San Diego County Water Authority A Public Agency 3211 Fifth Avenue San Diego, California 92103-5718 (619) 682-4113 FAX (619) 295-2815 VINCENT F. BIONDO. JR. October 17, 1996 General Counsel JAMES J. TAYLOR Dt'r?urv Cuunscl TO: Director Bregante Director Frahm Director Hardebeck Director Krauel Director Leach Director Parker Director Russell Director Strode Director Thompson Director Throckmorton FROM: Vincent F. Biondo, Jr., General Counsel RE: County Water Authority Act Director Frahm hand-delivered copies of a letter dated October 17, 1996, and a memorandum discussing the County Water Authority Act at this morning?s MWD Delegates meeting. She asked that copies be sent to the City 10 Delegates and the officers, and they are enclosed. Ver truly yours 24C .7 F. JR. General Counsel VF B:ps Enclosure cc: Mark Watton Harold Ball I?l: . DOC MEMBER AGENCIES CITIES IRRI ATION DISTRICTS WATER DISTRICTS MUNICIPAL WATER DISTRICTS I Dei .3 COUXDU him-0'10 - - I 34' be." )cr? - Elmup dd Dmbv, I ~\in Pump I Year, Came Ila-urn? COUNTY . -- L. w; PUBLIC UTILITY DISTRICT FEDERAL AGENCY oily,- . ill-I H..- I Pym} Chris Frohm A?omey Law The Britt?Scripps House 406 Maple Street San Diego, CA 92l03 (619) 239-2626 FAX (619) 589?5523 October 17, 1996 Mr. Vince Biondo San Diego County Water Authority 3211 Fifth Avenue San Diego, CA 92103 Re: County Water Authority Act Dear Vince: Yesterday, at a meeting of the City's Water Cabinet, a question was raised regarding a memorandum discussing the County Water Authority Act, which I understand you have been shown. A copy is enclosed. The analysis is mine. It was not prepared by the San Diego City Attorney. I intentionally did not provide it to you. The reason I did not do so is twofold. First, as you can see, the memorandum is a simple analysis of the provisions of the Act, not a research memorandum. While I found it useful to have the issues organized this way, it doesn't add anything by way of legal authority. Second, and more importantly, I did not provide you with this analysis because I did not want to "politicize" the determination of this critical legal issue, or be criticized for attempting to exert influence over your legal opinion. As you, are well aware, I have not had a single conversation with you about voting or the provisions of the County Water Authority Act. I have also intentionally avoided discussing this issue with you although I am now aware that many other directors have done so. I am providing you with a copy of the memorandum now because two members of the City delegation, Rosalie Bregante and Mike Leach, and some of the City staff have requested that it be provided to you. It was Mike's feeling that the more information and analysis available to you, the better. In that vein, and with that same understanding, I will also provide you with the benefit of the very minimal legal research I did on what I considered to be the only significant question: October 17, 1996 Mr. Vince Biondo San Diego County Water Authority Re: County Water Authority Act Page Two Association for Retarded Citizens v. Department of Developmental Services (1985) 38 ?61.36. 384, 391 in interpreting the statute, the court determines that the administrative action under attack has, in effect, 'alter[ed] the statute or enlarge[d] or impairIed] its scope,? it must be declared Administrative action that is not authorized by, or is inconsistent with, acts of the legislature is void"); and, San Jose Teacher's Assn. v. Barozzi (1991) 120 Cal.App.3d 1376, 1383-1384 the court concludes that the administrative action transgresses the agency's statutory authority, it need not proceed to review the action for abuse of discretion; in such case, there is simply no discretion to I could not find any legal authority to support the proposition that the assessed value voting structure established in the County Water Authority Act could be made optional by any kind or form of administrative action. Please feel free to call me if you have any questions. Very truly yours, cc: City 10 Delegates George Loveland Mark Watton Harold Ball I. i - WW pafommpomp?wmmohhem. manhu?ym Whyudthromtboudofdimm Marcia-duty Dalian. Act moo. cm mum?. gem, Vol. 4w", Uncodi?adActsJ his theboml ?eunuch-I. (cwusam Mupruumivcis wammam, (CWAMGD. Warm I. Tum-Infant: (CWA ma? hi6?). ThoAdninimCodg?z7povidw m. Am?a?mofmm memCoummeWnyminh "011:1!!ka duneddispmedudzh. 3 "Adm-am Codc'or' .1. 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Sent by: .JetFax M5 18185631933; 05/29!98 #297;Page 2/10 MWD METROPOLITAN WA TEH DISTRICT OF SOUTHERN CALIFORNIA Sacramento Legislative Of?ce ?tn-tuningMay 29, 1998 To: MWD Board Members and Member Agency Managers From: Dale Hunter, Legislative Representativeg 16/ Subject: Amendment to Senate Version of Budget Bill Prohibition on MWD Reserves Senator Steve Peace (El Cajon) secured an amendment to the Senate version of the State budget bill (SB l39l) to prohibit Metropolitan from expending its reserves unless the Governor speci?cally declares that the district would be unable to carry out its responsibilities or until the Auditor General completed a ?nancial and Operational audit of Metropolitan. The amendment would also prohibit Metropolitan from collecting revenues at a level which adds to the reserves. Attached is a copy of the Senate budget bill amendment along with a fact sheet outlining the serious impacts this effort would have upon the ratepayers 01" Southern California. The Assembly budget committee did not adopt similar language which cans that this particular item will be the subject of the Senate and Assembly budget conference committee. The budget conferees will begin reconciling differences between the Senate and Assembly versions of the budget beginning on June 8. The budget conferees include Senators Mike Thompson (Nepal, Steve Peace (El Cajon) and Cathie Wright. (Simi Valley.) and Denise Moreno Ducheny (San Diego), George Runner (Lancaster) and Carole Migden (San Francisco). i 3"?31- WM 0 telephone: 550 'ZliUltt ins 111115) .144 Elli-l 1133:} 1'4 18185631933; 05/29/99 resemm #297;Page 3/10 Legislative Alert Page 2 May 29, W98 We cannot emphasize enough the seriousness of this amendment. We urge you to contact the Governor, the Senate and Assembly leadership, the budget conferees and members of your legislative delegation as soon as possible. A list of the legislative leadership and budget conferees is attached for your convenience. We would appreciate your forwarding copies of your correspondence to our of?ce as well. As a wholesale provider of supplemental water, Metropolitan?s water revenues are subject to signi?cant variability during wet and dry weather conditions. Metropolitan?s Board established the Rate Stabilization Fund to mitigate water rate increases in years where ?uctuations in sales otherwise would require signi?cant rate hikes. During the current ?scal year Metropolitan will drawdown $88.5 million from the Water Rate Stabilization Fund. Being prohibited from utilizing reserves in this manner will not keep Metropolitan?s water rates stable. Under current planning assumptions, Metropolitan forecasts that the full service untreated water rate will stay at the current level of $349/acrc foot until the year 2004. Treated water rates are predicted to remain at current levels until 2002. These forecasts assume the availability of moneys in the Water Rate Stabilization Fund, Pay-As-You-Go Construction Funds and other "reserve" funds. if Metropolitan cannot expend its reserves, it will be required to increase rates. Working capital reserves are essential to provide ?nancial stability during periods of revenue shortfall. While Mempolitan?s rates are extremely variable, about 80 percent of its costs (including payments to support the State Water Project) are ?xed. Please do not hesitate to contact our office if you have any questions or wish additional information. Thank you for your prompt attention to this matter. Attachments OPPOSITION TO AMENDMENT TO SENATE BUDGET BILL IMPACTING METROPOLITAN RESERVES The amendment to the Senate version of the budget bill would prohibit Metropolitan from expending funds from its reserves without a declaration from the Governor or upon completion of a state audit. The amendment would also prohibit Metropolitan from collecting revenues at a level which add to reserves. If enacted in the ?nal budget, this proposal would impair at least three separate covenants between Metronolitan and the holders of its revenue bonds, in violation of the United States and California Constitutions: Metropolitan is required to maintain reserve funds for the bene?t of bondholders. These reserves must be maintained at required levels and must be available for payment of debt service on the bonds - - without waiting for a declaration from the Governor. At the beginning of each month, Metropolitan must provide in the Operations and Maintenance Fund enough funds to pay all operations and maintenance expenses for the current month and the following month. These required reserves would be prohibited under the amendment. Under Metropolitan revenue bond resolutions, the Board must set rates and charges at levels which produce revenues sufficient to pay district obligations. And in setting rates and charges, the Board is required to make allowances for contingencies and error in estimates. But if those contingencies fail to occur, and if estimates are accurate, some excess revenues are likely to be produced . . . in violation of this amendment. This is a waste of taxpayer funds - - Metmpolitan?s ?nancial statements are already audited by outside auditors, and its financial condition and operations are disclosed annually and each time bonds are issued. In addition, Metmpolitan has an appointed internal Auditor who reports directly to its Board of Directors on audits conducted by his of?ce on ?nancial, compliance and OperatiOnal matters. Finally, the California State Auditor conducted a review of Metropolitan in early 1996 at the request of the Joint Legislative Audit Committee. in a report dated April 4, 1996, the State Auditor concluded: ?During our review of the issues addressed in the audits and evaluations of Metropolitan?s implementation of the recommendations they contained, nothing came to our attention that would merit further review at this time." Ratemaking is not an exact science. it is impossible for Men-cpolitan?s Board to set rates which recover exactly the amount necessary to recover expenses for the year, because actual receipts vary according to sales, which in turn are affected by weather, conservation and other factors. By prohibiting Metropolitan from collecting any revenues in excess of our requirements, the amendment will make the Board set rates too low - - without any allowances for variables, like the weather. which the Board cannot control. If the ratesetting assumptions are wrong, a shortfall in revenues will result. Metropolitan ?5 strong financial condition is a key factor considered by the rating agencies in rating State Water Project bonds (because Metropolitan pays approximately 63% of the Project?s bonded cousrruction costs). The amendment would undermine the credit rating of Metropolitan which in turn anchors the credit ratings of the California Department of Water Resources and Metmpolitan?s member agencies. Under the State Water Contract (SWC), if there is a shortfall in Metropolitan revenues so that the District is unable to pay its SWC obligation, the Board MUST levy a property tax or assessment suf?cient to provide for all payments under the SWC which are then due, or which will become due within the year. If the Board is not allowed to build an allowance for contingencies into rates, the result could be increased taxes for the citizens of Southern California. The prohibitions in the amendment continue until the Auditor General's ?nancial and operational audit of Metropolitan is completed. There is no deadline or expiration date. If the audit is delayed, these prohibitions could continue inde?nitely. San Diego County Water Authority A Public Agency 3211 Fifth Avenue 0 San Diego, California 92103-5718 (619) 682-4100 FAX (619) 297-0511 FLOOR ALERT SUPPORT SB 1765 The significance of the passage of SB 1765 to San Diego County cannot be understated. The quality of life for this region?s 2.8 million residents and the strength of its $87 billion economy depend on a reliable water supply reliability that will be severely threatened without this bill. 0 Funding from the bill will pay the $235 million needed to line the All American and Coachella canals in the Imperial Valley and to construct conjunctive use storage projects along the Colorado River Aqueduct. This funding is a contingency of the San Diego County Water Authority?s Memorandum of Understanding with the Metropolitan Water District of Southern California, which will help implement a water transfer agreement between the Authority and the Imperial Irrigation District (ND). The Authority-IID agreement will provide up to 200,000-acre feet of conserved agricultural water a year to the San Diego region well into the next century. However, the Authority-IID agreement cannot be implemented unless the Authority has a way to convey the transfer water to San Diego County; the MWD-Authority agreement is the way. Without this second source of water, San Diego County?s dependency on MWD as its sole supplier leaves San Diego?s economy and our quality of life at risk. 0 Keeping the Colorado River Aqueduct flowing at capacity is vital to meeting the supply needs of customers, and largest customer is the San Diego County Water Authority. This bill will help keep the aqueduct full and therefore help safeguard San Diego County?s water reliability: -- The canal linings will make available up to 97,000 acre feet of water annually to Southern California. The conjunctive use storage projects along the aqueduct would allow MWD to take delivery of and store Colorado River water in surplus years and draw upon it in dry years. As keys to the successful implementation of the California 4.4 Plan, the llD?Authorily transfer, the canal linings and storage projects will show California?s good faith and meaningful investment, which will help unlock additional surpluses on the Colorado River in the future. MEMBER AGENCIES CITIES IRRIGATION DISTRICTS WATER DISTRICTS MUNICIPAL WATER DISTRICTS - Del Mar Escondido National City Santa Fe South Bay - Holix Otoy - Carlsbad . Ramona . Ocoansido - Powoy Son Dingo - Vislo - Son Dioguiio . Olivonhuin . lincon dol Diobl Pedro Dom - Valley Center - Rainbow - Yuimo COUNTY . San Diego PUBLIC UTILITY DISTRICT FEDERAL AGENCY [on of?cial - Follbrook Pondlolon Rosanolion ?n an PM 01.8 203 4.3.3.) nuLcu 3-110. IUJ California Independent Pu 111?51} -- . The: Honorable To'rn Tonakson . Chain. Senate L?oc'ai: GOVemment State Capitol; Room 20.53. Sacramento, CA 95814 in3 350 (Alpert) Metropol?tan Water Districts STRONGSUPPORT - .. I Dear Senator Torlakson" The: Califormalndependent Public Employees Legislahve Council is irir strong support . Sheila of SB 3-50,. by. senate Alpert?- Which reqmres the:- Metropolitan Water District if.? Southern California to cap: the amount of revenue it?. can hold.- irt- reserve. Any fund's.? - i collected above thet amount [be automatiCally refunded to: Ifthe'. Metropolitans .. member agencies The bill IwotiId- proVIde MWD's Board members Complete . 'Idiscretion to: establish a reserve.- maximum. 'fo'r' operating purposes and payment of} I .I bond indebtedness and on?ld require when. that amount was: reached unless the -. Board deterinined that a reftind ?threatened .t'h'e'I district's ?soaIlI integrity - MWD's reserve funds for. operations and? hate: stabilization fUndS totaled apprommately - $630. million as: I'ofI Dec.I 31 200.0;- This. equates to?. _aIboii't. 65'. percent of the district's . I'Ian'n'ua't operating budget. of $965 million; Similar reserve: :funds: at otherc- comparable water agenmes total: between '10: percent and: I30 percent [of .th'e'i'ri annual .'IoI'p'er'ating '1 budgets Westland ..s :s Wa't'erI' District maintains 30 percent East B'ayI MUthIpal Utility. . 'II-Dist'rict'. maintains 20 percent. Kern County Water Agency maintains .1IDI percent 31111 - .. San Diego Water Authority. maintains 25 percent _.Ul ill-3*. 11.115 '3 Metropolitans largest member agency the Diego Water Authority pays 1" .- _i ITh?e authority-1's Share IcIi'f_ these over-collections could amount of $60 mitliori.- The 560' .niillion over-collected from San" Diego'- County ratepayers would if refunded .pay for .1 urge: your vote :on SB I350 that strikes a .cIaIrI'e'ful balance heMIIe'eIrIi.I A. I'I'tiIscal readiness and excesswe reserves fol" MWD . . Sincerely 1'in3an Keeslar - . - Executive Director "cc g'I'.IsSenatorDede Alpert . -- II . . II - .Se'na'te- Local GovemmentCommittee members - r. I Ij, ?-?I?GovemorGray Davjs . . I II Carbuccia .. - . . approximately 36 percent o'f: 'bill's though water purchases and other Icharges; .'rhore than two, months Icf water bills for the average San. Diego .hou'sehold W'e wuut. all.? Cub 76 0 Arm Municipal Employees 11mm 0/ State. manly. and Municipal Employees. 6L6 3237 (amino Ilia Small. 0 41/: Floor. San [1m 64 92103 9 Hanna (610) 0 Fat (019) 6412-8177 March 28, 2001 Honorable Dc De Alpert California State Senate State Capitol Building Sacramento, CA 95814 RE: SB 350 - Support On bebalfofAPSCME Local 127, I wantto eipress our support for SB 350. As you arewell aware, the bill will prevent future Metropolitan Water District over-collections ?om being imposed on our region?s ratepayers and to rctum the Metropolitan Water District?s aim-ant exorbitant mm to the bene?t of all ratepayers in the Metropolitan Water District service arm, of which SanDicgo would be the largest bene?ciary. The return of the over-collections no 11123311 Diego County Water Authority and. their largest member agency, the City of San Diego, would provide much needed funds for public work projects to We the reliability and e?iciency of the San Diego region?s water supply. Instead ofconsistendy overpaying the Metropolitan Water District, SB 350 would correct this injmtice and enable San Diego to use thse funds to better service the residents of the San Diego region. Muscletmknowiftbercis importantbill. . dwick Legislative A?irirs Representative AFSCME Local 127 cc: Willie Pelotc, Sr, CA legislative Director Tony Padilla, President, AFSCME Local 127 Ed Lehman, Business Representative AFSCME Council 36 i THE CITY SAN DIEGO April 16, 2001 The Honorable Tom Torlalcson, Chair and Membei?x, Senate Local Government Comm. State Capitol Building, Room 410 Sacramento, CA 95814 Dear Chairmnn Torlekson and Honorable Committee Members: RE: SB 35-0 - Support I On behalf of. the City of San Diego Water Department, I Want to express strong support for SB 350. In preventing future Wet-collections by Metropolitan Water District (MWD), this bill will provide ?rms for the much needed improvements to our local infrastructure. As the attached letter indicates, the City has continued to request that these over-collected revenues being retained by MWD, be returned to the local entities where the ratepayers can realize immediate and direct bene?ts. 1 As the largest. member of the San Diego County Water Authority which purchases the largest portion of MWD water, the enactment of this legislation will have a dramatic e?ect on our Capital Improvement Program SB 350 would have these funds remain where they are most needed, with the local entities. Please let us know if there is anything we can do to assistiin the passage of this important bill. Sincerely, Water Dcpartinent Director LGzpev Attachment Water Department 202 Slmt, M5 95 San Diego, CA lei (619) 236-6750 Fill (619) new? f1 1 EMERALD PLAZA SAN DIEGO 402 West Broadway. Suite REGIONAL . San Diego, California 92l0l-3585 CHAMBEROF Tel6l9.544. 300 6 April 13,2001 The Honorable Tom Torlakson. Chair and Members, Senate Local Government Committee State Capitol. Room 410 Sacramento, CA 95814 RE: SB 350 (Alpert)/Metropolitan water districts April 18, 2001 Senate Local Government Committee Agenda Dear Chairman Torlakson and Honorable Committee Members: On behalf of the San Diego Regional Chamber of Coimnerce, we would like to express our support for SB 350. This bill would require the Metropolitan Water District of Southern California (MWD) to cap the amount of revenue it can hold in reserve. The bill would require the return of surplus monies only after satisfaction of reserve needs, debt service and operating costs. including any additional energy costs. Any money collected above necessary reserves would be automatically refunded to member agencies. Senator Alpert has introduced this bill in response to concerns by the San Diego Association of Governments that the residents and businesses of the county paid tens of millions of dollars more than was needed by MWD. The San Diego Regional Chamber of Commerce shares this concerns and believes that these surplus funds should be refunded immediately. Many local water agencies have infrastructure or other funding needs of their own and have undertaken substantial capital improvement programs that must be funded by debt. MWD refunds would reduce the need of agencies to borrow at potentially higher credit rates and lower the retail cost of water or other services to the consumer. stance is unfair to ratepayers, especially in our region, where the share of the San Diego County Water Authority?s (CWA) potential refund could amount to $60 million. A refund would make that money available to water districts in the San Diego region for badly needed system improvements or distribution to residents and businesses. Therefore, on behalf of the Chamber, I urge your support of SB 350. Sincerely, Mm 32 Eugene 'tche Vice Pre ent, Public Policy EM:av cc: Senator Dede Alpert City of Carlsbad Office of the Mayor April13.2001 Honorable Tom Torlakson, Chair and Members of the Senate Local Government Committee State Capitol, Room 410 Sacramento. CA 95814 RE: SB 350 (ALPERT) METROPOLITAN WATER DISTRICT APRIL 18. 2001 SENATE LOCAL GOVERNMENT COMMITTEE AGENDA Dear Chairman Torlakson and Honorable Committee Members: The City of Carlsbad strongly supports Senate Bill 350. SB 350 would require the Metropolitan Water District of Southern California to limit the amount of revenue it can hold In reserve and automatically refund any excess collected above that amount to member agencies. The bill leaves Metropolitan's board of directors complete discretion to establish a reserve maximum limit for operating purposes and payment of bond indebtedness. but would require refunds when necessary reserves are exceeded except in cases where the board determines that a refund "threatens the district's fiscal integrity." This bill was introduced in response to concerns by the San Diego Association of Governments which believes that residents and businesses of San Diego County paid tens of millions of dollars more than was needed to Metropolitan. This bill is additionally supported by the San Diego Regional Chamber of Commerce and the San Diego County Water Authority who both believe that these surplus funds that could amount to $60 million for the region. should immediately be refunded to San Diego area taxpayers. As a San Diego County water provider, the City of Carlsbad has signi?cant infrastructure and capital improvement programs that are funded by debt. A MetrOpolitan refund could be used to reduce our debt load, which could result in a lower retail cost of water and other services for our customers, or even direct rebates for residences and businesses. The San Diego region?s share of these surplus monies, if refunded. would amount to more than two months of water bills for an average household in our area. On behalf of the City of Carlsbad. I urge you to support SB 350. Sincerely, CLAUDE A. LEWIS Mayor c: City Council I.- 1200 Carlsbad Viliaoa Drivn Earl-shad nu nun-us H.-- San Diego County Water Authority 300 Grand Avenue, Suite 1500, Los CA 90071-3125 53 08/28/98 1:46 AM 356 RN9820903 PAGE 1 Substantive AMENDMENTS TO SENATE BILL NO. 1765 AS AMENDED IN ASSEMBLY JULY 8, 1998 Amendment 1 In line 1 of the heading, strike out "Costa" and insert: Peace Amendment 2 Below line 1 of the heading insert: (Coauthors: Senators Kelley and Polanco) (Coauthors: Assembly Members Dav1s, Ducheny, Hertzberg, Thompson, Villaraigosa, and Wayne) Amendment 3 . . In the title, strike out lines 1 to S, 1nc1u51ve, and insert: An act to add Chapter 7 (commencing with Section 12560) to Part 5 of Division 6 of the Water Code, relating to the Colorado River Management Program. Amendment 4 On page 2, strike out line 1 and insert: SECTION 1. Chapter 7 (commencing with Section 12560) is added to Part 5 of Division 6 of the Water Code, to read: CHAPTER 7. COLORADO RIVER MANAGEMENT PROGRAM 12560. Unless the context otherwise requires;.the definitions set forth in this section govern the construction of this chapter: "Account" means the Colorado River Management Account created pursuant to Section 12561. "California Plan" means the plan being developed by the Colorado River Board of Cali?ornia, the public agencies represented on that board, and the director to ensure that California can live within the state's apportionment of Colorado River water. 12561. There is hereby created the Colorado River Management Account in the ceneral Fund. Notwithstanding Section 13340 of the Government Code, the sum of two hundred thirty-five u-N r??n 1_1mumnmunmn?H?HMMI San Diego County Waler Authority 08/28/98 1:46 AM 53356 RN9820903 PAGE 2 Substantive million dollars ($235,000,000) is hereby continuously appropriated from the General Fund to the account. without regard to fiscal years, for use in accordance with this chapter. 12562. (1) In furtherance of implementing and achieving the goals of the "California Plan," the sum of two hundred million dollars ($200,000,000) in the account shall be used by the director to finance and arrange for lining portions of the All American Canal and the Coachella Branch of the All American Canal. (2) The canal lining projects shall be completed not later than December 31, 2006, or such later date as may be required by extraordinary circumstances. (3) The allocation of the water conserved from the canal lining projects and to be made available to the Metropolitan Water District of Southern California shall be consistent with federal law and shall be determined by an agreement among the Metropolitan Water District of Southern California, the Imperial Irrigation District, the Palo Verde Irrigation District, the Coachella Valley Water District, and the San Luis Rey settlement parties, reached after consultation with the director and the United States Secretary of the Interior. (1) The sum of thirty?five million dollars ($35,000,000) from the account shall be used by the director to finance the installation of recharge, extraction, and distribution facilities for groundwater conjunctive use programs necessary to implement the "California Plan." (2) water stored in connection with the groundwater conjunctive use programs described in paragraph (1) shall be for the benefit of the member public agencies of the hetroPolitan Water District of Southern California. (3) Nothing in this subdivision limits the ability of the Metropolitan Water District of Southern California to enter into agreements regarding the sharing of any water made available under this subdivision. 12563. If the contingencies for a transfer to the San Diego County water Authority of the conserved water under the water transfer agreement entered into by the Imperial Irrigation District and the San Diego County Water Authority on April 29, 1998, have not been satisfied in full prior to December 31, 2005, any recipient of the water made available under the agreement described in subdivision of Section 12562, other than the San Luis Rey settlement parties, shall pay to the state, if required by statute, a portion of the funding made available under subdivision of Section 12562, in an amount to be determined by the statute. 72564. Nothing in the contract anticipated by the memorandum of understanding entered into on August 12, 1998, by the Metropolitan Water District of Southern California and the San Diego County Water Authority shall affect the authority of the Legislature to allocate, by statute, or reallocate water if the contingencies for a transfer of the conserved water to the San Diego County Water San Diego County Water Authority i 08/28/98 1:46 AM 53355 RN9820903 PAGE 3 Substantive Authority under the water transfer agreement entered into by the Imperial Irrigation District and the San Diego County Water Authority on April 29, 1998, have not been satisfied in full prior to December 31, 2006. 12565. The two hundred million dollars ($200,000,000) made available to the director pursuant to subdivision of Section 12562 may be expended solely for the lining of the All American Canal and the Coachella Branch of the All American Canal and only if all of the following requirements have been met: The Salton Sea Authority commissions a study of seepage and subsurface inflows to the Salton Sea from the All American Canal and the Coachella Branch of the All American Canal: and that study is completed. The study_shall determine the nature of subsurface and drainage canal water movements from the unlined canals to the Salton Sea and to existing adjacent wetlands, and shall quantify the amount of water that may be lost to the Salton Sea and to those wetlands due to the canal lining projects. The Salton Sea Science Subcommittee shall review the requests for proposals for the study and shall be consulted in selecting the contractor responsible for conducting the study. Environmental documentation and permits required by the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code), the National Environmental Policy Act of 1969 (42 U.S.C.A. Sec. 4321 et seq.), and any other applicable state and federal environmental laws are approved and certified for the All American Canal Lining Project or the Coachella Branch Lining Project. Pursuant to its responsibilities as a trustee agency under the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code), the Director of Fish and Game makes a finding that a canal lining project that is the subject of a request for funding pursuant to this chapter will avoid or mitigate all significant effects of the ;project on fisheries and other wildlife. The finding shall be .accompanied by a statement from the United States Secretary of the 'Interior certifying that measures for the replacement of incidental .fish and wildlife values adjacent to the All American Canal and the Zoachella Branch of the All American Canal foregone as a result of the lining of the canal, or the mitigation of resulting impacts on fish and wildlife resources from the construction of a new canal, or a portion thereof. meet the statutory requirements of Section P03(a}(2) of Public Law 100-675. These mitigation measures shall be .n an acre-for-acre basis, based on ecological equivalency, and hall be implemented concurrent with the construction of the canal ining project. SEC. 2. The sum of three hundred thousand dollars 55300,000) is hereby appropriated from the General Fund to the salton Sea Authority for the purpose of conducting the study sequired by subdivision of Section 12565 of the Water Code.