Chair Eloise Bennett convened Budget Subcommittee No. 4 to review the administrations multi-year spending plan for the water and coastal resilience portions of Proposition 4.

Andrew Hill of the Department of Finance and Joaquin Esquivel, chair of the State Water Resources Control Board, led presentations describing the administrations allocations and priorities for the bond. Esquivel said "these investments are really critical in order to maintain a level of access to water and affordability," and noted that the Water Boards portion for drinking water and wastewater in the budget year would be "a hundred and 83,000,000" dollars.

The Legislative Analysts Office told the subcommittee the water chapter is the largest share of the $10 billion bond, about $3.8 billion, covering 32 programs administered by nine departments, and recommended staged, multi-year appropriations and periodic legislative reports. LAO analyst Sonia Pedic said the administration proposes shifting some prior general-fund appropriations into the bond, citing specific backfills the LAO identified: $51 million for water recycling, $47 million for dam safety and $15 million for systemwide flood risk reduction.

Department of Water Resources Deputy Director Casey Shemke described programmatic emphasis within the governors proposal: water data and stream gauge reactivation, groundwater recharge and Sustainable Groundwater Management Act (SGMA) implementation, dam safety investments, Integrated Regional Water Management (IRWM), and flood protection. Shemke noted the budget includes $480 million for dam safety work and that about $10 million is proposed in the budget year for groundwater storage/recharge projects as a first-step program design year.

Committee members pressed administration officials for greater transparency on how bond funds will be prioritized and spent. Several members said they wanted regular, public reporting; LAO recommended requiring future, more detailed budget requests for new or restarted programs where guidelines must be created. Chair Bennett asked for a single public dashboard where the public and the Legislature could track allocations and expenditures.

The subcommittee also discussed the relationship between Proposition 4 and prior bonds and federal funding. LAO reminded members that Proposition 1 (2014) included $2.7 billion for public-benefit water storage projects and that a number of local storage projects remain in lengthy planning and permitting phases. The administration said the bond was designed to leverage federal funds where possible, and that some Prop 4 dollars are intended expressly to match federal projects.

Why it matters: the water chapter of Prop 4 funds a wide set of programs that affect drinking water access, wastewater and sanitation projects, groundwater sustainability, dam safety, recycled water and flood protection. Lawmakers pressed the administration for clearer timelines, periodic reporting, and assurances that bond funds will be additive rather than replacing existing state commitments.

Looking ahead: the subcommittee asked the administration to provide annual or interim reporting on awards and encumbrances, to copy committee staff on guideline development for new grant programs, and to outline specific multi-year appropriations that require early funding certainty for staffing or design work.