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001G60 permitting, FERC licensing, and NEP A compliance. . ESA decisions have major economic impacts, and have created a regulatory drought in California's San Joaquin Valley (50% CVP water supply cut in 1993, a wet year). . In California, unlike other western states, the state operates a major water supply system. As a result of ESA-listed species, we now have federal biologists directing operation of the SWP on a day-to-day basis. Since California has about two-thirds of the nation's ESA candidate species, we expect to be faced with continuing federal preemption issues. State-Federal Coordination Issues . Some progress has occurred with terrestrial species. The gnatcatcher/California coastal sage scrub habitat coordination attempt is an example. DWR's Coastal Aqueduct, MWD's Domenigoni Reservoir, and CCWD's Los Vaqueros Reservoir demonstrated that projects which improve water management (but develop no new water) can be implemented -- at substantial compliance costs. ~. . Coastal Aqueduct example -- I year delay in ESA consultation due to USACE & USFWS internal conflicts, blunt-nosed leopard lizard round-up costs alone of $300,000 (about 70 lizards). [Hold up blunt-nosed t-shirt] . Aquatic species remain problematic -- for example, our Delta experiences. . As result of uncoordinated federal actions by EPA, USFWS, and NMFS, Governor requested establishment of formal fed coordination effort, leading to formation of Club Fed. . Subsequently Framework Agreement signed, to establish state-fed roles in water quality standard setting, water project operation, and long-term solution. . We find that feds have limited staff resources to participate with us in coordination actions, and especially in long-term Delta solution. USFWS and NMFS are experienced at regulating, but not at implementing solutions.