Southern Californians who received cash rebates for replacing their lawns with drought-tolerant landscaping will soon get a federal tax form in the mail reporting the amount, but water officials said Thursday it is still not clear whether the reimbursement will be taxable.

 

Officials from the Metropolitan Water District of Southern California — which funded a $340 million incentive program — say they are sending 1099 forms to turf rebate recipients of $600 or more and leaving reporting up to participants and their tax advisers.

 

“We’re doing what we believe is our obligation, which is sending the 1099s,” said Deven Upadhyay, an MWD manager. Recipients “would have to work with their own tax adviser in terms of the way that they might characterize it in terms of the way they file their own taxes.”

 

This would affect most of those who received rebates, Upadhyay said, though he did not give an exact number. The average residential rebate totals about $3,000, according to MWD data. In some cases, residents received rebates of more than $70,000.

 

MWD spokesman Bob Muir said the agency believes the rebates should be “tax-free.”

 

California provides a tax exemption for turf removal rebates, but the federal tax code provides an exemption only for rebates related to energy efficiency, officials said.

‘Strategic’ water conservation promoted

The peculiarity here is that the federal government has been formally committed to promoting water conservation for decades, since long before warnings about the West’s expected “mega-drought” began. This is from a 1998 U.S. Environmental Protection Agency overview of federal conservation policy:

The Safe Drinking Water Act (SDWA, 42 U.S.C. 300j-15), as amended in 1996, requires the United States Environmental Protection Agency (EPA) to publish guidelines for use by water utilities in preparing a water conservation plan. …

 

These Water Conservation Plan Guidelines are addressed to water system planners but use of the Guidelines is not required by federal law or regulation. States decide whether or not to require water systems to file conservation plans consistent with these or any other guidelines. …

 

The infrastructure needs of the nation’s water systems are great. Strategic use of water conservation can help extend the value and life of infrastructure assets used in both water supply and wastewater treatment, while also extending the beneficial investment of public funds through the SRF and other programs.

L.A. controller calls program a ‘gimmick’

But there’s another twist to this story. The MWD program that many L.A. and water officials want to be federal tax-free doesn’t appear to be very effective, according to a Los Angeles city audit released in November:

Los Angeles’ turf rebate program saved less water per dollar spent than other Department of Water and Power conservation programs, an audit released by the city controller said Friday.

 

Auditors found that money spent for rebates on items such as high-efficiency appliances yielded a water savings almost five times higher than turf replacement. …

 

City Controller Ron Galperin called on the water provider to focus its conservation programs in order to achieve more sustained and cost-effective water savings. …

 

In fiscal year 2014-15, the DWP spent $40.2 million on customer incentive and rebate programs, Galperin’s office said. Nearly $17.8 million of that went to turf rebates. Each dollar invested in turf rebates is expected to save 350 gallons of water over the estimated 10-year “life expectancy” of residential turf replacement, the audit said.

 

In comparison, the department spent $14.9 million on rebates for high-efficiency appliances and fixtures. Those rebates yield a per-dollar savings of more than 1,700 gallons of water over their estimated lifetimes of up to 19 years, Galperin’s office said.

 

The turf rebate program “had value as a gimmick that … probably spurred a heightened awareness,” Galperin said at a news conference, adding: “It’s the job of my office to look at return on investment.”

That’s from a Nov. 20 Times story.

On Wednesday, the State Water Resources Control Board adopted new emergency regulations to protect endangered and threatened fish. Low flows in four tributaries of the Russian River cause “high temperatures, low oxygen levels and isolated pools of water that can kill fish,” such as the coho salmon and steelhead trout.

Starting July 3, roughly 13,000 properties in the watersheds of Dutch Bill Creek, Green Valley Creek, Mark West Creek and Mill Creek will be subject to “enhanced conservation measures” in addition to the existing statewide water restrictions. As reported by the Press Democrat, residents are subject to the following rural water rules:

• “No watering lawns, washing driveways and sidewalks, washing motor vehicles, filling or refilling decorative ponds and fountains, and no use of water in a fountain or water feature not part of a recirculating system.
• “No watering of landscapes (trees and plants, including edible plants) that causes runoff onto adjacent property or non-irrigated areas or within 48 hours after measurable rainfall.
• “Limits landscape watering to two days per week and only from 8 p.m. to 8 a.m.
• “Sets no limit on use of graywater — from bathtubs, showers, bathroom washbasins, clothes washing machines and laundry tubs as well as captured rainwater — for lawn and landscape irrigation, washing motor vehicles and use in decorative ponds, fountains and other water features, except for prohibition of irrigation runoff or application within 48 hours after measurable rainfall.”

“This is a very extreme situation,” said Corinne Gray, a senior environmental scientist with the state Department of Fish and Wildlife. “There are already fish dying in the streams.” Gray told the SWRCB that the fish merely required a “trickle of water” between pools on the four creeks.

Farm representatives attending the meeting claimed parts of the measure were regulatory overreach. Text in the emergency measure enforces these new regulations “regardless of water seniority.”

This kind of enforcement has led to lawsuits against SWRCB. Just this week, the Banta-Carbona Irrigation District challenged water restrictions imposed by the state board, the first of potentially many more suits to come.

It remains to be seen whether the state board has the right to overrule century-old rights to water.

U.S. Secretary of the Interior Sally Jewell

U.S. Secretary of the Interior Sally Jewell announced in a press release that the Interior’s Bureau of Reclamation “will invest nearly $50 million to improve water efficiency and conservation in California and 11 other western states.”

“In a time of exceptional drought, it is absolutely critical that states and the federal government leverage our funding resources so that we can make each drop count,” said Secretary Jewell. “Being ‘water smart’ means working together to fund sustainable water initiatives that use the best available science to improve water conservation and help water resource managers identify strategies to narrow the gap between supply and demand.”

Secretary Jewell made the announcement Wednesday at the Donald C. Tillman Water Reclamation Plant in Van Nuys, joined by Nancy Sutley, chief sustainability and economic development officer of the Los Angeles Department of Water and Power, and Estevan López, commissioner of the DOI Bureau of Reclamation. Her remarks included a push for more federal-state partnerships in the area of water conservancy.

“Through the WaterSMART Program, Reclamation is providing funding for water conservation improvements and water reuse projects across the West,” Reclamation Commissioner Estevan López said. “We commend the state of California for all the steps they have already taken to alleviate the impacts of the drought. We hope this federal funding for water reuse and efficiency will help us leverage scarce resources between the state and federal governments to bring much-needed relief for the people and environment of California.”

WaterSMART, according to its website, is a “program of the Department of the Interior that focuses on improving water conservation and helping water-resource managers make sound decisions about water use.”

According to the release, Reclamation is investing “more than $24 million in grants for 50 water and energy efficiency projects in 12 western states, more than $23 million for seven water reclamation and reuse projects in California, and nearly $2 million for seven water reclamation and reuse feasibility studies in California and Texas.”

At the protests, in Los Angeles and Sacramento, activists delivered more than 500,000 signatures from people in California and around the country who signed onto a series of urgent petitions to Nestlé executives, Governor Brown, the California State Water Resources Control Board,  and the U.S. Forest Service urging an immediate shutdown of Nestlé’s bottling operations across the state.

“With people across California doing their part to conserve water — it’s time that Nestlé did the right thing and put people over profits — by immediately halting their water bottling operations across the State,” wrote Tim Molina in a press release. He is the strategic campaign organizer for the California-based Courage Campaign. “If Nestlé won’t do what’s right to protect California’s precious water supply, it is up to Governor Brown and the California Water Resource Control Boards to step in and stop this blatant misuse of water during our state’s epic drought.”

The Desert Sun conducted an investigation on bottling practices in March and found that Nestlé has been operating on a permit that expired back in 1988. The findings continue as follows:

[blockquote style=”3″]

• “No state agency is tracking exactly how much water is used by all of the bottled water plants in California, or monitoring the effects on water supplies and ecosystems statewide. The California Department of Public Health regulates 108 bottled water plants in the state, collecting information on water quality and the sources tapped. But the agency says it does not require companies to report how much water they use.
• “That information, when collected piecemeal by state or local agencies, often isn’t easily accessible to the public. In some cases, the amounts of water used are considered confidential and not publicly released.
• “Even as Nestle Waters has been submitting required reports on its water use, the Forest Service has not been closely tracking the amounts of water leaving the San Bernardino National Forest and has not assessed the impacts on the environment.
• “While the Forest Service has allowed Nestle to keep using an expired permit for nearly three decades, the agency has cracked down on other water users in the national forest. Several years ago, for instance, dozens of cabin owners were required to stop drawing water from a creek when their permits came up for renewal. Nestle has faced no such restrictions.
• “Only this year, after a group of critics raised concerns in letters and after The Desert Sun inquired about the expired permit, did Forest Service officials announce plans to take up the issue and carry out an environmental analysis.”[/blockquote]

A recent poll by Forbes noted that 65 percent of Americans believe that Nestlé “should stop using California water to create bottled water.”

But Bruce Maiman from the Sacramento Bee reported Nestlé uses 80 million gallons per year, in comparison to the 65 trillion gallons of water that the state normally receives. He noted Nestlé’s bottling operations are “troubling” but halting them will likely solve nothing.

Nestlé has responded to harsh criticism in a variety of statements and outlined the impact of their operations in California, stating that the water they source from the state is “used efficiently and effectively, and bottled so that it can be drunk as part of a healthy diet.” The amount of water that Nestlé withdraws is “[l]ess than 0.008 percent of the total.”

“Nearly 50 billion cubic metres (13 trillion gallons) of water is used in California each year. Nestlé uses less than 4 million cubic metres (1 billion gallons) in all its operations. We operate five bottled water plants (out of 108 in the state) and four food plants. Our bottled water plants use around 2.75 million cubic metres (725 million gallons) of water a year.”

Even if Nestlé were to shut down all of its bottling plants in California, “the resulting annual savings would be less than 0.3 percent of the total the governor says the state needs residential and public users to save.”

The state posted its best numbers in December, with statewide water conservation increasing 22 percent, according to the State Water Resources Control Board. By comparison, state water officials said conservation by roughly 400 water agencies was up only 10 percent in November.

The good water conservation numbers were largely due to an early December downpour, which brought an average of 2.5 inches of rain to the parched landscape. In the first three weeks of December, Sacramento enjoyed 13 rainy days, according to News 10.

“This was a wet December in most of the state, and people got the message not to water on top of the rain – that is good news,” State Water Board Chair Felicia Marcus said in a press release. “Our challenge will be to keep outdoor irrigation to a minimum as we move into the warmer spring months.”

Gov. Jerry Brown: No drought sound-byte

At a Friday press conference, Gov. Jerry Brown declined to back mandatory water restriction and urged Californians to continue voluntary efforts to conserve water.

“Even though it’s starting to rain, unfortunately, there’s not a sound-byte or a glib sentence that can put all this together,” Brown told reporters. “California is facing a very severe drought.”

Last summer, the state began tracking water savings by large retail suppliers. Since then, California has conserved more than 134 billion gallons of water compared with the previous year. Water officials say that is enough to supply 1.8 million California residents with water for a full year.

The good news from December, however, was matched by equally disappointing news in January, when California experienced one of the driest months on record. The state remains on track for a fourth consecutive dry year.

In February, the pendulum appears to be swinging back to more rain. This past weekend, the “Pineapple Express” drenched the Pacific Northwest. Reported NBC News, the storm drenched “Northern and Central California with up to 3 inches of rain through Monday morning, and accompanying winds could produce small tornadoes in the region.”

According to the National Weather Service, the atmospheric river of rain called the “Pineapple Express” occurs “from a ribbon of moist air moving across the Pacific Ocean.”

ACWA analyzing water use data

The state’s fluctuating rainfall is creating work for the Association of California Water Agencies, a coalition of 430 public agencies responsible for 90 percent of the water delivered to cities, farms and businesses in California. The association is working with state water officials to review the state’s water data and emergency drought regulations, which are scheduled to expire in April. Officials will meet next month to consider extending those regulations.

“We were pleased about December, but obviously, January was pretty worrisome,” Dave Bolland, a special projects manager with the Association of California Water Agencies, told the San Jose Mercury News. “It’s obvious at this point that the drought emergency is still with us.”

In December, the Central Coast reported the greatest water conservation in the state, decreasing its water use by 29 percent compared to the previous year. According to the newly released data, the San Francisco Bay Area’s water use decreased by 21.6 percent in December, while Sacramento’s water use declined by 21.4 percent.

“CA is doing its part to #SaveOurWater, but the drought is far from over,” Brown tweeted this week. “Careful stewardship & conservation must be our way of life.”

Congressional delegation more active on water policy

California’s ongoing drought has encouraged the state’s congressional delegation to take a more active role in crafting water policy. This week, the U.S. Senate and House of Representatives hosted a joint hearing on how state and local governments would cope with a proposal to amend the federal Clean Water Act.

“We must do all we can to protect these water resources, because this is all we have,” Rep. Grace Napolitano, D-El Monte, said in a statement about the proposed regulatory changes. “When the water dries up, our way of life and our local economies will dry up with it.”

More action from the federal government is unlikely to be welcomed by farmers in the Central Valley, who routinely point to state and federal regulations for making the state’s water problems worse.

“The most severe restrictions are often triggered when water is abundant,” lamented the Families Protecting the Valley, a coalition of farmers, agriculture providers and community leaders in the San Joaquin Valley. “When storms came through in mid-December, water agencies worked closely with fish and wildlife agencies to comply with endangered species regulations while trying to capture some water for people, businesses and farms. Despite these efforts, we still lost nearly 200,000 acre-feet of water.”

A longstanding truism when it comes to needed goods such as water systems, flood control or catastrophic earthquake insurance is that the public wants them but does not want to pay for them.

This was confirmed anew by a recent USC-L.A. Times poll, which found only 36 percent of those polled were in favor of raising taxes for statewide water system upgrades. A plurality of 46 percent indicated they would be willing to pay more to assure a more stable water supply.  However, 51 percent indicated that taxes should not be used to upgrade water storage and conveyance facilities.

As pollster Drew Lieberman of the Democratic polling firm of Greenberg, Quinlan and Rosner put it, “Support evaporates entirely when you put a price tag on it.”

The results of this poll may affect the $11.1 billion water bond on the Nov. 4 ballot that may or may not contain funding for any new water storage facilities. This bond will not fund the proposed new $15 billion twin tunnels to convey water under the Delta southward to farms and cities.

The water bond was pulled from the ballot in 2010 and 2012 for fear of voter rejection.

Voters like status quo’s stable cost

But there may be good reason beyond aversion to taxes as to why Californians don’t want to pay for added new taxes to build new water tunnels under the Delta and re-create a new Delta ecosystem for fish.

Consider the selling points for the bond. It would:

–Provide a fix for the Sacramento Delta for fish

–Upgrade flood levees

–Prevent a catastrophic loss of Delta water in an earthquake

–Provide more water storage for droughts

The idea that these projects are urgently needed at a cost of many billions of dollars is tough to sell to the public when they perceive the existing system to be working just fine, and when most urban areas have enough water to weather the drought. Many Californians probably feel they have already done their part — 87 percent of those polled indicated they have cut back their daily water usage. This leads most people to believe that conservation keeps the state water shortage manageable.

Voters favor more conservation

This viewpoint is borne out by the USC poll. All the highly favored policies were conservation-oriented: water recycling (92 percent), urban storm-water capture (91 percent), more underground water storage (83 percent), more personal cutbacks in water usage (81 percent) and desalination plants (75 percent).

Building new dams and reservoirs was only approved by 65 percent of those polled.

Water policy-makers have so successfully sold the public on water conservation that the public apparently does not believe in paying taxes for any new system-wide improvements because conservation is perceived as free.

From 2000 to 2006, Californians approved five water bonds totaling $18.7 billion. But that water bond funding mostly went for land acquisitions for wetlands or preserving existing mountain watersheds, landscaping for water retention, eliminating water-consuming invasive plant species, environmental studies, etc.  But not one drop of new system water storage was funded by those bonds.

Once again, voters will approve waterless water bonds that are conservation-oriented during economic boom times. But when it comes to funding hard water infrastructure projects in an economy still recovering from recession, the public believes that more conservation is the solution.

Those who opposed the proposed Peripheral Canal in 1982 in favor of conservation policies have been so successful that it is now difficult to get the public to favor any taxes for water projects — even in a crisis.

Nov. 26, 2012

By Wayne Lusvardi

There is no apparent drought of journalists with metaphors to define the so-called water crisis in the United States and California.  Every month, it seems, another new end-of-the-world water book comes out.

Cynthia Barnett is the author of the book, “Blue Revolution: Unmaking America’s Water Crisis.” In the Los Angeles Times, she recently wrote an op-ed, “America’s Water Mirage.”  After visiting Hoover Dam with her daughter, Barnett’s sudden insight was, “[E]ven at Hoover Dam, the ugly truth about our water crisis is being ignored.”

Barnett’s article displayed a photograph of the “bathtub ring” around the rim of Lake Mead on the Colorado River showing evidence of “misuse of this precious resource.”

The problem is that the imagery doesn’t square with the reality. Lake Mead is part of the Colorado River system that has shown great variability in water levels over the last 100 years. A picture of the side walls of Lake Mead or Lake Powell showing water levels have dropped from their peak doesn’t tell us much of anything.  The level of water in the system of dams that make up the Colorado River system has been rising and falling for half a century.  And the ups and the downs mostly offset each other.

Conservation Ethic

The ignored problem here in California is that the “conservation ethic” that Barnett calls for has been mostly tapped out.  It is granted that water conservation has been successful in California ever since 1982, when voters turned down the proposed Peripheral Canal Project.  Population has grown about 59 percent since 1980. No new dams or reservoirs have been added to the state’s water system since then.

But the era of water conservation has mostly run dry by design, not drought.  According to Bob Johnson, a water consultant retired from the U.S. Bureau of Reclamation, this has left California with only a six-month supply of water.

California has spent $18.7 billion on five water bonds since 2000.  These bonds funded mostly open space acquisitions and landscaping projects that captured no new water and built no new reservoirs.

Those bond funds could have funded the proposed $13 billion Delta Tunnels.  Or they could have funded both new reservoirs proposed as part of the $11.1 billion Consolidated Water Bond to appear on the 2013 ballot.  Instead the bond monies have been mostly squandered.  Water bonds have been partly turned into a slush fund for the state Legislature to redistribute Cap and Trade taxes among other activities.

Another green water project failure is Sen. Dianne Feinstein’s $1 billion San Joaquin River Restoration Project. The project has been turned into a wealth redistribution scheme that Congress refuses to continue funding beyond the $88 million allotted for environmental studies.  Even if funded, all this project would do is take water from farmers and give it to commercial fishing, tourist hotel-motel developers and real estate enterprises.

On top of losing water, farmers would have to pony up a tax to pay for the projects that would benefit those who get the water from the politicians.

In her book, Barnett doesn’t mention the outcome of the infamous Delta Smelt court case in California. From 2007 to 2010, this environmental protection case shut down water deliveries to Southern California and some Central Valley farmers. The presiding judge ruled the science on which the case rested was “bogus.” During the “man-made drought” from the water shutdown, Southern California cities enacted water conservation ordinances, hired an army of water police, and raised water rates 15 percent or more. When the water shutdown order expired, and Brown officially declared the “drought” over, no cities or water districts repealed their water rate increases.

Water Conservation is Bad for Your Aquifer

Barnett’s “Blue Revolution water conservation ethic” advocates stopping the depletion of aquifers and halting large water projects.

Here she is uninformed about how aquifers work. They are mostly drawn down during dry years. And most urban aquifers in California are adjudicated by state courts and can’t be “depleted” beyond their safe yield, except possibly by urban water conservation efforts.

David Powell, former chief engineer for the California Department of Water Resources’ San Diego Office, paradoxically has demonstrated that urban water conservation actually depletes local aquifers and costs an astronomical $1,083 per acre-foot of water saved. Current water rates are about half that for the Metropolitan Water District of Southern California.

Stopping large water projects in California has about a snowball’s chance in Death Valley.  This is because the electorate has turned into a Fusion Party for unchecked taxation and the governor has endorsed the Delta Restoration Project and Tunnels.

Can Big Water Projects be Financed?

The politics of water conservation in California has failed to be sustainable. The only likely thing that would stop the proposed Delta Restoration and Tunnel Projects now is red ink. There are no assured commitments yet for financing the Delta Restoration unless farmers pay for most of it.  And farmers are only willing to pick up most of the tab if they can in return get “regulatory assurance” of no shut downs of water by lawsuits for 35 years. Good luck with that in Green California.

The only other alternative is for urban water districts to raise water rates by an estimated $240 per year per household (assuming 25 percent share of costs by farmers and no federal funding).  But there would be no guarantee of how much water Southern California would be entitled to for that hefty price tag.

The possibility that Congress would fully fund California’s package of water projects — as it did in the 1930’s Great Depression — is dead, given a Republican-controlled House of Representatives and the federal Fiscal Cliff. It is not yet clear what Democrats would be willing to give up to get the Republican House to vote for the federal share of the cost of the Delta Restoration Plan.

So if voters, farmers, or urban ratepayers and the House are unwilling to pop about $53 billion for the total package of the Delta restoration, tunnels, dike repairs and ecosystem restoration, California would have to continue with water conservation even in wet years. The state’s 20/20 Water Conservation Plan calls for a 20 percent reduction in water use by 2020.

Contrary to Barnett, most of any continued conservation will come from farmers, not urban or industrial users. Barnett is still living in 1982, when the Peripheral Canal got shot down by voters.