Issues:
Post-2013 Middle Fork Revenue plans and policies
When the FERC license is renewed and new power sales contracts are in place, PCWA and the County will have a new revenue stream estimated to be $30 million to $100 million per year. A solid partnership is in place between the Agency and the County. The story of how this partnership came about is important to understanding how the revenues may be spent.
When the Middle Fork Project was constructed in the early 1960's, the Placer Supervisors also served as the PCWA Board; PCWA was created as a special district by the California Legislature for the purpose of constructing and operating the Middle Fork Project. It was only in the mid-1970's when PCWA acquired PG&E's private water system that the Placer Board of Supervisors went back to the Legislature to amend the charter to create a separate elected board for PCWA, with the same district boundaries as the County Supervisors. Since then, PCWA's Board has operated independently.
But the Supervisors saw the 2013 revenue stream coming in thirty-five years (see Re-licensing of the Middle Fork power system for more details on that part of the story), so they added an interesting clause to the PCWA charter. And that clause stated that for any new power sale contract, as well as for spending the revenues from that contract, the concurrence of the two boards sequentially would be required. You can imagine the problematic politics that created; first the PCWA Board would have to come up with a budget, then submit it to the County Supervisors for agreement — two boards of five to satisfy.
To solve that dilemma, the County and the Agency created the Middle Fork Project Finance Authority, a joint powers authority with two members from each Board. A set of simple principles were developed to handle the finances post-2013 in a non-controversial and streamlined way. The last thing anyone wanted was to create a new layer of government, with its own special deliberations. So the "simple as 1-2-3" solution post-2013 looks like this:
- The JPA receives the Middle Fork Project funds, and pays for all maintenance, operations, and betterments required by the power system. That lets PCWA operate the system unfettered.
- Any remaining funds are divided equally between the County and PCWA.
- The JPA may not retain any funds for its own use.
The solution works very well, with PCWA spending funds on water and energy projects, and with the County able to spend its funds under its broad land-use authorities … or not, and it may use the funds to reduce taxes as it sees fit. (In the 1960 bond election, a taxpayer's group supported the measure because it could lower taxes.). So now you see why many citizens are awakening to this new revenue stream in five years. I hope everyone pays attention; if they do, the funds will be used responsibly.
How will PCWA spend post-2013 revenue funds? Clearly the first order of business will be operating, maintaining and improving the system so that we care first for the goose that lays the golden egg. But beyond those revenues, PCWA's special district charter limits its revenue spending to the areas allowed under California irrigation district law. Broadly, those areas are water- and energy-related expenditures, grants, or loans. As indicated in the 2008 PCWA policy for the use of Middle Fork net revenues (PDF*, 54 KB), those areas are:
- Water supply
- Water supply reliability
- Water quality
- Ecosystem protection related to PCWA water and power systems
- Energy system supply and reliability
- Emergency financial aid to Placer County public water systems
- Public education and recreation related to PCWA water and power systems
PCWA cannot spend funds on areas such as fire safety on private lands, waste water, flood control, and the like. But, Placer County can. And partnerships between PCWA and the County may provide opportunities to address certain problems systematically and comprehensively, like fire safety. See Fire Safety for more on that part of the story.
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