1. Crosscutting Issues
2. Overview and Assessment Of the Resources Initiatives
3. Governor's Watershed Initiative Lacks Details
4. Proposition 204 Expenditures Should Be Scheduled In Budget Bill
5. River Parkway Program Lacks Goals and Criteria To Prioritize Projects
6. Fund Conditions For Resources Programs
1. Special Funds and Park-Related Bonds
2. Water Bonds

The state conserves and manages its natural resources through a number of programs. Many of these programs focus relatively narrowly, either on (1) reviewing and mitigating the environmental impacts of particular projects--such as specific proposals to harvest timber--or (2) managing and restoring specific species of fish or wildlife. The Legislature recognizes the limitations of such a project-by-project approach to natural resource conservation and management, and has called for greater coordination of various conservation efforts. For example, in the Coastal Act of 1976 the Legislature declared the state's coast to be a distinct and valuable natural resource, existing as a balanced ecosystem, and called for orderly, balanced utilization and conservation of coastal resources.

Trend Away From Project-Based Review to Broader Focus. In recent years, there has been a trend away from project-based review and towards a broader focus in natural resource management. Instead of focusing on individual species or particular habitat, this broader approach focuses on whole ecosystems, bioregions, watersheds, and natural communities. One example of this new approach is the Natural Community Conservation Planning (NCCP) program established by Chapter 765, Statutes of 1991 (AB 2172, Kelley). This program calls for broad-based, regional planning to promote the management and conservation of multiple species and natural communities, while promoting coordination and cooperation among public agencies, landowners, and other private interest through the planning process.

1997-98 Governor's Initiatives. For 1997-98, the budget proposes to further implement this broader approach to natural resource management. Specifically, the budget proposes to expand the NCCP program and implement two other initiatives, as summarized in Figure 6. According to the administration, these initiatives are an effort to achieve a cooperative, integrated approach to managing and restoring the state's (1) endangered and threatened species and natural communities, (2) watersheds, and (3) coastal resources. These initiatives would be implemented by various resources departments.

Figure 6
Proposed Resources Initiatives 1997-98
(In Millions)
Purpose	Funding
Watershed Initiative	$3.8
Coastal Initiative	17.1
Natural Community Conservation Planning	16.0
Total	$36.9

Analyst's Overall Review of Governor's Initiatives. In general, we believe that taking the broader approach to conserve and manage the state's natural resources has merit. However, we think that, for these initiatives to be effective, it is important that they be well defined with goals and criteria to guide resource allocation decisions. It is also important that these initiatives identify quantifiable results that enable assessments of the effectiveness of the approach. This is particularly essential because the approach is relatively new and its effectiveness is still not known.

Our overall review identifies four concerns that are common to all of the initiatives as summarized below. We further discuss individual initiatives in the writeups of departments proposed to implement the initiatives as well as in the following writeup in this section. Specifically, we find:

• Proposals Lack Details on Measurable Objectives to Be Achieved and Work to Be Accomplished. For example, a primary objective of the watershed initiative (which we discuss below) is to streamline regulatory processes such as the review of timber harvesting plans. While the Department of Forestry and Fire Protection (CDFFP) is designated the lead agency for the watershed initiative, CDFFP is not able to specify which watersheds it will assess in 1997-98 and how assessments will be used to streamline the regulatory process either in 1997-98 or in subsequent years. This lack of specifics limits the Legislature's ability to assess the merits of the proposals and their likely cost-effectiveness, and to hold the various departments accountable for results under the initiatives.
• Proposals Do Not Propose Specific Measures to Improve Coordination of Existing Programs and Policies. Past reports by various state agencies have pointed to a lack of coordination in the state's programs to manage its coastal and forest resources (see reports by the Resources Agency, [1995] and CDFFP, [1986]). It is not clear to what extent the initiatives would improve coordination among existing programs and policies. For example, it is not clear how the watershed initiative would result in better coordination of the state's programs to protect forest wildlife habitat and resources--such as CDFFP's review of timber harvesting plans and DFG's issuance of streambed alteration permits--so that the cost-effectiveness of these efforts is enhanced. Similarly, it is not clear how the coastal initiative would lead to better coordination among the California Coastal Commission, various conservancies, the Department of Parks Recreation, and the State Lands Commission in the state's management of coastal resources.
• Long-Term Costs and Fund Sources Unspecified. In some instances, the initiatives require modest funding in 1997-98, but could require significant state investments in future years. However, the administration has neither specified future costs nor identified funding sources to support them. For example, although costs to acquire land to implement the NCCP in southern California could be in the hundreds of millions of dollars, a long-term source of funding to meet these costs has not been identified. Information on the initiatives' long-term costs and potential fund sources would help the Legislature to evaluate whether the proposed expenditures are (1) cost-effective and (2) consistent with legislative priorities.
• Need for Statutory Authorization and Legislative Policy Oversight. In some cases, the administration's initiatives commit the state to policies which have received little or no policy review or oversight to date by the Legislature. For example, as we discuss under DFG (Item 3600), we think that proposed expenditures for land acquisition and management to implement NCCP raise significant policy issues about the state's funding of land acquisition to conserve endangered species. Similarly, the State Coastal Conservancy proposes to develop wetlands mitigation banks to facilitate the coastal development permitting process--as part of the coastal initiative--as we discuss in Item 3760. In our view, this proposal needs legislative policy review and statutory authorization to determine the appropriate process for developing these banks and the state's share of funding.

Conclusion. While proposals that take a broader approach to resource conservation and management may have merit, their effectiveness is unproven and costs are unknown. Consequently, it is essential that such initiatives have well-defined and measurable goals and outcomes to facilitate future assessment of their effectiveness and costs, be coordinated with existing state programs and policies, and provide for legislative oversight and policy direction. Our review concludes that the administration's proposals are deficient in these respects. This raises significant fiscal and policy issues for the Legislature to consider as it evaluates the initiatives and crafts its own approach to broad-based natural resource management. We discuss elements of the three initiatives in more detail either below (in the case of the watershed initiative) or under the individual departments in this chapter (DFG in the case of the NCCP, and the Resources Agency, California Coastal Commission, State Coastal Conservancy, and the State Water Resources Control Board in the case of the coastal initiative).

Budget Request. The budget proposes $3.8 million from the General Fund ($3.4 million) and the California Wildlife, Coastal, and Park Land Conservation Fund of 1988 (Proposition 70--$430,000) for various resources departments to implement a watershed initiative. Funds would be used to assess the ecological health of watersheds and evaluate how they are being affected by activities such as timber harvesting and development.

The assessments would be used to assist local organizations--called community-based watershed groups--to develop watershed management plans. These plans are intended to (1) guide efforts by local organizations, land owners, and state and federal agencies to restore watersheds and (2) streamline state regulatory processes such as timber harvest plan review by the Department of Forestry and Fire Protection (CDFFP) and issuance of streambed alteration agreements by the Department of Fish and Game (DFG).

Figure 7 (see page 18) indicates the funding proposed for the initiative.

As we discuss earlier in this Crosscutting Section, we think that implementing a broader approach to resource management generally--including watershed protection--has merit. We recommend approval of the request by the State Water Resources Control Board (SWRCB) for watershed coordinator positions given that these staff will help to implement existing five- to seven-year workplans of the regional boards. These workplans include identifying and assessing water quality problems in each region, targeting resources to the watersheds with the

Figure 7
Watershed Initiative 1997-98
(In Thousands)
Department/Purpose	Funding
Department of Conservation Geological support Grants to Resource Conservation Districts	$860
Department of Forestry and Fire Protection Watershed assessments Database development	391
Department of Fish and Game Watershed assessments Technical support for local watershed planning Database development Habitat restoration projects	1,510
State Water Resources Control Board Ten regional watershed management coordinators	1,000
Total	$3,761

most significant problems, developing an implementation strategy, and evaluating the results. However, we find the following deficiencies with respect to the balance of the watershed initiative proposal:

• Initiative Lacks Specific, Measurable Outcomes. The CDFFP indicates that it will select the specific watersheds to be assessed based on such criteria as local development pressure, presence of endangered species, and opportunity to establish partnerships with local organizations. The department has not identified specific watersheds to be assessed, the amount of work to be accomplished in 1997-98, or how the results of these assessments will be used. This reduces the Legislature's ability to (1) evaluate the merits of the department's proposal and (2) hold the department accountable for specific results.
• Long-Term Costs and Funding Sources Not Identified. One of the initiative's purposes is to establish a process by which state agencies review the impact of proposed projects--for example, timber harvesting and streambed alteration--on a watershed-wide basis, instead of on a project-by-project basis, focusing only on the project's related geographical area. The CDFFP indicates that the proposed limited-term staff will establish this process, thereby allowing other permanent staff to transition to the new process. The CDFFP also indicates that the new process will save time and money for both landowners and state agencies. However, CDFFP is unable to specify when the new process will be established, the total state staff time and costs required to establish the process, future fund sources for those costs, or the projected savings to landowners or the state of implementing the new process.
• Relationship to Existing Planning and Assessment Programs and Databases Unclear. The state has already invested significant funds in databases and Geographic Information Systems (GIS) relating to wildlife habitat and forest resources. (A GIS is a computer system that stores data by geographical location.) Although the watershed initiative efforts will result in the development of new GIS databases, according to CDFFP and DFG, it is not clear how these databases will work in relation to the state's existing systems or whether their development will be cost-effective. Similarly, it is not clear how plans and assessments produced through the initiative will be integrated into or coordinated with existing state planning and assessment programs.
• Limited Eligibility For Planning Funds. The initiative would provide funds to Resource Conservation Districts (RCDs) for watershed planning, but not to other organizations such as local watershed groups or community groups. The administration has not justified why eligibility for planning funds should be limited in this manner in 1997-98. Additionally, it is not clear what organizations will be eligible for grants in future years, or what the criteria will be for making this determination.

Recommendation. We think that a broader approach to managing and restoring watersheds--beyond a project-by-project review of impacts--has merit and could result in improved conservation of the state's watersheds. In our view, the SWRCB's request for regional watershed coordinators has merit as these staff will help to implement existing multi-year workplans to achieve specific objectives. However, our review points to deficiencies with the remaining elements of the initiative which reduce the Legislature's ability to evaluate the initiative's specific outcomes or hold the various departments accountable for its results.

Because these deficiencies are likely to limit the initiative's long-term effectiveness, we think that the departments implementing the initiative should address these deficiencies before the Legislature authorizes the initiative. Accordingly, we recommend deletion of the funds requested for the initiative except for ten regional coordinators requested for the SWRCB.

Proposition 204 Passed by Voters. Proposition 204--the Safe, Clean, Reliable Water Supply Act of 1996--was passed by the voters in November 1996. The measure provides $995 million for various water-related purposes. Specifically, funds are provided for habitat restoration in the Bay-Delta, wastewater treatment, water recycling and conservation, and local flood control and prevention. Of the $995 million, Proposition 204 continuously appropriated $968 million to various departments, including the Department of Water Resources (DWR), the State Water Resources Control Board, and the Resources Agency. The remaining $27 million--for river parkway acquisition and riparian habitat restoration--is available only upon appropriation by the Legislature.

Expenditures for Current and Budget Years. The administration proposes Proposition 204 expenditures totaling $99 million in 1996-97 by various departments. The budget proposes expenditures totaling $189 million in 1997-98, as indicated in Figure 8. Of the $189 million, only $27 million (14 percent)--for river parkway acquisition and riparian habitat restoration--is included in the budget bill. The remaining $162 million is proposed to be allocated directly to various departments and conservancies--$113 million for local assistance and $49 million for state support.

State Support Expenditures Should Be Scheduled in Budget Bill. The budget's proposal to allocate funds directly to the various departments is consistent with the terms of Proposition 204. However, we are concerned that allocating funds outside of the budget process reduces the Legislature's oversight over the expenditure of Proposition 204 funds. In our view, scheduling these expenditures in the budget bill will provide the Legislature with greater oversight of how funds are spent--consistent with the requirements of Proposition 204--and better ensure that the objectives of Proposition 204 are accomplished.

Figure 8
Proposition 204 Expenditures 1997-98
(In Millions)
Programs and Affected Budgets	Amount
Bay-Delta Improvement	$43.5
Department of Water Resources Fish and wildlife restoration--Central Valley Project Levee rehabilitation South Delta environmental mitigation CALFED administration	32.4
Department of Fish and Game Fish and wildlife restoration--Central Valley Project	10.4
Secretary for Resources Bay-Delta nonflow-related projects	0.7
Clean Water and Water Recycling	$55.3
State Water Resources Control Board Water treatment Water recycling and reclamation Delta tributary watershed rehabilitation Seawater intrusion control	55.3
Water Supply Reliability	$71.9
Department of Water Resources Local water supply Sacramento Valley water management Water conservation Feasibility studies	44.9
Various Conservancies and Departments River parkway program	27.0
Flood Control and Prevention	$18.0
Department of Water Resources Claims submitted by 6/30/96 for state share of costs	18.0
Total	$188.7

Proposition 204 continuously appropriates its funds, with certain exceptions, to various departments. Proposition 204 does not preclude the Legislature from considering the proposed expenditures in the budget process and scheduling the expenditures. Legislative Counsel has advised us that generally the Legislature has the authority to appropriate the Proposition 204 funds in the budget bill for specified purposes, as long as those purposes are consistent with Proposition 204. Such an approach is consistent with current practice whereby expenditures from the Habitat Conservation Fund (Proposition 117), although continuously appropriated, are scheduled in the budget bill.

As discussed under the individual departments in this chapter, we find that some of the proposed Proposition 204 expenditures for state support are inappropriate. Accordingly, so that the Legislature can exercise oversight over these expenditures, we recommend that new items be created to specify all of the proposed Proposition 204 expenditures for state support in the budget bill. We discuss our specific recommendations for the amounts and purposes for which funds should be appropriated under the individual departments. (Please see our writeups for the Secretary for Resources, Item 0540, and the Department of Fish and Game [DFG], Item 3600.)

Projects Required by Central Valley Project Improvement Act Should Also Be Scheduled. Proposition 204 provides $93 million to be appropriated directly to the State Controller for allocation to DFG and DWR to pay the state's share of costs for fish and wildlife restoration activities that are required by the federal Central Valley Project Improvement Act (CVPIA). The budget displays expenditures totaling $30 million for the current year and proposes expenditures totaling $34.4 million for the budget year ($24 million for DWR and $10.4 million for DFG) from Proposition 204 funds for this purpose. Since the CVPIA provides specifically the categories of projects that are mandated and require a state share of the costs, we recommend that the budget bill include a schedule of the projects to be funded by Proposition 204 funds to clearly identify state expenditures that meet CVPIA requirements.

We recommend that DWR provide the Legislature, prior to budget hearings, with a schedule of projects that relate to specific CVPIA requirements and are to be funded by Proposition 204 funds. We discuss our particular concerns with DFG's proposal for these Proposition 204 funds in our writeup for DFG (Item 3600).

Proposition 204 created the River Parkway Program, and provides $27 million to implement it. Funds are available for acquisition and restoration of riparian and aquatic habitat and for river and stream trail projects. (Please see the Capital Outlay section of this Analysis for our discussion of the Department of Parks and Recreation's [DPR's] River Parkway Program proposed expenditures.)

The budget proposes to expend the entire $27 million in 1997-98, as indicated in Figure 9 (see page 24). Funds will be spent to acquire and restore riparian habitat and develop public access and recreational opportunities. Of the total, $26.3 million will be allocated to the Wildlife Conservation Board (WCB), various state conservancies, and DPR for capital outlay. The remaining $700,000 is proposed for local assistance grants in the Urban Streams Restoration Program administered by the Department of Water Resources (DWR).

Legislature Called for River Protection Program. Chapter 762, Statutes of 1991 (SB 906, Hill)--the California Riparian Habitat Conservation Act--called for a coordinated state rivers and riparian habitat protection program. Partially in response to this measure, various state agencies including the Department of Fish and Game (DFG), the WCB, and the State Lands Commission have issued reports and plans to conserve and better manage the state's rivers and riparian habitat.

Figure 9
Proposition 204 River Parkway Program Proposed Expenditures, 1997-98
(In Thousands)
Agency and Purpose	Amount
California Tahoe Conservancy
Truckee River	$1,000
Wildlife Conservation Board
Sacramento River and tributaries	1,500
San Joaquin River	500
Santa Margarita River	300
San Jacinto River	2,000
San Joaquin River Parkway	5,000
State Coastal Conservancy
Los Angeles River and tributaries	2,000
Napa River	1,000
Otay River	3,000
Russian River	1,000
Department of Parks and Recreation
Various counties	4,000
Santa Monica Mountains Conservancy
Los Angeles River and tributaries	5,000
Department of Water Resources
Various counties	700
Total	$27,000

Planning Efforts to Continue in 1997-98. Several of the planning activities started since 1991 are proposed to continue in 1997-98. For example, DFG requests about $70,000 in 1997-98 to continue development of the Riparian Habitat Joint Venture Program, which will establish strategies and quantifiable habitat objectives to protect riparian habitats statewide. In addition, the California Rivers Assessment--a cooperative effort among the University of California, Davis; state, federal, and local agencies; and private organizations--is conducting a statewide inventory of rivers and detailed evaluations of their environmental conditions, to improve river conservation and management. The statewide inventory and evaluation has not been completed. The project has focused its initial attention on various rivers and bodies of water including the Eel, Sacramento, Mokelumne, Cosumnes, Carmel, Owens, Santa Clara, and Santa Margarita rivers, and the Salton Sea.

Analyst's Review of Proposed River Parkway Program. The availability of Proposition 204 funds provides the Legislature with a significant opportunity to further the objectives of Chapter 762, and fund projects in a coordinated manner using criteria that allow projects to be prioritized statewide based on need for acquisition and restoration of riparian and aquatic habitat. In our view, $700,000 requested for local assistance for the Urban Streams Restoration Program administered by DWR is justified. This is because that program--established by statute in 1985--has well-defined criteria for determining funding priorities and distributing grants. (In the past, these grants have been funded by bond funds that are now depleted.)

However, our review of the projects proposed for funding under WCB and the various state conservancies raises the following concerns.

• Projects Proposed Not Based on Quantifiable Objectives and Criteria. According to the Resources Agency, proposed projects for 1997-98 were selected because they were deemed to be of high priority by individual departments. Projects were not selected on the basis of consistent statewide criteria. Consequently, it is not clear whether the funding will be directed at the highest priority needs statewide for riparian habitat protection and restoration. It is also not clear what the projects will achieve in terms of protection and restoration of riparian habitat.
• Proposal Will Exhaust Available Funds. The budget proposes to appropriate all $27 million available under Proposition 204 for the River Parkway Program in 1997-98. Accordingly, no additional funds will be available as new priorities for river conservation are identified.

Recommendation. In our view, expenditures of River Parkway Subaccount funds will be most cost-effective if they are based on established criteria to prioritize river restoration and enhancement projects statewide according to where they are most needed. Because the projects proposed for 1997-98 do not meet this criteria, we recommend that the funds be deleted (with the exception of $700,000 for DWR). While we recognize that this will delay spending of Proposition 204 funds, we think that it is advisable nonetheless to establish criteria for consistent evaluation and selection of projects in order to ensure that funds are directed to the highest priority projects from a statewide perspective, not an individual state agency perspective.

In order that the Legislature can assess whether the administration's proposals are based on such criteria in future years, we recommend adoption of the following supplemental report language:

The Secretary for Resources shall submit a report to the Legislature by January 1, 1998, describing (1) the criteria used in selecting Proposition 204 River Parkway Program projects proposed for funding in 1998-99; (2) the relationship of those proposed projects to ongoing planning and evaluation efforts such as the California Rivers Assessment; and (3) a priority list of projects selected based on the above criteria for funding in subsequent years.

Based on this information, the Legislature will be better able to allocate River Parkway funds in future years in accordance with its priorities and with established high-priority needs.

Special Funds and Park-Related Bonds

Figure 10 (see page 28) summarizes the total amount of funds available for expenditure in 1997-98 for selected special funds and park-related bond funds, the Governor's proposed expenditures from these funds, and the reserve balances available after the Governor's proposed expenditures. The Legislature may wish to retain some of the projected reserves in the accounts to meet contingencies such as revenue shortfalls or unanticipated expenditures. However, this would further reduce the amounts of funds available for appropriation by the Legislature in 1997-98.

Environmental License Plate Fund (ELPF). The ELPF derives its funding from the sale of personalized motor license plates by the Department of Motor Vehicles. Funds from the ELPF can be used for the following purposes:

• Control and abatement of air pollution.

• Acquisition, preservation, and restoration of natural areas and ecological reserves.
• Environmental education.
• Protection of nongame species and threatened and endangered plants and animals.
• Protection, enhancement, and restoration of fish and wildlife habitat, and related water quality.
• Purchase of real property, consisting of sensitive natural areas, for the state, local, or regional park systems.
• Reduction of the effects of soil erosion and the discharge of sediment into the water of the Lake Tahoe region.

The budget proposes expenditures totaling $18.4 million from the ELPF, a reduction of $4.6 million (20 percent) from estimated current-year spending. This reduction is due primarily to an overestimation of revenues in the current year, resulting in the need for a General Fund loan to the ELPF to cover current-year expenditures. The budget indicates that this loan will be repaid in 1997-98 from ELPF revenues, reducing the amount of funds available for expenditure on programs in the budget year. As we discuss under the Wildlife Conservation Board (WCB--Item 3640), underfunding of the Habitat Conservation Fund (HCF) in the budget year would result in a budget-year deficit in the ELPF.

Public Resources Account, Cigarette and Tobacco Products Surtax Fund (PRA). The Public Resources Account (PRA) receives 5 percent of the Cigarette and Tobacco Products Surtax Fund (C&T Fund) revenues. The budget projects account resources to be about $21 million in 1997-98. Generally, PRA funds must be used in equal amounts for (1) park and recreation programs at the state or local level and (2) habitat programs and projects.

Of the projected resources, the budget proposes expenditures from the PRA for the various departments totaling $20.4 million. This is a decrease of $596,000 (2.8 percent) from estimated current-year funding. This reduction reflects a decrease in projected revenues to the C&T Fund, and a drawing down of the reserve in the PRA.

Habitat Conservation Fund (HCF). The HCF was created by Proposition 117, the California Wildlife Protection Act of 1990. The proposition requires that the fund receive annual revenues of $30 million primarily for wildlife habitat acquisitions and improvements. To provide this funding level, Proposition 117 requires transfer of (1) 10 percent of funds from the Unallocated Account, C&T Fund, and (2) additional funds from the General Fund in order to provide a total of $30 million. Proposition 117 allows the Legislature to substitute for the General Fund the transfer of other appropriate funds.

The budget proposes to transfer a total of $27.9 million into the HCF in 1997-98. Including a carry-over reserve from 1996-97, the budget proposes total expenditures of $32.4 million in the budget year. These funds are proposed to fund activities of the California Tahoe Conservancy, State Coastal Conservancy, Department of Parks and Recreation, and WCB. Specifically, the budget proposes $23.4 million to be allocated to WCB.

Park-Related Bonds. Figure 11 (see page 30) shows the amount available in selected park bond funds and the expenditures proposed for 1997-98. Park development projects and land acquisitions have traditionally been funded by various bonds passed by the voters. The availability of bond funds has contributed to the Legislature's flexibility in funding its priorities in past years. This is because the Legislature has been able to free up funds in the ELPF and the PRA by using bond funds to the greatest extent possible to fund various projects.

The budget projects available park-related bond fund balances totaling $18.6 million at the beginning of 1997-98, as shown in Figure 11. The figure also shows that the fund balance at the end of 1997-98 is estimated to be $6.5 million. Of this amount, $3.2 million is from the 1988 park bond. Much of these funds are earmarked for development of particular geographic areas and for certain categories of projects. Consequently, if the Legislature approves the Governor's spending proposals, the amount available for projects to meet legislative priorities will be less than $6.5 million.

Figure 11
Selected Park Bond Funds Resources Programsa 1996-97 and 1997-98
(In Millions)
Bond Funds	1996-97 Expenditures	1997-98
		Resources	Expenditures	Balances
Parklands Fund of 1980	$1.9	--c	--	--c
Parklands Fund of 1984	4.7	2.5	2.4	0.1
Fish and Wildlife Habitat Enhancement Fund of 1984	--	2.7	--	2.7
State Coastal Conservancy Fund of 1984	1.7	1.3	0.8	0.5
California Wildlife, Coastal and Park Land Conservation Fund of 1988b	47.2	12.1	8.9	3.2
Wildlife and Natural Areas Conservation Fund of 1988	1.6	--c	--	--c
Totals	$57.1	$18.6	$12.1	$6.5
a Based on the Governor's budget.
b Amounts shown reflect all bond allocations including those not subject to budget bill appropriations.
c Not a meaningful figure.

Water Bonds

As indicated in Figure 12, the budget reflects expenditures totaling $269.2 million in 1997-98 from various water bonds for (1) safe drinking water; (2) water supply, including water conservation, water recycling, and groundwater recharge; (3) wastewater treatment and other water quality projects, (4) Bay-Delta ecosystem restoration, and (5) flood control. This is an increase of $178.7 million, or 197 percent, above estimated current-year expenditures from bonds for these purposes. This increase reflects the availability of $995 million of additional bond funds from the Safe, Clean, Reliable Water Supply Act (Proposition 204) for various purposes.

Figure 12
Selected Water Bond Fundsa 1997-98
(In Millions)
	Resources	Expenditures	Balances
Safe drinking water
1986 California Safe Drinking Water Fund	$20.3	$15.7	$4.6
1988 California Safe Drinking Water Fund	35.1	15.2	19.9
Subtotals	($55.4)	($30.9)	($24.5)
Water supply
1986 Water Conservation and Water Quality Fund	$36.1	$21.8	$14.3
1988 Clean Water and Water Reclamation Fund	9.4	7.3	2.1
1988 Water Conservation Fund	24.2	5.4	18.8
Safe, Clean, Reliable Water Supply Fundb	170.5	87.0	83.5
Subtotals	($240.2)	($121.5)	($118.7)
Wastewater treatment/water quality
1984 State Clean Water Fund	$27.4	$15.1	$12.3
Safe, Clean, Reliable Water Supply Fundb	158.6	40.2	118.4
Subtotals	($186.0)	($55.3)	($130.7)
Bay-Delta ecosystem restoration
Safe, Clean, Reliable Water Supply Fundb	$548.7	$43.5	$505.2
Flood control and prevention
Safe, Clean, Reliable Water Supply Fundb	$18.0	$18.0	--
Totals	$1,048.3	$269.2	$779.1
a Based on Governor's budget.
b Proposition 204.

Safe Drinking Water. The budget projects total expenditures of $30.9 million in 1997-98, leaving a balance of $24.5 million at the end of 1997-98. Pending grant applications are in the pipeline against most of this balance.

Water Supply. The budget projects total expenditures of $121.5 million--$87 million from Proposition 204 bond funds-- for water supply programs. This leaves a balance of $118.7 million, mainly for new projects.

Wastewater Treatment and Other Water Quality Projects. The budget proposes $55.3 million in expenditures to fund wastewater treatment, agricultural drainage treatment, seawater intrusion control, and other water quality projects in 1997-98. This leaves a balance of $130.7 million, mainly for new projects.

Bay-Delta Ecosystem Restoration. Proposition 204 bond funds provide a total of $583 million for various projects to restore the ecosystem of the Bay-Delta. The budget estimates expenditures of $34.3 million from these funds in 1996-97, leaving a balance of $548.7 million at the start of 1997-98. The budget proposes expenditures of $43.5 million in 1997-98, leaving a balance of $505.2 million.

Flood Control and Prevention. The costs of federally authorized flood control projects are shared by the federal government (65 percent), state government (25 percent), and local government (10 percent). Due to the state's budget condition in recent years, however, the state has been unable to pay fully its share of costs for these flood control projects. According to the Department of Water Resources (DWR), the unpaid amount on the state's share of costs is currently about $167 million.

Proposition 204 bond funds provide $60 million for the state's share of costs of these flood control projects. The budget estimates expenditures of $42 million from these funds in 1996-97, leaving a balance of $18 million at the start of 1997-98. The budget proposes spending the remaining $18 million by the end of 1997-98. About $107 million in state costs will remain unpaid. According to DWR, the unmet funding need for the state share has caused construction to stop on a number of projects, including enlargement of Prado Dam on the Santa Ana Mainstem near the border of Orange, Riverside, and San Bernardino Counties, and work on Upper Llagas Creek in Santa Clara County.

The $60 million in Proposition 204 funds for the state share of flood control costs is only available to pay claims submitted by June 1996 for projects in specified counties. Thus, these funds are not available to address the recent floods.