1. Water, drought, and social justice in urban and rural California Ellen Hanak Northern California Grantmakers Annual Conference — From Ideas to Action May 2015

2. First, a brief overview of drought issues 2 Photo courtesy of Department of Water Resources  Play Video Play Video

3. Second, an overview of water spending 3 Source: Hanak et al., Paying for Water in California (PPIC, 2014).

4. What are the key equity issues? Urban areas: Large systems  Scale economies for infrastructure (lower costs/household)  Better managed (safer) systems  Some ability to cross- subsidize lower income households through lifeline rates Rural areas: Small systems  No scale economies (higher costs/household)  Systems harder to maintain (organizational challenges)  Generally lower incomes, outside funds often needed for system upgrades 4

5. Growing challenges in both settings Urban areas  Rising costs and legal uncertainties of lifeline rates  Drought resulting in price changes that can hit lower- income households hard Rural areas  Growing problem of contaminated wells  Drought resulting in some wells going dry 5

6. Urban water bills have been rising faster than inflation 6 Source: Hanak et al., Paying for Water in California (PPIC, 2014).

7. Low-income households may face growing affordability challenges  Proposition 218 (1996) restricts lifeline rates –No new cross-subsidies from other ratepayers without 2/3 voter approval  Drought and reduced water sales can cause revenues to fall below costs –Some utilities are increasing fixed monthly service fees 7 Source: Hanak et al. Paying for Water in California (2014)

8. Small, disadvantaged rural communities face special funding challenges  About 0.2% to 0.4% of state’s population in small communities with contaminated wells  $30-$160 M/year needed to address this problem  Prop 1 and other sources can help  But a dedicated statewide surcharge would provide more reliable support 8 Small systems (population <3,300) with contaminated wells and health violations Source: Hanak et al., Paying for Water in California (PPIC, 2014).

9. Dry wells are an added problem in rural communities with this drought  Emergency funds available  But support for individuals, smallest communities faces legal hurdles 9

10. State general fund is most progressive source if funding water ≠ social cuts 10

11. The drought opens a window for reform Source: PPIC Statewide Survey: Californians and their Government

12. Thank you! For more info go to: www.ppic.org/water 12 Photo courtesy of Department of Water Resources

13. Water, drought, and social justice in urban and rural California Ellen Hanak Northern California Grantmakers Annual Conference — From Ideas to Action May 2015

14. Notes on the use of these slides 14 These slides were created to accompany a presentation. They do not include full documentation of sources, data samples, methods, and interpretations. To avoid misinterpretations, please contact: Ellen Hanak (hanak@ppic.org; 415-291-4433) Thank you for your interest in this work.