The postmortem on California's water policy of the past decade produced a consensus on two fatal conditions: The agency responsible for guiding the policy lacked authority to enact it and the state had no reliable funding to keep the policy alive.

Neither condition is fully addressed in a plan lawmakers were considering late Monday.

The new plan gives no enforcement power to the agency that would implement a Delta plan, and, like the ill-fated CalFed policy before it, the new plan depends on borrowing billions from the bond market to propel water reform.

Supporters of the deal in Sacramento say it is a historic breakthrough that would regulate groundwater in California for the first time, establish minimum flows in the Delta, require cities to use less water and put up $3 billion for new dams.

They say that even though a new Delta council would lack some powers, the legislation sets standards that amount to a big step in the right direction.

"I think it inches beyond CalFed," said Phil Isenberg, a former Assembly leader who headed an independent task force evaluating the Delta.

The package has two parts: policy and governance bills requiring a majority vote in the Legislature; and a finance bill that requires two-thirds approval from lawmakers and majority approval by voters next year. Gov. Arnold Schwarzenegger has said repeatedly that any water reform package must also include bond financing for new dams, so it is


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unclear whether he would sign a water policy reform package without the bond measure.

Senate President Pro Tem Darrell Steinberg sees "huge strides" toward strong Delta protection in requirements that agencies certify their projects are consistent with a Delta plan. Projects, including a canal around the Delta, would have to be consistent with equally balanced goals of reliable water supplies and environmental protection. The Delta Vision review headed by Isenberg concluded that water deliveries have had a higher priority than environmental protection until now.

The return to bond funding flowed from the threat that imposing fees would fracture fragile compromises, Steinberg said.

"There is so much that is significant and of huge change in the overall plan that there comes a point where you try to put one more thing on top "... and the whole plan craters," he said.

Instead, the state will ask state taxpayers to approve a $9.4 billion bond for new dams, regional water projects and ecosystem restoration. Many critics contend it fairer, for example, to link repayment to water use so farm districts and cities that benefit from the dams would pay for them.

Specifically, the bond bill's supporters want the money for dams that include Temperance Flat on the San Joaquin River; the Sites Reservoir, which would store Sacramento River water north of Sacramento; and an expansion of Los Vaqueros Reservoir, owned by the Contra Costa Water District.

Most of the state's big water districts are most interested in the bigger Temperance Flat and Sites reservoirs. Los Vaqueros is much less controversial.

"These two dams (Temperance Flat and Sites) are economic losers, and the fact that taxpayers are being asked to pay for them is the clearest indication of that," said water expert Peter Gleick, executive director of the Pacific Institute in Oakland, an environmental research group. "There's not $3 billion in public benefit coming from these reservoirs."

Nevertheless, Gleick found value in proposal provisions to monitor groundwater use, require conservation in urban areas and permit state regulators to review water rights.

Generally speaking, the policy package has more Democratic support and the finance package has more Republican support. But as is usually the case with California water disputes, regional differences and other philosophical priorities can overshadow party affiliation.

Delta interests are strongly opposed to the bills because they fiercely oppose a peripheral canal, while environmental groups are sharply split on the package.

At the heart of the new policy is a framework for a canal to route water around the Delta, a prospect that Delta interests detest because it could curtail housing development, make it more difficult to farm and could harm water quality and fish by diverting a portion of the Sacramento River out of its natural watercourse.

The path to building a peripheral canal would be clearer and more certain, but it would also be more difficult. The bills would strictly require the canal's vehicle, the Bay Delta Conservation Plan, to ensure its operation actually restores the Delta.

The provision has the support of the state's largest irrigation district but has split environmental groups.

The Westlands Water District supports the legislation because, despite its strict language, it provides "a clear path" to a new way to move water around the Delta.

"We're not certain we can meet (the requirements). We hope we can," said Ed Manning, a lobbyist for the Westlands Water District in the San Joaquin Valley, in testimony last week.

Some environmentalist adamantly oppose a peripheral canal and mistrust any guarantees.

Other environmental groups contend the proposal is a good deal for the environment because of the standards it must meet.

Another key element, according to supportive environmentalists, is the direction it gives to state water rights regulators who determine how much water should be left to flow into the Bay to protect public trust values such as wildlife and clean water. The state Supreme Court in 1986 pushed curtailment of rights, but state regulators have not waded into that issue.

"It gives them the direction to get the work done that they haven't done before," said Cynthia Koehler, a lawyer advising the Environmental Defense Fund, which is helping negotiate the package.

The plan would also require city residents to cut water use by 20 percent in the next decade.