CalChamber Urges U.S. Senators to Support New Tools to Speed Needed Water Projects

WaterThe California Chamber of Commerce is urging a U.S. Senate policy committee to authorize new federally backed tools to help local agencies advance critically important water supply projects.

The financial tools will help local entities build a more drought resilient water supply infrastructure across the West with water supply management projects including surface water storage, groundwater storage, and water reuse and recycling.

The tools are included in federal bills S. 2533 by U.S. Senator Dianne Feinstein (D-San Francisco) and H.R. 5247 by Representative John Garamendi (D-Walnut Grove).


In its June 10 letter to the chair and ranking members of the U.S. Senate Energy and Natural Resources Committee, the CalChamber supported proposals to:

• Authorize a new, innovative, federally backed low-interest, long-term program through the U.S. Bureau of Reclamation—the Reclamation Infrastructure Financing and Innovation Act (RIFIA);

• Expand the highly successful federal WaterSMART program, allowing the Reclamation Bureau to use the program to provide a more robust level of competitive cost-shared partnerships (the lesser of $20 million or 25% of total project costs) for a wide range of water supply and water management projects, including small-scale storage, conveyance, integrated regional water management, and water recycling and reuse; and

• Reform the Reclamation Bureau’s water recycling and reuse program to allow additional projects to compete for construction assistance.

Minimal Budget Impact

RIFIA, in a similar manner to grants, offers great savings for nonfederal agencies investing in new water infrastructure, and it does so with minimal impact on the federal budget. If RIFIA were in place today, the interest rate for water infrastructure loans would be approximately 2.75%, with a repayment period of up to 35 years and the ability for borrowers to defer the initiation of repayment for up to five years following substantial completion of the project.

Based on current municipal bond rates (even for a local government that could secure AA rated municipal bond financing), RIFIA would generate just under 10% in annual savings over a 30-year repayment period, and just over 20% in annual debt service savings over the longer 35-year repayment period allowed under RIFIA.

Leveraging Funds

RIFIA also offers the opportunity to cost-effectively leverage limited federal funds. The $200 million in budget authority that has been proposed by U.S. Senators Feinstein and Barbara Boxer (D-Rancho Mirage), for example, would support more than $13 billion in federally backed water infrastructure financing and over $27 billion in new water infrastructure spending, with federal outlays (real federal spending) of only $6 million to $8 million.

Streamlining Process

In its letter, the CalChamber also stated its support for efforts to seek new ways to streamline the environmental review process for new water supply infrastructure investments, such as the Sites Project, which could add more than 1 million acre-feet of water to the available water supply in California.

The CalChamber supports proposals to address many of these challenges by establishing a lead agency to coordinate all federal environmental reviews related to a surface water storage project and directing that a schedule be established and strictly adhered to by the Reclamation Bureau for the completion of all environmental review processes.

Any environmental streamlining process must include both federal projects and projects (like Sites) that are being developed by nonfederal agencies in cooperation with the Reclamation Bureau and other federal agencies on nonfederal lands.

Action Needed

The CalChamber is encouraging members to contact their U.S. senators and representatives in Congress to urge them to move forward with deliberations on comprehensive drought legislation as soon as practicable to help California and the West become more drought resilient.

An easy-to-edit sample letter is available at

Staff Contact: Valerie Nera