Just months after Gov. Jerry Brown’s plan to shore up
California’s water system with two giant tunnels won key
approval from regulators, the $17 billion project is running
into potential financial problems.
The dozens of agencies that have expressed support for the delta
tunnels as a way to ensure that they get more reliable water
deliveries, from Silicon Valley to the Central Valley to Los
Angeles, are supposed to produce financial commitments in coming
weeks. Many, however, appear reluctant to sign on.
Officials with the sprawling Westlands Water District in the
western San Joaquin Valley, the state’s largest agricultural
supplier, voiced concern on the eve of a Tuesday vote that the
cost won’t justify the benefit. Westlands is the first major
agency to vote on whether to help pay for the tunnels, and its
decision is likely to influence other water districts around the
Those districts won’t know exactly how much they — and their
customers — will have to pay until all the suppliers have spoken.
“It’s kind of a chicken-and-egg thing: Do you support the
project or not?” said Robert Shaver, general manager of the
Alameda County Water District, which serves Fremont, Newark and
Union City and gets 40 percent of its water from state water
“We can’t determine what the cost is going to be without knowing
who is supportive of the project, but it’s hard to support the
project” without knowing the cost.
Whatever the financial obligation turns out out to be, it’s
certain to prompt water agencies to raise rates.
The governor’s plan calls for a pair of 35-mile-long tunnels to
be built through the Sacramento-San Joaquin River Delta for
moving water from the north state to the Bay Area and Southern
California. Proponents of the project say the delta’s current
system of canals and levees is crumbling, and without the
upgrade known as California WaterFix, statewide water deliveries
as well as local wildlife will suffer.
The cost of the project is supposed to be split among the
agencies that receive delta water, with each paying a portion
commensurate with their allotment. But some smaller water
agencies have already decided it will cost too much and have
That raises the cost for all those that remain.
The Alameda County Water District, which serves about 350,000
people in the East Bay, hasn’t scheduled a vote on whether to
commit to the project. The larger Santa Clara Valley Water
District, which also relies on delta water for about 40 percent
of its supply, has agreed to make a decision next month, though
it remains equally uncertain about which way to go.
“The district continues to evaluate the project,” John Varela,
board chairman for the Santa Clara Valley agency, said in an
email. “We are methodically reviewing a combination of water
supply possibilities, weighing the risks, and focusing on cost
control to make the best investment decisions for the future of
Santa Clara County.”
State officials say agencies that don’t help pay for the tunnels
won’t be entitled to their benefits. At stake, officials say, is
a boost in water supply of up to 20 percent when the new, more
efficient infrastructure is in place.
Erin Mellon, spokeswoman for the California Department of Water
Resources, said Monday that while there’s no timeline for water
agencies to make their funding decision, they need to do so soon
so the project can get off the ground. The department would like
to begin building the tunnels as early as next year. The work is
expected to take at least a decade.
“If there aren’t enough water contractors at the table, we’ll
have to go back and reassess the project,” Mellon said.
Downsizing the work is the obvious alternative, though what form
that would take remains unclear. Any new proposal would have to
undergo the same regulatory scrutiny that the tunnels plan has
endured, a process that could take years.
In July, WaterFix won a long-awaited approval for its
environmental review, overcoming environmentalists’ concerns
that the project could harm water quality and endanger fish runs
in the delta.
Managers of the Westlands Water District, which provides water
to farmers across 1,000 square miles of Fresno and Kings
counties, released financial projections last week that suggest
the math might not work out in their favor.
Westlands is among several water agencies that get their water
not from the state but from the federal government, which also
plans to use the twin tunnels to move water. The federal
contractors are being asked to foot 45 percent of the total
bill, with state contractors taking up the balance.
According to the district’s report, the billions of dollars that
Westlands might have to commit to the project would force the
district to more than double water rates for growers. And if
additional water agencies decline to commit to the project,
rates could rise even further.
“There’s a lot we don’t know,” said Sarah Woolf, a Central
Valley farmer and Westlands board member. “Honestly, I don’t
know that we’re at a stage that we can vote.”
A legal challenge filed last week also threatens to undermine
the financing of the tunnels proposal. Six groups submitted
court papers contending that the state can’t legally issue bonds
to pay for WaterFix because the project faces too much
uncertainty, from pending lawsuits over its environmental impact
to a failure to identify its funders.
“They haven’t even reached agreement on who’s going to pay what
percentage,” said Bob Wright, an attorney representing Friends
of the River, Restore the Delta, the Planning and Conservation
League, and the Sierra Club California.
Wright fears that the state will come up short on money for the
tunnels but still choose to proceed and pass the debt on to
“People who don’t benefit,” he said, “will have to foot the