Delta Reclamation District Financing and Budgets

This report explains the financing of the 93 reclamation districts that maintain the Delta’s levees.

Reclamation districts’ primary method for raising funds is through assessments, which are levied on a per-acre basis upon property owners within a district’s boundaries. Assessments are subject to Proposition 218 procedures, and they must be approved by a vote of the affected people. A second financing tool that reclamation districts have is charging fees for services, such as irrigation or drainage services for landowners. In addition to relying on these direct financing tools, reclamation districts can also receive funds from the State or from other entities.

According to data from the State Controller’s office, the median Delta reclamation districts have annual budgets of around $370,000, with property assessments serving as the primary source of revenue. Typical assessments in these districts are about $32 per acre. State funding is a supplementary source of revenue for these districts, making up about 30 percent of total revenues. On the expenditure side, more than 80 percent of typical reclamation districts’ expenditures are for “services and supplies,” which includes levee work, but also other expenses. Only 12 Delta reclamation districts have long-term debt, so State funding appears to have been successful in helping Delta reclamation districts avoid overly burdensome debt levels.

The State has concentrated its reclamation district funding on certain strategic islands. Ten reclamation districts have received 62 percent of state funding over the past five years. These 10 reclamation districts that receive the most state funding also tend to have much higher property assessment rates compared to other reclamation districts. This suggests that reclamation districts are increasing their assessment rates as the State steps up its funding.

Finally, reclamation districts receiving a large amount of state funds also spend much more on services and supplies, even after controlling for the size of the reclamation district. This difference suggests that reclamation districts that are not receiving significant funding from the State are primarily paying for levee maintenance projects rather than undertaking large-scale levee improvement projects.