, and there may be a problem with a few

owners that are unwilling sellers or however it is, that there may

be a problem with that particular acquisition.

You won’t slate money to purchase that because there is a problem with it, but it will remain on the map as slated for acquisition

for habitat restoration or wetlands or whatever the overriding public use of that may be, and for ten years, twenty years, however

long this process continues, every time a county planner picks up

a map, they will see that is slated for acquisition by this process.

Every time a potential buyer of that property for farming use

comes along and begins to do his research into a particular piece

of property, he will find out that that property is slated for future

acquisition by Fish and Wildlife, Army Corps, or whoever it may

be, and that tends to have the impact on the long-term viability of

that particular parcel on the value of that parcel and will be seen

over a number of years as—they potentially will become willing

sellers because the government is the only buyer, and there is no

one else out there.
21

I am concerned about establishing this process that we are going

through and not having some way of protecting those property

owners who may not be willing sellers in this process. I understand

there are willing sellers. I have talked with a number of them, but

there are a number of them that have contacted me that are not

willing sellers, and I am very concerned about where this takes us.

Mr. SNOW. You raise a good point that I don’t have an equally

good answer for. It is actually very germane when we look at the

bypass or overflow areas on the San Joaquin where we can talk

about dealing with a flood management issue at the same time we

are talking about ecosystem restoration activities.

If you have 100 landowners lined up that think it is a good idea

to have a flood easement and conservation easement, but there is

one in the middle that does not, do you build a levee around them?

That is a fundamental question that is in our future, no question

about that, and I don’t have a good answer for resolving those

kinds of conflicts. I do know that in the near-term, to deal with this

early implementation, we are going to steer away from projects

that have that kind of—it is called implicit condemnation aspects

to them and move to projects where we can get something done and

get the benefits generated to reduce the conflict that is out there.

But in the longer run, when we look at, again, an example of a

bypass, agricultural preserve, habitat preserve, that is a more difficult issue, and we are going to spend a lot of time working on

that.

Mr. POMBO. I appreciate that, and I would really like to continue

working with you on that, because it is a concern of mine.

Mr. Perciasepe, along the same lines, the acquisition of these

properties, what is the commitment of the Federal agencies in protecting the property rights of the individuals who appear on a map

slated for acquisition even though—and we both understand that

the way this works is you will sit down and figure out the best way

to do this and come up with a map, and then you go out and try

to purchase the property. That has a lot of times been when the

problems start, but what happens, what are you going to do and

what is the commitment going to be from the Federal agencies not

to put further restrictions on those individuals who happen to not

be willing sellers in this process?

Mr. PERCIASEPE. I think first of all, I want to also reiterate what

Lester said. I believe these issues of the impact of the Federal Government is an important aspect of this and probably will be handled in a sensitive way identifying what may or may not need to

be done through any project that comes out of this process, not just

ecosystem-type projects, but also facilities that may have to be

built, a more traditional concept of government working with private property owners. I think both of those aspects are going to require a great deal of sensitivity.

There is nothing in this program that changes the existing regulatory aspects of the different agencies. We have no new authorities

granted to us by these funds or to any of the participating State

or Federal agencies, so the existing, underlying laws would be the

ones that would be enforced.

Mr. POMBO. What concerns me is some of the things the Federal

agencies have done in the past, and what I am searching for is, I
22

guess, commitment in this entire process, that those kind of things

aren’t going to happen in the future, where you have an unwilling

seller who can go through a number of years and eventually get to

the point where the only buyer for their property is a Federal agency or conservation group, and that is the only direction they can

go, and the property has been devalued because there is only one

buyer, and we end up with a situation where they are contacting

their elected representative to help them out, and it is way too late

in the process.

I think it is early in the process that we have to put this out on

the table so that these kind of things don’t happen.

Mr. PERCIASEPE. I would agree, and I think we have the agreement of the Federal agencies that this entire process, when it

comes to the use of private property for any public purposes,

whether it be facilities or easements or whatever, has to be done

in a way that reaches out to the individual property owners, and

I would agree with that.

You have my commitment that we will make sure that that happens.

Mr. POMBO. And this question, I guess, would probably be more

appropriately geared to Mr. Garamendi. Would the Administration

oppose language that would say that just because they are on a

map it would not put any added restrictions or in any way reduce

the use of that property just because we put them on a map?

Would that be possible?

I know you don’t have language in front of you or anything, but

I mean, just that general idea, is that something that you think the

Administration would oppose?

Mr. GARAMENDI. I think such language would be unnecessary. In the instance we are discussing, which is the first $143 million allocation, most of which will be spent as Mr. Snow suggested in what

are called early implementation, we will not be in a position to do

something that is not desired by the landowner.

Now, the land that is likely to be affected or desired or acquired

is land that is in unique status to begin with. It is along a river.

It is a potential wetland or it may already be a wetland or an area

in which—the Stone Lakes area which is subject to flooding today

and there are restrictions having to do with the flooding that occurs there annually.

I cannot envision specific language or even general language that

would be of use in the context of this particular appropriation.

Now, as we move into the future with the remaining other portions of CALFED, there are projects that are flood control projects.

It is clearly envisioned that a flood control project is one that may

very well require condemnation often because the landowner may

desire a friendly condemnation. There are certain tax advantages

to such an activity versus an outright sale of the land, so I don’t

think we want to preclude that.

Certainly as you understand so well from your district, flood control project is a chain and a link missing is not a project at all, so

we want to be very careful how we deal with that and not preclude

that potential which may be beneficial to the landowner.

Then the third part of this Bay-Delta program is water enhancements, meaning how do we get new water, additional water. Those
23

are what I think Mr. Perciasepe said the traditional water projects,

and again, I don’t believe it is wise to preclude both because the

landowner may desire a friendly condemnation, nor do you want—

and it may be impossible to build a reservoir or a pipeline system

or a pump without having that option available to you.

I would suggest that the point you have made is one that is well

understood. You have heard from three of us that we understand

the point you are making, but I think that given the extent of this

project across the vast reach of California, that language may very

well be very, very detrimental to achieving the goals and not carry

out the desire that you are seeking.

Mr. DOOLITTLE. Mr. Snow, since this is sort of free money that

you are spending; in a sense, this isn’t coming out of your pocket.

What incentives are there for you to get the most bang for the

buck?

Mr. SNOW. Having just filed my taxes, I am not convinced that

it is not my money.

Mr. DOOLITTLE. Thank you.

Mr. SNOW. A taxpayer in your district, I might add, and that is

a question that everyone has asked, whether the stakeholders are

going to hear from our elected officials in California or back here,

how do we get the bang for the buck on this.

You will even notice in this proposed allocation of funds, that we

have included a specific category for monitoring of ecosystem

health. That has to be part of any effort that goes forward as improving the way that we monitor these projects as individual

projects if in fact they are doing what we said they are going to

do, is the riparian habitat coming back the way that it said, and

are fish responding to it.

In our program, we are developing something that we call ecosystem indicators, which are basic yardsticks to be used to see if

we are going where we said we are going to go, but then also perhaps more relevant to these specific funds and the projects that

would enable, we do envision a very specific monitoring program

where we set up baseline conditions and then monitor as the actions are taken to see if we are getting the results.

If a fish screen is being put in place, we want to monitor how

that fish screen is working. This is particularly important were we

may in fact be funding innovative approaches to fish screening, not

just a cookie cutter approach that, here is the mandate for the fish

screen, go do it everywhere.

If we are allowing some creative approaches, then we need to

have a monitoring program in place to make determinations about

the least cost and most effective way to screen fish out of diversions.

I can’t follow up with additional information on the broad ecosystem indicators and our strategy, but the actual monitoring will

be developed to fit the individual projects to make sure that the

projects are being implemented properly.

Mr. DOOLITTLE. Well, you hit upon an area I was specifically interested in. Maybe Mr. Garamendi or one of the other gentlemen

here will comment about it.

There is one reclamation district that had a proposal to protect

fish. It was not a fish screen. It was some sort of an acoustic de-
24

vice, much less expensive, I guess many times less expensive than

a fish screen, and according to their experts it would have saved

80 to 90 percent of the fish, but the Fish and Wildlife Service has

apparently set a standard that requires, I think it is 98 percent of

the fish to be saved. I guess zero percent are being saved today.

My question to one of you gentlemen is, react, please, to this situation where there was an innovative, non-fish screen approach

and it was vetoed by one of the Federal agencies.

Mr. GARAMENDI. Which one did that?

Mr. DOOLITTLE. Fish and Wildlife Service.

Mr. GARAMENDI. Mr. Chairman, you asked for my reaction, and

my reaction is that that is not the proper answer that was given

by the Fish and Wildlife if you cite the facts totally and correctly.

We must be creative and innovative, seeking methods that are

new and in some cases untried. We have to use what we are calling

an adaptive management approach, but frankly, the answers are

not known on many of the wildlife issues today, and we need to try

something, test it. If it doesn’t work, then come back and make

modifications. Only in that way will we make progress, and I am

a very strong advocate of that, and I would certainly want to see

the Fish and Wildlife Service be using that adaptive management

process.

I know that Mike Spear is an advocate of that. He is our regional

manager on the West Coast, and I would think that we will see

more of that. I would be interested in having the specific facts with

regard to this one. It might prove to be a useful example for us all.

Mr. DOOLITTLE. I will forward to you the specific facts and would

request that when you review them, that you make a response to

the committee.

I think a lot of good can come out of this if people are willing

to be flexible and reasonable as to how these things are done, but

to demand that—I mean, a fish screen is not necessarily a perfect

answer. It is certainly a very expensive solution, if it really

amounts to much of a solution, and I guess that is perhaps another

question.

Mr. GARAMENDI. I look forward to getting the specific information and I will respond to you. I have given you my general impression based on the information you have given me. The bottom line

is, in order to deal with the Bay-Delta issues, the water issues of

California, we must be creative and that means trying new things.

Mr. Chairman, I am apologetic, but I have an airplane that I

must leave for.

Mr. DOOLITTLE. I appreciate your staying. We started late. I

would encourage those of you who are able to remain to do so, but

I understand this is a very difficult situation.

I think, Mr. Garamendi, you have answered my questions, and

Mr. Pombo is satisfied, so why don’t we ask the rest of you to remain, and we will excuse the Deputy Secretary to make his plane.

Mr. GARAMENDI. Thank you very much.

Mr. DOOLITTLE. And I think that we are just about concluded

with the questions for the rest of you. I hope at least Mr. Snow can

stick around for the second panel, and as many of the rest of you

as are able.
25

When you hear the testimony of our final witness on the second

panel, I would be interested in engaging you in a bit of further conversation. I think when you hear the testimony of Mr. Payne, you

will see what I am driving at here. In fact, I truly regret that I was

not aware of his testimony earlier. I would have asked the Corps

of Engineers to be present for this to get their input, but it was

too late to do that.

Let me ask you this question now, Mr. Snow. In your interchange with Mr. Pombo, you certainly made it clear that you are

pursing willing buyer-willing seller. I guess the question I would

follow up with is, what conditions are necessary to foster the climate of a willing buyer-willing seller?

In other words, it is certainly possible to make the pronouncement that you are going to do that, but then every time somebody

turns around to do practically anything with land that is in one of

these sensitive areas, you have to have some governmental agency’s permission, and we all know that they communicate with each

other, local, State and Federal. The State agencies will pick up the

phone and call the Federal and vice versa, hey, we have a situation

here, an interest in this, move slowly with your permit or whatever. I do believe that that occurs, and you will see in the testimony of Mr. Payne someone who has been frustrated for years over

this.

In fact, the Corps of Engineers is one of your participating agencies, right, in CALFED, and the real estate division apparently

doesn’t communicate with the CALFED aspect of the operation.

What do you do about this when people become very frustrated

and are deemed to be willing sellers because they finally don’t

know what else to do. Essentially, they give up.

Are you sensitive to these problems and what are you going to

be doing to take that into account?

Mr. SNOW. Yes, I am, and I am going to do something different

than the Corps did in this case. This will be the short answer.

I have some general familiarity with the issue that you are referring to with Mr. Payne’s property, and it is a truly unique situation. I am not sure I have ever run across anything quite like that,

and I will give you one kind of specific response as to how I think

we want to do business, and I hesitate to do this, because I know

that you have on your next panel someone from the Nature Conservancy.

But I think in fact the Nature Conservancy provides a model

that we want to work with, and that is that is not Federal or State

agency acquisition of property. It is our enabling organizations

such as the Nature Conservancy that has a track record of working

with the local landowners to do this in a cooperative fashion to acquire property.

I think that is what we want to see happen, is to be able to see

conservancies and other organizations that have at their roots the

local property owners and local interests participating in those

kinds of decisionmaking processes.

Where that doesn’t work, then we will need to have a more traditional property acquisition, but we have to be mindful of these

kinds of issues because of the sustained effort that we have to

maintain. If the reputation is that the land acquisition that re-
26

sulted from the CALFED program is going to cheat you out of the

value of your property, then there is not going to be willing sellers

out there, and there are going to be people back here testifying

don’t give them any more money.

We have that in mind as we proceed forward with this. We have

to deal fairly, and that is on both sides. I mean, if you give away

too much money, then you have people saying that it is a gift of

public funds, so you have to have a fair and open approach, and

everybody knows what the rules are.

I think that philosophically, that has to be the foundation of this

program, because we are not in this for a flash in the pan where

we are going to buy a couple hundred acres and we are through

and we don’t care what people think about is.

We are in this for the long haul. The efforts that we are talking

about you will see referred to in here, 20 to 25 years of implementation. To be able to sustain that, we have to have good relationships with the property owners and local government and local

businesses.

Mr. DOOLITTLE. I am very encouraged to hear that response. I

am encouraged that you are in charge of the program, and you

have a great opportunity to actually accomplish something in an

area where so little has been accomplished in the past.

I hope, and as long as you are mindful of the fact that there are

ways to get someone’s property short of condemning it, and that

you will work to resist allowing those conditions to exist, I think

it will be a very, very positive thing.

Let me thank all of the members and the ranking members of

our panel for being here. We will have no doubt a few additional

questions to submit to you in writing, and we would ask for your

prompt reply, and we will hold the hearing record open for that

purpose.

With that, we thank you for being here. Those who can stay,

please do, and we will understand if other things must take you

away.

Mr. SNOW. Thank you, Mr. Chairman.

Mr. DOOLITTLE. I have something, because of this time change,

that is pressing on me. I am going to declare a recess for five minutes, and then we will come back for the second panel.

I will ask our second panel to come forward and remain standing

for the oath for your testimony.

Please raise your right hands. Do you solemnly swear or affirm

under penalty of perjury that the responses given and the statements made will be the whole truth and nothing but the truth?

Thank you. Let the record reflect that each answered in the affirmative. Ladies and gentlemen, we welcome you here to the Subcommittee hearing, and I apologize for the inconvenience of this

delay.

The lights there in front of you will indicate when your five minutes are up. It isn’t life or death if you go over it, but please try

to use it as a rough guide, anyway.

Let me introduce the panel. We have Rosemary Kamei, Director

of the Santa Clara Valley Water District; Ms. Leslie Friedman

Johnson, Director of Agency Relations of the California Regional

Office of the Nature Conservancy. We have Ms. Sunne Wright
27

McPeak, President and CEO of the Bay Area Council; Mr. Richard

K. Golb, Executive Director of the Northern California Water Association; and Mr. W. Ashley Payne, owner of the Ashley Payne

Farms.

We appreciate your being here, and we will recognize Ms. Kamei

for her statement.

STATEMENT OF ROSEMARY KAMEI, DIRECTOR, SANTA CLARA

VALLEY WATER DISTRICT

Ms. KAMEI. Thank you, Mr. Chairman and members of the Subcommittee. Thank you for providing me an opportunity to submit

the statement on the CALFED Bay-Delta program on behalf of the

Santa Clara Valley Water District, a member of the California BayDelta Water Coalition, and on behalf of the Bay-Delta Advisory

Council.

California’s economy is one of the strongest in the world, and

that strength is dependent on sufficient and reliable supplies of

water. The San Francisco Bay-Delta Estuary supplies 20 million

people and supports an $800 billion economy and job base. The Bay

Area is the number one business location in the United States and

second in the world.

Santa Clara County, the Silicon Valley, is the single most important high-tech center in the United States, being home to over

4,000 high-tech companies. The Silicon Valley receives one-third or

over $1 billion of the venture capital that is invested in the United

States annually and employs approximately 230,000 people.

These growing industries as well as our homeowners need a reliable source of high quality water coupled with an improving environment to produce the products that fuel the economic engine and

to provide healthy surroundings to raise our children.

Santa Clara County is home to 1.6 million people, and it constitutes 25 percent of the Bay Area’s total population and economy.

On an average year, half of the water supplied to Santa Clara

County comes from the Bay-Delta region. A reliable and adequate

supply of high quality water and environmental quality is important to the businesses and residents of the Silicon Valley.

As a member of the Urban Water Users Community and an active participant in the CALFED Bay-Delta program, I am pleased

with the progress of the program and the degree to which the program has promoted an open and consensus-building process in developing a long-term solution to the problems facing the Bay-Delta.

The program has a very ambitious schedule, but I think that it

is important for CALFED to continue with the momentum that it

has generated. From the urban perspective, the CALFED process

is on track to increase water supply reliability. This is absolutely

critical to maintaining the quality of life, not just in my area but

throughout the State.

The Bay-Delta Advisory Council, also known as BDAC, is a federally chartered stakeholder group which provides policy guidance

to CALFED in its development of the long-term Bay-Delta solution.

It is a 32-member council consisting of representatives from urban,

agricultural, environmental, business, and fishing interests. It is

the formal forum for stakeholders to discuss issues, understand the

concerns from all of the interests that will be affected by the
28

CALFED Bay-Delta program, and to provide recommendations to

CALFED in developing balanced alternatives for addressing water

problems in the Bay-Delta.

Although the CALFED program requires all parts of the longterm solution to move forward together, the CALFED agencies and

stakeholder interests have recognized an immediate need to begin

implementation of the ecosystem restoration element. Because the

ecosystem restoration element is designed to serve as the foundation for all of the other program elements, immediate restoration

action is necessary to achieve the more long-term water supply reliability and water quality benefits.

The California Bay-Delta Water Coalition, including the Santa

Clara Valley Water District, strongly supports the Administration’s

budget request for funding the interim CALFED ecosystem restoration program. The coalition believes that it is critical that all parties in this process, Federal, State, local, and stakeholder interests,

contribute financially to CALFED Bay-Delta.

The project selection and funding prioritization process is being

performed in a manner that fosters cooperative planning and implementation with all the Federal, State, and local agencies and

the stakeholders. Prioritization is based on a rigorous evaluation of

environment needs, biological benefits, technical feasibility, cost effectiveness, potential environmental and third-party impacts, and

consistency with CALFED goals.

I believe that this ecosystem roundtable process is the most effective method for coordinating overlapping agency programs and for

bringing meaningful involvement and stakeholder buy-in.

Thank you so much for this opportunity.

[Statement of Rosemary Kamei may be found at end of hearing.]

Mr. DOOLITTLE. Thank you. Ms. Johnson, you are recognized.

Ms. JOHNSON. Yes, I am sorry, I was just distracted.

STATEMENT OF LESLIE FRIEDMAN JOHNSON, DIRECTOR OF

AGENCY RELATIONS, CALIFORNIA REGIONAL OFFICE, THE

NATURE CONSERVANCY

Ms. JOHNSON. My name is Leslie Friedman Johnson and thank

you, Mr. Chairman, for the opportunity to testify here today.

I would like to submit for the record a coalition statement on behalf of the California Bay-Delta Water Coalition. Several of the

panelists here before you are part of that coalition, and we did prepare a joint statement which we would like to submit for the

record.

Mr. DOOLITTLE. It will be submitted.

Ms. JOHNSON. In addition to the coalition’s statement, I have

submitted a personal statement in which I tried to address the

questions that you asked of me in my invitation letter, so I would

like for that to become part of the record as well.

Mr. DOOLITTLE. Yes, it will be.

Ms. JOHNSON. Again, my name is Leslie Friedman Johnson. I am

director of agency relations for the Nature Conservancy in California. The Nature Conservancy is a membership organization. We

have over 900,000 members nationwide. We are in the business of

land and biodiversity conservation.
29

In California, we have been active for more than 20 years in the

Bay-Delta watershed doing ecosystem conservation and restoration

projects, so I think that qualifies us to speak to some of the issues

at hand today.

We do share the CALFED objective of restoring ecosystem health

in the Bay-Delta watershed, and for that reason, we have been participating in the CALFED process since virtually the day after the

Bay-Delta Accord was signed.

As I said, I have submitted a lot of information for the record in

my written statement. I would like to focus on just a couple of elements of that statement and perhaps elaborate on them for our

purposes here.

I would like to begin with talking about why we need strong Federal support at this time. I am using that as a euphemism for lots

of money, why we need that in the process. As my colleague here

just mentioned, ecosystem restoration is the foundation for the

CALFED solution that is being built.

I would like to characterize it a little bit differently than you

have heard it characterized today, maybe a little background first.

Habitats and species in the valley, in the Bay-Delta watershed

are in decline, have been in decline for a long time. We are down

to a point where we are down to single-digit percentages of a lot

of species and habitat types. It has gotten to the point where there

is virtually no slack left in the system, to the point where every

acre-foot of water, every acre of land becomes a potential battleground, a potential flashpoint for controversy.

We believe that we will continue to have controversies until this

situation is fixed, until we restore some of the slack or the flexibility to the system.

We tend to talk about the CALFED elements, ecosystem restoration, water supply reliability, water quality, as though they are discrete, separate elements. I would just like to try to make the point

that we believe they are intricately linked, and that in fact, restoring the ecosystem is in and of itself an activity that will help enhance water supply reliability. It is not a separate action. It is an

action to help restore reliability.

This is something we feel very strongly about. What the money

would be for in the short-term, and I would like to spend a little

bit of time talking about the urgency of the need for support. Everyone says that we need it, that it is a good thing, that we should

do more of it.

What I would like to really highlight is the urgency. There are

urgent actions that need to be done. There are species that are on

the brink. There are species that continue to be in decline. If they

are allowed to continue to decline, water supply reliability will be

impacted further than it has been already.

In addition to emergency actions to deal with species at risk,

there is also a lot of research and development, demonstration

projects that need to be done for habitats for which restoration

technology is not well developed. We know a lot about how to restore some, but virtually nothing about how to restore others.

We also need to act immediately so as to preserve our options so

that we can do the ecosystem restoration as we learn more about

what needs to be done. By that, I mean we need to acquire land
30

before it is converted to urban or high investment uses if we are

to bring it back. We also need to have significant funding in order

to encourage projects on the scale that we need to actually restore

ecosystem health. Little piecemeal projects that deal with single

issues or single species that are not done in a large scale, coordinated way are not going to get us to a place where we can actually

say we have ecosystem health.

I think that the request, the nature of the Administration’s request this year, that it is for a lump sum. We support that very

strongly. We know that there has been talk about perhaps dividing

it up amongst the agencies. We fear that that would undermine

CALFED’s ability to use the funds in a coordinated fashion. We

really think the lump sum is the right way to go.

That concludes my statement. I would be happy to answer any

questions, and again, I thank you for the opportunity to testify.

[Statement of Leslie Friedman Johnson may be found at end of

hearing.]

Mr. DOOLITTLE. Thank you very, very much. Ms. McPeak, you

are recognized for your testimony.

STATEMENT OF SUNNE WRIGHT McPEAK, PRESIDENT AND

CEO, BAY AREA COUNCIL

Ms. MCPEAK. Thank you, Mr. Chairman. As you introduced, I am

here representing the Bay Area Council, a business-sponsored

CEO-led public policy organization established more than 50 years

ago to promote the economic vitality and environmental quality of

the nine counties that rim San Francisco Bay.

I also want to share a viewpoint from the perspective of business

throughout California and in addition, I am very honored to serve

on the Bay-Delta Advisory Committee as vice Chairman.

The Bay Area Council and business leaders throughout California strongly support the CALFED process and endorse this Federal investment in the continuation of the process in this fiscal

year. Put quite simply, this is the only hope in California to reach

an accord or sustain the accord reached in December of ’94 and

continue to address the challenges of securing a reliable quality

water supply for the economy which also is dependent upon restoration of the environment in the Bay-Delta ecosystem.

You most eloquently set forth the importance of the Bay-Delta

process and the challenges we face in order to achieve success in

your opening comments. I couldn’t State them any better.

Let me just say in terms of are we in it for the long haul, the

business leaders that head my organization and those that have

been very involved in California got into this process to support the

Bay-Delta Accord because it was quite clear that the political paralysis, the gridlock in policy in California, was seriously threatening the economic recovery and sustained economic prosperity for

California and therefore, also for the nation.

I am quite personally surprised that we have been able to get

along this many years without a workable solution to assure a reliable water supply for the State.

We don’t have any more time. If we do not proceed with the

CALFED process, we seriously threaten and endanger the economic
31

engine known as California, the Bay Area, and therefore, the sustained economic growth of the nation.

You can be very pleased and proud of leadership exerted here by

your committee in this process. It is only because it is stakeholderdriven, Federal-staked, multi-agency, bipartisan that we have a

chance to succeed.

Economic prosperity and environment quality must go hand in

hand and we know that quite dearly, particularly in the region that

surrounds the Bay-Delta Estuary. What is proposed here for the

Federal appropriation and the investment in CALFED is an approach to implement as we continue to address the challenges.

I want to also share with you that my members have little tolerance for wasting time, but also an appreciation for what it means

to have a sustained commitment to seeing a process through.

The timetable we are working on with the EIS-EIR process is one

that we want to see met. You heard the commitment from Lester.

I can assure you that Chairman Mike Madigan and myself are also

committed to meeting that timetable, because it is only with that

intense, sustained focus do we make any progress.

I believe that we can all be quite confident because there is such

a sense of urgency in California, and therefore, both the Federal

and State projects that we succeed with the CALFED process that

we will succeed.

I am happy to answer any questions.

[Statement of Sunne Wright McPeak may be found at end of

hearing.]

Mr. DOOLITTLE. Thank you. Mr. Golb, you are recognized.

STATEMENT OF RICHARD K. GOLB, EXECUTIVE DIRECTOR,

NORTHERN CALIFORNIA WATER ASSOCIATION

Mr. GOLB. Mr. Chairman, my name is Richard Golb. I am executive director of the Northern California Water Association. The

NCWA is a nonprofit organization that represents both public and

private water agencies throughout the Sacramento Valley.

I really appreciate the opportunity to testify here today, and also

appreciate your time commitment despite the distractions of earlier

and your proceeding on with this hearing. It means a lot to all of

us who travelled east from California to testify.

California’s agricultural interests are supportive of the CALFED

process as well as the CALFED ecosystem goal, and the whole objective of the CALFED plan which is to restore water supplies for

California’s cities, businesses, and farms and to restore the ecosystem for all species and habitat of the species that depend on it.

We view those two goals as interrelated, and we view them in

such a way that they are not mutually exclusive, but mutually

achievable, and in fact, this is in a similar vein to support that was

echoed earlier for Governor Wilson’s 1992 water policy where he

advanced the principle that all interests have to advance at the

same time, and that any one interest shouldn’t get ahead of the

others.

Our support for the CALFED process is consistent with the governor’s 1992 water policy. Following on that theme, CALFED

adopted a set of six solution principles earlier, and they are very
32

important because what they do is they guide CALFED as it attempts to develop a preferred alternative.

Now, several of the principles that CALFED adopted do the following. First, they ensure that the final solution is equitable to all

interests, also that the preferred alternative doesn’t result in any

redirected impacts to other regions or other interests. Then one of

the final principles is that it is a durable plan that will last, that

has shelf life, so it addresses both California’s economic needs and

environment needs.

We believe the success of the CALFED program is imperative for

the success of California’s economy and the long-term health of our

environment.

As Sunne indicated, the ecosystem roundtable is a 19-member

subcommittee of the Bay-Delta Advisory Council. The ecosystem

roundtable of which I am a member is a representative work group

comprised of all major interest groups and all major stakeholders

in California.

The mission is to assist CALFED and the Bay-Delta Advisory

Council to come up with recommendations for specific projects to

resolve and identify priority needs throughout the whole Bay-Delta

watershed. Our current goal is to go through this process and make

an initial recommendation, hopefully by sometime this summer so

that we can move forward with some of the projects that are available and ready to go now.

Our view so far of the ecosystem roundtable is that it is an accountable and balanced process. There are always reasons to be

skeptical, and there is always great interest when a group of people

get together and attempt to allocate State and Federal dollars.

That interest is healthy. The skepticism, to an extent, is probably

healthy as well, but from our perspective, so far, it is working well

and we view it as a process that we believe in. There are clearly

established criteria for how projects will be selected, strong measures of good science for how the priorities will be established, and

we view those steps which Lester Snow identified earlier today as

balanced steps that will lead us to very good projects.

Congressional support for the President’s budget request for $143

million will allow CALFED and the ecosystem roundtable and the

Bay-Delta Advisory Group to begin work on both immediate

projects and long-term restoration projects that will provide significant water supply reliability benefits for agricultural needs and

urban and municipal needs.

The funding will also ensure that restoration projects that have

a current local fund share as well as current State and Federal approval can move forward now.

For example, State and Federal agencies have long advocated

that agricultural water suppliers, the San Joaquin River and the

Sacramento River and in the Delta, should screen their diversions,

should place large, mechanical screens around their diversions to

slow the water as it passes the diversion and prevent juvenile

salmon from being trapped at the pumps.

There are a number of agricultural water suppliers that have accepted the challenge and stepped forward to begin the process of

installing these screens on the diversions. It is a very lengthy, expensive process.
33

At this point now, we have a number of agencies that are ready

to proceed and a number of water suppliers, public and private,

that would like to install these diversions and are willing to do so.

These funds that the President has requested will help CALFED

finance those projects.

In conclusion, I guess what I would like to say is that Federal

support for the CALFED process is imperative, and that means the

support of the agencies and the support of Congress.

What we need to make sure that CALFED succeeds is a full commitment, a commitment of financing and a commitment to adhere

to the accords, the agreements that we have reached in California

such as the 1994 Bay-Delta Accord to make sure that we have the

authorization, the authorities, the necessary financing and the

agreements all together collectively to finance the initial projects

that will lead to the long-term projects that CALFED is now developing.

Again, Mr. Chairman, thank you for conducting this hearing, and

I would be pleased to answer any questions at the conclusion of Mr.

Payne’s testimony.

[Statement of Richard K. Golb may be found at end of hearing.]

Mr. DOOLITTLE. Thank you. Mr. Payne, you are recognized.

STATEMENT OF W. ASHLEY PAYNE, OWNER, ASHLEY PAYNE

FARMS

Mr. PAYNE. Thank you. Mr. Chairman, members of the committee, my name is Ashley Payne. I am a rancher in Yolo County,

California. I appreciate the opportunity to testify before you today

and your Subcommittee, particularly from the perspective of a

landowner who has property in the CALFED acquisition area.

My involvement with the Federal land acquisition process has

been with the U.S. Army Corps of Engineers, the Corps’ effort to

acquire the Little Holland tract, an island in the delta that my

brother and I own. While my experience may be somewhat unique,

it does provide some lessons from which the CALFED land acquisition program can benefit.

Little Holland tract is a 1,630-acre delta island in southeastern

Yolo County, with 450 acre-feet of appropriate water rights. In

1995, Congress passed legislation directing the Corps to acquire

Little Holland tract, and funds were appropriated to carry out the

acquisition. To date, it appears that we are still a long way from

finalizing acquisition of the property.

The Corps has appraised the property and offered us $735,000

for the island. This is far less than the fair market value of the

property. In 1992, a private appraisal valued the property at

$2,500,000. In 1995, Congress made up to $3,300,000 available for

the acquisition.

There were several reasons for the low appraisal by the Corps

that have emerged. First, Federal appraisal standards preclude the

use of anything but private-to-private sales when selecting

comparables to determine the fair market value of a parcel. Federal

appraisal guidelines do not permit the use of transactions that involve a nonprofit or the State of California, both of which have

made significant acquisitions in the Delta.
34

Secondly, the Corps does not have a solid understanding of water

rights and their value. During our recent discussion with the

Corps, representatives of the agency acknowledged that the Corps

had not assigned any value whatsoever to the appropriate water

rights associated with the Little Holland Tract.

Senior appropriate water rights similar to those associated with Little Holland tract have sold recently for $1,500 per acre-foot.

That would place the value of the water rights alone at $2,200,000.

Third, the Corps real estate commission seems to operate in

somewhat of a policy vacuum. For example, the real estate division

has never consulated with their Corps colleagues involved in

CALFED to determine whether the Corps would have an interest

in acquiring the water rights of Little Holland. We did, and the answer was an unqualified yes.

Finally, the Corps has been unable to discriminate between the

value and therefore, the price that should be paid for varying qualities of habitat. What I think is that the Corps appraised comparative value of all inundated land equally regardless of the quality

of the habitat.

To summarize, there are important key lessons out of Little Holland tract and experience that may be relevant to the committee.

First and foremost, it is important which agencies are given responsibility for carrying out the land acquisition program. Certainly the Corps of Engineers should not have a role in this part

of the CALFED program. They lack the expertise, and in particular, they lack the knowledge of water rights. In my view, the

Bureau of Reclamation should have the lead in this process.

Two, there should be clear lines of communication between the

real estate division of various agencies that operate in the valley

and the Delta, and the Federal officials involved in the CALFED

process. It should be clear to all Federal officials involved in land

acquisitions in the region that CALFED has set a high priority on

acquiring prime habitat and water rights for environment purposes.

Three, a concerted effort must be made to ensure that the Federal Government is able to quickly and efficiently determine the

fair market value of prime habitat and at the same time, carry out

the acquisition in a timely manner.

Four, Federal appraisal standards should be modified to allow

the use of sales involving nonprofit organizations and government

agencies. The Delta and the islands within the Delta are very

unique, and the primary sales of late involve either nonprofit organizations or government agencies. Automatic exclusion of these recent sales results in appraisals that do not reflect the current value

of the land and water rights.

In conclusion, as you can imagine, this has been a very frustrating experience. This is a prime piece of property with wetlands

and wildlife. Congress has instructed the Corps to acquire the

property including the water rights and the funds have been appropriated, yet 15 months after the Congress directed that the property be acquired, the sale has still not closed.

Certainly, if this kind of experience is repeated, it will undermine the kind of willing seller requirement that will be needed for

an aggressive CALFED land acquisition program to be successful.
35

Mr. Chairman, while my situation might have been somewhat

unique, I understand you have testimony before you that has been

submitted from other landowners that reflect similar concerns. I

am the landlord, I am the landowner who would like to be allowed

by the Corps to fix my levees and farm the land or sell it at a fair

market value, neither of which I can presently do.

Thank you for this opportunity to testify.

[Statement of W. Ashley Payne may be found at end of hearing.]

Mr. DOOLITTLE. Thank you. Ms. Johnson, Mr. Payne mentioned

various recommendations about how land acquisitions should be

handled in the Bay-Delta program. What is your perspective on

these recommendations?

Ms. JOHNSON. On these specific recommendations?

Mr. DOOLITTLE. Yes.

Ms. JOHNSON. I think that if gestures are made, that if interest

is shown by the government to acquire land, that they should follow through as expeditiously as possible.

I think that the CALFED program provides an opportunity to see

these things happen in a more coordinated fashion to identify the

appropriate agency to take title.

One of the situations that we have now is all of the different

State and Federal agencies who have land acquisition authority or

responsibilities have different priorities, different mandates, different processes for completing those.

Some are more efficient than others; all have fairly lengthy bureaucratic needs that they need to move through.

Mr. Snow, in his testimony earlier in answering a question, suggested that one way to go about this might be to have money granted to organizations that can do the kind of work in a more expeditious manner. I would support that.

The other recommendation, and I am sorry, I didn’t make a note

of each of the recommendations he made. Perhaps if you have a

specific question about one of his recommendations, you could refer

me to it.

Mr. DOOLITTLE. Well, you have heard an outline of the problems

that he experienced in trying to sell his property. Here you have

a situation where the Corps has actually determined that it is in

the nation’s interest to get it. It has been authorized, money has

been appropriated, and yet we still can’t accomplish it and haven’t

accomplished it. Hopefully, it can happen.

Ms. JOHNSON. I can say that we have extensive experience working with a variety of agencies on land acquisition.

Mr. DOOLITTLE. Does one stand out over the other in terms of

being easier to deal with?

Ms. JOHNSON. It is very highly variable. It depends on the deal,

it depends on the time, it depends on whether the money is available before going in to try and do the deal or if they are trying to

solicit it after the fact.

On the whole, we have had very good experiences working with

them. I know that landowners as a rule have expressed a preference for working with private entities over working especially

with the Federal Government.

Mr. DOOLITTLE. So the Federal Government would rank last in

the agencies to be dealt with?
36

Ms. JOHNSON. As I said, it is highly variable, and it depends on

the deal. I think that what CALFED is proposing is to come up

with a mix of approaches that will accomplish what needs to be accomplished for its mission.

Mr. DOOLITTLE. The Corps isn’t here to defend themselves, but

I don’t know—Mr. Payne, were these people in the real estate division, even though they were with the Corps?

Did these people live in California or was this something that

was done back in Washington, D.C.?

Mr. PAYNE. No, this has been handled by the Sacramento department of the Corps.

Mr. DOOLITTLE. How could you live in California and not recognize the water rights issue? That sounds like it is an absolutely different proposal.

Mr. PAYNE. We requested private counsel.

Mr. DOOLITTLE. Well, I guess no one is here to defend the Corps

today in this group, and they are supposed to be one giving live testimony in committees, even in this one. Of the various Federal alternatives, they are thought to be one of the more reasonable Federal agencies to deal with, but they have their problems, too.

Ms. Kamei, having once resided in the Bay Area for a number

of years, I am intrigued that it is your assertion that this is the

number one business location in the United States. Is that a point

of view accepted by the whole or is that local pride in the Bay

Area?

Ms. KAMEI. Having lived in the Bay Area 16 years, perhaps it

sort of grows on you, but it is generally the case and it has attracted quite a number of firms, especially the high-tech firms, to

our area, and I know there is always the element of going to other

areas, but it seems to be one that draws people to the West Coast.

Mr. DOOLITTLE. And you said it is the second in the world. From

that list you are using, what is the first in the world?

Ms. KAMEI. Singapore.

Mr. DOOLITTLE. Singapore is the first business location in the

world?

Ms. KAMEI. And I did confirm it with my colleague who is representing business here today, Sunne, and she might have more information to add.

Mr. DOOLITTLE. OK.

Ms. MCPEAK. Fortune magazine published in November of ’94

their list as they do annually of best locations for business within

the United States and in the world, and that is the ranking that

Rosemary is quoting.

They change from year to year their ranking, Mr. Chairman.

Mr. DOOLITTLE. Is this a thing that takes into account the number of five-star hotels and things like that? Are there all those in

the rankings?

Ms. MCPEAK. Actually, no. In that particular year, Fortune hired

a consulting firm who looked at knowledge-based industries and

what the change was happening globally, and so that also helps explain the ranking internationally of Singapore, so it was more looking at what has been the trend in comparative advantage and the

globalization.
37

Mr. DOOLITTLE. That is very interesting. Let me ask you, Ms.

Kamei, how are the urban water users going to approach the water

use efficiency program that is contained in all three of the longterm management alternatives?

Ms. KAMEI. One of the things that we are working very diligently

with in the CALFED program is how conservation programs and

other programs and what we call BMPs, best management practices, can be put in place for the short-term and long-term and

making that commitment.

We signed an MOU, a memorandum of understanding, among

the water users to implement those BMPs.

Mr. DOOLITTLE. Ms. Johnson, can you give us some more details

on the role that Nature Conservancy is playing in CALFED land

acquisition efforts?

Ms. JOHNSON. Well, to my knowledge, CALFED has no land acquisition efforts to speak of yet. It is not entirely clear how that

is going to play out.

What we are doing very aggressively now is trying to develop

projects for working with others with landowners, with local conservancies, with a variety of agencies and interests to try and develop the projects, get them ready to go so that when the money

is made available, it could be spent effectively and quickly.

We are working in a number of areas that overlap not coincidentally with the CALFED maps that you have seen in your packet.

Mr. DOOLITTLE. Let me ask my colleagues if we could have one

round of questioning. Would anybody object if we just each ask our

questions?

Mr. POMBO. No.

Mr. DOOLITTLE. I promise I won’t take long. The 800,000 acrefeet of water for environmental purposes, would anyone care to

comment just as to the relative importance you assign to clarifying

exactly what that means in order to be able to resolve so many of

these issues that seem to depend upon that?

Mr. GOLB. I will try. The current situation now with the latest

water allocation announcement which is at best unfortunate, and

this is a classic example of the type of situation that led us to form

CALFED and urge CALFED’s formation in 1994.

From time to time, we are going to see these problems arise, and

I don’t think we should try to skirt the issue. They can be extremely dangerous to this fragile coalition that we worked so hard

to put together, but they also stress something very important, and

that is that if CALFED isn’t successful, we will face more situations like this every year.

The future economic of California agriculture cannot withstand

more of these types of situations where water supplies are uncertain or water supply cutbacks—that they will continue to face

those. The business interests can’t either, so I think that we look

at it is, we have a difficult situation in front of us.

I have heard the administrator of EPA, Mr. Perciasepe, and the

Deputy Secretary, both indicate they were willing to try to work

this out to the best of their ability. I take their word for it, and

I think they will.

We are going to have these things from time to time, and the coalition that is here before you today recognizes it is a problem for
38

us, but in the long run, CALFED’s success is imperative, and that

means full funding is necessary as well as the full Federal support

is necessary.

It is a difficult situation, but hopefully, we will be able to get

through it, but it shouldn’t detract support from the CALFED program.

Ms. MCPEAK. The 800,000 acre-feet issue from CVPIA and the

controversy that continues today is illustrative of the major challenge faced by a project or a program such as CALFED which is

to understand there has to be a resolution of the issues that treat

all parties fairly.

No effort to protect the environment or restore habitat that

doesn’t recognize the reality of meeting on a long-term basis a reliable, sustainable water supply for ag, for urban, for industry, is

simply going to fail, and that is where we are at.

The CALFED process represents that hope to look at how we satisfy all those needs. I want to assure you that the Bay Area business and Bay Area Council is very concerned about it. We have

formed—Rosemary is one of four co-chairs representing four stakeholders, a Bay Area Water Policy Forum. It was launched by Dick

Rosenberg, who is the past chair, retired chair and CEO of Bank

of America.

Next week, we will be discussing the 800,000 acre-feet issue to

try to better understand it, but the fact of the matter is that in isolation trying to restore habitat without understanding it must go

hand in hand with meeting water needs in the State, is simply not

going to succeed ultimately.

Mr. DOOLITTLE. Let me follow up with you, Ms. McPeak, if I

may. I believe you are really from the east Bay, but since you represent the Bay Area Council, may I ask you if you could give us

details about what money or water, if any, the city of San Francisco, which gets its water from its system, has contributed to the

Bay-Delta restoration efforts?

Ms. MCPEAK. Actually, I should be even more forthcoming in disclosing that I am actually from the San Joaquin dairy and grew up

on a dairy farm. You have to have done that to really understand

what the perspective of farmers is in all of this.

All of the water agencies within the Bay Area are committed to

the Bay-Delta process and the urban water agencies within the

State of California which the city and county of San Francisco is

also one as is the Santa Clara Valley Water District involved in the

CALFED process.

They individually as water districts are investing sums of money

to look at what is it going to take to reach a solution. They are collectively through the California Urban Water Association participating in the process. As you are probably very familiar with, many

issues that San Francisco Department of Water and Power has specifically been involved in trying to resolve on their watershed, I

would just to be progressive in looking at how they carry their fairshare responsibility in restoration of the habitat, even though they

are not taking out of the Delta pool.

Mr. DOOLITTLE. If you had the information today or else later,

maybe just tell us in a letter what they actually are doing to contribute to Bay-Delta restoration effort?
39

Ms. MCPEAK. Mr. Chairman, if that is your request, we certainly

will follow through and ask——

Mr. DOOLITTLE. Mr. Payne, I wanted to ask you, in the appraisal

process, did the Corps itself predominate or does the real estate division have the upper hand?

Mr. PAYNE. Well, I am going to reconsider for the CALFED part

of it. What we would like to do, we have had informal discussions

with the Bureau of Reclamation through the Interior Department

in working with them.

We also need to clarify the appraisal process that they have

used, and I think this is going to be important for all future purposes, because if you use the value—if you can’t use the value of

sales to government which are the majority of the sales in this

area—I mean, there are no other comps that are available.

Mr. DOOLITTLE. When you repaired those levees back in the early

1980’s, I guess it was, were you shocked when the Corps took the

position it did?

Mr. PAYNE. Yes. We were repairing the levees in 1991.

Mr. DOOLITTLE. Oh, in ’91.

Mr. PAYNE. And some of the damage to the tract and the drought

contributed to the water bank, which gave us some money to fix

the levee. The Corps came after me due to the fact that I had not

got a permit, but we had been fixing the levees for 20 years under

a blanket permit.

Mr. DOOLITTLE. And the permit was to do what?

Mr. PAYNE. It was to build the levee. You were supposed to have

a permit to build the levee.

Mr. DOOLITTLE. Right, because they were interested in that

building on wetland?

Mr. PAYNE. Yes, yes.

Mr. DOOLITTLE. So you had a permit to do that?

Mr. PAYNE. Right, because where the ranch sits, it is in the old

bypass and the State has always had rights over the ranch during

the flood season, but after that, we were always able to go back

and fix the levees and farm the ranch.

Mr. DOOLITTLE. And that permit number three is one of those

nationwide permits they are phasing out now?

Mr. PAYNE. Yes. That caught us by surprise, because even the

State Department of Water Resources who we sold the water to, we

were in contact with them. They were responsible for getting any

necessary permits.

Mr. DOOLITTLE. When you are a landowner with some piece of

unusual land like that, when you listen to these stories, what do

you do, call your attorney to ask if you can do anything with it?

Is that the first step you have to take?

Mr. PAYNE. You mean before——

Mr. DOOLITTLE. Yes.

Mr. PAYNE.—or do you mean after——

Mr. DOOLITTLE. When you have a levee to be repaired or some

act you want to take on your land, I wouldn’t think to call anybody,

but——

Mr. PAYNE. No. In the past we never had. We would just go and

do the dredging and they sent their barge up and patched up the

levees and our ranch was easy to drain. It has a flat feed and it
40

is low so the water moves out, and when the tide comes in, it will

fill, and then it goes down through this small drainfield by gravity.

Mr. DOOLITTLE. That would account for the situation where

water that they hold back on the river bottom lands. They have to

get a permit. They can’t just let it go back into the river even, because that violates one of these standards.

Mr. Snow, I know you have heard Mr. Payne’s story, and since

the Corps of Engineers is part of your CALFED process, do you

think you might be able to unravel this situation and get it resolved?

Mr. SNOW. If I paraphrase, the question was is that I am going

to straighten out the Corps?

Mr. DOOLITTLE. That would be a truly Herculean task, but do

you think you might at least help one end of the Corps to understand the other end?

Mr. SNOW. Absolutely. I think one of the benefits, and Leslie already spoke of this, is that in CALFED, we are trying to get all

the people at the table at the same time. So we are starting to

speak with the same objectives, goals, and approach to dealing with

these issues, and I think there are probably a lot of issues at play

in Mr. Payne’s situation, but clearly, there is no question that part

of it is the issue of left hand/right hand. Nobody knows what is

going on, that it is not being coordinated, and that is one of the

things that we have to accomplish in this.

I would hope that in our situation that a valuable piece of habitat like that that we can lay out a logical strategy for acquisition

of a situation where you have a willing seller and a location that

has valuable habitat come to us, so that we can run that to ground

instead of becoming a saga on how government doesn’t work.

Mr. DOOLITTLE. Thank you, and I invite Mr. Pombo to ask his

questions.

Mr. POMBO. Thank you, Mr. Chairman. Mr. Payne, throughout

this entire process and I had the opportunity to read your testimony previously, before your land flooded, were you in the position

of being a willing seller of your property? Were you interested in

selling your property to the Federal Government at that time?

Mr. PAYNE. We had actually sold the property at one time in the

early ’80’s to a Spanish company——

Mr. POMBO. Yes.

Mr. PAYNE. [continuing]—and they couldn’t get the money, and

at that time, we had to foreclose. At that time, no one was offering

us anything, and if we were offered a reasonable price, yes, we

probably would have been willing to sell to anyone.

Mr. POMBO. Since all of this happened, since it flooded and you

had the problems fixing it, is it farmable now? I mean, are you

farming it currently?

Mr. PAYNE. No. I can’t get a permit to close the levees and the

levees, what they do is they keep the tidal waters out in the summertime, and that is why we drained it every year when the levees

broke, and then we would start farming it as soon as the ground

was dry.

Mr. POMBO. So you are unable to farm it, so it is no longer—can

you still use it for crop management?
41

Mr. PAYNE. Well, if you did, yes. If you did close the levee and

drain the ranch, you could farm it.

Mr. POMBO. But the government won’t let you close it.

Mr. PAYNE. Right, but we haven’t farmed it, you see, for—this

will be the sixth year that it has been inundated, and we have got

a large growth of weeds in there and willow trees have sort of

taken over, which make it a beautiful wetland, but to clear it and

reclaim it now, six years later, would be pretty expensive.

Mr. POMBO. Is there anyone, any other person other than Federal

agencies or a conservation group that would purchase your property? Is there any support other than preserving it as a habitat or

a wetland?

Mr. PAYNE. Well, yes. If you cleared it, you could go back to

farming it.

Mr. POMBO. But they are not going to let you fix the levees?

Mr. PAYNE. That is true, so we are sort of—yes. The only thing

now that we can do with it is sell it to a government agency who

wants it.

Mr. POMBO. So part of the problem with your appraisals is that

it is in a different condition today than it was when you originally

sold it or when it was appraised, because it is not farmland anymore, and they won’t let you do anything with it, right?

Mr. PAYNE. Yes.

Mr. POMBO. This is the kind of thing that concerns me, and I

know Ms. Johnson, your organization or group or whatever you call

it is involved with the purchase of a lot of these properties like

this, and one of the things that concerns me about this whole process that we are going into is exactly what happened with this case,

and that there won’t be anybody else to buy it because you can’t

do anything else with it.

How do you step in and keep something like this from happening?

Ms. JOHNSON. That is a complicated question. I don’t think that

the Nature Conservancy, for instance, could prevent something like

this from happening, and we have no ability to influence regulatory

action.

I do think, however, that one of the problems that we see is

that—I mean, the very fact that repairing a levee is a regulatory

issue when it comes to wetlands or endangered species, is a symptom of the fact that we have so little habitat left.

We are fighting our endangered species battles in irrigation

ditches and on levees. It shouldn’t be like that, and I am not saying

that we shouldn’t be fighting the battles to protect the species.

What I am saying is that we should restore their habitat, not their

habitat in ditches and on levees.

If we have sufficient habitat to have a healthy ecosystem and

healthy species populations, we wouldn’t run into issues like that,

so I think that maybe that is a very direct way of saying that is

how we do these things, we can prevent situations like this.

Mr. POMBO. In the CALFED process, what role do you see the

Nature Conservancy playing? I have this map here that has a

broad area outlined and that area that you see there is my district,

and obviously, my constituents see that and I begin to get phone

calls.
42

How would you respond when you see a map like this, how does

your organization respond to it?

Ms. JOHNSON. I will answer that in a couple of ways. One is,

when we do projects and we are doing increasingly large scale

projects because we understand that to really accomplish the kinds

of conservation and ecosystem conservation that we are trying to

do, we need to do things that are big. You don’t do just little postage-stamp sized preserves.

We generally don’t release our maps until we have spoken to all

the landowners who are potentially going to be affected by any activity that we are contemplating.

When we see these maps, I think a couple of things. One is, we

are actively working currently in several places that are indicated

on the maps, and as such, you asked the question earlier of Mr.

Snow, when are you going to start reaching out to some of these

landowners, letting them know what you are contemplating.

We have already talked to a lot of those landowners, and actually

we are approached by landowners on a fairly frequent basis saying

that they would like to sell their land. Often, we find that—I forget

who it was on the earlier panel who said that a lot of these lands

are unique types of lands; they are riparian lands, flood-prone

lands, places were in many cases a landowner might actually, and

we have found actually does welcome the opportunity to perhaps

sell their land or perhaps enter into something short of a real estate transaction.

One of the things that we are trying to pursue in a lot of the

areas we are working is a whole spectrum of activities. Sometimes,

it is by conservation easement on existing park land that enables

the farmer to continue farming, but also protects the value of that

property. Also, a lot of agricultural land is good wetland habitat.

We are working on wildlife-compatible farming practices, doing

experiments and research in trying to develop more of them.

I think that there are a lot of different types of activity that contribute to ecosystem restoration that aren’t necessarily outright acquisition, and I know that we are very directly involved in working

with CALFED on a development theory for an ecosystem restoration program, and they are contemplating only those types of activity.

I think that today we have perhaps over-focused on the land acquisition element, and the areas that are indicated on the map are

the areas that need to be restored, not necessarily the areas that

need to be acquired.

Mr. POMBO. I was agreeing with you until you said that last

piece and then you kind of threw me for a minute.

Ms. JOHNSON. Can I clarify?

Mr. POMBO. Yes. You have the map in front of you, but if you

take this broad area—this map is on page 45. If you take this

broad area and say that this needs to be restored——

Ms. JOHNSON. Well, in this case, the map——

Mr. POMBO. You are talking about literally several billion dollars’

worth of agricultural properties and the way that they are outlined

here is watershed management for final projects, watershed management for habitat wildlife quality, and the impact that would

have on my district to whether they were acquired or not, if they
43

were restored to something that would fit into those broad categories, the economic impact on my part of California would be immense.

Ms. JOHNSON. I must apologize. I was not—I didn’t recall all the

different maps that were in this briefing book. I was referring specifically to the maps that had to do with areas where they want

to do land acquisition and restoration.

As I understand it, the upper watershed management area is

talking more about compatible—maybe putting in buffer strips

along headwaters of streams or looking at best management practices for grazing management or timber management. It is a much

more limited set of activities that is proposed for the upper watershed. It is not full restoration of the upper watershed, so I apologize for that confusion.

Mr. POMBO. That is OK. That scared me.

Ms. JOHNSON. I was thinking of a different map than you were

looking at.

Mr. POMBO. There are a number of different maps in here and

I realize that.

Mr. Golb, you participated in this process and I understand that

you are on the ecosystem roundtable, and what happens in that

process when you can’t reach a consensus on an issue?

Mr. GOLB. We haven’t had that. So far in the ecosystem roundtable process, we have been working with CALFED to identify different priorities in terms of what are the issues that need to be addressed with the watershed and the river system within an area;

what are the types of actions that we might pursue.

So far, those have been fairly objective scientific evaluations and

issues that we have been looking at. I think the process that you

are describing where there could be potential conflict will happen

when you start looking at what are the specific actions that we

might consider, and then what are the specific projects. Do we do

this fish screen project or do we do that one; do we try to restore

this wetland habitat or do we do that; do we try to acquire this

tract of land or that piece of property.

In that case, there will be disagreement and there will be disagreement based on a number of reasons, and a lot of factors will

be involved.

I think what we are going to have to try to do is just do our level

best to adhere to criteria that we have already established in terms

of the objectives. What are we really trying to accomplish, what is

the best way if we can do this to protect or restore environmental

values within the budget without jeopardizing private property interests or other local economic interests or community needs.

I think we can do it, but there will be some disagreement. If we

don’t have a consensus, I think those projects probably will fold.

Mr. POMBO. So you believe at this point that if there is not consensus that they will move on to another issue?

Mr. GOLB. I think the way Lester said it, and correct me if I misstate this, but I think what we are looking at is for example, one

issue may be—we may be looking at two tracts of property for acquisition for example.

For purposes of discussion, if one tract we don’t have a willing

seller, regardless of its potential for environmental value, I think
44

that for this process, for this appropriation, I think that tract will

not be pursued; whereas, if we have another tract maybe that has

less environment value but we do have a willing seller, we do have

community support, I think that tract would probably be proposed

to the Bay-Delta Advisory Council for purchase.

Mr. POMBO. In general, how do you feel that the landowners

themselves have been included in this process?

They talk about the stakeholders and a lot of people get put in

a room and they talk about the stakeholders, but how would the

individual property owners be included in this process?

Mr. GOLB. We need to do a better job in contacting the individual

landowners, there is no doubt about that. On this panel, for example, Mr. Payne is the only direct landowner that is involved with

the CALFED process.

Unless a small, two-bedroom home in Sacramento, I think this

would apply, but I would think the way that Lester talked about

earlier is that what we are attempting to do is bring in the community interests and bring in the landowners so they can see this

map.

You are exactly right. When a lot of people see these maps, there

is going to be great concern, and we talked about some of the skepticism earlier, but Lester has done a pretty good job so far, and the

CALFED process has been pretty good about public outreach. A lot

of that is going to fall to us, people that represent water districts,

farmers, botany groups, county supervisors.

We have been working with Lester to try to do that. We are

going to have to do some more outreach so that some guy doesn’t

wake up one morning and get in the mail a document like this that

shows his property, his livelihood, is targeted for acquisition, and

I don’t think that’s what Lester intended with these documents.

And as Leslie indicated, those documents don’t necessarily—the

maps don’t target lands so much for acquisition as they do areas

for restoration, and there are a lot of activities that Lester has proposed and the CALFED process has proposed for this $143 million

appropriation that will be restoration not related to acquisition.

Mr. POMBO. The appropriation includes a huge amount of money

for acquisition, and when I look through this, I see maps and when

you have tens of millions of dollars in here that are for acquisition

and you have maps, one thing leads to another.

As I said, I already have constituents that have contacted me

and said I am within one of these squiggly lines or I am on one

of these maps and I don’t want to be, how do I get out, and I don’t

know what to tell them at this point how they get out.

You are not going to drop this and have a blind spot in the middle of it, but that is one of my great concerns about the way these

processes get put together is that the property owners are not included in this process to the point where they know what is going

on, whether they are willing sellers, whether they are the kind of

people that would call the Nature Conservancy and say come get

my land, I am not making any money, the price is terrible.

Whatever it is, that happens and I know it does, but there is a

cattle rancher that entered into a long-term conservation easement

with the Nature Conservancy on their entire ranch, and that was

one of their ways of making it.
45

I understand that happens, but if you don’t include the property

owners from the very beginning, it makes my life that much more

difficult, because then they contact me.

Mr. GOLD. A couple of suggestions. The first is—let me give you

Lester’s home phone number to give to your constituents.

The second is that there are certainly ample stories like Mr.

Payne’s. I have never had that happen to me, but there are certainly ample stories out there, and you have some in your own district where Federal agencies have purchased land or attempted to

purchase land in a coercive or unfair or overly aggressive fashion,

and we have lots of stories like that around.

I think what we are trying to do in CALFED is we are attempting to restore the environment in such a way that we don’t also

damage economic interests and community interests, and earlier in

my remarks, I talked about some of the solution principles that

CALFED has adopted. There are six of them, and one of them is

no redirected impacts to an individual interest, and we are going

to hold CALFED accountable to that.

I think what that means, the practical effect of that is, number

one, we have to do a better job of notifying landowners that

CALFED is interested in land acquisition or easements or some

other type of arrangement in the area where they own property.

Number two, I think one of the things we need to look at is possibly utilizing entities like the Nature Conservancy to bring them

in. They have a wonderful track record with local and private landowners and using entities like that to work with local constituencies.

The third thing, I think we need to pursue very carefully, very

carefully, the last thing we want is the Federal Government agencies to be getting more tracts of land in the State of California, and

I think that California tends to do these things.

You can rest assured that on behalf of the farmers and landowners that I represent, that I will make sure I do my best that

CALFED follows these principles, and that we achieve the restoration providing suitable alternatives that we are not impacting individual or community interests.

You and I both know that in a community, particularly in an agricultural community, there is also an industry, an entire industry

that is dependent on production of crops, trucking, fertilizer, marketing, merchandising, and we can’t have those lands come off the

county tax roll and impact the county government’s tax receipts

which has an ultimate effect on the entire community.

We have a lot of work to do, and so far, I have been pretty confident and comfortable with the process that Lester has established. I am certain that Sunne, as the co-chair of the Bay-Delta

Advisory Council, will also be watching this very carefully.

Mr. POMBO. Thank you. I know that we have talked a lot about

the private property owners in this process, and I am concerned

about how this all works. The fact that we are dealing with endangered species the way that we are today, I don’t think it is the way

it should be done, but in that whole process of trying to restore the

environment, trying to reach some common sense with some of

these laws, I think we have to be careful that everybody is included

at the table when those decisions are being made.
46

On behalf of the Chairman who had another meeting and had to

leave, I want to thank you for your testimony. There will be further

questions that will be submitted in writing, and if you could answer those quickly on a routine basis, it would be appreciated by

the committee, and on behalf of the Chairman and myself and the

rest of the committee, I apologize to you for the length of this hearing. It was not a normal situation in which it came about and I

apologize to you for that, but thank you very much for sticking

around and for your testimony. It was greatly appreciated.

[Whereupon, at 3:28 p.m., the Subcommittee was adjourned; and

the following was submitted for the record:]

TESTIMONY OF LESTER A. SNOW, EXECUTIVE DIRECTOR, CALFED BAY-DELTA

PROGRAM

Mr. Chairman, members of the Subcommittee on Water and Power Resources, I

am Lester A. Snow, Executive Director of the CALFED Bay-Delta Program. I appreciate the opportunity to appear before you today to provide a status report on the

Bay-Delta Program and to answer any questions you might have.

Background

Before I describe our Program, I would like to provide some context for you. The

San Francisco Bay and Delta System is the largest estuary on the West Coast, supporting fisheries, wildlife and agriculture, while providing more than 20 million people with their water supply. It has been referred to as the crossroads of the State’s

economy and thriving ecosystem, yet it has fallen victim to competing interests, unplanned growth, and a declining ecosystem. It continues to deteriorate to the point

where people are concerned that the very jobs and economic competitiveness of the

State are at stake unless we can move forward and fix the problems in the system.

The San Francisco Bay-Delta system has been used and abused for over 150

years. It has been the source of fresh water for agriculture and cities since this region was developed. It has also been the area where we have dumped mine tailings

and toxic waste, and eliminated habitat over a long period of time. We know there

is no quick fix, that we can go out and implement one thing and all of a sudden

the system is healthy again. We recognize it has taken a long time to get to this

point; our current situation is the culmination of a multitude of impacts. We know

we must devise a strategy that addresses all of those impacts, and moves us forward

in a logical, productive fashion. The CALFED Bay-Delta Program is a collaborative

effort to address these issues.

The CALFED Bay-Delta Program has been charged by the Governor of California

and the Secretary of the Interior to develop a comprehensive plan to resolve environmental and water management problems associated with the Bay-Delta system.

Our Program has the task of instituting, through an open process that includes participation by the stakeholder community, a long-term settlement that everyone can

live with. At this time I am pleased to report that tremendous progress has been

made and I am optimistic that it will continue.

The CALFED Bay-Delta Program was established as a result of the Framework

Agreement entered into between the State and Federal governments in mid-1994.

That agreement set forth three areas in which it was agreed additional coordination

and cooperation would be pursued to alleviate uncertainty and conflict within California’s water management regime and the various overlapping jurisdictional disputes between Sacramento and Washington, D.C. Specifically, the Framework

Agreement set forth a process to facilitate the following: formulation of state water

quality standards pursuant to the Clean Water Act which could be certified by the

Federal and State governments; and, improved operational coordination of the State

Water Project and the federal Central Valley Project to more effectively and efficiently manage the state’s water supplies to meet all beneficial uses, and a longterm planning process to comprehensively ‘‘fix’’ the Bay-Delta system.

The Bay-Delta Program

That long-term planning process is the CALFED Bay-Delta Program. We began

our effort in the spring of 1995. In the two years since we started, we have made

remarkable progress and enjoyed a period of great cooperation among all parties

concerned with Bay-Delta issues. Considering the complexity and controversial nature of the issues involved, this is an important achievement and one that will serve

California and the nation long into the future.
47

The Program is divided into three phases. During Phase I, from June 1995 to September 1996, the Program developed a mission statement, identified problems, developed objectives and several guiding principles (the ‘‘Solution Principles ’’), and designed three alternative solutions to Bay-Delta related problems. In Phase II, from

November 1996 to September 1998, the Program will conduct a broad-based environmental review of the three alternative solutions and will identify a final preferred solution. Phase II will also include technical analyses of the alternatives and

development of an implementation plan. During Phase III, starting in late 1998 or

early 1999 and lasting for many years, the preferred alternative will be implemented in stages.

As the Program seeks to resolve issues, it is important to note that our mission

is to do so in a manner that serves all beneficial uses of the system. Additionally,

we are guided by six solution principles that will define acceptability of a solution.

These principles are that the preferred alternative should: (1) reduce conflicts in the

system; (2) be equitable; (3) be affordable; (4) be durable both as to project life and

adaptability to unforseen changes in future needs; (5) be implementable; and, (6)

perhaps most critically, have no redirected impacts. Our intention is not to propose

a solution that solves problems for some at the expense of others, but to provide

improvement for all beneficial uses.

As I mentioned, the Program is addressing four major areas of concern: ecosystem

restoration; water supply and water supply reliability; water quality; and, levee stability. We have developed three comprehensive solution alternatives, which include

multiple actions focused on these problems, to carry forward through the environmental impact analysis. First, I will touch on the common aspects of all three alternatives, then briefly describe the distinguishing features of each.

Alternatives Under Review

Each of the three alternatives include implementation of what we call the ‘‘common programs’’ for each area of concern. These common programs are virtually identical in every alternative based on the understanding that significant baseline improvements must be made in all four areas. They are:

The Water Use Efficiency Common Program takes two approaches: make more efficient use of water exported from the Delta, and reclaim water after use. It encourages urban water agencies to recycle water and to make greater use of previously

developed Best Management Practices, which are commonly-accepted standards for

water conservation. Similarly, it urges agricultural water users to implement costeffective measures such as the Efficient Water Management Practices, which are

standards for conserving agricultural water.

The Ecosystem Restoration Common Program seeks to restore Bay-Delta ecosystem functions by taking advantage of natural processes and restoring some of the

system’s natural resilience to stressors like drought. The common program gives

preference to activities that benefit several species and improve other resource

areas, including water quality, levee stability, and water supply reliability. Activities could include improving shallow water and riparian habitats, restoring riparian

and San Joaquin River habitats, acquiring water to boost instream flows, and controlling non-native species.

The Water Quality Common Program focuses on limiting the release of pollutants,

particularly salinity, selenium, pesticide residues, and heavy metals, into the BayDelta system and its tributaries. Activities could include improving the management

of urban stormwater runoff, cleaning up mine sites and limiting toxic drainage from

them, providing incentives for urban water agencies to upgrade their filtration systems, managing agricultural drainage, developing watershed protection programs,

and offering incentives to retire agricultural lands whose discharge most degrades

San Joaquin River water quality.

The Levee System Integrity Common Program addresses levee maintenance and

stabilization, subsidence reduction, emergency management, beneficial reuse of

dredged materials, and creation of habitat corridors as mitigation for negative impacts. Delta islands would be prioritized for work, a strategic plan devised, and stable funding sources identified with the goal of bringing as many levees as possible

up to a higher standard of stability.

In brief, the three alternatives under environmental review are distinguishable by

their conveyance components and are: (1) continuing with essentially the current

storage and conveyance system and complete reliance upon the common programs

to achieve the project purposes; (2) a significantly modified through-Delta conveyance system that would reconfigure many of the sloughs and channels; and, (3) a

dual conveyance option would add an isolated facility to the modified through-Delta

alternative. In all cases, we will analyze ranges of appropriate storage options north

of the Delta, south of the Delta and, perhaps, in the Delta. In addition to appro-
48

priate surface storage options (which could include upstream of the Delta—supplied

by the Sacramento or San Joaquin Rivers or their tributaries, south of the Delta—

supplied with water exported from the Delta, or in the Delta), groundwater storage

and conjunctive use projects will be part of our Program, and we are working with

local communities to gauge interest and to ensure local concerns are being satisfactorily addressed.

While we have winnowed down to three alternative types, we began with hundreds, reduced that to 20 and then 10 before arriving at the three we have now.

That process of developing and reducing the number of alternatives took approximately eighteen months. It was a process that was carried out with a high level

of agency and public input.

Public Input

In addition to numerous public workshops and public meetings, we are fortunate

to have the Bay-Delta Advisory Council (BDAC), a chartered Federal advisory committee, contribute to our effort. BDAC meets monthly or bimonthly to provide advice, comment and recommendations for improvement. In addition, BDAC has created fact finding Work Groups that are forums for in-depth discussion on policy

questions that impact the Program, including: how will success of an ecosystem restoration program be defined?, how can water use efficiency be maximized in a realistic manner?, what assurances are needed to ensure that the program is implemented tomorrow as it’s designed today?, and, what sort of financing arrangements

make sense?

BDAC, its work groups, and our public workshops all provide avenues for public

participation, and are a continual check for us to judge how we are doing in meeting

the needs of all Californians.

The incredible cooperation among and between State and Federal agencies, as

well as the comfort level and trust that the stakeholder community has for our Program, has led to an additional role for our Program in addition to development of

the long-term comprehensive solution. That role is to act as a coordinating point for

ecosystem restoration activities throughout the Bay-Delta system.

Because there were, and are, ongoing restoration efforts in the system, there was

a need to coordinate activities and ensure consistency with the long-term strategy

CALFED was developing. The CALFED Ecosystem Restoration Coordination Program is developing a planning and project selection process to begin early implementation for ecosystem restoration activities using existing programs and commitments. This process focuses primarily on Category III funding decisions for 1997

and 1998 and coordination with CVPIA, but also begins to integrate restoration efforts of other closely related restoration programs. (Category III projects are projects

that do not cost water to implement that the stakeholders agreed to help fund as

part of the 1994 Bay-Delta Accord.) Potential near-term projects include fish screens

and ladders, riparian habitat restoration, wetlands development, ecosystem restorative watershed management actions, and other Bay-Delta ecosystem restoration actions.

To provide a broad range of representative interests to this process, the Ecosystem Roundtable was established as a sub-committee of BDAC. The Roundtable

is charged with developing criteria and recommending approval of ‘‘early implementation’’ projects. These are projects that are consistent with the long-term plan the

CALFED Bay-Delta Program is developing, and for which there is broad support

across constituencies.

The Roundtable will make recommendations on funding projects to BDAC and

through BDAC to CALFED. Final decisions will be made by the California Secretary

for Resources and the Secretary of the Interior.

As with the long-term Program, monitoring and evaluation of success of these

early implementation efforts will be a major focus for us. We expect that over time,

assessments and data will indicate that we will need to adaptively manage the system, (i.e., adjust specific projects or actions), both on a macro-scale, for example,

water project operations, and on a more micro-scale, for example, a specific habitat

enhancement project. The monitoring methodology will be developed on a project by

project basis, but will probably include sampling, site inspections, and other data

collection and trend analysis.

As I stated at the outset, the Program has made incredible progress in a relatively

short amount of time. I attribute that success to a number of factors. First and foremost we have a staff of dedicated professionals, detailed from both State and Federal agencies, that are literally transforming how government works. Second, the

agencies themselves have committed to an unprecedented level of cooperation, and

understanding what is at stake, have made the Program a high priority. Third, the

intense involvement of the stakeholder community. The water community has come
49

together to seek a satisfactory outcome. Working through BDAC and our workshops

and work groups, the technical expertise and policy advice we receive from the

stakeholder community is invaluable and indicative of the importance they place on

our Program’s success. Finally, the public’s support for resolving California’s water

problems, as evidenced by the passage of Proposition 204, further illustrates the imperative we are all working under.

The CALFED Bay-Delta Program faces the challenge and opportunity of a new

approach in the methods of dealing with resource issues. The challenge of cooperatively devising and implementing a solution, while moving away from regulation

and litigation provides a model which minimizes conflict and maximizes public and

private support. I expect the Program to meet this challenge resulting in a reliable

water supply and healthy environment. Future generations will bear the burdens

or reap the benefits depending upon how we proceed with these problems today.

STATEMENT OF HONORABLE JOHN GARAMENDI, DEPUTY SECRETARY, DEPARTMENT OF

THE INTERIOR

Mr. Chairman and members of the subcommittee, thank you for inviting me to

be here this morning to discuss with you our progress in developing a comprehensive long-term restoration plan for California’s Bay-Delta ecosystem. I am pleased

that my colleagues from the Environmental Protection Agency and State of California are here with me. Our joint participation demonstrates mutual concern,

shared cooperation, and long-term commitment to meeting the challenge to protect

our resources.

The CALFED Program

In December 1994, Federal agencies, State agencies, and representatives of agricultural, urban and environmental organizations signed what is known as the BayDelta Accord. The Accord described new ways to meet the requirements of several

statutes, including the Endangered Species Act (ESA), the Central Valley Project

Improvement Act (CVPIA), and the Clean Water Act (CWA). It also called on State

and Federal agencies to develop a comprehensive long-term strategy to restore the

health of the Bay-Delta and simultaneously meet the water needs of California’s

economy.

The CALFED Program identified the following major actions necessary for meeting our goals:

(1) Ensure reliable water supplies for California’s urban and agricultural economies;

(2) restore the health of the Bay-Delta ecosystem;

(3) improve water quality in the Bay-Delta and rivers flowing into it; and

(4) enhance levee system stability.

In order to develop the Accord and carry out the long-term Bay-Delta Program,

Federal and State agencies combined forces and formed CALFED. Four Federal

agencies—the US Fish and Wildlife Service, the Bureau of Reclamation, the Environmental Protection Agency, and the National Marine Fisheries Service—began the

effort. Six additional Federal agencies are about to join CALFED—US Geological

Survey, Bureau of Land Management, Natural Resources Conservation Service, US

Forest Service, Western Area Power Administration, and the Army Corps of Engineers. These additional agencies provide a vast array of expertise and programs critical to our long-term restoration efforts. Only through broad integration of policies

and programs, as well as new and creative ways of approaching problems, can we

realize the goals laid out in the Bay-Delta Program. This year’s tragic flooding is

a prime example.

January 1997 Floods

Over the past several months, Federal and State agencies have been responding

to the January floods that wreaked havoc throughout much of the Central Valley

and the Bay-Delta system’s many tributaries. Army Corps of Engineers, in collaboration with the CALFED and other Federal and state agencies, has undertaken

major efforts to repair flood protection capabilities throughout the system. With the

organization of CALFED, we have a unique opportunity to implement the restoration goals of the Bay-Delta Program and the Administration’s complementary floodplain management strategies. Reducing flood damages and threats to life and property through cost-effective, and where appropriate, non-structural alternatives, can

restore the natural values inherent to the floodplain and adjacent lands, and provide water quality, quantity, and ecosystem restoration benefits central to the longterm Bay-Delta Program.
50

Bay-Delta Funding

With an overwhelming endorsement from California voters for Proposition 204, bipartisan support in the Congress that resulted in the passage of authorizing legislation last fall, and the unprecedented collaboration among the historically feuding

water interests in California, we have an incredible opportunity to use the BayDelta funding provided for in the President’s budget as a down payment on this

major restoration effort.

The Program we are undertaking is one of the most significant restoration programs in this country, and has implications well beyond California. The Bay-Delta

is the largest estuary on the Pacific coast, and serves as a stop-over point for hundreds of migratory birds and water fowl. The estuary is also highly important for

maintaining fish populations. In addition, this system provides the water supply

necessary to support California’s agricultural economy—an economy that produces

40% of the country’s fruits and vegetables, as well as numerous other key crops that

feed our nation. These are some of the most productive lands in the U.S.

Conclusion

This Committee has recognized the importance of the Central Valley to the health

of California’s economy and its diverse natural resource base. The CALFED Program is an innovative and unique approach to resolving complex resource issues

that have burdened the State for decades. The Federal and State agencies are working together to develop solutions to these problems, along with the myriad of constituents who will be affected by this program—whether they are residents and

landowners along the rivers, farmers or urbanites who receive water from the Central Valley, or fishermen who rely on healthy populations of fish. We have a great

opportunity to develop and implement the most significant restoration program of

our time. We can only accomplish this if we all work together—Federal and State

agencies, Congress, local governments, and the myriad of private and non-government interests for whom we all work.

This concludes my statement. I would be pleased to answer any questions you

may have.

TESTIMONY OF DOUGLAS P. WHEELER, SECRETARY FOR RESOURCES, STATE OF

CALIFORNIA

Mr. Chairman and members of the Subcommittee, my name is Douglas P. Wheeler, Secretary for Resources in the Administration of California Governor Pete Wilson. Thank you for the opportunity to speak today on the role of the State of California in the CALFED Bay-Delta Program and to answer any questions that you

have. This program and the improved management of the Sacramento-San Joaquin/

San Francisco Bay Delta is one of Governor Wilson’s top priorities, and we appreciate the subcommittee providing this opportunity for us to talk about the work we

are doing.

BACKGROUND

Beginning with Governor Wilson’s call for a comprehensive solution to California’s

water management and ecosystem issues in his Water Policy of 1992, in which he

stated that ‘‘nowhere is there greater need for a comprehensive program than in the

Delta,’’ California has been working toward a long-term solution to the water-related problems of the State.

In June 1994, the State of California, through its Water Policy Council (which I

chair), and the United States, through the Federal Ecosystem Directorate, reached

an agreement to cooperate in resolving water quality, water supply, and endangered

species issues of the San Francisco Bay-Delta. This Framework Agreement formed

CALFED and charged this entity with developing the long-term solution to the problems of the Bay-Delta. Shortly thereafter, in December of 1994, CALFED, in cooperation with stakeholders and other interest groups, developed a plan (‘‘the December 15th Accord ’’) that set Bay-Delta water quality standards and established

guidelines for coordinated state/federal operations of the State Water Project and

Federal Central Valley Project for a three year interim period.

The CALFED Bay-Delta Program was launched in June 1995 and began immediately to work with state and federal agencies and stakeholder groups to develop

a comprehensive solution. This innovative, consensus-based approach has allowed

CALFED to establish a level of trust and cooperation among stakeholders that is

truly unprecedented in California.
51

Through extensive public meetings and workshops, CALFED has made great

progress toward developing the long-term plan. This plan is being developed

through a three phased process. During Phase I, the CALFED Bay-Delta Program

evaluated the range of issues, problems, and actions related to the Bay-Delta estuary through a series of public meetings and workshops. At the conclusion of Phase

I, the range of alternatives was narrowed to three for the purpose of environmental

review. The CALFED Program is currently in the midst of Phase II, during which

a preferred alternative will be selected from among the three and certified by the

appropriate public entities. Phase III, implementation, is expected to begin in Fall

of 1998 and will occur over a 20 to 30 year period.

STATE ROLE IN THE CALFED PROCESS

The State of California plays an important role in the CALFED process through

the participation of its member agencies: the Resources Agency, which includes both

the Department of Fish and Game and the Department of Water Resources, the

California Environmental Protection Agency and its State Water Resources Control

Board. Each of these agencies is charged with administering portions of Proposition

204 and are also members of the Governor’s Water Policy Council.

As members of CALFED, these state agencies attend the many workshops, meetings, and public hearings through which the long-term solution is being developed.

More specifically, the agencies attend meetings of the Ecosystem Roundtable (as observers), CALFED Program Coordination Team, the CALFED Management Team,

and the CALFED Policy Team (co-chaired by myself and Bob Perciasepe, Assistant

Administrator of the U.S. Environmental Protection Agency). Many of the important

issues related to the CALFED Program, including coordination of the various programs under Prop 204, are also discussed at meetings of the Governor’s Water Policy Council.

The California State Legislature also contribute toward reaching the comprehensive solution envisioned by the CALFED process. Many of our State Senators and

Assembly Members participated in the crafting of Senate Bill 900, which placed

Proposition 204 on the ballot in November of 1996. The California Legislature has

continued to pay close attention to the progress of the CALFED Bay-Delta Program

and has taken up some key issues during the current session, such as water transfers, in an effort to assist with the overall solution.

The most important contribution toward achieving a solution to the problems of

the San Francisco Bay-Delta, however, has come from the citizens of California. The

participation of stakeholders lies at the heart of the CALFED Program. Ranging

from the Sierra Nevada Mountains to the Imperial Valley bordering on Mexico to

the Los Angeles region in the south and, of course, the Great Central Valley, these

stakeholders all recognize that the CALFED Program is critical to our State’s wellbeing. The water which flows through the Sacramento and San Joaquin Rivers

through the San Francisco Bay-Delta reaches over twenty million people in the

State, roughly 2 out of every 3 citizens. This water flows to the farms of the Central

Valley, to the high-tech factories of the Silicon Valley, and to the homes and businesses of Southern California. At the same time, the San Francisco Bay-Delta Estuary is critical to the ecological health of the State. Because of the ecological degradation that has occurred in the Delta since large-scale development began nearly one

hundred fifty years ago, such prized fish as the Chinook Salmon and Steelhead

Trout have been reduced to only a fraction of their former numbers. This level of

degradation extends to many other species and habitats throughout the Bay-Delta

system. Californians understand the importance of water to our economy and to the

environment and the citizens of California acknowledged the importance of fixing

the Delta to California’s well-being when they passed Prop. 204 by a wide margin

in November of 1996.

PROPOSITION 204

Proposition 204 was approved by 63% of the voters of California. The objectives

of Prop 204 are to provide a safe, clean, affordable, and sufficient water supply to

meet the needs of California’s residents, farms, and businesses; develop lasting

water solutions that balance economic and environmental needs; restore ecological

health for fish and wildlife; protect the integrity of the State’s water supply system;

protect drinking water quality; and, protect the quality of life in our communities.

Clearly, the goals of Prop 204 are synonymous with those of the CALFED Program.

Prop 204 provides $995 million towards a variety of ecosystem restoration and

water management components in five categories. Some of the money provided by

Prop 204 will serve to replenish existing programs, other funds will initiate new
52

programs—all of the money will contribute, directly or indirectly, to achieving a solution to the problems of the Bay-Delta. The following subaccounts of Prop 204 are

expected to contribute directly to the solution reached by the CALFED Bay-Delta

Program (the italic heading indicates the Accounts in which the funding programs

are listed):

Delta Improvements Account ($193 MILLION)

Central Valley Project Improvement Act, ($93 million):

The CVPIA portion of Prop 204 includes funding to contribute the required State

match for restoration projects undertaken by the U.S. Fish and Wildlife Service and

the Bureau of Reclamation. These funds are to be allocated through the California

Departments of Fish and Game and Water Resources for expenditure on projects

outlined in the CVPIA. The Resources Agency will be coordinating these efforts with

the CALFED Bay-Delta Program.

Category III, ($60 million):

The Category III Program was established as part of the December 15th Accord

of 1994 for the purpose of carrying out ecosystem restoration for the Bay-Delta—

in essence, a recognition that improvements to the Bay-Delta ecosystem should not

be delayed until an overall plan is complete. To date, stakeholders have contributed

approximately $22 million for 38 ecosystem restoration projects and an additional

$10 million is anticipated in Fall of 1997. The $60 million contributed by the State

of California in Prop 204 for Category III will be expended through the CALFED

Process, including review by the Ecosystem Roundtable and the Bay-Delta Advisory

Council, and approval by the CALFED Agencies. For a more complete explanation

of this process, please see the description in the materials provided by Lester Snow,

Program Manager of CALFED.

Delta Levees, ($25 million):

The Delta Levees funding will serve to improve the integrity of the levee system

of the Bay-Delta and to carry out associated ecosystem restoration projects which

result in a net benefit to aquatic species. The levee system of the Delta serves an

important role in protecting important agricultural lands and wildlife habitat and

maintaining water quality. The expenditure of these funds will occur through the

existing State Delta Flood Protection Program (SB 34) and will be coordinated with

the CALFED Program. During California’s 1996 legislative session, several amendments were made to the Delta Flood Protection Program through Assembly Bill 360,

including a requirement that the Program be implemented ‘‘consistent with the

delta ecosystem restoration strategy of the CALFED Bay-Delta Program’’.

Delta Recreation Program, ($2 million):

The Delta Recreation Program is for the purpose of implementing projects to increase public opportunities for recreation in the Delta. Examples of this would include acquisition of fee title, development rights, easements, or other interests in

land located in the Delta for the purpose of public recreation. The provision of greater recreational opportunities is consistent with and promotes the CALFED Program

objectives. The California Department of Parks and Recreation will administer these

funds and has proposed to direct $1 million to grants to non-profits and other public

agencies and $1 million to Department projects.

CALFED Bay-Delta Program, ($3 million):

These funds contribute to covering the administrative costs of the CALFED BayDelta Program.

Water Supply Reliability Account ($117 million)

Water Conservation and Recharge, (S30 million):

The funds provided for water conservation and recharge will assist the CALFED

process by contributing to the goals of the Water Use Efficiency Common Program

(A strategy for addressing issues of water use efficiency will be included for all 3

alternatives of the Programmatic EIR/EIS. The other common programs of the

CALFED Program are Ecosystem Restoration Common Program, Water Quality

Common Program, and Levee System Integrity Common Program).

River Parkways Program, ($27 million):

The River Parkway Program subaccount is the only section of Prop 204 which is

subject to appropriation by the State Legislature. These funds are available for acquisition and restoration of riparian habitat, riverine aquatic habitat, and other

lands in close proximity to rivers and streams and for associated river and stream

trail projects. Although these funds are available for use throughout the State, in

his ’97-’98 Budget Governor Wilson proposes expenditure of approximately $10 million on projects on the Napa, San Joaquin, and other rivers in the Bay-Delta system.
53

Sacramento Valley Water Management and Habitat Protection, ($25 million):

The Sacramento Valley Water Management funds are provided for the purpose of

assisting local entities with water management programs, such as conjunctive use

programs, and to implement ecosystem restoration projects. The specific projects to

be undertaken under this program have not yet been identified, but the Resources

Agency, the State Water Resources Control Board, the Department of Water Resources, and the stakeholder community are working cooperatively with the

CALFED Program to ensure that these efforts are consistent with the long-term solution currently being developed.

Clean Water and Water Recycling Account, $235 million

Clean Water Loans/State Revolving Fund, ($80 million):

Small Community Grants, ($30 million):

Water Recycling, ($60 million):

Each of the above programs is administered by the State Water Resources Control

Board for the purpose of assisting local governments with projects to improve local

water quality, supply infrastructure, and recycling capabilities. The Board will utilize existing grant and loan programs to solicit and select loan and grant proposals.

Although these funds will not be coordinated through the CALFED Program, each

contributes to better management of California’s water resources.

Agricultural Drainage Treatment, ($30 million):

The Agricultural Drainage Treatment Program will be implemented by the State

Water Resources Control Board and will contribute toward implementation of the

CALFED Water Quality Common Program.

Delta Tributaries Watershed Program, ($15 million):

The Delta Tributaries Watershed Program will contribute to several of CALFED’s

Common Programs, including the Ecosystem Common Program and the Water

Quality Common Program. The State Water Resources Control Board will administer this program and has hosted several workshops in cooperation with CALFED

and the Resources Agency to receive input from stakeholders on proposal selection

criteria. The projects selected under this program will be for the purposes of ecosystem restoration projects, watershed management efforts, and fire management

efforts and must be consistent with the efforts of the CALFED Program.

CALFED Bay-Delta Ecosystem Restoration Program, ($390 MILLION) (THIS ACCOUNT IS NOT BROKEN INTO SUBPROGRAMS):

The funds provided for this program will be available for implementing the Ecosystem Restoration Program Component of the CALFED Bay-Delta solution. The expenditure of these funds is contingent upon the certification of the Programmatic

Environmental Impact Report and a Record of Decision for the Environmental Impact Statement (anticipated in Fall of 1998) and a cost-share agreement between the

State of California and the United States for funding the CALFED solution to the

problems of the Bay-Delta.

Federal/State Cost-Share Agreement Requirement

As mentioned above, the $390 million CALFED Bay-Delta Restoration Program

funds must be accompanied by a cost-share agreement with the federal government

before expenditure. The federal appropriations authorized in the California BayDelta Environmental Enhancement and Water Security Act also require a costshare agreement. To this end, a working group consisting of three State and three

federal representatives was formed and is currently in the process of developing this

agreement. The agreement is expected to be completed within the next few months.

Conclusion

The State of California has a tremendous stake in the outcome of the CALFED

process. Our future economic prosperity and the health of our environment hinge

upon the development and implementation of a long-term solution that meets the

needs of all stakeholders. In the short time since its formation, CALFED has made

great progress toward this goal. At this point, funding to begin implementing Category III actions and to continue to develop the CALFED solution are critical. The

State of California has demonstrated a commitment to provide the resources necessary to support the process through Proposition 204. We urge our federal counterparts to match this commitment with the full appropriation of the authorized $143

million.

Governor Wilson indicated the critical importance of this funding in his letter of

March 31, 1997 to the House Appropriations Committee, stating, ‘‘This $143 million

appropriations is my highest priority for the energy and water development appropriations bill.’’ I ask that a copy of the Governor’s letter be made a part of today’s

hearing record.
54

Thank you very much for the opportunity to speak today. I look forward to answering any questions the subcommittee may have.

March 31, 1997

The Honorable Joseph M. McDade

Chairman

Subcommittee on Energy and Water Development

Committee on Appropriations

U.S. House of Representatives

Washington, D.C. 20515

Dear Mr. Chairman:

I regret that our schedules did not permit us to get together when I was in Washington last month. The reason I wanted to meet with you was to urge your support

for full funding of the $143.3 million requested in the President’s budget as the initial federal contribution toward the restoration of the San Francisco Bay-Delta. As

you may know, the funds included in the President’s budget were authorized by the

Congress last year to partially match a $1 billion state bond issue for water supply

and environmental protection approved by California’s voters in November.

This $143.3 million appropriations is my highest priority for the energy and water

development appropriations bill. With my active encouragement, the California Congressional delegation and the Republican leadership were instrumental in securing

the authorization—now we need the appropriations. I can assure you of strong bipartisan support for Bay-Delta funding. The most important factor, however, is the

breadth and strength of support from the stakeholders in California Environmentalists, farmers, and urban water users have all banded together in an unprecedented

coalition to find a non-litigious solution to the water disagreements that have long

plagued our state. They are working together cooperatively, along with the numerous state and federal agencies.

The federal authorization applies to the ecosystem spanning the Sacramento and

San Joaquin River watersheds, an area that is the source of nearly half the nation’s

fruits and vegetables, as well as drinking water for 22 million Californians. Congress has funded work in other ecosystems, such as the Everglades and the Pacific

Northwest forests. However, compared to these areas, the budget request for the

Bay-Delta is very modest. This is true not only in absolute terms, but also on a per

capita and per acre basis. The funding that I am asking you to provide contributes

to accomplishing the environmental common elements of a range of comprehensive

water supply and environmental alternatives that are being aggressively fleshed out

by all parties concerned.

The Bay-Delta model for environmental progress is one that I am confident you

can feel proud to support, and, in your role as chairman of the relevant appropriations subcommittee, I invite you to become a partner in our efforts.

I appreciate your consideration in this matter.

Sincerely,

PETE WILSON

cc:The Honorable Vic Fazio, Ranking Minority Member

California Congressional delegation

TESTIMONY OF ROBERT W. PERCIASEPE, ASSISTANT ADMINISTRATOR FOR WATER, U.S.

ENVIRONMENTAL PROTECTION AGENCY

BACKGROUND

Good morning Mr. Chairman and members of the Subcommittee on Water and

Power Resources. I am Robert Perciasepe, Assistant Administrator for Water in the

U.S. Environmental Protection Agency (EPA). I have also been designated as the

lead federal official in the joint federal-State CALFED Bay-Delta Program by the

Secretary of the Interior and the Administrator of EPA, and am appearing here

today on behalf of the federal Departments and Agencies that are members of what

we have called ‘‘ClubFed,’’ the coordinating group for federal participation in the

CALFED process. I appreciate the opportunity to testify.

As you may know, the CALFED program is a partnership between the State of

California and the federal government, charged with developing a long-term comprehensive plan that will restore ecological health and improve water management

for beneficial uses of the Bay-Delta system. The original CALFED federal members
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include EPA, the U.S. Fish and Wildlife Service, the Bureau of Reclamation, and

the National Marine Fisheries Service. Collectively, these federal members are referred to as ‘‘ClubFed.’’ We are now making this partnership forum even more effective by bringing in additional federal agencies as members of ClubFed: the U.S.

Army Corps of Engineers; the Natural Resources Conservation Service and the U.S.

Forest Service in the Department of Agriculture; the Bureau of Land Management

and the U.S. Geological Survey in the Department of the Interior; and, the Western

Area Power Administration.

The Bay-Delta, as the hub of California’s water system and the largest and most

productive estuary on the West coast, has for decades been the focus of competing

interests—economic and environmental, urban and agricultural. Development activities such as hydraulic mining, dredging and channelization, flood control,

unscreened water diversions, pollution, and large-scale water supply projects have

contributed to the degradation of the Bay-Delta’s ecosystem. This degradation resulted in many problems, including declining water quality, decreasingly reliable

water supplies, deteriorating fish and wildlife populations, and a fragile Delta levee

system. Perhaps more importantly, it also resulted in gridlock among the competing

stakeholder interests—environmental, agricultural, and urban water users.

On December 15, 1994, federal Cabinet officials, key California officials, and leading stakeholders signed the momentous Bay-Delta Accord (‘‘the Accord’’). Though

this Accord was indeed momentous in itself, its primary importance lay not so much

in what it achieved at that time, as in the process it launched, and the promising

future for the Bay-Delta it allowed all the interested parties to build.

The Accord was most important because it represented a recognition that a consensus-oriented process was the only route to fix the problems of the Bay-Delta, and

that the California water wars were ultimately futile and pointless for everyone involved. The contestants in those wars recognized that every major party, acting

alone, could stop the initiatives of every other major party. But no major party could

achieve its core objectives alone, without the agreement of the others. That recognition was clearly true when the Accord was signed. Almost two and a half years

later, the futility of efforts by some participants to go around that process in various

ways makes it clearer than ever—the consensus-oriented route is the only route that

will work for anyone, because it has to work for everyone.

Today, I would like to briefly discuss, from the standpoint of the federal

‘‘ClubFed’’ agencies, what we have achieved since the Accord was signed, and where

we are going—both with respect to our involvement in the CALFED long-term process, and with respect to the funding authorization in the California Bay-Delta Enhancement and Water Security Act that the President signed last fall.

ACHIEVEMENTS UNDER CALFED AND THE BAY-DELTA ACCORD

The Accord defined water quality standards, set up coordinated water project

management, created a program to improve aquatic habitat by non-flow actions, and

established a long-term process for defining a plan of action to fix the problems of

the Bay-Delta. The Accord also provided an atmosphere of greater near-term ‘‘certainty’’ in California water management for all stakeholders, that would enable the

cooperative efforts to take root and grow. The Bay-Delta consensus process has produced much of this certainty, with benefits for water users, the environment, and

the California economy. To sustain this progress, and get long-term solutions that

provide lasting certainty, all CALFED agencies and stakeholders must continue to

work within the consensus-oriented process.

•State Water Quality Standards: The State Water Resources Control Board adopted in May, 1995 a water quality plan for standards that reflects the Accord. EPA

Region 9 approved the State standards on September 26, 1995. In contrast, efforts

prior to the Accord to put water quality standards in place for the Bay-Delta had

been unsuccessful. ClubFed members are working with stakeholders and the State

to find ways to meet these standards that will also address the concerns of the agricultural and urban users of San Joaquin River water. We have made a great deal

of progress in this effort and are hopeful of reaching an agreement that the State

can finalize within the time frame specified in the Accord.

•More Reliable Water Allocations: Because of the Bay-Delta process, working

through its joint federal-State Coordination Group, the Central Valley Project (CVP)

water contractors have received more reliable allocations of the available water during the past two years. This demonstrates that, by working together, State and federal agencies can coordinate and more flexibly harmonize water allocations to habitat, farm and urban users of CVP water. Previously, user conflicts sometimes prevented contract allocations from being provided even when water was physically

available. Recognizing that this is a greater challenge in drier years, the Interior
56

Department is working to develop a protocol for making these allocations, to provide

greater certainty about how the allocation process will work.

This year’s flooding experience also shows us the limits to any human problemsolving approaches dependent on the weather. When a single, huge rainstorm forces

the massive release of stored water to prevent an immediate catastrophe, and is

then followed directly by a prolonged, total, unseasonable drought, no human

plumbing on earth can produce enough water for all purposes. We must note, in all

humility, that we can only do the best we can with what nature gives us to work

with. •Support from the Financial Markets: Prior to the Accord, the financial markets

sounded alarms about the effect that water policy uncertainty could have on California’s municipal credit ratings. Standard & Poor’s, among those previously concerned, found the Accord ‘‘....represents a major step in alleviating many of S&P’s

credit concerns.’’ (Credit Week Municipal, 2/27/95).

Richard Rosenberg, Chairman and CEO of BankAmerica Corp., reaffirmed that a

consensus process was essential to this progress, stating to the Water Education

Foundation (of Sacramento, CA) on March 30, 1995 that the Accord is ‘‘a critical

first step towards a new era of water management in the State.... we must deal with

California water issues in California and include all Californians.’’ Similarly, the

Bay Area Economic Forum wrote on June 20 to Senator Feinstein that major

changes to the Accord ‘‘would threaten to unravel the Bay-Delta Agreement and

jeopardize the mutual trust that has developed among all of the different players.’’

These initial reactions from the California financial community have proven to be

both perceptive and prophetic about the most important benefits of the Accord.

CALFED and its extensive stakeholder processes are the means by which we ‘‘include all Californians’’ in our Bay-Delta long-term planning and near-term decisionmaking. This has also enabled us to keep all participants, governmental and private

sector alike, in the CALFED processes and at the table negotiating their differences,

instead of taking outside routes in futile attempts to get a one-sided answer. •Category III: The Bay-Delta Accord included a commitment to undertake nonflow ecosystem restoration activities to improve the health of the Bay-Delta ecosystem. This effort is commonly referred to as ‘‘Category III’’, and the Bay-Delta Accord estimated the costs of the non-flow ecosystem restoration activities to be $180

million.

Category III’s central purpose was to get effective non-flow measures for ecosystem restoration into place while the CALFED process worked out long-term solutions. In other words, the Accord recognized the need to fund and carry out measures, in the short term, to address the variety of non-flow related factors that have

contributed to the historical decline of the Bay-Delta’s ecological resources. To date,

the water user community has contributed almost $22 million to fund Category III

projects—including $20 million from Metropolitan Water District, and smaller contributions from several San Francisco Bay Area water districts. The $22 million in

stakeholder funding has leveraged funds from other sources such as the Central

Valley Project Improvement Act (CVPIA), State and federal agencies, and non-governmental entities, to support $61.5 million worth of projects.

A working group of stakeholders and agency personnel identified Category III

non-flow habitat improvement projects as appropriate for funding, and 38 have been

or are being implemented to date. These projects, such as installation of new fish

screens at critical water diversions and restoration of spawning habitat in important

upstream tributaries, will substantially improve aquatic habitat. They will, as intended, be even more effective in conjunction with the CALFED ecosystem restoration activities.

I would like to provide just a couple of examples of projects that have been undertaken with Category III funds. Category III funds, in conjunction with several other

sources, enabled the acquisition of the 4,356-acre Valensin Ranch to greatly expand

the Cosumnes River Preserve and provide necessary wetlands and upland habitat.

These funds were also used to install five fish screens for water diversions located

in the Suisun Marsh, one of the largest contiguous brackish marshes in the U.S.

Finally, Category III funds were used to restore a segment of Butte Creek to natural

conditions by removing four unscreened diversion dams, enabling the unrestricted

passage of salmon.

In designing the process to identify and move forward on Category III projects,

the CALFED agencies were faced with the challenge of moving quickly to maximize

near-term Category III progress before the start of long-term program, while working to build a consensus on difficult issues of Category III operation and financing.

The CALFED agencies struck a pragmatic balance by establishing a formal mechanism (through the Ecosystem Roundtable) to provide direct stakeholder input on

near-term restoration activities, including decisions on use of Category III funds.
57

Now we have the potential for a dramatic new infusion of funding. When California voters approved Proposition 204 last November, they made available $60 million in State funds to add to the existing pot. New federal funds appropriated under

the authorization of the California Bay-Delta Enhancement and Water Security Act,

can be explicitly available for use in Category III projects. The ClubFed agencies

hope Congress will look favorably on the President’s FY 1998 budget request for full

funding under the Bay-Delta Act, to enable the federal government to match California’s support and commitment reflected in its Proposition 204 funds for Category

III purposes in Fiscal Year 1998. These new State and federal contributions add to

the impetus for a wide range of stakeholders to support Category III financially, as

the Bay-Delta Accord envisioned.

•ASolid Start on Building Long-Term Bay-Delta Solutions: As CALFED Executive

Director Lester Snow’s statement describes in more detail, we have created a joint

State-federal CALFED Bay-Delta Program office, and staffed it using State and federal resources and personnel. A broad-based Bay-Delta Advisory Committee (BDAC)

of stakeholders has been convened, and regularly counsels the State and federal

agencies on aspects of the long-term solution. The CALFED Program has developed

three major alternatives for the long-term solution addressing the Program’s objectives—of water quality, water supply, ecosystem restoration, and levee stability.

These alternatives are being evaluated in a Programmatic Environmental Impact

Report and Statement (EIR/EIS). The expedited schedule calls for the CALFED

agencies to identify a preferred alternative by September of this year and release

the programmatic document for public review in November.

CALFED BAY-DELTA FUNDING REQUEST FOR FISCAL YEAR 1998

Last Fall, Congress passed and President Clinton signed into law the California

Bay-Delta Enhancement and Water Security Act. This new law authorizes funding

of up to $143 million per year for three years, which shall be ‘‘in addition to baseline

funding levels . . . for currently authorized projects and programs . . . for the purpose of Bay-Delta ecosystem protection and restoration.’’ The Bay-Delta Act states

that this funding is the ‘‘initial federal share of the cost of developing and implementing’’ the Category III program and the ‘‘ecosystem restoration elements of the

long-term CALFED Bay-Delta program.’’

The Bay-Delta Act also requires the Office of Management and Budget to submit,

as part of the President’s Fiscal 1998 budget, ‘‘an interagency budget crosscut’’ for

Fiscal Years 1993 through 1998. This crosscut is to show levels of federal spending

‘‘on ecosystem restoration and other purposes in the Bay-Delta region, separately

showing funding provided or requested’’ under both existing and this new Bay-Delta

Act authority.

In his Fiscal Year 1998 budget, the President requested the full $143.3 million

in new funding for Bay-Delta ecosystem restoration and Category III purposes that

was authorized by the 1996 Bay-Delta Act. In his FY 1998 budget request, the

President also met the statutory requirement for a budget cross-cut. The Bay-Delta

cross-cut includes an estimate for the baseline of federal spending for ‘‘ecosystem

restoration and other purposes’’ in the Bay-Delta of $70 million, a 250 percent increase over the FY 1993 funding level of $20 million. Let me clarify that this

amount reflects federal agencies’ pre-existing spending for Bay-Delta purposes. This

baseline amount is in addition to the President’s FY 1998 request for $143.3 million

in new funding. In other words, the President’s FY 1998 budget requests a total of

$213.3 million for ecosystem restoration and other activities in the Bay-Delta.

CALFED’s FY 1998 PROGRAM

Regarding the specific actions to be funded by the CALFED program, the BayDelta Act is not a great deal more explicit or detailed than that which is set forth

in the brief quote cited above. We must therefore answer the question about the

President’s FY 1998 budget, ‘‘funding for what functions to accomplish what goals?’’

The funding authorization in the Act itself refers to the ecosystem restoration elements of the long-term CALFED program. While that program is still under development, and the environmental review process on a preferred alternative is not

scheduled to be completed until the latter half of 1998, CALFED has identified an

FY 1998 program of activities that will be beneficial to each alternative being considered for the long-term program. Investment in these ‘‘no regrets’’ early actions

is important to maintain momentum in preparation for the decades of work ahead

on the long-term program, and will build support and commitment for implementing

the full alternative chosen. Federal funding authorized under the Bay-Delta Act will

also provide the necessary match for the State’s funding under Proposition 204.
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The CALFED FY 1998 program is part of a larger, five-year program of activities

common to all three alternatives, drafted in consultation with stakeholders, with

federal ClubFed agency staff closely involved in development and review at every

stage. The program was framed to provide early implementation benefits and generate information valuable for adaptive management activities when the long-term

Program is undertaken. While many early action projects are for ecosystem restoration, substantial activities are anticipated in each of the four long-term program elements, including water quality, levee vulnerability, and water supply.

Projects pursued for early implementation must: (1) have appropriate environmental documentation; (2) have no significant adverse cumulative impacts; and, (3)

not limit the choice of a reasonable range of alternative or affect the selection of

a preferred alternative. Under the President’s FY 1998 proposal, the Secretary of

the Interior will be required to approve plans outlining how funds appropriated

under the Bay-Delta Act authorization will be spent.

The federal and non-federal funding total currently projected for the FY 1998

CALFED program of common actions is $260 million, of which about $143 million

is proposed by the President’s FY 1998 Budget request under the Bay-Delta Act.

The majority of the $260 million is for ecosystem restoration actions, and the remainder is for actions under the other three program elements.

Cost-Share Agreement

We recognize that the CALFED agencies need to have a cost-sharing agreement

in place by September, 1997. A high-level interagency group is developing an agreement which will meet the requirements of the Bay-Delta Act and Proposition 204.

This agreement is intended to apply to interim activities (including those in the

CALFED FY 1998 program) prior to the availability of a final programmatic environmental review document, as well as to the long-term program.

The agreement will also include a framework of principles for cost-sharing on the

overall CALFED program. Because the longer-term process is not yet defined and

will be described in conceptual terms, later amendments to the initial agreement are

contemplated that will be consistent with the framework of principles and will define the long-term process as decisions are made on it.

Defining Projects and Actions—A New Way of Doing Business

I am sure that the Subcommittee’s members recognize that this discussion has not

addressed what is ordinarily a central focus of significant funding requests—that is,

a detailed description of projects and actions for which the funding will be used.

Lester Snow’s testimony addresses this question at length.

I will simply summarize with a general description of how CALFED will proceed.

The identification of projects and development of detailed project plans will involve

the same processes of close interaction and consultation among Lester Snow’s staff,

CALFED agency staff, and stakeholders that have brought us where we are today

on the CALFED FY 1998 Program and the CALFED long-term process. Final approval of projects will involve the same processes of discussion and agreement

among all the CALFED agencies that have been successful to date and that have

brought all of the panelists together to this table.

We recognize that this is not ordinarily how federal project spending gets defined.

In the language I quoted above, Congress also recognized that—in the way that the

Bay-Delta Act defined the purposes for which the funding was authorized. Essentially, funding was authorized for actions to be named later by the consensus-oriented CALFED process. In other words, Congress recognized the necessity for a literally extraordinary legislative response to what is an equally extraordinary partnership—CALFED.

We envision that the decisions on which agencies, or stakeholders, will undertake

and pay for each activity will be made in the same process and on the same consensus terms that we have used to identify projects for the FY 1998 program. There

is no allocation of funds among the federal agencies to be set before the fact. Rather,

the allocations will follow the CALFED decisions on which department or agency

has the most appropriate capability or experience to carry out a category of activities.

The fact that, as an EPA official, I am advocating for funding to be channeled

through the actions of another federal department says a great deal about the different way in which we are doing business here. These are not federal or State

projects, Interior or EPA projects we envision from the common program, although

federal or State agencies will carry out many of them. Rather, they will be products

of the CALFED federal-State partnership, which also includes stakeholders in a

truly collaborative capacity.
59

CONCLUSION

Why Support The Bay-Delta Process? While we believe that this process for deciding on action projects is what Congress envisioned when it passed the Bay-Delta Act

last Fall, we do not ask for your support solely on that basis, or solely from the confidence you can take from the record of the many CALFED achievements since the

Accords were signed. It is fair for you also to ask, ‘‘why do we believe the CALFED

process will continue to work as we move into Fiscal Year 1998 and beyond?’’

Let me answer that question. First, the process is built on a strong, core partnership with the State. We, the federal and State signatories, jointly created that partnership in the Framework Agreement of June, 1994. We gave it substance and clear

direction with the signing of the Accord. We continue to cement and augment it—

by our contributions in staff, resources and work to Lester Snow’s CALFED effort;

by our steady and timely progress in assembling the long-term plan; and, by our

continuing collaborative work on all the formal and informal Teams that make

CALFED go. These efforts to date provide us with the trust and confidence that we

can, and will, work through any problem in a cooperative, consensus-oriented way.

Second, ClubFed has provided for a degree of coordination among federal agencies

that may well be unprecedented in a natural resources program of this magnitude.

I am not saying we head off any problem before it occurs—I doubt that it is humanly possible to do that in any large organization—but no ClubFed agency makes

major Bay-Delta decisions without consultation with and accountability to the rest

of the team. By providing a common forum for regular interaction on these issues,

ClubFed has improved our communication and coordination with each other, the

State, and stakeholders on Bay-Delta matters and on other, related issues beyond

Bay-Delta—proving that success can be infectious. The strong interest of the six

new members of ClubFed in joining the partnership is powerful testimony to the effectiveness of ClubFed and the importance of the CALFED long-term effort.

Third, the strength of the CALFED process is rooted in the close and continuing

involvement of all major stakeholder groups. Any government agency worth its salt,

at any level of government, should have learned by now that you make the most

durable and effective decisions by bringing in the people affected and finding out

their needs, concerns, and thoughts about different ways of solving problems. Being

listened to seriously, and being able to take a hand in guiding the overall effort,

keeps all the players at the table, and compounds their investment in making the

consensus-oriented process work. And as that investment by all of us keeps growing,

the successes we achieve together—most recently in joining to support Proposition

204 and the Bay-Delta Act—bring us closer to the goal of a durable, long-term solution for the Bay-Delta.

Thank you again for your invitation to testify, and for your consideration of support for this path-breaking initiative.

STATEMENT PRESENTED BY DIRECTOR ROSEMARY KAMEI, SANTA CLARA VALLEY

WATER DISTRICT

Mr. Chairman and Members of the Subcommittee, thank you for providing me an

opportunity to submit this statement on the CALFED Bay-Delta Program on behalf

of the Santa Clara Valley Water District, a member of the California Bay-Delta

Water Coalition, and on behalf of the Bay-Delta Advisory Council. The coalition represents a diverse alliance of conservation interests, urban water suppliers, agricultural water users and business leaders working together on water policy issues in

California.

1. STATUS OF THE CALFED PROCESS FROM THE URBAN WATER USERS’

PERSPECTIVE

California’s economy is one of the strongest in the world, and that strength is dependent on sufficient and reliable supplies of water. The San Francisco Bay-Delta

Estuary supplies water to 20 million people and supports an $800 billion economy

and job base. The San Francisco Bay Area is the No. 1 business location in the

United States, and second in the world.

Santa Clara County, the Silicon Valley, is the single most important high-tech

center in the U.S., being home to over 4,000 high-tech companies. The Silicon Valley

receives one-third or over $1 billion of the venture capital invested in the United

States annually, and employs over 230,000 people. The high-tech and manufacturing

industries are the key to the future of the western region as America’s gateway to
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the Pacific Rim. These growing industries need a reliable source of high quality

water to produce the products that fuel the economic engine. Santa Clara County

is home to 1.6 million people and it constitutes 25% of the Bay Area’s total population and economy. In an average year, half of the water supply to Santa Clara

County comes from the Bay-Delta. A reliable and adequate supply of high quality

water is of the utmost importance to the businesses and residences of the Silicon

Valley.

The CALFED Bay-Delta Program is an unprecedented cooperative effort among

federal, state and local agencies to restore the Bay-Delta. The Program is developing

a long-term solution that equitably addresses water problems in four key and interrelated areas: water supply reliability, water quality, ecosystem health, and levee

system vulnerability. As a member of the urban water users community and an active participant of the CALFED Bay-Delta Program, I am pleased with the progress

of the Program and the degree to which the Program has promoted an open, consensus-building process in developing a long-term solution for the problems facing

the Bay-Delta. The Program is on a very ambitious schedule but I think it is important for CALFED to continue with the momentum that has been generated. From

the urban perspective, the CALFED process is on track to increase water supply reliability. This is absolutely critical to maintaining the quality of life not just in my

area but throughout the state.

2. THE ROLE THAT THE BDAC IS PLAYING IN THE DEVELOPMENT OF

A LONG-TERM PLAN FOR THE MANAGEMENT OF BAY-DELTA RESOURCES

The Bay-Delta Advisory Council (BDAC) is a federally-chartered stakeholder

group which provides policy guidance to CALFED in its development of the longterm Bay-Delta solution. It is a 32-member council consisting of representatives

from urban, agricultural, environmental, business, and fishing interests. It is the

formal forum for stakeholders to discuss issues, understand the concerns from all

of the interests that will be affected by the CALFED Bay-Delta Program, and provide recommendations to CALFED in developing balanced alternatives for addressing water problems in the Bay-Delta.

Since its creation from May 1995, BDAC has been engaged in providing input on

the elements of the CALFED solution including: water use efficiency, water quality,

storage and conveyance, levee stability, and the nexus between ecosystem restoration and flood management. There are also four BDAC sub-groups set up to address

in more detail, policy issues related to program elements and other necessary and

companion components of the CALFED package such as financing and assurances.

These BDAC workgroups are also comprised of balanced representation from urban,

agricultural, environmental, and business interests. In addition, BDAC has appointed a subcommittee, the Ecosystem Roundtable, to provide advice on near-term

ecosystem restoration efforts.

3. THE NEED FOR THE FUNDING CURRENTLY REQUESTED IN THE

PRESIDENT’S BUDGET

Although the CALFED program requires all parts of the long-term solution to

move forward together, the CALFED agencies and stakeholder interests have recognized an immediate need to begin implementation of the ecosystem restoration element. Because the ecosystem restoration element is designed to serve as the foundation for all of the other program elements, immediate restoration action is necessary

to achieve long-term water supply reliability and water quality benefits. There are

ecosystem restoration projects and programs and water quality actions to improve

ecosystem quality that can be undertaken now and will result in immediate ecological benefit. There are other projects that need to go forward now because of the considerable lead time necessary to produce species and habitat benefits.

The California Bay-Delta Water Coalition, including Santa Clara Valley Water

District, strongly supports the Administration’s budget request for funding the interim CALFED ecosystem restoration program. The Coalition believes it is critical

that all of the parties to this process—federal, state, local and stakeholder interests—contribute financially to the CALFED Bay-Delta Program, and that full funding in support of the Administration’s ecosystem restoration funding request is a

crucial step in this regard.
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1 For more than 45 years The Nature Conservancy has implemented our mission by focusing

on local, on-the-ground conservation, utilizing the best available science, market forces, and

partnerships with people and groups across the political spectrum. We currently have conservation programs in all 50 states and 17 other nations. The Conservancy has more than 900,000

individual members and over 1,385 corporate sponsors.

4. OUR ASSESSMENT REGARDING THE PROCESS BY WHICH FUNDS— BOTH FEDERAL AND NON-FEDERAL—WILL BE ALLOCATED AMONG

COMPETING POTENTIAL PROJECTS

In order to help prioritize and allocate federal and non-federal funds among similar but competing needs, CALFED agencies have created a Restoration Coordination

Program to receive stakeholder input such as those from the Ecosystem Roundtable.

The Ecosystem Roundtable is an advisory group appointed under the Federal Advisory Committees Act (FACA) and is a sub-committee reporting to the Bay-Delta Advisory Council (BDAC). The Ecosystem Roundtable is a balanced group representing

the various interests involved in Bay-Delta issues and its mission is to advise

CALFED on near-term ecosystem restoration project selection and coordination with

other ongoing programs such as the CVPIA.

The project selection and funding prioritization process is being performed in a

manner that fosters cooperative planning and implementation with all the federal,

state, and local agencies and stakeholders. Prioritization is based on a rigorous evaluation of environmental needs, biological benefits, technical feasibility, cost effectiveness, potential environmental and third-party impacts, and consistency with

CALFED goals for water quality, levee reliability, water use efficiency and water

supply reliability. I believe that this Ecosystem Roundtable process is the most effective method for coordinating overlapping agency programs and for bringing in

meaningful stakeholder involvement and buy-in.

STATEMENT OF LESLIE FRIEDMAN JOHNSON, DIRECTOR OF AGENCY RELATIONS, THE

NATURE CONSERVANCY, CALIFORNIA REGIONAL OFFICE

Mr. Chairman and Members of the Subcommittee, thank you for providing me an

opportunity to submit this statement regarding the CALFED Bay-Delta Program on

behalf of The Nature Conservancy (‘‘Conservancy ’’). The Conservancy is an international, non-profit land conservation organization dedicated to the long-term preservation of biological diversity. 1 The premise that underlies our work is that in

order to safeguard imperiled species, we must protect and often restore their habitats. The Conservancy has been actively implementing ecosystem conservation and

restoration projects at sites throughout the Bay-Delta watershed for nearly 20

years. Because we share CALFED’s goal of restoring Bay-Delta ecosystem health,

the Conservancy has been actively participating in the CALFED process since the

Bay-Delta Accord was signed. We are also an active participant in the California

Bay-Delta Water Coalition, and have signed on to the Coalition testimony submitted

to you today under separate cover. For my individual statement I will focus on the

specific questions you have asked me to address.

SUMMARY

As authorized in October 1996 by P.L. 104-333, Title XI, the California Bay-Delta

Environmental Enhancement and Water Security Act, the Administration has included $143.3 million for the CALFED Bay-Delta Program in the Bureau of Reclamation’s FY’98 budget request. The Nature Conservancy strongly supports this

funding level request.

The San Francisco Bay-Delta and its watershed is a 500-square-mile region supporting an immense diversity and richness of aquatic and terrestrial species and

habitats as well as substantial commercial and sport fisheries, several of which are

on the verge of extinction. In addition, the estuary and its watershed support considerable wetland habitat for waterfowl that provides a large recreational hunting

base. Simultaneously, the Bay-Delta Estuary serves as the primary water supply

conveyance system for a massive agricultural economy and two-thirds of California’s

population. The conflict between these competing uses has produced significant environmental problems, which in turn have stalled efforts to improve water supply

reliability for all interested parties. Similarly, the future viability of commercial and

sport fishing on the West Coast is dependent upon solving these complex ecological

problems.
62

The Bay-Delta ecosystem also has important implications for other Western

states. For example, this region provides critical nesting and wintering habitat for

migratory waterfowl whose seasonal migrations along the Pacific Flyway reach from

northern Alaska to the tip of South America. Moreover, a restored salmon fishery

in California could benefit fisheries along much of the Pacific Coast and decrease

the likelihood of additional listings under the Endangered Species Act (ESA).

STATUS OF THE CALFED PROCESS FROM THE ENVIRONMENTAL

ORGANIZATIONS’ PERSPECTIVE

First, I must point out that there is no single environmental perspective. The environmental community is made up of a diversity of organizations spanning the

spectrum from small, local grass-roots groups to large, international corporations.

Each of these groups has a slightly different focus ranging from comprehensive ecosystem restoration to local watershed projects to water conservation to reduction of

point-source pollution. The CALFED-program, likewise, is actually multiple programs: interim, long-term, ecosystem restoration, water supply reliability, water

quality and levee system vulnerability. As a result there exists an enormous range

of perspectives depending on which group one polls regarding which specific program area.

Environmental and conservation organizations have demonstrated unprecedented

commitment to the CALFED process. In the ten years I have been working on conservation issues in California I have never before seen anything approaching the

level of environmental and conservation group involvement witnessed in the

CALFED arena. To the best of my knowledge, every CALFED forum—including

public workshops, the Bay Delta Advisory Council (BDAC), the Ecosystem Roundtable, BDAC work groups on finance, assurances, water quality, water supply reliability, and ecosystem restoration—is attended by at least one and often multiple

representatives of the environmental community. In addition, a broad diversity of

conservation and environmental interests has come together as the Environmental

Water Caucus (EWC), a forum for sharing information and coordinating input to the

CALFED Bay-Delta program. EWC, in turn, has established multiple work groups

to focus on various CALFED program elements. Collectively this is a remarkable response from a community that is chronically understaffed and under- or un-funded.

Environmental and conservation groups are at the table because we believe it will

take a comprehensive program on the scale of that undertaken by CALFED to effectively address the complex problems manifest in the Bay-Delta. The environmental

community is clearly as fully engaged as any other interest group in developing a

rational, consensus-based solution to Bay-Delta problems. It is also important to

note that a commitment to the process does not imply a blanket endorsement of

CALFED recommendations.

NEED FOR THE FUNDING LEVEL IN THE ADMINISTRATION’S FY’98

BUDGET: IMMEDIATE SPENDING ON ECOSYSTEM RESTORATION IS A

PRIORITY FOR ALL CALIFORNIA

Although the CALFED program requires all parts of a long-term solution to move

forward together, agencies and stakeholder interests have recognized the need to

begin implementation of ecosystem restoration immediately. We believe this is important for several reasons. First, the ecosystem restoration element of the CALFED

program is the foundation for all of the other program elements. With so many species in decline or on the brink of extinction, restoration of ecosystem health is widely

recognized to be necessary to achieve long-term water supply reliability. Thus, while

the CALFED agencies are developing several alternative long-term solutions, an aggressive ecosystem restoration program, by the agreement of all parties, will be common to all of the alternatives.

Second, commitment of significant funding—on the order of the current federal

funding request—is a necessary precondition to stimulate development of ecosystem

restoration projects on a scale sufficient to achieve restoration of ecosystem health.

Uncertainty about the availability of funding has had a stifling effect on development of large-scale restoration projects. In an era of decreasing funding, agencies

and private organizations alike have been reluctant to invest the effort or resources

necessary to develop large-scale projects because they have lacked confidence that

funding would be available to carry them out.

Federal funds will be used in conjunction with existing Proposition 204, Central

Valley Project Improvement Act and other restoration program funds to support an

array of urgently needed ecological improvements including, but not limited to:
63

*Restoration of tidal, shallow water, riparian, instream, wetland, and other habitats;

*Improved fish protection and management;

*Protection and enhancement of existing habitat;

*Expanded wetlands protection;

*Improved ecosystem water quality to support aquatic resources;

*Improved habitat management;

*Improved management of introduced species;

*Identification and addressing of other limiting factors that have impaired ecosystem recovery.

I would like to elaborate a bit by describing a few types of activity for which funding is urgently needed:

Emergency measures to prevent additional listings and/or extinction. A clear, and

widely-supported priority for immediate funding is activity that immediately, directly and tangibly improves conditions for species approaching or on the brink of

extinction. Activities that may meet this definition include screening unscreened

water diversions, improving fish passage, and restoring habitat for listed and candidate species.

Experimental and demonstration projects. There are several highly-degraded

habitat types central to the CALFED Ecosystem Restoration Common Program for

which restoration technologies are still relatively unproved (e.g. Delta wetlands).

Immediate development of large-scale experimental and demonstration restoration

projects is a necessary step in the direction of restored ecosystem health.

Large-scale habitat restoration. Preliminary drafts of the CALFED Ecosystem

Restoration Program plan have indicated a need to acquire, protect and/or restore

large amounts of habitat. Again, dependability of funding is critical to development

of a successful program. Without secure funding (or at least good prospects), agencies and private entities are much less likely to pursue such projects.

The CALFED process has significantly advanced the collective vision of ecosystem

restoration in the Bay-Delta watershed; the requested federal funding will provide

the means to begin seriously implementing that vision.

THE CALFED RESTORATION COORDINATION PROGRAM: A SYSTEMATIC, CONSENSUS-BASED APPROACH TO PROJECT FUNDING

As noted above, the Administration has included $143.3 million for the CALFED

Bay-Delta Program in the Bureau of Reclamation’s FY’98 budget request. As implementation occurs, it is anticipated that funds will also be transferred to other federal agencies participating in the CALFED Bay-Delta Program. The Nature Conservancy strongly supports this ‘‘one-stop’’ federal line item as an efficient and streamlined approach to funding the interim CALFED ecosystem restoration program.

I am going to leave it to the other panelists to describe the CALFED Restoration

Coordination Program and the Ecosystem Roundtable, and will limit my comments

to addressing how I believe this approach improves upon the status quo.

As mentioned above, the Conservancy has been implementing conservation and

restoration projects in the Bay-Delta watershed for nearly 20 years. Over that period, developments in the field of conservation biology have led us and others to recognize that conservation and restoration of ecosystems, including the natural processes that sustain them, is more effective and sustainable than species by species

conservation efforts. Ecosystem restoration of the magnitude required to achieve

ecosystem ‘‘health’’ needs to be conducted on a large scale, and in a highly-coordinated fashion.

To date, there has been no coordinating framework to guide the actions of various

state, federal, local and private interests. Due to limited resources, differing agendas

and lack of coordination, these interests have historically pursued projects of relatively small scale in a manner that is fragmented, reactive, and often focused on

narrow objectives (e.g. habitat acquisition for a single species without respect to ecosystem context or natural process function). While state, federal and local entities

have indeed cooperated on many important and worthwhile projects, and are increasingly developing projects on an ecosystem scale, the various priorities, decisionmaking processes and institutional constraints unique to each agency or group often

make cooperative efforts cumbersome.

The CALFED Restoration Coordination Program promises to be a vast improvement over traditional ecosystem funding programs in that CALFED, with input

from stakeholders on the Ecosystem Roundtable, has developed a process to coordinate not only the expenditure of the requested federal funds, but also CVPIA Restoration Fund, Proposition 204 and other funding sources. We strongly support

CALFED’s role in coordinating this effort. Fragmenting the federal appropriation
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among the various federal agencies or earmarking of specific projects would undermine the coordination already underway.

CONCLUSION

Thank you for the opportunity to appear before the Subcommittee to describe The

Nature Conservancy’s support of the CALFED Bay-Delta program and the Administration’s FY’98 funding request. As we have described in greater detail above, ecosystem restoration is a necessary foundation for other elements of the CALFED program, and is critical to the long-term environmental and economic health of the

West and the United States as a whole. The requested federal funding is urgently

needed to move these ecosystem restoration efforts forward.

STATEMENT OF CALIFORNIA BAY-DELTA WATER COALITION

Mr. Chairman and Members of the Subcommittee, thank you for providing us an

opportunity to submit this statement regarding the CALFED Bay-Delta Program on

behalf of the California Bay-Delta Water Coalition. The coalition represents a diverse alliance of conservation interests, urban water suppliers, agricultural water

users and business leaders working together on water policy issues in California.

(Exhibit A is a list of Coalition participants.) The Coalition is currently focused on

obtaining sufficient funds to ensure the success of the CALFED Bay-Delta Program.

It is these funding issues that are the focus of the Coalition’s testimony today.

SUMMARY

As authorized in October 1996 by P.L. 104-333, Title XI, the California Bay-Delta

Environmental Enhancement and Water Security Act (‘‘Bay-Delta Act’’), the Administration has included $143.3 million in the Bureau of Reclamation’s FY ’98 budget

request for the CALFED Bay-Delta Program. The California Bay-Delta Water Coalition strongly supports this funding level request.

California’s economy is one of the strongest in the world, and that strength is dependent on sufficient and reliable supplies of water. Two-thirds of California’s population is dependent on water from the San Francisco Bay-Delta Estuary, a 500-

square-mile region supporting an immense diversity and richness of aquatic and terrestrial species and habitats as well as substantial commercial and sport fisheries,

several of which are on the verge of extinction. In addition, the estuary and its watershed support considerable acreage of managed wetland habitat for waterfowl that

provides a large recreational hunting base. Simultaneously, the Bay-Delta Estuary

serves as the primary water supply conveyance system for a massive agricultural

economy and millions of municipal and industrial consumers. The conflict between

these competing uses has produced significant environmental problems, which have

in turn stalled efforts to improve water supply reliability for all interested parties.

Thus, restoration of the ecological health of the Bay-Delta Estuary and its watershed is the foundation of all efforts to improve water quality and supply reliability.

Similarly, the future viability of commercial and sport fishing on the West Coast

is dependent upon solving these complex ecological problems.

The Estuary and its watershed also have important implications for other Western states. For example, this region provides critical nesting and wintering habitat

for migratory waterfowl whose seasonal migrations along the Pacific Flyway reach

from northern Alaska to the tip of South America. Moreover, a restored salmon fishery in California could benefit fisheries along much of the Pacific Coast and decrease the likelihood of additional listings under the Endangered Species Act (ESA).

It must also be recognized that water systems in the Western U.S. are highly interrelated. For example, because Bay-Delta ecosystem restoration will help bring longterm stability and security to California’s statewide water system, the Administration’s funding request is of substantial importance to other Colorado River Basin

states and interests as well as the Republic of Mexico.

THE CALFED BAY DELTA PROGRAM IS THE CULMINATION OF YEARS OF

EFFORT

The problems facing the Bay-Delta Estuary and its watershed have proven intractable for many years, due not only to the conflicts in the system, but also to the

vast array of overlapping and often conflicting mandates of various federal and state

agencies. In an historic effort to end the impasse, the federal government and the
65

state of California have entered into a joint venture to craft a long-term Bay-Delta

solution that equitably addresses water problems in four key and inter-related

areas: water supply reliability, water quality, ecosystem health, and levee system

vulnerability. This venture includes all of the necessary federal and state agencies

operating under a framework agreement and is referred to as ‘‘the CALFED BayDelta Program.’’

A joint Bay-Delta program staff has been put into place and has been given responsibility for developing the programmatic solutions. This effort has been underway for approximately 18 months. A central tenet of the program is the necessity

for, and reliance upon, substantial and substantive input from stakeholders and

other members of the general public. The Bay-Delta Program staff have established

an extensive system of workshops and technical teams for developing concepts and

solutions with the aid of those who work most closely with the systems at issue.

Conservation groups, fishermen, urban and agricultural water users, waterfowl associations, the business community and others are actively involved in the solutions

process along with the CALFED agencies and the Bay-Delta Program staff.

IMMEDIATE SPENDING ON ECOSYSTEM RESTORATION IS A PRIORITY

FOR ALL CONCERNED

Although the CALFED program requires all parts of the long-term solution to

move forward together, the CALFED agencies and stakeholder interests have recognized an immediate need to begin implementation of the ecosystem restoration element. The California Bay-Delta Water Coalition strongly endorses this policy for

several reasons.

First, the ecosystem restoration element of the CALFED program is designed to

serve as the foundation for all of the other program elements, because immediate

restoration of the ecosystem is necessary to achieve long-term water supply reliability and water quality benefits.

Thus, while the CALFED agencies are developing several alternative long-term

solutions, an aggressive ecosystem restoration program will be common to all of the

alternatives.

Second, the federal funds will be used to fund an array of projects and programs

that can be undertaken now and will result in immediate ecological benefit. Other

projects need to go forward now due to the considerable lead time necessary to

produce species and habitat benefits. Given that the ecological systems are complex,

an adaptive management approach—one that allows for modification over time in

response to new information—is essential.

Thus, there is a strong interest among all parties in providing early support for

those restoration activities that are either (1) most likely to provide substantial ecological benefits or (2) will supply information that will guide future management

and restoration activities. It is also widely accepted that restoration actions will in

most cases require substantially greater time to result in either tangible benefits

or meaningful new information than other elements of the CALFED program.

CALIFORNIA BAY-DELTA WATER COALITION: A KEY ROLE FOR

STAKEHOLDERS

In recognition of the urgent need to lay this all important foundation, the Coalition came together during the summer of 1996 to develop and support an historic

state bond measure, Proposition 204, the ‘‘Safe, Clean, Reliable Water Supply Act

of 1996.’’ Proposition 204 is a $995 million general obligation water bond containing

approximately $600 million for Bay-Delta ecosystem restoration efforts. Of this, $60

million is immediately available for ecosystem restoration activities as part of a program referred to as ‘‘Category III,’’ and $93 million is immediately available to fund

the state’s share of Central Valley Project Improvement Act (CVPIA) implementation costs. (Several other sections of the measure also provide immediate funding

for related restoration efforts.) Proposition 204 also created a $390 million fund as

the State’s initial contribution to the final CALFED ecosystem restoration program.

This fund will not be available until the entire CALFED program has been finalized,

some time within the next two years. The measure passed with 63% voter approval,

a clear indication of very high levels of state support for improvement of the BayDelta Estuary and its watershed and improvements to the water supply system.

The Coalition was also instrumental in building support for H.R. 4126, the California Bay-Delta Environmental Enhancement and Water Security Act (the ‘‘BayDelta Act’’), a new authorization of matching federal funds to support the initial ecosystem restoration elements of the CALFED Bay-Delta Program. H.R. 4126 was en-
66

acted as Title XI of P.L. 104-333, the Omnibus Parks and Public Lands Management Act. An unprecedented level of bipartisan support (48 members of the California delegation co-sponsored the measure), as well as the support of the Clinton

and Wilson Administrations, led to quick action in the 104th Congress. The BayDelta Act, drafted with Proposition 204 in mind, authorizes the ‘‘initial’’ federal

share of both immediate Category III funding and the more comprehensive BayDelta ecosystem element. These federal funds will be used in conjunction with existing CVPIA and other restoration programs to support an array of urgently needed

ecological improvements including, but not limited to:

*Restoration of tidal, shallow water, riparian, instream, wetland, and other habitats;

*Improved fish protection and management;

*Protection and enhancement of existing habitat;

*Expanded wetlands protection program;

*Improved ecosystem water quality to support aquatic resources;

*Improved habitat management;

*Improved management of introduced species;

*Identification and addressing of other limiting factors that have impaired ecosystem recovery.

DOI FY ’98 BUDGET REQUEST IS APPROPRIATE AND NECESSARY

Consistent with the Bay-Delta Act, the Administration included $143.3 million as

the first installment of the federal funds for ecosystem restoration activities being

developed by the CALFED agencies for FY 1998. In addition, the Administration

has committed to funding the remaining amounts, $143.3 million in each of FY ’99

and FY ’00. The budget authority of $143.3 million is included within the Bureau

of Reclamation budget. As implementation occurs, it is anticipated that funds will

also be transferred to other federal agencies participating in the CALFED Bay-Delta

Program. The Coalition strongly supports this ‘‘one-stop’’ federal line item as an efficient and streamlined approach to funding the interim CALFED ecosystem restoration program.

The CALFED Bay-Delta program is unique. A major initiative to coordinate the

legal mandates and spending of at least seven federal agencies, its decisions will affect a huge watershed and millions of water customers. It is also a partnership with

a number of state agencies and coordinates closely with an independent stakeholder

funding program. The Coalition strongly supports CALFED’s role in such planning

and spending efforts, as it is the only means to assure programmatic results that

will satisfy all interests. Fragmenting the federal appropriation among the various

federal agencies would undermine this critical goal and weaken the coordination already underway.

THE ECOSYSTEM ROUNDTABLE PROCESS PROVIDES FOR CRITICAL

STAKEHOLDER INPUT

In order to establish near-term spending priorities for ecosystem activities and to

coordinate state, federal, and associated expenditures, the CALFED agencies have

created a Restoration Coordination Program which receives stakeholder input from

the Ecosystem Roundtable. The Ecosystem Roundtable is a balanced group representing the various interests involved in Bay-Delta issues and its mission is to

help CALFED with near-term project selection for Bay-Delta ecosystem restoration

and coordination with other ongoing programs such as the CVPIA. The Roundtable

was appointed under the Federal Advisory Committees Act (FACA) and the state

equivalent to this statute.

The CALFED agencies and the Ecosystem Roundtable are using an objective, scientifically-based process to identify near-term priorities and fund actions to address

those priorities. This process was developed based on the past experiences in administering the Category III program and the CVPIA Restoration Fund, and features

extensive coordination with the CVPIA. It is a process that allows flexibility to respond to changing circumstances, to address local interests, and to learn from previous restoration actions.

Both Proposition 204 and the Bay-Delta Act anticipate that the Ecosystem Roundtable structure will serve as the primary decision forum for funds made available

under these authorities, until a more permanent entity is developed by CALFED to

take on this role.

The Coalition strongly supports the Ecosystem Roundtable process, not only as a

rational and logical method of coordinating overlapping agency programs and spend-
67

ing, but as the most effective method for bringing meaningful stakeholder involvement—and buy-in—to a problem that has vexed California and many other western

states for decades.

STATE & LOCAL COST-SHARING HAS ALREADY BEEN COMMITTED

The Coalition supports the use of matching funds for both interim and long-term

ecosystem restoration efforts. As part of the 1994 Bay-Delta Accord, the stakeholders, together with the state and federal signatories, committed to funding a variety of restoration projects. Water users jump-started these efforts by providing an

initial $22 million as seed money for immediate implementation of such projects

(commonly called Category III). Another $10 million will he contributed this year.

These funds have already been matched by approximately $7 million in local and

private cost-share funds and are over and above user contributions to other on-going

Bay-Delta restoration programs, including nearly $120 million contributed to the

CVPIA Restoration Fund since 1992. In addition, as discussed in some detail above,

the State of California is now committed to providing approximately $600 million

through Proposition 204 for Bay-Delta ecosystem restoration purposes. Of this

amount, more than $200 million is available immediately—prior to the completion

of CALFED’s long-term plan—as are all associated local, user, and stakeholder-contributed funds.

Consistent with these state and stakeholder commitments, Congress authorized,

and the President has requested, funding to support the federal share of the Category III program and related restoration efforts in recognition of the significance

of these immediate needs to the overall success of the CALFED Bay-Delta program.

The Coalition believes it is critical that all of the parties to this process—federal,

state, local and stakeholder interests—contribute financially to the CALFED BayDelta Program, and that full funding in support of the Administration’s ecosystem

restoration funding request is a crucial step in this regard.

Substantial state and stakeholder funds are already committed for the federal

1998 fiscal year regardless of whether matching federal funds are appropriated for

that period. Thus, a formal cost-sharing agreement is not necessary to ensure that

any federal appropriation is matched in FY ’98. Nevertheless, the Coalition recognizes the general policy of the federal agencies to provide funding pursuant to costsharing agreements. Therefore, the Coalition supports the execution of an interim

cost-sharing agreement for FY 1998 that facilitates the expenditure of all funds appropriated for the ecosystem restoration element of the CALFED Bay-Delta Program for the FY 1998 funding cycle.

CONCLUSION

The CALFED Bay-Delta Program is bringing state, federal, local and stakeholder

interests together in an open and public process to make joint decisions about how

to implement ecosystem restoration programs and monitor progress in order to ensure overall success. The CALFED Program has broad responsibility to plan and coordinate a comprehensive, long-term solution to restore the estuary and improve the

reliability and quality of Bay-Delta water supplies. It is vital that restoration activities begin now.

Species throughout the Bay-Delta watershed continue to face a host of problems

in some cases so severe that they remain candidates for listing under the ESA. Recovery efforts cannot begin without adequate funding. Many projects and programs

have already been planned and are ready for implementation. Funding commitments are needed to move restoration activities forward.

Restoring California’s Bay-Delta ecosystem is critical to the long-term environmental and economic health of the West and the United States as a whole. Federal

support to match California’s commitment to restoring the Bay-Delta ecosystem will

help safeguard this national treasure for future generations and serve as a model

for other regions in the area of ecosystem protection and restoration.

EXHIBIT A

California Bay-Delta Water Coalition Participants:

•Alameda County Water District

•Association of California Water Agencies

•California Urban Water Agencies

•California Waterfowl Association
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•Calleguas Municipal Water District

•Central Basin Municipal Water District

•Central Coast Water Authority

•Central Valley Project Water Association

•Coachella Valley Water District

•Contra Costa Water District

•East Bay Municipal Utilities District

•Environmental Defense Fund

•Friant Water Users Authority

•Kern County Water Agency

•Long Beach Water Department

•Los Angeles Department of Water and Power

•Metropolitan Water District of Southern California

•Modesto Irrigation District

•Municipal Water District of Orange County

•Natural Heritage Institute

•Northern California Water Association

•San Diego County Water Authority

•San Francisco City and County Water Department

•San Joaquin River Exchange Contractors Water Authority

•San Luis & Delta-Mendota Water Authority

•Santa Clara Valley Water District

•Stockton East Water District

•The Nature Conservancy

•Tulare Lake Basin Water Storage District

•Turlock Irrigation District

•West Basin Municipal Water District

•Westlands Water District

TESTIMONY OF SUNNE WRIGHT MCPEAK, PRESIDENT AND CEO, BAY AREA COUNCIL

Mr. Chairman, members of the Subcommittee on Water and Power Resources, I

am Sunne Wright McPeak, President and CEO of the Bay Area Council, a businesssponsored, CEO-led organization representing major employers throughout the ninecounty Bay Area region of Northern California. The Bay Area Council, established

more than 50 years ago, works to develop progressive regional public policies that

promotes economic prosperity and environmental quality. The Bay Area Council is

rooted in the entrepreneurial spirit with great respect for public leadership, such

as you provide for the nation on a daily basis. Additionally, I serve as Vice-Chair

of the Bay Delta Advisory Council which provides on-going advice to the CALFED

Bay Delta Program. I am pleased to appear before you today to provide input from

the Bay Area business community as well as a statewide business perspective with

regard to the CALFED process.

Before I begin, I would like to provide one piece of historical context. In the late

1970’s and early 1980’s I chaired a group called the Committee for Water Policy

Consensus, based in Contra Costa County, where I was then an elected Supervisor.

One of the key concepts that I and my colleagues advocated was the notion that

California should have ‘‘policy before plumbing.’’ We strongly believed that before

major projects were undertaken, comprehensive technical impact analyses should be

carried out and policy debates undertaken, regarding the allocation or reallocation

of our State’s finite water resources in order to ensure the ultimate successful operation of the Federal and State water systems. At that time, the water community

in general, and many of the constituencies involved, were concerned that such discussions would delay critically needed projects supported in various interest groups.

However, in the absence of such comprehensive analyses and appropriate policies,

agreements between parties on significant programs and projects were not forthcoming, resulting in political gridlock. Consequently, no major activities to either

improve the ecosystem quality or improve water supply reliability were reached

until the historic Bay Delta Accord of 1994.

Thus, I and many others are heartened by the fact that the CALFED process does

in fact represent an effort to put ‘‘policy before plumbing.’’ This is a major accomplishment, and one that is clearly bearing fruit.

From a business perspective, the CALFED process represents a critical component

of California’s infrastructure development for the 21st century. Like the highway

system, whether it be roads or information, and the power grid, California’s water

supply infrastructure contributes to our continuing prosperity and helps ensure that

the 7th largest economy in the world will continue to make its substantial contribu-
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tion to the overall health of our national economy. As we all know, water is largely

taken for granted except during the time of drought or flood. But the ramifications

of not guaranteeing that the Bay Delta system continues to function in the future

as both ecosystem and water supply hub are severe for California and the United

States as a whole.

From the rugged Sierra foothills, to the fields of the Central Valley, to the Los

Angels basin, to San Diego, and back to the Silicon Valley, a secure, reliable supply

of high quality water cannot by overvalued. We in the business community regard

the CALFED process as the only immediate opportunity to achieve a secure, reliable, and quality water supply for the jobs and the economy. We are committed to

helping to resolve the water disputes that confront us, and we are committed to the

CALFED effort as the venue to do so. Time is of the essence and we cannot let the

CALFED process be derailed at the critical juncture.

The business community has not always been centrally involved in the water debate. In the past few years, however, the business community has begun to play a

much more key role in the water policy debates in the state and we will continue

to do so. As Mr. Perciasepe mentioned in his remarks, corporate CEO’s across the

state, major financial institutions such as Standard & Poor’s, and organizations

such as the Bay Area Council care deeply about the fate of California’s water resource and understand the need to resolve the policy debates now. It is also important to note that the ‘‘business community’’ is not only comprised of the board rooms

and shareholders; it is, ultimately, the employees and their families as well. Indeed,

it is the people of California.

Future economic prosperity in California, which is an economic engine for the nation, and is dependent upon the water supply from the Delta. Contributing to that

quality of life, and the ecological well being of the Bay-Delta system, must be restored in order to ensure stability in that supply. Environmental vitality, along with

our economic vitality combine to make California unique and uniquely attractive to

business and employees.

If we lose either our water supply reliability or our environmental quality, businesses will be less likely to stay, expand or locate here. Failure to follow through

on the CALFED process will impair economic progress for the nation as well as

California.

I am confident that the CALFED process will succeed in meeting these twin demands of water supply reliability for economic vitality and ecosystem restoration for

environmental quality. And I am honored to serve as Vice-Chair of the Bay-Delta

Advisory Council, contributing to this important process.

The role of the Bay-Delta Advisory Council is to provide advice to the CALFED

Bay-Delta Program regarding its development of alternative comprehensive solutions to environmental and water management problems associated with the BayDelta system. We are also to provide policy advice on issues not necessarily included

as a project in a solution alternative but that will need to be resolved before implementation can succeed, such as assurances that the program will be implemented

tomorrow as it is designed today, and so on.

The CALFED process has listened to the advice of the BDAC, has responded and

incorporated appropriate suggestions for improvement appropriately and is successfully meeting an extremely tight time line. All to its great credit. I look forward to

an even more pronounced BDAC role as the alternatives are refined further.

With respect to the need for the funding currently requested in the President’s

budget, I cannot stress enough that the need is real, it is needed in FY ’98, and

it is imperative that it be forthcoming to evidence the federal government’s acknowledgment that California’s economic engine, if slowed or stopped, has an impact on

the nation’s economic well being. Furthermore, there is a federal responsibility to

contribute to the ecosystem restoration effort both because the Delta is an ecological

treasure of international significance and a wintering location for waterfowl along

the Pacific Flyway, for which the United States has some treaty obligations.

Finally, with regard to the Ecosystem Roundtable process for recommending disbursements of state and federal funds for ecosystem restoration to the CALFED

agencies, I am very comfortable that it is a workable, fair and practical process. It

is open, has stakeholder involvement, and agency participation. It is developing criteria for early implementation project selection and will recommend priorities for

near-term ecosystem restoration actions to the CALFED agencies.

Ultimately, the CALFED process has been and continues to be a success worthy

of your Committee’s support. It is an example of agency coordination, stakeholder

participation and state and federal cooperation that is almost unprecedented. Fi-
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nally, the most important fact to remember about CALFED is that it’s working. In

business, success speaks for itself.

STATEMENT OF RICHARD K. GOLB, EXECUTIVE DIRECTOR, NORTHERN CALIFORNIA

WATER ASSOCIATION

Mr. Chairman, members of the Subcommittee, my name is Richard Golb, I am the

Executive Director of the Northern California Water Association (NCWA). NCWA is

a non-profit organization that represents 51 agricultural water suppliers that collectively irrigate 750,000 acres of farmland in the Sacramento Valley.

I appreciate the opportunity to testify on the status of the CALFED Bay-Delta

Program from the perspective of California’s agricultural water users, as well as on

the role of the Ecosystem Roundtable, and the importance of the President’s fiscal

year 1998 budget request for the CALFED Bay-Delta Program.

California’s agricultural water interests, including NCWA, have worked diligently

to resolve the chronic water supply and environmental problems that have plagued

the Sacramento-San Joaquin Delta and San Francisco Bay (Bay-Delta). NCWA participated in the development of the 1994 Bay-Delta Accord, the development of California ballot Proposition 204, and the CALFED Bay-Delta Program. NCWA’s Chairman Tib Belza, and Vice-Chairman Don Bransford, both serve on the Bay-Delta Advisory Council, along with environmental, urban, business and other agricultural interests from throughout California. I also serve on the CALFED Ecosystem Roundtable.

THE STATUS OF CALFED BAY-DELTA PROGRAM—AN AGRICULTURAL

PERSPECTIVE

California’s agricultural water interests support the CALFED Bay-Delta Program

and its objective, which is to develop and implement a plan to restore water supplies

for California’s cities, businesses and farms, and to restore fish and wildlife habitat

in the Bay-Delta ecosystem. We also support the California Bay-Delta Water Coalition, and the Coalition’s statement in support for full fiscal year 1998 federal funds

for CALFED’s short-term and long-term goals. Our support for the CALFED BayDelta Program is consistent with Governor Pete Wilson’s 1992 water policy that advanced the principle that all of California’s interests must move forward together—

and that individual interests can not move ahead of the others.

Following this important theme, CALFED adopted a set of six solution principles

that agricultural interests, like NCWA, strongly support. The principles are intended to guide CALFED’s selection of a final solution to ensure it is equitable to

all interests, that it does not result in redirected impacts to other regions or interests, and that it is a durable plan that will address California’s economic and environmental needs. We believe the success of the CALFED Bay-Delta Program is imperative to ensure the long-term viability of California’s agricultural economy.

THE ECOSYSTEM RESTORATION ROUNDTABLE

The Ecosystem Roundtable is a 19-member subcommittee of the Bay-Delta Advisory Council. The Roundtable, of which I am a member, is a representative work

group comprised of California’s environmental, agricultural, urban, fishing, conservation and power interests. Our mission is to assist CALFED staff in the evaluation of a proposed three to five year workplan that will identify environmental restoration needs and specific projects to address these needs. The Roundtable will review and recommend selected projects to the Bay-Delta Advisory Council for funding, and importantly, the Roundtable will also attempt to coordinate existing state

and federal restoration programs in the Bay-Delta ecosystem. Our current goal is

to provide recommendations on projects to the Bay-Delta Advisory Council this summer.

The Ecosystem Roundtable, thus far, is an accountable and balanced process.

Clearly established scientific criteria have been adopted to ensure the merit of restoration projects that may be eligible for funding consideration, and CALFED’s Solution Principles ensure that affected landowners are involved in project development

These restoration projects and programs will help CALFED meet two important

goals. First, they will improve fish and wildlife habitat in the Bay-Delta’s fragile

ecosystem. Second, in fulfilling this goal, the program will provide long-term water

supply certainty for California’s agricultural and business communities.
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THE PRESIDENT’S FISCAL YEAR 1998 BUDGET REQUEST

Congress, in 1996, passed the California Bay-Delta Enhancement and Water Security Act, authorizing $430 million for environmental restoration activities in the

Bay-Delta. Signed by President Clinton, and combined with California voters support for Proposition 204, this law authorized $143 million for each of the fiscal years

1998, 1999 and 2000. The first installment, President Clinton’s fiscal year 1998

budget request of $143 million, is included in the Department of Interior’s budget

for the Bureau of Reclamation. The President’s budget documents commit to requesting the additional authorized $143 million installments in fiscal years 1999

and 2000. The full appropriation of $430 million is critical to ensure that CALFED

successfully addresses California’s water supply and environmental problems.

Congressional support for the President’s request for $143 million will allow

CALFED to begin work on important long-term restoration projects that will provide

significant water supply reliability benefits for California’s agricultural and urban

needs. The funding also will ensure that restoration projects that currently have

state and federal approval, and a local cost-share, will not be delayed due to lack

of federal support or funds. For example, state and federal agencies have recently

encouraged water users on the San Joaquin and Sacramento rivers, and in the

Delta, to protect juvenile salmon by installing fish screens on their diversions. Many

agricultural water suppliers have initiated these projects and are now in the design

stages with construction possible this summer and next year, provided federal funds

are available through the CALFED Bay-Delta Program.

Overall, these projects, as well as other fish passage projects on tributary streams,

such as construction of fish ladders, will immediately benefit species of concern, including the federally listed winter-run Chinook salmon, as well as the spring-run

Chinook salmon. At the same time, this funding ensures greater certainty for irrigation supplies to area farmers, and increases the opportunities, under appropriate

circumstances, for water transfers.

Thank you again for the opportunity to provide testimony before the Subcommittee. I would be pleased to answer any questions you may have at this time.

TESTIMONY OF MR. W. ASHLEY PAYNE, ASHLEY PAYNE FARMS

Mr. Chairman, Members of the Committee, my name is Ashley Payne. I am a

farmer and I reside in Yolo County, California. My family farms about 8,000 acres

in Yolo and Sutter Counties, and we grow primarily rice, tomatoes, wheat, safflower,

corn and alfalfa.

Iappreciate the opportunity to testify today before your subcommittee, particularly

from the perspective of a landowner who has property in the CALFED habitat acquisitions target area. I want to stress from the outset that my experience in dealing with the federal government on a major land acquisition in the Delta may be

unique. My involvement with the federal land acquisition process has been with the

U.S. Army Corps of Engineers, and the Corps’ efforts to acquire Little Holland

Tract, an island in the delta that my brother, William, and I own. This is not necessarily the experience that other landowners, who plan to participate in the

CALFED land acquisition process, will have. But it does provide, I believe, some lessons from which the CALFED land acquisition program can benefit.

First, a little background on the property in question. Little Holland Tract is a

1,630 acre island that borders the Sacramento Deepwater Ship Channel in southeastern Yolo County. The island forms part of the funnel through which water

moves from the Yolo Bypass, a massive feature of the Sacramento River Flood Control Project, to the Sacramento-San Joaquin Delta and the San Francisco Bay. In

essence, Little Holland Tract, along with Liberty Island to the west, serves as the

cork at the end of the Yolo Bypass.

In 1981, my brother and I sold the island to a Spanish farming operation. In December 1983, after a small portion of the levees that protected the island were

breached and the Spanish firm was unable to secure financing to repair the levees,

the property reverted back to my brother and I.

In October of 1991, my brother and I entered into an agreement with the California Department of Water Resources (DWR) for the sale of water from Little Holland Tract. The property has senior appropriative water rights that permit the diversion of up to 1,450 acre feet of water per year. Part of the agreement with DWR

included a payment from DWR of $75,950 to pay for the cost of repairing the

breached levees, de-flooding the island and releasing the flood water from the island

to the Delta, making it available for the 1991 Emergency Drought Water Bank.
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On February 12, 1992, the Corps of Engineers issued a ‘‘cease and desist’’ letter

to my brother and I, claiming that we had restored the levees without the necessary

Section 404 permits. The Corps rejected our position that repair of the levees was

subject to Nationwide Permit 3. After months of unsuccessful negotiations, the

Corps forced my brother and I to breach the repaired levees and inundate the island. The Corps subsequently denied our after-the-fact section 404 application and

to date we have not been able to farm our property. Today, it remains partially

flooded and subject to tidal influences.

Given the position of the Corps, we sought and received the help of our Congressman, Vic Fazio, in an effort to win passage of legislation directing the Corps to acquire Little Holland Tract and providing the Corps with the necessary funds to

carry out the acquisition. The first funds to acquire the property were appropriated

in fiscal year 1995. In fiscal year 1996, Congress provided the balance of the funding

as well as the statutory direction to acquire the property. The only condition that

had to be met under the legislation was that the Assistant Secretary of the Army

for Civil Works had to make a determination that the acquisition was in the federal

interest. In January 1996, the Corps made that determination, citing the enormous

environmental benefits of maintaining the property in a flooded state and directed

that the island be acquired.

Today, however, it appears that we are still a long way from final acquisition of

the property by the Corps. The Corps has appraised the property and offered my

brother and me, $735,000 for the island. This is far less than the fair market value

of the property. In 1984, the island appraised at $1,800,000. In 1992, a private appraisal that I commissioned during some discussions with The Nature Conservancy,

valued the property at $2,500,000. In 1995, the Congress made up to $3,300,000

available for the acquisition. And, in 1996, the Corps’ reconnaissance study on the

property valued the property at $2,900,000, if it were still farmable.

A couple of reasons for the low appraisal have emerged. First, federal appraisal

standards preclude the use of anything but private-to-private sales when selecting

comparables to determine the fair market value of a parcel. Federal appraisal guidelines do not permit the use of transactions that involve a non-profit, like The Nature

Conservancy or Trust for Public Lands, for example. Nor do they allow the use of

real estate transactions that involved another level of government, such as the State

of California, which has made significant acquisitions in the Delta.

Second, the Corps is not very sophisticated in its understanding of the value of

water rights. During our recent discussions with the Corps, representatives of the

agency acknowledged that the Corps had not assigned any value whatsoever to the

appropriative water rights associated with Little Holland Tract. It is a transferable

water right. It is a senior water right. I have requested and been granted the right

to move the point of diversion for that water right twice since my brother and I repossessed the property. Yet, the Corps assigned no value to the appropriative water

right tied to the property.

Senior appropriative water rights similar to those associated with Little Holland

Tract have sold recently for $1,500 per acre foot. That would place the value of the

water rights alone at $2,200,000. But the Corps, until just recently, has refused to

investigate the value of the water rights or whether the Corps or any other federal

agency would have any use for them. During a meeting two weeks ago, my attorney

asked a representative of the Corps’ real estate division if anyone from the Corps

had bothered to talk to the Bureau of Reclamation about the value of the water

rights. He also asked if the Corps had bothered to determine if the Bureau or any

other agency within the Department of the Interior might have an interest in the

acquisition of the water rights from Little Holland Tract. The answer he received

from the Corps was, ‘‘No.’’

Third, the Corps’ real estate division seems to operate in somewhat of a policy

vacuum. For example, and, again, this focuses on the water rights issue, the Corps

real estate division has maintained that the Corps does not want the water rights

from the property, even if they have some value. We recently asked the Corps’ representatives to the CALFED process if, from their perspective, the Corps would have

an interest in acquiring the water rights from Little Holland. The answer was an

unqualified, ‘‘yes,’’ but the real estate division of the same agency had never solicited the views of their colleagues, who reside just a few floors away in the same

building.

Finally, the Corps tends to be very cautious in the values it assigns to wetlands

and the environmental resource benefits of the property. The environmental benefits

of maintaining and enhancing wetlands at Little Holland Tract are well documented. The Corps has done an entire reconnaissance study on the value of the wetlands and wildlife habitat at Little Holland. According to the U.S. Fish and Wildlife

Service, ‘‘The property is clearly valuable wetland habitat.’’ This is the same tidal
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marshland that has been nearly wiped out in the delta and that CALFED is trying

to restore. Little Holland Tract supports migrant and resident waterfowl as well as

shorebirds. In a flooded state, the island provides valuable habitat for the listed

Delta smelt and winter-run chinook salmon. And, the island also provides habitat

for the listed giant garter snake. Despite these high wetland and wildlife values,

the appraisers that I have consulted suggest that the Corps has significantly underpriced the value of this habitat and has not adequately distinguished between wetland habitat of varying quality. Instead, the Corps appears to value all inundated

land equally regardless of the quality of the habitat.

As you can imagine this has been a very frustrating experience. Here we have

a prime piece of property from a wetlands and wildlife perspective, the Congress has

instructed the Corps to acquire the property, including the water rights, and the

funds have been appropriated. Yet, fifteen months after the Corps confirmed that

the acquisition was in the federal interest and directed that the property be acquired, the sale has still not closed.

Land acquisitions, like Little Holland Tract, don’t occur in a vacuum in the Valley. The landowners in the region know the tough time that we have had dealing

with the Corps of Engineers. The fact that I am dealing with the Corps of Engineers

and that land acquisitions under CALFED will probably occur through the Bureau

of Reclamation or USFWS, is often lost on my neighbors. All they know is that the

federal government has acted with a heavy hand in dealing with the acquisition of

Little Holland Tract. They see delays and low appraisals. And, that is not the kind

of environment that encourages the kind of willing buyer-willing seller market that

will be needed for the CALFED land acquisition to be successful.

Again, my situation may be unique. Part of the solution to my specific situation

may be to work more closely with the Department of the Interior. We have had informal discussions with the Bureau of Reclamation’s Mid-Pacific Region about working with the Corps of Engineers to facilitate the acquisition of Little Holland Tract.

One proposal calls for the property to be deeded to the Department of the Interior.

The Bureau of Reclamation would assume responsibility for the water right under

California water law. It could dedicate the water to instream flows or some other

need of the agency. The U.S. Fish and Wildlife Service, for its part, would take responsibility for managing the island as part of one of the wildlife refuges in the

area. We are pursuing this option.

To summarize, there are four key lessons out of the Little Holland Tract experience that may be relevant to the Committee:

(1) First and foremost, it is important which agencies are given responsibility for

carrying out the land acquisition program. Certainly, the Corps of Engineers should

not have a role in this part of the CALFED program. They lack the expertise, and,

in particular, they lack any knowledge of water rights, which is going to be a key

component of the fair market value of any property acquired as part of the CALFED

land acquisition program. In my view, the Bureau of Reclamation should have the

lead in this process. They have a better understanding of the value of water rights

and landowners are used to dealing with them.

(2) There must be clear lines of communication between the real estate divisions

of the various agencies that operate in the Valley and the Delta and the federal officials involved in the CALFED process. While it is clear that the CALFED process

is still in its infancy, it should be clear by now to all federal officials involved in

land acquisitions in the region that CALFED has set a high priority on acquiring

prime wetlands and wildlife habitat and water rights for environmental purposes.

It should not be the responsibility of the landowner to build these lines of communication or educate these federal officials.

(3) A concerted effort must be made to ensure that the federal government is able

to quickly and efficiently determine the fair market value of property, particularly

those properties that have prime wetlands and wildlife values, and then complete

the transaction in a timely manner. The capacity to act quickly will vastly improve

the willing seller opportunities in CALFED’s habitat acquisition program. Most

landowners do not have the perseverance that I do to stay with a process like this.

Most would never step forward to participate in a program of land acquisition unless they were convinced that they would be treated fairly. The near-term success

of the CALFED land acquisition program hinges on shortening the learning curve

and having some early, painless land acquisition successes.

(4) Federal appraisal standards should be modified to allow the use of sales involving non-profit organizations and governmental agencies. The Delta and the islands within the Delta are very unique and the primary sales of late involve either

non-profit organizations or governmental agencies. Automatic exclusion of these recent sales results in appraisals that do not reflect the current value of the land and

water rights.
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