TYPES OF STATE AND LOCAL WATER MANAGEMENT REVENUE SOURCES
Revenue Source | Appropriate Uses | Feasibility | Key Tradeoffs | Application in California |
|---|---|---|---|---|
General Fund | Activities that benefit the
general public | Available each year, but
subject to competing uses
| Funds are limited | A common source of funding
|
General Obligation Bonds | Projects that benefit the
general public | Commonly used | Subject to a vote | Commonly used, but some
concern about getting future
bonds approved |
Revenue Bonds | Projects where a dependable
revenue stream is available | A standard method of
financing | None | A typical method of
financing for local and state
projects |
User Fees | Projects where direct
beneficiaries are easily
identified. | Potentially works well with
clearly defined beneficiaries,
less likely to work for
projects with significant
public benefits. | Will focus projects to those
with local scope which may
undermine IWM efforts.
May limit state’s ability to
increase fees and taxes to
support other projects. | State Water Project is an
excellent example as over
90% of project cost will be
repaid by direct beneficiaries
(contractors) |
Assessment Districts | Can be formed by majority
vote but must support local
projects that do not provide
a “general” public benefit.
Water and storm water
projects are generally
allowed under assessment
districts. | The state could coordinate
with local agencies to
establish assessment
districts. | Assessment districts cannot
be used to support general
public benefits and, as such,
will tend to focus on local
projects. | 1911 and 1913/1915
assessment districts are
widely used by local
agencies in California. |
Utility User Tax | Earmarked for a special
purpose or used as a general
tax | Used by many cities and a
few counties | Has to be approved by a
ballot measure. |
Widely used by cities |
Impact Fees | Used by local governments
to charge new development
for the additional cost
imposed on existing public
infrastructure. | Impact fees are generally
used in over 90% of local
governments in California,
thus there is limited
opportunities for further
expansion. | Deters new development. | Widely used in California |
Infrastructure State
Revolving Funds – Low
Interest Loans | Financing for construction of
publicly owned wastewater
collection and treatment
systems | Used by many wastewater
entities such as cities,
counties or special districts | Can be more costly than
grants | Widely used in California |
Public Goods Charge | Could fund a variety of IWM
activities | Was approved for electricity
but sunset in 2011. Never
has been tried with water. | Could impact local agencies
ability to generate local
revenues | Not yet tried in California,
would need a two-thirds
vote |
Mello-Roos Special Taxes | Areas with new
development. It is possible
to establish Community
Facility Districts (CFDs) in
other areas, but this requires
a majority vote by residents
to tax themselves.
| CFDs are most feasible
during strong housing
markets when there is
significant new
development. | When housing markets and
development slows, forming
additional CFDs is difficult
and there may be concerns
with revenues to pay back
existing bonds. | Recently used to finance the
Bear River Levee Setback
project in Yuba County |
Private Investors | Local water projects that
generate revenue | Typically have been used as
part of design-build process
| Interest rates are higher
than public debt, can’t be
used on state projects | Limited to local projects |
Private-Philanthropic | Traditionally has been used
for ecosystem and
recreation projects | Commonly used | Not a predictable revenue
source |
Widely used in California |
