next on "kqed newsroom" -- dying orchards, parched fields. >> we've got good years and bad years. this is -- i call it the worst years. this is really bad. >> california's extreme drought and the future of the state's water supply. good evening and welcome to "kqed newsroom." i'm thuy vu. >> and i'm scott shafer. california desperately needs rain. the drought that began in 2011 has grown worse every year since. >> and if you have any doubt about the drought's impact, take a look at these pictures. this was folsom reservoir in 2011, and this is what the reservoir looks like after three years of drought. this is like oroville in 2011,

and this is what the lake looked like last year. and this is what the snowpack looks like in 2013. and this is what it looks like just a year later. state officials say the sierra snowpack is near record lows and any late season rainfall won't have much of an impact. in the central valley farmers are watching their crops wither and ranchers are selling off cattle to pay for hay to feed their remaining cows. >> i've got to sell more cattle so i can buy more hay. >> so the herd gets smaller and smaller. >> and i'm getting poorer and poorer. >> farmers who are able to are drilling wells pumping water from reservoirs deep underground to save their crops. but the water levels in those reservoirs, known as aquifers, is dropping. and in some areas the ground is sinking as a result. >> to what extent do you feel like we can only punch so many holes and pull out so much water before we really start seeing huge problems? >> well, i mean we're to that

stage right now, i think because the deeper you go on some of this you're losing out on water quality too. you're going to get down so deep and the water's going to start getting salty on you. >> some california counties are looking to the ocean to shore up their water supplies. in san diego construction crews are finishing a $954 million desalination plant that will turn seawater into fresh water. >> because the pacific ocean is not dependent upon snowpack or rainfall, it's always going to be there. the largest reservoir in the world for that matter. so here we have a truly droughtproof supply. >> the plant is scheduled to run tests this spring, and water officials hope it will be up and running next year. 15 more desalination plants are proposed for up and down the california coast. throughout the year we'll be examining the effects of the drought on california. >> tonight we're talking with people who are dealing directly with the drought's impact. bo goldie, chief executive of the santa clara valley water

district. phylicia marcus, chair of the state water resources control board. and paul wenger a farmer and president of the california farm bureau federation. thank you all for joining us tonight. phylicia, i wanted to begin with you. how bad is this drought? are we going to run out of water? >> well, it's the most horrendous drought that any of us have seen and certainly that our parents or grandparents have seen. we've had years where you can quibble over whether there was less water but the fact is since the last time there was this little water we have millions more people, we have more irrigated agriculture dependent on each drop of water precisely because agriculture has become far more efficient and has produced a miracle of food and fiber with the water they have. >> and of course we don't know how long it's going to last. >> we don't know how long it's going to last. we have more threatened and endangered species who don't have the resilience to weather it and we absolutely don't know how long it's going to last. australia had one that lasted over a decade after thinking they were in a three-year drought. >> some researchers are predicting that california may

run out of water in a year. what do you think of that? >> well i think it's hard to say. i mean we have used a lot of our water, and i've heard some of the stories. it really depends on where you are. i mean every area of california has a different mix of water sources. some have their own imported water that they take hundreds of miles like the san francisco bay area or l.a. has their owens valley supply. others are dependent on the state and federal water project in whole or in part. and that's had a dismal few years. and other people are fortunate enough to be over a groundwater basin that's flush and others have no groundwater at all like san diego, which is why they need to invest in desal in such a big way. >> paul, you're an almond farmer in modesto. and of course we've been seeing lots of almond trees being planted throughout the central valley. they're very lucrative. but unlike, say, row crops tomatoes and fruits and other vegetables, you can't lay them fallow for a year. you have to water them or the trees die. so what would you say to critics who say farmers are really kind of hardening their demand for

water because once these trees are in the ground you can make a good argument we need the water we can't just let them die, that would be a terrible waste. >> yeah, we have seen a transition for some of the seasonal crops to more of the perennial crops, although i would say that a great majority of the investment that we're seeing today going into permanent crops is not farmers. they're investors. we have investors coming from all over the world all over the country, all over the state. i farm 150 acres of almonds. there's a lot of folks in your viewing area that own a lot more almonds than that. and yet if the price of almonds were to go down by half it wouldn't affect our lifestyle at all. to me it would change my lifestyle altogether. we are seeing a lot of investment into the permanent crops now from outside investors. >> there was a ppic report, public policy institute of california showing that 50% of the water in california supports 1% of the economy which is agriculture. is that sustainable? >> well, i guess at the end of the day we hear that a lot from folks. they say it's only going for food so, should farmers be using that water? who is really using that water?

it's the consumer. and so one of the very basic things in the high-tech industry where bo is from and you start looking about what their gross domestic product is it's huge. but every one of those people eat three times a day. where is that food going to come from? it's ironic that we talk about buy your food local. in california we're the sixth largest agricultural economy in the world. we're feeding not only our state and the country but a good part of the world. we do that because we've been able to manage our water resources. >> bo let's turn to consumers for a moment. last week your district, the santa clara valley water district, proposed a 31% rate hike saying that costs associated with the drought including lost revenue from conservation made it necessary. this week you dropped that proposed rate hike down to 19%. but a lot of people are still unhappy. they feel they're being punished for conserving water. what can you tell them? >> well, we really appreciate those who have taken the effort to conserve water and we need

that to continue. we still need to be able to bring in the supplies for santa clara county and the community up there. it costs to be able to bring in this water. this last year, the last few years we actually have been taking those extra costs and actually been cutting budgets, reducing it so we can absorb those over the last few years of the drought. this current year the one we're working on right now is actually looking at about a $60 million cost associated with it. some of that is lost revenue about 21%. the remainder is purchasing water. the water conservation programs we have in place, doing outreach bringing water that we have stored in the bank in southern california, bringing that up, and using that water. and we've actually made reductions to absorb most of that cost. the increase is only about $27 million. >> but there's no real incentive for consumers to conserve is there? because everybody across the board is paying more whether or not you save water. >> right. well, those actually that

actually conserve actually save money by conserving water. what we're actually funding is incentives to replace -- like lawns. we spent last year about $10 million just to replace turf. that's a permanent solution. in santa clara county it's been about 70 acres of lawn that has been replaced in this last year. >> there are those who will argue that agencies such as yours should do a better job of controlling your costs and therefore these rate hikes wouldn't be necessary. as you know, there have been county civil grand jury reports in the past that have been critical of the way your agency spends money also critical of high salaries for top executives including yourself. you make about $300,000 a year. >> right. >> how do you respond to that? >> well, if you look at what the organization has done in terms of the cost, this is what i refer to. $60 million in costs. we have reduced the organization's costs and been able to address that down to $27 million. the $27 million is that rate.

we're still looking. we haven't set the rate. we're down to about 19%. our board is taking us further to see how we can further reduce costs. when you look at the salaries, for example, mine has been in the news i really appreciate that the board has recognized the extra effort and the responsiveness and the aggressive pursuit of conservation in managing this drought, but when you look at $470 million budget for this organization my salary increase is not driving the rate. it is really the cost of water. the conservation programs we've put in place is really driving the cost. >> phylicia, next week your organization or board is going to be considering new controls on lawn watering, restaurants serving water and maybe requiring them not to give it unless the customer asks. those kinds of things. given the severity of this drought, a, isn't that the kind of thing that maybe should have been done in retrospect last year or the year before and wouldn't it make more sense to just have mandatory rationing?

>> well it's an interesting question. water historically in california has been managed very locally because every community has a different mix of water sources. last year because the governor gave us the authority emergency regulatory authority we were the first state in the country to ever do conservation regulation statewide. and our goal has been to leverage more action at the local level, not to stand in the shoes of thousands of local water agencies to make decisions. what we've been trying to do is to make clear that there are certain things that aren't okay and that certain things go to the level of being wasteful and -- >> like what, for example? >> like watering your lawn so much, that it runs off into the street. >> what's the penalty for that, though? >> well it's a range. again, enforcement in these things -- i came out of local government as well years ago in los angeles. is it's progressive enforcement. if you go out and talk to people it helps make a big difference and then you can escalate it up. and we added a $500 fine, which got a tremendous amount of news,

not because we thought a $500 fine was the way to do it but because we were trying to enable local authorities to use that as a tool if they need it. >> how many people have been fined $500? >> i'm not sure. i was asking for that in the new regulations because we want to know what enforcement actions people are taking. we want people to go further if we need to. our hope is local agencies are going to heed the call and take more action. and a number of them in this fourth year drought have it on their agendas in the next month or two but we're already preparing for what the next phase will be. >> speaking of local agencies beau, why is there no mandatory rationing in any silicon valley city? >> what you're looking at right now, and phylicia's correct, different communities have different water supplies. for example, in our county we have this large groundwater basin. we've been managing that to get us through drought. going back to the fines, what we put in place and one of the costs we put in place is water waste inspectors.

so we put together mechanisms so people can actually report if they see a condition where somebody's wasting water. now, we don't run in and find them right away. what we will do is go in and educate them. what we find is most people once they get educated are made aware of it corrective behavior. and that's what we're looking for. >> is there some kind of a psychology to rolling out conservation conservation? in other words, you can't roll it all out at once. last month or in january people were using more water again. so they've forgotten the message. because it rained a little bit in december. what's the psychology of it? how do you strategize so that the messages and the the steps you're taking are effective? >> one of the challenges is people turn on the tap and water comes out. they don't know where it comes from. they're very busy all day long getting the kids to school. it's hard to break through that. one of the programs we've put in place is brown is the new green. and that goes to lawns because we're asking people to not water, lawns go brown. but by having a sign on the front of your lawn we have found

that they then reflect that wow, that's the community thing. that's what we should be doing. then those that have green lawns start to change their behavior a little bit. and that has been very effective. >> so shame, you're saying. >> raising consciousness. >> it's wanting to be part of a community. i years ago rolled out large-scale recycling programs, and a lot of people said oh no one's going to want to be inconvenienced. and i found quite the opposite. people really do want to be part of their community. but as beau said they lead very busy lives. they don't know. and agencies have done an incredible job conveying water over hundreds of miles to get it to them. and so it comes out the tap. and so the trick is that local agencies need to be stepping up because they're the ones in relationship with their communities. >> we're talking a lot about urban users. but paul we wanted to turn to you for a moment because farmers use 80% of the water that people use in california. urban areas use about 20%. what do you say to people in areas like the bay area, sacramento, southern california

who feel like it really doesn't matter how much they conserve because no matter what the farms will always use more than them? >> yeah i think that 80% figure gets thrown around a lot, and maybe you're talking about developed water, but i know city of san francisco, modesto irrigation district, which is my irrigation district, turlock irrigation district together own the don pedro reservoir. that was built and as farmers we had to pay for our part of that reservoir. a bond of indebtedness just like huh to pay your property tax. there's more and more of that as water is being released for the environment we don't get to use. we built the reservoir. the public didn't build the reservoir. the city of san francisco and the farmers in modesto and turlock built the reservoir. but now because of regulations we're having to release water for fish and we're not going to use that water but yet because of the story behind that reservoir they're saying oh that's stored water that agriculture is using but yet we're having to use it, you know, for environmental purposes. and so we're having a restriction this year, 16 inches of water that we never had. we went through six years of drought from '88 to '93 no

restrictions. we were restricted to two feet plus you could buy more. we take about 30 or 36 inches of water to grow our crops in an average year. that can depend on your soil type and your crop. >> what have farmers been doing to conserve water? i hear that all the time. we're much more efficient than we used to be. but what steps have been takeen? >> we are more efficient. microirrigation with use more flood quarter than irrigation not less. a lot of our tomato producers go on buried drip so they can actually use more water, will actually use more water but they're getting more pounds of tomatoes, so they're getting more pounds of product per gallon. so that's efficiency. we are seeing though where we're going into a lot more permanent crops because that's what the world demands. i mean, we're not only marketing here in california, in the united states but we're producing food for the world and they want those products. >> what would you say to critics who might say yeah, those almonds are going to china and they're very profitable and there's a huge demand over there but look what impact it's having here in california. >> not only that but the amount of water it takes to grow nuts.

it takes about a gallon of water to grow a single almond, nearly five gallons to grow a single walnut. does all the water it takes to grow all those nuts, is that outweighed by the economic factors? >> that water is recycled. that water isn't being shipped overseas. how much do we import from around the world? everything has a water component. we are importing far more water than we're exporting our agricultural products. >> but you can't drink it. >> you can't drink it. but that was still take water someplace in the world. we're a world economy. and so we're importing everything -- you go into your stores, most of it's coming from china and other parts of the world. every one of them had a water component. everything. >> but might we get to the point where we say you know, what given we're in the fifth, sixth seventh year of a drought we just can't do it? >> i think people want to jump to a simple answer. and i want to elaborate on what paul was saying that whether it's 80-20, 70-30 developed water or different math think it's an artificial distinction where people want to point to

someone else. i think farmers in california are growing food and fiber that helps people. it does something productive. people in urban areas, again, as disconnected -- this is no judgment on them. they're disconnected from where their water comes from because we've had a system that they can turn the tap on and water comes. it's a miracle. it's one of the defining characters of our civilization. they also take for granted where their food comes from. and the water content of their everyday life. i think many californians in urban california are far por more connected to a farmer in the central valley than they are to their next-door neighbor who's running a hose on their lawn and wasting water but they just don't know it. and i think the fact is that as the future comes we're going to have to figure out how to be more efficient and use water more times. in urban areas there's just a lot more you can do. again, as long as people are wasting water, watering lawns they don't even think about or don't play ball on with the little kids i think picking on almonds doesn't make a lot of

sense frankly. >> are there lessons in efficiency that you have learned from previous droughts and also what has happened in other countries? phylicia, you mentioned australia had a ten-year drought. what have we learned from that and what can we put in place here in california? >> thank you for asking. there's a lot of lessons to learn from australia and a lot of lessons to be learned from parts of california. i mean, we actually because we deal with water in such a fragmented way, there are incredible opportunities for more efficient use. conservation one is of course with fixtures, appliances, changing out lawns. just the practice of using water to hose something down when you can use a broom instead. there's plenty of that. but also recycling. water recycling such as work that's being pioneered at santa clara water district and my former city of los angeles and orange county and san diego and many countries, other countries. we can recycle water over and over versus taking highly treated water, using it once,

sending it to a treatment plant and then trying to get it to the ocean as quickly as possible. we can use that water over and over again as they do in australia in places or in israel. and then they also have storm water capture, which is increasingly -- l.a. has grand plans to capture the water they've been shunting down their flood control districts and create green space infiltrated into groundwater. >> and you have waste water recycling in the santa clara water district. >> let me go back to lessons learned. the last drought was around 1991. we instituted about 22 different conservation programs from low flow toilets to turf replacement, et cetera. and you can see that over this period of time to where we are today there's been a 25% growth in population using the same amount of water. there hasn't been an increase of demand. you talk about purified water. currently i think the future, at least it's the future for santa clara county is to take the recycled water, treat that to a much higher quality level, that

gets to the point you can actually drink it. but our plan is to put that into the groundwater basin which is really where all the various wells are. that will help prevent subsidence which is a sinking of the ground surface, and that's really a very efficient and effective mechanism to do that. >> what is your sense i'll ask any of you how much more room is there for conservation? because as you said we've gotten much better. we're much more efficient than we were in '91. >> there's a lot more room for conservation. we haven't changed out all the toilets to low flow. appliance standards for dishwashers and washing machines have become much more efficient if you put new ones in and then you only use them when they're full. again changing out lawns, the reason we focused in our regs on outdoor irrigation is people don't realize 50% of residential water use is outside frequently on a lawn that just came with the house that people are overwatering. that's pure waste. >> and there are still places in california where there's no water meters. sacramento area fresno. i mean, how can that be?

>> it's interesting. i just want into thear jekt a little bit to interject a little bit. storm water capturing, water recycling, where we can reuse the water multiple times. we talk about conservation for a growing country a growing state and growing world. when are we going to talk about increasing the supply? because how many of us today would like to say you know what we're not going to be able to make another dollar the rest of our lives whatever we have in our bank account, whatever we have invested in our homes or anything we're going to have to get through until we live to a ripe old age, we're going to have to conserve? don't we want to add to our bank account? but yet in california we have not added to our bank account. los angeles has. the one area of the state that's the driest area of the state has invested in infrastructure. diamond valley reservoir. and the rest of the state was complaining because l.a. didn't realize they were in a drought last year. but they invested in infrastructure and we have not. >> i want to come back to the water meter question. but in terms of water storage i mean, prop 1 passed and that's going to include some water storage capacity but that doesn't really help you in a year -- in a drought right? you have to have rain to store

it. >> it allows you to store more during the wet years. and storage means a lot of things. it means surface storage. it means groundwater storage, which is why historic groundwater legislation was passed last year. it was very controversial. but we see the loss of snowpack as something that's going to become more regular under climate change. and the groundwater basins are the only thing of the size that can actually compensate. but it actually means small storage all over the place. the diamond valley reservoir $3.5 million california paid to build that reservoir and then they put water in it during wet years and built up that bank account. we need to do that everywhere. >> speaking of storage and dams phylicia, the law requires that dams release water for fish and water be left in the delta for fish. but if towns are running out of water, can those laws be loosened? and should they be if they -- even if they drive certain species to extinction? >> well, i think there's still

plenty of room for balance there. i think the standards for fish depends on who you're talking to. some people resent them and it's a challenge because the standards that have come in for fish since the '70s and '80s have in fact redirected water that folks were relying on for a long time. but our species are also important not just for the idea of them but for commercial fishermen who also rely on it just as farmers rely on water to grow their crops. in fact a lot of flexibility has happened during the past few years where standards have been cut by various agencies including mine to make up for that to deal with the fact particularly when you're dealing with public health and safety issues you want to make sure the water's there. but that amount of water isn't going to make a difference in the drought. it makes a difference to someone, but we need species. we need public health and safety. and we need agriculture. so it's really arguing over the margins. everybody's getting hurt.

species are -- >> there's not one solution here. you need storage. we need reservoirs to provide storage. a lot of those reservoirs are providing cold water fisheries. but what we have done when we built california is we built it for human consumption, human use. we didn't plan for the fish. if we were to go back 100 years before we did all this and we were thinking human consumption as well as fish we would have done a better job of planning. so it takes conservation. there's still a lot of room to do conservation. storage is critical. recycled water and desal. your reservoirs -- your photographs at the beginning of the slides showed the reservoirs that carried us through to where we are. >> is desal viable, though? it costs a lot of money and it has certain threats to the environment. fish can be sucked in. >> it depends -- i think desal is part of the portfolio. and this administration has a water action plan which is an all of the above strategy versus arguing over one or the other. we're not going to just conserve our way to the future. we're not going to just store our way to the future. we have to augment supply

through recycling and storm water capture. desal has a place in that portfolio in a place like san diego where they don't have groundwater basins that they can manage conjunctively where the very junior water rights holders at the end of the pipe they view that's an important piece of the portfolio. some places on the central coast don't have some of the same options as folks near the sierras. it will play a role but it does have some environmental consequences, energy consumption, and it's more expensive. so it's a tool to be used in the appropriate -- >> i know we'll get letters if we don't come back to the water meters. so just quickly tell us why is it there are some places we're not even measuring how much water people use? and i think people have take ten it for granted. now state law is requiring it. but it had a very, very long lead time and we should be metering water all over the place. you cannot manage what you don't measure. and it's good that sacramento voted to accelerate. we gave low-cost loans to fresno for them to accelerate theirs. but really being able to measure how we use water is an essential

phase to figuring out how to manage it not just in the large scale but even in the smaller scale. the public needs to know how much they're using so that they can use that. energy has gone much further in this regard, where they can tell where their water use is. it would be fabulous in the places like sacramento that are going to smart meters, people are going to be able to tell where there are leaks because all of a sudden they know they're running water at 2:00 a.m. or they're going to know they're using it outside, and people get very clever once you give them information. >> we are running short on time. we could have a whole other conversation about smart meters. i know that. and so much more to talk about here as well. thank you all very much. phylicia marcus from the state water board. paul wenger from the california farm bureau federation. and beau goldie from the santa clara valley water district. thanks to all of you very much. >> thank you. >> i have a feeling you're all coming back on the show -- >> that went way too fast. >> one of the things for your viewing audience -- >> we've got to wrap it up. we'll continue talking. >> thank you. for all of kqed's news coverage please go to kqednews.org.

>> i'm scott shafer. thanks for joining us. >> and i'm thuy vu. have a good night. ♪ ♪ ♪