Water policy discussions roil on

California legislative leaders emerged from closed-door sessions late Sunday and said they had inched closer to a broad-ranging pact that would overhaul the state’s water policy and pour billions of dollars into ecosystem and infrastructure improvements.

Working through the weekend in pursuit of a water deal that has repeatedly eluded them, Republican and Democratic leaders said they hoped to present a water package to their respective caucuses within two days. And Gov. Arnold Schwarzenegger, backing off from a weekend deadline he had set for lawmakers to forge a deal, called a special session on water issues to begin this week.

“Even though you may have the framework of a deal, the details really matter,” Senate GOP leader Dennis Hollingsworth (R-Murrieta) said as he walked into a Sunday afternoon negotiating session.

The governor, who has sought a huge water bond to finance new dams and reservoirs for several years, last week had threatened to veto hundreds of bills if Senate and Assembly leaders didn’t finalize draft legislation on water issues by the end of the weekend.

Lawmakers had complained the deadline was arbitrary and that they had labored for weeks to craft a package that could win approval in the Assembly and Senate.

“People need to recognize that even though they may have their own pet bills, things like docking cow tails aren’t nearly as important as delivering water to farms, cities and the rest of Californians,” Hollingsworth said.

“We’re making progress. But it’s hard to say how close you are until you get there.”

Many of the points of contention are rooted in the fine print of the draft legislation drawn up by Democrats last month.

Republicans object to a proposed requirement for statewide groundwater monitoring, which agricultural groundwater users complain could lead to state intrusions on private property.

Some water districts are lobbying for changes in a proposed urban conservation provision that would mandate a 20% statewide cut in per-capita water use. They fear that if they fail to meet the conservation targets, a long-standing state requirement for the reasonable and beneficial use of water could be invoked against them. They want to be protected from that possibility.

Communities in the Sacramento-San Joaquin Delta want more representation on a new state council that would help manage the delta, the deteriorating heart of California’s water works.

East Bay utilities want their water rights protected under any new rules concerning the delta.

But acceding to such a laundry list of demands could cost the proposals key support from other interests, jeopardizing passage. That has led to a legislative minuet of revisions and consultations.

The precise size and timing of a proposed bond that would pay for delta restoration, water supply improvements and new storage have been a matter of ongoing debate.

In a bid for Republican support, Democratic leaders last month proposed a $12-billion general-obligation bond package.

But concerns about the size of the debt payments have lawmakers talking of a smaller bond or different ways of financing part of it.

State Treasurer Bill Lockyer has warned that saddling California’s battered general fund with a huge water bond package “would require cutting even deeper into crucial services already reeling from billions of dollars in reductions.”

Every billion dollars in new general obligation bonds adds $65 million a year to the state’s debt service, according to the state Legislative Analyst’s Office. Lockyer argues that new water projects should mainly be financed by users, not the general public.

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bettina.boxall@latimes.com

Times staff writer Eric Bailey in Sacramento contributed to this report.