2022 - Page 12 of 14 - Civic Finance

The Abundance Choice (part 6) – Biased, Hostile Media

May 24, 2022/by Edward Ring

You can say this for Michael Hiltzik, the Pulitzer Prize-winning Los Angeles Times columnist for the Los Angeles Times: He doesn’t conceal his biases. When we talked in late November, his skepticism concerning our initiative felt overt. And while that may only have been my subjective impression of our conversation, Hiltzik’s column, published as a “Perspective” piece by the Times on December 2, removed all doubt.

Hiltzik’s column was called “This proposed ballot measure would make you pay for the ag industry’s water inefficiency,” and featured on page two of the print edition’s front section. Hiltzik fired an 1,800-word salvo at our campaign, making assertions, starting with the title, that were designed from beginning to end to convince readers that we were pushing a terrible idea.

In one of the opening paragraphs, Hiltzik wrote “In California, water is for scamming. The newest example is a majestically cynical ploy being foisted on taxpayers by some of the state’s premier water hogs, in the guise of a proposed ballot measure titled the ‘Water Infrastructure Funding Act of 2022’—or, as its promoters call it, the More Water Now initiative.” Nothing subtle there.

Hiltzik’s hits came one after another. He called the initiative “costly and dishonest,” claiming it would “wreak permanent damage to the state budget,” and “force taxpayers to pay for ecologically destructive and grossly uneconomical dams, reservoirs, and desalination plants.”

But Hiltzik’s bias against “wasteful and overly costly projects” may violate his own principles.

In an irony that ought not be lost on a journalist of Hiltzik’s stature, within a few weeks after he attacked our campaign, he wrote a column headlined, “Wall Street can now bet on the price of California water.” But Hiltzik can’t have it both ways. Either the state will help pay for water infrastructure with “wasteful” projects, or the price of water will rise to the point where private investors and financial speculators will end up dominating the industry. They will buy up farmland for the water rights and invest in costly, privately owned water supply infrastructure because they will then own that water and profitably sell it at a high price. That’s already happening.

Our initiative would socialize some or all of the cost of capital projects to increase the supply of water. This would lower the price of water in California. How can Hiltzik warn us about private-sector water speculators right after he trashed our plan to socialize a major portion of the cost of water supply infrastructure?

Of course Hiltzik’s report on our campaign included obligatory quotes from environmental experts, starting with Peter Gleik, co-founder of the Pacific Institute, which has a focus on “water conservation and demand management”—rationing, in other words. A column with more logical integrity would examine that premise. Is rationing enough? Gleik’s comment is predictable, given his background, saying “This proposed initiative is a desperate throwback to the idea that there is still more water that can be extracted from California’s already massively overtapped rivers and aquifers.”

But California’s rivers are not “overtapped.” They have inadequate or obsolete infrastructure which is not suited for an era of less snow and heavy, but erratic, rain. The appropriate new way to tap California’s rivers is by using off-stream reservoirs, percolation basins, and underground aquifers to capture storm runoff. And there is plenty of that.

An authoritative 2017 study by the Public Policy Research Institute describes so-called “uncaptured water,” which is the surplus runoff, often causing flooding, that occurs every time an atmospheric river hits the state. Quoting from the study, “benefits provided by uncaptured water are above and beyond those required by environmental regulations for system and ecosystem water” (italics added). The study goes on to claim that uncaptured water flows through California’s Sacramento/San Joaquin Delta “averaged 11.3 million acre-feet [per year] over the 1980–2016 period.”

Let that sink in. Coming from some of the most respected water experts in California: The average quantity of “uncaptured water” flowing through the Delta that is “above and beyond those required by environmental regulations for system and ecosystem water” averages 11.3 million acre-feet per year. And we were just trying to find another 5 million acre-feet, with many options to accomplish that, including capturing storm runoff.

What Hiltzik wrote was unfair, but he was just one of many. Orange County Register reporter Martin Wiskol published a hit piece in December titled, “Environmentalists sound alarm over proposed water initiative.” If all you read are headlines, that headline sends a clear message (as does the rest of the article). The alarm bells are ringing! This is a bad thing! And we’ve become so used to this sort of bias, it’s hard to even imagine how an equally accurate headline for Wiskol’s article might have been “Grassroots activists propose common sense solutions to California’s water crisis.” Imagine coverage like that.

Leading off the media campaign against our initiative was the San Jose Mercury News with an editorial published on November 19: “Pull the plug on proposed California water ballot measure.” Typical of media and environmentalist critics of our initiative, it appeared the Mercury News’ editors hadn’t even read the initiative, as they wrote, “Historically, California’s water projects have been paid primarily by those who generate the most benefit. But this proposal would flip the scales. It would use general fund tax dollars to primarily increase the water supply for the state’s wealthy Big Ag interests.”

An honest fact checker would rate this assertion as “mostly false.” Our initiative would have funded projects to recycle 100 percent of California’s urban wastewater, at a cost estimated at around $20 billion. Our initiative would have funded remediation of urban aquifers, urban and small town water systems; it would have paid to replace the toxic pipes in the L.A. Unified School District schools. It would even have paid to restore portions of the Los Angeles River to its natural state. The only constraint was not funding, but retaining flood protection. But the Mercury News never bothered to ask.

For that matter, the editors at the Mercury News apparently didn’t even bother to read an article written by Paul Rogers, one of their staff journalists who for decades has been writing about water policy in California. Published two days earlier in their own newspaper, Rogers’ article was the only example of fair coverage of our campaign by a major media property. Rogers described our initiative as one that would “fast track” water projects in the state. But the exception proves the rule.

What would it take to get fair media coverage? It isn’t as if our initiative was anathema to environmentalist values and objectives. And it even called for more government spending, which typically attracts support from mainstream media. So why did the media attack our initiative without any attempt at balance or nuance? Why did they march in lockstep with environmentalists bent on destroying our effort before it got any real traction?

The answer to this may go back to one of the core premises of the modern environmentalist movement, backed up by the media, which is the belief that a middle class lifestyle is unsustainable. Humanity’s harrowing descent into a self-inflicted global “climate emergency” is the dominant message we get from environmentalists today, and it is reflected uncritically by the media.

But the greatest transgression by the media isn’t that they accept and promote this doomsday message and suppress dissenting theories, although that is bad enough. What is worse is that every project environmentalists oppose, even when there is minimal connection between that stopping that project and preventing climate change, is opposed by the media. Examples of this are plentiful.

More housing on single-family lots will cause climate change, they maintain, but building high density apartments and condominiums will prevent it. Constructing roads will cause climate change, but constructing high-speed rail and light rail will prevent it. Responsibly thinning our forests with commercial logging will cause climate change, but letting them get overgrown and burn like hell every summer will prevent it. Had enough? For each of these examples, there are obvious and compelling counterarguments, but it doesn’t seem to matter.

Trying to explain what is behind the collective hostility of the media not just toward water projects that violate the climate emergency narrative, but against all development unsanctioned by environmentalists, is the topic of another essay. But a big part of the problem is there isn’t much of an alternative narrative, because there isn’t much of an ecosystem of organizations promoting an alternative narrative.

Notwithstanding media bias, one of the reasons there aren’t more quotes from experts in favor of more water infrastructure is because there aren’t enough organizations promoting water infrastructure, and the ones that are out there are underfunded, do not allocate resources to mobilizing grassroots support, and behave with an abundance of decorum and a scarcity of passion. By contrast, whenever there is a public meeting for or against a water project, the Sierra Club can be relied on to have mobilized dozens if not hundreds of their members to show up. Where are the statewide organizations that can mobilize hundreds of activists to show up at meetings in favor of more infrastructure?

Maybe that idea was ahead of its time, but life is unaffordable in California for a reason. It’s time now for organizations that support fewer regulations and more infrastructure spending to get more aggressive. Meanwhile, can anyone reading this name one expert in California in favor of more water infrastructure who has managed to make it onto the shortlist of people journalists call whenever something is proposed that might increase California’s water supply? I can’t think of anyone.

Without organizations willing to unite to make the case for more water infrastructure on the same scale as the environmentalist dominated organizations that only promote rationing, all that is left is the competence and integrity of journalists. On that topic, Kristi Diener, a media expert and key member of our steering committee who has interacted with journalists on water issues for many years, had this to say:

“There is a lack of critical thinking in the media. There are many facets to this. If someone makes an argument like, ‘Why should taxpayers pay for capital projects?’ they stop there without exploring the benefits which more than balance the expense. For example, there are projects that enable groundwater recharge and reduce the implementation costs of the Sustainable Groundwater Management Act, dilute toxic contaminants in well water and replenish wells which eliminate the need for the emergency bottled water delivery program, and arrest subsidence and the sinking of multi-million dollar vital infrastructure which reduces the millions of tax dollars necessarily being allocated to these fixes. Because creating water abundance also lowers water bills, and enables our farmers to put more job-creating land back into production, consumers have more to spend. That economic enhancement to other businesses bumps up tax coffers for community services like police, fire, and education. The media relentlessly criticize beneficial water projects, but neglect any independent exploration. Their conclusions and written opinions effectively become predicated on one-sided, dead-end statements. This is lazy, incomplete journalism.”

Diener continued:

“Another facet to the lack of critical thinking occurs due to the fact that California’s water laws, Opinions, Management Plans, Flow Requirements, Acts, systems of water rights and exceptions to those, Endangered Species Act rulings, etc. have piled up for decades, if not all the way back into the 1800s. They are extremely complex and require explanations and interpretations from experts. But the fact-givers who are supposed to be the water experts and the keepers of the knowledge frequently either get it wrong, or intentionally cherry pick the data. The majority of the media is unwilling, or unable, to fact check the fact-givers. For years the media has accepted what they are told, and the result has been generations of widely spread misinformation packed onto the public, who now believe they know the facts. The difficulty in promoting more water infrastructure sometimes is in having to rewind and replace what people think they know to be true, with the parts that have been omitted that make those arguments false.”

It is unlikely the bias and hostility of the media towards more water supply infrastructure will change on its own, or before Californians run out of water. But it is possible that some of the special interests that currently either oppose water projects or sit on the sidelines, will change their priorities and begin to support new projects. Ultimately, and perhaps contrary to their own self-perception, journalists as a group tend to reflect and promote the political preferences of the elite influencers that own or advertise on media platforms. For that reason, we may hope that if the consensus on water policy among elites begins to shift in our favor, that shift will be reflected and accelerated by members of the media.

When it comes to projects to increase the water supply in California, the media today is predictable and hostile. Scarcity is good, development is bad. Somehow they’ve internalized the false impression that more water supplies will only harm the environment, rather than consider the possibility that more water creates more options for maintaining the health of ecosystems. And California’s journalists are apparently blind to the economic fact that water scarcity only serves the interests of investors and speculators who want to privatize and profit from high-priced water. It harms everyone else.

California’s hostile media can change its tune. But it will take enlightened altruism—i.e., demanding more water supply projects without further delay—from a critical mass of California’s moneyed elites, helped along by massive anger from California’s disenfranchised grassroots.

This article originally appeared on the website of the California Globe.

Edward Ring

Edward Ring is a contributing editor and senior fellow with the California Policy Center, which he co-founded in 2013 and served as its first president. He is also a senior fellow with the Center for American Greatness, and a regular contributor to the California Globe. His work has appeared in the Los Angeles Times, the Wall Street Journal, the Economist, Forbes, and other media outlets.

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The Abundance Choice (part 5) – The Fractured Farmers

May 20, 2022/by Edward Ring

“We cannot support your initiative if you include the Delta Tunnel as an eligible project. And to be clear, we also cannot support your initiative if you do not include the Delta Tunnel as an eligible project.”

This statement, which I heard with my own ears sometime in early September 2021, was made by someone painfully aware of the paradox it expressed. It epitomizes how California’s farmers confront the existential threat of not enough water to irrigate their crops. They are bitterly divided over what solutions to support. If your farm is located north of the California Delta, you don’t want Southern Californians to build a giant straw that will suck the Northern Central Valley dry. And if your farm is south of the Delta, escalating restrictions on pumping water into southbound aqueducts from fragile Delta ecosystems makes a tunnel an elegant solution.

Disagreement over how to transport water through, around, or under the Delta is just one of many causes of gridlock in California over water policy, but the scale of the project and the effect it would have make it central to discussions over state water priorities. Taking an unequivocal stand on the Delta Tunnel—for or against—will immediately either alienate or attract about half of California’s farming community, along with every water agency, urban or rural, northern or southern, that is affected by it.

Not only are farmers in the Sacramento Valley to the north generally set against constructing the tunnel, while farmers in the San Joaquin Valley to the south generally support construction. There are also the farmers within the Delta, a vast area of reclaimed land, much of it lying slightly below sea level and protected by over a thousand miles of levees. These farmers, for the most part, oppose the Delta Tunnel because a tunnel will divert water north of the Delta, possibly leading to less available water to irrigate their fields. In this they share the concerns of Sacramento Valley farmers, but they also have an equally urgent concern regarding levee maintenance.

As it is, the Southern California water districts that receive water thanks to the Delta pumps are paying much of the cost to maintain the Delta levees. Once a tunnel bypasses the Delta, the incentive for powerful Southern California water districts to provide financial and political support for Delta levees, and by extension, Delta farming, will disappear. And if that happens, the Delta farmers will lose the allies they need to maintain their levees and resist pressure from environmentalists to systematically eliminate the levees and the reclaimed agricultural land in favor of turning the entire Delta back into a nature preserve.

These conjectures serve just to offer a glimpse into the complexity of the issues affecting whether or not to construct a Delta tunnel. The gridlock over the tunnels has a negative impact on many other projects. For example, if the Delta tunnel is built, the Sites Reservoir—a proposed off-stream reservoir that would capture storm runoff in a valley west of the Sacramento River and north of the Delta—would be able to release its water to customers south of the Delta with none of the pumping constraints currently in place. Without the Delta tunnels, runoff pumped into the Sites Reservoir would be more likely to be reserved for use north of the Delta.

The Many Ways California’s Farmers Are Divided

The distinct and often conflicting interests between northern and southern farmers is further exemplified by the separate peace negotiated between environmentalists and California’s rice farmers, who are nearly all operating north of the Delta. The historical treatment of rice fields in the off-season was to burn the rice straw. From the perspective of modern sensibilities this was a rather unenlightened practice. Every year, smoke and soot from nearly 500,000 acres of burning fields would foul the air for hundreds of miles. But starting in the 1990s, in cooperation with environmentalists, California’s rice farmers began to flood their rice fields after the harvest instead of burning the straw, creating winter season wetlands. The practice spread, and by 2010 open field rice burning had been reduced by 90 percent. From October through February, the fallow fields become wetlands for migratory waterfowl.

This is a laudable accomplishment. Storm runoff is diverted, helping to prevent flooding. Aquifers are replenished as the sequestered water percolates. Rice straw decomposes and enriches the earth, instead of fouling the atmosphere. Migratory waterfowl along the legendary Pacific Flyway are given massive areas of new habitat. Along the Sacramento River, these flooded areas are now even being experimented with as potential habitat for salmon hatchlings.

This is a win-win, but it also may serve to further divide the farming community between north and south. Farming interests in the north, where the rice farmers are very influential, have less incentive to rock the boat. Environmentalists are powerful. They don’t want new water infrastructure and they believe farming at the current scale in California is not sustainable and must be reduced. Meanwhile, California’s rice farmers have made a deal with environmentalists, which could be in jeopardy if they support anything that environmentalists oppose. When they’re not coming after you, that is a rational business decision.

The problem with all of this becomes clear when you adopt a statewide perspective. And as we have seen, conservation is simply not enough to solve California’s challenge of water scarcity. There are solutions that can preserve farming in the San Joaquin Valley that ought to constitute reasonable compromises environmentalists can accept. But these solutions aren’t as obvious or as affordable as letting fallow rice fields accept winter floodwater in the water-rich north. A lot is at stake.

The Sacramento Valley, for all of its vast agricultural capacity, is only 40 percent as big as the San Joaquin Valley. North of the Delta in the Sacramento Valley there are 2.1 million acres of irrigated farmland. That’s a lot, but it is dwarfed by the San Joaquin Valley, where there are over five million acres of irrigated farmland. Finding a way to preserve this industry, which is the reason Californians consume affordable food and export food all over the nation and around the world, is something that ought to unite California’s farmers to work towards solutions for all of them, not just those north of the Delta.

Another geographic schism occurs within the San Joaquin Valley, where the impact of water allocations and regulations affect farmers on the west side much differently from farmers on the east side. This is evident when viewing a satellite image of the San Joaquin Valley. All of the farmers in the San Joaquin Valley are reliant to some extent on groundwater, to which access has also become problematic for them. And all of the farmers in the San Joaquin Valley also rely on northern water from the aqueducts. But the older, smaller farms on the eastern side of the valley are also able to tap surface runoff from the Sierras, which has been their historical source of water for farm irrigation. To the west, the much larger farms have no option but to rely almost exclusively on water from the California Aqueduct.

It isn’t just geography that divides California’s farmers. They are divided by what crops they grow, with rice only the most obvious example among many. In each case, the economics differ. Farmers growing crops that, for the same water input, have a high value, such as pistachios, can adapt to water restrictions that would put farmers specializing in row crops such as tomatoes out of business. On the other hand, farmers growing perennial crops in orchards and vineyards cannot skip a year of irrigation, or their trees and vines will die. Farmers planting annual row crops can choose which fields to leave fallow in a dry year.

Finally, farmers in California are divided by the scale of their operations. As regulations and restrictions have increased relentlessly over the past few decades, the size of the farming operation that can bear the overhead cost for compliance has grown proportionately. Wayne Western, Jr., who farms row crops in the San Joaquin Valley, said that a 10,000 acre farm used to be considered big, certainly big enough to apply economies of scale sufficient to adequately spread the cost of capital equipment and compliance overhead. Now a 10,000 acre farm is considered economically marginal. Many agribusiness holdings today are in excess of 100,000 acres, and consolidation is ongoing.

When it comes to which water policies and solutions to support, this division between big and small farmers is possibly the biggest source of disunity. The financial interests of large farms are not furthered by a thriving, diverse, and decentralized farm economy. To the extent very large agribusinesses supported, or considered supporting our initiative, it was not just an act of pure self interest. An environment of scarce and expensive water, and other inputs which have also seen sharp increases in price, are an opportunity for large farming corporations to buy out small farmers and increase their holdings. An operation with economies of scale and a strong balance sheet can withstand financial hardships that put the small farmers out of business. At the same time, as will be seen, scarce and expensive water makes speculation on land for its water rights an attractive proposition.

Failed Attempts to Increase Water Supply Infrastructure

If California’s farming community is divided over what to do about water, they are also frustrated by several recent attempts to increase their supply of water. All of them failed, or, in the case of Proposition 1 in 2014, are failures to-date. When Proposition 1 was approved by over two-thirds of California voters, the expectation was that the storage projects it specified would be funded and built. Not only have none of them been built so far, the Temperance Flat Dam proposal—which would have captured storm runoff on the San Joaquin River, above an already existing dam—was all but killed by the bureaucrats in Sacramento. How they performed this sleight of hand is illustrative of why many farmers feel betrayed by their own state government.

When the California Water Commission began to evaluate the projects approved by voters in Proposition 1 for funding, they came up with a scoring system whereby they awarded points based on “beneficial use.” But they defined beneficial use in a manner that overemphasized environmental benefits versus benefits to farm and urban water consumers. They then awarded funds to each voter-approved project based on the points each project earned. Temperance Flat, under these manipulated criteria, did not score very well, and the amount of money it was awarded was only a small fraction of what was needed.

By the time we began speaking with farmers about our water initiative, Proposition 1 in 2014 was just one recent example of how their efforts to affect water policy via an initiative had been thwarted. In 2018, proponent Jerry Meral had succeeded in putting Proposition 3 on the ballot. This expansive proposition, which Meral spent several years cobbling together in consultation with every interested party he could possibly identify, had something for everyone. In the $8.9 billion bond package, there was $855 million to repair aqueducts, $685 million to develop groundwater storage, and $472 million to develop and repair dams. The big bucks, $2.9 billion for “watershed and fisheries improvements,” and $3.0 billion for “safe drinking water and water quality,” may not have increased California’s water supply, but could be supported based on the improvements they would deliver to water quality in the state. Farmers supported Proposition 3 with donations and endorsements, joining a coalition that included every major environmental organization except for one—the Sierra Club. In a very tight race, Proposition 3 failed by only 155,000 votes out of nearly 12 million votes cast, a losing margin of only 1.3 percent.

There was yet another attempt to go to voters to fund water supply improvements in 2020, the “Dams Not Trains” initiative, led by proponent Aubrey Bettencourt. As its title indicates, this initiative would have redirected funds allocated for high speed rail to funding water storage infrastructure. This innovative bill also called for a redefinition of “beneficial use,” something we emulated in our initiative, and it took responsibility for approving water projects away from the California Water Commission, something we decided against. Once again, and for the third time in six years, many of California’s farmers stepped up with their donations and endorsements, but this time, the initiative failed to qualify for the ballot.

No wonder finding support from farmers proved to be problematic. They’ve been betrayed and they’ve been frustrated with initiative efforts three times in the past eight years, and many of them feel all that money was wasted. But the reality for most of them is only going to worsen. They face a hostile, do-nothing legislature, a hostile press, and an environmentalist movement that wants to eliminate most of them. California’s farmers will either successfully advocate for massive investment in new and upgraded water infrastructure, or, taking into account how many small farmers still operate in California, most of them will go out of business. But it isn’t as if, collectively, they don’t still have the resources for another fight.

Agribusiness in California directly employs over 800,000 people, with agricultural cash receipts estimated in 2020 at $49 billion. The indirect employment and GDP contribution as agricultural products are distributed and retailed, and as farm employees participate in the economy, multiplies those amounts. California’s farm industry may be fractured, but each of its constituent sectors have trade associations, with annual lobbying and political campaign budgets in the tens of millions and marketing budgets in the hundreds of millions.

Without more water infrastructure in California, i.e., without a comprehensive statewide plan to spend $50 billion or more, right away, on an all-of-the above program of water investments ranging from new reservoirs and reservoir upgrades to recycling all urban wastewater, the future for most of California’s farmers is grim. California agribusiness needs to think big, identify what it is they agree on while taking into account the needs of the entire state, pool their resources, form stronger alliances with urban water agencies and others; they need to identify, expose and resist environmental extremism, and they need to unite and fight for the changes necessary for all of them to survive and thrive.

This article originally appeared on the website of the California Globe.

Edward Ring

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The Abundance Choice (part 4) – Crafting a Water Initiative

May 17, 2022/by Edward Ring

To be fair, Assemblyman Devon Mathis didn’t come up with the idea of allocating a percentage of the state budget to accomplish a policy priority. He got that idea from the California Teachers Association, which in 1988 convinced voters to approve a constitutional amendment that required a minimum of 40 percent of California’s general fund to be spent on K-14 education. But Mathis did have the temerity to be one of the first legislators to emulate the concept when, in 2019, he introduced to the state assembly the “Clean Water for All Act,” which would have given voters a chance to allocate another slice of the general fund to a specific purpose, in this case, funding water infrastructure.

Assembly Constitutional Amendment 3 died in committee, but the precedent was set. Ballot box budgeting was back in play. When I talked with Mathis about our initiative in July 2021, it was clear that water was still a top priority for this moderate Republican from the San Joaquin Valley. And as soon as he brought up the “two percent solution,” I knew we had something we could run with.

Up to that point, we had been on the right track with our focus on getting funding for projects that would increase the supply of water to Californians, but we had been planning for the initiative to rely on bond financing. The problem with this approach was that the amount we estimated California needs to spend on water infrastructure starts at around $50 billion, and voters have never approved a bond at anywhere near that amount. Two percent of the state general fund, on the other hand, sounded like a reasonable amount, if not a pittance. After all, for a mere two percent of the state general fund, water scarcity in California would be eliminated forever.

These numbers were big. And they worked. In July 2021, the state general fund budget was projected at $196 billion for the 2021-22 fiscal year. Two percent of that would be $4 billion per year. And here is where we decided to add some creativity, by providing for half of that $4 billion, or one percent of the general fund, to be used to pay principal and interest on bonds. At four percent interest spread over 30 years, that would unlock $35 billion in immediate funding. Even at five percent over 20 years, the state would have immediate access to $25 billion.

These amounts would be sufficient to allow the state to begin funding several major projects at once. They would be sufficient to permit the state to provide 100 percent funding to projects of statewide benefit where local matching funds were not available, but there would also be plenty left over to fill in the required funding where the local or regional partners had raised a significant portion of the project cost but couldn’t fully fund it on their own. And while this $2 billion per year would be committed to financing $25 to $35 billion in bond funding, there would still be the other half of the two percent stream, another $2 billion per year, available to fund hundreds of smaller projects and fill in wherever needed.

Uniting Farmers and Urban Water Agencies

The steering committee we formed included people from urban water agencies as well as from agriculture. One of the founding members was Kristi Diener, part of a farm family in the San Joaquin Valley who now have to cope with unprecedented water scarcity. The Facebook group that Kristi founded, California Water for Food and People, has a mission “To unite in one place all of California’s water-for-food-and-people advocates, coalitions, organizations, groups, bureaus, alliances, growers, etc. wishing to come together to form one large action force, to compel immediate long term solutions to protect and provide water for humans.” With over 24,000 members, for several years they have been sharing information and educating the public and politicians on the topic of water policy. Kristi was one of the first people I called, and together we recruited several other participants.

Other notable steering committee participants included three experienced urban water agency executives and directors based in Southern California: Steve Sheldon, president of the Orange County Water District, Lisa Ohlund, recently retired general manager of the Eastern Municipal Water District who now consults for several water agency clients, and Shawn Dewane, vice president of the Mesa Water District. Three more members of the farming community were significant participants, including Martin Chavez, a member of a multigenerational farming family, and a board director of the Stratford Public Utilities District, Wayne Western Jr., the general manager of the Hammonds Ranch which is located in the absolute heart of the San Joaquin Valley, and Geoff Vanden Heuvel, director of regulatory and economic affairs at the California Milk Producers Council.

Getting this group together on one steering committee, along with others, insofar as they represented farming interests on one hand and Southern California urban water district interests on the other, was itself an accomplishment. These groups do not necessarily see eye to eye on which water policies and water projects should be prioritized in California. But within our committee, there was strong agreement. Everyone saw the urgency of the challenge California faces, even if the politicians and water bureaucrats in Sacramento still do nothing but ratchet up rationing and hope for rain. Our goal was to come up with an initiative that would create water abundance.

We recognized early on that if we consistently maintained a statewide perspective that treated water as fungible, that would make agreement on an initiative much easier. From a statewide perspective, if an urban water recycling project results in 250,000-acre-feet per year of wastewater being reused, that means 250,000-acre-feet of water elsewhere in California no longer has to be diverted and imported via aqueduct into that urban area. Similarly, if an off-stream reservoir captures storm runoff and yields another 250,000-acre-feet of water each year for farmers, that frees up 250,000-acre-feet that can be available for urban use or, for that matter, released into rivers for ecosystem health.

Another fundamental provision our committee agreed on very early was to build a sunset provision into the two percent mandate. Once new water projects were supplying 5 million acre-feet of water per year, the two percent allocation would go away. We stipulated that these new projects could be funded entirely without any money from the general fund, or make exclusive use of general fund allocations. What mattered was that new water infrastructure projects would yield 5 million-acre-feet of additional water to Californians. We didn’t care how they would be paid for.

Between July and September 29, 2021, when our final amended version of the initiative was turned in to the California attorney general, we worked nonstop on crafting this initiative. We regularly emailed updated drafts to a list of experts around the state that grew to more than 300 recipients. The initiative went through 12 full revisions and countless minor revisions, and we worked hard to cover all eventualities. Among the hundreds of experts we talked with, many scenarios were shared. As these mostly cautionary what-ifs piled up, the provisions we added piled up commensurately.

For example, we added a redefinition of “beneficial use,” stipulating that it would include urban and agricultural use and not be restricted to environmental benefits. We stipulated that the water supplied from new projects would only count towards the 5 million-acre-foot goal if it was for agricultural and urban use. We also stipulated that any new government regulations that further restricted groundwater or river withdrawals—or demolition of water-yielding assets such as reservoirs—would trigger a proportional increase to the 5 million-acre-foot per year goal.

An “All of the Above” Approach to More Water

Finally, we agreed that it was important to keep all water supply solutions within the project categories eligible for funding, and instead of picking specific projects, we carefully defined the eligible categories. These included projects to expand reservoirs, build new reservoirs, wastewater recycling plants, desalination plants, as well as facilities for runoff capture, and aquifer recharge and recovery. Also included were the conveyances—new or upgraded pipelines and aqueducts—necessary to transport this new water from source to consumer.

In one concession to picking specific projects, and out of respect both for the will of the voters and the many people around the state who had relied on this going through and been let down, we specified that the top priority for funding would be those water storage projects approved by voters in 2014. As previously noted, $2.7 billion was allocated for those projects, including the desperately needed Sites Reservoir, and as of May 2022, not one of them has yet broken ground.

There was much more. In our discussions with board members and executives at water agencies, the giant Metropolitan Water District of Southern California in particular, we agreed that 1 million of the 5 million-acre-feet goal could be achieved through making funds available for additional urban and agricultural conservation programs. We believed this was an appropriate compromise, since it acknowledged that conservation still has a vital role to play in solving California’s water crisis, but still preserved 80 percent of the goal—4 million acre-feet of additional water per year from new water supply projects.

The folks at Met, and others, suggested we include priority funding for disadvantaged communities. We not only added that as a priority criterion for which projects that conformed to the eligible project categories would first receive funding, but we modified our project categories. In addition to the categories explicitly defined to increase the supply of water—groundwater recharge and recovery, wastewater and stormwater reuse and recycling, upgrading existing and constructing new reservoirs, and desalination—we added the following:

“(5) Water conveyance development, maintenance, or expansion, for the delivery of clean, safe drinking water for homes and businesses, and water for agricultural uses consistent with area-of-origin water rights;

(6) Other projects designed to increase the clean, safe and affordable supply of water to all Californians with emphasis on California’s disadvantaged communities, and other projects designed to increase conservation.”

The promise embodied in these two additions cannot be overstated. With these new categories included, urgently needed projects that lack any hope of getting rapid access to adequate funds could be built. One compelling example is the more than 400 small towns and school districts in California that do not have access to safe drinking water. Another is the need to replace the toxic pipes in the older schools in the Los Angeles Unified School District. That project will cost tens of millions—if not more—and they have no idea where they are going to get the money to do it.

This is a brief summary of what we came up with. There was much more to this initiative that weighed in at 8,071 words when completed. It is unlikely it could have achieved our objectives if it had been any shorter. We had engaged a lead attorney with extensive experience in California constitutional law and specifically in writing ballot initiatives. During the research phase prior to our campaign launch, various attorneys reviewed his work, all of them expert volunteers, involved in farming, water policy, water agencies, construction unions, and construction contractors.

The length of the initiative was dictated by the necessity to include a constitutional amendment component in order to, among other things, allocate two percent of the state general fund to water projects, and a statutory component in order to allow half of that money to be used to pay principle and interest on new water bonds. Other lengthy sections were necessary to include modifications to the Coastal Act and the California Environmental Quality Act, without which we were convinced this initiative would sail straight into gridlock just like Proposition 1 has for the past eight years, making all the trouble of gathering voter approval worthless. And then there was the actual meat of the initiative, the definitions of eligible project categories. Despite its length, this long-winded initiative was, and is, a highly refined product.

In subsequent installments the reasons for what we came up with, and why, to address concerns and objections from labor unions, environmentalists, and various and often competing farming interests. But throughout the process, we adhered to a few fundamental guiding principles: The policies necessary to solve urban water challenges and farming water challenges are not mutually exclusive. A statewide perspective is essential, and state funding should support projects to the extent local ratepayers cannot cover the costs. Conservation is not enough, and it is time now to spend tens of billions of dollars to bring California’s water infrastructure, still the marvel of the world, into the 21st century.

This article originally appeared on the website of the California Globe.

Edward Ring

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The Abundance Choice (part 3) – The Mechanics of Ballot Initiatives

May 15, 2022/by Edward Ring

By the spring of 2021, it was obvious the state legislature was not going to change its inadequate approach to water policy. As the state faced another year of drought, restricting water use was the only solution being taken seriously in Sacramento. And at the same time as cities were being told to prepare to ration water, farmers faced new regulations restricting not only how much water they could divert from rivers, but also how much groundwater they could pump.

For this reason, and after talking with people all over California whose businesses and jobs depended on a reliable water supply, I decided to form a group of volunteers to promote a ballot initiative that would focus on funding projects to increase California’s supply of water. The tentative name for our campaign, which we eventually adopted, was More Water Now.

The potential for initiatives to fundamentally change the political landscape in California is well documented. The now legendary Prop. 13, approved by voters in 1978, is the classic example. Prop. 13 limited property tax reassessments to two percent per year. And thanks to Prop. 13, if you own your home long enough, eventually property taxes become a manageable burden, instead of an inevitable eviction notice. California is one of 15 U.S. states that allow citizens to gather signatures from registered voters and qualify both statutes and amendments for their state ballot. But to say this is not easy is an understatement.

In California, petitions proposing initiative statutes must be signed by registered voters and the total signatures collected must equal at least five percent of the total votes cast for the office of Governor in the most recent gubernatorial election. For 2022, that amount would be 623,212 signatures, based on the turnout in the 2018 election. But as will be seen, we quickly realized a statute wouldn’t be enough to change water policy in California. We were going to have to ask California’s voters to amend the state constitution.

Using the initiative process to amend the state constitution is a much bigger deal than securing voter approval for a new law. Once the state constitution is revised, existing laws and proposed laws have to conform to the new amendments. And an initiative, whether it is a constitutional amendment or a statute, can only be overturned by subsequent statewide voter approval of a new initiative that repeals it. Because the political impact is so much greater with an amendment, petitions proposing initiative constitutional amendments must collect signatures numbering at least eight percent of the total votes cast for the office of Governor in the most recent gubernatorial election. For 2022, that amount would be 997,139 signatures.

As if that’s not enough, to ensure the verification process doesn’t turn up so many invalid signatures as to doom the effort, petition proponents typically have to gather at least 30 percent more signatures than the required total. This takes into account the spoilage caused by duplicate signatures, improperly filled out petitions, and those signatures from people who were not registered to vote. This means to qualify an initiative constitutional amendment for the state ballot, it is necessary to gather at least 1.3 million signatures.

These are daunting metrics. Filing an initiative is easy enough. Once you’ve written the language, you bring it to the California Office of the Attorney General, pay a $2,000 fee, and submit it for review. The Attorney General will prepare a “title and summary” for the initiative, which must appear on the signature petition. The AG’s office then refers the initiative to the Office of Legislative Analyst, which prepares a report on what they estimate to be the financial impact of the initiative. Typically during this phase the state’s legislative analysts ask questions of the initiative proponents. The total review process normally takes 65 calendar days from the date of filing to the date when the initiative is cleared for circulation. And that’s when the fun starts.

What our campaign was confronted with on the day we were cleared for circulation, November 1, 2021, was a six month period within which we would have to collect 1.3 million signatures from people registered to vote in California. For the math inclined, that equates to 7,222 signatures per day. If one assumes a 12 hour day, seven days per week, that’s 602 signatures to be collected every hour, for 180 days in a row. We had until April 29 to canvass the state and deliver those numbers.

The sheer logistics of a campaign on this scale mean that professional consultants have to be involved, including professional signature gatherers. Even Prop. 13 back in 1978, when “only” 449,846 valid voter signatures had to be verified, relied on professional consultants and professional signature gatherers to supplement their mostly volunteer driven campaign. A more recent example of one of the only successful signature gathering campaigns that was mostly volunteer driven was the 2020 attempt to force Governor Newsom to face a recall election. That recall effort, whether you consider it infamous or merely a healthy expression of democracy, made history, with unpaid volunteer signature gatherers contributing well over one million of the over 1.6 million validated signatures. But the exception proves the rule.

Normally, the cost for professional signature gatherers is what the market will bear, and a nationwide industry exists to serve initiative campaigns. In California in 2020, the price per signature was quoted to us by an assortment of credible bidders at around or just under $4.00 per signature. This equated to a total cost, just for the signatures, of $5.2 million. While that’s the biggest single cost, it doesn’t end there.

Add to this the cost to print petitions, which depending on the size of the petition, can range as high as $.20 per petition even in quantities in the hundreds of thousands, along with the cost of shipping petitions all over the state, and expect that to add at least another $100,000 to total costs. There is also the cost to do preliminary verification of every signed petition to avoid excessive rejections during the formal verification process, as well as the cost to sort the petitions into bundles to be submitted to each county. With tens of thousands of signatures arriving at a central processing center on any given day, this is also a process that requires professional support. Expect preliminary verification to cost about $.35 per signature, which pushes costs up by another $450,000 or so. These are just the basic costs.

The chart below summarizes the costs we projected when still in the planning stages of our initiative qualification campaign. The cost per petition ended up being $0.17 each, not $0.14 we had initially estimated, because the word count grew beyond our expectations which meant more paper. The cost per signature, $3.60, was a quote I believe would have been met if we had been able to come up with funding by the day our petition was cleared for circulation. In retrospect, the hybrid effort (column one) that projected 360,000 signatures coming from volunteers was not realistic, although we always showed donors both scenarios, and made it clear that we had a higher confidence in the scenario (column two) that relied exclusively on professional signature gatherers.

For a serious initiative qualification campaign, reality descends on proponents with every passing day. Major factors affecting the total cost come into play very quickly. In particular, a quote that comes in under $4.00 per signature is something that expires at a rate proportionate to how much time is left. To make it onto the November 2022 ballot, initiative petitions have to be turned in by June 24, 2022 at the latest. Our deadline of April 29, based on our initiative having been cleared for circulation 180 days earlier on November 1, put us just in front of that deadline. The meant we were going to be operating in the thick of the initiative season, and the longer it took us to gather the funds needed to launch our signature gathering, the more it was going to cost per signature.

The general rule for this year went something like this: With the full six months, your best price per signature will be around $4.00 each. With five months, expect to pay at least $6.00 per signature. With four months, expect to pay $8.00 per signature, and with only three months to work with, expect to pay $10.00 per signature or more. After that, it becomes impossible no matter how much you spend, because signature gathering firms operating at full capacity can rarely deliver more than 150,000 signatures per week.

It wasn’t always this hard, even if it has never been easy to qualify an initiative. Up until a few years ago, the cost per signature would escalate according to the same general timeline, but from a much smaller base. Signatures could be gathered for $2.00 each, or possibly even a bit less, and campaigns that ultimately spent $5.00 or more per signature were unusual. This changed for several reasons. There was the reality of a more hostile public environment for gathering signatures, including lawsuits by owners of retail stores and other common gathering venues against signature gathering firms. There was the arrival of companies like Uber and Lyft that were completely indifferent to how much they bid up the price to attract signature gatherers for their initiative. We had to account for the impact of AB 5 which caused some signature gathering firms to stop operating in California rather than have to argue in court why their signature gatherers still fit the new definition of independent contractors. Finally, of course, there was the COVID driven transformation of society which overall finds more people conducting the business and pleasure of life online, and fewer people venturing outside to fewer places less often.

Because signature gathering has become so expensive, there is a point at which the cost of gathering signatures via direct mail becomes competitive with the cost to pay signature gatherers. Depending on the cost per direct mail piece and the rate of response, that moment of crossover can vary, but the equation is simple algebra. There are two distinct advantages to direct mail, assuming your petition isn’t a magnum opus that weighs over one ounce, and assuming you know your target voter and have done sampling so you have a response projection you can rely on. First, if necessary you can wait until much further into the 180 day period to launch your campaign. Unlike professional signature gathering that in most practical circumstances is limited to producing 150,000 signatures per week, a mass mailing of several million petitions can go out 30-40 days before the deadline, and if enough of them get signed and returned, your initiative will qualify. The other advantage of direct mail is that it constitutes a fundraising opportunity. Anyone willing to open your piece, read your cover letter, unfold and sign your initiative petition and follow all the instructions therein, is a hot prospect to also enclose a check with a donation. Direct mail campaigns for initiative signatures can defray a meaningful percentage of their costs when they include an appeal for donations in the package they send.

With a certain naivete, our early strategy was to rely on the virtue of our initiative – which after all was the product of an encouraging consensus we achieved between several key interest groups – along with the credibility of the signature gathering firm for which we had obtained a price for signatures. Our presumption was that by covering these two fundamentals, we had delivered all the necessary basics of an initiative campaign that donors would support. We prepared a website, commissioned a voter survey by one of the best polling firms in the state, prepared a donor package, and started dialing for dollars. How that played out will be described in later chapters. But a few lessons learned can be shared now.

First, raise money at the same time as you write the initiative. While there ought to be a billionaire donor out there that agrees that there is an urgent need for more water infrastructure – after all there are 186 billionaires living in California – that sort of fortuitous lightening probably won’t strike. The reality is that whoever ends up funding an initiative campaign is going to want to be involved writing it. While we did that, we didn’t secure commitments in advance.

Recognize that volunteer driven efforts depend on tens of thousands of people, each of which has to be willing to spend hundreds if not thousands of hours sitting in parking lots and parks, in front of shopping centers and libraries, clutching their clipboards filled with blank petitions and accosting passerby. To get significant numbers of signatures using volunteers requires more than writing an initiative that reflects a popular sentiment that polls well. There has to be a passionate, preexisting grassroots movement of unusual if not historic magnitude. Don’t count on it. Even well organized volunteer signature gathering efforts rarely collect more than a couple hundred thousand signatures. Without also hiring a professional signature gathering firm to do the rest of the work, these efforts fail.

If you still want to bypass or at least defray much of the expense of paid signature gatherers, keep the initiative short enough to print on just two sides of a single page. In our case, that was impossible. But the advantages of short petitions are compelling, and the shorter the better. A single page petition can be downloaded from a website by any registered voter, anywhere. They can sign it and mail it to the campaign. They can also print them and circulate them as a volunteer signature gatherer. This eliminates one of the primary logistical obstacles facing volunteer driven initiative campaigns, which is printing and delivering petitions to thousands of volunteers all over California. For direct mail, a short petition, no more than a few pages printed on one folded sheet of paper, can be mailed along with a cover letter and reply envelope and stay under one ounce, greatly reducing postage.

Finally, consider hiring political consultants, because most big donors will not take a campaign seriously that hasn’t engaged a professional political consulting firm. If you really want to win, consider hiring a firm that typically works for Democrats. No initiative in California has a chance of getting voter approval if it isn’t bipartisan, so why not shop for services among the consultant core that knows how to win? California’s Republican consultants, even those among them that do win campaigns, operate in an ecosystem that is a small fraction of the size of California’s Democrat consultant ecosystem. That means far less access to donations, institutional support, and far fewer firms to choose from. Not only are Democrat political consultants better connected politically and financially, and not only do far more of them know how to win and do it all the time, but having one of them working for you puts an imprimatur on your campaign, instead of a stigma.

That’s life in California. Adapt or die.

This article originally appeared on the website of the California Globe.

Edward Ring

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The Abundance Choice (part 2) – The Problems With Indoor Water Rationing

May 12, 2022/by Edward Ring

Perhaps the biggest example of misguided water policy in California are the escalating restrictions on indoor water consumption. As will be seen, the savings these restrictions amount to are trivial in the context of California’s total water consumption, yet are imposed at tremendous cost both in quality of life and in the required economic sacrifice. Despite alternatives that are objectively more cost-effective, California’s water policy continues to go down the path of rationing indoor water use.

In 2018 the California Legislature enacted laws to restrict residential water consumption, in the form of Senate Bill 606 and Assembly Bill 1668. For urban water districts, the laws “establish a standard of 55 gallons per person per day until January 2025, and then to 50 gallons per person per day in 2030.”

It is fair to point out that some of the more alarmist reactions to these mandates are unfounded. For example, the laws will only measure aggregate use within a water district, which means that how individual users are treated if they exceed the per person indoor water limits is left up to the local utilities. That’s hardly reassuring, but at least it leaves some wiggle room. On the other hand, it creates a powerful disincentive for water agencies to invest in developing an increased, more resilient water supply, because with aggregate maximums limiting how much water the agencies can sell, they’ll think twice before adding capacity. One of the dangerous consequences of this, yet again, is a system that is less equipped to withstand serious disruptions to supply.

In any case, enforcing these mandates will not have a significant effect on overall water consumption in California, and the cost of implementing them does not make financial sense compared to other ways those funds could be invested.

To estimate the statewide savings that could be achieved by imposing a 55 gallon per person limit on indoor water use, first consider the current statewide indoor water consumption as estimated by the California Department of Water Resources. This total has been fairly consistent over the past ten years at around 2.5 million acre feet per year. This yields somewhat surprising results. Based on a population of 40 million, as shown in the calculations on the chart, Californians are only using about 60 gallons of water per day, per person, indoors.

This indoor use varies by region, of course, but in aggregate, Californians have already nearly achieved what the state legislature has imposed on residential consumers as a new water conservation mandate. Perhaps that explains what’s next. Built into AB 606 was a provision to lower indoor water use from 55 gallons per day to 50 gallons per day by 2030. The next chart shows the statewide savings pursuant to this legislation. At 55 gallons per day, total statewide indoor water use is only reduced by 233,996 acre feet per year. At 50 gallons per day, total statewide indoor water use is reduced by 458,178 acre feet per year. To put this amount into perspective, based on the most recent data available, total urban water use in California has averaged 7.8 million acre feet per year. Which means that cutting the average residential indoor use by 17 percent (60 gallons per person per day to 50 gallons per person per day) will only yield a 5.9 percent reduction in overall urban use.

This realization has led to more ambitious proposals, such as Assembly Bill 1434 proposed by Laura Friedman (D-Glendale) in 2021. Friedman’s bill would have accelerated the pace of imposing restrictions on indoor water use and would have further reduced the allowed amounts. It would have lowered per person indoor water use to 48 gallons per day by 2023, to 44 gallons per day by 2025, and to 40 gallons per day by 2030. The bill did not pass, but a similar version will surely resurface in 2022. But how much does reducing residential indoor water use per person from 60 gallons per day to 40 gallons per day end up saving? Again, the results are unimpressive. In exchange for a 33 percent reduction in residential indoor water use, 906,542 acre feet per year of water are saved. This equates to an 11.6 reduction in total urban water use, and it must be noted that urban water use as a whole only represents 11 percent of total water diversions in California. Which is to say, a reduction of 906,542 acre feet of residential indoor water use equates to a reduction in California’s statewide water consumption of 1.2 percent. But at what cost?

It isn’t the intent of this analysis to disparage the achievements already made in indoor water conservation. But most of them have already been made, and the ones swiftly moving from recommended to mandated in many cases do not work very well. Most people would agree that low flow toilets, for example, are a good idea. If they don’t work on the first flush, it’s easy enough to flush them twice. But low flow shower heads and kitchen faucets cross the line into genuine inconvenience. The inadequate flow in a shower head makes it nearly impossible – especially with soft water – to rinse shampoo out of long hair. The constrained flow in a kitchen faucet means waiting sometimes several minutes before hot water arrives. Circulating pumps to remedy this don’t work very well, and the cost of flash water heaters is beyond the reach of most households. But it’s with washing machines that the misanthropic cruelty of mandating unproven appliances is clear for all to see. These machines damage fabric, they don’t clean very well, and their cycles take too long. The reality of owning and maintaining water efficient washing machines is the antithesis of the legendary Maytag television advertisement, where a repairman sits by the phone that never rings, because the machines never break. The ad was true back then, but not today. Not only do many of these machines have useful lives measured in years instead of decades, but the newest models are being marketed as “connected” appliances.

Volumes could be reported on the rapidly diminishing returns that currently accrue to water efficient appliances, once they reach beyond practical and reasonable limitations. But why are we having this debate? Doesn’t all that water flow down the drain, through the sewer mains, and into a water treatment plant where it is purified and returned to the rivers and aquifers? And in the case of California’s massive coastal cities, why isn’t treated wastewater, which currently is discharged into the ocean, instead treated to higher standards and pumped right back upstream? Existing treatment processes allow up to 90 percent of urban wastewater to be be reused. As will be seen, this solution is already being implemented in Orange County, where next year, what is already the world’s largest wastewater treatment facility for indirect potable reuse will complete its final expansion to recycle and reuse 100 percent of their wastewater. But this solution should be implemented in every county in California, starting with the coastal counties.

Current policies aimed at cutting urban water use are misguided with respect to indoor residential water use not only because the water savings are insignificant when compared to total statewide water use, or because indoor residential water can be reused over and over again merely by upgrading the treatment of the wastewater. They are also misguided because the economic cost of indoor water rationing is more than the economic cost of constructing upgrades to urban water treatment plants. This isn’t immediately obvious, since if urban water treatment plants aren’t upgraded, consumers don’t have to foot the construction bill through higher rates. But they will pay anyway. To accurately monitor indoor water consumption, urban water agencies are planning to install a second meter on every residential property. That cost will appear in the rates they pay. Moreover, water utilities only spend about 0ne-third of their budget on water, with the other two-thirds going mostly to pay overhead. This means that as residential water consumers use less, their water bills will not go down. They can’t. It would break the water utilities.

Another significant economic cost to ratepayers is that even if the utility manages to deliver less water without raising rates too much, there is still the burden imposed on every household to retrofit their appliances to conform to the new water mandates. It is not possible to reduce residential indoor water consumption by 33 percent without buying every gadget the major appliance manufacturers can possibly come up with. These new “connected” water appliances will cost every California household thousands of dollars, with new and ongoing payments for software updates and maintenance and earlier replacement that the old appliances never imposed on their owners. And those residents who cannot afford these appliances will be subsidized by the ones who can, with that cost reflected either in higher water rates or higher taxes.

There is an alternative. Instead of rationing residential water use, direct this economic value to investment in infrastructure. If the State of California subsidizes the construction of wastewater recycling upgrades, reducing indoor water consumption no longer has to be a legislative priority. This principle, that state investment can reduce the capital cost to local and regional water agencies, has applicability across all areas of water infrastructure. It is based on the idea that if a society must bear an economic cost to overcome water scarcity, that cost can either be borne on the front end by upgrading water infrastructure, or on the back end by imposing rationing and punitive costs on end users.

The premise of the initiative we developed was to adhere to the first option: Let the State of California again build a water infrastructure that solves the challenge of water scarcity, capitalizing on everything we’ve learned since the marvelous system we rely on was first constructed in the past century.

This article originally appeared on the website of the California Globe.

Edward Ring

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The Abundance Choice (part 1) – California’s Failing Water Policies

May 10, 2022/by Edward Ring

In October, and then again in December 2021, as the third severe drought this century was entering its third year, not one but two atmospheric rivers struck California. Dumping torrents of rain with historic intensity, from just these two storm systems over 100 million acre feet of water poured out of the skies, into the rivers, and out to sea. Almost none of it was captured by reservoirs or diverted into aquifers. Since December, not one big storm has hit the state. After a completely dry winter, a few minor storms in April and May were too little too late. California’s reservoirs are at critical lows, allocations to farmers are in many cases down to zero, and urban water districts are tapping their last reserves. In some areas of Southern California, water agencies are now penalizing residential “water wasters” by coming onto their property and installing flow restrictors.

Back in 2014, a supermajority of California voters, 67%, approved Prop. 1 to fund water storage projects. As of the spring of 2022 not one project has begun construction, eight years later. Meanwhile, in Southern California, a proposed desalination plant in Huntington Beach that could produce 60,000 acre feet per year of fresh water from the ocean has been held up by a mostly hostile bureaucracy and endless litigation for over twenty years. As you read this, the project faces another major hurdle – on May 12, the California Coastal Commission Board might defy the recommendation of their staff and grant “final” approval. But their approval may come with so many conditions that in effect it will be another denial. Or the army of litigants that for years have opposed the plant will find yet another basis for a lawsuit.

When it comes to water in California, there is a robust political consensus that something has to be done. There is agreement that multi-year droughts will leave Californians with inadequate water supplies; that once a drought enters its third or fourth year, the demands of the environment, agriculture, and urban water consumers are far in excess of what is deliverable. And that’s where we are today.

Back in the summer of 2021, knowing there was broad agreement as to the problem, I began to canvas the state to build support for a ballot initiative that would fund water projects. I entered into this project with only a basic knowledge of water policy. My goal was to talk with as many experts as I possibly could in order to come up with a comprehensive solution that, if approved by voters, would end water scarcity in California forever. I had no idea what I was getting myself into.

Water politics in California isn’t what it once was. The water infrastructure that transports water from mountainous northern watersheds to coastal cities mainly in the southern part of the state remains the biggest plumbing system in the world. The first major construction began over a century ago. To supply water to the burgeoning cities of Southern California, the Los Angeles Aqueduct was completed in 1913. The Hetch Hetchy dam and aqueduct, supplying water to the City of San Francisco, was completed in 1934.

Major water projects in California were ongoing in the decades that followed. The Federal Bureau of Reclamation finished building the Shasta Dam in 1945, creating what remains the biggest reservoir in California. The famed California State Water Project, with its centerpiece the California Aqueduct, completed most of its big projects in the 1960s. These highlights barely begin to describe the scale of the investments that were made or the magnitude of the projects that were built.

How California built a system of reservoirs and aqueducts that enables a mostly arid state to support a population of 40 million and some of the most productive farmland in the world is an epic story. A detailed accounting can be found in the classic book Cadillac Desert, written by Marc Reisner in 1986. An even more detailed and more recent source is The Great Thirst, written by Norris Hundley, Jr. in 2001. But the historic achievements of earlier generations of Californians to supply this new civilization with enough water to thrive have not been matched in recent years. California’s water infrastructure has been neglected. In the face of epic droughts and soaring demand, these days, the only answer California’s politicians have been able to agree on is water rationing.

Such is the state of water politics today. There is universal recognition that there is a water supply crisis, but every solution that involves major new construction is hopelessly gridlocked. Around the state, incremental and inadequate steps are taken, but there is no statewide vision to solve the crisis. Water rationing, typically referred to using the less threatening term “conservation,” is the only solution. While some activist groups in California truly believe conservation is all that will ever be necessary, it is mostly imposed on Californians by default.

The Basics of Water Supply and Demand in California

After the two big storms in the fall of 2021, on January 1, 2022 the San Jose Mercury published an article with an encouraging headline “California has topped last season’s rainfall. Will trend continue in 2022?” Quoting the National Weather Service, the article announced that the “massive October atmospheric river and wet December” delivered 33.9 trillion gallons of rain to the state. This exceeded the 33.6 trillion gallons that fell during the entire previous water year, from October 2020 through September of 2021.

To express this amount in acre feet helps put this in perspective. 33.9 trillion gallons is 104 million acre feet. According to data compiled by the California Department of Water Resources, over the ten year period from 2011 through 2020, on average, 180 million acre feet of rain fell each year in California. The following table shows how that 180 million acre feet of water is used. Most of it either evaporates, percolates, or eventually makes its way to the ocean. But a significant amount is diverted for either urban, agricultural, or environmental use.

For the years 2011 through 2015, the data on this chart comes from the 2018 update of the California Water Plan, prepared by the California Dept. of Water Resources. Data for 2016 and 2018 was compiled on request by engineers working for the Dept. of Water Resources; they are still working on the 2017 data. For these most recent seven years for which complete data is available, diversions for urban, agricultural and environmental purposes averaged 75.3 million acre feet per year.

As can be seen, urban water use in California accounts for a relatively small percentage of the total. Just over 10 percent of California’s water use is to serve towns and cities, whereas the remaining 90 percent is split nearly evenly between agricultural irrigation and maintaining healthy ecosystems. While this obvious disparity could be the basis for suggesting that merely reducing allocations for farms and the environment ought to be enough to solve challenges of water scarcity, the basis for that argument is that water policy in California has to be a zero sum game. But that is a false premise. That premise can be invalidated by investing in new water supply infrastructure and upgrades to existing water infrastructure.

The next table, also taken from the 2018 update to the California Water plan, with data for the years 2016 and 2018 obtained from the Dept. of Water Resources, shows the sources of the 75.3 million acre feet per year of average annual water diversions. Analyzing this table will quickly reveal the vulnerability of California’s current water supply.

To begin with, the water California imports via the Colorado Aqueduct, nearly five million acre feet per year, relies on the Colorado River runoff that is stored in Lake Mead and Lake Powell, which are both at lower levels than they’ve been since those massive reservoirs were first built and filled up. At the same time as the entire Colorado River watershed continues to suffer a blistering multi-year drought, the burgeoning cities of Las Vegas and Phoenix are asserting their water rights. In the years to come, it is prudent to plan for a dramatic reduction in the amount of Colorado River water that will be delivered to California’s farms and cities.

Groundwater extraction, currently averaging 18.7 million acre feet per year, is also under threat. Withdrawing water from aquifers faster than they can be replenished by percolating runoff has caused wells to dry up, it has led to ground subsidence, and in some cases is causing underground aquifers to collapse and degrade to the point where they no longer can be refilled. To restore aquifers as a sustainable source of water storage and supply, not only will annual withdrawals need to drop well below 18.7 million acre feet per year, but until the water levels in the aquifers are restored, total annual withdrawals will need to be less than the annual amount of natural recharge.

As if that isn’t enough, the line items on the table indicating local, state and federal projects are primarily referring to sources of water that rely on California’s rivers, which, in most cases, rely on California’s Sierra snowpack. Because most of California’s reservoirs are in-stream, their first priority is to prevent flooding. For this reason they cannot be used to store water from early season storms, such as the deluge that fell in December of 2021. If those storms are allowed to fill these reservoirs, should a late season storm hit the state, there would be no reservoir capacity left to buffer the runoff and prevent flooding. But when the snowpack fails to develop, and no late season rainstorms inundate the state, summer arrives and the reservoirs are empty.

All of these factors combine to indicate a worst case scenario that is potentially catastrophic. It begs the question, why is the only significant statewide policy priority been conservation? Without Colorado River water, or unimpeded access to groundwater, or a viable snowpack, the “conservation” solution is disastrous: Every household will be limited to 40 gallons per person per day, outdoor watering will be prohibited, and a million acres of farmland will be taken out of production. Is that the future Californians are prepared to accept? Because that is the course Californians are on today.

There is an alternative. Runoff from the storms like the one that blasted through California last December can be diverted into percolation basins and into off-stream reservoirs. Indoor urban water, nearly three million acre feet per year, can be treated to higher standards then reused over and over. So why isn’t the Sites Reservoir, an off-stream reservoir that is a twin to the already existing San Luis Reservoir (built back in the 1960s), already completed? Its construction was approved by voters eight years ago. Why aren’t two or three more massive off-stream reservoirs already built and operating in California?

For that matter, why isn’t urban water recycling already being done in every urban county in California? Only one major metropolitan area, Orange County, recycles 100 percent of their wastewater. Why aren’t these desperately needed projects being constructed? There is a reason.

In our attempt to qualify an initiative to fund water supply projects, we encountered the opposition. There is a loose, extremely powerful coalition of special interests in California that want water scarcity. In some cases that policy serves their financial interests. In other cases, well intentioned zealots have embraced politically imposed water scarcity in the misguided belief that it will help the environment. Some of the opposition was more a function of gridlock than disagreement on principle.

In the opposition to more water projects, we encountered every conceivable motivation. There was avarice and there was selflessness, misanthropy and empathy. There were delusional arguments and arguments of clarifying lucidity; pragmatism and idealism. But the intricate array of political forces that influence water policy in California today, and their underlying ideologies and motivations, reduce to only one de facto consensus: Conserve. But conservation is not enough.

We also learned that with more time, the obstructionist consensus can be changed. Countless informed observers and political power brokers assured us, usually off the record, that new, big water projects must get built. The financing for these projects is not the insurmountable obstacle, nor are there technical constraints apart from the daunting scale of what is required.

To begin with, there are sustainable ways to create water abundance. And in normal years, the presence of lawns and the luxury of lengthy showers is a sign not of waste, but of resilience. These luxuries signify necessary surpluses that guarantee sufficient water in those extraordinary times when the water supply is disrupted. Having redundant sources of water in California not only bestows the capacity to withstand a crippling multi-year drought, but also to survive in the event of civil disruption or natural catastrophes that disable, for example, the Edmonston pumps that push millions of acre feet of water from the California Aqueduct over the Tehachapi Mountains into Los Angeles.

Water is the foundation of civilization. It is absurd that Californians, living in the wealthiest and most innovative place on earth, cannot design abundance into their water infrastructure. With abundant water, not only does California offer its residents a far more enjoyable quality of life in the form of less restrictions on residential consumption. Abundant water also means that Californians can develop more housing, for which developers cannot obtain permits without first identifying a reliable water supply. It means that California can remain an agricultural superpower, with affordable food for in-state sales and export. It enables essential businesses that consume water to flourish.

The remaining installments of this report will chronicle our attempt to qualify an initiative designed to fund massive investment in water supply projects. As part of that story, the various categories of water projects will be examined, as well as the many groups that affect water policy in California. This report, however, is about more than water, and affects everyone, not just Californians.

The challenge of water scarcity, and the reasons for it, are mirrored in other forms of politically contrived scarcity; not just water, but land for housing, practical transportation infrastructure, energy, lumber, and other natural resources. The entire consensus on all of these building blocks of modern civilization must change from a scarcity agenda to embrace investment in sustainable abundance.

Doing this creates the opportunity to create a future that nurtures upward mobility, affirms the economic aspirations of emerging communities and nations, and reduces the profits and prerogatives of established corporate and state rent seekers by forcing them to compete. This is the abundance choice.

This article originally appeared on the website California Globe.

Edward Ring

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Tony Thurmond – Public Sector Union Operative

May 10, 2022/by Edward Ring

As the 21st century careens its way towards more geopolitical and economic uncertainty than most people alive today have ever known, with constant and transformative change the only constant, optimists among us still hope that some elements of California’s labor movement will begin to throw their weight behind policies and politicians that offer stability and common sense; policies designed to advance the interests of all Californians. But when it comes to the teachers union, don’t hold your breath.

The fact that the teachers union is a public sector union is bad enough. Public sector unions, unlike private sector unions, do not have to make reasonable demands on management. In the competitive private sector, union negotiators know that if they ask for too much, the cost will drive the employer out of business. Public sector unions elect their own bosses; the people who then are required to negotiate with them over work rules and compensation packages. Public sector unions also protect the bad apples within their membership, shielding them from accountability. This is particularly troubling when it makes it harder to get rid of public sector workers who abuse their authority.

There’s more. Public sector unions promote a confrontational “us vs them” mentality to their members, many of whom fully embrace this indoctrination. When “them” is the general public, and in particular, any member of the public who might, for example, make a political donation to a candidate that the union opposes, this is especially problematic. Union members operate the machinery of government. They enforce building codes and issue business permits. They conduct inspections and enforce the law. They hold themselves up, often with very good reason, as role models and heroes. If you run a business in California, why would you ever want to alienate public servants and their unions?

These distinctions make public sector unions completely different from private sector unions. But of all the public sector unions, the teachers union is the worst, because the damage they’ve done to the profession of teaching is harming the next generation of Americans. They are harming the people who we are going to need to skillfully guide us through the middle decades of this turbulent century.

The harm being inflicted on America’s youth by teachers unions has become readily apparent in recent years. The teachers unions demanded an extreme response to the COVID pandemic which condemned K-12 students to two destructive years of mostly remote learning. In turn, the rollout of remote learning was poorly managed. Also revealed in the course of remote learning was the appalling level of politicized curricula, driven by leftist ideology. Divisive and controversial race and gender theories were imposed on even the youngest students, along with incessant and terrifying climate change oriented doomsday preaching.

People may debate as to what degree the union mandated COVID response was extreme or appropriate. They may disagree over how far is too far when it comes to teaching new perspectives on race, gender and climate change. But before any of this got out of control or became obvious to millions of parents, the teachers union was already failing California’s students. By making it nearly impossible to fire incompetent teachers, by giving teachers tenure after less than two full years of classroom observation, and by favoring seniority over merit in layoffs, the teachers union has undermined the quality of public instruction for decades. And as was argued in the Vergara case, a 2016 lawsuit that attempted to reform these work rules, they had a disproportionate negative impact on students in low-income communities. Does that sound familiar? What irony.

Presiding over this mess is the State Superintendent of Public Instruction, Tony Thurmond. First elected in 2018, Thurmond is running for re-election. The organizations endorsing him are almost exclusively public sector unions. They include the California Federation of Teachers, the California Teachers Association, the California School Employees Association, the Association of California School Administrators, the United Teachers of Los Angeles, and others.

To fully appreciate how Tony Thurmond answers to public sector unions, however, follow the money. A useful source for this, early in an election season, is the “Late and $5000+ Contributions Received” report, maintained by the California Secretary of State. Because any contribution over $5,000 has to be reported immediately by political campaigns in California, and posted by the Secretary of State within days, it is possible to get very recent contribution data on any big money. After all, the donors who contribute amounts in excess of $5,000 are the ones whose phone calls get returned. They are the ones who make or break a campaign. Thurmond’s big donors are almost all unions.

With information updated through May 6, Thurmond’s 2022 reelection bid has attracted $894,000 from donations of $5,000 or more. These donations came in the form of 114 transactions, with 70 of them coming from public sector unions. In total, $576,000 of Thurmond’s $894,000 in big money contributions so far are from public sector unions.

What’s interesting, and ominous, is the diversity of Thurmond’s public sector union contributors. There’s plenty coming from public education unions – the California Teachers Association, the American Federation of Teachers, and so on. But just as much of this early and big union money is coming from the Service Employees International, the State Pipe Trades Council, the Sheet Metal Workers, the Painters and Allied Trades, the Steamfitters, the California Nurses Association and the California Professional Firefighters, and others not directly involved in public education. Why are nurses and firefighters interested in who runs California’s public schools?

This display of solidarity is for one primary reason: Political power. Public sector unions work together to run California’s legislature, wielding nearly absolute power. They keep their disagreements confined to conference rooms and private conversations. When it comes to putting and keeping compliant political operatives in critical elected positions, they line up in unity.

The partisanship of California’s public sector unions is almost universally in favor of Democrats, and that, too, has as much to do with power than with ideology. This is why high profile billionaires, powerful tech corporations, land developers, supersized “nonprofits” (working through their for-profit vendors), and countless other large corporate and financial special interests have all lined up behind California’s Democratic party. For them, it’s a business decision. But the government glue that keeps this corporatist party closed, exclusive, regressive, and profitable for those privileged insiders, is public sector unions.

And to ensure the feudalist cabal that controls California is never overthrown by an enlightened electorate, we have California’s unionized public school monopoly, with Tony Thurmond available to do whatever he’s told to do by his union handlers. Instead of developing the skills in math and reading necessary to succeed in this complicated new century, Tony Thurmond is making sure California’s K-12 students learn every titillating nuance of modern gender theory, while also learning to harbor intractable racial resentment. Instead of developing the critical reasoning skills to recognize that California is unaffordable because environmentalist extremists have provided cover for special interests to lock up the supplies and jack up the prices for every basic essential – housing, lumber, energy, water, food – Tony Thurmond is instead making sure K-12 students develop crippling anxieties and fanatical compliance regarding anything having to do with the “climate emergency.”

Tony Thurmond, like pretty much every other candidate in California that is supported by public sector unions, is a marionette. His career, like all the rest of them, rests on obedience to an agenda that inverts a famous statement attributed to the Star Trek character Spock: “The needs of the few outweigh the needs of the many.”

This article originally appeared on the website of the California Policy Center.

Edward Ring

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Are Firefighters Hard to Recruit in California?

April 7, 2022/by Edward Ring

In response to a recent California Policy Center analysis that provided an updated calculation of the average pay and benefits for full time firefighters working for cities in California, one commenter claimed that it has become difficult to recruit firefighters. The accuracy of this claim carries significant implications. When employers can’t recruit employees, then to attract qualified applicants, they have to pay them more.

The findings of the analysis were unambiguous: The average full time firefighter working for a California City is collecting a pay and benefits package that costs taxpayers over $250,000 per year. Moreover, firefighter recruitment has not been a challenge historically. With minimal advertising, cities used to receive hundreds of applications for every firefighter opening. If that has changed, what happened?

It turns out, a lot has changed. Firefighters, like all first responder positions where hazardous conditions are part of the job, get paid a premium. Over time, that premium has risen, not necessarily because the risks of the job have increased, but because the value our society places on human life and safety has increased. This means people who risk their lives must be paid more than they were in previous decades, and, concurrently, people who save lives as part of their job must be paid more because to meet the new expectations, they have to bring more training and skill to their job.

Nonetheless, a pay and benefits package equal to a quarter million per year is a pile of money, even in California. And on average, the overtime component of that total only amounted to $42,000, which at time-and-a-half equates to 26 percent more hours. Given firefighters typically work (before accounting for overtime) 10 shifts per month, this means on average including overtime they’re working 12 or 13 shifts per month. But the biggest cost to employ firefighters is paying for their pensions, which on average costs California cities $52,000 per year, per firefighter.

There’s a connection between overtime costs and pension costs. If pensions weren’t so expensive, cities could afford to hire more firefighters and pay less overtime. As it is, if pensions cost cities more than overtime, from an economic standpoint it makes sense to understaff the departments and pay the overtime. But is facing an extra few shifts each month the reason cities struggle to recruit firefighters? Isn’t it still a good job – work four shifts, four day in a row, three times a month, and have the other 18 days off, every month, for a quarter million per year? That’s not a good enough proposition to attract recruits?

In some cases it is. A firefighter in a very wealthy suburban city may rarely have to actually fight dangerous fires or have to treat victims of gang violence. Their typical job will be responding to medical emergencies such as heart attack victims. These wealthy cities also can afford above average pay and benefits for their firefighters.

By contrast, a fire department that has to cover a low income, high crime area within a very large city is going to work a lot harder and take more risks. Their typical medical emergency is more likely to be a gunshot or stabbing victim, and the pace of their required responses may be relentless. And these very large cities often offer pay and benefits that are somewhat below average.

The City of San Diego is a stark example of this contrast in action. The total pay and benefits package for a full time firefighter in the City of San Diego in 2020 was $147,000, significantly below average. Their pay was lower across the board: base pay of $73,000 vs an average of $115,000, and overtime of $29,000 vs an average of $42,000. But the biggest difference was in the retirement benefit cost. San Diego, which has exchanged its defined benefit pension for a 401K plan, paid out $15,000 to prefund firefighter retirement benefits, vs $52,000 on average.

Unsurprisingly, the City of San Diego is having difficulty recruiting firefighters.

There’s another wrinkle to this, however. It isn’t that San Diego can’t attract recruits to their fire academy. That’s only part of the problem. The bigger problem is that as soon as these recruits graduate from the academy and get hired and log a few years of on the job training, they leave. Why work for $147,000 per year when you can work for $250,000 per year?

The union’s solution to recruitment challenges is to raise pay and benefits. That’s always an option but where does it end? The story of unionized government in California is that whenever a bargaining unit got more for their members, every other bargaining unit became more underpaid by that same amount.

Here are some alternatives.

(1) Continue the work started by Gov. Jerry Brown with the PEPRA reforms of 2013. Increase the solvency of California’s pension systems and lower the risk to taxpayers by attaching adjustments to pension benefits that are triggered when pension system solvency drops below healthy thresholds. When forced to do this back in 2013, the City of Detroit adopted what they termed “risk shifting levers,” which included, in order of application, and for as long as necessary, (1) no COLAs will be paid, (2) employee contributions will increase by 1% to 5% of base compensation, (3) most recently awarded COLAs will be rescinded, and (4) the benefit accrual rate will be decreased from 1.5% to 1%.

(2) Recognize that young applicants may attach more value to their base pay than to their eventual pension benefit, and recalibrate compensation packages accordingly. San Diego might consider this option. Increase the base pay instead of restructuring the retirement benefit, and see what happens.

(3) Pay more for the tougher jobs, and less for the easier ones. Firefighters working in South Central Los Angeles have more difficult jobs than firefighters working in Larkspur.

Ultimately, however, firefighters and their unions might consider the bigger challenges facing all Californians. The debate over what sort of premium a firefighter deserves for the risks they take is only half the issue. Why is the cost of living so prohibitive in California for everyone? What state and local policies could change to start to fix this problem?

If the firefighters union, and other public sector unions, were to support candidates that are willing to spend tax revenues on practical infrastructure, and deregulate the extreme environmentalist inspired laws and mandates that hamstring California’s economy, the cost of basic necessities in California would drop. With economic and political uncertainty rising around the world, it is insane that California’s state legislature continues to enact policies that force Californians, now more than ever, to import food, lumber, fuel, other natural resources, and manufactured goods. Those products can and should be produced here in California in much greater abundance, driving down prices and creating more jobs.

There are political solutions to politically contrived scarcity. If those solutions were implemented, California’s firefighters, along with everyone else in the state, could live well for less money. To do that, they will have to completely reassess their political priorities and the candidates they support.

This article originally appeared in the California Globe.

Edward Ring

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Questioning the Political Priorities of the Firefighters Union

March 31, 2022/by Edward Ring

As another summer of wildfires approaches, it is in the interest of every Californian to understand that California’s firefighters’ union, the California Professional Firefighters, is one of the most politically powerful unions in the state. This union has the power to help solve the growing problem of wildfires in California, but to more effectively do so they will have to make some tough and selfless political choices.

As it is, California’s firefighters’ union is a partisan political machine that is not standing up to environmental activists that, for decades, have undermined responsible forest management. At the same time, California’s firefighters receive union negotiated pay and benefits that have exempted them from – to use a term favored by the leftists their union aligns with – the “lived experience” of most Californians.

These problems are related. If firefighters received compensation based more on market rates instead of those rates their unions “negotiated” with politicians the unions helped elect, there would be more money to hire more firefighters. There would also be more money left over to spend on programs to prevent wildfires, instead the money running out every year after spending billions to extinguish wildfires.

Before going further, it is important to establish two things: First, to criticize the agenda of public sector unions does not constitute criticism of all unions, in all circumstances. Second, to question whether current pay scales for California’s firefighters are affordable or appropriate in no way diminishes the respect and appreciation we have for their service.

Today the most recent pay and benefits data provided by the State Controller show that the average pay and benefits for a full time firefighter working for a city in California in 2020 was $256,000. That’s a 24 percent increase in just two years. Note that this average includes administrative and other non first responders that work for these fire departments but make far less, which pulls down the numbers. Among cities that included the back payments to restore solvency to their pension plans as compensation, Santa Clara in 2020 was the city with the highest average pay and benefits for their full time fire department personnel, at $352,000.

These amounts are mind-boggling. The average base salary of a full-time fire department employee in a California city in 2020 was $115,000. To put this in perspective, according to Military.com, a staff sergeant with 10 years experience in the U.S. Army in 2020 earned base pay of $42,000. An Army captain with 10 years experience earned $79,000. Similar rates of pay apply across the U.S. Military. When it comes to including compensation apart from base pay, the disparity between California’s city firefighters and members of the military remains striking. According to a 2021 report by the Center for Strategic and International Studies, the total cost to the Department of Defense per service member averages $140,000 per year. This is only 55 percent of what it costs to taxpayers in California’s cities to pay their firefighters.

It’s easy enough to say cities with high tax bases like Manhattan Beach or Santa Clara have the financial wherewithal to pay their firefighters whatever they ask. But massive compensation packages for firefighters have financially strapped other cities, such as Placentia that had to completely restructure their fire department in order to get their budget under control. But either way, excessive and unaffordable pay and benefits for California’s unionized firefighters is only half the problem.

The lesser known fact about California firefighters unions is that the union is not apolitical, but instead, like other public unions in the state, firmly entrenched in progressive politics. The firefighters union backed Prop. 15 in 2020, which would have caused business properties to be reassessed at market rates, eliminating one of the last advantages private businesses have in California. This is also the union that marched with the United Teachers of Los Angeles (UTLA) in 2019 (pre-COVID), a teachers union that is aggressively pushing to serve up a hard-left program of indoctrination in the already failing public schools of Los Angeles.

The California Professional Firefighters union engages in politics with an extraordinary degree of political and financial power. A few years ago when asked, off the record, why a Southern California businessman running for city council took campaign contributions from the firefighters union, his response was compelling. “They are either going to spend a million bucks to elect me, or they are going to spend it to elect my opponent.” The financial power of California’s public sector unions is well documented.

A Tremendous Opportunity

Putting an end to cataclysmic wildfires, which are the result of decades of bad policies, ought to be the top political priority of the firefighters union. But if you visit the California Professional Firefighters website, you can easily find a press release from a few years ago, titled “CPF President Praises Newsom Commitment to Wildfire Response and Prevention.” Newsom does not deserve this praise. Almost all of Newsom’s significant actions are oriented to wildfire response, not wildfire prevention. Here’s what the firefighters union can do that might, within a few years, solve the problem of super fires, and earn the admiration and gratitude of millions of Californians:

(1) Take a public stand that policies and spending on wildfire prevention is as important as wildfire response.

(2) Demand legislative and legal action to streamline the process for property managers and property owners to engage in controlled burns.

(3) Partner with the logging industry to restore responsible logging with a goal of doubling or tripling the annual timber harvest in California. The state’s timber harvest has been reduced to 25 percent of what was being removed in the 1990s.

(4) Publicize and advocate for the successful “uneven-aged” forest management and total ecosystem management practices that saved Shaver Lake’s forests in 2020, and the forests around South Lake Tahoe in 2021.

(5) Aggressively challenge and help defend against the environmentalist litigators and lobbyists that have prevented responsible forest management and allowed California’s forests to turn into tinder boxes.

(6) Politely, but publicly and unequivocally challenge attention grabbing wildfire-inspired stunts, such as new Electric Vehicle mandates, as deflecting from the necessary solutions involving forestry management.

In addition to saving forests, homes and lives by preventing fires, reforming the state’s forest management policies would create new jobs in the timber industry, lower the cost of lumber for home construction, and save billions spent on the fire lines each summer.

One thing the firefighters union is very good at is winning. By using its political power to back critical fire prevention efforts, the firefighters union would score a huge win for all Californians.

This article originally appeared on the website of the California Globe.

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Edward Ring

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Sonoma County Teachers Strike Over but Underlying Issues Unresolved

March 24, 2022/by Edward Ring

On March 7, members of the union representing teachers in the Cotati-Rohnert Park Unified School District voted to strike. It began on March 10 and by March 17 it was over. What happened?

At first, prospects for a resolution to the strike were not encouraging. On March 9 they claimed the district could not possibly afford to issue the raises demanded by the union, particularly if those raises were extended beyond the credentialed teachers to all of the district’s employees in all the bargaining units. Then on March 17 they announced the strike was resolved. The compromise was to grant the cost of living increases in six month increments over the next three years, instead of granting the entire increase at the beginning of each year. This compromise saved enough money for the district to come to an agreement with the union.

But compromise or not, determining whether or not Cotati-Rohnert Park Unified School District could afford the concessions they made is not easy. Deciphering the financial statements of a public agency is nearly a fool’s errand, because they are not required to engage in accrual based double entry bookkeeping. The elegant symmetry of general ledger accounting as practiced in the private sector still allows for creative accounting, but because the balance sheet and the income statement are connected algebraically, any thorough audit of the balance sheet will turn up irregularities.

By contrast, take a look at this unaudited financial statement for Cotati-Rohnert Park Unified School District’s fiscal year ended June 30, 2021. The term “balance sheet,” which doesn’t turn up until page 83 of the report, does not include accrued liabilities. How much liability does the school district carry for earned pension and retirement health care obligations, and why isn’t this amount showing as a liability? What the district represents as an income statement and balance sheet is more of a cash flow statement, a useful tool, but not helpful if one wants to assess the district’s long-term financial health.

According to negotiators representing the district, granting the raises demanded by the union would drive their cash reserves below the required minimum within two years. But apparently the district did not ultimately determine their projection to be alarming enough to continue the fight. And maybe it isn’t. Going in the hole by $2.4 million, two years from now, when the Federal government is going to pump at least $6 million into the district this year and will be tapping the $1.9 trillion American Rescue Plan funds for the next few years, is probably an acceptable risk.

The more systemic risk, however, lies in how the district copes with a downturn in investment returns that affects CalSTRS, the California State Teachers Retirement System. In the district’s 2021-22 interim budget, they project total salaries of $37 million and total benefits of $22 million. Most of this benefit overhead, equal to 60 percent of salaries, is the employer contribution to CalSTRS, the sick man of California. According to a November 2021 report from the California Office of Legislative Analyst, CalSTRS is only 67 percent funded. Put another way, they are in the hole to the tune of $106 billion.

To appreciate how potentially serious this shortfall can become, consider the fact that there are only around 307,000 K-12 teachers currently employed in California. This is the denominator over which participating school districts have to spread a $106 billion unfunded pension liability. That equates to $344,000 per employee. What if investment returns don’t exceed projections sufficiently to close that prodigious gap? How much more will employers have to pay CalSTRS in the coming years?

This is the elephant in the room that any financially literate school board member will find justifiably intimidating. California’s state and local governments, if you make only somewhat conservative assumptions regarding pension fund performance and take into account the cost that will confront politicians if they ever decide to finally build the required infrastructure that they’ve all but ignored for the past thirty years, is easily in excess of two trillion dollars. Go find that money, if there’s an economic downturn.

This is ultimately what school boards, school district management, and the unions they bargain with, need to focus on. Cost-of-living adjustments have to be increased when the rate of inflation increases. That’s a tail that has to be chased. But in the meantime, some of the underlying causes of higher prices must be corrected. The cost of housing and food are impacted by the quality of the enabling infrastructure. Where are these unions when politicians come forward with proposals to tap the general fund to pay for more water, power, and transportation infrastructure? Where are they when instead of building roads and upgrading aqueducts, the politicians foolishly fund high speed rail? Building a bullet train is a noble aspiration but should not be prioritized over the urgent need for new state subsidized water, power and transportation projects that would lower the cost of housing and food.

The unions that secured cost-of-living adjustments for the Rohnert Park teachers did their job. But for the financial security of not only their members, but all working families in California, they may wish to consider supporting practical infrastructure spending that will lower the cost of living for everyone.

This article originally appeared on the website of the California Globe.

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Edward Ring

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