Lawmakers kept haggling Tuesday in their effort to reach a compromise, as the California Legislature prepared to vote on a package of bills intended to alleviate the state’s water woes.

Differences among Republicans and Democrats on key elements threatened to sink a complex supply and management plan for the growing state.

“I think the only thing we can really say at this point is we’re the closest we’ve been to getting a compromise water solution, but we’re still not quite sure what’s going to happen today,” said Jennifer Gibbons, a spokeswoman for Assembly Republican leader Sam Blakeslee.

The state Senate on Monday approved a nearly $10 billion bond package to pay for new water storage. It included dams long sought by Gov. Arnold Schwarzenegger and his fellow Republicans.

The Senate also sent bills to the Assembly that would require California’s cities to use 20 percent less water by 2020 and change how the fragile Sacramento-San Joaquin Delta is managed.

But senators failed to get the needed votes for companion legislation that would create a new statewide groundwater monitoring system and increase penalties on illegal water diversions.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said all the bills must be passed or the whole package fails. That’s because Democrats inserted contingency clauses in the bills as a way to leverage votes for the most controversial pieces of the package.

In a statement late Monday, Steinberg said he was confident the Senate would adopt the remaining bills.

The Assembly briefly convened Tuesday but recessed while negotiations continued between the governor and legislative leaders. The Senate was scheduled to resume debate later in the day.

The discussions center on creating an independent mechanism to govern the state's water supply, initiating a spending program for new water storage and conservation programs and establishing environmental safeguards for the Sacramento-San Joaquin Delta, the heart of California's water-delivery system.

Anticipating a drawn-out session, Gov. Arnold Schwarzenegger rescheduled his appearance tonight on “The Jay Leno Show” to complete the water deal, said spokesman Aaron McLear.

Speaking at a Tuesday breakfast in San Francisco, Schwarzenegger said a water deal was imminent, featuring a bond that would go before voters to provide some of the financing.

“This will be a historic accomplishment by the Legislature,” he said, but added: “It’s not over when the Legislature passes that because then it will go on the ballot.”

To get a bond measure on the ballot in 2010, legislative leaders need a two-thirds vote in the Democratic-controlled Legislature and will need some support from Republicans, who are likely to withhold their votes in the Assembly until the other bills in the water package are shaped to their liking.

The Legislature’s nonpartisan analyst’s office said the bond’s cost could force the state to spend 10 percent of its revenue each year to pay off debt.

The delta's future is tied to the reliability of the State Water Project, which could ultimately impact the water supply for the Coachella Valley.

The proposals up for discussion in Sacramento also could set new standards for conservation — 20 percent by 2020 statewide — requiring everyone to be more water-wise, though by how much would vary by region.

“If the state falls on its face here and does nothing, the reliability of the State Water Project is going to be highly, highly in question,” said Steve Robbins, general manager-chief engineer of the Coachella Valley Water District.

“You need to be able to store the water and you have to be able to move that water. If we don't do that and start working on these problems, the economy of the entire state is going to suffer.”

Republican and Democratic lawmakers have introduced competing bills that have similar outlines but differ on key points.

At the heart of the debate is the delta. The largest estuary on the West Coast, it provides fresh water to two-thirds of California's residents and irrigates thousands of acres of cropland.

Its place at the center of the state's water-delivery system has put the delta's ecosystem in peril, with the massive pumps that draw water south being blamed in part for declining fish populations.

The latest proposals address California's water problems on two fronts:

One set of policy bills would create a seven-member commission to oversee the environmentally fragile delta. It would mandate conservation and groundwater monitoring, while setting higher penalties for taking water illegally.

The companion bills would authorize $9.4 billion in bonds to pay for new reservoirs and underground storage, water recycling programs, local water projects and delta restoration. The bond would go before voters next year.

The early versions of the bond proposal led by Sen. Dave Cogdill, R-Modesto, includes $100 million for Salton Sea efforts, $20 million for the New River and $47 million for the Colorado River integrated regional water management plan.

The bond is “a down payment of the public-use portions of most of these facilities” and would require additional investment by the local users and other sources, said Sen. John Benoit. The bond could lead to a $27 billion investment into the state's water system.

The Bermuda Dunes Republican called the proposal “our best hope for getting a dam built in my lifetime.” But he was weary the debate over property owners' water rights could put a damper on the plan.

“Our biggest concern is the water rights issues and the attack on property rights that has been inserted by extreme environmentalists,” Benoit said before the floor session Monday.

“Nothing happening is still a distinct possibility. I'm giving it 50-50 at this point.”

Under the Democratic bills, money would be set aside for new storage without dedicating funding for specific dams.

Schwarzenegger, Republican lawmakers and farmers have pushed for strengthening the language to ensure that some of the money will go to building dams.

The two most likely locations for new reservoirs are in the Sacramento Valley north of the state capital and in the Sierra foothills above Fresno. A third proposal would raise the height of an existing dam in the eastern San Francisco Bay Area.

Rob Flanigan, chief of staff for Assemblyman Brian Nestande, said the Palm Desert Republican thought the bills included “sound policy” but had concerns with the bond.

The state already has $54 billion in unsold bonds and the proposal would add roughly another $10 billion to the pile, Flanigan said.

The Legislature's nonpartisan analyst's office said the bond's cost could force the state to spend 10 percent of its revenue each year to pay off debt.

“He thinks (the water reform) is necessary but in the future it's going to kill our state in terms of paying interest alone,” Flanigan said.

Placing the bond measure on a 2010 ballot requires a two-thirds vote in the Democratic-controlled Legislature and thus will need some support from Republicans, who are likely to withhold their votes until the legislation is shaped to their liking.

Dave Luker, general manager and chief engineer of the Desert Water Agency, said he is “satisfied” with the bulk of the proposals and said the agency would be “well positioned” to meet the proposed conservation goals.

He expressed support for adding storage and a conveyance system, but said “we just want to make sure they build it large enough that we don't have to talk about it again.”

He called this debate “as close as we've ever been in my career to solutions.”

“This is the Super Bowl,” Luker said of a package debate that could reform the state's water system.

“This is what we're in this business for, to make this happen.”

Erica Felci of The Desert Sun and the Associated Press contributed to this story.