[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
OVERSIGHT HEARING ON THE FUTURE WATER NEEDS OF CALIFORNIA UNDER CALFED, 
 CALFED FINANCING, THE MONITORING AND PERFORMANCE STANDARDS OF CALFED, 
                    AND CALFED PUBLIC PARTICIPATION

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

                           OVERSIGHT HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                      MAY 12, 1998, WASHINGTON, DC

                               __________

                           Serial No. 105-83

                               __________

           Printed for the use of the Committee on Resources

                               -----------

                    U.S. GOVERNMENT PRINTING OFFICE
48-751 cc                   WASHINGTON : 1998



                         COMMITTEE ON RESOURCES

                      DON YOUNG, Alaska, Chairman
W.J. (BILLY) TAUZIN, Louisiana       GEORGE MILLER, California
JAMES V. HANSEN, Utah                EDWARD J. MARKEY, Massachusetts
JIM SAXTON, New Jersey               NICK J. RAHALL II, West Virginia
ELTON GALLEGLY, California           BRUCE F. VENTO, Minnesota
JOHN J. DUNCAN, Jr., Tennessee       DALE E. KILDEE, Michigan
JOEL HEFLEY, Colorado                PETER A. DeFAZIO, Oregon
JOHN T. DOOLITTLE, California        ENI F.H. FALEOMAVAEGA, American 
WAYNE T. GILCHREST, Maryland             Samoa
KEN CALVERT, California              NEIL ABERCROMBIE, Hawaii
RICHARD W. POMBO, California         SOLOMON P. ORTIZ, Texas
BARBARA CUBIN, Wyoming               OWEN B. PICKETT, Virginia
HELEN CHENOWETH, Idaho               FRANK PALLONE, Jr., New Jersey
LINDA SMITH, Washington              CALVIN M. DOOLEY, California
GEORGE P. RADANOVICH, California     CARLOS A. ROMERO-BARCELO, Puerto 
WALTER B. JONES, Jr., North              Rico
    Carolina                         MAURICE D. HINCHEY, New York
WILLIAM M. (MAC) THORNBERRY, Texas   ROBERT A. UNDERWOOD, Guam
JOHN SHADEGG, Arizona                SAM FARR, California
JOHN E. ENSIGN, Nevada               PATRICK J. KENNEDY, Rhode Island
ROBERT F. SMITH, Oregon              ADAM SMITH, Washington
CHRIS CANNON, Utah                   WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   CHRIS JOHN, Louisiana
JOHN PETERSON, Pennsylvania          DONNA CHRISTIAN-GREEN, Virgin 
RICK HILL, Montana                       Islands
BOB SCHAFFER, Colorado               RON KIND, Wisconsin
JIM GIBBONS, Nevada                  LLOYD DOGGETT, Texas
MICHAEL D. CRAPO, Idaho

                     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              PETER A. DeFAZIO, Oregon
RICHARD W. POMBO, California         GEORGE MILLER, California
HELEN CHENOWETH, Idaho               OWEN B. PICKETT, Virginia
LINDA SMITH, Washington              CALVIN M. DOOLEY, California
GEORGE P. RADANOVICH, California     SAM FARR, California
WILLIAM M. (MAC) THORNBERRY, Texas   ADAM SMITH, Washington
JOHN B. SHADEGG, Arizona             RON KIND, Wisconsin
JOHN E. ENSIGN, Nevada               LLOYD DOGGETT, Texas
ROBERT F. SMITH, Oregon              ---------- ----------
CHRIS CANNON, Utah                   ---------- ----------
MICHAEL D. CRAPO, Idaho
                  Robert Faber, Staff Director/Counsel
                   Joshua Johnson, Professional Staff
                      Steve Lanich, Minority Staff





                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held May 12, 1998........................................     1

Statement of Members:
    Doolittle, Hon. John T., a Representative in Congress from 
      the State of California....................................     1
    Herger, Hon. Wally, a Representative in Congress from the 
      State of California, prepared statement of.................     4
    Miller, Hon. George, a Representative in Congress from the 
      State of California........................................     3
    Radanovich, Hon. George P., a Representative in Congress from 
      the State of California, prepared statement of.............     5

Statement of Witnesses:
    Berliner, Tom, City Attorney Office, San Francisco, 
      California.................................................     7
        Prepared statement of....................................    83
    Bobker, Gary, The Bay Institute..............................    59
        Prepared statement of....................................   119
        Letter to Lester Snow....................................   139
    Davis, Martha, Board Member, Mono Lake Committee Sierra 
      Nevada Alliance............................................    10
        Prepared statement of....................................    84
    Dickerson, Dick, President, Regional Council of Rural 
      Counties, Redding, California..............................    63
        Prepared statement of....................................    96
    Gaines, Bill, California Waterfowl Association...............    65
        Prepared statement of....................................    98
    Golb, Richard, Northern California Water Association.........    57
        Prepared statement of....................................    93
    Hall, Stephen, Association of California Water Agencies, 
      Sacramento, California.....................................    12
        Prepared statement of....................................    87
    Moghissi, A. Alan, President, Institute for Regulatory 
      Science, Columbia, Maryland................................    61
        Prepared statement of....................................   129
    Pauli, Bill, California Farm Bureau Federation, Sacramento, 
      California.................................................     9
        Prepared statement of....................................    83
    Potter, Robert, Chief Deputy Director, Department of Water 
      Resources, State of California.............................    39
        Prepared statement of....................................    89
    Quinn, Timothy, Deputy General Manager, Metropolitan Water 
      District of Southern California............................    42
        Prepared statement of....................................    91
    Snow, Lester, Executive Director, CALFED Bay-Delta Program...    55
        Prepared statement of....................................   112
    Yardas, David, Senior Analyst, Environmental Defense Fund, 
      California.................................................    40
        Prepared statement of....................................   102

Additional material supplied:
    CALFED Bay-Delta Program, Briefing Packet, May 1998..........   144

Communications submitted:
    Wilson, Pete, Governor, California, letter from..............    90


OVERSIGHT HEARING ON THE FUTURE WATER NEEDS OF CALIFORNIA UNDER CALFED, 
 CALFED FINANCING, THE MONITORING AND PERFORMANCE STANDARDS OF CALFED, 
                    AND CALFED PUBLIC PARTICIPATION

                              ----------                              


                         TUESDAY, MAY 12, 1998

        House of Representatives, Subcommittee on Water and 
            Power Resources, Committee on Resources, 
            Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:30 p.m., in 
room 1334, Longworth House Office Building, Hon. John T. 
Doolittle (chairman of the Subcommittee) presiding.

   STATEMENT OF HON. JOHN T. DOOLITTLE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Doolittle. The Subcommittee on Water and Power will 
come to order.
    The Subcommittee is meeting today to hear testimony on 
future water needs of California, CALFED Financing, CALFED 
public participation, and the monitoring and performance 
standards of CALFED.
    We are gathered here today to have further oversight over 
the CALFED Program. Last year, we held an oversight hearing 
concerning this program with emphasis on the fiscal year 1998 
Federal Funding Request. Since that hearing, the Subcommittee 
has been monitoring the program and seeking answers to 
questions raised at last year's hearing. Even though we are 
into yet another year of budget requests, the information we 
have requested has been slowly materializing. We hope this 
hearing will accelerate the receiving of those answers.
    Our questions are focused, today, on four central concepts 
associated with the CALFED Program: water supply, financing, 
evaluation of progress, and public participation. Witnesses at 
the hearing are expected to provide current information 
regarding these areas. To develop the issues more clearly, 
witnesses have been selected for our floor panels to address 
the following basic questions: one, has CALFED expanded or 
reduced the options available to meet future California water 
needs? Specifically, how are going to use the CALFED process to 
meet the future California urban, rural, agricultural, and 
environmental water needs? Has the CALFED prejudged or 
eliminated some water planning options? For example, on-stream 
storage, water reuse, water transfer, et cetera.
    These issues must be addressed, immediately, for two 
reasons, First, the demand for water in California already 
exceeds water supply during drought years, and second, 
according to CALFED own documents and the California Department 
of Water Resources, by the year 2020, California will have a 3-
million up to a 7-million-acre-foot-per-year shortage. If the 
CALFED Program does not immediately begin to address these 
needs through quantifiable means including on-stream storage, 
we will lose the valuable time necessary to prepare for this 
need. I'm interested in each of the members first panel 
providing the Subcommittee with their level of commitment 
regarding expanded water supplies.
    Two, how does CALFED propose to pay for California's 
expanding water needs. Interim fundings for the common elements 
in the CALFED Program is being provided by Federal 
appropriations and California water bonds. Are the long-term 
solutions going to be funded by public interest groups, 
beneficiaries, or government financing? Also, are CALFED costs 
going to be borne by local communities through unintended 
program consequences?
    In addressing these questions, I would like the second 
panel to provide its opinion regarding benefit-based financing. 
Which benefits should be paid for by public money versus user 
money? Should some groups' contributions be reduced based on 
their members limited ability to pay? And should contributing 
stakeholders group be credited for payments they have already 
made to CALFED or to other ecosystem restoration programs 
operating within the region.
    Three, after spending hundreds of millions of dollars how 
does CALFED propose to determine if we are any closer to the 
environmental restoration which it asserts is the reason for 
asking for the initial funding? How do we evaluate the 
effectiveness of the funding we are providing? What clear and 
unambiguous performance standards are being adopted to 
determine if we are closed to success or have achieved success? 
Are we going to postpone any major program decision or 
alternative until we have the results of the early phases or 
are we going to agree on a basic blueprint and simply adjust it 
through adaptive management as we move along?
    A related issue, the definition of our starting point. It's 
my understanding that the Early Restoration Program has not 
defined the baseline for determining the goals and targets for 
restoration activities. While there maybe a wide spectrum of 
views on how to create baselines, we nevertheless, must develop 
both an operating baseline as well as a financial baseline if 
we are ever to determine if we are making progress for the, 
literally, billions of dollars we are being asked to spend.
    And four, are the affected parties of the public being 
given an ample opportunity to participate in the process? Have 
we institutionalized the process to assure that local 
landowners are fully appraised of potential program impacts? 
Have we institutionalized a process to assure that local 
landowners are protected from government manipulation of 
property values as part of a Habitat Rehabilitation Program.
    I do not believe that these concerns that present 
insurmountable obstacles of the CALFED Program rather they 
represent reasonable attainable goals which should reflect the 
way government conducts its business. As mentioned last year, 
the Federal California Bay-Delta Environmental Enhancement Act 
coupled with California Proposition 204 advanced a partnership 
with potential funds of nearly $1.5 billion. It has the 
potential to be used to expand the water quality, enhance water 
quality, and restore environmental resources in the Bay-Delta. 
Yet, how it is administered will be a test of government's 
stability to transition to a smarter, more efficient, less 
coercive mode of operation.
    I understand that the Governor and the Secretary of the 
Interior met yesterday and released a statement and will extend 
a comment period for a month while emphasizing the importance 
of selecting a preferred alternative. I understand it will, 
actually, be only a draft preferred alternative which means 
that it will spillover into next year, into the lapse of the 
new State administration. And I presume that means that it will 
drag on for much, if not most, of next year.
    I look forward to hearing from the witnesses and will 
recognize at this time the gentleman from California, Mr. 
Miller, for his statement.

 STATEMENT OF HON. GEORGE MILLER, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Miller. Thank you, Mr. Chairman, and thank you for 
convening this hearing. And I appreciate an opportunity to 
speak today and I welcome the witnesses and others involved in 
the CALFED process to the hearing. And certainly, in advance of 
their testimony and others who will not testify, I want to 
thank all of them for the monumental effort they have put into 
this effort.
    Obviously, this is a critical issue for every Californian. 
The most important resource to the future of our State is 
water, and the recommendations, and policies enunciated by 
CALFED will likely frame how we think about and how we use 
water in California for a generation or more. For all too long, 
California and the west, in general, has asked only whether a 
water development project could be built. Little regard was 
given to the financing of the project which, generally, was 
paid through enormous public subsidies. Even less concern was 
paid to the environmental consequences of the water diversion, 
massive development, and widespread irrigation that flowed from 
the water-policy decisions.
    Over the pass 15 years, Congress has enacted important 
reforms to water policy affecting California including the 
Reclamation Reform Act, the Coordinated Operating Agreements 
Act, and in 1992, the Central Valley Project Improvement Act. 
These laws directly address issues that are the official 
priorities of the CALFED process, environmental restoration, 
promoting voluntary transfers, reduction of subsidies and other 
incentives to an efficient use, and promoting the integration 
of project operations to serve mutual goals.
    Implementation of many of these components of laws has been 
obstructed for years by those who oppose water management, 
contracting flexibility, and subsidy reduction. There is, 
however, a growing and justified concern in California that 
CALFED is perilously close to repeating many of the mistakes of 
the past. Particularly, the top-heavy reliance and costly and 
controversial water project construction. CALFED's common 
program elements do not receive adequate consideration in the 
EIS and her proposed alternatives to maximize the market-
oriented approaches to promote the most efficient use of water. 
Transfer conservation, waste water reuse, progressive pricing 
and groundwater management must be more aggressively 
implemented. With CVPIA and other statutes, we have learned 
that the implementing reforms on a timely basis is far more 
complicated than pouring concrete.
    CALFED must maximize water conservation, improve 
management, voluntary transfers to the maximum extent possible, 
and if costly new construction projects are necessary, then let 
us be assured that this time those who desire the projects are 
also the ones bearing the costs of paying for them. Let us 
remember that a good part of the goal of CALFED is to save the 
Bay-Delta Ecosystem which is in the state of collapse because 
of the decades of massive pumping and withdrawals by State and 
Federal projects.
    A CALFED plan that is, primarily, designed to provide even 
greater withdrawals to fuel the tremendous population growth in 
other arid regions of the State strikes me, and I have no 
doubt, most residents of Northern California is simply being 
unacceptable. More of the responsibility for managing and 
conserving water and the naturally arid portions of the State 
will have to come from residents in those areas rather than 
making more and more costly demands on taxpayers and residents 
in the northern areas of Oregon, which in themselves are 
growing and in need of secure water resources. The CALFED 
process is historic and all of California should be grateful to 
the extensive and difficult work already completed by the 
participants.
    I am confident that public comments and the draft DEIS will 
help the CALFED participants to develop a new set of 
alternatives that address the full range of efficient water 
management resources. Let's make sure that before anyone 
obligates Californians to decade of debt, we have implemented, 
and not just promised, the operational managerial efficiencies 
that we know are possible with modern-water policy.
    Thank you, Mr. Chairman.
    Mr. Doolittle. Thank you.
    The opening statements of other members will be included in 
the hearing record, without objection, and I do have, 
specifically, one from Mr. Herger, who is not a member of this 
Committee, but who has an opening statement, and that will be 
included in the record as well unless there be objection. 
Hearing none, that's so ordered.
    [The prepared statement of Mr. Herger follows:]

 Statement of Hon. Wally Herger, a Representative in Congress from the 
                          State of California

    Mr. Chairman, members of the Subcommittee, I appreciate the 
opportunity to testify about CALFED and its impact on water 
within the state of California.
    According to projections by the Department of Water 
Resources, California can expect a population increase by the 
year 2020 equal to the populations of Arizona, Nevada, Oregon, 
Idaho, Wyoming, Colorado and Utah. As a result, California 
could experience a water deficit of at least 1.6 million acre 
feet during average water years, with the water shortfall 
possibly mushrooming to 7 million acre feet during drought 
years. To put this in perspective, Shasta Lake, one of the 
biggest reservoirs in northern California, holds only 4.6 
million acre feet.
    The CALFED Bay-Delta Program was created to addresss 
conflicts over water useage in California's Bay-Delta region. 
There is no question that this goal is essential and necessary 
to the future of California. However, a CALFED spokesman 
recently stated that CALFED was, quote, ``Tasked to fix the 
bottleneck in the Delta, not solve California's water 
deficit.'' end quote. While this may be technically true, such 
a narrow view is dangerously self-defeating. In reality, the 
problem is that the Delta does not have enough water. You 
cannot fix the Delta or preserve its unique environment without 
more water.
    Currently, California is home to approximately 33 million 
people and sustains the world's richest and most diverse 
agricultural industry. The state is also home to diverse 
populations of wildlife and native plants. None of this would 
be possible, however, if it were not for our ability to store 
water for use in the arid summer months. Of the past twelve 
years, seven have been droughts and the state suffered serious 
water shortages.
    California does not have unlimited options for producing 
new water resources. CALFED, however, focuses on proposals by 
extremists within the environmental community who suggest we 
take water away from existing uses through additional water 
conservation efforts. Again, water experts at the California 
Department of Water Resources have noted we are quickly 
reaching the limits of water conservation strategies and that 
we will soon be hard pressed to satisfy the needs of the 
state's growing population. Another proposal to increase the 
water supply is to sink deep wells and increase the water drawn 
from the underground aquifer. As a third generation rancher who 
grew up in northern California, I can say this is one of the 
most extreme and impractical proposals I have ever heard. There 
was a time when we relied principally on groundwater to meet 
our water needs, but when the aquifer began to dry up and we 
sank our wells deeper and deeper, we were forced to install 
above-ground reservoirs to ensure we had enough water for 
summer use. We still rely on groundwater, but can only do so by 
supplementing with additional surface water. It would be 
fruital to return to past practices and further deplete our 
limited aquifer.
    Clearly, the best solution for the Delta, and for 
California, is to place greater emphasis on upper watershed 
maintenance, and on off-stream water storage. In the past month 
CALFED has increased its commitment to improving the health of 
the upper watershed, and I commend CALFED for this action, 
however, none of the three potential alternatives included in 
CALFED's massive, 3,500 page draft environmental impact 
statement explicitly plans more water storage. Water storage is 
talked about in general terms, but you will look in vain for a 
map that points out where new dams and reservoirs will be 
built. What you will find, however, is a map that shows a 
peripheral canal. Not a structure to hold more water for usage, 
but an isolated channel designed to move northern California 
water south. Something is terribly wrong with this picture. 
This situation must be corrected and water storage, not the 
peripheral canal, should take precedence as the key element to 
fixing the Bay Delta.
    In closing Mr. Chairman, until CALFED gives increased water 
supply the serious attention it deserves, I fear that any of 
the three current alternatives is destined to fail.

    [The prepared statement of Mr. Radanovich follows:]

 Statement of Hon. George P. Radanovich, a Representative in Congress 
                      from the State of California

    Thank you, Mr. Chairman, for the opportunity to convey my 
comments on CALFED today. The CALFED agreement, which comprises 
a unique multi-agency partnership that addresses ecological and 
water supply problems simultaneously, is of significant value 
to the state of California.
    I, along with many members of the California congressional 
delegation, have worked diligently to secure Federal funding 
for this project. Bay-Delta was funded at $85 million in fiscal 
year 1998, and I fully support the fiscal year 1999 budget 
request of $143 million.
    As a farmer in the Central Valley, and a representative of 
the two largest agricultural producing counties in the nation, 
I am extremely concerned with any action that CALFED takes with 
respect to the agriculture community. It is essential for our 
state to implement a CALFED package that includes a balanced 
approach, which meets water supply needs, water quality 
objectives, and ecosystem restoration in the Delta. As it has 
always been intended, CALFED must address the importance of a 
reliable water supply to sustain the agricultural economy in 
our region. Water-use efficiencies must be applied to all 
stockholders--agricultural, environmental and urban. Additional 
conveyance and storage facilities are key elements to the 
program and must be included in any final package.
    As alternatives are discussed, the protection of private 
property is also a high priority of mine. Private property 
rights must be secured throughout the process. Furthermore, 
CALFED representatives or other Federal and state bureaucrats 
must obtain written permission from landowners when conducting 
surveys or other biological work on private property. Any 
actions that violate landowners' rights are unacceptable.
    Consideration of the socioeconomic impacts of each of the 
alternatives is also necessary during this process. Taking 
agricultural land out of production will not solve California's 
water problems. Agriculture is a nearly $25 billion industry in 
California. The livelihoods of farmers and others in local 
communities who are dependent upon the production of farmland 
would be devastated in exchange for the minimal gains in 
environmental protection that this unwise course of action 
would accomplish.
    While I am still evaluating my position on the various 
alternatives presented in the CALFED Bay-Delta Programmatic 
EIS/EIR, any final solution that is adopted must be equipped to 
handle the necessary improvements in the operation of the CVP 
and the State Water Project for the long-term environmental, 
water quality, water-use efficiency and flood protection needs 
for the future of the State of California.
    Furthermore any final solution should include the 
utilization of an open-channel isolated facility. Such a 
facility would provide the greatest flexibility in terms of 
future Delta operations, without abandoning the ``common pool'' 
concept of providing benefits to municipal and industrial and 
agricultural users alike.
    Also, CALFED decisions must be implemented in a timely 
manner. Certainly, concerns must be addressed, however, this is 
not an excuse for delays. I urge all stakeholders and 
government officials involved to forge ahead this year to 
accomplish the essential tasks necessary to complete the CALFED 
process.
    California's water needs are best met by maximizing an 
``adaptive management'' strategy for ecosystem restoration and 
water quality and efficiency improvements. Adaptive management 
means having the ability to quickly and easily take water to 
and from different places in the Delta, at different times, 
using various amounts. The final solution must allow for this 
type of ``need based'' management of the resource, improve 
conveyance capabilities, and provide for the most effective 
water storage opportunities.
    In summary, the solution to California's water needs must 
include providing a reliable water supply and a healthy 
environment at the same time. Some in the environmental 
community think that CALFED is only about improving the 
environmental condition of the Delta and not addressing the 
issue of supply. That is simply not true. One cannot--and must 
not--be achieved without the other.
    I appreciate your time Mr. Chairman, and I look forward to 
continuing the work of providing long-term solutions to 
California's water needs, through the CALFED process.

    Mr. Doolittle. Today's hearing has a different format, 
somewhat, from the other hearings that we've conducted. We did 
this trying to look for, perhaps, a more useful format and one 
that would lend itself, particularly, to the nature of this 
hearing. The hearing today is organized into four panels with 
each panel addressing one program component of CALFED. Each 
panelist prior to the hearing was asked to address a specific 
question regarding CALFED, and we will ask the entire panel to 
give their statements, as we normally do, and then members will 
alternate questioning these witnesses. I'd like to ask the 
first panel of witnesses, if you'd pleased come forward and 
remain standing. Take the oath, and then we'll begin.
    Mr. Berlin, you are just going to remain where you are, 
but----
    [Witnesses sworn.]
    Mr. Doolittle. Thank you. Let the record reflect each 
answered in the affirmative. We are very happy to have you hear 
today.
    The first panel will address the following question: how 
are we going to use the CALFED process to meet the future 
California urban, rural, agriculture, and environmental water 
needs, and has the CALFED process prejudged or eliminated some 
water planning options, such as on-stream storage, water reuse, 
water transfers, et cetera?
    I think you're all familiar with those three lights there, 
but, basically, we urge you to try and keep within the 5 
minutes. At the beginning of the fifth minute, the yellow light 
will go on, and you don't have to stop in mid-sentence, but 
it's a guide when the red light comes.
    Our first witness today will be Mr. Tom Berliner from the 
City's Attorney's Office, city of San Francisco. Mr. Berliner 
you are recognized for your testimony.

STATEMENT OF TOM BERLINER, CITY ATTORNEY OFFICE, SAN FRANCISCO, 
                           CALIFORNIA

    Mr. Berliner. Good afternoon, Mr. Chairman and members of 
the Subcommittee. My name is Thomas M. Berliner. I'm general 
counsel for the San Francisco Public Utilities Commission. 
Thank you for providing me with the opportunity to appear 
before you to submit this statement concerning the water 
supplies benefits which are expected from the CALFED Bay-Delta 
Program.
    The San Francisco Public Utilities Commission is a retail 
and wholesale water supplier. We provide water to approximately 
2.4 million residents of the Bay Area in a service area which 
extends from San Francisco through the South Bay and Silicon 
Valley and up the eastern side of San Francisco Bay to the city 
of Hayward. Service areas which abut ours include the East Bay 
Municipal Utility District and the Santa Clara Valley Water 
District, with whom we share various customers in the Silicon 
Valley.
    I'm here today representing the Bay-Delta Urban Coalition, 
which is an unincorporated association of major urban 
California water agencies. The Coalition has been extremely 
active in the CALFED process, and San Francisco has been an 
active member of that effort as well.
    The Urban Coalition has put a great deal into the success 
of the CALFED process. Individually and collectively, we have 
been working for many years to achieve a long-term solution to 
the Bay-Delta problems. In our view, CALFED provides the best 
opportunity we have seen to achieve this long sought after 
success. Furthermore, the failure of CALFED leads us to an 
unacceptable return to the insecurity of years past.
    I would now like to respond to the questions you posed to 
this panel. As to how we are going to use the CALFED process to 
meet the future water needs of urban, rural, agricultural, and 
environmental California, four basic elements drive the CALFED 
process: water supply, water quality, ecosystem restoration; 
and system integrity. The latter focused mainly on levee 
stability.
    From the Urban Coalition's perspective, improved 
reliability of water supply is essential to the maintenance of 
our economy. This reliability will be achieved by improving 
water quality and quantity, as well as restoring the ecosystem 
so as to reduce the conflicts between supply and environmental 
needs. As to water supply, CALFED will provide us with the 
greatest assistance in terms of improving water quality.
    Urban water purveyors have made a strong commitment toward 
meeting their demands through a variety of sources. We are in 
the era of integrated resource planning efforts. Every major 
urban water supplier has invested substantial resources in 
these integrated resources plans. Components of this plan 
include improvements to water quality, conservation, 
reclamation, better use of local storage, including conjunctive 
use, and water transfers. Improved water quality is necessary 
if we are to achieve the potential of increased use of 
reclaimed water. Further, better quality water from the Delta 
will better enable water supply agencies to fully utilize lower 
quality water from the Colorado River or local sources.
    Finally, improvement of the water transfer market is a 
major component of the CALFED Program. By improving Delta water 
quality, and access to transfers, urban supplies can be made 
substantially more reliable.
    As to coordination with other California water planning 
activities, the urban water suppliers have been planning for 
their future for several years. As I stated previously, through 
integrated resource plans, urban agencies are seeking to 
balance their sources of supply. CALFED provides us with, yet, 
another opportunity to further augment these supplies. In 
addition to improving supply by virtue of improved water 
quality and increased yield, CALFED will also promote improved 
water management for the environment. For example, we are 
actively engaged in the effort to develop a sound Ecosystem 
Restoration Program Plan. An important component of the ERPP is 
adaptive management of fishery requirements. By improving the 
efficiency of water management for the environment, it will, 
hopefully, be less necessary to use water that otherwise could 
be used to meet consumptive needs.
    Water agencies will continue with their own local planning 
efforts, and not rely exclusively on the CALFED process to meet 
their long-term needs. CALFED was not designed to meet 
everybody's needs, and it should not be regarded as the answer 
to all water-supply problems.
    By coordinating local water supply efforts with the 
improvements expected to result from the CALFED process, we can 
decrease the tension between consumptive and in-stream storage 
uses of water. By reducing this tension, each sector will be 
freer to pursue those activities which are essential to its 
long-term security. The Urban Coalition is firmly committed to 
working with all interests to insure long-term supply 
reliability.
    As to whether CALFED has prejudged or eliminated some water 
planning options, in our view, the CALFED process has been a 
remarkably inclusive. CALFED has been open to suggestions of 
alternatives for meeting water supply, environmental and 
infrastructure needs. CALFED has reviewed over 100 options and 
narrowed them down to the most preferred elements. It is 
considered the role of the water conservation, water transfers, 
reclamation, and potential infrastructure changes including 
over 40 reservoirs sites and twelve ways to move water around 
the State. Each idea has received a fair share of comment and 
scrutiny. In the end, many ideas had to be eliminated and of 
the three alternatives which remained, ultimately, only one 
will survive. It may be that the one alternative chosen will 
comprise a combination of the others, but in the end, we can 
have only a single vision for the long-term solution to the 
Bay-Delta.
    I conclude my remarks here. Thank you.
    [The prepared statement of Tom Berliner may be found at end 
of hearing.]
    Mr. Doolittle. Thank you.
    Our next witness will be Mr. Bill Pauli, president of the 
California Farm Bureau Federation. Welcome, Mr. Pauli.

  STATEMENT OF BILL PAULI, CALIFORNIA FARM BUREAU FEDERATION, 
                     SACRAMENTO, CALIFORNIA

    Mr. Pauli. Thank you, Mr. Chairman, and Members of the 
Committee.
    On behalf of the California Farm Bureau and our 75,000 
members, I'm pleased to have the opportunity to appear before 
you. I'm a farmer over in Mendocino County and grow wine grapes 
and Bartlett pears.
    We are committed to seeking solutions which will insure a 
reliable, affordable water supply for all of California. 
California population is projected to grow by 17 million people 
by the year 2020, and without prudent planning, our current 
water deficiencies will surely grow.
    California farms provide key supplies of food and fiber, 
$25 billion in revenue, $12 billion in exports, and important 
jobs, and coveted, open space throughout our great State. The 
CALFED process provides an unprecedented opportunity to craft a 
plan to meet our State's water needs for the next 30 years. I 
can't stress that enough. It's to look ahead for the future and 
the future growth of our State, and to plan for that. 
Unfortunately, the CALFED plan to date falls short of this 
goal. Current CALFED effort is based on redirecting 
agriculture's two most vital resources, land and water, to 
satisfy other uses rather than developing reliable, and 
affordable water supply.
    Nonetheless, we are optimistic the CALFED process can 
succeed. There's three critical issues for agriculture: 
increasing water storage; minimizing fallowing; and 
strengthening our water rights.
    Current total use of water in California is broken down 
into about 46 percent for the environment, 42 percent for 
agriculture, and 11 percent for urban usage. And additionally, 
millions of acre feet of water flows out to the ocean which is 
available for good uses year in and year out. Instead of 
redirecting water from productive agricultural and urban uses, 
we should concentrate on fully utilizing the water that now 
flows to the ocean. By conserving overflows, we can increase 
flood protection while saving water for dry years. We need to 
increase the capacity of existing reservoirs, such as Lake 
Shasta, Millerton, Los Vaqueros and, potentially, others as 
well so that that water can be used for agriculture, for 
urbanites, for our cities, and yes, for the ecosystem.
    CALFED proposes to fallow 250,000 acres of prime 
agricultural land which holds senior water rights. Overall, 
fallowing could approach 1 million acres. California 
agricultural land has significant, global impact. As a matter 
of good public and social policy, this land should not be 
converted and we strongly oppose such efforts. We recognize new 
conveyance system or reservoirs will require the retirement of 
some acreage, and in those cases the landowners should be 
compensated. And we clearly recognize the same land will be 
removed, but the fallowing of agricultural lands for levee 
setbacks, shallow water habitats and other environmental 
purposes should not be part of the CALFED process. The combined 
total, according to the EIR/EIS, could range from 396,000 acres 
and 914,000 acres removed. Protection of agriculture water 
rights is a key to the ultimate success of CALFED.
    Farmers and ranchers depend on established water rights to 
maintain their livelihood. CALFED must assure surface and 
groundwater rights. Areas of origin must be protected and 
strengthened. Impact in those areas could be monumental. CALFED 
should abandon the notion that groundwater can be used in areas 
feeding the Delta as a future source of water for urban and 
environmental uses under the guise of conjunctive use.
    We cannot support the continued investment of public money 
as long as farmers bear a disproportionate share of the burden 
in reaching the Delta solution. Farm Bureau supported 
Proposition 204 and previous Federal appropriations as a down 
payment to secure major improvements in the Delta water 
management. Unfortunately, both have been used to fallow 
agricultural land and set the stage to redirect agricultural 
water.
    We continue to support the need for a long-term Delta plan, 
but we are losing confidence that the solution will contain 
meaningful steps, primarily, water storage. Fallowing will 
seriously hurt California agriculture and the surrounding 
communities. I cannot stress the amount of impact that it will 
have in those local communities if that land is fallowed. We 
tend to forget about the people in the tire shops, the cafes, 
the newsstands, newspapers. We cannot underestimate the impact 
on those people. Therefore, it is impossible for us to support 
continued Federal funding until we see marked improvement in 
the proposal.
    We are discouraged, but we want to remain optimistic that 
CALFED will turn the corner and work toward meeting the State's 
long-term needs for the next 30 years, and we are confident 
that that can occur. The main concern for us at this point is 
the devil in the details which we do not understand and have 
not been able to get clear through.
    Thank you, Mr. Chairman, and members of the Committee.
    [The prepared statement of Mr. Pauli may be found at end of 
hearing.]
    Mr. Doolittle. Thank you.
    The next witness will be Ms. Martha Davis, Board Member of 
the Mono Lake Committee Sierra Nevada Alliance. Ms. Davis, 
you're recognized.

 STATEMENT OF MARTHA DAVIS, BOARD MEMBER, MONO LAKE COMMITTEE 
                     SIERRA NEVADA ALLIANCE

    Ms. Davis. Thank you very much. Good afternoon Chairman 
Doolittle, and Members of the Subcommittee. Thank you for the 
invitation to speak before you today.
    My name is Martha Davis. I am speaking today on behalf of 
the Sierra Nevada Alliance and the Mono Lake Committee. Both of 
these citizen's groups work on water-policy issues in 
California. The primary focus of the Sierra Nevada Alliance in 
on watershed restoration in mountain counties. While the Mono 
Lake Committee works to promote conservation, recycling, and 
why-is-water-use programs in Southern California, I also serve 
as a member of the CALFED Bay-Delta Advisory Council, and on 
the CALFED Ecosystem Restoration Roundtable.
    In summarizing my testimony this afternoon, I want to make 
sure that I address the two questions posed by the 
Subcommittee. The first question is how are going to use the 
CALFED process to meet future-California urban, rural, 
agricultural, and environmental water needs?
    CALFED is addressing the State's future water needs in the 
context of fixing the San Francisco Bay-Delta. While it's not 
CALFED's goal to resolve all water issues in California, the 
water-use policy CALFED, ultimately, proposes to include in the 
final preferred alternative, especially the programs for 
increased conservation and water-recycling, will have a 
profound impact on how much water is available in the future to 
share between urban, rural, agricultural, and environmental 
water needs.
    The recent developments of conservation and water-recycling 
programs in Southern California has already made a tremendous 
contribution to meeting the State's current environmental, 
rural, and agricultural water needs. Let me give you two 
examples, the city of Los Angeles. As a primary result of 
conservation programs implemented since 1990 in Los Angeles, 
the city is currently using the same amount of water as it did 
in the mid-1970's only now we are serving almost 1 million more 
people. The success of these programs have made it possible for 
the city of Los Angeles to protect Mono Lake, a vital resource 
to the rural community of Mono County, without taking water 
away from Northern California or the Colorado River. And that 
is a clear benefit to the rest of the State. Further, the city 
of Los Angeles believes that it can meet all of its future 
water needs even with all the growth projected for the region 
through additional conservation and recycling projects.
    Second success story, the Metropolitan Water District of 
Southern California. At the peak of the drought of the calendar 
year 1990, MWD sold 2.6 million acre feet in imported water 
supplies. Since then, Metropolitan Water District has developed 
its Integrated Resources Plan, refocused its efforts on 
developing a more balanced mixture of local and imported water 
supplies, and helped the region to start to aggressively 
implement conservation, recycling, and groundwater management 
projects. The result, MWD has reduced its imported water sales 
down to about 1.8 million acre feet. Although this year has 
been wet, and I think they may go lower. Possibly as low as 1.6 
million acre feet. This dramatic reduction in MWD imported 
water needs means there's more water available to meet the 
State's other environmental, urban, rural, and agricultural 
needs.
    How much of a difference can future water-conservation and 
recycling make to meeting the State's needs? Let me answer with 
a question. How many in people in 1990 would have predicted the 
overwhelming success of conservation programs in Southern 
California. These programs have fundamentally reshaped our 
water demand, and there is still much more that we can, and 
should, be doing in Southern California. And what's been done 
in Southern California can be done elsewhere.
    The second question posed by the Subcommittee is whether 
the CALFED process has prejudged or eliminated some water-
planning options from the discussion? The answer is no. I don't 
think so. CALFED is not yet completed its planning process nor 
yet made a decision on the preferred alternative. Addressing 
the Bay-Delta problem is a huge, if not heroic, undertaking and 
the work of CALFED is far from finished. But I do, briefly, 
want to raise concerns I have been hearing about some of the 
information CALFED is relying upon in its evaluation of the 
water-planning options. These are the assumptions used in the 
California Water Plan, known as Bulletin 160. Bluntly, the 
concern is that this document has greatly overstated the future 
urban-demand projections and, substantially, understated the 
potential for conservation and opportunities to recycle water. 
In other words, it's been making the problem with meeting the 
State's future needs a bigger problem than, perhaps, it needs 
to be.
    I reviewed Bulletin 160 with an eye toward Southern 
California, and I agree that the document raises some troubling 
issues. For example, why does Bulletin 160 assert that water 
demand in 1995 for the South Coast Region was in the vicinity 
of 4.3 million acre feet when the actual demand was in the 
vicinity of 3.5 million acre feet? The 800,000 acre-foot 
difference is more than the entire water needs of city of Los 
Angeles.
    Why does Bulletin 160 identify over 1 million acre feet and 
potential conservation and water recycling projects for the 
South Coast Region for 2020 that only count approximately 
300,000 acre feet of this water in the final water projection? 
And how is this information incorporated into the CALFED 
environmental analysis? I mean, perfectly honest, I find it 
troubling when I see charts that show a potential shortage of 6 
million acre feet for the year 1995, which was a year that we 
had ample water supplies. And I understand the need to 
normalize the data, but my question is what is the data that 
those projections have been based upon.
    I don't yet have the answers, but I am confident that we 
will find them in the context of the CALFED process.
    I'll end my testimony there. Thank you.
    [The prepared statement of Martha Davis may be found at end 
of hearing.]
    Mr. Doolittle. Thank you.
    Our next witness is Mr. Stephen Hall with the Association 
of California Water Agencies. Mr. Hall.

  STATEMENT OF STEPHEN HALL, ASSOCIATION OF CALIFORNIA WATER 
                AGENCIES, SACRAMENTO, CALIFORNIA

    Mr. Hall. Thank you, Mr. Chairman, and members. It's a 
pleasure to be here. Thanks for inviting us.
    The Association represents agricultural and urban water 
agencies around this State that collectively deliver somewhere 
between 90 percent and 95 percent of the delivered water in 
this State. We're the folks who, actually, deliver it to the 
users, the homes, farms, and businesses. As you said in your 
opening statement, Mr. Chairman, we're here to discuss the 
State's water needs and what role CALFED will, and should, play 
in meeting those needs, and in our minds, the two are 
inextricably linked.
    We need additional water in a growing State. A State that's 
going to continue to grow by all projections. And CALFED, in 
our view, is the best way to provide for the water for that 
growing State.
    There's a fair amount of debate still going on. You heard 
Martha Davis' testimony just now. There was perspective that 
says the water demands are overstated and the opportunities for 
the so-called ``soft-path methods'' are understated. I think 
that debate will continue, but one thing is clear and that is 
that no single option is going to get us where we need to go 
with respect to water supply for the State. We're not going to 
get it by simply building additional reservoirs, but we're also 
not going to get it through more conservation. I think it's 
going to take a mix, and that's why we're supporting CALFED 
because CALFED provides the sort of mix that we think we're 
going to need.
    At our present rate of growth, the most recent estimate are 
we're going to be somewhere 3 million and 7 million acre-feet 
short in the year 2020. Sounds a long way off. It's the 
planning horizon. By the time you plan it and build it, 
whatever it is, whether it's a new reclamation plant or new 
reservoir, you are going to need the water that you started 
planning now.
    There is some question about the estimates that are being 
proposed by Department of Water Resources Bulletin 160, but 
frankly, there's no more credible study available. And although 
there remains debate about how much can be developed through 
conservation versus additional development, those are all 
within a reasonable range and if you look at any of them, it 
clearly shows that no matter whether you take the low end or 
the high end of the range of estimates, you're still going to 
need that mix.
    Everybody understands in California who studied water that 
in decades past we met our needs through building additional 
reservoirs. In the last three decades, the 1970's, 1980's, and 
1990's we've met our needs through, what the environmental 
community calls, the ``soft path,'' conservation, reclamation, 
land conversion. We've got a remarkable record in that. In the 
urban setting in Southern California alone they've spent over 
$160 million, conserved nearly a million acre feet of water, 
enough to meet the needs of the city of Los Angeles, as Martha 
pointed out. In fact, I was glad she made my point for me. 
We've done quite a bit in the urban setting.
    In the agricultural setting, the record in some ways is 
even more impressive. Water use in the agricultural setting 
through land conversion and conservation has been reduced by 4 
million acre feet since 1980. Production in the meantime is 
increased by 50 percent. Projections are that agricultural-use 
will go down another 2 million acre feet over the next twenty, 
twenty-five years. And agricultural has invested over $2 
billion--$2 billion with a b, in drip systems alone.
    Urban and agricultural-water users have gone a long way in 
conserving. It's something we should have done and we're glad 
we did, but clearly, conservation alone is not the answer. It 
won't fix the system in the Delta which is badly broken. Today, 
we have conflicts between protecting fish and delivery water. 
It cannot be fixed with the existing system. We have drinking 
water quality problems that can't be fix with the existing 
system, and we're badly in need of additional flood control in 
this State. That's why we believe as a part of whatever 
develops, CALFED has to deliver more water for the State. We're 
glad that CALFED now has up to 6 million acre feet of 
additional storage in its plan, and we're going to stay engaged 
and supportive of CALFED and see that as a final plan it 
contains a significant amount of additional storage.
    We will also, though, continue to support the so-called 
``soft-path methods.'' CALFED has as much as 4 acre feet of 
water through conservation for every 1 acre feet of additional 
yield in its projections. What that agricultural final mix 
looks like in terms of how much conservation and how much water 
supply is what CALFED will sort out over the next several 
months and, I think, everyone of the stakeholders here at this 
table, and in this room will stay engaged to try to help them 
get to that right mix. But the bottom line for all us--the 
thing that I think we all agree on though we disagree on some 
of the facts, is that CALFED is the best opportunity that we've 
had in a generation to solve the problems, reduce the 
conflicts, and meet our present and future water needs in this 
State.
    CALFED must succeed and the Water Community is committed to 
staying engaged to make sure that it does.
    Thank you.
    [The prepared statement of Mr. Hall may be found at end of 
hearing.]
    Mr. Doolittle. Thank you.
    For the benefit of the members, we'll probably will do a 
couple of rounds or so of questions here.
    Mr. Pauli, are your members of the Farm Bureau, actually, 
actively opposing the funding in this year for CALFED?
    Mr. Pauli. No. Our concern is that if we don't make 
progress in terms of the issue related to fallowing and make or 
have assurances related to additional storage, that it simply 
does not make sense to continue to fund the process because the 
process needs to include those two to be viable, and that's 
what we're saying. Not to cut funding, but in order to continue 
funding, it needs to be a well-rounded and complete program or 
we would not favor continuing the funding this next year.
    Mr. Doolittle. Are you expecting some assurances to be 
given at some point before final action is taken this year or 
are you waiting to see what happens next year in order to make 
that conclusion?
    Mr. Pauli. Well, hopefully, as we go forward with the 
discussions during the summer and fall we'll receive some 
adequate assurance and, there again, that part is quantified, 
but adequate assurances that those two issues will be addressed 
in a way in which we can continue to proceed with the process 
because we all recognize how important the overall outcome of 
the process is.
    Mr. Doolittle. It's my understanding we presently have, not 
in this year, but on the average we presently have in an 
average water year a water shortage right now. Is that--anybody 
disagree with that?
    Ms. Davis. I'm sorry. Do we have a shortage this year?
    Mr. Doolittle. Not this year, but that in an average year, 
we have a deficit already at least as I understand the 
California Department of Water Resources analysis of this. 
Apparently, they estimate that there's about a 1.6 million 
acre-foot shortage for an average water year.
    Mr. Hall. I will say that we cannot reliably meet the needs 
of all areas of this State in an average water year today, and 
that there is groundwater overdraft which is, in part, 
indicative of water shortages.
    Mr. Doolittle. OK. I think we're probably get to the 
quantification in one of the other panels, but--I mean, if no 
one--does anyone dispute the assertion that we are short on the 
average right now?
    Ms. Davis. I don't know how to answer the question because 
when I read Bulletin 160 and I try to put all the pieces 
together and understand how they put together their numbers, I 
don't know they got to the outcome they got to. I think that 
part of the point of the testimony I wanted to make today was 
the need for a good, quality answer to that question. What are 
the water needs of the State currently? How do we define for 
urban, for agriculture, for the environment the water needs so 
that we track through those numbers and then take a what the 
supplies look, and take a hard look at the match and whether 
there's a mismatch. I do believe there is a perception that 
there is a tremendous mismatch between supply and demand, but I 
don't think we've got the document that gives us the answer to 
the question.
    Mr. Doolittle. Well, we'll ask Mr. Potter when he comes on 
Panel Number 2.
    Mr. Hall. Mr. Chairman, may I just make one additional 
comment on that.
    Mr. Doolittle. Yes.
    Mr. Hall. Regardless of what any report says, when you have 
declining water tables and when you have water users who are 
chronically receiving 50, 60, 70 percent of what they've 
contracted for and are paying for, that to me strongly 
indicates the shortage. And that's in normal and above normal 
years.
    Mr. Doolittle. Well, that would, certainly, be an indicator 
of that to me as well, and I presume, CALFED believes there's a 
shortage or they wouldn't be proposing to fallow these hundreds 
of thousands of acres of prime agricultural land which, I 
think, is a real concern.
    I am interested in seeing our water supplies increase, and 
Ms. Davis testified she didn't think any of the options had 
been foreclosed which I guess means that even on-stream storage 
isn't foreclosed under CALFED. Is that--anybody here disagree? 
Do you believe it has been foreclosed by CALFED?
    OK. No disagreements so far. You all, or some of you 
alluded to it, but I wonder the discussion of the soft-path 
land is to increase conservation, and the conservation of the 
city of L.A. is remarkable. I think it shows what we can do 
with improving technology and understanding of our water 
systems.
    But it seems to me that it might be dangerous to rely upon 
conservation as the main solution to our water problems because 
I look upon that as kind of being the emergency solution, when 
we run out of water or have a crisis facing us. It seems like 
we're giving up our response capacity if we use conservation to 
be the main source for additional water development. I mean, 
obviously, where we can conserve without impacting 
significantly our lifestyles, that's one thing, and that 
apparently has gone on in the city of Los Angeles, and in other 
areas, and that's very encouraging.
    But there's always the option to impact our lifestyles, 
when necessary, in the event of a major drought or something. I 
would like to see our policy increase the amount of water 
available so that we don't have to--so that we no longer have 
the ability to respond in an emergency without experiencing 
grave, negative consequences.
    Did anybody want to comment on that?
    Mr. Pauli. Mr. Chairman, I think we need to focus to the 
future. You know, we've made tremendous strides in agriculture, 
tremendous strides in urban use, in terms of conservation, and 
being much more efficient with the water we have available. And 
yet, as we look forward over the next 20 to 30 years, I think 
Mr. Hall said, as you look forward, what are we going to do 
with the growth with the next 15 or 20 million people?
    We agree already that there is a shortage, the magnitude of 
which maybe we can't quantify, but clearly, a shortage. What 
are we going to do for the next 15, or 20, or 30 million people 
who come to our State? Can we provide water for all of their 
needs, including recreational environmental without additional 
surplus or additional supplies and storage? Can we continue to 
take all of the water that they're going to need from 
conservation? At some point, I think we can only conserve so 
much.
    Mr. Doolittle. Thank you. Mr. Miller is recognized for his 
questions.
    Mr. Miller. Thank you, Mr. Chairman, and thank you to all 
of you for your testimony. This panel alone probably has given 
us a week's worth of questions, but we'll see if we can get it 
done this afternoon.
    Well, let me just go to the point that's been raised here. 
Ms. Davis, in your testimony what you describe as 
discrepancies, or questions raised, I guess would be better, we 
don't know if they're discrepancies or not, but questions 
raised by Bulletin 160 of State Department Water Resources, I 
don't know how exhaustive your list is, at one point, the South 
Coast you refer to a number of times, but they're fairly 
substantial numbers. It looks to me like somewhere between 
conservation and overstatement of use. You're very close to 2 
million-acre feed of water. Is that correct?
    Ms. Davis. The first number that I refer to is for 1995, 
and the second was for the year 2020. So I was trying to cover 
both current and the future situation----
    Mr. Miller. OK, I see. I see.
    Ms. Davis. But, when you start, there are a very large 
number of comments that have been submitted to the State 
Department of Water Resources that raise similar questions, and 
a substantial amount water, both looking at 1995 and 2020.
    Mr. Miller. Well, my concern would be that if the fall to 
160 is as deeply integrated into the CALFED--others can respond 
to this later--as you suggest it is, if there are flaws there 
with respect to assumptions made about usage or about 
conservation or the future of usage and/or conservation, as you 
carry those into the CALFED process, it seems to me, we start a 
multiplier effect here, as we start extrapolating these things 
out to 2020, we hope that CALFED carries us more than a few 
years down the road.
    The impact on water decisions, the impact on taxpayers can 
be fairly dramatic. You can take a small area here and it can 
be rather large out there in the future.
    Ms. Davis. I agree. I think that everything that CALFED 
stands for is trying to get the best quality information pulled 
together so that we can make good decisions about California's 
water future. These questions need to be answered.
    Mr. Miller. You know, my concern is a couple of things. A 
little bit of this is deja vu. I sat in this hearing room for 
25 years, and I probably spent the first ten with people 
sitting at that table telling me that if we didn't build a 
thousand nuclear power plants, if we didn't bring on line X 
number of generations, year-after-year-after-year, this economy 
and this country wouldn't go. Later, we find out, that we 
should be growing economy and decrease your power consumption 
rather dramatically in this country, actually.
    And now, California taxpayers are looking at $28 billion in 
stranded costs, because a lot of decisions were made on bad 
underlying assumptions. It turned out just not to be the case. 
And here, we're looking at whether you generate a million-acre 
feet of water in conservation, non-structural ways are two 
million-acre feet, or whether you generate it behind a large 
structure is a big difference to the taxpayer--very substantial 
difference if you're going to ask for general obligation bonds.
    So, I don't know if you or Mr. Hall is quite correct here, 
about how you attribute this, but it seems to me that the test 
would be if this was the plan to build a motel, and you say, I 
believe my occupancy rate is 90 percent, loan me the money, but 
if the figures show that it's really 30 percent, you made a 
drastic mistake. And so the question is here, if we're going to 
go to the taxpayer at some point, because I think we're in 
agreement with what Mr. Doolittle said, that none of these 
options are off the table, and nobody believes they should be 
taken off at this point.
    But we've got to start in this common-period, and I guess 
in the next common-period that the Governor and the Secretary 
have agree to, we've got to harden this information. Because at 
some point, we're going to go to the market, or we're going to 
go to the taxpayers, at minimum, if we won't go to the market. 
It may not fly in the market, but with unfortunately, the 
taxpayers, it might.
    It's analogous to what goes on around here. We're arguing 
now over cuts, and spending, and tax-cuts. And what they're 
saying is they want to know you've made every effort to cut the 
spending, so they know what they have for tax-cuts, or before 
you raise taxes, you want to know that you've made every effort 
here.
    And so, a good chunk of the questions that the chairman's 
asked you and other panels to respond to, this discrepancy is 
absolutely vital. And we're going to go to the people for a big 
flood control bond. They're either going to double-back on 
water--they ought to know that we've rung every drop of water 
out of this system that we can at the lower cost if that's 
available. Otherwise, we're going to look like the utility 
industry. Well, we are the utility industry. We just haven't 
had our turn in the de-regulated atmosphere. But, we shouldn't 
repeat that history, or be within coming along and asking 
people in 2020 to keep coughing-up money for a bond issue, and 
the benefits have disappeared.
    That's my opening statement, Mr. Chairman.
    [Laughter.]
    Let me just say that I think this is absolutely 
fundamental. No matter how you think the end of this process 
comes out, if we cannot go to the public with hard figures, I 
think we're doing a real disservice to ourselves, in the 
interest of putting some stability into California's water 
system. But we're going to be doing a real disservice to the 
taxpayers who were going to be asked, apparently, under a 
couple of scenarios to foot most of the bill.
    Thank you, Mr. Chairman.
    Mr. Doolittle. Thank you. Mr. Pombo is recognized.
    Mr. Pombo. Thank you, Mr. Chairman.
    Ms. Davis, do you believe that water needs for the future 
of California can be met through conservation?
    Ms. Davis. I think the experience from Los Angeles is 
instructive. In 1990, when we were in the midst of litigation 
with the city over the protection of Mono Lake, the city 
insisted that it could not afford to share a single drop of 
water with Mono Lake. That the city's growth, water needs, and 
concerns about the growth of those water needs were so large, 
so monumental that it was not possible----
    Mr. Pombo. And we--they adopted low-flow toilets, shower 
heads, I mean, they did it--we did it throughout all of 
California. We did water rationing during the drought. We did a 
lot of different things. But the reality is they've done all of 
these things to this point. They've gone after the easy 
conservation, and I think that, that's true with all of 
California; it's true with agriculture. They've done everything 
they could, in terms of what they could realistically do at an 
economically viable place.
    Now, we're talking about adding 17 million--the projection-
17 million people, additional land, it is going to be 
irrigated, all of these different factors; will conservation 
alone do that?
    Ms. Davis. Well again, going back to the Mono Lake example, 
as a result of the conservation that has been done to-date, the 
city has saved more water than the entire amount of water that 
they divert from the Mono Lake ecosystem. And the way this city 
has been looking at conservation, they've linked it with 
solving every problem that the city is facing.
    We have had problems with sewage. We have had problems with 
antiquated infrastructure in Watts area, South Central Los 
Angeles, and by investing in conservation, we're investing in 
our community. It's a combination of solving problems and 
drought-proofing our economy. So what's happened is, we've 
learned that conservation is not just a short-term emergency 
response to a drought, although there's that component of 
conservation, what we've learned is that if we don't conserve, 
if we're not building in water recycling projects, we're making 
ourselves economically vulnerable during droughts.
    And so, what the city-council has said, their plan is to 
meet future growth through conservation water recycling 
projects.
    Mr. Pombo. So their forays up into the valley to buy 
farmland, and transfer the water from the farmland in the 
valley into southern California is not real? They're not really 
doing that?
    Ms. Davis. I'm not aware of LADWP with proposals to 
transfer water from the Central Valley.
    Mr. Pombo. Well, we'll go on.
    Mr. Hall, do you believe that conservation of our water in 
California will meet the future needs of California over the 
next 20 or 30 years?
    Mr. Hall. No, I don't. As I said in my statement, I think 
conservation of water, and frankly, of other precious resources 
is a strongly indebted ethic in California, and that's a good 
thing, and that we can make additional progress. But, as I said 
in my statement, we have made remarkable progress in the area 
of conservation, and the downside to that is, that it does 
harden demand. The demand that remains is less flexible. And 
when--because it's not if, it's when--we have our next drought 
we will have less capacity to conserve. I think that's a risk 
worth running, but only if we also put together a mix of 
additional water supply options.
    I think, we're at a point in California water, where the 
cost of water, both in dollars, and politically, is such that 
you cannot develop additional supplies, unless they make a lot 
of sense. I think we're at the point now, where we can go 
forward with a mix of additional conservation-reclamation if we 
include additional water supplies, and we can make it work now, 
and in the year 2020.
    Mr. Pombo. Do you believe that any water plan for the 
future of California that does not realistically look at the 
development of new surface water resources is being realistic?
    Mr. Hall. I frankly don't. I think there are other options 
that are easier to do, and perhaps, more affordable, 
conjunctive-ousting--my favorite example. But there are some 
things conjunctive-use can't do; flood control is one of them. 
You don't get much flood control benefit out of conjunctive-use 
as you do out of surface storage, whether it's on-stream or 
off.
    Mr. Pombo. Mr. Pauli, agriculture has done a lot in terms 
of conservation over the past several years. Do you believe 
that there is a huge amount that they could do in the future to 
save water?
    Mr. Pauli. Well, we'll currently continue to try to 
conserve water, and I think we can continue to make progress in 
a number of areas. But, we will reach a point at which we can 
no longer conserve additional water. Where that is, I'm not 
sure because we continue to have technology that does allow us 
to conserve water, but there will be a limit.
    The other thing that's clearly occurring as part of the 
conservation effort, we're converting from one type of cropland 
to another type of cropland as though we've gotten some 
benefits there. But where the limit is, I'm not sure.
    Mr. Pombo. Thank you, Mr. Chairman.
    Mr. Doolittle. Thank you. Mr. Dooley, you're recognized.
    Mr. Dooley. Thank you, Mr. Chairman, and I guess first-off, 
I'd like to express just a little bit of frustration because 
some of the opening statements, and including that of Mr. 
Miller in that, we appear to be finding ourselves lapsing into 
some of the old rhetoric, and some of the old battles that got 
us into a position where we weren't able to find solutions. I 
think I, myself, was looking at this cow-fed-process as a best 
opportunity for us to move forward in a collaborative fashion 
with all the stakeholders at the table, in order to try to find 
some solutions.
    And while I had took some exceptions to Mr. Miller's 
remarks, Mr. Pauli, I would say, as a farm bureau member, I 
also take some exception to the California Farm Bureau 
basically coming out, and saying that they're not going to 
support public funding if these two conditions aren't met. 
Because I think that disrupts the opportunity, or impedes the 
opportunity, I guess it is, for us really to try to move 
forward.
    We're not all going to get everything we want; it's clear. 
And, I hope that there will be a little bit of softening of 
some of the rhetoric here as we move forward. Because I think, 
in some of the testimony, where Mr. Doolittle asked all of you 
to testify on whether or not the CALFED-process was prejudging. 
I mean, we heard in so many opening statements that it appeared 
that we were already making statements, in terms of prejudging, 
in terms, that we are looking at favoring concrete solutions 
over recycling and others, where we are looking over taking 
greater withdrawals out of the Delta over the others, and I 
guess, when I look at the various alternatives that you have 
been offering, that we're still in a process, I have trouble 
seeing how any of us can say that we are now at the point where 
we're prejudging anything, because we haven't determined what 
the drought process is.
    I also express a little frustration over this Bulletin-160. 
I think it's appropriate for us to really ascertain the 
accuracy of this document. And, I think, that's a legitimate 
issue that I would hope that during the remainder, and the 
balance of the CALFED process, that we will continue to look 
at, and make our determinations of what the final draft 
proposals should be. But again, I think that we have to be 
careful that we are going to be trying to justify whatever our 
personal pre-judged position should be based on whether or not 
that is valid or not.
    I guess one of the other issues that I was most concerned 
with, there was a statement made that there wasn't enough 
consideration given to market-oriented approaches, and in that 
reference, I think we were probably referring to transfers. I 
guess, Mr. Berliner, you made some reference to that. Has this 
issue from your perspective, been adequately addressed? Has it 
been taken off the table, or where are we at as we look at 
water transfers?
    Mr. Berliner. I don't think that water transfers have been 
taken off the table at all, in fact, quite the contrary. I 
think water transfers are one of the major issues in the CALFED 
process, and an area that the urban community is looking to, 
very favorably and quite strongly, as being available to meet 
some of our future needs. So, we intend to rely quite heavily 
on water transfers. I had ordered to move water in the areas 
that are water-short.
    I might comment about an earlier conversation that had 
taken place regarding conservation. Certainly, urban areas are 
not going to be able to meet their future needs strictly from 
conservation. Water transfers and additional yield from the 
system are going to be essential.
    We met last week with members of the business community. 
There was a letter signed by 28 chief executive officers, 
urging the President and Governor Wilson to proceed toward a 
preferred alternative by the end of this year, and in their 
view, water transfers was one of the key components of the 
CALFED program, and urged that review of water transfers 
continue. We support that. We believe that we do need to move 
toward preferred alternatives, and that water transfers are a 
very important component. We are glad that the business 
community is becoming engaged in this. After all, the 
California economy, the business community is what that's all 
about, and water is a key, in part, to the survival of our 
economy.
    So, water transfers are hugely important, but I would add a 
caution which is, that water is essential. It is not equivalent 
to buying a car, a totally free market in water is not 
possible. You cannot simply move water toward money. Water has 
to stay, in communities words, essential. And we cannot see 
wholesale transfer water, simply based on money alone. So, an 
entirely free market in water is something we would not 
support.
    Mr. Dooley. Ms. Davis, I understand you're a member of the 
Bedock process advisory group, would your statement in terms of 
questioning the need for water, a need for additional water 
developments--excuse me, and yield, I would point out, through 
means other than just conservation and soft-path approaches, 
then, do you object to, during the CALFED process, the 
consideration as I think, Mr. Berliner identified that they 
were looking at potential infrastructure changes, including 
over 40 reservoir sites, and 12 ways to move water around this 
State, do you think that it is inappropriate for that to be 
considered during the CALFED process?
    Ms. Davis. No, I do not.
    Mr. Dooley. So, then, when we're looking in terms of the 
potential way we can move the process forward, and you're 
certainly not saying that you're not open nor should we be open 
to looking for additional yield that might be actually new 
surface or whatever water infrastructure developments are in 
need to increase yield?
    Ms. Davis. I think the CALFED process has to look at all 
the options.
    Mr. Dooley. All right, thank you.
    Mr. Doolittle. I'm going to reserve my time for now, and 
recognize Mr. Miller for his questions?
    Mr. Miller. Thank you, Mr. Chairman.
    It would be a mistake if people suggested that these line 
of questioning is about whether or not an option will fill the 
needs of California. The whole CALFED process is to determine 
the range of options, and what mix of options make the most 
sense for the future of California. And that continues, I 
think, to be the mission.
    The question we get to now ask, and what I characterize as 
a mid-term review here, and I'm not sure Lester would be happy 
with that because that sounds like he's going to be doing this 
the rest of his life. But, it's at the mid-term review, you've 
got to start asking and narrowing tougher and tougher 
questions. And, I think, some of the questions raised about the 
basis, that Ms. Davis had raised, about the basis for 160, and 
then the use of 160 in this process are very legitimate 
questions because they have huge ramifications for how you 
measure different alternatives, the cost, and the efficacy of 
those alternatives.
    No one here is suggesting that all of our needs are going 
to be met with conservation. I guess maybe that could be a 
conclusion, but there's no evidence that that's the case so 
far. But, when you're picking choices you've got to start at 
some point, match them-up based upon the need. I have people in 
the financial community in the San Francisco Bay Area, from our 
leading banks that tell me if we had a free-market system, 
there would be a surplus of low-cost water available in our 
State; they just believe it. I've sat for hours, went through 
them--they were not exactly ideological travelers with me--and, 
when we got all done discussing this, and all the ramifications 
of the politics of water in California, they said, in a real-
market system there would be a surplus of water available.
    Now, you made a decision, Mr. Berliner, the people you 
represent, that we have other values in California whether it's 
supply for San Francisco or whether it's the future of 
agriculture, or what-have-you, but those decisions also come at 
a cost. Because if you said you're going to take agricultural 
water and throw it out on the free-market, it be a dramatic 
change in the make-up of our State. I don't know if it would be 
winners or losers. Because I don't know if just trading in a 
row-crop for a three-bedroom-two-bathroom home necessarily 
makes it a better State.
    But, there are those who suggests, like natural gas, people 
like myself who fought those market forces all of those years, 
kept saying, just throw it out in the market, you'll have more 
natural gas than you know what to do with, and you'll have it 
at prices that people can afford. Well, for the last 10 or 12 
years, they've been proven correct. I don't know if that will 
be proved in the long-run or not, but these questions must be 
asked. Because we are now getting into a different process.
    We're getting into the process of selection. And so, 
whether or not there's a million-acre feed in conservation or 
two-million-acre feed, or the market can generate surpluses, or 
transfers can generate additional water, these are crucial 
questions at this stage. And, I just think that it's very 
important that they be asked.
    Let me, on another point, Mr. Pauli, welcome and thank you 
for your testimony. But, let me ask you a question because--and 
I only ask this because I'm not clear of the accuracy of it. 
Somewhere in your statement, on page two, you said that your 
concern was about Proposition 204, and you say, ``that Federal 
appropriations have been used in large part to follow 
agricultural land and set the stage to redirect agricultural 
water to other users.'' Is that accurate?
    Mr. Pauli. Yes, sir, I believe so.
    Mr. Miller. I thought we were using a lot of this for some 
restoration projects, and a lot of fish screens so irrigation 
districts could continue to take water, and some other things.
    Mr. Pauli. We're clearly using it for a wide range of 
products. I mean, there's not one simple answer to one thing 
that we're using it for. It's a wide range of things. Yes.
    Mr. Miller. OK, so, I guess, maybe Lester can clarify that 
or we can get that information for the Committee. The 
chairman's raise, and I think it's an important issue.
    Let me just say, Mr. Dooley referred to breaking down the 
comedy here, the suggestion that somehow, 204 was the 
environmentalist money, and now somebody else is entitled to a 
pot of money to build structures, there's a lot of that 
environmental money that is there, and the reason we're here in 
the CALFED process is to avoid the crash of the system, so that 
people think that they can get, as Mr. Hall pointed out, 
additional yields out of this system if we shore-up the 
environmental structures. So, the benefits flow a number of 
different ways. Just as when people go to build these dams, 
they're going to want to tell us what great environmental 
structure they are, so they won't have to reimburse for the 
cost. These will become the biggest environmental projects in 
the western United States by that time.
    So, I just want to make sure that we don't, ``that was your 
money, now it's my turn.'' Because there's an awful lot of 
money there that is going to benefit a whole lot of different 
purposes. As I understand, some of these projects that are done 
in terms of watershed restoration, the fish screens, and 
others. I don't know that money has actually been spent to 
fallow land.
    Mr. Pauli. Well, we clearly supported 204. Our primary 
concern is the fact that when you start talking about whether 
600,000 or a million acres, we know there's a range there, and 
we don't know the exact number that's going to come out of 
production agriculture. We're concerned.
    Mr. Miller. Yes, but we haven't spent money. I guess what 
I'm trying to clarify, we haven't spent money, to date, to do 
that.
    Mr. Pauli. No, but at some point, you'll get an opportunity 
to spend money for that. I mean, it says voluntary purchases or 
acquisitions, so you will get a chance if the program goes 
forward to spend that money. Somebody's going to have to pay 
for that land.
    Mr. Miller. All right. I'll live with that. Thank you.
    Mr. Doolittle. OK, Mr. Pombo.
    Mr. Pombo. Thank you, Mr. Chairman.
    Mr. Pauli, in terms of land that's going to be fallowed or 
retired from use, you stated that it would be somewhere between 
400,000 and 900,000 maybe as much as one million acres of land 
that could possibly be retired under this plan. We know that 
there is a proposal here to take about 250,000 acres of land, 
and retire that, mostly in my district.
    Just to put that in context. San Joaquin County has 467,000 
acres of irrigated land. If this were to be put into place, the 
250,000, about half of the irrigated land in San Joaquin County 
would be taken out of production. What impact would that have 
on the economy of San Joaquin County?
    Mr. Pauli. It would clearly have a major impact, and not 
just in terms of the land that's removed per production, 
because clearly, those people in theory, are going to be 
compensated for the sale of their land to the restoration 
projects, but the people who are put out of a job, the taxes 
that aren't paid to the school districts or the water districts 
for the other community services districts, the cannery and 
processing facilities are not going to receive that product.
    Now, I don't know what the mix would be of that 250,000 
acres, but probably, a quarter of it would be tomatoes. I mean, 
you're talking about an awful lot of tomatoes, and those are 
going to mean workers who aren't going to be working at those 
processing facilities. There are going to be banks that aren't 
going to be getting paid because of the mortgages on those 
processing facilities. The earthquake effect is going to be 
felt much broader than just those farmers who receive payments 
for their land. It's going to have a big impact on the 
communities across-the-board, in terms of things we haven't 
even contemplated yet.
    Mr. Pombo. Mr. Hall, along the same lines in talking about 
the retirement of land. One of the things that they go by on 
this report, and you mentioned six million acre-feet of water 
in response to a question, one of the basis that this report is 
going off of, is that, by retiring that land that they're going 
to create new water. And that water is going to be transferred 
either to other contractors or to environmental uses. The 
people that I've talked to will argue that letting those 
islands flood, creating the wetlands out of it, is going to use 
as much if not more water than irrigating it. So where is the 
additional water going to come from?
    Mr. Hall. I don't have a ready answer for the last part of 
your question, though it intuitively makes sense. That, if you 
keep the area flooded, and divert water to flood it, you're 
probably not going to save much, if any, water. I will say that 
my membership is not in support of retiring ag-land to 
reallocate the water.
    It is true that if we were to build a system today, we 
would probably set back levies, we would develop more riparian 
habitat in order to protect the fish, that use that system just 
like we do. Because the fact is today there are fish numbers 
declining, and because of that, they're becoming endangered, 
they're listed as endangered, and that, in turn, impacts on 
every diverter and user out of that system. It does seem clear 
that we're going to have to develop additional habitat along 
the Delta corridor, and along the Sacramento/San Joaquin 
corridors. I don't think we need to retire the amount of land 
that you all have used in your estimates, and we would not 
support that.
    Mr. Pombo. Unfortunately, it's not my estimate. I got it 
out of the CALFED. I mean, if it was my estimate it wouldn't be 
anywhere near that high.
    Mr. Hall. I understand. But the numbers that you all have 
discussed today, which come out of CALFED, I'll let Lester now 
talk about that, but we are going to need some land to develop 
habitat, so that, the water supplies for folks in your 
district, and the folks who use the system up-and-down, and as 
exporters, can continue to rely on that supply. Obviously, 
we're not interested in retiring any more land than is 
absolutely necessary. And, we would not support anything other 
than a willing seller sort-of basis.
    Mr. Pombo. But the land has to be identified.
    Mr. Hall. It does have to be identified, and we would, as I 
said before, would like to see the amount of active agriculture 
land that's now in production, see the amount of that 
converted, kept at a minimum.
    Mr. Pombo. Let me ask Mr. Pauli a followup question on 
that. Mr. Pauli, you're a farmer. If you were looking to expand 
your operation, and you looked at a ranch in San Joaquin 
County, and it was slated for possible purchase by the State or 
Federal Government or by someone else to be turned into 
habitat, would that be a parcel that you would continue to look 
at or would you look elsewhere?
    Mr. Pauli. No, I would not look. And the bigger problem 
would be is if you were interested in a piece of ground 
alongside of a farmer. He had two pieces. One, he said, I'm not 
going to commit to the program. I don't want to sell it. I want 
to see it stay in production agriculture. And I said, well, I'm 
interested in buying that. And the next day I learned that the 
2,000-acre piece of ground alongside of it has a willing 
seller, and he's going to convert. I would not then be 
interested in the first piece of ground because of the impact 
that it's going to have on me to farm that piece of ground 
alongside of land that's owned by the state or the Federal 
Government, and the consequences of doing that.
    So, we clearly do value the land, and my ability to sell 
it.
    Mr. Pombo. So, the result would be, even though the Federal 
or State government has purchased the land, not bought an 
easement on it, they've not bought it fee-title, all they've 
done is put it on a map or put it in a book, like this, and 
said, that we want to buy that land. So the end-result is we 
have devalued the property.
    Mr. Pauli. I believe so, yes.
    Mr. Pombo. For agricultural purposes, it has less value 
today than it did before it was put on a map as being possible 
habitat for something.
    Mr. Pauli. I believe it's already impacting land prices in 
that area, because everybody can see what's coming.
    Mr. Pombo. Mr. Chairman, are we going to have the----
    Mr. Miller. I just answered your question. It's absolutely 
a point in for me. How would you go about this process. I mean, 
we know that there's going to be some riparian restoration, 
there's going to be some landowners that have already indicated 
some willingness in some of these areas. How do you go about 
that process? You've got to do some planning. You've got to 
identify it so that it passes must-do. This is an improvement.
    Mr. Pombo. I've been arguing for the past couple years that 
they have to be very careful about the documents that they put 
together, because once you identify the lands that are suitable 
for purchase, you've impacted the value of those lands.
    Mr. Miller. Well, you know, we've had a hearing on that. I 
don't disagree with you that you don't be a landowner living 
under this kind of uncertainty. I just wonder, how do you then 
proceed?
    Mr. Pombo. Well, with their proposal, even if you take the 
lower figure of 250,000-acres, I don't think there's anybody in 
this room who can honestly stand up and say that they're going 
to have enough money to buy 250,000-acres of land, and yet, 
they've clouded the title on that 250,000-acres of land just by 
saying that we are going to go out and purchase it. And there's 
nobody in here, George. And you know as well as I do, that 
they're ever going to have that money.
    Mr. Miller. But you've got to pass environmental must-do, 
you've got to pass a whole series of riff, they can't put in a 
blank. Well, you can't say, well we're going to have blank-
acres of land. So, at some point, it's what any city or country 
goes through with zoning or whatever. You've got to say, look, 
this is open for consideration, and then the process refines it 
down or something. Maybe it's in these processes that they 
decide that they should be talking about 100,000 or 200,000, 
whatever the figure is. But, I don't know what the option is 
for them. I appreciate your concern. I think it's real. I mean, 
in the real world, that's a problem, but I don't know what the 
better vehicle is.
    Mr. Pombo. Mr. Chairman, are we going to have an 
opportunity to have another round of questions with this panel?
    Mr. Doolittle. Well, I would remind our members, there's 
three more excellent panels to go. I think we ought to try and 
wrap-up. Well, let's just hurry.
    OK, Mr. Dooley. OK, Mr. Dooley is going to pass on his 
questions. I only have one or two myself. There's a lot we 
could talk about here, and I think that's obvious, from the way 
the hearing's been going on.
    We have three other hearings, Mr. Pauli. There are 
conversions going on in agricultural land, but we're moving in 
some areas, more toward permanent crops, and away from the 
annual plantings, and it's been pointed out that in the case of 
going to the permanent crop, you then lose your flexibility. 
You absolutely have to have the water then. You don't have the 
option of not planting that year, or something like that. And, 
of course, the permanent crops use water all year long. Would 
you care to characterize whether this is a trend? Can we 
generalize, and indicate that this is going on pretty much 
throughout the Central Valley, or is it just in isolated areas?
    Mr. Pauli. I think, I think, Mr. Chairman, there's a couple 
of points there. No. 1, generally, we are converting to the 
higher-value crops, permanent crops, and the trend there is 
because that's where there's still viable agriculture. It's 
where you can still make a profit, where some of the other 
crops, we haven't been able to. Certainly, that doesn't include 
some of the other major crops. We tended to move away from some 
of the livestock-type of operations, and more to the tree and 
vine crops. We haven't necessarily moved out of cotton or rice 
or some of those crops. So, we have moved to that.
    No. 2: clearly, as we look ahead, you don't have the same 
flexibility. I mean, you can't shut those trees or vines off 
for a year or for 2 years during the drought. Whereas, if you 
were in some of the other crops, even tomatoes, as an example, 
and there wasn't the water available, and you didn't plant for 
that year, you wouldn't necessarily have the same kind of 
losses that you would in a permanent crop.
    Mr. Doolittle. It's very difficult for farmers to know what 
amount of water you will have, isn't it?
    Mr. Pauli. Well, you know, that's why the question of 
assurances and reliability become so fundamental in this 
process. And, that's why we continue to stress that one of the 
things, I think for all water-users, whether you're an urban 
water district or whether you're a small, rural agricultural 
water district, assurances and reliability so that your 
customers, your members in making their commitments, whether 
it's to a sub-division in homes, or a school, or a hospital, or 
whether it's to a processing facility, or 100-acres of almonds, 
that you're going to have assurance and reliability of that 
water in order to make that investment. So assurance and 
reliability are absolutely fundamental in this whole process so 
that we know where we are, and what kind of commitments we'll 
have for water.
    Mr. Doolittle. Well, do you see CALFED moving in a positive 
direction with reference to assurance and reliability?
    Mr. Pauli. Well, I think that we're all hopeful. And I know 
that Mr. Dooley said that he was concerned about my comments. I 
reiterate the fact, that we have stayed at the table. We've 
continued to participate in the discussions. We're still 
optimistic that something can work out, but at some point the 
rubber meets the road, in terms of assurances and 
reliabilities, and not having the million acres of following. 
And if the plan ultimately comes out to be extensive volume, 
we're clearly going to oppose it.
    We want it to work. We hope it will work. We need 
assurances. We need reliability. We need a plan in California 
that deals not only now, but into the future for all 
Californians, and all water-users, and for the ecosystems for 
the fish, and for everything else. And that's what this process 
is about, a plan that works for everybody, that we all get 
better together with. We simply don't remove a million-acres of 
production from California agriculture as the solution. That, 
we will absolutely oppose.
    Mr. Doolittle. Thank you.
    Thank you to all the members of the panel for appearing for 
your testimony. There are further questions. I know Mr. Pombo 
has some. I'm sure probably all of us have further questions 
that we will submit in writing, and we'd urge you to respond 
expeditiously to those questions.
    With that, we'll excuse the first panel, and ask the second 
panel to come forward.
    Mr. Hall. Mr. Chairman, with your permission, the issue of 
water transfers came up earlier in the discussion, we have 
recently written a rather extensive letter on this subject. I'd 
like to attach it to my testimony for the record.
    Mr. Doolittle. Thank you, without objection, that will be 
entered in the record as well.
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    Mr. Doolittle. If members of our second panel will remain 
standing for the oath, the three members, panel No. 2. OK, if 
you gentlemen will please raise your right hands.
    [Witness sworn.]
    Let the record reflect that each answered in the 
affirmative.
    Thank you. Thank you for coming, and please take a seat. 
Let's see. Let's focus on our questions from earlier. The 
second panel, we've asked to address the following questions: 
one, how are the future needs of California identified through 
the CALFED process going to be financed; two, since interim 
funding for the common elements in the CALFED has been provided 
by Federal authorization, and the California water bonds, are 
the long-term solutions going to be funded by public-interest 
groups, by beneficiaries, or by government financing, and 
three, are CALFED costs going to be born by local communities 
through unintended program consequences?
    Our first witness, Mr. Robert Potter, chief deputy director 
of the Department of Water Resources, the State of California. 
Mr. Potter, you're recognized.

 STATEMENT OF ROBERT POTTER, CHIEF DEPUTY DIRECTOR, DEPARTMENT 
            OF WATER RESOURCES, STATE OF CALIFORNIA

    Mr. Potter. Thank you, Chairman Doolittle, and members of 
the Subcommittee.
    My name is Robert Potter. I am the chief deputy director of 
Department of Water Resources. The department operates and 
maintains the State water project, and develops and updates the 
California Water Plan. In addition, I serve as the Department's 
representative on the CALFED policy group.
    It really is too soon to get too specific about how we 
finance the CALFED program, given that we have not arrived yet 
at a preferred alternative, nor agreed on a plan for 
implementation. However, it's an appropriate time to start 
thinking seriously about some of the things that ought to go 
into whatever the financing plan is. And there's some things 
that stand out in my mind.
    There is some background that I think we ought to consider 
when we decide how to fund this program. The CVPIA allocated 
800,000-acre feet of water away from the cities and farms in 
California to the environment. The 1994 Delta Accord allocated 
an additional million-acre feet of water away from cities and 
farms into the environment. And thus far, there's been 
essentially no recovery or compensation for those 
reallocations.
    Within the CALFED program itself, it's not clear yet, what 
quantity of water will be developed or how it will be 
allocated. Both issues are still on the table.
    In terms of principles for how to arrive at equity, most 
people involved in the discussions and debates have some 
support for the concept of user-pays. Most people support the 
concept that the beneficiary should pay. When you look at 
California, we basically all use water, and we all benefit from 
California's healthy economy which in major part, is there 
because of the strong Federal and State water development 
programs.
    Many, many years ago, the U.S. Senate developed a document 
that was commonly called the Green Book that presented a set of 
principles for identifying beneficiaries and allocating water 
development costs to beneficiaries. All of us spent a lot of 
time agonizing, maneuvering, discussing, and debating how to 
apply the Green Book and it served us well. But it was not a 
silver bullet. The CALFED package itself is certainly too 
complex for us to arrive at some simple formula as to how to 
allocate costs. The only real answer is to debate and negotiate 
and probably arrive at a mix of payment strategies tapping both 
beneficiaries and users. In the long run in most resource 
issues in this country, we try to arrive at equity and equity 
tends to drive the decision--not really economics.
    In closing, I'd like to assure the Subcommittee that the 
Wilson Administration is strongly committed to CALFED. Governor 
Wilson supported Proposition 204 which provided moneys to jump 
start some of the environmental content of this program. 
Yesterday, the Governor met--this was mentioned earlier I 
realize, but it's worth reminding ourselves--that the Governor 
met yesterday with Secretary Babbitt. They agreed to a strategy 
for moving ahead on CALFED this year. The Governor at the same 
time announced that because of the healthy state of the State's 
economy, in his May revisions, he was able to dedicate almost 
another $30 million of the State's budget to the CALFED 
process. He, at the same time, directed $170 million to the 
flood control subventions in California--an area where we've 
fallen behind in meeting the State's obligation.
    The Governor has proposed a 1998 water bond which would 
provide additional seed money to keep the CALFED process 
rolling. I would assume that eventually a larger bond or 
additional bonds will be required to implement the full $10 
billion program that is evolving in the CALFED process.
    In closing, I would like to submit for the record the 
Governor's letter to Chairman McDade and I'm not going to read 
the letter--I'd like to read two sentences from the letter. 
``Dear Mr. Chairman, I would like to take this opportunity to 
share with you California's priorities among the programs 
funded through the Energy and Water Development Appropriations 
bill. My top priority continues to be full funding for the 
$143.3 million requested in the President's budget as the 
initial Federal contribution toward the restoration of San 
Francisco Bay Delta.'' The letter goes on and identifies other 
priorities of the Governor's, but I thought it was important 
that you hear his first priority. Thank you.
    [The information referred to may be found at end of 
hearing.]
    [The prepared statement of Mr. Potter may be found at end 
of hearing.]
    Mr. Doolittle. Thank you.
    Our next witness is Mr. David Yardas, senior analyst for 
the Environmental Defense Fund from Oak--from California. Mr. 
Yardas.

   STATEMENT OF DAVID YARDAS, SENIOR ANALYST, ENVIRONMENTAL 
                    DEFENSE FUND, CALIFORNIA

    Mr. Yardas. Thank you, Mr. Chairman and members of the 
Subcommittee. I appreciate the opportunity to testify on the 
issue of CALFED financing. I did submit a fairly lengthy 
statement for the record, so I'll attempt to just touch briefly 
on a couple of points from that now in my oral comments and 
address specifically a couple of the issues that you identified 
up front.
    Just for perspective, I want to be clear that the 
Environmental Defense Fund, both on its own part and working 
through the Bay area-based Environmental Water Caucus is--takes 
CALFED very seriously and is very much committed to CALFED and 
the consensus that was--set CALFED in motion through the Bay-
Delta Accord to which we were signatory. That doesn't mean that 
it's easy or that we always see eye-to-eye on some of these 
matters as you heard on the first panel and no doubt as we'll 
get into on this one and those that follow. That said, my 
organization, in particular, views the issue of finance--that 
is, who is going to pay for what out of CALFED as perhaps one 
of the most, if not the most, fundamental issues to be 
addressed.
    I have personally spent the--better part of the last 3 
years involved in the deliberations of the BDAC Finance Work 
Group or subcommittee attempting to wrestle with at least two 
of the issues that you asked: how will future needs be 
financed, and what about the mix of beneficiaries versus 
public. How will those issues be addressed? We have struggled 
in attempting to come up with a consensus on how to proceed on 
that front. I think it is correct to say that most folks agree 
that a beneficiaries pays principle-based approach makes a lot 
of sense. We have expressed some major concerns from the very 
outset, however, that the fundamental problem with the 
benefits-based approach taken literally is that it essentially 
assumes a level playing field from the outset. We are mindful 
of the criticisms that have been made that looking backward is 
nothing but divisive and unproductive. On the other hand, we 
feel that there is a need to take an honest look at how we got 
to the need for a Bay-Delta Accord and a CALFED process in the 
first place in order to meaningfully address the important 
issue of finance and what defines an equitable allocation of 
costs.
    The BDAC Finance Committee, and the CALFED Phase II draft 
to its credit, identifies an important question with regard to 
the benefits-based approach, and that is whether or not any 
adjustment for past impacts is appropriate prior to using the 
benefits-based approach. This is a matter of ongoing work in 
the Finance Committee discussions in particular and I know in 
CALFED's efforts as a whole. The Environmental Defense Fund 
certainly thinks that the answer is resoundingly yes--that any 
reasonable accounting for the prior investments and prior 
impacts of water development will and must acknowledge that the 
playing field is not level, that the important funds that have 
been provided or authorized to-date for ecosystem purposes are 
a good start but are nowhere near to the point where we've 
reached a quid pro quo kind of situation, as has been argued in 
the context of the Governor's water bond proposal, at least 
prior to yesterday's announcement. (I'm still trying to 
understand exactly what was announced yesterday and what it 
means for the pending water bond measure.)
    But in any case, where we come out at this point, what we 
would recommend as a way to move forward, and the position that 
we've taken in the BDAC discussions can roughly be summarized 
as follows: That partnership funding, public and user-based 
funding, ought to be available to fund the common programs of 
CALFED pretty much across the board. We would support that. 
That seems like a reasonable way to proceed. However, when it 
comes to the more controversial issues of new dams and 
conveyance--large conveyance facilities through the Delta--we 
feel quite strongly that those should be looked at as new water 
projects and that they should be paid for by the 
beneficiaries--the direct beneficiaries, the users--who will 
benefit from those projects which are made necessary by all of 
the water development primarily that we've done in the past.
    We recognize that not only water development--and 
particularly the State and Federal projects--can be assessed 
blame for the past. That's why we supported, joined with our 
urban, agricultural and business sector colleagues in a 
somewhat controversial--in our community--push for public funds 
to the exclusion of user mitigation funds under Proposition 204 
and the Bay Delta Act. But that said, we will continue to 
support partnership work and recommend that funding be provided 
in that way for common programs, but that--I guess what it 
comes down and what it reflects back on is the prior panel: 
Somehow price really matters when it comes to how we perceive 
moving forward in CALFED. CALFED's about a new way of doing 
business, and we think that making sure that true cost-price 
signals accompany newly developed water is a fundamental part 
of the equation. I'd be happy to go into that more in a 
question and answer, given that my time is up. So, thank you.
    [The prepared statement of Mr. Yardas may be found at end 
of hearing.]
    Mr. Doolittle. Thank you.
    Our next witness is Dr. Tim Quinn, Deputy General Manager 
of the Metropolitan Water District of Southern California.

      STATEMENT OF TIMOTHY QUINN, DEPUTY GENERAL MANAGER, 
       METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA

    Dr. Quinn. Thank you, Mr. Chairman, members of the 
Committee. Like everyone else, I very much appreciate the 
opportunity to present some of my views here this afternoon.
    My name is Timothy Quinn. I'm Deputy General Manager of the 
Metropolitan Water District of Southern California. I would 
also point out I'm one of five panelists appearing before you 
today to sit on the Ecosystem Roundtable and have some 
responsibilities for providing advice about the expenditure of 
CALFED moneys.
    Primarily, I am here, as Tom Berliner was, as a 
representative of the Bay-Delta Urban Coalition and my 
testimony has been reviewed by a committee, North-South, so 
that it would reflect a broader spectrum of interests. I would 
like to try to be responsive to the questions that you posed to 
this panel by briefly describing four key principles that the 
Urban Coalition believes will be important in developing a 
successful financing plan. They're discussed in more detail in 
my written submitted testimony.
    The first principle is that the finance plan must be 
founded on a CALFED solution that generates widespread value. 
The concept is simple. First, create value so that you create 
willingness to pay amongst the people who are going to be asked 
to contribute financially. We believe that CALFED, for the 
first time in a generation, offers the opportunity to create 
value for the environment and for water users in California. 
For the environment, we're talking about moving into the 21st 
century and restoring health to the ecosystem through a 
historically unprecedented ecosystem restoration investment 
program. For urban California, substantial improvements are 
possible in the source quality of our drinking water. We see 
the possibility of creating a stable infrastructure upon which 
we will build economic prosperity in the future. For 
agriculture, we're talking about moving into a new era of 
natural resource management in the 21st century in a way that 
sustains and strengthens the largest agricultural economy in 
the Nation. Those are values that we think people are willing 
to pay for in California through one means or another. Just as 
the benefits are widespread, we are firmly convinced that the 
finance plan must have a diverse source of funds.
    The Urban Coalition has long taken a position in favor of 
user fees as a primary funding source for CALFED solutions, but 
we also recognize that many of the benefits of a CALFED-
preferred alternative are going to be broadly spread and that 
justifies some participation by State and Federal taxpayers. 
Exactly how that mix comes together, we're going to have to 
tackle that question over the next 6 months as we define a 
preferred alternative consistent with the direction that we're 
receiving from the Governor and from the Secretary of Interior 
this week.
    I also would emphasize the importance of acting favorably 
on the appropriations request of the Clinton Administration for 
keeping the ecosystem restoration elements forward moving.
    The second principle is that CALFED must provide benefits 
at the lowest possible cost. It's not enough to just look at 
cost allocation. We think this Committee and all others 
involved in this process have to look hard at the overall price 
tag. Quite frankly, we believe the $9-$11 billion of estimated 
costs is too high and the urban community is committed to 
working with the CALFED agencies and others to find the lowest-
cost package that achieves the benefits that can be obtained 
through the CALFED process.
    Principle three: We believe the costs should be shared 
consistent with the beneficiaries pays principle and that costs 
should be allocated in a mutually agreeable manner. The 
beneficiaries pays principle--it comes off the lips easily. We 
believe there's a lot of devil in the detail here. We are 
extremely concerned that an arbitrary or academic application 
of that principle could backfire and upset the whole process. 
For that reason, we're recommending that the beneficiaries pays 
principle be implemented to the maximum degree possible by 
coming up with mutually agreeable allocations of cost. We think 
that approach will give those who are expected to help pay a 
voice in defining whose benefiting and by how much. We think it 
will produce the best alignment of benefits and costs. In the 
end, it will underscore the importance of assurances to all the 
parties as we move forward to a preferred alternative.
    The final principle--somewhat in counterpoint to the point 
made by Dave Yardas--is that we believe the finance plan must 
be based on a prospective assessment of value and not on a 
retrospective assignment of blame.
    To be successful, CALFED has to look forward. We don't 
think it's possible to agree on who's responsible or who should 
be blamed for what problems are in the system today. More 
importantly, we think the debate itself is counterproductive. 
Blame does, we think, lead back to divisiveness and to the 
gridlock that CALFED gives us the opportunity to leave behind 
us. We would urge that financing decisions be made on the basis 
of prospective assessments of who's going to gain value from 
the implementation of a solution and who's going to help pay 
for that solution.
    Let me close on an optimistic note. We believe there's an 
enormous opportunity here for creating value for California, 
for agricultural and urban water users and for the environment. 
We think that there's a lot of work to be done, but that by the 
time we get to the end of this year, we will have an agreeable 
financial plan that backs up a preferred alternative that's 
going to benefit California as we move into the 21st century.
    [The prepared statement of Mr. Quinn may be found at end of 
hearing.]
    Mr. Doolittle. So, Dr. Quinn, you actually believe you'll 
have that by the end of this year?
    Dr. Quinn. I think we'll have principles that define a 
financial plan consistent with the direction we're getting from 
the Governor and the Secretary of Interior. That they would 
like to come to some agreement on a single preferred 
alternative by the end of the year. I would point out that I'm 
known in the water community as quite an optimist.
    [Laughter.]
    Mr. Doolittle. Thank you.
    Dr. Quinn. My optimism has proven justifiable on many 
occasions in the past, however.
    [Laughter.]
    Mr. Yardas. What we sometimes use is a slightly different 
term--but that amounts to the same thing.
    [Laughter.]
    Mr. Doolittle. Mr. Potter, what's the average shortage--in 
an average water year--what's our shortage, according to your 
department?
    Mr. Potter. I believe you quoted the number earlier--that 
about--I don't have 160 in front of me and I don't do a very 
good job with numbers, but I think that number is right.
    Mr. Doolittle. OK. I think the figure I quoted was 1.6 
approximately and in a drought year, it's 5.2 presently. So 
anyway----
    Mr. Potter. Those are consistent with my recollections. I 
don't--I didn't bring the bulletin with me.
    Mr. Doolittle. OK, could you check on that and verify it--
--
    Mr. Potter. Certainly, certainly.
    Mr. Doolittle. [continuing] for the Committee?
    Mr. Potter. Could I comment just a little bit on the 160 
process itself?
    Mr. Doolittle. Yes, that's a good----
    Mr. Potter. You know, the State developed the California 
water plan in 1957, published it and it was adopted by our 
legislature. At the time it was agreed that it would be 
periodically updated. The Bulletin 160 series is the series in 
which we do those updates. If memory serves me correctly, the 
first update was in the 1960's--some 35 years ago or so. I 
think this is either the sixth or seventh update. It's easy to 
go back and take a look at whether or not our crystal ball has 
been any good. Sometimes we're high and sometimes we're low. In 
the final analysis, we're guessing the future--there's an old 
Arab proverb to the effect that he who foretells the future 
lies even if he's proven correct. I mean, it's a real problem 
to try to look ahead. Well, we did however, have a very 
comprehensive process. We had a 30-member citizen advisory 
committee. We had a public hearing process chaired by our 
California Water Commission. We feel comfortable that we've 
done the best job we can with the facts in front of us on 
foretelling the future on California's water.
    Mr. Doolittle. I guess this is getting to the third 
question, but does the Wilson Administration support the 
fallowing of land as you've heard it described in the CALFED? I 
mean the estimates were from roughly 400,000 up to nearly a 
million acres of land?
    Mr. Potter. I'm going to try to give you two different 
responses to that. First, certainly it's not department policy 
or State policy to fallow land to make water with some 
exceptions. I was one of the key administrators of the 
Governor's 1991, 1992 and 1994 water banks. In 1991, we did 
fallow extensive land to make water available in the drought 
emergency. We paid farmers not to farm. For the farmer and the 
water users, it turned out to be a good experience. For some of 
those people that experienced third-party impacts, it wasn't 
such a good experience. In 1992 and 1994, we did no fallowing. 
I'm not saying that we wouldn't come back and fallow again in a 
serious drought because we might well do that. But we are still 
taking a tremendous amount of criticism throughout the 
Sacramento Valley for some of the impacts of that first water 
bank. There is no State policy that supports the concept of 
fallowing to make water available. There is a Federal CVPIA 
program in which the Federal Government can fallow land to 
provide water.
    Mr. Doolittle. So the State would only support that then--
if I understood what you said--is an extraordinary response to 
an emergency?
    Mr. Potter. In any specific point and time basis--not on a 
permanent fallowing program.
    Mr. Doolittle. Not on a permanent basis?
    Mr. Potter. That's correct.
    Mr. Doolittle. OK.
    Mr. Potter. I should say in fairness, I think that the 
CALFED program has taken a bum rap on the fallowing issue. In 
reacting and working with their advisory council, they did some 
exploratory analysis and evaluations of what might happen if 
you fallowed a bunch of land. But they do not have in the 
CALFED program fallowing to generate water per se. There's 
nothing in there to that effect. There's some land conversion 
to support their environmental restoration program and there's 
some land--some agricultural land conversion to support some of 
the levee setbacks in the Sacramento/San Joaquin Delta. But 
there is not an item in the CALFED package to fallow land to 
generate water.
    Mr. Doolittle. Have you been with the Department for a 
number of--when--how long have you been with the Water 
Resources Department?
    Mr. Potter. If you were closer to the pen, you'd see a 40 
on it----
    Mr. Doolittle. Forty.
    Mr. Potter. It will be 41 years in June.
    Mr. Doolittle. Well, do you--are you proud of what has been 
accomplished in those 40 years or do you feel guilt-ridden over 
what has happened?
    [Laughter.]
    Mr. Potter. I'm certainly proud of what the Department has 
accomplished over the 40 years. I'd like to avoid my personal 
record here, if we could.
    [Laughter.]
    Mr. Doolittle. Do you feel, Mr. Potter, that additional 
surface storage is going to be necessary in order to meet our 
present and long-term water needs in the State of California?
    Mr. Potter. Well, one of the things that I think is that 
the CALFED family--all 15 agencies have come to recognize as 
they've tried to arrive at resolving the Delta problem. That is 
their charge. Their charge is not to try to balance all of 
California's water needs in the foreseeable future, but rather 
to resolve the Delta problem. Just in that relatively narrow 
view, they have concluded that there is no escaping some 
additional storage if we're going to add to the water supply 
pie.
    Mr. Doolittle. OK, well my time is up. Mr. Miller, your 
turn.
    Mr. Miller. Thank you, Mr. Chairman. Mr. Potter, let me 
just say I appreciate your comments about the annual--the 5-
year reviews under the process by which you--which people--the 
State arrived at 160. But I think on a previous panel, Ms. 
Davis raised some fairly concrete arithmetic questions here. 
That either the water usage in South coast was 4.3 or it was 
3.5. There's a world of difference between those two--
especially if that's what you're building a base on, you know. 
As she pointed out, there are reasons we want to normalize some 
of these figures and the process you go through. And the 
question of whether in the South coast region, is there really 
a .5 million acre feet of conservation to be developed there or 
is it 90,000 acre feet? There's a world of difference between 
those two when we start apportioning out what this plan should 
contain, what it should look like and who pays.
    It seems to me there has to be some attempt at resolution 
of some of these issues. Just like, you know, sort of like 
people ask for good science. If there's a mistake, we ought to 
seek to correct it, or explain it or disavow it or whatever--
however that turns out. Again, I'm not suggesting that this is 
all right and 160 is all wrong, but as we start to build on 
these determinations, I think it becomes very important as to 
where we stand with those.
    Mr. Potter. I certainly agree. I don't really have the 
information or the skills to get into detail here, but I had a 
couple of reactions as Martha was talking and will certainly 
talk more with her. But one of the things in 160 is we do two 
things. I mean, we do say what's possible and then we arrive at 
what's probable. It doesn't surprise me that there are 
situations where we have estimated a large potential water 
conservation piece and then ground into the program a smaller 
number because we thought that was what was going to happen.
    I believe in the 160 process, we have gotten plenty of 
criticism in both directions in terms of our water conservation 
program. Because of the controversy that has been stirred 
recently by the bulletin, I've talked to the staff about their 
public hearing process--which I was not personally involved in. 
But they have been basically criticized in both directions. 
``You've got more water conservation in here than anyone can 
ever possibly accomplish, or hey you guys are ignoring water 
conservation.''
    If you go back to the Governor's water policy of 1992--when 
Governor Wilson came in, we were overwhelmed with drought. In 
terms of water--that's where his attention was focused for the 
first year. By 1992 he turned to a long-term water policy and 
if you look at that water policy, it is basically a policy that 
has a broad menu of both demand management and supply 
augmentation--concludes that we need to attack both menus. But 
says in effect that over the next few years, our focus ought to 
be on fixing the Delta. Fixing the Delta isn't just about 
meeting the State's future demands, it's also about protecting 
the estuary.
    Mr. Miller. Well, thank you and I just want to raise that 
because I think it's a point that has to be brought to some 
resolution--you know, in the next coming months.
    Mr. Yardas, let me go back to your testimony. On page eight 
you describe what this combination as a public end use base 
relationships between ecosystem restoration, new surface, 
storage, conveyance facilities and so forth. Where are we--I 
mean--I guess--you know, earlier last month, this Committee 
heard from some people who were beneficiaries who said they are 
paying about all they can pay for water in the agricultural 
community. I guess, in my district, they might think that too 
after they built Los Vacaros. City of San Francisco can say 
well we're not--we're supportive of all this, but we have our 
stream of supply for the time being. I mean, the description of 
beneficiaries is going to be as difficult as apportioning the 
cost--it seems to me. Because some people are going to say--
gee, you know that doesn't impact us. In San Diego, we're 
paying all we can pay down here. This recharge up there--how do 
you get through this thicket. I mean, that's why some people 
say you just turn to general obligation bonds and everything is 
on the calm here.
    Mr. Yardas. Well, on this point, in some ways, Dr. Quinn 
and I may not be so far apart in that kind of what's come out 
of the deliberations of the Finance Work Group is that we're 
going to need to figure out some way to move forward 
recognizing that the question of bright lines between 
beneficiaries will be difficult. That you have some financial 
and a lot of nonmarket benefits that are difficult to compare. 
That looking backward can be problematic whether you stop at 
1992 or whether you go back a few years before that. So part of 
what we're trying to put forward in our recommendations and the 
ongoing discussions of the CALFED Work Group on finance is a 
forward-looking alternative. I described a current draft 
document at the bottom of page five and top of page six on my 
written statement that's currently in progress and will be the 
subject of review at the BDAC meeting--or at least discussion 
and briefing--on Thursday of this week.
    From our point of view, the bottom line is that in order to 
move forward, the cleanest way to do it is in a sense to view 
the common programs as a kind of mitigation and restoration 
program for the existing system. Then to the degree that new 
projects come online--OK, but those ought to be user-financed. 
They ought to include all of the environmental and nonmarket 
mitigations that have not been part of our conventional water 
development system, that have helped to understate prices, 
inflating demands, over building a system relative to what 
would be affordable if those who--if we were really pricing the 
next acre foot of water at what it costs broadly defined to 
develop it and provide it. So did that make sense? [Laughter.]
    Mr. Miller. Yes, in this room it probably makes sense.
    [Laughter.]
    I'll go back around when Mr. Doolittle's done.
    Mr. Doolittle. I'm going to recognize Mr. Pombo who I think 
is right outside the door there.
    Mr. Miller. OK. Well in the interlude I would just say 
that, you know, it's amazing when we started putting cost-
sharing on efforts here. All of a sudden the local demand for 
some of these projects when the Federal Government was 
providing 100 percent of financing, they just somehow weren't 
as worthwhile the next year as they were when, you know, when 
they had 100 percent financing. I mean, there is some market 
test to some of this in terms of when you're windowing out--
what's in and what's out.
    Mr. Yardas. Well, I think the point you made about the 
comments that were made at the hearing in Fresno relating to 
flood waters currently being too expensive because of the 
environmental fees that are attached to it-- I mean, that's 
water that's going to be available at a fraction of the cost of 
newly developed water that would presumably have to capture 
that same flood water. So, it kind of--those who are major 
proponents of those alternatives are inherently saying I think 
they're expecting someone else to pay for it--if in fact that's 
a viable alternative for them. In the north valley, already we 
have payment capacity waivers provided by the Bureau of 
Reclamation on the environmental fees because they're not 
affordable by the Bureau's calculations and policy. How do 
those--where does the beneficiary-based payment come into play 
there?
    Mr. Miller. Thank you.
    Mr. Doolittle. Pending Mr. Pombo's arrival. Mr. Yardas, do 
you recognize--it seems like we're almost talking about this 
system as if it never changes. But, I mean, it is an ecological 
system and those do change over time--don't they?
    Mr. Yardas. I think all healthy systems are dynamic. Yes.
    Mr. Doolittle. Well, if it is dynamic, can you tell us how 
could one mitigate impact caused by a dynamic system?
    Mr. Yardas. Mitigate impacts caused by a dynamic system?
    Mr. Doolittle. Well, or happening to a dynamic system.
    Mr. Yardas. I think that what we're trying to get at is 
some effort to ensure that--I mean, there are clearly costs 
associated with the use and development of water. There is 
habitat that's no longer accessible. There is water quality 
degradation due to pollutant runoff. There is depletion of the 
system itself and its implications for the mixing zone, and so 
on. I mean, there are lots of identifiable impacts associated 
with water development and use that have impacts and costs on 
the ecosystem.
    Mr. Doolittle. But those are positive, as well as negative, 
aren't they?
    Mr. Yardas. Which are the positives?
    Mr. Doolittle. Well, you'd have water available flowing 
down the stream that wouldn't ordinarily be there if it were 
just left up to nature.
    Mr. Yardas. Like the cold water releases at Shasta?
    Mr. Doolittle. Well, like having water available at say--to 
name an example close to our home in the lower American River.
    Mr. Yardas. Yes. I think any honest look at the indicators 
of the health of the ecosystem--whether it be the extent of 
habitat that remains, the amount of unfragmented habitat, the 
status of the populations of fish or waterfowl species--
Waterfowl have improved substantially in recent years--thanks 
to the CVPIA, in particular--but any honest assessment would 
conclude that we've spiraled down pretty far, pretty quickly in 
the last 20 to 50 years or so. For--in large part because of 
the water development that's taken place. To say that the 
system would be exactly as it was 50 years ago--no, I wouldn't 
say that. But I think it would, absent water development, be 
substantially similar.
    Mr. Doolittle. But is there no positive benefit you 
recognize from the projects that have been built?
    Mr. Yardas. Oh, I think Central Valley agriculture is 
incredible. I think the California economy is amazing. There's 
absolutely--there are benefits associated with water 
development.
    Mr. Doolittle. So at least you'll acknowledge the human 
species is part of the environment.
    Mr. Yardas. Absolutely. I'm one of them and I enjoy those 
benefits. I don't condemn them. [Laughter.] I'm merely saying I 
think we ought to include the costs of our actions in the price 
that we pay so that we know that we're fully accounting for the 
impacts of our being here.
    Mr. Doolittle. I'm going to recognize Mr. Pombo.
    Mr. Pombo. Thank you, Mr. Chairman. Mr. Potter, I want to 
give you an opportunity to clarify the statement you made on 
land conversions or land retirements. You said that there were 
no water benefits associated with that. That it was the 
position of CALFED that you weren't retiring land to create 
water. Just clarify your answer.
    Mr. Potter. Well, let me clarify my position for a minute 
if I can. I represent one agency--15 of whom run CALFED and you 
really ought to put this question to Lester when you get him up 
here. But what happened--my understanding of what happened 
sitting on the policy group now and not necessarily grinding 
the mechanics of the process--but my understanding of what 
happened is that the BDAC forum, the CALFED staff was asked to 
generate how much water could be saved by retiring some 
agricultural land. They threw out some big numbers--500,000 to 
900,000 acres. There was sufficient reaction both within the 
committee itself and in the general public that that concept of 
retiring the land to make the water was withdrawn and is not a 
part of the CALFED program. There are land conversions in the 
program--in the environmental restoration program, and in the 
physical works--some of the delta levees are proposed to be 
straightening, some of it straightened, some of the channels 
widened. That sort of thing does have an adverse impact on 
agricultural land. Retire some agricultural land but not for 
the purpose of generating the water, but rather for the purpose 
of ecosystem restoration or having a more reliable levee.
    Mr. Pombo. The low number I've heard is 250,000 acres. The 
high number, as you've mentioned and has been testified to, was 
close to a million acres. According to the CALFED document, the 
land necessary for facilities ecosystem restoration and water 
quality could range from approximately 75,000 to 140,000 acres. 
So the difference--even if you take the low numbers--there's an 
additional 100,000 acres that would be taken out of production.
    Mr. Potter. This is a copout, but I'm going to ask you to 
either drag Lester up here now or save this for Lester.
    Mr. Pombo. Well, I'm going to ask him, too. I just--I mean, 
you testified----
    Mr. Potter. I'm not sufficiently informed--I'm not 
sufficiently familiar with the specific numbers to have this 
conversation. I'm not ducking. If I knew the answer, I'd 
provide it. I simply don't know the answer.
    Mr. Pombo. I appreciate that answer and I believe that 
that's an honest answer. It was just in response to the 
Chairman's question--you said that no land was being retired to 
generate water and I believe that is an inaccurate statement--
even if you just read CALFED's documents only.
    Mr. Potter. Just a comment. I attended a public hearing for 
the CALFED program in Walnut Grove the other night. There is a 
tremendous amount of upset and concern in the farming community 
in the Delta. Because they feel that the ecosystem restoration 
program and the levee work to some degree has them paying a 
much larger portion of the hit on land conversion. It's 
something that we're all going to have to better understand if 
we're going to make it through the process. I don't think that 
we gave--well I know that we did not give them good answers 
that night because we simply didn't have them, but sooner or 
later those questions have got to be answered.
    Mr. Pombo. Well, that is a point that I will bring up with 
Mr. Snow later is the answers to the questions at Walnut Grove. 
I'm glad you had the opportunity to visit my district because 
all of those people make a habit of calling my office and 
visiting my office with their concerns about this process. To 
go back--and since we started on that point--I would like to go 
back just briefly and ask you about a development of new water 
sources. Just asking you simply would--do you believe that any 
plan that's looking at 20 or 30 years out in the future that 
does not realistically identify new water sources, new surface 
water availability is going to accurately deal with the water 
problems that we have in California currently and where we're 
going to be 20 to 30 years from now.
    Mr. Potter. I guess the short answer is no, I don't believe 
that. I do think though it is important to draw a distinction 
between meeting the overall statewide water balance. The 
charge--my understanding of the charge that Lester Snow has 
been given which is basically to arrive at sufficient knowledge 
and understanding to develop a program that will protect the 
Delta estuary. We didn't ask Lester to solve all of 
California's water problems. We asked him to see if he could 
lead us through the Delta dilemma.
    Mr. Pombo. Well, I understand that Mr. Potter. But I think 
any plan that does not look at developing new water--surface 
water resources for the future--is totally inadequate in 
protecting the Delta. Because every time someone needs water, 
they stick another straw in the Delta and they suck more water 
out of it. I grew up out in the Delta. I can tell you----
    Mr. Potter. Me, too.
    Mr. Pombo. [continuing] just as well as anybody here about 
the water quality problems that we have in the Delta today 
versus what we had 20 years ago. There's a big difference. A 
big part of that is that we keep sucking more and more and more 
water out of there and we're not developing any new water. One 
of my major concerns with this process is I believe that the 
development of new surface water resources has been given the 
short script in this development. We talk about all these 
wonderful things of retiring 1 million acres of land and 
creating these wetlands and doing all these things, but that's 
not going to be enough to deal with the future. That's not 
going to be enough to deal with the water quality problems that 
we have.
    Mr. Potter. I think CALFED has come to the same conclusion 
that you have. There is storage in all three of our major 
alternatives.
    Mr. Doolittle. Mr. Miller has an additional question, I 
understand. You're recognized for that purpose.
    Mr. Miller. Mr. Yardas, let me again--as I understand 
taking into account what the Governor and the Secretary--
correct me, Mr. Potter, if I--they announced to extend the 
comment period and then come up with a draft proposal--a second 
draft, obviously windowing out a lot of things that you've 
heard here back and forth from across the State. Then there 
would be an additional comment period--is that correct?
    Mr. Potter. That's correct. That's correct. I wasn't there 
yesterday. I was on an airplane trying to get here.
    Mr. Miller. Yes. Apparently, none of us were, so we're 
trying to figure out what that was. But if that's correct, Mr. 
Yardas, let me ask you this. At some point, you decide some 
approach to one of these three alternatives or probably a 
hybrid of one of them given the comments and everything that's 
learned in this process. But is there a point where we start to 
attach when you think about the financing and the preliminary 
discussions--I'm going to ask all three of you actually. Is 
there a point where we start to attach beneficiaries to 
particular projects in this thing? Or are they seen as, you 
know, as part of the whole? If you look at the enlargement, 
Millerton or Montgomery, possible expansion of Los Vacaros, and 
what happens with the islands in the Delta, for what purposes--
is that drinking water or is that agricultural water or what 
have you? Do we start to lock onto who the beneficiaries are 
here at some point? If you choose, beneficiaries pay or in 
combination with the public financing and then decide whether 
there's a go or no go--or do we just sort of attribute 
characteristics to these? Where's the apportionment? What's the 
financing committee thinking about this?
    Mr. Yardas. Well, again, it is difficult to draw bright 
lines between these various beneficiary groups. I mean, in some 
cases it's clear. If there's additional yield--I would say 
there is no new water to be had in the system but there may be 
additional yield to be developed--carried over from wet periods 
into dry periods. That will go someplace. That's pretty easy to 
track. On the other hand, water quality--a much more nebulous 
concept and much harder to figure out exactly what's going on. 
As you heard earlier, the ecosystem restoration program, there 
are water supply benefits very much involved in what's going on 
in implementation of that program right now. So, it's very 
difficult in most cases to define very clear lines.
    I think the focus of the Finance Work Group in recent 
months has been to try and get beyond both the assignment of 
blame and the strict definition or quantification of benefits 
into a kind of more proactive or forward-looking approach. The 
gist of that is that the common programs would receive 
partnership funding, but that storage and conveyance would be 
paid for by the users of those facilities. Now that would be 
the recommendation that we would have. I don't think the 
Finance Work Group is there yet, but that's the proposal that's 
kind of----
    Mr. Miller. But that's the process you sort of envision--is 
that close to the process that you envision how to----
    Dr. Quinn. Yes, that's why I'm pleased at how close it is 
to the process I'm envisioning. Some cost elements will be 
identifiable to a beneficiary. I don't think a lot of them 
will, but some of them will. Metropolitan recently financed an 
integrated resources plan where we're spending billions of 
dollars on a combination of investments, including reclamation, 
conservation, water marketing, and transportation and storage 
projects. What we found to be a successful approach--in some 
cases, there were clearly identifiable benefits which we just 
put right into our regular rate structure. You paid for it if 
you got the water delivered. In other cases, the way we 
approached it was to focus on what kind of a package will 
maximize the value for the region.
    In this case, we were thinking only of southern California. 
Here you're thinking of a much broader geographic area. Then we 
started going to our member agencies as constituents--pointing 
out the value that they would receive from increased 
reclamation in Central and West Basin. Part of the value is we 
could downsize our capital program. Everybody saved money if we 
could reduce expenditures on the capital program, and we 
eventually came up with the Local Resources Program where all 
the member agencies pay $250 an acre foot to those member 
agencies who are able to invest in local resources. In general, 
for much of the financing of the IPR, we did not attempt to 
draw lines from one specific piece to somebody that's going to 
benefit. Instead, we focused people on a package that would 
generate value, and then worked with them to make them 
understand they're getting value. And eventually, people would 
not want to argue so much over the pennies. They were willing 
to stand back and look at the broader picture, and we were able 
to get to a successful conclusion.
    I think something very much like that needs to happen 
here--to stand back and start focusing on a package that can 
create value for each of the interests throughout California. 
Where can you generate value and then start to generate 
interest and willingness to pay, which, of course, was the 
theme I tried to put in the Urban Coalition testimony I 
presented today.
    Mr. Miller. My time has run out, but there is a little bit 
of a difference in your answers there.
    Mr. Yardas. Well, I guess I would just say, though, where 
this will get difficult is in the notion that the environment 
needs new dams to get healthy, and we just don't agree with 
that. I don't know if that's part of what Tim was saying in 
code, or not. It's certainly part of the analysis that CALFED 
is doing, and we just don't believe that that's properly--that 
the environment needs it. Or, if there are so-called benefits 
ascribed to the environment, that those ought be financed by 
the public. Those are very much tied to water use and water 
development and ought to be properly financed by those who 
benefit directly from those facilities.
    Mr. Miller But under Tim's answer, you could have--you 
could ascribe those as benefits that the broader community 
leaves, it gets, and lay them off in that fashion.
    Dr. Quinn. Let me emphasize. I'm not trying to be opaque 
here. We believe, not only Metropolitan, but pretty broadly in 
the urban community, that the future lies in a combination of 
investments and new infrastructure, new system capacity, 
including both surface storage as well as ground water storage, 
as well as better allocation mechanisms through more effective 
water markets.
    We don't think the answer lies at either polar extreme. At 
one extreme, relying on zero percent storage and one hundred 
percent reallocation through the market. Or the other extreme, 
relying solely on new storage with no increased reliance on 
market forces. The urban coalition believes we need to start 
talking about what is the proper combination. Some of the 
storage that's on the table is off-stream storage that we 
believe could be very valuable to the environment as well as to 
the water users. It's not as cheap as the storage we were 
building 30 or 40 years ago, but it is relatively affordable. I 
mean, if somebody walked in my door and said I've got a deal 
for you--here's a block of several hundred thousand acre feet 
that's going to cost you $200 an acre foot for protection in 
dry years--I'm interested. And the fact is some of the storage 
that's on the table in the CALFED process meets those economic 
criteria. So, I stand back and I say, if you were designing the 
whole system yourself, what makes the most sense as an economic 
package? And I've changed my own views about storage. At one 
point, I was not interested in storage. I thought it would cost 
too much. The facts have changed my mind. It's very clear that 
storage has a legitimate place in this debate, and we think 
it's likely, in proper combination with the other elements, to 
make sense in an overall package.
    Mr. Miller. Thank you.
    Mr. Doolittle. So, Dr. Quinn, you would go for storage that 
produced water at $200 an acre foot?
    Dr. Quinn. I would certainly not throw somebody out who 
proposed a water supply at that cost.
    Mr. Doolittle. Well, there. That's what you just said. What 
are you hedging for?
    Dr. Quinn. Let me--let me--the answer----
    Mr. Doolittle. You just said you would go for storage. Are 
you standing by that statement or not?
    Dr. Quinn. The answer is yes.
    Mr. Miller. If you do, it's something he wants to sell you.
    [Laughter.]
    Mr. Doolittle. The problem is we don't have any to sell. We 
got to have it all for ourselves. But was it your testimony 
that you would go for a deal that offered you water at $200 an 
acre foot?
    Dr. Quinn. I believe that storage--environmentally sound 
storage that can make water available during dry times for $200 
an acre foot----
    Mr. Doolittle. Oh, no. I didn't hear all of that in that 
first statement. What do you mean environmentally sound 
storage?
    Dr. Quinn. Well, I mean storage----
    Mr. Doolittle. What's an example of environmentally unsound 
storage?
    Dr. Quinn. Well, can I turn that question around? An 
example of environmentally sound storage is storage that can 
survive the permitting process.
    Mr. Miller. Ah, you want to go through the dance?
    [Laughter.]
    Mr. Doolittle. Well, let's just leave it at that.
    [Laughter.]
    The figure of $200 an acre foot, you find, as did the 
Metropolitan Water District of Southern California, to be an 
attractive price. Is that right?
    Dr. Quinn. It's competitive.
    Mr. Miller. We ought not to--let's not make this a policy 
statement of the Met at this stage. But I think, if I might, 
Mr. Chairman, he was saying that if this--you say, yeah, you 
might be interested. There are people who would be interested 
in water at that rate if that could be done. You know. You show 
me that it's equal to----
    Dr. Quinn. Just for clarification, you can't throw storage 
out on purely economic grounds, because it costs too much. It 
does not. There may be other grounds for this project or that 
project, but it clearly can earn its way into a lease cost 
program from our perspective.
    Mr. Doolittle. OK.
    Mr. Pombo, would you like to ask some more questions. By 
the way, the first vote is at 5:30 p.m., and all votes are 
finished at 6 p.m. And we've got two more panels to go through. 
I'm just telling me that as well everybody else.
    Mr. Pombo. No further questions, Mr. Chairman.
    [Laughter.]
    Mr. Doolittle. You can ask one or two. That's all right.
    Mr. Miller. It's not that they weren't important.
    Mr. Doolittle. OK. Well, we will have those supplementary 
questions submit. I would like to thank the gentlemen on this 
panel, and we'll hold the record open for what we hope will be 
your prompt responses. And with that, we'll excuse you.
    I'm going to propose an ad hoc change here. We're going to 
ask panels two--three and four to come up together to form one 
panel of five people.
    OK, it's six people. In other words, all the members of 
panels three and four. Have we got them all there? OK, when you 
have got seats for everybody. All right. Sorry for that, but 
that will expedite your planes, for those who have them, and 
our needs here. Let me ask you. If you--let's see. We got 
everybody there? If you six gentlemen, there we go thank you. 
If you will raise right hands, please.
    [Witnesses sworn.]
    Thank you. Let the record reflect that each answered yes.
    We appreciate your coming, and for these two panels, I'll 
just review the questions and you can just answer the questions 
you are asked to answer. OK, here's for the third panel. How do 
you evaluate the effectiveness of the funding we are providing? 
One. Two, what clear and unambiguous performance standards are 
being adopted to determine if we are close to success or have 
achieved success? And three, are we going to postpone any major 
program decisions or alternatives until we have the results of 
the early phases, or are we going to agree on a basic blueprint 
and simply adjust it through adaptive management, as we move 
along? And then, the fourth panel had one question: Is the 
public given ample opportunity to participate in the CAL--
excuse me, two questions--CALFED process? And two, how have we 
institutionalized a process to ensure that local landowners are 
fully appraised of potential program impacts? Have we 
institutionalized a process to assure that local landowners are 
protected from government manipulation of property values as 
part of the habitat rehabilitation program?
    With that, let's begin with Mr. Lester Snow, executive 
director of the CALFED Bay-Delta Program.

STATEMENT OF LESTER SNOW, EXECUTIVE DIRECTOR, CALFED BAY-DELTA 
                            PROGRAM

    Mr. Snow. Thank you, Mr. Chairman, members of the 
Committee.
    My name is Lester Snow, executive director of the CALFED 
Bay-Delta Program, and my excitement to testify has grown 
considerably over the last couple panels, so----
    [Laughter.]
    I actually would like to start off with a couple clarifying 
points before I get to answering the specific questions because 
I think they're important issues.
    One, I want to make it very clear that none of the 
proposals contained in the CALFED draft that is on the street 
contains ag land fallowing for the purposes of demand 
management or generating water supply. We have identified a 
number of actions that have, as a consequence, ag land 
conversion for the purposes of habitat restoration, water 
quality improvement, levy improvement, and certain water supply 
related facilities, but not as a demand management tool.
    As a means of disclosure in our environmental document, we 
have estimated a maximum footprint, or a maximum impact 
associated with these activities; and that is approximately 
380,000 acres. I do not know where a number of 1,000,000 acres 
of ag land impact in the CALFED Program has originated. It is 
not in our documentation.
    Even with that maximum footprint, we are working with the 
communities and affected parties to avoid impact, reduce impact 
where it's unavoidable, and develop mitigation measures where 
you must proceed with some impact. But I must make it clear: We 
do not have ag land retirement as a water supply development 
strategy or a demand management strategy.
    The second issue that I think is important to clarify is if 
we define the mission of CALFED as getting everyone to agree on 
20- and 30-year projections, we will fail for two main reasons: 
all projections are wrong. Some are just worse than others. 
Getting all the parties to agree on 30-year calculations about 
California water issues is a lifelong career. It will not get 
us where we need to go. And where we need to go is developing a 
strategy that will allow us to manage a complex natural 
resource system in the face of uncertainty. If the issue was 
one of selecting the perfect computer model to project where we 
are going, we would not be here today.
    Rather, the challenge is developing a package of actions 
that address the diverse issues and that are tied together so 
that you can't build a subsidized reservoir and abandon 
conservation and reclamation. Or you can't restore ecosystem 
and levies, and let water supply reliability continue to 
deteriorate.
    The challenge is in tying the package together and not 
focusing on the single issues that have torn us apart in the 
past.
    In terms of beginning that effort, we are now proceeding 
with ecosystem restoration, which is the critical issue before 
us. The issue has been raised, how you monitor and how you 
proceed to judge whether you are making progress, and how if--
if you are making the right choices.
    The approach that we are taking in the CALFED Program is 
twofold, and I will make reference to the briefing document 
that we have provided you: the tab marked ``monitoring and 
performance standards'' and the last page which is a figure 
one, and shows the five levels of performance measures that 
we've identified in the program. We've divided those into 
project monitoring and ecosystem monitoring.
    In project monitoring, which is at the bottom of the page, 
there's basically two parts: implementation monitoring and 
effectiveness monitoring. As we begin spending money, we have 
implemented this stage of our monitoring program.
    Implementation monitoring is straightforward. Has the 
project done what it was supposed to do? If they were putting 
in a fish screen, did they actually do it on time and on 
budget?
    The second component of project monitoring is effectiveness 
monitoring? Did the fish screen allow the fish to pass? And in 
the example that we use move up Butte Creek to spawning in the 
number and at the time that's appropriate for salmon recovery?
    And then we move to the issue of ecosystem monitoring. How 
do each of these projects, whether it's coral dam or any 
habitat restoration project or other screening projects in the 
Sacramento system, how do they cumulatively affect the overall 
ecosystem? We are developing indicators of ecological health, 
and have developed some. They provide us perspective on 
performance standards for overall ecosystem which lead up to an 
overall goal. We have developed some specific indicators that 
tie into the specific projects, such as counting the number of 
returning spawning salmon, counting the number of out migrants 
that go back out to the ocean, and seeing how they relate to 
overall salmon population levels.
    Again, we have developed the project monitoring level that 
is being implemented on every single project that is awarded 
and moves out. We are developing the longer term program that 
will be able to provide us the assessment of the cumulative 
impact of each of these individuals projects in improving the 
overall health of the ecosystem.
    Thank you.
    [The prepared statement of Mr. Snow may be found at end of 
hearing.]
    Mr. Doolittle. Thank you.
    The next witness is Mr. Richard Golb, the executive 
director of the Northern California Water Association.
    Mr. Golb.

     STATEMENT OF RICHARD GOLB, NORTHERN CALIFORNIA WATER 
                          ASSOCIATION

    Mr. Golb. Mr. Chairman, thank you. Members of the 
Subcommittee, I appreciate the opportunity to testify this 
afternoon.
    I am Richard Golb, the executive director of the Northern 
California Water Association. In the interest of time, I'll 
summarize my remarks as briefly as a I can. I would appreciate 
the inclusion of my written testimony into the hearing record 
today.
    Mr. Doolittle. This is a full statement. It will be 
included.
    Mr. Golb. Thank you, Mr. Chairman.
    At the outset, I think the simplest way to assess the 
question of how can we determine whether CALFED has been 
effective or not in allocating funds to the ecosystem is to 
just look at CALFED's statement of goals, objectives and 
principles. In terms of the definition of the program itself, 
the goal is to improve the environment and, at the same time, 
decrease regulatory mandates on water supply operations and the 
water projects. And from a broad level, I think if we 
accomplish those two goals, we have achieved a measure of 
success.
    Now, on a more specific level, as Lester indicated, I think 
we can look at specific projects. For example, we can identify 
clearly established problems in the system, such as water 
diversions that harm threatened and endangered fish. If we 
identify those diversions that are harming fish species and we 
install a fish screen on that diversion, we've solved a problem 
in the system. And we've basically been effective in at least 
resolving one clearly identified problem.
    At this point, there are nearly a dozen water suppliers, 
agricultural water districts in the Sacramento Valley, that are 
engaged in the study, design, or construction stages of 
developing a fish screen or fish passage project. Several of 
these projects are now complete. For example, as Lester 
indicated, on Butte Creek, there's the Gary N. Brown Butte 
Creek Siphon Project, which Western Canal Water District just 
recently completed--an amazing project. The district completed 
the construction of a siphon to carry water supplies underneath 
Butte Creek, which allows spring-run salmon, now listed by the 
State of California and proposed for Federal listing, unimpeded 
access of Butte Creek. Just stop for a second and think about 
it. You have farmers that voluntarily participated in a cost 
share to remove several small dams. That's not happening in a 
lot of areas of the country, and I think that case clearly 
illustrates the benefits of these restoration projects and the 
effectiveness, in that we did we achieve restoration at the 
same time local farmers and the local community benefited 
through a more dependable, reliable water supply, which is a 
really a mutually compatible goal.
    Now, in response to the performance standards that Lester 
is now developing, we haven't had a chance to fully assess 
them. When we do, we'll probably have additional comment. But I 
think, as you indicated Mr. Chairman, developing performance 
and monitoring criteria is extraordinarily difficult on a 
complex and dynamic ecosystem like the California's Bay Delta. 
It's continually changing. And, at the same time, because it's 
not a static process, because it's dynamic, there are factors 
in the entire watershed that create difficulties for us to 
assess. For example, wildfires in the Sierra or the Shasta 
watershed, drought, such as the 1986 to 1992 drought, or the 
1997 floods, which was the worst flood in California history; 
and a flood that swept millions of juvenile salmon prematurely 
out to the Pacific Ocean.
    Those kinds of natural effects make it extraordinarily 
difficult for us to determine the type of standards we should 
apply on whether or not the program itself has been successful.
    An additional difficulty is that CALFED has ambitiously 
defined some of its projects as an attempt to replicate natural 
processes. The river meander is one. This project although, 
from a theoretical perspective, has great value, there are 
number of questions that arise from allowing the river to 
meander. You know, rivers are beautiful until they meander 
through your living room. And one of the things that we have to 
be very careful about is that the river meander projects are 
constructed in such a way that they're consistent with flood 
control protection.
    In conclusion, I would say that I think we can accomplish 
some of these projects--ecosystem restoration projects--but 
they have to be done carefully. We've recently encouraged 
CALFED to focus its efforts on solving known environmental 
problems, like fish screens. And, at the same time, when it 
come to dealing with projects like the river meander to be very 
careful and to consider the implementation of pilot projects so 
that we deal with them in the right way. We complete NEPA and 
CEQA certification process. We have representative processes 
for landowners to participate, because this thing necessarily 
will require land acquisition along the river. And finally, I 
would say that the best way to look at this is, if CALFED 
focuses on known problems and moves the unknown solutions to a 
longer process of evaluation, what we'll implement ultimately 
is more dollars up front for restoration projects that will 
produce more quantifiable benefits, which I think is our goal.
    So, in conclusion, we support the appropriation and would 
urge you to continue your focus on CALFED. It's been helpful 
throughout the process for all the stakeholders, ourselves 
included.
    [The prepared statement of Mr. Golb may be found at end of 
hearing.]
    Mr. Doolittle. Thank you. Our next witness is Mr. Gary 
Bobker, senior analyst with the Bay Institute, San Rafael, 
California.

          STATEMENT OF GARY BOBKER, THE BAY INSTITUTE

    Mr. Bobker. Thank you, Mr. Chairman, members of the 
Committee.
    Like Rich, I'll try to summarize my statement and ask that 
the written statement be incorporated in the record.
    Although I'm representing the Bay Institute here today. I 
also want to mention that I'm the co-chair of the Ecosystem 
Roundtable, and the perspective that I want to cover reflects 
work that I've been doing over the last few years in the 
Roundtable and other stakeholder processes to try and build 
greater consensus around ecosystem restoration and the broader 
water management planning process. And I think that what's 
amazing is the amount of success we've had in the extremely 
difficult and often adversarial process. We have to look at the 
relative amount of success, and I think it's impressive.
    I think it's important to remember that in looking at the 
Bay Delta and California's water-related environmental problems 
that we have changed, altered, and assaulted the California Bay 
Delta and the water environment to a scale that has really has 
been seen in very few places in the world. And, as a result, 
the program that we are now contemplating through the CALFED 
process to correct those problems--restore the estuary, reduce 
the conflicts--is on a scale never before attempted. And there 
is no connect the dots, Cliff notes approach here. There is no 
easy answer to this, which is one of the reasons why it's a 
technically challenging, complex task. And we're going to learn 
as we go along. We are going to make mistakes as we implement 
this program. And what we have to make sure is that we learn 
from those mistakes, which is why elevating the issue of having 
monitoring--adequate monitoring regimes and performance 
standards is an extremely important issue. The only way we're 
going to learn from our mistakes is if we have a sense of where 
we're going. And in adaptive management, which is the sort of 
learning as you go approach, I think there are four key 
elements there. One is you've got to have sense of where you're 
going, define success in a measurable way with goals and 
objectives and indicators.
    Secondly, have an implementation plan. Design a blueprint 
that you think, based on what you know now, will get you there.
    Third, monitor how you do.
    And then fourth, go back and revise your blueprint to get 
you back on course toward your objectives.
    What I want to touch on is how is the CALFED process 
dealing with that kind of mid-course correction approach, both 
in the near-term spending that's going on with the money that 
Congress has provided, as well as in the longer-term planning 
process.
    In the near-term spending process, the Roundtable--the 
stakeholders and the agencies involved in that process--
identified what we considered to be the most urgent priorities 
for near-term spending, and that was to protect those 
endangered species that are on the brink of extinction; to 
reduce the most volatile conflicts in the system; and to start 
learning from on the ground habitat restoration. And so we 
identified a list of high priority endangered species. We 
identified a list of those kinds of habitats that we think we 
want to start doing demonstration projects on, so we can learn 
from that on the ground implementation. And then we made sure 
that for each of the projects that we considered funding, there 
was a required monitoring process. And those monitoring regimes 
focus on the obvious things related to the priorities we set. 
How are endangered species populations fairing as a result of 
the projects that are being funded? How is on the ground 
restoration working? For instance, one of the projects that is 
to be funded this year is gravel replenishment on the Tuolumne 
and Stanislaus Rivers. The priority there was the need to 
increase spawning habitat for fall run Chinook salmon, which 
are in big trouble in the San Joaquin system. There's limited 
spawning opportunities, so we're going to put more gravel into 
the system. We're going to look at how it's spread out through 
the stream. We're going to look at how fish use those new 
gravel areas. We're going to have biologists splashing around 
in the streams, checking all this. And then we're going to go 
back and figure out how to improve the gravel replenishment 
program so that's more effective next year and the year after 
and the year after.
    We've also dramatically increased the funding available for 
a more comprehensive monitoring program, which is a cooperative 
effort of the Federal Government and the Interagency Ecological 
Program and the non-profit Estuary Institute.
    In the longer-term, an independent scientific review panel 
took a look at the CALFED process and said, ``you know, you 
could really stand to sharpen up some of these goals and 
objectives and indicators.'' As a result, most of the major 
stakeholders who are involved in the CALFED process have been 
working together over the last 6 to 8 months to try and 
identify a work plan for revising the ecosystem element, 
sharpening up these goals and objectives. And, in fact, I think 
we've made a lot of progress. We've also sponsored a number of 
technical workshops and conferences with the University of 
California to identify a comprehensive suite of ecological 
indicators--in other words, measures of success. I think there 
has been a lot of progress on that. There's a lot of work to be 
done, but I think we can say that we're well on the way toward 
a good set of indicators.
    Finally--the final point I want to make addresses the last 
question that you posed, Mr. Chairman, and that is about this 
sort of either or of--do you have a blueprint or you defer 
decisionmaking. What I want to say is I think that might be a 
false dichotomy--is that if you have a good blueprint, you make 
appropriate decisions now and you postpone inappropriate 
decisions. The example that I would give is that when it comes 
to restoring habitat, there's pretty much widespread scientific 
consensus that if you restore large blocks of habitat, that is 
going to really work better to conserve species than most other 
things. And so we need to go out and start doing it. We also 
know that exotic species really, really can damage the 
ecosystem, but we really don't have a very good idea of what to 
do about it. And so we're going to have to defer making 
decisions about how to deal with exotic species until we've 
done more research and monitoring.
    The one last point I want to make on that is that it's also 
important to defer making site-specific decisions about 
restoration. It's one thing to have a blueprint that sort of 
connects our plan from one county to another, from one 
watershed to another, but that plan is not the place to make 
decisions about your specific land acquisitions or fish 
management measures. That is something that is going to come in 
the more detailed planning process that's going to have to 
followup on CALFED.
    In conclusion, the opportunity that's represented here is 
an enormous one. It's an exciting one, and I think that we're 
all committed to trying to carry through the very complex task 
of rising to the occasion and fleshing out where we want to go. 
But we cannot defer implementing it until we have it all 
figured out. The only way we will figure it out is by learning 
as we go.
    Thank you.
    [The prepared statement of Mr. Bobker may be found at end 
of hearing.]
    Mr. Doolittle. Thank you.
    Our next witness is Dr. A. Alan Moghissi, president of the 
Institute for Regulatory Science, Columbia, Maryland.
    Dr. Moghissi.

    STATEMENT OF A. ALAN MOGHISSI, PRESIDENT, INSTITUTE FOR 
             REGULATORY SCIENCE, COLUMBIA, MARYLAND

    Dr. Moghissi. Thank you, Mr. Chairman.
    Thank you very much for inviting me to testify before this 
Committee.
    We in the scientific community are not used to be asked to 
express our voices. Normally, it's the politician or advocacy 
groups that appear before you. I certainly appreciate to give 
us a chance to speak on this very important subject.
    I'm Alan Moghissi, and I'm president, as you mentioned, of 
the Institute for Regulatory Science. We are dedicated to the 
idea that societal decisions must be based on best available 
scientific information. I was a little confused during this 
couple of hours about the word environment. I had been with the 
Environmental Protection Agency for 20 odd years and I have 
been a professor for some years. I was confused how the word 
environment is being used. The word environment, as we defined 
it, consist of people--humans--and other living things 
supported by the atmosphere, hydrosphere, and geosphere. So 
when somebody says this is for the environment, I wondered 
which part of the environment were they talking about.
    I've include my biographical summary to this statement, and 
I would appreciate if the entire statement would be made a part 
of the record.
    Mr. Doolittle. Yes, it will be.
    Dr. Moghissi. I am not an ecologist. My perspective is that 
of a research director who had to seek funds for ecological 
research; a funder who had to provide money for ecological 
research; and a scientific journal editor who has to accept or 
reject papers dealing with ecological activities.
    One of my most proudest time has been the sport of 
ecological risk assessment. The method that was developed as a 
result of funding that I provided at the time has become the 
standard method for ecological risk assessment.
    The CALFED program, and I'm going to use that word 
describing the entire project, can be separated into two parts: 
its goal--the societal objective; and the scientific part that 
supports that objective. So, there are three questions that 
need to be answered: How one knows the science is acceptable? 
What is ecological health and how is it defined? And what--how 
can ecological health be measured?
    The acceptability of scientific information is based on 
peer review. The information that was provided to me indicates 
that CALFED did not have a peer review program as its defined 
within the scientific community. Rather, it had a technical 
advise. Peer review implies that the person that in groups that 
are involved in the peer review that are having a stake in the 
project have no hand in the selection of reviewers and must 
formally respond to the recommendations of the reviewers.
    My statement includes a classification of the scientific 
information with decreasing level of acceptability, starting 
from confirmed science--the laws--all the way to pseudo-
science. Some people call it junk science.
    Now there is a consensus within the scientific community, 
and I believe CALFED agrees with that too, that there is new 
metrics for measuring the health of the ecosystem. You cannot 
go and make some measurements, say this ecosystem is healthy, 
the other one isn't. Therefore, one has to use ecological 
indicators, and I guess they are using that too.
    I'm surprised that one of the most powerful tools in the 
ecology, namely ecological risk assessment, does not appear to 
be a part of this program. This would be one method by which 
one could identify benefits of action one takes. And this is 
normally expressed by probabilities. How good is the chance 
that this species will survive? How good is that the quality of 
water can be improved?
    Instead of answering the question that was raised, and I 
would be--my statement includes answers to those, let me make 
several recommendations.
    First, CALFED should provide clear and objective measures 
to demonstrate the status of its success. The success of the 
program should be measured in terms of quantitative goals 
achieved as compared to the funds expended. It's very important 
to relate the goals to amount of money that you all are 
providing and that in the name of taxpayers.
    The entire program should separate science from societal 
objectives. The scientific aspects of the project should 
clearly and unambiguously avoid advocacy or the participation 
of advocacy groups. If scientists from advocacy group 
participate in that effort, they should do so as scientists and 
not as representatives of advocacy organization. They must 
follow the rules of the science, particularly the peer review.
    CALFED should try to use science described as--in my 
classification--should use higher class sciences. And if they 
use lower class sciences, they should understand the 
ramifications.
    Finally, they should set up a project to independently peer 
review the program, which I believe would benefit.
    Thank you.
    [The prepared statement of Dr. Moghissi may be found at end 
of hearing.]
    Mr. Doolittle. Thank you.
    Our next witness will be Mr. Dick Dickerson, president of 
the Regional Council of Rural Counties in Redding, California.

  STATEMENT OF DICK DICKERSON, PRESIDENT, REGIONAL COUNCIL OF 
              RURAL COUNTIES, REDDING, CALIFORNIA

    Mr. Dickerson. Yes, thank you, Mr. Chairman. And thank you 
for the opportunity to testify before the Committee.
    I am the president of RCRC. That's an organization of 27 
rural California counties. Our membership encompasses a broad 
geographic area, stretching from the shores of Mono Lake to the 
shores of Clear Lake, from the valley floor of Yosemite to the 
top Mount Shasta, and from the farmlands of Sacramento to the 
San Joaquin Valley and to the Sierra forests.
    Our members are located within the San Joaquin, Sacramento, 
and Trinity watersheds. Collectively, our members are the 
source areas for the San Francisco Bay Delta. It is from our 
membership that over 80 percent of the water for the Delta 
comes.
    The forests from within our membership area include the 
most significant snow pack areas in California. The water 
storage in these snow packs dwarfs the capacity of all of the 
reservoirs in the State. Snow melt during the spring and summer 
months is what keeps the Delta ecosystem alive. The health of 
the watersheds in our membership areas are, to a great extent, 
the early indicators of the health of the Deco's ecosystem--or 
the Delta ecosystem, not by any law of man or a map in a 
Federal office, but by the laws of Nature. Any successful Bay-
Delta solution will depend upon actions in our membership area 
to implement ecosystem restoration, watershed management, water 
transfers, new water storage, facilities, and existing storage 
re-operation.
    RCRC is represented in the CALFED process at three levels. 
Our water committee chairman, Mr. Meacher, from Plumas County, 
serves on the Bay-Delta Advisory Committee. Our water natural 
resource consultant, Mr. John Mills, serves on the Ecosystem 
Restoration Roundtable. Mr. Meachum, Mr. Mills and other RCRC 
elected officials and staff also participate in numerous BDAC 
work groups, such as ecosystem restoration, water transfers, 
assurances, and finance.
    The expectation of adequate public participation within 
CALFED is predicated on the ability of the public to understand 
the subject matter. To have the opportunity to meaningful their 
interests and concerns to those making decisions. And for those 
making the decisions to evaluate and to respond to public 
input. This is, when effective, an interactive and ongoing 
process.
    Mr. Chairman, the CALFED Bay-Delta Program, if completed, 
will be the most complex ecosystem restoration program ever 
carried out within the United States. It will affect the laws 
of tens of millions of Californians and the millions yet to 
come. It will cost billions of dollars and involve the use of 
significant portions of California land use area to achieve 
this success. This process should not only involve water 
managers and Federal State agency personnel, but also the 
general public, whose lives will be affected by the CALFED 
solution. The solution will be complex and should not--and 
should involve, to the greatest extent possible, as much public 
input as is practical. Notwithstanding the participation of 
RCRC that I have referenced, we believe that there are very--
two very serious problems with the CALFED public participation 
program.
    Mr. Chairman, it is our experience that the CALFED schedule 
is too short. It fails to allow for most the affected parties 
to even become acquainted with the information being presented, 
let alone provided meaningful input. While it is true that the 
process has been underway for over two years, it is only the 
past 6 months that clear projected features and components of a 
solution have been assembled in any understandable manner. It 
is only in the last two months that a draft environmental 
impact statement has been released for public review and 
comment. Unfortunately, during this time period--or this same 
time period, the California Department of Water Resources 
released their water plan update with an April 15 deadline for 
comment. The Bureau of Reclamation set April 17 deadline for 
comments on its own 5,000-page programmatic environmental 
impact statement. Most local governments were simply 
overwhelmed with the paper load. For the general public faced 
with earning a living, the invitation to participate in this 
process on that schedule was quite impossible.
    In addition, providing meaningful comments was further 
frustrated by the significant portions of CALFED solution 
packages being incomplete at this time. For while we know now 
what various alternatives are for the conveyance, there are 
missing pieces to the puzzle. For example, there is no 
assurance package. For our members, the issues of protections 
and guarantees of performance is of paramount importance. There 
is no water transfers package. Water transfers, while an 
important component of any CALFED solution, pose the most 
direct threat to our economies if not properly designed and 
implemented. There is no complete watershed strategy. At best, 
CALFED has put together a strategy on how to do a watershed 
strategy. The watershed restoration and management component of 
CALFED's solution is critically important to our members. There 
is no clear direction on any new surface storage. Without new 
storage of surface water, the chance of producing a CALFED 
solution that could be--not be--not negatively affect our 
members--is very slim. Therefore, we feel that we are being 
forced to comment on a an incomplete CALFED package in an 
unrealistic timeframe. We are not optimistic that our comments 
would have any influence on the process, given the lack of time 
for CALFED staff to evaluate and incorporate changes. We must 
underscore that we do not feel meaningful public input can be 
accommodated in the CALFED process given it is to be completed 
in the next 7 months. That is a schedule that sets up 
confrontation, not consensus.
    I'll skip through some of the testimony to get to some 
specifics in getting the participation of the public.
    The CALFED ecosystem restoration plan, for example, was a 
multi-volume plan to restore the environment of the Delta and 
it was mailed out to only 550 recipients. And that's according 
to CALFED's own mailing list. CALFED's choice of who the 
documents went to was also of concern. In one of our State 
senate districts in the Sacramento Valley, only two farm 
bureaus one of those 250-550 copies. No copies were received by 
the Women in Agriculture, or by any Chamber of Commerce. 
However, more than 25 copies went out to environment groups, 
such as the Sierra Club, the Nature Conservancy, and Restoring 
the Earth. Also on the A list of recipients were universities, 
which received 20 copies, in places as far away as Riverside. 
Federal and State agencies obtained over 40 copies. Those who 
stood to be most affected by the plan, those whose lands might 
have been retired or whose water rights might be acquired, or 
those whose land might be converted to habitat were left in the 
dark.
    Public frustration expressed to us, the local elected 
officials, was significant. They have asked us, and were are 
asking you, to help expand and improve the public participation 
process in a meaningful way.
    The CALFED program has seemingly expected rural California 
to supply the land, the water, job sacrifices to fix the Delta, 
without question in the manner of traditional top-down agency 
mandates. We believe that this much change. CALFED has 
scheduled its own document releases and review periods in 
apparent ignorance or oblivion to the actions being taken by 
other CALFED agencies. We believe that this must change.
    CALFED expects all California to step forward to help fix 
the DELTA when it is convenient for CALFED, in a location 
convenient for CALFED, in a manner convenient for CALFED, and 
we believe that this much change.
    Mr. Chairman, one of CALFED's own brochures read, 
``ultimately, it is the active participation of the entire 
public that will help fix the Bay Delta.'' And we believe that 
that should not change.
    Thank you.
    [The prepared statement of Mr. Dickerson may be found at 
end of hearing.]
    Mr. Doolittle. Thank you.
    Our final witness is Mr. Bill Gaines, director of 
governmental affairs for the California Waterfowl Association 
in Sacramento, California.
    Mr. Gaines.

   STATEMENT OF BILL GAINES, CALIFORNIA WATERFOWL ASSOCIATION

    Mr. Gaines. Good afternoon, Mr. Chairman and members of the 
Subcommittee. My name is Bill Gaines, and I am the Director of 
Government Affairs for the California Waterfowl Association.
    Thank you for the opportunity to come before you today to 
discuss the private sector's role in the CALFED Bay-Delta 
program.
    California has lost over 90 percent of its historical 
waterfowl habitat. Due to significant changes in our natural 
hydrology and the lack of true seasonal flows, the ability to 
provide high-quality wetland habitat today largely must be done 
through managed wetlands. In other words, wetlands which are 
artificially irrigated and intensely managed to create positive 
wetlands values and functions.
    The CALFED Bay-Delta program is a long-term effort to 
address ecosystem health, water quality, water supply 
reliability and levee system integrity in the Bay-Delta 
watershed. Because the restoration, enhancement, and 
maintenance of waterfowl habitat throughout much of this 
watershed also depends upon these areas of concern, properly 
implemented, the CALFED Bay-Delta Program represents a 
tremendous opportunity to address the needs of wintering and 
nesting waterfowl and other wetland dependent species.
    Today, I've been asked to provide our association's view 
regarding public participation in the CALFED Bay-Delta Program. 
As a 501(c)3 non-profit organization, representing nearly 
13,000 Bay-Delta stakeholders, the California Waterfowl 
Association also has a significant interest in the private 
sector's ability to contribute to the CALFED process.
    Let me begin to address this question with a statement 
that, although California's ``water wars'' and deteriorating 
ecosystem health are well chronicled, the CALFED Bay-Delta 
Program is far and away the most significant and positive 
multi-interest effort ever undertaken to address water and 
environmental concerns in California--or perhaps throughout the 
Nation.
    The sheer magnitude of this landscape effort results in 
unintended barriers and natural disincentives to public 
participation. At times, even those individuals or the 
representatives of agencies and organizations who are fortunate 
enough to be able to dedicate full-time to this sweeping 
effort, struggle to obtain a comprehensive grip on the program 
and its dynamic process. Clearly, providing for a program which 
offers ample public participation and opportunities, as well as 
real-time public awareness of its continual progress and 
potential impacts is, in itself, a tremendous challenge for the 
Bay-Delta program team. Irregardless of the stumbling blocks 
associated with assuring full stakeholder participation in such 
a mammoth program, the California Waterfowl Association 
believes the CALFED team has made every effort to design a 
process which facilitates and encourages important public 
input, as well as return real time information flow.
    Yes, our association, even as a member of the program's 
Ecosystem Restoration Roundtable and BDAC, has experienced 
times of serious frustration due to our inability to positively 
influence CALFED program decisions. But we don't contribute 
this frustration to a CALFED agency team set on implementing 
the program ``their way,'' but rather, to the tremendous 
difficulty associated with trying to address a myriad of Bay-
Delta concerns in a fashion which is palatable to each of the 
many stakeholder interests which must be served.
    The ability of the private sector to be heard in this 
process ranges from high profile role of formal committees 
established to provide direct advisory input to CALFED 
agencies, to hands-on workshops in small rural towns throughout 
the watershed, to other public outreach efforts which are 
enough to choke even the hardiest of mailboxes.
    As each of you is probably aware, CALFED agencies have 
tried to facilitate formal public input and interaction by 
establishing the Bay-Delta Advisory Council, or BDAC, a 
committee which is chartered under the Federal Advisory 
Committee Act and comprised of a variety of stakeholder 
interests, including California Waterfowl Association.
    In addition to BDAC, formal stakeholder interaction is also 
provided by the CALFED Ecosystem Roundtable, which is a roughly 
20 member BDAC subcommittee. In addition to the BDAC, and BDAC 
subcommittee, there's also 13 technical panels. And, in 
addition, an umbrella integration panel, which provides an 
opportunity for specialists, if you will, in various areas of 
stressed species, stressed habitats or regions, to help design 
program priorities, as well as rank, if you will, and evaluate 
the program projects which are offered for funding.
    One of the main concerns that the California Waterfowl 
Association has, however, is that, regardless of our ability to 
dedicate a fair amount of time to the program and our seat on 
the Bay-Delta Advisory Council as well as on the Ecosystem 
Roundtable, we have been relatively limited in our ability to 
fully address each of our concerns.
    Our association fully appreciates and supports the goal of 
the CALFED program to address water supply reliability and the 
importance of addressing the habitat needs of listed fish 
species in achieving this objective. Our ``managed wetlands'' 
will also benefit greatly from achieving this goal. Yet, if the 
program is to make a sincere effort to restore the integrity of 
the Bay-Delta ecosystem, it must also more fully consider the 
serious habitat needs of native wildlife. Most notably, 
wintering and nesting waterfowl, and other species which share 
their habitats.
    California's Central Valley, largely the same geographical 
area which is being addressed by the CALFED Ecosystem 
Restoration Program, is widely recognized as one of the most 
important waterfowl regions in North America. It provides 
wintering and nesting habitat for nearly a full \1/4\ of our 
continental waterfowl population. Yet, this area has suffered 
the significant loss of nearly 95 percent of its historical 
waterfowl habitat.
    In the mid 1980's, in response to serious reductions in 
North America waterfowl populations, the North American 
Waterfowl Management Plan was signed by the Federal Governments 
of Canada, the United States, and Mexico. This plan established 
broad waterfowl population goals and identified seven 
priorities areas on the North American continent in need of 
habitat restoration and enhancement. California's Central 
Valley was one of those initial seven priority areas.
    Two years later, in 1988, a habitat restoration program, in 
many ways like CALFED, was initiated to address North American 
Waterfowl Management Plan objectives in our Central Valley. 
This public-private conservation effort, known as the Central 
Valley Habitat Joint Venture, carefully established 
biologically based acreage objectives for the preservation, 
enhancement, restoration, and maintenance of waterfowl habitat 
throughout much of the CALFED project area. And, in your 
packet, I have provided you with a matrix of exactly what those 
habitat goals are.
    Recognizing the importance of private landowner support to 
the success of the joint venture to be able to obtain those 
goals, a serious effort was made to minimize the changes to 
existing land use necessary to meet waterfowl needs. As such, 
the quantity of acreage targeted for wetland restoration was 
somewhat limited, and heavy emphasis was placed upon leaving 
land in agricultural production and simply working with the 
landowner to increase it's wildlife values.
    The tremendous loss of Central Valley wetland habitat, as 
well as the critical importance of the region to migratory 
waterfowl, is well documented. Clearly, the CALFED program 
ecosystem restoration effort could, and should, play a 
significant role in this critical conservation effort. Yet, 
thus far, the best efforts of our association to elevate 
waterfowl and their habitats to a high priority of the CALFED 
program have been relatively unsuccessful.
    Congress has already recognized the importance of the 
migratory waterfowl resource through it's support of the North 
American Waterfowl Management Plan, and it's authorization and 
annual funding of the North American Wetlands Conservation 
Act--the North American Waterfowl Management's Plan Federal 
funding source.
    Today, I ask for your assistance in creating a CALFED 
program which not only helps to meet these waterfowl needs, but 
also facilitates greater landowner support by providing full 
Federal funding to the CALFED Ecosystem Restoration effort, and 
earmarking a reasonable portion of these dollars for projects 
which are entirely consistent with the accepted habitat 
objectives of the Central Valley Habitat Joint Venture.
    In conclusion, the California Waterfowl Association would 
like to state that it is highly committed to the CALFED program 
and it's process, and would like to applaud the CALFED team for 
what we believe is a more than reasonable effort to design a 
program which maximizes the role of the private sector in the 
decisionmaking process. We ask those who may disagree to 
consider the tremendous difficulty associated with obtaining 
complete public satisfaction with a program of this size and 
scope. We also ask Congress to help us fully realize the 
potential of the CALFED program to appropriately address the 
needs of our North American waterfowl population and other 
native plant and animal species who share their habitats.
    On behalf of the members of the California Waterfowl 
Association and waterfowl enthusiasts throughout the North 
American continent, I thank you for the opportunity to come 
before you today. Thank you.
    [The prepared statement of Mr. Gaines may be found at end 
of hearing.]
    Mr. Doolittle. Thank you. There's so much material here, 
it's hard to know where to begin. Mr. Snow, do you file your 
documents electronically?
    Mr. Snow. We have a web page, where I think we have most of 
our documents. I'm not familiar exactly which ones are on that 
web page, but a lot of our material can be downloaded from the 
web page.
    Mr. Doolittle. So would this--we happen to have this up 
here, and I was listening to Mr. Dickerson's testimony about 
coping with--reacting to all these multi-thousand page 
documents. And this is the--I guess--the one that's out right 
now for comment by CALFED. Would this be on a web site, do you 
think?
    Mr. Snow. That's what I don't know. There may be somebody 
here who knows for sure. I know we have the phase 2 report, 
which is a summary of everything that happened and is contained 
in that--that is definitely on our web site. It can be 
downloaded. I know we intended to get this on a web site. I 
can't verify without checking.
    Mr. Doolittle. OK. I just--we did that 2 or 3 years ago in 
the Congress. I think every document that is generated is 
generated electronically and it just seems like it would be so 
much easier, because as Mr. Dickerson observed, I'm sure you 
didn't want to print too many copies of these because of the 
volume of it. And yet, for the public to be able to 
participate, the Internet would offer a remarkable opportunity 
for people to gain access to it. And I guess--I think--you 
could have all your maps and everything included within that. 
Just a thought.
    Mr. Dickerson indicated that there's no clear direction on 
new surface storage, which is a criticism I share. And he 
indicates that without new storage of surface water, the 
chances of producing a CALFED solution that would not 
negatively affect our members is very slim. Could you comment 
on the surface storage component of CALFED.
    Mr. Snow. Certainly. As you know, we have developed three 
alternatives and we have evaluated each of the three 
alternatives with no additional storage and an additional 6 
million acre feet of storage. And, so we've evaluated each 
approach.
    It's no surprise that, in order to get additional yield 
water supply in the system, you must have additional storage. 
Modification and conveyance, making the ecosystem more 
resilient, while adding some certainty to operations, do not in 
fact generate additional water supply. So the only way you get 
additional water supply or additional yield in the system is by 
adding storage.
    And we have evaluated storage both north of the Delta, as 
well as south of the Delta. We believe from our analysis that 
an additional 6 million acre feet is just about the end of the 
spectrum in terms of reasonable investment, because of the 
yield curves, which are actually contained in the briefing 
document if you want to followup on this.
    Mr. Doolittle. So, you've done analyses of yields of 
different proposed projects?
    Mr. Snow. We've done it in a broad evaluation of adding 
storage within the system and how much water you can move into 
storage.
    Mr. Doolittle. How did the proposed Auburn Dam fare on your 
yield curve? Is it one that you considered?
    Mr. Snow. We evaluated Auburn Dam. I do not recall, off-
hand, how it did on the yield curve. New additional on-stream 
reservoirs do not fare well at all in our analysis. And, you 
will see in our planning document much more emphasis on off-
stream, groundwater banking, and consideration of expanding 
existing on-stream.
    Mr. Doolittle. Why don't they fare well?
    Mr. Snow. Well, it's because of the--we have identified 
four co-equal objectives in terms of the CALFED purpose. We 
have actually a fairly unusual purpose and needs statement. 
We've developed where we hold water supply reliability, water 
quality, levy stability, and ecosystem, as coequal objectives. 
And when we look at the sites that you have available for new 
on-stream, it does not pencil out as well as the opportunities 
that you create with on-stream--or, excuse me--with off-stream 
reservoir, groundwater storage, and raising existing 
reservoirs.
    Mr. Doolittle. So it's sort of by definition then, you 
adopt that on-stream storage is less desirable than other 
alternatives, because of the impact you feel it has on the 
ecosystem?
    Mr. Snow. It's not just ecosystem. It's also the issue of 
how you tie it into the system. What are the benefits you can 
get out of it, in terms of supplementing flows for fisheries 
purposes. I think it's important to draw a distinction here. 
From a technical standpoint, all potential reservoir sites, on-
stream or off-stream, are still on the table, because we have 
not finished 404 analysis to exclude them.
    However, I think it's important for me to stress that from 
our planning purposes, the examples that we included in here 
are a much more realistic expectation of what may be buildable 
out there in the system that meets the four objectives of the 
program.
    Mr. Doolittle. Well, I just can't imagine that a facility 
such as Auburn wouldn't pass your test. You heard Dr. Quinn say 
they'd be interested in water at $200 an acre foot and this 
would produce water at a $100 an acre foot. Not that we're 
willing to sell any of it to Southern California, but in case 
we were, it would be there.
    Mr. Snow. Yes, certainly cost would not be a lone 
consideration for us in evaluating whether it fits into the 
CALFED mix or not. I think the difference from the way Auburn 
has been discussed more historically, in terms of some specific 
water supply benefits and certainly flood control benefits, is 
different than the way CALFED is looking at storage 
modifications to fit into the broader program. And it's in that 
context that that reservoir, in particular, and new on-stream 
reservoirs, in general, do not hold up well in our analysis.
    Mr. Doolittle. You may not be able to do it today, but 
could you refer me to that part of your analysis where that's 
described.
    Mr. Snow. Sure, I'll try to develop or send you 
information.
    Mr. Doolittle. OK, and then probably, based on that, I'll 
have some further questions.
    They have now called a series of votes, it looks like. In 
the mean time, let's go to Mr. Miller.
    Mr. Miller. Thank you. I'll just have one question, and it 
may that this question has to be resolved in writing. But, 
Gary, I just wanted--is there a big inconsistency between your 
statement of sort of how your proceeding in CALFED and 
Professor Moghissi--between your two testimonies here?
    Mr. Bobker. No, actually, I think they're quite consistent. 
Some of the things that Dr. Moghissi referred to, the need for 
independent scientific review or the need for quantitative 
objectives--and these are things that not only the 
environmental community, but agricultural and urban 
stakeholders--involved in the process have been calling for. It 
took a little while to get, I think, an adequate response from 
the CALFED program, but the good news has been

that they have moved in the direction of bringing in scientific 
review and the initial stages of developing quantitative 
objectives.
    Mr. Miller. Let me ask you this. But the screen that you 
sort of describe about how you--when you look--at some of these 
ecosystem restoration programs--do we apply the same screen to 
facilities? Can we talk about--you talked about environmental 
risk assessment--it's kind of peer review?
    Mr. Bobker. Well, yes, I think it's fair to say that the 
level of quantitative analysis, of definition of success, and 
of independent scientific review, to which we've been holding 
the environmental restoration program accountable, has not been 
applied as rigorously to the other parts of the program.
    The Environmental Water Caucus has, in some of our 
communications with Mr. Snow and the program, identified that 
as a need. We really haven't--we're waiting to hear a little 
bit more about how it's going to be dealt with. But, there's 
clearly a need, I think, for independent scientific review of 
the water quality component, independent scientific review of 
some of the water efficiency elements. I could go on and on. I 
will provide the Committee with a longer list that we have 
supplied to them of some of those needs.
    Mr. Miller. Thank you. Our apologies that we're now coming 
up against these votes. But, Mr. Gaines, I want to thank you. 
You're description of being involved in this process probably 
should be mandated reading for all of us. But we hope that, as 
we move into this next phase, that we narrow some--so people 
aren't wearing so many hats and we can start to harden some of 
these consideration. But, it's great reading. Thank you.
    [Laughter.]
    I'm not sure it's a great experience.
    [Laughter.]
    Mr. Doolittle. I think at this point we're going to have to 
recess and come back after the vote. There are four votes. It 
will be half an hour before we make it back. I wish I had 
better news.
    Do any of you have to leave to make a plane?
    Mr. Bobker. Too late now.
    [Laughter.]
    Mr. Doolittle. All right. We'll get back as soon as we can.
    [Recess.]
    Mr. Doolittle. OK, thank you for your indulgence. I see it 
took even longer than I was expecting. Mr. Pombo is recognized 
for his questions.
    Mr. Pombo. Thank you, Mr. Chairman. I guess I'll start with 
Mr. Snow. Two different areas that I'd like to go in with you. 
We've discussed a lot of different things and you've heard all 
of the testimony so far.
    The first area I'd like to question you on is in terms of 
process. The concern has been raised about public participation 
in the process. The concern that I'm hearing from constituents 
and from others is that you have done an admirable job of 
pulling together what you consider the stakeholders and pulling 
those people in and trying to make them part of the process.
    I think that--and I understand you didn't attend the 
hearing in Walnut Grove--but, I think what that hearing 
represented was the general frustration, the lack of 
information that was available, the lack of information that 
has been distributed to those that are being impacted. I think 
it's fairly obvious that none of those people that attended 
that hearing, who live and work in the Delta, who's land and 
water will be directly impacted by whatever final decisions are 
made, are considered stakeholders in this process. At least, 
they feel that they have been excluded from this process.
    I think that's an old pattern that we have fallen into with 
CALFED, and, as I've told you before, I don't oppose the CALFED 
process. I think it's very important. But I think that one of 
the things that we've fallen into with this process is, that 
you look at the people who are on the panel that are considered 
stakeholders, and you don't have a lot of people who own 
property in the Delta or have water rights to the water that 
flows through the Delta that are included in the process.
    Would you like to respond to that?
    Mr. Snow. Sure. I think there's two points that everybody 
would agree with. And that is--and they seem contradictory, but 
I don't believe that they are--that the CALFED process has done 
more in terms of outreach than any other process has attempted. 
The number of meetings, the number of workshops, our outreach, 
has gone beyond that which has done for most projects like 
this.
    But at the same token though, I think there's agreement 
that we need to do more. Because of the magnitude of the 
potential impacts, we need to continue and even expand beyond 
the traditional stakeholders. And I think the Delta, in fact, 
is a good example of that, where we have, let's say, relied on 
the easier representatives--the traditional folks, an Alex 
Hildebrand or Pat McCarty, Jim and Sally Shanks, and Tom 
Zuckerman, and Dante Nomalini--those people that have provided 
us advice. We tried to reach out through the Delta Protection 
Commission and attend some of those meetings, and some of the 
rec board meetings.
    But, I think the point that you're making--as we move 
forward in this and start making clear decisions, we need to 
get down to the community level. To the level where people are 
actually impacted by land acquisition strategies. And I agree 
with that. And I think we're trying to, at this stage of a 
draft programmatic, to get clearer on where we're headed and 
what the issues are. We have to do more outreach, particularly 
in the communities that are to be impacted by these actions and 
the Delta is the best example of that.
    We've tried to listen to the different issues. I think 
they've been very articulate at a lot of meetings, including 
the Walnut Grove public hearing. There's a whole host of issues 
that they're concerned about. Land retirement is only one of 
them. They're concerned about isolated facilities. They're 
concerned about commitment to maintaining levies. They're 
concerned about getting ESA restrictions off their back, so 
they can maintain the levies. We're listening to those points 
and I think we need to do a better job of communicating that.
    Mr. Pombo. In terms of the Walnut Grove hearing, one of the 
most often shortcomings that I heard was that each person was 
allowed to make a statement for 3 minutes. Many of them were 
cutoff mid-sentence, when their 3 minutes were up. No questions 
were answered. Many people came there with questions and walked 
away with the same questions.
    I get the feeling that you're going through this process so 
that, at the end, we can say we had 17 hearings throughout 
California with the general public. And if all of the hearings 
are the same as this particular one was, you may end up with 17 
hearings with the general public, but you will end up with 
everyone who went to those 17 hearings walking away without one 
question being answered that they walked in with. And I think 
that something needs to change in the way you are conducting 
these hearings, so that people at least feel like they got some 
answers.
    Mr. Snow. There's two different--there's many different 
kinds of meetings, but there's basically two types that we're 
pursuing in CALFED. The one is the legal hearing process, which 
has very specific legal requirements on how we conduct 
ourselves. And the other is the open meeting with full exchange 
and dialog between the parties.
    We have even modified our hearings, so that we start a 
public meeting an hour before the formal hearing, that allows 
people who wish to come to actually meet with individuals in 
the program and discuss different issues and get answers to 
those questions. We also have been conducting--you know, in the 
past 2 years, over 350 community meetings and outreach efforts, 
whether it's a formal CALFED public meeting or a meeting 
cosponsored with a local reclamation district, where we have 
the full exchange.
    But we are conducting very formal public hearings to comply 
with law and case law to make sure that everybody has equal 
access and equal opportunity to provide comments into the 
official record.
    What I would propose in this case, is that if we need to 
hold a public meeting for the purpose of the dialogue, not the 
official hearing record, we'd be glad to do that. And we've 
done that.
    Mr. Pombo. I know, in my area, there's definitely a need 
for that. I don't know if in Riverside or some of the other 
areas where hearing's are proposed there is a need for that 
kind of hearing. But I do know that the people that I represent 
probably will be more impacted by whatever decision than 
anybody in the State in California, and they feel like they've 
been cut out of the process.
    Mr. Chairman, my time's expired. I have a number of other 
questions I would like to ask. But, I don't know exactly how 
you're going to handle the time.
    Mr. Doolittle. Well----
    Mr. Pombo. Mr. Miller said he would give me his time.
    [Laughter.]
    Mr. Doolittle. Go ahead. Proceed.
    Mr. Pombo. Second, in terms of process, and this takes off 
of something that Dr. Moghissi was talking about. I have a real 
concern about how we end up with a final product. I feel that 
there is definitely a lack of peer reviewed science that is 
being done at this point.
    And you may debate me on that, but from my perspective, 
there's a lack of honest science being done at this point in 
the process. I don't feel like you have gone to outside people 
who don't have a stake in this end product and said, is what we 
are doing accurate, scientifically. Does it hold up? I don't 
think that that's happening, one.
    Two, I have a list of proposed projects that I believe came 
from your office. These are not the projects that we are 
approving as part of the appropriations process. We're being 
asked for $143 million, and no congressional committee is 
having oversight hearings into approving these projects. To my 
knowledge, no committee and the State assembly or State senate 
is holding hearings into whether or not we should spend 
taxpayer money on these projects.
    What we are being asked to do is to approve a bulk amount 
of money to go to CALFED. Who is ultimately responsible if you 
waste money? Who is ultimately responsible if you put together 
something that is full of fraud and abuse, that benefits the 
people that are sitting on the board, who are participating in 
the process? Where is the taxpayer accountability for the end 
result? Who--and don't take this personally--but, who voted for 
you? Who put you in to make you king to decide where we spend 
taxpayer dollars?
    Mr. Snow. Let me start by saying that being king is grossly 
overrated, if that's what I am in this process.
    [Laughter.]
    Mr. Pombo. And I don't want your job. I'm just asking.
    Mr. Snow. Do you have any positions open?
    [Laughter.]
    That's an excellent question and let me start by saying we 
think we have put a process in place that guards against those 
types of abuses. We subject people on panels to conflict 
requirements, disclosure statements. We work our way through 
that, and certainly Gary Bobker and Rich can attest to what we 
require of even the advisory panel in terms of disclosure of 
interest and remote interest associated with any projects that 
may be coming forward.
    The answer your question--actually, in terms of where the 
responsibility lies--actually is in the same place as how did I 
get this job. And basically that is, I'm accountable to the 
secretary of Interior and to Governor Wilson through the 
secretary for resources for the State of California. And in 
terms of the two funding sources--two primary funding sources 
we are utilizing now in funding these projects--Proposition 204 
specifically puts the secretary for resources for the State of 
California as the fiduciary agent for those moneys. He must be 
responsible that they are expended in compliance with State law 
and all the provisions of conflict of interest, contract law, 
et cetera.
    On the Federal side, it is, of course, the secretary of 
Interior responsible for making sure that those moneys are 
expended in an efficient and effective fashion under Federal 
law. Now we have a very elaborate process set up to move 
projects forward through many levels of screening and review 
and peer review, before those lists move forward for their 
recommendations. But in terms of----
    Mr. Pombo. You say peer review, but you don't mean outside 
peer review.
    Mr. Snow. Well, I do mean----
    Mr. Pombo. It's within the group.
    Mr. Snow. [continuing] outside peer review in the sense 
it's not just agency folks reviewing it. When we have technical 
teams, for example, where they're evaluating the merits of 
screening projects to achieve the objectives on screening and 
fish passage problems, that includes technical experts from the 
agency, as well as stakeholder community. And so that is a 
broader based science review and it's not simply an agency 
deciding this is what we would like to do next year.
    Mr. Pombo. Dr. Moghissi, would you like to respond to that?
    Dr. Moghissi. I don't believe that qualifies for peer 
review. That is technical advise they are receiving. Peer 
review would imply that Mr. Snow or anybody else who is 
involved in it would have no hand in selection of the reviewers 
and he would have to respond formally to the recommendation of 
those.
    No--this problem has been around, particularly with the 
Federal Government, for a number of years and there is numerous 
reports from the General Accounting Office, from the National 
Research Council, which as you know, is the research arm of the 
National Academy of Sciences and National Academy of 
Engineering, and so on--there is a fairly broad--from American 
Association of Engineering Society, American Medical 
Association--there's a broad consensus of what constitutes peer 
review.
    That is a very worthy thing he's doing in which he 
basically determines the relevancy of the project, but this is 
not peer review.
    Mr. Pombo. Mr. Gaines, you and I have talked on innumerable 
occasions about waterfowl habitat protection throughout the 
Central Valley of California. One of the issues that you have 
brought up to me, in the past, was the value of farm land in 
providing waterfowl habitat. Would you like to share with the 
Committee the impact of the retirement of vast number of 
acreages in this particular area?
    Mr. Gaines. Sure. Let me reiterate a little bit of what was 
in my testimony earlier. The Central Valley Habitat Joint 
Venture, which, of course, is the public-private effort under 
the North American Waterfowl Management Plan, is implementing 
waterfowl conservation efforts in California--the Joint Venture 
is one of many, but that's one of the main bodies that's moving 
forward.
    When we pulled together our waterfowl population goals for 
California and the Pacific flyway, we started out with bird 
numbers, and we worked that down into what their energetic 
requirements would be, and then ultimately, what type of 
habitat changes we had to make on the ground. We knew that the 
best we could probably do would be to get possibly 300,000 to 
400,000 acres of true managed wetlands, or good wetlands, in 
the Central Valley. And somehow, some way, we were going to 
have to do something else, because even if that block of 
habitat--400,000-450,000--acres was managed to be the absolute 
best it could possibly be for waterfowl, it wasn't going to be 
enough.
    And so, what we did is we also established a goal that we 
call our agricultural enhancement goal, which is actually 
443,000 acres of ag land, Central Valley wide, that we want to 
see farmed, but farmed in a wildlife friendly manner.
    In the Delta, which is one of the areas where, of course, 
because of flood control projects and other changes in our 
natural hydrology, we've lost a whole bunch of naturally 
occurring wetland habitat, the corn fields, wheat fields, and 
other agricultural production that takes place in the Delta 
now, provides a real critical component, if you will, of that 
443,000 acre agricultural enhancement objective. Specifically 
in the Delta basin itself, the Central Valley Habitat Joint 
Venture has established a goal of annually enhancing about 
68,000 acres of farm land. And without that block of 68,000 
acres, whether it be winter corn or what have you, we'd be 
really in deep, deep trouble.
    One of the things that you hear about when you talk to 
folks about the CALFED Bay-Delta program is all these wonderful 
wetlands that are going to come about as a result of the 
program. Well, there's wetlands and there's wetlands. Tidal 
wetlands, for example, are what we would consider very marginal 
waterfowl habitat--great for fish, great for a lot of other 
species, not real good for ducks--but it depends upon the 
species of ducks, some species like them. But, by and large, 
the ones that are the most popular game bird, so to speak, in 
California, the mallard, pintail, teal, and so forth, tidal 
wetlands don't give them much, if anything.
    Seasonal flood plain, because we don't have the seasonal 
flows that we used to have anymore, we basically have seasonal 
flows only when we have no more carrying capacity in the dams 
and we've got to let some water go--provides very minimal 
waterfowl habitat as well.
    So, if we're going to get there--and we're going to get 
there in the Central Valley, and specifically in the Delta, 
because that really is ground zero for our waterfowl effort--we 
really need to maintain a serious block of agricultural land 
and we need to do the best we can to keep it as duck friendly 
and wildlife friendly as we can.
    Mr. Pombo. Mr. Snow, on the land that would be necessary to 
be retired under your plan, the amount--whatever that amount 
ends up being--do you intend on paying for it, or do you intend 
on just putting it on a map and leaving the restrictions on the 
use of that property?
    Mr. Snow. It's our intent that any land that's necessary is 
acquired in the marketplace.
    Mr. Pombo. Using your figures, it's somewhere between $1.5 
and $2 billion for the purchase of the land that you said was 
necessary. Do you--have you included that in the budget in the 
financing of this?
    Mr. Snow. I'm not sure how you're arriving at that number, 
but we would have those numbers accounted for in some fashion 
in our total cost estimates.
    Mr. Pombo. Do you think that the elected representatives 
that have a responsibility to the taxpayers should know that 
they are committing to a $1.5 to $2 billion land acquisition 
cost as part of this program?
    Mr. Snow. But I don't think that's the way to characterize 
this. When we show the cost----
    Mr. Pombo. You said you were going to pay for it.
    Mr. Snow. That's correct. But I guess the point I'm 
making--if you look at the numbers, you'll notice that we show 
as much as 35,000 acres of ag land conversion, primarily in the 
Delta region, as a product of stabilizing the levies. And we 
show those kinds of costs as part of the levy process.
    Mr. Pombo. But you would have to pay for that land.
    Mr. Snow. But it's part of the levy project. I guess that's 
my point. Some of the strategies of stabilizing levies is that 
you buildup on the interior side of the levy, and also to try 
to arrest subsidence. That strip of land around the levies that 
you're now having to manage in a different way to stabilize the 
levy has taken up some of the ag land, and----
    Mr. Pombo. You still have to pay for it.
    Mr. Snow. That's correct.
    Mr. Pombo. My point is--whether you take it for seasonal 
wetlands, or tidal wetlands, or you just leave it fallow, or 
whatever you decide to do with it--you still have to pay for 
it.
    Mr. Snow. Correct.
    Mr. Pombo. And, if it takes the 250,000 to 400,000 acres--
and I believe your figure was 380,000, that you testified to 
here today--it's between $1.5 and $2 billion in current market 
value. And that's considering that it's all farm land; and that 
there's no speculative value on that land as well; and that 
you're not taking out permanent crops; that you're not taking 
out home sites; that's just on straight farm land.
    That is a considerable amount of money that I don't believe 
is going to be in the budget in the very near future. And, once 
you adopt this plan, and you've set aside that land, at least 
on the map, you've impacted the value of somewhere between 
250,000 and 400,000 acres, depending upon what the final plan 
is.
    And I don't--I've got to tell you that I don't believe 
there's anyone in Congress that's going to stand up and tell 
you, honestly, that you're going to get that money. I have a 
real problem with doing that. I have a real problem with us 
going into this knowing that we're going to devalue several 
hundred thousand acres of land, and knowing that we can't pay 
for it, at least not in the near term.
    The final issue that I would like to go over with you deals 
with the water storage component of this. I do not believe that 
the documents--the draft documents--that we have sitting in 
front of us right now, adequately address the need for surface 
water in the future. I don't believe that it addresses the need 
for surface water for California. I don't believe it addresses 
the need for surface water to take care of water quality issues 
in the Delta.
    I believe that, with what you've included in here, you are 
guaranteeing that we will have that train wreck. And that train 
wreck will be these guys that are demanding water quality as 
part of this, and those that are demanding reliability on their 
water sources. And you're going to have to take water away from 
someone, because you're not going to provide the amount of 
water that's necessary to provide the water quality goals and 
the reliability goals that you've outlined for yourself--with 
the surface water provisions that you have included in this.
    I believe they are wholly inadequate to take care of your 
stated goals. It may avoid a fight on your committee--it may 
avoid a fight within the so-called stakeholders that are 
participating in the process right now, but when reality hits, 
and you've told these people that we're guaranteeing certain 
water quality and you've told these people we're guaranteeing 
certain reliability, in exchange for getting them to sign off 
on the whole program, the reality is, you don't have enough 
water to do it.
    And you're going to be back looking at trying to develop 
surface water in order to meet those goals. And going into this 
process, I think you have completely short shirted that part of 
the document. There may be a reason for doing it, but I think 
that, in the long run, you're going to be sorry that we did--or 
that we all will be sorry that we did.
    Thank you, Mr. Chairman.
    Mr. Doolittle. Well, thank you. I must say, I join in Mr. 
Pombo's sentiments. And I got to tell you, I'm not happy about 
a process that this favors surface water, and especially on-
stream surface water, especially like we've got--there's a 
possibility at Auburn. And I would be very interested in your 
material that you are going to send me on that point.
    You talked about levy stabilization, Mr. Snow. Is there any 
possibility that somehow the city and county of Sacramento or 
their flood control agency is going to qualify for CALFED 
moneys or prop 204 moneys to do it's levy enlarging project?
    Mr. Snow. The way we have defined the problem area and the 
way we have approached the levy program, or the component of 
CALFED, the levy program is focused on the legal Delta, 
continued out to Carcinas Straight. And that would not include 
the American River Levy.
    Mr. Doolittle. OK. Thank you. Ecological risk assessment 
was mentioned by Dr. Moghissi. Is that--and he indicated in his 
testimony that wasn't part of your analysis--do you concur in 
that?
    Mr. Snow. We have developed--well, maybe I should caveat 
this--maybe I'm not familiar with the precise definition of 
peer review as presented by the doctor here. However, we have 
initiated a process to bring in outsiders not associated with 
CALFED or it's members. We started it first with a science 
panel review of our program and one of their recommendations 
was to set up ongoing science review, which we have started 
working on with the stakeholders--to set up a long term process 
to ensure a science review.
    So, maybe I should use that term--that we have brought in 
independent science review, whether that fits the precise 
definition of peer review, as presented by Dr. Moghissi--I'm 
not familiar with that definition.
    Mr. Doolittle. But, I think the--and I was interested in 
the peer review too, but the ecological risk assessment, as I 
understood it, would enable you to, I guess, quantify what it's 
going to cost to achieve certain objectives and measure the 
biggest bang for the buck. Am I mis-characterizing it, Dr. 
Moghissi?
    Dr. Moghissi. Right.
    Mr. Doolittle. OK.
    Mr. Snow. So, I answered the wrong question, is that----
    Mr. Doolittle. Well, that's OK, because I was going to ask 
you that--that was my next one. So----
    Mr. Snow. That was the next one.
    Mr. Doolittle. That's all right.
    Mr. Snow. We have not done that type of analysis at this 
point in our programmatic evaluation. That type of risk 
assessment comes up in specific applications. The place where 
we are doing it now, is trying to get a risk assessment on the 
fish entrainment issue, which is a major issue in the Delta. 
The effect of the two large diversions in south Delta, and when 
you modify the pumping pattern and you modify the location of 
pumps, whether you add screens, we are attempting to get a 
handle on the percent benefit or probability of improving 
specifically, the endangered species in the Delta. And given 
different configurations and different patterns, what are the 
probability you can recover the species, which is the 
objective.
    So we're now introducing it on a specific issue like that. 
And I think the concept of being able to address the 
probabilities that actions will achieve the designed result, is 
something that comes along with our program as we get focused 
on a preferred alternative at a programmatic level and start 
moving to specific actions.
    Mr. Doolittle. I guess what I don't understand--I really 
don't mean to harp on this--but, it seems--I don't know how you 
could rank like you said, using your criteria, on-stream 
storage would not fare well. But I don't know--that seems odd 
to me--that ecological risk assessment wouldn't be part of that 
first tier. Because otherwise, things are going to fall off 
that may never get subjected to ecological risk assessment. And 
yet, that to me, is so fundamental, in terms of allocating 
scarce resources.
    Mr. Snow. Well, I can't answer that precise question in 
terms of risk assessment and how it applies to that. I mean, I 
think the issue that we've looked at with respect to storage is 
trying to overlap as many issues as we can.
    And so, for example, looking at the difference between on-
stream storage on the American River and a popular off-stream 
site that's often discussed, Seitz Reservoir in the Sacramento 
Valley. When you look at a Seitz Reservoir, you can do a lot of 
things with that, including make a joint investment to clean up 
the red bluff diversion structure, which is a problem with 
fisheries and a problem for ag users in the Sac Valley. And in 
doing that, you fix current problems with the Tahama Calusa 
Canal Diversion.
    At the same time, you prepare a diversion structure for an 
off-stream reservoir. Also, it gives you flexibility to provide 
water to the backside of some of the irrigation districts, 
thereby reducing their take off the river and further reducing 
fish entrainment problems.
    So, we'd look at those types of linkages and start building 
and compounding the joint benefits that we can get. And that's 
why I make the comment, in a general sense, that off-stream 
reservoirs, particularly, moved away from the system and the 
other problems--on-stream reservoirs don't provide the benefits 
that we've seen with some of these classic off-stream 
reservoirs.
    Mr. Doolittle. I guess the thing that I find strange is 
that you're one governmental entity--you're made up of a 
consortium of governmental entities--and yet, members of that 
consortium, like the Corps of Engineers, in the State of 
California, Department of Water Resources, have clearly stated 
in testimony, the only solution for the grave flood threat to 
the city and county of Sacramento that protects them, is an 
Auburn Dam. I mean, the Corps of Engineers has spent millions 
of dollars recently, coming up with that conclusion, and 
they're a member of your CALFED--are they not?
    Mr. Snow. Yes, they are.
    Mr. Doolittle. And the State of California Department of 
Water Resources is another entity involved with that. They've 
both come to that conclusion, and yet, CALFED, which is getting 
hundreds of millions of dollars in funding--State and Federal--
has developed criteria that puts blinders on itself. I mean, 
this just seems very, very strange to me--that something where 
we already have the need for flood control--I mean, why 
shouldn't that be, because of that other reality, shouldn't 
that be reflected in your consideration with reference to a 
project like Auburn?
    Mr. Snow. Well, I think it is a consideration and I can 
only surmise that if the CALFED objective was flood control, 
and was our No. 1 objective, and then we had incidental 
benefits from it, we might look at Auburn differently. I might 
also expect that if the Corps had the four coequal objectives 
that CALFED does, that they might look at Auburn differently. I 
do not know.
    Mr. Doolittle. But my point is--I understand that flood 
control isn't one of your objectives, but nevertheless, it's a 
key governmental purpose and yet you don't seem to add in that 
as part of your mix in the analysis. It's like it's just ruled 
out. And that seems--because since there is the flood control 
component, which moves toward an Auburn Dam, if you added to it 
your consideration of adding more high quality water to the 
system, those two could work synergistically. Instead, they're 
forced to remain in isolation from one another. That's the part 
that seems very strange to me.
    Mr. Snow. Well, we're not attempting to have them in 
isolation. And to make sure that I'm not misleading--we have 
not ruled out those options. I'm sure you're familiar with 
section 404 and the requirements you must go through and we 
must demonstrate that we have evaluated sites and screened 
sites properly, and they are all, as we speak, still on the 
table.
    Now, the point I'm making, so that I'm not misleading you 
or this Committee, is that in our planning efforts, as we try 
to put these pieces together, on-stream storage--new on-stream 
storage--does not stack up as well as putting this 
comprehensive package together, as some of the opportunities 
with off-stream storage does.
    Mr. Doolittle. OK. In the abstract, I can understand that. 
I may not agree with it, but I can understand it. But, I mean, 
this isn't the abstract. I guess that's my point. This is 
something that's a very real thing. There are efforts right now 
to figure out what to do about the problem in Sacramento. Could 
I at least ask of you that you will take a look at this and let 
me know what you think?
    Mr. Snow. Yes, I will.
    Mr. Doolittle. I can see it's different than if I were just 
asking you to build a dam in the American River, where flood 
control was not a great concern. But it is a great concern. 
It's a driving concern.
    Do you have further questions? Go ahead.
    Mr. Pombo. Just quickly, Mr. Chairman. Mr. Snow, are you 
coordinating the activity between the proposal under CALFED to 
buy land for retirement, the proposal under the Delta wetlands 
project, the proposal that BLM and Nature Conservancy have--
have you, at any point, sat down and looked at a map and 
started putting all of those different things together and 
looked at the impact that would have?
    Mr. Snow. We have attempted to make sure that our numbers 
are the total accumulative numbers of these activities, to make 
sure that, when we are expressing what we believe may be 
necessary to restore Delta smelt and salmon species and the 
kinds of habitats that are necessary, that those numbers are 
not additive to another HCP effort or BLM effort. So we believe 
that we have put the marker down for the totals. And, I believe 
that we've included in that the Delta wetlands project.
    Mr. Pombo. So your number includes the Delta wetlands?
    Mr. Snow. That's my recollection. I will have to check on 
that and get back to you.
    Mr. Pombo. If you could answer that for the record for me, 
I would appreciate that.
    Mr. Golb. Mr. Pombo, if I might add one point. One thing 
that we've encountered with the land acquisition and the 
conservation program CALFED has undertaken is as you know, the 
State of California and the Federal Government owns nearly half 
the State. And State agencies, such Caltrans and others, own a 
tremendous amount of acreage, some of it in small tracks, some 
of it in large tracks. One thing that we've only briefly talked 
with Lester about is the concept of trying to utilize public 
lands first, before we acquire private land. It just seems to 
make sense from a cost perspective.
    Mr. Pombo. Forty-nine percent is owned by the Federal 
Government; if you include State and local governments, you're 
up to about 56 percent.
    Mr. Golb. Well, it's a lot of land. Now some of it may not 
have the same ecological characteristics.
    Mr. Pombo. Five hundred sixty million acres.
    Mr. Golb. OK. They may not have the same characteristics 
that CALFED is considering. But from an efficiency standpoint, 
it may be worth looking at.
    Mr. Pombo. I would agree with you and that's something that 
this Committee has looked at in great detail--is the impact of 
the lands that are already owned by the public and this effort 
to take what--you know, less than half of California that's 
privately owned and make that public land as well. It has an 
impact on our cities, our counties, a huge impact on the 
economy of California. And I think everybody should realize 
just what an impact that would have.
    Mr. Doolittle. I did send you a letter, Mr. Snow, on the 
26th of March, asking for certain information. And you wrote 
back and indicated that CALFED anticipates that significant 
changes will occur to the hydraulic capacity, physical 
features, water quality, and ecosystems at Bay-Delta.
    What I was trying to get at--I mean, you recognize that you 
have some anticipation--I would like to know what are those 
significant changes and how will they be monitored? I mean, do 
you know what those are now, or is this something you simply 
believe there will be changes, but you don't know what they 
are?
    Mr. Snow. I don't recall the specific context that the 
sentence is in, but I think perhaps the context is simply in 
terms of the proposals--the three basic alternatives that we 
have--that would change the way the system functions. In terms 
of monitoring, there's two things.
    One, there is a fairly extensive monitoring system that has 
been in place for nearly 20 years, collecting data. And it's 
the data base that has served to indicate that there are 
endangered species and water quality trends. We are building on 
that data base with the work that has been referenced here 
today, in terms of developing additional indicators so that we 
have a better yardstick to measure the changes and the progress 
on overall ecosystem restoration.
    Mr. Doolittle. Well, let me do this. Let me just send you 
and give you a chance to clarify this in writing, if I may. 
I'll give you the background, the letter, and everything. But 
I'd like to get a more specific answer, if I can.
    Mr. Snow. OK.
    Mr. Doolittle. I'd like to thank all of you for appearing 
today. It's been a long day for you and you've been patient for 
us to vote here at the end. I think we've developed a lot of 
very interesting information at this hearing. We will, I'm 
sure, have further questions--we'll tender in writing and ask 
you to please respond expeditiously.
    With that, the hearing will be adjourned.
    [Whereupon, at 7:27 p.m., the Subcommittee adjourned 
subject to the call of the Chair.]
    [Additional material submitted for the record follows.]
 Response of Thomas M. Berliner, General Counsel, San Francisco Public 
  Utilities Commission to the ``Disclosure Requirements'' required by 
                       House Rule XI, Clause 2(g)

    1. Name: Thomas M. Berliner
    2. Business Address: City Attorney's Office, 1390 Market 
Street, Suite 250, San Francisco, CA 94102
    3. Business Phone: (415) 554-295
    4. Organization you are representing:
      The ``Bay-Delta Urban Coalition'' and the San Francisco 
Public Utilities Commission.
    5. Any training or educational certificates, diplomas or 
degrees which add to your qualifications to testify on our 
knowledge of the subject matter of the hearing:
      Doctor of Jurisprudence
    6. Any professional licenses or certification held which 
add to your qualification to testify on our knowledge of the 
subject matter of the hearing:
      Member, State Bar of California, District of Columbia 
Circuit, Ninth Circuit, United States Supreme Court.
    7. Any employment, occupation, ownership in a firm or 
business, or work related experience which relates to your 
qualifications to testify on or knowledge of the subject matter 
of the hearing:
         Nineteen years of legal practice on behalf of the City 
        and County of San Francisco, most of which has focused on 
        water, energy, natural resources.
         Represented the San Francisco Public Utilities 
        Commission before the State Water Resources Control Board, 
        Federal Energy Regulatory Commission, Department of the 
        Interior, and other regulatory agencies and legislative bodies 
        concerning water and energy matter.
         Active member of the Bay-Delta Urban Coalition, the 
        California Urban Water Agencies, and other industry 
        organizations.
    8. N/A
    9. N/A
    10. N/A
    11. N/A
                                 ______
                                 

    Statement of Bill Pauli, President, The California Farm Bureau 
                               Federation

    The California Farm Bureau Federation appreciates the 
opportunity to provide comments on the future water needs of 
California and the Cal-Fed process for a long-term Delta 
solution. On behalf of its more than 75,000 member families 
throughout California, Farm Bureau is committed to solutions 
that will assure a reliable and affordable water supply for all 
Californians.
    The California Department of Finance has projected that 
California's population will increase from the present 33 
million people to nearly 50 million people by the year 2020. 
These additional 17 million people will not only need new water 
supplies, but they will also need a safe and reliable food and 
fiber supply. And, with more people, California will 
increasingly appreciate the open space provided by the farms 
and ranches that grace California which account for more than 
$25 billion in direct revenues and generate $12 billion in 
exports.
    The Cal-Fed process provides an important opportunity for 
California to craft a collaborative plan that will satisfy a 
significant portion of the state's expected water demands for 
the next 30 years. Unfortunately, the Cal-Fed plan to date has 
fallen short of this goal. Most notably, Cal-Fed has been based 
largely on redirecting agriculture's two most fundamental 
resources--water and land--to satisfy other uses, rather than 
efforts to assure reliable and affordable supplies for farms, 
cities and fish. Even so, we remain cautiously optimistic that 
Cal-Fed can turn the corner and forge a plan that will benefit 
all of California, including its farmers and ranchers. To do 
this, we believe additional attention must be given to several 
key issues that will be critical to California in the 21st 
century, including increased surface water storage, minimizing 
the fallowing of agricultural land, and strengthening water 
rights.

Surface Water Storage

    The California Department of Water Resources estimates that 
of California's total water use in 1995, 46 percent was 
dedicated to the environment, 42 percent to agriculture, and 11 
percent to urban use. Additionally, millions of acre-feet of 
water flow out to the ocean above and beyond this water 
dedicated to the environment, farms and cities. Rather than 
redirect water from productive urban and agricultural uses, 
California must fully utilize and conserve water that now flows 
through streams to the ocean. By focusing on conserving 
outflow, California can minimize the risk of flooding, and save 
this water for other times, particularly for dry year use when 
cities, farms and fish need the water. The most effective way 
to conserve outflow is to to increase surface water storage in 
an environmentally sensitive manner. Increasing the capacity of 
existing reservoirs, such as Lake Shasta, Millerton Lakes, and 
Los Vaqueros are good examples of programs that can be used for 
the benefit of farms, cities and fish.

Agricultural Land Fallowing

    Cal-Fed and other governmental programs have proposed to 
fallow more than 250,000 acres of prime agricultural land 
holding senior water rights. The overall fallowed acreage could 
easily approach one million acres. Agricultural land in 
California is a resource of global significance that, as a 
matter of good public and social policy, should not be 
converted to any other use. We recognize that new conveyance 
systems and reservoirs will require a certain amount of 
agricultural land to be taken out of production. In these 
cases, landowners must be justly paid and given adequate notice 
and opportunity to assure that their property rights are fully 
protected. The fallowing of agricultural lands for levee 
setbacks, shallow water habitats and other environmental 
purposes should be a limited part of the Cal-Fed solution, due 
to the effects on local communities and government revenue. 
Instead, non-agricultural lands should be used for this 
purpose.

Water Rights

    Assurances and particularly the protection of agricultural 
water rights are the key to the ultimate Cal-Fed solution. In 
many cases, old promises must be fulfilled before new promises 
to protect rural areas will have any credence. California's 
farmers and ranchers depend upon well-established water rights 
to maintain their livelihoods and way of life. Cal-Fed must 
assure farmers and ranchers that both their surface and 
groundwater rights will not only be protected, but will in fact 
be enhanced and strengthened by the Cal-Fed process. Most 
notably, Cal-Fed and the individual agencies should abandon 
plans to use groundwater in areas feeding the Delta as the 
future source of urban and environmental supplies under the 
guise of a conjunctive use program. Area of origin rights must 
also be fully recognized and strengthened by Cal-Fed.

Federal Appropriations

    We cannot support the continued investment of public money 
in the Cal-Fed process as long as California's farmers and 
ranchers bear a disproportionate burden of a long-term Delta 
solution. Farm Bureau supported Proposition 204 as a down 
payment to secure major improvements in water management in the 
Sacramanto-San Joaquin Delta. Unfortunately, to date, both 
Proposition 204 and Federal appropriations have been used in 
large part to fallow agricultural land and set the stage to 
redirect agricultural water to other uses. This means that 
California agriculture is moving backward, not forward, as we 
have all been promised in the Cal-Fed process.
    We continue to support the need for a long term Delta plan, 
but we are losing confidence that the ultimate Cal-Fed solution 
will contain meaningful components, such as water storage, that 
will benefit farmers and ranchers in all parts of the state. We 
are also very concerned about Cal-Fed's proposal for large-
scale fallowing of our state's valuable farmland and the 
associated effects on rural communities. It is therefore 
impossible for us at this time to support a continuing Federal 
appropriation for Cal-Fed until we see marked improvements in 
the program to benefit California's farmers and ranchers.
    In closing, the California Farm Bureau Federation will 
submit detailed and constructive comments to the Programmatic 
EIS/EIR for the Cal-Fed program as well as the associated 
documents. We are optimistic that the Cal-Fed process will turn 
the corner and begin to focus on efforts that will benefit 
California's farmers and ranchers and will make significant 
strides toward satisfying California's water demand for the 
next 30 years. We look forward to working with you in this 
process.
                                ------                                


 Statement of Martha Davis, Board Member, Mono Lake Committee and the 
                         Sierra Nevada Alliance

    Good afternoon, Chairman Doolittle, and Subcommittee on 
Water and Power Resources. Thank you for your invitation to 
speak before you today.
    My name is Martha Davis. I have worked for over fourteen 
years on California water issues. For thirteen of those years, 
I was the executive director of the Mono Lake Committee, a 
17,000 member citizen's group dedicated to the protection of 
Mono Lake in the eastern Sierra. A major component of the 
Committee's work focused on helping the City of Los Angeles to 
develop local conservation and water recycling programs so that 
saving Mono Lake would not impact the San Francisco Bay Delta 
or the Colorado River. As a result of this experience, I have a 
working familiarity with the urban water needs of California 
and, in particular, those of Southern California.
    I stepped down from this position last year, but have 
continued to work on California water issues in various 
capacities. I currently serve as a member of the CALFED 
program's Bay Delta Advisory Committee (also known as BDAC) at 
the recommendation of Governor Wilson. In addition, I serve on 
the board of directors for the Mono Lake Committee, the Sierra 
Nevada Alliance and the Bay Institute of San Francisco.
    I strongly support the CALFED process for seeking a 
solution to California's complex water issues. It is a process 
that is profoundly reshaping the way in which the State is 
thinking about its water future.
    CALFED's task of laying out a blueprint for that future is 
far from complete. The draft CALFED program elements and 
environmental assessment documents have just recently been 
released for public comment. We are all sifting through 
thousands of pages of text and charts, trying to decipher if 
the assumptions and technical evaluations performed by CALFED 
are valid and whether the program elements contained in each 
alternative are adequate to ensure the best water future for 
California.
    My State is not the only potential beneficiary of the 
CALFED program. States from the Pacific Coast to the rocky 
mountains, along with Canada, Alaska and Mexico, will benefit 
from improved fisheries, enhancement of the habitats within the 
Pacific Flyway, and increased water availability which will 
come from better management of the California's water supplies.
    One of the major and potentially most troubling technical 
``gaps'' in the CALFED analysis is the assumptions it uses 
about ``how much'' water California used in 1995 and ``how much 
more'' California will need by the year 2020 to meet the 
State's future urban and agricultural water needs. CALFED 
embeds these core assumptions into the ``no action'' scenario. 
And it is this scenario which serves as the baseline in the 
environmental analysis against which both the impacts and the 
benefits of the proposed Bay-Delta programs and alternatives 
are measured.
    To estimate the 1995 and 2020 water needs, CALFED relied 
heavily upon the urban and agricultural water demand 
projections presented in the draft California Water Plan. 
Usually referred to as Bulletin 160-98, this document is 
prepared and updated by the State Department of Water Resources 
every five years.
    The most recent version of Bulletin 160 was only released 
for public review four months ago, and now the accuracy of the 
DWR projections are being questioned by many people in 
California. Pages upon pages of comments and concerns have been 
sent to DWR seeking clarification and correction of Bulletin 
160-98. Some have even called for an independent evaluation by 
outside experts. I have attached to my testimony examples of 
comments provided by several organizations.
    Bluntly, the concern is that DWR has greatly overstated the 
State's urban and agricultural demand projections and 
substantially underestimated the potential for urban and 
agricultural water conservation and opportunities to recycle 
water. If this is true and the assumptions are not corrected in 
the CALFED analysis, then facilities may be proposed for 
construction that may not be needed in the next two to three 
decades--if ever. Further, if the proposals proceed as drafted, 
taxpayers could be facing costs as high as $8 to $14 billion 
dollars--and it is assumed that the CALFED program can not go 
forward without significant new Federal funding.
    I have reviewed DWR's Bulletin 160-98 urban water demand 
projections and they do raise some troubling issues. Let me 
focus on the South Coast region as an example:

         B160-98 estimates that urban water usage in the South 
        Coast region was approximately 4.3 million acre-feet in 1995. 
        Yet the actual urban water usage for this region in 1995 was 
        about 3.5 million acre-feet. This means that for 1995--the 
        baseline year for the CALFED analysis--DWR overestimates urban 
        demand by almost one million acre feet--and this is for just 
        one of ten regions included in Bulletin 160-98. Inexplicably, 
        DWR chose to use estimates of water demand for 1995 rather than 
        the real data from 1995 that should have been readily available 
        at the time of the analysis.
         B160-98 assumes that few additional urban conservation 
        measures, above what is being done now, will be implemented in 
        the South Coast region by 2020. DWR's explanation for is that 
        the South Coast region has already ``achieved'' the goals set 
        by DWR for conservation and so more does not need to be done. 
        This assumption flatly contradicts the positions of the Los 
        Angeles Department of Water and Power and other water agencies 
        in the South Coast who are committed to continued 
        implementation of urban demand management programs. As a 
        result, B160-98 effectively overstates future water needs in 
        the South Coast region.
         B160-98 drops from the final water accounting a 
        substantial amount of water from its own estimates of the 
        potential savings that could be achieved through through these 
        measures. For example, DWR identifies over 500,000 acre-feet of 
        potential conservation for the South Coast region, but only 
        includes 90,000 acre-feet of this water in its final 2020 
        demand projections. Similarly, DWR identifies the potential to 
        develop over 800,000 acre-feet of new water supplies from 
        recycling and desalinization projects, but only ``counts'' 
        200,000 acre-feet in the final water balance. As a result, 
        demand management programs for the South Coast region appear to 
        be underestimated by at least one million acre feet for the 
        year 2020.
         B160-98 includes the assumption that the CALFED 
        program will be fully implemented by the year 2020, but then 
        uses this assumption to limit the potential contribution of 
        conservation and recycling measures in meeting California's 
        2020 water needs. Inexplicably, DWR incorporates into the 
        analysis its own idea of what the CALFED Bay Delta preferred 
        alternative is likely to be, (even though one has yet to be 
        selected) but fails to provide a description of what this 
        alternative is. Further, DWR assumes that the CALFED program, 
        along with other options, will provide more water to the South 
        Coast at less cost than many conservation and recycling 
        projects.
         Finally, B160-98 assumes that there will be no 
        technological improvements in water efficiency programs in the 
        South Coast region over the next twenty years. This is 
        assumption is inconsistent with our experience over just the 
        last five years where major improvements in urban conservation 
        technology have been coming on line every year. To underscore 
        the point, it is hard to believe that just ten years ago, the 
        Las Virgenes Municipal Water District in the South Coast region 
        had to import low flow toilets from Sweden for its conservation 
        program because none were produced in the United States. Today, 
        low flow toilets are federally required and manufactured by all 
        major plumbing suppliers in the country.
    These are examples of some of the problems with B160-98. But the 
concerns that have been expressed by others go far beyond these points, 
and include criticism of the economic assumptions incorporated in B160-
98, its planning methodology, and DWR's use of outdated technical 
assumptions in evaluating water efficiency programs.
    The bottom line is that B160-98 appears to present in part a 
distorted and inaccurate picture of both current and future California 
urbanwater needs. It does this by artificially inflating urban demand 
figures for 1995 and 2020 and, paradoxically, minimizing the water 
efficiency measures that could help to meet projected State water 
needs.
    Prior to 1990, many people were not familiar with water efficiency 
programs and were understandably skeptical about how reliably these 
programs could meet growing population needs. But the world has changed 
substantially since 1990, and most regions of the State have gone 
beyond talking about water efficiency programs and started implementing 
them.
    The results are impressive. Let me give you three quick examples of 
success stories:

          1. The City of Los Angeles. In the 1970's, Los Angeles used 
        approximately the same amount of water as it is using today--
        only we are now serving almost 1 million more people. How did 
        we do it? As recently as 1990, LA declared that it needed every 
        drop of water from Mono Lake to meet the city's growing water 
        needs. Since then, with support from title 16 Federal funds and 
        AB 444 State monies, Los Angeles has invested millions of 
        dollars in the distribution of hundreds of thousands of ultra 
        low flow toilets and the development of other water efficiency 
        programs. In addition, Los Angeles agreed to dramatically 
        reduce its diversions from the eastern Sierra, and plans to 
        meet its future growth through local conservation and recycling 
        programs.
          2. The Metropolitan Water District of Southern California. 
        MWD and its member agencies have experienced similar success 
        with their conservation programs. At the peak of the drought, 
        MWD sold 2.6 million acre feet in imported water supplies 
        (calendar year 1990). Since then, MWD developed its integrated 
        resources plan, refocused its efforts on developing a more 
        balanced mixture of local and imported water supplies, and 
        helped the region to start to aggressively implement 
        conservation, recycling and groundwater management projects. 
        The result: MWD has reduced its imported water sales down--
        somewhat to its dismay--to 1.8 million acre-feet. This year is 
        wet and MWD's imported water sales are likely to be even 
        lower--possibly below 1.6 million acre feet. This dramatic 
        reduction in MWD imported water sales means that Southern 
        California using currently using only about 25 percent of its 2 
        million acre-feet contractural State Water Project supplies.
          The South Coast region, through MWD and its member agencies, 
        has taken a leadership role in the State on urban conservation. 
        It is a model for other parts of California to follow. Now, the 
        primary challenge facing MWD is to stay on this successful 
        path. There are already signs that MWD is beginning to pull 
        back on its current conservation commitments, paradoxically 
        because the water is not seen as now being needed.
          3. Panoche Water District. Urban water agencies are not only 
        ones that are making substantial investments in improved water 
        management. I recently visited Panoche Water District, which is 
        located on the west side of the San Joaquin Valley and is part 
        of the San Luis Unit of the Central Valley Project, to see the 
        fine work they are doing in their drainage reduction program. 
        In less than two years, the district has eliminated tail water 
        flows, installed water efficiency irrigation systems and 
        substantially modified its water management practices. The 
        result: the district has reduced its drainage by 50 percent 
        from dry year flows and is saving applied water. The program is 
        impressive, demonstrating how valuable water efficiency 
        measures can be to the agricultural community.
    In closing, I want to underscore the obvious point: we all need to 
have good quality information about California's current and future 
water needs if we are to make the right decisions for California's 
water future. B160-98 does not appear to meet this test.
    Too much is at stake, here in California and throughout the West, 
to accept less than an accurate, well documented presentation of the 
State's water demands. We, in California, need this quality information 
in order to assess and identify the right combination of measures to 
include in the proposed CALFED program. The mountain counties need it, 
Southern California needs it, Northern California needs it, the farmers 
in the Sacramento River Valley need it, the commercial and sport 
fisherman need it, the farmers on the east and west side of the San 
Joaquin Valley need it, the environmental community needs it, the 
business community needs it, the delta farmers need it, and the 
affected land owners need it.
    Congress, too, needs this information in order to decide what level 
of Federal funding for future CALFED programs may be appropriate.
    The potential implications for the CALFED program are profound. The 
assumptions of B160-98 are embedded in the analytical framework of the 
environmental documents. B160-98 must be critically evaluated so that, 
if needed, the CALFED technical evaluations can be redone. Only then 
will we be able to draw a conclusion about what is the best water 
alternative for California's future.
                                 ______
                                 

   Statement of Stephen K. Hall, Executive Director, Association of 
                    California Water Agencies (ACWA)

    Mr. Chairman and Members of the Subcommittee, thank you for 
providing me an opportunity to appear before you today and 
submit this statement regarding CalFed's progress. I am the 
Executive Director of the Association of California Water 
Agencies (ACWA). As you likely know, ACWA is a statewide, non-
profit association which represents more than 440 public water 
agencies who collectively manage and deliver 90 percent of 
California's urban and agricultural water.
    California's water resources are finite, while its 
population and economy continue to grow. At last week's ACWA 
Spring Conference, Governor Pete Wilson announced that 
California grew by an additional 580,000 people last year; 
putting our population at 33,250,000. The State is projected to 
continue this growth spurt, which is why the Department of 
Water Resources recently projected a 3 to 7 million acre-foot 
annual shortfall in water supply by 2020.
    No single demand side management or water supply 
development option can be implemented to address that pending 
shortfall and the attendant reliability concerns facing all 
stakeholders. Water conservation alone cannot address the 
shortfall, water reuse alone cannot, new dams and reservoirs 
cannot, water transfers cannot. Parties can quibble about the 
details, but the bottom line is that in the very near future we 
are going to have too many demands on a system already 
stretched to the limit, and it will take a package of measures 
to fix the problem. That is why ACWA is participating in and 
strongly supports CalFed and its approach, which calls for a 
balanced package of additional storage, improved Delta 
conveyance, water conservation, reclamation transfers, 
environmental restoration and other measures. Clearly though, 
additional storage has to be among the elements that has high 
priority.
    Our current system includes key projects like the Federal 
Central Valley Project (CVP) and California's State Water 
Project (SWP). The CVP has a storage capacity of 11 million 
acre-feet and delivers about 7 million acre-feet of water to 
agricultural and urban uses. The SWP delivers about 2 million 
acre-feet annually to farms and cities. The single most 
important aspect of California's complicated water system is 
the Sacramento-San Joaquin River Delta. Its channels through 
the state and Federal projects provide drinking water for two-
thirds of the state, in addition to irrigation water for more 
than 4.5 million acres of the nation's most productive 
farmland.
    This is an impressive system, but it is far less than what 
we see on other river systems. According to the California 
Department of Water Resources, total storage on the Sacramento 
River system with average annual runoff of 22 million acre-feet 
is less than one-year, or 16 million acre-feet. In comparison, 
the Colorado River system, with an average annual runoff of 
only 15 million acre feet, boasts a storage capacity of 60 
million acre-feet, or enough for a four-year supply.
    The lack of storage capacity has led to the tension between 
operating the system for flood control, the protection of life 
and property, and operating the system for water supply to meet 
the needs of the nation's largest economy. And the problem is 
growing worse. Since the last major element of our water 
management system was added in the early 1970s, the state's 
population has essentially doubled. Local water managers have 
done a good job in balancing this tension. Urban water managers 
have managed to meet the needs of the rapidly growing 
population through conservation, reclamation, and innovative 
water transfers and exchanges. Meanwhile, California 
agriculture is today producing 50 percent more in food and 
fiber with the same amount of water that it was using 20 years 
ago. We are also doing a better job of protecting lives and 
property. The floods that have occurred in recent years could 
have been far more devastating had it not been for strong 
efforts to coordinate the local, state, and Federal flood 
control operations. This remarkable record is testimony to the 
strides California's water professionals have made in managing 
the state's most important resource.
    We can do more in the way of water management, and we will; 
however, the experience of 1997 has shown the deficiencies in 
our system that not even innovative management can overcome. 
The devastating floods of January 1997, followed by water 
delivery cutbacks later in the year, point out that our 
existing system must be improved and expanded in order to 
protect California from floods while maintaining a healthy 
environment and a strong economy.
    That is why the California water community is strongly 
supporting a major water bond issue supported by Governor 
Wilson and carried by the two chairmen of the water committees 
in the state legislature. The bond issue will provide badly 
needed funds to study specific storage proposals, focusing on 
conjunctive use and off-stream storage. It will also provide 
funds that are way overdue for additional flood control. It 
will provide funds for investments in safer drinking water, 
source water protection, and water conservation. In summary, 
this bond issue promises to give us a running start on some of 
the most important elements of the CalFed program.
    Some may say it is premature to discuss storage at this 
point in the process because specific storage projects have not 
yet been selected by CalFed. However, those same people argued 
strongly two years ago that ecosystem improvements needed 
immediate funding, even though there were no specific ecosystem 
proposals at the time. Nevertheless, that funding was made 
available through a statewide bond issue and matching federally 
authorized funds. Now, it is time to move forward on water 
supply and water quality measures, which are equal in 
importance to ecosystem restoration.
    Another issue raised by critics of this bond measure is 
that a general bond measure that pays even for studying storage 
constitutes a subsidy to water users. The argument has already 
been addressed, since the bond issue provides that the 
beneficiaries will pay the full cost of any water supply that 
is ultimately generated. It should be noted that storage has 
public benefits and therefore should be--in part--paid with 
public funds.
    The conclusion we have drawn is that we must move forward 
soon on improvements in water supply and water quality, and 
that this bond measure provides an excellent opportunity to 
begin that forward movement. If we fail to act now, it will be 
two years before we can bring another bond measure before the 
voters, and that will put us two years farther behind in 
meeting our needs. We believe Californians should have the 
opportunity now to tell water managers and policy makers 
whether they support public investment in promoting improved 
water supply and quality.
    Virtually all parties agree that CalFed is an historic 
opportunity to address critical water problems in the state, 
both for the environment and our quality of life. In order for 
CalFed to deliver on that promise, it has to produce a balanced 
plan that truly provides for California's present and future 
needs. That will mean the plan has to contain all of the 
elements listed in the opening paragraphs of this testimony. 
Every credible projection of California's water demands and 
supply show this to be the case.
    In decades past, California met its water needs by simply 
adding more storage or conveyance. For the past three decades, 
we have focused on managing demand to stretch existing 
supplies. Now, maybe we can strike a balance between the two, 
and address them in tandem rather than to the exclusion of one 
or the other. CalFed is the vehicle to strike this balance. The 
current water bond issue is an excellent way to fuel that 
vehicle. We support both and we are urging others to do the 
same.
                                ------                                

  Statement of Robert G. Potter, Chief Deputy Director, Department of 
                            Water Resources
INTRODUCTION

    Mr. Chairman and members of the Subcommittee, thank you for 
providing me an opportunity to submit this statement regarding 
financing the CALFED Bay-Delta Program. My name is Bob Potter. I am the 
Chief Deputy Director for the California Department of Water Resources. 
The Department of Water Resources operates and maintains the State 
Water Project and prepares and updates the California Water Plan. I 
represent the Department on the CALFED Policy Group.
    It's too soon to get too specific about financing the CALFED 
program given that we haven't yet identified a preferred alternative, 
much less gained agreement to proceed on implementation. Nevertheless, 
there are a number of factors and principles that should be considered 
as we prepare for implementation.

BACKGROUND FACTORS

         The Central Valley Improvement Act of 1992 took 
        800,000 af of CVP yield away from CVP farms and cities and 
        allocated it to the environment.
         The Delta Accord of 1994 took 1,000,000 af of combined 
        CVP/SWP yield away from California cities and farms and farmers 
        and allocated it to the environment.
         Thus far, there has been no compensation provided to 
        ag and urban water users for these reallocations.
         At this point in time there is no clear picture of how 
        much water supply will be provided by the CALFED program or how 
        those supplies will be allocated.

SOME PRINCIPLES

         There is support for the concept of user pays. There 
        is also support for the concept of beneficiary pays. Generally 
        in California we all use water and we all benefit from our 
        states healthy economy which is supported in no small part by 
        reliable water supplies provided by State and Federal water 
        development programs.
         Many years ago when I was just beginning my career in 
        water the U.S. Senate published its famous ``greenbook'' which 
        provided detailed procedures for allocating costs in 
        recognition of beneficiaries gains. Water planners struggled 
        mightily over the years to implement these procedures. Given 
        the complexity of the CALFED package sorting out the 
        beneficiaries will prove to be a real challenge.
         Generally speaking on public policy we return to 
        equity not economics in arriving at who pays.

CLOSING

    The State of California has been and remains committed to the 
CALFED process. The Governor supported Proposition 204 which provided 
nearly $400 million for CALFED environmental programs. The Governor has 
proposed an additional water Bond measure for this fall. This Bond 
measure would provide additional ``seed money'' to finance the first 
phase interim CALFED programs. It would appear that there will 
eventually need to be a larger Bond measure to finance some or all of 
the roughly $10 billion CALFED package.

           Letter from Hon. Pete Wilson, Governor, California
                                                        May 4, 1998
The Honorable Joseph M. McDade,
Chairman, Subcommittee on Energy and Water Development,
Committee on Appropriations,
U.S. House of Representatives,
Washington, DC 20515
    Dear Mr. Chairman:
    I would like to take this opportunity to share with you 
California's priorities among the programs funded through the energy 
and water development appropriations bill.
    My top priority continues to be 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 I appreciate the 
$85 million provided for this program by Congress in fiscal year 1998. 
We will spend that money wisely and expeditiously. The watershed 
feeding the Bay-Delta is the source of nearly half the nation's fruits 
and vegetables, as well as drinking water for 22 million Californians. 
Environmentalists, farmers, and urban water users have all banded 
together with numerous state and Federal agencies in an unprecedented 
coalition to find a non-litigious solution to the water disagreements 
that have long plagued our state.
    I have a number of other priorities funded through your bill that I 
encourage you to support:

        Corps of Engineers

         a $49 million increase to the $11 million budget 
        request for the Los Angeles County Drainage Area Project. This 
        authorized project is exceedingly well justified from an 
        economic perspective, and is vital to protect lives in this 
        burgeoning area of the country. The small amount requested in 
        the budget would significantly delay completion of the project 
        and pose unacceptable risks to public safety. Non-Federal 
        sources will contribute 25 percent of the cost of the project.
         a $56 million increase to the $20 million requested 
        for the Santa Ana River Mainstem project, for continued 
        construction at Seven Oaks dam, work on the Santa Ana River, 
        and beginning construction of Prado Dam. Three million people 
        live in the area that will be protected by this project, where 
        a major flood could cause $15 billion in damages and threaten 
        countless lives. Non-Federal sources will contribute 35 percent 
        of the cost of the project.
         a $4 million increase to the budget request for the 
        Corps of Engineers, under section 206 of the Water Resources 
        Development Act of 1996, as the Federal half of the costs of 
        completing the environmental restoration at the abandoned Penn 
        Mine in Calaveras County, California.
         a $500,000 increase to the budget request for the 
        Corps of Engineers as a Federal contribution to cooperative 
        efforts with California local governments to control the 
        invasive non-native plant arundo. Arundo is a giant reed that 
        is established in the San Gabriel River watershed and is 
        rapidly invading the Santa Ana River watershed. It destroys 
        native fish and wildlife habitat, consumes great quantities of 
        water, and clogs water channels to the point where flood damage 
        is greatly increased. Arundo is among the increasing number of 
        invasive species posing significant economic and ecological 
        problems in California and around the country. The increase 
        would be divided between the intergovernmental Team Arundo that 
        operates in the Santa Ana watershed ($100,000), and its 
        counterpart Team Arundo Angeles that would use $400,000 to 
        eradicate arundo from the Whittier Narrows area of the San 
        Gabriel River watershed.

        Bureau of Reclamation

         an increase of $5.2 million in Bureau of Reclamation 
        construction funding for continuing work on a permanent pumping 
        plant to increase water supply reliability for the Placer 
        County Water Agency and reduce Federal costs over the long 
        term. This funding would be in lieu of the up to $1 million 
        that has been annually spent for more than thirty years by the 
        Bureau to install a temporary pump to fulfill its contractual 
        obligation.
         an increase of $5.2 million above the Bureau of 
        Reclamation's $12.3 million budget request for the Colorado 
        River Salinity Control Program, funded through the Water and 
        Related Resources account. This increase, coupled with the non-
        Federal cost share, would begin to work down the backlog of 
        worthy proposals needing funding.
         a $3.1 million increase to the $1 million request for 
        environmental and engineering studies, and flood easements in 
        the area of Arroyo Pasajero. This work is necessary to protect 
        the vitally important California Aqueduct against flood damage, 
        and to protect lives in the communities in the immediate 
        vicinity of Arroyo Pasajero.
         an increase of $600,000 to the budget request for the 
        Bureau of Reclamation's Regional Wetland Development Program, 
        to be highly leveraged by state and local matching funds, for 
        wetland restoration and floodplain management at Trout Creek 
        near South Lake Tahoe, California. Although the Clinton 
        Administration generated much press activity with respect to 
        Lake Tahoe last summer, the budget request for programs to 
        actually restore the lake is disappointing. My state budget for 
        the coming fiscal year contains $11.5 million in new funding, 
        contingent on new matching Federal funding.
         an increase of $3.7 million to the disappointing and 
        token $250,000 budget request to continue work on fish screens 
        at Rock Slough for the Contra Costa Canal. These screens are 
        required by the Central Valley Project Restoration Act, and 
        will address endangered species issues facing Contra Costa 
        County. Interior has never requested the necessary funds for 
        the project, although non-Federal funds are available to cover 
        the 25 percent match. Thank you for providing $1.5 million for 
        this project in fiscal year 1998. I urge you to provide $4 
        million in fiscal year 1999 so the project can stay on 
        schedule.
         a $400,000 increase to continue the Sacramento River 
        Winter-Run Chinook salmon captive broodstock program, which is 
        in its seventh year and has demonstrated biological and 
        technological successes that will contribute to salmon 
        conservation in other regions.
    I also urge you to support the $49.5 million requested in the 
Bureau of Reclamation's budget for the Central Valley Project 
Restoration Fund. These monies are for environmental restoration in the 
area affected by the Federal Central Valley Project, and are actually 
funded by payments from water and energy users.
    Finally, I urge you to significantly increase funding for the Corps 
of Engineers for navigation, port, and harbor projects, including 
navigation studies, engineering and design work, construction, and 
operations and maintenance. The large cut in the President's budget for 
the Corps of Engineers is economically unjustifiable, and if enacted, 
would severely hamper America's competitiveness in international trade.
    Thank you very much for your consideration of California's 
priorities.
            Sincerely,
                                               Pete Wilson,
                                                          Governor.
                                 ______
                                 

Statement of Dr. Timothy H. Quinn, Deputy General Manager, Metropolitan 
Water District of Southern California on behalf of The Bay-Delta Urban 
                               Coalition

Introduction

    Mr. Chairman and members of the Subcommittee, thank you for 
providing me an opportunity to submit this statement regarding 
financing the CALFED Bay-Delta Program. My name is Timothy 
Quinn. I am a Deputy General Manager for the Metropolitan Water 
District of Southern California, although I am appearing today 
on behalf of the Bay-Delta Urban Coalition. The Bay-Delta Urban 
Coalition (Urban Coalition) represents urban water agencies 
from northern and southern California that supply drinking 
water to over 20 million Californians.\1\
---------------------------------------------------------------------------
    \1\ Representatives of the Bay-Delta Urban Coalition include the 
Alameda County Water District, Coachella Valley Water District, Central 
& West Basin Waters, Central Coast Water Authority, East Bay Municipal 
Utility District, Metropolitan Water District of Southern California, 
Municipal Water District of Orange County, San Diego County Water 
Authority, San Francisco Public Utilities Commission, Santa Clara 
Valley Water District, and Solano County Water Agency.
---------------------------------------------------------------------------
    The members of the Urban Coalition have been active 
participants in the CALFED Bay Delta process since its 
inception and are committed to working though CALFED to hammer 
out the best solution package. The next six months will be a 
critical decision-making period for the CALFED agencies and all 
the interested stakeholder groups. The challenge will be to 
craft a solution that provides broad benefits throughout 
California--for the environment and for urban and agricultural 
water users.
    This brief statement is intended to answer the questions 
raised in the letter of invitation to this panel by enunciating 
several key principles which the urban community believes will 
be central to the development of a viable financing package for 
a preferred CALFED alternative.

1. The finance plan must be founded on a CALFED solution that 
produces widespread value.

    With California expected to grow in population to nearly 49 
million people by the year 2020, one of the major challenges we 
face is how to provide a sufficient, safe, reliable water 
supply to meet the needs of households, industries, farms, and 
the environment. Although still a work in progress, the CALFED 
process has made more progress and has a greater chance of 
ultimate success than any of the previous efforts to tackle 
this problem during the last three decades. After years of 
conflict and a shrinking water resources pie, for the first 
time in a generation, California has the opportunity this year 
to make major decisions that will create value for a wide range 
of interests. Any successful financial plan must, first and 
foremost, have the foundation of a preferred alternative that 
generates value for those who will be asked to pay a portion of 
the costs, whether through increased water rates or higher 
taxes.
    For the environment, the CALFED ecosystem restoration 
program will be historically unprecedented anywhere in the 
nation. Already underway with state and Federal funds provided 
by California Proposition 204 and the 1996 California Bay-Delta 
Environmental Enhancement Act, the habitat improvements of the 
CALFED ecosystem restoration program will fortify our efforts 
to achieve the restoration goals of the Central Valley Project 
Improvement Act. For urban California, an effective CALFED 
solution has the potential to substantially improve source 
drinking water quality and provide a stable transportation and 
storage infrastructure that will be required to meet the needs 
of a growing economy. (In a 1996 public opinion poll, 9 out of 
10 Californians stated we need a sufficient, reliable and 
affordable water supply to maintain a strong economy. For 
agricultural interests, the CALFED program can provide 
assurances that we will sustain the largest agricultural 
economy in the nation while transitioning to a new regime of 
natural resources management that will meet the environmental 
and economic needs of the twenty-first century.
    Beyond California, improvements in the Bay-Delta estuary 
will favorably impact aquatic and avian ecosystems in other 
western states. The Bay-Delta system provides the largest 
wetland habitat and estuary in the West. It supports 750 plant 
and animal species, some found nowhere else in the nation. It 
is a critical part of the Pacific Flyway over which hundreds of 
migrating birds travel each year from Mexico to the Canadian 
border.
    Just as the CALFED program must generate widespread 
benefits, funding must be made available from diverse sources. 
Members of the Urban Coalition have long supported user fees 
paid by those in urban and agricultural areas who use water as 
a primary source of funds to pay for a CALFED solution. The 
benefits to water users from improved water quality and 
reliability will be substantial and, accordingly, they should 
be willing to pay an appropriate share of program costs. 
Similarly, many of the benefits of a CALFED solution will be 
broadly enjoyed by the public at large, and state and Federal 
financial resources should be available to pay a portion of 
program costs. Of course, no specific allocation of costs can 
be identified until the CALFED preferred alternative is 
selected later this year.

2. CALFED Must Aggressively Pursue Cost Containment While 
Maintaining Benefits.

    A second fundamental principle is that the CALFED program 
must provide benefits at the lowest possible cost. Current 
estimates of the overall costs of the CALFED program range from 
approximately $9 to $11 billion. Quite frankly, we believe 
these cost estimates are considerably inflated and the 
potential value of a CALFED solution can be obtained at a 
substantially lower cost. The Urban Coalition is committed to 
work with the CALFED agencies and other stakeholder interests 
to aggressively pursue cost containment strategies which will 
assure any preferred alternative is implemented at the lowest 
possible overall costs.

3. Costs Should Be Shared Consistent With the Beneficiaries 
Pays Principle and Allocated in a Mutually Agreeable Manner.

    The Urban Coalition is committed to the principle that 
beneficiaries must pay for the value received from a CALFED 
solution. At the same time, we are concerned if this principle 
is implemented in an arbitrary manner it could result in 
imposed costs on some water users which are not matched in 
their view by commensurate benefits. For this reason, we 
believe that as part of the broad negotiations required to 
define and implement the CALFED Bay-Delta program, costs should 
be allocated on a mutually agreeable basis. This approach would 
provide all parties who have a significant financial stake with 
a voice in the determination of who benefits and how they are 
expected to pay. This principle should be applied equally to 
water agencies and to taxpayers, and be implemented through 
appropriate regulatory and legislative procedures and/or a vote 
of the citizens.
    The purpose of this third fundamental principle is to 
assure all interests which provide major financial support can 
determine for themselves that they expect to receive benefits 
which justify their costs. This principle also creates a strong 
linkage between cost allocation and the CALFED assurances 
package. No interest group will be inclined to pay a portion of 
the costs of the CALFED program unless they believe the 
assurance package guarantees a flow of benefits commensurate 
with their cost allocation.

4. The Financial Plan Should be Based on a Prospective 
Assessment of Value and Not a Retrospective Assignment of 
Blame.

    The goal of the CALFED program is to realize both early-
start and long-term benefits to the environment and economy of 
California. To be successful, the CALFED process must be 
forward looking. For this reason, the Urban Coalition believes 
that basing financial decisions on perceptions of past 
responsibilities for mitigation or damage payments is counter 
productive. Human activities and social policies have affected 
the Delta ecosystem for over 100 years, beginning with 
hydraulic mining processes and reclamation in the 1800's, as 
well as many other natural processes. While water diversions 
from the watershed have undoubtedly affected the ecosystem, 
many other human activities have also affected the Delta. We 
believe that it is impossible to prove the level of damage 
attributable to individual factors to the satisfaction of all 
parties. Focusing on blame for past acts will not lead to 
solutions; it will only lead us back into divisiveness and the 
regulatory and political gridlock that CALFED has allowed us to 
escape.

Conclusion

    Ultimately, CALFED financing decisions must be based on a 
prospective assessment of anticipated value from the proposed 
solution and a willingness to pay as expressed by all the 
financial participants. Although program costs will be 
substantial, so too will be the value for California and the 
nation of a successful CALFED program. We in the urban 
community are dedicated to working with you, Mr. Chairman, 
members of the Subcommittee, and all others in the process to 
identify a feasible financial plan which will allow us to 
implement an affordable CALFED plan that generates enduring 
value for the environment and for the urban and agricultural 
economies of California.
                                ------                                


 Statement of Richard K. Golb, Executive Director, Northern California 
                        Water Association (NCWA)

    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 
association representing sixty-six private and public 
agricultural water suppliers and farmers that rely upon the 
waters of the Sacramento, Feather and Yuba rivers, smaller 
tributaries, and groundwater to irrigate over 850,000 acres of 
farmland in California's Sacramento Valley. Many of our members 
also provide water supplies to state and Federal wildlife 
refuges, and much of this land serves as important seasonal 
wetlands for migrating waterfowl, shorebirds and other 
wildlife. I would appreciate the Subcommittee's inclusion of my 
written testimony in today's hearing record.
    The Subcommittee's interest in the CALFED Bay-Delta Program 
(CALFED) and specifically the allocation of Federal funds for 
ecosystem restoration is appropriate given the importance of a 
successful resolution to the environmental and water supply 
problems in the Sacramento-San Joaquin River Delta and San 
Francisco Bay (Bay-Delta). The Bay-Delta is a tremendous 
economic and environmental resource to California and the 
Nation, and there is much at stake in how CALFED implements its 
ecosystem restoration actions. CALFED's response to the 
Subcommittee's questions will also be useful for private 
interests participating in this process.
    I appreciate the opportunity to provide NCWA's perspective 
on CALFED. NCWA has actively participated in the CALFED 
process, as a signatory to the 1994 Bay-Delta Accord and a 
participant in the development of California's Proposition 204 
and the Federal Bay-Delta Security Act (Public Law 104-333). 
Two representatives of NCWA's Board of Directors, Chairman Tib 
Belza and Director Don Bransford, serve on CALFED's Bay-Delta 
Advisory Council, and I am a member of the Ecosystem 
Roundtable--the entity chartered to allocate state and Federal 
ecosystem restoration funds.
    The specific questions the Subcommittee has posed focus 
directly upon evaluating the effectiveness of Federal funds 
appropriated to partially finance CALFED's ecosystem 
restoration programs and projects, some of which are years 
away, and some of which are now underway. The Subcommittee has 
also requested our perspective on whether CALFED should 
implement its plan as designed or amend it based upon the 
principle of adaptive management. Similar questions have been 
raised by California's Legislature, local governments, by 
CALFED's Ecosystem Roundtable and by public and private 
interests with an immediate stake in efficiently achieving 
environmental restoration with limited resources.

1. How do we evaluate the effectiveness of the funding we are 
providing?

    CALFED's draft Ecosystem Restoration Program establishes 
specific objectives, targets and programmatic actions designed 
to accomplish CALFED's overall mission ``. . . to develop a 
long term comprehensive plan that will restore the ecosystem 
health and improve water management for beneficial uses of the 
Bay-Delta ecosystem.'' If successful, the plan should 
rehabilitate native fish and wildlife species and their habitat 
in the Bay-Delta system, and increase water supplies and 
reliability for California's cities, businesses and farms. One 
measure of success of the overall program is an improving 
environment, achieved in part by implementation of restoration 
projects that resolve known problems. For example, the 
installation of fish screens on agricultural diversions to 
prevent the entrainment of fish species. Program success will 
also be indicated by decreasing regulatory disruption of water 
project operations, and reduced regulations on individual 
agricultural water suppliers and farmers.
    Many of the private interests following CALFED, such as 
Sacramento Valley agricultural water suppliers and farmers, are 
financially participating in cost-share arrangements with 
CALFED agencies on specific restoration projects. Nearly a 
dozen water suppliers throughout the Sacramento Valley are 
engaged in the study, design or construction a fish screen or 
passage project to protect candidate, threatened and endangered 
fish. Some of these projects are now complete, such as Western 
Canal Water District's Gary N. Brown Butte Creek Siphon 
Project. This unique project resulted in the installation of a 
concrete siphon to convey agricultural water supplies under 
Butte Creek, allowing the removal of several small dams that 
historically hindered spring-run salmon migration to spawning 
habitat. Completion of this project illustrates the 
effectiveness of restoration actions in providing immediate 
benefits to the environment--in this case for spring-run 
salmon, presently listed as a threatened species under 
California law and proposed for Federal listing--and for the 
local community and area farmers who benefit through 
development of a more reliable water supply.
    As with Western Canal's farmers, other agricultural water 
users in the Sacramento Valley have a vested interest in 
ensuring state and Federal funds are effectively managed to 
ultimately improve the fishery, and alleviate regulatory 
mandates. Their participation is based on the belief the 
projects will succeed, and are an effective way to restore 
salmon species and protect landowners from burdensome 
regulations. Their financial stake in these projects means they 
will actively oversee the government agencies carrying out the 
projects.

2. What clear and unambiguous performance standards are being 
adopted to determine if we are close to success or have 
achieved success?

    As this Subcommittee is well aware, it is difficult to 
establish performance and monitoring standards on complex and 
dynamic ecosystems, such as California's Bay-Delta. State and 
Federal resource agencies, and private interests, have 
encountered similar difficulties in assessing the effectiveness 
of restoration in the Pacific Northwest and the Florida 
Everglades. Moreover, CALFED will attempt to apply its yet to 
be developed standards on specific projects, and the entire 
program, in an ecosystem that has sustained natural and human 
damage; which continues to change. Complicating this task is 
task is a lack of full biological information of the effects 
these continuing natural and artificial processes have on fish 
and wildlife, and their habitat. Additionally, natural events 
can overwhelm our best efforts and mask success. Wildfires in 
the Shasta or Sierra watersheds, drought, or damaging winter 
storms--such as the 1997 storms that produced the worst flood 
in California history which swept millions of young salmon 
prematurely to the Pacific Ocean--can devastate fish and 
wildlife and their habitat.
    An additional difficulty in assessing this program's 
success, and its individual actions, is CALFED's plan to 
implement projects that will replicate natural processes 
associated with instream flows, stream channels, watersheds and 
floodplains. CALFED proposes to accomplish this objective 
primarily by the acquisition of farmland and water supplies to 
create river meander corridors, riparian forests, and increased 
instream flows. The proposed implementation of these particular 
actions raises legitimate concerns for upstream and downstream 
communities, landowners and water suppliers.
    CALFED's Ecosystem Restoration Program recommends the 
implementation of nearly 700 actions over a thirty year period, 
however, work has already begun on several of the program's 
main elements. For example, CALFED's draft environmental impact 
report and impact statement, released in March, recommends the 
acquisition of roughly 200,000 acres of Central Valley farmland 
(30,000 acres in the Sacramento Valley) to meet certain goals 
outlined in the Ecosystem Restoration Program. CALFED proposes 
to allocate $14 million in fiscal year 1998 Federal funds to 
acquire private property in order to create meander corridors 
along the Sacramento, San Joaquin and other Central Valley 
rivers.
    CALFED's staff acknowledges the scientific uncertainty 
underlying the potential benefit to fish and wildlife from 
these actions. River meander and riparian forest projects 
necessarily require the acquisition of land along a river or 
stream in order, for example, to allow the river to inundate 
land during high flow periods. There are numerous consequences 
that may arise as a result of these projects, including river 
level and flow fluctuations and increased sediment and debris 
loading, which threaten existing water diversions and fish 
screens. Due to the unpredictable nature of these projects, and 
the risks they present, NCWA encourages CALFED to initially 
focus on restoration actions that fix known fish and wildlife 
problems. We recognize, however, a limited number of actions 
that attempt to replicate natural processes may be necessary to 
restore habitat for at-risk species.
    There are several specific steps CALFED should consider 
before embarking on a large-scale river meander plan in order 
to avoid adverse social, economic or environmental affects to 
local communities, landowners, and water suppliers. This is 
consistent with CALFED's stated principle of implementing 
actions and a long-term plan that does not result in the 
redirection of adverse impacts.
    NCWA has encouraged CALFED to consider adoption of a pilot 
program that may serve as a model for its future projects 
involving land acquisition. Although the specific principles of 
our recommendation are still under development, our goal is to 
accomplish restoration actions compatible vith economic 
activities, including farming, water district operation and 
flood control protection.
    A first step is to attempt to utilize public lands with 
similar ecological characteristics prior to acquiring private 
property to achieve restoration measures. If public lands are 
unavailable, conservation easements, rather than outright fee 
title acquisition, should be a priority, and all acquisitions 
must be voluntary. Completion of California Environmental 
Quality Act and National Environmental Policy Act requirements 
should be initiated before the acquisition of private property. 
In cases where California Environmental Quality Act compliance 
is not required, such as the acquisition of rights to allow an 
existing levee to degrade and fail, a representative public 
process should be developed to determine the selection and 
implementation of specific actions. Establishment of a 
representative public process to ensure local involvement must 
be a cornerstone of any land acquisition program. Finally, 
CALFED must adopt clear assurances, or legal guarantees, that 
address issues of liability for future damage resulting from 
project implementation, as well as local tax and assessment 
responsibility.

3. Are we going to postpone any major program decisions or 
alternatives until we have the results of the early phases? Or 
are we going to agree on a basic blueprint and simply adjust it 
through adaptive management as we move along?

    It is our understanding CALFED intends to utilize adaptive 
management in its implementation of the overall plan, including 
the staging of various program elements such as new storage 
projects--which will provide additional instream flows. Certain 
features of CALFED's Ecosystem Restoration Plan should be 
implemented now, especially projects that will resolve known 
problems and provide immediate environmental and economic 
benefits.
    California's recent response to the declining spring-run 
salmon population is a good example of the benefit of 
implementing broad based restoration actions before the species 
is listed under Federal law, and the ensuing regulatory 
gauntlet hampers all voluntary recovery efforts. The United 
States' recent listing of the steelhead as threatened, and the 
proposed listing of the fall-run, late-fall run and spring-run 
salmon are further incentive to initiate restoration actions 
now that will hopefully alleviate punitive Federal regulations 
later. Adaptive management is a useful tool to guide project 
selection and implementation given dynamic natural conditions, 
such as drought and floods. Projects that require additional 
analysis to determine their merit should be delayed, or 
implemented on a pilot project basis, until CALFED has 
established a better biological baseline, and expectation, of 
their potential benefit.
    In conclusion, NCWA supports additional Federal funding for 
the CALFED program consistent with the Federal Bay-Delta 
Security Act, and we offer our continued assistance to Congress 
and the Subcommittee on Water and Power to respond to these 
issues in the future.
                                ------                                


   Statement of Dick Dickerson, President, Regional Council of Rural 
                                Counties

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITEE:
    I want to thank you for the opportunity to provide 
testimony on behalf of the Regional Council of Rural Counties 
(RCRC) to the Subcommittee with regards to the CALFED Bay-Delta 
Program's, public participation program.
    I am the President of the RCRC, and organization of twenty-
seven rural California Counties. Our membership encompasses a 
broad geographic area stretching from the shores of Mono Lake 
to the shores of Clear Lake, from the valley floor of Yosemite 
to the top of Mount Shasta, from the rich farmlands of the 
Sacramento and San Joaquin Valley to the dense Sierra forests. 
Our members are located within San Joaquin, Sacramento and 
Trinity Watersheds. Collectively, our members are the 
``source'' areas for the San Francisco Bay-Delta. It is from 
our membership that over eighty percent of the water for the 
Delta comes. Our twenty-seven member counties number nearly 
half of all of California's fifty-eight counties.
    The forests from within our membership area include the 
most significant snow pack areas in California. The water 
storage in those snow packs dwarfs the capacity of all of the 
reservoirs in the state. Snow melt during the spring and summer 
months is what keeps the Delta ecosystem alive. The health of 
the watersheds in our membership areas are, to the great 
extent, the early indicators of the health of the Delta's 
ecosystem not by any law of man, or map in a Federal office, 
but by the laws of nature. Any successful Bay-Delta solution 
will depend upon actions in our membership area, to implement 
ecosystem restoration, watershed management, water transfers, 
new water storage facilities and existing storage re-operation.
    The Congressionally ordered Sierra Nevada Ecosystem Project 
Report, completed in 1996, concluded that the most valuable 
resource in that mountain range was water. Water accounted for 
sixty cents of every dollar of all natural resources values 
including timber, mining, recreation and grazing. Water is not 
only the lifeblood of the Delta ecosystem it is also the liquid 
gold of California's economy.
    RCRC has participated in the CALFED Bay-Delta program since 
early 1996. Through the past two years we have actively 
supported a CALFED solution and willingly worked to achieve a 
balanced solution. We have worked very hard to assure that 
there would be a watershed restoration component in the CALFED 
Common Program Elements. We strove to develop an Ecosystem 
Restoration Program Plan, which would be grounded in reality 
and site specific--taking advantage of local expertise. We have 
advocated an open public process not only in the current CALFED 
program, but also in actual implementation actions and 
governance.
    RCRC is represented in the CALFED process at three levels. 
Our Water Committee Chairman (Robert Meacher, Plumas County), 
serves on the Bay-Delta Advisory Committee (BDAC). Our water 
and natural resources consultant John S. Mills, services the 
Ecosystem Restoration Roundtable. Mr. Meacher, Mr. Mills and 
other RCRC elected officials and staff also participate in 
numerous BDAC work groups such as; ecosystem restoration, water 
transfers, assurances, and finance.
    The expectation for adequate public participation within 
CALFED is predicated on the ability of the public to understand 
the subject matter. To have the opportunity to meaningfully 
express their interests and concerns to those making decisions 
and for those making the decisions to evaluate and respond to 
public input. This is, when effective, an interactive and 
ongoing process.
    The CALFED Bay-Delta Program, if completed, will be the 
most complex ecosystem restoration program ever carried out 
within the United States. It will affect the lives of tens of 
millions of Californians now and hundreds of millions yet to 
come in the future.
    It will cost billions of dollars and involve the use of 
significant portions of California's land area to achieve 
success. This process should involve not only water managers 
and Federal and state agency personnel, but also the general 
public whose lives will be affected by a CALFED solution. The 
solution will be complex and should involve, to the greatest 
extent possible, as much of the public as is practical.
    Notwithstanding the participation of RCRC I have 
referenced, we believe that there are two very serious problems 
with the CALFED public participation program and that they are 
inextricably linked.
    It is our experience that the CALFED schedule is too short. 
It fails to allow time for most of the affected parties to even 
become acquainted with the information being presented let 
alone provide meaningful input. While it is true that the 
process has been underway for over two years, it is only the 
past six months that clear project features and components of a 
solution have been assembled in any understandable manner. It 
is only in the past two months that a Draft Environmental 
Impact Statement has been released for public review and 
comment. Unfortunately, during this same time period the 
California Department of Water Resources released their Water 
Plan Update (Bulletin 160-98) with an April 15 deadline for 
comment.
    The Bureau of Reclamation set an April 17 deadline for 
comments on their own 5,000 page Programmatic Environmental 
Impact Statement. To comply with CVPIA. Most local governments 
were simply overwhelmed with the paper load. For the general 
public, faced with earning a living, the invitation to 
``participate'' in these processes on that schedule was quite 
impossible.
    In addition, providing meaningful comments was further 
frustrated by significant portions of a CALFED solution package 
being incomplete at this time. For while we now know what the 
various alternatives for conveyance are, there are missing 
pieces to the puzzle. For example:

         There is no Assurance package. For our membership the 
        issue of protections and guarantees of performance is of 
        paramount importance.
         There is no Water Transfers package. Water transfers, 
        while an important component of any CALFED solution, pose the 
        most direct threat to our source areas economies if not 
        properly designed and implemented.
         There is no complete Watershed Strategy. At best 
        CALFED has put together a strategy of how to do a watershed 
        strategy. The watershed restoration and management component of 
        a CALFED solution is critically important to our members.
         There is no clear direction on new surface storage. 
        Without new storage of surface water, the chances of producing 
        a CALFED solution that would not negatively affect our members, 
        is very slim.
    Therefore we feel that we are being forced to comment on an 
incomplete CALFED package in an unrealistic time frame. We are not 
optimistic that our comments would have any influence on the process 
given the lack of time for CALFED staff to evaluate and incorporate 
changes. We must underscore that we do not feel meaningful public input 
can be accommodated in the CALFED process given it is to be completed 
in the next seven months. That is a schedule for confrontation not 
consensus.
    We believe that the public involvement in the CALFED process has 
been structured in such a manner as to make it very difficult for 
meaningful participation. For example, Mr. Meacher, our BDAC 
representative has at times received his meeting agenda packet less 
than 24 hours before a BDAC meeting. He cannot be expected to read, 
assimilate and provide meaningful suggestions on a two-inch thick 
document in such a short period of time.
    Most CALFED meetings take place in Sacramento. While this is 
convenient for the agency personnel, most of the interested public are 
located elsewhere. CALFED's recent regional meetings throughout the 
state for the Draft Environmental Impact Statement are an improvement. 
However, they are too little too late.
    Regular CALFED regional workshops, on specific subjects, should 
have been held throughout the solution area, not just in Sacramento. 
This latter problem has resulted in increasing landowner concerns in 
our member counties regarding just what it is CALFED is doing and how 
it will affect their way of life.
    The CALFED Ecosystem Restoration Program Plan, a multi-volume plan 
to restore the environment of the Delta, was mailed out to only 550 
recipients--according to CALFED's own mailing list. CALFED's choice of 
who the document went to was also of concern. In one State Senate 
District in the Sacramento Valley, only two farm bureaus received 
copies. No copies were received by Women in Agriculture or by any 
Chamber of Commerce. However, more than twenty-five copies went out to 
environmental groups such as the Sierra Club, the Nature Conservancy 
and Restoring the Earth. Also on the ``A'' list of recipients were 
universities which received twenty copies in places as far away as U.C. 
Riverside and Berkeley. Federal and state agencies obtained over forty 
copies. Those who stood to be most affected by the plan, those who's 
land might have been ``retired'' or those whose water rights might be 
acquired, or those whose land might be converted to habitat, were left 
in the dark. Public frustration, expressed to us, the local elected 
officials, was significant. They have asked us, and we are asking you, 
to help expand and improve the public participation process in a 
meaningful way.
    The CALFED program has only rarely been able to take the time to 
address specific concerns of local landowners and examine ways to 
mitigate specific changes to their program. We believe that this must 
change.
    The CALFED program has only rarely been able to hold ``field'' 
meetings with local conservancies, landowners and local government to 
find innovative ways to restore the environment without new regulations 
and takings. We believe that this must change.
    The CALFED program has seemingly expected rural California to 
supply the land, water and job sacrifices to fix the Delta without 
question in the manner of traditional top down agency mandates. We 
believe that this must change.
    CALFED has scheduled its own document releases and review periods 
in apparent ignorance or oblivion of the actions being taken by other 
CALFED agencies. We believe that this must change.
    CALFED expects all California to step forward to help fix the Delta 
when it is convenient for CALFED, in a location convenient for CALFED 
in a manner convenient for CALFED. We believe that this must change.
    One of CALFED's own brochures read, ``Ultimately, it is the active 
participations of the entire public that will help fix the Bay-Delta.'' 
That Mr. Chairman, and members of the Committee, we believe will not 
change.
                                ------                                


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

    Good afternoon. Mr. Chairman and members of the Committee, 
my name is Bill Gaines, and I am the Director of Government 
Affairs for the California Waterfowl Association. Thank you for 
the opportunity to come before you today to discuss the private 
sector's role in the CALFED Bay/Delta Program.
    Historically, the Bay/Delta watershed provided over 4 
million acres of naturally occurring wetland habitat for 
Pacific Flyway waterfowl and other wetland-dependent species. 
Over the course of the last century, largely due to 
agricultural conversion, urban expansion, and flood control 
projects, nearly 95 percent of this once vast wetland base has 
been lost. Yet, our little remaining habitat must still provide 
critically important nesting and wintering habitat for nearly 
25 percent of our continental waterfowl population, as well as 
an estimated 50 percent of California's threatened and 
endangered species.
    Recognizing this serious threat to our natural resources, 
the California Waterfowl Association was established in 1945 
with the mission of conserving California's waterfowl, 
wetlands, and sporting heritage. Over the course of the last 
half-century, our Association has worked cooperatively with 
Legislators, State and Federal agencies, other organizations 
and private landowners to actively seek water supplies for 
wetlands, and to develop, influence, fund, and implement 
wetland programs which facilitate the preservation, 
enhancement, and restoration of California's waterfowl habitat. 
Today, fifty-three years later, the California Waterfowl 
Association is largely recognized as the leader in California's 
wetland and waterfowl conservation effort. As Federal and State 
agencies, private organizations, landowners, and individuals 
move forward with the implementation of the CALFED Bay/Delta 
Program, the California Waterfowl Association has, once again, 
assumed the role of lead voice for public and private wetland 
and waterfowl interests.
    Due to significant changes in California's natural 
hydrology, much of our remaining interior wetlands must now be 
``managed''--artificially irrigated and intensively managed to 
create marsh conditions. As a result of this very unique 
condition, the quantity and quality of waterfowl habitat 
available in California in any given year is largely dependent 
upon the availability of wetland water supplies. For many 
years, the lack of a firm water supplies for California's 
managed Central Valley wetland areas resulted in limited 
habitat of minimum quality in all but the absolute wettest of 
water years. In the fall of 1992, a significant positive step 
was taken toward addressing these critical annual wetland water 
needs when the Central Valley Project Improvement Act (CVPIA) 
was passed by Congress and signed into law. By guaranteeing 
firm annual water supplies to Central Valley public refuges and 
private wetlands within the Grassland Resource Conservation 
District, this landmark legislation marked a critical positive 
milestone in the California waterfowl conservation effort. But, 
with still less than 10 percent of our historical habitat 
remaining, much remains to be done.
    The CALFED Bay/Delta Program is a long-term effort to 
address ecosystem health, water quality, water supply 
reliability, and levee system integrity in the Bay/Delta 
watershed. Because the restoration, enhancement, and 
maintenance of waterfowl habitat throughout much of this 
watershed also depends upon these areas of concern, properly 
implemented, the CALFED Bay/Delta Program represents a 
tremendous opportunity to address the needs of migratory and 
nesting waterfowl, and the other wetland-dependent species.
    Today, I have been asked to provide our Association's view 
regarding public participation in the CALFED Bay/Delta Program. 
As a 501(c)3 nonprofit organization representing nearly 13,000 
Bay/Delta stakeholders statewide, the California Waterfowl 
Association also has a significant interest in the private 
sector's ability to contribute to the CALFED process.
    Let me begin to address this question with the statement 
that, although California's ``water wars'' and deteriorating 
ecosystem health are well chronicled, the CALFED Bay/Delta 
Program is, far and away, the most significant and positive 
multi-interest effort ever undertaken to address water and 
environmental concerns in California, or perhaps throughout the 
nation. The sheer magnitude of this landscape effort results in 
unintended barriers and natural disincentives to public 
participation. At times, even those individuals or the 
representatives of agencies or organizations who are fortunate 
enough to be able to dedicate ``full-time'' to this much needed 
effort struggle to obtain a comprehensive grip on this sweeping 
Program and its dynamic process. Clearly, providing for a 
Program which offers ample public participation opportunities, 
as well as real-time public awareness of its continual progress 
and potential impacts, is, in itself, a tremendous challenge 
for the Bay/Delta Program team.
    Irregardless of the stumbling blocks associated with 
assuring full stakeholder participation in such a mammoth 
program, the California Waterfowl Association believes the 
CALFED team has made every effort to design a process which 
facilitates and encourages important public input and returns 
real-time information flow. Yes, our Association--even as a 
member of the Program's Ecosystem Restoration Roundtable--has 
experienced times of serious frustration due to our inability 
to positively influence CALFED Program decisions. But, our 
Association does not contribute this frustration to a CALFED 
agency team set on implementing the Program ``their way,'' but 
rather to the tremendous difficulty associated with trying to 
address a myriad of Bay/Delta concerns in a fashion which is 
palatable to each of the many stakeholder interests which must 
be served.
    In trying to achieve this difficult goal, the California 
Waterfowl Association believes that CALFED agencies have made 
every reasonable effort to design a Program which allows Bay/
Delta stakeholders to contribute to the Program's 
implementation, as well as its problem-solving/decision-making 
process. The ability of the private sector to be heard in this 
process ranges from the high profile role of formal committees 
established to provide direct advisory input to CALFED 
agencies, to hands-on workshops in small rural towns throughout 
the watershed, to other public outreach efforts which are 
enough to choke even the hardiest of mailboxes.
    As each of you is probably aware, CALFED agencies have 
tried to facilitate formal public input and interaction by 
establishing the Bay/Delta Advisory Council, or BDAC. This 
body, which is chartered by the Federal Advisory Committee Act, 
is comprised of a variety of stakeholder interests--including 
the California Waterfowl Association, water districts and 
utilities, environmental and fishing organizations, the 
California Farm Bureau, and others. Combined, this regularly 
meeting group of more than thirty diverse private interests 
provides an on-going medium for direct top-level public 
participation in the Program's decision-making process.
    In addition to BDAC; formal stakeholder interaction is also 
provided by the CALFED Ecosystem Restoration Roundtable--a 
roughly 20 member BDAC subcommittee. Similar to BDAC, this 
multi-interest team meets regularly in a public setting to 
discuss the concerns of individual interest groups, to ensure 
the coordination of CALFED Program activities with other 
restoration programs in the Bay/Delta watershed, and to help 
define priorities for on-the-ground CALFED projects.
    In addition to our seat on BDAC, the California Waterfowl 
Association is also active on the CALFED Ecosystem Restoration 
Roundtable, and I fill this role. As a direct result of our 
involvement at the Roundtable level, we have been able to 
positively influence a small, but important, selection of 
Program decisions--most notably the addition of waterfowl and 
their habitats as a secondary priority of the Program.
    In addition to the ability of the private sector to 
influence CALFED policy decisions via BDAC and the Ecosystem 
Roundtable, the public is also offered an opportunity to direct 
the Program's biological priorities, and the actual selection 
of restoration projects. Thirteen species, habitat, and/or 
region specific technical panels, as well as an umbrella 
Integration panel, have been created by CALFED agencies. These 
technical teams--which consist of a mixture of agency, 
academic, and stakeholder specialists--not only provide input 
on the types of restoration actions needed to address targeted 
Program concerns, but also play a lead role on the review and 
selection of proposals submitted for CALFED funding.
    The formal opportunities for private sector input that I 
have outlined are supplemented by the sometimes seemingly 
overzealous effort of CALFED agencies to reach out to those 
organizations, landowners, and individuals who have shown an 
interest in the Program. In our opinion, a tremendous amount of 
time, expense and effort has been put forth by the CALFED team 
to arrange, announce, and attend regional workshops, scoping 
meetings, and other public outreach efforts, as well as to 
continually bombard those on the massive mailing list with 
Program updates and other information. I can assure you that, 
as one of those on CALFED's ever growing mailing list, delivery 
of the daily mail can be, at times, a depressing event.
    It is important to note that, in addition to the care taken 
to facilitate private sector participation in CALFED decision-
making, other important precautions are included in the 
proposal selection process to protect against unintended 
negative impacts to any individual landowner or interest-group. 
First, and perhaps most importantly, restoration projects are 
only done on a willing landowner basis.
    Clearly, certain specific parcels may, for whatever reason, 
be identified as critical for a certain habitat type or 
species. But, no project will be initiated without full, 
willing landowner participation. Second, efforts are being made 
to leave land in private ownership by giving preference to 
permanent conservation easements over fee title acquisition. 
Finally, the latest Request for Proposal (RFP) includes local-
public involvement as part of the formal proposal evaluation 
criteria.
    Nevertheless, regardless of the sweeping efforts to address 
public concerns in the CALFED Program, the role of the private 
sector will be forever limited by several unavoidable factors. 
First, as I mentioned before, due to the staggering sheer size 
of the effort, few private organizations--much less 
individuals--have the time or aptitude to become sufficiently 
knowledgeable on the Program and its process, to know when, 
where, and how to ``weigh-in'' to best serve their concerns. 
Perhaps most frustrating, even those who are fortunate enough 
to understand the process are limited by the Program's charter 
to address so many differing concerns while avoiding unwanted 
impacts to the many diverse stakeholder interests.
    I believe the California Waterfowl Association is a good 
example of a private interest who has a relatively thorough 
knowledge of the Program, yet has been limited in its ability 
to fully address each of its concerns. Today, I am here to ask 
for your help.
    Our Association fully appreciates and supports the goal of 
the CALFED Program to address water supply reliability, and the 
importance of addressing the habitat needs of listed fish 
species in achieving this objective. Our ``managed'' wetlands 
will also benefit greatly from achieving this goal. Yet, if the 
Program is to make a sincere effort to restore the integrity of 
the Bay/Delta ecosystem, it must also more fully consider the 
serious habitat needs of native wildlife--most notably 
wintering and nesting waterfowl, and other species which share 
their habitats.
    California's Central Valley--largely the same geographical 
area being addressed by the CALFED ecosystem restoration 
program--is widely recognized as one of the most important 
waterfowl regions in North America. Yet, as I mentioned 
earlier, this area has suffered the significant loss of over 90 
percent of its historical waterfowl habitat--the greatest 
percentage decline on the continent.
    In the mid 1980's, in response to serious reductions in 
North American waterfowl populations, the North American 
Waterfowl Management Plan (NAWMP) was signed by the Federal 
Governments of Canada, the United States, and Mexico. This Plan 
established broad waterfowl population goals and identified 
seven priority areas on the North American continent in need of 
habitat restoration and enhancement. California's Central 
Valley was one of these identified priority areas.
    Two years later, in 1988, a habitat restoration program--in 
many ways like CALFED--was initiated to address NAWMP 
objectives in our Central Valley. This public/private 
conservation effort--known as the Central Valley Habitat Joint 
Venture--carefully established biologically based acreage 
objectives for the preservation, enhancement, restoration, and 
maintenance of waterfowl habitat throughout much of the CALFED 
project area. Recognizing the importance of private landowner 
support to the success of the Joint Venture, a serious effort 
was made to minimize the changes to existing land use necessary 
to meet waterfowl needs. As such, the quantity of acreage 
targeted for wetland restoration was somewhat limited, and 
heavy emphasis was placed upon leaving land in agricultural 
production and simply working with the landowner to increase 
its wildlife values.
    The tremendous loss of Central Valley habitat, as well as 
the critical importance of the region to migratory waterfowl is 
well documented. Clearly, the CALFED Program's ecosystem 
restoration effort could, and should, play a significant role 
in this critical conservation effort. Yet, thus far, the best 
efforts of our Association to elevate waterfowl and their 
habitats to a high priority of the CALFED Program have been 
relatively unsuccessful.
    Congress has already recognized the importance of the 
migratory waterfowl resource through its support of the NAWMP, 
and its authorization and annual funding of the North American 
Wetland Conservation Act (NAWCA)--the Plan's Federal funding 
source. Today, I ask for your assistance in creating a CALFED 
Program which not only helps to meet these needs, but also 
facilitates greater landowner support by providing full Federal 
funding to the CALFED ecosystem restoration effort, and 
earmarking a reasonable portion of those dollars for projects 
which are entirely consistent with the expected habitat 
objectives of the Central Valley Habitat Joint Venture.
    In conclusion, the California Waterfowl Association would 
like to applaud the CALFED team for what, we believe, is a more 
than reasonable effort to design a Program which maximizes the 
role of the private sector in the decision-making process. We 
ask those who may disagree to consider the tremendous 
difficulty associated with obtaining complete public 
satisfaction with a program of this size and scope. We also ask 
Congress to help us fully realize the potential of the CALFED 
Program to appropriately address the needs of our North 
American waterfowl populations and other native plant and 
animal species who share their habitats.
    On behalf of the members of the California Waterfowl 
Association, and waterfowl enthusiasts throughout the North 
American continent, I thank you for the opportunity to come 
before you today, and I would be happy to answer any questions 
you may have at this time.
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