Local Perspective on State led Funding & Finance Planning Efforts Seth Wurzel, CGFM CCVFCA Flood Forum March 15, 2017

Current Funding Approach Local Share (Represents Local Benefits / Interests) Property Based Annual Assessments & Taxes / One Time Fees General Fund Based Sales Taxes / General Fund Revenues Enterprise Based Revenues Storm Drain Fees / Reservoir & Water / Power Generation State Share (Public Benefits / Interests) General Fund (Subvention / Special Projects / GO Bonds to Finance) Fee Based (Regulatory Fees) Federal Share (Public Benefits / Interests) USACE appropriations FEMA Hazard Mitigation / Public Assistance Programs NGO’s (Public Benefits / Interests) Income Tax Subsidy Provide broader overview of all mechanisms and couch them in a manner that demonstrates understanding of general public finance concepts - Property based – Taxes and Assessments (either for general or special services) / One Time fees like connection or mitigation based fees (DIF, etc.) - General fund comes in the form of any discretionary based revenues (Property Tax Allocations / Sales Tax based – discretion can vary based on threshold approval, could be in the form of Tax Increment as well) - Enterprise Rev’s are a lot of time - Regulatory

Current Shortfalls Not generating enough to keep pace with needs & risk Local / State / Federal Shares Falls short in Several Areas Assessment of Beneficiaries and Proportional Allocation Alignment with Local / State / Federal Priorities & Interests Alignment with Liabilities & Obligations Explanation – identification and quantification of benefits (direct / indirect and general) and allocation of costs proportionately to each beneficiary

Plan Options CVFPP & DPC - Augmentation Based Approaches Identified Sources: CVFPP SPFC Facilities General Beneficiaries More public benefit funding from State General Fund / Federal Appropriations (Annual GF / GO Bonds / USACE appropriations) Local Beneficiaries More Local Assessments (RD’s / JPA’s / MA’s / etc.) Resurrected SSJDD Assessment (New) River Basin Assessment as part of Integrated Water Management (New) State Flood Insurance Program (New)

Plan Options (cont.) Identified Sources: DPC Study General Beneficiaries Continued State General Fund funding / Future Bonds (Annual GF appropriations via subvention program) Local / Indirect Beneficiaries Continued RD Funding (Assessments) Conveyance Utility / Enterprise Payments (New Fees / Charges) Water User Fee: Water in / out of Delta Water Exporter Fee: Water through Delta Flood Protection Fee (New Fees) Property & facility direct beneficiaries

Items for Further Evaluation Appropriate Use of Funding Mechanism (Matching Sources & Uses) E.g.: Annual Assessment goes for O&M / Pay Go & Capital Financing One time fees for Special Projects (e.g. mitigation type fee) Geographic considerations Equity Issues Amount paid vs. amount of benefit Direct Beneficiaries How much Self Help is reasonable? Economic justice Need to recognize existing assessments (lack of consistent standardized rate structure / unique circumstances) Indirect Beneficiaries – appropriate proportionality of contribution & benefits Cost Effectiveness Economic realities, variations over time, land use economics Cost effectiveness issues as it relates to Small Communities. Addressing State Priorities and Growth over time.

Items for Further Evaluation Legal Issues Liabilities and Obligations Annualized cost of risk and legal liability Constitutional / Statutory Limitations New legislation Political Realities Issue champions Funding governance

Implementation All Beneficiaries of Flood Control System Direct Beneficiaries Indirect Beneficiaries General Beneficiaries Thoughtful Implementation Pre-emption of Local Assessments Layering issue Efficient Governance / Administration Funding Mechanism Reliability and Adaptability Changing economics Competing State Policies and Interests Balance Flood Management with other State policies (e.g. Housing / Growth / Land Use & Employment - as they change overtime) Factors to consider during Implementation Layering (Issues addressing operations and maintenance vs. capital mitigation)

Implementation Development of Detailed Work Plans for Evaluation and Implementation Detailed analyses scoped to address each issue Input and consideration on key policy issues that includes Local Involvement Realities of Rural vs. Urban environment Analyses will likely lead to differing approaches Multiple mechanisms Structured to address issues Next steps for Implementation