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California infrastructure stressed by storms as chunk of $7 billion water bond goes largely unspent

A firefighter carries a woman from her car after it was caught in street flooding as a powerful storm moves across Southern California on February 17, 2017 in Sun Valley, California.
David McNew | Getty Images
A firefighter carries a woman from her car after it was caught in street flooding as a powerful storm moves across Southern California on February 17, 2017 in Sun Valley, California.

The latest storms hitting California have caused flooding, levee breaks, sinkholes and concerns about the state's dam safety.

Rain continued in some areas Tuesday even as a new storm was forecast to bring more rain next weekend.

The storms were the result of what's known as atmospheric rivers, which produced floods up and down the state and heavy winds that led to several weather-related deaths. There also have been broken levees and other stresses to the state's aging flood-control systems.

"You've got some levee breaks here and there but you always have those when you get heavy flooding," said Doug Carlson, a spokesman for the California Department of Water Resources. "The infrastructure itself is not compromised in a significant way, except for the Oroville [Dam spillway] problem."

Even so, money that could have been used to modernize the state's water infrastructure and build more water storage has been held up due to red tape at the state level that requires a lengthy regulatory and bidding process.

In 2014, California voters approved a water bond (known as Proposition One) that authorized about $7.45 billion in spending, but as of this week $7.39 billion had not been issued, the state Treasurer's office told CNBC on Tuesday. (The state clarified late Tuesday it is relying on commercial paper notes to get cash for Proposition One projects until a decision is made to sell bonds to pay off the notes.)

The state is still finalizing regulations for the water storage portion of the Proposition One state water funds and there's no firm date for when the first projects will be completed since several additional hurdles remain.

"It is a long process to go through," concedes Joe Yun, interim manager of the California Water Commission's water storage investment program. "The regulations had to include a lot of different things."

The state water commission has control specifically over about $2.7 billion worth of Proposition One funds, or what's known as Chapter 8 money for water storage projects that improve the operation of the state water system. Regulations were adopted in December 2016 for the Chapter 8 money and currently those rules are going through a review process before the state solicits applications for water projects.

Some lawmakers have been critical of the delays in putting the water bond money to work.

"Incredibly, the 2014 Water Bond was passed three years ago but there still isn't a single project listed on the state website to use the funds," said State Assemblyman Travis Allen (R-Huntington Beach, California). "It has been over two months since Proposition One money could be spent and still not one project is shovel ready."

Allen added: "With Jerry Brown's constant calls for 'shower cops' and telling Californians to kill their lawns one would think that the state would have broken ground January 1st. Instead of our state fixing our water system and capturing more of this valuable rainfall from the recent historic storms, Californians are now watching our dams crumble and trillions of gallons of water go down the drain thanks to Jerry Brown's inexcusable record of inaction."

CNBC reached out to Gov. Jerry Brown's office for comment. The governor's office forwarded a request for comment to the California Natural Resources Agency.

Agency spokesperson Nancy Vogel said it's inaccurate to suggest the Proposition One water bond money authorized by voters isn't being spent. She said in an emailed response there are funds being spent on projects around the state to make California's "water systems more resilient and reliable and help restore important ecosystems."

Still, she confirms the Chapter 8 money hasn't been awarded for projects. "Through a competitive process, the [California Water] Commission intends to award early funding for permitting and environmental documentation in 2018."

Meantime, repairs at Oroville Dam could exceed $200 million and it's still unclear if the federal government will help with the bill. The state has been repairing the damaged emergency spillway at the Northern California reservoir and also has to address the erosion problem on the dam's primary spillway.

The Oroville reservoir fell to 50 feet below its elevation capacity early Monday after water outflows since last week helped lower the lake's levels. The reservoir, the state's second largest, is expected to rise due to the rains but officials say it remains at safe levels from a flood-control standpoint.

Precipitation levels in the state's Northern and the San Joaquin Valley regions are now more than 200 percent of normal for the water year to date.

San Francisco topped its average rainfall for a full season as of Tuesday morning, coming after the latest series of powerful winter storms. And lingering showers were forecast for the Bay area into the evening, according to the National Weather Service.

Also, many of the state's reservoirs are far and above their historical averages for this time of year.

Shasta Lake, the largest single reservoir in California, is at 127 percent of its average capacity, and three reservoirs in the state were at more than 100 percent of capacity as of noon Tuesday — Antelope, Englebright and Pardee.

The Don Pedro Reservoir in Stanislaus County reached 830 feet elevation Monday, activating its spillway for the first time in 20 years. The reservoir remained at 828 feet Tuesday morning, with outflows continuing to go into the Tuolumne River and raising concerns of flooding in Modesto.

"They are trying to operate in a non-damaging stage to the town of Modesto," Mitch Russo, intelligence chief with the California Department of Water Resources' flood-operations center said Tuesday.

Lake Comanche, which is about 70 miles northwest of Don Pedro Reservoir, also was quickly filling up and could spill Wednesday, according to Russo.

Russo said no flooding was expected due to Comanche since the water outflows are not likely to exceed the current levels from the facility's hydropower facility. "They will back up off the powerhouse to zero and then let the spill occur," he said.

To the east, there were low-lying areas along the Coyote Creek in San Jose that were flooded and the city's fire and police were helping trapped residents with evacuations Tuesday. And further south, areas along the Carmel River in Monterey County experienced overflowing that led to evacuations.

In Central California, a levee breach in the town of Manteca in San Joaquin County forced the evacuation of several hundred people Monday night. It was still in effect Tuesday morning as crews worked to repair a levee on the San Joaquin River as rain continued to fall.

As for Southern California, Friday's intense storm dropped as much as 6 inches of rain in 24 hours in some areas and precipitation continued well into the holiday weekend. Tuesday also produced light rain in some areas of the region.

Major L.A.-area freeways and streets experienced flooding from Friday storm and crews over the weekend were still struggling to remove trees downed from the heavy winds. Fire crews also rescued motorists along flooded streets in several L.A. areas, including Sun Valley.

One death in the L.A. area was blamed on electric wires falling during heavy winds from the storm and another fatality occurred about 80 miles northeast in the Victorville area when a motorist became trapped during a flash flood.

A 30-foot sinkhole appeared in L.A. community of Studio City that swallowed two cars Friday night. Officials blamed it on a sewer line problem.

Finally, a mudslide in Santa Barbara caused Amtrak rail service to be suspended Saturday morning between San Luis Obispo and L.A.

Story updated to include response from California Natural Resources Agency, which commented on behalf of Gov. Jerry Brown's Office.