Delta Caucus Town Hall Challenges Financial Feasibility of Delta Tunnels

Senator Bill Dodd (D-Napa) and Assemblymember Jim Frazier (D-Discovery Bay) begin the town hall on the Delta Tunnels in Walnut Grove. Photo by Dan Bacher. |  

By Dan Bacher |  December 6, 2017 |  

On the morning of November 30, Assemblymember Jim Frazier (D-Discovery Bay) and Senator Bill Dodd (D-Napa) held a town hall in Walnut Grove that examined the financial feasibility of the Delta Tunnels and discussed related issues, including the recent report by the State Auditor Elaine Howle's Office that documented the project's major cost over-runs and mismanagement.

Over 200 people, including family farmers, fishermen, business owners, and local residents, showed up at the Jean Harvie Community Center to hear the speakers and show their opposition to the California WaterFix, a project that could cost a total of anywhere from $18 billion to over $68 billion.

After Mike Tilden and Jordan Wright of the State Auditor's Office discussed their report on how the cost of tunnels planning skyrocketed from $13 million to $280 million, Assemblyman Frazier said, "All I can say, honestly, is thank God for the state auditor’s office."

The State Auditor's report concluded that the planning phase of the project experienced “significant cost increases and schedule delays because of the scale and increased complexity of the project."

The audit also pointed out that although DWR used a “robust selection process” to select its first program manager, the URS Corporation, it later used “other methods” to select a replacement program manager, the Hallmark Group, breaking state contracting law. The Hallmark Group was chosen in a “sweetheart deal” made at the request of the Metropolitan Water District of Southern California, a key proponent of the Delta Tunnels.

“Hallmark did not have on staff an individual with the required license,” stated Wright. “They didn’t have a licensed architect, engineer, or general contractor. Similarly, DWR was not able to provide us any evidence that they had followed a competitive process and evaluated Hallmark’s competence and qualifications to provide those services.”    

The legislators delivered scathing assessments of the Delta Tunnels project during the hearing.

“The WaterFix is one of the largest, most costly public works project ever proposed in California,” Frazier said.  "The recent state audit cited cost over-runs that are out of control. The audit also found the Department of Water Resources failed to complete a basic cost-benefit analysis and has mismanaged the project.”

"I'm a general contractor, and I've never started a project when you don't know the costs of the project," Senator Bill Dodd emphasized, in response to a presentation by Cindy Messer, Deputy Director of the Department of Water Resources (DWR) responding to the audit.

"There is a possibility of the project not going forward if it doesn't measure up. If it doesn't measure up, you don't have a plan B. If it doesn't measure up, the state has just spent a whole lot of money accomplishing nothing,” said Dodd.

Senator Steve Glazer also expressed frustration that the Legislature  cannot approve or weigh in on this project. Messer responded that she could not speak on behalf of the Jerry Brown administration.

The room was packed with Delta residents and many lined up to speak during the public comment period. In an amazing show of solidarity, every person who testified voiced their strong opposition to the controversial project.

The only two people who showed support for the project at the hearing were Messer and another DWR staffer. Responding to criticism by the legislators that they hadn't developed a financial or cost-benefit analysis for the project, Messer said they weren't able to conduct the analysis without knowing which water districts are willing to fund the project.

Messer said that was "the critical piece of the puzzle that we need to complete the two analyses, financial and economic."

She also said that "as somebody who once worked as an environmental scientist, this project can have benefits for the ecosystem,” in response to the plethora of scientific reports and lawsuits that say the construction of the Delta Tunnels would in fact harm Sacramento River winter and winter-run Chinook salmon, Central Valley steelhead, Delta and longfin smelt, green sturgeon and other fish species.

Dr. Jeffrey Michael, executive director of the Center for Business & Policy Research at the University of the Pacific, gave a well-received power point presentation on the Center’s recent report, “Benefit-Cost Analysis of the proposed California WaterFix." He revealed how the costs of the project would greatly outweigh the benefits.

“The conclusion of the benefit-cost analysis, we hear about how terrible the status quo is, but when you get benefit cost ratios of 23 cents to 39 cents on the dollar, what that’s telling you is that your solution is worse than the status quo. Your solution is more costly than the costs of the problem,” said Michael.

Michael also addressed the "one tunnel" proposal that Santa Clara Valley Water Districts and other agencies appear to prefer. Michael said he didn't see how "one tunnel is the solution. There are a lot of alternatives out there" to consider.

After Michael spoke and the legislators answered him a number of questions, the public comment period began.

Responding to Messer's comment that the Delta Tunnels would provide "benefits" for the ecosystem, Tim Neuharth of Steamboat Acres Farms on the North Delta said, "DWR says this is all about restoring the ecosystem of the Delta. How do you justify taking more water out of the Delta to 'improve' the ecosystem?"

Cynthia Lau, who works with Restore the Delta, made a statement on behalf of Tim Stroshane and Barbara Barrigan-Parrilla, Executive Director of Restore the Delta, who were busy that morning filing testimony with the State Water Resources Control Board opposing the approval of permit to change of points of diversion to construct the Delta Tunnels. The statement read:

"Mr. Stroshane wrote the initial letter to Senator Wolk and Assemblymember Eggman requesting the audit for CA WaterFix. Ms. Barrigan-Parrilla worked on a number of the PRA requests and research that uncovered problems with expenditures for the project. They are grateful that the Delta Caucus is holding this hearing today, but also want to urge its members to use their legislative power to insist that CA WaterFix produces a peer-reviewed financial plan for the project that explicitly shows which contractors will pay what share for the project.

In addition, we urge this body and the entire legislature to insist that CA WaterFix produces a peer-reviewed cost benefit analysis showing the economic value of freshwater to the Delta, the San Francisco Bay, and California's coastal economies. The key financial documents must be completed before the state embarks on billions of dollars of new debt.

Ms. Barrigan-Parrilla also asked that I read this direct statement to you: 'When Restore the Delta was founded, I took on this work out of love for the physical environment and for the people of the region - both rural and urban communities.  Eleven years later, I have great fear that this project will harm economically working people throughout California, who will end up paying the bill, but who will not share in the economic benefits of the project, and who will be outright harmed by higher water bills without a secure water supply. The legislature has the power to ensure that California builds an environmentally and economically sustainable water future, and to reign in this boondoggle project. Please act thoughtfully and boldly. Thank you."

What will come of the hearing?

Both Frazier and Dodd say they are considering introducing legislation in 2018 that would require the state government to publicly disclose the details of major cost overruns and changes in public works projects like the California WaterFix.

Frazier indicated that he will hold future hearings on the Delta Tunnels as needed. "We will do this again until we get consensus from our agencies," he concluded before adjourning the hearing.

To view the video of the town hall, go to: a11.asmdc.org/... 

Delta Coalition Submits Testimony for Water Board Hearings on Tunnels

Also on November 30, Earthjustice, representing Restore the Delta, submitted detailed testimony from a coalition environmental, recreational, tribal and public trust advocates for Part 2 of State Water Resources Control Board (SWRCB) hearings on the Delta Tunnels (California WaterFix), slated to begin January 18, 2018, reported a news release from RTD.

"The SWRCB’s hearings will focus on whether the California Department of Water Resources’ and the U.S. Bureau of Reclamation’s requested permits for new water intakes on the Sacramento River are in the public interest. These intakes would feed the tunnels and divert essential freshwater flows south, further damaging the water quality, ecosystems, and residents that rely on a healthy Delta," according to Restore the Delta.

This coalition of Delta advocates includes Executive Director of Restore the Delta=Barbara Barrigan-Parrilla, Government Affairs representative for the Winnemem Wintu Tribe Gary Mulcahy, Delta fisherman and hunter Roger Mammon, and water rights author and Policy Analyst for Restore the Delta Tim Stroshane.

In their opening statement, Restore the Delta notes that the construction and operation of the proposed dual tunnels through the Delta would: 

1) Constitute an unreasonable method of diversion of water;

2) Eliminate suitable habitat for endangered species like the giant garter snake and various native fish species;

3) Increase toxic selenium contamination in SF Bay-Delta waterways;

4) Fail to follow the law requiring that beneficiaries of the water diverted by the tunnels project pay the full costs of the project;

5) Fail to serve the public interest in terms of environmental benefits and of the economic interests of Californians;

6) Degrade water quality for Delta water users and Northern California tribes.

In addition, the project proposal does not:

7) Provide a financial plan or a cost-benefit analysis for proper public review despite the project’s estimated 17-billion-dollar cost;

8) Protect southern California environmental justice communities receiving imported water supplies through Metropolitan Water District of Southern California (MWD) from substantial increases in domestic water bills;

9) Allow for transparent public oversight of the project, due to the proposed creation of multiple Joint Power Authorities whose decisions would be shielded from public review.