Moody’s has reported that the Groundwater Bill signed by Governor Brown is a credit positive for the drought-ridden Central Valley.
While issues still loom surrounding water supply for the region in the drought, this piece of legislation requires that local government create groundwater sustainability plans for over-drafted basins, prescribing that local governments regulate their groundwater through metering and penalties. California is the last western state to adopt legislation regulating groundwater basins.
Local governments have five years to develop their plans under the new law, making the impact on the current drought situation minimal. Once plans are adopted, the California Department of Water Resources and the State Water Resources Control Board have the ability to intercede if local governments are not managing their groundwater responsibly.
According to the Governor, the bill gives power to local government to manage their resources, but also provides much needed oversight for use of water resources. By setting up this structure for effective management, Moody’s sees this as a credit positive for local governments that participate in effective management of the groundwater supply.
Urban Futures Inc. is currently working with the San Bernardino Water Department to develop a financial plan for construction of the San Bernardino Clean Water Factory, a recycled water-for-groundwater recharge project that will allow the District to better manage their resources and serve their customers. Those interested in financing opportunities for groundwater management projects in light of this new legislation should contact James Lee at (714) 283-9334.