After marathon meetings over how to fix California's aging water system that two-thirds of the state relies on, state leaders say they are very close to an agreement.
Farmers and workers who've been pressuring them do so something after decades of inaction are, for the first time, optimistic.
"We are where we've never been before. So I'm confident," says Mario Santoyo, from the California Latino Water Coalition.
There appears to be agreement on 20 percent water conservation and more than $9 billion in bonds for storage like dams. That was apparently enough to avoid a mass veto of some 700 bills. Governor Schwarzenegger had threatened to do so if a water plan hadn't been on his desk by Sunday night, but he backed off.
"Because made enough progress and they focused like he said they ought to on water, he didn't go through with all the vetoes," says Aaron McLear, the governor's press secretary.
When asked if the governor actually had a plan on his desk, McLear said no.
Democratic leaders admit the threat worked to move them forward.
"I take threats seriously. He did a mass veto last year," says Assembly Speaker Karen Bass, D-Los Angeles.
The Governor posted on his Twitter account late Sunday a picture of himself acting on the bills before the midnight deadline. Critics say the threat didn't work and was never really serious.
"This is a governor that always wants action, action, action and this time he tried to threaten, threaten, threaten and he came up empty-handed. The Legislature called him on his game of chicken he played, and it was for the betterment of the state because there some important bills on there, like education and healthcare," says Steve Maviglio, a Democratic strategist.
The Governor vetoed 229 bills, but signed 478 including:
The governor is so confident that a deal is eminent that he's called a special session on water, though no date has been set.