SUBJECT: EXECUTIVE DIRECTOR'S REPORT FOR JANUARY 19, 2017 WATER INFRASTRUCTURE IMPROVEMENTS FOR THE NATION (WIIN) ACT

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1 ITEM 2 Agenda of January 19, 2017 TO: FROM: Board of Directors Sacramento Area Flood Control Agency Richard M. Johnson, Executive Director (916) SUBJECT: EXECUTIVE DIRECTOR'S REPORT FOR JANUARY 19, 2017 WATER INFRASTRUCTURE IMPROVEMENTS FOR THE NATION (WIIN) ACT On December 8, 2016, the U.S. House of Representatives passed the Water Infrastructure Improvements for the Nation (WIIN) Act, which includes the Water Resources Development Act of 2016 (WRDA 16). Though the overall bill is called the WINN Act, Title I (only 30 percent of the total text) will be known as WRDA On December 10, 2016, the U.S. Senate passed the bill. The President signed the bill into law on December 16, Section 1401 of the bill did include an authorization for the American River Watershed Common Features work identified in the Common Features General Reevaluation Report (GRR). The authorization was for $1,595,761,000, which is the largest authorization for a SAFCA project to date. Section 1166 of the bill included the SAFCA requested language on the transfer of excess credits from one project to another project. The intent of the language is to facilitate the use of excess credits from Natomas to the non-federal share for the Folsom Dam Raise or for the GRR construction in the future A SIGNIFICANT YEAR FOR SAFCA Calendar Year 2016 was one of the most significant for SAFCA ever. Two major U.S. Army Corps of Engineers (USACE) projects were completed and another one is operational if needed. The USACE received a new construction start and is proceeding with their first construction contract on another. Congress and the President authorized a significant amount of additional work. SAFCA entered into an agreement with the State of California to provide funding for the Levee Accreditation Project. SAFCA also entered into an agreement with United Auburn Indian Community laying out the principals for working together on these projects. SAFCA is proceeding with the first construction contract for the Levee Accreditation Project. Additionally, the property owners approved a new assessment to cover all the additional work required to provide this community with an acceptable level of flood risk reduction. Based on that new assessment, SAFCA successfully sold bonds to provide the funding to move forward with project implementation. More details on each of these follows.

2 Page 2 South Sacramento County Streams Group The project was originally authorized in 1999 to address the potential for flood risk from some of the streams passing through South Sacramento and to address the potential of flooding from the south should there be a levee breach in the Delta. The last phase of the project was essentially completed in Both the USACE and SAFCA constructed portions of the project. There is some closeout work still to be accomplished. This completed work will allow the remaining homes that are still mapped in the FEMA 100-year floodplain to be removed from the floodplain mapping. A ceremony will be held in SAFCA s Florin Creek Detention Basin

3 Page 3 American River Watershed Common Features - American River This project was originally authorized in 1996 and additional components were authorized in The project consists of bringing the levees on both sides of the American River up to the current design standards for seepage, underseepage and stability. The final phases of work were completed in early There is some closeout work still to be accomplished. On April 8, 2016, the USACE held a media event on the American River levees near Howe Avenue celebrating completion of the work on the American River levees authorized in 1996 and American River Cut-off Wall Construction

4 Page 4 American River Watershed - Folsom Dam Modifications This project was originally authorized in 1999 and is commonly known as the Joint Federal Project (JFP) as it is being constructed jointly by the USACE and the U.S Bureau of Reclamation. Folsom Dam is the backbone of the flood control system on the American River. The JFP consists of constructing a new dam and spillway with gates located much lower in elevation in the reservoir. This will allow releases from the dam to match the downstream levee capacity much earlier in a flood event, making the flood space available at Folsom Dam much more efficient. While project completion will occur in 2017, construction has progressed to the point where if we had an emergency situation, the new spillway could be utilized now. Folsom Dam Joint Federal Project

5 Page 5 American River Watershed Common Features - Natomas Basin The Natomas Basin is completely surrounded by levees. It has 42 miles of levees that protect it from flooding. The project consists of reconstructing all 42 miles of levees to bring them up to the current design standards for seepage, underseepage and stability. SAFCA, with funding from the State, reconstructed 18 miles of the levees starting in In 2014, there was a Federal authorization for the USACE to complete the remainder of the work required to have the levees around Natomas brought up to current standards for seepage, underseepage, and stability. The Federal Fiscal 2016 USACE Work Plan included $11.0 million in construction funding for Natomas to be combined with $21.15 million in the President s Proposed Budget for Fiscal Year 2017 to allow the USACE to initiate construction of their portion of the project. Congress included a caveat for the construction funding for Natomas - a cost share agreement had to be executed by August 31, 2016 or the funding would go to another project that is ready to start. The Project Participation Agreement (PPA) was executed at a signing ceremony on August 18, In order to advertise the first contract, the USACE needed to wait until Congress passed some type of funding bill for Federal Fiscal Year The Continuing Resolution bills passed provided sufficient funding to allow the USACE to award the first construction contract, with construction expected to begin in Natomas PPA Signing Ceremony

6 Page 6 American River Watershed Common Features - General Reevaluation Report In 2016, Congress and the President authorized American River Watershed Common Features work identified in the Common Features General Reevaluation Report (GRR). The USACE looked at the work being accomplished by all the flood risk reduction projects already authorized, and then looked at what else needs to be done to the system protecting Sacramento to bring it up to current design standards for urban areas and to provide at least a 200-year level of protection. The project will include reconstructing levees along the east side of Sacramento River south of the American River and levees in the North Sacramento Area to bring them up to the current design standards for seepage, underseepage and stability. Additionally, the project will include erosion protection in the river channels themselves to prevent the river banks from eroding into the levee sections during large flood events. The project will also include widening the Sacramento Weir and Bypass to allow more of the flood flows to be carried through the bypass system, reducing the stress and need to raise levees along the mainstream of the Sacramento River. Back in the 1990 s, the USACE looked at several comprehensive plans for addressing flood-risk reduction in the American River Watershed. For political reasons, a comprehensive plan was never authorized. Over the years, various components have been authorized as the circumstances allowed. One of the alternative comprehensive plans presented to Congress in the 1996 American River Watershed Investigation Supplemental Information Report was the Stepped Release Plan. Now that the GRR work has been authorized, all the components of the 1996 Stepped Release Plan are finally authorized, as shown in the table on a subsequent page. Also, the following graphic shows how all parts of the system are being addressed by one of the authorized projects.

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8 Page 8 Stepped Release Plan Component (American River Watershed Project Supplemental Information Report 1996) Folsom Dam Outlet Modifications Lower crest of main spillway Extend stilling basin Enlarge existing river outlets Folsom Dam Modified Surcharge Storage Replace main gates Replace emergency gates Modify surcharge storage operation Modify operation of Folsom Dam Replace SAFCA/USBR variable space operation with permanent Corps variable space operation Current Project Covering Component American River Watershed Folsom Dam Modifications Project (Authorized in 1999 Modified in 2007 to change to Joint Federal Project) New dam and gates lower in reservoir New spillway extending to river American River Watershed Folsom Dam Raise Project (Authorized in 2004)(Modified by Corps in 2007) Replace main gates Replace emergency gates Raise dam to increase surcharge storage Modify surcharge storage operation Permanent bridge at Folsom Dam American River Watershed Folsom Dam Modifications Project (Authorized in 1999) Replace SAFCA/USBR variable space operation with permanent Corps variable space operation Lower American River American River Watershed Common Features Project Lower American River (Authorized 1996, 1999, 2004) Levee stability, seepage, strengthening Levee stability, seepage, strengthening Raise existing levees Raise existing levees New levees and floodwalls New levees and floodwalls Incorporate non-federal levees Incorporate non-federal levees Modify utilities Modify utilities Bridge modifications Lower American River American River Watershed Common Features Project General Reevaluation Report (Authorized in 2016) Riprap existing bank and levees Riprap existing bank and levees Natomas American River Watershed Common Features Project Natomas (Authorized in 2014) Levee stability, seepage, strengthening Levee stability, seepage, strengthening Downstream from American River American River Watershed Common Features Project General Reevaluation Report (Authorized in 2016) Modify Sacramento Weir and Bypass Modify Sacramento Weir and Bypass Downstream from American River American River Watershed Common Features Project General Reevaluation Report (Authorized in 2016) Hydraulic mitigation Non-Federal Sponsor to handle hydraulic mitigation Increase Objective Release from Folsom Dam American River Watershed Common Features Project General Reevaluation Report (Authorized in 2016) and American River Watershed Folsom Dam Modifications Project (Authorized in 1999) Stepped release 115,000 cfs to 145,000 cfs to 180,000 cfs 115,000 cfs to 160,000 cfs

9 Page 9 SAFCA Levee Accreditation Program (LAP) As a result of the USACE withdrawing its levee accreditation in August 31, 2013, SAFCA has been pursuing its own efforts to accredit the levee system. This effort is focused on the levees outside of the Natomas Basin and consists of the levees along the east side of the Natomas East Main Drainage Canal/Steelhead Creek including Arcade Creek Levees, Robla Creek South Levee, Dry Creek North Levee; American River Levees; the Sacramento River East Levee from the Mouth of the American River to Freeport; and the Beach Lake Levee. SAFCA completed the Levee Accreditation Program evaluation and reached the following conclusions: up to 8 miles of the Sacramento River East Levee, including the Pocket and Little Pocket areas, do not meet embankment and foundation stability requirements; up to 4.0 miles of the levees along the north and south banks of Arcade Creek do not meet embankment and foundation stability requirements; up to 3,000 feet of erosion sites on the Sacramento River East Levee need to be repaired or monitored; and other issues including unacceptable encroachments, affecting all of the levee segments to varying degrees, need to be addressed to allow accreditation of these levee segments. As a result of the investigation, it is recognized that corrective action will need to be taken in order to bring the area levees up to Federal Emergency Management Agency (FEMA) and State standards. The work identified is also part of the work authorized in the American River Watershed Common Features Common Features General Reevaluation Report. SAFCA and its consultant teams have been actively advancing the LAP since June Even though the USACE just received authorization to implement the project, it could be several years until the project would be eligible for Federal construction funding. At the November 2016 SAFCA Board meeting, the Board approved proceeding with advertising the North Sacramento area project work. Pre-construction activity, which includes the removal of vegetation/trees located within the project footprint, is anticipated to be completed by the end of January 2017, prior to the start of bird nesting season. SAFCA expects to get levee construction underway in early spring The work along the Sacramento River is expected to follow in 2018 and State of California Urban Flood Risk Reduction Agreement In order to move forward with construction of the Levee Accreditation Program, SAFCA needed funding support from the State of California. The California Department of Water Resources (DWR) has been advancing the Urban Flood Risk Reduction (UFRR) Program. SAFCA identified a need for funding to implement its Levee Accreditation Program and executed an agreement with the State under the UFRR program. SAFCA estimates that the cost of the LAP improvements needed to meet Federal 100-year levee accreditation standards and State 200-year urban level of flood protection standards will be $166 million. Under the UFRR agreement, the State will provide up to $112 million. It is anticipated

10 Page 10 that a portion of the improvements required to complete the LAP would not be eligible for State Cost Share under the UFRR Program Funding Guidelines. United Auburn Indian Community Agreements In July, 2016, SAFCA and the United Auburn Indian Community (UAIC) entered into agreements identifying procedures, protocols and processes to identify, protect, avoid, monitor, and treat Tribal cultural resources in a culturally appropriate and respectful manner. The Agreements consist of a Memorandum of Agreement, a Tribal Monitoring Agreement, and a Burial Treatment Agreement. While the agreements were specific to the Levee Accreditation Program, it sets up how SAFCA expects to work with UAIC on all future projects. Consolidated Capital Assessment District No. 2 Since SAFCA formed the Consolidated Capital Assessment District (CCAD) in 2007 to fund its share of the capital improvement projects, there have been significant changes in Federal and State flood risk management standards and guidelines largely in response to Hurricane Katrina that have required significant adjustments to the capital improvement projects. These changes in the scope of the projects are expected to increase SAFCA s required contribution over what was anticipated in Additionally, the annual operations and maintenance costs have increased and the State and Federal required levee modernization work were not covered by the CCAD. In June 2016, the CCAD was replaced by the Consolidated Capital Assessment District No. 2 (CCAD 2). CCAD 2 will provide sufficient funds to pay for these additional costs as well as refinance outstanding CCAD bonds. Consolidated Capital Assessment District No. 2 Bond Sales As a result of the formation of the CCAD 2, the agency was in a position to take advantage of historically low interest rates and sell bonds. The purpose of the bond sales were to pay off the bonds previously sold based on the 2007 CCAD and to raise funding for projects anticipated to occur over the next three to five years. Even though the election threw some initial uncertainty in the bond market, we were able to sell bonds at a total cost of $312,663,174.55, which included all the costs to sell the bonds, to pay off the existing bonds, and all other required costs. This resulted in $109,417, of funds for project implementation. RJlr/Final ED Report Jan docx