Schwarzenegger and Feinstein urge $9.3 bln water bond

SAN FRANCISCO (Reuters) - Republican California Gov. Arnold Schwarzenegger and Democratic U.S. Sen. Dianne Feinstein unveiled a plan on Thursday for a $9.3 billion bond aimed at bridging the partisan divide between state lawmakers over water projects.

California Governor Arnold Schwarzenegger speaks after meeting with border governors from U.S. and Mexican states at the official residence Los Pinos in Mexico City, May 29, 2008. REUTERS/Daniel Aguilar

The plan came on the heels of the U.S. Fish and Wildlife Service putting California on notice that the delta smelt, a small fish in the Sacramento-San Joaquin Delta, could be listed as an endangered species early next year, raising additional concerns among water agencies over water supplies.

A federal court ordered California last year to reduce the amount of water it pumps from the delta, its fresh water hub, in the hope of increasing the smelt’s numbers.

The decision alarmed water agencies, especially in southern California, that receive delta water and it cast uncertainty over various plans for improving and expanding the state’s water infrastructure.

The delta gets special attention in the deal crafted by Schwarzenegger and Feinstein.

“There is an urgent need for comprehensive water reform, and this bipartisan plan is offered as a potential compromise that puts us on the path toward restoring the Sacramento-San Joaquin Delta, expanding water supplies and promoting conversation efforts that will ensure a clean, reliable water supply for California,” Schwarzenegger said in a joint statement with Feinstein.

Since the court’s decision, Schwarzenegger has declared California, which has had two years of below normal rainfall, to be in a drought., and talks in the legislature over water works stalled as Democrats and Republicans failed to reach agreement on what kind of water projects the most populous U.S. state should build.

Feinstein partnered with Schwarzenegger to break the impasse, the goal of the $9.3 billion bond they are urging lawmakers to approve and put on the November ballot.

“California is facing an unprecedented water crisis,” Feinstein said. “The combination of drought, court ordered water restrictions, global warming, and an increasing population has placed a major strain on the existing infrastructure.”

“We need to prepare now for the future,” she added. “This language is comprehensive, balanced and could help increase water supplies to meet the needs of the environment, our cities and agriculture.”

Lawmakers could not reconcile demands of those three interests and Democrats who control the legislature and minority Republicans split over whether California should build dams. Democrats, backed by environmentalists, oppose dams. Republicans, many from farm areas, want them.

Underscoring the sensitivity of that split, Schwarzenegger and Feinstein did not provide details on projects. Instead, they outlined broad areas for spending.

They urged $2 billion for regional water supply and conservation projects, $1.9 billion for projects in the delta, $3 billion water storage projects, $1.3 billion for conservation and watershed protects, $800 million for groundwater, wastewater treatment and stormwater works and $250 million for water recycling.

State Senate President Pro Tem Don Perata, who last year had crafted a water bond bill, offered qualified support, noting California has a backlog of infrastructure debt to issue and lawmakers have yet to pass a budget for the fiscal year that started this month.

“I am open to doing a water bond,” he said in a statement. “First, however, the state should spend the bond money voters approved in 2006, and then, we must pass a responsible budget that can pay for the debt service on a new bond.”

“Once we do that, we’ll sit down with the governor and Republicans to draft a bond measure to secure the state’s long-term water supply,” Perata said.

Editing by Leslie Gevirtz