Delta Tunnels Construction JPA Greenlights Professional Services Agreement with the Hallmark Group; Finance JPA Set to Pursue EPA WIFIA Loans
July 19, 2018
Today, the Construction Joint Powers Authority for the Delta tunnels, or Delta Conveyance Design and Construction Authority, met in Sacramento and authorized their interim Executive Director, Jill Duerig—former General Manager of Zone 7 Water District—to implement a professional services agreement with the Hallmark Group to “provide transition services.”
In the fall of 2017, The Hallmark Group and the Department of Water Resources came under fire after the results of a state audit completed by Elaine Howle revealed that,
“DWR did not follow state law when it replaced the program manager for the conservation and conveyance program. Specifically, DWR selected the Hallmark Group (Hallmark) to provide program management services without advertising a request for qualifications, and DWR could not demonstrate that it ever evaluated Hallmark’s qualifications for this role. The cost of DWR’s current contract with Hallmark has tripled from $4.1 million to $13.8 million.” (California State Auditor Report).
Earlier in the day, the Finance JPA authorized Executive Director Duerig to develop and submit a Letter of Interest for $1.6 billion in WIFIA loans to the U.S. Environmental Protection Agency.
As of today, the project is still roughly $ 5 billion short of its $16.7 billion price tag—a figure that does not factor in additional expenses from construction delays and cost overruns.
Barbara Barrigan-Parrilla, Executive Director of Restore the Delta, said,
“The state audit should have marked the end of the Hallmark Group’s involvement in the Delta tunnels project. Continuing to include Hallmark in planning and construction for the tunnels only further alienates and discourages the public’s trust in this project.
“At today’s meetings, Restore the Delta realized that the Calvert rider is necessary to secure WIFIA loans for the tunnels project. Tunnels proponents need to eliminate lawsuits in order to qualify for favorable loan terms from the federal government. Ultimately, if this rider passes the senate and the tunnels are built with additional funding via a public-private partnership (or P3), management of the San Francisco Bay-Delta watershed and its tributaries will be in the hands of the P3’s private investors.
“Repayment for the WIFIA loans will not commence until five years after the project is completed. If there were zero construction delays, which is highly unlikely, repayment would begin in 2035. The problem is climate change modeling for the project has only been completed through 2030. The Brown Administration, Metropolitan Water District of Southern California, Kern County Water Agency, and Santa Clara Valley Water District are gambling with huge debts that our children and grandchildren will be on the hook for, without knowing if there will be any water in the tunnels. The push for this project can only be described as water management madness.” Even for thos who are agnostic about the tunnels, this should be very troubling.
This update has been authored by Barbara Barrigan-Parrilla with Restore the Delta.
The Sierra Club Loma Prieta Chapter and Restore the Delta are collaborating to protect the Delta.
Water District Supports Delta Bypass “WaterFix” with Conditions
November 10, 2017
It’s been an eventful past few months for Governor Brown’s Delta tunnels project, culminating with the Santa Clara Valley Water District (SCVWD) Board’s decision to participate in a State Water Project (SWP) version, if certain conditions are met. Almost weekly bad news for the Fix has been difficult to assess, especially given the State’s lack of transparency about the project. It’s no surprise that opinion pieces and news stories called the Board’s decision anything from a vote in support of the project to a victory for project opponents such as the Sierra Club and Restore the Delta.
Now the State Department of Water Resources (DWR) says it will work the SWP contractors to figure out how to downsize the project. They are considering building only one tunnel, potentially as part of a phased project, which might be allowed under existing approvals for a dual tunnel project.
Santa Clara Valley Water District Conditions
The SCVWD Board’s conditions are:
Santa Clara County needs are the primary drivers in all our decisions involving the WaterFix project.
We will not allow Silicon Valley values and priorities to be placed at a disadvantage relative to Central Valley Agriculture or Southern California.
We are advocating for a flexible approach that addresses Silicon Valley stakeholder and community input (staged project starting with one tunnel).
As water is a human right, we must make investments to make sure our water supply meets future needs at a cost affordable by everyone (per acre foot cost remaining similar to current estimates).
Equity and costs are important.
Any final arrangement must provide flexibility to acquire supplemental water by taking advantage of future wet years to ensure residents have a reliable water supply, no matter what extreme weather the changing climate brings.
Keep negotiating for the best deal for Santa Clara County.
If the Board stands by these conditions, SCVWD will never be part of the project, since it’s inevitable that the estimated cost per acre foot will increase substantially. However, the Board can change these conditions in the future.
Continuing Advocacy in Santa Clara County
The Loma Prieta Chapter Water Committee has actively advocated for SCVWD to develop a water supply approach that will reduce reliance on the Delta as stipulated in the Delta Reform Act of 2009. Standout advocates Les Kishler and Meg Giberson each spoke at several meetings and also shaped our message and approach to fighting the Fix. Chapter activists helped bring about SCVWD’s more conservative stance on the project.
All us environmental activists need to continue following the District’s activities related to the WaterFix and imported water supplies from the Delta and its tributaries. Keep an eye out for future announcements about how you can get involved. The Board cannot ignore a multitude of constituents coming to meetings and reminding them we don’t want our water rates and property taxes increased to destroy the Delta when many better water supply options are available. Please join us!
For more details on what happened with the WaterFix, see Friends of the SF Bay Estuary’s Fall 2017 Updates.
Sierra Club Loma Prieta Chapter
The Sierra Club statewide is working to oppose Governor Brown’s proposal for twin tunnels in the Sacramento River Delta to facilitate continued water exports southward. Sierra Club California’s Director, Kathryn Phillips, and her team are leading the fight against the tunnels. The Loma Prieta Water Committee is advocating locally with the Santa Clara Valley Water District which has supported the Delta tunnels because the District imports water from the Delta (40% of the county’s water supply!). However, our efforts are making a difference and SCVWD is becoming more skeptical about the project now. Come join a Water Committee meeting and hear about what we are doing and what you can do to help. In the meantime, here is a message from Sierra Club California that details the current status of the twin tunnels proposal.
July 25, 2016
Will the Delta tunnels get built? Plan enters critical make-or-break phase
Next six months will be crucial to $15.5 billion project.
Project still lacks support from many water agencies.
Many in Delta region vow to continue to fight
BY DALE KASLER AND RYAN SABALOW
Still swirling in controversy, Gov. Jerry Brown’s proposed $15.5 billion re-engineering of the troubled Sacramento-San Joaquin Delta is heading into a critical phase over the next year that could well decide if the project comes to fruition.
Crunch time starts Tuesday. The State Water Resources Control Board begins months of grueling public hearings on the details of Brown’s plan to burrow a pair of massive tunnels beneath the heart of the Delta, a grand public works project designed to shore up the reliability of water deliveries to millions of Southern Californians and San Joaquin Valley farmers.
As the hearings plow forward, project planners will be scrambling to surpass another major milestone: securing a declaration from two U.S. regulatory agencies that the tunnels could operate without violating the Endangered Species Act.
Tunnel proponents say it’s essential to obtain that document before President Barack Obama leaves office next January. Otherwise the state might have to revisit much of the planning with a new administration in the White House, squandering eight years of work.
“You have certain windows in which you have to get things teed up and completed, and this window is six months,” said Jeffrey Kightlinger, general manager of the Metropolitan Water District of Southern California. The influential Los Angeles agency, probably the most vocal tunnels advocate outside of the Brown administration, relies heavily on Delta water to supply its 19 million customers.
Another key issue looms. Kightlinger said a “decision point” is fast approaching for south-of-Delta water agencies, which would be responsible for paying for the tunnels, to choose once and for all whether they’re on board. The agencies’ governing boards need to greenlight the proposal sometime early next year, Kightlinger believes, or momentum will fade on a project that will take at least a decade to complete.
“You need to get these processes started; we need to get going on the design; you need to get going on your geo-technical,” Kightlinger said. “You’ve got a whole huge timeline that’s got to be marching along.”
Metropolitan hasn’t officially committed yet, either. But it has clearly signaled support, including spending $175 million to buy a cluster of Delta islands that Kightlinger said could be used to store construction materials as the tunnels get built.
Other water agencies have been more lukewarm, citing uncertainties about how much water the tunnels could deliver.
“Support varies,” said spokesman Shane Hunt of the U.S. Bureau of Reclamation, the state’s partner in the tunnels proposal. “We are working with our contractors and our state partners to work out key details related to financing and operating criteria.”
Practically everyone agrees that the next year could prove definitive to the project, which Brown argues is essential to California’s water future.
While a rainy winter has eased the drought, supplies remain tight, particularly south of the Delta. Farmers, environmentalists and other factions continue to wrestle over water distribution – most recently over a last-ditch effort by state officials to save the nearly extinct Delta smelt by letting a greater share of Northern California’s water wash out to sea this summer.
The tunnels proposal takes many of California’s divisive water debates – north vs. south, human use vs. the environment – and wraps them in one big emotional package.
Brown says the project would improve California’s water situation significantly. According to the administration, it would enable the State Water Project and the U.S. government’s Central Valley Project, operators of the giant Delta pumping stations near Tracy, to ship water to the San Joaquin Valley and Southern California with far fewer interruptions.
The governor’s rationale centers on the complexities of the Delta’s plumbing system. The existing pumping setup causes crucial river channels in the estuary to flow backward at times. This “reverse flow” confuses migrating fish, causing them to swim with the currents toward the pump intakes and predatory fish. Decades of pumping have degraded native fish populations and contributed to other woes, sometimes prompting environmental agencies to order a slowdown in pumping operations.
California WaterFix, as Brown’s project is officially known, calls for diverting a portion of the Sacramento River’s flow via new gravity-fed intakes more than 30 miles upstream, between Clarksburg and Courtland. The water would be piped to the Tracy pumps via two 40-foot-wide tunnels. This would eliminate much of the “reverse flow” problem, the state says, allowing the pumps to operate more reliably while doing less harm to fish.
The state water board hearings will represent a public trial of sorts, exploring impacts on water quality and other issues. Brown’s administration and the Bureau of Reclamation will have to defend themselves against claims that the tunnels would further harm the Delta and bring more ruin to its dwindling fish populations.
“This is the first real formal opportunity for those that are concerned or just downright opposed to the project to state their reasons why, and for us to present our evidence,” said Mark Cowin, director of the state Department of Water Resources, the lead agency behind the tunnels. “It gets much more real now.”
Separately, California voters in November will be presented with a ballot initiative that could effectively torpedo the tunnels plan. Proposition 53, the brainchild of Stockton agribusinessman Dean Cortopassi, would require a statewide vote on any public works project financed with at least $2 billion in revenue bonds. The water agencies funding the tunnels would have to borrow far more than that to finance WaterFix.
The project survived one legal headache last week. The state Supreme Court, overturning a lower-court order, ruled that state officials have the right to enter private property to conduct soil tests as part of the planning for the tunnels.
But project advocates are still dealing with a different legal issue. A Sacramento Superior Court judge recently invalidated an overarching governing blueprint called the Delta Plan. While the precise impact of the ruling is unclear, it casts something of a cloud over the tunnels plan.
“It’s just another indication … of how easy it is to stick a stick in the spokes and jam up the works,” Cowin said. “It’s just another indication of how this is always going to be an uphill scramble.”
THIS IS THE FIRST REAL FORMAL OPPORTUNITY FOR THOSE THAT ARE CONCERNED OR JUST DOWNRIGHT OPPOSED TO THE PROJECT TO STATE THEIR REASONS WHY, AND FOR US TO PRESENT OUR EVIDENCE. IT GETS MUCH MORE REAL NOW.
Mark Cowin, director, state Department of Water Resources
With all these hurdles, little wonder that Brown has brought in a heavyweight politico with environmental credentials to help move the process along. Earlier this month he hired former U.S. Interior Secretary Bruce Babbitt, who has extensive experience with California water issues, to work on the tunnels project.
For now, the most urgent issue is getting a declaration, known as a Biological Opinion, from the U.S. Fish and Wildlife Service and the National Marine Fisheries Service on whether the tunnels project could coexist with the Endangered Species Act. The document would spell out “reasonable and prudent measures” that state and federal officials would have to take in operating the tunnels.
Cowin said getting such a declaration before Obama’s presidency ends would represent “a big milestone” for the entire project.
It is hardly a slam dunk. An advisory assessment by the U.S. Environmental Protection Agency two years ago indicated the project could cause more harm to fish and violate the Clean Water Act by increasing concentrations of salt, bromide, selenium and other chemicals in the Delta.
Cowin, though, said the EPA’s report was based on “our preliminary draft work” and that the project since has been refined in numerous ways to address objections from regulators. “Based on our extensive collaboration, I believe we have given the fish agencies all the information necessary for them to carry out their authority,” he said.
He said he’s been told by a high-ranking Interior Department official, Deputy Secretary Michael Connor, that the environmental reviews are expected to be done before Obama leaves office.
At the same time, the two federal agencies are discussing an overhaul of the regulations that govern how much water can be shipped from north to south – and how much has to be reserved for the benefit of smelt, salmon and other species whose numbers have plummeted over the past decade.
The potential revamp of the pumping rules has created a new obstacle for the tunnels plan. Why? Because the prospect of stricter environmental regulations has many south-of-Delta water agencies wondering why they should spend $15.5 billion on Brown’s tunnels if they’re probably going to get less water anyway.
“How can we go to farmers and urban customers and say, ‘We’re going to pay our portion of this $15 billion project and we’re going to get the same amount of water or less?’ It doesn’t compute,” said Jason Peltier of the San Luis & Delta-Mendota Water Authority, which delivers Delta water to much of the west side of the San Joaquin Valley. “It’s totally inconsistent with the goals we started with, which are ‘we need to restore our water supplies.’ ”
At the south end of the Valley, farmers with the Kern County Water Agency also are struggling with the idea of paying for a project whose potential benefits are unclear.
“The question that still remains to be answered for Kern County certainly is whether or not we can make the final business case,” said general manager Curtis Creel. “Let’s say you’re going to put a new roof on your house and the contractor comes out and says certain things about the performance of a particular roof. If it’s a lot of money, you want some assurance that it’s going to perform.”
HOW CAN WE GO TO FARMERS AND URBAN CUSTOMERS AND SAY, ‘WE’RE GOING TO PAY OUR PORTION OF THIS $15 BILLION PROJECT AND WE’RE GOING TO GET THE SAME AMOUNT OF WATER OR LESS?’ IT DOESN’T COMPUTE.
Jason Peltier, San Luis & Delta-Mendota Water Authority
Cowin and other project supporters acknowledge that future water deliveries likely will decrease. But they say that’s all the more reason to build the tunnels: that without them, the environmental bottleneck in the Delta will become dramatically worse than it is today. Building the tunnels, they argue, would enable pump operators at least to deliver fairly healthy volumes of water.
Proof of that came earlier this year, Cowin said, when environmental regulators clamped down on pumping in an emergency effort to allot more water to smelt and salmon. As a result, water deliveries increased by just one-third, compared with a year earlier, even though a rainy winter had left Northern California reservoirs brimming with water for the first time in years.
That was a likely precursor to stricter environmental rules in the years to come. “It’s playing out before our eyes now,” Cowin said. “That’s no longer theoretical.”
Fifteen miles south of Cowin’s downtown Sacramento office, in a tomato patch at the north end of the Delta, farmer Russ van Loben Sels vowed to make the state’s job as difficult as possible.
Van Loben Sels, a fourth-generation grower, raises pears, wine grapes, tomatoes and other crops on 2,500 acres around Clarksburg and Courtland. Part of his land sits adjacent to one of the three spots on the east bank of the Sacramento River where new diversion points would be built, to draw water out of the river to feed into the tunnels.
Like most others in the Delta, van Loben Sels, 72, is dead set against the tunnels. He says pulling water out of the Sacramento River from a point upstream would harm farming operations in the Delta. Salinity levels would increase as more water rushed in from the ocean to fill the void, he contends, tainting the river water he draws on for irrigation.
“Everything that happens in the Delta depends on water,” van Loben Sels said. “It’s a big battle for us.”
But he’s confident opponents can throw up enough hurdles to stall the project indefinitely.
“There might be some permits, but they’ll get tied up (in court) for ages,” van Loben Sels said, squinting into the afternoon sun. “I don’t think this project will be built.”