MWD and Valley Water have yet to commit funds for Delta tunnel design

Metropolitan Water District has two seats on the Board of the Delta Conveyance Design and Construction Authority (DCA), and Valley Water (formerly Santa Clara Valley Water District) has one seat.  But to date, neither agency has committed to pay the DCA’s costs for the planning and engineering design for the single tunnel.

After the Department of Water Resources rescinded all approvals of the project on May 2, 2019, DWR gave the DCA a loan of $19.7 million, which allowed the DCA to continue engineering work on the project.

DCA xpenses
DCA FY 2019-20 income & expenses                             April 2020 Board packet

In August of 2019, three small desert water agencies (Santa Clarita, San Bernardino, and San Gorgonio) gave the DCA their share of the 2019/20 costs, which was $29.4 million.  The DCA’s plan was that the remaining State Water Contractors would give the DCA $101.6 million after approval of the Agreement in Principle for a Delta Conveyance amendment to the State Water Project Contracts. That did not happen, because the AIP negotiations were extended through April of 2020.  Although the DCA spent about a third of what was originally planned in FY 2019-20, the Department of Water Resources had to give the DCA a second loan of $9 million to pay expenses through the end of FY 2019-20.  There is no indication of how expenses will be paid in FY 2020-21.

DCA expenses June 2020
DCA FY 2019-20 income & expenses                            June 2020 Board packet

Although DWR has negotiated a Final Agreement in Principle with the State Water Project Contractors, the Tulare Lake Basin Water Storage District wrote Governor Newsom, requesting that the state not advance further funds to the DCA for the tunnel design.    The letter stated in part:

The most recently negotiated Agreement in Principle (AIP) for the SWP Delta Conveyance Contract Amendment was opposed by TLBWSD and at least one-third of the SWP Contractors… We do not want to participate in the DCF, and we object to DWR loaning our money to sustain the project. Given the State faces its harshest economic time in history, we ask that DCF funding by the State be placed on hold.

We asked Santa Clara Valley Water District to clarify when the District would pay for the District’s share of the DCA’s FY 2019-2020 expenses.  In response, Valley Water Board Chair Nai Hsueh stated,

Valley Water has been waiting for the Delta Conveyance facility project description to be better defined prior to making additional commitments.  We are careful about how we utilize the funds provided by our ratepayers and want a reasonable understanding of benefits, costs, and assurances before providing additional funding to the project.

We also asked when Valley Water would provide funding for Valley Water’s share of the DCA’s FY 2020-21 expenses?  In response, Chair Nai Hsueh stated,

After Valley Water has received additional information regarding benefits, costs, and assurances, Valley Water will bring a decision regarding additional funding for the project to its Board of Directors for consideration.  This may include both decisions regarding providing additional funding for DCA’s FY 2020-21 expenses as well as any reimbursement to DWR.

The Delta Reform Act of 2009 does require that the “persons or entities that contract to receive water from the Delta Conveyance” enter into contracts to pay for the “costs of the environmental review, planning, design, construction, and mitigation… required for the construction, operation, and maintenance of any new Delta water conveyance facility” prior to construction.

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