Keep the Water Flowing: How to Prevent Your Project's Water Supply From Drying Up

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Often, water was among the last consideration of developers and businesses in planning new facilities and expanding existing ones. These days, however, they no longer have that luxury. In early August, the California Legislature and governor decided to postpone the public's vote on Proposition 18 – the Safe, Clean, and Reliable Drinking Water Supply Act of 2010 (2010 Water Bond) from November 2010 to November 2012. While political exigencies might have dictated this result, the decision will seriously affect real estate and commercial development in California. This is because without sufficient water, there won't be any new development or other economic expansion.

The purpose of the 2010 Water Bond was to provide more than $11 billion for water infrastructure projects throughout California, including watershed protection and restoration, groundwater protection, water storage, recycling and projects for disadvantaged communities. While business leaders and environmentalists may differ over the merits of the 2010 Water Bond, its delay will unquestionably be felt for years. Indeed, the delay only serves to compound the adverse effects of recent events, including sustained drought conditions, reductions of water supplies from within and without California (not necessarily tied to drought), and massive reductions of water reserves in many reservoirs throughout the state, to name a few. The confluence of these events creates an uncertain water future that could have a ripple effect throughout large portions of California's economy.

Water Future Is Uncertain

With the delay of the 2010 Water Bond, an already uncertain water future becomes murkier. The 2010 Water Bond could have assisted local water agencies in the preparation of their required Urban Water Management Plans (UWMP), which are due statewide in July 2011. UWMP are assessments of the reliability of an agency's water sources for the next 20 years to ensure that existing and future water demands are met. Depending on the local water agency, the projects in the 2010 Water Bond could have provided additional water sources for current and future water demands. Without these additional water sources, local water agencies have no choice but to concentrate, at least in the short term, on developing "local resource" projects for existing water needs and possibly forego future water demands for their planning purposes.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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