The Desirability of Conducting a Cost/Benefit Assessment of the Sacramento
Area Water Forum and its Successor Element and a
Prospectus on How to Do It *
Robert W. Wassmer, Ph.D.**
Professor
Department of Public Policy and Administration
California State University, Sacramento (CSUS)
Sacramento, California 95819-6081
[email protected]
(916) 278-6304
http://www.csus.edu/indiv/w/wassmerr/
August 11, 2005
*Support for this project was received through a Hewlett Capacity Building Grant from the Center for
Collaborative Policy (CCP) which is a joint program of CSUS, the McGeorge School of Law, and the
University of Pacific. This report would not have been possible without the much appreciated input and
encouragement of David Booher, Susan Davidson, Sarah Foley, William Leach, Jim McCormick, Jonas
Minton, Susan Sherry, Buzz Wiesenfeld, and Leo Winternitz.
**With the valuable research and writing assistance of the following CSUS Master’s in Public Policy and
Administration Students in my PPA 220B (Applied Economic Analysis II) course in the spring of 2005:
Lisa Achen, Michael Applegarth, Danell Brewster, Sonia Campos, Deann Cavagnaro, Melissa Cheever,
Beth Curda, Meghann Eklund, Melissa Escobedo, Tamar Foster, Emily Franciskovich, Robert Gregg,
Fred Heacock, Andrea Jones, Camron King, Sheilla Kolla, Dawn Sanders Koepke, Ken Lowman,
Jennifer Matsumoto, Alexandra Miller, Pam Martin, Jean Maries Nera, Jessica Nobles, Zack Olmstead,
Shauna, Pellman, Jessica Riggs, Ana Rodriguez, Tonia Walton Simon, Derk Symons, Amber Twitchell,
Traci Verardo, Maya Wallace, Lucinda Winward, and Mao Yang.
1
I. Introduction
The objectives of this report are to (1) offer reasons why it would be desirable to pursue a formal,
economic -based, cost/benefit assessment (CBA) of the Sacramento Area Water Forum and its Successor
Effort (WFSE), and (2) to offer a prospectus on how to accomplish this form of assessment. In this
introductory section I offer a background on the Water Forum and its Successor Ele ment, arguments for
the desirability of a cost/benefit assessment of them and a brief description of what this form of
assessment entails, and an outline of the remaining sections in this report.
The Sacramento Area Water Forum
In Northern California the headwater forks of the American River begin near the cities of Auburn (in
Placer County) and Placerville (in El Dorado County) and meet in a lake created by the Folsom Dam.
From here, the Lower American River flows through Northern Sacramento County and ends as it enters
the Sacramento River just north of the City of Sacramento. As noted in Wiesenfeld and Orton (2004, pp.
1-8), in the last half of the 20th Century signific ant water infrastructure has developed along this river
system and much of it is managed by the United States Bureau of Reclamation (USBR). A 1972 decision
by the USBR to allow a San Francisco Bay Area water agency (East Bay MUD) to draw 150,000 acre feet
annually from the American River was immediately challenged by local environmental groups and
Sacramento County on the basis that such a diversion would harm fisheries and recreation opportunities
in the river. Prolonged and expensive legal proceedings followed that culminated 18 years later in Judge
Richard Hodge declaring that East Bay MUD could only draw water from the Lower American River if
such diversions would do no harm.
In 1990, the same year as Judge Hodge’s decision, the City and County of Sacramento were
forming their own plans to expand water diversion and treatment facilities on the American River to meet
growing water demand generated by a Sacramento County population of one million that was projected to
increase to two million by 2030. Perhaps emboldened by the Hodge decision, and stating that they had
not been consulted during the city and county’s water planning decisions, the environmental community
2
was ready to legally challenge the city and county’s plans. Given that the expense and gridlock that such
a challenge would likely entail was fresh in the minds of all potential litigants, both sides sought an
alternative process to decide how water allocation issues should proceed in the American River Basin.
Hence, the Water Forum began in September 1993 when Sacramento City and County arranged
with the California Center for Public Dispute Resolution (now called the Center for Collaborative Policy)
to mediate the development of a process to decide water issues in the area. Originally envis ioned to last
approximately eighteen months, the development of this process continued for six years, brought together
40 stakeholder organizations, and is cited (Water Education Foundation, 2002, p. 6) to have cost more
than $13 million in direct expendit ures to accomplish. Water Forum members agreed to abandon
traditional negotiating tactics and instead engaged in a collaborative process of responding to the deep
interests – not simply the stated positions – of each stakeholder. Using the methods described in Fisher,
Urey, and Patton’s (1991) Getting To Yes: Negotiating Agreement Without Giving In, the Water Forum
consisted of monthly meetings of all participants and weekly meetings of specific groups. In six years the
collaborative passed through four stages: (1993-94) planning, assessment, and organization; (1994-95)
education, (1995-97) drafting of an initial agreement, (1997-January 2000) and drafting of a final
agreement.
The final result of this multi-year collaborative effort was a consensus document (Water Forum
Agreement) that declared two co-equal goals: (A) provide a reliable and safe water supply for the
region’s economic health and planned development to the year 2030, and (B) preserve the fishery,
wildlife, recreational, and aesthetic values of the Lower American River. Furthermore, the agreement
also identified seven elements that were essential for the success of the two overall goals:
(1). Increased Surface Water Diversions,
(2). Actions to Meet Customers’ Needs While Reducing Diversion Impacts on the
Lower American River in Drier Years,
(3). An Improved Pattern of Fishery Flow Releases from Folsom Reservoir,
(4). Lower American River Habitat Management, which also addresses recreation in
the Lower American River,
(5). Water Conservation Element,
(6). Groundwater Management Element,
(7). Water Forum Successor Element.
3
It is important to note that participants in the Water Forum found it necessary to take the general water
issue of flood control in the Sacramento Area, and in particular the construction of the Auburn Dam, off
the bargaining table. Participants in the Forum only “agreed to disagree” on this issue. In addition, the
consensus decision on the relationship between water and population growth in the Sacramento Area was
that any agreements allow for the planned growth in population till 2030. As Leo Winternitz, the current
Executive Director of the Water Forum stated: “Water is not meant to control growth – at least not in the
Water Forum Agreement (Water Education Foundatio n, 2002, p. 14).
The Water Forum’s Successor Effort
Unlike most collaborative efforts that end once the involved parties come to a mutual understanding, the
Water Forum established a Successor Effort to better insure that the effort’s two original goals are
pursued and implemented. The Successor Effort is again a consensus based arrangement and has been
given no authority to govern or regulate water issues in the Sacramento Area. As such, all members of
the Successor Effort continue to meet six times a year to openly discuss and work through matters of
mutual interest. Participants in the Successor Effort are divided into four caucuses: environmental,
business, water, and public. Members of these “interests” meet approximately every month to discuss
matters of common interests and to update each other on their work. When it comes time for stakeholders
in the Successor Effort to take an opinion on a water issue, at least 75 percent of the members of each
caucus must agree for it to move forward. This super-majority requires the discussion of varying
opinions within each caucus and ensures that no group or interest gets “steamrolled”.
Why a Cost/benefit Assessment?
When reading descriptions of what the WFSE cost to undertake and what it accomplished, commentators
often conclude that although it was expensive, alternatives would likely have been more costly, or likely
would not have achieved the same desirable results. For instance, the statewide Water Education
Foundation (2002, p. 6) writes:
The city and county of Sacramento picked up most of the tab – some $13 million – financing the
staff, the mediator, public outreach, and other items. Expensive, but participants and supporters
4
say it saved many millions of dollars more in potential litigation and allowed hundreds of
millions of dollars worth of projects valuable to the regional economy to move forward.
Quoted in the same publication (p. 23), Jonas Minton, the first Executive Director of the Water Forum
believes: “It may cost more money initially to do a process such as this, but you can get your [water]
project done and it saves you money in the long run.” While Bob Thomas, Sacramento City Manager and
the second Executive Director of the Water Forum, is on record as believing that the City of Sacramento
(p. 11) “…determined that a negotiated settlement would be a less expensive and faster way to achieve its
goals.” In personal interviews conducted by Wiesenfeld and Orton (2004, pp. 40-41), participants
generally believed in the value of the Water Forum investment. As one interviewee stated:
I think the [the Water Forum entailed] far less cost in the long term… Whatever it is, $12 to $15
million cumulatively over the last decade, I think that’s a drop in the bucket …If you look at the
progress that we’ve made and that we’re going to make in the future, I think that [it] was a very
wise investment.
In simple terms, these participants in the Water Forum believe that the benefits derived from the
consensus based processes used in the Water Forum and its Successor Effort exceeded what they
perceived as the costs to obtain them. But just because some participants believe that their perception of
the benefits of the Forum exceed their costs, does not mean that the public and policymakers should
necessarily be convinced of this. In this age of limited budgets for public entities in California – and in
most of the United States – taxpayers and public officials are very likely to desire more specific and
appropria tely calculated evidence on whether the value of benefits gained from an environmental
consensus effort like the Water Forum exceeds the value money, time, and other resources expended on
such a dispute resolution process. The idea, that the success of environmental conflict resolution can in
part be judged through the positive net benefits (benefits minus costs) generated from it , is discussed in
Colby’s (2003) academic treatment of the issue. She even believes (see footnote 10) that the generation
of positive net benefits are central to proving the existence of the mutual gains that are promised through
the consensus negotiation framework of Fisher, Ury, and Patton (1991). The buzzwords used by
practitioners of the Getting to Yes consensus negotiation method, widely employed by the WFSE, are
“creating value” through turning “zero-sum” negotiations into “positive-sum” ones. In addition, Young
5
(2005) backs up his belief that water allocation policies be analyzed through cost/benefit analysis by
referencing the United Nation’s 1992 Dublin Statement on Water and Sustainable Development:
“Managing water as an economic good is an important way of achieving efficient and equitable use, and
encouraging conservation and protection of water resources.”
Thus, the purpose of this report is to describe how a formal, economic -based, cost/benefit
analysis of the Sacramento Water Forum and its Successor Element could be accomplished. As described
throughout this report, given the intangible nature of much of the benefits that could conceivably be
derived from the Forum, this is not an easy task and in many ways is at the frontier of the currently used
tools of cost/benefit assessment. As noted in the works of Innes and Booher (1999), and Connick and
Innes (2003), academics who study collaborative policy making may at first be skeptical of this exercise
because of the application of a traditional paradigm that is likely to undervalue the most important
outcomes of consensus-based dialogues. But I believe that the well accepted contingent valuation
techniques that are advocated here to value the “tangible” and “intangible” benefits of this environmental
consensus processes are the best available if one desires a quantitative dollar measure of these benefits.
And a dollar measure of these benefits is what is needed to document to the general public whether the
dollar costs are less than the benefits. Attention will be paid to valuing what Innes and Booher (1999, p.
419) describe as the first order (social capital, political capital, intellectual capital, etc.), second order
(new partnerships, joint learning, changes in practice, etc.), and third order (less destructive conflict, new
institutions, new discourses, etc.) benefit effects that can arise from a consensus process.
The Center for Collaborative Planning – the entity responsible for supplying mediator and
consultant support to the Water Forum – believes that the production of this report will be valuable for
two reasons. The first is from the pure academic perspective of furthering thought on the feasibility of
using this traditional economic approach to evaluating the social desirability of pursuing consensus based
agreements regarding environmental conflicts. The second is from the more practical perspective of
offering a quantitatively based piece of evidence specifically for or against the social desirability of the
Water Forum and it Successor Effort.
6
As described by Fuguitt and Wilcox (1999, Chapter 4), Cost/benefit assessment is a quantitative
approach formulated by economists to assess whether public choices that use scarce resources promote
efficiency. To complete such an analysis, the researcher begins with a specific public policy and then
identifies social benefits and costs generated by the policy. The usual efficiency rule that is then applied
is that the policy is socially desirable if the private and social benefits generated from it are greater than or
equal to the private and social costs incurred to pursue it. Described in this manner, the approach is
intuitively appealing and may appear easy to apply. The reality though is the application of this method is
rarely easy. For instance, consider the current policy effort of the Forum and its Successor Effort that has
gone on for more than 12 years and the important methodological questions that must be addressed to
conduct a CBA. What is the appropriate baseline to use in generating the benefits and costs to attribute to
the Forum and its Successor Effort? The costs of this effort have been cited previously at about $13
million, but does this really include all of the true direct and indirect, private and social cost? What about
valuing the large amount of time put into Forum and Successor meetings by participants in the consensus
process? Furthermore, how do you value costs entailed in 1993 compared to those in 2004? On the
benefit side, how do you translate the multitude of direct and indirect benefits possibly gained from the
Forum and Successor Effort into units comparable to the dollar measured costs? What about valuing
benefits that may only possibly occur in the future? For that matter, whose costs and benefits should
count in such an analysis? These are all relevant questions and the formulation of suggestions for
appropriate answers is what much of the rest of this report is all about.
The Remainder of this Report
The remainder of this report is divided into seven additional sections. The next section includes
additional background information on the consensus based public policy intervention that is the subject of
the proposed Cost/benefit assessment. Information on the geographic area it covers, participants in the
process, stages of the consensus building process, and specific achievements of the Successor Effort is
essential to formulation a methodologically sound assessment. Section III offers relevant information
regarding some outcomes (water management, water conservation, ground water, and social/political
7
capital generated among participants) that have been attributed to the Forum and its Successor Effort.
Section IV continues this examination of outcome differences specific to three case studies of water
related outcomes that were likely to have been litigated and delayed were it not for the Forum. Section V
offers the reader a brief review of some detailed cost/benefit issues that must be dealt with in order to
propose the specific methods of assessing the costs and benefits that are described in Sections VI and VII.
Finally, Section VIII includes suggestions for a plan on how to complete the proposed cost/benefit
assessment of the WFSE.
8
II. Background on the Water Forum and its Successor Effort
This section of the report contains further details that will assist in the later crafting of the desired
prospectus on how to complete a cost/benefit assessment of the Water Forum and its Successor Effort.
Geographic Area of Interest
A necessary initial step in the Water Forum process was choosing its geographic area of interest. The
result of this choice is best illustrated by the map contained in Figure 1 that is featured prominently in
Forum’s related publications (Water Forum, 2001, p. 4; Water Forum 2004, p. 7; and Water Education
Foundation, 2002, p. 5). Later in this report, this defined geographic area will play a prominent role in
defining whose costs and benefits count in the proposed assessment of this public policy.
Figure 1: The Water Forum’s Geographic Area of Interest
Participants in the Water Forum
Representatives from the 40 organizations listed in Table 1 participated in the multi-year consensus
building process that yielded the final Agreement. These organizations spoke for public, environmental,
9
business, and water interests. As will be accounted for later, the benefits and costs of the Forum and its
Successor Effort are more likely to fall upon these organizations and the specific constituencies that they
represent.
Table 1: The Water Forum Agreement Signatories
Stages of the Water Forum
From 1993 to 1999, the consensus process that yielded the Water Forum Agreement went through four
distinct stages. As is the case in many public policies, the costs of this process were front loaded, while
the benefits occurred later or have even yet to fully occur. When I later talk about assessing the specific
costs of the Water Forum, it will help to have a simple understanding of what went on in each of the
10
distinct stages that led to a water agreement for the Sacramento Area and the Successor Effort put in place
to implement it.
As prescribed by the Getting to Yes method of consensus building, an appropriate motto for the
work of the Water Forum is “process, process, process” (Water Education Foundation, 2002, p. 12).
Beginning in early 1993 and continuing through 1994, the first stage in this process involved planning,
assessment, and organization. This started with the city and county of Sacramento forming the Office of
Metropolitan Water Planning. This office then brought together initial stakeholders (business leaders,
environmental groups, and citizen groups) from the region to identify the water issues to be discussed,
what other groups needed to be at the table, and whether the involved parties wanted to collaborate. Once
this was handled, basic organizational concerns such as training in interest-based negotiation, establishing
ground rules, and meeting schedules was dealt with. In this first stage, participants were also divided into
four caucus groups: public, environmental, business, and water.
The second stage of the consensus process began in January 2004 and continued through the
spring of 2005. This stage involved monthly presentation to all participants regarding the technical and
legal issues surrounding water issues in the American River Basin. This was a conscious attempt to instill
an equal education upon all participants. Presentations were specifically geared to separate fact from
emotion and build a common trust among participants. An important rule imposed during this second
phase was that no negotiations were allowed to take place among participants, though each month staff
and the chief mediator (Susan Sherry) met separately with the four caucuses to help them develop a clear
statement of their interests.
Negotiations began in the third stage of the Water Forum Process that lasted from spring 1995 to
mid 1997. During this stage of the consensus process three teams were created that focused on surface
water issues (both water diversions and environmental), ground water issues, and water conservation
issues. Representatives from each of the public, environmental, business, and water interest caucuses
were on each of these teams and they met monthly to craft potential language for the final agreement.
11
Three fourths of the team members had to support the proposed potential language on the resolution of an
before it could be brought before the full group for consideration.
In mid 1997, while a full draft recommendation was being circulated, a consulting firm
developing a necessary environmental impact report found a substantial error in a computer model used
throughout the earlier Water Forum process to predict American River Flows. Since the then circulating
proposal on agreed upon diversions, and their expected impacts on the River’s recreation and
environment were based upon faulty predicted river flows, the correct river flows had to be circulated and
the consensus process on reaching a new agreement began anew. This resulted in the fourth and final
stage of the consensus process that culminated in the final Water Forum Agreement being signed in
January of 2000.
The Water Forum (2000) Agreement has been lauded for the fact that it lays out the basic ground
rules for water use in the Sacramento Area until 2030. The Agreement lists detailed commitments that
signers have made toward water supply infrastructure, surface water diversions, habitat improvements,
groundwater use, and water conservation. As Ed Winkler, Executive Director of the Regional Water
Authority and Sacramento Groundwater Authority believes (Water Education Foundation, 2002, p. 17):
Within those parameters we can develop a regional plan to coordinate our surface water and
groundwater and we can launch capital improvements and programs consistent with the Water
Forum framework without fear of lawsuits. Without the Agreement, there could be battles over
every individual project and its potential adverse effect on the Lower American River.
In retrospect, the Water Education Foundation (2002, pp. 19-20), concludes that rival
stakeholders in the American River Water Basin were able to come together to reach a balanced
agreement due to the strong commitment of participants, the community of place that developed because
of the consensus process, the financial support of the city and county of Sacramento, a creative and
persistent staff and chief mediator, and caucus leaders who stepped up from all four interest groups. All
involved also agree that the Water Forum’s Successor Effort, which began in July of 2000 and continues
till today, acts as the necessary mechanism to insure that the governance and implantation of the plan
continues in the proven consensus building manner that yielded the Forum’s Agreement.
12
Achievements of the Water Forum and its Successor Effort
Important to the desired final assessment of the benefits generated by this public policy is not only the
promise of what the Agreement holds for the future, but also an accounting of specific achievements that
have occurred in the five years that it has been in place. Fortunate for this analysis , the original
agreement required that after five years the Water Forum staff produce a comprehensive five-year
evaluation on progress toward achieving the two goals of the Water Forum Agreement; a safe and reliable
water supply and protection of the public trust values of the Lower American River. In the summer of
2005, Forum staff were well on their way to producing this report and a copy of its first draft is contained
in Appendix I. Also, in April of 2005, the Water Forum published the Lower American River: State of
the River Report. In Appendix II, I have reproduced a section of this report which states some key
findings in regard to the River. Here the Water Forum concludes that there has been clear progress on
“managing the Lower American River to protect fish and river habitat,” “meeting water quality goals and
achieving regulatory standards for the Lower American River,” “implementing Lower American River
levee stabilization work and erosion control,” and “communicating and collaboration among lower
American River stakeholders to inform and improve current and future management;” and some progress
on “maintaining and/or improving habitats adjacent to the Lower American River.” Appendix II also lists
two tables from the State of River Report that identify the increase in steelhead and salmon in the Lower
American River that have occurred since 2000.
The documents included in Appendix I and II offer an inventory of the benefits that a CBA must
place a dollar value on. The achievements of the WFSE have been derived from the Forum’s annual
reports, grant/award applications, planning documents/studies, the results of Weisenfeld and Orton’s
(2004) earlier research on the topic. The projects, plans, studies and processes noted in Appendix I are all
part of the Water Forum Agreement and were influenced by its Successor Effort. The accomplishments
of this public policy effort have been classified according to the seven elements thought essential to
achieving the two primary goals of the Water Forum.
13
As noted in recent newspaper article that appeared in the Sacramento Bee (Glibson, 2005),
progress is also now being made to increase the minimum summer water flows in the Lower American
River that are a result of United States Bureau of Reclamation decisions on releases from Folsom Dam.
As noted in Appendix 1 under Ele ment 3, the discussion on these flows was ongoing (over the course of
21 years) in February 2005 until a fish disease identified with inadequate summer flows was confirmed.
Members of the Successor Effort have been able to use this tangible occurrence of likely fishery decline
under the status quo to reach a tentative agreement with the Bureau of Reclamation that water will flow at
a minimum of 1,750 cubic feet per second through Labor Day (from preceding flows that have been as
low as 250 cubic feet per second).
What Is Next
In the next section of this report I offer some additional background information on what the
Water Forum and its Successor Effort (WFSE) has been able to achieve in the areas of water
management, water infrastructure, ground water, and the generation of social and political capital among
participants. These achievements are described in relation to a baseline of what the situation would likely
have been like without the Forum.
14
III. Baseline Comparisons from the Water Forum and its Successor Effort
This section offers further background information on topics where observers believe the Forum
and its Successor Effort have produced measurable outcomes that were very likely to not exist if the
baseline of comparison was the Sacramento Area without the Forum. A review of these outcomes is
necessary to frame the cost/benefit assessment (CBA) methods developed later.
Water Management
California’s Fish and Game Code 5939 requires the operators of any dam in the state of to provide water
flows “to keep fish in good condition.” Participants in the Water Forum had this in mind when their
consensus effort began. Unfortunately, the United States Bureau of Reclamation (BOR) – who is
primarily responsible for determining the amount of Lower American River water flow – remained
outside of the Water Forum negotiations and never signed the final Agreement. Subsequently, the
Agreement and recommendations made through the Successor Effort exert no binding authority over the
Lower American River flow decisions made by the BOR. A Water Forum (2004, p. 4) report states:
The notable missing piece of the Agreement is a final agreement from federal and state agencies
on our proposed improved flow standard for the lower American river. The goal is to complete
this project by fall of 2005. If the state and federal agencies are serious about protecting the
lower American Rive, then the project can be completed within a year. We will continue to push
this project as our highest environmental priority”.
But as noted earlier, during the summer of 2005 there has been progress on achieving the flow standards
recommended through the Water Forum. Reasons for why this has been difficult are offered next.
The Federal Bureau of Reclamation operates Folsom Dam under the authority given to them by
the United States Department of the Interior. With operations and facilities in 17 Western states, the BOR
is the largest wholesale water supplier, and the second largest producer of hydroelectric power in the
United States. Since the Forum’s inception, the BOR has never agreed to be an active participant, only
sent an observer to consensus negotiations , and never signed the final agreement. The likely explanation
for this course of action is fear of setting a precedent regarding federal authority to manage rivers under
stewardship. Though in an effort to appease the Forum, the BOR did agree to establish the American
15
River Operations Group (AROG). The AROG is an interagency group made up of the National Oceanic
and Atmospheric Administration fisheries, California Department of Fish and Game, Save the American
River Association, and members of the Water Forum’s Successor Effort. The AROG is charged with
offering proposals and suggestions to the BOR on water flow and temperature control in the Lower
American River, but the BOR is under no obligation to follow these suggestions. Under federal
mandates, the BOR places flood control and managing water exportation as its main priorities when
determining water flow.
Releases from the Folsom, Oroville, and Shasta reservoirs are largely made to control possible
flood situations, and to meet water export demands and water quality objectives in the Sacramento-San
Joaquin Delta. Of the three reservoirs, the shortest travel time to the Delta is from Folsom (one day, as
compared to three days from Oroville , and five days from Shasta). The Bureau also considers Folsom
reservoir to have the “highest potential to refill” and is therefore often used as a “first response facility” to
meet Delta water needs. This use of Folsom reservoir has produced definite impacts on the Lower
American River’s fish populations. Under current flow standards, the Bureau’s own guidelines suggest
keeping water temperatures between Nimbus dam and Watt Avenue to less than 65 degrees from June 1
through November 30. However, the BOR admits that meeting these standards are often not possible in
years when the cold water storage in Folsom is low.
The timing of the fall salmon run on the Lower American River can vary by one month or more
(usually beginning in early to mid-October) depending on the prevailing water temperature. Spawning
typically does not begin until the water temperatures fall to 60 degrees. Because of this,
environmentalists realize that manipulating the timing, temperature, and rate flow released from Folsom
and Nimbus dams will produce the most immediate and effective results for fish restoration. According
to Mike Healy, a biologist with the California Department of Fish and Game, thirty-seven percent of the
2003 salmon run (or about 59,000 adults) died before spawning on the Lower American River. The 2002
run lost more than 30 percent of the run (or about 35,000 fish); while, the 2001 run lost an estimated
16
88,000 fish or 67 percent of the returning salmon. These fish primarily died due to high water
temperatures that could have been prevented if Water Forum flow standards had been adopted.
Water Infrastructure
Since the signing of the Water Forum Agreement in April 2002, water processors in the American River
Basin have undertaken major restructuring, additions, and improvements to their water processing
infrastructure. These include dams, water purification pumps, pipelines, water processing plants, wells,
water storage tanks, and even residential metering. While some of these changes to the Sacramento
Region’s water processing infrastructure would have taken place if the Water Forum Agreement had not
existed, many of the improvements have been attributed to the success of the Water Forum in bringing
together stakeholders. Previous to the Forum, many of the water districts were in the midst of lawsuits,
had recently been involved in lawsuits, or were stalemated as a result of contentions to changes in their or
others water infrastructure.
While many water purveyors had major construction projects dependant on agreements emerging
from the Water Forum, a number of water districts in the Sacramento Area had planned projects that were
uncontested by the community and environmental groups. One example of a water purveyor whose
infrastructure changes were not very affected by their participation in the Forum is the Carmichael Water
District. Unlike many water districts on the American River, Carmichael is about 95% built-out and has
always had an excess of water rights. Changes in water processing infrastructure for this district would be
to update existing processing and pipeline facilities, or to regulate water usage. Before entering the Water
Forum in 1993, Carmichael Water District had several infrastructure improvements planned; including a
$24.1 million dollar water filtration pla nt, and 25,000 feet of pipeline and a pressure equalizer, costing an
additional $3.8 million dollars. The district had sent out an Environmental Impact Report (EIR) to all
water agencies in the area as well as the regulatory agencies in 1991, but there were no negative responses
from the EIR draft recipients. Carmichael Water District had started construction on their water treatment
plant, and was ready to begin laying new pipeline when they joined the Forum in 1993. According to
Steve Nugent, General Manager of the Carmichael Water District, participation in the Water Forum
17
produced only indirect benefits to their districts’ water processing infrastructure which included increased
surface water diversions and an expedited timeline for the conversion of businesses and residences to
metered water service.
Other water districts in the Sacramento Area saw significant changes in their water processing
infrastructure due to the signing of the Water Forum Agreement. For example, before the Water Forum
Agreement, the City of Sacramento proposed a doubling in capacity of one of their plants (Fairbairn) to
meet increased water needs. Local environmental organizations, including the Friends of the American
River, vehemently opposed this expansion in fear that increased water diversions would contribute to
increased fish kills. The Water Forum Agreement provided for less surface water diversions during dry
years, resulting in expected overall higher flows and lower water temperatures. These changes addressed
the fish kill concerns raised by the proposed expansion to the Sacramento water plant and
environmentalists subsequently agreed to not challenge it. If not for the Water Forum, it is almost certain
that this plant expansion would be barred from happening for at least several years pending a judicial
decision.
Furthermore, the Placer County Water Agency (PCWA) had planned since 1990 to construct a
pump station along the American River, but struggled in getting it approved due to environmental
concerns. By participating in the Water Forum, PCWA was able to reach a consensus agreement with
the environmental community on what they needed to do remove their opposition to the pump station.
When completed in the spring of 2007, this pump station will provide 35,000 acre feet of water to homes
and businesses in a growing portion of Placer County.
Groundwater
Water drawn from the ground provides over half of all the water used in the Water Forum’s geographic
area of interest. Although attempts were made to monitor the level of ground water in this area before the
Forum came into being, not enough was known about the North American River Groundwater Basin
underlying the Sacramento region. Complicating this lack of knowledge is the lack of a state or federal
permit system for groundwater rights. Consequently, prior to 2000, the regulation of groundwater rights
18
in the Sacramento Area had been purely left to local governments, if it was done at all. Prior to the
Forum, Sacramento Area water jurisdictions had attempted to assemble a groundwater management
association, but the attempt proved unsuccessful. Without the Forum and its Successor Effort, the
groundwater situation in the area was beset by cross-jurisdictional disputes and a lack of knowledge
regarding what was a sustainable level of use.
The lack of oversight of the North American River Groundwater basin groundwater was very
evident before the Water Forum process began. Due to over pumping, in some places the groundwater
level had been lowered by up to ninety feet and was becoming in short supply. Much of this was due to
the substitute nature of groundwater for surface water (primarily drawn from the American River). For
example, residential developments in north Sacramento County were approved with the understanding
that they would rely primarily on surface water. As access to this surface water failed to materialize,
these new developments grew increasingly reliant on groundwater drawn from near the Placer County
border. Agricultural interests in Placer County grew concerned over this pumping and convinced Placer
County to sue Sacramento County.
In addition to over pumping, stakeholders prior to the Forum were growing increasingly
concerned about groundwater contamination. One egregious example being a perchlorate plume
spreading from the Aerojet manufacturing facility near Folsom. Ground water purveyors threatened by
such contamination were left to fend for themselves. The area also lacked the ability to coordinate ground
water provision for large development projects that offered economic benefits for the entire region. In
short, water purveyors were primarily looking out for their own interests, solving disputes through
litigation, and individually bearing the burden for capital project costs that could have been more
efficiently distributed across jurisdictions. The real fear was that continued unmanaged pumping would
ultimately put purveyors out of business.
Before the Water Forum effort, water purveyors lacked a shared understanding of how the Basin
truly worked. What they learned from the education component of this consensus process was that the
North American River Groundwater Basin consists of three sub-basins or cones of depression in the
19
North, Central, and South portions of Sacramento County. They also discovered that the Basin is elastic.
In other words, despite the amount of pumping demand, the Basin stabilizes at a certain point due to a
natural river recharge. Knowing these facts helped water purveyors agree to maximum sustainable yield
and conjunctive use levels. Sustainable yield is the baseline amount of groundwater that can be pumped
out of the Basin over long periods of time while still maintaining acceptable groundwater elevations. For
the North area, maximum sustainable yield was determined to be 131,000 acre-feet of water per year,
which incidentally was the 1990 pumping amount. Conjunctive use describes the coordinated use of
groundwater with surface water. In dry years more groundwater is pumped to decrease reliance on
decreased surface water. In wet years plentiful surface water is predominantly used in lieu of
groundwater, and some may even be pumped back into the groundwater basin.
The shared educational experiences of the Water Forum have generated consensus agreements on
sustainable yield and conjunctive use. In addition, groundwater wells threatened by Aerojet
contamination in the Fair Oaks and Carmichael Water Districts are no longer the problem of just these
two districts. While a few lawsuits have surfaced – such as the Sierra Club challenging the West
Roseville Specific Plan – most agree they have not been as protracted and costly due to the court’s
acknowledgement of the conjunctive use strategy outlined in the Water Forum’s Agreement.
In addition, discussions started in the Forum process gave birth to the Sacramento North Area
Groundwater Management Authority (later named Sacramento Groundwater Authority) that monitors and
manages the amount of groundwater pumped from this portion of the Basin. The Sacramento
Groundwater Authority (SGA) is a joint-powers authority between the cities of Sacramento, Folsom,
Citrus Heights, and the County of Sacramento. These jurisdictions have delegated “police authority” to
the SGA in order to enforce the agreed upon maximum sustainable yield and manage the Basin in a
cooperative fashion. Fourteen local water purveyors, as well as representatives from agriculture and
independent ground water pumpers serve as the SGA’s Board of Directors. Perhaps SGA’s most notable
accomplishment was the adoption of a Groundwater Management Plan in December of 2003. The
Groundwater Management Plan identifies sixty-three actions that SGA will undertake during plan
20
implementation. Components of the Plan include strategies for continued stakeholder involvement, a
monitoring program for 260 public wells and forty additional private wells, groundwater protection and
replenishment, and integrated planning.
While Placer County agencies are reluctant to yield authority to the SGA, an envisioned Placer
County Groundwater Authority will no doubt enhance overall Basin management. Also, central and
south area sub-basin groundwater management is currently being negotiated through the Successor Effort.
The Central Sacramento Groundwater Forum is in the process of completing a management pla n for the
central sub-basin. This will no doubt be challenging due to the approximately 6,000 individual pumpers
in the central sub-basin region. Similarly, the Southeast Sacramento County Agricultural Water
Authority is working to implement a groundwater management plan for the South sub-basin.
Social and Political Capital Produced Among Forum Participants
Social capital is created when individuals form connections amongst themselves. Some of the benefits of
these social networks are the trust and acts of reciprocity that they can produce. In addition, these
networks generate information, ideas, and support that individuals can use in their relatio nships with other
people . Grootaet, et al. (2003. p. 6) defines “bonding” social capital as ties to people who are similar in
terms of their demographic characteristics; such as family members, neighbors, close friends and work
colleagues. “Bridging” social capital, on the other hand, consists of ties to people who do not share many
of the same characteristics. Additionally, “linking” social capital refers to one’s ties to people in positions
of authority.
Participants in the Water Forum and its Successor Effort often talk about the changes in trust,
friendship , and camaraderie that developed among the diverse participants in these consensus processes.
In personal interviews with Forum participants they often stated that they had adopted “the Water Forum
Way” of thinking, which included an understanding and appreciation for other participant’s perspectives.
One participant’s statement is illustrative of how many felt on this topic: “One of the biggest values [of
the Forum], if not the biggest value for me, personally, was the relationships.” Another Forum participant
referred to the ongoing benefits of the relationships that have been built: “Today, many years after the
21
signing of the Water Forum Agreement, the relationships forged then are just as strong. And from time to
time, we call upon each other to get support.” When probed to discuss specific benefits of the
relationships, interviewees almost universally referred to “access to people you didn’t have access to
before” as a significant benefit of the Water Forum. Another discussed his ability to obtain the cell phone
numbers and direct telephone numbers of other Water Forum participants. To him, this represented a new
ability to get “insider information regarding big water supply projects” that aided in his profession and
allowed access to new clients. The formation of social capital among participants is clearly an outcome
that would not have existed without the Forum. In fact, academics (like Innes and Booher, 1999; and
Connick and Innes, 2003) who study collaborative process often cite the formation of social capital as one
of the most important outcomes to result.
An example of the benefit from social capital generated in the Water Forum is warranted. Four
years into the Water Forum, the San Juan Water District (SJWD) was slated to move forward on a project
within the district boundaries. Environmental interests were committed to seeing SJWD also install water
meters in the district and threatened to file suit. After several attempts at negotiation, Water Forum
mediators brought together the Director of the SJWD and the representative of the environmental group,
both of whom were Water Forum participants. The environmental representative included his attorney,
who planned to file the suit at the close of the meeting. During the course of the meeting, the SJWD
Director indicated water metering was an important principle to his board, but he was unable to secure
their agreement to metering at the same time as the other components of the project. He suggested,
however, that he would be able to deliver his board on that topic within one month. Water Forum
mediators asked the environmentalist if he trusted the SJWD Director and whether he believed his
promise to deliver his board. They also asked the SJWD Director if he trusted the environmentalist and
whether he would believe a promise from the environmental community to not pursue a suit for one
month. Both men affirmed their trust for each other and, on a handshake, agreed that the
environmentalists would not file suit immediately and the SJWD would agree to metering within a month.
Within that month, the SJWD did, indeed, adopt a water metering policy and no suit was ever filed.
22
An early test to the social capital developed in the Water Forum came shortly after the Agreement
was signed. In 2002, representatives of an environmental group that had been party to the Agreement
broke ranks and sued over a development project being undertaken in Sacramento County. The
individuals representing the environmental interests had replaced other individuals who were longtime
participants in the Forum. Water Forum staff convened a special meeting of the Successor Effort to
discuss whether an alternative to the lawsuit was possible, but were unable to come to a consensus
resolution. In the court’s subsequent dismissal of the environmentalists’ lawsuit, they referenced the
existence of the Water Forum Agreement as evidence of the region’s consideration of various water
stakeholders’ interests. Counsel to the business interests participating in the Water Forum indicated that
the court opinion lauded the Water Forum as the correct approach to take . Despite the breach in trust that
caused the lawsuit, participants feel the outcome had the result of strengthening the Water Forum’s
purpose.
Along with social capital, it can be argued that the WFSE has also generated political capital.
Regarding stakeholders in the Water Forum, the value of their polit ical capital is reflected in a new found
ability to take collective and coordinated political action on regional water priorities. Early in the Water
Forum process, the City of Sacramento identified the need to move a point of diversion further down the
American River. With only about eight months of working together in the Forum, participants quickly
learned that the City’s request was one that would benefit their own agendas. In the face of opposition
from the Bureau of Reclamation, a group of Water Forum participants traveled to Washington, D.C. and
successfully lobbied Congress for approval for the moved diversion.
Several years of collaboration among Water Forum participants also led to success on what had
been decades of acrimony with the East Bay Municipal Water District (East Bay MUD). East Bay MUD
entitlements to the American River water and their point of diversion had been the subject of litigation
and great contention among water stakeholders. After working together for about five years, Water
Forum participants came to a collective agreement on the best way to pursue changes to the current
situation and presented a united front to East Bay MUD. The unanimity among the stakeholders – or the
23
political capital they had created – acted as a critical factor in East Bay MUD agreeing to a change that
caused them additional expense, but satisfied the water priorities for the region. As cited in Connick and
Innes (2003, p. 185), Water Forum members even used their accumulated political capital to persuade a
local congressman who was not a fan of Water Forum priorities to sponsor federal legislation that resulted
in the installation of expensive equipment in American River reservoirs to measure water temperature.
What Is Next
In Section IV this report continues with the examination of further outcomes that likely would not
have occurred without the Forum by focusing on litigation issues in particular. This includes a general
discussion of how the climate for litigating water disputes in the Sacramento Area changed after the
Forum and a look at three specific case studies.
24
IV. Litigation and Three Examples of How it Changed after the Water Forum
Rather than just sticking to a pre-determined position on a water issue confronting the Sacramento Area,
the consensus driven process that created the Water Forum Agreement and its Successor Effort called for
participants to understand their own broad interests, and the broad interests of other stakeholders. As
discussed earlier, this approach helped Forum participants form cooperative relationships. Some say that
a new culture of the “Water Forum Way” has replaced the previous culture of entrenched positions on
water issues that often resulted in stakeholders meeting in court when these positions were in conflict.
Observers have noted that the Water Forum process demonstrates the long term benefits to all of
understanding the position of others as well as you understand your own position. When one only
understands their position and takes it firmly , the goal when confronting an opposing position often
becomes winner take all. In the absence of seeking resolution through interest-based consensus
negotiation, litigation usually becomes the default method of opposing parties desiring the outcome of
winner takes all.
Signatories of the Water Forum Agreement have agreed to try and address regional water issues
through collaborative negotiation rather than litigation. Successor Effort negotiations are carried out in a
collaborative framework in which parties with divergent views can reach a goal or complete a task to the
mutual satisfaction of at least three-fourths of the participants. Like other collaborative frameworks, the
Water Forum utilizes facilitation during negotiations. The facilitator functions as a neutral process expert
and avoids making substantive contributions, but helps to bring the parties to consensus. One of the main
benefits of negotiating issues in a collaborative setting is avoiding the major costs and time delays usually
associated with litigation. The three case studies described next are the one most often cited by Water
Forum staff as best demonstrating the success that the Forum and its Successor Effort has had at avoiding
litigation.
Fairbairn Water Treatment Plant and Diversion Facility
25
The expansion of the Fairbairn Water Treatment Facility has been an area of contention between
Sacramento City water officials and environmentalists for almost 25 years. In 1981 the City drafted an
initial environmental impact report (EIR) regarding a proposed expansion of the existing facility. The EIR
stated that by diverting additional water to the treatment plant, the City would be better able to meet the
growing water demands of the area. Numerous environmental groups contested the report because they
believed that diversion of additional water would result in harmful environmental impacts that included
unfavorable conditions for fish spawning. Even though the City owned the uncontested rights to the
Lower American River’s water, such rights were meaningless without a facility to treat the water.
During the early 1990s the City attempted several times to re-draft the EIR in a manner that
appeased environmental concerns enough to allow them proceed with the needed expansion. However,
environmental groups remained unconvinced by these attempts and were adamant about blocking the
proposal pending. In the late 1980s the City was faced with the decision of giving up on the project or
pursing litigation in order to achieve the necessary legal ruling. The City was well aware that litigation
would result in a costly and time-consuming effort for all involved parties. For instance, in a case
involving the counties of Pasco and Pinellas in Florida, the Tampa Tribune reported that each county has
spent upwards of $4 million fighting a legal battle over the expansion of a water treatment plant (Pedreira,
D. “Water War Keeps lawyers Pockets Full,” 21 July 1996, Metro Section). Although there is no way to
predict what the City of Sacramento would have had to pay if chose litigation, it is reasonable to assume
the costs would have been extensive.
At the time the City of Sacramento was seriously considering litigation, the Water Forum was
created. The City welcomed the Forum as an opportunity to negotiate their position and earn the ability
to expand Fairbairn. When asked about the actual negotiating that occurred on the expansion of
Fairbairn, Susan Sherry (the Forum’s Chief Mediator) replied that it was one of the “easiest agreements to
make.” She stated that there was some initial contention in the beginning regarding the City’s right to
divert the desired amount of water from the River, but the 1987 rules set by Judge Hodge in the East Bay
MUD case (that were adopted by the Forum) led to the eventual resolution. The City initially argued that
26
because fish did not spawn near the Fairbairn site, Judge Hodge’s Rules should not apply.
Environmentalists argued that water flows affect fish in all areas of the Lower American River, therefore
the City should be held accountable to the Hodge Rules. This conflict was resolved when Judge Hodge
and an attorney for East Bay MUD visited the Water Forum and told the participants that the ruling had
set a precedent and that the City would be responsible for following the ruling unless they chose to
challenge the ruling in a court case. Weighing the options, and knowing that if they chose to litigate the
expansion could be postponed indefinitely, the City agreed to set their increased diversion rate at an
expanded Fairbairn site to correspond with Hodge’s flow standards.
In this early test of the power of the Water Forum, the two interested parties were able to come to
a non-litigated consensus regarding the expansion of Fairbairn. In some sense both sides won. The City
was granted permission to expand the facility, but would need to set its diversion rates to correspond with
the hydrologic state of the Lower American River such that no damage would come to the River’s
fisheries or environment. Thus, the City got more water in wet years, and the environmentalists got a
legitimate preservationist victory. In addition, the City agreed to conduct ongoing environmental impact
studies regarding the expansion, and decrease water diversions if the studies showed that negative effects
were occurring.
Sacramento County Water Agency and the Nature Conservancy
The Sacramento County Water Agency (SCWA) created its Zone 40 Water Supply Master Plan (WSMP)
in 2002 to address the projected agricultural, industrial, and residential water needs in the southern
portion of the county through 2030. The goal of the WSMP was to “define a conjunctive use program of
groundwater, surface water, and recycled water supplies; and a financing program for the construction of
a new surface water diversion structure, a surface water treatment plant, water conveyance pipelines,
groundwater extraction, treatment storage, and distribution facilities.” The Zone 40 plan was set to meet
the projected needs of the SCWA during three types of hydrologic years: average, wet, and dry.
The Cosumnes River runs through the Forum’s geographic area of interest and is relatively
untouched below a few small dams in its very upper reaches. The Consumnes, which is the last
27
remaining un-dammed river that flows into the Central Valley, provides a unique aquatic environment
and supplies various habitats with necessary water during the wet seasons. As a result of its relatively
natural state, parts of the river go dry durin g the summer months. When weather becomes wetter in the
fall, the river rejoins and this enables Chinook salmon to swim upstream to their spawning grounds. The
Cosumnes River is also a “receiving river” and depends on the nearby groundwater table to maintain its
historical water levels. Because of a dwindling water table, in the early part of the rainy season water
failed to remain in the River and instead flowed into the ground. This decreased the length of the
spawning season and increased fish kills. Over time these occurrences were expected to significantly
reduce Consumnes River fisheries.
The Water Forum Agreement lays out conjunctive water use strategies for the Consumnes that
call for increased groundwater use to maintain surface water levels in the Lower American River. A large
part of the reason for decreasing water tables near the River is the loss in groundwater from following this
strategy. The Nature Conservancy (TNC) is a non-profit environmental organization who became
concerned over this situation due to its interest in preserving the natural communities along the
Consumnes River. Hence, TNC took a lead role in formulating a challenge to Sacramento County’s
“excessive” use of groundwater near the River. Local water districts in the area – collectively know as
the Southwest County Agricultural Water Authority (SSCAWA) – became involved in this issue due to
their wells being near the Cosumnes. The increased stress on the Consumes River prompted TNC to
challenge the Zone 40 WSMP based on the fact that the draft EIR justified the plan through the Water
Forum Agreement. Several members of the environmental community objected to the use of a document
that “does not have authority to govern or regulate.” TNC retained a lawyer in order to document its
concerns with the Zone 40 WSMP, which included the opinion that the County had failed to study the
unique issues of the Cosumnes, whose fate was not adequately considered in the development of the
Water Forum Agreement. In addition, the environmental community felt the doctrine of public trust had
been violated, and prevailed upon the California Attorney General’s office to write a letter on their behalf.
While it is generally believed that TNC would not have taken legal action against the EIR, other members
28
of the environmental community were perceived as wanting to litigate. The Successor Effort of the Water
Forum then set out to try and address this concern outside of the courts through a consensus based
processes (the “Water Forum Way”) that attempted to maintain the interests of environmentalists, water
suppliers, and consumers.
The result of the Successor Effort’s intervention was a Memorandum of Agreement (MOA) that
put forth five major elements that all Cosumnes River stakeholders were committed to working toward:
(1)
(2)
(3)
(4)
(5)
Creation of a Cosumnes River Flow Augmentation Project,
Continued Conjunctive Use,
Greater Reclaimed Water Reuse,
A Comprehensive Science and Monitoring Program,
An Integrated Regional Water Management Plan.
The Cosumnes River Flow Augmentation Project is a new approach to managing the Cosumnes River. It
combines the interest of several parties involved in the MOA negotiation. In particular, the practice of
using remediated water to augment existing river flows is a creative use of existing resource that enables
the county to turn a serious environmental problem in to a benefit. In addition, all involved parties are
committed to continuing initial groundwater modeling studies conducted during the development of the
MOA. Many familiar with this potential conflict between the County of Sacramento and The Nature
Conservancy believe that the existence of the Successor Effort kept this issue out of the courts. And the
benefits of this case continue to accrue. It is likely that additional litigation challenging the Sacramento
General Plan and the Freeport Regional Water Project (discussed in further detail below) have been
averted due to the precedent set by the successful negotiation of the Consumnes River MOA.
Freeport Diversion Facility, East Bay MUD, and the Sacramento County Water Agency
As already described in detail, the Water Forum Agreement is a document which contains layers of goals,
guidelines, and proposals. Like many negotiated agreements, certain aspects of the Agreement
emphasized broad, vague goa ls. For example , the Agreement only offers guiding principles for the huge
task of determining surface water diversions from the lower American and Sacramento Rivers. As such,
stakeholders could more readily approve the Agreement because it was relatively vague and imposed no
upfront costs. Essentially, the Water Forum deferred costs and hard choices about surface water
29
diversions to the future, thereby, transferring the burden to future decision makers. As a result, subgroups
were formed in the Successor Effort to implement the principles related to diversions as well as other
broad guidelines set forth in the Agreement.
Some background is needed in order to better understand the formation of the subgroups that
formed to address diversion issues and why these parties, in particular, were willing to invest in a
collaborative framework. Diversions along the American River have been fought in courts for decades.
As described earlier, in 1970 the East Bay Municipal Utility District (East Bay MUD) contracted with the
U.S. Bureau of Reclamation for water that would be diverted from the Lower American River into the
Folsom South Canal at Nimbus which is upstream of the Lower American River. Parties opposed to this
diversion – including Sacramento County, the Environmental Defense Fund and Save the American River
Association – sued East Bay MUD over concern about how these increased diversions would further
impact the Lower American River fisheries.
At the end of a 17-year lawsuit, Alameda County Superior Court Judge Richard Hodge evaluated
all of the evidence and issued his decision which balanced the needs of the fishery with East Bay MUD’s
contractual entitlement to American River water. Judge Hodge reasoned that because East Bay MUD had
reasonable and feasible alternatives for meeting its needs, it could use the Folsom-South Canal only when
specified flows would remain in the river; though Hodge’s legal reference to “reasonable and feasible
alternatives for meeting its needs” left great room for interpretation. Who would determine these
reasonable and feasible alternatives?
The Water Forum provided the necessary outlet for the stakeholders involved with the Hodge
decision to negotiate the remaining issues. Stakeholders in the Sacramento Area reasoned that East Bay
MUD should divert its water from the Sacramento River as opposed to the resource-rich American River.
However, East Bay MUD continued to claim that its users refused to accept the lower grade water from
the Sacramento River. Although these and other contentious issues still existed, the parties were
interested in avoiding another round of prolonged litigation. Eventually, through the Forum’s consensus
30
process, the parties agreed to a diversion from the Sacramento River in lieu of the American River. A
diversion facility at Freeport would be constructed to make the agreement a reality.
On February 13, 2002, the Boards of Directors of the Sacramento County Water Authority and
East Bay MUD each unanimously approved a joint powers agreement. The agreement established
Freeport Regional Water Authority (FRWA) which guided the financing, ownership, development,
construction, and operation of the Freeport Project. FRWA’s board is made up of two representatives
from each member organization, including directors from SCWA and East bay MUD. The City of
Sacramento is considered an Associate Member. Since FRWA was a direct product of the Water Forum,
it was perceived to be a legitimate framework where stakeholders could negotia te the details of the
Freeport diversion facility. After exploring all of the technical, institutional, environmental and
regulatory considerations, all three entities determined that the City-owned property on the Sacramento
River near Freeport would be the most viable location for a new water intake facility that would not only
meet East Bay MUD needs, but the increased demand for water in Sacramento County.
The Freeport negotiations were not without challenges. From the beginning, the Freeport
Diversion Facility drew a great deal of contention from the local community as it was assumed that the
project would spur growth in the surrounding area. Also, the local community assumed the project would
create noise, security issues, and construction challenges. However, given the collaborative nature of the
negotiations, most all parties came to the table prepared to find common interests rather than defend their
given positions. Adding to their willingness to work together were examples of projects in the region
that were on hold or being litigated due to lack of front end public involvement.
FRWA had to commit to several refinements in order to obtain final approval for the project. Of
particular importance to the local community was that the diversion plant be aesthetically sound. FRWA
brought in a highly innovative and skilled local architectural firm Lionakis. After hours of planning
sessions, Lionakis successfully engaged community leaders and activists to “imagine what the project
could be as opposed to what they thought it would be.” This collaborative approach helped to win public
support of the project as well as build trust among parties. Other refinements agreed to by FRWA
31
included noise control, minimizing use and storage of chemicals, and minimizing adverse construction
effects and resolving construction-related issues. Expected to be completed by 2010, the estimated cost
of the Freeport Diversion Facility is $700 million.
What Is Next
This concludes the discussion in Sections III and IV of outcomes and successful case resolutions that
observers have attributed to the existence of the WFSE. From these descriptions it is clear that this public
policy, that was not costless to implement, produced benefits. Recall that the primary objective of this
report is an accurate quantitative accounting of the costs and benefits of the WFSE policy. The remaining
sections of this report work directly toward that goal. Section V starts with the necessary theoretical and
practical information on how to appropriately conduct an economic -based cost/benefit assessment (CBA).
32
V. Cost/benefit Assessment Methods
The Center for Collaborative Policy, the entity responsible for supplying staff, mediator and consultant
support to the WFSE has suggested that the development of a prospectus on how to conduct a formal
Cost/benefit assessment (CBA) of this public policy intervention would be useful for two reasons. The
first is in the interest of a general inquiry as to the appropriate methods to assess whether collaborative ,
consensus-based processes can be considered “economically efficient” at resolving public policy gridlock.
This is valid reason because as noted in Colby (2003, p. 319) “…there has been relatively little economic
analysis of E&PP [environmental and public policy] dispute resolution outcomes…[and] because E&PP
dispute resolution has received relatively little attention from economists, the marginal gains from further
research and professional involvement is high.” The second reason to pursue this cost/benefit prospectus
is the particular importance of demonstrating whether or not the Forum and its Successor Effort, given its
total costs, generated enough benefits to reasonably conclude that its pursuit was economically efficient.
But before going further on the discussion of the proposed CBA that is designed to measure only
the economic efficiency of a public policy, I would be remiss if I did not remind the reader that efficiency
is only one standard by which public policy can be judged. Other standards include distributional equity
(did this policy hurt/help the poor more than the rich), sustainability (what tradeoffs does this policy
promote between current and future generations), human rights (are basic human and individual rights
violated in the pursuit of a greater good), and non-human natural rights (does this policy harm nonhumans and/or nature, and does this need to be considered to a greater deal than just its impact on
humans). I explicitly do not attempt to apply any of these other standards in my construction of the CBA
prospectus offered in the remaining sections of this report and stick to my original charge of only
evaluating the economic efficiency of the Water Forum and its Successor Effort.
Although a CBA provides the appropriate benchmark to assess the economic efficiency of the
Forum and its Successor Effort - or other environmental and public policy dispute resolutions – the
generation of a prospectus on how to do it encountered multiple challenges. First, the Forum and
33
Successor Effort lacks a defined, time-certain outcome. Publication of the Water Forum Agreement could
be considered the outcome of the Water Forum, but that would be too narrow an interpretation. The
document itself has little value without associated interpretation and implementation. Second, since the
major achievement of the Water Forum is a change in the way that water issues are thought about in the
region, it does not lend itself to a standard application of CBA. Traditionally, the tools of CBA would be
directed to study a particular project, with the collaborative environment acting as an external influence
on the project’s success. In this study, that traditional CBA model is reversed. Here, the collaborative
process itself is studied to assess costs, and the outcomes from this collaborative are studied to assess
benefits. A third important challenge to producing the CBA prospectus offered here is that many of
benefits and costs of the Water Forum are indirect, have no market determined values, and/or are just
plain difficult-to-measure. Productive relationships, increased political clout, a greater sense of
community, corollary impacts to the overall public, resulting changes to habitat management, and many
others are all somewhat elusive outcomes to quantify – especially when it desirable in a CBA to measure
them in dollars.
The remainder of Section V offers the necessary background information on the theory behind
cost/benefit analysis and some important particulars on its implementation: who is society, with and
without analysis, discounting, and contingent valuation.
The Theory behind Cost/benefit Assessment
The basic tenant of economics is that society’s resources are limited, while human desires for
goods and services produced from these resources are limitless. Thus, choices on how limited resources
should be used to produce what goods and services are necessary and economics is basically the science
of studying these choices. An economist defines the use of resources to produce a certain good or
services as “efficient” if: (1) the “total costs” of the resources used are as low as possible and (2) if the
benefits derived by the consumption of the good or service produced by the resources exceeds its total
costs.
Economics teaches that the calculation of total costs must include both direct and indirect costs.
Direct costs are out-of-pocket dollar costs. While indirect costs, are lost time or other “opportunity costs”
34
that must be spent to consume a good or a service, but have no directly observable (out-of-pocket) dollar
value.
In a non-coercive market transaction, a person or a business only purchases a good or service if
the perceived benefits they expect to receive from it are greater than the total cost they bear to consume it.
In addition, economists have also shown that goods or services produced and consumed in perfectly
competitive markets are done at the lowest cost possible. Thus, under these conditions and with the
addition that all costs of production and consumption are only borne by the economic actors directly
involved in the transaction (no “externalities”), all production/consumption can be labeled as
economically efficient. In contrast, consider the evaluation of a specific public policy action that uses
society’s scarce resources, but all consumers did not freely choose to put the policy in place, nor was it
privately produced in a perfectly competitive market. Cost/benefit assessment (CBA) was developed as a
tool to measure the economic efficiency of such a policy.
As described in Fuguitt and Wilcox (1999, Chapter 4), the first step in a CBA is the clear
identification of the public policy under evaluation. For the purpose of this report that would be the
Water Forum consensus process that began in 1993, culminated in 2000 with the signing of the
Agreement, and includes efforts to continue the consensus process and implement the agreement through
the Successor Effort that continues today. The second step in the CBA is the broad identification of the
policy’s negative and positive social consequences light of one of three possible alternatives: (1) policy
verses no policy, (2) policy verses an alternative policy or alternative private investments, or (3) the
policy’s future social value verses present consumption. The alternative chosen for this CBA is (1). That
is, what are the WFSE’s social consequences relative to what the world would have been like (the
“baseline” discussed below) if trends previous to this policy were projected into the future? An attempt to
broadly describe these social consequences has occurred in the earlier sections of this report with the
direct expense of the policy and indirect cost of participants’ time as the primary negative social
consequences, and outcomes that would not have likely occurred and litigation expenses avoided as the
primary positive social consequences. The third and most difficult step in a CBA is a monetary valuation
35
of as many as possible of the policy’s costs and benefits. In the remainder of this section I review some
of the important issues to consider when doing this valuation. Section VI offers my specific prospectus
on how to best value the WFSE’s total cost, while Section VII does the same for its benefits.
The final step in a CBA of the type that just looks at the alternative of policy verses no policy is a
comparison of whether the monetary value of benefits exceeds the monetary cost of achieving them. If all
benefits have been monetized, this is easily done. If they have not, and there is a shortfall of benefits
relative to cost, it must be left to the reader to decide if the benefits of the non-monetized qualitative
outcomes exceed the uncovered costs. The full analogy to private market efficiency can only be
completed if a CBA of the type that compares a policy to alternative policies, or private investments is
undertaken. For this is the only way to conclude that a policy’s benefits exceed it costs and that it costs
are the lowest possible. Since alternative policies are not considered here, this CBA can offer no
conclusions on whether these were the lowest costs possible to achieve the observed outcomes, only if the
benefits of these outcomes trumped their costs.
The first issue to consider when attempting to inventory and value the costs and benefits of the
Water Forum and it Success Effort are whose benefits and costs are to be count. Economists do this by
asking who has “standing” in a CBA.
Who Has Standing?
In a cost/benefit assessment, standing is defined as whose benefits and costs are to be added up in the
summation of social outcomes produced by a policy. These individuals then make up the included
“society” for the analysis, with society representing the persons who benefit or incur a cost from the
policy under consideration. According to Whittington and MacRae (1986), standing can have multiple
meanings, in which all of them fall along a continuum of involvement by the individual:
•
At the point of greatest involvement, standing is defined as the right to represent one’s
own preferences – to be a decision–maker.
•
A second and more inclusive concept of standing is the right to have one’s preferences
included in a utilitarian aggregation of welfare. This notion of standing, commonly used
in CBA, assumes that the individual has preferences that can be evaluated numerically,
but need not participate personally in expressing them.
36
•
A third and still more inclusive notion of standing permits the analyst’s estimation of the
welfare of persons who may at present be incapable of expressing preferences (e.g.
preferences of an infant). In this third type of standing, the person or entity experiencing
“well-being” is counted as such but need not even be capable of expressing preferences at
present.
•
A fourth notion of standing is the right to have one’s preferences represented by others,
even though the person represented does not participate in choosing those others (e.g.
children’s demand in parents’ willingness to pay for a good or service).
Typically, standing in a CBA is determined by the geographic area impacted by the policy and
includes the individuals, businesses, and landowners in the geographic area that bear a cost or receive a
benefit as result of the policy’s execution. If conducting a CBA of the WFSE, one could consider a
variety of potential geographic areas: Sacramento County, the geographic area designated by the Water
Forum (earlier shown as Figure I in Section I), the Tri-County Area (El Dorado, Placer, and Sacramento
Counties), the State of California, and the Nation. Table 2 lists each of these geographic areas and
whether it does an adequate job of covering the expected costs and benefits generated by the Forum.
Adequate Coverage of
Benefits Obtained
Water Forum Designated Area
Adequate Coverage of Direct
and Indirect Costs Incurred
Yes – Direct Costs
No – Indirect Costs
Yes – Direct Costs
Yes – Indirect Costs
Tri-County Area
Yes – Larger than Necessary
? – Might be Too Narrow
State of California
Yes – Larger than Necessary
Yes – But Perhaps Larger Than
Necessary
Nation
Yes – Larger than Necessary
Yes – Larger than Necessary
Geographic Area
Sacramento County
No – Too Narrow
? – Might be Too Narrow
Table 2 – Coverage of Costs & Benefits Using Varying Geographic Areas
The first of the geographic areas to consider for standing designation is just Sacramento County.
A narrowly defined geographic area, such as that of Sacramento County, requires less work on the part of
analysts as the costs and benefits are contained within a given jurisdiction’s boundaries. However, a CBA
of the Water Forum that addresses only the costs incurred and benefits received by those individuals,
businesses, and landowners within Sacramento County would fail to take into account several pivotal
37
elements of the policy itself. The Water Forum created substantial indirect costs and provided significant
benefits for entities outside the perimeter of Sacramento County. Alternatively, a CBA that defines
society as individuals, businesses, and land owners within the Forum’s geographic area appropriately
captures all of the direct costs (primarily born by the city and county of Sacramento) and indirect costs
(primarily in time) of stakeholders that participated in the Forum and its Successor Effort. This
designation also captures a great majority of the individuals, businesses, and land owners that likely
benefited from this policy. The reason that the Water Forum’s designated area is listed in Table 1 as
possibly too narrow for standing is that some benefits may have spilled over to areas of the tri-county not
included in the geographic designation, surrounding counties, counties that encompass the SacramentoSan Joaquin Delta, and even southern California counties that draw a portion of their water from this
Delta. As in most studies of this type, a tradeoff between the expense of obtaining all possible benefits
and costs, and their desired level of completeness is necessary. Costs can accurately be captured by
choosing the Forum’s designated geographic area as what has standing. This choice will also do an
adequate job of capturing the vast majority of the policy’s benefits. But if all benefits are to be truly
measured, standing in the CBA must be expanded to some areas of California beyond the WFSE
designated geographic area. Understanding this, I suggest using the Forum’s designated geographic area
as having standing and noting that if this is done there are likely some social benefits that have been left
out. If in doing this the calculated benefits turn out greater than the calculated costs, then it can be noted
that this finding of economic efficiency comes with even some of benefits not being captured. If benefits
fall short of costs, then an effort may need to be made to capture the value of these unmeasured benefits
in an expanded study.
Given the determination of who has standing in the CBA, the next subject to grapple with is the
baseline that the incremental benefits and costs of the policy are calculated from.
What is the Baseline for the CBA?
When conducting a “with-and-without” cost/benefit assessment as desired here, the included
benefits and costs are incremental, meaning they arise with the policy, as compared to what would have
38
been without the policy. According to Fuguitt and Wilcox (1999, p. 59), it is important to distinguish the
difference between a “before-and-after” and with-and-without study. A before-and-after comparison does
not account for changes that might occur without the policy. While a before-and-after comparison looks
for total benefits resulted from a policy, a with-and-without approach uses a different method to estimate
the benefits. There are two steps involved in conducting the desired with-and-without analysis. To
identify the incremental benefits and costs, the analyst must explicitly try and predict, in one way or
another, what would have happened if the policy was not pursued. This without-policy scenario is called
the baseline scenario. Next, the analyst must identify exactly how the policy’s implementation changes
the outcome from the baseline scenario. The following formula s illustrate this way of thinking:
Incremental benefits = (benefits with the policy) – (benefits without the policy),
Incremental costs = (costs with the policy) – (costs without the policy).
As can be imagined, predicting the state of the world without the policy is often very difficult for
an outside analyst to do. The important thing is to do as good a job as possible and to be very explicit in
telling the reader how the baseline of comparison was determined and exactly what it is. In generating
the baseline for this prospectus, I assume that the baseline for the resolution of water issues in the
Sacramento Area would have been the same as existed before the Water Forum was created in 1993. As
discussed earlier, this can be characterized by the East Bay MUD and Fairbairn Water Plant cases, and the
greater amount of time and litigation that would have very likely been involved in resolving such cases.
As is shown in a later section of this report, I will leave the specific determination of how this baseline
has affected the benefits derived by individual stakeholders to their own assessment.
Consider next the issue of how to add up the dollar values of benefits and costs produced by a
public policy that occur in different time periods. Should they be counted the same? The relevance of
this to CBA is discussed next.
The Need for Discounting
The concept of “discounting” is central to deciding the methods by which to conduct a formal
CBA. As Ackerman and Heinzerling (2204, pp. 181-2) write:
39
Cost-benefit analysis routinely uses the present value of future benefits. In other words, it
compares the current costs, not to the actual dollar value of future benefits, but to the smaller
amount you would have to put into a hypothetical savings account to obtain those benefits in
the future. This application of discounting is essential for many practical financial decisions.
If offered a choice of investment opportunities with payoffs at different times in the future, you
can (and should) discount the future payoffs to the present in order to compare then with one
another.
Fuguitt and Wilcox (1999, Chapter 11) offer three specific reasons why economists believe that a
dollar in the future should be valued less than a dollar received today. These reasons are: (1) the risk that
you may not get the dollar back in the future, (2) the occurrence of inflation which diminishes the real
purchasing power of the future dollar, and (3) the fact that people generally prefer current consumption to
future consumption. These reasons are all evident when you ask to borrow money from a person or
institution, say $10,000 for a year, and they ask for a payment of $10,500 at the end of one year to do this.
Here the discount rate (or interest rate) is 5% and likely has all three reasons built into it. However, when
completing a Cost/benefit assessment the reasonable assumption usually made is that there is no risk that
future dollars will not be forthcoming. In addition, inflation can be taken out of the discount rate used in
a CBA by choosing to place the accounting of all dollar value accounting of benefits and costs in one
year’s dollars. For previous costs and benefits this is done using a readily available consumer price
inflation deflator. For future costs and benefits, this is done by measuring them as if they occurred today.
Once risk (reason 1) and inflation (reason 2) are taken out of the decision on what discount rate to use,
what remains is to assign a value to reason (3) – what economists call the “social rate of time preference.”
That is, what rate is society (those with standing) on average willing to trade present consumption for
future consumption?
While the use of discounting is widely accepted in CBA, the recommended discount rate (social
rate of time preference) merits consideration. Small changes to the discount rate applied used in a CBA
can sometimes have dramatic effects on the ratio of benefits to costs, often to the point of deciding
whether a project is economically efficient or not. At one extreme are most economists that argue that the
social rate of time preference should be no different than that which is widely observed in private
markets. At the other extreme are some environmentalists (and even economists, for an example see
40
Ackerman and Heinzerling, 2004) who argue vociferously against discounting altogether and even for the
use of negative discount rate, when dealing with “priceless” issues like the provision of water.
The solution to the unresolved issue of what discount rate to use in a CBA where risk and
inflation have been eliminated is to employ a range of feasible rates and see how sensitive the cost/benefit
conclusion are to the choice of rates. The use of such “sensitivity analysis” is widely accepted in CBA
and all that remains for this prospectus is to determine the range of rates to apply. A logical upper-end
rate would be the private rate of time preference that economist believe on average can be observed by
what interest rate has been paid on U.S. Treasury Bills (with extremely little risk of default) over a given
period, less the actual rate of inflation over the same period. Historically, this has worked out to be
between 0.5 and 2.5%. A reasonable middle rate to apply is 0%. Using such there is no distinction
between dollars in the future, present, or past. While for an environmental policy like the one being
considered here, the lower-end rate advocated by some environmentalists would need to be negative. A
negative discount represents the argument that some feel that a dollar worth of water benefits is worth
more in the future (to future generations) than in present. Thus, the chosen discount rates to be used in
the proposed CBA are 2.5%, 1.5%, 0.5%, 0%, -0.5%, -1.5%, and -2.5%.
The final theoretical issue to consider before the proposed actual methods of calculating costs and
benefits can be discussed is the method that economists believe is best to value the benefits of a public
policy which are not already valued in a private market. This has been termed “contingent valuation” and
is discussed next.*
Contingent Valuation
*
An alternate way to value the benefits of the WFSE through a market mechanism would be to attempt to
calculate the time and legal expense saved through many water issues in the Sacramento Area being now
solved in the “Water Forum way” as opposed to the more litigious manner in which it was done before
the Agreement in 2000. Some Public Policy and Administration Master’s students in my PPA 220B
course explored this option as a midterm project and found that area environmental lawyers and water
suppliers were far from forthcoming on being able to, or even desiring to attempt to provide the
information (on legal fees and estimated billable hours) and speculation that such an analysis would
entail. It is for these reasons that this approach was dismissed as infeasible for calculating the dollar
benefits of the WFSE.
41
A CBA compares the total dollar value of a policy’s benefits to the total dollar value of the
policy’s costs. This necessarily requires quantifying in dollars the indirect, non-market, and other hardto-measure benefits of a policy. “Contingent valuation” (CV) is the method developed by economists to
estimate the monetary value of goods and services that lack observable market values. Widely used in
assessing environmental benefits, this method recognizes that even though observable markets do not
exist for some produced benefits, it is possible for individuals to still place a dollar value on them.
Contingent valuation is also called a “stated preference” method, as the hallmark of CV asks individuals
about their willingness to pay (WTP) to achieve a particular outcome (or willingness to accept a dollar
amount to tolerate a given situation) , contingent on a description of the context in which the outcome is
achieved.
The use of contingent valuation often requires the simulation of a market environment to provide
the respondent with the appropriate context to answer survey questions. Typically, the simulated or
hypothetical scenario will describe the proposed policy, remind respondents of their budgetary
limitations, and then ask their WTP to have the policy put in place (or willingness to accept a payment to
have the policy taken away). To do this, the respondent must have a clear an unbiased picture of what the
policy is and what it has achieved.
With willingness-to-pay questions, respondents are encouraged to respond with their preferences
according to actual budgetary constraints, whether as an individual or on behalf of a company or
organization. In contrast, the WTA approach does not bind the respondent to her current fiscal
constraints, as she is indicating what additional compensation she requires. This distinction may result in
higher values in response to WTA questions, as compared to similarly-developed WTP questions.
Although economic theory considers inconsistencies in these responses to be a sign of the method’s
deficiency, psychological theory supports the notion that individuals may consider loss of a good (WTA)
to be more harmful than having to give up some of their own resources (WTP) to attain it. Like most
contingent valuation methods, this study will use the WTP approach and thus it is possible that the values
42
resulting from such surveys may be considered relatively conservative estimates, as compared to
responses that could be gained from a WTA approach.
As mentioned previously, contingent valuation has been applied to environmental issues, but
most often with respect to specific projects or policies. But, a review of the literature did not result in a
previous study that applied CV to the emerging field of consensus processes applied to environmental and
public policy issues. What were found in the literature were suggestions on the steps necessary to best
implement a contingent valuation study (see Boyle, 2003, p. 116). These steps are:
(1) Identify the specific policy to be valued,
(2) Identify who has standing,
(3) Select a data collection mode,
(4) Choose a sample size,
(5) Design the information component of survey instrument,
(6) Design the contingent valuation question,
(7) Develop auxiliary questions for inclusio n in survey instrument,
(8) Pretest and implement survey,
(9) Develop and conduct statistical analysis of survey findings,
(10) Report value estimates.
Some important theoretical considerations relating to each of these steps are discussed next.
Identify the specific policy to be valued
As discussed earlier in this section, it is important to make clear to the person being asked to make a CV
that it is to be in regard to the benefit of the specified policy relative to a baseline situation that would
have existed without the policy. Thus, some fundamental information that must be included in the survey
instrument is a description in change in outcomes that have been widely attributed to the policy. For the
prospectus developed here, that would mean letting the surveyed know that their valuation is to be placed
on what the WFSE accomplished relative to what they think the Sacramento Area water situation would
be like if this policy had never existed
Identify who has standing
As also discussed earlier in this section, it was decided that the population to consider affected by the
WFSE lives in the geographic area of interest identified by the Water Forum. This population should
include residents, land owners, and business owners because they are likely to enjoy some benefits from
43
the WFSE. One approach would then be to develop contingent valuation surveys that would be sent to a
representative sample of each of these broad types of Water Forum stakeholders. Certainly , the downside
of doing this is the immense amounts of time, effort, and dollars this would take in designing and
administering such surveys to the required 800 plus entities (to ensure a random sample) chosen from
each of three categories of the affected population (residents, land owners, and business owners).
Instead, I propose that representatives from each of the 40 agencies listed in Table 1 (Section II) –
that embody the public, environmental, business, and water interests in the Forum’s designated area – be
identified as those who have standing and hence need to be administered a CV survey. These agencies
have all participated in the Water Forum negotiations, signed the Agreement, and are continuing to
participate in the Successor Effort. They have effectively served as the agents of the residential, land
owner, and business interests in the Water Forum’s geographic area that stand to benefit from it. In some
sense, the benefits these 40 agencies say they received are illustrative – though likely lower-end estimates
– of the benefits received by the entire region.
In pursuing this applied method of standing, a representative or representatives from each of the
40 agencies will need to be administered the CV questionnaire. The representative(s) should be the
one(s) who have a good understanding of what the WFSE has accomplished (preferable that they even
participated in it) and possess decision making power on deciding on how the agencies total yearly
operating budget is allocated. The reason for this being that the CV will ultimately ask them what
percentage of their agency’s budget they would be willing to pay to get the outcomes that have been
produced and they expect to be produced by the WFSE. If more than one person fits this qualification to
be interviewed, then it would be desirable to interview all who fit, and to interview them separately.
Select a data collection mode
A contingent valuation study requires the administration of a survey. The literature is clear that the order
of preference for how these surveys should be administered is in-person, telephone, standard mail, and
then e-mail (see Champ, 2003; and Fuguitt and Wilcox, 1999, Chapter 18). The reasons that an in-person
survey is preferred to telephone or standard mail surveys is its strengths in control over how the survey is
44
administered and its ability to use visual and written word aids. The one downside of potential
interviewee influences from an in-person survey can be eliminated through appropriate training. Thus I
would recommend that the CV survey be administered in-person if possible, if this is not possible due to
budget and/or time constraints, then a telephone based study would also be acceptable. Boyle (2003, p.
120) notes that the unit cost of personal interviews if surveyors are paid is usually between $50 and $100,
while a telephone survey falls in a lower cost range of $30 to $35 per survey.
Choose a sample size
Unlike most CV surveys where it impossible to survey all the stakeholders who benefit from a policy
change, if this survey identifies the 40 stakeholder agencies as those who have standing, it should be
possible to administer the needed questionnaire to all the appropriate representatives. Even if there are
four representatives from each agency that meet the requirements of knowledge of the WFSE and some
responsibility over the agency’s operating budget, this would entail no more than 160 surveys being
administered. Using personal interviews this would cost no more than between $8,000 and $16,000 to
complete. Telephone surveys would fall at the lower end of no more than $5,400 to $6,400 to complete.
A complete sampling of all 40 signature agencies would also eliminate the need to attach any statistical
confidence level to the validity of the final conclusion on economic efficiency.
Desig n the information component of survey instrument
Experts believe that a CV survey must lead with an infor mation component that explicitly states the
policy to be valued, the baseline to consider it relative to; and a fair, unbiased, and non-leading
description of what the policy is expected to or already has accomplished. A suggestion on how to do this
is included in the survey instrument suggested later, but this task is made easier here by the choice of
respondents who are familiar with the WFSE and what it has and has not accomplished for their
organization. There is also no need to offer any projections on what the WFSE has accomplished over its
first five years because it has already been completed. These short-term accomplishment also offer a nice
base for the respondent to make their own assessment of what the policy is likely to accomplish over the
longer term and include this projection in their CV assessment. In addition, a method of provision must
45
be offered in a hypothetical policy proposal. That is not necessary here because the assumption is that
WFSE will continue as it had in its first five years of implementation.
Before asking a survey respondent what their CV of a policy is, researchers have discovered that
they should be told the decision rule that will be used in the research to recommend if the policy should
be pursued or continue. In this case, a simple explanation that the policy will be recommended if the
dollar value of benefits to all participants exceeds the dollar value of all WFSE costs should suffice. It
also desirable that the CV interviewee be told the payment vehicle by which her hypothetical willingness
to pay amount will be drawn from. It seems entirely reasonable to state that vehicle in this prospectus as
a yearly expenditure from the agency’s operating budgeting, to be made this year and all years into the
foreseeable future. The use of s specific payment vehicle is suggested to induce a dose of realism into
what is supposed to be the simulation of a market activity where the respondent representing an agency
would necessarily need to stay within the budget constraint of their agency when coming up with a
hypothetical CV of the WFSE. This will be accomplished by first asking what the agency’s current
yearly expenditure level is and then asking what percentage do they believe that their agency would we
wiiling-to-pay to get the WFSE benefits their agency currently enjoys.
Design the contingent valuation question
More theoretical concerns and studies have revolved around the design of the specific question(s) asked
to determine a CV than any other component of the process. As reviewed in summary tables contained in
Boyle (2003, p.137) and Fuguitt and Wilcox (199, p. 220), there are pluses and min uses to the three
different forms of response formats that have evolved. The first, or an “open-ended format” allows
respondents to state without given pre-determined choices what they would be WTP for a policy. A
variant on this is a bidding process where respondent are asked if they are WTP a given amount chosen
by surveyor, and then asked repeatedly higher amounts (usually three) if they answer yes to previous
inquiries, and repeatedly lower amounts if they answer no to previous inquiries. The main problem with
iterative bidding is an anchoring effect where it has been found that final amount chosen is strongly
related to the first amount offered. The open-ended format takes care of this, but allows respondent to
46
exhibit strategic bias by offering unreasonably low protest bids that under represent their true benefits, or
unreasonably high supportive bids that are beyond their budget capability.
The second format that has evolved is termed “dichotomous choice” and allows respondents in a
survey to take or leave a CV amount that is given to them. For instance, for the WFSE study this could
mean asking an agency representative whether they believe there agency would spend 10% of their yearly
operating budget to achieve the policy’s benefits. Other representatives would be asked a different
percentage and elaborate binomial regression techniques are then required to develop an appropriate WTP
schedule for all who have standing. The upside of this second method is that eliminates anchoring and
some tendencies to exhibit strategic bias. The down side of these dichotomous choice questions for the
policy under consideration is that there are not enough respondents to use enough possible budget
percentages to apply the needed statistical technique.
What remains, and what is chosen for the CV question proposed later, is a variant of the
“payment card” method that lists a range of potential payments and asks the respondent to circle only one
of them. A preferred deviation on this is the “multiple -bounded response payment card” where potential
payments (from low to high) are listed in the first column, and respondents are given “yes” and “no”
columns next to it and asked to circle for each potential payment whether they would support it or not
(see Boyle, 2003, p. 136). In some sense this combines both dichotomous choices with non-anchored
payments and draws upon the desirable properties of each. An issue related to this particular use of CV
assessment is whether a value of zero should begin the list of potentia l payments. The consensus in the
literature is that it should be included. Though to separate people who truly hold a zero value of the
benefits derived from the policy, from those that are just disgruntled by a certain aspect of the policy and
only offer it as a protest, the recommendation is to ask a probing question later of whether they are
dissatisfied with the policy in any way. Previous CV surveys have rarely allowed the respondent to offer
a negative valuation of the benefits they derive from a policy and we follow that convention here also.
The surveyed should also be asked if their agency participated in the Water Forum consensus
process that begin in 1993 and culminated with the signing of an Agreement in 2000. If they answer yes,
47
they should be presented with another mult iple-bounded response payment card that allows them a
separate assessment of the CV of the yearly benefits their agency derived during this period.
Develop auxiliary questions for inclusion in survey instrument
Researchers also recommend that a good CV survey contain auxiliary questions that help to paint a better
picture of respondents through a list of their characteristics. For individual valuations, Fuguitt and
Wilcox (1999, p. 229) suggest that these characteristics include things like age, household size, household
income, gender, race, education, occupation, political party affiliation, environmental attitude, scenario
acceptance, recreational participation, prior site visits, likely future site visits, etc. The purpose of this
data is for the calc ulation of frequency distributions or a regression analysis of what characteristics are
influential in determining an individual’s reported WTP measure. For this study, that survey
representatives of signature agencies to determine their agency’s value of the WFSE, the proposed
auxiliary questions will primarily reflect characteristics of the agency, but also include some personal
characteristics. Auxiliary data to be gathered from respondents will include: agency’s yearly budget,
agency’s yearly employment numbers, agency’s percentage budget expenditure on governmental affairs
activities, interest of agency (public, environmental, business, or water), years agency involved with
WFSE, political leaning of agency (none, conservative, liberal), number of years agency served WFSE
geographic area, estimate of number of clients, customers, or constituents the agency serves in WFSE
geographic area, whether they believe their agency is at all disgruntled with any aspect of the WFSE; and
some characteristics of the respondent – relationship to agency (senior level management, middle level
management, employee), years with agency, gender, political leaning (none, conservative, liberal) , live in
WFSE geographic area, whether a personal user of American River, whether they are personally
disgruntled with WFSE.
Pretest and implement survey
Champ (2003, p. 85) remarks that “[T]he final version of a survey often bears little resemblance to the
first draft.” This occurs because of the desirability of having peers and potential survey respondents look
over the initial draft and offer suggestions on how to improve it. In following this tradition, I suggest that
48
the CV survey proposed below, before being given to agency representatives, be subject to evaluation
first by a focus group of five to 10 individuals, and then administered to approximately the same number,
but different individuals. This could be accomplished in conjunction with one of the bi-monthly meetings
of the Successor Effort.
Once the survey has passed muster in these pretests, it is ready to be administered. The desired
method of administration is through one-on-one interviews with trained surveyors who preferably have a
working knowledge of the WFSE. For time and budgetary reasons, it would seem ideal for trained Water
Forum staff to administer as many of these surveys as possible at the bi-monthly meetings of the
Successor Effort. Of course, before this can be done, Water Forum staff will need to contact the 40
signature agencies to determine who is qua lified to the respond to the survey. If these qualified
individuals are unable to attend a Successor Effort meeting, interviewers would need to meet them in their
office, or as a last resort conduct a telephone interview. In the interview process it will need to be
stressed that revealed information will never be attributed publicly to a specific organization or specific
respondent. It is also likely that permission to perform human subjects’ research will need to be garnered
from CSUS before any pre-testing of the survey can take place.
Develop and conduct statistical analysis of survey findings
The administrator of the CV survey proposed here will need to record all respondent information on paper
forms that will then be transferred to a spreadsheet where each row represents a respondent and each
column a response to a single survey question. To maintain confidentiality, column one of this
spreadsheet will only contain a number identifier. Only the principal investigator will hold a separate list
that allows correspondence between the number identifier and a particular respondent.
The data on this spreadsheet can then be used to calculate the desired aggregate contingent value
of the benefits derived from the 40 signature agencies through the WFSE.
One issue that will arise is if
there are multiple qualified respondents for a specific agency. Since only one response is needed for each
of the agencies, multiple responses can be handled in a variety of ways. One is to use only the average
response for all agencies, the other is to only use the lowest response, and the other is to use the highest
49
response. This is another form of sensitivity analysis that will allow a range of possible values for the
aggregate CV dollar value of the WFSE.
In addition, I suggest – as does Fuguitt and Wilcox (1999, pp. 222-31) – that various statistical
analyses be performed on the collected CV data. The first would be frequency distribution of the
willingness to pay yearly dollar amounts (and percentages of operating budgets) for each of the 40
signature agencies. The second would be a regression analysis of a respondent’s total yearly dollar value
(and percentages of operating budgets) of their agency’s willingness to pay for the benefits of WFSE
against all or a portion of the auxiliary characteristics collected in the survey. This would need to be done
with due care, correcting for likely multicolinearity and heteroskedasticity, but when completed would
offer interesting insights on how the characteristics of each agency and the respondent for them influence
their stated WTP for the benefits of the Water Forum and its Successor Effort.
Report value estimate
The final step in the contingent valuation process is to come up with the aggregated and discounted value
of the benefits that the 40 agencies (and indirectly the residents, the land owners, and the business owners
in Forum’s geographic area) receive from the WFSE. This is a multi-step process that first involves
multiplying the chosen reported values (average , low, or high) of percentage of agency’s budget willing
to pay for the benefits of WFSE times the current reported yearly operating budget of the agency. When
these 40 products are added together, the result is the total aggregate benefits in the current year. The
assumption will be made these benefits also accrued in the each of the previous four years that the
Agreement has been in place, and will accumulate in each of the foreseeable years into the future. Now
discounting must come into play. With a chosen discount rate (recall that different ones will be used for
sensitivity analysis), the discounted stream of the previous four years of aggregate values will be added to
the value of an annuity of benefits equal to 2005 values occurring forever into the future. This annuity
value is calculated as the 2005 value divided by the chosen discount rate.
This calculated value represents the aggregated and discounted value of the CV assigned by the
signature agencies to the benefits received from the WFSE. Though recall that this value is very likely to
50
be a lower bound estimate for two reasons. The first is that CVs derived from the 40 included agencies
do not completely represent the entire group of residential, land owner, and business owner interest in the
Forum’s designated geographic area. Second, benefits from the WFSE are likely to spillover the Forum’s
designated geographic area and not be fully captured by this definition of standing. Thus, if these
calculated benefits are greater than the costs that I will describe how to calculate in the next section, then
the reader can be fairly certain the benefits of the policy are greater than its costs. If the calculated
benefits are less than the costs, then the economic efficiency of the policy cannot be fully determined until
another study tries to capture the CV of benefits missed through the procedures detailed area. A problem
in pursuing the additional capture of these relevant contingent valuations is that it will be very difficult to
avoid some double counting of benefits to residents, land owners, and business when they are given a CV
survey because some of their benefits have already been captured by the CV calculated from the 40
stakeholder groups. Thus, this expanded CV calculation would need to be considered an upper bound
estimate of the benefit value of the WFSE. To fully avoid double counting, the CVs derived from the 40
agents would need to be eliminated.
What Is Next
Section VI of this report offers the formal prospectus of my suggestions on how to go about calculating
the total cost of the WFSE.
51
VI. A Prospectus on Assessing the Total Cost of the Water Forum
An important aspect to deciding the economic efficiency of a public policy is a determination of the true
and total cost of pursuing the policy. Economists break this cost into direct and indirect components.
The direct component includes out-of-pocket dollars spent to put the policy into place. For instance, $13
to $14 million dollars is widely cited as what it directly cost t between 1993 and 2000 develop the Water
Forum Agreement. If correct, this is a good place to start developing the true and total cost of the WFSE
policy. The prospectus described next is designed to test the accuracy of this figure. My expectation is
that it is inaccurate for use in a BCA for three reasons. First, it is very likely accounts for only the direct
costs incurred in each year, with no account for inflation or discounting. Second, it very likely leaves out
the indirect costs incurred over this seven year development process; and third, it leaves out the direct and
indirect costs of the Successor Effort.
The CBA proposed here requires that both the direct and indirect costs of the WFSE be broken
down by the years that they were incurred. As discussed earlier in relation to discounting, the reason for
this breakdown is that a cost incurred in the past (future) can be considered worth more (less) in current
dollars than a cost incurred during the present. Thus, the purpose of this section is to offer some
background on how to think about indirect costs in the context of the WFSE policy, describe a method on
how to go about collecting information on the yearly (from 1993 to 2005) direct and indirect costs of the
WFSE, and offer an example of how to use this information to come up with the desired discounted total
cost of the Water Forum and its Successor Effort.
Indirect Costs
Indirect costs, or what economists refer to as “opportunity costs,” are defined as the value of time
involved in participating in or being involved in some activity, event, or task. They are indirect because
there is no direct observable expenditure associated with them. The economic statement that “there is no
such thing as a free lunch” captures this concept well. Even if someone offers to take you to lunch in
their own automobile and pick up the tab (covering all of the lunch’s direct costs), there is still an indirect
52
or opportunity cost of you going. That is, you are giving up the next best thing that you could have been
doing during that hour you spent at lunch. Thinking in this manner, it is logical to assign an economic
value to this indirect cost in the form of what the person could have earned if they instead worked during
that hour. Though note that such a simplification could be an under representation of the true opportunity
cost of this hour to an individual if they are giving up their leisure time and value it more than the wage
that could be earned over that period. Or alternatively, it could be an over representation if they get some
personal satisfaction from the activity that they do not get from an hour of work. In the case of
participating in the Water Forum, involvement in meetings and negotiations took participants away from
doing other things; such as, work, leisure pursuits, spending time with family, volunteering, etc. These
alternatives to participation have value and the notion of opportunity costs speak to that value when
considering the participation in a given activity. Like most BCAs, this one will assume that the
opportunity cost to society of a person’s hour of participation in the WFSE is best valued at an hourly
wage rate that the average participant could have earned in the labor market. This also makes sense as a
measure of social opportunity cost because society is giving up what the person could have alternatively
produced, and society has evaluated that production in some sense to be worth the wage paid to produce
it. Sensitivity analysis will also be applied to test how responsive the study’s final finding is to the
average hourly wage rate used.
As just explained, indirect costs are a vital consideration in a BCA for it is the costs of time and
the potential use of that time spent on other tasks that is often unaccounted for in the usual accounting of
the cost of a public policy. Time is a fixed variable and when it is spent on any endeavor it cannot be
reclaimed. Once an individual’s or group’s time has been allotted to anything, that individual or group
has, essentially, made the decision to display a preference towards the action or activity. Thus, costs to an
individual or group can be determined based on how an individual or group values time spent in relation
to what they could otherwise be using the resource of time for instead. A concept such as this is vital for
the assessment of a collaborative decision making process such as the Sacramento Water Forum, and a
thorough analysis must consider the value of participants time spent within negotiations.
53
Common sense dictates that the indirect opportunity costs for the WFSE in a given year can be
gauged by multiplying the person hours spent on the processes multiplied by the chosen average wage for
participants. An earlier investigation indicated that in 1996 there were approximately 18-20 Water Forum
meetings, all taking place during the evening. The usual meeting time was in the vicinity of three hours.
Participants often had preparation tasks to do outside of these meetings as well, including reporting back
on the status of the consensus process to the Boards of their organizations, researching how proposed
compromises would impact their organization, and correspondence with other Water Forum participants.
Some firsthand accounts estimate a total time commitment of approximately 30 hours per month towards
Water Forum commit ments in 1996, which includes all outside work and meetings. My suggestions on
how to gather all of the necessary detailed information to accurately calculate the direct and indirect costs
of the WFSE are offered next.
Data Gathering
In my mind, the best way to handle the necessary data gathering tasks is to divide the policy into its
consensus-process period (1993-1999) and its successor-effort period (2000-2004). Within these two
periods, direct and indirect cost data need to be gathered for each year. Direct cost information should be
the easiest to gather and require the appropriate Water Forum staff person searching past records for the
total dollars expended in a given year on Water Forum or Successor Effort activities. Sarah Foley, the
current Water Forum’s Program Manager has already offered some of this information so she would be a
good contact to start with. These direct dollar expenditures will be measured in the given year’s dollars
and will need to be placed in the desired 2005 dollars through the use of the Sacramento Metropolitan
Area Consumer Price Index. Though this corrects for inflation, it does not account for the fact these costs
occurred in different years and are not directly comparable based upon the concept of the time value of
money (discounting). So in addition, direct costs from different years measured in 2005 dollars will also
be subject to adjustment based upon the various discounted rates suggested earlier for sensitivity analysis.
Table 3 offers a template of what should be given to a Water Forum staff person to complete in regard to
expenditure in the 12 years (1993 through 1994) for which the data is needed.
54
Year
Operating Budget for Water Forum in Given Year
1993
1994
….
2004
Table 3 – Table Used to Calculate Direct Cost Information for a Given Year
The calculation of indirect costs will not be as simple and first involve asking a Water Forum
staff person to search their records for the total number of WFSE meetings held in a given year, and then
noting for each meeting the number of non-Water Forum staff in attendance and how long the meeting
lasted. (The indirect cost of Water Forum staff attending meetings does not to be neasured because their
costs will directly be accounted for through Water Forum expenditures in a given year.) Meeting hours
spent on the WFSE in a given year is the sum of person hours (hours of meeting multiplied by number in
attendance) for all meetings held in a year. To account for the out-of-meeting time that participants
devoted to the WFSE, I would suggest randomly choosing three participants from each year and calling or
e-mailing them to ask an estimate of what was the average amount of time that they spent on WFSE
related activities outside of formal meetings in a given month in that year. An average of the outside
meeting hours stated by the three can then be taken and assumed to be close to what all participants spent
in outside activities related to further the Water Forum policy effort. These hours would then be subject
to the same calculations described earlier to turn them into dollar measurable indirect costs.
Twelve copies of Table 4 should be produced – one for each year between 1993 and 2004 – and
given to a Water Forum staff person such that they can fill in the first column with the dates of all the
meetings and the requested information for each meeting in columns two and three. Staff would also
need to list the names and current contact information of three participants in that year’s meetings that
attended regularly and are available to talk to now about estimating the amount of out-of-meeting time
55
spent on WFSE. How the information gathered in Tables 3 and 4 is used to calculate the desired
discounted value of total time costs is the last topic covered in this section.
Year: _____________
Meeting Date
Names and Contact Current Info of Three Randomly Chosen
Participants Who Attended Most Meetings in Year:
(1).________________________________________
(2).________________________________________
(3).________________________________________
Length in Hours of Meeting
Number of Non-Water Forum
Staff Participating
Table 4 – Table Used to Calculate Indirect Cost Information for a Given Year
Calculations
One choice that needs to be done before calculations on the total costs of the WFSE could proceed is the
hourly wage rate used in the BCA to represent the typical opportunity cost to society of a participant
devoting an hour to WFSE activities. Recall, this wage rate should be in 2005 dollars. I suggest that
hourly wage rates of $15, $25, and $40 be used. Based upon a 2000 hour work year, this would place the
yearly salary of participants in this consensus process in 2005 dollars at between $30,000 and $80,000 a
year. For the desired sensitivity analysis, this should do an adequate job of covering feasible ranges of
hourly indirect opportunity costs that participants faced through participation.
Let me conclude with some purely hypothetical numbers that serve to illustrate how final cost
calculations should be done once actual WFSE numbers are gathered. Table 5 assumes that the
investigation described above yields that the direct cost of the Water Forum consensus effort was
$1,000,000 in 2005 dollars, and the indirect cost measured in 2005 dollars was $3,000,000. Using the
concept of discounting – at a chosen rate of 1.5% for this example – the hypothetical total cost of
$4,000,000 in 1993 should be valued at about $4.8 million due to the fact that the original $4 million
could have been put in the bank and earned 1.5% compounded interest payment each year. The values in
56
the last column are illustrative of the chosen discount rate and would vary depending on the discount rate
chosen. Table 5 contains similar calculations by year through 2004.
Since direct and indirect costs are not available for the year 2005 and beyond, the reasonable
assumption made in Table 5 is that they will be the same yearly amounts as in 2004. Thus, if the WFSE
policy continues indefinitely, the total costs each year will be about $5.3 million in 2005 dollars. The
present discounted value of this yearly obligation into the foreseeable future can be calculated by what
you would need to be put into a bank account earning the prescribed rate of return (1.5%) each year to
yield $5.3 million in interest each year. This comes out to about $347 million (derived by $5,300,000 /
0.015). Finally the discounted total cost of the WFSE in 2005 dollars up till 2004, or about $110 million,
is found by adding the appropriate entries in the last column. While the much larger projected cost of the
WFSE over its never ending lifetime, or about $456 million, includes the additional $347 million in
expected future costs. Realize that these figures are all contingent on using a 1.5% discount rate.
Sensitivity analysis using different discount rates would yield different costs. For instance, using these
hypothetical numbers and a discount rate of (0.5%) yields a discounted total cost of WFSE till 2004 of
$103 million, and discounted total cost of WFSE till beyond 2004 of about $1.1 billion (because at a
lower discount rate, more has to be put in bank to earn needed interest payment to cover the fixed yearly
cost).
What Is Next?
Section VII of this report is very similar to this section in its approach, but instead offers the formal
prospectus of my suggestions on how to go about calculating the total benefits of the WFSE.
57
Year
Direct Cost Measured
in 2005 Dollars
Indirect Direct Cost
Measured in 2005
Dollars
Discounted Value
(using 1.5%) of
Direct and Indirect
Costs
1993
$1,000,000
$3,000,000
$4,782,473
1994
$1,500,000
$4,500,000
$7,067,694
1995
$1,700,000
$5,100,000
$7,891,678
1996
$2,500,000
$7,500,000
$11,433,900
1997
$3,000,000
$9,000,000
$13,517,911
1998
$4,500,000
$13,500,000
$19,977,208
1999
$3,600,000
$10,800,000
$15,745,583
2000
$1,200,000
$3,600,000
$5,170,963
2001
$1,400,000
$4,200,000
$5,943,636
2002
$1,600,000
$4,800,000
$6,692,342
2003
$1,500,000
$4,500,000
$6,181,350
2004
$1,300,000
$3,900,000
$5,278,000
2005 and beyond
$86,666,667
$260,000,000
$346,666,667
Discounted Total Cost
of WFSE to 2004
Discounted Total Cost
of WFSE to 2004 and
Beyond
$109,682,737
$456,349,404
Table 5 – Hypothetical Values Demonstrating How to Calculate Discounted Total Cost of WFSE in
2005 Values
58
VII. A Prospectus on Assessing the Total Benefits of the Water Forum
Along with an accurate accounting of the discounted total cost of the Water Forum and its Successor
Effort, the proposed benefit/cost assessment also requires an accurate determination of the discounted
value of benefits that it has bestowed upon those who have standing in the study – here defined as
residents, land owners, and business owners in the Forum’s designated geographic area. The theory of
BCA indicates that this determination of the value of benefits could be accomplished in a few ways. The
first way – which has been dismissed due to a general lack of stakeholders’ willingness to offer the
necessary information – is valuing in dollars the time and litigation expenses saved by resolving the
Region’s water issues in the “Water Forum Way.” The second way – which for now has been put off, but
may have to be revisited if the proposed method does not yield benefits greater than costs – is three
separate contingent value surveys of the Region’s residents, land owners, and business owners that could
be used to determine the aggregated, discounted value that each of these groups place on the benefits of
the Forum. The problems with doing these three different CV surveys is the difficulty in educating the
respondents to the Forum’s accomplishments in way that does not bias their valuation of it and the large
expense of having to survey over 2400 (800 from each category) randomly drawn residents, land owners,
and business owners. The way chosen here is to instead survey representatives of all 40 signature
agencies of the Water Forum Agreement. The premise behind the acceptability of doing this is that these
agencies are the primary agents for water policy solutions that benefit the Region’s residents, land
owners, and business owners. The value of the benefits that these 40 agencies receive from the WFSE is
ultimately passed onto these groups; though it must be noted that this third approach will yield a lowerend estimate of the total social benefits derived from this policy. But if in following this simpler and
much less costly method of determining the contingent valuation of the WFSE, we find that the
discounted dollar value of benefits are greater than costs, then we can be robustly certain that this policy
can be appropriately deemed economically efficient.
59
The contingent valuation of the benefits derived from the WFSE is made easier because the
policy Agreement reached from it has been in place for more than four years and by design, all survey
respondents should be reasonably familiar with its achievements. Therefore, the survey instrument
proposed below will just need to refresh the respondents’ memories of some facts relating to the
incremental environmental changes and benefits that have resulted as a result of the Water Forum’s
collaborative process. It will be left to the respondent’s own experiences and thought process to project
the expected future benefits their organization is expected to gain from the WFSE.
Survey respondents will be informed that the Water Forum collaborative process is funded
primarily by public money (about half from Sacramento City and half from Sacramento County) and a
small percentage of private money. Respondents will be told that their WTP for the benefits their
organization has and will derive from the WFSE must be determined within the context of their agency
annual operating budget constraint and involve foregoing other expenditures that their agency is currently
pursuing. This will be accomplished by asking for a WTP in terms of the percentage of their agency’s
annual budget that they would hypothetically be willing to pay to continue the existence of the WFSE this
year and into the foreseeable future. They must also be reminded that this is not intended to be a one-time
payment, but a continuous percentage of their agency’s operating budget that would be paid each year.
The percentage of annual operating budget, chosen as the CV response that will be sought in the survey,
was chosen in part because of the experience of contacting some Water Forum members and asking them
instead to state a dollar value that the benefits of WFSE is to their agency. We found that all these
contacts were hesitant to respond. Instead, interviewees were quick to give the widely cited figure of $13
or $14 million that the Forum’s consensus process has been publicly cited to cost from 1993 to 1999.
I next offer a draft of the survey instrument that I propose be given to representatives from the
Water Forum’s 40 signature agencies. This is only intended to be a first draft, and as discussed earlier,
should be subject to comment and revision as a result of Water Forum staff looking it over, a focus group
examination conducted at a Successor Effort meeting, and one-on-one pre-testing with potential
interviewees.
60
Draft of CV Survey Instrument to be Administered to Representatives of Signature Agencies
Here, I place material to be included in the survey in italics. Non-italicized writing is my
commentary and suggestions for how to implement the survey.
Welcome. You are here today to participate in an interactive survey that is meant to assess the
value that the Water Forum agency that you represent [stage agency’s name] places on the benefits that
it has derived from the Forum’s Agreement and its Successor Effort. You have been chosen for this
survey because of your previous and expected continued involvement in the Water Forum process. I
realize that this very likely means that you are knowledgeable in the history of how and why the Forum
began in 1993, the Forum’s geographic area of coverage and participant, the six-year consensus process
that yielded the signing of an Agreement in 1999, the components of this agreement, the Forum’s active
Successor Effort that begin in 1993 and continues till today, and the successes and challenges that the
Agreement and Successor Effort has produced, and is likely to produce in the future. I have little doubt
that in some of these areas you possess more knowledge than what I am going to offer you today. You
should call upon this knowledge and use it to help direct your answers to the questions that I will later
ask. But before I begin to ask you these questions, the accuracy of responses across survey participants
requires that all interviewees be exposed to a similar background of facts on the Water Forum and its
Successor Effort, and the Sacramento Area water outcomes that have occurred in relation to it. I will next
offer this background through a short five-minute PowerPoint presentation. I encourage you to ask
clarifying questions at any time during the presentation.
I suggest that the PowerPoint presentation consist of bulleted points drawn from this report’s
Section I (The Sacramento Area Water Forum and The Water Forum’s Successor Effort), Section II
(Geographic Area of Interest, Participants in the Water Forum, and Stages of the Water Forum), Section
III (Water Management, Water Infrastructure, Groundwater, Social and Political Capital Produced
Among Forum Participants), Section IV (Fairbairn Water Treatment and Diversion Facility, Sacramento
County Water Agency and the Nature Conservancy; and Freeport Diversion Facility, East Bay MUD, and
Sacramento County Water Agency), and the highlights of WFSE achievements in Appendix I (Draft
61
Water Forum Five-Year Evaluation) and Appendix II (Summary of Key Findings – The State of the
Lower American River). This is meant to be an informal presentation where the interviewer reads and
talks off the bulleted points and encourages the surveyed to ask any clarifying questions. It is important
that the interviewer offer none of her own opinions or value judgments, even if queried to do so.
If you have no further clarifying questions on what was just presented to you, I would now like to
move into the stage of this meeting where I ask you some questions. Please think carefully about the
answers you give to these questions and be sure to again ask for clarification on a question that you do
not understand. I want to also impress upon you that your answers will remain fully confidential and
never be attributed to you directly or the agency that you are here representing. You have been given an
identification number that will be attached to your responses for their storage. Only the principal
researcher will maintain and have access to a list that matches this number to you and your agency.
The primary purpose of this study is to get an idea of how you think your agency [give agency’s
name] values the benefits that the Water Forum and its Successor Effort has produced. At the conclusion
of interviewing representatives from the 40 signature agencies to the Water Forum Agreement, we plan
on tallying the value of all these benefits and seeing if they are greater than the costs to produce this
policy. An economist would consider the policy efficient if these benefits exceed the costs.
Some suggestions on what the benefits of the WFSE may potentially be have already been given
to. Feel free to accept all or a portion of these as benefits to your particular agency, reject some or all of
them, and in your own mind add benefits that were not offered in the presentation. But for the purposes
of this study, it is important to consider the benefits to your agency as being only incremental to what the
atmosphere for making water policy in the Sacramento Area would likely have been if the WFSE had
never existed and the situation that existed pre-Forum was projected to the present. If there are no
clarifying questions from you on these instructions, I will begin with my questions.
(1) To the best of your knowledge, what would you estimate the annual operating budget in
dollars of your agency for the 2005 calendar year? (If your agency instead uses a fiscal year,
it is ok to state that estimate for 2004-05, or for the 2004 calendar year if only that is known.)
$__________________.
62
(2) Now I would like your opinion on the value of the benefits that the WFSE has bestowed upon
your agency [give agency name] for the past year, and your expectation on what benefits will
exist into the future for your agency from the WFSE. I ask that you to value this in terms of
the percentage of your agency’s annual operating budget that you would judge your agency
would be willing-to-pay to achieve these current and expected future benefits of the WFSE.
When answering, please keep this in mind:
•
•
•
I am asking for a percentage that you believe your agency would be willing-to-pay to
achieve these benefits, not what they do or do not currently pay,
the percentage you name will be paid this year by your agency and all foreseeable
years into the future that the WFSE is in existence,
please realize that any percentage of your agency’s operating budget devoted to
paying for the benefits of the WFSE cannot be spent on other items.
I ask that you respond to this question by looking down this list of possible percentages and
circling “yes” or “no” for each percentage give.
Percentage
0% or none
1%
3%
5%
7%
10%
20%
30%
50%
70%
905
Response
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Response
No
No
No
No
No
No
No
No
No
No
No
(3) Now I would like to ask a similar question designed to get your opinion on the value of the
benefits that the Water Forum consensus process produced for your agency [give agency
name] before the Water Forum Agreement was signed in 1999. If you recall, from 1993 to
1999 participants in the Forum met monthly and discussed water issues, but no formal
Agreement or Successor Effort was in place. Take a typical year during this period and
please evaluate in the same manner as above the percentage of your agency’s operating
budget for that year (and all years 1993-1996) that you believe they would have been willingto-pay for the benefits the consensus effort was generating for your agency [give agency
name].
I ask that you respond to this question by looking down this list of possible percentages and
circling “yes” or “no” for each percentage give.
Percentage
0% or none
1%
3%
5%
7%
Response
Yes
Yes
Yes
Yes
Yes
63
Response
No
No
No
No
No
10%
20%
30%
50%
70%
905
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
In conclusion I request that you answer some auxiliary questions that will assist in our assessment of the
value that your agency places on the benefits produced by the Water Forum and its Successor Effort.
Again, please be assured that your answers to these questions will remain confidential.
(4) What is your best estimation of the number of full-time-equivalent workers that your agency
[name the agency] currently employees?____________________________________
(5) What is your best estimation of the percentage of your agency’s [name the agency] current
year’s operating budget devoted to governmental affairs? __________________________
(6) What is the primary interest of your agency [name the agency]: public, environmental,
business, or water? _____________________________
(7) How many years has your agency [name the agency] been involved with the Water Forum
and its Successor Effort? _________________________________________________
(8) In your opinion, what is the political leaning of your agency [name the agency]: none,
Liberal, or Conservative? ______________________________________________
(9) Does you agency [name the agency} serve the entire geographic area of interest to the Water
Forum, or a portion of it? _________________________________ If a portion, can you
estimate in a fraction the portion it does serve? ______________________________
(10) Please offer an estimate of the number of customers, residents, or constituents that your
agency [name the agency] serves in the Forum’s geographic area? ________________
(11) Would you characterize your agency [name agency] as at all being disgruntled with any
aspect of the Water Forum or its Successor Effort: Yes or No?
______________________________________________
(12) Would you classify your position in your agency [name the agency] as senior level
management, middle level management, or an employee? ___________________________
(13) How many years have you worked for your agency [name the agency]? _____________
(14) What is your personal political leaning: Liberal, Conservative, None? _______________
(15) Do you live in the Water Forum’s designated geographic area: Yes or No?
____________________
(16) Do you use the Lower American River for Recreation Purposes: Yes or No? ____________
64
(17) Are you at all disgruntled with any aspect of the Water Forum or its Successor Effort: Yes
or No? _____________
(18) Is respondent male or female? _______________________________________
What is Next
This report concludes in the next section with some final suggestions on how to proceed if the Consensus
Project decides that it likes the previous proposal for a cost/benefit assessment of the Water Forum and its
Successor Effort, and would like to see it done.
65
VIII. Where to Consider Going from Here
This report has served its designated purpose if it offers a background on the Water Forum and its
Successor Effort, the successes and challenges this public consensus effort has generated, the reasons why
it would be desirable to pursue a benefit/cost assessment of this policy, some basics of what a quality
benefit/cost assessment entails, and prospectus on how to conduct the cost and benefit elements of this
assessment. If after reading this report the appropriate Consensus Project and Water Forum staff decides
they wish to pursue the undertaking of this BCA, I offer a few suggestions in this final section on how to
consider going about doing this.
First, I would recommend that copies of this report are given to all relevant Water Forum and
Consensus Project staff who are interested in the pursuit of a BCA of the Water Forum and its Successor
Effort. They should read it and get back to me with any comments they may have on factual errors,
omissions, or BCA techniques I have suggested. I will then incorporate these comments into a final draft
of this report.
The final cost to complete the prescribed BCA will be dependent on how much Water Forum and
Consensus staff can be used to gather the necessary cost information described in Section VI and
complete the CV of benefit surveys described in Section VII. If this can be done “in house,” the
remaining cost should only incorporate the time needed by myself (or another analyst) to gather the
collected data, perform the calculations described here, and incorporate the results into a revised version
of this report. (At this point, 60 seems like a reasonable estimate of what it would take to do this this.) If
the surveys need to be conducted by paid one-on-one interviewers, as stated earlier, the estimated cost of
completing in this manner would be no more than between $8,000 and $16,000. If the less desirable
telephone surveys are used, the estimated cost would fall at the lower end of no more than $5,400 to
$6,400 to complete. So at this point, I would estimate that dollar cost to complete this CBA in the manner
described her could run between $3,000 and $20,000 to complete.
66
I would be pleased to discuss this in further detail after the appropriate people have looked over
this report. Thanks for the opportunity of putting this together.
67
References
Ackerman, Frank and Lisa Heinzerling (2004). Priceless, New York, NY: The New Press.
Boyle, Kevin (2003). “Contingent Valuation in Practice,” Chapter 5 in A Primer on
Nonmarket Valuation,, edited by Patricia champ, Kevin Boyle, and Thomas Brown; London:
Kluwer Academic Publishers.
Champ, Patricia (2003). “Collecting Survey Data for Nonmarket Valuation,” Chapter 3 in A Primer on
Nonmarket Valuation, edited by Patricia champ, Kevin Boyle, and Thomas Brown; London:
Kluwer Academic Publishers.
Colby, Bonnie G. (2003). “Economic Characteristics of Successful Outcomes,” in The Promise and
Performance of Environmental Conflict Resolution, Washington, D.C.: Resources for the future,
pp. 301-325.
Connick, Sarah and Judith E. Innes (2003). “Outcomes of Collaborative Water Policy Making:
Applying Complexity Thinking to Evaluation,” Journal of Environmental Planning and
Management 46(2), pp. 177-197.
Fisher, Roger, William Ury, and Bruce Patton (1991). Getting to Yes: Negotiating Agreement
Without Giving In, Second Edition, Boston, MA: Penguin Books.
Fuguitt, Diana and Shanton J. Wilcox (1999). Cost-Benefit Analysis for Public Sector Decision
Makers, Westport, CT: Quorum Books.
Gibson, Steve (2005). “Looking Out for Trout,” The Sacramento Bee, pp. B1-B2.
Grootaert, C., D. Narayan, V. Jones, and M. Woolcock (2003). Integrated Questionnaire for the
Measurement of Social Capital, Social Capital Thematic Group, New York, NY: The World
Bank.
Innes, Judith E. and David E. Booher (1999). “Consensus Building and Complex Adaptive Systems:
A Framework for Evaluating Collaborative Planning,” Journal of the American Planning
Association 65(4), pp. 412-423.
Water Education Foundation (2002). The Water Forum Agreement: A Model for Collaborative
Problem Solving, Sacramento, CA: www.watereducation.org.
Water Forum (2005). Lower American River: State of the River Report, Sacramento, CA:
www.waterforum.org .
Water Forum (2004). Water Forum Report January 2002 through June 2004, Sacramento, CA:
www.waterforum.org .
Water Forum (2001). Water Forum 2001 Annual Report, Sacramento, CA.: www.waterforum.org .
Water Forum (2000). Introduction and Summary Water Forum Agreement, Sacramento, CA:
www.waterforum.org .
68
Wiesenfeld, Ramsey “Buzz” and Mary Orton (2004). A Retrospective View of a Collaborative,
mimeo, Unpublished Capstone Project for CR692A, Antioch University McGregor.
Whittington, D. & MacRae Jr., D. (1986). “The Issue of Standing in Cost-Benefit Analysis,” Journal of
Policy Analysis and Management, 5, 665-682.
Young, Robert A. (2005). Determining the Economic Value of Water: Concepts and Methods,
Washington, D.C.: Resources for the Future.
69
Appendix I
Draft Water Forum Five-Year Evaluation
Part One - Progress on Seven Elements April 2000 – February 2005
Element 1. Increased Surface Water Diversions
Increased diversions will be needed in the region even with active conservation programs and the
recommended sustainable use of groundwater that are also part of the Water Forum Agreement. The
Agreement outlines agreed-to diversions for each supplier and the facilities needed to divert, treat and
distribute this water.
City of Folsom
•
•
•
•
Completed expansion of water treatment plant to 25 mgd
Completed expansion of diversion facility at Folsom Reservoir
Completed relocation and enlargement of raw water conveyance pipeline
Approval of EIS/EIR for PL 101-514 (Fazio water) delivery of CVP contract water
City of Roseville
•
•
•
•
•
Completed expansion of water treatment to 60 mgd
Completed major pipeline infrastructure
Completed raw water conveyance pipeline
Completed expansion of diversion facility at Folsom Reservoir
Completed reclaimed water treatment plant construction
San Juan Water District Consortium
•
•
•
•
Completed raw water conveyance pipeline
Completed expansion of diversion facility at Folsom Reservoir
Approval of EIS/EIR for PL 101-514 (Fazio water) delivery of CVP contract water
Approval of change of Place of Use with SWRCB for using PCWA water
Arden Cordova Water Service
•
Entered into interim replacement water supply agreement with SMUD
Sacramento Suburban Water District
•
•
•
Completed PSA for Arcade Service Area
Approval of change of Place of Use with SWRCB for using PCWA water
Entered into surface water contract with City of Sacramento (Arcade service area)
70
SMUD
•
•
•
Completed phase I of the Cosumnes Power Plant
Completed transfer of 30,000 AF of CVP Contract water to the Sacramento County water Agency
Entered into interim replacement water supply agreement with ACWS
Placer County Water Agency
•
•
•
American River Pump Station at the Auburn canyon under construction
Completed SSWD water contract
Approval of change of Place of Use with SWRCB for use of PCWA water within Sacramento
County
City of Sacramento
•
•
•
•
•
•
•
•
Obtained approval of diversion point for American River water at the Sacramento River diversion
facility
Entered into water wheeling agreement with SCWA
Entered into wholesale surface water contract with Cal American Water Company (CUCC)
Entered into surface water contract with SSWD (Arcade service area)
Sacramento River Water Treatment Plant Upgrade completed
New diversion structure and fish screens for Sacramento River water completed
New diversion structure and fish screens for American River water completed
Fairbairn Water Treatment Plant upgrade under construction
California -American Water Company (formerly CUCC)
•
•
Wholesale surface water agreement with City of Sacramento for Southgate Service Area
Approval of change of Place of Use with SWRCB for using PCWA water in the Lincoln
Oaks/Royal Oaks Service Areas within Sacramento County
Sacramento County Water Agency
•
•
•
•
•
•
Approval of EIS/EIR for PL 101-514 (Fazio water) delivery of CVP contract water
Entered into water wheeling agreement with City of Sacramento
Completed transfer of 30,000 AF of CVP Contract water from SMUD
Freeport Diversion facility approved
Zone 40 Water Supply Master Plan and FEIR approved
Agreement with TNC and SSCAWA approved
Natomas Central Mutual Water Company
•
New diversion facility on Sacramento River approved??
Carmichael Water District
•
•
Completed Phase I of new Water Treatment Plant
Completed diversion site modifications, pump station and piping
71
Agreed Upon Surface Water Diversion Amounts & 2001 – 2003 Diversion Amounts
This table shows the historic maximum amount of water diverted from the American River, using 1995 as
the baseline. It also shows the amount of water that will be annually diverted by the year 2030, depending
on the type of water year and the actual amounts diverted in 2001, 2003, and 2003.
Purveyor
1995
Baseline
Folsom
20,000
2030
Diversion
(wet/avg.
years)
34,000
2030
Diversion
(driest
years)
20,000
2001
2002
2003
Diversion Diversion Diversion
(actual)
(actual)
(actual)
21,350
21,351
23,404
39,800
26,500
29,852
29,967
54,200
55,300
69,727
69,037
5,000
29,000
2030
Diversion
(drier
years)
34,00022,000
54,90039,800
82,20054,200
5,000
0
Roseville
19,800
54,900
San Juan
Consortium
ACWS
SSWD
Northridge
Service
Area
SSWD
Arcade
Service
Area
South
County Ag
SMUD
54,200
82,200
5,000
0
5,000
0
4,600
14,100
5,765
16,283
7,027
~14,504
0
26,040
0
0
0
796
~710
0
35,000
0
0
0
0
0
15,000
30,000
30,00015,000
15,000
13,700
14,194
PCWA
8,500
35,500
35,500
35,500
0
22,846
19,731
(includes
5,000 sold to
Arden
Cordova)
22,866
Carmichael
WD
City of
Sacramento
PCWA
City of
Sacramento
County of
Sacramento
12,000
12,000
12,000
12,000
5,985
8,507
9,308
50,000
310 cfs
90,000
50,000
56,600
61,809
~60,463
35,500
45,000
35,500
290 cfs
35,500
290 cfs
35,500
290 cfs
0
46,000
0
52,212
0
~51,076
0
up to
78,000
up to
78,000
up to
78,000
2,500
4,355
4,763
Natomas
Central
Mutual
53,000
45,600
45,600
45,600
50,000
88,120
77,146 (direct
diversions
7,923 (dry
year transfer
to DWR)
72
Element 2. Actions to Meet Customers’ Needs While Reducing Diversion Impacts in Drier Years
To avoid impacts to the American River during dry water years, purveyors have agreed to reduce their
surface water diversions and use alternative supplies, such as groundwater, or increase conservation to
meet their customers’ needs.
•
During Drier Years, to avoid impacts to the American River, purveyors have agreed to reduce
their surface water diversions and use alternative supplies, such as groundwater, or increase
conservation to meet their customers’ needs.
•
For the upstream diversion purveyors, the Drier Year reduction would be a decreasing amount
from their 2030 diversion level to a lesser amount in proportion to the unimpaired inflow into
Folsom Reservoir from 950,000 acre-feet to 400,000 acre-feet.
Regional Water Authority
•
In 1998, water purveyors in southern Placer County and northern Sacramento County formed the
American River Basin Cooperating Agencies (ARCBA) and completed work on the Regional
Water Master Plan (RWMP).
•
The objective of the RWMP is to develop equitable, cost-effective water resource management
strategies for enhancing water supply reliability and operational flexibility for water users of
Folsom Lake, the Lower American River, and the connected groundwater basin.
•
The Regional Water Authority (RWA) has started implementing the RWMP and the Conjunctive
Use Program, utilizing a $22 million grant from the California Department of Water Resources.
•
The Sacramento Groundwater Authority was formed in August 1998 to ensure sustainable yield
and protect the Sacramento North Area Groundwater Basin. (Refer to Groundwater Management
Element on Page 8 for more information.)
Sacramento County Water Agency
•
The Sacramento County Water Agency (SCWA) developed a Water Supply Master Plan
(WSMP) for Zone 40 in 1987. The plan was updated in June 1995 and again in December 2002.
The WSMP proposes the conjunctive use of local groundwater and imported surface water to
meet its customers’ needs in wet and dry years.
•
The Freeport Regional Water Authority (FRWA) comprised of SCWA, the East Bay Municipal
Utility District (EBMUD) and the City of Sacramento has received all required approvals for the
Freeport Regional Water Project on the Sacramento River. The project will provide surface water
to SCWA’s Zone 40 to meet future water needs in the central Sacramento County area.
Completion of the project is expected in 2010.
73
City of Sacramento
•
In early 2004, the City completed a new water intake facility on the Sacramento River. The City
also completed additional treatment capacity and improvements to its existing water treatment
facility at the Sacramento River Treatment Plant.
•
Work on the E.A. Fairbairn intake facility on the American River was completed in 2003. This
doubled the facility in size. The capacity of the Fairbairn Water Treatment Plant is also being
doubled in size and will be completed in early 2005.
•
These new and improved facilities will contribute to flexibility in Sacramento’s water diversions.
By switching to the Sacramento River during dry years, the City will reduce its use of American
River water.
Element 3. Improved Pattern of Fishery Flow Releases from Folsom Reservoir
To achieve the Water Forum’s coequal objective of preserving the fishery, wildlife, recreational and
aesthetic values of the Lower American River, flow releases and water temperatures from Folsom
Reservoir must more closely match the needs of anadromous fish, particularly fall run Chinook salmon
and steelhead trout.
§
Between 2001 and 2003, a series of meetings with technical and policy representatives of the
USBR and state and federal fish resource agencies on an improved flow standard took place. A
series of meetings were also conducted with Water Forum caucuses regarding development of a
draft flow standard.
§
A draft Flow Management Standard (FMS) was developed in the fall of 2003. The FMS includes
a recommended flow regime, description of a River Management Group, and recommendations
for monitoring, assessment and reporting. These elements are described in a report titled “Draft
Policy Document”. The report has been widely distributed to state and federal governmental
water and biological resource agencies and is available on the Water Forum website,
www.waterforum.org.
§
A joint USBR / Water Forum public workshop was held on the FMS in February 2004.
§
The water and business caucuses of the Water Forum elevated the flow standard as their number
one priority during the spring 2004 “Cap to Cap” lobbying trip to Washington DC, which was
sponsored by the Sacramento Metropolitan Chamber of Commerce.
§
A Memorandum of Understanding (MOU) between the Department of Interior (USBR and
USFWS) and the Water Forum was signed in October 2004. The MOU describes a process and
schedule for completing development of the FMS resulting in its submittal to the State Water
Resources Control Board in September 2005.
§
October 2004 through present – technical and policy team meetings are being held with
Reclamation, and state and federal resource fish agencies.
74
Element 4. Lower American River Habitat Management Element (HME)
The HME is being implemented through the Fisheries and In-Stream Habitat Plan (FISH Plan) and the
Recreation Plan. In December 2001 over 30 governmental, public interest, and environmental
organizations endorsed both plans as part of the River Corridor Management Plan. In 2002, the Water
Forum Successor Effort accepted the FISH and Recreation plans as implementation agents for the HME.
§
Water Forum has participated in and sponsored the 2003 American River Science Conference and
in the April 2005 American River Watershed Science and Management conference.
§
Sponsorship of American River Parkway Foundation efforts to improve the LAR Parkway.
§
Sponsorship and participation in LAR flow fluctuation workshop.
§
Funding partner for the LAR Chinook salmon escapement survey.
§
Funding partner for monitoring LAR Chinook salmon spawning gravel restoration sites.
§
Funding partner for a study to assess over-summering steelhead in the LAR
§
Applied for and received $466,000 from the CALFED Ecosystem Restoration Program to
develop a model to assess actions that would result in water temperature reductions at Lake
Nimbus.
§
$35,000 annual support toward update process for the American River Parkway Plan.
Element 5. Water Conservation
The Water Conservation Element of the Agreement helps meet the region’s water supply needs by
minimizing the need for increased groundwater pumping and increased use of surface water, including
diversions from the American River. Each water supplier in the region committed to implementing a
comprehensive water conservation plan.
•
Following the first year of implementation, which was from the date the Agreement was signed in
April 2000 through the end of 2001, 15 of the 16 water purveyors submitted completed Water
Conservation Program Annual Reports. Of the 15 water purveyors reporting, all but one were
fully implementing water waste prohibition and public information programs, and have a water
conservation staff person.
•
Following the second year of implementation, which was January 2002 – December 2003, the
water conservation report stated that about 40 percent of the agencies would most likely have
difficult y meeting their Year-Four objectives without considerable effort going toward an
increase in programs. The report noted that six of the 15 agencies would need to step up
75
conservation efforts in order to meet their goals while the remaining nine appeared to be on track
for full implementation by 2004.
•
In 2003 staff met with conservation staff and management of those six agencies identified as
unlikely to meet their goals. In addition, Water Forum staff continued to work with the Regional
Water Authority to assist RWA in designing its programs that would most help Water Forum
signatories achieve their water conservation goals. These meetings revealed that most agencies
would probably show significant progress in 2003.
•
The Year-Three Report show significant progress was made on implementation of the following
BMPs:
o
o
o
BMPs 5 (Large Landscape Audits) – 128 large landscape audits performed compared to
only 24 in the first year of implementation
BMP 9 (Commercial and Industrial (CI) Water Conservation - The Regional Water
Authority’s “Rinse and Save” program contributed to Water Forum water purveyors
completing 328 CI water audits, which was over seven times as many audits in that
category as reported in 2002.
Implementation of BMP 2 (Plumbing Retrofits) is ahead; with purveyors collectively
distributing almost 11,000 retrofit kits in 2003.
•
Implementation of other BMPs remains problematic. For example, BMP 16 (Ultra Low Flush
Toilet Replacements) continues to present challenges in implementation with only 110 toilets
distributed by Water Forum purveyors in 2003.
•
In 2004, the Water Forum convened a regional landscape task force as called for in BMPs 6 and
12. The task force has reviewed water efficient landscape ordinances and their implementation
throughout the region. The goal of the task force is to identify what, if any, obstacles exist in
implementation of these ordinances and to recommend solutions to achieve implementation. The
work of the task force is nearly completed. A draft of its recommended solutions will be
considered by the water conservation negotiation team next.
•
In 2004 WFSE stakeholders began the process of updating water conservation plans with each
water purveyor, as called for in the Water Forum Agreement. The goal of the update process is to
help purveyors design conservation programs that are more suitable to their needs, based on their
experiences during the ramp-up period, while continuing to achieve the conservation goals
originally established in the Water Forum Agreement.
Element 6. Groundwater Management
Over half of the water used in the Sacramento region comes from groundwater supplies. Over pumping in
some areas has lowered the water table as much as 90 feet, and some wells have been closed because of
contamination. The Water Forum Agreement calls for a groundwater management plan to protect this
valuable resource. The groundwater management element includes monitoring the amount of water
withdrawn from the groundwater basin and the planned use of surface water in conjunction with
76
groundwater. Three sub-basins characterize the groundwater basin – each with unique characteristics and
circumstances, requiring a management plan or process appropriate to the sub-basin’s needs and
conditions.
North Area
The Sacramento North Area Groundwater Management Authority (SNAGMA) was formed in August
1998. In 2001 the name was changed to Sacramento Groundwater Authority (SGA). SGA describes its
mission as “managing groundwater resources in northern Sacramento County.”
•
SGA adopted a Groundwater Management Plan for the management of the northern Sacramento
County groundwater basin on December 11, 2003.
•
Since adoption of the GMP, grants have been obtained for updating the groundwater model,
including model grid and data refinement, time interval, and model calibration.
•
In February 2004, SGA completed a State of the Basin Report for the year 2002 to improve the
understanding of the basin conditions.
Central Area
The Central Sacramento County Groundwater Forum (CSCGF) began February 26, 2002. Thirty
representatives from six interest groups are participating in the negotiations.
•
The CSCGF completed an eight-month Education Phase in October 2002.
•
Negotiations for groundwater management began in November 2002.
•
Agreements-in-Principle on groundwater contamination, groundwater management, cost sharing
and Governance were developed in 2003, and the “Early Review and Authorization to Proceed”
(ERAP) document was released in early 2004.
•
In December 2004, a Task Force was formed in order to complete a Groundwater Management
Plan for the entire Central Basin.
South (Galt) Area
The Clay Water District, Galt Irrigation District and the Omochumne-Hartnell Water District entered into
a Joint Powers Agreement in 1997 and developed a coordinated groundwater management plan for the
South Area. In June 2002, the districts modified their organization to a Joint Powers Authority, the
77
Southeast Sacramento County Agricultural Water Authority (SSCAWA), and adopted a new
Groundwater Management Plan in December 2002.
•
Activities of the SSCAWA include monitoring of selected wells in the area, discussions with
SMUD and the Bureau of Reclamation regarding transfer of a portion of SMUD’s CVP contract,
and discussions with EBMUD and Sacramento County on conjunctive use opportunities.
•
The SSCAWA is responsible for administering and managing a “restoration study” on the Lower
Cosumnes and Mokelumne river basins including groundwater recharge. The study is funded
through the California Bay Delta Authority, formerly known as the CALFED Bay Delta Program.
Element 7. Water Forum Successor Effort
The WFSE is charged with implementing the Water Forum Agreement.
•
The Water Forum established a coordinating committee as a sounding board and to provide guidance
to staff on issues and concerns as they arise. The responsibility of the coordinating committee is to
develop recommendations on the work plan, priorities for implementing the work plan, and the
budget. The coordinating committee consists of the cost-sharing partners and representatives from the
business, environmental and public caucuses. The committee meets monthly.
•
The Water Forum sponsored an orientation in 2002 for new stakeholder representatives to ensure a
smooth transition.
•
The WFSE meets six times a year as a plenary, and as needed for various caucus or sidebar
conversations. This venue gives stakeholders the opportunity to monitor and respond to issues
affecting their interest groups.
•
The WFSE continues to be committed to community outreach as a means for maintaining awareness
about our regional water issues and how the Water Forum Agreement is helping achieve the two
coequal objectives. Water Forum staff participated in a number of activities to further that objective,
including representation at the annual Creek Week and Salmon Festival events, as well as numerous
papers and speeches to various local, state and federal organizations.
•
Water Forum staff cultivates strong relationships with media representatives in order to facilitate
communication between Water Forum signatories and various media outlets.
•
Received prestigious 2003 Governor’s Environmental and Economic Leadership Award
•
Convened stakeholders to provided support for the Freeport Regional Water Project.
•
Welcomed the Florin Resource Conservation District (Elk Grove Water Service) as a member of the
Water Forum with a Procedural Agreement.
Other Important Agreements
Folsom Reservoir Recreation
Because the Water Forum recognizes Folsom as an important resource, the signatories of the Agreement
have committed to working with elected officials, California Department of Parks and Recreation, and
78
other agencies that have an interest in the reservoir to obtain at least $3 million of new funding for
improvements to Folsom Reservoir recreation facilities.
•
As part of the PCWA Pump Station Project, PCWA will receive approximately $10 million
through a combination of state and federal appropriations to reconstruct the American River near
Auburn to allow the return of safe recreation purposes on the North Fork of the River.
•
The project will also include landside recreation improvements to trails, vehicle access and
parking improvements and construction of a new pedestrian bridge across the river.
Part Two – A Look Forward
The WFA delegated a number of specific implementation responsibilities and tasks to the WFSE. Some
are ongoing and some have certain goals that will be met within the next one to three years. These
identified tasks are described in the following section under the following three categories:
•
•
•
Near Term Activities: Activities Water Forum staff expects to complete over the next 1 – 3
years.
Long Term Activities: Activities Water Forum staff expects will extend beyond 3 years.
Ongoing Activities: Activities that the WFA requires on an ongoing basis into the future.
Near Term Activities
1. Lower American River Flow Standard and Related Tasks
Develop an improved flow standard for the lower American River protective of instream aquatic
beneficial uses, and not detrimental to water supply. The U.S. Bureau of Reclamation is to
include this flow standard in a revised OCAP and request an amendment to their water right
permit from the State Water Resources Control Board to incorporate the standard in their permit.
Other significant activities associated with this work effort include completion of the Upstream
Diversion Agreements that provide marketable water to the American River for aquatic resources,
and development of Dry Year Procedures.
2. Central Sacramento County Groundwater Forum
Working with all affected and interested stakeholders develop a structure for management of
groundwater in the central Sacramento County (the region south of the American River and north
of the Cosumnes River) for that entire region including Sacramento County’s Zone 40 area. This
work activity also includes the development of a Groundwater Management Plan for the region.
3. Water Conservation
Per the WFA, update water conservation plans of each water purveyor with the intent of
designing programs suitable to specific needs based on experiences during the recently completed
4-year ramp up period.
4. Landscape Water Conservation
Implement WFA provisions associated with Best Management Practice 6, Landscape Water
Conservation Requirements for New and Existing Commercial, Industrial, Institutional and
Multi-Family Developments. Complete the requirement in the WFA to review and potentially
improve implementation of landscape water conservation ordinances of cities and counties.
79
5. Sacramento River Diversion Project
Work to develop a project consistent with the interests of WF stakeholders. Work activities
include identifying and negotiating issues associated with surface water diversions from the
Sacramento River, working on support for the project from all interests. It is important to avoid
litigation of this project by Water Forum stakeholders (e.g. environmentalists).
6. El Dorado County Water Agency / El Dorado Irrigation District Purveyor Specific Agreement
Per the WFA, complete negotiations resulting in purveyor specific agreements. This activity is
dependent on the development of a final El Dorado County General Plan.
Long Term Activities
1. Completion of Galt Basin Groundwater
The Clay Water District, Galt Irrigation District and the Omochumne-Hartnell Water District
formed a Joint Powers Authority, the Southeast Sacramento County Agricultural Water Authority
(SSCAWA), and adopted a groundwater management plan in December 2002. The plan covers
only the geographical area within their jurisdiction. The WFSE will work with the JPA to expand
their plan to include the entire South Basin.
2. Declaration of Full Appropriation for the lower American River
Amend the existing Declaration of Full Appropriation for the lower American River through the
State Water Resources Control Board (SWRCB) water right process. The amended declaration is
to be consistent with the Water Forum Agreement. This cannot be pursued until the SWRCB
adopts the Flow Standard.
3. Agricultural Water
Consistent with the WFA, assist in securing additional water supplies for South County
Agriculture during above-Hodge years.
Ongoing Activities
1. Habitat Management Element Implementation
Implement the five programs of this element (Habitat Management Plan; Habitat Projects;
Monitoring and Evaluation; Project Specific Mitigation; and LAR Recreation) which together
address flow, temperature, physical habitat and recreation issues for the lower American River.
The five programs are supported by approximately $500 thousand annually principally funded by
the City of Sacramento and the Sacramento County Water Agency with contributions from the
San Juan Water District, City of Roseville and Southern California Water Company. Per the
WFA, more financial support will be forthcoming as more water is diverted from the American
River over time.
2. Periodic Water Accounting / Water Budget
Develop a communication strategy for information sharing between water purveyors and land use
agencies and create guidelines for developing the periodic accounting of the Water Forum “water
budget”. This entails obtaining information on surface water and groundwater use, developing a
tool for comparing diversions from the American River and the three groundwater sub-basins
with build out of the General Plans, and using the accounting tool to track water supply and
demand over time.
3. Participation in the American River Operations Group
Represent Water Forum stakeholder interests in this Group formed by the U.S. Bureau of
Reclamation to provide recommendations regarding operations of Folsom Reservoir.
4. Other Required Activities
• Development of the periodic Water Forum Report.
80
•
•
•
•
•
Development of the annual Water Conservation Report.
Update water conservation plans every five years
Evaluation of the Water Forum Agreement every five years
Development, every five years, of the State of the River Report.
Assure continued compliance of the Mitigation, Monitoring and Reporting Element
associated with the Water Forum EIR.
81
Appendix II
82
83
84
85
86