McGeorge School of Law

Proposition 1E

Proposition 1E: Disaster Preparedness and Flood Prevention Bond Act of 2006

By Brian K. Lee
JD, McGeorge School of Law, University of the Pacific
to be conferred May, 2008
BA, Economics, Brown University, 2006

 

Copyright © 2006 by University of the McGeorge School of Law


Table of Contents

I. Executive Summary
II. Current Condition of California's
Disaster Preparedness and Flood Prevention Infrastructure

III. The Law
IV. The Effects of Proposition 1E
V. Drafting Issues
VI. Constitutional Issues
VII. Public Policy
VIII. Conclusion


I. Executive Summary

On August 29, 2006, Hurricane Katrina came ashore on the Gulf Coast breaching the levees which were meant to protect low-lying New Orleans. Hurricane Katrina was the costliest and most destructive natural disaster in American history. Donald L. Johnson, Hurricane Katrina Service Assessment Report, i-ii (United States Department of Commerce 2006). In response to the devastation wrought by Hurricane Katrina and the perceived vulnerability of California to similar levee breaches, the California legislature voted to submit Proposition 1E to the voters in the 2006 General Election. The Disaster Preparedness and Flood Prevention Bond Act of 2006 (Proposition 1E) provides for the issuance of $4.1 billion in general obligation bonds to finance disaster preparedness and flood prevention projects at the state and local levels. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 36, (Secretary of State, 2006).

If approved by the majority of California voters during the November 2006 general election, Proposition 1E would allow the state to sell $4.1 billion in bonds for disaster preparedness and flood prevention projects. Id. These funds would be combined with federal and local matching funds in order to repair, rehabilitate, reconstruct and replace levees, weirs, bypasses, and flood control facilities in accordance to the State Plan of Flood Control. Id. at 125. No more than $200 million of bond funds can be spent on any one project, with the exception of the flood control improvements to the Folsom Dam. Id.

Proposition 1E also contains several other provisions. Under the act, it is left to the Governor to prioritize project selection and project design to “maximize public benefit.” Id. Similarly, the Governor is authorized to “secure the maximum feasible federal and local matching funds…in order to ensure prudent and cost effective use of [the bond] funds to the extent that this does not prohibit timely implementation of the act.” Id. In addition, Proposition 1E requires the Secretary of the Resource Agency to conduct an independent audit of all bond expenditures and make this audit available to the general public via the Resource Agency’s website. Id. at 126.

Proposition 1E was placed on the ballot by the California Legislature. Initially introduced in the Legislature as Assembly Bill 140, by Assembly member Fabian Nunez and Senate President pro Tem Don Perata, Proposition 1E was approved for submission to the voters by large margins. Assembly Bill 140 passed the State Senate with a vote of 36 to 1. Unofficial Ballot. Assembly Bill 140 passed the State Assembly with a vote of 62 to 9. Unofficial Ballot.

Proposition 1E is a general obligation bond which must be repaid by the State. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 38, (Secretary of State, 2006). The bond would be issued for a term of 30 years. Id. The State Legislative Analyst assumes that this bond would be issued at an interest rate of 5 percent. The State would be required to repay not only the initial principal of $4.1 billion, but also the estimated interest payments of $3.9 billion, for a total of $8 billion. Id. This amounts to a total interest payment of more than 95 cents for every dollar borrowed. The average annual payment to service the bond would be roughly $266 million per year. Id.

In addition to the costs of servicing the bond, there are other fiscal impacts which would be borne by the State and local governments. Under state law, property owned by government entities is exempt from property taxation. Cal. Rev. and Taxn. Code Ann. 202(a)(4) (West 2006). Since Proposition 1E allows for the acquisition of land for flood management purposes, any land acquired by the State under this measure would become exempted from property taxes. Since Proposition 1E does not specify the amount of the bond funds which will be used to acquire privately-held land, it is impossible to forecast the impact on local property taxes, but it is potentially up to several million dollars annually statewide. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 39, (Secretary of State, 2006).

Under Proposition 1E, bond funds will also be used by the State and local governments to develop new flood control projects and purchase property. Id. State and local governments would incur the additional costs of operating and maintaining these projects and properties. Id. The exact amount of these additional costs is unknown at this time, for it is impossible to accurately forecast the operating costs of hypothetical projects.

Proposition 1E would authorize $4.1 billion in general obligation bonds to provide for improved flood management and water supply infrastructure in California. Proponents of the proposition argue that money is badly needed to shore up California’s fragile flood protection system. Opponents argue that the initiative fails to address the fundamental problems with the state’s flood protection system and argue that it is unwise to spend additional funds until these problems are fixed. Ultimately, it will be the voters who will decide whether this financial outlay is prudent under the circumstances.

II. Current Condition of California's Disaster Preparedness and Flood Prevention Infrastructure

A. State Central Valley Flood Control System and Delta Levees

The Central Valley’s flood control system currently includes approximately 1,600 miles of project levees that protect more than 500,000 peoples, two million acres of cultivated land, and approximately 200,000 structures with an estimated value of $47 billion. Leslie F. Harder, The Flood Crisis in California’s Central Valley, Southwest Hydrology 20, (March/April 2006). The state directly owns and maintains about 300 miles of the levee system with the remaining 1,300 miles under the control of local reclamation or levee districts. Id. The state and various local governmental agencies are primarily responsible for the flood control in the Central Valley. League of Women Voters, In Depth Nonpartisan Analysis Proposition 1E, http://ca.lwv.org/lwvc/edfund/elections/2006nov/id/prop1E.html (accessed September 12, 2006). The Central Valley/Sacramento-San Joaquin River Delta is the west’s largest estuary, providing a portion of the drinking water for roughly 23 million Californians. About Cal-Fed. The Central Valley/Delta region also supports a $31 billion agriculture industry and over 750 different plant and animal species. Id.

Of the 73 levee districts in the state, nearly one-half operate at a deficit, the average deficit being $134,000, though one district has a deficit of approximately $500,000. Harder, Southwest Hydrology at 22. Levee districts are funded from property taxes, but not as a proportion of the assessed value. Id. Levee districts are funded by flat fees which are assessed to each parcel of property. Id. As a result, as cities continue to grow into formerly rural areas and the potential for loss of life and property damage increases, the levee districts receive no additional funding. Id. The cost of maintaining levees has also increased two or three fold due to concerns about preserving animal habitat and the impact of levee operations on endangered animals. Id. at 21.

Most of the levees in the Central Valley and the Delta region were constructed in the early-to-mid twentieth century. Id. at 20. Many of the levees have deteriorated as a result of internal and external erosion. Id. at 21. Some levees contain design defects which allow for underseepage and other foundation weaknesses which compromise their structural integrity. Id. Between 1986 and 2003, the United States Army Corps of Engineers found that 89 miles of levee in the Sacramento River Flood Control Project needed “significant repairs at an estimated cost of $145 million” from underseepage alone. Department of Water Resources, Flood Warnings: Responding to California’s Flood Crisis, http://www.publicaffairs.water.ca.gov/newsreleases/2005/01-10-05flood_warnings.pdf (accessed October 10, 2006).

B. Flood Prevention Infrastructure Outside of the Central Valley

Outside of the Central Valley, the State’s role in flood prevention and management generally consists of providing financial support to local governments. League of Women Voters, In Depth Nonpartisan Analysis Proposition 1E, http://ca.lwv.org/lwvc/edfund/elections/2006nov/id/prop1E.html (accessed September 12, 2006). Financial resources are given to local governments by the State generally in the form of grants, which are to be used for flood control subventions, stormwater management projects, flood control bypasses and flood protection corridors. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 38, (Secretary of State, 2006).

III. The Law

A. Background

Currently, multiple agencies at every level of government (federal, state, and local) have some responsibilities for disaster preparedness and flood prevention. League of Women Voters, In Depth Nonpartisan Analysis Proposition 1E, http://ca.lwv.org/lwvc/edfund/elections/2006nov/id/prop1E.html (accessed September 12, 2006). In addition to the various state agencies, numerous private entities own and maintain their own flood control facilities. Id. The State, as well as the federal government, has established a number of programs designed to provide for flood management. Id.

The largest of these programs is a consortium of 12 state and federal agencies, known as the California Bay-Delta Authority (Authority) which currently manages Central Valley/Delta Levee system. Cal. Water Code § 79410. The Authority is accountable to the California legislature, as well as, Congress. Cal. Water Code § 79401(h). The Authority is tasked with using “sound, consistent science” in maintaining and constructing flood management infrastructure. Id. The Authority reports to both the Secretary of the Interior and the California legislature. Id. The Authority also supervises the CALFED program which is a consortium of 25 state and federal agencies. Cal. Water Code § 79008. Federal and state authorities began the CALFED program to “develop a comprehensive and long-term solution to the problems associated with the Bay-Delta, including an equitable allocation of program costs among the beneficiary groups.” Cal. Water Code § 78500.

B. Funding

In general, California’s flood management programs have been funded directly from the General Fund, however, bond funds are sometimes used. League of Women Voters, In Depth Nonpartisan Analysis Proposition 1E, http://ca.lwv.org/lwvc/edfund/elections/2006nov/id/prop1E.html (accessed September 12, 2006). State funding for flood management programs have varied substantially from year to year, depending on the availability of funds from the General Fund and bond monies set aside for flood management. Id. The amount of money available for flood management has been as low as roughly $60 million in 2002-2003, to as high as $270 million in 2000-2001. Id. In addition to state flood management programs, local governments and agencies control their own programs. Id. These local programs are usually funded by a conglomeration of funding sources, including property tax revenues, grants, and financial assistance from the state and federal government. Id.

The 2006-2007 budget provides roughly $416 million in additional flood prevention funding. Department of Finance, (accessed October 4, 2006). Of this, CALFED is allotted an additional $246 million. Id. The budget also includes various increases totaling more than $170 million for flood management related state operations, local assistance, and capital expenditures, including: (1) $38.2 million to the Department of Water Resources for flood prevention activities in the Central Valley and Delta regions, (2) $31.4 million for flood prevention activities outside the Central Valley and Delta regions, (3) $100 million for pay local government’s for the state’s share of federally authorized, locally sponsored flood control projects outside of the Central Valley and Delta regions. Id.

In addition to state funding, the federal government provides its own funds to help alleviate the flood risk in California. The federal agency which spends the most on flood prevention is the Army Corps of Engineers. Ronald D. Utt, The Army Corps of Engineers: Reallocating Its Spending to Offset Reconstruction Costs in New Orleans, http://www.heritage.org/Research/Budget/bg1892.cfm (accessed October 1, 2006.) The Army Corps of Engineers’ budget for 2006, 2007 includes $390 million for flood prevention projects, the total amount which will be spent in California is unknown, but will likely only be a small part of this overall national amount. Id. In addition to the regular budget process, Congress often allocates federal funding for specific earmarks. Id. For a discussion of potential federal earmarks concerning flood prevention in California, please refer to the “Pending Federal Legislation” section below.

C. Past Flood Management-Related Bond Propositions

Since 1996, California voters have approved over $400 million in general obligation bonds to be used specifically for flood management purpose. League of Women Voters, In Depth Nonpartisan Analysis Proposition 1E, http://ca.lwv.org/lwvc/edfund/elections/2006nov/id/prop1E.html (accessed September 12, 2006). Nearly all of these bond monies have already been spent. Id.

In 1996, Proposition 204, provided for a general bond issuance of $995 million as part of the “Safe, Clean, Reliable Water Supply Act.” Legislative Analyst Office, Proposition Number 204, Safe, Clean, Reliable Water Supply Bond Act, http://www.lao.ca.gov/ballot/1996/prop204_11_1996.html (accessed September 16, 2006). Of this amount, $85 million was set aside for levee maintenance and flood prevention grants. Id. Proposition 204 was approved by the voters with over 62 percent of the vote. 1996General Election Returns, http://vote96.ss.ca.gov/Vote96/html/vote/prop/page.961218083528.html (accessed September 16, 2006).

In 2000, Proposition 13, provided for a general bond issuance of $1.97 billion as part of the “Safe Drinking Water, Clean Water, Watershed Protection, and Flood Protection Bond Act. Legislative Analyst's Office, Proposition 13, http://www.lao.ca.gov/ballot/2000/13_03_2000.html (accessed September 16, 2006). Of this amount, $292 million was set aside for flood protection projects. Id. Proposition 13 was approved by the voters with over 65 percent of the vote. Votes for and against March 7, 2000 Statewide Ballot Measures and Constitutional Amendments, http://www.ss.ca.gov/elections/sov/2000_primary/sum_measures.pdf (accessed September 16, 2006).

In 2002, Proposition 40, provided for a general bond issuance of $1.3 billion as part of the “ California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act.” Legislative Analyst’s Office, Proposition 40, http://www.lao.ca.gov/ballot/2002/40_03_2002.htm (accessed September 16, 2006). Of this amount, $75 million was set aside for urban river and stream protection. Id. Proposition 40 was approved by the voters with over 56 percent of the vote. State Ballot Measures, http://www.ss.ca.gov/elections/sov/2002_primary/measures.pdf (accessed September 16, 2006).

D. Concurrent Ballot Initiative

Proposition 84, which was placed on the November 2006 ballot by voter petition, would provide $800 million for flood control projects throughout the state. Official Voter Information Guide, Proposition 84 Water Quality, Safety and Supply; Flood Control, Natural Resource Protection, Park Improvements, Bonds. Initiative Statute, 50, (Secretary of State, 2006).

Three hundred and fifteen million dollars would be allotted to state flood control projects. Id. Two hundred and seventy-five million dollars would be allocated for flood control projects in the Delta region. Id. One hundred and eighty million dollars would be spent on local flood control subventions outside of the Central Valley. Id. Thirty million dollars would be set aside for floodplain mapping and assistance for local land use planning. Id. For additional information on Proposition 84, please refer to the discussion of Proposition 84 contained in this edition of the California Initiative Review.

E. Recently Approved State Legislation

Earlier this year, the legislature passed and the Governor signed Assembly Bill 142 which appropriated $500 million from the General Fund to be used for emergency levee repairs and other flood management-related costs. Bill Text, AB 142. The bill passed without opposition in either the state Senate or Assembly. Unofficial Ballot; Unofficial Ballot.

In an attempt to speed up the rebuilding of California’s flood prevention infrastructure, the Legislature also passed and the Governor signed Assembly Bill 1039. Bill Text, AB 1039. The bill would exempt specified levee projects from the California Environmental Quality Act. Id. It would also require the Secretary for Resources to issue so-called “unified, consolidated permits” for specified “urgent levee repairs.” Id.

By allowing construction firms to acquire a single construction permit, from the state, rather than many different permits, which are issued by state, local, and municipal governments, the Assembly Bill 1039 is meant to streamline the process for levee construction and maintenance and reduce the bureaucratic limitations on flood prevention projects. Id. Assembly Bill 1039 would only allow for the issuance of a single state-issued permit for projects that are “urgent” as specified in the text of the bill. Id. Assembly Bill 1039 will only take effect if Proposition 1E is approved by the voters. Id.

The Legislature also passed and the Governor signed Assembly Bill 798 which would require the Department of Water Resources to identify levees that are at risk for failure based upon a scientific evaluation of Delta levees and to make, by January 1, 2008, funding priority recommendations to the Legislature and the Governor for levee maintenance and improvement projects. Bill Text, AB 798. This bill was meant to ensure that science and not political considerations guide the state’s decisions relating to which flood prevention projects to fund and which to defer. Id.

F. Pending Federal Legislation

The largest single pending federal appropriation concerning flood prevention projects is HR 2864, the Water Resources Development Act of 2006, which has been approved by the House and Senate by overwhelming margins. Bill Status, HR. 2864, http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR02864:@@@R (accessed October 1, 2006). The Senate and House versions of the Bill contain several subtle differences which are to be worked out in conference. Id. The bill contains several large earmarks for California flood prevention projects. Text of HR 2864, http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h2864eas.txt.pdf (accessed October 1, 2006). The largest earmarks are:

-$106 million for the CALFED Levee Stability Program
-$65 million for the Llagas Creek Flood Prevention Project
-$15 million for Santa Barbara Streams Flood Prevention Project
-$130.6 million for the Upper Guadalupe River Flood Prevention Project
-$70 million for the Yuba River Basin Project.

Id . at 156-172.

G. Recent Court Decisions

The recent appellate decision in Paterno v. State of California, which greatly expanded California’s common law concerning inverse condemnation, has increased the state’s potential financial liability in the event of a levee breach or other catastrophic flood events. The Paterno case arose from the 1986 collapse of the Linda levee. Paterno v. State of California, 113 Cal. App. 4th 998, 1002 (2003). The Linda levee was constructed in 1904 from “uncompacted mining debris by men and horses.” Id. at 1006. In 1986, due to a rainstorm and Nevada snowmelt, the Linda levee failed at “about half of its designed capacity.” Id. (Emphasis in the original). As a result of the levee breach 7,000 acres of land were flooded, fifty thousand people were forced to evacuate, twelve people were killed, and $100 million in property damage was sustained. Id. at 1006-1007.

Following the incident, approximately three thousand plaintiffs sued the state and local reclamation boards for the damages caused by the levee breach. Id. at 1003. In its 2003 decision the California Court of Appeals, Third District, ruled that the state was not absolved of financial responsibility by the fact that the county had built the levee, because the state had accepted the responsibility of maintaining and operating the levee. Id. The California Supreme Court refused to hear the State’s appeal. Due to inflation, the California Court of Appeals ordered the state of California to pay $464 million in damages. Department of Water Resources. The California legislature has authorized a “judgment bond” to pay the damages. Id. The bond has a total cost of $915 million over a 30 year period. Id.

The Paterno decision has shifted the financial responsibility of levee failure from local to state authorities. The state faces almost unlimited financial liability if the state levee system fails. For example, the failure of the Jones tract levee in 2004, which led to the flooding of mostly agricultural land, cost the state roughly $90 million in damages and repair costs. California Bay Delta Authority, Levee System Integrity Main. Due to the Paterno decision the state has a financial incentive to ensure that all elements of the flood control system are maintained

IV. The Effects of Proposition 1E

Proposition 1E would authorize the state to sell $4.1 billion in general obligation bonds for various flood management programs. Legislative Analyst Office, Proposition 1E. The bond funds, if approved, would be distributed as follows:

State Central Valley Flood Control System and Delta Levees — $3 Billion

-To evaluate, repair, and restore existing levees in the state’s Central Valley Flood Control system; to improve or add facilities in order to increase flood protection for urban areas in the state’s Central Valley Flood Control system; and reduce the risk of levee failure in the Delta region through grants to local agencies and direct state spending.

Flood Control Subventions — $500 Million

-To provide funds to local governments for the state’s share of costs for locally sponsored, federally authorized flood control projects outside the Central Valley system.

Stormwater Flood Management--$300 Million

- For grants to local agencies outside of the Central Valley system for projects to manage stormwater.

Statewide Flood Protection Corridors and Bypasses--$290 Million

-To protect, create, and enhance flood protection corridors, including flood control bypasses and setback levees; as well as floodplain mapping.

Id .

The total cost of the bond issue with interest would be approximately $8 billion. Id. The average annual debt service payment would be $266 million. Id. Not more than $200 million can be spent on any single project with the exception of Folsom Dam. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 125, (Secretary of State, 2006).

The issuance of the bonds is to be carried out in accordance with “General Obligation Bond Law.” Id. Proposition 1E also provides that in expending the bond funds, the Governor shall “prioritize project selection and project design.” Id. The Governor is also instructed to “secure the maximum feasible amounts of federal and local matching funds to fund [projects] in order to ensure prudent and cost effective use of [the bond] funds.” Id. Moreover, an independent audit of all expenditure of bond funds is to be completed at least annually and it shall be made available to the public via the internet. Id. at 126.

V. Drafting Issues

A. The Governor’s Powers Under the Proposed Law

There do not appear to be any significant drafting issues, but two minor points, both relating to the governor’s powers under the proposed law, merit some discussion.

1. Prioritizing Project Selection

The text of Proposition 1E gives the Governor the power to “prioritize project selection and project design to achieve maximum public benefits from these funds.” Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 125, (Secretary of State, 2006). No definition of “maximum public benefit” is provided. Nor is there any criteria supplied by the text of Proposition 1E on which the Governor is supposed to base his prioritization of projects.

Assembly Bill 798, discussed above, however, provides that the Department of Water Resources to prioritize flood prevention project based on scientific considerations. While neither Assembly Bill 798 nor the express terms of Proposition 1E compel the Governor to abide by the findings of the Department of Water Resources as to which projects should receive priority, it is likely that the Governor follow the recommendations of the Department of Water Resources.

2. Ensuing Prudent, Timely and Cost-Effective Use of Funds

The text of Proposition 1E gives the Governor that power to attempt to,

“secure the maximum feasible amounts of federal and local matching funds to fund disaster preparedness and flood prevention projects in order to ensure prudent and cost-effective use of these funds to the extent that this does not prohibit timely implementation of this article.”

Id .

No definition of “prudent,” “cost-effective,” or “timely implementation of this article” is provided. It is likely that the governor would defer to the judgment of the Department of Water Resources as to what would be “prudent,” “cost-effective,” or “timely,” under specific situations, though this is not required.

The ambiguities identified above cannot be resolved by subsequent legislative action. Because Proposition 1E is an initiative legislative bond act, its provisions may only be altered by another vote of the people of California. Cal. Const. art. 2, § 10(c). Since, Proposition 1E does not provide a section permitting amendment by subsequent legislation, any clarifications or additional definitions would need to be placed on a future ballot. Id.

VI. Constitutional Issues

A. Federal Constitution

Proposition 1E does not raise any federal constitutional issues.

B. State Constitution

1. Requirements of a General Obligation Bond

The California Constitutions imposes several requirements on a general obligation bond. The California Constitution allows the Legislature to create a “General Obligation Bond Proceeds Fund” within the State Treasury into which the proceeds from any sale of general obligation bonds must flow. Cal. Const. art. XVI, § 1.5. The money from the sale of the bonds is then appropriated from the “General Obligations Bond Proceeds Fund” in accordance to the law authorizing the issuance of the bonds. Id. There must be an independent accounting of all the money deposited into the “General Obligations Bond Proceeds Fund.” Id. The California Constitution also requires that any “preparation, issuance, and sale of bonds” issued on the full faith and credit of the State of California must be put before the voters as a bond act or statute. Cal. Const. art. XVI, § 2.

Proposition 1E adheres to the requirements of California’s Constitution. Proposition 1E does provide for the issuance of general obligation bonds in accordance to “General Obligation Bond Law” which likely means that the bond proceeds would be handled in the constitutionally prescribed manner. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 125, (Secretary of State, 2006). The proposition also provides for independent audits of bond funds. Id. Finally, Proposition 1E has been properly submitted to the voters in an election as a bond act.

VII. Public Policy

A. Arguments For Proposition 1E

Proponents of Proposition 1E argue that California’s history of natural disasters necessitates passage of Proposition 1E. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 40, (Secretary of State, 2006). Hurricane Katrina, they contend, exemplifies what can happen when levees and flood control infrastructure are neglected. Id. Proponents contend that a stronger levee system would protect homes and lives by reducing the risk of a catastrophic flood. Id. Proponents contend that the $4.1 billion raised by the bond measure will help strengthen California’s flood prevention infrastructure. Id.

Proponents also claim that if a natural disaster, such as an earthquake was to strike, and the levees were to fail, the 23 million Californians who depend on the Central Valley waterways for at least part of their drinking water would be severely harmed. Id. In the event of a serious levee failure, it is likely that the Central Valley’s $31 billion agriculture industry would also be severely harmed. Id. To support their claim, proponents point to the statement of Lester A. Snow, Director of the California Department of Water Resources delivered before the United States House Committee on Resources on April 6, 2006. Lester A. Snow, Dir. of Cal. Dept. on Water Resources, Address, Protecting Sacramento, Can Joaquin Bay-Delta Water Supplies and Responding to Failures in California Water Deliveries ( U.S. House Comm. On Resources, April 6, 2006) (copy on file with California Imitative Review). In his statement before the committee, Director Snow stated,

“We have considered the effects that a 6.5 magnitude earthquake in the Delta region would have. This magnitude earthquake may have about the same occurrence probability as a hurricane like Katrina. Such a tremblor could cause 30 levee breaches, flooding 16 islands in the Delta. Three hundred billion gallons of salt water would be drawn into these subsided islands from San Francisco Bay. The salt in the Delta would render it useless as a water supply source, shutting down the Central Valley Project and the State Water Project for several months. When water deliveries could resume, they would be smaller in quantity and much lower in quality than Californians have come to expect.

“ California’s economy would be severely affected. Economic losses would easily reach $30-$40 billion in the five years after the earthquake. Thirty thousand jobs would be lost”. Id.

Proponents argue that the funds provided by Proposition 1E would help replace antiquated sewers which pollute stream, rivers, and beaches when the spill or overflow. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 40, (Secretary of State, 2006). Money could also be used to replace century old water mains which are in disrepair. Id. By rebuilding out-of-date water systems and flood control infrastructure, proponents contend, there will be less water pollution and a more reliable source of fresh drinking water for all Californians. Id.

Proponents argue that Proposition 1E will allow for these flood prevention improvements without having to raise taxes. Id. The bonds they argue can be paid off using current revenues, not an increase in taxes. Id. By improving the flood infrastructure now, they argue, the cost of disasters when they do hit will be lessened. Id. In addition, Proposition 1E has a fiscal safeguard, annual audits which will be available to the general public via the internet, which will ensure that the bond funds are spent wisely. Id.

Proponents concede that Proposition 1E, if passed, would increase development in low-lying areas, but they do not believe that this increased development necessarily increases the State’s potential liability if a flood occurs, due to the existence of federal flood insurance. Insurance provides a means by which residents and business owners can protect themselves from flood damages. Id. It is mandatory for certain mortgage holders whose homes lie in areas with less than 100-year flood protection, but is available in areas of lower risk. Id. National studies suggest that about half of all single-family homes in areas with less than 100-year protection hold flood insurance. Id.

Proponents claim that the passage of Proposition 1E would not hurt the efforts of California federal representatives to secure federal funding for flood control programs. As support for their claim, proponents point out that pending federal legislation contains over $400 million in federal funding for California flood prevention efforts. Text of HR 2864, at frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h2864eas.txt.pdf (accessed October 1, 2006).

B. Arguments Against Proposition 1E

Opponents of Proposition 1E do not claim that a stronger flood prevention system is unnecessary. Id. at 41. Rather they claim that Proposition 1E is the wrong way to solve the problem. Id. The opponents argue that more money is not the solution to the problem, rather a more comprehensive solution must be put into place before additional funds are allocated. Id. Especially since the money provided by Proposition 1E would only be enough, according to the opponents, to repair 25 miles of California’s 1,600 mile levee system. Id. A comprehensive solution would not only include additional funds, but relaxed environmental controls, growth plans which do not include housing and development in floodplains, and better education of the public of the risk of floods and the availability of flood insurance. Department of Water Resources, Flood Warnings at 14-20.

For their part, opponents do not claim that an earthquake would not have the devastating effects on California’s economy predicted by Director Snow. Rather, they argue that the pertinent part of Director Snow’s address to the House Committee on Resources concerns how environmental permitting can delay important levee projects. In his address, Director Snow stated, “levee maintenance and repair projects ordinarily require several environmental permits before they can proceed and environmental permitting has sometime been blamed--accurately or not--for delaying levee projects.” Lester A. Snow, Dir. of Cal. Dept. on Water Resources, Address, Protecting Sacramento, Can Joaquin Bay-Delta Water Supplies and Responding to Failures in California Water Deliveries ( U.S. House Comm. On Resources, April 6, 2006) (copy on file with California Imitative Review). Rather than allocate additional funds, opponents argue that bureaucratic restrictions on levee project ought to be lifted. In response to this claim, proponents of Proposition 1E point out that AB 1039 would lift many of the restrictions cited by opponents and would allow for a single permit process for “urgent levee repairs. Bill Text, AB 1039, (accessed September 28, 2006).

Opponents contend that, despite the claims by the proponents, Proposition 1E does not provide for a single additional reservoir or water treatment plant to increase the supply of fresh drinking water in the state. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 41, (Secretary of State, 2006 ). Opponents further complain that Proposition 1E places the interests of urban voters ahead of rural voters. As written, Proposition 1E would provide state taxpayer money to repair and replace water supply infrastructure in primarily urban areas. Id. Rural areas would lose under this system according to opponents, who argue that local tax dollars should go to fund water supply improvements for large urban areas, not state tax dollars. Id.

Opponents of Proposition 1E argue that by providing additional flood protection, the state would be encouraging development in low-lying areas of the Central Valley which are prone to flooding. Public Policy Institute of California, Flood Control, http://www.ppic.org/content/pubs/jtf/JTF_FloodControlJTF.pdf (accessed October 10, 2006). In contrast to the proponents of Proposition 1E, opponents do claim that by increasing development in flood prone areas, the state is setting itself up for financial ruin when floods do occur, in support of this claim, opponents cite the Paterno decision.

Opponents claim that Proposition 1E is fiscally irresponsible. Official Voter Information Guide, Proposition 1E Disaster Preparedness and Flood Prevention Bond Act of 2006, 41, (Secretary of State, 2006 ). The state currently has record-breaking revenues available to pay for water infrastructure, but instead of using current revenues to pay for repairs and maintenance out of current receipts, Proposition 1E would borrow money over a 30 year period, essentially doubling the cost of the repairs from $4.1 billion to almost $8 billion. Id. Moreover, opponents, who cite the drafting issues mentioned above, argue that Proposition 1E allows politicians, not hydrologists or engineers, to decide which projects should receive funding. Id.

Lastly, opponents claim that it is the responsibility of the federal government and not the state government to prepare for natural disasters. Id. Rather than putting the state into further debt, the proponents of Proposition 1E should be attempting to secure greater federal funding for California’s infrastructure. Id. Opponents also claim that by funding important flood control projects through state bonds, there is less incentive for the federal government to spend money on California flood prevention projects which makes it harder for California’s federal representatives to secure funding.

VIII. Conclusion

Proposition 1E would authorize $4.1 billion dollars in general obligation bonds to provide for improved flood management and water supply infrastructure in California. Proponents argue that the measure would protect the homes and lives of Californians. Moreover, they argue, the measure would protect clean drinking water, improve water quality, secure water systems and preserve California’s beaches. Opponents argue that the measure would not provide a single drop of additional clean drinking water. They argue that the measure is fiscally irresponsible, places the interests of urban areas ahead of rural ones, and would, in any event, only provide enough money to repair 25 miles of levees. Ultimately it is voters who must decide whether the potential benefits of Proposition 1E outweigh its potential costs.