Funding the State Water Plan: Proposition 6 and the Imprecision of Water Management “Strategies”

Last month, almost a year after Lieutenant Governor David Dewhurst first proposed tapping Texas’ Rainy Day Fund to pay for water projects, voters approved Proposition 6, creating a new $2 billion infrastructure bank.

News accounts, op-eds, and political speeches hashed over the pros (and to a lesser extent the cons) of Proposition 6 but did not go into tremendous detail about the purpose of the proposition.  Most accounts described the proposition generally, as being intended to “finance the State Water Plan.”

That is a completely accurate statement.  The proposition, as it appeared on the ballot, said that it would amend the state constitution to create two new funds “to assist in the financing of priority projects in the state water plan.”  The new constitutional provisions that it added – as Article III §§ 49-d-12 and 49-d-13 – expressly state that the new funds can only be used to provide financial assistance for projects in the State Water Plan (SWP).

But what projects, exactly, are in the SWP?

Defining “Projects”

The statutory framework that gives shape and direction to Proposition 6 – H.B. 4, codified principally in Chapter 15 of the Texas Water Code (TWC) – expressly states that “it is the intent of the legislature that [the new water bank] will never be used: (1) for a purpose other than the support of projects in the state water plan.”  TWC § 15.432(a)(1).  Other provisions also refer to “projects.”  E.g., TWC §§ 15.434(b)(1), 15.434(b)(2), 15.435(b), and 15.436.  But H.B. 4 at no point defines the term “project.”

The TWC includes an existing definition that applies throughout Chapter 15.  § 15.001(6).  Under it, “project” means:

  • “any undertaking or work, including planning activities and work to obtain regulatory authority at the local, state, and federal level, to conserve, convey, and develop water resources in the state, to provide for the maintenance and enhancement of the quality of the water of the state, to provide nonstructural and structural flood control, drainage, subsidence control, recharge, chloride control, brush control, precipitation enhancement, and desalinization, to provide for the acquisition of water rights and the repair of unsafe dams, and to carry out other purposes defined by board rules;”
  • “any undertaking or work outside the state to provide for the maintenance and enhancement of the quality of water by eliminating saline inflow through well pumping and deep well injection of brine; or”
  • “any undertaking or work by Texas political subdivisions or institutions of higher education to conserve, convey, and develop water resources in areas outside Texas or to provide for the maintenance and enhancement of the quality of the water in areas adjoining Texas, if such undertaking or work will result in water being available for use in or for the benefit of Texas or will maintain and enhance the quality of water in Texas.”

This definition is straightforward enough.  However, the 2012 State Water Plan (SWP) does not present specific “projects.”  Instead, the SWP includes, as Appendix A, a list titled: “Recommended Water Management Strategies and Cost Estimates.”  It lists 562 line items.  These are the “projects” that Proposition 6 is supposed to fund.  But the exact difference between a “project” and a “recommended water management strategy” is somewhat unclear.

“Projects” and “Strategies”

H.B. 4 does not define “strategy.”  Neither does TWC Chapter 15 or Chapter 16.  The statute governing state water planning – Texas Water Code § 16.051 – requires that the SWP include: (1) “an evaluation of the extent to which water management strategies and projects implemented after the adoption of the preceding state water plan have affected that progress”; and (2) “analysis of the number of projects included in the preceding state water plan that received financial assistance from the board.”  But Section 16.051 does not define or distinguish between “projects” and “strategies.”

The TWDB’s implementing regulations are more focused.  They define a “water management strategy” as “[a] plan or specific project to meet a need for additional water by a discrete user group, which can mean increasing the total water supply or maximizing an existing supply.”  31 TAC § 358.2(11).  See also 357.10(28) (providing an identical definition for regional water plans).

This definition implies that the terms “strategy” and “project” and even “plan” could be synonymous.  The SWP similarly conflates the terms, in numerous statements like: “These strategies include[] 562 unique water supply projects designed to meet needs for additional water supplies for Texas during drought (this figure is lower than presented in previous plans because it does not separately count each entity participating in a given project).”

This sort of circular interchange between “strategy” and “project” has even found its way into popular discussions.  In a November 1 editorial endorsing Proposition 6, for instance, the Dallas Morning News explained the importance of the SWP by observing that its “projects would help cities better recycle water. They would help rural Texans get more efficient irrigation equipment. And they would allow various parts of the state to build new reservoirs. In all, the state has 562 strategies in its water plan.”

Plenty of agencies have developed workable programs around ambiguous texts.  But the imprecise conceptualization of “strategies” in planning laws has fostered – or at least permitted – an imprecision in the identification and description of strategies in planning documents.

This imprecision has consequences.  The new funding framework created under Proposition 6 requires the TWDB to allocate a finite amount of financial assistance based upon which projects the agency determines deserve the highest priority.

But there is a question of how effectively the TWDB can compare one project (or strategy) to the next if there is uncertainty about exactly what a project is.  Running an apples-to-apples comparison is difficult if you do not know whether what you have is an apple; it is even harder if you do not know what an apple is.

Regional Planning and Strategies

Since the passage of S.B. 1 in 1997, Texas has followed a bottom-up water planning process.  The state is divided into sixteen regional planning regions.  For each region, a regional planning group (RPG) prepares a regional water plan (RWP) every five years and presents it to the TWDB for approval and inclusion within the SWP.

Appendix A of the SWP should not be viewed as a list of strategies that the TWDB determined to be important or appropriate for Texas as a whole.  Rather, the appendix represents an aggregate and relatively unfiltered wish list stitched together from the regional wish lists that each of the RPGs submitted.

Texas Water Code § 16.053 governs the regional planning process.  It requires that, in preparing the RWPs, the RPGs address “projected water use and conservation in the regional water planning area.”  § 16.053(e)(9)(A).  Additionally, the RPGs must consider the “state and regional water plan projects, including water conservation strategies, necessary to meet the state’s projected water demands.”  § 16.053(e)(9)(B).

The TWDB’s regional planning regulations require RPGs to “identify potentially feasible water management strategies to meet water supply needs.”  31 TAC § 357.34(b).  The adverb “potentially” (common synonym: “possibly”) illustrates just how far the water management strategies in the RWPs – and by extension, the SWP – may be from being demonstrably feasible, shovel-ready undertakings.  The strategies may include (per 31 TAC § 357.34(c)):

  1. Expanded use of existing supplies;
  2. New supply development;
  3. Conservation and drought management;
  4. Reuse;
  5. Interbasin transfers; and
  6. Emergency transfers.

The regulations call for the RWPs to include, among other things, “[a]n equitable comparison between and consistent evaluation and application of all water management strategies the [RPGs] determine to be potentially feasible for each water supply need.”  31 TAC § 357.34(d)(2).  The regulations do not specify how “equitable” or “consistent” the required comparisons must be.  But if Appendix A is any guide, the comparisons may be (at least in their final, written, consummating form) relatively formalistic and superficial.

Strategies as SWP Line Items

The SWP’s Appendix A is meant to be a manageable and accessible summary of policy intent, not an encyclopedic rundown of data points.  Still, for it to allow for meaningful comparison of strategies, it should follow consistent conventions.  It does not.  Consider the SWP reuse projects for Region C, the regional planning group that encompasses the DFW area.  The appendix lists about fifteen such strategies:

  1.  “Dallas Water Utilities reuse” (capital cost: $82,920,000);
  2. “direct reuse” (capital cost: $264,783,000);
  3. “direct reuse – Frisco” (capital cost: $31,448,606);
  4.  “Ennis reuse” (capital cost: $31,779,000);
  5. “indirect reuse” (capital cost: $0);
  6. “Indirect reuse – Jacksboro for Jack County mining” (capital cost: $200,000);
  7. “Lake Ralph Hall – indirect reuse” (capital cost: $0);
  8. “Main stem Trinity pump station (Lake Ray Hubbard indirect reuse – DWU)”
  9. “TRA 10-Mile Creek reuse project” (capital cost: $14,895,000)
  10. “TRA Ellis County reuse” (capital cost: $10,384,000)
  11. “TRA Freestone County reuse” (capital cost: $17,266,000
  12. “TRA Kaufman County reuse” (capital cost: $9,761,000)
  13. “TRA Las Colinas reuse” (capital cost: $14,530,000)
  14. “TRWD third pipeline and reuse” (capital cost: $914,424,000)
  15. “Water treatment plant – expansion – reuse sources” (capital cost: $32,750,000)

While these descriptions may serve as shorthand for Region C members or TWDB staff familiar with the individual line items, they could cause considerable confusion for those less intimately involved in the process.  (In some instances, the regional plans may include additional information and, to the extent that the SWP incorporates them, it would also incorporate the information within them.)

The second and third items are for “direct reuse.”  The fifth, sixth, seventh, and eighth items are described as being for “indirect reuse.”  But what about the remaining items, which are for an unspecified form of “reuse.”  Are they for direct or indirect reuse, or for both?  Of course, you could argue that this is an overly nitpicky question, that “reuse” should be sufficiently descriptive – but if that were true, why are several items (with capital costs ranging from zero dollars to more than a quarter billion) listed as being for either direct or indirect reuse?

And what are we to make of the second item that is simply for “direct reuse?”  The SWP would allocate $264,783,000 to a strategy that is, for all practical purposes, unidentified.  We do not know what it will be called, where it will be located, which agency will run it, or which users it will serve.

Does “direct reuse” refer to one large strategy – or is it an umbrella line item for many smaller strategies?  And if it is an umbrella reference, what is the threshold for including a strategy as a stand-alone item?  Region C lists two reuse strategies with no capital costs and a third with a capital cost of only $200,000.  If such inexpensive strategies warrant individual listing, why shouldn’t all strategies?

Conversely, if certain strategies are bundled into the umbrella “direct reuse” line item, why aren’t other strategies?  Why not collapse the third line item (“direct reuse – Frisco”) into the “direct reuse” line item?

The same sorts of questions would apply to fifth line item, which is for the equally vague “indirect reuse,” at a capital cost of zero dollars.  These questions arise from looking at a relatively discrete set of line items – reuse strategies in the greater DFW area.  Looking to other types of strategies, and in particular across regional planning groups, the confusion becomes that much greater.

Inter-Regional Inconsistency 

The RWPs reflect the hard work and commitment of a range of well-intentioned stakeholders, but because the planning process is so decentralized, there are inconsistencies and even conflicts from one RWP to the next.  Conservation – which along with reuse is due to receive a twenty percent set aside of Proposition 6 funds – offers an excellent example.

For Region C (the Dallas metro), Appendix A lists as separate items “golf course conservation,” “manufacturing conservation,” “municipal conservation – basic,” and “municipal conservation – expanded.”  But why are golf course conservation and manufacturing conservation not considered part of “municipal conservation,” especially since golf course and manufacturing water uses are often considered to be municipal uses?  See, e.g., 30 TAC § 297.1(32).

(In fairness to Region C, it at least explains the difference between “basic” and “expanded” conservation in the SWP: “A basic conservation package, including education, pricing structure, water waste prohibitions, water system audits, and plumbing code changes, was recommended for all municipal water user groups in Region C.  An expanded conservation package, including additional strategies such as landscape irrigation restrictions and residential water audits, was recommended for some municipal water user groups.”)

Similarly, why does Region C distinguish between “basic” and “expanded” municipal conservation while other RPGs like Region G (running along the Brazos River from Abilene to College Station) or Region F (situated in West Texas around San Angelo and Midland) only provide for “municipal conservation?”

Region H (covering the Houston area) has separate strategies for “municipal conservation,” “municipal conservation – small user group,” “”municipal conservation – medium water user group,” and “municipal conservation – large water user group.”  It is unclear how the generic “municipal conservation” strategy in Region H compares to the generic “municipal conservation” strategies in other RWPs that do not break down their conservation strategies by user group size.  And there is no telling how the user group conservation in Region H might stack up against the “basic” and “expanded” municipal conservation in Region C.

Likewise, Region H refers to “industrial conservation.”  Is this strategy comparable to the “manufacturing conservation” strategies found in the Region C and Region G RWPs?  Or are “manufacturing” and “industry” different?

There are many such incongruities.  Region G does not have a separate strategy for golf course conservation.  Does that mean that, unlike Region C, Region G does not plan to conserve golf course water usage?  And what is the reason that Region G has a separate strategy for “steam electric conservation” while Region C does not?  Is that because Region C does not intend to conserve through steam electric? Or because Region C has folded steam electric conservation into “manufacturing conservation?” Or because Region C (like Region K) views steam electric as a form of reuse rather than of conservation?

How are we supposed to interpret the Region J (covering Kerrville and Del Rio) strategies for “conservation: public information” and “conservation: system water audit and water loss audit?”  Is the omission of such specific strategies from the Region C and Region H line items in Appendix A an indication those regions do not intend to conduct conservation education campaigns or water loss audits?

Certainly not, but how is the TWDB to prioritize one strategy over another when the strategies are presented in such idiosyncratic fashion?

Regional Planning under the New Regime

We have predicted before that the Proposition 6 prioritization framework will lead to significant substantive (if not necessarily procedural) changes in the state’s water planning process and will probably force the SWP evolve into something sharper and more practical than it currently is.

But exactly what it will become is still up for grabs.  The TWDB could minimize its reliance on the SWP and RWPs by picking winners and losers among RPGs and then asking the RPGs to pick winners and losers among strategies.  Under this approach, the board would have little need to run inter-regional comparisons, at least through the context of the SWP, and the RPGs could continue to follow their own divergent practices.

Alternatively, the TWDB could learn about the merits of potential strategies through other, non-SWP channels (professional events, news coverage, etc.).  Just because the TWDB board members must work within the context of the SWP when making decisions about Proposition 6 funding does not mean that the TWDB has to rely exclusively (or at all ) on the SWP for information about strategies eligible for funding.

The fate of the SWP will depend in large measure on what becomes of the new prioritization process.  Under the most skeptical scenario, that process could become a political exercise that rewards strategies that have the best-connected backers. (The fact that the TWDB’s management of Proposition 6 funds will be overseen by a legislative advisory committee, as we have noted before, could have a significant influence over the dispensation of those funds.)  The prioritization process would simply serve as a smokescreen for traditional lobbying and advocacy, and the SWP would continue to function as a largely political document.

If, on the other hand, the prioritization process becomes a robust and technocratic method for equitably allocating funds to projects that are the deemed based upon objective criteria, then the SWP could serve as an important policy roadmap, with strategies that are presented more precisely and consistently in future iterations of the SWP.

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